M.B.

A - ANNA UNIVERSITY EXAMINATION JUNE -2010 MARKETING MANAGEMENT (REGULATION 2009) Part- A 1)Marketing: Marketing is an organizational function and a set of processes for creating, communicating and delivery value of customers and for managing customer relationship in ways that benefits organization and its stakeholders. 2)Factors affecting marketing environment: Micro: Suppliers Intermediaries Customers Competitors Public Macro: Demographic environment Economic environment Physical environment Technical environment Political and legal environment Social- cultural environment International environment 3)Factors involved in Micheal P. Porter model: Bargaining power of suppliers Threat of new entrants Rivalry inside the industry Threat of substitutes Bargaining power of buyer 4)Strategies for service marketing: Strategies for dealing with intangibility of service Strategies for dealing with heterogeneity of service Strategies for dealing with inseparability of service Strategies for dealing with inventory of service 5)Pricing strategies for introduction stage in PLC: Rapid skimming strategy Slow skimming strategy Rapid penetration strategy Slow penetration strategy

6) Decisions involved in channel management Channel management decisions Recruiting channel members Selecting channel members Training channel members Motivating channel members 7)Different types of buying behavior: Consumer buying Industrial buying Online buying 8)Base of customer relationship management: Customer relationship management (CRM) is a model for managing a companys interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support 9)Online marketing trends: E- mail marketing Blogs marketing Article marketing Buzz marketing 10)Applications of marketing research: Pricing research Product research Concept testing Customer satisfaction research Market segmentation Sales analysis

PART B 11 A) Choose a company of your choice and explain how internal environmental factors affecting its marketing operations? Internal marketing environment factors or controllable factors: Internal environment refers to factors existing within a marketing firm. The internal factors are generally regarded as controllable factors or elements because the company has control over these factors. Controllable elements are eligible to control the operation of an organization. There are a number of internal forces or controllable elements which influence the marketing decisions are as follows:

Top management: The organizational structure, the composition of the Board of Director, extent of professionalization of management etc., are important factors influencing business decisions. Finance and accounting: Finance is concerned with funding and using funds to carry out the marketing plan. Financial factors like financial policies, financial position and capital structure are also important internal environment affecting business performances, strategies and decisions. Research and Development: The R&D department focuses on designing safe and attractive products. R&D and technological capabilities, determine a companys ability to innovate and compete. Manufacturing: Manufacturing is responsible for producing the desired quality and quantity of products. Physical assets and facilities like the production capacity, technology and efficiency of the productive apparatus, distribution logistics etc., are among the factors which influence the competitiveness of a firm. Purchasing: Purchasing worries about getting supplies and materials. Purchasing means procurement of goods and services from some external agencies. Purchasing is one fo the most common at the same time a strategic activity of a business. Company Image and Brand Equity: The image of the company matters while raising finance, forming joint ventures or other alliances, soliciting marketing intermediaries, entering purchase or sale contracts, launching new products etc. Brand equity is also relevant in several of these cases. Analysing the internal environment Marketing managers seldom start with limitless resources and a blank sheet of paper. They will have existing products, existing retailers or distributors, existing location and a legacy of brand attitudes and previous marketing communications. They will also have only finite resources with which to exploit opportunities. This means that a manager must carefully review internal factors against the external environment and competitor activity. This review of an organisations strengths and weaknesses should lead to an identification of opportunities and threats. It is often referred to as a SWOT analysis. Strengths identified within the company; Weaknesses identified within the company; Opportunities identified when strengths are related to the external environment; Threats identified when weaknesses are related to the external environment.

Understanding an organisations strengths and weaknesses A manager needs to review all of the organisation's activities and make a judgement about their merits relative to the competition and taking into account the external environment. Where the judgement of any aspect of the organisation is positive, they would be said to be a strength; where it is negative, this would be a weakness.

Although many large organisations will support decisions with sophisticated market and internal data, this is really a creative exercise involving judgement. Insight into new competitive advantages may come from attempting to review aspects of the organisation's operations in new ways. The main areas than might be considered are: sales volume; sales growth; market share; customer base and loyalty (number of active/repeat customers) customer attitudes to the brand; customers' uses for the brand; the organisation's physical resources; the organisation's intellectual resources (staff knowledge and copyrights and patents); relationships with suppliers, distributors and retailers. Understanding an organisation's opportunities and threats Opportunities and threats follow directed from the assessment of internal strengths and weaknesses against the external environment including competitor activity. Opportunities are identified from an assessment that suggests that an organisation is in a very strong position relative to competitors in an area with a very favourable external environment. Threats are identified from an assessment that suggests that some aspect of the organisation's activity is very weak compared to competitors and /or were that activity faces a problematic external environment. The more insightful, detailed and imaginative the analysis of strengths and weaknesess, the more likely that this will produce meaningful and exploitable opportunities and the more likely a organisation is to be able to respond to threats before they become serious. From these assessments priorities can be identified. Opportunities and threats can be ordered according to which are likely to have the biggest impact on the organisation in terms of: profit or loss; market growth or decline. Opportunities and threats may also be considered to be short term (less than a year) or longer term. INTERNAL MARKETING ENVIRONMENT IN TATA MOTORS SWOT analysis Assessing the external and internal environmental factors, the following picture can be drawn: Strengths: * Strong revenue growth According to company's annual report (Tata Motors, 2006) the company registered strong operational growth of 32,5%, whereas the revenues from the international operations grew by 149%. * Diversified product portfolio Company operates in different market segments including passenger cars, trucks, medium and heavy commercial vehicles, light commercial vehicles, utility vehicles and buses. Weaknesses

* High dependence on Indian market - over 80% of the company's revenue stems from sales on Indian market. Opportunities * The further expansion * The increase of global presence in SUV segment;

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Threats * Further increase of competitive pressure on Indian market - At the moment the Indian market is already shared between such strong competitors as GM, Ford, Toyota, VW and Honda. These companies are expected (Datamonitor, 2006a) to increase their presence through licensing agreements, wholly owned subsidiaries and joint ventures. Datamonitor (2006a) envisage additional threat stemming from local automotive firms provided that they gain access to debt and equity financing. * Overall problem of liquidity As the case study highlighted, Tata Group allocates significant investment flows in IT sector. The failure of this capital to be returned might put financial pressure on all business areas, including Tata Motors. * Slow pace of market entry Due to the high competitive pressure of UK market, the market window for Tata Motors entry is narrow. The slow pace of entry and wrong timing decision might undermine the company's success on this market. 11 B) Critically analyze the importance of marketing department relationships with other functional departments in the organization? Relationship of marketing department with other functional departments in the organization Marketing and R&D: R&D is staffed with scientists and technicians who pride themselves on scientific curiosity and detachment, like to work on challenging technical problems without much concern for immediate sales payoffs, and prefer to work without much supervision or accountability. The marketing sales department is staffed with business-oriented people who pride themselves on a practical understanding of the marketplace, like to see many new products with promotable sales features, and feel compelled to pay attention to product cost. Marketers see the R&D people as maximising technical qualities rather than designing for customer requirements. R&D people see marketers as those people who are more interested in sales than in the products technical features. Thus a balanced company is the ne in which R&D and marketing share responsibility for successful market-oriented innovation. Marketing and Purchasing: They think that marketing insists on too high a quality of ordered materials and components. They also dislike marketings forecasting inaccuracy, which causes them to place rush orders at unfavourable price or to carry excessive inventories.

Purchasing management directs the flow of goods and services in a accompany and handles all data relating to contact with suppliers. Marketing and production Manufacturing people see marketers as having little understanding of factory economics or politics. Marketers complain about in sufficient capacity, delays in production poor quality control and poor customer service. The crucial importance of business success is to effectively coordinating production and marketing. Taking this perspective, production planning and scheduling may be viewed as providing a bridge between production and marketing. Marketing and operations Operations management is an area of business concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient in terms of using as little resource as need and effective in terms of meeting customer requirements. Operations staff members may be inclined to focus on their convenience and give ordinary service, whereas marketers want the staff to focus on customer convenience and provide extraordinary services. Marketing and Finance: Financial executives pride themselves on being able to evaluate the profit implication of different business actions. Marketing executives ask for substantial budgets for advertising, sales promotions and sales force, without being able to prove how much revenue these expenditures will produce. Financial people claim that marketers know the value of everything and the cost of nothing. But marketing executives often see financial people as knowing the cost of everything and the value of nothing. Thus the value of an integrated marketing-finance interface can be significant to a firm. Marketing and Human Relations Management Once the new products or services are introduced, marketing has the responsibility to inform the HRM department to know about it. The information for HRM department should be concerned with the new skills and experience needed for the new workers at present. The marketing department relies heavily on the HRM for the supply of component marketing and sales people. The HRD is also responsible for providing training to the marketing people within the organization.

12 (A) choose a company of your choice and do the competitive analysis for developing competitive strategies. DEFINITION Competitive analysis is the practice of analyzing the competitive environment in which your business operates, including strengths and weaknesses of the businesses with which you compete, strengths and weaknesses of your company, demographics and desires of marketplace customers, strategies that can improve your position in the marketplace, impediments that prevent you from entering new markets, and barriers that you can erect to prevent others from eroding your own place in the market. BRUCE SHEIMANS comments on competitive analysis for a magazine industry: Bruce Sheiman(author) provided a synopsis of the importance of competitive analysis to the magazine industry First, it is critical to discover whether a competitor is encroaching on your proposed magazines editorial or market franchise or, indeed whether a competitor renders your magazine idea superfluous. Second, competition helps to define magazines market position. Third, competitive magazines give you benchmarks.

MAJOR ASPECTS OF COMPETITIVE ANALYSIS Defining Competitors: the first step is to define your universe of competitors, wrote Sheiman,. Some businesses may offer products or services that largely mirror those offered by our own company, while others may only dispense one r two products/services that compete with our companys offerings. The business conducting the competitive analysis has to decide whether latter examples of competition are incidental or they present a potential threat to the businesss financial well-being. Analysis of Competitor Strengths and Weakness: Once a companys universe of competitors has been defined and identified, it can start on the process of identifying the strengths and weaknesses of those competitors. There are two main questions that cut to the heart of this element of competitive analysis: What key advantages do the competing businesses posses in the realms of production management, marketing, service reputation, and other aspects of business operation? What key vulnerabilities or weaknesses do the competing firms have in these same areas? David Aaker suggested that business owners should concentrate their analysis efforts in four major areas: Studying the reasons behind the successes and failures of competitive firms Major issues that motivate customers Major component costs Barriers to mobility within the industry Analysis of Internal Strengths and Weaknesses What aspects of the companys operation convey an advantage in the marketplace? Is your sales force composed of bright, ambitious individuals?

Does your company have an advanced inventory management system in place? Do you have an employee with a talent for advertising or maketing? Analysis of customer needs and wants Customer priorities should become your business priorities. Business owners and managers need to study and thus anticipate future customer needs and wants as well those needs and wants that are currently being addressed.

Studying impediments to market for you and your competition: Abrams cited several common barriers to entry for new competition: Patents: these provide some protection for new products or processes High Start-Up Costs: In many cases, this barrier is the most daunting one for small businesses Knowledge: Lack of technical, manufacturing, marketing or engineering expertise can all be a significant obstacle to successful market entry Market Saturation: It is a basic reality that it is more difficult to carve-out a niche in a crowded market than it is to establish a presence in a market marked by relatively light competition. Building Strategic plans to improve Marketplace Position: Once a small business owner has attended to the requirements of competitive analysis, he or she can proceed with the final element of the practice. Strategic plans should touch on all areas of a businesss operations, including production of goods, marketing, pricing and distribution of goods. PEPSI AND COCA COLA- COMPETITIVE STRATEGIC WAR CURRENT COMPETITION BETWEEEN COCA COLA AND PEPSI If we see the present scenario its hard to tell which brand is winning the cola wars as Pepsi had extended its cola wars to other sectors like FRITO LAYS and NIMBOOZ which is giving tough competition to coca-cola which doesnt target on these sectors. Second aspect which is to be given in consideration is that, both the companies are spending heavily on advertisement and more celebrities are roped in by both the companies to fight the competition. Recently COCA-COLA beverages ACTORS IMRAN KHAN AND KALKI for a new ad; to reply back to this a new ad by PEPSI beverages featuring ACTOR RANBIR KAPOOR and VINDHU DARA SINGH came up which is making waves at present. Coke is served in MC DONALDS and there we wont find Pepsi products even the coffee served is of GEORGIA which is a coca-cola brand, same is the case of PIZZA HUT and KFC which is owned by PEPSI CO there only Pepsi products are served,,,,this had lead to clear war in restaurant segment as well. PEPSI is targeting young generation and their ad campaigns are a clear example of that, whereas coca-cola is targeting the family as a whole which has been its old formula from ages.

Presently coca-cola may be leading in beverages like coke, but its facing severe competition form Mirinda, Nimbooz. Though in packed drinking water KINLEY (COCA-COLA BRAND) and AQUAFINA (PEPSI CO BRAND) both are treated equally by customers.

12 B) Differentiate service marketing from product marketing. Suggest additional marketing mix for service marketing? Service marketing Customers come to the service locations to avail them. Customers like their products to be standardized. The quality that expect from a product is mostly embedded in the product itself at the time of its manufacture. The products are tangible. Transfer of ownership is not possible Services are highly perishable in nature. Re-selling is not possible. Extended 7ps of marketing mix. High customer involvement. Mass production is easy. Product marketing Products go to the customers through distribution channels. Customers like services to be customized to their needs. The quality that people expect from a service is quite different : customization and variation is appreciated in service. The service is intangible. The transfer of ownership is possible in case of product. Products are less perishable. Re-selling is possible. Traditional 4 ps of marketing. Low customer involvement. Mass production is difficult.

Service marketing mix: Product: In case of services, the product is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin. Place: Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city. Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings.

People: People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today. Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff. Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests 13a) Explain the new product development process with suitable examples New product development process: Idea generation: The first step in new product development requires gathering ideas to be evaluated as potential product options. For many companies idea generation is an ongoing process with contributions from inside and outside the organization. Many market research techniques are used to encourage ideas including: running focus groups with consumers, channel members, and the companys sales force. Idea screening: The process involves shifting through the ideas generated above and selecting ones which are feasible and workable to develop. Pursuing non feasible ideas can clearly be costly for the company. In this step the ideas generated in the first step are evaluated by company personnel to isolate the most attractive options. Concept development and testing: With few ideas in hand the marketer now attempts to obtain initial feedback from consumers, distributers and its own employees. Generally, the focus groups are convened where the ideas are presented to a group, often in the form of concept board presentations and not in actual working form. Marketing strategy and development: A proposed marketing strategy will be written laying out the marketing mix strategy of the product, the segmentation, targeting and positioning strategy sales and profits that are expected. Business analysis: At this point in the new product development process the marketer has reduced a potentially large number of ideas down to one or more options. Now in this step the process becomes very dependent on market research as efforts are made to analyze the viability of the product ideas. The key objective at this stage is to obtain useful forecast of market size, operational cost and financial projections.

Product and marketing mix development: It is finally at this stage that a prototype is finally produced. The prototype will clearly run through all the desired tests, and be presented to the target audience to see if changes need to be made. Ideas passing through business analysis are given serious consideration for development. Companies direct their research and development teams to construct an initial design or prototype of the idea. Test marketing: The term test marketing is also sometimes called field marketing. The word test means examination or trail. Test marketing, thus, means testing the product in the market before the product is commercialized on a large scale. Commercialization: If the test marketing stage has been successful and displays promising results then the product will go for national launch. There are certain factors that need to be taken into considerations before a product is launched nationally. These are timing, how the product will be launched, where the product will be launched, will there be a national roll out or will it be region by region? 13b) Describe the strategies suitable for growth and maturity stage of PLC Strategies suitable for growth and maturity stage of plc: In growth stages acquisition strategies will turn to retention strategies, and product trials will change to great repeat purchases and brand loyalty, these changes are for both customers and other members such as; traders, wholesalers, retailers and supply chains. To prepare for this stage to eventuate to future stages (maturity) should make long term relationship strategy, again with both customer and partner member, to stay competitive. Competitors need to make loyal and good friendships with customers in the supply chain and the growth stage too. The growing stage is the most expensive stage of marketing as these relationship requirements are expensive and challenging. While competition becomes more challenging especially in this stage, efficiency of pricing will also increase. Then firms despite of balancing prices will need cash flow for being competitive. Having a good pricing strategy with the fact of it being an indication of perceived quality and challenge of increasing customer s pricing sensitivity are some of the decision impediments. Therefore some firms base their market position on premium or value based pricing, and some of them offer different products with different prices to solve this dilemma. Having enough space to enter the market will reduce a firm`s attention of defining their market for the maturity stage, because in the growth stage everyone can get their own piece, Soon this stage will over and the stronger firms will stay in the maturity stage. Most strategies used to be more defensible of this situation are making positions by a good image, quality, price or some technological advantage specially in industrial market for not being shacked out of the market in maturity should take steps in growth stage.

In the Maturity stage competitors will no longer enter the market except those who have new products or have found some innovations which are enough to make a market share and attract a large amount of customers. However, a window of opportunity will stay open in this stage. The fact of being limited to or not having any growth at this stage, stealing becomes a way of covering competitor for weaker firms. Strategy of lowering prices during the growth stage to keep customers becomes a door of entering for some competitors to enter only with significant promotional investments or cuts in gross margins. The Maturity stage will be the longest stage if firms can manage the growth stage and also if companies keep the sales. This stage has four goals that can be pursued; generating cash flow, holding market share, stealing market share, and increase share of the customer. Generating cash flow is important to penetrate investment expenses and developing new products and growth firms strategic options should enable to hold market shares among other dominant brands of the market otherwise they can be taken of market. Stealing market shares is usually used by weaker firms but it can be used by any firm in the mature market too. The goal of this strategy is switching brand, even temporarily market share is important in amount of benefits, and any small gains can encourage a large increase in benefit of firms. The last goal is increasing customer share and it is mostly used by financial services and it refers to percentages of customer s need in the particular area met by the firm. Stealing customer of others can be an expensive task. However in some cases making an agreement with a customer can lock them for a certain amounts of time in to using the product. The factors mentioned above were the goal of the maturity stage. Next, I will go through the strategic options to be selected for these goals obtaining. These strategies are; introducing a new product image, finding new users, discovering new or used applications of the product and finally coming up with a new technology for the product. 14 A) Discuss the factors affecting the consumer buying behaviour in Indian context. FACTORS AFFECTING CONSUMER BEHAVIOUR Consumer purchases are influenced strongly by or there are four factors. 01. Cultural Factor 02. Social Factor 03. Personal Factor 04. Psychological Factor. 01. Cultural Factor :Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class Culture:The set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a persons wants and behaviour. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country.

Sub Culture :A group of people with shared value systems based on common life experiences and situations. Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products. Social Class:Almost every society has some form of social structure, social classes are societys relatively permanent and ordered divisions whose members share similar values, interests and behaviour. 02. Social Factors :A consumers behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles and status Groups :Two or more people who interact to accomplish individual or mutual goals. A persons behavious is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups. Some are primary groups includes family, friends, neighbours and coworkers. Some are secondary groups, which are more formal and have less regular interaction. These includes organizations like religious groups, professional association and trade unions. Family:Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services. Roles and Status :A person belongs to many groups, family, clubs, organizations. The persons position in each group can be defined in terms of both role and status. For example. M & X plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them. 03. Personal Factors :It includes i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept. Age and Life cycle Stage:People changes the goods and services they buy over their lifetimes. Tastes in food,clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle.

Occupation :A persons occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy morebusiness suits. A Co. can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors. Economic situation :A persons economic situation will affect product choice Life Style :Life Style is a persons Pattern of living, understanding these forces involves measuring consumers major AIO dimensions. i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products) Personality and Self concept :Each persons distinct personality influence his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to ones own environment. 04. Psychological Factors :It includes these Factors. i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes Motivation :Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need Perception :The process by which people select, Organize, and interpret information to form a meaningful picture of the world. Learning:Changes in an individuals behaviour arising from experience. Beliefs and attitudes :Belief is a descriptive thought that a person holds about something Attitude, a Persons consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea

3.0

Different Segments Of Indian Consumers

3.1 The Socialites Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on weekends, and spend a good amount on luxury goods. They are always looking for something different. They are the darlings of exclusive establishments. They go for high value, exclusive products. Socialites are also very brand conscious and would go only for the best known in the market. 3.2 The Conservatives The Conservatives belong to the middle class. The conservative segment is the reflection of the true Indian culture. They are traditional in their outlook, cautious in their approach towards purchases, spend more time with family than in partying and focus more on savings than spending. Slow in decision making, they seek a lot of information before making any purchase. They look for durability and functionality but at the same time are also image conscious. They prefer high value consumer products, but often have to settle for the more affordable one. These habits in turn affect their purchasing habits where they are trying to go for the middle and upper middle level priced products. 3.3 The Working Women The working woman segment is the one, which has seen a tremendous growth in the late nineties. This segment has opened the floodgates for the Indian retailers. The working woman today has grown out of her long-standing image of being the homemaker. Today, she is rubbing shoulders with men, proving herself to be equally good, if not better. Working women have their own mind in decision to purchase the products that appeal to them. 4.0 Indias Rich Indias rich can be categorized into five major categories as follows: 4.1 The Rich The rich have income greater than US$11,000/- per annum. Total household having such incomes are 1,058,961. These people are upwardly mobile. Some of them in this category are Double Income No Kids (DINK) households. They spend more on leisure and entertainment-activities than on future looking investments. Across the category, backgrounds are distinctly middle class. They aspire, therefore, to attain the super-rich status.

4.2

The Super Rich

The Super Rich have income greater than US$22,000/- per annum. Total number of households is 320,900. There are less DINK families here than in the rich category. The Super Rich are mainly professionals and devoted to consumerism. They buy many durables and are status conscious. 4.3 The Ultra Rich

The Ultra Rich have income greater than US$44,000/- per annum. The number of households in this category is 98,289. There is no typical profile of the ultra-rich. There are some DINK households of middle-level executives. Some single earning households are of first generation entrepreneurs. Some rich farmers, who have been rich for a long time, belong to this category.

4.4

The Sheer Rich

The Sheer Rich is made up by households having income exceeding US$110,000/- per annum. Such households are 20,863. They do not have a homogenous profile. There are joint families as well as nuclear families in this category. They consume services greatly. They own multiple cars and houses. They aspire to social status and power. 4.5 The Obscenely Rich

The Obscenely Rich is made up of households having income exceeding US$222,000/- per annum. There are hardly 6,515 such households in India. They are first-generation entrepreneurs who have made it big. Some of them are techies. A variety of people belong to this category. They are just equivalent to the rich in the developed countries. They crave for exclusivity in what they buy. Most premium brands are relevant to them. 5.0 Rural Consumer

About three quarters of the Indian population are in the rural areas and with the growing middle class, specially in the Indian cities, the spill over effect of the growing urban middle class is also felt in the rural areas. The Indian rural market has been growing at 3-4% per annum, adding more than 1 million new consumers every year and now accounts for close to 50% of the volume consumption of fast-moving consumer goods (FMCG) in India. The market size of the fast moving consumer goods sector is projected to more than double to US$ 23.25 billion by 2010 from the present US$ 11.16 billion. As a result, it is becoming an important market place for fast moving consumer goods as well as consumer durables. 6.0 Increasing Awareness Of Indian Consumers

Over the years, as a result of the increasing literacy in the country, exposure to the west, satellite television, foreign magazines and newspapers, there is a significant increase of consumer awareness among the Indians. Today more and more consumers are selective on the quality of the products/services. This awareness has made the Indian consumers seek more and more reliable sources for purchases such as organized retail chains that have a corporate background and where the accountability is more pronounced. The consumer also seeks to purchase from a place where his/her feedback is more valued. Indian consumers are now more aware and discerning, and are knowledgeable about technology, products and the market and are beginning to demand benefits beyond just availability of a range of products that came from trusted manufacturers. The Indian consumers are price sensitive and prefer to buy value for money products.

7.0 7.1

Changing Trends In Indian Consumer Behaviour Bulk Purchasing

Urbanisation is taking place in India at a dramatic pace and is influencing the life style and buying behaviour of the consumers. The working urbanites are depending more on fast and ready-to-serve food, they take less pain in traditional method of cooking and cleaning. Bulk purchases from hyper stores seems to be the trend these days with purchasing becoming more of a once-a-week affair, rather than frequent visits to the neighbourhood market/store/vendor. The popular growing shopping trend among urbanities is purchasing from super markets to hyper stores. 7.2 Trendy Lifestyles

The current urban middle and upper class Indian consumer buying behaviour to a large extent has western influence. There is an increase in positive attitude towards western trends. The Indian consumer has become much more open-minded and experimental in his/her perspective. There is now an exponential growth of western trend reaching the Indian consumer by way of the media and Indians working abroad. Foreign brands have gained wide consumer acceptance in India, they include items such as; Beverages Packed food Ready to eat food Pre-cooked food Canned food Personal care products Audio/video products Garment and apparel Footwear Sportswear Toys Gift items Foreign brands vie increasingly with domestic brands for the growing market in India. Foreign made furniture is well accepted by the Indian consumers. Malaysian, Chinese, Italian furniture are growing in popularity in India. Indian consumers have also developed lifestyles which have emerged from changing attitudes and mind sets; exposure to western influences and a need for self-gratification. Beauty parlours in cities, eateries, designer wear, watches, hi-tech products are a few instances which reflect these changes.

14 B) Explain CRM with suitable examples. Why is it important in modern day business context? Discuss. CUSTOMER RELATIONSHIP MANAGEMENT DEFINITION CRM is a business strategy designed to optimise profitability, revenue, and customer satisfaction. OBJECTIVES OF CRM To provide updated information: Providing product information and technological assistance with accessibility for 24 hours a day and seven days a week. To customise Strategies: Identifying the difference in qualities perceived by different customers and then designing a suitable service strategy for each customer to realise their expectations. To anticipate problems: CRM helps to identify potential problems quickly, even before they occur. To prompt follow-up: Providing a fast mechanism for managing follow-up sales calls to assess post-purchase problems, repurchase probabilities, repurchase times, frequencies, etc. To establish problem solving mechanism: Providing a fast mechanism for handling problems and complaints. To assess customer interests: Using internet cookies to track customer interests. To integrate functional system: Integrating other functional systems and thereby providing accounting and production information to customers when they need it.

CRM and other industries

Although the cultures and working practices of other organizations may be quite different from those of HEIs and FECs, it can still be useful to look at how they have implemented CRM and the benefits they have obtained. The examples that follow are taken from the banking, airline, hotel and amusement park industries. The Banking Industry Banks are a long way along the CRM route, recognizing the need to target customers effectively and to identify the value of particular customers and the investment needed to gain their loyalty. They use technology to collate accurate, up-to-date information on customers to target products and services to coincide with the life-stages of customers. to provide greater customer access to products and services (24-hour banking)

They need effective processes: to ensure transactions are safe to reassure customers that their transactions are safe to consolidate multiple records for individual customers to alleviate distress when errors do occur eg the AIB banking group assigns to groups of customers designated Relationship Managers to deal with grievances and to provide a more personalized service The Airline Industry The airline industry is extremely competitive and while safety record, image, price and flight convenience are undoubtedly influences on passenger behaviour, it is service that is the real differentiator (Enterprise Information, 2005). The airline industry uses technology to allow customers to find out travel information such as flight availability and cost of flight. To allow customers to book flights online To allow customers to check-in online at any time and from anywhere. To collect information about individual customers preferences and buying behavior To identify profitable customers To build loyalty by rewarding profitable customers To increase sales The processes that allow the airlines to implement all of this are only apparent to the customer when technology fails! The people element may become apparent when the technology and the processes fail! So, for example, when Terminal 5 failed, blame was placed on Technical errors (technology) Mechanical failures (technology) Lack of system testing (processes) Poor communication(processes) Complacency (people) Refusal to listen (people) Lack of training (process) Inadequate contingency plans (process) The Hotel Industry Customer service has always been a high priority for the hotel industry. The hotel industry uses technology To Develop sophisticated websites that allow potential customers to view their facilities To enable online booking To collect information about individual customers preferences To use the data they have collected to offer loyalty packages to profitable customers. Processes have to be in place to ensure that all staff from manager to receptionist, from kitchen staff to cleaner all have the necessary training and information to provide a seamless, consistent and individualized service to their customers.

The people element becomes apparent when individual members of staff fail to show commitment to the processes designed. Commitment can be encouraged by other processes that enable staff to feel valued and rewarded. This is less easy to overcome, however, when there is a conflict of interest, as can occur between franchiser, management company and owner of hotel. 15 A) What are the key strategic issues faced by traditional bricks-and-mortar retailer such as Wal-Mart, Big Bazaar and Reliance fresh when they go online to sell products? Discuss in detail.

15B) Explain Marketing Research Process in detail with suitable examples.

MARKET RESEARCH PROCESS: Marketing research process consists of a number of closely related activities as shown, Identifying and defining research problem

Extensive literature survey Formulation of hypothesis Preparing the research design Determining sample design Collecting data Execution of the project Analysis of data Testing of hypothesis Generalization and interpretation Preparation of the report

INDENTIFICATION AND DEFINING RESEARCH PROBLEM: The initial step in the research process is the identification of the problem or opportunity. A research problem refers to some difficulty which the researcher experiences in the context of either a theoretical or conceptual framework and wants a solution for it. A research problem exists when the individual or the group having one or more desired outcomes are confronted with two or more courses of action that have some but not equal efficiency for the desired objectives and are in doubt which course of action is best. EXTENSIVE LITERATURE REVIEW: Once the problem is formulated, the next step is to write down a brief summary. For this the researcher should undertake extensive literature survey connected with the problem. For this purpose, the abstracting and indexing journals and published or unpublished bibliographies are the first place to go to. Academic journals, conference proceedings, government reports, books etc. FORMULATION OF HYPOTHESIS: Now the researcher should state in clear terms the working hypothesis. Working hypothesis is tentative assumption made in order to draw out and test its logical or empirical consequences. As such the manner in which research hypothesis are developed is particularly important since they provide the focal point for research in hand because it has to be tested. The role of the hypothesis is to guide the researcher by delimiting the area of research and keep him on the right track. PREPARING THE RESEARCH DESIGN: Research design is the conceptual structure within which research should be conducted. A research design specifies the methods and procedures for conducting a particular study. The researcher should specify the approach he intends to use with respect to the proposed study. The function of research design is to provide for the collection of relevant evidence with minimal expenditure of effort, time and money. Research designs are grouped into three categories, Exploratory research: An exploratory research focuses on the discovery of ideas and is generally based on secondary data. It is primary investigation, which does not have rigid design. Descriptive research: A descriptive study is undertaken when the researcher wants to know the characteristics of certain groups such as age, sex, education level, income, occupation, etc. Casual research: A casual research is undertaken when the researcher is interested in knowing the cause and effect relationship between two or more variables. DETERMINING SAMPLE DESIGN: All the items under construction in any field of inquiry constitute a universe or population. A complete enumeration of all the items in population is known as a census inquiry. In such an inquiry when all the items are covered no element of chance is left and highest accuracy is obtained. COLLECTING DATA: the next step is to determine the sources of data to be used. The researcher has to decide whether he has to collect primary data or depend exclusively on secondary data. Sometimes, the research study is based on both secondary and primary data. EXECUTION OF THE PROJECT: The researcher should see that the project is executed in a systematic manner and in time. If the survey is to be conducted by means of structured questionnaires, data can be readily machine-processed. In such a situation, questions as well as the possible answers may be coded. If the data are to be collected through interviews, arrangements should be made for proper selection and training of interview.

ANALYSIS OF DATA: After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical information. TESTING OF HYPOTHESIS: After analyzing the data the researchers have to test the hypothesis, various tests, such as chi-square, t-test, f-test have been developed by statisticians for the purpose. The hypothesis may be tested through the use of one or more of such tests, depending upon the nature and objects of research inquiry. GENERALIZATION AND INTERPRETATION: If a hypothesis is tested and upheld several times, it may be possible for the researcher to arrive at generalization. If the researcher had no hypothesis to start with, he might seek to explain his findings on the basis of some theory. PREPARATION OF REPORT: Report writing needs some skill which can be developed with practice. There should be objectivity, coherence, clarity in the presentation of report. Report should be written in concise and objective style in simple language avoiding vague expressions such as it seems, there may be, and the like.

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