Course MBA – 2nd Semester
Subject: Marketing Management
Assignment MB0046 – Set 2
Q1. Highlight the importance of Distribution channel and marketing intermediaries in carrying out the marketing function.
The delivery of goods and services from producers to their ultimate consumers or users includes many different activities. These different activities are known as marketing functions. Different thinkers have described these functions in different ways. Some of the most important functions of marketing are briefly discussed below:
1. Marketing Research and Information Management
Marketers need to take decisions scientifically. Marketing research function is concerned with gathering, analyzing and interpreting data in a systematic and scientific manner. The types of market information could be analysis of market size and characteristics, consumer tastes and preferences and changes in them from time to time, channels of distribution and communication and their effectiveness, economic, social, political and technological environment and changes therein. A company can procure such information from specialized market research agencies, government or can decide to collect themselves.
2. Advertising and Sales Promotion – Advertising is a mass media tool used to inform, persuade or remind customers about products or services. It is an impersonal form of communication targeted at a chosen group through paid space or time.
Sales Promotion is a short-term incentive given to customers or intermediaries to promote sales. It supplements advertising and personal selling and can be used at the time of launching a new product or even during its maturity period.
3. Product Planning and Management – A Marketer should identify the needs and wants of consumers, develop suitable products / services and make them available. Marketer is also required to maintain the product and its variations in size, weight, package and price range according to the changing needs and requirements of his customers. Information available through Market Research helps product management in taking appropriate decisions while planning the marketing efforts.
4. Selling – This function of marketing is concerned with transferring of products to the customer. An important part of this function is organizing sales force and managing their activities. Sales force management includes recruitment, training, supervision, compensation and evaluation of salesmen. They need to be assigned targets and territories where they can operate. The salesmen interact with prospective purchasers face-to-face in order to sell the goods. The purchaser may be end customer or an intermediary, such as a retailer or a dealer.
5. Physical Distribution – Moving and handling of products from factory to consumers come under this function. Order processing, inventory, management, warehousing and transportation are the key activities in the physical distribution system.
6. Pricing – This is perhaps the most important decision taken by marketer, as it is the only revenue fetching function and success and failure of the product may depend upon this decision. Therefore, the decision regarding how much to charge should be taken such that the price is acceptable to the prospective buyers and at the same time fetches profits for the company. While deciding on the price, the factors to be considered are competition, competitive prices, company’s marketing policy, government policy, and the buying capacity of target market etc.
Importance of 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. Stocking and delivering, bulk breaking, and selling the goods and services to customer are some of the major functions carried out by the middlemen. Retailers, wholesalers, agents, brokers, jobbers and carry forward agents are few of the intermediaries. Retailers are final link between the company and the customers. Their role in the marketing of product is increasing every day.
Q.2 a. Explain the different product mix pricing strategies. (6 marks)
Product Mix Pricing Strategies
1. Product Line pricing: Strategy of setting the price for entire product line. Marketer differentiates the price according to the range of products, i.e. suppose the company is having three products in low, middle and high end segment and prices the three products say at Rs 10 Rs 20 and Rs 30 respectively.
In the above example of Nokia mobile phones Nokia 1110 is priced @ Rs 1349, Nokia 7610 priced @ Rs 6249 and Nokia E90 priced @ Rs 34599. All the three products cater to the different segments – low, middle and high income group respectively. The three levels of differentiation create three price points in the mind of consumer. The task of marketer is to establish the perceived quality among the three segments. If the customers do not find much difference between the three brands, he/she may opt for low end products.
2. Optional Product pricing: this strategy is used to set the price of optional or accessory products along with a main product.
Maruti Suzuki will not add above accessories to its product Swift but all these are optional. Customer has to pay different prices as mentioned in the picture for different products. Organizations separate these products from main product so that customer should not perceive products are costly. Once the customer comes to the show room, organization explains the advantages of buying these accessory products.
3. Captive product pricing: Setting a price for a product that must be used along with a main product. For example, Gillette sells low priced razors but make money on the replacement cartridges.
4. By-product pricing: It is determining the price for by-products in order to make the main product’s price more attractive. For example, L.T. Overseas, manufacturers of Dawaat basmati rice, found that processing of rice results in two by-products i.e. rice husk and rice brain oil. If the company sells husk and brain oil to other consumers, then company is adopting by-product pricing.
5. Product bundle pricing: It is offering companies several products together as a bundle at the reduced price. This strategy helps companies to generate more volume, get rid of the unused products and attract the price conscious consumer. This also helps in locking the customer from purchasing the competitors’ products. For example, Anchor toothpaste and brush are offered together at lower prices.
Q2 b. Give a note on marketing concepts.
The Marketing Concept – The Marketing Concept proposes that a company’s task is to create, communicate and deliver a better value proposition through its marketing offer, in comparison to its competitors; to its target segment and that this customer oriented approach only can lead to success in the market place.
Today, marketing function is seen as one of the most important functions in the organization. Many marketers put the customers at the centre of the company and argue in favor of such a customer orientation, where all functions work together to respond, serve and satisfy the customer.
Many successful and well known multinational companies have adopted marketing concept as their business and marketing philosophies. Many Indian companies in the banking and other service sectors follow customer orientation and service as their motto. According to this concept, a company’s marketing effort must start right from identifying, through Market Research, exact needs and wants of the target market.
Q.3 a. What are the features of business markets?
Features or Characteristics of Business Markets
Following are some of the unique features of business markets where large establishments purchase the required goods and services from other businesses. Such B2B operations determine the organizations as buyers and those organizations who supply the various requirements will be the sellers or suppliers or service providers.
1. Few but bulk Buyers: The no. of buyers is few but they buy in large quantity. For example, major airlines buy the necessary equipments from the aircraft manufacturers
2. Geographical concentration of buyers: Buyers are geographically concentrated. For example, shipping industries are located on the east and west coasts of India than in any other places.
3. Variable demand: The nature of demand is fluctuating because the demand is basically a derived one. Based on the requirements of the consumer markets, organizations buy the goods and make the finished goods available in the market for final consumption. Larger the consumer demand, larger will be the organizational buying. For example, mobiles are being used by a large population and so cellular companies have to meet this rising demand.
4. Inelastic demand: The demand is also inelastic because organizations cannot make rapid changes in the production structure and so prices remain constant in the short-term. For example, Shoe manufacturers will not buy much leather if the price of leather is less neither will they buy less leather if the price increases.
5. Systematic purchasing: The purchasing activity is directly between the buyer and supplier organization which means there are no or very few middlemen involved. Purchasing activity is usually undertaken by purchase departments based on a proper structure and through various mechanisms like having purchase requisitions from other sections, inviting tenders and sending invoices from the suppliers, purchasing agreements or contracts with the key suppliers, renewing agreements etc. For example, Reliance Fresh has regular contracts with the agricultural producers for smooth supply of fresh fruits and vegetables.
6. Multiple buying influences: there will be several parties involved in deciding about the purchases because organizations will have several departments and units functioning under it with different requirements. So, unless they have the proper resources to work with there will be problems in the departments. For example, purchase department in a Hospital must be aware about the specific requirements in the clinical wards, operation theaters, labs, etc.
7. Reciprocation: This means that when an organization buys goods from another organization then the supplier organization also might need certain other goods that are produced by the buyer organization. For example, a stationery supplier will supply the necessary stationeries to the paper manufacturer who in turn provides papers to the supplier.
8. Lease agreements: Most organizations take on lease the expensive equipments required by them rather than buy it. So, in this way, they reduce cost, get better service and the lessor or one who provides the equipments will also profit from the rent or lease charges. For example, TATA provides the transport trucks to other organizations on lease.
Q.3 b. Write a short note on product line and product mix.
Product line: The group of related products which uses same marketing efforts to reach the consumer.
The product line identifies profitable and unprofitable products and helps in allocation of resources according to that. The product line understanding helps the marketer to take line extension, line pruning and line filling strategies of the company.
Pidilite Industries, the adhesives and chemical company, have the following group of related products (or product lines) in consumer and business markets.
1. Adhesives and sealants.
2. Art materials and stationeries.
3. Construction chemicals.
4. Automotive chemicals
5. Fabric care
1. Industrial adhesives.
2. Textile chemicals.
3. Organic pigment powders.
4. Industrial resins and
5. Leather chemicals.
Product Line Decisions:
The major product line decisions are
a. Product line length
b. Product line stretching
c. Product line filling
d. Product line pruning
a. Product line length: The number of items in the product line is called the product line length. Company should decide whether it requires longer chain or shorter length. The decision depends upon the objective of the company, competitive environment and profitability. If the chain is short company can add new products and if it is lengthy company can reduce the number of products. For example, Pidilite’s adhesives and sealants line has following 11 items in the product line. Hence the length of product line is 11
1. White Glue
2. Paper Glue
3. Glue Stick
4. Instant Adhesive
5. Epoxy Putty
6. Epoxy Adhesive
7. PVC Insulation Tape
8. Silicone Sealants
9. Contact Glue
10. All Purpose Glue
11. Maintenance Spray
b. Product line stretching: Company lengthens its product line either by stretching upwards or downwards or both ways. Line stretching decision depends on three situations -
i. Company which operates in high end market may come up with mid class or low class targeted products.
ii. The company which operates in lower end of market may come up with high end market products.
iii. If the company operates in mid segment and comes out with low end product as well as high end product then it is stretching both ways.
For example, Maruti Suzuki Limited launched its first product, Maruti 800 in the year 1983 and in the year 1985 it launched Maruti Gypsy. Gypsy is costlier than Maruti 800 and targeted for higher segment. This shows that the company extended its product line upwards or in short, upward stretch.
Tata Motors launched their Rs 1 lakh car NANO in the year 2008. The company which was targeting upper class and middle class with their products SUMO and Indica respectively, has stretched downwards to reach the lower level segment. This illustrates the downward stretch.
Toyota Kirloskar Limited which extended their line from Qualis and Corolla to Innova and Camry is planning to come out with small car in India. This clearly illustrates the two way stretch of the product line.
c. Product line filling: Adding more items in the present product line. For example, in the year 2000 Maruti Suzuki launched Alto. This product was between Maruti 800 and Maruti Zen. Here company was trying to fill the gap existing in the segment by introducing ALTO, i.e. line filling.
d. Product line pruning: Removing the unprofitable products form the product line. Toyota Kirloskar phased out their well known brand Qualis when they thought the brand was not adding value to the product line.
Product mix: The number of product lines and items offered by marketer to the consumers
A company’s product mix has four different dimensions. They are product mix width, product mix length, product mix depth and product mix consistency.
The following shows the product mix of Jyothy Laboratories:
House hold insecticide
(9ml, 30ml, 75ml, 125ml,250ml)
Maxo cyclothrin coil
(8hr, 10hr, 12hr)
Exo dish wash bar
(100g, 200g 380g)
(8, 15, 20, 40 and 100 sticks.)
(Coconut Milk with Milk Protein, Coconut Milk with Jasmine and Coconut Milk with Kasturi Manjal, and is presented in 75gm packs. )
Ujala washing powder
(25g, 500g, 1Kg)
Exo dish wash liquid
| || || |
Marketing of godrej Tea
Stiff & shine
(20gm sachets, 100ml and 200ml bottles)
| || || || |
Marketing of Ekta dhoop
Product mix width: The total number of product lines that company offers to the consumers.
For example, Jyothy Laboratories’ product mix has six lines. Hence the 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 company’s product lines usage, production and marketing are related, then product mix is consistent, else it is unrelated.
In the case of Jyothy Laboratories, all six product lines are FMCGs. Hence it is having consistent product mix. But ITC Company’s cigarette and cloth product lines are totally unrelated.
Q.4. a. Select any deodorant brand and evaluate its positioning strengths or weakness in terms of attributes, benefits, values, brand name and brand equity.
A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers’.
The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name
Brand name: Axe
Axe was launched in France in 1983 by Unilever. It was inspired by another of Unilever's brands, Impulse.
Unilever were keen to capitalize on Axe's French success and the rest of Europe from 1985 onwards, later introducing the other products in the range. Unilever were unable to use the name Axe in the United Kingdom and Ireland due to trademark problems so it was launched as Lynx
Although Axe's lead product is the fragranced aerosol deodorant body spray, other formats of the brand exist. Within underarm care the following are available: deodorant aerosol body spray, deodorant stick, deodorant roll-on, anti-perspirant aerosol spray (called Axe Dry), and anti-perspirant stick (also called Axe Dry).
The attribute of the brand that customer associates with his/ her belief. A person may associate the brand for power, strength or protectiveness. For example, a customer may associate Axe brand not just for perfumes but also any accessory associated with perfumes such as Shampoos etc. So, for him, Axe represents perfume.
Brand equity is set of assets linked to a brand‘s name and symbol that adds value to the product or service and/or that firm’s customer.
Components of brand equity:
1. Brand loyalty: From its launch (Axe), the yearly fragrance variant has played a key part in the success of the brand by offering something new each year.
2. Brand awareness: The type of fragrance (Axe) variants have evolved over time. From 1983 until about 1989, the variant names were descriptions of the fragrances and included Musk, Spice, Amber, Marine, and Oriental.
3. Perceived quality
4. Brand associations: Axe also launches limited edition variants from time to time that may be on sale for a few months or over a year
4.b. You are a research expert in the field of marketing footwear products. What are the various research approaches you would consider before making a consumer survey regarding footwear? (4 marks)
Below are the various research approaches that need to be considered before making a consumer survey regarding footwear products:
- Observational Research – Fresh data can be collected by observing the situation and the people in the situation.
- Focus Group Research is a method of discussion in which a team of eight to twelve persons invited for a group discussion in presence of a skilled moderator to discuss a product, service, a firm or any marketing related activity. The proceedings are observed and recorded on videotape and subsequently analyzed to understand consumer attitudes, beliefs and behavior.
- Survey Research – This is the most common of the approaches wherein surveys are undertaken with the help of a questionnaire to learn about people’s knowledge, beliefs and preferences.
- Behavioral Research – Customer’s actual behavior in terms of actual purchases reflect their preferences and are more reliable than responses provided in surveys which are memory based.
- Experimental Research – The most scientific method of research is experimental research which tries to capture cause and affect relationships.
Q. 5 a. What advice would you give a company that has facing bad publicity? What steps would you tell the company to improve its reputation?
Publicity can be said as a simple act of making a suggestion to the concerned parties – TV or radio channel, news reporter or journalist, film makers, etc. that leads to the inclusion of a company/products in an already existing story or a newly developed one. Publicity may also include any such information that attracts attention to a company, its products, its people or any event, usually generated by a third party such as media. Publicity maybe a part of PR or it may be independent of it in certain situations.
Publicity may have positive or negative impacts. For example, it became a negative publicity for Coca-Cola when people in India, started to throw or break the bottles on the roads because of the belief that it contained pesticides or toxic substances. News channels covered the same giving negative publicity to the company and the products.
Ways in which organizations can use publicity as a communication tool are as follows:
· Organizing events, contests, exhibitions, public displays, tours, etc.
· Sponsoring awards, scholarships or giving charity for any noble cause.
· Issuing reports, conducting survey or polls, taking stand on any debatable or environmental issues, etc.
· Any other way that is appropriate like for example displaying the products in a movie and asking the lead actors to use the products in that movie.
Ways in which organizations can avoid or minimize the effects of bad publicity:
· Providing people with the accurate information and giving clarifications if needed either through press release, media interviews, websites, public messages, advertising etc.
· Company’s top management or spokesperson can give a public statement or comment in the various media.
· Improvising Public Relations and designing good publicity message to erase the effects of bad publicity.
· Continuing to provide quality products and services to the consumers.
· Involving in community work or environmental protection campaigns or any such activity for a good cause.
b. As a brand manager, what are the ways in which you will select a brand name for your product- watches and how will you position it in the market?
Brand provides the image to the product. Brand manager should be careful in selecting a proper name for the brand for watches.
Brand Name: Titan
There are six suggestions from Philip Kotler to create a successful brand name. They are
1. It should suggest something about the product benefits and qualities; e.g. Titan
2. It should be easy to pronounce, recognize, and remember
3. The brand name should be distinctive
4. It should be extendable
5. The name should be easily translated into a foreign language
6. It should be capable of registration and legal protection e.g. Titan is a registered brand and other brands cannot compete with it using any similar sounding name.
Brand managers have four options of sponsoring the brand. They are
1. Manufacturer brand
2. Private brand
4. Co- branding
Q. 6 a. What is MIS? What are its benefits?
MIS (Marketing Information System):
MIS is a set of procedures to collect, analyze and distribute accurate, prompt and appropriate information to different levels of marketing decision makers.
Benefits of MIS
Various benefits of having a MIS and resultant flow of marketing information are given below:
1. It allows marketing managers to carry out their analysis, planning implementation and control responsibilities more effectively.
2. It ensures effective tapping of marketing opportunities and enables the company to develop effective safeguard against emerging marketing threats.
3. It provides marketing intelligence to the firm and helps in early spotting of changing trends.
4. It helps the firm adapt its products and services to the needs and tastes of the customers.
5. By providing quality marketing information to the decision maker, MIS helps in improving the quality of decision making.
6.b. How is rural marketing different from urban markets?
In a rapidly changing scenario, marketers have to continuously explore new markets and ways of serving them. In India, enterprises are discovering the potential of a huge rural population to drive business. Prof C K Prahlad, had aptly summed up the potential as ‘fortune at the bottom of the pyramid’ in a pathbraking book of the same name. Rural marketing is not something akin to glocalisation. It is not the modification of urban marketing strategies to suit the rural market. On the other hand it is developing products to meet the needs of the rural sector and reaching it across as per the specific characteristics of the rural environment. In case of a detergent, it is producing one which will suit the rural environment (considering that the dirt and grime is different, clothing alternatives are different, availability of water and number of times of washing is different and so on); packaging and pricing which will be akin to their requirement and alternative ways for which the detergent may be put to use. For example Hindustan Lever found that its detergent was being used for washing the cattle.
Importance of Rural marketing: The following table will give you some idea about the emergence of the rural market which marketers may ignore at their own peril.
Rural Markets different from Urban Markets
This has to be understood in the light of the 4Ps or 7Ps of marketing. Imagine that you are trying to establish a Coffee Café Day Outlet in a remote village in Maharashtra. Will that be viable proposition? Yet there may be consumers for coffee in the rural sector too. The offering has to suit the sector. Similarly an ice cream parlor may not be a workable idea in a village or a cluster of villages if there is no electricity connection there. The ice cream cart vendor is a better idea. Keeping these situations in perspective, one can draw some inferences why rural marketing is different.
1. Accessibility and mobility: This applies both for the supplier and the consumer. The movement of the people is restricted by the lack of surface roads and the mode of transport. There are restrictions by way of visibility during night.
2. Average income level of consumers: The average wage earners are characterized by lower per capita income and disposable income in comparison to the urban.
3. Geographical distances: The living quarters are separated more than they are in the urban areas. The cluster of villages is also segregated by distances.
4. Literacy level: On an average the literacy level in the rural sector is lower in comparison to the urban sector.
There could be several other issues which are specific to the rural sector. These may force marketers to take a different approach for the entire marketing process or at least some of them as against the urban sector.