Master of Business Administration- MBA Semester 2 MB0046 Marketing Management - 4 Credits (Book ID: B 1629) Assignment Set -1 (60

marks)

Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions. Q.1 A. Explain the six criteria for effective market segmentation.

Ans. These six criteria include identity; accessibility, responsiveness, size, measurability, and nature of demand:(a) Identity. The marketing manager must have some means of identifying members of the segment i.e., some basis for classifying an individual as being or not being a member of the segment. There must be clear differences between segments. (b) Accessibility. It must be possible to reach the different segments in regard to both promotion and distribution. First, firms must be able to make segmented customers aware of products or services. Second, they must get products to them through the distribution system at a reasonable cost. (c) Responsiveness. A clearly defined segment must react to changes in any of the elements of the marketing mix. Eg. if a particular segment is defined as being cost-conscious, it should react negatively to price rises. (d) Size. The segment must be reasonably large to be a profitable target. It depends upon the number of people in it and their purchasing power. Eg. makers of luxury goods may appeal to small but wealthy target markets whereas makers of cheap consumption goods may sell to a large but relatively poor target markets. (e) Nature of demand. It refers to the different quantities demanded by various segments. Segmentation is required only if there are market differentiation in terms of demand. The marketing manager should not only be able to find out the total demand and the differences in demand patterns in each of these segments. (f) Measurability. The purpose of segmentation is to measure the changing behavioural pattern of consumers. For example, the segment of a market for a car is determined by a number of considerations, such as economy, status, quality, safety, comforts, etc. B. Discuss the types of target marketing strategies. Ans. There are different types of target marketing options available to the marketing planner. The product market coverage strategies are broadly classified as undifferentiated marketing, concentrated marketing, and differentiated marketing strategies:
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(a) Undifferentiated marketing strategy or mass marketing strategy. Here the marketing manager ignores the idea of segment characteristics and differences, and develops a unified marketing programme for the entire market. This strategy keeps the overall marketing costs low and makes it easier to manage and track the market forces uniformly. The marketer tries to find out commonalities across various segments rather than focusing on the differences between segments. (b) Concentrated marketing strategy. When resources and market access are limited and the company has to face intense competition, the marketing manager has to stretch the budget for market coverage. In this case, the company is likely to follow the concentrated marketing strategy. (c) Differentiated marketing strategy. Many marketers choose to target several segments or niches with a differentiated marketing offer to suit each market segment. Maruti is the leading automobile company, which has the distinction of having different products for different market segments. Q.2 Explain the consumer buying decision process.

Ans. (a) Problem recognition. A buying process starts when a consumer recognises that there is a substantial discrepancy between his/her current state of satisfaction and expectations in a consumption situation. A need can be activated through internal or external stimuli. The basic needs of common men rise to a particular level and become a drive. A need can also be aroused by an external stimulus such as sighting a new product in a shop while purchasing other usual products. (b) Information search. After need arousal, the behaviour of the consumer leads towards collection of available information about various stimuli. In this case, information about products and services are gathered from various sources for further processing and decision-making. The first source of consumer information is the internal source. This means the consumer first search the information regarding the relevant product from his/her inner memory. If the information is not available from internal source for making a purchase decision he or she may collect information from external sources. External sources for desired information can be grouped into four categories. (i) Personal sources (family, friends, neighbours, and peer group).

(ii) Commercial sources or market dominated sources (advertisements, salesmen, dealers, and company owned sales force). (iii) Public sources (mass media, consumer rating organisations, and trade association publications). (iv) Experiential sources (handling, examining, and using the product) The marketer will find it worthwhile to study the consumers information sources when. (aa) A substantial percentage of the target market engages in the search (ab) The target market shows some stable patterns of using the respective information sources.
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(c) Alternative evaluation. Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives. Evaluation leads to formation of buying intention that can be to either purchase or reject the product/brand. The final purchase will however depend on the strength of the positive-intention, which is the intention to buy. (d) Purchase decision. Finally the consumer arrives at a purchase decision. Purchase decisions can be any one of the three - no buying, buying later, and buy now. No buying takes the consumers to the problem recognition stage as their consumption problem is not solved and they may again get involved in the process as we have explained. (e) Post-purchase behaviour. Post-purchase behaviour refers to the behaviour of consumers after their commitment to a product has been made. A satisfied product-use experience leads to repeated purchase, referrals from satisfied customers to new customers, higher usage rate, and also brand advocacy. Q.3 A. Discuss the Henry Assael model on buying decision behaviour. Ans. Henry Assael has come up with an explanation to analyse why consumers buy the goods they buy. He explained the relationship between the level of involvement by the consumers in the purchase of goods and services and the level at which diverse goods or services differ from one another. Different buying behaviours as depict in the figure below:
High Involvement Low Involvement

Significant differences between brands Few differences between brands

Complex Buying Behaviour

Variety Seeking Buying Behaviour Habitual Buying Behaviour

Dissonance Reducing Buying Behaviour

Buying Behaviours

Details of buying behaviours are as follows: (a) Complex buying behaviour. Consumers are highly involved in a purchase and aware of significant differences among brands. This is usually the case when the product is expensive, bought infrequently, risky, and highly self-expressive. Eg. personal computer. (b) Dissonance-reducing. Sometimes, the consumer is highly involved in a purchase but sees little differences in the brands. The high involvement is based on the fact that the purchase is expensive, infrequent, and risky. Eg. carpet. (c) Variety-seeking buying. Some buying situations are characterised by low consumer involvement but significant brand differences. Here consumers often do a lot of brand switching. Consumers do the brand switching for the sake of variety rather than dissatisfaction. Eg. wafer potato chips. (d) Habitual buying behaviour. Many products are bought under conditions flow consumer involvement and the absence of significant brand differences. Considering salt, consumers have little involvement in this product category. They go to the store and reach for a brand. If they keep reaching for the same brand, it is out of habit and not strong brand loyalty.
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B. Explain the five stages of Adoption Process. (200-250 words each) Ans. A large number of factors are examined to know the reaction of consumers regarding adoption of a new product. The process of accepting new product ideas by individual customers is popularly known as adoption process. The spread of this innovation across the society is known as diffusion process. Diffusion is the process by which the acceptance of an innovation (a new product, a new service, new ideas, or new practice) is spread by communication (mass media, sales people, or informal conversations) to the members of the social systems. The key elements of diffusion process include the degree of innovativeness of the product, the channels of communication, the social system, and the time required for innovation.
Adoption Trial Evaluation Interest

Awareness

Adoption Process (a) Awareness. During the first stage of adoption process, the product innovation is explained to the consumers. This process gives information about the new product or service. (b) Interest. When consumers develop an interest in the product or product category, they search for information about how the innovation can benefit them. (c) Evaluation. The evaluation stage represents a kind of mental trial of the product innovation. Only if the consumers evaluation of the innovation is satisfactory, they will actually try the product. In case the evaluation is unsatisfactory, the product is automatically rejected. (d) Trial. In this stage, consumers use the product on a limited basis. Their experience with the product provides them with the critical information that they need to adopt or reject it. (e) Adoption. In this stage, consumers decide to make full and regular use of the product.

Q.4 Describe the components of the micro environment of marketing. Ans. Micro environment is the immediate environment in which marketers have to take decisions. The players of this environment are called actors as they have a direct bearing on the marketing decisions. This environment identifies the way a company does business and against whom it stands in the market. For example, Nirma, a detergent company has defined its competitive environment by identifying key players in business namely, the suppliers, competitors, intermediaries, and the customers.

Company Customers Intermediaries

Micro Environment
Suppliers Publics Competitors

Components of Organisations Micro Environment

(a)

Company. Some company factors that affect the marketing decisions are: (i) Culture and value system. Organisational culture can be viewed as the system of shared values and beliefs that shape a companys behavioural norms. A value is an enduring preference as a mode of conduct or an end state. (ii) Mission and objectives. The mission and objectives of the company guide the priorities, direction of development, business philosophy, and business policy. (iii) Management structure and nature. Structure is concerned with the hierarchical relationship and the relationship between the management of different functional areas like the structure of the top management and the pattern of share holding. (iv) Human resource. This concerns factors like manpower planning, recruitment and selection, compensation, communication, and appraisal.

(b) Intermediaries. Intermediaries are independent business units and they carry the companys products and services to the customers. Prominent intermediaries include wholesalers, retailers, merchants, selling agents, brokers, etc. Any trade promotion scheme will motivate them to push competitors product deeper and faster. (c) Public. Positive and favourable public opinion is crucial to marketing success since the public is the authority that permits the existence and operation of competitive marketing systems.

(d) Competitors. Success or failure of an offer largely depends on how competitors react to the companys offer. Today, though there is a growth in refrigerator industry, Godrej as a brand is not growing as fast as its competitors. (e) Suppliers. Increase in the price of raw materials will have a bang on effect on the marketing mix strategy of an organisation. Closer relationship with suppliers is one way of ensuring competitive and quality products for an organisation. (f) Customers. Organisations exist because of customers. No customer means, no business. Organisations survival depends on how they meet the needs and wants of the customers and provide them with maximum benefits. Failure to do so will result in a failed business strategy. Q.5 A. Explain the types of Marketing Information systems. Ans. MIS supplies three types of information, which are: (a) (b) (c) Monitoring information. Recurrent information. Customised information.

Details of different types of Marketing Information Systems:(a) Monitoring information. Monitoring information is the information obtained from scanning external sources which include newspapers, trade publications, technical journals, magazines, directories, balance sheets of companies, and syndicated and published research reports. Data are captured to monitor changes and trends related to marketing situation. Some of these data can be purchased at a price from commercial sources such as market research agencies or from government sources. (b) Recurrent information. Recurrent information is the information that is generated at regular intervals like monthly sales reports; the stock statements, the trial balance, etc. In MIS, recurrent information is the data that MIS supplies at a weekly, monthly, quarterly, or annual interval, which are made available regularly. It can also provide information on customer awareness of companys brands, advertising campaigns, and similar data on close competitors. (c) Customised information. Customised information is also called problemrelated, which is developed in response to some specific requirements related to a marketing problem or any particular data requested by a manager. B. Discuss the different components of MIS.

Ans. A complete MIS consists of internal record system, marketing intelligence system, analytical marketing system, and marketing research system. Information relevant to marketing decisions is collected from the environment, both internal and external. (a) Internal record systems. Internal record systems are available within the company across various departments and provide relevant, routine information for making marketing decisions. It records the timing and size of orders placed by consumers, the payment cycles followed by consumers, and the time taken to fulfil the orders in the shortest possible time. 6

(b) Marketing intelligence system. A marketing intelligence system is the system of collecting and collating data. This system tries to capture relevant data from the external environment. (c) Analytical marketing systems. Analytical marketing systems are also known as Marketing Decision Support Systems (MDSS). It involves problem-solving technology consisting of people, knowledge, software, and hardware integrated through the information technology platform into the sales management process of the organisation. (d) Marketing research systems. Marketing research systems are based on systems and processes that help marketing managers to design, collect, analyse, and report data and findings relevant to a specific marketing situation facing the company. These four systems are also a part of coordinated marketing where other departments join to achieve marketing objectives.

Q.6 Describe the factors to be considered while developing an Effective marketing mix. Ans. To develop an effective marketing mix the company should consider the following factors and then choose the most appropriate mix of elements (7Ps) to target the customers: (a) Companys resources. These are one of the prime factors affecting the companys marketing mix. The financial, human, and technological resources available with the company affect the composition of the marketing mix.The firm needs to conduct a Strength, Weakness, Opportunity, and Threat (SWOT) analysis for the business unit. SWOT analysis diagram with likely sources of strengths, weaknesses, opportunities, and threats of a company.

2.

The key points to remember about SWOT are shown as in figure below:-

(a) Demographics. It implies to the changes in the composition of the market, the demand of the population, the opportunities in the country, etc. that affect the marketing mix.
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(b) Current and projected economic conditions. It connotes the economic factors like inflation, employment, taxes, and other economic factors that influence marketing mix decisions. (c) Market potential. Analysis of market potential for new products considers market growth, prospect's need for your offering, the benefits of the offering, the number of barriers to immediate use, the credibility of the offering and the impact on the customer's daily operations. (d) Competitors. They are important considerations that affect the marketing mix of a firm as the potential for competitive retaliation is based on the competitors resources, commitment to the industry, cash position, predictability, and status of the market. 3. The figure below depicts the Porter's five forces analysis model, which is an important tool for assessing the potential for profitability in an industry. It works by looking at the strength of five important forces that affect competition.

(a) (b) (c)

Supplier power. The power of suppliers to drive up the prices of inputs. Buyer power. The power of customers to drive down products prices. Competitive rivalry. The strength of competition in the industry.

(d) Threat of substitution. The extent to which different products and services can be used in place of a particular product. (e) Threat of new entry. The ease with which new competitors can enter the market if they see that a product is making good profits (and then drive your prices down). By thinking about how each force affects a product and by identifying the strength and direction of each force, you can quickly assess the strength of a products position and ability to make a sustained profit in the industry