ASSIGNMENTDRIVE FALL 2013PROGRAM BBA, SEMESTER IISUBJECT CODE
& NAME BBA 204 MARKETING MANAGEMENT
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Q.No1Define Marketing and classify on the basis of geographical
coverage.Answer:Meaning of marketing: Marketing is a very important
aspect in business, since it contributes greatly to the success of
the organization. Production and distribution depend largely on
marketing.Marketing embraces all efforts made in the discovery of
consumers' actual and potential requirements for commodities and
services and the steps taken for securing their actual
distribution.Classification:Communication, transport, science and
technology etc., have widened the geographical area of markets.
Four stages are noticed in the geographical development of markets.
1) Family Market: First, family markets existed where exchanges
were confined within the four walls or among the members of a
family. 2) Local Market: When buyers and sellers belong to a local
area or areas, say a town or village, & participate in market,
it is called a local market. Here, the demands are limited. For
example, perishable goods like fruits, fish, vegetables etc. But
strictly speaking such markets are disappearing because of the
efficient system of transportations and communications. However,
many villages are still witness to such markets even today. 3)
National Market: For certain commodities, a country may be regarded
as a market, through the fast development of industrialisation.
This is referred to as a national market. In India, the goods can
reach another, because of efficient communication system and
transport facilities. In the present decade, almost all the
products have national markets as the markets have widened to a
great extent. 4) World Market: World or international market arise
when buyers and sellers of goods emerge at an international level
i.e., involvement of buyers and sellers beyond the boundaries of a
nation.
2Write short notes on the following:a.) Exchange Concept:
Exchange is an act of obtaining a desired product or service from
someone by offering something in return. Marketing occurs when
people decide to satisfy their needs and wants through exchange.
Marketing, thus, involves exchange of a product between a seller
and a buyer based on monetary considerations. The exchange concept
of marketing holds that exchange is the central idea of marketing.
But marketing is much broader than exchange. Exchange covers the
distribution aspect and the price mechanism. Marketing has wider
connotations including value generation, customer satisfaction,
creative selling, advertising and integrated action for serving the
customer. The exchange concept does not cover all the vital
ingredients of marketing.b.) Production Concept: The production
concept of marketing is one of the oldest marketing concepts or
marketing philosophies in guiding the marketing activities of an
organization. The production concept is that marketing philosophy
which operates with the guiding force thatthe consumers will prefer
those products which are available at the right time, at right
places, in adequate quantities, and at affordable prices.Hence, the
management should pursue policies to improve production and
distribution system to reduce prices. The production concept or
philosophy is relevant in situations where mass quantity of a
product is consumed and the demand for the product exceeds the
supply. The main criticism against this philosophy is that the
consumers are not given personal attention and the management is
not responsive to consumers' views.c.) Selling Concept: The selling
concept is a common approach for any marketing activity. This
concept assumes that any product does not sell itself and therefore
has to be sold. For selling the product, the consumers are educated
and effectively convinced that only this product satisfy their
needs. That means, to stimulate buying, effective selling and
promotion tools are a pre-condition, whether it is a popular
product or an unsought-for product. The selling concept is a common
approach for any marketing effort. The main criticism against the
selling concept is that it gives emphasis on increasing sales
volume, and not on consumer satisfaction.d.) Marketing Concept: The
modern marketing concept came into being and gained momentum after
1950. According to Philip Kotler, "The marketing conceptholds the
key to achieve organisational goals, consistent with the needs and
wants of the target market anddeliver the desired satisfaction more
effectively and efficiently than competitors". From the above
statement, it is clear that the modern marketing concept is that
marketing philosophy which believes organisations should assess and
understand the needs and wants of target customers, and
accordingly, make relevant marketing efforts to satisfy their wants
and needs more effectively than competitors. Thus modern marketing
concept is not just sales efforts, but, first understanding
customers needs and wants. The scope of marketing is very wide. It
includes all those activities which are involved in discovering the
present and potential requirements of consumers for goods and
services, and in ensuring the flow ofthose goods and services from
the producers to the final consumers.e.) Societal Marketing
ConceptThe societal marketing concept is a broadened marketing
concept and has gained momentum since the 1980s. This concept is
also known as the Human Concept or The Ecological Concept. Societal
marketing concept is a marketing management philosophy that
believes in assessing the needs and wants of target consumers or
target markets and adapting the organisation to produce and market
goods to give expected satisfaction more effectively than its
competitors in such a way that preserves or enhances the consumers'
as well as the well-being of society. The societal marketing
concept is helpful in creating an intelligent consumption pattern,
serving the ecological needs and helping the industry grow and
prosper. It serves the business world as well as the society as a
whole. Marketing is a very important aspect in business since it
contributes greatly to the success of the organization. Production
and distribution depend largely on marketing. Marketing is the
father of innovation and product development, promoter of
entrepreneurial talent, developer of economy, stimulator of
consumption and higher standard of living and guardian of price
system. Apart from contributing to the development of the nation as
a whole, marketing has greater importance for its contribution to
society and individual business firm.
3 Explain SWOT & PESTANSWER:
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities
and Threats. SWOT analysis is a strategic planning method used to
evaluate the Strengths, Weaknesses, Opportunities, and Threats
involved in a project or in a business venture. It involves
specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable
and unfavorable to achieve that objective. SWOT analysis is an
important tool for auditing the overall strategic position of a
business and its environment. Strengths and weaknesses are internal
factors. For example, strength could be your specialist marketing
expertise. A weakness could be the lack of a new product.
Opportunities and threats are external factors. For example, an
opportunity could be a developing distribution channel such as the
internet, or changing consumer lifestyles that potentially increase
demand for a company's products. A threat could be a new competitor
in an important existing market or a technological change that
makes existing products potentially obsolete. First, the decision
makers have to determine whether the objective is attainable, given
the SWOT analysis. If the objective is not attainable, a different
objective must be selected and the process repeated. Let us discuss
SWOT analysis with examples
Strengths: characteristics of the business or team that give it
an advantage over others in the industry. For example, Microsofts
strength is its operating system Windows and related software
applications is used by a large customer base all over the world.
Weaknesses: are characteristics that place the firm at a
disadvantage relative to others. For example, weakness can be high
attrition rate. Opportunities: external chances to make greater
sales or profits in the environment. For example, changing
lifestyle of people- the firm can make use of their capability to
cater to the changing lifestyle of people which in turn could help
company to gain profits. Threats: external elements in the
environment that could cause trouble for the business. For example,
the small retail shops owners found a great threat when big
retailers began their operations in India. A SWOT analysis should
identify a corporations core competencies, along with the
opportunities that the organisation is not currently able to take
advantage of due to lack of appropriate resources. This is
essential because subsequent steps in planning for achievement of
the selected objective may be derived from the SWOT analysis. The
SWOT analysis framework has gained widespread acceptance because it
is both simple and powerful for strategy development. However, like
any planning tool, SWOT is only as good as the information it
contains. Thorough market research and accurate information systems
are essential for the SWOT analysis to identify key issues in the
environment.The analysis of strengths and weaknesses focuses on
internal factors that give an organization advantages and
disadvantages in meeting the needs of its target market. Strengths
refer to the core competencies that give the firm an advantage in
meeting the needs of its target markets. Any analysis of company
strengths should be market oriented/customer focused because
strengths are meaningful when they assist the firm in meeting
customer needs. Weaknesses refer to any limitations a company faces
in developing or implementing a strategy. Weaknesses should also be
examined from a customer perspective because customers often
perceive weaknesses that a company cannot see. The SWOT Matrix
helps visualize the analysis. Also, when executing this analysis it
is important to understand how these elements work together. When
an organisation matches internal strengths to external
opportunities, it creates core competencies. In addition, an
organization should act to convert internal weaknesses into
strengths and external threats into opportunities.
PEST analysis stands for "Political, Economic, Social, and
Technological analysis". It describes a framework of
macro-environmental factors used in the environmental scanning
component of strategic management. It is a part of the external
analysis when conducting a strategic analysis or doing market
research, and gives an overview of the different macro
environmental factors that the company has to take into
consideration. It is a useful strategic tool for understanding
market growth or decline, business position, potential and
direction for operations. The growing importance of environmental
or ecological factors in the first decade of the 21st century has
given rise to green business and encouraged widespread use of an
updated version of the PEST framework. A PEST analysis
incorporating legal and environmental factors is called a PESTLE
analysis. Specifically the PEST or PESTLE analysis is a useful tool
for understanding risks associated with market growth or decline,
and as such the position, potential and direction for a business or
organization. PESTLE analysis is a useful tool for understanding
the big picture of the environment, in which you are operating, and
the opportunities and threats that lie within it. By understanding
the environment in which you operate (external to your company or
department), you can take advantage of the opportunities and
minimize the threats.
4 What are the constituents of micro environment of the
organizationAnswer:
Micro-environment of the organization Micro environment consists
of forces that are close to the company and affect its ability to
serve its customers. Micro environment begins with the companys
environment itself. This environment influences the organisation
directly. It includes suppliers that deal directly or indirectly,
consumers and customers, and other local stakeholders. Micro tends
to suggest small, but this can be misleading. In this context,
micro describes the relationship between firms and the driving
forces that control this relationship. It is a more local
relationship, and the firm may exercise a degree of influence. i.
Suppliers Suppliers provide the resources required by the company
to produce its goods and services. A company should choose
suppliers who offer favourable terms and conditions of sale.
Suppliers who offer best mix of quality, delivery, reliability,
credit, warranties and competitive price should be desired. The
developments that take place in the suppliers environment have a
bearing on the marketing operations of the company as suppliers may
introduce frequent changes in their products and business
practices. They may n become direct competitors to the firm by
manufacturing end products themselves. Hence, the marketing manager
must closely monitor the environment. ii. Competitors Marketing in
this era is highly competitive. The foray of multinationals into
global markets has posed serious problems to local firms. Ever
since globalisation emerged in the early 90s, Indian companies
began operating in a free market. They had to compete with
multinational companies. To overcome competition, a company must
provide greater customer satisfaction than its competitors. It must
strongly position its offering in the minds of customers. Knowledge
about competition is fundamental to developing an effective
marketing strategy. In the words of Philip Kotler "the best way for
a company to grasp the full range of competition is to take the
view point of a buyer".iii. Customers Customers market consists of
several constituents such as consumer markets, business markets,
reseller markets, Government markets and international markets.
Customer markets consist of individuals and households who buy
goods and services for personal consumption. Business markets buy
goods and services for further processing or use in their
manufacturing process. Reseller market consists of wholesaler and
retailers. They buy goods and services to resell at a profit.
Government market consists of government agencies which buy goods
and services to produce public services. Lastly international
market consists of buyers in other countries. Thus each of the
constituents of the customers market has unique characteristics.
iv. Shareholders As shareholders contribute capital, they are
eligible for a share in the profit of the organisation.
Shareholders earning is dependent on the marketing efforts and
profitability. As organisation requires greater inward investment
for growth, they face increasing pressure to move from private
ownership to public. However, this movement unleashes the forces of
shareholder pressure on the strategy of organisations. Satisfying
shareholder needs may result in change in tactics employed by the
organisation. Many IT companies whose share prices sky rocketed
during 1999 - 2000 saw a steep decline in share prices as they
faced pressures from shareholders to make it profitable. v.
Creditors Creditors are those from whom marketers purchase goods on
credit. The relationship between the company and creditors should
be good as it affects their activities in future. Most business
purchase goods and services much like a consumer. However, they do
so to a large extent on credit as they are able to get discounts or
other incentives to buy in bulk. When businesses buy goods and
services on credit, the business that holds the note or paper is
referred to as a creditor. A firms power and prestige in domestic
markets may be significantly enhanced with the right credit
resources. Enhanced prestige can translate into a better
negotiating position with other creditors, suppliers, distributors
and other important groups.
5 What are the additional components in marketing
mix?Answer:
With the exponential growth in the service industry, it was
found that the traditional marketing mix was insufficient to meet
the growing demands of the industry. This was especially due to the
fact that the service industry involved several intangible and
variable components, which could not be covered under the
traditional components of the marketing mix. Hence, in order to
meet the needs of the service industry, three additional components
or additional Ps were introduced in the mix People, Process and
Physical Evidence. The marketing departments in the Service sector
need to include these additional components, along with the regular
components, in the marketing mix. 4.4.1 People A service industry
is a people intensive industry, as the human resource is the key
asset who performs the service. Good service has to be rendered
rightly to the customer first time and every time. Unlike a product
based industry, bad service cannot be replaced or returned. Also,
customers feel important when they are treated rightly by the
service personnel. Hence, it is necessary for service industries to
invest heavily in people. The quality of service provided is
dependent on the skill sets, behaviour and attitude of the service
personnel. It is important for managers who market services to
consider the following points with respect to their people 1.
Selection The organisation should have clearly laid down procedures
for the selection of service personnel. The key factor in selection
would be the right attitude of the candidate rather than the
knowledge, as the latter can be provided by proper training. 2.
Motivation In the service industry, it is important that the
employees are self motivated and are willing to give their 100% for
the organisation. The satisfaction of the customer depends totally
upon the employee motivation as motivated employees treat the
organization as their own. They act like entrepreneurs so as to
ensure that the customers needs are addressed immediately. This
results in customer delight. 3. Training Behavioural training is
crucial in the service industry, as behaviour determines the
commitment of the employee towards the customer. The level of
training is also dependent on whether the employees role is in high
contact or low contact with the customer. It is important to
provide the right training to the employees as this will result in
enhancing the customer experience. 4. Team Development For
delivering effective service, teamwork is critical as no service is
an individual task. Both the front-end and back-end employees
contribute together for the service delivery to the customer.
Hence, it is important to develop teams which share these common
aims. All of the above items need to be considered by the service
marketing manager so that they can be incorporated into the
development of the people component of the marketing mix. 4.4.2
Process Process refers to the system used by the organisation so as
to deliver service to the customer. It is a systematic arrangement
which results in the delivery of service. The service delivery
process needs to be mapped minutely so as to ensure that the
desired service reaches the customer in the given time frame. It is
also important that the services marketing manager tweaks the
processes at regular intervals, so as to ensure that the gaps are
assessed and addressed. Such tweaking helps in maintaining the
quality of the service. For example, when you order pizza from
Pizza Corner, there is a service guarantee of delivery within 40
minutes to your home or the order is free of charge. For providing
such a service, Pizza Corner has to ensure that there is a
well-defined process in place from the time of receiving the order,
to the preparation of the pizza and delivery of the same to the
customers residence. A lapse in any leg of the process would result
in the company incurring a loss on that order. Thus, process is an
important component of the marketing mix for the service
industry.Physical Evidence In most service industries, customer is
physically present at the time of providing service. Due to this
physical presence, it becomes important to create the right
surroundings or ambience for providing service. Physical evidence
refers to the external factors or surroundings which aid the
customer in making a judgement about the company. Such factors can
be physically sensed as they can be seen, felt, heard or touched.
The customer makes a decision whether he or she wants to have
business transactions with a particular service provider, depending
on the external physical environment. The physical evidence is the
tangible part of the service, as it can be perceived by the
customer. It becomes important for the service marketing manager to
ensure that the physical evidence before the customer is pleasing
and does not offend the customers sensibilities. This will help in
increasing the business opportunities with the customer. For
example, the ambience, appearance, decor and cleanliness of a
restaurant will encourage repeat visits from clientele. These can
be leveraged to bring in more business. The services marketing
manager has to consider the physical evidence of the surroundings
and allocate resources for improving or maintain the same, so as to
generate business.
6 What are the internal & external factors affecting pricing
decisions?Answer: The pricing decisions are influenced by many
factors. The price policies should be consistent with pricing
objectives. The influencing factors for a price decision can be
divided into two groups: (A) Internal Factors and (B) External
Factors. (A) Internal Factors 1) Organizational Factors Pricing
decisions occur on two levels in the organisation. Over-all price
strategy is dealt by the top executives. They determine the basic
range the product falls into in terms of market segments. The
actual mechanics of pricing are dealt with at lower levels in the
firm and focus on individual product strategies. Usually, some
combination of production and marketing specialists are involved in
choosing the price. 2) Marketing Mix Marketing experts view price
as only one of the many important elements of the marketing mix. A
shift in anyone of the elements has an immediate effect on the
other three-Production, Promotion and Distribution. In some
industries, a firm may use price reduction as a marketing
technique. Other firms may raise prices as a deliberate strategy to
build a high-prestige product line. In either case, the effort will
not succeed unless the price change is combined with a total
marketing strategy that supports it. A firm that raises its prices
may add a more impressive- looking package and may begin a new
advertising campaign. 3) Product Differentiation The price of the
product also depends upon the characteristics of the product. In
order to attract the customers, different characteristics are added
to the product, such as quality, size, colour, attractive package,
alternative use etc. Generally, customers are willing to pay more
for the product which makes a fashion statement or is trendy with
good packaging. 4) Cost of the Product Cost and price of a product
are closely related. The most important factor is the cost of
production. While deciding to market a product, a firm may try to
decide what prices are realistic, considering current demand and
competition in the market. 5) Objectives of the Firm Firms may
pursue a variety of value-oriented objectives, such as maximising
sales revenue, maximising market share, maximising customer volume,
minimizing customer volume, maintaining an image, maintaining
stable price etc. Pricing policy should be established only after
proper consideration of the objectives of the firm.
(B) External Factors
1) Demand The market demand for a product or service obviously
has a big impact on pricing. Since demand is affected by factors
like, number and size of competitors, the prospective buyers, their
capacity and willingness to pay, their preference etc, and these
factors are taken into account while fixing the price. 2)
Competition Competitive conditions affect the pricing decisions.
Competition is a crucial factor in price determination. A firm can
fix the price equal to or lower than that of the competitors,
provided the quality of product, in no case, is lower than that of
the competitors.3) Suppliers Suppliers of raw materials and other
goods can have a significant effect on the price of a product. If
the price of cotton goes up, the increase is passed on by suppliers
to manufacturers. Manufacturers, in turn, pass it on to consumers.
Sometimes, however, when a manufacturer appears to be making large
profits on a particular product, suppliers will attempt to cash in
on the profits by charging more for their supplies. In other words,
the price of a finished product is intimately linked up with the
price of the raw materials. Scarcity or abundance of the raw
materials also determines pricing. 4) Economic Conditions The
inflationary or deflationary tendency affects pricing. In the
recession period, the prices are reduced to a sizeable extent to
maintain the level of turnover. On the other hand, the prices are
increased in the boom period to cover the increasing cost of
production and distribution. To meet the changes in demand, price
etc., several pricing decisions are available (a) prices can be
boosted to protect profits against rising cost, (b) price
protection systems can be developed to link the price on delivery
to current costs, (c) emphasis can be shifted from sales volume to
profit margin and cost reduction etc. 5) Buyers The various
consumers and businesses that buy a company's products or services
may have an influence in the pricing decision. Their nature and
behaviour for the purchase of a particular product, brand or
service etc. affect pricing when their number is large. 6)
Government Price discretion is also affected by the price-control
by the government through enactment of Legislation, when it is
thought proper to arrest the inflationary trend in prices of
certain products. The prices cannot be fixed higher, as government
keeps a close watch on pricing in the private sector. The marketers
obviously can exercise substantial control over the internal
factors, while they have little, if any, control over the external
ones.
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