Assignment Set- 2

Q1. Differentiate between Consumer market and business market. Business Marketing is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing, business marketing is also called business-tobusiness marketing, or B2B marketing, for short. (Note that while marketing to government entities shares some of the same dynamics of organizational marketing, B2G Marketing is meaningfully different. While consumer marketing is aimed at large demographic groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. According to Hutt and Speh (2001), most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals. While that advertising is limited, it often helps the business marketer set up successful sales calls.
List of important differences between Consumer market and business markets:

1. Organizational consumers purchase capital equipment, raw materials, semi finished goods, and other products for use in further production or operations or for resale to others, whereas final consumers usually acquire the finished items for personal, family, or household use. 2. Organizational consumers are likely to require exact product specifications. Final consumers more often buy on the basis of description, style, and color. 3. Organizational consumers often use multiple-buying responsibility, in which two or more employees formally participate in complex or expensive purchase decisions. Final consumers employ it less frequently and less formally. 4. Derived demand occurs for organizational consumers because the quantity of items they purchase is often based on the anticipated demand of their final consumers for specific finished goods and services; therefore, organizational consumers are less sensitive to price changes. As long as final consumers are willing to pay higher prices, organizational consumers will not object to price increases. 5. Demand is volatile due to the accelerator principle, whereby final consumer demand affects many levels of organizational consumers. 6. There are fewer organizational consumers than final consumers.

Q2. What is branding? Discuss the components of Brand Equity. Branding is a process involved in creating a unique name and image for a product in the consumers' mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers. Your brand strategy is how, what, where, when and to whom you plan on communicating and delivering on your brand messages. Where you advertise is part of your brand strategy. Your distribution channels are also part of your brand strategy. And what you communicate visually and verbally is part of your brand strategy, too "Brand Equity" is set of assets linked to a brands name and symbol that adds value to the product or service and/or that firms customer. Components of brand equity: 1. Brand loyalty 2. Brand awareness 3. Perceived quality 4. Brand associations Brand Loyalty Is consumer's commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, occasionally at least, to put aside their own desires in the interest of the brand. This will help organization to reduce the promotion cost. For example, many girls in India use only Ponds products, though competitors products like Fa, Spinz, Cuticura, and Mysore Sandal are present in the market and vice versa. Brand Awareness The number of customers exposed to the brand name. Higher the brand awareness, higher will be the brand equity. Organizations put all the effort in the introduction stage of the product to create awareness among the customers. For example, Xerox Company has huge brand awareness since photocopier machines were introduced by this company and even today photocopies are referred as Xerox copies. Perceived Quality

The customer perception about the actual quality level of the product. For example, when a customer purchases Levis jeans he knows that it indicates quality even though there are several cheaper brands of jeans available in the market. Brand Associations 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 Nike brand not just for sports shoes but also any accessory associated with sports. So, for him, Nike represents sports. Q3. What are the functions of marketing channels? FUNCTIONS OF MARKETING CHANNELS Marketing channels (Distribution channels) move goods and services for producers to consumers. It overcomes the major time, place and possession gaps the separate good and services from those who would use them. Manufacturers, wholesalers, and retailers as well another channels members exist in channel arrangements to perform one or more of the following generic functions: Information gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange. Promotion: Developing and spreading persuasive communications about an offer. Contact: Finding and communicating with prospective buyers. Matching: Shaping and fitting the offer to the buyers needs including activities such as manufacturing, grading, assembling and packaging. Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred. Others help to fulfill the completed transactions. Physical distribution: Transporting and storing goods. Financing: Acquiring and using funds to cover the costs of the channel work Risk taking: assuming the risks of carrying out the channel work Carrying of inventory, demand generation or selling, after sales services. In getting its goods to end users, a manufacturer must either assume all these functions or shift some or all of them to channel intermediaries. The

foregoing discussion underscores three important principles in the structure of marketing channels

Q4. Explain the different methods which allows a media planner to decide budget allocation Media vehicle selection, number of insertions and message structure depend on the budget allotted for the communication program. A popular channel may charge more for advertisement but organization gets better viewership. A newspaper having high circulation charges premium for the advertisement but all the organization may not have enough budgets to support such campaign. Hence marketer would like to decide what is the budget for the communication program? And how shall it be allotted optimally? There are four different methods on which a media planner decides the allocation of advertisement budget. 1. Affordable method: The method is used by small companies who dont have enough communication budgets. In this method company allots the fixed amount for the communication program. The advantage of this method is company can have better control over the spending on the communication. The disadvantage is if sales require higher communication effort, company is not in a position to allocate the budget. 2. Percentage of sales method: In this method company allots the budget on the basis of total sales forecasted. This is the simplest method. Marketer can have better control over the budget and also have flexibility to allocate the budget. 3. Competition method: The Company sets its promotion budget on the basis of competitors advertising effort. Here company closely monitors the developments of the competitors communication program and study the industry trends in communication budget prior to setting up communication budget. 4. Objective and task method: The procedure involved in estimating the advertisement budget by this method are First, Objectives are set for the communication programs. Second, identifying the task to be performed to

achieve the objective and third, estimating the cost of achieving these objectives. Q5. Define the term direct marketing Explain the different methods adopted for direct marketing. When the company or organization is involved in marketing activities (usually selling products) without the use of any intervening media or channel, then it is called as Direct Marketing. The company directly sells its products to the final consumer and the consumer is expected to respond immediately or at the earliest. Direct marketing is sometimes called as B2C marketing for example, direct factory shoe sale. Following are the methods of Direct Marketing: 1. Direct mail: It is the most common method used in direct marketing, it involves sending postal mails to the consumers address and consumers may be randomly chosen or specifically selected as targets. For example, credit card applications forms sent by banks, travel guides or manuals sent by tour operators, free trial packs of products sent by companies, subscriptions offers for magazines etc. 2. Telephone marketing: Telephone marketing is used to sell the product directly to consumer. The growth of BPOs in India fuelled the development of telephone marketing. In the case of BPOs, two types of verticals exist. They are inbound call center and outbound call center. In case of inbound call center, customer is given a toll free number for enquiry and executives try to sell the product to such customers. In out bound call center employees call the customers and sell the products. The expansion of Indian telecommunication industry and its cheapest tariffs in the world attracted domestic sellers to use this type of channel. 3. Catalogue marketing: According to Philip Kotler, catalogue marketing is direct marketing through print, video or electronic catalogues that are mailed to select customers, made available in stores or presented online. The growth of catalogue marketing in India is in a nascent stage. The notable example in this type of marketing worldwide is J.C. Penny. 4. Kiosk marketing: Organizations spreads the information and keep ordering machines called kiosks in the shopping malls and other places. For example, Ambi Pur a perfume company recently organized a kiosk related marketing campaign in the Nirmal life style Mumbai. Company used inflatable as shown in the pictures to attract the small boys. Parents who came along with their children stopped at Kiosk and got the information from the company. The objective of campaign was to create awareness about the product among the target customers. 5. Online marketing: Marketing the organizations product on the virtual medium using the company websites as selling point or ordering point for the consumers. Sometimes companies use e-mails to offer their products and make a sale to the prospective consumers or even existing consumers.

In this format buyers and sellers exchange the products on the internet. Organizations sell their products directly to consumers (called B2C), use trading networks or auction sites to reach new customers and serve current customers (called B2B) and encourage one customer to sell the product to the another customer (called C2C). Q6. Differentiate between International marketing and Domestic marketing. The important differences between International marketing and Domestic marketing are: Scope The scope of domestic marketing is limited and will eventually dry up. On the other end, international marketing has endless opportunities and scope. Benefits As is obvious, the benefits in domestic marketing are less than in international marketing. Furthermore, there is an added incentive of foreign currency that is important from the point of view of the home country as well. Sharing of technology Domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies. Political relations Domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result. Barriers In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs.

MB0046 Assignment Set- 1 Q-1. What is meant by marketing management? Explain the importance of marketing management. Ans:Market:Market is a place where buyers and sellers meets and goods and services sales and buys producers. Marketing:It is a total system of business activities design to plan promote and distribute want satisfying goods and services to target market. Marketing management:It can be define as a art and science of choosing target volume and getting keeping and growing customer to creating delivering and communicating superior customer value. Explanation:1) Science and art 2) Choosing target market

3) Getting, keeping, growing customer (4ps) 1) Marketing Management is both a Science as well as an Art:Marketing Management is both a science as well as an art. The science of marketing management provides certain general principles which can guide the managers in their professional effort. The Art of Marketing management consists in tackling every situation in an effective manner. As a Matter of fact, science should not be over-emphasized nor should art be discounted the science and the art of marketing management go together and are both mutually interdependent and complimentary. Marketing Management is thus a science as well as an art. It can be said that-"the art of Marketing management. 2) Choosing target Market:A marketer can rarely satisfy everyone in a market. Not everyone likes the same soft Drink, automobile, college, and movie. Therefore, marketers start with market segmentation. They identify and profile distinct groups of buyers who might prefer or require Varying products and marketing mixes. Market segments can be identified by examining Demographic, psychographic, and behavioral differences among buyers. The firm then decides which segments present the greatest opportunitythose needs the firm can meet in a superior fashion. 3) Marketing Mix Marketers use numerous tools to elicit the desired responses from their target markets. These tools constitute a marketing mix Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. As shown in Figure 1-3, McCarthy classified these tools into four broad groups that he called the four Ps of marketing: product, price, place, and promotion.

Figure 1-1 The Four P Components of the Marketing Mix

Importance of Marketing Management It would be difficult to imagine the world without marketing. But it may be equally difficult to appreciate the importance effective marketing plays most aspect of our lives. We take for granted the media that are largely supported by advertising. The vast assortment of goods distributed through stores close to your homes, and the ease with which we can make purchases. Lets consider for a moment how marketing plays a major role in the global economy , in the American socioeconomic system in any individual organization and in your life. 1) Globally:Profit and growth objectives are most likely to be achieved through a combination of domestic and international marketing rather then solely from domestic marketing.Until the late 1970s American firms had a large and secure domestic market. The only significant foreign competition was in selected industries, Such as agriculture, or for relatively narrow markets, such as luxury automobiles. But this change domestically through the 1980s as more foreign firms developed attractive products, honed their marketing expertise, and then successfully entered the US market. Imported products in some industries, such as office equipment, autos, apparel, watches and consumer electronics, have been very successful. As a result in recent years the U.S. has been importing more then its exports, creating large annual trade deficits. 2) Domestically:Aggressive, effective marketing practices have been largely responsible for the high standard of living in the United States. The efficiency of mass marketing extensive and rapid communication with customers through wide verity of media and a distribution system that makes products rapidly available- Combined with mass production brought the cost of many products within reach of most customers. a) Employment and costs:When we get an idea of significant marketing in the U.S. economy by looking at how

many of us are unemployed in same way in marketing and how much of what we spend covers the cost of marketing. Between one third and one fourth of the U.S. civilian labor force is engaged in marketing activities. b) Creating Utility:A customer purchases a product because it provides satisfaction. The Want satisfying power of a product is called its utility and it becomes in many forms. It is through marketing that much of a products utility is created. 3) Organizationally:Marketing consideration should be integral part of all short and long range planning in any company. Heres why: The success of any business comes from satisfying the wants of its customers which is the social and economic basis for the existence of all organizations. Although many activities are essential to a companys growth , marketing is the only one that produce revenue directly. a) Services marketing:The U.S has gone through from primarily manufacturing economy to the worlds first service economy. As opposed to goods, services are activities that are the object of a transaction. For example transportation, communication entertainment, medical care, financial services, education and repair services account of over two third of the nations gross domestic product. b) Not for profit marketers:During 1980s and early 1990s many not for profit organizations realized thy needed effective marketing programs to make up for shrinking government subsidies a decrease in charitable contribution and other unfavorable economic. Not for profit organizations need to improve their image and gain greater acceptance among donors, government agencies, news, media, and consumers all of which collectively determine an organizations success. 4) Personally:Consider how many marketers view you as a part of their market. With people like you in mind, firms such as Nike, VSA, and Microsoft have designed products, set prices, created advertisement and chosen the best methods of marketing their product available to customers. In response customers watches TV. With its commercials buy various articles over internet and in stores etc. Marketing occupies a large part in our daily life. Studying marketing will make you better informed. You will have a better idea for why some firms are successful and other seemingly run business fail. More especially you will discover how firms go about deciding what products to offer, and what price is to charge. Marketing will help you understand the many forms of promotion and how they are used to inform and persuade customers. And it will help you the modern miracle of efficient distribution that make product available when and where buyers want them. Q-2. What is brand equity? Explain in brief.

Ans:Brand equity permits companies to charge premium prices for products and services, contributing to increased profit margins. Brand equity is therefore a valuable asset that companies invest huge amounts of money to develop. Brand equity is a phrase used in the marketing industry which describe the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well known names.[1][2][3][4] Another word for "brand equity" is "brand value". Some marketing researchers have concluded that brands are one of the most valuable assets a company has,[5] as brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one.[6] Elements that can be included in the valuation of brand equity include (but not limited to): changing market share, profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers' perceptions of quality and other relevant brand values. Consumers' knowledge about a brand also governs how manufacturers and advertisers market the brand.[7][8] Brand equity is created through strategic investments in communication channels and market education and appreciates through economic growth in profit margins, market share, prestige value, and critical associations[disambiguation needed]. Generally, these strategic investments appreciate over time to deliver a return on investment. This is directly related to marketing ROI. Brand equity can also appreciate without strategic direction. A Stockholm University study in 2011 documents the case of Jerusalem's city brand.[9] The city organically developed a brand, which experienced tremendous brand equity appreciation over the course of centuries through non-strategic activities. A booming tourism industry in Jerusalem has been the most evident indicator of a strong ROI. Brand equity is strategically crucial, but famously difficult to quantify. Many experts have developed tools to analyze this asset, but there is no universally accepted way to measure it. As one of the serial challenges that marketing professionals and academics find with the concept of brand equity, the disconnect between quantitative and qualitative equity values is difficult to reconcile. Quantitative brand equity includes numerical values such as profit margins and market share, but fails to capture qualitative elements such as prestige and associations of interest. Overall, most marketing practitioners take a more qualitative approach to brand equity because of this challenge. In a survey of nearly 200 senior marketing managers, only 26 percent responded that they found the "brand equity" metric very useful Purpose The purpose of brand equity metrics is to measure the value of a brand. A brand encompasses the name, logo, image, and perceptions that identify a product, service, or provider in the minds of customers. It takes shape in advertising, packaging, and other marketing communications, and becomes a focus of the relationship with consumers. In time, a brand comes to embody a promise about the goods it identifiesa promise about quality, performance, or other dimensions of value, which can influence consumers' choices among

competing products. When consumers trust a brand and find it relevant, they may select the offerings associated with that brand over those of competitors, even at a premium price. When a brand's promise extends beyond a particular product, its owner may leverage it to enter new markets. For all these reasons, a brand can hold tremendous value, which is known as brand equity.[10] Construction There are many ways to measure a brand. Some measurements approaches are at the firm level, some at the product level, and still others are at the consumer level. Firm Level: Firm level approaches measure the brand as a financial asset. In short, a calculation is made regarding how much the brand is worth as an intangible asset. For example, if you were to take the value of the firm, as derived by its market capitalizationand then subtract tangible assets and "measurable" intangible assetsthe residual would be the brand equity.[5] One high-profile firm level approach is by the consulting firm Interbrand. To do its calculation, Interbrand estimates brand value on the basis of projected profits discounted to a present value. The discount rate is a subjective rate determined by Interbrand and Wall Street equity specialists and reflects the risk profile, market leadership, stability and global reach of the brand.[11] Product Level: The classic product level brand measurement example is to compare the price of a no-name or private label product to an "equivalent" branded product. The difference in price, assuming all things equal, is due to the brand.[12] More recently a revenue premium approach has been advocated.[4] Consumer Level: This approach seeks to map the mind of the consumer to find out what associations with the brand the consumer has. This approach seeks to measure the awareness (recall and recognition) and brand image (the overall associations that the brand has). Free association tests and projective techniques are commonly used to uncover the tangible and intangible attributes, attitudes, and intentions about a brand.[7] Brands with high levels of awareness and strong, favorable and unique associations are high equity brands.[7] All of these calculations are, at best, approximations. A more complete understanding of the brand can occur if multiple measures are used. Positive brand equity vs. negative brand equity Brand equity is the positive effect of the brand on the difference between the prices that the consumer accepts to pay when the brand known compared to the value of the benefit received. There are two schools of thought regarding the existence of negative brand equity. One perspective states brand equity cannot be negative, hypothesizing only positive brand equity is created by marketing activities such as advertising, PR, and promotion. A second perspective is that negative equity can exist, due to catastrophic events to the brand, such as a wide product recall or continued negative press attention (Blackwater or Halliburton, for example). Colloquially, the term "negative brand equity" may be used to describe a product or service where a brand has a negligible effect on a product level when compared to a no-name or private label product. Family branding vs. individual branding strategies

The greater a company's brand equity, the greater the probability that the company will use a family branding strategy rather than an individual branding strategy. This is because family branding allows them to leverage the equity accumulated in the core brand. Aspects of brand equity include: brand loyalty, awareness, association[13] and perception of quality. Q-3. Briefly explain the major external and uncontrollable factors that influence an organization decision making, performance and strategies Ans:-

Major external and uncontrollable factors that influence an organisation's decision making, and affect its performance and strategies, factors outside and enterprises control. These factors include the economic, demographics, legal, political, and social conditions, technological changes, and natural forces. 1. Social and demographic environment is concerned with society as a whole; it covers health, media, education, minorities, women, organised labour, legal system and demographics. The biggest challenge to firms is the society's changing demands. 1.1 Health As defined by World Health Organization (WHO), it is a "State of complete physical, mental, and social well being, and not merely the absence of disease or infirmity". Health is a dynamic condition resulting from a body's constant adjustment and adaptation in response to stresses and changes in the environment for maintaining an inner equilibrium called homeostasis. My aim is not to discuss health but the impact it has on organisations. Example on how changes in social environment can affect a business Extract from bbccouk 'It's our human right to smoke' By Tom Warren BBC News, Birmingham

Takings at Stechford Working Men's Club have slumped by 20,000 since the smoking ban came into force. Just before July last year members at the long established Birmingham club began working hard to improve the venue to try to retain trade from smokers. They painted the walls, laid new carpets and installed a partially covered smoking shelter equipped with heaters. But since new smoking laws came into force across England, smokers have deserted the club in droves, preferring to light up at home. 'Desperate' situation Treasurer Ray Guest, who has been a member for 23 years, said nothing had prepared the club for the huge drop in trade which he blames directly on the ban ban. 1.2 Media Communication channels through which news, entertainment, education, data, or promotional messages are disseminated. Media includes every broadcasting and narrowcasting medium such as newspapers, magazines, TV, radio, billboards, direct mail, telephone, fax, and internet. Media usage Media (the plural of "medium") is a term referring to those organized means of dissemination of fact, opinion, entertainment, and other information, such as newspapers, magazines, out-ofhome advertising, cinema films, radio, television, the World Wide Web, books, CDs, DVDs, videocassettes, video games and other forms of publishing. Literacy The traditional definition of literacy is considered to be the ability to read and write, (basic literacy) or the ability to use language to read, write, listen, and speak. In modern contexts, is more of a (functional literacy), the word refers to reading and writing at a level adequate for communication, or at a level that lets one understand and communicate ideas in a literate society, so as to take part in that society. The United Nations Educational, Scientific and Cultural Organization (UNESCO) has drafted the following definition: "Literacy is the ability to identify, understand, interpret, create, communicate and compute, using printed and written materials associated with varying contexts. Literacy involves a continuous learning to enable an individual to achieve his or her goals, to develop his or her knowledge and potential, and to participate fully in the wider society". Basically, someone who is well educated in one language and go to work at another country, cant communicate in the language of a host county, is functionally illiterate. For example In UK, there are many educated and experienced people from Eastern European countries like Poland, Czech Republic but cant speak English, as a result they end up doing menial jobs. Knowledge capital The introduction of the term is explained and justified by the unique characteristics of knowledge. Unlike physical labour (and the other factors of production), knowledge is:

 Expandable and self generating with use: as doctors get more experience; their knowledge base will increase, as will their endowment of human capital. The economics of scarcity is replaced by the economics of self generation. Transportable and shareable: knowledge is easily moved and shared. This transfer does not prevent its use by the original holder. However, the transfer of knowledge may reduce its scarcity value to its original possessor. Human capital refers to the stock of productive skills and technical knowledge embodied in labour. Labour competences are what make a nation more competitive and innovative. Q-4. Discuss the potential benefits associated with MIS. Ans:-According to Kenneth C. Laudon and Jane Price Laudon in their book Management Information Systems: A Contemporary Perspective, an information system is "a set of procedures that collects (or retrieves), processes, stores, and disseminates information to support decision making and control." In most cases, information systems are formal, computerbased systems that play an integral role in organizations. Although information systems are computerbased, it is important to note that any old computer or software program is not necessarily an information system. "Electronic computers and related software programs are the technical foundation, the tools and materials, of modern information systems, " Laudon and Laudon wrote. "Understanding information systems, however, requires one to understand the problems they are designed to solve, the architectural and design solutions, and the organizational processes that lead to these solutions." An MIS provides the following advantages. 1. It Facilitates planning : MIS improves the quality of plants by providing relevant information for sound decision making . Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations. 2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts. 3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures. 4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization . 5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance . The used computers has increased the data processing and storage capabilities and reduced the cost . 6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information .

Q-5. Write short notes on Segmentation. Ans:Segmentation of market must exhibit some characteristics that are as follows: 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 do not specifies how many of the migrated employees are educated and if educated how many are there in white color jobs. If a company wants to target white color employees who are migrated to particular city, will not able to measure due to non availability of data. 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 to the lowest level in the world. 3.Accessible: The segment should be accessible through existing network of people at a affordable cost. For example, Majority of the rural population still not able to access the internet due to high cost and unavailability of connections and bandwidth. 4.Differentiable: The segments are different from each other and 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 the various stages involved in new product development Ans:-New Product Development New products are essential for existing firms to keep the momentum and for new firms they provide the differentiation. New product doesnt 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. Meaning of New Products: a. They are really innovative. For example, Googles 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. 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. TATAs initial business plan consisted sales of 2 lakhs cars per annum. The second part involves product price, distribution and marketing budget strategies. TATAs 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 products 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 4Ps 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.