Q. 1. A. WHAT IS MARKETING? EXPLAIN THE IMPORTANCE OF MARKETING FOR A BUSINESS ORGANISATION.

Marketing is the process of communicating the value of a product or service to customers. Marketing might sometimes be interpreted as the art of selling products, but selling is only a small fraction of marketing. As the term Marketing may replace Advertising it is the overall strategy and function of promoting a product or service to the customer. DEFINITION- the activity set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. IMPORTANCE OF MARKETING FOR A BUSINESS ORGANISATION The heart of your business success lies in its marketing. Most aspects of your business depend on successful marketing. The overall marketing umbrella covers advertising, public relations, promotions and sales. Marketing is a process by which a product or service is introduced and promoted to potential customers. Without marketing, your business may offer the best products or services in your industry, but none of your potential customers would know about it. Without marketing, sales may crash and companies may have to close. To Promote For a business to succeed, the product or service it provides must be known to potential buyers. Unless your business is known in the community and have communication with your customers readily available, you have to use marketing strategies to create product or service awareness. Without marketing, your potential customers may never be aware of your business offerings and your business may not be given the opportunity to progress and succeed. Using marketing to promote your product, service and company provides your business with a chance of being discovered by prospective customers. Higher Sales Once your product, service or company gets on the radar screen of your prospects, it increases your chances that consumers will make a purchase. As awareness becomes a reality, it is also the point where new customers start to spread the word, telling friends and family about this amazing new product they discovered. Your sales will steadily increase as the word spreads. Without employing marketing strategies, these sales may not have ever happened; without sales, a company cannot succeed. Company Reputation The success of a company often rests on a solid reputation. Marketing builds brand name recognition or product recall with a company. When a company reaches the high expectations of the public, its reputation stands on firmer ground. As your reputation grows, the business expands and sales increase. The reputation of your company is built through active participation in community programs, effective communication--externally and externally--and quality products or services, which are created or supported by marketing efforts. Healthy Competition Marketing also fosters an environment in the marketplace for healthy completion. Marketing efforts get the word out on pricing of products and services, which not only reaches the intended consumers, but also reaches other companies competing for the consumers business. As opposed to companies that have a monopoly on products and services that can charge almost any price, marketing helps keep pricing competitive for a business to try to win over consumers before its competition does. Without competition, well-known companies would continue to sell while lesser known companies or new companies would stand little chance of ever becoming successful. Marketing facilitates the healthy competition that allows small businesses and new businesses to be successful enter and grow in the marketplace. Considerations Although marketing is hugely important for a business to succeed, it can also be very expensive. In its first year, a company might spend as much as half of its sales on marketing programs. Q.CHARACTERISTICS OF FINANCIAL SERVICES: Like any other service, financial services are characterized by the following: nareshsukhani@gmail.com TYBFM - MFS

FINANCIAL SERVICES-INTANGIBILITY: The basic characteristics of financial services are that they are intangible in nature. For financial services to be successfully created and marketed, the institutions providing them must have a good image and the confidence of its clients. Quality and innovativeness of services are the focal points for building credibility and gaining the trust of the clients. FINANCIAL SERVICES-INSEPARABILITY: The functions of producing and supplying financial services have to be carried out simultaneously. These cases for a perfect understanding between the financial services firms and their clients. FINANCIAL SERVICES-PERISHABILITY: Financial services have to be created and delivered to the target clients. They cannot be stored. They have to be supplied according to the requirements of customers. Hence, it is imperative that the providers of financial services ensure a match between demand and supply FINANCIAL SERVICES-DYNAMISM: The financial services must be dynamic. They have to be constantly redefined and refined. On the basis of socio-economic changes occurring in the economy, such as disposable income, standard of living, level of education, etc. Financial services institutions must be proactive in nature and evolve new services by visualizing the expectations of the market FINANCIAL SERVICES- CUSTOMER ORIENTATION: The institutions providing financial services study the needs of the customers in detail. Based On the results of the study, they come out with innovative financial strategies that give due regard to costs, liquidity, and maturity considerations for various financial products. This way, financial services are customer - oriented. Q1.A.What are financial Products? Explain the major types of financial products available in India. Financial products refer to those instruments that help you save, invest, get insurance or get a mortgage. Various banks issue these, financial institutions, stock brokerages, insurance providers, credit card agencies and government sponsored entities. Financial products are categorized in terms of their type or underlying asset class, volatility, risk and return. The major types of financial products are: 1.Shares: These represent ownership of a company. While corporations to finance their business needs initially issue shares, they are subsequently bought and sold by individuals in the share market. They are associated with high risk and high returns. Returns on shares can be in the form of dividend payouts by the company or profits on the sale of shares in the stock market. Shares, stocks, equities and securities are words that are generally used interchangeably. 2.Bonds: These are issued by companies to finance their business operations and by governments to fund expenses like infrastructure and social programs. Bonds have a fixed interest rate, making the risk associated with them lower than that with shares. The principal or face value of bonds is recovered at the time of maturity. 3. Treasury Bills: These are instruments issued by the government for financing its short-term needs. They are issued at a discount to the face value. The profit earned by the investor is the difference between the face or maturity value and the price at which the Treasury bill was issued. 4. Options: Options are rights to buy and sell shares. An option holder does not actually purchase shares. Instead, he purchases the rights on the shares. 5. Mutual Funds: These are professionally managed financial instruments that involve the diversification of investment into a number of financial products, such as shares, bonds and government securities. This helps to reduce an investor's risk exposure, while increasing the profit potential. nareshsukhani@gmail.com TYBFM - MFS

6. Certificate of Deposit: Certificates of deposit (or CDs) are issued by banks, thrift institutions and credit unions. They usually have a fixed term and fixed interest rate. 7. Annuities: These are contracts between investors and insurance companies, wherein the latter makes periodic payments in exchange for financial protection in the event of an unfortunate incident. 8. Insurance: A contract in which one party agrees to pay another partys financial loss resulting from a specified event of unfortunate incident. 9. Banking: Banks are financial intermediary institutions for receiving, lending, and safeguarding money as well as conduction other financial transactions. There are several types of banks; nationalized banks, foreign banks, private banks, co-operative banks, agricultural bank, and investment bank. 10. Cash equivalents: There are relatively safe and highly liquid investment options. T-Bills and money market funds are cash equivalents.

Q1.B. TYPES OF ENVIRONMENT On the basis of the extent of intimacy with the firm, the environmental factors may be classified into different types-internal and external. INTERNAL ENVIRONMENT The internal environment is the environment that has a direct impact on the business. Here there are some internal factors which are generally controllable because the company has control over these factors. It can alter or modify such factors as its personnel, physical facilities, and organization and functional means, like marketing, to suit the environment. The important internal factors which have a bearing on the strategy and other decisions of internal organization are discussed below. Value system The value system of the founders and those at the helm of affairs has important bearing on the choice of business, the mission and the objectives of the organization, business policies and practices. Mission and vision and objectives Vision means the ability to think about the future with imagination and wisdom. Vision is an important factor in achieving the objectives of the organization. The mission is the medium through which the objectives are achieved. Management structure and nature The structure of the organization also influences the business decisions. The organizational structure like the composition of board of directors influences the decisions of business, as they are internal factors. The structure and style of the organization may delay a decision-making or some other helps in making quick decisions.

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Internal power relationship The relationship among the three levels of the organization also influences on the business. The mutual coordination among those three is an important need for a business. The relationship among the people working in the three levels of the organization should be cordial. Human resource The human resource is the important factor for any organization as it contributes to the strength and weakness of any organization. The human resource in any organization must have characteristics like skills, quality, high morale, commitment towards the work, attitude, etc. T he involvement and initiative of the people in an organization at different levels may vary from organization to organization. The organizational culture and overall environment have bearing on them. Company image and brand equity The image of the company in the outside market has the impact on the internal environment of the company. It helps in raising the finance, making joint ventures, other alliances, expansions and acquisitions, entering sale and purchase contracts, launching new products, etc. Brand equity also helps the company in same way. Miscellaneous factors The other factors that contribute to the business success or failure are as follows: Physical assets and facilities: - facilities like production capacity, technology are among the factors which influences the competitiveness of the firm. The proper working of the assets is indeed for free flow of working of the company. Research and development: - Though R&D department is basically done external environment but it has a direct impact on the organization. This aspect mainly determines the companys ability to innovate and compete. Marketing resources: - Resources like the organization for marketing, quality of the marketing men, brand equity and distribution network have direct bearing on marketing efficiency of the company. Financial factors: - factors like financial policies. Financial positions and capital structure is also important internal environment affecting business performances, strategies and decisions.

EXTERNAL ENVIRONMENT It refers to the environment that has an indirect influence on the business. The factors are uncontrollable by the business. There are two types of external environment. Micro Environment The micro environment is also known as the task environment and operating environment because the micro environmental forces have a direct bearing on the operations of the firm. The micro environment consists of the actors in the companys immediate environment that affects the performance of the company. These include the suppliers, marketing intermediaries, competitors, customers and the public. The micro environmental factors are more intimately linked with the company than the macro factors. The micro forces need not necessarily affect all the firms in a particular industry in the same way. Some of the micro factors may be particular to a firm. When the competing firms in an industry have the same micro elements, the relative success of the firms depends on their relative effectiveness in dealing with these elements. nareshsukhani@gmail.com TYBFM - MFS

 Suppliers An important force in the micro environment of a company is the suppliers, i.e., those who supply the inputs like raw materials and components to the company. The importance of reliable source/sources of supply to the smooth functioning of the business is obvious. Customer The major task of a business is to create and sustain customers. A business exists only because of its customers. The choice of customer segments should be made by considering a number of factors including the relative profitability, dependability, and stability of demand, growth prospects and the extent of competition. Competition not only include the other firms that produce same product but also those firms which compete for the income of the consumers the competition here among these products may be said as desire competition as the primary task here is to fulfil the desire of the customers. The competition that satisfies a particular category desire then it is called generic competition. Marketing Intermediaries The marketing intermediaries include middlemen such as agents and merchants that help the company find customers or close sales with them. The marketing intermediaries are vital links between the company and the final consumers.

Financiers The financiers are also important factors of internal environment. Along with financing capabilities of the company their policies and strategies, attitudes towards risk, ability to provide non-financial assistance etc. are very important. Public Public can be said as any group that has an actual or potential interest in or on an organizations ability to achieve its interest. Public include media and citizens. Growth of consumer public is an important development affecting business. Macro Environment Macro environment is also known as General environment and remote environment. Macro factors are generally more uncontrollable than micro environment factors. When the macro factors become uncontrollable, the success of company depends upon its adaptability to the environment. Some of the macro environment factors are discussed below: Economic Environment Economic environment refers to the aggregate of the nature of economic system of the country, business cycles, the socio-economic infrastructure etc. The successful businessman visualizes the external factors affecting the business; anticipating prospective market situations and makes suitable to get the maximum with minimize cost. Social Environment The social dimension or environment of a nation determines the value system of the society which, in turn affects the functioning of the business. Sociological factors such as costs structure, customs and conventions, mobility of labour etc. have far-reaching impact on the business. These factors determine the work culture and mobility of labour, work groups etc. nareshsukhani@gmail.com TYBFM - MFS

Political Environment The political environment of a country is influenced by the political organisations such as philosophy of political parties, ideology of government or party in power, nature and extent of bureaucracy influence of primary groups etc. . . . The political environment of the country influences the business to a great extent. Legal Environment Legal environment includes flexibility and adaptability of law and other legal rules governing the business. It may include the exact rulings and decision of the courts. These affect the business and its managers to a great extent.

Technical Environment The business in a country is greatly influenced by the technological development. The technology adopted by the industries determines the type and quality of goods and services to be produced and the type and quality of plant and equipment to be used. Technological environment influences the business in terms of investment in technology, consistent application of technology and the effects of technology on markets. Q2.A.Marketing mix for a service organization The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps which include People, Process and Physical 8evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail. Product The product in service marketing mix is intangible in nature. Like physical products such as soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogeneous, perishable and cannot be owned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be. nareshsukhani@gmail.com TYBFM - MFS

Place - Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Promotion Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously. Why is that? It is because competition in this service sector is generally high and a promotion is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions. Pricing Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies. Here on we start towards the extended service marketing mix. People People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, an employee in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staffs are better than the rest. Definitely a USP in case of services. Process Service process is the way in which a service is delivered to the end customer. Lets take the example of two very good companies McDonalds and FedEx. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer. Physical Evidence The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. Thats physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator. This is the service marketing mix (7p) which is also known as the extended marketing mix. nareshsukhani@gmail.com TYBFM - MFS

Q2.B. The objective of CRM is customer retention through customer delight. A powerful technique companies use to drive both customer delight and bottom line results is to envision not only end-customers, but also internal customers, including employees, business partners, and shareholders. There is an advantage for morale and company spirit when everyone treats everyone as they wish to be treated, or literally as a customer. The sense of shareholders-as-customers goes beyond this. World class quality improvement methodologies and other leading-edge approaches provide a framework for building end-customer delight while you contain or even reduce costs - a huge advantage and arguably a necessary requirement for retailers to invest in enhancement of the customer experience. The building blocks toward end-customer delight while you contain costs and drive for increased customer acquisition and retention rates, higher sales and profitability per customer, improved brand perception, and ultimately shareholder value. In The Artful Science of Customer Experience, end-customer delight, and customer value are, in a sense, two sides of the same coin. Focusing an organizations efforts on what will delight the customer provides, simultaneously, a working rationale for eliminating projects and programs that are wasteful in the sense that they contribute little or nothing to this objective. 96 percent of not satisfied customers dont complain. They just walk away, and youll never know why. Thats because they often dont know how to complain, or cant be bothered, or are too frightened, or dont believe itll make any difference. Whilst they may not tell you whats wrong, they will certainly tell plenty of others. A system for unearthing complaints can therefore be the lifeblood of your business, because customers who complain are giving you a gift, theyre still talking to you, theyre giving you another opportunity to return them to a state of satisfaction and delight them and the manner in which you respond gives you another chance to show what youre made of and create even greater customer loyalty. It is very difficult to build long-term relationships with customers if their needs and expectations are not understood and well met. It is a fundamental precept of modern customer management that companies should understand customers, and then acquire and deploy resources to ensure their satisfaction and retention. This is why CRM is grounded on detailed customer-related knowledge. Customers that you are not able to serve well may be better served by your competitors. Delighting customers, or exceeding customer expectations, means going beyond what would normally satisfy the customer. This does not necessarily mean being world-class or best-in-class. It does mean being aware of what it usually takes to satisfy the customer and what it might take to delight or pleasantly surprise the customer. You cannot really strategize to delight the customer if you do not understand the customer's fundamental expectations. You may stumble onto attributes of your performance that do delight the customer, but you cannot consistently expect to do so unless you have deep customer insight. Consistent efforts to delight customers show your commitment to the relationship. Commitment builds trust. Trust begets relationship longevity.

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Q2A: What is a product? Explain the stages in new product development. In business and engineering, New Product Development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new product within the overall strategic process of product life cycle management used to maintain or grow their market share.

This is a straightforward way of looking at the process that starts with idea generation, moves to development of individual features and then to full product development and finally into product testing. 1. Idea Generation is often called the "fuzzy front end of the NPD process
Ideas for new products can be obtained from basic research using as SWOT analysis (Strengths,

Weaknesses, and Opportunities & Threats). Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.
Lots of ideas are generated about the new product. Out of these ideas many are implemented.

The ideas are generated in many forms. Many reasons are responsible for generation of an idea.
Idea Generation or Brainstorming of new product, service, or store concepts - idea generation

techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step).

2. Feature Development Feature development is the process of identifying features that would be of interest to customers. Traditional methods such as Importance Scales can be used, but may not provide sufficient discrimination between features.

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Pair wise comparisons of features are a straightforward method for identifying feature importance. The task is simple, but can be tedious if a large list of features needs to be culled.

More recently developed methods such as Max-Diff scaling can provide a better alternative. Max-Diff is similar to pair wise comparison, except that more than two features are evaluated at a time (3-5) and the most and least preferred alternative is chosen from each set.

Some advanced statistical analysis on the back end provides a score for each feature that is generally more discriminatory than a regular importance scale. Another alternative is the Kano method where the positive and negative aspect of each feature is rated in order to distinguish the must havefeatures from the nice to have features. The final method in this stage (that straddles this and the next stage) is the Self-explicated Method (SEM). Respondents rate the desirability of each level of each attribute as well as the importance of each attribute. Combining these two pieces of information gives attractiveness scores (similar to conjoint utilities) for each attribute level. Although all attributes and levels are rated by respondents (as in conjoint analysis), since they are presented individually, this method may be more appropriately seen as useful for feature development.

3. Product Development In this stage, combinations of features are used to build or evaluate the product. The Configuration allows survey respondents to build their ideal product by selecting from a list of available features. Usually prices are provided at the feature level to ensure that respondents make realistic decisions. As respondents build their own ideal products, the most popular features and feature combinations rise to the surface, resulting in the automatic development of preference based market segments. The Optimizer is different in that respondents make choices from among fully formed products. Information from their choices is taken into account in creating successive products that are more preferred till the process finally converges on the respondents ideal product. This method is more appropriate when the design and packaging (i.e. the visual element) is more important. As with the Configuration, the market segments itself into preference based segments. The various flavours of conjoint (such as traditional, discrete choice, adaptive) can also be used in this stage to identify feature importance. But care has to be taken to ensure that the basic assumptions are met and that the right type of conjoint is used. 4. Product Testing Conjoint analysis can be fruitfully used in this stage also to estimate the interest in various product combinations and especially in running market simulations.

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The latter ability is very important in cases where a strong competitive market exists and reasonable estimates of take rates and ability to choose the ideal combination for the market are requisites.

Concept testing is much more limited than conjoint and is usually used when the product is almost set except for perhaps one or two questions, often relating to price. In short, the chaos of the product development process can be structured, and appropriate

methods applied, to gain maximum benefit at different stages. These steps may be iterated as needed. Some steps may be eliminated. To reduce the time that the NPD process takes, many companies are completing several steps at the same time (referred to as concurrent engineering or time to market). Most industry leaders see new product development as a proactive process where resources are allocated to identify market changes and seize upon new product opportunities before they occur in contrast to a reactive strategy in which nothing is done until problems occur or the competitor introduces an innovation. Many industry leaders see new product development as an ongoing process (referred to as continuous development) in which the entire organization is always looking for opportunities. The NPD process typically requires both engineering and marketing expertise; cross-functional teams are a common way of organizing projects. The team is responsible for all aspects of the project, from initial idea generation to final commercialization, and they usually report to senior management (often to a vice president or Program Manager). In those industries where products are technically complex, development research is typically expensive and product life cycles are relatively short, strategic alliances among several organizations helps to spread the costs, provide access to a wider skill set and speeds up the overall process The Path to Developing Successful New Products points out three key processes that can play critical role in product development: Talk to the customer; Nurture a project culture; Keep it focused.

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Q2B: Explain the Product Life Cycle (PLC) concept in detail.

Every product has a life cycle that is a period of time during which it appeals to the consumer, i.e. it sells. But during the period of the Product Life Cycle sales are not constant, there are variations in levels of demand, the amount of competition in the market place, consumer understanding and liking of the product and the share of the market the product captures. Normally five separate stages of a products life cycle are recognized, and these are: Introduction Growth Maturity Saturation Decline

Introduction- The product is new to the market, few potential consumers know of its existence. Price can be high, (for example new computer games) and sales may be restricted to early adopters (those consumers that must have new technology, gadgets, or fashions first). Profits are often low or losses are being made, this is because development costs have to be repaid, and advertising expenditure can be high. Some products are introduced to the market in a splash of publicity, hoping to capture as large a market share as soon as is possible.

Growth- The product is becoming more widely known and consumed. Marketing is used to try to establish or strengthen the brand and develop an image for the product. Profits may start to be earned, but advertising expenditure is still high. Prices may fall as the first competitors enter the market. nareshsukhani@gmail.com TYBFM - MFS

Maturity- The product range may be extended, by adding both width and depth. Competition will increase and this has to be responded to. Advertising should be used to rein-force the image of the product in the consumers minds. Sales are at their peak, profits should be high.

Saturation- Very few new customers are gained, replacement purchases are the trend. Firms should try to reduce their costs, so that pricing strategies can be more flexible. Brand image should be maintained, and in so doing full value is taken from the brand. Alternatively the brand can move down market, capturing new markets, or market niches, but this should not be done at the expense of quality. Profits may be maintained, but can start to fall. Decline- Sales can now fall fast, and as a result the range sold is likely to be reduced, with the firm concentrating on core products. Advertising costs will be reduced, and attempts will be made to mop-up what is left of the potential market. Each product sold could be quite profitable as development costs have been paid back at an earlier stage in the life cycle. But overall, total profits will fall. Price is also likely to fall, but by concentrating on remaining market niches there should be some price stability. For example: facing a saturated market for baking soda in its traditional use, Arm & Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorize powders to be used before vacuuming was also created.

Q3 A How are competitors identified and analyzed by business organizations? COMPETITOR ANALYSIS: Competitor Analysis is an important part of the strategic planning process. Competitor analysis has several important roles in strategic planning: To help management understand their competitive advantages/ disadvantages relative to competitors. To generate understanding of competitors past, present (and most importantly) future strategies. To provide an informed basis to develop strategies to achieve competitive advantage in the future. To help forecast the returns that may be made from future investments. Competitor analysis has two primary activities: (1) Obtaining information about important competitors (2) Using that information to predict competitive behavior. PORTERS FIVE FORCES MODEL FOR COMPETITOR ANALYSIS: Porter identified five factors that act together to determine the nature of competition within an industry. These are the: Threat of substitute products. Threat of new entrants to a market. Degree of competitive rivalry. Bargaining power of suppliers. Bargaining power of buyers.

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1. Threat of substitute products: Threat of substitute products means how easily the customers can switch to the competitors product. Threat of substitute is high when: There are many substitute products available. Customer can easily find the product or service that the company is offering at the same or less price. Quality of the competitors product is better. Substitute product is by a company earning high profits so can reduce prices to the lowest level. In the above mentioned situations, Customer can easily switch to substitute products. So substitutes are a threat to the company. When there are actual and potential substitute products available then segment is unattractive. Profits and prices are affected by substitutes so; there is need to closely monitor price trends. In substitute industries, if competition rises or technology modernizes then prices and profits decline. 2. Threat of new entrants: A new entry of a competitor into the market also weakens the power. Threat of new entry depends upon entry and exit barriers. Threat of new entry is high when: Capital requirements to start the business are less. Few economies of scale are in place. Customers can easily switch (low switching cost) The key technology is not hard to acquire or isnt protected well. The product is not differentiated. There is variation in attractiveness of segment depending upon entry and exit barriers. That segment is more attractive which has high entry barriers and low exit barriers. Some new firms enter into industry and low performing companies leave the market easily. When both entry and exit barriers are high then profit margin is also high but companies face more risk because poor performance companies stay in and fight it out. When these barriers are low then firms easily enter and exit the industry, profit is low. The worst condition is when entry barriers are low and exit barriers are high then in good times firms enter and it becomes very difficult to exit in bad times. 3. Industry Rivalry: Industry rivalry means the intensity of competition among the existing competitors in the market. Intensity of rivalry depends on the number of competitors and their capabilities. Industry rivalry is high when: There are number of small or equal competitors and less when theres a clear market leader. Customers have low switching costs. Industry is growing. Exit barriers are high and rivals stay and compete. Fixed costs are high resulting huge production and reduction in prices. nareshsukhani@gmail.com TYBFM - MFS

These situations make the reasons for advertising wars, price wars, modifications, ultimately costs increase and it is difficult to compete. 4. Bargaining power of suppliers: Bargaining Power of supplier means how strong is the position of a seller. How much the supplier has control over increasing the Price of supplies? Suppliers are more powerful when: Suppliers are concentrated and well organized. A few substitutes available to supplies. Their product is most effective or unique. Switching cost, from one supplier to another, is high. The company is not an important customer to Supplier. When suppliers have more control over supplies and its prices that segment is less attractive, it is best way to make win-win relation with suppliers. Its good idea to have multi-sources of supply.

5. Bargaining power of Buyers: Bargaining Power of Buyers means, how much control the buyers have to drive down the products price? Can they work together in ordering large volumes? Buyers have more bargaining power when: Few buyers chasing too many goods. Buyer purchases in bulk quantities. Product is not differentiated. Buyers cost of switching to a competitors product is low. Shopping cost is low. Buyers are price sensitive. Credible Threat of integration. Buyers bargaining power may be lowered down by offering differentiated product. If the company is serving a few but huge quantity ordering buyers, then they have the power to dictate the company. Q 3.A.Five Steps in the Consumer Decision-Making Process Marketers use their understanding of the decision-making process to target marketing messages. The consumer decision-making process is a systematic approach to buying that all consumers engage in with all purchases, whether it's a large-scale purchase such as a house or car, or an impulse buy at the checkout aisle. It's a process that combines the psychology of consumer behavior and the interests of marketers in understanding buyer behavior to more effectively market products and services to them. The process has multiple steps and is often outlined as a four- to six-step process. Need Recognition Need recognition, or awareness, is the trigger of the consumer decision-making process. Before a consumer embarks on a buying process, he must recognize a functional or emotional need. Functional needs are needs based on a product's use in performing a particular function. Emotional or hedonic needs are based on a consumer's desires for products or services for cravings, pleasure or other emotional interests. Information Search The second step of the process is sometimes considered to be one broad step, but in a five-step process, it's broken into information search and evaluation. Information search is basic research performed by a consumer to determine what providers and products offer a solution for his needs. Information searches include both internal and external processes. Internal research is recall of past experiences. This is common in impulse buys where the process develops very rapidly. External research is use of other resources such as the Internet, as well as consultation with other consumers. Evaluation The evaluation step involves formation of a consideration set and evaluation of options based on certain criteria. A consideration set is a handful of providers or brands that may meet your needs. Criteria are nareshsukhani@gmail.com TYBFM - MFS

elements such as quality, convenience, price, taste and durability. Consumers evaluate options based on criteria important to them when trying to find the best value. Purchase Once the best value is identified by a particular consumer, the next step is to make a purchase. This is when the customer presents his money in exchange for the product or service. At this point, the customer has determined that a particular solution is the best value for his money. Post-Purchase Evaluation The final step in the consumer decision-making process is the post-purchase evaluation. This is where the customer evaluates his purchase based on previous expectations. If the implementation or experience after the purchase exceeds expectations, he feels like he got an excellent value and is likely to make a repeat purchase. If it fails to meet expectations, he will not likely repurchase and may spread negative messages about the product.

Q4.A .RELATIONSHIP MARKETING

Growth of Relationship Marketing as a discipline and practice got an impetus post industrial era. Until this period the products and services were always produced in smaller quality where things were in short supply and were marketed in the local area. Industrialization led to mass production as well as standardization of the products and services. The businesses started expanding their geographic boundaries and exploring new markets where in it became necessary for them to evolve new methods of nareshsukhani@gmail.com TYBFM - MFS

marketing. They understood the importance of having to reach out and build a relationship with a customer and make efforts to retain the customer rather than keep spending on marketing to new customers every time. As competition is increasing, product innovation is definitely one of the key important elements that the Organizations need to depend upon to steer themselves ahead in the market. Along with the technical leadership the companies necessarily need to know how to reach out to the Customer. Engaging the Customer, Understanding the Customer and building relationship has become the need of the day. No wonder that every individual today is bombarded with calls, emails, personal visits, mailers and all sorts of marketing communications from different companies trying to vie for your attention. From the Credit card Company, bankers to the shopping mall as well as the local restaurant you frequent try to engage you into a relationship that goes beyond a single transaction. One of the outcomes of the evolution of Relationship Marketing has been the birth of CRM solutions Relationship Marketing is a marketing strategy whose objective is to establish and maintain a profitable, long-term relationship with a customer, which goes beyond the initial contact. Relationship marketing is a form of marketing that evolved from direct response marketing; it places emphasis on building longer-term relationships with customers rather than on individual transactions. Relationship marketing involves an understanding of customers' needs and wants through their lifecycle and providing a range of products or services accordingly Traditional marketing is said to use the functional department approach, which is now deemed too limited to provide a usable framework for assessing and developing customer relationships. In today's sophisticated consumer environment, an alternative model where the focus is on customers and relationships rather than markets and products is now required. Relationship marketing is cross-functional and is organised around processes that involve all aspects of an organisation. Many commentators prefer to call it "Relationship Management" in recognition of the fact that it involves much more than that which is normally included in marketing and the practice of relationship marketing has been greatly facilitated by several generations of Customer Relationship Management (CRM) software. Relationship Marketing therefore has evolved not only as a marketing strategy but has been the foundation on which the Companies build their core values and ethics. Relationship Marketing defines the framework for the Company to reach out as well as and orient themselves to the outside markets, to the end customer as well as to the business partners, the suppliers and vendors too. Relationship marketing is not limited to Customers and Suppliers alone but has been extended in scope to cover he internal employees as well as an effective way of reaching out to attracting best talent too In the high tech age where the marketing concepts and tools have undergone major changes with the introduction of e commerce, online selling, network marketing, direct marketing, B2B and B2C business models, relationship marketing has become the base on which the Business strategies as well as Marketing strategies are built. Business Organizations today have begun to recognize and consider the human quotient as well as the emotional quotient of business relationships. Relationship Marketing has evolved as a discipline that helps the Businesses to look beyond transactions to long term business associations. Successful Relationship Marketing strategy helps the Organization deepen and strengthen its revenue streams on long term basis. Relationship Marketing is a considered to be a core Corporate Philosophy on which the Business strategy is built upon. It is reflected in all of the Marketing disciplines including branding, advertisements, promotions, public relations as well as through all sales channels and networks through which the Company reaches out to the Markets and Customers.

Marketing Approaches There are two mechanisms through which businesses can drive financial correlation. Customer Satisfaction - Customer expectations are continuously increasing. Brand loyalty is a thing of the past. Customers seek out products and producers that are best able to satisfy their requirements. nareshsukhani@gmail.com TYBFM - MFS

Customer Retention - The other way round, retention of old customers costs much less than acquisition of new ones. It is 5 times more expensive to acquire a new customer than to retain an old one. The profit generated from the retained customer must therefore handsomely exceed the harvest reaped from the new clientele. The retained customer base is thus a huge intangible asset. BENEFITS OF RELATIONSHIP MARKETING In general, if your business can have a bulk volume of loyal customers, it can ensure the following benefits: Focus on providing value to customers. Emphasis on customer retention. Customers stay with the company longer. Customers deepen their relationship with company The method is an integrated approach to marketing, service and quality. Therefore it provides a better basis for achieving Competitive Advantage Customers demonstrate less price sensitivity Studies in several industries show that the costs to keep an existing customer are just a fraction of the costs to acquire a new customer. So often it makes economic sense to pay more attention to existing customers. Long-term customers may recommend company's products or services to others, by initiating free word of mouth promotions and referrals. Long-term customers are less likely to switch to competitors. This makes it more difficult for competitors to enter the market. Happier customers may lead to happier employees.

Q4.B. INSTITUTIONAL AND GOVERNMENT MARKETS. An institutional market is a consumer market composed of large buyers who tend to purchase in volume quantities. Several different types of organizations may be involved in a given institutional market, including educational institutions, businesses, and non-profit organizations. In most instances, the purchases are made in order to allow the organization to in turn provide services and goods to the individuals they serve. One example of an institutional market buyer is the house of worship. Local congregations of different faiths often purchase materials for printing orders of worship, newsletters and other printed items as part of their ongoing ministry to members and visitors. It is not unusual for a house of worship to also order furnishings such as pews or other forms of seating in volume amounts. Larger houses of worship will often purchase food, paper plates, plastic utensils, and other items that can be used during social events held at the facility. Hotels are another participants in the institutional market. Whether a stand-alone business or part of a larger chain, the hotel will often order textiles in bulk. Items such as bed sheets, spreads, towels, and similar products are often ordered in larger quantities in order to gain a discount off the retail price. Hotels that also operate restaurants will also often order institutionally prepared foods that can be used to provide tasty meals available in the restaurant or by way of room service. Another type of buyer that is common to the institutional market is the hospital. Healthcare facilities of this type purchase not only bedding and food in bulk, but may also purchase equipment for use in various parts of the facility. Beds and hardware for use in patient rooms is a couple of examples. X-ray equipment, tools for surgery, and disposable masks, gloves, and other items that are crucial to providing quality healthcare are also sold via this type of marketplace. Colleges and universities also are consumers in an institutional market. Purchases such as textbooks, computers, seating for classrooms, and various teaching aids are just a few of the items that buyers of this type will purchase on an ongoing basis. As with other larger buyers, universities often purchase in bulk as a way of obtaining a discount and thus stretching the institutional budget a little further. nareshsukhani@gmail.com TYBFM - MFS

In many cases, the priority of a buyer in an institutional market is not to earn a profit. Instead, the focus is on obtaining the highest quality of goods and services possible, while keeping costs in line with the current operating budget. This allows the buyer to offer quality services and support to clients, which in turn allows them to continue operating over the long term. A Government market can be very easily understood in the context where government is a buyer. In case the government purchases any such products as food, medicine, industrial supplies etc., its a government market. Some characteristic features of this market are: Involves a great deal of paperwork Financial constraints Bureaucratic barriers Awareness of specific political sensitivities

Q4.D.TRANSFORMATION IN MARKETING PRACTICES The most important difference between companies that are transforming their marketing practice is their interpretation of the purpose of marketing. In traditional practice marketing is about selling stuff. This follows the perception of the purpose of the business, which is to create profit. In firms that are transforming or have transformed marketing, marketing is about creating value for stakeholders not as a means to an end (profit) but rather as the end in itself. Within this shift, profit is the measurement of how well the organization is achieving that end. Embracing a Systems Perspective - A competence required for this emerging model is the ability to navigate complexity and engage with diverse, complex, adaptive systems. In transforming marketing, this includes issues such as:

a) Adopting a Multi-Stakeholder Orientation In transformed marketing, the organization enlarges its focus from stockholders to stakeholders who include investors, employees, customers, partners and society. The intent is not to manage stakeholders but to serve them. b) Cross-Functional Collaboration In the traditional paradigm, marketing is frequently soloed and given increasingly tactical focus. In transformed marketing, value creation for stakeholders (marketing) is everyones job and requires cross-functional collaboration across departments finance, human resources, manufacturing. c) Industry Collaboration and Partnerships Organizations transforming marketing are not isolated competitors seeking dominance and hoarding information. Rather they participate in industry collaborations to advance standards or other initiatives for the benefit of stakeholders. Creating Social Good A radical departure from serving simply the profit motive, to one that says profit is the measure of how much value or benefit the firm creates for stakeholders. This includes issues such as: a) Purpose and Culture Founded on Ethics and Responsibility Theres a constant focus in these organizations around doing the right thing, which begins with purpose and a culture that supports ethical action. b) Defining Success Beyond Profit Financial measures are insufficient determinants of success for many organizations that care deeply about their impacts on the environment, on nareshsukhani@gmail.com TYBFM - MFS

customers, on employees, vendors and more. Whether its two, three, four or more bottom lines transformed marketing evaluates success in more than financial terms. c) Organizational Calling Those practicing transformed marketing are guided by goals that serve a shared understanding of the organizations calling or intent to create stakeholder (or world) benefit. Living the Brand From one perspective brands are perceptions that are created to influence purchase decisions. In organizations practicing transformed marketing, however, the brand IS the company, and the company lives the brand. Its not perception. Its reality. Branding campaigns seek to create awareness of that reality, not to create it virtually. Elements of this include: a) Brand Rooted in Clear Differentiation Strategy In transformed marketing the brand is rooted in a solid business model that articulates a long-term strategy for creating value for stakeholders distinct from that of other firms. By contrast, head-to-head competition or competition on perception alone reinforces the vicious cycle of promotion to compete, leading to ethical trade-offs, and a firm-centric view. b) Operations Aligned to fulfil Brand Promises The operational side of branding means taking the brand deeply into every aspect of the organization. This requires translating the implications of the brand for the day-to-day functions of departments. Representative questions to ask in this process include: What type of person should we hire to reflect the brand values? How does the brand change what our office looks like? How do I need to share information with other departments in order to help them live the brand?

Q4.E.MARKETING OF FINANCIAL PRODUCTS IN UK Incidents of mis-selling in the United Kingdom were much greater in number. In response to this situation, much more specific rules were developed in the FSA Conduct of Business Rules handbook, chiefly covering four areas. Oversight of the qualifications of sellers The service provider must take reasonable measures to ensure that its Representatives possess the expertise necessary to sell and provide advice for each type of product and may, if not the case, restrict their authority to sell certain products or require them to refer the customer to a more qualified representative. The service provider must take all measures to ensure that the method of compensation of its representatives or sellers does not impair their neutrality or create an incentive to provide unsuitable recommendations. Finally, the service provider is required to inform the customer of the degree of independence of its advisory services (totally independent or limited to certain products of the group or group partners). Know-your-customer obligations The service provider is required to maintain records of information on the customer profile obtained at the beginning of the relationship and during periods that vary according to the products and to update this information on a regular basis or every time advice is provided if on an occasional basis. A guide for collecting information on the profile of the customer defines the modus operandi for service providers. The customer file must include at the very least a questionnaire concerning the customers needs and priorities and level of risk tolerance/aversion. A hard copy or electronic form of the customer file should be maintained so that it can be easily consulted. The service provider may provide the customer with a copy of his or her customer profile information sheet in compliance with the recommendations of the FSA Conduct of Business Rules handbook. nareshsukhani@gmail.com TYBFM - MFS

 Identifying suitable products The service provider must make reasonable efforts to ensure that the advice or the transaction are suitable in relation to the information provided by the customer and the product offering of the service provider or group marketing the products. Specifically, for UCITS, the customer's investment objectives must be regularly reviewed and at least once a year a review is undertaken with the customer to determine if the investment should be pursued or reallocated.

Oversight of advertising Service providers are to take reasonable measures to ensure that information provided to a customer is clear, fair and not misleading. Service providers are also to record and maintain copies of documents or promotional materials as well as the identity of persons who approved the compliance of these documents. Accordingly, the handbook for investment service providers established by the FSA promotes the security of marketing actions by limiting conflicts of interest and improving transparency and the quality of advice. This undertaking was completed on the one hand by the opening up of the system for the distribution of financial products and on the other hand by actively sanctioning improper practices. Q1.) a) What is Marketing? Explain the importance of marketing for a business organization?

Ans) According to Philip Kotler, marketing is 'the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others'.

Importance of Marketing for a Business organization:Marketing is a very important aspect in business since it contributes greatly to the success of the organization. Production and distribution depend largely on marketing. Many people think that sales and marketing are basically the same. These two concepts are different in many aspects. Marketing covers advertising, promotions, public relations, and sales. It is the process of introducing and promoting the product or service into the market and encourages sales from the buying public. Sales refer to the act of buying or the actual transaction of customers purchasing the product or service. Since the goal of marketing is to make the product or service widely known and recognized to the market, marketers must be creative in their marketing activities. In this competitive nature of many businesses, getting the product noticed is not that easy. Strategically, the business must be centered on the customers more than the products. Although good and quality products are also essential, the buying public still has their personal preferences. If you target more of their needs, they will come back again and again and even bring along recruits. If you push more on the

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product and disregard their wants and the benefits they can get, you will lose your customers in no time. The sad thing is that getting them back is the hardest part.

Creates Awarness of the Product

Helps in Increasing Product Sales Helps in Increasing Goodwill of the company/business organisation
(i)Marketing Creates Awareness of the product to the public:It has already been mentioned in the previous paragraph that getting the product or service recognized by the market is the primary goal of marketing. No business possibly ever thought of just letting the people find out about the business themselves, unless you have already established a reputation in the industry. But if you are a start-out company, the only means to be made known is to advertise and promote. Your business may be spending on the advertising and promotional programs but the important thing is that product and company information is disseminated to the buying public. Various types of marketing approaches can be utilized by an organization. All forms of marketing promote product awareness to the market at large. Offline and online marketing make it possible for the people to be educated with the various products and services that they can take advantage of. A company must invest in marketing so as not to miss the opportunity of being discovered. If expense is to be considered, there are cost-effective marketing techniques a company can embark on such as pay-perclick ads and blogging. (ii)Marketing Helps Boost Product Sales:Apart from public awareness about a companys products and services, marketing helps boost sales and revenue growth. Whatever your business is selling, it will generate sales once the public learns about your product through TV advertisements, radio commercials, newspaper ads, online ads, and other forms of marketing. The more people hear and see more of your advertisements, the more they will be interested to buy. If your company aims to increase the sales percentage and double the production, the marketing department must be able to come up with effective and strategic marketing plans. (iii)Marketing Increases Goodwill of the Company/business organization:In order to conquer the general market, marketers aim to create a brand name recognition or product recall. This is a technique for the consumers to easily associate the brand name with the images, logo, or caption that they hear and see in the advertisements. nareshsukhani@gmail.com TYBFM - MFS

For example, McDonalds is known for its arch design which attracts people and identifies the image as McDonalds. For some companies, building a reputation to the public may take time but there are those who easily attract the people. With an established name in the industry, a business continues to grow and expand because more and more customers will purchase the products or take advantage of the services from a reputable company. Marketing plays a very essential role in the success of a company. It educates people on the latest market trends, helps boost a companys sales and profit, and develops company reputation. But marketers must be creative and wise enough to promote their products with the proper marketing tactics. Although marketing is important, if it is not conducted and researched well, the company might just be wasting on expenses and time on a failed marketing approach Q. Difference between Goods and services. Ans) Meaning of Goods -1. Commerce: An inherently useful and relatively scarce tangible item (article, commodity, material, merchandise, supply, wares) produced from agricultural, construction, manufacturing, or mining activities. According to the UN Convention On Contract For The International Sale Of Goods, the term 'good' does not include (1) items bought for personal use, (2) items bought at an auction or foreclosure sale, (3) aircraft or oceangoing vessels. 2. Economics: A commodity, or a physical, tangible item that satisfies some human want or need, or something that people find useful or desirable and make an effort to acquire it. Goods that are scarce (are in limited supply in relation to demand) are called economic goods, whereas those whose supply is unlimited and that require neither payment nor effort to acquire, (such as air) are called free goods.' Meaning of Service- Service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. A service is an economic activity that creates value and provides benefits for customers at specific times and place. Service is the action of doing something for someone or something. Goods Services Goods are tangible. Good is a thing Services are intangible Service is an activity or process

Once goods are produced their quality remains The quality of service varies at every step of service uniform delivery Goods are manufactured in a factory Services are interactions produced through buyer seller

Goods are produced ,sold and later on consumed

Services are sold produced and consumed

Goods are homogenous

Services are heterogeneous, they customization and service delivery

vary

with

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Goods can be stored and inventoried

Services cannot be inventoried, and therefore fluctuations in demand are often difficult to manage.

Goods generally pass through the physical Services are sold and consumed directly by the distribution chain of wholesaler-stockist-retailer- consumer without intermediaries. customer-consumer

OR Q. Explain the characteristics of financial services. Ans) Financial services refer to services provided by the finance industry. The finance industry encompasses a board range of organization that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, customer finance companies, stock brokerages, investment funds and some government sponsored enterprises. Characteristics of financial services:Intangibility Nature of Demand Customer Orientation

Owership

Characteristi cs Of Financial Services

Inseparability

Quality Measurement Dynamism

Perishability

i.

INTANGIBILITY: The basic characteristics of financial services are that they are intangible in nature. For financial services to be successfully created and marketed, the institutions providing them must have a good image and the confidence of its clients. Quality and innovativeness of services are the focal points for building credibility and gaining the trust of the clients.

ii.

CUSTOMER ORIENTATION: The institutions providing financial services study the needs of the customers in detail. Based On the results of the study, they come out with innovative financial

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strategies that give due regard to costs, liquidity, and maturity considerations for various financial products. This way, financial services are customer - oriented. iii. INSEPARABILITY: The functions of producing and supplying financial services have to be carried out simultaneously. These cases for a perfect understanding between the financial services firms and their clients. iv. PERISHABILITY: Financial services have to be created and delivered to the target clients. They cannot be stored. They have to be supplied according to the requirements of customers. Hence, it is imperative that the providers of financial services ensure a match between demand and supply. v. DYNAMISM: The financial services must be dynamic. They have to be constantly redefined and refined. On the basis of socio-economic changes occurring in the economy, such as disposable income, standard of living, level of education, etc. Financial services institutions must be proactive vi. in nature and evolve new services by visualizing the expectations of the market. QUALITY MEASUREMENT: services are disseminated by the contact personnel of the service provider and any human error on their part due to miscommunication, lack of information or efficiency and behavioural attitudes makes it very difficult to standardize and rate the quality of services. OWNERSHIP: Ownership in services is not transferred to the customer. It means that you do not own or take away the service, you merely experience it. For example, you may stay at resort for holiday but you do not own its physical facilities like rooms, etc. NATURE OF DEMAND: Demand for services can be seasonal and peak or diminish at certain times. For e.g. demand for holiday packages is highest during summer vacations.

vii.

viii.

Q. WRITE A NOTE ON FINANCIAL PRODUCTS IN SERVICE SPECTRUM?

Corparate Banking Fee-Based Services Retail Banking

Mutual funds

Financial Products in the Services Spectrum

Credit Cards

Small Savings & Retiement Plannings

Non-Life Insurance Life Insurance

CORPORATE BANKING: The marketing of bank products to corporate customers is corporate banking. On the basis of sales volume and/or capital employed, banks may classify corporate customers into three segmentsTYBFM - MFS

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large corporations, mid-size companies, and small and medium business enterprises(SMEs).As part of their marketing efforts, banks develop long-term relationships with their corporate customers. Corporate banking products are distributed mainly through bank branches and a direct sales force, supplemented by phone and Internet banking. RETAIL BANKING: Liberalization, economic growth, changing demographics, and technological advancements have fuelled the growth of retail banking in INDIA. The product range in retail banking includes four broad categories: liability products, asset products, credit cards/debit cards, and investment products. Liability products include savings account, no frills accounts, etc. Asset products include all kinds of retail loans. CREDIT CARDS: Credits cards, charge cards, and debit cards facilitate cashless transactions. The credit card business is a low margin, high volume business. Branding is of immense significance in the credit card industry. Different types of branding strategies are used of which co-branding is the most commonly used approach. Co-branding involves the alliance of two brands for mutual benefit. Effective branding requires an understanding of brand metrics and the focus areas for effectiveness. NON-LIFE INSURANCE : The common non-life insurance products targeted at individual customers are motor vehicle insurance, personal accident insurance, health insurance, and householders insurance. Other retail products include baggage insurance, travel insurance, transit insurance, and pet insurance. The common non-life insurance products targeted at corporate customers are group health insurance, cargo insurance and hull insurance, industrial insurance, and fire insurance. LIFE INSURANCE: Life insurance products cater to the needs of the individual and groups of individuals. Generally, insurance products are categorized broadly under term life, whole life, endowment, money back, annuities and pensions, and unit linked schemes. New product development can play an important role and serve as a key differentiating factor for the insurance marketer. Corporate branding is more common in life insurance than product branding. Brand communication is cautiously done by the insurer to project the right kind of image in the minds of the customers. There are several different methods for pricing life insurance, based on the insurance marketers corporate objectives. SMALL SAVINGS and RETIREMENT PLANNING: The objective of savings is to cater to future needs. The small savings schemes introduced by the Government of India help people develop the habit of savings to finance their future needs. There are different types of small savings schemes and they differ from one another on parameters like investment limits, maturity period, liquidity and returns, interest rates offered to the depositors and tax concessions, if any. MUTUAL FUND: Mutual funds in India cater to the needs of different types of investors. SEBI, which also controls the stock market operations, is the regulatory body of the Indian mutual fund industry. Based on the investment objectives, they are divided into growth funds, income funds, balanced funds, and money mutual funds are classified into tax savings schemes, index funds and theme based funds. Mutual funds are priced based on their net asset value, which the fund houses declare on a daily basis. Investors can sell their units back to the fund at the prevailing NAV. FEE-BASED SERVICES: TYBFM - MFS

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Fee-based services can be broadly classified into corporate and retail fee-based services. Organizations avail of such services for meeting both their short term financial requirements. The common fee-based services offered to corporate clients are: cash management services, letter of credit, lease and hire purchase, etc. retail fee-based services are availed of at large by the retail customers for payments, money transfers, personal wealth management. Online trading, etc. Q2) a) Explain the process of New Product Development. Ans) The Stages 1. Idea Generation is often called the "fuzzy front end" of the NPD process

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, and Opportunities & Threats). Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.

Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your

ideas in the Idea Screening Phase (shown in the next development step). 2. Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them. The screeners should ask several questions:

Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment / target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the

target price? 3. Concept Development and Testing

Develop the marketing and engineering details

Investigate intellectual property issues and search patent databases Who is the target market and who is the decision maker in the purchasing process? What product features must the product incorporate? What benefits will the product provide? How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering and rapid prototyping What will it cost to produce it?

Testing the Concept by asking a number of prospective customers what they think of the idea -

usually via Choice Modelling. 4. Business Analysis

Estimate likely selling price based upon competition and customer feedback TYBFM - MFS

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Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation

Estimate profitability and break-even point 5. Beta Testing and Market Testing Produce a physical prototype or mock-up Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer

acceptance 6. Technical Implementation

New program initiation Finalize Quality management system Resource estimation Requirement publication Publish technical communications such as data sheets Engineering operations planning Department scheduling Supplier collaboration Logistics plan Resource plan publication Program review and monitoring

Contingencies - what-if planning 7. Commercialization (often considered post-NPD) Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product

Critical path analysis is most useful at this stage 8. New Product Pricing

Impact of new product on the entire product portfolio Value Analysis (internal & external) Competition and alternative competitive technologies Differing value segments (price, value and need) Product Costs (fixed & variable) Forecast of unit volumes, revenue, and profit.

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b) Write a note on buying role? Ans) In the early 1970's, the industrial marketing professors Frederick E. Webster and Yoram Wind, developed the 'buying centre' concept in order to structure large scale sales in complex corporate environments. In the early 1980's, Thomas Bonoma expanded their original list of five roles with the role of initiator. The concept then classified six buying roles for members of the organisation in the purchasing process. In a firm, a purchase depends on the person making the purchase decision as well as on the many employees concerned with improving the effectiveness and development of the operations who want to exert influence. A buying centre makes joint purchase decisions as an informal group. Its task consists of information acquisition, search processes, the development of choice criteria and decision making among alternatives. The buying centre has three principal aspects: 1. composition: the size, hierarchical levels and functional areas involved; 2. influence: those individuals with the most influence in the buying process; 3. roles: the identification of different roles played by buying centre members. A buying centre includes all members of the purchasing organisation who play any of six roles in the purchase process: INITIATOR first identifies the need to buy a particular product or service to solve an organisational problem; INFLUENCER (their) views influence the buying centre's buyers and deciders; DECIDER ultimately approves all or any part of the entire buying decision -- whether to buy, what to buy, how to buy, and where to buy; BUYER holds the formal authority to select the supplier and to arrange terms of condition; USER consumes or uses the product or service; GATEKEEPER controls information or access or both, to decision makers and influencers. The model structured industrial buying processes that are characterized by multi- person involvement levels, extensive internal and external coordination effort, and long lead times. An individual can facilitate nareshsukhani@gmail.com TYBFM - MFS

1. 2. 3. 4. 5. 6.

or assume more than one role in the purchase process and several individuals may hold the same role. The importance of the different roles varies by buy phase and organisation size. Isolating the important player involves: 1. Isolate the personal stakeholders Those individuals who have an important personal stake in the purchase decision- making exert more influence than other members of the buying centre. 2. Follow the information flow Influential members are central to the information flow that surrounds the purchase decision. Other members direct information to them. 3. Identify the experts Expertise is an important determinant of influence in the buying centre. Those individuals who possess the most knowledge and ask the most questions of the sales person are often influential. 4. Trace the connections to the top Powerful individuals often have direct access to top management that provides a direct link to valuable information and resources and enhances the status and influence of those individuals within the buying centre. 5. Understand the role of the purchasing department The purchasing department is dominant in repetitive buying situations through its technical expertise, knowledge of the dynamics of the supplier's industry and close working relationships with individual suppliers.

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Q2.a) The concept of Relationship Marketing holds the view that - customers, dealers and suppliers will favour those companies that are concerned with Building and maintaining long term relationships. Discuss. Ans) Relationship Marketing is an approach which emphasizes the continuing relationships that should exist between the organization and its customer. Customer value is the difference between the values that the customer gains from owning and using a product and the costs of obtaining the product. Customers do usually judge product values and costs accurately or objectively--they act on perceived value. Customer satisfaction depends on a products perceived performance in delivering value relative to a buyers expectations. If performance exceeds expectations, the buyer is delighted (certainly a worthy goal of the marketing company). 1). Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promise. 2). the aim of successful companies today is total customer satisfaction. 3). Customer delight creates an emotional affinity for a product or service, not just a rational preference, and this creates high customer loyalty. 4). Quality has a direct impact on product or service performance. Quality is defined in terms of customer satisfaction. The term total quality management (TQM) is an approach in which all the companys people are involved in constantly improving the quality of products, services, and business processes. Marketers have two major responsibilities in a quality-centered company: 1). they must participate in forming strategies that will help the company win through total quality excellence--they must be the customers watchdog. 2). Marketers must deliver marketing quality as well as production quality. Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining a desired object from someone by offering some-thing in return. 1). Exchange is only one of many ways to obtain a desired object. 2). Exchange allows a society to produce much more than it would with any alternative system. Whereas exchange is a core concept of marketing, a transaction (a trade of values between two parties) is marketings unit of measurement. A transaction usually involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement. Most involve money, a response, and action. Transactions in marketing are part of a larger idea of relationship marketing. Beyond creating short-term transactions, marketers need to build long-term relationships with valued customers, distributors, dealers, and suppliers. Ultimately, a company wants to build a unique company asset called a marketing network (the company and all its supporting stakeholders). The goal of relationship marketing is to deliver long-term value to the customer and thereby secure customer satisfaction and retention of patronage. To build this relationship beyond offering consistently high value and satisfaction), the marketer can: 1). Add financial benefits. 2). Add social benefits. 3). Add structural ties. 4). Seek profitable customers. Building Profitable Customer Relationships Managing demand means managing customers. 1). Demand comes from new customers and repeat customers.

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2). Today, besides making efforts to attract new customers, marketers are going all out to retain and build relationships with existing customers. It costs five times as much to attract a new customer as it does to keep a current customer satisfied. Because of changing demographics, a slow-growth economy, more sophisticated competitors, and overcapacity in many industries, many markets and market shares are shrinking. The key to successful customer retention is superior customer value and satisfaction. Q2.b) Concept Of Product Life Cycle Introduction Phase The launching of a new product initiates the first stage of the product life cycle. Businesses should obtain patents or trademarks at this stage of the product's life to prevent other companies from hedging into their product market. Proper marketing to establish brand awareness and to quickly ramp up customer interest is essential in this first product stage. Most companies tend to limit the distribution of a new product in order to gauge customer reactions and popularity and minimize risks from a poor performing product. Growth Phase After a product has been introduced into the market and has a strong base established the product enters the growth phase. The product's features, marketing messaging and support services are enhanced based on the reaction of customers during the introduction phase of the product. These product refinements help increase product demand through targeting a wider customer base. Products have little competition at this phase. Maturity Phase Growth becomes more stable and starts to slowly decline during the maturity phase due to the entrance of competitors. Companies must differentiate their products through enhanced features or benefits to defend their market share. Discounts, reduced pricing and promotions are common to encourage customers to choose the company's product over new arrivals. Companies may try to expand distribution channels and develop new customer segments during the maturity phase. Decline Phase Market saturation occurs and product sales begin to decline. Companies extend the life of the product through adding new features, reducing the cost or by selling the product to another company. At some point during the decline product phase, the profits from a product do not justify the resources the company expends and the company will discontinue the product in favour of newer, more profitable products. Contributing Factors The length of each phase of a product's life cycle can vary based on the product category, the number of competitors and the marketing efforts of the company. Companies that make frequent product modifications that appeal to consumers, keep the product highly visible through advertising and provide strong product support can extend the product life and maximize profits from each stage of a product's life.

B) Write a short note on Institutional and government market nareshsukhani@gmail.com TYBFM - MFS

Ans) Institutional MarketAn institutional market is a consumer market composed of large buyers who tend to purchase in volume quantities. Several different types of organizations may be involved in a given institutional market, including educational institutions, businesses, and non-profit organizations. In most instances, the purchases are made in order to allow the organization to in turn provide services and goods to the individuals they serve. One example of an institutional market buyer is the house of worship. Local congregations of different faiths often purchase materials for printing orders of worship, newsletters and other printed items as part of their ongoing ministry to members and visitors. It is not unusual for a house of worship to also order furnishings such as pews or other forms of seating in volume amounts. Larger houses of worship will often purchase food, paper plates, plastic utensils, and other items that can be used during social events held at the facility. Hotels are other participants in the institutional market. Whether a stand-alone business or part of a larger chain, the hotel will often order textiles in bulk. Items such as bed sheets, spreads, towels, and similar products are often ordered in larger quantities in order to gain a discount off the retail price. Hotels that also operate restaurants will also often order institutionally prepared foods that can be used to provide tasty meals available in the restaurant or by way of room service. Government market The government market This market consists of federal, state, and local governmental units that purchase or rent goods to fulfil their functions and responsibilities to the public. Government agencies purchase a wide range of products and services, including helicopters, paintings, office furniture, clothing, alcohol, and fuel. Most of the agencies manage a significant portion of their own purchasing. The civilian establishment One prominent sector of the government market is the federal civilian buying establishment. In the United States this establishment consists of six categories: departments (e.g., the Department of Commerce), administration (e.g., the General Services Administration), agencies (e.g., the Federal Aviation Administration), boards (e.g., the Railroad Retirement Board), commissions (e.g., the Federal Communications Commission), and the executive office (e.g., the Office of Management and Budget). In addition there are several miscellaneous civilian buying establishments, such as, for example, the Tennessee Valley Authority. The military establishment Another governmental purchasing sector is the federal military buying establishment, represented in the United States by the Department of Defence, which purchases primarily through the Defence Supply Agency and the army, navy, and air force. The Defence Supply Agency operates six supply centres, which specialize in construction, electronics, fuel, personnel support, and industrial and general supplies. Purchasing procedures Government purchasing procedures fall into two categories: the open bid and the negotiated contract. Under open-bid buying, the government disseminates very specific information about the products and services required and requests bids from suppliers. Contracts generally are awarded to the lowest bidder. In negotiated-contract buying, a government agency negotiates directly with one or more companies regarding a specific project or supply need. In most cases, contracts are negotiated for complex projects that involve major research-and-development costs and in matters where there is little effective competition.

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OR Q. Explain identification and analysis of competitors using Porters Five Force Model. The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into. With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations.

Understanding the Tool: Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are: 1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength nareshsukhani@gmail.com TYBFM - MFS

and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. 2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. 3. Competitive Rivalry: What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. 4. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power. 5. Threat of New Entry: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favourable position and take fair advantage of it.

Q4) SHORT NOTES: a) Institutional Investors An institutional market is a consumer market composed of large buyers who tend to purchase in volume quantities. Several different types of organizations may be involved in a given institutional market, including educational institutions, businesses, and non-profit organizations. In most instances, the purchases are made in order to allow the organization to in turn provide services and goods to the individuals they serve. One example of an institutional market buyer is the house of worship. Local congregations of different faiths often purchase materials for printing orders of worship, newsletters and other printed items as part of their ongoing ministry to members and visitors. It is not unusual for a house of worship to also order furnishings such as pews or other forms of seating in volume amounts. Larger houses of worship will often purchase food, paper plates, plastic utensils, and other items that can be used during social events held at the facility. Hotels are other participants in the institutional market. Whether a stand-alone business or part of a larger chain, the hotel will often order textiles in bulk. Items such as bed sheets, spreads, towels, and similar products are often ordered in larger quantities in order to gain a discount off the retail price. Hotels that also operate restaurants will also often order institutionally prepared foods that can be used to provide tasty meals available in the restaurant or by way of room service. Another type of buyer that is common to the institutional market is the hospital. Healthcare facilities of this type purchase not only bedding and food in bulk, but may also purchase equipment for use nareshsukhani@gmail.com TYBFM - MFS

in various parts of the facility. Beds and hardware for use in patient rooms are a couple of examples. X-ray equipment, tools for surgery, and disposable masks, gloves, and other items that are crucial to providing quality healthcare are also sold via this type of marketplace. Colleges and universities also are consumers in an institutional market. Purchases such as textbooks, computers, seating for classrooms, and various teaching aids are just a few of the items that buyers of this type will purchase on an ongoing basis. As with other larger buyers, universities often purchase in bulk as a way of obtaining a discount and thus stretching the institutional budget a little further. In many cases, the priority of a buyer in an institutional market is not to earn a profit. Instead, the focus is on obtaining the highest quality of goods and services possible, while keeping costs in line with the current operating budget. This allows the buyer to offer quality services and support to clients, which in turn allows them to continue operating over the long term. This is all about institutional investors. b) Characteristics of Services Services are said to have four key characteristics which impact on marketing programmes. These are: Intangibility Inseparability Heterogeneity variability Perish ability (simultaneous production/consumption) It is helpful to consider each of these characteristics briefly: Intangibility Services are said to be intangible - they cannot be seen or tasted, for example. This can cause lack of confidence on the part of the consumer As was apparent earlier, in considering pricing and services marketing, it is often difficult for the consumer to measure service value and quality. To overcome this, consumers tend to look for evidence of quality and other attributes, for example in the decor and surroundings of the beauty salon, or from the qualifications and professional standing of the consultant.

Inseparability Services are produced and consumed at the same time, unlike goods which may be manufactured, then stored for later distribution. This means that the service provider becomes an integral part of the service itself. The waitress in the restaurant, or the cashier in the bank, is an inseparable part of the service offering. The client also participates to some extent in the service, and can affect the outcome of the service. People can be part of the service itself, and this can be an advantage for services marketers. Heterogeneity Invariability Because a service is produced and consumed simultaneously, and because individual people make up part of the service offering, it can be argued that a service is always unique; it only exists once, and is never nareshsukhani@gmail.com TYBFM - MFS

exactly repeated. This can give rise to concern about service quality and uniformity issues. Personnel training and careful monitoring of customer satisfaction and feedback can help to maintain high standards. Perishability Services are perishable; they cannot be stored. Therefore an empty seat on a plane, for example, is a lost opportunity forever. Restaurants are now charging for reservations which are not kept, charges may be made for missed appointments at the dental clinic. Perishability does not pose too much of a problem when demand for a service is steady, but in times of unusually high or low demand service organizations can have severe difficulties. These are some important characteristics of services. c) Importance of CRM 1. A CRM system consists of a historical view and analysis of all the acquired or to be acquired customers. This helps in reduced searching and correlating customers and to foresee customer needs effectively and increase business. 2. CRM contains each and every bit of details of a customer, hence it is very easy for track a customer accordingly and can be used to determine which customer can be profitable and which not. 3. In CRM system, customers are grouped according to different aspects according to the type of business they do or according to physical location and are allocated to different customer managers often called as account managers. This helps in focusing and concentrating on each and every customer separately. 4. A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. The process first starts with identifying a customer and maintaining all the corresponding details into the CRM system which is also called an Opportunity of Business. The Sales and Field representatives then try getting business out of these customers by sophistically following up with them and converting them into a winning deal. All this is very easily and efficiently done by an integrated CRM system. 5. The strongest aspect of Customer Relationship Management is that it is very cost-effective. The advantage of decently implemented CRM system is that there is very less need of paper and manual work which requires lesser staff to manage and lesser resources to deal with. The technologies used in implementing a CRM system are also very cheap and smooth as compared to the traditional way of business. 6. All the details in CRM system is kept centralized which is available anytime on fingertips. This reduces the process time and increases productivity. 7. Efficiently dealing with all the customers and providing them what they actually need increases the customer satisfaction. This increases the chance of getting more business which ultimately enhances turnover and profit. 8. If the customer is satisfied they will always be loyal to you and will remain in business forever resulting in increasing customer base and ultimately enhancing net growth of business. d) Marketing of financial products in china: Chinas financial system is highly regulated and relatively underdeveloped, but has recently begun to expand rapidly as monetary policies become integral part of its overall economic policy. As a result banks are becoming more important to Chinas economy by providing increasingly more finance to enterprises for investment. A financial service in China refers to the services provided by the finance industry: banks, investment banks, insurance companies etc. Financial reform in chinas banking sector includes the introduction of leasing and insurance and operational boundaries are being slowly eroded to promote competition.

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Q2] b] Describe the stages in product development. The new product development process has the potential to be haphazard because of the inherent uncertainty in the process, as well as the myriad methods available for product development. Setting up an organizing framework to identify the stages in the process, and the methods applicable to each stage, should help in bringing order to the process. The new product development process as an iterative multistage process as shown in Figure 1.

This is a straightforward way of looking at the process that starts with idea generation, moves to development of individual features and then to full product development and finally into product testing. Of course, this is one example of how the process can be viewed and not a rigid framework. There has to be considerable fluidity in the system to accommodate feedback, skipping of stages, and use of new methods and perhaps introduction of new stages. Idea Generation Many methods are available for the idea generation stage such as brainstorming, Delphi and focus groups. The basic approach is to harness creativity in some form for the development of new ideas. While there is much to recommend for the more qualitative approaches, one of the drawbacks is the lack of quantitative validity to the ideas at this stage. That is, the ideas have not been shown to have popularity in the constituency that matter the customers. We have found that the Smart Incentives approach can provide both creativity and validation in the same step. Respondents to a survey compete with each other to produce ideas thus introducing creativity into the process. The generated ideas are then evaluated by a peer group to provide the required market validation. This approach can be useful for generating ideas on both whole products and individual features. Concept Testing & business Analysis Feature Development Feature development is the process of identifying features that would be of interest to customers. Traditional methods such as Importance Scales can be used, but may not provide sufficient discrimination between features. Pair wise comparisons of features are a straightforward method for identifying feature importance. The task is simple, but can be tedious if a large list of features needs to be culled. More recently developed methods such as Max-Diff scaling can provide a better alternative. Max-Diff is similar to pair wise comparison, except that more than two features are evaluated at a time (3-5) and the most and least preferred alternative is chosen from each set. Some advanced statistical analysis on the back end provides a score for each feature that is generally more discriminatory than a regular importance scale. Another alternative is the Kano method where the positive and negative aspect of each feature is rated in order to distinguish the must havefeatures from the nice to have features. The final method in this stage (that straddles this and the next stage) is the Self-explicated Method (SEM). Respondents rate the desirability of each level of each attribute as well as the importance of each attribute. Combining these two pieces of information gives attractiveness scores (similar to conjoint utilities) for each attribute level. nareshsukhani@gmail.com TYBFM - MFS

Although all attributes and levels are rated by respondents (as in conjoint analysis), since they are presented individually, this method may be more appropriately seen as useful for feature development. Product Development In this stage, combinations of features are used to build or evaluate the product. The Configuration allows survey respondents to build their ideal product by selecting from a list of available features. Usually prices are provided at the feature level to ensure that respondents make realistic decisions. As respondents build their own ideal products, the most popular features and feature combinations rise to the surface, resulting in the automatic development of preference based market segments. The Optimizer is different in that respondents make choices from among fully formed products. Information from their choices is taken into account in creating successive products that are more preferred till the process finally converges on the respondents ideal product. This method is more appropriate when the design and packaging (i.e. the visual element) is more important. As with the Configuration, the market segments itself into preference based segments. The various flavours of conjoint (such as traditional, discrete choice, adaptive) can also be used in this stage to identify feature importance. But care has to be taken to ensure that the basic assumptions are met and that the right type of conjoint is used. Product Testing Conjoint analysis can be fruitfully used in this stage also to estimate the interest in various product combinations and especially in running market simulations. The latter ability is very important in cases where a strong competitive market exists and reasonable estimates of take rates and ability to choose the ideal combination for the market are requisites. Concept testing is much more limited than conjoint and is usually used when the product is almost set except for perhaps one or two questions, often relating to price. In short, the chaos of the product development process can be structured, and appropriate methods applied, to gain maximum benefit at different stages.

Q2] a] the concept of Relationship Marketing holds the view that - customers, dealers and suppliers will favor those companies that are concerned with Building and maintaining long term relationships. Discuss. Relationship marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions. As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with a customer that goes beyond simple demographic and customer service data. Relationship marketing extends to include inbound marketing efforts, (a combination of search optimization and strategic content), PR, social media and application development. Relationship marketing is a broadly recognized, widely-implemented strategy for managing and nurturing a companys interactions with clients and sales prospects. It also involves using technology to organize, synchronize business processes, (principally sales and marketing activities), and most importantly, automate those marketing and communication activities on concrete marketing sequences that could run in autopilot, (also known as marketing sequences). The overall goals are to find, attract and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Once simply a label for a category of software tools, today, it generally denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work in synergy to increase profitability, and reduce operational costs. nareshsukhani@gmail.com TYBFM - MFS

Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement. This customer relationship management (CRM) approach focuses more on customer retention than customer acquisition. Relationship marketing is designed to develop strong connections with customers by providing them with information directly suited to their needs and interests and by promoting open communication. This approach often results in increased word-of-mouth activity, repeat business and a willingness on the customers part to provide information to the organization. Relationship marketing contrasts with transactional marketing, an approach that focuses on increasing the number of individual sales. Most organizations combine elements of both relationship and transaction marketing strategies. Relationship Marketing Concept In our haste to gain media visibility, we sometimes overlook Extension's most important marketing resource - our relationships with people! This is ironic since the backbone of Extension's success is based on commitments of volunteers, legislators, lay leaders, and our staff members. Educational organizations, who wish to survive the competitive "shake-out" period of the 1990s, will need more than media attention. Emerging marketing research indicates that heightened public awareness of organizations is only a first step in the marketing process. Building constructive relationships with selected target audiences is more important to Extension's long-term marketing success than acquiring widespread public awareness. Relationship marketing is the process of attracting, maintaining, and enhancing relationships with key people.2 this marketing process applies to Extension since funding is garnered from a few sources and continuous educational programs are delivered to specific audiences. Successful Relationship Marketing Techniques The greatest challenge confronting Cooperative Extension during the next 20 years will be persuading county, state, and federal legislators to financially support Extension. Quality educational programs that meet critical community needs are a prerequisite for funding. However, quality, needfulfilling programs aren't enough. Targeted relationship marketing initiatives that raise Extension's credibility with decision makers are no longer a luxury, but a necessity for public funding. As Boldt notes, Extension staff must become effective at relationship marketing to understand emerging governmental priorities and influence future financial support. Typically, decision makers have only a small window of exposure to view Extension programs. Extension must focus its message on the critical difference it makes on the lives of voters. Keys to successful communication with decision makers include: Coordinate communications: Communications with elected officials must be coordinated by one person in each county and state office. This coordination eliminates duplication of efforts and maximizes the impact of Extension's educational message. The elected officials should be contacted by both staff and well-trained clientele. Know your elected officials: Identify all local, state, and federal elected officials in your area. Collect basic information on their background and interests. This data collection can be done by adult or 4-H youth volunteers. Elected officials should be visited personally by a team of staff and volunteers on a year-round basis. Assign one volunteer and, if possible, one staff member to visit key elected officials. Review information sheets: Before the visit and, if possible, attend a meeting that the elected official is participating in. This homework will help identify and target critical issues that the official is interested in. Target the educational message to meet the official's interests. Get organized: Develop a file of success stories on significant Extension programs and issues that can be shared with elected officials. Tailor the distribution of success stories to personal/professional interests and needs of targeted legislators. nareshsukhani@gmail.com TYBFM - MFS

Develop a communication plan: Volunteers and staff should speak one-on-one with key elected officials. Information sheets can be filled out on the key officials by volunteers. Personal visits with legislators should be planned and opportunities for personalized education through other means identified. Conduct effective legislative visits: Face-to-face visits with legislators by clientele who live in their districts are most effective. When a group is involved, there should be one spokesperson. Make an appointment for a short, well-planned visit and present your views rationally. Facts, figures, balance sheets, and other evidence can be convincing. Develop a one-page information summary to leave with the legislator or staff member. Personal visits and written communications: must be planned as part of a continuous, year-long dialogue with legislators. Remember to include the elected official's secretarial and aide staff. These staff members are literally the eyes and ears of the elected officials. It's imperative to get to know them personally. Contact staff members regularly on a year-round basis, don't wait until budget season. Get to know them, and give them a chance to know you. As you plan your legislative visit, determine the most important issues to be discussed. Q2a) Explain the concept of product life cycle with the help of a diagram. Product life cycle is the stages through which a product or its category bypasses. From its introduction to the marketing, growth, maturity to its decline or reduce in demand in the market. Not all products reach this final stage, some continue to grow and some rise and fall.

Stages of product life cycle Introduction This is the stage of low growth rate of sales as the product is newly launched in the market. Monopoly can be created, depending upon the efficiency and need of the product to the customers. A firm usually incurs losses rather than profit. If the product is in the new product class, the users may not be aware of its true potential. In order to achieve that place in the market, extra information about the product should be transferred to consumers through various media. The stage has the following characteristics: 1. Low competition 2. Firm mostly incurs losses and not profit. Growth Growth comes with the acceptance of the innovation in the market and profit starts to flow. As the monopoly still exists, companies can experiment with the new ideas and innovation in order to maintain the sales growth. This stage is the best time to introduce new effective products in the market thus creating an image in the product class in the presence of its competitors who try to copy or improve the product and present it as a substitute. Maturity In this, the end stage of the growth rate, sales slowdown as the product has already achieved acceptance in the market. New firms start experimenting in order to compete by innovating new models of nareshsukhani@gmail.com TYBFM - MFS

the product. With many companies in the market, competition for customers becomes fierce, despite the increase in growth rate of sales at the initial part of this stage. Aggressive competition in the market results in profits decreasing at the end of the growth stage thus beginning the maturity stage. In addition to this, the maturity stage of the development process is the most vital. Decline This is the stage where most of the product class usually dies due to low growth rate in sales. A number of companies share the same market, making it difficult for all entrants to maintain sustainable sales levels. Not only is the efficiency of the company an important factor in the decline, but also the product category itself becomes a factor, as the market may perceive the product as "old" and may not be in demand. It is not always necessary that a product should go through these stages. It depends on the type of product, its competitors, scope of the product etc. OR Products tend to go through a life cycle. Initially, a product is introduced. Since the product is not well known and is usually expensive (e.g., as microwave ovens were in the late 1970s), sales are usually limited. Eventually, however, many products reach a growth phasesales increase dramatically. More firms enter with their models of the product. Frequently, unfortunately, the product will reach a maturity stage where little growth will be seen. For example, in the United States, almost every household has at least one colour TV set. Some products may also reach a decline stage, usually because the product category is being replaced by something better. For example, typewriters experienced declining sales as more consumers switched to computers or other word processing equipment. The product life cycle is tied to the phenomenon of diffusion of innovation. When a new product comes out, it is likely to first be adopted by consumers who are more innovative than othersthey are willing to pay a premium price for the new product and take a risk on unproven technology. It is important to be on the good side of innovators since many other later adopters will tend to rely for advice on the innovators who are thought to be more knowledgeable about new products for advice.

At later phases of the PLC, the firm may need to modify its market strategy. For example, facing a saturated market for baking soda in its traditional use, Arm Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorizing powders to be used before vacuuming were also created. It is sometimes useful to think of products as being either new or existing. Many firms today rely increasingly on new products for a large part of their sales. New products can be new in several ways. They can be new to the marketno one else ever made a product like this before. For example, Chrysler invented the minivan. Products can also be new to the firmanother firm invented the product, but the firm is now making its own version. For example, IBM did not invent the personal computer, but entered after other firms showed the market to have a high potential. Products can be new to the segmente.g., cellular phones and pagers were first aimed at physicians and other priceinsensitive segments. Later, firms decided to target the more price-sensitive mass market. A product can be new for legal purposes. Because consumers tend to be attracted to new and improved products, the Federal Trade Commission (FTC) only allows firms to put that label on reformulated products for six months after a significant change has been made. Q3] a] Describe the stages of Consumer Buying decision process. An individual who purchases products and services from the market for his/her own personal nareshsukhani@gmail.com TYBFM - MFS

consumption is called as consumer. A consumer goes through several stages before purchasing a product or service. NEED/PROBLEM RECOGNITION INFORMATION GATHERING/SEARCH EVALUATION OF ALTERNATIVES PURCHASE OF PRODUCT/SERVICE POST PURCHASE EVALUATION Step 1 - Need is the most important factor which leads to buying of products and services. Need infect is the catalyst which triggers the buying decision of individuals. An individual who buys cold drink or a bottle of mineral water identifies his/her need as thirst. However in such cases steps such as information search and evaluation of alternatives are generally missing. These two steps are important when an individual purchases expensive products/services such as laptop, cars, and mobile phones and so on. Step 2 - When an individual recognizes his need for a particular product/service he tries to gather as much information as he can. An individual can acquire information through any of the following sources: Personal Sources - He might discuss his need with his friends, family members, co workers and other acquaintances. Commercial sources - Advertisements, sales people (in Tims case it was the store manager), Packaging of a particular product in many cases prompt individuals to buy the same, Displays (Props, Mannequins etc) Public sources - Newspaper, Radio, Magazine Experiential sources - Individuals own experience, prior handling of a particular Product (Tim would definitely purchase a Dell laptop again if he had already used one) Step 3 - The next step is to evaluate the various alternatives available in the market. An individual after gathering relevant information tries to choose the best option available as per his need, taste and pocket. Step 4 - After going through all the above stages, customer finally purchases the product. Step 5 - The purchase of the product is followed by post purchase evaluation. Post purchase evaluation refers to a customers analysis whether the product was useful to him or not, whether the product fulfilled his need or not? Q3] b] Note on Government and Institutional markets. Our discussion has concentrated largely on the buying behavior of profit-seeking companies. Much of what we have said also applies to the buying practices of institutional and government organizations. However, we want to highlight certain special features of these markets. The institutional market consists of schools, hospitals, nursing homes, prisons, and other institutions that must provide goods and services to people in their care. Many of these organizations are characterized by low budgets and captive clienteles. For example hospitals have to decide what quantity of food to buy for patients. The buying objective here is not profit, because the food is provided as part of the total service package; nor is cost minimization the sole objective, because poor food will cause patients to complain and hurt the hospitals reputation. The hospital purchasing agent has to search for Institutional food vendors whose quality meets or exceeds a certain minimum standard and whose prices are low. In fact, many food vendors set up a separate division to sell to institutional buyers because of these buyers special needs and characteristics. Heinz produces, packages, and prices its ketchup differently to meet the requirement of hospitals, colleges, and prisons. Aramark Corp, has a competitive advantage when it comes to providing food for the nationals prisons, a direct result of refining its purchasing practices and its supply chain management. Where Aramark once merely selected products from lists provided by potential suppliers, it now collaborates with suppliers to develop products that Aramark customize to meet the needs of individual segments. In the corrections segment, quality has historically been sacrificed to meet food costs operators nareshsukhani@gmail.com TYBFM - MFS

outside that market would find impossible to work with. When you go after business in the corrections field, you are making bids that are measured in hundredths of a cent says president of Aramark Food & Support Services. Any edge gained on the purchasing side is extremely valuable. Aramark took a series of protein products and sourced them with unique partners at price points it never could have imagined before. It was able to drive costs down by working with partners who understood the chemistry of proteins and knew how to do things to lower the price but which could still create a product very acceptable to Aramarks customers. Aramark replicated this process with 163 different items formulated exclusively for corrections. Rather than reduce food costs by increments of a penny or so a meal, which was the previous norm for this market. Aramark succeeded in taking 5 to 9 cents off a meal while maintaining or even improving quality. In most countries government organizations are a major buyer of goods and services. Government organizations typically require suppliers to submit bids, and normally they award the contract to the lowest bidder. In some case, the government unit will make allowance for the suppliers superior qua lity or reputation for completing contracts on time. Government will also buy on negotiated contract basis, primarily in the case of complex projects involving major R&D costs and risks and in cases where there is little competition. Government organizations tend to favour domestic supplier. A major complaint of multinationals operating in Europe was that each country showed favouritism towards its nationals in spite of superior offers available from foreign firms. The European Union is removing this basis. Because their spending decisions are subject to public review, government organizations require considerable paperwork from suppliers, who often complain about excessive paperwork, bureaucracy, regulations, decision making delays, and frequent shifts in procurement personnel. In India supplying to institutions is not that cumbersome as compared to supplying to government. For supplying to government the suppliers have to register first fulfilling several norms with organizations like Indian Railways, DGS&D, Ministry of Defence, ISRO, Department of Atomic Energy and several others. From registration to supply it may involve a few tens or hundreds of paper in addition to Red Tape. That is why only large suppliers venture to make a bid to supply to government as the medium and small enterprises cannot afford the costs of clerical work. Q. Explain identification and analysis of competitors using Porters Five Force Model. The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into. With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations. Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are: 1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. 2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. 3. Competitive Rivalry: What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. nareshsukhani@gmail.com TYBFM - MFS

4. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power. 5. Threat of New Entry: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.

Example - model analysis on Nokia Nokia was founded over 140 years ago in Finland, and since then has become a global organization that operates in over 120 countries worldwide. Nokia has also become a market leader in the mobile telecommunications industry and is most known for their mobile phones and Smartphones. Although recent competition has affected the market share that Nokia has in the telecommunication industry they still hold a strong 29% (2011) of the market share in a forever changing industry The micro environment is the internal factors that are affected by the customers, staff, shareholders and competitors. The best model for evaluating the micro environment of Nokia is Porters 5 forces as this takes into consideration the competitors, customers, suppliers and new entrants. Nokia are in the position where they can bargain and negotiate with any mobile phone hardware maker because there is a high number of equipment suppliers that are readily available to them should their current suppliers attempt to bargain for more money with them. Nokias main argument would be the fact that they are a global organization that has the highest market share in the industry, so the suppliers would not want to lose such an illustrious organization. On the other hand, Nokia have recently created an alliance with Microsoft for their software which would be considered a major coup for Nokia more than Microsoft. As a result, Microsoft will have a lot of power when negotiating a price and share because the deal is more beneficial to Nokia than Microsoft.

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In conclusion, there is a moderate threat from the powers of suppliers because although the hardware suppliers have a very low power, Microsofts power over the software is very high because theyre very few other organizations who have the expertise and skills to rival Microsoft. Q3] b] what are the factors affecting Consumer Buying Behavior? Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are different processes involved in the consumer behavior. Initially the consumer tries to find what commodities he would like to consume and then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money, which he can spend. Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below. 1. Cultural Factors: Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class. Culture: Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries. Subculture: Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group. 2. Social Factors: Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status. Reference Groups: Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. Family: Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If wife influences the buying decision of a particular product then the marketers will try to target the women in their advertisement. Roles and Status: Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status. 3. Personal Factors: Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self-concept. Age: Age and life cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage. Occupation: The occupation of a person has significant impact on his buying behavior. Economic Situation: Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products. Lifestyle: Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world. Personality: Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. 4. Psychological Factors: There are four important psychological factors affecting the consumer buying behavior. These are: perception, motivation, learning, beliefs and attitudes. Motivation: The level of motivation also affects the buying behavior of customers. Every person has different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction. nareshsukhani@gmail.com TYBFM - MFS

Perception: Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception. There are three different perceptual processes, which are selective attention, selective distortion and selective retention. Beliefs and Attitudes: Customer possesses specific belief and attitude towards various products. Since such beliefs and attitudes make up brand image and affect consumer-buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard.

Q4] b] levels of product Consumers often think that a product is simply the physical item that he or she buys. In order to actively explore the nature of a product further, lets consider it as three different products the CORE product, the ACTUAL product, and finally the AUGMENTED product. This concept is known as the Three Levels of a Product. The CORE product is NOT the tangible physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you. So with the car example, the benefit is convenience i.e. the ease at which you can go where you like, when you want to. Another core benefit is speed since you can travel around relatively quickly. The ACTUAL product is the tangible, physical product. You can get some use out of it. Again with the car, it is the vehicle that you test drive, buy and then collect. You can touch it. The actual product is what the average person would think of under the generic banner of product. The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium. So when you buy a car, part of the augmented product would be the warranty, the customer service support offered by the car's manufacturer and any after-sales service. The augmented product is an important way to tailor the core or actual product to the needs of an individual customer. The features of augmented products can be converted in to benefits for individuals. Q4] c] Importance of CRM CRM Customer Relationship Management is one of the newest innovations in customer service today. CRM stands for customer relationship management and helps the management and customer service staffs cope with customer concerns and issues. CRM involves gathering a lot of data about the customer. The data is then used to facilitate customer service transactions by making the information needed to resolve the issue or concern readily available to those dealing with the customers. This results in more satisfied customers, a more profitable business and more resources available to the support staff. Furthermore, CRM Customer Relationship Management systems are a great help to the management in deciding on the future course of the company. As mentioned, there is much data needed for the CRM system to work. These fields include the customer name, address, date of transactions, pending and finished transactions, issues and complaints, status of order, shipping and fulfilment dates, account information, demographic data and many more. This information is important in providing the customer the answer that he or she needs to resolve the issue without having to wait for a long time and without going to several departments. With just a few mouse clicks, a customer support representative for example can track the location of the customer's package or order. This is infinitely better than the cumbersome process of tracking shipments previously. Furthermore, the customer service representative will also be able to see the previous concerns of the customer. This is a great help especially if the customer is calling about the same issue since he or she will not have to repeat the story all over again. This results in less time in resolving the issue, thus, higher productivity of the support staff. CRM Customer Relationship Management systems are also important to the top management because it provides crucial data like customer satisfaction and efficiency of service by the frontline crews. A piece of customer relationship management software will also be able to generate the needed reports for product development or new concepts. Furthermore, this system will also be a great help for the top nareshsukhani@gmail.com TYBFM - MFS

management in deciding the company's future course of action, whether it involves phasing out one of the products on the shelves or making adjustments to one of the products sold. The reports generated by CRM systems are also invaluable to your advertising and marketing planners, as they will be able to pinpoint which ideas works and which do not. Because of CRM systems, you will be able to release advertisements or plan marketing campaigns more in tune with your target market. This will also lead to more responses to your advertisement and a more effective marketing campaign. Successful integration of a CRM Customer Relationship Management system in your company, however, might not be as easy as it seems. The following might give you an insight why CRM systems fail in some companies... Most companies fail to prepare for CRM systems. By this, I mean that most companies fail to integrate all the departments that need to share the information for it to be effective. Furthermore, CRM units scattered all over the company's departments is often more effective than just making one big CRM department. This will ensure that each department will get the information and data that they need. A CRM system will also help you a lot in expanding your business. As CRM systems are capable of handling enormous amounts of data, CRM systems will help you a lot in coping with the increased numbers of customers and data. With a CRM Customer Relationship Management system installed and properly utilized, you can be sure that all data is maximized and used to ensure that your business will be successful and your customers a lot more satisfied than before Q4] d] Marketing of financial products in China China's financial system is highly reputed and relatively underdeveloped but has begun to expand recently. Investment funds in China started with closed ended forms and now are moving towards openended forms which are the generally accepted in the global market. Its mutual fund industry is currently one-tenth of the size of the US market, but it is expected to grow drastically as China opens its doors to international trading. Foreign insurance companies have been invited by the Chinese government to play an increasingly important though carefully restricted role in China's economic modernization. Financial products refer to the products offered by the banks, insurance companies, credit card companies, consumer finance, and government sponsored enterprises etc. Chinese banks will target few customers will have to become savvy or risk losing their local dominance in the event of foreign banks entering China.

Q4e] External Environment of Business

Economic Environment Technological Environment Political/Legal Environment Demographic Environment Socio-cultural Environment Ecosystem Environment Market micro Suppliers Marketing Intermediaries

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External Business Environment

Macro

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Micro environment is related to small area or periphery of organization. It influences an organization regularly and directly. It consists of the market, suppliers, marketing intermediaries, etc. Macro environment has broader dimensions. It consists of Economic, Technological, Political/Legal, Demographic, Socio-cultural and Ecosystem Environment Macro Environment Economic Environment: It consists of factors that affect consumer purchasing power and spending patterns. Economic factors include business cycles, inflation, unemployment, interest rates, and income. Technological Environment: Technology can act as both opportunity and threat to a business. It can act as opportunity as business can take advantage of adopting technological innovations to their strategic advantage. However, at the same time technology can act as threat if organizations are not able to adopt it to their advantage. Political/Legal Environment: There are three main elements in Political/Legal Environment: (a) Government: Business is highly guided and controlled by government policies. Hence the type of government running a country is a powerful influence on business. (b) Legal: Business organizations prefer to operate within a sound legal system. Legal environment consists of laws governing the business. (c) Political: political pressure influence and limit organizations. Demographic Environment: The term demographic denotes characteristics of population in an area, district, and country or in world. Some of the demographic factors have great impact on the business. Socio-cultural Environment: It consists of factors related to human relationships and impact of social attitudes and cultural values which has bearing on the business of the organizations. Ecosystem Environment: It refers to natural systems and its resources that are needed as inputs by marketers or that are affected by marketing activities. Micro Environment Market: the market is said to be studied in terms of its actual and potential size, its growth prospect and also attractiveness. The marketer should study the trends and development and the key success factors of the market. Suppliers: they form an important component of the micro environment. They provide raw materials. Equipment, services and so on. They constitute a major force, which shapes competition in the industry. Marketing Intermediaries: Intermediaries exert a considerable influence on the business organizations.

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Q1.a) Explain the concepts of marketing in brief? Marketing is the process by which companies create customer interest in product or services. The marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. Marketing can be defined as Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably. The various concepts of marketing are as follows:
THE PRODUCTION CONCEPT THE PRODUCT CONCEPT

THE SELLING CONCEPT

THE MARKETING CONCEPT

THE SOCIETAL MARKETING CONCEPT

THE RELATIONSHIP MARKETING CONCEPT

THE EXCHANGE CONCEPT

1-THE PRODUCTON CONCEPT The production concept holds that consumers will favour those products that are widely available and low in cost. Managers of production-oriented organizations concentrate on achieving high production efficiency and wide distribution .The assumption that consumer are primarily interested in product availability and low price holds in least two situations. 2-THE PRODUCT CONCEPT The product concept holds that consumers will favour those products that prefer the most quality, performance or innovate features. Managers in product oriented organizations focus their energy on making superior products and improving them over time. The product concept leads to the kind of marketing myopia we discussed earlier. 3-THE SELLNG/SALES CONCEPT nareshsukhani@gmail.com

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The selling concept holds that consumer if left alone, will ordinarily not buy enough of the organizations products. The organization must therefore undertake an aggressive selling and promotion effort. The concept assumes that consumer typically show buying inertia or resistance and must be coaxed into buying. It also assumes that the company has available a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is practiced most aggressively with unsought goods. 4-THE MARKETNG CONCEPT The marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets. The marketing concept has been expressed in many colourful ways: *meeting needs profitability *find wants and fill them *love the customer not the product 5-THE SOCIETAL MARKETING CONCEPT The societal marketing concept was an offshoot of the marketing concept wherein an organization believes in giving back to the society by producing better products targeted towards society welfare. Some have questioned whether the marketing concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services. Are companies that successfully satisfy consumer wants necessarily acting in the best, longrun interests of consumers and society? We propose calling it the societal marketing concept, which holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well-being. 6-THE RELATIONSHIP MARKETING CONCEPT Relationship marketing is changing the way marketers use traditional media channels to build brand image and awareness. Marketers are not just re-allocating ad budget between existing media products, they are taking advantage of whole new set of media choices. The aim is to build relationship instead of a one-time sale, which is termed as a transaction. 7-THE EXCHANGE CONCEPT The exchange concept of marketing, as the very name indicates, holds that the exchange of a product between the seller and the buyer is the central idea of marketing. While exchange does form a significant part of marketing, to view marketing as a mere exchange process would amount to a gross undermining of the essence of marketing. A proper scrutiny of the marketing process would readily reveal that marketing is much broader than exchange. Exchange covers the distribution aspect and the price mechanism involved in marketing. The other important aspects of marketing, such as concern for the customer, generation of value satisfactions, creative selling and integrated action for serving the customer, get completely overshadowed in the exchange concept of marketing.

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Q2. Distinguish between goods and services. Goods 1. Goods are tangible. 2. Good is a thing. 3. Once goods are produced, their quality remains uniform. 4. Goods are manufactured in a factory. 5. Goods are produced, sold and later on consumed. 6. Goods are homogenous. 7. Goods can be stored and inventoried. Services 1. Services are intangible. 2. Service is an activity or process. 3. The quality of service varies at every step of service delivery. 4. Services are produced through buyer-seller interactions. 5. Services are sold, produced and consumed. 6. Services are heterogeneous; they vary with customization and service delivery. 7. Services cannot ne inventoried, and therefore fluctuations in demand are often difficult to manage. E.g. there is tremendous demand for resort accommodations in may, but little demand in July. 8. Services are sold and consumed directly by the consumer without intermediaries. 9. There is no transfer of ownership involved in services.

8.Goods generally pass through the physical distribution chain of wholesaler-stockist-retailercustomer-consumer 9. The ownership rights of goods are transferable.

Q-1) a) what are the internal environment factors that affect the business? Marketing is a social process by which individuals & groups obtain what they need & want through creating & exchanging products & value with others. -Philip Kotler An organizations internal environment is composed of the elements within the organization, including the current employees, management, & especially corporate culture, which defines employee behaviour. The following are the internal factors which affect the business:

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Value system
Human resources

Vision, mission & objectives

Marketing resources

internal factors

Company policies

Managerial leadership styles Organizational cultures

Management structure

1) Value system- the value system of the founders &those at the helm of affairs has important bearing on the choice of business, the mission & the objectives of the organization, business policies & practices. 2) Vision, mission & objectives- the vision means the ability to think about future with imagination & wisdom. Vision is an important factor in achieving the objectives of the organization. The mission is the medium through which the short-term goals are achieved. 3) Company policies- these are guidelines that govern how certain organizational situations are addressed. Just as colleges maintain policies about admittance, grade appeals & waivers, companies establish policies to provide guidance to occur frequently within their organization. 4) Management structure- the structure of organization also influences the business decisions. The formal structure of the organization is the hierarchal arrangements of tasks & people. This structure determines how information flows within the organization, which departments are responsible for which activities, & where decision making power rests. 5) Organizational cultures- the organizational culture is an organizations personality. Just as each person has a distinct personality, so does each organization. The culture of an organization distinguishes it from others & shapes the action of its members. 6) Managerial leadership styles- the number of co-workers involved within a problem-solving or decision-making process reflects the managers leadership style. Empowerment means delegating to subordinates decision-making authority, freedom, knowledge, autonomy & skills. 7) Marketing resources- resources like the organization for marketing, quality of the marketing men, brand equity & distribution network have direct bearing on marketing efficiency of the company. 8) Human resources- the human resource is the important factor for any organization as it contributes to the strengths & weakness of any organization. The human resource in any organization must have characteristics like skills, quality, high morale, commitment, etc. nareshsukhani@gmail.com TYBFM - MFS

Hence, above were the internal factors affecting business.

Q-1 B) State the importance of marketing to the service organization. Marketing is a social process by which individuals & groups obtain what they need & want through creating & exchanging products & value with others. -Philip Kotler The following is the importance of marketing to service organization: 1) Given the intangibility of services, marketing then becomes a particularly challenging & yet extremely important task. 2) Relationships are a key factor when it comes to marketing of services. Since the product is intangible, a large part of the customers buying decision will depend on the degree to which he trusts the seller. Hence, the need to listen to the needs of the customer & fulfil them through the appropriate service offering & build a long lasting relationship which would lead to repeat sales & positive word of mouth. 3) Growth per capita income has given rise to a greater percentage of income being spent on luxuries such as restaurants, overseas holidays, etc. 4) Advances in technology that has led to more sophisticated products that require more services. 5) A trend towards outsourcing means that manufacturers are buying services that are outside from the firms core expertise. 6) Deregulation has increased level of competition in certain services like telecom. 7) Due to growth per capita income, people are buying more goods, which have contributed to making retailing an important service. 8) Given todays highly competitive scenario where multiple providers are vying for a limited pool of customers, retaining customers is even more important than attracting new ones. Since services are usually generated & consumed at the same time, they actually involve the customer in service delivery process by taking into consideration his requirements & feedback. Thus they offer great scope for customization according to customer requirements thus offering increased satisfaction leading to higher customer retention.

Hence, above was the importance of marketing to service organization.

Q.2 (A) CUSTOMER RETENTION IS THE NEED OF THE HOUR. DO YOU BELIEVE IN CRM? GIVE REASONS. CRM is a business strategy directed to understand, anticipate and respond to the needs of an enterprises current and potential customers in order to grow the relationship value. Relationship marketing is an approach which emphasizes the continuing relationships that should exist between the organization and its customers. It emphasizes the importance of customer service and quality and of developing a series of transactions with consumers. A key principle of relationship marketing is customer retention through varying means and practices in order to obtain repeated sales order from existing customers. This is done by satisfying requirements of customers more than competing companies through a mutually beneficial relationship. A customer retention strategy aims to keep a high proportion of valuable customers by reducing customer defections (churns), and a customer development strategy aims to increase the value of those retained customers to the companies. nareshsukhani@gmail.com TYBFM - MFS

The former are generally considered negative, and the latter positive, customer retention strategies.

Negative consumer retention strategies impose high switching costs on customers discouraging their defection

Positive consumer retention startegies creating customer delight adding customer-preceived value creating social structural bonds and building customer engagement

It is very difficult to build long-term relationship with customers if their needs and expectations are not understood and well met. It is a fundamental precept of modern customer management that companies should understand customers, and then acquire and deploy resources to ensure their satisfaction and retention. This is why CRM is grounded on detailed customer-related knowledge. SOME STRATEGIES OF CUSTOMER RETENTION ARE AS FOLLOWS:strategies

i) sales promotion

ii) bonding

iii) loyalty schemes

iv) customer clubs

v) customer engagement

in-pack or onpack voucher

social bonds

rebate or cash back

structural bonds

patronage awards free premim for continuous purchase collection schemes

self-liquidating premium

The following strategies are explained below:nareshsukhani@gmail.com TYBFM - MFS

i)

SALES PROMOTION: - retention-oriented sales promotions encourage the customer to repeat purchase. Here are some examples: In-pack or on-pack voucher: customers buy the product and receive a voucher entitling them to a discount off one or more additional purchases. Rebate or cash back: rebates are refunds that the customer receives after purchase. The value of the rebate can be adjusted in line with the quantity purchased, in order to reward customers who meet high volume targets. Patronage awards: customers collect proofs of purchase, such as store receipts or barcodes from packaging, which are surrendered for cash or gifts. Free premium for continuous purchase: the customer collects several proofs of purchase and mails them in, or surrenders them at retail outlets to obtain a free gift. Collection schemes: these are long-running schemes where the customer collects items with every purchase. Customers didnt know which card they had until they bought and opened the pack. These became collectable items. Self-liquidating premium: a self-liquidating promotion is one that recovers its own direct costs. Typically, consumers are invited to collect proofs of purchase, and mail them in with a personal cheque or money order. BONDING: - the next positive customer retention strategy is customer bonding. These different forms can be split into two major strategies: major and structural. Social bonds: social bonds are found in positive interpersonal relationships between people on both side of the customer-supplier relationship. Strong social bonds can emerge between companies having similar sizes, cultures and locations. Structural bonds: structural bonds are established when companies and customers resources to a relationship. Generally, these resources yield mutual benefits for the participants. LOYALTY SCHEMES: - loyalty schemes reward customers for their patronage. Loyalty schemes or programmes can be defined as follows: A loyalty programme is a scheme that offers delayed or immediate incremental rewards to customers for their cumulative patronage. The more a customer spends, the higher the reward. CUSTOMER CLUBS: - customer clubs have been established by many organizations. A customer club can be defined as follows: a customer club is a company-run membership organization that offers a range of value-adding benefits exclusively to members. CUSTOMER ENGAGEMENT: - the final positive strategy for building customer retention is to build customer engagement. Various studies have indicated that customer satisfaction is not enough to ensure customer longevity.

ii)

iii)

iv)

v)

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Q.2 (b) Write a note on buying role. Consumer decision making is a complex process. It is interplay of reactions amongst a consumer and his cognition, affect and behavior on the one hand, as well as the environmental forces on the other hand. The actual transaction/ exchange are preceded by considerable amount of thought processes and influences. This could be explained in terms of the seven Buying Roles viz., Initiator, Influencer, Decider, Buyer, gatekeeper, approver and, User. The marketer needs to understand these roles so as to be able to frame suitable strategies to target them.
INITIATOR

USER

INFLUENCER

BUYER

GATEKEEPER

APPROVER

DECIDER

1. INITIATOR: The person who identifies a need and first suggests the idea of buying a particular product or service. 2. INFLUENCER: The person with high technical knowledge and practical experience. Defines minimum requirements on technical or company standards. 3. GATEKEEPER: Controls the flow of information within the buying centre. Assistant of decision maker. Influence by preparing the decision and the relevant documents.

4. DECIDER: Right to say yes or no Person whose decision are accepted 5. APPROVER: Approver is one who sanctions or gives a go-ahead for the purchase 6. BUYER: The person who enters into the final transaction and exchange process or is involved in the physical activity of making a purchase. 7. USER: The person(s) who actually consumes the product or service offering. Interested in benefits and unobstructed function of the product buy. nareshsukhani@gmail.com TYBFM - MFS

Q3.a) DESCRIBE THE STAGES OF CONSUMER BUYING DECISION PROCESS ANSWER: An individual who purchases products and services from the market for his/her own personal consumption is called as consumer. To understand the complete process of consumer decision making, let us first go through the following example: Tim went to a nearby retail store to buy a laptop for himself. The store manager showed him all the latest models and after few rounds of negotiations, Tim immediately selected one for himself. In the above example Tim is the consumer and the laptop is the product which Tim wanted to purchase for his end-use. Why do you think Tim went to the nearby store to purchase a new laptop? The answer is very simple. Tim needed a laptop. In other words it was actually Tims need to buy a laptop which took him to the store. The Need to buy a laptop can be due to any of the following reasons: His old laptop was giving him problems. He wanted a new laptop to check his personal mails at home. He wanted to gift a new laptop to his wife. He needed a new laptop to start his own business. The store manager showed Tim all the samples available with him and explained him the features and specifications of each model. This is called information. Tim before buying the laptop checked few other options as well. The information can come from various other sources such as newspaper, websites, magazines, advertisements, billboards etc. This explains the consumer buying decision process. A consumer goes through several stages before purchasing a product or service.

NEED INFORMATION GATHERING/SEARCH EVALUATION OF ALTERNATIVES PURCHASE OF PRODUCT/SERVICE POST PURCHASE EVALUATION Step 1 - Need is the most important factor which leads to buying of products and services. Need infact is the catalyst which triggers the buying decision of individuals. nareshsukhani@gmail.com TYBFM - MFS

An individual who buys cold drink or a bottle of mineral water identifies his/her need as thirst. However in such cases steps such as information search and evaluation of alternatives are generally missing. These two steps are important when an individual purchases expensive products/services such as laptop, cars, and mobile phones and so on. Step 2 - When an individual recognizes his need for a particular product/service he tries to gather as much information as he can. An individual can acquire information through any of the following sources: Personal Sources - He might discuss his need with his friends, family members, co workers and other acquaintances. Commercial sources - Advertisements, sales people (in Tims case it was the store manager), Packaging of a particular product in many cases prompt individuals to buy the same, Displays (Props, Mannequins etc) Public sources - Newspaper, Radio, Magazine Experiential sources - Individuals own experience, prior handling of a particular product (Tim would definitely purchase a Dell laptop again if he had already used one) Step 3 - The next step is to evaluate the various alternatives available in the market. An individual after gathering relevant information tries to choose the best option available as per his need, taste and pocket. Step 4 - After going through all the above stages, customer finally purchases the product. Step 5 - The purchase of the product is followed by post purchase evaluation. Post purchase evaluation refers to a customers analysis whether the product was useful to him or not, whether the product fulfilled his need or not?

Q3b.) WRITE A NOTE ON INSTITUTIONAL AND GOVERNMENT MARKETS? The institutional market consists of schools, homes, prisons, and other institutions that must provide goods and services to people in their care. Many of these organizations are characterized by low budgets and captive clienteles. For example hospitals have to decide what quantity of food to buy for patients. The buying objective here is not profit, because the food is provided as part of the total service package; nor is cost minimization the sole objective, because poor food will cause patients to complain and hurt the hospitals reputation. The hospital purchasing agent has to search for Institutional food vendors whose quality meets or exceeds a certain minimum standard and whose prices are low. In fact, many food vendors set up a separate division to sell to institutional buyers because of these buyers special needs and characteristics. Heinz produces, packages, and prices its ketchup differently to meet the requirement of hospitals, colleges, and prisons. Aramark Corp has a competitive advantage when it comes to providing food for the national prisons, a direct result of refining its purchasing practices and its supply chain management. Where Aramark once merely selected products from lists provided by potential suppliers, it now collaborates with suppliers to develop products that Aramark customize to meet the needs of individual segments. In the corrections segment, quality has historically been sacrificed to meet food costs operators nareshsukhani@gmail.com TYBFM - MFS

outside that market would find impossible to work with. When you go after business in the corrections field, you are making bids that are measured in hundredths of a cent says president of Aramark Food & Support Services. Any edge gained on the purchasing side is extremely valuable. Aramark took a series of protein products and sourced them with unique partners at price points it never could have imagined before. It was able to drive costs down by working with partners who understood the chemistry of proteins and knew how to do things to lower the price but which could still create a product very acceptable to Aramark customers. Aramark replicated this process with 163 different items formulated exclusively for corrections. Rather than reduce food costs by increments of a penny or so a meal, which was the previous norm for this market. Aramark succeeded in taking 5 to 9 cents off a meal while maintaining or even improving quality. In most countries government organizations are a major buyer of goods and services. Government organizations typically require suppliers to submit bids, and normally they award the contract to the lowest bidder. In some case, the government unit will make allowance for the suppliers superior quality or reputation for completing contracts on time. Government will also buy on negotiated contract basis, primarily in the case of complex projects involving major R&D costs and risks and in cases where there is little competition. Government organizations tend to favour domestic supplier. A major complaint of multinationals operating in Europe was that each country showed favouritism towards its nationals in spite of superior offers available from foreign firms. The European Union is removing this basis. Because their spending decisions are subject to public review, government organizations require considerable paperwork from suppliers, who often complain about excessive paperwork, bureaucracy, regulations, decision making delays, and frequent shifts in procurement personnel. In India supplying to institutions is not that cumbersome as compared to supplying to government. For supplying to government the suppliers have to register first fulfilling several norms with organizations like Indian Railways, DGS&D, Ministry of Defence, ISRO, Department of Atomic Energy and several others. From registration to supply it may involve a few tens or hundreds of paper in addition to Red Tape. That is why only large suppliers venture to make a bid to supply to government as the medium and small enterprises cannot afford the costs of clerical work. Q. How the competitors are identified by the marketer? Competitor analysis: Competitor analysis is an important part of the strategic planning process. Competitor analysis has several important roles in strategic planning: 1. To help management understand their competitive advantages or disadvantages relative to competitors 2. To generate understanding of competitors past, present and future strategies 3. To provide an informed basis to develop strategies to achieve competitive advantage in the future. To help forecast the returns that may be made from future investments competitor analysis has two primary activities: A) Obtaining information about important competitors B) Using that information to predict competitor behavior

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Porters five forces model for competitor analysis: Porter identified five factors that act together to determine the nature of competition within an industry. These are the: 1. Threat of new entrants to a market 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threat of substitute 5. Degree of competitive rivalry

Threat of substitute products

Bargaining power of the suppliers

Intensity of rivalry within the industry

Bargaining power of the buyers

Threat of new entrants

Q. PRODUCT LIFE CYCLE Product life cycle is the stages through which a product or its category by passes. From its introduction to the marketing, growth, maturity to its decline or reduce in demand in the market. Not all products reach this final stage, some continue to grow and some rise and fall. Introduction nareshsukhani@gmail.com TYBFM - MFS

This is the stage of low growth rate of sales as the product is newly launched in the market. Monopoly can be created, depending upon the efficiency and need of the product to the customers. A firm usually incurs losses rather than profit. If the product is in the new product class, the users may not be aware of its true potential. In order to achieve that place in the market, extra information about the product should be transferred to consumers through various media. The stage has the following characteristics: 1. Low competition 2. Firm mostly incurs losses and not profit. Growth Growth comes with the acceptance of the innovation in the market and profit starts to flow. As the monopoly still exists, companies can experiment with new ideas and innovate in order to maintain the sales growth. This stage is the best time to introduce new effective products in the market thus creating an image in the product class in the presence of its competitors who try to copy or improve the product and present it as a substitute. Maturity In this, the end stage of the growth rate, sales slowdown as the product has already achieved acceptance in the market. New firms start experimenting in order to compete by innovating new models of the product. With many companies in the market, competition for customers becomes fierce, despite the increase in growth rate of sales at the initial part of this stage. Aggressive competition in the market results in profits decreasing at the end of the growth stage thus beginning the maturity stage. In addition to this, the maturity stage of the development process is the most vital.

Decline This is the stage where most of the product class usually dies due to low growth rate in sales. A number of companies share the same market, making it difficult for all entrants to maintain sustainable sales levels. Not only is the efficiency of the company an important factor in the decline, but also the product category itself becomes a factor, as the market may perceive the product as "old" and may not be in demand. It is not always necessary that a product should go through these stages. It depends on the type of product, its competitors, scope of the product etc

Q4-b INSTITUTIONAL MARKETS An institutional market is a consumer market composed of large buyers who tend to purchase in volume quantities. Several different types of organizations may be involved in a given institutional market, including educational institutions, businesses, and non-profit organizations. In most instances, the purchases are made in order to allow the organization to in turn provide services and goods to the individuals they serve. One example of an institutional market buyer is the house of worship. Local congregations of different faiths often purchase materials for printing orders of worship, newsletters and other printed items as part nareshsukhani@gmail.com TYBFM - MFS

of their ongoing ministry to members and visitors. It is not unusual for a house of worship to also order furnishings such as pews or other forms of seating in volume amounts. Larger houses of worship will often purchase food, paper plates, plastic utensils, and other items that can be used during social events held at the facility. Hotels are other participants in the institutional market. Whether a stand-alone business or part of a larger chain, the hotel will often order textiles in bulk. Items such as bed sheets, spreads, towels, and similar products are often ordered in larger quantities in order to gain a discount off the retail price. Hotels that also operate restaurants will also often order institutionally prepared foods that can be used to provide tasty meals available in the restaurant or by way of room service. In many cases, the priority of a buyer in an institutional market is not to earn a profit. Instead, the focus is on obtaining the highest quality of goods and services possible, while keeping costs in line with the current operating budget. This allows the buyer to offer quality services and support to clients, which in turn allows them to continue operating over the long term. Q.4 c) CHARACTERISTICS OF SERVICES: SERVICES: A type of economic activity that is intangible is not stored and does not result in ownership. A service is consumed at the point of sale. Services are one of the two key components of economics, the other being goods. Examples of services include the transfer of goods, such as the postal service delivering mail, and the use of expertise or experience, such as a person visiting a doctor. CHARACTERISTICS (1) Intangibility: Services are activities performed by the provider, unlike physical products they cannot be seen, tasted, felt, heard or smelt before they are consumed. Since, services are not tangibles, they do not have features that appeal to the customers senses, their evaluation, unlike goods, is not possible before actual purchase and consumption. So, as a result of this, the services are not known to the customer before they take them. The service provider has to follow certain things to improve the confidence of the client. For example, motor insurance may have a certificate. Not all the service product has similar intangibility. Some services are highly intangible, while the others are low i.e. the goods (or the tangible component) in the service product may vary from low to high. For example: Teaching, Consulting, Legal advices are services which have almost nil tangible components; While restaurants, fast food centres, hotels and hospitals offer services in which their services are combined with product (tangible objective) / such as food in restaurants, or medicines in hospitals etc. (2) Perishability: Services are deeds, performance or act whose consumption take place simultaneously; they tend to perish me the absence of consumption. Hence, services cannot be stored. The services go waste if they are not consumed simultaneously i.e. value of service exists at the point when it is required. For example if a customer has booked a movie-ticket but cannot go, once the show is over, the ticket is of no use. The customer may see the same film at another time or place but the earlier service has perished.

(3) Variability: Services are highly variable, as they depend on the service provider, and where and when they are provided. Service marketers face a problem in standardizing their service, as it varies with experience of service disseminator, customer, time and firm. Service buyers are aware of this variability. So, the service firms should make an effort to deliver high and consistent quality in their service; and this is attained by selecting good and qualified personnel for rendering the service. For example, you may get very good nareshsukhani@gmail.com TYBFM - MFS

service in a restaurant on one day but the next day, the service given by another person may not be satisfactory. (4) Ownership: Ownership in services is not transferred to the customer. It means that you do not own or take away the service, you merely experience it. For example, you may stay at a resort for a holiday but you do not own its physical facilities like rooms, etc. (5) Quality Measurement: Services are disseminated by the contact personnel of the service provider and. any human error on their part due to miscommunication, lack of information or efficiency and behavioural attitudes makes it very difficult to standardise and rate the quality of services. Q.4 d) TRANSFORMATION IN MARKETING PRACTICE: Marketing is undergoing a fundamental transformation. This revolution is driven by a number of factors: increased consumer resistance to traditional marketing methods, the proliferation of communication channels and ever-changing legal constraints. Leading consumer-oriented companies are dramatically adjusting their marketing mix to take better advantage of less traditional but ultimately more effective consumer interaction channels. They are also recognizing that marketing can help make every interaction more intelligent. As a result, these companies will be able to deliver more timely and relevant marketing messages and will ultimately create stronger and more valuable customer relationships. Reasons for transformation in marketing practices:

-Decreasing Effectiveness of Traditional Marketing Channels: Since the rise of direct marketing, companies have relied on outbound channels such as direct mail, telemarketing, inserts and catalogs to reach consumers, More recently, marketers have increased their use of lower-cost outbound channels such as email and SMS messaging to accomplish their goals. However, even as marketers have relied more and more on traditional outbound channels, they are becoming less and less successful. The problem is that the traditional outbound marketing channels such as direct mail and email use interruption based marketing. These marketing campaigns are only effective if they interrupt whatever the customer is doing at the time to gain his attention. Todays world has such a glut of information and many demands on consumer attention that the typical consumer would rather ignore all marketing messages than sift through the spam to find the relevant ones. - Consumer Backlash: The battle for consumer attention has resulted in a growing consumer backlash against traditional marketing techniques. 65 percent of consumers feel constantly bombarded with too many marketing messages. As consumer resistance to traditional outbound marketing channels increases, marketing effectiveness and productivity decreases. According to the DMA, click-through rates have declined from 6.8 percent in 2001 to 5.5 percent in 2003, and response rates to traditional direct mail have fallen as low as 1.6 percent. Additionally, the number of television viewers who could name a brand or product advertised in the show they just saw has dropped from 35 percent to less than 10 percent. -Regulation: In addition to causing declining response rates, the consumer backlash against outbound marketing techniques has led to increasingly strict government regulation. At the forefront of government regulation is the National Do Not Call Registry. In addition to the federal law, marketers must also comply with a complex layer of state and local regulations laws, making the prospect of marketing by outbound telephone calls both complex and risky. nareshsukhani@gmail.com TYBFM - MFS

Under the new directives, no unsolicited electronic message (including outbound telephone, email or wireless messaging services) can be sent without consent and prior relationship (i.e., opt-in). If a prior relationship exists, unsolicited electronic mail can be sent on an opt-out (soft opt-in) basis. -The marketing transformation: Customers of todays consumer-oriented companies interact with many different individuals and channels. In addition to traditional channels such as advertising, direct mail and email, customers also interact over the contact centre, Web site, ATM, point-of-sale system and so on. Leading marketers are recognizing that these additional interaction channels can become opportunities to improve customer revenue and profitability and that doing so is often much more effective than traditional marketing methods. As a result, they are creating a radical transformation of the marketing mix as well as marketings role in their enterprises.

Q. Kinds of Financial Products (any five).

corporate banking fee based services retail banking

small savings and retirement planning

kinds of financial products credit cards

life insurance

non-life insurance

The types of financial products are: 1. Corporate banking: The marketing of bank products to corporate customers is corporate banking. On the basis of sales volume and/or capital employed, banks may classify corporate customers into three segmentslarge corporations, mid-sized companies, and small and medium business enterprise. As a part of marketing efforts, banks develop long-term relationships with their corporate customers. Strong relationships help banks to improve profitability and retain customers in a competitive market. Banking products are broadly classified into fund- based products and fee based services. 2. Retail banking: Liberalization, economic growth, changing demographics and technological advancements have fuelled the growth of retail banking in India. The product range in retail banking includes four broad nareshsukhani@gmail.com TYBFM - MFS

categorizes liability products, asset products, credit/debit cards, and investment products. The promotions of retail banking products is done through various avenues of promotions , such as advertising , sales promotion, personal selling, brand building, public relations, tele -marketing, direct sales and direct respond advertising 3. Credit cards: Credit cards, Charge cards, and debit cards facilitate cashless transaction. The credit card business is low margin, high volume business, branding is of immense significance in the credit card industry. Different types of branding strategies are used of which co- branding is the most commonly used approach. Co- branding involves the alliance of two mutual benefits. 4. Non-life insurance : The common non-life insurance products targeted at individual (retail) customers are motor vehicle insurance, personal accidents insurance, health insurance and householders insurance. Riders are the extension or the add-ons provided on the particular product for which the customers pays extra premium. In life insurance the main factors used for determining rates are mortality, expenses, and rate of interest. 5. Life insurance The life insurance business differs from the non life insurance business on several aspects that range from product nature, risk covers provided, and agents role. Life insurance products cater to the need of the individual and groups of individuals. Generally, insurance products are categories broadly under term life, whole life, endowments, money back, annuities and pensions, and unit linked scheme.

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Q. what are the types of organizational buying? Ans:

TYPES OF ORGANIZATIONAL BUYING

STRAIGHT MODIFIED RE-BUY RE-BUY

LESS INVOLVEMENT

NEW BUY

MORE INVOLVEMENT

1) Straight re-buy: i) In this type of buying situation, only purchasing department is involved. ii) They get information from inventory control department or section to reorder the material or item and they seek quotations. iii) `Straight re-buy' is a situation in which a buying organization records or repeats the previous order without changes. iv) Hospital consumables and office stationery may be examples. v) In this situation, the organization which is currently the supplier, the `in-supplier', will have to ensure that it is able to sustain its offerings and service so that competitors do not enter the scene. vi) These competitors are `out-suppliers' who would like to enter the buying organization. 2) Modified re-buy: i) `Modified re-buy' is a situation in which the buying organization brings in changes in its requirements. ii) An automobile company may prefer to use an updated version of bearings. iii) A company working on updating its offerings can create a modified re-buy situation by working with the influences of the buying centre in the organization. iv) In such equipment, new product introductions always create a modified re-buy situation and hence a company should introduce new products to stay ahead of the competition. v) Even in consumables, there is scope to create a modified re-buy situation with new products; self-stick pads from 3M and waterproof medicated plasters from Johnson and Johnson are examples. vi) A modified re-buy situation can also be created through services such as the consultative sales efforts discussed earlier or through better product delivery promises. 3) New buy: i) `New buy' is a situation in which a company buys a product for the first time and does not have any experience with the vendors or the product it is attempting to buy. nareshsukhani@gmail.com TYBFM - MFS

ii) This situation is very important, especially for a project situation in which consultative selling efforts are involved. iii) A company attempting to market an ERP package to an organisation has to obtain the precise customised requirements of the buying organisation before formulating a solution. iv) For instance, lifts for a commercial complex can be classified under a new buy situation. v) A new buy requires extensive information and evolution of alternative.

1) A) Explain the concepts of branding and brand equity. Ans: i) A brand is defined as a name, term, sign symbol or a combination of these that identifies the maker or seller of the product. ii) One of the most important decisions a marketing manager can make is about branding. iii) The value of brands in todays environment is phenomenal. iv) Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market. v) A brand is tool which is used by an organisation to differentiate itself from competitors. Ask yourself what is the value of Nike trainers without the brand or the logo? How does your perception change? vi) Increasingly brand managers are becoming annoyed by copycat strategies being employed by super market food retail stores particular within the UK. Coca-Cola threatened legal action against UK retailer Sainsbury after introducing their Classic Cola, which displayed similar designs and fronts on their can. vii) Internet branding is now becoming an essential part of the branding strategy game. viii) Generic names like bank.com and business.com have been sold at a very high price. Why brand? i) A brand name helps an organisation differentiate itself from its competitors. ii) In todays competitive world no product can go without a brand. iii) Customers often build up a relationship with a brand that they trust and will often go back and to time and time again. iv) For example some people may only purchase a Sony TV although there are acceptable alternatives on the market, because of a past positive history with this brand. Brand Equity: i) How much is a brand worth? Brand equity refers to the value of the brand. ii) Brand equity does not develop instantaneously. iii) A brand needs to be carefully nurtured and marketed so consumers feel real value and trust towards that brand. iv) Nike, Adidas and Marks & Spencer have high brand equity. These brands command high awareness and consumer loyalty. v) An essential issue in product management is branding on their products. vi) While 3M puts its brand name on a great diversity of products, Procter & Gamble has a separate brand name for each product. vii) In general the use of Brand extensions should be evaluated on the basis of compatibility of various products. viii) Research shows that consumers are more perceptive to brand extensions when: 1. The company appears to have the expertise to make the product. 2. The products are compatible. 3. The brand extension is not seen as being exploitative of a high quality brand name. nareshsukhani@gmail.com TYBFM - MFS

ix) In many markets, brands of different strength compete with each other. At top level are the national or international brands. x) A large investment is usually been put into extensive brand building including advertising, distribution and if needed infrastructure support. xi) Although some national brands are better regarded than others the national brands sell higher prices than the regional and store brands. xii) Regional brands, as the name suggests, are typically sold only in one area. In some cases regional distribution is all that firms can initially accomplish with the investment capital and other resources that they have. xiii) This means that advertising is usually done at the regional level. This limits the advertising opportunities and thus the effect of advertising.

B) Who are the participants in the financial services markets? Ans: In financial markets, there is a flow of funds from one group of parties known as investors (fundssurplus units) to another group which require funds (funds-deficit units).

PARTICIPANTS

INDIVIDUAL

FIRMS OR CORPORATES

GOVERNMENT

REGULATORS

MARKET INTERMEDIARIES

The link between these groups is provided by market intermediaries and participants such as : The Individuals Individuals are the net savers and purchase securities issued by corporate. They provide funds by subscribing to these securities or by making other investments. The Firms or Corporate The Corporate are net borrowers. They require funds for diff projects from time to time. They offer diff types of securities to suit the risk preferences of investors. Government Government may borrow funds to take care of the budget deficit or as a measure of controlling the liquidity...etc They may require long term funds (raised by issue of govt loans) or short term funds (maintain liquidity) in money market. nareshsukhani@gmail.com TYBFM - MFS

 Initial investments in public sector enterprises are also made through subscription of shares.

Regulators Financial system is regulated by diff govt agencies which administer the relationships of participants, manage, control and supervise the mechanism and overall flow of funds. RBI and SEBI are two such agencies in India. There are also other legislations and govt departments to regulate operations in financial system. Market Intermediaries Market intermediaries are also known as merchant bankers, investment managers or investment bankers operating in financial system. The objective is to smoothen the investment process to link investors and fund users. Corporations and govt hire professional servicers to represent them to investors. Small investors find difficult to make direct investment and may not be able to diversify across borrowers to reduce risk. He may not be well equipped to assess and monitor credit risk of borrowers. Hence such Market Intermediaries provide consultancy, market analysis and credit rating of securities. Some of the market intermediaries are : Lead managers Bankers to the issue Depositories Registrar and Share Transfer Agents Investment Companies Clearing corporations Share brokers Underwriters.etc

2) Enlist the various financial products in India and their marketing practices. Ans: The various financial products in India are as follows:

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Corporate Banking

Non-Life Insurance

Fee-Based Services

Retail Banking

FINANCIAL PRODUCTS

Mutual Funds

Credit Cards

Life Insurance

Small Savings & Retirement Planning

Corporate Banking: The marketing of bank products to corporate customers is corporate banking. On the sales volume and/or capital employed, banks may classify corporate customers into three segments- large corporations, midsized companies, small and medium business enterprises (SMEs). As a part of their marketing strategy, banks develop long term relationships with their corporate customers. This help the banks improve profitability and retain customers in a competitive market. Personal selling is the most important component of the promotional mix for corporate banking. As personal selling is a two way interaction, it also plays an important role in the service delivery. Advertising is used to reach out a vast audience in a cost effective manner. Public Relations are used to provide publicity to the bank, to improve its public image. As a part of sales promotion, banks even give incentives to achieve business targets. Corporate banking products are distributed mainly through-

1)

Bank branches Direct sales force

Retail Banking: Liberalization, economic growth, changing demographics and technological developments have fuelled the growth of retail banking in India. Products in Retail Banking

2)

Liability

Asset Investment

Credit/Debit Cards

Savings Account Polices nareshsukhani@gmail.com

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Insurance

Current Account Funds Fixed Deposit Funds Recurring Deposit

Loan To Senior Citizen Vehicle Loan Agricultural Loan

Mutual Pension

The promotion of retail banking products is done throughi. Advertising ii. Sales promotion iii. Personal selling iv. Brand building v. Public relations vi. Tele-marketing vii. Direct sales viii. Direct response advertising The common distribution channel in retail banking arei. Branches ii. ATMs iii. Internet iv. Phone banking v. Mobile banking vi. Direct selling agents vii. Call centres

3) Credit Cards: Credit cards & Debit cards facilitate cashless transactions. The credit card business is a low margin, high volume business. Different types of branding strategies are used of which co-branding is the most commonly used approach. It involves the alliance of two brands for mutual benefits. Effective branding requires an understanding of brand metrics and the focus areas for effectiveness. The pricing of credit cards is a difficult task. Risk- based pricing is a commonly followed pricing method where the pricing of credit card depends on the assessment of the risk profile of the customer. Credit card marketers make use of all the elements of the promotional mix. The advertising campaigns are created with certain advertising objectives. These marketers also use promotional offers & public relations. Bank branches are the predominant means of distribution. The advent of technology had led to the use of call centres, internet & creation of terminals at merchant establishments.
Non-Life Insurance: The common non-life insurance products targeted at RETAIL customers area) Motor vehicle insurance b) Personal accident insurance c) Health insurance d) Householders insurance e) Baggage insurance f) Travel insurance g) Transit insurance nareshsukhani@gmail.com TYBFM - MFS

4)

h) Pet insurance The common non-life insurance products targeted at CORPORATE customers area) Group health insurance b) Cargo insurance c) Hull insurance d) Industrial insurance e) Fire insurance f) Shop keepers policy g) Fidelity insurance h) Jewellers insurance i) Liability insurance j) Cattle insurance k) Poultry insurance l) Weather insurance, etc. The promotional mix in non-life insurance industry is primarily centred on advertising. The two most common advertising appeals are fear & humour. Distribution Channel Traditional Approach Direct mail Direct sales Insurance agents Brokers Agencies Contemporary Approach Call Centres Banc assurance Worksite Marketing

Life-Insurance: Life-Insurance products cater to the needs of the individual and groups of individuals. Generally life insurance products are categorized intoi. Term life ii. Whole life iii. Endowment iv. Money back v. Annuities & pensions vi. Unit linked schemes Corporate branding is more common in life insurance than product branding. Brand communication is cautiously done by the insurer to project the right kind of image in the minds of the customer. To determine the insurance premium, marketers consider various factors such as mortality rate, investment earnings & expenses, the individual risk profile based on age, health, etc. time/frequency of payment. In the promotional mix of life insurance products, where ad spending on the media is concerned, it is more on television than on print ads. The benefits of insurance advertising include reaching a wide range of population, communicating new product launches & enhancing the brand image. Life insurance companies may use riders which are the add-on features of an insurance policy. nareshsukhani@gmail.com TYBFM - MFS

5)

Small Savings & Retirement Planning: The objective of savings is to cater to future needs. When individuals have small amounts of money at their disposal, the best option for investment is the small savings schemes. The small savings schemes introduced by the Government of India help people develop the habit of savings to finance their future needs. There are different types of small savings schemes and they differ from one to another on parameters like investment limits, maturity period, liquidity and returns, interest rates offered to the depositors & tax concessions. Promotions are very important in the small saving schemes & retirement products. They are used by both the public as well as private sector. Radio Advertising in the small savings category makes use of-

6)

Print ads
The media strategy of retirement solution providers includes television, radio and print advertising.

7) Mutual Funds: Mutual Funds (MF) in India cater to the needs of different types of investors. SEBI is the regulatory body of Indian MF industry. MFs are divided into open-ended, close-ended & interval funds. Based on the investment objectives, they are divided into growth, balanced, income & money market funds. They are classified into tax savings schemes too. MFs are priced based on their net asset value (NAV), which the fund houses declare on a daily basis. Investors can sell their units back to the fund at the prevailing NAV. MF marketers use the following to attract investors & increase their salesi. Advertising Print Electronic media Internet
ii. iii. iv. Sales promotions Brand communications Public relations

AMFI has been actively involved in public relations by promoting the MF industry, both at domestic & international level.

8)

Fee-Based Services:

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Corporate

Retail

Organisations avail of such services for meeting both their short-term & long-term financial requirements. The common fee based services offered to corporate clients are Cash management services Letter of credit Bank guarantees Bill discounting Factoring/forfeiting Forex services Merchant banking Registrar services Underwriting services Custodial services Lease & hire purchase Credit rating The retail fee based services are availed at large by the retail customers for Money transfer Payments Personal wealth management Online trading, etc. While pricing of corporate fee based services are relationship oriented and relatively flexible, retail fee based services have standardized pricing. Though fee based services are not promoted using the traditional promotion mix in a major way, their distribution is similar to that of banking products. For corporate fee based services, marketers use branches extensively, whereas their retail counterparts use advanced technology channels such as internet.

2) A) What is product innovation? Give examples. Ans: i) Product innovation is the creation and subsequent introduction of a good or service that is either new or improved on previous goods or services. ii) This is broader than the normally accepted definition of innovation to include invention of new products which, in this context, are still considered innovative. iii) Product innovation is defined as- The development of new products, changes in design of established products, or use of new materials or components in the manufacture of established products. iv) Thus product innovation can be divided into two categories of innovation: development of new products and improvement of existing products. nareshsukhani@gmail.com TYBFM - MFS

v) New product development describes the complete process of bringing a new product or service to market. vi) There are two parallel paths involved in the process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. vii)This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use. viii)Product innovation often takes place when a product's sales are in decline. ix)This is an obvious and commonly used method to extend the life of a product. x)Product innovation can also occur with reference to an existing product, however, or a product that is similar to others available in the market. xi)This type of innovation can include anything from how the product is manufactured, including both methods and materials used, to the actual product or service. xii) When a company introduces a new mobile phone, for example, it is releasing a product that is, to some extent, already available to the public and consumers. xiii)Product innovation in such a field, therefore, requires that a business develop new ways to produce such phones or to release a phone with features and technology not otherwise available. xiv)Consumers are often interested in product innovation to see what new features or products are available, but businesses often see such innovation as opportunities for new revenue. xv)Innovation that leads to a cheaper manufacturing process, or one that uses renewable resources and energy that may be less expensive in the long run, can help reduce operating costs. xvi)New products, or major innovations in existing products, can bring new customers and increase revenue for a company. xvii) In highly competitive fields, such as consumer electronics and computer software, product innovation often allows a company to establish itself in the market and develop a new business identity. B)Explain the features of service marketing with examples. Ans: i)Services marketing is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. ii)Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services. iii)The range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who receive it. iv)Services are economic activities offered by one party to another. v) Often time-based, performances bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. vi)In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved.

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Characteristics of Service Marketing

CHARACTERISTICS

INTANGIBILITY

HETEROGENEITY/ VARIABILITY

PERISHABILITY

CUSTOMER RETENSION

RELATIONSHIPS

Intangibility Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering.

Heterogeneity/Variability Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. e.g.: All burgers of a particular flavour at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers. Perishability Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. e.g.: A customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. At the most he may decide not to visit that particular barber in the future. Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame. E.g.: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. E.g.: the barber is necessarily a part of the service of a haircut that he is delivering to his customer. Customer Retention Given todays highly competitive scenario where multiple providers are vying for a limited pool of customers, retaining customers is even more important than attracting new ones. Since services are usually generated and consumed at the same time, they actually involve the customer in service delivery process by taking into consideration his requirements and feedback. Thus they offer greater scope for customization according to customer requirements thus offering increased satisfaction leading to higher customer retention. nareshsukhani@gmail.com TYBFM - MFS

Relationships Relationships are a key factor when it comes to the marketing of services. Since the product is intangible, a large part of the customers buying decision will depend on the degree to which he trusts the seller. Hence, the need to listen to the needs of the customer and fulfil them through the appropriate service offering and build a long lasting relationship which would lead to repeat sales and positive word of mouth

3) Describe the designing of competitive strategies according to market dominance. Ans: i)An effective method of designing competitive strategies is on the basis of market dominance. ii)The company can identify & analyze its strengths, weakness and relative position in the market and accordingly decide which of the four strategies are best suited to it. iii)Market dominance is a measure of the strength of a brand, product, service or a firm, relative to competitive offerings. iv) In defining marketing dominance, you must see to what extent a product, brand or firm controls a product category in a given geographic area. v)There are several ways of calculating market dominance. The most direct is market share. This is the percentage of the total market serviced by a firm or brand. Market dominance Strategies: Typically there are four types of market dominance strategies that a marketer will consider: there are market leader, market challenger, market follower& market niche.

MARKET DOMINANCE STRATEGIES MARKET MARKET MARKET MARKET

LEADER

CHALLENGER

FOLLOWER

NICHER

MARKET LEADER: i)The market leader is dominant in its industry. ii) It has substantial market share often extensive distribution arrangements with retailers. iii) It typically is the industry leader in developing innovative new business models & new products. iv) It tends to be on the cutting edge of new technologies and new production processes. v)I sometimes has some market power in determining either price or output. vi)Of the four dominance strategies, it has the most flexibility in crafting strategy. vii)The main options available to market leaders are: Expand the total market by finding: o new users of the product nareshsukhani@gmail.com TYBFM - MFS

o new uses of the product o more usage on each use occasion Protect your existing market share by: o Developing new product ideas o Improve customer service o Improve distribution effectiveness o Reduce costs Expand your market share by: o Targeting one or more competitor o Without being noticed by government regulators MARKET FOLLOWERS: i)A market follower is a firm in a strong, but not dominant position that is content to stay at that position. ii) The rationale is that by developing strategies that are parallel to those of the market leader, they will gain much of the market from the leader while being exposed to very little risk. iii) This play it safe strategy is how Burger king retains its position behind McDonalds. The advantages of this strategy are: No expensive R&D failures No risk of bad business model best practices are already established Able to capitalize on the promotional activities of the market leader No risk of government anti-combines actions Minimal risk of competitive attacks Dont waste money in a head-on battle with the market leader MARKET CHALLENGER: i)A market challenger is a firm in a strong, but not dominant position that is following an aggressive strategy of trying to gain market share. ii) It typically targets the industry leader (for e.g. many tablet companies vs. Apple I pad), but it could also target smaller, more vulnerable competitors. The fundamental principles involved are: Assess the strength of the target competitor. Consider the amount of support that the target might muster from allies. Choose only one target at a time Find a weakness in the targets position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot. Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders, an attacker has the advantage of being able to concentrate their forces at on place Launch the attack quickly and then consolidate. MARKET NICHER: i)In this niche strategy the firm concentrates on a select few target markets. ii) It is also called a focus strategy. iii) It is hoped that by focusing marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets, you can better meet the needs of that target market. iv)The niche should be large enough to be profitable, but small enough to be ignored by the major industry players. v) The most successful niches tend to have the following characteristics: They tend to be in high value added industries and are able to obtain high margins. They tend to be highly focused on a specific market segment They tend to market high end products or services , and are able to use a premium pricing strategy. nareshsukhani@gmail.com TYBFM - MFS

 They tend to keep their operating expenses down by spending less on R&D , advertising & personal selling.

4)SHORT NOTES: a)Indian financial sector. Ans:

INDIAN FINANCIAL SECTOR

FINANCIAL MARKETS

BANKING SECTOR

i)Despite the history of Indias stock markets and large number of listed firms, the size and role in terms of allocating resources of the markets are dominated by those of the banking sector. ii)Total bank deposits are equivalent to 50% of GDP in 2003, and constitute three-quarters of the countrys total financial assets; On the other hand, total capitalization of the stock market is 34% of GDP. iii)In terms of the floating supply of the market, or the tradable fraction of the total market capitalization, Indias stock market is only half of its banking sector. iv) India has a market dominated system; but this is mainly due to the small amount of bank private credit rather than the size of the stock market. v)In terms of relative efficiency of the market v/s banks, Indias banks are much more efficient than the market, and this dominance of banks over market is stronger in India. vi)Indias stock market and banking sector are small relative to the size of its economy, and the financial system is dominated by an efficient but significantly under-utilized banking sector. vii)The number of Indias stock exchanges has grown from four at independence to 23 today. India has also boosted the largest number of listed companies in the world- well over 10,000. viii)The ratio of Indias market capitalization to GDP rose from about 3.5% in the early 1980s to over 34% in 2003, which ranks 41st among 89 countries. ix)Since the middle of 2003 through the first quarter of 2006, Indian stock prices have appreciated rapidly, with the popular Sensex index rising from about 3000 to over 20,000 in a period of less than 7 years. x)The trading patterns at the NSE are similar to those of NASDAQ with more stocks actively and frequently traded. xi)According to the Reserve Bank of Indias handbook of Indian statistics, both foreign direct investment and portfolio investment have been growing fast during the past 15 years, with the latter twice the size of the former. xii)While stock price in India co. move less frequently than those in China, they are much more synchronous than those in the developed markets such as U.S. nareshsukhani@gmail.com TYBFM - MFS

xiii)In terms of profitability, Indian banks have also performed well compared to the banking sector in other Asian countries. xiv)Despite of the development and growth of Indian financial system(both banking and markets sector), its size is small relative to the economy while its role of resource allocation and provider of external financing are expected to become much more important in the near future. b)External macro-environment of business. Ans:

EXTERNAL MACROENVIRONMENT

ECONOMIC ENVIRONMENT

TECHNOLOGICAL ENVIRONMENT

POLITICAL AND LEGAL ENVIRONMENT

DEMOGRAPHIC ENVIRONMENT

SOCIAL/CULTURAL ENVIRONMENT

1. Economic environment- the economic environment consists of factors that affect consumer purchasing power and spending patterns. Economic factors include business cycles, inflation, unemployment, interest rates and income. Changes in major economic variables have a significant impact on the marketplace. For example income affects consumer spending which affects sales of the organisations. 2. Technological environment- refers to technologies, which create new product and new market opportunities. Technological developments are the most uncontrollable force faced by marketers. Organisations need to be aware of new technologies in order to turn these advantages into opportunities and a competitive edge. Technology has tremendous effect on lifestyles, consumption patterns and the economy. Advances in technology can start new industries radically alter or destroy existing industries and stimulate entirely separate markets. The rapid rate at which technology changes has forced organisations to quickly adapt in terms of how they develop, price, distribute and promote their products. 3. Political and legal environment- organisations must operate within a frame work of governmental regulation and legislation. Government relationship with organisations encompasses subsidies, tariffs, import quotas and deregulation of industries. The political environment includes government and special interest groups that influence and limit various organisations and individuals in a given society. Special interest groups have grown in number and power over last three decades, putting more constraint on marketers. The major purpose of business legislation include protection of companies from unfair competition, protection of consumers from unfair business practices and protection of interests of society from unbridled business behaviour. 4. Demographic environment- demographics tell marketers who current and potential customers are, where they are and how many are likely to buy what the marketer is selling. Demography is the study of human population in terms of size, location, age, gender, race, occupation and other statistics. Changes in demographic environment can result in significant opportunities and threats nareshsukhani@gmail.com TYBFM - MFS

presenting themselves to the organisation, major trends for marketers in the demographic environment include worldwide explosive population growth, a changing age and educational mix, new types of households and geographical shifts in population. 5. Social/cultural environment- social forces are most difficult and uncontrollable variables to predict. It is important for marketers to understand and appreciate the cultural values of the environment in which they operate. The social environment is made up of forces that affect societys basic values, perception, preferences and behaviours. Values and believes in clued equality, achievement, youthfulness, efficiency, practically, self-actualisation, freedom etc. The cultural environment includes people from different religions, regions, castes and their varied festivals, customs and traditions. Changes in social environment affect customer behaviour, which affects sales of products. d) CRM Evaluation. 1) : Customer relationship management evaluation criteria help measure performance in areas of business that are directly impacted by a companys choice of software solution. This helps you use your CRM program for its benefits of giving the best total customer experience. Such evaluations are: A) Return on Investment: Cost of CRM solution includes purchasing of the software or licenses and any hardware technology required on the back end for operation. Upfront costs more often concern self hosted solution, while hosted solution usually have more ongoing costs. Calculating ROI with CRM can be very tricky especially when goals like improved services more efficient distribution and other goals not directly tied to revenue are used. B) Ease of use and customization: In an enterprise wide CRM program employees in many department in your company are likely to interact with your CRM solution. So you want to select something that is easy enough for different types of employees to use with basic training. Customization in CRM solution is also important so that you can tailor the software to suit your companys specific business function. C) Ease of use: Simplify customer relationship and business process Provide user friendly interface Allow ease of CRM navigation D) Simplified workflow: Perform the various tasks easily Present simplified workflow logics Encourage easy adoption by users E) Customization: Flexibility to change the default CRM setup Provision to mould the CRM to your business process Provision to roll back to the default CRM setup e)Service process. Service Process refers to the process and systems within the organization that affects its marketing process. It means procedures, mechanism and flow of activities by which a service is acquired. nareshsukhani@gmail.com TYBFM - MFS

 Process decisions radically affect how a service is delivered to customers. The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. As services are dynamic and experimental produced on real time by customers and employees, firms use service blueprinting to manage service encounter and allow clearer visualization of service process. Blueprinting method invented by Shostack(1984): line of intersection separates the customer action area from the supplier action area. line of visibility differentiates between actions visible and invisible to the customer. line of internal interaction distinguishes between from office and back office activities. line of implementation separates between planning, managing and controlling (management zone) and support activities (support zone). In service blueprint the customer occupies top zone, management occupies bottom zone and service operations occupy between them. Thus it helps to empower the service provider to manage the service components to bridge the gap between management intent and customer demand.

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Q4.C. MARKETING OF PRODUCTS IN US. Financial services and products help facilitate and finance the export of U.S. manufactured goods and agricultural products. In 2009, the United States exported $70 billion in financial services and had a $1.6 billion deficit in financial services and insurance trade. The securities subsector of the industry shows great potential for employment growth, with a 12 percent increase expected by 2018. According to the U.S. Department of Labor, 803,100 people were employed in the securities and investment sector at the end of 2010. Investment in the U.S. financial services industry offers significant advantages for financial firms. At least 140 of Fortunes Global 500 companies have chosen to locate their headquarters in the United States to take advantage of its creative, competitive, and comprehensive financial services sector. The industry offers the greatest array of financial instruments and products to allow consumers to manage risk create wealth and meet financial needs. Industry Subsectors Banking: The U.S. banking system has $13.3 trillion (end of 2010) in assets and supports the worlds largest economy with the greatest diversity in banking institutions and concentration of private credit. Asset Management: The U.S. asset management subsector is unrivalled in its depth and diversity. U.S. asset managers are currently meeting the pension management needs for almost 70 percent of the global retirement market. Total U.S. retirement assets were $21 trillion at the end of 2009, up nearly $5 trillion. Insurance: In 2009, the insurance industrys net premiums written totalled $934 billion, with premiums recorded by life/health insurers accounting for 55percent and premiums by property/casualty insurers accounting for 45 percent, according to The Insurance Information Institute. Additionally, about one-third of all reinsurance sold worldwide is bought by U.S. firms. Venture Capital: The United States created the venture capital industry and maintains the oldest and most dominant position worldwide. In 2008, venture capital-backed companies employed more than 12 million people and generated nearly $3 trillion in revenue. Respectively, these figures accounted for 11 percent of private sector employment and represented the equivalent of 21 percent of U.S. gross domestic product during that same year. 3)Explain the insurance marketing strategies in USA. i)US insurance leads are the potential customers to whom insurance companies sell their insurance policies. ii)A USA insurance lead is a one of the major means to attract customers and improve sales. iii) US insurance leads prove to be valuable marketing methods. It enables companies to generally quality leads. iv)This further makes it possible for companies to increase profits and ultimately achieve success. v)To further the development of the insurance sector in the US, the Congressional legislation has indicated a green signal to various financial institutions, comprising insurance carriers, and banks to sell products of one another. Some strategies to generate US insurance lead:

STRATEGIES

Pay-Per-Click Method
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Pay-For-Call Method
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Co-registration Method

1.)Pay-per-Click Method: i)Insurance companies/agents can leverage the internet to get quality US insurance leads. ii) Companies can advertise on relevant websites which in turn will help them to generate useful lads. iii)These have more probability of getting converted into sales. iv)Payment is usually based on the number of people who click on insurance advertisement. 2.)Pay-For-Call Method: i)This is a valuable USA insurance lead generation technology. ii) Thus, an insurance company pays only for the leads which they receive a phone call from through advertising. iii)This method is useful for insurance companies that have their own websites. 3.)Co-registration Method: i)This is perhaps the best method for generating targeted leads. ii)It offers customers an easy and time efficient measure to choose a policy. iii) In co-registration method, any visitor who subscribes for a newsletter is given some options through check boxes. iv)Visitors can check the option they want more information on, without being forced to fill online process. Marketing strategies: i)Insurance marketing is basically just the marketing of insurance products. ii)Marketing of this sort is an important tool when it comes to the business of insurance. iii)The marketing of insurance readily happens in the life insurance department as well as the non-life insurance department. iv)What type of advertising and marketing is most suitable for your insurance business? This is not a one size fits all deal. v)You must consider how much of a budget you have and work from there. You need to know what your target market is. vi)Online advertising is one marketing tool that is worth the money. vii)As the internet take on more power and influence all of the time, having a web presence will put you on the cyber map and get you noticed. viii)It has been found through studies that 75% of all households have access to a computer and internet resources. ix)Block line advertising in trade journals, industry publications and periodicals is the way to go. x)This is because industry professionals read these publications to keep in the know. xi)Telephone marketing is one another type of marketing. xii)Television ads and print ads are excellent forms of insurance marketing. xiii)However the downside is that both can be very expensive. Hence these things can be considered as effective marketing strategies. B) Explain the marketing practices of mutual funds in the UK. i) The UK mutual fund industry has about 16000 funds. ii) Attributes of fund performance, image, delivery, service and reliability define success in the mutual fund market. iii) In 2011, UK Mutual Fund industry launched a standard investment product This can be sold in every country in Europe known as OEIC or open ended investment company vehicle in the UK. iv) The essential difference between an OEIC and a normal mutual fund is that nareshsukhani@gmail.com TYBFM - MFS

units in OEIC have a single price for both purchases and sales making them user friendly, OEIC are priced, packaged and taxed in a way that attracts both domestic and foreign investors. v) Fidelity, Flemmings and Templeton are already having offshore schemes .For e.g. Templeton has 21 funds in its Global Strategy SICAV. With global schemes Mutual fund companies can take advantage of tax benefits. vi) In the UK, unit trusts are one of three sets of financial institutions allowing individuals and companies to buy an easily realizable stake in a diversified portfolio of marketable securities that is managed by a professional fund management group. vii) Unit trusts are open-ended mutual funds, legally established under trust law with trustees acting as custodians of the securities on behalf of the beneficial owners and with a separate fund management company pursuing the investment objectives specified in the trust deeds. viii) The principal trustees are retail banks and insurance companies while the main fund management groups are subsidiaries of retail and investment banks, stockbrokers and especially, insurance companies. ix) Unit trusts were allocated to one of 20 sectors specified by the Association of Unit Trusts and investment Funds (AUTIF). x) There are large numbers of funds in the UK domestic equity sector which has been split into the subcategories of growth, general, income, and smaller company funds. xi) In June 2006, The financial services authority launched RDR to overhaul the whole retail distribution chain for mutual funds. xii) RDR aims to create funds with guardians whose interest is aligned with their customers. xiii) RDR thus encourages advisory businesses which recommend low risk products and earn revenues from a large number of loyal customers. xiv) After 2012, mutual fund commissions will be banned in the UK and advisors will have to charge directly for their services. xv) For Mutual funds in the UK, the prospectus must include the investment objective, the type of securities purchased, history of the fund, rate of return, risks and fluctuations. xvi) Mass media should be used as a brand recognition tool for gaining customer trust. xvii) Advertisements should be generic and not linked to returns, so that the ads can be used for longer time. xviii) Also every investor has a different need and objective. xix) The funds for advertising and marketing are indirectly passed on to the final mutual fund investor. c) FDI in Chinas insurance industry Ans: i)Since 1995,China has been the largest recipient of foreign direct investment in the developing world receiving US$40.8 billion in 2000. ii) By end of May 2001, china has absorbed a total of about US $ 363.6 billion of FDI. iii) From 1980 to the end of May 2001 these FDI funds had been invested in more than 3,70,000 enterprises of which more than 2,00,000 were still operating mostly in chinas coastal cities. nareshsukhani@gmail.com TYBFM - MFS

iv) Recently FDI has been directed towards enterprises in chinas less developed central western and region. v)FDI has played a significant role in chinas economic growth. vi)From 1980-1999 about 2.7% of chinas 9.7% yearly average of gross domestic product growth has been originated from fdi. vii)Foreign funded enterprise currently employ about 20 million Chinese workers, or about 10% of Chinas urban labour force. viii) 400 of the worlds largest 500 international companies have invested in China. ix)The FDI is invested largely in Chinas light and heavy industries, and in export processing. x) In areas such financial services, where FDI has so far been more modest, FDI has still played an important and growing role. Q. Briefly explain marketing of banks and insurance products in the USA a) The following are the steps taken by banks for marketing: 1. Middle market companies need extra support when they create new banking relationships 2. The bank should have a single contact point to resolve problems 3. The customer service associate mat either solves problems on his own or refers The customer to someone else in a clear hierarchy of problem solvers 4. The customer must always have the sense of dealing with a single institution 5. To provide creative tools that makes it easier for new customers to change banks or to add new services 6. Banks must recognize, above, all the middle market treasury officers have less time and fewer resources for cash management than their peers in larger organizations. 7. This brings in the need for a well designed, intuitive, and well integrated online portal, similar to the offering of a good personal bank but with more features and flexibility. 8. Banks that provide loan at the right time will tend to win more clients 9. Relationship managers for cross selling cash management products 10. While the size of an individual middle market account may not justify continuing high level product support, banks should leverage their experts more effectively. 11. Growth only by acquiring new customers is not always feasible. 12. When banks do come up with new products, the products often fail because they don't focus enough on the customer. 13. Internal structure changes can improve the of success 14. Banks should look for new insights from existing customer data 15. Successful bank innovation begins first by learning to look at things from the customers point Of view and then trying to solve a problem. Q4] a] Financial Services in UK The UK is both the leading global financial services centre. It has an unrivalled concentration of capital and resource capabilities which make many investors want to invest and do business there. The business environment in UK is flexible supportive innovative and dynamic with an outstanding track record and vast experience thus favoring financial services growth The under-35s are very important segment for marketing financial services in the UK. Products like pension, retirement planning, healthcare, insurance, and mortgaged products are currently popular in the UK market.

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Marketing of Banks in UK UK is one of the cheapest countries to bank in. The cost to the individual of running a typical current account in the UK is 70% lower than in similar countries. The marketing management process for banks involves the development of sales personnel, marketing programme support, customer relation and market performance. The success of banks in UK depends on how they promote their products online and how they meet customer specific requirements. Banks should use quantitative and qualitative research methods, websites analysis, customer feedback and user testing to deliver a customer focus experience satisfy the customers. The retail banking sector in UK has commercial banks which deal with individual customers. Retail banking in the UK is made up of Multiple products (deposits, credit cards, insurance, investment and securities) Multiple channels of distribution (call centers, branches, internet, ATM) Multiple Customer groups (consumer, small business and corporate) Banks benefit from the implementation of it and the new electronic delivery channels. For e.g. HSBC was the first to bring the concept of TV banking in the UK and Lloyds, Barclays and nationwide have excellent online banking facilities Marketing of Insurance in UK The UK insurance sector is an important part of the UK economy. There are two broad sectors in the Uk Insurance Market long term and general insurance. Long term insurance covers life insurance, pension annuities, and income protection insurance. General insurance covers motor insurance, accident and health insurance general liability insurance and pecuniary-loss insurance. The challenges for UK insurance industry are as follows The emergence of a more Knowledgeable Customer Database Increase in online purchasing and Trading Increase in volume of Information to manage New EU directives and accounting standards New pension framework of 2012

Marketing of Mutual Fund in UK The UK mutual fund industry has about 16000 funds. Attributes of fund performance image delivery service and reliability defines success in the mutual fund market. For Mutual fund in UK the prospectus must include the investment objective the type of securities purchased history of the fund rate of return risk and fluctuation. Mass media should be used as a brand recognition tool for gaining customers trust Advertisement should be generic and not linked to returns so that the ads can be used for longer time. Also every investor has a different need and objective. The funds for advertising and marketing are indirectly passed on to the final mutual fund investor. Q. Briefly explain the marketing of Bank and Insurance products in USA. Ans) Characteristics of Bank Products Marketing: Provides services Aimed to satisfy customers needs and wants Needs and wants may be non financial in nature Competitive element, efficiency and effectiveness Organizational objectives are still the driving force Commercial objective to make profit Social Objectives - Bank marketing strategies Financial institutions such as investment companies are directly competing with commercial banks. Banks need effective marketing strategies to retain their existing customers and attract new customers. nareshsukhani@gmail.com TYBFM - MFS

Although the environment for banks is more challenging, employing effective bank marketing strategies will enable a bank to grow and maintain profit 1. E-Newsletters o According to the website Bank Advisor, banks need to reach customers when they are not in the bank, because customers are using other channels to meet their banking needs. One example is to use teller machines in convenience stores not owned by the bank. Another example is online banking. Another option is e-newsletters. Banks can use them to educate their customers about improving their financial decisions and to educate customers about the banks' products and services. Social and Mobile Media o Banks need to take advantage of social media. According to the research company Nielsen, the use of Twitter grew 1,444 percent in 2008-2009, and time spent on Twitter grew 175 percent during the same time period. In addition, web visitors using a mobile device grew 34 percent from July 2008 to July 2009. Your bank can provide mobile personal finance applications to help customers manage and improve their financial situation. You can also use social media tools to help promote special deals. Fee Changes o To differentiate your bank from the competition, consider stopping charges for fees. Instead of fees, generate income by advertising other revenue-generating services such as financial counselling or long term-planning assistance. Innovate o Give away free money. Periodically place an extra $100 bill in ATMs. This will create a lot of conversation about the bank. Customer reclamation o One of the reasons customers leave a provider is because of a perceived attitude of indifference. Communicate with customers who have left you by giving them a compelling message indicating you want them back. Some will return.

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INSURANCE PRODUCT MARKETING Insurance marketing is basically just the marketing of insurance products. Marketing of this sort is an important tool when it comes to the business of insurance. The marketing of insurance readily happens in the life insurance department as well as the non-life insurance department. Online advertising is one marketing tool that is worth the money. As the Internet takes on more power and influence all of the time, having a web presence will put you on the cyber map and get you noticed. It has been found through studies that 75 percent of all households have access to a computer and Internet resources. Find out what you need to do in order to get online before that percentage gets any higher! Block line advertising in trade journals, industry publications and periodicals is the way to go. This is because industry professionals read these publications to keep in the know. You are an industry professional so you need to get your business in one or more of these publications as well. Television ads and print ads are excellent forms of insurance marketing. However the downside is that both can be very expensive. You may go way beyond your advertising budget if you decide to use either one of these methods. However if you can afford it then your best course of action is to either consult with an external advertising agency or hire one to help you develop a campaign that is conducive to what you need most. Your goal of course is to gain exposure and to increase your sales. If you decide that print ads would suit your style and your budget just fine then colored ads are the most expensive to produce but can be very appealing to the eye. You can also choose a reverse type for your advertisements. Think back to what black and white television looked like. The ad would have white lettering on a stark black background. The black background sets off the lettering and gives it that catchy effect.

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