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MBA - II SEM

Marketing Management- MB0030














MB0030

Registration No:520922527

MBA - II SEM
Financial Management - MB0030
Set - 1

Q1. Explain the meaning of marketing and its importance in business?

Ans. Marketing Management is a business discipline which is Iocused on the practical application oI marketing
techniques and the management oI a Iirm's marketing resources and activities. Rapidly emerging Iorces oI
globalization have compelled Iirms to market beyond the borders oI their home country making International
marketing highly signiIicant and an integral part oI a Iirm's marketing strategy.
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Marketing managers are oIten
responsible Ior inIluencing the level, timing, and composition oI customer demand accepted deIinition oI the term. In
part, this is because the role oI a marketing manager can vary signiIicantly based on a business' size, corporate
culture, and industry context. For example, in a large consumer products company, the marketing manager may act as
the overall general manager oI his or her assigned product
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To create an eIIective, cost-eIIicient Marketing
management strategy, Iirms must possess a detailed, objective understanding oI their own business and the market in
which they operate.
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In analyzing these issues, the discipline oI marketing management oIten overlaps with the
related discipline oI strategic planning.

Traditionally, marketing analysis was structured into three areas: Customer analysis, Company analysis, and
Competitor analysis (so-called "3Cs" analysis). More recently, it has become Iashionable in some marketing circles to
divide these Iurther into certain Iive "Cs": Customer analysis, Company analysis, Collaborator analysis, Competitor
analysis, and analysis oI the industry Context.

Department analysis is to develop a schematic diagram Ior market segmentation, breaking down the market into
various constituent groups oI customers, which are called customer segments or market segmentations. Marketing
managers work to develop detailed proIiles oI each segment, Iocusing on any number oI variables that may diIIer
among the segments: demographic, psychographic, geographic, behavioural, needs-beneIit, and other Iactors may all
be examined. Marketers also attempt to track these segments' perceptions oI the various products in the market using
tools such as perceptual mapping.

In company analysis, marketers Iocus on understanding the company's cost structure and cost position relative to
competitors, as well as working to identiIy a Iirm's core competencies and other competitively distinct company
resources. Marketing managers may also work with the accounting department to analyze the proIits the Iirm is
generating Irom various product lines and customer accounts. The company may also conduct periodic brand audits to
assess the strength oI its brands and sources oI brand equity.

The Iirm's collaborators may also be proIiled, which may include various suppliers, distributors and other channel
partners, joint venture partners, and others. An analysis oI complementary products may also be perIormed iI such
products exist.

Marketing management employs various tools Irom economics and competitive strategy to analyze the industry
context in which the Iirm operates. These include Porter's Iive Iorces, analysis oI strategic groups oI competitors,
value chain analysis and others. Depending on the industry, the regulatory context may also be important to examine
in detail.

In Competitor analysis, marketers build detailed proIiles oI each competitor in the market, Iocusing especially on their
relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each
competitor's cost structure, sources oI proIits, resources and competencies, competitive positioning and product
diIIerentiation, degree oI vertical integration, historical responses to industry developments, and other Iactors.
Marketing management oIten Iinds it necessary to invest in research to collect the data required to perIorm accurate
marketing analysis. As such, they oIten conduct market research (alternately marketing research) to obtain this
inIormation. Marketers employ a variety oI techniques to conduct market research, but some oI the more common
include:
O "ualitative marketing research, such as Iocus groups
O "uantitative marketing research, such as statistical surveys
O xperimental techniques such as test markets
O Observational techniques such as ethnographic (on-site) observation

Marketing managers may also design and oversee various environmental scanning and competitive intelligence
processes to help identiIy trends and inIorm the company's marketing analysis.
Though marketing is tied to Sales it continues to be an expenditure that is hard to link to growth in sales. Given the
economic down turn many world economies or companies are Iacing... how would a Iunction like marketing justiIy
itselI as a necessary expenditure so it would not be cut... budget or as a department.
In a downturn, marketing becomes even more important to the company's bottom line, making a proIit. A marketing
plan is key to establishing the dimensions oI your market, where you Iit according to your product and identiIying
where a company should Iocus its marketing budget to achieve the best overall results.
In a downturn, marketing helps to identiIy new markets, target new customers and determine the value oI the
product. II the product that is currently in production does not have a substantial customer base oI support, iI sales
are slipping and competition is securing your Iormer market share. Marketing helps to identiIy the need Ior a product
revitalization or reinvention.

Q2.Explain the relevance of BCG matrix and GE matrix with examples

Ans. This model is used to identiIy company`s SBU`s position in the market. This model identiIies the SBU`s
strengths weaknesses, opportunities and threats on the basis oI market growth rate and relative market share.
This model is also known as growth share matrix. The origin oI the Boston Matrix lies with the Boston Consulting
Group in the early 1970s. It was devised as a clear and simple method Ior helping corporations decide which parts oI
their business they should allocate their available cash to. Today, this is as important as ever because oI the limited
availability oI credit.

However, the Boston Matrix is also a good tool Ior thinking about where to apply other Iinite resources: people, time
and equipment. Market share is the percentage oI the total market that is being serviced by your company, measured
either in revenue terms or unit volume terms. The higher your market share, the higher proportion oI the market you
control. The Boston Matrix assumes that iI you enjoy a high market share you will normally be making money (this
assumption is based on the idea that you will have been in the market long enough to have learned how to be
proIitable, and will be enjoying scale economies that give you an advantage).

The question it asks is, "Should you be investing your resources into that product line just because it is making you
money?" The answer is, "not necessarily." This is where market growth comes into play. Market growth is used as a
measure oI a market's attractiveness. Markets experiencing high growth are ones where the total market is expanding,
which should provide the opportunity Ior businesses to make more money, even iI their market share remains stable.

By contrast, competition in low growth markets is oIten bitter, and while you might have high market share now,
what will the situation look like in a Iew months or a Iew years? This makes low growth markets less attractive




Axis components:

a. Market Growth rate: the rate at which market is growing.
b. Relative Market Share: market share oI the SBU dived by the market share oI the largest competitor.


Model Components:

These groups are explained below:

Dogs:

ow Market Share / ow Market Growth. In these areas, SBU`s market presence is weak, so it's going to take a lot
oI hard work to get noticed. Also, you won't enjoy the scale economies oI the larger players, so it's going to be
diIIicult to make a proIit.

Cash Cows:

High Market Share / ow Market Growth Here, SBU`s are well-established, so it's easy to get attention and exploit
new opportunities. However it's only worth expending a certain amount oI eIIort, because the market isn't growing
and your opportunities are limited. here we can say cash cow can be milked.

Stars:

High Market Share / High Market Growth Here SBU`s are well-established, and growth is exciting! These are
Iantastic opportunities, and you should work hard to realize them.

Question Marks (Problem Child)

ow Market Share / High Market Growth These are the opportunities no one knows what to do with. They aren't
generating much revenue right now because you don't have a large market share. But, they are in high growth markets
so the potential to make money is there. Here there are two choices, either to invest heavily to bring it to star position
or divest or liquidate Irom that position. "uestion Marks might become Stars and eventual Cash Cows, but they
could just as easily absorb eIIort with little return. These opportunities need serious thought as to whether increased
investment is warranted.

Key Points

The Boston Matrix is an eIIective tool Ior quickly assessing the options open to you, both on a corporate and personal
basis. With its easily understood classiIication into "Dogs", "Cash Cows", ""uestion Marks" and "Stars", it helps you
quickly and simply screen the opportunities open to you, and helps you think about how you can make the most oI
them.

Limitations:

As any other marketing theories in the Iield, the BCG matrix model is not perIect either. There are according
problems oI this theory. Some limitations concerning the particular use oI BCG include:

1. Only two dimensions market share and product or service growth rate, are employed. These are the Iirst
limitations.
2. How to deIine market and how to get data about market share are also problems.
3. High market shares don`t always necessarily lead to proIit at all times. It is not the only success Iactor.
4. ow share or niche businesses can be proIitable too, which means in the real world some Dogs can be more
proIitable than cash Cows.
5. The model cannot reIlect the growth rates oI the general market and market growth is not the only indicator Ior
market attractiveness.
6. The model also neglects the eIIects oI synergy between diIIerent business units.

The G screen matrix is essentially a derivation oI the Boston Consulting Group`s Boston growth matrix. It was
developed by McKinsey and Co. Ior General lectric as it had been recognized that the Boston Consulting Group
matrix was not Ilexible enough to take broader issues into account The G matrix cross-reIerences market
attractiveness and business position using three criteria Ior each high, medium and low. The market attractiveness
considers variables relating to the market itselI, including the rate oI market growth, market size, potential barriers to
entering the market, the number and size oI competitors, the actual proIit margins currently enjoyed, and the
technological implications oI involvement in the market. The business position criteria look at the business`s
strengths and weaknesses in a variety oI Iields. These include its position in relation to its competitors, and the
business`s ability to handle product research, development and ultimate production. It also considers how well placed
the management is to deploy these resources. The matrix diIIers in its complexity compared with the Boston
Consulting Group matrix. Superimposed on the basic diagram are a number oI circles. These circles are oI variable
size (see Figure 22). The size oI each represents the size oI each market. Within each circle is a clearly deIined
segment which represents the business`s market share within that market. The larger the circle, the larger the market,
and the larger the segment, the larger the market share.

Q3. What to do mean by MIS? Explain its benefits, types and components?

Ans. A management information system (MIS) is a system or process that provides inIormation needed to manage
organizations eIIectively
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. Management inIormation systems are regarded to be a subset oI the overall internal
controls procedures in a business, which cover the application oI people, documents, technologies, and procedures by
management accountants to solve business problems such as costing a product, service or a business-wide strategy.
Management inIormation systems are distinct Irom regular inIormation systems in that they are used to analyze other
inIormation systems applied in operational activities in the organization.
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Academically, the term is commonly used
to reIer to the group oI inIormation management methods tied to the automation or support oI human decision
making, e.g. Decision Support Systems, xpert systems, and xecutive inIormation systems.
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MIS as System: MIS is a system, which makes available the right inIormation to the right person at the right place, at
the right time, in the right Iorm & at the right cost.
At the start, in businesses and other organizations, internal reporting was made manually and only periodically, as a
by-product oI the accounting system and with some additional statistic(s), and gave limited and delayed inIormation
on management perIormance. Previously, data had to be separated individually by the people as per the requirement
and necessity oI the organization. ater, data was distinguished Irom inIormation, and instead oI the collection oI
mass oI data, important, and to the point data that is needed by the organization was stored.
arly on, business computers were mostly used Ior relatively simple operations such as tracking sales or payroll data,
oIten without much detail. Over time these applications became more complex and began to store increasing amounts
oI inIormation while also interlinking with previously separate inIormation systems. As more and more data was
stored and linked man began to analyze this inIormation into Iurther detail, creating entire management reports Irom
the raw, stored data. The term "MIS" arose to describe these kinds oI applications, which were developed to provide
managers with inIormation about sales, inventories, and other data that would help in managing the enterprise. Today,
the term is used broadly in a number oI contexts and includes (but is not limited to): decision support systems,
resource and people management applications, RP, SCM, CRM, project management and database retrieval
application.
An 'MIS' is a planned system oI the collecting, processing, storing and disseminating data in the Iorm oI inIormation
needed to carry out the Iunctions oI management. In a way it is a documented report oI the activities that were
planned and executed. According to Philip Kotler "A marketing inIormation system consists oI people, equipment,
and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate inIormation to marketing
decision makers."
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The terms MIS and information system are oIten conIused. InIormation systems include systems that are not intended
Ior decision making. The area oI study called MIS is sometimes reIerred to, in a restrictive sense, as inIormation
technology management. That area oI study should not be conIused with computer science. IT service management is
a practitioner-Iocused discipline. MIS has also some diIIerences with nterprise Resource Planning (RP) as RP
incorporates elements that are not necessarily Iocused on decision support.
Any successIul MIS must support a businesses Five Year Plan or its equivalent. It must provide Ior reports based up
perIormance analysis in areas critical to that plan, with Ieedback loops that allow Ior titivation oI every aspect oI the
business, including recruitment and training regimens. In eIIect, MIS must not only indicate how things are going, but
why they are not going as well as planned where that is the case. These reports would include perIormance relative to
cost centers and projects that drive proIit or loss, and do so in such a way that indentiIies individual accountability,
and in virtual real-time.

Benefits

1. Improves personal eIIiciency
2. xpedites problem solving(speed up the progress oI problems solving in an organization)
3. Facilitates interpersonal communication
4. Promotes learning or training
5. Increases organizational control
6. Generates new evidence in support oI a decision
7. Creates a competitive advantage over competition
8. ncourages exploration and discovery on the part oI the decision maker
9. Reveals new approaches to thinking about the problem space
10. Helps automate the Managerial processes.

Decision Support Systems (DSS) are a speciIic class oI computerized inIormation systems that supports business and
organizational decision-making activities

Definition: Management InIormation Systems (MIS) is the term given to the discipline Iocused on the integration oI
computer systems with the aims and objectives on an organisation. It does the Iollowing Iunction .
- sub serves managerial Iunction
- collects stores , evaluates inIormation systematically and routinely
- supports planning and control decisions
- Includes Iiles , hardware , soItware , soItware and operations research models
It Facilitates planning
In Minimizes inIormation overload
MIS ncourages Decentralization
It brings Co ordination
It makes control easier
MIS assembles, process , stores , Retrieves , evaluates and Disseminates the inIormation

Types
Management inIormation systems are those systems that allow managers to make decisions Ior the successIul
operation oI businesses. Management information systems consist oI computer resources, people, and procedures
used in the modern business enterprise. The term $ stands Ior management inIormation systems. MIS also reIers
to the organization that develops and maintains most or all oI the computer systems in the enterprise so that managers
can make decisions. The goal oI the MIS organization is to deliver inIormation systems to the various levels oI
corporate managers. MIS proIessionals create and support the computer system throughout the company. Trained and
educated to work with corporate computer systems, these proIessionals are responsible in some way Ior nearly all oI
the computers, Irom the largest mainIrame to the desktop and portable PCs.

Management inIormation systems can be used as a support to managers to provide a competitive advantage. The
system must support the goals oI the organization. Most organizations are structured along Iunctional lines, and the
typical systems are identiIied as Iollows:
Accounting management information systems: All accounting reports are shared by all levels oI accounting
managers.

Financial management information systems: The Iinancial management inIormation system provides Iinancial
inIormation to all Iinancial managers within an organization including the chieI Iinancial oIIicer. The chieI Iinancial
oIIicer analyzes historical and current Iinancial activity, projects Iuture Iinancial needs, and monitors and controls the
use oI Iunds over time using the inIormation developed by the MIS department.

Manufacturing management information systems: More than any Iunctional area, operations have been impacted
by great advances in technology. As a result, manuIacturing operations have changed. For instance, inventories are
provided just in time so that great amounts oI money are not spent Ior warehousing huge inventories. In some
instances, raw materials are even processed on railroad cars waiting to be sent directly to the Iactory. Thus there is no
need Ior warehousing.
Marketing management information systems: A marketing management inIormation system supports managerial
activity in the area oI product development, distribution, pricing decisions, promotional eIIectiveness, and sales
Iorecasting. More than any other Iunctional area, marketing systems rely on external sources oI data. These sources
include competition and customers, Ior example.

Human resources management information systems: Human resources management inIormation systems are
concerned with activities related to workers, managers, and other individuals employed by the organization. Because
the personnel Iunction relates to all other areas in business, the human resources management inIormation system
plays a valuable role in ensuring organizational success. Activities perIormed by the human resources management
inIormation systems include, work-Iorce analysis and planning, hiring, training, and job assignments.

Components

Components oI MIS:-
1) Marketing Research System (MRS)
2) Marketing Intelligence System (MIS)
3) Internal Record System (IRS)
4) Decision Support System (DSS)


Q5. Explain the consumer buying decision process with respect to new product. Give example?

Ans. Research suggests that customers go through a Iive-stage decision-making process in any purchase. This is
summarised in the diagram below:


This model is important Ior anyone making marketing decisions. It Iorces the marketer to consider the whole buying
process rather than just the purchase decision (when it may be too late Ior a business to inIluence the choice!)
The model implies that customers pass through all stages in every purchase. However, in more routine purchases,
customers oIten skip or reverse some oI the stages.
For example, a student buying a Iavourite hamburger would recognise the need (hunger) and go right to the purchase
decision, skipping inIormation search and evaluation. However, the model is very useIul when it comes to
understanding any purchase that requires some thought and deliberation.
The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e.g. I am
hungry, we need a new soIa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are
attracted by the aroma oI coIIee and chocolate muIIins).
An 'aroused customer then needs to decide how much inIormation (iI any) is required. II the need is strong and there
is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then.
II not, then the process oI inIormation search begins.
A customer can obtain inIormation Irom several sources:
Personal sources: Iamily, Iriends, neighbours etc
Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-oI-sale displays
Public sources: newspapers, radio, television, consumer organisations; specialist magazines
xperiential sources: handling, examining, using the product
The useIulness and inIluence oI these sources oI inIormation will vary by product and by customer. Research
suggests that customers value and respect personal sources more than commercial sources (the inIluence oI 'word oI
mouth). The challenge Ior the marketing team is to identiIy which inIormation sources are most inIluential in their
target markets.
In the evaluation stage, the customer must choose between the alternative brands, products and services.
How does the customer use the information obtained?
An important determinant oI the extent oI evaluation is whether the customer Ieels 'involved in the product. By
involvement, we mean the degree oI perceived relevance and personal importance that accompanies the choice.
Where a purchase is 'highly involving, the customer is likely to carry out extensive evaluation.
High-involvement purchases include those involving high expenditure or personal risk Ior example buying a
house, a car or making investments.
Low involvement purchases (e.g. buying a soIt drink, choosing some breakIast cereals in the supermarket) have very
simple evaluation processes.
Why should a marketer need to understand the customer evaluation process?
The answer lies in the kind oI inIormation that the marketing team needs to provide customers in diIIerent buying
situations.
In high-involvement decisions, the marketer needs to provide a good deal oI inIormation about the positive
consequences oI buying. The sales Iorce may need to stress the important attributes oI the product, the advantages
compared with the competition; and maybe even encourage 'trial or 'sampling oI the product in the hope oI
securing the sale.
Post-purchase evaluation - Cognitive Dissonance
The Iinal stage is the post-purchase evaluation oI the decision. It is common Ior customers to experience concerns
aIter making a purchase decision. This arises Irom a concept that is known as 'cognitive dissonance. The customer,
having bought a product, may Ieel that an alternative would have been preIerable. In these circumstances that
customer will not repurchase immediately, but is likely to switch brands next time.
To manage the post-purchase stage, it is the job oI the marketing team to persuade the potential customer that the
product will satisIy his or her needs. Then aIter having made a purchase, the customer should be encouraged that he
or she has made the right decision.
Q6. Explain the different consumer behaviour models?
ENVIRONMENTAL FACTORS BUYER'S BLACK BOX
BUYER'S
RESPONSE Marketing
Stimuli
Environmental
Stimuli
Buyer
Characteristics
Decision Process
Product
Price
Place
Promotion
conomic
Technological
Political
Cultural
Demographic
Natural
Attitudes
Motivation
Perceptions
Personality
iIestyle
Knowledge
Problem recognition
InIormation search
Alternative evaluation
Purchase decision
Post-purchase
behaviour
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
The black box model shows the interaction oI stimuli, consumer characteristics, decision process and consumer
responses.
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It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within
people). The black box model is related to the black box theory oI behaviourism, where the Iocus is not set on the
processes inside a consumer, but the relation between the stimuli and the response oI the consumer. The marketing
stimuli are planned and processed by the companies, whereas the environmental stimulus are given by social Iactors,
based on the economical, political and cultural circumstances oI a society. The buyers black box contains the buyer
characteristics and the decision process, which determines the buyers response.
The black box model considers the buyers response as a result oI a conscious, rational decision process, in which it is
assumed that the buyer has recognized the problem. However, in reality many decisions are not made in awareness oI
a determined problem by the consumer.
Information search
Once the consumer has recognised a problem, they search Ior inIormation on products and services that can solve that
problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search.
Sources oI inIormation include:
O Personal sources
O Commercial sources
O Public sources
O Personal experience
The relevant internal psychological process that is associated with inIormation search is perception. Perception is
deIined as 'the process by which an individual receives, selects, organises, and interprets inIormation to create a
meaningIul picture oI the world'
The selective perception process
Stage Description
-Selective exposure consumers select which promotional messages they will expose themselves to.
-Selective attention consumers select which promotional messages they will pay attention to
- Selective comprehension consumer interpret messages in line with their belieIs, attitudes, motives and experiences
- Selective retention consumers remember messages that are more meaningIul or important to them
The implications oI this process help develop an eIIective promotional strategy, and select which sources oI
inIormation are more eIIective Ior the brand.CV
Information evaluation
At this time the consumer compares the brands and products that are in their evoked set. How can the marketing
organization increase the likelihood that their brand is part oI the consumer's evoked (consideration) set? Consumers
evaluate alternatives in terms oI the Iunctional and psychological beneIits that they oIIer. The marketing organization
needs to understand what beneIits consumers are seeking and thereIore which attributes are most important in terms
oI making a decision.
Purchase decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase
intention does not result in an actual purchase. The marketing organization must Iacilitate the consumer to act on their
purchase intention. The organisation can use variety oI techniques to achieve this. The provision oI credit or payment
terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a
competition may provide an incentive to buy now. The relevant internal psychological process that is associated with
purchase decision is integration. Once the integration is achieved, the organisation can inIluence the purchase
decisions much more easily.
Post purchase evaluation
It is common Ior customers to experience concerns aIter making a purchase decision. This arises Irom a concept that
is known as 'cognitive dissonance. The customer, having bought a product, may Ieel that an alternative would have
been preIerable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands
next time.
To manage the post-purchase stage, it is the job oI the marketing team to persuade the potential customer that the
product will satisIy his or her needs. Then aIter having made a purchase, the customer should be encouraged that he
or she has made the right decision. It is not aIIected by advertisement.
Internal influences
Consumer behaviour is inIluenced by: demographics, psychographics (liIestyle), personality, motivation, knowledge,
attitudes, belieIs, and Ieelings. Consumer behaviour concern with consumer need consumer actions in the direction oI
satisIying needs leads to his behaviour oI every individual depend on thinking
External influences
Consumer behaviour is inIluenced by: culture, sub-culture, locality, royalty, ethnicity, Iamily, social class, reIerence
groups, liIestyle, and market mix Iactors.

MBA - II SEM
Financial Management - MB0030
Set 2
Q1. Give a short note on bases of Segmentation?
Ans. Process oI dividing the market according to similarities that exist among the various subgroups within the
market. The similarities may be common characteristics or common needs and desires. Market segmentation comes
about as a result oI the observation that all potential users oI a product are not alike, and that the same general appeal
will not interest all prospects. ThereIore, it becomes essential to develop diIIerent marketing tactics based on the
diIIerences among potential users in order to eIIectively cover the entire market Ior a particular product. There are
Iour basic market segmentation strategies: behavior segmentation, demographic segmentation, geographic
segmentation, and physiographic segmentation.
B. Analyse the pricing methods with relevant examples.
Pricing methods
The main methods used are:
O Return-on-investment pricing
O CashIlow pricing (payback)
O Competitor pricing
O Price slot pricing
The targets under each method will depend on whether the organisation aims to make a quick proIit or is aiming to
build up a market or brand. Many publishers will not invest in new titles, which do not make a Iast proIit on the Iirst
printing. Organisations with, or with access to, large cash resources, can develop titles and lists Ior longer term
potential. In young economies most publishers producing textbooks Ior the Ministry oI ducation or local parents will
expect to recover all new title costs in the Iirst printing even under competitive tendering processes.
Method Explanation
Return on
Investment pricing
1
The investment in publishing terms is deIined as the Iirst edition costs up to printing
stage (and perhaps including promotional expenditure. The proIit is the diIIerence
between revenues Irom sales less printing, distribution and royalty costs. This method
is not widely used in book publishing as the 'investment per title is low
Return on
Investment pricing
2
The cashIlows are calculated Ior all costs and revenues directly associated with the
title as above. The Internal Rate oI Return (IRR) or Net Present Value (NPV) is then
calculated. This method is becoming more widely used in the media industries as
computer spreadsheets Iacilitate the calculation.
Cash Ilow Pricing This is a simpliIied version oI Return on Investment Pricing. The Payback rather than
the Net Present Value is calculated. Both methods can be combined useIully
Competitor
pricing
This is a pricing policy rather than method oI calculation. The publisher will estimate
the cost oI developing a book that will sell successIully against books Irom
competitors. The selling price may be diIIerent to those oI competitors` products iI the
publisher decides to compete by oIIering a diIIerent treatment, design approach,
selling price, and pagination.
Price Slot pricing Where market search proves the need Ior price slots, or major customers demand,
publishers will 'work backwards to produce books that will sell at the agreed slots

Q2. Explain the benefits and demerits of the different types of advertising media. How will a marketer decided
on the suitable media for his/her products?
Newspapers
Benefits
O Your ad has size and share, and can be as large as necessary to communicate as much oI a story as you care
to tell.
O The distribution oI your message can be limited to your geographic area.
O Split-run tests are available to test your copy and your oIIer.
O Free help is usually available to create and produce your ad.
O Fast closings. The ad you decide to run today can be in your customer's hands two days Irom now.
Demerits
O Clutter. Your ad has to compete Ior attention against large ads run by supermarkets and department stores.
O Poor photo reproduction limits creativity.
O A price-oriented medium. Most ads are Ior sales.
O Short shelI liIe. The day aIter a newspaper appears, it's history.
O Waste circulation. You're paying to send your message to a lot oI people who will probably never be in the
market to buy Irom you.
O A highly visible medium. Your competitors can quickly react to your prices.

Magazines
Benefits
O High reader involvement means more attention will be paid to your advertisement.
O ess waste circulation. You can place your ads in magazines read primarily by buyers oI your product or
service.
O The smaller the page (generally eight and halI by eleven inches) permits even small ads to stand out.
Demerits
O ong lead times (generally 90 days) mean you have to make plans a long time in advance.
O The cost Ior space is higher in addition to higher creative costs.


Yellow Pages
Benefits
O veryone uses the yellow pages.
O Ads are reasonably inexpensive.
O You can easily track your responses.
Demerits
O All oI your competitors are listed so you run the ad as a deIensive measure.
O Ads are not very creative since they Iollow certain Iormats.

Radio
Benefits
O A universal medium. Can be enjoyed at home, at work, and while driving. Most people listen to the radio at
one time or another during the day.
O Permits you to target your advertising dollars to the market most likely to respond to your oIIer.
O Permits you to create a personality Ior your business using only sounds and voices.
O Free creative help is ususally available.
O Rates can generally be negotiated.
O east inIlated medium. During the past ten years, radio rates have gone up less than other media.
Demerits
O Because radio listeners are spread over many stations, to totally saturate your market you have to advertise
simultaneously on many stations.
O isteners cannot reIer back to your ads to go over important points.
O Ads are an interruption to the entertainment. Because oI this, radio ads must be repeated to break through the
listener's "tune out" Iactor.
O Radio is a background medium. Most listeners are doing something else while listening, which means your
ad has to work hard to be listened to and understood.
O Advertising costs are based on ratings which are approximations based on diaries kept in a relatively small
Iraction oI a region's homes.

Television
Benefits
O Permits you to reach great numbers oI people on a national or regional level.
O Independent stations and cable oIIer new opportunities to pinpoint local audiences.
O Very much an image-building medium.
Demerits
O Ads on network aIIiliates are concentrated in local news broadcasts and on station breaks.
O Creative and production costs can quickly mount up.
O ead time can result in items being sold out beIore ad runs.
O Most ads are ten or thirty seconds long, which limits the amount oI inIormation you can communicate.

Direct Mail
Benefits
O Your advertising message is targeted to those most likely to buy your product or service.
O Your message can be as long as necessary to Iully tell your story.
O You have total control over all elements oI creation and production.
O A "silent" medium. Your message is hidden Irom your competitors until it's too late Ior them to react.
Demerits
O ong lead times required Ior creative printing and mailing.
O Requires coordinating the services oI many people: artists, photographers, printers, etc.
O ach year over 20 oI the population moves, meaning you must work hard to keep your mail list up to date.
O ikewise, a certain percentage oI the names on a purchased mailing list is likely to be no longer useIul.

Telemarketing
Benefits
O You can easily answer questions about your product/service.
O It's easy to prospect and Iind the right person to talk to.
O Cost eIIective compared to direct sales.
O Highly measurable results.
O You can get a lot oI inIormation iI your script is properly structured.
Demerits
O Many business use telemarketing.
O ProIessionals should draIt the script and perIorm the telemarketing in order Ior it to be eIIective.
O Can be extremely expensive.
O Most appropriate Ior high-ticket retail items or proIessional services.

Q3. Write a note on new product development and product mix.
Ans. New product development: New product development NPD is a process which is designed to develop, test and
consider the viability oI product which are new to the market in order to ensure the growth or survival oI the
organisation.

New Product Development Process:
Idea Generation and Screening
Concept Development and Testing
Marketing Strategy
Business Analysis
Product Development
Test Marketing
Commercialization
Product Mix: Product mix is a combination oI products manuIactured or traded by the same business house to
reinIorce their presence in the market, increase market share and increase the turnover Ior more proIitability.
Normally the product mix is within the synergy oI other products Ior a medium size organization. However large
groups oI Industries may have diversiIied products within core competency. arsen & Toubro td, Godrej, Reliance
in India are some oI the examples.

One oI the realities oI business is that most Iirms deal with multi-products .This helps a Iirm diIIuse its risk across
diIIerent product groups/Also it enables the Iirm to appeal to a much larger group oI customers or to diIIerent needs
oI the same customer group .So when Videocon chose to diversiIy into other consumer durables like music systems,
washing machines and reIrigerators, it sought to satisIy the needs oI the middle and upper middle income group oI
consumers.

ikewise, Bajaj lectricals a household name in India has almost ninety products in i8ts portIolio ranging Irom low
value items like bulbs to high priced consumer durables like mixers and luminaires and lighting projects .The number
oI products carried by a Iirm at a given point oI time is called its product mix. This product mix contains product lines
and product items .In other words it`s a composite oI products oIIered Ior sale by a Iirm.
Q4. Select any brand of toilet soap and evaluate its positioning strengths or weaknesses in terms of attributes,
benefits, values, brand name and brand equity. Also, examine how competitive brands influence the marketing
strategies of the selected soap?
LUX

ux soap was Iirst launched in 1916 as laundry soap targeted speciIically at 'delicates'. ever Brothers encouraged
women to home launder their clothes without Iear oI satins and silks being turned yellow by harsh lyes that were
oIten used in soaps at the time. The Ilake-type soap allowed the manuIacturer some leeway Irom lye because it did
not need to be shaped into traditional cake-shaped loaves as other soaps were. The result was a gentler soap that
dissolved more readily and was advertised as suitable Ior home laundry use. ux toilet soap was introduced in 1925
as bathroom soap. The name 'ux' was chosen as a play on the word "luxury." ux has been marketed in several
Iorms, including bar and Ilake and liquid (hand wash, shower gel and cream bath soap). ux in step with the changing
trends and evolving beauty needs oI the consumers, oIIers an exciting range oI soaps and Body Washes with unique
elements to make bathing time more pleasurable. One can choose Irom a range oI skincare beneIits like Iirming,
Iairness and moisturising. ux stands Ior the promise oI beauty and glamour as one oI India's most trusted personal
care brands. Since its launch in India in the year 1929, ux has oIIered a range oI soaps in diIIerent colours and world
class Iragrances. ux is a beauty soap oI Iilm stars. ux recognized the need Ior a compelling message about beauty
that would resonate with women oI today. From the 1930s right through to the 1970s, ux soap colours and
packaging were altered several times to reIlect Iashion trends. In 1958 Iive colours made up the range: pink, white,
blue, green and yellow. People enjoyed matching their soap with their bathroom colours. In the early 1990s, ux
responded to the growing trend away Irom traditional soap bars by launching its own range oI shower gels, liquid
soaps and moisturizing bars. ux beauty Iacial wash, ux beauty bath and ux beauty shower were launched in 1992.
In 2004, the entire ux range was re-launched in the UK to include Iive shower gels, three bath products and two new
soap bars. 2005 saw the launch oI three exciting new variants with dreamy names such as 'Wine & Roses bath
cream, 'Glowing Touch and 'Sparkling Morning shower gels. ux has recently launched its two Iruit extract
variants New ux Strawberry & Cream and ux Peach & Cream contain a blend oI succulent Iruits & luscious
Chantilly cream. The most recent addition in the brand is ux Crystal Shine.

Study of LUX with respect to 4 P`s
a. Product
A product is anything that can be oIIered to a market to satisIy a need or want. Products that are marketed include
physical goods, services, experiences, events, persons, places, properties, organizations, inIormation and ideas.
Product ClassiIication
UX is a Tangible, Non Durable Good on the basis oI this classiIication.
UX and other soaps Iall into the category oI Convenience Good

Sales Promotion
Sales promotion, a key ingredient in marketing campaigns, consists oI a collection oI incentive tools, mostly short
term, designed to stimulate quicker or greater purchase oI particular products or services by consumers or the trade.
Whereas advertising oIIers a reason to buy, sales promotion oIIers an incentive to buy. Sales promotion includes tools
Ior
!7423039 $al08 !7424943 $.0208 U80/ By LUX
ux presented 30 gm gold each to the Iirst three winners oI the ux Gold Star oIIer Irom Delhi. According to the
promotional oIIer that ux unveiled in October 2000, a consumer Iinding a 22-carat gold coin in his or her soap bar
got an opportunity to win an additional 30 gm gold. The Iirst 10 callers every week got a 30 gm gold each. The oIIer
could be availed only on 100 gm and 150 gm packs oI ux soap. ux celebrated 75 years oI stardom with the Har
Star ucky Star activity. All wrappers oI ux had a star printed inside them. II the consumer Iound written inside the
star, any number Irom '1 to '5, she would get an equivalent discount (in rupees) on her purchase Irom her
shopkeeper. II the consumer Iound '75 years written inside the star, she will get a year`s supply oI ux Iree.

Price segments of toilet soaps
Segment Price/weight
Premium ~ Rs. 15 / 75 gms
Popular Rs. 8-15/75 gms
conomy Rs. 8 /75 gms
However, recently HU has been Iorced to hike its price by one rupee, to Rs17 (Ior 100 gm), giving in to the
pressures oI inIlation. This paves the way Ior competing soap makers like Godrej Consumer Products (GCP) to take
price increases. ux has versions in all the three price segments:
Recent pricing of Lux (100 g) ux Crystal Shine Rs 17 ux Festive Glow Rs 15 Mini ux Rs 5


STRENGTHS OF LUX

1. Strong Market Research (door to door sampling is done once a year in Urban and Rural areas)
2. Many variants (Almond Oil, Orchid xtracts, Milk Cream, Fruit xtracts, SaIIron, Sandalwood Oil, and Honey to
name a Iew)
3. Strong sales and distribution network backed by H
4. Strong brand image
5. Positioning Iocuses on the attractive beauty segment
6. Dynamically continuous innovation oI the product and brand rejuvenation new variants (Aromatic Glow and
Chocolate Seduction and ux White Spa body wash) and innovative promotions (22 carat gold coin promotion
Chance Hai`)
7. Perceived to have high value Ior money (strong brand promotion but relatively lower price which is a winning
combination in the popular segment)
8. Though it is in popular segment, it is having mass appeal/market presence across all segments (15 oI the soap
market captured by ux (sales / volume)
9. Unique advantage oI having access to resources and assets oI H

WEAKNESSES
1. ux is mainly positioned as beauty soap targeted towards women, hence it lacks unisex appeal
2. Usage rate/ wear rate is high and is generally mushy and soggy
3. Some variants like the sunscreen, International variant did not do well in the market
4. Certain advertisements like the recent one with Shah Rukh Khan resulted in controversial interpretations oI the
message oI the advertisement and lead to some loss oI Iocus (oI message oI the advertisements)
5. Stock out problems - replenishment time is high in semi-urban/rural areas
6. arlier positioning as the 'soap oI the stars has somewhat alienated the brand Irom a portion oI the consumers
especially in rural areas.

Q5. As a salesperson in a fast moving consumer goods company, What kind of training and development
methods do you feel are required? How important is training for sales force and how can it be evaluated?

Customers inIormed, proIessional salespeople continuously prepare to meet the service and product needs oI
customers. Training salespeople gives customers the assurance that you value and respect their time. Knowledgeable,
educated sales people add value. Customers trust and view them as business partners. Customers Ieel their needs
come Iirst when trained salespeople work with them.

Company Retention and morale is higher in companies that invest in the development oI all employees. Price
seldom becomes an issue Ior the trained sales proIessional. ThereIore proIit margins improve and predictability oI
earnings leads to job stability.

The trained sales Iorce produces more with conIidence. In addition, they`re aware oI trends in the market, technology,
industry and environment. This knowledge enhances their ability to sell and the reputation oI your company.

Training programs should address knowledge, competencies, ability, capability and skills.

The Iactors aIIecting the development oI a sales team include:

xternal market and industry trends, customers, economy, government regulation, society, competition, and
personal bias.

Internal company strategy, culture oI the sales team, product lines and liIe cycle, customer service support, etc.

Q6. What is International Marketing? What are the various strategies to enter international market? Explain?
International Marketing is deIined as 'The perIormance oI business activities designed to plan, price, promote and
direct the company`s Ilow oI goods and services to consumers or users in more than one nation Ior a proIit. A
company that wants to sell their product in other than domestic market should understand the environmental Iactor,
consumer behaviours, market Iorces and other character relevant to the international market. AIter understanding the
deIinition, several questions may arise in your mind like why marketer should go to the international market?
International Market Entry Strategies
Organisation that plan to go Ior international marketing should answer some basic question like:
a) In how many countries would the company like to operate
b) What are the types oI countries it plans to enter. To answer the above question companies evaluate each
country against the market size, market growth and, cost oI doing business, competitive advantage and risk
level.


Once the market is Iound to be attractive companies should decide how to enter this market. Companies can enter the
international market Irom any one oI the Iollowing strategies they are

Exporting: xporting is the technique oI selling the goods produced in the domestic country in a Iollow country with
some modiIications Ior example Gokaldas textiles export the cloth to diIIerent countries Irom India. xporting may
be indirect or direct. In case oI indirect exporting, companies works with independent international market
intermediaries.

Licensing: According to Philip kotlor, licensing is a method oI entering a Iollow market in which the company enters
into an agreement with a license in the Iollow market, oIIering the right to use oI manuIacturing, process the trade
market, patent, or other items oI value Ior a Iee or royalty.

Contract Manufacturing: Company enters the international market with a tie up between manuIacturer to produce
the product or the services. For example, Gigabyte technology had target manuIacturing agreement with D-ink India
to produce and sell their mother boards.

Market Contracting: In this type a company enters the international market by providing the no how oI the product
to the domestic manuIacturer. The capital, marketing and other activities are carried out by the local manuIacturer
hence its less risk too.

Joint Ownership: A Iorm oI joint venture in which an international company invest equally with a domestic
manuIacturer thereIore it also has equal right in the controlling operations. For example, Barbara a lingeries
manuIacturer has joint venture with Gokaldas Images in India.

Direct investment: In this method oI international market entry, company invests in manuIacturing or assembling.
The company may enjoy the low cost advantage oI that country. Many manuIacturing Iorms invested directly in the
Chinese market to get its low cost advantage. Some governments provide incentives and companies beneIits to the
company which manuIacturers the product in their country. There is government restriction in some countries to opt
Ior direct investment, is it produce the jobs to the local people. This made also debts on the country attractiveness. It
may become risk iI the market mature or unstable government exists.