ASSIGNMENTS

ADL 01 : MARKETING MANAGEMENT

Assignment A
1. Define marketing, distinguish between selling marketing. What are the four components of marketing mix, briefly explain? Marketing is a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others. It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marketing is used to create the customer, to keep the customer and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. The evolution of marketing was caused due to mature markets and overcapacities in the last decades. Companies then shifted the focus from production more to the customer in order to stay profitable. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. Difference between Selling and Marketing: Profits are directly related to sales. Increased sales at competitive rates ensure increased earning. A sale is a process, by which goods and services flow from producers to consumers. It is an activity of distributing goods. Marketing on the other hand is a comprehensive term, which includes in itself, selling merchandising and distribution. Merchandising is an internal planning regarding production of commodities of right color; size, shape, standard, quantity, and also at the appropriate time. Distribution is market coverage which includes various channels of distribution.

The ultimate end of both selling and marketing is to maximize profit by promoting sales. Ordinarily both these terms carry the same meaning, but modern thinkers distinguish between the two terms as under: Distinction between marketing and selling: Marketing Marketing means all customer's wants satisfying efforts concerning with planning, pricing, promoting product, pricing, promoting product and services.

Marketing accords importance consumers wants effectively.

to

the

satisfaction

of

Marketing in its initial stage decides, what the consumers want. Secondly, it decides how the commodity can be profitably produced and finally delivered to consumers for satisfying their needs. Marketing has to take into consideration both the internal and external factors.

Efforts are buyers oriented and emphasize the satisfaction of the needs of buyers effectively.

If refers to integrated approach towards achieving long term objectives.

Profit is sought by ensuring customers satisfaction.

Marketing is a comprehensive term, which includes selling, advertising and also the distribution of goods. Selling Selling is the transfer of the ownership and possession of the goods to the purchases.

Selling emphasizes the products.

Commodities are produced and after wards efforts are made for their profitable selling. Selling is concerned with the internal considerations regarding production and distribution of goods. It is narrower in scope.

Efforts are seller oriented and emphasize sellers needs. It refers to piece mental approach to achieve short term Profit is sought by ensuring higher sales volume. part of marketing and thus not a

goals.

Selling is the comprehensive term.

The four components of marketing mix which are also known as the Four P's, the marketing mix elements are price, place, product, and promotion. Product: The Product area is concerned with developing the right "product" for the target market. This offering may involve a physical good, a service, or a blend of both. Keep in mind that Product is not limited to "physical good". Place. Place is concerned with all the decisions involved in getting the "right" product to the target market's Place. A product isn't much good to a customer if it isn't available when and where it's wanted. A product reaches customers through a channel of distribution. (A channel of distribution is any series of firms - or individuals - from producer to final user or consumer.) Promotion: The third P - is concerned with telling the target market about the "right" product. Promotion includes personal selling, mass selling, and sales promotion. It is the marketing manager's job to blend these methods. Price: In addition to developing the right Product, Place, and Promotion, marketing managers must also decide the right Price. In setting a price, they must consider the kind of competition in the target market - and the cost of the whole marketing mix. They must also try to estimate customer reaction to possible prices. 2. How would you price a new product (say a mix) what options you would employ to generate quick revenue? Charge too much and it won't sell a problem that can be fixed relatively easily by reducing the price. Charging too little is far more dangerous: a company not only forgoes significant revenues and profits but also fixes the product's market value position at a low level. And as companies have found time and again, once prices hit the market it is difficult, even impossible, to raise them. In our experience, 80 to 90 percent of all poorly chosen prices are too low.

Companies consistently undercharge for products despite spending millions or even billions of dollars to develop or acquire them. It is true that businesses and private consumers alike are demanding more for less; the prices of personal computers, for example, have been pushed downward despite their higher processor speeds and additional memory. Global competition, increased pricing transparency, and lower barriers to entry in many of the most attractive industries have contributed to the trend. But these are not the only problems. Many companies want to make a quick grab for market share or return on investment, and with high prices both objectives can be harder to achieve. It is difficult to know the "market price" when you are making a new market. Charge too little and you leave profit on the table. Charge too much and you may not have the cash flow to sustain yourself. This is why I am a big fan of "soft openings." I like a chance to feel things out with a small group of customers rather than explode with business from day one and not be ready to handle it. You only get one chance to make a first impression. There are two broad methods of pricing demand-based and competitionbased pricing. Neither of them suits a new product. Demand-based pricing is out of question for such products, as adequate data is not available in respect of these products. Competition-based pricing is also out of question, because the product is pioneer and competition will only be a later phenomenon, when me-too products enter the scene. The next alternative to be considered is cost plus pricing. Here too, there is difficulty in respect of new products. In several cases, the actual costs of new products are difficult to measure. Allocation of overheads to the new product, for example, is done usually on the basis of untested assumptions. Similarly, R & D expenses would have been shared by several new product ideas and apportioning it to a particular product may become difficult. Even if the cost of the new product can be accurately measured, cost plus pricing or breakeven pricing cannot be straightaway adopted because no information is available regarding the marketability/possible sales volume of the product. In fact, such imponderables have prompted marketing experts to comment that new product pricing has to be done in a vacuum. Obviously, new product pricing cannot be a matter of formula. The subject needs a special approach. Basically, the pricing here should evolve out of: 1. The firms requirements in going for the new product 2. The extent of newness of the product (i.e. the nature of the product) Firms Requirements in Pursuing the New Product

The firms requirement in going for new products can be one of the following: To be a real innovator and to earn the rewards associated with innovation To exploit a market need that is coming to the fore To expand the product mix to ensure steady growth over the long term There are companies the have a thirst for innovation. Usually, they are also very ambitious in the matter of rewards. They are prepared to shoulder the risks associated with product innovations, as they know that without undertaking such risks, they cannot gain big rewards. New product development is second nature of such companies and they are constantly at this game. The second category of companies goes in for a new product, when they spotted a felt need for it in the market. In the third category, the compulsion for going in for a new product comes out of the companys desire to keep expanding its product mix. The company does not want to limit itself with existing product/product lines. Such a company will nurture a new product idea that fits in with the basic requirement of product mix expansion. Such companies are generally more conservative in their approach to new product development relative to the other two categories. Their policy is one of limited risk. They will take up only those product ideas that, in their estimate, are sure to fetch commercial success. Extent of Newness of the Product The extent of newness and the nature of the new product is the second major feature that will influence the pricing strategy. We can think of several types of new products. Given below is a sample list of the possibilities: A totally new item (new to the world) A new item to a particular society A new item to the particular firm A new item to the particular firm, in the particular market segment A low value item for the customer A high value item for the customer A low priority item for the customer A high priority item for the customer A luxury product A convenience product

A product that can meet a currently felt need A product that will serve a created desire

The nature of the product combined with the firms requirement in going for the product should guide the pricing strategy. For example, when a company in the category of innovators and leaders brings out a new luxury product, intended for the affluent consumer, serving a created desire, it can fix the price quite high. The company knows that its product is not very price sensitive. On the other extreme, if a company with the compulsion of expanding its product mix goes in for a new product, say a convenience product meant for the medium class consumer, it will do well to keep the price low, with the goal of attracting trial purchase and gradually building up the market for the product. It may take care to see that the costs are covered, but it is not eager to take home a big profit from the new product through a high price. It may opt to earn the required profit through bigger volumes at lower prices. This leads us to the two broad strategy alternatives available in new product pricing. They are: Skimming pricing Penetration pricing Skimming pricing In skimming pricing, the new product is priced high and the cream of the market is skimmed by concentrating on those segments that are not price sensitive. Such high prices will fetch the firm substantial initial incomes, which it can plough for the further market development and promotion. Through this method, the firm also recovers a substantial portion of its development cost. Later on, the firm may bring down the prices, when it enters mass markets, which are more price sensitive. Skimming pricing, however, cannot be employed if the product cannot command the patronage of an affluent, non-price sensitive, market segment. The skimming strategy can prove ideal for really new and distinctive products on account of the following factors: The quantity of the product that can be sold is less affected by price in the early stages, especially when the product has some novelty. In skimming, the product is tapping only segments, which in case, do not bother much about price. And, such tapping will not be possible at a later stage in the life cycle. By skimming, the product is fetching big funds, which could be used for market development.

The skimming pricing can be a way to feel and figure out the demand for the product. And, by starting at a high price, it is always possible to come down later, when the situation warrants. Penetration Pricing The skimming strategy cannot suit all new product contexts. When the new product is likely to be highly price sensitive and when there is no elite market for it, penetration pricing will be the option. As the very name implies, the intention in this strategy is to penetrate a broad market through low prices. The income is generated by sales spread over large markets; the large volume facilitates substantial economies in unit cost of production and marketing; and the cycle can continue. The strategy helps to establish the product in the market. Cost Data in Respect of New Products An understanding of new product costing is essential at this juncture. Whether the new product pricing is done on cost plus basis or not, it is essential for the firm to have relevant data about the costs of the new product. Quite often, companies mess up the cost working in respect of new products because such costs are often difficult to estimate. Costing of a new product is a particularly tricky affair for an ongoing multi-product company. The company has to use judgment more than techniques in allocating the overheads. 3. Define consumer behavior and describe its relation in purchase decision making? Consumer behavior referred to as the study of when, why, how, where and what people do or do not buy product It blends elements from psychology, sociology, social, anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and

one-to-one marketing. Social functions can be categorized into social choice and welfare functions. Each method for vote counting is assumed as a social function but if Arrows possibility theorem is used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonocity, unanimity, homogeneity and weak and strong Pareto optimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer Belch and Belch define consumer behavior as 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'.' 4. Marketing is a process; explain with suitable examples and flow chart the concept of marketing process? Marketing process: Marketing process consists of: 1. Analyzing marketing opportunities. 2. Developing marketing strategies. 3. Planning marketing programs The strategic plan defines the overall mission and objectives. Within each business unit, marketing plays an important role in helping to accomplish the overall strategic objective. Marketing strategy is the complete and unbeatable plan, designed specifically for attaining the marketing objective of the firm wants to achieve; the marketing strategy provides a design for achieving them. Marketing process includes: 1. What product to serve: Before entering into the field of marketing one has to decide what product it has to offer to the customer. On the basis of this only further marketing strategies will be based upon. 2. What market segments to serve: The business unit has to clarify that what market segments it will serve and what product offers it will make. In other words it has to state its product market scope. Strategy should decide whom to serve and whom to exclude. E.g.

3.

4.

5.

6.

7.

when ICICI bank commenced its activities, it decided to serve exclusively the urban markets of India. It sets up offices in the major cities of India. It also decided to offer value added banking products. Its target market consisted of corporate and High Net worth Individuals. It chooses not to target the rural market. Whom to compete and whom to avoid: The firm has to reckon who the major players in the industry are & and against whom and in what segment it will compete. It also has to decide which players it would choose to ignore. E.g. when the US car major Ford, entered in the Indian car market, Maruti was the dominant player here, with its Maruti 800 model holding a 70% share. Ford decided to cultivate a higher priced, semi luxury segments, with models like Ford Ikon. Ford was thus opting to compete with the players like GM. GM was operating in the semi luxury segments like Opel Astra & Opel Corsa. Ford chose not to compete with Maruti in the small compact car segments. So whom to compete with and whom to avoid is vital pat of marketing process. On what differentiation strength to compete: The next issue is: On what distinctive capability will the firm compete in its industry? This involves determining the price strategy, product quality; development of the product superiority, making the product accessible by the target customer at the right time and at the right place. Whenever the product is needed it should be readily available. In the absence of such strategy the product will loose its market. Create customer awareness: This is another important step of marketing process whereby a customer should me made aware about the use of the product. This is important for the customer to know because if a customer uses a product for which it is not meant for, he will never be satisfied. A customer should be educated for the same. Transfer of Ownership: Marketing is not complete without any sale, i.e. transfer of ownership. Once an ownership is transferred then the process is complete. The customer will not realize the taste of using the goods until and unless the owner ship of the product is transferred to him. Follow up & Feedback: once a product is put to use the, and the customer was told the use of the product properly. Then it becomes necessary to take a regular feedback and make a regular follow up with the customer. This will help the concern to make the necessary improvements in the product, as suggested by the customer to suit the requirements of the consumer. Also this technique will help the concern the process of relationship maintenance of the concern with the prospective buyers. Here if the consumer is satisfied, his references will fetch more business for the concern, which may result in the volume of sales.

5. Write short notes a) Marketing concept: It is a fundamental idea of marketing that organizations survive and prosper through meeting the needs and wants of customers. This important perspective is commonly known as the marketing concept. The marketing concept is about matching a company's capabilities with customer wants. This matching process takes place in what is called the marketing environment. Businesses do not undertake marketing activities alone. They face threats from competitors, and changes in the political, economic, social and technological environment. All these factors have to be taken into account as a business tries to match its capabilities with the needs and wants of its target customers. An organization that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. Success is dependent on satisfying customer needs. b) Consumer buying motives: Buying motive is all the induced desires and considerations, which include a buyer to purchase a given product. To a great extent the buying motive of a customer depends upon the purchasing power of the customer. c) Marker up price: Mark-up pricing refers to the pricing method in which the selling price of the product is fixed by adding a margin to its cost price. The mark-ups may vary depending on the nature of the product and the market. Usually, the higher the value of the product (unit cost of the product) the larger is the mark-up and viceversa. Again, the slower the turn around of the product, the larger is the mark-up and vice-versa. Mark-up pricing proceeds on the assumption that demand cannot be known accurately, but costs are known. A reasonable mark-up is added to the costs. And the price as well as the mark-up is adjusted by trial and error. The objective is to maximize profits in the short and medium run without sales being sacrificed due to excessive price. Usually, distributive trade and marketing firms, who do not have any manufacturing of their own, prefer this pricing method.

Assignment B
1. It is often said that middlemen are unnecessary, they cause price inflation, do you agree to this statement, explain with suitable examples? Manufacturers normally use intermediaries for taking their products to the users. The intermediaries bear a variety of names. List below presents a list of the commonly used names: Types of Marketing Intermediaries Sole-selling agent Marketer C&F agents (CFAs) Redistribution stockiest Stockiest/Distributor/Wholesaler Semi-wholesaler Retailer/dealer Broker Franchisees Authorized representatives Commission agents Jobbers All such intermediaries constitute the marketing channel. The manufacturers branch offices, depots, warehouses and showrooms too form part of the marketing channel. Where the firm uses institutional channels like chain stores, super markets, etc., they too form part of the marketing channel of the firm. Channels play a pivotal role in marketing; they perform a number of vital distribution functions. Their importance emanates from the functions performed by them. Firms rely on the marketing channels for generating customer satisfaction and for achieving differentiation over competitors. Channels are thus a vital source of competitive advantage for the firm. Channels Acquire Their Importance by Their Functions The foregoing elaborations not only explain the importance of marketing channels, but also clarify the fact that the channels acquire their importance by virtue of the functions they perform. Channel Functions cannot be eliminated Sometimes, firms tend to think that channels could be easily dispensed with and that the firm would be better off doing so. The firms assume that

by eliminating the channels, they can eliminate the channel costs. This is erroneous thinking. The inherent assumption in this thinking is that by eliminating the channels, they can escape the functions that the channels perform. The fact is that even where channels are eliminated, the channel functions as such are not eliminated; they are merely transferred from the channels to the manufacturer; and the costs thereof are also just transferred, not eliminated. Sometimes, the firms assume that while channels as a whole cannot be eliminated, a particular tier in the channel can be readily eliminated and the firm would be ipso facto better off with such elimination. Here too, if the assumption is based on the logic that with the elimination of the particular tier, the functions performed by that tier can be eliminated, then the firm will soon realize that it has committed a mistake. For here too, the alternative arrangement may not eliminate the functions performed by that particular tier. What is likely to happen is a transfer of the functions from the given tier to another one in the channel, backward or forward. So, it will be wrong to assume that the elimination of the tier will ipso facto result in savings to the firm. It depends on the circumstances. Channels/middlemen are no parasites: The problem arises due to confusion in thinking. The firms concerned might be viewing channels as mere middlemen, with a negative connotation attached to the term. And, they might consider the channels as parasites. No wonder then, they think that they would be better off by dispensing with the channel, in part or full. It needs to be emphasized that channels/middlemen are no parasites. They are an essential and valuable part of the firms marketing activity. Manufacturers use them as there is economic sense in doing so, and all things considered, using them improves distribution efficiency. There is not to suggest that under no circumstances can a tier in the channel be eliminated and that there would be no advantage at all in doing so. In some cases, it certainly is sensible to eliminate one particular tier in the channel and the firm might be better off doing so. It has to be conceded that there are always alternative methods of performing a set of channel functions and a firm may be better off by following one method in preference to another. But, it depends on the circumstances of the case. The firm has to analyze and find out whether the concerned distribution functions are performed more cost-effectively by eliminating the tier and shifting the functions backward or forward to another tier in the channel, or by keeping the tier alive. As a general rule, it can be said that where the number of tiers are far too many, the elimination of a tier would be advantageous. The test question: The test question is: Are the functions duplicated in wasteful manner? Sometimes, duplication of channel functions does take

place in a channel system; the same function being performed by more than one tier. Firms often presume that in such cases, it is beneficial to dispense with one of the tiers. This is again incorrect thinking. Duplication of functions by different tiers need not automatically imply inefficiency, or waste. In many cases, such duplication may be essential for achieving the desired service level in distribution. For example, inventories may have to be kept at different levels/tiers of the channel so that the flow of products is smooth and customers get the products at the time and place of their choice. In such cases, duplication is essential and beneficial. The firm, therefore, has to find out whether duplication is wasteful. If it serves the interests of the firm, it is not wasteful. So based on the facts of the case, the firm should find out how costs are reduced, efficiency increased and waste eliminated. 2. Define promotion; explain with suitable examples the four types of promotion adopted by consumer product industry? Sales Promotion is another important component of the marketing communications mix. It is essentially a direct and immediate inducement. It adds extra value to the product and hence prompts the dealer/consumer to buy the product. The Committee on Definitions of the American Marketing Association defines Sales Promotion as: In a specific sense, Sales Promotion includes those sales activities that supplement both personal selling and advertising, and coordinate them and make them effective, such as displays, shows, demonstrations and other nonrecurrent selling efforts not in the ordinary routine. IMPORTANCE OF SALES PROMOTION In a competitive market, sales promotion comes handy to a marketer, to solve several of his short-term hurdles. Short term because, the impact sales promotion measures are not that durable and lasting like the results obtained through advertising and personal selling. Sales promotion, by and large, is understood and practiced as a catalyst, and a supporting facility to advertising and personal selling. Types of promotions adopted by consumer product industry: Heavy cash return: Nokia Mobile: Nokia mobile had launched an attractive offer of heavy cash return upto Rs. 1 lakh on mobile purchase. It was prescribed as, if you buy any selected Nokia mobile, you can get cash back on that purchase and that was upto Rs. 1 lakh. Discounts, Price Off

Hawkins: Hawkins pressure cookers have come up with several sales promotion programmes during the last few years. In one of their programmes, Hawkins announced an attractive price reduction: p to Rs 150 off on a new Hawkins in exchange for any old pressure cooker. Free gift hampers: Samsung, LG, and Whirlpool: These companies have launched their sale promotion campaign by giving free gift hampers which includes microwave oven, DVD packs, watches etc. on purchase of any product of these companies and this scheme was limited for festive season only. Exchange Offers Some of the companies have launched their exchange offers to their consumers that they can bring their old product in running condition and exchange it with new product of the company and company will deduct certain amount from the brand new product. 3. The right marketing mix can be adopted only after segmentation. Elucidate with examples the basis of segmentation as applied in television marketing? Market Segmentation: The division of a market into different homogeneous groups of consumers is known as market segmentation. Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs. Not all elements of the marketing mix are necessarily changed from one segment to the next. For example, in some cases only the promotional campaigns would differ. A market segment should be: measurable, accessible by communication and distribution channels different in its response to a marketing mix durable (not changing too quickly) substantial enough to be profitable. A market can be segmented by various bases, and industrial markets are segmented somewhat differently from consumer markets, as described below. Consumer Market Segmentation: A basis for segmentation is a factor that varies among groups within a market, but that is consistent within groups. One can identify four primary bases on which to segment a consumer market: Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate. Demographic segmentation is based on variables such as age, gender, ethnicity, education, occupation, income, and family status.

Psycho graphic segmentation is based on variables such as values, attitudes, and lifestyle. Behavioral segmentation is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought. The optimal bases on which to segment the market depend on the particular situation and are determined by marketing research, market trends, and managerial judgment. Business Market Segmentation: While many of the consumer market segmentation bases can be applied to businesses and organizations, the different nature of business markets often leads to segmentation on the following bases: Geographic segmentation - based on regional variables such as customer concentration, regional industrial growth rate, and international macroeconomic factors. Customer type - based on factors such as the size of the organization, its industry, position in the value chain, etc. Buyer behavior - based on factors such as loyalty to suppliers, usage patterns, and order size. Profiling the Segments: The identified market segments are summarized by profiles, often given a descriptive name. From these profiles, the attractiveness of each segment can be evaluated and a target market segment selected. 4. What do you understand by branding? Is quality important than branding? A brand is defined as a name, term, symbol, design, or a combination of them, which is intended to identify the goods and services of one seller and to differentiate them from those of competitors. A trademark is a brand that has been given legal protection, thus ensuring its use exclusively by one seller. Trademark is a legal term, while brand is a marketing term. In marketing, the brand name is a major selling tool and one of the most important components of the total product personality. We are, in fact, living in an age of brands. The intensive brand promotion undertaken by marketers of various products have made consumers extremely brandconscious. These days no consumer asks for just toothpaste. He specifically asks for Colgate, or Close-Up, or some other brand. No woman asks for bath soap, she wants her brand. Similarly, a woman who wants a steel cupboard may ask for Godrej, without even thinking about several other brands of cupboards that are available. The brand name is

the mantle the product puts on. The brand image, developed through advertising and other promotional measures, creates strong brand awareness and loyalty among consumers. Corporations spend long years, lot of money and effort to build brands. A good brand is an invaluable asset for the owner. It is an accepted fact that a firm cannot attain a good and lasting reputation through marketing flair alone, only through quality products, can it attain such reputation. Product quality is a vital area as it decides the fate of the firm in the marketplace. Several firms have established themselves as business leaders through the quality of their products. Strict control on product quality and insistence on zero-defect products have made their products globally accepted. A successful product strategy will undoubtedly need reliable, wellengineered quality products. Marketing has to set the quality standards for the firms products. Constantly verifying these standards and upgrading them in tune with the needs and growing sophistication of the market is a crucial task in product management. In fact, product quality has become a very significant plank for product differentiation. List below explain the basic dos an organization has to follow in order to ensure product quality: The firm should have a policy on quality. It should make clear to every level in the organization its aims and objectives on the quality front. Honda of Japan writes down its policy thus: Buy no bad parts, make no bad parts, ship no bad parts. The firm should develop the product design that can deliver an error-free product. It should identify the competitors standards of quality and aim at excelling them. The international specifications on quality for the given product have to be reckoned with. The firm should find out the customers tolerance level on the quality front. Keeping these factors in view, the firm has to decide its quality standards, develop detailed product specifications and made these standards known to design, production, engineering, quality control and marketing groups. It should enforce these standards. While launching new products, the firm has to ensure that they are not rushed to the market without proper quality tests. MRF claims its tyres are tested under the tough Himalyan terrains as well as in the worst rural tracks of India.

 In the case of durables, samples under use for a long time should be studied; used samples throw light on the quality/operational problems the product has undergone. Independent quality assurance groups should oversee the design, engineering and production and testing stages. The firm should also ensure vendor quality. Since raw materials, accessories and components decide the ultimate quality of a finished product, quality control has to be ensured at vendor level. Quality has a cost; but it pays back: Many progressive firms have moved up to the zero defect level in their products because they know that the rewards coming through the quality route are lasting and substantial. At the other extreme, there are many companies who believe that the cost of ensuring quality is too high and they allow wide relaxations on the quality front. Lessons from the market reveal that these companies base their arguments on the wrong economics. Quality assurance has a cost, but it is a cost that can be realized back in terms of long-term business prosperity and goodwill. 5. How will you go about describing a marketing plan for a consumer product, explain with the help of marketing plan process? A good marketing plan helps your organization to define its goals and develop a series of activities to achieve those goals. The key to writing a good marketing plan is to keep it simple when you start, but return often to revise and update your marketing plan. Marketing planning is a complex, cross-functional process. It is made up of a series of interlocking activities and tasks. It should not be a hastily assembled set of programs that are easy or convenient for the organization to carry out. For example, it is very easy to have a marketing communications group design and conduct a series of advertising activities to drive lead generation because the sales teams dont have enough prospects. However, if this lead generation activity is not considered within a broader context of marketing strategies, the outcomes may not yield results of any significance to the firm. It should be understood that in marketing planning should be conceived and executed within a broad corporate or organizational strategic context. Whether youre running a small business or you work in a big company, all businesses have some kind of strategy. In an ideal world, strategies at all levels of the organization should be well articulated and understood. Interpretation of these strategies can then result in realistic, well defined

marketing plans and programs which can be created and acted upon. In some firms, strategies are not fully understood or are misinterpreted, leading to ill conceived marketing plans and programs. In todays competitive marketplace, consumers and businesses have many choices available to them to solve personal or business problems. Organizations can have a greater chance of being successful if they develop deep understanding of markets and the customers within those markets. Successful companies are expert at identifying customer needs in a variety of ways. They just dont ask customers about their problems they observe, probe, and draw inferences from those observations. These successful companies are acutely aware of their competitors and try to figure out, not just how to beat them but how to better satisfy the needs of those customers whose needs they believe are paramount. Market focus, therefore, is critical in the formulation of marketing plans. Deciding who to pursue runs as an undercurrent to all plans and programs. The marketing plan then, is a dynamic document which focuses on bringing marketing strategies to life, serving as a roadmap for carrying out marketing activities and implementing marketing strategies. It is a multi-step process, which considers the following: I. Formulating a strategy of your company or your division and making sure that appropriate linkages are made between company strategy and marketing activity planning. II. Analyzing the environment within which you do business to make sure you consider the marketplace, the industry, competitors, and other influences. III. Carrying out market profiling, enabling you to identify market segment, target customer types, and overall demand. Additionally, analysis of the industry and competitors, coupled with analysis of customer types, enables the creation of demand possibilities and the resulting forecasts. It also allows you to formulate appropriate value propositions, and to position the products key benefits to the target audience, and finally, why a customer would choose your solution versus the competition. and expressing key values and benefits to the target audience IV. The marketing mix, which considers a combination of activities which come together harmoniously, in bringing the product to market and sustaining it while in the market, which includes:

V. VI. VII. VIII. IX.

X.

Deciding on which products meet the need of identified market targets Pricing those products so that the true, competitive value is recognized by the market targets. Defining promotional programs to reach those targets, which can include communications and advertising programs. Creating channels to effectively distribute your products to your target audience. Determining who youll need to work with in successfully bringing the product to market, including sales teams (to make sure that volumes can be attained), Launching new products or product line extensions as needed. Training the sales force to competitively position the product or service. Budgeting of marketing programs so that the appropriate sales goals and corporate strategies can be attained. Executing on the plan - creating marketing project plans, and understanding dependencies on other organizations. Also included are measurements to determine the success of your marketing activities. Identifying risks: As described, all operational elements and project plans need to come together seamlessly, results tracked against performance metrics, and corrective actions taken. Unfortunately, this isnt always the case. This section should be used to articulate the risks and issues that may emerge if deadlines arent met or results arent achieved. The mere mention of these items is only the first step. The real challenge is to define the alternative action plans should a specific condition be encountered Case Study

1. Critically evaluate the communication strategy of Good Knight with reference the facts given in the case. The common Strategy followed by the company is very aggressive and appealing. The brand name of chosen by the company reflects the product benefit. The product name good night verbalizes the reason to buy the product to the consumer. This name not only tells the benefits of product, but also this name is commonly practice in most Indian language. The word good night is commonly spoken in all Indian family so its mass appealing. The company chooses the daily newspaper to show their ads.

The ads were printed on newspaper like The Tomes of India, Malayalam Manorama Sunday Midday etc. Which were biggest and best selling newspaper in India In this way their ads reach to the target audience very rapidly and quickly. So we can conclude that there common strategy was very aggressive and mass appealing. 2. At the time of this case preparation, Good Knight was probably the only production in the EMD with mat category. As new international competitions with known brand names enter the market, what changes, if any, would you suggest in the marketing communication strategy of Good Knight? As new international competition has come into the market, I would like to give some suggestion to the company in order to boost sales and increase the profit and market share. Following are the few suggestion: In order to capture larger market share, the company should incase ads promotion on T.V, Radio and Newspapers etc. Nation wide promotion of the product should be done in order to get larger target audience. Rural marketing should be done because now many if the villages get the electricity. As marketing is a creative field, so company should keep changing their ads and bring more creative touch in ads. This will keep the consumer interest alive. Company should offer more discount scheme to the customer like replacement of the old/non-working EMD machine.

Assignment C
1. Marketing refers to: d) Understanding the needs of consumers and delivering them 2. A survival pricing objectives aims to: b) Selling at break even cost. 3. The first stage in product development is d) Idea generation 4. Warehousing and physical distribution functions are c) Synergistically related activities which must be closely coordinated. 5. Marketing concept is best illustrated by which of the following marketing system goals: a) Maximizing customer satisfaction 6. In consumer decision marketing specifier is one who: a) Is one who is user of product.

7. Under globalization of Trade strategies, the marketer will have to adopt a) Product differentiation. 8. Product life cycle means that a) Product lives around the 4 stages of cycle 9. In DELPHI method of marketing research the opinion of b) The opinion of experts is sought. 10. Premium pricing refers to b) Setting a price above competitive price Say yes or no 11. TQM refer to totally quantity management Yes 12. Marketing means pushing the products in the market No 13. Penetration pricing means selling at high price initially No 14. Wholesalers sell products to all types of consumers No 15. Direct marketing means selling to ultimate consumer Yes 16. Objective of distribution of products it to restrict availability of products No 17. Price is no consideration of the seller delivers high quality products Yes 18. CRM helps to retain consumers Yes 19. Marketing mix means people, policy, partnership and politics. No 20. Missionary sales people do not ask for salary Yes Write short answers in just five sentences 21. List out 5 stages in consumer decision making process. Researchers process: have identified eight stages in consumer decision-making Problem Recognition (Need Recognition) Awareness Comprehension (Evaluation) Attitude Legitimization Trial Adoption

Post-Purchase Behavior

22. Write a simple definition of marketing and selling. Marketing refers to understanding the needs of the consumer and delivering them. Marketing views the entire business as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs. Selling merely concerns itself with the tricks and techniques of getting the customers to exchange their cash for the companys products; it does not bother about the value satisfaction that the exchange is all about. 23. List out 5 benefits of advertising a product. Benefits of advertising: Generating awareness Reminding buyers to buy Changing attitudes about the use of the product form Changing perceptions about the importance of brand attributes Changing beliefs about brands Reinforcing attitudes Building corporate and product-line image Obtaining a direct response 24. Give 5 examples each of consumer, consumer durables and industrial products. Consumers: Innovators Early adopters Early majority Late majority Laggards Consumer durables: Television Refrigerator Air conditioner Washing machine VCD Player Industrial products: Petrol Diesel Kerosene

Explosives Certain industrial chemicals

25. List out 5 functions performed by whole sellers in consumer product industry. 26. List out 5 function of packaging for cosmetic products. Protection of the environment, particularly in the case of hazardous products: good packaging is a guarantee for the health and safety of the user; Diversification and portioning: these functions mean a product can be adapted according to the users preferences, habits and family situation; Storage and transport: packaging enables a product easily to traverse the links in the logistical chain; Communication of information on the packaged product and on its utilization: trademarks, composition, volume and weight, instructions for use, information on health, safety and the environment; Various functions such as anti-theft measures and ease of use, such as ease of opening and the ability to re-close after use,. 27. Give 5 examples of family brands in consumer products. Red Label Tea, Lux, Rin, Close up, Parle-G 28. List out the 5 stages in new product development. Five stages in new production development are: Reaching market faster Creating multiple option Killing non-viable projects in early stage Developing high quality ideas 29. Give 5 reasons why new products fall. Reasons for product failure: 1: - Faulty product Idea. 2: - Distribution Problem. 3: - Unrealistic pricing. 4: - Week promotional activity. 5: - Poor quality Product. 30. What are the four stages in product life cycle.

Five stages in Product Life Cycle: Introduction Growth Maturity Decline Innovation Differentiate between the following 31. Product diversification and product differentiation Product Diversification: Product Diversification means increasing the product line length. Most firms start with just one product line and one or two products in that line. Over the years, the line grows, as the firm keeps adding more and more products/brands to the line to capture new marketing opportunities. More product lines also enter the scene, as the firm decides to expand to more new businesses. It is a direct outcome of the long-term corporate growth strategy of the firm handled at the corporate level. Line stretching is a measure firms undertake frequently in product management. The aim is to enter a new price slot and a new market segment, which is not covered by the existing offers of the firm. Product Differentiation: The differentiation route to strategy revolves around aspects other than price. It works on the principle that a firm can make its own offer distinctive from all competing offers and win through the distinctiveness. And, a firm adopting such route can price its product on the perceived value of the attributes of the offer and not necessarily on competition-parity basis. The differentiation route is a more dynamic and powerful route in competitive strategy. Most business battles are fought on the strength of differentiation rather than price. The major temptation as well as benefit in differentiation strategy is that it allows a firm to move away from the disadvantages of a wholly price-based fight. In other words, differentiation allows a firm the flexibility for fighting on the non-price front, on the other strength of the uniqueness and specialty of its offer. Differentiation, therefore, is a crucial option for a firm in its search for a rewarding competitive strategy. 32. Marketing and selling Marketing is a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others. It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return

Selling is trying to make sales by persuading someone to buy one's product or service. From a management viewpoint it is thought of as a part of marketing although the skills required are different. Sales often forms a separate grouping in a corporate structure, employing separate specialist operatives known as salesmen (singular: salesman). Selling is considered by many to be a sort of persuading "art". Contrary to popular belief, the methodological approach of selling refers to a systematic process of repetitive and measurable milestones, by which a salesman relates his or her 33. Presentation price and skimming price. Skimming Price: In skimming pricing, the new product is priced high and the cream of the market is skimmed by concentrating on those segments that are not price sensitive. Such high price will fetch the firm substantial initial incomes, which it can plough in for further market development and promotion. Through this method, the firm also recovers a substantial potion of its development cost. Later on, the firm may bring down the prices, when it enters mass markets, which are more price-sensitive. Skimming pricing, however, cannot be employed if the product cannot command the patronage of an affluent, non-price sensitive, marketsegment. Penetration Price: The skimming strategy cannot suit all new product contexts. When the new product is likely to be highly price sensitive and when there is no elite market for it, penetration pricing will be the option. As the very name implies, the intention in this strategy is to penetrate a broad market through low prices. The income is generated by sales spread over large markets; the large volumes facilitate substantial economies in unit cost of production and marketing; and the cycle can continue. The strategy helps to establish the product in the market. 34. Individual consumer and industrial consumer Individual Consumer: Individual consumer buys things for his own personal and family consumption. Industrial Consumer: Industrial buyer is a commercial buyer who buys things for manufacturing other products, or for reselling, or for use in the running of his enterprise. 35. Vertical marketing and horizontal marketing Horizontal Marketing: When two companies producing different products jointly market their products. Sometimes horizontal marketing is referred to as symbiotic marketing.

Vertical Marketing: Vertical marketing focuses on developing solutions to user problems within specific industries. In contrast, horizontal marketing provides generic one-size-fits-all offerings. 36. Packaging and packing Packaging: Packaging is a part of the core product, which cannot be a choice. E.g. packaged drinking water or packaged edible oil, milk and etc. Packing: Packing is an augmented activity that adds value to the product. E.g. packing a soap or a utensil or many such products. 37. Individual brand and family brand Individual brand: The part of the brand name which identifies a particular product when it follows a family brand name; for example, in the brand name "Holden Commodore", Holden is the family brand name, while Commodore is the individual brand name. Family brand: A brand name used for a number of products in the same line, such as Revlon cosmetics or Heinz canned foods; also referred to as a Blanket Brand 38. Personal selling and missionary selling Personal Selling: Personal selling is unique as it is a face-to-face transaction between a salesman and a prospective customer. Evidently, a well-trained and competitive spirited salesman can be an effective communication medium. His knowledge about the product, the degree of his familiarity with the customer, whether he is handling a new customer or an established customer, the degree of his involvement in the company he is representing, the level of his motivation and his own convictions about the quality and performance standards of the product will be the determining factors in his role as a communicator. Missionary Selling: Selling in which the salesperson's role is to inform an individual with the power to influence others to buy a product, rather than to make a direct sale to that person; a missionary salesperson is also known as a Detailer. 39. Whole seller and distributor Distributor: A distributor is a party who purchases goods from a supplier for inventory and re-sale to third parties.

Wholesalers: They are usually very big organizations and therefore hold a lot of stock. Their money is made by the quantity they sell, rather than the price per unit, therefore many wholesalers may impose a minimum order quantity or a minimum purchase amount. What you have to understand is that, most, if not all wholesalers will give you a better price per unit when you are buying larger quantities. When planning your purchasing take this into consideration. 40. Full cost pricing and marginal cost pricing. Full Cost Pricing: Absorption cost pricing or full cost pricing rests on the estimate unit cost of the product at the normal level of production and sales. The method uses standard costing techniques and works out the variable and fixed costs involved in manufacturing, selling and administering the product. By adding the cost of these three operations, we get the total cost. Adding the required margin towards profit to such total costs arrives at the selling price of the product. This method is also known as full cost pricing since it envisages the realization of full costs from each unit sold. Marginal Cost Pricing: Marginal cost pricing aims at maximizing the contribution towards fixed costs. Marginal costs include all the direct variable costs of the product. In marginal cost pricing, these direct variable costs are fully realized. In addition, a portion of the fixed costs is also realized. The main difference between absorption cost pricing and marginal cost pricing is that the latter gives the flexibility not to cover a portion of the fixed costs depending on the market situation. It also gives the flexibility to recover a larger share of the fixed costs from certain customers, or a certain segment of the business and a smaller share from the others.