Marketing-Management 1

RTMNU MBA-II Semester CBCS (Outcome Based Education Pattern) 2020
Course Name: 2T2- Marketing Management

Module 1: Introduction: Concept, nature, scope and importance of marketing; Marketing
concept and its evolution; Marketing mix; Marketing environment – macro and micro
components and their impact on marketing decisions; Market segmentation and positioning
CO1: For a given marketing objective of a company the student manager will be able to develop a
suitable marketing mix.
Q1. An established bicycle manufacturing company from Taiwan is planning to launch its
famous brand of bicycle in India specifically for upper class kids, city riders, countryside riders
and mountain riders. Develop a suitable marketing mix.
Answer:
Marketing mix is strategic tool used by sellers to address their target market using 4 Ps which
encompass the 4 important dimensions of marketing. These 4 Ps are Product, Price, Place and
Promotion.
Since the company is already established and operating in Taiwan, it can be assumed that the
company has good financial strength and product quality is at par with Indian market. It can also be
assumed that the brand name is not much known in India. Target segments are upper class kids,
city riders, countryside riders and mountain riders. (Marketing mix is specific for the given
segments. It would change if the target segments change). With these assumptions, the marketing
mix can be stated as follows:
Product:
Value Proposition: Light weight carbon body and slick structure with larger wheel size. It makes the
bicycle riding a great experience and fun. It has disk brakes and state of the art suspension system. It
is available in 5 graphic colour combinations.
Product mix: City bikes, Mountain bikes, countryside bikes. Each contains Gents and ladies option,
each contains wheel size 24, 26 and 27.5 inches. Each option has 5 graphic colours. One more
additional product line is kid’s bikes for children with age less than 10 years. Each category has non
gear, 6 gears and 18 gears options.
Product Mix
Taiwan Make
bicycles
City Bikes Kid’s Bikes

Country side Bikes Mountain Bikes
Gents / Ladies 5 Colours
Gents / Ladies Gents / Ladies
5 colours Non- gear / 6 gears
5 colours 5 colours, 2 sizes
3 sizes
3 sizes Non-gear / 6 gears/
Non-gear / 6 gears 18 gears
Gearless
Product level: Branded and augmented (additional features like side indicators, front and rear lights)
Price: Launch with market skimming pricing strategy because the customers in this segment are
expected to have deep pockets. Without gear bikes could be priced at par with Indian competitors
while 18 gears can be priced higher than the competition. This is because in this section, maximum
bikes will be of foreign brands. Accessories can be provided free or at discounted rates as an offer for
limited time during the launch period.
Place: Use Multi channel distribution strategy to create maximum touch-points.
A. Use traditional channel: Producer >>> Distributer >> retailer channel to avoid higher margin
losses. Appoint Exclusive distributors in 100 Tier 1 and Tier 2 cities who can cover retailers in their
nearby localities. Use exclusive distribution strategy for distributors and selective distribution strategy
for retailers. Tie up with third party logistic company for domestic transportation. If manufacturing set
up is not located in India, then maintain warehouses at Delhi, Mumbai, Kolkata and Chennai.
B. Tie up with e-portals like Amazon and Decathlon.
C. Make online purchase available from company's website.
Promotion:
Since the product is a consumer good, we need not focus much on field personal selling. Howrever
inside store personal selling will be required for which the sales personnel should be trained.
Important components of promotion mix can be as below:
Advertising: Company’s financial strength is presumed to be good. Considering this, advertisement

media can be broadcasting (selected Television channels and radio) for positioning the brand.
Newspapers could be used for conveying promotional schemes. Internet advertisements should also
be used considering that the target audience is net-friendly.
Sales Promotion: Consumer sales promotion schemes like using mobile van promotions, test drives
and sponsoring sports events like bike rallies should be used. A famous sports person such as Virat
Kohli or MS Dhoni may be used as brand ambassador.
Dealer sales promotion schemes should also be employed for boosting sales through retailers and
distributors. Salesman contest, volume discounts and free accessories over purchase of certain number
bikes can be used.
Direct Marketing: Use promotions through SMS and email messages, specifically in Tier 2 and Tier
3 cities. Get databases of cycle clubs, marathon events and other sports events in various cities. This
data can be used for direct marketing.
Public relations: Press conferences along with brand ambassador in major cities announcing
launching of the brand in India. Ensure local media coverage throughout the country.
Publicity and social media: Create Face-book pages, customer groups/clubs online. Also manage
presence in other social media portals to make the brand a buzz. Use stunts and stories to make the
presence of product viral.
Marketing mix is a dynamic strategy tool hence it needs to incorporate changes as the brand moves
ahead through its PLC stages. Above stated marketing mix is for the introduction stage. Pricing and
promotion strategies will change dynamically through all PLC stages of bicycles.
Q2. A well established FMCG company operating in the field of consumer care products wishes
to launch a hair shampoo with three variants: Low cost, mid range and premium. Design a
marketing mix for the launch of this product.
Answer:
Low cost Mid range Premium

Cleansing product,
pleasant smell, low-
Cleansing product, Cleansing product,
cost packaging.
Product pleasant smell, pleasant smell created by
Available in sachets,
(Use different brand attractive packaging. named ingredients,
small packs and big
names for each Value proposition: premium packaging
packs. .
variant.) Shining and bouncy Value proposition: Hair
Value proposition:
hair. repair and styling.
Value for money,
regular, daily wash
Differentiating features
and ingredients
National commercials.
highlighted (e.g., safe for
show famous female
Below the line colored hair), as well as
celebrities as
promotions. Provide an emphasis on the
“customers” with
samples and trial packs science behind the
Promotion clean, bouncy hair
as freebies with other formula. Recommended
established products of by stylist in the salon.
Also advertise in
the company. Use co-branding with
magazines and product
leading salons. Advertise
placements.
in prime time and high
TRP channels.
Distributed in grocery
Distributed in grocery Distributed only
stores, supermarkets
stores. (Use the same in salons.
Place and pharmacy. (Use
channel as for other Producer >> Stockiest>>
the same channel as
personal care distributor >>salon >>
for other personal care
products) customer
products)
Lowest price on the
Highest price in the 3 to 5 times the price of
shelf. (discount pricing
grocery store. mid range. (price
Price ) Use Price bundling
(premium pricing) differentiation)
and combo pricing
Psychological pricing. Psychological pricing.
strategies.
Note: Students please note that above answer is given in table form for clarity and understanding of
students. However, answer in examination is suggested to be written in regular descriptive manner.
Q3. Multinational Beauty Care Limited plans to launch “Tan free Cream for Men” in India.
Suggest a suitable Marketing Mix for this product.
Answer:
Marketing mix is strategic tool used by sellers to address their target market using 4 Ps which
encompass the 4 important dimensions of marketing. These 4 Ps are Product, Price, Place and
Promotion.
Since the company is multinational, it can be assumed that the company has good financial strength.
Since the company is already dealing in beauty care products, Tan Free for Men is just an addition to
the existing product mix. However the major difference is that the segment is different. This segment
is ‘men’ and the other products are served to ‘women’.
Product:
Value Proposition: Tan Free for men uses natural ingredients and is skin friendly. It is designed
considering the skin texture of men. Thus it is exclusively for men.
Product level: Branded
Packaging: Use blue, black or other male appealing colours for the package tubes. Make available in
trial packs and regular tubes.
Price: Use market penetration strategy for product launching. Provide combo packaging with scrubs,
shampoo, talcum powders or shaving creams. Increase price using JND in next stages of product life
cycle.
Place:
A. Use traditional channel as used for other beauty care products. : Producer >>> Stockiest>>
Distributer >> retailer>> customer channel
B. Use intensive distribution strategy for retailers such as mom and pop stores, convenience
stores, supermarkets and hyper markets.
Promotion:
Since the product is a fast moving consumer good, we need not focus much on advertisement as the
primary tool of promotion and publicity as secondary tool of promotion. Important components of
promotion mix can be as below:
Advertising: Company’s financial strength is presumed to be good. Considering this, advertisement

media can be broadcasting (high TRP Television channels and prime time shows, advertisements on
Youtube, cinema halls and radio channels) for positioning the brand.
Sales Promotion: Consumer sales promotion schemes line providing trial sachets as freebies with
male products such as scrubs, shaving creams, hair gel, etc. A famous bollywood superstar may be
used as brand ambassador.
distributors. Dealer contest, volume discounts, coupons and free stock can be used for promoting the
product.
Publicity and social media: Create Face-book pages, customer loyalty clubs online. Also manage
presence in other social media portals to make the brand a buzz. Use stunts and stories to make the
presence of product viral.
Marketing mix needs continuous changes as the brand moves ahead through its PLC stages. Above
stated marketing mix is for the introduction stage. Pricing and promotion strategies will change
dynamically through all PLC stages of Tan free cream.
Q4. National Bank Ltd launched its new home insurance facility ‘PROTECTION’. The
Insurance market is highly competitive. National Bank Ltd has an objective to target a market
share of 20% within two years. Develop the marketing mix for middle class urban residents.
Answer:
(a) Product is made up of the detailed characteristics of the good/service on offer, its distinctive
features, its design, packaging and colour. It includes any unique selling point (USP) such as its
quality, after-sales service, guarantees, brand name and image.
The service (product) that National Bank Ltd offers new home insurance facility ‘PROTECTION’.
Highlight its features such as protection from fire, theft and damages by any natural calamities. Value
proposition: Highlight low premiums, prompt services and hassle free reimbursements.
(b) Price is what one pays for a product. It is also the representation of the value of the product to the
buyer. The price of a product on the market will be determined by the cost of manufacturing, the
competition and target market. If the particular product is aimed at the luxury end of the market then
the price set may be high and vice versa. The pricing strategy that National Bank Ltd should adopt is
market penetration pricing in order to capture desired market share as quickly as possible.
(c) Promotion is concerned with letting existing and possible future customers know about the
products on offer in order to increase sales. The essential promotional methods (techniques) are
advertising, sales promotion, public relations and personal selling. National Bank Ltd. opted for
public relation and advertising. The facility “PROTECTION” had a high profile celebrity launch
accompanied by an extensive advertising campaign through television, radio, newspapers and select
magazines. It also needs a strong team of salesmen to promote and push the product in B2B and B2C
markets. Sales force promotion can be used to boost the morale of the salesmen. Best sales force
promotional tool is performance based incentives. Product should be launched in the market officially
and a press conference should be arranged which will give sufficient news coverage to “protection” in
media.
(d) Place is about distributing the right product/service to the customer at the right place and at the
right time. The most suitable channel of distribution must be used. Selling Direct /selling online are
convenient for the sale of insurance and cuts out the costs associated with intermediaries. It brings the
organisation closer to the customer. Companies can advertise and sell their products online using a
company web site or can also collaborate with leading e-portals like “policy bazaar”. Thus, National
Bank Ltd should use multichannel distribution to get its product to the market place.
Service provider >> agents >> consumers
Service Provider’s website >> consumers
Service Provider >> e-portals >> consumers

In services marketing other 3 Ps are equally important and should be designed similar to the basic
4Ps.
(e) Physical Evidence: Physical evidences such as e-copy and hardcopy of Policy papers, testimonials
of customers on website are very important to assure the customers that the service is authentic. All
terms, clauses and conditions should be clearly mentioned in the policy document.
(f) Processes: Company’s operating standards such as ISO 14000 are very important because those
help in systemizing the process and reduce the negative impacts of human element in service delivery.
Company should highlight its processes, standards, accreditations and ratings at every touch point.
(g) People: In services marketing, the service provider is eventually a human being. Hence well
trained, well groomed and interactive staff is essential for providing the best and lasting “buying
experience” to the customers. Even in case of claims ad reimbursements, human interaction plays a
key role.
Q5. Develop a suitable marketing mix for firstcry.com, an E-commerce portal which
particularly targets “baby sitter’ (parents of new born babies and kids) segment.
Answer:
Firstcry.com is a well known ecommerce portal providing various products which basically
cater to the “baby sitter” segment. Following is the marketing mix for firstcry.com
Marketing mix for firstcry.com
Element Deatails
Product Firstcry.com is an e-portal service.
Value proposition : Wide variety of quality products for babies and kids at
most reasonable rates
Listed products are mostly branded. Excellent logistic packaging. Easy and
user friendly navigation on website. Secured payment gateways.
Price Best deals, discount pricing, various combo offers and price bundling offers,
flat discounts for limited time period, psychological pricing
Place Efficient logistics operations to handle all India deliveries within a span of 1
to 5 days. Products can be ordered online on website or through mobile app.
Promotion Advertisements: TV ads, use of popular celebrities as brand ambassadors,
Display ads such as hoardings and billboards, ads in newspapers and select
magazines. Internet advertisements and social media advertisements (
featured ads on various social media sites)
Sales promotion schemes: various offers. Promo codes, online coupons,

customer loyalty points, etc.
Public relations: Building company’s goodwill through press releases.

Connecting with social cause and CSR activities.
Physical evidence Confirmation of orders on email, SMS and website portals are very
important. Regular updates on order tracking and delivery reinforces faith in
customer’s mind. Company’s head office, operations office, phone numbers
and email Ids should be clearly mentioned in website because these physical
evidences are very vital for building trust in the market.
Processes Use of algorithms for systemizing the routine daily operations without any
errors. Technology includes elements of artificial intelligence aimed at the
formation of personalized interaction with the consumer. Delivery dates
assured to customers must be observed strictly and this is a challenge for the
processes.
People Well trained and skilled staff in back end , customer relations (onlie
interactions ) and front end ( delivery staff). Communication and efficiency
of people matters much in all the three categories.
Note: Students please note that above answer is given in table form for clarity and understanding of
students. However, answer in examination is suggested to be written in regular descriptive manner.
.Q6. Develop a Suitable Marketing Mix for a newly launched product “SAANJH GREEN TEA”
for middle class segment in Vidarbha region.
Answer:
Marketing mix has to be developed for the product Saanjh Green tea for middle class market in
Vidarbha region i.e. limited market coverage.
Product:
Value Proposition: Low value (value for money) regular green tea packs in 100 gm, 250 gm and 500
gm sizes. Freshly acquired and purchased from farmers in Nilgiri Mountain ranges and packed
hygienically. Freshness and purity of product are assured.
Product mix:
Comes in 3 pack sizes and three variants: Regular or basic, Ginger flavoured and Cardamom
flavoured.
Product level: Branded
Price:
Use market penetration strategy for middle class segment in Vidarbha. Ginger and Cardamom
versions can be sold with at par pricing strategy in competition with middle level brands in the
market. Three variants can be sold as combo at discounted rates. Price bundling strategy can also be
used.
Place: Use conventional distribution strategy for B2B selling.
A. For tea seller segment (Restaurants and tea shops) use traditional channel: Producer >>>
Distributers >> tea vendors
B. Appoint district-wise distributors in all districts of Vidarbha. They can cover retailers in their
districts. Producer >> Distributors>>Retailers >> consumers
Promotion:
Since the product is FMCG, we need not focus much on personal selling. Important components of
promotion mix can be as below:
Advertising: Company’s financial strength is presumed to be moderate since the market coverage is
limited. Considering this, advertisement media can be Cable TV, Newspaper inserts, Vehicle ads and
if possible, radio. Internet advertisements should also be used considering that the target audience
could be net friendly. Displays near gyms, sports clubs and public parks can also be effective.
Sales Promotion: Umbrella campaigns at retailers’ locations, providing free green tea drink to
visitors and providing tea at local exhibitions, melas, etc. Free samples can be distributed at
launching stage.
distributors. Volume discounts and coupons for certain sale of packets can be used.
Direct Marketing: Use promotions through SMS and email messages, using databases.
Social media: Create Face-book pages, customer groups/clubs of green tea consumers online. Also
manage presence in other social media portals to make the brand a buzz. Promote importance of green
tea through various social media handles.
Above stated marketing mix is for the introduction stage. Pricing and promotion strategies will change
dynamically through all PLC stages of green tea.
Module 2: Product Decisions: Concept of a product; Classification of products; levels of
product, Major product decisions; Product line strategies and product mix strategies; Product
life cycle – strategic implications; New product development and consumer adoption process.
Packaging and labeling
CO2: For a given product the student managers will be able to apply the three steps of target
marketing: market segmentation, target marketing, and market positioning
Q1. Apply STP approach for “Oriental” brand of tea produced and sold by Supreme Tea
Company in India.
Answer:
STP approach consists of 3 components which are Segmentation, Targeting and positioning. These
three components are vital in framing marketing strategy for any product.
In above situation, let us assume that company has good financial strength and presence throughout
India. Tea is sold as branded good to small retail buyers but the volume buyers treat it like a generic
product.
Segmentation: Geographic segmentation is insignificant as affinity and taste for tea seems to be
similar in rural as well as urban segments. In demographic segmentation, there can be economy
product and premium product based on middle class and upper middle class segments, respectively.
Behavioural segmentation is significant as there is one segment of volume buyers i.e. Hotels, tea-
shops and cafe outlets who buy in volumes. Other buyers are small quantity retail buyers. Biggest
segmentation base for tea is psychographic segmentation. Some may like strong aromatic taste and
some may like mild, soothing taste. Some may prefer tea bags and some may love inclusions like
ginger and cardamom. Hence segments can be:
Behavioural: Volume buyers, small quantity buyers

Demographic: Lower middle class, upper middle plus rich class
Psychographic: People who prefer Strong taste, People who
prefer mild taste, People who prefer Dip tea
Targeting: Use differentiated targeting strategy as there are various segments. Company should cater
each segment with different product version
Volume buyers big packs at discounted rates, plain and strong

Small quantity retail buyers Smaller packets
lower middle class segment : Economy strong , economy mild, tea dust
upper middle and affluent class : premium strong with inclusions , premium strong
without inclusions, premium mild with inclusions
, premium mild without inclusions, special tea
with ingredients like ginger and cardamom
People who prefer dip tea dip tea bags
Positioning: Since product is good, use product as a positioning tool instead of pricing or distribution.
Use a positioning statement which describes its taste and freshness. Only one or two adjectives should
describe the product and same should be used through advertisements and other promotional
campaigns. If freshness and taste are those two words, these should be emphasized everywhere. Brand
managers should develop stories for these words. (Why the product is so fresh and how it gets its
natural taste). Positioning is very important to strengthen the brand.
Properly designed and implemented STP approach helps in identifying right segments, selecting right
targeting approach and precise positioning. This increases market response and ultimately reflects in
improvements in sales.
Q2. Suppose you have just accepted a product marketing job with a technology company called
IC. IC’s main product is surveillance camera. Identify the segments and suggest the targeting
strategies to IC.
Answer 2. Segmentation is a twofold process that includes:
• Identifying and classifying people into homogeneous groupings, called segments

• Determining which of these segments are viable target markets.
Common Market Segmentation Approaches
Type of Approach Segmentation Criteria

Nations, states, regions, cities, neighborhoods,
Geographic
zip codes, etc.
Age, gender, family size, income, occupation,
Demographic
education, religion, ethnicity, and nationality
Psychographic Lifestyle, personality, attitudes, and social class
User status, purchase occasion, loyalty, readiness
Behavioral
to buy
Step 1: The Business Need that is addressed with a surveillance camera is security. All the people
who need security can be catered to.
Step 2: Segment the Total Market. Next, we can break down this large market into smaller sections,
using a process known as segmentation. Specific segments might include the following:
• Hospitality
• offices
• Educational institutes
• Home Security, etc
Step 3: These potential customers can be analyzed on the following parameters:

• Who will actually buy your product?
• What do you know about them?
• Where are they situated geographically?
• How much do they spend on security?
• What are they likely to spend on your products?
• Where do they shop?
• What is their income?
Step 4: Research and Validate Market Opportunity.
Step 5: Choose the targeting strategy. Following are the targeting strategies:
Strategy Target Market
Mass marketing Same product for everybody everywhere
Differentiated marketing Different products for different segments
High penetration within smaller, specialized segments.

Niche marketing
Offer various products to one niche segment.
Micromarketing Offer customized solutions to Individual customers
For the given product the company can go for differentiated marketing, offering different products for
different segments.
Segment Product / Variant

Hospitality High precision, High value products. Use direct
marketing, institutional selling, direct
distribution.
Offices High precision , High value products Use direct
distribution.
Educational institutes Medium precision, Medium value products, Use
direct marketing, institutional selling, direct
distribution.
Malls, shops, Parking lots High precision , High value products, Use direct
distribution.
Traffic signals ( Government sector) , railway Medium precision, Medium value products, Use
stations, airports, Bus stations ,etc. direct marketing, institutional selling, bidding
through closed and public tenders, direct
distribution.
Home Security Economical variants to be affordable for
households. Print media advertising (national and
leading local News papers), hoardings, Internet
ads, social media and digital marketing; tie up
with leading e-portals. Distribution through
exclusive dealers.
Q3. Explain STP and apply the concept of STP to Maggie, a Nestle brand.
Answer:
The STP process demonstrates the links between an overall market and how a company chooses to
compete in that market. It is sometimes referred to as a process with segmentation being conducted
first, then the selection of one or more target markets and then finally the implementation of
positioning. The goal of the STP process is to guide the organisation to the development and
implementation of an appropriate marketing mix.
Market Segmentation: Market Segmentation is defined as the process of splitting a market into
smaller groups with similar product needs or identifiable characteristics for the purpose of selecting
appropriate target markets.
Market Targeting: Market Targeting refers to an organisation's proactive selection of a suitable

market segment (or segments) with the intention of heavily focusing on the firm's marketing offers
and activities towards this group of related consumers.
Market Positioning: Market positioning is the target market's perception of the product's key benefits
and features relative to the offerings of competitive products.
STP of Maggie:
Segmentation Demographic Age, gender, Income class,

Geographic Plains , Hill stations
Psychographic Students, Travelers, couples,
friends , eating habits ( Veg/
non veg, Spicy, health
conscious etc) , casual
consumers
Behavioural Large packs, small packs (
based on volume buyers and
small quantity buyers)
Targeting (differentiated Atta noodles Health conscious Segment (
targeting ) prefer Atta over Maida)
Regular Casual eaters segment
Big packs / Family Packs Volume buyers Segment
Spicy , Veg / non-veg Students, travelers segment
Positioning ( product based Bhook lagi to bachchon ko sirf Relate the basic need “hunger”
positioning, market leader, Maggie chahiye ( TV one liner) with Product Maggie
quick preparation, solution for 2 minutes Establishes it as fast food, easy
hunger) to cook, ready to serve in two
minutes.
Taste bhi- health bhi Promoting health consciousness
through Atta noodles
2 minutes for education ( new Promotes child education,
tagline) connects with social aspects
which appeals people
emotionally
Q4. Apply segmentation and targeting approach for an Airlines company.
Answer:
In a marketing context, segmentation refers to the practice of identifying different customer types and
marketing to them differently. The starting point of segmentation is to identify where there are key
differences between customers. Then, the company can create specific marketing that targets their
various segments.
Let's look at some of the marketing approaches we may want to use for these segments.
Identifying the segments

Frequent and vacation travelers
These are non-business consumers that are frequent travelers via airlines. Generally they would be
older consumers, perhaps retirees, who have the time and money to holiday quite frequently.
Because they are experienced travelers, they are likely to be loyal to a small number of airlines,
depending upon their final destination.
They would seek some comforts of travel and probably would not choose an airline simply based on
price. They would be less likely to research airlines as well, as they are very experienced consumers
in terms of airline travel. In fact, they are more likely to be opinion leaders, contributors to Trip
Advisor and other similar sites.
Therefore, in addition to their frequency of purchase, they are an attractive and important market
segment as they have significant ability to influence the purchase decisions of other consumers in the
airline market.
Loyal Frequent travelers
The second market segment of airline consumers are also quite regular airline travelers. Some may
travel for business, but the majority will travel for personal reasons, such as holidays and visiting
family.
As suggested by their segment name, they are highly brand loyal to a particular airline wherever
possible. The prime motivation for their strong loyalty is to accumulate frequent-flier and/or loyalty
points, which they can generally redeem for free flights in the future.
As a consequence of their brand loyalty, they may form an emotional view of the airlines brand (that
is, see them as a very good airline), far less price sensitive and are far less willing to consider
alternative airlines.
This is an ideal target market for airlines, as they provide a long-term customer base. Of course, the
difficulty with this market segment is attracting them in the first place they are far less willing to
switch between airline brands.
Urgent travelers
Urgent travelers are infrequent users of airlines and generally represent a fairly small market segment
in terms of size. These consumers have an urgent need to travel that is usually unexpected. An
example of urgent travel may relate to attending a wedding or funeral, or having a sick relative or
having some business/work situation that needs immediate attention.
Given their need to travel almost immediately, they are more concerned flight availability and
destination requirements, rather than any consideration of price or airline brand.
Airlines will typically withhold a handful of seats on each flight in the last few days prior to the flight
to be sold at a premium price in expectation that a proportion of consumers will have an immediate
need to travel.
Business travelers
Business travelers usually form a large proportion of an airline’s domestic customer base. Many
businesses have operations in different parts of the country or will have sales opportunities in different
cities, necessitating the need to frequently travel by plane.
Generally, business customers make an organization-wide decision as to the choice of airline, rather
than the individual traveler being involved in the purchase decision.
As indicated by its name, many businesses choose travel business class, particularly for employees
expected travel frequently or for management and executive level staff.
Needless to say, this market is relatively brand loyal to an airline and is quite price insensitive. As a
result, it is common for the airline to arrange a contractual deal with larger businesses, organizations
and even government bodies in order to win a significant proportion of this business on an ongoing
basis.
Budget conscious
Budget conscious air travelers tend to be more infrequent travelers and holidaymakers, or consumers
who perceive little difference between airlines.
Most markets will have a group of consumers (that is, a market segment), who are more pri
e sensitive. In this case, infrequent travelers may not have the direct experience to distinguish between
airlines and therefore may use a price decision to simplify their choice. (However, some of these
consumers may choose a more expensive flight, believing it to be of higher quality.)
However, consumers who see little difference between airline offerings will simply aim for the
cheapest price, as it represents the most value for them, given they see no extra benefits attached to
any particular airline.
In terms of this market segment, it is important to remember that some consumers in this segment low
income earners, but other consumers are simply using price as a point of differentiation in their
purchase decision.
Targeting
Airline Company can use differentiated targeting strategy for the above mentioned segments. In
differentiated targeting, company should offer different product or service to different segments
catering to the needs of the segments.
Segment Service offer
Frequent and vacation travelers Luxury class service and high price. Experience
matters than money.
Loyal Frequent travelers Luxury / business / economy class with travel
point and frequent flyer advantages
Urgent travelers Withhold some seats for this small segment.
Charge premium price to last minute buyers!
Business travelers B2B segment, corporate discounts and
contracts at corporate level. Special service to
this almost loyal segment
Budget conscious Economy class, basic services will do. These
can be converted in to loyal customers
through additional services.
Since Airline service comes under “services”, service delivery can be modified according to the
segments. Crucial part of the approach is to identify the right segment. CRM tools can help service
providers in this identification process very effectively.
Q5. Develop segmentation, targeting and positioning (STP) approach for an e-portal decathlon
which sells only sports products online.
Answer:
STP marketing is a three-step approach to building a targeted marketing plan. The "S" stands for
segmenting, the "T" for targeting and the "P" for positioning. Together, these help marketers
formulate a strategy for marketing a product by segmenting the audiences, targeting segments
according to their preferences and positioning their brand as the better choice.
Since the company is selling only sports products online, we can say that it is operating in a niche
market. In that case the major segment is “people who wish to buy sports products” but there are
micro segments in this market as below:
Segmentation
Only those segments are to be considered which have different buying patterns and for whom,
company has to create different messages / different categories or sub categories.
Demographic male and female, low income/ high income

Geographic region-wise, country-wise needs will differ
Behavioural individuals / clubs and associations, sports –wise (cricket, football,
badminton, table tennis, etc)
Psychographic Amateur, club players (professional), state/national/ international players
Targeting
When you have multiple, distinct market segments, you typically need to customize marketing
campaigns that appeal to each. As you go through the STP process, you will select which segment to
target with your upcoming campaign. Usually, the more information or data you have about specific
market segments, the better you can target them by meeting them where they're at through the use of
language, media channels and visual storytelling that appeal to their preferences.
Basically the targeting approach of the company comes under “Niche marketing”. But now-a-day
companies rarely treat niche as a niche. They mostly use a differentiated marketing approach.
Niche targeting approach
All products >>>>> people looking for sports goods
Differentiated targeting Approach
Economy products >>>> Low income customers & Amateurs
Premium products >>> High income & Club going/ professional players
Sports –wise categories >>>> sport-wise buyers (ex: cricket kits for cricket buyers)
Prime membership >> frequent buyers
(Company can have premium or prime memberships for frequent buyers, can create separate payment
gateway for such buyers)
Once these sub-segments are defined, products or messages for each sub segment have to be
developed and offered separately to them. Customer relationship management tools play very
important role in profiling customers and labeling them under a specific segment. Once the customer
is attributed with a segment, specific messages related to him or her can be sent. Specific products
which appeal to him or her can be displayed.
Positioning
Positioning is how you align your brand or products in the target market. The goal is to offer
something that is bigger, better or more valuable than what your competitors offer to a particular
market segment. The key to positioning is to examine the relationship between your values as a
company and what you offer as it relates to the customer segment you want to target.
A brand name should be assisted by a tag line which clearly indicates the unique competitive
advantage for the firm. In case of an e-portal which specifically sells sports products. For example the
tagline for Decathlon is “Sports for all, all for sports” which has two messages. First is that everybody
should involve in sports activity and the second message indicates that Decathlon offers everything
for sports. In positioning a product, its brand name, tagline, unique proposition play very vital role.
Since this e-portal has to provide various categories for sports exclusively, it is suggested to focus on
product and not on other aspects like price and distribution. In that case company can position itself as
the one which provides quality products, branded products and precisely the things that sports people
need. Another option can be positioning based on Price saying “we offer best deals in sports”. They
can also focus on delivery and customer service. Hence for positioning company will have to find out
one unique proposition which other competitors can’t offer. It can be “variety”, “depth of product
categories”, “best deals”, etc.
Module 3: Pricing Decisions: Pricing objectives, Factors affecting price determination; Pricing
policies methods and strategies, Initiating and responding to price change.
CO3: For various stages in the life cycle of the product the student managers will be able to
recommend a suitable pricing strategy
Q1. Recommend suitable pricing strategies for a wrist watch brand “TIME-Machine” in its
various product life cycle stages. Justify your recommendations. (Assume that “Time-Machine”
is a value for money brand catering to price sensitive and working class segments in India)
Answer:
Time-Machine is a value for money brand of wrist watches suitable for to price sensitive and working
class segments in India. Following pricing strategies can be adopted in various stages of product life
cycle for Time-Machine.
Introduction stage:
In introduction stage, two entry level pricing strategies are usually adopted: market skimming and
market penetration. Skimming strategy is used for high end, high value and prestigious products and
market penetration strategy is used for price sensitive markets and low value products. Since the
product Time-Machine is “value for money” and caters to price sensitive markets, we can use
“market penetration strategy”. It aims to capture market with initial low pricing. Price at initial
stage is kept lower than the competition. This will help in capturing maximum price sensitive market
is short span of time. It can be clubbed with some non-price offers such as free annual maintenance
contract, providing additional straps, belts etc.
The Growth Phase
During the growth phase, company be able to ramp up production, which helps bring down the cost
per unit. If you're able to reduce your selling price while keeping your profit margins healthy, you'll
be in a position to get some profit happily from your product's gaining popularity. One way to
maximize your revenues is by plowing some of those profits into opening new markets and
distribution channels, so that you can capitalize on your product while it's at its hottest. This is also
the stage where prices can be increased using expansionistic pricing strategy. It means that instead
of increasing price of existing variants, company should launch new and higher end variants at higher
prices. Eventually the basic version of the product can be withdrawn from the market. Even the price
of basic version can be increased in increments using JND (Just Noticeable Difference) concept.
The Maturity Phase
Eventually, any product reaches a point of stability, where your markets are fully penetrated, and
growth gradually slows to a relative standstill. Even if your product originally was a ground-breaking
product, you probably now have competitors who offer something similar. This is the stage in which
you stand to make the most money from your product, because you'll already have plenty of
awareness in the marketplace, and your R&D costs are paid off after launching high end versions.
As long as you can find ways to differentiate yourself from your competitors, your product can
continue to be a cash cow. Even in a scenario in which cost-cutting rivals force you to reduce your
prices, you should have plenty of room to make a profit. In this stage product managers may be busy
in creating differentiations in their existing variants. From pricing point of view, company can launch
discount schemes with limited time period offers. One can also use price bundling strategy i.e.
bundle up a gents and ladies watch to make a “couple offer” or a bundle of formal, casual and sports
watch to make a “complete man” or “complete woman” offer.
The Decline Phase
Over time, new products or new technologies come along, and sales of your product will begin to
decline. At this stage, you'll probably have worked out all the possibilities in your manufacturing
process, and your costs now are as low as they'll ever be. At this stage company can decide either to
close down the brand or to re-launch it with radical changes. If the product has to closed down then
instead of discounts, company has to adopt “mark downs” in pricing. Company can create
“clearance sales” at rock bottom prices and also provide volume discounts to retailers and
distributors. If the product as to be re-launched, company has to again adopt entry level price strategy
(market penetration) as used in introduction stage.
PLC stage Pricing strategy
Introduction Market Penetration Strategy , Psychological pricing
Growth Expansionistic pricing, introduce upper variants with high price,
Maturity Price Bundling , combo pricing
Decline (closure) Mark downs, clearance sales
Decline (revival) Market Penetration Strategy for new variants launched
Q2. Coca cola is planning to launch a new energy drink called Energize. This is a new entrant in
the growing market for drinks enhanced with stimulants to give consumers extra energy.
Suggest a suitable pricing strategy for Energize in each stage of product Life cycle.
Answer:
Price determines how much revenue a company is going to earn. It determines whether the business is
covering the costs to create and deliver its products. Price drives the financial health of the business.
Premium pricing: high price is used as a defining criterion. Such pricing strategies work in segments
and industries where a strong competitive advantage exists for the company.
Penetration pricing: price is set artificially low to gain market share quickly. This is done when a new
product is being launched. It is understood that prices will be raised once the promotion period is over
and market share objectives are achieved.
Economy pricing: no-frills price. Margins are less; other expenses like marketing and advertising
costs are very low. This strategy targets the mass market and high market share.
Skimming strategy: high price is charged for a product till such time as competitors allow after which
prices can be reduced. The idea is to recover maximum money before the product or segment attracts
more competitors who will lower profits for all concerned.
Introduction stage: Energize by coca cola is a new entrant in the growing market of energy drinks.
Since the market already has players, the pricing strategy that will be best for the company will be
penetration pricing. This way company will be able to attract the customers of other companies in the
initial stage of introduction.
Growth: Once the brand name of Energize is established in the market and the product starts gaining
momentum, company can use “just noticeable difference” (JND) technique to make small incremental
changes in the pricing of the product. In due course of time, product should achieve its target price.
Once the target price is achieved, company is free to adopt any of the competition based pricing
strategies given below.
Discount pricing – Price the product slightly below the popular and nearest competitor’s price. This
will help in grabbing price sensitive customers.
At par pricing – Price the product at the same price point as of the nearest competitor. This makes the
customer indifferent about the product. This way, we allow customer to compare the utility he/she
gets out of both products. Eventually Energize can prosper on the basis of quality.
Premium pricing – Price the product at slightly higher price than the competitor. This will help in
strengthening the brand image as “premium product” and quality conscious customers will turn
towards energize.
Maturity stage: Some additional offers need to be given to keep the product running in the market. It
can be either launching product variants with different flavours and “diet” versions. Another option is
to change the packaging to Can, tetrapack, etc. Optionally one can increase the quality of product at
same size. In no case mark down should be allowed as it will dilute the umbrella brand “Coca Cola”.
Decline stage: Either new versions should be launched or product be closed down. Instead of mark
down for consumers, company can try giving schemes to the retailers to clear the stocks from the
market in a given time span.
PLC stage Pricing strategy
Introduction Market Penetration pricing
Growth Competition based pricing ( Discount pricing or At par pricing or

Premium pricing)
Maturity Add new variants. Use sales promotional schemes such as

discounts for limited time.
Decline (closure) Discount pricing
Decline (revival) Market Penetration pricing for re-launched product
Q3. Identify the product life stage for each product and suggest pricing strategy for it. 1.
Coalgate Vedshakti Toothpaste 2.Mother Dairy Ice-creams 3. Parle G Biscuits 4. Bajaj Spirit
scooter
Answer:
1. Coalgate Vedshakti is recently launched and not yet a popular choice of customers
hence it can be considered as in “Introduction” stage.
The initial stage of a product’s life cycle, development, is when the product is first introduced to
the market. Typically, sales are slow during this stage because consumers are unfamiliar with the
new product.
Sales are especially slow when the product is unique because consumers might not have an instant
demand for it. But, there is generally low competition.
During this stage, you might choose to increase your marketing efforts to raise awareness about
the new product. You can promote the product on a budget through outlets like social media
channels and your business website. You will need to explain the product in your marketing
materials.
Developing a product is expensive, so you might be desperate to make sales. Therefore, you will
need to come up with a pricing strategy that fits your business.
Pricing strategy in this stage: Many businesses either price their products low or high, depending
on their industry and financial projections.
Pricing products low (market penetration) helps a business penetrate the market and gain
consumer attention. Once the business has a loyal customer base, it typically increases prices.
Businesses might choose to introduce products with high prices. You might price products high
(price skimming) to try to turn a quick profit and make up for the costs of developing. Pricing
products high is especially good if there is a demand for a product and lack of competition.
Keeping price high also depicts that the product is of premium quality.
2. Mother Dairy Ice-cream can be considered in “Growth” stage. This is because it is
visible in the market and customers reach the specialty outlets of Mother dairy to buy
ice-cream.
During the growth stage of the life cycle of a product, there is high demand for the product and a
lot of sales. Though this is a really great stage for the product, there are some drawbacks.
When you sell a product in its growth stage, your competition might begin to duplicate it.
Competitors might release the same product you sell at a lower price, or they might work on
making the product better.
You might need to work on getting your customers to choose your product over the competition.
This could require more marketing and lowering your prices. You might try to market to new
customers.
Pricing strategy in this stage: Because of the competition, you might need to lower your prices
and adopt a competitive pricing strategy. However it can be either discount pricing, at par pricing
or premium pricing. Mother dairy uses at par pricing.
3. Parle G is in prolonged “Maturity” for decades. It is a success of “Chai-biscuit” concept
launched by Parle years ago.
In the maturity stage, there isn’t as much sales growth. When the product is mature, most of your
target customers already have the product, so there is not as much demand.
Your sales volume will not be climbing like during the growth stage. Some businesses continue
making additions to their products during this stage.
Typically, the maturity stage has the most competition. Once products are developed, they are
more unique from competitor to competitor. Many businesses work on marketing their product
and emphasizing its uniqueness as well as any discounts.
Pricing strategy in this stage: Many businesses continue using the competitive pricing strategy in
the maturity stage. In fact, competition is usually fiercer than in the growth stage. Consider
cutting your prices to keep customers, but don’t go below your break-even point.
You could also use a discount pricing strategy so that consumers will prefer your product. With a
discount pricing strategy, you need to mark down the price. Parle G biscuits are sold on discount
pricing.
4. Bajaj Spirit scooter is in “Decline” stage as the sales have declined and customer choices
are changing.
The final stage in a product’s life cycle is decline. There is less demand for the product, and
businesses must decide if they want to discontinue the product or keep producing and selling it.
Some businesses that don’t pull the product add features to make it stand out more and give it
fresh life.
There are a few different reasons for the decline of a product:
• Competitors’ products are getting more attention than yours
• Consumers are no longer interested in the product
• You aren’t profiting off the product anymore
Pricing strategy in this stage: During a product’s decline, many businesses choose to lower its
price. In fact, there are a few different pricing strategies you can try in this stage.
You can try a discount pricing strategy to increase customer traffic. This will help free up space at
your business for new products.
Another pricing strategy option is bundling. With bundling, you could include the declining
product in a deal with other products. This can help get rid of the declining product and increase
sales. However bundling is not possible in high value durables like scooters. Company can thus
provide 3 years free service instead of one year or can provide free or discounted accessories.
Q4. Develop pricing strategies for a) Ghadi detergent soap which is not a premium soap b)
Hotel Naini Deluxe, a three star hotel in Nainital ( famous hill station) C) Khadim Shoes (
moderate value shoes)`
Ghadi Detergent soap is not considered as a premium product in consumer market. Tide, Rin, Surf
Excel and Ariel are the leading brands. Ghadi mainly appeals rural markets and to the price sensitive
customers. It is however an established brand in Indian market due to its extensive advertising
campaign. It definitely has a brand recall though not brand preference. Ghadi is in maturity stage for
years. Since it is a FMCG product and faces competition in the market, it should have a competition
based pricing strategy.
Considering its price sensitive market, it should be offered with discount pricing i.e at a price
significantly lower than the competition. To make it more attractive, it can be offered with a pricing
strategy of price bundling. Two, three or four soap bards can be packed together with a price tag
lesser than the addition of individual prices of those soap bars. Alternately, one can offer “combo
offer” by making a combo of Ghadi detergent bar with Ghadi detergent powder.
Hotel Naini Deluxe is a three star hotel located in Nainital. Nainital is picturesque hill station in
Himachal Pradesh situated in Himalayan ranges. Obviously it comes under services marketing. In
services prices are more flexible than products. Hotel displays its tariffs on its website as well on
other travel portals like Oyo, HolidayIQ, Goibibo, Mamkmytrip, Trivago, etc. Pricing of hotels comes
under demand based pricing i.e. they offer “price discrimination” strategy. Price discrimination
pricing can be done based on variations in demand. Demand based pricing can have customer based,
volume based, place based or time based discriminations.
Hotel Pratap which is situated in Nainital , can offer time based discrimination pricing. It can have
higher tariffs during peak season and lower tariffs during off season. It can also provide various
options such as European Plan EP( only room, no food included in tariff), Continental Plan CP (room
plus breakfast), American Plan AP ( room plus all three meals in a day) and Modified American Plan
MAP ( room, breakfast and choice between either lunch or dinner). This provides various choices to
the customers to choose from.
Khadim Shoes is a consumer durable product. It is moderate value and moderate involvement
product. It has to offer “value for money”. Best way to make the price attractive to the customer is use
“Psychological pricing strategy”. It is done by setting a price tag at price value which is usually a add
figure. Instead of using a price point of Rs. 800, company can use Rs. 799, 797 or 795. These numbers
psychologically look small and cheaper than Rs.800.
But at the same time, Khadims is also in competition with other products. Khadims has to decide its
price position. If it wishes to position itself as a premium brand, it should on one hand offer rich
quality product and on the other hand should have price tags higher than the competitors i.e.
“Premium pricing”. If it wishes to position itself as an economical brand, it can offer a moderate
quality product with “discount pricing”. In both the situations, it can also use psychological pricing.
From above three examples it can be concluded that pricing strategy is a dynamic process and it
changes from product top product, market to market and situation to situation.
Q5. Develop pricing strategies for: i) a newly launched café, ii) an apartment in a renowned
township, iii) a rosewood handicraft coffee table which carries heritage value and iv) water
treatment plant project for a paper factory
Answer:
i)A newly launched café has to create a buzz in the town. It has to attract customers and increased
footfall in its initial face. If it is franchise unit of any established brand like Café Coffee Day or
Starbucks, then it will usually get crowd from the launching stage itself. Let us assume that it’s a local
café whose brand in not yet established or known to the market. In such case Café can attract
customers by using a “loss leader strategy”. This can be done by giving attractive discounts on its
leader category say “hot coffee”. Thus all hot coffee drinks will be available at say 50% of the prices
listed in the menu. This discount has to be conveyed to customers and visitors through various modes
such as POP display. Café will have to bear losses in sale of hot coffee. But the customers who drop
in to have coffee are likely to buy other products such as sandwiches and burgers. Moreover the
customers who taste the coffee and like it will spread word of mouth and help in creating buzz in the
market. After few days, café can resume the listed prices for the leader category.
ii)An apartment in a premier township essentially goes with “Value based pricing” (based
primarily on customer’s perceived value of the apartment. Value of the apartment is linked directly to
the brand value of the township and the construction company. ) or “premium pricing strategy” (i.e.
the price is kept artificially high in order to encourage favourable perceptions among buyers). Buyers
shall take pride in owning property in such up-market schemes. Obviously the target segment is deep
pocket affluent customer who is going to buy an apartment either for residential purpose or for
investment. Price offer can be made attractive by providing PMAY subsidy ( Pardhan Mantri Awas
Yojana), free club house membership, free car or two wheeler for early bird bookings, free
maintenance for first 2 years, discounted rates for parking place, etc. Company can add freebies to the
original price offer but shall not mark down the price as it may dilute brand value of the premium
township scheme. Company can also tie up with ready financial aids from leading banks and financial
institutions with pre-approved loans. These things will make the offer more attractive keeping intact
the original price offer and brand image of the township.
iii)A rosewood handicraft coffee table is a unique product which carries heritage value. It can be
considered as a monopoly product and hence seller can charge “value based pricing” or “target return
pricing”. Target return pricing can be offered by monopolists. Pricing structure is arranged in such a
way that it provides return of investments is a stipulated time period. For employing this pricing
strategy, “cost plus” pricing method is used to arrive at the rock-bottom price. Then the target return
price is decided. Since the product is a handicraft table, it attracts a niche affluent segment who will
not question the price thinking of the heritage value of the product.
iv)Water treatment plant to be installed in a paper factory is an industrial project and the buyer is a
rational industrial entity. Industrial buyers are not driven by emotions. They take decisions based on
testimonials, samples, trials, demonstrations, working project examples, certifications, experience and
other firms’ reviews and recommendations. Price is basically “tender based” which can be a limited
tender (offers accepted from only the vendors registered with the company. In this case company
sends enquiry letters/ tender notice to the registered contractors and vendors) or open or public tender
(where company publishes tender notice in selected news papers, making it open for all contractors
and vendors). Contractors/ vendors need to provide technical and commercial quotations to the buyer
company in stipulated time period. Usually the buyer company needs “price break up” to understand
the structuring of price and relevance of each element of the project in it. Formal negotiations take
place with shortlisted vendors and finally the contract is “awarded” to the best fit vendor/ contractor
firm. Pricing of such industrial projects is much more complicated and critical compared to the
pricing of consumer goods. Non price offers such as free P&F (packaging and forwarding) or free ex-
factory delivery are used by contractors to make their price bids more attractive.
From above examples it can be concluded that pricing strategy is a dynamic process and it changes
from product to product, market to market and situation to situation.
Module 4: Distribution Channels and Physical Distribution Decisions: Nature, functions, and
types of distribution channels; Distribution channel intermediaries; Channel management
decisions; Retailing and wholesaling
CO4: For a given company the student managers will be able to evaluate different distribution
channel options and their suitability for the company’s product
Q1. Evaluate various distribution channel options for effective distribution of Fevicol in India
Answer:
Fevicol is a leading adhesive brand in India which is sold in consumer market as well as in industrial
market. Hence it is a consumer good as well as industrial/ business good. Thus it has two major
distribution channels: one for consumer range and another for industrial range.
Criteria for selection of channel for consumer channels
i. Product: Fevicol is storable, non-perishable product which doesn’t need any special storage
environment and has no expiry date. Hence it can be delivered through longer channels.
ii. Market coverage: Since the product is market leader and has huge and regular demand in the
market, it needs a longer channel including super stockists, stockists, distributors who can
cover large number of outlets and cover wide area.
iii. Middleman: Middleman in the distribution channel does not need any product knowledge
since it is a fast moving consumer good with no special instructions required for its use or
storage. Hence no special middleman is needed. Middleman needs to have good financial
strength and storage / transportation facilities.
iv. Competition: Fevicol has no strong competition and being market leader, doesn’t need to
follow strategies of distribution used by other products.
v. Company: If the company has good financial strength and presence in the market, it can
afford to have longer channel of distribution.
From all the criteria discussed above, it can be concluded that Fevicol can have longer channel of
distribution. Hence following channels is suggested for consumer goods:
Producer >>> C&F Agents >> Stockists >> Wholesalers >> Retailers( stationary an general stores)
>> consumers
However consumers also buy Fevicol from hardware shops
Producer >>> C&F Agents >> Stockists >> Distributors >> Hardware shops >> consumers
For Industrial channel following criteria are considered:
i. Nature of customers: Customers are mainly construction companies, contractors,

carpenters, interior decorators and manufacturing companies. These companies will have
requirement of Fevicol in bulk.
ii. Type of industrial product: Fevicol is “industrial consumable” and it is a low value, fast
moving industrial product. Such products can better get distributed through hardware shops
and dealer shops near industrial area.
iii. Nature of demand: Product has a regular demand in the market due to its application. It has
regular and uniform demand throughout the year.
iv. Market coverage: Product needs wide market coverage as industrial purchasers are large in
number and widely scattered. Thus it requires a longer channel of distribution
From above discussion, we can conclude that small industrial channels needs retailer (dealer shops
and hardware shops):
Producer >>> C&F Agents >> Stockists >> Hardware shops and dealers >> Small Industrial buyers,
Contractors, builders, etc.
Producer >>> C&F Agents >> Stockists >> Large industrial buyers
Or
Producers >>> C&F Agents >> Large Industrial buyers
And Producers >> Large Industrial Buyers .
More the volume of product purchased, smaller the channel used.
Q2. Noise is a new entrant in headphones market, with its manufacturing unit in Noida. These
are low priced headphones. Since it is a startup company, evaluate and suggest a suitable
distribution channel for the company.
Noise is a new entrant in headphones market. Its manufacturing unit is in Noida. These are low priced
headphones. It is a startup company. Headphones come under category of consumer good. These are
called specialty goods which are usually sold via intensive distribution strategy in specialty shops
such as mobile accessories shop, mobile shops, music shops and outlets in malls and hypermarkets.
Let us discuss the criteria for selection of distribution channels.
i. Product: Noise is a headphone which is a specialty consumer good. It is low value product
sold through selective shops. Product is not perishable and does not require any special
handling or storing instructions. Thus it can be sold through longer channels.
ii. Market coverage: Since the product is new and manufactured by a start up company, it must
be presumed to have limited finances and limited production. In such case company may not
need very extensive market coverage. Since the product is manufactured in Noida, it already
has a great market potential in Delhi NCR region and states nearby (Uttar Pradesh, Punjab
and Haryana). This it can have shorted channel i.e. stockiest may not be needed.
iii. Middleman: Middleman is required in this case only if he can put his financial strength and
transportation facilities. Even good distributors in Delhi, Chnadigarh and Kanpur can take
care of effective distribution.
iv. Competition: Noise has large competition in the market from premium brands as well as
local unbranded Delhi-made headphones. Major competition in the initial phase would be
with local products only. Company should study the distribution channels adopted by these
local brands to reach same outlets.
v. Company: Company is presumed to have less financial strength, limited production capacity
and virtually no presence in the market since it is a start up. In such situation, best way is to
use shorter channel of distribution.
From all the criteria discussed above, it can be concluded that Noise should have shorter channel of
distribution. Hence following channel is suggested for consumer goods:
Producer >>> Distributors located in few cities including Delhi >> Retailers (Specialty shops)>>
consumers
At the same time company should also consider online sales possibilities as majority of consumers
now-a-days buy headphones and similar products online.
Producer >> e-portals >> consumers
Once the company becomes successful in establishing its brand and enhances its production capacity,
it can add stockists to increase the market coverage and penetrate deep in the market more effectively.
Q3. Evaluate different distribution channel options and their suitability for T-shirts offered by a
well known Garment firm.
Answer:
Product under discussion is T-shirt offered by a well known garments firm.
Factors to Consider Before Choosing a Distribution Channel
Before you choose a distribution channel for your products, there are a variety of factors to consider.
1. Type of product: If your product is perishable or is unstable, you will need it to arrive
quickly and in controlled conditions. You may need to use a direct distribution method.
However T-shirts are not perishable items and are storable as well as easy to handle. Hence
they can take longer distribution channel. But T-shirts are also fashion goods and fashions
change very often in a short span of time. For example is company is producing Polo T-shirts
and that fashion changes in few months then the stored T-shirts would be difficult to sell and
company will eventually have to sell those in clearance sale at mark down rates. Thus
distribution channel for T-shirts should be shorter.
2. Market: Are you selling products to consumers or other businesses? Are they more likely to
purchase from brick and mortar retailers, websites like Amazon, or sellers on social media?
Can you ship directly, or do you need to work with retailers? Knowing who your
ideal consumers are will help you identify the most efficient way to get products to them.
In case of T-shirts, all possibilities are workable. T-shirts can be sold online through popular
sites like bewakoof.com, Myntra, Jabong or Amazon. T-shirts are also traditionally sold in
brick and mortar retail shops such as departmental stores and hypermarkets. Thus company
should think of multi-channel distribution.
3. Middlemen: Depending on your needs and the demands on your time, a middleman can help
distribute products quickly and efficiently. Whether or not a middleman makes sense will
depend on your budget, market, and existing business relationships.
If company is selling T-shirts in new markets, they should engage distributors who have good
control over their region and cover a good number of retailers. In case of online selling,
company should get listed with reputed ecommerce companies only.
4. Consider your competitors. What methods are your competitors using? Why? Does it
provide a qualitative advantage over other channels, or is it simply the way the industry has
always operated? If there is a distribution channel that your competitors have overlooked, you
could gain an advantage by using it. For example, if your competitors are mainly distributing
products via big-box retailers, taking advantage of direct sales through the internet can give
you a unique angle. Alternately you can have At Par strategy and use similar big box retailers
for your merchandise.
5. Examine costs and benefits: After deciding on a method of distribution, creating the support
systems that go with it is time-consuming and expensive. Once your company is oriented
around a specific distribution channel, it's difficult to reverse your decision. Carefully weigh
the costs and benefits associated with each option before committing resources to it.
Since T-shirts are consumer durable shopping goods, they are offered in price sensitive
markets with elastic demands. In such markets, margins of middlemen play vital role and low
margin options can help if the brand is already established.
6. Rank your options: After examining the different methods available to you, rank them by
order of preference according to what will net you the highest revenue at the end of the year,
minus associated costs. Choose the option that allows you to reach the most customers while
remaining within your budget.
Since we are talking here about multi-channel distribution, we need to decide which would be
our primary channel: traditional physical channel or online channel. It depends on costs
involved and volumes the channels can handle at a time.
7. Have a plan for growth: You may find that pursuing one distribution channel doesn’t
preclude you from adding additional channels as you acquire more capital, or that as your
business expands you need additional methods of connecting customers with products. Keep
up with your market and competitors so that you can continue to make informed decisions
about distribution as your market grows.
Later on the garments company can also think of having their own virtual store-front from
where customers can directly buy T-shirts. It would be possible only when company has
worked well on its logistics support at back end.
Suggested channels would be:
Producer >> Distributors >> Retailers >> consumers

Producer >> Wholesalers >> distributors >> Retailers >> consumers
Producers >> ecommerce portals >> consumers

The most important thing you can do when choosing a distribution channel is to carefully consider
your options and not select a direction simply because it’s the industry standard or most convenient
avenue for your business. If you question the reason behind your decision at the onset, you may
discover overlooked advantages, hidden drawbacks, or new ways of reaching customers in a budget-
friendly and innovative manner.
Q4. Evaluate and develop a distribution channel strategy for APTECH Limited an IT
Education and training company which uses a franchise model throughout India.
Answer:
Aptech limited provides a service and not a product. They provide Education service. Delivery of
service is critical and difficult compared to products because services are perishable, non-storable and
cannot be separated from the service providers. In such case all service delivery throughout the nation
has to be uniform and should follow same procedures.
There are certain steps in developing suitable distribution channel strategy for services to be delivered
through channel partners who are franchisee in this case.
a. Defining customer service levels: Aptech has to ensure that students all over India should get
same level of attention, education and takeaways to maintain uniformity of customer service
delivery.
b. Distribution objectives and steps: Aptech has to share its vision, mission and objectives with
their channel partners. They also need to ensure that objectives of franchisee align with
objectives of franchiser.
c. Structure of network required: Company’s job is not over by just sharing objectives and
teaching material. Simultaneously they need to appoint franchisee managers who will
regularly visit various education centres and ensure quality standards of delivery of
educational services. They need to take feedback from students to find out if there are any
lacunas. They can also appoint master franchisee in every state/ region to supervise franchisee
network in that region.
d. Policy and procedure to be followed: All franchisee should follow the business format
franchisee model and strictly adhere to the policies, regulations, protocols and procedures in
imparting education to the students.
e. Key performance indicators: Company has to set certain Key Performance Indicators such as
feedback and ratings of students, placement records of each centre and employee satisfaction
index. This will ensure that all franchisee work according to company’s norms and perform at
a satisfactory level.
f. Critical success factors: Company should identify its Critical success factors. In case of
Aptech Limited, most important CSF is “employment driven education”. It means that all
channel partners must have placement assistance at regional level apart from central
assistance.
Service distribution channel for Aptech Limited
Parent company >> Master franchisee >> local franchisee
Franchisee managers
Q5. A Mobile company is launching its new android phone in India. The launch is scheduled in
the month of September 2020. This is a high end latest technology model. Evaluate the
distribution channels the company should chose and steps involved in setting distribution
channel.
Answer:
Mobile phone which is going to be launched in September 2020 is a high end, high technology
product. Thus it should be launched as a premium brand. Moreover there must be lot of R&D costs
involved in development of the product. Company needs to recover those costs in the initial phase.
There is a segment of gizmofreaks (people who are passionate about new gazzets) who are also
having deep pockets. Considering this, company would be launching “market skimming strategy”.
Under this strategy, you will purposefully not display your product in all shops and outlets. Only
premium shops or company’s own shops should be selected. Thus the distribution strategy will be
“selective distribution strategy”.
i. Product: Mobile phone is high end, high value product. In needs to travel through shorter
channel for two reasons. I) more channel intermediaries will add more margins leading to
increase in price or reduction in profit level. II) Mobile phones have very short product life
cycle. New technologies come up very quickly and disrupt the old ones. Company needs to
sell its maximum chunk before technological changes take place.
ii. Market coverage: Company needs wide market coverage (georagraphically) but has to target
a niche segment through selective shops only. Hence it has to use shorter channel but
intermediaries need to be selected wisely.
iii. Middleman: Middleman plays very important role. He himself should posses some brand
image. He should be able to promote as well provide after sales support to the product.
Customer service plays very important role here.
iv. Competition: There is a tough competition in this market. Company needs to study how its
competitors are distributing. After this study company can decide either to follow similar
channel or differentiate to use some innovative method of distribution.
v. Company: Company is presumed to have good financial strength, excellent production
capacity and strong presence in the market. Thus company is in dominant position while
bargaining with dealers and setting up terms. Company can have multi channel touch points
as most of the customers would prefer to buy the mobile online.
Suggested channels:
Producer >> Exclusive Distributors >> Specialty stores (retailers) >> consumers
Producer >> Company’s own outlets >> Consumers
Producer >> Consumers (through company’s own payment portal)

Producer >> selective e-commerce sites >> consumers
Steps in setting up the channel:
a. Defining customer service levels: It is not just a conventional retail selling. It

involves promotion, display, financial support, after sales service and excellent
customer service. Channel partner at the customer end needs to create good ambience
in his store and provide premium service to customers.
b. Distribution objectives and steps: Company has to share its vision, mission and
objectives with its channel partners. They also need to ensure that objectives of
partners align with objectives of franchiser.
c. Structure of network required: Company’s job is not over by just sharing objectives
and merchandise. They need to ensure quality standards of service delivery of to the
customers. They need to take feedback from students to find out if there are any
lacunas. They may also need to impart training to the channel partners in customer
service and product technicalities.
d. Policy and procedure to be followed: All specialty stores should strictly adhere to the
policies, regulations, protocols and procedures in imparting customer service to the
customers. Margins and schemes over sale of product and accessories should be
clearly defined.
e. Key performance indicators: Company has to set certain Key Performance Indicators
such as feedback and ratings of customers, customer satisfaction index and targeted
vs actual sale. This will ensure that all channel partners work according to company’s
norms and perform at a satisfactory level.
f. Critical success factors: Company should identify its Critical success factors. Most
important would be satisfaction of customers. What counts more is the overall
experience of buying where customers should feel that they are buying a premium
product.
Module 5: Promotion Decisions: Communication Process; Promotion mix – advertising,

personal selling, sales promotion, publicity and public relations; Determining advertising
budget; Copy designing and testing; Media selection; Advertising effectiveness; Sales promotion
–tools and techniques.
CO5: For a given promotional objective of a company the student manager should be able to
develop a suitable promotion mix (advertising, sales promotion, public relations, personal
selling, and direct marketing etc.) for the product.
Q1. Develop a suitable promotion mix for a new winter lotion “Ayurcold” having Ayurvedic
ingredients. Manufacturer is a midsized Indian FMCG organization.
Answer:
Product is a fast moving consumer good (FMCG), with Ayurvedic ingredients in it which differentiate
this winter lotion from other ones. Company is midsized. Since the product is a consumer good,
personal selling can’t be an effective way of promotion. Primary tool for promotion will be
advertising supported by other tools like sales promotion and public relations. Following
promotion mix can be adopted for effective promotion of this new winter lotion.
Advertising: A midsized company may afford television advertisement on selective channels and
may not appear on prime time in prominent channels due to higher costs. However television
advertisement helps in creating brand position at a faster pace. Hence it is important.
Company should select some economic but important TV channels. Apart from TV, other media of
advertisement which can be effectively utilised are radio and hoardings. News paper wouldn’t be
much effective. However some popular magazines for target segments (women) which are mostly
read by women can be considered. Internet advertisements would not be much effective. But company
should create social media pages/ handle / hash tags which can help creating more awareness for the
product.
Company can also advertise with You-tube as it has high viewership. For advertisements there has to
be a clear positioning statement which highlights the ayurvedic nature of the product. However there
is a tool such as FAB (features- advantages-benefits) which helps is creating a clear message.
Ayurvedic ingredients are the features which provides advantages like purity of product and chemical
free constituents. Benefits for the customer can be skin friendliness, nourishment and skin protection.
Based on this a clear message should be developed which can associated with the brand name.
Sales promotion: Since the company is FMCG, it already has a shelf space in retail outlets. It can
distribute free samples of Ayurcold along with other cosmetic and personal care products. This will
speed up the diffusion process for the product. Other consumer promotion tools which can be used are
sale of small sachets at lower costs and money refund offers which state that money will refunded if
any customer develops skin problem. Umbrella campaigns and kiosks near supermarkets will also be
helpful.
Dealer promotion tools which can be used are POP displays, merchandise allowance, offers and
schemes on volume sales, etc.
Publicity: Appointing a brand ambassador, viral marketing, what’s-app messages, product placement
in movies and co-branding with other leading cosmetic products of the company can help in
publicizing the product.
Public relations: Arranging press conferences and press release announcing the launch of product.
Writing stories around growing awareness of consumers towards Ayurvedic products.
Social Media Marketing: Company can have featured advertisements in social media sites as the
viewership for social media is very high. Moreover it helps in giving direct feedback to the producer
without much time lag.
Though personal selling is not directly needed for promotions to end users, company has to use their
channel sales team to promote the product for retail shelf displays along with other products. Same
team can take feedback from the retailers to access the response of the market to this new product.
Advertisement Broadcasting Media Economic TV channels & Shows ,

reminder ads of small duration
Print Media Magazines read by target segment
Internet Featured ads , ads on sites like you-tube
Display media Hoardings , POP displays
Personal Selling Inside sales at retail storesReinforce Advantages and benefits
Sales Promotion Consumer sales Promotion Free Samples, Money refund offers,
trial packs
Dealer Sales Promotion Merchandise allowance, offers /
schemes on volume sales
Publicity Appoint brand ambassadors, Viral
marketing , What’s app messages,
product placement in movies, co-
branding with other products
Public relations News release, press Press conference for product launching
conferences , advertorials, news release, etc
Social Media Marketing Featured / paid presence in social media
sites. Social groups on sites, use of hash
tags , etc.
Thus it can be concluded that in promotion mix of Ayurcold, major component is advertising and it is
supported by other components such as sales promotion, publicity and public relations.
Q2. Develop a promotion mix for promoting a new comfortable sports shoe launched by NIKE.
Answer. Promotional mix has the following components.
1. Advertising
2. Personal selling
3. Public relations
4. Sales promotions
5. Direct marketing
Nike’s promotion mix.
1. Advertising. In advertising campaigns, Nike can reach large target audiences. The brand can
invites celebrities who represent the image of an ideal consumer. Potential customers
associate themselves with famous celebrities, and this motivates them to trust the brand and
communicate with it.
Most prominent advertising media would be television. Company should select sports
channels and other high TRP entertainment channels and target prime times for
advertisements. Advertisements should be mix of emotional and functional message.
2. Personal selling. Nike’s selling takes place in the stores. Trained store personnel assist
consumers, provide details on the company’s products and stimulate visitors to buy their
products. Besides, Nike’s employees help customers find the right Nike product and promote
the company through the use of personalized services. Most of the selling activity comes
under channel sales and retail sales.
3. Sales promotion. Nike can include special discounts for a targeted audience. This will
motivate the customers with the savings they can have when they buy discounted products.
Apart from this, company can sponsor some popular sports events. For retailers / dealers they
have attractive schemes such as merchandise allowance, chain discounts and salesman’s
contests.
4. Public relations. Nike can project itself as a responsible company, which is considerate about
the society. Nike can sponsor sports events that build a better brand image in the eyes of their
audience. They can create their social presence through CSR activities. As an example, they
can mention in their advertisement that 2% of “every pair of shoes you buy will go to
uplifting of socially deprived or tribal people”
5. Direct marketing. Nike can use direct marketing to promote its products among sports
organizations in universities, colleges, schools. Direct mails can be sent using customer
database, informing them about new launches.
6. Publicity. Use of brand ambassador and creating new around the product can lead to publicity
of the product. Company can identify opinion leaders and provide them recognition. Use of
social media handles can help in publicizing the new product.
7. Social Media Marketing: Company can have featured advertisements/ presence in social
media sites as the viewership for social media is very high. Moreover it helps in giving direct
feedback to the producer without much time lag. Develop loyal customers’ groups on sites
like Face-book, use of hash tags and RSS feeds.
Q3. Explain Promotion Mix and Develop a suitable promotion mix for the McDonald’s.
Answer:
The promotion mix refers to how marketers combine a range of marketing communication methods to
execute their marketing activities. Different methods of marketing communication have distinct
advantages and complexities, and it requires skill and experience to deploy them effectively. Not
surprisingly, marketing communication methods evolve over time as new communication tools and
capabilities become available to marketers and the people they target.
Promotional Mix for McDonalds is described below:
• Advertising: Any paid form of presenting ideas, goods, or services by an identified sponsor.
Historically, advertising messages have been tailored to a group and employ mass media such
as radio, television, newspaper, and magazines. Advertising may also target individuals
according to their profile characteristics or behavior; examples are the weekly ads mailed by
supermarkets to local residents or online banner ads targeted to individuals based on the sites
they visit or their Internet search terms.
McDonalds can use broadcasting media (TV and radio) for conveying its new promotional
events and new launches. Attractive hoardings and POP displays at the selling point are also
effective.
• Public relations (PR): The purpose of public relations is to create goodwill between an
organization (or the things it promotes) and the “public” or target segments it is trying to
reach. This happens through unpaid or earned promotional opportunities: articles, press and
media coverage, winning awards, giving presentations at conferences and events, and
otherwise getting favorable attention through vehicles not paid for by the sponsor. Although
organizations earn rather than pay for the PR attention they receive, they may spend
significant resources on the activities, events, and people who generate this attention.
Company should announce its new outlet openings by conducting press conferences and
through news inserts. It should also contribute to social cause to earn goodwill.
• Personal selling: Personal selling uses people to develop relationships with target audiences
for the purpose of selling products and services. Personal selling puts an emphasis on face-to-
face interaction, understanding the customer’s needs, and demonstrating how the product or
service provides value.
Excellent communication skills and customer service needs to be provided at all outlets. For
this company needs to provide formal training to the store staff. Uniformity in handling
customers at all outlets is necessary.
• Sales promotion: Sales promotions are marketing activities that aim to temporarily boost
sales of a product or service by adding to the basic value offered, such as “buy one get one
free”(BOGOF) offers to consumers.
Consumer sales promotion: various combo meals, attractive price off offers and price
bundling offers can boos the sales. Company can provide various festive offers such as Diwali
and Ganesh Festival offers.
Dealer sales promotion schemes such as dealer’s contests and best seller awards for
franchisee outlets, volume discounts and other schemes should be provided to motivate the
outlets.
• Direct marketing: This method aims to sell products or services directly to consumers rather
than going through retailer. Catalogs, telemarketing, mailed brochures, or promotional
materials and television home shopping channels are all common traditional direct marketing
tools. Email and mobile marketing are two next-generation direct marketing channels.
With the help of CRM tools, company can connect with its customers and offer them good
discount offers on their birthdays and anniversaries. Company can also inform them about
new additions and upcoming promo events at the outlets.
• Digital marketing: Digital marketing covers a lot of ground, from Web sites to search-
engine, content, and social media marketing. Digital marketing tools and techniques evolve
rapidly with technological advances, but this umbrella term covers all of the ways in which
digital technologies are used to market and sell organizations, products, services, ideas, and
experiences.
• Publicity: Job of publicity is to create public visibility and awareness for the product in a
favourable manner. It refers to movement of information from producer to end user though
unconventional channels such as social media, opinion leaders, word of mouth or gossip
magazines. Use of popular brand ambassadors and creating stories around the product creates
a buzz in the market.
Q4. Procter & Gamble is coming up with new product Herbal Hair Oil. As a marketing head
you are given the task to study and suggest the suitable sales promotion tools & techniques for
Herbal Hair Oil.
Answer:
Herbal hair oil is not a new concept in Indian market. But selling it to mass market instead of a niche
segment of “herbal lovers” is a challenging task. To offer it to the mass market, it should have a
strong appeal which encompasses entire market. Thus the promotion mix has to be designed very
carefully.
Advertising: Major advertising media would be broadcasting: Leading television channels and prime
times, leading radio channels, Cinema Advertisements. Other media: News and print media
(newspapers and select magazines), Display media: Hoardings and billboards, vehicle display ads,
Internet media is not very effective hence not needed.
Presence through all media of advertisement is required to increase visibility of the product. In
advertising message more emphasis has to be given to the “herbal” element connecting it with words
like “nourishment”, “nutrition for hair”, “hair damage repair”, etc.
Personal selling: It is not needed at consumer level as product comes under FMCG category. It is sold
through retail outlets and supermarkets, where personal selling is not needed. Selling only needed at
wholesaler/ distributer level which is basically more of channel management than selling.
Sales promotion:
Consumer sales promotion tools: 1. Free Samples with other established products like shampoo /
soaps and skin creams of Procter & Gamble 2. Price-Off Offer 3. Price bundling and BOGOF 4..
Scratch and Win Offer 5. Money Back Offer, etc.
Dealer sales promotion: Buyer allowance, merchandise allowance, coupons, POP displays and stands,
volume discount schemes.
Public relations: Any controversies or allegations, defamation cases can be effectively handles using
public relations. Use of Herbal ingredients should be highlighted in media and press release. People
consider news as more authentic source of information compared to advertisements.
Publicity: Job of publicity is to create public visibility and awareness for the product in a favourable
manner. It refers to movement of information from producer to end user though unconventional
channels such as social media, opinion leaders and word of mouth. Instead of using popular brand
ambassadors company can show common housewife or a middle class working person to create a
connect of the product with popular masses.
Advertisement Broadcasting Media Leading television channels and prime

times, leading radio channels, Cinema
Advertisements
Print Media Newspapers and select magazines
Display media Hoardings and billboards, vehicle
display ads
Personal Selling Inside sales at retail stores Reinforce Advantages and benefits
Sales Promotion Consumer sales Promotion 1. Free Samples with other established
products like shampoo / soaps and skin
creams of Procter & Gamble 2. Price-
Off Offer 3. Price bundling and
BOGOF 4.. Scratch and Win Offer 5.
Money Back Offer
Dealer Sales Promotion Buyer allowance, merchandise
allowance, coupons, POP displays and
stands, volume discount schemes.
Publicity Unconventional channels such as social
media, opinion leaders and word of
mouth. Instead of using popular brand
ambassadors company can show
common housewife or a middle class
working person to create connect of the
product with popular masses.
Public relations News release, press Press conference for product launching
conferences , advertorials, news release, etc Use of
Herbal ingredients should be
highlighted in media and press release
Social Media Marketing Featured / paid presence in social media
sites. Social groups on sites, use of hash
tags , etc.
Q5. Develop promotional mix for “online learning software app” launched by BYJUs.
Answer:
BYJUs is a leading company in the field of online training and education. It provides online learning
modules for school going students. Product is costly and people in high income groups can afford the
product. Users of the app are school going students but major influencers are friends, families and
other parents. Buyers are parents. Since the set of buyers is diverse and product is costly, it creates
challenges in promoting the product. This product though falls under consumer goods category; it also
requires very high skills and efforts of personal selling unlike other consumer goods.
Advertising:
Company has to create its strong presence in the market through television advertising. It should have
presence in those channels and serials/ programs which are viewed by family together. It should also
have its presence in kids’ channels. Radio-ads can be done on Vividh Bharti channel instead of private
FM channels are Vividh Bharti is mostly for adult listeners than teenagers. BYJUs can also display
advertisements on hoardings and billboards. Internet advertisements are most effective because the
target audience (users, influencers and buyers) are all available online on digital platform. Use of “pay
per click” ads and “featured ads” are effective. Using advertisements in Youtube videos, Facebook
and other such social media sites would be effective.
Advertisement is very helpful in making the brand familiar among parents and kids well before the
sale people approach them. This makes the job of a salesman easy when approaches the prospects.
Personal selling:
Personal selling plays a vital and pivotal role in promotions of BYJUs. This is because the product
needs “creative salesmanship” and need has to be created though presentation and discussions.
Salesmen need to well trained, well groomed and should be able to handle customer objections very
well. It is really difficult to sale the product without intervention of a salesperson. Company pays very
high incentives on sales in order to motivate the sales staff.
Sales Promotion:
Consumer sales promotion: Sponsoring big events is one way to increase the visibility of the brand.
Since company has good financial strength is possible to go for sponsorships. Product-placements
through movies is a new emerging concept which can be used. Some effective tools of promotion can
be “early bird offer”, “limited period offer” , giving additional modules free on purchase, loyalty
discounts ( if a student uses app in 8th standard and continues to buy app in 9th standard , he is entitled
to get loyalty benefit), contests, scholarships for school performers, etc. Company can also offer free
trial modules online so that students get feel of the app.
Since the company uses direct distribution method, it should adopt “sales force promotion”. Providing
performance linked incentives, best salesman awards, rewards, recognitions, invitations to sales
conferences, free vacations and other fringe benefits is also important to motivate the sales staff.
Public relations:
The purpose of public relations is to create goodwill for an organization (or the things it promotes)
among the “public” or target segments it is trying to reach. Press conferences, news release, media
coverage of various award functions, etc. is required. Company should also try to connect with scoail
aspects through some important CSR initiatives.
Publicity:
Appointing popular brand ambassadors such as film stars, sports persons or other celebrities should be
done. Success stories of students who excelled using the app and endorsement by parents should be
publicized through news and social media. Face-book pages and twitter handles should be developed
and updated regularly.
Direct marketing:
Direct marketing can be done through emails, SMS and tele-calling. For this, relevant database is
needed which can be acquired commercially or through various events, exhibitions, etc. Targeted
segments are people in the age group of 35 to 50 who would be having school going children.
Social Media Marketing: Featured and paid presence in social media is must. Spreading the goodwill
through “word of mouth” will be most effective. Make groups for BYJUs’ users and allow visitors to
ask questions to existing customers. Manage customer reviews on sites such as “quora.com” and
“mouthshut.com” where strong objections can be handled effectively and public image can be
improved through constant marketing communications.
It can be concluded that for BYJUS, it is equally important to utilize advertisement as well as personal
selling unlike other consumer products. In fact it needs to use all promotional tools extensive as the
product (app) does not fall in to “necessary” category and requires selling efforts.

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RTMNU MBA-II Semester CBCS (Outcome Based Education Pattern) 2020

Course Name: 2T2- Marketing Management

City Bikes Kid’s Bikes

Place: Use Multi channel distribution strategy to create maximum touch-points.

B. Tie up with e-portals like Amazon and Decathlon.

C. Make online purchase available from company's website.

Advertising: Company’s financial strength is presumed to be good. Considering this, advertisement

Low cost Mid range Premium

Product level: Branded

Advertising: Company’s financial strength is presumed to be good. Considering this, advertisement

Service provider >> agents >> consumers

Service Provider’s website >> consumers

Service Provider >> e-portals >> consumers

Marketing mix for firstcry.com

Sales promotion schemes: various offers. Promo codes, online coupons,

Public relations: Building company’s goodwill through press releases.

Product level: Branded

Place: Use conventional distribution strategy for B2B selling.

Behavioural: Volume buyers, small quantity buyers

Volume buyers big packs at discounted rates, plain and strong

People who prefer dip tea dip tea bags

Answer 2. Segmentation is a twofold process that includes:

• Identifying and classifying people into homogeneous groupings, called segments

Common Market Segmentation Approaches

Type of Approach Segmentation Criteria

Step 3: These potential customers can be analyzed on the following parameters:

Step 4: Research and Validate Market Opportunity.

Strategy Target Market

Mass marketing Same product for everybody everywhere

Differentiated marketing Different products for different segments

High penetration within smaller, specialized segments.

Micromarketing Offer customized solutions to Individual customers

Segment Product / Variant

Market Targeting: Market Targeting refers to an organisation's proactive selection of a suitable

Segmentation Demographic Age, gender, Income class,

Q4. Apply segmentation and targeting approach for an Airlines company.

Identifying the segments

Loyal Frequent travelers

Demographic male and female, low income/ high income

Niche targeting approach

All products >>>>> people looking for sports goods

Differentiated targeting Approach

Economy products >>>> Low income customers & Amateurs

Prime membership >> frequent buyers

The Growth Phase

The Maturity Phase

The Decline Phase

PLC stage Pricing strategy

Introduction Market Penetration Strategy , Psychological pricing

Growth Expansionistic pricing, introduce upper variants with high price,

Maturity Price Bundling , combo pricing

Decline (closure) Mark downs, clearance sales

Decline (revival) Market Penetration Strategy for new variants launched

PLC stage Pricing strategy

Introduction Market Penetration pricing

Growth Competition based pricing ( Discount pricing or At par pricing or

Maturity Add new variants. Use sales promotional schemes such as

Decline (closure) Discount pricing

Decline (revival) Market Penetration pricing for re-launched product

Criteria for selection of channel for consumer channels

However consumers also buy Fevicol from hardware shops

For Industrial channel following criteria are considered:

i. Nature of customers: Customers are mainly construction companies, contractors,