B.Com.

Honours
4th Semester Examination, 2021
PRINCIPLES OF MARKETING
1.

Indian Two-Wheeler Market is noticing a continuous upsurge in demand and thus resulting in
growing production and sales volume. This owes a lot to the launching of new attractive
models at affordable prices, design innovations made from youths‟ perspective and latest
technology utilized in manufacturing of vehicles. The sale of two-wheeler products has
increased substantially.

Market Segmentation

Marketers provide a range of product or services choices to meet diverse consumer interests,
consumers are satisfied and their overall happiness, satisfaction and quality of life are
ultimately enhanced. Hence market segmentation is a positive force for both consumers and
marketers alike.

Sub-Segmentation The Indian automotive industry has sub-segmented the motorcycle in

terms of Vehicle pricing, power and mileage. The sub-segments, Vehicle pricing and power is
directly proportional but mileage is inversely proportional.

a. Sub-Segmentation of Motor Cycles on Basis of Pricing:

• Economy Priced at Rs. 40,000 – Rs. 50,000
• Executive : Priced at Rs. 50,000- Rs. 65,000
• Premium: Priced at Rs.65,000 and above.

b. Sub-Segmentation of Motor Cycles on Basis of Power

• Economy: 100-110 cc
• Executive: 125+cc Premium: 150 cc

c. Sub-Segmentation of Motor Cycles on Basis of Mileage

• Economy: 55-65 Km/l
• Executive: 50-55 Km/l
 Conclusion Competition is very high in the market and hence change of strategy is undertaken
like expansion with new tie ups to explore in rural as well as in the premium segments. For the
future, in this stiff competition period, the players eye on customer satisfaction and after sales
service. Technology plays a very crucial and elixir role for innovation product differentiation,
quality improvement, new product development, add value creation to customers and key
players in the market thus increasing the growth of the industry and relative market shares of
the key players in the industry.

Positioning the product in the market

Product differentiation

Product differentiation is what makes your product or service stand out to your target
audience. It’s how you distinguish what you sell from what your competitors do, and it
increases brand loyalty, sales, and growth.

from scratch. What’s special about your product could be a new added feature or capability.
Or your product could offer fewer features than the products already on the market, focusing
instead on a simple, streamlined experience.

product differentiation importantance

The goal of product differentiation is to create a competitive advantage or to make your

product superior to alternatives on the market. In other words, you don’t just want to stand
out from the competition, you want to stand above it.

It’s important to differentiate your product in any industry, but especially if you’re in a
crowded market with lots of competitors. The goal is to show potential customers what you
can offer that other businesses can’t—and why that’s valuable to them.

Product-Life Cycle

The product life-cycle is an important tool for marketers, management and designers alike. It
specifies four individual stages of a product’s life and offers guidance for developing strategies
to make the best use of those stages and promote the overall success of the product in the
marketplace.

Linda Gorchels in her book “The Product Manager’s Handbook” defines the product-life cycle
and offers some key assumptions upon which it is based. The assumptions that are made are:

1. Products, in general, have a limited life span. All products will thus end up passing through a
product life cycle.
2. Each phase of that life cycle presents the business with a set of opportunities and challenges
to take advantage of and to overcome.
3. Products will require different efforts from design, development, marketing, purchasing, etc.
during each phase of their life cycle.
Stages of Product Life Cycle

1.Market Introduction
Product branding and quality will be determined.
Any intellectual property protection is obtained.
Pricing may be either be low (to gain market share) or high (to quickly recoup development
costs)
Distribution is selective (pending market acceptance of the product)
Marketing is targeted at innovators and early adopters to try and encourage rapid awareness
building for the product

At the point of market introduction:

1.Costs will be highest. This is because economies of scale are yet to be realized and there are
few (if any) sales to drive costs down.
2.Sales volumes will be relatively slow to begin with. Market adoption takes time to achieve.
3.Little or no competition. It is hoped, though not always the case, that there will be little
competition for a new product.
4.Demand needs creating. Marketing is particularly important to create demand
5.Customers need to be encouraged and educated to use the product.
6.Profitability, if any, will be low

2.Growth
Quality is maintained and development prioritizes additional features, complementary
products and support
Pricing will be maintained as the product is likely to enjoy a competitive advantage
Distribution is increased to accommodate increased demands
Marketing focuses on a wider audience

At the point of growth:

1.Costs begin to decline as economies of scale kick in.
2.Sales volumes rise appreciably compared to the introduction phase.
3.Profitability will rise
4.Brand/product awareness will rise
5.Competitors are likely to enter the market

3.Maturity
Product features will normally be enhanced to enable strong differentiation of the product
from competing products
Prices may have to be cut to ward off competitive threats
Distribution will become more intense and new incentives may be introduced to try and
encourage sales vs. competitors’ products
Marketing focuses on the differentiation of the product in the market

At the point of maturity:

1.Costs decrease to reflect rising sales volumes and the experience of the business in
producing the product
2.Sales volume reaches a peak and market saturation is attained
3.Further competitors enter the market
4.Prices will drop based on competition
5.Brand differentiation and product diversification becomes a possible strategy to protect
market share
6.Profitability begins to decline

4.Decline
Product goes into a maintenance phase
Attempts are made to recreate the product through new uses or by significantly changing the
product
The product may become a legacy offering sold to a niche group
Costs are reduced as far as possible
Finally, the product is discontinued when it is no longer economically viable to sell

At the point of decline:

1.Costs begin to become less than optimal
2.Sales volumes decline significantly
3.Prices fall further
4.Profitability depends less on sales than the efficiencies of production and distribution efforts

It is worth noting that while products are often discontinued at the end of the lifecycle; the
business will usually remain and will be involved in other products by this stage.
2.(a)
Importance of Pricing in Marketing Strategy
1. Price is the Pivot of an Economy:
In the economic system, price is the mechanism for allocating resources and reflecting the
degrees of both risk and competition. In an economy particularly free market economy and to
a less extent in controlled economy, the resources can be allocated and reallocated by the
process of price reduction and price increase.

Price policy is a weapon to realize the goals of planned economy where resources can be
allocated as per planned priorities.

Price is the prime mover of the wheels of the economy namely, production, consumption,
distribution and exchange. As price is a sacrifice of purchasing power, it affects the living
standards of the society; it regulates business profits and, hence, allocates the resources for
the optimum output and distribution. Thus, it acts as powerful agent of sustained economic
development.

2. Price regulates demand:

The power of price to produce results in the market place is not equalled by any other
component in the product-mix.
It is the greatest and the strongest ‘P’ of the four ‘Ps’ of the mix. Marketing manager can
regulate the product demand through this powerful instrument. Price increases or decreases
the demand for the products. To increase the demand, reduce the price and increase the price
to reduce the demand.

Price has a special role to play in developing countries where the marginal value of money is
high than those of advanced nations. De-marketing strategy can be easily implemented to
meet the rising demand for goods and services.

As an instrument, it is a big gun and it should be triggered exclusively by those who are
familiar with its possibilities and the dangers involved.

It is so because; the damage done by improper pricing may completely sap the effectiveness of
the well-conceived marketing programme. It may defame even a good product and fame well
a bad product too.

3. Price is competitive weapon:

Price as a competitive weapon is of paramount importance. Any company whether it is selling
high or medium or low priced merchandise will have to decide as to whether its prices will be
above or equal to or below its competitors. This is a basic policy issue that affects the entire
marketing planning process. Secondly, price does not stand alone as a device for achieving a
competitive advantage.
In fact, indirect and non-price competitive techniques often are more desirable because, they
are more difficult for the competitors to copy. Better results are the outcome of a fine blend of
price and non-price strategies. Thirdly, there is close relationship between the product life-
cycle and such pricing for competition.

There are notable differences in the kinds of pricing strategies that should be used in different
stages. Since the product life span is directly related to the product’s competitiveness, pricing
at any point in the life-cycle should reflect prevailing competitive conditions.
4. Price is the determinant of profitability:
Price of a product or products determines the profitability of a firm, in the final analysis by
influencing the sales revenue. In the firm, price is the basis for generating profits. Price reflects
corporate objectives and policies and it is an important ingredient of marketing mix. Price is
often used to off-set the weaknesses in other elements of the marketing-mix.

Price changes can be made more quickly than any other changes in the product, channel, and
personal selling and sales-promotion includes advertising. It is because; price change is easily
understood and communicating to the buyer in a precise way. That is why, price changes are
used frequently for defensive and offensive strategies. The impact of price rise or fall is
reflected instantly in the rise or fall of the product profitability, thinking that other variables
are unaffected.

5. Price is a decision input:

In the areas of marketing management, countless and crucial decisions are to be made.
Comparatively marketing decisions are more crucial because, they have bearing on the other
branches of business and more difficult as the decision-maker is to shoot the flying game in
the changing marketing environment.

Normally, profit or contribution is taken as a base for pay-off conditions. Price can be a better
criterion for arriving at cut-off point because; price is the determinant of profit or
contribution.

As pointed earlier, price as an indicator has a special role in the decision-making process in
developing countries because, consumer response to price changes will be more quick and
tangible as people have higher marginal value of money at their disposal. For instance, if it is a
decision regarding selecting product improvement possibilities, select that possibility which
gives the highest price as compared to the cost.

These five points make product pricing an important and major function of marketing
manager. However, until recently, it has been one of the most neglected areas of marketing
management.
In fact, we must have a specialist in pricing as we do have in other functions of marketing. This
negligence is quite evident from the fact that even the well-known companies in the world
price their products on simple concepts of costs market position competition and desired
profit. Scientific pricing is much more than this easy exercise.

2 (b)
Everything you need to know about the types of distribution channels. A manufacturer may
plan to sell his/her products either directly or indirectly to the customers.
In case of indirect distribution a manufacturer has again an option to use a short channel
consisting of few intermediaries or involve a large number of middlemen to sell his/her goods.
Therefore, there are various forms of channel networks having different number and types of
middleman.

Channels can be long or short, single or multiple (hybrid), and can achieve intensive, selective
or exclusive distribution. The length of channel could have any number of intermediaries or be
direct to customers.

Some of the types of distribution channels are:-

A. Direct Channel –
1. Selling at Manufacturer’s Plant 2. Door-to-Door Sales 3. Sales by Mail Order Method 4. Sales
by Opening Own Shops

B. Indirect Marketing Channel –

1. One-Level Channel 2. Two-Level Channel 3. Three-Level Channel 4. Four-Level Channel C.
Hybrid Distribution Channel or Multi-Channel Distribution System.

The channels of distribution, which are sometimes referred to as trade channels, may be
broadly classified into two categories:
 1. Sale through direct channels; and

2. Sale through indirect channels.

Type # 1. Direct Channels: The producer can sell directly to his customers without the
help of middlemen, such as wholesalers of retailers:
(i) By opening retails shop;
(ii) Through travelling salesmen;
(iii) Through mail order business.

These channels take the shortest route to the consumer. Certain goods, like the industrial
machinery, are directly sold to the consumers. Costly goods like computers and luxury
automobiles, are also directly sold. Some manufacturers open their own retail shops in many
localities and sell goods directly to consumers. The best example is that of the Bata Shoe
Company Shops. The manufacturers also try to sell through their own mail order departments.
All these indicate that producers are now taking steps to approach the consumers directly.
Though this is possible for some types of goods, the fact remains that the services of
intermediaries, such as wholesalers and retailers, are often essential in the distribution of
goods to consumers.

Type # 2. Indirect Channels:

The indirect channels of distribution are:
(i) Producer-Consumer (industrial goods with high technical content)
(ii) Producer-Retailer-Consumer (via large department ‘ stores)
(iii) Producer—Wholesaler—Consumer (most industrial products)
(iv) Producer-Wholesaler-Retailer-Consumer (most consumer goods)
(v) Producer-Sole Agent -Wholesaler-Retailer-Consumer (usually for a prescribed geographical
area).
The first channel, from the producer to the consumer, is preferable when buyers are few and
the goods are costly and mostly purchased by industrial users. In this category fail such goods
as complex machinery involving high technology, computers and luxury cars. In this case,
buyers can be directly contacted and goods can be sold by direct personal approach.
The second channel, from the producer-retailer to the consumers, is preferable where the
purchasers of goods are big retailers like department stores, chain stores, super markets or
consumer co-operative stores. In these cases, the wholesalers may be by passed because the
bulk of the goods are purchased by these large retail distributors to be sold to the consumers.
Goods like electrical appliances, fans, radios, ready-made garments and a host of other articles
fall in this category. This channel is also suitable when the goods are of a perishable nature,
and quick distribution is essential. However, the manufacturer will have to undertake such
functions as transportation, warehousing and financing.

Hybrid Distribution Channels

The third channel, from the producer-wholesaler to the consumer, can be successfully used in
distributing industrial goods. Under industrial goods are included goods which are used for
further production and not for resale. This is a shorter channel, and the producer eliminates
the retailer in this channel link. In this case, the buyers are business houses, government
agencies, consumer co-operative stores, etc.This channel is the mixure of Direct and indirect
channel.

3.

Decision-Making Process

5 steps of the consumer decision making process

1. Problem recognition: Recognizes the need for a service or product

2. Information search: Gathers information
3. Alternatives evaluation: Weighs choices against comparable alternatives
4. Purchase decision: Makes actual purchase
5. Post-purchase evaluation: Reflects on the purchase they made

1. Problem recognition

The first step of the consumer decision-making process is recognizing the need for a service or
product. Need recognition, whether prompted internally or externally, results in the same
response: a want. Once consumers recognize a want, they need to gather information to
understand how they can fulfill that want, which leads to step 2.

Develop a comprehensive brand campaign to build brand awareness and recognition––you

want consumers to know you and trust you. Most importantly, you want them to feel like they
have a problem only you can solve.
Example: For example, a new i-phone phone release, current mobile phone is not operating
well, not satisfied with current mobile phone, or just wants a new mobile. Now a person
need a phone which can be from any brand.

2. Information search

When researching their options, consumers again rely on internal and external factors, as well
as past interactions with a product or brand, both positive and negative. In the information
stage, they may browse through options at a physical location or consult online resources,
such as Google or customer reviews.

Another important strategy is word of mouth––since consumers trust each other more than
they do businesses, make sure to include consumer-generated content, like customer reviews
or video testimonials, on the website.

Example: for example, there are enormous number of mobile phone websites on internet,
such as Allphones (allphones.com.au) in Australia, consumers can compare all the mobile
phone’s features, price, and ranking on it. Mobiles may be from Samsung or Realme or
Apple(iphone).

3. Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have developed
criteria for what they want in a product. Now they weigh their prospective choices against
comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional product benefits,
product availability, or something as personal as color or style options. Your marketing
material should be geared towards convincing consumers that your product is superior to
other alternatives. Be ready to overcome any objections––e.g., in sales calls, know your
competitors so you can answer questions and compare benefits.

Example: For example, mobile phone companies slogans, such as human technology by
NOKIA, Hello Moto by Motorola and “Think Different” is one of the most recognizable
slogans of the 21st Century. The idea was first introduced in the 1997 TV commercial. “Think
Different” is still on Apple product today, 23 years after the TV debut. The purpose of those
slogans is to build up their own brand image, which means friendly, humanity. Therefore,
brand’s image is the critical factor when consumers think about the alternatives.

4. Purchase decision
 This is the moment the consumer has been waiting for: the actual purchase. Once they have
gathered all the facts, including feedback from previous customers, consumers should arrive at
a logical conclusion on the product or service to purchase.If you’ve done your job correctly,
the consumer will recognize that your product is the best option and decide to purchase.

Example: In terms of mobile phone, similar characteristic phones sometimes come with
different secondary features, For example, two same quality mobile phones; one comes with
higher brand image, but the other one comes with nicer brand image. Consumers generally
will choose one of those determinant attributes as their purchase decision, because of those
products are already on their list. So the purchaser only choose the iphone to show off as
well as for good quality also.

5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the consumer
and the seller. As a seller, you should try to gauge the following:

• Did the purchase meet the need the consumer identified?

• Is the customer happy with the purchase?
• How can you continue to engage with this customer?

In case of apple the purchaser must have enough money to spent and also want best
class post sales service i.e. customer care service by Apple Company. If all things are
right the purchaser will happy to use the iPhone at any price.

4(a) Social marketing : There are many approaches to obtaining a societal change through
effective social cause marketing programs. Still, the central tenant always remains the same:
the social good is always the primary focus. The concept of societal marketing, therefore,
revolves around driving change to local, national, and international communities in creative
ways, for the public interest. Social marketing, therefore, should not be confused with other
similar terms: social media marketing, green or sustainable marketing, and commercial
marketing with a social focus. So we can say that :-

• Social media marketing is that which uses social media platforms such as Twitter, Facebook,
YouTube, and LinkedIn. These are collective groups of web properties that are published
primarily by users to build online communities. They can be used to generate publicity for
social marketing campaigns, but that is not their primary purpose.
• Sustainable marketing is that which is used by a corporation to demonstrate their corporate
social responsibility. Although a commercial company may engage in social marketing–
promoting support for public radio, for instance–sustainable marketing to promote their
own business does not qualify as social marketing.
• Commercial marketing with a social focus may run the gamut from advertising a new 100
per cent recycled plastic water bottle to encouraging people to buy a more fuel-efficient
car. While these marketing campaigns are promoting eco-friendly products that will
undoubtedly have benefits for society, their primary focus is not societal good; it is selling a
product.

According to the Institute for Social Marketing, these are the most important social marketing
strategies and techniques:

• The ultimate objective of marketing is to influence action and change behaviour;

• Action is undertaken whenever target audiences believe that the benefits they receive will
be greater than the costs they incur;
• Programs to influence action will be more effective if they are based on an understanding
of the target audience’s perceptions of the proposed exchange;
• Target audiences are seldom uniform in their perceptions or likely responses to marketing
efforts and so should be partitioned into segments;
• Marketing efforts must incorporate all of the “4 Ps,” i.e.:
• Create an enticing “Product” (i.e., the package of benefits associated with the desired
action);
• Minimise the “Price” the target audience believes it must pay in the exchange;
• Make the exchange and its opportunities available in “Places” that reach the audience
and fit its lifestyles;
• Promote the exchange opportunity with creativity and through channels and tactics that
maximise desired responses;
• Recommended behaviours always have competition which must be understood and
addressed;
• The marketplace is continually changing, and so program effects must be regularly
monitored, and management must be prepared to alter strategies and tactics rapidly.

The best examples of social cause marketing campaigns, which result in actual change, are the
ones designed to shock, provoke, inform, and remind – all at once!

4(b) Online marketing is a set of tools and methodologies used for promoting products and
services through the internet. Online marketing includes a wider range of marketing elements
than traditional business marketing due to the extra channels and marketing mechanisms
available on the internet. Online marketing can deliver benefits such as:

• Growth in potential
• Reduced expenses
 • Elegant communications
• Better control
• Improved customer service
• Competitive advantage

Online marketing is also known as internet marketing, web marketing, or digital marketing. It
includes several branches such as social media marketing (SMM), search engine optimization
(SEO), pay-per-click advertising (PPC), and search engine marketing (SEM).

How Does Online Marketing Work?

Online marketing uses a variety of digital, online, and electronic means to push a message to
current and potential customers. The message might be crafted as an image, a piece of text, or
a video, and distributed in any number of places. It could be as simple as a social media feed or
it could be as complex as a wide-ranging and comprehensive strategy that encompasses
multiple modes including social media, email newsletters, websites, and other channels.

The type of online marketing that will be right for your business will depend on the nature of
your business, the habits and demographics of your target market, and your budget, among
other things. Market research will lead you to the right strategy or mix of strategies for your
offerings, and detailed performance measurements will indicate which are most successful for
you.

For example, a hair salon that wishes to incorporate online marketing might add an Instagram
feed featuring photos of hairstyles completed by its stylists to show off their talent. A
Facebook page could highlight rave reviews from happy customers and display a link to the
salon's website, where prospects could find information on reservations, available services,
and photos of the salon's interior.

4(C)

Green marketing is developing and selling environmentally friendly goods or services. It helps
improve credibility, enter a new audience segment, and stand out among competitors as more
and more people become environmentally conscious.

Our planet is facing a lot of threats among them air and water pollution, food waste, plastic
pollution, and deforestation. Chemicals manufactured by factories can be found everywhere.
To support the earth, many companies consider producing their goods in an environmentally
friendly manner. Moreover, the level of ecological awareness among consumers is getting
higher so people rather purchase eco-friendly products although their price might be higher.

Benefits of Green Marketing

With green marketing, companies have the great opportunity to change our planet for the
better and support people who are aware of the situation and try to help the environment. By
creating sustainable products, companies want to reduce the negative impact of waste
products on our nature. Going green enables you to win the trust and loyalty of the concerned
customers. It helps you:

• stand out in the increasingly competitive environment;

• reduce the negative impact of the production on the environment;
• save energy, reduce the use of natural resources and carbon footprint;
• produce recyclable products;
• improve the credibility of a certain brand;
• enter a new audience segment;
• ensure long-term growth;
• implement innovations;
• obtain higher revenue.