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15 most asked marketing question, domain knowledge


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15 most asked Marketing question in interview in respect of domain knowledge.

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15 most asked marketing question, domain knowledge

  1. 1. Mustahid Ali MBA3, Roll NO: 1334 Assignment- Marketing 15 Question 1) Marketing – What is Marketing? Examples. Difference between Marketing and Selling. Why is Marketing the most important function in an organization? What are 4 Ps of Marketing Mix and 7ps of Service Marketing Mix? What is the difference between Marketing a Good (tangible product) and Marketing a Service? Marketing is identifying need of customers and serving these needs creating value for them. Good marketing is no accident, but a result of careful planning and execution using state-of-the-art tools and techniques. Thus we see marketing management as the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering, and communicating superior customer value.Good example for this is The .Obama for America. presidential campaign which combined a charismatic politician, a powerful message of hope, and a thoroughly integrated modern marketing program. “Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.” — Philip Kotler Examples: BMW launched a series of eight high-cost, high-production short films released on BMW's website. Within the first four months of release, the films attracted over 11 million views and sent BMW sells up 12% in 2001 alone.
  2. 2. Difference between selling and Marketing Marketing:  identifies appropriate prospects  effectively communicates image and capabilities of the firm  creates awareness of, and emphasizes an appeal—a differentiation factor—about the firm  perfects customer service  requests feedback from clients on a regular basis  anticipates and meets needs Marketing often necessitates cultural changes at every level in the firm Ultimately, marketing strives to make all interactions with your firm (aka “moments of truth”) into positive experiences. Selling is:  proactive seeking of prospects  interacting to qualify prospects  effective acknowledgment of the prospect’s concerns  closing the sale—getting hired  following up and staying in contact when not hired Successful sellers use active listening skills and demonstrate the ability to meet the prospect’s needs by conveying competence and confidence. Sellers rely on public perception of expertise and/or excellence—a product of marketing; therefore, they feel obligated to meet these expectations and to follow through impeccably. As with marketers, successful sellers also create positive moments of truth, even if the firm is not hired, by representing the firm well. Marketing and sales overlap slightly, and depend on each other, but they are distinctly different. Importance of Marketing in an organization a. Marketing Promotes your company - builds awareness that you exist
  3. 3. b. Describes your products/services - let’s people know what you do c. Announces new products/services d. Differentiates your offerings from competitors e. Brings qualified prospects to you f. Helps build professional networks g. Marketing = Corporate strategy: aligning company goals with customer needs h. Keeps staff in the loop & motivated to work for your company i. Keeps you up to date on industry trends j. Let’s you know which offerings are most in line with customer objectives 4 Ps of Marketing Mix a. Product b. Price c. Place d. Promotion 7ps of Service Marketing Mix a. Product b. Place c. Price d. Promotion e. People f. Process g. Physical Evidence Difference between Marketing a Good (tangible product) and Marketing a Service Marketing involves convincing the customers to buy the product or service of a company by the sales people. Both product and service sales involves the same thing that is convincing the customer to consume the product or service. However there are
  4. 4. some differences between the two, given below is the list of differences between the two – 1. While product marketing involves marketing for tangible goods, tangible goods are those goods which can be seen. While service marketing in intangible because it involves services and services cannot be seen and that is why they are intangible. 2. While product marketing is same for all the persons, but services marketing differs from person to person. 3. Examples of product sales can be sales for goods such as soap, electronic items, industrial products etc….., while examples of service sales are insurance selling, banks relationship marketing etc….. 4. It can be done in bulk while service marketing cannot be done in bulk rather it is done on individualistic basis. 5. Product sales does not require maintaining the continuous relations with customers rather it requires great effort at the time of selling while service sales requires maintaining continuous relations 6. with the customers, because services are to be provided continuously which is not the case with products 7. Example of Service Marketing For example, service is being provided by a restaurant. The restaurant provides food and ambience to its customers. When the restaurant is marketing itself it will try to convince its potential customers that this restaurant is more preferable in comparison to others because of its quality and atmosphere and that the trip to this particular restaurant is worthwhile. Example of Product Marketing For example, a company is selling a non-alcoholic drink can market its product by sample. They can offer customers with a sample of their product and if they like it they can but it from the departmental store or vending machines etc.
  5. 5. Q2. What is positioning? What is a Positioning Map? What is an FCB Grid? What are Points of Parity (POP) and Points of Differences? What is Branding? Positioning is creating an identity and an image of your product or service in the minds of your Target Customer. Basically positioning of a product or service means how that particular product/service is perceived by its Target Customers. Companies take a lot of effort in positioning their offering. A good positioning strategy would be the best thing that can happen to a brand. Positioning Map A Map that clearly defines where your offering is positioned in comparison to that of your competitors. Positioning map can help a company classify existing market products in different position categories. This insight can be used by the company in several ways. For example, it identifies the product which is the closest competitors of the company's product and the strength and weaknesses of the company's product in respect of its competing products. It can also help company to identify market segments with specific product requirements where new products may be launched by the company. Example: Let’s draw a Positioning Map for Indian Coffee Shops. Branding The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers. Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem. The objectives that a good brand will achieve include:  Delivers the message clearly  Confirms your credibility  Connects your target prospects emotionally  Motivates the buyer  Concretes User Loyalty
  6. 6. To succeed in branding you must understand the needs and wants of your customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact. Your brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot. A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building your brand. After all your brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without.
  7. 7. FCB Grid “FCB grid,” is suggested by Dave Berger and Richard Vaughn. This model combines high and low involvement, and left and right brain specialization. It shows a visually coherent matrix which has four quadrants with two factors—high and low involvement, and feeling and thinking. The communication response would certainly be different for high versus low involvement products and those which required mainly thinking (left brain) and feeling (right brain) information processing. To define involvement and think / feel, eight scales are used: High Involvement:  Very important decision  Lot to lose if you choose the wrong brand  Decision requires lot Low involvement :  Unimportant decision.  Little to lose if you choose the wrong brand.  Decision requires little thought Think or rational approach  Decision is / is not mainly logical or objective  Decision is / is not based mainly on functional facts Feel or emotional approach  Decision is / is not based on a lot of feeling  Decision does / does not express one’s personality  Decision is / is not based on looks, tastes, touch, smell, or sound (sensory effects)
  8. 8. Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competing brand i.e. points where you are claiming superiority or exclusiveness over other products in the category. Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared by other brands i.e. where you can at least match the competitors claimed bets. While POPs may usually not be the reason to choose a brand, their absence can certainly be a reason to drop a brand.
  9. 9. Q3. What is segmentation? What is target marketing? What is a target group (TG)? Difference between Target market, target group and target audience? What is segmentation? Segmentation is the process of splitting (segmenting) the entire market (everyone) into smaller groups that share similar traits. Segmentation variables are what you use to segment the market, and the most common of these is demographics. Demographics are variables like age, gender, income etc… There are other segmentation variables too: geographic, psychographic and behavioral. What is target marketing? Target marketing is the breaking of a market into segments and focusing the marketing efforts on one or a few important segments. It involves reaching out to consumers or new customers aiming to sell your products and services to them. Difference between Target market, target group and target audience? A target market is a specific, well-defined segment of consumers that a company plans to target with its products, services and marketing activities. Target marketing orients all of the various components of the marketing function toward a single group, maximizing the appeal of brands to specific markets. The term "target audience" is a bit narrower; it refers specifically to the group of consumers targeted by advertisements. Outside of the context of business, target audience can also refer to the specific group of people targeted by television shows, movies and music products. An advertisement's target audience can be the same as the brand's target market, but a target audience can be well defined. For example, a company's target market might be small girls for “Barbie dolls”, but the target audience is the people who watch the ads of Barbie dolls. A target group is any group that is targeted. (The term is widely used in marketing. For some products the target group is teens, for others it is suburban families, and for some it is the elderly).
  10. 10. Q4. What is a Product Strategy? Explain the Total Product Concept with Examples? What are Product Mix and Product Line? Product Strategy is an action plan for meeting the objectives of an operating strategy via the products sold to the marketplace. Product Propositions are ideas on how the strategy will be realized through products sold within specific target markets. Product Strategy / Proposition Management is therefore the ability to capture and manage the detail of a company’s strategy and resulting propositions, that then drive what products they will develop, deliver and sell. This capability allows the management of this information at the enterprise level, across the different operating groups and market units within which the enterprise operates. Finally, it provides the ability to link the product propositions to the actual sellable products in order to track how the product strategy is actually be delivered into the marketplace. The ability to hold this information enables downstream performance reporting to validate or negate a company’s product strategy and underlying propositions. Example A business looking to introduce some product into the stream of commerce must plan and design a product strategy carefully. Two major product strategies include price- based product strategy and product differentiation. When developing a strategy, strive to answer the following questions: who the product is aimed at; what benefit the product brings; what your position is in the marketplace; and what advantage the strategy will have over those of your competitors. The generic or core product must deliver the essential benefits and address the basic need – a car must get you from A to B, however a bicycle or a train can get do this also. So the expected or actual product is the car or the product form. So receive the essential benefit of a refreshing drink you would expect to receive a product in a bottle, carton or a glass. Within these to elements of the product you can already see that there is scope for getting it wrong – so the first step is to make sure that your product delivers the essential benefit – it meets the need of the customer and that the form is acceptable and ensures that the product can be delivered to the customer in an appropriate form.
  11. 11. Total product concept = But it is the total product that incorporates everything that the customer receives – including the service and intangible associations such as celebrity endorsement and the brand values. So from the example above the Mini and the BMW 3 series offer individual transport over a very similar kind – but the two brands have very different associations for their given markets – and of course they are actually both owned by BMW. But of course the total product can also have more practical elements such as service, warranty and possibly some form of finance. These might be part of the manufacturers offering or additional elements provided by the retailer or other market intermediaries. Total Product Concept It has five product levels. Core product- The service or the benefit the customer is really buying. For a Hotel it is Rest and Sleep. Basic Product- The Marketer must turn the core benefit into the basic product. For a Hotel it is bed, bathroom, towels, et al. Expected Product- A set of attributes and conditions a buyer normally expects when buying a product. For a Hotel it is a clean bed, fresh towels, et al. Augmented Product- The offerings that exceed customer expectations! For a Hotel it would be roof top Restaurant. Potential Product- Possible augmentations or transformations the product or offering might undergo in the future. For a Hotel it might be a helipad, a tourist museum, et al.
  12. 12. Product Mix and Product Line A Product Mix is the set of all products and items a particular seller offers for sale. A product mix consists of various product lines. Product Line is a group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets, or channels, or fall within the same price ranges. It may consist of several brands or single family brand. A company’s product mix has certain width, length, depth and consistency. The width of Product mix refers to how many different product lines the company carries. The length of the Product mix refers to the total number of items in the mix. The depth refers to how many variants are offered of each product in the line.
  13. 13. The consistency refers to how closely related the various product lines are in end use, production requirements, distribution channels, or in some other way. 5) What are different types of Pricing Strategies? Pricing is one of the four elements of the marketing mix, along with product, place and promotion. Pricing strategy is important for companies who wish to achieve success by finding the price point where they can maximize sales and profits. Companies may use a variety of pricing strategies, depending on their own unique marketing goals and objectives. Pricing Strategies PENETRATION PRICING  Price set to ‘penetrate the market’  Low price to secure high volumes  Price set to ‘penetrate the market’  Low price to secure high volumes  Typical in mass market products -chocolate bars,food stuffs, mobile phones, etc.  May be useful if launching into a new market MARKET SKIMMING Skim the profit from the market Suitable for products that have short life cycles or which will face competition at some point in the future (e.g. after a patent runs out) Examples include: Playstation, jewellery, digitaltechnology. VALUE PRICING Prices set according to perceived value of theproduct/service and 'willingness to pay' Examples include status products/exclusiveproducts LOSS LEADER Goods/services deliberately sold below cost toencourage sales elsewhere
  14. 14. Purchases of other items more than covers ‘loss’on item sold Typical in supermarkets PSYCHOLOGICAL PRICING Classic example - Rs. 999 instead of Rs. 1099 Used to play on consumer perceptions GOING RATE (PRICE LEADERSHIP) Leading the way in determining prices Common in oligopolies TENDER PRICING Firm (or firms) submit their price for carrying outthe work Purchaser then chooses which gives best value PREDATORY PRICING Deliberate price cutting or offer of ‘free gifts/products’ to force rivals (normally smaller and weaker) out of business or prevent newentrants ABSORPTION/FULL COST PRICING FULL COST PRICING attempting to set price tocover both fixed and variable costs Absorption Cost Pricing - Price set to ‘absorb’some of the fixed costs of production MARGINAL COST PRICING Setting the price of a product to equal the extracost of producing an extra unit of output Mostly used during periods of poor sales Particularly relevant in transport where fixedcosts may be relatively high CONTRIBUTION PRICING Contribution = Selling Price - Variable (direct costs) Prices set to ensure coverage of variable costsand a ‘contribution’ to the fixed costs TARGET PRICING
  15. 15. atdifferent prices COST-PLUS PRICING Selling Price = cost of production + profit % variable and markup INFLUENCE OF ELASTICITY Degree of price elasticity impacts on the level ofsales and hence revenues % Change in Quantity Demanded % Change in Price PREMIUM PRICING It means establishing a price higher than the competitor. It is a strategy that can be effectively used when there is something unique about the product. This strategy aiming at increasing revenue during early stages of production. ECONOMY PRICING They take a very basic, low cost approach to marketing and attract a segment which is very price sensitive. Example can be Wal-Mart, Big Bazaar Q6. What is the role of “Place” in a Marketing Mix? What is a VMS and an HMS? What are different format of retail stores found in India? the importance of place in the marketing mix is that it does not refer to the location of the business itself, but rather to the location of the customers. The place deals with strategies the business can employ to get its goods from its present location to the location of the customers. Such a project must of necessity entail a study of the demographic that constitutes the customers with the aim of finding out their location. In an increasingly global economy, the location of the customers of a company located in Singapore could span the different continents of the world.
  16. 16. As such, the company must figure out the best way to channel its products from Singapore to its customers in Africa, Europe and other continents. In this way, it is easy to see the role of place in the marketing mix. This allows such companies to come up with the best methods for achieving maximum distribution of goods to the customers. One of the examples of a place or channel includes the retailer. After identifying the target market, retail stores located nearby could serve as a place for reaching these customers. Another element that could serve as a place for reaching the customers is the Internet. If the company is located in an industrialized country, then it is logical to assume that a large number of its customers use the Internet in some form. This element illustrates the importance of place in the marketing mix because such customers can order from the company directly through Web sites, which the company has set up in advance for such a purpose. In this sense, the Internet serves as a place for the purpose of reaching the customers.The place could also refer to the methods and channels for the effective and expeditious distribution of the product to the target customers. Such channels may include the distributors of the product. It may also include well-coordinated methods for the transportation of the goods to the final consumers. VENDOR MANAGEMENT SYSTEM Vendor Management System (VMS) provides visibility into the extended workforce, allowing organizations to better manage spend, compliance, risk and efficiency. People fluent provides solutions that address your total workforce to ensure alignment, assessment, measurement and productivity across the enterprise. People fluent Vendor Management System helps organizations effectively and efficiently manage their temporary, consultative, and professional services workforce. By improving operational efficiencies, cost controls, compliance, and invoice controls for staff augmentation and professional services spend, Peoplefluent VMS enables you to
  17. 17. leverage the contingent and services procurement workforce as a strategic component of your overall human capital management strategy. Peoplefluent Vendor Management System enables organizations to achieve fluency in the management and optimization of their contract and temporary labor by designing solutions to address capabilities for both contingent and services procurement spending. By using the solution to improve operational efficiencies, control costs, and establish visibility and planning of their contingent labor, the solution enables organizations to successfully deliver impactful and measureable results, while leveraging their extended workforce as a strategic component of the overall human capital management strategy. Horizontal marketing system (HMS) Joining of two or more corporations on the same level for the purposes of pursuing a new marketing opportunity. Usually a horizontal marketing system is established so that the individual members can combine resources to make the most out of the marketing situation. Products from each member can be marketed and/or distributed together, such as a bottle manufacturer combining with a producer of dehydrated salad dressing preparations. The two products are marketed together, allowing the two companies to combine their marketing resources and accomplish much more than either one might accomplish alone. Corporations in a horizontal marketing system also have the option of combining their capital and production capabilities, in addition to their marketing and distribution resources, to produce synergistic benefits for all members.
  18. 18. FORMAT OF RETAIL STORES IN INDIA Mom-and-pop Stores These are small family-owned businesses, which sell a small collection of goods to the customers. They are individually run and cater to small sections of the society. These stores are known for their high standards of customer service. Department stores Department stores are general merchandisers. They offer to the customers mid- to high-quality products. Though they sell general goods, some department stores sell only a select line of products. Examples in India would include stores like "Westside" and "Lifestyle"--popular department stores. Category Killers Specialty stores are called category killers. Category killers are specialized in their fields and offer one category of products. Most popular examples of category killers include electronic stores like Best Buy and sports accessories stores like Sports Authority. Malls One of the most popular and most visited retail formats in India is the mall. These are the largest retail format in India. Malls provide everything that a person wants to buy, all under one roof. From clothes and accessories to food or cinemas, malls provide all of this, and more. Examples include Spencer Plaza in Chennai, India, or the Forum Mall in Bangalore. Discount Stores. Discount stores are those that offer their products at a discount, that is, at a lesser rate than the maximum retail price. This is mainly done when there is additional stock left over towards the end of any season. Discount stores sell their goods at a reduced rate with an aim of drawing bargain shoppers.
  19. 19. Supermarkets One of the other popular retail formats in India is the supermarkets. A supermarket is a grocery store that sells food and household goods. They are large, most often self-service and offer a huge variety of products. People head to supermarkets when they need to stock up on groceries and other items. They provide products for reasonable prices, and of mid to high quality. Street vendors Street vendors, or hawkers who sell goods on the streets, are quite popular in India. Through shouting out their wares, they draw the attention of customers. Street vendors are found in almost every city in India, and the business capital of Mumbai has a number of shopping areas comprised solely of street vendors. These hawkers sell not just clothes and accessories, but also local food. Hypermarkets Similar to supermarkets, hypermarkets in India are a combination of supermarket and department store. These are large retailers that provide all kinds of groceries and general goods. Saravana Stores in Chennai, Big Bazaar and Reliance Fresh are hypermarkets that draw enormous crowds. Kiosks Kiosks are box-like shops, which sell small and inexpensive items like cigarettes, toffees, newspapers and magazines, water packets and sometimes, tea and coffee. These are most commonly found on every street in a city, and cater primarily to local residents.
  20. 20. Q7. What is Brand Equity? How can you Build Brand Equity? How can you measure Brand Equity? Brand Equity According to Armstrong and Kotler, brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. (Armstrong & Kotler, 211) Brands with high equity rate win in the marketplace not simply because they deliver unique benefits or reliable service. Rather, they succeed because they forge deep connections with customers. There are four consumer perception dimension to score the brand equity: differentiation (what makes the brand stand out), relevance (how consumers feel it meets their needs), knowledge (how much consumers know about the brand), and esteem (how highly consumers regard and respect the brand). Thus, these brands must be distinct. In simple terms Brand Equity is the added value empowered on products and services. It is reflected by the way consumers think, feel, and act with respect to the brand as well as in the prices, market share and profitability of the brands. How can you Build Brand Equity? Marketers build Brand Equity by creating the right brand knowledge structures with the right consumers. This process depends on all brand related contacts- whether marketer initiated or not. There are three main sets of brand equity drivers:  The initial choices for the brand elements or identities making up the brand (brand name, URLs, symbols, logos, characters, slogans, jingles, signage, etc…)  The product and service and all accompanying marketing activities and supporting marketing programmes.  Other associations indirectly transferred to the brand by linking it to some other entity (a person, place or thing).  Creating High level of Brand Awareness  Developing favorable associations
  21. 21.  Creating emotional connections  Consistent reinforcements How can you measure Brand Equity? Brand equity should be measured in two ways: Internal and external measurement. Internal measurement ensures that employees are living the brand and delivering the desired experience from an organizational alignment perspective. External measurement is measuring to what degree customers and prospects are experiencing your brand in ways that will cause them to become more committed evangelists. The most effective format for external and internal research is a combination of in-depth phone interviews, supported by a larger sample of Web-based surveys to provide statistical legitimacy (depending on size of total population). Another great way to conduct ongoing brand equity checks is to create customer councils that are representative of your customer base. You can regularly solicit information and test ideas to get a good idea of how your customer base will respond. Q8. What is Marketing ROI or Return On Marketing Investment (ROMI)? A Return on Marketing Investment (ROMI) analysis helps organizations understand the effectiveness of their marketing spending. A ROMI analysis examines business results in relation to specific marketing activity. The benefit of this knowledge is that it allows marketers to focus their dollars on programs that provide the greatest return. It is a metric used to measure the overall effectiveness of a marketing campaign to help marketers make better decisions about allocating future investments. ROMI is usually used in online marketing, though integrated campaigns that span print, broadcast and
  22. 22. social media may also rely on it for determining overall success. ROMI is a subset of ROI (return on investment). The findings of ROMI analyses can help determine:  Which marketing activities are most effective? Which ones don’t add value?  In what areas of marketing are spending levels too high? How should funds be reallocated?  What external market conditions (e.g. unemployment) affect marketing’s ability to generate results? How does competitive activity impact the required level of marketing investment?  How should incremental funds be allocated? Marketing ROI Return on investment (ROI) is a measure of the profit earned from each investment. Like the “return” (or profit) that you earn on your portfolio or bank account, it’s calculated as a percentage. In simple terms, the ROI formula is: (Return – Investment) Investment It’s typically expressed as a percentage, so multiple your result by 100. Return on Marketing Investment (ROMI) Return on marketing investment (ROMI) is a metric used to measure the overall effectiveness of a marketing campaign to help marketers make better decisions about allocating future investments. ROMI is usually used in online marketing, though integrated campaigns that span print, broadcast and social media may also rely on it for determining overall success. ROMI is a subset of ROI (return on investment). In the simplest sense, ROMI is measured by comparing revenue gains against marketing investment. This calculation, however, reflects only the direct impact of marketing investment on a business's revenue.
  23. 23. Q9. What is BCG Matrix and what is the purpose of BCG Matrix? What is Ansoff Matrix and the purpose of such a Matrix? What is McKinsey 7’s Framework? BCG Matrix Back in 1968 a clever chap from Boston Consulting Group, Bruce Henderson, created this chart to help organisations with the task of analysing their product line or portfolio. The matrix assess products on two dimensions. The first dimension looks at the products general level of growth within its market. The second dimension then measures the product’s market share relative to the largest competitor in the industry. Analysing products in this way provides a useful insight into the likely opportunities and problems with a particular product. Products are classified into four distinct groups, Stars, Cash Cows, Problem Child and Dog. Lets have a look at what each one means for the product and the decision making process.
  24. 24. Stars (high share and high growth) Star products all have rapid growth and dominant market share. This means that star products can be seen as market leading products. These products will need a lot of investment to retain their position, to support further growth as well as to maintain its lead over competing products. This being said, star products will also be generating a lot of income due to the strength they have in the market. The main problem for product portfolio managers it to judge whether the market is going to continue to grow or whether it will go down. Star product can become Cash Cows as the market growth starts to decline if they keep their high market share. Cash Cows (high share, low growth) Cash cows don’t need the same level of support as before. This is due to less competitive pressures with a low growth market and they usually enjoy a dominant position that has been generated from economies of scale. Cash cows are still generating a significant level of income but is not costing the organisation much to maintain. These products can be “milked” to fund Star products. Dogs (low share, low growth) Product classified as dogs always have a weak market share in a low growth market. These products are very likely making a loss or a very low profit at best. These products can be a big drain on management time and resources. The question for managers are whether the investment currently being spent on keeping these products alive, could be spent on making something that would be more profitable. The answer to this question is usually yes. Problem Child (low share, high growth) Also sometime referred to as Question Marks, these products prove to be tricky ones for product managers. These products are in a high growth market but does not seem to have a high share of the market. The could be reason for this such as a very new product to the market. If this is not the case, then some questions need to be asked. What is the organisation doing wrong? What is competitors doing right? It could be that these products just need more investment behind them to become Stars.
  25. 25. A completed matrix can be used to assess the strenght of your organisation and its product portfolio. Organisations would ideally like to have a good mix of cash cows and stars. There are four assumptions that underpin the Boston Consulting Group Matrix: 1. If you want to gain market share you will need to invest in a competitive package, especially through the investment in marketing 2. Market share gains have the potential to generate a cash surplus due to the effect of economies of scale. 3. The maturity stage of the product life cycle is were any cash surplus is most likely to be generated 4. The best opportunities to build a strong market position usually occur during a market’s growth period. We hope that you have found this information useful. This theory forms part of the syllabus for some of the CIM courses that we offer. Please have a look at these if you would like to further your marketing knowledge and skills. Ansoff Matrix The Ansoff Growth matrix is another marketing planning tool that helps a business determine its product and market growth strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the Ansoff product/market matrix is a series of suggested growth strategies which set the direction for the business strategy. These are described below:
  26. 26. Market penetration Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. Market penetration seeks to achieve four main objectives:  Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling  Secure dominance of growth markets  Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors  Increase usage by existing customers – for example by introducing loyalty schemes A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good
  27. 27. information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research. Market development Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including:  New geographical markets; for example exporting the product to a new country  New product dimensions or packaging: for example  New distribution channels (e.g. moving from selling via retail to selling using e-commerce and mail order)  Different pricing policies to attract different customers or create new market segments Market development is a more risky strategy than market penetration because of the targeting of new markets. Product development Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on:  Research & development and innovation  Detailed insights into customer needs (and how they change)  Being first to market Diversification
  28. 28. Diversification is the name given to the growth strategy where a business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding. What is McKinsey 7’s Framework? The McKinsey 7’s framework is a popular model used in organizations to analyse the environment to investigate if the company is achieving its intended objectives. The model proposes 7 interdependent factors – 3 hard ‘S’ i.e. strategy, structure, systems; and 4 soft ‘S’ i.e. shared values, skills, style and staff. The hard ‘S’ are more tangible, easily to define and easy to influence than the soft ‘S’. Strategy It refers to the intended sequence of actions taken by a company to achieve its goals and objectives. It deals with resource allocation and includes competition, customers and the environment. Structure It refers to how the various business units are structured and how they communicate with each other. A company’s structure may be centralized or decentralized or may take many other forms depending on the company’s culture and values. Systems This includes a host of systems within an organization that define its processes and routines. It includes performance appraisal system, financial systems, IT systems etc. Shared values
  29. 29. These are the core values of the company that connect all the other 6 factors. These are the fundamental ideas or guiding principles that lay the foundation of businesses. Skills These define the core competencies of the employees. Style This spans the core beliefs, norms and management style in the organization. Staff It refers to the number and type of employees in the organization. It is very important for an organization to manage its human capital to create competitive advantage. Q10. What is an SBU? What is a Value Chain? What is Supply Chain Management? SBU Strategic business unit (SBU) is a profit centre which focuses on product offering and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity. An SBU may be a business unit within a larger corporation, or it may be a business into itself. Corporations may be composed of multiple SBUs, each of which is responsible for its own profitability. SBUs are able to affect most factors which influence their performance. Managed as separate businesses, they are responsible to a parent corporation. KEY POINTS  An SBU is a semi-autonomous unit that is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting.  An SBU may be a business unit within a larger corporation or it may be a business unto itself. Corporations may be composed of multiple SBUs, each of which is responsible for its own profitability.
  30. 30.  Factors that determine the success of an SBU include the degree of autonomy given to each SBU manager, the degree to which an SBU shares functional programs and facilities with other SBUs, and the manner in which the corporation adapt to new changes in the market. General Electric is an example of a company with this sort of business organization. General Electric has 49 SBUs. What is a Value Chain? A value chain is the whole series of activities that create and build value at every step. The value chain is made of primary activities and support activities. Primary involves inbound logistics (getting the material in for adding value by processing it), operations (which are all the processes within the manufacturing), outbound (which involves distribution to the points of sale), marketing and sales (which go sell it, brand it and promote it) and after sale service.
  31. 31. What is Supply Chain Management? Supply chain management is a cross-function approach including managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end-consumer Q11. What is CRM? What is “Share of Wallet”? What is Customer Life Time Value? CRM stands for Customer Relationship Management. Itis the process of carefully managing detailed information about individual customers and all customer ‘touch- points’ to maximize loyalty of customers. It entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. While the phrase customer relationship management is most commonly used to describe a business-customer relationship, CRM systems are used in the same way to manage business contacts, clients, contract wins and sales leads. CRM is often thought of as a business strategy that enables businesses to:  Understand the customer  Retain customers through better customer experience  Attract new customer  Win new clients and contracts  Increase profitably  Decrease customer management costs Customer relationship management solutions provide you with the customer business data to help you provide services or products that your customers want, provide better customer service, cross-sell and up sell more effectively, close deals, retain current customers and better understand who your customers are.
  32. 32. Share-of-wallet (SOW) is a survey method used in performance management that helps managers understand the amount of business a company gets from specific customers. Another common definition is the following: Share of Wallet is the percentage ("share") of a customer's expenses ("of wallet") for a product that goes to the firm selling the product. Different firms fight over the share they have of a customer's wallet, all trying to get as much as possible. Typically, these different firms don't sell the same but rather ancillary or complementary product. Investopedia defines it as - ‘A marketing term referring to the amount of the customer's total spending that a business captures in the products and services that it offers. Increasing the share of a customer's wallet a company receives is often a cheaper way of boosting revenue than increasing market share.’ In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. The prediction model can have varying levels of sophistication and accuracy, ranging from a crude heuristic to the use of complex predictive analytics techniques. The purpose of the customer lifetime value metric is to assess the financial value of each customer. CLV applies the concept of present value to cash flows attributed to the customer relationship. CLV will represent the single lump sum value today of the customer relationship. Even more simply, CLV is the dollar value of the customer relationship to the firm. It is an upper limit on what the firm would be willing to pay to acquire the customer relationship as well as an upper limit on the amount the firm would be willing to pay to avoid losing the customer relationship. If we view a customer relationship as an asset of the firm, CLV would present the dollar value of that asset.
  33. 33. One of the major uses of CLV is customer segmentation, which starts with the understanding that not all customers are equally important. CLV-based segmentation model allows the company to predict the most profitable group of customers, understand those customers' common characteristics, and focus more on them rather than on less profitable customers. CLV-based segmentation can be combined with a Share of Wallet (SOW) model to identify "high CLV but low SOW" customers with the assumption that the company's profit could be maximized by investing marketing resources in those customers. CLV represents exactly how much each customer is worth in monetary terms, and therefore exactly how much a marketing department should be willing to spend to acquire each customer, especially in direct response marketing. Q12. What is a Value Proposition? Explain in detail with Examples? A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. Value proposition is a clear statement that explains how your product solves customers’ problems or improves their situation (relevancy), delivers specific benefits (quantified value), tells the ideal customer why they should buy from you and not from the competition (unique differentiation). To create an effective value proposition, an organization should first determine exactly what benefits a customer wants and how much the customer is willing to pay for them. The phrase "value proposition" is credited to Michael Lanning and Edward Michaels, who first used the term in a 1988 staff paper for the consulting firm McKinsey and Co. In the paper, which was entitled "A business is a value delivery system," the authors define value proposition as "a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits."
  34. 34. Q13. What is a Promotional Mix? What is IMC and what are its tools? Promotional Mix Promotional Mix is a strategy that integrates all the promotional measures/ elements to spread awareness for the product or service and to deliver a clear message to the target audience. It is almost same as IMC. There are seven main elements in a promotional mix. They are: 1. Advertising - Any paid form of non-personal communication through mass media about a service or product or an idea by a sponsor is called advertising. It is done through non personal channels or media. Print advertisements, advertisements in Television, Radio, Billboard, Brouchers and Cataloges, Direct mails, In-store display, motion pictures, emails, banner ads, web pages, posters are some of the examples of advertising. Paid promotion and presentation of goods, services, ideas by a sponsor comes under the advertisement. 2. Personal Selling – This is a process by which a person persuade the buyer to accept a product or a point of view or convince the buyer to take specific course of action through face to face contact. It is an act of helping and persuading through the use of oral presentation of products or services. Target audience may very from product to product and situation to situation. In other words personal selling is a person to person process by which the seller learns about the prospective buyer's wants and seeks to satisfy them by making a sale. Examples: Sales Meetings, sales presentations, sales training and incentive programs for intermediary sales people, samples and telemarketing etc. It can be of face-to-face or through telephone contact. 3. Publicity: Non-personal stimulation of demand for a product, service or business unit by generating commercially significant news about it in published media or obtaining
  35. 35. favourable presentation of it on radio, television or stage. Unlike advertising, this form of promotion is not paid for by the sponsor. Thus, publicity is news carried in the mass media about an organization, its products, policies, actions, personnel etc. It can originate with the media or the marketer, and is published or broadcast at no charge for media space and time. Examples: Magazine and Newspaper articles/reports, radio and televison presentations, charitable contributions, speeches, issue advertising, and seminars. Publicity can be favourable (positive) or unfavourable (Negative). The message is in the hands of media and not controlled by the organization/firm. 4. Sales promotion – It is any activity that offers an incentive for a limited period to obtain a desired response from the target audience or intermediaries which includes wholesalers and retailers. It stimulate consumer demand, market demand and improve product availability. Examples: Contests, product samples, Coupons, sweepstakes, rebates, tie- ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions. 5 Corporate image – It is important to create a good image in the sight of general public as the Image of an organization is a crucial point in marketing. If the reputation of a company is bad, consumers are less willing to buy a product from this company as they would have been, if the company had a good image. 6 Exhibitions Exhibitions provide a chance to try the product by the customers. It is an avenue for the producers to get an instant response from the potential consumers of the products. 7 Direct Marketing It is reaching the customer without using the traditional channels of advertising such as radio, newspaper, television etc. This type of marketing reach the targeted consumers with techniques such as promotional letters, street advertising, catalogue distribution, fliers etc
  36. 36. What is IMC and what are its tools? IMC The American Marketing Association defines Integrated Marketing Communications (IMC) as “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” The IMC planning process has been compared to composing a musical score. In a piece of music, while every instrument has a specific task, the goal is to have them come together in a way that produces beautiful music. It’s the same in IMC, where advertising might be your violin, social media your piano, public relations your trumpet and so on. Integrated marketing communication tools Integrated marketing communication effectively integrates all modes of brand communication and uses them simultaneously to promote various products and services among customers effectively and eventually yield higher revenues for the organization. Tools of IMC
  37. 37. Advertising Advertising is one of the most effective ways of brand promotion. Advertising helps organizations reach a wider audience within the shortest possible time frame. Advertisements in newspaper, television, Radio, billboards help end-users to believe in your brand and also motivate them to buy the same and remain loyal towards the brand. Advertisements not only increase the consumption of a particular product/service but also create brand awareness among customers. Marketers need to ensure that the right message reaches the right customers at the right time. Be careful about the content of the advertisement, after all you are paying for every second. Sales Promotion Brands (Products and services) can also be promoted through discount coupons, loyalty clubs, membership coupons, incentives, lucrative schemes, attractive packages for loyal customers, specially designed deals and so on. Brands can also be promoted effectively through newspaper inserts, danglers, banners at the right place, glorifiers, wobblers etc. Direct Marketing Direct marketing enables organizations to communicate directly with the end-users. Various tools for direct marketing are emails, text messages, catalogues, brochures, promotional letters and so on. Through direct marketing, messages reach end-users directly. Personal Selling Personal selling is also one of the most effective tools for integrated marketing communication. Personal selling takes place when marketer or sales representative sells products or services to clients. Personal selling goes a long way in strengthening the relationship between the organization and the end-users. Personal selling involves the following steps: 1. Prospecting - Prospecting helps you find the right and potential contact.
  38. 38. 2. Making first contact - Marketers need to establish first contact with their prospective clients through emails, telephone calls etc.An appointment is essential and make sure you reach on time for the meeting. 3. The sales call - Never ever lie to your customers. Share what all unique your brand has to offer to customers. As a marketer, you yourself should be convinced with your products and services if you expect your customers to invest in your brand. 4. Objection handling - Be ready to answer any of the client’s queries. 5. Closing the sale - Do not leave unless and until you successfully close the deal. There is no harm in giving customers some time to think and decide accordingly. Do not be after their life. Q14. What is Media Planning and Media Buying? What is the difference between “Above-the-line” (ATL) and “Below-the-line” (BTL) Advertising? What is Media Planning? Media planning is an art and science of ensuring that the advertisements of the clients which they want to place should appear in the right place at the right time to ensure that they reach the correct target group. Media Buying Media buying is an art of ensuring that the client’s advertisements appear where they want them to be and they pay the best possible price. What is the difference between “Above-the-line” (ATL) and “Below-the-line” (BTL) Advertising? Above The Line (ATL) and Below The Line (BTL) are the two strategies in marketing. Both of these are related to the nature of promotional activities done by companies. Above the Line promotions refers to all promotional activities done by companies through mass media. In common words’, advertising is the major ATL activity and all other form of promotions except direct marketing falls in below the line marketing strategy.
  39. 39. Above The Line (ATL) advertising is where mass media is used to promote brands and reach out to the target consumers. These include conventional media as we know it, television and radio advertising, print as well as internet. This is communication that is targeted to a wider spread of audience, and is not specific to individual consumers. ATL advertising tries to reach out to the mass as consumer audience. Below the line (BTL) advertising is more one to one, and involves the distribution of pamphlets, handbills, stickers, promotions, brochures placed at point of sale, on the roads through banners and placards. It could also involve product demos and samplings at busy places like malls and market places or residential complexes. For certain markets, like rural markets where the reach of mass media like print or television is limited, BTL marketing with direct consumer outreach programmes do make the most sense. Other BTL activities could include roadshows, or moving hoardings with the ad of the product, and vehicles with promotional staff interacting with people demonstrating the product and distributing literature on the product. BTL advertising is advertising that uses less conventional methods of advertising that the specific channels of advertising that may or may not be used by ATL advertising to promote products and services. BTL is a preferred tool when test marketing a product, sampling and also in case of a targeted campaign in related to another bigger phenomenon. Also when TG is very niche, BTL makes more sense. Sometimes BTL is preferred over ATL due to budget issues, the need to physically display the product, to conduct a hand on product contest as well as for new launches and teasers campaigns. When you are communicating with a niche audience BTL is better. However, digital media has more or less broken these boundaries of ATL versus BTL as digital communication can address both at the same time.
  40. 40. Q15. What is Advertising? What are the Principles of Advertising? What is the difference between Advertising and PR and Publicity? “Advertising is the non-personal communication of information usually paid for and usually persuasive in nature about products, services or ideas by identified sponsors through the various media.” Principles of Advertising by Advertising Legend Bill Bernbach. 1. Go to the essence of the product. State the product's essence in the simplest terms of its basic advantage. And state this both tangibly and memorably. 2. Where possible, make your product an actor in the scene; not just a prop. This makes for a tremendously effective method of getting your product remembered. Because the provocative element in your advertising is also the element that sells your product. This is so simply stated, so difficult to execute. 3. Art and copy must be fully integrated. They must be conceived as a unit, developed as a unit. 4. Advertising must have vitality. This exuberance is sometimes called "personality". When advertising has a personality, it is persuasively different; and it is the one because of the other. You must fight to get "bounce" in your advertising. 5. It is little less than useless to employ a so-called gimmick in advertising —- unless the gimmick itself tells the product story. 6. Tell the truth. First, it's a great gimmick. Second, you go to heaven. Third, it moves merchandise because people will trust you. 7. Be relevant. A wonderfully creative execution will get the big "So what" if it isn't meaningful to their life, family, business etc. And always opt for an ad that's relevant over one that's exciting and irrelevant. 8. Be simple. Not simpleminded, but single minded. Who has the time or the desire to listen to advertising? 9. Safe ideas can kill you. If it's been done before, your competition will be ready for it. Your only chance of beating the competition is with advertising they've never seen before. Which means you've never seen it before either! Be brave. 10. Stand out. If your advertising goes unnoticed, everything has been wasted.
  41. 41. Advertisement is a paid, non-personal public communication about ideas, goods or services through means such as direct mail, print, radio, television and internet. Public Relations is the practice of managing the spread of information between the organization and the public. It focuses on promoting the image of the company. Publicity is a simple act of making a suggestion to a journalist that leads to the inclusion of a company or product in a story. Newspapers, Magazines, TV programmes and Radio shows have large amount of spaces to fill and depend upon publicist to help provide story ideas, interview subjects, background information and other materials. Difference between Advertising and Publicity: 1. Advertising is a paid form of ideas, goods and services while publicity is not paid by the sponsor. 2. Advertising comes from an identified sponsor while publicity comes from a neutral and impartial source. 3. Advertising is controllable by the organization while publicity is not controllable because it comes from a neutral source. 4. Advertising is less credible in comparison to publicity while publicity is more credible because it comes from an impartial source. 5. Advertising is what you or your organization says and promotes about you or your organization but publicity is what others say about you or your organization. 6. In advertising same content is repeated by the sponsor while in publicity it is not generally possible. 7. Advertising always carries a positive message about your organization because it is the content you pay for but publicity can be positive or negative because it comes from an impartial source.
  42. 42. 8. In advertising you have full chance to show your creativity but in publicity creativity is limited because it comes from non-paid source. 9. Advertising is targeted to the particular audiences by the sponsor while in publicity it is not focused. 10. Most of the times in advertising social responsibility is ignored while in publicity special focus is given on social responsibility. Difference between Advertising and PR: 1. Paid Space or Free Coverage Advertising: The company pays for ad space. You know exactly when that ad will air or be published. Public Relations: Your job is to get free publicity for the company. From news conferences to press releases, you're focused on getting free media exposure for the company and its products/services. 2. Creative Control Vs. No Control Advertising: Since you're paying for the space, you have creative control on what goes into that ad. Public Relations: You have no control over how the media presents your information, if they decide to use your info at all. They're not obligated to cover your event or publish your press release just because you sent something to them. 3. Shelf Life
  43. 43. Advertising: Since you pay for the space, you can run your ads over and over for as long as your budget allows. An ad generally has a longer shelf life than one press release. Public Relations: You only submit a press release about a new product once. You only submit a press release about a news conference once. The PR exposure you receive is only circulated once. An editor won't publish your same press release three or four times in their magazine. 4. Wise Consumers Advertising: Consumers know when they're reading an advertisement they're trying to be sold a product or service. "The consumer understands that we have paid to present our selling message to him or her, and unfortunately, the consumer often views our selling message very guardedly," Paul Flowers, president of Dallas-based Flowers & Partners, Inc., said. "After all, they know we are trying to sell them." Public Relations: When someone reads a third-party article written about your product or views coverage of your event on TV, they're seeing something you didn't pay for with ad dollars and view it differently than they do paid advertising. "Where we can generate some sort of third-party 'endorsement' by independent media sources, we can create great credibility for our clients' products or services," Flowers said. 5. Creativity or a Nose for News Advertising:
  44. 44. In advertising, you get to exercise your creativity in creating new ad campaigns and materials. Public Relations: In public relations, you have to have a nose for news and be able to generate buzz through that news. You exercise your creativity, to an extent, in the way you search for new news to release to the media.