MB0046 Q.1 A. Explain the six criteria for effective market segmentation. B.

Discuss the types of target marketing strategies. Ans A) Process of dividing the market according to similarities that exist among the various subgroups within the market. The similarities may be common characteristics or common needs and desires. Market segmentation comes about as a result of the observation that all potential users of a product are not alike, and that the same general appeal will not interest all prospects. Therefore, it becomes essential to develop different marketing tactics based on the differences among potential users in order to effectively cover the entire market for a particular product. There are four basic market segmentation strategies: behavior segmentation, demographic segmentation, geographic segmentation, and physiographic segmentation. Basis for segmenting consumer markets: Geographic segmentation: The market is segmented according to geographic criteria are nations, states, regions, countries, cities, neighborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific. With respect to region, in rainy regions you can sell things like raincoats, umbrellas and gumboots. In hot regions you can sell summer wear. In cold regions you can sell warm clothes. Demographic segmentation: Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. As one might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process. Psychographic segmentation: Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: consumers are divided according to their lifestyle, personality, values and social class. Consumers within the same demographic group can exhibit very different psychographic profiles. Positive market segmentation: Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants, behavior or which might want different products and services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which dont always fit into convenient demographic boundaries. This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within ones industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question.

Behavioral segmentation: In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product. It is actually based on the behavior of the consumer.

Ans B) Targeting is defined as a group of people or organizations for which an organization designs, implements and maintains the marketing mix. Once the bases for segmentation are selected, the marketer has to identify the people or organization to whom the product is meant. Organizations may not differentiate their customer or it may have different customer for different products. In the next section we will study how to identify the target customers. Selecting Target Market Segments Depending upon the emerging patterns of market segmentation, homogeneous preference, diffused, and clustered preference, a company chooses its market segmentation strategy. A) Undifferentiated Marketing: It is a market coverage strategy in which the company treats the target market as one and does not consider that there are market segments that exhibit uncommon needs. The company focuses on the centre of the target market to get maximum advantage. The feature of one product-all segments calls for presenting one marketing-mix for the target market. B) Differentiated Marketing: It is a market coverage strategy in which the company goes for proper market segmentation as depicted by its analysis of the total market. The company, therefore, goes for several products or several segment approach which calls for preparing different marketing mixes for each of the market segment. This strategy is followed by Hindustan Unilever Limited which sells different and each of them has its own market. Thus, the company creates segments in the soap market and not in toiletries market. C) Concentrated Marketing: It is a market coverage strategy in which company follows one product-one segment principle. The manufacturer gets maximum knowledge about the segments needs and therefore acquires special reputation. This strategy can also help small companies to stand against a large corporation because small companies can create niches in its one product one-segment approach by providing maximum varieties.

Q.2 Explain the consumer buying decision process. Ans: Consumer buying decision process 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. From their previous experiences, they know how to satisfy these needs like hunger, thirst, sex, etc. This is a case of internal stimulus. A need can also be aroused by an external stimulus such as sighting a new product in a shop while purchasing other usual products. 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. External sources for desired information can be grouped into four categories. Personal sources (family, friends, neighbours, and peer group) Commercial sources or market dominated sources (advertisements, salesmen, dealers, and company owned sales force) Public sources (mass media, consumer rating organisations, and trade association publications) Experiential sources (handling, examining, and using the product) The marketer will find it worthwhile to study the consumers information sources when: A substantial percentage of the target market engages in the search The target market shows some stable patterns of using the respective information sources. 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. 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. Post-purchase behaviour Post-purchase behaviour refers to the behaviour of consumers after their commitment to a product has been made. It originates out of consumers experience regarding the use of the product and is indicated in terms of satisfaction. This behaviour is reflected in repeated purchases or abstinence from further purchase. 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 behavior Ans. Henry Assael distinguished four types of consumer buying based on the degree of buyer involvement and the degree of differences among brands. Complex buying behavior Consumers engage in complex buying behavior when they are highly involved in a purchase and aware of significant differences among brands. This is usually the case when a product is expensive, bought infrequently, risky, and highly self expressive, like an automobile.

Dissonance reducing buyer behavior Consumers sometimes engage in highly involved in a purchase but sees little differences in brands. The high involvement based on the fact that the purchase is expensive, infrequent, and risky. In this case the buyer will shop around to learn what is available. If they find quality differences in the brands, they might go for the higher price. If they find little differences, they might simply buy on price or convenience Many products are bought under conditions of low involvement and the absence of significant brand differences, for example: salt. There is good evidence that consumers have low involvement with most low-cost, frequently purchased products. Some buying situations are characterized by low involvement but significant brand differences. Here consumers often do a lot of brand switching. Brand switching occurs for the sake of variety rather than dissatisfaction.

Habitual buying behavior

Variety seeking buying behavior

B. Explain the five stages of Adoption Process. Ans. Accepting new ideas begins with: 1. Awareness - advertising/ news story 2. Interest - seeks out information 3. Evaluation - "evaluates the idea or the product on the basis of how its meets specific needs and wants." Friend and family are a contributing factor. 4. Trial - experimenting with the idea, watching a demonstration or "making qualifiying statements" 5. Adoption - intregration of product or idea into daily life.

Q.4 Describe the components of the micro environment of marketing Ans. 1. Micro environmental The microenvironment consists of five components. The first is the organizations internal environmentits several departments and management levelsas it affects marketing management's decision making. The second component includes the marketing channel firms that cooperate to create value: the suppliers and marketing intermediaries (middlemen, physical distribution firms, marketingservice agencies, financial intermediaries). The third component consists of the five types of markets in which the organization can sell: the consumer, producer, reseller, government, and international markets. The fourth component consists of the competitors facing the organization. The fifth component consists of all the publics that have an actual or potential interest in or impact on the organizations ability to

achieve its objectives: financial, media, government, citizen action, and local, general, and internal publics. So the microenvironment consists of six forces close to the company that affect its ability to serve its customers: a. The company itself (including departments). b. Suppliers. c. Marketing channel firms (intermediaries). d. Customer markets. e. Competitors. f. Publics. The Company: The first force is the company itself and the role it plays in the microenvironment. This could be deemed the internal environment. 1). Top management is responsible for setting the companys mission, objectives, broad strategies, and policies. 2). Marketing managers must make decisions within the parameters established by top management. 3). Marketing managers must also work closely with other company departments. Areas such as finance, R & D, purchasing, manufacturing, and accounting all produce better results when aligned by common objectives and goals. 4). All departments must think consumer if the firm is to be successful. The goal is to provide superior customer value and satisfaction. Suppliers: Suppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the companys overall customer value delivery system. 1) One consideration is to watch supply availability (such as supply shortages). 2) Another point of concern is the monitoring of price trends of key inputs. Rising supply costs must be carefully monitored. Marketing Intermediaries: Marketing intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers. 1). Resellers are distribution channel firms that help the company find customers or make sales to them. 2). These include wholesalers and retailers who buy and resell merchandise. 3). Resellers often perform important functions more cheaply than the company can perform itself. However, seeking and working with resellers is not easy because of the power that some demand and use. Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Examples would be warehouses (that store and protect goods before they move to the next destination). Marketing service agencies (such as marketing research firms, advertising agencies, media firms, etc.) help the company target and promote its products. Financial intermediaries (such as banks, credit companies, insurance companies, etc.) help finance

transactions and insure against risks. Customers: The company must study its customer markets closely since each market has its own special characteristics. These markets normally include: 1). Consumer markets (individuals and households that buy goods and services for personal consumption). 2). Business markets (buy goods and services for further processing or for use in their production process). 3). Reseller markets (buy goods and services in order to resell them at a profit). 4). Government markets (agencies that buy goods and services in order to produce public services or transfer them to those that need them). 5). International markets (buyers of all types in foreign countries). Competitors: Every company faces a wide range of competitors. A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. No single competitive strategy is best for all companies. Publics: A public is any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives. A company should prepare a marketing plan for all of their major publics as well as their customer markets. Generally, publics can be identified as being: 1). Financial publics--influence the companys ability to obtain funds. 2). Media publics--carry news, features, and editorial opinion. 3). Government publics--take developments into account. 4). Citizen-action publics--a companys decisions are often questioned by consumer organizations. 5). Local publics--includes neighborhood residents and community organizations. 6). General publics--a company must be concerned about the general publics attitude toward its products and services. 7). Internal publics--workers, managers, volunteers, and the board of directors.

Q.5 A. Explain the types of Marketing Information systems Ans. Marketing Information System supplies three types of information. 1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly, quarterly, or annual interval. This includes data such as sales, Market Share, sales call reports, inventory levels, payables, and receivables etc. which are made available regularly. Information on customer awareness of companys brands, advertising campaigns and similar data on close competitors can also be provided. 2. Monitoring Information is the data obtained from regular scanning of certain sources such as trade journals and other publications. Here relevant data from external environment is captured to monitor changes and trends related to marketing situation. Data about competitors can also be part of this category. Some of these data can be purchased at a price from commercial sources such as Market Research agencies or from Government sources.

3. Problem related or customized information is developed in response to some specific requirement related to a marketing problem or any particular data requested by a manager. Primary Data or Secondary Data (or both) are collected through survey Research in response to specific need. For example, if the company has developed a new product, the marketing manager may want to find out the opinion of the target customers before launching the product in the market. Such data is generated by conducting a market research study with adequate sample size, and the findings obtained are used to help decide whether the product is accepted and can be launched.

B. Discuss the different components of MIS Ans. A marketing information system (MIS) is intended to bring together disparate items of data into a coherent body of information. An MIS is, as will shortly be seen, more than raw data or information suitable for the purposes of decision making. An MIS also provides methods for interpreting the information the MIS provides. Moreover, as Kotler's1 definition says, an MIS is more than a system of data collection or a set of information technologies: "A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control". Figure illustrates the major components of an MIS, the environmental factors monitored by the system and the types of marketing decision which the MIS seeks to underpin. The explanation of this model of an MIS begins with a description of each of its four main constituent parts: the internal reporting systems, marketing research system, marketing intelligence system and marketing models. It is suggested that whilst the MIS varies in its degree of sophistication - with many in the industrialised countries being computerised and few in the developing countries being so - a fully fledged MIS should have these components, the methods (and technologies) of collection, storing, retrieving and processing data notwithstanding.

Q.6 Describe the factors to be considered while developing an Effective marketing mix. Ans. Any one marketing method alone isn't going to work. It's coming up with the right mix of multiple marketing methods that will lead to success. And, the mix has to be right for your individual business. The term "marketing mix" is used to describe how businesses promote their products and services or how customers learn about a business's products and services. There are many methods to use. No one method works all the time but all the methods work some of the time. Developing a marketing mix is not unlike making a cake. Using flour alone does not make a cake. It takes other ingredients, carefully chosen, blended and handled to come up with a recipe for a cake that most people will like.

There are lots of methods one has to choose from when thinking about and discussing what the marketing mix should be. As with the ingredients that go into making a cake, any one used alone will not do the job. It is the combining and coordination of them that means each will be more effective than if used alone. To come up with the right marketing mix it may take trying different recipes until the right mix is found. Each business will have to choose the methods that are best for them. When making the choices of what the ingredients are and how much of each needs to be used to make up the marketing mix, one has to take into consideration if the customer comes to the business (store, office, web site) if the business goes out to the customers (mail, e-mail, fax, letter, phone), or if customers might do either or both. As a marketing mix or plan is being created, consideration for developing and designing what the public will eventually see or read has to be coordinated so that prospective customers get only one message. Too often, unfortunately, various materials for different methods are designed at different times and each because they are seen as standing alone give off mixed messages. The two major factors that affect the marketing mix are: 1) Does the business sell products or services? For businesses selling products, they need to take into account that they are providing the service of offering their products, as well as the services that support the product. For businesses selling services, they need to put their menu of services into product formats. They, too, have services that go along with the outputs (nee products) of their services. 2) Is the business the distributor of their or other's products and services? Is one selling to the endusers/customers? Is one selling to businesses that either buy and pass on what they bought? Or, does their business sell to someone who will convert it into something else that they sell? The choices of what go into the marketing mix are different even though many of the ingredients from one may be right for the other. The two viewpoints are not exclusive of the other . . . they are mutually inclusive. Marketing Mix for Businesses Selling to End-Users/Consumers: Mass Media: Print, Broadcast, Internet, Direct Mail, Telemarketing, Fax & E-Mail, Public Relations Releases Display Presentations (as applicable): Location, Building, Signage, Windows/Counters/Shelf Display, Printed Materials, Web Site, Attire, Business Environment One-on-One: In person, Letter, E-mail, Fax, Telephone Follow-up: In person, Letter, E-mail, Fax, Telephone Marketing Mix for Businesses Selling to Other Businesses:

As a Supplier: through Agents, Brochures/Catalogues, Web Site, Trade Media/Shows/Organizations, Telemarketing, Direct Mail, and other formats for presenting ideas, information, services, and/or products. Customers' staff & management reacting to their wants, needs, and ideas The Media: Newspapers, Books, Magazines, Movies, Radio, Television, Internet, and Public Relations Releases.