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MBA- Semester 2

Assignment Set 1 - Marks 60 (6X10=60)

MB0046- Marketing Management - 4 credits

Subject Code - MB0046

*** Please fill in all the details in complete and only in CAPITAL letters

Name

Registration Number

ANISH GOPINATH PILLAI

1205002729

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Note: Each Question carries 10 marks. Answer all the questions.

Question 1- What is meant by marketing management? Explain the importance of marketing management.

A. 1 As an entrepreneur, when we went to start a new business, we don't have a product. In fact we will have to decide what product we should manufacture and sell.We have first to decide what product we should select. This, we can do only if we can do only if we identify the needs which require satisfaction among human beings. Once, we have identified the needs of a group of human beings (or called market

segment), we can determine the product which can help to satisfy that needs. This is a part of the marketing concept or we can say the part of modern philosophy of marketing.Philip Kotler, an author in area of marketing defined marketing "a human activity directed at satisfying needs and wants through exchange processes."Human NeedsThe human need is a state in which a person feels deprived ofsomething. There are many human needs described in manyways.Briefly, these needs can be divided into two types.1. Physiological needs2. Psychological and Sociological needs.The physiological needs consist of the need for food, clothing, shelter and even sex. Similarly, there are social needs for belonging, affection and love from others. Of course, there are.higher order psychological needs of self-actualisation.Important to understand that there are different needs for human being on the earth. At any time some needs in a human being are dormant and unsatisfied, whereas others are active and are being satisfied. A marketing man may thus devise a product or service aimed at satisfying a certain dormant need and thus provide satisfaction to the user. This is why a man is often described as a bundle of dormant wants. The need exists buy these have to the converted into 'wants' by a marketing strategy.In a socially competitive society, people may have unlimited wants but the ability to buy may be restricted on account of their economic background. They will, therefore, select from among those products, which give satisfaction or are needed more. Thus, when they are backed by ability to buy, the wants are converted into demand for your product. Therefore, when people decide to satisfy their needs and wants, in terms of marketing activities, exchange takes place.

On the current activities of human being, we can develop a process-oriented definition of marketing as "the process of ascertaining consumer needs, converting them into products or services, and then moving the product t or service to the final consumer or user to satisfy certain needs and wants of specific consumer segment or segments with emphasis on profitability, ensuing the optimum use of the resources available to the organisation".In practice, often, separate departments with their own way of perform the business functions, such' as production, finance and marketing, are performed by separate departments with their own way of thinking, production is often considered the more important function as compare to marketing. This practice is, gradually losing ground and it is being recognized that unless you can sell a product, you should not manufacture it.

Production-orientation evolved because often products were designed and developed by inventors who hoped that they would sell. However, if these products fail to satisfy some needs they would never sell in the market place. Therefore, consumer oriented thinking becomes necessary for any business to survive and grow.Normally, a salesman would like to think of his activity as a 'selling' process. Wh"en he does this, he is more cohcerned with handling over this product and receiving money in exchange. However, if he adopts the modern philosophy of treating it as a 'buying' process, his job becomes easier. This would definitely help him to start feeling and thinking of a customer. For instance, as he puts himself in the shoes of the customer and asks the question-why should I buy this article? His job will become smoother, as he will then know about the benefits and the disadvantages of the product or the service he is offering. This is an illustration of customer-oriented focus.

Theimportant marketing functions are:Buying - people have the opportunity to buy products that they want.Selling - producers function within a free market to sell products to consumers.Financing - banks and other financial institutions provide money for the production and marketing of products.Storage - products must be stored and protect ed until they are needed. This function is especially important for perishable products such as fruits and vegetables.Transportation -products must be physically relocated to the locations where consumers can buy them. This is a very important function. Transportation includes rail road, ship, airplane, truck, and telecommunications for non-tangible products such as market information.Processing - processing involves turning a raw product, like wheat, into something the consumer can use - for example, bread.Risk-Taking - insurance companies provide coverage to protect producers and marketers from loss due to fire, theft, or natural disasters.Market Information - information from around the world about market conditions, weather, price movements, and political changes, can affect the marketing process. Market information is provided by all forms of telecommunication, such as television, the internet, and phone.Grading and Standardizing - Many products are graded in order to conform to previously determined standards of quality. For example, when you purchase india No. 1 Potatoes, you know you are buying the best potatoes on the market.

Question 2 – What is brand equity? Explain in brief.

Brand equity is a phrase used in the marketing industry to try to describe the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well known names. Another word for "brand equity" is "brand value".The components of Brand Equity are1) Awareness,2) Association,3) Attitude, 4) Attachment and5) Activity.

Question 3 – Briefly explain the major external and uncontrollable factors that influence an organization decision making, performance and strategies

Company’s Macro Environment :-The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces.

Question 4 - Discuss the potential benefits associated with MIS.

A M a r k e t i n g I n f o r m a t i o n S y s t e m c a n b e d e f i n e d a s ‘ a s y s t e m i n w h i c h m a r k e t i n g information is formally gathered, stored, analysed and distributed to managers in accord withtheir informational needs on a regular basis’.Set of proceduresand practices employedin analyzing and assessingmarketing information,gathered continuously from sources inside a firm. Timely marketing information provides basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion.Characteristics of MISPhilip Kotler defines MIS as “a system that consists of people, equipment and procedures togather,sort, analyze, evaluate and distribute needed, timely and accurate information to marketingdecisionmakers.Its characteristics are as follows:1. It is a planned system developed to facilitate smooth and continuous flow of information.2. It provides pertinent information, collected from sources both internal and external to thecompany, for use as the basis of marketing decision making.3. It provides right information at the right time to the right person.A well designed MIS serves as a company’s nerve centre, continuously monitoring the marketenvironment both inside and outside the organization. In the process, it collects lot of data andstoresin the form of a database which is maintained in an organized manner. Marketers classify andanalyze this data from the database as needed.

Question 5 - Write short notes on Segmentation.

The market segmentation theory is a contemporary concept that states there is no direct relationship between the interest rates that prevail within short-term and long-term markets. Instead, the theory is that these two markets are distinct, and the interest rates will respond to whatever is occurring in the market where the options are traded. According to the essentials of the market segmentation theory, securities traded in a short-term market may be undergoing significant flux while the rates applied to long-term investments may remain somewhat static. Sometimes referred to as the segmented markets theory, the market segmentation theory is often considered to agree with and support what is known as the preferred habitat theory. This theory states that investors have very specific expectations when it comes to investing in securities with different lengths of maturity. As long as investors focus their trading activity on opportunities that comply with their preferences, those expectations remain within reason, including the degree of risk that the investor assumes. Should the investor choose to buy and sell securities that carry a maturity outside their preferences or habitat, this will impact the amount of risk he or she assumes, and require an expectation of increased return to offset that risk. Proponents of the market segmentation theory note that evaluating the yield curves of short-term and long-term markets often reveals that the rates of interest that apply seem to demonstrate little to no relationship to one another. Here, the yield curve associated with the market is found to be based more on the available supply of options, and the demand for them, and less on interest rates. At the same time, investors looking for a quick return are more likely to focus their attention on opportunities with a short maturity, while those looking for investments to hold over a longer period of time will be attracted to the long-term market. Since the focus is on when the return will be realized, and not the interest that applies to investments with vastly different lengths of maturity, the theory appears to work well in a number of situations. While there are proponents of the market segmentation theory, not everyone agrees on the degree of veracity of the theory. Investors who routinely execute investment transactions involving short-term as well as long-term maturities do not necessarily believe that these two markets function independently of one another,

especially when it comes to interest rates. Instead, the understanding is that there is at least the potential of the short-term market to influence rates in the long-term market, and vice versa, especially with investors who are more focused on rates and less on duration.

Question 6 - Explain the various stages involved in new product development New Product DevelopmentNew products are essential for existing firms to keep the momentum and for new firms they provide thedifferentiation. New product doesn’t mean that it is absolutely new to the world. It may be amodification, or offered in a new market, or differentiated from existing products. Therefore it isnecessary to understand the concept of new products.Meaning of New Products:a. They are really innovative. For example, Google’s Orkut, a networking site which revolutionized socialnetworking. In this site people can meet like minded people; they can form their own groups, sharephotos, comments and many more.b. They are very different from the others: Haier launches path-breaking 4-Door Refrigerators first timein Indiac. They are imitative; these products are not new to the market but new to the company. For example,Cavin Kare launched Ruchi pickles. This product is new to Cavin Kare but not to the market.New product development process:Stage 1 - Idea generation:New product idea can be generated either from the internal sources orexternal sources. The internal sources include employees of the organization and data collected from themarket. The external source includes customers, competitors and supply chain members. For example,Ingersoll Rand welcomes new ideas from the General public.Stage 2-Idea screening:Organization may have various ideas but it should find out which of these ideascan be translated into concepts. In an interview to Times of India, Mr. Ratan Tata, chairman TATA groupdiscussed how his idea saw many changes from the basic version. He told that he wanted to develop carwith scooter engine, plastic doors etc… But when he unveiled the car, there were many changes in theproduct. This shows that initial idea will be changed on the basis of market requirements.Stage 3 - Concept development:the main feature or the specific desire that it caters to or the basicappeal of the product is created or designed in the concept development.Concepts used for Tata Nano car are – Concept I: Low-end ‘rural car,’ probably without doors or windows and with plastic curtains that rolleddown, a four-wheel version of the auto-rickshawConcept II: A car made by engineering plastics and new materials, and using new technology likeaerospace adhesives instead of weldingConcept III: Indigenous, in-house car which meets all the environment standardsStage 4 - Concept testing:

At this stage concept is tested with the group of target customers. If anychanges are required in the concept or the message it will be done during this stage. Also theeffectiveness is tested on a minor scale. If the concept meets the specific requirements, then it will beaccepted.Stage 5 Marketing strategy development:The marketing strategy development involves three parts. Thefirst part focuses on target market, sales, market share and profit goals. TATA’s initial business planconsisted sales of 2 lakhs cars per annum. The second part involves product price, distribution andmarketing budget strategies. TATA’s fixed Rs 1 lakhs as the car price, and finding self employed personswho work like agent to distribute the cars. The final part contains marketing mix strategy and profitgoals.Stage 6 - Business analysis:it is the analysis of sales, costs and profits estimated for a new product andto find out whether these align with the company mission and objectives.Stage 7 - Product development:during this stage, product is made to undergo further improvements,new features or improvised versions are added to the product. There is also scope for innovation andusing the latest technology into the product.TATA Nano car development (Source: business world nanolution)– Tried to outsource the product from all over the world.– Development of ‘mule’ or prototype with 20bhp.– Designing the small engine– Thermodynamic simulations and final engine– Development of MPFI with help of Bosch.– Cost reduction and negotiating with vendors.–is carried out to support it.