Marketing Definition/a lesson

Q: Explain the meaning and definition of marketing. What are the different concepts of marketing and what do these concepts signify?

Ans: Marketing Definition= Marketing is the process by which an individual or group Create and offer goods or services to other individual or group to satisfy their need and wants.

More simply: Marketing is the delivery of customer satisfaction at a profit.

Marketing fulfills the gap between consumer and the goods or services.

The Fundamental Marketing Concepts are:

*Needs - state problem recognition or feeling deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am thirsty

*Wants – Want qualifies the need as it specifies if which good or service can satisfy the need like a person in thirst says

“I want a Coca-Cola.”

It is shaped by culture and individual personality.

* Demands - when human wants backed by buying power.

i.e. “I have money to buy a Coca-Cola.”

• Target Market- Target market is the group of prospective customers who share common characteristics like age, area, gender, income group Etc.

Like the target market for Pulsar motorcycle is the men of age ranging from 19 yrs to 45 yrs.

• Segmentation: segmentation is the process of determining the most appropriate group of customers that is Measurable, Accessible, Substantial, Differential, and actionable so that they can be served profitably.
• Positioning: Positioning always has an influence on the mind of the audience. The process puts the particular brand in the mind of the customers with certain image purposefully.

Like Pulsar motorcycle is positioned as a premium bike which is preferred by the young population.

The Aircel brand is being positioned as Multipurpose Gadget.

Lux is positioned as a product that beauty soap.

• Brand- Brand is a name, symbol, logo, tag line etc that is presented to the audience so that he can learn and recall the product of a particular manufacturer or marketer. Brand has other benefits as well like creating brand equity.

Nike has a brand Symbol--Swiss

• Value- Value is the want satisfying capacity of the product or service like Pizza can reduce hunger and a motorcycle can help you transport himself to some place.
• Marketing Channels: The channel partners like dealers, wholesalers, retailers who help an organization in execution of marketing activities.

Q 1. b) Give the difference between marketing and selling?

Ans: Many people mistakenly think that selling and marketing are the same - they aren't. You might already know that the marketing management process is broad and includes all of the following:

1. Discovering what product, service or idea customers want.
2. Producing a product with the appropriate features and quality.
3. Pricing the product correctly.
4. Promoting the product; spreading the word about why customers should buy it.
5. Selling and delivering the product into the hands of the customer.

Selling is one activity of the entire marketing management process.

Selling is the act of persuading or influencing a customer to buy (actually exchange something of value for) a product or service.

Marketing activities support sales efforts. Actually, they are usually the most significant force in stimulating sales. Oftentimes, marketing activities (like the production of marketing materials and catchy packaging) must occur before a sale can be made; they sometimes follow the sale as well, to pave the way for future sales and referrals.

Contrasting the Sales Concept with the Marketing Concept
The concepts surrounding both selling and marketing also differ. There is a need for both selling and marketing approaches in different situations. One approach is not always right and the other always wrong - it depends upon the particular situation.

In a marketing approach, more listening to and eventual accommodation of the target market occurs. Two-way communication (sometimes between a salesperson and a customer) is emphasized in marketing so learning can take place and product offerings can be improved.

A salesperson using the sales concept, on the other hand, sometimes has the ability to individualize components of a sale, but the emphasis is ordinarily upon helping the customer determine if they want the product, or a variation on it, that is already being offered by the company. In the sales approach, not much time is spent learning what the customer's ideal product would be because the salesperson has little say in seeing that their company's product is modified. Furthermore, they aren't rewarded for spending time listening to the customer's desires unless they have a product to match their desires that will result in a sale. (Note, however, that sales people aren't restricted to the use of the sales concept; oftentimes they use the marketing concept instead.)

At the heart of the sales concept is the desire to sell a product that the business has made as quickly as possible to fulfill sales volume objectives. When viewed through the marketing concept lens, however, businesses must first and foremost fulfill consumers' wants and needs. The belief is that when those wants and needs are fulfilled, a profit will be made.

Do you see the difference? The selling concept, instead of focusing on meeting consumer demand, tries to make consumer demand match the products it has produced. Whereas marketing encompasses many research and promotional activities to discover what products are wanted and to make potential customers aware of them.

Q 2: “A firmcan realize all its business goals by generating customer satisfaction. The idea may sound somewhat utopian. In reality, it is an imminently workable proposition.” What is the mechanism through which a firm puts the marketing concept into practice to give the concept of value and utility to the customer in making his purchase decision?

Ans: the mechanism through which a firm puts the marketing concept into practice to give the concept of value and utility to the customer in making his purchase decision is customer relationship management.

BE RELIABLE- consistent performance is what customer wants from us.

BE CREDIBLE- if the customer buy the product, he wants to safe and guaranteed.

BE ATTRACTIVE- body language.

BE RESPONSIVE– accessible, available and willing to help customer whenever the customer has a problem.

BE EMPATHIC- to be in customer’s shoes and grasp his point of view.

While customer relationship management can be implemented without major investments in software, software is often necessary to explore the full benefits of a CRM strategy.

CRM includes many aspects which relate directly to one another:

• Front office operations — Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.
• Back office operations — Operations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, marketing, advertising, finance, manufacturing, etc.)
• Business relationships — Interaction with other companies and partners, such as suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade associations). This external network supports front and back office activities.
• Analysis — Key CRM data can be analyzed in order to plan target-marketing campaigns, conceive business strategies, and judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability).

Q3a Concept of Strategic Business Unit

Ans: SBU is understood as a business unit within the overall corporate identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets. When companies become really large, they are best thought of as being composed of a number of businesses (or SBUs).

There are three factors that are generally seen as determining the success of an SBU:

1. the degree of autonomy given to each SBU manager,
2. the degree to which an SBU shares functional programs and facilities with other SBUs, and
3. the manner in which the corporation evaluates and rewards the performance of its SBU managers.

Q3 BCG Matrix

Ans: BCG Matrix (Boston Consulting Group)

This is two-by- two product portfolios i.e. multiple business/ products/activities are analyzed using Market Growth Rate and relative Market Share as parameters/ bases.

It has four segments. Namely 1) Dogs, 2) Cows, 3) Stars and 4) Question Marks

These business segments are categorized based on Cash inflows. The BCG model suggests that a separate strategy for each business segment.

Let us discuss the characteristics and strategy for each segment in detail.

1. Cash cows: The segment is characterized by low growth rate and high market share belong to this segment. Usually the products in this segment are in their post maturity stage. Where high market share brings higher cash flows and profit to the company. The strategy suggested is that company should take maximum benefit of this segment to earn money to provide financial base for the company.

2. Dogs: This segment is characterized by low growth rate and Company’s market share is also low. It means it is giving low profit to the company. In such conditions to make the product competitive is very difficult so the suggested strategy is to liquidate/sale the segment.

3. Question Mark: This segment has low market share but high growth rate. It means the marketing effort can make this business/product a cash cow so the strategy suggested is to invest more on this product to gain market share and profitability.

The products are called question Mark because they raise a question whether to invest more or not.

4. Stars: Products with high growth rate and high market share are called Stars. Stars generate high money, profit and represent the best investment opportunities for growth. The strategy suggested is to invest and maximize company’s high relative competitive position.

The procedure of building BCG Matrix.

1. Firstly the products/ business activities/ Strategic Business Units are classified
2. Each business segment is determined for their respective growth rate and their contribution to company’s market share.
3. Accessing the assets employed for each business segment and relative size of the business for the company
4. Each business segment is plotted on a matrix of growth and relative market share.

Q3c  Ansoff Matrix

Ans: The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.

The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy. These are described below:

Q3d Market penetration

Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.

Market penetration seeks to achieve four main objectives:

• Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling

• Secure dominance of growth markets

• Restructure a mature market by driving out competitors - this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors

• Increase usage by existing customers – for example by introducing loyalty schemes
A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

Q3e Market development

Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:

• New geographical markets; for example exporting the product to a new country

• New product dimensions or packaging: for example

• New distribution channels

• Different pricing policies to attract different customers or create new market segments

Q3f  Product development

Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

Q3g  Diversification

Diversification is the name given to the growth strategy where a business markets new products in new markets.

This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience.

For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks.

Ans: 1. Product 2. Price 3. Place 4. Promotion

1. Product

A product is anything that can be offered to a market for attention, acquisition, use or consumption. Like Toothpaste, Liquor, Book, Credit facility etc.

A product has a satisfying value like Book satisfies the information need of the buyer.

• It Includes: Physical Products, Services, Persons, Places, Organizations, Ideas, or Combinations of the above.

2. Price

• The price is the amount a customer pays for a product.

The price of the seller is the cost of the buyer.

It is determined by a number of factors including market share, competition, product identity and the customer's perceived value of the product.

Factors which are considered while pricing a product are:

• Pricing Policies, Margins, discounts and rebates
• Terms of delivery, payment terms, credit terms, and installation charges.
• Resale price, Maintenance etc.

3. Place

• Place represents the location where a product can be purchased like a consumer buys pen from a stationary shop, It can include any physical store like shop, mall, Exhibition-cum-sale place as well as virtual stores on the Internet like Amazon.com.

These days Internet is widely used for selling product online.

• It is often referred to as the distribution channel.

The major decisions taken under this are:

Channel of distribution, Types of Intermediaries, Location of outlets, Channel remuneration, Transportation, Warehousing and Inventory Levels.

4.Promotion

• Promotion represents all of the communications that a marketer may use in the marketplace.
• Promotion has four distinct elements - advertising, public relations, Personal Selling and Sales Promotion.

Advertising

• Advertising covers any communication that is paid for, from television and cinema commercials, radio and Internet adverts through print media and billboards.

Like Zoo-Zoo ad of Vodafone.

Public relation

• Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events

Announcement of Balance sheet especially Profit .

Personal Selling

• Personal Presentations by a Firm’s Sales Force.
• Selling Expertise
• Size of Sales Force
• Quality of Sales Force

Sales Promotion

• Short term Incentives to encourage Sales.

Q 1: “Marketing people are involved in marketing 10 types of entities: goods, services, experience, events, persons, places, properties, organizations, information and ideas”

Explain each one of them in brief and support your answers with examples?

Ans: Goods – Tangible objects that can be manufactured or produced for resale.

Service – An intangible product that is performed rather than produced, e.g., haircuts, insurance and dry leaning.

Experiences: Usually tourism industry provides the experience as a service product the beautiful sights of Indian places like Shimla, Kerla, Jaipur etc.

Events: Various live programs like cultural activities, sports, fairs, conference etc.

Persons: Like people who are engaged in providing any kind of services to customers like Mr.Amitabh Bachchan serves as an actor to the different producers.

Properties: Usually properties such as land, machines are given at rent.

Information and ideas: The consultants and call centers services are for providing Information and ideas to the services.

Q 3: Explain the different methods of sales forecasting?

Ans: The different methods of sales forecasting:

Introduction:

As the name indicates Sales Forecasting is an estimate of sales in a future period under a particular marketing management program. Forecasting is also made for the economic and other factors. A sales forecasting may be made for a single product or for an entire product line. Forecasting can be of two types:

1. Short term Sales Forecasting

When a forecast is made for a manufacturer’s entire marketing area or for any sub division of it then it is called as short term forecast. Because the market conditions are changing day by day, it is not practical to predict & plan for very long future period.

2. Long term Sales forecasting

Long-term sales forecast is that which is used for planning production capacity & for long run financial planning. This is the future period for which the decisions are taken in the present to save the future deficiencies. Basically between both the forecasts the short term forecast is important for Sales Executive, because:

* Operating or short-term sales forecast is the prediction of how much of a company’s particular products can be sold during a future period under a given marketing management programme.

objective of sales forecasting

To maintain good relationships with customers by providing them good quality products in the right quantity and at right time.

To check the sales of product and estimate of sales is made for future. Thereafter the actual sale is compared with the budgeted sales and if there are any deviations then corrective actions are taken.

How can sales of a product be forecasted?

A Sales forecasting is the procedure of estimating how much a given product can be sold if a given marketing programme is implemented. No sales forecasting can be absolutely correct, so there are various methods used for the sales forecasting of a product. These are:

1. Jury of executive Opinion:

This method is basically based upon the executive opinions. It means that the executives are well informed about the industry outlook, capabilities and marketing programs. They express their opinion as to what according to them is the sale expected in future.

Merits:

1. Quick and easy way to forecast.

2. Many experts poll their experience and judgment

Qualitative results (expert’s knowledge)

3. This method is used when the adequate information of the market is not available.

Demerits:

1. Affected by the personal views.

2. More workload of key executives

3. Only based on personal judgment and may be subjective or biased.

2: Delphi Technique:

This is basically the new version of the executive opinion. In this the people who are giving opinion are selected for their expertise. These experts give answers to the panel of questionnaires. The response to one questionnaire leads to the next questionnaire. Some contend that the technique eliminates the band wagon effect of the majority opinion. As everyone gets a chance to be heard.

3. Pool of sales Force opinion

This method is often referred to as “The Grass Roots approach”.

According to this.the forecast is combined and cumulated in such a way that management may use it for the company. It appeals to practical sales managers because the responsibility assigned to those who produce results. Thus the sales force responsible to produce results gives own prediction about the future expected sales.

Merits:

1. Specialized knowledge

2. Close touch with the market conditions

3. More confidence (forecast is correct)

4. More flexible- it can be changed according to the market needs.

4. Projections of past sales

This method of sales forecasting takes a variety of forms. This is very simple. To set the sales forecast for the coming year either we choose the same figures as the current year’s actual sales or forecast may be made by adding a set percentage to last year’s sales or to several past years. The formula of calculating the next year’s sale is:

Next year’s sales = This year’s sales/ Last year’s sales.

Q: What do you mean by Market research what ate the different methods of market research?

Ans: Market research is a process of searching vital information about market, consumer, demand, and competition and so on, to develop a marketing strategy and its application.

It can be also learnt as the process of collecting information, analyzing the result and presenting the findings and implications.

So the basic activities performed are:

*Collection

*Analysis

*Presentation

Thus market research is the link between the consumer and the marketer.

The stages in the Marketing research process areas followings:

1. Defining the problem

Then first stage in market research process is to define the research problem. It attempts to clarify the problem and create a clear-cut problem statement. It should also mention the purpose of the research.

2. Statement of Research Objectives

The research objectives are expressed in qualitative and quantitative terms. For example, “To find out the extent to which the sales are positively affected by sales promotional programs.

3. Planning a research Design

Research design is the master plan of methods, approaches, techniques, variables, data source, evaluation methodology, timing and costing of all research activities etc.

All these description help in understanding and executing research activities.

4. Planning a sample

Sample is the small part or some units of the population which is to be surveyed. While planning the sample, we 1) decide the sample size to be collected.

2) The type of sample data like primary or secondary etc.

3) The method of collecting samples, like random or consensus.

4) The variables to be used while collecting data.

5. Collecting the data

Data collection is an important part of marketing research. The emphasis is given on tools and methods of data collection. The popular methods used are observation method and communication method.

6. Analyzing the data

After collecting the data, next process is to organize the data systematically. It requires the editing and coding of data. The data is tabulated and classified in meaningful categories.

It is followed by application of the logic to the data collected. The statistical analysis may range from uni variate to multivariate analysis.

7. Formulating the conclusion and Preparing & presenting the Report

Having analyzed the data, the observation or analysis is interpreted into conclusions for use in managerial decisions.

The conclusion should be technically accurate, understandable, and useful.

The report is prepared as per the formats available for report writing. It carries all details from problem statement to conclusion.

The qualitative research is:

An exploratory process: The research is an effort to describe the object, concept, human behavior in certain situations or in general, or any market condition.

The quantitative research id used to generate insights o consumer behavior and consumer buying process.

Quantitative research is subjective and needs trained psychologist and interviewers.

The market research through qualitative research is done with the help of:

1. Exploratory research

2. Projective techniques, and

3. Observation methods.

Not much emphasis is put upon sample selection.

Q 5: What is service marketing? What are its characteristics?

Ans: “SERVICES ARE ACTIVITIES, BENEFITS, OR SATISFACTIONS WHICH ARE OFFERED FOR SALE, OR PROVIDED IN CONNECTION WITH SALE OF GOODS.”

Goods – Tangible objects that can be manufactured or produced for resale.

Service – An intangible product that is performed rather than produced, e.g., haircuts, insurance and dry cleaning.

Experiences: Usually tourism industry provides the experience as a service product the beautiful sights of Indian places like Shimla, Kerla, Jaipur etc.

Events: Various live programs like cultural activities, sports, fairs, conference etc.

Persons: Like people who are engaged in providing any kind of services to customers like Mr.Amitabh Bachchan serves as an actor to the different producers.

Properties: Usually properties such as land, machines are given at rent.

Information and ideas: The consultants and call centers services are for providing Information and ideas to the services.

Followings are the main characteristics of services:

Intangibility--- The customer purchases an intangible product like activity, benefit or something that satisfies him/her.

Perishability --- Comparing the quality of two similar services is very difficult because not much difference lies in the functional benefit of the service.

Irreversible: The buyer cannot return the service once consumes or experienced like having got hair cut from a salon the service offered cannot be returned.

Separability: The production and consumption of services occurs simultaneously.

Q 2 “Marketers are responsible for demand management”. What are the eight demand states which are possible under marketing management?

Ans: Various levels of consumer interest in the purchase of a product. At any given time there may be no demand, adequate demand, or too much demand for a given product, and marketers must be aware of these states of consumer demand in order to create a desired level of demand for their particular product.

1. Negative demand: consumers dislike the product and may even pay a price to avoid it.

2. Nonexistent demand: consumers may be unaware or uninterested in the product.

3. Latent demand: consumers may share a strong need that cannot be satisfied by an existing product.

4. Declining demand: consumers begin to buy the product less frequently or not at all.

5. Irregular demand: consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.

6. Full demand: consumers are adequately buying all products put into the marketplace.

7. Overfull demand: more consumers would like to buy the product than can be satisfied.

8. Unwholesome demand: consumers may be attracted to products that have undesirable social consequences.

Q 6: What methods of advertising and sales promotions will a company dealing in home appliances will adopt to its products?

Ans: methods of advertising a company dealing in home appliances will adopt to its products are:

1. Newspapers

1. Display advertisements
2. Classified Display
3. Preprinted inserts

2. Television

3. Magazines

4. Outdoor media

Sales promotion a company dealing in home appliances will adapt to its products is:

1. Buy one get one
2. rebates
3. Discount on quantity sales etc.

A) The distribution channel

Frequently there may be a chain of intermediaries; each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user.

Channels

A number of alternate 'channels' of distribution may be available: Selling direct, such as with an outbound sales force or via mail order, Internet and telephone sales

Agent, who typically sells direct on behalf of the producer

Distributor (also called wholesaler), who sells to retailers

Retailer (also called dealer or reseller), who sells to end customers Advertisement typically used for consumption goods This may involve a number of decisions on the part of the supplier:

Channel membership

Channel motivation

Monitoring and managing channels

b) Sales quotas:

Quotas are quantitative objectives assigned to sales organizational until they specify desired performance level for sales volume such as:

Expenses, gross margins, net profits & return on investment, selling & non-selling related activities, or some combination of these items.

Some companies set sales quota for organizational units such as individual, district & sales personnel.

Quotas are devices for directing & controlling sales operations. Their effectiveness depends upon the kind, amount & accuracy of marketing information used setting them & upon management skills in administering the quota system.

Objectives in using quotas

To provide quantitative performance standard;

To obtain tighter sales and expense control;

To motivate desired performance

To use in connection with sales contest

Types of quotas

Sales Volume Quota

Budget Quotas

Expense quota

Gross margin/net profit quota

Activity Quota: The Company defines the important activities sales personnel perform, and then it set target performance frequencies.

Combination quota

c) McKinsey 7s Framework:

Description

The 7-S Framework of McKinsey is a management model that describes 7 factors to organize a company in an holistic and effective way. Together these factors determine the way in which a corporation operates. Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy. Large or small. They're all interdependent, so if you fail to pay proper attention to one of them, this may effect all others as well. On top of that, the relative importance of each factor may vary over time.

The meaning of the 7 Ss

The interconnecting center of McKinsey's model is: Shared Values.

What does the organization stands for and what it believes in. Central beliefs and attitudes.

Strategy

Plans for the allocation of a firm’s scarce resources, over time, to reach identified goals. Environment, competition, customers.

Structure

The way in which the organization's units relate to each other: centralized, functional divisions (top-down); decentralized; a matrix, a network, a holding, etc.

Systems

The procedures, processes and routines that characterize how the work should be done: financial systems; recruiting, promotion and performance appraisal systems; information systems.

Staff

Numbers and types of personnel within the organization.

Style

Cultural style of the organization and how key managers behave in achieving the organization's goals..

Skills

Distinctive capabilities of personnel or of the organization as a whole.

Strengths of the 7-S Model. Benefits

1. Diagnostic tool for understanding organizations that is ineffective.

2. Guides organizational change.

3. Combines rational and hard elements with emotional and soft elements.

4. Managers must act on all Ss in parallel and all Ss are interrelated.

d) The holistic marketing concept is based on development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. Holistic marketing recognize that "everything matters" with marketing and that a broad, integrated perspective is often necessary.

Four components of holistic marketing are:

1. Relationship marketing –Relationship marketing approach takes care that the customers find a relation with the product or the company so that it may create business further.

2. Integrated marketing – This approach suggests that all marketing tools used for communication should be coherent and convey the same appeal to create desired.

3. Internal marketing, and

4. Socially responsible marketing

Q 4. What is the purpose of marketing environment analysis and the factors to be covered under environment analysis?

Ans: Socio Cultural Environment

• High Persistence of Core values
• Existence of Sub Cultures
• Shifts of cultural Values Through Time

Natural Environment

• Shortage of Raw Material
• Increased Energy Cost
• Anti Pollution Measures
• Changing Role of Government

Technological Environment

• Accelerating pace of Change
• Unlimited opportunities for Innovation
• Varying R& D Budgets
• Increased Regulation of Technological Change

Economic factors

(a) Gross national product.

(b) Per capita income.

(c) Balance of payments position.

(d) Industry life cycle and current phase through which the industry is passing. The different phases of this life cycle could be classified as recovery, boom, recession and depression.

(e) Trends in the prices of goods and services—specifically, whether the inflationary or deflationary trends are visible.

(f) Fiscal policies and prime rate of interest charged by commercial banks.

Competition

• An analysis of the following, will provide a strategist an insight into competition of this valuable area:

(a) Firms not in the industry but likely to overcome entry barriers, particularly at a low cost.

(b) Firms who derive synergy from being in the industry.

(c) Firms for whom competing in the industry is an obvious extension of the corporate
strategy.

(d) Customers or suppliers who may integrate backward or forward.

Suppliers

The bargaining power of the buyer firm increases in the following circumstances. The buyer firm is a monopoly or in an oligopoly position and buys large volumes relative to seller's sales.

1. The products a buyer firm purchase represent a significant fraction of the buyer's cost or purchases. Here the buyer firm is likely to shop for the most favourable price.
2. The buyer firm can easily switch its vendors as it faces few switching costs.
3. The buyer firm earns low profits and hence has a pressure to lower its purchasing costs.
4. The buyer firm poses a real threat of backward integration.
5. The supplier's product/service is unimportant to the quality of the buyer's finished products/services.

Q 5: What are the different methods of sale forecasting?

Ans: Sales Forecasting Methods

A sales forecasting method is a procedure for estimating how much of a given product (or product line) can be sold if a given marketing program is implemented.

Sales forecasting methods are never 100% foolproof. each is subjected to some or the other error. Some methods are unsophisticated, such as the jury of executive opinion or the poll of sales force opinion. Others involve the application of sophisticated statistical techniques, such as regression analysis or econometric model building and simulation.

Jury of Executive Opinion

There are two steps in this method (1) high ranking executives estimate probable sales, and (2) n average estimate is calculated.

The assumption is that the executives are well informed and possess considerable experience about the industry outlook, its dynamics and the company’s market position, capabilities, and marketing program. All should support their estimates with factual material and explain their rationales.

Companies using the jury of executive opinion method do so for the following reasons:

1. This is a quick and easy way to estimate a forecast.

2. This is a way to utilize the experience and judgment of well-informed people in sales forecasting.

3. This seems to be the only feasible approach if the company is so young that it has not yet
accumulated the experience to use other forecasting methods.

4. This method is useful when adequate sales and market statistics are not available or costly
affair.

The Delphi Technique

The Rand Corporation developed a technique for predicting the future that is called the Delphi Technique where the panel of experts responds to a sequence of questionnaires in which the responses to one questionnaire are used to produce the next questionnaire. Thus, information gathered from each expert is disseminated to all, enabling all to base their final forecasts on all available information. This Technique is widely used in research activities.

Sales Force Opinion or Opinion of the sales department

In this method individual sales personnel forecast sales for their territories; then individual forecasts are combined and modified, as management thinks necessary, to form the company sales forecast.

This approach appeals to practical sales managers because forecasting responsibility is assigned to those who produces the results. Furthermore, there is merit in utilizing the specialized knowledge of those in closest touch with market conditions. Because the salespeople help to develop the forecast, they should have greater confidence in quotas based upon it.

Q 5. b) What are the different stages in new product development?

Ans: the different stages in new product development

1. Idea Generation

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.

Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase.

Idea Screening

• The object is to eliminate unsound concepts prior to devoting resources to them.
• The screeners must ask at least three questions:
• Will the customer in the target market benefit from the product?
• What is the size and growth forecasts of the market segment/target market?
• What is the current or expected competitive pressure for the product idea?
• What are the industry sales and market trends the product idea is based on?
• Is it technically feasible to manufacture the product?
• Will the product be profitable when manufactured and delivered to the customer at the target price?

1. Concept Development and Testing

• Develop the marketing and engineering details
• Who is the target market and who is the decision maker in the purchasing process?
• What product features must the product incorporate?
• What benefits will the product provide?
• How will consumers react to the product?
• How will the product be produced most cost effectively?
• Prove feasibility through virtual computer aided rendering, and rapid prototyping
• What will it cost to produce it?

• Testing the Concept by asking a sample of prospective customers what they think of the idea. Usually via Choice Modeling.

1. Business Analysis
   • Estimate likely selling price based upon competition and customer feedback
   • Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation
   • Estimate profitability and breakeven point
2. Beta Testing and Market Testing
   • Produce a physical prototype or mock-up
   • Test the product (and its packaging) in typical usage situations
   • Conduct focus group customer interviews or introduce at trade show
   • Make adjustments where necessary
   • Produce an initial run of the product and sell it in a test market area to determine customer acceptance
3. Technical Implementation
   • New program initiation
   • Resource estimation
   • Requirement publication
   • Engineering operations planning
   • Department scheduling
   • Supplier collaboration
   • Logistics plan
   • Resource plan publication
   • Program review and monitoring
   • Contingencies - what-if planning
4. Commercialization (often considered post-NPD)
   • Launch the product
   • Produce and place advertisements and other promotions
   • Fill the distribution pipeline with product
   • Critical path analysis is most useful at this stage

Market segmentation and Targeting

Ans: Market segments

• The market segmentation is the process of splitting customers within a market customer, into different groups sharing some specific characteristics.
• Among the common characteristics of your market customer, you only focus on some "specific characteristics".
• Geographic segmentations divide the market by country, region and city like Rural and Urban market for Motorbikes.
• Demographic segmentations divide the population on measurable variables such as age, sex, income, educational level and so on.
• Pulsar has found the Premium bike riders of age 19yrs to 45yrs male.
• Other good example is the fairness creams for men from Emami, Fair & Lovely Mens Active targeting men now.
• Psychological segmentation is often quite difficult and needs costly surveys. Usually services are promoted based on psychological segmentation.
  

Other bases are psychographic and lifestyle.

Market Targeting

• Segment Size and Growth
  • Analyze sales, growth rates and expected profitability.
• Segment Structural Attractiveness
  • Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.
• Company Objectives and Resources
  • Company skills & resources relative to the segment(s).
  • Look for Competitive Advantages.

2) Product positioning

Ans: Steps to Choosing and Implementing a Positioning Strategy

Step 1.Identifying a set of possible competitive advantages: Competitive Differentiation.

Step 2. Selecting the right competitive advantage.

Step 3. Effectively communicating and delivering the chosen position to the market.

Positioning Errors

• Under positioning:
  • Failing to really position the company at all.
  • E.g.
• Over positioning:
  • Giving buyers too narrow a picture of the company.
  • E.g.
• Confused Positioning:
  • Leaving buyers with a confused image of a company.
  • E.g.
• Doubtful positioning:
  • Buyers may find hard to believe the brand claims in view of product features , price or manufacturer.
  • E.g.

3) Brand extension, Rejuvenation, Relaunch

Ans: Brand extension is marketing practice of launching a new product with the existing brand name.

Two main advantages of Brand extension are:

1. It facilitates new product acceptance due to brand image it has earned already.
2. Positive feedback effects. To receive the credibility of the company behind the extension.

Rejuvenation

Brands have a life cycle which may consist of a number of phases including inception, growth, maturation, decline, revitalization, and retirement. Brand Rejuvenation is a process in which a brand on the verge of retirement is brought back to life to regain markets. Revitalizing a once-popular dormant brand can be a highly profitable strategy under the right circumstances.

Brand Relaunch

BrandRelaunch is any activity that aims to make consumers reconsider a brand in its totality versus the launch of individual items or lines.

This could be through packaging changes, product upgrades, a new positioning, or any combination of several changes in the fundamentals of the brand.

There are many reasons why a brand could be relaunched, including

• The availability of new technology,
• A desire to upgrade a dated image, or
• Competitive actions.

Whatever the reason, relaunches are common, but experience in the real world indicates that failed relaunches are even more common.

Keeping loyal users and Enhancing customer experience

1. Product life cycle

To say that a product has a life cycle is to assert four things:

1) that products have a limited life,

2) product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller,

3) profits rise and fall at different stages of product life cycle, and

4) products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage

1. Market introduction stage

2. Growth stage

3. Maturity stage

4. Decline stage or rejuvenation stage

5. Direct marketing

Ans: Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, and telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium.

If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a website, then the effort is considered to be direct response advertising.

Q: Explain the criteria for selecting the target market.

Ans: Some common criteria for selecting the target market are:

1. Segment attractiveness: the marketer sees if the market size, growth and future potential are available in the chosen market segment.
2. Accessibility: the market segment should be such that it could be served by the marketer.
3. Degree of fit: It implies that the company should have some prior experience so that it can serve the market segment efficiently and profitably.
4. Competitive situation: A company should target such market segment where there is less competition.
5. Profitability: The company should offer service to that market segment from where it can get maximum profitability.

Segmentation

his paper reports on one aspect of a study conducted to support the analysis of the performance of a proposed intercity rail passenger service in the Piedmont region of North Carolina. In particular, this paper describes a market segmentation study of potential rail travelers on the basis of the responses of 333 participants in a computer-based, mall-intercept, market research survey.

The paper overviews the design and implementation of the computer-based survey of potential rail travelers and discusses the approach used in the identification and interpretation of the market segments. The five identified traveler groups are characterized and the implications of the market segmentation results are discussed. These five segments are: (1) functional traveler, (2) day tripper, (3) train lover, (4) leisure-hedonic traveler, and (5) family traveler.

The five groups identified in the market segmentation analysis provide a rich description of the potential rail market in the study corridor. The composition and characteristics of these groups indicate that the intercity rail travel market may have a complex structure that would be masked by the traditional business/non-business dichotomy. The characterization of the intercity rail travel market by the five identified segments provides rail service managers with very useful information for service planning and marketing.

Segmentation by demographic factors is widely used in bank marketing despite the fact that the correlation of such factors with the needs of customers is often weak. Segmentation by expected benefits and attitudes could enhance a bank’s ability to address the conflict between individual service and cost-saving standardisation. Using cluster analysis segments were formed based on combinations of customer ratings for different attitudinal dimensions and benefits of bank service. The clusters generated in this way were superior in their homogeneity and profile to customer segments gained by referring to demographic differences. Additionally, four characteristic groups of customers were identified showing special preferences for and against information services and technology.

Segmentation of car market

Budget Car Segment

Over 60 % of the market

Preferred price range below Rs. 2.2 lakhs

Entry level car

Maruti 800 and OMNI

Compact Car

Segment

Around 15 % of the market

Preferred price range: between Rs. 3 lakhs and Rs. 4.5 lakhs

Zen, Santro, Matiz, Fiat Uno, Indica

Family Car

Segment

Around 10 % of the market

Preferred price range: between Rs. 4 lakhs and Rs. 5 lakhs

Maruti Esteem, Daewoo Cielo, HM Contessa

Premium Car

Segment

Real world-class car and people who are ready to pay for it

Preferred price range: flexible but around Rs. 6 lakhs is acceptable

price.

Opel Astra, Ford Escort, Fiat Siena, Ford Ikon, Honda City,

Mitsubishi Lancer, Audi 1800

Super Luxury

Saloon

A tiny segment

Mercedes Benz E 229, E-250, Rover Montego, Audi 6, BMW

New product development process

The steps in New-Product Development Process are:

1. New-Product Development strategy

First of all, the top management decides the purpose, objective and role of the new product.

These could be to become, competitive, market leader, follower, innovator etc. keeping this in mind a strategy is determined.

2. Generation/ sources of new product ideas

The new ideas are invited from many sources they are:

a) Customers: The customers are asked for the product they want with its features.

b) Employees: Especially the sales & marketing employee have knowledge about the demands of the customers and the idea about the existing product.

c) Distributors: The Wholesalers. Dealers, Retailers do know a lot about what is the demand of the consumers and which product can fare good in the market?

d) Competitors: Usually companies compete with the competitors in the market by launching similar product in the market. Like Colgate launched New product Colgate Gel Against Close-Up Gel to be competitive.

e) Consultants: These days many consultant organizations and professionals are providing service on deciding new product ideas.

f) Research & Development: Every company spends on R & D so as to get efficient new product ideas.,

g Creative Thinking & Brainstorming:

The process of getting a group to think of unlimited ways to vary a product or solve a problem.

3. The Screening of the new product ideas:

The screening is a filter process where the new product ideas are processed and determined if the idea could be developed with the given resources into a company product for achievement of organizational goal.

The objective of screening is to find an idea that is consistent with the criteria that organization thinks important.

Criteria for screening new product ideas

Screening criteria are the evaluative standards in new product development.

These criteria have concern for three factors:

1. Markets: market size, Share: Market Growth, market positioning etc
2. Products: the availability of technology, organizational support, servicing requirement.
3. Financial : Profitability, return on investment, cash flow;

Other important criteria are:

1. Similar product
2. Consistent with organizations’ resources.
3. Objective of the organization.

4. Concept testing

Concept testing is used to evaluate a new-product idea, before any product or prototype has been created.

The uses of concept testing

* The concept testing helps to know if the new product concept is acceptable to the consumer so that it could be taken for developmental process.

* It tests the product concept.

* Concept testing identifies if the product is liked by the target market.

* It is used for revision and improvement of existing products.

5. Organizing for new product development

A new Product of the organization has effect on all functional area s such as marketing, manufacturing, Human Resource and Finance, therefore the development of new product is duly contributed by all functional areas. This increases the planning and coordination for each of the department in the organization.

Studies have shown that the organization which measured the greatest success in new product development is the ones that have given the greatest care to organizing for developing those products.

Setting responsibility for new product development

Responsibility for new product development set at the corporate level, the divisional level or the operating level.

New product development for corporate level:

The involvement of corporate level executives like MD, CEO, GM and others When the new product is an ambitious and highly valued project for the company otherwise Between CEO and Divisions there are Units Which are extensively involved into Research and development and new product development as well.

Advantage

The involvement of corporate level brings greater effectiveness and control of innovative activities.

Disadvantage

Since the executives of the operating know the customers need and demands their knowledge goes in vain.

6. Physical development of the product.

This is the first activity to develop the product idea into its physical form. This requires designing, prototyping, testing and manufacturing the product.

During this process all functional department are involved.

Product prototyping:

Prototype is a tangible form of a product concept to approximate the product. It exhibits some of the functions of the desired product. It can also be called a functional model of a product.

The objectives of Product Development are:

1. To make the use of product safe, easy, and understandable for the consumers.

2. To give the pleasing look to the product.

3. To make it so good that it can be maintained and repaired easily

4. The cost of the final product should be affordable for the consumers.

The product design should communicate the corporate mage of the company.

Concurrent Engineering includes concurrent design, which is parallel.

* Design of the product

* Design of evaluation of the product

* Design of prototyping of the product

* Design of the production of the product

* Design of the test of the product

the product concept is when the main focus of the company is on the products being. like improving it, adding features to it, making the product superior each time. assuming that customers will buy the products because they have greater quality. sometimes they overlook what the customer really needs. this approach is seldom successful

Marks says. They were designed inside and outside to keep prices down: In many ways those products were inferior as manufacturers sought out lower-quality fruits, meats, and other materials. Generic tea bags would contain tea dust instead of tea leaves, for example

Product line Length: The issue in Product line Length is to have optimal length of the product line. it is influenced by

1. Company objectives
2. Manufacturing capacity

It deals with Two major kinds of decisions:

a ) Line stretching Decisions b) Line filling Decisions.

a ) Line stretching Decisions: Line stretching occurs when a company lengthens its product line beyond its current range. it is stretched downward, upward, or both ways.

c) Line filling Decisions: When new product id added to the existing line for gaining incremental profit, competitiveness, and market share is called Line filling Decisions.

Line modernization Decisions- in some cases product line length is adequate but needed to be modernized to be competitive and refreshing. Like Apple personal Computers experienced Apple 1, Apple 2, Apple 3, Lisa and McIntosh.

Line Pruning Decisions: Usually Product or model numbers are palyed with for several reasons called Line Pruning Decisions

Setting Price objectives

1) Survival: When the product is launched with less brand equity the price is usually kept low and the purpose is for the survival of the product in the market.

2) Maximum Current Profit: when the company wishes to make higher profits in the present situation rapid price skimming strategy is followed. Usually this strategy is adopted by product with high brand equity.

3) Maximum market skimming: it aims at making heavy profit from all the segment product is offered to.

4) Maximum sales Growth: in this the price is kept low so that customers buy a lot result in maximum sales growth.

5) Product Quality Leadership: The excusive example is services of Airtel which are sold with product quality leadership objective but with costlier.

Determining Demand

Price elasticity of demand

it is percentage change in quantity demanded by the percentage change in price of the same commodity.

In economics and business studies, the price elasticity of demand is a measure of the sensitivity of quantity demanded to changes in price.

In simpler words, demand for a product can be said to be very inelastic if consumers will pay almost any price for the product, and very elastic if consumers will only pay a certain price, or a narrow range of prices, for the product.

Inelastic demand means a producer can increase prices without much hurting demand for its product, and elastic demand means that consumers are sensitive to the price at which a product is sold and will not buy it if the price rises.

Estimating Costs : In order to set up price of the product it is essential to estimate the costs and with profit margin determining the final price.

Product Life Cycle

Expalin the concept of product Life Cycle?

Ans: the PLC is an important concept in marketing that provides insights into product’s competitive dynamics.

Product life cycle (PLC) has to do with the life of a product in the market with respect to business costs and sales variables, whereas product life cycle management (PLM) has more to do with managing a product through its development and useful life.

To say that a product has a life cycle is to assert four things:

1) Products have a limited life,

2) Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller,

3) Profits rise and fall at different stages of product life cycle, and

4) Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Let us discuss the different stages in product life cycle.

1. Introduction stage: In this stage a product is launched in the market. The marketer has to make effort for
   1. Creating product awareness in the market if it is leader
   2. Induce trial of the product
   3. Secure space in the outlet shelf.

Where, I: costs are high.

II: low sales volume

III: little or no competition

IV: no existing demand for the product

V: makes no money at this stage

The marketing Strategy used are Rapid Skimming strategy, Slow skimming strategy, Rapid penetration strategy and slow penetration strategy. The Aircel is at its introduction stage with Rapid penetration strategy.

Usually market pioneer enjoys advantages.

2. Growth stage: This stage experiences rapid increase in sales volume where competition begins to increase, opportunity for large scale production and profit.

Where, 1) public awareness increases

2) Increased competition leads to price decreases

The marketing strategy used is;

1) Product improvement 2) new models are developed 3) enters new market segment 4) enlarges distribution channels etc. The social networking facilities on internet is on its growth stage.

3. Maturity stage

Most of the products are in maturity stage. In this stage

I: the marginal Costs are low as a result of production in scale

II: sales volume peaks and most of the market is covered.

III: There is increase in competitors entering the market

IV: prices fall due to impact of competing products

V: brand differentiation and feature diversification is emphasized to maintain or increase market share

The marketer adopts the followings.

Market Modification:1) Convert nonusers 2) Enter new market segments3) win Competitor’s customers etc.

Marketing mix modifications in Prices, Distribution, Advertising, sales promotion, personal selling, services

Coca Cola and Pepsi are at Maturity stage.

4. Saturation and decline stage

In this stage the sales volume decline, price and profitability diminish.

The marketer develops concern for 1) Identifying Weak products and determining such marketing strategy so that it could be dropped profitably.

Maruti 800 is at decline stage.

Types of channel Intermediaries

1. Stockiest / Distributor / Wholesaler

2. Retailer- Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by post, in small or individual lots for direct consumption by the purchaser

3. Broker: A broker is a n intermediate who does not buy the goods buy sells the goods and charges commission in percent.

4. Franchisees: Franchising refers to the methods of practicing and using another person's business philosophy.

The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee

The functions of the wholesalers are:

1. Buying function: A wholesaler buys the product in large quantities) and resells the goods in sizeable lots to Other intermediaries down the line, such as semi-wholesalers and retailers.

2. marketing functions:

Wholesalers add value by performing Stock holding and sub-distribution , promotion, financing, and collection of accounts receivables and provision of market feedback.

3. Risk bearing function: the risk associated with product failures, price changes and bad debts. :

4. The Sub-distribution functions are:

a. Reselling, b. Transport, c. Handling, d. Accounting

1) Intensive distribution

Intensive Distribution - making a product available in as many outlets as are willing to stock it.

intensive distribution and selective distribution

It is used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.

2) Selective Distribution

A form of market coverage in which a product is distributed through a limited number of wholesalers or retailers in a given market area.

1. Exclusive distribution.

It uses only one outlet in a relatively large geographic area or in a given market to distribute a product

Using product/ service of your choice justify the distribution strategy adopted by you.

Q 1: How does an organization product mix relate to the development of product lines? When should an enterprise add depth to its product lines rather than width to its product mix?

Ans: Let us first discuss the concept of product mix and product lines.

A product mix is the set of all product lines and items that a particular seller offers for sale to buyers.

Like a seller has Three major product lines namely cosmetics, jewelry and household.

Where Cosmetics beaks down into lipstick, rouge, powder, facial cream etc.

A product line is a group of products that are closely related in terms of functional benefit, the same customer group, price range or marketing through same outlet.

Like In detergent the P&G Has Tide, Joy, Gain, Bold and other products having same functional benefit of washing cloths to the consumers.

A line can comprise related products of various sizes, types, colors, qualities, or prices.

Like a seller has Three major product lines namely cosmetics, jewelry and household.

Where Cosmetics beaks down into lipstick, rouge, powder, facial cream etc.

The depth of product line refers to the number of product variants in a line. . If a line of products is sold with the same brand name, this is referred to as family branding. Like the depth of Colgate Dental Cream includes Colgate fresh energy gel, Colgate Herbal, Colgate Active Salt, Cibaca etc.

The product mix and product lines also depend upon the size of the organization. Like HLL has a big product mix and product lines. The companies usually keep product mix less and product lines more. This is all to become competent with the giant competitors.

The depth of product line refers to the number of product variants in a line. .

The conditions when an enterprise adds depth to its product lines rather than width to its product mix.

1. To leverage Family brand name: The depth of product line refers to the number of product variants in a line. . If a line of products is sold with the same brand name, this is referred to as family branding. Like the depth of Colgate Dental Cream includes Colgate fresh energy gel, Colgate Herbal, Colgate Active Salt, Cibaca etc.

2. To increase brand equity: Trough family branding enterprises usually aim to increase the brand equity in the marketing but it is usually followed when there is consistency.

3. Competitive perspective: When the competitive Family brands adopt this strategy the counterpart has to follow the suit, etc.

Q 2: Discuss the external environment of the marketing and explain how it affects a firm.

How the current demographic trends are forcing changes in marketing mix of a company.

Justify using examples.

Ans: A firm's marketing external environment consists of factors that manifest on a large or macro scale.

These are typically

1. economic,

2. Social or

3. Political phenomena.

4. Technological

5. Cultural

6. Demographic

7. Global etc.

A common means of assessing a firm's macro-environment are:

1. SWOT analysis- strength, weakness, opportunities and threats where opportunities and threats part the external environment of the marketing.

PEST (i.e. Political, Economic, Social and Technological) analysis. Within a PEST analysis, a firm analyzes national political issues, culture and climate, key macroeconomic conditions, health and indicators (such as economic growth, inflation, unemployment, etc.), social trends/attitudes, and the nature of technology's impact on its society and the business processes within the society.

The U.S. population is expanding by less than 1 percent annually, and immigrants constitute about one-fourth of this increase.

The trend toward smaller households with increasing numbers of single-person and one-parent households is continuing .

The decreasing household size and greater numbers of single-person and one-parent households indicate that total spending for food and beverages is likely to increase very slowly. More women work outside the home and a higher number of single-person households cause redistribution of the food and beverage dollar away from home and towards other outlays at the expense of the retail grocery industry where potential profits are higher.

So the Size of the Pepsi bottles will be smaller and prices will be comparatively higher.

The product is needed to provide at near the workplace.

This will again require repositioning the brand for single-households.

The domestic market growth will be limited, thus manufacturers will likely compete very aggressively for market share and intensify export efforts to increase sales and enjoy high profits

Q 3: Explain the importance of market segmentation. List the steps involved in segmenting consumer market. Describe the target market for web portal like Jobstreet.com. Design differentiation strategy for Jobstreet.com.

Ans: Market segmenting is the process that a company divides the market into distinct groups who have distinct needs, wants, behavior or who might want different products & services

• Geographic variables

• region of the world or country, East, West, South, North, Central, coastal, hilly, etc.

• Country size/country size : Metropolitan Cities, small cities, towns.

• Demographic variables

• Age, gender- Male and Female, family size, family life cycle, Education Primary, ,socioeconomic status, religion, nationality/race (ethnic marketing) ,language

• Psychographic variables

Personality, life style, value, attitude.

• Behavioral variables

benefit sought, product usage rate, brand loyalty, product end use, readiness-to-buy stage, decision making unit, profitability, income status

• Technographic variables

• motivations

• usage patterns
• attitudes about technology

The target market for a web portal

Spillurdil.com is an interactive site hat helps those in love express themselves to their beloveds in the company of Cornetto ice-creams.

Target Audience

are the most relevant consumers within target are:
Junior College goers & 1st / 2nd year college as 'they have more money and more time'.
Primary target is 16 - 20 young people, unisex
General target is 15 - 25 young people, unisex

“The site provides a platform to get connected the lovers (male and female) with the users or beloved to express their love”

The concept of designing strategy for Jobstreet.com.

JobStreet.com should strategize to expand its service of online recruitment in the region, it should entered into partnership some reputed online companies to establish JobStreet.com in other countries so that they can be persuade for availing its services since India is in better position to employ people and this will definitely open new market for the Jobstrret.com.

Q 4: Justify the importance of developing new products. Explain the process of new product development process. Comment “Product testing is a critical decision”

Ans: The importance of the developing new product is:

1. Unit or Rupee value sales of the product by the year.
2. Market share by the year, and
3. Product profitability in terms of percentage margins.

The steps in New-Product Development Process are:

1. New-Product Development strategy First of all, the top management decides the purpose, objective and role of the new product.

These could be to become, competitive, market leader, follower, innovator etc. keeping this in mind a strategy is determined.

2. Generation/ sources of new product ideas

The new ideas are invited from many sources they are:

a) Customers: The customers are asked for the product they want with its features.

b) Employees: Especially the sales & marketing employee have knowledge about the demands of the customers and the idea about the existing product.

c) Distributors: The Wholesalers. Dealers, Retailers do know a lot about what is the demand of the consumers and which product can fare good in the market?

c) Competitors: Usually companies compete with the competitors in the market by launching similar product in the market. Like Colgate launched New product Colgate Gel Against Close-Up Gel to be competitive.

d) Consultants: These days many consultant organizations and professionals are providing service on deciding new product ideas.

e) Research & Development: Every company spends on R & D so as to get efficient new product ideas.,

f) Creative Thinking & Brainstorming:

The process of getting a group to think of unlimited ways to vary a product or solve a problem.

3. The Screening of the new product ideas:

The screening is a filter process where the new product ideas are processed and determined if the idea could be developed with the given resources into a company product for achievement of organizational goal.

The objective of screening is to find an idea that is consistent with the criteria that organization thinks important.

Criteria for screening new product ideas

Screening criteria are the evaluative standards in new product development.

These criteria have concern for three factors:

1. Markets: market size, Share: Market Growth, market positioning etc
2. Products: the availability of technology, organizational support, servicing requirement.
3. Financial : Profitability, return on investment, cash flow;

Other important criteria are:

1. Similar product
2. Consistent with organizations’ resources.
3. Objective of the organization.

4. Concept testing

Concept testing is used to evaluate a new-product idea, before any product or prototype has been created.

The uses of concept testing

* The concept testing helps to know if the new product concept is acceptable to the consumer so that it could be taken for developmental process.

* It tests the product concept.

* Concept testing identifies if the product is liked by the target market.

* It is used for revision and improvement of existing products.

5. Organizing for new product development

A new Product of the organization has effect on all functional area s such as marketing, manufacturing, Human Resource and Finance, therefore the development of new product is duly contributed by all functional areas. This increases the planning and coordination for each of the department in the organization.

Studies have shown that the organization which measured the greatest success in new product development is the ones that have given the greatest care to organizing for developing those products.

Setting responsibility for new product development

Responsibility for new product development set at the corporate level, the divisional level or the operating level.

New product development for corporate level:

The involvement of corporate level executives like MD, CEO, GM and others When the new product is an ambitious and highly valued project for the company otherwise Between CEO and Divisions there are Units Which are extensively involved into Research and development and new product development as well.

Advantage

The involvement of corporate level brings greater effectiveness and control of innovative activities.

Disadvantage

Since the executives of the operating know the customers need and demands their knowledge goes in vain.

6. Physical development of the product.

This is the first activity to develop the product idea into its physical form. This requires designing, prototyping, testing and manufacturing the product.

During this process all functional department are involved.

Product prototyping:

Prototype is a tangible form of a product concept to approximate the product. It exhibits some of the functions of the desired product. It can also be called a functional model of a product.

The objectives of Product Development are:

1. To make the use of product safe, easy, and understandable for the consumers.

2. To give the pleasing look to the product.

3. To make it so good that it can be maintained and repaired easily

4. The cost of the final product should be affordable for the consumers.

The product design should communicate the corporate mage of the company.

Concurrent Engineering includes concurrent design, which is parallel.

*Design of the product

*Design of evaluation of the product

*Design of prototyping of the product

*Design of the production of the product

*Design of the test of the product

Q 5: a) Differentiate the following terms.

1) Intensive distribution

Intensive Distribution - making a product available in as many outlets as are willing to stock it.

intensive distribution and selective distribution

It is used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.

2) Selective Distribution

A form of market coverage in which a product is distributed through a limited number of wholesalers or retailers in a given market area.

1. Exclusive distribution.

It uses only one outlet in a relatively large geographic area or in a given market to distribute a product

Using product/ service of your choice justify the distribution strategy adopted by you.

Q 5: b) Define the type of channel intermediaries and describe their function and activities.

Ans: Types of channel Intermediaries

1. Stockiest / Distributor / Wholesaler

2. Retailer- Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by post, in small or individual lots for direct consumption by the purchaser

3. Broker: A broker is a n intermediate who does not buy the goods buy sells the goods and charges commission in percent.

4. Franchisees: Franchising refers to the methods of practicing and using another person's business philosophy.

The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee

The functions of the wholesalers are:

1. Buying function: A wholesaler buys the product in large quantities) and resells the goods in sizeable lots to

Other intermediaries down the line, such as semi-wholesalers and retailers.

2. marketing functions:

Wholesalers add value by performing Stock holding and sub-distribution , promotion, financing, and collection of accounts receivables and

provision of market feedback.

3. Risk bearing function: the risk associated with product failures, price changes and bad debts. :

4. The Sub-distribution functions are:

a. Reselling, b. Transport, c. Handling, d. Accounting

Q 6: Critically examine the effect of advertising on market share and consumer decision making process. Discuss the role of IMC in today’s Marketing.

Ans: the effect of advertising on market share is:

1. Launch of New Products and Services: The introduction of new products and brands under line extension, product diversification or category diversification and getting advertised effectively can give the seller a great opportunity for increasing his sales revenue and economies of scale.

2. Market Expansion: Advertising is also used to tap a new segment of the market like advertisers are directing their advertising to the government institutions and large organization for closed circuit TV networks, security systems and educational purposes. Another way of expanding the consumer base is to promote new uses of the product ad hence boosting market espansion.

3. Announcement of a Product Modification or improvement: For such advertising, generally, the terms “new”, “improved”, “Excel” etc. is used as prefixes to the brand name. For example, “Surf Excel” gives the impression of an advanced detergent powder,

The effects of advertising can be grouped in to the following

• Creating awareness (spreading information):

firstly, the advertising aims to make the audience know that the product or service is available in the market and explain exactly what it is.

Vodafone’s ad campaign “Hutch is Now Vodafone” was informative in nature.

Tata Tea’s Jaago Re, Times of India’s Lead India and Idea Cellular’s My Idea campaigns are the ones that have been the most recalled. However, Jaago Re is the winner, with the majority of the respondents voting for the tea brand’s election campaign.

• Creating favorable attitudes (persuasion).

Secondly, the advertisement does brainwashing of the consumers to create the favorable attitude towards the brand which will result in adaptation of the product by the consumers.

The Coca Cola’s Ad Campaign Thanda Matlab Coca Cola” is such advertisement penned by Prasoon Joshi.

• Maintenance of loyalty (reinforcement) One of the tasks which is often forgotten is that of maintaining loyalty of existing customers who will almost always represent the main source of future sales

Within this we have the following tools:

• Advertising: Which is any paid form of non-personal communication of ideas, products and services by an identified sponsor.

• Sales Promotion: Short term direct inducement to encourage sales of products and services.

• Publicity: Non-personal stimulation of demand for a product / service or business organization as a whole by putting commercially significant news in media to create a favorable image. The sponsor does not pay it for.

• Personal selling: For making sales, a salesman interacts orally with the buyer or buyers in the form of sales presentation.

• Public Relations: Marketers engage in public Relations to develop a favorable image of their organizations in the eyes of the public – public at large, customers, suppliers, government, media, competitors, shareholders, employees and the society.

Q 7: Discuss how the product life cycle , competition, Distribution, promotion strategies, customer demand and quality perception can affect pricing strategies.

Ans: Effect of Demand

The effect of Price elasticity of demand on pricing decisions.

It is percentage change in quantity demanded by the percentage change in price of the same commodity.

In economics and business studies, the price elasticity of demand is a measure of the sensitivity of quantity demanded to changes in price.

Inelastic demand means a producer can increase prices without much hurting demand for its product, and elastic demand means that consumers are sensitive to the price at which a product is sold and will not buy it if the price rises.

Quality perception

Perceived value pricing: if the seller feels that his product gives better values to the customers as expected by the consumer he charges high price irrespective of cost of product. This pricing method is called perceived value pricing.

Promotional strategy and pricing strategies.

These include: price skimming, price discrimination and yield management, price points, psychological pricing, etc.

Price discounts and allowance like Cash discounts, Quantity Discounts, seasonal discounts are offered to the customer for achieving marketing objectives.

Promotional pricing refers to an instance where pricing is the key element of the marketing mix.

The price/quality relationship refers to the perception by most consumers that a relatively high price is a sign of good quality. The greater the uncertainty surrounding a product, the more consumers depend on the price/quality hypothesis and the more of a premium they are prepared to pay.

Premium pricing (also called prestige pricing) is the strategy of consistently pricing at, or near, the high end of the possible price range to help attract status-conscious consumers. They believe the high price is an indication of good quality;

1. They believe it to be a sign of self worth.

The Goldilocks pricing is a practice of providing a "gold-plated" version of a product at a premium price in order to make the next-lower priced option look more reasonably priced;

for example, encouraging customers to see business-class airline seats as good value for money by offering an even higher priced first-class option

These include: price skimming, price discrimination and yield management, price points, psychological pricing, etc.

Multidimensional pricing is the pricing of a product or service using multiple numbers.

In this practice, price no longer consists of a single monetary amount (e.g., sticker price of a car), but rather consists of various dimensions (e.g., monthly payments, number of payments, and a down payment).

Effect of Product life cycle on pricing strategies.

How you price, and what value you provide for that price, will change as you move through the product lifecycle.

The marketing Strategy used are Rapid Skimming strategy, Slow skimming strategy, Rapid penetration strategy and slow penetration strategy.

Aircel is at its introduction stage with Rapid penetration strategy.

In growth and maturity stage the price solely depends upon the market share and product positioning of the product.

The Decline phase the lower your price should be, since your market will be

One technique to consider is unbundling support, training and services from the product itself, which will allow you to lower price without discounting.

Competition.

Pay attention to them, but don't copy them . . . when it comes to pricing strategy they may have no idea what they're doing.

The effect of competition on pricing strategy requires that you consider this price range and where your price should be within that price range. You determine the best price range according to your product’s strengths and weaknesses compared to competitors’ products.

How Your Price Compares Determines Your Price

If your product has the most strengths, you can price it on the high end. If your product offers few benefits compared to competitors’, your price needs to be on the low end. So the effect of competition on pricing strategy requires an analysis of your and your competitors’ strengths and weaknesses.