2 and 16 marks marketing Management

8/9/2019 2 and 16 marks marketing Management

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BA7203 Marketing Management

UNIT – I

Par t A

1. Differentiate between Selling an Marketing !Ma" # $%ne 200&'

Marketing Selling

Focuses on customer needs Focuses on seller needs

Customer enjoys supreme importance Product enjoys supreme Importance

converting customer needs into product Converting product into cash

Profits through customer satisfaction Profits through sales volume

Principle of caveat vendor is followed principle of caveat emptor is followed

2. ()at * "*% mean b" marketing +r*,e-- (MAY/!"# $%%&'

It is a process that a firm should find a way to discover unfulfilled customer needs

and ring to mar)et products that satisfy those needs* +he process of doing so can e

modeled in a se,uence of steps which includes situational analysis- mar)eting strategy-

mar)eting mi. elements and implementation and control*

3. ()at i- marketing (N/#D 200&'

Mar)eting is a social and managerial function that attempts to create- e.pand and

maintain a collection of customers* It attempts to deliver demand satisfying output

through profitale e.changes*

Mar)eting is the process of raising the standards of living- y identifying the e.isting

prolems and unsatisfied needs of people and then satisfying that need with a

product/service that delivers value to the customer*

. ()at are t)e fa,t*r- affe,ting marketing en4ir*nment (N/#D 200&'

• i0e and 1rowth

• Profitaility

• Cost structure

• 2istriution systems

• Mar)et trends

• 3ey uccess factors

5. ()at i- gl*bal en4ir*nment !MA6#$UN 2007'


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1loal firms plan- operate and coordinate their activities on a worldwide

asis- for which they need to study gloal environment* 1loal environment has

such factors as political- legal- social- cultural and economic forces that

fundamentally affect the strategic usiness positions at gloal level*

&. Define intr*%,ti*n -tage *f P. !MA6#$UN 2007'

Introduction is the early stage- when product is introduced in mar)et- sales

revenue egins to grow ut the rate of growth is very slow*Profits may not e

there as there is low sales volume- large production and distriution costs* It may

re,uire heavy advertising and sales promotion* Products are rought cautiously

on a trail asis*

7. ()at are t)e -*,i*8e,*n*mi, fa,t*r- in -egmentati*n (MA6#$UN 2007'

ocio4economic factors in segmentation include social class- lifestyle-

occupation- income- density- and family life cycle and investment trends of

uyers5

9. Define t)e :Marketing *n,e+t:. !N/#D 2007'

Mar)eting is a societal process that is needed to discern consumers6 wants7

focusing on a product/service to those wants- and to mould the consumers towards the

products/services* Mar)eting is fundamental to any usinesses growth* +he mar)eting

teams (Mar)eters' have the tas) to create the consumer awareness of the

products/services through mar)eting techni,ues7 if a usiness does not pay attention to

their products/services and their consumers6 demographics- the usiness would not e

ale to endure longevity*

;. ()at i- Marketing !Ma" # $%ne 2009'

8efer 9uestion "umer : !N*4 # De, 200&'

10. ()at i- +r*%,ti*n ,*n,e+t !N/#D 2009'

+he production concept is the philosophy that consumers will favor products that

are availale and highly affordale*+his philosophy states that any amount of goods

produced will sell if it is availale and affordale to customers*;hen firms adopt thisconcept- generally they produce goods on a mass production level- to e ale to produce

large ,uantities- therefore ma)e it more availale7 investing in technology is essential- to


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reduce the costs of production and ma)e it more affordale*+he management is re,uired

to focus mostly on improving the production and distriution of a part

11. ()at i- -elling ,*n,e+t !N/#D 2009'

elling concept6s aim is to convert the product into cash*Firms adopting this

philosophy do not produce goods and services in line with people6s need and wants

ecause they try to create demand for that particular product themselves*+he management

should concentrate on finding ways to increase production* Also firms adopting this

concept must invest a lot financially- in conducting research and in uilding relationships

with their customers*+he achievement of sales and mar)eting ojectives of the firm y the

salesperson y providing services and solutions to customers6 prolems in addition to

ta)ing orders

12. ()at i- a market ()at are t)e t"+e- *f market !MA6#$UN8 200;'

In mar)eting- the term market refers to the group of consumers or organi0ations

that is interested in the product- has the resources to purchase the product- and is

permitted y law and other regulations to ac,uire the product*A pulic place where uyers

and sellers ma)e transactions- directly or via intermediaries* Also sometimes means the

stoc) mar)et*

T"+e- *f Market<

• "iche mar)et

• Farm mar)et

• toc) mar)et

• Commodity mar)et

• Currency mar)et

•


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+he micro4environment of an organi0ation can est e understood as comprising

all those >ther organi0ations and individuals who directly or indirectly affect the

activities of the >rgani0ation* +he following )ey groups can e identified?

> Customers

@ Intermediaries

@ uppliers

@ >ther sta)eholders

Ma,r*8n4ir*nment

+he macro4environment comprises general trends and forces which may not

immediately affect the relationships that a company has with its customers- suppliers and

intermediaries ut sooner or later- macro4environmental change will alter the nature of

these relationships*

• +he Political #nvironment

• +he ocial and Cultural #nvironment

• +he 2emographic #nvironment*

• +he +echnological #nvironment

15. ()at are *b?e,ti4e- *f Marketing !$%ne 2011'

* +o satisfy the customer-$* +o achieve organi0ational goals and ojectives:* 2elivering the desired satisfactions*B* Anticipate the needs and wants of consumers and* +o satisfy these more effectively than competitors*

1&. ()at i- meant b" Mi,r* en4ir*nment !$%ne 2011'

Mi,r*8n4ir*nment<

+he micro4environment of an organi0ation can est e understood as comprising

all those >ther organi0ations and individuals who directly or indirectly affect the

activities of the >rgani0ation* +he following )ey groups can e identified?

@ Customers

@ Intermediaries


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@ uppliers

@ >ther sta)eholders

17. i-t an" tw* ifferen,e between ,*n-%mer an in%-trial market

,)ara,teri-ti,-!N*4 # De, 2010'

19.

Define Ma-- ,%-t*mi@ati*n.

It is the aility of the company to prepare on a mass asis individually designed

products- services- programs and communications* (2e


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#nvironmental analysis determines environmental changes and predicts future

changes in the environment* +he mar)eting manager should e ale to determine possile

threats and opportunities from the changing environment7 +his will help avoid crisis

management

Si n4ir*nmental *r,e-

• ocietal

• 8egulatory

o Political

o Degal

o 8egulatory

• Competitive

• +echnology• "atural

n4ir*nmental 4ariable-<

+he Internal Analysis of strengths and wea)nesses focuses on internal factors that

give an organi0ation certain advantages and disadvantages in meeting the needs of its

target mar)et* trengths refer to core competencies that give the firm an advantage in

meeting the needs of its target mar)ets*Any analysis of company strengths should e

mar)et oriented/ customer focused ecause strengths are only meaningful when they

assist the firm in meeting customer needs*

;ea)nesses refer to any limitations a company faces in developing or

implementing a strategy* ;ea)nesses should also e e.amined from a customer

perspective ecause customers often perceive wea)nesses that a company cannot see*

nly those

strengths that relate to satisfying a customer need should e considered true core

competencies*

+he following area analyses are used to loo) at all internal factors affecting a company?

• %-t*mer anal"-i-< egments- motivations- unmet needs

• *m+etiti4e anal"-i-< Identify completely- put in strategic groups- evaluate

performance- image- their ojectives- strategies- culture- cost structure- strengths-

wea)ness


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• Market anal"-i-< >verall si0e- projected growth- profitaility- entry arriers- cost

structure- distriution system- trends- )ey success factors

• n4ir*nmental anal"-i-< +echnological- governmental- economic- cultural-

demographic- scenarios- information4need areas

• C*al< +o identify e.ternal opportunities- threats- trends- and strategic uncertainties

An environmental analysis is the four dimension of the #.ternal Analysis* +he interest

is in environmental trends and events that have the potential to affect strategy* +his

analysis should identify such trends and events and the estimate their li)elihood and

impact* ;hen conducting this type of analysis- it is easy to get ogged down in an

e.tensive- road survey of trends* It is necessary to restrict the analysis to those areas

relevant enough to have significant impact on strategy*+his analysis is divided into five

areas? economic- technological- political4legal- socio4cultural- and future*

2. )**-e a ,*m+an" *f "*%r ,)*i,e an e+lain )*w mi,r* en4ir*nmental fa,t*r-

affe,ting it- *+erati*n-. (N/#D 200&'

Mi,r* n4ir*nmental a,t*r-<

+hese are internal factors close to the company that have a direct impact on the

organi0ations strategy* +hese factors include?

%-t*mer-

>rgani0ations survive on the asis of meeting the needs- wants and providing

enefits for their customers* Failure to do so will result in a failed usiness strategy*

m+l*"ee-

#mploying the correct staff and )eeping these staff motivated is an essential part

of the strategic planning process of an organi0ation* +raining and development plays an

essential role particular in service sector mar)eting in4order to gain a competitive edge*

+his is clearly apparent in the airline industry*

S%++lier-

Increase in raw material prices will have a )noc) on affect on the mar)eting mi.

strategy of an organi0ation* Prices may e forced up as a result* Closer supplier

relationships are one way of ensuring competitive and ,uality products for an

organi0ation*


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S)are)*ler-

As organi0ation re,uire greater inward investment for growth they face increasing

pressure to move from private ownership to pulic* Eowever this movement unleashes

the forces of shareholder pressure on the strategy of organi0ations* atisfying shareholder

needs may result in a change in tactics employed y an organi0ation* Many internet

companies who share prices roc)eted in and early $%%% have seen the share price

tumle as they face pressures I mm shareholders to turn in a profit* In a mar)et which has

very ,uic)ly ecome overcrowded many will fall*

Meia

Positive or adverse media attention on an organi0ations product or service can in

some cases ma)es or rea)s organi0ations* In the !3 the adverse pulicity the

Millennium 2ome has received has had impact on projected sales figures* ;harf dale

who recently entered the 2G2 mar)et has received many awards from industry maga0ine

resulting in an increased demand for this product and most importantly an increasedawareness of the ;harf dale rand*

Consumer programmes on +G li)e the


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product development or customer service* Mar)eting should e involved- and there

should e a meeting of the minds- whenever discussions are held regarding new product

development or any customer4related function of the company*

It is very important that the mar)eting department get input from many people within

the company* "ot only does providing input help the rest of the company understand and

support the mar)eting efforts- it also provides some invaluale insights into what

customers want and new ideas that may have slipped past the rest of the company*

perations will need to use sales forecasts produced y the mar)eting department to plan

their production schedules*ales forecasts will also e an important part of the udgets

produced y the finance department- as well as the deployment of laor for the human

resources department*A research and development department will need to wor) very

closely with the mar)eting department to understand the needs of the customers and to

test outputs of the 82 section*

. +lain marketing ,*n,e+t an ,*m+are wit) -elling ,*n,e+t. Ci4e

eam+le-. (MA6#$UN 2007'

+he mar)eting concepts holds that the )ey to achieving organi0ationalJ

goals consists of the company eing more effective than competitors j in creating-delivering- and communicating superior customer value to it s chosen target

mar)ets* +he asic difference etween mar)eting *and selling lies in the attitude towards

usiness* +he selling concept hi)es an in-ie8*%t perspective*


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It starts with the factory- focuses on the company6s e.isting products- *and calls for

heavy selling and promoting to produce profitale sales* +he mar)eting concept ta)es an

*%t-ie8in perspective* It starts with n well4defined mar)et- focuses on customer needs-

coordinates all the activities that will affect customers- and produces profits through

Creating customer satisfaction*

Marketing Selling

Focuses on customer needs Focuses on seller needs

Customer enjoys supreme importance Product enjoys suprem Importance

converting customer needs into product Converting product into cash

Profits through customer satisfaction Profits through sales volume

Principle of caveat vendor is followed principle of caveat emptor is followed

5. Di-,%-- marketing en4ir*nment *n t*a"- ,*m+etiti4e w*rl. (MA6#$UN

2007'

+he organi0ation operates within the larger framewor) of the e.ternal

environment that shapes opportunities and poses threats to the >rgani0ation* +he e.ternal

environment is a set of comple.- rapidly changing and significant interacting institutions

and forces that affect the organi0ation6s aility to serve its customers* #.ternal forces are

uncontrolled y an organi0ation- ut they may e influenced or it fleeted y that

organi0ation* It is necessary for organi0ations to understand the environmental conditions

ecause they interact with trategy decisions* +he e.ternal environment has a major

impact on the determination of mar)eting decisions* uccessful organi0ations can in their

e.ternal environment so that they can respond profitaly id unmet needs and trends in the

targeted mar)ets*>rgani0ations closely monitor their customer mar)ets in order to adjust

to changing tastes and preferences* A mar)et is people or organi0ations with wants to

satisfy- money to spend- and the willingness to spend it* #ach target mar)et has distinct

needs- which need to e monitored* It is imperative for an organi0ation to )now their

customers- how to reach them and when customers6 needs change in order to adjust its

mar)eting efforts accordingly* +he mar)et is the focal point for all mar)eting decisions in

an organi0ation*

Consumer mar)ets are individuals and households that uy goods and services for

personal consumption*


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resell them at a profit* 1overnment mar)ets are agencies that uy goods and services in

order to produce pulic services or transfer them to those that need them* +he federal

government is the largest uyer in the !nited tates* International mar)ets consist of

uyers in other countries*

+he mar)eting environment surrounds and impacts upon the organi0ation* +here

are three )ey perspectives on the mar)eting environment- namely the 6macro4

environment-6 the 6microenvironment6 and the 6internal environment6*

T)e mi,r*8en4ir*nment

+his environment influences the organi0ation directly* It includes suppliers that

deal directly or indirectly- consumers and customers- and other local sta)eholders* Micro

tends to suggest small- ut this can e misleading* In this conte.t- micro descries the

relationship etween firms and the driving forces that control this relationship* It is a

more local relationship- and the firm may e.ercise a degree of influence*

T)e ma,r*8en4ir*nment

+his includes all factors that can influence and organi0ation- ut that are out of

their direct control* A company does not generally influence any laws (although it isaccepted that they could loy or e part of +rade organi0ation'* It is continuously

changing- and the company needs to e fle.ile to adapt* +here may e aggressive

competition and rivalry in a mar)et* 1loali0ation means that there is always the lineal of

sustitute products and new entrants* +he wider environment is also ever changing- and

the mar)eter needs to compensate for changes in culture- politics- economics and

technology*

T)e internal en4ir*nment

All factors that are internal to the organi0ation are )nown as the 6internal

environment6* +hey are generally audited y applying the Five Ms6 which are Men-

Money- Machinery- Materials and Mar)ets* +he internal environment is as important for

managing change as +he e.ternal* As mar)eters we call the process of managing internal

change 6internal mar)eting* #ssentially we use mar)eting approaches to aid

communication and change management*

+he e.ternal environment can e audited in more detail using other approaches

such as ;>+ Analysis- Michael Porter6s Five Forces Analysis or P#+ Analysis*


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&. a,t*r- ,*n-iere %ner en4ir*nment anal"-i- t* a b%-ine--. !N/#D 2007'

8efer to 9uestion "umer (May/ un $%%&'

7. +lain marketing en4ir*nment f*r t)e b%-ine-- enter+ri-e *f ,*n-%mer g**-.

!MA6#$UN 2009'

8efer to 9uestion "umer (May/ un $%%&'

9. E*w *e- t)e -%b?e,t marketing )a- interfa,e wit) *t)er f%n,ti*nal area-

!MA6#$UN 2009'

• +he relationship etween mar)eting and other functional areas of the usiness is

important for everyone to understand in order to facilitate the coordination of

firmKs usiness*• For non4mar)eting people the understanding is important to ensure the

interactions flow smoothly and effectively*

• In the finan,ial area- decisions made on credit- accounts receivales and accounts

payale have an effect on the scope of mar)eting*

• +he engineering area similarly ma)es strategic decisions affecting mar)eting* +he

,uality of the final product is of course directly related to engineering decisions*

• Mar)eting may also wor) with +er-*nnel department particularly in areas as

estalishing appropriate jo descriptions and communicating the firms need to the people most ,ualified to fill positions*

• Mar)eting and legal departments must interact on issues as the price of the

product- terms of sale- content of advertising messages- wording of patents and

warranties*

;. =T)e Market +la,e i-n:t w)at it %-e t* be = – Di-,%-- ("ov / 2ec $%%L'

A Mar)et place is the space- actual or metaphorical in which a mar)et operates the

term is also used in a trademar) law conte.t to denote the actual consumer environment*

i*e the real world in which products and services are provided and consumed*A

Mar)etplace is a location where goods and services are e.changed* +he traditional mar)et

s,uare is a city s,uare where traders set up stalls and uyers rowse the merchandise*

+his )ind of mar)et is very old and countless such mar)ets are still in operation around

the whole world*


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suppliers from this new community* ;or)ings closely with the memers of the new

community companies get every chance to increase their usiness dramatically*

*r b%"er +arti,i+ant- a market+la,e *ffer-<

• Dower transaction costs streamlined processing

• Access to new suppliers Mar)etplace participants removes geographical arriers

and provides access to new suppliers

• +ime avings provides for faster approval - ordering processes and delivery

trac)ing*

*r S%++lier-

• 8educed inventory cost4Clearer visiility and forecasting aility allow companies

consideraly reduce inventory cost

• Access to new uyers and mar)ets 4 Mar)etplace provides new sales channel

which opens up many new opportunities for suppliers

• Increased sales4;ider Mar)et indicates Increase in ales* ;hich results in

increased revenue*

• 8educed overhead costs

• 8educed order processing cost

• 8educed sales and support costs

10. +lain t)e Marketing n4ir*nment in etail 8efer to 9uestion "umer (May /

une $%%&'11. Marketing +lanning an ,*ntr*l ,an be ,*n-iere a- t)e ner4e ,enter f*r

Marketing Management.: lab*rate. !MA6#$UN8 200;'

+he process of defining the action steps- priorities and schedules y which the

mar)eting strategy will e implemented and ma)ing * sure that the company is achieving

the ojectives that are stated in the mar)eting plan within the determined udget*

+he following steps and activities of Mar)eting planning and control can e

distinguished and considered most important for Mar)eting Management*

Fe-ear,) *f marketing mi an ,*ntr*l<

Di)e the strategic mar)eting planning process- this process also egins with research and

analysis of the mar)eting and consumer environment*


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n the revenue side it shows forecasted sales volume and average reali0ed

price- on the e.pense side it shows the forecasted cost of production- physical distriution

and mar)eting* +he difference is the e.pected profit*

/b?e,ti4e- -etting<

+he annual ojectives can e stated for the one year strategy (for e.ample- increase

mar)et share y .N or improve rand awareness y yN in that year' as well as for

specific statements concerning mar)eting activities* An e.ample of a specific statement

is? decrease cost of sales force as a percentage of sales- improve advertising awareness or

improving company image* +hese statements have to e ,uantified and a time hori0on has

to e set*

Marketing -trateg" an a,ti*n +r*gram<

;hen the ojectives have een set- the mar)eting managers have to refine the strategic

mar)eting plan to the annual mar)eting plan* pecific mar)eting tactics have to e

developed esides the action programs* +he action programs contain the marching orders

in response to the ,uestion OEow will we get thereH=- and the actual steps y which

strategies will e implemented to reach the estalished ojectives*

*ntr*l

+he last step of the mar)eting planning control process is control- which forms a

distinct process itself* +he control of the annual mar)eting plan will e handled y the

management of the PMC*

+o implement the marketing -trateg"G mar)eting management has to decide what level

of mar)eting e.penditures is necessary to achieve the mar)eting ojectives* +he total

udget has to e allocated among the several mar)eting activities and tools in the

mar)eting mi.* 2uring the implementation of activities- the company has to review the

process of mar)eting and sales activities regularly throughout the year* +hese reviews

provide an opportunity to listen to wea) signals and to redirect any parts of the planned

action program that are off target*

12. )**-e a ,*m+an" *f "*%r ,)*i,e an e+lain )*w internal en4ir*nmentalfa,t*r- affe,t t)e marketing *+erati*n-. (une $%%'

8efer to ,uestion "umer (May/ une $%%&'


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13. +lain t)e *re *n,e+t *f Marketing !$%ne 2011'

/F /NPTS / MAFHTINC

"eeds- wants- and demands7 products (goods- services and ideas'7 value- cost and

satisfaction? e.change and transaction? relationships and networ)s? mar)ets? and

mar)eters and prospects*

a' Nee-

2escrie asic human re,uirements such as food- air- water- clothing- and shelter*

b' (ant

"eeds ecome wants when they are directed to specific ojects that might satisfy the

need*

,' Deman

Are wants for specific products ac)ed y an aility to pay*

' Pr*%,t

Is any offering that can satisfy a need or want- such as one of the % asic offerings of

goods- services- e.periences- events- persons- places- properties- organi0ations-

information- and ideas*

e' al%e

As a ratio etween what the customer gets and what he gives. +he customer gets benefits

and assumes costs, as shown in this e,uation?

Galue


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' ,)ange

@ #.changes are carried out y usiness firms- and also y no usiness

organi0ations and even individuals*

@ Four conditions must e.ist for an e.change to e ale to occur?

+wo or more people or organi0ations must e involved*

+he parties must e involved voluntarily*

#ach party must have something of value to e.change- and the parties

must elieve they will each enefit from the e.change*

+he parties must e ale to communicate with each other*

g' Marketing )annel-<

+o reach a target mar)et- the mar)eter uses three )inds of mar)eting channels*

*mm%ni,ati*n ,)annel- deliver messages to and receive messages from target

uyers*+hey include newspapers- maga0ines- radio- television- mail- telephone-

illoards-posters- fliers- C2s- audiotapes- and the Internet*


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purses starts with hides- tanning operations- cutting operations- manufacturing- and the

mar)eting channels that ring products to customers* +his supply chain represents a value

delivery system* #ach company captures only a certain percentage of the total value

generated y the supply chain* ;hen a company ac,uires competitors or moves upstream

or downstream- its aim is to capture a higher percentage of supply chain value*

i' *m+etiti*n

Competition- a critical factor in mar)eting management- includes all of the actual and

potential rival offerings and sustitutes that a uyer might consider*

* Brand competition: A company sees its competitors as other companies that offer

similar products and services to the same customers at similar prices* Gol)swagen might

see its major competitors as +oyota- Eonda- and other manufacturers of medium price

automoiles- rather than Mercedes or Eyundai*

2. Industry competition: A company sees its competitors as all companies that ma)e the

same product or class of products* +hus- Gol)swagen would e competing against all

other car manufacturers*

3. Form competition: A company sees its competitors as all companies that manufacture

products that supply the same service* Gol)swagen would see itself competing against

manufacturers of all vehicles- such as motorcycles- icycles- and truc)s*


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B* Generic competition: A company sees its competitors as all companies that compete

for the same consumer dollars* Gol)swagen would see itself competing with companies

that sell major consumer durales- foreign vacations- and new homes*

5. Marketing M"*+ia


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activities of the mar)eting department carry out o for e.ample- if the mar)eting

department at +escoKs want to carry out a promotion through direct mail- they would as)

the finance department first7 from there the finance department will decide if they are ale

to fund this type of direct mail promotion. +escoKs would not e ale to carry out this

activity without consulting the finance department- ecause the money only goes in and

out of the finance department* Furthermore when the mar)eting departments need money

for researching and development to design new products to attract potential customers-

they would again consult the finance department who would allocate suitale funds- so

that the mar)eting department can carry out this activity efficiently* +he mar)eting

department at +escoKs may also need money if they want to distriute materials such as

posters with special offers- if they donKt consult the finance department aout this activity-

then the mar)eting department at +escoKs could e losing money * Mar)eting approach to

financial documents offers a new perspective often lac)ing in the financial community*

For e.ample

* !tili0ation of the annual report and other financial for mar)eting

$* Measurement of management tradeoff etween ris) and e.pected return utili0ing

conjoint analysis

:* Assessment of the mar)et response functions to changes in prices- mode of

payment - type and level of discount and credit*

B* Application of financial performance measures to relevant mar)et segments and

products*

* Impact of mar)eting activities on investors e.pectations

Pr*%,ti*n Marketing

Production capailities determine the numer and type of products to e mar)eted

Accurate sales forecast is also possile* ;hen uncertainties fluctuations are predicted

• Change the current production capacity

• Influence the nature- level or timing of demand

+he strategy can e achieved y appropriate use of mar)eting strategies such as

advertising- consumer and trade promotion and deals and deletion or addition of products*


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+he interdependency is evident in the development of new products* +he si0e of

new production facilities- depends on mar)eting research ased estimates of the demand

for the new products and the li)ely time and space distriution* It is important to identify

the asic conflicts etween the two functions* Production strives for efficient production

runs which imply long runs- few models- relatively simple- model to produce- and

reasonale ,uality control* Mar)eting would see shorter production runs with many

models- they are less concerned aout the ease of production and would li)e to minimi0e

the possiility of any product failure*

%-t*mer Ser4i,e Marketing

Customer and industrial products re,uire pre post purchase services* ervice

department is often address for customer complaints- "umer and type of complaints are

important inputs for mar)eting strategies- product modification- and new product

development * 8egular #.plicit communication should e estalished etween service-

mar)eting and other relevant functions*

Pr*,%rement Marketing

Procurement is the roader functions of materials management* Many firms have

een modifying their products to sustitute scarce raw materials with more availale-

cheaper or legally acceptale ones* Mar)eting research on customer6s acceptaility for the

sustituted products is vital for input for procurement planning* Procurement research

aimed at the identification and evaluation of new mar)eting research* Mar)eting plan

re,uire input from procurement plans to introduce new materials or anticipated changes in

production output due to changes in the supply of various raw materials*

FD an Marketing

+he primary 82 and Mar)eting interface centre around new product

development effort of the firm* "ew product development stages right from idea

generation to final product development re,uires close interaction* 8ealistic e.pectations

and >rgani0ational climate encourages which encourage the interface etween these two

functions and stimulates innovation are essential ingredients for successful new product

development*

Per-*nnel Marketing


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Personnel Eiring- training and management of appropriate mar)eting personnel*

Mar)eting need to collaorate with personnel in developing jo descriptions- screening

candidates designing training programs and incentive systems*

Management Inf*rmati*n S"-tem

ince the major implication of the independencies etween mar)eting and the

other usiness functions are with respect to the re,uired information and its role in the

firmKs decisions ma)ing process- the design of mar)eting information systems should e

underta)en as in integral part of a roader user oriented management information system*

uch a system incorporates the mar)eting information ( eg slaes- share- consensus-

attitudes etc' with other relevant information ( company sales- cash flow needs-

macroeconomic projections- etc' providing a single organi0ed and timely source of

information to the relevant decision ma)ers* +o the e.tent that the firmKs management

information system includes information and models of competitive ehavior- mar)eting

can provide the necessary vehicles for the gathering- analysis and interpretation

UNIT – II

Part A

1. ()at i-8e8marketing !MA6#$UN 200&'

2e4mar)eting aimed at limiting growth7 practiced- for e.ample- y governments to

conserve natural resources- or y companies unale to serve ade,uately the needs of all

potential customers*Mar)eters attempt to reduce the demand for a product when the

demand for the product is greater than the manufacturer6s aility to produce it* 2e4

mar)eting strategies involve raising prices- reducing advertising or promotion activities-

or eliminating product enefits* 2e4mar)eting does not aim to destroy the demand ut

only to lower it to ma)e it level with the aility to produce the product*

2. ()at are t)e -te+- *f ,*n-%mer e,i-i*n making !MA6#$UN 200&'

Become Aware of a Problem or Opportunity: +he consumer ecomes aware of an

unfulfilled need- such as replacing a regularly purchased item such as toothpaste or

uying a new !G (sports utility vehicle' to reach remote areas 4 and perhaps gain peer

approval*

Search for Information: 1athering information from various sources in order to ma)e a

etter4informed decision* For e.ample- the !G uyer may consult with others who own


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times'* It is important to minimi0e the differences in performance (through

training- standard4setting and ,uality assurance'*

5. ()at i- -er4i,e marketing (MA6#$UN 2007'

ervices are separately identifiale- intangile activities which provide want

satisfactions when mar)eted to consumers and industrial users and which are not

necessarily tied to the sale of product or another service* +he following are the

mar)eting tools used in service mar)eting4place- people- e,uipment-

communication- materials- symols and price*

&. E*w *e- :ran,)i-ing: )el+ in -er4i,e marketing !N/#D 2007'

Franchising has ecome a popular way to e.pand delivery of an effective service

concept to multiple sites without the level of investment capital that would e needed for

rapid e.pansion of company4owned and managed sites* Franchises can often e.pand

faster than company operated outlets6 not only for financial reasons ut also ecause

locally ased franchisers usually have estalished usiness networ)s and e.perience in

dealing with government officials*

7. ()* i- a ,%-t*mer !MA6#$UN 2009'

A customer- also client- uyer or purchaser is the uyer or user of the paid products of

an individual or organi0ation- mostly called the supplier or seller* +his is typically through

purchasing or renting goods or services*

9. ()* i- a -ati-fie ,%-t*mer !MA6#$UN 2009'

A delighted customer is a satisfied customer* atisfied customer is more li)ely to

ac,uire additional product/ services- and therefore ecome a profitale customer* atisfied

customer is also more li)ely to maintain and group the relationship over an e.tended

period of time*

;. State STP -trateg". !N/#D 2009'

+o identify groups or segments of potential customers (individuals- organi0ations-

uying centers- etc*' whose desired values from products and services within groups are

similar and whose values etween groups are different*+o select one or more groups as a

target segment who respond favoraly to a current or prospective mar)eting offering*+o


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achieve a desired positioning in the minds of potential segment customers (defined

roadly- as aove' with a profitale mar)eting program*

10. Define referen,e gr*%+-. !N/#D 2009'

A reference group is a sociological concept referring to a group to which another group is

compared* 8eference groups are used in order to evaluate and determine the nature of a

given individual or other group6s characteristics and sociological attriutes* 8eference

groups provide the enchmar)s and contrast needed for comparison and evaluation of

group and personal characteristics*8eference groups act as a frame of reference to which

people always refer to evaluate their achievements- their role performance- aspirations

and amitions* A reference group can e either from a memership group or non4

memership group*

11. Di-ting%i-) am*ng fi4e t"+e- *f ,%-t*mer nee-. !MA6#$UN8 200;'

• %n,ti*nal nee-< +hose needs which satisfy a physical / functional purpose e*g*

oap

• S*,ial nee-


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25

al%e of a product within the conte.t of mar)eting means the relationship

etween the customerKs e.pectations of product ,uality to the actual amount paid for it* It

is often e.pressed as the e,uation?

Galue


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26

19. S%gge-t an" f*%r -trategie- f*r -er4i,e- marketing !$%ne 2010 '

Ser4i,e Mi<

• +angiles to e associated with intangiles

• ervice Product is to e e,uated with the service provider

• Dong term4 relationship

Marketing mi f*r -er4i,e-

• Mar)eting should occur at all levels

• #stalish direct contact with the customers

• !se high4,uality personnel for mar)eting jo

• Creation of loyalty

• #nsure ,uic) resolving of prolems

•


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@ Place

@ Promotion

@ People

@ Process

@ Physical evidence*

$%* ()at * "*% mean b" r*ntal Atta,k

+his strategy is used when the challenger masses its competitive forces right up

against those of the opponent y attac)ing its competitorKs strengths rather than its

wea)ness* For this to succeed- the challenger needs a strength advantage over the

opponent*

21. ()at * "*% mean b" lank Atta,k

+his strategy is used when the challenger sets its sights on its targetKs wea)est points*

22. ()at * "*% mean b" n,ir,lement Atta,k

It is used only y well financed firms* It involves an attempt to capture a wide slice

of the competitorsK mar)et through a grand offensive on several road fronts*

$:* ()at * "*% mean b" B"+a-- Atta,k

It avoids any elligerent move directed against competitorsK territory* It involves

ypassing competitors and attac)ing easier mar)ets*

$B.()at * "*% mean b" C%erilla Atta,k

It involves ma)ing small- intermittent attac)s on different territories of the opponent*

A guerilla attac)er uses oth conventional and unconventional means of attac)ing

the opponent* +hese might include reflective price cuts- intense promotional ursts

and occasional legal actions*

Part B

1. ()at ke" -trategi, i--%e- are fa,e b" traiti*nal Jbri,k-8an8m*rtarJ retailer

-%,) a- (al8MartG Hmart an /ffi,e De+*t w)en t)e" g* *nline t* -ell +r*%,t-

!N/#D 200&'

It is essential that different firms in the same usiness not attempt to compete on

e.actly the same variales* If they do- competition will invarialy degenerate into price4

there is nothing else that would differentiate the firms*


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28

+here are many ostacles these companies need to face when they go on4line for selling

their products* +he following ostacles need to e avoided and accordingly proper

strategic planning need to e adopted**

• 8each

• Concerns aout privacy

• #ducational issues

• Costs

• Danguage

• 1overnment Danguage

• Cultural >stacles

• Payment Issues

2eveloping a proper wesite is also a must for online mar)eters efore they launch a product across orders* +he various strategic issues need to e )eep in mind are?

• peed vs* aesthetics

• 3eeping users on the site

• Information collection

+he Companies need to uild and construct an effective channel structure and

memership issues so that ail the products manufactured y these companies would e

reached safety to the consumer6s on4 time without any damage and discrepancies* +his is

also a major strategic issue the companies need to )eep in mind*

• Paths to the consumer

• Potential channel structures

• Criteria in selecting channel memers

• Piggy4ac)ing strategy

• Parallel distriution

• #valuating channel performance

ii' Pr*4iing ,%-t*mer -er4i,e a++ear- t* be *ne *f t)e +rimar" ,)allenge-

f*r Internet marketer-. ()at im+li,ati*n- *e- t)i- )a4e f*r t)eir Jbri,k-8

an8 m*rtarJ ,*m+anie- (N/#D 200&'

• !se technology to create an immediate- tangile enefit for the consumer

• Ma)e the technology easy to use

• #.ecution matters? prototype- test- and refine*

• 8ecogni0e that customers6 response to technology varies*

•


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• !se technology to tailor mar)eting programs to individual customers6

re,uirements

•


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30

+he services mar)eting mi. is an e.tension of the BPs framewor)* +he essential

elements of product- promotion- price and place remain ut : additional elements 4

people- physical evidence and process are included to the TPs mi.* +he need for the

e.tension is due to the high degree of direct contact etween service providers and its

customers- the highly visile nature of the service process- and the simultaneity of the

production and consumption*

Pe*+le 4 ecause of the simultaneity of production and consumption in services the

company6s staff occupy the )ey position in influencing customer6s perceptions of product

,uality* In fact the service ,uality is inseparale from the ,uality of service provider* An

important mar)eting tas) is to set standards to improve ,uality of services provided y

employees and monitor their performance* ;ithout training and control employees tend

to e variale in their performance leading to variale service ,uality* +raining is crucial

so that employees understand the appropriate forms of ehavior and trainees adopt the

est practices*

P)"-i,al e4ien,e 4 this is the environment in which the service is delivered and any

tangile goods that facilitate the performance and communication of the service*

Customers loo) for clues to the li)ely ,uality of a service also y inspecting the tangile

evidence* For e.ample- prospective customers may loo) to the design of learning

materials- the appearance of facilities- staff- etc*

Pr*,e-- 4 this means procedures- mechanism and flow of activities y which a service

is ac,uired* Process decisions radically affect how a service is delivered to customers*

+he service in organi0ations includes several processes e*g* first contact with customers-

administrative procedure regarding delivery- preparation and evaluation of service

offerings*

9uestion "umer : ("ov / 2ec $%%T'

3. Di-,%-- -er4i,e marketing wit) +arti,%lar referen,e t* ,*mmer,ial bank-.

(MA6#$UN 2007'

ervice companies can try to demonstrate their service ,uality through physical

evidence and presentation* uppose a commercial an) wants to position itself as the

SfastS an)* It could ma)e this positioning strategy tangile a numer of mar)eting tools?

Pla,e< +he e.terior and interior should have clean lines* +he waiting lines should not get

overly long* +he layout of the des)s and the traffic flow should e planned carefully*


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Pe*+le< Personnel should e usy* +here should e a sufficient numer of employees to

manage the wor)load*

K%i+ment< Computers- copying machines- des)s should e state of art*

*mm%ni,ati*n material< Printed materials should suggest efficiency and speed*

S"mb*l-< +he name and symol should suggest fast service*

Pri,e< +he an) could advertise that it will deposit 8s* % in the account of any customer

who waits in line for more than five minutes*

. ()at are t)e i-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**- +lain

t)e aiti*nal t)ree marketing mi element- in -er4i,e- marketing.!N/#D

2007'

Di-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**-<

• Intangibilit" the service cannot e touched or viewed- so it is difficult for clients

to tell in advance what they will e getting7

• In-e+arabilit" *f +r*%,ti*n an ,*n-%m+ti*n the service is eing produced at

the same time that the client is receiving it (eg during an online search- or a legal

consultation'7

• Peri-)ibilit" unused capacity cannot e stored for future use* For e.ample- spare

seats on one aero plane cannot & transferred to the ne.t flight- and ,uery4free

times at the reference des) cannot e saved up until there is a usy period*

• Eeter*geneit" !*r 4ariabilit"'< services involve people- and people are all

different* +here is a strong possiility that the same en,uiry would e answered

slightly differently y different people (or even y the same person at different

times'* It is important to minimi0e the differences in performance (throughtraining- standard4setting and ,uality assurance'*

Aiti*nal marketing mi element- in -er4i,e- marketing<

+he mar)eting mi. is the comination of mar)eting activities that an organi0ation

engages in so as to est meet the needs of its targeted mar)et*

T)e marketing mi t)%- ,*n-i-t- *f f*%r main element-<

@ Product @ Price

Place @ Promotion


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In addition to the traditional four Ps it is now customary to add some more Ps to

the mi. to give us even Ps* +he additional Ps have een added ecause today mar)eting

is far more customer oriented than ever efore- and ecause the service sector of the

economy has come to dominate economic activity in this country* +hese : e.tra Ps are

particularly relevant to this new e.tended service mi.*

+he services mar)eting mi. is an e.tension of the BPs framewor)* +he essential

elements of product- promotion- price and place remain ut : additional elements 4

people- physical evidence and process are included to the TPs mi.* +he need for the

e.tension is due to the high degree of direct contact etween service providers and its

customers- the highly visile nature of the service process- and the simultaneity of the

production and consumption*

People 4 ecause of the simultaneity of production and consumption in services

the company6s staff occupy the )ey position in influencing customer6s perceptions of

product ,uality* In fact the service ,uality is inseparale from the ,uality of service

provider* An important mar)eting tas) is to* set standards to improve ,uality of services

provided y employees and monitor their performance* ;ithout training and control

employees tend to e variale in their performance leading to variale service ,uality*

+raining is crucial so that employees understand the appropriate forms of ehavior and

trainees adopt the est practices*

Physical eidence 4 this is the environment in which the service is delivered and

any tangile goods that facilitate the performance and communication of the service*

Customers loo) for clues to the li)ely ,uality of a service also y inspecting the tangile

evidence* For e.ample- prospective customers may loo) to the design of learning

materials- the appearance of facilities- staff- etc*

Process 4 this means procedures- mechanism and flow of activities y which a service

is ac,uired* Process decisions radically affect how a service is delivered to customers*

+he service in organi0ations includes several processes e*g* first contact with customers-

administrative procedure regarding delivery- preparation and evaluation of service

offerings*

5. +lain bran management. !MA6#$UN 2009'

Bran management is the application of mar)eting techni,ues to a specific product-

product line- or rand* It see)s to increase the product6s perceived value to the customer

and therey increase rand franchise and rand e,uity*


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Mar)eters see a rand as an implied promise that the level of ,uality people have

come to e.pect from a rand will continue with future purchases of the same product*

+his may increase sales y ma)ing a comparison with competing products more

favorale* It may also enale the manufacturer to charge more for the product* +he value

of the rand is determined y the amount of profit it generates for the manufacturer*+his

can result from a comination of increased sales and increased price- and/or reduced

C>1 (cost of goods sold'- and/ or reduced or more efficient mar)eting investment*All of

these enhancements may improve the profitaility of a rand- and thus- S


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!MA6#$UN 2009'

Mar)eting of services is the diametrically opposed non4material counterpiece of a

physical good* A service provision comprises a se,uence of activities that does not result

in ownership of the outcome- and this is what fundamentally differentiates it from

furnishing someone with physical goods* ervice provision is a process that creates

predetermined enefits y effectuating either a change of service consumers- a change in

their physical possessions or a change in their (in'tangile assets*Mar)eting a service4ase

usiness is different from mar)eting a goods4ase usiness*

+here are several major differences- including?

• +he uyer purchases are intangile• +he service may e ased on the reputation of a single person

• It6s more difficult to compare the ,uality of similar services

• +he uyer cannot return the service

Mar)eting of service is a set of singular and perishale enefits

@ delivered from the accountale service provider- mostly in close coaction with his

service suppliers-

• generated y functions of technical systems and/or y distinct activities of

individuals- respectively-

• commissioned according to the needs of his service consumers y the service

customer from the accountale service provider-

• rendered individually to an authori0ed service consumer at his/her dedicated

re,uest-

• and- finally- consumed and utili0ed y the re,uesting service consumer for

e.ecuting and/or supporting his/her day4to4day usiness tas)s or private activities

Mar)eting of service is one of the most important ingredients of the mar)eting mi. for

products and services* Eigh ,uality customer service helps to create customer loyalty*

Customers today are not only interested in the product they are eing offered ut all the

additional elements of service that they receive from the greeting they receive when they

enter a retail outlet- to the refund and help that they receive when they have a complaint

aout a faulty product that they have paid for*

Performance of the service is not seen as a primary responsiility of mar)eting- ut given

the importance of reputation- referrals and repeat usiness- the mar)eting function cannot

ignore this stage* uccessful companies attach great importance to monitoring service


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Competitive analysis is also an important part of product planning* Your

customers- sales channels- and prospects evaluating your product will tell you where you

fall short competitively* Additionally you may want to ta)e an e.isting strength that you

have over your competitors and lengthen your lead with improvements to that strength*

8ememer that a competitor won6t release a feature that is just on par with your product-

they will e trying to e.ceed your strength* Also understand where your competitors are

going and what products they have in the wor)s* You won6t get this information directly

from them- ut you may hear rumors or see press on their strategic directions*

Additionally listen to your prospects when they are as)ing you aout your product

features and directions* >ften times they are parroting ac) information that your

competitor6s have given them* +he ;orld ;ide ;e is also an e.cellent place to gather

competitive information* >ften times competitors will pulish their strategic directions

and- for software companies- actually have eta versions of their new software releases

availale*

Pr*%,t Iea- Fefine

After narrowing down the list of potential new products or features enhancements

for an e.isting product- you will want to refine some of the more promising ideas*


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38

satisfaction is asically a psychological state- care should e ta)en in the effort of

,uantitative measurement- although a large ,uantity of research in this area has recently

een developed*

#.ceptional customer service results in greater customer retention- which in turn

results in higher profitaility* Customer loyalty is a major contriutor to sustainale profit

growth* +o achieve success- you must ma)e superior service second nature of your

organi0ation* A seamless integration of all components in the service4profit chain 4

employee satisfaction- value creation- customer satisfaction- customer loyalty- and profit

and growth 4 lin)s all the critical dynamics of top customer service*

adly- mature companies often forget or forsa)e the thing that made them successful

in the first place? a customer4centric usiness model* +hey lose focus on the customer and

start focusing on the ottom line and ,uarterly results* +hey loo) for ways to cut costs or

increase revenues- often at the e.pense of the customer*

+hey forget that satisfying customer needs and continuous value innovation is the

only path to sustainale growth* +his creates opportunities for new- smaller companies to

emulate and improve upon what made their igger competitors successful in the first

place and steal their customers*

;. +lain t)e ,*m+*nent- *f t)e marketing mi in etail. ("ov / 2ec $%%L'

+he mar)eting mi. is proaly the most famous mar)eting term* Its elements are the

asic- tactical components of a mar)eting plan* Also )nown as the Four P6s- the mar)eting

mi. elements are price- place- product- and promotion* 8ead on for more details on the

mar)eting mi.*

Pri,e

+here are many ways to price a product* Det6s have a loo) at some of them and try

to understand the est policy/strategy in various situations*

Premi%m Pri,ing.

!se a high price where there is a uni,ueness aout the product or service* +his

approach is used where a sustantial competitive advantage e.ists* uch high prices are

charge for lu.uries such as Cunard Cruises- avoy Eotel rooms- and Concorde flights*

Penetrati*n Pri,ing.


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+he price charged for products and services is set artificially low in order to gain

mar)et share* >nce this is achieved- the price is increased* +his approach was used y

France +elecom and )y +G*

,*n*m" Pri,ing.

+his is a no frills low price* +he cost of mar)eting and manufacture are )ept at a

minimum* upermar)ets often have economy rands for soups- spaghetti- etc*

Pri,e Skimming.

Charge a high price ecause you have a sustantial competitive advantage*

Eowever- the advantage is not sustainale* +he high price tends to attract new

competitors into the mar)et- and the price inevitaly falls due to increased supply*

Manufacturers of digital watches used a s)imming approach in the T%s* >nce other

manufacturers were tempted into the mar)et and the watches were produced at a lower

unit cost- other mar)eting strategies and pricing approaches are implemented*

Premium pricing- penetration pricing- economy pricing- and price s)imming are the four

main pricing policies/strategies* +hey form the ases for the e.ercise* Eowever there are

other important approaches to pricing*

P-",)*l*gi,al Pri,ing.

+his approach is used when the mar)eter wants the consumer to respond on an

emotional- rather than rational asis* For e.ample 6price point perspective6 cents not

one dollar*

Pr*%,t ine Pri,ing.

;here there is a range of product or services the pricing reflect the enefits of

parts of the range* For e.ample car washes* ptional 6e.tras6 increase the overall price of the product or service* For e.ample

airlines will charge for optional e.tras such as guaranteeing a window seat or reserving a

row of seats ne.t to each other*

a+ti4e Pr*%,t Pri,ing


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;here products have complements- companies will charge a premium price where

the consumer is captured* For e.ample a ra0or manufacturer will charge a low price and

recoup its margin (and more' from the sale of the only design of lades which fit the

ra0or*

Pr*%,t B%nle Pri,ing.

Eere sellers comine several products in the same pac)age* +his also serves to

move old stoc)* Gideos and C2s are often sold using the undle approach*

Pr*m*ti*nal Pri,ing.

Pricing to promote a product is a very common application* +here- are many

e.amples of promotional pricing including approaches such as 1>F (ne 1et

>ne Free'*

Ce*gra+)i,al Pri,ing.

1eographical pricing is evident where there are variations in price in different

parts of the world*4For e.ample rarity value- or where shipping costs increase price*

al%e Pri,ing.

+his approach is used where e.ternal factors such as recession or increased

competition force companies to provide 6value6 products and services to retain sales e*g*

value meals at Mc2onalds*

Pla,e

Another element of "eil E*


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• ;hich companies as intermediaries to avoid 6intrachannel conflict6 (i*e* infighting

etween local distriutors'*

Sele,ti*n *n-ierati*n 8 )*w * we e,ie %+*n a i-trib%t*r

• Mar)et segment 4 the distriutor must e familiar with your target consumer and

segment*

• Changes during the product life cycle 4 different channels can e e.ploited at

different points in the PDC e*g* Foldaway scooters are now availale everywhere*

>nce they were sold via a few specific stores*

• Producer 4 distriutor fit 4 Is there a match etween their polices- strategies-

image- and yoursH Doo) for 6synergy6*

•9ualification assessment 4 estalish the e.perience and trac) record of yourintermediary*

• Eow much training and support will your distriutor re,uireH

T"+e- *f )annel Intermeiarie-.

+here are many types of intermediaries such as wholesalers- agents- retailers- the

Internet- overseas distriutors- direct mar)eting (from manufacturer to user without an

intermediary'- and many others* +he main modes of distriution will e loo)ed at in more

detail*

)annel Intermeiarie- 8 ()*le-aler-

• +hey rea) down 6ul)6 into smaller pac)ages for resale y a retailer*

• +hey uy from producers and resell to retailers* +hey ta)e ownership or Ktitle to

goods whereas agents do not (see elow'*

• +hey provide storage facilities* For e.ample- cheese manufacturers seldom wait

for their product to mature* +hey sell on to a wholesaler that will store it and

eventually resell to a retailer*

• ;holesalers offer reduce the physical contact cost etween the producer and

consumer e*g* customer service costs- or sales force costs*

A wholesaler will often ta)e on the some of the mar)eting responsiilities* Many

produce their own rochures and use their own telesales operations

)annel Intermeiarie- 8 Agent-

• Agents are mainly used in international mar)ets*


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• An agent will typically secure an order for a producer and will ta)e a commission*

+hey do not tend to ta)e title to the goods* +his means that capital is not tied up in

goods* Eowever- a 6stoc)ist agent6 will hold consignment stoc) (i*e* will store the

stoc)- ut the title will remain with the producer* +his approach is used wheregoods need to get into a mar)et soon after the order is placed e*g* foodstuffs'*

• Agents can e very e.pensive to train* +hey are difficult to )eep control of due to

the physical distances involved* +hey are difficult to motivate*

)annel Intermeiarie- 8 Fetailer-

• 8etailers will have a much stronger personal relationship with the consumer*

• +he retailer will hold several other rands and products* A consumer will e.pect to

e e.posed to many products*• 8etailers will often offer credit to the customer e*g* electrical wholesalers- or

travel agents*

• Products and services are promoted and merchandised y the retailer*

• +he retailer will give the final selling price to the product*

• 8etailers often have a strong 6rand6 themselves e*g* 8oss and ;all4Mart in the

!A- and Alisuper- Modelo- and umo in Portugal*

. )annel Intermeiarie- 8 Internet

• +he Internet has a geographically disperse mar)et*

• +he main enefit of the Internet is that niche products reach a wider audience e*g*

cottish almon direct from an Inverness fishery*

• +here are low arriers low arriers to entry as set up costs are low*

• !se e4commerce technology (for payment- shopping software- etc'

• +here is a paradigm shift in commerce and consumption which enefits

distriution via the Internet

Pr*m*ti*n

Another one of the BP6s is promotion* +his includes all of the tools availale to the

mar)eter for 6mar)eting communication6* As with "eil E*


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• Pulic 8elations*

• 2irect Mail*

• +rade Fairs and #.hiitions*

• Advertising*

•

ponsorship*

+he elements of the promotions mi. are integrated to form a coherent campaign* As

with all forms of communication* +he message from the mar)eter follows the

6communications process6 as illustrated aove* For e.ample- a radio advert is made for a

car manufacturer* +he car manufacturer (sender' pays for a specific advert with contains a

message specific to a target audience (encoding'* It is transmitted during a set of

commercials from a radio station (Message / media'*

+he message is decoded y a car radio (decoding' and the target consumer interprets

the message (receiver'* Ee or she might visit a dealership or see) further information

from a we site (8esponse'* +he consumer might uy a car or e.press an interest or

disli)e (feedac)'* +his information will inform future elements of an integrated

promotional campaign* Perhaps a direct mail campaign would push the consumer to the

point of purchase* "oise represent the thousand of mar)eting communications that a

consumer is e.posed to everyday- all competing for attention*

PE6SIA IDN

Physical #vidence is the material part of a service* trictly spea)ing there are no

physical attriutes to a service- so a consumer tends to rely on material cues* +here are

many e.amples of physical evidence- including some of the following?

• Pac)aging* V

• Internet/we pages*

• Paperwor) (such as invoices- tic)ets and despatch notes'*

•


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e.perience are altered to meet the 6individual needs6 of the person consuming it* Most of

us can thin) of a situation where the personal service offered y individuals has made or

tainted a tour- vacation or restaurant meal* 8ememer- people uy from people that they

li)e- so the attitude- s)ills and appearance of all rtaff need to e first class*

PF/SS

Process is another element of the e.tended mar)eting mi.- or TP6s*+here are a

numer of perceptions of the concept of process within the usiness and mar)eting

literature* ome see processes as a means to achieve an outcome- for e.ample 4 to achieve

a :%N mar)et share a company implements a mar)eting planning process* Another view

is that mar)eting has a numer of processes that integrate together to create an overall

mar)eting process- for e.ample 4 telemar)eting and Internet mar)eting can e integrated*

A further view is that mar)eting processes are used to control the mar)eting mi.- i*e*

processes that measure the achievement mar)eting ojectives* All views are

understandale- ut not particularly customer focused*

For the purposes of the mar)eting mi.- process is an element of service that sees

the customer e.periencing an organisation6s offering* It6s est viewed as something that

your customer participates in at different points in time* Eere are some e.amples to help

your uild a picture of mar)eting process- from the customer6sKpoint of view*

1oing on a cruise 4 from the moment that you arrive at the doc)side- you are greeted7

your aggage is ta)en to your room* You have two wee)s of services from restaurants and

evening entertainment- to casinos and shopping* Finally- you arrive at your destination-

and your aggage is delivered to you* +his is a highly focused mar)eting process*

10. +lain t)e ifferent ,ateg*rie- *f -er4i,e mi in etail. !N/#D 2009'

A service is the action of doing something for someone or something* It is largely

intangile (i*e* not material'* A product is tangile (i*e* material' since you can touch it

and own it* A service tends to e an e.perience that is consumed at the point where it is

purchased- and cannot e owned since is ,uic)ly perishes* A person could go to a cafe one

day and have e.cellent service- and then return the ne.t day and have a poor e.perience*

o often mar)eters tal) aout the nature of a service as?


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In-e+arable 4 from the point where it is consumed- and from the provider of the

service* For e.ample- you cannot ta)e a live theatre performance home to consume it (a

2G2 of the same performance would e a product- not a service'*

Intangible 4 and cannot have a real- physical presence as does a product* For

e.ample- motor insurance may have a certificate- ut the financial service itself cannot e

touched i*e* it is intangile*

Peri-)able 4 in that once it has occurred it cannot e repeated in e.actly the same

way* For e.ample- once a %% metres >lympic final has een run- there will e not other

for B more years- and even then it will e staged in a different place with many different

finalists*

ariabilit"8 since the human involvement6of service provision means that no two

services will e completely identical* For e.ample- returning to the same garage time and

time again for a service on your car might see different levels of customer satisfaction- or

speediness of wor)*

Fig)t *f *wner-)i+ 4 is not ta)en to the service- since you merely e.perience it* For

e.ample- an engineer may service your air4 conditioning- ut you do not own the service-

the engineer or his e,uipment* You cannot sell it on once it has een consumed- and do

not ta)e ownership of it*

11. +lain Marketing Mi. *mment in brief %+*n it- ingreient-. !MA6#$UN8

200;'

+he mar)eting mi.- earlier )nown as the B pKs- (ut now has a few more'- is a vital

part of any mar)eting strategy* +his is a tool wherey the mar)eter ta)es decisions on

what and how a product should e- where it can e sold- how it should e priced- how it

will e promoted- how to e,uip the people who are responsile for selling the product***

and so on* 1etting the mar)eting mi. right is e,ually important for the large corporation

and the small usiness owner* Det us ta)e a closer loo) at the most important elements*

Pr*%,t< A lot of thought and effort goes into designing a product offering* +he most

important ,uestion that you- as a mar)eter- need to as) is whether there is a need for yourtype of product and how your own product satisfies that need etter than those of your

competitors* +his will force you to thin) of why your product is uni,ue- and therey help

you evolve your productKs !ni,ue elling Proposition* At the same time- you will need to


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analy0e your companyKs strengths and wea)nesses and the opportunities and threats posed

y the mar)et- to understand how you are positioned versus the competition*

Pri,e< +his element of the mar)eting mi. can e many a strategyKs undoing* A

complete understanding of the financial that drive a usiness is essential efore deciding a

pricing strategy*


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12. +lain t)e ,*n,e+t *f bran eK%it". !MA6#$UN8 200;'


48/143


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re,uire little prior information aout customers- and the product itself can e

manufactured after customers tell the mar)eters what they want to uy*

In developing customeri0ation strategies- however- mar)eters face a numer of

challenges* +hese include otaining information from customers- identifying intangile

factors that may e crucial to customers- dealing with enhanced customer e.pectations-

limiting the comple.ity of options- and pricing customi0ed offerings*

In addition- while technology ma)es the implementation of customeri0ation strategies

easier and cheaper- strategic and* organi0ational decisions are more comple. and

e.pensive- as the mar)eter determines what is the right information to send to each

customer* +o e truly successful at customeri0ation- a mar)eter must ring together the

value chains of the supply and demand sides of the mar)et* In some cases- the entire

company might e reorgani0ed around a new order generation and fulfillment process as

part of a customer4driven- integrated gloal supply chain*

Finally- mar)eters face critical decisions aout where and when to customeri0e and

how to integrate this strategy with other mar)eting strategies* +hey must determine the

optimal portfolio of mass mar)eting- direct mar)eting to target segments- and interactive

customi0ed mar)eting* In this new realm- success will depend on finesseWthe aility todeploy effort into areas that generate higher customer- value than the cost of adding that

valueWrather than on massive resources*

;here should a mar)eter egin in implementing a customeri0ation strategyH First- y

increasing the digital content of its offerings and of the customerKs shopping and

consumption e.perience- and second- y positioning the firm to ecome the customeri0er

of the entire industry*

1. +lain t)e b%-ine-- %nit -trategi, +lanning +r*,e--!$%ne 2011'

In today6s highly competitive usiness environment- udget4oriented planning or

forecast4ased planning methods are insufficient for a large corporation to survive and

prosper* +he firm must engage in -trategi, +lanning that clearly defines ojectives and

assesses oth the internal and e.ternal situation to formulate strategy- implement the

strategy- evaluate the progress- and ma)e adjustments as necessary to stay on trac)*

A simplified view of the strategic planning process is shown y the following diagram?


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T)e Strategi, Planning Pr*,e--

Mi--i*n

/b?e,ti4e-

n4ir*nmental

S,anning

Strateg"

*rm%lati*n

Strateg"

Im+lementati*n

4al%ati*n

*ntr*l

Mi--i*n an /b?e,ti4e-

+he mission statement descries the company6s usiness vision- including theunchanging values and purpose of the firm and forward4loo)ing visionary goals that

guide the pursuit of future opportunities*

1uided y the usiness vision- the firm6s leaders can define measurale financial and

strategic ojectives* Financial ojectives involve measures such as sales targets and

earnings growth* trategic ojectives are related to the firm6s usiness position- and may

include measures such as mar)et share and reputation*

n4ir*nmental S,an

+he environmental scan includes the following components?


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• Internal analysis of the firm

• Analysis of the firm6s industry (tas) environment'

• #.ternal macroenvironment (P#+ Analysis'

+he internal analysis can identify the firm6s strengths and wea)nesses and the e.ternal

analysis reveals opportunities and threats* A profile of the strengths- wea)nesses-

opportunities- and threats is generated y means of a ;>+ analysis*An industry analysis

can e performed using a framewor) developed y Michael Porter )nown asPorterKs five

forces* +his framewor) evaluates entry arriers- suppliers- customers- sustitute products-

and industry rivalry*

Strateg" *rm%lati*n

1iven the information from the environmental scan- the firm should match its

strengths to the opportunities that it has identified- while addressing its wea)nesses and

e.ternal threats*+o attain superior profitaility- the firm see)s to develop a competitive

advantage over its rivals* A competitive advantage can e ased on cost or differentiation*

Michael Porter identified three industry4independent generic strategies from which the

firm can choose*

Strateg" Im+lementati*n

+he selected strategy is implemented y means of programs- udgets- and

procedures* Implementation involves organi0ation of the firm6s resources and motivation

of the staff to achieve ojectives*+he way in which the strategy is implemented can have

a significant impact on whether it will e successful* In a large company- those who

implement the strategy li)ely will e different people from those who formulated it* For

this reason- care must e ta)en to communicate the strategy and the reasoning ehind it*

>therwise- the implementation might not succeed if the strategy is misunderstood or if

lower4level managers resist its implementation ecause they do not understand why the

particular strategy was selected*

4al%ati*n *ntr*l

+he implementation of the strategy must e monitored and adjustments made as

needed*#valuation and control consists of the following steps?

* 2efine parameters to e measured


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$* 2efine target values for those parameters

:* Perform measurements

B* Compare measured results to the pre4defined standard

* Ma)e necessary changes

15. 2ifferentiate service mar)eting from product mar)eting* uggest additional mar)eting

mi. for services* (une $%%'

8efer to 9*"o % "ov/2ec $%%L and 9*"o* May/ une $%%

UNIT – III

Part A

1.+lain t)e ,*n,e+t *f re+*-iti*ning. !MA6#$UN 200&'

Product positioning is not limited to new products alone* It is relevant for

occasional face lifting of the e.isting products of almost all )inds such as toilet soaps-

shampoos- cosmetics- tooth pastes- etc* 8epositioning does not mean total change* It

sometimes entails strengthening and clarifying an e.isting identity* 8epositioning does

not always hold the )ey to success* In case a product has got into a very ad shape due to

prolonged neglect- repositioning effort may turn out to e an e.ercise in futility* In such

cases it would always e etter to drop the product*

2. ()en i- +enetrati*n +ri,ing a g** *+ti*n !MA6#$UN 200&'

Penetration pricing involves the setting of lower- rather than higher prices in order

to achieve a large- if not dominant mar)et share* +his strategy is most often used

usinesses wishing to enter a new mar)et or uild on a relatively small mar)et share* +his


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will only e possile where demand for the product is elieved to e highly elastic- i*e*

demand is price4sensitive and either new uyer will e attracted- or e.isting uyers will

uy more of the product as a result of a low price* A penetration pricing strategy may also

promote complimentary and captive products* +he main product may e priced with a

low mar)up to attract sales (it may even e a loss4leader'* Customers are then sold

accessories (which often only fit the manufacturer6s main product' which are sold at

higher mar)4ups*

3. ()at i- Pr*m*ti*n Mi Menti*n +r*m*ti*n mi element-. (N/#D 200&'

Promotion involves disseminating information aout a product- product line- rand- or

company* It comprises of four elements which includes?

• Advertising

• Personal elling

• ales Promotion

• Pulicity and Pulic relations

. Define Bran. (N/#D 200&'

A rand is a collection of images and ideas representing an economic producer7

more specifically- it refers to the concrete symols such as a name- logo- slogan- and

design scheme

5. ()at i- +r*%,t ,*n,e+t !MA6#$UN 2007'

+he product concept holds that the consumers will favor those products

that offer the most ,uality- performance- or innovative features* +herefore

managers in these organi0ations focus on ma)ing superior products and

improving them over time*

&.Define intr*%,ti*n -tage *f P. !MA6#$UN 2007'

Introduction is the early stage- when product is introduced in mar)et- sales

revenue egins to grow ut the rate of growth is very slow* Profits may not e

there as there is low sales volume- large production and distriution costs* It may

re,uire heavy advertising and sales promotion* Products are rought cautiously

on a trail asis*

7.Define :Bran +*-iti*ning:. !N/#D 2007'


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6relative competitive comparison6 their product occupies in a given mar)et as perceived y

the target mar)et*

9. ()at i- +r*%,t !MA6#$UN 2009'

• a product is anything that can e offered to a mar)et that might satisfy a want or

need

• a thing produced y laor or effort In manufacturing- products are purchased as

raw materials and sold as finished goods*+he end result of the manufacturing

process- to e offered to the mar)etplace to satisfy a need or want*

;.()at i- Bran +*-iti*ning !MA6#$UN 2009'

Positioning is how a rand appears in relation to other rands in the mar)et* It is

influenced y the e.periences customers have with a rand6s products- services-

advertising and promotional material- and representatives over time* +he development of

a randKs position in the mar)et y heightening customer perception of the rand6s

superiority over other rands of a similar nature*


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• +o achieve a desired positioning in the minds of potential segment customers

(defined roadly- as aove' with a profitale mar)eting program*

12. Define -er4i,e. !MA6#$UN 2009'

A service is the diametrically opposed non4material counterpiece of a physical

good* A service provision comprises a se,uence of activities that does not result in

ownership of the outcome- and this is what fundamentally differentiates it from furnishing

someone with physical goods* ervice provision is a process that creates predetermined

enefits y effectuating either a change of service consumers- a change in their physical

possessions or a change in their (in'tangile assets*

13. Define 4al%e ,)ain. !MA6#$UN8 200;'

A value chain is a chain of activities* Products pass through all activities of the

chain in order and at each activity the product gains some value* +he chain of activities

gives the products more added value than the sum of added values of all activities* It is

important not to mi. the concept of the value chain with the costs occurring throughout

the activities*

1. Define Pr*%,t P*-iti*ning. !MA6#$UN8 200;'

Pr*%,t P*-iti*ning has come to mean the process y which mar)eters try to

create an image or identity in the minds of their target mar)et for its product- rand or

organi0ation* It is the Xrelative competitive comparisonK their product occupies in a given

mar)et as perceived y the target mar)et*

Product positioning involves creating a uni,ue- consistent- and recogni0ed

customer perception aout a firmKs offering and image* A product or service may e

positioned on the asis of an attitude or enefit- use or application- user- class- price- orlevel of ,uality* It targets a product for specific mar)et segments and product needs at

specific prices*

15. +lain *-t8+l%- Pri,ing. !MA6#$UN8 200;'

Cost4plus pricing is a pricing method used y companies* It is used primarily

ecause it is easy to calculate and re,uires little information* +here are several varieties-

ut the common thread in all of them is that one first calculates the cost of the product-

then includes an additional amount to represent profit* Cost4plus pricing is often used on

government contracts- and has een critici0ed as promoting wasteful e.penditures* +he

method determines the price of a product or service that uses direct costs- indirect costs-


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and fi.ed costs whether related to the production and sale of the product or service or not*

+hese costs are converted to per unit costs for the product and then a predetermined

percentage of these costs is added to provide a profit margin*

1&. Define t)e ,*n,e+t *f re8+*-iti*ning mi !N*4 # De, 2010'

Changing in randKs status in comparison to that of the competing rands*

8epositioning is effected usually through changing the mar)eting mi. in response to

changes in the mar)et place- or due to a failure to reach the rand6s mar)eting ojectives

17.Menti*n t)e +ri,ing -trategie- f*r t)e intr*%,ti*n -tage *f P ! $%ne 2010'

+here are three pricing strategies for new product namely

Pre-tige Pri,ing

4 etting high prices to position a product at the upper or lu.ury end of mar)et

4 Producing a high ,uality and charging the highest price*

4 For e.ample- Mercedes


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Pri,e -kimming is a pricing strategy in which a mar)eter sets a relatively high

price for a product or service at first - a new- innovative- or much4improved product is

launched onto a mar)et* +he ojective with s)imming is to Os)im= off customers who are

willing to pay more to have the product sooner7 prices are lowered later when demand

from the Oearly adopters= falls*

Mention any two asis for classification of pr

Documents

2 and 16 marks marketing Management