Download Ques 1:- Define Marketing and discuss the Importance in the

AIM COLLEGE, HISAR
MARKETING MANAGEMENT (CP-203)
92533-50008, 94164-43238
Ques 1:- Define Marketing and discuss the Importance in the modern world?
Ans: - marketing begins and ends with the customer. The job of the marketing is not only to satisfy the consumer
but even to delight him or her. All the activities of an organization must be directed and focused towards the
consumer. Marketer must allow their customer to dictate product specifications and standards regarding quality.
This job can only be performed if consumer’s needs are continuously monitored.
The term marketing is very comprehensive one.

Marketing starts well before production commences & ends only after rendering after sales satisfaction.

It is the set of those activities necessary incidental to bring about exchange relationships.

It is skill of selecting & fulfilling consumer desires in such a way that a dose of money put in bring back
maximum return.
“Marketing is the process of planning & executing the conception, pricing promotion and distribution of ideas,
goods and services to create exchanges that satisfy individuals & organizational objectives.”
 In general marketing activities are those associated with identifying the particular wants & needs of target
market of customer better than the competition.
This involves doing market research on consumers, analyzing their needs & behavior taking marketing strategic
decision about product design, pricing, promotion & distribution of the ideas, goods & services.
Identification of
Analysis &
Business Analysis
Consumer
Feedback
Environmental
Scanning
Development
Process of
Marketing
After Sale
Services
Selling Analysis
distribution
channel
Technical
Setting the Price
Promotion
Designing the
distribution channel
Good as ( TV, Soaps,
Sauce)
Ideas
(Social Ideas Aids/Blood
Donation)
Services
(Hospital, Courier)
Information
(Dictionary, Schools,
Newspaper)
Scope e of
Marketing
Oraganisation (Companies)
Experiences (Theme
Park, Working Park)
Events (Sport events,
Fashion shows)
Properties (Real Estate)
Places (Tourist
Places/Investment
destination)
Persons (CelebritySports/TV/Art)
According top Philip Kotler
“It is a social & managerial process but which individual & groups obtain what they need & want through
creating, offering & exchanging products of value with others.”
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Marketing function has assumed increasing importance these days due to the following reasons:
Importance of marketing

Marketing generates revenue for the business firm.

Marketing is an important activity, particularly in the competitive economy.

Marketing generates revenue for the business enterprise. No firm can survive in the long run
unless it is able to market its products better than the competitors.

It has become the nerve center of all business activities.

Marketing is the beatings hear of the business organization.
Board of Directors
CEO
Purchase Deptt.
Prod. Deptt.
Finance Deptt.
Marketing Deptt.
HR Deptt.
All the departments depend upon the marketing dept. to generate funds to support them:

The chief executive of the organization cannot plan, the production cannot produce, the
purchase manager cannot purchase & the financial controller cannot budget until the basic marketing
decision have been taken.

Many departments in a business enterprise are essential for its growth but marketing is still the
sale revenue of production activity.

It is considered to be the most important operative function of management.
Marketing satisfies our Needs: I Following are the utilities crated by marketing:Time Utility
Form Utility
Exchange Utility
Person Utility
Knowledge Utility
Place Utility
Form Utility: - Customers expect that their needs should be fulfilled with appropriate goods &
services with particular features/ attributes/ shapes/ size etc. From utility supplies them all by converting
the raw form of product into meaningful final product. The customers forces marketers to direct
production department in terms of specific customers needs satisfaction.
Person Utility: - The marketers and ultimate customers are not always situated at the same
place, so that the customers could buy the product & services for their consumption or usage. At times,
there is a big gap between the production & the ultimate customer. Marketing Management helps to
remove the hindrance of person by means of trade. Trade, as a part of marketing plays a major role in
establish9ing contact between producers as providers of goods & services and customers as users or
consumers of those goods & services to satisfy their needs.
Exchange Utility: - In case of goods & services, the person utility clear the way of their proper
exchange. Marketing helps to bring together the producer of goods ready to sell their goods for money
and the customer of those goods ready to part with their money, thus removing the hindrance of
exchange. Moreover, with money as the medium of exchange, payment for goods & services is made
Page No. 2/26
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through banks or financial intermediaries. In this way, bank help to remove the hindrance of exchange
& enable the buyers to produce the goods on credit.
Place Utility: - Goods may be produced at a place where advantages of location other than the
market may be available, where as the buyers of such goods may be situated at a far of place. The
barriers of distance between place of production & the market where these products can be sold is
removed by different means of transport. Besides transporting goods from the place of production to
that of consumption, the services of insurance to cover the risk of loss during transit, storage & packing
to protect goods against damage & pilferage is also aimed at removing hindrance of place. This place
utility brings the producer of goods & services closer to the customer.
Time Utility: - Goods in modern times are produced in anticipation of demand & as such they
are to be stored as long as the demand for the same comes up. This function of storage & preservation
is performed by warehouse. Which removes the hindrance of time by balancing the time lag between
production & the consumption. Thus, create time utility.
Knowledge Utility:- A producer may find it difficult to sell his products unless & until he brings it
to the knowledge of the prospective consumers the utility & the distinctive features of his products.
Advertising & Salesmanship help to remove the hindrance or lack of knowledge on the part of
prospective buyers by bringing to the notice of the customer the utility of the goods & services offered.
II.
Marketing& Economy:- Marketing is the kingpin that sets the rate of progress of the economy.
The marketing organization, if more scientifically organized makes the economy strong & stable. The
lesser the stress on the marketing function, the weaker will be the economy. Underdeveloped
marketing is the sign of underdeveloped economy.
Marketing enables a nation to improve the standards of goods & services & consequently the business
value. Marketing helps in improving the standard of living by offering a wide variety6 of goods &
services with freedom of choice and by providing the customer a high standard of living because it
meets the consumer’s physical as well as emotional needs.
III. Marketing generates Employment:- Marketing generate employment, both in production & in
distribution area. A large no. of people are emp0loyed by modern business houses to carry out the
functions of marketing. Marketing also gives an impetus to further employment facilities. In order to
ensure the finished products. Reach the customer, it passes through wholesaler & retailer & in order to
man these numerous establishments many people get employed.
IV. Marketing helps in Developing economic resources:- Since a business firm generates revenue
& earns profit by carrying out marketing functions. It will engage in exploiting more & more economic
resources of the country to earn more profit.
V. Marketing Affect our lives:- Customers are the revolving force of marketing. Customers decide
what product suits their needs. The choice of our product over another suits their needs. The choice of
our product over another sets the pace of marketing action.
Company’s Orientation towards the market place:
Marketing management is the conscious effort to achieve desired exchange outcomes with Target
markets. In this process the companies may be guided by any given philosophy which gives relative
weights to the interest of organization. Customers & the society. However, many a times interests may
conflict.
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VI
III
II
I
Environment Concept
Concern for the env. Every
stage of Mktg. Should be env.
Friendly
Societal Concept
Concern for the society Social
Responsibility
Concern for the env.
Every stage
V
IV
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Marketing Concept
Identity Consumer needs &
produce accordingly
Selling Concept
Hard core selling
Concern for the env.
Every
stage
Product Concept
Emphasis on quality & features of
product
for
Concern Concern
for the
Production Concept
env. Every stage the env. Every stage
Emphasis on bulk production,
economies of scale
Concern management
for the env. Every
Thus the function of marketing
has gained tremendous importance.
stage
Conclusion: - Marketing
may be defined as the task of creating, promoting and delivering goods &
services to consumers & businesses. Marketers are skilled in stimulating de4mand for a company’s
products. Marketing managers seek to influence the level, timing and composition of demand to meet
the organizational objectives.
Ques2: - Define Segmentation. How does the psychological factors influence market
segmentation? On what basis will you segment the following products?
(A) Radio
(B) Sports Shoes
Ans:- Segmentation:- Segmentation is a group or class within the border market.
Segmentation is a process in which heterogeneous market is divided into homogeneous groups.
Segmentation is the process of dividing the total market into various segments. A market segment
consists of customers who share as similar set of want.
Definitions:” Segmentation is a process in which heterogeneous market is divided into homogeneous
groups.”
“marketing segmentation is the process of dividing a total market into groups of consumers who have
relatively similar product needs.”
Levels of Market Segmentation: a)
Mass Marketing:- Mass production, mass distribution & mass promotion of one product for all
buyers. In this type of segmentation all consumers are treated in one segment. its primary advantage is
that it costs less. But in the diversified market, this strategy does not seem logical and ultimately
marketers end up with the strategy of “segmented market”
b)
Segment Marketing: -A segmented marketing is one in which meaningful difference among
consumers result in a modest number of segments. Marketing to a group of customers who shares a
similar set of wants. This strategy allows producers to avoid head on competition in the market by
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differenciating their offerings, not only on the basis of price, but also through styling, packaging,
promotional appeal, method of distribution and superior service.
c)
Niche Marketing: - this marketing sometimes also called micro marketing. Marketers usually
identify niches by dividing a segment into sub segments. The consumer in niche has a different set of
needs and they are also ready to pay a premium to the firm that best satisfies their needs. Marketing to
a more narrowly defined group seeking some distinctive mix of benefits.
d)
Individual customer Marketing:-when a marketer detects as many segments as there are
consumers, so that each segment is composed of only one consumer, it has been identified as
individual marketing of customized marketing. This results when marketer believes that no two
consumers will respond the same way to its marketing efforts. Marketing tailored to the needs & wants
of local customer groups.Marketing to satisfy an individual customers unique set of wants and
preferences.
Patterns of Market Segmentation:(A) Homogenous Preferences
(B) Diffused Preferences
.
. .
.. .. .. . .
. . .
.
.. .
. .
. . . .
WHERE A SEGMENT HAS Where no common preferences
COMMON PREFERENCES in the market exists … . .
MOTIVES:- condition which prompt action to need purchase.
Major segmentation variables for consumer Market:Geographic
Demographic
1. Region
1. Age
2. City
2.Family Size
3. Density of
3. Family Life
Cycle
Population
4. Climate
4. Gender
5. Income
6. Education
7. Religion
8. Nationality
9.
Social
Class
Basis of marketing segmentation
Page No. 5/26
(C) Clustered Preference
.
Market where there are
cluster of choices
Psycho
graphic
1.
Life
Style
2.
Personality
3. Values
Behavioral
1.
Occasions
2. Benefits
3.
User
Status
4.
Usage
rate
5.
Loyalty
Status
6.Readiness
Stage
7. Attitude
towards
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A) Psycho graphic Segmentation:- Under the method of psychographics segmentation, the buyers in
the market are divided into on the basis of lifestyle or personality or values. Psychological/Psycho
graphic charac3eristics refers to the inner ort intrinsic quality of the individual consumer. Consumer
segmentation strategies are often based on specific psychological variables. Consumers may be
segmente3d in terms of their needs & motivations, personality, perception, learning level of involvement
& attitudes.
Needs: - It’s a state of deprivation, absence of something useful through appeal, benefit.
This basis of segmentation is used by marketers to segment the market. The important
1)
LIFE STYLE:- People differ in attitudes, interests & activities & these affects the goods &
services they consume lifestyle are shaped partly by whether consumers are time constrained or
money constrained.
Constructive, Marketers of cosmetics, alcoholic beverages & furniture seek, status seekers.
Marketers of cosmetic, alcoholic, beverages & furniture seek opportunities in lifestyle
segmentation e.g. File 18. Revlon, Bagpipers, Haryward etc.
2)
Personality: - Extroverts, Introverts, aggressive, complaints.
A person’s life style, social-class, culture & personality rest at his mind. But marketers can tap this basic
instinct when they appeal for their product. They may attach their product with a brands personality
that5 correspondence to a largest consumer personality.
For e.g. one can have car loan at finger tips or can think of breaking the old values of sticking to old
products (& get them repaired) by getting rid of old ones. Bajaj auto says “Hamara Bajaj” for its
scooters by providing it a tinge of patriotism. Similarly Hero Honda says “Desh Ki Dhadkan” to position
its mobiles & emotionally placed basis. ONIDA appeals: Neighbors envy Owner’s Pride” Thumbs Up
says “Taste of Thunder” & touch personally. Coca Cola has recently positioned itself as “Sar Utha Ke
Jiyo” by touching the pride of the audience.
However, the physiological segmentation is at the mind level. It might not click for marketers. The
appeal is vague which is not easily manifested in consumer behavior. For e.g. would one say that he
buy s Oni9da TV to make their neighbor envied?
The marketer may use product features, services and image making to transmit the product’s
personality.
3)
Values:- Some marketers segment the market by core values, the belief systems that underlie
consumer attitudes & behavior. Core values go much deeper in an individual & influence their purchase
behavior.
However, marketers no longer talk about the average consumer. In practice instead of choosing a
single segment a combination of several variables is used as a basis of segmentation. This helps in
identifying a smaller, better-defined target group. This is called Multi attribute segmentation.
B) Demographic segmentation
Market Segmentation for Radio:The combination of the following variables may be used for segmenting the market for Radio;
a)
Region:- Depending upon the areas where the Broadcast would be available.
b)
Age:- Market may be segmented by focusing on the age specific programmes to be aired on
Radio.
c)
Family Life Cycle:- Programmes may be aired according to the number & age of people
listening to Radio.
d)
Education:- Language to be commonly used on the programmes may also be used as one of
the Segmentation variables.
e)
Life-Style:- Some people shall tune into Radio at home, or mobile or in car. Thus life style mat
be another variable to be used.
f)
Occasions:- Messages or songs may be dedicated by the listeners on various occasions.
Thus a combination of any of the above variables may be used to segment the market for Radio.
Market Segmentation for Sport Shoes:- Multi attribute segmentation may be done for marketing sports
shoes:
a.
Age
b. Gender
C. Income
d. Life Style
e. Personality
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f. Occasions, any or all of these variables can be used to facilitate the segmentation process for the
marketing of sport shoes.
Not all segmentation is useful. An effective segment should be:
(1) Measurable
(2) Accessible
(3) Profitable
(4) Substantial
(5)
Actionable
-C) geographic segmentation
1) Region
2) City
3) Climate
4) Density of population
Steps in Segmentation process
1) Group customers into segments
2) Identify, which variables make segment distinct.
3) Determine segment Attractiveness
4) Determine segment profitability
5) Design a complete marketing mix strategy
6) Test market segment
7) Position the product is segment
Conclusion:- Segmentation is the process of dividing the total market into group of commo0n needs. It
facilitates the firm in identifying which and how many segments can be profitable targeted by them.
Dividing the total market into groups – Segmentation – S
Choosing the profitable segment – targeting - T
Creating a distinctive image of the brand in the minds of the customers – positioning - P
Ques 3:- What do you mean by Product Life Cycle & discuss how it is related to the
different stages of Marketing development?
Ans:- The term PLC (Product Life Cy6cle) denotes the stages through which a product passes, in its life
span.
Every product passes through certain stages until it becomes obsolete & is discarded. When product is
born in the market it is the stage of INFANCY or INTRODUCTION.
Slowly “& Steadily product begin to grow & it is increasingly accepted in the market, it is the stage of
growth. When the product obtains the highest the highest stabilit7y of acceptance & is largely discarded
by the society, it is the declining Stage. But in between the Maturity *& Declining stage there is stage
known as Saturation Stage. It is the stage where the products witness its highest possible sales. Every
product moves through 5 stages of life cycle & each stage poses different challenge to the seller.
 Introduction Stage
 Growth Stage
 Maturity Stage
 Saturation Stage
 Declining Stage
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Growth
Maturity
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Saturation
Decline
Three special categories of the PLC:A.
Style:- It is a basic & distinctive mode of expression e.g. Home, Clothes and Art etc.
B.
Fashion:- It is a currently accepted or a popular style at present in a given field. E.g. Clothes,
Jewelry
C.
Fads:- These are fashion that come quickly into public view are adopted with great enthusiasm,
peak early and decline very fast.
(I) Introductory Stage: - This stage is also known as infancy or pioneering stage. This is the first stage
of PLC & start with the launching of new product in the market. The most important task in this stage
with the marketing manager is to create the primary demand of the product.
The following are the major characteristics of this stage:1.
Since the product is new & not known to the public, the promotional expenditure is often at their
highest ratio at sales.
2.
Profits are negative or low because of heavy expenses or distribution as well as promotional
channel.
3.
Price are also at the higher side during the introductory stage of the product due to the following
reasons:
Costs are high due to relatively low output rates.
Te4chnological problems
Low sales volume
Negative or low profits
High promotional expenditure
Sales target at particular segment say at higher income group.
The following may be the strategies adopted to introduce the new product successfully6:1.
Advertisements & Publicity of the product “Money Back” guarantee may be offered to stimulate
the people try the job.
2.
Attractive gifts to customers as an “Industry offer”.
3.
Selective distribution & attractive discounts to dealers.
4.
Higher price of products to earn greater profits during the initial stages i.e. Skimming the Cream
pricing Policy”.
5.
Ironing out of product deficiencies.
Studies indicate that a well-designed marketing strategy can give substantial market dominance new
product.
(II) Growth Stage:- This is the stage during which consumers accept the product. The following are
the main characteristics of this stage:1.
Price of the product starts falling as a result of competition & economies of scale occurring of
large production.
2.
The promotion expenses increase to meet competition as well as to make aware more & more
customers about the product.
3.
Sale rises much faster, which result in the decline of the sales promotion ratio.
4.
Penetration of other market segments.
5.
Distribution outlets expand rapidly, growing market of the product.
The following may be the strategies adopted at this stage:Page No. 8/26
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1.
The product is advertised heavily to stimulate sales.
2.
New versions of the product are introduced to eater to the requirements of different types of
customers.
3.
Brand image of product is created through promotional activities.
4.
The price of product is competitive.
5.
There is greater emphasis on customer services.
6.
Advertisements are shifted from product awareness to product preference message.
7.
The lowered price may be used to attract the next layer of price sensitive buyers.
(III) Maturity Stage: - The product enters into maturity stage as competition intensifies further and
market goes established. A profit comes down because of stiff competition & marketing expenditure
rises. The prices are decreased because of competition & innovations in technology. There is
saturation in the market as there is no possibility of sale increase. At maturity stage of the PLC, the
products witness the highest possible sales given the same product & same positioning. This stage
normally lasts longer than the previous stages and poses numerous challenges to marketing
management.
In order to strengthen the period of maturity stage, the following strategies may be adopted:1.
Product may be differentiated from the competitive product & brand image may be emphasized
more.
2.
The warranty period may be extended. For instance, manufacturers of typewriters have
introduced the concept of lifetime warranty.
3.
Reusable packing may be introduced.
4.
New market may be developed.
5.
New uses of products may be developed.
Marker Modification
Convert non-users
Enter new segments
with competitor’s customers
STRATEGIES
(V) Decline Stage:- This stage is characterized either by the product’s gradual displacement by some
new product as change in customer’s buying behavior. The sales fall down sharply & the expenditure
on promotion has to be cut down drastically. The decline may be rapid with the product soon passing
out of market or slow if new uses of the product are found. Sales may decline due to technological
advances, shifts in consumer tastes & increased domestic and foreign competition.
To avoid sharp decline in sales, the following strategies may be used:1.
New features may be added to the product & its packaging may be made more attractive.
2.
Economy packs or models may be introduced to revive the market.
3.
The promotion of the product should be selective to reduce distribution cost.
4.
New uses of the product may introduce to increase its consumption by existing as well as
potential marketing.
(V) Abdoment of the Product:- Many firms abandon the product in order to put their resources to better
use. The demands of the customer change & new innovations come to the market to take the place of
the abandoned products. As far as possible, attempts should be made postpone the decline stage. But
if the decline is rapid, the product model may be abandoned & the new model with unique features may
be introduced.
Strategies available to the firm:If it is not possible or there are heavy losses. The manufacturer may seek merger with a strong
firm.
Reducing investment gradually while trying to maintain its sales.
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Disposing off its assets as advantageously as possible.
It is not always necessary that each & every product follow this life cycle. Some products are introduced
& die quickly6; other stay in the maturity stage for a long time, some enter the decline stage and are
then cycled back into the growth through strong promotion or repositioning.
The appropriate strategy depends on the industry’s relative attractiveness & the company’s competitive
strength in that industry.
Conclusion:- Though the usefulness of the concept of PLC in interpreting the market dynamics cannot
be underestimated, there are several criticism agai8nst it.
(a)
Life-Cycle patterns are too variable in shape & duration.
(b)
Marketers can seldom tell what stage their product is in.
However, despite criticism, the concept of PLC of utmost importance to the marketers for planning &
understanding the product and the market dynamics.
Ques 4:- List the steps in the development of new product?
Ans:- New Product Development:- Product development does not happen, it has to be planned.
Dynamic firms plan their innovations for 5 to 10 years in advance. The process of planning &
development involves 6 Stages:New Product Development Process
Idea Generation
Is the Idea worth considering?
Reject
D
Screening of new Ideas
Reject
Product concept development &
Testing
Reject
Reject
Business Analysis
R
O
Product designing & development
Reject
Product Testing/ test marketing
Are we successful?
Future
Plans
I.
Commercialization
- Are sales meeting
expectations
P
Should product be
modified
Will product of marketing
programme modification
help
Idea Generation:- The new product planning process starts with the generation of idea
usually generate with the recognition of consumer needs . An alert market can get some ideas from the
customers for possible new products to perceive those needs, which are so far unexpressed.
The main sources to Get Product Ideas are:
Unorganized Sources
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
Organized Sources
(A) Unorganized Sources:- When company badly needs the new product ideas to meet immediate
consumer need, then there is more chance for the haphazard product idea generation.
(B) Organized Sources:- The organized sources for new product idea are:
o
Customers
o
Scientists
o
Bankers
o
Competitors
o
Sales Representative & Middle Man
o
Industrial Consultants etc.
Consumer is the king of the market & therefore, the company has to adopt consumer
-oriented approach to get more & more satisfaction.
Consumers give some new ideas to improve the product.
- Company may get new product ideas & assess the likes & dislikes of the consumers in a better way
from the successful competitor’s product development strategy.
- Sales representatives & middleman can provide the true picture to the company about the consumer’s
wants & their complaints.
- Consultants appointed by the company to advise & solve the company’s problems may be good
sources of new product ideas.
II. Screening of New Ideas:- After receiving a number of ideas good or bad from the first stage, the
next step in the new product development process is to screen & evaluate them to reduce their no.
which are likely to be more useful.
A.
The process of screening is the critical evaluation of product ideas drop out of the poor ideas
immediately from further consideration.
B.
The company screens those products those products ideas that are incompatible with the.
These objectives may be:
i.
Customer satisfaction
ii.
Increase sales volume
iii.
Possible profitability
iv.
Company image
v.
Market share
vi.
Uniqueness of product
While screening the companies must avoid two types of errors:
a) DROP-error: It occurs when the comp-any dismisses an other wise good idea.
b) Go-error: It occurs when the company permits a poor idea to move into development &
commercialization stage.
Failure:Absolute Product failure
Partial Product Failure
Relative Product failure
III. Product Concept Development & Testing:- After through with the preliminary investigations i.e.
the screening of the new product ideas, the next step is to develop these into mature product concepts.
- Product idea is a possible product the company might offer to the market. A product concept is an
elaborated version of the idea expressed in meaningful consumer terms.
- During this stage of product concept development & testing. The marketers must incorporate the
consumer meaning into their product ideas.
 To measure the need level of the consumer.
 To measure the gap level between the new product & existing product in the market. The greater
the gap the higher the need level & higher will be the expected consumer interest.
 To measure the consumer targets & purchase frequency.
Concept testing involves presenting the product concept to appropriate target consumers and getting
their reduction. The concepts can be presents symbolically or virtually.
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IV. Marketing Strategy:- If the concept testing is successful, the next stage is to develop a preliminary
marketing strategy plan for the introduction of the new
Part I Target markets size, structure & behavior, product positioning & expected Sales & profits.
Part II Planned Price, distribution strategy & marketing budget.
Part III Long run sales & profit goals & marketing mix strategy product in the target market the
business describes.
V. Business Analysis:- After picking up the best product concept in the next stage its business
implication will be analyzed. Business analysis may be defined as an evaluation of product idea:
- It involves projection of future demand, market potential, estimate of future sale, cost of production &
distribution.
- It helps the management to determine whether the proposed product can be produced the marketed
profitability.
VI. Production designing & development:- In this stage, the company to develop product proto type
so as to ascertain whether the company has the necessary technology available or it will be procure3
the technology to manufacture product that will satisfy the consumer as well as business needs.
The prototypes are put through rigorous functional tests and customer tests:
A)
Alpha testing:- Test within the firms.
B)
Beta Testing:- Tests with prospective customers.
Following steps may complete the product development task:
1. The product drawing & designing is carried out in the laboratory with a view to consumer product
specification
2. Consumer preference testing to determine as to which combination of product attribute is desired by
the consumer.
3. Developing associated product attributes like:

Trading

Packaging

Colors etc.
6.
Test Marketing:- Test marketing provides important clues about the product, product weakness
& deficiencies and also provides an opportunity to understand the working & relative importance of the
product components of the marketing mix.
This stage is reached after successful functional & psychological performance of the product in this
stage. The final new product is introduced to an actual market setting to understand the behavior
pattern of consumers & dealers regarding handling, using and repurchasing the product.
Market Testing (Trial/ First Repeat/ Adoption/ Purchase Frequency)
Consumer Goods Sales wave Research
Simulated Test
Controlled Test
Tests Markets
Business Goods
Alpha & Beta Testing
Display at trade shows
Distributors display room test
Some of the firms omit the test marketing stage & go directly from product development stage to
commercialization stage.
Because they face the problem during the test marketing stage that competitors come to know
about the product which is yet to be marketed, the disrupt the test by reducing the price of their product
the test areas or to increase the promotional outlays.
7.
Commercialization:- If the product is found to be suitable a result of analysis & study of the
result of test marketing with or without the modification, it is ready to be launched in the market.
After test marketing, if sales is satisfactory to be excellent then the company will go to launch
the product.
If the sales are fair then the company may go either to organized new market test or may modify
the product.
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If the sale is poor, the company may either modify the product or drop the product.
In commercializing a new product, certain decision are very crucial:A. When (Timing) of market entry
- First entry
- Parallel Entry
- Late Entry
B. Where (Geographic Strategy)
Single locality
A region
Several Region
National Market
International Market
(A) To whom (Target market prospects) , Which market segment
(B)How
(Introductory
marketing
strategy)
To coordinate the many activities involved is launching a new product; management can use networkplanning techniques e.g. critical path scheduling for developing a master-chart showing the sequential
activities that must take place to launch the product.
While the new product develop0ment is very lengthy and expensive procedure, yet an alarming number
of products fail in the market each year.
According to Philip Kotler new products fail because:A high level executive pushes favorite idea in spite of negative reports.
Market size is over estimated.
Product is not designed well
Incorrect positioning or overpriced
Lack of sufficient distribution coverage or support
Development costs are higher than expected
Competitor’s fight back harder than expected.
There exist several factors that hinder the new product development:
Shortage of important ideas
Fragmented markets
Social & Govt. constraints
Faster required
Development tune
High cost of development
Shorter PLC
Conclusion:- Therefore, efforts must be made to develop a unique, superior product marketed at a
reasonable price in an effective manner.
Acc to Madique & Zirger:- Factor accounting for new product success
Understanding of customer’ needs Higher performance –to-cost ratio
Product is introduced ahead of competition
Greater the expected contribution margin
High budget for launching the products
Greater cross-functional team work
Ques 5:- Write a brief note on Skimming & Penetration Pricing Policy?
Ans:- Acc to Philip Kotler the best way to get a keep customer is to constantly figure out how to give
them more for less.
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Price is one element of the marketing mix that produces revenue, Pricing strategy usually change as
the product passes through its life cycle. The introductory stage is specially challenging. Companies’
bringing out a new product face the challenge of setting price for the first time.
Two major decisions that must be made, involve
1) Determining the specific price to be put on a new product and
2) Determining how that price should be varied over the product’s life cycle.
High
Price
Low
Medium
High
Premium
High-Value
Super
Strategy
Strategy
value
strategy
Medium
Overcharging
Medium Value
Good value
Strategy
Strategy
strategy
Low
Rip off Strategy
False economy
Economy
Strategy
Strategy
In developing a pricing strategy for new products, firm can use 2 approaches:
Dimensions
Penetration
Strategy
Low
level of desires in market
Similar
Distinctiveness from competitive
Products
Distinctiveness
Important
Importance of price to market
Not Important
Easy
Easy duplication of product
Not easy
Return on Investment
Fast
Gradual
High
Skimming
Strategy
A) Skimming Pricing Policy: -Under
this policy higher prices are charged during the initial
stage of the introduction of the new product. For e.g. when Sony introduced the world’s first high
definition. TV to the Japanese market in 1990. the high technology sets costs $ 43,000. These TV’s
were purchased by customers who could afford to pay a h9igh price for the new technology. Later on it
rapidly reduced the price to attract next layers of price invite customers.
the manufacturer fix higher prices of his product in order to recover his initial investment
quickly.
This policy has been quite successful in ,any cases because of the following reasons
I.Demand is likely to be more inelastic with respect to price in the early stages of introduction than it is
when the product is fully-grown.
II.Introducing a new product with a high price is an efficient device for dividing the market into segments
that differ in price elasticity of demand.
III.Marketer may change higher prices in order to strict the demand to the level which he can meet, as in
case of Appu Ghar which recently introduced packet riding of any two and gift for the package after the
period.
IV.High initial price finances the cost raising a product family. The manufacturer may charge high Prices
and plough back the excessive profit into the business for further expansion.
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V.The introduction of a new product reuires heavy expenditure on advertising and promotion. When the
firm does not have the financial mean necessary for a successful introduction, charging high prices is
one way of generating the resources.
Skimming strategy is definitely a cautious strategy, which is more financial than commercial. Its main
advantage is that it means the door open for a progressive price adjustment, depending on how the
market and competition develop from a commercial point of view; it is always easier to cut a price than
to increase it.
(B) Penetration Pricing Policy:- Under this pricing policy, prices are fixed below the competitive level to
obtain a large share of the market and develop popularity of brand.
Unlike skimming pricing policy, it facilitates higher volume of sales even during the initial stages of a
product life cycle.
This policy helps develop the brand preference and is useful in marketing for the penetration pricing is
an aggressive Pricing Strategy. Which resulting lower profit or even losses during the initial stages. But
once the product is established in the market, the profit level goes up because of economies of largescale production. For e.g. Dell used penetration Pricing Policy to enter personal computer market; its
sales soared when IBM, Compaq, Apple & other could not match its prices.
The following general conditions must prevail to justify its uses:1. Demand must be price elastic over the entire demand curve, there is no upper segment to be given
priority and the only strategy is to address the whole market at a price low enough to satisfy the
greater number.
2. It is possible to achieve lower unit cost by increasing volume significantly, either because of
economies of scale or because of potential experience effects.
3. Soon after the introduction the new product is threatened by strong competition. This strategy is used
here to discourage competition from entering the marketing. Low prices act as very efficient barriers
to entry.
4. The top range of market is already satisfied; in this case; penetration is only valid policy to
development the market.
5.Potential buyer can easily integrate the new product in their consumption production, the transfer cost
of adopting the product other than its price are relatively low and therefore, a mass market can be
developed rapidly.
The pricing structure changes over time as product moves through their life eye. The company adjusts
prices to reflect changes in cost and demand and to account variation in buyers & situations. As the life
cycle stage changes, the companies consider when to initiate price change.
STEP in Setting Pricing Policy:(I) Selecting the Pricing Objective
Survival
Maximum Current profit
Maximum market share
Maximum market skimming
Product quality leadership
(II) Determining Demand
Price sensitivity
Estimating demand curves
Price elasticity of demand
(III) Estimating costs
Types of costs: variable/ Fixed/ Total/ Average cost
Level of production
Differentiated marketing offers
Target costing
Analyzing competitor’s cost prices & offers
(I) Selecting a pricing method
Mark-up pricing
Target return pricing
Perceived value pricing
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Value pricing
Going rate pricing
Auction-type pricing
Group pricing
(II) selecting the final price
Psychological pricing
Gain & Risk sharing pricing
Influence of other marketing mix elements
Company pricing policies
Ques 6:- What do you mean by Marketing Information System (MIS)?
Ans:- MIS:- A marketing information system consists of people, equipments and procedures together,
analyze and distribute needed, timely & accurate information to marketing decision makers. The
company’s MIS should represent a cross between what manager think they need, what managers
really need & what is economically feasible.
Analysis
MARKETING MANAGERS
Implementation
Organization
Planning
Control
Marketing Information System
Developing needed Information
Information
Analysis
Internal
Database
Assessing
Information
needs
Target
Markets
Marketing
Intelligence
Marketing
channels
Disturbing
Information
Market
Research
Marketing Environment
Competitors
Public
Macro environment
Forces
Steps in MIS:1. Assessing Information needs
2. Developing Information
3.Distributing Information
1.
Assessing Information needs:- The company begins by interviewing managers to find out what
information they would like to have. MIS must watch the marketing environment in order to provide
decision makers with information they should have to make key marketing decision.
2.
Development Information:- The information needed by marketing managers can be obtained
from:

Internal Data

Marketing intelligence

Marketing Research
Internal Data:- Many companies build extensive database i.e. computerized collection of information
obtained from data sources within the company. Marketing managers can readily access and work with
the information in the database to identify marketing opportunities & problems & evaluate performance.
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Information in the database can come from many sources like finance department, production
department. Research studies done for one department may provide useful information for several
others.
This source of information can be accessed more quickly & cheaply than other information sources.
Marketing Intelligence:- Marketing Intelligence is the systematic collection and analysis of publicly
available information about competitor and development in marketing environment. MIS gathers
analysis, and distributes information about the company’s competitive, technological, customers and
economic, social, political & regulatory environment. Its goal is to improve strategic decision-making.
The marketing intelligence system determines what intelligence is needed, collects it by searching the
environment and deliver it to marketing manager, Using Internet search engine like Yahoo! And Goggle
marketer can search specific competitor name, event, or trend and see what turns up.
Marketing Research:- In addition to information about competitors and environmental happening ,
marketers often needs formal studies of specific situation. For e.g. Toshiba wants to know how many
and what kind of people or companies will buy its new super fast notebook computer. So its marketing
manager needs marketing re4search.
Marketing research is the systematic design, collection, analysis and reporting of data relevant to a
specific marketing situation facing an organization. Every marketer needs relevant research. Marketing
researcher engage in a wide variety of activities, ranging from market potential and market share
studies, to assessment of customer satisfaction and purchase behavior, to studies of pricing, product,
distribution and promotion activities.
3. Distributing Information:- Marketing Information has no value until managers use it to make better
marketing decision. The Information gathered through MIS must be distributed to the right Marketing
manager at the right time.
Most companies have centralized Marketing Information System that provide managers with regular
performance report, intelligence updates, and reports the results of studies. In most companies today,
Marketing managers have direct access to the information m=network, at any time and from virtually
any location.
Marketing managers often take up formal marketing studies of specific problems & opportunities. They
may request a market survey, a product preference test, a sales forecast by re4gion or an advertising
evaluation.
Marketing research is the systematic design, collection, analyses & reporting of data and findings
relevant to a specific marketing situation facing the company.
Process of Marketing Research:Define the problem & research objective
Develop the Research Plan
Collect the Information
Analyze the Information
Present the findings
Make the decision
Conclusion:- So, In order to produce superior value and satisfaction for customer, Companies needs
information at almost every turn. Today marketers are viewing information not just as an input for
making better decision but also as an important strategies assets and Marketing tool. So in rapidly
changing environment, managers needs more up-to-date information to make timely decision which
only marketing information system can provide.
Ques 7:- What do you mean by Personal Selling? Discuss the Personal Selling Process.
Ans:- Personal Selling:- Personal Selling is the Interpersonal arm of promotion mix. Advertising consists
of one-way, non-personal communication with target customer groups. In contrast, personal selling
involves two-eway, personal communication between salespeople and individual customers whether
face to face, by telephone or by other means.
Sales people can probe customers to learn more about their problems. They can adjust the marketing
offer to fit the special needs each customer & can negotiate terms of sale.
Personal Selling Process:- Most companies take a customer oriented approach to personal selling. The
train sales people to identify customer needs and to find solutions. This approach assumes that
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customer needs provide sales opportunities, that customers appreciate good suggestions, and that
customers will be loyal to salespeople who listen to their concerns, understand their needs and respond
with right products & services.
MAJOR STEPS IN EFFECTIVE PERSONAL SELLING
Prospecting &
qualifying
Handling Objections
Pre-approach
Pre4sentation &
demonstration
Approach
Closing
Follow-up
1. Prospecting & Qualifying:- The first in personal selling is prospecting – identifying, qualified,
potential customers. Approaching the right potential customers is crucial to selling success.
The sales people most often approach many prospects to get just a few sales. They can ask current
customers for referrals. They can search for names in newspapers or directories to track down leads.
Salespeople also need to know how to qualify leads – that is how to identify the good one and screen
out the poor one.
2. Pre Approach:- Before calling on a prospect, the sale person should learn as much as possible
about the organization and its buyers. This step is known as pre approach.
3. Approach:- During the approach step, the sale person should know how to meet & greet the buyer
to get the relationship off to a good start. This step involves the sales person’s appearance, opening
li9ne, and the follow up remarks. The opening lines should be positive.
4. Presentation & Demonstration:- During the presentation, the sales person tells the story to the
buyer, showing how the product will make or save money. The sales person describes the product
features but concentrates on presenting customer benefit. In demonstration various demonstrations
aids such as booklets, flip charts, slides, videotape, product sample are used because if buyer see or
handle the product, they will better remember its features and benefits.
5. Handling Objection:- Customer almost have objection during the presentation or when asked to
place an order. The problem can be either logical or psychological, and objection is often spoken. In
handling objection the sales person seeks out, clarifies and overcomes customers objection to buying.
6. Closing:- After handling the objections, the sale person now tries to close the sale. In those step
the sales person asks the customer for an order. The sales person may offer the buyer special reasons
to close, such as a lower price or an extra quantity at no charge.
7. Follow-up:- The last step in the selling process is necessary if the sales person wants to ensure
customer satisfaction and repeat business. Right after closing the sales person should complete any
detail on delivery time., Purchase terms and other matters. The sales person then should schedule a
follow up call when the initial order is received to make sure there are proper installing, instruction and
services.
(B) ADVERTISING:Advertising is any paid form of non-personal presentation and promotion of ideas goods or services by
an identifiable sponsor. Advertisements are a cost-effective way to disseminate messages to the target
audience.
Advertisers may be:
Business Firms
Museums
Charitable Organizations
Govt. agencies
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Process of Advertising (Kotler’s Five M’s of Advertising)
Message
- Message generation
- Message evaluation
- Message selection
- Message execution
- Social responsibility review
Money
Factors to consider
- Strategic in PLC
- Market Share & consumer Base.
- Competition & Culture
- Advertising frequency
- Product Substitutability
Mission
- Sales goals
- Advertising Objectives
- Informative
- Persuasive
- Reminder
- Reinforcement
Media
- Reach, Frequency, Impact
- Major media types
- Specific media vehicles
- Media timing
- Geographical media allocation
Measurement:
Communi9cation Impact

Sales Impact
Types of Advertising Department:A.
In House Advertising:(i)
Advertiser
(ii)
Advertising department/ Team
B.
Out House Advertising:(i)
Advertiser
(ii)
External Advertising Agency
In developing an advertising program, marketing managers must always start by identifying the target
market and buyer motives.
( C ) Sales Promotion:Page No. 19/26
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Acc to Kotler:- “Sales promotion consist of a diverse collection of incentive tools, mostly short term,
designed to stimulate quicker or great purchase of particular products or services by consumer or the
trade”.
Whereas advertising offers a reason to buy sales promotion offers an incentive to buy
Objectives of Sales Promotion:1.
Creating a long-term relationship with a retailer
2.
Attract new trails
3.
Reward loyal customers
4.
Increase the repurchase rates of occasional users
5.
Attract brand switchers
Decisions in Sales Promotion:(I)
Establishing Objectives:Encouraging purchase of large sized units.
Building trails among nonusers
Attracting switchers
Persuading retailers to carry new items
Encouraging stockings of inventory
Offsetting competitive promotions
Stimulating off season sales
Encouraging support of a new product
(II)
Selecting Consumer Promotion tools:Samp0les
Coupons
Cash refund offers
Gifts
Contests
Free trials
Frequency program
(III)
Selecting Trade Promotional Tools:Price offs
Allowances
Free goods
Free holiday packs
(IV)
Selecting Business & Sales Force Promotion Tools:Trade shows
Conventions & seminars
Sal4es contests
Specially advertising
(V)
Developing the program:
Budget
Media
Timings
Pretesting the Program
Implementing the program
Controlling & evaluating the program
(D) Public Relation:- Acc to Phillip Kotler “A public is any group that has an actual or potential interest
in or impact on a company’s ability to achieve its objectives”.
Public relations involve a variety of programmes designed to promote or protect a company’s image or
its individual’s products.
An effective public relation department spend time counseling top management to adopt positive
programs and to climate questionable practices so that negative publicity does not arise at first place.
Acc. To Kotler, the public Relations department performs the following five functions: 1.
Press Relations:- Developing positive relations with the media by presenting news & information
about the organization in a very positive mood.
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2.
Product publicity:- This aims at promoting a given product of the organization by making efforts
directed to the product e.g. “Lux Zee cine Awards”.
3.
Corporate Communication:- Effort can made to promote communication both within and outside
the organization. This helps in building on open organization & a healthy rapport with the concerned
groups.
4.
Lobbying:- This is an effort at the end of the business organizations to build a rapport with
legislation and the government officials to promote or defeat a given legislation and regulation.
5.
Counseling:- The department of public relations also take up the task of advising the
management about public issues and the efforts, which the company may do
Position of the company Vis-à-Vis Steps to. the competitors.
Steps to be taken by the company in terms if good or bad issues.
For e.g. when Pepsi & coke were faced with the issues alleged pesticides residue in the soft drinks,
very active role was played by the public Relations Department to set its image right and defined its
brand.
Promote Mix:
Advertisement

Public relations

Personal Selling

Direct6 Marketing

Sales Promotion

E-Marketing
Ques 8:- What do you mean by Marketing Environment? How an organization can scan
its environment?
Ans:- Successful; companies take an outside-inside view of their business. They recognize that the
marketing environment is constantly presenting new opportunities and threats & they understand the
importance of continuously monitoring & adopting that environment. So it is very important for an
organization to know what are the various environmental forces that are operative in its environment &
how to continuously monitor them.
Marketing Environment:A company’s marketing environment consists of the actors & forces outside marketing that affect
marketing management’s ability to develop & maintain successful transaction with its target costumes.
The Marketing environment is made up of
Micro Environment:- The micro environment of an organization consists of the forces close to the
company that affect its ability to serve its customers the company, suppliers, marketing, channel firms,
customers, competitors & Publics.
(a)
Internal Environment – company
(b)
External Environment – Suppliers, marketing channel firms, customers, competitors & publics.
Macro Environment:- The macro environment of an organization consists of the larger societal forces
that affect the micro environment – demographic, economic, natural, technological, political and cultural
forces.

Micro Environment:Internal Environment:- Marketing Management’s job is to attract & build relationships with customers by
creating customer value & satisfaction. However, marketing managers cannot accomplish this task
alone. Their success will depend upon other actors in the company’s microenvironment & these factors
are:
Finance
R&D
Company’s
internal
environment
Purchasing
Manufacturing
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Accounting
Top Management sets the company’s mission, objectives, broad strategies & policies. Marketing
managers make decision within the plans made by top management before they can be implemented.
Marketing managers must also work closely with other departments of the company like:

Finance is concerned with finding & raising funds to carry out the marketing plan.

The R & D department focuses on designing safe & attractive products.

Purchasing department worries about getting supplies & materials.

Manufacturing department is responsible for manufacturing the desired quality & quantity of
product.

Together, all of these departments have an impact on the marketing dptt’s plan & actions. So all
the departments must ‘think consumer’ & they should work in harmony provide superior customer value
& satisfaction.

(B) EXTERNAL environment:
Marketing Channel firms
Customer markets
Company’s
external
environment
Competitors
Publics
Suppliers:- Are an important link in the company’s overall customer value delivery system. They provide
the resources needed by the company to produce its goods & services. Marketing managers also must
watch supply availability-supply shortage or delays, labour strikes and their events can cost sales in the
short run and damage customer satisfaction in the long run.

Marketing Channel Firms:- helps the company to promote, sell and distribute its goods to final
buyers. They include
i.Reseller are distribution channel firms that help the company find customers or to make sales to them.
1.
Physical distribution firms help the company to stock and move goods from their points of origin
to their destinations. Working with warehouses and transportation firms, a company must determine the
way to store and ship goods, balancing factors such s cost, delivery, speed and safety.
2.
Marketing services agencies are the marketing research firms, advertising agencies, media
firms and marketing-consulting firms that help the company to marketing services agencies amongst
several existing because these firms very in creativity, quality, service and price.
3.
Financial intermediary include banks, credit companies, insurance companies and other
businesses that help finance transactions or insure against the risk associated with the buying & selling
of goods.

Customer Markets:- The company needs to study its customer markets closely. There
are 5 types of customers service:1.
Consumer markets – consist buyers who buy for personal consumption.
2.
Business markets – consist buyers who buy goods for further processing.
3.
Reseller market – consist buyers who buy goods to resell at a profit.
4.
Government market – buys goods for to produce public services.
5.
International Market:- it consists of buyers from different countries including consumers,
producers, resellers and govt. across the National Boundaries.

COMPETITORS:The marketing concept says that to be successful, a company must provide greater customer value &
satisfaction than its competitors do, so they must gain strategic advantage by positioning their offerings
strongly against competitors offering in the minds of consumers.
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
PUBLICS:- A public is a group that has an actual or potential interest in or impact on an
organizations ability to achieve its objectives like:1.
Financial publics include: banks, investment houses & stock holders.
2.
Media publics include: Newspapers, magazines, televisions, channels & r4adio.
3.
Citizen action publics include: consumer organizations, environmental groups, minority groups,
others
4.
Internal publics include: workers, managers & board of directors.
5.
Local publics include:- Neighborhood residence & community organizations.
(II) MACRO ENVIRONMENT:Demographic
Economic
Natural
Forces in
Macro Env.
Technological
Political
Cultural
I.DEMOGRAPHIC ENVIRONMENT:- The demography is the study of human population in terms of size,
destiny, location, age, gender, race, occupation & other statistics. The demographic environment is of
major interest to marketers because it involves people, & people make up the markets. It includes:
Worldwide Populati0on Growth
Population Age-mix
ETHNIC markets
Educational Groups
Household groups
Geographic shifts in population
II.ECONOMIC ENVIRONMENT:- marketers require buying power as well as people. The economic
environment consists of factors that affect the consumer purchasing power & spending patterns.
Marketers must pay close attention to the purchasing power & spending patterns both across & within
their markets. It includes the study of Income Distribution Savings, Debt & Credit availability.
III.NATURAL ENVIURONMENT:- It involves the natural resources that are needed as inputs by marketers
or that are affected by marketing activities. Marketers should be aware of several trends in the natural
environment:
a)
Involves growing shortage of raw materials.
b)
Increased pollution
c)
Increased govt. intervention in natural resources management
IV.TECHNOLOGICAL ENVIRONMENT: The technological environment includes forces that create new
product and market opportunities. It has released wonders such as Antibiotics, organ transplant,
Internet etc. Technological environment changes very rapidly thus marketers should watch the
technological environment closely to keep up with the change.
V.It includes the understanding of
Accelerated pace of change
Unlimited Opportunities for innovations
Increased regulation of technological change
VI.It includes the institution and other forces that affect society’s basic values, perception, preferences and
behavior. The cultural characteristics can affect marketing decision-making so marketers should closely
watch cultural environment. This environment consists of:Varying core cultural values & beliefs
Shifts of secondary cultural values through time.
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VII.POLITICAL ENVIRONMENT:-It includes laws, govt. agencies & pressure groups that influences & limit
various organizations & individuals in a given society. The marketers should understand the legal
issues & the common ethical concerns that they face:
Legislation regulating business
Growth of special interest groups
PROCESS OF ENVIRONMENTAL SCANNING
Select the appropriate Environmental Variable
Collect Information & Project Changes in Environment
Assess how change will affect Market + vely / -vely
Change those things that can be controlled to maximize positive
Impact & Minimize negative impact.
Ques 9:- Discuss new Issues in Marketing:(I) Globalization (II) Consumerism (C) Green Marketing
Ans:(I) Globalization: - Globalization as the growing economic interdependence of countries world wide through
increasing volume & variety of cross boarder transactions in goods and services & of international capital flows &
also through the more rapid & wide spread diffusion of technology.
A global firm is that which operates in more than one country, gains production, R & D, marketing & financial
advantages in its cost & reputation that are not available to purely domestic competitors.
Drivers of Globalization:- Globalization represents the increasing integration of world economy, based on 5
interrelated drivers of change:
1. International Trade:- lower trade barriers & more competition
2. Financial Flows:- FDI, technology transfer/ licensing, portfolio investment & debt
3. Communication:- traditional media& internet
4. Technological advances:- in transportation, electronics, bope4ngineering & related fields
5. Population mobility:- especially of labour.
Foreign Market Entry Strategies: One a company has decided to sell in a foreign country, it must determine the
best mode of entry.
LOW
Exporting
Joint venturing
Direct Investment
Indirect
Direct
Licensing
Contract manufacturing
Management contracting
Joint ownership
Assembly facility
Manufacturing facility
HIGH
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Amount of committement, risk, control & profit potential
1.
2.
3.
4.
5.
6.
Exporting
Licensing
Contract Manufacturing
Management Contracting
Joint Ownership
Direct Investment
PRODUCT
Don’t change product
P
R
O
M
O
T
I
O
N
Adapt Product
Develop new Product
1. Straight extension 2. Communication
4. Dual Adaptation
3.Product Adoption
5. Product Invention
Product Strategies:1.
Straight Extension means marketing a product in foreign market without any change.
2.
Product Adaptation means adapting a product to meet local conditions/ wants in foreign
markets.
3.
Product invention means creating new products/ services for foreign markets.
Promotion Strategies:1.
Communication Adaptation means a global communication strategy of fully adapting advertising
message to local markets.
Distribution Channels:-
Seller
Seller’s
Headquarters’
Orgs. For
International
Marketing
Channels
between
nations
Channel
within
nations
Final User
Whole Channel For International Marketing
Companies today can no longer afford to pay attention to their domestic markets, regardless of its size.
Many industries are global industries & firms that operate globally achieve lower cost & higher brand
awareness. At the same time, global marketing is risky because of variable exchange rates, unstable
govt., protectionist tariffs & trade barriers. Given the potential gains & risks of globalization, companies
need a strategy to make their global marketing decisions.
Page No. 25/26
AIM COLLEGE, HISAR
MARKETING MANAGEMENT (CP-203)
92533-50008, 94164-43238
2. Consumerism:- This is an organized movement of citizens & government agencies to improve the
rights and power of buyers in relation to sellers.
Traditional Seller’s rights include:1.
The right to introduce any product in any size and style, provided it is not hazardous to personal
health or safety; or; to include proper warnings & controls.
2.
The right to change any price for any product, provided no discrimination exists among similar
kinds of buyers.
3.
The right to spend any amount to promote the product, provided it is not defined as unfair
competition.
4.
The right to use any product message, provided it is not misleading or dishonest in content or
execution.
5.
The right to use any product buying incentives schemes, provided they are not unfair to
misleading.
Traditional Buyer’s rights include:1.
The right not to buy a product that is offered for sale.
2.
The right to expect the product to be safe.
3.
The right to expect the product to perform as claimed.
Comparing these rights, many believe that the balance of power lies on the seller’s side. True,
the buyer can refuse to buy. Buy critics feel that buyer has to little information, education and
protection to make the wise decision when facing sophisticated sellers.
Consumerism calls for the following additional consumer rights:
1.
The right to be well informed about important aspects of the product. It includes the right to
know:

The integradents in a product (integridiant labeling).

The true cost per unit of the brand (unit pricing).

The nutritional value of foods (nutritional labeling).

Product freshness (date of manufax=cturing & expiry labeling)

The true benefits of the product (truth in advertising)
2.
The right to be protected against questionable products & marketing practices. It includes
strengthening consumer rights in cases of business fraud, requiring greater product safety &
giving more power to govt. agencies.
3.
To right to influence products and marketing practices in ways that will improve the “quality of
life”. It includes:
 Controlling the integredients that go into certain products and packaging.
 Reducing the level of the advertising noise, and
 Putting the consumer representatives on company boards to protect consumer interest.
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