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Principles of Marketing (MGT301)
Identify the marketing concept in each of the following cases. Possible answers are
given in the end.
1.
Wapda charges low rate for each unit consumed for
electricity for first hundred units. And charges higher rate for
further units. Or Wapda offers a facility to those consumers
who consume less than 50 units of electricity and their monthly
bill is less than Rs.70 per month, to submit their electricity bills
after two months so that they can avoid long queues in the
banks for submission of bills every month.
2.
McDonald’s devoted much of a recent annual report to the
company’s concern for the environment. Included in the report were
discussions of the company’s program for solid waste management,
resource conservation, and recycling. The annual report was printed
entirely on recycled papers.
3.
United Bank Limited has offered UBL Ameen Islamic
Banking (Islamic Banking for all). Vision Statement of UBL Ameen Islamic
Banking is
i. To provide exceptional products and services based on Islamic doctrine.
ii. To cater to all religions & sects, races and colors, ethnicity and cultures in the
true spirit of equality.
iii. To be the change agent in the global financial industry, aiming ethical
solutions.
4.
Shakarganj Mills Limited operates in four segments: Sugar,
Textile, Ethanol and Building Material. The company's wholly
owned subsidiary Shakarganj Food Products Limited (SFPL) has
launched its brand of milk “Good Milk” in June 2006 and has been well received in
the market.
5.
Bareeze runs the largest chain of textile retail stores in Pakistan. It
opens its franchises in Sahiwal, Sargodha, Gujranwala and Rahim Yar Khan.
6.
PTCL charges a fixed amount as a line rent each month and Rs. 2.31
per 5 minutes a local call after that.
7.
Lays (Potato chips) when offered in Pakistan were priced Rs.15 but
now the price is reduced to Rs. 10.
8.
After receiving Brand of the Year Award 2006, K & N’s
Chicken offers to save Rs.10 on every pack.
9.
Utility Store Corporation of Pakistan committed to provide
clean, graded, hygienically fit, unadulterated genuine food and
non-food items to the public and especially to the poorer
segments of the society, at comparatively cheaper rates than the
market and to offer them a pleasant environment of mutual
confidence while making their purchases. It is also committed
towards its obligation to provide economic relief to the public
by playing its role as a price moderator and deterrent to profiteering, hoarding and
black-marketing.
10.
Atlas Honda Limited is a joint venture between the
Atlas Group and Honda Motor Co., Japan. The company was created by the merger
of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these motorcycle
manufacturing concerns were established by the Atlas Group.
Marketing Concepts:
Super Stores
Skimming Pricing
Demarketing
Market Segmentation
Societal Marketing
Product Development
Sponsorship
Two part pricing
Penetration Strategy
Discount Stores
Diversification
Co-Branding
Sales Promotion
Market Development
Solution:
1. Demarketing is marketing to reduce demand temporarily or permanently; the aim is
not to destroy demand but only to reduce or shift it. Wapda offers these services to
encourage reduction in the electricity consumption, so it applying the concept of
Demarketing.
2. The societal marketing concept holds that the organization should determine the
needs, wants, and interests of target markets. It should then deliver the desired
satisfactions more effectively and efficiently than competitors in a way that maintains or
improves the consumer’s and the society’s well being. As McDonald’s is showing its
concern for society’s well being by using such programs as solid waste management,
resource conservation, and recycling, it is following the societal marketing concept.
3. Product Development is a strategy for company growth by offering modified or new
products to current markets. Product development means offering new or improved
products for present markets. As UBL offers UBL Ameen banking for all, (to cater to all
religions & sects, races and colors, ethnicity and cultures in the true spirit of equality),
i.e., they are offering a new product, Islamic banking, to its present customers, it is
making product development.
4. Diversification is a strategy for company growth by starting up or acquiring businesses
outside the company’s current products and markets. Diversification means moving into
totally different lines of business perhaps entirely unfamiliar products, markets, or even
levels in the production-marketing system. Since Shakarganj offers “Good Milk”, a new
product, different from its other lines of businesses, it is making diversification.
5. Market Development is a strategy for company growth by identifying and developing
new markets for current company products. Market development means trying to
increase sales by selling present products in new markets. Bareeze is opening its new
branches in the cities, where it was not present before, so it is making market
development.
6 When the price of the service is broken into a fixed fee plus a variable usage rate, it is
called a two part pricing. As, PTCL divides the phone bill into two part, a fixed line rent
and a variable amount per call, it is applying two part pricing strategy.
7. Many companies that introduce new products initially set high prices to "skim"
revenues layer by layer from the market. Since the product’s image and quality support
its high price, people are willing to pay that high price. It is called Skimming Pricing.
As Lays’ (a product of Frito Lays) is of good quality and has a good image in the market,
people supported its high price when it was offered in Pakistan.
8. Sales Promotion includes a wide assortment of tools—coupons, contests, cents-off
deals, premiums, and others—all of which have many unique qualities. They attract
consumer attention, offer strong incentives to purchase, and can be used to dramatize
product offers. As K & Ns offers discount of Rs. 10 on every pack, this will attract
customer’s attention.
9. Discount Stores sell standard merchandise at lower prices by accepting lower margins
and selling higher volume. As Utility Store sell products at cheaper rates than the market,
it is a discount store.
10 Co-Branding occurs when two companies go together and manufacture one product.
Combined brands create broader customer appeal and greater brand equity. As Atlas
Honda Limited is a joint venture between the Atlas Group and Honda Motor Co., Japan,
it is co-branding.