IGNOU ASSIGNMENT SOLUTIONS - MCO-06 - MARKETING MANAGEMENT - MCOM - SEMESTER 2

                        IGNOU ASSIGNMENT SOLUTIONS

        MASTER OF COMMERCE (MCOM - SEMESTER 2)

               MCO-06 - MARKETING MANAGEMENT 

                         MCO-06/TMA/2022-2023

Please Note: 
These assignments are valid for two admission cycles (July 2022 and January 2023). The validity is given below: 
1. Those who are enrolled in July 2022, it is valid upto January 2023. (Term End Examinations in December 2022)
2. Those who are enrolled in January 2023, it is valid upto December 2023. (Term End Examinations in June 2023)

Question No. 1
What do you mean by Buyer Behavior? Discuss various social and Cultural factors which influence the buyer behavior?                                                         (20 Marks)

Solution: 

Buyer Behaviour simply means the decision and acts pursued by any buyer while purchasing any product or service. Another term for buyer behavior that is majorly used in the market of digital monetization is “consumer buying behavior,”.

It is the highlighted driving force behind any marketing campaign. But how it can benefit you or your business or why should you even care what is buyer behavior? The following reasons will make the significance of buyer behavior supremely certain:

• Buyer Behaviour helps you understand the dynamics behind any purchase done by the consumer regarding a wide range of products.
• It reveals substantial reasons behind the loyalty of consumers, for a specific brand or product.
• Also, it helps you in analyzing & predicting the demand of any service or product prior to its launch.
• Moreover, is the wizard’s wand when it comes to generating influential marketing campaigns.
• In addition to that, it makes your product or services more engaging & relatable to the target audience.

Social Factors affecting the Buyers Behaviour: 

The social factors affecting consumer behaviour includes the following components: -

a) Reference Groups

• We are social beings, and we always want to be around a group of people. There a few groups of people who are always around us, and they have a direct or indirect influence on our behaviour and attitudes. These are called the Reference Groups.

• Don't most of us used to want the bicycle that our friends used to have in our childhood? A few groups like family, friends, colleagues; with whom we interact regularly are called the Primary Groups. 

• On the other hand, we have few groups with whom we interact less and conversations are required to be formal; these groups are called the Secondary Groups. But how do these groups influence our behaviour as a consumer?

• The below mentioned three points will answer this better:

• Let's say, most of the times you get to know about the latest cool gadgets from your friends and colleagues only; this means that they expose us to new behaviours and lifestyle. 

• Now, you also need to have the same product. Hence, they influence our behaviour and self-image. 

• You want to buy that cool gadget from a few specific brands only; they create a pressure of conformity. 

• Apart from this, there are also certain groups to which you want to belong to but you are not currently a part of it. Suppose you cannot afford expensive designer clothes today but someday you want then that group which buys premium designer clothes is an Aspirational Group for you. Whereas, the groups whose values and attitudes we reject are called the dissociative groups. 

• Now, marketers reach and influence these groups through an Opinion leader; he is a person who informs and gives information about various products and brands to his group members. They have a good influence on their group members.

b) Cliques

• According to some communication researchers, our society comprises small groups, known as cliques, and their members interact with each other frequents. This scenario can be compared to the different clubs and committees in B-schools, where all the students from different clubs and committees (cliques) interact with each other.
• Now, as a promoter of any event of your B-school, you would want cliques to talk more about your event with each other. For that, you will find people who have networks in most of the cliques. These people are known as bridges.
• Many companies do pay money to influencers to promote their product in different cliques anonymously. This tactic is known as shill marketing or stealth marketing.
• You must have also heard that many of the reviews on digital platforms are being given by the people who are in some financial contract with the company. Another interesting example could be of some comedy shows where there are anonymous people who laugh while sitting in the audience.

c) Family

• This is the most important determinant in influencing the buying and deciding characteristics of consumers. We acquire a lot of values, attitudes, beliefs and perspectives from our family.
• In most of the Indian families, the women are considered to be the main purchasing member; hence they influence the buying decision the most. The marketers of specific products very cleverly target these women to promote their product.

d) Roles and Status

• All of us play multiple roles in lives, the roles that we play influences our behaviour and choices. The role that we play decides our "status". This also influences the kind of products and services that we use. Most of the times, we like those brands and products which relates to our identity that emerges from the kind of roles we play.
• You must have observed that people who are fit and muscular generally prefer to buy Royal Enfield among other bikes. This is nothing but a buying behaviour arising out of social factors.

Cultural Factors affecting the buyers behaviour: 

Culture includes race and religion, tradition, caste, moral values, etc. Culture also

include sub-cultures such sub-caste, religious Sects, language, etc.

a) Culture: 

• It influences consumer behaviour to a great extent. 
• Cultural values and elements are passed from one generation to another through family, educational institutions, religious bodies, social environment, etc. Cultural diversity influences food habits, clothing, customs and traditions, etc. 
• For instance, consuming alcohol and meat in certain religious communities is not restricted, but in certain communities, consumption of alcohol and meat is prohibited.

b) Sub-Culture: 

• Each culture consists of smaller sub-cultures that provide specific identity to its members. 
• Subcultures include sub-caste, religious sects geographic regions as South Indians, North Indians, and based on languages etc. 
• The behaviour of people belong to various sub-cultures is different. Therefore, marketers may adopt multicultural marketing approach, i.e., designing and marketing goods and services that cater to the tastes and preferences of consumers belonging to different sub-cultures.

 Conclusion 

Each and every person has his or her own behavior towards the purchasing process , however all of them are influenced by certain factors. Those influences may be environmental, social, personal, or psychological influences. But the cultural values are shared among the people in the society and affect them gradually over time. Besides the society has different impacts on one’s behavior depending on different groups to which it belongs. Each individual has their own effects varying from age or sex or the process of perceiving, motivating and memorizing. Those factors affect the consumer buying behavior so they should be considered. The consumers themselves are the decision makers and so are the most important factors in the consumer market. When a firm wants to enter in to a foreign market then the local customer behavior is probably different from customer behavior that they are dealing with the home country. Therefore it is important for the marketing manager to take all these factors into consideration, and helping them to develop marketing campaign in the international market and to improve the product to fully satisfy the customer which ultimately increase sales and develops in global level.

Question No. 2
What are the objectives of Pricing? Discuss the basic methods of Price Determination.                                                                                         (20 Marks) 

Solution: 

Pricing is a process of fixing the value that a manufacturer will receive in the exchange of services and goods. Pricing method is exercised to adjust the cost of the producer’s offerings suitable to both the manufacturer and the customer. The pricing depends on the company’s average prices, and the buyer’s perceived value of an item, as compared to the perceived value of competitors product.

Pricing objectives

Firms rely on price to cover the cost of production, to pay expenses, and to provide the profit incentive necessary to continue to operate the business. We might think of these factors as helping organizations to: (a) survive, (b) earn a profit, (c) generate sales, (d) secure an adequate share of the market, and (e) gain an appropriate image

a) Survival: It is apparent that most managers wish to pursue strategies that enable their organizations to continue in operation for the long term. So survival is one major objective pursued by most executives. For a commercial firm, the price paid by the buyer generates the firm’s revenue. If revenue falls below cost for a long period of time, the firm cannot survive.

b) Profit: Survival is closely linked to profitability. Making a USD 500,000 profit during the next year might be a pricing objective for a firm. Anything less will ensure failure. All business enterprises must earn a longterm profit. For many businesses, long-term profitability also allows the business to satisfy their most important constituents–stockholders. Lower-than-expected or no profits will drive down stock prices and may prove disastrous for the company.

c) Sales: Just as survival requires a long-term profit for a business enterprise, profit requires sales. As you will recall from earlier in the text, the task of marketing management relates to managing demand. Demand must be managed in order to regulate exchanges or sales. Thus marketing management’s aim is to alter sales patterns in some desirable way.

d) Market share: If the sales of Safeway Supermarkets in the Dallas-Fort Worth metropolitan area of Texas, USA, account for 30 per cent of all food sales in that area, we say that Safeway has a 30 per cent market share. Management of all firms, large and small, are concerned with maintaining an adequate share of the market so that their sales volume will enable the firm to survive and prosper. Again, pricing strategy is one of the tools that is significant in creating and sustaining market share. Prices must be set to attract the appropriate market segment in significant numbers.

e) Image: Price policies play an important role in affecting a firm’s position of respect and esteem in its community. Price is a highly visible communicator. It must convey the message to the community that the firm offers good value, that it is fair in its dealings with the public, that it is a reliable place to patronize, and that it stands behind its products and services.

Pricing Methods:

Pricing method is a technique that a company apply to evaluate the cost of their products. This process is the most challenging challenge encountered by a company, as the price should match the current market structure and also compliment the expenses of a company and gain profits. Also, it has to take the competitor’s product pricing into consideration so, choosing the correct pricing method is essential.

The pricing method is divided into two parts:

• Cost Oriented Pricing Method– It is the base for evaluating the price of the finished goods, and most of the company apply this method to calculate the cost of the product. This method is divided further into the following ways.
  • Cost-Plus Pricing- In this pricing, the manufacturer calculates the cost of production sustained and includes a fixed percentage (also known as mark up) to obtain the selling price. The mark up of profit is evaluated on the total cost (fixed and variable cost).
  • Markup Pricing- Here, the fixed number or a percentage of the total cost of a product is added to the product’s end price to get the selling price of a product.
  • Target-Returning Pricing- The company or a firm fix the cost of the product to achieve the Rate of Return on Investment.
• Market-Oriented Pricing Method- Under this category, the is determined on the base of market research
  • Perceived-Value Pricing- In this method, the producer establish the cost taking into consideration the customer’s approach towards the goods and services, including other elements such as product quality, advertisement, promotion, distribution, etc. that impacts the customer’s point of view.
  • Value pricing- Here, the company produces a product that is high in quality but low in price.
  • Going-Rate Pricing- In this method, the company reviews the competitor’s rate as a foundation in deciding the rate of their product. Usually, the cost of the product will be more or less the same as the competitors.
  • Auction Type Pricing- With more usage of internet, this contemporary pricing method is blooming day by day. Many online platforms like OLX, Quickr, eBay, etc. use online sites to buy and sell the product to the customer.
  • Differential Pricing- This method is applied when the pricing has to be different for different groups or customers. Here, the pricing might differ according to the region, area, product, time etc.

Question No. 3
Write short notes on the following: 
(a) Positioning 
(b) Warehousing 
(c) Personal Selling 
(d) Relationship Marketing.                                                                   (4×5 Marks)

Solution: 

(a) Positioning

Positioning refers to the place you want your brand or product to have within a particular target market. More specifically, the process of market positioning and brand positioning involves how you market your brand or product to consumers to achieve that position.

The aim of positioning in marketing is to establish or sway how consumers perceive you to gain a competitive advantage. A great positioning strategy elevates marketing efforts to help consumers move from knowing about a brand to deciding to purchase a product. And as positioning can sometimes be subtle, it’s usually easier to detect when viewing from the same angle as a consumer.

For example, look at Burger King’s brilliant advertisement “Why eat with the clown when you can dine with a king?”. Not only does it suggest that Burger King has a higher class of dining experience than McDonald’s, but it’s also an excellent example of how positioning in marketing operates.

Positioning requires ongoing marketing initiatives for the brand, which must also be maintained over the life of each product. Doing this when running a business also reinforces the target market’s perceptions of both the brand and the product.

Remember that every brand and product has a place somewhere within the market, whether you cultivate your position or not. Once you understand what is positioning in marketing, you can start taking control of your brand’s reputation and product image.

While there are a wide variety of options to consider, positioning strategies are typically broken down into three specific categories. These three types of positioning strategies are known as comparative, differentiation, and segmentation.

1. Comparative

This positioning strategy works by comparing multiple products or brands to create a competitive edge and highlight their individual value.

2. Differentiation

By focusing on any unique features which ideally can’t be duplicated, a differentiation positioning strategy ensures a brand’s products will stand out from the competition.

3. Segmentation

In situations where there are multiple target audiences, a segmentation positioning strategy focuses on the different specific needs of each group.

(b) Warehousing

Warehouse operations are the daily activities that prepare inventory for shipping, inventory tracking, and order fulfillment. Here are four crucial operational components of warehousing:

• Pick and Pack: A process of selecting one or more products that was ordered by a customer, checking it, and packaging it for shipping.
• Inventory Management: The inventory definition is tracking, measuring, updating, and retrieving products in a storage facility, including minimum and maximum quantities, stock-outs, and service level agreements.
• Order Fulfillment: The process of getting an order ready for shipment to a customer, and making sure it is shipped out as soon as possible.
• Warehouse Management System (WMS): A software program designed to oversee warehouse operations, inventory storage, demand forecasting, and daily efficiency.

Warehouse management is the process of managing inventory in a warehouse, including tracking quantities, monitoring expiration dates, and organizing products based on customer demand. It also includes managing the process of receiving and storing inventory, and finalizing orders for shipments.

Many retailers and eCommerce businesses choose to outsource their warehouse logistics, which is a smart choice since warehousing is less about transportation and distribution and more about inventory storage. Warehouse management software is an essential component of warehouse operations and warehouse services. It allows you to track stock and create alerts for low inventory levels.

Inventory management can also be done using radio frequency identification (RFID) tags and scanners, which lets you track items in real-time and quickly scan items once they get to the warehouse space.

(c) Personal Selling 

Personal selling should be part of a wider sales mix, alongside telesales, email marketing, sales promotion, advertising, and public relations. But personal selling must not be overlooked: it remains an extremely important part of a salesperson’s arsenal and is a skill every good salesperson must master.

Personal selling is a personalised sales method that employs person-to-person interaction between a sales representative and prospective customers to influence the customer’s purchase decision.

Precisely, it’s a promotional technique where a salesperson:

Uses person to person communication: Personal selling involves direct contact of the salesperson and the customer.

To sell an offering: The purpose of personal selling is to motivate and persuade the customer to purchase the intended offering a detailed explanation or demonstration of the product. 

Using a personalised sales strategy: This strategy involves the salesperson to understand the needs and wants of the customers, develop personalised connections, communicate the value of the offering in a way that persuades the customer to buy the offering.

Today, personal selling is considered a business-to-business selling technique but is also used in trade and retail sales.

With the advent of the internet and other communications methods, personal sales isn’t limited to just face-to-face meetings. Salespersons now use video calls, phone calls, IM, and even emails, along with in-person interactions to develop a relationship with prospective customers.

Personal selling differentiates itself from other sales and promotional techniques by possessing the following characteristics:

• Human contact: It involves person-to-person interaction where a seller interacts directly with the prospective customer and executes a personalised sales strategy according to the customer’s needs, wants, and expectations.
• Development of relationship: Personal selling involves developing a relationship between the seller and the buyer where trust is established, and the prospective buyer can rely on the salesperson. Moreover, this technique even results in the salesperson becoming a part of the buying process.
• Two-way flow of information: Unlike mass marketing, personal selling is characterised by a two-way flow of information. The prospective buyers get their chance to ask questions and clear their doubts directly from the seller before purchasing.
• Quick communication: Since personal selling involves person-to-person interaction, the communication flow is really quick.
• Flexibility: It involves the salesperson to tailor the sales pitch according to the prospective audience’s persona and requirements, making this sales tool flexible.
• Satisfaction: The process of personal selling requires the salesperson to understand the customer’s needs and satisfy the same by offering the customer the opportunity to buy something he has to offer.
• Persuasion: Personal selling isn’t just about informing prospective customers about the company’s offerings. It also involves using the power of persuasion to make customers accept the seller’s point of view or convince the customer to take a particular action.

(d) Relationship Marketing

Relationship marketing is a facet of customer relationship management (CRM) that focuses on customer loyalty and long-term customer engagement rather than shorter-term goals like customer acquisition and individual sales. The goal of relationship marketing (or customer relationship marketing) is to create strong, even emotional, customer connections to a brand that can lead to ongoing business, free word-of-mouth promotion and information from customers that can generate leads.

Relationship marketing stands in contrast to the more traditional transactional marketing approach, which focuses on increasing the number of individual sales. In the transactional model, the return on customer acquisition cost may be insufficient. A customer may be convinced to select that brand one time, but without a strong relationship marketing strategy, the customer may not come back to that brand in the future.

While organizations combine elements of both relationship and transactional marketing, customer relationship marketing is starting to play a more important role for many companies.

Acquiring new customers can be challenging and costly. Relationship marketing helps retain customers over the long term, which results in customer loyalty rather than customers purchasing once or infrequently.

Relationship marketing is important for its ability to stay in close contact with customers. By understanding how customers use a brand's products and services and observing additional unmet needs, brands can create new features and offerings to meet those needs, further strengthening the relationship.

Relationship marketing is based on the tenets of customer experience management (CEM), which focuses on improving customer interactions to foster better brand loyalty. While these interactions can still occur in person or over the phone, much of relationship marketing and CEM has taken to the web.

With the abundance of information on the web and flourishing use of social media, most consumers expect to have easy, tailored access to details about a brand and even expect the opportunity to influence products and services via social media posts and online reviews. Modern relationship marketing involves creating easy two-way communication between customers and the business, tracking customer activities and providing tailored information to customers based on those activities.

For example, an e-commerce site might track a customer's activity by allowing them to create a user profile so that their information is conveniently saved for future visits and so that the site can push more tailored information to them next time. Site visitors might also be able to sign in through Facebook or another social media channel, allowing them a simpler user experience and automatically connecting them to the brand's social media presence.

This is where CRM and marketing automation software can support a relationship marketing strategy by making it easier to record, track and act on customer information. Social CRM tools go further by helping to extend relationship marketing into the social media sphere, allowing companies to more easily monitor and respond to customer issues on social media channels, which in turn helps maintain a better brand image.

Question No. 4
Differentiate between the following 
(a) Consumer goods and Industrial goods 
(b) Selective and Intensive Distribution 
(c) Advertising and Publicity 
(d) Selling and Marketing                                                                       (4×5 Marks) 

Solution: 

(a)

Industrial goods are materials used in the production of other goods, while consumer goods are finished products that are sold to and used by consumers. Industrial goods are bought and used for industrial and business use. They are made up of machinery, manufacturing plants, raw materials, and any other good or component used by industries or firms. Consumer goods are ready for the consumption and satisfaction of human wants, such as clothing or food.

Industrial Goods

Industrial goods are based on the demand for the consumer goods they help to produce. Industrial goods are classified as either production goods or support goods. Production goods are used in the production of a final consumer good or product, while support goods help in the production process of consumer goods such as machinery and equipment.

Unlike consumer goods, which are purchased by the general public, there are very specific buyers of industrial goods. They include component part buyers such as car manufacturers, those who purchase and install machinery, and distributors or anyone else who buys for resale.

Characteristics of industrial goods include:

Rational buying power: The decision and drive to buy industrial goods is rational compared to consumer goods, which are primarily purchased because of an emotional need.

Complex product lines: Industrial goods are usually complex in nature because they can be highly technical. Those who use them must be highly skilled.

Higher purchase value: Industrial goods typically come with a higher price tag because of their complex nature and limited target market.

High level of investment: Those who need to will often invest a lot of money to purchase industrial goods.

Companies involved in the industrial goods sector represent a variety of industries including (but not limited to) machinery, construction, defense, aerospace, and housing.

Consumer Goods

Consumer goods are tangible commodities produced and purchased to satisfy the wants of a buyer. That's why these goods are also referred to as final goods or end products. They are goods that consumers can typically find stocked on store shelves. As such, they can be purchased for use at home, school, or work or for recreational or personal use. Consumer goods are divided into three different types: Durable goods, non-durable goods, or consumer services.

Durable goods have a significant lifespan of three or more years. The consumption of a durable good is spread out over the entire life of the good, which causes demand for maintenance and upkeep. Bicycles, furniture, and cars are examples of durable goods.

Non-durable goods are purchased for immediate consumption or use. These goods generally have a lifespan of fewer than three years. Food, beverages, and clothing are examples of non-durable goods.

Consumer services are also intangible products or services produced and consumed at the same time. Haircuts and car washes are typical examples of consumer services.

Because of consumer buying patterns, consumer goods are typically classified into four different categories including convenience, shopping, specialty, and unsought goods.

Convenience goods: These products are ready to be purchased. Milk is one example of a convenience good.

Shopping goods: These goods require more planning and thought during the purchasing process by consumers. This category includes products like electronics and furniture.

Specialty goods: This category, which includes jewelry, is composed of goods that are deemed to be luxuries.

Unsought goods: Unsought goods require a niche market and are typically purchased by only a few members in the market, such as life insurance.

(b)

Intensive Distribution:

Intensive distribution aims to provide saturation coverage of the market by using all available outlets. For many products, total sales are directly linked to the number of outlets used (e.g., cigarettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to choose from. In other words, if one brand is not available, a customer will simply choose another.

This alternative involves all the possible outlets that can be used to distribute the product. This is particularly useful in products like soft drinks where distribution is a key success factor. Here, soft drink firms distribute their brands through multiple outlets to ensure their easy availability to the customer.

Hence, on the one hand these brands are available in restaurants and five star hotels and on the other hand they are also available through countless soft drink stalls, kiosks, sweetmarts, tea shops, and so on. Any possible outlet where the customer is expected to visit is also an outlet for the soft drink.

Selective Distribution:

Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g., training) on them. Selective distribution works best when consumers are prepared to “shop around” – in other words – they have a preference for a particular brand or price and will search out the outlets that supply.

This alternative is the middle path approach to distribution. Here, the firm selects some outlets to distribute its products. This alternative helps focus the selling effort of manufacturing firms on a few outlets rather than dissipating it over countless marginal ones.

It also enables the firm to establish a good working relationship with channel members. Selective distribution can help the manufacturer gain optimum market coverage and more control but at a lesser cost than intensive distribution. Both existing and new firms are known to use this alternative.

(c)

Advertising is a one-way public communication that conveys a message regarding a product, service or company to the viewers, readers, and listeners. It is the biggest marketing tool used for non-personal promotion of goods and services to the potential customers, however, the most expensive one.

Advertising is a sort of monolog activity done with an aim to induce customers i.e. to grab the attention of the target audience in such a manner that they are ready to buy the advertised product. The basic objective of advertising is to increase the consumption of the product of the sender company.

Most of the company’s use this sales promotional tool because of its reach, a single message can reach millions of people in nanoseconds. It is a paid announcement by sponsors, which can be done with various mediums like radio, television, websites, newspapers, hoardings, magazines, social media like Facebook, etc.

Although, we should not trust the advertisement blindly because some of them are false or misleading one that does not give complete information about the product. It is just a technique of branding whereby a product is highlighted by its few qualities, to leave an impact on the consumer’s mind.

Definition of Publicity

The term publicity is a combination of two words public and visibility. It refers to the flow of information or fact, regarding general awareness about a subject or hot topic or any burning issue. Here the subject may include a person, product, service, business entity and so on. It is used to draw the attention of the people, for any subject with the help of broadcast media, print media or social media. It is not a promotional technique and thus free of cost.

Publicity can be printed or just aired. It is either be positive or negative, but it is true and real as well.  It is an entirely unbiased opinion as it comes from an independent source like it can be given by an expert or a common man or mass media. As the third party has nothing to do with the company, their responses and reviews are given high weight.

However, it can be seen many times that rivals use this tool deliberately like they spread false rumors to injure the image of the company and ruin its market position too. Positive publicity boosts the consumption while the negative hampers the same.

Key Differences Between Advertising and Publicity

The following are the differences between advertising and publicity:

Advertising is to advertise a product or service of a company, for commercial purposes. Publicity is to publicize a product, service or company to provide information.

Advertising is what a company says about its own product, but Publicity is what others says about a product.

There is a huge investment to be made for advertising a single product however publicity does not require such kind of investment.

The key persons behind advertising are the company and its representatives. Conversely, Publicity is done by a third party which is not related to any company.

Advertising is under the control of the company which is just opposite in the case of publicity.

Advertising repeatedly occurs to grab the attention of the customers while Publicity is done only one-time act.

Advertising is always customer focused, i.e. the more creative the advertise, the more are the customers attracted to it while publicity is not done keeping such things in mind.

As advertising is done to promote a brand or a product so the credibility and reliability are relatively less in comparison to publicity, where the opinion comes from an independent source.

Advertising always speaks the goodness about a product, to persuade the target audience to buy it. In contrast to publicity, it is unbiased, and so it will speak the reality, no matter whether it is goodness or illness.

(d) 

1. Selling :

Selling refers to creating products and selling them to customers. It revolves around the needs and interest of the seller. It is a only an integrated part of the marketing process as its only focus is to manufacture product first and then selling them to customer and it is sales volume oriented not much concern about customer’s satisfaction. It views customer as the last link in business. Selling seeks to convert product into cash. In selling sell is the primary motive and it is more internal company oriented. It is based on inside-out perspective.

2. Marketing :

Marketing refers to finding wants of people/customer and fill them. It revolves around the needs and interest of the consumer. It is a wider term consisting of number of activities like identifying the market first, customer’s needs, product development to meet customer’s need, fixing price and then selling the product to the customer. It views the customer as the very purpose in business. Marketing seeks to convert customer needs into products. In marketing customer satisfaction is the primary motive and it is more external market oriented. It is based on outside-in perspective.

Difference between Selling and Marketing :

S.No.	SELLING	MARKETING
01.	Selling refers to creating products and selling them to customers.	Marketing refers to finding wants of people/customer and fill them.
02.	Selling revolves around the needs and interest of the seller.	Whereas Marketing revolves around the needs and interest of the consumer.
03.	It emphasis more on product or service.	It emphasis more on consumer needs and wants.
04.	Selling is a only an integrated part of the marketing process.	While marketing is a wider term consisting of number of activities.
05.	Selling is based on short term business planning.	Marketing is based on long term business planning.
06.	It manufactures the product first.	It identifies the market first.
07.	It is sales volume oriented.	It is customer satisfaction with profit oriented.
08.	It views business as a goods producing and selling process.	It views business as a consumer satisfying process.
09.	Here seller is considered as king pin of market.	Here consumer is considered as king pin of market.

Question No. 5
Comment briefly on the following statement: 
(a) “Rural marketing in India offer huge opportunities and throw challenges to marketers”. 
(b) “The basic purpose of marketing research is to facilitate decision making process”. 
(c) “The rate of failure of new products is very high”. 
(d) “Market Communication plays an important role in a company’s overall marketing program”.                                                                                 (4×5 Marks)

Solution: 

Question No. 5 - MCO-06 - MARKETING MANAGEMENT - Master of Commerce (Mcom) 2nd Year

Solutions to Assignments

                MCO-06 - MARKETING MANAGEMENT

                    Master of Commerce (Mcom) 2nd Year

Question No. 5. 

Comment briefly on the following statement: 

(a) Different phases of development in Indian market are indicators that there is a revolution undergoing in Indian market. 

(b) Marketing research is quite pervasive in nature and can be used by the marketing managers in various marketing decision areas. 

Even though research is performed to generate information, but managers will not readily use the information to solve their issues. The factors that influence a manager's decision to use research output are quality of research, conformity to prior expectations, presentation clarity, political acceptability within the firm, and challenge to the status quo. But make a note that researchers and managers agree that only the technical quality of research is the key determination of research use. Also, managers are less favourable to utilize research that does not conform to prior belief or is not politically acceptable. Some researchers state that the use of information and data is a function of the direct and indirect effects of environmental, informational, organizational, and individual factors. However, a researcher should not manipulate the findings to match a manager's prior belief. Further, managers in consumer firms are less likely to utilize research findings than their peer in industrial firms. This is due to a higher exploratory objective in data gathering, a greater interest of formal organizational structure, and a lesser interest of surprise in the data gathering. Ethics defines the moral principles or values that generally regulate the conduct of an individual or group.

Researchers have roles and responsibilities to their profession, respondents, and clients, and they must stick to high ethical standards to safeguard that both the function and the data are not brought into low esteem. The Marketing Research Association, Inc. (Chicago, Illinois) has established a code of ethics that gives as a guideline for ethical decisions making in marketing. Council of American Survey Research Organization (CASRO) has a detailed policy on marketing research ethics to which its members notice. Generally, Stakeholders involved in marketing research are

• Project client who sponsors
• Supplier who designs and executes the research
• Respondent who provides the information

In practice, a marketing research goal can be coupled into three major categories programmatic, selective, and evaluative. Where, Programmatic research is conducted to determine marketing opportunities through market segmentation, opportunity analysis, and consumer attitude and product usage research. Selective research is being done to test various decision alternatives such as new product testing, advertising testing, pre-test marketing, and test marketing. Evaluative research is performed to evaluate performance of programs such as tracking advertising recall, corporate and brand image research, and customer satisfaction measurement with the quality of the product and service. As increase in number of new products and types of services, the need for marketing research become vital and the future of marketing research tends to be both promising and challenging. Marking a new product is quite difficult. Companies are relentlessly working to get fresh information that identifies and explains the needs of new consumer segments. Some companies are stick their futures on product innovations, others are revitalizing. Not only the companies that always did marketing research doing well, the size of research activities also continues to increase.

• Researchers are doing more acquisition and competitor research, segmentation and market structure analysis, and basic strategic position assessments for senior management to support for its decisions.
• Other areas, such as the legal department use marketing research. Corporate Affairs needs to know shareholders, bankers, analysts, and employees attitudes and behaviour towards the company. The service department frequently audits service delivery capability and customer satisfaction.
• Whole industries that used to be protected from the unexpected and inexplicable change in and changing customer needs. Banks, Airlines, and financial services are seeing for ways to overcome advertising clutter, product proliferation, and high marketing costs brought on by sophisticated customers and competitors.

(c) Consumers are being influenced by a number of psychological factors in the purchase of various products and services. 

Human psychology is a major determinant of consumer behavior. These factors are difficult to measure but are powerful enough to influence a buying decision.

Some of the important psychological factors are:

i. Motivation

When a person is motivated enough, it influences the buying behavior of the person. A person has many needs such as social needs, basic needs, security needs, esteem needs, and self-actualization needs. Out of all these needs, the basic needs and security needs take a position above all other needs. Hence basic needs and security needs have the power to motivate a consumer to buy products and services.

ii. Perception

Consumer perception is a major factor that influences consumer behavior. Customer perception is a process where a customer collects information about a product and interprets the information to make a meaningful image of a particular product.

When a customer sees advertisements, promotions, customer reviews, social media feedback, etc. relating to a product, they develop an impression about the product. Hence consumer perception becomes a great influence on the buying decision of consumers. 

iii. Learning

When a person buys a product, he/she gets to learn something more about the product. Learning comes over a period of time through experience. A consumer’s learning depends on skills and knowledge. While skill can be gained through practice, knowledge can be acquired only through experience.

Learning can be either conditional or cognitive. In conditional learning the consumer is exposed to a situation repeatedly, thereby making a consumer to develop a response towards it.

Whereas in cognitive learning, the consumer will apply his knowledge and skills to find satisfaction and a solution from the product that he buys.

iv. Attitudes and Beliefs

Consumers have certain attitudes and beliefs which influence the buying decisions of a consumer. Based on this attitude, the consumer behaves in a particular way towards a product. This attitude plays a significant role in defining the brand image of a product. Hence, marketers try hard to understand the attitude of a consumer to design their marketing campaigns.

(d) Marketing of services is no different from marketing of products, the strategies of the 4 P's, however, require some modifications when applied to services. 

To understand the services marketing mix framework, it’s necessary to understand the nature of services. According to Wolak, Kalaftis & Harris, the characteristics of services are:

• Intangibility–the service cannot be touched or viewed, so it is difficult for clients to tell in advance what they will be getting.
• Inseparability (simultaneity)–the service is being produced at the same time that the client is receiving it (eg during an online search, or a legal consultation).
• Heterogeneity (variability)–services involve people, and people are all different. There is a strong possibility that the same enquiry would be answered slightly differently by different people (or even by the same person at different times). It is important to minimize the differences in performance (through training, standard-setting and quality assurance).
• Perishability–unused capacity cannot be stored for future use. For example, spare seats on one airplane cannot be transferred to the next flight, and query-free times at the reference desk cannot be saved up until there is a busy period.

Each of these characteristics plays a role in the service marketing mix.

The Services Marketing Mix

Extending the 4Ps

The services marketing mix is an extension of the 4Ps framework. The essential elements of product, promotion, price and place remain but three additional elements – people, physical evidence and process are included to the 7Ps mix. The need for the extension is due to the high degree of direct contact between service providers and its customers, the highly visible nature of the service process, and the simultaneity of the production and consumption. Although it is possible to discuss people, physical evidence and process within the 4P framework (for example, people can be considered part of the product offering), this extension allows for a more thorough analysis of the marketing elements necessary for successful services marketing.

Product

In the case of services, the “product” is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements, and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Therefore, particular care has to be taken in designing the service offering.

Pricing

Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in the case of services there are attendant costs–such as labor and overhead costs–that also need to be factored in.

A restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambiance provided.

Place

Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought as to where the service is provided. A fine dining restaurant is better located in a busy, upscale market as opposed to the outskirts of a city. A holiday resort is better situated in the countryside away from the rush and noise of a city.

Promotion

Since a service offering can be easily replicated, promotion becomes crucial in differentiating a service offering in the mind of the consumer. Service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings.

People

People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. A restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today.

Process

The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.

Physical Evidence

Since services are intangible in nature, most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Many hair salons have well designed waiting areas, often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests.

Question No. 4 - MCO-06 - MARKETING MANAGEMENT - Master of Commerce (Mcom) 2nd Year

Solutions to Assignments

                MCO-06 - MARKETING MANAGEMENT

                    Master of Commerce (Mcom) 2nd Year

Question No. 4. 

Differentiate between the following: 

(a) Product and Production concept of marketing 

In the marketing world, businesses are supposed to design the pattern of strategies that satisfy customers’ needs, maximize the level of profit, raise sales, and beat their competitors. The term product and production concepts are frequently compared. The idea of a product concept is known as similar to the marketing concept because it includes the production of a product as accepted by the user. 

On the other hand, the production concept means that a brand or firm has to concentrate on products that can generate the most accurately. Low-cost products would produce by firms and it is believed that this cost will drive the demand for the product.

Product vs Production Concept

The main difference between Product and Production Concept is that the concept of the product is to create a good quality item/product which should be reliable along with unique features for the consumers. The concept of production is to make the product available in the market at an affordable price.

Comparison Table Between Product and Production Concept

Parameter of Comparison	Product Concept	Production Concept
Preference of Consumers	Products that offer the best quality, performance, and creative specifications are preferred by consumers	Products that are broadly available and inexpensive are preferred by consumers
Meaning	Improvements in quality products	Easily accessible products
Business Goal	To enhance the quality of the product, creating new features, etc.	To enhance the quantity of production and to reduce the average cost.
Profit	Gets profit by providing a good quality product	Gets profit by expanding large scale production
Priority	Gives priority on the product	Gives priority on the production

What is the Product Concept?

The meaning of Product Concept is that customers or consumers prefer a product that offers the best quality, performance, and features. In order to deliver the best possible product to the customer as per their requirement and expectation, this concept is a necessary one.

To achieve success, a product is not going to be complete by itself and it will need other factors such as- business-like marketing, delivery, sales, service, etc.

A firm or company can create an identity of the product and also can add practical value and advantages by using the Product concept. As a result, the expected customers can collect this benefit and sooner or later they will buy the product in the market.

Towards the market, the product concept is known as one of the orientations & marketing approaches that can be followed by a company.

The other strategies are Selling Concepts, Production Concepts, and Marketing Concepts, etc. Pull Marketing is created because of better products that provide aid in the success of the brand. And every creative innovation helps to get new products with features which will attract more customers.

For example, Apple is one of the companies that focuses extremely on their product concept to deliver the best products to their customers. Their products are considered to be of high quality with ingenious features and tremendous accomplishments. So, consumers want to purchase the products of Apple and that generates a pull marketing.

Therefore, this is the proper definition of the Product Concept along with its overview.

What is the Production Concept?

The production concept can be called a very effective organizational adjustment than any of the lists of other marketing concepts. It says the actual truth about how humans will prefer products that are inexpensive and can be easily found.

In the mid1950s this concept was discovered during the time of production era of early Capitalism. In that time, organizations concerned themselves principally with creation, assembling, and effectiveness issues.

Also, during this time, the ‘Says Law’ was developed with the idea of supply and demand. The actual thought behind this concept is that to maximize profitability and scale, businesses will always prefer to generate extensively cheap products in maximum volumes.

The owners of these businesses believe that customers are initially interested in product availability and low prices. In this way sometimes customer’s needs might not be fully addressed.

This kind of attempt is apparently most productive at the point when a business works in high development markets or where the potential for economies of scale is noteworthy.

Main Differences Between Product and Product Concepts

1. In the product concept, even if the price of the product is high, a good quality product will sell itself.  On the other hand, in the production concept, if the firm produces in bulk amount, the cost of production will be less, and so it will attract the customers for its low cost and will be easily sold.
2. In the product concepts, consumers will always want the products that offer the most value in quality, performance, and innovative features. And in the production concepts, consumers will favor products that are available around them and are budget-friendly.
3. The product concept can be followed by customers through the improvement in the product. Under other conditions, the production concept will be followed by upgrading the amount of product effectiveness and distribution coverage.
4. The goal of the product concept is providing good quality rich products, with creative features and outstanding performance to the customers. And production concept targets at accomplishing economies of scale, through a major number of production and improving the supply chain.
5. In a product concept, the product usually gets the utmost preference, and in the production concept, the production of goods will be given top priority.
6. In the product concepts approach, the advancement of the product in terms of its features, performance, and quality are the means to achieve the end goals. In production concepts, maximizing projects, production should be done on a large scale which will make sure obvious availability and affordability of the product.
7. A product concept is known as the thought for an item or product. And a production concept is known as the concept of conceiving to create the product.
8. The production concept is useful for the companies when the demand for a product outruns the supply, and the cost of the product is too high. The product concept is nothing like that.

(b) Micro environment and Macro environment 

Every business organization is a part of the business environment, within which it operates. No entity can function in isolation because there are many factors that closely or distantly surrounds the business, which is known as a business environment. It is broadly classified into two categories, i.e. microenvironment, and macro environment. The former affects the working of a particular business only, to which they relate to, while the latter affects the functioning of all the business entities, operating in the economy.

While microenvironment has a direct impact on business activities, the macro environment is a general business environment, which influences all business groups at large. It is important to learn the business environment, so as to understand the effect of various forces on business. Take a read of the given article to know the difference between microenvironment and macro environment.

Comparison Chart

BASIS FOR COMPARISON	MICRO ENVIRONMENT	MACRO ENVIRONMENT
Meaning	Micro environment is defined as the nearby environment, under which the firm operates.	Macro environment refers to the general environment, that can affect the working of all business enterprises.
Elements	COSMIC, i.e. Competitors, Organization itself, Suppliers, Market, Intermediaries and Customers.	PESTLE, i.e. Political, Economic, Socio-cultural, Technological, Legal and Environmental.
Nature of elements	Specific	General
Are these factors controllable?	Yes, but to some extent only	No
Influence	Directly and Regularly	Indirectly and Distantly

Definition of Micro Environment

Microenvironment refers to the environment which is in direct contact with the business organization and can affect the routine activities of business straight away. It is associated with a small area in which the firm functions.

The microenvironment is a collection of all the forces that are close to the firm. These forces are very particular for the said business only. They can influence the performance and day to day operations of the company, but for the short term only. Its elements include suppliers, competitors, marketing intermediaries, customers and the firm itself.

Micro Environment

• Suppliers are the ones who provide inputs to the business like raw material, equipment and so on.
• Competitors are the rivals, which compete with the firm in the market and resources as well.
• Marketing intermediaries may include wholesalers, distributors, and retailers that make a link between the firm and the customers.
• Customers / Consumers are the ones who purchase the goods for their own consumption. They are considered as the king of business.
• The firm itself is an aggregate of a number of elements like owners like shareholders or investors, employees and the board of directors.

Definition of Macro Environment

The general environment within the economy that influences the working, performance, decision making and strategy of all business groups at the same time is known as Macro Environment. It is dynamic in nature. Therefore it keeps on changing.

It constitutes those outside forces that are not under the control of the firm but have a powerful impact on the firm’s functioning. It consists of individuals, groups, organizations, agencies and others with which the firm deals during the course of its business.

Macro Environment

The study of Macro Environment is known as PESTLE Analysis. PESTLE stands for the variables that exist in the environment, i.e. Political, Economic, Socio-cultural, Technological, Legal and Environmental. These variables, consider both economic and non-economic factors like social concerns, government policies, family structure, population size, inflation, GDP aspects, income distribution, ethnic mix, political stability, taxes, and duties, etc.

(c) Market segmentation and Market targeting. 

In segmentation, the entire market of consumers is broken down into a number of groups. These groups are segments that comprise consumers with similar characteristics. Of all these segments the company chooses one segment to focus on, to offer their products. This is the process of targeting.

We all know that, when all the consumers of the product are taken together, it makes up the market for that product. But this is also true all the consumers are not the same. Therefore, the consumers may differ in:

• Needs
• Motives
• Characteristics
• Buying habits.

With this, we can conclude that the market for the product is heterogeneous in nature. So, the marketers can divide the entire market into submarkets. These sub-markets are homogeneous.

Comparison Chart

BASIS FOR COMPARISON	SEGMENTATION	TARGETING
Meaning	Segmentation is the process of classifying the market into several approachable groups.	Targeting is the process of concentrating on a particular segment of the market to offer products, of all the segments of the market.
Concerned with	Dividing up the market, by grouping the customers with similar needs.	Choosing the right segment considering different factors.
Bases	Need, Interest, Marital Status, Sex, Buying Behavior, etc.	Attractiveness of the segment
Stage of Target marketing	First	Second

Definition of Segmentation

Segmentation implies splitting the heterogeneous market into relatively distinct homogeneous sub-market. To divide the market, specific criteria form the base.

These groups possess consumers, having common characteristics. The characteristics include age, income, sex, personality traits, or behavior. It aims at determining the consumer groups whose needs can be fulfilled with one common product. Above all, it ensures the concentration of the efforts of the firm in an effective and economical manner.

This helps in tapping the market in a better manner. Besides, it also helps in optimizing products and advertising them to consumer groups.

What is Market Segment?

Market Segment is that part of the entire market, wherein the consumers have one or more things in common. And due to this reason, their product needs are the same.

It is a strategic marketing tool. This is used to determine the market and also to allocate resources.

Assumptions of Market Segmentation

1. All the buyers are not the same.
2. Identification of consumers with similar characteristics. These can be background, need, values, behaviors, and so forth.
3. There will be small sub-groups and often homogeneous in nature, as compared to the market.
4. It is easier for the marketer to satisfy a small group with similar customers than a large group with diverse customers.

Requirements of Effective Segmentation

• Measurability: The segments have to be measurable. In other words, the quantification of the segment should be possible so that the size can be estimated.
• Accessibility: Segmentation should be done in a manner that the marketer may get through and serve the segments.
• Viability: Segments should be cost-effective as well as profitable to the marketer.
• Intensity: Attractiveness of segment is also ascertained by its intensity with regard to inter-firm rivalry. A higher intensity indicates more competition between firms. Therefore, it makes the segment unattractive for the marketer.

Definition of Targeting

After the creation of different segments, managers decide which segment is best to target. For the purpose of targeting the company takes into account its ultimate objectives. In practice, managers go for that segment that is highly profitable. But, the firm can also aim for that segment that is less likely to attract competitors.

In other words, targeting is the process of choosing one segment, of all the segments, to aim for. There are three strategic options are available to the marketers which are:

1. Concentrated Marketing: In this, the company focuses on a single segment at a time. Another term used for this is niche marketing. In this, the marketer attempts to become the blue-chip within that segment.
2. Differentiated Marketing: In this strategy, the marketer concentrates on more than one segment at a time. Also, the company offers a differentiated marketing mix for each segment. The alternative name of this is multi-segmented marketing.
3. Undifferentiated Marketing: In this, the marketer uses a ‘scattergun’ approach. Therefore, the marketers offer one basic product that would serve the needs of people belonging to different age groups and lifestyles.

The marketer’s decision about the adoption of strategy depends on these factors:

• Company’s Resources
• Product features and benefits
• Characteristics of the segment

Targeting Strategies

Standardization:
Here, the firm offers a similar product to different segments. For this, the same communication, distribution, and pricing strategy are used.

Differentiation:
In this, the company differentiates its products to match the needs and expectations of different segments of the market.

Focus:
It is a hybrid strategy. That is to say, it combines both standardization and differentiation strategies. Also, the ‘core strategy’ remains unchanged, but differentiation is implemented to fulfill the requirements of specific consumers.

(d) Captive Product Pricing and Product-Bundle Pricing

Captive Product Pricing

What Is Captive Product Pricing?

For instance, captive product pricing is a pricing strategy devised to attract a large volume of customers to a one-time purchase of a lower-priced core (or main) product that requires accessory (or captive) products for the main product to function. Consequently, companies might initially lose core product sales. For example, they may eventually enjoy increased revenue and sales through the recurring purchases of more expensive accessory products.

Therefore, this pricing strategy is one of five product mix pricing strategies. The other four include product line pricing, optional product pricing, by-product pricing, and product-bundle pricing.

Real-World Examples of the Pricing Strategy

Certainly, if you have a cell phone with a wireless plan, you’ve experienced the captive product pricing strategy firsthand. For example, the cell phone itself is the core product. Therefore, the phone’s wireless plan is the captive product. Similarly, other captive products include phone cases, earbuds, and other products created to increase functionality. Above all the goal is to encourage the use of the core product. Moreover, organizations feel the need to keep customers engaged with new products.

What is price bundling?

Price bundling (product bundling or product-bundle pricing) is a marketing strategy that combines two or more products to sell them at a lower price than if the same products were sold individually. The bundle pricing technique is popular in retail and eCommerce as it offers more value for the price. It can also help build customer loyalty and boost product sales.

Price bundling can be applied to any type of product, but it works best when there are two or more items in the bundle. For example, say you own an ice cream shop and want to offer customers deals on their favorite flavors. You could offer a bundle of three ice cream cones for $4 instead of selling them each at $1 each.

Common bundle pricing examples

Bundle pricing examples can be seen in many industries. The strategy is used to entice potential customers to purchase additional products or services that companies know will be valuable. You’ve likely seen the following real-life bundle pricing examples:

• • Mobile devices sold with a data plan
  • Microsoft Office 365 and G Suite
  • Soup, salad, and breadsticks

In each of these bundle pricing examples, the customer is able to purchase everything they need at a single price, whether it’s software tools or dinner. The company selling these products provides more value in a single purchase than if each item in the product bundle were purchased separately. Think about it: your phone would be less useful without a data plan, and breadsticks really tie a meal together.

We’ve even seen successful subscription ecommerce retailers like Dollar Shave Club implement this bundle pricing strategy for their own products.

Bundle pricing strategy is great to use when you have a suite of products or services to offer, or when you want to increase the value of low-volume items. Selling these complementary products together gives customers the functionality they need to get the most value out of your service or product. Bundle pricing strategy makes customers’ purchase experiences better and can lead to more engaged customers over time.