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Marketing Aptitude PDF
Marketing Aptitude PDF
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OXFORD PRACTICE GRAMMAR BY John Eastwood PAGES-436 SIZE-4.79MB
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Definition of marketing
Marketing is an integrated communications-based process through which
individuals and communities discover that existing and newly-identified
needs and wants may be satisfied by the products and services of others.
Marketing is defined by the American Marketing Association as the activity,
set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large. The term developed from the original
meaning which referred literally to going to market, as in shopping, or going to
a market to buy or sell goods or services.
The Chartered Institute of Marketing defines marketing as The management
process responsible for identifying, anticipating and satisfying
customer requirements profitably.
Marketing practice tended to be seen as a creative industry in the past, which
included advertising, distribution and selling. However, because
marketing makes extensive use of social sciences, psychology, sociology,
mathematics, economics, anthropology and neuroscience, the
profession is now widely recognized as a science, allowing numerous
universities to offer Master-of-Science (MSc) programmes. The overall
process starts with marketing research and goes through market
segmentation, business planning and execution, ending with pre and postsales
promotional activities. It is also related to many of the creative arts. The
marketing literature is also infamous for re-inventing itself and its
vocabulary according to the times and the culture.
A common set of conditions are present in the marketplace, viz.,
1) Buyers outnumber sellers
2) Any individual buyer is weaker than any individual seller economically, but
3) The total economic power of even a fraction of the buyers is enough to
assure the existence of, or to put out of business, most sellers or groups
of sellers, and
4) Consequently, the sellers compete to sway the largest number of buyers
they can to their, rather than another sellers (competitors) offerings.
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After understanding the Market in the last chapter, now let us understand what
the marketing is. In market, the sellers and buyers exchange ideas,
goods, services and information for money. The ideas, goods, services and
information possess a value for the customer. Every organization or
firm has to create a value for its product or service and this is very much
essential for its survival.
The economists call this value utility. Utility is the want-satisfying power of
a good or service. The utility is of four kinds- form utility, time utility,
place utility and ownership utility.
Form utility is created when the firm converts raw materials and component
inputs into finished goods and services. Any firms production function
is responsible for creating form utility and marketing provides important inputs
that specify consumer preference. Marketing creates the other three
utilities, time utility, place utility and ownership utility. Time and place utility
occur when consumers find goods and services available when and
where they want to purchase them. EBay and other online retailers have a
24X7 format. This format emphasizes the time utility. Cola vending
machines at malls and complexes focus on providing place utility for people
buying snacks and soft drinks. Similarly, dial a pizza creates place
utility. ATMs in banks also create the place utility. The transfer of title to goods
or services at the time of purchase creates ownership utility.
Utility is created by marketing. The firms determine what products or services
may be of interest to customers. In simple words, the strategy to use
in sales, communications and business development is called marketing.
Marketing is an integrated process through which a firm creates value for
customers and builds strong customer relationships in order to capture value
from customers in return.
Just like transaction is central to a market, customer is central to marketing.
Marketing involves identifying, retaining and satisfying the customer.
Marketing is not an isolated process. it is an integrated process which involves
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purchase.
Following is a short summary of the various stages of evolution of marketing.
Production Orientation Era: The prevailing attitude and approach of the
production orientation era was -consumers favor products that are
available and highly affordable . The mantra for marketing success was to
Improve production and distribution. The rule was availability
and affordability is what the customer wants. The era was marked by narrow
product-lines; pricing system based on the costs of production
and distribution, limited research, primary aim of the packaging was to protect
the product, minimum promotion. Advertising meant,
Promoting products with a lesser quality.
Product Orientation Era: The attitude changed slowly and approach shifted
from production to product and from the quantity to quality. The
prevailing attitude of this period was that consumers favor products that offer
the most quality, performance and innovative features and the
mantra for marketers was A good product will sell itself, so does not need
promotion.
Sales Orientation Era: The increased competition and variety of choices /
options available to customers changed the marketing approach
and now the attitude was Consumers will buy products only if the company
promotes/ sells these products. This era indicates rise of
advertising and the mantra for marketers was Creative advertising and selling
will overcome consumers resistance and convince them to
buy.
Marketing Orientation Era: The shift from production to product and from
product to customers later manifested in the Marketing Era which
focused on the needs and wants of the customers and the mantra of
marketers was The consumer is king! Find a need and fill it. The
approach is shifted to delivering satisfaction better than competitors are.
Relationship Marketing Orientation Era: This is the modern approach of
marketing. Todays marketer focuses on needs/ wants of target
markets and aims at delivering superior value. The mantra of a successful
marketer is Long-term relationships with customers and other
partners lead to successes
The following sentences summarize the above evolution of marketing.
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component of marketing.
Q 8. Describe the marketing Era of Marketing History:
During marketing era the company focus shifted from products and sales to
customers needs. It can be explained best by the shift from a sellers to a
buyers market one with an abundance of goods and services. The advent
of a strong buyers market created the need for a customer orientation.
Companies had to market goods and services, not just produce them. This
realization has been identified as the emergence of the marketing concept.
The keyword is customer orientation. All facets of the organization must
contribute first to assessing and then to satisfying customer needs and wants.
Q 9. What is the meaning of Relationship Marketing?
Organizations carried the marketing eras customer orientation one step
further by focusing on establishing and maintaining relationships with both
customers and suppliers. This effort represented a major shift from the
traditional concept of marketing as a simple exchange between buyer and
seller. Relationship marketing, by contrast, involves long-term, value-added
relationships developed over time with customers and suppliers.
Q 10. The statement Customer is King comes from which era of
marketing History ?
Marketing Era
Q 11. Today Marketing is Customer Oriented or Product Oriented or
profit oriented?
Customer oriented
Q 12. What is the center Point of Marketing Concept?
Customer
Q 13. Which will you keep in modern marketing concept? Make & Sell
or Sense & Respond ?
Sense & Respond
Features of Marketing
The marketing Management refers to planning, organizing, directing, control
of the activates which facilitate the exchange of goods and services between
the producersto end consumers. Firms today need to spend money to create
time, place and ownership utilities .The main features of modern marketing
are as follows:
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place, two people are needed. Both of them must have something to
offer each other and both of them should have a value to offer each other.
Each of them must be free to accept or reject the offer. Both of
them must be able to communicate with each other and must be able to
deliver what they offering to each other. These are some basic
conditions to make exchange happen.
Exchange cannot be forced. Both the people must be independent and able to
accept or reject one anothers offer. Exchange may be for
profit or also for no profit. Whether for profit or no profit , an exchange must
give some value to the exchange partners. A successful
exchange is a transaction. The transaction is the unit of measurement in
marketing. The value associated with transactions is the trade
values. A monetary transaction involves money for goods / services and a
barter transaction involves good/ service for good / service.
A marketer does not want a single transaction. His aim is to continuously
make market offerings and the continuous exchanges /
transactions create relationships. Todays marketing is relationship marketing.
The focus of marketing is not to get maximum profit from a
single transaction but to get long running relationship with the customers. If
there are good relationships, the transactions will follow and run
long term.
5. Markets: As we have discussed, an exchange may take place between two
people, but three people are required to create a market. There
are always many potential buyers and many potential sellers and the set of
these potential buyers and sellers is market. A market essentially
needs competition (except in absolute monopoly). A market may be a physical
market with few shops to a large complexes and shopping
malls. A market also may be virtual and today virtual markets are no inferior to
the physical markets, thanks to greater access to information technology.
Basics of Marketing Process
The predetermined objectives of marketing are to maximize the profits and
maximize the share in the market. To achieve these objects, a wellformulated
marketing plan is needed. Marketing plan involves the important decisions
and route map to achieve enterprise goals. A plan is
implemented and reviewed through marketing process. A well designed
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the demand.
Government Policies: Tax rates and other government policies have a great
impact on the consumers buying behavior.
Understanding Market Segmentation
A market segment is a subset that fits with other subsets to constitute a whole
market. A market is composed of people, consumers, institutions,
firms with needs & wants backed by sufficient purchasing power and
willingness to buy. Markets are heterogeneous and consist of elements that
are not of the same kind or nature. However, the heterogeneous market can
be divided into many homogenous customer segments using several
variables. This division of the whole market into relatively homogenous groups
is called market segmentation.
A market segment consists of people or organizations sharing with one or
more characteristics that cause them to demand similar product and/or
services based on qualities of those products such as price or function.
A true market segment is distinct from other segments as different segments
have different needs. A market segment is homogeneous within the
segment and exhibits common need, wants and demands. A true market
segment responds similarly to a marketing stimulus.
Market segmentation is based upon the assumption that markets of all
commodities are heterogeneous. Two groups of people are never common
in all characteristics and all products seldom succeed by appealing to
everybody. The marketers with clear marketing communications target the
identified homogenous segments.
Marketing Guru Philip Kotler defines market segmentation as the subdivision
of a market into homogenous subsets of customers where any
subject may conceivably be selected on a market target to be reached with a
distinct marketing mix.
Market segmentation helps the marketing decision in following ways:
1. By helping the marketer to identify the groups of customers to whom he can
more effectively target marketing efforts.
2. By helping the marketer to avoid trial and error methods of strategy
formulation.
3. By helping the marketer in addressing the customer needs and satisfying
them.
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4. By providing important data to the marketer on which long term plans can
be formulated.
5. By helping, the marketers to stay focused rather than scattering their
marketing resources.
Features of a Market Segment:
The market segment must be internally homogenous because consumers
within the segment would be more similar to each other in
characteristics.
The market segment must be identifiable so that the individuals can be placed
within or outside the segment.
The market segment must be accessible to that it can be reached by an
advertising media and distribution channels
The market segment must represent an effective demand.
Variables of Segmentation: Consumer Markets
There are two types of the markets- consumer markets and industrial market.
Consumer markets are those markets where the ultimate
consumers for their personal use purchase the products. In Industrial markets,
the goods and services are purchased for use directly or indirectly
in the production of other goods and services for resale.
Marketers use different variables for market segmentation.
The variables of dividing the consumer markets can be placed in two broad
categories. One is Consumer background characteristics, which
include Geographical, Demographical, Psychographical & General Life-style
variables. Another is consumers market history, which includes
product usage, product benefit and Decision process.
Here is a brief discussion about them:
Consumer background characteristics:
1. Geographical variables: The geographic segmentation is the oldest, most
basic and most conventional way of segmenting the markets.
The variables included in geographical segmentation are Region of product
distribution, Cultural differences, languages, accessibility to the
target market, mobility of the consumers and so son
2. Demographic Variables: Demographic features of the markets are also
basic variables of market segmentation. Demographic variables
include the Age, Sex, Income, Educational level, Social status etc.
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promotion are advertising, public relations, word of mouth and point of sale.
Promotion may be paid or unpaid. Paid promotions include
advertising through various media, sponsorship deals, exhibitions,
conferences, seminars, paid participation in trade fairs and events and
unpaid promotion include the press releases, word of mouth etc.
Place: Place refers to the location where a product can be purchased. It
represents the distribution channel. The Distribution channel may be
direct or indirect. Channel length and channel breadth matter a lot. Some
other sub elements are sublets, franchisees, direct sales agents,
wholesalers, retailers etc.
T h e above marketing mix is product focussed. There is a customerfocused marketing mix which is known as 4C model. The elements are 4 C
model of marketing
mix are Commodity, Cost, Channel and Communication.
The Extended Marketing Mix for Service Industry: Additional 3 Ps
The marketing mix of product marketing consists of 4Ps, the services
marketing takes in 3 more Ps making the extending market mix for service
industry: 7Ps
The additional 3Ps are People, Process and Physical Evidence.
Why additional Ps?
These additional 3P are required because of the special characteristics of the
Service Industry. The product of a service industry is not tangible.
The Service cannot be manufactured and inventoried but are often produced
& delivered simultaneously. The service cannot be touched or felt but
has to be experienced. The quality of the service is perceived quality and
depends upon who is providing, when is providing and how is providing.
The services are perishable and depend upon the people who are providing,
the ambience where it is being provided and the way it is being
provided. Because of certain characteristics like intangibility, inseparability,
heterogeneity, perishability etc. Service industry needs additional
marketing mix elements.
The Process industrializes and standardizes the services, Physical evidence
tangibilizes the services and people (personnel) are the essential parts of the
service.
The sub elements of these 3Ps are discussed here:
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Process: The sub elements of process are flow of activities, service steps,
and involvement of the customers.
Physical evidence: The sub elements of physical evidence are Ambience,
facility design, Equipment, signage, Employee attire, Displays
etc.
People: The sub elements of people are Employees and customers.
Marketing Aptitude Summary Notes 2
Q.1 What are the marketing Functions?
There are 8 universal functions of Marketing, categorized into 3 broad
categories:
1. Buying,
2. Selling,
3. Transporting,
4. Storing,
5. Standardizing and grading,
6. Financing,
7. Risk taking
8. Securing marketing information.
Q.2 What are Concepts of Marketing ?
The 5 concepts of marketing are as follows:
1. Needs, wants and demands
2. Products
3. Value and satisfaction
4. Exchange, transactions and relationships
5. Markets
Q.3 Internet has empowered the customer. Write a Brief note
In the connected world, the customers empowered by Internet can
1. Get objective information for multiple suppliers without relying on the
manufacturer or the retailer(http://www.alibaba.com/ )
2. Initiate requests for information and advertising from manufacturers (e.g.,
http://www.dealtime.com/)
3. Design and configure customized offerings e.g., http://www.hp.com/
4. Use buying agents to pit sellers against each other
http://www.indiamart.com/
5. Unbundle offerings and arbitrage across channels http://www.naaptol.com/
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6. Global trade organizations can enforce trade barriers when their regulations
and guidelines are not observed
7. A host nation may levy anti-dumping duties on a foreign firm and such a
decision may be dominated by the local businesses lobbying with the
government
8. Copyright infringements, trademark and intellectual property rights
violations
9. Direct comparative advertisements may not be allowed in few countries
10. Use of children is advertising and advertising to children are banned in
certain countries
11. Price regulations preempt any pricing strategy of a firm
12. A detailed displaying of the ingredients in product labels is mandatory in
most countries
13. The channel members are given the additional responsibility of verifying
the eligibility of the prospective buyers for certain products
14. Use of certain raw materials or methods of manufacturing are prohibited in
certain countries
15. Industry watch dogs and consumer groups are always on the prowl for any
unethical trade practices
16. Each one of the above issues has serious implications for the marketer in
his marketing decision making. Ignorance of the law is no excuse
and breaking of the law is an offence.
5. The Economic Environment
The overall health of the economy influences how much consumers spend
and what
they buy.This relationship affects marketing. All marketing activity is directed
toward
satisfying consumer wants and needs, marketers must understand how
economic
conditions influence consumer buying decisions.
Economic environment consists of forces that influence consumer buying
power and
marketing strategies. They include
1. The stage of the business cycle,
2. Inflation,
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3. Unemployment,
4. Resource availability
5. Income.
6. Technological Environment
It represents the application to marketing of discoveries in science, inventions
and
innovations. New technology results in new goods and services for
consumers; it also
improves existing products, strengthens customer service and often reduces
prices
through new, cost-efficient production and distribution methods. Technology
can
quickly make products obsolete, but it can just as quickly open up new
marketing
opportunities.
7. The Social-Cultural Environment
It involves the relationship between marketing and society and its culture.
Marketers
must cultivate sensitivity to societys changing values and to demographic
shifts such
as population growth and age distribution changes.
It involves demography, cultural aspects, Psychographic aspects and
Consumer
behavior.
8. Consumerism:
Changing social values have led to the consumerism movement which is a
social force
within the environment designed to aid and protect buyers by exerting legal,
moral
and economic pressures on business. Consumerism also advocates the rights
of the
consumers such as:
1. The right to choose freely consumers should be able to choose among a
range of
goods and services
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consumer goods or Industrial Goods. The consumer goods and services refer
to the products that are meant for final consumption by the ultimate
Consumer. The examples are Bread, Butter, Soap, Toothpaste (Consumer
Goods) and hair cut , personal healthcare etc. (Consumer service).
Industrial Goods refer to the goods that are meant to be used in commercial
production of other goods and services or any other business activity.
Raw materials, engines, lubricants, tools, etc. are some examples.
Here are few more differences between Consumer Goods and Industrial
Goods:
1. The number of customers for consumer goods is often very large
2. The demand for consumer goods is autonomous demand. This means that
they are demanded by the ultimate consumers directly. The
demand for Industrial Goods is derived demand, which means that demand
for one good is a result of demand of another good.
3. The consumers often dont do through analysis and research their
demanded products. In case of industrial goods, extensive study is done.
4. The difference in quantity demanded. In Industrial goods, often the
demanded quantity per customer is high.
5. Market for consumer goods is large and open market, while in the case of
Industrial goods it is often limited.
Industrial Products
The goods which are meant to be used in making other products or rendering
services are Industrial Goods. So industrial goods are basically used
as inputs. Some basic features of the industrial goods are as follows:
1. The number of buyers of the industrial goods is less than the number of
buyers of consumer goods.
2. The channels of distributions are often shorter.
3. The industrial markets are highly concentrated geographically.
4. The demand for Industrial goods is derived demand i.e. it is derived out of
the demand for consumer products.
5. There is a greater significance of technical details about the industrial
goods.
6. There is reciprocal buying in some Industrial goods.
These Goods are classified in following five categories:
Raw products: Those industrial Goods which shall become become a part /
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The combination of all the products offered by a firms is a Product Mix. In marketing the
decisions related to product mix and product lines are very
important. When we discuss product mix, we discuss all the products offered by a
company. In simple words, any organization which is selling
more than 1 product has a product mix. A product line is a broad group of products,
intended for similar uses and having similar characteristics.
For example Hindustan Uniliver has a broad product mix with several product lines such
as Soap Line, Food Line, Personal care Line Home Care
line and so on..
The number of items in each product line is called the Product Mix length. For example
Hindustan Unilever has Breeze, Hamam, Lifebuoy, Lux,
Rexona, Le sancy and Liril in its soap line. The width of the product mix refers to the
number of product lines a company has.
One typical example is Amul. The product lines of Amul are Bread Spreads, Milk Drinks,
Powder Milk, Fresh Milk, Cheese, Cooking, Desserts &
Health Drinks. Each line has several products to offer. You can view the product line of
Amul
There may be a number of reasons to alter either an existing product or a product
line. These reasons may include supporting the marketing strategy, Improving sales,
Expansion of market share etc. The product line can be altered by altering one or
more of the following attributes.
1. Composition of product line
2. Expansion or contraction of the product line
3. Value addition
4. Brand Image
5. Packaging
6. Physical characteristics
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7. Positioning
Addition of new products to a product line is expanding the product line. The
product line may be too long of reducing product line length results in more profits.
The product line may be too short if addition of new products increases profits. When
a range of product line (often the price range) is increased it is called line
stretching. When a company operates at the lower end of the market and
introduces new products to enter the upper market, it is called upward stretching.
This is done by introducing premium products and services. If a company working in a
high end market introduces new products to enter the lower markets as well, this is
called downward stretching. Many companies start with higher end and move
towards the lower end. For example parker started selling premium pens , out of
reach to many of the consumers and later the company introduced the lower end
products. The lower end market products are also called budget products. The Budget
products are advertised heavily to bring the customer to the entire product line of the
company.
If a company works in a moderate market and decides to survive both the low end
and upper end of the market is Two Way Stretch.
There is one more concept called cannibalization. Cannibalism is the act of any
animal consuming members of its own type or kind. In marketing, Cannibalization
refers to a reduction in the sales volume, sales revenue, or market share of one
product as a result of the introduction of a new product by the same producer.
Introduction of diet Pepsi or diet coke may eat up some of its sales of regular coke or
Pepsi. Introduction of a new car may eat up the sales of an older model of the same
car.
Basics of Brand
A brand is a symbol or a mark that helps the customers in instant recall and
differentiates it thereby from the competitor products of same nature.
The American Marketing Association (AMA) defines brand as follows:
A Brand name is a part consisting of a word, letter, groups of words or letters
to identify a product or a service of a seller or group of sellers to differentiate
them from those of competitors.
Generic Brand:
A brand name over which the original owner has lost the exclusive claim
because all offerings in the associated class of products have
geneally known as the the brand name can be called a Generic Brand.
Generic brand products are often of equal quality but lesser prices
as that of a branded product.
A Brand v/s a Trade Mark:
A brand that has legal protection and is granted solely to its original owner is a
Trade mark.
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two sides of the same coin that is transaction. Selling is different from
marketing. While selling means offering to exchange something (intangible or
tangible) of value for something else, marketing means much
more. Selling is a part or component of marketing. Marketing may start
even before production of goods and services. Marketing involves
analyzing consumer needs, securing information needed to design and
produce goods or services that match buyer expectations, creating, and
maintaining relationships with customers and suppliers.
The selling starts from the factory in case of tangible goods, while marketing
starts in the market place. The focus of selling is product or service
which exists, while the focus of marketing is customer needs. The means of
selling is a sale and to conclude a sale depends upon the
Persuading art of the sales person, means of marketing is a complex,
integrated and interdependent factors.
The ultimate end of selling is profit while the ultimate end of the marketing is
Customer satisfaction.
A common person, due to continuous exposure to advertising and personal
selling links marketing and selling. There are some misconceptions or
myths regarding the selling and marketing, biggest of which is Marketing and
selling are synonymous. The other myths are:
1. Marketing job is to create good advertising campaign
2. Marketing means to push the product to customer.
3. Marketing is transaction oriented.
4. Marketing is short term strategy
5. Marketing is an independent function.
6. Marketing is part of selling.
Both marketing and selling promote a product or service but marketing
involves selling, promoting, educating and exciting people about a product or
service. Marketing builds a brand.
Who is a customer?
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with
the shopping goods. The rare arts collections, antiques, prestige brands, style
goods,
automobiles etc. are the examples. The particular hotel, restaurant, hair salon,
spa &
resorts are examples of services.
The comparison factor is absent in specialty goods.
Some common features
1. Limited demand and limited number of buyers
2. Costly products generally
3. Sold at few places
4. Aggressive promotion is required.
What is culture? The values, beliefs preferences and tastes passed on from
one generation to another generation in the society are called culture.
Culture is one of the broadest determinants of Buyers behavior. A marketer
needs to understand the culture to be able to do successful marketing.
Culture keeps changing and so do the values, beliefs, preferences and tastes
of the people. The successful marketer needs to monitors these
changes and inculcates them in the marketing strategy of the firm.
Culture is very important in Global marketing. To market a product overseas,
one needs to understand the cultural taboos, social customs,
preferences, religious outlook and other things.
Social Factors: Man is a social animal. Every person belongs to social group
or groups. Group imparts a major influence on a consumers buying
decisions. These influences may be informational or normative.
In psychology, it is referred to as conformity. Conformity is a process by
which an individuals attitudes, beliefs, and behaviors are conditioned by
what is conceived to be what other people might perceive. Solomon Eliot
Asch, an American Psychologist, first explained this and it was known as
Asch Phenomenon. The group influences may be the result of subtle
unconscious influences, or direct and overt social pressures.
Informational social influence occurs when a person turns to the members of
his/ her group to obtain accurate information. Normative social
influence occurs when a person conforms to be liked or accepted by the
members of the group. It usually results in public compliance, doing or
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