3 Summer 2011- May drive Master of Business Administration MBA Semester 2 MB0046 Marketing Management - 4 Credits (Book ID:

D: B1135) Assignment Set- 1 60 Marks Note: Each question carries 10 Marks. Answer all the questions. Q.1 Discuss the different marketing concepts with its merits and drawbacks. [10 marks] Ans:
The Marketing Concept The Marketing Concept proposes that a companys task is to create, communicate and deliver a better value proposition through its marketing offer, in comparison to its competitors; to its target segment and that this customer oriented approach only can lead to success in the market place. Today, marketing function is seen as one of the most important functions in the organization. Many marketers put the customers at the centre of the company and argue in favor of such a customer orientation, where all functions work together to respond, serve and satisfy the customer. Many successful and well known multinational companies have adopted marketing concept as their business and marketing philosophies. Many Indian companies in the banking and other service sectors follow customer orientation and service as their motto. According to this concept, a companys marketing effort must start right from identifying, through Market Research, exact needs and wants of the target market.

Merits And Drawbacks 1. Needs and Wants 2. Demand

3. Product And Services 4. Targets Market 5. Marketing Management 6. Values And Satisfaction

Q.2 a) What are the features and objectives of marketing research? [5 marks] Ans:
Marketing Research is " the function that links the consumer, customer, and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications."[1] Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services. The goal of marketing research is to identify and assess how changing elements of the marketing mix impacts customer behavior. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketingresearch is concerned specifically about marketing processes.[2] Marketing research is often partitioned into two sets of categorical pairs, either by target market: Consumer marketing research, and Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach: Qualitative marketing research, and Quantitative marketing research

Consumer marketing research is a form of applied sociology that concentrates on understanding the preferences, attitudes, and behaviors of consumers in a market-based economy, and it aims to understand the effects and comparative success of marketing campaigns. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of theACNielsen Company in 1923.[3] Thus, marketing research may also be described as the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities inmarketing.[4]

=Features of Marketing Research 1. IT IS A SYSTEMATIC PROCESS It has yo be carried out in a stepwise and systematic manner and the whole process needs to be planned with a clear objective.

2. IT SHOULD BE OBJECTIVE It is important that the methods employed and interpretations are objective . The research should not be carried out to establish an opinion nor should it be intentionally suitable towords predetermined results.

3.IT IS MULTI-DISCIPLINARY Marketing Research draw concepts from outher discipline such as statistic for obtaining reliable data and from Economics, Psychology ,for better understanding of buyears.

OBJECTIVE OF MARKETING RESEARCH

1. To understand why customers buy a product 2. To forecast the probanle volume of future sales or expected market share 3. To assess competitive strengths and strategies 4. To evaluate the effectiveness of marketing action already taken 5. To assess customer satisafaction of companys products\services.

b) Give a note on psychoanalytic model of consumer behaviour. [5 marks] Ans: The Psychoanalytical model: The psychoanlytical model draws from Freudian psychology . Accoarding to this model. The individual consumer has a complex set of deep-seated motives which drive him towords certain buying decisions. The buyer has a private world with all his buying action can be influenced by appeanling to the work of wminent psychologist sigmund freud Freud introuduced personality as a motivation force in human behavior. According to this theory ,the mental framerwork of a human being is composed of three elements,namely, 1. The Id or the Instinctive,pleasure-seeking element. It is the reservoir of the instinctive impulses that a man is born with and whose processses are entirely subconscious.it includes the aggressive ,destructive and sexual impuises of man.

2. The Superego or the internal fifter that presents to the indivdual the behavioral expectations of society. 3. The ego or the control device that maintains a balance between the id and the superego. 4. The sociological Model:According to the sociological model,the individual buyer is influenced by society or intimate groups as well as social classes. 5. The Nicosia model: in recent year ,some efforts have been made by marketing scholars to build buyer behavior models totally from the marketing mans standpoint.The Nicosia model and the Howard and sheth model are the two important models in this category.Both of them belong to the category called the systeams model ,where the human being is analyzed as a system .Francesco Nicosia,an expert in consumer motivation and bahaveior put forward his model of buyer behavior in 1966. The model tries to establish the linkages between a first influence the predisposition of the consumer towords the product Depending on the situation ,he develops a certain attiude towords the product.

Q. 3 Silver Line Manufacturers produce several varieties of automobile components. They

have 3 to 5 suppliers who supply materials regularly. Recently, procurement manager of Silver Line discussed in the meeting that they have to look out for new suppliers since they would be expanding their business operations to many places. How do you think Silver Line have to go about this situation? [10 marks] Q.4 Briefly explain the bases for segmenting consumer markets along with examples. Do you think these bases are required for market segmentation? Why? [10 marks]

Ans: Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations sharing one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function.
Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, and so on. Using segmentation allows companies to target groups effectively, and allocate marketing resources to best effect. According to an article by Jill Griffin for Cisco Systems, traditional segmentation focuses on identifying customer groups based on demographics and attributes such as attitude and psychological profiles. Value-based segmentation, on the other hand, looks at groups of customers in terms of the revenue they generate and the costs of establishing and maintaining relationships with them. Customer segmentation procedures include: deciding what data will be collected and how it will be gathered; collecting data and

integrating data from various sources; developing methods of data analysis for segmentation; establishing effective communication among relevant business units (such as marketing and customer service) about the segmentation; and implementing applications to effectively deal with the data and respond to the information it provides.

a)>Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations sharing one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. ...

is the process of dividing markets comprising the heterogeneous needs of many consumers into smaller parts or segments comprising the homogeneous needs of smaller groups of consumers.

the division of a market into distinct groups of buyers or decision makers.

The process of dividing a total market into subgroups of consumers, or potential consumers, who are similar in some way. Learn More

Market segmentation is a marketing approach that encompasses the identification of different groups of customers with different needs or responses to marketing activity. The market segmentation process also considers which of these segments to targ

A way of analyzing a market by specific characteristics in order to create a target market.

To divide a market by a strategy directed at gaining a major portion of sales to a subgroup in a category, rather than a more limited share of purchases by all category users.

A market segment consist of a group of customers who share similar set of wants 6

the process of dividing a market into smaller sections (segments) which contain customers with similar needs and wants. There are various bases of segmentation - two of them are demographic and geografic.

The process of defining the socio-economic characteristics of the demand for a specific property.

Companies cannot profitably serve all consumers in a given marketat least not all consumers in the same way. Thus, a company must take three steps to determine how they will sell in the available markets. The first step in that decision

a) Process of dividing the market according to similarities that exist among the various subgroups within the market. The similarities may be common characteristics or common needs and desires. Market segmentation comes about as a result of the observation that all potential users of a product are not alike, and that the same general appeal will not interest all prospects. Therefore, it becomes essential to develop different marketing tactics based on the differences among potential users in order to effectively cover the entire market for a particular product. There are four basic market segmentation strategies: behavior segmentation, demographic segmentation, geographic segmentation, and physiographic segmentatio

Q.5 Mention the forces in micro and macro environment that are likely to influence an organisations working and functions. Is environmental scanning necessary for all organisations? [10 marks]. A)
The micro-environment
This environment influences the organization directly. It includes suppliers that deal directly or indirectly, consumers and customers, and other local stakeholders. Micro tends to suggest small, but this can be misleading. In this context, micro describes the relationship between firms and the driving forces that control this relationship. It is a more local relationship, and the firm may exercise a degree of influence.

The macro-environment
This includes all factors that can influence and organization, but that are out of their direct control. A company does not generally influence any laws (although it is accepted that they could lobby or be part of a trade organization). It is continuously changing, and the company needs to be flexible to adapt. There may be aggressive competition and rivalry in a market. Globalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology.

Ans 1. a. Micro Environment Forces:

The Company : A company Safe Express, a leader in the supply chain management solution wants to hold its number one position in the US $ 90 billion Indian logistics market. The company plans to expand its service areas in the coming months. To meet the targets of the marketing plan, other departments of safe express also expanding their horizon. The Company is coming out with logistics parks in different cities; plans to hold seven million square feet of warehousing capacity in the next three years and invest Rs 10 billion in three years to meet those targets. The above example shows that the companys marketing plan should be supported by the other functional departments also. Intermediaries Marketing intermediaries: These are firms which distribute and sell the goods of the company to the consumer. Marketing intermediaries play an important role in the distribution, selling and promoting the goods and services. Stocking and delivering, bulk breaking, and selling the goods and services to customer are some of the major functions carried out by the middlemen. Retailers, wholesalers, agents, brokers, jobbers and carry forward agents are few of the intermediaries. Retailers are final link between the company and the customers. Their role in the marketing of product is increasing every day. Publics These are microenvironment groups, which help a company to generate the financial resources, creating the image, examining the companies policy and developing the attitude towards the product. We can identify six types of publics : 1. Financial publics influence the companys ability to obtain funds. For example, Banks, investment houses and stockholders are the major financial publics. 2. Media publics carry news and features about the company e.g. Deccan Herald 3. Advertisement regulation agencies, telecom regulation agency( TRAI), and insurance regulation agency(IRDA) of the government 4. Citizen action groups: Formed by the consumer or environmental groups. For example, people for ethical treatment of animals (PETA) or Greenpeace.

5. General publics: a company should be concerned towards general publics attitude towards its products and services. 6. Internal publics: Employees who help in creating proper image for the company through word of mouth. Competitors. A company should monitor its immediate competitors as its sale will be affected by the nature and intensity of the competitors. The sale of Coca cola will be affected by Pepsi cola, or Britannia cheese by Amul cheese. Michael Porter, the author of Competitive Advantage of Nations suggested that, in addition to direct competition, companies should also consider competition from substitutes. In addition to existing competitors, the potential competitors should also be anticipated. Competition may arise from a. Small firms with low overheads producing duplicates. b. Firms which diversify into certain products by merely being in the particular industry for e.g. Pepsi entered the snacks sector competing with pure snack producers like Haldiram. c. Firms which expand in the same vertical for e.g. Godrej which manufactured office furniture and steel cupboards went on to the entire range of home furniture thereby giving competition to pure home furniture makers. How do companies or enterprises survive and grow under the above circumstances. While we shall study this in detail later, a simple step could be that the product should be positioned differently and the company should be able to provide better services. Suppliers There are many kinds of suppliers to an enterprise or an institution. There are typically, raw material suppliers, energy and fuel suppliers, labour suppliers, office item suppliers and so on. Suppliers are the first link in the entire supply chain of the company. Hence any problems or cost escalation in this stage will have direct effect on the company. Many companies adopted supplier relation management system to manage them well. Suppliers are a source of competition to firms today. For a large retail store like Reliance Retail or Big Bazaar the suppliers play the most significant role in both cost and time. Timely supplies reduce stocking of goods and blocking of space, at the same time meet customer requirements. In a globalised scenario suppliers are even more important as competition goes up manifold! The Tamil Nadu State Electricity Board imports coal from New Zealand despite huge coal reserves in India. For Volvo, India is a manufacturing hub. Customers A company may sell their products directly to the customer or use marketing intermediaries to reach them. Direct or indirect marketing depends on what type of markets Company serves. Generally we can divide the markets into five different categories. They are a. Consumer market. b. Business market c. Reseller market d. Government market and e. International market The following example illustrates different markets. MRF, a tyre company sells its product directly to consumer (in case of urgency, customer purchases directly from showroom) i.e. operates in consumer market. It operates in business markets by selling tyres to companies like Maruti Udyog limited. MRF also sells TYREs to BMTC and KSRTC, transport organizations of Karnataka government. If MRF sells tyres in African or American countries then it is operating in the international market. If MRF buys the old tyres, retreads it and sells it to the consumer at a profit then company is operating in the reseller market.

b) The different ad appeals-A) Emotional appeal: Positive emotional appeal or negative emotional appeals are strong tools used to intensify the purchasing activity of the customer. Positive emotions like love, pride, joy and humor are used in the message. Following are the advertisement where such attributes of positive emotions used. e.g. BMW fastest saloon car in the world- pride e.g. Fevicol humor e.g. Wheel- love. The negative emotions like fear guilt and shame are also used in the advertisement to attract the customer. e.g. NIIT- if you are not studying at NIIT you are missing somethingguilt e.g. Rexona deodorant shame B)Rational appeals: The rational appeals highlight on the desired benefits about the products. They highlight quality, economy value or performance of the product. e.g. Dabur Amla value appeal ( long Hair) e.g. Lakme brilliance- Quality products. e.g. Reliance India mobile- performance( works even in flood situations) e.g. Reliance Infocom- Like the first three, the mobile phone must come to me as a necessity and not as a luxury- economy C) Moral appeal: These are concerned towards public health or environment or social responsibility. e.g. Shell lubricants show its commitment towards environment in their advertisements.

Q.6 Consider the company, Maruthi Udyog Limited. Elaborate on the companys marketing mix and give examples related to the 4 Ps. [10 marks]Summer 2011- May drive Ans: Marketing mix 4Ps .?
Marketers use different tools in order to get the desired response from the customers or best satisfy their needs. These tools are known as The Marketing Mix. Marketing Mix is probably the most famous term in marketing.

Marketing Mix
Marketing Mix is a combination of marketing tools that a company uses to satisfy their target customers and achieving organizational goals. McCarthy classified all thesemarketing tools under four broad categories: Product Price Place Promotion These four elements are the basic components of a marketing plan and are collectively called 4 Ps of marketing. 4 Ps pertain more to physical products than services. Below is an illustration for marketing mix.

The important thing to note is that all these four Ps (variable) are controllable, subject to internal and external constraints of marketing environment. Marketers, using different blends of these variables, can target different group of customers having different needs. So, a customer may call marketing mix the offering.

>Product
Product is the actual offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services). While formulating the marketing strategy, product decisions include: What to offer?

Brand name Packaging Quality Appearance Functionality Accessories Installation After sale services Warranty

>Price
Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marketing channels. Price decisions include: Pricing Strategy (Penetration, Skim, etc) List Price payment period Discounts Financing Credit terms Using price as a weapon for rivals is as old as mankind. but its risky too. Consumers are often sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive products are considered of good quality.

>Place (Placement)
It not only includes the place where the product is placed, all those activities performed by the company to ensure the availability of the product tot he targeted customers. Availability of the product at the right place, at the right time and in the right quantity is crucial in placement decisions. Placement decisions include: Placement Distribution channels

Logistics Inventory Order processing Market coverage selection of channel members

>Promotion
Promotion includes all communication and selling activities to pursuade future prospects to buy the product. Promotion decisions include: Advertising Media Types Message Budgets Sales promotion Personal selling Public relations Direct marketing As these costs are huge as compared to product price, So its good to perform a breakeven analysis before allocating the budget. It helps in determining whether the new customers are worth of promotion cost or not.

It often takes time and requires market research to develop a successful marketing mix. You should not depend on one mix always try new mixes. While designing the mix, make changes to all mixes in such a way that all conveys the same message. Dont confuse your customers by just changing one variable and keeping the rest same.

Master of Business Administration MBA Semester 2 MB0046 Marketing Management - 4 Credits

(Book ID: B1135) Assignment Set- 2 60 Marks Note: Each question carries 10 Marks. Answer all the questions. Q.1 Explain the following: a) Product mix dimensions b) Product line strategies [10 marks] Ans: a) Product Mix
Product mix: The number of product lines and items offered by marketer to the consumers A companys product mix has four different dimensions. They are product mix width, product mix length, product mix depth and product mix consistency. The following shows the product mix of Jyothy Laboratories: House hold Utensil Allied Fabric care insecticide cleaners Fragrances Personal care business
Jeeva Natural (Coconut Milk with Milk Protein, Coconut Milk with Jasmine and Coconut Ujala supreme Exo dish Maya Milk with Maxo wash bar Kasturi cyclothrin coil (9ml, 30ml, (8, 15, 20, 40 Manjal, and is 75ml, (100g, 200g and 100 presented in Continental 125ml,250ml) (8hr, 10hr, 12hr) 380g) sticks.) 75gm packs. ) special Ujala washing powder Max vaporizer (25g, 500g, 1Kg) Stiff & shine (30ml, 45ml) Max aerosol (500ml, 125ml) Marketing of godrej Tea Marketing of Ekta dhoop Exo dish wash liquid

(20gm sachets, (150ml,300ml) 100ml and

200ml bottles)

Product mix width: The total number of product lines that company offers to the consumers. For example, Jyothy Laboratories product mix has six lines. Hence the width is 6

Product mix length: The total number of items that company carries within its product line. For example, Jyothy Laboratories fabric care division has three items

Product line depth: The number of versions offered of each product in the line. For example, Jyothy Laboratories Jeeva Natural is offered in three versions i.e. Coconut Milk with Milk Protein, Coconut Milk with Jasmine and Coconut Milk with Kasturi Manjal, and is presented in 75gm packs. Product mix consistency: If companys product lines usage, production and marketing are related, then product mix is consistent, else it is unrelated. In the case of Jyothy Laboratories, all six product lines are FMCGs. Hence it is having consistent product mix. But ITC Companys cigarette and cloth product lines are totally unrelated.\

Ans: Product Line Startegies b): Product line: The group of related products which uses same marketing efforts to reach
the consumer. The product line identifies profitable and unprofitable products and helps in allocation of

resources according to that. The product line understanding helps the marketer to take line extension, line pruning and line filling strategies of the company. Pidilite Industries, the adhesives and chemical company, have the following group of related products (or product lines) in consumer and business markets. Consumer market. 1. Adhesives and sealants. 2. Art materials and stationeries. 3. Construction chemicals. 4. Automotive chemicals 5. Fabric care Business market 1. Industrial adhesives. 2. Textile chemicals. 3. Organic pigment powders. 4. Industrial resins and 5. Leather chemicals. Product Line Decisions: The major product line decisions are a. Product line length b. Product line stretching c. Product line filling d. Product line pruning a. Product line length: The number of items in the product line is called the product line length. Company should decide whether it requires longer chain or shorter length. The decision depends upon the objective of the company, competitive environment and profitability. If the chain is short company can add new products and if it is lengthy company can reduce the number of products. For example, Pidilites adhesives and sealants line has following 11 items in the product line. Hence the length of product line is 11 1. White Glue 2. Paper Glue 3. Glue Stick 4. Instant Adhesive 5. Epoxy Putty 6. Epoxy Adhesive 7. PVC Insulation

Tape 8. Silicone Sealants 9. Contact Glue 10. All Purpose Glue 11. Maintenance Spray b. Product line stretching: Company lengthens its product line either by stretching upwards or downwards or both ways. Line stretching decision depends on three situations:i. Company which operates in high end market may come up with mid class or low class targeted products. ii. The company which operates in lower end of market may come up with high end market products. iii. If the company operates in mid segment and comes out with low end product as well as high end product then it is stretching both ways. For example, Maruti Suzuki Limited launched its first product, Maruti 800 in the year 1983 and in the year 1985 it launched Maruti Gypsy. Gypsy is costlier than Maruti 800 and targeted for higher segment. This shows that the company extended its product line upwards or in short, upward stretch. Tata Motors launched their Rs 1 lakh car NANO in the year 2008. The company which was targeting upper class and middle class with their products SUMO and Indica respectively, has stretched downwards to reach the lower level segment. This illustrates the downward stretch. Toyota Kirloskar Limited which extended their line from Qualis and Corolla to Innova and Camry is planning to come out with small car in India. This clearly illustrates the two way stretch of the product line. c. Product line filling: Adding more items in the present product line. For example, in the year 2000 Maruti Suzuki launched Alto. This product was between Maruti 800 and Maruti Zen. Here company was trying to fill the gap existing in the segment by introducing ALTO, i.e. line filling. d. Product line pruning: Removing the unprofitable products form the product line. Toyota Kirloskar phased out their well known brand Qualis when they thought the brand

was not adding value to the product line.

Q.2 a) Assess the factors that are involved in setting up a distribution channel. [6 marks]

Ans:
As noted, distribution channels often require the assistance of others in order for the marketer to reach its target market. But why exactly does a company need others to help with the distribution of their product? Wouldnt a company that handles its own distribution functions be in a better position to exercise control over product sales and potentially earn higher profits? Also, doesnt the Internet make it much easier to distribute products thus lessening the need for others to be involved in selling a companys product? While on the surface it may seem to make sense for a company to operate its own distribution channel (i.e., handling all aspects of distribution) there are many factors preventing companies from doing so. While companies can do without the assistance of certain channel members, for many marketers some level of channel partnership is needed. For example, marketers who are successful without utilizing resellers to sell their product (e.g., Dell Computers sells mostly through the Internet and not in retail stores) may still need assistance with certain parts of the distribution process (e.g., Dell uses parcel post shippers such as FedEx and UPS). In Dells case creating their own transportation system makes little sense given how large such a system would need to be in order to service Dells customer base. Thus, by using shipping companies Dell is taking advantage of the benefits these services offer to Dell and to Dells customers.

Benefits Offered by Channel Members

When choosing a distribution strategy a marketer must determine what value a channel member adds to the firms products. Remember, as we discussed in the Product Decisions tutorial, customers assess a products value by looking at many factors including those that surround the product (i.e., augmented product). Several surrounding features can

be directly influenced by channel members, such as customer service, delivery, and availability. Consequently, for the marketer selecting a channel partner involves a value analysis in the same way customers make purchase decisions. That is, the marketer must assess the benefits received from utilizing a channel partner versus the cost incurred for using the services. These benefits include: Cost Savings in Specialization Members of the distribution channel are specialists in what they do and can often perform tasks better and at lower cost than companies who do not have distribution experience. Marketers attempting to handle too many aspects of distribution may end up exhausting company resources as they learn how to distribute, resulting in the company being a jack of all trades but master of none. Reduce Exchange Time Not only are channel members able to reduce distribution costs by being experienced at what they do, they often perform their job more rapidly resulting in faster product delivery. For instance, consider what would happen if a grocery store received direct shipment from EVERY manufacturer that sells products in the store. This delivery system would be chaotic as hundreds of trucks line up each day to make deliveries, many of which would consist of only a few boxes. On a busy day a truck may sit for hours waiting for space so they can unload their products. Instead, a better distribution scheme may have the grocery store purchasing its supplies from a grocery wholesaler that has its own warehouse for handling simultaneous shipments from a large number of suppliers. The wholesaler will distributes to the store in the quantities the store needs, on a schedule that works for the store, and often in a single truck, all of which speeds up the time it takes to get the product on the stores shelves. Customers Want to Conveniently Shop for Variety Marketers have to understand what customers want in their shopping experience. Referring back to our grocery store example, consider a world without grocery stores and instead each marketer of grocery products sells through their own stores. As it is now, shopping is time consuming, but consider what would happen if customers had to visit multiple retailers each week to satisfy their grocery needs. Hence, resellers within the channel of distribution serve two very important needs: 1) they give customers the products they want by purchasing from many suppliers (termed accumulating and assortment services), and 2) they make it convenient to purchase by making products available in single location. Resellers Sell Smaller Quantities Not only do resellers allow customers to purchase products from a variety of suppliers, they also allow customers to purchase in quantities that work for them. Suppliers though like to ship products they produce in large quantities since this is more cost effective than shipping smaller amounts. For instance, consider what it costs to drive a truck a long distance. In terms of operational expenses for the truck (e.g., fuel, truck drivers cost) lets assume it costs

(US) $1,000 to go from point A to point B. Yet in most cases, with the exception of a little decrease in fuel efficiency, it does not cost that much more to drive the truck whether it is filled with 1000 boxes containing the product or whether it only has 100 boxes. But when transportation costs are considered on a per product basis ($1 per box vs. $10 per box) the cost is much less for a full truck. The ability of intermediaries to purchase large quantities but to resell them in smaller quantities (referred to as bulk breaking) not only makes these products available to those wanting smaller quantities but the reseller is able to pass along to their customers a significant portion of the cost savings gained by purchasing in large volume. Create Sales Resellers are at the front line when it comes to creating demand for the marketers product. In some cases resellers perform an active selling role using persuasive techniques to encourage customers to purchase a marketers product. In other cases they encourage sales of the product through their own advertising efforts and using other promotional means such as special product displays. Offer Financial Support Resellers often provide programs that enable customers to more easily purchase products by offering financial programs that ease payment requirements. These programs include allowing customers to: purchase on credit; purchase using a payment plan; delay the start of payments; and allowing trade-in or exchange options. Provide Information Companies utilizing resellers for selling their products depend on distributors to provide information that can help improve the product. High-level intermediaries may offer their suppliers real-time access to sales data including information showing how products are selling by such characteristics as geographic location, type of customer, and product location (e.g., where located within a store, where found on a website). If high-level information is not available, marketers can often count on resellers to provide feedback as to how customers are responding to products. This feedback can occur either through surveys or interviews with resellers employees or by requesting the reseller allow the marketer to survey customers.

Distribution channels are the methods that companies use to enter the consumer market with their product. While many methods exist, they have changed over the years because of the Internet and global sales.

Definition
o

A distribution channel is the method a company uses to get its products into the marketplace for consumer use. The traditional channel goes from supplier, manufacturer, distributor, wholesaler and retailer. Two types of distribution channels exist: indirect and direct.

Indirect Channel
o

The indirect channel is used by companies who do not sell their goods directly to consumers. Suppliers and manufacturers typically use indirect channels because they exist early in the supply chain. Depending on the industry and product, direct distribution channels have become more prevalent because of the Internet.

Direct Channel
o

A direct distribution channel is where a company sells its products direct to consumers. While direct channels were not popular many years ago, the Internet has greatly increased the use of direct channels. Additionally, companies needing to cut costs may use direct channels to avoid middlemen markups on their products.

Indirect Channel Methods

o

Distributors, wholesalers and retailers are the primary indirect channels a company may use when selling its products in the marketplace. Companies choose the indirect channel best suited for their product to obtain the best market share; it also allows them to focus on producing their goods.

Direct Channel Methods

o

Selling agents and Internet sales are two types of direct distribution channels. Selling agents work for the company and market their products directly to consumers through mail order, storefronts or other means. The Internet is an easy distribution channel because of the global availability to consumer.

b) Give a note on Retailing. [4 marks] Ans:

"Retail stores" redirects here. For the comic strip by Norm Feuti, see Retail (comic strip).

Drawing of a self-service store.

Retail consists of the sale of goods or merchandise from a fixed location, such as adepartment store, boutique or kiosk, or by mail, in small or individual lots for directconsumption by the purchaser. [1] Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in ashopping mall. Shopping streets may be

for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type ofelectronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.
Contents
[hide]

1 Etymology 2 Types of retail outlets 3 Retail pricing 4 Transfer mechanism 5 Second hand retail 6 Sales techniques 7 Customer service 8 Retail Sales 9 Consolidatio n 10 Bibliograph y 11 See also 12 Notes 13 External links

[edit]Etymology

The Apple Store retail location on theMagnificent Mile in Chicago.

The world's only Garmin retail location is located on the Magnificent Mile in Chicago.

Retail comes from the Old French word retailer(compare modern French retailler), which means "to cut off, clip, pare, divide" in terms of tailoring (1365[citation needed]). It was first recorded as a noun with the meaning of a "sale in small quantities" in 1433[citation needed] (from the Middle French retail, "piece cut off, shred, scrap, paring").[2] Like the French, the word retail in both Dutch and German (detailhandeland Einzelhandel, respectively) also refers to the sale of small quantities of items.
[edit]Types

of retail outlets

San Juan de Dios Market in Guadalajara, Jalisco

Inside a supermarket in Russia

A marketplace is a location where goods and services are exchanged. The traditionalmarket square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world. In some parts of the world, the retail business is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. Retail is usually classified by type of products as follows: Food products Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc. Soft goods - clothing, apparel, and other fabrics.

There are the following types of retailers by marketing strategy: Department stores - very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service.

Discount stores - tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands. Supermarkets - sell mostly food products; Warehouse stores - warehouses that offer low-cost, often highquantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee; Variety stores or "dollar stores" - these offer extremely low-cost goods, with limited selection; Demographic - retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals). Mom-And-Pop : is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are familyrun businesses. The square feet area of the store depends on the store holder. Specialty stores: A typical speciality store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be regarded as a specialty store. However, branded stores also come under this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores. General store - a rural store that supplies the main needs for the local community; Convenience stores: is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases. Hypermarkets: provides variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. *Supermarkets: is a self service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The

supermarkets can be anywhere between 20,000 and 40,000 square feet. Example: SPAR supermarket. Malls: has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Category killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer's doorstep. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However it is important for the customer to be wary about defective products and non secure credit card transaction. Example: Amazon, Pennyful and Ebay. Vending Machines: This is an automated piece of equipment wherein customers can drop in the money in machine and acquire the products. Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Other types of retail store include: Automated Retail stores are self service, robotic kiosks located in airports, malls and grocery stores. The stores accept credit cards and are usually open 24/7. Examples include ZoomShops and Redbox. Big-box stores encompass larger department, discount, general merchandise, and warehouse stores.

Convenience store - a small store often with extended hours, stocking everyday or roadside items; General store - a store which sells most goods needed, typically in a rural area;

Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display products well and entice the target customers to spawn sales.
[edit]Retail

pricing

The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailer's cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer. In Western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly displayed, there can be price discrimination, where the sale price is dependent upon who the customer is. For example, a customer may have to pay more if the seller determines that he or she is willing and/or able to. Another example would be the practice of discounting for youths, students, or senior citizens..
[edit]Transfer

mechanism

There are several ways in which consumers can receive goods from a retailer: Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries like India.[which?] Delivery, where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalog was invented in 1744

and was common in the late 19th and early 20th centuries. Ordering by telephone is now common, either from a catalog, newspaper,television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery). Direct marketing, includingtelemarketing and television shopping channels, are also used to generate telephone orders. started gaining significant market share in developed countries in the 2000s. Door-to-door sales, where the salesperson sometimes travels with the goods for sale. Self-service, where goods may be handled and examined prior to purchase
[edit]Second

hand retail

See also: Charity shop Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goods to the shop to be sold. In give-away shopsgoods can be taken for free. Another form is the pawnshop, in which goods are sold that were used as collateral for loans. There are also "consignment" shops, which are where a person can place an item in a store and if it sells, the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop gives the item exposure to more potential buyers. ChallengesTo become a truly flourishing industry, retailing needs to cross the following hurdles:[18] Automatic approval is not allowed for foreign investment in retail. Regulations restricting real estate purchases, and cumbersome local laws. Taxation, which favours small retail businesses. Absence of developed supply chain and integrated IT management. Lack of trained work force. Low skill level for retailing management. Lack of Retailing Courses and study options Intrinsic complexity of retailing rapid price changes, constant threat of product obsolescence and low margins
[edit]Sales

techniques

Behind the scenes at retail, there is another factor at work. Corporations and independent store owners alike are always trying to get the edge on their competitors. One way to do this is to hire a merchandising solutions company to design custom store displays that will attract more customers in a certain demographic. The nation's largest retailers spend millions every year on in-store marketing programs that correspond to seasonal and promotional changes. As products change, so will a retail landscape. Retailers can also use facing techniques to create the look of a perfectly stocked store, even when it is not. A destination store is one that customers will initiate a trip specifically to visit, sometimes over a large area. These stores are often used to "anchor" a shopping mall or plaza, generating foot traffic, which is capitalized upon by smaller retailers.
[edit]Customer

service

Customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment." It is important for a sales associate to greet the customer and make himself available to help the customer find whatever he needs. When a customer enters the store, it is important that the sales associate does everything in his power to make the customer feel welcomed, important, and make sure he leave the store satisfied. Giving the customer full, undivided attention and helping him find what he is looking for will contribute to the customer's satisfaction.[3]
[edit]Retail

Sales

US Retail Sales 19922010

The Retail Sales report is published every month. It is a measure of consumer spending, an important indicator of the US GDP. Retail firms provide data on the dollar value of their retail sales and inventories. A sample of 12,000 firms is included in the final survey and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail &food services sample.[4] It has been published by the US Census Bureau since 1951.
[edit]Consolidation

Among retailers and retails chains a lot of consolidation has appeared over the last couple of decades. Between 1988 and 2010, worldwide 40'788 mergers & acquisitions with a total known value of 2'255 bil. USD have been announced.[5] The largest transactions with involvement of retailers in/from the United States have been: the acquisition of Albertson's Inc. for 17 bil. USD in 2006,[6] the merger between Federated Department Stores Inc with May Department Stores valued at 16.5 bil. USD in 2005[7] - now Macy's, and the merger between Kmart Holding Corp and Sears Roebuck & Co with a value of 10.9 bil. USD in 2004.[8]
[edit]Bibliography

Krafft, Manfred; Mantrala, Murali K. (eds.) (2006). Retailing in the 21st century: current and future trends. New York: Springer Verlag.ISBN 3540283994.
[edit]

Q. 3 Geo Ad Agency has many corporates as their clients. Due to lack of resources, it is planning to cut down work and reject certain clients. Further, they want to establish a

concrete system in communication development and ad structure. What would be your advice to Geo Ad agency in this aspect? [10 marks] Q.4 Discuss the objectives of training and training programme along with its significance. [10 marks]

Ans:

Training objectives are one of the most important parts of training program. While some people think of training objective as a waste of valuable time. The counterargument here is that resources are always limited and the training objectives actually lead the design of training. It provides the clear guidelines anddevelops the training program in less time because objectives focus specifically on needs. It helps in adhering to a plan. Training objective tell the trainee that what is expected out of him at the end of the training program. Training objectives are of great significance from a number of stakeholder perspectives, 1. 2. 3. 4. Trainer Trainee Designer Evaluator

Trainer The training objective is also beneficial to trainer because it helps the trainer to measure the progress of trainees and make the required adjustments. Also, trainer comes in a position to establish a relationship between objectives and particular segments of training.

Trainee The training objective is beneficial to the trainee because it helps in reducing the anxiety of the trainee up to some extent. Not knowing anything or going to a place which is unknown creates anxiety that can negatively affect learning. Therefore, it is important to keep the participants aware of the happenings, rather than keeping it surprise. Secondly, it helps in increase in concentration, which is the crucial factor to make the training successful. The objectives create an image of the training program in trainees mind that actually helps in gaining attention. Thirdly, if the goal is set to be challenging and motivating, then the likelihood of achieving those goals is much higher than the situation in which no goal is set. Therefore, training objectives helps in increasing the probability that the participants will be successful in training. Designer The training objective is beneficial to the training designer because if the designer is aware what is to be achieved in the end then hell buy the training package according to that only. The training designer would then look for the training methods, training equipments, and training content accordingly to achieve those objectives. Furthermore, planning always helps in dealing effectively in an unexpected situation. Consider an example; the objective of one training program is to deal effectively with customers to increase the sales. Since the objective is known, the designer will design a training program that will include ways to improve the interpersonal skills, such as verbal and non verbal language, dealing in unexpected situation i.e. when there is a defect in a product or when a customer is angry.

Therefore, without any guidance, the training may not be designed appropriately.

Evaluator It becomes easy for the training evaluator to measure the progress of the trainees because the objectives define the expected performance of trainees. Training objective is an important to tool to judge the performance of participants.

Q.5 Management of Sai Systems Pvt. Ltd. has decided to enter international marketing scenario. What methods are applicable to the company to enter international markets and what should be the approach? [10 marks] Q.6 a) Give a note on Product mix pricing strategies. [5 marks].
Ans) Product Mix Pricing Strategies 1. Product Line pricing: Strategy of setting the price for entire product line. Marketer differentiates the price according to the range of products, i.e. suppose the company is having three products in low, middle and high end segment and prices the three products say at Rs 10 Rs 20 and Rs 30 respectively.

In the above example of Nokia mobile phones Nokia 1110 is priced @ Rs 1349, Nokia 7610 priced @ Rs 6249 and Nokia E90 priced @ Rs 34599. All the three products cater to the different segments low, middle and high income group respectively. The three levels of differentiation create three price points in the mind of consumer. The task of marketer is to establish the perceived quality among the three segments. If the customers do not find much difference between the three brands, he/she may opt for low end products. 2. Optional Product pricing: this strategy is used to set the price of optional or

accessory products along with a main product.

Maruti Suzuki will not add above accessories to its product Swift but all these are optional. Customer has to pay different prices as mentioned in the picture for different products. Organizations separate these products from main product so that customer should not perceive products are costly. Once the customer comes to the show room, organization explains the advantages of buying these accessory products. 3. Captive product pricing: Setting a price for a product that must be used along with a main product. For example, Gillette sells low priced razors but make money on the replacement cartridges. 4. By-product pricing: It is determining the price for by-products in order to make the main products price more attractive. For example, L.T. Overseas, manufacturers of Dawaat basmati rice, found that processing of rice results in two by-products i.e. rice husk and rice brain oil. If the company sells husk and brain oil to other consumers, then company is adopting by-product pricing. 5. Product bundle pricing: It is offering companies several products together as a bundle at the reduced price. This strategy helps companies to generate more volume, get rid of the unused products and attract the price conscious consumer. This also helps in locking the customer from purchasing the competitors products. For example, Anchor toothpaste and brush are offered together at lower prices.

b) What is Brand development? How is it done? [5 marks]

Ans:
Brand Name A name, term, design, symbol, or any other feature that identifies one sellers good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name Brand name: Axe Axe was launched in France in 1983 by Unilever. It was inspired by another of Unilever's brands, Impulse. Unilever were keen to capitalize on Axe's French success and the rest of Europe from 1985 onwards, later introducing the other products in the range. Unilever were unable to use the name Axe in the United Kingdom and Ireland due to trademark problems so it was launched as Lynx Although Axe's lead product is the fragranced aerosol deodorant body spray, other formats of the brand exist. Within underarm care the following are available: deodorant aerosol body spray, deodorant stick, deodorant roll-on, anti-perspirant aerosol spray (called Axe Dry), and anti-perspirant stick (also called Axe Dry). The attribute of the brand that customer associates with his/ her belief. A person may associate the brand for power, strength or protectiveness. For example, a customer may associate Axe brand not just for perfumes but also any accessory associated with perfumes such as Shampoos etc. So, for him, Axe represents perfume. Brand Equity Brand equity is set of assets linked to a brands name and symbol that adds value to the product or service and/or that firms customer. Components of brand equity: 1. Brand loyalty: From its launch (Axe), the yearly fragrance variant has played a key part in the success of the brand by offering something new each year. 2. Brand awareness: The type of fragrance (Axe) variants have evolved over time. From 1983 until about 1989, the variant names were descriptions of the fragrances and included Musk, Spice, Amber, Marine, and Oriental. 3. Perceived quality 4. Brand associations: Axe also launches limited edition variants from time to time that may be on sale for a few months or over a year.

Eg:
5.b)Brand provides the image to the product. Brand should be careful in selecting a proper name for the brand for eg:of the watches. Brand Name: Titan There are six suggestions from Philip Kotler to create a successful brand name. They are 1. It should suggest something about the product benefits and qualities; e.g. Titan 2. It should be easy to pronounce, recognize, and remember 3. The brand name should be distinctive 4. It should be extendable 5. The name should be easily translated into a foreign language 6. It should be capable of registration and legal protection e.g. Titan is a registered brand and other brands cannot compete with it using any similar sounding name. Brand managers have four options of sponsoring the brand. They are 1. Manufacturer brand 2. Private brand 3. Licensing 4. Co- branding

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