Question 1: Marketing – What is marketing? Examples. Difference between Marketing and

Selling. Why is Marketing the most important function in an organisation? What are 4 Ps of

Marketing Mix and 7ps of Service Marketing Mix? What is the difference between

Marketing a Good (tangible product) and Marketing a Service?

Answer: Marketing is identifying, understanding and meeting customer needs. It is the

activity, set of institutions, and processes for creating, communicating, delivering, and

exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing is about understanding customers and finding ways to provide products or

services which customers demand.

Example 1- The Volkswagen ‘Fly for Jetta’

Unlike the more serious campaigns from Volkswagen’s yesteryears, this TVC brings to you a

mind-boggling depiction of the idea “Anything for a Jetta”. The ad showcases a boy who is

born with a pair of wings; who has all throughout led a rather super-humanly life. His

biggest choice comes when he has to cut off his wings in order to drive his dream car. Not

able to resist the temptation of driving the luxurious Volkswagen Jetta, he ultimately

decides to get rid of his biggest asset, his ‘wings’. The car manufacturers have amazingly fit

in their unique idea of unparalleled luxury through this fictitious, larger than life backdrop.

Example 2- Airtel “Har ek friend”

The catchiest viral-ad-campaign was created by Airtel. So popular is the jingle, everyone finds

themselves humming the tune to “Har ek friend zaroori hota hai”. The makers of the ad might not

have particularly kept brand’s USPs in mind while making the song, but nevertheless they were able

to gather a more-than-expected fan following for their brand, this financial year. Be it the massive

number of downloads, status updates, or Airtel song sharing on social media, the brand was able to

strike a chord with the urban youth – a major chunk of their target consumers.

Example 3- Coca Cola

From the streets of Paris to villages of Western Africa, Coca Cola is everywhere. All credit

goes to its massive marketing which it has done in the past and still continues to do. It has

got brilliant marketing and customer engagement. How did a little company from Atlanta

become so big? Well the answer is clear, all because of its marketing efforts. Its various

marketing campaigns include-

_Friendship machine

_Coca Cola reason to believe

_Coca Cola even took help of music genres with Coke Studio.

_Even top celebrities like Aamir Khan have endorsed the Brand in India with crazy and

catchy taglines like- ‘Thanda Matlab Coca Cola ‘

Example 4- AMUL

It is yet another brand which has succeeded because of its massive marketing activities.

Right from the hoardings on the road to the amazing advertisement, the marketing by Amul

has been a huge success.

Difference between marketing and selling:

Marketing Selling

Determine future needs and has a strategy to meet those needs for the long term relationship.

Makes customer demand match the products the company currently offers.

Fulfil customer's wants and needs through products and/or services the company can offer.

Fulfil sales volume objectives

Focuses on customer’s needs External market orientation. Focuses on seller’s needs

Customer enjoys supreme importance High pressure to sell goods already produced

Product planning and development to match products with market

Fragmented approach to achieve immediate gains

Integrated approach to achieve long term goals

Converts products into cash

Converts customers’ needs into products Profits through sales volume

Profit through customer satisfaction

Why is Marketing the most important function in an organisation?

Marketing is important because it enhances the production and distribution of products and services. It also promotes product awareness to the public, boosting sales while at the same time building the company's reputation.

What are 4 Ps of Marketing Mix?

The term marketing mix is referred to the amalgamation and use of the four P’s of

marketing in a manner so as to attain the highest level of customer motivation to buy a

particular product or services. Price, place, product and promotion are elements which

constitute the four P’s of the marketing mix. Some commentators may increase the

marketing mix to the Five P's, to include people. Others may increase the mix to Seven P's,

to include physical evidence and process.

PRODUCT

Product is the bases for all the marketing activities undertaken because all the marketing

communications are aimed towards selling utmost quantities of the product .

PRICE

Price plays an important role in the success of a product or service. Not only is it a major

determining factor for the customer while buying a product but also plays a major part in

determining the image of a product in the mind of the customer. The seller has to also keep

in mind the profit element while deciding the price of a product. Thus a balance between all

the aspects has to be achieved to determine a balanced pricing strategy.

PLACE

To sell and buy a product or service a common place is required which is suitable for both

the customers as well as the sellers. The selection of a particular marketplace suitable is

very essential to match the product and brand image.

Promotion

Promotion is basically aimed towards creating an awareness in the market and the

customers mind about a particular product or service. Its cheaper than advertising and can

definitely be more credible .It helps strengthen the brand image and can be extensively

used for new product launch.

What are 7 Ps of service marketing?

1.Product

2.Price

3.Place

4.Promotion

5.Process

6.Physical evidence

7.People

What is the difference between Marketing a Good (tangible product) and Marketing a

Service?

Products come to customers whereas customers come to services. Product benefits are

embedded inside the product / package and can be transported to their customers through

distribution channels. Services are location-based and the customers need to travel to

theses service locations. When it comes to marketing of services, do remember that it is all

about customer relationships. Repeated experimentation is possible when it comes to

products and it is these experimentations that decide if the product sells itself or not. The

risk level has been lowered since the experience of the product is tested beforehand and

the customer is secure in the knowledge that the test product and final one delivered are

not radically different from one another.

Question 2 What is positioning? What is a Positioning Map? What is an FCB Grid? What are

Points Of Parity (POP) and Points Of Differences? What is Branding?

Answer: A marketing strategy that aims to make a brand occupy a distinct position, relative

to competing brands, in the mind of the customer. Companies apply this strategy either by

emphasizing the distinguishing features of their brand (what it is, what it does and how,

etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or

luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is

very difficult to reposition it without destroying its credibility. Also called product

positioning.

Positioning refers to the perception of a product in the minds of consumer in relation to its

competing product. Positioning map is a graphical device to study and analyse the positions

or perception of each of a group of competing products in respect of two specific product

characteristic.

What is a Positioning Map?

It is a basically a graph that represents the strength or extent of the two product

characteristics on x and y-axis.

What is an FCB Grid?

FCB grid is an integrative model. This model divides goods and services into four categories,

along two axes: the Think/Feel axis, and the High Involvement/Low Involvement axis.

What are Points Of Parity (POP)?

Points of Parity (POP) are usually the attributes or functionalities or benefits or any other

marketing mix elements that are not unique to the brand and might be shared by some or

all the competitors, as they mostly include the basic necessities for a brand to be considered

in a particular category.

What is Points Of Differences (POD)?

Points of Difference (POD) are usually the attributes or functionalities or benefits or any

other marketing mix elements that a consumer strongly associates with a brand, which

he/she feels is not offered by and of the competitors. To define in short, Points-of-

difference are relatively distinct aspects of a brand, as compared to its competitors.

What is Branding?

The process involved in creating a unique name and image for a product in the consumers'

mind, mainly through advertising campaigns with a consistent theme. Branding aims to

establish a significant and differentiated presence in the market that attracts and retains

loyal customers.

The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol

or design, or a combination of them intended to identify the goods and services of one

seller or group of sellers and to differentiate them from those of other sellers.

Question 3 What is Segmentation? What is Target Marketing? What is a Target Group (TG)?

What is the difference between Target Market or Target Group and Target Audience?

Answer Segmentation is the practice of dividing a customer base into groups of individuals

that are similar in specific ways relevant to marketing, such as age, gender, interests,

spending habits and so on. Customer segmentation allows a company to target specific

groups of customers effectively and allocate marketing resources to best effect. The process

of defining and subdividing a large homogenous market into clearly identifiable segments

having similar needs, wants, or demand characteristics. Its objective is to design a marketing

mix that precisely matches the expectations of customers in the targeted segment.

What is Target Marketing?

Target marketing is a marketing and advertising campaign that is targeted for a specific

group of people defined by age, sex, socioeconomic status, race, or educational level. Target

Marketing refers to the process that involves breaking a market into segments and then

concentrating your marketing efforts on one or a few key segments. .

What is a Target Group (TG)?

Target marketing is the breaking of a market into segments and focussing the marketing

efforts on one or a few important segments. It involves reaching out to consumers or new

customers aiming to sell your products and services to them.

What is the difference between Target Market or Target Group and Target Audience?

Target group is a group of customers towards which a business has decided to aim its

marketing efforts and ultimately its merchandise.

A target market is a specific, well-defined segment of consumers that a company plans to

target with its products, services and marketing activities.

The term "target audience" is a bit narrower; it refers specifically to the group of consumers

targeted by advertisements. Outside of the context of business, target audience can also

refer to the specific group of people targeted by television shows, movies and music

products. An advertisement's target audience can be the same as the brand's target market,

but a target audience can be more well defined.

Question 4 What is a Product Strategy? Explain the Total Product Concept with Examples?

What are Product Mix and Product Line?

Answer A product strategy is a plan for marketing a good that is founded upon an analysis

of the nature of the intended market, how much market share is to be achieved, how the

good is to be marketed and how much profit is anticipated. Most business marketing

directors will develop a clear and realistic product strategy prior to the launch of a new

product into its intended market.

Explain the Total Product Concept with Examples?

Kotler suggested that if you view a product on three levels it will help you extract all the

benefits that your product offers. This strategy has various names including Total Product

Concept, Augmented Product and Three Levels Of a Product.

Level One: Core Product

Level one is the most basic level and simply looks at what people set out to buy and what

benefits the producer would like their product to offer buyers. For example a camera is

expected to take pictures but there may be other benefits that the producer wants the

buyer to enjoy such as a wide lens, face recognition and high definition videos. So prior to

designing any product designers should list the core benefits the product needs to provide.

Level 2: Actual Product

Level two is about translating the list of core product benefits into a product that people will

buy. There may be competitor products offering the same benefits so the aim at this stage is

to design a product that will persuade people to purchase your product. Kotler states that

this can involve deciding on the quality level, product and service features, styling, branding

and packaging. For example Apple's iPhone design has enabled it to become a smart phone

market leader so that by September 2012 it was able to launch the iPhone 5, the 5th version

of this product. There are other smart phones on the market but Apple has managed to

design a product which people pre-order and camp overnight outside Apple's retail stores

so that they can be the first ones to buy the product.

Level 3: Augmented product

Level three involves deciding the additional non tangible benefits that a product can offer.

Competition at this level is based around after sales service, help lines, warranties,

free/cheap delivery and so on. In other words it is things that the product does not do but

customers may find them useful. Non tangible benefits such as product warranties offer

customers peace of mind and demonstrate the manufacturer has faith in the quality of its

product. In fact the ubiqtous use of some augmented benefits have turn some level three

benefits into a customer expectation for example customers expect cars to have

manufacturer warranties.

What are Product Mix and Product Line?

Product mix is a range of associated products that yields larger sales revenue when

marketed together than if they were marketed individually or in isolation from others.It

includes :

1.Width

2.Length

3.Depth

4.Consistency

5.Product market mix strategy

The product mix of a company is generally defined as the complete set of all products a

business offers to a market.

A group of related products manufactured by a single company. For example, a cosmetic

company's makeup product line might include foundation, concealer, powder, blush,

eyeliner, eye shadow, mascara and lipstick products that are all closely related. The same

company might also offer more than one product line. The cosmetic company might have a

special product line geared toward teenagers and another line geared toward women older

than 60, in addition to its regular product line, which can be used by women of any age.

Frequently, a product line includes different products that are offered to the public at

varying price points. This way, a manufacturer or company can ensure that all products

within a line will be purchased by all kinds of people. Product line extension refers to any

additional products that may be added to a current product line.

Through the collection of statistical data, marketers can effectively determine what

products should be kept within a product line, and what products should be phased out.

Pricing is used to create a large barrier between different products, and higher-priced

products are usually justified based upon certain ingredients.

Question 5 What are different types of Pricing Strategies?

Answer Psychological pricing: Pricing designed to have a positive psychological impact. For

example, selling a product at $3.95 or $3.99, rather than $4.00. There are certain price

points where people are willing to buy a product. If the price of a product is $100 and the

company prices it as $99, then it is called psychological pricing. In most of the consumers

mind $99 is psychologically ‘less’ than $100. A minor distinction in pricing can make a big

difference in sales. The company that succeeds in finding psychological price points can

improve sales and maximize revenue. This pricing strategy makes the customer thinks that,

the highest price of a product is the best or quality product.

Price leadership: An observation made of oligopolistic business behaviour in which one

company, usually the dominant competitor among several, leads the way in determining

prices, the others soon following. The context is a state of limited competition, in which a

market is shared by a small number of producers or sellers.

Price discrimination: Price discrimination is the practice of setting a different price for the

same product in different segments to the market. For example, this can be for different

classes, such as ages, or for different opening times.

Premium pricing: Premium pricing is the practice of keeping the price of a product or

service artificially high in order to encourage favourable perceptions among buyers, based

solely on the price. The practice is intended to exploit the (not necessarily justifiable)

tendency for buyers to assume that expensive items enjoy an exceptional reputation, are

more reliable or desirable, or represent exceptional quality and distinction.

Loss leader: A loss leader or leader is a product sold at a low price (i.e. at cost or below cost)

to stimulate other profitable sales. This would help the companies to expand its market

share as a whole.

Value-based pricing: Pricing a product based on the value the product has for the customer

and not on its costs of production or any other factor. This pricing strategy is frequently

used where the value to the customer is many times the cost of producing the item or

service. For instance, the cost of producing a software CD is about the same independent of

the software on it, but the prices vary with the perceived value the customers are expected

to have. The perceived value will depend on the alternatives open to the customer. In

business these alternatives are using competitor’s software, using a manual work around, or

not doing an activity. In order to employ value-based pricing you have to know your

customer's business, his business costs, and his perceived alternatives. It is also known as

Perceived-value pricing.

Question 6 What is the role of “Place” in a Marketing Mix? What is a VMS and an HMS?

What are different format of retail stores found in India? (You may refer to my class slides of

RMS)

Answer: Place (or its more common name “distribution”) is about how a business gets its

products to the customers. The objective of distribution is clear. It is to: to make products

available in the right place at the right time in the right quantities. Distribution matters for a

business of any size – it is a crucial part of the marketing mix. Although figures vary widely

from product to product, roughly a fifth of the cost of a product goes on getting it to the

customer. 'Place' is concerned with various methods of transporting and storing goods, and

then making them available for the customer. Getting the right product to the right place at

the right time involves the distribution system. The choice of distribution method will

depend on a variety of circumstances. It will be more convenient for some manufacturers to

sell to wholesalers who then sell to retailers, while others will prefer to sell directly to

retailers or customers.

What is a VMS and an HMS?

VMS is formally or informally coordinated distribution channel where its independent

members work together to achieve greater efficiency and economies of scale, and to

eliminate channel-conflict arising out of disparate individual objectives. Three common

types of VMS are: (1) Administered: coordination between production anddistribution firms

is achieved by the size and influence of the dominant firm, without a formal agreement or

ownership. (2) Contractual: independent production and distribution firms formally agree to

integrate their resources. Franchising is an example of this type. (3) Corporate: production

firm owns a retail chain (forward integration) or a retail chain owns a production firm

(backward integration).

Where as HMS is A merger of firms on the same level in order to pursue marketing

opportunities. The firms combine their resources such as production capabilities and

distribution in order to maximize their earnings potential. For example, a soft drink

company may combine with a chips producer and the two products are marketing and

distributed together. See also vertical marketing system.

What are different format of retail stores found in India?

Different types of retail formats existing in India are:

Department stores:

Full length discount stores:

Variety stores:

Off price retailer:

Factory outlet:

Speciality stores:

Membership club:

Convenience store:

Hyper market:

Supermarket:

Question 7 What is Brand Equity? How can you Build Brand Equity? (Check my marketing

notes). How can you measure Brand Equity?

Answer: Brand equity is brand's power derived from the goodwill and name recognition that

it has earned over time, which translates into higher sales volume and higher profit margins

against competing brands. It is measured by qualitative and quantitative methods. The value

of a brand. From a consumer perspective, brand equity is based on consumer attitudes

about positive brand attributes and favourable consequences of brand use.

How can you Build Brand Equity?

The tangible and intangible value that a brand provides positively or negatively to an

organization, its products, its services, and its bottom-line derived from consumer

knowledge, perceptions, and experiences with the brand. Positive brand equity can help a

company in a variety of ways. The most common is the financial benefit which enables a

company to charge a price premium for that brand.

How can you measure Brand Equity?

Both qualitative and quantitative brand research as well as performance tracking should be

used to measure equity and performance to ensure brand equity is growing over time. You

can use in-person or virtual one-on-one interviews and focus groups to gather exploratory

data related to your brand’s performance as well as research surveys to track brand equity

growth among larger sample audiences. Of course, research should be conducted with

existing customers as well as former and prospective customers to get a full picture of the

equity the brand holds. At the same time, measuring that research data against financial

performance is critical for strategic planning and decision making.

Using these various methods to collect and analyse data, you can measure performance in

three core brand equity drivers: financial, strength, and consumer.

Question 8 What is Marketing ROI or Return on Marketing Investment (ROMI)?

Answer: Return on marketing investment (ROMI) is a metric used to measure the overall

effectiveness of a marketing campaign to help marketers make better decisions about

allocating future investments. ROMI is usually used in online marketing, though integrated

campaigns that span print, broadcast and social media may also rely on it for determining

overall success. ROMI is a subset of ROI (return on investment).

In the simplest sense, ROMI is measured by comparing revenue gains against marketing

investment. This calculation, however, reflects only the direct impact of marketing

investment on a business's revenue. As a result, many digital marketers include dwell time

or brand awareness in their ROMI metrics in an effort to quantify less tangible benefits and

target future campaigns more effectively. According to ROMI expert Gary R. Powell, with

the right data and analytics, marketers can deliver between 8% - 15% increased revenue,

profit and market share to the client without any increase in marketing investment.

The purpose of ROMI is to measure the degree to which spending on marketing contributes

to profits. Marketers are under more and more pressure to “show a return” on their

activities.

Question 9 What is BCG Matrix and what is the purpose of BCG Matrix? What is Ansoff

Matrix and the purpose of such a Matrix? What is McKinsey 7’s Framework?

Answer: BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to

portray firm’s brand portfolio or SBUs on a quadrant along relative market share axis

(horizontal axis) and speed of market growth (vertical axis) axis.” BCG matrix is a framework

created by Boston Consulting Group to evaluate the strategic position of the business brand

portfolio and its potential. It classifies business portfolio into four categories based on

industry attractiveness (growth rate of that industry) and competitive position (relative

market share). These two dimensions reveal likely profitability of the business portfolio in

terms of cash needed to support that unit and cash generated by it. The general purpose of

the analysis is to help understand, which brands the firm should invest in and which ones

should be divested.

Relative market share. One of the dimensions used to evaluate business portfolio is relative

market share. Higher corporate’s market share results in higher cash returns. This is because

a firm that produces more, benefits from higher economies of scale and experience curve,

which results in higher profits. Nonetheless, it is worth to note that some firms may

experience the same benefits with lower production outputs and lower market share.

Market growth rate. High market growth rate means higher earnings and sometimes profits

but it also consumes lots of cash, which is used as investment to stimulate further growth.

Therefore, business units that operate in rapid growth industries are cash users and are

worth investing in only when they are expected to grow or maintain market share in the

future.

There are four quadrants into which firms brands are classified:

Dogs. Dogs hold low market share compared to competitors and operate in a slowly growing

market. In general, they are not worth investing in because they generate low or negative

cash returns. But this is not always the truth. Some dogs may be profitable for long period of

time, they may provide synergies for other brands or SBUs or simple act as a defense to

counter competitors moves. Therefore, it is always important to perform deeper analysis of

each brand or SBU to make sure they are not worth investing in or have to be divested.

Strategic choices: Retrenchment, divestiture, liquidation

Cash cows. Cash cows are the most profitable brands and should be “milked” to provide as

much cash as possible. The cash gained from “cows” should be invested into stars to

support their further growth. According to growth-share matrix, corporates should not

invest into cash cows to induce growth but only to support them so they can maintain their

current market share. Again, this is not always the truth. Cash cows are usually large

corporations or SBUs that are capable of innovating new products or processes, which may

become new stars. If there would be no support for cash cows, they would not be capable

of such innovations.

Strategic choices: Product development, diversification, divestiture, retrenchment

Stars. Stars operate in high growth industries and maintain high market share. Stars are

both cash generators and cash users. They are the primary units in which the company

should invest its money, because stars are expected to become cash cows and generate

positive cash flows. Yet, not all stars become cash flows. This is especially true in rapidly

changing industries, where new innovative products can soon be outcompeted by new

technological advancements, so a star instead of becoming a cash cow, becomes a dog.

Strategic choices: Vertical integration, horizontal integration, market penetration, market

development, product development

Question marks. Question marks are the brands that require much closer consideration.

They hold low market share in fast growing markets consuming large amount of cash and

incurring losses. It has potential to gain market share and become a star, which would later

become cash cow. Question marks do not always succeed and even after large amount of

investments they struggle to gain market share and eventually become dogs. Therefore,

they require very close consideration to decide if they are worth investing in or not.

Strategic choices: Market penetration, market development, product development,

divestiture

The Ansoff Growth matrix is another marketing planning tool that helps a business

determine its product and market growth strategy.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend

on whether it markets new or existing products in new or existing markets. The output from

the Ansoff product/market matrix is a series of suggested growth strategies which set the

direction for the business strategy.

The 4 variables are :

1.Market development

2.Product development

3.Market penetration

4.Diversification

Mc Kinsey 7 framework includes :

Strategy

System

Shared Values

Skills

Style

Staff

Structure

10) What is an SBU? What is a Value Chain? What is Supply Chain Management?

Answer: Strategic Business Unit is an autonomous division or organizational unit, small

enough to be flexible and large enough to exercise control over most of the factors affecting

its long-term performance.

Because strategic business units are more agile (and usually have independent missions and

objectives), they allow the owning conglomerate to respond quickly to changing economic

or market situations. It is a division within an organization responsible for marketing its own

range of products.

Value chain is a high-level model of how businesses receive raw materials as input, add

value to the raw materials through various processes, and sell finished products to

customers. Value-chain analysis looks at every step a business goes through, from raw

materials to the eventual end-user. The goal is to deliver maximum value for the least

possible total cost. It is an interlinked value-adding activities that convert inputs into

outputs which, in turn, add to the bottom line and help create competitive advantage. A

value chain typically consists of (1) inbound distribution or logistics, (2) manufacturing

operations, (3) outbound distribution or logistics, (4) marketing and selling, and (5) after-

sales service. These activities are supported by (6) purchasing or procurement, (7) research

and development, (8) human resource development, (9) and corporate infrastructure.

The concept of Supply Chain Management is based on two core ideas. The first is that

practically every product that reaches an end user represents the cumulative effort of

multiple organizations. These organizations are referred to collectively as the supply chain.

The second idea is that while supply chains have existed for a long time, most organizations

have only paid attention to what was happening within their “four walls.” Few businesses

understood, much less managed, the entire chain of activities that ultimately delivered

products to the final customer. The result was disjointed and often ineffective supply chains.

Supply chain management, then, is the active management of supply chain activities to

maximize customer value and achieve a sustainable competitive advantage. It represents a

conscious effort by the supply chain firms to develop and run supply chains in the most

effective & efficient ways possible. Supply chain activities cover everything from product

development, sourcing, production, and logistics, as well as the information systems needed

to coordinate these activities.

The organizations that make up the supply chain are “linked” together through physical

flows and information flows. Physical flows involve the transformation, movement, and

storage of goods and materials. They are the most visible piece of the supply chain. But just

as important are information flows. Information flows allow the various supply chain

partners to coordinate their long-term plans, and to control the day-to-day flow of goods

and material up and down the supply chain.

11) What is CRM? What is “Share of Wallet”? What is Customer Life Time Value?

Answer: CRM is the abbreviation for customer relationship management. It entails all

aspects of interaction that a company has with its customer, whether it is sales or service-

related. While the phrase customer relationship management is most commonly used to

describe a business-customer relationship, CRM systems are used in the same way to

manage business contacts, clients, contract wins and sales leads.

CRM is often thought of as a business strategy that enables businesses to:

Understand the customer

Retain customers through better customer experience

Attract new customer

Win new clients and contracts

Increase profitably

Decrease customer management costs

Share of wallet refers to a marketing term referring to the amount of the customer's total

spending that a business captures in the products and services that it offers. Increasing the

share of a customer's wallet a company receives is often a cheaper way of boosting revenue

than increasing market share.

Increasing share of wallet can be done by adding new products or services that a firm will

offer to existing customers. This can also be done by cross-selling services within the same

company. As an example, a bank might recommend to an existing client a different service

that they offer, such as referring a wealth management client to an individual elsewhere in

the organization who might sell the client insurance or arrange for a mortgage. By cross-

selling within the bank they can increase their share of the customer's wallet.

In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value (LCV),

or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future

relationship with a customer. The prediction model can have varying levels of sophistication

and accuracy, ranging from a crude heuristic to the use of complex predictive analytics

techniques.

Customer lifetime value (CLV) can also be defined as the dollar value of a customer

relationship, based on the present value of the projected future cash flows from the

customer relationship. Customer lifetime value is an important concept in that it encourages

firms to shift their focus from quarterly profits to the long-term health of their customer

relationships. Customer lifetime value is an important number because it represents an

upper limit on spending to acquire new customers.[1]

12) What is a Value Proposition? Explain in detail with Examples?

Answer: A business or marketing statement that summarizes why a consumer should buy a

product or use a service. This statement should convince a potential consumer that one

particular product or service will add more value or better solve a problem than other

similar offerings. Companies use this statement to target customers who will benefit most

from using the company's products, and this helps maintain an economic moat. The ideal

value proposition is concise and appeals to the customer's strongest decision-making

drivers. Companies pay a high price when customers lose sight of the company's value

proposition. A value proposition (VP) is a statement that clearly identifies what benefits a

customer will receive by purchasing a particular product or service from a particular vendor.

A value proposition, which is an essential element of an elevator pitch, should be simple and

easy to remember. It should emphasize both the benefits the customer will receive and the

price the customer will be charged as compared to the competition. An important goal of a

value proposition is to convince the customer that he will be getting many more benefits

than he is being asked to pay for.

To create an effective value proposition, an organization should first determine exactly what

benefits a customer wants and how much the customer is willing to pay for them. The

phrase "value proposition" is credited to Michael Lanning and Edward Michaels, who first

used the term in a 1988 staff paper for the consulting firm McKinsey and Co. In the paper,

which was entitled "A business is a value delivery system," the authors define value

proposition as "a clear, simple statement of the benefits, both tangible and intangible, that

the company will provide, along with the approximate price it will charge each customer

segment for those benefits."

13) What is a Promotional Mix? What is IMC and what are its tools?

Answer: Promotion mix A specific combination of promotional methods used for one

product or a family of products. Elements of a promotion mix may include print or broadcast

advertising, direct marketing, personal selling, point of sale displays, and/or merchandising.

A promotion mix is the act of combining promotional methods such as advertising, new

media, direct mail marketing, selling, use of retail displays, and merchandising for the sale of

products and services.

Integrated Marketing Communications is a simple concept. It ensures that all forms of

communications and messages are carefully linked together.

At its most basic level, Integrated Marketing Communications, or IMC, as we'll call it, means

integrating all the promotional tools, so that they work together in harmony.

Promotion is one of the Ps in the marketing mix. Promotions has its own mix of

communications tools.

All of these communications tools work better if they work together in harmony rather than

in isolation. Their sum is greater than their parts - providing they speak consistently with

one voice all the time, every time.

This is enhanced when integration goes beyond just the basic communications tools. There

are other levels of integration such as Horizontal, Vertical, Internal, External and Data

integration. Here is how they help to strengthen Integrated Communications.

Horizontal Integration occurs across the marketing mix and across business functions - for

example, production, finance, distribution and communications should work together and

be conscious that their decisions and actions send messages to customers.

While different departments such as sales, direct mail and advertising can help each other

through Data Integration. This requires a marketing information system which collects and

shares relevant data across different departments.

Vertical Integration means marketing and communications objectives must support the

higher level corporate objectives and corporate missions. Check out the Hall Of Fame later

for more about missions.

Meanwhile Internal Integration requires internal marketing - keeping all staff informed and

motivated about any new developments from new advertisements, to new corporate

identities, new service standards, new strategic partners and so on.

External Integration, on the other hand, requires external partners such as advertising and

PR agencies to work closely together to deliver a single seamless solution - a cohesive

message - an integrated message.

Various tools of IMC are:

1. Advertising

Advertising is the most glamorous and elaborate of all marketing tools. Around the world

nearly $500 billion is spent annually on advertising, and that’s just for media time and

space! If you add in all, the costs of producing the advertisements and the salaries of people

working in the industry, the amount advertising is well over $1 trillion a year. Advertising

means different things to different people. It’s a business, an art, an institution and a

cultural phenomenon. To a CEO of a multinational corporation, advertising is an essential

marketing tool that helps create a brand awareness and loyalty and stimulates demand. To

a local restaurant owner, advertising is a way to communicate to the neighborhood. To an

art director in an ad agency advertising is the creative expression of a concept. To a media

planner, advertising is a way marketer uses the mass media to communicate to current and

potential customers.

One definition goes: Advertising is a paid, mass mediated attempt to persuade’ as direct and

simple they may seem it is loaded with distinctions. Advertising is paid communication by a

company or organizations that wants its information disseminated. In advertising language,

the company or organization that pays for advertising is called the sponsor or the client.

Advertising includes an attempt to persuade. To put it bluntly, advertisements are

communication designed to get someone to do something. Even an advertisement with the

stated objective of being purely informational has persuasion at its core. The

advertisements informs the consumer for some purpose, and that purpose is to get the

consumer to like the brand and because of that liking to eventually buy the brand. In the

absence of this persuasive intent, a communication might be news, but it would not be

advertising.

At this point we can say that for a communication to b classified as advertising three

essentials criteria must be met:

It must be paid for

It must be delivered to an audience via mass media.

It must attempt to persuade.

2. Public Relations (PR)

As a part of being a good corporate and community citizen, a firm will use public relations

(PR) as a way to create a good image and reputation. PR focuses on communication that can

foster goodwill between a firm and its many constituent groups. These constituent groups

include customers, stockholders, suppliers, employees, government, entities citizen’s

actions groups and the general public.

PR is used to highlight positive events in an organization, such as quarterly sales and profits

or noteworthy community service programmes carried out by the firm. Conversely it is used

strategically for damage control when adversity strikes an organization. PR uses techniques

like press releases, newsletters and community events to reach the target audiences. PR is

emerging as a more prominent tool in the promotional mix of many firms. As mass media

becomes cluttered with ads and as consumers retain a healthy sceptism of advertising,

public relations and communication are being viewed as an important addition to the mix.

Objectives of PR:

Within the broad guidelines of image building and establishing relationships with

constituents, it is possible to identify six primary objectives:

Promoting goodwill

Promoting a product or service

Preparing internal communications

Counteracting negative publicity

Lobbying

Giving advice and counsel

3. Personal Selling (PS)

Personal selling is the presentation of information about a firm’s product or services by one

person to another person or to a small group of people. Personal selling can be

distinguished from all forms of promotion in that it is the only one to one communication

that can deliver a completely customized message based on feedback from the receiver of

the message. In other words, if you are in the electronics shop considering the purchase of a

DVD player, the salesperson can tell you about the different brands and focus the message

content on the features of each brand based on questions you ask or information you

request. No other form of promotion- not even the Internet can customize messages in this

way.

Personal selling is the dominant variable in the promotional mix of any corporate marketers.

Complex products and services, high purchase prices, and negotiated contracts warrant the

customized communication of personal selling. In business to business markets there are

many instances where advertising sales promotion and other promotional mix variables

simply do not achieve the needed communication effect. But this is not always the case in

business to business sales.

Types of Personal Selling:

Order taking: This involves accepting orders for merchandise or scheduling services either in

written form or over the telephone. Order takers deal with existing customers who are

lucrative to the firm due to low cost f generating revenue this group. Order takers can also

deal with new customers which means that they need to be trained well enough to answer

any new question a new customer might have about product or services.

Creative Selling: This is the type of selling where customers rely heavily on the salesperson

for technical information, advice and service.

Team Selling: In this, a group of people from different functional areas within the

organization is assembled as a team to call on a particular customer. Sales teams are

prevalent in the areas of communication equipment, computer installations and

manufacturing equipment’s.

Seminar Selling: This is designed to reach a group of customers, rather than an individual

customer, with information about the firm’s products or services.

System Selling: This type of selling entails selling a set of inters related components that

fulfill all or a majority of a customer’s need in a product or service area.

4. Sales Promotion (SP)

Sales Promotion is of four types:

Consumer sales promotion: Here the efforts are directed towards the customer. For

example: price discounts, freebies

Trade Promotion: These are basically done for distributors in order to push sales through

margins and discounts.

Business to business promotion: Here promotions are between two companies; one

company may offer bulk discounts on the purchase of raw materials in large supplies etc.

Sales person’s promotions: Here the promotions are targeted to motivate the sale people

working for an organization. On achieving their targets, the sales person will win a free

holiday or he’ll receive a non-monetary benefits, etc.

Sales promotion is the use of the incentive techniques that create a perception of greater

brand value among consumers, the trade and business buyers. The intent is to create a

short term increase in sales by motivating trail use and encouraging larger or repeat

purchases. Free samples, coupons, premiums, sweepstakes and contests, rebates and price

discounts are some of the primary methods of sales promotion in the consumer market.

Sales promotion may not seem as stylish and sophistication as mass media advertising, but

expenditures on this tool are impressive. It is important to realize that full advertising

agencies specializing in advertising planning, creative planning and media placement

typically do not prepare sales promotion materials for clients. These activities are normally

assigned to sales promotion agencies that specialize in couponing, vent management,

premiums or other forms of sales promotion that require specific skills and creative

preparation. The rise in the use of sale promotion and the enormous amount of money

being spent on various programmes make it one of the most prominent forms of marketing

activity.

5. Direct Marketing (DM)

Direct marketing is an interactive system of marketing that uses one or more advertising

media to affect a measurable response and or transaction at any location. This definition

distinguishes direct marketing from other primary promotional tools in three ways:

Direct Marketing uses a combination of media: Any media can be used in a direct marketing,

and a combination of media is often used to increase effectiveness.

Direct Marketing is often used to elicit a direct response: An example of this would be

getting the message receiver to phone or mail in an order .Other forms of promotion like

traditional advertising, public relations or an event sponsorship are not designed to elicit

immediate action.

The buyer’s home by mail or literally any place where the consumer can communicate with

the marketer.

Today the primary methods of direct marketing are direct mail, telemarketing, telephone

sales solicitation and direct response advertising in magazines, newspapers, and on

television and radio.

Online ordering via the internet is another form of direct marketing and has come to known

as ‘e-commerce’ because of the totally electronic communication between and buyers and

sellers. E-commerce is business conducted between buyers and sellers using electronic

exchange media. E-commerce is quickly emerging as a significant form of direct marketing.

In addition, trade markets are emerging where buyers in specific industries are creating e-

market places to enhance the efficiency of the exchange process.

14) What is Media Planning and Media Buying? What is the difference between “Above-

the-line” (ATL) and “Below-the-line” (BTL) Advertising?

Answer: Media Planning

The first thing we do, using a combination of world class research techniques, deep

experience and analysis, is to determine with our clients who their most likely, or most

desired, customers are. We are then able to determine which media these potential

customers see, read, hear or engage with the most. This is the media planning of a

campaign; we 'plan' advertising campaigns that reach intended audiences, with the

minimum amount of wastage.

After this initial planning stage, we then work alongside creative agencies, who actually

make the advertisements. It is our responsibility to get the adverts on to the television

screens and radio, in to the press and cinemas, on to billboards and poster sites, and online.

This is what we call media buying.

Media Buying

During the buying stage, Mediacom negotiates the best possible prices with media owners

such as television and radio stations, magazine publishers and website owners for the space

or airtime. Because Mediacom is one of the largest media buying agencies in the world, we

are able to buy media at an incredibly competitive price. Even so, we are always looking for

innovative ways to reduce costs further and increase the effectiveness of advertising -

whether on screen, outdoors or online.

Our clients benefit from Mediacom being part of GroupM, the world's largest media

investment management group. This gives us unparalleled negotiation power when buying

media on behalf of our clients.

Media buying, a sub function of advertising management, is the procurement of media real

estate at an optimal placement and price. The main task of media buying lies within the

negotiation of price and placement to ensure the best possible value can be secured for an

advertisement. The type of people who negotiate the price of these advertisements are

labeled "Media Buyers" in the workplace. Increasingly, the job of a Media Buyer online is

being done in real-time with advanced algorithms.

Media planning is generally the task of a media agency and entails finding media platforms

for a client's brand or product to use. The job of media planning involves determining the

best combination of media to achieve the marketing campaign objectives.

In the process of planning the media planner needs to answer questions such as:

• How many of the audience can be reached through the various media?

• On which media (and ad vehicles) should the ads be placed?

• How frequent should the ads be placed?

• How much money should be spent in each medium?

Above the Line (ATL) advertising is where mass media is used to promote brands and reach

out to the target consumers. These include conventional media as we know it, television

and radio advertising, print as well as internet. This is communication that is targeted to a

wider spread of audience, and is not specific to individual consumers. ATL advertising tries

to reach out to the mass as consumer audience.

Below the line (BTL) advertising is more one to one, and involves the distribution of

pamphlets, handbills, stickers, promotions, brochures placed at point of sale, on the roads

through banners and placards. It could also involve product demos and samplings at busy

places like malls and market places or residential complexes. For certain markets, like rural

markets where the reach of mass media like print or television is limited, BTL marketing

with direct consumer outreach programmes do make the most sense.

15) What is advertising? What are the Principles of Advertising? What is the difference

between Advertising and PR and Publicity?

Answer: Paid, non-personal, public communication about causes, goods and services, ideas,

organizations, people, and places, through means such as direct mail, telephone, print,

radio, television, and internet. An integral part of marketing, advertisements are public

notices designed to inform and motivate. Their objective is to change the thinking pattern

(or buying behaviour) of the recipient, so that he or she is persuaded to take the action

desired by the advertiser. When aired on radio or television, an advertisement is called a

commercial.

. The activity of attracting public attention to a product or business, as by paid

announcements in the print, broadcast, or electronic media. The business of designing and

writing advertisements. Advertisements considered as a group: This paper takes no

advertising.

An advertising strategy includes four elements:

Target audience

Product/service concept

Communications media

Advertising message

Five elements of advertisements

Attention – the headline should act as a stimulus and cut through the clutter. It must be

appropriate, relating to the product or service, the tone of the ad, and the needs or

interests of the intended audience.

Interest – keeps the prospects involved as the information becomes more detailed.

Credibility – makes believable claims.

Desire – describes the benefits of the product or service.

Action – motivates people to do something, such as call or visit a website

-Principles of advertising :

1. Go to the essence of the product. State the product's essence in the simplest terms of its

basic advantage. And state this both tangibly and memorably.

2. Where possible, make your product an actor in the scene; not just a prop. This makes for

a tremendously effective method of getting your product remembered. Because the

provocative element in your advertising is also the element that sells your product. This is so

simply stated, so difficult to execute.

3. Art and copy must be fully integrated. They must be conceived as a unit, developed as a

unit.

4. Advertising must have vitality. This exuberance is sometimes called "personality". When

advertising has a personality, it is persuasively different; and it is the one because of the

other. You must fight to get "bounce" in your advertising.

5. It is little less than useless to employ a so-called gimmick in advertising —- unless the

gimmick itself tells the product story.

6. Tell the truth. First, it's a great gimmick. Second, you go to heaven. Third, it moves

merchandise because people will trust you.

7. Be relevant. A wonderfully creative execution will get the big "So what" if it isn't

meaningful to their life, family, business etc. And always opt for an ad that's relevant over

one that's exciting and irrelevant.

8. Be simple. Not simpleminded, but single minded. Who has the time or the desire to listen

to advertising?

9. Safe ideas can kill you. If it's been done before, your competition will be ready for it. Your

only chance of beating the competition is with advertising they've never seen before.

Which means you've never seen it before either! Be brave.

10. Stand out. If your advertising goes unnoticed, everything has been wasted.

Just like advertising, PR often helps increase the sales as well and may include elements of

marketing. However, it is mainly focused in creating positive publicity about a particular

company, organisation or individual and maintain a good reputation in the public. By doing

so, PR helps create a relationship between let’s say a commercial company and its

customers who are more likely to choose the products from a company they have a good

opinion over those from a firm they have never heard off before or heard something

negative about it. The public reacts very differently to an add than to a newspapers article

or a TV report.

For advertising The Company pays for ad space. You know exactly when that ad will air or be

published.

Public relation’s job is to get free publicity for the company. From news conferences to

press releases, you're focused on getting free media exposure for the company and its

products/services. Publicity however, is something you hope you'll get. Why? Because

publicity can be generally gained at no cost to you.