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Interview questions for Marketing--must read


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This document provides you the brief answering about the very important marketing questions and answers which will be very important in the " Interview perspective"

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Interview questions for Marketing--must read

  1. 1. 1 1) What is marketing? Marketing is defined as to understand the needs of the customers and fulfill their needs with our product/ services. Marketing includes all types of advertisements, branding, selling, and proper-segmentation of the market to meet the desired customer of our products and ensure profitability for the company. Marketing vs Sales: Marketing and sales are both activities aimed at increasing revenue. They are so closely inter-related that people often don’t realize the difference between the two. Marketing activities include consumer research (to identify the needs of the customers), product development (designing innovative products to meet existing or latent needs), advertising the products to raise awareness and build the brand. The typical goal of marketing is to generate interest in the product and create leads or prospects. Sales activities are focused on converting prospects to actual paying customers. Sales involves directly interacting with the prospects to persuade them to purchase the product. Activity Marketing Sales Approach Determine future needs and has a strategy in place to meet those needs for the long term relationship. Makes customer demand match the products the company currently offers. Process One to many one to one Focus Fulfill customer's wants and needs through Fulfill sales volume objectives
  2. 2. 2 products and/or services the company can offer. Time- period Longer term Short term Scope Identifying customer needs (research), creating products to meet those needs, promotions to advertise said products. Once a product has been created for a customer need, persuade the customer to purchase the product to fulfill her needs Strategy Pull Push Priority Marketing shows how to reach to the Customers and build long lasting relationship Selling is the ultimate result of marketing. Identity Marketing targets the construction of a brand identity so that it becomes easily associated with need fulfillment. Sales is the strategy of meeting needs in an opportunistic, individual method, driven by human interaction. There's no premise of brand identity, longevity or continuity. It's simply the ability to meet a need at the right time.
  3. 3. 3 Why marketing is important to organization? The success of your business lies in its marketing. Most aspects of your business depend on successful marketing. The overall marketing covers advertising, public relations, promotions and sales. Marketing is a process by which a product or service is introduced and promoted to potential customers. Without marketing, your business may offer the best products or services in your industry, but none of your potential customers would know about it. Without marketing, sales may crash and companies may have to close. It helps your business in several aspects like:  Increasing the sales  Company reputation  To grab the customers  To communicate highly about your product with the public What are 4 P’s of marketing mix?  The right product  sold at a right price  in the right place  with the suitable promotion 7P’s of service marketing It includes marketing mix + 3 P’s  by doing it in a right process  with pleasing physical evidence  to reach the right people
  4. 4. 4 What is the difference between Marketing a Good (tangible product) and Marketing a Service? Marketing a tangible product is completely different from marketing a service. Both are having one common quality I.e. to buy the product/to get the service from a particular company, one should trust the company. Otherwise the company has to close its operations. Activity Product service TIME When you sell a product, there is time invested to create or acquire the product and then it is sold again and again without further time invested. Selling a service also means you're selling your time. Services by their very nature are time-intensive activities because there is no way to continue providing a service without continuing to invest time performing the service. DELIVERABILITY When you're marketing products, you can give customers a delivery date estimate if they're ordering online or through the mail, and Services must be created after they're ordered, and delivery times will vary. The challenge with marketing services is being able to convince
  5. 5. 5 they can walk out the door with the product customers that you can and will deliver quality results within a given period of time RELATIONSHIP Marketing a product is based on the Needs and wants of the customer Marketing a service is completely based on the relationship and trust with the customers 2 .What is positioning? Positioning refers to the perception of a product in the minds of consumer in relation to its competing product. Positioning map is a graphical device to study and analyze the positions or perception of each of a group of competing products in respect of two specific product characteristic. Example: Apple products have a very different market positioning than Dell because Apple products are known as expensive, but innovative technology pieces while Dell products are more known as less expensive, but reliable products Positioning map: It is a basically a graph that represents the strength or extent of the two product characteristics on x and y-axis. Example: To find relative position of different brands of cars in respect of customer perception of superiority of their styling and technical features, the graph may represent the styling attractiveness of the model along x-axis and technical superiority along y-axis. Then each of the model to be plotted on this graph according to the assessment of customer perception in respect of these two characteristics.
  6. 6. 6 What is FCB grid? FCB Grid helps direct both our creative strategy and our media strategy as it clarifies how consumers approach the buying process for different products. This process is driven by the type of product. POINT OF PARITY: Points of parity are those elements that are considered mandatory for a brand to be considered a legitimate competitor in its specific category. It is what makes consumer consider your brand, along with your competitors. So before you work on identifying your competitive advantage, you want to make sure you identify what it takes to be a player in your category. POINTS OF DIFFERENTIATION: Points of differentiation are the attributes that make your brand unique. It is your competitive advantage. It is what your brand slogan should reflect.
  7. 7. 7 What is branding? Branding is one of the most important aspects of any business, large or small, retail or B2B. An effective brand strategy gives you a major edge in increasingly competitive markets Simply put, your brand is your promise to your customer. It tells them what they can expect from your products and services, and it differentiates your offering from your competitors'. Your brand is derived from who you are, who you want to be and who people perceive you to be. Are you the innovative maverick in your industry? Or the experienced, reliable one? Is your product the high-cost, high-quality option, or the low- cost, high-value option? You can't be both, and you can't be all things to all people. Who you are should be based to some extent on who your target customers want and need you to be. Visualizing POP and POD
  8. 8. 8 The foundation of your brand is your logo. Your website, packaging and promotional materials--all of which should integrate your logo-- communicate your brand. 3. What is segmentation? A group of people that share one or more characteristics. Each market segment is unique and marketing managers decide on various criteria to create their target market(s). They may approach each segment differently, after fully understanding the needs, lifestyles, demographics and personality of the target. To meet the most basic criteria of a market segment, three characteristics must be present:  Homogeneity (common needs within segment)  Distinction (unique from other groups)  Reaction (similar response to market) Example: interests, lifestyle, age, gender, race, marital status, education status, income. Segmentation is based on  Geographic  Demographic  Psychographic  Behavioral What is target marketing? A target market can be separated from the market as a whole by geography, buying power and demographics, as well as by psychographics.
  9. 9. 9 Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. It can be the key to a small business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. It provides a focus to all of your marketing activities. While market segmentation can be done in many ways, depending on how you want to slice up the pie, three of the most common types are:  Geographic – based on location such as home addresses;  Demographic – based on measurable statistics, such as age or income;  Psychographic – based on lifestyle preferences, such as being urban dwellers or pet lovers. What is a target group? Target group is a particular group on whom the company is targeted to sell their products directly/indirectly to those group of people. Target market: A target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise. A well-defined target market is the first element to a marketing strategy. The target market and the marketing mix variables of product, place(distribution), promotion and price are the four elements of a marketing mix strategy that determine the success of a product in the marketplace. Once these distinct customers have been defined, a marketing mix strategy of product, distribution, promotion and price can be built by the business to satisfy the target market Target audience: A target audience, is a specific group of people within the target market at which a product or the marketing message of a product is aimed at. A target
  10. 10. 10 audience can be formed of people of a certain age group, gender, marital status, etc., e.g. teenagers, females, single people, etc. A combination of factors, e.g. men aged 20–30 is a common target audience. Other groups, although not the main focus, may also be interested. Example: If a company sells new diet programs for men with heart disease problems (target market) the communication may be aimed at the spouse (target audience) who takes care of the nutrition plan of her husband and child. 4. What is a product? A product is a good/service that can be offered to a market to satisfy the need or want of a customer. Core product – This is the end benefit for the buyer and answers the question: What is the buyer really buying? Example: The buyer of a car is buying a means of transport, the buyer of an aspirin is buying pain relief and the buyer of financial advice is hoping to buy financial security and peace of mind. Formal product – This is the actual physical or perceived characteristics of your product including its level of quality, special features, styling, branding and packaging. Augmented product – The support items that complete your total product offering such as after-sales service, warranty, delivery and installation. Product attributes:  Branding  Labelling  Packaging  Quality  Design  Features  Brand name
  11. 11. 11 Product positioning: Product positioning is the way a product or service is seen by consumers and how they view its important attributes in relation to competitor’s products. Example: A car can be positioned on the basis of style, performance, safety or economy whilst a computer might be positioned on the basis of speed, capacity, and reliability. Total product concept: The importance of service in your product strategy Many businesses underestimate the importance of quality customer service, but consumers today are becoming more educated, more discerning, more demanding, and more aware of their rights, so disregarding the customer service element in your product strategy could be a costly error.
  12. 12. 12 When developing and implementing your customer service policy it’s worth remembering the following points:  Firstly, it’s a well-researched fact that each dissatisfied customer will, on average, tell 15 other people of their negative experience - a satisfied customer will tell no more than 6 so with those odds, you really can’t afford to have too many dissatisfied customers.  Secondly, it’s only loyal customers that take the time to complain - others simply take their business elsewhere - so you should treat a complaint as a golden opportunity by solving it and then going on to cement a positive and ongoing relationship with that customer. What are product mix and product line? Product mix: Product mix also known as product assortment consists of all the product lines and items that a particular seller offers for sale. Avon’s product mix consists of four major product lines: cosmetics, jewelry, fashions, and household items. Each product line consists of several sublines. Product range/mix -> all products which a company is selling It includes four elements: Width assortment: It refers to how many product lines the company markets. Length assortment: It signifies how many products a given line includes. Depth assortment: It touches on how many versions of a given product a line offers. Consistency assortment: It denotes the uniformity relative to how products are used by consumers, or by how they are produced or distributed. Example: An automotive manufacturer could be two product lines "wide:" cars and trucks. The car line "length" could run from sub-compact to full-
  13. 13. 13 size, four or five cars long. Within the car line, their sub-compact could offer a "deep" portfolio: a two-door coupe, a four-door sedan and a hatchback, all offered in base, mid-range, higher-end and sport trim: 12 models. Finally, much of an auto manufacturer’s product mix is consistent in that they use gasoline motors to transport people and goods, and sell via independent franchises. Product line: It is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. Example: Nike produces several lines of athletic shoes, Motorola produces several lines of telecommunications products, and AT&T offers several lines of long-distance telephone services. A company could have one line or several lines, but all the products within this line or lines would be the mix. 5. What are the different types of pricing strategies? PENETRATION PRICING 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 Example: Micromax 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. Example: PlayStation, jewelers, digital technology.
  14. 14. 14 VALUE PRICING Prices set according to perceived value of the product/service and 'willingness to pay' Examples: Include status products/exclusive products like sachin’s autographed cricket bat. LOSS LEADER Goods/services deliberately sold below cost to encourage sales elsewhere Purchases of other items more than covers ‘loss’ on item sold typical in supermarkets PSYCHOLOGICAL PRICING Used to play on consumer perceptions Example: - Rs. 999 instead of Rs. 1099 GOING RATE (PRICE LEADERSHIP) Leading the way in determining prices Common in oligopolies Example: Pepsi, Sbi TENDER PRICING Firm (or firms) submit their price for carrying out the 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 to prevent new entrants. Example: Intel, Walmart ABSORPTION/FULL COST PRICING:
  15. 15. 15 Full Cost pricing: Attempting to set price to cover both fixed and variable costs. Absorption Cost Pricing: Price to set absorb some of the fixed costs of absorption. Marginal Cost Pricing: Setting the price of a product to equal the extra cost of producing an extra unit of output. Mostly used during the period of low sales. Particularly relevant in transport where fixed costs may be relatively high. Example: Aircraft flying from Delhi to Mumbai. Total cost including normal profit- Rs.15000 of which Rs.13000 is fixed cost. Number of seats=160 Average price= Rs.93.75 MC of each passenger=2000/160 =Rs.12.50 If flight is not full, better to offer passengers chance of flying at Rs.12.50 and fill the seat than not fill it all. CONTRIBUTION PRICING: Contribution=Selling price-variable (direct costs) prices to ensure coverage of all variable costs and a contribution to the fixed costs. TARGET PRICING: Setting price to target a specified profit level estimates the cost and potential revenue at different prices. COST-PLUS PRICING: Selling price= cost of production + profit % Variable & Fixed cost + markup%= price
  16. 16. 16 INFLUENCE OF ELASTICITY: Degree of price elasticity impacts on the level of sales and hence revenues (%change in quantity demanded)/ (% change in price) 6. What is the role of “place” in marketing mix? Marketing mix refers to the right mixture of marketing factors with the aim of achieving the best results that will help a company sell products under consideration. Marketing mix includes price, place, promotion and product. These four marketing factors have established economic principles or conditions that have to be met in order to achieve maximum sales. The role of place in the marketing mix is its importance as a means of deciding the best channels for effectively getting the goods to the customer. Place (or its more common name “distribution”) is about how a business gets its products to the customers. The objective of distribution is clear. It is to make products available in the right place at the right time in the right quantities. Distribution matters for a business of any size, it is a crucial part of the marketing mix. It is one thing having a great product, sold at an attractive price. But what if: • Customers are not near a retailer that is selling the product? • A competing product is stocked by a much wider range of outlets? • A competitor is winning because it has a team of trained distributors or sales agents who are out there meeting customers and closing the sale? You can see from the above that getting distribution right is a key part of being competitive. Distribution is achieved by using one or more distribution channels, including:
  17. 17. 17 • Retailers • Wholesalers • Distributors / Sales Agents • Direct (e.g. via e-commerce) What is a VMS and HMS? A vertical marketing system, or VMS, is a business system that aims to achieve better efficiency and economies of scale. In the vertical marketing system, independent companies within related industries work together and eliminate conflict. Horizontal marketing systems, on the other hand, represent agreements across different industries. Vertical marketing is a joining of manufacturers, wholesalers and retailers in the production and distribution process. The VMS includes advertising, promotions and public relations within different but related industries. This process allows businesses to manage and coordinate various companies formally or informally in order to gain a larger market share. The purpose of a VMS is to eliminate competition and conflict that typically arises in the conventional marketing system. This leads to a higher efficiency and reduction in product costs, as companies no longer pursue their individual financial goals. Types of VMS: There are three major types of VMS:  Corporate: In the corporate system, the supply chain components belong wholly or partially to one firm. Forward integration means that a production company owns the retail chain. On the other hand, backward integration occurs when a retail chain owns production
  18. 18. 18  Administered: An administered system implies that there exists one dominant company that controls production and distribution and dictates terms to the suppliers without a formal agreement or ownership.  Contractual: With contractual VMS, independent production and distribution companies come to an agreement to integrate resources for their mutual benefit. Examples of such systems are franchises and cooperatives. Benefits:  The main advantage of VMS is that a centralized management has direct control over all aspects of the business, anticipates problems and makes necessary changes to increase efficiency.  A good communication and coordination is crucial to the success of VMS, as these organizations are larger and their operations are more complex.  VMS applies to both small and large companies. Small businesses benefit from VMS by building a strong relationship with their suppliers, distributors and retailers. Once these small businesses grow, they can start making acquisitions and developing their own vertical marketing systems. Demerits: Employees at the bottom of a vertical structure may feel less valued than those higher up in the chain. Some employees may not relish the accompanying culture of politics, which places heavy emphasis on pleasing the boss. It can also take a great deal of time for top management decisions to filter down through multiple layers, reducing the organization's ability to react quickly to a rapidly changing business climate. Because of the
  19. 19. 19 centralized control of power, weak leadership at the top can hamper the effectiveness of the entire organization. HMS: A horizontal structure differs from a vertical structure in that there are fewer structural layers. Each department consists of several lateral functional areas overseen by an individual known as a product manager or process leader who reports to top management. For example, the product development department may consist of the lateral functional areas of market analysis, research, product planning and product testing. The product manager is responsible for the end result. Advantages:  Employees may attain greater satisfaction in a horizontal structure due to greater freedom and autonomy.  The use of cross-function teams can also lead to high levels of cooperation throughout the organization.  The heavy emphasis on innovation can lead to ideas that keep the organization ahead of the competition.  The absence of multiple structural layers provides streamlined communication and reporting processes, making the organization more nimble and adaptable to change. Disadvantages The decentralized structure could lead to a "loose ship," as the team and project leaders have high levels of responsibility for achieving results but little real authority over their team members.
  20. 20. 20 A resulting lack of control can lead to finger-pointing when things go awry, which can hinder productivity, according to the Practical Management website. Organizations attempting to convert from a vertical to a horizontal structure can face challenges, as management needs to adjust to a less authoritarian and a more peer-like relationship with subordinates. Different formats of retail stores found in India? The term retail institution refers to the basic format or structure of a business. Classification for Retail institutions is necessary to enable firms to better understand and enact their own strategies: selecting an organizational mission, choosing an ownership alternative, defining the goods/ service category and setting objectives. Ownership Based Retailing is one of the few sectors in our economy where entrepreneurial activity is extensive. Although retailers are primarily small (80% of all stores are operated by firms with one outlet and over one-half of all firms have two or fewer paid employees), there are also very large retailers. Retail firms may be independently owned, chain owned, franchisee operated, leased departments, owned by manufacturers or wholesalers, consumer owned. From a positioning and operating perspective, each ownership format delivers unique value. Retail executives must work on the strengths and weaknesses inherent in each of these formats to be successful Independents Also, most of the time these stores save tax as they belong to the small industry Sector
  21. 21. 21 Chains A chain retailer operates multiple outlets (store units) under common. In developed economies, they account for nearly a quarter of retail outlets and over 50 percent of retail sales. Retail chains can range from two stores to retailers with over 1,000 stores. Chain Retailers have several advantages. They enjoy strong bargaining power with suppliers due to the volumes of purchases. They generally bypass wholesalers. Many of them buy directly from the manufacturers. Suppliers service the orders from chains promptly and extend a higher level of proper service and selling support. New brands reach these stores faster. Most of these chains sell private. Chains achieve efficiency due to the centralization of purchasing and warehousing and computerization. Wider geographic coverage of markets allows chains to utilize all forms of media. Most of the chains invest considerable time and resources in long term planning, monitoring opportunities and threats. Chain retailers suffer from limited flexibility, as they need to be consistent throughout in terms of prices, promotions, and product assortments. Chain retailers have high investments in multiple leases, fixtures, product assortments and employees. Due to their spread, these retailers have reduced control, lack of communication and time delays. Thus, such retailers focus on managing a specific retail format for a better strategic advantage and increased profitability. Some chain retailers capitalize on their widely known image and adopt flexibility to market changes. Franchising Franchising is a contractual agreement between a franchiser and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchiser. In a franchise
  22. 22. 22 contract the franchisee pays a lump sum plus a royalty on all sales for the right to operate a store in a specific location. The franchisee also agrees to operate the outlet in accordance with procedures prescribed by the franchisers. The franchiser provides7  assistance in locating and building the store,  Developing the products and/or services sold, management training and advertising. There are two types of franchising: product/ trademark and business format.  In product/ trademark franchising, franchisees acquire the identities of the franchiser by agreeing to sell the latter’s product and/or operate under the latter’s names. But they are independent in their operation. They may draw certain operating rules in consultation with the franchiser.  In a business format franchising arrangement, the two parties have a synergetic relationship. The franchiser provides assistance in strategic and operation issues besides the right to sell goods and services. The franchisees can take advantage of prototype stores, standardized product lines and cooperative advertising. Three structural arrangements are found in retail franchising. (a) Manufacturer- Retailer; where a manufacturer the right to sell goods and related services through a licensing agreement as in the case of automotive dealers and petroleum products dealers. (b) Wholesaler- retailer; which may take the form of a voluntary franchise system as in consumer electronic stores or co-operative where a group of retailers set up a franchise system and share the ownership and operations of a wholesaling organization.
  23. 23. 23 (c) Service sponsor retailer, where a service firm licenses individual retailers to let them offer specific service package to consumers, such as auto rental, hotels and fast food restaurants. This arrangement has several advantages.  Individual franchisees can own retail enterprises with relatively small capital investments.  Franchisers gain a national or global presence quickly and with less investment. It improves cash flow as money is obtained when goods are delivered rather than when they are sold.  Since franchisees are owners and not employees, they have a greater incentive to work hard. Franchisees may also have to face certain disadvantages.  Over saturation could occur adversely affecting the sales and profits of each unit.  They may enter into contract provisions that give the franchisers undue advantage. They can exclude franchisees Supermarkets: A supermarket, a large form of the traditional grocery store, is a self- service shop offering a wide variety of food and household products, organized into aisles. It is larger in size and has a wider selection than a traditional grocery store, but is smaller and more limited in the range of merchandise than a hypermarket or big-box market. The traditional supermarket occupies a large amount of floor space, usually on a single level. It is usually situated near a residential area in order to be convenient to consumers. The basic appeal is the availability of a broad selection of goods under a single roof, at relatively low prices. Other advantages include ease of parking and frequently the convenience of shopping hours that extend into the evening or even 24 hours a day.
  24. 24. 24 Supermarkets usually allocate large budgets to advertising, typically through newspapers. They also present elaborate in-shop displays of products. Supermarkets typically are supplied by the distribution centers of their parent companies, usually in the largest city in the area. Supermarkets usually offer products at relatively low prices by using their buying power to buy goods from manufacturers at lower prices than smaller stores can. They also minimize financing costs by paying for goods at least 30 days after receipt and some extract credit terms of 90 days or more from vendors. Certain products (typically staple foods such as bread, milk and sugar) are very occasionally sold as loss leaders, that is, with negative profit margins so as to attract shoppers to their store. Hypermarkets: A retail store that combines a department store and a grocery supermarket. Often a very large establishment, hypermarkets offer a large variety of products such as appliances, clothing and groceries Hypermarkets offer shoppers a one-stop shopping experience. The idea behind this big box store is to provide consumers with all the goods they require, under one roof. Some of the more popular hypermarkets include the Wal-Mart Supercenter, Fred Meyer and Super Kmart. Hypermarkets, like other big-box stores, typically have business models focusing on high-volume, low-margin sales Because of their large footprints, many hypermarkets choose suburban or out-of-town locations that are easily accessible by automobile. Departmental stores: A departmental store is a large retail trading organization. It has several departments, which are classified and organized accordingly. Departments are made as per different types of goods to be sold. For example, individual
  25. 25. 25 departments are established for selling packed food goods, groceries, garments, stationery, cutlery, cosmetics, medicines, computes, sports, furniture, etc., so that consumers can purchase all basic household requirements under one roof. It provides them maximum shopping convenience and therefore, also called as 'Universal Providers' or 'one spot shopping'. The concept of a departmental store first originated in France. All departments are run under the same ownership, management and control. Each department is an independent unit as far as a sale of any specific product and its varieties are concerned. The main aim of every departmental store is to provide and fulfill all requirements of their customers at one place along with comforts and facilities which a small scale retailer cannot provide. Here all goods which are available under one roof are sold on a cash basis. Features:  Departmental Store is located in the center of a city  Departmental Store offers a wide variety of goods  Departmental Store means shopping under one roof  Departmental Store offers quality goods and services  Departmental Store has a high operational cost  Departmental Store diffuses the risk of loss 7. What is brand equity? Brand equity is how your customer recognizes why you are different and better than the alternative. Brand equity is built on that customer's direct experience with your product or service. This experience, repeated over time, creates equity or value in your brand. And it serves as a shorthand in the buyer's mind that separates you from everyone else.
  26. 26. 26 Brand equity is what creates loyalty that carries beyond price or the occasional product or service bump in the road. It is the quality that motivates your customers to recommend their friends or colleagues to you. How to build brand equity?  Clarify your position The first step to building brand equity is to define your positioning: the single thing your company stands for to your customers. Single is the operative word here. Good positioning forces hard choices. A simple one that I like is the Positioning XYZs: "We are the only X that solves Y problem in Z unique way." X is the category of the company, product, or service or other offering you've chosen to own. Y is the unmet need of your target audience. Z is the differentiation, advantage, or key positive distinction you have over your competition  Tell your story All brands are stories, and a good way to get started is to document and share your best corporate stories: the founding insight of the company, the times you went to extraordinary lengths to take care of a customer, or the background behind the big product breakthrough. The good news is that with ubiquitous broadband access and Web-based applications, it is within every company's grasp to share these stories more broadly through rich-media video and audio.
  27. 27. 27  Bring into your life Once you have the story, you need to bring it to life. Make sure that the way your company looks and feels to the outside world matches that truth. This leads to questions about your corporate identity: Do the basics (starting with your name and logo) make the impression you want? And your broader system for communicating to the market: Web site, brochures, your retail environment.  Start building brand before they buy Think beyond the transaction. Brands begin at the transaction level, but the brand experience goes much deeper. The opportunity to create a brand impression starts long before the buying decision. The principle is a simple one: Give away an artifact of your brand for free. In the professional services world, this means a taste of your service or your intellectual property.  Measure your efforts o Ask your customers o Check your search rankings o Monitor the social media conversation How to measure brand equity?
  28. 28. 28 A Brand Development Model is a diagnostic tool that integrates many proven metrics into a framework that guides strategy. Marketers need to consider six stages of development for a brand, each equating to a different marketing priority, starting with creating basic awareness and concluding with building customer loyalty. The following identifies these stages, recommended metrics, and strategy implications for brand management.  Brand should be Recognizable  Brand should be Memorable  Brand should be Viewed with Favor  Brand should be Distinctive  Brand should be Preferred  The Market should be Consuming the Brand and be Satisfied
  29. 29. 29 8. What is marketing ROI? 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. The challenge of marketing Marketers face many challenges today, including high growth expectations, cutthroat competition, and the digital and social-media revolution. Embracing MROI as a discipline can help build strong brands that generate improved returns.  Better MROI starts with better objectives that are based in the consumer decision journey (CDJ). Better marketing objectives, in turn, shape better metrics.  Brand messaging is one of the most important determinants of MROI success. It is more important to be clear on the most effective messaging attributes for the given brand objective than it is to have a precisely optimized marketing mix.  Marketing-mix analytics that don’t make sense to the end business user are useless. Marketing-mix models should be informed by industry knowledge, built with transparent assumptions, and delivered in a way that makes sense intuitively to the business user.  Marketing-investment decisions need to factor in both short- and long-term impact. Marketing mix models, for example, can capture only short-term impact and must be augmented with long-term (brand-building) impact estimates.  Future potential is a critical input. Spend should be biased toward future growth, and not just optimized based on past performance.
  30. 30. 30  Ultimately, driving marketing spend effectiveness comes down to capabilities, processes, and talent. Invest in your organization (not just your data) to build and sustain excellence in MROI 9. What is BCG matrix? The BCG matrix, invented by the Boston Consulting Group, is a tool that allows to classify and evaluate the products and services of a business. It is a decision making tool in order to balance the activities of a company among those which make profits, those who ensure growth, those which constitute the future of the firm or those who are its heritage. With this tool one is able to define the development policy of the company. The matrix will position the products/services in two ways: The rate of growth of the market; The market share of a product/service offered facing the competitors  Positioning = the company has to place each of its products/services on the matrix. Thus it is able to obtain information on the market share of the product or service and the market growth.  Creating long-term value = the company should have a product portfolio that includes products with high growth where it is necessary to inject cash and products where growth is weaker but which generate a lot of cash
  31. 31. 31 Question marks They do not generate profits unless the company decides to invest resources to maintain and even increase the market share (become potential stars). They have a high demand for liquidity and the company must ask the question: Invest or give up the product? Stars These are promising products for the company, they even can be considered as leaders of the industry. The strategy is to boost these products by appropriate investments to monitor the growth and maintain a position of strength. These products require a large amount of cash but also contribute to the company's profitability. They are becoming progressively « cash cows » with market saturation.
  32. 32. 32 Cash Cows These are products or services which are mature and which generate interesting profits and cash, but need to be replaced because the future growth will be lower. They must therefore be profitable because they can finance other activities in progress (including « stars » and « question marks ». Dogs These products are positioned in a declining market and highly competitive and that the company wants to get rid of soon as they become too expensive to maintain. The company must minimize the Dogs The company must decide whether it still injects liquidity, otherwise it will eliminate the dogs in the near future. Other possible uses for the BCG Matrix are determining relative market share and the market growth rate of a product line. The BCG Matrix can help determine where a product is in its product life cycle and if there is a possibility of growth for the market or product. What is Ansoff matrix? The purpose of this matrix is to help managers consider how to grow their business through existing or new products or in existing or new markets. In this way he was helping managers to assess the differing degrees of risk associated with moving their organization forward.
  33. 33. 33 Ansoff’s matrix suggests four alternative marketing strategies which hinge on whether products are new or existing. They also focus on whether a market is new or existing. Within each strategy there is a differing level of risk. The four strategies are: 1. Market penetration – This involves increasing market share within existing market segments. This can be achieved by selling more products/services to established customers or by finding new customers within existing markets. 2. Product development – This involves developing new products for existing markets. Product development involves thinking about how new products can meet customer needs more closely and outperform the products of competitors. 3. Market development – This strategy entails finding new markets for existing products. Market research and further segmentation of markets helps to identify new groups of customers. 4. Diversification – This involves moving new products into new markets at the same time. It is the most risky strategy. The more an organization moves away from what it has done in the past the more uncertainties are created. However, if existing activities are threatened, diversification helps to spread risk. Mckinsey’s 7’s framework:
  34. 34. 34 The model is most often used as a tool to assess and monitor changes in the internal situation of an organization. The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example, to help you:  Improve the performance of a company.  Examine the likely effects of future changes within a company.  Align departments and processes during a merger or acquisition.
  35. 35. 35  Determine how best to implement a proposed strategy. Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom. Systems: the daily activities and procedures that staff members engage in to get the job done. Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. Style: the style of leadership adopted. Staff: the employees and their general capabilities. Skills: the actual skills and competencies of the employees working for the company.
  36. 36. 36 10. What is an SBU? A Strategic Business Unit (SBU) is a basic organization unit for which it is meaningful to formulate a separate competitive strategy. Typically the SBU is a business providing a single product or a number of closely related products that serve a well-defined product-market combination and compete with a well-defined set of competitors. General Electric is an example of a company with this sort of business organization. General Electric has 49 SBUs. 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. SCM: Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service
  37. 37. 37 providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service. Supply chain management flows can be divided into three main flows:  The product flow  The information flow  The finances flow The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements. 11. What is CRM? What is ―Share of Wallet‖? What is Customer Life Time Value? Customer Relationship Management is a business strategy that enables organizations to get closer with their customers, to better serve their needs, improve customer service, enhance customer satisfaction and thereby maximize customer loyalty and retention. The present business scenario assigns great emphasis on managing business customers. Organizations are quickly recognizing that in order to survive competition it is important to grab customer attention with unique brand identity and superior service levels. Businesses which initially focused on finance / sales / marketing management are now shifting their priority towards customer relationship management. CRM solutions are flooding the market with easy-to-use tools to manage business customer.
  38. 38. 38 CRM, Customer Relationship Management is a business philosophy towards customers. To focus on their needs and improve customer relationships, with a view to maximize customer satisfaction. It encompasses the variety of technology employed to streamline customer interaction to find, acquire and retain customers Wallet share is a marketing metric used to calculate the percentage of a specific consumer's spending for a type of good or service that goes to a particular company. For example, if a consumer spends Rs: 60 a month at fast food restaurants and Rs: 30 of that amount is spent at McDonald's, McDonald's has a 50% wallet share for that customer. The term is sometimes expressed as share of wallet (SOW). Increasing wallet share is often easier than increasing market share, which is a business' proportion of all the spending in a particular industry or product market. Strategies aimed at gaining wallet share include trying to increase the average amount that a customer spends per visit, encouraging more frequent visits and fostering customer loyalty and retention. Customer Lifetime Value (CLV) is defined as the total dollars flowing from a customer over the entire relationship with that customer. Predicting what a customer is going to spend over their lifetime requires significant statistical analysis. CLV describes the net present value of stream of future profits expected over the customer‘s lifetime purchase. There should always be efforts made to increase CLV of customer. Loyalty economics quantify the differences in customer lifetime value between promoters, detractors and passives. The first step to understanding those differences is quantifying the lifetime value of your average customer. Cost of acquiring customer is very high. 12. What is a Value Proposition? Explain in detail with Examples?
  39. 39. 39 A business or marketing statement that summarizes why a consumer should buy a product or use a service. This statement should convince a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings. 1. All Benefits - Most managers when asked to construct a customer value proposition, simply list all the benefits they believe that their offering might deliver to target customers. The more they can think of the better. This approach requires the least knowledge about customers and competitors and, thus, results in a weaker marketplace effort. 2. Favorable Points of Difference - The second type of value proposition explicitly recognizes that the customer has alternatives and focuses on how to differentiate one product or service from another. Knowing that an element of an offering is a point of difference relative to the next best alternative does not, however, convey the value of this difference to target customers. A product or service may have several points of difference, complicating the customer's understanding of which ones deliver the greatest value. Without a detailed understanding of customer's requirements and preferences, and what it is worth to fulfill them, suppliers may stress points of difference that deliver relatively little value to the target customer. 3. Resonating Focus - The favorable points of difference value proposition is preferable to an all benefits proposition for companies crafting a customer value proposition. The resonating focus value proposition should be the gold standard. This approach acknowledges that the managers who make purchase decisions have major, ever- increasing levels of responsibility and often are pressed for time. They want to do business with suppliers that fully grasp critical issues in their business and deliver a customer value proposition that's simple yet powerfully captivating. Suppliers can provide a customer value proposition by making their offerings superior on the few attributes that are most important to target customers in demonstrating and
  40. 40. 40 documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer's business priorities. For example, if you’re online bookstore has average selection, decent prices, delivery, a guarantee, good customer service, and a website, why would anyone buy from you? There’s surely a competitor who beats you in at least some of those aspects. 13. What is a Promotional Mix? What is IMC and what are its tools? It refers to all the decisions related to promotion of sales of products and services. The important decisions of promotion mix are selecting advertising media, selecting promotional techniques, using publicity measures and public relations etc. There are various tools and elements available for promotion. These are adopted by firms to carry on its promotional activities. The marketer generally chooses a combination of these promotional tools. Following are the tools or elements of promotion. They are also called elements of promotion mix: Advertising Advertisement can be defined as the ―paid form of non-personal presentation and promotion of idea, goods or services by an identified sponsor. It is an impersonal presentation where a standard or common message regarding the merits, price and availability of product or service is given by the producer or marketer. The advertisement builds pull effect as advertising tries to pull the product by directly appealing to customer to buy it Sales promotion
  41. 41. 41 Sales promotion refers to short term use of incentives or other promotional activities that stimulate the customer to buy the product. Sales promotion techniques are very useful because they bring: (a) Short and immediate effect on sale. (b) Stock clearance is possible with sales promotion. (c) Sales promotion techniques induce customers as well as distribution channels. (d) Sales promotion techniques help to win over the competitor. Personal selling Personal selling means selling personally. This involves face to face interaction between seller and buyer for the purpose of sale. The personal selling does not mean getting the prospects to desire what seller wants but the concept of personal selling is also based on customer satisfaction Public relation Apart from four major elements of marketing mix, another important tool of marketing is maintaining Public Relations. In simple words, a public relations means maintaining public relations with public. By maintaining public relations, companies create goodwill. Public relations evaluate public attitudes; identify the policies and procedures of an organization with the public interest to earn public understanding and acceptance. Public does not mean only customers, but it includes shareholders, suppliers, intermediaries, customers etc. The firm‘s success and achievement depends upon the support of these parties for example, firm needs active support of middle men to survive in market, it must have good relations with existing shareholders who provide capital. The consumers ‘group is the most important part of public as success of business depends upon the support and demand of customers only
  42. 42. 42 An effective marketing mix must meet customer needs better than competitors. Various elements of the marketing mix must be in sync with one another. It must also be mindful of the company‘s resources. The target customer has to be understood in terms of his level of need, his ability and willingness to pay a particular amount for his needs being served, the way he would like the product to be delivered, and his most preferred method of accessing information from the company. Once the target customer is identified and understood, marketers need to understand how he chooses among rival offerings. A company needs to understand the choice criteria that the customer uses in evaluating offerings of different companies. The marketing mix should reflect the customer‘s choice criteria. 14) What is Media Planning and Media Buying? What is the difference between “Above-the-line” (ATL) and “Below-the-line” (BTL) Advertising? Media planning is generally the task of a media agency and entails finding media platforms for a client's brand or product to use. The job of media planning involves determining the best combination of media to achieve the marketing campaign objectives. In the process of planning the media planner needs to answer questions such as:  How many of the audience can be reached through the various media?  On which media (and ad vehicles) should the ads be placed?  How frequent should the ads be placed?  How much money should be spent in each medium?
  43. 43. 43 Choosing which media or type of advertising to use is sometimes tricky for small firms with limited budgets and know-how. Large-market television and newspapers are often too expensive for a company that services only a small area (although local newspapers can be used). Magazines, unless local, usually cover too much territory to be cost-efficient for a small firm, although some national publications offer regional or city editions. Metropolitan radio stations present the same problems as TV and metro newspapers; however, in smaller markets, the local radio station and newspaper may sufficiently cover a small firm's audience. Media buying, a sub function of advertising management, is the procurement of media real estate at an optimal placement and price. The main task of media buying lies within the negotiation of price and placement to ensure the best possible value can be secured for an advertisement. The type of people who negotiate the price of these advertisements are labeled "Media Buyers" in the workplace. Increasingly, the job of a Media Buyer online is being done in real-time with advanced algorithms. 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
  44. 44. 44 marketing with direct consumer outreach program me do make the most sense 15. What is advertising? What are the Principles of Advertising? What is the difference between Advertising and PR and Publicity? Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement. Advertising has long been viewed as a method of mass promotion in that a single message can reach a large number of people. But, this mass promotion approach presents problems since many exposed to an advertising message may not be within the marketer’s target market, and thus, may be an inefficient use of promotional funds. However, this is changing as new advertising technologies and the emergence of new media outlets offer more options for targeted advertising. Advertising also has a history of being considered a one-way form of marketing communication where the message receiver (i.e., target market) is not in position to immediately respond to the message (e.g., seek more information). This too is changing. For example, in the next few years technologies will be readily available to enable a television viewer to click a button to request more details on a product seen on their favorite TV program. In fact, it is expected that over the next 10-20 years advertising will move away from a one-way communication model and become one that is highly interactive. 1. Make people stop and pay attention First, the advertisement should make people stop what they’re doing and pay attention. Most consumers view advertisements as interruptions and automatically ignore the messages. The advertisement needs to be engaging and catch their interest. However, catching someone’s interest isn’t enough. Many advertisements attract attention through gimmicks and jokes, but the
  45. 45. 45 important parts of the message—the company’s name or product—don’t stick with the customer. An effective advertisement is interesting and also informative, staying in the customer’s mind after he or she has moved on. 2. Advertise in the right places From television to the Internet to the newspaper, there are plenty of places to advertise—but marketing mediums are not created equally. Choose the advertising platforms that are most relevant to your audience and create ads designed especially for the venues. For example, a restaurant might create a morning radio commercial advertising their new breakfast sandwiches while simultaneously advertising a dinner special on local evening television. Think about what the customers will be doing when they see the ad and plan a message that is tuned to their interests. 3. Appeal to emotion and reason To create an effective advertisement, it’s essential to understand why people buy products and services. There are certainly logical reasons at hand based on the customer’s needs, but most consumers also base their purchases on emotional reasons. The most successful advertisements simultaneously appeal to a customer’s rational and emotional sides. Catch your customer’s attention first with an emotional appeal that will make him or her want the product, and then follow up with rational reasons to convince the customer that he or she needs the product. 4. Focus on frequency Most people ignore advertisements, therefore customers typically need to be exposed to your message about three times before they will become aware of what you’re offering. Of course, the first three exposures aren’t enough to guarantee a sale. Most consumers generally need 9-12 exposures to a message before they are ready to make a decision or a purchase. That means that it’s important to run your ads frequently—and in many cases, across multiple platforms—if you hope to reach a wider audience and increase your sales.
  46. 46. 46 5. Coordinate the advertising efforts To increase customer awareness about your product, coordinate your marketing efforts so that each advertisement clearly reflects your company and your brand. Consumers are more likely to take note of your business when you have an integrated marketing plan that includes advertisements across multiple platforms. By using the same theme of your television commercial in a magazine ad or on a website banner, customers will become more aware of what you’re selling and they’ll be more likely to remember your company’s name when they’re finally ready to buy. Difference between PR and Advertising PR and advertising often go hand in hand but they are two completely different things with a completely different goal and overall effect. While advertising is exclusively focused on promotion of products or services with an aim to encourage target audience to buy, PR is specialized in communication with the public and media. Just like advertising, PR often helps increase the sales as well and may include elements of marketing. However, it is mainly focused in creating positive publicity about a particular company, organization or individual and maintains a good reputation in the public. By doing so, PR helps create a relationship between let’s say a commercial company and its customers who are more likely to choose the products from a company They have a good opinion over those from a firm they have never heard off before or save heard something negative about it. The Effect on the Public The public reacts very differently to an add than to a newspapers article or a TV report. They know very well when they are reading/looking an add and the information they are communicated is perceived with a certain degree of skepticism. They know that the add wants to persuade them to buy a particular product or service and will either believe or disbelieve the information they are communicated. But when they are communicated
  47. 47. 47 news about a new product or service through a third party, for example a newspapers or online article they perceive it as informative and worthy of their attention. A press release for instance does not directly encourage them to buy but it often achieves just that by creating a positive image about the product/service or its manufacturer, or both. Cost Neither a professionally led marketing nor PR campaign is inexpensive. The cost depends greatly on who you hire but generally, PR is a lot less expensive than advertising. But it is also true that PR has a lot less control over the way their clients are presented by the media in comparison to paid ads that oblige the media to publish them unchanged. At the same time, a press release is published only once by a single media, while the adds can be published over and over again. But given that press releases and other PR tools to attract publicity usually achieve a greater impact on the target audience, there is no need for repetition of the same stories over and over again to attract attention of the public like this is usually the case with ads. In addition, an article or TV cover of purely informative nature is more likely to led the target audience believe the content of the adds. As a result, PR campaigns often precede or/and accompany marketing campaigns or are an integral part of advertising strategy. BY P. SUKUMAR MBA3-1341 UNIVERSAL BUSINESS SCHOOL +91-9561154451, 9160896689
  48. 48. 48