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Naim Ahmed MBA 2nd SemesterRoll No. 540810646Marketing Management

Question 1: Analyze the existing business portfolio of any one company

using BCG Matrix, GE Matrix and Ansoff model.

Answer: BCG matrix for Public Relation services:

1. SBU: Star World

Industry growth rate: 24% (Nassem Marketing Research report 2008)

Company Growth rate: 50% (The united business line January 15,

2009)

Companys market share: 8% (outlook business)

Largest competitor share: HUL: 54% (outlook business)

Relative market share= 0.14

2. SBU: ECE

Industry growth rate: 7.2% (Nassem Marketing Research report May

10, 2008)

Company Growth rate: 11% (The united business line January 15,

2009)

Companys market share: 55%

Largest competitor share: BILT 35%

PRs Star World segment analysis shows that thought it is market leader in

some categories their overall relative market share is 0.14. company is in the

high growth low relative market share area i.e. question mark position. PR

should invest heavily to convert its SBU position into star.

PRs ECE company is in low growth and high market share category i.e. incash cow segment. It should plan for investing the cash generated from this

position into other businesses.

GE matrix:

1. Management can use the GE business matrix to classify SBUs on the

basis of two factors:

a. Market attractiveness: Market size, entry barriers, competitors,

technology and profit margin are some factors used to analyze the

market attractiveness.


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b. Business position can be determined on the basis of market share,

SBU size, R&D capabilities and cost controls

Each cell in the model represented by the particular strategy namely,

invest strategy, protect strategy, harvest strategy, protect strategy,

harvest strategy, and divest strategy

2. Invest strategy: in this position SBU

a. Should receive sample resources

b. Should be supported by well financed marketing efforts.

c. Generate cash needed by other SBUs

3. Protect strategy: SBUs in this position should

a. Allocate the resources selectively.

b. Develop strategies which help in maintain its market position.

c. Generate cash needed by other SBUs.

Business position

MarketAttractiveness

Low

Medium

High High Medium Low

Invest Invest Protect

Invest Protect Harvest

Protect Harvest Divest

4. Harvest strategy: SBUs should not receive substantial new resources

and if required, sell them.

5. Divest strategy SBUs which failed into this category should not

receive any resources and sell I or shut it as early as possible.

Development the new business portfolios


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After analyzing the existing business of the company, let us discuss

companys future plans i.e. growth or downsizing. Company adopts growth

strategies to become more competitive in the market, tap new opportunities

and become preferred employer. Downsizing is used when the product or

market become unattractive to it. The Ansoff Product-Market Growth Matrix is

a marketing tool created by Igor Ansoff and first published in this article

Strategies for Diversification in the Harvard Business Review (1957). The

matrix allows marketers to consider ways to grow the business via existing

and/or now products, in existing and/or new markets.

Ansoffs model of product/ market expansion

a. Market penetration: A strategy used in increasing the sales of

companys existing products without modifying it in the existing market.

Characteristics of market penetration:

- Serve customer with existing products by opening new stores.

ProductsPresent new

PresentMarket

Penetration

Product

Development

Marketers

NewMarket

Development

Diversification


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Question 2: Discuss the Marco environment of a pharmaceutical company.

Answer: Macro Environment of a pharmaceutical company:

Forces in the macro environment:

1. Demographic environment

2. Political and legal environment

3. Economic and Natural environment

4. Social and culture environment

5. Technology environment

1. Demographic Environment:

Demographic environment is analyzed on the basis of the following

factors:

a. Age structure of the population

Age group

Population

Percentage

b. Marital status of the population

Marital status

Gender

Percentage

c. Geographic distribution of the population

Rural Urban distribution of the population

d. Education level


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Number and literates by level of education

e. Migration

Number of migrations by place of birth

Reasons for migration of migrants by last residence with

duration

f. Occupation

Distribution of main worked by different industrial categories

2. Political and legal environment

The political and legal forces are grouped into the following four categories:

a. Social legislations and regulations: environment protection act which

specifies the emission level.

b. Government relationships with industries: government subsidies andchange in tariff rate will have direct impact on the particular company.

c. Legislations related to marketing: following are the list of legislations

which affect marketing activities of the company.

3. Economic and Natural environment

Economic:

Consumer spending pattern

Interest rate

Inflation

Changes in income

Natural environment:

Inadequate raw materials

Global warming and pollution level


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Regulatory world

4. Social and cultural environment

a. Working and rise of metro sexual man:

Number of women who are working is increasing, this segment is

looking towards products which help them in bringing better work

life balance. Metro sexual is another new phenomenon, wherein a

man also assumes the role of women.

b. Time short people:

This segment involves people who work long hours and have less

personal time. This people are looking for products which satisfy

them quickly and conveniently.

5. Technology environment

a. Growth of information technology and biotechnology industries:

It helped in cost reduction, automation, better communication and

efficiency in the organizations.

b. Nano technology:

This technology is expected to reduce the size and cost of the

materials.

Question 3: Explain the component of MIS.

Answer: The components of MIS are as follows:

1. Internal records system

2. Marketing intelligence system

3. Marketing research system

4. Analytical marketing system


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1. Internal Records System:

a. Order to payment cycle: a system which records, the timing andsize or orders placed by consumers, the payment cycle followed by

consumers and the time taken to fulfill the orders, in the shortest

possible time. Customers place order through sales people and

companies dispatch the goods and receive payments directly or

through bank. A proper records system pertaining to order to

payment cycle management helps managers to decide on

production and dispatch schedule, inventory and accounts

receivable schedule and also logistics and distribution management

schedules.

b. Sales information systems: records everything in the sales

Department, started from Sales call reports to prospects history to

sales territory and quota information for better sales planning and

forecasting purpose.

2. Marketing intelligence system

This is a set of procedures and sources used by managers to obtain

everyday information about developments in the marketing

environment. Marketing managers collect data from published sources

like books, magazines and journals; by talking to customers,

intermediaries and sales personnel. Some companies appoint

specialist to gather consumer and competitor information.

3. Marketing research system

Marketing Research provides information to marketing manager when

he encounters marketing problems. This may involve conducting

Marketing Research survey by collecting primary data. These surveys

may be conducted by the marketing department itself or it can hire

external marketing research agency.


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4. Analytical Marketing System

This is a coordinate collection of data, systems, tools and techniques

with supporting software and hardware by which an organization

gathers and interprets relevant information from business and

environment and turns it into a basis for marketing action.


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Question 4: Explain the Henry assael model of buying decision

behavior.

Ansewr:

Type of buying behavior: Henry Assael Model:

1. Complex buying behavior:

Customers who are representing this behavior are highly involved in the

purchase of the product or services. The process became complex as

difference between brands are very high. Marketer should first develop the

belief about brand, provide the information and differentiate the company

brand from others. Customer would like to know the features and how they

add value to the product they are purchasing.

2. Dissonance reducing buying behavior:

The behavior exhibited by the customer when product purchase requires

high involvement but only few differences exist. One of the major

disadvantage of this type of behavior is customer will show post purchase

dissonance which is very difficult to control.

3. Variety seeking buying behavior:

When there are significant difference between the brand existing but

customer will not involve more while purchasing, marketer identify this

behavior as variety seeking buying behavior. That doesnt mean that

quality of a brand A is inferior to other brands but customer would like to

try the varieties available in the market. In this situations marketers should

undertake following steps:

a) The market leader should encourage cutomers to buy repeatedly.

b) Make the product avaliable and visible to customer in the shoppingplaces.c) The firm who are not market leader should come out with sales

promotion techniques to encourage customer to purchase the product.

4. Habitual buying behavior:

The low involvement between the brands and few differences between the

brand leads to the habitual buying behavior. Marketers whose customer

represents this category should follow below listed strategies:

a. Use price and sales promotions to stimulate product trial.

b. Use more visual aspects than the wording in the advertisements.


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c. Television is the better media for this type of products.

d. Use classical conditioning theory to create advertisements.


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Question 5: Discuss the segmentation strategy of a cement company.

5. Answer: Targeting

Targeting is defined as a group of people or organizations for which an

organization designs, implements and maintains the marketing mix.Once the bases for segmentation are selected, you have to identify the people

or organization to which the product meant. Organizations may not

differentiate their customer or it may have different customer for different

products.

Selecting target market segments:

Depending upon the emerging patterns of market segmentation,

homogeneous preference, diffused preference, and clustered preference, a

company chooses its market segmentation strategy.

a. Undifferentiated Marketing: It is a market coverage strategy in which

the company treats the target market as one and does not consider

that there are market segments that exhibit uncommon needs. The

company focuses on the centre of the target market to get maximum

advantage. The feature of one product-all segments' calls for

presenting one marketing-mix for the target market.

b. Differentiated Marketing: It is a market coverage strategy in which the

company goes for proper market segmentation as depicted by its

analysis of the total market. The company, therefore, goes for severalproducts or several segment approach which calls for preparing

different marketing mixes for each of the market segment.

c. Concentrated Marketing: It is a market coverage strategy in which

company follows 'one product-one segment' principle.

Choosing a Market Coverage Strategy:

The below table depicts an overview of the three market coverage strategies

will help to choose one for a particular company. Table A provides a snap-

shot view.

Table A: Comparison of Market Coverage Strategies

FocusUndifferentiated

Marketing

Differentiating

Marketing

Concentrated

Marketing

Product

Segment

Marketing-Mix

One/Few

All

One

Many

Many

Many

One/Few

One/Few

One/Few


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Positioning maps:

Two dimensional graphs of how a product, brand or company is perceived

versus competition.

Before identifying the positioning strategies for the product, marketer preparesits perceptual maps. These maps are drawn on important buying dimensions

of consumer for company products as well as competitor products.

How to construct Position maps?

a. Evaluate the buying dimensions of customer

b. Select two buying dimensions of consumer for example price and

quality.

c. Identify the relative market share: relative market share is the ratio of

d. Companys market share to its largest competitors' share.

e. Draw the circles according to relative market share on two dimension

graph

Bases for positioning the product

Overcoming the positioning difficulties enables the company to solve the

marketing-mix problem. Thus seizing the "high-quality position" requires the

firm to produce high quality products, charge a high price, distribute through

high-class dealers and advertise in high-quality media vehicles.

The bases for positioning strategies that are available are:

1) Attribute Positioning:

A company positions itself on an attribute such as size or number of

years in existence.

2) Benefit Positioning:

The product is positioned as the leader in a certain benefit.

3) Use or Application Positioning:

Positioning the product as best for some use and application.

4) User Positioning:

Positioning the product as best for some user group.

5) Competitor Positioning:

The product claims to be better in some way than a named competitor.

Planners, take note'. It is directly mentioning its and competitors sales

of newspaper.

6) Product Category Positioning:

The product is positioned as the leader in a certain product category.

7) Quality or Price Positioning:

The product is positioned as offering the best value.


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Question 6: Case study

Software pricing: issues of client billingInfosys, one of the major IT companies in India, has developed a new method

of pricing software maintenance project. The new method is called as ticket -based pricing. The customer payment will be based on three types of clientrequest or ticket. First, customer may request for small enhancement in thesoftware application. Second, customer may request for big enhancement inthe software application and third, request may be for a bug fix. Earlier themethods used for pricing were fixed price and time and material-basedpricing. Under the time and material based pricing, customers are billedbased on the number of man-hours spent on a project, while under the fixedprice, the customer pays an agreed price that doesnt vary with the manpowerdeployed on the project. Infosys developed this new pricing strategy afterexamining the current pricing methods. Software application methodsbecome more stable after some time. If the client opted for fixed pricing andhis request for software maintenance reduced, still has to pay fixedmaintenance charges. Ticket based pricing will provide flexibility to theclient. Many IT majors have been trying to decrease the dependence ofrevenue growth on manpower addition. But this is for the first time such anattempt has been made to bring a transaction-based pricing model.The new move is expected to increase the revenue without a proportionalincrease in the number of employees. Contrary to this view many industryobservers still feel that fixed price or time and material based pricing providecontinuous revenue. The excess revenue available from these two methods

can be used for reserves or hedging. In case of ticket based pricing clienthas to negotiate with the company every time.a. Do you think ticket based pricing will provide continuous revenue to Infosys inthe long term? Commentb. Compare three pricing strategies discussed here and choose any one asyour choice

Answer: (a)Yes, it will generate continuous revenue for Infosys. Essentially, it turn Infosysinto more competitive industry in the market. It is an aggressive strategy. Underit customer can easily negotiate for the improvements or upgradation in the

software. It is customer friendly as it has three tier structure. Based on theneeds the customer may opt for any one.

Answer (b) The three pricing strategies mentioned in this case study are :

1. Fixed Price Strategy2. Time and Material Based Pricing3. Ticket Based Pricing

1. Fixed Price Strategy: Under it prior to providing the service the price isagreed upon by the customer and Infosys. The customer pays and

agreed price that does not vary with the manpower.


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There may be three cases depending the duration of completion of theproject which are as follows:

Case 1: When the project is completed early: It will happen if the Infosysinfuses more manpower in the project. Thus the customer may benefit more

as the customer will get


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