Attempt All Question Parts. Each Part Carries 2 Marks. 2x10 20

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MARKETING MANAGEMENT (RMB 106) (2016-17)

SOLUTION
SECTION - A
Attempt all question parts. Each part carries 2 marks. 2x10=20
1. Marketing Myopia is the short sighted and inward looking approach to marketing that focuses on
the needs of the firm instead of defining the firm and its products in terms of the customers’ needs
and wants. Such self centered firms fail to see and adjust to the rapid changes in their markets and
despite their previous eminence falter, fail and disappear. This concept was given by Theodore C
Lewitt. Its theme is that the vision of most organizations is too constricted by a narrow understanding
of what business they are in. By the influence of this concept many oil companies redefined their
business as “energy” instead of just “petroleum”.
2. The key differences between the business markets and consumer markets can be summarized as
follows:
Business Markets Consumer Markets
• Company to company sales • Company to consumer sales
• Relationship driven • Product Driven
• Personal negotiation process • Mass media and retail process
• Small markets • Large markets
• Long sales cycles • Short sales cycles
• Educational activities • Merchandizing activities
• Rational buying decisions • Emotional buying decisions
• Business value • Status and desire value
3. Product Length refers to products that are sold that are similar to each-other, but not bundled
together and sold as one. For example, car wash, car polish, car air fresheners that are sold
individually and not as a package. They would be part of the same line. A long line means many
different, related products to sell. In product width, the products a business produces are separated
into different categories. For example, a large soft drink manufacturer's product width would consist
of its soft drink brands in one category and its snack food brands in another category.
RMB-106 Ajay Kumar Garg Institute of Management (820) Prof.Namita Nath Kumar
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4. Value-based pricing is used when prices are based on the value of a product as perceived from the
customer's perspective. The perceived value determines the customer's willingness to pay and thus
the maximum price a company can charge for its product. An essential component of value-based
pricing is the necessity to determine the value for the customer. In order to define the value a
customer associates with a product, the customer value model can be applied. This concept evaluates
the economic benefits a product can offer to the customer.
5. A trademark is a mark that legally represents something, usually a business, by their goods or
services. A brand name, however, is the name that a business chooses for one of their products. The
difference between Brand and Trademark:
• A brand is developed over a course of time with consistent quality that is appreciated by customers.
• A trademark is granted by trademark and patent office, and is a legal device that protects the owner
in case of unlawful use of the trademark.
• Brand helps in identification of the product and the company, while trademark helps in preventing
others from copying.
• If a brand has not been registered, anyone can copy it, and there is no provision of any penalty,
while in case of trademark violation, there is severe penalty.
6. Network marketing is a business model that relies on a network of distributors to grow a business.
Network marketing typically involves using three basic types of systematic strategies to make money:
• Lead Generation: To locate new prospects;
• Recruiting: Adding customers and/or business partners to your network; and
• Building and Management: Methods you use to train, motivate, and manage your recruits.
There are many types of network marketing including two-tier programs and multi-level marketing,
but many of the more solid marketing companies, like Avon, are single-tier.
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7. Personal Selling is described as the act of persuading a customer to buy a product, through having
personal communication with him. It can be defined as the task of communicating the value of an
offer to customers and persuading them to buy it. The Personal locates the buyers, communicates
with them face to face, answers their questions, overcomes their objections, provides them service,
concludes sale, takes information back and forth and wins friends and clients for the company.
8. There are five levels of product:
The fundamental level is the core benefit: the service or benefit the customer is really buying. At the
second level, the marketer must turn the core benefit into a basic product. At the third level, the
marketer prepares an expected product, a set of attributes and conditions buyers normally expect
when they purchase this product. At the fourth level, the marketer prepares an augmented product
that exceeds customer expectations. In developed countries, brand positioning and competition take
place at this level. At the fifth level stands the potential product, which encompasses all the possible
augmentations and transformations the product or offering might undergo in the future.
9. A push promotional strategy involves taking the product directly to the customer via whatever
means, ensuring the customer is aware of the brand at the point of purchase.
Examples of push tactics
• Trade show promotions to encourage retailer demand
• Direct selling to customers in showrooms or face to face
• Negotiation with retailers to stock your product
• Efficient supply chain allowing retailers an efficient supply
• Packaging design to encourage purchase
• Point of sale displays
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A pull strategy involves motivating customers to seek out the brand in an active process. In other
words it is, "Getting the customer to come to you".
Examples of pull tactics
• Advertising and mass media promotion
• Word of mouth referrals
• Customer relationship management
• Sales promotions and discounts
10. Supply chain management (SCM) is the oversight of materials, information, and finances as they
move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain
management involves coordinating and integrating these flows both within and among companies. It
is said that the ultimate goal of any effective supply chain management system is to reduce inventory
(with the assumption that products are available when needed).
SECTION - B
Attempt any four Questions. 15x4=60
1. AMA (American Marketing Association) defines marketing as “an organizational function and set
of processes for creating, communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stakeholders.” Marketing is the
process by which companies create value for customers and build strong customer relationships in
order to capture value from customers in return.
The marketing process involves five steps. The first four steps create value for the customers. first
marketers need to understand the marketplace and customer needs and wants. Next, marketers design
a customer driven marketing strategy with the goal of getting, keeping and growing target customers.
In the third step, marketers construct a marketing program that actually delivers superior value. All of
these steps form the basis for the fourth step, building profitable customer relationships and creating
customer delight. In the final step, the company reaps the rewards of strong customer relationships by
capturing value from customers.
Outstanding marketing companies go to great lengths to learn about and understand their customers’
needs, wants and demands. They conduct consumer research and analyze huge data, their personnel
stay close to the customers. At P&G, executives from CEO down routinely spend time with
consumers in their homes and other settings. Marketers then design their market offerings depending
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on the customers’ needs and wants that may include a combination of products, services, information,
and/or experiences. In the case of tourism or “destination marketing”, the market offering is an entire
travel experience. Kerala Tourism markets Kerala – a south-Indian state known for its backwaters,
lush green plantations, and serene beaches – as “Gods own Country”.
To design a winning marketing strategy, the company must first decide who it will serve. It does this
by dividing the market into segments of customers (market segmentation) and selecting which
segments it will cultivate (target marketing). Next the company must decide how it will serve
targeted customers (how it will differentiate and position itself in the marketplace). For example
BMW promises “the ultimate driving machine”, whereas Land Rover let you “Go Beyond” – to “get
a taste of adventure, whatever your tastes.”
The marketer then develops an integrated marketing program that actually delivers the intended value
to target customers. It consists of the firm’s marketing mix, the set of marketing tools (product, price,
place and promotion) the firm uses to implement its marketing strategy. To deliver on its value
proposition, the firm must first create a need-satisfying market offering. It must decide how much it
will charge for the offering (price) and how it will make the offering available to target consumers
(place). It must, then communicate with target customers about the offering and persuade them them
of its merits (promotion).
Companies want not only to acquire profitable customers but also to build relationships that will keep
them and grow “share of customer”. The marketers aim is to build the right relationships with the
right customers. in return for creating value for targeted customers, the company captures value from
customers in the form of profits and customer equity. Shoppers Stop ensures customer retention by
providing privileges like reward points, special offers, and sales previews to its members. The reward
program at Shoppers Stop is called “First Citizen.” Customers earn points on every purchase they
make at Shoppers Stop.
2. Marketing environment is made up of all the factors and forces that influence marketing.
Marketing environment is generally understood as external factors which will affect the
organizations. This is further classified as macro or micro factors. Macro factors affect the economy
and industry as a whole. Micro factors are within an industry. Micro environmental factors are also
called task environment which is closest environment of the organization. The micro environmental
factors have a direct influence on the organization. It includes factors like consumers, competitors,
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suppliers, labour market, industry and financial resources. The macro environment is also referred to
as remote environment and its elements have indirect influence on the organization. It includes
factors such as demographic, economic, socio-cultural, technological, natural, political, legal factors.
Micro Environmental Factors
The microenvironment consists of individuals and organizations that are close to the company and
directly impact the customer experience. It includes the company itself, its suppliers, other marketing
input from agencies, the markets and segments in which the firm trades, firm’s competition and also
those around the firm (which public relations would call publics) who are not paying customers but
still have an interest in firms business. For example Gujarat Cooperative milk marketing federation’s
(GCMMF) micro environment would be very much focused on immediate local issues. It would
consider how to recruit, retain and extend products and services to customers. It would pay close
attention to the actions and reactions of direct competitors. GCMMF would build and nurture close
relationships with key suppliers. The business would need to communicate and liaise with its publics
such as neighbors which are close to its stores, or other road users.
Macro Environmental Factors
The demographic environment
This is the study of population and its characteristics such as size and growth rate in different
geographic locations across the world, age distribution and ethnic mix, educational level, household
patterns, regional characteristics and movements. Growth in population provides an opportunity for
selling more products. Population age mix decides the purchasing pattern. Each population segment
has its own needs. Examples: Seeing the large market for gearless scooters Hero Honda launched
“PLEASURE” the gearless scooter made exclusive for women with the tagline. Why should Boys
Have all the fun?
Economic environment
Economic factors like income distribution, level of saving, debt, credit facility for consumers and
stage in business cycle etc. may act as opportunity or threat for an organization. The available
purchasing power of consumers is dependent upon economic factors. Economy of a country also
passes through cycle of recession, depression, recovery and prosperity. Each phase of this cycle has
associated impact on purchasing power on citizens of that country. Each business organization has to
relate their business strategies in accordance with these phases of business cycles. Examples: The
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Indian Railways Launched “Garib Rath” (Vehicle for the poor), A.C trains with fare almost half the
normal train fare.
Cultural environment
Culture is a complex set of knowledge, belief, art, morals, laws, custom and other capabilities and
habits learned by individuals as a member of society. Culture is reflected by habits and habits
influences the consumption patterns. Culture varies from country to country. Within the country also
culture exhibits cultural variations. Organizations have to provide products/services in the market
according to cultural shifts. India is increasingly influenced by western culture hence organizations
have changed their strategies accordingly. Shopping is done in malls like Big Bazars, D-Marts. The
concept of Multiplexes is gaining popularity and this has lead to the rise of many brands of
Multiplxes like Fame, PVR cinemas & INOX.
The social environment
Social forces and society has profound impact on purchasing pattern of individuals. Social customs
determines the acceptance or rejection of a particular good. The food, dress and life style are
influenced by social norms. The organization should have idea about how the consumer reacts to
various marketing offers in a social setting. Example: The food retail chains like KFC, Subway,
Dominos, McDonald’s are on high demand due to changing consumer preferences.
Politico-legal environment
Different types of political systems exist in different countries of the world. Business organizations
are controlled to lesser or greater extent by each of this system. In India since 1991 liberalization
polices are adopted and many rigid rules governing the business organizations has been dismantled.
Example: The government of India recently proposed foreign direct investment in retail sector but it
was opposed by many stakeholders including opposition parties.
Technological environment
The technological changes are occurring very fast. In all the fields due to fast technological up
gradation we see that new products are continuously coming in the market. Internet has dramatically
changed the lives of people today. Examples: The social networking sites like twitter, Orkut & Face
book have gained widespread popularity among all age groups. The e-store like e-bay is stores where
goods can be purchased online.
Natural environment
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Business organizations are required to adopt good business practices which do not spoil the
environment. World is also facing the energy crisis. The non renewable energy sources like crude oil
products are limited and their unscrupulous use put heavy pressure and leads to price rise. People are
now concerned with all types of pollution (air, water, noise etc). Reduced use of plastics, less use of
fossil fuels, increased use of renewable energy sources like solar and wind energy etc are to be
adopted by present day organizations. Examples: The concept of green Building is being promoted
where energy efficient buildings are constructed. The “NDTV Greenathon” concept supported by
TOYOTA.
3. Consumer behavior is influenced by four factors: cultural, social, personal and psychological,
although many of these factors cannot be influenced by the marketer, they can be useful in
identifying interested buyers and in shaping products and appeals to serve consumer needs better.
Culture is the most basic determinant of a person’s wants and behavior. It includes basic values,
perceptions, preferences, and behaviors that a person learns from family and other important
institutions. Subcultures are “cultures within cultures” that have distinct values and lifestyles and can
be based on anything from age to ethnicity. People with different cultures and sub-cultural
characteristics have different product and brand preferences. As a result, marketers may want to focus
their marketing programs on the special needs of certain groups.
Social factors also influence a buyer’s behavior. A person’s reference groups – family, friends, social
networks, professional associations – strongly affect product and brand choices. The buyer’s age, life
cycle stage, occupation, economic circumstances, lifestyle, personality, and other personal
characteristics influence his or her buying decisions. Consumer lifestyles – the whole pattern of acting
and interacting in the world – are also an important influence on purchase decisions. Finally,
consumer buying behavior is influenced by four major psychological factors – motivation,
perception, learning and beliefs and attitudes. Each of these factors provides a different perspective
for understanding the workings of the buyer’s black box.
Formulating marketing plans basically consists of designing marketing strategies and tactics and
knowledge of consumer behavior can be an important competitive advantage. It can greatly reduce
the odds of bad decisions and market failures. The principles of consumer behavior might be useful
while deciding the following aspects of marketing planning:
Analyzing Market Opportunity
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Consumer behavior helps in identifying the unfulfilled needs and wants of consumers. This requires
scanning the trends and conditions operating in the market area, customer’s lifestyles, income levels
and growing influences.
Selecting Target Market
The scanning and evaluating of market opportunities helps in identifying different consumer
segments with different and exceptional wants and needs. Identifying these groups, learning how to
make buying decisions enables the marketer to design products or services as per the requirements.
Marketing-Mix Decisions
Once the unfulfilled needs and wants are identified, the marketer has to determine the precise mix of
four P’s, i.e., Product, Price, Place, and Promotion.
Product: A marketer needs to design products or services that would satisfy the unsatisfied needs or
wants of consumers. Decisions taken for the product are related to size, shape, and features. The
marketer also has to decide about packaging, important aspects of service, warranties, conditions, and
accessories.
Example − Nestle first introduced Maggi noodles in masala and capsicum flavors. Subsequently,
keeping consumer preferences in other regions in mind, the company introduced Garlic, Sambar, Atta
Maggi, Soupy noodles, and other flavours.
Price: The second important component of marketing mix is price. Marketers must decide what price
to be charged for a product or service, to stay competitive in a tough market. These decisions
influence the flow of returns to the company.
Place: The following decisions are taken regarding the distribution mix −
•Are the products to be sold through all the retail outlets or only through the selected ones?
•Should the marketer use only the existing outlets that sell the competing brands? Or, should they
indulge in new elite outlets selling only the marketer’s brands?
•Is the location of the retail outlets important from the customers’ point of view?
•Should the company think of direct marketing and selling?
Promotion: It deals with building a relationship with the consumers through the channels of
marketing communication. Some of the popular promotion techniques include advertising, personal
selling, sales promotion, publicity, and direct marketing and selling. The marketer has to decide
which method would be most suitable to effectively reach the consumers. The company has to know
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its target consumers, their location, their taste and preferences, which media do they have access to,
lifestyles, etc.
4. Market segmentation pertains to the division of a set of consumers into persons with similar needs
and wants. Market segmentation allows for a better allocation of a firm's finite resources. Due to
limited resources, a firm must make choices in servicing specific groups of consumers. With growing
diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a
multiplicity of new markets.
The different bases of market segmentation include the following:
Geographic Segmentation
Geographic segmentation divides the market into geographical units such as nations, states, regions,
counties, cities, or neighborhoods. The company can operate in one or a few areas, or it can operate
in all but pay attention to local variations. In that way it can tailor marketing programs to the needs
and wants of local customer groups in trading areas, neighborhoods, even individual stores. In a
growing trend called grassroots marketing, such activities concentrate on getting as close and
personally relevant to individual customers as possible.
Demographic Segmentation
In demographic segmentation, we divide the market on variables such as age, family size, family life
cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class.
Here’s how marketers have used certain demographic variables to segment markets.
AGE AND LIFE-CYCLE STAGE Consumer wants and abilities change with age.
LIFE STAGE People in the same part of the life cycle may still differ in their life stage. Life stage
defines a person’s major concern, such as going through a divorce, going into a second marriage,
taking care of an older parent, deciding to cohabit with another person, deciding to buy a new home,
and so on. These life stages present opportunities for marketers who can help people cope with their
major concerns.
GENDER Men and women have different attitudes and behave differently, based partly on genetic
makeup and partly on socialization. Women tend to be more communal-minded and men more self-
expressive and goal-directed; women tend to take in more of the data in their immediate environment
and men to focus on the part of the environment that helps them achieve a goal.
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INCOME Income segmentation is a long-standing practice in such categories as automobiles,

clothing, cosmetics, financial services, and travel. However, income does not always predict the best
customers for a given product. Blue-collar workers were among the first purchasers of color
television sets; it was cheaper for them to buy these sets than to go to movies and restaurants.
RACE AND CULTURE Multicultural marketing is an approach recognizing that different ethnic and
cultural segments have sufficiently different needs and wants to require targeted marketing activities,
and that a mass market approach is not refined enough for the diversity of the marketplace.
Psychographic Segmentation
Psychographics is the science of using psychology and demographics to better understand consumers.
In psychographic segmentation, buyers are divided into different groups on the basis of
psychological/personality traits, lifestyle, or values. One of the most popular commercially available
classification systems based on psychographic measurements is Strategic Business Insight’s (SBI)
VALS™ framework. The main dimensions of the VALS segmentation framework are consumer
motivation (the horizontal dimension) and consumer resources (the vertical dimension). Consumers
are inspired by one of three primary motivations: ideals, achievement, and self-expression. Those
primarily motivated by ideals are guided by knowledge and principles. Those motivated by
achievement look for products and services that demonstrate success to their peers. Consumers whose
motivation is self-expression desire social or physical activity, variety, and risk. Personality traits
such as energy, self-confidence, intellectualism, novelty seeking, innovativeness, impulsiveness,
leadership, and vanity—in conjunction with key demographics—determine an individual’s resources.
Behavioral Segmentation
In behavioral segmentation, marketers divide buyers into groups on the basis of their knowledge of,
attitude toward, use of, or response to a product.
NEEDS AND BENEFITS Not everyone who buys a product has the same needs or wants the same
benefits from it. Needs-based or benefit-based segmentation is a widely used approach because it
identifies distinct market segments with clear marketing implications.
DECISION ROLES It’s easy to identify the buyer for many products. People play five roles in a
buying decision: Initiator, Influencer, Decider, Buyer, and User. For example, assume a wife initiates
a purchase by requesting a new treadmill for her birthday. The husband may then seek information
from many sources, including his best friend who has a treadmill and is a key influencer in what
models to consider. After presenting the alternative choices to his wife, he purchases her preferred
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model, which ends up being used by the entire family. Different people are playing different roles,
but all are crucial in the decision process and ultimate consumer satisfaction.
USER AND USAGE—REAL USER AND USAGE-RELATED VARIABLES Many marketers
believe variables related to various aspects of users or their usage—occasions, user status, usage rate,
buyer-readiness stage, and loyalty status—are good starting points for constructing market segments.
Occasions - Occasions mark a time of day, week, month, year, or other well-defined temporal aspects
of a consumer’s life.
User Status Every product has its nonusers, ex-users, potential users, first-time users, and regular
users.
Usage Rate We can segment markets into light, medium, and heavy product users.
Buyer-Readiness Stage Some people are unaware of the product, some are aware, some are informed,
some are interested, some desire the product, and some intend to buy. To help characterize how many
people are at different stages and how well they have converted people from one stage to another,
marketers can employ a marketing funnel to break down the market into different buyer-readiness
stages.
5. The different stages of the product life cycle (PLC):
Introduction Stage and the Pioneer Advantage

Because it takes time to roll out a new product,work out the technical problems, fill dealer pipelines,
and gain consumer acceptance, sales growth tends to be slow in the introduction stage. Profits are
negative or low,and promotional expenditures are at their highest ratio to sales because of the need to
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(1) inform potential consumers, (2) induce product trial, and (3) secure distribution in retail outlets.
Firms focus on buyers who are the most ready to buy.Prices tend to be higher because costs are high.
The marketing strategies to be followed to create product awareness and trial in this stage includes:
• Offer basic product
• Charge cost-plus
• Build selective distribution
• Build product awareness and trial among early adopters and dealers.
Growth Stage The growth stage is marked by a rapid climb in sales.Early adopters like the product
and additional consumers start buying it. New competitors enter, attracted by the opportunities. They
introduce new product features and expand distribution. Prices stabilize or fall slightly, depending on
how fast demand increases. Companies maintain promotional expenditures or raise them slightly, to
meet competition and continue to educate the market. Sales rise much faster than promotional
expenditures, causing a welcome decline in the promotion–sales ratio.Profits increase as promotion
costs are spread over a larger volume,and unit manufacturing costs fall faster than price declines,
owing to the producer-learning effect. Firms must watch for a change to a decelerating rate of growth
in order to prepare new strategies. To sustain rapid market share growth now, the firm:
• improves product quality and adds new features and improved styling.
• adds new models and flanker products (of different sizes, flavors, and so forth) to protect the main
product.
• enters new market segments.
• increases its distribution coverage and enters new distribution channels.
• shifts from awareness and trial communications to preference and loyalty communications.
• lowers prices to attract the next layer of price-sensitive buyers.
Maturity Stage
The maturity stage divides into three phases: growth, stable, and decaying maturity. In the first, sales
growth starts to slow. There are no new distribution channels to fill. New competitive forces emerge.
In the second phase, sales per capita flatten because of market saturation. Most potential consumers
have tried the product, and future sales depend on population growth and replacement demand. In the
third phase, decaying maturity, the absolute level of sales starts to decline, and customers begin
switching to other products.
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This third phase poses the most challenges. The sales slowdown creates overcapacity in the indus-
try, which intensifies competition. Weaker competitors withdraw. A few giants dominate—perhaps a
quality leader, a service leader, and a cost leader—and profit mainly through high volume and lower
costs. Surrounding them is a multitude of market nichers, including market specialists, product
specialists, and customizing firms.
Three ways to change the course for a brand are market, product, and marketing program
modifications.
MARKET MODIFICATION A company might try to expand the market for its mature brand by
working with the two factors that make up sales volume: Volume = number of brand users × usage
rate per user but may also be matched by competitors.
PRODUCT MODIFICATION Managers also try to stimulate sales by improving quality, features, or
style. Quality improvement increases functional performance by launching a “new and improved”
product.
MARKETING PROGRAM MODIFICATION Finally, brand managers might also try to stimulate
sales by modifying nonproduct elements—price, distribution, and communications in particular. They
should assess the likely success of any changes in terms of effects on new and existing customers.
Decline Stage
Sales decline for a number of reasons, including technological advances, shifts in consumer tastes,
and increased domestic and foreign competition. All can lead to overcapacity, increased price cutting,
and profit erosion.
As sales and profits decline over a long period of time, some firms withdraw. Those remaining may
reduce the number of products they offer, withdrawing from smaller segments and weaker trade
channels, cutting marketing budgets, and reducing prices further. Unless strong reasons for retention
exist, carrying a weak product is often very costly. Besides being unprofitable, weak products
consume a disproportionate amount of management’s time, require frequent price and inventory
adjustments, incur expensive setup for short production runs, draw advertising and sales force
attention better used to make healthy products more profitable, and cast a negative shadow on
company image.
The first task is to establish a system for identifying them. Many companies appoint a product-
review committee with representatives from marketing, R&D, manufacturing, and finance who,
based on all available information, makes a recommendation for each product—leave it alone,
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modify its marketing strategy, or drop it. The appropriate strategy also depends on the industry’s
relative attractiveness and the company’s competitive strength in it. A company in an unattractive
industry that possesses competitive strength should consider shrinking selectively. A company in an
attractive industry that has competitive strength should consider strengthening its investment.
Companies that successfully restage or rejuvenate a mature product often do so by adding value to it.
6. Impact of packaging on the environmental aspect of any nation

The modern societies offer a wide range of services to the consumers, such as electricity, heating,
overall infrastructure, imported goods. All of these have a significant effect on the environment for
exploiting natural resources. They are however, a part of modern life, and offer convenience. The
balance between their environmental effects is not necessarily known. There is, however, a lot of
criticism against packaging, for their environmental effects. The attention of consumers is turned
especially towards packaging of everyday goods, such as food, and household detergents.
The positive effects packagings are the safe delivery of the product to the consumer while preserving
the designed and processed usage and/or aesthetic values of the product. Packaging also plays an
important role in saving natural resources by preventing the product to be wasted and the invested
material and physical labor getting lost. Since the value of the product generally far exceeds that of
the package, the optimal product use, is more important than the optimal package use. While the
package prevents the product to be contaminated, it also prevents the environment to be polluted by
the product. To summarise, the packaging is an important tool of optimal resource use.
Packaging is optimal, if it fulfills the service expected, in a favorable way, for both the producer and
the consumer; while using the least amount of material, and energy.
The choice of a packaging system is a very complex decision, and is based on the following main
factors-groups: protection of the product, available packaging technology, economics, marketing
considerations, product’s properties, environmental considerations, legal constraints. Historically, the
effort to achieve higher protection was the strongest driving force in packaging development.
Generally the package’s properties are adjusted to the product’s, but sometimes the product’s
properties are modified in order to enable more practical packaging.
The image of individual packaging materials is especially diverse. Some materials, such as plastics
have the most negative image, albeit of being lightweight and sturdy, thus giving the advantage of
maximal service with minimal resource use. It is especially true for composites, which combine
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several materials for better protection, while using minimal amount of the individual materials.
Plastics and composites are optimal packaging materials, and can therefore, be considered as
environmentally preferable. The judgment of environmental friendliness cannot be based solely on
the type of packaging material.
Paper uses a renewable source, thus can and will continue to be used widely for packaging purposes.
On the other hand, recycling of paper requires fossil sources, because of transportation demand, and
reprocessing. This questions the positive environmental impact of paper recycling.
Aluminium, for its light weight, and the high savings offered with its recycling, can also be an
effective packaging material in those countries, where aluminum is in common use, and the recycling
infrastructure works well.
Reclamation of packaging wastes is an accepted way of reducing the packagings’ environmental
impacts. Reclamation, and in particular recycling, however, are also industrial activities, and have
resource demand, and result emissions. Recycling can be an important way in achieving certain
environmental goals, but it shall not be a goal by itself.
From an ecological point of view and on the basis of the comparative analysis of feedstock recycling
and energy recovery of waste plastic packagings, the following recovery processes are recommended:
use as reducing agents in blast furnaces, thermolysis to petrochemical products and fluidised-bed
combustion. Mechanical recycling processes have ecological advantages over feedstock and energy
recovery processes if virgin plastic is substituted in a ratio of 1:1. If considerably less than 1 kg of
virgin plastic is substituted by 1 kg of waste plastic, mechanical recycling processes no longer have
and advantage over feedstock recycling and energy recovery processes.
The most preferred way of reducing the packagings’ environmental effects is the lightweighting of
packages. It is a free market oriented issue, its regulation is not possible and not necessary.
Enhancing lightweighting by regulation can only be done the lifting of fixed recycling rates of
packaging materials.
The amount of packaging waste is rising and its disposal is a very visible part of environmental
problems for the consumer. It is, however, just a part of the national waste management, and shall not
be treated isolated from it.
Reduction of wastes requires the involvement of the public in both collective and individual levels.
The introduced regulations need well-coordinated campaigns to inform the citizen of the goals, and
their duties. The polluter pays principle, imposed by waste collection fees, seems to be an efficient
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way of arising the consumers’ environmental consciousness.

On industrial level the use of ‘economic sticks’, such as eco-taxes and levies has became widespread.
Taxes are commonly used as a means of raising the price of disposable or non-recyclable goods with
an incentive to set up deposit-refund schemes. Often, however the taxes are too low to give any
impact on the choice of packaging. It can be concluded that packaging taxes had no effect on the
choice of the packaging system by the industry, neither on the amount of waste.
7. Distribution or marketing channels are an important part of any organization to deliver their
products or services to consumer. This is a set of interdependent organizations or parties involved in
the process of making a product or service available for consumption or use by consumer or end-
users. Some of the functions performed by them are:
• Gather information about potential and current customers, competitors, and other actors and
forces in the marketing environment.
• Develop and disseminate persuasive communications to stimulate purchasing.
• Negotiate & Reach agreements on price and terms so that transfer of ownership or possession
can be affected.
• Place orders with manufacturers.
• Acquire the funds to finance inventories at different levels in the marketing channel.
• Assume risks connected with carrying out channel work.
• Provide for the successive storage & movement of physical products.
• Provide for buyers’ payment of their bills through banks and other financial institutions.
• Oversee actual transfer of ownership from one organization or person to another.
Factors to consider while selecting a channel:
(i) Product: Perishable goods need speedy movement and shorter route of distribution. For durable
and standardized goods, longer and diversified channel may be necessary. Whereas, for custom made
product, direct distribution to consumer or industrial user may be desirable. Also, for technical
product requiring specialized selling and serving talent, we have the shortest channel. Products of
high unit value are sold directly by travelling sales force and not through middlemen.
(ii) Market:
(a) For consumer market, retailer is essential whereas in business market we can eliminate retailing.
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(b) For large market size, we have many channels, whereas, for small market size direct selling may
be profitable.
(c) For highly concentrated market, direct selling is preferred whereas for widely scattered and
diffused markets, we have many channels of distribution.
(d) Size and average frequency of customer’s orders also influence the channel decision. In the sale
of food products, we need both wholesaler and retailer.
(iii) Middlemen:
(a) Middlemen who can provide wanted marketing services will be given first preference.
(b) The middlemen who can offer maximum co-operation in promotional services are also preferred.
(c) The channel generating the largest sales volume at lower unit cost is given top priority.
(iv) Company:
(a) The company’s size determines the size of the market, the size of its larger accounts and its ability
to set middlemen’s co-operation. A large company may have shorter channel.
(b) The company’s product-mix influences the pattern of channels. The broader the product- line, the
shorter will be the channel. If the product-mix has greater specialization, the company can favor
selective or exclusive dealership.
(c) A company with substantial financial resources may not rely on middlemen and can afford to
reduce the levels of distribution. A financially weak company has to depend on middlemen.
(d) New companies rely heavily on middlemen due to lack of experience.
(e) A company desiring to exercise greater control over channel will prefer a shorter channel as it will
facilitate better co-ordination, communication and control.
(f) Heavy advertising and sale promotion can motivate middlemen in the promotional campaign. In
such cases, a longer chain of distribution is profitable.
(v) Marketing Environment: During recession or depression, shorter and cheaper channel is preferred.
During prosperity, we have a wider choice of channel alternatives. The distribution of perishable
goods even in distant markets becomes a reality due to cold storage facilities in transport and
warehousing. Hence, this leads to expanded role of intermediaries in the distribution of perishable
goods.
(vi) Competitors: Marketers closely watch the channels used by rivals. Many a time, similar channels
may be desirables to bring about distribution of a company’s products. Sometimes, marketers
19
deliberately avoid channels used by competitors. For example, company may by-pass retail store
channel (used by rivals) and adopt door-to-door sales (where there is no competition).
(vii) Customer Characteristics: This refers to geographical distribution, frequency of purchase,
average quantity of purchase and numbers of prospective customers.
(viii) Channel Compensation: This involves cost-benefit analysis. Major elements of distribution cost
apart from channel compensation are transportation, warehousing, storage insurance, material
handling distribution personnel’s compensation and interest on inventory carried at different selling
points. Distribution Cost Analysis is a fast growing and perhaps the most rewarding area in marketing
cost analysis and control.
SECTION - C
10x2=20
1. In March 1865, HSBC opened its doors for business in Hong Kong and today it welcomes
customers all over the world. Being an early starter to penetrate into this geography, HSBC was able
to fully utilize the untapped business potential available and thereby capture a huge chunk of the
market.
Despite growing in almost 80 countries all over the world, HSBC has been successful in positioning
itself as the “World’s local bank”. As the bank constantly works hard to maintain a local feel and
local knowledge, customers feel comfortable to bank with an international brand like HSBC.
Consequently it has ensured high customer loyalty and HSBC has been able to retain its large
customer pool.
Another key factor of success is the ability of HSBC to reach a large section of customers by
different innovative promotional campaigns. Moreover discounts, rebates, relaxing of interest rates
on loan during crisis etc. has helped to gain popularity as well as confidence among its customers.
HSBC also keeps a strong focus on the services that it offers to the customers. It offers personal
banking services, consumer finance, commercial banking, corporate investment banking and market,
private banking etc among 100 million customers spread all over the world in a very professional and
efficient way .This has helped to boost up the confidence level of the customers to a great extent.
Also its professional attitude towards understanding the different hitherto untapped segments like
niche marketing or targeting a specific demographic segment has led to its success story.
The most important success factor is the local marketing strategy of the bank. To add to it, are the
different promotional strategies (offers as well as campaigns) that the bank adapted specific to the
20
different countries that made the bank, the preferred one, in different regions of the world. The
company also organized its business line in the synch with the geographic requirements of its
customers. Hence, it can be concluded that HSBC’s marketing efforts revolved around its basic motto
“World’s local bank”.
2. Recommendations for the future growth of the company:
Strategize for creating and building long-term business relationships with its customers.
Increasing the quality of services
Developing long-term opportunities
Empower its personnel by equipping them appropriate powers to serve the customers
efficiently
Encouraging and valuing the diversity within their organization due to its global presence.
Managing environmental and social impacts
Investing in the communities
Some of the marketing efforts that can be adapted by the senior management:
Designing the products and processes to meet customers’ needs and selling accordingly.
Design systems to take regular feedbacks from the customers to assess the level of services
rendered to them and think of areas of further improvements.
Invest in technologies related to innovation and digital capabilities to serve the customers
better and enhance the security related to financial transactions as well as customer data.
Design financial services facilitating investments in environmental friendly business
Being a services company, better communication initiatives between the top management and
employees to be implemented.
Providing training to the employees regularly.
Adapt social responsibility initiatives.

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MARKETING MANAGEMENT (RMB 106) (2016-17)

INCOME Income segmentation is a long-standing practice in such categories as automobiles,

5. The different stages of the product life cycle (PLC):

Introduction Stage and the Pioneer Advantage

6. Impact of packaging on the environmental aspect of any nation

way of arising the consumers’ environmental consciousness.

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