Assaingnment 1

1.Marketing is one activity which all of us seem to observe around us. Any time you try to buy
something, marketing has a role to play. It is often viewed by many as being advertising or sales
promotion or marketing research. But it is a concept much larger than any of them or all of them
put together. Marketing consists of all those activities designed to create exchanges which satisfy
human or organizational needs or wants in a way that brings profit for the firm. It performs the
task of both identifying and satisfying customer needs.
Originally, a “Market” was a public place in a town or village, where household provisions and
other objects were available for sale. The definition of market has expanded in this globalized
world. The traders may be spread across a whole town, or city or region or a country and yet form
a market. For example, stock market, Oil & Oilseeds market, Steel or Metals market etc. where
people across the countries can participate in the business without being face to face.

The essential features of a market are (i) existence of a commodity / item which is to be dealt
with, (ii) the existence of buyers and sellers, (iii) a place; be it a certain region, a country or the
entire world and even a virtual place like the internet and (iv) interactions between buyers and
sellers to facilitate transactions.
1. On the basis of Geographic Area

Local Market is the place where the purchase and sale of goods / services involve buyers and
sellers of a small local area. The example of local market is a village or a town market. In this
market, day to day requirements like vegetables, fruits, meat and fish are sold.

National Market

When the trading involves both buyers and sellers of the entire nation then it is called as a
national market. The Cotton & Textiles Market located in Mumbai, Tea and Jute Markets located
in Kolkata are examples of this. .

Global or World Market

Many manufactured products and specialized services are also sold across the globe by many
companies. Producers of Coca-cola and Sony brand sell their products in the global market in
almost all countries. Indian companies like TCS, Infosys, and WIPRO sell and provide their IT
enabled services to many companies in different parts of the world. They operate in a Global
Market.

2. On the basis of Nature of Competition in the market

Perfect Market

It refers to a market or market situation where there is perfect competition. Competition is said
to be perfect when (a) the sellers & buyers of a particular product are so many that none of them
have to sell or buy at a single uniform price. (b) Price is determined by the market forces of
supply & demand. This could be an ideal situation for all marketers. It may not happen in its pure
form. But we can see that there would a large number of small traders and even manufactures in
specific area dealing in similar products and following more or less the characteristics mentioned
above. You may have seen traders of plastic products or warm clothes or hardware in a specific
local area.

Imperfect Market
In contrast to the perfect competition, the imperfect market will have imbalance between
number of buyers and sellers. This market is further divided into three parts. They are Monopoly,
Monopolistic and oligopoly. In case of monopoly, single seller dominates the entire market where
as in oligopoly few sellers dominate the market. The details of these types of markets will be
discussed in the pricing unit.

3. On the basis of Nature of Goods Sold

Consumer Goods Market

Definition: A Consumer Goods Market is defined as a market where the final output of the firm
goes for the consumption by individuals or institutions.

Consumer Goods Market

This is a market, where the buyers who are individuals and institutions purchase a variety of
products and services to satisfy their needs and wants. For example, an individual buys a
chocolate for his personal consumption whereas a family buys a refrigerator for household or
family consumption. Products sold in consumer goods market are classified as non-durables, which
are frequently purchased such as bathing soap, detergent etc. and durables such as refrigerator,
TV set, washing machine, car, clothing etc. Non-durables are also known as FMCG – Fast Moving
Consumer Goods, e.g. soap, detergent etc.

Industrial Goods Market

Definition: A business market is defined as a market where output of one firm goes either as raw
material, goods in process or as consumables of another industry.

This market is also known as organizational or B2B market. It is made up of organizations including
manufacturing units, service firms, government departments and other business enterprise. The
products which are sold in the industrial goods market are typically, raw materials, machines,
machine tools, equipments, components and spares etc. Generally, the buyers of industrial goods,
purchase products and services either for producing other products and services which can be sold
in the consumer markets or for using them to facilitate the operation of business enterprise. In
many such cases, the buyer is an organization whose consumption will depend on how the end
user’s demand will change. Hence, in business markets, the demand is a derived demand. Demand
for steel will depend on the consumption of steel equipments, rods and other accessories in the
construction and real estate sector.

Non-Profit and Government Markets

This market which consists of Non-Profit organizations such as social-service agencies, educational
organizations, charitable organizations and Government Departments and agencies needs special
skills to sell to them. These buyers have limited purchasing power which is why pricing for this
market needs to be planned carefully. The Government, which is a large buyer, makes purchases
on the basis of tenders, bids and negotiation.

1b, Today’s marketing system has evolved from the time of a simple barter of goods through the
stage of a money economy to today’s complex marketing. Throughout all these stages, exchanges
have been taking place. In small town and villages there were artisans such as carpenters,
weavers, potters blacksmiths, barbers and others such service providers who produced goods and
services not only for their own consumption but also for exchanging with others what they could
not produce but needed. This was barter system of exchange. For a transaction to take place
between two parties, it was necessary that there be needs and wants on both sides. The
development of money came to act as a common medium, and the exchange process became very
easy and convenient.

2a, A marketing oriented company always keeps tab on its external environment carefully to
analyze opportunities and threats. This external environment influences company’s strategies in
two levels i.e. l macro and micro level. The macro environment involves political and legal,
economic and natural, social and cultural and technology elements. The micro environment
consists of supply chain, customer and competitor. These factors are uncontrollable by the
organization. Even the best of companies faces threat if one of the external environments is
adverse. Hence marketing companies should monitor the external environment carefully and
continuously.

Environmental Scanning

This is the process of gathering, analyzing and forecasting information related to the external
environment in order to identify opportunities and threats that a company may be facing.

Environmental scanning refers to assessing the various aspects of the external and internal
environment such that the knowledge may provide information with which to make some
predictions for the future. If a mobile service provider is aware that the government is opening up
the 3G spectrum it would be able to make a forecast on the demand for cell phones with these
facilities.

Need for environmental scanning:

It helps in

1. Identifying the opportunities that company has in immediate future.

2. Identifying the threats faced by the company.

3. Demand forecasting

4. Developing appropriate business plans.

5. Adjusting the company strategy in changing competitive environment.

Analyzing the Micro Environment of the Organization

Marketing department alone cannot satisfy all the needs of customer. Therefore it is essential to
integrate the functions of suppliers, publics, internal departments and intermediaries in creating
the value to the customer. These forces are known as organization’s micro environment.

Microenvironment: The forces which are very close to company and have impact on value creation
and customer service.

The company plans to expand its service areas in the coming months. To meet the targets of the
marketing plan, other departments of safe express also expanding their horizon. The Company is
coming out with logistics parks in different cities; plans to hold seven million square feet of
warehousing capacity in the next three years and invest Rs 10 billion in three years to meet those
targets. The above example shows that the company’s marketing plan should be supported by the
other functional departments also.

Intermediaries

Marketing intermediaries: These are firms which distribute and sell the goods of the company to
the consumer.

Marketing intermediaries play an important role in the distribution, selling and promoting the
goods and services. Stocking and delivering, bulk breaking, and selling the goods and services to
customer are some of the major functions carried out by the middlemen. Retailers, wholesalers,
agents, brokers, jobbers and carry forward agents are few of the intermediaries. Retailers are
final link between the company and the customers. Their role in the marketing of product is
increasing every day.
Publics

These are microenvironment groups, which help a company to generate the financial resources,
creating the image, examining the companies’ policy and developing the attitude towards the
product.

We can identify six types of publics

1. Financial publics influence the company’s ability to obtain funds. For example, Banks,
investment houses and stockholders are the major financial publics.

2. Media publics carry news and features about the company e.g. Deccan Herald

3. Advertisement regulation agencies, telecom regulation agency( TRAI), and insurance regulation
agency(IRDA) of the government

4. Citizen action groups: Formed by the consumer or environmental groups. For example, people
for ethical treatment of animals (PETA) or Greenpeace.

5. General publics: a company should be concerned towards general publics’ attitude towards its
products and services.

6. Internal publics: Employees who help in creating proper image for the company through word
of mouth.

Competitors

A company should monitor its immediate competitors as its sale will be affected by the nature and
intensity of the competitors. The sale of Coca cola will be affected by Pepsi cola, or Britannia
cheese by Amul cheese. Michael Porter, the author of Competitive Advantage of Nations suggested
that, in addition to direct competition, companies should also consider competition from
substitutes. In addition to existing competitors, the potential competitors should also be
anticipated.
Suppliers
There are many kinds of suppliers to an enterprise or an institution. There are typically, raw
material suppliers, energy and fuel suppliers, labour suppliers, office item suppliers and so on.

Suppliers are the first link in the entire supply chain of the company. Hence any problems or cost
escalation in this stage will have direct effect on the company. Many companies adopted supplier
relation management system to manage them well. Suppliers are a source of competition to firms
today. For a large retail store like Reliance Retail or Big Bazaar the suppliers play the most
significant role in both cost and time. Timely supplies reduce stocking of goods and blocking of
space, at the same time meet customer requirements.

In a globalised scenario suppliers are even more important as competition goes up manifold! The
Tamil Nadu State Electricity Board imports coal from New Zealand despite huge coal reserves in
India. For Volvo, India is a manufacturing hub.
Customers

A company may sell their products directly to the customer or use marketing intermediaries to
reach them. Direct or indirect marketing depends on what type of markets Company serves.
Generally we can divide the markets into five different categories.
We will come to know about these five different markets from the following example.

MRF, a tyre company sells its product directly to consumer (in case of urgency, customer
purchases directly from showroom) i.e. operates in consumer market. It operates in business
markets by selling tyres to companies like Maruti Udyog limited. MRF also sells TYREs to BMTC and
KSRTC, transport organizations of Karnataka government. If MRF sells tyres in African or American
countries then it is operating in the international market. If MRF buys the old tyres, retreads it
and sells it to the consumer at a profit then company is operating in the reseller market

3a, Characteristics of MIS

Philip Kotler defines MIS as “a system that consists of people, equipment and procedures to
gather, sort, analyze, evaluate and distribute needed, timely and accurate information to
marketing decision makers.

Its characteristics are as follows:

1. It is a planned system developed to facilitate smooth and continuous flow of information.

2. It provides pertinent information, collected from sources both internal and external to the
company, for use as the basis of marketing decision making.

3. It provides right information at the right time to the right person.

A well designed MIS serves as a company’s nerve centre, continuously monitoring the market
environment both inside and outside the organization. In the process, it collects lot of data and
stores in the form of a database which is maintained in an organized manner. Marketers classify
and analyze this data from the database as needed.

With the advent of Computer Technology, MIS has taken a step further to provide managers direct
access to the databases. This system calledMarketing Decision Support System (MDSS) links a
decision maker to relevant databases and analysis tools, thereby allowing him to gain deep
insights into needs and trends of customers with the help of sophisticated statistical analysis.

Today companies organize the information in databases such as customer database, product
database, and field sales database and combine them to be stored in a huge database called Data
Warehouse. The process of searching through information in data warehouse to identify
meaningful patterns that guide decision making is called Data Mining.

Benefits of MIS

Various benefits of having a MIS and resultant flow of marketing information are given below:

1. It allows marketing managers to carry out their analysis, planning implementation and control
responsibilities more effectively.

2. It ensures effective tapping of marketing opportunities and enables the company to develop
effective safeguard against emerging marketing threats.

3. It provides marketing intelligence to the firm and helps in early spotting of changing trends.

4. It helps the firm adapt its products and services to the needs and tastes of the customers.

5. By providing quality marketing information to the decision maker, MIS helps in improving the
quality of decision making.

4.4 Types of Marketing Information

A Marketing Information System supplies three types of information.

1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly,
quarterly, or annual interval. This includes data such as sales, Market Share, sales call reports,
inventory levels, payables, and receivables etc. which are made available regularly. Information
on customer awareness of company’s brands, advertising campaigns and similar data on close
competitors can also be provided.

2. Monitoring Information is the data obtained from regular scanning of certain sources such as
trade journals and other publications. Here relevant data from external environment is captured
to monitor changes and trends related to marketing situation. Data about competitors can also be
part of this category. Some of these data can be purchased at a price from commercial sources
such as Market Research agencies or from Government sources.

3. Problem related or customized information is developed in response to some specific

requirement related to a marketing problem or any particular data requested by a manager.
Primary Data or Secondary Data (or both) are collected through survey Research in response to
specific need. For example, if the company has developed a new product, the marketing manager
may want to find out the opinion of the target customers before launching the product in the
market. Such data is generated by conducting a market research study with adequate sample size,
and the findings obtained are used to help decide whether the product is accepted and can be
launched.

Marketing Intelligence System

This is a set of procedures and sources used by managers to obtain everyday information about
developments in the marketing environment. This system supplies ‘happenings’ data unlike
Internal Records System which supplies ‘results’data. Marketing managers collect data from
publishedsources like books, magazines and journals; by talking to customers, intermediaries and
sales personnel. Some companies appoint specialists to gather consumer and competitor
information, who does mystery shopping to monitor the performance of their own or competitor’s
dealers. Competitor information can also be obtained by buying their product, attending their
press conferences, trade shows and reading their annual reports. Companies purchase commercial
information from outside suppliers and market research agencies like IMRB, ORG – MARG to obtain
competitive data on their sales, advertising expenditures etc., besides their own.

Marketing Research System

This is the third component of MIS. Marketing Research provides information to marketing
manager when he/she encounters marketing problems. This may involve conducting Marketing
Research survey by collecting primary data. These surveys may be conducted by the marketing
department itself or it can hire services of an external marketing research agency.

Analytical Marketing Systems

Also known as Marketing Decision Support systems (MDSS), this is a co-ordinate collection of data,
systems, tools and techniques with supporting software and hardware by which an organization
gathers and interprets relevant information from business and environment and turns it into a
basis for marketing action. All the data which is generated through the other three systems
described above are stored in a data base. The storage and retrieval capability of decision support
system allows the collection and use of a wide variety of data throughout the company. Senior
managers can access the data base and continually and monitor sales, markets, performance of
the sales people and other marketing systems as well.

Marketing Research

Earlier we saw that Marketing Research is an important component of the Marketing Information
System. Marketers need to acquire good understanding of their own markets to monitor the
changing environment. They need information to assess their own past performance as well as to
prepare future marketing plans. Hence they require timely and accurate information on their
consumers and competitors as well as on the performance of their products. In today’s highly
competitive and complex environment consumer needs are changing at a fast pace. Hence
decision making is very challenging.

Marketing Research performs the task of collecting, recording and analyzing relevant data. Thus,
it has emerged as one of the important activities of the marketing function.

American Marketing Association (AMA) defines Marketing Research as –

Definition: Marketing Research is the function which links the consumer, customers and public
to the marketer through information – information used to identify and define marketing
opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing
performance; and improve understanding of marketing as a process.

Philip Kotler defines Marketing Research as – the systematic design, collection, analysis and
reporting of data findings relevant to a specific marketing situation facing the company.
4.7 Features of Marketing Research

1. It is a systematic process – It has to be carried out in a stepwise and systematic manner and
the whole process needs to be planned with a clear objective.

2. It should be objective – It is important that the methods employed and interpretations are
objective. The research should not be carried out to establish an opinion nor should it be
intentionally suited towards predetermined results.

3. It is multi-disciplinary – Marketing Research draws concepts from other disciplines such as

Statistics for obtaining reliable data and from Economics, Psychology and sociology for better
understanding of buyers.

4.8 Objectives of Marketing Research

Marketing Research may be conducted for different purposes. Based on how organizations use
Marketing Research, objectives of Marketing Research can be summarized as follows:

1. To understand why customers buy a product

2. To forecast the probable volume of future sales or expected market share

3. To assess competitive strengths and strategies

4. To evaluate the effectiveness of marketing action already taken

5. To assess customer satisfaction of company’s products/services

3b, Characteristics affecting Consumer Behavior

Cultural, Social, Personal and Psychological factors influence the consumer behavior. These are
external to the company and cannot be controlled. Marketer would like to understand the impact
of these factors on his/her organization

I. Cultural factors:

1. Culture is the combination of customs, beliefs and values of consumers in a particular nation.
Majority Indians are vegetarians and a company which sells non vegetarian items should analyze
these values of the consumer. For example, KFC which sells chicken dishes all over the world
added vegetarian burgers in their menu to serve vegetarian consumers. Another multinational
McDonald, whose majority of sales comes form selling beef lets, didn’t include in the Indian menu
as cow is a sacred animal.

2. Subcultures are part of culture comprising, geographic regions, religions, nationalities and
racial groups. The value system of these groups differs from others. For example, Hindus in north
India eat special vegetarian food during the Navaratra festival. They prefer to spend their time
with their family. During this time restaurants will have lesser traffic. To attract the customers,
restaurants started offering the authentic Navaratra dish. This helped the restaurant to attract
the family who don’t have time, bachelors and people want to spend their time with family
without allotting much time for food preparation and so on.
3. Social class – these are permanent groups in the society whose members have common likings.
According to Mckinsey consumer report, Indian consumers can be classifies into five different
categories. They are,

a. Deprived

b. Aspires

c. Seekers

d. Strivers and

e. Global Indians.

1. Deprived are the people who earn less than Rs 90,000 annually. This group is also known as
below poverty line. They are the poorest people in the country. They won’t get continuous
employment and they earn their lively hood from seasonal work. People in this category will do
less skilled or semi skilled work.

2. Aspires belongs to the families who earn between Rs90, 000 to Rs 2, 00,000. This group consist
small shop keepers, industrial workers, and small land holding farmers. Though they earn more
than deprived class, but half of their money goes for basic amenities and food.

3. Seekers earn between Rs 200,000 to 500,000. This class varies largely. The group contains fresh
workers, middle level employees, government employees and business people. The class varies
widely on the age, attitude and other factors.

4. Strivers belong to the group who earn between Rs 500,000 to 1,000,000. People in this category
are considered very successful. The group contains business people, large farmers, senior
government officials and professionals. Their earnings are enough to fill their apatite of materials.
They are leading the consumption led growth in India.

5. Global Indians are earning more than Rs 1,000,000. This group is comprised of senior
government officials, professionals, business people and top business executives. India is
witnessing the growth in this class. They are truly global; they purchase international brands and
have international cuisine.

II. Social factors

Human beings are social animals. They live and interact with other people. Therefore there is a
chance of influence by others on their opinions. Marketers like to identify such influential persons
or groups of consumer. Generally such groups are classified into two major groups namely
reference groups and family.

Reference groups are used in order to evaluate and determine the nature of a given individual or
other group’s characteristics and sociological attributes. Reference groups provide the
benchmarks and contrast needed for comparison and evaluation of group and personal
characteristics. “Reference groups are groups that people refer to when evaluating their own
qualities, circumstances, attitudes, values and behaviors." – William Thompson & Joseph Hickey,
Society in Focus, 2005” Reference groups act as a frame of reference to which people always refer
to evaluate their achievements, their role performance, aspirations and ambitions
Family: Indian culture gives utmost importance to the family. People discuss with their family
before purchasing the valuable items. Wife, children and parents influence the decisions of the
family. Therefore many companies use either whole family or kids in their promotional programs.

Personal factors

Individual factors like age, occupation, lifestyle and personality influence the consumer decision
making. We discussed age and occupation factors and their application earlier in the marketing
environment unit. We will discuss lifestyle and its influence on the consumer in the segmentation
unit. In this section we will focus on the personality and its influence on the consumer decision
making process. Personality is the image of people’s traits. Traits include Self confidence,
Dominance, autonomy, defensiveness, adaptability and aggressiveness. Many companies used
these concepts in their marketing communications. Bajaj pulsar used muscularity to highlight its
image (definitely male). Fair and lovely and stay free tried to highlight 21st century Indian girl and
their aspirations in their communications.
IV. Psychological factors:

Motivation:

Abraham Maslow’s “Need Hierarchy Theory”:

One of the most widely mentioned theories of motivation is the hierarchy of needs put forth by
psychologist Abraham Maslow. Maslow saw human needs in the form of a hierarchy, ascending
from the lowest to the highest, and he concluded that when one set of needs is satisfied, this kind
of need ceases to be a motivator.

i Physiological needs: These are important needs for sustaining the human life. Food, water,
warmth, shelter, sleep, medicine and education are the basic physiological needs which fall in the
primary list of need satisfaction. Maslow was of an opinion that until these needs were satisfied to
a degree to maintain life, no other motivating factors will work.

ii Security or Safety needs: These are the needs to be free of physical danger and of the fear of
losing a job, property, food or shelter. It also includes protection against any emotional harm.

iii Social needs: Human beings are social animals. They strive to be in the society. In this type of
needs people will try to satisfy their needs for affection, acceptance and friendship.

iv Esteem needs: According to Maslow, once the people satisfied with social needs. They would
like to have esteem needs. This category includes power, prestige status and self-confidence
needs. It includes both internal esteem factors like self-respect, autonomy and achievements and
external esteem factors such as states, recognition and attention.

v Need for self-actualization: Maslow regards this as the highest need in his hierarchy. It is the
drive to become what one is capable of becoming; it includes growth, achieving one’s potential
and self-fulfillment. It is to maximize one’s potential and to accomplish something

Marketer is interested in finding what state of need hierarchy the consumer is in and what type of
product to be developed to suit his or her needs. If person needs security for his car than the
mileage then auto companies should highlight that benefit in their marketing communications.

Perception:
It is the process of acquiring, interpreting, selecting and organizing sensory information.

Explanation of the definition: stimulus is generated by hearing, smelling, seeing, touching, and
tasting. People develop stimulus about product or services through any of the above themes and
creates an image in the mind.

The marketing implication of the definition; Marketer researches his consumer profile and
communicates the product or service messages either through radio, demo, or television. By
seeing, hearing or experiencing the product or service consumer will develop an image in the
mind. The message given by company may pass through three different selection procedures.

a) Selective attention: The habit of the people to analyze the information completely and
interpreting it. They develop the perception about the product or service only after complete
analysis. This is very difficult group to handle as they request for more information.

b) Selective distortion: the phenomena in which consumer will have predispositions and interpret
the organizations information as they like it. This type of perception is both effective and non
effective for the company. If consumer understands the wrong message in a right way it is
advantageous but if he understand right message in wrong way then company will be under
trouble.

c) Selective retention: consumer will not remember all the points informed by the company.
He/she may remember the good points of company and forget the negative points of the
company.

Complex buying behavior: Customers who are representing this behavior are highly involved in
the purchase of the product or service. The process became complex as difference between
brands are very high. For example, customer who wants to purchase refrigerator would like to
know the meanings of defrosting, door lock, digital temperature control etc. The price of the
product usually high let me show you the comparison of three brands and significant difference
between them.

Dissonance reducing buying behavior:

The behavior exhibited by the customer when product purchase requires high involvement but
only few differences exist. For example, customers who want to purchase CTV will not find many
differences between the brands but the price of the product and its technicality makes customer
to involve more. One of the major disadvantages of this type of behavior is customer will show
post purchase dissonance which is very difficult to control.

Variety – seeking buying behavior

When there are significant difference between the brands existing but customer will not involve
more while purchasing, marketer identify this behavior as variety seeking buying behavior. Let us
discuss the purchasing behavior of customer for biscuits. There are many varieties of biscuits
available. One can purchase salt biscuits, cream biscuits, Marie biscuits, and milk biscuits of
Britannia, Parle, ITC sun feast and others. The customer who purchased Britannia tiger earlier may
purchase Sun feast cream biscuit next time. This doesn’t mean that quality of Britannia tiger is
inferior to other brands but customer would like to try the varieties available in the market. In
this situations marketer should undertake following steps
a. The market leader should encourage customers to buy repeatedly.

b. Make the product available and visible to the customer in the shopping places.

c. The firm who are not market leader should come out with sales promotion techniques to
encourage customer to purchase the product.

Habitual buying behavior:

The low involvement between the brands and few differences between the brands leads to the
habitual buying behavior. For example spice powder marketed by MDH, Everest or MTR have very
few difference between them and customer do not search the information to purchase particular
product. Marketers whose customer represents this category should follow below listed strategies

Consumer Buying Decision Process

After discussing the factors those influence the buying behavior, now, we will discuss the
consumer decision making process. Consumer passes through five different stages while purchasing
the product.

1. Need recognition: customer posses two type of stimuli’ at this juncture. One is driven by the
internal stimuli and another is external stimuli. The examples of internal stimuli are customer’s
desire, attitude or perception and external stimuli are advertising etc. From both stimuli
customers understand the need for the product. Here marketer should understand what customers
needs have that drew customers towards the product and should highlight those in the
communication strategy.

2. Information search: In this stage customer wants to find out the information about the
product, place, price and point of purchase. Customer collects the information from different
sources like

a. Personal sources: Family, friends and neighbors

b. Commercial sources: Advertising, sales people, dealers, packaging and displays.

c. Public sources: mass media and consumer rating agencies.

d. Experiential sources: Demonstration, examining the product.

In this stage marketer should give detailed information about the product. The communication
should highlight the attributes and advantages of the product in this stage so that he created the
positive image about the product.

3. Evaluation of alternatives: After collecting the information, consumers arrive at some

conclusion about the product. In this stage he will compare different brands on set parameters
which he or she thinks required in the product. The evaluation process varies from person to
person. In general Indian consumer evaluate on the following parameters

a. Price

b. Features
c. Availability

d. Quality

e. Durability

At this stage marketer should provide comparative advertisements to evaluate the different
brands. The advertisement should be different for different segments and highlight the attribute
according to the segment.

4. Purchase decision

In this stage consumer buy the most preferred brand. In India affordability plays an important role
at this stage. Organizations’ bring many varieties of the products to cater to the needs of
customers.

5. Post purchase behavior

After purchasing the product the consumer will experience some level of satisfaction and
dissatisfaction. The consumer will also engage in post purchase actions and product uses of
interest to the marketer. The marketer’s job does not end when the product is bought but
continues into the post purchase period. Customer would like to see the performance of the
product as he perceived before purchase. If the performance of the product is not as he expected
then he develops dissatisfactions. Marketer should keep an eye on how consumer uses and
disposes the product. In some durable goods Indian consumer want resale value also. Many
automobile brands that were not able to get resale value lost their market positions.

5.5 Buyer Decision Process for New Products

The buyer’s decision for existing products and new products varies. You already seen in the
existing product buying decision process consumers have the option to search for the information
and evaluate them. In the new product such options don’t exist. Therefore we should understand
how consumer comes to know about the product. Kotler defined this process as adoption process.
According to Philip Kotler Adoption is ‘The mental process through which an individual passes from
first hearing about an innovation to final adoption’.

1. Awareness: the consumer became aware of the product but lacks information about it.

2. Interest: By this stage previous information is available, consumer shows interest to get the
information about the product.

3. Evaluation: After receiving the information consumer analyzes the benefits of new products
over any existing products or substitutes and decides whether to buy or not.

4. Trial: The consumer tries the new product on a small scale to improve his or her estimate of its
value.

5. Adoption: In this stage consumer decides to make full and regular use of the product.
Product buying motives are those influences and reasons which prompt a buyer to choose a
particular product in preference to others. It may be design, shape, dimension, size, color,
package etc…

Product buying motives are further classified as

a. Emotional product buying motive and

b. Rational product buying motive

a. Emotional product buying motives in which buyer decides to purchase a product without
thinking over the matter logically and carefully. Buyer takes the decisions on the emotions.
Following factors provides the list that influence the emotional product buying motives

1. Customer attaches the pride with the product.

2. Customer try to imitate form others

3. Purchase d the goods for affection on any family member.

4. Products that provide comfort are usually purchased on the emotions.

5. Sexual appeal products are brought on emotional product motives

6. The product those used as recreation, hunger or habit products are usually bought emotionally.

7. Products those provide distinctiveness or individuality.

b. Rational product buying motives: When buyer examines pros and cons of purchasing a product
and takes decisions then the behavior is called as rational product buying motives. Buyers will be
looking for any of the following factors before taking rational decisions

1. The safety or security features provided by the product.

2. The value for money provided by the product.

3. Suitability and utility of the product.

4. Durability of the product.

5. Convenience of the product.

2. Patronage buying motives are those considerations or reasons that make a buyer patronage a
particular shop in preference to other shops while buying a product.

Patronage buying motives are classified into two categories. They are

a. Emotional patronage buying motives.

b. Rational patronage buying motives.

a. Emotional patronage buying motives are patronizing a particular

shop without logical thinking or reasoning. Emotional patronize

buying motives include the following decisions

1. Appearance of the shop

2. Visual merchandising in the shop.

3. Reference groups influence about one particular shop.

4. Shopping in a big mall is a prestige issue.

5. Imitating the other reference groups’ members.

b. Rational patronage buying motive will arises after buyer analyzing the shop carefully and
providing the information to reference group members. Rational patronage buying motives include
the following

1. Convenience of the shop to the buyers.

2. Value for money provided by the shops.

3. Financial schemes and facilities provided by the shop.

4. Availability of wide range of goods.

5. Reputation of the shop in the area.

6. Sales force efficiency to convince the customer.

7. Services provided by the sales executives.

4a, Each firm needs to develop a distinctive positioning for its market offering.

Positioning is the act of designing the company’s offering and image to occupy a distinctive place
in the target market’s mind. Many marketers advocate promoting only one central benefit and
Rosser Reeves called it as “a unique selling proposition”. Some of the USPs includes “best
quality”, “best service”, “Lowest price”, “best value”, “safest”, “more advanced technology”
etc. If a company hammers away at one of these positioning and delivers on it, it will probably be
best known and recalled for its strengths.

Not everyone agrees that single-benefit positioning is always best. Double-benefit positioning may
be necessary if two or more firms claim to be best on the same attribute. There are even cases of
successful triple-benefit positioning.

As the companies increase the number of claims for their brand, they risk disbelief and a loss of
clear positioning. In general, a company must avoid four major positioning errors.
1) Under positioning: Some companies discover that buyers have only a vague idea of the brand.
The brand is seen as just another entry in a crowded marketplace.

2) Over-positioning: Buyers may have too narrow image of the brand.

3) Confused Positioning: Buyers might have a confused image of the brand resulting from the
company’s too many claims or changing the brand’s positioning too frequently.

4) Doubtful Positioning: Buyers may find it hard to believe the brand claims in view of the
product’s features, price or manufacturer.

Positioning maps:

Two dimensional graphs of how a product, brand or company is perceived versus competition.

Before identifying the positioning strategies for the product, marketer prepares its perceptual
maps. These maps are drawn on important buying dimensions of consumer for company products
as well as competitor products.

How to construct Position maps?

1. Evaluate the buying dimensions of customer

2. Select two buying dimensions of consumer; for example price and quality.

3. Identify the relative market share: relative market share is the ratio of company’s market share
to its largest competitors’ share.

4. Draw the circles according to relative market share on two dimension graph

Bases for positioning the product

Overcoming the positioning difficulties enables the company to solve the marketing-mix problem.
Thus seizing the “high-quality position” requires the firm to produce high quality products, charge
a high price, distribute through high-class dealers and advertise in high-quality media vehicles.

The bases for positioning strategies are:

1. Attribute Positioning: A company positions itself on an attribute such as size or number of

years in existence. For example, Sunfeast positions its snacky brand as bigger lighter and
crisper.

B,

High Involvement Low involvement

Significant differenceComplex buyingVariety seeking buying

between brands behavior behavior

Few differences betweenDissonance reducingHabitual buying behavior.

brands buying behavior

Complex buying behavior: Customers who are representing this behavior are highly involved in
the purchase of the product or service. The process became complex as difference between
brands are very high. For example, I wants to purchase computer would like to know the meanings
of speed, specification, colour,warrenty,moving model and the price of the model etc. The price
of the product usually high let me show you the comparison of three brands and significant
difference between them.

Table 5.1

Dell Thoshiba HP
speed
2.53 2.53 2.53
warrenty
1year 2year 1year
Colour
3 colours 2 clours 4 clours
specification
i.3 i.3 i.3
Moving
good fast good
From the above example it is clear that marketer should first develop the belief about the brand,
provide the information and differentiate the company brand from others. In the above example I
can see both Thoshiba and LG don’t have water dispenser while Electrolux have. Both LG and
Electrolux have moisture and humidity control while Akai lacks it. Customer would like to know
what these features are and how they add value to the product.

Dissonance reducing buying behavior:

The behavior exhibited by the customer when product purchase requires high involvement but
only few differences exist. For example, customers who want to purchase CTV will not find many
differences between the brands but the price of the product and its technicality makes customer
to involve more. One of the major disadvantages of this type of behavior is customer will show
post purchase dissonance which is very difficult to control.

Variety – seeking buying behavior

When there are significant difference between the brands existing but customer will not involve
more while purchasing, marketer identify this behavior as variety seeking buying behavior. Let us
discuss the purchasing behavior of customer for biscuits. There are many varieties of biscuits
available. One can purchase salt biscuits, cream biscuits, Marie biscuits, and milk biscuits of
Britannia, Parle, ITC sun feast and others. The customer who purchased Britannia tiger earlier may
purchase Sun feast cream biscuit next time. This doesn’t mean that quality of Britannia tiger is
inferior to other brands but customer would like to try the varieties available in the market. In
this situations marketer should undertake following steps

a. The market leader should encourage customers to buy repeatedly.

b. Make the product available and visible to the customer in the shopping places.
c. The firm who are not market leader should come out with sales promotion techniques to
encourage customer to purchase the product.

Habitual buying behavior:

The low involvement between the brands and few differences between the brands leads to the
habitual buying behavior. For example spice powder marketed by MDH, Everest or MTR have very
few difference between them and customer do not search the information to purchase particular
product. Marketers whose customer represents this category should follow below listed strategies

a. Use price and sales promotions to stimulate product trial.

b. Use more visual aspects than the wordings in the advertisements

c. Television is the better media for this type of products.

d. Use classical conditioning theory to create advertisements.