Solutions to Assignments
MBA and MBA (Banking & Finance)
MMPC-006 - Marketing Management
MMPC-006/TMA/JULY/2022
Question No. 1.
(a) Define and discuss the term “Marketing”. Elaborate its scope and significance in an enterprise.
Needs, Wants and Demands are always the starting point for marketing activities. Explain with a suitable example.
Marketing is a very exciting and highly challenging field. It requires individual interest with a flair for
creativity for success. Congratulations! You have embarked on the study of an exciting subject, which
will boost your creativity and imagination in every given marketing situation in your career down the
line.
Marketing is everywhere most of the tasks we do and most of the things we handle are linked to
marketing. Marketing is an activity. Marketing activities and strategies result in making products
available that satisfy customers while making profits for the companies that offer the products. Your
morning tea, the newspaper, your breakfast, the dress you put on for the day, the vehicle you drive, the
mobile in your pocket, the quick lunch you have at the fast food joint, the PC at your desk, your internet
service provider, your e-mail ID almost everything that you use and everything that is around you, has
been touched by marketing. Marketing has its imprint on them all depending on the product and the
context/experience the imprint may be visible or subtle. But it is very much there. Marketing permeates
most of your daily activities. Marketing is an omnipresent entity.
Marketing refers to the process of ascertaining consumer needs, converting them into products and
services, and then moving the product or service to the final consumer segment with emphasis on
profitability and customer satisfaction, and ensuring the optimum use of the resources available to the
organization.
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives.
According to Philip Kotler, marketing is a social and managerial process by which individuals and
groups obtain what they need and want through creating and exchanging products and value with others.
The author has considered marketing as a social process where interaction of people is an essential
component of it. Through this interaction the persuasion for selling the products or services begins.
Thus marketing is purely purchase decision of the customer but through continuous marketing
initiatives at different stages. Marketing starts before the production of the goods and continues even
after the selling of the products. Thus it is assumed marketing is a continuous process. While the
activities pertaining to identification of the needs, wants and demands of the customer, then designing
of a suitable product to meet the needs, giving name to the product and converting it to a brand by
communicating it to the customers.
The American Marketing Association defines marketing as follows:
“Marketing is the performance of business activities that directs the flow of goods and services from
producer to consumer or user”.
Later on the American Marketing Association revised its definition of marketing as
“the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.” This
definition attempted to highlight the importance of exchange processes that occur between the seller and
the buyer. As we move on to discuss about the subject matter of marketing, we would understand the
meaning of this definition better
Exchange Process: Let’s first look into the meaning and importance in marketing management.
Primarily the term exchange means “giving or receiving something in return for something else” i.e. in
marketing parlance an individual or a customer will simply obtain the firms product or service offering
to satisfy his need or want in exchange of money thus leading to exchange process between two entities.
For example if a person hires a Uber service for his travel from destination x to y and the money paid
as fare in lieu of the trip is an exchange process. This exchange process can extend into strong
relationship marketing and we enter into exchange relationships all the time. Through relationship
marketing we build a long-term association with the customer. In the above example of Uber, if the
customer is satisfied by the service then we may plan to use the same services in future as well and
intend to become a loyal customer with Uber. While Uber by way of delivering value to customers, a
relationship with customers is developed. Thus marketing is earning profit by building relationship with customer through satisfying their needs and wants. The same explanation is applicable for a product as
well.
We can see that marketing, as per this definition, starts with a ‘Product’. This is very common idea
among many people, for example, in advertising agencies, as they normally are required to advertise to
sell a product, which already exists. Similarly, salesmen are also given ‘products’ and asked to sell
them. Therefore, to them marketing often, starts with a product. However, this is only a narrow view of
the concept of marketing.
the definition of Marketing in the words of Philip Kotler. According to him,
marketing management is:
The art and science of choosing target markets and getting, keeping, and growing customers through
creating, delivering, and communicating superior customer value.
The definition focuses “superior customer value.” Customer Value primarily is the incremental benefit
which a customer derives from consuming a product after paying in return. The term value signifies the
benefit that a customer gets from a product. It is the difference between the benefits (sum of tangible
and intangible benefits) and the cost. Customer value is dependent on the three factors – Quality,
Service and Price. The value of a product increases with its quality and service, as the benefits increase.
On the other hand, the value decreases with increase in price because of the increase in costs increase in
this case.
As “superior customer value” is the created when customers are willing to pay more for your product or
service than competitor or when they prefer your version of a product or service to all others because it
meets their needs better and maybe even exceeds their expectations.
As a marketer you should view marketing both from social and managerial dimensions. The social
aspect of marketing was put forth by Paul Mazur. He defined marketing as the creation and delivery of
a standard of living to society. The standard of living suggests the level of wealth, comfort, material
goods, and necessities available to a certain socio-economic class or geographical region. Thus the
products and services offered by organisations (both commercial, and non-commercial) have a direct or
indirect bearing on people’s standard of living. We are also aware of the fact how products/services
such as sanitary napkins, electric bulbs, telephone, cars, tractors, aero planes, cinema, antibiotics,
anesthesia, and birth control pill enriched human life over the period of time in terms of improved
standard of living.
Philip Kotler whose seminal text Marketing Management was first published in 1967 beautifully
described the meaning of marketing in three words as “meeting needs profitably.”
Thus the most fundamental concept, which must be realised as being the basis of all marketing
activities, is the existence of human needs. It is these human needs which form the starting point for all
marketing activities.
Today, if you look around, Start-ups are the order of the day. The young and progressive entrepreneurs
are jumping on to this bandwagon by every passing day. You must remember that if you are an
entrepreneur who wants to start a new business, you should have a product or an idea in your mind. In
fact you have to decide what product/service you should manufacture and sell. How do you decide this?
The answer to this question lies with you i.e. the entrepreneur has to first decide what product he should
select. This is possible only if one can identify the needs, and wants which require satisfaction among
human beings. Once he has identified the need of a group of human beings (called market segment), he
can determine the product, which can help to satisfy that need. This is a part of the modern philosophy
of marketing or the marketing concept.
SCOPE & SIGNIFICANCE OF MARKETING
Do you think that the firms while carrying out their marketing efforts involve in offering only the
physical products such as toothpaste or a detergent powder? In case your answer is ‘yes’ that would be a
narrow view of the ‘offerings’ or ‘entities’ being marketed by them. In fact, organisations offer a wide
range of ‘products’ or entities. They include goods, services, events, experiences, persons, places,
properties, organisations, information, and ideas. Let us have a quick glance at each these entities.
- Goods: Physical goods include agricultural commodities, fish, eggs, newspapers, chocolates, laptops, televisions and furniture.
- Services: Services sector is the largest sector in the world and over 63% of the total global wealth comes from the services sector. This sector accounts for over 53% of India’s GVA. Services include tourism, travel, hospitality, healthcare, education, banking and insurance.
- Events: Marketers promote time-based events ranging from local events (e.g. Hornbill Festival in Nagaland, and Kerala Boat Festival) to national events (e.g. 150 Years of Celebrating the Mahatma) and international events (e.g. India International Trade Fair, and the Tokyo Olympics 2021).
- Experiences: A firm can market personalised or customised experiences such as Ramoji Film City Star Experience, Climbing up the Mount Everest, and a weekend with stalwarts of cricket. Personalisation can be a huge boon for retailers and consumers.
- Persons: Many companies are using personal marketing for promoting their brands. Renowned personalities market themselves as well as different products or services. Cristiano Ronaldo, the renowned football player endorsing Clear Shampoo and Nike sports shoes; famous film personalities Aishwarya Rai Bachchan endorsing L’Oreal Shampoo and Salman Khan serving as a brand ambassador of Pepsi are a few examples. Self-branding became an emerging area.
- Places: Nations, regions, states, and cities compete for investments, tourists, and companies. Some of the place marketers are governments, real estate agents, and investors. Singapore’s New Asia, India’s Incredible India, and Mumbai’s City of Dreams are a few examples of how branding is done with logo, slogan and so on.
- Properties: They are either real estate or financial assets which are bought and sold. Godrej Properties and Oberoi Realty in the real estate sector, and ICICI Direct and HDFC Securities among Demat service providers are some examples.
- Organisations: Museums (e.g. National Museum in New Delhi and Salar Jung Museum in Hyderabad), non-profit organisations (e.g. HelpAge India and Smile Foundation), performing arts organisations (e.g. Inspire India Programme by Shankar Mahadevan Academy, Music awards by Sangeet Natak Akademi), and corporations (e.g. Tata Motors’ corporate brand promise – ‘Connecting Aspirations’) aim for enhancing their organisational image through systematic marketing efforts.
- Information: Google became part of everybody’s life as we depend on its Search for information. Google’s mission is “to organize the world’s information and make it universally accessible and useful.” There are many such marketers like publishers, educational institutions, and newspapers which offer ‘information’ as their product.
- Ideas: Social marketers are engaged in idea marketing. This is also known as social marketing. It is an approach used to develop activities aimed at changing or maintaining people’s behaviour for the benefit of individuals and society as a whole. Swachh Bharat Abhiyan or Clean India mission is a country-wide initiative taken by the Government of India in 2014 to eliminate open defecation and improve solid waste management. The governments and health organisations all over the world tried to convince the people about wearing face masks appropriately, maintaining physical distance, and washing one’s hands frequently to combat the Coronavirus is another example.
NEEDS WANTS AND DEMANDS
Lets us now try to understand Marketing Concepts that are a part of the definitions: Need(s), Want(s)
and Demand(s)
Need(s)
Needs are the state of being deprived of something. Needs can be grouped into five categories
as detailed below. Needs are not invented by marketer rather the widely known academic model of needs was proposed by psychologist Abraham Maslow. Although this model is predominantly used in
motivational studies but is also applied for studying customers’ needs.
The Maslow’s theory of hierarchy categorises human needs into five levels. Abraham Maslow pursued
to explain why people are driven by particular need at a particular time. According to his theory, human
needs are arranged in a hierarchy from most to least pressing. These include physiological needs, safety
needs, social needs, esteem needs, and self-actualisation needs. Marketers need to know which specific
need their brand is targeted to. Let us illustrate with some of the brands that are targeting these five
levels of customer needs:
a) Physiological needs: Food, water, shelter – All food items from liquids to solids etc. Amul,
Aashirvaad atta, Britannia, Vimal, State housing board properties fall under the purview of this
category.
b) Safety needs: Security, protection - Insurance, Banking products, sanitizer, OTC products
Vaccination and Immunization programs by the state.
c) Social needs: Sense of belonging, love - Bharat Matrimony, Social media, Netflix India etc. fall
under this category.
d) Esteem needs: Self-esteem, recognition, status – Premium niche brands of all product categories
and services, Allen Solly, iPhone, Dior, Jaguar Cars, International travel and recreation.etc.
e) Self-actualisation: Self-development and realisation - Teach for India, Azim Premji Foundation
etc.
From the customer perspective consumer’s needs can be categorized as follows:
1. Stated needs: Here the customer explicitly states what they want. For example, Ms Divya wants
to open a bank account.
2. Real needs: This is more specific. Ms Divya wants to open a Savings Bank account with a
nearby public sector bank in her residential locality.
3. Unstated needs: Ms Divya anticipates the bank to give her an International Debit Card along
with a cheque book facility.
4. Delight needs: Ms Divya like the premises of the bank for its upkeep and neatness where the
employees and fellow customers exhibit the most appropriate and decent behaviors.
5. Secret needs: Ms Divya is reluctant to confess that she has a negative attitude towards
Netbanking facility.
Want(s)
Wants are the form taken by human needs as they are shaped by culture and individual personality.
These are essentially dependent upon needs. For example, a person in North India would satisfy his
hunger with rajma and chawal while a person from South India would like to have fish curry and rice.
This clearly explains their want(s) backed by culture and their social environment.
Demand(s)
You may want to watch the final IPL match being played abroad. The big question is do you have
money and time to travel abroad to watch the match? If yes, then it’s a demand. Wants backed by
willingness and purchasing power is known as demand.
By and large all marketing companies from FMCG, consumer durables, to service firms firstly do try
to recognize the needs and want of customers, conduct market research, obtain regular feedback and
market intelligence with the help of the sales force in ascertaining the unmet customer needs and then
only it will be possible to fulfill needs so identified. For example the floor managers at Big Bazaar
retail outlets do mingle and interact regularly with customers to try and keep them happy.
Question No. 1
(b) Discuss the various stages involved in the consumer buying process with reference to buying a smart phone brand of your choice.
Even buying decision involves an element of active reasoning. The manner in which this
active reasoning manifests itself is illustrated in Figure I. In making a buying decision the
consumer goes through the five stages of:
i) problem recognition,
ii) pre-purchase information search,
iii) evaluation of alternatives,
iv) purchase decision, and
v) post purchase behaviour
However, in case of routine purchases, the consumer may skip the second and third stages
and straight away go to the stage of purchase decision. But in case of purchase decision
involving extensive problem solving, the consumer is likely to go through all the five stages
in the specified sequence.
The important point to note is that the buying process starts much before the actual purchase
and has implications even after the purchase has been made. This should give ideas to the
marketer as to how he has to start designing his marketing strategy in order to achieve his
specified marketing objectives.
Let us understand the stages in decision-making process with the help of a Mr. Rao's specific decision to purchase a briefcase.
i) Problem Recognition: The buying process starts with the buyer recognising a need or
problem. Lets come back to Mr. Rao he feels very uncomfortable carrying his papers, files
and lunch packet in his hand or in a plastic bag to his work place. Sometimes, the papers
and even files from his hand and get spoiled Mr. Rao feels the need for a suitable holder to
carry papers to and fro from his office and has identified a briefcase as the solution to his
problem.
ii) Pre-Purchase Information Search: In response to the stimuli provided by the need for a
briefcase, Mr. Rao starts searching for information on the kinds of briefcases available in
the market. Search can be of two types: internal and external. Internal search refers to
recalling relevant information stored in the memory. For instance, Mr. Rao may recall
having seen the different kinds of briefcases used by his colleagues. Or he may recall
having seen some advertisements for briefcases on the television or in some magazines
and newspapers. External search refers to the deliberate and voluntary seeking of new information regarding the product/brand under consideration. Mr. Rao can seek
information from the following three sources:
- Personal sources: family, friends, colleagues, neighbours.
- Commercial sources: advertisements, retailers, salesmen.
- Public sources: seeing others, consumer information centres.
By tapping all these sources of information, Mr. Rao is able to identify the different types of
briefcase on the basis of material, branded versus unbranded, high-medium low priced. A
wide variety of materials are used for making briefcases ranging from the best leather to
rexine to plastic. There are branded briefcases available and Mr. Rao can choose from the
well known VIP, Safari and Aristocrat and some less known local brands, or he can choose to
buy an unbranded briefcase. The price range varies according to the size the material that has
gone into its make of the briefcase etc. Also, there are a number of other features which can
influence the choice, such as type of lock, and number of partitions and pockets for keeping
different documents.
By the end of this stage, Mr. Rao has gathered enough information about different kinds of
briefcases available and has narrowed down his alternatives to moulded plastic, branded
briefcase. Within this broad range there are various brands and price ranges to make the final
choice from.
iii) Evaluation of Alternatives: Mr. Rao will make his final decision using certain evaluative
criteria. The most commonly used criteria are: (i) product attribute, (ii) the relative
importance of each attribute to the consumer, (iii) brand image, (iv) attitudes towards the
different brands or alternatives under considerations. For instance, the product attributes of
the (Plastic branded briefcase) alternatives identified by Mr. Rao are: unbreakable,
lightweight, spaciousness, reliability of locking system, colour, and price. Mr. Rao attaches
maximum importance to the product attributes of light weight and spaciousness as compared
to other attributes. He already has some kind of attitude towards the various brands developed
in the stage of information search which will affect his final decision.
This stage of the buying decision process gives the marketer a chance to modify his product
offering in keeping with the relative importance attached to each attribute by various
consumer segments, altering beliefs and attitudes about his own brand, and calling attention
to neglected product attributes,
iv) Purchase Decision: In the evaluation stage, Mr. Rao has ranked the various brands in terms
of his first, second and third preference. In short, he has made up his mind about which brand
he wants to buy. However, Mr. Rao may finally end up buying a brand which is not his most
preferred. This may happen because attitudes of others and ''situational factors.
For instance, when Mr. Rao goes to the shop to make his purchase, the shopkeeper's negative
remarks about his (Mr. Rao's) most preferred brand may make him change his mind. Also, it
is possible that Mr. Rao's preferred brand is not available, or there is a very attractive price
discount on the brand ranked third by him which eventually makes him change his mind.
v) Post Purchase Behaviour: After purchasing the briefcase, if Mr. Rao finds that its
performance or utility matches up to his expectation, Mr. Rao will feel satisfied with his
purchase. The satisfaction will reinforce Mr. Rao's perceived favourable image of the brand,
which is likely to be extended to the entire range of products manufactured by the Company.
Also, Mr. Rao is likely to strongly recommend the brand when his friends ask his advice for
buying a new briefcase. A satisfied customer is thus a very powerful source of influence for
potential customers.
However, if Mr. Rao feels that the briefcase which he has purchased is not up to his
expectation, then he is likely to feel dissatisfied. The gap between expected (or perceived)
and the actual performances cause discomfort or dissonance to the buyer. As a result of this,
Mr. Rao may decide to stop buying other products sold by the same company and also warn
his friends about the poor utility of his briefcase. To reduce his own state of discomfort or
dissonance arising from the feeling that he has not made the right choice, Mr. Rao can: (i) reevaluate the unchosen brands and downgrade their desirability by identifying some negative
features, and (ii) search for information to confirm his choice.
