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Short notes for marketing policy analysis (2016) and long questions

Q2.Product diversification -5 marks

Answer: Definition

Product diversification strategy is known to be one of the major forms of business

growth strategies. It is also termed as business development. It can be done by
adding new products to the range or by altering the existing products. Diversification
strategy enables the business to get the opportunity to grow through increased sales
by entering the new markets or existing customers.

Approaches
First of all businesses need to set the objectives for the product diversification. it can
be done in two ways i.e. defensive approach or offensive approach.

Defensive approach
This approach is used to protect the business. For instance, demand for your
products is dropped and there is tough competition in the market. This is seriously
alarming particularly for the businesses that build their business on a single product.
Survival of the business is seriously threatened with declining revenues.

Offensive Approach
This is an alternative approach to defensive strategy. You see a strong opportunity in
the market but you are not willing to take advantage of it via existing products.

Types of Diversification Strategies

The three main types of diversification strategies are

1. Business can modify its products. New version of the product will be capable
of attracting different groups of customers other than the existing data base
of buyers. For instance if you are dealing in developing tools for professional
building, then you must come up with a version that appeals even the
beginners or laymen.

2. Another way is to offer new product to your existing customers. For instance,
a vegetable or a fruit retailer can add healthy foods that attract the same
group of customers who are particular about in-taking the fresh fruits and
vegetables.

3. Adding a new product to the existing product range is also a good idea. This is
aimed towards a new group of customers.

Q. Marketing logistics -5 marks

answer :

Involves planning, implementing & controlling the physical flows of materials & final
goods from points of origin to points of use to meet customer requirements at a
profit. Info systems plays a critical role in managing market logistics. Marketing
logistics involve the transportation of goods in a planned manner which offers control
over the distribution mechanism.
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Involves several activities: sales forecasting, distribution, production & inventory

levels.

Decisions
Order processing: How should orders be handled?
Warehousing: Where should stocks be located?
Inventory: How much stock should be held?
Transportation: How should goods be shipped?

The General objectives of the logistics can be summarized as

: 1. Cost reduction
2. Capital reduction
3. Service improvement
The specific objective of an ideal logistics system is to ensure the flow of supply
to the buyer,
the right product
right quantities and assortments
right places
right time
right cost / price and
, right condition

Q . Advertising vs sales promotion -5 marks

Advertising is generally targeted at end consumer (as opposed to the channels of

distribution). It can be used for many purposes, including establishing awareness,
providing information for knowledge, and creating brand loyalty. In its knowledge
role, advertising can communicate a positioning (or modify a positioning) and even
promote new uses of a product (think "Orange Juice isnt just for breakfast
anymore").

Promotion is a general term. It is so general, in fact, that most communications that

are not strictly advertising (paid and non-personal) are characterized as promotions.
But this distinction is blurry at times, so looking for a clear definition is useless. Its
better to just recognize that there are many types of promotions.

Some promotions -- special events, sampling, rebates, and coupons, to name a few
-- are aimed directly at consumers. The use of these promotions can typically be tied
to the hierarchy of communication effects model.

Both Advertising and Promotion are the types of Marketing which

are widely used nowadays. They are marketing tools and both use
same techniques and strategies for doing marketing.
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Advertising is a paid form of mass communication which can take a

form of television, radio, magazines, newspaper, and internet
placements. Its goal is not only to increase in sales in a short to mid-
term but also to strengthen the brand image of the company and its
products and services to develop long term sales and consumer
loyalty.

Promotion is a short term strategy. The main objective of doing

promotion is to build the sales in the short term. Brand building also
occurs as a result of promotions. Promotions include things like
giving free samples, special events or offers, providing discounts or
coupons, etc.

Promotion strategy is well-suited for small or medium sized company

as it is easy to set up and it provides a short term gain. So we can
say that the primary objective of advertising is to create a long-term
brand image and the main objective of promotion is to get maximum
sales quickly. That is why; the time frame of doing promotion is
shorter than that of doing advertising campaigns.

Sales promotion is the direct approach to the customers to

encourage them to buy your products or services while advertising
is an indirect approach towards encouraging them to buy your
products or services.

Advertising and Promotion also have similarities and these tools of

marketing sometimes support each other like advertising campaigns
use promotions too so as to make the overall success of the
campaign greater.

Q.channel power 5 marks

Answer :

The Channel Power refers to the ability of any one channel member to alter
or modify the behavior of other members in the distribution channel, due to
its relatively strong position in the market.

1. Coercive Power: The manufacturer threatens to terminate the relationship

with other channel partners or withdraw the resources deployed with them.
With this power, the manufacturer can dominate the others and keep them
under his control.
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But the negative side is, the channel partners may lose their faith in the
manufacturer and may enter into inter-conflicts.

2. Reward Power: The manufacturer provides several additional benefits to the

intermediaries, with the intention to motivate them to perform certain
activities as required.

This power is very useful since it brings in the maximum efforts from each
channel partner, but this may sometimes be negative as the channel partners
may always seek for the benefits in case, they are required to do some other
activity.

3. Legitimate Power: Here the manufacturer reminds the channel partner to

carry out their activities in accordance with the contract they have entered
into at the time they became the channel partners.

The manufacturer may find it convenient to keep a check on the channel

partners in terms of their signed agreement, but the partners may feel
humiliated for the continuous reminder for their code of conduct.

4. Expert power: The manufacturer has the expertise that he transfers to the
channel partners, and once they acquire it, the power of expertise reduces.
Thus, the manufacturer should focus on creating the new expertise, thereby
keeping the channel partners updated with the day to day operations.

The manufacturer uses this power to retain the interest among the channel
partners to work, but the intermediaries may not feel to learn any new things
apart from what they have learned.

5. Referent Power: The manufacturer should develop its image in such a way,
that the intermediaries must feel proud to be associated with it. The
manufacturer with the influential image can get varied options with regard to
the channel partners.

But if the manufacturer is weak then intermediaries may not like to get
associated with it because that might spoil their market image.

Q.BRAND EQUITY 5 MARKS

Brand equity is the added value endowed on products and services. It may be
reflected in the way consumers think, feel, and act with respect to the brand, as well
as in the prices, market share, and profitability the brand commands for the firm.

Marketers and researchers use various perspectives to study brand equity. Most
popular one being the customer based approach to brand equity.

The customer approach views the brand from the perspective of the consumer-either
an individual or an organization. The premise of customer-based brand equity
models is that the power of a brand lies in what customers have seen, read, heard,
learned, thought, and felt about the brand over time.

Customer based brand equity can be:

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1. Positive when consumers react more favourably to a product.

2. Negative if consumers react less favourably to marketing activity for the

brand under the same circumstances.

There are three key ingredients of customer-based brand equity.

1. Brand equity arises from differences in consumer response. If no differences

occur, then the brand name product is essentially a commodity or generic
version of the product. Competition will probably be based on price.

2. Differences in response are a result of consumers knowledge about the

brand. In particular, brands must create strong, favourable, and unique brand
associations with customers, as have Volvo (safety), Hallmark (caring), and
Harley-Davidson (adventure).

3. The differential response by consumers that makes up brand equity is

reflected in perceptions, preferences, and behaviour related to all aspects of
the marketing of a brand. Stronger brands lead to greater revenue.

Q. Functional areas of marketing 5 marks

Answer:

Q.Relationship marketing -5 marks

Answer:

Relationship marketing is the practice of building long-term satisfying relations with

key partiescustomers, suppliers, distributorsin order to retain their long-term
preference and business.

The ultimate outcome of relationship marketing is the building of a unique company

asset called a marketing network. A marketing network consists of the company and
all of its supporting stakeholders: customers, employees, suppliers, distributors,
retailers, ad agencies, university scientists, and others with whom it has built
mutually profitable business relationships. Increasingly competition is not between
companies but rather between whole networks, with the prize going to the company
that has built better network.

The operating principle is: Build a good network of relationships with key
stakeholders and profits will follow.

Q3.Long question everything matters in marketing?

Answer :
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Philip Kotler and Kevin Lane Keller define this holistic approach as follows: A
holistic marketing concept is based on the development, design and implementation
of marketing programs, processes and activities that recognize the breadth and
interdependencies. Holistic marketing recognizes that everything matters with
marketing and that a broad, integrated perspective is necessary to attain the best
solution.

Holistic marketing concept is a part of the series on concepts of marketing and it

can be defined as a marketing strategy which considers the business as a whole and
not as an entity with various different parts. According to holistic marketing concept,
even if a business is made of various departments, the departments have to come
together to project a positive & united business image in the minds of the customer.
Holistic marketing concept involves interconnected marketing activities to ensure
that the customer is likely to purchase their product rather than competition.

A key driver of Holistic marketing is marketing communications. The job of marketing

communications is to send the right message to the target group. By approaching
various customer contact points, a uniform message can be sent to the customer.
This consistency is likely to raise confidence in the customer for your company
thereby raising the brand image.

Samsung is an example of Holistic marketing where the products are developed

keeping the customer in mind, The showrooms are branded in the proper manner,
the customer service is polite and the service is fast. Thus Samsung is an excellent
example of Holistic marketing.

Some key concepts which are important in Holistic marketing are

Internal marketing Marketing between all the departments in an organization

Relationship marketing Building a better relationship with your customers, internal
as well as end customers is beneficial for holistic marketing.
Performance marketing Driving the sales and revenue growth of an organization
holistically by reducing costs and increasing sales.
Integrated marketing Products, services and marketing should work hand in hand
towards to growth of the organization.

Thus Holistic marketing is a concept which is organization wide and helps the growth
of the organization with the right marketing of the product. With the rise in
competition and the limits placed on customers with finite financial resources,
decisions will be scarce and as an organization we have to implement holistic
marketing so that decisions are made by customers in our favour.

Q3.ii discuss the value delivery process with the help of a

diagram.Explain a few techniques of estimating future demand ?

Answer :
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(ii) second part

SURVEY OF BUYERS INTENTIONS One way to forecast what buyers will do

is to ask them directly. This suggests that the forecaster should survey
buyers. Surveys are especially valuable if the buyers have clearly formed
intentions, will carry them out, and can describe them to interviewers.
However, this is sometimes not the case, and marketers must be careful
when using consumer survey data to make forecasts. Several research
organizations conduct periodic surveys of consumer buying intentions.
COMPOSITE OF SALES-FORCE OPINIONS When buyer interviewing is
impractical, the company may base its sales forecasts on information
provided by the sales force. The company typically asks its salespeople to
estimate sales by product for their individual territories. It then adds up
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the individual estimates to arrive at an overall sales forecast. Few

companies use their sales forces estimates without some adjustments.
Salespeople are biased observers. They may be naturally pessimistic or
optimistic, or they may go to one extreme or another because of recent
sales setbacks or successes. Furthermore, they are often unaware of larger
economic developments and they do not always know how their
companys marketing plans will affect future sales in their territories. They
may understate demand so that the company will set a low sales quota.
They may not have the time to prepare careful estimates or may not
consider it worthwhile. Assuming these biases can be countered, a number
of benefits can be gained by involving the sales force in forecasting.
Salespeople may have better insights into developing trends than any
other group. After participating in the forecasting process, the salespeople
may have greater confidence in their quotas and more incentive to
achieve them. Also, such grassroots forecasting provides estimates
broken down by product, territory, customer, and salesperson.
EXPERT OPINION Companies can also obtain forecasts by turning to
experts. Experts include dealers, distributors, suppliers, marketing
consultants, and trade associations. Thus, auto companies survey their
dealers periodically for their forecasts of short-term demand. Dealer
estimates, however, are subject to the same strengths and weaknesses as
salesforce estimates. Many companies buy economic and industry
forecasts from well-known firms such as Andersen Consulting. These
forecasting specialists are in a better position than the company to
prepare economic forecasts because they have more data available and
more forecasting expertise. Expert opinion is often captured in a number
of academic journals, including the Canadian Business Review, which
publishes information on economic conditions and indicators that affect
Canadian business. For example, it was recently projected that Canadas
exports to the United States would continue to perform well given
predictions that the U.S. economy would remain strong, and not be
threatened by interest rate increases.6 Canadas export success was
attributed to its mix of exports as well as the low dollar. Occasionally
companies will invite a special group of experts to prepare a forecast. The
experts may be asked to exchange views and develop a group estimate
(group discussion method). Or they may be asked to supply their
estimates individually, with the company analyst combining them into a
single estimate.
Finally, they may supply individual estimates and assumptions
that are reviewed by a company analyst, revised, and followed by
further rounds of estimation (called the Delphi method). Experts can
provide good insights upon which to base forecasts, but they can also be
wrong. For example, in 1943, IBM Chairman Thomas J. Watson predicted, I
think theres a world market for about five computers. And in 1946, Daryl
F. Zanuck, head of 20th Century-Fox, made this pronouncement: TV wont
be able to hold on to any market it captures after the first six months.
People will soon get tired of staring at a plywood box every night.7 In
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1981, Bill Gates, founder of Microsoft, proclaimed 640 K ought to be

enough for anybody. Thus, where possible, the company should
substantiate experts opinions with estimates obtained using other
methods. TEST MARKETING Where buyers do not plan their purchases
carefully or where experts are not available or reliable, the company may
want to conduct a direct test market. A direct test market is especially
useful in forecasting new-product sales or establishedproduct sales in a
new distribution channel or territory. Test marketing is discussed in
Chapter 9. PAST-SALES ANALYSIS Sales forecasts can be developed on the
basis of past sales. Time-series analysis consists of breaking down past
time series into four components (trend, cycle, seasonal, and erratic) and
projecting these components into the future. Exponential smoothing
consists of projecting the next periods sales by combining an average of
past sales and the most recent sales, giving more weight to the latter.
Statistical demand analysis consists of measuring the impact level of each
of a set of causal factors (e.g., income, marketing expenditures, price) on
the sales level. Finally, econometric analysis consists of building sets of
equations that describe a system and proceeding to statistically fit the
parameters.
LEADING INDICATORS Many companies try to forecast their sales by
finding one or more leading indicatorsother time series that change in
the same direction but in advance of company sales. For example, a
plumbing supply company might find that its sales lag behind the housing
starts index by about four months. The housing starts index would then be
a useful leading indicator. The Department of Industry Trade and
Commerce regularly performs economic and statistical analysis of many
important leading indicators

q.3.iii provide a brief overview of steps involved in designing an

effective communication strategy

answer:

Developing Effective Communications

1. Identify the Target Audience

o Image Analysis need to assess the audiences current image (the set of
beliefs, ideas, and impressions that a person holds regarding an object.
Peoples attitudes and actions toward an object are highly conditioned by that
objects image) of your company or products

o Familiarity scaleNever Heard of, Heard of Only, Know a Little Bit, Know a
Fair Amount, Know Very Well.
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o Favorability scale: Very Unfavorable, Somewhat Unfavorable, Indifferent,

Somewhat Favorable, Very favorable.

o Semantic Differential a tool used to research the specific content of its

image. This involves the following steps.

Develop a set of relevant dimensions get customers to identify the

dimensions they would use in thinking about a project. For example,
people think about health care when you ask about a hospital

Reduce the set of relevant dimensions

Administer the instrument to a sample of respondents respondents

rate dimensions on a scale

Average the results

Check on the image variance

2. Determining the Communication Objectives the marketer is seeking responses

from target audience:

o cognitive put something in consumers mind

o affective change consumers mind

o behavioral get the consumer to act

Response hierarchy model different models for consumer response stages. All
the models assume that the buyer passes through responses in listed order (see
book for illustrated model).

3. Designing the Message after defining desired audience response, develop an

effective message. The message should gain attention, hold interest, arouse desire,
and elicit action.

Formulating Message requires solving four problems:

1. Message Content what to say to the target audience. In determining the best
message, want appeal, theme, idea or unique selling proposition.

o Rational appealappeal to audiences self-interest.

o Emotional appealattempt to stir up negative or positive emotions that

motivate purchase.

o Moral appealdirected at what is right and proper.

2. Message Structure structure and content of message. How to say message.

o Stimulus Ambiguity Best ads ask questions and let audience to reach
conclusions.
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o Two sided arguments praise products advantages and shortcomings.

Appropriate when product must overcome some sort of negativity. Tend to
work better with an educated audience

o One sided arguments only praise product. Work best with audiences that
are initially predisposed to the communicators position.

3. Message Format how to say it symbolically. Also physical format of message, i.e.:
headlines, copy, illustration, color, and sounds are all important.

4. Message Source who should say message. Messages delivered by attractive or

popular sources achieve higher attention and recall.

o Credibility spokesperson must be credible. Individual should be exhibit

expertise, trustworthiness, and likeability.

Selecting The Communication Channels must select effective channels of

communication. There are two types of communication channels:

Personal Communication Channel

Involves 2 or more persons communicating directly with each other. Provides opportunity for
individualizing the presentation and feedback. Further distinctions are:

Advocate Channels company sales people contacting the target market

Expert Channels consist of independent experts making statements to target

buyers.

Social Channels consist of neighbors friends etc, talking to target market.

Steps to stimulate personal influence influence is very important to potential buyers

1. Identify influential individuals and devote extra effort.

2. Create opinion leaders by supplying certain people with the product on attractive
terms

3. Work through community influentials, disc jockeys, class presidents, etc.

4. Use influential people in testimonial advertising.

5. Develop advertising that has high conversation value

6. Develop word of mouth referral channels

7. Establish an electronic forum

Non-personal Communication Channels

Carry message without personal contact.
Media; Events; Atmospherespackaged environment, i.e.: elegant hotels are furnished
extravagantly
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Q3.v discuss the challenges of marketing in the present day context of

globalisation

Answer :

Introduction
Well said by Heraclitus - "The only thing that is constant is change." We are experiencing change
in our daily life and at marketplace too. Customer needs, wants, expectations are changing more
rapidly; customers are increasingly demanding better quality and reliability in products and
services; new products and services are coming to market more quickly, competition is getting
intense and global rather than just domestic; technology is changing rapidly; and e-commerce
and Internet is having a great impact on marketing practises.

In such a rapidly changing marketing environment it is really difficult for business organisations to
make quick and sound decisions, and facing various marketing challenges. So, today we are
here to let you know what marketing challenges the business organisations are facing, and how
to overcome these challenges.

Marketing Challenges The Business Organisations Facing Today

Rapidly changing customer needs, wants, and expectations;
Increasing domestic and global competition;
Heterogeneous and fragmented market
Increasing popularity of Internet;
Rapid technological changes;
Challenge of selecting among too many options; and
Challenge of generating leads.
Rapidly Changing Customer Needs, Wants, and Expectations
Today, the needs, wants, and expectations of customer is changing rapidly. It is a great challenge
not only for small marketers but for big players too. It requires extensive study of market trends
and consumer behaviour while developing new product or updating existing product.

Increasing Global and Domestic Competition

Competition today is global rather than just domestic. Marketers have to compete not only with
domestic players but with global players too. The intense and global competition is a great
challenge for marketers to deal with.

Increasing Popularity of Internet

With the increase in popularity of Internet a new spectrum of marketing channel is emerged. The
worldwide increase in number of Internet users brought a shift from traditional print-based media
to new online platforms. It presents a new set of marketing challenges - challenge of deciding
how much to allocate to digital v/s print-based media; challenge of using social media marketing
largely because of regulatory issues and concerns over its measurability; and challenge of doing
more with less money as the rise of Internet made communication cheaper and efficient .

Challenge of Selecting Among Too Many Options

The greatest challenge the marketers facing today is simply too many options. Too many
potential customer segments. Too many product or service options. Too many communication
tools. It is really difficult and challenging for marketers to choose among too many options. The
marketers today doesn't suffer from lack of opportunities or options. The picture is totally
opposite today. Now they suffer from too many opportunities or options.

Q3.vi what are the bases of product classification ?discuss the concept
of product line with the help of an example

Answer :
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PRODUCT CLASSIFICATIONS

Marketers have traditionally classified products on the basis of characteristics:

durability, tangibility, and use (consumer or industrial). Each product type has an
appropriate marketing-mix strategy.

Durability and Tangibility

Products can be classified into three groups, according to durability and

tangibility:

1. Nondurable goods are tangible goods normally consumed in one or a few uses,
like beer and soap. Because these goods are consumed quickly and purchased
frequently, the appropriate strategy is to make them available in many locations,
charge only a small markup and advertise heavily to induce trial and build
preference.

2. Durable goods are tangible goods that normally survive many uses:
Refrigerators, Machine tools, and Clothing. Durable products normally require
more personal selling and services command a higher margin and require more
seller guarantees.

3. Services are intangible, inseparable, variable, and perishable products. As a

result, they normally require more quality control, supplier credibility, and
adaptability. Examples include haircuts, legal advice, and appliance repairs.

Consumer Goods classification

The vast array of goods consumers buy can be classified on the basis of
shopping habits. We can distinguish among convenience, shopping, specialty,
and unsought goods.

The consumer usually purchases convenience goods frequently, immediately,

and with a minimum of effort. Examples include tobacco products, soaps, and
newspaper. Convenience goods can be further divided. Staples are goods
consumers purchase on a regular basis. A buyer might routinely purchase Keinz
ketchup. Crest toothpaste, and Ritz crackers. Impulse goods are purchased
without any planning or search effort. Candy bars and magazines

are impulse goods. Emergency goods are purchased when a need is urgent
umbrellas during a rainstorm, boots and shovels during the first winter
snowstorm. Manufacturers of impulse and odd emergency goods will place them
in those outlets where consumers are likely to experience an urge or compelling
need to make a purchase. Shopping goods are goods that the consumers, in the
process of selection and purchase, characteristically compare on such bases as
suitability, quality, price and style. Examples include furniture clothing, used cars
and major appliances. Shopping goods can be further divided. Homogeneous
shopping goods are similar in quality but different enough in price to justify
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shopping comparisons. Heterogeneous shopping goods differ in product features

and services that may be more important than price. The seller of heterogeneous
shopping goods carries a wide assortment to satisfy individual tastes and must
have well-trained salespeople to inform and advise customers.

Specialty goods have unique characteristics or brand identification for which a

sufficient number of buyers are willing to make a special purchasing effort.
Examples include cars, stereo components, photographic equipment, and
mens suits. A Mercedes is a specialty good because interested buyers will
travel far to buy one. Specialty goods do not involve making comparisons;
buyers invest time only to reach dealers carrying the wanted products. Dealers
do not need convenient locations, although they must let prospective buyers
know their locations.

Unsought goods are those the consumer does not know about or does not
normally think of buying, like smoke detectors. The classic example of known but
unsought goods is life insurance, cemetery plots, gravestones, and
encyclopedias. Unsought goods require advertising and personal-selling support.

Product mix and product line ?

The complete range of products present within a company is known as the product mix. In
any multi brand organizations, there are numerous products present. None of the
organizations wants to take the risk of being present in the market with a single product. If
the company has only a single product, than the demand of the product will be too great or
the company does not have the resources to expand the number of products it has.
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However, if the business market is any example, than all the top companies have multiple
products. Coca cola, Apple, Microsoft, Nestle, Hindustan unilever, Pharmaceutical
companies, so on and so forth. These companies need to have a wide product portfolio to be
present in the market and to have a sustainable business model. The combination of
products that they have in their product portfolio can be the product mix.

Product mix As explained, product mix is a combination of total product lines within a
company. A company like HUL has numerous product lines like Shampoos, detergents,
Soaps etc. The combination of all these product lines is the product mix.

Product line The product line is a subset of the product mix. The product line generally
refers to a type of product within an organization. As the organization can have a number of
different types of products, it will have similar number of product lines. Thus, in Nestle, there
are milk based products like milkmaid, Food products like Maggi, chocolate products like
Kitkat and other such product lines. Thus, Nestles product mix will be a combination of the
all the product lines within the company.