MB0046 Marketing Management - 4 Credits

Q.1 A. Explain the six criteria for effective market segmentation. B. Discuss the types of target marketing strategies. Answer: a) In order for segmentation to be viable there are some criteria that the selected groups must comply with. A segment needs to be identifiable and measurable. Marketers should be able to distinguish those who fit in the segment and those who do not. A decision to use a market segmentation strategy should rest on consideration of four important criteria that affect its profitability. In order for segmentation to be viable; the market must be: Accessible: This criterion refers to the ease of effectively and economically reaching chosen segments with marketing efforts. Some desired segments may be inaccessible because of legal reasons; for example, liquor manufacturers are unable to market directly to young teenagers, In fact, there is a vigorous debate dealing with the constitutionality of segmenting and targeting certain groups. . Substantial: This collection refers to the degree to which a chosen segment is large enough to support profitably a separate marketing program. As was noted preciously a strategy of market segmentation is costly. Thus, one must carefully consider not only the number of customers available in a segment but also the amount of their purchasing power. Responsive: There is little to justify the development of a separate and unique marketing program for a target segment unless it responds uniquely to these efforts. Therefore, the problem is to identify market segments that will respond favorably to marketing programs designed specifically for them. b) Targeting is defined as a group of people or organizations for which an organization designs, implements and maintains the marketing mix. Once the bases for segmentation are selected, the marketer has to identify the people or organization to whom the product is meant. Target Market Segments Depending upon the emerging patterns of market segmentation, homogeneous preference, diffused, and clustered preference, a company chooses its market segmentation strategy. A) Undifferentiated Marketing: It is a market coverage strategy in which the company treats the target market as one and does not consider that there are market segments that exhibit uncommon needs. The company focuses on the centre of the target market to get maximum advantage. B) Differentiated Marketing: It is a market coverage strategy in which the company goes for proper market segmentation as depicted by its analysis of the total market. The company, therefore, goes for several products or several segment approach which calls for preparing different marketing mixes for each of the market segment.

C) Concentrated Marketing: It is a market coverage strategy in which company follows one product-one segment principle. The manufacturer gets maximum knowledge about the segments needs and therefore acquires special reputation. This strategy can also help small companies to stand against a large corporation because small companies can create niches in its one product one-segment approach by providing maximum varieties. Q.2 Explain the consumer buying decision process. consumer buying decision process Problem recognition A buying process starts when a consumer recognises that there is a substantial discrepancy between his/her current state of satisfaction and expectations in a consumption situation. A need can be activated through internal or external stimuli. Information search After need arousal, the behaviour of the consumer leads towards collection of available information about various stimuli. In this case, information about products and services are gathered from various sources for further processing and decision-making. External sources for desired information can be grouped into four categories. Personal sources (family, friends, neighbours, and peer group) Commercial sources or market dominated sources (advertisements, salesmen, dealers, and company owned sales force) Public sources (mass media, consumer rating organisations, and trade association publications) Experiential sources (handling, examining, and using the product) The marketer will find it worthwhile to study the consumers information sources when: A substantial percentage of the target market engages in the search The target market shows some stable patterns of using the respective information sources. Alternative evaluation Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives. Evaluation leads to formation of buying intention that can be to either purchase or reject the product/brand. The final purchase will however depend on the strength of the positive-intention, which is the intention to buy. Purchase decision Finally the consumer arrives at a purchase decision. Purchase decisions can be any one of the three - no buying, buying later, and buy now. No buying takes the

consumers to the problem recognition stage as their consumption problem is not solved and they may again get involved in the process as we have explained. Post-purchase behaviour Post-purchase behaviour refers to the behaviour of consumers after their commitment to a product has been made. It originates out of consumers experience regarding the use of the product and is indicated in terms of satisfaction. . Q What are the Adoption process for new products? Product Adoption Process & its Steps: In market there are several products with similar function. Consumers go with certain product to fulfill their needs. By several exercise and trial consumer select the requisite product. To come to a decision of using certain product regularly after several study, observation and trial of the new product is known as product adoption. 1. Product Awareness 2. Product Interest 3. Product Evaluation 4. Product Trial 5. Product Adoption 1. Product awareness The first step of the product adoption is to be aware of product. Basically consumers (individual or organizational) are aware of product introduction in the market via various means of communication, such as television, newspapers, business magazine, internet etc. People become aware of quality, features, utility, price etc of the product to adopt. 2. Product Interest: If the awareness or information of the product existence, if consumer is interested in the product he/she starts to collect the information related to the product. Consumer becomes interested about product quality, features, utility and price. 3. Product Evaluation: After the collection of the information about the product, the information gathered is evaluated by the consumers. Consumers checks whether the product quality, features, utility and price of the product satisfactory or not? 4. Product trial: In the fourth step of the product adoption, consumer makes trial of the product in small amount. They make the use of the product in small quantity or they may make test use of the product. 5. Product adoption: After the trial of the product if the consumer is satisfied he/she will adopt the product and use the product regularly even in the future.

Q 4.Describe the components of the micro environment of marketing? Micro environment The microenvironment consists of five components. a. The company itself (including departments). b. Suppliers. c. Marketing channel firms (intermediaries). d. Customer markets. e. Competitors. f. Publics. 1. The Companys Microenvironment As discussed earlier the companys microenvironment consists of six forces that affect its ability to serve its customers. Lets discuss these forces in detail: a. The Company The first force is the company itself and the role it plays in the microenvironment. This could be deemed the internal environment. 1). Top management is responsible for setting the companys mission, objectives, broad strategies, and policies. 2). Marketing managers must make decisions within the parameters established by top management. 3). Marketing managers must also work closely with other company departments. Areas such as finance, R & D, purchasing, manufacturing, and accounting all produce better results when aligned by common objectives and goals. 4). All departments must think consumer if the firm is to be successful. The goal is to provide superior customer value and satisfaction. b. Suppliers Suppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the companys overall customer value delivery system. 1). One consideration is to watch supply availability (such as supply shortages).

2). Another point of concern is the monitoring of price trends of key inputs. Rising supply costs must be carefully monitored. c. Marketing Intermediaries Marketing intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers. 1). Resellers are distribution channel firms that help the company find customers or make sales to them. 2). These include wholesalers and retailers who buy and resell merchandise. 3). Resellers often perform important functions more cheaply than the company can perform itself. However, seeking and working with resellers is not easy because of the power that some demand and use. Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Examples would be warehouses (that store and protect goods before they move to the next destination). Marketing service agencies (such as marketing research firms, advertising agencies, media firms, etc.) help the company target and promote its products. Financial intermediaries (such as banks, credit companies, insurance companies, etc.) help finance transactions and insure against risks. d. Customers The company must study its customer markets closely since each market has its own special characteristics. These markets normally include: 1). Consumer markets (individuals and households that buy goods and services for personal consumption). 2). Business markets (buy goods and services for further processing or for use in their production process). 3). Reseller markets (buy goods and services in order to resell them at a profit). 4). Government markets (agencies that buy goods and services in order to produce public services or transfer them to those that need them). 5). International markets (buyers of all types in foreign countries). e. Competitors Every company faces a wide range of competitors. A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. No single competitive strategy is best for all companies.

f. Publics A public is any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives. A company should prepare a marketing plan for all of their major publics as well as their customer markets. Generally, publics can be identified as being: 1). Financial publics--influence the companys ability to obtain funds. 2). Media publics--carry news, features, and editorial opinion. 3). Government publics--take developments into account. 4). Citizen-action publics--a companys decisions are often questioned by consumer organizations. 5). Local publics--includes neighborhood residents and community organizations. 6). General publics--a company must be concerned about the general publics attitude toward its products and services. 7). Internal publics--workers, managers, volunteers, and the board of directors.

Q 5.aExplain the types of Marketing Information systems? An information system is a collection of hardware, software, data, people and procedures that are designed to generate information that supports the day-to-day, short-range, and long-range activities of users in an organization.

1. Office Information Systems An office information system, or OIS (pronounced oh-eye-ess), is an information system that uses hardware, software and networks to enhance work flow and facilitate communications among employees. 2. Transaction Processing Systems A transaction processing system (TPS) is an information system that captures and processes data generated during an organizations day-to-day transactions. A transaction is a business activity such as a deposit, payment, order or reservation 3. Management Information Systems While computers were ideal for routine transaction processing, managers soon realized that the computers capability of performing rapid calculations and data comparisons could produce meaningful information for management. Management information systems thus evolved out of transaction processing systems.

4. Decision Support Systems Transaction processing and management information systems provide information on a regular basis. Frequently, however, users need information not provided in these reports to help them make decisions. A sales manager, for example, might need to determine how high to set yearly sales quotas based on increased sales and lowered product costs. Decision support systems help provide information to support such decisions. 5. Expert System An expert system is an information system that captures and stores the knowledge of human experts and then imitates human reasoning and decision-making processes for those who have less expertise. Q5.B. Discuss the different components of MIS Components of MIS MIS can be developed from three basic components (A) Internal Company Records; (B) Marketing Intelligence Activities and; (C) Marketing Research and these are explained as follows: (A) Internal Company Records: Internal company records are internal reports derived mainly from the accounting system of a business. These broadly include information related to a business current and potential clients, sales proceeds and relevant databases maintained by a business as summarized below: Order-to-payment Cycle The process involved from placing orders to actual translation into a payment transaction should be reported in the internal records in a computerized system. These records are mostly studied to understand factors that influence customers willingness to make formal purchases of goods/services from the business. Sales Information Systems Marketing managers need timely and accurate reports on current sales of a business goods and services from internal records. This information enables managers to evaluate the trends in sales across different markets and customers. Based on this information, marketing managers can also forecast future sales growth across different markets and customers. Databases Businesses should organize their information into databases such as customers databases, products databases, salesperson databases, etc. and then combine the data with different databases. (B) Marketing Intelligence

Marketing intelligence is a set of procedures and sources marketing managers can use to obtain everyday information about the developments in the marketing environment. (C) Marketing Research To validate and confirm information sought from internal records and marketing intelligence businesses should also consider conducting a market research on their goods/services. Marketing research is a systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation that a business faces. Accordingly, the process involved in conducting marketing research is as follows:

Q.6Describe the factors to be considered while developing an Effective marketing mix.? Price Strategy-Price affects how much of your product is sold, to whom it is sold, what services must go with it and ultimately how much profit you make. There are no infallible rules for setting the right price, as different businesses at different times use pricing to achieve quite different objectives. Demand-In setting your price you need to take account of the effect price can have on your sales volumes. If there is little difference between brands in your market price sensitivity is likely to be high and small price differences will seriously affect demand. You need to be careful, however, as many business people have found that too great a price drop may sell many more units and make them work much harder, but won't actually increase sales revenue!

Competitors-You need to consider the prices charged by your competitors, to give you a benchmark against which to position your own price. You should not slavishly follow competitors prices however, as you should be striving to differentiate your product or service in some way to make your offering unique. Distribution Strategy (Place) -Your customers will expect to find your products: Available when and where they need them In quantities that suit them In surroundings that enable them to make a good choice between products With access to other services to help them use the product (such as after sales service) Promotional Strategy-No matter how wonderful your product, no matter how unique your service, the world is unlikely to beat a path to your door unprompted. You need to carry out promotional activity to attract the right sort of business, in the right quantity, at the right time and to distinguish you from the competition. Public Relations Strategy-Good PR will generate understanding and positive interest in your business. It will whet potential customers' appetite for more information, prompt enquiries, reestablish dormant contracts and reinforces your image with existing customers. Advertising Strategy-Advertising is an almost universal tool.