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Summer / May 2012

Master OF Business Administration

Second Semester

Assignment Set- 2 (60 Marks) Name Registration Number Learning Center Code Learning Center Name : : : : PAWAN KUMAR 571122876 01713 Apar India College of management & Technology (Delhi)

Q1. Differentiate between Consumer market and business market. Business Marketing is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short. (Note that while marketing to government entities shares some of the same dynamics of organizational marketing, B2G Marketing is meaningfully different. While consumer marketing is aimed at large demographic groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. According to Hutt and Speh (2001), most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals. While that advertising is limited, it often helps the business marketer set up successful sales calls.
List of important differences between Consumer market and business markets:

1. Organizational consumers purchase capital equipment, raw materials, semi finished goods, and other products for use in further production or operations or for resale to others, whereas final consumers usually acquire the finished items for personal, family, or household use. 2. Organizational consumers are likely to require exact product specifications. Final consumers more often buy on the basis of description, style, and color. 3. Organizational consumers often use multiple-buying responsibility, in which two or more employees formally participate in complex or expensive purchase decisions. Final consumers employ it less frequently and less formally. 4. Derived demand occurs for organizational consumers because the quantity of items they purchase is often based on the anticipated demand of their final consumers for specific finished goods and services; therefore, organizational consumers are less sensitive to price changes. As long as final consumers are willing to pay higher prices, organizational consumers will not object to price increases. 5. Demand is volatile due to the accelerator principle, whereby final consumer demand affects many levels of organizational consumers. 6. There are fewer organizational consumers than final consumers.

Q2. What is branding? Discuss the components of Brand Equity. Branding is a process involved in creating a unique name and image for a product in the consumers' mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers. Your brand strategy is how, what, where, when and to whom you plan on communicating and delivering on your brand messages. Where you advertise is part of your brand strategy. Your distribution channels are also part of your brand strategy. And what you communicate visually and verbally is part of your brand strategy, too "Brand Equity" is set of assets linked to a brands name and symbol that adds value to the product or service and/or that firms customer. Components of brand equity: 1. Brand loyalty 2. Brand awareness 3. Perceived quality 4. Brand associations Brand Loyalty Is consumer's commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, occasionally at least, to put aside their own desires in the interest of the brand. This will help organization to reduce the promotion cost. For example, many girls in India use only Ponds products, though competitors products like Fa, Spinz, Cuticura, and Mysore Sandal are present in the market and vice versa. Brand Awareness The number of customers exposed to the brand name. Higher the brand awareness, higher will be the brand equity. Organizations put all the effort in the introduction stage of the product to create awareness among the customers. For example, Xerox Company has huge brand awareness since photocopier machines were introduced by this company and even today photocopies are referred as Xerox copies. Perceived Quality The customer perception about the actual quality level of the product. For example, when a customer purchases Levis jeans he knows that it indicates quality even though there are several cheaper brands of jeans available in the market. Brand Associations

The attribute of the brand that customer associates with his/ her belief. A person may associate the brand for power, strength or protectiveness. For example, a customer may associate Nike brand not just for sports shoes but also any accessory associated with sports. So, for him, Nike represents sports. Q3. What are the functions of marketing channels? FUNCTIONS OF MARKETING CHANNELS Marketing channels (Distribution channels) move goods and services for producers to consumers. It overcomes the major time, place and possession gaps the separate good and services from those who would use them. Manufacturers, wholesalers, and retailers as well another channels members exist in channel arrangements to perform one or more of the following generic functions: Information gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange. Promotion: Developing and spreading persuasive communications about an offer. Contact: Finding and communicating with prospective buyers. Matching: Shaping and fitting the offer to the buyers needs including activities such as manufacturing, grading, assembling and packaging. Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred. Others help to fulfill the completed transactions. Physical distribution: Transporting and storing goods. Financing: Acquiring and using funds to cover the costs of the channel work Risk taking: assuming the risks of carrying out the channel work Carrying of inventory, demand generation or selling, after sales services. In getting its goods to end users, a manufacturer must either assume all these functions or shift some or all of them to channel intermediaries. The foregoing discussion underscores three important principles in the structure of marketing channels

Q4. Explain the different methods which allows a media planner to decide budget allocation Media vehicle selection, number of insertions and message structure depend on the budget allotted for the communication program. A popular channel may charge more for advertisement but organization gets better viewership. A newspaper having high circulation charges premium for the advertisement but all the organization may not have enough budgets to support such campaign. Hence marketer would like to decide what is the budget for the communication program? And how shall it be allotted optimally? There are four different methods on which a media planner decides the allocation of advertisement budget. 1. Affordable method: The method is used by small companies who dont have enough communication budgets. In this method company allots the fixed amount for the communication program. The advantage of this method is company can have better control over the spending on the communication. The disadvantage is if sales require higher communication effort, company is not in a position to allocate the budget. 2. Percentage of sales method: In this method company allots the budget on the basis of total sales forecasted. This is the simplest method. Marketer can have better control over the budget and also have flexibility to allocate the budget. 3. Competition method: The Company sets its promotion budget on the basis of competitors advertising effort. Here company closely monitors the developments of the competitors communication program and study the industry trends in communication budget prior to setting up communication budget. 4. Objective and task method: The procedure involved in estimating the advertisement budget by this method are First, Objectives are set for the communication programs. Second, identifying the task to be performed to achieve the objective and third, estimating the cost of achieving these objectives. Q5. Define the term direct marketing Explain the different methods adopted for direct marketing. When the company or organization is involved in marketing activities (usually selling products) without the use of any intervening media or channel, then it is called as Direct Marketing. The company directly sells its products to the final consumer and the consumer is expected to respond immediately or at the earliest. Direct marketing is sometimes called as B2C marketing for example, direct factory shoe sale. Following are the methods of Direct Marketing: 1. Direct mail: It is the most common method used in direct marketing, it involves sending postal mails to the consumers address and consumers may be randomly chosen or specifically selected as targets. For example, credit card applications forms sent by banks,

travel guides or manuals sent by tour operators, free trial packs of products sent by companies, subscriptions offers for magazines etc. 2. Telephone marketing: Telephone marketing is used to sell the product directly to consumer. The growth of BPOs in India fuelled the development of telephone marketing. In the case of BPOs, two types of verticals exist. They are inbound call center and outbound call center. In case of inbound call center, customer is given a toll free number for enquiry and executives try to sell the product to such customers. In out bound call center employees call the customers and sell the products. The expansion of Indian telecommunication industry and its cheapest tariffs in the world attracted domestic sellers to use this type of channel. 3. Catalogue marketing: According to Philip Kotler, catalogue marketing is direct marketing through print, video or electronic catalogues that are mailed to select customers, made available in stores or presented online. The growth of catalogue marketing in India is in a nascent stage. The notable example in this type of marketing worldwide is J.C. Penny. 4. Kiosk marketing: Organizations spreads the information and keep ordering machines called kiosks in the shopping malls and other places. For example, Ambi Pur a perfume company recently organized a kiosk related marketing campaign in the Nirmal life style Mumbai. Company used inflatable as shown in the pictures to attract the small boys. Parents who came along with their children stopped at Kiosk and got the information from the company. The objective of campaign was to create awareness about the product among the target customers. 5. Online marketing: Marketing the organizations product on the virtual medium using the company websites as selling point or ordering point for the consumers. Sometimes companies use e-mails to offer their products and make a sale to the prospective consumers or even existing consumers. In this format buyers and sellers exchange the products on the internet. Organizations sell their products directly to consumers (called B2C), use trading networks or auction sites to reach new customers and serve current customers (called B2B) and encourage one customer to sell the product to the another customer (called C2C). Q6. Differentiate between International marketing and Domestic marketing. The important differences between International marketing and Domestic marketing are: Scope The scope of domestic marketing is limited and will eventually dry up. On the other end, international marketing has endless opportunities and scope. Benefits As is obvious, the benefits in domestic marketing are less than in international marketing. Furthermore, there is an added incentive of foreign currency that is important from the point of view of the home country as well. Sharing of technology Domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies.

Political relations Domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result. Barriers In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs.