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Marketing Suggested Answer Roll No……………. Maximum Marks – 50 Total No. of Questions - 5 Total No. of Printed Pages -7 Time Allowed – 1.5 Hours All questions are compulsory. Section -'B' 6. Read the following case and answer the questions given below: ‘Holiday at home’: Managing a media campaign Because of the strong Australian dollar and the growing number of low-cost airlines, more and more Australians were flying to Asia for their holidays. To encourage Australians to ‘holiday at home’, a large advertising budget was given to the Department of Tourism. The marketing manager, wanting get the campaign running quickly, split the department into teams-one team for television, another for radio, a third for print media, a fourth for online advertisements and a final group for outdoor. At the end of two weeks, the groups were asked to present their proposals. Each team had come up with different ideas but none fitted within the allocated budget. The manager looked over the plans and had no idea what to do but they were so different that it was impossible to fairly compare one against another—and integrating the campaigns into a whole looked impossible. The Marketing Manager had no choice but to set the proposals aside and start again, looking at the campaign as a whole. Trying to rush things and failure to take an integrated approach had ended up delaying the progress instead of making it easier. a) On the basis of above case, analyze the objective of the media campaign? b) Was the step taken by marketing manager correct? Give your opinion. Answer 6(A) The main objective of the media campaign should be to encourage the Australians to spend their holidays in their own country. As mentioned in the above case, more and more Australians were flying to Asia for their holidays because of the strong Australian dollar and growing number of low-cost airlines. Strong Australian dollar indicates strong economic condition or purchasing power of the Australians and low-cost airlines definitely motivates them to visit Asia which indicates challenges to Department of tourism. Thus, to discourage them to visit outside Australia and to enjoy the increasing purchasing power of Australians, because of the strong Australian dollar, it was inevitable to retain them within the country. So, the objective of the media campaign should be promoting domestic tourism i.e. encouraging Australians to spend their holidays in their own country. Answer 6(B) The step taken by marketing manager was not correct. For quick campaign, marketing manager has divided the department into various teams on the basis of media. But the fact is, each medium has its own merits and demerits. If each team works separately, idea generated for one medium cannot work for other media. MYH P.T.O. (2) There is also possibility of conflicts among the teams for resources and implementation of their own ideas. So, marketing manager must focus on integrated marketing communication for better coordination and effective utilization of resources. They must follow steps of developing effective communication i.e. identifying target audience, determining communication objectives, designing message, allocating budget and only selection of media. Mere selection of media and creation of ideas by different team independently is not appropriate for effective promotion. 7. a) Discuss the meaning of marketing mix and its role in marketing decision making. b) Show your acquaintance with the term marketing environment? Describe the demographic environments of marketing in Nepalese context. Answer 7(A) Marketing mix is the combination of the four major components that comprise a company's marketing program. Marketing mix is the core of marketing program. Marketing mix includes major components and supporting components. Major components include product, price, promotion, and place; while supporting components include process, people and physical evidence. The main role of marketing mix in marketing decision making includes – i. Help identifying the right product to the customers that can satisfy the expected needs and expectations of the target customers; ii. Help setting the best price for the product that can be affordable and acceptable to the target customers; iii. Help communicating the target customers about the products through the right promotion tools such as advertising, publicity, sales promotion, personnel selling, and public relations; iv. Help distributing goods to the right place where the target customers want to buy the products; v. Help providing the required services at right time; vi. Help developing relation with the customers so that the customers can deal with the marketer friendly without any hesitation; vii. Help maintaining the internal environment of the organization in an attractive way so that it can motivate the customers in visiting the office premises repeatedly and buy goods from the organization; Answer 7(B) A company’s marketing environment consists of all the factors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. Successful companies know the vital importance of constantly watching and adapting to the changing environment. As we move into the twenty-first century, both the customers and marketers wonder what the future will bring. The environment continues to MYH (3) change rapidly. More than any other group in the company, marketer must be trend trackers and opportunity seekers. According to Professor Philip Kotler, “marketing environment comprises all the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful transactions with its target customers.” The marketing environment surrounds and impacts upon the organization. There are two key perspectives on the marketing environment, namely the macro environment and the micro environment. Demography is the study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics. The demographic environment is of major interest to marketers because it involves people and people make up markets. The world population is growing at an explosive rate. It now totals more than 6.3 billion and will exceed 8.2 billion by the year 2030. The world’s large and highly diverse population poses both opportunities and challenges. The explosive world population growth has major implications for business. A growing population means growing human needs to satisfy. Depending on purchasing power, it may also mean growing market opportunities. Thus marketers keep close track of demographic trends and developments in their markets, both at home and abroad. They track changing age and family structures, geographic population shifts, educational characteristics and population diversity Demographic environment is one of the major forces of Nepalese marketing environment which includes size, growth and distribution of population, age mix, urbanization and migration. Population limits the size of the market. According to 2011 census, total population of our country is 264, 94, 504 showing population growth rate of 1.35 per annum. Similarly, total number of households in the country is 54,27, 302. Of the total population, terai constitutes 50.27% and hills and mountain constitute 43% and 6.73% respectively. Among the five development region central development region has the highest population (36.45%) and far western development region records the lowest i.e.9.63%. According to 2011 census, population density at national level is 180 per square kilometer. The highest population density (4416 per square kilometer) is found in Kathmandu district and lowest in Manang district which is 3 per square kilometer. Similarly, fastest decadal population growth rate is found in Kathmandu district (61.23%) and least in Manang (-31.80%) Nepal is a country of young population. Among the total population 43% belongs to under 15 years of age and working age population aged 15 to 59 years are 57% of the total population. Rate of urbanization is very slow in our country. According to 2011 census, urban population is 45,23820 which constitutes 17% of the total population. Recently, Nepal Government has declared new municipalities. Number of municipalities in the country has reached 199. Migration is the worldwide trend and Nepal is not the exception. The migration of Nepalese people mountains and hills to terai and rural to suburban and urban area is increasing day by day. Migration of Nepalese youth for foreign employment is also increasing. Market has shifted with the shift in population. 8. a) Explain the meaning and process of market segmentation. b) Differentiate consumer buying from organizational buying MYH (4) Answer 8(A) Market segmentation is a process of dividing the total market for a good or service into several smaller, internally homogeneous groups. It is based on customer oriented philosophy. No marketer can satisfy the needs of all customers by developing single marketing mix. The essence of segmentation is that the members of each group are similar with respect to the factors that influence demand. In segmentation, we first identify the wants of customers within a submarket and then decide if it is practical to develop a marketing mix to satisfy those wants. According to Philip Kotler, “Market segmentation is the subdividing of a market into homogeneous subsets of customers, where any subset may conceivable be selected as a market target to be reached with a distinct marketing mix.” Market segmentation is a systematic process which can be explained as follows: i. Market survey: Without better information, market segmentation is not possible. Market survey is conducted to obtain better information about the market characteristics. In market survey information such as customers’ need, taste, preferences, product usage rate and pattern, demand size, loyalty status, brand awareness etc are collected. ii. Segment identification: After market survey, collected information are analyzed by using mathematical and statistical tools. Factors affecting market demand are classified into major and minor factors. Homogeneous groups of customers are clustered to identify market segments. iii. Segment profiling: Appropriate variables for segmentation are identified. Variables may be demographic, geographic, psychographic or behavioral variables. Operating variables and purchase related variables can also be used for industrial market segmentation. Each identified segment is profiled in terms of similarities and dissimilarities in the market demand and consumer characteristics. At the end of this stage, the decision makers have various alternative market segments. iv. Segment selection: After the careful evaluation, company will select one or more segments as per their marketing strategy. Selected segment is considered as target market. While evaluating and selecting, firms should consider segment attractiveness, desired market coverage, organizational objectives and resources, government rules and regulation etc. MYH (5) Answer 8(B) There are certain fundamental differences between consumer buying and organizational buying, they are as follow: i. In case of consumer buying, demand is created from insight of the individual’s mind, while demand is derived for organisational buying. ii. Demand for consumer products is elastic, while demand for business products is inelastic i.e., there is very little change in demand in response to price change. iii. Demand in consumer buying is less fluctuating while demand is widely fluctuating for organisational buying. iv. Consumer buying is not regulated by law. The individual customers can buy goods whenever required. In case of organizational buying, it is a regulatory purchase i.e., organizations buy goods according to the government and organization’s laws, rules and regulations. v. In case of consumer buying, consumers may be less informed about the goods; while in case of organizational buying, buyers are well informed about what they are buying. vi. Consumer buying decision may be frequently changing. Organizational buying decision aims at a long-term relation with suppliers. Organizations generally do not frequently change their suppliers. vii. Consumer buying involves frequent purchases; while organizational buying involves infrequent purchase. Organizations do not buy goods frequently as an individual buyer does. 9. a) Describe the meaning of branding and the reasons for branding a product. b) What is advertising? Explain the main features of advertising. Answer 9(A) Branding is a process of determining and using a brand name or a legal term to the newly manufactured product that help identifying and differentiating product in the market; it also helps protecting the interesting of the manufacturer against duplication or brand piracy in the market. Branding may involve not only the name or legal term; it also involves special design, colors, symbol, or the combination of all these elements. Most manufacturers or marketers do branding their products for the following reasons _ To differentiate a firm's products from those of competitors; To make convenience in shopping; Brands refer the prestige of the manufacturers, sellers; and also give prestige to the consumers when they use popular brands; To legally protect the company; To identify the exact market for their products; To assure regular satisfaction to the customers; To symbolize as a quality product; MYH (6) To reduce price comparisons. Answer 9(B) Advertising is any paid form of non-personal communication, usually delivered through mass media or tools by an identified sponsor. It involves a variety of media including radio, television, newspapers, magazines, motion pictures, brochures and booklets, posters and leaflets, audio-visual materials, symbols and logos, directories, etc. The distinct features of advertising include – i. It is a Mass Communication ii. It is Informative in Action iii. It is a Persuasive Act iv. It is a Competitive Act v. It is a Paid Form of Communication vi. It has an Identified Sponsor vii. It is Non-personal Presentation 10. Briefly explain the following: a) Meaning of distribution b) Relationship marketing c) Innovative product. d) Economic factors affecting the consumer buying decision. e) Psychological pricing Answer 10(A) Distribution includes all the various activities the company undertakes to make the product accessible and available to target customers. It involves the marketing channel and physical distribution. Marketing channel makes the product available to the customers. Physical distribution makes the product accessible to the channel members and customers. Distribution is also called the “the other half of marketing.” It fulfills the gap between the producer and consumer Answer 10(B) Relationship marketing is one of the emerging concept of modern marketing. Relationship marketing is building long term mutually satisfying relations with customers in order to earn and retain their long term loyalty. In relationship marketing, customer is regarded as a partner in creating value. Relationship marketing is a long term partnership between marketer and customer. Both parties collaborate on identifying needs and designing marketing mix for customer satisfaction and organizational goal achievement. MYH (7) Answer 10(C) Today's business firms should develop and offer new product to retain in the hyper competitive market. New product may be in the form of modified product, improved product and innovative product. Innovative products are those products which are developed and introduced in the market for the first time, not previously sold by any firm. Development of innovative products involves high costs, risks, efforts and time required for profitability of the company. Answer 10(D) Economic factors affecting the buying decision of the buyer includes – i. Level of Personal Income ii. Income of Other Members of the Family iii. Expectation of Income in Future iv. Availability of Liquid Assets v. Availability of Credit Facility to the Consumer vi. Past-Expenditure Habits Answer 10(E) Psychological pricing is one of the popular pricing strategy which encourages emotional buying. It influence buyers to perceive the price favorably. Psychological pricing includes prestige pricing, odd-even pricing, psychological discounting, customary pricing and promotional pricing. 99 pricing is one of the example of psychological pricing. MYH