ASSIGNMENT

Subject code: MB0030

(3 credits)
Set 2
Marks 60
SUBJECT NAME: MARKETING MANAGEMENT

Answer the following questions. Each Question carries 10 marks

1. Write a short note on product life cycle.

Answer: The product life cycle goes through many phases, involves many professional
disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do
with the life of a product in the market with respect to business/commercial costs and sales
measures; whereas product life cycle management (PLM) has more to do with managing
descriptions and properties of a product through its development and useful life, mainly from
a business/engineering point of view. To say that a product has a life cycle is to assert four
things: 1) that products have a limited life, 2) product sales pass through distinct stages, each
posing different challenges, opportunities, and problems to the seller, 3) profits rise and fall at
different stages of product life cycle, and 4) products require different marketing, financial,
manufacturing, purchasing, and human resource strategies in each life cycle stage.

The different stages in a product life cycle are:

1.Market introduction stage

I:* costs are high
II:* slow sales volumes to start
III:* little or no competition - competitive manufacturers watch for acceptance/segment
growth losses
IV:* demand has to be created
V:* customers have to be prompted to try the product
VI: makes no money at this stage
2.Growth stage
I:* costs reduced due to economies of scale
II:* sales volume increases significantly
III:* profitability begins to rise
IV:* public awareness increases
V:* competition begins to increase with a few new players in establishing market
VI:* increased competition leads to price decreases
3.Mature stage
I:* Costs are lowered as a result of production volumes increasing and experience curve
effects
II:* sales volume peaks and market saturation is reached
III:* increase in competitors entering the market
IV:* prices tend to drop due to the proliferation of competing products
V:* brand differentiation and feature diversification is emphasized to maintain or increase
market share
VI:* Industrial profits go down
4.Saturation and decline stage
I:* costs become counter-optimal
II:* sales volume decline or stabilize
III:* prices, profitability diminish
IV:* profit becomes more a challenge of production/distribution efficiency than increased
sales

Request for Deviation

In the process of building a product following defined procedure, an RFD is a request for
authorization, granted prior to the manufacture of an item, to depart from a particular
performance or design requirement of a specification, drawing or other document, for a
specific number of units or a specific period of time.

Market Identification
A "micro-market" can be used to describe a Walkman, more portable, as well as individually
and privately recordable; and then Compact Discs ("CDs") brought increased capacity and
CD-R offered individual private recording...and so the process goes. The below section on the
"technology lifecycle" is a most appropriate concept in this context.[clarification needed]
Most of the context is not in English so you may need a translator.[clarification needed]
In short, termination is not always the end of the cycle; it can be the end of a micro-entrant
within the grander scope of a macro-environment. The auto industry, fast-food industry, petro-
chemical industry, are just a few that demonstrate a macro-environment that overall has not
terminated even while micro-entrants over time have come and gone.

It is claimed that every product has a life cycle. It is launched, it grows, and at some point,
may die. A fair comment is that - at least in the short term - not all products or services die.
Jeans may die, but clothes probably will not. Legal services or medical services may die, but
depending on the social and political climate, probably will not.

Even though its validity is questionable, it can offer a useful 'model' for managers to keep at
the back of their mind. Indeed, if their products are in the introductory or growth phases, or in
that of decline, it perhaps should be at the front of their mind; for the predominant features of
these phases may be those revolving around such life and death. Between these two extremes,
it is salutary for them to have that vision of mortality in front of them.

However, the most important aspect of product life-cycles is that, even under normal
conditions, to all practical intents and purposes they often do not exist (hence, there needs to
be more emphasis on model/reality mappings). In most markets the majority of the major
brands have held their position for at least two decades. The dominant product life-cycle, that
of the brand leaders which almost monopolize many markets, is therefore one of continuity.

In the criticism of the product life cycle, Dhalla & Yuspeh state:

The PLC is a dependent variable which is determined by market actions; it is not an

independent variable to which companies should adapt their marketing programs. Marketing
management itself can alter the shape and duration of a brand's life cycle.[1]

Thus, the life cycle may be useful as a description, but not as a predictor; and usually should
be firmly under the control of the marketer. The important point is that in many markets the
product or brand life cycle is significantly longer than the planning cycle of the organisations
involved. Thus, it offers little practical value for most marketers. Even if the PLC (and the
related PLM support) exists for them, their plans will be based just upon that piece of the
curve where they currently reside (most probably in the 'mature' stage); and their view of that
part of it will almost certainly be 'linear' (and limited), and will not encompass the whole
range from growth to decline.

2. Explain various categories of brand sponsorship with example.

Answer: Sponsorship plays a significant role in the planning and execution of any brand
promotion. Sponsors consider return on investment (ROI) when measuring the value of
sponsorships. And the most important elements include awareness and financial benefits. For
the Taste of Chicago 2007, a total of 69 sponsors across 12 different sponsorship categories
supported the event.

Christine Jacob, senior manager of corporate sponsorships in the Mayor’s Office of Special
Events in Chicago, supports numerous programs throughout the year. But for the Taste, her
goal is to identify sponsors and secure/negotiate terms early to help maximize the event's total
revenue.

Sponsorship categories at the Taste include the following:

Presenting ($750,000)
Family Village ($125,000)
3rd of July ($125,000)
Official Credit Card ($90,000)
Taste Stage ($90,000)
Concert: 1 per night (customized)
Gourmet Dining Pavilion ($50,000)
Dining Pavilion ($40,000)
Participating ($30,000)
On-Site: 10 days ($25,000)
On-Site: 1 day ($5,000)
Media: in-kind value ($120,000)

Of course, sponsors are savvy and measure the benefits of participating in a community
festival against their own business objectives.
For example, some sponsors use the Taste as an opportunity to brand themselves with some of
the entertainment options to expand their visibility with event attendees. The result: Humana
Senior Pavilion, Dominick’s Cooking Corner, Gallo Wine Pavilion (part of Gourmet Dining).

How to Secure Sponsors

Because the Taste of Chicago is an established annual event, sponsorship renewals typically
begin in September for the following year with contract commitments by December.

“We’re fortunate that Taste is what it is,” Jacob explains. “People call us – which is great. It’s
a marketer’s dream to be part of Taste.”

When the programming committee for the Taste meets each year in the fall, they consider new
programming areas and that’s when the sponsorship team begins to integrate these ideas into
the their platform.

In 2007, the Taste included three new areas: Goin’ Green Pavillion, Sports Pavilion, and a
International Pavilion. If a sponsor isn’t identified, the category is simply sponsored by the
city, and the benefits are measured and used to find a sponsor for the following year (as long
as the for the next year.

If sponsors do not commit by year end or drops out for any reason, it’s time for the
sponsorship team to pursue new sponsors.

“That could mean cold calls and pitches,” Jacobs explains. “For example, if an automotive
sponsor drops out, we’ll approach another automotive sponsor who we’ve worked with in the
past.”

For those approaching sponsorship for the first time or those who are holding a previous
organized event that is now annualized, Jacobs offers the following tips:

Even if you’re not successful, try to secure a first year sponsor.

Sponsorships must be identified as part of the initial planning phase.
Brainstorm program elements early to allow maximum time to secure sponsors.
Identify the value of each category; reinforce the benefits of a previously held program and its
sponsorship levels.
Create a fact sheet for each property/individual sponsorship category.
Offer higher level sponsors the right of first refusal. Majority of sponsors are either
participatin or onsite. Many Renew all sponsorships at least six months prior to the event.

Secure new/replacement sponsors at least three months prior to the event.

Hold weekly or regular meetings to communicate sponsor status and renewals.
Common Elements in a Sponsorship Package

Sponsors consider return on investment (ROI) when measuring the value of sponsorships.
And the most important elements include awareness and financial benefits.

Nevertheless, event planners who organize community events such as a food festival will
determine sponsorship levels and direct benefits from the organizer to help support those ROI
objectives. Depending on the sponsorship level, visibility included in the Taste may include
any portion or all of the following:

Signage/banner opportunities (stage, railing, towers, street pole, etc.)

Corporate logo on main stage
Category exclusivity
Promotional tent
Advertisement in program materials
Status level on event brochure
Corporate logo on event advertisements
Corporate logo at ticket windows
Mentions in radio advertising
Priority seating tickets
Use of corporate hospitality tents
Main stage presentations
Main stage mentions
Opportunity to bring inflatable for increased visibility
Corporate press releases with event press kits
Parking and delivery permits
Invitations to press preview party
Opportunity to distribute pre-approved sample items
Benefits of Sponsorship

While “cash” may seem like the most obvious reason to secure sponsors, many other benefits
exist for incorporating sponsorship categories into a community food festival, according to
Jacob:

Concert sponsorship helps bring top name artists.

Corporate sponsorships enhance programming.
The Value of In-Kind Offers
To be sure, sponsoring an established event like the Taste is beneficial to both sponsor and
organizer, so in-kind offers can sometimes be viewed as cash. Some examples that Jacob
suggests include the following:

Media sponsors to provide TV, radio and print advertising.

Radio sponsors to offset talent expenses.
Airline sponsors to provide seats for out of town entertainment.
Hotels to provide complimentary guest rooms for entertainment.

Another important factor when identifying sponsors for a family event: “We do not have any
‘sin’ categories. We avoid tobacco and sex related sponsors,” Jacob says. “And because this is
a food festival, no food sampling is allowed.”
For anyone who is considering an event like this for the first time, Jacob recommends doing a
lot of research, and suggests that planners consider using an experienced firm to find out how
other people do it.

3. Explain the product mix pricing strategies with example.

Answer: Pricing is one of the most important elements of the marketing mix, as it is the only
mix, which generates a turnover for the organisation. The remaining 3p’s are the variable cost
for the organisation. It costs to produce and design a product, it costs to distribute a product
and costs to promote it. Price must support these elements of the mix. Pricing is difficult and
must reflect supply and demand relationship. Pricing a product too high or too low could
mean a loss of sales for the organisation. Pricing should take into account the following
factors:
• Fixed and variable costs.
• Competition
• Company objectives
• Proposed positioning strategies.
• Target group and willingness to pay.

Types of Pricing Strategies

An organisation can adopt a number of pricing strategies. The pricing strategies are based
much on what objectives the company has set itself to achieve.

Penetration pricing: Where the organisation sets a low price to increase sales and market
share.

Skimming pricing: The organisation sets an initial high price and then slowly lowers the price
to make the product available to a wider market. The objective is to skim profits of the market
layer by layer.
Competition pricing: Setting a price in comparison with competitors.

Product Line Pricing: Pricing different products within the same product range at different
price points. An example would be a video manufacturer offering different video recorders
with different features at different prices. The greater the features and the benefit obtained the
greater the consumer will pay. This form of price discrimination assists the company in
maximizing turnover and profits.

Bundle Pricing: The organisation bundles a group of products at a reduced price.

Psychological pricing: The seller here will consider the psychology of price and the
positioning of price within the market place. The seller will therefore charge 99p instead £1 or
$199 instead of $200
Premium pricing: The price set is high to reflect the exclusiveness of the product. An example
of products using this strategy would be Harrods, first class airline services, Porsche etc.
Optional pricing: The organization sells optional extras along with the product to maximize its
turnover. This strategy is used commonly within the car

industry.

4. What are various logistics functions? Describe in brief.

Answer: It is important to recognize that the various logistic functions come together to form
the totality of logistics support. A NATO logistician of one discipline will often work with a
staff officer of another discipline and, as a very minimum, will have to appreciate the other's
responsibilities and problems. For example, logistic planning originates in national, NATO or
MNC policy guidance and has to be coordinated with all the staff branches concerned,
whether they be operational, administrative or logistic, military or civil.

Materiel Function of Logistics

Production or acquisition logistics covers materiel, from the first phase of the life cycle to its
final disposal from the inventory. The first part of the cycle, from specification, design and
production is clearly a function of production logistics. Reception of the equipment into
service, its distribution and storage, repair, maintenance and disposal are clearly a consumer
logistic task. However, the initial design of the equipment which is part of production logistics
has to take account of the consumer aspects of repair and maintenance, and therefore involves
both disciplines.

Supply Function of Logistics

Supply covers all materiel and items used in the equipment, support and maintenance of
military forces (classes of supply are listed at Annex A). The supply function includes the
determination of stock levels, provisioning, distribution and replenishment.

Maintenance and Repair Function of Logistics

Maintenance means all actions to retain the materiel in or restore it to a specified condition.
The operational effectiveness of land, naval and air forces will depend to a great extent on a
high standard of preventive maintenance, in peacetime, of the equipment and associated
materiel in use. Repair includes all measures taken to restore materiel to a serviceable
condition in the shortest possible time.

Battle Damage Repair (BDR) is an important element in maintaining materiel availability

during operations. It is designed to restore damaged materiel to a battleworthy condition,
irrespective of the cause of the failure, as quickly as possible. Damage assessment has to be
done rapidly and must not always require the use of automated test equipment or sophisticated
tools. The considerations are primarily aimed at limiting the damage, determining the cause of
the damage, establishing a plan for damage repair, and minimizing the risk to equipment and
operators. Once the operational mission has been accomplished, BDR must be followed by
specialized maintenance or repair to restore the equipment to fully serviceable condition.

Service Function of Logistics

The provision of manpower and skills in support of combat troops or logistic activities
includes a wide range of services such as combat resupply, map distribution, labour resources,
postal and courier services, canteen, laundry and bathing facilities, burials, etc. These services
may be provided either to one's own national forces or to those of another nation and their
effectiveness depends on close cooperation between operational, logistic and civil planning
staffs.

Explosive Ordnance Disposal (EOD) Function of Logistics

EOD involves the investigation, detection, location, marking, initial identification and
reporting of suspected unexploded ordnance, followed by the on-site evaluation, rendering
safe, recovery and final disposal of unexploded explosive ordnance. It may also include
explosive ordnance which has become hazardous by damage or deterioration. The NATO
EOD Technical Information Centre (EODTIC) holds records of all past and present
ammunition and explosives, and provides an immediate advisory service on EOD problems.

Movement and Transportation Function of Logistics

It is a requirement that a flexible capability exists to move forces in a timely manner within
and between theatres to undertake the full spectrum of Alliance roles and missions. It also
applies to the logistic support necessary to mount and sustain operations.

Engineering Function of Logistics

The area of logistic engineering, while not exclusively a logistic function will require close
coordination with logistics as the mission is very closely aligned with logistics in terms of
facilitating the logistic mission of opening lines of communication and constructing support
facilities. The engineering mission bridges the gap from logistics to operations and is closely
related to the ultimate success of both. The acquisition, construction and operation of facilities
forms the basis for the NISP. This is the term generally used in NATO for installations and
facilities for the support of military forces.

Medical Function of Logistics

This function entails the provision of an efficient medical support system to treat and evacuate
sick, injured and wounded personnel, minimise man days lost due to injury and illness, and
return casualties to duty. An effective medical support system is thus considered a potential
force multiplier. Though medical support is normally a national responsibility, planning must
be flexible and consider coordinated multinational approaches to medical support. The degree
of multinationality will vary depending on the circumstances of the mission, and be dependent
upon the willingness of nations to participate in any aspect of integrated medical support.

Contracting Function of Logistics

Contracting has become increasingly important to the conduct of operations, particularly when
operating beyond NATO's area of responsibility. It is a significant tool that may be employed
to gain fast access to in-country resources by procuring the supplies and services that the
NATO Commander requires.

Budget and Finance Function of Logistics

The areas of budget and finance impact virtually every aspect of logistic operations. The
funding and budget policies to pay for deployment and sustainment and redeployment are
unique. While nations are generally expected to finance their own operations.

5. What is IMC? Describe the communication development process in brief.

Answer: A management concept that is designed to make all aspects of marketing

communication such as advertising, sales promotion, public relations, and direct marketing
work together as a unified force, rather than permitting each to work in isolation.

It aims to ensure consistency of message and the complementary use of media. The concept
includes online and offline marketing channels. Online marketing channels include any e-
marketing campaigns or programs, from search engine optimization (SEO), pay-per-click,
affiliate, email, banner to latest web related channels for webinar, blog, micro-blogging, RSS,
podcast, and Internet TV. Offline marketing channels are traditional print (newspaper,
magazine), mail order, public relations, industry relations, billboard, radio, and television. A
company develops its integrated marketing communication programme using all the elements
of the marketing mix (product, price, place, and promotion).
Integrated marketing communication is integration of all marketing tools, approaches, and
resources within a company which maximizes impact on consumer mind and which results
into maximum profit at minimum cost. Generally marketing starts from "Marketing Mix".
Promotion is one element of Marketing Mix. Promotional activities include Advertising(by
using different medium), sales promotion (sales and trades promotion), and personal selling
activities. It also includes internet marketing, sponsorship marketing, direct marketing,
database marketing and public relations. And integration of all these promotional tools along
with other components of marketing mix to gain edge over competitor is called Integrated
Marketing Communication.

Reasons for the Growing Importance of IMC

Several shifts in the advertising and media industry have caused IMC to develop into a
primary strategy for marketers:

From media advertising to multiple forms of communication.

From mass media to more specialized (niche) media, which are centered around specific target
audiences.

From a manufacturer-dominated market to a retailer-dominated, consumer-controlled market.

From general-focus advertising and marketing to data-based marketing.

From low agency accountability to greater agency accountability, particularly in advertising.

From traditional compensation to performance-based compensation (increased sales or

benefits to the company).

From limited Internet access to 24/7 Internet availability and access to goods and services.

Selecting the Most Effective Communications Elements

The goal of selecting the elements of proposed integrated marketing communications is to

create a campaign that is effective and consistent across media platforms. Some marketers
may want only ads with the greatest breadth of appeal: the executions that, when combined,
provide the greatest number of attention-getting, branded, and motivational moments. Others
may only want ads with the greatest depth of appeal: the ads with the greatest number of
attention-getting, branded, and motivational points within each.

Although integrated marketing communications is more than just an advertising campaign, the
bulk of marketing dollars is spent on the creation and distribution of advertisements. Hence,
the bulk of the research budget is also spent on these elements of the campaign. Once the key
marketing pieces have been tested, the researched elements can then be applied to other
contact points: letterhead, packaging, logistics, customer service training, and more, to
complete the IMC cycle.

6. What are alternative approaches to marketing while going international? Study

Pepsi’s international marketing strategy.

Answer: Markets and marketing are becoming ever more international in their nature and
managers around the world ignore this fact at their peril. To achieve sustainable growth in
markets that are becoming increasingly global, or merely to survive in domestic markets that
are increasingly attacked by international players, it is essential that organisations understand
the complexity and diversity of international marketing and that their managers develop the
skills, aptitudes and knowledge necessary to compete effectively around the globe.

A company must learn how to enter foreign markets and increase their global competitiveness.
Firms that do venture abroad find the international marketplace far different from the
domestic one. Market sizes, buyer behavior and marketing practices all vary, meaning that
international marketers must carefully evaluate all market segments in which they expect to
compete.

Whether to compete globally is a strategic decision (strategic intent) that will fundamentally
affect the firm, including its operations and its management. For many companies, the
decision to globalize remains an important and difficult one (global strategy and action).
Typically, there are many issues behind a company`s decision to begin to compete in foreign
markets. For some firms, going abroad is the result of a deliberate policy decision (exploiting
market potential and growth); for others, it is a reaction to a specific business opportunity
(global financial turmoil, etc.) or a competitive challenge (pressuring competitors). But, a
decision of this magnitude is always a strategic proactive decision rather than simply a
reaction (learning how to business abroad). Reasons for global expansion are mentioned
below:

a) Opportunistic global market development (diversifying markets)

b) Following customers abroad (customer satisfaction)
c) Pursuing geographic diversification (climate, topography, space, etc.)
d) Exploiting different economic growth rates (gaining scale and scope)
e) Exploiting product life cycle differences (technology)
f) Pursuing potential abroad
g) Globalizing for defensive reasons
h) Pursuing a global logic or imperative (new markets and profits)

Moreover, there can be several reasons to be mentioned including comparative advantage,

economic trends, demographic conditions, competition at home, the stage in the product life
cycle, tax structures and peace. To succeed in global marketing companies need to look
carefully at their geographic expansion. To some extent, a firm makes a conscious decision
about its extent of globalization by choosing a posture that may range from entirely domestic
without any international involvement (domestic focus) to a global reach where the company
devotes its entire marketing strategy to global competition. In the development of an
international marketing strategy, the firm may decide to be domestic-only, home-country,
host-country or regional/global-oriented.

Each level of globalization will profoundly change the way a company competes and will
require different strategies with respect to marketing programs, planning, organization and
control of the international marketing effort. An industry in which firm competes is also
important in applying different strategies. For example, when a firm which competes in the
pharmaeutical industry which is heavily globalized, it has to set its own strategies to deal with
global competitors. (constant innovation)

Tracking the development of the large global corporations today reveals a recurring,
sequential pattern of expansion. The first step is to understand the international marketing
environment, particularly the international trade system. Second, the company must consider
what proportion of foreign to total sales to seek, whether to do business in a few or many
countries and what types of countries to enter. The third step is to decide on which particular
markets to enter and this calls for evaluating the probable rate of return on investment against
the level of risk (market differences). Then, the company has to decide how to enter each
attractive market. Many companies start as indirect or direct export exporters and then move
to licensing, joint-ventures and finally direct investment; this company evolution has been
called the internationalization process. Companies must next decide on the extent to which
their products, promotion, price and distribution should be adapted to individual foreign
markets. Finally, the company must develop an effective organization for pursuing
international marketing. Most firms start with an export department and graduate to an
international division. A few become global companies which means that top management
plans and organizes on a global basis (organization history).

Typically, these companies began their business development phase by entrenching

themselves first in their domestic markets. Often, international development did not occur
until maturity was reached domestically. After that phase, these firms began to turn into
companies with some international business, usually on an export basis. But, this process may
vary dramatically with the size of the domestic market.

Pepsi’s international marketing strategy

When the "You're in the Pepsi Generation" advertising campaign launched in 1963, it may
have been the first time a brand was marketed primarily with an association to its consumers'
aspirational attitudes. A decidedly youth-oriented strategy, The newest campaign slogan,
introduced this year, is "More Happy," which definitely coincides with one concrete example
of "more" in the packaging of Pepsi products today—more designs. Many more. At least 35
distinct design ideas will grace the packaging of Pepsi's cans and bottles this year alone, and
this design strategy may continue indefinitely.

Though not "generational" in word, the campaign certainly has a youth-oriented feel with
package designs, advertising, and websites that are fun and playful. PepsiCo worked closely
with Peter Arnell and Arnell Group, based in New York City, to devise a comprehensive new
strategy that would connect with Pepsi's core consumers. Arnell reinvented the Pepsi package
as a meaningful and appealing communications tool for the latest generation of youth that are
not overwhelmed by media, music, or digital distractions.

Pepsi actually asked their loyal consumers what brand elements would have to remain so that
they would be intuitively reassured that their favorite drinks were not changing and the brand
they trusted was still essentially the same. Their answer was direct and consistent. Pepsi-
lovers needed to see three elements for sure—the Pepsi "globe," the iconic Pepsi blue, and the
familiar tilted Pepsi capital letters.

The most recent logo design had the Pepsi wordmark on top of and slightly overlapping the
iconic Pepsi red-white-and-blue "globe." On the previous can design, the wordmark wrapped
halfway around the can, and the globe was off-center. The new cans and bottles have un-
bundled the word and globe, making the newly centered globe more of the hero, and the
smaller Pepsi wordmark less prominent.

Television ad campaigns are reinforcing the globe-centric approach by featuring a boulder-

sized Pepsi globe in various settings careening to and fro like a pinball. In the ads and on the
front of most of the new packages is the reassuring tag line: "Same Pepsi inside, new look
outside." Miller explains that it is customary and important to reassure consumers for at least
six months in situations like this.

Today's youth as demanding authenticity from the products they come into contact with in
their day-to-day experiences. The new Pepsi design strategy is versatile because it can be
authentic and stay current, and it could also make introducing special seasonal or regional
designs more intriguing and less disruptive. "This is a new way of using packaging as media,"
explains Miller. "The consumer is looking for more variety and expecting more from their
brands. They want to have a dialogue with their favorite brands.”