1. Master of Business Administration
MBA II Semester
MB0046 – Marketing Management
Assignment Set- 1
Q.1 Discuss the different marketing concepts with its merits and drawbacks.
Ans.
The Marketing Concept
After World War II, the variety of products increased and hard selling no longer could be relied
upon to generate sales. With increased discretionary income, customers could afford to be
selective and buy only those products that precisely met their changing needs, and these needs
were not immediately obvious. The key questions became:
What do customers want?
Can we develop it while they still want it?
How can we keep our customers satisfied?
In response to these discerning customers, firms began to adopt the marketing concept, which
involves:
Focusing on customer needs before developing the product
Aligning all functions of the company to focus on those needs
Realizing a profit by successfully satisfying customer needs over the long-term
When firms first began to adopt the marketing concept, they typically set up separate marketing
departments whose objective it was to satisfy customer needs. Often these departments were
sales departments with expanded responsibilities. While this expanded sales department structure
can be found in some companies today, many firms have structured themselves into marketing
organizations having a company-wide customer focus. Since the entire organization exists to
satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing
problem" - everybody must be concerned with customer satisfaction.

2. The marketing concept relies upon marketing research to define market segments, their size, and
their needs. To satisfy those needs, the marketing team makes decisions about the controllable
parameters of the marketing mix.
Marketing concepts with its merits and drawbacks.
There are certain fundamental concepts and tasks which one needs to know to fully understand
the marketing function. These concepts provide foundation for a marketing orientation and to
manage the marketing function.
1. Needs and Wants
The marketer‟s task lies in satisfying human needs and wants through the exchange process. It is
alleged that “marketing creates needs” and makes people buy things they do not actually need. In
reality, marketing or marketers do not create “needs”, but they create “wants”. Some needs are
the basic human requirements of food, clothing, shelter, water and air. There are other needs
such as social needs, esteem needs etc.
When we desire certain specific objects or items to fulfill these needs, they are called wants. This
difference between wants and needs is not the same as understood in the subject matter of
„economics‟. The marketer identifies the need which may lie unexpressed by the customer.
2. Demand
Human wants are unlimited, but their resources are limited. When a want for an object is backed
or supported by buying ability, willingness to spend and desire to acquire a product / service, it
becomes a potential demand. The task of assessing or estimating demand is very crucial for a
marketer. He should understand the relationship of the demand for his product with its price.
Demand forecasting is essential for allocation of resources in a company. This is the reason why
marketers segment consumers on the basis of their earning capacity. The income of the consumer
indicates the potential to buy.
3. Product and Services
„Product is a generic term used to describe what is being offered by a seller or marketer. It may
be a good, a service or idea, which can be marketed by offering a set of benefits it offers to
customers to satisfy their needs.

3. A product can be defined as anything that can be offered to market to satisfy a need or want.
Today, many types of entities such as goods, services, experiences, events, persons, places and
ideas are being marketed.
4. Target Market
Very few products can satisfy everyone in the market. Therefore, marketers divide the market
into distinct groups of buyers who have similar preferences. These groups are called segments
with their own specific demographic, psychographic and behavioral characteristics. The marketer
decides as to which of these segment or segments offer highest opportunity for his company. For
each of these target markets, the firm develops a product / service suited to their needs.
TATA group has recently designed an economy car called „NANO‟ which is priced around Rs. 1
Lakhs. The target market for this car is all aspirants who dream of owning a car but cannot afford
cars, which are currently available for minimum Rs. 2.5 Lakhs. A Target Market is the group of
people at whom a marketer targets his marketing efforts to sell his goods and services.
5. Marketing Management
Marketing Management which is also the title of this course refers to all the activities which the
marketing managers, executives and personnel have to undertake to carry out the marketing
function of the firm.
It involves (i) analyzing the market opportunities by undertaking consumer needs and changes
taking place in the marketing environment, (ii) planning the marketing activities, and (iii)
implementing marketing plans and settings control mechanism to ensure smooth and successful
accomplishment of the organizations goals. Marketing Management is a critical function,
especially in highly competitive markets. It provides competitive edge to an organization through
strategic analysis and planning.
6. Values and Satisfaction
Value is primarily a function of quality, service and cost. Value increases with increase in quality
and service and decreases with increase in cost. Value is an important marketing concept and the
task of marketing is to identify, create, communicate, deliver and monitor customer value.
Customers generally experience satisfaction when the performance level meets minimum
performance expectations of a product or service. When the performance as perceived exceeds
the expected performance level, the customer will be not just satisfied, but delighted. Thus
customer satisfaction or delight with respect to a product or service encourages customers to
come back and repurchase the product or service in future. Satisfied customers can be an asset to
the marketing company over a period of time, as they will spread favorable word-of-mouth
information or opinions.

4. Q.2 a) What are the features and objectives of marketing research?
b) Give a note on psychoanalytic model of consumer behaviour?
Ans.
Features of Marketing Research
1. It is a systematic process – It has to be carried out in a stepwise and systematic manner and the
whole process needs to be planned with a clear objective.
2. It should be objective – It is important that the methods employed and interpretations are
objective. The research should not be carried out to establish an opinion nor should it be
intentionally suited towards predetermined results.
3. It is multi-disciplinary – Marketing Research draws concepts from other disciplines such as
Statistics for obtaining reliable data and from Economics, Psychology and sociology for better
understanding of buyers.
Objectives of Marketing Research
Marketing Research may be conducted for different purposes. Based on how organizations use
Marketing Research, objectives of Marketing Research can be summarized as follows:
1. To understand why customers buy a product
2. To forecast the probable volume of future sales or expected market share
3. To assess competitive strengths and strategies
4. To evaluate the effectiveness of marketing action already taken
5. To assess customer satisfaction of company‟s products/services

5. Note on psychoanalytic model of consumer behaviour
The Psychoanalytical Model:
The psychoanalytical model draws from Freudian Psychology. According to this model, the
individual consumer has a complex set of deep-seated motives which drive him towards certain
buying decisions. The buyer has a private world with all his hidden fears, suppressed desires and
totally subjective longings. His buying action can be influenced by appealing to these desires and
longings. The psychoanalytical theory is attributed to the work of eminent psychologist Sigmund
Freud. Freud introduced personality as a motivating force in human behavior. According to this
theory, the mental framework of a human being is composed of three elements, namely,
1. The id or the instinctive, pleasure-seeking element. It is the reservoir of the instinctive
impulses that a man is born with and whose processes are entirely subconscious. It includes the
aggressive, destructive and sexual impulses of man.
2. The superego or the internal filter that presents to the individual the behavioral expectations of
society. It develops out of the id, dominates the ego and represents the inhibitions of instinct
which is characteristic of man. It represents the moral and ethical elements, the conscience.
3. The ego or the control device that maintains a balance between the id and the superego. It is
the most superficial portion of the id. It is modified by the influence of the outside world. Its
processes are entirely conscious because it is concerned with the perception of the outside world.
The basic theme of the theory is the belief that a person is unable to satisfy all his needs within
the bounds of society. Consequently, such unsatisfied needs create tension within an individual
which have to be repressed. Such repressed tension is always said to exist in the sub-conscious
and continues to influence consumer behavior.

6. Q. 3 Silver Line Manufacturers produce several varieties of automobile components. They
have 3 to 5 suppliers who supply materials regularly. Recently, procurement manager of
Silver Line discussed in the meeting that they have to look out for new suppliers since they
would be expanding their business operations to many places. How do you think Silver
Line have to go about this situation?
Ans.
Procurement is the acquisition of goods or services. It is favorable that the goods/services are
appropriate and that they are procured at the best possible cost to meet the needs of the purchaser
in terms of quality and quantity, time, and location. Corporations and public bodies often define
processes intended to promote fair and open competition for their business while minimizing
exposure to fraud and collusion.
Procurement systems
Another common procurement issue is the timing of purchases. Just-in-time is a system of timing
the purchases of consumables so as to keep inventory costs low. Just-in-time is commonly used
by Japanese companies but widely adopted by many global manufacturers from the 1990s
onwards. Typically a framework agreement setting terms and price is created between a supplier
and purchaser, and specific orders are then called-off as required.
Procurement process
Procurement may also involve a bidding process i.e.,Tendering. A company may want to
purchase a given product or service. If the cost for that product/service is over the threshold that
has been established (e.g.: Company X policy: "any product/service desired that is over $1,000
requires a bidding process"), depending on policy or legal requirements, Company X is required
to state the product/service desired and make the contract open to the bidding process. Company
X may have ten submitters that state the cost of the product/service they are willing to provide.
Then, Company X will usually select the lowest bidder. If the lowest bidder is deemed
incompetent to provide the desired product/service, Company X will then select the submitter
who has the next best price, and is competent to provide the product/service. In the European
Union there are strict rules on procurement processes that must be followed by public bodies,
with contract value thresholds dictating what processes should be observed (relating to
advertising the contract, the actual process etc.).
Procurement steps
Procurement life cycle in modern businesses usually consists of seven steps:
Information gathering: If the potential customer does not already have an established
relationship with sales/ marketing functions of suppliers of needed products and services
(P/S), it is necessary to search for suppliers who can satisfy the requirements.

7. Supplier contact: When one or more suitable suppliers have been identified, requests for
quotation, requests for proposals, requests for information or requests for tender may be
advertised, or direct contact may be made with the suppliers.
Background review: References for product/service quality are consulted, and any
requirements for follow-up services including installation, maintenance, and warranty are
investigated. Samples of the P/S being considered may be examined, or trials undertaken.
Negotiation: Negotiations are undertaken, and price, availability, and customization
possibilities are established. Delivery schedules are negotiated, and a contract to acquire
the P/S is completed.
Fulfillment: Supplier preparation, expediting, shipment, delivery, and payment for the
P/S are completed, based on contract terms. Installation and training may also be
included.
Consumption, maintenance, and disposal: During this phase, the company evaluates
the performance of the P/S and any accompanying service support, as they are consumed.
Renewal: When the P/S has been consumed or disposed of, the contract expires, or the
product or service is to be re-ordered, company experience with the P/S is reviewed. If
the P/S is to be re-ordered, the company determines whether to consider other suppliers
or to continue with the same supplier.
Additional Step - Tender Notification: Some institutions choose to use a notification
service in order to raise the competition for the chosen opportunity. These systems can
either be direct from their e-tendering software, or as a re-packaged notification from an
external notification company.
Procurement performance
In July 2011, Ardent Partners published a research report that presented a comprehensive,
industry-wide view into what is happening in the world of procurement today by drawing on the
experience, performance, and perspective of nearly 250 Chief Procurement Officers and other
procurement executives. The report includes the main procurement performance and operational
benchmarks that procurement leaders use to gauge the success of their organizations. This report
found that the average procurement department manages 60.6% of total enterprise spend. This
measure commonly called "spend under management" refers to the percentage of total enterprise
spend (which includes all direct, indirect, and services spend) that a procurement organization
manages or influences. The average procurement department also achieved an annual savings of
6.7% in the last reporting cycle, sourced 52.6% of its addressable spend, and has a contract
compliance rate of 62.6%.
Public procurement
Public procurement generally is an important sector of the economy. In Europe, public
procurement accounts for 16.3% of the Community GDP.

8. Green public procurement
In Green public procurement (GPP), contracting authorities and entities take environmental
issues into account when tendering for goods or services. The goal is to reduce the impact of the
procurement on human health and the environment.
In the European Union, the Commission has adopted its Communication on public procurement
for a better environment, where proposes a political target of 50 % Green public procurement to
be reached by the Member States by the year 2010.
Alternative procurement procedures
There are several alternatives to tendering which are available in formal procurement. One
system which has gained increasing momentum in the construction industry and among
developing economies in the Selection in planning process which enables project developers and
equipment purchasers to make significant changes to their requirements with relative ease. The
SIP process also enables vendors and contractors to respond with greater accuracy and
competitiveness as a result of the generally longer lead times they are afforded.
ROSMA is a procurement acronym created by ATkearney.{Procurement Solutions Division} It
stands for Return on Supply Management Assets and endeavors to quantify not only
procurement but every piece of the procurement process including strategic resource
management.

9. Q.4 Briefly explain the bases for segmenting consumer markets along with examples. Do
you think these bases are required for market segmentation? Why?
Ans.
Bases for segmenting consumer markets
Exhibit 1
Bases for Segmenting So far, we've examined two ways in which markets can be segmented
Consumer Markets using benefit and consumption rate segmentation bases. There are
many other ways in which markets can be segmented. In deed, let's
shift gears a little bit and talk in general terms about the possible
ways in which markets can be segmented. This discussion allows us
to explore the range of segmentation basis that are available to
marketing managers. There are a bunch! Exhibits 1 & 2 summarize
the major categories of segmentation bases from which managers can
select:
Exhibit 2 Geographic bases allows us to segment a market that is spread
Bases for Segmenting over a large geographic area into sub-markets that cover smaller
Consumer Markets
geographic areas. Geographic segmentation usually involves
dividing up geographic markets by using existing political
boundaries, natural climatic zones, or population boundaries.
Demographic segmentation occurs when one or more demographic
traits are employed to divide a market. Typical demographic traits
that are used include age, gender, race, ethnicity, marital status,
family size and stage of the family life cycle.
Social class segmentation employs a combination of demographic
traits that are commonly believed to reflect membership in
different social class strata. Occupation, education, and income
are the primary demographic traits that reflect social class
membership.
Psychographic segmentation bases divide markets based on
differences in lifestyles or differences in personality traits.
Lifestyle segmentation is one of the most popular and effective
ways to create segments for consumer products.
Consumer shopping behavior patterns include such things as the
type of store shopped in, timing of purchases (i.e. time of day,
week, or year), how much of a product is purchased on a given
visit to the store, and how often the individual frequents a

10. particular type of retail establishment or shopping mall.
Product consumption behaviors include product consumption or
usage rates base (as discussed earlier). Other segmentation bases
included in this category are product usage occasion, product use
versus non-use, and loyalties to specific brands.
Segmenting markets according to consumer predispositions
essentially entails creating segments based on differences in
consumers' wants, needs, and attitudes. We talked at length about
creating market segments based on differences in consumers'
wants and needs (i.e. creating benefit segments). Sometimes it is
useful to segment markets based on how knowledgeable people are
of a particular product category, or whether they've experienced
problems with specific products or brands. And, finally, we also
include consumers' media viewing habits in this category. When
segmenting markets using this latter base, we are looking for
differences in the types of media consumers prefer i.e. preferences
for specific television shows, radio stations, magazines,
newspapers, and the like.
Segments Based on Consumption Behaviors
There are multiple ways that we can segment a market based on differences is consumption
patterns or behaviors. We've already looked at creating segments based on usage rates with our
health club segmentation study. Additional behaviors that are excellent candidates for
segmenting markets include product usage occasion, product user status, and brand loyalty
status.
Product Usage Occasion
When creating market segments based on product usage occasion, the emphasis is on
identifying different circumstances or occasions under which the product is used. The same
product may be used on different occasions or under different circumstances by different people.
As a result, opportunities exist for segmenting markets based on such differences in 'usage
occasions.' For example, airlines have segmented their market into usage occasion segments
consisting of people flying for business purposes (business flyers), vacation flyers, and people
flying primarily for family reasons. Each segment represents a different usage occasion and each
is targeted with different pricing and promotional strategies. Frequent-flyer programs are geared
to business travelers to encourage airline loyalty. Super-low fares tied to advanced booking are
used to attract vacation travelers and people flying primarily for family reasons. Cooperative
promotional programs with travel agencies, destination resorts, and cruise-lines are commonly
employed to provide reduced rates in travel markets.

11. Food products markets also are commonly segmented by usage occasion. For example, orange
juice has traditionally been promoted as a breakfast drink. In an attempt to build additional
demand for orange juice, the orange-grower's trade associations promote the consumption of
orange juice at other times of the day. Orange juice is promoted as an afternoon snack or as a
'pick-me-up.' Appropriately, the theme was "its not just for breakfast
anymore." Coke has done basically the same thing. We all are aware that colas
(e.g. Coke and Pepsi) are consumed during morning hours as a substitute for
coffee. Most colas have a fairly high caffeine content and can give you the
same caffeine boost as does coffee as an aid to waking up. This is a
particularly attractive alternative for folks that do not like the taste of coffee.
Coke, of course, has long recognized this and offers a promotional campaign
to its local bottlers called "Coke in the Morning." Pepsi has experimented with
a dedicated product geared to this usage occasion segment. The product was
branded as Pepsi AM during test market. The product was a very potent
version of Pepsi laced with extra caffeine and sugar.
Product User Status
Marketers employing this segmentation base attempt to identify differences between non-users,
potential users, regular users, ex-users, and first-time users of products. Larger firms with
substantial market share often target non-users or potential users in an attempt to stimulate
primary demand for the product category. Smaller firms, in contrast, target regular users in an
attempt to encourage brand switching. Marketers try to differentiate between users and non-
users of product categories when consumer characteristics are tied to the need for the product
itself rather than to the use of different brands. For example, consumers' characteristics
associated with drinking decaffeinated coffee and using analgesic pain relievers may correlate
most highly with the characteristics of the product category, rather than reflect the specific
differences between brands.
Brand Loyalty Status
Firms can learn a lot by analyzing the loyalty patterns of customers in markets. By finding the
characteristics of loyal and non-loyal customers for their brand and those of major competitors,
firms can find ways to keep their customers loyal and attract non-loyal customers away from
competitors. Brand loyalty often is defined based solely on consumers' patterns of repeat
purchase behavior. For example, consumers buying the same brand five times in a row have been
defined as brand loyalty or as the proportion of total purchases within a given product category
devoted to the most frequently purchased brand. A problem with such definitions is that repeat
purchase patterns may reflect only a spurious loyalty with little attitudinal attachment to the
brand. Such spuriously loyal consumers can easily be induced to switch to other brands via
better prices, coupons, point-of-sale visibility and incentives.
Segments Based on Consumer Predispositions
Markets can be segmented based on differences in consumers' wants, needs, and attitudes. We've
already examined in our health club study the value inherent in creating 'benefit segments' that

12. focus on different wants and needs held by consumers in each segment. Additional
predispositions also can lead to meaningful segmentation schemes. Markets can be segmented
based on how knowledgeable people are of a particular product category. Different promotional
programs may be required to communicate with those who know little about the product versus
those who don't.
Sometimes marketers may want to differentiate between customers who have experienced
specific types of problems with products or brands versus those who have not. It is possible that
customers who frequently encounter problems of specific types may have a common set of
characteristics that can suggest how the problem should be addressed.
Segmenting markets based on consumers' media viewing habits may reveal consistent
differences in the types of media consumers prefer (i.e. preferences for specific television shows,
radio stations, magazines, and newspapers) and how these differences vary with key customer
demographic and psychographic traits. This information then can be used to more effectively
target advertising and other communications to customer groups.

13. Q.5 Mention the forces in micro and macro environment that are likely to influence an
organization’s working and functions. Is environmental scanning necessary for all
organizations?
Ans.
Forces in micro and macro environment
The micro-environment
The term micro-environment denotes those elements over which the marketing firm has control
or which it can use in order to gain information that will better help it in its marketing operations.
In other words, these are elements that can be manipulated, or used to glean information, in order
to provide fuller satisfaction to the company‟s customers. The objective of marketing philosophy
is to make profits through satisfying customers. This is accomplished through the manipulation
of the variables over which a company has control in such a way as to optimise this objective.
The variables are what Neil Borden has termed „the marketing mix‟ which is a combination of all
the „ingredients‟ in a „recipe‟ that is designed to prove most attractive to customers. In this case
the ingredients are individual elements that marketing can manipulate into the most appropriate
mix. E Jerome McCarthy further dubbed the variables that the company can control in order to
reach its target market the „four Ps‟. Each of these is discussed in detail in later chapters, but a
brief discussion now follows upon each of these elements of the marketing mix together with an
explanation of how they fit into the overall notion of marketing.
Product and price are obvious, but perhaps place and promotion need more explanation.
Place, it is felt, might better be termed „placement‟ because it comprises two distinct elements.
The first element is channels of distribution that is the outlets and methods through which a
company‟s goods or services are sold. Thus a channel can be certain types of retail outlet or it
can be salespeople selling a company‟s industrial products through say a channel which
comprises buyers in the chemical industry. The other part of place refers to logistics that relates
to the physical warehousing and transportation of goods from the manufacturer to the end
customer. Thus, placement might be a better descriptor as it refers to the placing of goods or
services from the supplier to the customer. In fact, place has its own individual „mix‟ which is
termed the „distribution mix‟.
Promotion also has its individual „mix‟ that is called the „promotional mix‟. This comprises
advertising, selling and sales promotion. In fact promotion is a misnomer, because in advertising
agency circles the mention of promotion usually means „sales promotion‟. Some writers are now
separating selling away from promotion and calling it „people‟ because it is too important an
element of marketing to be lumped in with promotion, although in reality it is still promotion
(through word of mouth). This fifth P (people) are those who contact customers on a regular
basis with the objective of ultimately gaining orders and these people comprise the sales force.

14. We can thus see that selling is a component part of overall marketing. There are two more Ps for
service marketing, but these are dealt with later.
Model of the process of marketing
This more complex model better explains what we are now beginning to understand about
marketing. The bottom line represents the elements of the marketing mix over which a company
has control. These elements are manipulated in such a way as to best suit customers‟ needs and
tastes and this represents an operational flow where things have to be done in order to arrive at
the optimum marketing mix. Remember that there are sub-mixes within the individual elements
of the marketing mix. This bottom line also equates to the earlier notion of the four Ps, or rather
the five Ps, as personal selling has been separated from promotion and becomes „people‟.
The top line represents an information flow from the market to the firm. Data is collected
through discussions and interviews with customers on and informal and formal basis. A whole
range of techniques is available for this process and this is collectively termed marketing
research. A more advanced strategic model that incorporates marketing research is embodied in a
marketing information system (MkIS) and this is dealt with in a later lecture. In addition, data is
collected from customers in relation to their likely future purchases and this is known as sales
forecasting. Another raft of techniques is available for the subject of sales forecasting which lies
at the very heart of marketing and business planning.
Thus we begin to see how marketing orientation works. Customers are the starting point and
sales forecasting and marketing research determine their likely requirements and tastes. This
information is processed internally within the organization and products and promotional
messages are devised to suit customers‟ needs, to allay their purchasing fears and to reinforce
their expectations. Goods and services are supplied as and when required in the quantities needed
and when they are requested - not later and not earlier. This latter point is reinforced, because
modern marketing dictates that customers demand their goods as needed and this lies at the base
of the latest notion of „just-in-time‟ manufacturing which relates to raw materials and
components. This is covered later in the text and it has tremendous implications for modern
marketing.
The place of marketing in the modern organization
At a more traditional level, marketing is often found alongside other major functions within
business and Figure 4 illustrates this relationship. This organisation chart does not, of course,
refer to all business organisations and to a large extent it is the „ideal‟ theoretical structure.
Companies tend to evolve and develop in a non-textbook manner, and in practice many different
organisation charts can be found as a result of all kinds of illogicalities that defy modern
management thinking. Such illogical functions might well exist because of the forceful
personality of a head of department, whose department has assumed a position of power within
an organisation through his or her own personal disposition, and there is no managerial
justification for putting it in such a position of power in line management. An example could be
the material control department that might report direct to the managing director rather than
being a sub-function within the purchasing department. Another example, quite commonly

15. found, is a situation where a sales director can be found in the line alongside a marketing
director. In such a situation, it might be a forceful sales director in a sales driven organisation
who will not assume the responsibility for marketing, but who is too powerful to put into a
subordinate position under marketing.
The proximate macro-environment
The term macro-environment denotes all forces and agencies external to the marketing firm
itself. Some of these forces and agencies will be closer to the operation of the firm than others,
e.g. a firm‟s suppliers, agents, distributors and other distributive intermediaries and competing
firms. These „closer‟ external constituents are often collectively referred to as the firm‟s
proximate macro-environment to distinguish them from the wider external forces found, for
example, in the legal, cultural, economic and technological sub-environments.
This consists of people, organizations and forces within the firm‟s immediate external
environment. Of particular importance to marketing firms are the sub-environments of suppliers,
competitors and distributors (intermediaries). These sub-environments can each have a
significant effect upon the marketing firm.
The supplier environment
This consists of other business firms or individuals who provide the marketing firm with raw
materials, product constituents, services or, in the case of retailing firms, possibly the finished
goods themselves. Firms, whether they be retailers or manufacturers, will often depend on
numerous suppliers. The buyer/supplier relationship is one of mutual economic interdependence,
both parties relying on the other for their commercial well-being. Although both parties are
seeking stability and security from their relationship, factors in the supplier environment are
subject to change, such as industrial disputes which will affect delivery of materials to the buying
company, or a sudden increase in raw material prices which forces suppliers to raise their prices.
Whatever the product or service being purchased by the marketing firm, unexpected
developments in the supplier environment can have an immediate and potentially serious effect
on the firm‟s commercial operations. Because of this, marketing management, by means of the
marketing intelligence component of its marketing information system, should continually
monitor changes and potential changes in the supplier environment and have contingency plans
ready to deal with potentially adverse developments.
The distributive environment
Much reliance is placed on marketing intermediaries such as wholesalers, factors, agents and
distributors to ensure that their products reach the final consumer. To a casual observer, it may
seem that the conventional method of distribution in any particular industry is relatively static.
This is because changes in the distributive environment occur relatively slowly, and there is
therefore a danger of marketing firms failing to appreciate the commercial significance of
cumulative change. Existing channels may be declining in popularity over time, while new
channels may be developing unnoticed by the marketing firm. Nowhere has this „creeping‟
change been more apparent over recent years in the UK and other parts of the world than in the

16. retailing of fast moving consumer goods (fmcg). In the 1960s well over half of all fmcg retail
trade was accounted for in the independent sector plus a further large proportion to the Co-
operative Societies. Nowadays, the sector represented by the larger food multiples has well in
excess of this proportion.
The competitive environment
Management must be alert to the potential threat of other companies marketing similar and
substitute product whether they are of domestic or foreign origin. In some industries there may
be numerous world-wide manufacturers posing a potential competitive threat and in others there
may only be a few. Whatever the type, size and composition of the industry, it is essential that
marketing management has a full understanding of competitive forces. Companies need to
establish exactly who their competitors are and the benefits they are offering to the market.
Armed with this knowledge, the company will have a greater opportunity to compete effectively.
The wider macro-environment
Changes in the wider macro-environment may not be as close to the marketing firm‟s day-to-day
operations, but they are just as important. The main factors making up these wider macro-
environmental forces fall into four groups.
1. Political and legal factors
2. Economic factors
3. Social and cultural factors
4. Technological factors
(Often referred to as the „PEST‟ factors in the marketing analytical context, a useful aide-
memoire, although in some texts it is sometimes referred to as „STEP‟). To this is sometimes
added „Competitive factors‟ and although „PEST‟ analysis relates to a specific organization
„Competitive factors‟ tend to be subsumed under „Economic factors‟. Such a PEST analysis
means listing all possible points that may affect the organization under review under each of the
P.E.S.T. headings. Recently, some texts have added „L‟ (standing for legal) and „E‟ (standing for
environmental) to this classification, making the acronym „PESTLE‟. Even more recently, some
writers have incorporated yet another „E‟ (standing for ecological) with the new acronym
„STEEPLE‟.
The political and legal environment
To many companies, domestic political considerations are likely to be of prime concern.
However, firms involved in international operations are faced with the additional dimension of
international political developments. Many firms export and may have joint ventures or
subsidiary companies abroad. In many countries, particularly those in the so-called „Third
World‟ or more latterly termed „Developing Nations‟, the domestic political and economic
situation is usually less stable than in the UK. Marketing firms operating in such volatile
conditions clearly have to monitor the local political situation very carefully.

17. Many of the legal, economic and social developments, in our own society and in others, are the
direct result of political decisions put into practice, for example the privatization of state
industries or the control of inflation.
In summary, whatever industry the marketing firm is involved in, changes in the political and
legal environments at both the domestic and international levels can affect the company and
therefore needs to be fully understood.
Other macro-environmental factors
The macro-environmental factors discussed are not intended to be an exhaustive list, but merely
to demonstrate the main areas of environmental change. Other sub-environments may be
important to marketing management, for example, in some countries the religious environment
may pose an important source of opportunities and threats for firms. In the UK, demographic
changes are considered important by a number of firms.
In general, the UK population has been stable at approximately 56 million for a number of years,
but the birth rate is falling, while people are living longer. Firms that produce goods and services
suitable for babies and small children (e.g. Mothercare) have seen their traditional markets
remain static or decline slightly. Such companies have tended to diversify, offering products
targeted at older age groups. A larger older sector of the population offers opportunities for firms
to produce goods and services to satisfy their particular needs. The over-55 age group is the
modern marketer‟s current major opportunity. In all advanced economies such as the Australia,
UK and USA it is this age group that has the largest disposable income, and special products and
services such as holidays and pension-related financial services are being marketed to this sector.
Summary
The company‟s micro-environment has been discussed in terms of variables over which it has
control relevant to the marketing mix. This led to a description of marketing and its various sub-
divisions including information from the market-place in terms of forecasting and marketing
research. Marketing was then looked at alongside other business functions and its place in line
management was noted.
The company‟s proximate macro-environment was then examined under supplier, distributive
and competitive environment environments and finally the wider macro-environment was
examined under the headings: political and legal, economic, socio-cultural and technological
environments.
This can best be summed up by looking what has been covered in terms of a number of layers in
the environment from customers, to marketing and resources of the company, to the
organisation‟s proximate macro-environment and finally to its wider macro-environment.

18. Q.6 Consider the company, Maruthi Udyog Limited. Elaborate on the company’s
marketing mix and give examples related to the 4 P’s.
Ans.
The marketing mix is a business tool used in marketing products. The marketing mix is often
crucial when determining a product or brand's unique selling point (the unique quality that
differentiates a product from its competitors), and is often synonymous with the 'four Ps': 'price',
'product', 'promotion', and 'place'. However, in recent times, the 'four Ps' have been expanded to
the 'seven Ps' with the addition of 'process', 'physical evidence' and 'people'.
The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing
Association presidential address. However, this was actually a reformulation of an earlier idea by
his associate, James Culliton, who in 1948 described the role of the marketing manager as a
"mixer of ingredients", who sometimes follows recipes prepared by others, sometimes prepares
his own recipe as he goes along, sometimes adapts a recipe from immediately available
ingredients, and at other times invents new ingredients no one else has tried.
The term became popular in the article written by Neil Borden called “The Concept of the
Marketing Mix.” He started teaching the term after he learned about it with an associate.
The prominent marketer, E. Jerome McCarthy, proposed a Four 'P's classification in 1960,
which has since been widely used by marketers throughout the world. Since consumerism
appeared, Four 'C's theory has been born to Japan and the United States late in the 1970s.
Four 'P's
The 'four Ps' consist of the following:
Product - A product is seen as an item that satisfies what a consumer needs or wants. It is
a tangible good or an intangible service. Intangible products are service based like the
tourism industry & the hotel industry or codes-based products like cellphone load and
credits. Tangible products are those that can be felt physically. Typical examples of
mass-produced, tangible objects are the motor car and the disposable razor. A less
obvious but ubiquitous mass produced service is a computer operating system. [1]
Every product is subject to a life-cycle including a growth phase followed by a maturity
phase and finally an eventual period of decline as sales falls. Marketers must do careful
research on how long the life cycle of the product they are marketing is likely to be and
focus their attention on different challenges that arise as the product moves through each
stage.

19. The marketer must also consider the product mix. Marketers can expand the current
product mix by increasing a certain product line's depth or by increase the number of
product lines. Marketers should consider how to position the product, how to exploit the
brand, how to exploit the company's resources and how to configure the product mix so
that each product complements the other. The marketer must also consider product
development strategies.
Price – The price is the amount a customer pays for the product. The price is very
important as it determines the company's profit and hence, survival. Adjusting the price
has a profound impact on the marketing strategy, and depending on the price elasticity of
the product, often, it will affect the demand and sales as well. The marketer should set a
price that complements the other elements of the marketing mix.
When setting a price, the marketer must be aware of the customer perceived value for the
product. Three basic pricing strategies are: market skimming pricing, marketing
penetration pricing and neutral pricing. The 'reference value' (where the consumer refers
to the prices of competing products) and the 'differential value' (the consumer's view of
this product's attributes versus the attributes of other products) must be taken into
account.
Promotion - represents all of the methods of communication that a marketer may use to
provide information to different parties about the product. Promotion comprises elements
such as: advertising, public relations, personal selling and sales promotion.
Advertising covers any communication that is paid for, from cinema commercials, radio
and Internet advertisements through print media and billboards. Public relations is where
the communication is not directly paid for and includes press releases, sponsorship deals,
exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any
apparently informal communication about the product by ordinary individuals, satisfied
customers or people specifically engaged to create word of mouth momentum. Sales staff
often plays an important role in word of mouth and public relations (see 'product' above).
Place - refers to providing the product at a place which is convenient for consumers to
access. Place is synonymous with distribution. Various strategies such as intensive
distribution, selective distribution, exclusive distribution and franchising can be used by
the marketer to complement the other aspects of the marketing mix.

20. 4 Ps of marketing
Marketing decision variables are those variables under the firm's control that can affect the
level of demand for the firm's products. They are distinguished from environmental and
competitive action variables that are not totally and directly under the firm's control.
The four marketing decision variables are:
Price variables
Allowances and deals
Distribution and retailer mark-ups
Discount structure
Product variables
Quality
Models and sizes
Packaging
Brands
Service
Promotion variables
Advertising
Sales promotion
Personal selling
Publicity
Place variables
Channels of distribution
Outlet location
Sales territories
Warehousing system

21. Set 2
Q1: Explain the following: a) Product mix dimensions b) Product line strategies.
Ans:
Product mix dimensions
The number of product lines and items offered by marketer to the consumers.
A company‟s product mix has four different dimensions. They are product mix width, product
mix length, and product mix depth and product mix consistency.
1. Product mix width: The total number of product lines that company offers to the consumers.
2. Product mix length: The total number of items that company carries within its product line.
3. Product line depth: The number of versions offered of each product in the line.
4. Product mix consistency: If company‟s product lines usage, production and marketing are
related, then product mix is consistent, else it is unrelated.
Product Line Strategies
Product line: The group of related products which uses same marketing efforts to reach the
consumer.
The product line identifies profitable and unprofitable products and helps in allocation of
resources according to that. The product line understanding helps the marketer to take line
extension, line pruning and line filling strategies of the company.
Pidilite Industries, the adhesives and chemical company, have the following group of related
products (or product lines) in consumer and business markets.
Consumer market.
1. Adhesives and sealants.
2. Art materials and stationeries.
3. Construction chemicals.
4. Automotive chemicals
5. Fabric care

22. Business market
1. Industrial adhesives.
2. Textile chemicals.
3. Organic pigment powders.
4. Industrial resins and
5. Leather chemicals.
Product Line Decisions:
The major product line decisions are
a. Product line length
b. Product line stretching
c. Product line filling
d. Product line pruning
a. Product line length: The number of items in the product line is called the product line length.
Company should decide whether it requires longer chain or shorter length. The decision depends
upon the objective of the company, competitive environment and profitability. If the chain is
short company can add new products and if it is lengthy company can reduce the number of
products. For example, Pidilite‟s adhesives and sealants line has following 11 items in the
product line. Hence the length of product line is 11
1. White Glue 2. Paper Glue
3. Glue Stick 4. Instant Adhesive b. Product line stretching: Company lengthens
its product line either by stretching upwards or
5. Epoxy Putty 6. Epoxy Adhesive downwards or both ways. Line stretching
decision depends on three situations -
7. PVC Insulation Tape 8. Silicone Sealants
9. Contact Glue 10. All Purpose Glue i. Company which operates in high end market
may come up with mid class or low class
11. Maintenance Spray targeted products.
ii. The company which operates in lower end of
market may come up with high end market products.
iii. If the company operates in mid segment and comes out with low end product as well as high
end product then it is stretching both ways.
c. Product line filling: Adding more items in the present product line. For example, in the year
2000 Maruti Suzuki launched Alto. This product was between Maruti 800 and Maruti Zen. Here
company was trying to fill the gap existing in the segment by introducing ALTO, i.e. line filling.
d. Product line pruning: Removing the unprofitable products from the product line. Toyota
Kirloskar phased out their well known brand Quails when they thought the brand was not adding
value to the product line.

23. Q2: a) Assess the factors that are involved in setting up a distribution channel. b) Give a
note on Retailing.
.
Ans:
Assess the factors that are involved in setting up a distribution channel
Marketers should consider various factors before deciding the particular type of channel. It may
be organizational or competitive factors. The type of goods to be transported and stored will
decide the length and intensity of channel. To decide on the particular channels, marketer will
have to take into account the following factors.
1. Understanding the customer profile
Purchasing habits differ from individual to individual. Individuals who face shortage of time
would like to purchase on the net (direct channel) and those who have abundant time would like
to go through the shopping experience. Some of them would like to have variety of goods, while
others want unique or specialized products. Hence marketers should understand who are his
customers? How do they purchase and how often they purchase? For example, customers don‟t
like to travel half a kilometre to purchase a shampoo sachet, but they don‟t mind travelling two
kilometres while purchasing durable goods.
2. Determine the objectives on which channel is to be developed
a. Reach: Company would like to make the goods available in most of the retail outlets. So it,
will adopt intensive distribution channel.
b. Profitability: Company wants to reduce the cost in the channels and enhance their profitability.
It will restructure the channel to optimum level so that it can reduce the cost and increase the
profit.
c. Differentiation: Company positions their products differently. When most of the industry
players follow conventional system, company goes with new format of channels. For example,
all computer manufacturers were adopting dealer-retailer channel to sell their products, but Dell
started selling its product on the internet.
3. Identify type of channel members:
Once the objectives are set on the basis of company‟s policies, it will analyze which types of
channels are most suitable. Merchants, agents and resellers are some intermediaries involved in

24. the distribution. Merchants are those who buy the product, take title and resell the merchandise.
Agents will find the customers, negotiate with them, but do not take the title of the product.
Facilitators are the people who aid the distribution but do not negotiate or take the title of the
product.
4. Determining intensity of distribution:
Intensity of distribution means how many middlemen will be used at the wholesale and retail
levels in a particular territory. If the number of intermediaries is more, then the cost of the
channel will increase. However, if the number of intermediaries is less, then company will not be
able to meet all target customers. Therefore company should adopt optimum number of
intermediaries. On the basis of how many intermediaries are required, company can adopt any
one of the following strategies.
a. Intensive distribution: A strategy in which company stocks goods in more number of outlets.
The intention is to make the goods available near to the customer. For example, you can find
Parle-G glucose biscuits available in almost all the retail outlets in rural and urban areas.
b. Selective distribution: A strategy in which company stocks goods in limited number of retail
outlets. For example, televisions are sold only in selected retail outlets. TVs cannot be sold like
toothpaste. Onida TVs are available in electronic retail shops like Viveks, Girias, Next, E-zone
etc…
c. Exclusive distribution: In this type of channel format, marketer gives only a limited number of
dealers the exclusive right to distribute its products in their territories. For example, a Kaya skin
care solution of Marico is marketed through exclusive distribution.
5. Assigning the responsibilities to channel members.
Company should define the territory in which the channel member should operate, at what price
he should sell, services he should perform, and how he should sell.
6. Selecting the criteria to evaluate the channel member:
Company may have different types of channel alternatives. It would like to choose any one of the
alternatives, which meets its objectives. Channels can be evaluated in the design phase by the
method called SCPCA.

25. a. Sales(S):
The ability of each channel member to generate the sales for company in a given period.
b. Cost(C):
How much cost each channel alternative incurs? Which one of the alternatives provides the
optimum solution?
c. Profitability (P):
Various channel alternatives available to the company and their profitability shall be compared.
Channel with better profitability shall be selected.
d. Control (C):
Every company would like to have better control over its channel members. Alternative channels
can be evaluated on the basis of how much control each channel member desires. And how much
control the company is willing to provide.
e. Adaptability (A):
Marketing is a dynamic world. Competition exerts pressure on companies to relook at their
practices and supply chain continuously. The channel alternatives should be flexible enough to
meet the changing requirements. Whichever channel alternative meets such objectives shall be
selected.
Give a note on Retailing:-
Retail sector has witnessed tremendous growth in the last few years. The major factors which
drive the retail boom are change in consumer profile and demographics, increase in the number
of international brands available in the Indian market, economic implications of the government,
increasing urbanization, credit availability, improvement in the infrastructure, increasing
investments in technology and real estate. The Indian retail market, which is the fifth largest
retail destination globally, according to industry estimates is estimated to grow from US$ 330
billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously,
organized retail which presently accounts for 4 per cent of the total market is likely to increase
its share to 22 per cent by 2010.
As per Associated Chambers of Commerce and Industry of India (ASSOCHAM), the overall
retail market is expected to grow by 36%. The organized sector is expected to register growth
amounting to Rs 150 billion by 2008. Retail is amongst the fastest growing sectors in the country
and India ranks 1st, ahead of Russia, in terms of emerging markets‟ potential in retail.

26. Characteristics of retailing
i. Direct interaction with customers. Retailer is the final link between company and customer.
Retailer understands the need of the customer and provides the proper solution to him. For
example, neighbourhood grocery store person knows his customer profile better. He reminds the
customer of what to purchase and provides credit.
ii. Purchased in small quantity: Customer purchases small quantity of merchandise at the retail
store. Even if customer purchases less quantity he will purchase it frequently. This has led to
better relationship between customer and retailer.
iii. Tool of marketing communication: Companies use retailer location for point of purchase
displays. They also encourage retailer to promote the products through word of mouth
communication.
Functions of retailing
i. Sorting: Retailers arrange the items in proper order so that customer can easily identify the
goods or services that he needs.
ii. Breaking bulk: The process of unpacking big packets into small packets. Retailer will perform
this function as customer may not be able to purchase large quantity of goods and services.
iii. Holding stock: Retailer works as storage facility to organizations. Retailer holds inventory to
meet the day to day needs of consumer.
iv. Channels of communication: Retailer promotes the company product through word of mouth
communication. The retailer location is also used for point of purchase display.
v. Transportation: Retailer undertakes door delivery order in case of durable goods. This feature
is now adopted by the small grocery stores also.

27. Type of retailing
A. Store retailing: The mode of retailing where a store is essential in a particular location to do
business. Store retailing can be performed in different formats. They are
1) Specialty store: The stores carry large amount of merchandise but in limited product lines
like Textile store or furniture store. For example, Tanishq, jewelery retail store.
2) Department store: In this retail format, apparel, home furnishing and consumables goods and
services are sold. Each of the formats is considered as a different department and managed in the
retail store. For example, Shoppers Stop of Raheja group.
3) Supermarkets: According to Philip Kotler supermarkets are a relatively large, low cost, low
margin, high volume, self service operation designed to serve the consumer‟s total needs for food
and household products. For example, Food World of RPG group.
4) Convenience store: These stores are very near to customer residence; usually carry or hold
day to day products of high turnover at premium price. For example, Reliance Fresh
5) Discount store: These stores sell products at low prices with low margin. The store achieves
their profit by generating high volumes. Subhiksha, a south India based retailer follows this
format.
6) Off price retailers: This type of retailer buys the goods at less than wholesale prices. These
products are sold at lesser than retail prices. For example, factory outlets in Marathahalli,
Bangalore.
7) Super stores: These are very large stores where customer can purchase food and non food
products. The super store includes category killers that carry large merchandise in a particular
category. For example, Nalli sarees which carries a large variety of sarees in their stores. Another
type of super store format which exists in India is Hypermarkets. These retail outlets have huge
space and carry large merchandise. For example, Reliance Mart in Ahmadabad.
B. Non store retailing:
The mode of retailing where a company uses electronic media or direct selling medium to sell
their products. For example, direct selling, Telemarketing, Automatic vending, online retailing
and direct marketing.

28. Q3: Geo Ad Agency has many corporate as their clients. Due to lack of resources, it is
planning to cut down work and reject certain clients. Further, they want to establish a
concrete system in communication development and ad structure. What would be your
advice to Geo Ad agency in this aspect?
Ans:
Geo Ad Agency can follow following points to establish a concrete system in
communication development.
These points also help Geo Ad agency to sustain their clients:
Preparing target customer profile:
Effective communication starts with identifying the target customer to whom the communication
is developed. In this stage company prepares target customer profile.
Identifying promotion objectives:
Target customer profile provides inputs about his/her readiness to purchase the product.
Customer may be in any of the six stages of hierarchy of effects. The six stages are awareness,
knowledge, liking, preference, conviction and purchase. Every company will like to bring their
customers to the purchase stage from other five stages. Therefore it creates different promotion
program at different stage. To make it clearer, Company first creates awareness about the
product, educate them about the advantages, induce them to choose the brand, stimulates and
monitors that customer purchases the product.
Designing a message:
After deciding the communication objectives, Marketer turns to develop right message which
should create attention, interest, desire or action (AIDA) by the customer. Before deciding what
should be there in the message, we will have to understand AIDA model in detail. The main
objective of any message is to meet the AIDA model although the message framed will be
subject to product type/category, ad budget and creativity skills of individuals.

29. I. AIDA model:
1. Attention: The marketing communication should generate attention towards the product. In this
stage customer is having the need; organization should provide solution from their
communication. For example, when advertisers use a popular film star or a celebrity to promote
a perfume brand or even a soap or a toothpaste, it will immediately catch the audience‟s
attention.
2. Interest: Once the customer provides enough attention towards the communication, organization
should stimulate it to create interest. For example, if celebrities are used to endorse products,
audience must be curious enough to know what they are saying about that particular product.
3. Desire: The interest created should be forced in the customer mind so that he will develop desire
towards the product. For example, when people have seen the ad and show interest, next thing
would be to create a desire for that product. People should have the willingness to buy the
product and unless they don‟t desire it, they will not be eager to buy the same.
4. Action: Strong desires should be turned into action. Hence company should provide the
advantages of purchasing of the product in their communication messages. For example, it is
very difficult for the Insurance companies to grab the attention of people towards insurance
products, create interest and desire as to make a person buy the same. So, it‟s a challenge to the
marketer to develop such a message that immediately gets the attention and make a person to go
for it. For example, it is easy to catch people‟s attention towards ice-creams so that they will
have interest and desire to taste it and eventually buy it.
II. Deciding the message content.
Message content must have any one of the following appeals
1. Emotional appeal: Positive emotional appeal or negative emotional appeals are strong tools used
to intensify the purchasing activity of the customer. Positive emotions like love, pride, joy and
humour are used in the message
2. The negative emotions like fear guilt and shame are also used in the advertisement to attract the
customer.
3. Rational appeals highlight on the desired benefits about the products. They highlight quality,
economy value or performance of the product.
4. Moral appeal: These are concerned towards public health or environment or social responsibility.
For example, Shell lubricants show its commitment towards environment in their advertisements.

30. III. Message format:
The Right Message Format for the Right Marketing Strategy should follow. Depending on
message marketing is naturally going to have to change. Shorter messages require different types
of advertisements than longer ones.
Selecting the channels of communications
The communicator may use company sales people, reference groups, blogs, RSS, webinar,
online communities and social networking sites to promote their products. These media are
called as personal communication channels. The word of mouth campaigns buzz marketing and
viral marketing are some examples of personal communication channels.
Selecting the message source
Messages communicated by the celebrities and proper sources have high credibility among the
target consumers. Many companies use well known actors and actresses, cricket players, and
even cartoon characters to promote their advertisements.
Target Customer Feedback
The communicator collects the feedback on the promotion campaign to assess how many of
target customers are able to see, hear or read the message. This stage helps communicator to
understand how many of target customers actually able to recall the message? And among them
how many of them really purchased it. Some companies go further and ask the customer to
provide suggestion to improve the promotion campaign.

31. Q4: Discuss the objectives of training and training programme along with its significance.
Answer:
Training
Training is a continuation of selection. Having selected the salesmen, there are two options. They
can be sent to the field directly with samples, order books etc., and/or they can be sent for
training programme. Some people think that salesmanship is born, but there are no born
salesmen like there are no born doctors, lawyer, engineers, teachers etc. However, all these
people need training to call them qualified, and so also is the case with salespersons. A person
may have interest in the profession. Thiess interest can be fully developed, through proper
training. One attains perfection, self-development etc., through training.
Training means the process of perfecting the salespersons for their work. Training programmes
are organized procedures or methods through which knowledge as well as skill, for a definite
purpose, is acquired. By training, one can increase knowledge in a particular field. The
salesmanship is not born but can be made effective through training.
Significance of Training: The present era of marketing world is full of stiff and cut-throat
competition. The world is dynamic and not static. Customers are more benefit-oriented.
Producers, in order to meet the ever-changing demands of the consumers, produce new products,
new devices, and products with multiple uses and so on. Thus, training or repeated training is
essential to keep the salesmen, with up-to-date knowledge, in respect of new or developed goods.
Training gives scope for improvement.
Objectives of Training:
The objectives are summed up below:
1. To facilitate the salespersons to acquire the techniques and principles of salesmanship, process
of sales, canvassing etc.
2. To bring down the labor turnover in the sales force.
3. To facilitate better sales performance.
4. To improve the relations with the customers.
5. To increase the efficiency of sales personnel.

32. 6. To keep the salesperson informed about the products, market, competitors etc., to face
different situations.
7. To lower the selling expense so as to increase the profits.
8. To maintain sound relations between employer and employee.
9. To develop better knowledge, and the ways and means to resist all undesirable situations.
Training Programme
A firm should chalk out a programme for sales training. The training is based on the nature of the
job and the products to be sold. A planned training programme should function with the
following ideas or principles, often referred to as ACMEE.
A: Aim of Training
C: Content of Training
M: Method of Training
E: Execution of Training
E: Evaluation.
1. Aim of Training: The whole idea behind the training is to make a recruit a good salesperson.
2. Content of Training: No hard and fast rules can be laid down as to the contents of training.
The content of the training programme relates to the subject-matter of training.
3. Method of Training
For imparting training to the salespersons, different methods are being used. Broadly, these
methods may be divided into two:
4. Execution of Training
Once sales person done with training he/she should send to actual market to sale the project. A
periodic evolution is required to observe of sales person‟s performance, based on that it can be
decided if sales parson needs more training.
5. Evaluation of Training
Having trained the salespersons, the marketing manager must evaluate the usefulness or
effectiveness of training, individually and collectively on the basis of the performance of the
sales personnel. Money, effort and time have been spent on training. Therefore, it is natural to
expect returns. Evaluation can be made on the basis of performance of sales executive in terms
of sales volume, sales profitability, order-size, expenses etc., between, before and after training
periods.

33. Q5 : Management of Sai Systems Pvt. Ltd. has decided to enter international marketing
scenario. What methods are applicable to the company to enter international markets and
what should be the approach?
Ans: –
Sai Systems Pvt. Ltd. should follow an International Market Entry Strategies:
To enter international marketing Sai Systems Pvt. Ltd. know the answers for some basic
questions like –
a. In how many countries would the company like to operate?
b. What are the types of countries it plans to enter?
That‟s why companies evaluate each country against the market size, market growth, and cost of
doing business, competitive advantage and risk level.
Once the market is found to be attractive, Sai Systems Pvt. Ltd. should decide how to enter this
market. Sai Systems Pvt. Ltd. can enter the international market by adopting any one of the
following strategies.
They are
a. Exporting
b. Licensing
c. Contract manufacturing
d. Management contract
e. Joint ownership
f. Direct investment
Exporting is the technique of selling the goods produced in the domestic country in a foreign
country with some modifications. For example, Gokaldas textiles export the cloth to different
countries from India. Exporting may be indirect or direct. In case of indirect exporting, company
works with independent international marketing intermediaries. This is cost effective and less
risky too. Direct exporting is the technique in which organization exports the goods on its own
by taking all the risks. Maruti Udyog Limited, India‟s leading car manufacturer exports its cars
on its own. Company can also set up overseas branches to sell their products. Adani Exports,
another leading exporter from India has international office in Singapore.
Licensing: According to Philip Kotler, licensing is a method of entering a foreign market in
which the company enters into an agreement with a license in the foreign market, offering the
right to use a manufacturing process, trademark, patent, or other item of value for a fee or
royalty. For example, Torrent Pharmaceuticals has license to sell the cardiovascular drugs of
Chinese manufacturer Tasly. Licensing may cause some problems to the parent company.
Licensee may violate the agreement and can use the technology of the parent company.

34. Contract manufacturing: Company enters the international market with a tie up between
manufacturer to produce the product or the service. For example, Gigabyte Technology has
contract manufacturing agreement with D- link India to produce and sell their mother boards.
Management contracting: In this case, a company enters the international market by providing
the knowhow of the product to the domestic manufacturer. The capital, marketing and other
activities are carried out by the local manufacturer.
Joint ownership: A form of joint venture in which an international company invests equally with
a domestic manufacturer. Therefore it also has equal right in the controlling operations. For
example, Barbara, a lingerie manufacturer has joint venture with Gokaldas Images in India.
Direct Investment: In this method of international market entry, Company invests in
manufacturing or assembling. The company may enjoy the low cost advantages of that country.
Many manufacturing firms invested directly in the Chinese market to get its low cost advantage.
Some governments provide incentives and tax benefits to the company which manufactures the
product in their country.
Approaches to International Marketing
The three common approaches used in the international market are -
a. Domestic market extension approach.
b. Multi domestic market orientation.
c. Global market orientation.
Domestic market extension approach: Companies that adopt this strategy think international
markets are secondary to its domestic markets. For example, HSBC advertises its banking
services with a tag line “the world‟s local bank”.
Multi domestic market orientation: In the international market each country has its uniqueness.
Their preference varies. The consumer profile is different from domestic operation. Companies
develop different market plans for such markets. For example, in France, men use more
cosmetics than the women, whereas in India women use more cosmetics than men. A cosmetics
company should change the product positioning differently.
Global market orientation: In this approach, company thinks that products‟ needs are universal in
nature irrespective of country where they work. Here company tries to standardize their products
or services. For example, Sony Walkman is same across the world. The product information
brochure contains explanation in different languages of different countries. The final product is
same in all the countries.

35. Q6 : a) Give a note on Product mix pricing strategies. b) What is Brand development? How
is it done?
Ans:
Note on Product mix pricing strategies
The product mix is the collection of products and services that a company chooses to offer its
market. When the product is a part of product-mix, there are five kinds of strategies involved
1. Product Line pricing:
Strategy of setting the price for entire product line. Marketer differentiates the price according to
the range of products, i.e. suppose the company is having three products in low, middle and high
end segment and prices the three products say at Rs 10 Rs 20 and Rs 30 respectively.
The three levels of differentiation create three price points in the mind of consumer. The task of
marketer is to establish the perceived quality among the three segments. If the customers do not
find much difference between the three brands, he/she may opt for low end products.
2. Optional Product pricing:
This strategy is used to set the price of optional or accessory products along with a main product.
Organizations separate these products from main product so that customer should not perceive
products are costly. Once the customer comes to the show room, organization explains the
advantages of buying these accessory products.
3. Captive product pricing:
Setting a price for a product that must be used along with a main product. For example, Gillette
sells low priced razors but make money on the replacement cartridges.
4. By-product pricing:
It is determining the price for by-products in order to make the main product‟s price more
attractive. For example, L.T. Overseas, manufacturers of Dawaat basmati rice, found that
processing of rice results in two by-products i.e. rice husk and rice brain oil. If the company sells
husk and brain oil to other consumers, then company is adopting by-product pricing.
5. Product bundle pricing:
It is offering companies several products together as a bundle at the reduced price. This strategy
helps companies to generate more volume, get rid of the unused products and attract the price

36. conscious consumer. This also helps in locking the customer from purchasing the competitors‟
products. For example, Anchor toothpaste and brush are offered together at lower prices.
Brand development
Company can develop the brand on the basis of product category and brand name. Some of the
different strategies adopted by companies to develop the brands are as follows:
1. Line extension: Company uses its well known brand name to introduce additional items in a
given product category such as new forms, flavours, ingredients or package sizes.
For example, Karnataka Milk Federation, uses its top brand name Nandini, to introduce new
items like toned milk, full cream milk , curd and milk powder.
It is less risky and requires fewer investments to introduce the product. In the above example
Nandini used the extension to meet the excess capacity that it has. The milk procurement was
more than the demand from the customer. Hence it started producing the milk powder. But all
the products introduced need not to be successful in the market. In case of KMF, Nandini ice
creams didn‟t click in the market. Another risk of line extension is brand cannibalization, i.e.
company‟s brand/items compete with each other.
2. Brand extension: A strategy in which company uses one of its familiar brand names for new
product category‟s items. For example, United Breweries (UB) Limited group used its flagship
brand Kingfisher to different categories. Kingfisher was originally a beer brand extended to
airlines.
Brand extension gives instant recognition to the brand. In the above example, people required
very little time to know Kingfisher airline brand, because parent brand was very well known.
Brand extension may hurt the parent brand reputation in the market if it fails.
3. Multi brands: The technique of introducing the product or items in existing product category
with a new brand name.
For example, Hindustan Unilever uses different brand names for their home and personal care
category. The above example shows us that HUL have Breeze, Dove, Liril, Lux, Lifebuoy and
Pears in the bath soap segment itself. It helps the company to come out with new features in the
product or product category. Organizations adopt this strategy to avoid brand cannibalization in
the given category. The major disadvantage of this strategy is that none of the brands will enjoy
major market share and result in lesser profitability.
4. New brands: The strategy indicates coming out with new brands for new category products.
In this strategy, company believes that existing brands cannot be extended to the new category.
The new brand strategy requires huge resources to build it. The new category, if it already has
some brands of other companies, investment requirement will go up. For example, Hindustan
Unilever launched Pure-It in the water purifier category. The category and brand are new to the
company.

37. THANK YOU