Amity School of Distance Learning

Marketing Management

Assignment – A

Q 1. Define marketing. Distinguish between Selling and Marketing. What are four components of marketing explain?

Ans. The term marketing has been defined as a social and managerial process by which individuals and groups acquire what they desire through exchanging and creating products and values with others.

It starts with factory, focuses on company’s existing products and calls for heavy selling and promotion to obtain profitable sales. Selling is inside- out perspective.

Marketing is outside- in perspective. Marketing of any commodity or product starts with well-defined target group having a desire for that commodity or product, co-ordinates all the marketing activities affecting customers, and makes profits by ensuring customer satisfaction. Companies produce what consumer want and thus satisfying consumers and making profits.

Marketing mix is one of the major concepts in modern marketing. Four components of marketing mix are as under:

1) PRODUCT: Product means any goods or services or a combination of both which the company offers to market/ target market. While defining product as a feature of marketing mix company defines

a) Product Varietyb) Qualityc) Designd) Featurese) Brand Namef) Packagingg) Sizesh) Servicesi) Warrantyj) Returns etc

2) PRICE:Price may be defined as a amount of money incurred which the

consumers have to pay to obtain the product following components must be taken into consideration while fixing the

price:

a) List Priceb) Discountsc) Allowancesd) Payment Period

3) PLACE:

Place includes company activities that make the product available to target consumers. Following elements to be borne in mind

a) Channelsb) Coveragec) Assortmentsd) Locations

4) PROMOTIONS:

Promotion means an activity through which there is a communication about the merits of products and the want is created in the minds of the customers to buy it. Following elements define promotion:

a) Advertisingb) Personal Sellingc) Sales promotiond) Publicity

An effective marketing program is the one which blends all the elements of marketing mix into a coordinated program desired to achieve company’s marketing objectives.

Q 2. How would you price a new product (say a Mixi)? What options you would employ to generate quick revenue?

Ans. Broad Categories of pricing are as under:

1) COST BASED PRICING:

Under cost based category following methods are commonly used:

a) Mark Up pricing:

Selling price of mixi can be calculated by adding margin to its cost price. Margin or mark up may vary depending on market and features of mixi.

b) Absorption Cost Pricing:

Under absorption cost pricing or full cost pricing price is calculated by assesing variable and fixed costs involved in manufacturing, selling and administering the product and then by adding required margins towards profits without any risks whatsoever.

c) Marginal Cost Pricing:

Marginal cost includes all direct variable cost of manufacturing mixi in addition to a portion of fixed variable

d) Break Even Concept:

Break even point is the point at which the total revenue and the total cost are equal.This exercise is aimed at relating total costs and revenues at different volume levels. At level where total cost equals total revenues breaking even of costs and revenues takes place.

Break Even Point : TOTAL COST = TOTAL REVENUE.

2) DEMAND BASED PRICING:

Following methods belong to Demand Based Costing:

a) What The Traffic Can Bear Costing:

The seller can charge the maximum price the consumer can pay for mixi. This is not sophisticated method and used primarily by retailers. In long run it is not safe method though in short run it can generate huge cash.

b) Skimming Pricing:

In this type of pricing scheme the seller can skim the market by high prices in first instance and then subsequently settle the prices to lower level.

c) Penetration Pricing:

Seller of mixi can achieve greater market penetration by relatively lower prices.

3) COMPETITION ORIENTED PRICING:

Three options are available for pricing as under:

a) Premium Pricingb) Discount Pricingc) Parity pricing/ going rate pricing

For all of them competitor prices serves as reference point. All these strategies can be decided depending on competitor profile and our mixi product profile.

Q 3. Define consumer behavior and describe its relation in Purchase Decision-Making.

Ans. Consumer behavior understanding is the major essence of marketing. It helps to understand a buyer’s needs and desires and create a customer out of him through understanding What motivates the buyer? What induces him to buy? Why does he prefer to buy a specific brand? Why does he buy from specific shop? Why does he shift from one shop to other or from one brand to other? His reaction to new product launched in market? What are stages he travels through to make a decision to buy? These are all consumer behaviors. By understanding his behavior factors that could lead to Buying Decision could be ascertained as:

1) Factors that are part of Individual:

a) Personal Factors: Various personal factors like the likes & dislikes, preferences, status level in the society also infuence the buying decision. General lifestyle, way of dressing, ornaments, age, education level, financial status all define an

individual’s purchasing decision.

b) Cultural Factors:

An individual’s buying decision to an extent is also affected by his or her culture in which he grows. Different cultural, religious, linguistic groups dictate their own unique and different pattern of social conduct.

c) Psychological Factors:

All Individuals differ from one another on factors like personal believes, faiths and attitudes. One may be timid and plain whereas other may be aggressive and outgoing. One may be least innovative whereas other may welcome anything new.

2) BUYERS SOCIAL ENVIRONMENT:

Man is a social animal who livies in a society and hence is influenced by it and in turn influencing its course of development. Since there are two broad groups of which an individual is a part of

a) influence of Intimate Group:

E.g. friends, family, closely knit organizations, close friends etc. In any intimate group there is likely to be a group leader. Though leader may not directly influence every member in his day to day purchases, his judgement on men and matters, facts and fashions is respected by group.

b) Influence of Broad social Class:

Structurally social class is larger group than intimate group. Constitution of social class is decided by income, occupation, place of residence etc. Members of social class more or less enjoy same status and prestige, common lifestyle and hence common buying behavior. Often they do shopping in same area and patronize selected shops, which befit their class image.

3) INFORMATION FROM VARIOUS SOURCES:

Buyer today is exposed to flood of information unleashed on him from various sources. These sources him inform him about new products and services, improved versions of existing products, new uses of existing products, and so on. These informations decide his Purchasing decision.

Q 4. Marketing is a process; explain with suitable examples and a flow chart the concept of marketing process.

Ans. Marketing is social and managerial process by which individuals and group obtain what they need and want through exchanging and creating products and value with others.

Most basic concept underlying marketing is human need. According to Maslow “Human need is state of felt deprivation”. These include basic physical need for food, clothing, warmth and safety, social needs for belonging and affection and individual need for knowledge and self-expression.

Human wants or needs are shaped up by culture and individual personality.

When backed by buying power it becomes as demand.

People satisfy their need and wants, which is backed by buying power and termed as demand, by product. Product can be physical object e.g. TV/ VCR etc or it can be intangible object e.g. services, hospitality etc.Consumers’ usually face a broad array of products that satisfy their need. They usually make buying choices based on their perception of products values.

Exchange is art of obtaining desired object from someone by offering something in return. It is core concept of marketing. At least two parties must participate and each must have something of value to other.Transaction is unit of marketing’s unit of measurement.

All this shows that marketing is process.

Q 5. Write short notes on

a) Marketing Concept:

Marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering desired satisfactions more effectively and efficiently than competitors do.

b) Consumers Buying Motives:

Buying motives can be defined as all the impulses, desires and considerations that induce a buyer to purchase a given product. These motives could be product motives/ patronage motives- rational or emotional motives etc.

c) Mark Up Price:

It is pricing method wherein selling price of product is decided by adding margin to its cost. Mark ups may vary depending on nature of product and market.

Amity School of Distance Learning

Marketing Management

Assignment - B

Q 1. It is often said that middlemen are unnecessary. They cause price inflation, do you agree to this statement. Explain with suitable examples.

Ans. In recent times organisations have taken to non conventional approaches in matter of routing the business through intermediaries or so called middlemen. Job of these middlemen is to

- Help establish the brand in the market.- Help achieve sales targets.- Provide adequate shelf space for fast movement of product.- Provide merchandising support- Make prompt payment.- Provide service to customers.- Maintain fair trade practices.- Assist in promoting product

In return to these services a margin money is being provided to these dealers by traders, organizations have. They are required to hire dealer a margin to level, which would fetch dealer a reasonable retained earning after meeting all normal expenses.

Organization overheads and other associated costs are much higher than dealer carrying out tasks as above. Hence in the process organisations reduce their cost by offloading activities as above to dealer, offer discounts to dealers to meet his expenses so that end of day both dealers and organisations gain and sales and payment situation of organisation both improve.

Hence, I do not agree that middlemen cause inflation.

Q 2. Define promotion. Explain with suitable examples 4 types of promotions adopted by consumer product industry?

Ans. Sales Promotion is any short-term offer or incentive directed towards buyers, retailers or wholesalers that is designed to achieve a specific immediate response.

Two basic classification of sales promotions are consumer promotions including coupons free samples, premiums and specific exhibits and trade promotions in which cash merchandise, equipment or other resources are rewarded to retail or wholesale firms or to their personnel.

The commonly used tools and techniques of sales promotion are as under:

1) Trade Fairs and Exhibitions:

These are one of the oldest practices of sales promotion. Trade fairs and exhibitions provide companies with opportunity of introducing and displaying their products. This brings the company’s products and consumers in direct contact with each other. Seeing is believing in underlying concept here. In case of high cost industrial products trade fairs have become a handy sales promotion tool.

2) Coupons, Premiums, Free Offers, Price offs, Discounts etc;

- Coupons are distributed through newspapers or magazines advertisements.

- They perform two specific functions:

a) They enthuse customers to exploit bargain.b) They serve as inducement to trade for stocking items.

They are useful for introducing new product or strengthening sale of existing product.

- Premium and specific offers are given by companies as “ If you buy an Aristocrat within next week, you get a Philips 2 Band Transistor worth Rs 266 free” etc.

- Discounts promotions are made as “ Up to Rs 175/- off on new Hawkins in exchange for any old pressure cooker”.

- Installments are used as an attractive promotional offer as “ Pay 20% now and balance in easy 24 installments”

3) Contests:

Contests of various kinds constitute another promotional tool. There are dealer contests meant exclusively for dealers of company and consumer contests open for all. While dealer contests normally remain closed affair between company And its dealers, consumers contests are given wide publicity to attract participation of widely scattered consumer base. Big budgets are normally alloted for consumer contests as they need attractive prizes and wide publicity.

As for Example “ Nescafe shake contest offered Rs 5 Lacs as total prize money with Rs 1 Lacs for first prize. Total number of prizes ran to nearly 21,000. The advertising outlay for contest was around Rs 20 Lacs. Contest had specific objective to make consumers aware of Nescafe as a cool drink in additional to its image of hot beverage.”

4) Sales Promotion on Internet:

Internet is becoming major sales promotion tool. Marketers run promotions on specific sites that attract audience who are interested in promotions and contests. Sites like Contest2win.com and Hungame.com are examples where several leading brands like Levis, Sony, Cadbury, Bacardi and Pepsi etc run online contests offering exciting prizes.

Q 3. The right marketing mix can be adopted only after segmentation. Elucidate with examples on the basis of segmentation as applied in Television Marketing.

Ans. The market for any product is made of several segments. A market is sum total of consumers of a given product and consumers are seldom-homogenous lot, they vary in their characteristics and buying behavior. It is thus natural that many differing segments occur within market.

Basis of segmentation is as under:

1) Geographical Segmentation:

Segmentation of consumers is based on geographical factors like climatic conditions, region, state, district and urban/ rural areas. Television has segmented as South Indian community there are channels as Vijay, Sun TV, Jaya etc, for Punjabi Community there is Alpha Punjabi and like on like of regional channels are there based on regional segments.

2) Demographic Segmentation:

Segmentation based on age, sex, marital status, family, size, race, religion, community, language, occupation, income/ purchasing capacity, etc. Such as MTV/ V channel is segmented for youth group, Astha channel is for older age group etc.

3) Psychographic Segmentation:

Segmentation is based on elements like personality traits, attitude, life style, value system etc. Advertisement for Accent car is primarily focussing Life Style and hence is for Psychographic segmentation.

4) Buyer Behavior Segmentation:

Markets can be segmented based on basis of buyer behavior. Different consumers expect different benefit from same product and accordingly they will be different in their motives in owning it and their behavior in buying it. News Channel NDTV has varius market segments based on behaviour eg Poilitcal News, Interntational News, Business News etc.

Q 4. What do you understand by Branding? Is quality important than Branding?

Ans. Brand is name, term, symbol to identify goods and services of one seller from offer of other competitors. It is valuable, renewable and lasting asset of organisation. The battle in market does not take place between companies but between brands. Years of uninterrupted nurturing in product, support activities of product, with support of good marketing programme, is required to build a brand. Such a programme includes meaningful product differentiation and an apt positioning for brand, accompanied by right distribution and promotion support. Hence right and sustained quality is part of brand. Without right and sustained quality over a period of time it is difficult of build a brand.

Q 5. How will you go about describing a marketing plan for consumer product, explain with help of marketing plan process?

Ans. Marketing Plan is mechanism by which the objectives, activities and budgets for various marketing plans are integrated. These plan serve three basic purpose:

- Marketing plans serve as communication device.

- In an organisation with multiple products, markets or other divisions, annual plans serve as important inputs to resource allocation process.

- Once approved, it serves as a mechanism for control.

MARKETING PLANNING PROCESS No. of Weeks Before Final plan Approved

Activity Result

12 Business Analysis:- Review sales by territory.- Review brand and

competitive marketing programs of prior years.

Identify impact of prior years programmre on sales.

8 Competitive Forecast.- Assess Industry.- Predict competitive

marketing plan.

Estimate competitors spending and sales.

6 Preliminiary Forecast- Determine Budget levels needed to compete.

Estimate preliminary volume, share and expenditure.

4 Advertising and Promotion Reviews- Assess success, failure of

past, promotion efforts- With ad. Agency discuss

pchanges in advertising programme.

- Develop broad sales promotion objectives, plans.

- Develop media and ad testing plans.

1 Budget proposal Finalise expenditures, volumes, share, programme plan

0 Budget Meeting Obtain approval

CASE STUDY

GOOD KNIGHT

Q 1. Critically evaluate the communication strategy of Good Knight with reference to facts given in the case.

Ans. MARKETING OBJECTIVES:

1) Graduate dissatisfied coil/ cream users.2) Make EMD premium product segment.3) Make share as 5% in first year.

STRENGTH OF PRODUCT VS COMPETITION:

1) Ease of use2) New concept in market.

WEAKNESSES OF PRODUCT VS COMPETITION;

1) No major dissatisfaction in already existing products.2) Pricing of already available products is 50 to 30% lower than Good Knight.3) Distribution of already existing products is wide spread.

OPPORTUNITIES AVAILABLE:

1) Fears with regard to side effect of smoke associated with coils and continuous usage of cream on skin were in people mind.

2) Big market size.

THREATS:

1) Few brands were available but suffered from poor brand awareness due to lack of advertisement support.

2) Low Budget for Good Knight for advertising and promotion.

COMMUNICATION OBJECTIVES:

1) Encourage trial by highlighting EMD as more modern repellent form.2) Product concept selling3) Ease of Use.

TARGET GROUP:

Mothers and fathers of households with young children were prime target group.

BRAND NAME:

Good Knight means Good Protector. Brand name verbalises consumer benefit in entirity.

MEDIA STRATEGY:

1) Total budget was marked as Rs 2 Lacs for initial four months. Launch was limited initially to Mumbai to Kerala. Mumbai as Kerela were decided as initial places because of preset channels already familiar to client.

2) It was decided to restrict only to daily newspapers to help in selling to primary target group. As budget was limited intensive approach was found more approriate.

3) First launch ad appeared in Times of India Bombay, Sunday Mid Day, Malayalam Manorama, Mathrubhumi followed thereafter.

4) As sales picked up and money started flowing in Good Knoght went for TV ads over Mumbai local channels. On spending of Rs 2.5 lacs sales worth Rs 20 Lacs were generated.

5) Since then Good Knight had heavy leanings on television.

Q 2. At the time of case preparation Good Knight was probably the only product in EMD category. As new International Competition, with known brand names enter the market, what changes if any would you suggest in the marketing communication strategy of Good Knight.

Ans. Good Knight must continuously invest in R&D. It must come with new products based on market forces so as to maintain number one position.

1) It must choose new generation communication tools as web marketing.

It must maintain its undisputable number one position as quality supplier.

Marketing Management (ADL-02)

ASSIGNMENT –C

(Objective Type and Short Answers)

1. Marketing Refers Toa. Developing a product and making people buy themb. Persuading consumers to buy the productsc. Producing products and displaying themd. Understanding the needs of consumers and delivering

them.

2. A survival pricing objectives aims to

a. Covers fixed costs some variable costb. Selling minimum profit c. Obtain minimum profitd. Covers variable costs and some fixed cost

3. The first stage in product development isa. Business analysisb. Commercializationc. Screeningd. Idea Generation

4. Warehousing and physical distribution functions are :a. Unrelated activities and separately managed b. Best handled by manufacturers onlyc. Synergistically related activities which must be closely

coordinatedd. Relatively unimportant activities in the present day market

5. Marketing Concept is best illustrated by which of the following marketing systems goalsa. Maximizing customer satisfaction b. Maximize Choicec. Maximize Consumptiond. Maximize life quality

6. In consumer decision making specifier is one whoa. Is one who is user of productb. Is one who sells the product?c. Is one who has been asked to advice on the product d. Is one who signs the Cheque for the purchase of the product?

7. Under globalization of Trade strategies, the marketer will have to adopta. Product differentiationb. Locationc. Standardizationd. Reduction of cost

8. Product Life cycle means thata. Products live around the 4 stages of cycleb. Products keeps moving from one to next stage in turns c. Products

9. In DELPHI method of Marketing Research, the opinion of

a. The opinion consumers in DELHI are soughtb. The Opinion of experts is soughtc. The Opinion of DEALERS is sought d. The opinion of Dealers and Employees are sought

10. Premium Pricing refers toa. Setting a price above the cost priceb. Setting a price above competitive Pricec. Setting a price where only the rich can buy d. Setting a range of prices at different markets

Say Yes or No

11. TQM refers to Total Quantity Management – YES

12. Marketing means pushing the products in the markets - NO

13. Penetration pricing means selling at high price initially - NO

14. Wholesalers sell products to all types of consumers - NO

15. Direct Marketing means selling to ultimate consumer - YES

16. Objective of Distribution of products is to restrict availability of products - NO

17. Price is no consideration if the seller delivers high quality products - NO

18. CRM helps to retain customers - YES

19. Marketing Mix Means People, Policy, Partnership and Politics - NO

20. Missionary Sales People do not ask for salary - YES

Write Short answers in just five sentences

21. List our 5 stages in consumer decision making process

a) Need Recognition: Consumer recognizes problem and develops perception of problem. Then he seeks information for solving his problem.

b) Evaluation: Consumer turns to his environment / world of information around him. He evaluates all options.

c) Attitude: It is sum total of individuals faith and feelings towards product. As result of his awareness and comprehension consumer develops an attitude towards product, which could be favorable or unfavorable. Buyer must be convinced that purchase of product is legitimate course of action.

d) Behavior Field: Conviction leads the consumer to try the product on small scale. Successful trial leads to buy the product.

e) Post Purchase Behavior: Usually it creates some restlessness in mind of consumer. He is not sure about product and feels other brands would have been better. He will seek reassuring advertisements or deliberately avoid positive stories about competing brands.

22. Write a simple definition for marketing and Selling

a) Selling: Selling means’ Consumers will not buy enough of product unless it undertakes large-scale selling and promotion efforts”. It takes an inside out perspective. It starts with factory, focuses on company’s existing products and calls for heavy advertisement and promotion to obtain profitable sales.

b) Marketing: Marketing means ‘Achieving organizational goals depends on determining needs and wants of target markets and delivering desired satisfaction more effectively and efficiently than competitors do” It is outside in perspective which means it starts with well defined market, focuses on consumer needs and coordinates all the marketing activities affecting customers and makes profit by creating customer satisfaction.

23. List out 5 benefits of advertising a product

a) Informing about existence of product.b) Attitude change and attitude measurement.c) Creating awareness about new product/ brand and new ideas.d) Product positioning and brand building.e) Behavioral constructs: Generating trial purchases and store visits.

24. Give 5 examples (each) of consumer, consumer durables and industrial products

Consumer : Particular persons – Ram / Shyam / Raju / Vikas / MadanConsumer Durable: TV, washing Machines, camera, Watches, DVD

Player.Industrial Product: Cutting Tools, Cutting Oils, Coolant, Emery Paper, Grease etc

25. List out 5 functions performed by whole sellers in consumer product industry

a) Maintaining availability through local delivery.b) Providing customers financing.c) Maintenance and repair operations.d) Local Selling.e) Advertisement of products benefits.

26. List our 5 functions packaging for cosmetic products

a) To avoid damage during transit.b) Convenience to handle.c) Aesthetics of packing reflect image of the product.d) To store the material.e) To advertise and identify manufacturing company/ brand/ product etc.

27. Give 5 examples of Family brands in consumer products

a) Surf Excelb) Lux Soapc) Taj Mahal Basmati Riced) Titan Watchese) Close-up toothpaste

28. List out the 5 stages in new product development

a) Idea Generationb) Screeningc) Product Developmentd) Product market Testing and business analysise) Commercialization

29. Give 5 reasons why new product fail

a) Faulty product idea.b) Distribution related problems.c) High price than values being offered.d) Poor awareness/ information programs.e) Product quality not up to the mark.

30. What are the four stages in Product Life Cycle?

a) Introductionb) Growthc) Maturityd) Decline

Differentiate Between the following (Just in 5 Sentences)

31. Product diversification and Product differentiation

Product Diversification:Product diversification means expanding range of products being offered. Eg LG came to India with CTV and subsequently diversified to other product range such as microwave oven, refrigerators, computer monitors etc.

Product Differentiation:Product differentiation means differentiating your products with respect to other products available in market. This differentiation could be in terms of features, services, distribution etc. Fedex was first courier agency which provided consumer facility of tracking their parcel status on net.

32. Marketing and Selling

Marketing: Marketing means ‘Achieving organisational goals depends on determining needs and wants of target markets and delivering desired satisfaction more effectively and efficiently than competitors do” It is outside in perspective which means it starts with well defined market, focuses on consumer needs and coordinates all the marketing activities affecting customers and makes profit by creating customer satisfaction

Selling: Selling means’ Consumers will not buy enough of product unless it undertakes large-scale selling and promotion efforts”. It takes an inside out perspective. It starts with factory, focuses on company’s existing products and calls for heavy advertisement and promotion to obtain profitable sales.

33. Penetration Price and Skimming Price

Penetration Price:Pricing program designed to use low price as major basis for stimulating demand. Reliance mobile service is excellent example of penetration pricing.

Skimming Pricing:Skimming pricing means keeping price high at stage of introduction/ launch and gradually reducing prices as time passes. Airtime in mobile phone was kept as Rs 10/- per minutes when mobile services were launched in India, which is now free.

34. Individual Consumer and Industrial Consumer

Individual Consumer:

Customer as a individual buying the product are known as individual consumers.

Industrial consumer:Consumers buying the products, as big corporate giants/ industrial houses etc are known as industrial consumer.

35. Vertical Marketing and Horizontal Marketing

Vertical Marketing:Vertical marketing system is generally used to describe types of channels in which distributor actions are very highly coordinated with manufacturers marketing strategy because strong continuing, formal relationship has been established.

Horizontal Marketing:Products are directly sold from customers.

36. Packaging and Packing

Packing:Packing is meant for giving protection to product.

Packaging:

Packaging means apart from giving protection to product as well as aesthetics of package and convenience to handle.

37. Individual Bran and Family Brand

Family Brand:Different products of company are marketed under one brand name. Amul I family brand as it is common brand name for company’s milk powder, butter ghee etc.

Individual Brand:Under Individual brand, company gives separate brand name for most of its products. HLL as several brands as Dove, Lux, Pears, Lifebouy etc.

38. Personal Selling and Missionary Selling

Personal Selling:Products are distributed directly to final buyer. Sales message delivered to individual buyers by face to face contact. Emway is primarily in direct selling.

Missionary Selling:

Products are distributed through wholesalers or retailers who buy the product for resale to final buyers. Most of tyre companies, automobile ancillary companies work under this system.

39. Wholesaler and Distributor

Wholesaler : A person who buys the material in bulk. Does not follow any policies laid down by the company (in terms of profit etc.). He is not an authorized person from the company.

Distributor : A distributor is an authorized selling channel from the company. He has to follow the rules & regulations stipulated by the company.

40. Full Cost Pricing and Marginal Cost Pricing.

Full Cost Pricing:Selling price is decided by adding a margin/ profit to cost of product (fixed + variable cost).

Marginal Cost Pricing:It includes all direct variable costs and a portion of fixed costs.