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ASSIGNMENT

DRIVE FALL 2013


PROGRAM BBA, SEMESTER II
SUBJECT CODE & NAME BBA 204 MARKETING MANAGEMENT

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Q.No1Define Marketing and classify on the basis of geographical coverage.


Answer:
Meaning of marketing:
Marketing is a very important aspect in business, since it contributes greatly to the success of the
organization. Production and distribution depend largely on marketing.Marketing embraces all efforts
made in the discovery of consumers' actual and potential requirements for commodities and services and
the steps taken for securing their actual distribution.
Classification:
Communication, transport, science and technology etc., have widened the geographical area of markets.
Four stages are noticed in the geographical development of markets.
1) Family Market: First, family markets existed where exchanges were confined within the four walls or
among the members of a family.
2) Local Market: When buyers and sellers belong to a local area or areas, say a town or village, &
participate in market, it is called a local market. Here, the demands are limited. For example, perishable

goods like fruits, fish, vegetables etc. But strictly speaking such markets are disappearing because of the
efficient system of transportations and communications. However, many villages are still witness to such
markets even today.
3) National Market: For certain commodities, a country may be regarded as a market, through the fast
development of industrialisation. This is referred to as a national market. In India, the goods can reach
another, because of efficient communication system and transport facilities. In the present decade, almost
all the products have national markets as the markets have widened to a great extent.
4) World Market: World or international market arise when buyers and sellers of goods emerge at an
international level i.e., involvement of buyers and sellers beyond the boundaries of a nation.

2Write short notes on the following:


a.) Exchange Concept:

Exchange is an act of obtaining a desired product or service from someone by offering something in
return. Marketing occurs when people decide to satisfy their needs and wants through exchange.
Marketing, thus, involves exchange of a product between a seller and a buyer based on monetary
considerations. The exchange concept of marketing holds that exchange is the central idea of marketing.
But marketing is much broader than exchange. Exchange covers the distribution aspect and the price
mechanism. Marketing has wider connotations including value generation, customer satisfaction, creative
selling, advertising and integrated action for serving the customer. The exchange concept does not cover
all the vital ingredients of marketing.
b.) Production Concept:
The production concept of marketing is one of the oldest marketing concepts or marketing philosophies
in guiding the marketing activities of an organization. The production concept is that marketing
philosophy which operates with the guiding force thatthe consumers will prefer those products which are
available at the right time, at right places, in adequate quantities, and at affordable prices.Hence, the
management should pursue policies to improve production and distribution system to reduce prices. The
production concept or philosophy is relevant in situations where mass quantity of a product is consumed
and the demand for the product exceeds the supply. The main criticism against this philosophy is that the
consumers are not given personal attention and the management is not responsive to consumers' views.

c.) Selling Concept:


The selling concept is a common approach for any marketing activity. This concept assumes that any
product does not sell itself and therefore has to be sold. For selling the product, the consumers are
educated and effectively convinced that only this product satisfy their needs. That means, to stimulate
buying, effective selling and promotion tools are a pre-condition, whether it is a popular product or an
unsought-for product. The selling concept is a common approach for any marketing effort. The main
criticism against the selling concept is that it gives emphasis on increasing sales volume, and not on
consumer satisfaction.
d.) Marketing Concept:
The modern marketing concept came into being and gained momentum after 1950. According to Philip
Kotler, "The marketing conceptholds the key to achieve organisational goals, consistent with the needs
and wants of the target market anddeliver the desired satisfaction more effectively and efficiently than
competitors".
From the above statement, it is clear that the modern marketing concept is that marketing philosophy
which believes organisations should assess and understand the needs and wants of target customers, and
accordingly, make relevant marketing efforts to satisfy their wants and needs more effectively than
competitors. Thus modern marketing concept is not just sales efforts, but, first understanding customers
needs and wants.
The scope of marketing is very wide. It includes all those activities which are involved in discovering the
present and potential requirements of consumers for goods and services, and in ensuring the flow ofthose
goods and services from the producers to the final consumers.
e.) Societal Marketing Concept
The societal marketing concept is a broadened marketing concept and has gained momentum since the
1980s. This concept is also known as the Human Concept or The Ecological Concept. Societal marketing
concept is a marketing management philosophy that believes in assessing the needs and wants of target
consumers or target markets and adapting the organisation to produce and market goods to give expected
satisfaction more effectively than its competitors in such a way that preserves or enhances the consumers'
as well as the well-being of society. The societal marketing concept is helpful in creating an intelligent
consumption pattern, serving the ecological needs and helping the industry grow and prosper. It serves the
business world as well as the society as a whole.

Marketing is a very important aspect in business since it contributes greatly to the success of the
organization. Production and distribution depend largely on marketing. Marketing is the father of
innovation and product development, promoter of entrepreneurial talent, developer of economy,
stimulator of consumption and higher standard of living and guardian of price system.
Apart from contributing to the development of the nation as a whole, marketing has greater importance
for its contribution to society and individual business firm.

3 Explain SWOT & PEST


ANSWER:
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is a
strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats
involved in a project or in a business venture. It involves specifying the objective of the business venture
or project and identifying the internal and external factors that are favorable and unfavorable to achieve
that objective.
SWOT analysis is an important tool for auditing the overall strategic position of a business and its
environment. Strengths and weaknesses are internal factors. For example, strength could be your
specialist marketing expertise. A weakness could be the lack of a new product. Opportunities and threats
are external factors. For example, an opportunity could be a developing distribution channel such as the
internet, or changing consumer lifestyles that potentially increase demand for a company's products. A
threat could be a new competitor in an important existing market or a technological change that makes
existing products potentially obsolete.
First, the decision makers have to determine whether the objective is attainable, given the SWOT
analysis. If the objective is not attainable, a different objective must be selected and the process repeated.
Let us discuss SWOT analysis with examples
Strengths: characteristics of the business or team that give it an advantage over others in the industry. For
example, Microsofts strength is its operating system Windows and related software applications is
used by a large customer base all over the world.
Weaknesses: are characteristics that place the firm at a disadvantage relative to others. For example,
weakness can be high attrition rate.

Opportunities: external chances to make greater sales or profits in the environment. For example,
changing lifestyle of people- the firm can make use of their capability to cater to the changing lifestyle of
people which in turn could help company to gain profits.
Threats: external elements in the environment that could cause trouble for the business. For example, the
small retail shops owners found a great threat when big retailers began their operations in India.
A SWOT analysis should identify a corporations core competencies, along with the opportunities that the
organisation is not currently able to take advantage of due to lack of appropriate resources. This is
essential because subsequent steps in planning for achievement of the selected objective may be derived
from the SWOT analysis.
The SWOT analysis framework has gained widespread acceptance because it is both simple and powerful
for strategy development. However, like any planning tool, SWOT is only as good as the information it
contains. Thorough market research and accurate information systems are essential for the SWOT
analysis to identify key issues in the environment.
The analysis of strengths and weaknesses focuses on internal factors that give an organization advantages
and disadvantages in meeting the needs of its target market. Strengths refer to the core competencies that
give the firm an advantage in meeting the needs of its target markets. Any analysis of company strengths
should be market oriented/customer focused because strengths are meaningful when they assist the firm
in meeting customer needs. Weaknesses refer to any limitations a company faces in developing or
implementing a strategy. Weaknesses should also be examined from a customer perspective because
customers often perceive weaknesses that a company cannot see.
The SWOT Matrix helps visualize the analysis. Also, when executing this analysis it is important to
understand how these elements work together. When an organisation matches internal strengths to
external opportunities, it creates core competencies. In addition, an organization should act to convert
internal weaknesses into strengths and external threats into opportunities.
PEST analysis stands for "Political, Economic, Social, and Technological analysis". It describes a
framework of macro-environmental factors used in the environmental scanning component of strategic
management. It is a part of the external analysis when conducting a strategic analysis or doing market
research, and gives an overview of the different macro environmental factors that the company has to take
into consideration. It is a useful strategic tool for understanding market growth or decline, business
position, potential and direction for operations.
The growing importance of environmental or ecological factors in the first decade of the 21st century has
given rise to green business and encouraged widespread use of an updated version of the PEST
framework.

A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis.
Specifically the PEST or PESTLE analysis is a useful tool for understanding risks associated with market
growth or decline, and as such the position, potential and direction for a business or organization.
PESTLE analysis is a useful tool for understanding the big picture of the environment, in which you are
operating, and the opportunities and threats that lie within it. By understanding the environment in which
you operate (external to your company or department), you can take advantage of the opportunities and
minimize the threats.

4 What are the constituents of micro environment of the organization


Answer:
Micro-environment of the organization
Micro environment consists of forces that are close to the company and affect its ability to serve its
customers. Micro environment begins with the companys environment itself. This environment
influences the organisation directly. It includes suppliers that deal directly or indirectly, consumers and
customers, and other local stakeholders. Micro tends to suggest small, but this can be misleading. In this
context, micro describes the relationship between firms and the driving forces that control this
relationship. It is a more local relationship, and the firm may exercise a degree of influence.
i. Suppliers
Suppliers provide the resources required by the company to produce its goods and services. A company
should choose suppliers who offer favourable terms and conditions of sale. Suppliers who offer best mix
of quality, delivery, reliability, credit, warranties and competitive price should be desired. The
developments that take place in the suppliers environment have a bearing on the marketing operations of
the company as suppliers may introduce frequent changes in their products and business practices. They
may n become direct competitors to the firm by manufacturing end products themselves. Hence, the
marketing manager must closely monitor the environment.
ii. Competitors
Marketing in this era is highly competitive. The foray of multinationals into global markets has posed
serious problems to local firms. Ever since globalisation emerged in the early 90s, Indian companies
began operating in a free market. They had to compete with multinational companies. To overcome
competition, a company must provide greater customer satisfaction than its competitors. It must strongly
position its offering in the minds of customers. Knowledge about competition is fundamental to

developing an effective marketing strategy. In the words of Philip Kotler "the best way for a company to
grasp the full range of competition is to take the view point of a buyer".
iii. Customers
Customers market consists of several constituents such as consumer markets, business markets, reseller
markets, Government markets and international markets.
Customer markets consist of individuals and households who buy goods and services for personal
consumption. Business markets buy goods and services for further processing or use in their
manufacturing process. Reseller market consists of wholesaler and retailers. They buy goods and services
to resell at a profit. Government market consists of government agencies which buy goods and services to
produce public services. Lastly international market consists of buyers in other countries. Thus each of
the constituents of the customers market has unique characteristics.
iv. Shareholders
As shareholders contribute capital, they are eligible for a share in the profit of the organisation.
Shareholders earning is dependent on the marketing efforts and profitability. As organisation requires
greater inward investment for growth, they face increasing pressure to move from private ownership to
public. However, this movement unleashes the forces of shareholder pressure on the strategy of
organisations. Satisfying shareholder needs may result in change in tactics employed by the organisation.
Many IT companies whose share prices sky rocketed during 1999 - 2000 saw a steep decline in share
prices as they faced pressures from shareholders to make it profitable.
v. Creditors
Creditors are those from whom marketers purchase goods on credit. The relationship between the
company and creditors should be good as it affects their activities in future.
Most business purchase goods and services much like a consumer. However, they do so to a large extent
on credit as they are able to get discounts or other incentives to buy in bulk. When businesses buy goods
and services on credit, the business that holds the note or paper is referred to as a creditor. A firms power
and prestige in domestic markets may be significantly enhanced with the right credit resources. Enhanced
prestige can translate into a better negotiating position with other creditors, suppliers, distributors and
other important groups.

5 What are the additional components in marketing mix?


Answer:

With the exponential growth in the service industry, it was found that the traditional marketing mix was
insufficient to meet the growing demands of the industry. This was especially due to the fact that the
service industry involved several intangible and variable components, which could not be covered under
the traditional components of the marketing mix. Hence, in order to meet the needs of the service
industry, three additional components or additional Ps were introduced in the mix People, Process and
Physical Evidence. The marketing departments in the Service sector need to include these additional
components, along with the regular components, in the marketing mix.
4.4.1 People
A service industry is a people intensive industry, as the human resource is the key asset who performs the
service. Good service has to be rendered rightly to the customer first time and every time. Unlike a
product based industry, bad service cannot be replaced or returned. Also, customers feel important when
they are treated rightly by the service personnel. Hence, it is necessary for service industries to invest
heavily in people.
The quality of service provided is dependent on the skill sets, behaviour and attitude of the service
personnel. It is important for managers who market services to consider the following points with respect
to their people
1. Selection The organisation should have clearly laid down procedures for the selection of service
personnel. The key factor in selection would be the right attitude of the candidate rather than the
knowledge, as the latter can be provided by proper training.
2. Motivation In the service industry, it is important that the employees are self motivated and are
willing to give their 100% for the organisation. The satisfaction of the customer depends totally upon the
employee motivation as motivated employees treat the organization as their own. They act like
entrepreneurs so as to ensure that the customers needs are addressed immediately. This results in
customer delight.
3. Training Behavioural training is crucial in the service industry, as behaviour determines the
commitment of the employee towards the customer. The level of training is also dependent on whether the
employees role is in high contact or low contact with the customer. It is important to provide the right
training to the employees as this will result in enhancing the customer experience.
4. Team Development For delivering effective service, teamwork is critical as no service is an
individual task. Both the front-end and back-end employees contribute together for the service delivery to
the customer. Hence, it is important to develop teams which share these common aims.
All of the above items need to be considered by the service marketing manager so that they can be
incorporated into the development of the people component of the marketing mix.
4.4.2 Process

Process refers to the system used by the organisation so as to deliver service to the customer. It is a
systematic arrangement which results in the delivery of service. The service delivery process needs to be
mapped minutely so as to ensure that the desired service reaches the customer in the given time frame. It
is also important that the services marketing manager tweaks the processes at regular intervals, so as to
ensure that the gaps are assessed and addressed. Such tweaking helps in maintaining the quality of the
service.
For example, when you order pizza from Pizza Corner, there is a service guarantee of delivery within 40
minutes to your home or the order is free of charge. For providing such a service, Pizza Corner has to
ensure that there is a well-defined process in place from the time of receiving the order, to the preparation
of the pizza and delivery of the same to the customers residence. A lapse in any leg of the process would
result in the company incurring a loss on that order.
Thus, process is an important component of the marketing mix for the service industry.
Physical Evidence
In most service industries, customer is physically present at the time of providing service. Due to this
physical presence, it becomes important to create the right surroundings or ambience for providing
service. Physical evidence refers to the external factors or surroundings which aid the customer in making
a judgement about the company. Such factors can be physically sensed as they can be seen, felt, heard or
touched. The customer makes a decision whether he or she wants to have business transactions with a
particular service provider, depending on the external physical environment.
The physical evidence is the tangible part of the service, as it can be perceived by the customer. It
becomes important for the service marketing manager to ensure that the physical evidence before the
customer is pleasing and does not offend the customers sensibilities. This will help in increasing the
business opportunities with the customer.
For example, the ambience, appearance, decor and cleanliness of a restaurant will encourage repeat visits
from clientele. These can be leveraged to bring in more business.
The services marketing manager has to consider the physical evidence of the surroundings and allocate
resources for improving or maintain the same, so as to generate business.

6 What are the internal & external factors affecting pricing decisions?
Answer:

The pricing decisions are influenced by many factors. The price policies should be consistent with
pricing objectives. The influencing factors for a price decision can be divided into two groups: (A)
Internal Factors and (B) External Factors.
(A) Internal Factors
1) Organizational Factors
Pricing decisions occur on two levels in the organisation. Over-all price strategy is dealt by the top
executives. They determine the basic range the product falls into in terms of market segments. The actual
mechanics of pricing are dealt with at lower levels in the firm and focus on individual product strategies.
Usually, some combination of production and marketing specialists are involved in choosing the price.
2) Marketing Mix
Marketing experts view price as only one of the many important elements of the marketing mix. A shift in
anyone of the elements has an immediate effect on the other three-Production, Promotion and
Distribution. In some industries, a firm may use price reduction as a marketing technique. Other firms
may raise prices as a deliberate strategy to build a high-prestige product line. In either case, the effort will
not succeed unless the price change is combined with a total marketing strategy that supports it. A firm
that raises its prices may add a more impressive- looking package and may begin a new advertising
campaign.
3) Product Differentiation
The price of the product also depends upon the characteristics of the product. In order to attract the
customers, different characteristics are added to the product, such as quality, size, colour, attractive
package, alternative use etc. Generally, customers are willing to pay more for the product which makes a
fashion statement or is trendy with good packaging.
4) Cost of the Product
Cost and price of a product are closely related. The most important factor is the cost of production. While
deciding to market a product, a firm may try to decide what prices are realistic, considering current
demand and competition in the market.
5) Objectives of the Firm
Firms may pursue a variety of value-oriented objectives, such as maximising sales revenue, maximising
market share, maximising customer volume, minimizing customer volume, maintaining an image,
maintaining stable price etc. Pricing policy should be established only after proper consideration of the
objectives of the firm.
(B) External Factors

1) Demand
The market demand for a product or service obviously has a big impact on pricing. Since demand is
affected by factors like, number and size of competitors, the prospective buyers, their capacity and
willingness to pay, their preference etc, and these factors are taken into account while fixing the price.
2) Competition
Competitive conditions affect the pricing decisions. Competition is a crucial factor in price determination.
A firm can fix the price equal to or lower than that of the competitors, provided the quality of product, in
no case, is lower than that of the competitors.
3) Suppliers
Suppliers of raw materials and other goods can have a significant effect on the price of a product. If the
price of cotton goes up, the increase is passed on by suppliers to manufacturers.
Manufacturers, in turn, pass it on to consumers. Sometimes, however, when a manufacturer appears to be
making large profits on a particular product, suppliers will attempt to cash in on the profits by charging
more for their supplies. In other words, the price of a finished product is intimately linked up with the
price of the raw materials. Scarcity or abundance of the raw materials also determines pricing.
4) Economic Conditions
The inflationary or deflationary tendency affects pricing. In the recession period, the prices are reduced to
a sizeable extent to maintain the level of turnover. On the other hand, the prices are increased in the boom
period to cover the increasing cost of production and distribution. To meet the changes in demand, price
etc., several pricing decisions are available (a) prices can be boosted to protect profits against rising
cost, (b) price protection systems can be developed to link the price on delivery to current costs, (c)
emphasis can be shifted from sales volume to profit margin and cost reduction etc.
5) Buyers
The various consumers and businesses that buy a company's products or services may have an influence
in the pricing decision. Their nature and behaviour for the purchase of a particular product, brand or
service etc. affect pricing when their number is large.
6) Government
Price discretion is also affected by the price-control by the government through enactment of
Legislation, when it is thought proper to arrest the inflationary trend in prices of certain products.
The prices cannot be fixed higher, as government keeps a close watch on pricing in the private sector. The
marketers obviously can exercise substantial control over the internal factors, while they have little, if
any, control over the external ones.

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