MARKETING MANAGEMENT

QUES-1. IMC – Features & Benefits

The American Marketing Association defines Integrated Marketing Communications - IMC
as “a planning process designed to assure that all brand contacts received by a customer or
prospect for a product, service, or organization are relevant to that person and consistent
over time.”

The company carefully integrates and coordinates its many communication channels to
deliver a clear, consistent, and compelling message about the organization and its brands.
IMC builds a strong brand identity in the marketplace by tying together and reinforcing all
your images and messages.

Features of IMC

 More budget allocation for promotions due to more competition and more cost.
 Escalating price competition is resulting in more price promotions.
 Compels companies to offer more trade allowances
 Money focus from advertising to short-term sales results.
 Companies build databases of customer names; geographic, demographic, and
psychographics profiles; purchase patterns; media preferences, and other relevant
characteristics.
 Relying on direct marketing methods, rather than on mass media.
 More accountability from brand managers.
 Advertising agencies are being made more accountable
 Customers feel that all their brand experiences come from one identity and are happy
with the brand experience.
 Customers trust the brand‘s promises (and pass them on through word of mouth).
 Brand treats different kinds of customers in ways appropriate to them
 Whenever appropriate, the brand recognizes individual customers wherever they
interact or do business.
 There is a service-oriented ideal that encourages aligned commitment across the
organization.
  Future vision is consistent with core truths of the brand
 Company culture support the values expressed in the Brand.
 Quality is understood as that which is good for the customer, employees and
company.
 All business Objectives are coherent with our competence.
 There are no silos across the organization.
 Practices ensure shared learning across the organization.
 Culture encourages people to release their creative potential. Business processes are
actively aligned to the brand value position.
 Quality customer information is available in a timely way.
 Leaders promote what they practice.
 Marketing function organized around customer groups with different needs and
opportunities, not marketing disciplines.
 Customer mgt focuses on the value of customers for lifetime.
 Communication to all touch points uses the same planning and evaluation framework
- company & agencies in partnership.
 Evaluation is a learning discipline across the participants.
 Key evaluation processes are primarily designed to increase knowledge about what
most efficiently creates value for customers.
 Local and international marketing management collaborate effectively.

Benefits of IMC

 Creates competitive advantage, boost sales and profits, saves money, time and stress.
 Wraps communications around customers and helps them move through the various
stages of the buying process.
 This 'Relationship Marketing' cements a bond of loyalty with customers which can
protect them from the inevitable onslaught of competition (competitive advantage).
 Makes messages more consistent and therefore more credible.
 Reduces risk in the mind of the buyer which shortens the search process and helps to
dictate the outcome of brand comparisons.
 Boosts sales by stretching messages across several tools.
 Reduces workload and subsequent stress levels.
 More consistent and therefore more credible messages. This reduces risk in the mind
of the buyer shortening search process.
 Un-integrated communications that send disjointed messages which dilute, confuse
and frustrate customers are stopped.
 Customer databases can identify precisely which customers need what information,
when… and throughout their whole buying life.
 Saves money as it eliminates duplication in areas such as graphics and photography
since they can be shared and used in advertising, exhibitions and sales literature.
 Using a single agency for all communications – money and time are saved (single
meeting for briefings, creative sessions, tactical or strategic planning).
QUES-2. Characteristics of Designing and Managing Services
Many workers in the manufacturing sector, such as computer operators, accountants, and
legal staff, are really service providers. In fact, they make up a “service factory” providing
services to the “goods factory.”

Also those in the retail sector, such as cashiers, clerks, salespeople, and customer service
representatives, are also providing a service.

A service is any act or performance one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production may or may not
be tied to a physical product.

Manufacturers, distributors, and retailers are providing value-added services, or simply

excellent customer service, to differentiate themselves.

Distinctive Characteristics of Services

1. Intangibility
2. Inseparability
3. Variability
4. Perish ability
5. Customer participation
6. No ownership
7. People as part of the product

1. Intangibility: Unlike tangible goods, services cannot generally be seen, tasted, felt,
heard or smelled before being consumed. The potential customer is often unable to
perceive the service before and sometimes during and after the service delivery.
 Example: For many customers of car repair, the service is totally intangible – they
frequently cannot see what is being done and many are unable to evaluate what has
been done.
 Although services often include tangible elements – such as sitting in an airline seat,
eating a meal or getting damaged equipment repaired – the service performance itself
is basically an intangible.
 The benefits of owning and using a manufactured product come from its physical
characteristics. In services, the benefits come from the nature of the performance.
 Rental services include a physical object like a car or a power tool. But marketing a
car hire performance is very different from attempting to market the sale of the car.
 Lack of Emotion: Physical products can trigger an emotional impulse compelling the
customer to buy. Color, shape, and style are important for physical products—
especially those aimed at the general public.
 No such built-in emotional appeal exists in the intangible world of services. The
consumer might have a hard time even imagining all the details involved in what is
done for them by a service business.
 No product or service can be completely tangible or intangible. For example, a law
firm selling legal services needs business cards, computers, and other tangible objects
to practice law—but the firm’s clients aren’t paying for them

2. Inseparability: There is a marked distinction between physical goods and services

in terms of the sequence of production and consumption:

Physical goods Services

Production Sold

Storage Produced and consumed

at the same time

Sold

Consumed
 Goods are first produced, then stored and finally sold and consumed. Services are first
sold, then produced and consumed simultaneously.
 For example, counseling, hairdressing, rail travel, hotels – for the production the
customer must be physically present.
 Some services may be produced and delivered where the customer’s presence is
optional, e.g. carpet cleaning, plumbing.
 Services may rely more on written communication, e.g. distance learning course, or
on technology as in home banking.
 How teachers, doctors, bankers, lawyers, car mechanics, hairdressers conduct
themselves in the presence of the customer may determine the likelihood of repeat
business.
 Therefore, proper selection and training of customer contact personnel is necessary
to ensure the delivery of quality
3. Variability: An unavoidable consequence of simultaneous production and
consumption is variability in performance of a service.
 The quality of the service may vary depending on who provides it, as well as when
and how it is provided. Eg., A hotel providing fast efficient service and another a slow,
inefficient service.
 Reducing variability involves determining the causes.
 There may be good sound reasons for variations in performance. For example, it
could be due to poor training and supervision, lack of communication, lack of regular
support.
4. Perishability: Services cannot be stored for later sales or use. Example: Hotel rooms not occupied,
airline seats not purchased and college places not filled cannot be reclaimed.
 If demand far exceeds supply, services cannot be met.
 Also, if capacity far exceeds demand, the revenue and or value of that service is lost.
 Fluctuations in demand characterize service organizations and may pose problems
especially where fluctuations are unpredictable.
 Strategies need to be developed for producing better match between supply and
demand.
5. Customer participation: Performing a service involves assembling and delivering
the output of a mix of physical facilities and mental or physical labor.
 Often customers are actively involved in helping to create the service product – either
by serving themselves (withdrawing money from ATM) or by cooperating with
service personnel in settings (such as hairdressers, hotels, colleges or hospitals).
 Service firms have much to gain from trying to educate their customers so as to make
them more competent.
 Services can be categorized according to the extent of contact that the customer has
with the service organization.
6. No Ownership: Key distinction between goods and services lies in the fact that
customers usually derive value from services without obtaining permanent
ownership of any tangible elements.
 In many instances, service marketers offer customers the opportunity to rent the use
of a physical object like a car or hotel room, or for a short period of time, or the labour
and expertise of people – for surgery.
 You can buy a product, take it home, own it for years, and perhaps even resell it. But
you can’t do the same with a service. You can avail it only for a specific period of time
and then it’s over--unless you pay again. The lack of physical ownership makes it
harder to sell services.
7. People as part of the product: In high-contact services, customers not only come
into contact with service personnel, but they may also rub shoulders with other
customers;, Eg., travel by bus or train.
 Type of customers who patronize a particular service business helps to define the
nature of the service experience. Eg., in a soccer match, the behaviour of the fans can
be a big bonus and add to the excitement of the game if they are enthusiastic but well-
behaved. Rowdiness can detract.
 Services are heterogeneous. Service businesses operate through several diverse
elements and interactions. A bank may offer customer service through a helpline or
website and cash withdrawals through ATMs and bank counters.
  In most industries, the service delivery process involves a lot of human interaction.
As human behavior is subjective and unpredictable, no two sets of services can be
identical in their details and results.

Summary

1. Customers do not obtain ownership of services.

2. Service products are intangible performances.
3. There is greater involvement of customers in the production process.
4. Other people may form part of the product.
5. There is greater variability in operational inputs and outputs.
6. Many services are difficult for customers to evaluate.
7. There is typically an absence of inventories.
8. The time factor is relatively more important.
9. Delivery systems may involve both electronic and physical channels.
QUES-3. PRODUCT LIFE CYCLE
 Product life cycle contains distinct stages:
Development, Introduction, Growth, Maturity and Decline.
 Each stage is associated with changes in the product's marketing position.
 You can use various marketing strategies in each stage to try to prolong the life cycle
of your products – increase the profitability, interest and demand for your product or
service.
 The question we need to answer is: what objectives and strategies should be used at
each stage of PLC…?
 PLC runs from the initial idea and development of a product to its withdrawal from
the market and beyond.
 Depending on the type of product or service you launch, the length of a product's life
cycle will vary substantially. E.g., fashion item may have a life cycle of short periods.

Typical stages of PLC:

1. Development - the product/service is designed and physically created

2. Introduction - the product/service is launched and marketed to a small group of
customers.
3. & 4. growth and maturity - the product/service is marketed to a wider audience and
reiterated
4. decline - the product/service either comes to its natural end or is re-developed
• Each of these stages is associated with changes in the product's marketing position.
Different marketing strategies at different stages may help prolong the life cycle of
your products.
• By better understanding these different stages, you can increase the profitability,
interest and demand for your product or service.
• This guide explains the key stages of a product life cycle, and outlines what the
objectives and strategies for each one should be.
 • You need to think about how each of these will affect the various areas of your
profitability, interest and demand for your product or service.
• Key areas to be considered (especially in new product)
a) design – how efficient the product is, how it can be produced and how it
can be easily manufactured
b) materials – how you can use the most cost-effective materials to increase
profit margins, improve the environmental impact of your product, or
reduce financial risk
c) manufacture – how to make the manufacturing process more efficient, or
reduce costs
d) retail – how to optimize costs incurred through packaging or
transportation
e) use – how you can make the product or service last longer in order to
increase customer satisfaction
f) end of life – how materials or ideas from your service or product can be
recycled
1. Development Stage:
• Product development, the first stage of the product life cycle, begins when you
find and start to develop a new idea.
• How to develop a product idea? In business one needs some help to regularly
develop new ideas. You might want to partner with innovators, designers,
university researchers or manufacturers to develop your ideas generation
processes.
• Then you can work as a team to develop the idea.
• At the development stage of the product life cycle, you should ensure that your
idea will meet:
i. potential customer expectations
ii. design, resource and manufacturing requirements
iii. the strategy outlined in your business plan
iv. You should plan for all the potential outcomes and risks and analyze
what is involved in the process.
 • Sale is the least worry at this stage.
• Focus is to closely work with designers, manufacturers or product
development experts on: (Objectives)
i. producing prototypes
ii. testing prototyped product
iii. sourcing and pricing materials
iv. intellectual property issues
v. consult team members on development plans
vi. speak to suppliers and other business associates
vii. communicate with customers about your plans
viii. consider the environmental impacts of your product
ix. Ask potential customers to test the product and give feedback
x. establish the level of quality you are aiming for
xi. how many different versions you think will generate interest
2. Introduction Stage
• The introduction stage of a product's life cycle is when you can build an
awareness of your product or service in certain markets.
• Objectives: During the introduction stage, you should concentrate on building
a base for your product, and focus on the following marketing factors:
a. pricing
b. distribution
c. promotion
d. profitability
a) Price your product or service
 You should initially start pricing at the highest point possible. Consider a
skimming price strategy - charging a relatively high price for a short time
when you launch a new, innovative or much-improved product.
 The aim of skimming is to skim off customers who are willing to pay more to
be one of the first to have a new product. You can lower the prices later when
demand from the early adopters falls.
  A penetration pricing strategy may work best for businesses entering a new
market or building on a relatively small market share. It involves the setting
of lower, rather than higher prices to achieve a large, if not dominant market
share.
 Marketing strategies used in introduction stages include:
o Rapid Skimming - launching the product at a high price and high
promotional level (Syska LED Bulbs)
o Slow Skimming - launching the product at a high price and low
promotional level (Meyer Cookware)
o Rapid Penetration - launching the product at a low price with significant
promotion (most of Maruti car models)
o Slow Penetration - launching the service at low price and minimal
promotion (Vistara Airlines)
b) Distribution
• Your distribution should be selective and limited to a specific type of
consumer until your product is accepted.
• Also, you should consider different distribution models during different
periods of the product life cycle, e.g. new products for different seasons in a
clothes shop.
c) Promotion
• You should try to build brand awareness at an early stage.
• It is worth working with a brand design or ad agency as you develop a
product to establish a strong brand.
• You can use samples or trial incentives to capture early adopters of the
product or service.
• Introductory promotions can also help convince potential resellers to carry
your lines.
d) Profitability
• It is likely that, at the introduction stage, your sales will be low until
customers become aware of your product or your service's benefits.
 • Due to the high cost of advertising and low initial sales, it is possible that
you won't make immediate profits or you may even find that the product
is producing negative profits.
• During the introduction stage, you should aim to:
i. establish a clear brand identity connect with the right partners to promote
your product
ii. set up consumer tests, samples, trials to target markets
iii. price the product or service as high as you believe you can sell it, and to reflect
the quality level you are providing
iv. You could also try to limit the product or service to a specific type of consumer
- being selective can boost demand..
3. Growth Stage
• This should be a period of rapid growth in both sales and profits for your
product or service. Profits should rise through increase in output and
competitive pricing.
• You should also consider:
 maintaining product quality and adding features or services
 maintaining pricing to increase demand for the product
 increasing distribution channels to cope with demand aiming
 promotion at a wider audience
• If profits are still low, consider reducing the price for better volume of
sales.
• Marketing strategies used in the growth stage aim to increase profits. Some
common strategies are:
o improving product quality
o adding new product features or support services to grow your market share
o enter new markets segments
o keep pricing as high as is reasonable to keep demand and profits high
o increase distribution channels to cope with growing demand
o shifting marketing messages from product awareness to product preference
o Skimming product prices if your profits are too low.
 • Here there is rapid rise in sales, profits and market share. Strategies should seek
to maximize these opportunities.
4. Maturity Stage strategies
• When your sales peak, your product will enter the maturity stage. This often
means that your market will be saturated and you may find that you need to
change your marketing tactics to prolong the life cycle of your product. Common
strategies that can help during this stage fall under one of two categories:
a) market modification – this includes entering new market segments,
redefining target markets, winning over competitor’s customers,
converting non-users
b) product modification – for example, adjusting or improving your
product’s features, quality, pricing and differentiating it from other
products in the marking
• Examples
• Cable Connection – If you have recently moved to a different city and rented a
place, chances are that you would not have signed up for cable connection.
Netflix, Amazon Prime, etc. would more than meet your needs.
• Fuel guzzling cars that run on diesel/petrol/gasoline – These have reached
maturity in most developed markets. (Though, they are still the go-to-option in
other markets).
• Kitchen appliances that are not internet enabled – These are the first choice for
newly middle income families in under-developed and developing markets.
• PCs – These are at the edge of the decline stage, except in cases like financial
companies, researchers, gaming communities, etc., (otherwise these are on their
way out).
5. Decline Stage
• The sales of most products will decline at some stage.
• This can be due to factors such as technological advances, trends, innovation or
changing consumer tastes.
• You will know when your product reaches the decline stage of its life cycle
because you will notice a significant downturn in the revenue it generates.
• Product decline strategies - consider:
i. maintaining the product in the hope that your other competitors will
withdraw before you resulting in increase in demand again
ii. reducing your costs and finding another use for the product - entering
into another niche area could increase profits
iii. reducing marketing support, 'harvesting' the product, coasting along
until profits dry up and then discontinuing the product
iv. discontinuing the product when your profit disappears, or when you
unveil a successor product
• Extending the lifespan of your product
i. Some of these methods can form an 'extension strategy' that prolongs
the life of your current product or service.
ii. Such a strategy can temporarily delay the decline and give you enough
time to improve or amend your existing product or develop a new one.
• With the declining sales and profits (caused by changes in consumer
preferences, technological advances and alternatives on the market), you have
to decide what strategies to take. If you want to save money, you can:
i. reduce your promotional expenditure on the products
ii. reduce the number of distribution outlets that sell them
iii. implement price cuts to get the customers to buy the product
iv. find another use for the product
v. maintain the product and wait for competitors to withdraw from the
market first
vi. harvest the product or service before discontinuing it
• Another option is for your business to discontinue the product from your
offering. You may choose to:
i. sell the brand to another business
ii. significantly reduce the price to get rid of all the inventory
iii. Many businesses find that the best strategy is to modify their product
in the maturity stage to avoid entering the decline stage.
QUES-4. Competition – SWOT, Michael Porter’s 5 Forces,
BCG Matrix

Porter’s Five Forces: Porter’s Five Forces is a framework that examines the
competitive market forces in an industry or segment. It helps you evaluate an industry or
market according to five elements: new entrants, buyers, suppliers, substitutes, and
competitive rivalry.

 According to Michael Porter’s model, these are the key forces that directly affect how
much competition a business faces in an industry.
 Looking at the five forces can provide insights into how attractive it is to enter a new
market, which will help if you are considering to expand your product offering to reach
new customers.
 Or, it can also provide insights to shape your strategy. Eg., if the threat of substitutes is
high, you may seek to mitigate (tone down) that competitive force with a strategy
focused on building brand affinity among your customers.

Porter’s 5 forces model: Competitive environment within an industry depends on:

1. Threat of new potential entrants,

2. Threat of substitute product/services,
3. Bargaining power of suppliers,
4. Bargaining power of buyers,
5. Rivalry among current competitors.

These five forces should be used as a conceptual background for identifying an organization’s
competitive SWOT for the environment.

Developed in 1979 by Michael E Porter of Harvard Business School. It’s a simple framework
for assessing and evaluating the competitive strength and position of a business
organization. This theory is based on the concept that there are five forces that determine
the competitive intensity and attractiveness of a market. Porter’s five forces is useful in
understanding the strength of an organization's current competitive position, and the
strength of a position that an organization may look to move into.
1. Supplier power: An assessment of how easy it is for suppliers to drive up prices. This is
driven by:
- number of suppliers of each essential input
- uniqueness of their product or service
- relative size and strength of the supplier
- Cost of switching from one supplier to another.

Bargaining Power of Suppliers (example)

• Porter points out that when there are only a few sources of supply but many buyers,
suppliers will dominate a greater share of profits.
• China’s strategy for solar panel cells is an example of a business strategy based on the
expectation of driving prices down far enough that suppliers in countries with higher
labor costs can’t compete.
• Eventually this leaves China’s solar industries as predominating major supplier, whereby
China will be able to control profits.

2. Buyer power: An assessment of how easy it is for buyers to drive prices down. This is
driven by,
- number of buyers in the market
- importance of each individual buyer to the organization
- Cost to the buyer of switching from one supplier to another.

Bargaining Power of Buyer (example)

• Situations where there are only a few buyers and many suppliers, buyers will dominate
and will control supplier’s profits. Apple has more than 200 Chinese component
suppliers for its iPhone. Competition among these suppliers for this single buyer compels
supplier to low-low prices – even to the point where workers have been forced to work
long hours without breaks in difficult condition.
• Apple’s largest Asian supplier, FoxConn (Hon Hai Precision Industry), has been caught
using student interns and forcing them to work overtime without overtime pay in an
 effort to maintain market share. Apple has been criticized for the situation for the
working conditions for workers there.
• When the supplier/buyer imbalance shifts in favor of the buyer to such an extreme, the
resulting competition will drive prices down to a point where suppliers may believe that
their survival depends on lowering prices below the point at which keeping the
workplace equitable and humane for its workers is possible.

3. Competitive rivalry: The main driver is the number and capability of competitors in the
market. Many competitors, offering undifferentiated products and services, will reduce
market attractiveness.

Competitive Rivalry (examples)

• Competition can come from anywhere, from innovative new products, from the
emergence of powerful new suppliers or buyers who control the marketplace, or from
product substitutions made possible by deregulation, innovation or more cost efficient
industrial processes, relying on innovative technology, a lower-cost labour force, or both.
• The battle between Star Sports and Jio Cinema to attract the most eyeballs for IPL
intensified this week with both releasing a series of promotional ads.
• The TV media rights owner Star Sports wants everyone to watch IPL on TV with friends
and family while streamer Jio Cinema is inviting viewers to watch on any screen with a
bunch of viewing innovations ("Ab digital India dekhega digital #TATAIPL, bilkul FREE“)

4. Threat of substitution: Where close substitute products exist in a market, it

increases the likelihood of customers switching to alternatives in response to price
increases. This reduces both the power of suppliers and the attractiveness of the
market.

Threat of Substitutes (examples)

• Another competitive threat comes from the availability of substitutes for a company’s
existing product.
• Pharmaceutical industry’s attempts to devise strategies that hold off the entrance into
the marketplace of generic drugs are an instance of a strategy opposing this threat. (Even
Indian drugs who holds the acceptance of FDA, USA with a pinch of salt)
• Sometimes, however, the substitute can come from an unpredictable place.
• The volume of Speed Post and other mails at the Post Offices have declined since the
introduction of email. Suppliers of components for gasoline and diesel-powered
automobile engines may soon find that the coming proliferation of electric cars over the
next decade or so threatens their industries with substitution of components for electric
vehicles.
5. Threat of new entry: Profitable markets attract new entrants, which erodes
profitability. Unless incumbents have strong and durable barriers to entry – patents,
economies of scale, capital requirements or govt policies – profitability will decline to
competitive rate. Arguably, regulation, taxation and trade policies make government a
sixth force for many industries.

Threat of Entry (example)

• Strategic decision to enter can be for any number of reasons: because the area is under-
served, because profit margins are unusually high or because the entering company
benefits from a patented process or product that gives them a unique advantage.
• Advantages are not permanent. The shape of the competition changes nearly
continuously. Porter observes that when Polaroid’s instant photography patents expired,
Kodak was wellequipped to enter the market. Writing in 1979, Porter couldn’t have
known that in a few years digitization would drive one company out of business.
• Porter’s analysis indicates that Apple’s security is no greater than Polaroid’s. Threats can
come from anywhere, and are difficult to anticipate.
• In fact, Porter maintains that concentrating on future sources of competition rather than
on present products is key for company survival.
QUES-5. 7 Steps of Product Strategy
7 Steps to Setting Product Strategy

1. Marketing mix – (Choice within Ps)

2. Five Levels of a product
3. Type of products
4. Differentiation
5. Brand elements
6. Product Design
7. Product Mix.

1. Marketing mix: Choice within Ps: While deciding on an electronics product

strategy, you need to decide the various product line and length that a single model
will have. You also need to decide the packaging and labelling to use besides
considering the effect of all these expenses on the marketing mix.

Elements of Marketing Mix – Sub-elements

Product Design
Product Positioning
Product name and Branding
Packaging and labeling
Product Breadth and depth of product line
Level and type of customer service
Product warranty
New Product development process
Product life cycle strategies

2. There are 5 Levels of a product

1. Core product,
2. Generic product,
3. Expected product
4. Augmented product
5. Potential product.
• At each level more customer value is added (a customer value hierarchy)
• Core benefit: The most fundamental level service or benefit that the customer is really
buying. Example: A hotel guest is buying - rest and sleep.. The purchaser of a drill machine
is buying - holes..
• Generic (Basic) product: Second level, the marketer has to turn the core benefit into a
hotel room that includes a bed, desk, washroom, towels, dresser, and closet.
• Expected product: Third level, the marketer prepares an, a set of attributes and
conditions buyers normally expect when they purchase this product.
Hotel guests expect a clean bed, fresh towels, working lamps, and a relative degree of
quiet; normally choosing whichever hotel is most convenient or least expensive.
• Augmented product: Fourth level, the marketer prepares and that exceeds customer
expectations.
Hotel can include a television set, fresh flowers, rapid check-in, express checkout and
fine dining and room service.
• However, product augmentation adds cost. So the marketer must determine whether
customers will pay enough to cover the extra cost.
• Moreover, augmented benefits soon become expected benefits, which means that
competitors have to search for still other features and benefits.
• As companies raise the price of their augmented product, some competitors can offer a
“stripped-down” version of the product at a much lower price.
• Thus, the hotel industry has seen the growth of fine hotels offering augmented products
(Four Seasons, Ritz Carlton) as well as lower-cost lodgings offering basic products
(Comfort Inn).
• Potential product: Fifth level encompasses all the possible augmentations and
transformations the product might undergo in the future - new ways to satisfy
customers and distinguish their offer.
A hotel offering that not only satisfy customers but also surprise and delight them. Thus
the hotel guest finds candy on the pillow or a bowl of fruit.
Ritz-Carlton hotels, for example, remember individual guests’ preferences and prepare
rooms with these preferences in mind.
• Delighting is a matter of exceeding expectations.
• Elmer Wheeler once observed, “Don’t sell the steak, and sell the sizzle….”
• According to Levitt : The new competition is not between what companies produce in
their factories, but between what they add to their factory output in the form of
packaging, services, advertising, customer advice, financing, delivery arrangements,
warehousing and other things that people value.
3. Type of products:
- Durable products / Nondurable products
- Shopping goods / Specialty goods / Convenience goods
- Industrial goods/consumer goods
- Service products
 Product is the key element in the marketing offering.
 Product is not only a tangible offering, it can be more.
 Product is everything that can be offered to market to satisfy a want or need.
 Products that are marketed include physical goods, services, experiences, events,
persons, places, properties, organizations, information and ideas.
 Each product type has an appropriate marketing-mix strategy.
**Durability and tangibility:
 Nondurable goods: tangible goods normally consumed in quick uses (soap) and
purchased frequently.
 Appropriate strategy: make them available in many locations; small markup; advertise
heavily; induce trial; build preference.
**Durable goods: tangible goods normally survive many uses (refrigerators, clothing).
 Appropriate strategy: more personal selling and services; higher margin; more sales
guarantees.
** Services: intangible, inseparable, variable, and perishable.
 Appropriate strategy: more quality control; supplier credibility, and adaptability
(haircuts, legal advice).
 Consumer-goods classification:
 Convenience goods: are purchased frequently, immediately, and with a minimum of
effort. Soft drinks.
 Staples: are goods consumers purchase on a regular basis.
 Consumer-goods classification:
 Impulse goods: are purchased without any planning or search effort.
 Emergency goods: are purchased when a need is urgent – umbrellas. Goods will place
them in those outlets where consumers are likely to experience an urge to make a
purchase.
 Shopping goods are goods that consumer characteristically compares on such bases as
suitability, quality, price and style. Examples: Furniture, clothing, appliances.
Categories:
 Homogeneous shopping goods are similar in quality but different price to justify
shopping comparisons. (Ceat vs MRF), Electrical appliances.
 Heterogeneous shopping goods differ in product features and services that may be more
important than price. (Stanley, Interio)
 Specialty goods have unique characteristics or brand identification which has sufficient
buyers willing to make a special purchasing effort. Examples photographic equipment.
 Unsought goods are those the consumers does not know about or does not normally
think of buying, such as smoke detectors, life insurance. Advertising and personal-
selling support required.
 Industrial-goods classification: Industrial goods can be classified in terms of their
relative cost and how they enter the production process:
o Material and parts
o Capital items
o Supplies and business services.
4. Differentiation: To build sustainable competitive advantages we have to
differentiate. Brands can be differentiated on the basis of many variables:
Personnel: Trained employees
Channel: Better distribution channels’ coverage, expertise and performance
Image: Designing powerful images
Service: Ease to order, installation, delivering, maintenance
Product: Design, Performance, Durability, Quality, features.
 Performance levels
Reliability / Reparability / Durability
Style and Design
Customer service
Warranties and Guarantee
 Product differentiation: To be branded, products must be differentiated by: form,
features, customization, performance quality, conformance quality, durability,
reliability, repair ability and style and design.
o Form – Any product can be differentiated in form - size, shape, or physical
structure.
o Features – Varying features supplement their basic function. Marketer must
decide customer value (with additional cost) versus company cost (lower
cost).
o Customization – Marketers can differentiate products by making them
customized for individuals
o Mass customization – is the ability of a company to meet each customer’s
requirements (individually designed product to mass).
o Performance quality – Most products are established at one of four
performance levels: low, average, high or superior, where product’s primary
characteristics operate, for appropriate to the target market and competitors’
performance levels.
o Conformance quality – buyers expect products to have a high conformance
quality, which is the degree to which all the produced units are identical and
meet the promised specifications.
o Durability – Measure of the product’s expected operating life under natural
or stressful conditions, is a valued attribute for certain products
o Reliability – Pay premium for more reliable products. Reliability is a measure
of the probability that a product will not malfunction or fail within a specified
time period
o Repair-ability – Measure of the ease of fixing a product when it malfunctions
or fails
 o Style – describes the products look and feel to the buyer.
 Service Differentiation: When the physical product cannot easily be differentiated,
adding valued services and improving their quality. Services differentiators are
ordering ease, delivery, installation, customer training, customer consulting and
maintenance and repair.
o Ordering ease: how easy it is for the customer to place an order with the
company.
o Delivery: how well the product or service is brought to the customer,
including speed, accuracy and care throughout the process. Tools : Quick
Response Systems (QRS) and Global Positioning System (GPS).
o Installation: work done to make a product operational in its planned location.
o Customer training: training the customer’s employee to use the equipment
properly and efficiently.
o Customer consulting: data, information system and advice services that the
seller offer to buyers.
o Maintenance and repair: service program for helping customers keep
purchased products in good working order.
o Return: product returns in two ways:
§ Controllable returns results from problems, difficulties or errors of the seller
or customer. Can mostly be eliminated with proper strategies and programs
§ Uncontrollable returns can’t be eliminated by the company in the short run
through any of the aforementioned means.
 Design Differentiation: In fast-paced markets and competition, price and
technology are not enough. Design offers a potent way to differentiate and position
a company’s products and services to give a company its competitive edge.
o Design is the totally of features that affect how a product looks, and functions
in terms of customer requirements.
o Manufacturer’s point of view: A product that is easy to manufacture and
distribute. Customer’s point of view: A well-design product is pleasant to look
at and easy to open, install, use, repair and dispose of.
 o Holistic marketers recognize the emotional power of design and the
importance to customers of how things look.
o In summary, in a increasingly visually oriented culture, translating brand
meaning and positioning through design is critical.
5. Brand elements: If its Swiss knife which makes a distinct sound, it is confirming that the knife
is genuine.
6. Product Design: Fashion labels like Gucci, Armani and others spend a fortune getting
the design right.
7. Product Mix: At the launch of the product, you need your marketing mix in place.
Once you notice the rise of the product, you can decide on the type of product mix you
want to introduce in the market to encourage further purchases and to improve brand
equity of the product.

What is a product mix?

 Number of products within the product line are called as the items, and these might
be similar in terms of: technology used, channel employed, customer’s needs and
preferences or any other aspect.
• Example: the product lines of ITC are FMCG, Hotels, Paper Board and Packaging,
Agribusiness. Product mix has 4 dimensions:
Breadth / width, Length, Depth, and Consistency.
• Breadth of a product mix shows the different product lines that firm carries – the
diversified activities of the company. 4 product lines that show the breath / width of
the ITC.
• Length of a Product mix: In the foods line the number of items: 3, In cigarettes: 3 and
so on. Total of 11 items is the product mix.

• Depth of a product mix is the variants of each product in the product. The depth of
the foods product line – curry, pastas, biryanis, conserves, etc.
 • Consistency of a product mix shows the extent to which the product lines are closely
related to each other in terms of their end-use, distribution requirements, production
requirements, price ranges, advertising media, etc.

Product mix helps?

• It helps the firm to take a decision regarding the addition or removal of the product
items in the product lines.
• Generally, the firms introduce a new product item into the existing product line as it
is easy to gain the customer support for the new product due to the customer’s
familiarity with the existing product line.
QUES-6. Pricing
Price is the amount of money expected and given in exchange for a good or service.

Pricing can also be defined as the value customers sacrifice to benefit from receiving and
using a good or service. Price is, therefore, the element of the marketing mix that leads to
revenues, unlike the other elements which incur costs. Pricing is also important as a strategic
tool as it creates customer value.

Pricing Objectives:

Before deciding on a pricing strategy, the company needs to consider its pricing objectives.
Pricing objectives should be aligned with the company's overall marketing and corporate
objectives. Some of the different types of pricing objectives may include:

 Attracting new customers to increase revenues,

 Retaining existing customers,
 Preventing competitors from entering the market,
 Preventing competitors from gaining market share,
 Attracting customer attention to the release of a new product or brand,
 Increasing sales of a specific product line.

Pricing Strategies: Now that we have defined pricing, let's look at the three key pricing
strategies: customer value-based pricing, cost-based pricing, and competition-based pricing.

1. Customer Value-Based Pricing: The idea behind customer value-based pricing is to

price a product based on the value it brings to customers rather than the cost of
producing it. Thus, the pricing decision starts by examining customer value - how much
the product is worth to customers. The steps of value-based pricing are as follows:
a. Understand customer value perception and needs.
b. Set target price to match perceived value.
c. Analyze costs.
d. Create a product that matches the target value at the target price
Within value-based pricing, there are two further pricing approaches.

i. The first is good-value pricing which involves offering a quality product and good
service at a reasonable price.
ii. The other approach is value-based pricing, which includes adding value through
product features and services to justify the higher prices.
2. Cost-Based Pricing: The second main pricing strategy is cost-based pricing. Cost-based pricing
involves setting prices based on the costs incurred by producing and marketing the product. This
pricing method sets a floor price - a minimum price a company should charge to recover costs.
Three types of costs considered for this approach are:
a. Fixed costs (overhead),
b. Variable costs,
c. Total costs.
One common cost-based pricing method is cost-plus pricing which involves adding a
pre-set mark-up to the cost of producing a product (e.g. adding a 20% mark-up).
Another approach to cost-based pricing is break-even pricing. This pricing method is
based on finding the break-even point whereby the firm recovers all production and
marketing costs.
3. Competition-Based Pricing: The final primary pricing strategy is competition-based
pricing which involves setting prices based on competitors' pricing strategies.

To use this approach, a company has to examine its competitors and their strategies,
including:

 Competitors' market offering,

 Customers' value perception of competitors' offerings,
 Competitors' current pricing strategies,
 How strong/weak competitors are,
 Whether there is a niche/underserved market.
Types of Pricing: Beyond the three main strategies outlined previously, there are other
types of pricing. One important thing to note is that pricing strategies often change. The
change can be brought about by a product's life cycle, new product mixes, or changing
environments and situations. Let's now take a look at some additional pricing strategies.

1. New product pricing strategies: New product pricing strategies are related to the
product life cycle. New product developments can put companies in challenging
situations when it comes to pricing. As a result, companies have to choose from the
two pain new product strategies:
a. Price skimming – involves setting a high price initially as the product is
introduced to the market to maximize revenues. Due to the high price, the
company makes fewer sales at a higher profit margin. Eventually, as new
product variations and models are introduced, the company will decrease the
original product's price.
b. Penetration pricing – Involves setting a low initial price to attract many
buyers and increase market share. As prices are low, profit margins may also
be lower, but due to the high number of sales, the company's costs will fall,
allowing it to decrease its prices even further.
2. Product Mix Pricing Strategies: On the other hand, product mix strategies are used
as sometimes companies have to change their pricing when a product is part of a
product mix. The five product mix pricing types are as follows
a. Product line pricing – Involves determining the price steps to be set between
different products in a product line. These price steps should be determined
based on cost and value differences.
b. Optional product pricing – Involves setting prices for optional or additional
products that come with the original product, also known as add-ons and
accessories. Examples include specific types of rims when purchasing a car.
c. Captive product pricing – Is similar to optional-product pricing, except the
products are accompanied by another product—for example, ink cartridges
for a printer or filters for a water filtering jug.
 d. Byproduct pricing – Involves determining a price for the byproducts derived
from the production of the main product. This can help the company recover
costs and even make extra profits. For example, farmers can turn their
vegetable resin into biodegradable plastic.¹
e. Product bundle pricing – Involves combining various products into a
product bundle and setting the bundle price lower than what the price would
be for buying each product individually.
3. Price Adjustment strategies: Companies often have to adjust their pricing strategies
with situational and environmental changes. However, this is not a simple task as
there are seven different types of price adjustment strategies:
a. Discount/allowance pricing – Including cash discounts (e.g. 5% discount if
the bill is paid within the first ten days) or trade allowances (e.g. a discount if
you return your old machine when buying a new one).
b. Promotional pricing – adding a discount to a product to increase sales
volume (e.g. a 20% discount limited time offer).
c. Segmented pricing – charging different prices for different geographical,
product, or customer segments (e.g. students get 20% off).
d. Geographical pricing – setting different prices for customers in different
countries or cities. For example, a standard Netflix subscription in the UK is
£10.99; in Egypt, it is EGP 165 (around £7.20).²
e. Psychological pricing – involves considering the psychology behind pricing.
Customers may be willing to pay a higher price for a product perceived as good
quality.
f. Dynamic pricing – constantly monitoring and adjusting prices to match
customer demand and needs.
g. International pricing - setting prices in different countries based on market
factors such as economic conditions, political conditions, legislation, etc.
QUES-7. Integrating Marketing Channel
A marketing channel system is the particular set of marketing channels a firm employs, and
decisions about it are among the most critical ones management faces as the Channel
members collectively earn margins from 30 to 50% of the ultimate selling price.

Marketing channels also represent a substantial opportunity cost. One of their chief roles is
to convert potential buyers into profitable customers.

Channel-Design Decisions: To design a marketing channel system, marketers must analyze

customer needs and wants, establish objectives and constraints, and identify and evaluate
major channel alternatives.
Channel-Management Decisions: After a firm has chosen a channel system, it must select,
train, motivate, and evaluate individual intermediaries for each channel. It may also modify
channel design and arrangements over time.

Channel Design Decision: Channels produce five service outputs:

1. Lot size — the number of units the channel permits a typical customer to purchase
on one occasion. In buying cars for its fleet, Hertz prefers a channel from which it can
buy a large lot size.
2. Waiting and delivery time — the average time customers wait for receipt of goods
preferring faster delivery channels.
3. Spatial (dimensional) convenience — the degree to which the marketing channel
makes it easy for customers to purchase the product.
Toyota offers greater spatial convenience than Lexus because there are more Toyota
dealers, helping customers save on transportation and search cost in buying and
repairing.
4. Product variety — the assortment provided by the marketing channel. Normally,
customers prefer a greater assortment because more choices increase the chance of
finding what they need (too many choices can sometimes create negative effect).
 5. Service backup — Add-on services (credit, delivery, installation, repairs) provided
by the channel. The greater the service backup, the greater the work provided by the
channel.

Channel Integration and Systems

1. Vertical Marketing Systems: Conventional marketing channel consists of an

independent producer, wholesaler(s), and retailer(s). Each is a separate business
seeking to maximize its own profits, even if this goal reduces profit for the system as
a whole. The manufacture, wholesaler and retailer work together with the intention
of profit maximization.
Example – a water pumps manufacturer sells the goods to water pumps contractors
as well as installers. (Lubi Pums, Ahmedabad)

VERTICAL MARKETING SYSTEM

 2. Horizontal Marketing System: A marketing system in which two or more unrelated
companies put together resources or programs to exploit an emerging marketing
opportunity. Each company lacks the capital, know-how, production, or marketing
resources to venture alone, or it is afraid of the risk. (The companies might work
together on a temporary or permanent basis or create a joint venture company).

Types:

- Two or more Manufacturers – utilization of all scarce resources.

- Two or more Wholesalers – covering a wider area for distributing goods and
services.
- Two or more Retailers – providing products in a particular area in bulk quantities.

Example of Horizontal Channels:

- Johnson and Johnson joined hands with Google. Collaboration done with the aim of
having a robotic-assisted surgical platform enhancing the overall quality of health-
care services by integration of advanced technologies.
- Nike and Apple, both associated for producing advanced footwear of Nike+ in which
apple iPod can be connected. Shoe will play music and along with it display all
information such as calories burned, distance covered and heart pace on iPod screen.

HORIZONTAL MARKETING SYSTEM

3. Integrating Multichannel Marketing Systems:
• Multichannel marketing refers to the practice of interacting with customers using a
combination of indirect and direct communication channels – websites, retail stores,
mail order catalogs, direct mail, email, mobile, etc.
• Multichannel marketing is the implementation of a single strategy across multiple
channels or platforms, thus maximizing opportunities to interact with prospective
customers.
• A channel might be email, a print ad, a retail location, a website, a promotional event,
a mobile app, SMS messaging, a product’s package, or word-of-mouth.
• The goal of multichannel is to give consumers a choice, and allow them buy when and
where they want to.
• Multichannel marketing provides customers with more than one way to complete a
sales transaction, such as through a retail store, a web page on the Internet, or even
through their smartphones.
• Additionally, it recognizes that different consumers not only favor particular
channels, but may commonly use multiple channels throughout the purchasing
process—for example, by finding information on a web page, but actually making the
purchase at a physical store.
• One benefit: Increased market coverage. Not only are more customers able to shop
for the company's products in more places, but those who buy in more than one
channel are often more profitable than single-channel customers.
• Second benefit: Lower channel cost. Selling by phone is cheaper than personal selling
to small customers.
• Third benefit: Customized selling, such as by adding a technical sales force to sell
complex equipment. (New channels typically introduce conflict and problems with
control and cooperation).
• System in which the strategies and tactics of selling through one channel reflect the
strategies and tactics of selling through one or more other channels.
• One benefit of adding more channels is increased market coverage. Not only are
more customers able to shop for the company's products in more places, but those
 who buy in more than one channel are often more profitable than single-channel
customers.
• Second benefit is lower channel cost. Selling by phone is cheaper than personal
selling to small customers.
• Third benefit is more customized selling, such as by adding a technical sales force to
sell complex equipment. (New channels typically introduce conflict and problems
with control and cooperation).
QUES-8. B2B Analysis Characteristics:
• B2B (Business to Business) Marketing: refers to the exchange of either goods or services
between two businesses. It is the sale of goods / services by one organization to the
other which may further sells to the consumers or use them to support their own
system.
• Transaction between a manufacturer and a wholesaler often comes under Business to
Business Marketing. E.g., Engineering and machinery (auto industry, airplane industry,
shipbuilding, etc.), Commodity and metal processing company’s Chemical industry,
Wood processing etc.
• Some of the world’s most valuable brands belong to business marketers: ABB,
Caterpillar, DuPont, FedEx, GE, Hewlett-Packard, IBM, Intel, and Siemens..
• Many principles of basic marketing also apply to business marketers. But they also face
some unique considerations in selling to other businesses.
• They need to embrace holistic marketing principles, such as building strong
relationships with their customers, just like any marketer.
• There are some of the crucial similarities and differences for marketing in business
markets.
• More items are involved in sales to business buyers than to consumers.
• Consider the process of producing and selling a simple pair of shoes.
• Hide dealers must sell hides to tanners, who sell leather to shoe manufactures, who sell
shoes to wholesalers, who sell shoes to retailers, who finally sell them to consumers. And
each party in the supply chain also has to buy many other goods and services.

Business markets – several characteristics

• Fewer buyers: Business marketer normally deals with far fewer buyers than the
consumer marketer does. For example a Tyre Company sales may largely depends on
getting an order from government transportation companies – like City or Intercity bus
service.
• Large buyers: Few large buyers do most of the purchasing in such industries as aircraft
engines and defense weapons.
• Customer relationship: Because of the smaller customer base and the importance and
power of the larger customers, suppliers are frequently expected to customize their
offerings to individual business customer needs as well as suppliers have been changing
from downright adversarial to close friends.
• Geographically concentrated buyers: Large group of business buyers are
concentrated in major cities and major industrial areas. The geographical concentration
of producers helps to reduce selling costs. At the same time, business marketers need to
monitor regional shifts of certain industries.
• Derived demand: the demand for business goods is ultimately derived from demand for
consumer goods – so monitor consumers buying patterns.
• Inelastic demand: the total demand for many business goods and services is inelastic
that is, not much affected by price changes. E.g., Shoe manufacturers are not going to buy
much more leather if price of leather falls.
• Fluctuating demand: the demand for business goods and services tends to be more
volatile than demand for consumer goods and services. Small % age increase in
consumer demand can lead to a much larger % age increase in the demand for
equipment to produce more.
• Professional Purchasing: Business goods are purchased by trained purchasing agents,
who must follow the organization's purchasing policies, constraints, and requirements.
Many of the buying instruments – like – requests for quotations, proposals and purchase
contracts.
• Leasing: Many industrial buyers lease instead of buy heavy equipment like machinery
and trucks. The lessee gains a number of advantages: conserving capital, getting the
latest product, receiving better service and gaining some tax advantages. The lessor
often ends up with a larger net income and the chance to sell customers who could not
afford outright purchase.
• Several buying influence: more people typically influence business-buying decisions.
Buying committees consisting of technical experts and even senior management are
common in the purchase of major goods. Business marketers have to send well-trained
sales–person/teams to deal with the well–informed buyers.
• Multiple sales calls: because more people are involved in the selling process it takes
multiple sales calls to win most business orders and the sales cycle can take years.
(More than four calls to close an average industrial sale!!!). In the case of capital
equipment sales for large projects, it may take multiple attempts to fund a project, and
the sales cycle-between quoting a job and delivering the product – is often measured in a
number of days.
• Direct purchasing: business buyers often buy directly from manufacturers rather than
through intermediaries, especially items that are technically complex or expensive.
• Reciprocity: business buyers often select suppliers who also buy from them. An
example would be a paper manufacturer that buys chemicals from a chemical company
that buys a considerable amount of its paper.
 QUES-9. Internal Environment
Marketing environment as the external factors and forces that affect a firm‘s ability to develop
and maintain successful transactions and relationships with the target customers.

Business organizations cannot change the external environment but they can react to change
their internal business components to grasp the external opportunities or the external
environmental threats.

Therefore, we must analyze business environment to survive and to get success for a business.
Business firm gets human resources, capital, technology, information, energy, and raw materials
from society. It follows government rules and regulations, social norms and cultural values,
regional treaty and global alignment, economic rules and govt. tax policies.

Types of Environment:

I. Internal factors are generally regarded as controllable factors because the company has
control over these factors; it can alter or modify such factors as its personnel, physical
facilities, organization and functional means, such as marketing mix, to suit the environment.
II. External factors, are generally beyond the control of accompany has (i) micro and (ii) macro
environment.

Internal Environment: Internal Environment: Factors that have a bearing on strategy and
decisions:

1. Value System:
o Value system of the founders and those at the helm of affairs has important bearing on
the choice of business, the mission and objectives of the organization, business policies
and practices.
o Extent to which the value system is shared by all in the organization is an important
factor contributing to success.
o The value system of JRD Tata and the acceptance of it by others who matter were
responsible for the voluntary incorporation in the Articles of Association of TATA STEEL
 its social and moral responsibilities to consumers, employees, shareholders, society and
people.
o After the EID Parry group was taken over by the Murugappa group, one of the most
profitable businesses (liquor) of the ailing Parry group was sold off as the liquor business
did not fit tinto the value system of the Murugappa group.
2. Vision, Mission and Objectives:
o Business domain of the company, priorities, direction of development, business
philosophy, business policy etc., are guided by the vision mission and objectives.
o Dr Reddy’s Lab thrust in to the foreign markets and development has been driven by its
mission “to become a research based international pharmaceutical co.”
o Arvind Mills' mission – “To achieve global dominance in select business built around our
core competencies through continuous product and technical innovation, customer
orientation and focus on cost effectiveness.”
3. Management Structure and Nature:
o Organizational structure, the composition of the Board of Directors, extent of
professionalization of management etc., are important factors influencing business
decisions. Some management structures and styles delay decision making while some
others facilitate quick decision making.
o For the performance of the organization, the quality of the Board is a very critical factor
for the development and performance of company.
4. Internal Power Relationship:
o Factors like the amount of support the top management enjoys from different levels of
employees, shareholders and Board of Directors have important influence on the
decisions and their implementation.
o The relationship between the members of Board of Directors and between the chief
executive and the Board are also critical factors.
5. Human Resources:
o Human skills like – quality, morale, commitment, attitude etc., could contribute to the
strength and weakness, of an organization. Some organizations find it difficult in
restructuring or modernization because of resistance by employees while others do it
smoothly.
 o A Japanese company of 30,000 employees is 30,000 process improvers. A US company,
it is 2,000 process improvers and 28,000 workers. In an Indian company…..?
6. Company Image and Brand Equity:
o Image of the company matters while raising finance, forming joint ventures or other
alliances, soliciting marketing intermediaries, entering purchase or sale contracts,
launching new, products etc.
o Brand equity is also relevant in several of these cases.
7. Physical Assets and Facilities:
o Like the production capacity, technology, efficiency of the productive machinery,
distribution, logistics etc., are among the factors which influence the competitiveness
of a firm.
o Example, quality is important to Cadila Healthcare that does not compromise on it and
also keeps quality norms stricter than international norms.
8. R & D and Technological Capabilities: determine a company‘s ability to innovate and
compete.
9. Marketing Resources: like quality of the marketing men, brand equity and distribution
network have direct bearing on marketing efficiency. They are important for brand
extension, new product introduction etc.
10. Financial Factors: like financial policies, financial position and capital structure affect
business performances, strategies and decisions.