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mb0046 Marketing Management

mb0046 Marketing Management

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Published by: Arun Chacko on Feb 12, 2013
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Marketing ManagementQ.1 A. Explain the six criteria for effective market segmentation
 
Identity - The marketing manager must have some means of identifying members of the segmenti.e., some basis for classifying an individual as being or not being a member of the segment. There must beclear differences between segments. Members of such segments can be readily identified by commoncharacteristics as they display similar behavior.
 
Accessibility - It must be possible to reach the different segments in regard to both promotion anddistribution. ln other words, the organisation must be able to focus its marketing efforts on the chosensegment. Segments must be accessible in two senses. First, firms must be able to make segmentedcustomers aware of products or services. Second, they must get products to them through the distributionsystem at a reasonable cost.
 
Responsiveness
A clearly defined segment must react to changes in any of the elements of themarketing mix. For example. if a particular segment is defined as being cost-conscious, it should reactnegatively to price rises. If it does not, this is an indication that the segment needs to be redefined.
 
Size - The segment must be reasonably large to be a profitable target. Lt depends upon thenumber of people in it and their purchasing power. For example, makers of luxury goods may appeal tosmall but wealthy target markets whereas makers of cheap consumption goods may sell to a large butrelatively poor target markets.
 
Nature of demand
lt refers to the different quantities demanded by various segments.Segmentation is required only if there are market differentiation in terms of demand. The marketingmanager should not only be able to find out the total demand and the differences in demand patterns ineach of these segments.
 
Measurability
The purpose of segmentation is to measure the changing behavioural pattern of consumers. For example, the segment of a market for a car is determined by a number of considerations,such as economy, status, quality, safety, comforts, etc.
B. Discuss the types of target marketing strategies.
 
Undifferentiated marketing strategy or mass marketing strategyIn the absence of a proper mechanism to classify the market into a number of markets segments and analyse theirpotential, many firms decide on the mass marketing strategy. In this case, the marketer goes against the idea of adifferentiated market and decides to sell the product to the whole market. Here the marketing manager ignoresthe idea of segment characteristics and differences, and develops a unified marketing programme for the entiremarket. This strategy keeps the overall marketing costs low and makes it easier to manage and track the marketforces uniformly. The marketer tries to find out commonalities across various segments rather than focusing onthe differences between segments.
 
Concentrated marketing strategyIn the second alternative strategy, the marketing manager decides to enter into a selected market segmentinstead of all the available market segments. When resources and market access are limited and the company has
 
to face intense competition, the marketing manager has to stretch the budget for market coverage. In this case,the company is likely to follow the concentrated marketing strategy.
 
Differentiated marketing strategyMany marketers choose to target several segments or niches with a differentiated marketing offer to suit eachmarket segment. Maruti is the leading automobile company, which has the distinction of having different productsfor different market segments.
Q.2 Explain the consumer buying decision process.
 
Problem recognitionA buying process starts when a consumer recognizes that there is a substantial discrepancy between his/hercurrent state of satisfaction and expectations in a consumption situation. A need can be activated through internalor external stimuli. The basic needs of common men rise to a particular level and become a drive. From theirprevious experiences, they know how to satisfy these needs like hunger, thirst, sex, etc. This is a case of internalstimulus. A need can also be aroused by an external stimulus such as sighting a new product in a shop whilepurchasing other usual products.
 
Information searchAfter need arousal, the behaviour of the consumer leads towards collection of available information about variousstimuli. ln this case, information about products and services are gathered from various sources for furtherprocessing and decision-making. The first source of consumer information is the internal source. This means theconsumer first search the information regarding the relevant product from his/her inner memory. If theinformation is not available from internal source for making a purchase decision he or she may collect informationfrom external sources. A External sources for desired information can be grouped into four categories.
 
Personal sources (family, friends, neighbors, and peer group)
 
Commercial sources or market dominated sources (advertisements, salesmen, dealers, and companyowned sales force)
 
Public sources (mass media, consumer rating organisations, and trade association publications)
 
Experiential sources (handling, examining, and using the product) The marketer will find it worthwhile tostudy
the consumers’
information sources when:
 
A substantial percentage of the target market engages in the search
 
The target market shows some stable patterns of using the respective information sources.
 
Alternative evaluationOnce interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives.Evaluation leads to formation of buying intention that can be to either purchase or reject the product/brand. Thefinal purchase will however depend on the strength of the positive-intention, which is the intention to buy.
 
Purchase decisionFinally the consumer arrives at a purchase decision. Purchase decisions can be any one of the three - no buying,buying later, and buy now. No buying takes the consumers to the problem recognition stage as their consumptionproblem is not solved and they may again get involved in the process as we have explained. A postponement of buying can be due to a lesser motivation or evolving personal and economic situation that forces the consumernot to buy now or postponement of purchase for future period of time. If positive attitudes are formed towardsthe decided alternative, the consumer will make a purchase.
 
Post-purchase behaviourPost-purchase behaviour refers to the behaviour of consumers after their commitment to a product has beenmade.
It originates out of consumers’
experience regarding the use of the product and is indicated in terms of satisfaction. This behaviour is reflected in repeated purchases or abstinence from further purchase. A satisfiedproduct-use experience leads to repeated purchase, referrals from satisfied customers to new customers, higherusage rate, and also brand advocacy.
 
 
Q.3 A. Discuss the Henry Assael model on buying decision behaviour.
Henry Assael has come up with an explanation to analyse why consumers buy the goods they buy. He explainedthe relationship between the level of involvement by the consumers in the purchase of goods and services and thelevel at which diverse goods or services differ from one another. High involvement Low Involvement
Significant
differences Complex Variety Seeking between brands Buying Behaviour Buying Behaviour Few differencesDissonance Reducing Habitual Buying between brands Buying Behaviour
 
Complex buying behaviour
Consumers are highly involved in a purchase and aware of significantdifferences among brands. This is usually the case when the product is expensive, bought infrequently,risky, and highly self-expressive. Typically the consumers don't know much about the product categoryand have more to learn. Example: personal computer.
 
Dissonance-reducing
sometimes, the consumer is highly involved in a purchase but sees littledifferences in the brands. The high involvement is based on the fact that the purchase is expensive,infrequent, and risky. Example: carpet. After purchasing the carpet, consumers might experiencedissonance that stems from noticing certain disquieting features of the carpet or hearing favorable thingsabout other carpets.
 
Habitual buying behaviour - Many products are bought under conditions flow consumer involvement andthe absence of significant brand differences. Considering salt, consumers have little involvement in thisproduct category. They go to the store and reach for a brand. If they keep reaching for the same brand, itis out of habit and not strong brand loyalty.
 
Variety-seeking buying - Some buying situations are characterized by low consumer involvement butsignificant brand differences. Here consumers often do a lot of brand switching. Consumers do the brandswitching for the sake of variety rather than dissatisfaction. Example: wafer potato chips.
B. Explain the five stages of Adoption Process.
 
Awareness - During the first stage of adoption process, the product innovation is explained to theconsumers. This process gives information about the new product or service.
 
Interest - When consumers develop an interest in the product or product category, they search forinformation about how the innovation can benefit them.
 
Evaluation -
The evaluation stage represents a kind of ‘mental trial’ of 
the product innovation. Only if the
consumers’ evaluation of the
innovation is satisfactory, they will actually try the product. In case theevaluation is unsatisfactory, the product is automatically rejected.
 
TriaI- ln this stage- consumers use the product on a limited basis. Their experience with the productprovides them with the critical information that they need to adopt or reject it.
 
Adoption -In this stage, consumers decide to make full and regular use of the product.
Q.4 Describe the components of the micro environment of marketing
The companySome company factors that affect the marketing decisions are: Culture and value system
Organizational culturecan be viewed as the system of shared values and
beliefs that shape a company’s
behavioural norms. A value. isan enduring preference as a mode of conduct or an end state. The value system of the founders of theorganisation has a lasting impact on it. The value system not only influences the working of the company and theattitude of its people but also the choice of its business.1.
 
Mission and objectives
The mission and objectives of the company guide the priorities, direction of development, business philosophy, and business policy.2.
 
Management structure and nature - Structure is the manner in which the tasks and sub-tasks of theorganisation are related. Structure is concerned with the hierarchical relationship and the relationshipbetween the management of different functional areas like the structure of the top management and thepattern of share holding.

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