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Q.1 What is Marketing Information System? Explain its characteristics, benefits and information types. Ans. A Marketing Information System can be defined as ‘a system in which marketing information is formally gathered, stored, analysed and distributed to managers in accord with their informational needs on a regular basis’. Set of procedures and practices employed in analyzing and assessing marketing information, gathered continuously from sources inside and outside of a firm. Timely marketing information provides basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion. Characteristics of MIS Philip Kotler defines MIS as “a system that consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers. Its characteristics are as follows: 1. It is a planned system developed to facilitate smooth and continuous flow of information. 2. It provides pertinent information, collected from sources both internal and external to the company, for use as the basis of marketing decision making. 3. It provides right information at the right time to the right person. A well designed MIS serves as a company’s nerve centre, continuously monitoring the market environment both inside and outside the organization. In the process, it collects lot of data and stores in the form of a database which is maintained in an organized manner. Marketers classify and analyze this data from the database as needed. Benefits of MIS(Marketing Information System)
Various benefits of having a MIS and resultant flow of marketing information are given below: 1. It allows marketing managers to carry out their analysis, planning implementation and control responsibilities more effectively. 2. It ensures effective tapping of marketing opportunities and enables the company to develop effective safeguard against emerging marketing threats. 3. It provides marketing intelligence to the firm and helps in early spotting of changing trends. 4. It helps the firm adapt its products and services to the needs and tastes of the customers. 5. By providing quality marketing information to the decision maker, MIS helps in improving the quality of decision making. Types of Marketing Information A Marketing Information System supplies three types of information. 1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly, quarterly, or annual interval. This includes data such as sales, Market Share, sales call reports, inventory levels, payables, and receivables etc. which are made available regularly. Information on customer awareness of company’s brands, advertising campaigns and similar data on close competitors can also be provided. 2. Monitoring Information is the data obtained from regular scanning of certain sources such as trade journals and other publications. Here relevant data from external environment is captured to monitor changes and trends related to marketing situation. Data about competitors can also be part of this category. Some of these data can be purchased at a price from commercial sources such as Market Research agencies or from Government sources. 3. Problem related or customized information is developed in response to some specific requirement related to a marketing problem or any particular data requested by a manager. Primary Data or Secondary Data (or both) are collected through survey Research in response to specific need. For example, if the company has developed a new product, the marketing manager may want to find out the opinion of the target customers before launching the product in the market. Such data is generated by conducting a market research study with adequate sample size, and the findings obtained are used to help decide whether the product is accepted and can be launched. Q.2 a. Examine how a firm’s macro environment operates.
b. Mention the key points in Psychoanalytic model of consumer behaviour. Ans. The term micro-environment denotes those elements over which the marketing firm has control or which it can use in order to gain information that will better help it in its marketing operations. In other words, these are elements that can be manipulated, or used to glean information, in order to provide fuller satisfaction to the company’s customers. The objective of marketing philosophy is to make profits through satisfying customers. This is accomplished through the manipulation of the variables over which a company has control in such a way as to optimise this objective. The variables are what Neil Borden has termed ‘the marketing mix’ which is a combination of all the ‘ingredients’ in a ‘recipe’ that is designed to prove most attractive to customers. In this case the ingredients are individual elements that marketing can manipulate into the most appropriate mix. E Jerome McCarthy further dubbed the variables that the company can control in order to reach its target market the ‘four Ps’. Each of these is discussed in detail in later chapters, but a brief discussion now follows upon each of these elements of the marketing mix together with an explanation of how they fit into the overall notion of marketing. A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:
• • • •
Political Economic Social Technological
The acronym PEST (or sometimes rearranged as “STEP”) is used to describe a framework for the analysis of these macroenvironmental factors. A PEST analysis fits into an overall environmental scan as shown in the following diagram: Environmental Scan / \ External Analysis Internal Analysis /\ Macroenvironment Microenvironment | P.E.S.T. Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:
• • • •
tax policy employment laws environmental regulations trade restrictions and tariffs
The buyer has a private world with all his hidden fears. His buying action can be influenced by appealing to these desires and longings.• political stability Economic Factors Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. Some social factors include: • • • • • health consciousness population growth rate age distribution career attitudes emphasis on safety Technological Factors Technological factors can lower barriers to entry. Freud introduced personality as a motivating force in human behavior. The psychoanalytical theory is attributed to the work of eminent psychologist Sigmund Freud. suppressed desires and totally subjective longings. The Psychoanalytical Model: The psychoanalytical model draws from Freudian Psychology. reduce minimum efficient production levels. the individual consumer has a complex set of deep-seated motives which drive him towards certain buying decisions. According to this model. and influence outsourcing decisions. . Some technological factors include: • • • • R&D activity automation technology incentives rate of technological change External Opportunities and Threats The PEST factors combined with external micro environmental factors can be classified as opportunities and threats in a SWOT analysis. The following are examples of factors in the macroeconomy: • • • • economic growth interest rates exchange rates inflation rate Social Factors Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets.
3. Its processes are entirely conscious because it is concerned with the perception of the outside world. Francesco Nicosia. The Sociological Model: According to the sociological model. an expert in consumer motivation and behavior put forward his model of buyer behavior in 1966. The basic theme of the theory is the belief that a person is unable to satisfy all his needs within the bounds of society. Depending on the situation. The Nicosia Model groups these activities into four basic fields. If this process results in a motivation to buy. the conscience. Such repressed tension is always said to exist in the subconscious and continues to influence consumer behavior. Consequently. a certain attribute may develop. it becomes the input for Field Three. The id or the instinctive. pleasure seeking element. 5. 4. follow and fit in with his immediate environment. it may result in a decision to buy. Both of them belong to the category called the systems model. The Nicosia model and the Howard and Sheth model are two important models in this category. . 1. the mental framework of a human being is composed of three elements. It develops out of the id. It may lead to a search for the product or an evaluation of the product. An advertising message from the firm reaches the consumer’s attributes. The Nicosia Model: In recent years. It includes the aggressive. The model tries to establish the linkages between a firm and its consumer – how the activities of the firm influence the consumer and result in his decision to buy. His buying decisions are not totally governed by utility; He has a desire to emulate. Field one has two subfields the firm’s attributes and the consumer’s attributes. 2. and this becomes the input for Field Two. If these steps have a positive impact on him. The messages from the firm first influence the predisposition of the consumer towards the product. The ego or the control device that maintains a balance between the id and the superego. It is the reservoir of the instinctive impulses that a man is born with and whose processes are entirely subconscious. And Field Four consists of the use of the purchased item. It is the most superficial portion of the id.According to this theory. some efforts have been made by marketing scholars to build buyer behavior models totally from the marketing man’s standpoint. namely. The superego or the internal filter that presents to the individual the behavioral expectations of society. It is modified by the influence of the outside world. dominates the ego and represents the inhibitions of instinct which is characteristic of man. he develops a certain attitude towards the product. Field Three consists of the act of purchase. Field Two is the area of search and evaluation of the advertised product and other alternatives. It represents the moral and ethical elements. destructive and sexual impulses of man. This is the sum and substance of the ‘activity explanations’ in the Nicosia Model. the individual buyer is influenced by society or intimate groups as well as social classes. Depending on the way the message is received by the consumer. where the human being is analyzed as a system with stimuli as the input to the system and behavior as the output of the system. such unsatisfied needs create tension within an individual which have to be repressed.
1986).3 Explain the key roles played and various steps involved in organizational buying. The basic five phase model can be extended to eight; purchase initiation; evaluations criteria formation; information search; supplier definition for RFQ; evaluation of quotations; negotiations; suppliers choice; and choice implementation (Matbuy. Point 3 – The buying centre.e. types of buying situations and situational factors. the relationship with the supplier. the increasing power enjoyed by purchasing departments and the importance given to developing partnerships with suppliers. Point 6 – Purchasing Strategy. buyer influencer. The need for an understanding of the organizational buying process has grown in recent years due to the many competitive challenges presented in business-to-business markets. Point 4 – Risk and uncertainty – The driving forces of organizational buying behaviour. Point 2 – The organizational buying behaviour process. the user. Point 1 – Introduction. Since 1980 there have been a number ofkey changes in this area. The Matbuy model encourages marketers to focus their efforts on who is making what decisions based on which criteria. and the decisions made in each phase. . and his position vis-avis the supply market. including the growth of outsourcing. Ans.Q. these are. i. This is concerned with the role of risk or uncertainty on buying behaviour. the members involved. The organizational buying behaviour process is well documented with many models depicting the various phases. The buying centre consists of those people in the organizational who are involved directly or indirectly in the buying process. The level of risk depends upon the characteristics of the buying situation faced. The supplier can influence the degree of perceived uncertainty by the buyer and cause certain desired behavioural reactions by the use of information and the implementation of certain actions. The risks perceived by the customer can result from a combination of the characteristics of various factors: the transaction involved. The buyers in the process are subject to a wide variety and complexity of buying motives and rules of selection. geographical and cultural factors and time factors. decider and gatekeeper to who the role of ‘initiator’ has also been added. Point 5 – Factors influencing organizational buying behaviour. Three key factors are shown to influence organizational buying behaviour.
a company will develop different relationships with suppliers depending upon the number of suppliers. customer concept; and societal concept. an understanding of the key factors are fundamental to marketing strategy and thus an organization’s ability to compete effectively in the market place.The purchasing function is of great importance because its actions will impact directly on the organization’s profitability. This philosophy makes sense in developing countries. Marketing is a societal process by which individuals and groups obtain what they need and want through creating. however. selling concept. It is also used when a company wants to expand the market. the supplier’s share. marketing concept. offering and freely exchanging products and services of value with others. Actions can be taken to influence the supply market. promotion and distribution of ideas. characteristics of selected suppliers. Classification is along two dimensions: importance of items purchased and characteristics of the supply market. Two activities which will be crucial to the future development of organizational buying behaviour will be information technology and production technologies. where consumers are more interested in obtaining the product than its features. goods and services to create exchanges that satisfy individual and organizational goods” There are six competing philosophies under which organizations conduct marketing activities “the production concept. The company will adapt its procedures to the type of items purchased which in turn will influence relationships with suppliers. Based on the type of items purchased and on its position in the buying matrix. Point 7 – The future. product concept. Managers of production-oriented businesses concentrate on achieving high production efficiency. Q. Organizational buying behaviour is a very complex area. . Ans. According to the American Marketing Association. They assume that consumers are primarily interested in products availability and low prices. 1) The Production Concept: The production concept is one of the oldest concepts in business. The degree of centralization of buying activities and the missions and status of the buying function can help support purchasing strategy.4 Explain the different marketing philosophies and its approach. and the nature of customer-supplier relationships. Point 8 – Conclusion. pricing. low costs and mass distribution. “Marketing is the process of planning and executing the conception. Purchasing strategy aims to evaluate and classify the various items purchased in order to be able to choose and manage suppliers accordingly. The production concept holds that consumers will prefer products that are widely available and inexpensive.
Their aim is to sell what they make rather then make what market wants. psychographics and media and distribution preferences. customer needs. They assume that buyers admire wellmade products and can evaluate quality and performance product oriented companies often trust that their engineers can design exceptional products. 6. integrated marketing and profitability. delivering and communicating superior customer value to its chosen target markets. wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well being. 3. . They hope to achieve profitable growth through capturing a larger share of each customer’s expenditures by building high customer loyalty and focusing on customer lifetime value. The ability of a company to deal with customers are at a time become practical as a result of advances in factory customization. The product Concept – Product concept holds that consumer will favour these products that offer the most quality. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the ideas of satisfying the needs of the customers by means of the product and the whole cluster of things associated with creating. and very often they will not even examine competitor’s products. performance and innovative features. The Societal Marketing Concept: The societal marketing concept holds that the organization’s goal is to determine the needs. The marketing concept rests on four pillars: target market. delivering and finally consuming it. therefore. This concept assumes that consumers typically show buying inertia or resistance and must be coaxed into buying. They get little or no customer input.2. computers. companies shape separate offers. The Marketing Concept: The marketing concepts hold that the key to achieving its organizational goals consists of the company being more effective then competitors in creating. undertakes an aggressive selling and promotion effort. services and messages to individual customers. the internet and database marketing software. The Selling Concept: The selling concept holds that consumers and businesses. if left alone. There is a contrast between selling and marketing concepts: “Selling focuses on the needs of the seller; marketing on the needs of the buyer”. The customer Concept: Under customer concept. The selling concept is epitomized by the thinking that “The purpose of marketing is to sell more stuff to more people for more money in order to make more profit Most firms practice the selling concept when they have over capacity. These companies collect information on each customer’s past transactions. It also assumes that the company has a whole battery of effective selling and promotion tools to stimulate more buying. Managers in these organizations focus on making superior products and improving them over time. will ordinarily not buy enough of the organization’s products. 5. 4. demographics. The organization most.
Information search– o Internal search. see a commercial for a new pair of shoes. increase customer loyalty. Deficit in assortment of products. Companies see cause-related marketing as an opportunity to enhance their corporate reputation. o o o o . Can be stimulated by the marketer through product information–did not know you were deficient? I. Q. All consumer decisions do not always include all 6 stages. Stages of the Consumer Buying Process Six Stages to the Consumer Buying Decision Process (For complex decisions). stimulates your recognition that you need a new pair of shoes. Hunger stimulates your need to eat. Hunger–Food. Ans. build sales and increase press coverage. 2. Hungry. Friends and relatives (word of mouth). Evaluation of Alternatives–need to establish criteria for evaluation.. determined by the degree of complexity…discussed next. explain the adoption process. Problem Recognition(awareness of need)–difference between the desired state and the actual condition. A successful information search leaves a buyer with possible alternatives.E.The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. o External search if you need more information. consumer want satisfaction and public interest. want to go out and eat. features the buyer wants or does not want. The 6 stages are: 1. Marketer dominated sources; comparison shopping; public sources etc. They believe that consumers will increasingly look for signs of good corporate citizenship that go beyond supplying rational and emotional benefits. Actual purchasing is only one stage of the process. raise brand awareness. Rank/weight alternatives or resume search. They must balance and juggle the often-conflicting criteria of company profits. evoked set is 1. May decide that you want to eat something spicy. chinese food indian food burger king klondike kates etc 2. memory. the evoked set. Not all decision processes lead to a purchase. 5 What are the various stages involved in decision process when a consumer is buying new product? Also. indian gets highest rank etc.
but it is an innovation to the person who sees it as new. Q. The idea may have a long History. Cognitive Dissonance. Post-Purchase Evaluation–outcome: Satisfaction or Dissatisfaction. . many heavy users are loyal to existing brands. The Innovation diffusion process is defined as â€œthe spread of a new idea from its source of invention or creation to its ultimate users or adopters. Trial: The consumer tries the innovation to improve his or her estimate of its value. 6 Explain briefly the marketing mix elements for an automobile company giving sufficient examples. The theory of innovation diffusion and consumer adoption helps marketers identify early adopters. and adopt or reject them? The consumer adoption process is later followed by the consumer loyalty process. service. and it involved many wasted exposures. Innovations take time to spread through the social system. try them. 2. Evaluation: The consumer considers whether to try the innovation 4. may think that really you wanted a chinese meal instead. heavy user target marketing. method of purchase etc. How do potential customers learn about new products. New product marketers now aim at consumers who are early adopters. Years ago. 5. product availability. These drawbacks led to a second approach. which is the concern of the established producer. Interest : The consumer is stimulated to seek information about the innovation. have you made the right decision. 3. after sales communication etc. This can be reduced by warranties. 1. 2. Information from different sources may be treated differently. Can you think of another restaurant? Look in the yellow pages etc. This approach makes sense. or idea that is perceived by someone as new. Adoption : The consumer decides to make full and regular use of the innovation. time lapse between 4 & 5. includes product.If not satisfied with your choice then return to the search phase. 3. Awareness : The consumer becomes aware of the innovation but lacks information about it. provided that heavy users are identifiable and are early adopters. Adoption Process Adoption is an individualâ€™s decision to become a regular user of a product. An innovation is any good. Adopters of new products have been observed to move through five stages: 1. even within the heavy user group. package. Marketers try to influence by “framing” alternatives. The consumer adoption process is the mental process through which an individual passes from first hearing about an innovation to final adoption. new product marketers used a mass market approach to launch products. After eating an indian meal. store. This approach had two main drawbacks: It called for heavy marketing expenditures. Purchase decision–Choose buying alternative. Purchase–May differ from decision. However.
services. Marketing mix is the combination of elements that you will use to market your product.Ans. -The safety: It does not concern fun board but it matters very much for products used by kids. In general. In food business. Place 4. It means that brainstorming is ended and that you have to go to the specifics in examining and checking all the hypothesis you had made in the preceding chapters. Promotion 6. Do it yourself 8. time payments and financial and insurance services linked to the product . Price and Promotion. Coaching 1-CHALLENGE You have gotten a rough idea about the market situation and the possible positioning of your product. products often differ only by packaging. The objectives of this lesson about marketing mix is to give you: -The tools you need for establishing your detailed marketing plan and forecasting your sales. -The packaging: It must provides a better appearance and a convenient use. You have then to differentiate your product with design. Of course. -The “green”: A friendly product to environment gets an advantage among some segments. In business to business and for expensive items. There are four elements: Product. They are called the four Ps of the marketing mix. price is replaced by cost to the user. you must write your detailed planning. Challenge 2. return policy. packaging. Sales strategy 7. 2-PRODUCT A good product makes its marketing by itself because it gives benefits to the customer. same quality. warranties. Now. Place. It looks like a joke but the Cs is more customeroriented. return and so on. same price. Price 5. features. it’s far to be sufficient. promotion becomes communication. You will use the marketing mix. a fun board must offer a good and fashionable design adapted to young people. differentiation is mainly related to: -The design: it can be a decisive advantage but it changes with fads. We can expect that you have right now a clear idea about the benefits your product can offer. Product 3. maintenance service. Suppose now that the competitors products offer the same benefits. Some people think that the four Ps are old fashionable and propose a new paradigm: The four Cs! Product becomes customer needs; Place becomes convenience. the best mean of differentiation are warranties. 1. For example.
It is said that a person must be exposed seven times to the message before to be aware of it. As promotion is closely linked to the sales. In fact. . Frequency is the number of time a person is exposed to your message. -Definition: The function of promotion is to affect the customer behavior in order to close a sale. you have to look for a distribution channel in order to reach your customer. yellow pages. newspapers. You have to evaluate it before any advertisement campaign. and sales promotions. Knowing this place. -Definition: The place is where you can expect to find your customer and consequently. Reach*frequency gives the gross rating point. where the sale is realized. Of course. You have already fixed. The question ” how to reach the customer” must always be in your mind. Do not be foolish: They know better the market than you and you have to listen their advices. public relations. if you advertise on radio you must know how many people belonging to your segment can be affected. internet. Promotion includes mainly three topics: advertisement. instead of “place” it would be better to use the word “distribution” but the MBA lingo uses “place” to memorize the 4 Ps of the marketing mix! 4-PRICE Price means the pricing strategy you will use. packaging becomes a fifth P. -Advertisement: It takes many forms: TV. Sometimes. 5-PROMOTION Advertising. it must be consistent with the buying process described in the consumer analysis.3-PLACE-DISTRIBUTION A crucial decision in any marketing mix is to correctly identify the distribution channels. I will mention here the most common features about the sale strategy. You have to take notice about three important notions: Reach is the percentage of the target market which is affected by your advertisement. as an hypothesis a customer price fitted to your customer profile but you will have now to bargain it with the wholesalers and retailers. public relations and so on are included in promotion and consequently in the 4Ps. For example. radio. and so on.
fraternal organizations. it is called a creative. -Public relations: Public relations are more subtle and rely mainly on your own personality. beating competition and bringing money. futurology to several organizations (civic groups. capture interest. Anyway. making deals. SET-2 . the message must: get attraction.Message: Sometimes. For example. professional associations) 6-SALES STRATEGY Sales bring in the money. political groups. create desire and finally require action that is to say close the sale. Down-earth-advice: There are some magical words that you can use in any message: -Your-You–I-Me-My–Now-Today -Fast-Easy-Cool-New-Fun-Updated-Free-Exciting-Astonishing -Success-Love-Money-Comfort-Protection-Freedom-Luck. Salesmen are directly exposed to the pressure of finding prospects. geo-economics. you can deliver public speeches on subjects such as economics.
gauging the effects of adding or deleting a product line in relationship to other lines in the product mix; and 6. Product-line decisions are concerned with the combination of individual products offered within a given line.reviewing the mix of existing product lines; 2. Management of the companies' product mix is the responsibility of top management.Q. The product-line manager supervises several product managers who are responsible for individual products in the line. It is extremely important for any organization to have a well-managed product mix. and may result in lower levels of customer service.determining the appropriate emphasis on internal development versus external acquisition in the product mix; 5. Most organizations break down managing the product mix. and management strategies that position the company as a specialty.determining the relative emphasis on new versus existing product lines in the mix; 4. Instances where the product mix varies widely from period to period often requires more investment in facilities and inventory. Strategies involved in product mix and product line Product-mix decisions are concerned with the combination of product lines offered by the company. and actual product into three different levels. product line.adding new lines to and deleting existing lines from the product mix; 3. The mix is defined by the industry and manufacturing environment.forecasting the effects of future external change on the company's product mix. Some basic product-mix decisions include: 1. Decisions about a product line are usually incorporated into a marketing plan at the divisional level. .1 What is product mix? What are the strategies involved in product mix and product line? (10 marks) Answer Product mix The number of individual products produced or sold by an organization. niche or broad-based supplier of goods and services.
Decisions at the first level of product management involve the marketing mix for an individual brand/product. Generally. and the payments generated by them that flow in the opposite direction (from consumer to the vendor). Decisions regarding the marketing mix for a brand are represented in the product's marketing plan. coupons.considering expansion of a given product line; 2.evaluating the effects of product additions and deletions on the profitability of other items in the line; and 4. advertising and promotional expenditures.Such a plan specifies changes in the product lines and allocations to products in each line. (10 marks) Answer Distribution channel A path through which goods and services flow in one direction (from vendor to the consumer). A marketing channel can be as short as being direct from the vendor to the . product characteristics. and recommended distribution strategy Managing the product mix for a company is very demanding and requires constant attention.considering candidates for deletion from the product line; 3. advertising expenditures for the coming year. trade discounts. Q. product-line managers have the following responsibilities: 1.allocating resources to individual products in the line on the basis of marketing strategies recommended by product managers.2 What is a distribution channel? Explain the factors to be considered while setting up a distribution channel. The plan for an existing product would focus on any changes in the marketing strategy. and a five-year statement of projected sales and earnings. The plan for a new brand would specify price level. distribution facilities. Top management must provide accurate and timely analysis (BCG) of their company's product mix so the appropriate adjustments can be made to the product line and individual products. These decisions are the responsibility of a brand manager (sometimes called a product manager). Some of these changes might include the product's target market. price level.
type of the product is perishable. existing channel for comparable product. It may include the buying pattern of consumer. type of product . weight and bulk and it also depends on the company's resources. agents. Distribution is also a very important component of Logistics & Supply chain management. or auto mobile. This process is known as the 'distribution chain' or the 'channel. Also called channel of distribution or marketing channel. Factors to be considered for setting up Distribution channel The selection of distribution is affected by many of factors.Perishable products should have a short distribution channel.' Each of the elements in these chains will have their own specific needs.Distribution to consumer market or industrial markets would be different channel structures. along with those of the allimportant end-user. intensive distribution channel. before it finally reaches the consumer or end-user.If company objective is to have mass appeal and rapid market penetration. each passing the product down the chain to the next organization. retailers.consumer or may include several interconnected intermediaries such as wholesalers. supplier to retailer. FMCG goods should have a wide reaching. nature and extent of market. It can be factory to supplier. The main affecting factors are following.Channels may not be available and other factors like Customer Characteristics Product Attributes Type of Organization Competition . It is defined as a chain of intermediaries. which play significant role while choosing the channel for distribution. Organization objectives .Understanding consumer needs and criteria for buying Channel Availability .company may chose it's existing channel of distribution for relative product. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. or retailer to end customer.. Distribution in supply chain management refers to the distribution of a good from one business to another. buying habit of customers. which the producer must take into account. distributors.
Retailer (also called dealer or reseller). For example. links now exist between airlines. who sells to retailers. For example. Channel strategy Gravity & adventure Push and Pull strategy Product (or service) Cost Consumer location Managerial concerns . There have also been some innovations in the distribution of services. there has been an increase in franchising and in rental services . with services linking together. In addition. tour operators. hotels and car rental services. since both direct and indirect channels may be used. Channel decisions Channel Sales is nothing but a chain for to market a product through different sources.the latter offering anything from televisions through tools. tourist boards. for example. Hotels.Marketing Environmental Forces and Characteristics of Intermediaries Channels A number of alternate 'channels' of distribution may be available: Distributor. etc. airlines. process of transfer the products or services from Producer to Customer or end user. may sell their services (typically rooms) directly or through travel agents. There has also been some evidence of service integration. centralized reservation systems. particularly in the travel and tourism sectors. who sells to end customers Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alice from producer to consumer in certain sectors. there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.
in the context of development. In theory at least. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and.The channel decision is very important. When we refer to development communication. we refer to various types of communication like interpersonal. their job should really be extended to managing all the processes involved in that chain. Here we use different types of messages to change the socio-economic condition of people. except by mail order. These messages are designed to transform the behaviour of people or for improving their quality of life. It is about changing for the better. Indeed. there is a form of tradeoff: the cost of using intermediaries to achieve wider distribution is supposedly lower. into the beginning of the distribution chain. This may involve a number of decisions on the part of the supplier: Channel membership Channel motivation Monitoring and managing channels Q. . (10 marks) Answer In ‘development communication’. if they have any aspirations to be market-oriented. group and mass communication. their job is finished. Communication is a message understood or sharing of experience. Many suppliers seem to assume that once their product has been sold into the channel. most consumer goods manufacturers could never justify the cost of selling direct to their consumers. It is about using communication to change or improve something.3 Discuss the communication development process with examples.It is not easy to define this as it depends on the context. Therefore. it is about such communication that can be used for development. Development. you see that there are two words-‘development’ and ‘communication’. It could be about social or economic change for improvement or progress. Those who write or produce programmes on issues related to development are called development communicators. development communication can be defined as the use of communication to promote development. Development is about change. until the product or service arrives with the enduser. When we refer to communication.
DEVELOPMENT COMMUNICATION USING VARIOUS MEDIA The history of development communication in India can be traced to rural radio broadcasts in the 1940s in different languages.Role of a development communicator The development communicator plays a very significant role in explaining the development process to the common people in such a way that it finds acceptance. There would also be programmes on related fields. They wrote on various government development programmes and how the people could make use of them. availability of improved seeds and implements. officials and farmers. market rates.In fact. In order to achieve this objective a development communicator: has to understand the process of development and communication; should possess knowledge in professional techniques and should know the audience; prepare and distribute development messages to millions of people in such a way that they are received and understood. when India used satellites for telecasting television programmes in what is known as SITE (Satellite Instructional Television Experiment). As far as the print media is concerned. During the 1950s. . Bihar. Have you ever heard a rural programme on radio? If you come from a rural area. the government started huge developmental programmes throughout the country. Many of you might have seen the ‘Krishi Darshan’ programme on Doordarshan. when Doordarshan started on 15th September 1959. Karnataka. folk songs and information about weather. the programmes on education and development were made available to 2400 villages in the states of Andhra Pradesh. Later in 1975. Madhya Pradesh. People who present these programmes speak in a language or dialect that the people in your area speak. Orissa and Rajasthan. it was the newspapers which gave great importance to development themes. This identity will help in bringing human resources together for the total welfare of the individual and the community at large. after Independence when the Five Year Plans were initiated by the government for planned development. The programmes may be about farming and related subjects. accepted and applied. you probably would have heard. If they accept this challenge they will be able to get the people to identify themselves as part of a society and a nation. The programme may comprise of interviews with experts. it was concentrating only on programmes on agriculture.
hygiene and water and sanitation. be simplified so that ordinary people can benefit? One option has been the use of comics. How can people be taught new skills at a low cost? What would be a good way to deal with sensitive topics such as health issues? How can complicated new research. these comics should be created locally. But. Tamilnadu. cleanliness. For example. So. the electronic media – radio and television especially All India Radio and Doordarshan have spread messages on development as the main part of their broadcasts. in order to achieve the desired results. Rajasthan. readers find them closer to their day-to-day lives. amongst all the media that are used for development communication. they are told about “balanced nutrition” . are enacted. female construction workers and their children are taught how to read and write. The content for the skits is drawn from the audience’s life. However. But what are ‘comics’ ? You must have all at some point of time read a comic. and the North East to provide training to rural communicators to enable them to use comics in development communication. groups of volunteers use street theatre as a medium for development communication. This is done through humorous skits and plays through which the importance of literacy. The important thing about comics is that they are made by people on their own issues in their own language. They need to be educated about the values of balanced nutrition. hygiene etc. an ailment common among construction workers. like that in agriculture for example. You may have seen construction workers cooking their meal of dal and rice over open fires in front of their tents set up temporarily on the roadside.If the print media have contributed to development communication. In various parts of India. Programmes are organized in the remote areas of Jharkhand. This means supplementing their staple diet of dal and rice with green leafy vegetables known to cure night blindness. Information on sensitive health issues such as HIV/AIDS has been communicated . problems in communicating a message in an effective way has been a matter of concern to development workers. traditional media are the closest to people who need messages of development like the farmers and workers. Similarly. Comics involve story telling using visuals which must follow local ideas and culture in order to be understood correctly by people. However. Such forms of media are participatory and effective.
S. Journalists for Human Rights. and the DR Congo. In spite of the 1997 Ottawa Treaty which attempts to ban land mines they continue to kill or injure 20. But the Forums also dealt with social and economic issues. Sierra Leone. At first this was a response to the Great Depression and the need for increased food production in World War II. and additional programs on a country by country basis.C. Since 2002. The comic books are in Albanian and feature Superman and Wonder Woman. you must understand that development communication using various media is possible only with the active involvement of the following: (i) Development agencies like departments of agriculture. jhr works directly with journalists. However.000 comic books to children affected by the Kosovo War. The comic books instruct children not to touch the anti-personnel mines and not to move. a Canadian based NGO. This model of adult education or distance education was later adopted in India and Ghana. Liberia. The aim is to teach children what to do when they find an unexploded land mine left over from Kosovo's civil war. There were also printed materials and prepared questions to encourage group discussion.throught the medium of comics in several states. providing monthly workshops. but instead to call an adult for help. (ii) Voluntary organizations (iii) Concerned citizens (iv) Non governmental organizations (NGOs) Examples One of the first examples of development communication was Farm Radio Forums in Canada. In 1999 the U.000 civilians each year around the world. Comics planned to distribute 600. student sessions. on the job training. has operated long term projects in Ghana. Government and D. From 1941 to 1965 farmers met in groups each week to listen to special radio programs. .
Nokia's dominance continued into the first few years of the 2000s. To appreciate the importance of innovation in a dynamic and volatile industry. Nokia overtook then leader Motorola to emerge as a behemoth in the global mobile phone industry. Select any mobile handset and mobile company and then evaluate its positioning strengths or weakness in terms of attributes. Issues: To understand the difficulties faced by an erstwhile giant in the global mobile phone industry in 2003-2004. The case concludes with an analysis of the challenges the company faced in the future and the various options ahead of it. It also discusses the efforts Nokia made to recover its market once it realized that its performance was slipping.4. including the company's tardiness in introducing the clamshell phones that had become very popular and its resistance to manufacturing operator specific handsets.Q. (10 marks) Answer Abstract In the late 1990s. And if we . This case study discusses the various problems Nokia faced in 2003-2004. values. when smaller Asian vendors started making their presence felt with better products at lower prices. The company's problems also had internal causes and analysts said one of the reasons could be that it had become too complacent with its success and lost its agility in reading and responding to market signals. but it suddenly came under threat in 2003-2004. To analyze the effect of changing market conditions on companies. brand name and brand equity. benefits. To appreciate the importance of keeping abreast with changing market conditions and adapting to them speedily. To examine future challenges that the company faced and the various options available to it We want to be the company that brings this industry to the next phase.
The company. in 2005.Jorma Ollila.have a little bit of a bump in the road in 2004. ." Jack Gold. in mid 2004. and they were stodgy. declared that the company was poised to recover in 2005. and aggressively promoted products with a view to increasing its market share. Ollila's prediction came true when the company announced better than expected results for the first quarter of 2005. and they didn't push them. However. They didn't really do flip phones; they were a little late with cameras. The company announced satisfactory results for the fourth quarter of 2004 and market share for the year 2004 also stabilized at 32 percent by the end of the year. Nokia's CEO. The company put up a tough fight over the second half of 2004 to recapture its lost position in the market.65 billion. Nokia's sales increased 17 percent over the corresponding quarter of the previous year to $9. modified designs. with sales and earnings falling below expected levels. ending March 31. CEO of Nokia. Coolness in the consumer space is a big deal." . Jorma Ollila (Ollila). had run into rough weather in 2003-2004. a Connecticut-based technology consulting firm. which had emerged as an industry leader in the late 1990s.1 "Nokia didn't have the coolness factor. that's immaterial. So much so that when the company announced poor results in the first quarter of 2004. which had fallen to a low of around 28 percent in early 2004 from an average of 35 percent over the previous three years.2 Positive Signs The announcement of Nokia Corporation's (Nokia) quarterly results in April 2005 was a much awaited event as far as the global mobile phone industry was concerned. while acknowledging that 2004 had been a challenging year. In the first quarter of 2005. several analysts declared that it was the beginning of the end of Nokia's dominance in the industry. Nokia's efforts started paying off by late 2004. It introduced several new models. vice president of Meta Group. Nokia was not ready to throw in the towel quite so easily.
The original Nokia was a forest industry enterprise that primarily manufactured paper. Nokia's company history goes back to the 1800s. "Nokia's result was definitely better than expected. cable and electronics.E. By 1980. several analysts wondered whether Nokia would ever be able to dominate the industry as it did in the late 1990s and the first two years of the new century. despite these positive signs. an engineer. Excerpts The Rise to the Top Nokia drew on its experience of setting up Nordic cellular networks (which were more advanced than those used by Japan.forestry. who was a mining engineer. In 1898. said. Konstantin Wikstrom.Net profit rose 18 percent to $1. Global handset sales rose 11 percent."3 However. an analyst at securities firm FIM Securities. Carl Henrik Lampen.Commenting on Nokia's improved performance. prompting Nokia to increase its estimate of the size of the global handset market in 2005 by 100 million to 740 million. (FRW) to manufacture rubber and associated chemicals.1 billion. Segerberg. and it shows that it's a growth company again. Nokia became one of the most . set up the Finnish Cable Works (FCW) to manufacture electrical cables for lighting purposes. The company was listed on the New York Stock Exchange in 1994. Over the 1990s. The new company had four major businesses . and J. Nokia was a large business conglomerate with several businesses ranging from tires to televisions and computers to telecommunications. rubber. and the US at that time) to successfully adopt the GSM standard. the rest of Europe. These three companies had business dealings with each other through the early 1900s and eventually merged in 1967 to form the Nokia Corporation. Background Despite the relatively recent emergence of the mobile phone industry globally. especially in light of the aggressive competition posed by several new Asian companies as well as more established players like Motorola and Sony Ericsson. set up the Finnish Rubber Works Ltd. a shopkeeper. an engineer. In 1912. The company was first set up on the banks of the river Nokia (after which it was named) in southwestern Finland in 1865 by Fredrik Idestam. Jussi Hyoty (Hyoty).
Nokia launched five new models of phones. Manufacturers emphasized functionality over aesthetic appeal. Nokia was also one of the first mobile manufacturers to realize the importance of the design element in mobile phones and its phones were more aesthetically designed than those of competitors.. In June 2004.. but also fine-tuned its portfolio to adjust products to meet market needs..successful mobile phone manufacturers in the world and began to enter nonScandinavian markets as well. when it launched its 8200 handset on the catwalk at a Paris fashion week. Nokia broke new ground in 1999."Analysts said this statement accurately characterized what happened with Nokia. including a number of clamshell phones. The announcement set alarm bells ringing in Nokia as Microsoft had the reputation of being an aggressive competitor. it risks becoming so fixated with trying to ward off what it reckons to be its most powerful challenger that it leaves itself vulnerable to attack from other directions. In the early 2000s. Nokia overtook Motorola to become the largest mobile manufacturer in the world. It killed some outmoded models and brought forward the launch of several others. The Economist wrote.. Until Nokia began emphasizing the design aspect. out of which three were . bricklike devices with an external antenna and a standard keypad. Designed for Innovation Nokia was the first mobile phone manufacturer to realize in the late 1990s that phones no longer played only a functional role; they were also becoming fashion symbols.. In 1998. especially one that is driven by constant technological advances. "When a firm dominates its market. The Decline In mid-2004. Nokia realized that it was in trouble and began to take steps to correct matters. Efforts at Recovery Soon after announcing disappointing results in the first quarter of 2004. Microsoft Corp (Microsoft) announced its decision to enter the mobile phones market. The company not only cut prices on certain handsets to increase market share.. mobile phones were bulky.
For instance. the 6630. and then sells . While the company's detractors believed that Nokia had lost its competitive advantage in the mobile phone market. and two low end models. Several other models were also marketed aggressively..clamshells.. such as delivery. In commerce.. its supporters said the company's inherent strengths and stable financial position would help it sail through the difficulties it had faced in 2003-2004 to recover in the future. Retailing may include subordinated services. the opinions of analysts on its turnaround were mixed. the 2650 and 2600. designed for 3G networks. Nokia was not able to meet the demand). a "retailer" buys goods or products in large quantities from manufacturers or importers. the 6170. (10 marks) Answer Retailing Retail consists of the sale of goods or merchandise from a fixed location. Nokia's new models were the 6260 model. Exhibits Exhibit I: The Phone Feature of N-Gage Q. most of them agreed that the mobile phone industry was undergoing a vast change. However. A Challenging FutureDespite Nokia's laudable efforts in the direction of recapturing its lost market position. another clamshell. boutique or kiosk.. (The 6230 was so popular in some markets that at times. in small or individual lots for direct consumption by the purchaser. In the early 2000s. a clamshell whose cover not only flipped open but also swiveled. Nokia's competitors had understood this and were in the process of launching several models that were style statements in themselves. Purchasers may be individuals or businesses. mobile phones were expected to perform a variety of functions in addition to looking stylish and being easy to operate. such as a department store. the low end 1100 model for emerging markets and the 6230 mid range model became very popular in 2004. or by mail. which Nokia claimed was the world's smallest camera phone. either directly or through a wholesaler. 5 What is retailing? Explain the functions and different types of retailing with its key features.
Retailers are at the end of the supply chain. high-end retailers focusing on wealthy individuals). A classic example is the Metro™ in Bangalore.a rural store that supplies the main needs for the local community; Convenience stores: is essentially found in residential areas.sell mostly food products; Warehouse stores . These stores are seen in local community often are family-run businesses. A pet store that specializes in selling dog food would be regarded as a specialty store. Retail establishments are often called shops or stores. They provide limited amount of merchandise at more than average prices with a speedy checkout.g. A retailer of such store carries variety of categories and has broad assortment at average price.very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores.warehouses that offer low-cost. with limited selection; Demographic .these offer extremely low-cost goods. Supermarkets: is a self service store consisting mainly of grocery and limited .retailers that aim at one particular segment (e. This store is ideal for emergency and immediate purchases.tend to offer a wide array of products and services. like electric power. often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee; Variety stores or "dollar stores" . For example if a customer visits a Reebok or Gap store then they find just Reebok and Gap products in the respective stores. branded stores also come under this format. but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices. The operating cost is comparatively less than other retail formats. Normally retailers sell less fashion-oriented brands. They offer considerable customer service. Hypermarkets: provides variety and huge volumes of exclusive merchandise at low margins. Specialty stores: A typical speciality store gives attention to a particular category and provides high level of service to the customers. The square feet area of the store depends on the store holder. General store . The range of products are very selective and few in numbers. Types of retailers by marketing strategy: Department stores . Discount stores . such as a public utility. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy.. However. Mom-And-Pop (or Kirana Stores as they call them in India): is a retail outlet that is owned and operated by individuals.smaller quantities to the end-user. The term "retailer" is also applied where a service provider services the needs of a large number of individuals. Supermarkets .
Convenience store . For example: Pai Electronics™ store in Bangalore. Vending Machines: This is an automated piece of equipment wherein customers can drop in the money in machine and acquire the products. However it is important for the customer to be wary about defective products and non secure credit card transaction. They endow with products. For example: Soft drinks vending at Bangalore Airport. Here the retailers use drop shipping technique. The supermarkets can be anywhere between 20. They may adopt a Hi-Lo or an EDLP strategy for pricing. the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required. while others are "mid-range" or "high end". A good .a small store often with extended hours.a store which sells most goods needed. and warehouse stores. Some stores take a no frills approach.products on non food items. Example: Sigma mall and Garuda mall in Bangalore. robotic kiosks located in airports. Example: Amazon and Ebay. Express Avenue in Chennai. E-tailers: The customer can shop and order through internet and the merchandise are dropped at the customer's doorstep. general merchandise. Big-box stores encompass larger department. Examples include ZoomShops and Redbox. The stores accept credit cards and are usually open 24/7. such as electronics. Example: SPAR™ supermarket. depending on what income level they target. lifestyle and purchase behaviour. Other retail format stores are forced to reduce the prices if a category specialist retail store is present in the vicinity. discount. Category killers or Category Specialist: By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. This format is ideal for customers who do not want to travel to retail stores and are interested in home shopping. typically in a rural area; Retailers can opt for a format as each provides different retail mix to its customers based on their customer demographics.000-40. They accept the payment for the product but the customer receives the product directly from the manufacturer or a wholesaler. food and entertainment under a roof.000 square feet. Other types of retail store include: Automated Retail stores are self service. Malls: has a range of retail shops at a single outlet. stocking everyday or roadside items; General store . malls and grocery stores. Tata Croma. For few categories.
Functions of Retailing Retailers play a significant role as a conduit between manufacturers. retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Breaking Bulk Breaking bulk is another function performed by retailing. as a channel of communication. Final consumers. Sorting Manufacturers usually make one or a variety of products and would like to sell their entire inventory to a few buyers to redu7ce costs. The above process is referred to as the sorting process. while Pantaloons is targeted at the middle class. in contrast. If each manufacturer had a separate store for its own products. buying them in sufficiently large quantities and selling them to consumers in small units. customers would have to visit several stores to complete their shopping. Retailers are able to balance the demands of both sides. by collection an assortment of goods from different sources. The word retailing is derived from the French word retailer. on and average. Shoppers’ Stop targets the elite urban class.format will lend a hand to display products well and entice the target customers to spawn sales. they specialize in types of assortment offered and the market to which the offering is made. Westside provides clothing and accessories.000 different items from 500 companies. Through this process. wholesalers. In this context. suppliers and consumers. which are then tailored by the retailers into smaller quantities to meet individual consumption needs. Customers are able to choose from a wide range of designs. breaking bulk. While all retailers offer an assortment. storage. prefer a large variety of goods and services to choose from and usually buy them in small quantities. Holding Stock . sizes and brands from just one location. while a chain like Nilgiris specializes in food and bakery items. they perform various functions like sorting. manufacturers and wholesalers typically ship large cartons of the product. Supermarkets in the US offer. holding stock. meaning ‘to cut a piece off’. advertising and certain additional services. 15. To reduce transportation costs.
Manufacturers. Retailers maintain an inventory that allows for instant availability of the product to the consumers. The display itself allows the consumer to see and test products before actual purchase. This also works the other way round in case the number of retailers is small. It helps to keep prices stable and enables the manufacturer to regulate production. aftersales service and dealing with consumer complaints are some of the services that add value to the actual product at the retailers’ end. in their turn. The manufacturer can then modify defective or unsatisfactory merchandise and services. and customer complaints. salespeople and display. advertising and pre-payment of merchandise. Salespeople are also employed by retailers to answer queries and provide additional information about the displayed products. Retailers also offer credit and hire-purchase facilities to the customers to enable them to buy a product now and pay for it later. Providing product guarantees.Retailers also offer the service of holding stock for the manufacturers. shoppers learn about the characteristics and features of a product or services offered. promptly process. Transport and Advertising Functions Small manufacturers can use retailers to provide assistance with transport. Consumers can keep a small stock of products at home as they know that this can be replenished by the retailer and can save on inventory carrying costs. Retailers fill orders. delivery delays. From advertisements. learn of sales forecasts. Retail essentially completes transactions with customers. deliver and install products. Channel of Communication Retailers also act as the channel of communication and information between the wholesalers or suppliers and the consumers. The number of functions performed by a particular retailer has a direct relation to the percentage and volume of sales needed . Additional Services Retailers ease the change in ownership of merchandise by providing services that make it convenient to buy and use products. storage.
6 a. It is a process or methodology used to learn more about customers’ needs and behaviors in order to develop stronger relationships with them.to cover both their costs and profits. (8 marks) Answer CRM stands for Customer Relationship Management. Write a short note on Brand development. What is CRM? What are its objectives? (2 marks) b. but thinking about CRM in . Q. There are many technological components to CRM.
marketing effectiveness. responsiveness and market trends. and the management of relationship and the main objectives to implement CRM in the business strategy are: • • • • • To simplify marketing and sales process To make call centers more efficient To provide better customer service To discover new customers and increase customer revenue To cross sell products more effectively The CRM processes should fully support the basic steps of customer life cycle . the technology. For example. sales. The basic steps are: • • • • Attracting present and new customers Acquiring new customers Serving the customers Finally. along with human resources of the company. enables the company to analyze the behavior of customers and their value. Objectives of CRM CRM. The main areas of focus are as the name suggests: customer . CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. retaining the customers Brand development A plan to improve the performance of a particular product or service. as part of brand development a firm may initiate a new advertising campaign that includes free samples.primarily technological terms is a mistake. . The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers. relationship .
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