Subject Name : Principles of Marketing

Study COUNTR : !ndia

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Roll Number *S"N+ : ",&)$'-)&-P./))$'-'001
Student Name : 2eena Taneja .and3i
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#ssignment ACB

ASSIGNMENT A
1 The length of the product life cycle is governed by the rate of technological
change, the rate of maret acceptance and the case of competitive entry !iscuss"
Ans"# # product is largely affected by t3e present state of tec3nology as <ell as t3e
c3ange in tec3nology5 7or eCample C/Bs o8ertook 7loppy t3en came /D/Bs t3en
came Pen dri8es and micro storage cards5 T3e fact t3at t3e in8ention of one product
leads to t3e fall of t3e ot3er s3o<s t3e impact of tec3nological c3ange on t3e product
life cycle of t3e ot3er product5
"8ery product is considered to 3a8e a life cycle kno<n as Eproduct life cycleF5 /ue to
c3ange in tec3nology a product may die but t3e segment does not G 7or eCample Mp'
players o8ertook Halkmen players but t3e segment of personal music de8ices still
eCits5 T3ings may get out of fas3ion but t3e core product remains5
2o<e8erG t3e most important aspect of product life-cycles is t3atG e8en under normal
conditionsG to all practical intents and purposes t3ey often do not eCist *3enceG t3ere
needs to be more emp3asis on model>reality mappings+5 !n most markets t3e majority
of t3e major brands 3a8e 3eld t3eir position for at least t<o decades5 T3e dominant
product life- cycleG t3at of t3e brand leaders <3ic3 almost monopoliIe many marketsG
is t3erefore one of continuity5
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T3e stages t3roug3 <3ic3 indi8idual products de8elop o8er time is called commonly
kno<n as t3eJ Product ,ife CycleJ5
T3e classic product life cycle 3as four stages :
Introduction Stage# #t t3e !ntroduction *or de8elopment+ Stage market siIe and
gro<t3 is slig3t5 it is possible t3at substantial researc3 and de8elopment costs 3a8e
been incurred in getting t3e product to t3is stage5 !n additionG marketing costs may be
3ig3 in order to test t3e marketG undergo launc3 promotion and set up distribution
c3annels5 !t is 3ig3ly unlikely t3at companies <ill make profits on products at t3e
!ntroduction Stage5 Products at t3is stage 3a8e to be carefully monitored to ensure t3at
t3ey start to gro<5 Ot3er<iseG t3e best option may be to <it3dra< or end t3e product5
Gro$th Stage# T3e .ro<t3 Stage is c3aracteriIed by rapid gro<t3 in sales and
profits5 Profits arise due to an increase in output *economies of scale+and possibly
better prices5 #t t3is stageG it is c3eaper for businesses to in8est in increasing t3eir
market s3are as <ell as enjoying t3e o8erall gro<t3 of t3e market5 #ccordinglyG
significant promotional resources are traditionally in8ested in products t3at are firmly
in t3e .ro<t3 Stage5
Maturity Stage# T3e Maturity Stage isG per3apsG t3e most common stage for all
markets5 it is in t3is stage t3at competition is most intense as companies fig3t to
maintain t3eir market s3are5 2ereG bot3 marketing and finance become key acti8ities5
Marketing spend 3as to be monitored carefullyG since any significant mo8es are likely
to be copied by competitors5 T3e Maturity Stage is t3e time <3en most profit is
earned by t3e market as a <3ole5 #ny eCpenditure on researc3 and de8elopment is
likely to be restricted to product modification and impro8ement and per3aps to
impro8e production efficiency and 4uality5
!ecline Stage# !n t3e /ecline StageG t3e market is s3rinkingG reducing t3e o8erall
amount of profit t3at can be s3ared amongst t3e remaining competitors5 #t t3is stageG
great care 3as to be taken to manage t3e product carefully5 !t may be possible to take
out some production costG to transfer production to a c3eaper facilityG sell t3e product
into ot3erG c3eaper markets5 Care s3ould be taken to control t3e amount of stocks of
t3e product5 UltimatelyG depending on <3et3er t3e product remains profitableG a
company may decide to end t3e product5
%ollo$ing characteristics can be seen in the product life&cycle concept
1" "ac3 product or good 3as a life-cycle like 3uman beingsG plants and animals5
'" T3e life-cycle of eac3 product begins from its presentation in t3e market and passes
t3roug3 market de8elopmentG maturityG becomes leader and ultimately declines5
(" T3e speed of mo8ement t3roug3 8arious stages of life-cycle can not be t3e same for
all goods5
)" Many profits in t3e business enterprise gro< 4uickly in t3e introduction stage and
decline>decrease in t3e maturity stage due to competiti8e conditions5 2o<e8er t3ere is
o8erall increase in sale during t3e maturity stage5
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*" Hit3 t3e c3ange in profits in t3e maturity stage c3ange in t3e life-cycle of product
like- "ngineering and Researc3G ProductionG Marketing and 7inancial Control
#cti8ities etc5 essential5
'" The mareting concept is a customer orientation baced by integrated
mareting aimed at generating customer satisfaction as the ey to satisfying
organi+ational goals" ,omment"
Ans# #ccording to P3ilip 6otlerG T3e marketing concept is a consumer orientation
backed by integrated marketing aimed at generating customer satisfaction as t3e key
to satisfying organiIational goals K
T3e #merican Marketing #ssociation defines Marketing as t3e process of planning
and eCecuting t3e conceptionG pricingG promotionG and distribution of ideasG goodsG
and ser8ices to create eCc3anges t3at satisfy t3e percei8ed needsG <antsG and
objecti8es of t3e customer and t3e organiIation5
!n simple <ords,- Mareting is the process of finding, satisfying, and retaining
customers $hile the business meets its goals-
!t is a fundamental idea of marketing t3at organiIations sur8i8e and prosper t3roug3
meeting t3e needs and <ants of customers5 T3is important perspecti8e is commonly
kno<n as t3e marketing concept5
T3e marketing concept is about matc3ing a companyLs capabilities <it3 customer
<ants5 T3is matc3ing process takes place in <3at is called t3e marketing en8ironment5
:usinesses do not undertake marketing acti8ities alone5 T3ey face t3reats from
competitorsG and c3anges in t3e politicalG economicG social and tec3nological
en8ironment5 #ll t3ese factors 3a8e to be taken into account as a business tries to
matc3 its capabilities <it3 t3e needs and <ants of its target customers5
#n organiIation t3at adopts t3e marketing concept accepts t3e needs of potential
customers as t3e basis for its operations5 Success is dependent on satisfying customer
needs5
.hat are customer needs and $ants/
# need is a basic re4uirement t3at an indi8idual <is3es to satisfy5
People 3a8e basic needs for foodG s3elterG affectionG esteem and self-de8elopment5
Many of t3ese needs are created from 3uman biology and t3e nature of social
relations3ips5 Customer needs areG t3ereforeG 8ery broad5
H3ilst customer needs are broadG customer <ants are usually 4uite narro<5# <ant is a
desire for a specific product or ser8ice to satisfy t3e underlying need5
,onsider this e0ample#
Consumers need to eat <3en t3ey are 3ungry5H3at t3ey <ant to eat and in <3at kind
of en8ironment <ill 8ary enormously5 7or someG eating at Mc/onalds satisfies t3e
need to meet 3unger5 7or ot3ers a micro<a8e ready- meal meets t3e need5 Some
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consumers are ne8er satisfied unless t3eir food comes ser8ed <it3 a bottle of fine
C3ardonnay5
Consumer <ants are s3aped by social and cultural forcesG t3e media and marketing
acti8ities of businesses5
T3is leads onto anot3er important concept - t3at of customer demands:
Consumer demand is a <ant for a specific product supported by an ability and
<illingness to pay for it5
%or e0ampleG many consumers around t3e globe <ant a Mercedes5 :ut relati8ely fe<
are able and <illing to buy one5
:usinesses t3erefore 3a8e not only to make products t3at consumers <antG but t3ey
also 3a8e to make t3em affordable to a sufficient number to create profitable demand5
:usinesses do not create customer needs or t3e social status in <3ic3 customer needs
are influenced5 !t is not Mc/onalds t3at makes people 3ungry5 2o<e8erG businesses
do try to influence demand by designing products and ser8ices t3at are
M #ttracti8eM Hork <ellM #re affordable M #re a8ailable
:usinesses also try to communicate t3e rele8ant features of t3eir products t3roug3
ad8ertising and ot3er marketing promotion5
H3ic3 leads us finally to an important summary pointN
# marketing orientated business is one t3at <3ic3 3as adopted t3e marketing concept5
(" .hat are ma1or reasons for maret segmentation and $hat are its
advantages/
Ans# Market segmentation is a concept in economics and marketing5 # market
segment is a sub-set of a market made up of people or organiIations <it3 one or more
c3aracteristics t3at cause t3em to demand similar product and>or ser8ices based on
4ualities of t3ose products suc3 as price or function5 # true market segment meets all
of t3e follo<ing criteria: it is distinct from ot3er segments *different segments 3a8e
different needs+G it is 3omogeneous <it3in t3e segment *eC3ibits common needs+O it
responds similarly to a market stimulusG and it can be reac3ed by a market
inter8ention5 Market Segmentation can be done on t3e basis of t3e location
*.eograp3ic Segmentation+O on t3e basis of ageG incomeG gender and ot3er measurable
factors */emograp3ic Segmentation+O on t3e basis of lifestyleG likesG dislikesG taste and
preferences *Psyc3ological Segmentation+O and according to t3e 3istoryG loyalty and
responsi8eness *:e3a8ioral Segmentation+5
# business must analyIe t3e different needs of t3e market segmentsO t3eir internal
strengt3s and <eaknessesO eCternal opportunities and t3reatsO and 8arious ot3ers
factors like t3e missionG 8isionG 8aluesG beliefsG attitudesG norms and standards of t3e
organiIationO as <ell as t3e competitors strategyG social and cultural factorsG economic
en8ironmentG global perspecti8eG demograp3ic en8ironmentG tec3nological and
political > legal aspects before deciding t3eir o<n nic3e5
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2hilip 3otler mentioned five criteria for an effective segmentation $hich states
t3at Segmentation s3ould be: -
1" Measurable# - it s3ould be possible to determine t3e 8alues of t3e 8ariable used for
t3e segmentation5
'" 4elevant# - it s3ould justify t3e eCpected profits and t3e gro<t3 potential5
(" Accessible# - t3e target customers must be reac3able and ser8able for t3e
organiIation5
)" !istinguishable# - t3e target audiences must be di8erse and able to s3o< different
reactions to different marketing miC5
*" %easible# & t3e firm must 3a8e an ability to dra< an effecti8e marketing program
for its customers5
The follo$ing are the advantages of Maret Segmentation for a firm#
a+ 2elps in better understanding of t3e customersB needs and <ants5
b+ :etter targeting and position of t3e product5
c+ "ncourages t<o-<ay communication among t3e potential buyer and t3e
organiIation5
d+ Maintaining effecti8e relations3ip <it3 t3e customers5
e+ Retaining t3e eCisting customers and attracting ne< ones5
f+ !mpro8ing ser8ice deli8ery standards5
g+ Reducing cost > eCpenses on 8arious marketing acti8ities and increases market
s3areO resulting in 3ig3er profits5
)" 5riefly e0plain the steps involved in ne$ product development"
Ans#
/e8eloping and introducing a ne< product can be 4uite scaryG riskyG demandingG
e8en a roller-coaster ride5 OftenG <3at began as a great ne< product idea becomes
unrecogniIable <3en t3at once-great idea gets to store s3el8es5
Step 1 6 Insight %inding and Identification# 3e key to finding a big ne< insig3t
understands consumer needsG <antsG and 3o< t3ey 8ie< and use t3e category5 Trying
to Jsell t3e consumeJ on your 8ie<s is seldom successfulO but listening to t3eir
language and <atc3ing t3eir actions <ill point you straig3t to terrific ne< insig3ts5
7or eCampleG Procter P.ambleLs efforts in $%Q0 to create a bold ne< ad8ertising
campaign for 7olgers to catapult it into market leaders3ip began by <atc3ing
consumers make coffee and by listening to t3eir descriptions of t3eir process of
<aking up in t3e morning5 7rom t3ese efforts came t3e insig3t t3at people actually
<ake up to t3e smell of coffee before t3ey get to t3e taste #ndG t3us <as born JT3e
best part of <aking up555J T3e insig3t <orked so <ellG itLs still guiding t3e marketing
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campaign today - t<enty years later5 #sk yourselfG <3at about your product or
organiIation triggers an emotional response stronger t3an t3e commodity itself5 :utG
successful marketing and brand eCecuti8es kno< t3at t3ey donLt 3a8e to go it alone5
Once you 3a8e possible insig3ts identifiedG t3ese insig3ts s3ould be objecti8ely and
4uantifiably tested to determine if t3ey are truly boldG ne< insig3ts5 T3is s3ould be
done before <riting concepts as t3ere is a totally different set of 4uestions necessary
to identify t3e potential of an insig3t5 # lesson: Only <3en t3e insig3ts are determined
to truly 3a8e ground breaking potential s3ould you proceed to t3e concept
de8elopment p3ase5
Step ' 6 ,oncept !evelopment7Screening# truly good insig3t 3as t3e ability to be
eCecuted in many different <ays5 !f you can de8elop only one possible concept from
an insig3tG it is simply not an insig3t5 !nsig3ts allo< for multiple eCecutionsG so once
you 3a8e identified t3ese directionsG you can de8elop t3e concept eCecutions and
screen t3em to find t3e most compelling *and uni4ue+ deli8ery of your insig3t5
Step ( 6 2roduct !evelopment78uantification# 2a8ing identified t3e rig3t conceptG
de8eloping t3e product to deli8er on t3e promises of t3e conceptG i5e5: deli8ering t3e
insig3t t3roug3 t3e product performance is key5 T3e product must li8e up to t3e
promises made in t3e concept or t3e business proposition <ill fail5 #t t3is stage
concept fulfillmentG cannibaliIation estimatesG and 8olumetric can tell you if you 3a8e
been successful5
#gainG 7olgers pro8ides an eCcellent eCample of a product <orking to fulfill t3e
original insig3t5 PP. de8eloped a special Jaroma-roastJ process t3at guaranteed t3ey
<ere getting as muc3 great coffee aroma from eac3 bean as 3umanly possible5 #ndG
t3eyL8e continued to use t3e original insig3tG <3en recently t3e company came out
<it3 a special Jaroma-sealJ can t3at keeps t3e beans fres3 and aromatic R remaining
consistent <it3 t3e brand promise t3roug3out inno8ation5
Step ) 6 Advertising !evelopment7Screening# T3is stage is too late for t3e
ad8ertising or public relations agency to get in8ol8ed and start re-interpreting t3e
products benefits5 .ood marketing communications s3ould JsellJ t3e insig3t5 !f t3e
productLs uni4ue selling proposition is not con8eyed in t3e ad8ertisingG it is a <aste of
money5 :y engaging t3e agency in t3e de8elopment process t3ey can aid in guiding
t3e project and <ill be in a muc3 better position to <rite copy t3at is true to t3e
insig3t5 Horking closely at t3e conceptual stage <it3 t3e brand researc3 and brand
marketing agency is critical as ad8ertising is not t3e place for trial and error5
Screening multiple campaigns to objecti8ely find t3e one t3at does t3is best is key5
Not only s3ould t3e <inning campaign be moti8ating and uni4ueG it s3ould con8ey
ne< informationG communicate t3e features and benefits t3at are most important *t3at
is t3e ones t3at consumers 3a8e already indicated t3ey boug3t into+G and it s3ould
generate t3e emotional reaction necessary to get consumers to bond <it3 t3e brand5
"ac3 element is part of a successful ad8ertising testing effort5
Step * 6 2acaging !evelopment7Screening# 7or many brands packaging is t3e
primaryG if not t3e onlyG ad8ertising t3e consumer <ill see5 Packaging de8elopment
needs to clearly focus on t3e insig3t and sell t3e benefits t3at come out of t3is5 ,ike
ad8ertisingG your packaging agency must understand t3e insig3t <ork and not try to
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re-interpret t3e direction5 #ndG like ad8ertisingG multiple packaging options s3ould be
considered to find t3e direction t3at is most moti8atingG uni4ueG does t3e best job of
communicating benefitsG and lea8es consumers <it3 t3e fa8orable emotional reaction
you are looking to ac3ie8e5 # brand packaging firm s3ould be broug3t into t3e
e4uation early in t3e process before final concepts are designedG allo<ing t3e
packaging firm to offer best practice ad8ice on L3o<L to eCecute t3e idea efficientlyG
effecti8ely and at t3e best cost5 T3e best ideaG unable to be eCecuted or eCecuted at
tremendous costG is not a bargain5
Step 9 & Introductory Mareting72romotion Materials# T3ese too s3ould be true to
t3e insig3t5 2a8ing focused on t3is <inning consumer insig3t so longG <3y risk it by
not telling consumers it is no< in t3eir po<er to buy it5 !ntroduce t3e product as t3e
breakt3roug3 it isG not just anot3er line eCtension5
RememberG t3e consumer s3ould al<ays dri8e your effortsG and <3en you get off track
and t3e consumers tell youG you must listen5 T3is is t3e reason you keep c3ecking
<it3 t3emG to make sure you 3a8e stayed true to t3eir original guidance5 ,isten -- t3is
is t3e single best <ay to impro8e your ne< productG ad8ertisingG and packaging
efforts5
ASSIGNMENT 5
1"E0plain any t$o pricing policies $ith their relative advantages and
disadvantages"
Ans# :A;<E&5ASE! 24I,ING# Dalue prices ad3ere to t3e t3inking t3at t3e
optimal selling price is a reflection of a product or ser8iceLs percei8ed 8alue by
customersG not just t3e companyLs costs to produce or pro8ide a product or ser8ice5
T3e 8alue of a product or ser8ice is deri8ed from customer needsG preferencesG
eCpectationsG and financial resources as <ell as from competitorsL offerings5
Conse4uentlyG t3is approac3 calls for managers to 4uery customers and researc3 t3e
market to determine 3o< muc3 t3ey 8alue a product or ser8ice5 !n additionG managers
must compare t3eir products or ser8ices <it3 t3ose of t3eir competitors to identify
t3eir 8alue ad8antages and disad8antages5
etG 8alue-based pricing is not just creating customer satisfaction or making sales
because customer satisfaction may be ac3ie8ed t3roug3 discounting aloneG a pricing
strategy t3at could also lead to greater sales5 2o<e8erG discounting may not
necessarily lead to profitability5 Dalue pricing in8ol8es setting prices to increase
profitability by tapping into more of a product or ser8iceLs 8alue attributes5 T3is
approac3 to pricing also depends 3ea8ily on strong ad8ertisingG especially for ne<
products or ser8icesG in order to communicate t3e 8alue of products or ser8ices to
customers and to moti8ate customers to pay more if necessary for t3e 8alue pro8ided
by t3ese products or ser8ices5
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!EMAN!&5ASE! 24I,ING# Managers adopting demand-based pricing policies
areG like 8alue pricersG not fully concerned <it3 costs5 !nsteadG t3ey concentrate on t3e
be3a8ior and c3aracteristics of customers and t3e 4uality and c3aracteristics of t3eir
products or ser8ices5 /emand-oriented pricing focuses on t3e le8el of demand for a
product or ser8iceG not on t3e cost of materialsG laborG and so fort35
#ccording to t3is pricing policyG managers try to determine t3e amount of products or
ser8ices t3ey can sell at different prices5 Managers need demand sc3edules in order to
determine prices based on demand5 Using demand sc3edulesG managers can figure out
<3ic3 production and sales le8els <ould be t3e most profitable5 To determine t3e
most profitable production and sales le8elsG managers eCamine production and
marketing costs estimates at different sales le8els5 T3e prices are determined by
considering t3e cost estimates at different sales le8els and eCpected re8enues from
sales 8olumes associated <it3 projected prices5

T3e success of t3is strategy depends on t3e reliability of demand estimates5 2enceG
t3e crucial obstacle managerBs face <it3 t3is approac3 is accurately gauging demandG
<3ic3 re4uires eCtensi8e kno<ledge of t3e manifold market factors t3at may 3a8e an
impact on t3e number of products sold5 T<o common options managers 3a8e for
obtaining accurate estimates are enlisting t3e 3elp from eit3er sales representati8es or
market eCperts5 Managers fre4uently ask sales representati8es to estimate increases or
decreases in demand stemming from specific increases or decreases in a product or
ser8iceLs priceG since sales representati8es generally are attuned to market trends and
customer demands5 #lternati8elyG managers can seek t3e assistance of eCperts suc3 as
market researc3ers or consultants to pro8ide estimates of sales le8els at 8arious unit
prices5
'" As Mareting !irector of 3ellogg=s evolve a maret driven distribution system
for the maret"
Ans# Marketing c3annel strategy is rapidly emerging as a 8ery po<erful tool for
companies searc3ing to gain a decisi8e competiti8e edge5
More and more companies today realiIe t3at in order to de8ise optimal marketing
c3annelsG t3ey first need to kno< <3at an idealG totally customer dri8en system <ould
look likeG disregarding t3e fact t3at suc3 models are usually not feasible andG for t3at
reasonG rarely see t3e lig3t of day5
T3e ideal systemG based on eCacting customer researc3 and unimpeded by eCternal
considerations and constraintsG is intended purely as a yardstick by <3ic3 a
companyBs marketing c3annel performance can be most accurately e8aluated5 More
importantlyG it 3elps to measure t3e distance bet<een ideal and present practices
and>or obstacles to closing t3e gap5
T3e met3od most <idely used to create t3is ne< scientific conteCt in <3ic3 top
management can decide its companyBs future marketing c3annel strategyG in8ol8es
eig3t steps5
Step one 6 the customer=s $ants
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Preliminary researc3 determines <3at customers really <ant from t3e buying process5
T3eir preferences generally fall into fi8e categoriesG ie lot siIeG market
decentraliIationG <aiting timeG product 8ariety and ser8ice backup5 T3ese are t3en
grouped into market segments5
Step t$o 6 label outlets
7ocus 3ere is on t3e relations3ip bet<een market segments and t3e outlets <3ere
ser8ices are normally deli8ered5 Respondents are asked about t3e ser8ice outlets t3ey
8isualiIe as ideally meeting t3eir needs><ants5 Researc3ers t3en label t3ese
3ypot3etical outlets according to segmentsG but <it3out limiting t3eir possibilities5
T3e more researc3ers are creati8e <it3 labelingG t3e better step t<o <ill <ork5
Step three 6 the feasibility test
2a8ing determined <3at customers percei8e to be optimal s3opping conditionsG
companies no< must apply t3e first objecti8e reality c3eck5 T3is in8ol8es:
#ssessing <3et3er t3e pre8iously determined segments are feasible for t3e company
/etermining <3at kind of support <ill be neededG and a8ailableG from suppliers or
ot3er c3annel participants for any 3ypot3etical outlet suggested by t3e dataG and Step
four 6 ho$ ideal is >ideal- #t t3is point t3e researc3ers 3a8e come as close as
possible to discerning an ideal market-dri8en system5 No< t3ey in8estigate 3o< suc3
a c3annel model <ould affect t3e companyBs o8erall performance5 7or t3is purpose
researc3ers consult a cross section of t3e companyBs eCecuti8es as <ell as eCecuti8es
<it3 a stake in distribution matters5 !ne8itablyG t3ese groups <ill <ant to modify t3e
ideal model to better suit t3eir indi8idual objecti8es and>or to take into account
eCternal issues impacting on t3e companyBs scope <it3 respect to distribution policy5
T3ese considerationsG many of <3ic3 are based on industrial traditionsG act as
constraints on t3e ideal marketing c3annel strategy and t3us are pi8otal to furt3er
design stages5
Step five 6 comparing the options
T3e step calls for a comparison bet<een companyBs eCisting market c3annel strategy
and a+ t3e idealG truly market-dri8en distribution systemG and b+ t3e ideal model
incorporating managementBs constraints5
One of t3ree conclusions <ill emerge from t3ese comparisons:
M !f all t3ree systems resemble one anot3erG t3e eCisting strategy is as good as it can
get5 :ut if customer satisfaction is mediocre ne8ert3elessG fault lies <it3
implementation5
M !f t3e eCisting and EmanagementBsF systems are similarG but substantially different
from t3e idealG management policies may indeed be causing t3e gap5
M !f all t3ree 8ary greatlyG it may be possible to impro8e marketing c3annel
performance <it3out relaCing managementBs objecti8es and constraints5
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Step si0 6 revie$ing all assumptions
2ere all constraints are put under t3e microscope to see <3ic3 are based on prejudice
and assumptions and <3ic3 are real and seriousG and <3et3er t3ey can be o8ercome5
T3is process is ideally assisted by outside eCpertsG including la<yersG political
consultants and distribution eCperts from ot3er industries5
Step seven 6 confronting the gap
T3is is t3e climaC of t3e process as top management is broug3t face-to-face <it3 t3e
gap bet<een t3eir preferred model and t3e ideal marketing c3annel strategy5
#rmed <it3 data gained from stage siCG researc3ers c3allenge t3e 8alidity of
managementBs objecti8es and constraintsG t3us promoting a fres3 and energetic
appraisal of all 4uantitati8e and subjecti8e 8ariables impacting on t3e c3oice of
distribution system5
Step eight 6 implementation
T3is final step modifies t3e ideal marketing c3annel strategy according to
managementBs final objecti8es and constraints5 !mplementation of t3is optimal model
must be subject to intensi8e planning and any modifications to t3e eCisting system
s3ould be tested on a small scale before resources are committed5
!deally none of t3e eig3t steps outlined 3ere s3ould be skipped for t3e sake of
apparent eCpediency becauseG irrespecti8e of t3e outcomeG t3e clarity t3e process
brings to companiesB distribution issues is absolutely in8aluable5
(" .hich type of sales promotion vehicles $ill you use to promote the sale of a
premium brand of toilet soap/
Ans# Sales promotionG a key ingredient in marketing campaignsG consists of a
collection of incenti8e toolsG mostly s3ort termG designed to stimulate 4uicker or
greater purc3ase of particular products or ser8ices by consumers or t3e trade5 H3ereas
ad8ertising offers a reason to buyG sales promotion offers an incenti8e to buy5
Sales promotion tools for Toilet Soap# ,?NS<ME4 24?M?TI?N
Samples
Coupons
Cas3 Refund Offers
Prices Off
Premiums
PriIes
Patronage Re<ards
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7ree Trials
Harranties
Tie in Promotions
Cross Promotions
Point Of Purc3ase /isplays
/emonstrations
T4A!E 24?M?TI?N
Prices Off#d8ertising and display #llo<ances 7ree .oods
5<SINESS AN! SA;ES&%?4,E 24?M?TI?N
Trade S3o<s and Con8entions
Contests for Sales Reps
Specialty #d8ertising
,ASE ST<!@

M565:5 products <as an industrial companyG undertaking t3e manufacture of c3e<ing
tobacco products5 7or t3e packing of t3ese productsG tin containers <ere re4uired in
3uge 4uantities5 T3e company <as buying t3ese containers from S3aI MetalsG <3o
<ere supplying t3e empty containers to M565:5 products S Rs5 $5() per tin container5
T3is arrangement carries on for more t3an ten years5
M565:5 products <ere later joined by a young M5:5#5G <3o ad8ised t3e o<ner of
M565: productsG to go in for back<ard integration *To make t3e tin containers
t3emsel8esG instead of buying t3em from S3aI Metal Horks5
T3e matter <as put under deliberation and it <as decided to join for partial back<ard
integrationG i5e5 to start t3e manufacture of t3eir o<n tin containersG as <ell asG keep
buying from t3e supplier*S3aI Metal+ in a lesser 4uantityG till suc3 time t3at t3e
company M565:5 products could become self sufficient5
!n t3e pursuit of back<ard integrationG anot3er semiautomatic tin container
manufacturing plant <as set up by t3e companyG and it started its production and
initially faced a lot of teet3ing troubles5 T3ey 3o<e8erG o8ercame t3em and started
functioning smoot3ly5
# number of suppliers <ere interested in supplying tin s3eets for M565:5 products5
#fter buying randomly from a number of suppliersG t3e company came to t3e terms
<it3 one Mr5 HaliG <3o undertook all t3e ra< material supplies of t3e tin s3eets to t3e
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company at reasonable rates5 2e <ould make deli8eries as and <3en necessaryG and
de8eloped a good relations3ip <it3 t3e company5 T3is arrangement lasted for a
decade5 ,aterG Mr5 HaliG t3e tin supplier told t3e company t3at t3ey <ould be c3arging
an additional t<o percent on t3e prices 4uoted by t3em and deli8ery time <ould 3a8e
to be resc3eduled and t3e company <ould 3a8e to pick upG or order for t3e entire
material consumed by t3e 4uarterlyG instead of mont3ly arrangements5 T3is sets t3e
company t3inking <3et3er to agree to Mr5 Hali terms or to look for anot3er supplier5
#fter a little researc3G t3ey came across a supplier in tin industriesG <3o <as 3appy to
supply t3e goods at same terms and conditions5
H3en t3e deal <as about to finaliIed <it3 t3e scrap tin industriesG Mr5 Hali sent a
telegram t3at t3e increase in rates <as cancelledG and t3ey <ere <illing to rene< t3eir
contractG or continue <it3 t3e suppliers at t3e earlier rate for t3e neCt $& mont3s5
T3is again set t3e company t3inkingG because t3ey 3ad good relations <it3 Mr5Hali
for a long period of time and also t3e fact t3at in industrial buyingG market price plays
a secondary role but t3e 4ualityG timely and regular suppliers are t3e dominant factors5
8<ESTI?NS#
$5 .hat should the company do in this situation and $hy/
Ans: T3e company s3ould continue <it3 Mr5 Hali as 3e 3as been t3eir supplier for
more t3an a decade and t3ere <as no 4uality issue <it3 t3e product t3at 3e <as
supplying 5 :ut t3is s3ould be done after a meeting <it3 Mr5 Hali about t3e concerns
of price and deli8ery G # proper contract s3ould be made regarding t3e price and t3e
in8entory 5 T3e company s3ould manage enoug3 in8entory so t3at if Mr5 Hali does
t3is t3ing again t3e company 3as got enoug3 time to look for anot3er supplier5
/ependency on one supplier is not ad8isable as 3e may try to take ad8antage of t3is
t3ing in future 5
#not3er t3ing t3at t3e company can do is look for anot3er supplier rig3t a<ay and
reduce t3e order 4uantity of Mr5 Hali and make 3im clear t3at if 3e is trying to take
ad8antageG t3is t3ing <onBt be tolerated and 3e could be blacklisted if t3is t3ing gets
repeated5
&5 Should the company try scrap industries $ho are an unlisted supplier and
$hat precautions should the company tae for the future/
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Ans# 7irstly t3e product of t3e Scrap industry s3ould be tested <3et3er it meets t3e
re4uirements of t3e company or not5 Testing and analysis of t3e Scrap !ndustries
s3ould be done in terms of 9uality of t3e productG Timely /eli8ery and price5
T3e company may place a sample order for testing and if t3e 4uality is up to t3e
standards t3en t3e company can look for<ard to enter into a contract <it3 Scrap
!ndustries on t3e conditions t3at it s3ould pro8ide <it3 t3e good 4uality at t3e rig3t
time5 #nd one t3ing s3ould be added in t3e contract t3at if t3ey default in any area
penal actions <ill be taken against t3em G t3is t3ing <ill ensure t3at Scrap !ndustries
<ill t3emsel8es take care of all t3e aspects of t3e supply
To pre8ent t3is situation from 3appening again time to time 8endor analysis s3ould be
done for 4ualityG pricing and deli8ery5 H3et3er or not t3e company take supply from
t<o or more 8endors but t3ey may 3a8e a backup to replace current 8endors if t3ey
default5
ASSIGNMENT ,

1" #ll of t3e follo<ing <ould be <ays to segment <it3in t3e category of
psyc3ograp3ic segmentation "TC"PT:
a" social class5
b" occupation"
c5 lifestyle5
d5 personality5
#ns<er : *b+ occupation
&5 T3e orange juice manufacturers kno< t3at orange juice is most often consumed in
t3e mornings5 2o<e8erG t3ey <ould like to c3ange t3is and make t3e drink acceptable
during ot3er time periods during t3e day5 H3ic3 form of segmentation <ould t3ey
need to <ork <it3 and establis3 strategy reflecti8e of t3eir desiresN
a5 gender segmentation
b5 benefit segmentation
c" occasion segmentation
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d5 age and life-cycle segmentation
#ns<er : *c+ occasion segmentation
'5 Using a successful brand name to introduce additional items in a gi8en product
category under t3e same brand name *suc3 as ne< fla8orsG formsG colorsG added
ingredientsG or package siIes+ is called a*n+:
a" line e0tension"
b5 brand eCtension5
c5 multibranding5
d5 ne< brands5
#ns<er : *a+ line eCtension
U5 !f a companyLs objecti8e <ere to reac3 masses of buyers t3at <ere geograp3ically
dispersed at a lo< cost per eCposureG t3e company <ould likely c3oose <3ic3 of t3e
follo<ing promotion formsN
a" Advertising
b5 Personal selling
c5 Public relations
d5 Sales promotion
#ns<er: *a+ ad8ertising
05 Successful ser8ice companies focus t3eir attention on bot3 t3eir customers and t3eir
employees5 T3ey understand service &profit chains , <3ic3 links ser8ice firm profits
<it3 employee and customer satisfaction5
a5 internal marketing
b" service&profit chains
c5 interacti8e marketing
d5 ser8ice differentiation
#ns<er : *b+ ser8ice-profit c3ains
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(5 #nyt3ing t3at can be offered to a market for attentionG ac4uisitionG useG or
consumption t3at mig3t satisfy a <ant or need is called a*n+:
a5 idea5
b5 demand5
c" product"
d5 ser8ice5
#ns<er : * c+ Product
15 Electronic commerce is t3e general term for a buying and selling process t3at is
supported by electronic means5
a5 !nternet commerce
b5 Heb commerce
c5 Computer commerce
d" Electronic commerce
#ns<er : *d+ electronic commerce
Q5 Maret segmentation consists of di8iding a market into distinct groups of buyers
on t3e basis of needsG c3aracteristicsG or be3a8ior <3o mig3t re4uire separate products
or marketing miCes5
a5 Product differentiation
b" Maret segmentation
c5 Market targeting
d5 Market positioning
#ns<er : *b+ Market segmentation
%5 Maret targeting is t3e process of e8aluating eac3 market segmentLs attracti8eness
and selecting one or more segments to enter5
a5 Mass marketing
b5 Market segmentation
c5 Maret targeting
d5 Market positioning
#ns<er : *c+ Market targeting
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1A" T3e fact t3at ser8ices are soldG producedG and consumed at t3e same time refers to
<3ic3 of t3e follo<ing ser8ice c3aracteristicsN
a5 !ntangibility
b5 Inseparability
c5 Dariability
d5 Peris3ability
#ns<er: *b+ !nseparability
$$5 !emographic factors are t3e most popular bases for segmenting customer groups5
a5 .eograp3ic
b5 !emographic
c5 Psyc3ograp3ic
d5 :e3a8ioral
#ns<er: *b+ /emograp3ic
$&5 T3e stage is t3e product life cycle t3at focuses on eCpanding market and creating
product a<areness and trial is t3e:
a5 decline stage5
b5 introduction stage"
c5 gro<t3 stage5
d5 maturity stage5
#ns<er: *b+ introduction stage
$'5 # set of interdependent organiIations in8ol8ed in t3e process of making a product
or ser8ice a8ailable for use or consumption by t3e consumer or business user is called
a *n+:
a5 retailer5
b5 <3olesaler5
c5 distribution channel"
d5 logistics5
#ns<er: *c + distribution c3annel
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$U5 !n e8aluating messages for ad8ertisingG telling 3o< t3e product is better t3an t3e
competing brands aims at making t3e ad:
a5 meaningful5
b5 distinctive"
c5 belie8able5
d5 remembered5
#ns<er: *b+ distincti8e
$05 Environmental sustainability is t3e practice of adopting policies and de8eloping
strategies t3at bot3 sustain t3e en8ironment and produce profits for t3e company5
a5 "n8ironmentalism
b5 Environmental sustainability
c5 Consumerism
d5 Consumer accountability
#ns<er: *b+ "n8ironmental sustainability
$(5 Consumer goods <it3 uni4ue c3aracteristics or brand identification often
re4uiring a special purc3ase effort are called:
a5 custom products5
b5 specialty products"
c5 con8enience products5
d5 s3opping products5
#ns<er: *b+ specialty products
$15 # price reduction to buyers <3o buy in large 8olumes is called a*n+:
a5 Buantity discount"
b5 cas3 discount5
c5 seasonal discount5
d5 trade discount5
#ns<er: *a+ 4uantity discount
$Q5 RP/ and engineering first produce t3e product concept into a p3ysical product
during <3ic3 of t3e follo<ing stages of t3e ne< product de8elopment processN
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a5 Concept de8elopment and testing
b5 Marketing strategy
c5 :usiness analysis
d5 2roduct development
#ns<er: *d+ product de8elopment
$%5 T3e primary reason t3at many companies <ork to become t3e Jlo<-cost
producersJ in t3eir industry is because:
a5 t3ey can generate more ad8ertising5
b5 t3ey can please top management5
c5 t3ey can gain taC ad8antages5
d5 they can set lo$er prices that result in greater sales and profits"
#ns<er: *d+ t3ey can set lo<er prices t3at result in greater sales and profits5
&)5 Conflicts bet<een different le8els of t3e same c3annel of distribution are referred
to as:
a5 3oriIontal conflicts5
b5 vertical conflicts"
c5 layer-based conflicts5
d5 parallel conflicts5
#ns<er: *b+ 8ertical conflicts5
&$5 Enlightened mareting is a p3ilosop3y 3olding t3at a companyLs marketing
s3ould support t3e best long-run performance of t3e marketing system5
a5 Enlightened mareting
b5 Myopic marketing
c5 7undamental marketing
d5 Conceptual marketing
#ns<er: *a+ "nlig3tened marketing
&&5 # company is practicing niche mareting if it focuses on sub segments <it3
distincti8e traits t3at may seek a special combination of benefits5
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a5 micromarketing
b5 niche mareting
c5 mass marketing
d5 segment marketing
#ns<er: *b+ nic3e marketing
&'5 H3en a company re8ie<s salesG costsG and profit projections for a ne< product to
find out <3et3er t3ese factors satisfy t3e companyLs objecti8esG t3ey are in <3ic3 of
t3e follo<ing ne< process de8elopment stagesN
a5 Concept de8elopment and testing5
b5 CommercialiIation5
c5 5usiness analysis"
d5 Marketing strategy de8elopment5
#ns<er : *c+ business analysis
&U5 5rand e0tension is a strategy of using a successful brand name to launc3 a ne<
or modified product in a ne< category5
a5 /uo branding
b5 ,ine eCtension
c5 5rand e0tension
d5 Multibranding
#ns<er *c+ :rand eCtension
&05 T3e fact t3at ser8ice cannot be stored for later use or sale is e8idence of t3eir:
a5 intangibility5
b5 inseparability5
c5 8ariability5
d5 perishability"
#ns<er: *d+ peris3ability
&(5 Integrated mareting communications is t3e concept under <3ic3 a company
carefully integrates and coordinates its many communications c3annels to deli8er a
clearG consistentG and compelling message about t3e organiIation and its products5
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a5 T3e promotion miC
b5 !ntegrated international affairs
c5 Integrated mareting communications
d5 !ntegrated demand c3aracteristics
#ns<er : *c + !ntegrated marketing communications
&15 T3e course of a productLs sales and profits o8er its lifetime is called:
a5 t3e sales c3art5
b5 t3e dynamic gro<t3 cur8e5
c5 t3e adoption cycle5
d5 the product life cycle"
#ns<er: *d+ t3e product life cycle
&Q5 T3e type of trade-promotion discount in <3ic3 manufacturers agree to reduce t3e
price to t3e retailer in eCc3ange for t3e retailerLs agreement to feature t3e
manufacturerLs products in some <ay is called a*n+:
a5 discount5
b5 allo$ance"
c5 premium5
d5 rebate5
#ns<er: *b+ allo<ance
&%5 H3en producersG <3olesalersG and retailers act as a unified systemG t3ey comprise
a5 con8entional marketing system5
b5 po<er-based marketing system5
c5 3oriIontal marketing system5
d5 vertical mareting system"
#ns<er: *d+ 8ertical marketing system
')5 2ersonality is a personLs distinguis3ing psyc3ological c3aracteristics t3at lead to
relati8ely consistent and lasting responses to 3is or 3er o<n en8ironment5
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a5 Psyc3ograp3ics
b5 2ersonality
c5 /emograp3ics
d5 ,ifestyle
#ns<er: *b+ personality
'$5 ?nline 3as t3e ad8antage of being 3ig3 in selecti8ityO lo< costO immediacyO and
interacti8e capabilities5
a5 /irect Mail
b5 Outdoor
c5 ?nline
d5 Radio
#ns<er: *c + online
'&5 !f an ad8ertiser <ants fleCibilityG timelinessG good local market co8erageG broad
acceptabilityG and 3ig3 belie8abilityG t3e ad8ertiser <ill probably c3oose <3ic3 of t3e
follo<ing mass media typesN
a5 Ne$spapers
b5 Tele8ision
c5 /irect Mail
d5 Radio
#ns<er : *a+ ne<spapers
''5 # *n+ brand is a nameG termG signG symbolG or designG or a combination of t3ese
t3at identifies t3e maker or seller of a product or ser8ice5
a5 product feature
b5 sponsors3ip
c5 brand
d5 logo
#ns<er: *c + brand
'U5 #ll of t3e follo<ing factors can affect t3e attracti8eness of a market segment
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"TC"PT:
a5 t3e presence of many strong and aggressi8e competitors5
b" t3e likeli3ood of go8ernment monitoring"
c5 actual or potential substitute products5
d5 t3e po<er of buyers in t3e segment5
#ns<er: *c + actual or potential substitute products5
'05 # service is any acti8ity or benefit offered for sale t3at is essentially intangible
and does not result in t3e o<ners3ip of anyt3ing5
a5 demand
b5 basic staple
c5 product
d5 service
#ns<er: *d+ ser8ice
'(5 T3e production concept 3olds t3at consumers <ill fa8or products t3at are
a8ailable and 3ig3ly affordable *t3ereforeG <ork on impro8ing production and
distribution efficiency+5
a5 product concept
b5 production concept
c5 production cost eCpansion concept
d5 marketing concept
#ns<er: *b+ production concept
'15 # company is in t3e product development stage of t3e ne< product de8elopment
process <3en t3e company de8elops t3e product concept into a p3ysical product in
order to assure t3at t3e product idea can be turned into a <orkable product5
a5 product development
b5 commercialiIation
c5 marketing strategy
d5 business analysis
#ns<er: *a+ product de8elopment
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'Q5 T3e practice of going after a large s3are of a smaller market or subsets of a fe<
markets is called:
a5 undifferentiated marketing5
b5 differentiated marketing5
c5 concentrated mareting"
d5 turbo marketing5
#ns<er: *c + concentrated marketing
'%5 Idea screening is screening ne<-product ideas in order to spot good ideas and
drop poor ones as soon as possible5
a5 !dea generation
b5 Concept de8elopment and testing
c5 Idea screening
d5 :rainstorming
#ns<er: *c+ idea screening
U)5 Tec3nological ad8ancesG s3ifts in consumer tastesG and increased competitionG all
of <3ic3 reduce demand for a product are typical of <3ic3 stage in t3e P,CN
a5 decline stage
b5 introduction stage
c5 gro<t3 stage
d5 maturity stage
#ns<er: *a+ decline stage
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