2 and 16 marks marketing management
TRANSCRIPT
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BA7203 Marketing Management
UNIT – I
Par t A
1. Differentiate between Selling an Marketing !Ma" # $%ne 200&'
Marketing Selling
Focuses on customer needs Focuses on seller needs
Customer enjoys supreme importance Product enjoys supreme Importance
converting customer needs into product Converting product into cash
Profits through customer satisfaction Profits through sales volume
Principle of caveat vendor is followed principle of caveat emptor is followed
2. ()at * "*% mean b" marketing +r*,e-- (MAY/!"# $%%&'
It is a process that a firm should find a way to discover unfulfilled customer needs
and ring to mar)et products that satisfy those needs* +he process of doing so can e
modeled in a se,uence of steps which includes situational analysis- mar)eting strategy-
mar)eting mi. elements and implementation and control*
3. ()at i- marketing (N/#D 200&'
Mar)eting is a social and managerial function that attempts to create- e.pand and
maintain a collection of customers* It attempts to deliver demand satisfying output
through profitale e.changes*
Mar)eting is the process of raising the standards of living- y identifying the e.isting
prolems and unsatisfied needs of people and then satisfying that need with a
product/service that delivers value to the customer*
. ()at are t)e fa,t*r- affe,ting marketing en4ir*nment (N/#D 200&'
• i0e and 1rowth
• Profitaility
• Cost structure
• 2istriution systems
• Mar)et trends
• 3ey uccess factors
5. ()at i- gl*bal en4ir*nment !MA6#$UN 2007'
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1loal firms plan- operate and coordinate their activities on a worldwide
asis- for which they need to study gloal environment* 1loal environment has
such factors as political- legal- social- cultural and economic forces that
fundamentally affect the strategic usiness positions at gloal level*
&. Define intr*%,ti*n -tage *f P. !MA6#$UN 2007'
Introduction is the early stage- when product is introduced in mar)et- sales
revenue egins to grow ut the rate of growth is very slow*Profits may not e
there as there is low sales volume- large production and distriution costs* It may
re,uire heavy advertising and sales promotion* Products are rought cautiously
on a trail asis*
7. ()at are t)e -*,i*8e,*n*mi, fa,t*r- in -egmentati*n (MA6#$UN 2007'
ocio4economic factors in segmentation include social class- lifestyle-
occupation- income- density- and family life cycle and investment trends of
uyers5
9. Define t)e :Marketing *n,e+t:. !N/#D 2007'
Mar)eting is a societal process that is needed to discern consumers6 wants7
focusing on a product/service to those wants- and to mould the consumers towards the
products/services* Mar)eting is fundamental to any usinesses growth* +he mar)eting
teams (Mar)eters' have the tas) to create the consumer awareness of the
products/services through mar)eting techni,ues7 if a usiness does not pay attention to
their products/services and their consumers6 demographics- the usiness would not e
ale to endure longevity*
;. ()at i- Marketing !Ma" # $%ne 2009'
8efer 9uestion "umer : !N*4 # De, 200&'
10. ()at i- +r*%,ti*n ,*n,e+t !N/#D 2009'
+he production concept is the philosophy that consumers will favor products that
are availale and highly affordale*+his philosophy states that any amount of goods
produced will sell if it is availale and affordale to customers*;hen firms adopt thisconcept- generally they produce goods on a mass production level- to e ale to produce
large ,uantities- therefore ma)e it more availale7 investing in technology is essential- to
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reduce the costs of production and ma)e it more affordale*+he management is re,uired
to focus mostly on improving the production and distriution of a part
11. ()at i- -elling ,*n,e+t !N/#D 2009'
elling concept6s aim is to convert the product into cash*Firms adopting this
philosophy do not produce goods and services in line with people6s need and wants
ecause they try to create demand for that particular product themselves*+he management
should concentrate on finding ways to increase production* Also firms adopting this
concept must invest a lot financially- in conducting research and in uilding relationships
with their customers*+he achievement of sales and mar)eting ojectives of the firm y the
salesperson y providing services and solutions to customers6 prolems in addition to
ta)ing orders
12. ()at i- a market ()at are t)e t"+e- *f market !MA6#$UN8 200;'
In mar)eting- the term market refers to the group of consumers or organi0ations
that is interested in the product- has the resources to purchase the product- and is
permitted y law and other regulations to ac,uire the product*A pulic place where uyers
and sellers ma)e transactions- directly or via intermediaries* Also sometimes means the
stoc) mar)et*
T"+e- *f Market<
• "iche mar)et
• Farm mar)et
• toc) mar)et
• Commodity mar)et
• Currency mar)et
•
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+he micro4environment of an organi0ation can est e understood as comprising
all those >ther organi0ations and individuals who directly or indirectly affect the
activities of the >rgani0ation* +he following )ey groups can e identified?
> Customers
@ Intermediaries
@ uppliers
@ >ther sta)eholders
Ma,r*8n4ir*nment
+he macro4environment comprises general trends and forces which may not
immediately affect the relationships that a company has with its customers- suppliers and
intermediaries ut sooner or later- macro4environmental change will alter the nature of
these relationships*
• +he Political #nvironment
• +he ocial and Cultural #nvironment
• +he 2emographic #nvironment*
• +he +echnological #nvironment
15. ()at are *b?e,ti4e- *f Marketing !$%ne 2011'
* +o satisfy the customer-$* +o achieve organi0ational goals and ojectives:* 2elivering the desired satisfactions*B* Anticipate the needs and wants of consumers and* +o satisfy these more effectively than competitors*
1&. ()at i- meant b" Mi,r* en4ir*nment !$%ne 2011'
Mi,r*8n4ir*nment<
+he micro4environment of an organi0ation can est e understood as comprising
all those >ther organi0ations and individuals who directly or indirectly affect the
activities of the >rgani0ation* +he following )ey groups can e identified?
@ Customers
@ Intermediaries
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@ uppliers
@ >ther sta)eholders
17. i-t an" tw* ifferen,e between ,*n-%mer an in%-trial market
,)ara,teri-ti,-!N*4 # De, 2010'
19.
Define Ma-- ,%-t*mi@ati*n.
It is the aility of the company to prepare on a mass asis individually designed
products- services- programs and communications* (2e
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#nvironmental analysis determines environmental changes and predicts future
changes in the environment* +he mar)eting manager should e ale to determine possile
threats and opportunities from the changing environment7 +his will help avoid crisis
management
Si n4ir*nmental *r,e-
• ocietal
• 8egulatory
o Political
o Degal
o 8egulatory
• Competitive
• +echnology• "atural
n4ir*nmental 4ariable-<
+he Internal Analysis of strengths and wea)nesses focuses on internal factors that
give an organi0ation certain advantages and disadvantages in meeting the needs of its
target mar)et* trengths refer to core competencies that give the firm an advantage in
meeting the needs of its target mar)ets*Any analysis of company strengths should e
mar)et oriented/ customer focused ecause strengths are only meaningful when they
assist the firm in meeting customer needs*
;ea)nesses refer to any limitations a company faces in developing or
implementing a strategy* ;ea)nesses should also e e.amined from a customer
perspective ecause customers often perceive wea)nesses that a company cannot see*
nly those
strengths that relate to satisfying a customer need should e considered true core
competencies*
+he following area analyses are used to loo) at all internal factors affecting a company?
• %-t*mer anal"-i-< egments- motivations- unmet needs
• *m+etiti4e anal"-i-< Identify completely- put in strategic groups- evaluate
performance- image- their ojectives- strategies- culture- cost structure- strengths-
wea)ness
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• Market anal"-i-< >verall si0e- projected growth- profitaility- entry arriers- cost
structure- distriution system- trends- )ey success factors
• n4ir*nmental anal"-i-< +echnological- governmental- economic- cultural-
demographic- scenarios- information4need areas
• C*al< +o identify e.ternal opportunities- threats- trends- and strategic uncertainties
An environmental analysis is the four dimension of the #.ternal Analysis* +he interest
is in environmental trends and events that have the potential to affect strategy* +his
analysis should identify such trends and events and the estimate their li)elihood and
impact* ;hen conducting this type of analysis- it is easy to get ogged down in an
e.tensive- road survey of trends* It is necessary to restrict the analysis to those areas
relevant enough to have significant impact on strategy*+his analysis is divided into five
areas? economic- technological- political4legal- socio4cultural- and future*
2. )**-e a ,*m+an" *f "*%r ,)*i,e an e+lain )*w mi,r* en4ir*nmental fa,t*r-
affe,ting it- *+erati*n-. (N/#D 200&'
Mi,r* n4ir*nmental a,t*r-<
+hese are internal factors close to the company that have a direct impact on the
organi0ations strategy* +hese factors include?
%-t*mer-
>rgani0ations survive on the asis of meeting the needs- wants and providing
enefits for their customers* Failure to do so will result in a failed usiness strategy*
m+l*"ee-
#mploying the correct staff and )eeping these staff motivated is an essential part
of the strategic planning process of an organi0ation* +raining and development plays an
essential role particular in service sector mar)eting in4order to gain a competitive edge*
+his is clearly apparent in the airline industry*
S%++lier-
Increase in raw material prices will have a )noc) on affect on the mar)eting mi.
strategy of an organi0ation* Prices may e forced up as a result* Closer supplier
relationships are one way of ensuring competitive and ,uality products for an
organi0ation*
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S)are)*ler-
As organi0ation re,uire greater inward investment for growth they face increasing
pressure to move from private ownership to pulic* Eowever this movement unleashes
the forces of shareholder pressure on the strategy of organi0ations* atisfying shareholder
needs may result in a change in tactics employed y an organi0ation* Many internet
companies who share prices roc)eted in and early $%%% have seen the share price
tumle as they face pressures I mm shareholders to turn in a profit* In a mar)et which has
very ,uic)ly ecome overcrowded many will fall*
Meia
Positive or adverse media attention on an organi0ations product or service can in
some cases ma)es or rea)s organi0ations* In the !3 the adverse pulicity the
Millennium 2ome has received has had impact on projected sales figures* ;harf dale
who recently entered the 2G2 mar)et has received many awards from industry maga0ine
resulting in an increased demand for this product and most importantly an increasedawareness of the ;harf dale rand*
Consumer programmes on +G li)e the
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product development or customer service* Mar)eting should e involved- and there
should e a meeting of the minds- whenever discussions are held regarding new product
development or any customer4related function of the company*
It is very important that the mar)eting department get input from many people within
the company* "ot only does providing input help the rest of the company understand and
support the mar)eting efforts- it also provides some invaluale insights into what
customers want and new ideas that may have slipped past the rest of the company*
perations will need to use sales forecasts produced y the mar)eting department to plan
their production schedules*ales forecasts will also e an important part of the udgets
produced y the finance department- as well as the deployment of laor for the human
resources department*A research and development department will need to wor) very
closely with the mar)eting department to understand the needs of the customers and to
test outputs of the 82 section*
. +lain marketing ,*n,e+t an ,*m+are wit) -elling ,*n,e+t. Ci4e
eam+le-. (MA6#$UN 2007'
+he mar)eting concepts holds that the )ey to achieving organi0ationalJ
goals consists of the company eing more effective than competitors j in creating-delivering- and communicating superior customer value to it s chosen target
mar)ets* +he asic difference etween mar)eting *and selling lies in the attitude towards
usiness* +he selling concept hi)es an in-ie8*%t perspective*
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It starts with the factory- focuses on the company6s e.isting products- *and calls for
heavy selling and promoting to produce profitale sales* +he mar)eting concept ta)es an
*%t-ie8in perspective* It starts with n well4defined mar)et- focuses on customer needs-
coordinates all the activities that will affect customers- and produces profits through
Creating customer satisfaction*
Marketing Selling
Focuses on customer needs Focuses on seller needs
Customer enjoys supreme importance Product enjoys suprem Importance
converting customer needs into product Converting product into cash
Profits through customer satisfaction Profits through sales volume
Principle of caveat vendor is followed principle of caveat emptor is followed
5. Di-,%-- marketing en4ir*nment *n t*a"- ,*m+etiti4e w*rl. (MA6#$UN
2007'
+he organi0ation operates within the larger framewor) of the e.ternal
environment that shapes opportunities and poses threats to the >rgani0ation* +he e.ternal
environment is a set of comple.- rapidly changing and significant interacting institutions
and forces that affect the organi0ation6s aility to serve its customers* #.ternal forces are
uncontrolled y an organi0ation- ut they may e influenced or it fleeted y that
organi0ation* It is necessary for organi0ations to understand the environmental conditions
ecause they interact with trategy decisions* +he e.ternal environment has a major
impact on the determination of mar)eting decisions* uccessful organi0ations can in their
e.ternal environment so that they can respond profitaly id unmet needs and trends in the
targeted mar)ets*>rgani0ations closely monitor their customer mar)ets in order to adjust
to changing tastes and preferences* A mar)et is people or organi0ations with wants to
satisfy- money to spend- and the willingness to spend it* #ach target mar)et has distinct
needs- which need to e monitored* It is imperative for an organi0ation to )now their
customers- how to reach them and when customers6 needs change in order to adjust its
mar)eting efforts accordingly* +he mar)et is the focal point for all mar)eting decisions in
an organi0ation*
Consumer mar)ets are individuals and households that uy goods and services for
personal consumption*
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resell them at a profit* 1overnment mar)ets are agencies that uy goods and services in
order to produce pulic services or transfer them to those that need them* +he federal
government is the largest uyer in the !nited tates* International mar)ets consist of
uyers in other countries*
+he mar)eting environment surrounds and impacts upon the organi0ation* +here
are three )ey perspectives on the mar)eting environment- namely the 6macro4
environment-6 the 6microenvironment6 and the 6internal environment6*
T)e mi,r*8en4ir*nment
+his environment influences the organi0ation directly* It includes suppliers that
deal directly or indirectly- consumers and customers- and other local sta)eholders* Micro
tends to suggest small- ut this can e misleading* In this conte.t- micro descries the
relationship etween firms and the driving forces that control this relationship* It is a
more local relationship- and the firm may e.ercise a degree of influence*
T)e ma,r*8en4ir*nment
+his includes all factors that can influence and organi0ation- ut that are out of
their direct control* A company does not generally influence any laws (although it isaccepted that they could loy or e part of +rade organi0ation'* It is continuously
changing- and the company needs to e fle.ile to adapt* +here may e aggressive
competition and rivalry in a mar)et* 1loali0ation means that there is always the lineal of
sustitute products and new entrants* +he wider environment is also ever changing- and
the mar)eter needs to compensate for changes in culture- politics- economics and
technology*
T)e internal en4ir*nment
All factors that are internal to the organi0ation are )nown as the 6internal
environment6* +hey are generally audited y applying the Five Ms6 which are Men-
Money- Machinery- Materials and Mar)ets* +he internal environment is as important for
managing change as +he e.ternal* As mar)eters we call the process of managing internal
change 6internal mar)eting* #ssentially we use mar)eting approaches to aid
communication and change management*
+he e.ternal environment can e audited in more detail using other approaches
such as ;>+ Analysis- Michael Porter6s Five Forces Analysis or P#+ Analysis*
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&. a,t*r- ,*n-iere %ner en4ir*nment anal"-i- t* a b%-ine--. !N/#D 2007'
8efer to 9uestion "umer (May/ un $%%&'
7. +lain marketing en4ir*nment f*r t)e b%-ine-- enter+ri-e *f ,*n-%mer g**-.
!MA6#$UN 2009'
8efer to 9uestion "umer (May/ un $%%&'
9. E*w *e- t)e -%b?e,t marketing )a- interfa,e wit) *t)er f%n,ti*nal area-
!MA6#$UN 2009'
• +he relationship etween mar)eting and other functional areas of the usiness is
important for everyone to understand in order to facilitate the coordination of
firmKs usiness*• For non4mar)eting people the understanding is important to ensure the
interactions flow smoothly and effectively*
• In the finan,ial area- decisions made on credit- accounts receivales and accounts
payale have an effect on the scope of mar)eting*
• +he engineering area similarly ma)es strategic decisions affecting mar)eting* +he
,uality of the final product is of course directly related to engineering decisions*
• Mar)eting may also wor) with +er-*nnel department particularly in areas as
estalishing appropriate jo descriptions and communicating the firms need to the people most ,ualified to fill positions*
• Mar)eting and legal departments must interact on issues as the price of the
product- terms of sale- content of advertising messages- wording of patents and
warranties*
;. =T)e Market +la,e i-n:t w)at it %-e t* be = – Di-,%-- ("ov / 2ec $%%L'
A Mar)et place is the space- actual or metaphorical in which a mar)et operates the
term is also used in a trademar) law conte.t to denote the actual consumer environment*
i*e the real world in which products and services are provided and consumed*A
Mar)etplace is a location where goods and services are e.changed* +he traditional mar)et
s,uare is a city s,uare where traders set up stalls and uyers rowse the merchandise*
+his )ind of mar)et is very old and countless such mar)ets are still in operation around
the whole world*
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suppliers from this new community* ;or)ings closely with the memers of the new
community companies get every chance to increase their usiness dramatically*
*r b%"er +arti,i+ant- a market+la,e *ffer-<
• Dower transaction costs streamlined processing
• Access to new suppliers Mar)etplace participants removes geographical arriers
and provides access to new suppliers
• +ime avings provides for faster approval - ordering processes and delivery
trac)ing*
*r S%++lier-
• 8educed inventory cost4Clearer visiility and forecasting aility allow companies
consideraly reduce inventory cost
• Access to new uyers and mar)ets 4 Mar)etplace provides new sales channel
which opens up many new opportunities for suppliers
• Increased sales4;ider Mar)et indicates Increase in ales* ;hich results in
increased revenue*
• 8educed overhead costs
• 8educed order processing cost
• 8educed sales and support costs
10. +lain t)e Marketing n4ir*nment in etail 8efer to 9uestion "umer (May /
une $%%&'11. Marketing +lanning an ,*ntr*l ,an be ,*n-iere a- t)e ner4e ,enter f*r
Marketing Management.: lab*rate. !MA6#$UN8 200;'
+he process of defining the action steps- priorities and schedules y which the
mar)eting strategy will e implemented and ma)ing * sure that the company is achieving
the ojectives that are stated in the mar)eting plan within the determined udget*
+he following steps and activities of Mar)eting planning and control can e
distinguished and considered most important for Mar)eting Management*
Fe-ear,) *f marketing mi an ,*ntr*l<
Di)e the strategic mar)eting planning process- this process also egins with research and
analysis of the mar)eting and consumer environment*
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n the revenue side it shows forecasted sales volume and average reali0ed
price- on the e.pense side it shows the forecasted cost of production- physical distriution
and mar)eting* +he difference is the e.pected profit*
/b?e,ti4e- -etting<
+he annual ojectives can e stated for the one year strategy (for e.ample- increase
mar)et share y .N or improve rand awareness y yN in that year' as well as for
specific statements concerning mar)eting activities* An e.ample of a specific statement
is? decrease cost of sales force as a percentage of sales- improve advertising awareness or
improving company image* +hese statements have to e ,uantified and a time hori0on has
to e set*
Marketing -trateg" an a,ti*n +r*gram<
;hen the ojectives have een set- the mar)eting managers have to refine the strategic
mar)eting plan to the annual mar)eting plan* pecific mar)eting tactics have to e
developed esides the action programs* +he action programs contain the marching orders
in response to the ,uestion OEow will we get thereH=- and the actual steps y which
strategies will e implemented to reach the estalished ojectives*
*ntr*l
+he last step of the mar)eting planning control process is control- which forms a
distinct process itself* +he control of the annual mar)eting plan will e handled y the
management of the PMC*
+o implement the marketing -trateg"G mar)eting management has to decide what level
of mar)eting e.penditures is necessary to achieve the mar)eting ojectives* +he total
udget has to e allocated among the several mar)eting activities and tools in the
mar)eting mi.* 2uring the implementation of activities- the company has to review the
process of mar)eting and sales activities regularly throughout the year* +hese reviews
provide an opportunity to listen to wea) signals and to redirect any parts of the planned
action program that are off target*
12. )**-e a ,*m+an" *f "*%r ,)*i,e an e+lain )*w internal en4ir*nmentalfa,t*r- affe,t t)e marketing *+erati*n-. (une $%%'
8efer to ,uestion "umer (May/ une $%%&'
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13. +lain t)e *re *n,e+t *f Marketing !$%ne 2011'
/F /NPTS / MAFHTINC
"eeds- wants- and demands7 products (goods- services and ideas'7 value- cost and
satisfaction? e.change and transaction? relationships and networ)s? mar)ets? and
mar)eters and prospects*
a' Nee-
2escrie asic human re,uirements such as food- air- water- clothing- and shelter*
b' (ant
"eeds ecome wants when they are directed to specific ojects that might satisfy the
need*
,' Deman
Are wants for specific products ac)ed y an aility to pay*
' Pr*%,t
Is any offering that can satisfy a need or want- such as one of the % asic offerings of
goods- services- e.periences- events- persons- places- properties- organi0ations-
information- and ideas*
e' al%e
As a ratio etween what the customer gets and what he gives. +he customer gets benefits
and assumes costs, as shown in this e,uation?
Galue
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' ,)ange
@ #.changes are carried out y usiness firms- and also y no usiness
organi0ations and even individuals*
@ Four conditions must e.ist for an e.change to e ale to occur?
+wo or more people or organi0ations must e involved*
+he parties must e involved voluntarily*
#ach party must have something of value to e.change- and the parties
must elieve they will each enefit from the e.change*
+he parties must e ale to communicate with each other*
g' Marketing )annel-<
+o reach a target mar)et- the mar)eter uses three )inds of mar)eting channels*
*mm%ni,ati*n ,)annel- deliver messages to and receive messages from target
uyers*+hey include newspapers- maga0ines- radio- television- mail- telephone-
illoards-posters- fliers- C2s- audiotapes- and the Internet*
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purses starts with hides- tanning operations- cutting operations- manufacturing- and the
mar)eting channels that ring products to customers* +his supply chain represents a value
delivery system* #ach company captures only a certain percentage of the total value
generated y the supply chain* ;hen a company ac,uires competitors or moves upstream
or downstream- its aim is to capture a higher percentage of supply chain value*
i' *m+etiti*n
Competition- a critical factor in mar)eting management- includes all of the actual and
potential rival offerings and sustitutes that a uyer might consider*
* Brand competition: A company sees its competitors as other companies that offer
similar products and services to the same customers at similar prices* Gol)swagen might
see its major competitors as +oyota- Eonda- and other manufacturers of medium price
automoiles- rather than Mercedes or Eyundai*
2. Industry competition: A company sees its competitors as all companies that ma)e the
same product or class of products* +hus- Gol)swagen would e competing against all
other car manufacturers*
3. Form competition: A company sees its competitors as all companies that manufacture
products that supply the same service* Gol)swagen would see itself competing against
manufacturers of all vehicles- such as motorcycles- icycles- and truc)s*
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B* Generic competition: A company sees its competitors as all companies that compete
for the same consumer dollars* Gol)swagen would see itself competing with companies
that sell major consumer durales- foreign vacations- and new homes*
5. Marketing M"*+ia
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activities of the mar)eting department carry out o for e.ample- if the mar)eting
department at +escoKs want to carry out a promotion through direct mail- they would as)
the finance department first7 from there the finance department will decide if they are ale
to fund this type of direct mail promotion. +escoKs would not e ale to carry out this
activity without consulting the finance department- ecause the money only goes in and
out of the finance department* Furthermore when the mar)eting departments need money
for researching and development to design new products to attract potential customers-
they would again consult the finance department who would allocate suitale funds- so
that the mar)eting department can carry out this activity efficiently* +he mar)eting
department at +escoKs may also need money if they want to distriute materials such as
posters with special offers- if they donKt consult the finance department aout this activity-
then the mar)eting department at +escoKs could e losing money * Mar)eting approach to
financial documents offers a new perspective often lac)ing in the financial community*
For e.ample
* !tili0ation of the annual report and other financial for mar)eting
$* Measurement of management tradeoff etween ris) and e.pected return utili0ing
conjoint analysis
:* Assessment of the mar)et response functions to changes in prices- mode of
payment - type and level of discount and credit*
B* Application of financial performance measures to relevant mar)et segments and
products*
* Impact of mar)eting activities on investors e.pectations
Pr*%,ti*n Marketing
Production capailities determine the numer and type of products to e mar)eted
Accurate sales forecast is also possile* ;hen uncertainties fluctuations are predicted
• Change the current production capacity
• Influence the nature- level or timing of demand
+he strategy can e achieved y appropriate use of mar)eting strategies such as
advertising- consumer and trade promotion and deals and deletion or addition of products*
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+he interdependency is evident in the development of new products* +he si0e of
new production facilities- depends on mar)eting research ased estimates of the demand
for the new products and the li)ely time and space distriution* It is important to identify
the asic conflicts etween the two functions* Production strives for efficient production
runs which imply long runs- few models- relatively simple- model to produce- and
reasonale ,uality control* Mar)eting would see shorter production runs with many
models- they are less concerned aout the ease of production and would li)e to minimi0e
the possiility of any product failure*
%-t*mer Ser4i,e Marketing
Customer and industrial products re,uire pre post purchase services* ervice
department is often address for customer complaints- "umer and type of complaints are
important inputs for mar)eting strategies- product modification- and new product
development * 8egular #.plicit communication should e estalished etween service-
mar)eting and other relevant functions*
Pr*,%rement Marketing
Procurement is the roader functions of materials management* Many firms have
een modifying their products to sustitute scarce raw materials with more availale-
cheaper or legally acceptale ones* Mar)eting research on customer6s acceptaility for the
sustituted products is vital for input for procurement planning* Procurement research
aimed at the identification and evaluation of new mar)eting research* Mar)eting plan
re,uire input from procurement plans to introduce new materials or anticipated changes in
production output due to changes in the supply of various raw materials*
FD an Marketing
+he primary 82 and Mar)eting interface centre around new product
development effort of the firm* "ew product development stages right from idea
generation to final product development re,uires close interaction* 8ealistic e.pectations
and >rgani0ational climate encourages which encourage the interface etween these two
functions and stimulates innovation are essential ingredients for successful new product
development*
Per-*nnel Marketing
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Personnel Eiring- training and management of appropriate mar)eting personnel*
Mar)eting need to collaorate with personnel in developing jo descriptions- screening
candidates designing training programs and incentive systems*
Management Inf*rmati*n S"-tem
ince the major implication of the independencies etween mar)eting and the
other usiness functions are with respect to the re,uired information and its role in the
firmKs decisions ma)ing process- the design of mar)eting information systems should e
underta)en as in integral part of a roader user oriented management information system*
uch a system incorporates the mar)eting information ( eg slaes- share- consensus-
attitudes etc' with other relevant information ( company sales- cash flow needs-
macroeconomic projections- etc' providing a single organi0ed and timely source of
information to the relevant decision ma)ers* +o the e.tent that the firmKs management
information system includes information and models of competitive ehavior- mar)eting
can provide the necessary vehicles for the gathering- analysis and interpretation
UNIT – II
Part A
1. ()at i-8e8marketing !MA6#$UN 200&'
2e4mar)eting aimed at limiting growth7 practiced- for e.ample- y governments to
conserve natural resources- or y companies unale to serve ade,uately the needs of all
potential customers*Mar)eters attempt to reduce the demand for a product when the
demand for the product is greater than the manufacturer6s aility to produce it* 2e4
mar)eting strategies involve raising prices- reducing advertising or promotion activities-
or eliminating product enefits* 2e4mar)eting does not aim to destroy the demand ut
only to lower it to ma)e it level with the aility to produce the product*
2. ()at are t)e -te+- *f ,*n-%mer e,i-i*n making !MA6#$UN 200&'
Become Aware of a Problem or Opportunity: +he consumer ecomes aware of an
unfulfilled need- such as replacing a regularly purchased item such as toothpaste or
uying a new !G (sports utility vehicle' to reach remote areas 4 and perhaps gain peer
approval*
Search for Information: 1athering information from various sources in order to ma)e a
etter4informed decision* For e.ample- the !G uyer may consult with others who own
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times'* It is important to minimi0e the differences in performance (through
training- standard4setting and ,uality assurance'*
5. ()at i- -er4i,e marketing (MA6#$UN 2007'
ervices are separately identifiale- intangile activities which provide want
satisfactions when mar)eted to consumers and industrial users and which are not
necessarily tied to the sale of product or another service* +he following are the
mar)eting tools used in service mar)eting4place- people- e,uipment-
communication- materials- symols and price*
&. E*w *e- :ran,)i-ing: )el+ in -er4i,e marketing !N/#D 2007'
Franchising has ecome a popular way to e.pand delivery of an effective service
concept to multiple sites without the level of investment capital that would e needed for
rapid e.pansion of company4owned and managed sites* Franchises can often e.pand
faster than company operated outlets6 not only for financial reasons ut also ecause
locally ased franchisers usually have estalished usiness networ)s and e.perience in
dealing with government officials*
7. ()* i- a ,%-t*mer !MA6#$UN 2009'
A customer- also client- uyer or purchaser is the uyer or user of the paid products of
an individual or organi0ation- mostly called the supplier or seller* +his is typically through
purchasing or renting goods or services*
9. ()* i- a -ati-fie ,%-t*mer !MA6#$UN 2009'
A delighted customer is a satisfied customer* atisfied customer is more li)ely to
ac,uire additional product/ services- and therefore ecome a profitale customer* atisfied
customer is also more li)ely to maintain and group the relationship over an e.tended
period of time*
;. State STP -trateg". !N/#D 2009'
+o identify groups or segments of potential customers (individuals- organi0ations-
uying centers- etc*' whose desired values from products and services within groups are
similar and whose values etween groups are different*+o select one or more groups as a
target segment who respond favoraly to a current or prospective mar)eting offering*+o
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achieve a desired positioning in the minds of potential segment customers (defined
roadly- as aove' with a profitale mar)eting program*
10. Define referen,e gr*%+-. !N/#D 2009'
A reference group is a sociological concept referring to a group to which another group is
compared* 8eference groups are used in order to evaluate and determine the nature of a
given individual or other group6s characteristics and sociological attriutes* 8eference
groups provide the enchmar)s and contrast needed for comparison and evaluation of
group and personal characteristics*8eference groups act as a frame of reference to which
people always refer to evaluate their achievements- their role performance- aspirations
and amitions* A reference group can e either from a memership group or non4
memership group*
11. Di-ting%i-) am*ng fi4e t"+e- *f ,%-t*mer nee-. !MA6#$UN8 200;'
• %n,ti*nal nee-< +hose needs which satisfy a physical / functional purpose e*g*
oap
• S*,ial nee-
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al%e of a product within the conte.t of mar)eting means the relationship
etween the customerKs e.pectations of product ,uality to the actual amount paid for it* It
is often e.pressed as the e,uation?
Galue
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19. S%gge-t an" f*%r -trategie- f*r -er4i,e- marketing !$%ne 2010 '
Ser4i,e Mi<
• +angiles to e associated with intangiles
• ervice Product is to e e,uated with the service provider
• Dong term4 relationship
Marketing mi f*r -er4i,e-
• Mar)eting should occur at all levels
• #stalish direct contact with the customers
• !se high4,uality personnel for mar)eting jo
• Creation of loyalty
• #nsure ,uic) resolving of prolems
•
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@ Place
@ Promotion
@ People
@ Process
@ Physical evidence*
$%* ()at * "*% mean b" r*ntal Atta,k
+his strategy is used when the challenger masses its competitive forces right up
against those of the opponent y attac)ing its competitorKs strengths rather than its
wea)ness* For this to succeed- the challenger needs a strength advantage over the
opponent*
21. ()at * "*% mean b" lank Atta,k
+his strategy is used when the challenger sets its sights on its targetKs wea)est points*
22. ()at * "*% mean b" n,ir,lement Atta,k
It is used only y well financed firms* It involves an attempt to capture a wide slice
of the competitorsK mar)et through a grand offensive on several road fronts*
$:* ()at * "*% mean b" B"+a-- Atta,k
It avoids any elligerent move directed against competitorsK territory* It involves
ypassing competitors and attac)ing easier mar)ets*
$B.()at * "*% mean b" C%erilla Atta,k
It involves ma)ing small- intermittent attac)s on different territories of the opponent*
A guerilla attac)er uses oth conventional and unconventional means of attac)ing
the opponent* +hese might include reflective price cuts- intense promotional ursts
and occasional legal actions*
Part B
1. ()at ke" -trategi, i--%e- are fa,e b" traiti*nal Jbri,k-8an8m*rtarJ retailer
-%,) a- (al8MartG Hmart an /ffi,e De+*t w)en t)e" g* *nline t* -ell +r*%,t-
!N/#D 200&'
It is essential that different firms in the same usiness not attempt to compete on
e.actly the same variales* If they do- competition will invarialy degenerate into price4
there is nothing else that would differentiate the firms*
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+here are many ostacles these companies need to face when they go on4line for selling
their products* +he following ostacles need to e avoided and accordingly proper
strategic planning need to e adopted**
• 8each
• Concerns aout privacy
• #ducational issues
• Costs
• Danguage
• 1overnment Danguage
• Cultural >stacles
• Payment Issues
2eveloping a proper wesite is also a must for online mar)eters efore they launch a product across orders* +he various strategic issues need to e )eep in mind are?
• peed vs* aesthetics
• 3eeping users on the site
• Information collection
+he Companies need to uild and construct an effective channel structure and
memership issues so that ail the products manufactured y these companies would e
reached safety to the consumer6s on4 time without any damage and discrepancies* +his is
also a major strategic issue the companies need to )eep in mind*
• Paths to the consumer
• Potential channel structures
• Criteria in selecting channel memers
• Piggy4ac)ing strategy
• Parallel distriution
• #valuating channel performance
ii' Pr*4iing ,%-t*mer -er4i,e a++ear- t* be *ne *f t)e +rimar" ,)allenge-
f*r Internet marketer-. ()at im+li,ati*n- *e- t)i- )a4e f*r t)eir Jbri,k-8
an8 m*rtarJ ,*m+anie- (N/#D 200&'
• !se technology to create an immediate- tangile enefit for the consumer
• Ma)e the technology easy to use
• #.ecution matters? prototype- test- and refine*
• 8ecogni0e that customers6 response to technology varies*
•
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• !se technology to tailor mar)eting programs to individual customers6
re,uirements
•
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+he services mar)eting mi. is an e.tension of the BPs framewor)* +he essential
elements of product- promotion- price and place remain ut : additional elements 4
people- physical evidence and process are included to the TPs mi.* +he need for the
e.tension is due to the high degree of direct contact etween service providers and its
customers- the highly visile nature of the service process- and the simultaneity of the
production and consumption*
Pe*+le 4 ecause of the simultaneity of production and consumption in services the
company6s staff occupy the )ey position in influencing customer6s perceptions of product
,uality* In fact the service ,uality is inseparale from the ,uality of service provider* An
important mar)eting tas) is to set standards to improve ,uality of services provided y
employees and monitor their performance* ;ithout training and control employees tend
to e variale in their performance leading to variale service ,uality* +raining is crucial
so that employees understand the appropriate forms of ehavior and trainees adopt the
est practices*
P)"-i,al e4ien,e 4 this is the environment in which the service is delivered and any
tangile goods that facilitate the performance and communication of the service*
Customers loo) for clues to the li)ely ,uality of a service also y inspecting the tangile
evidence* For e.ample- prospective customers may loo) to the design of learning
materials- the appearance of facilities- staff- etc*
Pr*,e-- 4 this means procedures- mechanism and flow of activities y which a service
is ac,uired* Process decisions radically affect how a service is delivered to customers*
+he service in organi0ations includes several processes e*g* first contact with customers-
administrative procedure regarding delivery- preparation and evaluation of service
offerings*
9uestion "umer : ("ov / 2ec $%%T'
3. Di-,%-- -er4i,e marketing wit) +arti,%lar referen,e t* ,*mmer,ial bank-.
(MA6#$UN 2007'
ervice companies can try to demonstrate their service ,uality through physical
evidence and presentation* uppose a commercial an) wants to position itself as the
SfastS an)* It could ma)e this positioning strategy tangile a numer of mar)eting tools?
Pla,e< +he e.terior and interior should have clean lines* +he waiting lines should not get
overly long* +he layout of the des)s and the traffic flow should e planned carefully*
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Pe*+le< Personnel should e usy* +here should e a sufficient numer of employees to
manage the wor)load*
K%i+ment< Computers- copying machines- des)s should e state of art*
*mm%ni,ati*n material< Printed materials should suggest efficiency and speed*
S"mb*l-< +he name and symol should suggest fast service*
Pri,e< +he an) could advertise that it will deposit 8s* % in the account of any customer
who waits in line for more than five minutes*
. ()at are t)e i-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**- +lain
t)e aiti*nal t)ree marketing mi element- in -er4i,e- marketing.!N/#D
2007'
Di-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**-<
• Intangibilit" the service cannot e touched or viewed- so it is difficult for clients
to tell in advance what they will e getting7
• In-e+arabilit" *f +r*%,ti*n an ,*n-%m+ti*n the service is eing produced at
the same time that the client is receiving it (eg during an online search- or a legal
consultation'7
• Peri-)ibilit" unused capacity cannot e stored for future use* For e.ample- spare
seats on one aero plane cannot & transferred to the ne.t flight- and ,uery4free
times at the reference des) cannot e saved up until there is a usy period*
• Eeter*geneit" !*r 4ariabilit"'< services involve people- and people are all
different* +here is a strong possiility that the same en,uiry would e answered
slightly differently y different people (or even y the same person at different
times'* It is important to minimi0e the differences in performance (throughtraining- standard4setting and ,uality assurance'*
Aiti*nal marketing mi element- in -er4i,e- marketing<
+he mar)eting mi. is the comination of mar)eting activities that an organi0ation
engages in so as to est meet the needs of its targeted mar)et*
T)e marketing mi t)%- ,*n-i-t- *f f*%r main element-<
@ Product @ Price
Place @ Promotion
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In addition to the traditional four Ps it is now customary to add some more Ps to
the mi. to give us even Ps* +he additional Ps have een added ecause today mar)eting
is far more customer oriented than ever efore- and ecause the service sector of the
economy has come to dominate economic activity in this country* +hese : e.tra Ps are
particularly relevant to this new e.tended service mi.*
+he services mar)eting mi. is an e.tension of the BPs framewor)* +he essential
elements of product- promotion- price and place remain ut : additional elements 4
people- physical evidence and process are included to the TPs mi.* +he need for the
e.tension is due to the high degree of direct contact etween service providers and its
customers- the highly visile nature of the service process- and the simultaneity of the
production and consumption*
People 4 ecause of the simultaneity of production and consumption in services
the company6s staff occupy the )ey position in influencing customer6s perceptions of
product ,uality* In fact the service ,uality is inseparale from the ,uality of service
provider* An important mar)eting tas) is to* set standards to improve ,uality of services
provided y employees and monitor their performance* ;ithout training and control
employees tend to e variale in their performance leading to variale service ,uality*
+raining is crucial so that employees understand the appropriate forms of ehavior and
trainees adopt the est practices*
Physical eidence 4 this is the environment in which the service is delivered and
any tangile goods that facilitate the performance and communication of the service*
Customers loo) for clues to the li)ely ,uality of a service also y inspecting the tangile
evidence* For e.ample- prospective customers may loo) to the design of learning
materials- the appearance of facilities- staff- etc*
Process 4 this means procedures- mechanism and flow of activities y which a service
is ac,uired* Process decisions radically affect how a service is delivered to customers*
+he service in organi0ations includes several processes e*g* first contact with customers-
administrative procedure regarding delivery- preparation and evaluation of service
offerings*
5. +lain bran management. !MA6#$UN 2009'
Bran management is the application of mar)eting techni,ues to a specific product-
product line- or rand* It see)s to increase the product6s perceived value to the customer
and therey increase rand franchise and rand e,uity*
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Mar)eters see a rand as an implied promise that the level of ,uality people have
come to e.pect from a rand will continue with future purchases of the same product*
+his may increase sales y ma)ing a comparison with competing products more
favorale* It may also enale the manufacturer to charge more for the product* +he value
of the rand is determined y the amount of profit it generates for the manufacturer*+his
can result from a comination of increased sales and increased price- and/or reduced
C>1 (cost of goods sold'- and/ or reduced or more efficient mar)eting investment*All of
these enhancements may improve the profitaility of a rand- and thus- S
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!MA6#$UN 2009'
Mar)eting of services is the diametrically opposed non4material counterpiece of a
physical good* A service provision comprises a se,uence of activities that does not result
in ownership of the outcome- and this is what fundamentally differentiates it from
furnishing someone with physical goods* ervice provision is a process that creates
predetermined enefits y effectuating either a change of service consumers- a change in
their physical possessions or a change in their (in'tangile assets*Mar)eting a service4ase
usiness is different from mar)eting a goods4ase usiness*
+here are several major differences- including?
• +he uyer purchases are intangile• +he service may e ased on the reputation of a single person
• It6s more difficult to compare the ,uality of similar services
• +he uyer cannot return the service
Mar)eting of service is a set of singular and perishale enefits
@ delivered from the accountale service provider- mostly in close coaction with his
service suppliers-
• generated y functions of technical systems and/or y distinct activities of
individuals- respectively-
• commissioned according to the needs of his service consumers y the service
customer from the accountale service provider-
• rendered individually to an authori0ed service consumer at his/her dedicated
re,uest-
• and- finally- consumed and utili0ed y the re,uesting service consumer for
e.ecuting and/or supporting his/her day4to4day usiness tas)s or private activities
Mar)eting of service is one of the most important ingredients of the mar)eting mi. for
products and services* Eigh ,uality customer service helps to create customer loyalty*
Customers today are not only interested in the product they are eing offered ut all the
additional elements of service that they receive from the greeting they receive when they
enter a retail outlet- to the refund and help that they receive when they have a complaint
aout a faulty product that they have paid for*
Performance of the service is not seen as a primary responsiility of mar)eting- ut given
the importance of reputation- referrals and repeat usiness- the mar)eting function cannot
ignore this stage* uccessful companies attach great importance to monitoring service
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Competitive analysis is also an important part of product planning* Your
customers- sales channels- and prospects evaluating your product will tell you where you
fall short competitively* Additionally you may want to ta)e an e.isting strength that you
have over your competitors and lengthen your lead with improvements to that strength*
8ememer that a competitor won6t release a feature that is just on par with your product-
they will e trying to e.ceed your strength* Also understand where your competitors are
going and what products they have in the wor)s* You won6t get this information directly
from them- ut you may hear rumors or see press on their strategic directions*
Additionally listen to your prospects when they are as)ing you aout your product
features and directions* >ften times they are parroting ac) information that your
competitor6s have given them* +he ;orld ;ide ;e is also an e.cellent place to gather
competitive information* >ften times competitors will pulish their strategic directions
and- for software companies- actually have eta versions of their new software releases
availale*
Pr*%,t Iea- Fefine
After narrowing down the list of potential new products or features enhancements
for an e.isting product- you will want to refine some of the more promising ideas*
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satisfaction is asically a psychological state- care should e ta)en in the effort of
,uantitative measurement- although a large ,uantity of research in this area has recently
een developed*
#.ceptional customer service results in greater customer retention- which in turn
results in higher profitaility* Customer loyalty is a major contriutor to sustainale profit
growth* +o achieve success- you must ma)e superior service second nature of your
organi0ation* A seamless integration of all components in the service4profit chain 4
employee satisfaction- value creation- customer satisfaction- customer loyalty- and profit
and growth 4 lin)s all the critical dynamics of top customer service*
adly- mature companies often forget or forsa)e the thing that made them successful
in the first place? a customer4centric usiness model* +hey lose focus on the customer and
start focusing on the ottom line and ,uarterly results* +hey loo) for ways to cut costs or
increase revenues- often at the e.pense of the customer*
+hey forget that satisfying customer needs and continuous value innovation is the
only path to sustainale growth* +his creates opportunities for new- smaller companies to
emulate and improve upon what made their igger competitors successful in the first
place and steal their customers*
;. +lain t)e ,*m+*nent- *f t)e marketing mi in etail. ("ov / 2ec $%%L'
+he mar)eting mi. is proaly the most famous mar)eting term* Its elements are the
asic- tactical components of a mar)eting plan* Also )nown as the Four P6s- the mar)eting
mi. elements are price- place- product- and promotion* 8ead on for more details on the
mar)eting mi.*
Pri,e
+here are many ways to price a product* Det6s have a loo) at some of them and try
to understand the est policy/strategy in various situations*
Premi%m Pri,ing.
!se a high price where there is a uni,ueness aout the product or service* +his
approach is used where a sustantial competitive advantage e.ists* uch high prices are
charge for lu.uries such as Cunard Cruises- avoy Eotel rooms- and Concorde flights*
Penetrati*n Pri,ing.
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+he price charged for products and services is set artificially low in order to gain
mar)et share* >nce this is achieved- the price is increased* +his approach was used y
France +elecom and )y +G*
,*n*m" Pri,ing.
+his is a no frills low price* +he cost of mar)eting and manufacture are )ept at a
minimum* upermar)ets often have economy rands for soups- spaghetti- etc*
Pri,e Skimming.
Charge a high price ecause you have a sustantial competitive advantage*
Eowever- the advantage is not sustainale* +he high price tends to attract new
competitors into the mar)et- and the price inevitaly falls due to increased supply*
Manufacturers of digital watches used a s)imming approach in the T%s* >nce other
manufacturers were tempted into the mar)et and the watches were produced at a lower
unit cost- other mar)eting strategies and pricing approaches are implemented*
Premium pricing- penetration pricing- economy pricing- and price s)imming are the four
main pricing policies/strategies* +hey form the ases for the e.ercise* Eowever there are
other important approaches to pricing*
P-",)*l*gi,al Pri,ing.
+his approach is used when the mar)eter wants the consumer to respond on an
emotional- rather than rational asis* For e.ample 6price point perspective6 cents not
one dollar*
Pr*%,t ine Pri,ing.
;here there is a range of product or services the pricing reflect the enefits of
parts of the range* For e.ample car washes* ptional 6e.tras6 increase the overall price of the product or service* For e.ample
airlines will charge for optional e.tras such as guaranteeing a window seat or reserving a
row of seats ne.t to each other*
a+ti4e Pr*%,t Pri,ing
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;here products have complements- companies will charge a premium price where
the consumer is captured* For e.ample a ra0or manufacturer will charge a low price and
recoup its margin (and more' from the sale of the only design of lades which fit the
ra0or*
Pr*%,t B%nle Pri,ing.
Eere sellers comine several products in the same pac)age* +his also serves to
move old stoc)* Gideos and C2s are often sold using the undle approach*
Pr*m*ti*nal Pri,ing.
Pricing to promote a product is a very common application* +here- are many
e.amples of promotional pricing including approaches such as 1>F (ne 1et
>ne Free'*
Ce*gra+)i,al Pri,ing.
1eographical pricing is evident where there are variations in price in different
parts of the world*4For e.ample rarity value- or where shipping costs increase price*
al%e Pri,ing.
+his approach is used where e.ternal factors such as recession or increased
competition force companies to provide 6value6 products and services to retain sales e*g*
value meals at Mc2onalds*
Pla,e
Another element of "eil E*
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• ;hich companies as intermediaries to avoid 6intrachannel conflict6 (i*e* infighting
etween local distriutors'*
Sele,ti*n *n-ierati*n 8 )*w * we e,ie %+*n a i-trib%t*r
• Mar)et segment 4 the distriutor must e familiar with your target consumer and
segment*
• Changes during the product life cycle 4 different channels can e e.ploited at
different points in the PDC e*g* Foldaway scooters are now availale everywhere*
>nce they were sold via a few specific stores*
• Producer 4 distriutor fit 4 Is there a match etween their polices- strategies-
image- and yoursH Doo) for 6synergy6*
•9ualification assessment 4 estalish the e.perience and trac) record of yourintermediary*
• Eow much training and support will your distriutor re,uireH
T"+e- *f )annel Intermeiarie-.
+here are many types of intermediaries such as wholesalers- agents- retailers- the
Internet- overseas distriutors- direct mar)eting (from manufacturer to user without an
intermediary'- and many others* +he main modes of distriution will e loo)ed at in more
detail*
)annel Intermeiarie- 8 ()*le-aler-
• +hey rea) down 6ul)6 into smaller pac)ages for resale y a retailer*
• +hey uy from producers and resell to retailers* +hey ta)e ownership or Ktitle to
goods whereas agents do not (see elow'*
• +hey provide storage facilities* For e.ample- cheese manufacturers seldom wait
for their product to mature* +hey sell on to a wholesaler that will store it and
eventually resell to a retailer*
• ;holesalers offer reduce the physical contact cost etween the producer and
consumer e*g* customer service costs- or sales force costs*
A wholesaler will often ta)e on the some of the mar)eting responsiilities* Many
produce their own rochures and use their own telesales operations
)annel Intermeiarie- 8 Agent-
• Agents are mainly used in international mar)ets*
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• An agent will typically secure an order for a producer and will ta)e a commission*
+hey do not tend to ta)e title to the goods* +his means that capital is not tied up in
goods* Eowever- a 6stoc)ist agent6 will hold consignment stoc) (i*e* will store the
stoc)- ut the title will remain with the producer* +his approach is used wheregoods need to get into a mar)et soon after the order is placed e*g* foodstuffs'*
• Agents can e very e.pensive to train* +hey are difficult to )eep control of due to
the physical distances involved* +hey are difficult to motivate*
)annel Intermeiarie- 8 Fetailer-
• 8etailers will have a much stronger personal relationship with the consumer*
• +he retailer will hold several other rands and products* A consumer will e.pect to
e e.posed to many products*• 8etailers will often offer credit to the customer e*g* electrical wholesalers- or
travel agents*
• Products and services are promoted and merchandised y the retailer*
• +he retailer will give the final selling price to the product*
• 8etailers often have a strong 6rand6 themselves e*g* 8oss and ;all4Mart in the
!A- and Alisuper- Modelo- and umo in Portugal*
. )annel Intermeiarie- 8 Internet
• +he Internet has a geographically disperse mar)et*
• +he main enefit of the Internet is that niche products reach a wider audience e*g*
cottish almon direct from an Inverness fishery*
• +here are low arriers low arriers to entry as set up costs are low*
• !se e4commerce technology (for payment- shopping software- etc'
• +here is a paradigm shift in commerce and consumption which enefits
distriution via the Internet
Pr*m*ti*n
Another one of the BP6s is promotion* +his includes all of the tools availale to the
mar)eter for 6mar)eting communication6* As with "eil E*
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• Pulic 8elations*
• 2irect Mail*
• +rade Fairs and #.hiitions*
• Advertising*
•
ponsorship*
+he elements of the promotions mi. are integrated to form a coherent campaign* As
with all forms of communication* +he message from the mar)eter follows the
6communications process6 as illustrated aove* For e.ample- a radio advert is made for a
car manufacturer* +he car manufacturer (sender' pays for a specific advert with contains a
message specific to a target audience (encoding'* It is transmitted during a set of
commercials from a radio station (Message / media'*
+he message is decoded y a car radio (decoding' and the target consumer interprets
the message (receiver'* Ee or she might visit a dealership or see) further information
from a we site (8esponse'* +he consumer might uy a car or e.press an interest or
disli)e (feedac)'* +his information will inform future elements of an integrated
promotional campaign* Perhaps a direct mail campaign would push the consumer to the
point of purchase* "oise represent the thousand of mar)eting communications that a
consumer is e.posed to everyday- all competing for attention*
PE6SIA IDN
Physical #vidence is the material part of a service* trictly spea)ing there are no
physical attriutes to a service- so a consumer tends to rely on material cues* +here are
many e.amples of physical evidence- including some of the following?
• Pac)aging* V
• Internet/we pages*
• Paperwor) (such as invoices- tic)ets and despatch notes'*
•
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e.perience are altered to meet the 6individual needs6 of the person consuming it* Most of
us can thin) of a situation where the personal service offered y individuals has made or
tainted a tour- vacation or restaurant meal* 8ememer- people uy from people that they
li)e- so the attitude- s)ills and appearance of all rtaff need to e first class*
PF/SS
Process is another element of the e.tended mar)eting mi.- or TP6s*+here are a
numer of perceptions of the concept of process within the usiness and mar)eting
literature* ome see processes as a means to achieve an outcome- for e.ample 4 to achieve
a :%N mar)et share a company implements a mar)eting planning process* Another view
is that mar)eting has a numer of processes that integrate together to create an overall
mar)eting process- for e.ample 4 telemar)eting and Internet mar)eting can e integrated*
A further view is that mar)eting processes are used to control the mar)eting mi.- i*e*
processes that measure the achievement mar)eting ojectives* All views are
understandale- ut not particularly customer focused*
For the purposes of the mar)eting mi.- process is an element of service that sees
the customer e.periencing an organisation6s offering* It6s est viewed as something that
your customer participates in at different points in time* Eere are some e.amples to help
your uild a picture of mar)eting process- from the customer6sKpoint of view*
1oing on a cruise 4 from the moment that you arrive at the doc)side- you are greeted7
your aggage is ta)en to your room* You have two wee)s of services from restaurants and
evening entertainment- to casinos and shopping* Finally- you arrive at your destination-
and your aggage is delivered to you* +his is a highly focused mar)eting process*
10. +lain t)e ifferent ,ateg*rie- *f -er4i,e mi in etail. !N/#D 2009'
A service is the action of doing something for someone or something* It is largely
intangile (i*e* not material'* A product is tangile (i*e* material' since you can touch it
and own it* A service tends to e an e.perience that is consumed at the point where it is
purchased- and cannot e owned since is ,uic)ly perishes* A person could go to a cafe one
day and have e.cellent service- and then return the ne.t day and have a poor e.perience*
o often mar)eters tal) aout the nature of a service as?
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In-e+arable 4 from the point where it is consumed- and from the provider of the
service* For e.ample- you cannot ta)e a live theatre performance home to consume it (a
2G2 of the same performance would e a product- not a service'*
Intangible 4 and cannot have a real- physical presence as does a product* For
e.ample- motor insurance may have a certificate- ut the financial service itself cannot e
touched i*e* it is intangile*
Peri-)able 4 in that once it has occurred it cannot e repeated in e.actly the same
way* For e.ample- once a %% metres >lympic final has een run- there will e not other
for B more years- and even then it will e staged in a different place with many different
finalists*
ariabilit"8 since the human involvement6of service provision means that no two
services will e completely identical* For e.ample- returning to the same garage time and
time again for a service on your car might see different levels of customer satisfaction- or
speediness of wor)*
Fig)t *f *wner-)i+ 4 is not ta)en to the service- since you merely e.perience it* For
e.ample- an engineer may service your air4 conditioning- ut you do not own the service-
the engineer or his e,uipment* You cannot sell it on once it has een consumed- and do
not ta)e ownership of it*
11. +lain Marketing Mi. *mment in brief %+*n it- ingreient-. !MA6#$UN8
200;'
+he mar)eting mi.- earlier )nown as the B pKs- (ut now has a few more'- is a vital
part of any mar)eting strategy* +his is a tool wherey the mar)eter ta)es decisions on
what and how a product should e- where it can e sold- how it should e priced- how it
will e promoted- how to e,uip the people who are responsile for selling the product***
and so on* 1etting the mar)eting mi. right is e,ually important for the large corporation
and the small usiness owner* Det us ta)e a closer loo) at the most important elements*
Pr*%,t< A lot of thought and effort goes into designing a product offering* +he most
important ,uestion that you- as a mar)eter- need to as) is whether there is a need for yourtype of product and how your own product satisfies that need etter than those of your
competitors* +his will force you to thin) of why your product is uni,ue- and therey help
you evolve your productKs !ni,ue elling Proposition* At the same time- you will need to
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analy0e your companyKs strengths and wea)nesses and the opportunities and threats posed
y the mar)et- to understand how you are positioned versus the competition*
Pri,e< +his element of the mar)eting mi. can e many a strategyKs undoing* A
complete understanding of the financial that drive a usiness is essential efore deciding a
pricing strategy*
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12. +lain t)e ,*n,e+t *f bran eK%it". !MA6#$UN8 200;'
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re,uire little prior information aout customers- and the product itself can e
manufactured after customers tell the mar)eters what they want to uy*
In developing customeri0ation strategies- however- mar)eters face a numer of
challenges* +hese include otaining information from customers- identifying intangile
factors that may e crucial to customers- dealing with enhanced customer e.pectations-
limiting the comple.ity of options- and pricing customi0ed offerings*
In addition- while technology ma)es the implementation of customeri0ation strategies
easier and cheaper- strategic and* organi0ational decisions are more comple. and
e.pensive- as the mar)eter determines what is the right information to send to each
customer* +o e truly successful at customeri0ation- a mar)eter must ring together the
value chains of the supply and demand sides of the mar)et* In some cases- the entire
company might e reorgani0ed around a new order generation and fulfillment process as
part of a customer4driven- integrated gloal supply chain*
Finally- mar)eters face critical decisions aout where and when to customeri0e and
how to integrate this strategy with other mar)eting strategies* +hey must determine the
optimal portfolio of mass mar)eting- direct mar)eting to target segments- and interactive
customi0ed mar)eting* In this new realm- success will depend on finesseWthe aility todeploy effort into areas that generate higher customer- value than the cost of adding that
valueWrather than on massive resources*
;here should a mar)eter egin in implementing a customeri0ation strategyH First- y
increasing the digital content of its offerings and of the customerKs shopping and
consumption e.perience- and second- y positioning the firm to ecome the customeri0er
of the entire industry*
1. +lain t)e b%-ine-- %nit -trategi, +lanning +r*,e--!$%ne 2011'
In today6s highly competitive usiness environment- udget4oriented planning or
forecast4ased planning methods are insufficient for a large corporation to survive and
prosper* +he firm must engage in -trategi, +lanning that clearly defines ojectives and
assesses oth the internal and e.ternal situation to formulate strategy- implement the
strategy- evaluate the progress- and ma)e adjustments as necessary to stay on trac)*
A simplified view of the strategic planning process is shown y the following diagram?
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T)e Strategi, Planning Pr*,e--
Mi--i*n
/b?e,ti4e-
n4ir*nmental
S,anning
Strateg"
*rm%lati*n
Strateg"
Im+lementati*n
4al%ati*n
*ntr*l
Mi--i*n an /b?e,ti4e-
+he mission statement descries the company6s usiness vision- including theunchanging values and purpose of the firm and forward4loo)ing visionary goals that
guide the pursuit of future opportunities*
1uided y the usiness vision- the firm6s leaders can define measurale financial and
strategic ojectives* Financial ojectives involve measures such as sales targets and
earnings growth* trategic ojectives are related to the firm6s usiness position- and may
include measures such as mar)et share and reputation*
n4ir*nmental S,an
+he environmental scan includes the following components?
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• Internal analysis of the firm
• Analysis of the firm6s industry (tas) environment'
• #.ternal macroenvironment (P#+ Analysis'
+he internal analysis can identify the firm6s strengths and wea)nesses and the e.ternal
analysis reveals opportunities and threats* A profile of the strengths- wea)nesses-
opportunities- and threats is generated y means of a ;>+ analysis*An industry analysis
can e performed using a framewor) developed y Michael Porter )nown asPorterKs five
forces* +his framewor) evaluates entry arriers- suppliers- customers- sustitute products-
and industry rivalry*
Strateg" *rm%lati*n
1iven the information from the environmental scan- the firm should match its
strengths to the opportunities that it has identified- while addressing its wea)nesses and
e.ternal threats*+o attain superior profitaility- the firm see)s to develop a competitive
advantage over its rivals* A competitive advantage can e ased on cost or differentiation*
Michael Porter identified three industry4independent generic strategies from which the
firm can choose*
Strateg" Im+lementati*n
+he selected strategy is implemented y means of programs- udgets- and
procedures* Implementation involves organi0ation of the firm6s resources and motivation
of the staff to achieve ojectives*+he way in which the strategy is implemented can have
a significant impact on whether it will e successful* In a large company- those who
implement the strategy li)ely will e different people from those who formulated it* For
this reason- care must e ta)en to communicate the strategy and the reasoning ehind it*
>therwise- the implementation might not succeed if the strategy is misunderstood or if
lower4level managers resist its implementation ecause they do not understand why the
particular strategy was selected*
4al%ati*n *ntr*l
+he implementation of the strategy must e monitored and adjustments made as
needed*#valuation and control consists of the following steps?
* 2efine parameters to e measured
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$* 2efine target values for those parameters
:* Perform measurements
B* Compare measured results to the pre4defined standard
* Ma)e necessary changes
15. 2ifferentiate service mar)eting from product mar)eting* uggest additional mar)eting
mi. for services* (une $%%'
8efer to 9*"o % "ov/2ec $%%L and 9*"o* May/ une $%%
UNIT – III
Part A
1.+lain t)e ,*n,e+t *f re+*-iti*ning. !MA6#$UN 200&'
Product positioning is not limited to new products alone* It is relevant for
occasional face lifting of the e.isting products of almost all )inds such as toilet soaps-
shampoos- cosmetics- tooth pastes- etc* 8epositioning does not mean total change* It
sometimes entails strengthening and clarifying an e.isting identity* 8epositioning does
not always hold the )ey to success* In case a product has got into a very ad shape due to
prolonged neglect- repositioning effort may turn out to e an e.ercise in futility* In such
cases it would always e etter to drop the product*
2. ()en i- +enetrati*n +ri,ing a g** *+ti*n !MA6#$UN 200&'
Penetration pricing involves the setting of lower- rather than higher prices in order
to achieve a large- if not dominant mar)et share* +his strategy is most often used
usinesses wishing to enter a new mar)et or uild on a relatively small mar)et share* +his
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will only e possile where demand for the product is elieved to e highly elastic- i*e*
demand is price4sensitive and either new uyer will e attracted- or e.isting uyers will
uy more of the product as a result of a low price* A penetration pricing strategy may also
promote complimentary and captive products* +he main product may e priced with a
low mar)up to attract sales (it may even e a loss4leader'* Customers are then sold
accessories (which often only fit the manufacturer6s main product' which are sold at
higher mar)4ups*
3. ()at i- Pr*m*ti*n Mi Menti*n +r*m*ti*n mi element-. (N/#D 200&'
Promotion involves disseminating information aout a product- product line- rand- or
company* It comprises of four elements which includes?
• Advertising
• Personal elling
• ales Promotion
• Pulicity and Pulic relations
. Define Bran. (N/#D 200&'
A rand is a collection of images and ideas representing an economic producer7
more specifically- it refers to the concrete symols such as a name- logo- slogan- and
design scheme
5. ()at i- +r*%,t ,*n,e+t !MA6#$UN 2007'
+he product concept holds that the consumers will favor those products
that offer the most ,uality- performance- or innovative features* +herefore
managers in these organi0ations focus on ma)ing superior products and
improving them over time*
&.Define intr*%,ti*n -tage *f P. !MA6#$UN 2007'
Introduction is the early stage- when product is introduced in mar)et- sales
revenue egins to grow ut the rate of growth is very slow* Profits may not e
there as there is low sales volume- large production and distriution costs* It may
re,uire heavy advertising and sales promotion* Products are rought cautiously
on a trail asis*
7.Define :Bran +*-iti*ning:. !N/#D 2007'
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6relative competitive comparison6 their product occupies in a given mar)et as perceived y
the target mar)et*
9. ()at i- +r*%,t !MA6#$UN 2009'
• a product is anything that can e offered to a mar)et that might satisfy a want or
need
• a thing produced y laor or effort In manufacturing- products are purchased as
raw materials and sold as finished goods*+he end result of the manufacturing
process- to e offered to the mar)etplace to satisfy a need or want*
;.()at i- Bran +*-iti*ning !MA6#$UN 2009'
Positioning is how a rand appears in relation to other rands in the mar)et* It is
influenced y the e.periences customers have with a rand6s products- services-
advertising and promotional material- and representatives over time* +he development of
a randKs position in the mar)et y heightening customer perception of the rand6s
superiority over other rands of a similar nature*
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• +o achieve a desired positioning in the minds of potential segment customers
(defined roadly- as aove' with a profitale mar)eting program*
12. Define -er4i,e. !MA6#$UN 2009'
A service is the diametrically opposed non4material counterpiece of a physical
good* A service provision comprises a se,uence of activities that does not result in
ownership of the outcome- and this is what fundamentally differentiates it from furnishing
someone with physical goods* ervice provision is a process that creates predetermined
enefits y effectuating either a change of service consumers- a change in their physical
possessions or a change in their (in'tangile assets*
13. Define 4al%e ,)ain. !MA6#$UN8 200;'
A value chain is a chain of activities* Products pass through all activities of the
chain in order and at each activity the product gains some value* +he chain of activities
gives the products more added value than the sum of added values of all activities* It is
important not to mi. the concept of the value chain with the costs occurring throughout
the activities*
1. Define Pr*%,t P*-iti*ning. !MA6#$UN8 200;'
Pr*%,t P*-iti*ning has come to mean the process y which mar)eters try to
create an image or identity in the minds of their target mar)et for its product- rand or
organi0ation* It is the Xrelative competitive comparisonK their product occupies in a given
mar)et as perceived y the target mar)et*
Product positioning involves creating a uni,ue- consistent- and recogni0ed
customer perception aout a firmKs offering and image* A product or service may e
positioned on the asis of an attitude or enefit- use or application- user- class- price- orlevel of ,uality* It targets a product for specific mar)et segments and product needs at
specific prices*
15. +lain *-t8+l%- Pri,ing. !MA6#$UN8 200;'
Cost4plus pricing is a pricing method used y companies* It is used primarily
ecause it is easy to calculate and re,uires little information* +here are several varieties-
ut the common thread in all of them is that one first calculates the cost of the product-
then includes an additional amount to represent profit* Cost4plus pricing is often used on
government contracts- and has een critici0ed as promoting wasteful e.penditures* +he
method determines the price of a product or service that uses direct costs- indirect costs-
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and fi.ed costs whether related to the production and sale of the product or service or not*
+hese costs are converted to per unit costs for the product and then a predetermined
percentage of these costs is added to provide a profit margin*
1&. Define t)e ,*n,e+t *f re8+*-iti*ning mi !N*4 # De, 2010'
Changing in randKs status in comparison to that of the competing rands*
8epositioning is effected usually through changing the mar)eting mi. in response to
changes in the mar)et place- or due to a failure to reach the rand6s mar)eting ojectives
17.Menti*n t)e +ri,ing -trategie- f*r t)e intr*%,ti*n -tage *f P ! $%ne 2010'
+here are three pricing strategies for new product namely
Pre-tige Pri,ing
4 etting high prices to position a product at the upper or lu.ury end of mar)et
4 Producing a high ,uality and charging the highest price*
4 For e.ample- Mercedes
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Pri,e -kimming is a pricing strategy in which a mar)eter sets a relatively high
price for a product or service at first - a new- innovative- or much4improved product is
launched onto a mar)et* +he ojective with s)imming is to Os)im= off customers who are
willing to pay more to have the product sooner7 prices are lowered later when demand
from the Oearly adopters= falls*
Mention any two asis for classification of pr