Master of Business Administration – MBA Semester 2

MB0046 – Marketing Management - 4 Credits

(Book ID: B1135)
Assignment Set- 1

Q.1 a. Explain the different micro-environmental forces with examples. (6 marks)

b. Mention the different ad appeals with suitable examples. (4 marks)

Answer: (a) Marketing department alone cannot satisfy all the needs of customer. Therefore it is
essential to integrate the functions of suppliers, publics, internal departments and intermediaries in
creating the value to the customer. These forces are known as organization’s micro environment.

Microenvironment: The forces which are very close to company and have impact on value creation and
customer service.

Forces in the micro environment

A. 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.
B. Intermediaries

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.

C. 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.

D. 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 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.

E. 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.

F. Customers

A company may sell their products directly to the customer or use marketing intermediaries to reach
them. Direct or indirect marketing 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) Advertising intends to promote the sales of a product or service and also to inform the masses about
the highlights of the product or the service features. It is an efficient means of communicating to the
world, the value of the product or the service. Advertising utilizes different media to reach out to the
masses and uses different types of appeals to connect to the customers across the globe. The various
types of advertising appeals harness different means of highlighting the features of a product and
drawing the attention of the masses towards it. Here is an overview of the different types of advertising
appeals.

 Institutional advertising: The objectives of advertisements are to enhance the image of the
company rather than selling the product. For example, Wipro uses ‘Applying Thought’ for all its
businesses thus promoting the company.
 Product advertising: The objective of this type of advertisement is to communicate about the
product attributes to the target customer. Product advertising is further classified into three
types. They are

1. Pioneer advertising: This mode of advertisements is used to create awareness and demand in the
initial stage of the product life cycle. For example, TATA Docomo advertised initially as to why a person
should pay for the unused minutes when talks may last for seconds.

2. Competitive advertisements: This type of advertisement is used to highlight the differentiation of

organization’s product. This method is usually used in the growth phase of product life cycle. For
example, Detergents like Ariel, Surf and Tide constantly differentiate their product features from each
other.

3. Comparative advertisements: This type of advertisements highlight on the comparing company’s

communication message with competitors product information. This method is used when the
competition is very high or sales are sluggish. For example, soft drinks like Pepsi and Coca-cola at some
point were involved in comparative advertising.

Q.2 What are the different market entry strategies if a company wants to enter international
markets? (10 marks)

Answer: Companies can enter in different market by adopting any 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 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
knowhow 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)
b. Define Customer Relationship Management. (2 marks)

Answer: (a) 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

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.

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 pricing

e. Communicating the product differentiation (or USP) to consumers.

f. Improving supply chain efficiency.

g. Defend the market share

h. Industry experiences consolidation.

For example, Airtel in its advertising is clearly stating its subscriber base as 1, 10,000 indicating that it
has entered into a mature stage.

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.

(b) Customer Relationship Management: 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.”

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)
b. As a consumer, what are the steps you will undertake before you decide to buy a car? (5 marks)

Answer: (a) 1. Use a Sales Test to Help Avoid Common Hiring Mistakes:
A income hiring mistake can cost an employer up to 0,000 or more. Many employers are deluged with
income resumes, but have no way of knowing who can really sell. So, they often tend to hire a income
mortal with whom they feel comfortable, who is like them, who looks good, or has industry knowledge.
None of that necessarily means that the income mortal can actually sell. The well-rounded income
assessment tests described below can reduce subjectivity and guesswork, and help you make more
neutral hiring decisions
2. EEOC Guidelines for Sales Assessment Testing:
The Equal Employment Opportunity Commission (EEOC) guidelines recommend that if you use a income
assessment test, the same income assessment test must be administered to all of the applicants. The
income assessment test should be administered to all applicants at the same point in the selection
process. An employer with non-standardized income assessment testing procedures might open itself
up to potential litigation:
Example 1: You tested just some job applicants with a income assessment test, but did not test the rest.
Technically, anyone from either group can possibly claim discrimination if that mortal did not get the
job. What is the solution? Give a potent but affordable Sales Assessment Test (Screening Sales Test) to
apiece job applicant. The results of the Screening Test will help you shortlist the top candidates for an
interview. Then give apiece of the shortlisted candidates a Final Test on the day of the interview.
Example 2: Applicant "A" takes a income assessment test at the time of the first interview and is not
hired. Applicant "B" takes a income assessment test at the time of the second interview and gets hired
for the same job. Could individual "B" in the course of the two interviews have gained information to
help answer the income test questions? Could that additional information have influenced the income
test scores? Possibly! So, individual "A" can claim to have been treated unfairly, possibly opening up the
company to potential litigation. What is the solution? Standardize your income testing process and
administer the income assessment test to all applicants at the same point in the selection process.
3. Choosing the Ideal Sales Assessment Test:
The old Sales Personality Tests or Sales Psychology Tests are usually not good predictors of income
potential. There is a lot more to selling than just psychology and personality. Select a income assessment
test which is:
a. Accurate / Relevant: The Sales Test must go above and beyond the mundane psychological and
personality tests by doing a well rounded income assessment. The JOY Tests ™ of Total Sales Capability
™ are designed to evaluate over Fifty (50) sub-competencies and desirable traits, grouped into 10 main
Sections.
b. Efficient: Absolutely self-contained system that you can use 24/7/365 at your convenience, without
having to call the company apiece time you wish to test a new job applicant.
c. Simple to Interpret: The income assessment test's Report Cards must be clear, simple to understand,
and preferably just 1-page long (some can be unwieldy - up to 20+ pages per candidate - who has the
time?).
d. Scored Instantly: The job applicants' Report Cards (Sales Test scores) should be acquirable online
immediately after they complete a income test (no inactivity for the Sales Test Reports to arrive by fax
or snail mail).
e. Robust: The income assessment test should contain built-in safeguards against guessing, random
answering and candidate substitution. Not all income tests are created equal, so choose wisely.
This Sales Assessment Testing company offers income assessment tests for all three different levels of
Business Development Professionals - Sales Person (Sales Executive), Sales Manager, and VP of Sales &
Marketing.
4. Full Service Sales Assessment Testing and Sales Team Recruiting:
Businesses who want to hire good income people are often unsure where to start. They might not even
know how to create a compelling employment ad to attract good applicants for a particular income job.
Or, they might be deluged with thousands of income resumes in response to their online employment
ads, but might not have enough time or human resources to sift through all of them. Finally, when it is
time to interview the job applicants, the employer might not even know what questions to ask. The "Full
Serve" income team recruitment packages from Dan Joy, Inc., can help with all of the above.

(b) I will do the following before buying a car –

a) Check the product quality.

b) Check the product sustainability.
c) Check the product price.
d) Check the service centre availability.
e) Maintenance cost.

Q. 5 a. What are the features of Business markets? How is it different from consumer markets? (5
marks)
b. List out the 5 important requisites of an effective segmentation by giving suitable examples. (5
marks)

Answer: (a) 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.

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) Difference between Consumer and Business Buyer Market:

Q. 6. Explain briefly what are the several processes involved in new product development. (10 marks)

Answer: 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.

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.

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.

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.

– Sona Koyo and Rane Group came up with hollow steering shafts, saving cost and cutting weight.
Sharda Motors and Emcon designed the exhaust system and MRF tweaked the tyres to bear extra
weight on rear wheels.

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.
 Master of Business Administration – MBA Semester 2
MB0046 – Marketing Management - 4 Credits
(Book ID: B1135)
Assignment Set- 2

Q.1 Highlight the importance of Distribution channel and marketing intermediaries in carrying out the
marketing function. (10 marks)

Answer: Marketers should consider various factors before deciding the particular type of channel. It
may be organizational or competitive factors. The type of goods to be transported and stored will decide
the length and intensity of channel. To decide on the particular channels, marketer will have to take into
account the following factors.

1. Understanding the customer profile: Purchasing habits differ from individual to individual. Individuals
who face shortage of time would like to purchase on the net (direct channel) and those who have
abundant time would like to go through the shopping experience. Some of them would like to have
variety of goods, while others want unique or specialized products. Hence marketers should understand
who are his customers? How do they purchase and how often they purchase? For example, customers
don’t like to travel half a kilometer to purchase a shampoo sachet, but they don’t mind travelling two
kilometers while purchasing durable goods.

2. Determine the objectives on which channel is to be developed.

a. Reach: Company would like to make the goods available in most of the retail outlets. So it, will adopt
intensive distribution channel.

b. Profitability: Company wants to reduce the cost in the channels and enhance their profitability. It will
restructure the channel to optimum level so that it can reduce the cost and increase the profit.

c. Differentiation: Company positions their products differently. When most of the industry players
follow conventional system, company goes with new format of channels. For example, all computer
manufacturers were adopting dealer-retailer channel to sell their products, but Dell started selling its
product on the internet.

3. Identify type of channel members: Once the objectives are set on the basis of company’s policies, it
will analyze which types of channels are most suitable. Merchants, agents and resellers are some
intermediaries involved in the distribution. Merchants are those who buy the product, take title and
resell the merchandise. Agents will find the customers, negotiate with them, but do not take the title of
the product. Facilitators are the people who aid the distribution but do not negotiate or take the title of
the product.

4. Determining intensity of distribution: Intensity of distribution means how many middlemen will be
used at the wholesale and retail levels in a particular territory. If the number of intermediaries is more,
then the cost of the channel will increase. However, if the number of intermediaries is less, then
company will not be able to meet all target customers. Therefore company should adopt optimum
number of intermediaries. On the basis of how many intermediaries are required, company can adopt
any one of the following strategies.

a. Intensive distribution: A strategy in which company stocks goods in more number of outlets. The
intention is to make the goods available near to the customer. For example, you can find Parle-G glucose
biscuits available in almost all the retail outlets in rural and urban areas.

b. Selective distribution: A strategy in which company stocks goods in limited number of retail outlets.
For example, televisions are sold only in selected retail outlets. TVs cannot be sold like toothpaste.
Onida TVs are available in electronic retail shops like Viveks, Girias, Next, E-zone etc…

c. Exclusive distribution: In this type of channel format, marketer gives only a limited number of dealers
the exclusive right to distribute its products in their territories. For example, a Kaya skin care solution of
Marico is marketed through exclusive distribution.

5. Assigning the responsibilities to channel members. Company should define the territory in which the
channel member should operate, at what price he should sell, services he should perform, and how he
should sell.

6. Selecting the criteria to evaluate the channel member: Company may have different types of channel
alternatives. It would like to choose any one of the alternatives, which meets its objectives. Channels
can be evaluated in the design phase by the method called SCPCA.

a. Sales(S): The ability of each channel member to generate the sales for company in a given period.

b. Cost(C): How much cost each channel alternative incurs? Which one of the alternatives provides the
optimum solution?

c. Profitability (P): Various channel alternatives available to the company and their profitability shall be
compared. Channel with better profitability shall be selected.

d. Control (C): Every company would like to have better control over its channel members. Alternative
channels can be evaluated on the basis of how much control each channel member desires. And how
much control the company is willing to provide.

e. Adaptability (A): Marketing is a dynamic world. Competition exerts pressure on companies to relook
at their practices and supply chain continuously. The channel alternatives should be flexible enough to
meet the changing requirements. Whichever channel alternative meets such objectives shall be
selected.

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.

Q.2 a. Explain the different product mix pricing strategies. (6 marks)

b. Give a note on marketing concepts. (4 marks)

Answer: (a) 1. Product Line pricing: Strategy of setting the price for entire product line. Marketer
differentiates the price according to the range of products, i.e. suppose the company is having three
products in low, middle and high end segment and prices the three products say at Rs 10 Rs 20 and
Rs 30 respectively.

In the above example of Nokia mobile phones Nokia 1110 is priced

@ Rs 1349, Nokia 7610 priced @ Rs 6249 and Nokia E90 priced
@ Rs 34599. All the three products cater to the different segments – low, middle and high income group
respectively. The three levels of differentiation create three price points in the mind of consumer. The
task of marketer is to establish the perceived quality among the three segments. If the customers do not
find much difference between the three brands, he/she may opt for low end products.

2. Optional Product pricing: this strategy is used to set the price of optional or accessory products along
with a main product.

Body cover Slide Molding Rear underbody Roof End

Rs 1521 Rs 1123 Rs 8883 Rs 6396
Maruti Suzuki will not add above accessories to its product Swift but all these are optional. Customer has
to pay different prices as mentioned in the picture for different products. Organizations separate these
products from main product so that customer should not perceive products are costly. Once the
customer comes to the show room, organization explains the advantages of buying these accessory
products.

3. Captive product pricing: Setting a price for a product that must be used along with a main product. For
example, Gillette sells low priced razors but make money on the replacement cartridges.

4. By-product pricing: It is determining the price for by-products in order to make the main product’s
price more attractive. For example, L.T. Overseas, manufacturers of Dawaat basmati rice, found that
processing of rice results in two by-products i.e. rice husk and rice brain oil. If the company sells husk
and brain oil to other consumers, then company is adopting by-product pricing.

5. Product bundle pricing: It is offering companies several products together as a bundle at the reduced
price. This strategy helps companies to generate more volume, get rid of the unused products and
attract the price conscious consumer. This also helps in locking the customer from purchasing the
competitors’ products. For example, Anchor toothpaste and brush are offered together at lower prices.

(b) Marketing Concept

The marketing concept is the idea that a firm should seek to evaluate market opportunities before
production, assess potential demand for goods, determine the product characteristics desired by the
consumers, predict the prices consumers are willing to pay and then supply goods corresponding to the
needs and wants of target markets. Adherence to marketing concept means the firm conceives and
develops products to satisfy consumer wants. In international marketing this means the integration of
the international side of the company’s business with all aspects of its operations and the willingness to
create new products and adapt existing products to satisfy the needs of world markets. Products may
have to be adapted to suit the tastes, needs and other characteristics of consumers in specific regions,
rather than to assume that an item which sells well in one country will be equally successful elsewhere.

Q.3 a. What are the features of business markets? (5 marks)

b. Write a short note on product line and product mix. (5 marks)

Answer: (a) 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.

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) Product line: The group of related products which uses same marketing efforts to reach the
consumer.

The product line identifies profitable and unprofitable products and helps in allocation of resources
according to that. The product line understanding helps the marketer to take line extension, line pruning
and line filling strategies of the company.
Pidilite Industries, the adhesives and chemical company, have the following group of related products
(or product lines) in consumer and business markets.

Consumer market.

1. Adhesives and sealants.

2. Art materials and stationeries.

3. Construction chemicals.

4. Automotive chemicals

5. Fabric care

Business market

1. Industrial adhesives.

2. Textile chemicals.

3. Organic pigment powders.

4. Industrial resins and

5. Leather chemicals.

Product mix: The number of product lines and items offered by marketer to the consumers

A company’s product mix has four different dimensions. They are product mix width, product mix
length, product mix depth and product mix consistency.

Product mix width: The total number of product lines that company offers to the consumers.

Product mix length: The total number of items that company carries within its product line.

Product mix consistency: If company’s product lines usage, production and marketing are related, then
product mix is consistent, else it is unrelated.
Q.4. a. Select any deodorant brand and evaluate its positioning strengths or weakness in terms of
attributes, benefits, values, brand name and brand equity. (6 marks)
b. You are a research expert in the field of marketing footwear products. What are the various
research approaches you would consider before making a consumer survey regarding footwear? (4
marks)

Answer: (a)

Brand Name
A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct
from those of other sellers’. The legal term for brand is trademark. A brand may identify one item, a
family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade
name

Brand name: Axe

Axe was launched in France in 1983 by Unilever. It was inspired by another of Unilever's brands,
Impulse. Unilever were keen to capitalize on Axe's French success and the rest of Europe from 1985
onwards, later introducing the other products in the range. Unilever were unable to use the name Axe in
the United Kingdom and Ireland due to trademark problems so it was launched as Lynx
Although Axe's lead product is the fragranced aerosol deodorant body spray, other formats of the brand
exist. Within underarm care the following are available: deodorant aerosol body spray, deodorant stick,
deodorant roll-on, anti-perspirant aerosol spray (called Axe Dry), and anti-perspirant stick (also called
Axe Dry).

The attribute of the brand that customer associates with his/ her belief. A person may associate the
brand for power, strength or protectiveness. For example, a customer may associate Axe brand not just
for perfumes but also any accessory associated with perfumes such as Shampoos etc. So, for him, Axe
represents perfume.

Brand Equity
Brand equity is set of assets linked to a brand‘s name and symbol that adds value to the product or
service and/or that firm’s customer.

Components of brand equity:

1. Brand loyalty: From its launch (Axe), the yearly fragrance variant has played a key part in the success
of the brand by offering something new each year.
2. Brand awareness: The type of fragrance (Axe) variants have evolved over time. From 1983 until about
1989, the variant names were descriptions of the fragrances and included Musk, Spice, Amber, Marine,
and Oriental.
3. Perceived quality
4. Brand associations: Axe also launches limited edition variants from time to time that may be on sale
for a few months or over a year.

(b) Below are the various research approaches that need to be considered before making a consumer
survey regarding footwear products:

1)Observational Research – Fresh data can be collected by observing the situation and the people in the
situation.
2)Focus Group Research is a method of discussion in which a team of eight to twelve persons invited for
a group discussion in presence of a skilled moderator to discuss a product, service, a firm or any
marketing related activity. The proceedings are observed and recorded on videotape and subsequently
analyzed to understand consumer attitudes, beliefs and behavior.

3)Survey Research – This is the most common of the approaches wherein surveys are undertaken with
the help of a questionnaire to learn about people’s knowledge, beliefs and preferences.

4)Behavioral Research – Customer’s actual behavior in terms of actual purchases reflect their
references and are more reliable than responses provided in surveys which are memory based.

5) Experimental Research – The most scientific method of research is experimental research which tries
to capture cause and affect relationships.

Q. 5 a. What advice would you give a company that has facing bad publicity? What steps would you
tell the company to improve its reputation? (7 marks)
b. As a brand manager, what are the ways in which you will select a brand name for your product-
watches and how will you position it in the market? (3 marks)

Answer: (a) providing people with the accurate information and giving clarifications if needed either
through press release, media interviews, websites, public messages, advertising etc.

· Company’s top management or spokesperson can give a public statement or comment in the various
media.

· Improvising Public Relations and designing good publicity message to erase the effects of bad publicity.

· Continuing to provide quality products and services to the consumers.

· Involving in community work or environmental protection campaigns or any such activity for a good
cause.

(b) Brand provides the image to the product. Brand manager should be careful in selecting a proper
name for the brand for watches.
Brand Name: Titan
There are six suggestions from Philip Kotler to create a successful brand name. They are
1. It should suggest something about the product benefits and qualities; e.g. Titan
2. It should be easy to pronounce, recognize, and remember
3. The brand name should be distinctive
4. It should be extendable
5. The name should be easily translated into a foreign language
6. It should be capable of registration and legal protection e.g. Titan is a registered brand and other
brands cannot compete with it using any similar sounding name.
Brand managers have four options of sponsoring the brand. They are
1. Manufacturer brand
2. Private brand
3. Licensing
4. Co- branding

Q. 6 a. What is MIS? What are its benefits? (4 marks)

b. How is rural marketing different from urban markets? (6 marks)

Answer: (a) A Marketing Information System is a set of procedures to collect, analyze and distribute
accurate, prompt and appropriate information to different levels of marketing decision makers.

Philip Kotler defines MIS as “a system that consists of people, equipment and procedures to gather, sort,
analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers.

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 the company,
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 market
environment both inside and outside the organization. In the process, it collects lot of data and stores in
the form of a database which is maintained in an organized manner. Marketers classify and analyze this
data from the database as needed.

Benefits of MIS

Various benefits of having a MIS and resultant flow of marketing information are given below:

1. It allows marketing managers to carry out their analysis, planning implementation and control
responsibilities more effectively.

2. It ensures effective tapping of marketing opportunities and enables the company to develop effective
safeguard against emerging marketing threats.

3. It provides marketing intelligence to the firm and helps in early spotting of changing trends.

4. It helps the firm adapt its products and services to the needs and tastes of the customers.

5. By providing quality marketing information to the decision maker, MIS helps in improving the quality
of decision making.
(b) This has to be understood in the light of the 4Ps or 7Ps of marketing. Imagine that you are trying to
establish a Coffee Café Day Outlet in a remote village in Maharashtra. Will that be viable proposition?
Yet there may be consumers for coffee in the rural sector too. The offering has to suit the sector.
Similarly an ice cream parlor may not be a workable idea in a village or a cluster of villages if there is no
electricity connection there. The ice cream cart vendor is a better idea. Keeping these situations in
perspective, one can draw some inferences why rural marketing is different.

1. Accessibility and mobility: This applies both for the supplier and the consumer. The movement of the
people is restricted by the lack of surface roads and the mode of transport. There are restrictions by way
of visibility during night.

2. Average income level of consumers: The average wage earners are characterized by lower per capita
income and disposable income in comparison to the urban.

3. Geographical distances: The living quarters are separated more than they are in the urban areas. The
cluster of villages is also segregated by distances.

4. Literacy level: On an average the literacy level in the rural sector is lower in comparison to the urban
sector.