ASSIGNMENT

Course Code : MS-06

Course Title : Marketing for Managers
Assignment Code : MS-06/SEM-I/2010
Coverage : All Blocks

Note: Please attempt all the questions and send it to the Coordinator of the study
center you are attached with

1 a) Distinguish Product Marketing and Service Marketing, with suitable illustrations.

b) How do the marketing objective and marketing mix vary across the Product Life Cycle (PLC)?
Explain with a suitable example.

2 a) Distinguish between Market Segmentation and Product Differentiation. Discuss

the bases that you will use in segmenting the market for the following products:

i) Internet services
ii) Electric small car

b) What are the major considerations involved in designing the marketing organization for a
European furniture manufacturer foraying into Indian market?

3 a) Discuss the variables that affect the distribution decisions for the following:
i) DTH services
ii) Fast Food Joint

b) What are the criteria marketers must evaluate before selecting a brand name?

4a) Both primary data and secondary data complement each other in marketing
decision making. Explain.

b) Distinguish cyber marketing with conventional marketing. What are the reasons for its rapid
growth in the Indian context? Enumerate its limitations.

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Ques 1 a) Distinguish Product Marketing and Service Marketing, with suitable illustrations.
Ans : Marketing deals with identifying and meeting human and social needs. Marketing is an
organizational function and a set of processes for creating, communicating, and delivering value to
customers and for managing customer relationships in ways that benefit the organization and its stake
holders. Marketing is a societal process by which individuals and groups obtain what they need and
want through creating, offering, and freely exchanging products and services of value with others.
One of the shortest definitions of marketing is "meeting needs profitably."
Marketing can be differentiated as:
- Marketing of products
- Marketing of services

Product Marketing :
Product marketing deals with the first of the 4P's of marketing, which are product, pricing,
place, and promotions. Product marketing, deals with more outbound marketing tasks. For Example,
marketing of Tooth-paste is Product Marketing.

Product marketing in a business addresses five important strategic questions:

- What products will be offered ? (i.e., the breadth and depth of the product line)
- Who will be the target customers ? (i.e., the boundaries of the market segments to be served)
- How will the products reach those ?(i.e., the distribution channel)
- How much should the products is priced at?
- How to introduce the products (i.e., the way to promote the products)?

For a Tooth-paste product following points need to be taken into consideration :

- Your product has unique advantage/benefits.
- Your product offers the most competitive ‘‘value for money’’.
- Your product is one of the affordable in the market for its range.
- Your product positioning in the niche market.
- Your product distribution is matchless in the market, available at arms length.
- Your product merchandising is the most attractive at the retail level.

Service Marketing :
Service is any act or performance that one party can offer to another that is essentially
intangible and does not result in any ownership. Service marketing is marketing based on relationship
and value. For Example, Education.
The major difference in the services marketing versus product marketing is that instead of the
traditional 4P's, Product, Price, Place, Promotion, there are three additional P's consisting of People,
Physical evidence, and Process. Services have some distinctive characteristics that make them so
different from products.
- Intangibility
- Inseparability
- Heterogeneity
- Perishability
- Ownership

Differences Between Marketing a Product and Marketing a Service

1. Services are intangible:
When you buy a product, you have a fairly good idea of what you’re buying because you can
physically see it and maybe even give it a trial run before you buy. The selling process involves
ordering the product, paying for it, and having it delivered within a few days. On the other hand,
services are highly customized and tailored to your client’s specific needs. Prospects may come to you
knowing exactly what they want, or ask you to fix a problem that they don’t know the cause. Usually,
there is an initial period of up front work to diagnose the problem and offer a solution outlined in a

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proposal. Your client then accepts your proposal, pays an initial amount, and you start working with
them for up to several months or even years. With this comes an element of uncertainty. Prospects
must evaluate whether you can do what you say you will, whether your proposed solution is right for
them, and whether they can develop a good working relationship with you.

2. Service marketing involves more Personal Contact :

Services require you to build a relationship with people and continue to develop it. When
marketing products, you don't have to get to know your customer. As long as you know the basic
demographics of your customer base, you're probably good to go. Chances are fairly high that once a
person has purchased a product from you, you'll never have to see them again (well, hopefully they'll
continue to buy your products, but you'll never have to develop a relationship with them). You don't
need to have many conversations with your customers.
But when marketing a service, you must come in contact with your clients and customers. In order
to keep your customers, you need to continue marketing and interacting with those people. If a
customer decides, he doesn't personally like you or your company, you may lose that customer. But
with a product, a customer doesn't usually make strong decisions about you or your company. They
just buy your product. With a service, you always have to be working at improving your relationship
with your customers. There is much more personal contact required when marketing a service as
compared with marketing products. Marketing services may require meeting the customer in a face-to-
face basis, or it may mean contacting prospective customers over the telephone.

3. Selection of Customers :
When marketing a product, you realize that you can sell a product to basically anyone. You
need to be sure that you have the correct demographic group, but after that point, anyone who can
afford to buy your product can be included in your marketing group. But with a service, you must be
more selective when choosing your potential customers. A service may be more expensive for
customers in the long run because it can be used over time. This means that you need to market to a
select group of potential customers who will be able and willing to afford your service. Plus, you will
have to realize that you're going to be working on a close basis with these people, so you should
choose a group that you feel you can work well with.

4. Objections can be warnings rather than something to be overcome:

With product selling, salespeople are trained how to overcome their prospect’s objections. They’re
goal is to make the sell regardless of if the prospect wants it. With services, objections may be a red
flag warning that this prospect is a ‘bad match’ for your company.

5. Pricing differs with projects:

When marketing a product, you can usually pick a set budget and stick to it. It's usually pretty
easy to calculate. But with a service, you may have to re-negotiate your marketing costs. In general,
services are more difficult to price and so in the initial stages of your marketing campaign you will
need to spend extra time and money determining just how you're going to divide up the prices of your
service.
With products, pricing is fairly standard and easy to calculate. Vendors can negotiate within a
certain range to give discounts for bulk or frequent orders. There is initial work involved in diagnosing
your prospect’s problem, estimating the job, and preparing a proposal. Some firms charge an initial fee
just to do the analysis required to draw up the proposal for the problem. Once your client accepts,
they’re getting your time, and your time is valuable. You have bills to pay, salary requirements and
other clients that require your attention, so you don’t have nearly as much flexibility with pricing.
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Ques 1 (b) How do the marketing objective and marketing mix vary across the Product Life Cycle
(PLC)? Explain with a suitable example.
Ans : The product life cycle is based upon the biological life cycle. For example, a seed is planted
(introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an
adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline). In
theory it's the same for a product. After a period of development it is introduced or launched into the
market; it gains more and more customers as it grows; eventually the market stabilizes and the product
becomes mature; then after a period of time the product is overtaken by development and the
introduction of superior competitors, it goes into decline and is eventually withdrawn.

1. Introduction Stage :
The introduction stage starts when the new product is first launched. Introduction takes time and the
sales growth tends to be slow at this stage. Because it takes time to roll out a new product and fill
dealer pipelines.
During the introduction stage, the primary goal is to establish a market and build primary
demand for the product class. Following are some of the marketing mix implications of the
introduction stage:

Product - one or few products, relatively undifferentiated.

Price - Generally high, assuming a skim pricing strategy for a high profit margin as the early
adopters buy the product and the firm seeks to recoup development costs quickly. In some cases a
penetration pricing strategy is used and introductory prices are set low to gain market share
rapidly.

Place - Distribution is selective and scattered as the firm commences implementation of the
distribution plan.

Promotion - Promotion is aimed at building brand awareness. Samples or trial incentives may be
directed toward early adopters. The introductory promotion also is intended to convince potential
resellers to carry the product.

2. Growth Stage :
If the new product satisfies the market, it will enter a growth stage, in which sales will start climbing
quickly. The early adopters will continue to buy, and later buyers will start following their lead,
especially if they hear favorable word of mouth.
During the growth stage, the goal is to gain consumer preference and increase sales. The
marketing mix may be modified as follows:

Product - New product features and packaging options; improvement of product quality.

Price - Maintained at a high level if demand is high, or reduced to capture additional customers.

Place - Distribution becomes more intensive. Trade discounts are minimal if resellers show a
strong interest in the product.

Promotion- Promotion expenditure are at high level and increased advertising to build brand
preference

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3. Maturity Stage
The maturity stage is the most profitable. This maturity stage normally lasts longer than the previous
stages and it poses strong challenges to the marketing management. Most products are in the maturity
stage of the life cycle, and therefore most of the marketing management deals with the mature
products.
During the maturity stage, the primary goal is to maintain market share and extend the product
life cycle. Marketing mix decisions may include:

Product - Modifications are made and features are added in order to differentiate the product from
competing products that may have been introduced.

Price - Possible price reductions in response to competition while avoiding a price war.

Place - New distribution channels and incentives to resellers in order to avoid losing shelf space.

Promotion - Emphasis on differentiation and building of brand loyalty. Incentives to get
competitors customers to switch.

4. Decline Stage
The sales of most product forms and brands eventually dip. The decline may be slow or may
plunge to zero or they may drop a low level where they continue for many years.
Marketing mix may be modified as follows:

Product - The number of products in the product line may be reduced. Rejuvenate surviving
products to make them look new again.

Price - Prices may be lowered to liquidate inventory of discontinued products. Prices may be
maintained for continued products serving a niche market.

Place - Distribution becomes more selective. Channels that no longer are profitable are phased out.

Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued
products.

Product Life Cycle of Lux Soap

Lux is the brand of Unilever India Ltd. It has been winning hearts of Indian consumers for 80 years.
Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands.

Introduction stage
Lux launched the world’s first mass-market beauty soap in the US in 1924 & had been launched
in India in 1929. At that time there was only one competitor of Lux, which was from its own brand
“LIFEBUOY”. In the initial stages, Lux was introduced in the major cities of India like Calcutta,
Mumbai etc.

Marketing Objetives - was to create the product awareness and to attract the customers towards the
product.

The Lux Marketing Strategies in the initial stages :

Product : They offer only one product in the market. They did not come up with the differentiated
product.

Price : In the initial stages of the product, they offer the relatively higher price than their competitor
(LIFEBUOY). Because, they want to recover their initial cost of making the product.

Place : Distribution was selective and only covers the major cities of India to get recognition in those
cities. Their distribution channel was through Manufacturer, Wholesaler & Retailer.

Promotion : In the initial stages, they allocate more advertising budget So that more and
more customers could be attracted towards the product. In ads they targeted the early adopters, who
were readiest to buy the product.
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Growth Stage
In the growth stage, their sales rapidly started rising. They have expanded their market to the other
cities of India.

Marketing objectives : The marketing objectives of the lux were to expand their market to the other
cities of India and maximize market share.

In the growth stage, company had the following marketing strategies :

Product : In the growth stage, the company had offered the same product in the market.

Price : In this stage, the company had changed their price to some extent because of maximizing the
market share. ( slightly cut down the prices )

Place : In this stage, company had expanded their market to the other cities of India. Their distribution
channel was the same as in the initial stages of the product.

Promotion : In the growth stage, they had increased their advertising budget as in the initial stages
because of attracting the new customers or to retain the existing customers.

Maturity stage
They modified the product by adding some changes in the product. In this stage, few competitors enter
into the market like (cinthol, fairglow, santoor, chandrika, fiama di wills and vivel ). The company has
expanded their market to almost all the cities of India.

Marketing objectives : The marketing objective of lux is to maximize more profit while defending the
market share and to expand the market to all the cities of India.

Marketing strategies in this stage are based on:

Product : The lux has made the modification in the product by introducing : lux almond, lux orchid,
lux fruit, lux saffron, lux sandalwood, lux rose, lux international, lux chocolate, lux aromatic
extracts, lux oil and honey etc

Price : The lux products are now available at higher prices in the market, the reason behind is that the
company’s marketing objectives is to maximize more profit.

Place : Now lux products are available in almost all the cities of India and their distribution channel is
same as in the initial stage.

Promotion : In this stage lux advertising has been reduced to some extent because of the more brand
awareness in the minds of customers. Promotional offers like buy 3 get 1 free.

Decline stage
Besides of all campaigns for the sales promotion of lux .the reasons for its decline are :
1. Currency Fluctuations: Unilever products are in over 100 countries worldwide, as a result, it is
exposed to adverse currency fluctuations.

2. Slowdown: In year 2009 - 10 due to hard economic conditions in India and other countries the sales
were highly affected as the consumer started looking for some alternate products with a cheaper price
than lux.

3. Competition: lux has been facing competition from HUL itself (lifebuoy) & from other companies
like:- cinthol, fairglow, santoor and chandrika, superia, fiama di wills and vivel.

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 Using the product lifecycle as a tool for evaluating current business situation facilitates a
longer-term perspective and can point out options for future strategic decisions. The way a product’s
success is measured depends on where the product is in its life cycle. So the product manager must
understand the strategic company direction and translate that into product strategy and product life
cycle position.
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Ques 2 a) Distinguish between Market Segmentation and Product Differentiation. Discuss
the bases that you will use in segmenting the market for the following products:
iii) Internet services
iv) Electric small car
Ans : Market segmentation is the process in marketing of dividing a market into distinct segments that
behave in the same way or have similar needs. Because each segment is fairly homogeneous in their
needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are
likely to have similar feelings and ideas about a marketing mix comprised of a given product or
service, sold at a given price, distributed in a certain way and promoted in a certain way.
The overall intent is to identify groups of similar customers and potential customers; to
prioritize the groups to address; to understand their behaviour; and to respond with appropriate
marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus
improved. Improved segmentation can lead to significantly improved marketing effectiveness. With
the right segmentation, the right lists can be purchased, advertising results can be improved and
customer satisfaction can be increased
The purpose for segmenting a market is to allow your marketing/sales program to focus on the
subset of prospects that are "most likely" to purchase your offering. If done properly this will help to
insure the highest return for your marketing/sales expenditures. Depending on whether you are selling
your offering to individual consumers or a business, there are definite differences in what you will
consider when defining market segments.

Product differentiation is the process of distinguishing a product or offering from others, to

make it more attractive to a particular target market. This involves differentiating it from competitor’s
products as well as one's own product offerings. Differentiation looks to make a product more
attractive by contrasting its unique qualities with other competing products. Successful product
differentiation creates a competitive advantage for the seller, as customers view these products as
unique or superior.
Product differentiation can be achieved in many ways. It may be as simple as packaging the
goods in a creative way, or as elaborate as incorporating new functional features. Sometimes
differentiation does not involve changing the product at all, but creating a new advertising campaign
or other sales promotions instead. The major sources of product differentiation are as follows.
1 Differences in quality which are usually accompanied by differences in price
2 Differences in functional features or design
3 Ignorance of buyers regarding the essential characteristics and qualities of goods they are
purchasing
4 Sales promotion activities of sellers and, in particular, advertising
5 Differences in availability (e.g. timing and location).
Example of product segmentation is Reebok shoes. They provide eight different categories: soccer,
running, walking, football, basketball, children's, adventure, and fitness. Within each of these
categories is a whole series of products tailored to customers with a particular sports focus.

Segmenting the market for the Internet Services

In an Internet context, organisations need to target those customer groupings with the highest
propensity to access, choose and buy online. This is service product. Market can be segmented on
following bases:

Buyers
Buyers are business professionals who may be executives, engineers, managers, researchers, in fact
anyone who spends most of their working day online. This lucrative market segment does not get the
attention it deserves. Often these people are responsible for making purchasing decisions that require
sourcing supplies, materials and services all under very tight time pressures.
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Consumers
This category includes the home computer user who routinely checks out commercial online services.
This group is a gold mine. They're already receptive to making purchases over the Internet. Marketers
only have to make the online shopping experience easier and this market is hooked. No longer will
consumers be heading out to the mall for goods and services, they'll be shopping online in droves and
lovingit.

Surfers
Surfers are the online fun seekers. They use online technology as a form of recreation, to play games,
get music and expand their knowledge. They are typically younger and fickle. And these people have
short attention spans. They move all over in cyberspace. If something catches their attention, they stick
around. If a little bit of boredom sets in, they're off again and surfing elsewhere. This is the most
challenging group to market to, but one with a huge potential. Surfers are an impulsive bunch. If a
product catches their eye, they'll buy online with no second thoughts.

Demographic Segmentation
- age
- gender
- Education : Primary, High School, Secondary, College, Universities.
- income
- occupation
- education

Geographic Segmentation
- metro/ rural : Metropolitan Cities, small cities, towns.
- Density of Area Urban, Semi-urban, Rural.

Segmenting the market for the Electric Small Car

Consumer market can be segmented on the following customer characteristics:
1. Geographic Segmentation.
2. Demographic Segmentation.
3. Psychographic Segmentation.
4. Behaviouralistic Segmentation.

1. Geographic Segmentation.
Potential customers are in a local, state, regional or national marketplace segment. If a firm selling a
product such as small car, geographic location will remain a major factor in segmenting your target
markets since their customers are located in particular urban areas. Segmentation of customers based
on geographic factors are:-
a. Region: - Segmentation by continent / country / state / district / city.
b. Size: - Segmentation on the basis of size of a metropolitan area as per its population size.
c. Population density: - Segmentation on the basis of population density such as urban / sub-urban /
rural etc.
d. Climate: - Segmentation as per climatic condition or weather.

2) Demographic Segmentation : - Segmentation of customers based on demographic factors are:-

a. Income : - Segmentation is done on the basis of income level of a person.
b. Purchasing power :- Segmentation done on the basis of purchasing power of the customer.
c. Occupation.
d. Gender:-Product can be segmented for male and female.
e. Family Size.
f. Family life cycle.
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g. Nationality.
h. Religion.
i. Education:-Primary, High School, Secondary, College, Universities.

3) Psychographic Segmentation : - Psychographic Segmentation groups customers according to their

life-style and buying psychology. Many businesses offer products based on the attitudes, beliefs and
emotions of their target market. The desire for status, enhanced appearance and more money are
examples of psychographic variables. They are the factors that influence your customers' purchasing
decision. A seller of luxury items would appeal to an individual's desire for status symbols
Psychographic Segmentation includes variables such as:-
a. Activities.
b. Interests.
c. Opinions.
d. Attitudes.
e. Values.

4) Behaviouralistic Segmentation : - Markets can be segmented on the basis of buyer behaviour as

well. Since all Segmentation is in a way related to buyer behavior, one might be tempted to ask why
buyer behavior-based segmentation should be a separate method. It is because there is some distinction
between buyer’s characteristics that are reflected by their geographic, demographic and psychographic
profiles, and their buying behaviour. Marketers often find practical benefit in using buying behaviour
as a separate segmentation base in addition to bases like geographic, demographics, and
psychographics.
The primary idea in buyer behaviour segmentation is that different customer groups expect
different benefits from the same product and accordingly, they will be different in their motives in
owing it and their behavior in buying it. Variables of buyer behavior are:-
a. Benefit sought: - Quality / economy / service / look etc of the product.
b. Usage rate: - Heavy user / moderate user / light user of a product.
c. User status: - Regular / potential / first time user / irregular /occasional.
d. Brand Loyalty: - Hard core loyal / split loyal / shifting / switches.
e. Readiness to buy.
f. Occasion: - Holidays and occasion stimulate customer to purchase products.
g. Attitude toward offering: - Enthusiastic / positive attitude / negative attitude / indifferent / hostile.

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Ques 2 b) What are the major considerations involved in designing the marketing organization for a
European furniture manufacturer foraying into Indian market?
Ans: A marketing organisation's design is a function of the diversity of products, markets and
product/market combinations that it is involved with and its environment comprising competition,
technology, socio-economic and legal factors, and the marketing objectives. Depending on the
combination of these factors and the relative importance of each of them in achieving the marketing
objectives, we can design an organisation which is suited to specific requirements. Following major
considerations involved in designing the marketing organization for a European furniture manufacturer
foraying into Indian market.

1) Statement of objective and Goals of the Firm

The first consideration in designing the marketing organisation is the firm's marketing
objectives and goals. These objectives may pertain to desired market share, desired sales and/or profit
levels, desired position in the industry and/or market, desired customer image and competitive posture.
Depending upon the stated objectives, a suitable organisation would have to be designed which would
facilitate achievement of the objectives. For instance, a firm which strives to have the largest market
share would need a different type of organisation than one whose objective is to have the highest
quality products.

2) Nature of the product / Line of Activity

The nature of product with which the firm is dealing would be the second consideration in
organising the marketing set-up. To sell soap, toothpaste, textile, tea etc. no special skill or training
pertaining to the nature of the products is required. These are products which are well understood and
comprehended by everyone. The firm dealing in such products need not look for sales people with
specialised knowledge when organising its marketing set-up. On the other hand, products such as air-
conditioners, refrigerators, industrial machines, cooling towers, anti-pollution plants and computers
require that the marketing people have at least a functional knowledge about the equipment before
attempting to market them. You require not only trained. people but also need to organise a supporting
set-up wherein you can train your customers about the proper usage of the equipment and also an after
sales service department to take care of product complaints.
For marketing of Furniture, you need to induct suitably educated and trained salesman: If
finding the right people is difficult, you can provide in-house training to help people acquire the
knowledge and skill necessary for marketing. This kind of in-house training is provided by most
airlines and hotels to their people before they actually go on to the job. Besides training facilities, the
marketing organisation may need a separate cell for customer servicing, customer education and
handling customer complaints.
The type of marketing organisation that you choose would also be influenced by the number of
products that you are marketing. A firm marketing furniture may choose to segregate its range of
exclusive premium priced imported furniture to the medium-priced range and organise two separate
marketing teams as the two ranges are marketed to different sets of retail outlets. But since the basic
products in both the price-ranges are the same, the firm can as well have a common marketing
organisation catering to both categories of retail outlets.
Firms with highly diversified range of products need separate marketing organisations to
effectively market each of them. In deciding whether you need separate marketing organisations or a
common one, you would consider not only the similarities in the nature of product, but also
similarities in the type of customer need and customer served, and similarity in the marketing channel.

3) Areas of Operation
The number of markets that a firm caters to, and the location of these markets is another factor
which influences the decision regarding the type of marketing organisation that a firm should adopt. If
there are many markets which are located at great distance from one another, a firm may have no
choice but to have separate marketing organisations for different geographical markets. The greater the
difference in individual markets in terms of customer tastes and habits, the greater is the need for a

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separate, flexible, autonomous marketing organisation at the local market level. This kind of autonomy
in marketing organisation can be observed in the local operation of multi-national companies which
have subsidiaries in many countries of the world. The corporate headquarter may provide only the
basic operating guidelines and specify the expected results, allowing the remaining operations to be
organised according to the requirements of each market. These requirements may include modifying
the products to suit local climate and. taste, designing relevant promotional strategy, employing local
people and adopting local personal selling techniques.

4) Nature of the Industry

The design and structure of a marketing organisation would vary depending on the nature of
industry to which a firm belongs. The marketing organisation must be so designed that it facilitates
active interaction within the related sub-functions which are critical to the marketing success such as
sales. and marketing research. The more the interface required with other functions in the firm and sub-
functions within the marketing itself, the more the need for a structure which is flexible, loosely
organised and permits easy flow of information.

5) Computerisation and Up-gradation of Information system

The marketing organisation is also affected by the type of information processing and
communication technology used. The advent of computers has led to (a) replacement of humans by
machines for information processing, (b) replacement of supervisory managerial cadres which were
performing the roles of supervising and controlling, but which can now be done more efficiently by
computers and (c) greater decentralisation of decision-making. The result is the progressive removal of
many intermediate levels of managements and the evolution towards a flatter structure.

6) External environment and Government Intervention

The composition and character of the marketing organisation is influenced by the environment
in which it operates. At the level of the firm, the environment is consisting of social, economic,
political, legal and cultural factors. These factors impinge on all operations of the firm, including
marketing. In addition specific rules and regulations governing the product category and its marketing
affect the marketing organisation. Explicit media advertising, (describing the product and its contents)
for alcohol and alcohol based drinks is not permitted in our country, given this restriction, liquor
companies necessarily need strong sales organisation which can develop and retain dealers and
command prominent shelf display at these dealer outlets. Drugs, cement, fertilisers and certain
categories of steel are subject to price control. In such a situation, some firms are able to afford a
marketing organisation, while other which are not so efficient and can barely cover their production
costs cannot afford it.

Thus depending upon the unique combination of `what' you are marketing, `where you are
marketing, and to `whom' you are marketing, you would design the marketing organisation to suit your
needs.
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3 a) Discuss the variables that affect the distribution decisions for the following:
i) DTH services
ii) Fast Food Joint
Ans : (i) DTH Service
1. Distribution Basics
-who are the buyers
-where do they buy
-why do they buy
-where the market areas-geographically
-what conveniences they require

2. Distribution Range
1. Range: which one is suitable.
horizontal, vertical, corporate, administered, contractual.
2. Range: which combination is ideal.
middleman, agent, broker, wholesaler, retailer, distributor, dealer, reseller, franchise holder.
3. Range: What factors would affect the distribution channel.
legal, regulatory, language, customs, government policies, logistics, currency, costs.
4. Range: what kind of coverage is required
intensive, selective, exclusive.
5. Range: what type of system
centralised, decentralised.

3. Distribution Strategy
What distribution strategy is optimal for your business model?
Who are the key channel partners with whom you must build or maintain key relationships?
How do you manage conflict with channel partners?

4. Customer Considerations
- Is it the customer’s knowledge of the products,
- Is the customer's price sensitivity in the product category,
- Is it how the customer make purchase decisions, their logistics and customer service needs,
- Is it the comfort using technology to meet their needs.

Is it the following:
- product knowledge
- price sensibility
- purchase process decision
- service needs
- logistics needs
- technology comforts

5. Channel Considerations.
- Is it the ability to create differential product demand,
- Is it the reseller coverage of targeted markets,
- Is it the reseller customer service capacity,
- Is it the reseller physical distribution systems,
- Is it the overall cost control orientation, and
- Is it the ability to use technology in both demand creation and cost control.

6. Other Factors
- cycle time for filling orders.
- effectiveness of the order fulfillment

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- the risk factor in operation
- facility sizing
- space requirements
- storage systems
- material handling requirement.
- stock levels
- stock out frequency.
- stock handling cost.

(ii) Fast Food Joint

For a fast food joint, the under mention factors affect the distribution decision or need consideration.
1. Location : Location of a fast food joint is prime factor. If there are numerous joint then, there will be
tough competition, otherwise it will earn maximum profit.

2. Customers: The distribution decision for a fast food joint, also to be made while keeping the type of
customers, to be served in our mind. Thus the level of customer or public at large.

3. Income Level: Restaurant’s distribution decision to be taken after considering or conducting a pilot
survey regarding customer’s income level, means how much they are earning and have dispensable
income.

4. Education Level: The Restaurant’s distribution decision also influenced by the people’s education
level, if the locality is highly educated then, management must be very careful to avoid any litigation.

5. Price: The most important factor for decision is price of the article to be sold. We must price them
neither lower nor higher.

6. Management: The management of the Restaurant and its service also plays an important role. Thus
we must decide well in advance that how we will serve the customer.

7. Employee Behaviour: Next is employee behaviour with the customer, if the customers are happy
with the behaviour, the restaurant will earn profit otherwise not.

8. Competition: The last but not least, the last factor is competition; we are likely to face while
marketing or selling our product.

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Ques 3 b) What are the criteria marketers must evaluate before selecting a brand name?
Ans: Brand name is a part of a brand consisting of a word, letter, group of words or letters comprising
a name which is intended to identify the goods or services of a seller or a group of sellers and to
differentiate them from those of competitors. Brand name is a word or a combination of words/letters
that is pronounceable, e.g., Promise toothpaste, Rexona soap, etc.
A good brand name may add value to the good quality and services associated with the brand.
A bad brand name may already have given the consumer/customer an unpleasant impression, which
may even have prevented them from trying the product. Goldlion, a brand for men’s clothes and
accessories, used to experience sluggish sales in Hong Kong, because the pronunciation of the literal
translation of the brand in Cantonese was associated with the meaning ‘willing loss’ or ‘lose always’,
The Chinese translation was later changed to mean ‘gold profit comes’; sales increased substantially
and it has become a prestigious brand.
There are no hard and fast rules for picking a good brand name. When creating a new brand
name or giving a foreign brand an appropriate name, it is advisable to consider the following criteria:

1. Don't describe—distinguish
The biggest mistake companies make is being too descriptive with their names. A name should not
attempt to simply describe; it should have the ability to suggest the essence (the unique characteristics)
of your company. To be effective, a name must have brand potential. A name that is narrow or too
descriptive does not have the depth or dimension to become an effective brand.

2. Distinctiveness
Does it stand out from the crowd, especially from other names in its class? Does it separate well from
ordinary text and speech? The best brand names have the “presence” of a proper noun.

3. Brevity
Is it short enough to be easily recalled and used? Will it resist being reduced to a nickname? Long
multi-word names will be quickly shortened to non-communicating initials.

4. Easy spelling and pronunciation

Will most people be able to spell the name after hearing it spoken? Will they be able to pronounce it
after seeing it written? A name shouldn’t turn into a spelling test or make people feel ignorant.

5. Likability
Will people enjoy using it? Names that are intellectually stimulating, or provide a good “mouth feel,”
have a headstart over those that don’t.

6. Protectability
Can it be trademarked? Is it available for web use? While many names can be trademarked, some
names are more defensible than others, making them safer and more valuable in the long run.

Today, many companies hire a marketing research firm to develop and test names. These
companies use human brainstorming sessions and vast computer databases, cataloged by association,
sounds, and other qualities. Name-research procedures include association tests (What images come to
mind?), learning tests (How easily is the name pronounced?), memory tests (How well is the name
remembered?), and preference tests (Which names are preferred?). Of course, the firm must also
conduct searches to make sure the chosen name has not already been registered.
Brand name can play a number of brand-building roles. If consumers do not examine much
information in making their product decisions, brand name should be easily recognized and recalled
and inherently descriptive and persuasive. Memorable or meaningful brand name can reduce the
burden on marketing communications to build awareness and link brand associations. The different
associations that arise from the likeability and appeal of brand name may also play a critical role in the
equity of a brand.

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Ques 4a) Both primary data and secondary data complement each other in marketing decision making.
Explain.
Ans: In the area of marketing, much of the information required for decision-making exists outside the
firm. The variables involved in the marketing decisions being external to the firm make collection of
information cumbersome and expensive. Since the variables are often qualitative and dynamic in
nature their measurement is also difficult, and the results not always accurate. The pressure on the
marketing manager is very strong to correctly choose the most critical decision variables and seek
relevant information about them. The, wrong choice of (information) variables will not only result in
unnecessary expenditure but can also lead the decision-making process astray. The correct
identification of variables requires at least a basic understanding of why people behave in the manner
in which they do. The manager also needs to monitor what is happening in the market place and in the
general environment of the firm. The only way the manager can monitor all these is through regular
market research. For market research, data source is secondary data, primary data, or both.

Primary Data
The primary data are those which are collected afresh and for the first time, and thus happen to be
original in character. Such data are published by authorities who themselves are responsible for their
collection.

Primary sources are original materials on which other research is based

They are usually the first formal appearance of results in the print or electronic literature (for
example, the first publication of the results of scientific investigations is a primary source.)

They present information in its original form, neither interpreted nor condensed nor evaluated
by other writers.

They are from the time period (for example, something written close to when what it is
recording happened is likely to be a primary source.)

Primary sources present original thinking, report on discoveries, or share new information.
Some common types of primary data are:

Demographic and Socioeconomic Characteristics

Psychological and lifestyle characteristics

Attitudes and Opinions

Awareness and Knowledge - for example, brand awareness

Intentions - for example, purchase intentions. While useful, intentions are not a reliable
indication of actual future behavior.

Motivation - a person's motives are more stable than his/her behavior, so motive is a better
predictor of future behavior than is past behavior.
Primary data can be obtained by communication or by observation. Communication involves
questioning respondents either verbally or in writing. This method is versatile, since one needs
only to ask for the information; however, the response may not be accurate. Communication
usually is quicker and cheaper than observation. Observation involves the recording of actions and
is performed by either a person or some mechanical or electronic device. Observation is less
versatile than communication since some attributes of a person may not be readily observable,
such as attitudes, awareness, knowledge, intentions, and motivation. Observation also might take
longer since observers may have to wait for appropriate events to occur, though observation using
scanner data might be quicker and more cost effective. Observation typically is more accurate than
communication. Personal interviews have an interviewer bias that mail-in questionnaires do not
have. For example, in a personal interview the respondent's perception of the interviewer may
affect the responses.
Primary data is original information, current data, reliable, clearly defined but it is time consuming,
expensive process, difficult to procure and sometimes due to time / cost factors, the amount of
data gathering is restricted.
MS-06: Marketing for Managers 17 of 21
Secondary Data
Before going through the time and expense of collecting primary data, one should check for secondary
data that previously may have been collected for other purposes but that can be used in the immediate
study. Secondary data may be internal to the firm, such as sales invoices and warranty cards, or may
be external to the firm such as published data or commercially available data. The government census
is a valuable source of secondary data.
Secondary data has the advantage of saving time and reducing data gathering costs. The
disadvantages are that the data may not fit the problem perfectly and that the accuracy may be more
difficult to verify for secondary data than for primary data. Some secondary data is republished by
organizations other than the original source. Because errors can occur and important explanations may
be missing in republished data, one should obtain secondary data directly from its source. One also
should consider who the source is and whether the results may be biased.

There are several criteria that one should use to evaluate secondary data.

Whether the data is useful in the research study.

How current the data is and whether it applies to time period of interest.

Errors and accuracy - whether the data is dependable and can be verified.

Presence of bias in the data.

Specifications and methodologies used, including data collection method, response rate, quality
and analysis of the data, sample size and sampling technique, and questionnaire design.

Objective of the original data collection.

Nature of the data, including definition of variables, units of measure, categories used, and
relationships examined.

Researchers usually start their investigation by examining some of the rich variety of secondary
data to see whether the problem can be partly or wholly solved without collecting costly primary data.
Secondary data provide a starting point and offer the advantages of low cost and ready availability.
When the needed data do not exist or are dated, inaccurate, incomplete, or unreliable, the researcher
will have to collect primary data. Most marketing research projects involve some primary-data
collection.

Primary and Secondary data are complement data are complement to each other because secondary
data is generated only by means of primary data. When a marketing decision can be made with
secondary data then there is no need to collect primary data where as if it is not sufficient then primary
data is collected. In this situation both type of data will be helpful in decision making. With the help of
information provided by primary and secondary data the manager can reduce the number of alternate
choices to one, two or three and the possible outcome of each choice is also known. Thus the decision-
making process becomes a little easier. It helps to reduce the risk associated with the process of
decision-making. It helps firms in discovering opportunities which can be profitably exploited.
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 Ques 4 b) Distinguish cyber marketing with conventional marketing. What are the reasons for its
rapid growth in the Indian context? Enumerate its limitations.
Ans: Cyber marketing or Internet Marketing is the process of attracting potential customers by
advertising products or services via internet such as websites, e-mails, search engines and web
banners. Cyber marketing is the force that is impossible to ignore in the 21st century because it is a
mean to reach millions of people across the globe. It is the fusion of Information Technology (IT) with
marketing techniques to find and interact with customers in order to enhance and flourish the business.
Cyber marketing is at the forefront of reshaping the way businesses interacts with its customers.
Difference between conventional marketing and cyber marketing is following
1. Internet Marketing is a Constant Source
When you hear or see a television or radio ad it is there one minute and then it is gone. If you
catch an ad in passing and you missed some information you cannot go back and review it. Print is a
little better for this but newspapers and magazines do get thrown out after a week or month. Internet
marketing provides you a permanent address online that people can visit anytime they want. Even if
someone does not know about your company they can do searches based on what you offer and find
you in the search engines.

2. Internet Marketing Provides Better Word-of-Mouth

Word-of-mouth is still the most effective marketing for producing conversions. Social Media is
an aspect of Internet marketing that allows people to build a community and let others spread positive
feedback about your product or service. When you develop evangelists for your company, with Social
Media Marketing, your message will be spread quickly because more people are speaking for you.
People will normally trust word-of-mouth much more than traditional ads that tries to convince you
about the benefits of a product or service.

3. Internet Marketing Can Increase Conversions More

No matter what your goal, Internet marketing can increase your conversions month after
month. The reason Internet marketing is more effective at delivering conversions is that you can study
every detail of what is working and what might not be working. It takes the guessing game out of it.
You can continue to place more emphasis on the tactics that are working and eliminate anything that is
not effective. Internet marketing also provides an environment where you can safely test new ideas so
that you are always pushing to improve your campaign's performance. Traditional marketing develops
a campaign and then hopes that it will work. This makes it difficult for traditional agencies to test new
ideas or even look into all of the details to determine the effectiveness of a campaign.

4. Internet Marketing Is Better at Reaching Your Target Audience

Traditional marketing is known for its reach to a mass audience. There are ways that
traditional marketing can target certain demographics depending on a television channel or show,
radio station genre or industry magazine. However, traditional marketing will never be able to target as
precisely as Internet marketing. With Internet marketing you can target even the smallest audience
based on a variety of things. Internet marketing also does a great job of targeting your advertising
spend so that you know all of your money is being spent in the most effective way.

5. Global Presence
With the help of cyber marketing any business has global presence through internet. Cost constraints
in conventional marketing media limits global presence only to MNCs (Multi National Corporations).
On the other hand, Cyber marketing allows smaller businesses with fewer budgets to access
prospective customers across the globe.

6. Targeted Market
Marketing is most value added and effective when its message is conveyed directly to the potential
audience that is most likely to be interested. Internet users are organized into more focused groupings
like Yahoo groups, Face book users and Gmail Community. The edge of cyber marketing over

MS-06: Marketing for Managers 19 of 21

conventional marketing is that it is targeted with respect to customer’s age, gender, location, interests.
Data of the internet users is available easily; therefore it is easier to target a particular chunk of users
on internet through cyber marketing than any other way. For example, online gift store can target the
particular market by getting information about the birth day of the customers.

7. Affordability matters, after all

Internet Marketing has the potential to overthrow television and publications and at some time! Brand
Management and Lead Generation is the main motive behind any kind of marketing and since online
marketing serves the purpose in the best possible way, it can be said to have gained its position during
recession. When everyone had been spending huge amounts in the traditional methods of advertising,
is now looking into cost cutting and thus switching to Cyber-marketing.

8. Variety can add spice to Advertising

When marketing online, you can always make choices for the mode of advertising. Be it the audio,
video, blogs, emails, social media or ongoing newsletters, you can any day enjoy the opportunity to
advertise through any or all the mediums using your creativity skill. But when you go the other way
round, it is much tougher because you need to approach several media outlets to cover your bases.

Limitations of Cyber Marketing

Cyber marketing, despite its tremendous advantages, has yet to overcome many of the associated
problems. Some of these problems are in-built with the technology of internet and some others are
contextual for the environment in which cyber marketing is applied.

1. Limits to digitisation: The key advantage of internet is achieved by converting marketing contents
into digitised form. Therefore, the remainder part which is not digitisable virtually lies outside the
domain of cyber marketing. This part remains in the "brick and mortar" domain of marketing as
contrasted to the "click and view" part of marketing.

2. Shopping experience: Customers are quite used to the "touch and feel" experience of shopping.
Internet based shopping is, therefore, finding some consumer resistance. Advantages of cyber
shopping and the practice over time are expected to overcome this resistance. In the transition period,
marketers are trying to integrate the traditional "touch and feel" and "click and view" modes of
marketing.

3. Security issues: While shopping on internet, customers often have to share sensitive information
related to their person as well as their financial matters. While the marketers are trying to make these
sharing of information and details much more secure against the possible misuse the customers are not
fully convinced about these security arrangements.

4. Internet access density: Although more than 600 million people were reported to be online they
still account for only less than 1 per cent of the total population of the world. This population of online
is not only very low, it is also very asymmetrically distributed. As a result, only certain skewed
segments of the market can be tapped through cyber marketing today.

5. Customers used to freebies: The development of cyber marketing is characterised by intensive

promotions of substantial values. As a result, cyber customers have started expecting freebies before
responding to cyber marketers cues of any kind. However, as the freebies offers are gradually
diminishing now this problem is getting reduced on its own over time.

6. Dot.com bust: The sudden emergence of internet power and its cyber marketing possibilities gave
rise to great hypes about their commercial opportunities. Many half baked business models were
deployed to capitalise on this wave. In fact, the market got cluttered with innumerous so called
MS-06: Marketing for Managers 20 of 21
"dot.com" companies. When the bottom of most of these dot.com companies was removed the
pendulum of market interests swung to the other extreme. Many marketers and customers have
become shy of using any of the cyber marketing tools. The time has come to rectify this disbalance
and evolve the business models which incorporate internet power more realistically.

Reasons for rapid growth of cyber marketing in the India :

- Rapidly increasing Internet user base
- Technology advancements such as VOIP (Voice-over-IP) have bridged the gap between buyers and
sellers online
- The emergence of blogs as an avenue for information dissemination and two-way communication for
online retailers and eCommerce vendors
- Improved fraud prevention technologies that offer a safe and secure business environment and help
prevent credit card frauds, identity thefts and phishing
- Bigger web presence of SME’s and Corporates because of lower marketing and infrastructure costs.
- Longer reach - Consumers in the Tier II & Tier III cities are fast realizing the potential of the Internet
as a transacting medium
- The young population find online transactions much easier
- Easy reach to a fast growing online community
- Unlimited shelf place for products and services
- Fuse the global geographical and time zone boundaries
- Helps reach national and global markets at low operating costs

Cyber marketing provides more features and flexibility than the convention marketing because
it’s around the clock service, more interactive, fast & swift response, global access and above all
targeted to prospective customers. Cyber marketing has created a perfect environment to target
potential customers and groups.

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