Marketing Management: Q.1 Explain The Meaning of Marketing and Its Importance in Business

w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Q.1 Explain the meaning of marketing and its importance in business.

Ans.: Marketing is a set of business activities that facilitate movement of goods
and services from producer to consumer. It is an ongoing process of discovering
and translating consumer needs into products and services, creating demands for
them, serving the customer and his demand through a marketing programme of
promotion and distribution to fulfill the companys marketing goals in a
competitive environment.
It is evident that customer, his needs and wants are very important aspects of
todays marketing.
Customer focus is the very essence of marketing and his viewpoints should be
taken into account while making marketing decisions.
In this era of rapid changes, it is marketing which keeps the business in close
contact with its economic, political, social and technological environment and
informs it of events and changes that can influence its activities.
American Marketing Association (AMA offers the following definition of
Marketing.( AMA !""#
Definition$ Marketing is an organization function and a set of process for
creating, communications and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stake
holders.
%he Chartered Institute of Marketing defines Marketing as$
Marketing is the management process responsible for identifying, anticipating
and satisfying customer re&uirements, profitably.
'aving understood what a Market is and what is Marketing, we will now look what
is an e(change and the e(change process.
Importance of Marketing.
)eter *rucker, the famous management thinker in one of his classic articles has
said +Marketing is everything,. All other activities in the organi-ation are support
services to the marketing strategy that the company pursues. Marketing is
important not only to the company but to the consumers and society and to the
economy.
Consumer stands to benefit from marketing activities. 'e has more alternatives
to choose from, improved and better &uality products are available and he is able
to buy goods at convenient locations. %hanks to much improved customer
service, a consumer is able to complain and e(pects his complaint to be attended
in reasonable time. 'e can now buy with credit or debit card or cash or on
installments.
.or the society as a whole, marketing is important because it acts as a change
agent making people use latest products and improves the standard of living of
the people. As we know, the main ob/ective of marketing is to produce products
and services for the society as per their needs and tastes, and while doing so it
creates demand for these goods and services, encourages them to use them,
thus leading to higher demand and sales. %his higher demand allows the
company to achieve economies of scale in both production and distribution
resulting in decrease in production and distribution costs which can be used to
reduce prices to consumers.
For More M.B.A Notes & Projects Visit www.toppersarena.com
Mar k et i ng Management
SET 1
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
.or a company in any business, marketing is considered to be the most important
activity. It helps an organi-ation to keep abreast of changes taking place in the
market and consumer tastes and
)references through market research. 0ased on this reliable data, it responds to
these changes by rectifying any drawbacks in its products or changing its
competitive strategy. %hus the companys decision1making and planning are not
based on /ust hunches but on sound market information. %he firm that follows
such practices is sure to prosper under all conditions. Marketing provides an
effective channel of communication to the company with its consumers by way of
advertising and sales promotion. Marketing thus brings revenue and earns
goodwill for the company.
2uccessful operation of marketing activities creates, maintains and increases the
demand for goods and services in the economy. It results in the increased level of
production. %his, in turn, increases the national income, which is beneficial to the
economy. Marketing operations re&uire the services of intermediaries such as
wholesalers, retailers, transporters, and service provides for storage, finance,
insurance and advertising. %hese services provide employment in large numbers.

Q.2 Explain the relevance of BCG matrix and GE matrix with examples.
Ans.: B! matri":
3. 204$ .MC5
Industry growth rate$ !#6 (AC 7ielson retail audit report !""8
Company growth rate$ 9"6 (the 'indu business line 3:th ;anuary !""<
Companys market share$ <6 (outlook business
=argest competitor share$ '4=$ 9#6 (outlook business
>elative market share? ".3#
!. 204$ )aper board
Industry growth rate$ 8.!6 (the 'indu business line !8%h May !""8
Company growth rate$ 336 (the 'indu business line 3:%h ;anuary !""<
Companys market share$ 996
=argest competitors share$ 0I=% @96
I%Cs .MC5 segment analysis shows that though it is market leader in some
categories their overall relative market share is ".3#. Company is in the high
growth low relative market share area i.e. &uestioning mark position. I%C should
invest heavily to convert its 204 position into star.
I%Cs )aperboard industry is in low growth and high market share category i.e. in
cash cow segment.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
It should plan for investing the cash generated from this position into other
businesses.
!E matri":
3 Management can use the 5A business matri( to classify 204s on the basis of
two factors
a. Market attractiveness$ Market si-e, entry barriers, competitors, technology and
profit margin are some factors used to analy-e the market attractiveness.
b. 0usiness position can be determined on the basis of market share, 204 si-e,
>B* capabilities and cost controls
Aach cell in the model represented by the particular strategy namely, invest
strategy, protect strategy, harvest strategy and divest strategy
! Invest strategy$ In this position 204
a. 2hould receive ample resources
b. 2hould support by well financed marketing efforts.
@ )rotect strategies$ 204s in this position should
a. Allocate the resources selectively.
b. *evelop strategies which help in maintain its market position.
c. 5enerate cash needed by other 204s.
0usiness position
'igh Medium =ow
Invest Invest )rotect
Invest )rotect 'arvest
)rotect 'arvest *iverst
#. 'arvest strategy$ 204s should not receive substantial new resources and if
re&uired, sell them.
#$ *ivest strategy$ 204s which falls into this category should not receive any
resources and sell i or shut it as early as possible.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Axis components:
a. Market Growth rate: the rate at which market is growing.
b. Relative Market Share: market share of the SBU dived by the market share of the largest
competitor.
Model Components:
These groups are explained below:
Dogs:
ow !arket Share " ow !arket #rowth. $n these areas% SBU&s market presence is weak% so it's going
to take a lot of hard work to get noticed. Also% you won't en(oy the scale economies of the larger
players% so it's going to be difficult to make a profit.
Cash Cows:
)igh !arket Share " ow !arket #rowth )ere% SBU&s are well*established% so it's easy to get
attention and exploit new opportunities. )owever it's only worth expending a certain amount of effort%
because the market isn't growing and your opportunities are limited. here we can say cash cow can be
milked.
Stars:
)igh !arket Share " )igh !arket #rowth )ere SBU&s are well*established% and growth is exciting+
These are fantastic opportunities% and you should work hard to reali,e them.
Question Marks !ro"lem Child#
ow !arket Share " )igh !arket #rowth These are the opportunities no one knows what to do with.
They aren't generating much revenue right now because you don't have a large market share. But% they
are in high growth markets so the potential to make money is there. )ere there are two choices% either
to invest heavily to bring it to star position or divest or li-uidate from that position. .uestion !arks
might become Stars and eventual /ash /ows% but they could (ust as easily absorb effort with little
return. These opportunities need serious thought as to whether increased investment is warranted.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
$e% !oints
The Boston !atrix is an effective tool for -uickly assessing the options open to you% both on a
corporate and personal basis. 0ith its easily understood classification into 12ogs1% 1/ash /ows1%
1.uestion !arks1 and 1Stars1% it helps you -uickly and simply screen the opportunities open to you%
and helps you think about how you can make the most of them.
&imitations:
As any other marketing theories in the field% the B/# matrix model is not perfect either. There are
according problems of this theory. Some limitations concerning the particular use of B/# include:
3. 4nly two dimensions 5 market share and product or service growth rate% are employed. These are
the first limitations.
6. )ow to define market and how to get data about market share are also problems.
7. )igh market shares don&t always necessarily lead to profit at all times. $t is not the only success
factor.
8. ow share or niche businesses can be profitable too% which means in the real world some 2ogs can
be more profitable than cash /ows.
9. The model cannot reflect the growth rates of the general market and market growth is not the only
indicator for market attractiveness.
:. The model also neglects the effects of synergy between different business units.
The #; screen matrix is essentially a derivation of the Boston /onsulting #roup&s 'oston growth
matrix. $t was developed by !c<insey and /o. for #eneral ;lectric as it had been recogni,ed that the
Boston /onsulting #roup matrix was not flexible enough to take broader issues into account The #;
matrix cross*references market attractiveness and business position using three criteria for each 5 high%
medium and low. The market attractiveness considers variables relating to the market itself% including
the rate of market growth% market si,e% potential barriers to entering the market% the number and si,e of
competitors% the actual profit margins currently en(oyed% and the technological implications of
involvement in the market. The business position criteria look at the business&s strengths and
weaknesses in a variety of fields. These include its position in relation to its competitors% and the
business&s ability to handle product research% development and ultimate production. $t also considers
how well placed the management is to deploy these resources. The matrix differs in its complexity
compared with the Boston /onsulting #roup matrix. Superimposed on the basic diagram are a number
of circles. These circles are of variable si,e =see >igure 66?. The si,e of each represents the si,e of
each market. 0ithin each circle is a clearly defined segment which represents the business&s market
share within that market. The larger the circle% the larger the market% and the larger the segment% the
larger the market share.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Q. what do !ou mean b! "#$% Explain its benefits& t!pes and components.

Ans.$ MIS: )hilip Cotler defines MI2 as +a system that consists of people,
e&uipment and procedures to gather, sort, analy-e, evaluate and distribute
needed, timely and accurate information to marketing decision makers.
Its characteristics are as follows$
3. It is a planned system developed to facilitate smooth and continuous flow of
information.
!. It provides pertinent information, collected from sources both internal and
e(ternal to the company, for use as the basis of marketing decision making.
@. It provides right information at the right time to the right person.
A well designed MI2 serves as a companys nerve centre, continuously monitoring
the market environment both inside and outside the organi-ation. In the process,
it collects lot of data and stores in the form of a database which is maintained in
an organi-ed manner. Marketers classify and analy-e this data from the database
as needed.
Dith the advent of Computer %echnology, MI2 has taken a step further to provide
managers direct access to the databases. %his system called Marketing
Decision S%pport S&stem 'MDSS( links a decision maker to relevant
databases and analysis tools, thereby allowing him to gain deep insights into
needs and trends of customers with the help of sophisticated statistical analysis.
%oday companies organi-e the information in databases such as customer
database, product database, and field sales database and combine them to be
stored in a huge database called Data )are*o%se. %he process of searching
through information in data warehouse to identify meaningful patterns that guide
decision making is called Data Mining.
Benefits of MIS
Earious benefits of having a MI2 and resultant flow of marketing information are
given below$
3. It allows marketing managers to carry out their analysis, planning
implementation and control responsibilities more effectively.
!. It ensures effective tapping of marketing opportunities and enables the
company to develop effective safeguard against emerging marketing threats.
@. It provides marketing intelligence to the firm and helps in early spotting of
changing trends.
#. It helps the firm adapt its products and services to the needs and tastes of the
customers.
9. 0y providing &uality marketing information to the decision maker, MI2 helps in
improving the &uality of decision making.
T&pes of Marketing Information
A Marketing Information 2ystem supplies three types of information.
3. +ec%rrent Information is the data that MI2 supplies periodically at a weekly,
monthly, &uarterly, or annual interval. %his includes data such as sales, Market
2hare, sales call reports, inventory levels, payables, and receivables etc. which
are made available regularly. Information on customer awareness of companys
brands, advertising campaigns and similar data on close competitors can also be
provided.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
!. Monitoring Information is the data obtained from regular scanning of
certain sources such as trade /ournals and other publications. 'ere relevant data
from e(ternal environment is captured to monitor changes and trends related to
marketing situation. *ata about competitors can also be part of this category.
2ome of these data can be purchased at a price from commercial sources such as
Market >esearch agencies or from 5overnment sources.
@. ,ro-.em re.ate/ or c%stomi0e/ information is developed in response to
some specific re&uirement related to a marketing problem or any particular data
re&uested by a manager.
)rimary *ata or 2econdary *ata (or both are collected through survey >esearch
in response to specific need. .or e(ample, if the company has developed a new
product, the marketing manager may want to find out the opinion of the target
customers before launching the product in the market. 2uch data is generated by
conducting a market research study with ade&uate sample si-e, and the findings
obtained are used to help decide whether the product is accepted and can be
launched.
omponents of MIS
3. Internal >ecords 2ystem
!. Marketing Intelligence 2ystem
@. Marketing >esearch 2ystem
#. Analytical Marketing 2ystem
Interna. +ecor/s S&stem
%his includes information on (i Frder to payment cycle and (ii sales information
systems.
1r/er to pa&ment c&c.e has a system which records, the timing and si-e of
orders placed by consumers, the payment cycle followed by consumers and the
time taken to fulfill the orders, in the shortest possible time. Customers place
order through sales people and companies dispatch the goods and receive
payments directly or through bank. A proper record system pertaining to order G
to G payment cycle management helps mangers to decide on production and
dispatch schedule, inventory and accounts receivable schedule and also logistics
and distribution management schedules,
Marketing Information 2ystem
Sa.es Information S&stems record everything in the sales *epartment,
starting from 2ales Call reports to prospects history to 2ales territory and &uota
information for better sales planning and forecasting purpose.
Marketing Inte..igence S&stem
%his is a set of procedures and sources used by managers to obtain everyday
information about developments in the marketing environment. %his system
supplies Hhappenings data unlike Internal >ecords 2ystem which supplies
Hresults data. Marketing managers collect data from published sources like
books, maga-ines and /ournalsI by talking to customers, intermediaries and sales
personnel. 2ome companies appoint specialists to gather consumer and
competitor information, who does mystery shopping to monitor the performance
of their own or competitors dealers. Competitor information can also be obtained
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
by buying their product, attending their press conferences, trade shows and
reading their annual reports. Companies purchase commercial information from
outside suppliers and market research agencies like IM>0, F>5 G MA>5 to obtain
competitive data on their sales, advertising e(penditures etc., besides their own.
Marketing +esearc* S&stem
%his is the third component of MI2. Marketing >esearch provides information to
marketing manager when heJshe encounters marketing problems. %his may
involve conducting Marketing >esearch survey by collecting primary data. %hese
surveys may be conducted by the marketing department itself or it can hire
services of an e(ternal marketing research agency.
Ana.&tica. Marketing S&stems
Also known as Marketing *ecision 2upport systems (M*22, this is a coordinate
collection of data, systems, tools and techni&ues with supporting software and
hardware by which an organi-ation gathers and interprets relevant information
from business and environment and turns it into a basis for marketing action. All
the data which is generated through the other three systems described above are
stored in a data base. %he storage and retrieval capability of decision support
system allows the collection and use of a wide variety of data throughout the
company. 2enior managers can access the data base and continually and monitor
sales, markets, performance of the sales people and other marketing systems as
well.
Q.'.$uppose !ou need to conduct a small marketing research in !our neighborhood
regarding the purchase and use of toothpastes& what will be !our approach in the
process.
(ns.) A Toothpaste that uses 'concentrated' rare herbs and oils so effectively for soothing
troubled gums% protecting teeth and adding 'extended' freshness that you'll even wonder why
you ;@;A used mouthwashB
Reviews: (Since $ began using your Cepsodent toothpaste% $'ve had the best checkups that $'ve
ever had. The person who cleans my teeth is very impressed with my gums and has begun
using )erbodent herself and is recommending it to her other patients. )
******************************
)$ can't believe it but after less than a month% my gums are not bleeding. $ was using another
product from the dentist's office and it did not help at all% but your toothpaste really% really
worked for me. $ am very happy+ $ am going to need a lifetime's supply+ )
Aecogni,ing the power of nature's gifts% )ealth and Doga recommends a natural based% herbal
toothpaste which has been manufactured using extracts and oils o* natural ingredients.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
$n fact% with fluoride in toothpastes and alcohol in mouthwashes being increasingl% linked to
oral cancer by scientists worldwide% the switch to natural*based tooth and gum cleansers and
mouth fresheners is not only suggested but actually encouragedBeven more so *or children
with their delicate gums and susceptible teeth.
!epsodent Complete Care +namel,Sa*e -hitening .oothpaste
Eew and $mproved+ /omplete Crotection for Strong ;namel and )ealthy #ums
Cromotes )ealthy Teeth and #ums
Special >ormula to )elp /ontrol Tartar
>ights /avities. #ently Aemoves Cla-ue and Stains to 0hiten Teeth
/ontains ;namel*Strengthening >luoride for ;ffective /avity Crotection
Smooth !int >lavor in a convenient : o, tube
Active /ngredients: Sodium >luoride =F.68G? =Curpose: anticavity toothpaste?
/nactive /ngredients: Sorbitol% 0ater% )ydrated Silica% C;# 76% Sodium auryl Sulfate% S2 Alcohol
7HB% >lavor% /ellulose #um% Iinc /itrate Trihydrate% Sodium Saccharin% Titanium 2ioxide
Q. *Explain the consumer bu!ing decision process with respect to new products. Give
examples.
Ans.: Consumer -%&ing /ecision process for ne2 pro/%cts$
%he buyers decision for e(isting products and new products varies. Kou already
seen in the e(isting product buying decision process consumers have the option
to search for the information and evaluate them. In the new product such options
dont e(ist. %herefore we should understand how consumer comes to know about
the product. Cotler defined this process as adoption process.
According to )hilip Cotler Adoption is H%he mental process through which an
individual passes from first hearing about an innovation to final adoption
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
A/option process

3. A2areness$ the consumer became aware of the product but lacks information
about it.
!. Interest: As know previous information available consumer shows interest to
get the information about the product.
@. E3a.%ation: After receiving the information consumer analy-es the benefits of
new products over any e(isting products or substitutes and decides whether to
buy or not.
#. Tria.: %he consumer tries the new product on a small scale to improve his or
her estimate of its value.
9. A/option: In this stage consumer decides to make full and regular use of the
product.
A/option rate:
%he adoption of new product varies from individual to individual.
3. !.96 of the consumers adopt any new product that enters to the market.
%hese consumers are status conscious people. Marketer should highlight how the
new product will bring the esteem to the consumer.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
!. 3@.96 of the customers fall into the early adopter categories. In this categories
customer observed the advantage of the new product and the moment the price
of the product falls into the affordable category they buy the product.
@. %he ne(t group is the biggest one in the adoption process. %hese group
customers are attracted towards the benefits of the product. %hey make sure that
there are no technical or general problems associated with the product. %his
group contains @#6 of the total customers.
#. %his group consist @#6 of customers. %he group looks for the &uality product
at the affordable prices
9. %he final group is called as laggards. %hese are traditional and price conscious
people. %hey often take lot of time to adoption of the product.
Q. +. Explain the different consumer behavior models.
(ns.) ons%mer -e*a3ior mo/e.s$
%he influence of social sciences on buyer behavior has prompted marketing
e(perts to propound certain models for e(plaining buyer behavior. 0roadly, they
include the economic model, the learning model, the psychoanalytical model and
the sociological model.
3 T*e Economic Mo/e.: According to the economic model of buyer behavior,
the buyer is a rational man and his buying decisions are totally governed by the
concept of utility. If he has a certain amount of purchasing power, a set of needs
to be met and a set of products to choose from, he will allocate the amount over
the set of products in a very rational manner with the intention of ma(imi-ing the
utility or benefits.
! T*e 4earning Mo/e.: According to the learning model which takes its cue
from the )avlovian stimulus response theory, buyer behavior can be influenced
by manipulating the drives, stimuli and responses of the buyer. %he model rests
on mans ability at learning, forgetting and discriminating. %he stimulus response
learning theory states that there develops a bond between behavior producing
stimulus and a behavior response (2. >. 0ond on account of the conditioning of
behavior and formation of habits. %his theory may be traced to )avlov and his
e(periments on salivating dogs. )avlovs e(periments brought out associations
by conditioning.
In his well known research with dogs, a bell was rung every time food was served
to a dog.
Aventually, the dog started salivating each time upon hearing the bell though no
food was served.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
%he dogs behavior is conditionedI It is related to behavior producing stimulus
(bell ringing and behavior response (salivation. %he 2.>. bond so established
causes a set pattern of behavior learnt by the ob/ect G dog. In terms of consumer
behavior, an advertisement would be a stimulus whereas purchase would be a
response.
=earning )rocess$ According to the stimulus response theory, learning is
dependent on drive, cue (stimulus, response and reinforcement.
Dri3e: *rive may be defined as any strong stimulus that impels action. It arouses
an individual and keeps him prepared to respond. %he drives may be classified as
primary drives and secondary drives. )rimary drives are based upon innate
physiological needs such as thirst, hunger, pain avoidance, and se(. %he
secondary drives are based upon learning. %hey are not innate and are derived
from the primary drives. %hese include the desire for money, fear, pride, rivalry,
etc.
%e: Cue or stimulus may be defined as any ob/ect in the environment perceived
by the individual.
%he aim of the marketing man is to find out or create the cue of sufficient
importance that it becomes the drive stimulus or elicits other responses
appropriate to his ob/ective. 'ere, the ob/ective is to find out those conditions
under which a stimulus will enhance the chances of eliciting a particular kind of
response.
+esponse: >esponse is an answer to a given drive or cue. Dhen a man feels
thirsty, he attempts to get water at any cost. 'ere attempt to get water is a
response to the primary drive of thirst.
+>esponse also includes attitudes, familiarity, perception and other comple(
phenomena.,
>esponses may be generali-ed or discriminatory. 5enerali-ed response refers to
a uniform response to similar though not identical stimuli. *iscriminatory
response refers to the selective response to similar stimuli. 4ndifferentiated
products such as cigarettes and detergents normally elicit generali-ed consumer
responses but by huge advertising outlays companies try to induce consumers to
perceive differences in brands and to make discriminatory responses.
>einforcement$ >einforcement or reward means reduction in drive and stimulus.
It has been defined as +environmental events e(hibiting the property of
increasing the probability of occurrence of responses they accompany., %hus,
when consumption of a product or a brand of product leads to satisfaction of the
initiating need (driveJstimulus there is reinforcement. If at some later date the
same needs are aroused, the individual will tend to repeat the process of
selecting and getting the same product or brand of product. Aach succeeding
time that product or brand brings satisfaction, further reinforcement takes place,
thus, further increasing the possibility that in future also, the same product or
brand will be bought. %his type of behavioral change, increasing possibility that
an act will be repeated, is called learningI >einforcement increases the rapidity
and vigor of learning.
@ T*e ,s&c*oana.&tica. Mo/e.: %he psychoanalytical model draws from
.reudian )sychology.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
According to this model, the individual consumer has a comple( set of deep1
seated motives which drive him towards certain buying decisions. %he buyer has
a private world with all his hidden fears, suppressed desires and totally sub/ective
longings. 'is buying action can be influenced by appealing to these desires and
longings. %he psychoanalytical theory is attributed to the work of eminent
psychologist 2igmund .reud. .reud introduced personality as a motivating force
in human behavior.
According to this theory, the mental framework of a human being is composed of
three elements, namely,
3. The id or the instinctive, pleasure seeking element. It is the reservoir of the
instinctive impulses that a man is born with and whose processes are entirely
subconscious. It includes the aggressive, destructive and se(ual impulses of man.
!. The superego or the internal filter that presents to the individual the behavioral
e(pectations of society. It develops out of the id, dominates the ego and
represents the inhibitions of instinct which is characteristic of man. It represents
the moral and ethical elements, the conscience.
@. The ego or the control device that maintains a balance between the id and the
superego. It is the most superficial portion of the id. It is modified by the influence
of the outside world. Its processes are entirely conscious because it is concerned
with the perception of the outside world.
%he basic theme of the theory is the belief that a person is unable to satisfy all
his needs within the bounds of society. Conse&uently, such unsatisfied needs
create tension within an individual which have to be repressed. 2uch repressed
tension is always said to e(ist in the subconscious and continues to influence
consumer behavior.
#. T*e Socio.ogica. Mo/e.: According to the sociological model, the individual
buyer is influenced by society or intimate groups as well as social classes. 'is
buying decisions are not totally governed by utilityI 'e has a desire to emulate,
follow and fit in with his immediate environment.
#$ T*e Nicosia Mo/e.$ In recent years, some efforts have been made by
marketing scholars to build buyer behavior models totally from the marketing
mans standpoint. %he 7icosia model and the 'oward and 2heth model are two
important models in this category. 0oth of them belong to the category called the
systems model, where the human being is analy-ed as a system with stimuli as
the input to the system and behavior as the output of the system. .rancesco
7icosia, an e(pert in consumer motivation and behavior put forward his model of
buyer behavior in 3:LL.
%he model tries to establish the linkages between a firm and its consumer G how
the activities of the firm influence the consumer and result in his decision to buy.
%he messages from the firm first influence the predisposition of the consumer
towards the product. *epending on the situation, he develops a certain attitude
towards the product. It may lead to a search for the product or an evaluation of
the product. If these steps have a positive impact on him, it may result in a
decision to buy. %his is the sum and substance of the Hactivity e(planations in the
7icosia Model. %he
7icosia Model groups these activities into four basic fields. .ield one has two
subfields the firms attributes and the consumers attributes. An advertising
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
message from the firm reaches the consumers attributes. *epending on the way
the message is received by the consumer, a certain attribute may develop, and
this becomes the input for .ield %wo. .ield %wo is the area of search and
evaluation of the advertised product and other alternatives. If this process results
in a motivation to buy, it becomes the input for .ield %hree. .ield %hree consists
of the act of purchase. And .ield .our consists of the use of the purchased item.
SET 5
Q.1 a. Give a short note on bases of $egmentation.
b. (nal!,e the pricing methods with relevant examples.
(ns. 1a) Bases of $egmentation.
3.

3 !eograp*ic segmentation: *ividing the market into different geographical
units such as nations, states, regions, cities or neighborhoods. %he company can
operate in one or a few
5eographic areas or operate in all but pay attention to local variations. .or
e(ample, 0ennett,
Coleman and co =td divided markets according to geographical units for their
tabloids. In
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
0angalore the tabloid is known as 0angalore Mirror where as it is Mumbai Mirror
in Mumbai.
! Demograp*ic Segmentation: In demographic segmentation the market is
divided into groups on the basis of variable such as age, family si-e, family
lifecycle, gender, income, occupation, education, religion, race, generation,
nationality and social class. *emographic variables are the most popular bases
for distinguishing customer groups. Fne reason is that consumers wants,
preferences and usage rates are often associated with demographic variables.
*emographic variables are easy to measure. Aven when the target market is
described in no demographic terms, the link back to demographic characteristics
is needed in order to estimate the si-e of the target market and the media that
should be used to reach it efficiently. 2ome of the demographic variables used
are$
a Age an/ 4ifec&c.e
Stage: Consumers wants and abilities change with age. Fn the basis of age, a
market can be divided into four parts vi-., children, young, adults and old. .or
consumers of different age groups, different types of products are produced. .or
instance, different types of readymade garments are produced for consumers of
different age groups.
A successful marketing manager should understand the age group for which the
product would be most suited and determine his marketing policy, pricing policy,
and advertising policy
etc., accordingly.
6or e"amp.e7 H84 launched Hpepsodent kids for small children.
b !en/er: 5ender segmentation has long been applied in clothing, hairstyling,
cosmetics and maga-ines. .or e(ample, Amami segmented its personal care
business on the basis of gender. .or women, it is having Amami naturally fair, and
for men it is fair and handsome.
c Income: Income segmentation is a longstanding practice in such product and
service categories as automobiles, clothing, cosmetics and travel. 'owever,
income does not always predict the best customers for a given product.
6or e"amp.e7 0a/a Auto limited, a leading automobile company, different bikes
for different commuters. .or entry level (less than >s@9""" it is 0a/a/ C% 3"", for
mid segment (greater than >s@9""" but less than >sL"""" it is pulsar and for
the upper segment greater than >s
L"""" Avenger and Aliminator are positioned.
@ ,s&c*ograp*ic Segmentation: In )sychographic segmentation, buyers are
classified into different groups on the basis of lifestyle or personality and values.
)eople within the same demographic group can e(hibit very different
psychographic profiles.
a 4ifest&.e:
)eople e(hibit different lifestyles and goods they consume e(press their
lifestyles.
Many companies seek opportunities in lifestyle segmentation. 0ut lifestyle
segmentation does not always work.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
b ,ersona.it&: Marketers have used personality variables to segment the
markets. %hey endow their products with brand personality that corresponds to
consumer personalities.
c Socia. .ass: It has a strong influence on preference in cars, clothing, home
furnishings, leisure activities, reading habits etc. Many companies design
products and services for specific social classes.
Be*a3iora. Segmentation or ons%mer +esponse Segmentation:
In behavioral segmentation, buyers are divided into groups on the basis of their
knowledge or attitude towards the use of, or response to a product. 2ome
marketers believe that behavioral variables are the best starting points for
constructing market segments.
a 1ccasions: According to the occasions, buyers develop a need, purchase a
product or use a product. It can help firms e(pand product usage. A company can
consider critical life events to see whether they are accompanied by certain
needs. .or e(ample, %anish& a %A%A enterprise offers schemes and promotions
for Akshaya %hrutiya (auspicious day to purchase /ewellary
b Benefits: 0uyers can be classified according to the benefits they seek. .or
e(ample, )eter
Angland, a madhura garment brand positioned its wrinkle free trousers on the
basis of benefits.
c 8ser Stat%s: Markets can be segmented into nonusers, potential users, first
time users and regular users of a product. Aach market segment re&uires a
different marketing strategy. %he companys market position will also influence
its focus. Market leaders will focus on attracting potential users, whereas smaller
firms will try to attract current users away from the market leader. .or e(ample,
Cishkinda resort near 'ampi classifies its customers according to this
characteristic. >esort believes that locals falls into nonuser category, affluent
class who comes to 'ampi as potential users, foreigners as first time users rich
people near 'ampi who fre&uently come there as regular users.
d 8sage +ate: Markets can be segmented into light, medium and heavy
product users. 'eavy users are often a small percentage of the market but
account for a high percentage of total consumption. Marketers prefer to attract
one heavy user rather than several light users and they vary their promotional
efforts accordingly.
6or e"amp.e7 Alan )aine te(tile brand, offered # cotton trousers for >s :::.
Company is interested in getting profit from sales volume.
Ans. b$ I$ ost p.%s pricing: %he method of adding markup to the total cost of
the product
)rocedure for calculating cost plus pricing$
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
a. .ind out the variable cost per unit and fi(ed cost.
b. Astimate the number of units the company is intended to sell.
c. Calculate the 4nit cost by the following formula
.i(ed costs
4nit cost ? Eariable cost M4nit sales
d. .ind out the re&uired mark up( desired return on sales
e. Calculate the price by the following formula.
4nit cost
)rice? (
3*esired return on sales
)roblem$ Company N would like to sell 89,""" units in the year !""<. %he fi(ed
cost of the company is >s ! =akh and variable cost is >s 9 per unit. Company
wants @" 6 profit after sales. Calculate the )rice of the product to achieve
desired sales and profit.
2olution$
4nit cost? ECM (.CJ unit sales
? 9M (!"","""J89"""
? 8.L8
)rice ? 4nit costJ (3desired return on sale
? 8.L8J (3".@
? 3".<9 Appro( >s 33Junit.
Advantages of cost plus pricing$
3. 2ellers are more certain about the cost than the demand.
!. If all the companies in the industry use this method price become standard.
@. It is fairer to both buyers and sellers.
*isadvantages of cost plus pricing$
3. It ignores the demand and competition
!. If fewer units are sold then fi(ed cost will be spread to less number of units.
%his leads to higher unit cost and higher final price.
II$ Break e3en pricing:
%he firm determines the price at which it will make the target profit.
)rocedure to calculate the break even volume$
3. .ind out the total fi(ed cost of the company.
!. *etermine the price on which company would like to sell
@. Calculate the variable cost per unit.
#. *etermine the break even volume by the following formula
0reak even volume? .i(ed costJ ()rice variable cost
)rocedure to identify breakeven price
3. *etermine the unit demand needed to break even at a given price.
!. .ind out the e(pected unit demand at given price.
@. .ind out the total revenue at a given price.
#. Calculate the total cost (assuming fi(ed cost and total of variable cost
9. *etermine the profit from the following formula
)rofit? %otal revenue G total cost.
Assume$
.i(ed cost$ >s 3,""","""
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
)rice$ >s !"
Eariable cost$ >s 3!
0AE ? 3,""","""J (!"3!
?3!9,""".
Q.2 Explain the benefits and demerits of the different t!pes of advertising media. -ow
will a marketer decide on the suitable media for his.her products%
Ans.$ Merits an/ /emerits of a/3ertising me/ia:
0ewspapers
Advantages
Dour ad has si,e and share% and can be as large as necessary to communicate as much of a
story as you care to tell.
The distribution of your message can be limited to your geographic area.
Split*run tests are available to test your copy and your offer.
>ree help is usually available to create and produce your ad.
>ast closings. The ad you decide to run today can be in your customer's hands two days from
now.
Disadvantages
/lutter. Dour ad has to compete for attention against large ads run by supermarkets and
department stores.
Coor photo reproduction limits creativity.
A price*oriented medium. !ost ads are for sales.
Short shelf life. The day after a newspaper appears% it's history.
0aste circulation. Dou're paying to send your message to a lot of people who will probably
never be in the market to buy from you.
A highly visible medium. Dour competitors can -uickly react to your prices.
Maga1ines
Advantages
)igh reader involvement means more attention will be paid to your advertisement.
ess waste circulation. Dou can place your ads in maga,ines read primarily by buyers of your
product or service.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
The smaller the page =generally eight and half by eleven inches? permits even small ads to
stand out.
Disadvantages
ong lead times =generally JF days? mean you have to make plans a long time in advance.
The cost for space is higher in addition to higher creative costs.
2ellow !ages
Advantages
;veryone uses the yellow pages.
Ads are reasonably inexpensive.
Dou can easily track your responses.
Disadvantages
All of your competitors are listed so you run the ad as a defensive measure.
Ads are not very creative since they follow certain formats.
Radio
Advantages
A universal medium. /an be en(oyed at home% at work% and while driving. !ost people listen
to the radio at one time or another during the day.
Cermits you to target your advertising dollars to the market most likely to respond to your
offer.
Cermits you to create a personality for your business using only sounds and voices.
>ree creative help is usually available.
Aates can generally be negotiated.
east inflated medium. 2uring the past ten years% radio rates have gone up less than other
media.
Disadvantages
Because radio listeners are spread over many stations% to totally saturate your market you have
to advertise simultaneously on many stations.
isteners cannot refer back to your ads to go over important points.
Ads are an interruption to the entertainment. Because of this% radio ads must be repeated to
break through the listener's 1tune out1 factor.
Aadio is a background medium. !ost listeners are doing something else while listening% which
means your ad has to work hard to be listened to and understood.
Advertising costs are based on ratings which are approximations based on diaries kept in a
relatively small fraction of a region's homes.
.elevision
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Advantages
Cermits you to reach great numbers of people on a national or regional level.
$ndependent stations and cable offer new opportunities to pinpoint local audiences.
@ery much an image*building medium.
Disadvantages
Ads on network affiliates are concentrated in local news broadcasts and on station breaks.
/reative and production costs can -uickly mount up.
ead time can result in items being sold out before ad runs.
!ost ads are ten or thirty seconds long% which limits the amount of information you can
communicate.
Direct Mail
Advantages
Dour advertising message is targeted to those most likely to buy your product or service.
Dour message can be as long as necessary to fully tell your story.
Dou have total control over all elements of creation and production.
A 1silent1 medium. Dour message is hidden from your competitors until it's too late for them
to react.
Disadvantages
ong lead times re-uired for creative printing and mailing.
Ae-uires coordinating the services of many people: artists% photographers% printers% etc.
;ach year over 6FG of the population moves% meaning you must work hard to keep your mail
list up to date.
ikewise% a certain percentage of the names on a purchased mailing list is likely to be no
longer useful.
.elemarketing
Advantages
Dou can easily answer -uestions about your product"service.
$t's easy to prospect and find the right person to talk to.
/ost effective compared to direct sales.
)ighly measurable results.
Dou can get a lot of information if your script is properly structured.
Disadvantages
!any business use telemarketing.
Crofessionals should draft the script and perform the telemarketing in order for it to be
effective.
/an be extremely expensive.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
!ost appropriate for high*ticket retail items or professional services.
Specialt% Advertising "alloons3 sandwich "oards3 ke% charms3 etc.#
Advantages
/an be attention grabbers if they are done well.
/an give top*of*mind awareness.
#ets your name in front of people.
Disadvantages
2ifficult to target your market.
/an be an inappropriate medium for some businesses.
2ifficult to find items that are appropriate for certain businesses.
Decisions in3o.3e/ in /e3e.oping a/3ertisement programs
*etermining the advertisement ob/ectives$ Marketing management should
determine the ob/ectives of advertisements in the initial phase of the
program. %he ob/ectives of advertisements are
i. )rovide the information about advertisements and create awareness about the
product.
ii. 'ighlight the uni&ueness of companys products over competitors.
iii. >eminding about the product and facilitating the thinking about the product.
*etermining the advertisement budget$ De discussed four important
techni&ues used in setting up communication budget in the beginning of
this unit. In this section we will discuss the factors that influence the
advertisement budget decisions.
i. %he product stage in the product life cycle$ In the introduction stage of product
life cycle Company spends more money on consumer to inform about the product
and to create the awareness.
ii. %he market share of the company$ If the share of the company is high, it tries
to defend by heavy advertisement and if it is low and market is attractive
organi-ations promote companys product heavily.
*eveloping advertisement strategy$ Advertisement strategy depends on
two important factors. %hey are developing messages and choosing proper
media.
I Message development$
Message should be developed only after preparing the complete target
profile.
4nderstand what interests target customer.
Message should answer the ob/ectives of the program.
Message should be simple and can be understood by anybody.
4se more interactive communication tools.
ii 2electing advertising media$
Assess how many target customers should view the communication
message.
)oint out how many times a target customer will e(pose to the
advertisement.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Avaluate the impact of advertisement message on the target audience.
=ist out the media habits of the target customers.
.ind the suitable media for type of product organi-ation have.
)repare cost sheet and choose optimum media.
Choose particular media vehicle (Oee channel, %imes now, )ra/avani,
'indu
AtcP
*ecide how many times advertisement should be given in the year and
also decide the continuity of advertisement.
Allocate the media e(ecution strategy on the basis of prime time and non
prime time or seasonal and non seasonal decisions.
Avaluating advertising$ Communication department is interested in
identifying whether the message given is effectively reaching the
consumer and inducing them to purchase the product. %herefore they
critically evaluate the advertisements through various methods. 2ome of
the important methods through which advertisements evaluated are
recognition method (showing the advertisement and asking whether thy
have seen it before, aided recall (asking people to tell the brand they
remember and unaided recall (asking people if they can remember seeing
any ads within an identified product category.
Q. /rite a note on new product development and product mix.
Ans$: Ne2 ,ro/%ct De3e.opment
7ew products are essential for e(isting firms to keep the momentum and for new
firms they provide the differentiation. 7ew product doesnt mean that absolutely
new to the world. It may be modification, or offered in the new market, or
differentiate from e(isting products. %herefore it is necessary to understand what
are new productsQ
7ew )roducts are
a. %hey are really innovative$ 5oogles Frkut a networking site which
revolutioni-ed social networking. In this site people can meet like minded peopleR
they can form their own groups and many more.
b. %hey are very different from the others$ 'aier launches path breaking #1*oor
>efrigerators .irst time in India
c. %hey are imitativeI %hese products are not new to the market but new to the
company. .or e(ample, cavin Care launched ruche pickles. %his product is new to
cavin kare but not to the market.
Ne2 pro/%ct /e3e.opment process:
2tage 3$ Idea generation$ new product idea can be generated either from the
internal sources or e(ternal sources. %he internal sources include employees of
the organi-ation and data collected from the market. %he e(ternal source
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
includes customers, competitors and supply chain members. .or e(ample,
Ingersoll rand welcomes new ideas from the 5eneral public
2tage !$ Idea screening$ Frgani-ation may have various ideas but it should find
out which of these ideas can be translated into concepts. In an interview to %imes
of India, Mr. >atan %ata, chairman
%A%A group discussed how his idea saw many changes from the basic version. 'e
told that he wanted to develop car with scooter engine, plastic doors etc... 0ut
when he unveiled the car so many change were there in the product. %his shows
that initial idea will be changed on the basis of market re&uirements.
2tage @$ concept development$
Concepts used for %ata 7ano car are
Concept 3$ low end Srural car,S probably without doors or windows and with plastic
curtains that rolled down, a fourwheel
Eersion of the auto rickshaw
Concept !$ a car made by engineering plastics and new materials, and using new
technology like aerospace adhesives instead of welding.
Concept @$ Indigenous, in1house car which meets all the environment standards
2tage #I Concept testing$ at this stage concept was tested with the group of
target customers.
2tage 9$ Marketing strategy development$ %he marketing strategy development
involves three parts.
%he first part focuses on target market, sales, market share and profit
goals.%A%As initial business plan consisted sales of ! =akh cars per annum. %he
second part involves product price, distribution and marketing budget strategies.
%A%As fi(ed >s. 3 =akh as the car price, and finding self employed person who
works like agent to distribute the cars. %he final part contains marketing mi(
strategy and profit goals.
2tage L$ business analysis$ it is the analysis of sales, costs and profit estimated
for a new product to find out whether these align with company mission and
ob/ectives.
2tage 8$ )roduct development$
%A%A nano car development (sourceI business world nanolution
3. %ried to outsource the product from allover the world.
!. *evelopment of Hmule or prototype with !"bhp.
@. *esigning the small engine
#. %hermodynamic simulations and final engine
9. *evelopment of M).I with help of 0osch.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
L. Cost reduction and negotiating with vendors.
8. 2ona Coyo and >ane 5roup came up with hollow steering shafts, saving cost
and cutting weight. 2harda Motors and Amcon designed the e(haust system and
M>. tweaked the tyres to bear e(tra weight on rear wheels.
2tage <$ test marketing$
3. %he product is introduced into the realistic market
!. %he #)s of marketing are tested.
@. %he cost of test marketing varies with the type of product.
2tage :$ commerciali-ation$ In this stage product is completely placed in the
market and aggressive communication program is carried out to support it.
,ro/%ct mi": %he number of product line and items offered by marketer to the
consumer
A companys product mi( has four different dimensions. %hey are product mi(
width, product mi( length, and product mi( depth and product mi( consistency.
)roduct mi( width$ %he total number of product line that company offers to the
consumers.
)roduct mi( length$ %he total number of items that company carries within its
product line.
)roduct line depth$ %he number of versions offered of each product in the line.
.or e(ample, ;yothy laboratories ;eeva 7atural is offered in three versions i.e.
Coconut Milk with
Milk )rotein, Coconut Milk with ;asmine and Coconut Milk with Casturi Man/al, and
is presented in
89gm packs.
)roduct mi( consistency$ If companys product lines usage, production and
marketing are related then product mi( is consistent else it is unrelated.
Incase of ;yothy laboratories, all si( product lines are .MC5s. 'ence it is having
consistent product mi(. 0ut I%C Companys cigarette and cloth product line are
totally unrelated.
Q.'. $elect an! brand of toilet soap and evaluate its positioning strengths or
weaknesses in terms of attributes& benefits& values& brand name and brand e0uit!.
(lso& examine how competitive brands influence the marketing strategies of the
selected soap.
Ans.: 0rand managers use three levels of positioning strategies to get the mind
share of the customer.
,ro/%ct attri-%tes Ingredients$ the product speaks about the innovative
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Ingredients that company offers in the product. In the
gore e(ample the company e(plains the $t&s gentle cleansing qualities are enhanced with
calming chamomile and witch...

Benefit: Caring Lux Soap
Be.iefs an/ 3a.%es 0eauty 2oap =u( 2oap
Bran/ name: 0rand provides the image to the product. 0rand manager should
be careful while selecting proper name for the brand. %here are si( suggestions
from the )hilip Cotler to create a successful brand name. %hey are
3. It should suggest something about the product benefits and &ualitiesI .rooti or
appy .i--
!. It should be easy to pronounce, recogni-e, and remember$ Amul, Cissan, and
>uchi
@. %he brand name should be distinctive$ cello, EI)
#. It should be e(tendable$ Aashirwad Dills
9. %he name should be easily translated into foreign language$ Mr. Dhite.
L. It should be capable of registration and legal protection
Competitive brand influence)

.or e(ample, 'industan 4nilever uses different brand names for their home and
personal care category. %he above e(ample shows us that '4= have bree-e,
*ove, =iril =u(, =ifebuoy and )ears in the bath soap segment itself.
It helps company to come out with new features in the product or product
category. Frgani-ations adopt this strategy to avoid brand cannibali-ation in the
given category. %he ma/or disadvantage of this strategy is none of the brands will
en/oy ma/or market share and result in lesser profitability. In case of 'industan
4nilever company had more than 3"" brands and was forced to reduce it to @"
power brands. Fther brands were not adding enough profit for the company.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Ne2 -ran/s: %he strategy of coming out with new brand for new category
products. In this strategy, company believes that e(isting brands can not be
e(tended to the new category. %he new brand strategy re&uires huge resources
to build it. %he new category if it already had some brands of other companies,
investment re&uirement will go up. .or e(ample, 'industan 4nilever launched
)ure it in the water purifier category. %he category and brand is new to the
company.
Q. *(s a salesperson in a fast moving consumer goods compan!& what kind of
training and development methods do !ou feel are re0uired% -ow important is training
for sales force and how can it be evaluated%
Ans.: Training Met*o/s:
.or imparting training to the salesman, different methods are being used.
0roadly, these methods may be divided into two$
1$ !ro%p Training
'a( 4ect%re Met*o/$ An e(pert or a lecturer speaks to trainee salesmen about
the various aspects of selling. It consists of oral talk in a classroom. %his system is
widely used. %he trainees listen to the lectures. %he instructor invites &uestions
and answers from them. %o make the lecture more interesting, visual aids,
demonstration, suitable e(amples may be added. %his system is more
economical, and is the easiest and &uickest in imparting theoretical training to a
group of salesman. 0ut it is difficult to evaluate the effectiveness of lecture
method. %his method can be used more effectively in continuing sales training
)rogramme to provide new information or changes in the policies of the firm. %his
may include seminars, demonstration etc., by e(pert salesmen.
(b A%/io3is%a.
Met*o/$ In order to supplement the lecturing (telling method, training programs
include the use of visual aids, such as films, slides, posters etc., and are capable
of making, them more interesting.
(c Disc%ssion Met*o/$ %his is a good method. 'ere an actual case or an
imaginary case is given as a problem to be solved, to the different groups. %he
case or the problem may be typed or printed. Aach group is asked to understand
the problem and draw a conclusion. After this, the different conclusions or
suggestions are analy-ed collectively, under the leadership of the instructor, in
drawing generali-ations from each case or problem. %his type of training enables
the salesmen in correcting their own views. It is suitable for a small group. It is
slow and costly.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
'/( onference Met*o/$ 2ales conferences and sales meeting are a kind of Hget
together of all the concerned staff, weekly, fortnightly or monthly. %he thoughts
of various persons are pooled in the conference. Meetings or conferences have
motivating effects as the participants are given chances for creative thinking and
to e(press their views. %o make the conference more interesting, dramas,
demonstrations etc., are included. %opics like, sales policies, facing competition,
publicity ideas, dealings with complaints etc., are dealt with. And these will
facilitate the participants in broadening their outlook and ideas. 0ut this type of
meetings or conferences is not suitable for new recruits.
(e +o.e ,.a&ing Met*o/$ >ole playing is a newly developed method. %he sales
trainees are made to act out roles in contrived problems. %he trainer e(plains the
situation of the problem and assigns the role of salesman and customers of
different characters to the sales trainees. Aach one has to act the assigned role.
%he trainer watches the role played by each and discusses their weaknesses and
strong points. A few may be selected to act the play, while others may watch it.
%hus, the salesman have chance to see and understand the ideas in different
situations. It is not suitable for new recruits.
(f ,ane. Met*o/$ Members in the panel group may be permanent. %he
members, who are e(perts in the panel, discuss the problems, and solutions are
passed to the sales trainee groups, who may have further discussion. %his system
is ineffective.
(g +o%n/ Ta-.e met*o/$ It is similar to the discussion method. It consists of
few members. %he salesmen sit around a table along with a good discussion
leader. %hey deal with the problems of actual cases. Avery participant takes part
freely in discussing the problems and solutions.
A(changes of new ideas take place advantageously.
(' Brain Storming Met*o/$ 4nder this method, more or less, similar to round
table conference, persons sit around the table. %he leader presents the problems
for discussion. %he sales trainees have to understand the problems and find the
solutions. %he solutions are analy-ed by the leader or tested by the panel of
e(perts. %his method practically fetches no value.
5$ In/i3i/%a. Training
'a( 1n t*e 9o-
Training$ 4nder this method, a new salesman is placed under an e(perienced or
senior salesman who trains him. .irst the coach e(plains the sales techni&ues
under different situations. 'e also takes the trainee along with him on his rounds
and gives him chances to observe the dealings with the customers. *oubts of the
trainee are also clarified. %hen the coach along with the trainee calls on
customers the sales trainee is allowed to deal with the customer and the coach
observes the performance. If any weak point or shortcoming is found in the sales
trainee, they discuss how to overcome them. After some time, the sales trainee
becomes a trained and independent salesman. %his system is good for traveling
salesman.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
'-( Sa.es Man%a.$ It is a complied te(tbook. It contains details of the firm and
products, /ob description, sales policies, opinions or reports re&uired for reference
purposes etc. 5enerally, it contains many problems with suggestive solutions. A
copy of the book is given to a salesman to go through it and understand the
ideas. It works as a ready beckoner.
'c( Initia. or Break-in
Training$ 7ew recruits are given an orientation training so as to know about the
company and its products. 'e may be allowed to work for some time in the firm
itself to gain sufficient information about the products. After that he is sent to
work in his field.
Apart from the above, salesman can also be sent to speciali-ed educational
institutions. %he training cost is borne by the firm. %here are many institutions in
India which impart theoretical training along with practical work. *oors are open
and firms can send their new recruits for training.
Correspondence courses are also available for initial training. In certain cases,
one can undergo training while one is fully employed. %his is suitable for
salesmen who are widely scattered. %here are many firms which have permanent
training departments like colleges.
It is important to note that even the trained or e(perienced salesmen need
periodic training, called refresher training or follow up training. %his is because of
the changes in products, sales policies, changes in consumers and market,
government policies, new developments, new ideas etc.
E3a.%ation of Training$ 'aving trained the salesmen, the marketing manager
must evaluate the usefulness or effectiveness of training, individually and
collectively on the basis of the performance of the sales personnel. Money, effort
and time have been spent on training. %herefore, it is natural to e(pect returns.
Avaluation can be made on the basis of performance of sales e(ecutive in terms
of sales volume, sales profitability, order si-e, e(penses etc., between, before and
after training periods.
Importance of Training:
3. %o prepare the salesman to discharge his /ob efficiently.
!. %o tell him what to do.
@. %o guide him how to demonstrate.
#. %o allow him to practice or perform it.
9. %o check him in his performance.
Motivating$ In this stage organi-ation identify the attributes that motivates
the sales e(ecutive to perform well. 2ome e(ecutive may re&uire money
and others may status or control. 'ere organi-ations draw two types of
incentives. %hey are financial incentives and non financial incentives. In
financial incentives salary package, fle(ible e(penses and fringe benefits
serves as motivators. %he non financial incentives include promotion,
recognition and awards are included to motivate the sales e(ecutives.
Avaluating$ Companies are interested to know whether sales e(ecutives
are achieving the &uotas set for them. %o know this they ask sales
e(ecutives to send the different sales reports. It may be call reports,
e(pense reports, loss order report, travel plan and e(penditure and so on.
%hese reports information are compared against the set standards. Fn the
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
basis of evaluation report incentives are announced, if re&uired sales
e(ecutives are motivated and trained.
Compensation$ sales e(ecutives are compensated on three methods. %hey
are direct salary, direct commission and combined plans. In *irect salary
method sales e(ecutives are given fi(ed salary per month. In case of
direct commission sales e(ecutives will be working on commission basis
only. .or e(ample, =ife insurance agents get straight commission. %he
combined method is mi(ture of straight salary and straight commission
method. In this method sales e(ecutives are paid fi(ed salary and also
commission on the sales they make. .or e(ample, 0M%C pays its
conductors fi(ed salary and also !6 of commission on total tickets sold in
a day.
Q. +/hat is #nternational "arketing% /hat are the various strategies to enter
#nternational markets% Explain.
Ans.$ Nat%re of Internationa. Marketing oncept
International marketing is defined as +%he performance of business activities
designed to plan, price, promote and direct the companys flow of goods and
services to consumers or users in more than one nation for a profit,.
A company that wants to sell their product in other than domestic market should
understand the environmental factors, consumer behavior, market forces and
other characters relevant to the international market. After understanding the
definition several &uestions may arise in your mind like why marketer should go
the international marketQ And what is the difference between international
marketing and domestic marketing. As we discussed in the introduction part
companies enter into the international market to tap the potential, to support the
customer re&uirements or to avoid the unprofitable domestic market.
Internationa. Marketing: %he marketing concept is the idea that a firm should
seek to evaluate market opportunities before production, assess potential
demand for good, 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. .or international marketing this means the integration of the
international side of the companys business with all aspects of its operations and
the willingness to create new products and adapt e(isting products to satisfy the
needs of world markets. )roducts may have to be adapted to suit the tastes,
needs and other characteristics of consumers in specific regions, rather than it
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
being assumed that an item which sells well in one country will be e&ually
successful elsewhere.
Internationa. Market Entr& Strategies
Frgani-ations that plans to go for international marketing should answer some
basic &uestions like
a. In how many countries the company would like to operateQ
b. Dhat are the types of countries it plans to enterQ
%o answer the above &uestions companies evaluate each country against the
market si-e, market growth, and cost of doing business, competitive advantage
and risk level.
%o answer the above &uestions companies evaluate each country against the
market si-e, market growth, and cost of doing business, competitive advantage
and risk level.
Fnce the market is found to be attractive companies should decide how to enter
this market.
Companies can enter international market from any one of the following
strategies. %hey are
a. A(porting
b. =icensing
c. Contract manufacturing
d. Management contract
e. ;oint ownership
f. *irect investment
E"porting is the techni&ues of selling the goods produced in the domestic
country in a foreign country with some modifications. .or e(ample, 5okaldas
te(tiles e(port the cloths to different countries from India. A(porting may be
indirect or direct. In case of indirect e(porting, company works with independent
international marketing intermediaries. %his is cost effective and less risky too.
*irect e(porting is the techni&ues in which organi-ation e(ports the goods on its
own by taking all the risks. Maruti udyog limited Indias leading car manufacturer
e(ports its cars on its own.
Company can also set up overseas branches to sell their products. Adani e(ports
another leading e(porter from India has international office in the 2ingapore.
4icensing: According to )hilip Cotler 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. .or e(ample, torrent
pharmaceuticals has license to sell the cardiovascular drugs of Chinese
manufacturer %asly.
=icensing may cause some problems to the parent company. =icensee may
violate the agreement and can use the technology of the parent company.
ontract man%fact%ring$ company enters the international market with a tie
up between manufacturer to produce the product or the service. .or e(ample,
5igabyte technology has contract manufacturing agreement with *link India to
produce and sell their mother boards. Another significant manufacturer is %E2
electronicsI it produces key boards in its own name as well as for other
companies too.
w
w
w
.
t
o
p
p
e
r
s
a
r
e
n
a
.
c
o
m
Management contracting$ In this type a company enters the international
market by providing the know how of the product to the domestic manufacturer.
%he capital, marketing and other activities are carried out by the local
manufacturer hence it is less risky too.
:oint o2ners*ip: A form of /oint venture in which an international company
invest e&ually with a domestic manufacturer. %herefore it also has e&ual right in
the controlling operations. .or e(ample,
0arbara a lingerie manufacturer has /oint venture with 5okaldas images in India.
Direct In3estment: In this method of international market entry Company
invest in manufacturing or assembling. %he company may en/oy the low cost
advantages of that country. Many manufacturing firms invested directly in the
Chinese market to get its low cost advantage. 2ome governments provide
incentives and ta( benefits to the company which manufactures the product in
their country.
%here is government restriction in some countries to opt only for direct
investment as it produces the /obs to the local people. %his mode also depends
on the country attractiveness. It may become risky if the market matures or
unstable government e(ists.

Marketing Management: Q.1 Explain The Meaning of Marketing and Its Importance in Business

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Marketing Management: Q.1 Explain The Meaning of Marketing and Its Importance in Business

Enviado por

Direitos autorais:

Formatos disponíveis

w

Você também pode gostar