Master of Business Administration- MBA Semester 2

MB0046 Marketing Management

Assignment Set 1
Q1. What is meant by marketing management? Explain the importance of marketing management. The delivery of goods and services from producers to their ultimate consumers or users includes many different activities. These different activities are known as marketing functions. Different thinkers have described these functions in different ways. Some of the most important functions of marketing are briefly discussed below: Marketing Research and Information Management: Marketers need to take decisions scientifically. Marketing research function is concerned with gathering, analyzing and interpreting data in a systematic and scientific manner. The types of market information could be analysis of market size and characteristics, consumer tastes and preferences and changes in them from time to time, channels of distribution and communication and their effectiveness, economic, social, political and technological environment and changes therein. A company can procure such information from specialized market research agencies, government or can decide to collect themselves. Advertising and Sales Promotion: Advertising is a mass media tool used to inform, persuade or remind customers about products or services. It is an impersonal form of communication targeted at a chosen group through paid space or time. Sales Promotion is a short-term incentive given to customers or intermediaries to promote sales. It supplements advertising and personal selling and can be used at the time of launching a new product or even during its maturity period. Product Planning and Management: A Marketer should identify the needs and wants of consumers, develop suitable products / services and make them available. Marketer is also required to maintain the product and its variations in size, weight, package and price range according to the changing needs and requirements of his customers. Information available through Market Research helps product management in taking appropriate decisions while planning the marketing efforts. Selling: This function of marketing is concerned with transferring of products to the customer. An important part of this function is organizing sales force and managing their activities. Sales force management includes recruitment, training, supervision, compensation and evaluation of salesmen. They need to be assigned targets and territories where they can operate. The salesmen interact with prospective purchasers face-to-face in order to sell the goods. The purchaser may be end customer or an intermediary, such as a retailer or a dealer. Physical Distribution: Moving and handling of products from factory to consumers come under this function. Order processing, inventory, management, warehousing and transportation are the key activities in the physical distribution system.

 Pricing: This is perhaps the most important decision taken by marketer, as it is the only revenue fetching function and success and failure of the product may depend upon this decision. Therefore, the decision regarding how much to charge should be taken such that the price is acceptable to the prospective buyers and at the same time fetches profits for the company. While deciding on the price, the factors to be considered are competition, competitive prices, company s marketing policy, government policy, and the buying capacity of target market etc. Q2. What is brand equity? Explain in brief. 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: 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 behaviours 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 necessary associated with sports. So, for him, Nike represents sports. Q3. 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. 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. 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 '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. 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, outofhome 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.

Q4. 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, computer based systems that play an integral role in organizations. Although information systems are computer based, 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 . Q5. Write short notes on Segmentation. Segmentation is the first step in applying the market strategy. Marketing Segmentation is the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment. Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle. Four basic factors that affect market segmentation are (1) clear identification of the segment, (2) measurability of its effective size, (3) its accessibility through promotional efforts, and (4) its appropriateness to the policies and resources of the company. The four basic market segmentation-strategies are based on (a) behavioral (b) demographic, (c) psychographic, and (d) geographical differences. Benefits of Segmentation in marketing (1) Understanding the needs of customer (2) To adopt better positioning strategies (3) Proper allocation of marketing budget (4) Helps in preparing a better competitive strategy (5) Providing guidelines in preparing media plan of the country (6) Different offerings in different segments enhance the sales (7) Customer gets more customized product (8) Helps company to identify niche markets (9) Provides opportunities to expand market (10) Encourages innovation Q6. Explain the various stages involved in new product development In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share STAGES ARE:

1. Idea Generation is often called the "fuzzy front end" of the NPD process Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight in to new product lines or product features. Lots of ideas are being generated about the new product. Out of these ideas many ideas are being implemented. The ideas use to generate in many forms and their generating places are also various. Many reasons are responsible for generation of an idea. Idea Generation or Brainstorming of new product, service, or store concepts idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step). 2. Idea Screening The object is to eliminate unsound concepts prior to devoting resources to them. The screeners should ask several questions: Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment/target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price? 3. Concept Development and Testing Develop the marketing and engineering details Investigate intellectual property issues and search patent data bases Who is the target market and who is the decision maker in the purchasing process? What product features must the product incorporate? What benefits will the product provide? How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering, and rapid prototyping What will it cost to produce it? Testing the Concept by asking a sample of prospective customers what they think of the idea. Usually via Choice Modelling. 4. Business Analysis Estimate likely selling price based upon competition and customer feedback Estimate sales volume based upon size of market and such tools as the FourtWoodlock equation Estimate profitability and break-even point 5. Beta Testing and Market Testing Produce a physical prototype or mock-up Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer acceptance 6. Technical Implementation New program initiation

 Finalize Quality management system Resource estimation Requirement publication Publish technical communications such as data sheets Engineering operations planning Department scheduling Supplier collaboration Logistics plan Resource plan publication Program review and monitoring Contingencies - what-if planning 7. Commercialization (often considered post-NPD) Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product Critical path analysis is most useful at this stage 8. New Product Pricing Impact of new product on the entire product portfolio Value Analysis (internal & external) Competition and alternative competitive technologies Differing value segments (price, value, and need) Product Costs (fixed & variable) Forecast of unit volumes, revenue, and profit