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Marketing Management (5565)

Executive MBA/MPA (Col)

Adnan Humayun Roll no:


Spring, 2010.

Q. 1 Distinguish between marketing and selling? How marketing orientated manager can integrate 4Ps to formulate marketing strategy. Explain in detail.

Marketing and selling

  • 1. The selling concept says that if the customers are not constantly

reminded about the presence of the products, they will forget you and will not but the product. Companies have to advertise massively and they have to make an effort to “sell” their products. On the other hand, the marketing concept says that you should keep the customer needs and demands in mind so that there will be a demand for what you produce. It negates the selling concept to some extent because it does not believe entirely selling the product instead it focuses on products that customers want

so there will already be a demand.

Distinction between the Sales and Marketing Concepts

  • 2. In









accommodation of the target market occurs. Two-way communication

(sometimes between a salesperson and a customer) is emphasized in

marketing so learning can take place and product offerings improved.



  • 3. In sales concept, it is the desire to sell a product that the business

has made as quickly as possible to fulfil sales volume objectives. When viewed through the marketing concept lens, however, businesses must first and foremost fulfil consumers' wants and needs. The belief is that when those wants and needs are fulfilled, a profit will be made. The selling concept, instead of focusing on meeting consumer demand, tries to make consumer demand match the products it has produced. Whereas marketing encompasses many research and promotional activities to discover what products are wanted and to make potential customers aware of them.

4Ps to formulate marketing strategy

  • 4. Marketing decision variables are those variables under the firm's

control that can affect the level of demand for the firm's products. They

are distinguished from environmental and competitive action variables that are not totally and directly under the firm's control. The four marketing decision variables are:

  • a. Price variables


Allowances and deals


Distribution and retailer mark-ups


Discount structure

  • b. Product variables




Models and sizes







  • c. Promotion variables




Sales promotion


Personal selling



  • d. Place variables


Channels of distribution


Outlet location


Sales territories


Warehousing system

Q. 2 Discuss the concept of selling by highlighting its special characteristics? Why service sector is widely growing all over the world?

are left to themselves, they will not make the effort to buy the

firm's products. Therefore, it dictates, the firm must be aggressive in pushing its sales 1 .

  • 2. Special characteristics:

  • a. Job Security

  • b. Advancement Opportunities

  • c. Immediate Feedback

  • d. Prestige

  • e. Job Variety

  • f. Independence

  • g. Compensation

  • h. Worldwide recognition

  • 3. Reasons for Growth. The real reason for the growth of the service sector is due to the following factors:-

    • a. Increase in urbanization

    • b. Privatization

    • c. More demand for intermediate and final consumer services

    • d. Availability of quality services like banking, insurance, trade, commerce, entertainment etc

Q. 3 Discuss the significance of marketing mix in relation with Product Life Cycle. What should be the marketing strategies in the different stages of product life cycle?

Answer 3.

Significance of Marketing Mix In Relation With Product Life Cycle 2

All products or services move through product life-cycles. Typically these life-cycles move through four stages: entry or introduction; growth; maturity; and finally, decline.

While some life-cycles can be extremely short (for example, the pet rocks, trolls, pogs, etc. of the 80s and 90s); other product or service life-cycles can last for hundreds of years (paper, printing, etc.). As a product moves through its life cycle, the marketing approach must be adapted.

All of the information below is based on the product or service being genuinely new to its market (could be available in other markets) and based on the product or service being genuinely good and valued by the market.

Four Product Life Cycle Stages:

Entry or Introduction Stage:


Launch new product.


Develop the market for the product.


Build brand awareness. Advertise.


Trademark or patent the new product if necessary.


Consider your pricing strategy: should it be a low price to quickly gain market share; or a high price if limited competition and high cost to bring to market:

Target Marketing distribution, place or location based on your market research – target the easiest market to enter first; you want to have early and fast wins. Promotional materials are developed to inform and gain awareness, understanding and acceptance of the product. Focus on an audience that likes to be an early adopter. Growth Stage:




Focus on growing market share.


Increase brand preference: focus on product features,


advantages and benefits. Product quality must be good. Awareness of quality focus


must be a communication message. As product demand grows, stabilize pricing and ensure that the cost/price relationship is valid AND also supported by the market. At this stage (for new products specifically) you will


have an advantage over your competition and price will not be as sensitive as in later stages. Enter additional markets. Your product, and its brand, will be gaining recognition and will receive easier acceptance. Demand will increase. Promotional materials are focused on the broader, more expanded market (and audience). Mature Stage:



Small business sales growth starts to slow down. Focus on holding on to market share and making as much profit as possible. Competitors have caught up to you and your product. Define and refine what’s unique about your product: unique value proposition and strong product differentiation and product positioning (or re-positioning). If possible, and/or necessary, add new, different and unique features and benefits to your product. Pricing may be impacted by competitive activity. Develop alternative competitive strategy to cutting price for as long as possible. Distance to market may begin to cost in time and money. Look for alternatives: open a branch closer to the big markets, or the smaller less competitive markets; can the product be sold online – expand your market reach. Promotional materials are focused on the unique value proposition, new features and benefits and other product differentiation. Declining Stage:








Your product has become a commodity. Typically at this


stage, competition is fierce and you can only continue to win if you are the lowest cost provider. Consider carefully if you wish to continue with this product if


cannot compete effectively. Look at ways to reduce product costs.


Look at ways to improve or change the product.

Q. 4 How market segmentation differs from product differentiation? Explain the bases

for market segmentation and targeting market.



  • 1. Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments. Companies often favor this method of marketing to the one-size-fits-all mass marketing approach, because it allows them to target specific groups that might not be reached by mass marketing programs.

  • 2. Market segmentation—also called micromarketing—simplifies the marketing process, because it allows marketers to concentrate their advertising on groups of consumers who share significant characteristics. Marketers, therefore, can produce specific advertising geared towards specific segments; otherwise marketers have to create very general advertising and hope that it will appeal to a diverse audience. Market segmentation also can be more efficient than traditional marketing techniques such as product differentiation. Because marketers focus their advertising on specific segments, they can expect better results from each segment than they could expect from these consumer groups if treated as a whole.

  • 3. Market segmentation, however, works effectively only for certain kinds of products and services.

    • a. To determine whether to segment a market, marketers must find out if the market can be identified and measured, which entails determining which consumers belong to specific

market segments.

  • b. Marketers must determine if the segments are large enough to be profitable. While marketers can easily divide the total

market into smaller groups, these groups might be so small

that they do not justify the expenses associated with market


  • c. Marketers must be able to reach the segments through their advertising. If the members of a particular segment do not share interest in a common magazine or television show, for example, then marketers have no way of reaching the segment and so the segment is superfluous.

  • d. Marketers must gauge the responsiveness of the segments and find out if a proposed segment would likely respond to a marketing campaign. If it is not probable that a segment will react to a promotion, then the segment is not useful.

  • e. Marketers must determine if the segments will change in the near future. Since it takes time to prepare a marketing strategy for specific segment and since it takes time for market segmentation to be profitable, creating segments where consumer needs and wants are likely to change would not be productive.


The market can be divided into segments by using four

"segmentation bases": psychographic, behavioristic, geographic,

and demographic bases. Psychographic and behavioristic bases are

used to determine preferences and demand for a product and

advertising content, while geographic and demographic criteria are

used to determine product design and regional focus.

  • a. Psychographic bases include personality traits such as consumer attitudes, lifestyles, and interests.

  • b. Behavioristic bases include attitudes towards products such as the frequency of use, brand loyalty, benefits sought in a product, and readiness to purchase the product.

  • c. Geographic bases focus on preferences contingent on regional factors, such as region (e.g., North or South), county, population density, urban or rural location, and climate.

  • d. Demographics include personal characteristics such as gender, age, marital status, social attributes (such as ethnicity and religion), and income level.

Other bases for segmentation include occasions and consumer

knowledge of and interest in particular brands. Marketers can use

various occasions such as marriage, graduation, anniversaries,

birthdays, and holidays to promote products. Marketers can

advertise an assortment of products including candy, cards, and

flowers to various segments based on occasions. In addition,

marketers can create segments based on consumer knowledge and

interest, targeting novices and veterans with different promotions

for their products or brands. But whatever segmentation bases

marketers use, they analyze their data and group consumers in

order to determine consumer behavior.



Once a company has gathered

information from these segmentation bases, it must decide how to

divide the market, bearing in mind that market segmentation seeks

to minimize the differences within a segment and maximize the

differences among segments. Consequently, depending on the

product or service to be marketed, simple divisions along age,

gender, or geographic lines alone may yield segments that are too

vague to be of use. Instead, marketers may have to consider several

characteristics or clusters of characteristics in order to divide the

market into useful segments. When considering beer consumption,

for example, marketers must look at both age and gender: the

majority of beer drinkers are both young and male.

  • 6. METHODS OF SEGMENTATION. Companies can implement market segmentation in three general ways: through differentiation, concentration, and atomization. Differentiation refers to marketing products or services to different market segments based on each segment's individual needs as well as to developing new products for different segments. For example, a computer maker could market its products to home users, corporations, small businesses, and government agencies, thereby differentiating the needs of each of these four segments and appropriately targeting them.

  • 7. Marketing Strategy. After choosing a method of market segmentation, marketers must integrate the method into an overall marketing strategy. The marketing strategy will try to make the target product or service appeal to the target segment through an advertising campaign developed based on segmentation information such as age, gender, or location. Marketers also consider what a company's strategic position in a market is—e.g., if it is a computer supplier to home users or businesses—and create a marketing program that will help a company achieve or maintain this position. If the segment is properly defined for a specific product or service, then developing promotional strategies and

reaching the target segment should be relatively easy. The

information used to help create the market segments should help

marketers choose among promotional techniques (e.g., direct

marketing, advertising, publicity, and sales promotion), pricing

strategies, and distribution strategies. This information also should

help marketers choose among various advertising media. 3

Q. 5 Write short notes on the followings:



Functional Organization


Marketing Information System


Answer 5.

  • 1. Standardization 4

This is known as Global Standardization, which means developing standardized products marketed worldwide with a standardized marketing mix, thus saving the cost. An example of this is the Big-Mac of McDonald's. They used the same brand name and same slogan for the same product all over the world. This assumes that their is a large, similar target market that can be targeted globally. McDonald's and Coca-Cola are two examples of companies using this strategy.

The main advantage of this strategy is cost saving. Using standardized products across all your business units helps generate economies of scale. These savings can then be applied to your business' margin, lower price to consumer, or reinvested into the company for research and development. In the examples of Coke and McDonald's they use their cost

savings to offer low prices to consumers, they then make their money with smaller margins spread across high numbers of consumers.

  • 2. Functional Organization 5

An organization structured according to specialty. For example, a pension committee may include active members, nonactive members, and independent members. The functional organization includes the manner in which members are elected or appointed, how they are trained, and a description of their duties. Ideally, organizational structures should be shaped and implemented for the primary purpose of facilitating the achievement of organizational goals in an efficient manner. Indeed, having a suitable organizational structure in place, one that recognizes and addresses the various human and business realities of the company in question is a prerequisite for long-term success.

  • 3. Marketing Information System 6

The marketing information system is the processes associated with collecting, analyzing, and reporting marketing research information. The system used may be as simple as a manually tabulated consumer survey or as complex as a computer system for tracking the distribution and redemption of cents-off coupons in terms of where the consumer got the coupon, where he redeemed it, what he purchased with it and in what size or quantity he purchased it, and how the sales volume for each product was affected in each area or store where coupons were available. Marketing information provides input to marketing decisions including product improvements, price and packaging changes, copywriting, media buying, distribution, and so forth. Accounting systems are a part of

  • 4

  • 5

  • 6

marketing information systems providing product sales and profit information.