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Master of Business Administration - MBA Semester 2 MB0046 Marketing Management - 4 Credits Assignment Set- 1 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions. Q.1 What is Marketing Information System? Explain its characteristics, benefits and information types. (10 marks) The main responsibility for identifying significant changes in the market place falls on the marketing department. They are better placed and have advantages in undertaking this task because they are regularly interacting with customers and observing competition. The Marketing Departments need to develop Marketing Information Systems that provide them information about buyer wants, preferences, behavior and also about competition. They are able to do this by setting up systems and marketing related research methods to collect this valuable information which is ultimately used to make marketing decisions. A Marketing Information System is a set of procedures to collect, analyze and distribute accurate, prompt and appropriate information to different levels of marketing decision makers. Characteristics of MIS Philip Kotler defines MIS a s a syste m th a tco nsists of p e op , e quipme n t and proce d u to gather, le res sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers. Its characteristics are as follows: 1. It is a planned system developed to facilitate smooth and continuous flow of information. 2. It provides pertinent information, collected from sources both internal and external to the company, for use as the basis of marketing decision making. 3. It provides right information at the right time to the right person. A well designed MIS serve s a s a comp an nerve centre, continuously monitoring th e marke t ys environment both inside and outside the organization. In the process, it collects lot of data and stores in the form of a database which is maintained in an organized manner. Marketers classify and analyze this data from the database as needed. With the advent of Computer Technology, MIS has taken a step further to provide managers direct access to the databases. This system called Marketing Decision Support System (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. Today companies organize 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 Warehouse. The process of searching through information in data warehouse to identify meaningful patterns that guide decision making is called Data Mining.

MB0046 Benefits of MIS

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Various benefits of having a MIS and resultant flow of marketing information are given below: 1. It allows marketing managers to carry out their analysis, planning implementation and control responsibilities more effectively. 2. It ensures effective tapping of marketing opportunities and enables the company to develop effective safeguard against emerging marketing threats. 3. It provides marketing intelligence to the firm and helps in early spotting of changing trends. 4. It helps the firm adapt its products and services to the needs and tastes of the customers. 5. By providing quality marketing information to the decision maker, MIS helps in improving the quality of decision making. Types of Marketing Information A Marketing Information System supplies three types of information. 1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly, quarterly, or annual interval. This includes data such as sales, Market Share, sales call reports, inventory levels, payables, and receivables etc. which are made available regularly. Information on customer awareness of comp an bra n d advertising campaigns and similar d ata on clo se comp etitors can als o be ys s, provided . 2. Monitoring Information is the data obtained from regular scanning of certain sources such as trade journals and other publications. Here relevant data from external environment is captured to monitor changes and trends related to marketing situation. Data about competitors can also be part of this category. Some of these data can be purchased at a price from commercial sources such as Market Research agencies or from Government sources. 3. Problem related or customized information is developed in response to some specific requirement related to a marketing problem or any particular data requested by a manager. Primary Data or Secondary Data (or both) are collected through survey Research in response to specific need. For example, 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. Such data is generated by conducting a market research study with adequate sample size, and the findings obtained are used to help decide whether the product is accepted and can be launched.

MB0046 Q.2 a. Examine how a firms macro environment operates. (5 marks)

Forces in the macro environment

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Demographic Environment Demography: The study of population characteristics like size, density, location, gender composition, age structure, occupation and religion. Demography statistics helps companies to forecast demand. These statistics are also used in developing proper supply chain, communicating product information and changing the product attributes. Demographic environment is analyzed on the basis of the following factors. 1. Age structure of the population 2. Marital status of the population 3. Geographic distribution of the population 4. Education level 5. Migration 6. Occupation. Age structure of the population: from the following table you can generalize that 48% of the population in India are aged below 21yrs and 28% of the population are in the bracket of 21-25yrs. Many marketing companies are focusing on these two segments. For example, Radio Indigo, FM radio station from Jupiter capital venture operates in Bangalore and Goa, plays international music. Radio indigo targets youth segment who like western music.

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b. Mention the key points in Psychoanalytic model of consumer behaviour. (5 marks)

The psychoanalytical model : The psychoanalytical model draws from Freudian psychology. According to this
model, the individual consumer has a complex set of deep seated motives which drive him towards certain buying decisions. The buyer has a private world with all his hidden fears, suppressed desires and totally subjective longings. His buying action can be influenced by appealing to those desires and longings. According to Mr. Freud, human personality has three parts namely, 1. the ID, the source of all mental energy which drives one to an action. 2.the Super Ego, the internal representation of what is socially approvedones conscience.3. the Ego, the conscious direct of ID impulses for finding satisfaction in or socially acceptable manner. In other words, ID represents ones animal or basic impulses, instincts and cravings for immediate and total satisfaction. These instincts might be even anti-social. The Super Ego or conscience reflects one,s idealised or mended behaviour pattern a via media between the extremes, that is the, conflict between ID and Super Ego is resolved by Ego. The Ego is the intermediary which mediates and processes the dispute action as a rational con- trol centre between the conflicting extreme sides of ID and Super Ego. It is Ego that directs ones behaviour to satisfy both the

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ID and Super Ego. Thus a person is interested in buying say KV-L34MFI SONY TV with characteristics of Hiblack Trinitron Screensuper drum sound system, 100system memory,1 tuner digital picture in picture, A/V Stereo, LD compatibility casting say Rs.1,05,000 with remote control. Here his ID demands the use of consumer credit liberally to buy that costly T.V. set. The Super Ego dissuades him from heavy borrowing as credit beyond certain limits is not acceptable. Here the Ego acts like a mediator and comes with a fine compromise of instalment system without away strains and drain on his financial position. Here self image of a consumer is a great motivating force inducing him to buy certain products. This model can be presented as follows

Learning model: All theories of buyer behaviour have been basically based on a learning model namely,
Stimulation- Response or more popularly known as SR model. SR learning theory is very useful to modern marketing and marketers. Learning is the centrifugal point in the entire study to human behaviour. Learning, as noted earlier, refers to a change in the behaviour which occurs as a result of practice. It is a change in the behaviour that results from previous experience and behaviour in similar situations. What is important, learning is a product of reasoning, thinking, information processing and, of course, perception. Therefore, behaviour is deeply affected by the learning experiences of the buyers. Of all the psychologists, Pavlovian stimulus or learning of buyer behaviour is widely accepted. He says that buyer behaviour is capable of being manipulated by human drives, stimuli, and responses of the buyer. This model banks on m ans ability to leave, forget and discriminate. Learning process involves three steps namely, Drivea strong internal stimulus which impels action. When it is directed towards a drive-reducing object, it becomes a motive. A driveneed- thus motivates a person for action to satisfy the need. Here, the objectives are the stimuli which the drives Cues are weak stimuli. Cues determine when the buyer will respond. Say, we have cues such as a product advertisement relevant to the situation and existing in our environment. Response is the final stage which is needed to fulfill the drive or as a need which was acting as a strong stimulus. Thus, the thirst, can be quenched by an ad. These sequential components of learning link stimulus cue and response finally resulting in a habit. In marketing, it is better known as a learning brand loyalty brand images and store patronage. Repeated reinforcement leads to a habit formation and the decision process for an individual becomes a matter of routine. It is worth emphasizing here that we learn through trial and error and changes in our behaviour are brought about by practice as experience. The SR model of Pavlovian learning is made clear by given figure:

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Sociological model: According to sociological model, the individual buyer behaviour is influenced by societyby
intimate groups as well as social classes. That is, his buying decisions are not totally determined by the concept of utility. That is his buying decisions are governed by social compulsions. As a part of sociological modeltwo important variations can be considered namely, one that of Nicosia and another Howard & Sheth. The marketing scholars have tried to build buyers-behaviour models purely from stand point view of marketing man. Here F. Nicosia model of 1966 and H. Sheth model of 1969are of this category. These models are systems models where human being analysed as a system with stimuli as INPUT and behaviour as an output

Nicosia model:
As well known consumer motivation and bevaviour expert Mr. Nicosia presented his buyer model in 1966 which attempts to establish linkages between the marketing firm and its consumer. The essence is how the activities of the

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firm influence the consumer and result in his direction to buy. According to his model the messages from the firm first influence the predisposition of the consumer towards the product, he develops a certain attitude towards the product depending on the situation. It leads to a search for the product or on evaluation of the product. In case, these steps have a positive impact on him it may result in decision to by. This is the sum and substances of the explanation. His model lumps these activities into four basic fields. Field One has two sub-fields namely, the firms attributes and the consumer attributes.An ad message from the firm reaches consumers attributes. Depending on the way the messages received by the consumer, a certain attribute may develop and this becomes the input for the field Two. Field Two 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 field three. Field Three consist of the act of purchase. The field Four consists of use of the purchased item. There is an output from field Four --- feed back of sales results to the firm

HOWARD SHETH MODEL

John Howard and Jagdish Sheth presented their buyer model in 1969. its an integrated model. It assumes problem solving approach in buying and adopts input-output or system approach in buying. Howard introduced learning process in buying. Satisfaction leads brand loyalty. Discontentments creates brand switching by the buyers. It other words , the logic of this model that there are inputs in the form of stimuli. There are output beginning with attention to a given stimulus and ending the purchase. In between these inputs and outputs , there are variable affecting percepti n and learning. These variables are hypothetical as they can not be directly measured at the time of o occurrence.

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This model can be presented in the both simple and more sophisticated form. The simple structure is as follows:

Q.3 Explain the key roles played and various steps involved in organizational buying. (10 marks) Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers. (Webster and Wind) Some of the characteristics of organizational buyers are: 1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in number for most of the products. 2. The purchases are in large quantities. 3. Close relationships and service are required. 4. Demand is derived from the production and sales of buyers. 5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products. 6. The organizational buyers are trained professionals in purchasing. 7. Several persons in organization influence purchase. 8. Lot of buying occurs in direct dealing with manufacturers. Organizational Buying Situations Straight rebuy In this buying situation, only purchasing department is involved. Thet get an information from inventory control department or section to reorder the material or item and they seek quotations from vendors in an approved list. The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to make efforts to get their name list in the approved vendors' list and for this purpose they have to offer

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something new or find out any issues of dissatisfaction with current suppliers and promise to provide better service. Modified rebuy In this buying situation, there is a modification to the specifications of the product or specifications related to delivery. Executives apart from the purchasing department are involved in the buying decisions. The company is looking for additional suppliers or is ready to modify the approved vendors list based on the technical capabilities and delivery capabilities. New task buy In this situation, the buyer is buying the product for the first time. As the cost of the product or consumption value becomes higher, more number of executives are involved in the process. The stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential supplier. Only the products which pass all the stages will be on the approved list and price competition will follow subsequently. Systems buy Systems buying is a process in which the organization gives a single order to a single organization for supplying a full system. The buying organization knows that no single party is producing all the units in the system. But it wants the system seller to engineer the system, procure the units from various vendors and assemble, fabricate or construct the system. Participants in the Business Buying Process Users The persons who use the item. Say for safety gloves the operators. Initiators The persons who request the purchase. The safety officer may initiate the request for the purchase. Influencers Persons who held define specifications. In this case of safety gloves, the safety officer may himself define specifications. If an industrial engineer is in the organization, he may also be consulted. There can a different gloves for different working situations and industrial engineer may be more aware of specific requirements due to his special nature of work - human effort engineering. Buyers They are the person who actually do the buying transaction. Gatekeepers They control access to personnel in a company. The receptionist, the secretaries etc.

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Deciders People who decide on product requireements and suppliers. It is the final approval for product specfications and suppliers' list. Approvers Persons who approve the purchase. In the case of safety gloves, the personal manager may have the power to approve. Major Influencers on Business Buyers Environmental factors Expected demand for the product that the buying organization is selling, expected shortages for the item, expected changes in technology related to the item etc. are the environmental factors that will have an effect. Organizational factors Changes in purchasing department organization like centralized purchasing, decentralized purchasing and changes in purchasing practices like long-term contracts, relationship purchasing, zero-based pricing, vendor-performance evaluation are the organization factors of importance to marketers. Interpersonal factors These factors are the relationship between buyers and sales representatives of various competitor companies. Individual factors These factors related to the buyer. What sort of ways of interacting and service are appreciated by the buyers and what ways are considered as irritants? Marketers have to understand the reactions of buyers. Organizational Buying/Purchasing/Procurement Process Steps in the Process Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order routine specification Supplier performance review

MB0046 Q.4 Explain the different marketing philosophies and its approach. (10 marks)

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The marketing concept and philosophy is one of the simplest ideas in marketing, and at the same time, it is also one of the most important marketing philosophies. At its very core are the customer and his or her satisfaction. The marketing concept and philosophy states that the organization should strive to satisfy its customers' wants and needs while meeting the organization's goals. In simple terms, "the customer is king". The implication of the marketing concept is very important for management. It is not something that the marketing department administers, nor is it the sole domain of the marketing department. Rather, it is adopted by the entire organization. From top management to the lowest levels and across all departments of the organization, it is a philosophy or way of doing business. The customers' needs, wants, and satisfaction should always be foremost in every manager and employees' mind. Wal-Mart's motto of "satisfaction guaranteed" is an example of the marketing concept. Whether the Wal-Mart employee is an accountant or a cashier, the customer is always first. As simple as the philosophy sounds, the concept is not very old in the evolution of marketing thought. However, it is at the end of a succession of business philosophies that cover centuries. To gain a better understanding of the thought leading to the marketing concept, the history and evolution of the marketing concept and philosophy are examined first. Next, the marketing concept and philosophy and some misconceptions about it are discussed. EVOLUTION OF THE MARKETING CONCEPT AND PHILOSOPHY The marketing concept and philosophy evolved as the last of three major philosophies of marketing. These three philosophies are the product, selling, and marketing philosophies. Even though each philosophy has a particular time when it was dominant, a philosophy did not die with the end of its era of dominance. In fact, all three philosophies are being used today. PRODUCT PHILOSOPHY. The product philosophy was the dominant marketing philosophy prior to the Industrial Revolution and continued to the 1920s. The product philosophy holds that the organization knows its product better than anyone or any organization. The company knows what will work in designing and producing the product and what will not work. For example, the company may decide to emphasize the low cost or high quality of their products. This confidence in their ability is not a radical concept, but the confidence leads to the

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consumer being overlooked. Since the organization has the great knowledge and skill in making the product, the organization also assumes it knows what is best for the consumer. This philosophy of only relying on the organization's skill and desires for the product did not lead to poor sales. In much of the product philosophy era, organizations were able to sell all of the products that they made. The success of the product philosophy era is due mostly to the time and level of technology in which it was dominant. The product era spanned both the pre-Industrial Revolution era and much of the time after the Industrial Revolution. The period before the Industrial Revolution was the time when most goods were made by hand. The production was very slow and few goods could be produced. However, there was also a demand for those goods, and the slow production could not fill the demand in many cases. The importance for management of this shortage was that very little marketing was needed. An example illustrates the effects of the shortages. Today, the gunsmith shop in Williamsburg, Virginia, still operates using the product philosophy. The gunsmiths produce single-shot rifles using the technology available during the 1700s. They are only able to produce about four or five rifles every year, and they charge from $15,000 to $20,000 for each rifle. However, the high price does not deter the demand for the guns; their uniqueness commands a waiting list of three to four years. Today's Williamsburg Gunsmith Shop situation was typical for organizations operating before the Industrial Revolution. Most goods were in such short supply that companies could sell all that they made. Consequently, organizations did not need to consult with consumers about designing and producing their products. When mass production techniques created the Industrial Revolution, the volume of output was greatly increased. Yet the increased production of goods did not immediately eliminate the shortages from the pre-industrial era. The new mass production techniques provided economies of scale allowing for lower costs of production and corresponding lower prices for goods. Lower prices greatly expanded the market for the goods, and the new production techniques were struggling to keep up with the demand. This situation meant that the product philosophy would work just as well in the new industrial environment. Consumers still did not need to be consulted for the organization to sell its products. One of the many stories about Henry Ford illustrates the classic example of the product philosophy in use after the Industrial Revolution. Henry Ford pioneered mass production techniques in the automobile industry. With the techniques, he offered cars at affordable prices to the general public. Before this time, cars were hand made, and only the very wealthy could afford them. The public enthusiastically purchased all the Model T Fords that the company could produce. The evidence that the product philosophy was alive and well in Ford Motor Company came in Henry Ford's famous reaction to consumer requests for

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more color options. He was said to have responded that "you can have any color car you want as long as it is black." Realizing that different colors would increase the cost of production and price of the Model T's, Henry Ford, using the product philosophy, decided that lower prices were best for the public. SELLING PHILOSOPHY. The selling era has the shortest period of dominance of the three philosophies. It began to be dominant around 1930 and stayed in widespread use until about 1950. The selling philosophy holds that an organization can sell any product it produces with the use of marketing techniques, such as advertising and personal selling. Organizations could create marketing departments that would be concerned with selling the goods, and the rest of the organization could be left to concentrate on producing the goods. The reason for the emergence of the selling philosophy was the ever-rising number of goods available after the Industrial Revolution. Organizations became progressively more efficient in production, which increased the volume of goods. With the increased supply, competition also entered production. These two events eventually led to the end of product shortages and the creation of surpluses. It was because of the surpluses that organizations turned to the use of advertising and personal selling to reduce their inventories and sell their goods. The selling philosophy also enabled part of the organization to keep focusing on the product, via the product philosophy. In addition, the selling philosophy held that a sales or marketing department could sell whatever the company produced. The Ford Motor Company is also a good example of the selling philosophy and why this philosophy does not work in many instances. Ford produced and sold the Model T for many years. During its production, the automobile market attracted more competition. Not only did the competition begin to offer cars in other colors, the styling of the competition was viewed as modern and the Model T became considered as old-fashioned. Henry Ford's sons were aware of the changes in the automobile market and tried to convince their father to adapt. However, Henry Ford was sure that his standardized low-price automobile was what the public needed. Consequently, Ford turned to marketing techniques to sell the Model T. It continued to sell, but its market share began to drop. Eventually, even Henry Ford had to recognize consumer desires and introduce a new model. The selling philosophy assumes that a well-trained and motivated sales force can sell any product. However, more companies began to realize that it is easier to sell a product that the customer wants, than to sell a product the customer does not want. When many companies began to realize this fact, the selling era gave way to the marketing era of the marketing concept and philosophy.

MB0046 MARKETING PHILOSOPHY.

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The marketing era started to dominate around 1950, and it continues to the present. The marketing concept recognizes that the company's knowledge and skill in designing products may not always be meeting the needs of customers. It also recognizes that even a good sales department cannot sell every product that does not meet consumers' needs. When customers have many choices, they will choose the one that best meets their needs. MARKET CONCEPT AND PHILOSOPHY The marketing concept and philosophy states that the organization should strive to satisfy its customers' wants and needs while meeting the organization's goals. The best way to meet the organization's goals is also by meeting customer needs and wants. The marketing concept's emphasis is to understand the customers before designing and producing a product for them. With the customer's wants and needs incorporated into the design and manufacture of the product, sales and profit goals are far more likely to be met. With the customer's satisfaction the key to the organization, the need to understand the customer is critical. Marketing research techniques have been developed just for that purpose. Smaller organizations may keep close to their customers by simply talking with them. Larger corporations have established methods in place to keep in touch with their customers, be it consumer panels, focus groups, or third-party research studies. Whatever the method, the desire is to know the customers so the organization can better serve them and not lose sight of their needs and wants. The idea of keeping close to the organization's customers seems simple. In reality, it is very easy to forget the customer's needs and wants. Sometimes the management is so involved with the product that their own desires and wants begin to take dominance, even though they have adopted the marketing concept. Yet it is easy for managers to forget the marketing concept and philosophy. For example, many years ago before there was a Subway on every cornera college student opened a small submarine sandwich shop near his university's campus. The sub shop was an immediate success. By using the marketing concept, the young entrepreneuer had recognized an unmet need in the student population and opened a business that met that need. Unfortunately, the story does not end at this point. The sub shop was so successful that it began to outgrow its original location after about three years. The shop moved to a larger location with more parking spaces, also near the university. At the new sub shop, waiters in tuxedos met the students and

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seated them at tables with tablecloths. Besides the traditional subs, the shop now served full meals and had a bar. Within a few months the sub shop was out of business. The owner of the shop had become so involved with his business vision that he forgot the customers' needs and wants. They did not want an upscale restaurantthere were other restaurants in the area that met that need, they just wanted a quick sub sandwich. By losing sight of the customers' wants and needs, the owner of the sub shop lost his successful business. MEETING CUSTOMER NEEDS WHILE MEETING ORGANIZATIONAL GOALS Sometimes in the zeal to satisfy a customer's wants and needs, the marketing concept is construed to mean that the customer is always right. However, the marketing concept also states that it is important to meet organizational goals as well as satisfy customer wants and needs. Satisfying customer needs and organizational goals may involve conflicts that sometimes cannot be resolved. The organization that adopts the marketing concept will do everything in its power to meet the needs of its customers, but it must also make a profit. Sometimes the wants of the customers may include a low price or features that are not attainable for the organization if it is to make a profit. Consequently, the organization must hope for a compromise between what the consumer wants and what is practical for the business to provide. CRITICISM OF THE MARKETING CONCEPT Interpreted literally, the marketing concept only advocates discovering consumers' wants and needs and satisfying them. Critics assert that consumers may not be aware of all of their wants and needs. In the 1950s, were consumers aware of a need to cook their food by sending microwaves through their food? In the 1960s, were consumers aware of a need to have personal computers in their homes? Critics argue that the marketing concept's concentration on consumers' wants and needs stifle innovation. Organizations will no longer concentrate on research and development in hopes that one product in ten might meet with consumer acceptance, and will less likely come up with innovative products such as microwaves and personal computers. Supporters of the marketing concept have contended that it does not stifle innovation and that it does recognize that consumers cannot conceive of every product that they may want or need. However, need is defined in a very broad sense. In the microwave and personal computer examples, the need was not for the specific product, but there was a need to cook food faster and a need for writing and calculating. The microwave and personal computer satisfied those needs though the consumer never imagined these products. The marketing concept does not stifle creativity and innovation. It seeks to encourage creativity to satisfy customer needs.

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The marketing concept is a relative newcomer as a philosophy of doing business. However, its evolution started before the Industrial Revolution. As time progressed, customer and business needs also evolved. The product and selling philosophies eventually evolved into the marketing concept and philosophy. Today, the marketing concept and philosophy stands as a formula for doing business and many believe it is a prescription for success. It aims to satisfy customers by guiding the organization to meet the customers' needs and wants while meeting the organization's goals.

Q. 5 What are the various stages involved in decision process when a consumer is buying new product? Also, explain the adoption process. (10 marks) Definition of Buying Behavior: Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand:

why consumers make the purchases that they make? what factors influence consumer purchases? the changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for:

Buyers reactions to a firms marketing strategy has a great impact on the firms success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. Marketers can better predict how consumers will respond to marketing strategies.

Return to Contents List Stages of the Consumer Buying Process Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next. The 6 stages are: 1. Problem Recognition(awareness of need)--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search--

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Internal search, memory. External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc.

A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is chinese food indian food burger king klondike kates etc Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indian gets highest rank etc. If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives. Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc. Purchase--May differ from decision, time lapse between 4 & 5, product availability. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an indian meal, may think that really you wanted a chinese meal instead.
o o o o

3.

4. 5. 6.

Handout...Pillsbury 1-800#s 1-800 #s gives the consumer a way of communicating with the marketer after purchase. This helps reduce cognitive dissonance when a marketer can answer any concerns of a new consumer. Return to Contents List Types of Consumer Buying Behavior Types of consumer buying behavior are determined by:

Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk:

Personal risk Social risk Economic risk

The four type of consumer buying behavior are:

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Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand. Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. Return to Contents List Categories that Effect the Consumer Buying Decision Process A consumer, making a purchase decision will be affected by the following three factors: 1. Personal 2. Psychological 3. Social The marketer must be aware of these factors in order to develop an appropriate MM for its target market. Return to Contents List Personal Unique to a particular person. Demographic Factors. Sex, Race, Age etc. Who in the family is responsible for the decision making. Young people purchase things for different reasons than older people. Handout...From choices to checkout... Highlights the differences between male and female shoppers in the supermarket.

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Q. 6 Explain briefly the marketing mix elements for an automobile company giving sufficient examples. (10 marks) Marketing mix modeling is a term of art for the use of statistical analysis such as multivariate regressions on sales and marketing time series data to estimate the impact of various marketing tactics on sales and then forecast the impact of future sets of tactics. It is often used to optimize advertising mix and promotional tactics with respect to sales revenue or profit. The techniques were developed by econometricians and were first applied to consumer packaged goods, since manufacturers of those goods had access to good data on sales and marketing support. In the recent times MMM has found acceptance as a trustworthy marketing tool among the major consumer marketing companies Marketing mix model Marketing mix modeling is an analytical approach that use historic information, such as syndicated pointof-sale data an d compan ies internal data , to quantify th e sale s impactof variou s marketin g activities. Mathematically, this is done by establishing a simultaneous relation of various marketing activities with the sales, in the form of a linear or a non-linear equation, through the statistical technique of regression. MMM defines the effectiveness of each of the marketing elements in terms of its contribution to salesvolume, effectiveness (volume generated by each unit of effort), efficiency (sales volume generated divided by cost) and ROI. These learnings are then adopted to adjust marketing tactics and strategies, optimize the marketing plan and also to forecast sales while simulating various scenarios.

Elements in MMM This is accomplished by setting up a model with the sales volume/value as the dependent variable and independent variables created out of the various marketing efforts. The creation of variables for Marketing Mix Modeling is a complicated affair and is as much an art as it is a science. Once the variables are created, multiple iterations are carried out to create a model which explains the

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volume/value trends perfectly. Further validations are carried out, either by using a validation data, or by the consistency of the business results. The output can be used to analyze the impact of the marketing elements on various dimensions. The contribution of each element as a percentage of the total plotted year on year is a good indicator of how the effectiveness of various elements changes over the years. The yearly change in contribution is also measure by a due-to analysis which shows what percentage of the change in total sales is attributable to each of the elements. For activities like television advertising and trade promotions, more sophisticated analysis like effectiveness can be carried out. This analysis tells the marketing manager the incremental gain in sales that can be obtained by increasing the respective marketing element by one unit. If detailed spend information per activity is available then it is possible to calculate the Return on Investment of the marketing activity. Not only is this useful for reporting the historical effectiveness of the activity, it also helps in optimizing the marketing budget by identifying the most and least efficient marketing activities. On ce the final mode lis ready, th e results fro m it canbe use d to simulate marketing sce n a s for a rio What- if analysis. The marketing mana ger can reallocate this marketing budget in different proportions and see the direct impact on sales/value. He can optimize the budget by allocating spends to those activities which give the highest return on investment. [edit]Components Marketing-mix models decompose total sales into two components: Base Sales: This is the natural demand for the product driven by economic factors like pricing, long-term trends, seasonality, and also qualitative factors like brand awareness and brand loyalty. Incremental Sales: Incremental sales are the component of sales driven by marketing and promotional activities. This component can be further decomposed into sales due to each marketing component like Television advertising or Radio advertising, Print Advertising(magazines, newspapers etc.), Coupons, Direct Mail, Internet, Feature or Display Promotions and Temporary Price Reductions. Some of these activities have short-term returns (Coupons, Promotions), while others have longer term returns (TV, Radio, Magazine/Print). Marketing-Mix analyses are typically carried out using Linear Regression Modeling. Nonlinear and lagged effects are included using techniques like Advertising Adstock transformations. Typical output of such analyses include a decomposition of total annual sales into contributions from each marketing component, a.k.a Contribution pie-chart.

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Another standard output is a decomposition of year-over year sales growth/decline , a.k.a Due-to charts.

MB0046 Elements measured in MMM Base and incremental volume

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The very break-up of sales volume into base (volume that would be generated in absence of any marketing activity) and incremental (volume generated by marketing activities in the short run) across time gain gives wonderful insights. The base grows or declines across longer periods of time while the activities generating the incremental volume in the short run also impact the base volume in the long run. The variation in the base volume is a good indicator of the strength of the brand and the loyalty it commands from its users. Media and advertising Market mix modeling can determine the sales impact generated by individual media such as television, magazine, and online display ads. In some cases it can be used to determine the impact of individual advertising campaigns or even ad executions upon sales. For example, for TV advertising activity, it is possible to examine how each ad execution has performed in the market in terms of its impact on sales volume. MMM can also provide information on TV effectiveness at different media weight levels, as measured by Gross Rating Points (GRP) in relation to sales volume response within a time frame, be it a week or a month. Information can also be gained on the minimum level of GRPs (threshold limit) in a week that need to be aired in order to make an impact, and conversely, the level of GRPs at which the impact on volume maximizes (saturation limit) and that the further activity does not have any payback. While not all MMM's will be able to produce definitive answers to all questions, some additional areas in which insights can sometimes be gained include: 1) the effectiveness of 15-second vis--vis 30-second executions; 2)comparisons in ad performance when run during prime-time vis--vis off-prime-time dayparts; 3) comparisons into the direct and the halo effect of TV activity across various products or subbrands. The role of new product based TV activity and the equity based TV activity in growing the brand can also be compared Trade promotions Trade promotion is a key activity in every marketing plan. It is aimed at increasing sales in the short term by employing promotion schemes which effectively increases the customer awareness of the business and its products. The response of consumers to trade promotions is not straight forward and is the subject of much debate. Non-linear models exist to simulate the response. Using MMM we can understand the impact of trade promotion at generating incremental volumes. It is possible to obtain an estimate of the volume generated per promotion event in each of the different retail outlets by region. This way we can identify the most and least effective trade channels. If detailed spend information is available we can compare the Return on Investment of various trade activities like Every Day Low Price, Off-Shelf Display etc. We can use this information to optimize the trade plan by choosing the most effective trade channels and targeting the most effective promotion activity

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Price changes of the brand impacts the sales negatively. This effect can be captured through modeling the price in MMM. The model provides the price elasticity of the brand which tells us the percentage change in the sales for each percentage change in price. Using this, the marketing manager can evaluate the impact of a price change decision. [edit]Distribution For the element of distribution, we can know how the volume will move by changing distribution efforts or, in other words, by each percentage shift in the width or the depth of distribution. This can be identified specifically for each channel and even for each kind of outlet for off-take sales. In view of these insights, the distribution efforts can be prioritized for each channel or store-type to get the maximum out of the same. A recent study of a laundry brand showed that the incremental volume through 1% more presence in a neighborhood Kirana store is 180% greater than that through 1% more presence in a supermarket.
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Based upon the cost of such efforts, managers identified the right channel to invest

more for distribution. [edit]Launches When a new product is launched, the associated publicity and promotions typically results in higher volume generation than expected. This extra volume cannot be completely captured in the model using the existing variables. Often special variables to capture this incremental effect of launches are used. The combined contribution of these variables and that of the marketing effort associated with the launch will give the total launch contribution. Different launches can be compared by calculating their effectiveness and ROI. [edit]Competition The impact of competition on the brand sales is captured by creating the competition variables accordingly. The variables are created from the marketing activities of the competition like television advertising, trade promotions, product launches etc. The results from the model can be used to identify the biggest threat to own brand sales from competition. The cross-price elasticity and the crosspromotional elasticity can be used to devise appropriate response to competition tactics. A successful competitive campaign can be analyzed to learn valuable lesson for the own brand. [edit]Studies in MMM Typical MMM studies provide the following insights

Contribution by marketing activity ROI by marketing activity Effectiveness of marketing activity

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Optimal distribution of spends Learnings on how to execute each activity better e.g. optimal GRPs per week, optimal

distribution between 15s and 30s, which promos to run, what SKUS to put on promotion etc. Adoption of MMM by the industry MMM is a relatively new area of application. In the last 10 years though many CPG companies have adopted MMM. Many Fortune 500 companies such as P&G, Kraft, Coca-Cola and Pepsi have made MMM an integral part of their marketing planning. This has also been made possible due to the availability of specialist firms that are now providing MMM services. Marketing-mix models were more popular initially the CPG industry and quickly spread to Retail and Pharma industries because of the availability of Syndicated Data in these industries (primarily from Nielsen Company and SymphonyIRI Group and to a lesser extent from NPD Group). Availability of Time-series data is crucial to robust modeling of marketing-mix effects and with the systematic management of customer data through CRM systems in other industries like Financial Services, Automotive and Hospitality industries helped its spread to these industries. In addition competitive and industry data availability through third-party sources like Forrester Research's Ultimate Consumer Panel (Financial Services), Polk Insights (Automotive) and Smith Travel Research (Hospitality), further enhanced the application of marketing-mix modeling to these industries. Application of marketing-mix modeling to these industries is still in a nascent stage and a lot of standardization needs to be brought about especially in these areas:

Interpretation of promotional activities across industries for e.g. promotions in CPG do not have lagged effects as they happen in-store, but automotive and hospitality promotions are usually deployed through the internet or through dealer marketing and can have longer lags in their impact. CPG promotions are usually absolute price discounts, whereas Automotive promotions can be cashbacks or loan incentives, and Financial Services promotions are usually interest rate discounts.

Hospitality industry marketing has a very heavy seasonal pattern and most marketing-mix models will tend to confound marketing effectiveness with seasonality, thus over or under estimating marketing ROI. Time-series Cross-Sectional models like 'Pooled Regression' need to be utilized, which increase sample size and variation and thus make a robust separation of pure marketing-effects from seasonality.

Automotive Manufacturers spend a substantial amount of their marketing budgets on dealer advertising, which may not be accurately measurable if not modeled at the right level of aggregation. If modeled at the national level or even the market or DMA level, these effects may be lost in aggregation bias. On the other hand going all the way down to dealer-level may over-estimate marketing effectiveness as it would ignore consumer switching between dealers in the same area. The

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correct albeit rigorous approach would be to determine what dealers to combine into 'addable' common groups based on overlapping 'trade-areas' determined by consumer zip codes and crossshopping information. At the very least 'Common Dealer Areas' can be determined by clustering dealers based on geographical distance between dealers and share of county sales. Marketing-mix models built by 'pooling' monthly sales for these dealer clusters will be effectively used to measure the impact of dealer advertising effectively. The proliferation of marketing-mix modeling was also accelerated due to the focus from Sarbanes-Oxley Section 404 that required internal controls for financial reporting on significant expenses and outlays. Marketing for consumer goods can be in excess of a 10th of total revenues and until the advent of marketing-mix models, relied on qualitative or 'soft' approaches to evaluate this spend. Marketing-mix modeling presented a rigorous and consistent approach to evaluate marketing-mix investments as the CPG industry had already demonstrated. A study by American Marketing Association pointed out that top management was more likely to stress the importance of marketing accountability than middle management, suggesting a top-down push towards greater accountability. Limitations While marketing mix models provide much useful information, there are two key areas in which these models have limitations that should be taken into account by all of those that use these models for decisionmaking purposes. These limitations, discussed more fully below, include: 1) the focus on short-term sales can significantly under-value the importance of longer-term equity building activities; and 2) when used for media mix optimization, these models have a clear bias in favor of time-specific media (such as TV commercials) versus less time-specific media (such as ads appearing in monthly magazines); biases can also occur when comparing broad-based media versus regionally or demographically targeted media. In relation to the bias against equity building activities, marketing budgets optimized using marketingmix models may tend too much towards efficiency because marketing-mix models measure only the short-term effects of marketing. Longer term effects of marketing are reflected in its brand equity. The impact of marketing spend on [brand equity] is usually not captured by marketing-mix models. One reason is that the longer duration that marketing takes to impact brand perception extends beyond the simultaneous or, at best, weeks-ahead impact of marketing on sales that these models measure. The other reason is that temporary fluctuation in sales due to economic and social conditions do not necessarily mean that marketing has been ineffective in building brand equity. On the contrary, it is very possible that in the short term sales and market-share could deteriorate, but brand equity could actually be higher. This higher equity should in the long run help the brand recover sales and market-share.

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Because marketing-mix models suggest a marketing tactic has a positive impact on sales doesn't necessarily mean it has a positive impact on long-term brand equity. Different marketing measures impact short-term and long-term brand sales differently and adjusting the marketing portfolio to maximize either the short-term or the long-term alone will be sub-optimal. For example the short-term positive effect of promotions on consumers utility in d u s con su ce mers to sw tch to the promoted brand, but the i advers e impact of promotions on brand equity carries over from period to period. Therefore the net effect of promotions on a brands marke t s hare an d profitability c a nb e n egative d u eto their a dverse imp a c t on brand. Determining marketing ROI on the basis of marketing-mix models alone can lead to misleading results. This is because marketing-mix attempts to optimize marketing-mix to increase incremental contribution, but marketing-mix also drives brand-equity, which is not part of the incremental part measured by marketing-mix model- it is part of the baseline. True 'Return on Marketing Investment' is a sum of short-term and long-term ROI. The fact that most firms use marketing-mix models only to measure the short-term ROI can be inferred from an article by Booz Allen Hamilton, which suggests that there is a significant shift away from traditional media to 'below-the-line' spending, driven by the fact that promotional spending is easier to measure. But academic studies have shown that promotional activities are in fact detrimental to long-term marketing ROI (Ataman et al., 2006). Short-term marketing-mix models can be combined with brand-equity models using brand-tracking data to measure 'brand ROI', in both the short- and long-term. The second limitation of marketing mix models comes into play when advertisers attempt to use these models to determine the best media allocation across different media types. The traditional use of MMM's to compare money spent on TV versus money spent on couponing was relatively valid in that both TV commercials and the appearance of coupons (for example, in a FSI run in a newspaper) were both quite time specific. However, as the use of these models has been expanded into comparisons across a wider range of media types, extreme caution should be used. Even with traditional media such as magazine advertising, the use of MMM's to compare results across media can be problematic; while the modelers overlay models of the 'typical' viewing curves of monthly magazines, these lack in precision, and thus introduce additional variability into the equation. Thus, comparisons of the effectiveness of running a TV commercial versus the effectiveness of running a magazine ad would be biased in favor of TV, with its greater precision of measurement. As new new forms of media proliferate, these limitations become even more important to consider if MMM's are to be used in attempts to quantify their effectiveness. For example, Sponsorship Marketing, Sports Affinity Marketing, Viral Marketing, Blog Marketing and Mobile Marketing all vary in terms of the timespecificity of exposure. Further, most approaches to marketing-mix models try to include all marketing activities in aggregate at the national or regional level, but to the extent that various tactics are targeted to different demographic

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consumer groups, their impact may be lost. For example, Mountain Dew sponsorhip of NASCAR may be targeted to NASCAR fans, which may include multiple age groups, but Mountain Dew advertising on gaming blogs may be targeted to the Gen Y population. Both of these tactics may be highly effective within the corresponding demographic groups but, when included in aggregate in a national or regional marketing-mix model, may come up as ineffective. Aggregation bias, along with issues relating to variations in the time-specific natures of different media, pose serious problems when these models are used in ways beyond those for which they were originally designed. As media become even more fragmented, it is critical that these issues are taken into account if marketing-mix models are used to judge the relative effectiveness of different media and tactics. Marketing-mix models use historical performance to evaulate marketing performance and so are not an effective tool to manage marketing investments for new products. This is because the relatively short history of new products make marketing-mix results unstable. Also relationship between marketing and sales may be radically different in the launch and stable periods. For example the initial performance of Coke Zero was really poor and showed low advertising elasticity. In spite of this Coke increased its media spend, with an improved strategy and radically improved its performance resulting in advertising effectiveness that is probably several times the effectiveness during the launch period. A typical marketing-mix model would have recommended cutting media spend and instead resorting to heavy price discounting.

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Master of Business Administration - MBA Semester 2 MB0046 Marketing Management - 4 Credits Assignment Set- 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions. Q.1 What is product mix? What are the strategies involved in product mix and product line? (10 marks) Product Mix Product mix is a combination of products manufactured or traded by the same business house to reinforce their presence in the market, increase market share and increase the turnover for more profitability. Normally the product mix is within the synergy of other products for a medium size organization. However large groups of Industries may have diversified products within core competency. Larsen & Toubro Ltd, Godrej, Reliance in India are some of the examples. One of the realities of business is that most firms deal with multi-products .This helps a firm diffuse its risk across different product groups/Also it enables the firm to appeal to a much larger group of customers or to different needs of the same customer group .So when Videocon chose to diversify into other consumer durables like music systems ,washing machines and refrigerators ,it sought to satisfy the needs of the middle and upper middle income group of consumers. Likewise , Bajaj Electricals.a household name in India, has almost ninety products in i8ts portfolio ranging from low value items like bulbs to high priced consumer durables like mixers and luminaires and lighting projects .The number of products carried by a firm at a given point of time is called its product mix. This product mix contains product lines and produ ct items .In other words its a compos of ite products offered for sale by a firm. Product Mix and product line Decisions Often firms take decisions to change their product mix. These decisions are dictated by the above factors and also by the changes occurring in the market place. Like the changing life-styles of Indian consumers led BPL-Sanyo to launch an entire range of white goods like refrigerators , washing machines, and microwave ovens .It also motivate the firm to launch other entertainment electronics. Rahejas, a wellknown builders firm in Bombay, took a major decision to convert one of its theatre buildings in the western suburbs of Bombay into a large garments and accessories store for men ,women and children, perhaps the first of its kind in India to have almost all products required by these customer groups Competition from low priced washing powders (mainly Nirma) forced Hindustan Levers to launch different brands of detergent powder at different price levels positioned at different market segments .Customer preferences for herbs, mainly shikakai motivated Lever to launch black Sunsilk Shampoo ,which has shikakai .Also ,low purchasing power. and cultural bias against shampoo market made Hindustan Lever consider smaller packaging mainly sachets , for single use .So, it is the changes or anticipated changes in the market place that motivates a firm to consider changes in its product mix.

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Q.2 What is a distribution channel? Explain the factors to be considered while setting up a distribution channel. (10 marks) Path or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and thepayments generated by them flow in the opposite direction (from consumer to the vendor). A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usuallyindependent but mutually dependent) intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point andmoves it to the next higher pricing point until it reaches thefinal buyer. Also called channel of distribution or marketing channel. The distribution channel Distribution is also a very important component of Logistics & Supply chain management. Distribution in supply chain management refers to the distribution of a good from one business to another. It can be factory to supplier, supplier to retailer, or retailer to end customer. It is defined as a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user. Channels A number of alternate 'channels' of distribution may be available:

Distributor, who sells to retailers, Retailer (also called dealer or reseller), who sells to end customers Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alice from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. process of transfer the products or services from Producer to Customer or end user. There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

MB0046 Channel decisions Channel Sales is nothing but a chain for to market a product through different sources.

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Channel strategy Gravity & Gravity Push and Pull strategy Product (or service) Cost

Consumer location Managerial concerns The channel decision is very important. In theory at least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be market-oriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier:

Channel membership Channel motivation

Monitoring and managing channels Type of marketing channel 1. Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident. 2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. 3. Exclusive distribution - Only lambard specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'. Channel motivation It is difficult enough to motivate direct employees to provide the necessary sales and service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is

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`incentive': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a compensation is offered to the distributors' sales personnel, so that they are tempted to push the product. Julian Dent defines this incentive as a Channel Value Proposition or business case, with which the supplier sells the channel member on the commercial merits of doing business together. He describes this as selling business models not products. Monitoring and managing channels In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain. In practice, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts, with agents, covering the smaller customers and prospects. These channels show marketing strategies of an organization. Effective management of distribution channel requires making and implementing decision in these areas.

Q.3 Discuss the communication development process with examples. (10 marks) Communication development process, has been alternatively defined as a type of marketing and public opinion research that is used specifically to develop effective communication or as the use of communication to promote social development. Defined as the former, it often includes computerized linguistics analysis of verbatim responses to qualitative survey interviews and may, at times also involved consumer psychological "right brain" (emotional) research techniques. Defined at the latter, it refers to the practice of systematically applying the processes, strategies, and principles of communication to bring about positive social change. As most providers of "communication development" research use proprietary approaches that cannot be elaborated upon without revealing proprietary trade secrets, the remainder of this article describes the latter definition.
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The practice of development communication can

be traced back to efforts undertaken in various parts of the world during the 1940s, but the widespread application of the concept came about because of the problems that arose in the aftermath of World War II . The rise of the communication sciences in the 1950s saw a recognition of the field as an academic discipline, with Daniel Lerner, Wilbur Schramm, and Everett Rogers being the earliest influential advocates. The term "Development Communication" was first coined in 1972 by Nora C. Quebral, who defines the field as "the art and science of human communication linked to a society's planned transformation from a state of poverty to one of dynamic socio-economic growth that makes for greater equity and the larger unfolding of individual potential."
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The theory and practice of development communication continues to evolve today, with different approaches and perspectives unique to the varied development contexts the field has grown in.
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Development communication is characterized by conceptual flexibility and diversity of communication technique s used to address th e problem. S ome ap p roach e s in the tool kit of th e field include : information dissemination and education, behavior change, social marketing, social mobilization, media advocacy, communication for social change, and participatory development communication.

The history of organised development communication in India can be traced to rural radio broadcasts in the 1940s. As is logical, the broadcasts used indigenous languages such as Hindi, Marathi, Gujarati and Kannada. Independent India's earliest organized experiments in development communication started with Community Development projects initiated by the union government in 1950's. The government, guided by socialistic ideals of its constitution and the first generation of politicians, started massive developmental programmes throughout the country. While field publicity was given due importance for person-to-person communication - also because the level of literacy was very low in rural areas - radio played an equally important role in reaching messages to the masses. Universities and other educational institutions - especially the agricultural universities, through their extension networks - and international organisations under the UN umbrella carried the dev-comm experiments further. Development communication in India, a country of sub-continental proportions, acquires many connotations. On one end of the spectrum are the tools and techniques locally applied by charitable and not-for-profit organisations with very close inter-personal relations among the communicators and on the other end is the generic, far-off, one-way sort of communication emanating from the government. The need for development communication continues since a large population, over 600 million, lives in rural areas and depends directly on agriculture. Poverty is reducing as percentage of population but still over 200 million are very poor as of 2009. They all, and the urban slum dwellers, need government support in different forms. Therefore, communication from the government remains highly relevant. In addition to the traditional ways, a new form of communication is being tried by the union government to support its developmental activities, though at a limited scale. Called Public Information Campaigns, public shows are organised in remote areas where information on social and developmental schemes is given, seminars and workshops are held, villagers and their children are engaged in competitions, messages are given through entertainment shows. In addition, government organisations and corporates involved in rural businesses display their wares and services in stalls lining the main exhibition area. This approach brings various implementing agencies and service / goods providers while the information providers encourage the visitors to make the best use of various schemes and services available. Some

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state [=provincial] governments have also adopted this model to take their development schemes to the masses. Community radio is another new medium getting a foothold in rural India, though in patches. NGOs and educational institutions are given licence to set up a local community radio station to broadcast information, advisories and messages on developmental aspects. Participation of local community is encouraged. As community radio provides a platform to villagers to broadcast local issues, it has the potential to elicit positive action from local politicians and civil servants.

Q.4. Select any mobile handset and mobile company and then evaluate its positioning strengths or weakness in terms of attributes, benefits, values, brand name and brand equity. (10 marks)

The new Galaxy S2 from Samsung could prove among the most substantial gadget launches with the coming yr. Subsequent on from the really ideal advertising Galaxy, the manufacturers have raised the bar with this new model, fitting in an improved screen and a lightning speedy new dual core processor. Now, the successor is made, namely the Samsung Galaxy S2. And this handset is coming up, first of all announced at Cellular Planet Congress of 2011. An incredible deal of rumors exposed it right just ahead of the MWC function was held. Then now youll be able to examine it which specs are accurate and fake. In situation youre now acquiring the original Galaxy S with you, you might be somewhat shocked taking a look at what Samsung has improved in it. The new handset is expected to begin attacking the present fresh smartphones within the market with its new exceptional attributes and specs. One of the most-discussed factors may very well be the Super AMOLED As well as display, featuring a brand new tech with greater color gamut, contrast ratio and obvious 80 per cent reduction in vitality above the earlier display version. Without doubt with regards to excellent, the exhibit seems to be as quite excellent because the hallowed Retina program thats found on the iPhone 4. Samsung have additional there very personal user interface on top of your Android working system that the cell phone utilizes. With every one of the enhanced voice technologies on the Samsung GALAXY S II, clients is going to be ready to finish extra with considerably less. From opening the app to managing the messaging, social media, e-mail and calling, Samsung Voice Remedy will recognizes voice and convert it to text and vice versa. The Android two.3.1 (Gingerbread) is set up around the telephone, that is definitely expected to be upgradable to Android two.4 inside the potential, and by natural means Samsung would validate it later on when every thing is prepared properly. Additionally, you may uncover some new attributes such as Photograph Editor to get played, and it really is a lot much more astonishing, for your dual core processing energy supports the general overall performance flawlessly. Samsung Galaxy 2 Contract Possibly more impressive might be the video capture facility which goes over and above the High definition filming offered on other phones, and offers us Complete Hd, which is frequently a resolution of 1080P instead of 720P. Storage need to have not be considered a matter since the S2 not simply has 16GB of internal room but in addition gives a micro SD card slot, enabling you to extend this by as significantly as 32GB.

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The phone also provides users DNLA compatibility, meaning your images and video clips could be wirelessly streamed to other products for instance televisions and computer systems. This truly is the handset that is worth every single penny you invest, even it may be the next leading mobile phone

to be crowned a fantastic deal of rewards, as you possibly expected.

Q. 5 What is retailing? Explain the functions and different types of retailing with its key features. (10 marks) Retail consists of the sale of goods or merchandise from a fixed location, such as adepartment store, boutique or kiosk, or by mail, in small or individual lots for directconsumption by the purchaser.
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Retailing may include subordinated services, such as delivery. Purchasers may be individuals

or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in ashopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type ofelectronic commerce used for business-toconsumer (B2C) transactions and mail order, are forms of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase. A marketplace is a location where goods and services are exchanged. The traditionalmarket square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world. In some parts of the world, the retail business is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. Retail is usually classified by type of products as follows:

Food products Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc. Soft goods - clothing, apparel, and other fabrics.

There are the following types of retailers by marketing strategy:

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Department stores - very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety of categories and has broad assortment at average price. They offer considerable customer service.

Discount stores - tend to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. Normally retailers sell less fashion-oriented brands.

Supermarkets - sell mostly food products; Warehouse stores - warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee; Variety stores or "dollar stores" - these offer extremely low-cost goods, with limited selection; Demographic - retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals). Mom-And-Pop (or Kirana Stores as they call them in India): is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are family-run businesses. The square feet area of the store depends on the store holder.

Specialty stores: A typical speciality store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be regarded as a specialty store. However, branded stores also come under this format. For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores.

General store - a rural store that supplies the main needs for the local community; Convenience stores: is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases.

Hypermarkets: provides variety and huge volumes of exclusive merchandise at low margins. The ope ratin g cost is comparatively less th a nother retail formats. A classic ex ample is th e Metro in Bangalore. Supermarkets: is a self service store consisting mainly of grocery and limited products on non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be anywhere between 20,000-40,000 square feet. Example: SPAR supermarket. Malls: has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore, Express Avenue in Chennai.

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Category killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. For example: Pai Electronics store in Ba ngalore , Tata Croma .

E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer's doorstep. Here the retailers use drop shipping technique. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. However it is important for the customer to be wary about defective products and non secure credit card transaction. Example: Amazon and Ebay.

Vending Machines: This is an automated piece of equipment wherein customers can drop in the money in machine and acquire the products. For example: Soft drinks vending at Bangalore Airport.

Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Other types of retail store include:

Automated Retail stores are self service, robotic kiosks located in airports, malls and grocery stores. The stores accept credit cards and are usually open 24/7. Examples include ZoomShops and Redbox.

Big-box stores encompass larger department, discount, general merchandise, and warehouse stores. Convenience store - a small store often with extended hours, stocking everyday or roadside items; General store - a store which sells most goods needed, typically in a rural area;

Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display products well and entice the target customers to spawn sales. [edit]Retail pricing The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailer's cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.

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In Western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly displayed, there can be price discrimination, where the sale price is dependent upon who the customer is. For example, a customer may have to pay more if the seller determines that he or she is willing and/or able to. Another example would be the practice of discounting for youths, students, or senior citizens.. [edit]Transfer mechanism There are several ways in which consumers can receive goods from a retailer:

Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries like India.
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Delivery, where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalog was invented in 1744 and was common in the late 19th and early 20th centuries. Ordering by telephone is now common, either from a catalog, newspaper,television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery). Direct marketing, includingtelemarketing and television shopping channels, are also used to generate telephone orders. Online shopping started gaining significant market share in developed countries in the 2000s.

Door-to-door sales, where the salesperson sometimes travels with the goods for sale.

Self-service, where goods may be handled and examined prior to purchase [edit]Second hand retail See also: Charity shop Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goods to the shop to be sold. In give-away shopsgoods can be taken for free. Another form is the pawnshop, in which goods are sold that were used as collateral for loans. There are also "consignment" shops, which are where a person can place an item in a store and if it sells, the person gives the shop owner a percentage of the sale price. The advantage of selling an item this way is that the established shop gives the item exposure to more potential buyers. [edit]Sales techniques Behind the scenes at retail, there is another factor at work. Corporations and independent store owners alike are always trying to get the edge on their competitors. One way to do this is to hire a merchandising solutions company to design custom store displays that will attract more customers in a certain demographic. The nation's largest retailers spend millions every year on instore marketing programs that correspond to seasonal and promotional changes. As products change, so

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will a retail landscape. Retailers can also use facing techniques to create the look of a perfectly stocked store, even when it is not. A destination store is one that customers will initiate a trip specifically to visit, sometimes over a large area. These stores are often used to "anchor" a shopping mall or plaza, generating foot traffic, which is capitalized upon by smaller retailers.

Q. 6 a. What is CRM? What are its objectives? (2 marks) CRM, or Customer Relationship Management, is a company-wide business strategydesigned to reduce costs and increase profitability by solidifying customersatisfaction, loyalty, and advocacy. True CRM brings together information from alldata sources within an organization (and where appropriate, from outside theorganization) to give one, holistic view of each customer in real time. This allowscustomer facing employees in such areas as sales, customer support, and marketing tomake quick yet informed decisions on everything from cross-selling and upsellingopportunities to target marketing strategies to competitive positioning tactics. CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers b. Write a short note on Brand development. (8 marks) Brand Development For any product or service to have a successful take-off, it is vital to pay attention to its brand development. In this day and age, without branding a product does not really stand a chance against its competitors. This holds true for a website too. Brand development is quite necessary to get the attention of the audience, earning their loyalty and finally making profits. It is all about creating the right buzz about your business. And only the correct equity, positioning, identity and development will help you generate the business that you want. Our strategy, when it comes to brand development, focuses on three major aspects, namely Logo Design, Marketing Materials and Style Guide. Let us take a deeper look into the mode of our functioning for a successful brand development: Industry-leading Brand Development Creates Market Leaders If your company isnt ta ppin g th e p o w e rwithin yo u r bra n ddevelo pme n t strateg y, yo ure lo sin g mo n e Plain and simple! A well-conceived brand development strategy has the power to inspire both y. your employees to do their jobs better and your customers to remain loyal to your brand. Sound like something you need? Brand Identity Guru Inc. is the place to get it.

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Bra n d developmen t is Brand Id e n Gurus In c. sp e c tity ialty. Ou r bra n dreinve ntio n process helps companies of any size truly understand their brand development (where it is and where it needs to be) and leverage it to its fullest advantage. The process is called the BrandMasterpiece. After going through the BrandMasterpiece process, your new brand development strategy will positively affect you r comp an b otto m lineguaranteed. We also guarantee a healthy transformation of the way ys you d o b u s iness . It sounds scary, but we promise, youll be thrille d! After our proprietary me asu s re and methodologies amass a complete picture of the state of your brand development, youll wonder how you ever survived doing things differently. Improvin g bran d d evelo pmen t is w hat were a b o Nothin g else. For 1 5 years, weve b e e nteac hin g ut. o u r clients how to improve their images, reputations, and their bottom lines with on-target brand development strategies. The cutting edge research that led to the creation of our proprietary processes showed the major in-depth correlations between brand recognition and company value. The results? Brand action plans guaranteed to boost your bottom line. No other branding firm can guarantee that! Scott White, our founder and CEO, has been heralded numerous times by countless academics, CEOs and CFOs for his work and conclusions on th e scie n c eo f bra n ddevelopment. Likewise, Scotts exp ertis e ha s resulted in the difference of millions of dollars for both businesses and investors who have retained his services. His unmatched thinking and strategic know-how has changed the way businesses make decisions and use their resources. No forward-thinking executive has ever ignored him. Bra n d Id e n Gurus In c. focu s is simple: ge t every ou n ce produ tity of ctivity out of its clients brand development efforts. But its capabilities, the way it accomplishes this goal, are wide-rangingthey need to be. Every company is different and needs a unique brand development strategy to be successful. Brand Identity Guru is thebranding company every company, regardless of size or market, can find theirs.