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Master of Business Administration-MBA Semester 2

Marketing Management MB0046

(Book ID: B1135)

Assignment Set- 1

Q.1 What is Marketing Information System? Explain its characteristics, benefits and information

types.

Ans.

A Marketing Information System can be defined as a system in which marketing information is formallygathered, stored, analysed and distributed to managers in accord with their informational needs on aregular basis. Set of proceduresand practices employed in analyzing andassessingmarketing information, gathered continuously from sources inside andoutside of a firm. Timelymarketing information provides basis for decisions such asdevelopmentor improvement, pricing, packaging, distribution,media selection, and promotion.

Characteristics of MIS

Philip Kotler defines MIS as a system that consists of people, equipment and procedures to gather,sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decisionmakers. 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, foruse as the basis of marketing decision making.3. It provides right information at the right time to the right person. A well designed MIS serves as acompanys nerve centre, continuously monitoring the market environment both inside and outside theorganization. In the process, it collects lot of data and stores in the form of a database which is maintainedin an organized manner. Marketers classify and analyze this data from the database as needed.

Benefits of MIS (Marketing Information System)

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 controlresponsibilities more effectively.2. It ensures effective tapping of marketing opportunities and enables the company to develop effectivesafeguard 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 qualityof decision making.

http://www.businessdictionary.com/definition/procedure.htmlhttp://www.businessdictionary.com/definition/marketing.htmlhttp://www.investorwords.com/10504/outside.htmlhttp://www.businessdictionary.com/definition/product-development.htmlhttp://www.businessdictionary.com/definition/pricing.htmlhttp://www.businessdictionary.com/definition/media.htmlhttp://www.businessdictionary.com/definition/procedure.htmlhttp://www.businessdictionary.com/definition/procedure.htmlhttp://www.businessdictionary.com/definition/marketing.htmlhttp://www.investorwords.com/10504/outside.htmlhttp://www.businessdictionary.com/definition/product-development.htmlhttp://www.businessdictionary.com/definition/pricing.htmlhttp://www.businessdictionary.com/definition/media.html

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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,orannual interval. This includes data such as sales, Market Share, sales call reports inventorylevels, payables, and receivables etc. which are made available regularly. Information oncustomer awareness of companys brands, advertising campaigns and similar data on close competitorscan also be provided.

2. Monitoring Information is the data obtained from regular scanning of certain sources such as tradejournals and other publications. Here relevant data from external environment is captured to monitorchanges 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 Researchagencies or from Government sources.

3. Problem related or customized information is developed in response to some specific requirementrelated to a marketing problem or any particular data requested by a manager. Primary Data or SecondaryData (or both) are collected through survey Research in response to specific need. For example, if thecompany has developed a new product, the marketing manager may want to find out the opinion of thetarget customers before launching the product in the market. Such data is generated by conducting amarket research study with adequate sample size, and the findings obtained are used to help decidewhether the product is accepted and can be launched.

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Q.2 a. Examine how a firms macro environment operates.

b. Mention the key points in Psychoanalytic model of consumer behaviour.

Ans.The term micro-environment denotes those elements over which the marketing firm has control or which

it can use in order to gain information that will better help it in its marketing operations. In other words,these are elements that can be manipulated, or used to glean information, in order to provide fullersatisfaction to the companys customers. The objective of marketing philosophy is to make profits throughsatisfying customers. This is accomplished through the manipulation of the variables over which acompany has control in such a way as to optimise this objective. The variables are what Neil Borden hastermed the marketing mix which is a combination of all the ingredients in a recipe that is designed to

prove most attractive to customers. In this case the ingredients are individual elements that marketing canmanipulate into the most appropriate mix. E Jerome McCarthy further dubbed the variables that thecompany can control in order to reach its target market the four Ps. Each of these is discussed in detail inlater chapters, but a brief discussion now follows upon each of these elements of the marketing mixtogether with an explanation of how they fit into the overall notion of marketing. A scan of the external

macro-environment in which the firm operates can be expressed in terms of the following factors:PoliticalEconomicSocialTechnologicalThe acronym PEST(or sometimes rearranged as STEP) is used to describe a framework for the analysis of these macroenvironmental factors. A PEST analysis fits into an overall environmental scan as shown in the followingdiagram:Environmental Scan/External Analysis/ Internal AnalysisMacro environment Microenvironment|P.E.S.T.Political FactorsPolitical factors include government regulations and legal issues and define both formal andinformal rulesunder which the firm must operate. Some examples include:tax policyemployment lawsenvironmental regulations

trade restrictions and tariffspolitical stability

Economic FactorsEconomic factors affect the purchasing power of potential customers and the firms cost of capital. Thefollowing are examples of factors in the macroeconomy:economic growthinterest ratesexchange ratesinflation rate

Social Factors

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Social factors include the demographic and cultural aspects of the external macro environment. Thesefactors affect customer needs and the size of potential markets. Some social factors include:health consciousnesspopulation growth rateage distribution

career attitudesemphasis on safety

Technological Factors

Technological factors can lower barriers to entry, reduce minimum efficient production levels, andinfluence outsourcing decisions. Some technological factors include:R&D activityautomationtechnology incentivesrate of technological change

External Opportunities and Threats

The PEST factors combined with external micro environmental factors can be classified as opportunitiesand threats in a SWOT analysis.

The Psychoanalytical Model:

The psychoanalytical model draws from Freudian Psychology. According to this model, the individualconsumer has a complex set of deep-seated motives which drive him towards certain buying decisions.The buyer has a private world with all hishidden fears, suppressed desires and totally subjective longings. His buying action can be influenced byappealing to these desires and longings. The psychoanalytical theory is attributedto the work of eminent psychologist Sigmund Freud. Freud introduced personality as a motivating force inhuman behaviour.

According to this theory, the mental framework of a human being is composed of three elements, namely,1.The id or the instinctive, pleasure seeking element. It is the reservoir of the instinctive impulses that aman is born with and whose processes are entirely subconscious. It includes the aggressive, destructive

and sexual impulses of man.2.The superegoor the internal filter that presents to the individual the behavioural expectations of society. It develops outof the id, dominates the egoAnd represents the inhibitions of instinct which is characteristic of man. It represents the moral and ethicalelements, theconscience.3.The egoor the control device that maintains a balance between the id and the superego. It isthe most superficial

portion of the

id.

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It is modified by the influence of the outside world. Its processes are entirely conscious because it isconcerned with the perception of the outside world.The basic theme of the theory is the belief that a

person is unable to satisfy all his needs withinthe bounds of society. Consequently, such unsatisfied needscreate tension within an individualwhich have to be repressed. Such repressed tension is always said toexist in the subconsciousand continues to influence consumer behavior.4.

The Sociological Model:According to the sociological model, the individual buyer isinfluenced by society or intimate groups aswell as social classes. His buying decisions are nottotally governed by utility He has a desire to emulate,follow and fit in with his immediateenvironment.5. The Nicosia Model: In recent years, some efforts have been made by marketing scholars to build buyer behavior modelstotally from the marketing mans standpoint. The Nicosia modeland the Howard and Sheth model are twoimportant models in this category. Both of them belong to the category called the systems model, wherethe human being is analyzed as a systemwith stimuli as the input to the system and behavior as the outputof the system. Francesco Nicosia, an expert in consumer motivation and behavior put forward his modelof buyer behavior in 1966.The model tries to establish the linkages between a firm and its consumer

how the activities of the firm influence the consumer and result in his decision to buy. The messages fromthe firmfirst influence the predisposition of the consumer towards the product. Depending on thesituation,he develops a certain attitude towards the product. It may lead to a search for the product or an evaluationof the product. If these steps have a positive impact on him, it mayresult in a decision to buy. This is thesum and substance of the activity explanations in the Nicosia Model. The Nicosia Model groups theseactivities into four basic fields. Field one has two subfields thefirms attributes and the consumersattributes. An advertising message from the firm reaches theconsumers attributes. Depending on the waythe message is received by the consumer, a certainattribute may develop, and this becomes the input forField Two. Field Two is the area of searchand evaluation of the advertised product and other alternatives.If this process results in amotivation to buy, it becomes the input for Field Three. Field Three consists of the act of purchase. AndField Four consists of the use of the purchased item.

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Q.3 Explain the key roles played and various steps involved in organizational buying.

Ans.

Point 1 Introduction.The need for an understanding of the organizational buying process has grown in

recent yearsdue to the many competitive challenges presented in business-to-business markets.Since 1980there have been a number ofkey changes in this area, including the growth of outsourcing,theincreasing power enjoyed by purchasing departments and the importance given todeveloping partnerships with suppliers.

Point 2 The organizational buying behaviour process. The organizational buying behaviour process iswell documented with many models depicting the various phases, the members involved, and thedecisions made in each phase. The basicfive phase model can be extended to eight Purchase initiation Evaluations criteria formation informationsearch Supplier definition for RFQ evaluation of quotations negotiations Suppliers choice and choiceimplementation (Mat buy, 1986).

Point 3 The buying centre. The buying centre consists of those people in the organizational whoare involved directly or indirectly in the buying process, i.e. the user, buyer influencer, decider andgatekeeper to who the role of initiator has also been added. The buyers in the process are subject to awide variety and complexity of buying motives and rules of selection. The Mat buy model encouragesmarketers to focus their efforts on who is making what decisions based on which criteria

Point 4 Risk and uncertainty The driving forces of organizational buying behaviour. This is concernedwith the role of risk or uncertainty on buying behaviour. The level of risk depends upon the characteristicsof the buying situation faced. The supplier can influence the degree of perceived uncertainty by the buyerand cause certain desired behavioural reactions by the use of information and the implementationof certain actions. The risks perceived by the customer can result from a combination of the characteristicsof various factors: the transaction involved, the relationship with the supplier, and his position vis--visthe supply market.

Point 5 Factors influencing organizational buying behaviour. Three key factors are shown to influenceorganizational buying behaviour, these are, types of buying situations and situational factors,geographical and cultural factors and time factors.

Point 6 Purchasing Strategy. The purchasing function is of great importance because its actionswill impact directly on the organizations profitability. Purchasing strategy aims to evaluate and classify

the various items purchased in order to be able to choose and manage suppliers accordingly. Classificationis along two dimensions: importance of items purchased and characteristics of the supply market. Actionscan be taken to influence the supply market.

Based on the type of items purchased and on its position in the buying matrix, a company will developdifferent relationships with suppliersdepending upon the number of suppliers, the suppliers share, characteristics of selected suppliers, and thenature of customer-supplier relationships. The degree of centralization of buying activities and themissions and status of the buying function can help support purchasing strategy.

The company will adapt its procedures to the type of items purchased which in turn will influence

relationships with suppliers.

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Point 7 The future.Two activities which will be crucial to the future development of organizational buying behaviour will beinformation technology and production technologies.

Point 8 Conclusion. Organizational buying behaviour is a very complex area, however,

an understanding of the key factors are fundamental to marketing strategy and thus an organizationsability to compete effectively in the market place

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Q.4 Explain the different marketing philosophies and its approach.

Ans. Marketing is a societal process by which individuals and groups obtain what they need and wantthrough creating, offering and freely exchanging products and services of value with others. According tothe American Marketing Association, Marketing is the process of planning and executing the conception,

pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individualand organizational goods There are six competing philosophies under which organizations conductmarketing activities the production concept, product concept, selling concept, marketing concept,customer concept and societal concept.

1The Production Concept: The production concept is one of the oldest concepts in business. The production concept holds thatconsumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs and mass distribution.They assume that consumers are primarily interested in products availability and low prices.This philosophy makes sense in developing countries, where consumers are more interested in

obtaining the product than its features. It is also used when a company wants to expand the market.

2.The product Concept Product concept holds that consumer will favour these products that offer the most quality, performanceand innovative features. Managers in these organizations focus on making superior products andimproving them over time. They assume that buyers admire well-made products and can evaluate quality and performance product oriented companies often trust that theirengineers can design exceptional products. They get little or no customer input, and very often they willnot even examine competitors products.

3.The Selling Concept: The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough ofthe organizations products. The organization most, therefore, undertakes an aggressive selling and

promotion effort. This concept assumes that consumers typically show buying inertia or resistance andmust be coaxed into buying. It also assumes that the company has a whole battery of effective selling and

promotion tools to stimulate more buying. The selling concept is epitomized by the thinking that Thepurpose of marketing is to sell more stuff to more people for more money in order to make more profitMost firms practice the selling concept when they have over capacity. Their aim is to sell whatthey makerather then make what market wants.

4.The Marketing Concept

: The marketing concepts hold that the key to achieving its organizational goals consists of the companybeing more effective then competitors in creating, delivering and communicating superior customer valueto its chosen target markets. The marketing concept rests on four pillars: target market, customer needs,integrated marketing and profitability. There is a contrast between selling and marketing concepts:Selling focuses on the needs of the seller Marketing on the needs of the buyer. Selling is preoccupiedwith the sellers need to convert his product into cash marketing with the ideas of satisfying the needs ofthe customers by means of the product and the whole cluster of things associated with creating, deliveringand finally consuming it.

5.The customer Concept: Under customer concept, companies shape separate offers, services and messages to individual

customers. These companies collect information on each customers past transactions, demographics,psychographics and media and distribution preferences. They

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hope to achieve profitable growth through capturing a larger share of each customers expenditures bybuilding high customer loyalty and focusing on customer lifetime value

The ability of a company to deal with customers are at a time become practical as a result of advances infactory customization, computers, the internet and database marketing software.

6.The Societal Marketing Concept:The societal marketing concept holds that the organizations goal is to determine the needs, wants and

interests of target markets and to deliver the desired satisfactions more effectively and efficiently thancompetitors in a way that preserves or enhances the consumers and the societys well being. The societalmarketing concept calls upon marketers to build social and ethical considerations into their marketing

practices.

They must balance and juggle the often-conflicting criteria of company profits, consumer wantsatisfaction and public interest. Companies see cause-related marketing as an opportunity to enhance their

corporate reputation, raise brand awareness, increase customer loyalty, build sales and increase presscoverage. They believe that consumers will increasingly look for signs of good corporate citizenship thatgo beyond supplying rational and emotional benefits.

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Q. 5 What are the various stages involved in decision process when a consumer is buying new

product? Also, explain the adoption process.

Ans. Stages of the Consumer Buying ProcessSix 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 notalways 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 assortmentof products. HungerFood. Hunger stimulates your need to eat. Can be stimulated by the marketer through

product informationdid 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

Internal search, memoryExternal search if you need more information. Friends and relatives (word of mouth). Marketer dominatedsources 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 is1.Chinese foodIndian foodBurger kingKlondike Kates etc

2.Evaluation of Alternativesneed 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 ranketc.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 tryto influence by framing alternatives.1.Purchase decisionChoose buying alternative, includes product, package, store, methodof purchase etc.

2.

PurchaseMay differ from decision, time lapse between 4 & 5, product availability.3.Post-Purchase Evaluationoutcome: 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.Adoption ProcessAdoption is an individuals decision to become a regular user of a product. How do potential customerslearn about new products, try them, and adopt or reject them?

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The consumer adoption process is later followed by the consumer loyalty process, which is the concern ofthe established producer. Years ago, new product marketers used a mass market approach to launch

products. This approach had two main drawbacks: It called for heavy marketing expenditures, anditinvolved many wasted exposures. These drawbacks led to a second approach, heavy usertargetmarketing. This approach makes sense, provided that heavy users are identifiable and are

earlyadopters. However, even within the heavy user group, many heavy users are loyal to existing brands.New product marketers now aim at consumers who are early adopters.

The theory of innovation diffusion and consumer adoption helps marketers identify earlyadopters.Aninnovation is any good, service, or idea that is perceived by someone as new. The idea mayhave a longHistory, but it is an innovation to the person who sees it as new. Innovations taketime to spread throughthe social system. The Innovation diffusion process is defined as thespread of a new idea from itssource of invention or creation to its ultimate users or adopters.

Theconsumer adoption process is the mental process through which an individual passes from firsthearing

about an innovation to final adoption.Adopters of new products have been observed to move through fivestages:

1. Awareness : The consumer becomes aware of the innovation but lacks information about it.2. Interest : The consumer is stimulated to seek information about the innovation.3. Evaluation: The consumer considers whether to try the innovation4. Trial: The consumer tries the innovation to improve his or her estimate of its value.5. Adoption : The consumer decides to make full and regular use of the innovation.

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how to reach the customermust always be in your mind.-Definition: The place is where you can expect to find your customer and consequently,where the sale isrealized. Knowing this place, you have to look for a distribution channelin order to reach your customer.In fact, instead of place it would be better to use the word distribution but the MBA lingouses place

to memorize the 4 Ps of the marketing mix!

4-PRICE Price means the pricing strategy you will use. You have already fixed, as an hypothesis a customer price fitted to your customer profile but you willhave now to bargain it with the wholesalers and retailers.Do not be foolish: They know better the market than you and you have to listen their advices.5-PROMOTIONAdvertising, public relations and so on are included in promotion and consequently in the 4Ps.Sometimes,

packaging becomes a fifth P. As promotion is closely linked to the sales, I will mention here the mostcommon features about the sale strategy.-Definition: The function of promotion is to affect the customer behaviour in order to close a sale.

Of course, it must be consistent with thebuying processdescribed in the consumer analysis.Promotion includes mainly three topics: advertisement, publicrelations, and sales promotions.-Advertisement:It takes many forms: TV, radio, internet, newspapers, yellow pages, and so on. You have to takenoticeabout three important notions:Reachis the percentage of the target market which is affected by your advertisement. For example, if youadvertise on radio you must know how many people belonging to your segmentcan be affected.

Frequencyis the number of time a person is exposed to your message. It is said that a personmust be exposedseven timesto the message before to be aware of it. Reach*frequency gives thegross rating point.You have to evaluate it before any advertisement campaign.Message:Sometimes, it is called a creative. Anyway, the message must: get attraction, captureinterest, create desireand finally require action that is to say close the sale.Down-earth-advice:There are some magical words that you can use in any message:-Your-YouI-Me-

MyNow-Today-Fast-Easy-Cool-New-Fun-Updated-Free-Exciting-Astonishing-Success-Love-Money-Comfort-Protection-Freedom-Luck.-Public relations:Public relations are more subtle and rely mainly on your own personality. For example, you candeliver

public speeches on subjects such as economics, geo-economics, futurology to severalorganizations (civicgroups, political groups, fraternal organizations, professional associations)

6-SALES STRATEGYSales bring in the money. Salesmen are directly exposed to the pressure of finding prospects,makingdeals, beating competition and bringing money.

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Master of Business Administration - MBA Semester 2MB0046 Marketing Management

Assignment Set- 2

Q.1 What is product mix? What are the strategies involved in product mix and product line?

Ans

Product mix

The number of individual products produced or sold by an organization. The mix is defined by theindustry and manufacturing environment, and management strategies that position the company as aspecialty, niche or broad- based supplier of goods and services. Instances where the product mixvaries widely from period to period often requires more investment in facilities and inventory, andmay result in lower levels of customer service.

It is extremely important for any organization to have a well-managed product mix. Most organizationsbreak down managing the product mix, product line, and actual product into three different levels.

Strategies involved in product mix and product line

Product-mix decisions are concerned with the combination of product lines offered by thecompany. Management of the companies' product mix is the responsibility of top management.

Some basic product-mix decisions include:

1. Reviewing the mix of existing product lines2. Adding new lines to and deleting existing lines from the product mix3. Determining the relative emphasis on new versus existing product lines in the mix4. Determining the appropriate emphasis on internal development versus external acquisition in the

product mix5. Gauging the effects of adding or deleting a product line in relationship to other lines in the productmix and6. Forecasting the effects of future external change on the company's product mix.

Product-line decisions are concerned with the combination of individual products offered within agiven line. The product-line manager supervises several product managers who are responsible forindividual products in the line. Decisions about a product line are usually incorporated into amarketing plan at the divisional level. Such a plan specifies changes in the product lines andallocations to products in each line.

Generally, product-line managers have the following responsibilities:

1. Considering expansion of a given product line

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2. Considering candidates for deletion from the product line3. Evaluating the effects of product additions and deletions on the profitability of other items in the lineand4. Allocating resources to individual products in the line on the basis of marketing strategiesrecommended by product managers.

Decisions at the first level of product management involve the marketing mix for an individualbrand/product. These decisions are the responsibility of a brand manager (sometimes called a productmanager). Decisions regarding the marketing mix for a brand are represented in the product's marketing

plan. The plan for a new brand would specify price level, advertising expenditures for the coming year,coupons, trade discounts, distribution facilities, and a five-year statement of projected sales andearnings. The plan for an existing product would focus on any changes in the marketing strategy. Someof these changes might include the product's target market, advertising and promotional expenditures,

product characteristics, price level, and recommended distribution strategy

Managing the product mix for a company is very demanding and requires constant attention. Topmanagement must provide accurate and timely analysis (BCG) of their company's product mix so theappropriate adjustments can be made to the product line and individual products.

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Q.2 what is a distribution channel? Explain the factors to be considered while setting up a

distribution channel.

Ans

Distribution channel

A path through which goods and services flow in one direction (from vendor to the consumer), and thepayments generated by them that flow in the opposite direction (from consumer to the vendor).

A marketing channel can be as short as being direct from the vendor to the consumer or may includeseveral interconnected intermediaries such as wholesalers, distributors, agents, retailers. Eachintermediary receives the item at one pricing point and moves it to the next higher pricing point until itreaches the final buyer. Also called channel of distribution or marketing 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 befactory to supplier, supplier to retailer, or retailer to end customer. It is defined as a chain ofintermediaries each passing the product down the chain to the next organization, before it finallyreaches the consumer or end-user. This process is known as the Distribution chain' or the 'channel.' Eachof the elements in these chains will have their own specific needs, which the producer must take intoaccount, along with those of the all-important end-user.

Factors to be considered for setting up Distribution channel

The selection of distribution is affected by many of factors, which play significant role whilechoosing the channel for distribution. It may include the buying pattern of consumer, type of the

product is perishable, or auto mobile, weight and bulk and it also depends on the company'sresources.

The main affecting factors are following.

Organization objectives - If company objective is to have mass appeal and rapid market penetration.Type of product - Perishable products should have a short distribution channel, FMCG goods shouldhave a wide reaching, intensive distribution channel. nature and extent of market- Distribution toconsumer market or industrial markets would be different channel structures.Existing channel for comparable product- company may chose it's existing channel of distribution

for relative product.Buying habit of customers- Understanding consumer needs and criteria for buyingChannel Availability - Channels may not be available

And other factors like CustomerCharacteristics

Product Attributes

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Type of OrganizationCompetitionMarketing Environmental Forces and Characteristics of Intermediaries

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 customersAdvertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alice from producer to consumer incertain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell theirservices (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 toCustomer or end user.

There have also been some innovations in the distribution of services. For example, there has beenan increase in franchising and in rental services - the latter offering anything from televisionsthrough tools. There has also beensome evidence of service integration, with services linking together, particularly in the travel andtourism sectors. For example, links now exist between airlines, hotels and car rental services. Inaddition, there has been a significant increasein retail outlets for the service sector. Outlets such as estate agencies and building societyoffices are crowding out traditional grocers from major shopping areas.

Channel decisions

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

Channel strategy Gravity &adventure Push and Pull strategyProduct (or service) CostConsumer location

Managerial concerns

The channel decision is very important. In theory at least, there is a form of trade-off: the cost of usingintermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goodsmanufacturers 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 thebeginning 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 haveany aspirations to be market-oriented, their job should really be extended to managing all the processesinvolved in that chain, until the product or service arrives with the end-user. This may involve a numberof decisions on the part of the supplier:

Channel membershipChannel motivation

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Monitoring and managing channels

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Q.3 Discuss the communication development process with examples.

Answer

In development communication, you see that there are twowords-development and communication.

Communication is a message understood or sharing of experience. When we refer to communication, inthe context of development, we refer to various types of communication like interpersonal, group andmass communication.

Development, it is not easy to define this as it depends on the context. Development isabout change. It is about changing for the better.

It could be about social or economic change for improvement or progress.When we refer to development communication, it is about such communication that can be used for

development. It is about using communication to change or improve something. Here we use differenttypes of messages to change the socio-economic condition of people. These messages are designed totransform the behaviour of people or for improving their quality of life. Therefore, developmentcommunication can be defined as the use of communication to promote development. Those who writeor produce programmes on issues related to development are called development communicators.

Role of a development communicatorThe development communicator plays a very significant role in explaining the development processto the common people in such a way that it finds acceptance.

In order to achieve this objective a development communicator: has to understand the process of

development and communication should possess knowledge in professional techniques and should knowthe audience

prepare and distribute development messages to millions of people in such a way that they are receivedand understood, accepted and applied.

If they accept this challenge they will be able to get the people to identify themselves as part of asociety and a nation. This identity will help in bringing human resources together for the total welfareof the individual and the community at large.

DEVELOPMENT COMMUNICATION USING VARIOUS MEDIA

The history of development communication in India can be traced to rural radio broadcasts in the 1940sin different languages. Have you ever heard a rural programme on radio? If you come from a rural area,you probably would have heard. People who present these programmes speak in a language or dialectthat the people in your area speak. The programmes may be about farming and related subjects. The

programme may comprise of interviews with experts, officials and farmers, folk songs and informationabout weather, market rates, availability of improved seeds and implements.

There would also be programmes on related fields. During the 1950s, the government started hugedevelopmental programmes throughout the country. In fact, when Doordarshan started on 15thSeptember 1959, it was concentrating only on programmes on agriculture. Many of you might have seenthe Krishi Darshan programme on Doordarshan.

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Later in 1975, when India used satellites for telecasting television programmes in what is known as SITE(Satellite Instructional Television Experiment), the programmes on education and development weremade available to 2400 villages in the states of Andhra Pradesh, Bihar, Karnataka, Madhya Pradesh,

Orissa and Rajasthan.

As far as the print media is concerned, after Independence when the Five Year Plans were initiated bythe government for planned development, it was the newspapers which gave great importance todevelopment themes. They wrote on various government development programmes and how the

people could make use of them.

If the print media have contributed to development communication, the electronic media radio andtelevision especially All India Radio and Doordarshan have spread messages on development as themain part of their broadcasts. However, amongst all the media that are used for development

communication, traditional media are the closest to people who need messages of development like thefarmers and workers. Such forms of media are participatory and effective.

You may have seen construction workers cooking their meal of dal and rice over open fires in front oftheir tents set up temporarily on the roadside. They need to be educated about the values of balancednutrition, cleanliness, hygiene and water and sanitation.

In various parts of India, groups of volunteers use street theatre as a medium for developmentcommunication. This is done through humorous skits and plays through which the importance ofliteracy, hygiene etc. are enacted. The content for the skits is drawn from the audiences life. For

example, they are told about balanced nutrition . This means supplementing their staple diet of dal andrice with green leafy vegetables known to cure night blindness, an ailment common among constructionworkers. Similarly, female construction workers and their children are taught how to read and write.

However, problems in communicating a message in an effective way has been a matter of concern todevelopment workers.How can people be taught new skills at a low cost?What would be a good way to deal with sensitive topics such as health issues? How can complicatednew research, like that in agriculture for example, be simplified so that ordinary people can benefit?One option has been the use of comics. But, in order to achieve the desired results, these comicsshould be created locally.

But what are comics ? You must have all at some point of time read a comic. Comics involve storytelling using visuals which must follow local ideas and culture in order to be understood correctly by

people. The important thing about comics is that they are made by people on their own issues in theirown language. So, readers find them closer to their day-to-day lives.

Programmes are organized in the remote areas of Jharkhand, Rajasthan, Tamilnadu, and the NorthEast to provide training to rural communicators to enable them to use comics in developmentcommunication.

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Information on sensitive health issues such as HIV/AIDS has been communicated throught themedium of comics in several states. However, you must understand that development communicationusing various media is possible only with the active involvement of the following:

(i) Development agencies like departments of agriculture. (ii) Voluntaryorganizations(iii) Concerned citizens(iv) Non governmental organizations (NGOs)

Examples

One of the first examples of development communication was Farm Radio

Forums in Canada. From 1941 to 1965 farmers met in groups each week to listen to special radioprograms. There were also printed materials and prepared questions to encourage group discussion. Atfirst this was a response to the Great Depression and the need for increased food production in WorldWar II. But the Forums also dealt with social and economic issues. This model of adult education ordistance education was later adopted in India and Ghana.

In 1999 the U.S. Government and D.C. Comics planned to distribute 600,000 comic books to childrenaffected by the Kosovo War. The comic books are in Albanian and feature Superman and WonderWoman. The aim is to teach children what to do when they find an unexploded land mine left over fromKosovo's civil war. The comic books instruct children not to touch the anti- personnel mines and not tomove, but instead to call an adult for help. In spite of the 1997 Ottawa Treaty which attempts to ban landmines they continue to killor injure 20,000 civilians each year around the world.

Since 2002, Journalists for Human Rights, a Canadian based NGO, has operated long term projects inGhana, Sierra Leone, Liberia, and the DR Congo. jhrworks directly with journalists, providing monthly workshops, student sessions, on the job training, andadditional programs on a country by country basis.

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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

Answer

Abstract

In the late 1990s, Nokia overtook then leader Motorola to emerge as a behemoth in the global mobilephone industry. Nokia's dominance continued into the first few years of the 2000s, but it suddenly cameunder threat in 2003-2004, when smaller Asian vendors started making their presence felt with better

products at lower prices.

The company's problems also had internal causes and analysts said one of the reasons could be that ithad become too complacent with its success and lost its agility in reading and responding to marketsignals.

This case study discusses the various problems Nokia faced in 2003-2004, including the company'stardiness in introducing the clamshell phones that had become very popular and its resistance tomanufacturing operator specific handsets. It also discusses the efforts Nokia made to recover its marketonce it realized that its performance was slipping. The case concludes with an analysis of the challengesthe company faced in the future and the various options ahead of it.

Issues:

To understand the difficulties faced by an erstwhile giant in the global mobile phone industry in2003-2004.To appreciate the importance of innovation in a dynamic and volatile industry. To analyze the effect ofchanging market conditions on companies.To appreciate the importance of keeping abreast with changing market conditions andadapting to them speedily.To examine future challenges that the company faced and the various options available to it

We want to be the company that brings this industry to the next phase. And if we have a little bit of abump in the road in 2004, that's immaterial."

- Jorma Ollila, CEO of Nokia, in mid 2004.1

"Nokia didn't have the coolness factor. They didn't really do flip phones they were a little late withcameras, and they didn't push them. Coolness in the consumer space is a big deal, and they werestodgy."

Jack Gold, vice president of Meta Group, aConnecticut-based technology consulting firm, in 2005.2

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Positive SignsThe announcement of Nokia Corporation's (Nokia) quarterly results in April2005 was a much awaited event as far as the global mobile phone industry was concerned. Thecompany, which had emerged as an industry leader in the late

1990s, had run into rough weather in 2003-2004, with sales and earnings falling below expected levels.So much so that when the company announced poor

results in the first quarter of 2004, several analysts declared that it was the beginning of the endof Nokia's dominance in the industry.

However, Nokia was not ready to throw in the towel quite so easily. The company put up a toughfight over the second half of 2004 to recapture its lost position in the market.

It introduced several new models, modified designs, and aggressively promoted products with a view toincreasing its market share, which had fallen to a low of around 28 percent in early 2004 from anaverage of 35 percent over the previous three years.

Nokia's efforts started paying off by late 2004. The company announced satisfactory results for thefourth quarter of 2004 and market share for the year2004 also stabilized at 32 percent by the end of the year. Jorma Ollila (Ollila), Nokia's CEO, whileacknowledging that 2004 had been a challenging year, declared that the company was poised to recoverin 2005. Ollila's prediction came true when the company announced better than expected results for the

first quarter of 2005, ending March 31.

In the first quarter of 2005, Nokia's sales increased 17 percent over the corresponding quarterof the previous year to $9.65 billion.

Net profit rose 18 percent to $1.1 billion. Global handset sales rose 11 percent, prompting Nokia toincrease its estimate of the size of the global handset market in 2005 by 100 million to 740million.Commenting on Nokia's improved performance, Jussi Hyoty (Hyoty), an analyst at securitiesfirm FIM Securities, said, "Nokia's result was definitely better than expected, and it shows that it's agrowth company again."3

However, despite these positive signs, several analysts wondered whether Nokia would ever be able todominate the industry as it did in the late 1990s and the first two years of the new century, especially inlight of the aggressive competition posed by several new Asian companies as well as more established

players like Motorola and Sony Ericsson.

BackgroundDespite the relatively recent emergence of the mobile phone industry globally, Nokia's companyhistory goes back to the 1800s.

The company was first set up on the banks of the river Nokia (after which it was named) insouthwestern Finland in 1865 by Fredrik Idestam, who was a mining

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engineer. The original Nokia was a forest industry enterprise that primarily manufactured paper.

In 1898, Carl Henrik Lampen, a shopkeeper, and J.E. Segerberg, an engineer, set up the Finnish RubberWorks Ltd. (FRW) to manufacture rubber and associated chemicals. In 1912, Konstantin Wikstrom, anengineer, set up the Finnish CableWorks (FCW) to manufacture electrical cables for lighting purposes. These three companies had

business dealings with each other through the early 1900s and eventually merged in 1967 to form theNokia Corporation. The new company had four major businesses - forestry, rubber, cable andelectronics.

By 1980, Nokia was a large business conglomerate with several businesses ranging from tires totelevisions and computers to telecommunications. ExcerptsThe Rise to the Top

Nokia drew on its experience of setting up Nordic cellular networks (which

were more advanced than those used by Japan, the rest of Europe, and the US at that time) tosuccessfully adopt the GSM standard. The company was listed on the New York Stock Exchange in1994. Over the 1990s, Nokia became one of the most successful mobile phone manufacturers in theworld and began to enter non-Scandinavian markets as well.

Nokia was also one of the first mobile manufacturers to realize the importance of the design elementin mobile phones and its phones were more aesthetically designed than those of competitors. In 1998,

Nokia overtook Motorola to become the largest mobile manufacturer in the world...

Designed for InnovationNokia was the first mobile phone manufacturer to realize in the late 1990s that phones no longerplayed only a functional role they were also becoming fashion symbols.

Until Nokia began emphasizing the design aspect, mobile phones were bulky, bricklike devices withan external antenna and a standard keypad. Manufacturers emphasized functionality over aestheticappeal.

Nokia broke new ground in 1999, when it launched its 8200 handset on the catwalk at a Parisfashion week...

The Decline

In mid-2004, The Economist wrote, "When a firm dominates its market, especially one that isdriven by constant technological advances, it risks becoming so fixated with trying to ward offwhat it reckons to be its most powerful challenger that it leaves itself vulnerable to attack fromother directions."Analysts said this statement accurately characterized what happened with

Nokia.

In the early 2000s, Microsoft Corp (Microsoft) announced its decision to enter the mobile phonesmarket. The announcement set alarm bells ringing in Nokia as Microsoft had the reputation of being anaggressive competitor...

Efforts at RecoverySoon after announcing disappointing results in the first quarter of 2004, Nokia realized that it was in

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trouble and began to take steps to correct matters.

The company not only cut prices on certain handsets to increase market share, but also fine-tuned itsportfolio to adjust products to meet market needs. It killed some outmoded models and broughtforward the launch of several others, including a number of clamshell phones.

In June 2004, Nokia launched five new models of phones, out of which three were clamshells. Nokia'snew models were the 6260 model, a clamshell whose cover not only flipped open but also swiveled, the6630, which Nokia claimed was the world's smallest camera phone, designed for 3G networks, anotherclamshell, the 6170, and two low end models, the 2650 and 2600. Several other models were alsomarketed aggressively.

For instance, the low end 1100 model for emerging markets and the 6230 mid range model becamevery popular in 2004. (The 6230 was so popular in some markets that at times, Nokia was not able tomeet the demand)...

A Challenging FutureDespite Nokia's laudable efforts in the direction of recapturing its lost marketposition, the opinions of analysts on its turnaround were mixed.

While the company's detractors believed that Nokia had lost its competitive advantage in the mobilephone market, its supporters said the company's inherent strengths and stable financial position wouldhelp it sail through the difficulties it had faced in 2003-2004 to recover in the future. However, most of

them agreed that the mobile phone industry was undergoing a vast change.

In the early 2000s, mobile phones were expected to perform a variety of functions in addition tolooking stylish and being easy to operate. Nokia's competitors had understood this and were in the

process of launching several models that were style statements in themselves...

ExhibitsExhibit I: The Phone Feature of N-Gage

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Q. 5 What is retailing? Explain the functions and different types of retailing with its key

features. (10 marks)

Answer

Retailing

Retail consists of the sale of goods or merchandise from a fixed location, such as a department store,boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser.[1]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 orimporters, 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 distributionstrategy. The term "retailer" is also applied where a service provider services the needs of a largenumber of individuals, such as a public utility, like electric power.

Types of retailers by marketing strategy:

Department stores - very large stores offering a huge assortment of "soft" and "hard goods oftenbear a resemblance to a collection of specialty stores. A retailer of such store carries variety ofcategories 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 retailerssell less fashion-oriented brands.Supermarkets - sell mostly food productsWarehouse 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 offerextremely low-cost goods, with limited selectionDemographic - retailers that aim at one particular segment (e.g., high-end retailers focusing onwealthy individuals).Mom-And-Pop (or Kirana Stores as they call them in India): is a retail outlet that is owned andoperated by individuals. The range of products are very selective and few in numbers. These storesare seen in local community often are family-run businesses. The square feet area of the storedepends on the store holder.Specialty stores: A typical speciality store gives attention to a particular category and provides highlevel of service to the customers. A pet store that specializes in selling dog food would be regarded as aspecialty store. However, branded stores also come under this format. For example if a customer visits aReebok 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 ofmerchandise at more than average prices with a speedy checkout. This store is ideal for emergency andimmediate purchases. Hypermarkets: provides variety and huge volumes of exclusive merchandise atlow margins.

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The operating cost is comparatively less than other retail formats. A classic example is the Metro inBangalore.Supermarkets: is a self service store consisting mainly of grocery and limited products on non fooditems. 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 entertainmentunder a roof. Example: Sigma mall and Garuda mall in Bangalore, Express Avenue in Chennai.

Category killers or Category Specialist: By supplying wide assortment in a single category for lowerprices a retailer can "kill" that category for other retailers. For few categories, such as electronics, theproducts are displayed at the centre of the store and sales person will be available to address customerqueries and give suggestions when required. Other retail format stores are forced to reduce the pricesif a category specialist retail store is present in the vicinity. For example: Pai Electronics store inBangalore, 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 theproduct but the customer receives the product directly from the manufacturer or a wholesaler. Thisformat is ideal for customers who do not want to travel to retail stores and areinterested 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 moneyin 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. Thestores 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 itemsGeneral 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 theircustomer demographics, lifestyle and purchase behaviour. A good format will lend a hand to display

products well and entice the target customers to spawn sales.

Functions of Retailing

Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and

consumers. In this context, they perform various functions like sorting, breaking bulk, holdingstock, as a channel of communication, storage, advertising and certain additional services.

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Sorting

Manufacturers usually make one or a variety of products and would like to sell their entire inventory toa few buyers to redu7ce costs. Final consumers, in contrast, prefer a large variety of goods and servicesto choose from and usually buy them in small quantities. Retailers are able to balance the demands of

both sides, by collection an assortment of goods from different sources, buying them in sufficientlylarge quantities and selling them to consumers in small units.

The above process is referred to as the sorting process. Through this process, retailers undertakeactivities and perform functions that add to the value of the products and services sold to the consumer.Supermarkets in the US offer, on and average, 15,000 different items from 500 companies. Customersare able to choose from a wide range of designs, sizes and brands from just one location. If eachmanufacturer had a separate store for its own products, customers would have to visit several stores tocomplete their shopping. While all retailers offer an assortment, they specialize in types of assortmentoffered and the market to which the offering is made. Westside provides clothing and accessories, while

a chain like Nilgiris specializes in food and bakery items. Shoppers Stop targets the elite urban class,while Pantaloons is targeted at the middle class.

Breaking Bulk

Breaking bulk is another function performed by retailing. The word retailing is derived from the Frenchword retailer, meaning to cut a piece off. To reduce transportation costs, manufacturers andwholesalers typically ship large cartons of the product, which are then tailored by the retailers intosmaller quantities to meet individual consumption needs.

Holding Stock

Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an inventorythat allows for instant availability of the product to the consumers. It helps to keep prices stable andenables the manufacturer to regulate production. Consumers can keep a small stock of products at homeas they know that this can be replenished by the retailer and can save on inventory carrying costs.

Additional Services

Retailers ease the change in ownership of merchandise by providing services that make it convenient to

buy and use products. Providing product guarantees, after-sales service and dealing with consumercomplaints are some of the services that add value to the actual product at the retailers end.

Retailers also offer credit and hire-purchase facilities to the customers to enable them to buy a productnow and pay for it later. Retailers fill orders, promptly process, deliver and install products. Salespeopleare also employed by retailers to answer queries and provide additional information about the displayed

products. The display itself allows the consumer to see and test products before actual purchase. Retailessentially completes transactions with customers.

Channel of Communication

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Retailers also act as the channel of communication and information between the wholesalers or suppliersand the consumers. From advertisements, salespeople and display, shoppers learn about thecharacteristics and features of a product or services offered. Manufacturers, in their turn, learn of salesforecasts, delivery delays, and customer complaints. The manufacturer can then modify defective

or unsatisfactory merchandise and services.

Transport and Advertising Functions

Small manufacturers can use retailers to provide assistance with transport, storage, advertising and pre-payment of merchandise. This also works the other way round in case the number of retailers is small.The number of functions performed by a particular retailer has a direct relation to the percentage andvolume of sales needed to cover both their costs and profits.

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Q. 6 a. What is CRM? What are its objectives? (2 marks)

b. Write a short note on Brand development. (8 marks)

Answer CRM stands forCustomer Relationship Management. It is a process or methodology usedto learn more about customers needs and behaviors in order to develop stronger relationships withthem. There are many technological components to CRM, but thinking about CRM in primarily

technological terms is a mistake. The more useful way to think about CRM is as a process that willhelp bring together lots of pieces of information about customers, sales, marketing effectiveness,responsiveness and market trends.

CRM helps businesses use technology and human resources to gain insight into the behavior ofcustomers and the value of those customers.

Objectives of CRM

CRM, the technology, along with human resources of the company, enables the company to analyzethe behavior of customers and their value. The main areas of focus are as the name suggests: customer

, relationship , and the management of relationship and the main objectives to implement CRM in thebusiness strategy are:

To simplify marketing and sales processTo make call centers more efficientTo provide better customer serviceTo discover new customers and increase customer revenueTo cross sell products more effectively

The CRM processes should fully support the basic steps ofcustomer life cycle . The basic steps are:

Attracting present and new customersAcquiring new customersServing the customersFinally, retaining the customers

Brand development

A plan to improve the performance of a particular product or service. For example, as part of branddevelopment a firm may initiate a new advertising campaign that includes free samples.