38997223 marketing managemnt

8/8/2019 38997223 Marketing Managemnt

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Name Amit Gupte

Registration / Roll No. 511023366

Course Master of Business Administration (MBA)

Subject Marketing Management

Semester Semester 2

Subject Number MB0046

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Q.1a. Explain the different micro-environmental forceswith examples.

Forces in the micro environment

1 The Company

Remember, in the previous unit we discussed about marketing mix andmarketing plan. Safe Express, a leader in the supply chainmanagement solution wants to hold its number one position in the US$ 90 billion Indian logistics market. The company plans to expand itsservice areas in the coming months. To meet the targets of themarketing plan, other departments of safe express also expandingtheir horizon. The Company is coming out with logistics parks in

different cities; plans to hold seven million square feet of warehousingcapacity in the next three years and invest Rs 10 billion in three yearsto meet those targets. The above example shows that the companysmarketing plan should be supported by the other functionaldepartments also.

2 Intermediaries

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Marketing intermediaries: These are firms which distribute and sell thegoods 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 aresome of the major functions carried out by the middlemen. Retailers,wholesalers, agents, brokers, jobbers and carry forward agents are fewof the intermediaries. Retailers are final link between the company andthe customers. Their role in the marketing of product is increasingevery day.

3 Publics

These are microenvironment groups, which help a company togenerate 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 majorfinancial publics.

2. Media publics carry news and features about the company e.g.Deccan Herald

3. Advertisement regulation agencies, telecom regulationagency( TRAI), and insurance regulation agency(IRDA) of thegovernment

4. Citizen action groups: Formed by the consumer or environmentalgroups. For example, people for ethical treatment of animals (PETA) orGreenpeace.

5. General publics: a company should be concerned towards generalpublics attitude towards its products and services.

6. Internal publics: Employees who help in creating proper image forthe company through word of mouth.

4 Competitors

A company should monitor its immediate competitors as its sale will beaffected by the nature and intensity of the competitors. The sale ofCoca cola will be affected by Pepsi cola, or Britannia cheese by Amul

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cheese. Michael Porter, the author of Competitive Advantage ofNations suggested that, in addition to direct competition, companiesshould also consider competition from substitutes. In addition toexisting competitors, the potential competitors should also beanticipated. Competition may arise from

a. Small firms with low overheads producing duplicates.

b. Firms which diversify into certain products by merely being in theparticular industry for e.g. Pepsi entered the snacks sector competingwith pure snack producers like Haldiram.

c. Firms which expand in the same vertical for e.g. Godrej whichmanufactured office furniture and steel cupboards went on to theentire range of home furniture thereby giving competition to purehome furniture makers.

How do companies or enterprises survive and grow under the abovecircumstances. While we shall study this in detail later, a simple stepcould be that the product should be positioned differently and thecompany should be able to provide better services.

5 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 directeffect on the company. Many companies adopted supplier relationmanagement system to manage them well. Suppliers are a source ofcompetition to firms today. For a large retail store like Reliance Retailor Big Bazaar the suppliers play the most significant role in both costand time. Timely supplies reduce stocking of goods and blocking ofspace, 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 Boardimports coal from New Zealand despite huge coal reserves in India. ForVolvo, India is a manufacturing hub.

6 Customers

A company may sell their products directly to the customer or usemarketing intermediaries to reach them. Direct or indirect marketing

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depends on what type of markets Company serves. Generally we candivide the markets into five different categories. They are

a. Consumer market.

b. Business market

c. Reseller market

d. Government market and

e. International market

You will come to know about these five different markets from thefollowing example.

MRF, a tyre company sells its product directly to consumer (in case ofurgency, customer purchases directly from showroom) i.e. operates inconsumer market. It operates in business markets by selling tyres tocompanies like Maruti Udyog limited. MRF also sells TYREs to BMTC andKSRTC, transport organizations of Karnataka government. If MRF sellstyres in African or American countries then it is operating in theinternational market. If MRF buys the old tyres, retreads it and sells itto the consumer at a profit then company is operating in the resellermarket.

b. Mention the different ad appeals with suitable

examples. (4 marks)

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. Positiveemotions like love, pride, joy and humor are used in the message.Following are the advertisement where such attributes of positiveemotions used.

e.g. BMW fastest saloon car in the world- pridee.g. Fevicol humore.g. Wheel- love.

The negative emotions like fear guilt and shame are also used in theadvertisement to attract the customer.

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e.g. NIIT- if you are not studying at NIIT you are missing something-guilte.g. Rexona deodorant shame

B)Rational appeals:

The rational appeals highlight on the desired benefits about theproducts. They highlight quality, economy value or performance of theproduct.

e.g. Dabur Amla value appeal ( long Hair)e.g. Lakme brilliance- Quality products.e.g. Reliance India mobile- performance( works even in floodsituations)e.g. Reliance Infocom- Like the first three, the mobile phone mustcome to me as a necessity and not as a luxury- economy

C)Moral appeal:These are concerned towards public health or environment or socialresponsibility.

e.g. Shell lubricants show its commitment towards environment in theiradvertisements.

Q.2 What are the different market entry strategies if

a company wants to enter international markets?

Organizations that plan to go for international marketing should knowthe answers for some basic questions like a. In how many countrieswould the company like to operate? b. What are the types of countriesit plans to enter?Thats why companies evaluate each country againstthe market size, market growth, and cost of doing business,competitive advantage and risk level.

Checklist for country evaluation

The Characteristics, weightages and score should be checked.

1. Political rights.2. Civil liberties.3. Control of corruption.4. Government effectiveness.5. Rule of law or legal issues.6. Health expenditure.

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7. Education expenditure.8. Regulatory quality.9. Cost of starting a business.10. Days to start a business.11. Trade policy.

12. Inflation.13. Fiscal policy.14. Consumption patterns.15. Competition.

International Market Entry Strategies

Once the market is found to be attractive, companies should decidehow to enter this market. Companies can enter the internationalmarket by adoptingany one of the following strategies. They are

a. Exporting

b. Licensing

c. Contract manufacturing

d. Management contract

e. Joint ownership

f. Direct investment

Exporting is the technique of selling the goods produced in thedomestic country in a foreign country with some modifications. Forexample, Gokaldas textiles export the cloth to different countries fromIndia. Exporting may be indirect or direct. In case of indirect exporting,company works with independent international marketingintermediaries. This is cost effective and less risky too. Direct exportingis the technique in which organization exports the goods on its own bytaking all the risks. Maruti Udyog Limited, Indias leading carmanufacturer exports its cars on its own. Company can also set up

overseas branches to sell their products. Adani Exports, anotherleading exporter from India has international office in Singapore.

Licensing: According to Philip Kotler, licensing is a method of enteringa foreign market in which the company enters into an agreement witha license in the foreign market, offering the right to use amanufacturing process, trademark, patent, or other item of value for afee or royalty. For example, Torrent Pharmaceuticals has license to sell

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the cardiovascular drugs of Chinese manufacturer Tasly. Licensing maycause some problems to the parent company. Licensee may violate theagreement and can use the technology of the parent company.

Contract manufacturing: Company enters the international market

with a tie up between manufacturer to produce the product or theservice. For example, Gigabyte Technology has contract manufacturingagreement with D- link India to produce and sell their mother boards.Another significant manufacturer is TVS Electronics; it produces keyboards in its own name as well as for other companies too.

Management contracting: In this case, a company enters theinternational market by providing the know how of the product to thedomestic manufacturer. The capital, marketing and other activities arecarried out by the local manufacturer, hence it is less risky too.

Joint ownership: A form of joint venture in which an internationalcompany invests equally with a domestic manufacturer. Therefore italso has equal right in the controlling operations. For example,Barbara, a lingerie manufacturer has joint venture with GokaldasImages in India.

Direct Investment: In this method of international market entry,Company invests in manufacturing or assembling. The company mayenjoy the low cost advantages of that country. Many manufacturingfirms invested directly in the Chinese market to get its low costadvantage. Some governments provide incentives and tax benefits to

the company which manufactures the product in their country. There isgovernment restriction in some countries to opt only for directinvestment, as it produces the jobs to the local people. This mode alsodepends on the country attractiveness. It may become risky if themarket matures or unstable government exists.

Q.3.a. State the meaning of Product life cycle andexplain the different stages involved in it. (8 marks)

Meaning of Product Life Cycle: It means a product has to gothrough the various stages since its inception and till it completelyfades out from the market. The following graph represents the PLCcurve and the 5 stages that it has to undergo

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The product which is introduced into the market will undergo some

modifications over the period. Its sales also fluctuate. Therefore amarketer will be interested in finding out how sales changes over aperiod and what strategies are best suited at that point. A product lifecycle can be graphed by plotting aggregate sales volume for a productcategory over time. Generally the curve resembles a bell shaped curve.We can obtain style, fashion or fad style of product life cycles also.

Product life cycle (bell shaped curve)

According to PLC, a product passes through five stages which are asfollows:

1. Product development stage: In this stage company identifies theviable idea and develops it. Even if sales in this stage are nil it requireshuge research and development budget. Therefore company incurslosses at this stage. For example, TATA Docomo before entering thecellular services market had done research and found that calls werecharged for minutes rather than seconds.

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2. Introduction stage: Company introduces the product into the market.As the product is new to the market, consumer awareness is usuallyvery low. Here company adopts heavy sales promotion and productawareness programs. The cost of product is very high and sales arevery low. At this juncture the company charges high price to the

customers. For example, TATA Docomo has entered into cellularservices initially through the Billboards.

3. Growth stage: Company gets experience over the period and nowtries to get the maximum market share (takes first mover advantage).Sales will grow rapidly, resulting in lesser cost and better profit.Company reduces the price of the product and offers varieties andvalues in it. It focuses on building better distribution network andpushes the product through it. Therefore company needs less salespromotion. There will be increase in Competition and the company isforced to keep a tab on its competitors. For example, TATA Docomo

has entered into the growth stage by aggressively advertising onTelevision and other mediums and at the same time giving competitionto the existing players.

4. Maturity stage: In this stage, the product has already establisheditself in the market. These are the characteristics of this stage a. Peaksales.b. Low cost per customer. c. High profits.d. Competitionbased pricinge. Communicating the product differentiation (or USP) toconsumers.f. Improving supply chain efficiency.g. Defend the marketshare h. Industry experiences consolidation.

5. Decline stage: In this stage, product sales and profit decline.Company should phase out weak items from their product mix andmay even lower the prices of the existing products. The advertisementbudget of the company also comes down and the company maystruggle to meet its costs. For example, VCRs have been replaced withDVD players and so VCR entered into the decline stage and is almostout of the market.

Other product life cycles:

1. Style: A style is a basic and distinctive mode of expression that

appears in the study of human behavior. For example, style is evidentin homes, art, accessories and clothing. Once the style is invented itwill be there for a longer period.

2. Fashion: Currently accepted or popular style in a given field. Forexample, cargo jeans are now the fashion with college going students.Fashion changes with time.

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3. Fad: A fashion that enters quickly is adopted with great zeal, peaksearly, and declines very fast. For example, when pager was introduced,everybody wanted to have the product. But when people found mobilesas alternative, the demand for pager went down drastically.

b. Define Customer Relationship Management. (2marks)

Berry defines CRM as attracting, maintaining and in multi-serviceorganizations enhancing customer relationships.

Berry and Parasuraman define CRM as attracting, developing andretaining customer relationships.

In Industrial Marketing, Jackson defines CRM as marketing oriented

toward strong, lasting relationships with individual accounts.

Doyle and Roth define CRMS as the goal of relationship selling is toearn the position of preferred supplier by developing trust in keyaccounts over a period of time.

The sequence of activities for performing relationship marketing wouldinclude developing core services to build customer relationship,customization of relationship, augmenting core services with extrabenefits, and enhancing customer loyalty and fine-tuning internalmarketing to promote external marketing success.

Christopher considers relationship marketing as a tool to turn currentand new customers into regularly purchasing clients and thenprogressively moving them through being strong supporters of thecompany and its products to finally being active and vocal advocatesfor the company.

Relationship marketing is in essence selling by using psychologicalrather than economic inducements to attract and retain customers. Itseeks to personalize and appeal to the hearts, minds and purses of themass consumers.- James J. Lynch

From the above definitions, it could be concluded that CustomerRelationship Management refers to all marketing activities directedtowards establishing, developing, and sustaining long lasting, trusting,win-win, beneficial and successful relational exchanges between thefocal firm and all its supporting key stakeholders.

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Q.4.a. You are a sales manager in ABC firm. You havetaken some interviews and shortlisted a fewcandidates. How will you select the right candidate

for the sales job? (5 marks)

1. Create an Ideal Salesperson Profile. It has always surprised mehow many companies have fully documented profiles of their idealclient. Yet, few have a profile of their ideal salesperson. How can youscreen when you don't know what you are screening for?

This profile should be fully detailed. Some of the areas to address inthe profile are the experience you expect that candidate to alreadyhave, the skills that the candidate should already possess and the skills

you are NOT willing to teach.

The lack of a fully-defined profile of the ideal salesperson is the mostcommon cause of bad sales marriages. It is also the major point offrustration between sales managers and recruiters. Recruiters often tellme that they feel they are throwing darts while blindfolded becausethey have so little detail about the desired profile.

2. Always be recruiting. In sales, there is an old expression: "Thetoughest time to make a sale is when you really need one." The same

holds true for recruiting. When a slot is open on the sales team, itbecomes an "all hands on deck" exercise to fill it. While the seat isopen, revenue targets are in jeopardy. This leads many to forget theprofile of the ideal salesperson profile in the interest of filling a seat.Playing this forward a bit, the seat becomes vacant again a short timelater when either side determines that it is not a good fit.

Sales recruiting is a year-round exercise. The best sales forces are

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always on the look out for strong sales talent. Find a company thatidentifies a strong candidate that meets their profile who wouldn't finda way to hire this individual. It is a rarity to say the least. Sales teamshave turnover either driven by the company or the employee. It is bestto have a candidate portfolio at the ready than to begin a process of

surfacing candidates when a seat is open. Poor hiring decisions aremade out of desperation to fill a seat. The open seat is a cost to thecompany every day it is unfilled. Yet, the cost is more painful if theseat is filled by someone who doesnt fit.

3. Practice Reverse Interviewing. Since the intent of the process isfor both sides to be able to determine if a marriage should beformulated, a wonderful technique is reverse interviewinganinterview performed by a member of the sales team who would be apeer if the candidate was hired. It is important that the individual(s)selected to participate in this step are loyal to the company,

knowledgeable and make a favorable impression.

However, unlike traditional interviews, the "interviewer" does not askany questions of the candidate (as you know, it is very easy to getyourself in hot water if illegal questions are asked). Thus, you don'twant untrained people asking questions. Rather, this "questionless"exercise has two different purposes. The first is to provide thecandidate with an opportunity to ask questions of someone who wouldbe their peer if they were to be hired. In essence, it is a way for themto get a picture of a day in the life of this job. The second purpose is tomeasure how the candidate prepares for a sales call.

Afterwards, conduct a debrief with the "reverse interviewer" to seewhat questions were asked. Did the candidate take advantage of thisopportunity, bring prepared and insightful questions and write downanswers? If they didn't, what kind of preparation will the candidate dofor a sales call? How interested are they really in this job?

5. Host a Mock Sales Call. What better way to see if someone fitsinto your company's selling environment than to put them right in it?To do this effectively, you need to create a scenario for the candidate.

I've found it most beneficial to give the candidate the scenario a dayahead of time so they can prepare. They should be provided with thesame amount of information a sales person in your company normallyhas before making an initial sales call.

Those members of your company who participate in the exerciseshould be somewhat scripted. I say "somewhat" because you don'twant it to be so dry that it is unrealistic, but without any scripting it can

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be hard to stay in character.

The last piece you need to do this well is a score sheet. Know what youare looking to measure in the process and score accordingly. Can theyconduct a thorough needs analysis? Did they identify the challenges

faced by this prospect? Would you buy from them?

6. Use Online Assessment Testing Wisely. There are a myriad oftools that are very helpful in the screening process for both personalityand skill. However, few, if any, of the online assessment companiessuggest that their tool should be used to make a hiring decision. Themost appropriate application is to treat it as an additional data point inthe sales talent screening program.

Linda Moeller, product director of Employee Continuum, has seencompanies use this great tool incorrectly. "We have seen many

organizations fail to take the context of an organization into accountwhen deciding the most appropriate assessment to use. For example,many organizations assume that implementing a sales assessment willguarantee them improved sales performers. This is not necessarily thecase. For example, the personality characteristics required for a salesperson selling office supplies to purchasing agents are very differentthan those required for a salesperson selling everything needed for adentist office. In order to be successful, an organization needs toconsider the type of relationship they have with their clientele and thecompetencies that will make these relationships successful," she says.

b. As a consumer, what are the steps you willundertake before you decide to buy a car? (5 marks)

The steps undertaken before deciding to buy a car-

1. Need recognition: customer posses two type of stimuli at thisjuncture. One is driven by the internal stimuli and another is externalstimuli. The examples of internal stimuli are customers desire, attitude

or perception and external stimuli are advertising etc. From bothstimuli customers understand the need for the product. Here marketershould understand what customers needs have that drew customerstowards the product and should highlight those in the communicationstrategy.

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2. Information search: In this stage customer wants to find out theinformation about the product, place, price and point of purchase.Customer collects the information from different sources like

a. Personal sources: Family, friends and neighbors

b. Commercial sources: Advertising, sales people, dealers, packagingand displays.

c. Public sources: mass media and consumer rating agencies.

d. Experiential sources: Demonstration, examining the product.

In this stage marketer should give detailed information about theproduct. The communication should highlight the attributes andadvantages of the product in this stage so that he created the positive

image about the product.

3. Evaluation of alternatives: After collecting the information,consumers arrive at some conclusion about the product. In this stagehe will compare different brands on set parameters which he or shethinks required in the product. The evaluation process varies fromperson to person. In general Indian consumer evaluate on the followingparameters

a. Price

b. Features

c. Availability

d. Quality

e. Durability

At this stage marketer should provide comparative advertisements toevaluate the different brands. The advertisement should be differentfor different segments and highlight the attribute according to the

segment.

4. Purchase decision

In this stage consumer buy the most preferred brand. In Indiaaffordability plays an important role at this stage. Organizations bringmany varieties of the products to cater to the needs of customers.

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5. Post purchase behavior

After purchasing the product the consumer will experience some levelof satisfaction and dissatisfaction. The consumer will also engage inpost purchase actions and product uses of interest to the marketer.

The marketers job does not end when the product is bought butcontinues into the post purchase period. Customer would like to seethe performance of the product as he perceived before purchase. If theperformance of the product is not as he expected then he developsdissatisfactions. Marketer should keep an eye on how consumer usesand disposes the product. In some durable goods Indian consumerwant resale value also. Many automobile brands that were not able toget resale value lost their market positions.

Q. 5a. What are the features of Business markets? How isit different from consumer markets? (5 marks)

Features or Characteristics of Business Markets

Following are some of the unique features of business markets wherelarge establishments purchase the required goods and services from

other businesses. Such B2B operations determine the organizations asbuyers and those organizations who supply the various requirementswill be the sellers or suppliers or service providers.

1. Few but bulk Buyers: The no. of buyers is few but they buy inlarge quantity. For example, major airlines buy the necessaryequipments from the aircraft manufacturers

2. Geographical concentration of buyers: Buyers aregeographically concentrated. For example, shipping industries arelocated on the east and west coasts of India than in any other places.

3. Variable demand: The nature of demand is fluctuating because thedemand is basically a derived one. Based on the requirements of theconsumer markets, organizations buy the goods and make the finishedgoods available in the market for final consumption. Larger theconsumer demand, larger will be the organizational buying. Forexample, mobiles are being used by a large population and so cellularcompanies have to meet this rising demand.

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4. Inelastic demand: The demand is also inelastic becauseorganizations cannot make rapid changes in the production structureand so prices remain constant in the short-term. For example, Shoemanufacturers will not buy much leather if the price of leather is lessneither will they buy less leather if the price increases.

5. Systematic purchasing: The purchasing activity is directlybetween the buyer and supplier organization which means there are noor very few middlemen involved. Purchasing activity is usuallyundertaken by purchase departments based on a proper structure andthrough various mechanisms like having purchase requisitions fromother sections, inviting tenders and sending invoices from thesuppliers, purchasing agreements or contracts with the key suppliers,renewing agreements etc. For example, Reliance Fresh has regularcontracts with the agricultural producers for smooth supply of freshfruits and vegetables.

6. Multiple buying influences: there will be several parties involvedin deciding about the purchases because organizations will haveseveral departments and units functioning under it with differentrequirements. So, unless they have the proper resources to work withthere will be problems in the departments. For example, purchasedepartment in a Hospital must be aware about the specificrequirements in the clinical wards, operation theaters, labs, etc.

7. Reciprocation: This means that when an organization buys goodsfrom another organization then the supplier organization also might

need certain other goods that are produced by the buyer organization.For example, a stationery supplier will supply the necessarystationeries to the paper manufacturer who in turn provides papers tothe supplier.

8. Lease agreements: Most organizations take on lease theexpensive equipments required by them rather than buy it. So, in thisway, they reduce cost, get better service and the lessor or one whoprovides the equipments will also profit from the rent or lease charges.For example, TATA provides the transport trucks to other organizationson lease.

b. List out the 5 important requisites of an effectivesegmentation by giving suitable examples. (5 marks)

Requisites of Effective Segmentation

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1. Measurable and Obtainable: The size, profile and other relevantcharacteristics of the segment must be measurable and obtainable interms of data. If the information is not obtainable, no segmentation canbe carried out. For example, Census of India provides the data onmigration and education level, but does not specify how many of the

migrated employees are educated and if educated how many are inwhite collared jobs. If a company wants to target white color collaredemployees who are migrated to particular city, it will not able tomeasure the same. .

2. Substantial: The segment should be large enough to be profitable.For consumer markets, the small segment might disproportionablyincrease the cost and hence products are priced too high. For example,when the cellular services started in India cost of the incoming callsand outgoing calls were charged at Rs 12/minute. As the number ofsubscribers grew, incoming calls became free. Further growth of

subscribers resulted in lowering tariffs for outgoing calls to the lowestlevel in the world.

3. Accessible: The segment should be accessible through existingnetwork of people at an affordable cost. For example, Majority of therural population is still not able to access the internet due to the highcost and non-availability of connections and bandwidth.

4. Differentiable:The segments should be different from each otherand may require different 4Ps and programs. For example, LifeInsurance Corporation of India needs separate marketing programs to

sell their insurance plans, unit plans, pension plans and group schemes

5. Actionable: The segments which a company wishes to pursue mustbe actionable in the sense that there should be sufficient finance,personnel, and capability to take them all.

Q. 6. Explain briefly what are the several processesinvolved in new product development. (10 marks)

New Product Development

New products are essential for existing firms to keep the momentumand for new firms they provide the differentiation. New product doesntmean that it is absolutely new to the world. It may be a modification, oroffered in a new market, or differentiated from existing products.Therefore it is necessary to understand the concept of new products.

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Meaning of New Products:

a. They are really innovative. For example, Googles Orkut, anetworking site which revolutionized social networking. In this sitepeople can meet like minded people; they can form their own groups,

share photos, comments and many more.

b. They are very different from the others: Haier launches path-breaking 4-Door Refrigerators first time in India

c. They are imitative; these products are not new to the market butnew to the company. For example, Cavin Kare launched Ruchi pickles.This product is new to Cavin Kare but not to the market.

New product development process:

Stage 1 Idea generation: New product idea can be generatedeither from the internal sources or external sources. The internalsources include employees of the organization and data collected fromthe market. The external source includes customers, competitors andsupply chain members. For example, Ingersoll Rand welcomes newideas from the General public

Stage 2-Idea screening: Organization may have various ideas but itshould find out which of these ideas can be translated into concepts. Inan interview to Times of India, Mr. Ratan Tata, chairman TATA groupdiscussed how his idea saw many changes from the basic version. He

told that he wanted to develop car with scooter engine, plastic doorsetc But when he unveiled the car, there were many changes in theproduct. This shows that initial idea will be changed on the basis ofmarket requirements.

Stage 3 Concept development: the main feature or the specificdesire that it caters to or the basic appeal of the product is created ordesigned in the concept development.

Concepts used for Tata Nano car are -

Concept I: Low-end rural car, probably without doors or windows andwith plastic curtains that rolled down, a four-wheel version of the auto-rickshaw

Concept II: A car made by engineering plastics and new materials, andusing new technology like aerospace adhesives instead of welding.

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Concept III: Indigenous, in-house car which meets all the environmentstandards

Stage 4 Concept testing: At this stage concept is tested with thegroup of target customers. If any changes are required in the concept

or the message it will be done during this stage. Also the effectivenessis tested on a minor scale. If the concept meets the specificrequirements, then it will be accepted.

Stage 5 Marketing strategy development: The marketing strategydevelopment involves three parts. The first part focuses on targetmarket, sales, market share and profit goals. TATAs initial businessplan consisted sales of 2 lakhs cars per annum. The second partinvolves product price, distribution and marketing budget strategies.TATAs fixed Rs 1 lakhs as the car price, and finding self employedpersons who work like agent to distribute the cars. The final part

contains marketing mix strategy and profit goals.

Stage 6 Business analysis: it is the analysis of sales, costs andprofits estimated for a new product and to find out whether these alignwith the company mission and objectives.

Stage 7 Product development: during this stage, product is madeto undergo further improvements, new features or improvised versionsare added to the product. There is also scope for innovation and usingthe latest technology into the product.

Stage 8 Test marketing: is the most crucial stage for the testingproducts performance and its future in the market. There are certaincases where product has failed in the test marketing and had to bewithdrawn.

The product is introduced into the realistic market

The 4Ps of marketing are tested.

The cost of test marketing varies with the type of product.

Stage 9 Commercialization: In this stage product is completelyplaced in the open market and aggressive communication programaccompanied with promotion activities is carried out to support it.

38997223 marketing managemnt

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