MARKETING MANAGEMENT

MB0046
Q1
Explain the stages in the new product development process.
Ans.1- Stages in new project development A product has different layers or stages
like an onion and each layer contributes to the making of the product. The identified
layers are

Core layer- the core layer of the product explains the reasons for which the
customer is making the purchase. The layer explains the why of buying the
product.

Basic product layer- At the second layer, the customer looks at the basic
utilities, like physical features and tangible elements of the product.

Expected product layer- The expected layer is the set of attributes and
conditions that buyers normally expect out of the product. The basic product is
the given thing in the product.

Augmented product layer- The augmented part of the product is the associated
services and cues, which help the product to deliver beyond the expectation level
of the consumer. Brand positioning and competition starts at farm level when all
the product in a market look similar. In developing nations, the competition
originates at the level of expected product.

Potential product layer- the last layer is the potential layer of the product in
which the offer may undergo all the possible augmentations and transformations
in the future. Here the marketer is always on constant search for new methods
and processes to differentiate the offer on the basis of product features and
services that will satisfy the customer and create the desired differentiation.
The levels of the products are used to explain the concept of value
hierarchy in which the product manager can plan the level at which the basic
product is proposed and the level at which differentiation is to be made.

Q 2.
Explain the various types of retailers and wholesalers.
ANS.2 Types of retailers-there are various types of retail formats seen in the Indian
retail environment. They can be listed as follows-

Mom and pop stores and kirana stores- Mom and pop stores are the
traditional independent stores, which are spread across the country and cater to
a large chunk of population.

Department stores- these kids of stores are fond in U.S.A. example of such
stores include JC Penney, Sears, and Montgomery Ward that dominate malls
and downtowns.

Discount stores- these are big stores like Wal-Mart, which is the biggest retailer
in the world. These big stores achieve economy of scale and hold substantial
power in the market.

Category killers- these retailers dominate one area of merchandise like sports
goods, office depots, etc. these category killers buy such a huge quantity that
they can offer price at abysmally low levels, which even manufactures cannot
match.

Specialty stores- these stores include Body Shop, Crate and Barrel, and
Victoria Secrets. These stores concentrate on one type of merchandise and offer
in a manner that makes it special.
Types of wholesalers- the three basic type of wholesale institutions merchant
wholesalers, agent wholesalers, and manufactures sales branches and offices
are Merchant wholesalers- merchant wholesalers take ownership of goods in
which they deal. Merchant wholesalers are independently owned;
separate from suppliers on one hand and from the retailers on the other
hand.
Agent wholesalers- they are primarily involved in the buying and selling
of goods and services. They typically negotiate sales as representatives of
other firms and do not take title to merchandise. They also participate in
the collection of the market information, promotion and ordering.

Manufacturers sales branches and sales offices- Branches,

sometimes called captive distributors, are wholesaling operations owned
and operate by a manufacturer and maintained separately from the
producing plant to sell and market its products. The sales branches
include a warehouse with inventory, whereas sales offices dont have any
inventory.

Q3.
Describe the steps in business buying process.
Ans.3- Steps in buying process-While organizational buying is best viewed as a
decision process, the steps that make up the process differ across companies and
product.

Step 1: Recognising an organizational need- organizational purchasing starts

with the identification of demand for products and services. While there are
different kinds of needs, most needs arise out of situation related to the operation
of the business. Need recognition is not always as complicated or involved as it
is in new task and modified re-buy decisions. It becomes a routine, particularly in
a straight re-buy situation.

Step 2: Determining product specifications- subsequent to identification of the

responsibility centre, the purchase manager also specifies exact product and
service descriptions for procurement. It is also necessary to estimate the exact
quality required and the period in which these quantities need to be delivered.

Step 3: Identifying suppliers- If there are many suppliers on the list, a

screening procedure that bases its decisions on certain predefined criteria is
needed. The information gathered enables the organizational buyer to quickly
look for suppliers who can meet minimum requirements. These requirements
might be deliver time, capacity to meet the buyers quantity needs and breadth of
the product line.

Step 4: Information search and supplier evaluation- A buying centre may

have to evaluate several product types for a particular use before suppliers can
be selected. If products are complicated, technically trained people sort through

the alternatives to recommend those that meet previously developed product

specifications.

Step 5: Negotiation of purchase orders- an organizational buyer may negotiate

a contractual agreement with a supplier. An agreement of this kind can cover a
single purchase of a product or repurchase of a product over a period of time.
Contracts are commonly used in straight re-buy situations.

Q4.
Explain the product mix pricing strategies with examples.
ANS.4 Product mix- an organizational buyer may negotiate a contractual
agreement with a supplier. An agreement of this kind can cover a single purchase of
a product or repurchase of a product over a period of time. Contracts are commonly
used in straight re-buy situations.

an organizational buyer may negotiate a contractual agreement with a supplier.

An agreement of this kind can cover a single purchase of a product or
repurchase of a product over a period of time. Contracts are commonly used in
straight re-buy situations.
Product mix pricing strategies- In various corporations where a range or line of
product is sold, the price of individual item must consider he prices in the range.
The several forms of product mix pricing are as follows(A) Product-line pricing- In this method, the prices of different products in a
product line are being set on the basis of cost differences among
products, various features assessment by customer also competitors
prices.
(B) Optional features pricing- It focuses on pricing on additional aspects
with the main products, e.g., pricing of air conditioners, personal
computers, automobiles, etc. these supplementary aspects or features a
purchaser may or may not prefer to add to the main product purchased.
(C) Captive-product pricing- Products that require use of ancillary products
are produced by certain companies e.g, razors, inkjet or laser printers.

Various types of razors are manufactured by Gillette and for each type the
company has special blades that fit a particular type of razor. The razor
price is low, however, the margins on blades are high.
(D) Two-part pricing- this method is widespread among service providing
companies. For providing basic service, they charge a fixed price and a
variable usage rate. E.g., a monthly fixed price is charged by telephone
service providers and variable per call charges for calls beyond a specific
number.
(E) Product bundling pricing- In this pricing, a bundle combining several
products is being offered at a reduced prices. The theatres and sports
teams where season tickets are sold at less than the cost of single tickets
popularly use this type of pricing.

Q5.
Advertisement is a media which conveys message about the product. It is
important to understand different types of advertisement to attract the attention of
the people to a product and service. Find out the various forms of advertisement.
Ans.5- Advertisement- Advertising is a paid form of communication in which the
sponsor or the brand owner has made payments to the media to carry the message
through their set of media vehicles.
The word advertising is derived from a Latin word Advertere which means o turn the
mind. Broadly speaking, advertising does turn the attention of people to a commodity or
service.
Types of advertisements- Advertising can be classified into various forms as
mentioned below.

Brand advertising- This is the most popular form of advertising. All possible
media including television is flooded with brand advertising. Brands like Surf
Excel, Pepsi, and Coke in India are shown more frequently on Indian televisions.

National advertisement- These advertisements are uniform across the nation

and are released through national media covering the nation.

Local advertisement-These advertisements are carried out in local and

vernacular media to promote the product in a local region.

Retail advertisement- these advertisements are brought to promote retail

outlets and dealer points.

Nation and destination advertising- These advertisements are brought out to

promote a nation as a tourism destination. These are also used for promoting
states, cities, and tourist attractions.

Political advertising- these advertisements are done for political parties,

politicians, and individual candidates during elections and referendums.

Social advertising- These advertisements are brought for a social cause like
against AIDS, sexual exploitations, women trafficking, child labour, and other
critical issues in a society.

Directory advertisement- These advertisements are done in directories and

yellow pages and followed by people while collecting a telephone number or a
address.

Q6.
Explain the forms of customer relationship and the reasons behind losing
customer by organization.
Ans.6 Forms of customer relationship- The three main forms of CRM programmes
are-

1. Continuity marketing- these programmes are generally aimed at retaining

customers and enhancing their loyalty. The basic premise is that of offering longterm special services with potentially of increased mutual value.

2. Individual marketing- These programmes aim at meeting individual customers

needs, which are fully satisfying and uniquely customized. In the mass markets,
information on individual customers become the basis of individual customer
interactions.

3. Co-marketing- Co-marketing has long been used in individual marketing by way

of key account management programmes. It involves appointment of separate
teams by marketers to decide on the use of company resource to be used to
meet individual customer needs.

Reasons behind losing customers- Such factors include customer service, customer
attention, product quality, promises, and competitions.

Customer service- it is expected from occasionally dissatisfied customers. Even

if you have the best customer service team and you resolve problems at the
earliest, some customer will have problem.
Customer attention- It is one the major reasons why a customer specially a
business customer, decides not to deal with an organization. You must have
noticed that people move to other restaurants if the restaurant that they first
visited is full and they are left unattended by their executives.
Product quality-It is obvious that any company that compromises on product
quality is likely to lose its customers. Though some customers might stay if the
price is low, in the long run the company is bound to have less, loyal customers.

Failure to keep promises- The companies must live up to the promises made
in their communications. If an ad says customers will get 40% flat discount on all
items, then it must give them the same.

Completions When the offerings of different organizations are not

differentiated, competitive parity exists. Competitive parity here means that there
is equality or essential equivalence between the competitors.