1) Define global marketing, industrial marketing, Service Marketing?

The process of conceptualizing and then conveying a final product or service worldwide with the hopes of reaching the international marketing community Proper global marketing has the ability to catapult a company to the next level, if they do it correctly.

Different strategies are implemented based on the region the company is marketing to. For example, the menu at McDonald's varies based on the location of the restaurant. The company focuses on marketing popular items within the country.

GlobalMarketingespeciallyimportantto companies that provide products or services that have a universal demand such as automobiles and food.

Industrial Marketing: Consider the differences between a candy store selling a chocolate bar to a single customer, and a chocolate manufacturer selling thousands of chocolate bars to a single candy store.

While selling candy to an individual customer might rely on salesmanship and knowledge about individual tastes and cravings, selling candy to a store takes more than attractive packaging.

Rather, the manufacturer must ensure a safe, profitable agreement between the two organizations. The manufacturer will market the quality, cost, and customer appeal of its chocolate bars to convince the candy store it will have an easy time selling them.

What is industrial Marketing?Industrial marketing, also known as business-to-business (B2B)

marketing, is a branch of communications and sales that specializes in providing goods and services to other businesses, rather than to individual customers.

Because industrial marketing often involves large orders and long-term relationships between the producer and client, the process from first pitch to close of sale is often more complex than the process between a business and a private customer.While B2C sales might focus on one-on-one interactions between two parties, businesses are usually made up of a number of individuals. Before the product appears on the other store's shelves, the two businesses must reach

a deal that will involve the manufacture, purchase, and shipping of thousands of products.

Who Uses Industrial Marketing?Many companies create and market products that have little to no

application on the level of the individual customer, so their only clients will be other businesses. A company that makes large-scale manufacturing machinery, for example, is either unlikely or unable to sell that machinery to private individuals because those customers are unlikely to be able to afford it or won't need equipment of such size. The machinery would have to be sold to another business that has both the resources and need to produce large quantities of their own product, such as a mass-market toy factory that needs to create one million units of the same toy each year.

Many consumer product companies develop special marketing divisions specifically for B2B clients. Furniture manufacturers often do this, opening up their tables, chairs, and couches to businesses that may want them for their corporate offices.This typically happens when the manufacturer's business grows to a large enough scale to accommodate larger orders. Service providers also occasionally expand to industrial clients to take advantage of more lucrative contracts. A legal practice specializing in contract law, for instance, could expand its scope from representing only individuals to helping businesses develop their own contracts.

The Industrial Marketing Process:The first step in developing an industrial marketing plan is the same as developing any kind of marketing plan: identify the customer. The producer must understand what kinds of businesses would benefit from the product. This creates a foundation and focus for the rest of the marketing plan.

Next, the producer needs to tailor their introduction to prospective clients. Though old-fashioned, face-to-face networking is alive and well in the business-to-business world, it is increasingly important to have a strong online presence. Potential clients will always research a company before negotiating a sale of its product. A website with detailed but not overly specific content about the company and its products serves as a great introduction.

In our previous example of the chocolate bar manufacturer, they might create an aesthetically pleasing, well-written website talking about their company's history and the candy they produce. They would then augment the effectiveness of the website by adding a regularly updated blog about

new products, or post on social networks informing users about the locations where they can buy their chocolate.Once a potential client is interested in the product, the producer should shift focus from the general introduction of its web presence to more personalized meetings and presentations. Even if the client isn't ready to sign a contract right away, getting to know them with professional, non-pushy contact can be of great benefit.Communication with potential clients through email, phone conversations, and in-person presentations helps nurture the business relationship. Professionals at the chocolate manufacturer might send product samples with personalized notes to develop a strong impression ahead of a business meeting.

Once the client is ready to discuss the details of a contract, the marketing phase is nearly over. The focus of all materials for this specific client should shift to maintaining a good working relationship. The chocolate manufacturer should have a solid plan with its accounts managers for how to compose emails and conduct phone conversations with representatives of the candy store, as well as how to inform them about new products. Because the store is no longer a new client, all communications should be customized to their specific experience with the producer.

Service marketing: Services marketing is a form of marketing that focuses on selling services. They can be tricky to sell, and the marketing approach for them is much different than the approach for products. Some companies offer both products and services and must use a mixture of styles; for example, a store that sells computers also tends to also help people select computers and provide computer repair. Such a store must market both its products and the supporting services it offers to appeal to customers.

When people market services, the goal is not to get customers to buy a product but to get people to do business with a particular company, often in a specific location. For example, a restaurant offers a service: it provides food to customers, both on-site and in to-go form in many cases. When the restaurant markets itself, it must convince people that it is preferable to other restaurants and that its facility is worth the trip.

As with the marketing of products, the marketing of services covers issues like what is being offered, what the price point is, how it compares to similar things, and why people should choose that particular iteration over other options. With services, which are often intangible in nature, consumers must also be convinced through marketing that it is something they need that will have some sort of benefit.

2) Briefly describe about importance and scope of marketing, marketing environment?A)Philip Kotler defines marketing as 'satisfying needs and wants through an exchange process ‘Customers will only undertake the exchange, if they feel that their needs are being satisfied, clearly the transactional value cannot be more than the amount customers are prepared to pay to satisfy their need.

P.Tailor suggests that 'Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer.

Scope of Marketing:

The scope of marketing really is related to the old and new concept of ‘marketing’. Formerly the scope of marketing used to remain very much limited since the wants of the consumers too were quite limited. The competition was almost equivalent to nil. In the marketing, the satisfaction of the consumers was not at all considered. The marketing was commodity based and immediately after the sale of the products, the marketing process was over. Nowadays, the scope of marketing has become quite extensive, and the satisfaction of the customers too is kept in view. The process of marketing continues even after the sales have been affected. Today, the function of conforming the product, in accordance with the changing wants, habits and fashions of people, is undertaken by the process of marketing.

Within the scope of marketing, -the following activities are covered:

Decisions and Researches Pertaining to Customers. Now-a-days, the customer is considered to be the crownless ruler of the market: Every producer or manufacturer or business concern intends to know as to what is the interest, fashion, economic position, of the customers; where do they live, what is their paying capacity, etc. Taking decisions on the basis of all these things, the producers bring their products to the customers accordingly and by means of their satisfaction, earn the maximum profits.

Decisions Regarding the Commodity. Before manufacturing the product, various decisions have to be taken up, for instance, the size of the product, its shade or colour, design and brand, packing, etc. These all are equally the main components forming the marketing process.

Decisions Regarding Price-Determination. Every producer or manufacturer and the business organization has also to determine

beforehand, prior to undertaking its marketing, as to what shall be the price of their product ? While deciding the price of the product, the paying capacity of the customer and the cost of production has to be borne in mind.

Decisions Regarding the Medium of Distribution. There are various media of distribution. the multiple or chain shops, the super bazaar, the whole sellers, the retailer, etc. The manufacturer or the business concern has also to determine as to what shall remain the medium of distribution of the commodity and how much long shall be its chain, requiring how much of expenditure. While taking the decision of the means of distribution, various matters have also to be borne into mind.

Decisions Regarding Sales Promotion and Advertisements. In this age of stiff competition, the sales promotion and advertisements have become almost an inseparable part of the marketing. There are various media of sales promotion and advertisements taking the decisions about which is also an indispensable part of the sphere of marketing management. In the sales promotion, various decisions are required to be taken regarding the training of the sales representatives, their emoluments and the relevant incentives, etc.

Decisions Regarding After-Sales Service. For the satisfaction of the customers, the provision of after-sales service is very necessary. Within the after-sales service, are included the free repairs, the return or exchange of the product during the guarantee period if the product proves defective or worthless, etc. In it is included the decision that for how much period, what type of service has to be extended to the customers, and through whom.

Scope of MarketingThe scope of marketing really is related to the old and new concept of

‘marketing’. Formerly the scope of marketing used to remain very much limited since the wants of the consumers too were quite limited. The competition was almost equivalent to nil. In the marketing, the satisfaction of the consumers was not at all considered. The marketing was commodity based and immediately after the sale of the products, the marketing process was over. Nowadays, the scope of marketing has become quite extensive, and the satisfaction of the customers too is kept in view. The process of marketing continues even after the sales have been affected. Today, the function of conforming the product, in accordance with the changing wants, habits and fashions of people, is undertaken by the process of marketing. Within the scope of marketing, -the following activities are covered:

Decisions and Researches Pertaining to Customers. Now-a-days, the customer is considered to be the crownless ruler of the market: Every producer or manufacturer or business concern intends to know as to what is the interest, fashion, economic position, of the customers; where do they live, what is their paying capacity, etc. Taking decisions on the basis of all these things, the producers bring their products to the customers accordingly and by means of their satisfaction, earn the maximum profits.

Decisions Regarding the Commodity. Before manufacturing the product, various decisions have to be taken up, for instance, the size of the product, its shade or colour, design and brand, packing, etc. These all are equally the main components forming the marketing process.

Decisions Regarding Price-Determination. Every producer or manufacturer and the business organization has also to determine beforehand, prior to undertaking its marketing, as to what shall be the price of their product ? While deciding the price of the product, the paying capacity of the customer and the cost of production has to be borne in mind.

Decisions Regarding the Medium of Distribution. There are various media of distribution. The multiple or chain shops, the super bazar, the whole sellers, the retailer, etc. The manufacturer or the business concern has also to determine as to what shall remain the medium of distribution of the commodity and how much long shall be its chain, requiring how much of expenditure. While taking the decision of the means of distribution, various matters have also to be borne into mind.

Decisions Regarding Sales Promotion and Advertisements. In this age of stiff competition, the sales promotion and advertisements have become almost an inseparable part of the marketing. There are various media of sales promotion and advertisements taking the decisions about which is also an indispensable part of the sphere of marketing management. In the sales promotion, various decisions are required to be taken regarding the training of the sales representatives, their emoluments and the relevant incentives, etc.

Decisions Regarding After-Sales Service. For the satisfaction of the customers, the provision of after-sales service is very necessary. Within the after-sales service, are included the free repairs, the return or exchange of the product during the guarantee period if the product proves defective or worthless, etc. In it is included the decision that for how much period, what type of service has to be extended to the customers, and through whom.

3) Explain about factors that determine marketing Environment?

MARKETING ENVIRONMENT:

Introduction::A variety of environmental forces influence a company’s marketing system. Some of them are controllable while some others are uncontrollable. It is the responsibility of the marketing manager to change the company’s policies along with the changing environment.

According to Philip Kotler, “A company’s marketing environment consists of the internal factors & forces, which affect the company’s ability to develop & maintain successful transactions & relationships with the company’s target customers”.

The Environmental Factors may be classified as:

1) Internal factors

1. External Factor

External Factors may be further classified into:

External Micro Factors & External Macro Factors

Company’s Internal Environmental Factors: A Company’s marketing system is influenced by its capabilities regarding production, financial & other factors. Hence, the marketing management/manager must take into

consideration these departments before finalizing marketing decisions. The Research & Development Department, the Personnel Department, the Accounting Department also have an impact on the Marketing Department. It is the responsibility of a manager to company-ordinate all department by setting up unified objectives.

External Micro Factors:

1. Suppliers: They are the people who provide necessary resources needed to produce goods & services. Policies of the suppliers have a significant influence over the marketing manager’s decisions because, it is laborers, etc. A company must build cordial & long-term relationship with suppliers.

2. Marketing Intermediaries: They are the people who assist the flow of products from the producers to the consumers; they include wholesalers, retailers, agents, etc. These people create place & time utility. A company must select an effective chain of middlemen, so as to make the goods reach the market in time. The middlemen give necessary information to the manufacturers about the market. If a company does not satisfy the middlemen, they neglect its products & may push the competitor’s product.

3. Consumers: The main aim of production is to meet the demands of the consumers. Hence, the consumers are the center point of all marketing activities. If they are not taken into consideration, before taking the decisions, the company is bound to fail in achieving its objectives. A company’s marketing strategy is influenced by its target consumer. Eg: If a manufacturer wants to sell to the wholesaler, he may directly sell to them, if he wants to sell to another manufacturer, he may sell through his agent or if he wants to sell to ultimate consumer he may sell through wholesalers or retailers. Hence each type of consumer has a unique feature, which influences a company’s marketing decision.

4. Competitors: A prudent marketing manager has to be in constant touch regarding the information relating to the competitor’s strategies. He has to identify his competitor’s strategies, build his plans to overtake them in the market to attract competitor’s consumers towards his products.Any company faces three types of competition:a) Brand Competition: It is a competition between various companies

producing similar products. Eg: The competition between BPL & Videocon companies.

b) The Product Form Competition: It is a competition between companies manufacturing products, which are substitutes to each other Eg: Competition between coffee & Tea.

c) The Desire Competition: It is the competition with all other companies to attract consumers towards the company. Eg: The competition between the manufacturers of TV sets & all other companies

manufacturing various products like automobiles, washing machines, etc.Hence, to understand the competitive situation, a company must understand the nature of market & the nature of customers. Nature of the market may be as follows:

I. Perfect MarketII. OligopolyIII. MonopolyIV. Monopolistic MarketV. Duopoly

5. Public: A Company’s obligation is not only to meet the requirements of its customers, but also to satisfy the various groups. A public is defined as “any group that has an actual or potential ability to achieve its objectives”. The significance of the influence of the public on the company can be understood by the fact that almost all companies maintain a public relation department. A positive interaction with the public increases its goodwill irrespective of the nature of the public. A company has to maintain cordial relation with all groups, public may or may not be interested in the company, but the company must be interested in the views of the public.Public may be various types. They are:a. Press: This is one of the most important group, which may make or

break a company. It includes journalists, radio, television, etc. Press people are often referred to as unwelcome public. A marketing manager must always strive to get a positive coverage from the press people.

b. Financial Public: These are the institutions, which supply money to the company. Eg: Banks, insurance companies, stock exchange, etc. A company cannot work without the assistance of these institutions. It has to give necessary information to these public whenever demanded to ensure that timely finance is supplied.

c. Government: Politicians often interfere in the business for the welfare of the society & for other reasons. A prudent manager has to maintain good relation with all politicians irrespective of their party affiliations. If any law is to be passed, which is against the interest of the company, he may get their support to stop that law from being passed in the parliament or legislature.

d. General Public: This includes organizations such as consumer councils, environmentalists, etc. as the present day concept of marketing deals with social welfare; a company must satisfy these groups to be successful.

External Macro Environment:These are the factors/forces on which the company has no control. Hence, it has to frame its policies within the limits set by these forces:1. Demography: It is defined as the statistical study of the human

population & its distribution. This is one of the most influencing factors because it deals with the people who form the market. A company should study the population, its distribution, age composition, etc before deciding the marketing strategies. Each group of population behaves differently depending upon various factors such as age, status, etc. if these factors are considered, a company can produce only those products which suits the requirement of the consumers. In this regard, it is said that “to understand the market you must understand its demography”.

2. Economic Environment: A company can successfully sell its products only when people have enough money to spend. The economic environment affects a consumer’s purchasing behavior either by increasing his disposable income or by reducing it. Eg: During the time of inflation, the value of money comes down. Hence, it is difficult for them to purchase more products. Income of the consumer must also be taken into account. Eg: In a market where both husband & wife work, their purchasing power will be more. Hence, companies may sell their products quite easily.

3. Physical Environment or Natural Forces: A company has to adopt its policies within the limits set by nature. A man can improve the nature but cannot find an alternative for it. Nature offers resources, but in a limited manner. A product manager utilizes it efficiently. Companies must find the best combination of production for the sake of efficient utilization of the available resources. Otherwise, they may face acute shortage of resources. Eg: Petroleum products, power, water, etc.

4. Technological Factors: From customer’s point of view, improvement in technology means improvement in the standard of living. In this regard, it is said that “Technologies shape a Person’s Life”.Every new invention builds a new market & a new group of customers. A new technology improves our lifestyle & at the same time creates many problems. Eg: Invention of various consumer comforts like washing machines, mixers, etc have resulted in improving our lifestyle but it has created severe problems like power shortage.Eg: Introduction to automobiles has improved transportation but it has resulted in the problems like air & noise pollution, increased accidents, etc. In simple words, following are the impacts of technological factors on the market:a) They create new wantsb) They create new industriesc) They may destroy old industries

d) They may increase the cost of Research & Development.5. Social & Cultural Factors: Most of us purchase because of the influence

of social & cultural factors. The lifestyle, values, believes, etc are determined among other things by the society in which we live. Each society has its own culture. Culture is a combination of various factors which are transferred from older generations & which are acquired. Our behaviour is guided by our culture, family, educational institutions, languages, etc.The society is a combination of various groups with different cultures & subcultures. Each society has its own behavior. A marketing manager must study the society in which he operates.Consumer’s attitude is also affected by their society within a society, there will be various small groups, each having its own culture.Eg: In India, we have different cultural groups such as Assamese, Punjabis, Kashmir’s, etc. The marketing manager should take note of these differences before finalizing the marketing strategies.

4) Briefly describe a bout mis and markerking research?An MIS may be defined as a set of procedures and methods for the regular, planned collection, analysis, and presentation of information for use in making marketing decisions. This of course is a step beyond logistics systems, which handle inventory control, orders, and so forth.”

4) Describe about product development process?

A) 8 Step Process Perfects New Product Development

When teams collaborate in developing new innovations, having the following eight ingredients mixed into your team’s new product developmental

repertoire will ensure that it’s overall marketability will happen relatively quick, and accurately – making everyone productive across the board.

Step 1: Generating: Utilizing basic internal and external SWOT analyses, as well as current marketing trends, one can distance themselves from the competition by generating ideologies which take affordability, ROI, and widespread distribution costs into account.

Lean, mean and scalable are the key points to keep in mind. During the NPD process, keep the system nimble and use flexible discretion over which activities are executed. You may want to develop multiple versions of your road map scaled to suit different types and risk levels of projects.

Step 2: Screening The Idea : Wichita, possessing more aviation industry than most other states, is seeing many new innovations stop with Step 2 – screening.  Do you go/no go? Set specific criteria for ideas that should be continued or dropped. Stick to the agreed upon criteria so poor projects can be sent back to the idea-hopper early on.

Because product development costs are being cut in areas like Wichita, “prescreening product ideas,” means taking your Top 3 competitors’ new innovations into account, how much market share they’re chomping up, what benefits end consumers could expect etc.  An interesting industry fact: Aviation industrialists will often compare growth with metals markets; therefore, when Boeing is idle, never assume that all airplanes are grounded, per se.

Step 3: Testing: The Concept: As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important to note, it is different from test marketing. Aside from patent research, design due diligence, and other legalities involved with new product development; knowing where the marketing messages will work best is often the biggest part of testing the concept.  Does the consumer understand, need, or want the product or service?

Step 4: Business Analytics: During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new product sales and other figures that provide valuable feedback. It is important for an organization to be in agreement for these criteria and metrics. Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.

Step 5: Beta / Marketability Tests: Arranging private tests groups, launching beta versions, and then forming test panels after the product or products have been tested will provide you with valuable information allowing last minute improvements and tweaks. Not to mention helping to generate a small amount of buzz. Word Press is becoming synonymous with beta testing, and it’s effective; Thousands of programmers contribute code, millions test it, and finally even more download the completed end-product.

Step 6: Technicalities + Product Development: Provided the technical aspects can be perfected without alterations to post-beta products, heading towards a smooth step 7 is imminent. According to Akrani, in this step, “The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide the finance for introducing the new product”.

As an example; In manufacturing, the process before sending technical specs to machinery involves printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the organizational structure, procedures, processes and resources needed to implement quality management.)In internet jargon, honing the technicalities after beta testing involves final database preparations, estimation of server resources, and planning automated logistics. Be sure to have your technicalities in line when moving forward.

Step 7: Commercialize: At this stage, your new product developments have gone mainstream, consumers are purchasing your good or service, and technical support is consistently monitoring progress.  Keeping your distribution pipelines loaded with products is an integral part of this process too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing advertisements during this stage will keep your product’s name firmly supplanted into the minds of those in the contemplation stages of purchase.

Step 8: Post Launch Review and Perfect Pricing: Review the NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing, in which final prices are nailed down after consumers have ‘gotten in’.  In this final stage, you’ll gauge overall value relevant to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new product profits.  You continuously differentiate consumer needs as your products age, forecast profits and improve delivery process whether physical, or digital, products are being perpetuated

5) Explain about marketing Research and marketing information system?

A) Definition of marketing research:"Marketing research is the systematic and objective search for, and analysis of, information relevant to the identification and solution of any problem in the field of marketing."

The purpose of the research: It is not at all unusual for marketing managers to neglect to tell the researcher the precise purpose of the research. They often do not appreciate the need to do so. Instead, they simply state what they think they need to know. This is not quite the same thing. To appreciate the difference consider the case of the marketing research agency which was contacted by the International Coffee Organization (ICO) and asked to carry out a survey of young people in the age group 15-24. They wanted information on the coffee drinking habits of these young people: how much coffee they drank, at what times of day, with meals or between meals, instant or ground coffee, which other beverages they preferred and so on. In response, the research organization developed a set of wide-ranging proposals which included taking a large random sample of young people.

In fact much of the information was interesting rather than important. Important information is that information which directly assists in making decisions and the ICO had not told the research company the purpose of the research. The initial reason for the study had been a suspicion, on the part of the ICO, that an increasing percentage of young people were consuming beverages other than coffee, particularly soft drinks, and simply never developed the coffee drinking habit. Had this been explained to the research company then it is likely that their proposals would have been radically different. To begin with, the sample would have been composed of 15-24 year old non-coffee drinkers rather than a random sample of all 15-24 year olds. Second, the focus would have been non-coffee drinking habits rather than coffee drinking habits. Unless the purpose of the research is stated in unambiguous terms it is difficult for the marketing researcher to translate the decision-makers problem into a research problem and study design.

Clear, concise, attainable, measurable and quantifiable objectives: Suppose that the marketing manager states that he needs to know the potential market for a new product his/her organization has been developing. At first glance this might appear to meet all of the requirements of being clear, concise, attainable, measurable and quantifiable. In practice it would possibly meet only one of these criteria, i.e. it is concise! Here is another case to be considered. A small engineering firm had purchased a prototype tree-lifter from a private research company. This machine was suitable for

lifting semi-mature trees, complete with root-ball intact and transplanting such trees in another location. It was thought to have potential in certain types of tree nurseries and plantations.

The problem with the objective is that the marketing manager needs to know the potential market for the new tree-lifter is that it is not attainable. One could find out how many tree-lifters were currently being sold but this is not the same as the objective set by the marketing manager. The market potential for any new brand is a function of at least 4 things, as shown in Figure 1.1. Figure 1.1 the components of market potential

It was possible to test customer reaction to the concept of the new tree-lifter by showing pictures, line drawings and by supplying product specifications to prospective buyers. However, since the company had not decided their pricing policy an important element could not be tested. In large measure, it was also possible to gauge the likely reaction from competitors. The researchers began by looking at the basis of competition to determine whether it was on price, product quality or unique product features. The researchers were able to look at precedents. They examined the pattern of response on past occasions when one or other of those companies already in the market had launched a new product. An audit of the environment was undertaken too, but the missing component was the company's' own plans for exploiting the market. Since the company had no involvement in the agricultural engineering sector, prior to acquiring the rights to the tree-lifter, they had no agreements with distributors, no idea of which, if any, of the distributors would be prepared to stock their product; they had no salesmen trained in selling into this industry and so on. The product's potential depended very much on such initiatives.

The solution would have been to undertake a study which would have described the market in detail in terms of customers, competitors and the environment. The company could then have put a marketing plan together and conducted a follow-up study to test their propositions out on the marketplace.

The need to set a time horizon for marketing research

Inevitably there are deadlines which the marketing research activity must fit and these must be stated clearly at the outset of the research. As was said earlier, because of time pressures, management is often seeking quick answers from marketing research. If the researcher is aware of the time constraints then this will become an overriding factor when he/she plans the research design. He or she is likely to put forward a design which is less elegant, and gives rise to less precise information but delivers the results on schedule. A resource allocation, including the budget and facilities

There are essentially two approaches to establishing the resource allocation to a particular marketing research exercise. Management can start with the problem and work out how much it will cost to solve it. Alternatively, they can decide how much the management can afford to spend, at the time, and seek the best answer they can for the time, money and manpower allocated. In practice the decision-makers prefer the latter approach and the researchers the former. In the end, some kind of compromise develops. The researcher rarely gets all of what he/she judges is required to reach a satisfactory conclusion but if the research proposal is well thought out and persuasively presented some concessions can be obtained.Whichever the approach to resource allocation adopted, it is imperative that the researcher is aware of the financial and other constraints within which he/she must complete the work.

A reporting period: The researcher must also know from the outset of the study the points in time when interim reports are required, if any, and the deadline for the final report. The form of interim reports should also be specified at the outset, whether verbal or written, and whether presentations are to be made to a group (nature and size of the group) or an individual.

In addition there are several characteristics of a good research brief and these are that it: means the same thing to all concerned does not ask for irrelevant information defines the relevant populations to be measured identifies the correct variables to be measured specifies the degree of accuracy really needed within the main results specifies an order of priorities when the sample has to be broken down for the purposes of analyzing data for subgroups, and does not pre-judge the selection of research techniques and procedures.

The research proposal: Having received the research brief, the researcher responds with a research proposal. This is a document which develops after

having given careful consideration to the contents of the research brief. The research proposal sets out the research design and the procedures to be followed. The eight steps are set out in figure 1.2. These are only briefly discussed here since the remainder of this textbook consists of a detailed explanation of each step.

Figure 1.2 The research design

Step 1: Problem definition

The point has already been made that the decision-maker should clearly communicate the purpose of the research to the marketing researcher but it is often the case that the objectives are not fully explained to the individual carrying out the study. Decision-makers seldom work out their objectives fully or, if they have, they are not willing to fully disclose them. In theory, responsibility for ensuring that the research proceeds along clearly defined lines rests with the decision-maker. In many instances the researcher has to take the initiative.

In situations, in which the researcher senses that the decision-maker is either unwilling or unable to fully articulate the objectives then he/she will have to pursue an indirect line of questioning. One approach is to take the problem statement supplied by the decision-maker and to break this down into key components and/or terms and to explore these with the decision-

maker. For example, the decision-maker could be asked what he has in mind when he uses the term market potential. This is a legitimate question since the researcher is charged with the responsibility to develop a research design which will provide the right kind of information. Another approach is to focus the discussions with the person commissioning the research on the decisions which would be made given alternative findings which the study might come up with. This process frequently proves of great value to the decision-maker in that it helps him think through the objectives and perhaps select the most important of the objectives.

Whilst seeking to clarify the objectives of the research it is usually worthwhile having discussions with other levels of management who have some understanding of the marketing problem and/or the surrounding issues. Other helpful procedures include brainstorming, reviews of research on related problems and researching secondary sources of information as well as studying competitive products. Kerlinger2 suggests that a well-defined marketing research problem tends to have three common characteristics as shown in figure 1.3.

Step 2: Hypothesis generation: Whilst it is true that the purpose of research is to address some question, nonetheless one does not test research questions directly. For example, there may be interest in answering the question: "Does a person's level of education have any bearing upon whether or not he/she adopts new products?" Or, "Does a person's age bear any relation to brand loyalty behavior?". Research questions are too broad to be directly testable. Instead, the question is reduced to one or more hypotheses implied by these questions.

Figure 1.3 Characteristics of a sound definition of the research problem.

A hypothesis is a conjectural statement regarding the relation between two or more variables. There are two key characteristics which all hypotheses must have: they must be statements of the relationship between variables and they must carry clear implications for testing the stated relations. These characteristics imply that it is relationships, rather than variables, which are tested; the hypotheses specify how the variables are related and that these are measurable or potentially measurable. Statements lacking any or all of these characteristics are not research hypotheses. For example, consider the following hypothesis:

"Red meat consumption increases as real disposable incomes increase."

This is a relation stated between one variable, "red meat consumption", and another variable, "disposable incomes". Moreover, both variables are potentially measurable. The criteria have been met. However for the purposes of statistical testing it is more usual to find hypotheses stated in the so-called null form, e.g.

"There is no relationship between red meat consumption and the level of disposable incomes."

Consider a second hypothesis:"There is no relationship between a farmer's educational level and his degree of innovativeness with respect to new farming technologies."

Again there is a clear statement of the relationship being investigated but there are question marks over the measurability with respect to at least one of the variables i.e. "...a farmer's degree of innovativeness." We may also encounter difficulties in agreeing an appropriate measure of the other variable, i.e. "level of education". If these problems can be resolved then we may indeed have a hypothesis.

Hypotheses are central to progress in research. They will direct the researcher's efforts by forcing him/her to concentrate on gathering the facts which will enable the hypotheses to be tested. The point has been made that it is all too easy when conducting research to collect "interesting data" as opposed to "important data". Data and questions which enable researchers to test explicit hypotheses are important. The rest are merely interesting.

There is a second advantage of stating hypotheses, namely that implicit notions or explanations for events become explicit and this often leads to modifications of these explanations, even before data is collected.

On occasion a given hypotheses may be too broad to be tested. However, other testable hypotheses may be deduced from it. A problem really cannot be solved unless it is reduced to hypothesis form, because a problem is a question, usually of a broad nature, and is not directly testable.

Step 3: Decision on type of study: Marketing research can be carried out on one of three levels: exploratory, descriptive or causal.

Exploratory research: The chief purpose of exploratory research is to reach a better understanding of the research problem. This includes helping to identify the variables which should be measured within the study. When there is little understanding of the topic it is impossible to formulate hypotheses without some exploratory studies. For example, crop residues such a straw are high in lignin (a wood-like substance) and low in nutrients. This makes them a poor animal feed since the lignin acts against digestibility and the low nutrient content means poor food value. However, if treated in a strong alkali, plus a little heat, the lignin breaks down and the nutrient content increases. A company was established to exploit this technology and did so successfully for 4 seasons. After this period sales began to slow down. Three other manufacturers had entered the market by this time. The company, Animal Feed Systems, did not know whether the whole industry had slowed down or if only their product was suffering. Nor did they know if the problem was temporary in that perhaps the market comprised of "early

adopters" had been saturated but it was only a matter of time before other farmers began to buy their systems when they saw how well they worked. It was also possible that if a problem did exist it could lie in any one of a number of areas: animal populations might be declining, distributors may not be promoting the product aggressively, and customers may be experiencing difficulties in getting the chemicals, and so on and on.

This is a good example of a situation where insufficient knowledge prevented the development of clear objectives, since the problem could not be articulated with any precision and therefore research of an exploratory nature was required. Such research can take the form of literature searches, informal personal interviews with distributors and users/non-users of the product and/or focus group interviews with farmers and/or distributors.

Exploratory research is intended to help researchers formulate a problem in such a way that it can be researched and suggest testable hypotheses.

Descriptive research: As the name suggests, descriptive research is concerned with describing market characteristics and/or marketing mix characteristics. Typically, a descriptive study specifies the number and size of market segments, the alternative ways in which products are currently distributed, listing and comparison of the attributes and features of competitive products, etc.

This type of study can involve the description of the extent of association between variables. For example, the researcher may observe that there is an association between the geographical location of consumers and their tendency to consume red meat. Note that the researcher is able to describe the relationship rather than explain it. Nonetheless if the relationship between the two is fairly stable this descriptive information may be sufficient for the purposes of prediction. The researcher may, for example, be able to predict how fast the per capita consumption of red meat is likely to rise over a given time period.

The principal difference between exploratory and descriptive research is that, in the case of the latter, specific research questions have been formulated before the research is undertaken. When descriptive research is conducted the researcher must already know a great deal about the research problem, perhaps because of a prior exploratory study, and is in a position to clearly define what he/she wants to measure and how to do it.

Causal research: Causal research deals with the "why" questions. That is, there are occasions when the researcher will want to know why a change in one variable brings about a change in another. If he/she can understand the causes of the effects observed then our ability to predict and control such events is increased.

In summary then there are three distinct types of marketing research study: exploratory, descriptive and causal. The purpose of each is summarized in figure 1.4. In some cases, a research programmer will be of one kind or another, but in other instances these three typologies will represent phases within a single marketing research investigation.

Step 4: Decision on data collection method: The next set of decisions concerns the method(s) of data gathering to be employed. The main methods of data collection are secondary data searches, observation, the survey, experimentation and consumer panels. Each of these topics is dealt with later on, so they are simply noted here.

Step 5: Development of an analysis plan: Those new to marketing research often intuitively believe that decisions about the techniques of analysis to be used can be left until after the data has been collected. Such an approach is ill-advised. Before interviews are conducted the following checklist should be applied: Is it known how each and every question is to be analyzed? (e.g. which univariate or vicariate descriptive statistics, tests of association, parametric or nonparametric hypotheses tests, or multivariate methods are to be used?) Does the researcher have a sufficiently sound grasp of these techniques to apply them with confidence and to explain them to the decision-maker who commissioned the study? Does the researcher have the means to perform these calculations? (e.g. access to a computer which has an analysis program which he/she is familiar with? Or, if the calculations have to be performed manually, is there sufficient time to complete them and then to check them?) If a computer program is to be used at the data analysis stage, have the questions been properly coded? Have the questions been scaled correctly for the chosen statistical technique? (E.g. a t-test cannot be used on data which is only ranked)There is little point in spending time and money on collecting data which subsequently is not or cannot be analyzed. Therefore consideration has to be given to issues such as these before the fieldwork is undertaken.

Step 6: Data collection : At this stage the researcher is ready to go into the field and collect data. The various issues relating to data collection constitute the main body of the text and therefore, are not dwelt upon here.

Step 7: Analysis of data: The word 'analysis' has two component parts, the prefix 'ana' meaning 'above' and the Greek root 'lysis' meaning 'to break up or dissolve'. Thus data analysis can be described as: "...a process of resolving data into its constituent components, to reveal its characteristic elements and structure."Where the data is quantitative there are three determinants of the appropriate statistical tools for the purposes of analysis. These are the number of samples to be compared, whether the samples being compared are independent of one another and the level of data measurement.

Step 8: Drawing conclusions and making recommendations: The final chapter of this textbook is devoted to the topic of report writing. However, it is perhaps worth noting that the end products of marketing research are conclusions and recommendations. With respect to the marketing planning function, marketing research helps to identify potential threats and opportunities, generates alternative courses of action, provides information to enable marketing managers to evaluate those alternatives and advises on the implementation of the alternatives.

Too often marketing research reports chiefly comprise a lengthy series of tables of statistics accompanied by a few brief comments which verbally describe what is already self-evident from the tables. Without interpretation, data remains of potential, as opposed to actual use. When conclusions are drawn from raw data and when recommendations are made then data is converted into information. It is information which management needs to reduce the inherent risks and uncertainties in management decision making.

Customer oriented marketing researchers will have noted from the outset of the research which topics and issues are of particular importance to the person(s) who initiated the research and will weigh the content of their reports accordingly. That is, the researcher should determine what the marketing manager's priorities are with respect to the research study. In particular he/she should distinguish between what the manager: must know should know could know This means that there will be information that is essential in order for the marketing manager to make the particular decision with which he/she is faced (must know), information that would be useful to

have if time and resources within the budget allocation permit (should know) and there will be information that it would be nice to have but is not at all directly related to the decision at hand (could know). In writing a research proposal, experienced researchers would be careful to limit the information which they firmly promise to obtain, in the course of the study, to that which is considered 'must know' information. Moreover, within their final report, experienced researchers will ensure that the greater part of the report focuses upon 'must know' type information.

SECONDARY SOURCES OF INFORMATION: Marketing information must be timely, organized, useful and in a simple form if it is to ease decision making. It should also be easily manipulated to satisfy the changing and ad hoc requirements of management for information. There is more to marketing information than marketing research. Indeed, marketing research is a subsystem of the marketing information system. A Marketing Information System (MIS) is a structure within an organization designed to gather, process and store data from the organization’s external and internal environment and to disseminate this in the form of information to the organization’s marketing decision makers. The activities performed by an MIS and its subsystems include information discovery, collection, interpretation (which may involve validation and filtering), analysis, and intra-company dissemination (storage, transmission, and/or dumping).

Measurement error

When a researcher conducts fieldwork she/he is possibly able to estimate inaccuracies in measurement through the standard deviation and standard error, but these are sometimes not published in secondary sources. The only solution is to try to speak to the individuals involved in the collection of the data to obtain some guidance on the level of accuracy of the data. The problem is sometimes not so much 'error' but differences in levels of accuracy required by decision makers. When the research has to do with large investments in, say, food manufacturing, and management will want to set very tight margins of error in making market demand estimates. In other cases, having a high level of accuracy is not so critical. For instance, if a food manufacturer is merely assessing the prospects for one more flavor for a snack food already produced by the company then there is no need for highly accurate estimates in order to make the investment decision.

Source bias Researchers have to be aware of vested interests when they consult secondary sources. Those responsible for their compilation may have reasons for wishing to present a more optimistic or pessimistic set of results for their organization. It

is not unknown, for example, for officials responsible for estimating food shortages to exaggerate figures before sending aid requests to potential donors. Similarly, and with equal frequency, commercial organizations have been known to inflate estimates of their market shares.

Reliability The reliability of published statistics may vary over time. It is not uncommon, for example, for the systems of collecting data to have changed over time but without any indication of this to the reader of published statistics. Geographical or administrative boundaries may be changed by government, or the basis for stratifying a sample may have altered. Other aspects of research methodology that affect the reliability of secondary data is the sample size, response rate, questionnaire design and modes of analysis.

Time scale Most censuses take place at 10 year intervals, so data from this and other published sources may be out-of-date at the time the researcher wants to make use of the statistics.The time period during which secondary data was first compiled may have a substantial effect upon the nature of the data. For instance, the significant increase in the price obtained for Ugandan coffee in the mid-90's could be interpreted as evidence of the effectiveness of the rehabilitation programmed that set out to restore coffee estates which had fallen into a state of disrepair. However, more knowledgeable coffee market experts would interpret the rise in Ugandan coffee prices in the context of large scale destruction of the Brazilian coffee crop, due to heavy frosts, in 1994, Brazil being the largest coffee producer in the world.

Whenever possible, marketing researchers ought to use multiple sources of secondary data. In this way, these different sources can be cross-checked as confirmation of one another. Where differences occur an explanation for these must be found or the data should be set aside.

Figure 2.1 presents a flowchart depicting the decision path that should be followed when using secondary data. As can be seen, the flowchart divides into two phases. The early stages of the flowchart relate to the relevance of the data to the research objectives. The later stages of the flowchart are concerned with questions about the accuracy of secondary data.

Sources of information Secondary sources of information may be divided into two categories: internal sources and external sources.

Internal sources of secondary: Information Sales data: All organizations collect information in the course of their everyday operations. Orders are received and delivered, costs are recorded, sales personnel submit visit reports, invoices are sent out, and returned goods are recorded and so on. Much of this information is of potential use in marketing research but a surprising amount of it is actually used. Organizations frequently overlook this valuable resource by not beginning their search of secondary sources with an internal audit of sales invoices, orders, inquiries about products not stocked, returns from customers and sales force customer calling sheets. For example, consider how much information can be obtained from sales orders and invoices: Sales by territory, Sales by customer type Prices and discounts Average size of order by customer, customer type, geographical area Average sales by sales person and Sales by pack size and pack type, etc.This type of data is useful for identifying an organization’s most profitable product and customers. It can also serve to track trends within the enterprise's existing customer group.

Financial data: An organization has a great deal of data within its files on the cost of producing, storing, transporting and marketing each of its products and product lines. Such data has many uses in marketing research including allowing measurement of the efficiency of marketing operations. It can also be used to estimate the costs attached to new products under consideration, of particular utilization (in production, storage and transportation) at which an organization’s unit costs begin to fall.

Transport data: Companies that keep good records relating to their transport operations are well placed to establish which are the most profitable routes, and loads, as well as the most cost effective routing patterns. Good data on transport operations enables the enterprise to perform trade-off analysis and thereby establish whether it makes economic sense to own or hire vehicles, or the point at which a balance of the two gives the best financial outcome.

Storage data: The rate of stock turn, stock handling costs, assessing the efficiency of certain marketing operations and the efficiency of the marketing system as a whole. More sophisticated accounting systems assign costs to the cubic space occupied by individual products and the time period over

which the product occupies the space. These systems can be further refined so that the profitability per unit, and rate of sale, are added. In this way, the direct product profitability can be calculated.

External sources of secondary information: The marketing researcher who seriously seeks after useful secondary data is more often surprised by its abundance than by its scarcity. Too often, the researcher has secretly (sometimes subconsciously) concluded from the outset that his/her topic of study is so unique or specialized that a research of secondary sources is futile.

"You should never begin a half-hearted search with the assumption that what is being sought is so unique that no one else has ever bothered to collect it and publish it. On the contrary, assume there are scrolling secondary data that should help providing definition and scope for the primary research effort."

The same authors support their advice by citing the large numbers of organizations that provide marketing information including national and local government agencies, quasi-government agencies, trade associations, universities, research institutes, financial institutions, specialist suppliers of secondary marketing data and professional marketing research enterprises. Dillon et al further advice that searches of printed sources of secondary data begin with referral texts such as directories, indexes, handbooks and guides. These sorts of publications rarely provide the data in which the researcher is interested but serve in helping him/her locate potentially useful data sources.

The main sources of external secondary sources are (1) government (federal, state and local) (2) trade associations (3) commercial services (4) national and international institutions.

Government statistics

These may include all or some of the following: Population censuses Social surveys, family expenditure surveys Import/exportstatisticsProductionstatistics, Agricultural statistics.

Trade associations

Trade associations differ widely in the extent of their data collection and information dissemination activities. However, it is worth checking with them to determine what they do publish. At the very least one would normally expect that they

would produce a trade directory and, perhaps, a yearbook.Commercial services

Published market research reports and other publications are available from a wide range of organizations which charge for their information. Typically, marketing people are interested in media statistics and consumer information which has been obtained from large scale consumer or farmer panels. The commercial organization funds the collection of the data, which is wide ranging in its content, and hopes to make its money from selling this data to interested parties.

National and international institutions

Bank economic reviews, university research reports, journals and articles are all useful sources to contact. International agencies such as World Bank, IMF, IFAD, UNDP, ITC, FAO and ILO produce a plethora of secondary data which can prove extremely useful to the marketing researcher.

Marketing Information System

A marketing information system (MIS) is a management information system designed to support marketing decision making.

Internal Reporting Systems/Internal Records

Firstly, with any business it is greatly important to keep an eye on what is going on inside the business. A lot can be missed if the performance is not

closely monitored and then analyzed. The internal reporting systems enable a company to always be aware of how they are performing as a team and what issues may need addressing.· Marketing research systems: Market research has been one of the fundamental aspects of marketing for many years and its uses are just as valuable in today's world. The marketing research systems allow a company to really find out what their customers/potential customers think of the current trends and their views on certain items, or polices. Marketing research can also delve into a customer's habits in the hope the company can spot a gap in the market or service; they believe they can deliver to the customer, which will benefit their usual routine.

Marketing intelligence systems the marketing intelligence systems are used to deal with the costs of running a marketing department and a business as a whole. It will process all the facts and figures delivering what needs to be spent where and what may be using too much money.

Analyzing Marketing Information /market decision support system: information gathered in internal databases and through marketing intelligence and marketing research usually requires more analysis and managers may need help applying the information to their marketing decisions. This help may include advance statistical analysis to learn more about the relationship between a set of data. Such analysis allows managers to go beyond means and standard deviations in the data and to answer questions about markets, marketing activities and outcomes.

6) Organizational buyer’s behavior process?

A) Organizational buying is very similar to individual buyer behavior with some contextual differences. Organizations buy in furtherance of organizational objectives, such as to manufacture and deliver goods and services to members, customers or the community.

Purchases are ingredients, components or supplies in the conversion process, for administrative or operational use or for rental or resale. Organizations serve a marketplace and are driven by the needs of their customers, whatever form they take. The differences between organizational and individual buying processes are shown in the following table:

Buying Step Business to Business Consumer

Problem recognition Anticipates and plans for purchase on a routine basis

Reacts to needs when they arise

General need description Extensive, objective cost-benefit analysis

Limited analysis of benefits; concern with total cost

Product specification Precise technical description using techniques such as value analysis

Description more in terms of benefits

Information/ Supplier search

Extensive search that extends to the search for supplier

Limited search – geographically and in terms of sources

Proposal solicitation Formal, such as in a tender process if large volumes or values involved

May be verbal

Buying Step Business to Business Consumer

Supplier selection Made after extensive evaluation of objective information

Limited analysis with subjective and anecdotal information influencing the decision

Order-routine specification Routine calculation of re-order points as well as time and place of delivery

Not routine

Post-purchase performance Extensive comparison Little basis for

review made and feedback given, concern with quality management at source

comparison

Many large organizational purchases involve consultative selling, that is where the buyer and vendor work together to define the problem, identify a solution and work together throughout a long process of implementation and support. Because of the relationship issues which occur in a long association, trust, integrity, empathy and engagement become important factors to consider in the buying decision.

Organizational buying is heavily influenced by derived demand, that is, demand for an end product or for a product or service sold by the buyer’s customers. The demand for components by a manufacturer will be dependent on demand coming from their customers, the retailers and wholesalers, who in turn are reacting to demand from their customers, the consumers. Overall consumer demand may in turn be impacted by economic, social, political and technological factors in the environment.

Organizational buying is often referred to as group buying where a number of individuals or groups undertake different roles in the buying process. Often the buying process will involve highly technical issues which will require the input of technical experts. At the same time, major purchases will involve economic considerations such as financing, return on investment, maintenance costs, life cycle consideration and so on. Different groups or individuals may play one or more of the following roles:

Users: these are the people who will directly use or consume or require the product or service in order to undertake their operational duties.

Influencers: these are individuals or groups who help specify the requirements or provide information to help evaluate the alternatives. People who provide technical input are usually in this group.

Buyers: these individuals and groups have the formal authority to select vendors and undertake the actual purchase transaction. They may take a major role in the negotiations on price and conditions of supply.

Deciders: These individuals have formal or informal authority to select the final supplier. May be the same as Buyers in routine purchases.Gatekeepers: These individuals informally or formally control the flow of information or access to other groups involved in the buying process.

This structure is not just limited to organizations; we can see similar patterns in family situations where the user, decision-maker and influencer are

different members of the family. Similar elements may exist in peer groups where different peer group members have influence on the buyer behavior.

A problem with working in a B2B environment for many vendors is the difficulty of establishing the members of the different groups and the level of their formal and informal involvement. A further problem lies in the manner in which the problem or solution specifications are arrived at. If developed too early and with little input from the vendor, they could be excluded if they solved the problem in a way different from that required through the specification. Another problem may exist where one vendor has a special relationship with some of the buying groups and is able to bias the specifications towards their solution.

Buying patterns in habitual purchases and frequent low risk purchases where little evaluation is required follow similar processes as for individuals. These tend to use routine procurement practices with little involvement from the vendors prior to the buy decision.

Complex, large or infrequent and perceived risky decisions are similar to personal buy decisions but as we can see, usually involve many more participants and are usually much more formal in process. Organizational decisions are also capable of being of very large scale and can involve purchases in the many millions of dollars, take many months if not years to transact and can make or break careers and fortunes. Perceived risk can be very high and encompass many actors.

These complex transactions are often in situations where the specification or the problem and/or the solution is problematic. In environments where problems are dynamic and interact with a developing and changing society and economy and where solutions evolve with knowledge and technology, the specifications themselves evolve. Often the buyer needs the active support of the vendor to understand the problem or to understand the state of possible solutions.

Solutions themselves may adapt to the problem definition as it is uncovered. Often it takes the active support of the vendor to uncover the requirements, especially where the vendor has much greater knowledge of the problem environment. Thus, it is not unusual for a deep relationship to develop between buyer and vendor as the project evolves. Trust, integrity, empathy and openness often become key characteristics of the final decision process.

A good portion of organizational buying is controlled or constrained by the economic situation. Components, ingredients and supplies must fit with

the conversion process and with the economic objectives of the final outcome. Some decisions are constrained by mandated decision rules which limit the scope of the decision making power of the actors, especially prevalent in government procurement.

Organizational buying is not entirely predictable or entirely rational. Individuals who specify requirements or provide technical input, those who search for information and others who undertake evaluations will still be influenced by their own past experiences, knowledge and training. If a rigorous process of information search and evaluation is not undertaken or if there is time pressure to make a decision, then not all vendors will be considered or fully evaluated.

In a complex one-off buying situation, an organization proceeds through a series of steps to arrive at the buying process itself. Externally or internally some trigger kicks off the process. At this point, some part of the organization defines the issues and seeks permission to do something about it. Some individual or department is then given responsibility to investigate and recommend action. A budget needs to be assigned and the process of establishing the need and investigating possible solutions commenced. This process can be complex where multiple organizational units are involved and where organizational change is involved.7) Explain about new product development process?A) Every entrepreneur knows that productivity is one of the key ingredients for successful product development. One of the two key processes in Robert's Rules of Innovation is the New Product Development Process. A formalized, NPD process -- also referred to and best practice: the Stage Gate Process -- is a must, from simple to sophisticate.

The New Product Development process is often referred to as The Stage-Gate innovation process, developed by Dr. Robert G. Cooper as a result of comprehensive research on reasons why products succeed and why they fail.

When teams collaborate in developing new innovations, having the following eight ingredients mixed into your team's new product developmental repertoire will ensure that it's overall marketability will happen relatively quick, and accurately -- making everyone productive across the board.

Step 1: GeneratingUtilizing basic internal and external SWOT analyses, as well as current

marketing trends, one can distance themselves from the competition by

generating ideologies which take affordability, ROI and widespread distribution costs into account.

Lean, mean and scalable are the key points to keep in mind. During the NPD process, keep the system nimble and use flexible discretion over which activities are executed. You may want to develop multiple versions of your road map scaled to suit different types and risk levels of projects.

Step 2: Screening the IdeaWichita, possessing more aviation industry than most other states, is

seeing many new innovations stop with Step two screening. Do you go/no go? Set specific criteria for ideas that should be continued or dropped. Stick to the agreed upon criteria so poor projects can be sent back to the idea-hopper early on.

Because product development costs are being cut in areas like Wichita, "prescreening product ideas," means taking your top three competitors' new innovations into account, how much market share they're chomping up, what benefits end consumers could expect etc. An interesting industry fact: Aviation industrialists will often compare growth with metals markets; therefore, when Boeing is idle, never assume that all airplanes are grounded, per se.

Step 3: Testing the Concept:As Gaurav Akrani has said, "Concept testing is done after idea

screening." And it is important to note, it is different from test marketing.

Aside from patent research, design due diligence, and other legalities involved with new product development, knowing where the marketing messages will work best is often the biggest part of testing the concept. Does the consumer understand, need or want the product or service?

Step 4: Business Analytics

During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new product sales and other figures that provide valuable feedback. It is important for an organization to be in agreement for these criteria and metrics.

Even if an idea doesn't turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.

Step 5: Beta/Marketability TestsArranging private tests groups, launching beta versions, and then

forming test panels after the product or products have been tested will provide you with valuable information allowing last minute improvements and tweaks. Not to mention helping to generate a small amount of buzz. Word press is becoming synonymous with beta testing, and it's effective. Thousands of programmers contribute code; millions test it, and finally even more download the completed end-product.

Step 6: Technicalities and Product DevelopmentProvided the technical aspects can be perfected without alterations to post-beta products, heading towards a smooth Step seven is imminent.

According to Akrani, in this step, "The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide the finance for introducing the new product".

As an example, in manufacturing, the process before sending technical specs to machinery involves printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the organizational structure, procedures, processes and resources needed to implement quality management).

In internet jargon, honing the technicalities after beta testing involves final database preparations, estimation of server resources, and planning automated logistics. Be sure to have your technicalities in line when moving forward.

Step 7: CommercializeAt this stage, your new product developments have gone mainstream, consumers are purchasing your good or service, and technical support is consistently monitoring progress. Keeping your distribution pipelines loaded with products is an integral part of this process too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing advertisements during this stage will keep your product's name firmly supplanted into the minds of those in the contemplation stages of purchase.

Step 8: Post Launch Review and Perfect Pricing

Review the NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing, in which final prices are nailed down after consumers have "gotten in." In this final stage, you'll gauge overall value relevant to COGS (cost of goods sold), making sure internal costs aren't overshadowing new product profits. You continuously differentiate consumer needs as your products age, forecast profits and improve delivery process whether physical, or digital, products are being perpetuated

8) Write short note on product line, product mix, product life cycle?A) A product line refers to a number of products that are related and developed by the same manufacturer.

Product lines are not to be confused with product bundling, which combines various items into one type of product. Items within a product line generally share the same basic theme, and with the help of a successful marketing plan these products can be entirely effective.

Frequently, a product line includes different products that are offered to the public at varying price points. This way, a manufacturer or company can ensure that all products within a line will be purchased by all kinds of people. Product line extension refers to any additional products that may be added to a current product line.

Most of the time, product extensions are introduced to the public in order to ward off competitors. By creating products that match other, competitive products, manufacturers are able to keep customers interested in a product that they are familiar with. Since most people purchase brands that they know, these same consumers are more likely to purchase a new product from a brand that they are comfortable with rather than purchase a product from an unknown brand.

PRODUCT MIX: PRODUCT MIX involves planning and developing the right type of product that will satisfy fully the needs of customers. A product has several dimensions. These dimensions are collectively called product mix. Product mix for example may consist of size and weight of the product, volume of output, product quality, product design, product range, brand name, package, product testing, and warranties and after sales services and the like.Definition: Product life cycle (PLC) is the cycle through which every product goes through from introduction to withdrawal or eventual demise.Description: These stages are: 1) Introduction: When the product is brought into the market. In this stage, there's heavy marketing activity, product

promotion and the product is put into limited outlets in a few channels for distribution. Sales take off slowly in this stage. The need is to create awareness, not profits. The second stage is growth. In this stage, sales take off, the market knows of the product; other companies are attracted, profits begin to come in and market shares stabilize. The third stage is maturity, where sales grow at slowing rates and finally stabilize. In this stage, products get differentiated, price wars and sales promotion become common and a few weaker players exit. The fourth stage is decline. Here, sales drop, as consumers may have changed; the product is no longer relevant or useful. Price wars continue, several products are withdrawn and cost control becomes the way out for most products in this stage.Significance of PLC: PLC analysis, if done properly, can alert a company as to the health of the product in relation to the market it serves. PLC also forces a continuous scan of the market and allows the company to take corrective action faster. But the process is rarely easy.8) Define pricing, pricing methods?

A) Pricing is the process of determining what a company will receive in exchange for its product. Pricing factors are manufacturing cost, market place, competition, market condition, brand, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. (The other three aspects are product, promotion, and place.) Price is the only revenue generating element amongst the four Ps, the rest being cost centers. However, the other Ps of marketing will contribute to decreasing price elasticity and so enable price increases to drive greater revenue and profits.Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus pricing is very important in marketing.Cost-plus pricing - Set the price at your production cost, including both cost of goods and fixed costs at your current volume, plus a certain profit margin. For example, your widgets cost $20 in raw materials and production costs, and at current sales volume (or anticipated initial sales volume), your fixed costs come to $30 per unit. Your total cost is $50 per unit. You decide that you want to operate at a 20% markup, so you add $10 (20% x $50) to the cost and come up with a price of $60 per unit. So long as you have your

costs calculated correctly and have accurately predicted your sales volume, you will always be operating at a profit.Target return pricing - Set your price to achieve a target return-on-investment (ROI). For example, let's use the same situation as above, and assume that you have $10,000 invested in the company. Your expected sales volume is 1,000 units in the first year. You want to recoup all your investment in the first year, so you need to make $10,000 profit on 1,000 units, or $10 profit per unit, giving you again a price of $60 per unit.Value-based pricing - Price your product based on the value it creates for the customer. This is usually the most profitable form of pricing, if you can achieve it. The most extreme variation on this is "pay for performance" pricing for services, in which you charge on a variable scale according to the results you achieve.Psychological pricing - Ultimately, you must take into consideration the consumer's perception of your price, figuring things like:Positioning - If you want to be the "low-cost leader", you must be priced lower than your competition. If you want to signal high quality, you should probably be priced higher than most of your competition.Popular price points - There are certain "price points" (specific prices) at which people become much more willing to buy a certain type of product. For example, "under $100" is a popular price point. "Enough under $20 to be under $20 with sales tax" is another popular price point, because it's "one bill" that people commonly carry. Meals under $5 are still a popular price point, as are entree or snack items under $1 (notice how many fast-food places have a $0.99 "value menu"). Dropping your price to a popular price point might mean a lower margin, but more than enough increase in sales to offset it.Fair pricing - Sometimes it simply doesn't matter what the value of the product is, even if you don't have any direct competition. There is simply a limit to what consumers perceive as "fair". If it's obvious that your product only cost $20 to manufacture, even if it delivered $10,000 in value, you'd have a hard time charging two or three thousand dollars for it -- people would just feel like they were being gouged. A little market testing will help you determine the maximum price consumers will perceive as fair.

9) DESCRIBE ABOUT FACTORS AFFECTING PRICE DETEMINATION?A) Internal or controllable pricing factorsUnder the internal organization factors include the objective of the business firm, production and distribution cost, marketing mix, nature of products, firm's expectations and reputation, etc. They are called internal pricing determinants and can be controlled by marketer.

a. Organization's objectivesThe objectives of a marketing organization greatly influence pricing. A manufacturing company, at the introductory stage of its new product, determines low price to bring them to markets. But some other firms may

determine high introductory price of their products to recover their investment or to get expected return from the investment. Whatever the objective of the company may be, it affects price determination.

b. Cost of manufacturing and marketingThe manufacturing and distribution cost greatly as well as directly affects pricing. If the cost for production and distribution is high, it becomes impossible to determine low price.

c. Other marketing mix componentsThe other components of marketing mix i.e. product, place and promotion prepared by a business organization all affect pricing. The nature of products does not only make it possible bust also make it is essential to determine price of the product. Similarly, reputation or goodwill of organization also affect price determination. Likewise promotion cost also affects pricing decision.

2. External or independent pricing factorsThe external factors include customers, channel members, competitors, government, economic condition of country etc. These are independent factors and cannot be controlled by marketer.

a. Consumers and marketConsumers and target markets also affect pricing of products. Those who determine price should pay careful attention to the elements of buying behavior and methods. More attention should be given to the characteristics of target market, condition of the products, consumers' perception, thought and attitudes towards the price and quality of the products etc.

B. Channel MembersPricing is also affected by the members of distribution channel. The necessity and objective of channel members matching with pricing policy of the marketer can make distribution possible. The discount given to wholesalers or retailers is the important component in the profit to middlemen. So, the price determiner should get knowledge about the distributors' attitude towards the price and what price will they sell the products to consumers. Without written agreement, manufacturers cannot provide authority or direct the middlemen to fix final price, but can give suggestions.

c. CompetitionPrice of most of products is determined by considering the competition in market price. The company with having large market share becomes the price leader. When it increases or decreases price of its products, other company also does the same or adopts the same policy. But if there is no

domination or influence of any single company in the market, the marketer analyses and evaluates the prices of all main competitor companies, collects reactions and draws conclusion. In this way, competition among manufacturers affects price determination.

d. GovernmentGovernment policy and decisions also affect pricing. The government of each country has their own policy, decisions, rules and regulations. Price should be determined considering price control policy of government, sale tax, income tax policy etc. Prices of some products are controlled by government direction and the government itself determines prices of some products.

10) Define personal selling and steps in personal selling?A) Personal selling is the most expensive form of advertising and to be effective one should use a step by step process to gain the most benefit. Personal selling can adjust the manner in which facts are communicated and can consider factors such as culture and behavior in the approach. They can ask questions to discover the specific need of the customer and can get feedback and adjust the presentation as it progresses. The personal selling process is a consecutive series of activities conducted by the salesperson, the lead to a prospect taking the desired action of buying a product or service and finish with a follow-up contact to ensure purchase satisfaction.

Step One: Prospecting - the first step in the personal selling processThe process of looking for and checking leads is called prospecting or determining which firms or individuals could become customers. Up to 20% of a firm's customer base can be lost for reasons such as transfer, death, retirement, takeovers, dissatisfaction with the company and competition. A steadily growing list of qualified prospects is important for reaching the sales targets.

Qualifying a prospect: A lead is a name on a list. It only becomes a prospect if it is determined that the person or company can benefit from the service or product offered. A qualified prospect has a need, can benefit from the product and has the authority to make the decision.

Step Two: The Pre-approach: This stage involves the collecting of as much relevant information as possible prior to the sales presentation. The pre-approach investigation is carried out on new customers but also on regular customers. Systematic collection of information requires a decision about applicability, usefulness and how to organise the information for easy access and effective use.Step Three: The Approach-The salesperson should always focus on the benefits for the customer. This is done by using the product's features and advantages. This is known as the FAB technique (Features, Advantages and Benefits).Features: Refers to the physical characteristics such as size, taste etc.

Advantages: Refers to the performance provided by the physical characteristics eg it does not stain.

Step Four: The Sales Presentation-After the prospects interest has been grasped, the sales presentation is delivered. This involves a "persuasive

vocal and visual explanation of a business proposition". It should be done in a relaxed atmosphere to encourage the prospect to share information in order to establish requirements. Some small talk may be necessary to reduce tension but the purpose always remains business.Step Five: The Trial Close-The trial close is a part of the presentation and is an important step in the selling process. Known as a temperature question - technique to establish the attitude of the prospect towards the presentation and the product.

Step Six: Handling Objections-Objections are often indications of interest by the prospect and should not be viewed with misgiving by salespeople. The prospect is in fact requesting additional information to help him to justify a decision to buy. The prospect may not be fully convinced and the issues raised are thus very important. It also assists the salesperson to establish exactly what is on the prospect's mind.Step Seven-Closing the Sale: This is the last part of the presentation. Many salespeople fear the closing of a sale. Closing a sale is only the confirmation of an understanding. Fear will disappear if the salesperson truly believes that the prospect will enjoy benefits after the purchase of the product.

Step Eight: The Follow-up: The sale does not complete the selling process. Follow-up activities are very important and are useful for the establishment of long-term business relationships. It is important to check if the products have been received in good condition, to establish the customer is satisfied etc.

Q) Describe about Marketing Communication?

A) marketing communications are the means by which firms attempt to inform, persuade, and remind consumers - directly or indirectly - about the products and brands that they sell." (Kotler and Kellter).

Personal and non personal communication channels can be used for marketing communications. Within both of them there are many sub channels. The marketing communications mix is now thought of as consisting six major modes or types of communication alternatives.1. Advertising2. Sales promotion3. Events and experiences4. Public relations and publicity5. Direct marketing6. Personal sellingPersonal communication channels

Personal communication is communication between two or more persons with a specific person communication with others. The message

emanates from a specific person. It can be done face to face, or by a person to audience, over telephone, or through post or couriers or through emails or through mobile messages.

The personal communications in the case of marketing can also be categorized as communications from advocate, expert and social contacts. The company salespersons’ communication to customers is communication from advocates of the product.

An independent expert communicating to prospective buyers about the merits of the product is classified as expert communication. A neighbor saying good things about a brand is social channel of communication.Companies take various steps to stimulate personal communications about their products and brands.1. They identify influential individuals and devote extra effort on them.2. Create opinion leaders by supplying possible opinion leaders with the product on attractive terms.3. Use influential or believable people in testimonial advertising.4. Develop word of mouth publicity by requesting satisfied clients to promote their product among their friends.5. Establish online discussion groups and communitiesNONPERSONAL COMMUNICATION CHANNELS

They include media, atmospheres, and events. Media channels include print media (newspaper, magazines, souvenirs, proceedings of conferences), broadcast media (radio, television), display media (billboards, signs, posters) and electronic media (audiotape, videotape, videodisk, CD-ROM).

Atmosphere is what firms create in their office environment. The office interiors and exteriors have a meaning to the potential buyers.Events are occurrences designed to communicate particular messages to target audiences or audiences. Company arranged news conferences, opening ceremonies of various kinds, and sponsorships of various events come under event communications channels.Communication through mass media stimulates personal communication channels.

THE PROMOTIONAL TOOLS

The characteristics of various promotional tools are as follows:AdvertisingAdvertising is a public mode of communication. Because it is communicated simultaneously to large number of people and people know that the same communication is going to many people, they feel their motives for buying are understood by the advertiser.

Advertising messages can be repeated number of times. Buyers also can compare advertisements of various companies selling the same product. The media offers the facility to add color, sound etc. to the message and dramatize the message. But advertising cannot have dialogue with the people. People may not see and pay attention to the advertisement. Advertising is an efficient way to reach geographically dispersed potential buyers at a low cost per exposure.

Advertising has two recent variants. Advertorials are offer editorial content and while it is paid for by the advertiser and it will be difficult for the reader to easily make out that it is an advertisement. Similarly infomercials are TV programs that are meant for promoting the products of the company. They discuss the working of the product, benefits of the products, and user experience etc. and they may beam the message to buy the product and the address to be contacted.Sales promotionSales promotion tools like coupons, contests, premiums, and the like act as communication medium and also promote sales. They gain attention and provide information that may lead the consumer to the product. They include a distinct invitation to the consumer to do the transaction in a short period of time.Public relations and publicityNews stories and feature articles are more authentic and credible than advertisements to readers. The articles act as testimonials. The message gets through to the potential buyers as news and they may not turn away from it as they turn away from the advertisements.

Personal sellingPersonal selling as a communicative channel involves a live, immediate, and interactive relationship between persons. Personal selling leads to relationships. The listener feels obligated to respond to the salesman at least with a polite “thank you.”Direct MarketingThe alternatives are direct mail, Email, and telemarketing. In these cases the message is addressed to a specific person. The message can be customized. Even though mailing folders and email are normally standardized to gain efficiency. The message can be up to date.  In case of telemarketing, message can be altered depending on the response. In the case of other alternatives subsequent communication can be altered depending on the response.11) What are Channels of Distribution, Logistics, and Wholesaling?A) The Importance of Distribution:

Most producers use intermediaries to bring their products to market. They try to develop a distribution channel (marketing channel) to do this. A distribution channel is a set of interdependent organizations that help make a product available for use or consumption by the consumer or business user. Channel intermediaries are firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user.

A company’s channel decisions directly affect every other marketing decision. Place decisions, for example, affect pricing. Marketers that distribute products through mass merchandisers such as Wal-Mart will have different pricing objectives and strategies than will those that sell to specialty stores. Distribution decisions can sometimes give a product a distinct position in the market. The choice of retailers and other intermediaries is strongly tied to the product itself. Manufacturers select mass merchandisers to sell mid-price-range products while they distribute top-of-the-line products through high-end department and specialty stores. The firm’s sales force and communications decisions depend on how much persuasion, training, motivation, and support its channel partners need. Whether a company develops or acquires certain new products may depend on how well those products fit the capabilities of its channel members.

Some companies pay too little attention to their distribution channels. Others, such as FedEx, Dell Computer, and Charles Schwab have used imaginative distribution systems to gain a competitive advantage.

Functions of Distribution Channels

Distribution channels perform a number of functions that make possible the flow of goods from the producer to the customer. These functions must be handled by someone in the channel. Though the type of organization that performs the different functions can vary from channel to channel, the functions themselves cannot be eliminated. Channels provide time, place, and ownership utility. They make products available when, where, and in the sizes and quantities that customers want. Distribution channels provide a number of logistics or physical distribution functions that increase the efficiency of the flow of goods from producer to customer. Distribution channels create efficiencies by reducing the number of transactions necessary for goods to flow from many different manufacturers to large numbers of customers. This occurs in two ways. The first is called breaking bulk. Wholesalers and retailers purchase large quantities of goods from manufacturers but sell only one or a few at a time to many different customers. Second, channel intermediaries reduce the number of transactions by creating assortments—providing a variety of products in one location—so that customers can conveniently buy many different items from one seller at one time. Channels are efficient. The transportation and storage of goods is another type of physical distribution function. Retailers and other channel members move the goods from the production site to other locations where they are held until they are wanted by customers. Channel intermediaries also perform a number of facilitating functions, functions that make the purchase process easier for customers and manufacturers. Intermediaries often provide customer services such as offering credit to buyers and accepting customer returns. Customer services are oftentimes more important in B2B markets in which customers purchase larger quantities of higher-priced products.

Some wholesalers and retailers assist the manufacturer by providing repair and maintenance service for products they handle. Channel members also perform a risk-taking function. If a retailer buys a product from a manufacturer and it doesn’t sell, it is “stuck” with the item and will lose money. Last, channel members perform a variety of communication and transaction functions. Wholesalers buy products to make them available for retailers and sell products to other channel members. Retailers handle transactions with final consumers. Channel members can provide two-way communication for manufacturers. They may supply the sales force, advertising, and other marketing communications necessary to inform consumers and persuade them to buy. And the channel members can be invaluable sources of information on consumer complaints, changing tastes, and new competitors in the market.

The Internet in the Distribution ChannelBy using the Internet, even small firms with limited resources can

enjoy some of the same competitive advantages as their largest competitors in making their products available to customers internationally at low cost. E-

commerce can result in radical changes in distribution strategies. Today most goods are mass-produced, and in most cases end users do not obtain products directly from manufacturers. With the Internet, however, the need for intermediaries and much of what has been assumed about the need and benefits of channels will change. In the future, channel intermediaries that physically handle the product may become largely obsolete. Many traditional intermediaries are already being eliminated as companies question the value added by layers in the distribution channel. This removal of intermediaries is termed disintermediation, the elimination of some layers of the distribution channel in order to cut costs and improve the efficiency of the channel.

Manufacturer-owned intermediaries are set up by manufacturers in order to have separate business units that perform all of the functions of independent intermediaries, while at the same time maintaining complete control over the channel. Manufacturer-owned intermediaries include sales branches, sales offices, and manufacturers’ showrooms. Sales branches carry inventory and provide sales and service to customers in a specific geographic area. Sales offices do not carry inventory but provide selling functions for the manufacturer in a specific geographic area. Because they allow members of the sales force to be located close to customers, they reduce selling costs and provide better customer service.

 Manufacturers’ showrooms permanently display products for customers to visit.

They are often located in or near large merchandise marts, such as the furniture market in High Point, North Carolina.

Types of Distribution Channels: The first step in selecting a marketing channel is determining which

type of channel will best meet both the seller’s objectives and the distribution needs of customers.

Channel Length: Distribution channels can be described as being either short or long. A short channel involves few intermediaries. A long channel, on the other hand, involves many intermediaries working in succession to move goods from producers to consumers. In general, business products tend to move through shorter channels than consumer products due to geographical concentrations and comparatively few business purchases. Service firms market primarily through short channels because they sell intangible products and need to maintain personal relationships within their channels. Not-for-profit institutions also tend to work with short, simple, and direct channels. Please note Table 15.1 below that highlights the characteristics of short and long marketing channels.

Consumer Channels: The simplest and shortest distribution channel is a direct channel. A direct channel carries goods directly from a producer to the

business purchaser or consumer. One of the newest means of selling in a direct channel is the Internet. A direct channel may allow the producer to serve its customers better and at a lower price than is possible using a retailer. Sometimes a direct channel is the only way to sell the product because using channel intermediaries may increase the price above what consumers are willing to pay. Another reason to use a direct channel is control.

Many producers, however, choose to use indirect channels to reach consumers. Customers are familiar with certain retailers or other intermediaries and habitually turn to them when looking for what they need. Intermediaries also help producers fulfill the channel functions previously cited. By creating utility and transaction efficiencies, channel members make producers’ lives easier and enhance their ability to reach customers.

The producer-retailer-consumer channel is the shortest indirect channel. GE uses this channel when it sells small appliances through large retailers such as Wal-Mart or Sears. The producer-wholesaler-retailer-consumer channel is another common distribution channel in consumer marketing.

Business-to-Business Channels:B2B distribution channels facilitate the flow of goods from a producer to an organizational customer. Generally, B2B channels parallel consumer channels in that they may be direct or indirect. The simplest indirect channel in industrial markets occurs when the single intermediary—a merchant wholesaler referred to as an industrial distributor rather than a retailer—buys products from a manufacturer and sells them to business customers. Direct channels are more common to business-to-business markets because B2B marketing often means selling high-dollar, high-profit items to a market made up of only a few customers. In such markets, it pays for a company to develop its own sales force and sell directly to customers at a lower cost than if it used intermediaries.

Channels for Services: Because services are intangible, there is no need to worry about storage, transportation, and the other functions of physical distribution. In most cases, the service travels directly from the producer to the customer. Some services, however, do need an intermediary, often called an agent, who helps the parties complete the transaction. Examples include insurance agents, stockbrokers, and travel agents.

Note the alternative distribution channels for consumer goods, business goods, and

Services illustrated in Figure

Horizontal Marketing SystemsA horizontal marketing system is a channel arrangement in which two

or more companies at one level join together to follow a new marketing opportunity. By working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could alone. Companies can join forces with competitors or noncompetitors. McDonald’s places “express” versions of its restaurants in Wal-Mart stores. McDonald’s benefits from Wal-Mart’s considerable store traffic, while Wal-Mart keeps hungry shoppers from having to go elsewhere to eat.

Multichannel Distribution Systems.A multichannel distribution system is a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments. This is also called a hybrid marketing channel. Multichannel distribution systems offer many advantages to companies facing large and complex markets. With each new channel, the company expands its sales and market coverage and gains opportunities to tailor its products to the specific needs of diverse customers. Multichannel distribution systems, however, are harder to control, and they generate conflict as more channels compete for customers and sales.

Channel Strategy:

Marketers face several strategic decisions in choosing channels and marketing intermediaries for their products. Selecting a specific channel is the most basic of these decisions. Marketers must also resolve questions about the level of distribution intensity, the desirability of vertical marketing systems, and the performance of current intermediaries.Marketing Channel SelectionMarketing channel selection can be facilitated by analyzing market, product, producer, and competitive factors. A marketer could refer to Table 15.1 above for insights into whether the distribution channel should be short or long for the product in question. Then, he or she could refer to Figure 15.2 above and consider the alternative long or short channels for consumer goods, business goods, or services.Distribution IntensityDistribution intensity refers to the number of intermediaries through which a manufacturer distributes its goods. The decision about distribution intensity should ensure adequate market coverage for a product. In general, distribution intensity varies along a continuum with three general categories: intensive distribution, selective distribution, and exclusive distribution.Intensive Distribution: An intensive distribution strategy seeks to distribute a product through all available channels in an area. Usually, an intensive distribution strategy suits items with wide appeal across broad groups of consumers, such as convenience goods.Selective distribution: is distribution of a product through only a limited number of channels. This arrangement helps to control price cutting. By limiting the number of retailers, marketers can reduce total marketing costs while establishing strong working relationships within the channel. Moreover, selected retailers often agree to comply with the company’s rules for advertising, pricing, and displaying its products. Where service is important, the manufacturer usually provides training and assistance to dealers it chooses. Cooperative advertising can also be utilized for mutual benefit. Selective distribution strategies are suitable for shopping products such as clothing, furniture, household appliances, computers, and electronic equipment for which consumers are willing to spend time visiting different retail outlets to compare product alternatives. Producers can choose only those wholesalers and retailers that have a good credit rating, provide good market coverage, serve customers well, and cooperate effectively. Wholesalers and retailers like selective distribution because it results in higher sales and profits than are possible with intensive distribution where sellers have to compete on price.

Exclusive distribution : distribution of a product through one wholesaler or retailer in a specific geographical area. The automobile industry provides a good example of exclusive distribution. Though marketers may sacrifice some market coverage with exclusive distribution, they often develop and maintain an image of quality and prestige for the product. In addition,

exclusive distribution limits marketing costs since the firm deals with a smaller number of accounts. In exclusive distribution, producers and retailers cooperate closely in decisions concerning advertising and promotion, inventory carried by the retailers, and prices. Exclusive distribution is typically used with products that are high priced, that have considerable service requirements, and when there are a limited number of buyers in any single geographic area. Exclusive distribution allows wholesalers and retailers to recoup the costs associated with long selling processes for each customer and, in some cases, extensive after-sale service. Specialty goods are usually good candidates for this kind of distribution intensity.

Channel Conflict: The channel captain or leader, the dominant and controlling member of a distribution channel, must work to resolve conflicts between channel members. Conflicts can be horizontal and vertical.

Horizontal & Vertical Conflict

Horizontal conflict occurs among firms at the same level of the channel (i.e. between two retailers). Vertical conflict is conflict between different levels of the same channel (i.e. between a wholesaler and a retailer). Some conflict in the channel takes the form of healthy competition. Severe or prolonged conflict, however, can disrupt channel effectiveness and cause lasting harm to channel relationships.

Vertical Marketing SystemsA vertical marketing system (VMS) is a distribution channel structure in

which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate. A conventional distribution channel consists of one or more independent producers, wholesalers, and retailers. A vertical marketing system, on the other hand, provides a way to resolve the channel conflict that can occur in a conventional distribution channel where channel members are separate businesses seeking to maximize their own profits—even at the expense sometimes of the system as a whole. The VMS can be dominated by the producer, wholesaler, or retailer. There are three major types of vertical marketing systems: corporate, contractual, and administered.

A corporate VMS is a vertical marketing system that combines successive stages of production and distribution under single ownership—channel leadership is established through common ownership. A little-known Italian eyewear maker, Luxottica, sells its many famous eyewear brands—including Giorgio, Armani, Yves Saint Laurent, and Ray-Ban—through the world’s largest optical chain, Lens Crafters, which it also owns.

A contractual VMS is a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone. Coordination and conflict management are attained through contractual agreements among channel members. The franchise organization is the most common type of contractual relationship.

There are three types of franchises: manufacturer-sponsored retailer franchise system (Ford Motor Co.), manufacturer-sponsored wholesaler franchise system (Coca-Cola bottlers), and service-firm-sponsored retailer franchise system (McDonald’s). The fact that most consumers cannot tell the difference between contractual and corporate VMSs shows how successfully the contractual organizations compete with corporate chains.An administered VMS is a vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties. Manufacturers of a top brand can obtain strong trade cooperation and support from resellers (P&G). Large retailers such as Wal-Mart can exert strong influence on the manufacturers that supply the products they sell.Logistics: Logistics is the process of designing, managing, and improving the movement of products through the supply chain. The supply chain is all the firms that engage in activities necessary to turn raw materials into a product and put it in the hands of the consumer or business customer. The difference between a supply chain and a distribution channel is the number of members and their function. A supply chain consists of those firms that supply the raw materials, component parts, and supplies necessary for a firm to produce a product plus the firms that facilitate the movement of that product from the producer to the ultimate users of the product—the channel members.

Physical Distribution:Logistics has the objective of delivering exactly what the customer wants—at the right time, in the right place, and at the right price. In planning for the delivery of goods to customers, marketers have usually looked at a process termed physical distribution, which refers to the activities used to move finished goods from manufacturers to final customers. Physical distribution activities include order processing, warehousing, materials handling, transportation, and inventory control. This process impacts how marketers physically get products where they need to be, when they need to be there, and at the lowest possible cost.

In logistics, the focus is on the customer. When planning for the logistics function, firms consider the needs of the customer first. The customer’s goals become the logistics provider’s goals. With most logistics decisions, firms must compromise between low costs and high customer service.

12) Marketing ambush, marketing gurella, green marketing?A)Abush Marketing:marketing technique inwhich advertisers work toconnect their product with a particular event in the minds of potential customers, without having to pay sponsorship expenses for the event. An example of ambush marketing might involve selling music merchandise just outside the grounds of a concert without the consent or awareness of the concert promoters, relying on association with the concern to drive sales.

GURELLA Marketing: A marketing tactic in which a company uses surprise and/or unconventional interactions in order to promote a product or service. Guerrilla marketing is different than traditional marketing in that it often relies on personal interaction and has a smaller budget, and it focuses on smaller groups of promoters that are responsible for getting the word out in a particular location rather than on wide-spread media campaigns.

GREEN MARKETING: Marketing products and services based on environmental factors or awareness. Companies involved in green marketing make decisions relating to the entire process of the company's products, such as methods of processing, packaging and distribution.