Question No. 2 - MMPC-006 - Marketing Management - MBA and MBA (Banking & Finance)

Solutions to Assignments

                            MBA and MBA (Banking & Finance)

MMPC-006 - Marketing Management

MMPC-006/TMA/JULY/2022

Question No. 2.                                                                              
(a) Discuss the product line decisions that a firm should consider to pursue and consolidate its position in the face of competition. 

Product line decisions involve identifying specific products a company wishes to offer and very often a product manager is appointed to look after a product line/s. She/he is responsible for maximising market share and to ensure sustained growth in terms of sales revenue and sales volume resulting in higher margins. The product line decisions are taken as to how long or short the line should be. A product line is often meant to cater to requirements of various customer segments of the target market. These decisions are based on the objectives of the company, availability of various resources and the profit potential of the proposed product lines. 

For example, Marico Industries, manufacturer of edible oils offers various products under its flagship brand ‘Saffola’ to cater to the needs of various customer segments.

Product-Line Analysis 

In offering a product line, companies generally develop a basic platform and then modules that can be added to meet different customer requirements. Product line managers need to know the sales and profits of each product item in the product line in order to determine which product items to build, maintain, harvest, or divest. They also need to know each product line’s market profile. 

Product-Line Length

The following objectives of a company determine the product line length. One objective is to create a product to induce up-selling. For example Tata motors introduced Tata Indigo to move customers up from Tata Indica. Another objective is to create a product that facilitates cross-selling. HP sells printers as well as PCs/laptops. Yet another objective could be to create a product line to protect against cyclic economic ups and downs. Samsung offers white goods such as refrigerators, washing machines, televisions, micro wave ovens, and air conditioners under different brand names to cater to entry level, mid-level and premium segments. Companies who seek high market share and market growth generally carry longer product lines while companies that lay emphasis on higher profits generally carry shorter product lines.

Product lines tend to lengthen over time. It may be due to the following:

- Pressure due to excess production capacity.

- Pressure from sales-force and/or distributors to offer a more complete line as a result of customer/market demand.

However, as more product items are added costs rise substantially; such as design and engineering costs, inventory costs, manufacturing changeover costs, order processing costs, transportation costs and the new promotion costs. Thus, decisions regarding lengthening the products are reviewed periodically and may sometimes call for pruning the non-profitable product lines.

A company can lengthen its product line in two ways:

i. Line stretching 

Line stretching occurs when a company lengthens its product line beyond its current range. This can be accomplished in following ways: 

a. Down-Market stretch 

Down-Market stretch is undertaken when a company that has positioned itself in the middle market may like to introduce a lower-priced product. It may be due to any of the reasons mentioned below: 

- It notices strong growth potential as mass retailer 

- It may wish to tie up lower end competitors who might otherwise try to move up-market 

- It may find that the mid-market is stagnating or declining 

However, the company faces challenges in naming the brands while moving down-market. Further, there are risks involved in moving down-market related to positioning and pricing decisions. 

b. Up-Market stretch 

Up-Market stretch is undertaken when companies wish to enter the high end of the market for more growth, higher margins or simply to position themselves as full-line manufacturers. For example, car manufacturers such as Toyota introduce high end luxury cars (Lexus).

c. Two-way stretch 

In Two way stretch, companies operating in the middle market may decide to stretch their line in both directions. The objective is to seek leadership position in the given market.

ii. Line filling 

A product line may also be lengthened by adding more product items with in the current range. The motives of line filling may include reaching for incremental profits, trying to satisfy dealers who complain about lost sales because of missing items in the product line, trying to utilize excess capacity, trying to be a leading full line company and trying to fill gaps to keep out competitors etc. If over done, line filling may lead to cannibalization and consumer confusion as the company needs to differentiate the product item in the mind of the consumer.

A company needs to continuously modernize, rationalize and improve its product line by undertaking ‘New Product Development Programme (NPD) from time to time. 

(b) Discuss the concept of Product Life Cycle. Elaborate the various stages by taking the example of a shaving cream brand of your choice. What alternatives will you suggest for the brand during its decline stage and why? Offer your reasons. 

A company which introduces a new product naturally hopes that the product will contribute to the profits and provide consumer satisfaction for a long period of time. This however, does not always happen in practice. So, progressive organizations try to remain aware of what is happening throughout the life of the product in terms of the sales and the resultant profits.

The Introduction Stage

Let us start thinking from the very beginning about what happens when a new product is introduced in the market. Figure I give three optimistic alternatives as to the likely sales trend. If the product is well – designed, the sales would not increase slowly but would shoot up after some time as in (b). Rarely would there be a case where they would shoot up as in (c). Poorly designed product may experience a slow take off as shown in (a). Thus (b) represents a suitable sales trend for a new product. This stage is called the ‘introduction’ or ‘innovation’ stage in the life cycle of a product. Since the product has been just introduced and it is natural to expect that it will take some time before the sales pick up. There are some prerequisites for that too. The product must be brought to the notice of the customer. It must be available at the distribution/retail outlets and all this takes some time. Therefore, a likely picture of the sales trend in this stage would be (b) as given in Figure I.

In the introductory stage, there is likely to be no profits or more likely a loss. This loss may continue for some time depending on the market factors. Thus, the correct answer could have been either (iii) or (iv). It is because at this stage, considerable amount of funds are being devoted to promotional expenses with a view to generate sales while the volume of the sales is low (as already seen in the Figure I). Thus in the beginning, there is likely to be a loss and later on, as the sales grow the profit might accrue. 

The Growth Stage 

In case the product launched is successful, the sales must start picking up or rise more rapidly. The next stage is then reached which is known as the ‘growth stage’. Here the sales would climb up fast and profit picture will also improve considerably. This is because the cost of distribution and promotion is now spread over a larger volume of sales. As the volume of production is increased, the manufacturing cost per unit tends to decline. Thus, from the point of view of product strategy, this is a very critical stage.

The Maturity Stage 

It is too optimistic to think that sales will keep shooting up. At this stage, it is more likely that the competitors become more active. In case your product is a novel one, by now competition would have come out with a similar product in the market to compete with yours. Therefore, the sales are likely to be pushed downwards by the competitors while your promotional efforts would have to be increased to try and sustain the sales. Thus the sales reach a plateau. This is called the ‘maturity stage’ or ‘saturation’. At this point it is difficult to push sales up. With regard to the ‘profit’ picture, the profits are likely to stabilize or start declining as more promotional effort has to be made now in order to meet competition. Unless of course, you have the largest market share with your product and it needs no extra push in the market.

The Decline or Obsolescence Stage 

Thereafter the sales are likely to decline and the product could reach the `obsolescence' stage. Steps should be taken to prevent this obsolescence and avoid the decline. This decline that generally follows could be due to several reasons such as consumer tastes and preferences, improvement in technology and introduction of better substitutes. This is the stage where the profits drop rapidly and ultimately the last stage emerges. Retaining such a profit after this stage may be risky, and certainly not profitable to the organisation. 

POSSIBLE ALTERNATIVES IN DECLINE STAGE

Having considered the product life cycle and the inevitability of product decline, the question which comes to one's mind is what should be done to avoid or postpone this decline. Consider some of the following points to avoid decline, 

1). improve product quality 

2). add new product features resulting in extra benefits 

3). penetrate new market segments 

4). give incentives to distribution channels 

5). expand the number of your distribution channels 

6). Improve advertising and sales effort 

Perhaps, the answer lies in the word `innovation'. That is why it is sometimes said that innovation is the life-blood of marketing. Innovation can be in any of the 4 Ps of marketing. In connection with the product, it would mean quality improvement or improvement in features (e.g. automatic passenger car models) or even style improvements like in case of clothes where collars are changed from time to time because of the fashion life cycle. Ultimately a time may come when the product will have to be removed from the product mix. 

In practice, there is often a reluctance to do this, particularly from the senior members in the management hierarchy, who may have got very much attached to such products. This emotional approach has to be avoided while taking final decision. The product life cycle concept, therefore, emphasises that there should be a periodical review of the products. The profitability and financial viability of the product must be assessed constantly. Products which are difficult to sell affect even the morale of the salesmen, as well as the distribution outlets. The only excuse for retaining such products is when the unprofitable product is required to complete the product line to enable distributors to meet competition. Unless there is some strong reason, unprofitable products should be removed from the product mix of the organisation. Now let us consider the time period of this product life cycle. In case of some products, it is extremely short, whereas in others, it is very long. In case of fads, the life cycle is very brief. For example, in India the hula hoop'(is twirled around the waist, limbs or neck. They have been used by children and adults. The new plastic version was popularized in 1958 by the Wham-O toy company and became a fad) completed the cycle within a few months. As against this, the horse carriage is still running in cities like Mumbai, Kolkatta, and Mysore and in smaller cities of Bihar, U.P etc to a small extent, despite its being substituted with more sophisticated and better means of transportation. 

Question No. 1 - MMPC-006 - Marketing Management - MBA and MBA (Banking & Finance)

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.

1. Goods: Physical goods include agricultural commodities, fish, eggs, newspapers, chocolates, laptops, televisions and furniture.
2. 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.
3. 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).
4. 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. 
5. 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.  
6. 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.
7. 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. 
8. 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. 
9. 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. 
10. 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.

 

MMPC-006 - Marketing Management - MBA and MBA (Banking & Finance)

Solutions to Assignments

                            MBA and MBA (Banking & Finance)

MMPC-006 - Marketing Management

MMPC-006/TMA/JULY/2022

Note: Attempt all the questions and submit this assignment to the coordinator of your study centre. (Last date of submission for July 2022 session is 31st October, 2022 and for January 2023 session is 30th April, 2023).

Question No. 1.                                                                                 CLICK HERE

(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. 

(b) Discuss the various stages involved in the consumer buying process with reference to buying a smart phone brand of your choice. 

Question No. 2.                                                                                CLICK HERE

(a) Discuss the product line decisions that a firm should consider to pursue and consolidate its position in the face of competition. 

(b) Discuss the concept of Product Life Cycle. Elaborate the various stages by taking the example of a shaving cream brand of your choice. What alternatives will you suggest for the brand during its decline stage and why? Offer your reasons. 

Question No. 3.                                                                               CLICK HERE

(a) Discuss the various factors that affect the Pricing decisions in a firm. Explain the three cost oriented pricing approaches that a firm can use in pricing their products/services. 

(b) Enterprises are sensing the need to become more integrated in their marketing communication efforts. Discuss with an example where you have been a part of the integration process or may have come across the said integration. 

Question No. 4.                                                                                CLICK HERE

(a) What do you understand by the term Advertising? Discuss the various types of advertising and the major role that advertising plays in the promotion of a firms offering. Explain by taking one example each from a product and a service of your choice. 

(b) Explain the nature and role of Personal Selling. Discuss the steps involved in the selling process by taking an example of a financial software product for a medium enterprises

Question No. 5 - MMPC-005: Quantitative Analysis for Managerial Applications - MBA and MBA (Banking & Finance)

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                            MBA and MBA (Banking & Finance)

MMPC-005: Quantitative Analysis for Managerial Applications

MMPC-005/TMA/JULY/2022

Question No. 5. Write short notes on any two of the following:-   
(a) Mathematical Properties of Arithmetic Mean 

(b) Stratified Sampling 

Stratified sampling is more complex than simple random sampling, but where applied properly, stratification can significantly increase the statistical efficiency of sampling.

The concept: 

Suppose we are interested in estimating the demand of non aerated beverages in a residential colony. We know that the consumption of these beverages has some relationship with the family income and that the families residing in this colony can be classified into three categories-viz., high income, middle income and low income families. If we are doing a sampling study we would like to make sure that our sample does have some members from each of the three categories-perhaps in the same proportion as the total number of families belonging to that category-in which case we would have used proportional stratified sampling. On the other hand, if we know that the variation in the consumption of these beverages from one family to another is relatively large for the low income category whereas there is not much variation in the high income category, we would perhaps pick up a smaller than proportional sample from the high income category and a larger than proportional sample from-the low income category. This is what is done in disproportional stratified sampling. The basis for using stratified sampling is the existence of strata such that each stratum is more homogeneous within and markedly different from another stratum. The higher the homogeneity within each stratum, the higher the gain in statistical efficiency due to stratification. 

What are strata?: 

The strata are so defined that they constitute a partition of the population-i.e., they are mutually exclusive and collectively exhaustive. Every element of the population belongs to one stratum and not more than one stratum, by definition. This is shown in Figure II in the form of a Venn diagram, where three strata have been shown. A stratum can therefore he conceived of as a sub-population which is more homogeneous than the complete population-the members of a stratum, are similar to each other and are different from the members of another stratum in the characteristics that we are measuring. 

Proportional stratified sampling: 

Sampling Methods After defining the strata, a simple random sample is picked up from each of the strata. If we want to have a total sample of size 100, this number is allocated to the different strata-either in proportion to the size of the stratum in the population or otherwise. If the different strata have similar variances of the characteristic being measured, then the statistical efficiency will be the highest if the sample sizes for different strata are in the same proportion as the size of the respective stratum in the population. Such a design is called proportional stratified sampling and is shown in Table 4 below. 

Disproportional stratified sampling: If the different strata in the population have unequal variances of the characteristic being measured, then the sample size allocation decision should consider the variance as well. It would be logical to have a smaller sample from a stratum where the variance is smaller than from another stratum where the variance is higher. In fact, if

Stratified sampling in practice: 

Stratification of the population is quite common in managerial applications because it also allows to draw separate conclusions for each stratum. For example, if we are estimating the demand for a non-aerated beverage in a residential colony and have stratified the population based on the family income, then we would have data pertaining to each stratum which might be useful in making many marketing decisions. Stratification requires us to identify the strata such that the intra-stratum differences are as small as possible and inter-strata differences as large as possible. However, whether a stratum is homogeneous or not-in the characteristic that we are measuring e.g. consumption of non-aerated beverage in the family in the previous example-can be known only at the end of the study whereas stratification is to be done at the beginning of the study and that is why some other variable like family income is to be used for stratification. This is based on the implicit assumption that family income and consumption of non-aerated beverages are very closely associated with each other. If this assumption is true, stratification would increase the statistical efficiency of sampling. In many studies, it is not easy to find such associated variables which can be used as the basis for stratification and then stratification may not help in increasing the statistical efficiency, although the cost of the study goes up due to the additional costs of stratification. 

(c) Exponential Distribution 

Time between breakdown of machines, duration of telephone calls, life of an electric bulb are examples of situations where the Exponential distribution has been found useful. In the previous unit, while discussing the discrete probability distributions, we have examined the Poisson process and the resulting Poisson distribution. In the Poisson process, we were interested in the random variable of number of occurrences of an event within a specific time or space. Thus, using the knowledge of Poisson process, we have calculated the probability that 0, 1, 2 …. accidents will occur in any month. Quite often, another type of random variable assumes importance in the context of a Poisson process. We may be interested in the random variable of the lapse of time before the first occurrence of the event. Thus, for a machine, we note that the first failure or breakdown of the machine may occur after 1 month or 1.5 months etc. The random variable of the number of failures within a specific time, as we have already seen, is discrete and follows the Poisson distribution. The variable, time of first failure, is continuous and the Exponential p.d.f. characterises the uncertainty. If any situation is found to satisfy the conditions of a Poisson process, and if the average occurrence of the event of interest is m per unit time, then the number of occurrences in a given length of time t has a Poisson distribution with parameter mt, and the time between any two consecutive occurrences will be Exponential with parameter m. This can be used to derive the p.d.f. of the Exponential distribution.

 
If we assume that the occurrence of an event corresponds to customers arriving for servicing, then the time between the occurrence would correspond to the inter-arrival time (IAT), and m would correspond to the arrival rate. Exponential has been used widely to characterise the IAT distribution. The Exponential p.d.f. is also used for characterising service time distributions. The parameter 'm' in that case, corresponds to the service rate. We take up an example to show the probability calculations using the Exponential p.d.f. In the final section of this unit, we will be illustrating through an example, the use of the Exponential distribution in decision making.

Example:

The distribution of the total time a light bulb will burn from the moment it is first put into service is known to be exponential with mean time between failure of the bulbs equal to 1000 hrs. What is the probability that a bulb will burn more than 1000 hrs.

Solution:

 

(d) Time Series Analysis

Time series analysis is one of the most powerful methods in use, especially for short term forecasting purposes. From the historical data one attempts to obtain the underlying pattern so that a suitable model of the process can be developed, which is then used for purposes of forecasting or studying the internal structure of the process as a whole. We have already seen in earlier unit that a variety of methods such as subjective methods, moving averages and exponential smoothing, regression methods, causal models and time series analysis are available for forecasting. Time series analysis looks for the dependence between values in a time series (a set of values recorded at equal time intervals) with a view to accurately identify the underlying pattern of the data.

In the case of quantitative methods of forecasting, each technique makes explicit assumptions about the underlying pattern. For instance, in using regression models we had first to make a guess on whether a linear or parabolic model should be chosen and only then could we proceed with the estimation of parameters and model-development. We could rely on mere visual inspection of the data or its graphical plot to make the best choice of the underlying model. However, such guess work, through not uncommon, is unlikely to yield very accurate or reliable results. In time series analysis, a systematic attempt is made to identify and isolate different kinds of patterns in the data. The four kinds of patterns that are most frequently encountered are horizontal, non-stationary (trend or growth), seasonal and cyclical. Generally, a random or noise component is also superimposed.

We shall first examine the method of decomposition wherein a model of the time-series in terms of these patterns can be developed. This can then be used for forecasting purposes as illustrated through an example. A more accurate and statistically sound procedure to identify the patterns in a time-series is through the use of auto-correlations. Auto-correlation refers to the correlation between the same variable at different time lags and was discussed in Unit 18. Auto-correlations can be used to identify the patterns in a time series and suggest appropriate stochastic models for the underlying process. A brief outline of common processes and the Box-Jenkins methodology is then given. 

Question No. 3 - MMPC-005: Quantitative Analysis for Managerial Applications - MBA and MBA (Banking & Finance)

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                            MBA and MBA (Banking & Finance)

MMPC-005: Quantitative Analysis for Managerial Applications

MMPC-005/TMA/JULY/2022

Question No. 3. What do you understand by Primary Data? What are the various methods of collecting primary data? Also, mention what points to be kept in mind while designing the questionnaire?

Data used in statistical study is termed either “Primary” or “secondary” depending upon whether it was collected specifically for the study in question or for some other purpose. When the data used in a statistical study was collected under the control and supervision of the investigation, such type of data is referred to as “Primary data”. When the data was not collected by the investigator, but is derived from other sources then such data is referred to as “secondary data”.

The difference between primary and secondary data is only in terms of degree. For example, data which is primary in the hands of one become secondary in the hands of another. Suppose in investigator wants to study the working conditions of labour in a big industrial concerned. If he collects the data himself or through his agent, then this data is referred to as primary data. But if this data is used by someone else, then this data becomes secondary data.

METHOD OF COLLECTING PRIMARY DATA

Primary data may either be collected through the observation method or through the questionnaire method. In the observation, the investigator asks no questions, but he simply observes the phenomenon under consideration, and records the necessary data. Sometimes individuals make the observation; on other occasion, mechanical and electronic devices do the job. 

In the observation method, it may be difficult to produce accurate data. Physical difficulties on the part of the observer may result in errors. Because of these limitations in the observation method, the questionnaire method is most widely used for collecting data. In the questionnaire method, the investigator draws up a questionnaire containing all the relevant questions which he wants to ask from his respondents, and accordingly records the responses. Questionnaire method may be conducted through personal interview, or by mail or telephone.

Personal Interviews In this method the interviewer sits face-to-face with the respondent and records his responses. In this method, the information is likely to be more accurate and reliable because the interviewer can clear up doubts and cross-checks the respondents. This method is time consuming and can be very costly if the number of respondents is large and widely distributed.

Mail Questionnaire In this method a list of questions (questionnaire) is prepare and mailed to the respondents. The respondents are expected to fill in the questionnaire and send it back to the investigator. Sometimes, mail questionnaire are placed in respondents’ hands through other means such as attaching them to consumers’ products or putting them in newspapers or magazines. This method can be easily adopted where the field of investigation is very vast and the respondents are spread over a wise geographical area. But this method can be adopted only where the respondents are literate and can understand written question and answer them.

Telephone  In this method the investigator asks the relevant questions from the respondents over the telephone. This method is less expensive but it has limited application since only those respondents can be interviewed who have telephones; moreover, very few questions can be asked on telephone 

 

The questionnaire method is a very efficient and fast method of collecting data. But it has a very serious limitation as it may be extremely difficult to collect data on certain sensitive aspects such as income, age or personal life details, which the respondent may not be willing to share with the investigator. This is so with other methods also different people may interpret the questions differently and consequently there may be errors and inaccuracies in data collection.

DESIGNING OF QUESTIONNAIRE

The success of collecting data through a questionnaire depends mainly on how skillfully and imaginatively the questionnaire has been designed. A badly designed questionnaire will never be able to gather the relevant data. In designing the questionnaire, some of the important points to be kept in mind are: 

1. Covering letter : Every questionnaire should be contain a covering letter. The covering letter should highlight the purpose of study and assure the respondent the all responses will be kept confidential. It is desirable that some inducement or motivation is provided to the respondent for better response. The objectives of the study and questionnaire design should be such that the respondent derives a sense of satisfaction through his involvement. 

2. Number of questions should be kept to the minimum: The fewer the question, the greater the chances of getting a better responses and having all the questions answered. Otherwise the respondent may feel disinterested and provide inaccurate answers particularly towards the end of the questionnaire. Informing the question, the investigator has to take into consideration several factors such as the purpose of study, the time and resources available. As a rough indication, the number of questions should be between 15 to 40. In case the number of questions is more than 25, it is desirable that the questionnaire be divided into various part to ensure clarity. 

3. Questions should be simple, short and unambiguous: The questions should be simple, short, easy to understand and such that their answers are unambiguous. For example, if the question is ‘Are you literate? The respondent may have doubts about the meaning of literacy. To some literacy may mean a university degree whereas to others even the capacity to read and write may mean literacy. Hence it is desirable to specify whether you have passed (a) high school (b) graduation (c) post graduation etc. Questions can be of Yes/No type, or of multiple choice depending on the requirement o the investigator. Open-ended questions should generally be avoided. 

4. Questions of sensitive or personal nature should be avoided: The questions should not be such as would require the respondent to disclose any private, personal or confidential information. For example, questions relating to sales, profits, material happiness etc. should be avoided as far as possible. If such questions are necessary in the survey, an assurance should be given to the respondent that the information provided shall be kept strictly confidential and shall not be used at any cost to their disadvantage. 

5. Answers to questions should not require calculations: The questions should be framed in such a way that their answers do not require any calculations.

6. Logical arrangement Collection of Data The questions should be logically arranged so that there is a continuity of responses and the respondent does not feel the need to refer back to the previous questions. It is desirable that the questionnaire should begin with some introductory questions followed by vital questions crucial to he survey and ending with some light questions so that the overall impression of the respondent is a happy one. 

7. Cross-check and Footnotes: The questionnaire should contain some such questions which act as a cross-check to the reliability of the information provided. For example, when a question relating to income is asked, it is desirable to include a question : “are you an income tax assessee?”

For the purpose of clarity, certain questions which might create a doubt in the mind of respondents, it is desirable to give footnotes. The purpose of footnotes is to clarify all possible doubts which may emerge from the questions and cannot be removed while answer them. For example, if a question relates to income limit like 1000-2000, 2000—3000; etc., a person getting exactly Rs. 2,000 should know in which income class he has to place himself.