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BA7203 Marketing Management

UNIT – I
Par t A

1. Differentiate between Selling and Marketing (May / June 2006)

Marketing Selling
Focuses on customer needs Focuses on seller needs
Customer enjoys supreme importance Product enjoys supreme Importance
converting customer needs into product Converting product into cash
Profits through customer satisfaction Profits through sales volume
Principle of caveat vendor is followed principle of caveat emptor is followed

2. What do you mean by marketing process? (MAY/JUNE 2006)

It is a process that a firm should find a way to discover unfulfilled customer needs and bring to market
products that satisfy those needs. The process of doing so can be modeled in a sequence of steps which includes
situational analysis, marketing strategy, marketing mix elements and implementation and control.

3. What is marketing? (NOV/DEC 2006)

Marketing is a social and managerial function that attempts to create, expand and maintain a collection of
customers. It attempts to deliver demand satisfying output through profitable exchanges.

Marketing is the process of raising the standards of living, by identifying the existing problems and unsatisfied
needs of people and then satisfying that need with a product/service that delivers value to the customer.

4. What are the factors affecting marketing environment? (NOV/DEC 2006)


 Size and Growth
 Profitability
 Cost structure
 Distribution systems
 Market trends
 Key Success factors

5. What is global environment? (MAY/JUNE 2007)

Global firms plan, operate and coordinate their activities on a worldwide basis, for which they
need to study global environment. Global environment has such factors as political, legal, social, cultural
and economic forces that fundamentally affect the strategic business positions at global level.

6. Define introduction stage of PLC. (MAY/JUNE 2007)


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Introduction is the early stage, when product is introduced in market, sales revenue begins to grow
but the rate of growth is very slow.Profits may not be there as there is low sales volume, large production
and distribution costs. It may require heavy advertising and sales promotion. Products are brought
cautiously on a trail basis.

7. What are the socio-economic factors in segmentation? (MAY/JUNE 2007)

Socio-economic factors in segmentation include social class, lifestyle, occupation, income,


density, and family life cycle and investment trends of buyersZ

8. Define the ’Marketing Concept’. (NOV/DEC 2007)

Marketing is a societal process that is needed to discern consumers' wants; focusing on a product/service to
those wants, and to mould the consumers towards the products/services. Marketing is fundamental to any
businesses growth. The marketing teams (Marketers) have the task to create the consumer awareness of the
products/services through marketing techniques; if a business does not pay attention to their products/services and
their consumers' demographics, the business would not be able to endure longevity.

9. What is Marketing? (May / June 2008)

Refer Question Number 3 (Nov / Dec 2006)

10. What is production concept? (NOV/DEC 2008)

The production concept is the philosophy that consumers will favor products that are available and highly
affordable.This philosophy states that any amount of goods produced will sell if it is available and affordable to
customers.When firms adopt this concept, generally they produce goods on a mass production level, to be able to
produce large quantities, therefore make it more available; investing in technology is essential, to reduce the costs
of production and make it more affordable.The management is required to focus mostly on improving the
production and distribution of a part

11. What is selling concept? (NOV/DEC 2008)

Selling concept's aim is to convert the product into cash.Firms adopting this philosophy do not produce
goods and services in line with people's need and wants because they try to create demand for that particular
product themselves.The management should concentrate on finding ways to increase production. Also firms
adopting this concept must invest a lot financially, in conducting research and in building relationships with their
customers.The achievement of sales and marketing objectives of the firm by the salesperson by providing services
and solutions to customers' problems in addition to taking orders

12. What is a market? What are the types of market? (MAY/JUNE- 2009)

In marketing, the term market refers to the group of consumers or organizations that is interested in the
product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the
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product.A public place where buyers and sellers make transactions, directly or via intermediaries. Also sometimes
means the stock market.

Types of Market:

 Niche market
 Farm market
 Stock market
 Commodity market
 Currency market
 Black market
13. Define marketing. (June 2010)

“The process of planning and executing conception, pricing, promotion and distribution of ideas, goods and
services to create exchanges that satisfy individual and organizational goals.” - The American Marketing
Association

14. What are the factors affecting marketing environment? (June 2010)

Micro-Environment:

The micro-environment of an organization can best be understood as comprising all those Other
organizations and individuals who directly or indirectly affect the activities of the Organization. The following key
groups can be identified:

• Customers

• Intermediaries

• Suppliers

• Other stakeholders

Macro-Environment

The macro-environment comprises general trends and forces which may not immediately affect the
relationships that a company has with its customers, suppliers and intermediaries but sooner or later, macro-
environmental change will alter the nature of these relationships.

 The Political Environment

 The Social and Cultural Environment

 The Demographic Environment.

 The Technological Environment

15. What are objectives of Marketing? (June 2011)


1. To satisfy the customer,
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2. To achieve organizational goals and objectives


3. Delivering the desired satisfactions.
4. Anticipate the needs and wants of consumers and
5. To satisfy these more effectively than competitors.

16. What is meant by Micro environment? (June 2011)

Micro-Environment:

The micro-environment of an organization can best be understood as comprising all those Other
organizations and individuals who directly or indirectly affect the activities of the Organization. The following key
groups can be identified:

• Customers

• Intermediaries

• Suppliers

• Other stakeholders

17. List any two difference between consumer and industrial market characteristics(Nov / Dec 2010)

Industrial Market Consumer Market


18. Define Mass
Number of buyers are Few and limited. Number of buyers are large
customization.

It Market research is more useful and Market research is not reliable in is the ability of the
company to prepare
reliable in the pricing of the industrial analyzing the price of the goods.
on a mass basis
goods individually
designed products,
services, programs and communications. (DeBeers)

19. What is kiosk marketing?

A kiosk is a small building or structure that might house a selling or information unit. It describes newsstands,
refreshment standing catrs, computer linked vending machines

20. What is synchromarketing?

It is to find ways to alter the pattern of demand through flexible pricing, promotion and other incentives.

Part B

1. Why is it necessary for a marketer to study the marketing environment. What arc the environmental
variables to be taken into consideration? (MAY/JUNE 2006).
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Marketing does not occur in a vacuum. The marketing environment consists of external forces that directly
and/or indirectly impact the organization. Changes in the environment create opportunities and threats for the
organizations. To track these external forces a company uses environmental scanning. Continual monitoring of what
is going on. Environmental scanning collects information about external forces. It is conducted through the
Marketing Information System.

Environmental analysis determines environmental changes and predicts future changes in the environment.
The marketing manager should be able to determine possible threats and opportunities from the changing
environment; This will help avoid crisis management

Six Environmental Forces

 Societal
 Regulatory
o Political
o Legal
o Regulatory
 Competitive
 Technology
 Natural

Environmental variables:

The Internal Analysis of strengths and weaknesses focuses on internal factors that give an organization
certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies
that give the firm an advantage in meeting the needs of its target markets.Any analysis of company strengths should
be market oriented/ customer focused because strengths are only meaningful when they assist the firm in meeting
customer needs.

Weaknesses refer to any limitations a company faces in developing or implementing a strategy. Weaknesses
should also be examined from a customer perspective because customers often perceive weaknesses that a company
cannot see. Being market focused when analyzing strengths and weaknesses does not mean that non-market
oriented strengths and weaknesses should be forgotten. Rather, it suggests that all firms should tie their strengths
and weaknesses to customer requirements. Only those strengths that relate to satisfying a customer need should be
considered true core competencies.

The following area analyses are used to look at all internal factors affecting a company:

 Customer analysis: Segments, motivations, unmet needs


 Competitive analysis: Identify completely, put in strategic groups, evaluate performance, image, their
objectives, strategies, culture, cost structure, strengths, weakness
 Market analysis: Overall size, projected growth, profitability, entry barriers, cost structure, distribution
system, trends, key success factors
 Environmental analysis: Technological, governmental, economic, cultural, demographic, scenarios,
information-need areas
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 Goal: To identify external opportunities, threats, trends, and strategic uncertainties

An environmental analysis is the four dimension of the External Analysis. The interest is in environmental
trends and events that have the potential to affect strategy. This analysis should identify such trends and events and
the estimate their likelihood and impact. When conducting this type of analysis, it is easy to get bogged down in an
extensive, broad survey of trends. It is necessary to restrict the analysis to those areas relevant enough to have
significant impact on strategy.This analysis is divided into five areas: economic, technological, political-legal,
socio-cultural, and future.

2. Choose a company of your choice and explain how micro environmental factors affecting its operations.
(NOV/DEC 2006)

Micro Environmental Factors:

These are internal factors close to the company that have a direct impact on the organizations strategy. These factors
include:

Customers

Organizations survive on the basis of meeting the needs, wants and providing benefits for their customers.
Failure to do so will result in a failed business strategy.

Employees

Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning
process of an organization. Training and development plays an essential role particular in service sector marketing
in-order to gain a competitive edge. This is clearly apparent in the airline industry.

Suppliers

Increase in raw material prices will have a knock on affect on the marketing mix strategy of an organization.
Prices may be forced up as a result. Closer supplier relationships are one way of ensuring competitive and quality
products for an organization.

Shareholders

As organization require greater inward investment for growth they face increasing pressure to move from
private ownership to public. However this movement unleashes the forces of shareholder pressure on the strategy of
organizations. Satisfying shareholder needs may result in a change in tactics employed by an organization. Many
internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face
pressures I mm shareholders to turn in a profit. In a market which has very quickly become overcrowded many will
fall.
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Media

Positive or adverse media attention on an organizations product or service can in some cases makes or
breaks organizations. In the UK the adverse publicity the Millennium Dome has received has had impact on
projected sales figures. Wharf dale who recently entered the DVD market has received many awards from industry
magazine resulting in an increased demand for this product and most importantly an increased awareness of the
Wharf dale brand.

Consumer programmes on TV like the BBC's Watchdog with a wider and more direct audience can also
have a very powerful and positive impact, forcing organizations to change their tactics.

Competitors

The name of the game in marketing is differentiation. What benefit can the organization offer which is better
then their competitors? Can they sustain this differentiation over a period of time from their competitors?
Competitor analysis and monitoring is crucial if an organization is to maintain its position within the market.

3. Discuss the role and importance of marketing department with other functional areas in an organization.
(NOV/DEC 2006)

The marketing department must act as a guide and lead the company's other departments in developing,
producing, fulfilling, and servicing products or services for their customers. Communication is vital. The marketing
department typically has a better understanding of the market and customer needs, but should not act independently
of product development or customer service. Marketing should be involved, and there should be a meeting of the
minds, whenever discussions are held regarding new product development or any customer-related function of the
company.

It is very important that the marketing department get input from many people within the company. Not only
does providing input help the rest of the company understand and support the marketing efforts, it also provides
some invaluable insights into what customers want and new ideas that may have slipped past the rest of the
company.

Because the goals and guidelines set by the marketing department should, by design, be in line with the vision
and mission of the company, upper management should be involved in and endorse cooperation by all departments
in following and implementing the plan and integrating a consistent message into all communication channels.So,
the marketing department studies the market and the customers, determines the best way to reach those customers,
and works with the rest of the company to help determine the new product needs of the market and represent the
company in a consistent voice.
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Marketing is perhaps the most important activity in a business because it has a direct effect on profitability and
sales. Larger businesses will dedicate specific staff and departments for the purpose of marketing. It is important to
realize that marketing cannot be carried out in isolation from the rest of the business. For example:

The marketing section of a business needs-to work closely with operations, research and development, finance
and human resources to check their plans are possible. Operations will need to use sales forecasts produced by the
marketing department to plan their production schedules.Sales forecasts will also be an important part of the
budgets produced by the finance department, as well as the deployment of labor for the human resources
department.A research and development department will need to work very closely with the marketing department
to understand the needs of the customers and to test outputs of the R&D section.

4. Explain marketing concept and compare with selling concept. Give examples. (MAY/JUNE 2007)

The marketing concepts holds that the key to achieving organizational! goals consists of the
company being more effective than competitors j in creating, delivering, and communicating superior
customer value to its chosen target markets. The basic difference between marketing .and selling lies in the
attitude towards business. The selling concept hikes an inside-out perspective.

It starts with the factory, focuses on the company's existing products, .and calls for heavy selling and
promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with n well-
defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces
profits through Creating customer satisfaction.

Marketing Selling
Focuses on customer needs Focuses on seller needs
Customer enjoys supreme importance Product enjoys suprem Importance
converting customer needs into product Converting product into cash
Profits through customer satisfaction Profits through sales volume
Principle of caveat vendor is followed principle of caveat emptor is followed

5. Discuss marketing environment on today's competitive world. (MAY/JUNE 2007)

The organization operates within the larger framework of the external environment that shapes opportunities
and poses threats to the Organization. The external environment is a set of complex, rapidly changing and
significant interacting institutions and forces that affect the organization's ability to serve its customers. External
forces are uncontrolled by an organization, but they may be influenced or it fleeted by that organization. It is
necessary for organizations to understand the environmental conditions because they interact with Strategy
decisions. The external environment has a major impact on the determination of marketing decisions. Successful
organizations can in their external environment so that they can respond profitably id unmet needs and trends in the
targeted markets.Organizations closely monitor their customer markets in order to adjust to changing tastes and
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preferences. A market is people or organizations with wants to satisfy, money to spend, and the willingness to spend
it. Each target market has distinct needs, which need to be monitored. It is imperative for an organization to know
their customers, how to reach them and when customers' needs change in order to adjust its marketing efforts
accordingly. The market is the focal point for all marketing decisions in an organization.

Consumer markets are individuals and households that buy goods and services for personal consumption.
Business markets buy goods and services for further processing or for use in their production process. Reseller
markets buy goods and services in order to resell them at a profit. Government markets are agencies that buy goods
and services in order to produce public services or transfer them to those that need them. The federal government is
the largest buyer in the United States. International markets consist of buyers in other countries.

The marketing environment surrounds and impacts upon the organization. There are three key perspectives
on the marketing environment, namely the 'macro-environment,' the 'microenvironment' and the 'internal
environment'.

The micro-environment

This environment influences the organization directly. It includes suppliers that deal directly or indirectly,
consumers and customers, and other local stakeholders. Micro tends to suggest small, but this can be misleading. In
this context, micro describes the relationship between firms and the driving forces that control this relationship. It is
a more local relationship, and the firm may exercise a degree of influence.

The macro-environment

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

The internal environment

All factors that are internal to the organization are known as the 'internal environment'. They are generally
audited by applying the Five Ms' which are Men, Money, Machinery, Materials and Markets. The internal
environment is as important for managing change as The external. As marketers we call the process of managing
internal change 'internal marketing. Essentially we use marketing approaches to aid communication and change
management.

The external environment can be audited in more detail using other approaches such as SWOT Analysis,
Michael Porter's Five Forces Analysis or PEST Analysis.

6. Factors considered under environment analysis to a business. (NOV/DEC 2007)


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Refer to Question Number 1 (May/ Jun 2006)

7. Explain marketing environment for the business enterprise of consumer goods.(MAY/JUNE 2008)
Refer to Question Number 1 (May/ Jun 2006)

8. How does the subject marketing has interface with other functional areas?
(MAY/JUNE 2008)

 The relationship between marketing and other functional areas of the business is important for everyone to
understand in order to facilitate the coordination of firm’s business.
 For non-marketing people the understanding is important to ensure the interactions flow smoothly and
effectively.
 In the financial area, decisions made on credit, accounts receivables and accounts payable have an effect on
the scope of marketing.
 The engineering area similarly makes strategic decisions affecting marketing. The quality of the final
product is of course directly related to engineering decisions.
 Marketing may also work with personnel department particularly in areas as establishing appropriate job
descriptions and communicating the firms need to the people most qualified to fill positions.
 Marketing and legal departments must interact on issues as the price of the product, terms of sale, content of
advertising messages, wording of patents and warranties.

9. “The Market place isn’t what it used to be “ – Discuss (Nov / Dec 2008)

A Market place is the space, actual or metaphorical in which a market operates the term is also used in a
trademark law context to denote the actual consumer environment. i.e the real world in which products and services
are provided and consumed.A Marketplace is a location where goods and services are exchanged. The traditional
market square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is
very old and countless such markets are still in operation around the whole world.

By becoming a member of a marketplace companies get instant access to thousands of prospective buyers and
supplier. An average marketplace has over 100 thousand members. This gives an opportunity to expand business by
findings new customers and suppliers from this new community. Workings closely with the members of the new
community companies get every chance to increase their business dramatically.

For buyer participants a marketplace offers:

 Lower transaction costs – streamlined processing


 Access to new suppliers – Marketplace participants removes geographical barriers and provides access to
new suppliers
 Time Savings provides for faster approval , ordering processes and delivery tracking.

For Suppliers

 Reduced inventory cost-Clearer visibility and forecasting ability allow companies considerably reduce
inventory cost
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 Access to new buyers and markets - Marketplace provides new sales channel which opens up many new
opportunities for suppliers
 Increased sales-Wider Market indicates Increase in Sales. Which results in increased revenue.
 Reduced overhead costs
 Reduced order processing cost
 Reduced sales and support costs

10. Explain the Marketing Environment in detail Refer to Question Number 1 (May / June 2006)
11. Marketing planning and control can be considered as the nerve center for Marketing Management.’
Elaborate. (MAY/JUNE- 2009)

The process of defining the action steps, priorities and schedules by which the marketing strategy will be
implemented and making . sure that the company is achieving the objectives that are stated in the marketing plan
within the determined budget.

The following steps and activities of Marketing planning and control can be distinguished and considered
most important for Marketing Management.

Research of marketing mix and control:

Like the strategic marketing planning process, this process also begins with research and analysis of the marketing
and consumer environment. Besides, research for the marketing mix is necessary, which is focused on sensitivity
analysis to various elements of the marketing mix, analysis for reseller satisfaction, market response, goal
achievement.

Financial forecasting:

Before the annual objective can be determined, the financial situation has to be forecasted. On the revenue side it
shows forecasted sales volume and average realized price, on the expense side it shows the forecasted cost of
production, physical distribution and marketing. The difference is the expected profit.

Objectives setting:

The annual objectives can be stated for the one year strategy (for example, increase market share by x% or improve
brand awareness by y% in that year) as well as for specific statements concerning marketing activities. An example
of a specific statement is: decrease cost of sales force as a percentage of sales, improve advertising awareness or
improving company image. These statements have to be quantified and a time horizon has to be set.

Marketing strategy and action program:

When the objectives have been set, the marketing managers have to refine the strategic marketing plan to the annual
marketing plan. Specific marketing tactics have to be developed besides the action programs. The action programs
contain the marching orders in response to the question “How will we get there?”, and the actual steps by which
strategies will be implemented to reach the established objectives.

Control
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The last step of the marketing planning & control process is control, which forms a distinct process itself. The
control of the annual marketing plan will be handled by the management of the PMC.

To implement the marketing strategy, marketing management has to decide what level of marketing expenditures
is necessary to achieve the marketing objectives. The total budget has to be allocated among the several marketing
activities and tools in the marketing mix. During the implementation of activities, the company has to review the
process of marketing and sales activities regularly throughout the year. These reviews provide an opportunity to
listen to weak signals and to redirect any parts of the planned action program that are off target.

12. Choose a company of your choice and explain how internal environmental factors affect the marketing
operations. (June 2010)

Refer to question Number 1 (May/ June 2006)

13. Explain the Core Concept of Marketing (June 2011)

CORE CONCEPTS OF MARKETING

Needs, wants, and demands; products (goods, services and ideas); value, cost and satisfaction: exchange and
transaction: relationships and networks: markets: and marketers and prospects.

a) Needs

Describe basic human requirements such as food, air, water, clothing, and shelter.

b) Want

Needs become wants when they are directed to specific objects that might satisfy the need.

c) Demand

Are wants for specific products backed by an ability to pay.

d) Product

Is any offering that can satisfy a need or want, such as one of the 10 basic offerings of goods, services, experiences,
events, persons, places, properties, organizations, information, and ideas.

e) Value

As a ratio between what the customer gets and what he gives. The customer gets benefits and assumes costs, as
shown in this equation:

Value Benefits

= ----------
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Costs

= Functional benefits + emotional benefits

-----------------------------------------------------------------------------------

Monetary costs + time costs + energy costs + psychic costs

F) Exchange

• Exchanges are carried out by business firms, and also by no business organizations and even individuals.

• Four conditions must exist for an exchange to be able to occur:

– Two or more people or organizations must be involved.

– The parties must be involved voluntarily.

– Each party must have something of value to exchange, and the parties must believe they will each
benefit from the exchange.

– The parties must be able to communicate with each other.

g) Marketing Channels:

To reach a target market, the marketer uses three kinds of marketing channels. Communication channels
deliver messages to and receive messages from target buyers.They include newspapers, magazines, radio,
television, mail, telephone, billboards,posters, fliers, CDs, audiotapes, and the Internet. Beyond these,
communications are conveyed by facial expressions and clothing, the look of retail stores, and many other media.
Marketers are increasingly adding dialogue channels (e-mail and toll-free numbers) to counterbalance the more
normal monologue channels (such as ads)

The marketer uses distribution channels to display or deliver the physical product or service(s) to the buyer
or user. There are physical distribution channels and service distribution channels, which include warehouses,
transportation vehicles, and various trade channels such as distributors, wholesalers, and retailers. The marketer
also uses selling channels to effect transactions with potential buyers. Selling channels include not only the
distributors and retailers but also the banks and insurance companies that facilitate transactions. Marketers clearly
face a design problem in choosing the best mix of communication, distribution, and selling channels for their
offerings.

h) Supply Chain

Whereas marketing channels connect the marketer to the target buyers, the supply chain describes a longer
channel stretching from raw materials to components to final products that are carried to final buyers. For example,
the supply chain for women’s purses starts with hides, tanning operations, cutting operations, manufacturing, and
the marketing channels that bring products to customers. This supply chain represents a value
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delivery system. Each company captures only a certain percentage of the total value generated by the supply chain.
When a company acquires competitors or moves upstream

or downstream, its aim is to capture a higher percentage of supply chain value.

i) Competition

Competition, a critical factor in marketing management, includes all of the actual and potential rival offerings and
substitutes that a buyer might consider.

1. Brand competition: A company sees its competitors as other companies that offer similar products and services
to the same customers at similar prices. Volkswagen might see its major competitors as Toyota, Honda, and other
manufacturers of medium price automobiles, rather than Mercedes or Hyundai.

2. Industry competition: A company sees its competitors as all companies that make the

same product or class of products. Thus, Volkswagen would be competing against all other car manufacturers.

3. Form competition: A company sees its competitors as all companies that manufacture products that supply the
same service. Volkswagen would see itself competing against manufacturers of all vehicles, such as motorcycles,
bicycles, and trucks.

4. Generic competition: A company sees its competitors as all companies that compete for the same consumer
dollars. Volkswagen would see itself competing with companies that sell major consumer durables, foreign
vacations, and new homes.

5. Marketing Myopia :Sellers who concentrate their thinking on the physical product instead of the customer’s
need are said to suffer.
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6. Opportunity Cost:The product’s value and price before making a choice. According to Derose, value is “the
satisfaction of customer requirements at the lowest possible cost of acquisition, ownership, and use”.

14. Critically analyse the importance of marketing department relationships with other functional
departments in the organization. (June 2010)

MARKETING AND OTHER FUNCTIONS

All marketing decisions whether related to products, pricing, distribution, or promotion are affected by other
business functions. Similarly, most other business decisions ( R&D, Production) and the overall corporate strategy
are strongly influenced by a variety of marketing consideration and inputs. A comprehensive understanding of the
web of interrelationships between marketing and the other business requires predominantly a recognition of the
importance of identifying and understanding the nature and magnitude of these sets of interrelationships.

Finance & Marketing

All well conceived marketing plans include major financial dimensions. Cost and profit history for the business
(a brand, a product, product line) and a financial statement and budgets of each business and its related marketing
strategies are components of any marketing plan. Profitability analysis & budgeting are key aspects of market
planning. Marketing decisions to be viewed as Investment decisions. Financial concepts and tools are integral part
of marketing programs (Credit sales) The finance function of the business usually controls the cost, money going
in and out of the business. They would keep a record of cost going out the business, and calculate whether the
business is making a profit or loss. The finance department is responsible for sending invoices to customers,
clearing Cheque which is received, and also preparing payrolls so they can pay staff salaries. Anything to do with
money is dealt by the finance department in any organization. The finance department work with the marketing
department to help them with their finances. The finance department allocates the budget to support various
activities of the marketing department carry out So for example, if the marketing department at Tesco’s want to
carry out a promotion through direct mail, they would ask the finance department first; from there the finance
department will decide if they are able to fund this type of direct mail promotion. Tesco’s would not be able to carry
out this activity without consulting the finance department, because the money only goes in and out of the finance
department. Furthermore when the marketing departments need money for researching and development to design
new products to attract potential customers, they would again consult the finance department who would allocate
suitable funds, so that the marketing department can carry out this activity efficiently. The marketing department at
Tesco’s may also need money if they want to distribute materials such as posters with special offers, if they don’t
consult the finance department about this activity, then the marketing department at Tesco’s could be losing money .
Marketing approach to financial documents offers a new perspective often lacking in the financial community. For
example

1. Utilization of the annual report and other financial for marketing

2. Measurement of management tradeoff between risk and expected return utilizing conjoint analysis
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3. Assessment of the market response functions to changes in prices, mode of payment , type and level of
discount and credit.

4. Application of financial performance measures to relevant market segments and products.

5. Impact of marketing activities on investors expectations

Production & Marketing

Production capabilities determine the number and type of products to be marketed

Accurate sales forecast is also possible. When uncertainties & fluctuations are predicted

• Change the current production capacity

• Influence the nature, level or timing of demand

The strategy can be achieved by appropriate use of marketing strategies such as advertising, consumer and trade
promotion and deals and deletion or addition of products.

The interdependency is evident in the development of new products. The size of new production facilities,
depends on marketing research based estimates of the demand for the new products and the likely time and space
distribution. It is important to identify the basic conflicts between the two functions. Production strives for efficient
production runs which imply long runs, few models, relatively simple, model to produce, and reasonable quality
control. Marketing would see shorter production runs with many models, they are less concerned about the ease of
production and would like to minimize the possibility of any product failure.

Customer Service & Marketing

Customer and industrial products require pre & post purchase services. Service department is often address
for customer complaints, Number and type of complaints are important inputs for marketing strategies, product
modification, and new product development . Regular & Explicit communication should be established between
service, marketing and other relevant functions.

Procurement & Marketing

Procurement is the broader functions of materials management. Many firms have been modifying their
products to substitute scarce raw materials with more available, cheaper or legally acceptable ones. Marketing
research on customer's acceptability for the substituted products is vital for input for procurement planning.
Procurement research aimed at the identification and evaluation of new marketing research. Marketing plan require
input from procurement plans to introduce new materials or anticipated changes in production output due to
changes in the supply of various raw materials.

R&D and Marketing


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The primary R&D and Marketing interface centre around new product development effort of the firm. New
product development stages right from idea generation to final product development requires close interaction.
Realistic expectations and Organizational climate encourages which encourage the interface between these two
functions and stimulates innovation are essential ingredients for successful new product development.

Personnel & Marketing

Personnel –Hiring, training and management of appropriate marketing personnel. Marketing need to
collaborate with personnel in developing job descriptions, screening candidates designing training programs and
incentive systems.

Management Information System

Since the major implication of the independencies between marketing and the other business functions are
with respect to the required information and its role in the firm’s decisions making process, the design of marketing
information systems should be undertaken as in integral part of a broader user oriented management information
system. Such a system incorporates the marketing information ( eg slaes, share, consensus, attitudes etc) with other
relevant information ( company sales, cash flow needs, macroeconomic projections, etc) providing a single
organized and timely source of information to the relevant decision makers. To the extent that the firm’s
management information system includes information and models of competitive behavior, marketing can provide
the necessary vehicles for the gathering, analysis and interpretation

UNIT – II

Part A

1. What is-de-marketing? (MAY/JUNE 2006)

De-marketing aimed at limiting growth; practiced, for example, by governments to conserve natural resources, or
by companies unable to serve adequately the needs of all potential customers.Marketers attempt to reduce the
demand for a product when the demand for the product is greater than the manufacturer's ability to produce it. De-
marketing strategies involve raising prices, reducing advertising or promotion activities, or eliminating product
benefits. De-marketing does not aim to destroy the demand but only to lower it to make it level with the ability to
produce the product.

2. What are the steps of consumer decision making? (MAY/JUNE 2006)

Become Aware of a Problem or Opportunity: The consumer becomes aware of an unfulfilled need, such as
replacing a regularly purchased item such as toothpaste or buying a new SUV (sports utility vehicle) to reach
remote areas - and perhaps gain peer approval.
18

Search for Information: Gathering information from various sources in order to make a better-informed decision.
For example, the SUV buyer may consult with others who own one and conduct research on the Web (manufacturer
sites, online automobile magazines, etc.).

Evaluate Alternatives: Once the choices have been narrowed, the consumer compares them based on the criteria
that matter most. Continuing with the SUV example, the consumer may decide that the SUV must be both
comfortable on the highway and agile in the back country, be pleasing to look at and convenient for loading
mountain bikes and other gear.

Decide on what to buy and then purchase it. At this stage, the SUV buyer may look for the best dealer, based on
such factors as service, location and price.

Reassess the purchase. The bigger the purchase, the more the consumer will reconsider whether or not the decision
was correct. The SUV buyer may periodically think about his or her satisfaction with the vehicle, compare it to
other SUVs while driving, and tune in to passenger comments

3. What do you understand by the term product mix? (MAY/JUNE 2006)

The product is the most important aspect of the marketing mix. The product can be a service or even a holiday
destination. Products have both tangible and intangible benefits. Tangible benefits include benefits which can be
measured such as the top speed of a car. Intangible benefits are benefits that cannot be measured such as the
enjoyment the customer will get from the product. It is important that the product is changed as necessary to bring it
up to date and prevent it from being overtaken by competitors

4. What are the distinguishing characteristics of services vis-a-vis products? (MAY/JUNE 2006)
 Intangibility the service cannot be touched or viewed, so it is difficult for clients to tell in advance what
they will be getting;
 Inseparability of production and consumption the service is being produced at the same time that the
client is receiving it (eg during an online search, or a legal»consultation);
 Perishiliility unused capacity cannot be stored for future use. For example, spare seats on one aero plane
cannot he transferred to the next flight, and query lire time-, ii tin- iclcience desk cannot be saved up until
there is n bli .y period
 Heterogeneity (or variability): services involve people, and people are all different. There is a strong
possibility that the same enquiry would be answered slightly differently by different people (or even by the
same person at different times). It is important to minimize the differences in performance (through training,
standard-setting and quality assurance).

5. What is service marketing? (MAY/JUNE 2007)

Services are separately identifiable, intangible activities which provide want satisfactions when
marketed to consumers and industrial users and which are not necessarily tied to the sale of product or
19

another service. The following are the marketing tools used in service marketing-place, people,
equipment, communication, materials, symbols and price.

6. How does ’Franchising’ help in service marketing? (NOV/DEC 2007)

Franchising has become a popular way to expand delivery of an effective service concept to multiple sites
without the level of investment capital that would be needed for rapid expansion of company-owned and managed
sites. Franchises can often expand faster than company operated outlets' not only for financial reasons but also
because locally based franchisers usually have established business networks and experience in dealing with
government officials.

7. Who is a customer? (MAY/JUNE 2008)

A customer, also client, buyer or purchaser is the buyer or user of the paid products of an individual or
organization, mostly called the supplier or seller. This is typically through purchasing or renting goods or services.

8. Who is a satisfied customer? (MAY/JUNE 2008)

A delighted customer is a satisfied customer. Satisfied customer is more likely to acquire additional product/
services, and therefore become a profitable customer. Satisfied customer is also more likely to maintain and group
the relationship over an extended period of time.

9. State STP strategy. (NOV/DEC 2008)

To identify groups or segments of potential customers (individuals, organizations, buying centers, etc.) whose
desired values from products and services within groups are similar and whose values between groups are
different.To select one or more groups as a target segment who respond favorably to a current or prospective
marketing offering.To achieve a desired positioning in the minds of potential segment customers (defined broadly,
as above) with a profitable marketing program.

10. Define reference groups. (NOV/DEC 2008)

A reference group is a sociological concept referring to a group to which another group is compared. Reference
groups are used in order to evaluate and determine the nature of a given individual or other group's characteristics
and sociological attributes. Reference groups provide the benchmarks and contrast needed for comparison and
evaluation of group and personal characteristics.Reference groups act as a frame of reference to which people
always refer to evaluate their achievements, their role performance, aspirations and ambitions. A reference group
can be either from a membership group or non-membership group.

11. Distinguish among five types of customer needs. (MAY/JUNE- 2009)


 Functional needs: Those needs which satisfy a physical / functional purpose e.g. Soap
 Social needs: Needs that allow identification with desired group e.g. Logos
 Emotional needs: Those needs which, create appropriate emotions, e.g. Joy on getting gift
 Epistemic needs: The need for knowledge / information e.g. Newspaper
 Situational needs: The needs, which are contingent on time / place e.g. Emergency repairs
12. What is the difference between company demand and a company sales forecast?
20

(MAY/JUNE- 2009)

Company demand is the company’s share of market demand.This can be expressed as a formula:

Company Demand= Market Demand / Company’s Market Share

A company’s share of market demand depends on how its products, services, prices, brands and so on are
perceived relative to the competitors. All other things being equal, the company’s market share will depend on the
size and effectiveness of its marketing spending relative to competitors.The Company Sales Forecast is the
expected level of company sales based on a chosen marketing plan and an assumed marketing environment.

13. Explain customer perceived value (CPV). (MAY/JUNE- 2009)

Value of a product within the context of marketing means the relationship between the customer’s
expectations of product quality to the actual amount paid for it. It is often expressed as the equation:

Value = Benefits / Price or alternatively:

Value = Quality received / Expectations

CPV is customer’s opinion about product value to their perception. It may have little or nothing to do with the
product’s market place, and depends on the product’s ability to satisfy his or her needs or requirements.

14. Differentiate Pull strategy and Push strategy. (MAY/JUNE- 2009)

The pull strategy relies on the manufacturer to spend a large amount of cash on advertising and promotion,
whereas the push strategy shares some of that burden with retailers.

A push strategy in marketing is used when there has been a development or improvement on a new product
which is unknown to the consumer. As there is no consumer demand in the product launch, the product and the
information are “pushed” to the consumer by distribution and promotion. In a “pull” system the consumer requests
the product and “pulls” it through the delivery channel.

15. What are the elements of promotion mix? 15 (Nov / Dec 2010)

a. Advertising

b. Public Relations

c. Personal Selling

d. Sales Promotion

16. What is consumerism? (Nov / Dec 2010)


21

It is a movement or a set of policies aimed at regulating the products, services, methods, and standards of
manufacturers, sellers, and advertisers in the interests of the buyer. "consumerism" is used to refer to the
consumerists movement, consumer protection or consumer activism.

17. Mention the factors involved in Michael.E.porter model for competitive analysis.
(June 2010)

18. Suggest any four strategies for services marketing (June 2010 )

Service Mix:

• Tangibles to be associated with intangibles

• Service Product is to be equated with the service provider

• Long term- relationship

Marketing mix for services

• Marketing should occur at all levels

• Establish direct contact with the customers

• Use high-quality personnel for marketing job

• Creation of loyalty

• Ensure quick resolving of problems

• Brand the services offered

• Provision of improved services at lower cost

19. Mention the tools in services Marketing Mix(June 2011)


22

The service marketing mix comprises of 7 p’s.


• Product
• Price
• Place
• Promotion
• People
• Process
• Physical evidence.

20. What do you mean by Frontal Attack?

This strategy is used when the challenger masses its competitive forces right up against those of the opponent by
attacking its competitor’s strengths rather than its weakness. For this to succeed, the challenger needs a strength
advantage over the opponent.

21. What do you mean by Flank Attack?

This strategy is used when the challenger sets its sights on its target’s weakest points.

22. What do you mean by Encirclement Attack?

It is used only by well – financed firms. It involves an attempt to capture a wide slice of the competitors’
market through a grand offensive on several broad fronts.

23. What do you mean by Bypass Attack?

It avoids any belligerent move directed against competitors’ territory. It involves bypassing competitors and
attacking easier markets.

24.What do you mean by Guerilla Attack?

It involves making small, intermittent attacks on different territories of the opponent. A guerilla attacker uses
both conventional and unconventional means of attacking the opponent. These might include reflective price
cuts, intense promotional bursts and occasional legal actions.

Part B

1. What key strategic issues are faced by traditional "bricks-and-mortar" retailer such as Wal-Mart, Kmart
and Office Depot when they go online to sell products?(NOV/DEC 2006)

It is essential that different firms in the same business not attempt to compete on exactly the same variables. If
they do, competition will invariably degenerate into price-there is nothing else that would differentiate the firms.

There are many obstacles these companies need to face when they go on-line for selling their products. The
following obstacles need to be avoided and accordingly proper strategic planning need to be adopted..

 Reach
 Concerns about privacy
 Educational issues
23

 Costs
 Language
 Government Language
 Cultural Obstacles
 Payment Issues

Developing a proper website is also a must for online marketers before they launch a product across borders.
The various strategic issues need to be keep in mind are:

 Speed vs. aesthetics


 Keeping users on the site
 Information collection

The Companies need to build and construct an effective channel structure and membership issues so that ail the
products manufactured by these companies would be reached safety to the consumer's on- time without any damage
and discrepancies. This is also a major strategic issue the companies need to keep in mind.

 Paths to the consumer


 Potential channel structures
 Criteria in selecting channel members
 Piggy-backing strategy
 Parallel distribution
 Evaluating channel performance

ii) Providing customer service appears to be one of the primary challenges for Internet marketers.
What implications does this have for their "bricks-and- mortar" companies? (NOV/DEC 2006)

 Use technology to create an immediate, tangible benefit for the consumer


 Make the technology easy to use
 Execution matters: prototype, test, and refine.
 Recognize that customers' response to technology varies.
 Build systems that are compatible with the way customers make decisions.
 Study the effects of technology on what people buy and on how they shop.
 Coordinate all technologies that touch the customer.
 Revisit technologies that failed in the past.
 Use technology to tailor marketing programs to individual customers' requirements
 Build systems that leverage existing competitive advantages

2. What are the distinctive characteristics of services as opposed to goods? Explain the additional three
marketing mix elements in services marketing. (NOV/DEC 2006)

Distinctive characteristics of services as opposed to goods:

 Intangibility the service cannot be touched or viewed, so it is difficult for clients to tell in advance what they
will be getting;
 Inseparability of production and consumption the service is being produced at the same time that the client
is receiving it (eg during an online search, or a legal consultation);
24

 Perishibility unused capacity cannot be stored for future use. For example, spare seats on one aero plane
cannot be transferred to the next flight, and query-free times at the reference desk cannot be saved up until
there is a busy period.
 Heterogeneity (or variability): services involve people, and people are all different. There is a strong
possibility that the same enquiry would be answered slightly differently by different people (or even by the
same person at different times). It is important to minimize the differences in performance (through training,
standard-setting and quality assurance).

Additional marketing mix elements in services marketing:

The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the
needs of its targeted market.

The marketing mix thus consists of four main elements:

 Product
 Price
 Place
 Promotion

In addition to the traditional four Ps it is now customary to add some more Ps to the mix to give us Seven Ps.
The additional Ps have been added because today marketing is far more customer oriented than ever before, and
because the service sector of the economy has come to dominate economic activity in this country. These 3 extra Ps
are particularly relevant to this new extended service mix.

The services marketing mix is an extension of the 4Ps framework. The essential elements of product,
promotion, price and place remain but 3 additional elements - people, physical evidence and process are included to
the 7Ps mix. The need for the extension is due to the high degree of direct contact between service providers and its
customers, the highly visible nature of the service process, and the simultaneity of the production and consumption.

People - because of the simultaneity of production and consumption in services the company's staff occupy the
key position in influencing customer's perceptions of product quality. In fact the service quality is inseparable from
the quality of service provider. An important marketing task is to set standards to improve quality of services
provided by employees and monitor their performance. Without training and control employees tend to be variable
in their performance leading to variable service quality. Training is crucial so that employees understand the
appropriate forms of behavior and trainees adopt the best practices.

Physical evidence - this is the environment in which the service is delivered and any tangible goods that
facilitate the performance and communication of the service. Customers look for clues to the likely quality of a
service also by inspecting the tangible evidence. For example, prospective customers may look to the design of
learning materials, the appearance of facilities, staff, etc.

Process - this means procedures, mechanism and flow of activities by which a service is acquired. Process
decisions radically affect how a service is delivered to customers. The service in organizations includes several
25

processes e.g. first contact with customers, administrative procedure regarding delivery, preparation and evaluation
of service offerings.

Question Number 3 (Nov / Dec 2007)

3. Discuss service marketing with particular reference to commercial banks. (MAY/JUNE 2007)

Service companies can try to demonstrate their service quality through physical evidence and presentation.
Suppose a commercial bank wants to position itself as the "fast" bank. It could make this positioning strategy
tangible a number of marketing tools:

Place: The exterior and interior should have clean lines. The waiting lines should not get overly long. The layout of
the desks and the traffic flow should be planned carefully.

People: Personnel should be busy. There should be a sufficient number of employees to manage the workload.

Equipment: Computers, copying machines, desks should be state of art.

Communication material: Printed materials should suggest efficiency and speed.

Symbols: The name and symbol should suggest fast service.

Price: The bank could advertise that it will deposit Rs. 50 in the account of any customer who waits in line for
more than five minutes.

4. What are the distinctive characteristics of services as opposed to goods? Explain the additional three
marketing mix elements in services marketing.(NOV/DEC 2007)

Distinctive characteristics of services as opposed to goods:

 Intangibility the service cannot be touched or viewed, so it is difficult for clients to tell in advance what
they will be getting;
 Inseparability of production and consumption the service is being produced at the same time that the
client is receiving it (eg during an online search, or a legal consultation);
 Perishibility unused capacity cannot be stored for future use. For example, spare seats on one aero plane
cannot b6 transferred to the next flight, and query-free times at the reference desk cannot be saved up until
there is a busy period.
 Heterogeneity (or variability): services involve people, and people are all different. There is a strong
possibility that the same enquiry would be answered slightly differently by different people (or even by the
same person at different times). It is important to minimize the differences in performance (through training,
standard-setting and quality assurance).

Additional marketing mix elements in services marketing:

The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the
needs of its targeted market.
26

The marketing mix thus consists of four main elements:

• Product • Price

Place • Promotion

In addition to the traditional four Ps it is now customary to add some more Ps to the mix to give us Seven
Ps. The additional Ps have been added because today marketing is far more customer oriented than ever before, and
because the service sector of the economy has come to dominate economic activity in this country. These 3 extra Ps
are particularly relevant to this new extended service mix.

The services marketing mix is an extension of the 4Ps framework. The essential elements of product,
promotion, price and place remain but 3 additional elements - people, physical evidence and process are included to
the 7Ps mix. The need for the extension is due to the high degree of direct contact between service providers and its
customers, the highly visible nature of the service process, and the simultaneity of the production and consumption.

People - because of the simultaneity of production and consumption in services the company's staff occupy
the key position in influencing customer's perceptions of product quality. In fact the service quality is inseparable
from the quality of service provider. An important marketing task is to. set standards to improve quality of services
provided by employees and monitor their performance. Without training and control employees tend to be variable
in their performance leading to variable service quality. Training is crucial so that employees understand the
appropriate forms of behavior and trainees adopt the best practices.

Physical evidence - this is the environment in which the service is delivered and any tangible goods that
facilitate the performance and communication of the service. Customers look for clues to the likely quality of a
service also by inspecting the tangible evidence. For example, prospective customers may look to the design of
learning materials, the appearance of facilities, staff, etc.

Process - this means procedures, mechanism and flow of activities by which a service is acquired. Process
decisions radically affect how a service is delivered to customers. The service in organizations includes several
processes e.g. first contact with customers, administrative procedure regarding delivery, preparation and evaluation
of service offerings.

5. Explain brand management. (MAY/JUNE 2008)

Brand management is the application of marketing techniques to a specific product, product line, or brand. It
seeks to increase the product's perceived value to the customer and thereby increase brand franchise and brand
equity.

Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand
will continue with future purchases of the same product.

This may increase sales by making a comparison with competing products more favorable. It may also
enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of
27

profit it generates for the manufacturer.This can result from a combination of increased sales and increased price,
and/or reduced COGS (cost of goods sold), and/ or reduced or more efficient marketing investment.All of these
enhancements may improve the profitability of a brand, and thus, "Brand Managers" often carry line-management
accountability for a brand's P&L profitability, in contrast to marketing staff manager roles, which are allocated
budgets from above, to manage and execute.

Brand Management is often viewed in organizations a broader and more strategic role than Marketing alone.
Brand management involves the design and implementation of marketing programs and activities to build, measure,
and manage brand equity.

 The brand management process is defined as involving four main steps:


 Identifying and establishing brand positioning and values
 Planning and implementing brand marketing programs
 Measuring and interpreting brand performance
 Growing and sustaining brand equity

Brand has the essential importance for the success of enterprise, having in mind that, in contemporary business
conditions, it is more difficult to realize wanted business results without the brand. Branding process has become
more important and provocative than ever before and products without brand are fewer in market.Successful brand
becomes the symbol which provides some important functions for customers and increases the product value in
their eyes. Brand identifies source or maker of a product and allows customers to assign responsibility to particular
manufacturer or distributor. It also allows customers to lower search costs for products.

Branding helps product differentiation and creating good image which could be used for creating corporate
image. Promotion of branded products leads to the increase of selected demand, which helps enterprise to increase
its market share. Brand could also stimulate repeated buying and increase customer loyalty, which results in lower
price elasticity. Successful brand enables expanding the brand on other products and prestige creation, as well as the
legal protection of unique product characteristics

6. How does marketing of services assume great significance in business?


(MAY/JUNE 2008)

Marketing of services is the diametrically opposed non-material counterpiece of a physical good. A service
provision comprises a sequence of activities that does not result in ownership of the outcome, and this is what
fundamentally differentiates it from furnishing someone with physical goods. Service provision is a process that
creates predetermined benefits by effectuating either a change of service consumers, a change in their physical
possessions or a change in their (in)tangible assets.Marketing a service-base business is different from marketing a
goods-base business.

There are several major differences, including:

 The buyer purchases are intangible


 The service may be based on the reputation of a single person
 It's more difficult to compare the quality of similar services
28

 The buyer cannot return the service

Marketing of service is a set of singular and perishable benefits

• delivered from the accountable service provider, mostly in close coaction with his service suppliers,

 generated by functions of technical systems and/or by distinct activities of individuals, respectively,


 commissioned according to the needs of his service consumers by the service customer from the
accountable service provider,
 rendered individually to an authorized service consumer at his/her dedicated request,
 and, finally, consumed and utilized by the requesting service consumer for executing and/or supporting
his/her day-to-day business tasks or private activities

Marketing of service is one of the most important ingredients of the marketing mix for products and services.
High quality customer service helps to create customer loyalty. Customers today are not only interested in the
product they are being offered but all the additional elements of service that they receive from the greeting they
receive when they enter a retail outlet, to the refund and help that they receive when they have a complaint about a
faulty product that they have paid for.

Performance of the service is not seen as a primary responsibility of marketing, but given the importance of
reputation, referrals and repeat business, the marketing function cannot ignore this stage. Successful companies
attach great importance to monitoring service provision with & customer satisfaction reporting system which
measures customer satisfaction. The reporting system should include both completion review and review of
satisfaction while delivery is in process

7. Discuss product planning(MAY/JUNE 2008)

The product planning process is one of the most controversial within any company. Everyone wants a hand in
new product definition and almost everyone will have contributions that will make a new product successful. With
all these interested parties, you are going to need a system to help you through the product planning process and a
way to decide which ideas have the most merit. This system also needs to incorporate customer feedback, assure
that important new product ideas are approved, and that development of them initiated immediately. What follows
is a product planning system that works well for most companies.
29

The steps are important because they allow you to gather input from all possible resources, evaluate the
potential of each idea and gather input from all involved parties about which ideas will work and their ease of
implementation.

Input

There should be no shortage of new product ideas. If you are doing regular customer councils and customer
surveys, you should have a long list. You will also have ideas from sales, engineering, technical support, and
management. The biggest job is narrowing down the list. A regular poll of sales, tech support, engineering, and
customers for product ideas may help you prioritize. Be sure everyone in your company knows to feed product
ideas to you. Often times the tech support organization has a unique insight to customer requirements because they
are in contact with customers who need help daily, but no one ever bothers to ask them. When you need to narrow
the list further, run it by your customer council. You can ask them to vote on the product ideas they think are most
valuable.

Competitive analysis is also an important part of product planning. Your customers, sales channels, and
prospects evaluating your product will tell you where you fall short competitively. Additionally you may want to
take an existing strength that you have over your competitors and lengthen your lead with improvements to that
strength. Remember that a competitor won't release a feature that is just on par with your product, they will be
trying to exceed your strength. Also understand where your competitors are going and what products they have in
the works. You won't get this information directly from them, but you may hear rumors or see press on their
strategic directions. Additionally listen to your prospects when they are asking you about your product features and
directions. Often times they are parroting back information that your competitor's have given them. The World
Wide Web is also an excellent place to gather competitive information. Often times competitors will publish their
strategic directions and, for software companies, actually have beta versions of their new software releases
available.

Product Ideas Refined

After narrowing down the list of potential new products or features enhancements for an existing product,
you will want to refine some of the more promising ideas. Before a product idea is funded, some basic information
needs to be gathered about who is going to buy the product, how much they will buy and how much it will cost to
develop it. This is the information that will eventually be expanded upon in the MRD (Market Requirements
Document) but should be gathered and presented in summarized form to seek product approval.

Products Approved

Once you have gathered the above information for you product proposals, you need to get the, project
approved. It allows you to present all the appropriate information to everyone at once. It is also a great forum for
discussion of the merits of the product. In some companies, you may need a full market requirements document
before the project is approved.
30

Market Requirements Refined

Once the product is approved you can refine the market requirements, adding more detail on the desired
features of the product and how the customers will use the product. There will be two types of MRDs, one for new
products and a second for new releases of a current product. The new product MRD will require

Development Initiated

Once the MRD is complete, the developers can start to work on a functional specification and prototypes.
Some companies combine the MRD and Functional Specification into one document to help them decrease time to
market. To do this, you must work very closely with engineering to make sure that the functional design of the
product will indeed meet customer requirements.

Running a Successful Product Planning Meeting

The meeting gives you a forum to formally add and remove products and projects to the approved projects
list and to make sure that everyone involved is clear on the priorities. It also gives them visibility to why the
priorities are what they are.

This process may seem like a lot of work, and frankly it is. By comparison, you wouldn't just start writing
code on a software product without doing the structure and design work first. When you compare the effort of
product planning to spending hundreds of man-hours of development resource for a product that sales can't sell and
customers won't buy, the planning work is nominal.

8. Explain customer satisfaction.(MAY/JUNE 2008)

Customer satisfaction, a business term, is a measure of how products and services supplied by a company
meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the
four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key
differentiator and increasingly has become a key element of business strategy. There is a substantial body of
empirical literature that establishes the benefits of customer satisfaction for firms.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of
satisfaction will vary from person to person and product/service to product/service. The state of satisfaction
depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such
as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may
have and other products against which the customer Because satisfaction is basically a psychological state, care
should be taken in the effort of quantitative measurement, although a large quantity of research in this area has
recently been developed.
31

Exceptional customer service results in greater customer retention, which in turn results in higher profitability.
Customer loyalty is a major contributor to sustainable profit growth. To achieve success, you must make superior
service second nature of your organization. A seamless integration of all components in the service-profit chain -
employee satisfaction, value creation, customer satisfaction, customer loyalty, and profit and growth - links all the
critical dynamics of top customer service.

Sadly, mature companies often forget or forsake the thing that made them successful in the first place: a
customer-centric business model. They lose focus on the customer and start focusing on the bottom line and
quarterly results. They look for ways to cut costs or increase revenues, often at the expense of the customer.

They forget that satisfying customer needs and continuous value innovation is the only path to sustainable
growth. This creates opportunities for new, smaller companies to emulate and improve upon what made their bigger
competitors successful in the first place and steal their customers.

9. Explain the components of the marketing mix in detail. (Nov / Dec 2008)

The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components
of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and
promotion. Read on for more details on the marketing mix.

Price

There are many ways to price a product. Let's have a look at some of them and try to understand the best
policy/strategy in various situations.

Premium Pricing.

Use a high price where there is a uniqueness about the product or service. This approach is used where a
substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy
Hotel rooms, and Concorde flights.

Penetration Pricing.

The price charged for products and services is set artificially low in order to gain market share. Once this is
achieved, the price is increased. This approach was used by France Telecom and Sky TV.

Economy Pricing.

This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets
often have economy brands for soups, spaghetti, etc.

Price Skimming.

Charge a high price because you have a substantial competitive advantage. However, the advantage is not
sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to
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increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other
manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing
strategies and pricing approaches are implemented.

Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing
policies/strategies. They form the bases for the exercise. However there are other important approaches to pricing.

Psychological Pricing.

This approach is used when the marketer wants the consumer to respond on an emotional, rather than
rational basis. For example 'price point perspective' 99 cents not one dollar.

Product Line Pricing.

Where there is a range of product or services the pricing reflect the benefits of parts of the range. For
example car washes. Basic wash could be $2, wash and wax $4, and the whole package $6.

Optional Product Pricing.

Companies will attempt to increase the amount customer spend once they start to buy. Optional 'extras'
increase the overall price of the product or service. For example airlines will charge for optional extras such as
guaranteeing a window seat or reserving a row of seats next to each other.

Captive Product Pricing

Where products have complements, companies will charge a premium price where the consumer is
captured. For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale
of the only design of blades which fit the razor.

Product Bundle Pricing.

Here sellers combine several products in the same package. This also serves to move old stock. Videos and
CDs are often sold using the bundle approach.

Promotional Pricing.

Pricing to promote a product is a very common application. There, are many examples of promotional
pricing including approaches such as BOGOF (Buy One Get One Free).

Geographical Pricing.

Geographical pricing is evident where there are variations in price in different parts of the world.-For
example rarity value, or where shipping costs increase price.

Value Pricing.
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This approach is used where external factors such as recession or increased competition force companies to
provide 'value' products and services to retain sales e.g. value meals at McDonalds.

Place

Another element of Neil H.Borden's Marketing Mix is Place. Place is also known as channel, distribution,
or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/
service provider to the user or consumer.

There are six basic 'channel' decisions:

 Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a wholesaler).
 Single or multiple channels.
 Cumulative length of the multiple channels.
 Types of intermediary (see later).
 Number of intermediaries at each level (e.g. how many retailers in Southern Spain).
 Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting between local
distributors).

Selection Consideration - how do we decide upon a distributor?

 Market segment - the distributor must be familiar with your target consumer and segment.
 Changes during the product life cycle - different channels can be exploited at different points in the PLC e.g.
Foldaway scooters are now available everywhere. Once they were sold via a few specific stores.
 Producer - distributor fit - Is there a match between their polices, strategies, image, and yours? Look for
'synergy'.
 Qualification assessment - establish the experience and track record of your intermediary.
 How much training and support will your distributor require?

Types of Channel Intermediaries.

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors,
direct marketing (from manufacturer to user without an intermediary), and many others. The main modes of
distribution will be looked at in more detail.

Channel Intermediaries - Wholesalers

 They break down 'bulk' into smaller packages for resale by a retailer.
 They buy from producers and resell to retailers. They take ownership or ’title1 to goods whereas agents do
not (see below).
 They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature.
They sell on to a wholesaler that will store it and eventually resell to a retailer.
 Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service
costs, or sales force costs.
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A wholesaler will often take on the some of the marketing responsibilities. Many produce their own
brochures and use their own telesales operations

Channel Intermediaries - Agents

 Agents are mainly used in international markets.


 An agent will typically secure an order for a producer and will take a commission. They do not tend to take
title to the goods. This means that capital is not tied up in goods. However, a 'stockist agent' will hold
consignment stock (i.e. will store the stock, but the title will remain with the producer. This approach is used
where goods need to get into a market soon after the order is placed e.g. foodstuffs).
 Agents can be very expensive to train. They are difficult to keep control of due to the physical distances
involved. They are difficult to motivate.

Channel Intermediaries - Retailers

 Retailers will have a much stronger personal relationship with the consumer.
 The retailer will hold several other brands and products. A consumer will expect to be exposed to many
products.
 Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents.
 Products and services are promoted and merchandised by the retailer.
 The retailer will give the final selling price to the product.
 Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the USA, and Alisuper, Modelo,
and Jumbo in Portugal.

4. Channel Intermediaries - Internet

 The Internet has a geographically disperse market.


 The main benefit of the Internet is that niche products reach a wider audience e.g. Scottish Salmon direct
from an Inverness fishery.
 There are low barriers low barriers to entry as set up costs are low.
 Use e-commerce technology (for payment, shopping software, etc)
 There is a paradigm shift in commerce and consumption which benefits distribution via the Internet

Promotion

Another one of the 4P's is promotion. This includes all of the tools available to the marketer for 'marketing
communication'. As with Neil H.Borden's marketing mix, marketing communications has its own 'promotions mix.'
Think of it like a cake mix, the basic ingredients are always the same. However if you vary the amounts of one of
the ingredients, the final outcome is different.

The elements of the promotions mix are:

 Personal Selling.
 Sales Promotion.
 Public Relations.
 Direct Mail.
 Trade Fairs and Exhibitions.
 Advertising.
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 Sponsorship.

The elements of the promotions mix are integrated to form a coherent campaign. As with all forms of
communication. The message from the marketer follows the 'communications process' as illustrated above. For
example, a radio advert is made for a car manufacturer. The car manufacturer (sender) pays for a specific advert
with contains a message specific to a target audience (encoding). It is transmitted during a set of commercials from
a radio station (Message / media).

The message is decoded by a car radio (decoding) and the target consumer interprets the message (receiver). He
or she might visit a dealership or seek further information from a web site (Response). The consumer might buy a
car or express an interest or dislike (feedback). This information will inform future elements of an integrated
promotional campaign. Perhaps a direct mail campaign would push the consumer to the point of purchase. Noise
represent the thousand of marketing communications that a consumer is exposed to everyday, all competing for
attention.

PHYSICAL EVIDENCE

Physical Evidence is the material part of a service. Strictly speaking there are no physical attributes to a service,
so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the
following:

 Packaging. >
 Internet/web pages.
 Paperwork (such as invoices, tickets and despatch notes).
 Brochures.
 Furnishings.
 Signage (such as those on aircraft and vehicles).
 Uniforms.
 Business cards.
 The building itself (such as prestigious offices or scenic headquarters).
 Mailboxes and many others

PEOPLE

People are the most important element of any service or experience. Services tend to be produced and
consumed at the same moment, and aspects of the customer experience are altered to meet the 'individual needs' of
the person consuming it. Most of us can think of a situation where the personal service offered by individuals has
made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the
attitude, skills and appearance of all rtaff need to be first class.

PROCESS

Process is another element of the extended marketing mix, or 7P's.There are a number of perceptions of the
concept of process within the business and marketing literature. Some see processes as a means to achieve an
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outcome, for example - to achieve a 30% market share a company implements a marketing planning process.
Another view is that marketing has a number of processes that integrate together to create an overall marketing
process, for example - telemarketing and Internet marketing can be integrated. A further view is that marketing
processes are used to control the marketing mix, i.e. processes that measure the achievement marketing objectives.
All views are understandable, but not particularly customer focused.

For the purposes of the marketing mix, process is an element of service that sees the customer experiencing
an organisation's offering. It's best viewed as something that your customer participates in at different points in
time. Here are some examples to help your build a picture of marketing process, from the customer's’point of view.

Going on a cruise - from the moment that you arrive at the dockside, you are greeted; your baggage is taken to
your room. You have two weeks of services from restaurants and evening entertainment, to casinos and shopping.
Finally, you arrive at your destination, and your baggage is delivered to you. This is a highly focused marketing
process.

10. Explain the different categories of service mix in detail. (NOV/DEC 2008)

A service is the action of doing something for someone or something. It is largely intangible (i.e. not material).
A product is tangible (i.e. material) since you can touch it and own it. A service tends to be an experience that is
consumed at the point where it is purchased, and cannot be owned since is quickly perishes. A person could go to a
cafe one day and have excellent service, and then return the next day and have a poor experience. So often
marketers talk about the nature of a service as:

Inseparable - from the point where it is consumed, and from the provider of the service. For example, you
cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product,
not a service).

Intangible - and cannot have a real, physical presence as does a product. For example, motor insurance may
have a certificate, but the financial service itself cannot be touched i.e. it is intangible.

Perishable - in that once it has occurred it cannot be repeated in exactly the same way. For example, once a
100 metres Olympic final has been run, there will be not other for 4 more years, and even then it will be staged in a
different place with many different finalists.

Variability- since the human involvement'of service provision means that no two services will be
completely identical. For example, returning to the same garage time and time again for a service on your car might
see different levels of customer satisfaction, or speediness of work.

Right of ownership - is not taken to the service, since you merely experience it. For example, an engineer may
service your air- conditioning, but you do not own the service, the engineer or his equipment. You cannot sell it on
once it has been consumed, and do not take ownership of it.

11. Explain Marketing Mix. Comment in brief upon its ingredients. (MAY/JUNE- 2009)
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The marketing mix, earlier known as the 4 p’s, (but now has a few more), is a vital part of any marketing
strategy. This is a tool whereby the marketer takes decisions on what and how a product should be, where it can be
sold, how it should be priced, how it will be promoted, how to equip the people who are responsible for selling the
product... and so on. Getting the marketing mix right is equally important for the large corporation and the small
business owner. Let us take a closer look at the 5 most important elements.

Product: A lot of thought and effort goes into designing a product offering. The most important question that
you, as a marketer, need to ask is whether there is a need for your type of product and how your own product
satisfies that need better than those of your competitors. This will force you to think of why your product is unique,
and thereby help you evolve your product’s Unique Selling Proposition. At the same time, you will need to analyze
your company’s strengths and weaknesses and the opportunities and threats posed by the market, to understand how
you are positioned versus the competition.

Price: This element of the marketing mix can be many a strategy’s undoing. A complete understanding of the
financial that drive a business is essential before deciding a pricing strategy. Base your decision after considering
the following- what is the perceived value of your product in the eyes of the customer? How price elastic is the
market? Do you wish to load overheads on to the new product, if an existing product line is capable of absorbing
them? What is your objective - do you plan to gain market share on the strength of a rock bottom price or do you
wish to create a premium image targeted at niche customers and price your product accordingly?

Place: This is probably that element of the marketing mix that has undergone a complete change in definition.
Traditional trading and distribution models have given way to remote or virtual channels. While reaching the
customer may have become simpler, your job as a decision maker has become that much more complex. You now
have a plethora of options to choose from - do you go for brick and mortar or direct mailing, use the phone or sell
door to door? This decision should, first and foremost, be driven by customer preference and then by other
considerations like logistics and economics. Indeed most businesses rely on a multi distribution channel strategy.

Promotion: In a commodity industry, this is what makes the essential difference. Possibly no other marketing
mix element draws as much attention from strategy makers. Again, let consumer needs drive your efforts. Does
your marketing communication address a specific need of the target audience? Is the message memorable? Does it
spur action? Here again, the entire landscape has changed from what it was a few years ago. Promotion has gone
way beyond mere advertising and public relations - it is now a highly evolved process, ranging from live events to
Internet marketing. In these times of information overload, promotion strategies must pack sufficient punch to cut
through the clutter.

People: Although a later entrant to the marketing mix family, the people decision is no less important. Indeed,
in service oriented businesses, it may well be the key determinant of success. No strategy is complete unless the
people who are in charge of implementing it have the wherewithal to do so. This means investing in sales force
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training, ensuring a customer relationship management system is in place and building a customer centric culture
throughout the organization.

12. Explain the concept of brand equity. (MAY/JUNE- 2009)

Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared
with those that would accrue if the same product did not have the brand name. And, at the root of these marketing
effects is consumers’ knowledge. In other words, consumers’ knowledge about a brand makes
manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand.
The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are
one of the most valuable assets that a company has.Brand equity is an intangible asset that depends on associations
made by the consumer. There are at least three perspectives from which to view brand equity:

Financial - One way to measure brand equity is to determine the price premium that a brand commands over a
generic product. For example, if consumers are willing to pay $100 more for a branded television over the same
unbranded television, this premium provides important information about the value of the brand. However,
expenses such as promotional costs must be taken into account when using this method in measure brand equity.

Brand extensions - A successful brand can be used as a platform to launch related products. The benefits of
brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures, and a lower
risk from the perspective of the consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct financial measures of brand
equity.

Consumer-based - A strong brand increases the consumer’s attitude strength toward the product associated
with the brand. Attitude strength is built by experience with a product. This importance of actual experience by the
customer implies that trial samples are more effective than advertising in the early stages of building a strong brand.
The consumer’s awareness and associations lead to perceived quality, inferred attributes, and eventually, brand
loyalty.

Strong brand equity provides the following benefits:

 Facilitates a more predictable income stream.


 Increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing.

Brand equity is an asset that can be sold or leased.However, brand equity is not always positive in value.
Some brands acquire a bad reputation that results in negative brand equity. Negative brand equity can be measured
by surveys in which consumers indicate that a discount is needed to purchase the brand over a generic product.

Alternative Means to Brand Equity

Building brand equity requires a significant effort, and some companies use alternative means of achieving
the benefits of a strong brand. For example, brand equity can be borrowed by extending the brand name to a line of
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products in the same product category or even to other categories. In some cases, especially when there is a
perceptual connection between the products, such extensions are successful. In other cases, the extensions are
unsuccessful and can dilute the original brand equity.Brand equity also can be “bought” by licensing the use of a
strong brand for a new product. As in line extensions, by the same company, the success of brand licensing is not
guaranteed and must be analyzed carefully for appropriateness.

Managing Multiple Brands

Different companies have opted for different brand strategies for multiple products. These strategies are:

 Single brand identity - a separate brand for each product. For example, in laundry detergents Procter &
Gamble offers uniquely positioned brands such as Tide, Cheer, Bold, etc.
 Umbrella - all products under the same brand. For example, Sony offers many different product-categories
under its brand.
 Multi-brand categories - Different brands for different product categories. Campbell Soup Company uses
Campbell’s for soups, Pepperidge Farm for baked goods, and V8 for juices.
 Family of names - Different brands having a common name stem. Nestle uses Nescafe, Nesquik, and
Nestea for beverages.Brand equity is an important factor in multi-product branding strategies.
13. A new trend in marketing is towards customerization. Describe what customerization is and how
marketers are using it. (MAY/JUNE- 2009)

Customerization allows firms to adapt one-to-one marketing and personalization strategies to the digital
environment. In a sense, a firm becomes an agent of the customer—’’renting” out to customers pieces of its
manufacturing, logistics, and other resources, thus allowing them to find, choose, design, and use what they need.
Such strategies often require little prior information about customers, and the product itself can be manufactured
after customers tell the marketers what they want to buy.

In developing customerization strategies, however, marketers face a number of challenges. These include
obtaining information from customers, identifying intangible factors that may be crucial to customers, dealing with
enhanced customer expectations, limiting the complexity of options, and pricing customized offerings.

In addition, while technology makes the implementation of customerization strategies easier and cheaper,
strategic and. organizational decisions are more complex and expensive, as the marketer determines what is the
right information to send to each customer. To be truly successful at customerization, a marketer must bring
together the value chains of the supply and demand sides of the market. In some cases, the entire company might be
reorganized around a new order generation and fulfillment process as part of a customer-driven, integrated global
supply chain.

Finally, marketers face critical decisions about where and when to customerize and how to integrate this
strategy with other marketing strategies. They must determine the optimal portfolio of mass marketing, direct
marketing to target segments, and interactive customized marketing. In this new realm, success will depend on
finesse—the ability to deploy effort into areas that generate higher customer, value than the cost of adding that
value—rather than on massive resources.
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Where should a marketer begin in implementing a customerization strategy? First, by increasing the digital
content of its offerings and of the customer’s shopping and consumption experience, and second, by positioning the
firm to become the customerizer of the entire industry.

14. Explain the business unit strategic planning process(June 2011)

In today's highly competitive business environment, budget-oriented planning or forecast-based planning


methods are insufficient for a large corporation to survive and prosper. The firm must engage in strategic planning
that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement
the strategy, evaluate the progress, and make adjustments as necessary to stay on track.

A simplified view of the strategic planning process is shown by the following diagram:

The Strategic Planning Process

Mission &
Objectives

Environmental
Scanning

Strategy
Formulation

Strategy
Implementation

Evaluation
& Control

Mission and Objectives


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The mission statement describes the company's business vision, including the unchanging values and
purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities.

Guided by the business vision, the firm's leaders can define measurable financial and strategic objectives. Financial
objectives involve measures such as sales targets and earnings growth. Strategic objectives are related to the firm's
business position, and may include measures such as market share and reputation.

Environmental Scan

The environmental scan includes the following components:

 Internal analysis of the firm


 Analysis of the firm's industry (task environment)

 External macroenvironment (PEST Analysis)

The internal analysis can identify the firm's strengths and weaknesses and the external analysis reveals
opportunities and threats. A profile of the strengths, weaknesses, opportunities, and threats is generated by means of
a SWOT analysis.An industry analysis can be performed using a framework developed by Michael Porter known
asPorter’s five forces. This framework evaluates entry barriers, suppliers, customers, substitute products, and
industry rivalry.

Strategy Formulation

Given the information from the environmental scan, the firm should match its strengths to the opportunities
that it has identified, while addressing its weaknesses and external threats.To attain superior profitability, the firm
seeks to develop a competitive advantage over its rivals. A competitive advantage can be based on cost or
differentiation. Michael Porter identified three industry-independent generic strategies from which the firm can
choose.

Strategy Implementation

The selected strategy is implemented by means of programs, budgets, and procedures. Implementation
involves organization of the firm's resources and motivation of the staff to achieve objectives.The way in which the
strategy is implemented can have a significant impact on whether it will be successful. In a large company, those
who implement the strategy likely will be different people from those who formulated it. For this reason, care must
be taken to communicate the strategy and the reasoning behind it. Otherwise, the implementation might not succeed
if the strategy is misunderstood or if lower-level managers resist its implementation because they do not understand
why the particular strategy was selected.

Evaluation & Control


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The implementation of the strategy must be monitored and adjustments made as needed.Evaluation and
control consists of the following steps:

1. Define parameters to be measured


2. Define target values for those parameters

3. Perform measurements

4. Compare measured results to the pre-defined standard

5. Make necessary changes

15. Differentiate service marketing from product marketing. Suggest additional marketing mix for services. (June
2010)

Refer to Q.No 10 Nov/Dec 2008 and Q.No.11 May/ June 2009

UNIT – III
Part A

1.Explain the concept of repositioning. (MAY/JUNE 2006)

Product positioning is not limited to new products alone. It is relevant for occasional face lifting of the
existing products of almost all kinds such as toilet soaps, shampoos, cosmetics, tooth pastes, etc. Repositioning
does not mean total change. It sometimes entails strengthening and clarifying an existing identity. Repositioning
does not always hold the key to success. In case a product has got into a very bad shape due to prolonged neglect,
repositioning effort may turn out to be an exercise in futility. In such cases it would always be better to drop the
product.

2. When is penetration pricing a good option? (MAY/JUNE 2006)

Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not
dominant market share. This strategy is most often used businesses wishing to enter a new market or build on a
relatively small market share. This will only be possible where demand for the product is believed to be highly
43

elastic, i.e. demand is price-sensitive and either new buyer will be attracted, or existing buyers will buy more of the
product as a result of a low price. A penetration pricing strategy may also promote complimentary and captive
products. The main product may be priced with a low markup to attract sales (it may even be a loss-leader).
Customers are then sold accessories (which often only fit the manufacturer's main product) which are sold at higher
mark-ups.

3. What is Promotion Mix? Mention promotion mix elements. (NOV/DEC 2006)

Promotion involves disseminating information about a product, product line, brand, or company. It comprises of
four elements which includes:

 Advertising
 Personal Selling
 Sales Promotion
 Publicity and Public relations

4. Define Brand. (NOV/DEC 2006)

A brand is a collection of images and ideas representing an economic producer; more specifically, it refers to
the concrete symbols such as a name, logo, slogan, and design scheme

5. What is product concept? (MAY/JUNE 2007)

The product concept holds that the consumers will favor those products that offer the most quality,
performance, or innovative features. Therefore managers in these organizations focus on making superior
products and improving them over time.

6.Define introduction stage of PLC. (MAY/JUNE 2007)

Introduction is the early stage, when product is introduced in market, sales revenue begins to grow
but the rate of growth is very slow. Profits may not be there as there is low sales volume, large
production and distribution costs. It may require heavy advertising and sales promotion. Products are
brought cautiously on a trail basis.

7.Define ’Brand positioning’. (NOV/DEC 2007)

Brand positioning is the process by which marketers try to create an image or identity in the minds of their
target market for its product, brand, or organization. It is the 'relative competitive comparison' their product
occupies in a given market as perceived by the target market.

8. What is product? (MAY/JUNE 2008)

 a product is anything that can be offered to a market that might satisfy a want or need

 a thing produced by labor or effort In manufacturing, products are purchased as raw materials and sold as
finished goods.The end result of the manufacturing process, to be offered to the marketplace to satisfy a
need or want.
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9.What is Brand positioning? (MAY/JUNE 2008)

Positioning is how a brand appears in relation to other brands in the market. It is influenced by the
experiences customers have with a brand's products, services, advertising and promotional material, and
representatives over time. The development of a brand’s position in the market by heightening customer perception
of the brand's superiority over other brands of a similar nature. Brand positioning relies on the identification of a
real strength or value that has a clear advantage over the nearest competitor and is easily communicated to the
consumer,

10. What is market testing? (NOV/DEC 2008)

Market testing is a geographic region or demographic group used to gauge the viability of a product or
service in the mass market prior to a wide scale roll-out. The criteria used to judge the acceptability of a market
region or group which includes:

 a population that is demographically similar to the proposed target market; and

 relative isolation from densely populated media markets so that advertising to the test audience can be
efficient and economical

11. State STP strategy. (NOV/DEC 2008)

 To identify groups or segments of potential customers (individuals, organizations, buying centers, etc.)
whose desired values from products and services within groups are similar and whose values between
groups are different.

 To select one or more groups as a target segment who respond favorably to a current or prospective
marketing offering.

 To achieve a desired positioning in the minds of potential segment customers (defined broadly, as above)
with a profitable marketing program.

12. Define service. (MAY/JUNE 2008)

A service is the diametrically opposed non-material counterpiece of a physical good. A service provision
comprises a sequence of activities that does not result in ownership of the outcome, and this is what fundamentally
differentiates it from furnishing someone with physical goods. Service provision is a process that creates
predetermined benefits by effectuating either a change of service consumers, a change in their physical possessions
or a change in their (in)tangible assets.

13. Define value chain. (MAY/JUNE- 2009)

A value chain is a chain of activities. Products pass through all activities of the chain in order and at each
activity the product gains some value. The chain of activities gives the products more added value than the sum of
added values of all activities. It is important not to mix the concept of the value chain with the costs occurring
throughout the activities.
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14. Define Product Positioning. (MAY/JUNE- 2009)

Product Positioning has come to mean the process by which marketers try to create an image or identity in
the minds of their target market for its product, brand or organization. It is the ‘relative competitive comparison’
their product occupies in a given market as perceived by the target market.

Product positioning involves creating a unique, consistent, and recognized customer perception about a
firm’s offering and image. A product or service may be positioned on the basis of an attitude or benefit, use or
application, user, class, price, or level of quality. It targets a product for specific market segments and product needs
at specific prices.

15. Explain Cost-plus Pricing. (MAY/JUNE- 2009)

Cost-plus pricing is a pricing method used by companies. It is used primarily because it is easy to calculate
and requires little information. There are several varieties, but the common thread in all of them is that one first
calculates the cost of the product, then includes an additional amount to represent profit. Cost-plus pricing is often
used on government contracts, and has been criticized as promoting wasteful expenditures. The method determines
the price of a product or service that uses direct costs, indirect costs, and fixed costs whether related to the
production and sale of the product or service or not. These costs are converted to per unit costs for the product and
then a predetermined percentage of these costs is added to provide a profit margin.

16. Define the concept of re-positioning mix? (Nov / Dec 2010)

Changing in brand’s status in comparison to that of the competing brands. Repositioning is effected usually
through changing the marketing mix in response to changes in the market place, or due to a failure to reach the
brand's marketing objectives

17.Mention the pricing strategies for the introduction stage of PLC ( June 2010)

There are three pricing strategies for new product namely

Prestige Pricing
- Setting high prices to position a product at the upper or luxury end of market
- Producing a high quality and charging the highest price.
- For example, Mercedes Benz and Rolex

Market Skimming
- Setting high prices at the launch stage and lowering slowly as the product becomes mature.
- Most product are in high demand in the early stage of the life cycle.
- That is why using Market Skimming may lead to profit maximization.
- For example, Handphones
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Market Penetration
- Setting at lower price to get maximum sales and market share.
- Increase price slightly in the future.

18.What are benefits of segmentation? (Nov / Dec 2010)

a. Adjustment of product and marketing appeals

b. Better position to analyze the marketing opportunities

c. Understanding and meeting the needs of consumers

d. Targeted marketing

19. When is the price skimming a good option? (Nov/ Dec 2010)

Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service
at first , a new, innovative, or much-improved product is launched onto a market. The objective with skimming is to
“skim” off customers who are willing to pay more to have the product sooner; prices are lowered later when
demand from the “early adopters” falls.

Mention any two basis for classification of product

1. Consumer Goods
a. Convenience Products
b. Shopping Products
c. Specialty Products
d. Unsought Products

2. Industrial Goods
a. Materials and parts
b. Capital items
c. Supplies & business services

20. What is meant by Market Segmentation ( June 2011)

A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that
cause them to demand similar product and/or services based on qualities of those products such as price or function

Examples:

 Gender
 Price

 Interests

 Location

 Religion
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 Income

 Size of Household

Part B

1. Explain the concept of product life cycle. (MAY/JUNE 2006)

The Product Life Cycle refers to the succession of stages a product goes through. Product Life Cycle
Management is the succession of strategies used by management as a product goes through its life cycle.

The product lifecycle goes though many phases and involves many professional disciplines and requires many
skills, tools and processes. Product life cycle (PLC) is to do with the life of a product in the market with respect to
business/commercial costs and sales measures; whereas Product Lifecycle Management (PLM) is more to do with
managing descriptions and properties of a product through its development and useful life, mainly from a
business/engineering point of view.

Products tend to go through five stages:

1. New product development stage

a. very expensive

b. no sales revenue

c. losses

2. Market introduction stage

a. cost high

b. sales volume low

c. no/little competition - competitive manufacturers watch for acceptance/segment growth

d. losses

3. Growth stage

a. costs reduced due to economies of scale

b. sales volume increases significantly

c. profitability

d. public awareness

e. competition begins to increase with a few new players in establishing market

f. prices to maximize market share

4. Mature stage

a. costs are very low as you are well established in market & no need for publicity.

b. sales volume peaks


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c. increase in competitive offerings

d. prices tend to drop due to the proliferation of competing products

e. brand differentiation, feature diversification, as each player seeks to differentiate from competition
with "how much product" is offered

f. very profitable

5. Decline or Stability stage

 costs become counter-optimal

 sales volume decline or stabilize

 prices, profitability diminish

 profit becomes more a challenge of production/distribution efficiency than increased sales.

2. How do marketing strategy and marketing mix strategy change across the PLC stages? (MAY/JUNE
2006)

Marketing strategies and marketing mix changes across the PLC Stages are given below:

Introduction Stage:

 Product - Offer a basic product

 Price - Use cost-plus basis to set

 Distribution - Build selective distribution

 Advertising - Build awareness among early adopters and dealers/resellers

 Sales Promotion - Heavy expenditures to create trial

Growth Stage:

 Product - Offer product extensions, service, warranty

 Price - Penetration pricing

 Distribution - Build intensive distribution

 Advertising - Build awareness and interest in the mass market

 Sales Promotion - Reduce expenditures to take advantage of consumer demand

Maturity Stage:

 Product - Diversify brand and models

 Price - Set to match or beat competition

 Distribution - Build more intensive distribution

 Advertising - Stress brand differences and benefits

 Sales Promotion - Increase to encourage brand switching


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Decline Stage:

 Product - Phase out weak items

 Price - Cut price

 Distribution - Use selective distribution: phase out unprofitable outlets

 Advertising - Reduce to level needed to retain hard-core loyalists

 Sales Promotion - Reduce to minimal level

3. Outline the stages in new product development. (MAY/JUNE 2006)

In business and engineering, new product development (NPD) is the term used to describe the complete
process of bringing a new product or service to market. 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 products within the overall strategic process of product life cycle management used to
maintain or grow their market share.

There are several stages in the new product development process...not always followed in order:

Idea Generation '

Ideas for new products can be obtained from customers (employing user innovation), the company's R&D
department competitors, focus groups, employees, salespeople, corporate spys, trade shows, or through a policy of
Open Innovation formal idea generating techniques include attribute listing, forced relationships, brainstorming,
morphological analysis, problem analysis

Idea Screening

 the object is to eliminate unsound concepts prior to devoting resources to them.

 the screeners must ask at least three questions:

 will the customer in the target market benefit from the product?

 is it technically feasible to manufacture the product?

 will the product be profitable when manufactured and delivered to the customer at the target price?

Concept Development and Testing

 develop the marketing and engineering details

 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?


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 prove feasibility through virtual computer aided rendering, and rapid prototyping

 what will it cost to produce it?

Business Analysis

 estimate likely selling price based upon competition and customer feedback

 estimate sales volume based upon size of market

 estimate profitability and breakeven point

Beta Testing and Market Testing

 produce a physical prototype or mock-up

 test the product 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

Technical Implementation

 New program initiation

 Resource estimation

 Requirement publication

 Engineering operations planning

 Department scheduling

 Supplier collaboration

 Resource plan publication

 Program review and monitoring

 Contingencies- what-if planning

Commercialization

 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

4. Explain Market Segmentation, targeting and positioning with a real life example. (MAY/JUNE 2006)

The strategic marketing planning process flows from a mission and vision statement to the selection of target
markets, and the formulation of specific marketing mix and positioning objective for each product or service the
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organization will offer. The formula - segmentation, targeting, positioning (STP) - is the essence of strategic
marketing."

Segmentation is a form of critical evaluation rather than a prescribed process or system, and hence no two
markets are defined and segmented in the same way. However there are a number of underpinning criteria that
assist with segmentation:

Is the segment viable? Is there a profit to be had?

Is the segment accessible? How easy is it to get into the segment?

Is the segment measurable? Is realistic data available considering its potential?

There are many ways that a segment can be considered. For example, the auto market could be segmented
by: driver age, engine size, model type, cost, and so on. However the more general bases include:

By geography - such as where in the world was the product bought

By psychographics - such as lifestyle or beliefs

By socio-cultural factors - such as class By demography - such as age etc

A company will evaluate each segment based upon potential business success. Opportunities will depend
upon factors such as: the potential growth of the segment the state of competitive rivalry within the segment how
much profit the segment will deliver how big the segment is how the segment fits with the current direction of the
Company and its vision.

Targeting

After the market has been separated into its segments, the marketer will select a segment or series of
segments as a target. Resources and effort will be targeted at the segment. In this case, the marketer targets a single
product offering at a single segment in a market with many segments. In the second instance, the marketer ignores
the differences in the segments, and chooses to aim a single product at all segments i.e. the whole market. This is
typical in 'mass marketing' or where differentiation is less important than cost. In the multi-segment approach the
marketer will target a variety of different segments with a series of differentiated products. This is typical in the
motor industry.

Positioning

After segmenting a market and then targeting a consumer, one proceeds to position a product within that
market. Positioning is all about 'perception'. As perception differs from person to person, so do the results of the
positioning exercise? For example, what you perceive as quality, value for money, etc, is different to someone else's
perception.
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Products or services are 'positioning map'. This allows them to be compared and contrasted in relation to
each other. Marketers decide upon a competitive position which enables them to distinguish their own products
from the offerings of their competition (hence the term 'positioning strategy’.

5. Explain the channel design process and suggest ways to resolve channel conflicts. (MAY/JUNE 2006)

Distribution is one of the four aspects of marketing. A distributor is I the middleman between the
manufacturer and retailer. After a product is manufactured it is typically shipped (and typically sold) to a distributor.
The distributor then sells the product to retailers or customers.

The other three parts of the marketing mix are product management, pricing, and promotion.

The distribution channel

Frequently there may be a chain of intermediaries; each passing the product down the chain to the next
organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or
the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take
into account, along with those of the all-important end-user

Channels

A number of alternate 'channels' of distribution may be available.

 Selling direct, such as via mail order, Internet and telephone sales.

 Agent, who typically sells direct on behalf of the producer

 Distributor (also called wholesaler), who sells to retailers

 Retailer (also called dealer), who sells to end customers

Distribution channels may not be restricted to physical products. They may be just as important for moving a
service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels,
for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines,
tourist boards, centralized reservation systems, etc.

There have also been some innovations in the distribution of services. For example, there has been an increase
in franchising and in rental services - the latter offering anything from televisions through tools. There has also been
some evidence of service integration, with services linking together, particularly in the travel and tourism sectors.
For example, links now exist between airlines, hotels and car rental services. In addition, there has been a
significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society
offices are crowding out traditional grocers from major shopping areas.

Channel members
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Distribution channels can thus have a number of levels. Kotler defined the simplest level, that of direct
contact with no intermediaries involved, as the 'zero-level' channel.

The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer, for
industrial goods a distributor, say. In small markets (such as small countries) it is practical to reach the whole
market using just one- and zero-level channels.

In large markets (such as larger countries) a second level, a wholesaler for example, is now mainly used to
extend distribution to the large number of small, neighborhood retailers.

In Japan the chain of distribution is often complex and further levels are used, even for the simplest of
consumer goods.

Channel structure

 To the various levels' of distribution, which they refer to as the channel length', Lancaster and Massingham
also added another structural element, the relationship between its members:

 Conventional or free-flow - This is the usual, widely recognized, channel with a range of middle-men'
passing the goods on to the end-user. ‘Channel' may be set up for one transaction; for example, the sale of
property or a specific civil engineering project. This does not share many characteristics with other channel
transactions, each one being unique.

 Vertical marketing system (VMS) - In this form, the elements of distribution are integrated.

Channel management

The channel decision is very important. In theory at least, there is a form of trade-off: the cost of using
intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturer?
could never justify the cost of selling direct to their consumers, except by mail order. In practice, if the producer is
large enough, the use of intermediaries (particularly at the agent and wholesaler level) can sometimes cost more
than going direct.

Many of the theoretical arguments about channels therefore revolve around cost. On the other hand, most of
the practical decisions are concerned with control of the consumer. The small company has no alternative but to use
intermediaries, often several layers of them, but large companies 'do' have the choice.

However, many suppliers seem to assume that once their product has been sold into the channel, into the
beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the
supplier's responsibility; and, if he has any aspirations to be market-oriented, his job should really be extended, to
managing, albeit very indirectly, all the processes involved in that chain, until the product or service arrives with the
end-user. This may involve a number of decisions on the part of the supplier:

 Channel membership
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 Channel motivation

 Monitoring and managing channels

What causes conflict?

Conflict occurs when the actions of either a manufacturer or distributor are perceived as a threat or barrier to
the accomplishment of the other party's goals.

For example, when a manufacturer establishes a direct sales relationship with a customer in a distributor's territory,
that distributor will more than likely perceive this action as a threat to the accomplishment of its goals.

On the other hand, when a distributor joins a buying group or takes on a competitive product line, a
manufacturer will perceive this action as a threat to, the accomplishment of its goals.

In a recently completed survey of 750 manufacturers and 500 distributors, Industrial Performance Group
discovered that excess distribution as a result of ineffective territory management is a major concern for
distributors.

On the other hand, manufacturers are concerned that distributors lack commitment to their products because
distributors carry a number of competing product lines.

There are three primary causes of conflict between manufacturers and distributors.

1) Incompatible goals.

Manufacturers and distributors have two entirely different business focuses. Manufacturing is volume-
focused. Manufacturers reap financial rewards for producing large volumes of goods. Increases in volume bring
about greater efficiencies, quality improvements and cost reductions. But they also increase the need to create
additional demand for these goods in the marketplace.

2) Poorly defined roles and responsibilities.

Conflict is sure to occur in any working relationship where the roles and responsibilities of the manufacturer
and its distributors have not been clearly defined. When roles and responsibilities are not clearly defined,
uncertainty and ambiguity quickly lead to redundancies and inefficiencies, which drive costs up and overall
performance down. Clearly defined roles and responsibilities allow manufacturers and distributors to effectively
allocate resources (time, money and people) in l lu- activities they must perform in order to achieve the goals they
have defined for the working relationship.

To avoid this common source of conflict, manufacturers must clearly ilrlme what is expected of their
distributors and what distributors viiii expect in return.

3) No conflict resolution process.


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As stated earlier, conflict is a natural occurrence in all manufacturer/ distributor working relationships. Our
research indicates that most manufacturers and distributors take the traditional approach to conflict ignore it and it
will go away. Conflict resolution requires a high level of communication and cooperation. Yet we discovered that in
most manufacturer/distributor working relationships, cooperation levels are very low and two-way communication
is virtually nonexistent.

6. What are the objectives for pricing decisions? What methods are used to arrive at pricing
decision when the market is competitive? (NOV/DEC 2006)

Objectives for pricing decisions:

 Current Profit maximization

 Current revenue maximization

 Maximize Quantity

 Maximize profit margin

 Quality Leadership

 Partial cost recovery

 Survival

 Status Quo

Methods used to arrive at pricing decision when the market is competitive:

Cost-plus pricing: It is a pricing method commonly used by firms. It is used primarily because it is easy
to calculate and requires little information. There are several varieties, but the common thread in all of them is that
you first calculate the cost of the product, then include an additional amount to represent profit. Cost-plus pricing is
often used on government contracts, and has been criticized as promoting wasteful expenditures

Target return pricing - It is a pricing method used almost exclusively by market leaders or monopolists.

Value based pricing - A pricing strategy in which a product's price is actively dependant upon its
demand. This method of pricing allows companies to take advantage of highly demanded products by charging
more. A good example is how refreshments generally cost more at sporting events.

Psychological pricing - This pricing drives demand greater than would be expected if consumers were
perfectly rational. Psychological pricing is one cause of price points.

Penetration pricing - It is the pricing technique of setting a relatively low initial entry price, a price that is
often lower than the eventual market price. The expectation is that the initial low price will secure market
acceptance by breaking down existing brand loyalties. Penetration pricing is most commonly associated with a
marketing objective of increasing market share or sales volume, rather than short term profit maximization.

7. Suggest suitable strategies for Growth and Maturity stage of PLC.(NOV/DEC 2006)

Growth strategies - In this scheme we ask the question, "How should the firm grow?". There are a number
of different ways of answering this question, but the most common gives four answers:
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Horizontal integration: In microeconomics and strategic management, the term horizontal integration
describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type
of product in numerous markets. To get this market coverage, several small subsidiary companies are created. Each
markets the product to a different market segment or to a different geographical area. This is sometimes referred to
as the horizontal integration of marketing. The horizontal integration of production exists when a firm has plants in
several locations producing similar products. Horizontal integration in marketing is much more common than
horizontal integration in production.

Vertical integration: In microeconomics and strategic management, the term vertical integration describes
a style of ownership and control. Vertically integrated companies are united through a hierarchy and share a
common owner. Usually each member of the hierarchy produces a different product or service, and the products
combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration is one method of
avoiding the hold-up problem.

Diversification (or conglomeration): Diversification is a form of growth marketing strategy for a


company. It seeks to increase profitability through greater sales volume obtained from new products and new
markets. Diversification can occur either at the business unit or at the corporate level. At the business unit level, it is
most likely to expand into a new segment of an industry in which the business is already in. At the corporate level,
it is generally entering a promising business outside of the scope of the existing business unit.

Business Maturity

Maturity is a very dangerous time for a business. This is the point at which the owner is comfortable with
their achievements. Their business is running smoothly. While sales have started to plateau, their profits may still be
increasing, because they are getting better at doing what they do. The owner has decided that their business is at the
right size, they don't want it to grow larger. The owner is in their comfort zone. They see opportunities to increase
their profits incrementally, but they see no need to make significant changes in their business.

The reason this is a dangerous time is that the owner has taken their foot off the accelerator, and is starting
to coast. The success of business is dependent on constant renewal. New products and services, new customers, new
ways of delivering your service. If the firm doesn't invest in constantly rejuvenating their business, business will be
in decline. At first it might still appear to grow (from the momentum of earlier efforts). But after a time, the sales
start to plateau. The firm starts to lose some of their older customers. It becomes more difficult to get new
customers.

8. Explain the new product development process with suitable examples.(NOV/DEC 2006)

There are seven stages of new product development.

1. Generating Ideas 2. Screening Ideas

3. Developing & Testing Ideas 4. Conducting a Business Analysis

5. Product Development 6. Test Market


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7. Commercialization

Generating Ideas

When generating ideas you should start by brainstorming ideas and ask questions about what you want to
achieve. Consider products that will fit the company.

 Creativity is a key point.

 Review the customer's suggestions.

Screening Ideas

When screening ideas you should start by looking at the grand scheme of the development process.

 Then begin to narrow ideas.

 In order to move into development and testing the idea must meet different criteria.

 Does the product fit the overall mission of the company?

Developing and Testing Concepts

The company must ask these questions:

 Why would a customer buy this product?

 What would be the benefit ?

 How might this product be used ?

Test the usefulness of the new product idea with customers and have an understanding of the product as viewed by
the customer.

Conducting Business Analysis

There should be an analysis on the costs, return of investment, cash flow, fixed cost, and variable cost in the long
run.Studies have shown that high risk ideas provide the most successful new products.

New Product Development

In this stage your concepts begin to come together.

 Develop prototypes.

 Assign names and brand identity to the new product.

 Formulate marketing mix.

 It is critical for research and development, engineering, packaging and marketing to use teamwork.

Test Marketing

 Test marketing can be very time consuming, expensive and prone to competitive sabotage.

 Companies must plan carefully during this stage.


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Commercialization

 Companies need to remember to start small.

 They must also plan for a modest product turnout.

 Companies should also consult with other people who have gone through similar processes.

9. Discuss the important features of skimming pricing. Give examples. (MAY/JUNE 2007)

“Skimming” refers to setting initially high prices, and slowly lowering them over time to maximize profits
at every price-sensitive layer in the market. As initial sales slow down, and/or as competitors threaten to introduce
similar products, the price is lowered just enough to make it worthwhile for the next segment to buy.

Several industries use this pricing strategy very effectively. Examples include: fashion (designer originals
and beginning- of-season sales vs. copycat designs and end-of-season sales); publishing (hard cover vs. paperback
books); and sports equipment (new golf club innovations are slowly reduced in price each season as new models are
introduced).

The objective is to achieve the highest possible contribution in a short time period. The product has to be
unique and some segment of the market must be willing to pay the high price. As more segments are targeted and
the product become more available, the price is lowered. The success of this technique depends in the ability and
speed of competitive reaction.

This technique is used when you offer a unique or scarce product with few or no substitutes. The price is set
high, resulting in high margins for the seller. Buyers are those that are willing to pay the price because of the
product's prestige and/or uniqueness. In the case of a scarce but necessary product, customers pay the price because
they have no choice. Often, price skimming is a short-term strategy as competitors enter with their own products,
bringing prices down. In the case of scarce products, either the need passes (salt during an ice storm, for example)
or the shortage is temporary. Before considering this technique, be aware that if your customers feel you have taken
advantage of them, you could be building "bad will" for your business.

10. State the plan to carry out brand preference study with Suitable examples. (MAY/JUNE 2007)

Brand preference not only gives separate identity and recognition to the product but also creates special
brand preference. Branding is a powerful instrument of demand creation and demand retention.

Brand preference study is helpful in knowing the extent to which the brand has more sticking or switching
off effect. Brand preference tendency of customers can be measured through scaling technique using opinion
statements.

The views of the respondents for each statement are got in terms of their levels of agreement or
disagreement to each statement.

For example to identify brand preference of LUX soap, 25 statements are be prepared.
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 For the positive statement strongly agree response gets 5 marks, agree response gets 4 marks and so on.

 For negative statements the scoring order is reversed.

If a particular respondent for a particular brand gets a high score, he has high brand preference and vice-versa.
Based on the opinion of respondents, the level of brand preference can be ascertained

11. What are the approaches in selecting brand names? Bring out the various options in branding.
(NOV/DEC 2007)

Approaches in selecting brand names:

 Easy for customers to say, spell and recall (inc. foreigners)

 Indicate products major benefits

 Should be distinctive

 Compatible with all products in product line

 Used and recognized in all types of media

 Single and multiple words

 Availability, already over 400 car "name plates", this makes it difficult to select a new one.

 Use words of no meaning to avoid negative connotation, Kodak, Exxon

 Can be created internally by the organization, or by a consultancy

 Legal restrictions

Various options in branding

Line Extensions: Existing brand name extended to new sizes or flavors in the existing product category.

Brand Extensions: Brand names extended to new product categories

Multi-Brands: New brand names introduced in the same product category

New Brands: New brand name for a new category product

Co-Brands: Brands bearing two or more well-known brand names.

12. How do physical distribution and marketing logistics practices suit a systems approach. (NOV/DEC
2007)

Logistics management is expressed as the management of all activities providing the coordination of supply-
demand and product movement in order to create the time and place benefits in enterprises. When the logistics
management is analyzed with respect to system approach it is composed of two subsystems called physical supply
and physical distribution. In both subsystems database marketing techniques is applied and thanks to the electronic
communication medium that enterprises are got rid of unnecessary costs and desired distribution service level is
accomplished.
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Physical supply deals with the transportation of the goods from the supplier to the manufacturer and the
storage of raw material used for work in progress.Physical distribution is concerned with transportation and storage
of the finished goods from the manufacturer to the customer, Cost is an important aspect in the logistics function.
Every sub-function of logistics is associated with some cost and the logistics function as a whole proves to be
effective only when its total cost is minimized.

This is the concept behind the application of the total cost approach to logistics. Customer service plays an
important role in the overall fulfillment of the logistics function. Elements of customer service in logistics include
lead time, inventory availability, order fill rate, and order status information. ;

Physical distribution system in logistics management is analyzed with regard to the relations between
production and customers. Physical distribution sub-system defined as the activities carried out after the production
stage of goods till to the deliveries of goods ensures the harmony of production and consumption in an electronic
market medium.

Systematic information concept in logistics management explains the communications between the parties
implementing logistics functions in the management, market and industry data level. Systematic information is a
cornerstone of logistics as a result of logistics activities that involve the efforts providing place and time utility in
enterprises, for the aim of products being presented in the right place, at the right time and in the right amount.

An integrated systems approach would help in managing and coordinating the logistics function. Many
firms find it difficult to manage logistics on their own and outsource the function to other third party and fourth
party service providers.

13. Explain the stages in the Product Life Cycle. (MAY/JUNE- 2009)

Refer to Q.No:1 May/June 2006

14.Explain the concept of brand equity. (MAY/JUNE- 2009)

Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name
compared with those that would accrue if the same product did not have the brand name. And, at the root of these
marketing effects is consumers’ knowledge. In other words, consumers’ knowledge about a brand makes
manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand.
The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are
one of the most valuable assets that a company has.

Brand equity is an intangible asset that depends on associations made by the consumer. There are at least
three perspectives from which to view brand equity:

Financial - One way to measure brand equity is to determine the price premium that a brand commands
over a generic product. For example, if consumers are willing to pay $100 more for a branded television over the
same unbranded television, this premium provides important information about the value of the brand. However,
expenses such as promotional costs must be taken into account when using this method in measure brand equity.
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Brand extensions - A successful brand can be used as a platform to launch related products. The benefits of
brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures, and a lower
risk from the perspective of the consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct financial measures of brand
equity.

Consumer-based - A strong brand increases the consumer’s attitude strength toward the product associated
with the brand. Attitude strength is built by experience with a product. This importance of actual experience by the
customer implies that trial samples are more effective than advertising in the early stages of building a strong brand.
The consumer’s awareness and associations lead to perceived quality, inferred attributes, and eventually, brand
loyalty.

Strong brand equity provides the following benefits:

 Facilitates a more predictable income stream.

 Increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing.

 Brand equity is an asset that can be sold or leased.

However, brand equity is not always positive in value. Some brands acquire a bad reputation that results in negative
brand equity. Negative brand equity can be measured by surveys in which consumers indicate that a discount is
needed to purchase the brand over a generic product.

Alternative Means to Brand Equity

Building brand equity requires a significant effort, and some companies use alternative means of achieving
the benefits of a strong brand. For example, brand equity can be borrowed by extending the brand name to a line of
products in the same product category or even to other categories. In some cases, especially when there is a
perceptual connection between the products, such extensions are successful. In other cases, the extensions are
unsuccessful and can dilute the original brand equity.

Brand equity also can be “bought” by licensing the use of a strong brand for a new product. As in line
extensions, by the same company, the success of brand licensing is not guaranteed and must be analyzed carefully
for appropriateness.

Managing Multiple Brands

Different companies have opted for different brand strategies for multiple products. These strategies are:

Single brand identity - a separate brand for each product. For example, in laundry detergents Procter & Gamble
offers uniquely positioned brands such as Tide, Cheer, Bold, etc.

Umbrella - all products under the same brand. For example, Sony offers many different product-categories under
its brand.
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Multi-brand categories - Different brands for different product categories. Campbell Soup Company uses
Campbell’s for soups, Pepperidge Farm for baked goods, and V8 for juices.

Family of names - Different brands having a common name stem. Nestle uses Nescafe, Nesquik, and Nestea for
beverages.

Brand equity is an important factor in multi-product branding strategies.

15.Explain customer satisfaction.(MAY/JUNE 2008)

Customer satisfaction, a business term, is a measure of how products and services supplied by a company
meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the
four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a
key differentiator and increasingly has become a key element of business strategy. There is a substantial body of
empirical literature that establishes the benefits of customer satisfaction for firms.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of
satisfaction will vary from person to person and product/service to product/service. The state of satisfaction
depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such
as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may
have and other products against which the customer Because satisfaction is basically a psychological state, care
should be taken in the effort of quantitative measurement, although a large quantity of research in this area has
recently been developed.

Exceptional customer service results in greater customer retention, which in turn results in higher
profitability. Customer loyalty is a major contributor to sustainable profit growth. To achieve success, you must
make superior service second nature of your organization. A seamless integration of all components in the service-
profit chain - employee satisfaction, value creation, customer satisfaction, customer loyalty, and profit and growth -
links all the critical dynamics of top customer service.

Sadly, mature companies often forget or forsake the thing that made them successful in the first place: a
customer-centric business model. They lose focus on the customer and start focusing on the bottom line and
quarterly results. They look for ways to cut costs or increase revenues, often at the expense of the customer.

They forget that satisfying customer needs and continuous value innovation is the only path to sustainable
growth. This creates opportunities for new, smaller companies to emulate and improve upon what made their bigger
competitors successful in the first place and steal their customers.

16. Explain brand management. (MAY/JUNE 2008)


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Brand management is the application of marketing techniques to a specific product, product line, or brand.
It seeks to increase the product's perceived value to the customer and thereby increase brand franchise and brand
equity.

Marketers see a brand as an implied promise that the level of quality people have come to expect from a
brand will continue with future purchases of the same product.

This may increase sales by making a comparison with competing products more favorable. It may also
enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of
profit it generates for the manufacturer.

This can result from a combination of increased sales and increased price, and/or reduced COGS (cost of
goods sold), and/ or reduced or more efficient marketing investment.

All of these enhancements may improve the profitability of a brand, and thus, "Brand Managers" often carry
line-management accountability for a brand's P&L profitability, in contrast to marketing staff manager roles, which
are allocated budgets from above, to manage and execute.

Brand Management is often viewed in organizations a broader and more strategic role than Marketing alone,

Brand management involves the design and implementation of marketing programs and activities to build,
measure, and manage brand equity.

The brand management process is defined as involving four main steps:

1. Identifying and establishing brand positioning and values

2. Planning and implementing brand marketing programs

3. Measuring and interpreting brand performance

4. Growing and sustaining brand equity

Brand has the essential importance for the success of enterprise, having in mind that, in contemporary business
conditions, it is more difficult to realize wanted business results without the brand. Branding process has become
more important and provocative than ever before and products without brand are fewer in market.

Successful brand becomes the symbol which provides some important functions for customers and increases
the product value in their eyes. Brand identifies source or maker of a product and allows customers to assign
responsibility to particular manufacturer or distributor. It also allows customers to lower search costs for products.

Branding helps product differentiation and creating good image which could be used for creating corporate
image. Promotion of branded products leads to the increase of selected demand, which helps enterprise to increase
its market share. Brand could also stimulate repeated buying and increase customer loyalty, which results in lower
price elasticity. Successful brand enables expanding the brand on other products and prestige creation, as well as the
legal protection of unique product characteristics.
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17. Write short notes on the following. (Nov/Dec 2008)

a. What is Brand Equity

Brand equity is a set of assets and liabilities linked to a brand’s name and symbol that add to subtract from
the value provided by a product or service to ad firm and / or that firm’s customers.

There are many ways to measure a brand. Some measurements approaches are at the firm level , some at
the product level and still others are at the consumer level

Firm level

Firm level approaches measures the brand as an financial asset.

For Example

If you were to take the value of the firm, as derived by its market capitalization and then subtract tangible
assets and measurable intangible assets the residual would be the Brand Equity.

Product level

The classic product level brand measurement example is to compare the price of a no name or private label
product to an equivalent branded product. The difference in price assuming all things equal is due to be the brand.

Consumer level

This approach seeks to measure the awareness (recall and recognition) and brand image (the overall associations
that the brand has.)

b. What is Brand Portfolio


Brand Portfolio planning is a periodic discrete event that allows managers to step back from the crush of
daily problems and chart the course ahead.
There are multiple Brand Portfolio Planning
1. These range from simple organizational charts called brand architecture
2. The problem with either type of approach is that the former leaves mangers uncertain about what they
should do next while the latter leaves them wondering how to get started.
Brand positioning
When a new brand appears in the market, the consumer gets acquainted with it and starts collecting
information about it. On the basis of this information the consumer creates an opinion of the brand and establishes a
brand image. For a stable market position of a brand, consumer awareness of the new brand on the market is not
sufficient. The consumer must prefer a brand and have a positive assessment of it as well as considering it in its
purchasing decisions. The target position means deciding on the target image of a brand and how the consumers
should compare it to other competitive brands.
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The market position of a brand shows where a specific brand is located. It also shows the relationship to
competitive brands. We can determine the market position of a brand on the basis of the answers to the following
four questions:
1. Why (which benefits and advantages does the new brand bring to the consumer)
2. When (determining the opportunities for which the brand is /most suitable)
3. For whom (it is about the determination of the consumer of a brand or target group)
4. Against whom (determining the main competitive brand

Brand Extension

Brand stretching is applying an existing brand to a completely different business area or a new product or
service- such as Cadbury’s entry into cola market. The risk attached to brand stretching is that failure in the new
field may affect the core product

18. Explain the concept of brand equity. (MAY/JUNE- 2009)

Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name
compared with those that would accrue if the same product did not have the brand name. And, at the root of these
marketing effects is consumers’ knowledge. In other words, consumers’ knowledge about a brand makes
manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand.
The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are
one of the most valuable assets that a company has.

Brand equity is an intangible asset that depends on associations made by the consumer. There are at least
three perspectives from which to view brand equity:

Financial - One way to measure brand equity is to determine the price premium that a brand commands over a
generic product. For example, if consumers are willing to pay $100 more for a branded television over the same
unbranded television, this premium provides important information about the value of the brand. However,
expenses such as promotional costs must be taken into account when using this method in measure brand equity.

Brand extensions - A successful brand can be used as a platform to launch related products. The benefits of brand
extensions are the leveraging of existing brand awareness thus reducing advertising expenditures, and a lower risk
from the perspective of the consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct financial measures of brand
equity.

Consumer-based - A strong brand increases the consumer’s attitude strength toward the product associated with
the brand. Attitude strength is built by experience with a product. This importance of actual experience by the
customer implies that trial samples are more effective than advertising in the early stages of building a strong brand.
The consumer’s awareness and associations lead to perceived quality, inferred attributes, and eventually, brand
loyalty.

Strong brand equity provides the following benefits:


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 Facilitates a more predictable income stream.

 Increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing.

 Brand equity is an asset that can be sold or leased.

However, brand equity is not always positive in value. Some brands acquire a bad reputation that results in negative
brand equity. Negative brand equity can be measured by surveys in which consumers indicate that a discount is
needed to purchase the brand over a generic product.

Alternative Means to Brand Equity

Building brand equity requires a significant effort, and some companies use alternative means of achieving
the benefits of a strong brand. For example, brand equity can be borrowed by extending the brand name to a line of
products in the same product category or even to other categories. In some cases, especially when there is a
perceptual connection between the products, such extensions are successful. In other cases, the extensions are
unsuccessful and can dilute the original brand equity.

Brand equity also can be “bought” by licensing the use of a strong brand for a new product. As in line
extensions, by the same company, the success of brand licensing is not guaranteed and must be analyzed carefully
for appropriateness.

Managing Multiple Brands

Different companies have opted for different brand strategies for multiple products. These strategies are:

Single brand identity - a separate brand for each product. For example, in laundry detergents Procter & Gamble
offers uniquely positioned brands such as Tide, Cheer, Bold, etc.

Umbrella - all products under the same brand. For example, Sony offers many different product-categories under
its brand.

Multi-brand categories - Different brands for different product categories. Campbell Soup Company uses
Campbell’s for soups, Pepperidge Farm for baked goods, and V8 for juices.

Family of names - Different brands having a common name stem. Nestle uses Nescafe, Nesquik, and Nestea for
beverages. Brand equity is an important factor in multi-product branding strategies.

19. A manufacturer is contemplating introducing a product that is inferior to its competition in its
performance design and functionality. However, the manufacturer believes that ‘good brand marketing’ can
overcome these shortfalls. Why is this thinking incorrect? (MAY/JUNE- 2009)

Brand marketing focuses on making the right impression on prospective consumers. A company will
discover and develop different strategies to convey the right image for the company.

Brand marketing will include various areas before it finally presents itself on the Internet or in a magazine.
There are two aspects of a good brand, a psychological aspect and the experiential aspect.
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The psychological aspect of a brand is the brand image. It is the symbol that is left in people’s minds.

The brand on its own demonstrates what the brand owner is offering to its consumers. Good marketers have
learned how to create a brand that has its own characteristics that make it special or unique.

Brand recognition is acquired when a brand builds enough trust among the marketplace and it then enjoys a
positive sentiment in the marketplace.

Brands like Nike have achieved what is referred to as a brand franchise. Anything they slap their brand on
will achieve some level of success because of the trust they have built with their consumers.

Branded products and services generally demand higher prices. Consumers often select the branded
products based on its reputation and quality.

Brand marketing is important to some degree because manufacturers want their prospects to know about
them and eventually give them their business because they are the one that they have in mind when they are
thinking about getting a mortgage.

However, the downside of brand marketing is that it often takes way too much money to even begin to
penetrate a market. The other negative part of brand marketing is the fact that you can’t really track manufacturers
true ROI, or return on investment for their marketing dollar.

Manufacturers quickly learned to build their brand’s identity and personality such as youthfulness, fun or
luxury.

Manufacturers began to recognize the way in which consumers were developing relationships with their
brands in a social/psychological/anthropological sense.

20.Discuss the merits of Customer relationship marketing. Describe in detail a company who is in business
today that models relationship marketing. (MAY/JUNE- 2009)

Merits of Customer Relationship Marketing:

a) To give enterprise a 360° view of each customer for consistent and unified^ contact with that customer
whenever anyone anywhere in the-enterprise deals with that customer. < -

b) This knowledge increases the opportunities for sales and the effectiveness of customer service.

c) To enable firm customers to have a consistent view of your enterprise, regardless of the way the customer
contacts them. This improves customer satisfaction and customer retention.

d) To enable front office staff to perform sales, service and marketing tasks more efficiently as a team,
increasing expertise and reducing costs.
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e) CRM describes a strategy used to manage and report customer/ prospect/partner/contact interactions with
enterprise contacts including inside and outside sales, marketing, billing, shipping and customer service and
support.

f) CRM is an enterprise-wide corporate strategy for presenting a single face, sometimes called a unified
marketing message, to the customer. It responds to issues relating to sharing customer data and providing a
seamless contact and fulfillment experience for the customer.

g) CRM front-end applications usually integrate with backend systems such as accounting and manufacturing
for a true enterprise-wide cost reduction solution.

h) Provide better customer service

i) Increase customer revenues

j) Discover new customers

k) Cross sell/Up Sell products more effectively

l) Help sales staff close deals faster

m) Make call centers more efficient

n) Simplify marketing and sales processes

Modeling Relationship Marketing in today’s business:

In today’s competitive business environment, a successful CRM strategy cannot be implemented by only
installing and integrating a software package designed to support CRM processes.

A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes
training of employees, a modification of business processes based on customers’ needs and an adoption of relevant
IT-systems. (including soft- and maybe hardware) and/or usage of IT- Services that enable the organization or
company to follow its CRM strategy. CRM-Services can even redundantize the acquisition of additional hardware
or CRM software-licences. The basic technology compartments of a CRM strategy involve firstly a database for
customer life-cycle information, including orders, requests, complaints and so on.

Next, customer needs and profitability projection are made into plans which are then tracked through software.
Another aspect is business modeling of whether goals were met and models of customer segments worked as fore-
casted. Learning systems are put in place that train staff and improve processes to more effectively achieve goals.

a) Voice recognition, video pattern matching, statistical analysis are used to determine profitability
of customer relationship policies.

b) Profiling technology is used to form networks that allow customers to interact with the business,
fellow customers, prospective customers, and so on.

c) The ongoing alignment of these basic building blocks distinguishes an elegant seamless- CRM
implementation which successfully builds mutually valuable relationships.

21 Explain the new Product development process with suitable examples(June 2010)
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Refer to Q.No 3 (May/June 2006)

22. Describe the strategies suitable Growth & Maturity stage of PLC (June 2010)

Refer to Q.No 7(May/June 2006)

23.Outline the stages of new Product development(Nov / Dec 2010)

Refer to Q.No. 3 (MAY/JUNE 2006)

24.Explain the channel design process. (Nov/Dec 2010)

CHANNEL MANAGEMENT

According to Philip Kotler, “ Every producer seeks to link together the set of marketing intermediaries that
best fulfill the firm’s objectives. This set of marketing intermediaries is called the marketing channel (also called as
trade channel or channel of distribution.)

A system of marketing institutions that promotes the physical flow of goods and services, along with
ownership title, from producers to consumer or business user; also called a distribution channel. For marketers the
distribution decision is primarily concerned with the supply chain’s front-end or channels of distribution that are
designed to move the product (goods or services) from the hands of the company to the hands of the customers

Characteristics of Distribution channel:

1) Route or pathway:

2) Flow:

3) Composition:

4) Functions:

5) Remuneration:

6) Time Utility:

7) Convenience Value:

8) Possession Value:

9) Marketing tools:

10) Supply-demand Linkage:

Channel Functions:

1) Information Provider

2) Price stability.

3) Promotion
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4) Financing

5) Title

6) Help in Production Function

7) Matching demand and supply.

- Contractual: Finding out buyers and sellers.

- Merchandising: Producing goods that will satisfy market requirements.

- Pricing: Process of attaching value to the product in monetary terms.

- Propaganda: Sales promotion activities.

- Physical Distribution: Distribution activities.

- Termination: Settlement of contract, i.e., paying the value and receiving the goods.

8) Pricing

9) Standardizing Transactions.

10) Matching Buyers and Sellers.

Concepts of Channel Management:

1. The Ex Ante phase: The ex ante phase involves all the activities that are associated with the design and
establishment of the distribution channel actually starts functioning.

i) Designing channel structure.

ii) Establishing the channel.

a) Appointing processing Entities.

b) Infrastructure Development.
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c ) Miscellaneous Functions.

2. The Ex-paste Phase:

While these activities are just preparatory activities, the main task of a channel manager starts only after the
channel is set up and starts functioning. It comprises following two set of activities:

i) Motivating Channel Members:

ii) Resolving Conflicts among Channel Members.

The Role of Marketing Channels in Marketing Strategy

Channels provide the means by which the firm moves the goods and services it produces to ultimate users

 Facilitate the exchange process by cutting the number of contacts necessary

 Adjust for discrepancies in the market’s assortment of goods and services via sorting

 Standardize exchange transactions

 Facilitate searches by both buyers and sellers

Factors Influencing Channel Decisions

1. Relating to Product Characteristics

• Perishability

• Industrial / consumer products

• Unit values

• Style obsolescence

• Weight & technicality

• Standardized Products

• Purchase Frequency

• Newness & Market Acceptance

• Seasonally

• Product Breadth

II Relating to Company Characteristics

• Financial Strength

• Marketing Policies
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• Size of the company

• Past Channel Experience

• Product Mix

• Reputation

III Factors relating to Market or consumer Characteristics

• Consumer Buying habits

• Location of the market

• Number of customer

• Size of orders

IV Factors relating to middleman consideration

• Sales volume potential

• Availability of middleman

• Middlemen’s Attitude

• Service provided by middlemen

• Cost of channel

V Factors relating to environmental characteristics

• Economic conditions

• Legal restriction

• Competitors channel

• Fiscal structure

Channels Using Marketing Intermediaries

 Wholesaler / Stockist/ Distributor

 Retailer

 Sole Selling Agent

 C & F Agents

 Semi- Wholesaler

 Value added resellers

Types of Marketing Channels


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Hybrid/Multi/Dual Distribution: Network that moves products to a firm’s target market through more than one
marketing channel

Reverse Channels: Channels designed to return goods to their producers

Determining Distribution Intensity

Number of intermediaries through which a manufacturer distributes its goods

Intensive distribution: channel policy in which a manufacturer of a convenience product attempts to saturate the
market

Selective distribution: channel policy in which a firm chooses only a limited number of retailers to handle its
product line

Exclusive distribution: channel policy in which a firm grants exclusive rights to a single wholesaler or retailer to
sell its products in a particular geographic area

Channel Management

The administration of existing channels to secure the cooperation of channel members in achieving the firm’s
distribution objectives.
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Emergence of distribution channel could be attributed to the need for facilitating exchanges by speeding up the time
consuming matching process between buyers and sellers.

Channel Management Decisions

1. Selecting Channel Members

During the selection process, producers should determine what characteristics distinguish the better
intermediaries. They will want to evaluate number of years in business, other lines carried, growth and profit
record, solvency, cooperativeness, and reputation. If the intermediaries are sales agents, producers will want to
evaluate the number and character of other lines carried and the size and quality of the sales force.

2. Training Channel Members

Companies need to plan and implement careful training programs for their distributors and dealers because
the intermediaries will be viewed as the company by end users. Microsoft, for example, requires third-party service
engineers who work with its software applications to complete a number of courses and take certification exams.
Those who pass are formally recognized as Microsoft Certified Professionals, and they can use this designation to
promote business.

3. Motivating Channel Members

The most successful firms view their channel members in the same way they view their end users. This
means determining their intermediaries’ needs and then tailoring the channel positioning to provide superior value
to these intermediaries. To improve

intermediaries’ performance, the company should provide training, market research, and other capability-building
programs. And the company must constantly reinforce that its intermediaries are partners in the joint effort to
satisfy customers.

4. Evaluating Channel Members

Producers must periodically evaluate intermediaries’ performance against such standards as sales-quota
attainment, average inventory levels, customer delivery time, treatment of damaged and lost goods, and cooperation
in promotional and training programs. A producer will occasionally discover that it is paying too much to
particularintermediaries for what they are actually doing

5. Modifying Channel Arrangements

Channel arrangements must be reviewed periodically and modified when distribution is not working as
planned, consumer buying patterns change, the market expands, new competition arises, innovative distribution
channels emerge, or the product moves into later stages in the product life cycle.
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Channel Conflict

Horizontal Conflict

Most often, horizontal conflict causes sparks between different types of marketing intermediaries that handle
similar products.

Sometimes results from disagreements among channel members at the same level.

Vertical Conflict

Channel members at different levels find many reasons for disputes

Example: when retailers develop private brands to compete with producers’ brands or when producers establish
their own retail outlets or WWW Sites.

Multichannel conflict

Exists when the manufacture has established two or more channels that sell to the same market

Causes of channel conflict

• Goals incompatibility

• Unclear roles & rights

Managing Channel conflict

• Super ordinate goals

• Exchange persons

• Cooptation

• Mediation

• Diplomacy

25.Explain the new Product development process with suitable examples (June 2011)

Refer to Q.No 3 (May/June 2006)

UNIT – IV BUYER BEHAVIOUR

Part A

1. What is consumerism? (MAY/JUNE 2006)

Consumerism is a term used to describe the effects of equating personal happiness with purchasing material
possessions and consumption. It is used to describe the tendency of people to identify strongly with products or
services they consume, especially those with commercial brand names and obvious status-enhancing appeal.
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It can also refer to economic policies that place an emphasis on consumption, and, in an abstract sense, the belief
that the free choice of consumers should dictate the economic structure of a society.

2. What are the different types of buying behavior? Mention the parameter used to classify these types.
(NOV/DEC 2006)

Routine Response/Programmed Behavior—buying low involvement frequently purchased low cost items; need
very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods,
milk etc.

Limited Decision Making-buying product occasionally. When you need to obtain information about unfamiliar
brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering.
Examples include Clothes-know product class but not the brand.

Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought
products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers,
education. Spend a lot of time seeking information and deciding.

Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the
buying process.

Impulse buying, no conscious planning.

3. Who is an industrial buyer? (MAY/JUNE 2007)

An industrial buyer is one who acquires goods and services used in The production of other products
or services that are sold, rented, or supplied to others

Question Number :4 (May / June 2007)

4. Who is a satisfied customer? (MAY/JUNE 2007)

A satisfied customer is one who experiences the feeling of pleasure resulting from comparing a
product perceived performance in relation to his expectations. Whenever the performance matches the
expectations the customer is satisfied.

5. How does the concept of ’Value-Cost Gap’ facilitate customer? (NOV/DEC 2007)

There was a growing gap between cost and value, account for highly leveragable opportunity to extract
unprecedented value. Adding new business functions places a relatively small cost burden on the customer. Much of
the infrastructure is in place and a sunk cost, with much of the additional required infrastructure purchases available
at low commodity prices.

The value that can be derived from incremental functionality added to current infrastructure has non-linear
multiplier (interaction) effect. The old, pre-network, model of layering marketing on isolated systems had a
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relatively simple, and comparatively small, additive effect on a system's value. The current network model,
however, allows new marketing components which leverage the network to increase business value exponentially.

6. How does ’Margin-Turnover’ framework operate in retailing? (NOV/DEC 2007)

This framework is based on the intricate relationship between retail margin and retail turnovers. Margin is a
percentage markup at which the inventory in the store is sold, and the turnover is the number of times the average
inventory is sold in a given year. On the basis of the margin-turnover relationship, retail establishments can be
subdivided into four categories:

 High Margin - High turnover


 High Margin Low turnover
 Low Margin - High turnover
 Low Margin - Low turnover

7. How does 'Psychoanalytic model' explain buying behavior? (NOV/DEC 2007)

This model is well known in at least some of its aspects and is widely used by advertisers. Its basic thesis is that
the individual human being is a divided kingdom, where behavior rarely allows of a simple explanation. The
individual maintains a precarious balance between emotion and rationality, between instinctive drives and socially
acceptable behavior.

Using this model, the marketer can construct his message so that it appeals to the parts of the psyche which are
not accessible to the consciousness but which are still likely to determine behavior. One disadvantage of this model,
of course, is that it is difficult to make generalizations about any particular market segment. However, very
effective advertising campaigns have been devised which appeal to the customer's private world of hopes, fears and
dreams.

8. What is the scope of ’customer database’? (NOV/DEC 2007)


 Understanding customers
 Managing customer service
 Understand the market
 Understanding competitors
 Managing marketing campaigns

9.Define ’buying-out' brands. (NOV/DEC 2007)

"Buying Out" brands are the brands that will no longer be available in the market. This ensures that the
buyer's product will not be sold to another person from that point on. Previous purchases of the product will
continue to be honored, but no future transaction will not be there.

10.Who influences individual buyer? (MAY/JUNE 2008)

 An individual buyer is one that is not purchasing goods for their business or institution.
 An individual buyer does not buy according the specifications he or she prepares.
 Buyer must buy subject to the rules and prescriptions under which the seller operates.
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11.What is demand estimation? (MAY/JUNE 2008)

Demand estimation is used for performance planning and in making policy decisions, managers must have
some idea about the characteristics of the demand for their product(s) in order to attain the objectives of the firm or
even to enable the firm to survive.

12. What is post purchase behavior? (NOV/DEC 2008)

Post-purchase behavior is very significant for first-time users (First time use is defined as consumption not
purchase as it is not usually linked with direct purchase by the final user). This phenomenon decreases as use
become more prevalent, though no specific dividing timeline or use could be identified where such evaluation loses
significance.

13. What are the steps in consumer decision making? (May / June 2009)

e. Problem Recognition

f. Information search

g. Evaluation of alternatives

h. Purchase Decision

i. Post-purchase behavior

14. What are the different types of buying behavior?

15. State the bases of Customer Relationship Management (June 2010)

1. to identify and target their best customers, manage marketing campaigns and generate quality leads for the
sales team.
2. to improve telesales, account, and sales management by optimizing information shared by multiple
employees, and streamlining existing processes (for example, taking orders using mobile devices)
3. with the aim of improving customer satisfaction and maximizing profits
4. information and processes necessary to know their customers, understand and identify customer needs and
effectively build relationships between the company, its customer base, and distribution partners.

16. What is Consumerism? (Nov /Dec 2010)

Refer to Question Number :1 (May / June 2006)


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17. What do you mean by consumer demographics? (June 2011)

The set of attributes that describe a specific population, such as average age, life expectancy, and reproductive
characteristics so that consumers may be targeted for marketing and advertising based on these characteristics.

1. gender,
2. race,
3. age,
4. disabilities,
5. mobility,
6. home ownership,
7. employment status, and
8. location

18.What is database marketing?

It is the process of building, maintaining and using customer databases and other databases (products, suppliers,
resellers) for the purpose of contacting, transacting and building relationships.

19. What is customer mailing list?

It is simply a set of names, addresses, and telephone numbers, which contains much more information.

20.Who is a decider in buying centre role?


Organizational members who have decision making power and who decide about the purchase e.g., engineer
deciding specification or vice- president finance.

21.Who is an influencer in buying centre role?


Individuals in the organization influence the decision making process by providing information on criteria for
buying consultants. E.g. Inside the organization R&D specialist, outside the organization - consultants

Part B

1.Discuss the factors affecting the consumer buying behavior in Indian context. (NOV/DEC 2006)

Consumers do not make their decisions in a vacuum. Their purchases are highly influenced by cultural
social, personal, and psychological factors. For the most part, they are "non controllable" by the marketer but must
be taken in to account. We want to examine the influence of each factor on a buyer's behavior.

Cultural Factors

In a diversified country like India cultural factors exert the broadest and deepest influence on consumer
behavior; we will look at the role played by the buyer's culture, subculture, and social class.

Culture: Culture is the most fundamental determinant of a person's wants and behavior. Whereas lower creatures are
governed by instinct, human behavior is largely learned. The child growing up in a society leans a basic set of
values, perceptions, preferences and behaviors through a process of socialization involving the family and other key
institution .Thus a child growing up in America is exposed to the following values: Achievement and success,
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activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort,
humanitarianism, and youthfulness.

Subculture:

Each culture contain smaller group of subculture that provide more specific identification and socialization
for its members. Four types of subculture can be distinguished .Nationality groups such as the Irish, polish, Italians,
and Puerto Ricans are found with in large communities and exhibits distinct ethnic tastes and Jews represent
subculture with specific culture preference and taboos.

Social Class:

Virtually all human societies exhibit social stratification. Stratification sometimes takes the form of a caste
system where the member of different caste is reared for certain roles and cannot change their caste membership
.More frequently, stratification takes the form of social classes.

Social Classes have several characteristics. First, Person with in each social class tend to behave more alike
than persons from two different social classes. Second, persons are perceived as occupying inferior or superior
positions according to their social class. Third, a person's social class is indicated by a number of variables, such as
occupation, income, wealth, education, and value orientation, rather than by any single variable , fourth, individuals
are able to move from one social class to another up or down during their lifetime. The Extent of this mobility
varies according to the rigidity of social stratification a given society.

Social Factors:

A consumer's behavior is also influenced by social factors, such as the consumer's reference group, family,
and social roles and statuses.

Reference Group:

A person's behavior is strongly influenced by many group .A persons reference group are those groups that
have a direct (face to face) or indirect influence on the person's attitudes or behavior. Group having a direct
influence on a person are called membership group, These are group to which the person belongs and interacts.
Some are primary groups. With which there is fairly continuous interaction, such as family, friends, neighbors, and
co-workers. Primary group tend to be informal. The person also belong to secondary group, which tend to be more
formal and where there is less continuous interaction: they include religious organizations, professional
associations, and trade unions.

Family Group:

Members of the buyer's family can exercise a strong influence on the buyer's behavior. We can distinguish
between two families in the buyer's life. The family of orientation consists of one's parents. From parents a persons
acquires an orientation towards religious, politics, and economics and a sense of personal ambitions, self -worth,
and love. Even if the buyer no longer interacts very much with his or her parents, the parents influence on the
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unconscious behavior of the buyer can be significant. In countries where parents continue to live with their
children, their influence can be substantial.

In case of expensive products and services, husband and wives engage in more joint decision making. The
market needs to determine which member normally has the greater influence in the purchase of a particular
products or services. Either the husband or the wife , or they have equal influence . The following products and
services fall under such: Husband - dominant: life insurance, automobiles, television Wife - dominant: washing
machines, carpeting, non -living - room furniture, kitchenware Equal: Living - room furniture, vacation, Housing,
outside entertainment

2. Explain CRM with suitable examples. Why is it important in modern day business context?
(NOV/DEC 2006)

Customer Relationship Management:

It covers methods and technologies used by companies to manage t h e i r relationships with clients. Information
stored on existing customers (and potential customers) is analyzed and used to this end. Automated CRM processes
are often used to generate automatic personalized marketing based on the customer information stored in the

system.

Operational CRM Analytical CRM

Contact Centers Business intelligence

Data aggregation tools Data mining

Transactional/self-service web sites Customer tiering strategies

Customer-centric business processes Incentive/loyalty drivers

Measures (cost, cycle time, satisfaction) Triggers for cross sell & up sell

CRM is commonly defined in two broad categories: Operational CRM and Analytical CRM. Operational
CRM generally refers to those products, services and operational capabilities that enable an organization to "take
care of its customers." Contact centers, data aggregation systems and Web sites are just a few examples. Analytical
CRM refers to the strategies and tools that drive customer- centric business decisions. Business intelligence
systems, data mining tools and customer-tier strategies fall roughly into this category.

Technology vendors, for example, tend to define CRM as whatever they have to offer. Here are some
examples of systems and technologies that have been co-opted into "CRM" solutions:

 A "mailing list" is now known as a "CRM system"


 "Home page" has become "e-CRM"
 The "call center" is now referred to as a "CRM channel"
 "Research and analysis" is now called "analytical CRM"
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Why CRM is important in modern day business context? (NOV/DEC 2006)

 Providing online access to product information and technical assistance around the clock.
 Identifying what customers value and devising appropriate service strategies for each customer
 Providing mechanisms for managing and scheduling follow-up sales calls
 Tracking all contacts with a customer
 Identifying potential problems before they occur
 Providing a user-friendly mechanism for registering customer complaints
 Providing a mechanism for handling problems and complaints
 Providing a mechanism for correcting service deficiencies
 Storing customer interests in order to target customers selectively
 Providing mechanisms for managing and scheduling maintenance, repair, and on-going support

Technical Considerations

The following factors need to be considered:

Scalability: the system should be highly scalable, as the volume of data stored in the system grows over time.

Communication channels: CRM can interface with a variety of different channels (phone, WAP, Internet etc.)

Workflow - a company's business processes need to be represented by the system with the ability to track the
individual stages and transfer information between steps

Assignment - the ability to assign requests, such as service requests, to a person or group.

Database - the means of storing customer data and histories (in a data warehouse)

Customer privacy considerations, such as data encryption and legislation

Improving Customer Relationships

CRM applications often track customer interests and requirements, as well as their buying habits. This
information can be used to target customers selectively. Furthermore, the products a customer has purchased can be
tracked throughout the product's life cycle, allowing customers to receive information concerning a product or to
target customers with information on alternative products once a product begins to be phased out. repeat purchases
rely on customer satisfaction, which in turn comes from a deeper understanding of each customer and their
individual needs. CRM is an alternative to the "one size fits all 1' approach. In industrial markets, the technology can
be used to coordinate the conflicting and changing purchase criteria of the sector.

Privacy and Ethical Concerns

The data gathered as part of CRM raises concerns over customer privacy and enables persuasive sales
techniques. However, CRM does not necessarily involve gathering new data, but also includes making better use of
customer information gathered as a result of routine customer interaction.
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The privacy debate generally focuses on the customer information stored in the centralized database itself,
and fears over a company's handling of this information. For example, there is virtually no way a consumer can
determine if the company shares private (personally identifiable) data with third parties. Furthermore, companies
may not always accurately declare to the consumer the types of information collected by CRM systems and the
specific purposes for which the information is used.

3. Explain Brand management practices in India. (MAY/JUNE 2007)

Brand is defined as a name, term, sign, symbol, or design, or a combination of them, intended to
differentiate goods and services of a seller from those of competitors.

Brand Management practices in India:

Branding poses several challenges to the marketer. The key decisions are listed below:

Branding Decision:

 Brand • No Brand

Brand sponsor Decision:

 Manufacturer brand • Distributor brand


 Licensed brand

Brand Name Decision:

 Individual names
 Separate family name
 Blanket family name
 Company individual name

Brand Strategy Decision

 Line extension
 Multi-brands
 Co-brands
 Brand extension
 New brands

Brand Repositioning Decision

 Repositioning
 No - Repositioning

4.What are the factors that determine customer satisfaction? Explain. (MAY/JUNE 2007)
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Customer satisfaction, a business term, is a measure of how products and services supplied by a company
meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the
four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a
key differentiator and increasingly has become a key element of business strategy.

Organizations are increasingly interested in retaining existing customers while targeting non-customers;
measuring customer satisfaction provides an indication of how successful the organization is at providing products
and/or services to the marketplace.

Factors used to determine customer satisfaction on products/

Services:

I.Capability

2. Usability

3. Performance

4.Reliability

5. Installability

6. Maintainability

7. Documentation

If a company wants to investigate it themselves, look at firm specific factors like business contacts,
reputation, advertising, and brand name can help determine customer satisfaction.

5. Describe the value-creation and value delivery process in the present day context. Value
Creation(NOV/DEC 2007)

Companies create the value that they offer to customers in a five- stage process that spans offer-market
development, demand creation, sales conversion, satisfaction fulfillment, and strategic development. Value creation
thus integrates product development, marketing, sales, service, and training.

Value Creation Consists of a Five-Phase Process

Offer-Market Development

In this stage, the brand firm develops a relevant offering (a product or service that meets a need) and
through research identifies a market for it. The firm also develops the market infrastructure (field sales
organization, repair depots, customer help desks, etc.) necessary to support the offering. This stage ends and the
next stage begins when brand managers have defined a pre-emptive positioning.

Demand Creation
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With an un-served customer need, a world-beater product, and service now locked and loaded in the
branding machine, brand managers must now generate demand. This generally corresponds to traditional marketing
and product management activities: packaging, distribution, advertising, direct mail, publicity, point of purchase
merchandising, and training of support staff, field operations, and distribution partners. But the principal task
remains development of the unique selling proposition, at which point brand managers exit this stage.

Sales Conversion

In this stage, the firm converts demand into sales to paying customers. Brand managers identify points of
market presence (retail outlets, field sales force, channel partners, catalogs and direct mail, and other sales
locations), work hard to achieve maximum visibility in each venue, and develop programs for the ongoing care and
feeding of the people who staff these points of market presence. Customers then begin to buy the branded product
or service.

Satisfaction Fulfillment

In this stage, the customer transforms the offering into a satisfaction by successfully buying and using it.
The offering meets expectations, solves a problem, or otherwise satisfies the customer. In addition to excellent
product or service design, ease of use, training, and peer group support play an important role. At this point, it
becomes evident whether or not brand managers have anticipated problems that might arise and have made
appropriate contingency plans.

Strategic Development

In this fifth stage of value creation, brand managers must evaluate the future and the brand's place in it.

Value Delivery Process

The delivery process consists of three parts. The first phase, choosing the value, represents the "homework
marketing must do before any product exists. The marketing staff must segment the market, select the appropriate
market target, and develop the offering's value positioning. The formula "segmentation, targeting, positioning (STP)
is the essence of strategic marketing. Once the business unit has chosen the value, the second phase is providing the
value, Marketing must determine specific product features, prices, and distribution. The task in the third phase is
communicating the value by utilizing the sales force, sales promotion, advertising and other communication tools to
announce and promote the product. Each of these value phases has cost implications.

6. Briefly explain the specialty in business buying due to characteristics of market/product. (NOV/DEC 2007)

For many business products, there exist only a small number of users. For example, for a product like
automobile testing equipment, only a few large buyers are there, like General Motors, Bavarian Motor works,
Telco, Bajaj, Ashok Leyland and many other large car manufacturers.

This enhances the business clout of the business buyers as a class. The seller has to cultivate every buyer in
his product category and maintain close and continuous contact so that no sales opportunities are overlooked.'
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Concentration of Buyers

The buyers for a given industrial product are not only few in number, they are also usually concentrated in
certain geographic areas. It gives them a special bargaining power over the sellers.

Direct, One-to-One Relationship with seller

In the consumer market, direct contact between the producer and the consumer is rare, whereas in the
business market, one-to-one contact between producer and the buyer is the normal practice, especially when the
products involved are special and technology based.

Technical Support for Buying

The business buyer needs considerable technical service and assistance throughout the purchase process,
especially when the purchase involves complex products. Any error the business buyer makes can prove to be very
costly for his firm. This makes his task very responsible as well as sensitive.

Business Buyer may also buy through Intermediaries

Though in most product categories, direct producer-to-user distribution is the practice, there are situation in
business buying that need intermediaries.

Sometimes, the buyers are widely distributed geographically demanding a relatively large sales force, which
may be uneconomical for a producer. Some manufacturer may not have enough financial and manpower resources
to perform all the distribution tasks; such situation requires the involvement of middlemen.

Sometimes, the business market is a 'thin' market from both geographic and sales angles. In order to save
costs, manufacturers use wholesale middlemen. The middlemen may be handling competing or non-competing lines
of products.

There are situations where the business buyers place frequent orders consisting of many items needing rapid
delivery service. Such situations are better handled by middlemen.

Sometimes there exist large numbers of small business buyers who place smaller orders more frequently.
Such situations too are better left to intermediaries.

Business Buying is Partnering

Today, business buying has become a crucial management task. For any firm, the stakes here are quite high.
The funds involved are huge, and any savings is precious. From the quality and end product performance angle too,
it is buying that attracts full attention. The best raw material, equipment and other inputs have to be obtained at the
most competitive prices. That is why supply chain management has emerged as a key concept today. Closer
relationships between the buyer and supplier are no longer enough; it has yielded place to integration of the
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resources and facilities of the buyer with those of the supplier. The concept that is in vogue in business buying is
partnership, i.e. partnering between the buyer and suppliers.

7. Discuss about the market based and process based methods of assessing competitive advantage.
(NOV/DEC 2007)

Market based methods of assessing competitive advantage

 ''Unique way to meet the needs of a niche market


 Brand recognition in the market
 Proprietary Or trade secrets for operations
 Customized or proprietary software or technology
 Patents and trademarks
 Unique combination of products/services
 Access to leading or scientific research
 Highly skilled and Creative staff
 Reputation for quality and innovation

Process-based methods for accessing Competitive Advantage

Because of continuing changes, in the business environment, .organizations have to adapt themselves to new
challenges. One 'solution is the development of organizational operations base on the enhancement and integration
of business processes. Process vation, and process-based Organization development enhances the speed,
transparency arid efficiency of organizational' activities, and provides the possibility of tighter management control.
The firms provide art effective process analysis, business impact analysis, process development and
implementation, with the support of newly developing modeling solutions for attaining competitive advantage.
Process management and process redesign are the requirements of several IT implementations, e.g. ERP systems,
but clearly defined processes can be supported by automated workflow systems and Other IT solutions.

8. How does market-driven quality approach evolve? Explain(NOV/DEC 2007)

Market-driven quality (MDQ) is defined as letting the market, meaning the price, determine the quality
standards a business applies to its products.

There are three key aspects of a market-driven quality approach: .

 Capturing the voice of the market


 Aligning product development and corporate strategy, and
 Enabling visibility into the product planning process

That combines to help Companies deliver better quality products to market, faster.

Capturing the Voice of the Market

One of the key ways to improve the product design and development process across an entire product
portfolio is to incorporate data, gathered from many sources, that clearly highlights market needs and competitive
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dynamics. This "voice of the market" data provides the insight necessary to significantly improve strategic product
decision-making, and also makes it easier to prioritize product requirements.

It touches all audiences with a stake in the product or a say in the market "sales prospects, partners, analysts,
competitors, etc. Voice- of-the-market data also takes into account consumer and economic trends that are shaping
the market.

Aligning Corporate Strategy and Product Development

Portfolios driven by the demands of the market in combination with alignment to strategic company goals
dramatically improve product success in the market. ,

When the needs of each customer are viewed in the larger context of the business, it's easier to determine
whether the enhancements the product team is building are consistent with overall corporate strategic goals and
objectives. It's also easier to ensure that every development resource is engaged in supporting an identified market'
demand.

Product managers and strategists can also ensure strategic alignment by prioritizing requirements based on
assigned weightings. For instance, you may base a potential new feature oh a need identified in an industry analyst
report; you’d weight that new feature differently depending on how much influence that analyst wielded.

It is also valuable to weight available development resources against market impact tradeoffs, and performs
scenario and alternative planning to see how different combinations of requirements best help you address the
market trends identified as most significantly affecting the business.

Gaining Visibility into the Product Development Lifecycle

In a market-driven approach to portfolio planning, all product requirements, initiatives, and voice-of-the-
market data are stored in a centralized single system of record repository that provides an easily-accessible view
into all aspects of product creation.

Without such a view, it's a significant challenge to forecast the effects that an unplanned development
change might have on market demand, customer satisfaction, hidden dependencies, or overall competitive position.

With this visibility, however, across product lines and throughout the product development cycle,
development team managers and executives can prioritize and manage complex requirements and
interdependencies across the complete portfolio, no matter how diverse the product set.

With a market-driven approach, every product requirement is traceable all the way through to its underlying
attributes. Development can define and trace relationships between multiple levels of hierarchical requirements,
down to the lowest level of engineering or systems, and back up.

9.Explain the factors influencing consumer behavior. (NOV/DEC 2008)


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Refer to Q.No 1. (NOV/DEC 2006)

10.Using the automobile market, describe automotive buying behavior for a: Market Place. (MAY/JUNE-
2009)

Consider the purchase an automobile. Consumers generally will not consider different options until some
event triggers a need, such as a problem needing potentially expensive repair. Once this need has put the consumer
“on the market”, and begin to ask their friends for recommendations regarding dealerships and automobile models.

After visiting several dealerships, consumer test drive several automobile models and finally decide on a
particular model.

After picking up new automobile, the consumer have doubts on the way home, wondering if they can afford
the monthly payments, but then begin to wonder if instead they should have purchased a more expensive but
potentially more reliable model.

Over the next five years, the automobile has several unexpected breakdowns that lead them to want to
purchase a different brand, but they have been very happy with the services of the local dealership and decide to
again purchase their next automobile there.

Market Space

Traditionally, auto manufacturers have tried to exert close control over the sales and distribution channels in
order to be able to execute their marketing strategies, including price policy, and to guarantee a high service level
for their customers. The networks of dealers with various contractual relationships (from subsidiaries to
independent multi-manufacturer dealers) are instrumental in this process and they usually cover a huge array of
functions from sales of new and used cars, financing, repairs etc. However, new types of dealership have emerged
that are independent from the car companies and try to leverage on loopholes or weaknesses of the existing dealer
networks.

Mercedes-Benz like other car companies needs to transform themselves into assemblers of complex
mobility services by coordinating networks of service providers and integrating Web services. They have to
carefully manage the emerging multi-channel distribution network and face the challenges and risks of intra-
channel conflicts, failure to reach critical mass with the new channel, and the sheer complexity of such systems.
While the car companies have learn to coordinate complex supplier networks they have to learn in the future to
apply this competence to the configuration and management of complex distribution and service networks with
(more) independent service providers, assembling and coordinating complex and computer-enabled networks of
intermediaries (service organizations with different contractual obligations) in order to provide mobility services.

Meta-market
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The increasing use o f the Internet has given automotive consumers an edge in the vehicle buying process,
making them less dependent on dealers. This has resulted in a significant shift in the balance of power as dealers
fail to keep pace with the changing consumer dynamics. Automotive companies must gain a better empirical
understanding of consumer behavior in order to improve the customer/ dealer relationship and in the process drive
increased sales and strengthen brand and dealer loyalty.

Consumer change has accelerated rapidly, due to consumers’ increasingly sophisticated buying behavior and
the availability of information on the Internet, which is helping to delay their moment of entry into the dealership.

Improved customer intelligence was found to be a critical success factor in responding to the changing
dynamics of the customer/dealer relationship. Since customer intelligence, and in fact customer behavior, evolves,
it’s critical that automotive companies always keep their finger on the pulse. Best practices include sales training
seminars that incorporate intelligence about customer research tactics, as well as careful and constant observation of
consumer behavior through the entire vehicle buying process.

Companies must move away from the traditional asymmetrical customer/dealer relationship so often
characterized by negative preconceptions and stereotypes on the part of both parties. The key is to move toward a
more balanced relationship where there is transparency of information and mutual trust, thereby improving sales
and beginning to build customer loyalty. “

11.Why do new products fail? What are the critical forces influencing the management of products?
(MAY/JUNE- 2009)

The new product largely depends on the product quality and the marketing tactics of the firm, there are
many occasions were the product failed miserably even after using the best technology and quality the reason is that
the new product is not worth for the customers. The prime factor for the new product success is - customer value.
Value is what the customer thinks is value. The major reasons for new product failure are:'

Faulty product idea: The product often fail because faulty of product idea. A good idea can revolutionize the
market but a bad idea may prove bitter to the firm or it may backfire Eg: Polar industries in 1991 launched “COOL
CATS” fan - decorated with cartoon characters meant primarily for children. The fan was priced at premium; the
idea was that children’s were increasingly becoming influencer in purchase decisions and to attract the kids with the
cartoon creatures and to position the product exclusively for kids. The product failed miserably in spite of its huge
advertising budget because when the fan was put on it didn’t have any color effect and the customer did not justify
its premium price.

Distribution related problems: The new product fails if the product is unable to meet the channel requirements.
While developing the product the channel requirements must be given adequate consideration. Eg: when NESTLE
launched its new chocolates the product and promotion was OK but the product failed in the distribution side
because the company stipulated the product to be stored in refrigerators. The product faced two problems in the
distribution side because it meant excluding a number of retail outlets as they didn’t have this facility and secondly
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the chocolate was not picked by the customers as it was not seen upfront in the retail shops. Finally .Nestle had to
reformulate the product according to channel requirements.

Poor timing of launch: Too early or late entry into the market is a common cause of failure. Kinetic Merlin was
launched in Pune in 1991. It was a 3 in 1 set consisting of a color television, a stereo with detachable speakers and a
home computer. The product was targeted at the Indian consumers who are fond of sophisticated gadgets to
immediately adopt such an innovative idea but in reality the idea was too advanced for the customers to digest at
that time because they were not exposed to such type of products before.

Improper Positioning: Positioning means putting the product into the predetermined orbit. Improper positioning
may affect the product success. Eg: Titan Tanishq introduced their 18 carat jewelry and the product was positioned
at elite segment but there was a contradiction as to why these elite segment should go in for a low carat gold
because the norms for gold in India at that time was 22 carat. The product failed miserably in retrospect Titan had to
introduce 22-carat jewelry.

Critical forces influencing the management of products:

The failure to effectively launch a product can be a contributing factor to its failure in the market. If a
product has been carefully researched and developed, an effective launch should contribute to its success. The most
successful product launch, however, cannot rescue a bad product.

New product launches are a pivotal time for businesses, and they require meticulous planning. A product
launch is the culmination of months or even years of effort, from across the organization, in readying a product for
market. It constitutes a high profile activity that can signal corporate success or failure. Product launches also
require—and display—a considerable amount of investment. Thus, an intensive effort is required to execute the
launch program successfully. A product launch progresses through a number of important stages:

 internal communications (or “internal launch”), to guarantee high levels of awareness and commitment to
the new product;
 pre-launch activity, to secure distribution and ensure that the sales channel (including resellers, retailers,
etc.) have the skills, resources, and knowledge to market the product;
 launch events at the national, regional, and/or local level;
 post-event activity to help the sales force and other channels make the most of the event;
 launch advertising and other forms- of customer communication.

12.Explain Consumer Buying Behavior Process. (MAY/JUNE- 2009)

The 6 stages of Consumer Buying Behavior Process are:

Problem Recognition(awareness of need)—difference between the desired state and the actual condition. Deficit in
assortment of products. Hunger—Food. Hunger stimulates your need to eat. Can be stimulated by the marketer
through product information—did not know you were deficient? I.E., see a commercial for a new pair of shoes,
stimulates your recognition that you need a new pair of shoes.

Information search
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 Internal search, memory.


 External search if you need more information. Friends and relatives (word of mouth). Marketer dominated
sources; comparison shopping; public sources etc.

A successful information search leaves a buyer with possible alternatives, the evoked set.

Hungry, want to go out and eat, evoked set is

 Chinese food • Indian food


 burger king • Klondike Kates etc

Evaluation of Alternatives - Need to establish criteria for evaluation, features the buyer wants or does not want.
Rank/ weight alternatives or resume search. May decide that you want to eat something spicy, indian gets highest
rank etc.. If not satisfied with your choice then return to the search phase. Can you think of another restaurant?
Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to
influence by “framing” alternatives.

Purchase decision—Choose buying alternative, includes product, package, store, method of purchase etc.

Purchase—May differ from decision, time lapse between 4 & 5, product availability.

Post-Purchase Evaluation—outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the
right decision. This can be reduced by warranties, after sales communication etc.

13. Explain the factors influencing consumer behavior. (June 2010)

Refer to Question Number : 9 (Nov / Dec 2008)

14.Elaborate the factors influencing consumer behavior. Explain the buyer behavior models (June 2011)

Refer to Question Number : 9 (Nov / Dec 2008)


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15. Explain CRM with Suitable examples , why is it important in modern day business context. Discuss (June
2010)

Refer to Question Number : 2 (Nov / Dec 2006)

16. Explain CRM what is it importance in present marketing environment. (June 2011)

Refer to Question Number : 2 (Nov / Dec 2006)

UNIT – V
Part A

1. Expand MIS and MDSS. (NOV/DEC 2006)

MIS - Marketing Information Systems

MDSS - Marketing Decision Support Systems

2. What are the applications of marketing research? (NOV/DEC 2006)


 Advertising testing research,
 Branding research,
 Pricing research,
 Product positioning research, and
 Segmentation research.

3. What are the stages in marketing research process? (NOV/DEC 2006)


 Problem Definition
 Research Design
 Data Collection Procedure
 Sample Design
 Data analysis and Interpretation
 Research Report

4. What is a worldwide information system? (NOV/DEC 2006)

A worldwide information system is a system for capturing, storing, analyzing and managing data and associated
attributes which are spatially referenced to the earth. In the strictest sense, it is a computer system capable of
integrating, storing, editing, analyzing, sharing, and displaying geographically-referenced information. In a more
generic sense, worldwide information system is a tool that allows users to create interactive queries (user created
searches), analyze the spatial information, and edit data.

5. Name any four companies involved with web-based marketing programmes.

(NOV/DEC 2006)
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 Microsoft
 Yahoo
 Time Warner
 Real Networks

6. What is marketing research? (May / June 2007)

Market research is the systematic design, collection, analysis and reporting of data and findings relevant to a
specific marketing situation facing the company

7. What is on-line marketing? (MAY/JUNE 2007)

On-line marketing is described as the company's effort to inform, communicate, promote and sell its
products and services over the internet.

8. What is marketing challenge? (MAY/JUNE 2007)

The marketplace isn't what is used to be. It is changing radically as j a result of major societal forces
such as technological advances, j globalization, heightened competition, customer empowerment and
deregulation. These major forces have created new behaviors and challenges

9. What are syndicated research services? (NOV/DEC 2007)

A wide variety of syndicated research services, especially in areas like market measurement and media
planning. They include:

 The National Readership Survey (NRS)


 Businessmen's Readership Survey (BRS)
 Television Rating Points System (TRP)
 Market Pulse - household purchase panel
 Rural Market Probe.

10. What are the different types of web-sites cited in marketing? (NOV/DEC 2007)
 Static Website
 Dynamic Website
 Content Managed Website
 E-commerce Website
 Flash Website

11. What is information technology? (MAY/JUNE 2008)

In the broadest sense, information technology refers to both the hardware and software that are used to store,
retrieve, and manipulate information. At the lowest level you have the servers with an operating system. Installed
on these servers are things like database and web serving software. The servers are connected to each other and to
users via a network infrastructure. And the users accessing these servers have their own hardware, operating
system, and software tools.
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12. What are the advantages of web based marketing? (MAY/JUNE 2008)

Web based marketing is relatively inexpensive when compared to the ratio of cost against the reach of the target
audience.With the help of this companies can reach a wide audience for a small fraction of traditional advertising
budgets.It allows consumers to research and purchase products and services at their own convenience.

13. What is Ad-hoc research? (NOV/DEC 2008)

A single, one-time piece of research designed for a particular purpose, as opposed to continuous, regularly repeated,
or syndicated research.Ad-hoc research provides the penetrating analysis needed to address issues of strategy and to
make well-informed decisions about customers, competitors and markets.

14. Define internet marketing. (NOV/DEC 2008)

Internet marketing, also referred to as web marketing, online marketing, or eMarketing, is the marketing of
products or services over the Internet.Internet marketing is sometimes considered to have a broader scope because it
refers to digital media such as the Internet, e- mail, and wireless media; however, Internet marketing also includes
management of digital customer data and electronic customer relationship management (ECRM) systems.

15. What are B2B exchanges?(NOV/DEC 2008)

Business-to-business (B2B) exchanges or marketplaces provide dramatic opportunities to automate


collaborative business processes with customers and suppliers, generate internal efficiencies, and reach new
markets at minimal cost.B2B Exchange would make it easier for companies to find the goods they needed, to
complete transactions, and to save money through the added competition or large amount of goods being sold or
bought.

16. Write short notes on on-line marketing. (MAY/JUNE- 2009)

On-line marketing provides instant response and eliciting responses, is a unique quality of the medium.On-line
marketing is sometimes considered to have a broader scope because it not only refers to digital media such as the
Internet, e-mail, and wireless media.On-line marketing also includes management of digital customer data and
electronic customer relationship management (ECRM) systems.

17. What do you mean by pilot study? (NOV/DEC 2008)

A pilot, or feasibility study, is a small experiment designed to test logistics and gather information prior to a
larger study, in order to improve the latter's quality and efficiency.A pilot study can reveal deficiencies in the design
of a proposed experiment or procedure and these can then be addressed before time and resources are expended on
large scale studies.A pilot study is normally small in comparison with the main experiment and therefore can
provide only limited information on the sources and magnitude of variation of response measures.The pilot study
may, however, provide vital information on the severity of proposed procedures or treatments.

18. What is on-line marketing? (Nov/Dec- 2009)


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Refer to Q.No: 16 (MAY/JUNE- 2009)

19. Highlight some of the online marketing trends(June 2010)

 Display Advertising  Email Marketing


 Search Engine Marketing (SEM)  Referral Marketing
 Search Engine Optimization (SEO  Affiliate Marketing
 Social Media Marketing  Content Marketing

20. What are the practical applications of marketing research(June 2010)

Refer to Question Number :2 (Nov / Dec 2006)

Part B

1. Discuss the contents of marketing research report. (MAY/JUNE 2006)

Preparatory Information Introduction


Letter of Transmittal Problem Statement
TitlePage Research Objectives
Authorization Statement
Executive Summary Background
Table of Contents
Methodology
Sampling Design Findings
Research Design Conclusions
Data Collection Summary & Conclusion
Data Analysis Recommendations
Limitation Recommendations

2. Explain the different types of marketing research. How would you compare consumer marketing research
with industrial marketing research? (MAY/JUNE 2006)

Different types of Marketing Research


Types Description
Reporting Provides an account or summation of
some marketing phenomenon
Descriptive Discovers and reports the who,
what,when, when or how related to a
specific marketing decision

Explanatory Attempts to explain the reasons for a


marketing phenomenon
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Predictive Attempts to forecast a marketing


phenomenon

Comparison:

Aspect Industrial Marketing Research Consumer Marketing Research

Market Size Very large value-wise Very large Volume-wise

Structure Oligopolistic, Geographically concentrated Monopolistic - Geographically Dispersed

Derived, Joint, Fluctually demand, price


Demand Mostly autonomous and price elastic
inelastic

Nature Technical complexity Customized Technically less complex standardized

Motives Rational / Task motives Socio-psychological

Factors Quality, Service and Price in that order Price, Quality and service are important

Channels Mostly direct, fewer linkages, SCM for Indirect, Multiple linkages, simple
Logistics efficient physical distribution planning and lime management

Top management, Closely related to Functional management, aligned with


Management
corporate strategy corporate strategy.

3. Discuss the different online advertising options for a marketer. (MAY/JUNE 2006)

The Internet is a powerful and far-reaching tool for business promotion. Internet advertising gives even small
businesses the opportunity to reach out to customers from all over the world. Whether you use the Internet to
promote your business, sell a product or connect with new customers, it is important to understand some of the
basic techniques used on online advertising and marketing.

Text Ads

Text ads are one of the most common ad types used in online advertising. Google’s AdWords program has
made text advertising .in easy, accessible, and affordable option for many businesses. One of the greatest
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advantages is that they can be matched to highly sped lie keywords and appear on sites where they are the most
likely to reach potential customers.

Banner Ads

Banner ads are large, rectangular advertisements intended to capture the attention of online viewers. These
ads often feature images or animations designed to catch the eye and inspire the reader to click mi the banner. One
problem with this type of online advertising is that it has become so prevalent that many users experience what lias
been called banner blindness, where commonly viewed ads are ignored and disregarded.

Advertorials

Advertorials are a combination of an editorial and an advertisement. T h i s type of online advertising is


common on e-commerce websites, l-'or example, a business selling entertainment media might write an advertorial
review of a product and then provide an affiliate link where the customer can purchase the item.

E-mail

E-mail offers an excellent opportunity to make direct contact with potential customers. However, customers
do not want to be inundated with unwanted e-mail. The key to using e-mail as and online advertising tool is to
encourage customers to sign up for a mailing list or newsletter. By providing valuable information to potential
customers, they will be more receptive to your marketing message.

Online Marketing Techniques

Over the years, different companies have generated a number of tried and tested advertising techniques.
These methods increase the profile of your business on the Web, draw potential customers to your website, and
increase sales. Use some of these proven and tested marketing methods to rev up the company’s online advertising.

Search Engine Marketing (SEM)

Search engine marketing involves advertising your website through search engine, often through search
results, paid listings, or pay-per- click campaigns. By using effective search engine optimization (SEO) techniques,
businesses can achieve top results in search engine results. Many businesses have found that search marketing
dramatically improves site traffic and sales.

Affiliate Programs

Allowing other websites to advertise and promote your product and service is a great way to significantly
expand your customer base and increase your online sales. In exchange for marketing your business, affiliates earn
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a commission on the sales they produce. Affiliate programs are an ideal solution for product-based websites that
need to reach out to a targeted audience.

Reciprocal Links

Exchanging links with other websites is another important Internet advertising tool-. When you place a
reciprocal link on your website, the other business will place a corresponding link on their side leading back to your
Web location. The advantage of reciprocal links is that they are relatively easy way to reach more customers and
improve search engine rankings. A potential drawback of this marketing techniques is that it can be time
consuming and difficult to determine the effectiveness.

B LOGS

Blogs are one of the latest tools used in Internet advertising. While t h e y a r e often thought of as personal
journals, many businesses have discovered ways of successfully using blogs to promote products, services, and
other business-related news. Blogs are a great way t o a d d interactivity and liveliness to your website. Syndicating
your blor, with an RSS feed is another way to promote your website and r.ive readers a chance to access all of the
latest updates and news about your business.

The Internet has opened up a world of advertising opportunities for many businesses. Unlike traditional
advertising, which is often expensive and limited in scope, online advertising is a relatively affordable way to
promote your business and service. By understanding some of the basic principles and techniques of Internet
advertising, business can take advantage of this powerful marketing tool.

4. Has marketing changed in the ‘Connected World’? Discuss the strategy implications of the
Internet for marketing? (MAY/JUNE 2006)

In the current scenario marketing changed a tremendous growth in the Connected World by inventing more
innovations. A relatively new form of marketing uses the Internet and is called internet, marketing or more
generally e-marketing, affiliate marketing or online marketing. It typically tries to perfect the segmentation strategy
used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing
or one-to-one marketing.

The purpose of any marketing plan is to communicate the vision of the marketing department to the rest of
the organization while providing a roadmap and compass for the implementation of marketing initiatives. An
Internet marketing plan is similar, but focuses on the online portion of the organization’s business, and while there
are no set formulas for the specific contents of an Internet marketing plan, or any marketing plan, there are useful
elements. These are discussed briefly below.

Executive Summary
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The Executive Summary provides a quick review (one or two pages) of the objectives, strategies and
forecasted results of the proposed Internet Marketing Plan. It gives others (employees, financers) a concise picture
of what you are going to do and how you are going to achieve it.

Situation Analysis

Provides a historical look and current analysis of the company’s Internet operations, including an analysis of
the successes and failures. The Situation Analysis can contain as many of the following topics as appropriate to
your business.

Business Analysis

Reviews the current status of the business including an analysis, of existing and potential internal and
external internet resources. Industry Analysis.Analyses long term and short term Internet trends that are likely to
change the online marketplace you are doing business in.

Sales and Marketing Analysis

This is an intensive study and review of online product sales strategies and the record of success (or failure)
on the Internet.

Competitor Analysis

This section defines the criteria for online competitors, what they are doing online and what will them likely
doing next.

Customer Analysis

Analyzes your current online customers and how they are using your site

Planning Assumptions

Sets out the company’s assumptions about the future

Forecasts

Forecasts of industry and product sales based on objective analysis of market research data.

5. Explain the marketing research process with suitable examples. (NOV/DEC 2006)

The marketing research process includes the systematic identification, collection, analysis and distribution of
information for the purpose of knowledge development and decision making. The reasons and times at which your
company or organization might consider performing marketing research varies, but the general purpose of gaining
intelligence for decision making remains constant throughout. As a company or organization, the overwhelming
majority of research you are currently considering likely revolves around your customers:

 Current customers
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 Prospective customers
 Lost customers
 Members
 Community
 Employees (internal customers)
 Shareholders (internal customers)

Whether you are creating a new marketing research program or perhaps revising an existing marketing research
program, what are the steps you should take? While there are dozens of little steps along the way, each of those
steps fits into one of the 6 major steps of the marketing research process. They are:

Step 1: Identifying and defining your problem: This step is always the start of the marketing research process. At
this point, the problem will have been recognized by at least one level of management, and internal discussions will
have taken place. The most common tools are internal and external secondary research. Secondary research
intelligence consists of information that was collected for another purpose, but can be useful for other purposes.
Examples of internal secondary research are sales revenues, sales forecasts, customer demographics, purchase
patterns, and other information that has been collected about the customer. Most external secondary information is
produced via research conducted for other purposes, financial performance data, expert opinions and analysis,
corporate executive interviews, legal proceedings, competitive intelligence firms, etc.

Step 2: Developing your approach: Once your problem is better defined, you can move onto developing your
approach, which will generally be around a defined set of objectives. Clear objectives developed in Step 1 will lend
themselves to better approach development. Developing your approach should consist of honestly assessing you
and your team's market research skills, establishing a budget, understanding your environment and its influencing
factors, developing an analysis model, and formulating hypotheses.

Step 3: Establishing research design and strategy: Based upon a well-defined approach from Step 2, a framework
for the designing your marketing research program should be apparent. This step is the most encompassing of all
steps in the research process, requiring the greatest amount of thought, time and expertise - and is the point at which
those less experienced with market research will obtain assistance from an internal market research expert or
perhaps partner with an external marketing research provider. Research design includes secondary information
analysis, qualitative research, methodology selection, question measurement & scale selection, questionnaire
design, sample design & size and determining data analysis to be used.

Step 4: Collecting the data: Often called data collection or survey fielding, this is the point at which the finalized
questionnaire (survey instrument) is used in gathering information among the chosen sample segments. There are a
variety of data collection methodologies to consider such mail survey, internet panel, mail panel, in-home panel etc.

Step 5: Performing data analysis: Any questionnaire data analysis will depend on how the questionnaire was
constructed. Less complex questionnaire data analysis can be handled with any of a number of office suite tools,
while more complex questionnaire data analysis u-quires dedicated market research analysis programs. Types of
statistical data analysis that might be performed are simple frequency distributions, cross tab analysis, multiple
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regressions (driver analysis), cluster analysis, factor analysis, perceptual mapping (multidimensional ruling),
structural equation modeling and data mining.

Step 6: Reporting and presentation: Market research reporting mid presentation is easily the second most important
step, if not the first Any business critical information and knowledge that comes from your market research
investment will be limited by how it is presented to decision makers.

6. Explain the contents in marketing research report with subdivisions. (MAY/JUNE 2007)

Refer to Q.no : 1 (May/June 2006)

7. Discuss online marketing process and its future in India. (MAY/JUNE 2007)
Marketing can do online marketing by creating an:

 Electronic presence on the Internet


 Placing ads on-line
 Participating in forums, newsgroups, bulletin boards
 Web communities
 E-commerce: e-purchasing, e-marketing
 E-mail and web casting

Online marketing future in India:

 Outsourcing
 E-commerce
 Benchmarking
 Alliance
 Partner-suppliers
 Global and local
 Integrated marketing communications

8. What are the emerging opportunities and challenges to a marketer of consumer durables? (MAY/JUNE
2007)
 Changing technology
 Globalization
 Deregulation
 Privatization
 Customer empowerment
 Customization
 Heightened competition
 Industry convergence
 Retail transformation
 Disintermediation

9. What are the benefits of web-marketing? Illustrate the tasks in establishing web-marketing. (NOV/DEC
2007)

Benefits of web-marketing

 Far Cheaper and Much More Flexible Than Print Advertising


 Market Expansion
 Diversify Revenue Streams
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 Offer Convenience
 Add Value and Satisfaction
 Standardize Sales Performance
 Improve credibility
 Promote your "Brick 'n' Mortar" Presence
 Growth Opportunity
 Cheap Market Research

Tasks in establishing web-marketing

 The site needs to be indexed by a large search engine such as Yahoo or Google.
 Advertise on other people's sites, using the pay per click method.
 If you have a strong command of the English language, and can write great articles, this may be the most
beneficial to your site in general. This will increase the popularity of your site, as well as save you money in
the long run by having to hire someone else to write for you.
 Do not confuse or bore a potential client by having long dragged out statements or even poor grammatical
structure to your pages.
 Keeps it looking professional and they will in turn give you business. The idea is to be straight forward, and
direct with clear understandable flow in your site. This eliminates any confusion and generally will bring
you repeat business.
 Many times when a site is done well word of mouth in the market starts to flow, the next thing you know
you have a large client base and the hits just keep coming.
 In making a great, web page it is always a good idea to incorporate a box for recourses, this way there are no
worries about plagiarism in your page content. If your work is great, there is a good possibility that some
one else may want to have your pieces published on their sites too, this will give you great exposure as well.
 Giving someone else the opportunity to generate hits will in turn be sent back to you anyways. This is a
back scratching process where everyone wins.

10. Examine the marketing challenges of the new economy to the marketers.(NOV/DEC 2007)

Increased specialization of customer needs. The days of mass marketing and "one size fits ail" products and
services are long gone. Today's consumers want products, services and information tailored to their specific
interests, circumstances and needs. Marketers need to balance the cost-benefits achieved through large-scale
processes with those achieved only by customized or personalized communications.

New communication channels. While broadcast television and the U.S. postal service remain marketing
staples, they've been augmented, if not replaced, by new modes of communication. Today's consumers may tune out
national TV or radio stations in favor of more focused programming available only through satellite or cable
stations. Many turn to the internet for news and entertainment, instead of newspapers and magazines, while others
favor e-mail or instant messaging over so-called "snail mail."

Increased competition for customer dollars. The growing global economy and deregulation have created a
flood of new competitors in just about every industry. Marketers have to work harder to gain new customers and
retain existing ones.
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Shorter product life and sales cycles. With today's new technologies and breakthrough discoveries, no sooner
does a product hit the market than a new, better or enhanced version is introduced. Marketers must get current
materials into prospects' hands quickly and reliably.

Legislation and regulatory restrictions. Some regulations, like HIPAA (Health Insurance Portability and
Accountability Act), affect specific industries- such as pharmaceutical manufacturers, health insurers and their
business partners. But telemarketers in every industry have to work with barriers created by the national "do not
call" list, and e-mail marketers must avoid practices that could be considered "spamming," while still getting their
messages to the largest possible number of prospects.

11. Explain marketing research.(MAY/JUNE 2008)

Marketing research, or market research, is a form of business research and is generally divided into two
categories: consumer market research and business-to-business (B2B) market research, which was previously
known as industrial marketing research. Consumer marketing research studies the buying habits of individual
people while business-to-business marketing research investigates the markets for products sold by one business to
another.

Consumer market research is a form of applied sociology that concentrates on understanding the behaviours,
whims and preferences, of consumers in a market-based economy, and aims to understand the effects and
comparative success of marketing campaigns.Thus marketing research is the systematic and objective
identification, collection, analysis, and dissemination of information for the purpose of assisting management in
decision making related to the identification and solution of problems and opportunities in marketing.

Market Research Characteristics

First, marketing research is systematic. Thus systematic planning is required at all the stages of the
marketing research process. The procedures followed at each stage are methodologically sound, well documented,
and, as much as possible, planned in advance. Marketing research uses the scientific method in that data are
collected and analyzed to test prior notions or hypotheses.

Marketing research is objective. It attempts to provide accurate information that reflects a true state of
affairs. It should be conducted impartially. While research is always influenced by the researcher's research
philosophy, it should be free from the personal or political biases of the researcher or the management. Research
which is motivated by personal or political gain involves a breach of professional standards. Such research is
deliberately biased so as to result in predetermined findings. The motto of every researcher should be, "Find it and
tell it like it is."

Marketing research involves the identification, collection, analysis, and dissemination of information.
Each phase of this process is important. We identify or define the marketing research problem or opportunity and
then determine what information is needed to investigate it., and inferences are drawn. Finally, the findings,
implications and recommendations are provided in a format that allows the information to be used for management
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decision making and to be acted upon directly. It should be emphasized that marketing research is conducted to
assist management in decision making and is not: a means or an end in itself.

Methodologically, marketing research uses the following types of research designs:

Based on questioning

Qualitative marketing research - generally used for exploratory purposes - small number of respondents -
not generalizable to the whole population - statistical significance and confidence not calculated - examples include
focus groups, in- depth interviews, and projective techniques

Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses
random sampling techniques so as to infer from the sample to the population - involves a large number of
respondents - examples include surveys and questionnaires. Techniques include choice modelling, maximum
difference preference scaling, and covariance analysis.

Based on observations:

Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their natural
setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations
occur over several time-periods) - examples include product-use analysis and computer cookie traces.

Experimental techniques -, by nature quantitative, the researcher creates a quasi-artificial environment to


try to control spurious factors, then manipulates at least one of the variables - examples include purchase
laboratories and test markets

Researchers often use more than one research design. They may start with secondary research to get
background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they
might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for
the client.

12. Discuss the contents in a marketing research report. (MAY/JUNE 2008)


 Title Page
 Table of Contents
 Executive Summary
 Introduction Body
 Conclusion
 Recommendations
 Bibliography
 Appendices

Title Page: This shows the title or subjects of the report, which the report is for, the name of the writer and date
of submission.

Table of Contents: This details all sections and sub-sections of the report with page numbers.
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Executive Summary or Abstract: This summarizes the main points and findings. (This is not always required,
particularly if it is a short report).

An Introduction: This includes the scope and background to the work including:The aims and objectives and
the terms of reference. The context of the report and its purpose. Sometimes included are details of the organization
requesting the report and the question(s) they are hoping will be answered.

The Methodology - how the information presented in the report will be obtained and what procedures will be
used, for example: interviews or postal questionnaires. Sometimes an explanation is included explaining why a
particular investigative approach / methodology was chosen.The topics covered - giving a broad outline of content
and scope and indicating any limitations of the project.

Body of the Report: This is where information is presented, explanations provided and questions answered. It
deals with what, how, where and why? The findings of the report are broken down into discrete sections and sub-
sections. Each section and sub-section should have a title/heading, and be numbered.

Conclusion: The conclusion sums up the main points raised in the report and arrives at conclusions, which
clearly relate to the objective(s) of the report. This is the place to draw together key points made in the report .
However, nothing new should appear here.

Recommendations: These should provide practical and viable proposal(s) and may offer solutions to problems
investigated in the report. (You will not always be asked to include recommendations). Each recommendation
should be listed and discussed separately.

Bibliography: This should detail all: books, articles, journals, websites, and any other sources consulted when
writing the report.

Appendices: These should be placed at the end of the report. They detail relevant information, which is too
lengthy or detailed to include in the body of the report. Each appendix should contain different information.These
should refer to within the Report (Appendix 1) and so on.

13. Explain the features of online marketing. (MAY/JUNE 2008)

Internet marketing, also referred to as web marketing, online marketing, or eMarketing, is the marketing of
products or services over the Internet.The Internet has brought many unique benefits to marketing, one of which
being lower costs for the distribution of information and media to a global audience. The interactive nature of
online marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the
medium. Online marketing is sometimes considered to have a broader scope because it refers to digital media such
as the Internet, e-mail, and wireless media; "however, Online marketing also includes management of digital
customer data and electronic customer relationship management (ECRM) systems.

Online marketing ties together creative and technical aspects of the Internet, including design, development,
advertising, and sales. Internet marketing does not simply entail building or promoting a website, nor does it mean
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placing a banner ad on another website. Effective online marketing requires a comprehensive strategy that
synergizes a given company's business model and sales goals with its website function and appearance, focusing on
its target market through proper choice of advertising type, media, and design.

Online marketing is associated with several business models:

 e-commerce - goods are sold directly to consumers or businesses, .


 publishing - the sale of advertising,
 lead-based websites - an organization generates value by acquiring sales leads from its website, and
 affiliate marketing - a business rewards one or more affiliates for each visitor or customer brought about by
the affiliate's marketing efforts.

Advantages of online Marketing

 Your store is open, 24 hrs a day, 7 days a week. Further, your customers are worldwide in reach, and can
shop anytime that they want to
 The cost of spreading your message is next to nothing. Emailing your subscription base is more often
cheaper than sending a letter through the mail
 Updating your subscribers can be done almost instantly through email. Visitors to your website can get up to
the minute information on each visit. If you are having a sale, your customers can start shopping at the
discounted prices literally as soon as they open their email
 if you have an information sensitive business, such as a law firm, newspaper or online magazine, you can
deliver your products directly to your customers without having to use a courier

Disadvantages of online Marketing

 Online marketing is not free. The cost of software, hardware, wed site design, maintenance of your site,
online distribution costs and of course, time, all must be factored into the cost of providing your service or
product.
 Slightly over 50% of households shop online. While that number will continue to grow, you are reaching
less than two out of three households.
 The internet is still regarded as a source of information gathering for the majority of your customers. Of the
number of visitors to your site, the vast majority of visitors who are motivated to buy will do so in person.
Many people prefer the live interaction when they buy. If you have a small business with one location, this
may deter customers from buying.
 easier to have outdated information on your site, thus timing of updates is critical

There is no replacement for good old fashioned customer service. The majority of internet marketers lack
customer service and inquiry response programs. As a result, many online visitors lo your site will already have
painted your site as poor service before they have even contacted you. The majority of websites also have poor
navigation, which makes it difficult for your visitor to find what they are looking for. Many sites were created with
a marketing view, not a customer service point of view.
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14. Describe web-based marketing programs. (MAY/JUNE 2008)

An affiliate program, sometimes referred to as web-based marketing programs, is a system that allows web
site owners to earn residual income, passive income and generate multiple income streams by offering services or
products on their web site with no risk, overhead, inventory, shipping costs, employees, rent or maintenance. There
is no charge to become an affiliate:

Web-based marketing programs provide you an excellent opportunity to earn multiple income streams and
residual income. Whether you are new to internet marketing or an experienced professional, these web based
marketing programs will provide a win-win situation for you and your customers - by delivering superb products
and services, and provides you the highest payouts on the web!.

Web-based marketing programs offer the following incentives:

 Superb quality products and services with residual income


 The highest commission payouts on the internet that offers passive income
 Two-tiered commission structure that pays you for each affiliate you recruit who makes a sale
 Long commission tracking period
 Excellent training programs to ensure you reach your highest earnings potential possible with multiple
income streams

Joining web based marketing programs is one of the most profitable ways in earning money online, and a lot of
people nowadays have become web based marketers since this avenue provides an easy way in generating profit.
But joining an web based program is not enough to make it big in the industry; you must know which ones to be
part of. Hence, here are the top web based affiliate marketing programs based on credibility and profitability:

Card Offers

One of the most profitable affiliate programs you can find today is Card Offers. Card offers is among the
biggest and most trusted programs mainly because their niche provides something people consider a necessity:
credit cards. With Card Offers you can promote Visa and Master card towards your audiences, without putting
much effort in the marketing, since credit cards are a "need". Card Offers can build you your own website through
their in house resources. Moreover, you can earn as much as $160 base commission per sign up.

Pepper Jam

Another hip and trendy web based marketing program where you can earn as much as $65 CPA is Paper
Jam. In Paper Jam you will be provided with all the promotional tools you need in marketing their site, ranging
from text links, banners and ads which you can add into your site. What's great about Paper Jam is that it blends
with all niche topics hence you don't have to conform to its subject matter. Also, you get an instant $10 sign up
bonus upon joining the program

Link Share
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Meanwhile the third top affiliate program you can take part of nowadays is Link Share. Link Share has
partnerships with some of the biggest names in business and trade such as American Express, so you won't have
much trouble promoting their programs. You will also benefit from the educational tools provided by the site as
well as the strategies which you can ask from their research and development team. Base commission from Link
Share ranges from $1-100 or 1-65%.

Easy Date

If you want to venture on the world of dating, then Easy Date is the program you should be part of. Among
the benefits of Easy Date are customizable landing pages, ability to send traffic to multiple different URLs, and a
variety of payment options. You can earn as much as $60 per sale, or around $9 per confirmed sign up.

15. Describe the different types of research methods in detail. (NOV/DEC 2008)
 •. Qualitative marketing research: Generally used for exploratory purposes - small number of respondents
- non generalizable to the whole population - statistical significance and confidence not calculated -
examples include focus groups, depth interviews, and projective techniques
 Quantitative marketing research: generally used to draw conclusions - tests a specific hypothesis - uses
random sampling techniques so as to infer from the sample to the population - involves a large number of
respondents - examples include surveys and questionnaires
 Observational techniques: the researcher observes social phenomena in their natural setting - observations
can occur cross- sectional (observations made at one time) or longitudinally (observations occur over
several time-periods) - examples include product-use analysis and computer cookie traces
 Experimental techniques: the researcher creates a quasi- artificial environment to try to control spurious
factors, then manipulates at least one of the variables - examples include purchase laboratories and test
markets

16. Explain the key elements in report writing. (NOV/DEC 2008)

Refer to Q.No:12 (MAY/JUNE 2008)

17. Discuss the techniques of acquiring the customers on the web. (NOV/DEC 2008)

Marketers today are under more pressure than ever to find new customers in our highly competitive
marketplace. No longer relying on mass-market efforts alone, smart marketers are increasing their online initiatives,
using more targeted, measurable strategies that leverage the power of customer data to provide relevant, compelling
communications that speak to consumers one-to-one. After all, winning new customers today means understanding
and anticipating their needs, interests and behaviors, and weaving relevant messaging into multiple media channels
to reach them at every available touch point.

Techniques of acquiring customers on the web:

 Social Networks
 Pay Per Click
 Blogs & Wikis
 Instant Messaging
 Forums & Guestbooks
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 Search Engine.Optimization
 Viral Marketing

Social Networks

Social networks make viral marketing and word-of-mouth marketing much easier than before. The best use
out of social networks is not to make money directly off them, but to harness their marketing potential and to use
them to market your own business. The main goal of any search engine marketer is to drive more traffic to their
site. The best way to do that is to optimize your website (including the process of link building) for your target
keywords. Online social networks present an efficient platform for you to use in the spread of your marketing
message. In addition, it is also a great tool for getting tons of visitors and thousands of page views to your site.

Pay per Click

Pay per click (PPC) is an Internet advertising model used on search engines, advertising networks, and
content websites, such as blogs, where advertisers only pay when a user actually clicks on an advertisement to visit
the advertisers' website. With search engines, advertisers typically bid on keyword phrases relevant to their target
market. When a user types a keyword query matching an advertiser's keyword list, or views a webpage with
relevant content, the advertisements may be displayed. Such advertisements are called sponsored links or sponsored
ads, and appear adjacent to or above the "natural" or organic results on search engine results pages, or anywhere a
webmaster or blogger chooses on a content page. Content websites commonly charge a fixed price for a click rather
than use a bidding mechanism.

Blogs & Wikis

Blogs and wikis are flexible practices and technologies that are increasingly being used within companies
and organizations to ease the creation and dissemination of information, as well as making it easier for companies
to communicate effectively with customers, partners, and the public. Blogs, or web logs, are the latest in hyped
technologies. Like any new technology (although blogs have been around for more than a few years), they have the
potential to change the technology landscape in ways that are not yet clear. Blogs are best thought of as a way to
present information to the world or to a select group. The traditional blog is written in the form of an online diary
and includes the writer's thoughts on a. subject, links to interesting information, and often pictures. The writer may
post a new item several times a day, or a few times a year.

There are blogs on every conceivable subject and in most human languages. Traditionally blogs have been
created by one author and represent one author's views, although there are some group blogs. Wikis are a different
method of publishing and presenting online information.The most famous wiki is the Wikipedia, an online
collaborative encyclopedia that illustrates the common wiki features, namely collaborative authoring with
lightweight content management features such as lists of changed pages, author tracking, and locking. Some wiki
systems also have version control and rollback. All wikis make it easy to add new pages and create links.

Instant Messaging
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Instant messaging (IM) is a form of real-time communication between two or more people based on typed
text. The text is conveyed via devices connected over a network such as the Internet. Instant messaging (IM) are
technologies that create the possibility of real-time text-based communication between two or more participants
over the internet or some form of internal network/ intranet. It is important to understand that what separates chat
and instant messaging from technologies such as e-mail is the perceived synchronicity of the communication by the
user - Chat happens in real-time before your eyes. Some systems allow the sending of messages to people .not
currently logged on (offline messages), thus removing much of the difference between Instant Messaging and e~
mail.

Guestbooks

A guestbook is a place where visitors can leave comments about your site. Good hosting companies have
part loaded Guestbook software which you can easily add to your account such as the Viper Guestbook. Guestbook
enables you to vet all the new entries before they are posted. You may find, as we did for one of our sites that this
gets to be so arduous that you end up taking the Guestbook down. It is a real shame, but you have to weigh up the
amount of extra time going through the entries is taking you against the number of bona fide and useful comments
you are getting.

Forums

Good web hosting companies allow you to use forum software for free. Forums do not develop overnight.
They take time. Sometime-, it is months before you get the first few members. But again, don’t be disheartened.
Expect' it to take time, start off some interesting threads yourself and wait to see what happens. Forums are great
ways of letting others generate content for your website - a successful forum will grow into a community where
people chat to, share information with and help each other. Search engines spider forums, and can help bring traffic
to your site.

Search Engine Optimization

Search engine optimization (SEO) is the process of improving the volume and quality of traffic to a web site
from search engines via "natural" ("organic" or "algorithmic") search results. Usually, the earlier a site is presented
in the search results, or the higher it "ranks," the more searchers will visit that site. SEO can also target different
kinds of search, including image search, local search, and industry- specific vertical search engines.As an Internet
marketing strategy, SEO considers how search engines work and what people search for. Optimizing a website
primarily involves editing its content and HTML coding to both increase its relevance to specific keywords and to
remove barriers to the indexing activities of search engines.

Viral Marketing

Viral marketing and viral advertising refer to marketing techniques that use pre-existing social networks to
produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-
replicating viral processes, analogous to the spread of pathological and computer viruses. It can be word-of-mouth
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delivered or enhanced by the network effects of the Internet. Viral marketing is a marketing phenomenon that
facilitates and encourages people to pass along a marketing message voluntarily. Viral promotions may take the
form of video clips, interactive Flash games, advergames, ebooks, brandable software, images, or even text
messages. The basic form of viral marketing is not infinitely sustainable.It is claimed that a customer tells an
average of three people about a product or service they like, and eleven people about a product or service which
they did not like. Viral marketing is based on this natural human behavior.

Question Number :18 (May / June 2009)

18. Explain marketing information system. From what sources is the marketing information system
developed? (MAY/JUNE- 2009)

A marketing information system is a continuing and interacting structure of people, equipment and procedures
to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing
decision makers to improve their marketing planning, implementation, and control. A marketing information system
(MIS) is intended to bring together disparate items of data into a coherent body of information. An MIS is, as will
shortly be seen, more than raw data or information suitable for the purposes of decision making. An MIS also
provides methods for interpreting the information the MIS provides.

The explanation of this model of an MIS begins with a description of each of its four main constituent sources:

 The internal reporting systems,


 Marketing research system,
 Marketing intelligence system and
 Marketing models.

It is suggested that whilst the MIS varies in its degree of sophistication - with many in the industrialized
countries being computerized and few in the developing countries being so - a fully fledged MIS should have these
components, the methods (and technologies) of collection, storing, retrieving and processing data notwithstanding.

Internal reporting systems: All enterprises which have been in operation for any period of time nave a wealth of
information. However, this information often remains under-utilized because it is compartmentalized, either in the
form of an individual entrepreneur or in the functional departments of larger businesses. That is, information is
usually categorized according to its nature so that there are, for example, financial, production, manpower,
marketing, stock holding and logistical data. Often the entrepreneur, or various personnel working in the functional
departments holding these pieces of data, do not see how it could help decision makers in other functional areas.
Similarly, decision makers can fail to appreciate how information from other functional areas might help them and
therefore do not request it.

The internal records that are of immediate value to marketing decisions are: orders received, stock holdings and
sales invoices. These are but a few of the internal records that can be used by marketing managers, but even this
small set of records is capable of generating a great deal of information. Below, is a list of some of the information
that can be derived from sales invoices.
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Marketing research systems: The general topic of marketing research has been the prime ‘ subject of the
textbook and only a little more needs to be added here. Marketing research is a proactive search for information.
That is, the enterprise which commissions these studies does so to solve a perceived marketing problem. In many
cases, data is collected in a purposeful way to address a well- defined problem (or a problem which can be defined
and solved within the course of the study). The other form of marketing research centers not around a specific
marketing problem but is an attempt to continuously monitor the marketing environment. These monitoring or
tracking exercises are continuous marketing research studies, often involving panels of farmers, consumers or
distributors from which the same data is collected at regular intervals. Whilst the ad hoc study and continuous
marketing research differs in the orientation, yet they are both proactive.

Marketing intelligence systems: Whereas marketing research is focused, market intelligence is not. A
marketing intelligence system is a set of procedures and data sources used by marketing managers to sift
information from the environment that they can use in their decision making.Marketing intelligence is the province
of entrepreneurs and senior managers within an agribusiness. It involves them in scanning newspaper trade
magazines, business journals and reports, economic forecasts- and other media. In addition it involves management
in talking to producers, suppliers and customers, as well as to competitors. Nonetheless, it is a largely informal
process of observing and conversing.Some enterprises will approach marketing intelligence gathering in a more
deliberate fashion and will train its sales force, after-sales personnel and district/area managers to take cognisance
of competitors’ actions, customer complaints and requests and distributor problems. Enterprises with vision will
also encourage intermediaries, such as collectors, retailers, traders and other middlemen to be proactive in
conveying market intelligence back to them.

Marketing models: Within the MIS there has to be the means of interpreting information in order to give
direction to decision. These models may be computerized or may not.

Typical tools are:

 Time series sales modes


 Brand switching model
 Linear programming
 Elasticity models (price, incomes, demand, supply, etc.
 Regression and correlation models
 Analysis of Variance (ANOVA) models
 Sensitivity analysis
 Discounted cash flow
 Spreadsheet ‘what if models

These and similar mathematical, statistical, econometric and financial models are the analytical subsystem of
the MIS. A relatively modest investment in a desktop computer is enough to allow an enterprise to automate the
analysis of its data. Some of the models used are stochastic, i.e. those containing a probabilistic element whereas
others are deterministic models where chance plays no part. Brand switching models are stochastic since these
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express brand choices in probabilities whereas linear programming is deterministic in that the relationships between
variables are expressed in exact mathematical terms.

19. Explain the impact of the Internet on Markets. (MAY/JUNE- 2009)

The Internet has brought many unique benefits to marketing, one of which being lower costs and greater
capabilities for the distribution of information and media to a global audience. The interactive nature of Internet
marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium.
Internet marketing is sometimes considered to have a broader scope because it not only refers to digital media such
as • the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital
customer data and electronic customer relationship management (ECRM) systems. Internet marketing ties together
creative and technical aspects of the Internet, including design, development, advertising, and sale.

Internet marketing and geo-marketing places an emphasis on marketing that appeals to a specific behavior or
interest, rather than reaching out to a broadly-defined demographic. “On- and Off-line” marketers typically segment
their markets according to age group, gender, geography, and other general factors. Marketers have the luxury of
targeting by activity and geolocation. For example, a kayak company can post advertisements on kayaking and
canoing websites with the full knowledge that the audience has a related interest.

Internet marketing differs from magazine advertisements, where the goal is to appeal to the projected
demographic of the periodical: Because the advertiser has knowledge of the target audience— people who engage
in certain activities (e.g., uploading pictures, contributing to blogs) the company does not rely on the expectation
that a certain group of people will be interested in its new product or service.Internet marketing is relatively
inexpensive when compared to the ratio of cost against the reach of the target audience.

Companies can reach a wide audience for a small fraction of traditional advertising budgets. The nature of the
medium allows consumers to research and purchase products and services at their own convenience. Therefore,
businesses have the advantage of appealing to consumers in a medium that can bring results quickly. The strategy
and overall effectiveness of marketing campaigns depend on business goals and cost-volume profit analysis.

Internet marketing requires customers to use newer technologies rather than traditional media. Low-speed
Internet connections are another barrier: If companies build large or overly-complicated websites, individuals
connected to the Internet via dial-up connections or mobile devices experience significant delays in content
delivery.

From the buyer’s perspective, the inability of shoppers to touch, smell, taste or “try on” tangible goods before
making an on-line purchase can be limiting. However, there is an industry standard for e-commerce vendors to
reassure customers by having liberal return policies as well as providing in-store pick-up services.

20. Explain marketing research process in detail with suitable examples (June 2010)

Refer to Q.no 5. (NOV/DEC 2006)


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21. Has marketing changed in the connected world. Discuss the strategy implications of the internet for
marketing. (Nov 2010)

Refer to Question Number : 4 (May / June 2006)

22. Discuss the different online advertising options for a marketer. (Nov 2010)

Refer to Question Number : 3(May / June 2006)

23.What are the ethical issues in Marketing research (June 2011)

Ethics in marketing: The American Marketing Association commits itself to promoting the highest
standard of professional ethical norms and values for its members.

Norms: are established standards of conduct that are expected and maintained by society and / or
professional organization.

Values represent the collective conception of what people find desirable, important and morally proper.

Framework of analysis for Marketing Ethics:

1) Value-oriented Framework: It analyses ethical problems on the basis of the values which they infringe
(e.g: Honesty, autonomy, privacy, transparency).
2) Stakeholder Oriented Framework: It analyses ethical Problems on the basis of whom they affect.(e.g:
Consumers, competitors.)
3) Process-Oriented Framework: It analyses ethical Problems in terms of the categories used by marketing
specialists (e.g: research, price, promotion, and placement.)