Solutions to Assignments
MCO-06 - MARKETING MANAGEMENT
Master of Commerce (Mcom) 2nd Year
Question No. 3.
Write short notes on the following:
(a) Buying Behaviour Situations
Definition of Buying Behavior:
Buying Behavior is the decision processes and acts of people involved in buying and using products.
Need to understand:
- why consumers make the purchases that they make?
- what factors influence consumer purchases?
- the changing factors in our society.
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for:
- Buyers reactions to a firms marketing strategy has a great impact on the firms success.
- The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.
- Marketers can better predict how consumers will respond to marketing strategies.
Stages of the Consumer Buying Process
Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity...discussed next.The 6 stages are:
- Problem Recognition(awareness of need)--difference between the desired state and the actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product information--did not know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. - Information search--
- Internal search, memory.
- External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc.
Hungry, want to go out and eat, evoked set is
- chinese food
- indian food
- burger king
- klondike kates etc
- Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, indian gets highest rank etc.
If not satisfied with your choice then return to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by "framing" alternatives. - Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc.
- Purchase--May differ from decision, time lapse between 4 & 5, product availability.
- Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc.
After eating an indian meal, may think that really you wanted a chinese meal instead.
(b) Mass Marketing
Mass marketing is a market strategy whose aim is to appeal to the largest portion of the market while ignoring niche demographic differences, in order to reach the highest number of potential customers possible. This marketing strategy focuses on high sales volumes at lower price points, traditionally using radio, television and print media to gain maximum exposure for the product. This large market coverage strategy is the opposite of niche marketing and seeks to appeal to all customers regardless of niche or segmentation by offering products that are useful to a wide variety of consumers with different needs.
Mass marketing is most effective when used to advertise products that are considered necessities, products that a large number of people are already guaranteed to be shopping for anyway. By building brand awareness through memorable advertisements, mass marketing aims to alter the behavior of consumers so they will be directed towards the product being marketed. By producing goods that are needed by a large market and offering them at competitive prices, a mass marketing strategy increases the potential for high volume sales while reducing the costs of manufacturing through mass production.
Products that are mass marketed often practice planned obsolescence in order to reduce the cost of production and ensure that consumers will have to come back and buy the product again. By manufacturing products with low quality materials, companies can ensure consumers will need to replace their items, creating opportunity for future sales. A large number of these products are considered staples—items that customers regularly purchase after they wear out or are used up. Staples can be promoted as being cheaper, even they are a less durable product, because they are sold at a low enough cost to make recurring purchases affordable.
Mass Marketing Techniques
A number of techniques are used by mass marketers to appeal to the largest audience possible. The shotgun approach, which attempts to reach the audience with advertising on traditional mass media such as television, radio, and the internet, has been widely used and is likely the most familiar technique Advertisements utilizing the shotgun approach present a non-exclusive message that appeals to a broad range of customers.
Guerrilla marketing is another commonly used tactic in mass market strategies. This strategy aims to produce advertisements that capture the attention of a large market with exciting and memorable messages while engaging consumers in a positive way. By utilizing online distribution methods, this strategy tends to minimize the cost of advertising while offering companies the ability to interact with a large base of viewers. In theory, guerrilla marketing allows a company to leave a stronger impression with consumers by cutting through the noise of a saturated market.
Disadvantages of Mass Marketing
Although mass marketing is widely used, a number of disadvantages that can make this strategy less effective than market segmentation should be considered. An increasing number of consumers are dissatisfied with the “one size fits all” approach and seek out more specialized products than those offered under the mass marketing umbrella. The rise of online reviews has muted the swaying power of advertisements, taking the effectiveness of directing messages about their products away from companies and placing it in the hands of consumers. The effectiveness of mass marketing to attract customers has decreased as companies’ marketing strategies attempt to replicate traditional advertising efforts in the new world of online marketing.
Culture and location’s impact on how advertising messages are received by customers is another disadvantage of mass marketing. A mass marketing campaign may be successful in one region while failing to make an impression on consumers in another. The geographic location and culture of a consumer base have an impact on how those consumers respond to a message, and consumers in different regions will often require different services and products related to their locations. By targeting advertising in regions that may not have a need or interest in a type of product or service, companies can end up wasting money on marketing efforts that don’t attract new sales or customers.
Because of the high cost of mass market efforts, this strategy often yields a lower return on investment than other strategies, in spite of its potential to generate high volumes of sales. Production costs for advertising spots, as well as the cost of placing those ads on the radio, internet, and television mean that this strategy often requires a large marketing budget. While mass marketing can be successful for general products and is typically considered low risk, the potential of a company’s message not resonating with consumers could lead to money wasted on failed advertising.
Customer Experience
As the internet has risen to prominence over recent decades, it has become apparent that a better user experience for customers is more and more important, and mass marketing strategies have failed to maintain the effectiveness they had in the past. Consumers find online reviews on sites like Amazon and Yelp to be more trustworthy than commercials and advertising, meaning companies can no longer take the same liberties regarding quality in their products. Word of mouth has become a powerful tool for marketers, and the first step in generating that kind of buzz is to produce goods that can back it up.
Audience segmentation is the process of determining which consumer traits characterize a certain group, or segment of a given market. In mass marketing, marketers ignore audience segmentation in favor of reaching all consumers in a large market and appealing to them with a product that most people need or use. However, by not targeting a specific niche, mass marketing can lead to dilution of branding efforts by causing consumers to become bored in an oversaturated environment.
By understanding a narrow niche of consumers, businesses can better serve that segment of the market and create stronger relationships with their customers. By establishing itself as a provider of quality products or services and catering to a specific segment with a marketing strategy that resonates with customers on a deeper level, a company can generate positive word of mouth and spread its message effectively and efficiently.
(c) Internet marketing
What Is Internet Marketing?
Internet marketing refers to the strategies used to market products and services online and through other digital means. These can include a variety of online platforms, tools, and content delivery systems, such as:
Website content and design
Email marketing
Social media
Blogging
Video/podcasting
Online ads
Sponsorships and paid promotions
While internet marketing's apparent purpose is to sell goods and services, or advertising over the internet, it's not the only reason a business will do it.
A company may be marketing online to communicate a message about itself (building its brand) or to conduct research. Online marketing can also be an effective way to identify a target market, discover a marketing segment's wants and needs, build long-term relationships with customers, or establish authority and expertise within an industry.
Alternate names: E-marketing, web marketing, digital marketing
How Internet Marketing Works
Internet marketing uses customers' online activity to connect them with a business by reaching them in a variety of places on the internet. The types of internet marketing a business uses will depend on the business model, types of products, target customers, budget, and more.
Website Content and Design
A business website allows customers to:
Find your business online
Learn your business's location or contact information
Discover your products or services
Sign up for your email list
Request more information
Make purchases
Websites often use search engine optimization (SEO) to ensure that their content will rank high on search engines and be easy for customers to find.
Email Marketing
You can use email for sending direct mail electronically, rather than through the post office. Collect customer emails either through purchases or website sign-ups, then use emails to share important information, encourage purchases, and build relationships.
Email allows you to reach customers individually and personally. A 2019 retail study looking at more than one billion shopping sessions found that email marketing had a conversion rate of 2.5%, compared to only 1.1% for social media. (The highest conversation rate was direct referral, at 3.0%)
Social Media
Most consumers use some kind of social media, though the type you will focus on will depend on the behavior of your target market.
More than 90% of 18 to 29-year-olds use social media of some kind, and while use decreases with age, it can still be used to reach consumers in all age brackets. More than 60% of those over age 65 use some kind of social media, and those numbers are likely to keep growing.
Older consumers are more likely to use a platform like Facebook, for example; millennials often use Instagram; and younger consumers are more interested in video platforms, such as TikTok or YouTube.
Find out where your ideal customers spend their time and focus your efforts there.
Blogging
Blogging allows you to increase your website's SEO by adding articles and posts around certain targeted keywords. This increases the likelihood that customers will find and visit your website as a result of online search.
You can also write for other people's blogs, magazines, or websites. This can increase your audience and put your business in front of more potential customers.
Video and Podcasting
Some creators who make videos or podcasts use that as their sole business. Other times, businesses use these platforms to establish expertise, connect with others in the industry, and create a funnel for new customers to find and develop an interest in their products or services.
Podcasts especially are growing in popularity. More than 100 million Americans listen to podcasts every month.
Online Ads
Online ads can take a variety of forms.
Pay-per-click advertisements placed in search engines target particular search terms that potential customers might use. Targeted ads on social media designed to reach specific segments of the platform's users who might be interested in your business's products, services, and promotions.
You can also place sidebar ads on other people's websites or in their email marketing. Online ads are most effective when they are "congruent," or relevant to where they appear or what the target audience is searching for.
Personalization can also increase the response rate to online ads, especially at the early stages of consumers' decision-making process. However, personalization is most effective when ads appear in congruent locations.
Sponsorships and Paid Promotions
You can take advantage of an audience that someone else has built with sponsorship or paid promotions. These marketing campaigns allow you to pay someone whose audience matches your target market to discuss, use, promote, or share your products and services with their followers.
This can both increase brand awareness and drive sales, especially if you pair the campaign with a targeted promo code or special offer.
Do I Need Internet Marketing for My Business?
Internet marketing is increasingly becoming mandatory for businesses of all types. Customers spend lots of time online every day, including checking email, browsing social media, using search engines, and visiting websites.
Consumers use a variety of online methods for finding, researching, and eventually making purchasing decisions. Over 40% of consumers report that they first turn to Google search when looking for a product or service, and 26% of consumers say they shop online every week.
However, traffic from social media pages and ads account for around 8% of consumers discovering retail websites.1 You can take advantage of all these channels by creating broad internet marketing platforms to help potential clients and customers find your business.
This is true even if your business is small and local. From 2015 to 2017, Google saw mobile "near me" searches with some variation of "to buy" or "can I buy" grow by 500%—a figure likely to continue rising.
No matter what type of business you have or where you are located, investing in internet marketing can help you build your business, connect with customers, and make sales.
(d) Functional Middlemen
A middleman plays the role of an intermediary in a distribution or transaction chain who facilitates interaction between the involved parties. Middlemen specialize in performing crucial activities involved in the purchase and sale of goods in their flow from producers to the ultimate buyers. They typically do not produce anything but possess extensive knowledge of the market, thereby charging a commission or a fee for their services.
For example, a real estate agent with an established network of colleagues for contacting potential home buyers, in addition to a broad range of market information and advertising outlets. Wholesalers include the middlemen between manufacturers, producers, and retailers. The retailers themselves are the middlemen between wholesalers and the end customers.
Functions of Middlemen
Middlemen perform the following functions in a marketplace:
- They provide valuable information and feedback to producers about consumer behavior, changing tastes and fashions, upcoming rival businesses, etc.
- They enable manufacturers to concentrate on the primary function of production by handling the ancillary functions of warehousing, distribution, advertising, insurance, etc. They promote the goods to the consumers on behalf of the producers.
- Middlemen like banks and other financial institutions render financial services to manufacturers.
- They make the goods and services available to consumers at the right place, at the right time, and in the right quantity.
- Buyers and sellers are often unwilling to assume the market risk for fear of a possible loss. It is the middlemen in the process chain who assume the risks of theft, perishability, and other potential hazards.
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