IGNOU MBA MS-06 Solved Assignments 2012Presented by http://www.myignou.in/

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MS - 6 Marketing for Managers MS-6/TMA/SEM - I /2012 All Blocks

Q1. a) Explain the concept of Marketing and substantiate the significance in modern organization in accomplishment of their objectives. Solution:- The term marketing has changed and evolved over a period of time, today marketing is based around providing continual benefits to the customer, these benefits will be provided and a transactional exchange will take place. The Chartered Institute of Marketing define marketing as 'The management process responsible for identifying , anticipating and satisfying customer requirements profitably' If we look at this definition in more detail Marketing is a management responsibility and should not be solely left to junior members of staff. Marketing requires co-ordination, planning, implementation of campaigns and a competent manager(s) with the appropriate skills to ensure success. Marketing objectives, goals and targets have to be monitored and met, competitor strategies analysed, anticipated and exceeded. Through effective use of market and marketing research an organisation should be able to identify the needs and wants of the customer and try to delivers benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these needs results in a healthy turnover for the organisation. Philip Kotler defines marketing as 'satisfying needs and wants through an exchange process' Within this exchange transaction customers will only exchange what they value (money) if they feel that their needs are being fully satisfied, clearly the greater the benefit provided the higher transactional value an organisation can charge.

P.Tailor of www.learnmarketing.net suggests that 'Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer (P.Tailor 7/00)'

Concepts of marketing:-

Once you've developed your marketing strategy, there is a "Seven P Formula" you should use to continually evaluate and reevaluate your business activities. These seven are: product, price, promotion, place, packaging, positioning and people. As products, markets, customers and needs change rapidly, you must continually revisit these seven Ps to make sure you're on track and achieving the maximum results possible for you in today's marketplace. Product To begin with, develop the habit of looking at your product as though you were an outside marketing consultant brought in to help your company decide whether or not it's in the right business at this time. Ask critical questions such as, "Is your current product or service, or mix of products and services, appropriate and suitable for the market and the customers of today?" Whenever you're having difficulty selling as much of your products or services as you'd like, you need to develop the habit of assessing your business honestly and asking, "Are these the right products or services for our customers today?"

Is there any product or service you're offering today that, knowing what you now know, you would not bring out again today? Compared to your competitors, is your product or service superior in some significant way to anything else available? If so, what is it? If not, could you develop an area of superiority? Should you be offering this product or service at all in the current marketplace?

Prices The second P in the formula is price. Develop the habit of continually examining and reexamining the prices of the products and services you sell to make sure they're still appropriate to the realities of the current market. Sometimes you need to lower your prices. At other times, it may be appropriate to raise your prices. Many companies have found that the profitability of certain products or services doesn't justify the amount of effort and resources that go into producing them. By raising their prices, they may lose a percentage of their customers, but the remaining percentage generates a profit on every sale. Could this be appropriate for you?

Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your price over a series of months or years, you can sell far more than you are today, and the interest you can charge will more than make up for the delay in cash receipts. Sometimes you can combine products and services together with special offers and special promotions. Sometimes you can include free additional items that cost you very little to produce but make your prices appear far more attractive to your customers. In business, as in nature, whenever you experience resistance or frustration in any part of your sales or marketing activities, be open to revisiting that area. Be open to the possibility that your current pricing structure is not ideal for the current market. Be open to the need to revise your prices, if necessary, to remain competitive, to survive and thrive in a fast-changing marketplace. Promotion The third habit in marketing and sales is to think in terms of promotion all the time. Promotion includes all the ways you tell your customers about your products or services and how you then market and sell to them.

Small changes in the way you promote and sell your products can lead to dramatic changes in your results. Even small changes in your advertising can lead immediately to higher sales. Experienced copywriters can often increase the response rate from advertising by 500 percent by simply changing the headline on an advertisement. Large and small companies in every industry continually experiment with different ways of advertising, promoting, and selling their products and services. And here is the rule: Whatever method of marketing and sales you're using today will, sooner or later, stop working. Sometimes it will stop working for reasons you know, and sometimes it will be for reasons you don't know. In either case, your methods of marketing and sales will eventually stop working, and you'll have to develop new sales, marketing and advertising approaches, offerings, and strategies. Place The fourth P in the marketing mix is the place where your product or service is actually sold. Develop the habit of reviewing and reflecting upon the exact location where the customer meets the salesperson. Sometimes a change in place can lead to a rapid increase in sales. You can sell your product in many different places. Some companies use direct selling, sending their salespeople out to personally meet and talk with the prospect. Some sell by telemarketing. Some sell through catalogs or mail order. Some sell at trade shows or in retail establishments. Some sell in joint ventures with other similar products or services. Some companies use manufacturers' representatives or distributors. Many companies use a combination of one or more of these methods. In each case, the entrepreneur must make the right choice about the very best location or place for the customer to receive essential buying information on the product or service needed to make a buying decision. What is yours? In what way should you change it? Where else could you offer your products or services? Packaging The fifth element in the marketing mix is the packaging. Develop the habit of standing back and looking at every visual element in the packaging of your product or service through the eyes of a critical prospect. Remember, people from their first impression about you within the first 30 seconds of seeing you or some element of your company. Small improvements in the packaging or external appearance of your product or service can often lead to completely different reactions from your customers.

With regard to the packaging of your company, your product or service, you should think in terms of everything that the customer sees from the first moment of contact with your company all the way through the purchasing process. Packaging refers to the way your product or service appears from the outside. Packaging also refers to your people and how they dress and groom. It refers to your offices, your waiting rooms, your brochures, your correspondence and every single visual element about your company. Everything counts. Everything helps or hurts. Everything affects your customer's confidence about dealing with you. When IBM started under the guidance of Thomas J. Watson, Sr., he very early concluded that fully 99 percent of the visual contact a customer would have with his company, at least initially, would be represented by IBM salespeople. Because IBM was selling relatively sophisticated high-tech equipment, Watson knew customers would have to have a high level of confidence in the credibility of the salesperson. He therefore instituted a dress and grooming code that became an inflexible set of rules and regulations within IBM. As a result, every salesperson was required to look like a professional in every respect. Every element of their clothing-including dark suits, dark ties, white shirts, conservative hairstyles, shined shoes, clean fingernails-and every other feature gave off the message of professionalism and competence. One of the highest compliments a person could receive was, "You look like someone from IBM."

Positioning The next P is positioning. You should develop the habit of thinking continually about how you are positioned in the hearts and minds of your customers. How do people think and talk about you when you're not present? How do people think and talk about your company? What positioning do you have in your market, in terms of the specific words people use when they describe you and your offerings to others? In the famous book by Al Reis and Jack Trout, Positioning, the authors point out that how you are seen and thought about by your customers is the critical determinant of your success in a competitive marketplace. Attribution theory says that most customers think of you in terms of a single attribute, either positive or negative. Sometimes it's "service." Sometimes it's "excellence." Sometimes it's "quality engineering," as with Mercedes Benz. Sometimes it's "the ultimate driving

machine," as with BMW. In every case, how deeply entrenched that attribute is in the minds of your customers and prospective customers determines how readily they'll buy your product or service and how much they'll pay. Develop the habit of thinking about how you could improve your positioning. Begin by determining the position you'd like to have. If you could create the ideal impression in the hearts and minds of your customers, what would it be? What would you have to do in every customer interaction to get your customers to think and talk about in that specific way? What changes do you need to make in the way interact with customers today in order to be seen as the very best choice for your customers of tomorrow? People The final P of the marketing mix is people. Develop the habit of thinking in terms of the people inside and outside of your business who are responsible for every element of your sales and marketing strategy and activities.It's amazing how many entrepreneurs and businesspeople will work extremely hard to think through every element of the marketing strategy and the marketing mix, and then pay little attention to the fact that every single decision and policy has to be carried out by a specific person, in a specific way. Your ability to select, recruit, hire and retain the proper people, with the skills and abilities to do the job you need to have done, is more important than everything else put together. In his best-selling book, Good to Great, Jim Collins discovered the most important factor applied by the best companies was that they first of all "got the right people on the bus, and the wrong people off the bus." Once these companies had hired the right people, the second step was to "get the right people in the right seats on the bus."To be successful in business, you must develop the habit of thinking in terms of exactly who is going to carry out each task and responsibility. In many cases, it's not possible to move forward until you can attract and put the right person into the right position. Many of the best business plans ever developed sit on shelves today because the [people who created them] could not find the key people who could execute those plans. ===========================================================

Q1. b) What is STP strategy? Discuss the concept of positioning by taking an example of your choice and the benefits that firms accrue in a competitive environment. Solution: A marketing strategy is the planning and deployment methods used to obtain customers for an organization. The marketing strategy involves segmenting and targeting which markets will be most beneficial to an organization and then marketing to those markets. The marketing strategy involves the planning of company positioning as well. STP strategy:-

STP is a short form of- Segmenting, Targeting, Positioning. Segmenting Segmenting a market helps a company target its products / solutions better to its customers. It is a strategic approach midway between mass marketing and individual marketing. Segmentation is based on the concept that customers in a specific segment have similar needs, purchasing power, geographic location, etc. A market can be segmented according to customer needs. For example, car manufacturers can segment the car market into two broad segments: basic cars and luxury cars. They can have separate product lines for each segment. For example, for the luxury car segment, Toyota has the Lexus product line, Honda has Acura, and Nissan has Infiniti.

Targeting:Targeting is a process of prioritizing target segments based on the firms core competencies or capabilities, and other researched factors including segmented market size, growth potential of the segmented market, competitive dynamics, etc. Unless the target segment is chosen based on considerable market research and careful planning, a companys product / solution will not be able to capture the

intended market share in the target segment. So, targeting is key, because businesses battle for market share in these target segments.

Positioning:This involves developing a marketing mix for each targeted segment. One way to think of a marketing mix is using the 4Ps framework. Another way to look at positioning is articulating the value of the companys products / solutions vis--vis customer needs, competitive products, etc. Product data sheets, hot sheets, beat sheets, cheat sheets, white papers help articulate this value tactically.

Discussion of positioning:he term positioning is widely used within the marketing and advertising communities today, and its meaning has expanded beyond the narrow definitions of Trout and Ries. Positioning is often used nowadays as a broad synonym for marketing strategy. However, the terms positioning and marketing strategy should not be used interchangeably. Rather, positioning should be thought of as an element of strategy, a component of strategy, not as the strategy itself. The term positioning is, and should be, intimately connected to the concept of target market. That is, a brands positioning defines the target audience. For example, an airline could position itself against other airlines, which defines the target audience as airline travelers. Or, it could position itself against all modes of transportation between two destinations, which then defines the target audience as all travelers between those two markets. The second positioning reaches out to a much larger target audience. Another example: a brand of peanut butter could position itself against all competing brands of peanut butter, which defines the audience as peanut butter users. Or, the brand could position itself against margarine and butter, which defines a very different target market. Positioning, then, is analogous to aiming an artillery field gun. How you position the cannon defines who and what the target is. So, the term aiming is not a bad definition of positioning, and the term targeting is not a bad definition of positioning. The positioning possibilities that exist for any given brand or service are almost infinite in number. Some commonly used positioning strategies are:

Positioning against a broader market; for example, positioning a bicycle brand as a substitute for the automobile, rather than as a substitute for other brands of bicycles. Positioning against a price segment of the market; for example, positioning a car brand against luxury imported cars. Positioning against a usage segment of the market; for instance, positioning a brand of cooking oil as the very best brand of oil for frying chicken. Positioning against a geographic segment of a market; for example, positioning Ford trucks as made for driving conditions in Texas. Positioning against a psychographic segment of the market; as an example, positioning the Volvo as the car for drivers who are primarily concerned about safety. Positioning against a channel of distribution, a season of the year, a particular type of weather, a human fear, etc.

Again, positioning possibilities are almost limitless for any given brand and can be defined in many different ways. The correct positioning of a brand is basic and fundamental to its success; an incorrect or suboptimal positioning can doom a brand to underperformance or failure. So, how does one arrive at an optimal positioning for a given brand? The search for an optimal positioning begins in the mind of the consumer, and it is here that we must turn to marketing research for help.

Example:Positioning is defined as positioning "brands clearly in target customers' minds" (Kotler 215). Brand can be positioned at any of three levels: product attributes, desirable benefit, and beliefs and values. There is a Domino's Pizza commercial (1985) successfully positioning the brand at the desirable benefit level. First, the ads basically emphasizes only 2 outstanding advantages of Domino's Pizza. First, the ads tells us that Domino promises that every pizza delivered will

be fresh because they do not start making pizza until customers call to order ("our hands do not move until you tell them to"). It is a great product attribute since not every other competitors have so many local stores to secure the high quality of every pizza as Domino, of which there are 9000 stores around the world. Second, the ads promises a desirable benefit: delivery in 30 minutes. It is not a product attribute but a service associated to its products. By this better positioning, the brand, Domino's Pizza, is assosciated with quick delivery beside high quality in customers' minds. Calling delicious pizza without going out of home and enjoying pizza within 30 minutes are really the product and service customers are seeking for. Domino positions its brand very successful in customers' minds. ========================================================== Q2. a) What do you understand by the term concept of PLC? Discuss taking any two examples of your choice in the recent part. Solution: Concept:Product Life Cycle (PLC) is a term used to describe individual stages in the life of a product. Product life cycle is an important aspect of conducting business which affects strategic planning. Product life cycle can be divided into several stages characterized by the revenue generated by the product. What is the fundamental idea behind product life cycle? Product life cycle is very similar to a life. A living being is first born (introduction). Then it grows through its youth (growth) to become an adult (maturity). When it gets old, it declines both mentally and physically (decline), after which it eventually dies. An analogy to this process can be observed in production as well. First, a product is being developed. After we know what it is that we are selling and what the customer wants, we introduce it to the market. As our product becomes known by consumers, it grows until it establishes a solid position in the market. At this point, our product is mature. After a period of time, the product is overtaken by development and the introduction of superior competitors. Then it goes into decline and is eventually withdrawn. All these phases together are called product life cycle.

What is the official definition of a product life cycle? Business strategy and performance is affected to a great degree by life cycle stages of a product or service. Business priorities, budgeting, funding, production, distribution, marketing -- all these production aspects change depending on how long a product or a service has been in the market. The product life cycle method identifies the four (five) distinct stages affecting sales of a product, from the product's inception until its retirement. Introduction Phase The introduction phase is when the public first sees or hears about a product. The product appears in stores for the first time, and people start seeing print and television ads. During this phase, a company may choose one of two pricing strategies. They may set prices high to recoup initial expenses that went into producing the product. For example, a cellphone manufacturer with new technology may introduce cell phones 10 percent to 20 percent above the prices of most premium cell phones. They may price their phones higher because of the hype and anticipation of the new technology. The company also knows enough people will pay the extra 10 to 20 percent for it to earn substantial profits. Contrarily, the same cellphone company may introduce a cell phone with basic features at reduced prices in hopes of gaining lots of new customers. Growth Phase The growth phase is when sales and profits for the new product start rising. A company will usually keep product prices about the same during the growth stage to maximize earnings. Product quality is also maintained. However, a company will usually expand its product distribution during the growth stage. For example, a consumer-products company might start selling its organic cereal in new markets, based on positive marketing research from consumers. Eventually, the organic cereal will start appearing in stores across the country. Company marketers usually increase advertising during the growth phase, too, according to NetMBA.com. Maturity Stage Success inevitably leads to increased competition. Other companies eventually will start introducing similar products, especially if the initial product is highly successful. Consequently, the demand for the product and its competitors will peak at some point. Sales growth will start to decline. Some companies may lower prices to capture additional market share or new customers. At this point, a company may need to develop new product features or services to differentiate its products from the competition's. For example, the company that first introduced the product may enhance its customer-service department to establish itself as the service leader in the industry. The company's stellar customer service may be the

distinguishing element that spurs additional sales and customers. The company would then feature its superior customer service in most of its advertising. Decline Stage Demand for the product will eventually wane as newer technologies are introduced. Hence, companies can either maintain the product, sell it at heavily reduced prices or discontinue the product. A company that maintains the product may continue increasing sales by finding new uses for the product. For example, a soap manufacturer may discover through marketing research that restaurants and industrial companies like the cleaning properties of its soap. Subsequently, the company would start selling its soap to both consumers and businesses. This strategy could help extend the life of the product.

Example:-1:-CAR 1. The car is manufactured at a production plant. Raw materials, recycled materials and components enter the factory at one end of the enormous building. Completed cars are driven out of the opposite end and transported to their owners. 2. The car is driven throughout its useful life time. During this time at may be used for work, business and pleasure. It consumes petrol or diesel and pollutes the atmosphere. From time to time it needs servicing and repairing. 3. Eventually, after many years, it cannot be repaired any further and it breaks down for the last time. This may be after ten years or more. The decision has to be taken regarding what to do next.

4. The car is taken to the scrap yard. Once upon a time this would have been the final resting place of most cars. It would have been stripped of useful components and left to rust. 5. Today the useful parts are still stripped from the car. This may include a wide range of materials and components. These will include the alloy wheels, recyclable rubber, plastics and metals. These parts/materials will be sold on to companies that can reclaim the materials for further use. For example, the rubber from the old types can be turned into granules and reused. Many of the plastics used in modern cars can be recycled in a similar way, turning old plastic into granules that can be used to manufacture many modern products. 6. The reminder of the car is crushed into blocks. These are melted down in special furnaces, the waste is removed leaving the usable metal (normally steel). The recycled metal can be used to manufacture new cars of other products. Example 2:-news paper. When designing and manufacturing a product it is important to consider its life cycle. Life cycle covers the time from its manufacture to its recycling or disposal. A typical product that has a relatively short life cycle is a newspaper / magazine. Everyone reads newspapers / magazines at some point in their lives and many read a newspaper everyday. As the recycling of products becomes more popular it is important that we consider all the products we use, even the humble newspaper, as a valuable resource even after its useful life time. The life cycle of a simple newspaper is considered below.

It is commonsense to recycle as much reusable material as possible. Products made from recycled materials are usually cheaper than those made from newly processed materials. Recycling products is good for the environment and means that we are using less of the worlds resources. Recycling materials such as steel, copper, brass and other metals reduces pollution caused by the processing of new metals and it saves energy. It also means that the worlds valuable and irreplaceable materials will last longer. For example, it is estimated that in forty years the worlds reserves of copper ore will have run out. Copper is vital in much of the electrical equipment we use. Recycling used and discarded copper will extent the length of time copper is available. It will allow technologists time to find alternative materials capable of replacing copper.

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Q2.(b) List out and explain the three additional marketing mix element essentials in marketing of services. Discus by taking any two services of your choice. Ans:- Having discussed the characteristics of a service, let us now look at the marketing mix of a service. The service marketing mix comprises off the 7ps. These include: Product Price Place Promotion People Process Physical evidence. Lets now look at the remaining 3 ps: People An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for. Many British organisations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards. Process Refers to the systems used to assist the organisation in delivering the service. Imagine you walk into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an

efficient service delivery? Bank that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. Physical Evidence Where is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down! Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based on their sight of the service provision which will have an impact on the organizations perceptual plan of the service. Services example -courier service IF YOU TAKE ''COURIER SERVICE'' AS AN EXAMPLE THE CUSTOMER SATISFACTION / REPEAT SALES HAPPENS,IF PEOPLE people [ ability, competent, right attitude ] [the people should have right interpersonal skills/ communication skills / attitude/ability to respond]

PHYSICAL EVIDENCE -product service [ features/benefits] [the right range of locations coverage/ services like ''urgent delivery'' / ''local delivery ''/international delivery''] -place [ flexibility][home pick up service / 24 hours service ] -price [ flexi] [ pricing as per size / weight / distance ] -promotions [ selected weighted mix] [ contactable on mobile / 24 hours internet / yellow pages.] PROCESS -process [documentation / billing is simple / short /easy ]

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3. a) Discuss the role and importance of physical distribution in accomplishing the marketing goals of a firm. Ans- Physical distribution is the set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution takes place within numerous wholesaling and retailing distribution channels, and includes such important decision areas as customer service, inventory control, materials handling, protective packaging, order procession, transportation, warehouse site selection, and warehousing. Physical distribution is part of a larger process called "distribution," which includes wholesale and retail marketing, as well the physical movement of products A SYSTEM APPROACH Physical distribution can be viewed as a system of components linked together for the efficient movement of products. Small business owners can ask the following questions in addressing these components: Customer servicehat level of customer service should be provided? Transportationow will the products be shipped? Warehousinghere will the goods be located? How many warehouses should be utilized? Order processingow should the orders be handled? Inventory controlow much inventory should be maintained at each location? Protective packaging and materials handlingow can efficient methods be developed for handling goods in the factory, warehouse, and transport terminals? These components are interrelated: decisions made in one area affect the relative efficiency of others. For example, a small business that provides customized personal computers may transport finished products by air rather than by truck, as faster delivery times may allow lower inventory costs, which would more than offset the higher cost of air transport. Viewing physical distribution from a systems

perspective can be the key to providing a defined level of customer service at the lowest possible cost. CUSTOMER SERVICE Customer service is a precisely-defined standard of customer satisfaction which a small business owner intends to provide for its customers. For example, a customer service standard for the above-mentioned provider of customized computers might be that 60 percent of all PCS reach the customer within 48 hours of ordering. It might further set a standard of delivering 90 percent of all of its units within 72 hours, and all 100 percent of its units within 96 hours. A physical distribution system is then set up to reach this goal at the lowest possible cost. In today's fastpaced, technologically advanced business environment, such systems often involve the use of specialized software that allows the owner to track inventory while simultaneously analyzing all the routes and transportation modes available to determine the fastest, most cost-effective way to delivery goods on time. TRANSPORTATION The United States' transportation system has long been a government-regulated industry, much like its telephone and electrical utilities. But in 1977 the deregulation of transportation began with the removal of federal regulations for cargo air carriers not engaged in passenger transportation. The deregulation movement has since expanded in ways that have fundamentally altered the transportation landscape for small business owners, large conglomerates and, ultimately, the consumer. Transportation costs are largely based on the rates charged by carriers. There are two basic types of transportation rates: class and commodity. The class rate, which is the higher of the two rates, is the standard rate for every commodity moving between any two destinations. The commodity rate is sometimes called a special rate, since it is given by carriers to shippers as a reward for either regular use or large-quantity shipments. Unfortunately, many small business owners do not have the volume of shipping needed to take advantage of commodity rates. However, small businesses are increasingly utilizing a third type of rate that has emerged in recent years. This rate is known as a negotiated or contract rate. Popularized in the 1980s following transportation deregulation, contract rates allow a shipper and carrier to negotiate a rate for a particular service, with the terms of the rate, service, and other variables finalized in a contract between the two parties. Transportation costs vary by mode of shipping, as discussed below. TRUCKINGLEXIBLE AND GROWING The shipping method most favored by small business (and many large enterprises as well) is trucking. Carrying primarily

manufactured products (as opposed to bulk materials), trucks offer fast, frequent, and economic delivery to more destinations in the country than any other mode. Trucks are particularly useful for short-distance shipments, and they offer relatively fast, consistent service for both large and small shipments. AIR FREIGHTAST BUT EXPENSIVE Because of the relatively high cost of air transport, small businesses typically use air only for the movement of valuable or highly-perishable products. However, goods that qualify for this treatment do represent a significant share of the small business market. Owners can sometimes offset the high cost of air transportation with reduced inventory-holding costs and the increased business that may accompany faster customer service. WATER CARRIERSLOW BUT INEXPENSIVE There are two basic types of water carriers: inland or barge lines, and oceangoing deep-water ships. Barge lines are efficient transporters of bulky, low-unit-value commodities such as grain, gravel, lumber, sand, and steel. Barge lines typically do not serve small businesses. Oceangoing ships, on the other hand, operate in the Great Lakes, transporting goods among port cities, and in international commerce. Sea shipments are an important part of foreign trade, and thus are of vital importance to small businesses seeking an international market share. RAILROADSONG DISTANCE SHIPPING Railroads continue to present an efficient mode for the movement of bulky commodities over long distances. These commodities include coal, chemicals, grain, non-metallic minerals, and lumber and wood products. PIPELINESPECIALIZED TRANSPORTERS Pipelines are utilized to efficiently transport natural gas and oil products from mining sites to refineries and other destinations. In addition, so-called slurry pipelines transport products such as coal, which is ground to a powder, mixed with water, and moved as a suspension through the pipes. INTERMODAL SERVICES Small business owners often take advantage of multimode deals offered by shipping companies. Under these arrangements, business owners can utilize a given transportation mode in the section of the trip in which it is most cost efficient, and use other modes for other segments of the transport. Overall costs are often significantly lower under this arrangement than with singlemode transport. Of vital importance to small businesses are transporters specializing in small shipments. These include bus freight services, United Parcel Service, Federal Express, DHL International, the United States Postal Service, and others. Since

small businesses can be virtually paralyzed by transportation strikes or other disruptions in small shipment service, many owners choose to diversify to include numerous shippers, thus maintaining an established relationship with an alternate shipper should disruptions occur. Additionally, small businesses often rely on freight forwarders who act as transportation intermediaries: these firms consolidate shipments from numerous customers to provide lower rates than are available without consolidation. Freight forwarding not only provides cost savings to small businesses, it provides entrepreneurial opportunities for start-up businesses as well. WAREHOUSING Small business owners who require warehousing facilities must decide whether to maintain their own strategically located depot(s), or resort to holding their goods in public warehouses. And those entrepreneurs who go with non-public warehousing must further decide between storage or distribution facilities. A storage warehouse holds products for moderate to long-term periods in an attempt to balance supply and demand for producers and purchasers. They are most often used by small businesses whose products' supply and demand are seasonal. On the other hand, a distribution warehouse assembles and redistributes products quickly, keeping them on the move as much as possible. Many distribution warehouses physically store goods for fewer than 24 hours before shipping them on to customers. In contrast to the older, multi-story structures that dot cities around the country, modern warehouses are long, one-story buildings located in suburban and semirural settings where land costs are substantially less. These facilities are often located so that their users have easy access to major highways or other transportation options. Single-story construction eliminates the need for installing and maintaining freight elevators, and for accommodating floor load limits. Furthermore, the internal flow of stock runs a straight course rather than up and down multiple levels. The efficient movement of goods involves entry on one side of the building, central storage, and departure out the other end. Computer technology for automating warehouses is dropping in price, and thus is increasingly available for small business applications. Sophisticated software translates orders into bar codes and determines the most efficient inventory picking sequence. Order information is keyboarded only once, while labels, bills, and shipping documents are generated automatically. Information reaches hand-held scanners, which warehouse staff members use to fill orders. The advantages of automation include low inventory error rates and high processing speeds.

INVENTORY CONTROL Inventory control can be a major component of a small business physical distribution system. Costs include funds invested in inventory, depreciation, and possible obsolescence of the goods. Experts agree that small business inventory costs have dropped dramatically due to deregulation of the transportation industry. Inventory control analysts have developed a number of techniques which can help small businesses control inventory effectively. The most basic is the Economic Order Quantity (EOQ) model. This involves a trade-off between the two fundamental components of an inventory control cost: inventory-carrying cost (which increases with the addition of more inventory), and order-processing cost (which decreases as the quantity ordered increases). These two cost items are traded off in determining the optimal warehouse inventory quantity to maintain for each product. The EOQ point is the one at which total cost is minimized. By maintaining product inventories as close to the EOQ point as possible, small business owners can minimize their inventory costs. ORDER PROCESSING The small business owner is concerned with order processingnother physical distribution functionecause it directly affects the ability to meet the customer service standards defined by the owner. If the order processing system is efficient, the owner can avoid the costs of premium transportation or high inventory levels. Order processing varies by industry, but often consists of four major activities: a credit check; recording of the sale, such as crediting a sales representative's commission account; making the appropriate accounting entries; and locating the item, shipping, and adjusting inventory records. Technological innovations, such as increased use of the Universal Product Code, are contributing to greater efficiency in order processing. Bar code systems give small businesses the ability to route customer orders efficiently and reduce the need for manual handling. The coded information includes all the data necessary to generate customer invoices, thus eliminating the need for repeated keypunching. Another technological innovation affecting order processing is Electronic Data Interchange. EDI allows computers at two different locations to exchange business documents in machine-readable format, employing strictly-defined industry standards. Purchase orders, invoices, remittance slips, and the like are exchanged electronically, thereby eliminating duplication of data entry, dramatic reductions in data entry errors, and increased speed in procurement cycles.

PROTECTIVE PACKAGING AND MATERIALS HANDLING Another important component of a small business physical distribution system is material handling. This comprises all of the activities associated with moving products within a production facility, warehouse, and transportation terminals. One important innovation is known as unitizingombining as many packages as possible into one load, preferably on a pallet. Unitizing is accomplished with steel bands or shrink wrapping to hold the unit in place. Advantages of this material handling methodology include reduced labor, rapid movement, and minimized damage and pilferage. A second innovation is containerization. the combining of several unitized loads into one box. Containers that are presented in this manner are often unloaded in fewer than 24 hours, whereas the task could otherwise take days or weeks. This speed allows small export businesses adequate delivery schedules in competitive international markets. In-transit damage is also reduced because individual packages are not handled en route to the purchaser.

=========================================================== b) What are the major pricing strategies available to the marketer? Discuss each of them in terms of this merits and demerits. What pricing strategy would you support in the following cases i) Low priced Tablet Computer ii) CNG fitted small car Solution: Major pricing strategies-There are three main approaches a business takes to setting price: Cost-based pricing: price is determined by adding a profit element on top of the cost of making the product. Customer-based pricing: where prices are determined by what a firm believes customers will be prepared to pay Competitor-based pricing: where competitor prices are the main influence on the price set Lets take a brief look at each of these approaches;

Cost based pricing This involves setting a price by adding a fixed amount or percentage to the cost of making or buying the product. In some ways this is quite an old-fashioned and somewhat discredited pricing strategy, although it is still widely used. After all, customers are not too bothered what it cost to make the product they are interested in what value the product provides them. Cost-plus (or mark-up) pricing is widely used in retailing, where the retailer wants to know with some certainty what the gross profit margin of each sale will be. An advantage of this approach is that the business will know that its costs are being covered. The main disadvantage is that cost-plus pricing may lead to products that are priced un-competitively. Here is an example of cost-plus pricing, where a business wishes to ensure that it makes an additional 50 of profit on top of the unit cost of production. Unit cost Mark-up Selling price 100 50% 150

How high should the mark-up percentage be? That largely depends on the normal competitive practice in a market and also whether the resulting price is acceptable to customers. In the UK a standard retail mark-up is 2.4 times the cost the retailer pays to its supplier (normally a wholesaler). So, if the wholesale cost of a product is 10 per unit, the retailer will look to sell it for 2.4x 10 = 24. This is equal to a total mark-up of 14 (i.e. the selling price of 24 less the bought cost of 10). The main advantage of cost-based pricing is that selling prices are relatively easy to calculate. If the mark-up percentage is applied consistently across product ranges, then the business can also predict more reliably what the overall profit margin will be.

Customer-based pricing Penetration pricing You often see the tagline special introductory offer the classic sign of penetration pricing. The aim of penetration pricing is usually to increase market share of a product, providing the opportunity to increase price once this objective has been achieved. Penetration pricing is the pricing technique of setting a relatively low initial entry price, usually lower than the intended established price, to attract new customers. The strategy aims to encourage customers to switch to the new product because of the lower price. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume. In the short term, penetration pricing is likely to result in lower profits than would be the case if price were set higher. However, there are some significant benefits to long-term profitability of having a higher market share, so the pricing strategy can often be justified. Penetration pricing is often used to support the launch of a new product, and works best when a product enters a market with relatively little product differentiation and where demand is price elastic so a lower price than rival products is a competitive weapon. Price skimming Skimming involves setting a high price before other competitors come into the market. This is often used for the launch of a new product which faces little or no competition usually due to some technological features. Such products are often bought by early adopters who are prepared to pay a higher price to have the latest or best product in the market. Good examples of price skimming include innovative electronic products, such as the Apple iPad and Sony PlayStation 3. There are some other problems and challenges with this approach: Price skimming as a strategy cannot last for long, as competitors soon launch rival products which put pressure on the price (e.g. the launch of rival products to the iPhone or iPod). Distribution (place) can also be a challenge for an innovative new product. It may be necessary to give retailers higher margins to convince them to stock the product,

reducing the improved margins that can be delivered by price skimming. A final problem is that by price skimming, a firm may slow down the volume growth of demand for the product. This can give competitors more time to develop alternative products ready for the time when market demand (measured in volume) is strongest. Loss leaders The use of loss leaders is a method of sales promotion. A loss leader is a product priced below cost-price in order to attract consumers into a shop or online store. The purpose of making a product a loss leader is to encourage customers to make further purchases of profitable goods while they are in the shop. But does this strategy work? Pricing is a key competitive weapon and a very flexible part of the marketing mix. If a business undercuts its competitors on price, new customers may be attracted and existing customers may become more loyal. So, using a loss leader can help drive customer loyalty. One risk of using a loss leader is that customers may take the opportunity to bulkbuy. If the price discount is sufficiently deep, then it makes sense for customers to buy as much as they can (assuming the product is not perishable). Using a loss leader is essentially a short-term pricing tactic for any one product. Customers will soon get used to the tactic, so it makes sense to change the loss leader or its merchandising every so often. Predatory pricing (note: this is illegal) With predatory pricing, prices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition. The price set might even be free, or lead to losses by the predator. Whatever the approach, predatory pricing is illegal under competition law. Psychological pricing Sometimes prices are set at what seem to be unusual price points. For example, why are DVDs priced at 12.99 or 14.99? The answer is the perceived price barriers that customers may have. They will buy something for 9.99, but think that 10 is a little too much. So a price that is one pence lower can make the difference between closing the sale, or not!

The aim of psychological pricing is to make the customer believe the product is cheaper than it really is. Pricing in this way is intended to attract customers who are looking for value. Competitor-based pricing If there is strong competition in a market, customers are faced with a wide choice of who to buy from. They may buy from the cheapest provider or perhaps from the one which offers the best customer service. But customers will certainly be mindful of what is a reasonable or normal price in the market. Most firms in a competitive market do not have sufficient power to be able to set prices above their competitors. They tend to use going-rate pricing i.e. setting a price that is in line with the prices charged by direct competitors. In effect such businesses are price-takers they must accept the going market price as determined by the forces of demand and supply. An advantage of using competitive pricing is that selling prices should be line with rivals, so price should not be a competitive disadvantage. The main problem is that the business needs some other way to attract customers. It has to use non-price methods to compete e.g. providing distinct customer service or better availability.

Advantage and disadvantage :Industry Standard and Life-Cycle Pricing Pricing according to a mix of the cost of producing the product and industry standard is easy, but lacks competitive strategy. The price should be used in conjunction with the other elements of the marketing mix. If a product is supposed to be high-end, it should be priced accordingly. Sometimes, managers make the mistake of leaving the price the same. The price of the product should vary throughout the products life cycle; the price strategist should set different prices for product introduction, growth, maturity and decline. Management Pricing Some managers assume that consumers who wish to purchase a product would pay whatever the product is priced. Under this line of thought, many managers price

the product at what they think it should cost, not what the consumer thinks it should cost. This may lead to a loss in sales because consumers often interpret prices along with past purchasing experiences and information from research. Consumer-Based Pricing Strategies Consumers tend to consider prices in terms of what they think the price should be, comparing their perceived price with the actual price. Discrepancy in either direction (too high or too low) may cause the consumer to purchase the product from another company. A consumer-based pricing strategy can be advantageous because it goes inside the mind of the intended consumer to predict what the consumer would be willing to pay for a product. Market research and attention to other elements of the marketing mix help determine the consumers ideal price. Pricing According to Demand Price strategy may also be tied to the economic law of supply and demand. The law of supply and demand states that prices should rise as demand for the product rises. The rise in price leads to a rise in profits, which allows the company to produce more products. The additional products leads to a surplus, the surplus causes prices to fall once more, and the lower prices lead to an increase in demand, starting the cycle over again. Advantages of demand pricing include the ability to optimize prices using charts and mathematics that predict ideal prices. However, demand pricing may lead to revenue loss by failing to take into account variables such as production costs and the consumers desired price.

Pricing strategy for:- Low priced Tablet Computer :Ans:- cost based pricing Pricing strategy for:- CNG fitted small car :Ans:- customer based pricing ========================================================== 4.a) What makes manager rely on primary data for marketing decision? Substantiate with Suitable examples Solution: Collecting the right information to make a rational and informed marketing decision sometimes simply means using your knowledge to make a decision on the spot. At other times, it entails collecting an enormous amount of

information, or simply put data: the facts and figures related to the problem. Facts and figures that have already been recorded before the project at hand areSecondary data, whereas Primary data are facts and figures that are newly collected for the project. Gathering primary data during marketing research is only the first step in retrieving the necessary information to continue in the marketing research process. Primary data can be supported significantly with the use of secondary data. Secondary data can greatly substantiate all information gathered during primary research if primary research is even required. In some instances, secondary data alone can solve the problem, eliminating the need for primary data. There are many ways in which a marketing researcher can retrieve secondary data. The largest and frequently least expensive source for secondary data is the World Wide Web. There are many reasons as to why secondary data is utilized, especially from the internet. The first and foremost reason for the use of online secondary data for marketing research is because almost any data imaginable is readily available. Secondary data can be retrieved from thousands of places on the internet. Many organizations list secondary data on the internet for instant access to marketing researchers. This allows marketing researchers quick access to information, which consequently, allows marketing researchers to make faster, more precise decisions. Not all problems can be solved with the use of secondary online data. Despite that online secondary data is low cost, by utilizing secondary data over primary data, companies can save thousands of dollars in marketing research expenses every year. A focus group or depth interview is always more appropriate than online secondary data when a corporation needs to know the inner most thoughts and motives of customers. Information retrieved through internet market research tools always calls into question the legitimacy of the research findings because of the ever growing presence of false and inaccurate information.

In conducting primary market research, a company collects data directly from the foreign marketplace through interviews, surveys, and other direct contact with

representatives and potential buyers. Primary market research has the advantage of being tailored to the company's needs and provides answers to specific questions, but the collection of such data is time-consuming and expensive. Marketing, management and consumer research projects in higher education can be either predominantly empirical, conceptual, or they can include elements of each. Empirical knowledge derives from experience and empirical research projects utilize first-hand experience of primary data sets from, for example, interviews, survey data or observation. The primary data is placed in the context of available literature (in the literature review) and is then analysed for insights or findings. An empirical project report will represent the students own systematic investigation into the topic. It will include a critical review of relevant research literature, perhaps including important practitioner literature (trade press, industry reports) and published market studies too. The general findings from the review are then evaluated in the light of the students first-hand experience of the particular topic area, that is, their interpretation of the empirical data that has been gathered. The amount of primary data in the empirical project can vary greatly.In research projects that are part of taught courses, data sampling may be based on very small samples for practical reasons. Qualitative data-gathering techniques use sampling approaches that are not required to provide a basis for statistically significant generalization. Data can be based on convenience samples and need not be randomized. Primary data can be used to enhance a primarily conceptual project or it can be used as the major basis of argument for a project. One MSc student project the author has supervised used three focus groups, another used four interviews. The amount of primary data that is useful depends on the research question. It is also important for student researchers to remember that even if small samples are representative of larger groups, that is, if they share the major characteristics of the larger groups, findings are still limited to the immediate research context and should be expressed cautiously in view of this. It is an important inductive principle of research that even if a particular fact or relationship between variables is true in millions of cases, we cannot know for sure if it will be true in the next case we examine. Many projects combine elements of both conceptual and empirical approaches. One way of combining the two approaches is to focus on the literature review while carrying out a limited number of short interviews to get important practitioner or consumer perspectives on the topic. These perspectives can then be acknowledged and used in the discussion. Many projects in marketing and management that investigate a live problem do so by reviewing relevant literature on research and practice and then comparing the

major findings with first-hand interviews with practitioners. In this way an empirical component can be added to a mainly conceptual research project. Conducting interviews with practising managers also has the added benefit of sharpening students research interviewing skills and filling out their knowledge of the area. It can also be a useful exercise in getting contacts in an industry that might offer employment prospects after graduation.

Decision-Making Most studies of the decision-making process in marketing have used an adaptation of the scientific method. This decision-making process is as follows:

a. Problem recognition the consumer recognizes a problem. For example, her car has had major mechanical problems for the last two months. b. Information search internal and external. The consumer thinks about options she may have to remedy her situation (internal search). And then she seeks external sources of information such as friends, newspapers, TV, and the internet. c. Alternative identification and evaluation she has some ideas about what alternatives she has and how to approach them. She now must compare and contrast the options she has. d. Choice and purchase based on this process of consideration the consumer now purchases the most attractive option she has identified. e. Post purchase evaluation the consumer experiences her choice and determines if she is happy with it. f. Feedback learning for future consumption behavior the consumer remembers how she feels about her purchase and makes note of it for future reference (internal search). There are two types of data collection methods, they areprimary data collection and secondary data collection. Primary Data Collection: this type of datacollection are usually observed and recorded or collected directly fromrespondents. This type of data must be gathered

by observing phenomena orsurveying respondents. Primary data collection can be deemed as bespoke andtherefore time consuming and costly. This process is more lengthy and complex, it is typically more costly, involving experimentation, sampling, survey methods, and questionnaire construction. The acquisition of primary data often requires an experimental approach to determine which variable or variables caused an event to occur. Experimentation: this involves keeping certain variables constant so that the effects of the experimental variables can bemeasured. For example, when Apple tests a change in its AppleWorks word processing computer program, all sales and marketing variables should be held constant except the change in the program. Sampling: by systematically choosing a limited number of units, or sample, to represent the characteristics of a total population, marketers can project the reactions of a total market or market segment. The objective of sampling in product development, therefore, is to select representative units from total population. Sampling procedures are used in studying the likelihood of events based on assumptions about the future. Survey Methods: This includes interviews by mail,e-mail, or telephone and personal interviews. Selection of a survey method depends on the nature of the problem, the data needed to test the hypothesisand the resources, such as funding and personnel that are available to the researcher. Questionnaire Construction: A careful constructed questionnaire is essential to the success of any survey. A questionnaire is abase document for research purposes that provides the questions and the structure for an interview or self-completion and has provision for respondents' answers. Questions must be designed to elicit information that meets the study's data requirements. Observation Methods: This method enables a researcher to record respondents' overt behaviour, taking note of physical conditions and events. Direct contact with respondents is avoided; instead, their actions are examined and noted systematically. Observation is straightforward and avoids a central problem of survey methods: motivating respondents to state their true feelings or opinion.

b) Discuss the factors that are major determinants of promotion mix in the following Situations.

i) ii)

Mid size FMCG Company Banking services

Ans:- promotion mix

According to Philip kotler promotion or communication mix means combination of all promotional tools and the firms promotion or communication mix communicates the firms positioning strategies to its relevant markets, including consumers, employees, stockholders, and suppliers The primary role of promotion is to communicate with individuals, groups, or organizations in the environment to directly or indirectly facilitate exchanges. The five major ingredients that can be included in an organization's promotion mix are advertising, personal selling, publicity, packaging, and sales promotion. Advertising is a paid form of non personal communication about an organization and/or its products that is transmitted to a target audience through a mass medium. Personal selling is a process of informing customers and persuading them to purchase products through personal communication in an exchange situation. Publicity is non personal communication in news story form, regarding an organization and/or its products, that is transmitted through a mass medium at no charge. A package can be used for promotional purposes to attract attention and to inform customers. Sales promotion is an activity and/or material that acts as a direct inducement, offering added value or incentive for the product, to resellers, salespersons, or consumers.

Several major determinants that influence the selection of promotional methods to include in a promotion mix for a product are the organization's promotional resources, objectives, and policies; the characteristics of the target market; the characteristics of the product; and the cost and availability of promotional methods. The set of strategic decisions in the area of promotion which concern the allocation of effort among different methods of promotion. Companies often use haphazard and seat-of-the-pants procedures to determine the respective roles of advertising, personal selling, and sales promotion in a product or market situation. A study of the American Marketing Science Institute (MSI) on the subject revealed the following: (1) Decisions on the promotional mix were often diffused among many decision makers. This inhibited the formation of unified promotion strategy, and indecision and conflict often occurred. (2) Personal selling plans were sometimes divorced from the planning of advertising and sales promotion. (3) Frequently the decision makers were not adequately aware of the objectives and broad strategies of the overall product program which the promotion plan was designed to implement. (4) Sales and market share goals tended to be constant, regardless of decreases or increases in promotional expenditures. Thus they became unrealistic as guides and directives for planning, or as criteria of promotional effectiveness, or even as a fair basis for application of the judgment of the decision makers. (5) The working planner was usually expected to prepare only one allocation plan for a product. Alternate marketing or promotion strategies did not receive full consideration. Decisions on the funds allocated among alternative promotional methods usually lacked objective measures of effectiveness or reliable sets of guidelines. Lacking alternative strategies, planners were unprepared to meet

contingencies and to adapt the program readily to feedback of its effects or environmental changes. (6) Negative planning, to be implemented should expenditures be cut back, was missing. Unforeseen cutbacks were perennial in most companies. Promotion funds were often the first to be reduced when profits were threatened. (7) In most of the companies there seemed to be a minimum of emphasis on record keeping and a reluctance to worry about what actually happened in the past as opposed to what was intended. (8) Frequently, senior marketing personnel were not clearly informed of assumptions and conditions underlying lower-echelon decisions the programs submitted for management review often lacked necessary details for upstream decision making. (9) Lower-echelon persons in some companies were not given the authority necessary to carry out their assignments, yet they were responsible for results. (10) Top management seldom asked for support from knowledgeable line and staff groups in arriving at their final decisions these communications difficulties were a source of confusion and a demoralizing influence. (11) Expenditure levels for promotion were typically derived by working backward rather arbitrarily from sales revenue forecasts. Quantifying the objective, and then referring all contributory factors to systematic and comprehensive promotional planning procedures, was rare. In those cases when this was found, it did not appear well documented or complete. (12) The allocation of total budgets among the various tasks and tools of promotion was sometimes determined by sheer intuition, comparing past patterns of decisions, mechanically working backward from the more fixed items to a residual for flexible items, relying on competent judgment of others, and arbitrary rules of thumb.

(13) In policy committee meetings, marketing management often presented wellrationalized, but not necessarily well-structured, arguments in favor of various promotional mixes. These presentations suffered in comparison with the more logical and rational financial and technical proposals presented by other line and staff people. Even less prevalent than systematic planning was the practice of looking at prior years, performances through post audits or reviews intended to enhance the forward-planning process. (14) The present state of the art in marketing administration is such that cause and effect relationships, and other basic insights, are not sufficiently understood to permit knowledgeable forecasts of what to expect from alternate courses of action. Even identifying feasible alternatives can prove difficult. Apparently, a variety of factors needs to be considered to determine the appropriate promotion mix in a particular product or market situation. These factors may be categorized as product factors, market factors, customer factors, budget factors, and marketing mix factors: Product Factors: 1. Nature of product 2. Perceived risk 3. Durable versus nondurable 4. Typical purchase amount. Product factors are mainly related to the way in which the product is bought, consumed, and perceived by the customer. For industrial goods, especially technical products, personal selling is more significant than advertising since these goods usually need to be inspected and compared before being bought. Salespeople can explain the workings of a product and provide on-the-spot answers to customers' queries. For consumer goods such as cosmetics and processed foods, advertising is of primary importance. In addition, advertising plays a dominant role

when used for products which provide an opportunity for differentiation and for those being purchased with emotional motives. The perceived risk of a purchase decision is another variabIe here. Generally speaking, the more risk a buyer perceives to be associated with buying a particular product, the higher will be the importance of personal selling over advertising. A buyer generally likes to have more information on the product when the perceived risk is high, and this necessitates an emphasis on personal selling. Durable goods are bought less frequently than nondurables and usually require a heavy commitment of resources. These characteristics make personal selling of greater significance than advertising for durable goods. However, since many durable goods are sold through franchised dealerships, the influence of each type of promotion should be determined in light of the additional push it would provide in moving the product. Finally, products purchased in small quantities are presumably purchased frequently and require routine decision making. For these products advertising should be preferable to personal selling. Often such products are of low value; therefore, a profitable business in these products can only be conducted on volume. This underlines the importance of advertising in this case. Market Factors 1. Position in its life cycle 2. Market share 3. Industry concentration 4. Intensity of competition 5. Demand perspectives. The first market factor is the position of a product in its life cycle. The creation of

primary demand, hitherto nonexistent, is the primary task during the introductory stage; therefore, a high level of promotion effort is needed to explain a new product to potential customers. For consumer goods in the introductory stage, the major thrust is on heavy advertising supported by missionary selling to help distributors move the product. Additionally, different measures of sales promotion (e.g., sampling, couponing, free demonstrations, etc.) are employed to entice the customer to try the product. In the case of industrial products, personal selling alone is useful during this period. During the growth phase there is increasing demand, which means enough business for all competitors. In the case of consumer goods, however, the promotional effort shifts to reliance on advertising. Industrial goods, on the other hand, begin to be advertised as the market broadens and continue to require a personal selling effort. In the maturity phase competition becomes intense, and advertising, along with sales promotion measures, is resorted to in order to differentiate the product (a consumer good) from competitive brands and to provide an incentive to the customer to buy the product. Industrial goods during maturity call for intensive personal selling. During the decline phase, the promotional effort does not vary much initially from that during the maturity phase except that the intensity of promotion declines. Later on, as price competition becomes keen and demand continues to decline, overall promotional perspectives are reduced. For a given product class, if market share is high, both advertising and personal selling are used. If the market share is low, the emphasis is placed on either personal selling or advertising. This is because high market share seems to indicate that the company does business in more than one segment and uses multiple channels of distribution. Thus, both personal selling and advertising are utilized to promote the product. Where market share is low, the perspectives of the business are limited, and either advertising or personal selling will suffice, depending on the nature of the product.

If the industry is concentrated among a few firms, advertising will achieve additional significance for two reasons. Heavy advertising may help discourage other firms from entering the field. It sustains a desired position for the product in the market. Heavy advertising constitutes an implied warranty of product performance and perhaps decreases the uncertainty consumers associate with new products. In this way new competition is discouraged and existing positions are reinforced. Intensity of competition tends to impact promotional blending along the same lines as market share. When competition is keen, all three types of promotion are needed to sustain the product's position in the market. This is because promotion is needed to inform, remind, and persuade customers to buy the product. On the other hand, if competitive activity is limited, the major function of promotion is to inform and perhaps remind customers about the product. Thus, either advertising or personal selling is mainly used. Hypothetically, advertising is more suited for products which have relatively latent demand. This is because advertising investmnent should open up new opportunities in the long run, and if the carryover effect is counted, expenditure per sales monetary unit would be more beneficial. If demand is limited and new demand is not expected to be created, advertising outlay would be uneconomical. Thus, future potential becomes a significant factor in determining the role of advertising. Customer Factors 1. Household versus business customers 2. Number of customers 3. Concentration of customers. Customer factors are factors which relate to the type of customers a business serves. One of the major dimensions used to differentiate businesses is the issue of whether they market products for household consumption or for organizational use.

There are several significant differences in the way products are marketed to these two customer groups, and these differences exert considerable influence on the type of promotion that should be used. In the case of household customers, it is relatively easy to identify the decision maker for a particular good; therefore, advertising is more desirable. Also, the self-service nature of many consumer product sales makes personal selling less important. Finally, household customers do not go through a formal buying process utilizing objective criteria as organizational customers do. This again makes advertising more useful for reaching household customers. Essentially the same reasons make personal selling more relevant in promoting the product among organizational customers. The number of customers and their geographic concentration also influence promotional blending. For a small customer base, especially if it is geographically concentrated, advertising does not make as much sense as it does in cases where customers are spread all over and represent a significant mass. Caution is needed here because some advertising may always be necessary for consumer goods, no matter what the market perspectives are. Thus, the above analytical statements only provide a conceptual framework and should not be understood as exact yes/no decision criteria. Budget Factors 1. Financial resources of the organization 2. Traditional promotional perspectives. Ideally the budget should be based on the promotional tasks to be performed. However, intuitively and traditionally, companies place an upper limit on the amount that they will spend on promotion. Such a limit may influence the type of promotion which may be undertaken. Budget factors affect the promotional blend in two ways. First, a financially weak company will be constrained in undertaking certain types of promotion. Second, in many companies the advertising budget has been traditionally linked to revenues as a percentage. This method of allocation continues to be used so that expected

revenues will indicate how much might be spent on advertising in the future. The allocated funds, then, automatically determine the role of advertising. Similarly, personal selling perspectives are determined independently. Marketing Mix Factors 1. Relative price/relative quality 2. Distribution strategy 3. Brand life cycle 4. Geographic scope of market. The promotion decision should be made in the context of other aspects of the marketing mix. The price and quality of a product relative to competition impact the nature of its promotional perspectives. Higher prices must be justified to the consumer by actual or presumed product superiority. Thus, in the case of a product which is priced substantially higher, advertising achieves significance in communicating and establishing the product's superior quality in the minds of the customers. The promotion mix is also influenced by the distribution structure employed for the product. If the promotion is distributed directly, the sales force will largely be counted on to promote the product. Indirect distribution, on the other hand, requires greater emphasis on advertising since the sales force push is limited. As a matter of fact, the further the manufacturer is removed from the ultimate user, the greater is the need for the advertising effort to stimulate and maintain demand. When an existing brand reaches the maturity phase in its life cycle, the marketer has three options: to employ life-extension strategies, to harvest the brand for profits, and/or to introduce a new brand which may be targeted at a more specific segment of the market. Positioning the new brand during the introduction phase in the desired slot in the market requires higher advertising. As it enters the growth phase, advertising will have to be blended with personal selling. In the growth

phase the overall level of promotion will decline in scope. In brief, the new brand will have to be treated like a new product as far as promotion is concerned. Finally, the geographic scope of the market to be served is another consideration. Advertising, relatively speaking, is more significant for products marketed nationally than for those marketed locally or regionally. Thus, since advertising works out to be an expensive proposition, regional marketers should rely less on advertising and more on other forms of promotion, or substitute for television advertising another element of the marketing mix. In addition, the promotion mix may also be affected by a desire to be innovative, i.e., to do something different and seek uniqueness. 1. Mid size FMCG company:Introduction :Marketing promotion does not require a big budget if you set a strategic plan. The most affordable marketing plans happen online, where no expense needs to be incurred for supplies. Proper use of online marketing and networking will make sure your business is easily discovered through the fastest and most efficient methods possible. Following up your online effort by filling your community presence will assure your clients come back again.

Set Up Business Accounts The first step to advertising your business on the Internet is setting up business accounts on major search engines. This includes Google, Yahoo!, and Bing, but it may also include an industry-specific search engine account. For example, local businesses should have a presence on CitySearch and Yelp!. Restaurants should be listed on UrbanSpoon or a local restaurant directory. Use Online Reviews

Once you have been listed on online review services in your industry, it is time to start getting people to review you. Despite what some business owners believe, there are plenty of tricks in place to stop a business owner from reviewing herself more than one time. This means you will have to ask for reviews from others, and the more the better. The good news is that many people commonly write reviews online already. You will be asking them to do something they routinely do, but you will still need to provide incentive. Consider offering a product or service at a discounted rate for individuals who have provided your business with a review or recommendation to another customer. For example, offer any individual who writes a review about your coffee shop on a coffee shop review site a free cup the next time she comes in. Start a Blog Before you begin promotions, you should make sure you have a place to announce them. A blog is a great source for constant updates on promotions and news from your new business. The best part about a blog is you can update it easily. Whenever potential customers search the Internet for information, they will be directed to your blog if it contains that information. This gives you a separate source for discovery outside of your website. Promote through Social Networks An overwhelming number of your clients will participate in social networking. Whether you elect to engage them through Facebook, Twitter, LinkedIn or FourSquare, you will find new clients on these free websites. Simply posting an account on these sites will not promote your business, however. Try presenting exclusive offers through social networks. This gives your clients an incentive to continually check your account or page, and in turn, this gives you more chances to get in front of your clients with new products and services. Capture Information When you do get clients to visit your website or your business, it is important to capture their information for the future. For example, place buttons on your website to ask people for their email addresses. When you collect an email, be sure to add the sender's address to your distribution list. Send information and promotions when appropriate. Ask clients who visit your business to provide contact information for the future. Simply sending cards to say "Happy Birthday" to a customer's home address can remind that person to stop in to your business and make a purchase.

Utilize Community Events Parades, conferences, fairs and more happen in your community every week or month. These are one-stop shops for capturing information and connecting with potentially thousands of new clients. Engaging the community through these events not only gets your name out there; it shows you are willing to step away from the office to participate in something that is important to your potential clients. For example, a fitness studio should participate in a healthy living festival. A local chiropractor could participate in the same festival, or she could participate in a fair for green technology. These are all opportunities to get in front of your clients and start making your name known. 2. Banking services:PROMOTION MIX BANKING SERVICES Advertising: Television, radio, movies, theatres Print media: hoardings, newspaper, magazines Publicity: road shows, campus visits, sandwich man, Sponsorship Sales promotion: gifts, discount and commission, incentives, etc. Personal selling: Cross-sale (selling at competitors place),personalized service. Telemarketing: ICICI one source Call center (mind space) Promotional mix used by bank:

We know that the combination of all the promotional tools is referred to as promotional mix. Here banking sector is blending a sound mixer by which it is trying to caver the whole target market. Now we will view separately all the elements of promotional mix. Advertisement: bank is using all the printed media and electronic media for communicating the services to the clients. The elements of the mixes are as follows: Printed media: bank is using all the printed media including the newspaper, magazines, festoons, billboard, and etc. to communicate their services. Electronic media: It includes different TVs both the government run and privately own to position the idea your trusted partner.

Sales promotions: Sometimes bank undertakes sales promotion to attract the existing and new clients short time basis but not appointing any personnel specifically as sales personnel. Word of mouth of the existing clients act as sales promotion for that period. Public relation: bank sponsors different seminars, symposiums, math Olympiad to build corporate relation with the mass people. Publicity: As bank is performing a lot of social responsibilities. It was awarded the number one CSR performer in the southern Asia in a conference held in Philippines. Not only that different media both views the countrywide nonprofit able performances printed and electronic which are publishing and telecasting the news countrywide. it also did the beatification of part of Dhaka city, Hotel Sheraton to Ishkha road and that attracted the media as a result bank is getting publicity than any other service organization in our country that represent obviously the reality.

Word of mouth: We know that satisfied customer is the best source of promotion and bank has a great impact of word of mouth, which is generated from the existing satisfied customers as they promote the bank services that they avail. Further more those potential customers who dont have account but wish to open an account in future for availing the smart service of bank.

In the study we find that the promotional mixes of bank are contributing a lot to retain the goodwill and day by day the authority is being serious about making a sound mixer of their communication mixes. Analysis:

The service organizations offer their offerings through the promotional mixes. If the reality is matched with the promotional messages then no problem but the situation will be very crucial if promises are not matched with the real services. The deviation between the theories with the practice is analysis. In the study we find that the inanimate environment of the BANK of - branch is very much modern and the behavior of front line executives are standard. The standard of each advertisement in different media are very fine. Especially the social responsibilities performed by the banking service attracted to the eye of many. Actually BANK has properly used its promotional mixes. It is trying to provide the standard and promised services to its clients. Banking manager thinks that the service provided will make the customers loyal as a result those customers will further recommend the others. For doing that it is emphasizing on the publicity and public relation and publicity that is the result of CSR. The target customer of bank is the higher customer group and slightly he upper middle class group as well. bank has been successful to communicate with the target customers by the proposed services through the promotional mixes. The proposed on line banking has matched with the reality also. In short it can be asserted that the differences between the services of bank communicated through various tools and the real mixers of promotion, the performances of individual promotional tool and the reality of the service offered are positive to bank and to the customers.

Conclusion and Recommendations: The promotional mixes and the effective