Master of Business Administration - MBA Semester 2

MB0046 ÷ Marketing Management - 4 Credits
Book ID: B1135)
Assignment Set- 1
60 Marks

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 a. Explain the diIIerent micro-environmental Iorces with examples. (6 marks)
b. Mention the diIIerent ad appeals with suitable examples. (4 marks)

Q.2 What are the diIIerent market entry strategies iI a company wants to enter international
markets? (10 marks)

Q.3. a. State the meaning oI Product liIe cycle and explain the diIIerent stages involved in it. (8
b. DeIine Customer Relationship Management. (2 marks)

Q.4. a. You are a sales manager in ABC Iirm. You have taken some interviews and shortlisted a
Iew candidates. How will you select the right candidate Ior the sales job? (5 marks)
b. As a consumer, what are the steps you will undertake beIore you decide to buy a car? (5

Q. 5 a. What are the Ieatures oI Business markets? How is it diIIerent Irom consumer markets? (5
b. List out the 5 important requisites oI an eIIective segmentation by giving suitable
examples. (5 marks)

Q. 6. Explain brieIly what are the several processes involved in new product development. (10

µ.Ź) A.Fxploin tbe Jifferent micro-environmentol forces witb

A) Forces In the mIcro envIronment
|arketIng department alone cannot satIsfy all the needs of customer. Therefore It Is
essentIal to Integrate the functIons of supplIers, publIcs, Internal departments and
IntermedIarIes In creatIng the value to the customer. These forces are known as
organIzatIon's mIcro envIronment.

|IcroenvIronment: The forces whIch are very close to company and have Impact on
value creatIon and customer servIce.

%he Company
Femember,In the prevIous unIt we dIscussed about marketIng mIx and marketIng plan.
Safe Express, a leader In the supply chaIn management solutIon wants to hold Its
number one posItIon In the US S 90 bIllIon ÌndIan logIstIcs market. The company plans
to expand Its servIce areas In the comIng months. To meet the targets of the
marketIng plan, other departments of safe express also expandIng theIr horIzon. The
Company Is comIng out wIth logIstIcs parks In dIfferent cItIes; plans to hold seven
mIllIon square feet of warehousIng capacIty In the next three years and Invest Fs 10
bIllIon In three years to meet those targets. The above example shows that the
company's marketIng plan should be supported by the other functIonal departments

|arketIng IntermedIarIes: These are fIrms whIch dIstrIbute and sell the goods of the
company to the consumer.|arketIng IntermedIarIes play an Important role In the
dIstrIbutIon, sellIng and promotIng the goods and servIces. StockIng and delIverIng,
bulk breakIng, and sellIng the goods and servIces to customer are some of the major
functIons carrIed out by the mIddlemen. FetaIlers, wholesalers, agents, brokers,
jobbers and carry forward agents are few of the IntermedIarIes. FetaIlers are fInal lInk
between the company and the customers. TheIr role In the marketIng of product Is
IncreasIng every day.

These are mIcroenvIronment groups, whIch help a company to generate the fInancIal
resources, creatIng the Image, examInIng the companIes' polIcy and developIng the
attItude towards the product.

We can IdentIfy sIx types of publIcs
1. FInancIaI pubIIcs
Influence the company's abIlIty to obtaIn funds. For example, 8anks,
Investment houses and stockholders are the major fInancIal publIcs.
2. edIa pubIIcs
carry news and features about the company e.g. 0eccan Herald

AdvertIsement regulatIon agencIes, telecom reguIatIon agency( TFAÌ), and
Insurance regulatIon agency(ÌF0A) of the government

4 CItIzen actIon groups:
Formed by the consumer or envIronmental groups. For example, people for
ethIcal treatment of anImals (PETA) or Creenpeace.

eneraI pubIIcs:
A company should be concerned towards general publIcs' attItude towards Its
products and servIces.

InternaI pubIIcs:
Employees who help In creatIng proper Image for the company through word of

A company should monItor Its ImmedIate competItors as Its sale wIll be affected by
the nature and IntensIty of the competItors. The sale of Coca cola wIll be affected by
PepsI cola, or 8rItannIa cheese by Amul cheese. |Ichael Porter, the author of
CompetItIve Advantage of NatIons suggested that, In addItIon to dIrect competItIon,
companIes should also consIder competItIon from substItutes. Ìn addItIon to exIstIng
competItors, the potentIal competItors should also be antIcIpated. CompetItIon may
arIse from
a. Small fIrms wIth low overheads producIng duplIcates.
b. FIrms whIch dIversIfy Into certaIn products by merely beIng In the partIcular
Industry for e.g. PepsI entered the snacks sector competIng wIth pure snack producers
lIke HaldIram.
c. FIrms whIch expand In the same vertIcal for e.g. Codrej whIch manufactured offIce
furnIture and steel cupboards went on to the entIre range of home furnIture thereby
gIvIng competItIon to pure home furnIture makers.
How do companIes or enterprIses survIve and grow under the above cIrcumstances.
WhIle we shall study thIs In detaIl later, a sImple step could be that the product
should be posItIoned dIfferently and the company should be able to provIde better

There are many kInds of supplIers to an enterprIse or an InstItutIon. There are
typIcally, raw materIal supplIers, energy and fuel supplIers, labour supplIers, offIce
Item supplIers and so on. SupplIers are the fIrst lInk In the entIre supply chaIn of the
company. Hence any problems or cost escalatIon In thIs stage wIll have dIrect effect
on the company. |any companIes adopted supplIer relatIon management system
to manage them well. SupplIers are a source of competItIon to fIrms today. For a large
retaIl store lIke FelIance FetaIl or 8Ig 8azaar the supplIers play the most sIgnIfIcant
role In both cost and tIme. TImely supplIes reduce stockIng of goods and blockIng of
space, at the same tIme meet customer requIrements.

Ìn a globalIsed scenarIo supplIers are even more Important as competItIon goes up
manIfold! The TamIl Nadu State ElectrIcIty 8oard Imports coal from New Zealand
despIte huge coal reserves In ÌndIa. For 7olvo, ÌndIa Is a manufacturIng hub.

A company may sell theIr products dIrectly to the customer or use marketIng
IntermedIarIes to reach them. 0Irect or IndIrect marketIng depends on what type of
markets Company serves. Cenerally we can dIvIde the markets Into fIve dIfferent
categorIes. They are

a. Consumer market.
b. 8usIness market
c. Feseller market
d. Covernment market and
e. ÌnternatIonal market

You wIll come to know about these fIve dIfferent markets from the followIng example.
|FF, a tyre company sells Its product dIrectly to consumer (In case of urgency,
customer purchases dIrectly from showroom) I.e. operates In consumer market. Ìt
operates In busIness markets by sellIng tyres to companIes lIke |arutI Udyog lImIted.
|FF also sells TYFEs to 8|TC and KSFTC, transport organIzatIons of Karnataka

Q.1 8.ention tbe Jifferent oJ oppeols witb suitoble exomples.

|essage content must have any one of the followIng appeals

EmotIonaI appeaI:
PosItIve emotIonal appeal or negatIve emotIonal appeals are strong tools used to
IntensIfy the purchasIng actIvIty of the customer. PosItIve emotIons lIke love, prIde,
joy and humor are used In the message. FollowIng are the advertIsement where such
attrIbutes of posItIve emotIons used.

The negatIve emotIons lIke fear guIlt and shame are also used In the advertIsement to
attract the customer.#,943, ,550,8 hIghlIght on the desIred benefIts about the
products. They hIghlIght qualIty, economy value or performance of the product.

oraI appeaI:
These are concerned towards publIc health or envIronment or socIal responsIbIlIty. For
example, Shell lubrIcants show Its commItment towards envIronment In theIr

CoIors used: Saffron, Yellow, Fed, Watermark brown, 8lack, 8rown.
SIze: J.5Inch breadth* 4.2 Inch length
Shape: Fectangle
Words: StraIght out of the pack and Into your mouth, that's the usual style of eatIng
HaldIram's Namkeen. 8ut now, there's a whole new way of doIng It! A blend of our
delIcIous namkeen wIth a dash of ImagInatIon, presented In a lIst of yummy recIpes,
just for you. 8ut where do you get these FecIpe FemIxes: Just wrIte to us at the
address gIven below and we'll send you a FecIpe FemIx booklet, absolutely free!
What's more, you can also try these recIpes at most of the HaldIram's outlets

ÌnstItutIonal advertIsIng: The objectIves of advertIsements are to enhance the Image
of the company rather than sellIng the product. For example, WIpro uses ,ApplyIng
Thought for all Its busInesses thus promotIng the company.

Product advertIsIng:
The objectIve of thIs type of advertIsement Is to communIcate about the product
attrIbutes to the target customer. Product advertIsIng Is further classIfIed Into three
types. They are
1 PIoneer advertIsIng:
ThIs mode of advertIsements Is used to create awareness and demand In the
InItIal stage of the product lIfe cycle. For example, TATA 0ocomo advertIsed
InItIally as to why a person should pay for the unused mInutes when talks may
last for seconds.

CompetItIve advertIsements:
ThIs type of advertIsement Is used to hIghlIght the dIfferentIatIon of
organIzatIons product. ThIs method Is usually used In the growth phase of
product lIfe cycle. For example, 0etergents lIke ArIel, Surf and TIde constantly
dIfferentIate theIr product features from each other.

ComparatIve advertIsements:
ThIs type of advertIsements hIghlIght on the comparIng companys
communIcatIon message wIth competItors product InformatIon. ThIs method Is
used when the competItIon Is very hIgh or sales are sluggIsh. For example, soft
drInks lIke PepsI and Coca·cola at some poInt were Involved In comparatIve

Q.2) bot ore tbe Jifferent morket entry stroteqies if o compony
wonts to enter internotionol morkets?

rganIzatIons that plan to go for InternatIonal marketIng should know the answers for
some basIc questIons lIke ·
a. Ìn how many countrIes would the company lIke to operate:
b. What are the types of countrIes It plans to enter:
Thats why companIes evaluate each country agaInst the market sIze, market growth,
and cost of doIng busIness, competItIve advantage and rIsk level.

CheckIIst for country
evaIuatIon CharacterIstIcs
weIghtages score

1. PolItIcal rIghts
2. CIvIl lIbertIes
J. Control of corruptIon
4. Covernment effectIveness
5. Fule of law or legal Issues
6. Health expendIture
7. EducatIon expendIture
8. Fegulatory qualIty
9. Cost of startIng a busIness
10. 0ays to start a busIness
11. Trade polIcy
12. ÌnflatIon
1J. FIscal polIcy
14. ConsumptIon patterns
15. CompetItIon

0Irect exportIng Is the technIque In whIch organIzatIon exports the goods on Its own by
takIng all the rIsks. |arutI Udyog LImIted, ÌndIas leadIng car manufacturer exports Its
cars on Its own. Company can also set up overseas branches to sell theIr products.
AdanI Exports, another leadIng exporter from ÌndIa has InternatIonal offIce In

AccordIng to PhIlIp Kotler, lIcensIng Is a method of enterIng a foreIgn market In whIch
the company enters Into an agreement wIth a lIcense In the foreIgn market, offerIng
the rIght to use a manufacturIng process, trademark, patent, or other Item of value
for a fee or royalty. For example, Torrent PharmaceutIcals has lIcense to sell the
cardIovascular drugs of ChInese manufacturer Tasly. LIcensIng may cause some
problems to the parent company. LIcensee may vIolate the agreement and can use the
technology of the parent company.

Contract manufacturIng:
Company enters the InternatIonal market wIth a tIe up between manufacturer to
produce the product or the servIce. For example, CIgabyte Technology has contract
manufacturIng agreement wIth 0· lInk ÌndIa to produce and sell theIr mother boards.
Another sIgnIfIcant manufacturer Is T7S ElectronIcs; It produces key boards In Its own
name as well as for other companIes too.

anagement contractIng:
Ìn thIs case, a company enters the InternatIonal market by provIdIng the know how of
the product to the domestIc manufacturer. The capItal, marketIng and other actIvItIes
are carrIed out by the local manufacturer, hence It Is less rIsky too.

JoInt ownershIp:
A form of joInt venture In whIch an InternatIonal company Invests equally wIth a
domestIc manufacturer. Therefore It also has equal rIght In the controllIng operatIons.
For example, 8arbara, a lIngerIe manufacturer has joInt venture wIth Cokaldas Ìmages
In ÌndIa.

0Irect Investment:
Ìn thIs method of InternatIonal market entry, Company Invests In manufacturIng or
assemblIng. The company may enjoy the low cost advantages of that country. |any
manufacturIng fIrms Invested dIrectly In the ChInese market to get Its low cost
advantage. Some governments provIde IncentIves and tax benefIts to the company
whIch manufactures the product In theIr country. There Is government restrIctIon In
some countrIes to opt only for dIrect Investment, as It produces the jobs to the local

ThIs mode also depends on the country attractIveness. Ìt may become rIsky If the
market matures or unstable government exIsts.CommunIcatIon In the InternatIonal
market Is very challengIng. There exIsts many languages and dIalects and dIfferent
perceptIons about communIcatIon strategIes. Ìn some countrIes there are regulatIons
on the advertIsements and sales promotIons.

For example In ÌndIa, alcohol advertIsements are banned. Ìn thIs sectIon we deal wIth
the communIcatIon strategIes that the company should adopt and what are the
barrIers to It. The marketer may face the language barrIers, cultural barrIers and legal
barrIers In some countrIes. Ìn SaudI ArabIa usIng women In advertIsements Is
prohIbIted. 7odafone has to change Its promotIon program to TamIl In TamIlnadu, a
state In ÌndIa. rganIzatIons also face the problem of medIa and productIon cost In
dIfferent countrIes.

Clobal promotIonal program wIll have three sets of objectIves. FIrst of all, In settIng
the global objectIves, Secondly, formulatIng the regIonal objectIves and fInally settIng
the local objectIves. The medIa decIsIons depend on the objectIves of the promotIon
program. As we dIscussed In the promotIon unIt, medIa budget In the InternatIonal
marketIng Is also determIned by percentage sales method, competItIve parIty,
resource allocatIon and objectIve and task method.

Clobal promotIon program may be standardIzed or adapted. StandardIzatIon wIll help
the company to reduce cost and add the value to the product. The pItfall of
standardIzatIon Is local customers who cannot understand global messages. ne of the
famous companIes In the world was showIng Its advertIsements on supply chaIn
management software In ÌndIa In the same way as In the USA. The advertIsement
evaluatIon results were very strange. People can recall only the horse word In the
advertIsement. As we dIscussed In the earlIer sectIon of the unIt, company can adapt
Its communIcatIon strategy only to the local market, or both product and
communIcatIon can be adapted.
AdvertIsements wIll have modIfIcatIons. Ìf marketer wants to sell theIr products In
Japan, he should not use whIte color as It Is consIdered only for mournIng.

µ.Ż. A. Stote tbe meoninq of ProJuct life cycle onJ exploin tbe
Jifferent stoqes involveJ in it.


Product IIne:
The group of related products whIch uses same marketIng efforts to reach the
consumer. The product lIne IdentIfIes profItable and unprofItable products and helps
In allocatIon of resources accordIng to that. The product lIne understandIng helps the
marketer to take lIne extensIon, lIne prunIng and lIne fIllIng strategIes of the
PIdIlIte ÌndustrIes, the adhesIves and chemIcal company, have the followIng group of
related products (or product lInes) In consumer and busIness markets.

Consumer market
1. AdhesIves and sealants.
2. Art materIals and statIonerIes.
J. ConstructIon chemIcals.
4. AutomotIve chemIcals
5. FabrIc care

ßusIness market
1. ÌndustrIal adhesIves.
2. TextIle chemIcals.
J. rganIc pIgment powders.
4. ÌndustrIal resIns and
5. Leather chemIcals.

Product LIne 0ecIsIons:
The major product lIne decIsIons are
a. Product lIne length
b. Product lIne stretchIng
c. Product lIne fIllIng
d. Product lIne prunIng

Product IIne Iength:
The number of Items In the product lIne Is called the product lIne length. Company
should decIde whether It requIres longer chaIn or shorter length. The decIsIon depends
upon the objectIve of the company, competItIve envIronment and profItabIlIty. Ìf the
chaIn Is short company can add new products and If It Is lengthy company can reduce
the number of products. For example, PIdIlIte's adhesIves and

sealants lIne has followIng 11 Items In the product lIne. Hence the length of product
lIne Is 11

1. WhIte Clue

2. Paper Clue
J. Clue StIck 4. Ìnstant AdhesIve
5. Epoxy Putty 6. Epoxy AdhesIve
7.P7C ÌnsulatIon Tape 8. SIlIcone Sealants
9. Contact Clue 10. All Purpose Clue
11. |aIntenance Spray

Product IIne prunIng:
FemovIng the unprofItable products form the product lIne. Toyota KIrloskar phased out
theIr well known brand QualIs when they thought the brand was not addIng value to
the product lIne.

µ.Ż.B. Befine Customer Relotionsbip onoqement.


8erry defInes CF| as "attractIng, maIntaInIng and - In multI·servIce organIzatIons -
enhancIng customer relatIonshIps."

8erry and Parasuraman defIne CF| as "attractIng, developIng and retaInIng customer

Ìn ÌndustrIal |arketIng, Jackson defInes CF| as "marketIng orIented toward strong,
lastIng relatIonshIps wIth IndIvIdual accounts."

0oyle and Foth defIne CF|S as "the goal of relatIonshIp sellIng Is to earn the posItIon
of preferred supplIer by developIng trust In key accounts over a perIod of tIme."

The sequence of actIvItIes for performIng relatIonshIp marketIng would Include
developIng core servIces to buIld customer relatIonshIp, customIzatIon of relatIonshIp,
augmentIng core servIces wIth extra benefIts, and enhancIng customer loyalty and
fIne·tunIng Internal marketIng to promote external marketIng success.

ChrIstopher consIders relatIonshIp marketIng as "a tool to turn current and new
customers Into regularly purchasIng clIents and then progressIvely movIng them
through beIng strong supporters of the company and Its products to fInally beIng actIve
and vocal advocates for the company."

FelatIonshIp marketIng Is In essence "sellIng by usIng psychologIcal rather than
economIc Inducements to attract and retaIn customers. Ìt seeks to personalIze and
appeal to the hearts, mInds and purses of the mass consumers."· James J. Lynch
Thus, "Customer FelatIonshIp |anagement Is about acquIrIng, developIng and
retaInIng satIsfIed loyal customers; achIevIng profItable growth, and creatIng
economIc value In companys brand,"

From the above defInItIons, It could be concluded that Customer FelatIonshIp
|anagement refers to all marketIng actIvItIes dIrected towards establIshIng,
developIng, and sustaInIng long lastIng, trustIng, wIn·wIn, benefIcIal and successful
relatIonal exchanges between the focal fIrm and all Its supportIng key stakeholders.
CF| Is not a new concept but an age·old practIce, whIch Is on the rIse because of the
benefIts It offers, especIally In the present marketIng scenarIo. So, CF| today Is a
dIscIplIne as well as a set of dIscrete software and technology whIch focuses on
automatIng and ImprovIng the busIness process assocIated wIth managIng customer
relatIonshIps In the area of sales, marketIng, customer servIce and support. CF| helps

understand, establIsh and nurture long·term relatIonshIps wIth clIents as well as In
retaInIng current customers. The most Important step that an organIzatIon has to take
In the dIrectIon of CF| Is to create an InterdIscIplInary team to revIew how the
organIzatIon Interacts wIth each customer and determIne how to Improve and extend
the relatIonshIp.

An extensIve revIew of lIterature reveals ten dIfferent but Interrelated forms of
relatIonshIp marketIng as mentIoned below:

1. The partnerIng Involved In relatIonal exchanges between manufacturers and theIr
external goods supplIers.

2. FelatIonal exchanges InvolvIng servIce provIders, as between advertIsIng or
marketIng research agencIes and theIr respectIve clIents.

J. StrategIc allIances between fIrms and theIr competItors, as In technology allIances;
co·marketIng allIances and global strategIc allIances.

4. AllIances between a fIrm and non·profIt organIzatIons, as In publIc·purpose

5. PartnershIps for joInt research and development, as between fIrms and local, state,
or natIonal governments.
6. Long·term exchanges between fIrms and ultImate customers, as partIcularly
recommended In the servIces marketIng area.

7. FelatIonal exchanges of workIng partnershIps as In channels of dIstrIbutIon.

8. Exchanges InvolvIng functIonal departments wIthIn a fIrm.

9. Exchanges between a fIrm and Its employees, as In Internal marketIng.

10. WIthIn fIrm, relatIonal exchanges InvolvIng such busIness unIts as subsIdIarIes,
dIvIsIons or strategIc busIness unIts.

These dIfferent forms of relatIonshIp marketIng both joIntly and severally Influence
the emergence and growth of endurIng long·term dyadIc, trIadIc network, and web of
relatIonshIps between the focal fIrm and Its supportIng key stakeholders.

Q.4) A. You ore o soles monoqer in ABC firm. You bove token
some interviews onJ sbortlisteJ o few conJiJotes. Eow will you
select tbe riqbt conJiJote for tbe soles job?


The Important tasks In order to make Sales management effectIve and effIcIent
Include the followIng HF practIces whIch are normally adopted In any organIzatIon

FecruItment Is a process of fIndIng out candIdates, who are encouraged to apply.
SelectIon Is process of choosIng or short·lIstIng some suItable candIdates out of many
those who have applIed. Therefore, we can say that selectIon Is recruItment, but
recruItment Is not selectIon. SelectIon Is a process of rejectIon of unfIts. FecruItment
precedes the selectIon process. After decIdIng the number of salespersons and the
objectIves, the sales manager must select personnel. The usual sources of recruItment
may be eIther Internal or external.

InternaI Sources:
|any fIrms feel that the best polIcy to fIll the vacancIes of salespersons Is from the
exIstIng employees of the same organIzatIon. Ìt may also be termed as promotIon. ThIs
can well be adopted by analyzIng the abIlIty and promIsIng character of the staff on
the basIs of senIorIty I.e., length of servIces.

1. |uch co·operatIon can be expected.
2. They are loyal.
J. SInce It Is a promotIon, sIncere and honest performance can be expected.
4. They may not need traInIng.
5. They may not need hIgh salary.

1. There Is lImIted scope for selectIon.
2. FavorItIsm plays Its role.
J. The person may not adjust hImself to the new job as the nature of work Is
dIfferent. Apart from the Internal selectIon, ex·employees of the company can also be
appoInted If they are wIllIng to accept a job. ThIs polIcy Is better and can profItably
be adopted.

ExternaI Sources:
We have the followIng sources:
1. Employment Exchange
2. CompetItors organIzatIon
J. Salesperson of non·competIng fIrms
4. EducatIonal ÌnstItutIons
5. Fecommended cases
6. AdvertIsement
7. UnsolIcIted applIcatIons etc.

1) EmpIoyment Exchange:
PrIvate and publIc employment exchanges are the best source of personnel.
They maIntaIn proper regIsters wIth names and other full detaIls of persons,
such as job referred by those who seek jobs. The sales manager can call
persons from exchange, by gIvIng job specIfIcatIon to the offIcer concerned. Ìn
almost all cases the candIdates may be untraIned; and InexperIenced hands
requIrIng further traInIng.

2) CompetItors' DrganIzatIon:
The salespersons employed In other competIng fIrms can also be chosen. 8ut
thIs method Is not morally accepted. He may be traIned and may be developIng
hIs fIrm. Such a person can be drawn by temptatIon when he Is offered more
facIlItIes and a hIgher salary. 8ut It must be verIfIed how far he Is able to meet
the sales objectIves, consIderIng hIs sIncerIty, loyalty, habIts etc Such a man,
when he gets some addItIonal benefIts from some other fIrms, wIll follow the
same tactIcs I.e., leave the fIrm.

J) SaIespersons of Non-competIng FIrms:
Salesperson can also be chosen from non·competIng fIrms. Such persons may
have experIence In the lIne, If not touch wIth the partIcular product. They may
need traInIng to come up to the level of aImed sales objectIves.

4) EducatIonaI InstItutIons:
Advanced countrIes lIke AmerIca, England etc., select students dIrectly from
specIalIzed InstItutIons, where theoretIcal and practIcal knowledge Is gaIned by
them. The ÌnstItutIonal Heads maIntaIn complete records of students but as far
as ÌndIa Is concerned, the chances are rare. Ìt has been neglected wIth the
feelIng, ,just from egg I.e., InexperIenced.

5) Pecommended Cases:
The employees of the fIrm · managers, superIntendents, sectIon heads etc.,
may recommend candIdates from theIr frIend cIrcles. They have a moral
esponsIbIlIty when such persons are recruIted. The employee who recommends
ersonnel wIll be blamed, If the person Is Incapable of doIng the assIgned work.

dvertIsement :-

ThIs Is a generally accepted system of recruItIng salespeople by fIrms. AdvertIsements
are dIsplayed In newspapers, trade journals specIfyIng the job and the requIred
qualIfIcatIons, experIence and skIll. There Is the possIbIlIty of a wIder scope of
selectIon, as the news spreads over a wIde geographIcal area.

SelectIon procedure dIffers from fIrm to fIrm. Each fIrm has got Its own method In
choosIng people for employment. The qualItIes that the recruIters seek In people to be
appoInted, depends on the job descrIptIon. SImIlarly the selectIon method also
depends upon the sales management. Cenerally, the followIng steps are followed:

1. ApplIcatIon blank
2. ScreenIng
J. Feference
4. Personal IntervIew
5. Test
6. |edIcal examInatIon
7. FInal IntervIew (appoIntment)

ppIIcatIon ßIank:
Necessary InformatIon about the applIcant Is requIred to be consIdered for
appoIntment. Cenerally, the candIdates are asked to apply on companys applIcatIon
form, sent dIrectly to applIcants agaInst a requIsItIon, or an applIcatIon known as
applIcatIon blank Is gIven In the advertIsement Itself. ThIs Is wIth a vIew to gather only
the necessary detaIls of the applIcants. Ìt contaIns a number of questIons, whIch after
beIng fIlled, gIves a clear Idea about the candIdate. Cenerally, It may contaIn the
name, sex, qualIfIcatIon, age, experIence, health, socIal actIvItIes, address,
references etc.
All applIcatIons wIll not be consIdered. ScreenIng Is a process by whIch applIcatIons
are to be screened out (rejected) from further consIderatIon, on the basIs of
unsuItabIlIty. The remaInIng applIcatIons are formally consIdered for appoIntment,
subject to further formalItIes. 8y rejectIng the applIcatIons of unqualIfIed applIcants,
much tIme and energy can be saved In further processIng.
Cenerally, It Is a common practIce to ask the applIcant to mentIon the names of two
references or referees, to whom the sales manager can make enquIrIes about the
IntegrIty, general character and abIlIty of the applIcant concerned. The qualItIes are
checked wIth care and cautIon by the sales manager, by contactIng the referees. Ìf the
opInIons are favorable, the applIcatIons pass on to the next stage; and In case the
referee gIves unfavorable comment, the applIcatIon Is rejected at thIs stage.
Personal contact Is necessary and It Is better, because people are straIght forward In
tongue better than In pen. ThIs Is one·sIded, but the effectIveness of such opInIon Is
doubted, as there may be chances of tellIng only the good qualItIes of applIcants.
|oreover, only the names of such favorable persons are mentIoned In reference, wIth
pre·IntImatIon. To overcome thIs, personal IntervIew Is essentIal.

PersonaI IntervIew:
ThIs Is an Important step In the process of selectIon. nly the screened applIcatIons
are consIdered for selectIon to whIch the fIrm sends out IntervIew letters. Personal
IntervIew Is a must. Through thIs IntervIew, the sales manager can understand the
posItIve and negatIve qualItIes of the applIcant, wIth reference to the job dutIes. A
good IntervIewer must be unbIased, able to dIscover facts and be a keen observer of
the IntervIewee.
ÌntervIews are also of two types:
(a) Patterned and non·patterned. Under patterned IntervIew, questIons are desIgned
and the same questIons are asked to all, whIch Is easy for comparIson purposes.
(b) Ìn non·patterned IntervIew, no standardIzed questIons are asked. The applIcant Is
allowed to talk freely. A few dIrect questIons are asked. Ìn thIs type of IntervIew, the
applIcant gets a chance of speakIng about hIs attItude and Interest freely. The
IntervIewer must be able to make an easy evaluatIon of the IntervIew.

Test Is an addItIonal tool, wIth whIch the applIcants are further tested to determIne
theIr suItabIlIty for the job. Cenerally, followIng are the Important types of
psychologIcal tests conducted:

bIIIty %est:
ThIs test Is devIsed to ascertaIn the capacIty to grasp thIngs, and Is a measure to know
how well a person performs a partIcular task wIth motIvatIon. ThIs can also be called a
mental abIlIty or IntellIgence test. Such tests determIne the suItabIlIty of a candIdate
for a partIcular job.

HabItuaI CharacterIstIc %est:
A person may be IntellIgent but may hesItate to take a decIsIon. ThIs test Is aImed to
know ones aptItude and Interest on normal, daIly work, IrrespectIve of the best
behavIor occasIonally.
chIevement %est:
ThIs test Is desIgned to know what knowledge a person has gaIned from hIs educatIon
or traInIng.
8y all these psychologIcal tests, the abIlIty and suItabIlIty of a candIdate can be
verIfIed. ne can aIm to evaluate the honesty, cheerfulness, leadershIp qualIty,
assertIveness, co·operatIon, supervIsIon capacIty, emotIonal stabIlIty, determInatIon,
abIlIty etc., of the personnel. The effectIveness and relIabIlIty of these tests are
questIonable, as the qualItIes cannot be measured exactly and the cIrcumstances to be
faced by salespersons are also dIfferent.

edIcaI ExamInatIon:
The Important thIng about any person, apart from all qualItIes and elIgIbIlIty, Is that
he/she must be physIcally fIt for the job. 0Iseases and physIcal defIcIencIes of the
salesperson wIll affect the busIness. As such, selected applIcants have to undergo
medIcal examInatIon.

FInaI IntervIew and ppoIntment:
The selected applIcant Is probably, called for a fInal IntervIew and hIs/her suItabIlIty
Is measured through dIfferent tests, physIcal reports etc. nce confIrmed,
appoIntment letter wIll be gIven to the person and the job wIll t be explaIned to
hIm/her, along wIth all relevant detaIls, whIch are requIred to perform the dutIes
Ìf everythIng Is In favor of the applIcant, an agreement must be executed by hIm/her.
Cenerally, the agreement contaIns dutIes and authorItIes, sales quota, sales terrItory
allotted, salary and condItIons of resIgnIng. Ìt Is followed by an appoIntment order,
whIch contaIns desIgnatIon, jobs to be performed, salary and other fInancIal benefIts

SIgnIfIcance of %raInIng:
The present era of marketIng world Is full of stIff and cut·throat competItIon. The
world Is dynamIc and not statIc. Customers are more benefIt·orIented. Producers, In
order to meet the ever·changIng demands of the consumers, produce new products,
new devIces, and products wIth multIple uses and so on. Thus, traInIng or repeated
traInIng Is essentIal to keep the salesmen, wIth up·to·date knowledge, In respect of
new or developed goods. TraInIng gIves scope for Improvement.

DbjectIves of %raInIng:
The objectIves are summed up below:
1. To facIlItate the salespersons to acquIre the technIques and prIncIples of
salesmanshIp, process of sales, canvassIng etc.
2. To brIng down the labor turnover In the sales force.
J. To facIlItate better sales performance.
4. To Improve the relatIons wIth the customers.
5. To Increase the effIcIency of sales personnel.
6. To keep the salesperson Informed about the products, market, competItors etc., to
face dIfferent sItuatIons.
7. To lower the sellIng expense so as to Increase the profIts.
8. To maIntaIn sound relatIons between employer and employee.
9. To develop better knowledge, and the ways and means to resIst all undesIrable
10. To motIvate the consumers more effectIvely.

Q.4.8. As o consumer, wbot ore tbe steps you will unJertoke
before you JeciJe to buy o cor?


The buyers decIsIon for exIstIng products and new products varIes. You already seen
In the exIstIng product buyIng decIsIon process consumers have the optIon to search
for the InformatIon and evaluate them. Ìn the new product such optIons dont exIst.
Therefore we should understand how consumer comes to know about the product.
Kotler defIned thIs process as adoptIon process. AccordIng to PhIlIp Kotler AdoptIon Is
,The mental process through whIch an IndIvIdual passes from fIrst hearIng about an
InnovatIon to fInal adoptIon.

1. wareness: the consumer became aware of the product but lacks InformatIon about

2. Interest: 8y thIs stage prevIous InformatIon Is avaIlable, consumer shows Interest to
get the InformatIon about the product.

J. EvaIuatIon: After receIvIng the InformatIon consumer analyzes the benefIts of new
products over any exIstIng products or substItutes and decIdes whether to buy or not.

4. %rIaI: The consumer trIes the new product on a small scale to Improve hIs or her
estImate of Its value.

5. doptIon: Ìn thIs stage consumer decIdes to make full and regular use of the

1. 2.5º of the consumers adopt any new product that enters to the market. These
consumers are status conscIous people. |arketer should hIghlIght how the new product
wIll brIng the esteem to the consumer.

2. 1J.5º of the customers fall Into the early adopter categorIes. Ìn thIs categorIes
customer observed the advantage of the new product and the moment the prIce of the
product falls Into the affordable category they buy the product.

J. The next group Is the bIggest one In the adoptIon process. These group customers
are attracted towards the benefIts of the product. They make sure that there are no
technIcal or general problems assocIated wIth the product. ThIs group contaIns J4º of
the total customers.

4. ThIs group consIst J4º of customers. The group looks for the qualIty product at the
affordable prIces.

5. The fInal group Is called as laggards. These are tradItIonal and prIce conscIous
people. They often take lot of tIme to adoptIon of the product.

Q.5 A) bot ore tbe feotures of Business morkets? Eow is it
Jifferent from consumer morkets?


FollowIng are some of the unIque features of busIness markets where large
establIshments purchase the requIred goods and servIces from other busInesses. Such
828 operatIons determIne the organIzatIons as buyers and those organIzatIons who
supply the varIous requIrements wIll be the sellers or supplIers or servIce provIders.

1. Few but buIk ßuyers:
The no. of buyers Is few but they buy In large quantIty. For example, major
aIrlInes buy the necessary equIpments from the aIrcraft manufacturers
2. eographIcaI concentratIon of buyers:
8uyers are geographIcally concentrated. For example, shIppIng IndustrIes are
located on the east and west coasts of ÌndIa than In any other places.
J. 'arIabIe demand:
The nature of demand Is fluctuatIng because the demand Is basIcally a derIved
one. 8ased on the requIrements of the consumer markets, organIzatIons buy
the goods and make the fInIshed goods avaIlable In the market for fInal
consumptIon. Larger the consumer demand, larger wIll be the organIzatIonal
buyIng. For example, mobIles are beIng used by a large populatIon and so
cellular companIes have to meet thIs rIsIng demand.
4. IneIastIc demand:
The demand Is also InelastIc because organIzatIons cannot make rapId changes
In the productIon structure and so prIces remaIn constant In the short·term.
For example, Shoe manufacturers wIll not buy much leather If the prIce of
leather Is less neIther wIll they buy less leather If the prIce Increases.

5. SystematIc purchasIng:
The purchasIng actIvIty Is dIrectly between the buyer and supplIer organIzatIon
whIch means there are no or very few mIddlemen Involved. PurchasIng actIvIty
Is usually undertaken by purchase departments based on a proper structure and
through varIous mechanIsms lIke havIng purchase requIsItIons from other
sectIons, InvItIng tenders and sendIng InvoIces from the supplIers, purchasIng
agreements or contracts wIth the key supplIers, renewIng agreements etc. For
example, FelIance Fresh has regular contracts wIth the agrIcultural producers
for smooth supply of fresh fruIts and vegetables.
6. uItIpIe buyIng InfIuences:
there wIll be several partIes Involved In decIdIng about the purchases because
organIzatIons wIll have several departments and unIts functIonIng under It wIth
dIfferent requIrements. So, unless they have the proper resources to work wIth
there wIll be problems In the departments. For example, purchase department
In a HospItal must be aware about the specIfIc requIrements In the clInIcal
wards, operatIon theaters, labs, etc.
7. PecIprocatIon:
ThIs means that when an organIzatIon buys goods from another organIzatIon
then the supplIer organIzatIon also mIght need certaIn other goods that are
produced by the buyer organIzatIon. For example, a statIonery supplIer wIll
supply the necessary statIonerIes to the paper manufacturer who In turn
provIdes papers to the supplIer.
8. Lease agreements:
|ost organIzatIons take on lease the expensIve equIpments requIred by them
rather than buy It. So, In thIs way, they reduce cost, get better servIce and the
lessor or one who provIdes the equIpments wIll also profIt from the rent or
lease charges. For example, TATA provIdes the transport trucks to other
organIzatIons on lease.

The dIfferences stated above may not exactIng and water tIght dIvIsIons. Even In case
of a busIness makIng a purchase for a regular statIonary Item, the responsIble
employee may adopt an IndIvIdualIstIc and dIrect approach. SImIlarly IndustrIal
advertIsIng may be effectIve. The dIfferences lead to behavIor patterns whIch are also
dIfferent. As an example, emotIon plays a major role In a purchase decIsIon for an
IndIvIdual In a consumer market but wIll hardly come Into play In the busIness market.

Q.5 8) ist out tbe S importont requisites of on effective
seqmentotion by qivinq suitoble exomples.


To be useful, market segmentatIon must exhIbIt some characterIstIcs that are as

1. easurabIe and DbtaInabIe:
The sIze, profIle and other relevant characterIstIcs of the segment must be
measurable and obtaInable In terms of data. Ìf the InformatIon Is not
obtaInable, no segmentatIon can be carrIed out. For example, Census of ÌndIa
provIdes the data on mIgratIon and educatIon level, but does not specIfy how
many of the mIgrated employees are educated and If educated how many are
In whIte collared jobs. Ìf a company wants to target whIte color collared
employees who are mIgrated to partIcular cIty, It wIll not able to measure the

2. SubstantIaI:
The segment should be large enough to be profItable. For consumer markets,
the small segment mIght dIsproportIonably Increase the cost and hence
products are prIced too hIgh. For example, when the cellular servIces started In
ÌndIa cost of the IncomIng calls and outgoIng calls were charged at Fs
12/mInute. As the number of subscrIbers grew, IncomIng calls became free.
Further growth of subscrIbers resulted In lowerIng tarIffs for outgoIng calls to
the lowest level In the world.

J. ccessIbIe:
The segment should be accessIble through exIstIng network of people at an
affordable cost. For example, |ajorIty of the rural populatIon Is stIll not able
to access the Internet due to the hIgh cost and non·avaIlabIlIty of connectIons
and bandwIdth.

4. 0IfferentIabIe:
The segments should be dIfferent from each other and may requIre dIfferent
4Ps and programs. For example, LIfe Ìnsurance CorporatIon of ÌndIa needs
separate marketIng programs to sell theIr Insurance plans, unIt plans, pensIon
plans and group schemes

5. ctIonabIe:
The segments whIch a company wIshes to pursue must be actIonable In the
sense that there should be suffIcIent fInance, personnel, and capabIlIty to take
them all.

Q.ó) Fxploin briefly wbot ore tbe severol processes involveJ in
new proJuct Jevelopment.


New products are essentIal for exIstIng fIrms to keep the momentum and for new fIrms
they provIde the dIfferentIatIon. New product doesn't mean that It Is absolutely new
to the world. Ìt may be a modIfIcatIon, or offered In a new market, or dIfferentIated
from exIstIng products. Therefore It Is necessary to understand the concept of new

|eanIng of New Products:

%hey are reaIIy InnovatIve
For example, Coogle's rkut, a networkIng sIte whIch revolutIonIzed socIal
networkIng. Ìn thIs sIte people can meet lIke mInded people; they can form
theIr own groups, share photos, comments and many more.

ß %hey are very dIfferent from the others:
HaIer launches path·breakIng 4·0oor FefrIgerators fIrst tIme In ÌndIa

C %hey are ImItatIve;
These products are not new to the market but new to the company. For
example, CavIn Kare launched FuchI pIckles. ThIs product Is new to CavIn Kare
but not to the market.

New product deveIopment process:

Stage 1 - Idea generatIon:
New product Idea can be generated eIther from the Internal sources or external
sources. The Internal sources Include employees of the organIzatIon and data
collected from the market. The external source Includes customers, competItors and
supply chaIn members. For example, Ìngersoll Fand welcomes new Ideas from the
Ceneral publIc

Stage -Idea screenIng:
rganIzatIon may have varIous Ideas but It should fInd out whIch of these Ideas can be
translated Into concepts. Ìn an IntervIew to TImes of ÌndIa, |r. Fatan Tata, chaIrman
TATA group dIscussed how hIs Idea saw many changes from the basIc versIon. He told
that he wanted to develop car wIth scooter engIne, plastIc doors etc... 8ut when he
unveIled the car, there were many changes In the product. ThIs shows that InItIal Idea
wIll be changed on the basIs of market requIrements.

Stage - Concept deveIopment:
the maIn feature or the specIfIc desIre that It caters to or the basIc appeal of the
product Is created or desIgned In the concept development.
Concepts used for Tata Nano car are ·

Concept Ì: Low·end 'rural car,' probably wIthout doors or wIndows and wIth plastIc
curtaIns that rolled down, a four·wheel versIon of the auto·rIckshaw

Concept ÌÌ: A car made by engIneerIng plastIcs and new materIals, and usIng new
technology lIke aerospace adhesIves Instead of weldIng.
Concept ÌÌÌ: ÌndIgenous, In·house car whIch meets all the envIronment standards

Stage 4 - Concept testIng:
At thIs stage concept Is tested wIth the group of target customers. Ìf any changes are
requIred In the concept or the message It wIll be done durIng thIs stage. Also the
effectIveness Is tested on a mInor scale. Ìf the concept meets the specIfIc
requIrements, then It wIll be accepted.

Stage arketIng strategy deveIopment:
The marketIng strategy development Involves three parts. The fIrst part focuses on
target market, sales, market share and profIt goals. TATA's InItIal busIness plan
consIsted sales of 2 lakhs cars per annum. The second part Involves product prIce,
dIstrIbutIon and marketIng budget strategIes. TATA's fIxed Fs 1 lakhs as the car prIce,
and fIndIng self employed persons who work lIke agent to dIstrIbute the cars. The fInal
part contaIns marketIng mIx strategy and profIt goals.

Stage - ßusIness anaIysIs:
It Is the analysIs of sales, costs and profIts estImated for a new product and to fInd out
whether these alIgn wIth the company mIssIon and objectIves.

Stage 7 - Product deveIopment:
durIng thIs stage, product Is made to undergo further Improvements, new features or
ImprovIsed versIons are added to the product. There Is also scope for InnovatIon and
usIng the latest technology Into the product.

%% Nano car deveIopment (Source: busIness worId nanoIutIon
- TrIed to outsource the product from all over the world.
- 0evelopment of 'mule' or prototype wIth 20bhp.
- 0esIgnIng the small engIne
- ThermodynamIc sImulatIons and fInal engIne
- 0evelopment of |PFÌ wIth help of 8osch.
- Cost reductIon and negotIatIng wIth vendors.
- Sona Koyo and Fane Croup came up wIth hollow steerIng shafts, savIng cost and
cuttIng weIght. Sharda |otors and Emcon desIgned the exhaust system and |FF
tweaked the tyres to bear extra weIght on rear wheels.

Stage 8 - %est marketIng:
Is the most crucIal stage for the testIng product's performance and Its future In the
market. There are certaIn cases where product has faIled In the test marketIng and
had to be wIthdrawn.
- The product Is Introduced Into the realIstIc market
- The 4P's of marketIng are tested.
- The cost of test marketIng varIes wIth the type of product.

Stage º - CommercIaIIzatIon:
Ìn thIs stage product Is completely placed In the open market and aggressIve
communIcatIon program accompanIed wIth promotIon actIvItIes Is carrIed out to
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