DRIVE-WINTER 2014

PROGRAM-MBADS/ MBAFLEX/ MBAHCSN3/ MBAN2/ PGDBAN2

SEMESTER-2
SUBJECT CODE & NAME-MB0046- Marketing Management
BK ID-B1629 CREDIT & MARKS-4 Credits, 60 marks

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Q1. Suppose you are the marketing manager of a banking firm. Your bank has opened its first
branch overseas. What factor do you think will affect the choice of marketing the most and why?

Define environment scanning 2

Demographics 2
Political and Legal environment 3
Socio-cultural environment, 3 10

Answer.
Environmental scanning is designed to aid the long-term planners and strategists in the organisations.
Many people criticise the environmental scanning technique because of the diffused and general nature of its
results. Companies use various methods for environmental scanning.
Delphi technique
Delphi technique is used to increase the meaning of factual data collected from secondary sources. This
technique is an example of methods on which we aggregate the judgments of individual experts who cannot
come together physically.
Scenario building technique of environmental scanning
This process is futuristic and the decision-maker has to analyse his decisions with respect to the future.

Demographic environment
Demography is the study of population and its characteristics. Marketers are always interested in population
related growth indices because eventual market growth rate in the long run depends largely on the growth of
population.
Population mix
If a majority of the population is vibrant and in the work force, then they contribute towards the countrys
growth and have higher power of consumption, but as the population ages, their demand for products and
services gets restricted.
Country market it is based on ethnicity and language based classification in India. Though a market can be
characterised by a geographical boundary to be called as a country market, like Indian market, in reality it is
the sum total of some sub-markets identified more closely with the ethnicity and language based divisions in
India. A consumer durable company has to offer a festive discount program throughout the year in different
parts of the country.
Education Consumption patterns also vary depending on the education level of the people. People who are
educated and aware of their rights and demands will always make a concerted decision when compared to
people who are illiterate.
Household patterns This explains the family types in a demographical environment. Household incomes
are on a rise due to both husband and wife taking up careers. This has also led to growth in consumption and
use of products and services that provide more convenience to the working woman
Shifts in population Over the years, a large number of people have moved out of villages and rural areas to
urban India in search of a job and better living conditions.
Political and legal environment
Legal and political environment also influences marketing decisions in a significant way.
Government plays a great role in moderating the role of business in the society through legislation. There has
been a growth in the number of legislations over a period of time to let the business know that before they play
the game, they should learn the rules.
There are certain legislations brought at the central government level whereas some are practised differently in
different states of India. This is a critical issue related to sales and different kind of taxes. Though Value Added

Tax (VAT) tries to simplify them, it is not always possible to bring uniformity in legislation across the states.
Laws like Monopoly Restricted Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) are
dumped in order to promote growth of free enterprise in India. Business legislation in India can be classified
into legislation covering corporate affairs, consumer protection, employee protection, specific sector protection
like small scale industry, protection of companies against hostile takeover bids, protection against unhealthy
price, and distribution practices related to deceptive advertising.
Social and cultural environment
Social and cultural environment have maximum direct effect on consumers. Social forces shape consumption
habit of people. Let us look at the processed food in Indian markets. Due to the changes in lifestyle and more
and more women taking up jobs, there is a rising demand for processed and packaged food. Packaged brands of
chicken and other frozen foods are doing well in the Indian market. The societal environment is the marketers
relationship with society in general. It is an explanation of readiness of the society to accept a marketing idea.
For example, frozen, packed chicken is an acceptable product proposition but frozen beef may not be a good
idea on the retail shelf in a large part of India. Taste and consumer behaviour also vary from place to place. For
example, in India, brands like Dettol have a higher impact on people because of its burning sensation, whereas
Savlon does well in Europe due to its mild nature.
Culture influences consumers beliefs, values, and norms. Culture includes knowledge, belief, art, morals, laws,
custom, and any other capabilities and habits acquired by a consumer as a member of the society. It is a distinct
way of life of a group of people and their complete design of living. It is everything that is socially learned and
shared by the members of the society.
The marketing manager needs to understand how the consumers react to different products and marketing
practices in a social setting. One of the most tragic and avoidable marketing mistakes is the failure of marketing
managers to understand and appreciate societal differences within the Indian market.

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Q2. A brand is a composite set of beliefs and associations in the mind of consumers. In brand
development, as a part of branding strategy decision, the brand manager can decide to create
new brand elements for the new products, apply some of the existing brand elements to the new
product, or use a combination of existing and new brand elements to the existing and new
products. Explain the different branding strategies used by the companies for their range of
products.
(Definition of Brand, Advantages of Brand, Explanation of different branding strategies adopted by
companies)2,2,6
Answer.
Definition of Brand
Brand is name linked to one or more items in the product line that is employed to recognise the source or
character of item(s).
Example: prudential help in recognising the source or character of an item of a product line.
Advantages of Brand
(a) A brand promises and delivers a high level of assurance to consumers.
(b) A brand serves as an assurance to the customer about the product performance. A brand helps customers to
identify the product on the shelf and helps in making an informed choice.
(c) A brand as a symbol of status and social significance gives you psychological satisfaction.
(d) The brand speaks about the product's attributes and how they perform, about the brand name and what it
stands for and about the company associated with a brand. Hence, for a consumer, the brand aids decision
making by building trust, familiarity, and assurance of a certain standard.
The brand also provides benefits to the company. It develops a loyal customer base e.g., brands like Starbucks
coffee, Harley, Lux, Kellogg's, and Horlicks have a strong loyal consumer base.
Companies use different branding strategies for their range of products. They can be categorised into the
following three types.
1. Individual branding In this case, the company adopts a separate brand name for each product it offers.
For example, Hindustan Lever markets its range of toothpastes by different brand names such as Close-up,
Pepsodent, Pepsodent-G, and New Pepsodent. Likewise, it offers bathing soaps in different brand names such as
Liril, Rexona, Lux, Lifebouy Plus, and Lifebouy Gold. The major advantage of individual branding is that if one
brand loses its market, the others may offset sales in the particular product category.

2. Family branding This is another type of branding strategy followed by some companies which have
developed their family names. For example, Godrej is a family name used for all its products. Likewise, Ponds
uses its name for all products that include shampoos, talcum powders, and creams. The major advantage of
using family name for products is that it minimises advertising and other promotional costs.
3. Corporate umbrella branding Companies such as Tata, Coke, and Pepsi are not only using individual
brand name for the range of products they market but also use a corporate umbrella cover for their brands. It is
the corporate logo, symbol, or trademark which provides protection to the individual brand.

Q3. Describe the international market entry strategies in brief.

(Joint ventures 2, Strategic alliances 2, Direct investment 2, Contract manufacturing 2, Franchising 2) 10
Answer: The international market entry strategies are:
Joint venture
A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share
markets, intellectual property, assets, knowledge, and profits. A joint venture differs from a merger, in the sense
that there is no transfer of ownership in the deal.
For example, Best Price Modern Wholesale is a joint venture between Wal- Mart and Bharti Enterprises.
American retail giant Wal-Mart chose this route to enter the Indian market.

Strategic alliance
A strategic alliance is formed when two or more businesses join together for a set period of time. The
companies, generally, are not in direct competition, but have similar products or services that are directed
towards the same target group. For example, Tata Motors and Fiat entered into a strategic alliance to cooperate
in areas like research and development, and marketing.
In the new economy, strategic alliances enable business to gain competitive advantage through access to a
partner's resources, including markets, technologies, capital, and people. Choosing a strategic alliance as the
entry mode will overcome some of those problems like established competition, hostile government regulations,
and operating complexity. In the process, it will help reduce the entry cost.
Direct investment

Through Foreign Direct Investment a firm invests directly in facilities to produce and/or market a product in a
foreign country. For example, in the early 1980s, Honda, a Japanese automobile company, built an assembly
plant in Ohio and began to produce cars for the North American market. These cars were substitutes for imports
from Japan. Once a firm undertakes FDI, it becomes a Multinational Enterprise (The meaning of Multinational
being more than one country).
Contract manufacturing
Contract manufacturing is a process that establishes a working agreement between two companies. As part of
the agreement, one company will custom produce parts or other materials on behalf of their client. In most
cases, the manufacturer will also handle the ordering and shipment processes for the client. As a result, the
client does not have to maintain manufacturing facilities, purchase raw materials, or hire labour in order to
produce the finished goods. Companies like D-Link, TVS Electronics, and WeP Peripherals offer contract
manufacturing services.
Franchising
Franchising is basically a specialised form of licensing in which the franchiser not only sells intangible property
(normally a trademark) to the franchisee, but also insists the franchisee to abide by strict rules with respect to
how business is done. The franchiser will also often assist the franchisee to run the business on an ongoing
basis.
While licensing works well for manufacturers, franchising is often suited to the global expansion efforts of
service and retailing. McDonalds, Tricon Global Restaurants (the parent of Pizza Hut, Kentucky Fried Chicken,
and Taco Bell), and Hilton Hotels have all used franchising to build a presence in foreign markets.

Q4. Personal selling focuses in on personal or one to one selling. It involves an individual
salesman or a sales team establishing and building a profitable relationship with customers over
a period of time through a series of steps. Explain the steps in the personal selling process which
helps in the successful sales.
(Definition of Personal Selling, Explanation of steps in the Personal selling process) 2, 8
Answer.
Definition of Personal Selling
Personal selling is an activity which involves a face-to-face interaction with the customers wherein there is a
quick response and personal confrontation. This allows for more specific adjustment of the message. Here, the
communication message can be adjusted as per the customers specific needs or wants. It offers you the
opportunity to develop long-term familiarity and relationship.

Steps in the Personal selling process

Process or steps in personal selling include the following:
1. Prospecting This is the beginning of sales process, which covers searching for customers with potential
demand.
2. Targeting This is the process of deciding how to allocate sales time among prospects and existing
customers.
3. Pre-approach In this step, the salesperson plans methods to approach the customers and to collect
company and customer information.
4. Communication and approach This is the process of communicating and contacting the customers. It
involves developing a system to greet the customers and meet them for the sale. Homer B. Smith has
recommended different approaches. The following are some proven techniques:

Ask questions Questions should preferably be relevant to sales presentation.

Use a referral Someone favourably known to the potential customer.
Offer a benefit or service This can be quite effective if relevant to customers need.
Complement the prospect It is a good way to establish rapport if there is anything that the prospect has
achieved.

5. Presentation and demonstration In this stage, the salesperson gives a sales presentation and if
required demonstrates features, advantages, and benefits and value propositions of the product.
6. Customer objection handling Customers always pose objections during presentations or when asked
to order. Psychological resistance and logical resistance are the two types of resistance seen at this stage. The
psychological resistance includes resistance to interference, preference for established brands, apathy,
reluctance to give up something, etc. The logical resistance includes objections to price, delivery schedule, or
certain companies.
7. Closing Some salespeople do not get to this stage or do not do it well. The salespeople try to close sales
after handling the customer objections.
8. Follow up and maintenance The salesman does follow up and retains the relationship with customers
to obtain repeated orders and referrals and ensures customer satisfaction and repeated business. In the case of
consumer durables, salespeople take care of maintenance.

Q5. Describe the stages in consumer decision making process.

(Explanation of the stages in consumer decision making process) 10
Answer.
Stages in consumer decision making process
Consumer buying decision process is explained through a number of stages and is influenced by ones
psychological framework comprising the individuals personality, learning process, levels of motivation,
perception towards products and brands, and formation of positive attitude towards the brand. Figure below
depicts the process of consumer decision-making in detail.

1 Problem recognition
A buying process starts when a consumer recognises that there is a substantial discrepancy between his/her
current state of satisfaction and expectations in a consumption situation.

2 Information search
After need arousal, the behaviour of the consumer leads towards collection of available information about
various stimuli. In this case, information about products and services are gathered from various sources for
further processing and decision-making.
3 Alternative evaluations
Once 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.
The final purchase will however depend on the strength of the positive-intention, which is the intention to buy.

4 Purchase decision
Finally 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
consumption problem is not solved and they may again get involved in the process as we have explained.
5 Post-purchase behaviour
Post-purchase behaviour refers to the behaviour of consumers after their commitment to a product has been
made. 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 satisfied
product-use experience leads to repeated purchase, referrals from satisfied customers to new customers, higher
usage rate, and also brand advocacy.

Q6. Describe some of the strategies for effective marketing and advertising in rural market. Also
explain the innovative use of media in rural market.

Nature of the rural market 2

Strategies 3
Innovative use of media 5 10

Answer.
Nature of the rural market:
The rural areas are where the markets of the future lie. Urban markets are becoming increasingly competitive
and saturated for many products. On the other hand, rural markets offer growth opportunities for firms caught

up in intensive battle in urban and metro markets. Marketing gurus describe rural markets as the market of the
new millennium. According to them, marketers have to understand the rural customers before they can make
inroads into rural markers. A sound understanding of rural consumer behaviour and customer demand patterns
will help the rural marketer to creatively serve the rural market with ample success.

Strategies:
An efficient countrywide distribution network must be created so that company's products are available to
the farmers at their doorstep.
Advertising communication and servicing must be evolved in tune with rural needs and in ways different
from what is effective in larger towns and cities.
There should be a strong research and development team to produce products specifically for rural areas.
Role of trade in distribution and communication must be strengthened.
Pricing of products should be in line with the economic competence of villagers.
Packaging should be simpler and more functional than ornamental.
Innovative use of media:
In rural marketing, institutional promotion is more important than brand advertising. To a marketer, this is
another hurdle because he/she may promote the institution and some other brand may be bought. Inability of
the smaller retailers to carry stocks without adequate credit facilities is an impediment for growth of retail in
rural areas. Rural markets have also inadequate warehousing, which leads to delay in replenishments of stocks.
Marketers must overcome all these barriers to successfully market their product in the rural market.

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