mb0030-marketing management [solved] set-2

8/9/2019 MB0030-Marketing Management [SOLVED] SET-2

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ASSIGNMENTS - MBA II SEMESTER

MB0030 (4 CREDITS)

SET 2

MARKETING MANAGEMENT

Q.1:- a. Give a short note on bases of Segmentation.

b. Analyze the pricing methods with relevant examples

Ans:- Bases for Segmenting Consumer Markets

1. Geographic segmentation: Dividing the market into different

geographical units such as nations, states, regions, cities or neighborhoods.

The company can operate in one or a few Geographic areas or operate in all

but pay attention to local variations. For example, Bennett, Coleman and co

Ltd divided markets according to geographical units for their tabloids.

In Bangalore the tabloid is known as Bangalore Mirror where as it is

Mumbai Mirror in Mumbai.

2.

Demographic Segmentation: In demographic segmentation the market is divided into groups on the basis of variable such as age, family size, family lifecycle,

gender, income,

occupation, education, religion, race, generation, nationality and social class.

Demographic variables are the most popular bases for distinguishing customer

groups. One reason is that consumers wants, preferences and usage rates are

often associated with demographic variables. Demographic variables are easy

to measure. Even when the target market is described in non-

demographic terms, the link back to demographic

characteristics is needed in order to estimate the size of the

target market and the media that should

be used to reach it efficiently. Some of the demographic variables used are :

(a) Age and LifeCycle Stage: Consumers wants and abilities change with

age. On the basis of age, a market can be divided into four parts viz.,

children, young, adults and old. For consumers of different age groups,

different types of products are produced. For instance, different types

of readymade garments are produced for consumers

of different age groups. A successful marketing manager should

understand the age group for which the product would be most suited

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1. Marketing objectives: There are four major objectives on which

prices are determined. They are survival, current profit maximization, Market

share leadership and product Quality leadership. Survival strategy adopted

when company is facing stiff competition

from the competitors and it wants quick reaction and recovery. Current profitmaximization strategy is used to defend the market position. To explain,

assume

a company is operating in the lubricants business. Its sales and market share are ve

ry high. It always tries to hold their current position. To do this it increases the price o

f the product. The next objective is market share leadership. Here, company

strives to achieve the leadership position in the market. It reduces the price

of the product so that more number of customers buys the product. Through

volume generation company gets the market leadership position. Product

quality leadership objective is used when company decides to come with

high quality product and premium price. The intention

of the company is to cater to the needs of the niche segment.

2. Costs: The cost of marketing and promoting the product will have direct

impact on the price. For example, Airline fuel cost went up recently. All airline

companies increased the price of the ticket. Company will be incurring

fixed cost

(plant, Machinery etc...) as well as variable cost (Raw material, labor etc) The fixed

cost will go down if the number of products produced increases. The variable cost of

the product decreases if the product

is produced up to optimal level and then once again it goes up. Hencethe total cost (fixed cost plus variable cost) vary according to both fixed cost and

variable cost. Marketer is interested in knowing the break even analysis when

he introduces

the product in the market. The break even point for a product is the point where total

revenue received equals the total costs associated with the sale of the product (TR=

TC). A break even point is typically calculated for businesses to determine whether it

would be profitable to sell a proposed product, as opposed to attempting to modify a

n existing product instead so it can be made lucrative. BreakEven Analysis can also

be used to analyze the potential profitability of an expenditure in a sales-

based business.

3. 4Ps of marketing:

The price of the product is determined by the other marketing mix elements

also. Product influences the price level i.e. if the product quality is very

high company would like to price it high and vice versa. The new product

requires aggressive promotion and results

in higher promotion cost and higher price. Supply chain

management also plays an important role in the price determination. If the

organization able to integrate their supply chain well then it will behaving distribution advantage than others. Let me explain these concepts

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2. Reduction in per unit cost Advertising enables a businessman to increase

the sales of the product.

3. Increase in employment Advertising increases the sales volume of goodsand provides employment to a large number of workers.

4. Change in the living habits An effective advertisement brings about a rapid

change in the habits and attitudes of people.

5. Elimination of middleman Advertising awakens interest and provides utility

of goods far and wide in the country.

6. Acceptance of new products It introduces new products to the customers.

7. Virtues of thrift It has a great educative value. It teaches the people the

benefits of thrift and their responsibility to their dependents.

8. Institutional management Advertising helps in building up a favourable

image of the country.

Some other benefits are: Sales of entire line of product Increasing the sales of

entire industry Advantages to consumers Encourages competition Social benefits.

Demerits of Advertising

Various objections against it may be listed as follows:

1. Economic Objections

(a) Advertising is not productive. It is true that it does not produce any

tangible goods. It is said to involve wasteful expenditure.

(b) It forces people to desire and buy goods, which, in fact, are not withintheir means.

(c) It increases the cost of goods. Advertising charges are included in the

price, which the consumer has to pay.

(d) Advertising results in monopoly. The consumer becomes a slave to a

particular brand.

2. Social Objections

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(a) Most of the advertisements contain tall claims and the consumers do

not enjoy the benefits advertisement in full. They are shortlived only.

(b) The press is influenced by the advertisers because they provide major

revenue for the existence of newspapers.

3. Ethical Objections

(a) Advertising appeals make people to use such articles, which may affect

their health. For example alcoholic drinks and cigarettes.

(b) People with less purchasing power cannot afford to buy articles even

though advertisements create a strong need in them. Thus a section of

society remains discontented. Whatever may be said against advertising, it is

increasingly used almost in every branch of business to promote sales. It isnot merely a means of sales promotion but today it has become a science

equivalent to any other social science.

Other disadvantages of Advertisement These are the disadvantages

of advertising:

1. Increases the cost: It increases the cost of goods. The cost of the

advertisement is included in the price and is ultimately borne by the customers.

2. Misleads the public: It misleads the public by giving false statements about

the product. (It may be true in some cases but majority of advertisers know the value

of honest statements.)

3. Creates a dissatisfaction: It creates tastes and desires for some people

whose income may not allow them to buy. Such people feel dissatisfied.

4. Creates a monopoly: It increases monopolistic trend. Due to advertisement

some manufacturers create monopoly in industry and thus reduce healthy

competition. It becomes difficult for new firms to enter the field.

5. Creates the confusion: It creates the possibility of wrong purchases. Being

impressed by the advertisement, in some cases, a person is not able to purchase the

commodity, which he actually wants to purchase.

6. Encourages luxury: This encourages luxury. Mostly the commodities related

to comforts and luxuries are advertised, for example, cigarettes, cosmetic goods and

etc. due to advertisement of cigarettes several persons start smoking cigarettes,

which becomes habit.

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7. Reduces cleanliness: It reduces cleanliness. Large number of posters and

writings on the walls are used for advertisement. This makes the roads and the walls

of the houses look dirty. Thus, it reduces the natural beauty.

8. Causes wastage: It is a cause of wastage of natural resources. As a resultsof advertisement, style and fashion change quickly. It makes the goods out of

fashion.

Marketer The marketer divides the market into homogeneous sub markets by

understanding the needs, perceptions and expectations of the consumers. On

the basis of segmentation, the company will prepare and follow different

marketing programs for different segments to ensure better customer

relationship. Marketer divides the market into distinct groups of buyers who

have similar preferences. These groups are called segments with their own

specific demographic, psychographic and behavioral

characteristics. The marketer decides as to which of these segment or segments off

er highestopportunity for his company. For each of these target markets, the firm de

velops a product / service suited to their needs. TATA group has recently designed

an economy car called NANO is priced around Rs.1 Lakh. The target market for thi

s car is all aspirants who dream of owning a car but cannot afford cars

which are now available for minimum Rs.2.5 Lakh. A Target Market is the

group of people at whom a marketer targets his

marketing efforts to sell his goods and services.

Marketers must examine the changing needs of the customer.

This process provides opportunity to examine whether customers are satisfied with

the existing products or not. If they are not satisfied what are the

features they are looking at. It also helps to test the

innovative concepts that company has, commercially viable or not. For example,

Titan, wrist watch manufacturer from Tata group should analyze whether

customer are satisfied with the time accuracy in the watch. It should

also analyze what are the other features customer is looking in the watch. It

may be style, calculator, voice recorder, jewels studded or pulse monitor. In

this case, time accuracy

became existing want and other features become future wants.

Decisions involved on the suitable media in setting up a channel Marketer

should consider various factors before deciding the particular type of channel. It

may be company or competitive factors. The type of goods to be transported

and stored will decide the length and intensity of channel. To decide on the

particular channel, marketer will take following decisions.

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1. Understanding the customer profile: Purchasing habits differs from

individual to individual. Individuals who face

shortage of time would like to purchase on the net (direct channel) and who

have abundance of time would like to experience the shopping.

Some of them would like to have variety of goods while others want unique orspecialized products. Hence marketer should understand who are his customers?

How do they purchase? For example, customer dont like to travel half a kilometer

to purchase a shampoo sachet but he dont mind travelling two kilo meters while

purchasing durable goods.

2. Determine the objectives on which channel to be developed.

(a) Reach: Company would like to make the goods available in most of the

retail outlets. It will adopt intensive distribution channel.

(b) Profitability: Company wants to reduce the cost in the channels and e

nhance their profitability. It

will restructure the channel to optimum level so that it can reduce

the cost and increase the profit.

(c) Differentiation: Company positions their products differently. When

most of the industry players follow conventional system, company goes

with new format of channels. For example, all computer manufacturers

were adopting dealer retailer channel to sell their products but

Dell started selling its product on the internet.

3. Identify type of channel members: Once the objectives are set on

the basis of companys

policies, it will analyze which type of the channel best suits. Merchants, agents

and resellers are some intermediaries involved in the distribution. Merchants are

those who buy the product, take

title and resell the merchandise. Agents will find the customers,

negotiate with them but do not take the title of the product. Facilitators are the people

who aid the distribution but do not negotiate or take the title of the product.

4. Determining intensity of distribution: Intensity of distribution means how

many middlemen will be used at the wholesale and retail levels in a particular

territory. If the numbers of intermediaries

are excess then the cost of the channel will increase vice versa

if the number of intermediaries

are less then company will not be able to meet all target

customers. Therefore company should adopt optimum number of intermediaries.

On the basis of how many intermediaries required, company can adopt any

one of the following strategies.

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(a) Intensive distribution: A strategy in which company stocks goods i

n more number of outlets. The intention is to make the goods available near

to the customer. For example, you can find Parle-

G glucose biscuits available in almost all the

retail outlets in rural and urban areas.(b) Selective distribution: A strategy in which company stocks

goods in limited number of

retail outlets. For example, televisions are sold only in selected

retail outlets. TVs cannot be sold like toothpaste. Onida TVs are available

in electronic retail shops like Viveks, Girias, Next, Ezone etc

(c) Exclusive distribution: In this type of channel format marketer

gives only a limited number of dealers the excusive right to distribute its

products in their territories. For example, a Kaya skin

care solution of Marico was marketed through exclusive distribution.

5. Assigning the responsibilities to channel members.

Company should define the territory

in which channel member should operate, at what price he should sell, services he

should perform, and how he should sell.

6. Selecting the criteria to evaluate the channel member: company may

have different types of channel alternatives. It would like to choose any one

of the alternatives, which meets

its objectives. Channels can be evaluated in the design phase by themethod called SCPCA.

(a) Sales(S) The ability of each channel member to generate the sales

for company in a given period.

(b) Cost(C) how much cost each channel alternatives incur?

Which one of the alternative provides the optimum solution?

(c) Profitability (P) various channel alternatives available to the

company and their

profitability shall be compared. Company with better profitability shall be

selected.

(d) Control (C) Every company would like to have better control

over its channel members. Alternative channels can be evaluated on

the basis of how much control each

channel member desires? And how much control the company is

willing to provide?

(e) Adaptability (A) Marketing is dynamic world. Competition exerts

pressure on companies

to relook at their practices and supply chain continuously.

The channel alternatives should be flexible enough to meet the changing

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requirements. Whichever channel alternative

meets such objectives shall be selected.

Example: Radio

Benefits

1. A universal medium. Can be enjoyed at home, at work, and while driving.

Most people listen to the radio at one time or another during the day.

2. Permits you to target your advertising dollars to the market most likely to

respond to your offer.

3. Permits you to create a personality for your business using only sounds and

voices.

4. Free creative help is ususally available.

5. Rates can generally be negotiated.6. Least inflated medium. During the past ten years, radio rates have gone up

less than other media.

Demerits

1. Because radio listeners are spread over many stations, to totally saturate your

market you have to advertise simultaneously on many stations.

2. Listeners cannot refer back to your ads to go over important points.

3. Ads are an interruption to the entertainment. Because of this, radio ads must

be repeated to break through the listener's "tune out" factor.

4. Radio is a background medium. Most listeners are doing something else while

listening, which means your ad has to work hard to be listened to and understood.

5. Advertising costs are based on ratings which are approximations based on

diaries kept in a relatively small fraction of a region's homes.

Q.3:- Write a note on new product development and product mix.

Ans:- Product: A good, service, person, place, events ororganizations offered to consumers to

satisfy his need or want. A product may be person also. Here marketer tries to buy

and sell the celebrities or sports persons of a league or club etc For,

example, Board of

cricket control in India (BCCI) asks its Indian premier league (IPL) teams to buy Iconi

c players and foreign players for certain price.

Product development New products are essential for existing firms to

keep the momentum and for new firms they provide the differentiation. Newproduct doesnt mean that absolutely new to the world. It may

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be modification, or offered in the new market, or differentiate from existing

products. Therefore it is necessary to understand what are new products? New

Products are:-

1. They are really innovative: Googles Orkut a networking site whichrevolutionized social

networking. In this site people can meet like minded people; they can form

their own groups and many more.

2. They are very different from the others: Haier launches pathbreaking 4-

Door Refrigerators First time in India.

3. They are imitative; these products are not new to the market but new

to the company. For example, cavin Kare launched ruche pickles. This

product is new to cavin kare but not to

the market. New product development process:

Stage 1: Idea generation: new product idea can be generated either from

the internal sources or external sources. The internal sources

include employees of the organization and data collected from the market. The

external source includes customers, competitors and supply chain members.

For example, Ingersoll rand welcomes new ideas from the General public

Stage 2: Idea screening: Organization may have various ideas but it should findout which

of these ideas can be translated into concepts. In an interview to Times of India,

Mr. Ratan Tata, chairman TATA group discussed how his idea saw many

changes from the basic version. He told that he wanted to develop car with

scooter engine,

plastic doors etc... But when he unveiled the car so many change were there in the p

roduct. This shows that initial idea will be changed on the basis of market requireme

nts.

Stage 3: Concept development: Concepts used for Tata Nano car are

Concept 1: lowend 'rural car,' probably without doors or windows and with plastic curt

ains that rolled down, a fourwheel version of the autorickshaw

Concept 2: a car made by engineering plastics and new materials, and using

new technology like aerospace adhesives instead of welding.

Concept 3: Indigenous, inhouse car which meets all the environment standards

Stage 4: Concept testing: at this stage concept was tested with the group of targ

et customers.

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Stage 5: Marketing strategy development: The marketing strategy development

involves

three parts. The first part focuses on target market, sales, market share and profit

goals. TATAs

initial business plan consisted sales of 2 Lakh cars per annum. The secondpart involves product rice, distribution and marketing budget strategies. TATAs fixed

Rs 1 Lakh as the car

price, and finding self employed person who works like agent to distribute the

cars. The final part contains marketing mix strategy and profit goals.

Stage 6: Business analysis: It is the analysis of sales, costs and profit estimate

d for a new

product to find out whether these align with company mission and objectives.

Product mix: The number of product line and items offered

by marketer to the consumer

A companys product mix has four different dimensions. They

are product mix width,

product mix length, and product mix depth and product mix consistency.

Product mix width: The total number of product line that

company offers to the consumers. For example, Jyothy laboratories product

mix has six lines. Hence width is 6

Product mix length: The total number of items that company carries within its

product line.

For example, Jyothy laboratories fabric care division has three items

Product line depth: The number of versions offered of each product

in the line. For example, Jyothy laboratories Jeeva Natural is offered in three

versions i.e. Coconut

Milk with Milk Protein, Coconut Milk with Jasmine and Coconut Milk with Kasturi

Manjal, and is presented in 75gm packs.

Product mix consistency: If companys product lines usage, production

and marketing are

related then product mix is consistent else it is unrelated. Incase of Jyothy

laboratories, all six product lines are FMCGs. Hence it is having consistent product

mix. But ITC Companys cigarette and cloth product line are totally unrelated.

Q.4:- Select any brand of toilet soap and evaluate its positioning strengths

or weaknesses in terms of attributes, benefits, values, brand name and brand

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equity. Also, examine how competitive brands influence the marketing

strategies of the selected soap.

Ans:- LUX Lux soap was first launched in 1916 as laundry soap targeted

specifically at 'delicates'. Lever Brothers encouraged women to home launder theirclothes without fear of satins and silks being turned yellow by harsh lyes that were

often used in soaps at the time. The flake-type soap allowed the manufacturer some

leeway from lye because it did not need to be shaped into traditional cake-shaped

loaves as other soaps were. The result was a gentler soap that dissolved more

readily and was advertised as suitable for home laundry use. Lux toilet soap was

introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a play on the

word "luxury." Lux has been marketed in several forms, including bar and flake and

liquid (hand wash, shower gel and cream bath soap). Lux in step with the changing

trends and evolving beauty needs of the consumers, offers an exciting range of

soaps and Body Washes with unique elements to make bathing time more

pleasurable. One can choose from a range of skincare benefits like firming, fairness

and moisturising. Lux stands for the promise of beauty and glamour as one of India's

most trusted personal care brands. Since its launch in India in the year 1929, Lux

has offered a range of soaps in different colours and world class fragrances. Lux is a

beauty soap of film stars. Lux recognized the need for a compelling message about

beauty that would resonate with women of today. From the 1930s right through to

the 1970s, Lux soap colours and packaging were altered several times to reflect

fashion trends. In 1958 five colours made up the range: pink, white, blue, green and

yellow.

People enjoyed matching their soap with their bathroom colours. In the early

1990s, Lux responded to the growing trend away from traditional soap bars by

launching its own range of shower gels, liquid soaps and moisturizing bars. Lux

beauty facial wash, Lux beauty bath and Lux beauty shower were launched in 1992.

In 2004, the entire Lux range was re-launched in the UK to include five

shower gels, three bath products and two new soap bars. 2005 saw the launch of

three exciting new variants with dreamy names such as Wine & Roses bath cream,

Glowing Touch and Sparkling Morning shower gels. Lux has recently launched its

two fruit extract variants New Lux Strawberry & Cream and Lux Peach & Cream

contain a blend of succulent fruits & luscious Chantilly cream. The most recent

addition in the brand is Lux Crystal Shine.

Study of LUX with respect to 4 Ps

1. Product A product is anything that can be offered to a market to satisfy a

need or want. Products that are marketed include physical goods, services,

experiences, events, persons, places, properties, organizations, information andideas.

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Product Classification

1. LUX is a Tangible, Non Durable Good on the basis of this classification.

2. LUX and other soaps fall into the category of Convenience Good

Sales Promotion Sales promotion, a key ingredient in marketing campaigns,

consists of a collection of incentive tools, mostly short term, designed to stimulate

quicker or greater purchase of particular products or services by consumers or the

trade.

Whereas advertising offers a reason to buy, sales promotion offers an

incentive to buy. Sales promotion includes tools for

Prominent Sales Promotion Schemes Used By LUX

1. Lux presented 30 gm gold each to the first three winners of the Lux Gold Star

offer from Delhi. According to the promotional offer that Lux unveiled in October

2000, a consumer finding a 22-carat gold coin in his or her soap bar got an

opportunity to win an additional 30 gm gold. The first 10 callers every week got a 30

gm gold each. The offer could be availed only on 100 gm and 150 gm packs of Lux

soap. Lux celebrated 75 years of stardom with the Har Star Lucky Star activity. All

wrappers of Lux had a star printed inside them. If the consumer found written inside

the star, any number from 1 to 5, she would get an equivalent discount (in rupees)

on her purchase from her shopkeeper. If the consumer found 75 years written

inside the star, she will get a years supply of Lux free.

Price segments of toilet soaps

Segment Price/weight

Premium > Rs. 15 / 75 gms

Popular Rs. 8-15/75 gms

Economy < Rs. 8 /75 gms

However, recently HUL has been forced to hike its price by one rupee, to Rs17 (for

100 gm), giving in to the pressures of inflation. This paves the way for competing

soap makers like Godrej Consumer Products (GCPL) to take price increases. Lux

has versions in all the three price segments:

Recent pricing of Lux (100 g) Lux Crystal Shine Rs 17 Lux Festive Glow Rs 15

Mini Lux Rs 5

STRENGTHS OF LUX

1. Strong Market Research (door to door sampling is done once a year in Urban

and Rural areas)

2. Many variants (Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts, Saffron,

Sandalwood Oil, and Honey to name a few)3. Strong sales and distribution network backed by HLL

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4. Strong brand image

5. Positioning focuses on the attractive beauty segment

6. Dynamically continuous innovation of the product and brand rejuvenation

new variants (Aromatic Glow and Chocolate Seduction and Lux White Spa body

wash) and innovative promotions (22 carat gold coin promotion Chance Hai)7. Perceived to have high value for money (strong brand promotion but relatively

lower price which is a winning combination in the popular segment)

8. Though it is in popular segment, it is having mass appeal/market presence

across all segments (15% of the soap market captured by Lux (sales / volume)

9. Unique advantage of having access to resources and assets of HLL

WEAKNESSES

1. Lux is mainly positioned as beauty soap targeted towards women, hence it

lacks unisex appeal

2. Usage rate/ wear rate is high and is generally mushy and soggy

3. Some variants like the sunscreen, International variant did not do well in the

market

4. Certain advertisements like the recent one with Shah Rukh Khan resulted in

controversial interpretations of the message of the advertisement and lead to some

loss of focus (of message of the advertisements)

5. Stock out problems - replenishment time is high in semi-urban/rural areas

6. Earlier positioning as the soap of the stars has somewhat alienated the

brand from a portion of the consumers especially in rural areas.

Q.5:- As a salesperson in a fast moving consumer goods company, what

kind of training and development methods do you feel are required? How

important is training for sales force and how can it be evaluated?

Ans:- Training is a continuation of selection. Having selected

the salesmen, there are two options.

They can be sent to the field directly with samples, order books etc., (born salesman

)

and/or they can be sent for training programme. Some people think that salesmansh

ip is born in man, but there are only born salesmen, like born doctors, lawyer, engine

ers, teachers etc. However all these people need training to

call them qualified, and so also is the case with salesman. A man may

have interest in the profession. The interest can be fully developed, through

proper training. One attains perfection,self development etc., through training.

Training means it is the process of perfecting the salesmen

for their work. Training programme are

organized procedure or methods through which knowledge as well as skill, for a

definite purpose, is acquired. By training, one can increase knowledge in a

particular field. The salesmanshipis not born but can be made effective through training.

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Training Methods: For imparting training to the salesman, different methods are bei

ng used. Broadly, these methods may be divided into two:

1. Group Training:

(a) Lecture Method: An expert or a lecturer speaks to trainee-

salesmen about the various aspects of selling. It consists of oral talk

in a classroom. This system is widely used. The trainees listen to the

lectures. The instructor invites questions and answers from them.

To make the lecture more interesting, visual aids, demonstration,

suitable examples may be added. This system is more economical,

and is the easiest and quickest in imparting theoretical training to

a group of salesman. But it is difficult to evaluate

the effectiveness of lecture method. This method can be used more

effectively in continuing sales

training programme to provide new information or

changes in the policies of the firm. This may include seminars, demonstration

etc., by expert salesmen.

(b) AudioVisual Method: In order to supplement the lecturing (telling)

method,

training programs include the use of visual aids, such as films, slides, posters

etc., and are capable of making, them more interesting.

(c) Discussion Method: This is a good method. Here an

actual case or an imaginary case is given

as a problem to be solved, to the different groups. The case or the problem

may be typed or printed. Each group is asked to understand the

problem and draw a conclusion. After this, the different conclusions or

suggestions are analyzed collectively, under the leadership of the

instructor, in drawing generalizations from each

case or problem. This type of training enables the salesmen in

correcting their own views. It is suitable for a small group. It is slow and

costly.

(d) Conference Method: Sales conferences and sales meeting are a

kind of get together of all the concerned staff, weekly, fortnightly or monthly.

The thoughts of various persons are pooled in the conference. Meetings or

conferences have motivating effects as the participants are

given chances for creative thinking and to express their views. To

make the conference more interesting, dramas, demonstrations etc., are

included. Topics like, sales policies,facing competition, publicity ideas, dealings with complaints etc., are dealt wit

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h. And these will facilitate the participants in broadening their outlook and ide

as. But this type of meetings or conferences is not suitable for new recruits.

(e) Role Playing Method: Role playing is a newly developed method.

The sales trainees are made to act out roles in contrived problems. Thetrainer explains the situation of the problem and assigns the role of

salesman and customers of different characters to the sales trainees.

Each one has to act the assigned role. The trainer watches the role

played by each and discusses their weaknesses and strong points. A few

may be selected to act the play, while others may watch it. Thus, the

salesman have chance to see and understand the ideas in

different situations. It is not suitable for new recruits.

(f) Panel Method: Members in the panel group may be permanent.

The members, who are experts in the panel, discuss the problems,

and solutions are passed to the salestrainee groups, who may have further

discussion. This system is ineffective.

(g) Round Table method: It is similar to the discussion method. It con

sists of

few members. The salesmen sit around a table along with a good discussion

leader. They deal with the problems of actual cases. Every participant

takes part freely in discussing the problems and solutions. Exchanges of

new ideas take place advantageously.

(h) Brain Storming Method: Under this method, more or less, similar to r

ound table conference, persons sit around the table. The leader presents the

problems for discussion. The

sales trainees have to understand the problems and find the solutions. The

solutions are analyzed by the leader or tested by the panel of experts. This method

practically fetches no value.

2. Individual Training:

(a) Onthejob Training:

Under this method, a new salesman is placed under an

experienced or senior salesman who trains him. First the coach explains the

sales techniques under different situations. He also takes the trainee

along with him on his rounds and gives him chances to observe the

dealings with the customers. Doubts of the trainee are also clarified.

Then the coach along with the trainee calls on customers; the sales

trainee is allowed to deal with

the customer and the coach observes the performance. If any weak point or s

hortcoming is found in the sales trainee, they discuss how to overcomethem. After some time, the sales

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trainee becomes a trained and independent salesman.

This system is good for traveling salesman.

(b) Sales Manual: It is a complied textbook. It contains details

of the firm and products, job description, sales policies, opinions or reports required for

reference purposes etc. Generally, it contains many problems with suggestiv

e solutions.

A copy of the book is given to a salesman to go through it and understand the

ideas. It works as a readyreckoner.

(c) Initial or Breakin Training: New recruits are given an

orientation training

so as to know about the company and its products. He may be allowed to

work

for some time in the firm itself to gain sufficient information about the products

. After that he is sent to work in his field.

Importance of Training to sales persons

1) A trained salesman always wins customers by systematic approach.

2) Salesman acquires better understanding of the firm, as to its past

history, policies and procedures and this helps the salesman for effective dealings.

3) A trained salesman takes less time in concluding a saleearly selling maturity.4)

A trained salesman brings increased volume of sales, in turn, more profit to th

e firm and himself.

5)

A trained salesman is able to meet consumers demand and help in solving pr

oblems.

6) Increased volume of sales facilitates reduction in cost of production i.e.,

sales rise faster

than expected. The cost per unit of order or per prospect can be minimized.

7) A better relation is created among the customers through reducing

customers

complaint, increasing brand loyalty etc. Customers satisfaction is gained.

8) The ability of the salesman is increased by expert knowledge.

9) Controlling of salesman becomes easy.

10) Training facilitates better demonstrations, selling the products which

have high profit margin, better methods of canvassing etc. Sales training

helps to increase the sales

volume. Supervision cost is reduced as trained salesman needs less supervision.

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Q.6:- What is International Marketing? What are the various strategies to enter

International markets? Explain.

Ans:- International marketing is defined as The performance of business

activities designed to plan,price, promote and direct the companys flow of goods and services to

consumers or users in more than one nation for a profit. A company that wants

to sell their product in other than domestic market should understand

the environmental factors, consumer behavior, market forces and other

characters relevant to the international market.

The marketing concept is the idea that a firm should seek to evaluate market

opportunities before production, assess potential demand for good, determine the pr

oduct characteristics desired by the consumers, predict the prices consumers are will

ing to pay and then supply goods corresponding to the needs and wants of target ma

rkets. Adherence to marketing concept means the firm conceives and develops

products to satisfy consumer wants. For international marketing this means

the integration of the international side of the companys business

with all aspects of its operations and the willingness to create new products and

adapt existing products to satisfy the needs of world markets. Products may

have to be adapted to suit the tastes, needs and other characteristics

of consumers in specific regions, rather than it being assumed that an item

which sells well in one country will be equally successful elsewhere.

International Market Entry Strategies Organizations that plans to go for internatio

nal marketing should answer some basic questions like

a. In how many countries the company would like to operate?

b. What are the types of countries it plans to enter?

To answer the above questions companies evaluate each country against the

market

size, market growth, and cost of doing business, competitive advantage and risk lev

el.

Once the market is found to be attractive companies should decide

how to enter this

market. Companies can enter international market from any one of the following

strategies. They are:-

a. Exporting

b. Licensing

c. Contract manufacturing

d. Management contracte. Joint ownership

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f. Direct investment

Exporting is the techniques of selling the goods produced in the domestic

country in a foreign country with some modifications. For example, Gokaldas

textiles export the cloths to different countries from India. Exporting may beindirect or direct. In case of indirect exporting,

company works with independent international marketing intermediaries.

This is cost effective and less risky too. Direct exporting is the techniques in which

organization exports the goods on its own by taking all the risks. Maruti udyog

limited Indias leading car manufacturer exports its cars on its own.

Company can also set up overseas branches to sell their products. Adani exp

orts another leading exporter from India has international office in the Singapore.

Licensing: According to Philip Kotler licensing is a method of entering a foreign m

arket in

which the company enters into an agreement with a license in the foreign market, of

fering

the right to use a manufacturing process, trademark, patent, or other item of value fo

r a fee or royalty. For example, torrent pharmaceuticals has license to sell the cardio

vascular drugs of Chinese manufacturer Tasly. Licensing may cause some problems

to the parent company. Licensee may violate the agreement and can use the technol

ogy of the parent company.

Contract manufacturing: Company enters the international market with

a tie up

between manufacturer to produce the product or the service. For example, Gigabyte

technology has contract manufacturing agreement with D link India to produce

and sell their mother boards.

Another significant manufacturer is TVS electronics; it produces key boards in

its own name as well as for other companies too.

Management contracting: In this type

a company enters the international market by providing the

know how of the product to the domestic manufacturer. The capital, marketing

and other activities are carried out by the local manufacturer hence it is less risky too

.

Joint ownership: A form of joint venture in which an international company

invest equally with a

domestic manufacturer. Therefore it also has equal right in the controlling

operations. For example, Barbara a lingerie manufacturer has joint venture with Gok

aldas images in India.

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Direct Investment: In this method of international market entry Company invest in m

anufacturing or assembling. The company may enjoy the low cost advantages of that

country. Many manufacturing firms invested directly in the Chinese market to

get its low cost advantage. Some

governments provide incentives and tax benefits to the company whichmanufactures the product in their country. There is government restriction in some c

ountries to opt only for direct investment as it produces the jobs to the local people.

This mode also depends on the country attractiveness. It may become risky if the ma

rket matures or unstable government exists.

mb0030-marketing management [solved] set-2

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