Mustahid Ali

MBA3, Roll NO: 1334

Assignment- Marketing 15 Question

1) Marketing – What is Marketing? Examples. Difference between Marketing and

Selling. Why is Marketing the most important function in an organization? What are 4

Ps of Marketing Mix and 7ps of Service Marketing Mix? What is the difference

between Marketing a Good (tangible product) and Marketing a Service?

Marketing is identifying need of customers and serving these needs creating value for

them. Good marketing is no accident, but a result of careful planning and execution

using state-of-the-art tools and techniques. Thus we see marketing management as the

art and science of choosing target markets and getting, keeping and growing customers

through creating, delivering, and communicating superior customer value.Good

example for this is The .Obama for America. presidential campaign which combined a

charismatic politician, a powerful message of hope, and a thoroughly integrated modern

marketing program.

“Marketing is the social process by which individuals and groups obtain what they need

and want through creating and exchanging products and value with others.” — Philip

Kotler

Examples:

BMW launched a series of eight high-cost, high-production short films released on

BMW's website. Within the first four months of release, the films attracted over 11

million views and sent BMW sells up 12% in 2001 alone.

Difference between selling and Marketing

Marketing:

identifies appropriate prospects

effectively communicates image and capabilities of the firm

creates awareness of, and emphasizes an appeal—a differentiation

factor—about the firm

perfects customer service

requests feedback from clients on a regular basis

anticipates and meets needs Marketing often necessitates cultural

changes at every level in the firm

Ultimately, marketing strives to make all interactions with your firm (aka “moments of

truth”) into positive experiences.

Selling is:

proactive seeking of prospects

interacting to qualify prospects

effective acknowledgment of the prospect’s concerns

closing the sale—getting hired

following up and staying in contact when not hired

Successful sellers use active listening skills and demonstrate the ability to meet the

prospect’s needs by conveying competence and confidence. Sellers rely on public

perception of expertise and/or excellence—a product of marketing; therefore, they feel

obligated to meet these expectations and to follow through impeccably.

As with marketers, successful sellers also create positive moments of truth, even if the

firm is not hired, by representing the firm well.

Marketing and sales overlap slightly, and depend on each other, but they are distinctly

different.

Importance of Marketing in an organization

a. Marketing Promotes your company - builds awareness that you exist

b. Describes your products/services - let’s people know what you do

c. Announces new products/services

d. Differentiates your offerings from competitors

e. Brings qualified prospects to you

f. Helps build professional networks

g. Marketing = Corporate strategy: aligning company goals with customer

needs

h. Keeps staff in the loop & motivated to work for your company

i. Keeps you up to date on industry trends

j. Let’s you know which offerings are most in line with customer objectives

4 Ps of Marketing Mix

a. Product

b. Price

c. Place

d. Promotion

7ps of Service Marketing Mix

a. Product

b. Place

c. Price

d. Promotion

e. People

f. Process

g. Physical Evidence

Difference between Marketing a Good (tangible product) and Marketing a Service

Marketing involves convincing the customers to buy the product or service of a

company by the sales people. Both product and service sales involves the same thing

that is convincing the customer to consume the product or service. However there are

some differences between the two, given below is the list of differences between the

two –

1. While product marketing involves marketing for tangible goods, tangible

goods are those goods which can be seen. While service marketing in intangible

because it involves services and services cannot be seen and that is why they are

intangible.

2. While product marketing is same for all the persons, but

services marketing differs from person to person.

3. Examples of product sales can be sales for goods such as soap, electronic

items, industrial products etc….., while examples of service sales are insurance

selling, banks relationship marketing etc…..

4. It can be done in bulk while service marketing cannot be done in bulk

rather it is done on individualistic basis.

5. Product sales does not require maintaining the continuous relations with

customers rather it requires great effort at the time of selling while service sales

requires maintaining continuous relations

6. with the customers, because services are to be provided continuously

which is not the case with products

7.

Example of Service Marketing

For example, service is being provided by a restaurant. The restaurant provides food and

ambience to its customers. When the restaurant is marketing itself it will try to convince

its potential customers that this restaurant is more preferable in comparison to others

because of its quality and atmosphere and that the trip to this particular restaurant is

worthwhile.

Example of Product Marketing

For example, a company is selling a non-alcoholic drink can market its product by

sample. They can offer customers with a sample of their product and if they like it they

can but it from the departmental store or vending machines etc.

Q2. What is positioning? What is a Positioning Map? What is an FCB Grid? What are

Points of Parity (POP) and Points of Differences? What is Branding?

Positioning is creating an identity and an image of your product or service in the minds

of your Target Customer. Basically positioning of a product or service means how that

particular product/service is perceived by its Target Customers. Companies take a lot of

effort in positioning their offering. A good positioning strategy would be the best thing

that can happen to a brand.

Positioning Map

A Map that clearly defines where your offering is positioned in comparison to that of

your competitors. Positioning map can help a company classify existing market products

in different position categories. This insight can be used by the company in several ways.

For example, it identifies the product which is the closest competitors of the company's

product and the strength and weaknesses of the company's product in respect of its

competing products. It can also help company to identify market segments with specific

product requirements where new products may be launched by the company. Example:

Let’s draw a Positioning Map for Indian Coffee Shops.

Branding

The American Marketing Association (AMA) defines a brand as a "name, term, sign,

symbol or design, or a combination of them intended to identify the goods and services

of one seller or group of sellers and to differentiate them from those of other sellers.

Therefore it makes sense to understand that branding is not about getting your target

market to choose you over the competition, but it is about getting your prospects to see

you as the only one that provides a solution to their problem.

The objectives that a good brand will achieve include:

Delivers the message clearly

Confirms your credibility

Connects your target prospects emotionally

Motivates the buyer

Concretes User Loyalty

To succeed in branding you must understand the needs and wants of your customers

and prospects. You do this by integrating your brand strategies through your company

at every point of public contact.

Your brand resides within the hearts and minds of customers, clients, and prospects. It is

the sum total of their experiences and perceptions, some of which you can influence,

and some that you cannot.

A strong brand is invaluable as the battle for customers intensifies day by day. It's

important to spend time investing in researching, defining, and building your brand.

After all your brand is the source of a promise to your consumer. It's a foundational

piece in your marketing communication and one you do not want to be without.

FCB Grid

“FCB grid,” is suggested by Dave Berger and Richard Vaughn. This model combines high

and low involvement, and left and right brain specialization. It shows a visually coherent

matrix which has four quadrants with two factors—high and low involvement, and

feeling and thinking.

The communication response would certainly be different for high versus low

involvement products and those which required mainly thinking (left brain) and feeling

(right brain) information processing. To define involvement and think / feel, eight scales

are used:

High Involvement:

Very important decision

Lot to lose if you choose the wrong brand

Decision requires lot

Low involvement :

Unimportant decision.

Little to lose if you choose the wrong brand.

Decision requires little thought

Think or rational approach

Decision is / is not mainly logical or objective

Decision is / is not based mainly on functional facts

Feel or emotional approach

Decision is / is not based on a lot of feeling

Decision does / does not express one’s personality

Decision is / is not based on looks, tastes, touch, smell, or sound (sensory effects)

Points-of-difference (PODs)

Attributes or benefits consumers strongly associate with a brand, positively evaluate

and believe they could not find to the same extent with a competing brand i.e. points

where you are claiming superiority or exclusiveness over other products in the category.

Points-of-parity (POPs)

Associations that are not necessarily unique to the brand but may be shared by other

brands i.e. where you can at least match the competitors claimed bets. While POPs may

usually not be the reason to choose a brand, their absence can certainly be a reason to

drop a brand.

Q3. What is segmentation? What is target marketing? What is a target group (TG)?

Difference between Target market, target group and target audience?

What is segmentation?

Segmentation is the process of splitting (segmenting) the entire market (everyone) into

smaller groups that share similar traits. Segmentation variables are what you use to

segment the market, and the most common of these is demographics. Demographics

are variables like age, gender, income etc… There are other segmentation variables too:

geographic, psychographic and behavioral.

What is target marketing?

Target marketing is the breaking of a market into segments and focusing the marketing

efforts on one or a few important segments. It involves reaching out to consumers or

new customers aiming to sell your products and services to them.

Difference between Target market, target group and target audience?

A target market is a specific, well-defined segment of consumers that a company plans

to target with its products, services and marketing activities. Target marketing orients all

of the various components of the marketing function toward a single group, maximizing

the appeal of brands to specific markets.

The term "target audience" is a bit narrower; it refers specifically to the group of

consumers targeted by advertisements. Outside of the context of business, target

audience can also refer to the specific group of people targeted by television shows,

movies and music products. An advertisement's target audience can be the same as the

brand's target market, but a target audience can be well defined. For example, a

company's target market might be small girls for “Barbie dolls”, but the target audience

is the people who watch the ads of Barbie dolls.

A target group is any group that is targeted. (The term is widely used in marketing. For

some products the target group is teens, for others it is suburban families, and for some

it is the elderly).

Q4. What is a Product Strategy? Explain the Total Product Concept with Examples?

What are Product Mix and Product Line?

Product Strategy is an action plan for meeting the objectives of an operating strategy via the products sold to the marketplace. Product Propositions are ideas on how the strategy will be realized through products sold within specific target markets. Product Strategy / Proposition Management is therefore the ability to capture and manage the detail of a company’s strategy and resulting propositions, that then drive what products they will develop, deliver and sell. This capability allows the management of this information at the enterprise level, across the different operating groups and market units within which the enterprise operates. Finally, it provides the ability to link the product propositions to the actual sellable products in order to track how the product strategy is actually be delivered into the marketplace.

The ability to hold this information enables downstream performance reporting to validate or negate a company’s product strategy and underlying propositions.

Example

A business looking to introduce some product into the stream of commerce must plan and design a product strategy carefully. Two major product strategies include price-based product strategy and product differentiation. When developing a strategy, strive to answer the following questions: who the product is aimed at; what benefit the product brings; what your position is in the marketplace; and what advantage the strategy will have over those of your competitors.

The generic or core product must deliver the essential benefits and address the basic need – a car must get you from A to B, however a bicycle or a train can get do this also. So the expected or actual product is the car or the product form. So receive the essential benefit of a refreshing drink you would expect to receive a product in a bottle, carton or a glass.

Within these to elements of the product you can already see that there is scope for getting it wrong – so the first step is to make sure that your product delivers the essential benefit – it meets the need of the customer and that the form is acceptable and ensures that the product can be delivered to the customer in an appropriate form.

Total product concept = But it is the total product that incorporates everything that the customer receives – including the service and intangible associations such as celebrity endorsement and the brand values. So from the example above the Mini and the BMW 3 series offer individual transport over a very similar kind – but the two brands have very different associations for their given markets – and of course they are actually both owned by BMW.

But of course the total product can also have more practical elements such as service, warranty and possibly some form of finance. These might be part of the manufacturers offering or additional elements provided by the retailer or other market intermediaries.

Total Product Concept It has five product levels.

Core product- The service or the benefit the customer is really buying. For a Hotel it is

Rest and Sleep.

Basic Product- The Marketer must turn the core benefit into the basic product. For a

Hotel it is bed, bathroom, towels, et al.

Expected Product- A set of attributes and conditions a buyer normally expects when

buying a product. For a Hotel it is a clean bed, fresh towels, et al.

Augmented Product- The offerings that exceed customer expectations! For a Hotel it

would be roof top Restaurant.

Potential Product- Possible augmentations or transformations the product or offering

might undergo in the future. For a Hotel it might be a helipad, a tourist museum, et al.

Product Mix and Product Line

A Product Mix is the set of all products and items a particular seller offers for sale. A

product mix consists of various product lines.

Product Line is a group of products within a product class that are closely related

because they perform a similar function, are sold to the same customer groups, are

marketed through the same outlets, or channels, or fall within the same price ranges. It

may consist of several brands or single family

brand.

A company’s product mix has certain width, length, depth and consistency.

The width of Product mix refers to how many different product lines the company

carries.

The length of the Product mix refers to the total number of items in the mix.

The depth refers to how many variants are offered of each product in the line.

The consistency refers to how closely related the various product lines are in end use,

production requirements, distribution channels, or in some other way.

5) What are different types of Pricing Strategies?

Pricing is one of the four elements of the marketing mix, along with product, place and promotion. Pricing strategy is important for companies who wish to achieve success by finding the price point where they can maximize sales and profits. Companies may use a variety of pricing strategies, depending on their own unique marketing goals and objectives.

Pricing Strategies

PENETRATION PRICING

Price set to ‘penetrate the market’

Low price to secure high volumes

Price set to ‘penetrate the market’

Low price to secure high volumes

Typical in mass market products -chocolate bars,food stuffs, mobile phones, etc.

May be useful if launching into a new market

MARKET SKIMMING

Skim the profit from the market Suitable for products that have short life cycles or

which will face competition at some point in the future (e.g. after a patent runs out)

Examples include: Playstation, jewellery, digitaltechnology.

VALUE PRICING

Prices set according to perceived value of theproduct/service and 'willingness to pay'

Examples include status products/exclusiveproducts

LOSS LEADER

Goods/services deliberately sold below cost toencourage sales elsewhere

Purchases of other items more than covers ‘loss’on item sold

Typical in supermarkets

PSYCHOLOGICAL PRICING

Classic example - Rs. 999 instead of Rs. 1099

Used to play on consumer perceptions

GOING RATE (PRICE LEADERSHIP)

Leading the way in determining prices

Common in oligopolies

TENDER PRICING

Firm (or firms) submit their price for carrying outthe work

Purchaser then chooses which gives best value

PREDATORY PRICING

Deliberate price cutting or offer of ‘free gifts/products’ to force rivals (normally smaller

and weaker) out of business or prevent newentrants

ABSORPTION/FULL COST PRICING

FULL COST PRICING

attempting to set price tocover both fixed and variable costs

Absorption Cost Pricing - Price set to ‘absorb’some of the fixed costs of production

MARGINAL COST PRICING

Setting the price of a product to equal the extracost of producing an extra unit of output

Mostly used during periods of poor sales

Particularly relevant in transport where fixedcosts may be relatively high

CONTRIBUTION PRICING

Contribution = Selling Price - Variable (direct costs)

Prices set to ensure coverage of variable costsand a ‘contribution’ to the fixed costs

TARGET PRICING

atdifferent prices

COST-PLUS PRICING

Selling Price = cost of production + profit % variable and markup

INFLUENCE OF ELASTICITY

Degree of price elasticity impacts on the level ofsales and hence revenues % Change in

Quantity Demanded % Change in Price

PREMIUM PRICING

It means establishing a price higher than the competitor. It is a strategy that can be

effectively used when there is something unique about the product. This strategy aiming at

increasing revenue during early stages of production.

ECONOMY PRICING

They take a very basic, low cost approach to marketing and attract a segment which is very

price sensitive. Example can be Wal-Mart, Big Bazaar

Q6. What is the role of “Place” in a Marketing Mix? What is a VMS and an HMS? What

are different format of retail stores found in India?

the importance of place in the marketing mix is that it does not refer to the location of

the business itself, but rather to the location of the customers. The place deals with

strategies the business can employ to get its goods from its present location to the

location of the customers.

Such a project must of necessity entail a study of the demographic that constitutes the

customers with the aim of finding out their location. In an increasingly global economy,

the location of the customers of a company located in Singapore could span the

different continents of the world.

As such, the company must figure out the best way to channel its products from

Singapore to its customers in Africa, Europe and other continents. In this way, it is easy

to see the role of place in the marketing mix. This allows such companies to come up

with the best methods for achieving maximum distribution of goods to the customers.

One of the examples of a place or channel includes the retailer. After identifying the

target market, retail stores located nearby could serve as a place for reaching these

customers.

Another element that could serve as a place for reaching the customers is the Internet.

If the company is located in an industrialized country, then it is logical to assume that a

large number of its customers use the Internet in some form. This element illustrates

the importance of place in the marketing mix because such customers can order from

the company directly through Web sites, which the company has set up in advance for

such a purpose. In this sense, the Internet serves as a place for the purpose of reaching

the customers.The place could also refer to the methods and channels for the effective

and expeditious distribution of the product to the target customers. Such channels may

include the distributors of the product. It may also include well-coordinated methods for

the transportation of the goods to the final consumers.

VENDOR MANAGEMENT SYSTEM

Vendor Management System (VMS) provides visibility into the extended workforce,

allowing organizations to better manage spend, compliance, risk and efficiency. People

fluent provides solutions that address your total workforce to ensure alignment,

assessment, measurement and productivity across the enterprise.

People fluent Vendor Management System helps organizations effectively and

efficiently manage their temporary, consultative, and professional services workforce.

By improving operational efficiencies, cost controls, compliance, and invoice controls for

staff augmentation and professional services spend, Peoplefluent VMS enables you to

leverage the contingent and services procurement workforce as a strategic component

of your overall human capital management strategy.

Peoplefluent Vendor Management System enables organizations to achieve fluency in

the management and optimization of their contract and temporary labor by designing

solutions to address capabilities for both contingent and services procurement

spending. By using the solution to improve operational efficiencies, control costs, and

establish visibility and planning of their contingent labor, the solution enables

organizations to successfully deliver impactful and measureable results, while leveraging

their extended workforce as a strategic component of the overall human capital

management strategy.

Horizontal marketing system (HMS)

Joining of two or more corporations on the same level for the purposes of pursuing a

new

marketing opportunity. Usually a horizontal marketing system is established so that the

individual members can combine resources to make the most out of the marketing

situation.

Products from each member can be marketed and/or distributed together, such as a

bottle manufacturer combining with a producer of dehydrated salad dressing

preparations. The two products are marketed together, allowing the two companies to

combine their marketing resources and accomplish much more than either one might

accomplish alone. Corporations in a horizontal marketing system also have the option of

combining their capital and production capabilities, in addition to their marketing and

distribution resources, to produce synergistic benefits for all members.

FORMAT OF RETAIL STORES IN INDIA

Mom-and-pop Stores

These are small family-owned businesses, which sell a small collection of goods to the customers. They are individually run and cater to small sections of the society. These stores are known for their high standards of customer service.

Department stores

Department stores are general merchandisers. They offer to the customers mid- to high-quality products. Though they sell general goods, some department stores sell only a select line of products. Examples in India would include stores like "Westside" and "Lifestyle"--popular department stores.

Category Killers

Specialty stores are called category killers. Category killers are specialized in their fields and offer one category of products. Most popular examples of category killers include electronic stores like Best Buy and sports accessories stores like Sports Authority.

Malls

One of the most popular and most visited retail formats in India is the mall. These are the largest retail format in India. Malls provide everything that a person wants to buy, all under one roof. From clothes and accessories to food or cinemas, malls provide all of this, and more. Examples include Spencer Plaza in Chennai, India, or the Forum Mall in Bangalore.

Discount Stores.

Discount stores are those that offer their products at a discount, that is, at a lesser rate than the maximum retail price. This is mainly done when there is additional stock left over towards the end of any season. Discount stores sell their goods at a reduced rate with an aim of drawing bargain shoppers.

Supermarkets

One of the other popular retail formats in India is the supermarkets. A supermarket is a grocery store that sells food and household goods. They are large, most often self-service and offer a huge variety of products. People head to supermarkets when they need to stock up on groceries and other items. They provide products for reasonable prices, and of mid to high quality.

Street vendors

Street vendors, or hawkers who sell goods on the streets, are quite popular in India. Through shouting out their wares, they draw the attention of customers. Street vendors are found in almost every city in India, and the business capital of Mumbai has a number of shopping areas comprised solely of street vendors. These hawkers sell not just clothes and accessories, but also local food.

Hypermarkets

Similar to supermarkets, hypermarkets in India are a combination of supermarket and department store. These are large retailers that provide all kinds of groceries and general goods. Saravana Stores in Chennai, Big Bazaar and Reliance Fresh are hypermarkets that draw enormous crowds.

Kiosks

Kiosks are box-like shops, which sell small and inexpensive items like cigarettes, toffees, newspapers and magazines, water packets and sometimes, tea and coffee. These are most commonly found on every street in a city, and cater primarily to local residents.

Q7. What is Brand Equity? How can you Build Brand Equity? How can you measure

Brand Equity?

Brand Equity

According to Armstrong and Kotler, brand equity is the positive differential effect that

knowing the brand name has on customer response to the product or service.

(Armstrong & Kotler, 211) Brands with high equity rate win in the marketplace not simply

because they deliver unique benefits or reliable service. Rather, they succeed because

they forge deep connections with customers. There are four consumer perception

dimension to score the brand equity: differentiation (what makes the brand stand out),

relevance (how consumers feel it meets their needs), knowledge (how much consumers

know about the brand), and esteem (how highly consumers regard and respect the

brand). Thus, these brands must be distinct.

In simple terms

Brand Equity is the added value empowered on products and services. It is reflected by the way consumers think, feel, and act with respect to the brand as well as in the prices, market share and profitability of the brands.

How can you Build Brand Equity?

Marketers build Brand Equity by creating the right brand knowledge structures with the right consumers. This process depends on all brand related contacts- whether marketer initiated or not.

There are three main sets of brand equity drivers:

The initial choices for the brand elements or identities making up the brand (brand name, URLs, symbols, logos, characters, slogans, jingles, signage, etc…)

The product and service and all accompanying marketing activities and supporting marketing programmes.

Other associations indirectly transferred to the brand by linking it to some other entity (a person, place or thing).

Creating High level of Brand Awareness

Developing favorable associations

Creating emotional connections

Consistent reinforcements

How can you measure Brand Equity?

Brand equity should be measured in two ways: Internal and external measurement. Internal measurement ensures that employees are living the brand and delivering the desired experience from an organizational alignment perspective. External measurement is measuring to what degree customers and prospects are experiencing your brand in ways that will cause them to become more committed evangelists. The most effective format for external and internal research is a combination of in-depth phone interviews, supported by a larger sample of Web-based surveys to provide statistical legitimacy (depending on size of total population). Another great way to conduct ongoing brand equity checks is to create customer councils that are representative of your customer base. You can regularly solicit information and test ideas to get a good idea of how your customer base will respond.

Q8. What is Marketing ROI or Return On Marketing Investment (ROMI)?

A Return on Marketing Investment (ROMI) analysis helps organizations understand the

effectiveness of their marketing spending. A ROMI analysis examines business results in

relation to specific marketing activity. The benefit of this knowledge is that it allows

marketers to focus their dollars on programs that provide the greatest return.

It is a metric used to measure the overall effectiveness of a marketing campaign to help

marketers make better decisions about allocating future investments. ROMI is usually

used in online marketing, though integrated campaigns that span print, broadcast and

social media may also rely on it for determining overall success. ROMI is a subset

of ROI (return on investment).

The findings of ROMI analyses can help determine:

Which marketing activities are most effective? Which ones don’t add value?

In what areas of marketing are spending levels too high? How should funds be

reallocated?

What external market conditions (e.g. unemployment) affect marketing’s ability

to generate results? How does competitive activity impact the required level of

marketing investment?

How should incremental funds be allocated?

Marketing ROI

Return on investment (ROI) is a measure of the profit earned from each investment. Like the “return” (or profit) that you earn on your portfolio or bank account, it’s calculated as a percentage. In simple terms, the ROI formula is:

(Return – Investment)

Investment

It’s typically expressed as a percentage, so multiple your result by 100.

Return on Marketing Investment (ROMI)

Return on marketing investment (ROMI) is a metric used to measure the overall effectiveness of a marketing campaign to help marketers make better decisions about allocating future investments. ROMI is usually used in online marketing, though integrated campaigns that span print, broadcast and social media may also rely on it for determining overall success. ROMI is a subset of ROI (return on investment).

In the simplest sense, ROMI is measured by comparing revenue gains against marketing investment. This calculation, however, reflects only the direct impact of marketing investment on a business's revenue.

Q9. What is BCG Matrix and what is the purpose of BCG Matrix? What is Ansoff Matrix and the purpose of such a Matrix? What is McKinsey 7’s Framework?

BCG Matrix

Back in 1968 a clever chap from Boston Consulting Group, Bruce Henderson, created

this chart to help organisations with the task of analysing their product line or portfolio.

The matrix assess products on two dimensions. The first dimension looks at the

products general level of growth within its market. The second dimension then

measures the product’s market share relative to the largest competitor in the industry.

Analysing products in this way provides a useful insight into the likely opportunities and

problems with a particular product.

Products are classified into four distinct groups, Stars, Cash Cows, Problem Child and

Dog. Lets have a look at what each one means for the product and the decision making

process.

Stars (high share and high growth)

Star products all have rapid growth and dominant market share. This means that star

products can be seen as market leading products. These products will need a lot of

investment to retain their position, to support further growth as well as to maintain its

lead over competing products. This being said, star products will also be generating a lot

of income due to the strength they have in the market. The main problem for product

portfolio managers it to judge whether the market is going to continue to grow or

whether it will go down. Star product can become Cash Cows as the market growth

starts to decline if they keep their high market share.

Cash Cows (high share, low growth)

Cash cows don’t need the same level of support as before. This is due to less

competitive pressures with a low growth market and they usually enjoy a dominant

position that has been generated from economies of scale. Cash cows are still

generating a significant level of income but is not costing the organisation much to

maintain. These products can be “milked” to fund Star products.

Dogs (low share, low growth)

Product classified as dogs always have a weak market share in a low growth market.

These products are very likely making a loss or a very low profit at best. These products

can be a big drain on management time and resources. The question for managers are

whether the investment currently being spent on keeping these products alive, could be

spent on making something that would be more profitable. The answer to this question

is usually yes.

Problem Child (low share, high growth)

Also sometime referred to as Question Marks, these products prove to be tricky ones for

product managers. These products are in a high growth market but does not seem to

have a high share of the market. The could be reason for this such as a very new product

to the market. If this is not the case, then some questions need to be asked. What is the

organisation doing wrong? What is competitors doing right? It could be that these

products just need more investment behind them to become Stars.

A completed matrix can be used to assess the strenght of your organisation and its

product portfolio. Organisations would ideally like to have a good mix of cash cows and

stars. There are four assumptions that underpin the Boston Consulting Group Matrix:

1. If you want to gain market share you will need to invest in a competitive package,

especially through the investment in marketing

2. Market share gains have the potential to generate a cash surplus due to the

effect of economies of scale.

3. The maturity stage of the product life cycle is were any cash surplus is most likely

to be generated

4. The best opportunities to build a strong market position usually occur during a

market’s growth period.

We hope that you have found this information useful. This theory forms part of the

syllabus for some of the CIM courses that we offer. Please have a look at these if you

would like to further your marketing knowledge and skills.

Ansoff Matrix

The Ansoff Growth matrix is another marketing planning tool that helps a business

determine its product and market growth strategy.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow

depend on whether it markets new or existing products in new or existing markets. The

output from the Ansoff product/market matrix is a series of suggested growth

strategies which set the direction for the business strategy. These are described below:

Market penetration

Market penetration is the name given to a growth strategy where the business focuses

on selling existing products into existing markets.

Market penetration seeks to achieve four main objectives:

Maintain or increase the market share of current products – this can be

achieved by a combination of competitive pricing strategies, advertising, sales

promotion and perhaps more resources dedicated to personal selling

Secure dominance of growth markets

Restructure a mature market by driving out competitors; this would

require a much more aggressive promotional campaign, supported by a pricing

strategy designed to make the market unattractive for competitors

Increase usage by existing customers – for example by introducing loyalty

schemes

A market penetration marketing strategy is very much about “business as usual”. The

business is focusing on markets and products it knows well. It is likely to have good

information on competitors and on customer needs. It is unlikely, therefore, that this

strategy will require much investment in new market research.

Market development

Market development is the name given to a growth strategy where the business seeks

to sell its existing products into new markets.

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

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

country

New product dimensions or packaging: for example

New distribution channels (e.g. moving from selling via retail to selling

using e-commerce and mail order)

Different pricing policies to attract different customers or create new

market segments

Market development is a more risky strategy than market penetration because of the

targeting of new markets.

Product development

Product development is the name given to a growth strategy where a business aims to

introduce new products into existing markets. This strategy may require the

development of new competencies and requires the business to develop modified

products which can appeal to existing markets.

A strategy of product development is particularly suitable for a business where the

product needs to be differentiated in order to remain competitive. A successful product

development strategy places the marketing emphasis on:

Research & development and innovation

Detailed insights into customer needs (and how they change)

Being first to market

Diversification

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

products in new markets.

This is an inherently more risk strategy because the business is moving into markets in

which it has little or no experience.

For a business to adopt a diversification strategy, therefore, it must have a clear idea

about what it expects to gain from the strategy and an honest assessment of the

risks. However, for the right balance between risk and reward, a marketing strategy of

diversification can be highly rewarding.

What is McKinsey 7’s Framework?

The McKinsey 7’s framework is a popular model used in organizations to analyse the environment to investigate if the company is achieving its intended objectives.

The model proposes 7 interdependent factors – 3 hard ‘S’ i.e. strategy, structure, systems; and 4 soft ‘S’ i.e. shared values, skills, style and staff.

The hard ‘S’ are more tangible, easily to define and easy to influence than the soft ‘S’.

Strategy

It refers to the intended sequence of actions taken by a company to achieve its goals and objectives. It deals with resource allocation and includes competition, customers and the environment.

Structure

It refers to how the various business units are structured and how they communicate with each other. A company’s structure may be centralized or decentralized or may take many other forms depending on the company’s culture and values.

Systems

This includes a host of systems within an organization that define its processes and routines. It includes performance appraisal system, financial systems, IT systems etc.

Shared values

These are the core values of the company that connect all the other 6 factors. These are the fundamental ideas or guiding principles that lay the foundation of businesses.

Skills

These define the core competencies of the employees.

Style

This spans the core beliefs, norms and management style in the organization.

Staff

It refers to the number and type of employees in the organization. It is very important for an organization to manage its human capital to create competitive advantage.

Q10. What is an SBU? What is a Value Chain? What is Supply Chain Management?

SBU

Strategic business unit (SBU) is a profit centre which focuses on product offering and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.

An SBU may be a business unit within a larger corporation, or it may be a business into itself. Corporations may be composed of multiple SBUs, each of which is responsible for its own profitability. SBUs are able to affect most factors which influence their performance. Managed as separate businesses, they are responsible to a parent corporation.

KEY POINTS

An SBU is a semi-autonomous unit that is usually responsible for its own

budgeting, new product decisions, hiring decisions, and price setting.

An SBU may be a business unit within a larger corporation or it may be a business

unto itself. Corporations may be composed of multiple SBUs, each of which is

responsible for its own profitability.

Factors that determine the success of an SBU include the degree of autonomy

given to each SBU manager, the degree to which an SBU shares functional programs

and facilities with other SBUs, and the manner in which the corporation adapt to new

changes in the market.

General Electric is an example of a company with this sort of business organization. General Electric has 49 SBUs.

What is a Value Chain?

A value chain is the whole series of activities that create and build value at every step.

The value chain is made of primary activities and support activities. Primary involves inbound logistics (getting the material in for adding value by processing it), operations (which are all the processes within the manufacturing), outbound (which involves distribution to the points of sale), marketing and sales (which go sell it, brand it and promote it) and after sale service.

What is Supply Chain Management?

Supply chain management is a cross-function approach including managing the

movement of raw materials into an organization, certain aspects of the internal

processing of materials into finished goods, and the movement of finished goods out of

the organization and toward the end-consumer

Q11. What is CRM? What is “Share of Wallet”? What is Customer Life Time Value?

CRM stands for Customer Relationship Management. Itis the process of carefully

managing detailed information about individual customers and all customer ‘touch-

points’ to maximize loyalty of customers.

It entails all aspects of interaction that a company has with its customer, whether it is

sales or service-related. While the phrase customer relationship management is most

commonly used to describe a business-customer relationship, CRM systems are used in

the same way to manage business contacts, clients, contract wins and sales leads.

CRM is often thought of as a business strategy that enables businesses to:

Understand the customer

Retain customers through better customer experience

Attract new customer

Win new clients and contracts

Increase profitably

Decrease customer management costs

Customer relationship management solutions provide you with the customer business

data to help you provide services or products that your customers want, provide better

customer service, cross-sell and up sell more effectively, close deals, retain current

customers and better understand who your customers are.

Share-of-wallet (SOW)

is a survey method used in performance management that helps managers understand

the amount of business a company gets from specific customers.

Another common definition is the following: Share of Wallet is the percentage ("share")

of a customer's expenses ("of wallet") for a product that goes to the firm selling the

product. Different firms fight over the share they have of a customer's wallet, all trying

to get as much as possible. Typically, these different firms don't sell the same but rather

ancillary or complementary product.

Investopedia defines it as -

‘A marketing term referring to the amount of the customer's total spending that a

business captures in the products and services that it offers. Increasing the share of a

customer's wallet a company receives is often a cheaper way of boosting revenue than

increasing market share.’

In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value

(LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire

future relationship with a customer. The prediction model can have varying levels of

sophistication and accuracy, ranging from a crude heuristic to the use of complex

predictive analytics techniques.

The purpose of the customer lifetime value metric is to assess the financial value of each

customer. CLV applies the concept of present value to cash flows attributed to the

customer relationship. CLV will represent the single lump sum value today of the

customer relationship. Even more simply, CLV is the dollar value of the customer

relationship to the firm. It is an upper limit on what the firm would be willing to pay to

acquire the customer relationship as well as an upper limit on the amount the firm

would be willing to pay to avoid losing the customer relationship. If we view a customer

relationship as an asset of the firm, CLV would present the dollar value of that asset.

One of the major uses of CLV is customer segmentation, which starts with the

understanding that not all customers are equally important. CLV-based segmentation

model allows the company to predict the most profitable group of customers,

understand those customers' common characteristics, and focus more on them rather

than on less profitable customers. CLV-based segmentation can be combined with

a Share of Wallet (SOW) model to identify "high CLV but low SOW" customers with the

assumption that the company's profit could be maximized by investing marketing

resources in those customers.

CLV represents exactly how much each customer is worth in monetary terms, and

therefore exactly how much a marketing department should be willing to spend to

acquire each customer, especially in direct response marketing.

Q12. What is a Value Proposition? Explain in detail with Examples?

A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. Value proposition is a clear statement that explains how your product solves customers’ problems or improves their situation (relevancy), delivers specific benefits (quantified value), tells the ideal customer why they should buy from you and not from the competition (unique differentiation).

To create an effective value proposition, an organization should first determine exactly what benefits a customer wants and how much the customer is willing to pay for them. The phrase "value proposition" is credited to Michael Lanning and Edward Michaels, who first used the term in a 1988 staff paper for the consulting firm McKinsey and Co. In the paper, which was entitled "A business is a value delivery system," the authors define value proposition as "a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits."

Q13. What is a Promotional Mix? What is IMC and what are its tools?

Promotional Mix

Promotional Mix is a strategy that integrates all the promotional measures/ elements to spread awareness for the product or service and to deliver a clear message to the target audience. It is almost same as IMC.

There are seven main elements in a promotional mix. They are:

1. Advertising -

Any paid form of non-personal communication through mass media about a service or

product or an idea by a sponsor is called advertising. It is done through non personal

channels or media. Print advertisements, advertisements in Television, Radio,

Billboard, Brouchers and Cataloges, Direct mails, In-store display, motion pictures,

emails, banner ads, web pages, posters are some of the examples of advertising. Paid

promotion and presentation of goods, services, ideas by a sponsor comes under the

advertisement.

2. Personal Selling –

This is a process by which a person persuade the buyer to accept a product or a point of

view or convince the buyer to take specific course of action through face to face

contact. It is an act of helping and persuading through the use of oral presentation of

products or services. Target audience may very from product to product and situation

to situation. In other words personal selling is a person to person process by which the

seller learns about the prospective buyer's wants and seeks to satisfy them by making a

sale. Examples: Sales Meetings, sales presentations, sales training and incentive

programs for intermediary sales people, samples and telemarketing etc. It can be of

face-to-face or through telephone contact.

3. Publicity:

Non-personal stimulation of demand for a product, service or business unit by

generating commercially significant news about it in published media or obtaining

favourable presentation of it on radio, television or stage. Unlike advertising, this form

of promotion is not paid for by the sponsor. Thus, publicity is news carried in the mass

media about an organization, its products, policies, actions, personnel etc. It can

originate with the media or the marketer, and is published or broadcast at no charge for

media space and time. Examples: Magazine and Newspaper articles/reports, radio and

televison presentations, charitable contributions, speeches, issue advertising, and

seminars. Publicity can be favourable (positive) or unfavourable (Negative). The

message is in the hands of media and not controlled by the organization/firm.

4. Sales promotion –

It is any activity that offers an incentive for a limited period to obtain a desired response

from the target audience or intermediaries which includes wholesalers and retailers. It

stimulate consumer demand, market demand and improve product

availability. Examples: Contests, product samples, Coupons, sweepstakes, rebates, tie-

ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.

5 Corporate image –

It is important to create a good image in the sight of general public as the Image of an

organization is a crucial point in marketing. If the reputation of a company is bad,

consumers are less willing to buy a product from this company as they would have been,

if the company had a good image.

6 Exhibitions

Exhibitions provide a chance to try the product by the customers. It is an avenue for the

producers to get an instant response from the potential consumers of the products.

7 Direct Marketing

It is reaching the customer without using the traditional channels of advertising such as

radio, newspaper, television etc. This type of marketing reach the targeted consumers

with techniques such as promotional letters, street advertising, catalogue distribution,

fliers etc

What is IMC and what are its tools?

IMC

The American Marketing Association defines Integrated Marketing Communications

(IMC) as “a planning process designed to assure that all brand contacts received by a

customer or prospect for a product, service, or organization are relevant to that person

and consistent over time.”

The IMC planning process has been compared to composing a musical score. In a piece

of music, while every instrument has a specific task, the goal is to have them come

together in a way that produces beautiful music. It’s the same in IMC, where advertising

might be your violin, social media your piano, public relations your trumpet and so on.

Integrated marketing communication tools

Integrated marketing communication effectively integrates all modes of brand

communication and uses them simultaneously to promote various products and services

among customers effectively and eventually yield higher revenues for the organization.

Tools of IMC

Advertising

Advertising is one of the most effective ways of brand promotion. Advertising helps

organizations reach a wider audience within the shortest possible time frame.

Advertisements in newspaper, television, Radio, billboards help end-users to believe in

your brand and also motivate them to buy the same and remain loyal towards the

brand. Advertisements not only increase the consumption of a particular

product/service but also create brand awareness among customers. Marketers need to

ensure that the right message reaches the right customers at the right time. Be careful

about the content of the advertisement, after all you are paying for every second.

Sales Promotion

Brands (Products and services) can also be promoted through discount coupons, loyalty

clubs, membership coupons, incentives, lucrative schemes, attractive packages for loyal

customers, specially designed deals and so on. Brands can also be promoted effectively

through newspaper inserts, danglers, banners at the right place, glorifiers, wobblers etc.

Direct Marketing

Direct marketing enables organizations to communicate directly with the end-users.

Various tools for direct marketing are emails, text messages, catalogues, brochures,

promotional letters and so on. Through direct marketing, messages reach end-users

directly.

Personal Selling

Personal selling is also one of the most effective tools for integrated marketing

communication. Personal selling takes place when marketer or sales representative sells

products or services to clients. Personal selling goes a long way in strengthening the

relationship between the organization and the end-users.

Personal selling involves the following steps:

1. Prospecting - Prospecting helps you find the right and potential contact.

2. Making first contact - Marketers need to establish first contact with their

prospective clients through emails, telephone calls etc.An appointment is

essential and make sure you reach on time for the meeting.

3. The sales call - Never ever lie to your customers. Share what all unique

your brand has to offer to customers. As a marketer, you yourself should be

convinced with your products and services if you expect your customers to invest

in your brand.

4. Objection handling - Be ready to answer any of the client’s queries.

5. Closing the sale - Do not leave unless and until you successfully close the

deal. There is no harm in giving customers some time to think and decide

accordingly. Do not be after their life.

Q14. What is Media Planning and Media Buying? What is the difference between “Above-the-line” (ATL) and “Below-the-line” (BTL) Advertising?

What is Media Planning?

Media planning is an art and science of ensuring that the advertisements of the clients which they want to place should appear in the right place at the right time to ensure that they reach the correct target group.

Media Buying

Media buying is an art of ensuring that the client’s advertisements appear where they want them to be and they pay the best possible price.

What is the difference between “Above-the-line” (ATL) and “Below-the-line” (BTL) Advertising?

Above The Line (ATL) and Below The Line (BTL) are the two strategies in marketing. Both of these are related to the nature of promotional activities done by companies.

Above the Line promotions refers to all promotional activities done by companies through mass media. In common words’, advertising is the major ATL activity and all other form of promotions except direct marketing falls in below the line marketing strategy.

Above The Line (ATL)

advertising is where mass media is used to promote brands and reach out to the target

consumers. These include conventional media as we know it, television and radio

advertising, print as well as internet. This is communication that is targeted to a wider

spread of audience, and is not specific to individual consumers. ATL advertising tries to

reach out to the mass as consumer audience.

Below the line (BTL)

advertising is more one to one, and involves the distribution of pamphlets, handbills,

stickers, promotions, brochures placed at point of sale, on the roads through banners

and placards. It could also involve product demos and samplings at busy places like

malls and market places or residential complexes. For certain markets, like rural markets

where the reach of mass media like print or television is limited, BTL marketing with

direct consumer outreach programmes do make the most sense.

Other BTL activities could include roadshows, or moving hoardings with the ad of the

product, and vehicles with promotional staff interacting with people demonstrating the

product and distributing literature on the product. BTL advertising is advertising that

uses less conventional methods of advertising that the specific channels of advertising

that may or may not be used by ATL advertising to promote products and services.

BTL is a preferred tool when test marketing a product, sampling and also in case of a

targeted campaign in related to another bigger phenomenon. Also when TG is very

niche, BTL makes more sense. Sometimes BTL is preferred over ATL due to budget

issues, the need to physically display the product, to conduct a hand on product contest

as well as for new launches and teasers campaigns.

When you are communicating with a niche audience BTL is better. However, digital

media has more or less broken these boundaries of ATL versus BTL as digital

communication can address both at the same time.

Q15. What is Advertising? What are the Principles of Advertising? What is the difference between Advertising and PR and Publicity?

“Advertising is the non-personal communication of information usually paid for and

usually persuasive in nature about products, services or ideas by identified sponsors

through the various media.”

Principles of Advertising by Advertising Legend Bill Bernbach.

1. Go to the essence of the product. State the product's essence in the simplest terms of

its basic advantage. And state this both tangibly and memorably.

2. Where possible, make your product an actor in the scene; not just a prop. This makes

for a tremendously effective method of getting your product remembered. Because the

provocative element in your advertising is also the element that sells your product. This

is so simply stated, so difficult to execute.

3. Art and copy must be fully integrated. They must be conceived as a unit, developed as

a unit.

4. Advertising must have vitality. This exuberance is sometimes called "personality".

When advertising has a personality, it is persuasively different; and it is the one because

of the other. You must fight to get "bounce" in your advertising.

5. It is little less than useless to employ a so-called gimmick in advertising —- unless the

gimmick itself tells the product story.

6. Tell the truth. First, it's a great gimmick. Second, you go to heaven. Third, it moves

merchandise because people will trust you.

7. Be relevant. A wonderfully creative execution will get the big "So what" if it isn't

meaningful to their life, family, business etc. And always opt for an ad that's relevant

over one that's exciting and irrelevant.

8. Be simple. Not simpleminded, but single minded. Who has the time or the desire to

listen to advertising?

9. Safe ideas can kill you. If it's been done before, your competition will be ready for it.

Your only chance of beating the competition is with advertising they've never seen

before. Which means you've never seen it before either! Be brave.

10. Stand out. If your advertising goes unnoticed, everything has been wasted.

Advertisement is a paid, non-personal public communication about ideas, goods or services through means such as direct mail, print, radio, television and internet.

Public Relations is the practice of managing the spread of information between the organization and the public. It focuses on promoting the image of the company.

Publicity is a simple act of making a suggestion to a journalist that leads to the inclusion of a company or product in a story. Newspapers, Magazines, TV programmes and Radio shows have large amount of spaces to fill and depend upon publicist to help provide story ideas, interview subjects, background information and other materials.

Difference between Advertising and Publicity:

1. Advertising is a paid form of ideas, goods and services while publicity is not paid by

the sponsor.

2. Advertising comes from an identified sponsor while publicity comes from a neutral

and impartial source.

3. Advertising is controllable by the organization while publicity is not controllable

because it comes from a neutral source.

4. Advertising is less credible in comparison to publicity while publicity is more credible

because it comes from an impartial source.

5. Advertising is what you or your organization says and promotes about you or your

organization but publicity is what others say about you or your organization.

6. In advertising same content is repeated by the sponsor while in publicity it is not

generally possible.

7. Advertising always carries a positive message about your organization because it is

the content you pay for but publicity can be positive or negative because it comes from

an impartial source.

8. In advertising you have full chance to show your creativity but in publicity creativity is

limited because it comes from non-paid source.

9. Advertising is targeted to the particular audiences by the sponsor while in publicity it

is not focused.

10. Most of the times in advertising social responsibility is ignored while in publicity

special focus is given on social responsibility.

Difference between Advertising and PR:

1. Paid Space or Free Coverage

Advertising:

The company pays for ad space. You know exactly when that ad will air or be published.

Public Relations:

Your job is to get free publicity for the company. From news conferences to press

releases, you're focused on getting free media exposure for the company and its

products/services.

2. Creative Control Vs. No Control

Advertising:

Since you're paying for the space, you have creative control on what goes into that ad.

Public Relations:

You have no control over how the media presents your information, if they decide to

use your info at all. They're not obligated to cover your event or publish your press

release just because you sent something to them.

3. Shelf Life

Advertising:

Since you pay for the space, you can run your ads over and over for as long as your

budget allows. An ad generally has a longer shelf life than one press release.

Public Relations:

You only submit a press release about a new product once. You only submit a press

release about a news conference once. The PR exposure you receive is only circulated

once. An editor won't publish your same press release three or four times in their

magazine.

4. Wise Consumers

Advertising:

Consumers know when they're reading an advertisement they're trying to be sold a

product or service.

"The consumer understands that we have paid to present our selling message to him or

her, and unfortunately, the consumer often views our selling message very guardedly,"

Paul Flowers, president of Dallas-based Flowers & Partners, Inc., said. "After all, they

know we are trying to sell them."

Public Relations:

When someone reads a third-party article written about your product or views coverage

of your event on TV, they're seeing something you didn't pay for with ad dollars and

view it differently than they do paid advertising.

"Where we can generate some sort of third-party 'endorsement' by independent media

sources, we can create great credibility for our clients' products or services," Flowers

said.

5. Creativity or a Nose for News

Advertising:

In advertising, you get to exercise your creativity in creating new ad campaigns and

materials.

Public Relations:

In public relations, you have to have a nose for news and be able to generate buzz

through that news. You exercise your creativity, to an extent, in the way you search for

new news to release to the media.