SRI BALAJI UNIVERSITY PUNE (SBUP)

BIMM

SEMESTER-I-BATCH -2020-22

MARKETING MANAGEMENT

ASSIGNMENT – 4(UNIT-4)

(a)  Name of Student: - Manish Chauhan

(b)  Reg. No: - 09-1128

(c)  Specialization: - Marketing

(d)  Batch: - 2020-2022

(e)  Institute: - Balaji Institute of Modern Management

(f)  Semester: - Semester 1

(g)  Subject Name: - Marketing Management

(h)  Assignment No: - 4

(i)  Submission Date: -08/11/2020

(j)  Total no. of pages written: - 13

Question1. Explain the factors contributing to channel decision. Discuss the types of
channel structure with suitable examples.
Answer1.
As we know that most producer do not directly sell its product to the customer so it chooses
some channel which help them to easily sell its product to the customer. Beside selling the
product some more benefit comes with it that these channels help them to inform their
customer the benefits of using the product and more. Channel is a very important factor that
is related to the any company and also it helps to eliminate the gap between the customer and
the product. So, as the channel is a very valuable asset for any company so it should be
chosen very wisely and certain factors should be considered while choosing them. The factors
are as follows-
1. Market Related Factors: -
Since the channels of distribution operate in the market. The market related factors are
very important. There are several forces in the market which dictate the choice of
channels of distribution.
Market related factors include:
a) Customers:
 The ultimate purpose of any channel of distribution is to distribute the
goods to the customers.
 Therefore, the requirements and the nature of the customers should be
considered while deciding the channel of distribution.
b) Competition:
 One has to consider the channels of distribution arranged by the
competitors. This choice represents the wisdom and experience of the
competitors.
 It also means that the competitors have been successful in using such
channels over the long run.
c) Existing Channels of Distribution:
 One has to make study of the existing channels of distribution.
 The functions performed by these channels, their strengths and
weaknesses, their suitability and such other factors affect the choice of
channels. Their relative advantages must also be studied.

2. Product Factors: -
Since it is the product which is to be distributed, the product characteristics also have
to be analyzed while choosing a channel of distribution. Different products are
different in nature and this nature of the products requires different types of channels.
Product factors include:
a) Perishability:
 If the products are highly perishable, the channel must be short or even
direct marketing would be suitable.
  This is because long channels of distribution with a large number of
intermediaries delay the distribution of goods.
 Products like milk, flowers etc. require very fast distribution.
b) Nature of the Product:
 Consumer goods require longer channels of distribution.
 Industrial goods require shorter channels of distribution.
c) Technicality:
 Some products are highly technical in nature and they require a high
amount of technical support which can be provided only by the
manufacturer.
 Example: computer hardware and software, medical diagnostic
equipment, etc.
d) Seasonality:
 Some goods have a seasonal nature either in terms of production
(agricultural goods), or consumption (woolen goods) and such goods
require different types of distribution channels.
e) Variety Offered:
 If a manufacturer has a wide range of goods, he can opt for direct
distribution of the goods since a large number of products are
available.
 If a manufacturer has very few products, he has to distribute them
through long channels of distribution.
f) Unit Value:
 Products of high unit value suit shorter channels of distribution or even
direct marketing, but products of low unit value which are mass
consumed require longer channels of distribution.

3. Company Factors: -
A company has to look within and understand itself while choosing a channel of
distribution. It has to understand its requirements, strengths and weaknesses.
Company factors include:
a) Company’s Financial Strength:
 A financially strong company can design its own channel of
distribution because of its financial strength.
 It can negotiate with people and establish an altogether new channel of
distribution.
b) The Extent of Control Desired:
 Control desired in this context means the ability of the company to
exercise control over the channels of distribution in matters like resale
price maintenance, territory restrictions etc.
 Longer the channel, lesser will be the control.
c) Reputation of the Company:
  A well-established company with a strong reputation will find it easy
to have longer channels of distribution.
 This is because channel intermediaries are generally willing and
enthusiastic to be associated with strong companies.
d) Company’s Marketing Policies:
 Every company will have policies regarding marketing and these
policies will also lay down norms relating to channels of distribution
and these policies will also have a strong influence on the choice of
channels of distribution.
e) Past Experience:
 An established company will already have well established channels of
distribution.
 The company will also have experience in matters of dealing with such
channels of distribution.
 A company should consider such past experience while deciding the
channels of distribution.

4. Channel Related Factors: -

The channels of distribution choosing should be appropriate from the view point of
the company. These channels must be examined and then a proper choice must be
made.
Channel related factors are:
a) The Ability of Channels
b) The Financial Strength of the Channels
c) Ability to provide after sales service

5. Environmental Factors: -
A company’s channel choice depends on certain environmental factors. Environment
in this context means the environment within which the company, the channels of
distribution, the customers etc. are present.
Environmental factors include:
a) Economic Situation:
 The prevailing economic situation in the country affects all the
economic activities.
 Therefore, a company has to be aware of the prevailing economic
conditions.
b) Legal Factors:
 There are certain legal factors which must be considered while
deciding channels of distribution and arrangements with them.
 Certain types of arrangements with the channels of distribution in the
form of sole distributorship and in the cases of certain essential
commodities may be objectionable under law. Therefore, such legal
factors are to be considered.
 c) Fiscal Structure:
 Fiscal structure in this context refers to certain indirect taxes levied by
the state governments on products.
 There is no uniformity in this matter and clarity is absent in certain
cases. Therefore, such matters must also be considered while deciding
on, channels of distribution.

Types of Channel Structure: -

 Direct channel – The direct channel is the simplest channel. The producer sells directly to
the consumer. The most straightforward examples are producers who sell in small
quantities. Firms that use direct distribution require their own logistics teams and transport
vehicles. Those with indirect distribution channels must set up relationships with third-
party selling systems. Example – Farmer’s markets, Oracle personal sales team.

 Retail channel – Retailers are companies in the channel that focuses on selling directly to
consumers. The retail channel is different from the direct channel in that the retailer doesn’t
produce the product. The retailer markets and sells the goods on behalf of the producer.
retailers provide tremendous contact efficiency by creating one location where many
products can be purchased. Retailers may sell products in a store, online, in a kiosk, or on
your doorstep. Example – Walmart discount stores, Amazon online store.

 Wholesale channel – It looks very similar to the retail channel, but it also involves a
wholesaler. A wholesaler is primarily engaged in buying and usually storing and physically
handling goods in large quantities, which are then resold (usually in smaller quantities) to
retailers or to industrial or business users. The vast majority of goods produced in an
advanced economy have wholesaling involved in their distribution. Example – Restaurant
food suppliers, Clothing wholesalers who sell to retailers.

 Agent or broker – This channel includes one additional intermediary. Agents and brokers
are different from wholesalers in that they do not take title to the merchandise. They do not
own the product, they neither buy nor sell. Brokers bring buyers and sellers together and
negotiate the terms of the transaction. Example – An insurance broker, who sells insurance
products from many companies to businesses and individuals.

Q2. Distinguish between exclusive, selective, and intensive channel distribution. Give at
least two product-based and two service-based organizations opting for different
channel density. Justify your answer.

Answer.

Difference between exclusive, selective, and intensive channel distribution: -

 Intensive Distribution
Intensive distribution aims
to provide saturation
coverage of the market by
using all available outlets.
For many products, total
sales are directly linked to
the number of outlets used
(e.g., cigarettes, beer).
Intensive distribution is
usually required where
customers have a range of
acceptable brands to choose
from. In other words, if one
brand is not available, a
customer will simply choose
another.
It involves all the possible
outlets that can be used to
distribute the product.
Product awareness is able to
be achieved in the market
within a short period of
time.
Example: Soft Drinks and
Cigarettes where all the
possible outlets can be used
by a company to distribute
the product.
Different Channel Density opted by Product-based companies: -
1. Distribution network of Amazon: -
 Amazon is illustrative of a retailer using e-commerce to penetrate a wide range of
customer segments.
Selective Distribution
Selective distribution
involves a producer using a
limited number of outlets in
a geographical area to sell
products. An advantage of
this approach is that the
producer can choose the
most appropriate or best-
performing outlets and focus
effort (e.g., training) on
them.
Selective distribution works
best when consumers are
prepared to “shop around” –
in other words – they have a
preference for a particular
brand or price and will
search out the outlets that
supply.
It involves a producer using
a limited number of outlets
in a geographical area.
The supplier is able to get
the right feedback on
performance of a certain
brand in the market.
Example: Whirlpool and
General Electric who sell
their major appliances
through dealer networks and
selected large retailers.
Exclusive Distribution
Exclusive distribution is an
extreme form of selective
distribution in which only
one wholesaler, retailer or
distributor is used in a
specific geographical area.
When the firm distributes its
brand through just one or
two major outlets in the
market, who exclusively
deal in it and not all
competing brands, it is said
that the firm is using an
exclusive distribution
strategy.
In this, only one wholesaler,
retailer or distributor is used
in a specific geographical
area.
The supplier or
manufacturer is able to
easily get real customer
feedback on time and take
necessary action possible.
Example: iPhone is
popularly known for its
exclusive agreement deal
with AT&T. Other examples
include Gucci and
Lamborghini.
  To support the requirement of distribution-based consumption, a hierarchy of
specialized distribution facilities has emerged, each with its own locational,
operational, and physical characteristics.
 It includes three stages: procurement and fulfillment, distribution, and last-mile
deliveries.
 The goal of Amazon is to achieve a distributional hierarchy of facilities to access
consumer markets.
 The inbound cross-docking facility and the e-fulfillment center are the backbones of
the fulfillment process, accounting for the most significant footprint.
 The sortation center, a medium-sized facility, is the core of the distribution process,
allowing to route deliveries within metropolitan areas and for Amazon the option to
interface with local post offices.
 Co-location of facilities is common. This involves two separate distribution
functions within the same facility:
 Functional specialization of e-fulfillment centers:
o The functional specialization of e-fulfillment centers is prevalent, mainly along the
lines of if the parcel is sortable or non-sortable.
o An emerging functional specialization of delivery stations between regular parcels
and heavy deliveries is emerging.
 Horizontal and vertical integration:
o Through horizontal integration, Amazon used logistical facilities to expand market
coverage and lower lead time, realizing economies of density on which relies the
prior expansion of major retail chains such as Wal-Mart and Target.
o Through vertical integration, Amazon used logistical facilities to control distribution
flows and channels, allowing controlling how the parcels are routed within its
distribution and last-mile facilities, including final deliveries to consumers. The
locational behavior of facilities seeks to maximize regional market accessibility.

2. Distribution network of Google: -

 Google Inc. is setting up a distribution network for social networking
applications, adding a new twist in the Internet search leader's brewing rivalry
with rapidly maturing startup Facebook Inc.
 Google hopes to build a one-stop shop for software developers who create
tools that make it easier to share music, pictures, video and other personal
interests on social networking sites like Facebook and News Corp.'s
MySpace.com.
 Microsoft trumped Google in the bidding for a piece of Facebook. Google's
bigger social networking ambition is believed to be one of the reasons
Facebook decided to deepen its partnership with Microsoft instead.
 Google now hopes to attract many of the same applications thriving on
Facebook to its own network, dubbed "OpenSocial."
  The system is set up so the participating software developers will only have to
code their applications once. Google will then ensure they are compatible with
all the Web sites in its network.
 Google also will feature the applications on its own social network, Orkut,
which hasn't attracted much traffic outside South America.
 OpenSocial's combined audience will exceed 100 million users, according to
Google.

Question3. State the different types of retail formats in India. Analyse the offline and
online retail business of few organized retailers like Zara, Lifestyle, and Fabindia from
online market research reports.
Answer3 – Different types of retail format in India are –
 Department stores
Department stores are general merchandisers. They offer to the customers mid- to high-quality
products. Though they sell general goods, some department stores sell only a select line of
products.
 Supermarkets
One of the other popular retail formats in India is the supermarkets. A supermarket is a grocery
store that sells food and household goods. They are large, most often self-service and offer a
huge variety of products. People head to supermarkets when they need to stock up on groceries
and other items. They provide products for reasonable prices, and of mid to high quality.
 Hypermarkets
Similar to supermarkets, hypermarkets in India are a combination of supermarket and department
store. These are large retailers that provide all kinds of groceries and general goods. Saravana
Stores in Chennai, Big Bazaar and Reliance Fresh are hypermarkets that draw enormous crowds.
 Malls
One of the most popular and most visited retail formats in India is the mall. These are the largest
retail format in India. Malls provide everything that a person wants to buy, all under one roof.
From clothes and accessories to food or cinemas, malls provide all of this, and more. Examples
include Spencers Plaza in Chennai, India, or the Forum Mall in Bangalore.
 Discount Stores
Discount stores are those that offer their products at a discount, that is, at a lesser rate than the
maximum retail price. This is mainly done when there is additional stock left over towards the
end of any season. Discount stores sell their goods at a reduced rate with an aim of drawing
bargain shoppers.
 Catalogue showroom
Broad selection of high-mark-up, fast-moving, brand-name goods sold by catalogue at a
discount. Customers pick up merchandise at the store. Example – inside edge ski and bike.
 Street vendors
Street vendors, or hawkers who sell goods on the streets, are quite popular in India. Through
shouting out their wares, they draw the attention of customers. Street vendors are found in almost
every city in India, and the business capital of Mumbai has a number of shopping areas
comprised solely of street vendors. These hawkers sell not just clothes and accessories, but also
local food.
 Online and offline business of Zara, Lifestyle, and Fabindia –
As we are aware that Zara, Lifestyle, and Fabindia are the leading retail chains in country to
provide clothing and accessories for both Boys and Girls as well as children. This brand has a
great customer royalty and the customer services provided by them both online as well as offline
is very well organized. The product that are offered in the stores are available offline and even if
the products are not available in the store they have specified QR code which can be scanned on
the mobile application and people can do the purchase at ease from any place they want and the
good can even be delivered home or can be picked from the nearest stores.
The quality of the product remains same and it is convenient to buy the product. The online
business works the same as the offline business stores as these applications and the product are
well managed and well organized and is user friendly.

Question4.What are the elements of a communication mix? Discuss a few advertising

campaigns from the corporate world.
Answer4 – The communications mix involves all the tools you use to communicate with your
customers or potential customers. This could be through advertising, sales promotion, product
packaging, direct marketing, mobile marketing, events, public relations.
1. ADVERTISING – Advertising is the attempt to influence the buying behavior of customers
or clients with a persuasive selling message about products and/or services. In business, the goal
of advertising is to attract new customers by defining the target market and reaching out to them
with an effective ad campaign.
o Advertising is always present, though people may not be aware of it. In today's world,
advertising uses every possible media to get its message through. It does this via television,
print (newspapers, magazines, journals etc.), radio, press, internet, direct selling, hoardings,
mailers, contests, sponsorships, posters, clothes, events, coolers, sounds, visuals and even
people (endorsements).

 Common Advertising Methods –

Online advertising – Local website advertising: Many municipalities and Chamber of
Commerce chapters have websites that provide listings of local businesses.
Business web pages – Creating and maintaining a professional website with clearly outlined
descriptions of business offerings, optimized for search traffic.
Email – Requires a customer email list and adherence to anti-spam regulations. Email
newsletters can be useful for keeping in touch with existing customers and passing on
information about new products or services.
 Newspaper advertising – While on the decline newspaper ads can still be an effective
way to reach customers. Many municipalities have special interest newspapers which can
be used by businesses for local advertising.
 Direct mail – Can be very useful. Can be costly if sent via post, but even without a
mailing list brochure, flyers, etc. can still be delivered directly to residences and/or
businesses in targeted geographic areas.
  Vehicle (wrap) advertising – Turning a vehicle into a “mobile billboard” is an excellent
way to maximize business exposure. Vehicle ads are eye-catching and in a major metro
area can be seen over a million times a month.

2. SALES PROMOTION – It is a key ingredient in marketing campaign, consisting of a

collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase
of particular product. Advertising offers a reason to buy, sales promotion offers an incentive. It is
made up of activities, both outside and inside activities, to enhance company sales. Outside sales
promotion activities include advertising, publicity, public relations activities, and special sales
events. Inside sales promotion activities include window displays, product and promotional
material display and promotional programs such as premium awards and contests.
Sales promotion includes several communications activities that attempt to provide added
value or incentives to consumers, wholesalers, retailers, or other organizational customers to
stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or
purchase.
Example – The fasted-growing area in sales promotion is digital coupons, redeemed via smart
phone or down loaded to a consumer’s printer. Digital coupon eliminate printing cost, reduces
paper waste, are easily updateable, and have higher redemption rate.
3. PUBLIC RELATION – Public relations (PR) refer to the variety of activities conducted by a
company to promote and protect the image of the company, its products and policies in the eyes
of the public. Thus, it aims to manage public opinion of the organization. Public relations
encompass a broad range of activities. A public is any group that has an actual or potential
interest in or impact on a company’s ability to achieve its objective.
Marketers tend to underuse public relations, yet a well-thought-out program coordinated with the
others communications-mix elements can be extremely effective, especially if a company needs
to challenge consumer’s misconceptions.

EVENTS – the event and experience offer many advantages as long as they have the
following-

 Relevant – a well-chosen event or experience can be seen as highly relevant because the
consumer is often personally invested in the outcome.
 Engaging – given their lives, real-time quality, events and experiences are more actively
engaging for consumers.
 Implicit – events are typically an indirect soft sell.
Company sponsored activities and programs designed to create daily or special brand related
interactions with consumers, including sports, arts, entertainment, and cause events as well as less
formal activity.
4. PERSONAL SELLING –
Personal selling is, you guessed it, selling through a person (usually in a face-to-face setting). This
includes salespeople, representatives, brand ambassadors or even influencers. Using their
experience, specialist knowledge and communication skills, their aim is to inform and encourage
customers to buy or try a product or service.
 Customized – The message can be designed to appeal to any individual.
 Relationship-oriented – Personal selling relationships can range from a matter-of-fact selling
relationship to a deep personal friendship.
 Response-oriented – The buyer is often given personal choices and encouraged to directly
respond.

5. MOBILE MARKETING – increasingly, online marketing and social media rely on mobile forms
of communication and smart phone or tablet. 3 distinguishing characteristics of mobile marketing
are –
 Timely – Mobile communication can be very time-sensitive and reflect when and where a
consumer is.
 Influential –Information received or obtained via a smart phone can reach and influence
consumers as they are making a purchase decision.
 Pervasive – Consumers typically carry their smart phones everywhere, so mobile
communications are at their fingertips.

FEW ADVERTISING CAMPAIGNS FROM THE CORPORATE WORLD.

 Hero MotoCorp – Hero choose television as the advertising campaign.

Post the split between Hero and Honda, Hero changed its identity to be known as Hero
MotoCorp. This new identity needed to be told to people as the previously known ‘Hero
Honda’ had become a very well-known brand. To inform people of the demerger and
establish its new identity, Hero MotoCorp got the famous A. R. Rahman to make an anthem
for them. The television commercial struck a chord with the viewers who started talking
about the commercial and viewing it on the internet. A concept called ‘Image Advertising’
was used in this where the motive of the advertising was to change the image of the
company from what it was to something new.
P & G “Thank You Mom” ad. – On Mother’s Day of 2016, P&G released a fantastic, eye
watering ad on tribute to moms. The ad showed how Olympic players who won gold and
silver, had their moms backing them up from the time they were children. From learning to
walk, going to practice sessions, keeping care of the sick and helping them realize their
dreams – Mom was everywhere. And P&G wanted to salute all moms across the globe. This
ad creates a lot of ripples on social media and increased the recall value of the brand to a
great extent.
Standard Chartered Marathons – Another well-known tool is ‘Cause Related Marketing.’
Let us take the example of Standard Chartered’s Mumbai Marathon. The Marathon was
completely sponsored and executed by Standard Chartered. This helped spread awareness
about fitness and successfully got together people to participate in an event that will benefit
each one of them, thereby benefiting the society at large.
Cause related marketing which is another form of Corporate advertising also helps in
promoting other social issues that might be ailing the society. This greatly helps in
improving the brand image of an organization by making it look like one with compassion
and a desire to make the society a better place.

Question 5. Distinguish between sales promotion, advertising, and public relations.

Answer 5-
Advertising: -
  Advertising is bringing a product (or service) to the attention of potential and current
customers.
 Advertising is focused on one particular product or service.
 Thus, an advertising plan for one product might be very different than that for another
product.
 Advertising is typically done with signs, brochures, commercials, direct mailings or e-
mail messages, personal contact, etc.

Public Relations: -
 Public relations include ongoing activities to ensure the overall company has a strong
public image.
 Public relations activities include helping the public to understand the company and
its products.
 Public relations are conducted through the media such as newspapers, television,
magazines, etc.
 Public relations are often considered as one of the primary activities included in
promotions.

Sales Promotion: -
 Promotion keeps the product in the minds of the customer and helps stimulate demand
for the product.
 Promotion involves ongoing advertising and publicity.
 The ongoing activities of advertising, sales and public relations are often considered
aspects of promotions.
 Sales promotion is a short-term incentive to initial trial or purchase.

Difference between Advertising, Public Relations, and Sales Promotion: -

Parameter of Advertising Public Relations Sales Promotion

Comparison
Definition Advertising is Public Relations Sales promotion is a
bringing your involve building a short-term incentive
products and services stable relationship to initial trial or
in front of the public with the customer purchase.
by means of paid through strategic
announcements. communication.
Communicatio In advertising, you are Public Relations are Sales promotion
n selling your product two-way includes several
rather than listening to communication as the communications
your customers. feedback of the activities that attempt
Therefore, it is a one- audience also does to provide added
way form of matter in order to value or incentives to
communication. build trust consumers,
wholesalers, retailers,
or other
 organizational
customers to stimulate
immediate sales.
Aim Advertising aims to It helps you to build a The aim of sales
make people aware of better image of your promotion is to
your services so they company publicly. increase consumer
can consider paying demand, stimulate
for it. market demand, to get
potential buyers to
heed a call to action,
increase the size of
purchases and
improve product
availability.
Amount of The advertisements No control is there in The advertisements
Control are in total control of the case of public are in total control of
the company. relations. the company.
Publishing The ads keep on They can be Sales Promotions
period publishing as long as published only for should be short to
you want them to. once. create a sense of
urgency. It can be
from 4-6 weeks to 8-
10 weeks.