mb0046 ok.pdf

Master of Business adMinistration SemeSter-II

ASSIGNMENT

Mb0046-Marketing

ManageMent Set-1

SUBMITTED BY:

NAME : VIJAY KUMAR SHARMA ROLL NO : 520933061 COURSE : mba CENTRE CODE : 3293 CENTRE CITY : NEW DELHI

Master of Business Administration – Semester-II MB0046 – Marketing Management

Assignment Set- I

of 12 Vijay Kumar Sharma

Note: Note: Each question carries 10 Marks. Answer all the questions. Q.1 Discuss the different marketing concepts with its merits and drawbacks. Answer.

There are certain fundamental concepts and tasks which one needs to know to fully understand the marketing function. These concepts provide foundation for a marketing orientation and to manage the marketing function. 1. Needs and Wants The marketer’s task lies in satisfying human needs and wants through the exchange process. It is alleged that “marketing creates needs” and makes people buy things they do not actually need. In reality, marketing or marketers do not create “needs”, but they create “wants”. Some needs are the basic human requirements of food, clothing, shelter, water and air. There are other needs such as social needs, esteem needs etc. When we desire certain specific objects or items to fulfill these needs, they are called wants. This difference between wants and needs is not the same as understood in the subject matter of ‘economics’. The marketer identifies the need which may lie unexpressed by the customer. 2. Demand Human wants are unlimited, but their resources are limited. When a want for an object is backed or supported by buying ability, willingness to spend and desire to acquire a product / service, it becomes a potential demand. The task of assessing or estimating demand is very crucial for a marketer. He should understand the relationship of the demand for his product with its price. Demand forecasting is essential for allocation of resources in a company. This is the reason why marketers segment consumers on the basis of their earning capacity. The income of the consumer indicates the potential to buy. 3. Product and Services ‘Product is a generic term used to describe what is being offered by a seller or marketer. It may be a good, a service or idea, which can be marketed by offering a set of benefits it offers to customers to satisfy their needs. A product can be defined as anything that can be offered to market to satisfy a need or want. Today, many types of entities such as goods, services, experiences, events, persons, places and ideas are being marketed. 4. Target Market Very few products can satisfy everyone in the market. Therefore, marketers divide 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 offer highest opportunity for his company. For each of these target markets, the firm develops a product / service suited to their needs. TATA group has recently designed an economy car called ‘NANO’ which is priced around Rs. 1 Lakh. The target market for this car is all aspirants who dream of owning a car but cannot afford cars, which are currently available for minimum Rs. 2.5 Lakh. A Target


Assignment Set- I


Market is the group of people at whom a marketer targets his marketing efforts to sell his goods and services. 5. Marketing Management Marketing Management which is also the title of this course refers to all the activities which the marketing managers, executives and personnel have to undertake to carry out the marketing function of the firm. It involves (i) analyzing the market opportunities by undertaking consumer needs and changes taking place in the marketing environment, (ii) planning the marketing activities, and (iii) implementing marketing plans and settings control mechanism to ensure smooth and successful accomplishment of the organizations goals. Marketing Management is a critical function, especially in highly competitive markets. It provides competitive edge to an organization through strategic analysis and planning. 6. Values and Satisfaction Value is primarily a function of quality, service and cost. Value increases with increase in quality and service and decreases with increase in cost. Value is an important marketing concept and the task of marketing is to identify, create, communicate, deliver and monitor customer value. Customers generally experience satisfaction when the performance level meets minimum performance expectations of a product or service. When the performance as perceived exceeds the expected performance level, the customer will be not just satisfied, but delighted. Thus customer satisfaction or delight with respect to a product or service encourages customers to come back and repurchase the product or service in future. Satisfied customers can be an asset to the marketing company over a period of time, as they will spread favorable word-of-mouth information or opinions. Q.2 a) what are the features and objectives of marketing research? b) Give a note on psychoanalytic model of consumer behavior. Answer:- Features of Marketing Research 1. It is a systematic process – It has to be carried out in a stepwise and systematic manner and the whole process needs to be planned with a clear objective. 2. It should be objective – It is important that the methods employed and interpretations are objective. The research should not be carried out to establish an opinion nor should it be intentionally suited towards predetermined results. 3. It is multi-disciplinary – Marketing Research draws concepts from other disciplines such as Statistics for obtaining reliable data and from Economics, Psychology and sociology for better understanding of buyers. Objectives of Marketing Research


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Marketing Research may be conducted for different purposes. Based on how organizations use Marketing Research, objectives of Marketing Research can be summarized as follows: 1. To understand why customers buy a product 2. To forecast the probable volume of future sales or expected market share 3. To assess competitive strengths and strategies 4. To evaluate the effectiveness of marketing action already taken 5. To assess customer satisfaction of company’s products/services The Psychoanalytical Model: The psychoanalytical model draws from Freudian Psychology. According to this model, the individual consumer has a complex set of deep-seated motives which drive him towards certain buying decisions. The buyer has a private world with all his hidden fears, suppressed desires and totally subjective longings. His buying action can be influenced by appealing to these desires and longings. The psychoanalytical theory is attributed to the work of eminent psychologist Sigmund Freud. Freud introduced personality as a motivating force in human behavior. According to this theory, the mental framework of a human being is composed of three elements, namely, 1. The id or the instinctive, pleasure-seeking element. It is the reservoir of the instinctive impulses that a man is born with and whose processes are entirely subconscious. It includes the aggressive, destructive and sexual impulses of man. 2. The superego or the internal filter that presents to the individual the behavioral expectations of society. It develops out of the id, dominates the ego and represents the inhibitions of instinct which is characteristic of man. It represents the moral and ethical elements, the conscience. 3. The ego or the control device that maintains a balance between the id and the superego. It is the most superficial portion of the id. It is modified by the influence of the outside world. Its processes are entirely conscious because it is concerned with the perception of the outside world. The basic theme of the theory is the belief that a person is unable to satisfy all his needs within the bounds of society. Consequently, such unsatisfied needs create tension within an individual which have to be repressed. Such repressed tension is always said to exist in the sub-conscious and continues to influence consumer behavior. Q.3 Silver Line Manufacturers produce several varieties of automobile components. They have 3 to 5 suppliers who supply materials regularly. Recently, procurement manager of Silver Line discussed in the meeting that they have to look out for new suppliers since they would be expanding their business operations to many places. How do you think Silver Line have to go about this situation?


Assignment Set- I


Answer: Silver line manufacturers expanding their business operation to many places and them looking for new suppliers. Following are given below the criteria for new supplier: Supplier Selection Strategies and Criteria Supplier selection criteria for a product or service category should be defined by a “cross-functional” team of representatives from different sectors of your organization. In a manufacturing company, members of the team typically would include representatives from purchasing, quality, engineering and production. Team members should include personnel with technical/applications knowledge of the product or service to be purchased, as well as members of the department that uses the purchased item. Supplier selection criteria:

Previous experience and past performance with the product/service to be purchased.

Relative level of sophistication of the quality system, including meeting regulatory requirements or mandated quality system registration (for example, ISO 9001, QS-9000).

Ability to meet current and potential capacity requirements, and do so on the desired delivery schedule.

Financial stability. Technical support availability and willingness to participate as a partner in

developing and optimizing design and a long-term relationship. Total cost of dealing with the supplier (including material cost, communications

methods, inventory requirements and incoming verification required). The supplier’s track record for business-performance improvement. Total cost assessment.

Methods for determining how well a potential supplier fits the criteria: Obtaining a Dun & Bradstreet or other publicly available financial report. Requesting a formal quote, which includes providing the supplier with

specifications and other requirements (for example, testing). Visits to the supplier by management and/or the selection team. Confirmation of quality system status either by on-site assessment, a written

survey or request for a certificate of quality system registration. Discussions with other customers served by the supplier. Review of databases or industry sources for the product line and supplier. Evaluation (SUCH AS prototyping, lab tests, OR validation testing) of samples

obtained from the supplier. Q. 4 briefly explain the bases for segmenting consumer markets along with examples. Do you think these bases are required for market segmentation? Why? Answer:-


Assignment Set- I


The bases for segmenting consumer markets: Geographic bases allow us to segment a market that is spread over a large geographic area into sub-markets that cover smaller geographic areas. Geographic segmentation usually involves dividing up geographic markets by using existing political boundaries, natural climatic zones, or population boundaries. 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. Demographic segmentation occurs when one or more demographic traits are employed to divide a market. Typical demographic traits that are used include age, gender, race, ethnicity, marital status, family size and stage of the family life cycle. a) Age and Life-Cycle 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 the consumers belonging to the different age groups, different types of products are produced. For instance, different types of ready-made 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 and determine a suitable marketing policy, pricing policy, advertising policy etc… For example, HUL launched ‘Pepsodent kids’ toothpaste for small children. b) Gender: Gender segmentation has long been applied in clothing, hair-styling, cosmetics and magazines. For example, Emami segmented its personal care products on the basis of gender i.e. Emami Naturally Fair for women and Fair and Handsome formen. c) Income: Segmentation based on Income is a traditional practice followed in product categories such as automobiles, clothing, cosmetics and travel. However, income does not always determine the best customers for a given product. For example, Baja Auto limited, a leading automobile company, manufactures different bikes for different commuters on the basis of the Income levels. For entry level (income less than Rs 35000) it is Bajaj CT 100, for mid segment (income greater than Rs 35000 but less than Rs. 60000) it is Pulsar and for the upper segment (income greater than Rs 60000) Avenger and Eliminator are positioned respectively. Social class segmentation employs a combination of demographic traits that are commonly believed to reflect membership in different social class strata. Occupation, education, and income are the primary demographic traits that reflect social class membership. Psychographic segmentation bases divide markets based on differences in lifestyles or differences in personality traits. Lifestyle segmentation is one of the most popular and effective ways to create segments for consumer products’) Personality: When Marketers use personality variables to segment the markets; they endow their products with brand personality that corresponds to consumer personalities. For example, Raymond advertises its fabrics with the tag ‘The Complete Man.’


Assignment Set- I


c) Social Class: It has a strong influence on the consumer preferences and the products they buy or consume. For example, when buying cars, clothing, home furnishings, leisure activities, reading habits etc., and Social class becomes the key factor. Many companies design products and services for specific social classes. For example, TATA Nano was introduced in the market as a One-Lakh Car that could be affordable by middle and lower income groups. Consumer shopping behavior patterns include such things as the type of store shopped in, timing of purchases (i.e. time of day, week, or year), how much of a product is purchased on a given visit to the store, and how often the individual frequents a particular type of retail establishment or shopping mall. Product consumption behaviors include product consumption or usage rates base (as discussed earlier). Other segmentation bases included in this category are product usage occasion, product use versus non-use, and loyalties to specific brands. a) Occasions: According to the occasions, buyers develop a need, purchase a product or use a product. It can help firms expand product usage. A company can consider critical life events to see whether they are accompanied by certain needs. For example, Tanishq a TATA enterprise offers gold schemes and promotions for Akshaya Thrutiya (auspicious day to purchase jewellery) b) Benefits: Buyers can be classified according to the benefits they seek from the products. For example, Peter England, a Madhura garment brand positioned its wrinkle free trousers on the basis of benefits. c) User Status: Markets can be segmented into non-users, potential users, first time users and regular users of a product. Each market segment requires a different marketing strategy. The company’s market position will also influence its focus. Market leaders will focus on attracting potential users, whereas smaller firms will try to attract current users away from the market leader. For example, Kishkinda resort near Hampi classifies its customers according to this characteristic. Resort believes that locals falls into non- user category, affluent class come to Hampi as potential users, foreigners as first time users, rich people near Hampi who frequently come there as regular users. d) Usage Rate: Markets can be segmented into light, medium and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. Marketers prefer to attract one heavy user rather than several light users and so, they vary their promotional efforts accordingly. For example, Alan Paine textile brand, offered 4 cotton trousers for Rs. 999. Here, theCompany is interested in getting profits from sales volume rather than its selling price. e) Loyal Status: Consumers have varying degrees of loyalty to specific brands, stores and other entities. Buyers can be divided into four groups according to brand loyalty status.


Assignment Set- I


a) Hard-core Loyals: Consumers who buy one brand all the time. For example, customer may be using only BSNL cellular services though there are different options available. b) Split Loyals: Consumers who are loyal to two or three brands. For example, consumer may go for tax savings schemes of post offices and Life Insurance Corporation of India c) Shifting Loyals: Consumers who shift from one brand to another. For example, consumer who used Nokia cell phones starts buying Sony- Ericsson mobiles. Segmenting markets according to consumer predispositions essentially entails creating segments based on differences in consumers’ wants, needs, and attitudes. We talked at length about creating market segments based on differences in consumers’ wants and needs (i.e. creating benefit segments). Sometimes it is useful to segment markets based on how knowledgeable people are of a particular product category, or whether they’ve experienced problems with specific products or brands. And, finally, we also include consumers’ media viewing habits in this category. When segmenting markets using this latter base, we are looking for differences in the types of media consumers prefer i.e. preferences for specific television shows, radio stations, magazines, newspapers, and the like.

Q.5 Mention the forces in micro and macro environment that are likely to influence an organization’s working and functions. Is environmental scanning necessary for all organizations? Answer: Forces in the micro environment The Company: Safe Express, a leader in the supply chain management solution wants to hold its number one position in the US $ 90 billion Indian logistics market. The company plans to expand its service areas in the coming months. To meet the targets of the marketing plan, other departments of safe express also expanding their horizon. The above example shows that the company’s marketing plan should be supported by the other functional departments also. Intermediaries: Marketing intermediaries: These are firms which distribute and sell the goods of the company to the consumer. Marketing intermediaries play an important role in the distribution, selling and promoting the goods and services. Retailers, wholesalers, agents, brokers, jobbers and carry forward agents are few of the intermediaries. Retailers are final link between the company and the customers. Publics: These are microenvironment groups, which help a company to generate the financial resources, creating the image, examining the companies’ policy and developing the attitude towards the product. We can identify six types of publics Financial publics Media publics General publics Internal publics Advertisement regulation agencies, TRAI, & IRDA of the government


Assignment Set- I


Citizen action groups Competitors A company should monitor its immediate competitors as its sale will be affected by the nature and intensity of the competitors. The sale of Coca cola will be affected by Pepsi cola, or Britannia cheese by Amul cheese. Suppliers: There are many kinds of suppliers to an enterprise or an institution. There are typically, raw material suppliers, energy and fuel suppliers, labour suppliers, office item suppliers and so on. Suppliers are the first link in the entire supply chain of the company. Customers: A company may sell their products directly to the customer or use marketing intermediaries to reach them. Direct or indirect marketing depends on what type of markets Company serves. Forces in the macro environment Demographic Environment: The study of population characteristics like size, density, location, gender composition, age structure, occupation and religion. Demography statistics helps companies to forecast demand. Demographic environment is analyzed on the basis of the following factors. Age structure of the population Marital status of the population Geographic distribution of the population Education level Migration Occupation. Political and Legal Environment Government policies, legislations, regulations, and stability will directly affect the business. Therefore it is inevitable for the firm to closely monitor this environment. The political and legal forces are grouped into the following four categories. Monetary and fiscal policies: These policies regulate government spending, money supply and tax legislations. Social legislations and regulations Legislations, Policies and regulations relating to industries Legislations related to manufacturing, trading, marketing etc Economic, Monetary and Natural Environment The economic environment includes consumption patterns, productivity patterns, spending patterns, and sectored growth and so on. The monetary environment consists of inflation, interest rate, exchange rate, money supply etc. These provide vital clues for marketers to decide on product offering, incentive offerings, promotional decisions and pricing decisions. Natural Environment:


Assignment Set- I


Environmental concerns are growing over the years. Governments are bringing in stringent regulations to conserve and manage natural resources. Marketers should beware of such trends in the environment. Some of the aspects/factors on which organizations should keep a vigil are; Inadequate raw materials arising out of strict mining regulations Global warming and pollution levels which have ushered in new legislations Social and cultural environment Growing urbanization, increasing participation of women in livelihood activities, advent of global cultural practices, greater exposure to life styles practiced world wide etc has altered marketing efforts remarkably. A club house and a swimming pool is an essential part of purchase decision for a flat in a metro. Marketers have encased this trend during the nineteen nineties and later too. Companies like Hindustan Lever have successfully marketed their low priced offerings of toiletries and cosmetics in the rural areas. Technological environment There are several tumultuous changes being wrought in the technological from which is transforming the way business is conducted. The changes are so rapid and sweeping those enterprises have found it difficult to keep pace. Several have fallen by the wayside for failing to keep with the changes. Major public sector undertakings in India which did not upgrade in time and closed their shutters are, ITI, HMT, and HTIF. On the other hand in the private sector, Hindustan Motors, LML etc are examples who were known as flag bearers, collapsed once they fell behind in the race for technology. Environmental scanning Environmental scanning refers to assessing the various aspects of the external and internal environment such that the knowledge may provide information with which to make some predictions for the future. If a mobile service provider is aware that the government is opening up the 3G spectrum it would be able to make a forecast on the demand for cell phones with these facilities. Need for environmental scanning: It helps in Identifying the opportunities that company has in immediate future. Identifying the threats faced by the company. Demand forecasting Developing appropriate business plans. Adjusting the company strategy in changing competitive environment. Q.6 Consider the company, Maruthi Udyog Limited. Elaborate on the company’s marketing mix and give examples related to the 4 P’s. Answer:

MUL was a joint venture created in February 1981 between Japan’s Suzuki Motor Company and the Indian Government when the latter decided to produce small, economical cars for the masses. The intention from the beginning was to produce a


Assignment Set- I


‘people’s car’. To get the project off the ground MUL took over the assets of the erstwhile Maruti Ltd., which was set up in 1971 and closed in 1978. Market The Indian car market is one of Asia’s largest and most competitive. Over 1,030,068 passenger cars, multi and sports utility vehicles were sold during 2003/04, growing the market by 32% With models in every segment of the automobile market, Maruti Udyog Limited (MUL), is well positioned to see how demand is shifting. Due to drop in prices and low interest rates there has been a sharp migration of car buyers to the compact car or ‘B’ segmentfrom the entry-level ‘A’ segment. This segment now accounts for 52% of the total passenger car market (excluding MUVs/SUVs). Compact car sales have raced ahead in January 2004 by 82% to touch 40,649 units. This is more than 22,297 units sold in December 2003. These segments are two of the success stories for the car industry. Maruti Udyog Limited Company’s marketing mix Product MUL manufactures leading models in all segments of the car market. Maruti 800 rules the ‘A1′ segment. In the ‘A2′ segment, it has the Zen, WagonR and Alto, whose combined sales rose to 176,132 units in 2003/04, up 46% as compared to 2002/03. In the ‘A3′ segment, it offers the Esteem and Baleno, while Omni and Versa stake out MUL’s presence in the MUV market. The Gypsy King marks Maruti Suzuki’s presence in the rough-terrain sector, and up a couple of notches in the luxury SUV market is the Grand Vitara. Pricing The price of the Maruti car is between Rs. 210000 to Rs. 1500000. Maruti – 800 is the lowest price car of this company. Alto, Omni, Wagonr, are also the low price car of the company. Zen and Esteem are the mid price car of the company. But Grand Vitrara is the high price model of the company. The price of car is decided according to its product Varity, quality, design etc. Place The place of the car is in the whole world. Maruti udyog Limited decides its distribution channels for selling car, like use some time on level or some time two level marketing channels. They decide areas in which they deal with customers. They show the permanent location for selling the car. They provide the many useful inventories. They define the transport facility of the company for company to market and market to consumers. Many showroom of Maruti Udyog limited is in our India. Promotion MUL strongly believes in attribute-oriented advertising. In an attempt to reposition M800 as a choice for those upgrading from a two-wheeler, MUL’s campaign of a child playing with a toy M800 drives home the fuel-efficiency factor: ‘the car never stops because the fuel never finishes’. The future communication strategy that MUL has envisioned for M800 is a snap of a typical middle-class family commuting on their two-wheeler. Next to them is another family except that this one is comfortably ensconced in a Maruti 800.


Assignment Set- I


One of MUL’s most ambitious television campaigns launched the Zen Predator. Positioning it as ‘strong, sleek and sexy,’ the commercial showcases the variant’s new styling through the theme of predator and prey in the context of ‘a modern jungle.’ The theme is one of a chase that ends in willing surrender, brought home in the baseline: ‘Surrender to the new Zen.’ The Zen Predator is being aggressively promoted in print. MUL bought the entire advertising space on The Week’s first issue of 2004. Additionally, MUL is the first Indian automobile corporate to utilise the internet for a complete branding exercise, using ‘interactive’ and ‘page domination’ techniques. Recently, MUL has turned its marketing focus to corporate TV commercials to promote its entire range of vehicles. The company has rolled out a new corporate TV campaign, featuring the ‘Maruti Puttar’. The rationale behind a second TVC featuring the same child model as the M800 campaign is to leverage the brand recall of the earlier commercial, driving home the point that ‘A Maruti Suzuki family is a happy family’. MUL is involved in a wide range of sponsorship activities, placing particular emphasis on motor sports. It was the founding sponsor of ‘Raid De Himalaya,’ and in its fifth year continues to be closely involved with it. The company regularly holds car rallies for amateur drivers and aspiring rallyists. MUL now has plans to host golf and polo events. Brand Values In 1983, Brand Maruti Suzuki was defined as ‘the people’s car’. These values have remained consistent ever since. Over the years, MUL has set the stage for the successful launch of Suzuki’s international range in the Indian market, all backed by the inherent value proposition of high quality, fuel efficiency and, compared with competition, low price. This formula has been largely responsible for a new generation of Indian car users swearing by the Maruti Suzuki brand name. ---------------end-------------

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