Name Amit Gupte

Registration / Roll No. 511023366

Course Master of Business Administration (MBA)

Subject Marketing Management

Semester Semester 2

Subject Number MB0046

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Q.1
a. Explain the different micro-environmental forces
with examples.

Forces in the micro environment

1 The Company

Remember, in the previous unit we discussed about marketing mix and

marketing plan. Safe Express, a leader in the supply chain
management solution wants to hold its number one position in the US
$ 90 billion Indian logistics market. The company plans to expand its
service areas in the coming months. To meet the targets of the
marketing plan, other departments of safe express also expanding
their horizon. The Company is coming out with logistics parks in
different cities; plans to hold seven million square feet of warehousing
capacity in the next three years and invest Rs 10 billion in three years
to meet those targets. The above example shows that the company’s
marketing plan should be supported by the other functional
departments also.

2 Intermediaries

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Marketing intermediaries: These are firms which distribute and sell the
goods of the company to the consumer.

Marketing intermediaries play an important role in the distribution,

selling and promoting the goods and services. Stocking and delivering,
bulk breaking, and selling the goods and services to customer are
some of the major functions carried out by the middlemen. Retailers,
wholesalers, agents, brokers, jobbers and carry forward agents are few
of the intermediaries. Retailers are final link between the company and
the customers. Their role in the marketing of product is increasing
every day.

3 Publics

These are microenvironment groups, which help a company to

generate the financial resources, creating the image, examining the
companies’ policy and developing the attitude towards the product.

We can identify six types of publics

1. Financial publics influence the company’s ability to obtain funds.

For example, Banks, investment houses and stockholders are the major
financial publics.

2. Media publics carry news and features about the company e.g.
Deccan Herald

3. Advertisement regulation agencies, telecom regulation

agency( TRAI), and insurance regulation agency(IRDA) of the
government

4. Citizen action groups: Formed by the consumer or environmental

groups. For example, people for ethical treatment of animals (PETA) or
Greenpeace.

5. General publics: a company should be concerned towards general

publics’ attitude towards its products and services.

6. Internal publics: Employees who help in creating proper image for

the company through word of mouth.

4 Competitors

A company should monitor its immediate competitors as its sale will be

affected by the nature and intensity of the competitors. The sale of
Coca cola will be affected by Pepsi cola, or Britannia cheese by Amul

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cheese. Michael Porter, the author of Competitive Advantage of
Nations suggested that, in addition to direct competition, companies
should also consider competition from substitutes. In addition to
existing competitors, the potential competitors should also be
anticipated. Competition may arise from

a. Small firms with low overheads producing duplicates.

b. Firms which diversify into certain products by merely being in the

particular industry for e.g. Pepsi entered the snacks sector competing
with pure snack producers like Haldiram.

c. Firms which expand in the same vertical for e.g. Godrej which
manufactured office furniture and steel cupboards went on to the
entire range of home furniture thereby giving competition to pure
home furniture makers.

How do companies or enterprises survive and grow under the above

circumstances. While we shall study this in detail later, a simple step
could be that the product should be positioned differently and the
company should be able to provide better services.

5 Suppliers

There are many kinds of suppliers to an enterprise or an institution.

There are typically, raw material suppliers, energy and fuel suppliers,
labour suppliers, office item suppliers and so on.

Suppliers are the first link in the entire supply chain of the company.
Hence any problems or cost escalation in this stage will have direct
effect on the company. Many companies adopted supplier relation
management system to manage them well. Suppliers are a source of
competition to firms today. For a large retail store like Reliance Retail
or Big Bazaar the suppliers play the most significant role in both cost
and time. Timely supplies reduce stocking of goods and blocking of
space, at the same time meet customer requirements.

In a globalised scenario suppliers are even more important as

competition goes up manifold! The Tamil Nadu State Electricity Board
imports coal from New Zealand despite huge coal reserves in India. For
Volvo, India is a manufacturing hub.

6 Customers

A company may sell their products directly to the customer or use

marketing intermediaries to reach them. Direct or indirect marketing

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depends on what type of markets Company serves. Generally we can
divide the markets into five different categories. They are

a. Consumer market.

b. Business market

c. Reseller market

d. Government market and

e. International market

You will come to know about these five different markets from the
following example.

MRF, a tyre company sells its product directly to consumer (in case of
urgency, customer purchases directly from showroom) i.e. operates in
consumer market. It operates in business markets by selling tyres to
companies like Maruti Udyog limited. MRF also sells TYREs to BMTC and
KSRTC, transport organizations of Karnataka government. If MRF sells
tyres in African or American countries then it is operating in the
international market. If MRF buys the old tyres, retreads it and sells it
to the consumer at a profit then company is operating in the reseller
market.

b. Mention the different ad appeals with suitable

examples. (4 marks)

The different ad appeals-

A)Emotional appeal:
Positive emotional appeal or negative emotional appeals are strong
tools used to intensify the purchasing activity of the customer. Positive
emotions like love, pride, joy and humor are used in the message.
Following are the advertisement where such attributes of positive
emotions used.

e.g. BMW fastest saloon car in the world- pride

e.g. Fevicol – humor
e.g. Wheel- love.

The negative emotions like fear guilt and shame are also used in the
advertisement to attract the customer.

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e.g. NIIT- if you are not studying at NIIT you are missing something-
guilt
e.g. Rexona deodorant – shame

B)Rational appeals:
The rational appeals highlight on the desired benefits about the
products. They highlight quality, economy value or performance of the
product.

e.g. Dabur Amla – value appeal ( long Hair)

e.g. Lakme brilliance- Quality products.
e.g. Reliance India mobile- performance( works even in flood
situations)
e.g. Reliance Infocom- Like the first three, the mobile phone must
come to me as a necessity and not as a luxury- economy

C)Moral appeal:
These are concerned towards public health or environment or social
responsibility.

e.g. Shell lubricants show its commitment towards environment in their

advertisements.

Q.2 What are the different market entry strategies if

a company wants to enter international markets?

Organizations that plan to go for international marketing should know

the answers for some basic questions like – a. In how many countries
would the company like to operate? b. What are the types of countries
it plans to enter?That’s why companies evaluate each country against
the market size, market growth, and cost of doing business,
competitive advantage and risk level.

Checklist for country evaluation

The Characteristics, weightages and score should be checked.

1. Political rights.
2. Civil liberties.
3. Control of corruption.
4. Government effectiveness.
5. Rule of law or legal issues.
6. Health expenditure.

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7. Education expenditure.
8. Regulatory quality.
9. Cost of starting a business.
10. Days to start a business.
11. Trade policy.
12. Inflation.
13. Fiscal policy.
14. Consumption patterns.
15. Competition.

International Market Entry Strategies

Once the market is found to be attractive, companies should decide

how to enter this market. Companies can enter the international
market by adoptingany one of the following strategies. They are

a. Exporting

b. Licensing

c. Contract manufacturing

d. Management contract

e. Joint ownership

f. Direct investment

Exporting is the technique of selling the goods produced in the

domestic country in a foreign country with some modifications. For
example, Gokaldas textiles export the cloth to different countries from
India. Exporting may be indirect or direct. In case of indirect exporting,
company works with independent international marketing
intermediaries. This is cost effective and less risky too. Direct exporting
is the technique in which organization exports the goods on its own by
taking all the risks. Maruti Udyog Limited, India’s leading car
manufacturer exports its cars on its own. Company can also set up
overseas branches to sell their products. Adani Exports, another
leading exporter from India has international office in Singapore.

Licensing: According to Philip Kotler, licensing is a method of entering

a foreign market in which the company enters into an agreement with
a license in the foreign market, offering the right to use a
manufacturing process, trademark, patent, or other item of value for a
fee or royalty. For example, Torrent Pharmaceuticals has license to sell

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the cardiovascular drugs of Chinese manufacturer Tasly. Licensing may
cause some problems to the parent company. Licensee may violate the
agreement and can use the technology of the parent company.

Contract manufacturing: Company enters the international market

with a tie up between manufacturer to produce the product or the
service. For example, Gigabyte Technology has contract manufacturing
agreement with D- link India to produce and sell their mother boards.
Another significant manufacturer is TVS Electronics; it produces key
boards in its own name as well as for other companies too.

Management contracting: In this case, a company enters the

international market by providing the know how of the product to the
domestic manufacturer. The capital, marketing and other activities are
carried out by the local manufacturer, hence it is less risky too.

Joint ownership: A form of joint venture in which an international

company invests equally with a domestic manufacturer. Therefore it
also has equal right in the controlling operations. For example,
Barbara, a lingerie manufacturer has joint venture with Gokaldas
Images in India.

Direct Investment: In this method of international market entry,

Company invests in manufacturing or assembling. The company may
enjoy the low cost advantages of that country. Many manufacturing
firms invested directly in the Chinese market to get its low cost
advantage. Some governments provide incentives and tax benefits to
the company which manufactures the product in their country. There is
government restriction in some countries to opt only for direct
investment, as it produces the jobs to the local people. This mode also
depends on the country attractiveness. It may become risky if the
market matures or unstable government exists.

Q.3.a. State the meaning of Product life cycle and

explain the different stages involved in it. (8 marks)

Meaning of Product Life Cycle: It means a product has to go

through the various stages since its inception and till it completely
fades out from the market. The following graph represents the PLC
curve and the 5 stages that it has to undergo

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The product which is introduced into the market will undergo some
modifications over the period. Its sales also fluctuate. Therefore a
marketer will be interested in finding out how sales changes over a
period and what strategies are best suited at that point. A product life
cycle can be graphed by plotting aggregate sales volume for a product
category over time. Generally the curve resembles a bell shaped curve.
We can obtain style, fashion or fad style of product life cycles also.

Product life cycle (bell shaped curve)

According to PLC, a product passes through five stages which are as

follows:

1. Product development stage: In this stage company identifies the

viable idea and develops it. Even if sales in this stage are nil it requires
huge research and development budget. Therefore company incurs
losses at this stage. For example, TATA Docomo before entering the
cellular services market had done research and found that calls were
charged for minutes rather than seconds.

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2. Introduction stage: Company introduces the product into the market.
As the product is new to the market, consumer awareness is usually
very low. Here company adopts heavy sales promotion and product
awareness programs. The cost of product is very high and sales are
very low. At this juncture the company charges high price to the
customers. For example, TATA Docomo has entered into cellular
services initially through the Billboards.

3. Growth stage: Company gets experience over the period and now
tries to get the maximum market share (takes ‘first mover’ advantage).
Sales will grow rapidly, resulting in lesser cost and better profit.
Company reduces the price of the product and offers varieties and
values in it. It focuses on building better distribution network and
pushes the product through it. Therefore company needs less sales
promotion. There will be increase in Competition and the company is
forced to keep a tab on its competitors. For example, TATA Docomo
has entered into the growth stage by aggressively advertising on
Television and other mediums and at the same time giving competition
to the existing players.

4. Maturity stage: In this stage, the product has already established

itself in the market. These are the characteristics of this stage – a. Peak
sales.b. Low cost per customer. c. High profits.d. Competition
based pricinge. Communicating the product differentiation (or USP) to
consumers.f. Improving supply chain efficiency.g. Defend the market
share h. Industry experiences consolidation.

5. Decline stage: In this stage, product sales and profit decline.

Company should phase out weak items from their product mix and
may even lower the prices of the existing products. The advertisement
budget of the company also comes down and the company may
struggle to meet its costs. For example, VCR’s have been replaced with
DVD players and so VCR entered into the decline stage and is almost
out of the market.

Other product life cycles:

1. Style: A style is a basic and distinctive mode of expression that

appears in the study of human behavior. For example, style is evident
in homes, art, accessories and clothing. Once the style is invented it
will be there for a longer period.

2. Fashion: Currently accepted or popular style in a given field. For

example, cargo jeans are now the fashion with college going students.
Fashion changes with time.

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3. Fad: A fashion that enters quickly is adopted with great zeal, peaks
early, and declines very fast. For example, when pager was introduced,
everybody wanted to have the product. But when people found mobiles
as alternative, the demand for pager went down drastically.

b. Define Customer Relationship Management. (2

marks)

Berry defines CRM as “attracting, maintaining and – in multi-service

organizations – enhancing customer relationships.”

Berry and Parasuraman define CRM as “attracting, developing and

retaining customer relationships.”

In Industrial Marketing, Jackson defines CRM as “marketing oriented

toward strong, lasting relationships with individual accounts.”

Doyle and Roth define CRMS as “the goal of relationship selling is to

earn the position of preferred supplier by developing trust in key
accounts over a period of time.”

The sequence of activities for performing relationship marketing would

include developing core services to build customer relationship,
customization of relationship, augmenting core services with extra
benefits, and enhancing customer loyalty and fine-tuning internal
marketing to promote external marketing success.

Christopher considers relationship marketing as “a tool to turn current

and new customers into regularly purchasing clients and then
progressively moving them through being strong supporters of the
company and its products to finally being active and vocal advocates
for the company.”

Relationship marketing is in essence “selling by using psychological

rather than economic inducements to attract and retain customers. It
seeks to personalize and appeal to the hearts, minds and purses of the
mass consumers.”- James J. Lynch

From the above definitions, it could be concluded that Customer

Relationship Management refers to all marketing activities directed
towards establishing, developing, and sustaining long lasting, trusting,
win-win, beneficial and successful relational exchanges between the
focal firm and all its supporting key stakeholders.

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Q.4.
a. You are a sales manager in ABC firm. You have
taken some interviews and shortlisted a few
candidates. How will you select the right candidate
for the sales job? (5 marks)

1. Create an Ideal Salesperson Profile. It has always surprised me

how many companies have fully documented profiles of their ideal
client. Yet, few have a profile of their ideal salesperson. How can you
screen when you don't know what you are screening for?

This profile should be fully detailed. Some of the areas to address in

the profile are the experience you expect that candidate to already
have, the skills that the candidate should already possess and the skills
you are NOT willing to teach.

The lack of a fully-defined profile of the ideal salesperson is the most

common cause of bad sales marriages. It is also the major point of
frustration between sales managers and recruiters. Recruiters often tell
me that they feel they are throwing darts while blindfolded because
they have so little detail about the desired profile.

2. Always be recruiting. In sales, there is an old expression: "The

toughest time to make a sale is when you really need one." The same
holds true for recruiting. When a slot is open on the sales team, it
becomes an "all hands on deck" exercise to fill it. While the seat is
open, revenue targets are in jeopardy. This leads many to forget the
profile of the ideal salesperson profile in the interest of filling a seat.
Playing this forward a bit, the seat becomes vacant again a short time
later when either side determines that it is not a good fit.

Sales recruiting is a year-round exercise. The best sales forces are

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always on the look out for strong sales talent. Find a company that
identifies a strong candidate that meets their profile who wouldn't find
a way to hire this individual. It is a rarity to say the least. Sales teams
have turnover either driven by the company or the employee. It is best
to have a candidate portfolio at the ready than to begin a process of
surfacing candidates when a seat is open. Poor hiring decisions are
made out of desperation to fill a seat. The open seat is a cost to the
company every day it is unfilled. Yet, the cost is more painful if the
seat is filled by someone who doesn’t fit.

3. Practice Reverse Interviewing. Since the intent of the process is

for both sides to be able to determine if a marriage should be
formulated, a wonderful technique is reverse interviewing—an
interview performed by a member of the sales team who would be a
peer if the candidate was hired. It is important that the individual(s)
selected to participate in this step are loyal to the company,
knowledgeable and make a favorable impression.

However, unlike traditional interviews, the "interviewer" does not ask

any questions of the candidate (as you know, it is very easy to get
yourself in hot water if illegal questions are asked). Thus, you don't
want untrained people asking questions. Rather, this "questionless"
exercise has two different purposes. The first is to provide the
candidate with an opportunity to ask questions of someone who would
be their peer if they were to be hired. In essence, it is a way for them
to get a picture of a day in the life of this job. The second purpose is to
measure how the candidate prepares for a sales call.

Afterwards, conduct a debrief with the "reverse interviewer" to see

what questions were asked. Did the candidate take advantage of this
opportunity, bring prepared and insightful questions and write down
answers? If they didn't, what kind of preparation will the candidate do
for a sales call? How interested are they really in this job?

5. Host a Mock Sales Call. What better way to see if someone fits
into your company's selling environment than to put them right in it?
To do this effectively, you need to create a scenario for the candidate.
I've found it most beneficial to give the candidate the scenario a day
ahead of time so they can prepare. They should be provided with the
same amount of information a sales person in your company normally
has before making an initial sales call.

Those members of your company who participate in the exercise

should be somewhat scripted. I say "somewhat" because you don't
want it to be so dry that it is unrealistic, but without any scripting it can

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be hard to stay in character.

The last piece you need to do this well is a score sheet. Know what you
are looking to measure in the process and score accordingly. Can they
conduct a thorough needs analysis? Did they identify the challenges
faced by this prospect? Would you buy from them?

6. Use Online Assessment Testing Wisely. There are a myriad of

tools that are very helpful in the screening process for both personality
and skill. However, few, if any, of the online assessment companies
suggest that their tool should be used to make a hiring decision. The
most appropriate application is to treat it as an additional data point in
the sales talent screening program.

Linda Moeller, product director of Employee Continuum, has seen

companies use this great tool incorrectly. "We have seen many
organizations fail to take the context of an organization into account
when deciding the most appropriate assessment to use. For example,
many organizations assume that implementing a sales assessment will
guarantee them improved sales performers. This is not necessarily the
case. For example, the personality characteristics required for a sales
person selling office supplies to purchasing agents are very different
than those required for a salesperson selling everything needed for a
dentist office. In order to be successful, an organization needs to
consider the type of relationship they have with their clientele and the
competencies that will make these relationships successful," she says.

b. As a consumer, what are the steps you will

undertake before you decide to buy a car? (5 marks)

The steps undertaken before deciding to buy a car-

1. Need recognition: customer posses two type of stimuli’ at this

juncture. One is driven by the internal stimuli and another is external
stimuli. The examples of internal stimuli are customer’s desire, attitude
or perception and external stimuli are advertising etc. From both
stimuli customers understand the need for the product. Here marketer
should understand what customers needs have that drew customers
towards the product and should highlight those in the communication
strategy.

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2. Information search: In this stage customer wants to find out the
information about the product, place, price and point of purchase.
Customer collects the information from different sources like

a. Personal sources: Family, friends and neighbors

b. Commercial sources: Advertising, sales people, dealers, packaging

and displays.

c. Public sources: mass media and consumer rating agencies.

d. Experiential sources: Demonstration, examining the product.

In this stage marketer should give detailed information about the

product. The communication should highlight the attributes and
advantages of the product in this stage so that he created the positive
image about the product.

3. Evaluation of alternatives: After collecting the information,

consumers arrive at some conclusion about the product. In this stage
he will compare different brands on set parameters which he or she
thinks required in the product. The evaluation process varies from
person to person. In general Indian consumer evaluate on the following
parameters

a. Price

b. Features

c. Availability

d. Quality

e. Durability

At this stage marketer should provide comparative advertisements to

evaluate the different brands. The advertisement should be different
for different segments and highlight the attribute according to the
segment.

4. Purchase decision

In this stage consumer buy the most preferred brand. In India

affordability plays an important role at this stage. Organizations’ bring
many varieties of the products to cater to the needs of customers.

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5. Post purchase behavior

After purchasing the product the consumer will experience some level
of satisfaction and dissatisfaction. The consumer will also engage in
post purchase actions and product uses of interest to the marketer.
The marketer’s job does not end when the product is bought but
continues into the post purchase period. Customer would like to see
the performance of the product as he perceived before purchase. If the
performance of the product is not as he expected then he develops
dissatisfactions. Marketer should keep an eye on how consumer uses
and disposes the product. In some durable goods Indian consumer
want resale value also. Many automobile brands that were not able to
get resale value lost their market positions.

Q. 5
a. What are the features of Business markets? How is
it different from consumer markets? (5 marks)

Features or Characteristics of Business Markets

Following are some of the unique features of business markets where

large establishments purchase the required goods and services from
other businesses. Such B2B operations determine the organizations as
buyers and those organizations who supply the various requirements
will be the sellers or suppliers or service providers.

1. Few but bulk Buyers: The no. of buyers is few but they buy in
large quantity. For example, major airlines buy the necessary
equipments from the aircraft manufacturers

2. Geographical concentration of buyers: Buyers are

geographically concentrated. For example, shipping industries are
located on the east and west coasts of India than in any other places.

3. Variable demand: The nature of demand is fluctuating because the

demand is basically a derived one. Based on the requirements of the
consumer markets, organizations buy the goods and make the finished
goods available in the market for final consumption. Larger the
consumer demand, larger will be the organizational buying. For
example, mobiles are being used by a large population and so cellular
companies have to meet this rising demand.

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4. Inelastic demand: The demand is also inelastic because
organizations cannot make rapid changes in the production structure
and so prices remain constant in the short-term. For example, Shoe
manufacturers will not buy much leather if the price of leather is less
neither will they buy less leather if the price increases.

5. Systematic purchasing: The purchasing activity is directly

between the buyer and supplier organization which means there are no
or very few middlemen involved. Purchasing activity is usually
undertaken by purchase departments based on a proper structure and
through various mechanisms like having purchase requisitions from
other sections, inviting tenders and sending invoices from the
suppliers, purchasing agreements or contracts with the key suppliers,
renewing agreements etc. For example, Reliance Fresh has regular
contracts with the agricultural producers for smooth supply of fresh
fruits and vegetables.

6. Multiple buying influences: there will be several parties involved

in deciding about the purchases because organizations will have
several departments and units functioning under it with different
requirements. So, unless they have the proper resources to work with
there will be problems in the departments. For example, purchase
department in a Hospital must be aware about the specific
requirements in the clinical wards, operation theaters, labs, etc.

7. Reciprocation: This means that when an organization buys goods

from another organization then the supplier organization also might
need certain other goods that are produced by the buyer organization.
For example, a stationery supplier will supply the necessary
stationeries to the paper manufacturer who in turn provides papers to
the supplier.

8. Lease agreements: Most organizations take on lease the

expensive equipments required by them rather than buy it. So, in this
way, they reduce cost, get better service and the lessor or one who
provides the equipments will also profit from the rent or lease charges.
For example, TATA provides the transport trucks to other organizations
on lease.

b. List out the 5 important requisites of an effective

segmentation by giving suitable examples. (5 marks)

Requisites of Effective Segmentation

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1. Measurable and Obtainable: The size, profile and other relevant
characteristics of the segment must be measurable and obtainable in
terms of data. If the information is not obtainable, no segmentation can
be carried out. For example, Census of India provides the data on
migration and education level, but does not specify how many of the
migrated employees are educated and if educated how many are in
white collared jobs. If a company wants to target white color collared
employees who are migrated to particular city, it will not able to
measure the same. .

2. Substantial: The segment should be large enough to be profitable.

For consumer markets, the small segment might disproportionably
increase the cost and hence products are priced too high. For example,
when the cellular services started in India cost of the incoming calls
and outgoing calls were charged at Rs 12/minute. As the number of
subscribers grew, incoming calls became free. Further growth of
subscribers resulted in lowering tariffs for outgoing calls to the lowest
level in the world.

3. Accessible: The segment should be accessible through existing

network of people at an affordable cost. For example, Majority of the
rural population is still not able to access the internet due to the high
cost and non-availability of connections and bandwidth.

4. Differentiable: The segments should be different from each other

and may require different 4Ps and programs. For example, Life
Insurance Corporation of India needs separate marketing programs to
sell their insurance plans, unit plans, pension plans and group schemes

5. Actionable: The segments which a company wishes to pursue must

be actionable in the sense that there should be sufficient finance,
personnel, and capability to take them all.

Q. 6. Explain briefly what are the several processes

involved in new product development. (10 marks)

New Product Development

New products are essential for existing firms to keep the momentum
and for new firms they provide the differentiation. New product doesn’t
mean that it is absolutely new to the world. It may be a modification, or
offered in a new market, or differentiated from existing products.
Therefore it is necessary to understand the concept of new products.

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Meaning of New Products:

a. They are really innovative. For example, Google’s Orkut, a

networking site which revolutionized social networking. In this site
people can meet like minded people; they can form their own groups,
share photos, comments and many more.

b. They are very different from the others: Haier launches path-
breaking 4-Door Refrigerators first time in India

c. 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 or external sources. The internal
sources include employees of the organization and data collected from
the market. 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 ideas can be translated into concepts. In
an interview to Times of India, Mr. Ratan Tata, chairman TATA group
discussed how his idea saw many changes from the basic version. He
told that he wanted to develop car with scooter engine, plastic doors
etc… But when he unveiled the car, there were many changes in the
product. 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 basic appeal 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 rolled down, a four-wheel version of the auto-
rickshaw

Concept II: A car made by engineering plastics and new materials, and
using new technology like aerospace adhesives instead of welding.

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Concept III: Indigenous, in-house car which meets all the environment
standards

Stage 4 – Concept testing: At this stage concept is tested with the

group of target customers. If any changes are required in the concept
or the message it will be done during this stage. Also the effectiveness
is tested on a minor scale. If the concept meets the specific
requirements, then it will be accepted.

Stage 5 Marketing strategy development: The marketing strategy

development involves three parts. The first part focuses on target
market, sales, market share and profit goals. TATA’s initial business
plan consisted sales of 2 lakhs cars per annum. The second part
involves product price, distribution and marketing budget strategies.
TATA’s fixed Rs 1 lakhs as the car price, and finding self employed
persons who work like agent to distribute the cars. The final part
contains marketing mix strategy and profit goals.

Stage 6 – Business analysis: it is the analysis of sales, costs and

profits estimated for a new product and to 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 and using
the latest technology into the product.

Stage 8 – Test marketing: is the most crucial stage for the testing
product’s performance and its future in the market. There are certain
cases where product has failed in the test marketing and had to be
withdrawn.

– The product is introduced into the realistic market

– The 4P’s of marketing are tested.

– The cost of test marketing varies with the type of product.

Stage 9 – Commercialization: In this stage product is completely

placed in the open market and aggressive communication program
accompanied with promotion activities is carried out to support it.

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