IGNOU ASSIGNMENT SOLUTIONS
MASTER OF COMMERCE (MCOM - SEMESTER 2)
MCO-06 - MARKETING MANAGEMENT
MCO-06/TMA/2024-2025
Question No. 1
a) Describe the profile of a company which has adopted the marketing concept.
b) Classify the different types of intermediaries and provide examples of each type in the context of a consumer goods market.
Answer: (a) part
The Profile of a Company That Has Adopted the Marketing Concept
In today's competitive market environment, companies are striving to adopt strategies that focus not
only on selling products but also on building long-term relationships with customers. One such
strategy is the marketing concept. This philosophy asserts that a company should prioritize
understanding the needs and wants of its target customers and deliver satisfaction more effectively
and efficiently than competitors. Here's a detailed profile of a company that has fully embraced the
marketing concept.
1. Customer-Centric Approach
At the heart of the marketing concept is the belief that a business exists to serve customers. A
company that has adopted this concept organizes its entire structure around the goal of meeting
customer needs and exceeding their expectations.
- Understanding Customer Needs: This company regularly conducts market research, surveys, and customer feedback programs to gain deep insights into its customers. They invest in tools like CRM (Customer Relationship Management) software and data analytics to better understand purchasing patterns, preferences, and pain points.
- Customer Segmentation: Such a company does not view its customers as a homogeneous group but instead segments them based on factors such as demographics, psychographics, buying behavior, and geography. By identifying and targeting specific segments, the company can tailor its products, marketing campaigns, and communications to better meet the needs of different groups.
- Personalization: Personalization is a core element in this company's marketing strategy. Whether it is through personalized emails, product recommendations, or tailor-made customer experiences, the company seeks to make each customer feel valued and understood.
A company that has embraced the marketing concept ensures that all departments work together to
support marketing activities. This is known as integrated marketing, and it means that all areas of the
business-from R&D and production to sales and customer service-are aligned with the marketing
strategy.
- Cross-Department Collaboration: The marketing team collaborates closely with other departments, such as product development, to ensure that the products created meet customer demands. This coordination ensures that marketing campaigns can successfully highlight the product features that are most relevant to the target audience.
- Consistency in Messaging: Whether through social media, advertisements, email campaigns, or in-store promotions, the company ensures consistency in its messaging. The marketing message resonates across all touchpoints and reinforces the brand's value proposition.
- Omnichannel Strategy: To cater to modern consumers who shop both online and offline, the company invests in an omnichannel marketing strategy. This ensures a seamless customer experience whether they are interacting with the company via mobile apps, websites, or physical stores.
3. Focus on Long-Term Relationships
Unlike traditional companies that focus on short-term sales, a company that has adopted the
marketing concept aims to build lasting relationships with its customers.
- Customer Retention Strategies: Retention is just as important, if not more so, than acquisition for this company. They employ loyalty programs, reward systems, and ongoing communication to keep customers engaged and satisfied.
- After-Sales Support: The company understands that its job doesn't end once a sale is made. They offer excellent post-purchase support, which includes easy returns, 24/7 customer service, warranties, and proactive follow-up with customers to ensure they are satisfied with their purchase.
- Customer Feedback Loop: By keeping an open dialogue with customers, the company continuously improves its offerings. They take customer complaints seriously and resolve them quickly to ensure that customers feel valued.
4. Sustainable Profitability Through Customer Satisfaction
While profitability remains a core business goal, a company that has embraced the marketing
concept believes that profits will come naturally when customer satisfaction is prioritized. Instead of
being driven solely by short-term financial goals, the company focuses on the long-term benefits of
fostering customer loyalty.
- Value Proposition: The company offers a compelling value proposition, where customers feel that the quality, price, and overall experience they get from the product or service are worth their investment. They don't compete merely on price but instead emphasize the value customers derive from their offerings.
- Lifetime Customer Value (LCV): Rather than focusing on individual transactions, this company looks at the long-term value each customer brings. They measure success not just in terms of immediate sales but in terms of LCV, ensuring they cultivate relationships that lead to repeat business and referrals.
5. Ethical and Socially Responsible Practices
A company that has embraced the marketing concept also often engages in ethical marketing
practices and takes corporate social responsibility (CSR) seriously.
Ethical Marketing: The company avoids deceptive or manipulative marketing tactics. They
provide honest information about their products and services and are transparent about their
business practices.
- Sustainability Efforts: In an era where consumers are increasingly concerned with sustainability, this company adopts eco-friendly practices. They may focus on reducing their carbon footprint, using sustainable materials, or partnering with ethical suppliers. Their marketing emphasizes these efforts, thus attracting environmentally conscious consumers.
- Community Engagement: The company is actively involved in the communities it serves. Whether through charitable donations, sponsoring local events, or encouraging employee volunteerism, the company demonstrates that it cares about more than just profits. This engagement strengthens their relationship with customers and positions the brand as a responsible corporate citizen.
6. Adaptation and Innovation
To stay relevant and competitive in a dynamic market environment, a company that follows the
marketing concept is highly adaptive and innovative. They understand that customer needs change,
and they are always prepared to evolve.
- Innovation in Product Development: The company continually invests in R&D to introduce innovative products and services. However, instead of innovation for its own sake, the company bases its innovation on customer feedback, market trends, and future demands.
- Agile Marketing Strategies: Such a company is quick to adapt its marketing strategies based on real-time data and customer feedback. Whether it's shifting marketing channels or rebranding efforts, they are agile and ready to meet the evolving needs of their target audience.
- Embracing Technology: To remain ahead, the company utilizes modern technology such as Al- driven marketing tools, chatbots for customer service, and data analytics for personalized marketing campaigns. By staying at the forefront of technological advancements, they ensure they can efficiently serve their customers.
7. Employee Engagement and Training
Employees are critical to the success of a company that prioritizes the marketing concept. Engaged
employees who believe in the company's mission and values are more likely to provide excellent
service and build strong customer relationships.
- Training Programs: The company invests in training its employees on customer service, communication skills, and product knowledge. Employees are equipped to interact with customers positively and solve their problems efficiently, contributing to overall customer satisfaction.
- Employee Satisfaction: Just as the company cares for its customers, it also ensures that employees are satisfied and motivated. Through competitive compensation, recognition programs, and a positive work environment, the company fosters a culture where employees are eager to contribute to its success.
- Empowerment and Accountability: Employees are empowered to make decisions that enhance the customer experience. They are encouraged to go the extra mile for customers, and their input is valued in improving company processes and strategies.
8. Competitor Awareness
While customer needs are the primary focus, a company that has adopted the marketing concept
does not lose sight of its competitors.
- Competitive Intelligence: The company keeps a close watch on its competitors' products, marketing strategies, pricing, and customer feedback. By staying aware of market dynamics, the company can identify gaps in the competition and capitalize on them to better meet customer needs.
- Differentiation Strategy: The company constantly seeks ways to differentiate itself from competitors. Whether through product innovation, superior customer service, or unique branding, the company ensures that its value proposition remains distinct and attractive to its target market.
Conclusion
A company that has fully adopted the marketing concept is one that places the customer at the
center of its business. It achieves success by understanding customer needs, providing consistent
value, and building long-term relationships. The company integrates all of its functions, from product
development to marketing and customer service, to align with the goal of delivering superior
customer satisfaction. In doing so, it not only achieves profitability but also earns a strong and lasting
place in the market.
Answer: (b) part
Intermediaries are persons or businesses who act as go-betweens for parties in investment transactions, commercial marketing transactions, discussions, insurance, and so on. They are frequently referred to as consultants or brokers, and they specialize in a given field.
They provide all necessary information about a product to clients while also streamlining a company's procedures. In other terms, intermediates are third-party agents or persons who act as go-betweens for two parties in a transaction.
Intermediaries Meaning
Intermediaries refer to individuals or entities that act as intermediates or middlemen between two parties (producers and consumers). They play a pivotal role in the distribution of goods and services, facilitating the exchange process.
In a simpler sense, these are like connectors. They connect the dots between the people who make products or provide services and the people who want to buy them.
Types of Marketing Intermediaries
There are four primary types of traditional intermediaries:
Brokers and Agents:
These intermediaries earn commissions by selling products and services. They're authorized to provide information about products on behalf of manufacturers but don't take ownership of the items they sell. Their major purpose is to link buyers and sellers, like real estate brokers who receive commission for successful agreements without possessing the properties they sell.
Wholesalers and Resellers:
Wholesalers purchase goods in bulk from manufacturers and then resell them to retailers or other businesses. They own the products they buy and often offer additional services like order processing and storage. Some wholesalers also handle promotional activities.
Distributors:
Manufacturers select distributors to deliver their products to wholesalers or retailers in various locations. Distributors operate across different businesses and regions, offering services such as inventory maintenance, credit extensions, and product delivery to wholesalers.
Retailers:
Retailers operate as intermediate between wholesalers and end consumers. They obtain a range of commodities from wholesalers and offer them to customers in smaller amounts from a single location.
Types of Financial Intermediaries
Underwriter:
Underwriters, often associated with companies or organizations, specialize in managing investments and engaging with potential investors across various schemes. In India, for example, insurance companies can serve as underwriters, charging fees for providing insurance services under specific terms and conditions.
Merchant Banks:
Merchant bankers are institutions that invest funds in companies in exchange for ownership shares, granting them influence in corporate matters. They act as intermediaries connecting large organizations with external markets. In India, notable examples of merchant bankers include the State Bank of India, ICICI Bank, and Punjab National Bank.
Portfolio Managers:
Portfolio managers, whether individuals, groups, or institutions, oversee investments in the stock market. They meticulously plan investments, and trade in stocks, securities, bonds, derivatives, and mutual funds to maximize returns.
Debenture Trustees:
Registered with the Securities and Exchange Board of India (SEBI), debenture trustees operate under SEBI Guidelines, 1993. They serve as vital links between debenture holders and organizations whose debentures have been purchased.
Sub Broker:
Sub-brokers, although not directly affiliated with stock exchanges, are knowledgeable individuals authorized to act on behalf of trading members. They assist both trading members and investors in matters related to securities dealings, serving as valuable intermediary in the trading process.
Stockbroker:
Stockbrokers play a pivotal role in the stock market by facilitating the trading of securities. They charge specific fees for their services and are highly effective due to their in-depth knowledge of the stock market.
Question No. 2
Explain the concept of market segmentation and why it is important for businesses. Identify and describe three different market segmentation strategies and provide an example of a company that uses each strategy effectively.
Answer:
Concept of Market Segmentation:
Market segmentation is the practice of dividing your target market into approachable groups. Market segmentation creates subsets of a market based on demographics, needs, priorities, common interests, and other psychographic or behavioural criteria used to better understand the target audience.
By understanding your market segments, you can leverage this targeting in product, sales, and marketing strategies. Market segments can power your product development cycles by informing how you create product offerings for different segments like men vs. women or high income vs. low income.
The Importance of Market Segmentation
Market segmentation is important because it can help you to define and better understand your target audiences and ideal customers. If you’re a marketer, this allows you to identify the right market for your products and then target your marketing more effectively. Similarly, publishers can use market segmentation to offer more precisely targeted advertising options and to customize their content for different audience groups.
Say, for example, you’re a marketer who’s advertising a new brand of dog food. You could split an audience into segments based on whether they have a dog. You could then segment that audience further based on what kind of dog they have and then show them ads for food formulated for their dog’s breed. A publisher could use this same information to show content about dogs to people who have or like dogs.
Market segmentation allows you to target your content to the right people in the right way, rather than targeting your entire audience with a generic message. This helps you increase the chances of people engaging with your ad or content, resulting in more efficient campaigns and improved return on investment (ROI).
Types of market segmentation
1. Demographic segmentation
As one of the most common types of segmentation, demographic segmentation refers to splitting up an audience into subgroups based on variables like age, gender, occupation, income level, marital status, nationality and more.
It is perhaps the most obvious and simplified type of segmentation. Statistical data about people is relatively easy to obtain using various market research methods, like a demographic survey. This takes the form of a questionnaire or an online form, allowing you to extract specific data about your audience.
When writing your demographic survey you can choose between open-ended and closed-ended questions. You can keep your intention narrow in a question like “How old are you?” or broaden your results with the query “What’s your favorite hobby,” depending on how much you’d like to know about your clientele.
Some businesses or products cater to certain demographics based on at least one trait. A personal care store, for example, may sell one shampoo for men and another for women. Alternatively, some brands are designed with a narrow demographic in mind - such as grooming products brand targeting stylish young males.
2. Behavioral segmentation
This type of segmentation is about knowing your customer’s attitude and actions toward your brand. It allows you to divide audiences by behavior and decision-making patterns.
Types of customer behavior to consider include:
- Shopping habits: What they are purchasing
- Brand loyalty: How often are they returning to your brand
- Usage rate: Are they using your service a lot or not at all
- Benefits sought: What needs are being met by the product or service
- Readiness to convert: Where are they in the marketing funnel; do they have awareness, interest, consideration or intent to convert
For example, a yoga studio could offer a loyalty program toward more sessions as a way to enforce engagement with the brand. Alternatively, if most consumers only have time to read over the weekend, bookstores could incentivize their purchases with special weekend sales.
Behavioral segmentation variables are often collected from a person’s digital footprint. This is information that is gathered while visitors browse a website, consisting of their online actions and the way they interact with the site. This sort of insight can be accessed using different tools, such as Google Analytics.
3. Geographic segmentation
This type of segmentation splits up your market based on location. Identifying users due to their geographical settings, such as by country, state or zipcode, enables you to tailor your message around regional interests, languages, climate or cultural norms.
If you’re targeting customers who live in colder climates, for example, they are more likely to show interest in ads featuring warmer clothes than those living on a tropical island.
Depending on the area you’re targeting, you may need to build a multilingual website or localize your visual content. Images carry different meanings for different cultures so make sure that you’re sending the right message.
4. Psychographic segmentation
Less tangible than demographic or geographic segmentation, this category deals with characteristics that are more emotional. They give you insight into how consumers decide to buy a product or book a service, what are the motives behind those purchases and which preferences they may have toward a brand.
Psychographic characteristics consist of personality traits, beliefs, opinions and lifestyles. Taking into account a customer’s values, and not just their demographics and geographical location, can lead to a better understanding of their needs and behavior.
For example, someone who leads a healthy lifestyle may not have the same values as their work colleague who doesn’t. Though these two individuals share at least one demographic trait - occupation - they will ultimately make dissimilar purchasing decisions and therefore must be approached differently.
There are several methods you can use in order to obtain this level of insight of your target audience. These include focus groups, surveys, interviews and tests you can run among your market. One common methodology is A/B testing, which compares similar versions of an interface design with only one variant between the two, to measure which of the versions performs better.
How to conduct your own market segmentation
1. Analyze your customers
The first step in creating your own market segmentation is to analyze your existing customer base. This process will help you create your segments of consumers who share similar traits and responses. There are several ways to perform your customer analysis:
- Interview your users: Building products around the needs of your users is at the heart of your business, so why not go straight to the source? Conducting user interviews gives you a deep understanding of how customers feel in relation to your brand. Asking the right questions will give you the information necessary to set up all four types of market segmentation.
- Use your own business data: You may have already gathered some useful details about customers as part of your day-to-day interactions, from your mailing list to your clients’ invoices. Using this data, you’ll be able to find patterns that indicate what customers are buying time and again, where they are coming from, and more.
- Check in with website analytics: Your website is a great source of data about users who’ve navigated through your pages. This can be turned into powerful knowledge for your business, with the help of website analytics. These platforms are a great way to gather insights about visitors’ online actions, from the number of users on each page, to the average time one has spent on your site and so on.
2. Create a buyer persona
The next step is to put a face on the data you’ve gathered. Creating a buyer persona, or a fictional character that serves as the mold of your ideal customer, allows you to visualize your target market. This in turn will help you maximize your marketing efforts since you already know precisely who you want to attract.
When writing down your buyer persona, try to create a fictitious name for your persona to give them a realistic depth. Add demographic details, like age and gender, and give them an image for visual context.
3. Segment your data
At this stage, you can begin to sort the data into segments. A good practice is to ask yourself questions such as “Is the segment attainable to me?” or “Will this segment be around long enough to want to invest in?”
These initial questions can also help you extract additional market segment opportunities, as well. A good practice is to think back to how you built your brand in order to pin down what sets you apart from your competitors, or what segment is currently not being served.
4. Understand your potential segment
You might want to check that you’re on the right track before kicking off a marketing campaign. Verify whether your segmented market will be interested in your offerings by doing a little research. By looking at how your audiences search for the terms you’re targeting, you will be able to measure whether your business efforts line up with their needs.
Question No. 3
Write short notes on the following:
a) Price determination
b) Relationship marketing
c) Freud's Psychoanalytical theory of personality
d) Publicity strategies
Answer: (a) part
Price determination is the process by which market prices of goods and services are determined. It includes the determination of the quantity demanded at each price point, the determination of the quantity supplied at each price point, and the determination of the equilibrium price.
There are three primary factors that affect the determination of market prices: demand, supply, and competition. Demand is the quantity of a good or service that consumers are willing and able to buy at a specific price. Supply is the quantity of a good or service that producers are willing and able to sell at a specific price. Competition is the force that drives producers to produce as much as possible and to sell their products at the lowest possible prices.
The demand for a good or service is affected by a number of factors, including price, availability, quality, and substitutes. The supply of a good or service is affected by production costs, including wages, raw materials, and other inputs. The equilibrium price is the price at which the quantity demanded and the quantity supplied are equal.
Market prices are determined through a process known as market clearing. Market clearing occurs when all buyers and all sellers are able to buy or sell at the same price and no one is willing to buy or sell more than they are able to sell. When market clearing occurs, it results in an equilibrium price being established.
Market clearing can be disrupted by a number of factors, including changes in demand or supply, changes in prices, and government intervention. Changes in demand or supply can be caused by changes in economic conditions, such as an increase in unemployment or an increase in inflation, or by changes in technology. Changes in prices can be caused by changes in the value of money or in the relative prices of different goods and services. Government intervention can be caused by changes in taxation or regulation.
Types of Price Determination Strategies
price determination strategies vary depending on the type of market in which the product or service is being sold. In a competitive market, sellers must compete for customers by offering the best price. In a monopoly market, one seller is usually in control and can set the prices without competition.
There are three main types of price determination strategies in a market:
1. single-Price strategy
In a single-price strategy, the seller sets one price for all buyers. This is the most common type of price determination strategy and is used in a competitive market. In a single-price strategy, the seller sets one price for all buyers. This is the most common type of price determination strategy and is used in a competitive market.
2. Dual-Price Strategy
In a dual-price strategy, the seller sets two prices for different buyers. The first price is lower than the second price. This is used in a monopolistic market where the seller wants to attract some buyers at the lower price and retain other buyers at the higher price. In a dual-price strategy, the seller sets two prices for different buyers. The first price is lower than the second price. This is used in a monopolistic market where the seller wants to attract some buyers at the lower price and retain other buyers at the higher price.
3. Price Discrimination strategy
In a price discrimination strategy, the seller charges different prices to different buyers based on their characteristics. This is used in a market with many sellers and few buyers. It is also used in a monopoly market where the seller wants to separate different groups of buyers (such as high-volume users from low-volume users). In a price discrimination strategy, the seller charges different prices to different buyers based on their characteristics. This is used in a market with many sellers and few buyers. It is also used in a monopoly market where the seller wants to separate different groups of buyers (such as high-volume users from low-volume users).
Answer: (b) part
Relationship marketing is a strategic marketing approach that prioritizes developing long-lasting relationships with clients to encourage recurring business and nurture consistent client loyalty. This approach exceeds transactional exchanges and focuses on developing deep emotional connections with clients via channels like providing exceptional client service, actively seeking and incorporating client feedback, establishing loyalty programs, sponsoring events, and interacting with clients on social media. Relationship marketing focuses on creating long-lasting connections with customers, as opposed to transactional marketing, which is more concerned with increasing individual sales. A higher client lifetime value, less money spent on marketing and promotion, and the development of strong customer loyalty are some benefits of relationship marketing.
Importance of Relationship Marketing
1. Increased Sales Volume: Effective relationship marketing fosters satisfaction and leverages it for increased sales. By delivering an exceptional customer experience, businesses create a conducive environment for upselling and cross-selling. Satisfied customers are more receptive to exploring additional offerings, leading to a substantial boost in overall sales volume. It capitalizes on existing customer relationships and contributes to revenue growth through expanded transactions.
2. Cost-Effective Advertising: Investing in relationship marketing pays off by reducing the necessity for constant and resource-intensive customer acquisition campaigns. As satisfied customers are more likely to remain loyal, the need for aggressive marketing to attract new customers diminishes. This shift toward customer retention significantly lowers advertising costs, permitting firms to allocate resources more efficiently, whether toward improving products and services or exploring new market opportunities.
3. Enhanced Profit Margins: Customer satisfaction becomes a powerful tool in maintaining healthier profit margins. Satisfied customers are generally more accepting of prices and are willing to pay a fair price for the quality they receive. It minimizes the need for constant price negotiations and permits firms to command prices that reflect the value of their offerings, contributing to increased profitability and financial sustainability.
4. Building Brand Image: A satisfied customer is a brand ambassador, positively influencing their social circles. Word-of-mouth recommendations from contented customers are invaluable in building a strong and positive brand image. This organic promotion not only enhances credibility but also creates a virtuous cycle where satisfied customers become advocates, further amplifying the brand's reach and reputation.
5. Customer Retention Focus: Relationship marketing places a strategic emphasis on customer retention as a key component of sustained success. Acquiring customers is just the beginning; maintaining an ongoing relationship by consistently meeting their needs and providing value ensures repeat business. This focus on customer satisfaction and loyalty becomes a foundation for long-term success, as businesses transition from transactional interactions to fostering enduring connections with their clientele.
6. Competitive Advantage: Cultivating customer loyalty through relationship marketing offers a distinct competitive advantage. A loyal customer base translates into a steady revenue stream, as customers prefer the convenience and reliability of a single source for their needs. This preference reduces the likelihood of customers exploring alternatives and positions the business as a trusted and preferred choice, creating a formidable barrier for competitors in the market.
Answer: (c) part
Freudian motivation theory posits that unconscious psychological forces, such as hidden desires and motives, shape an individual's behavior, like their purchasing patterns. This theory was developed by Sigmund Freud who, in addition to being a medical doctor, is synonymous with the field of psychoanalysis.
An iceberg model is often used to describe Freud’s understanding of the mind. The conscious is the tip of the iceberg, barely above water. It is composed of our thoughts and perceptions. It is everything of which we are aware. The preconscious is just under the water. It is composed of our memories, stored knowledge, fears, and doubts. We are not consciously aware of the preconscious, but we can pull information from it into our conscious at any time. The unconscious is the largest part deep beneath the water. The unconscious is composed of our selfish motives, aggressive desires, and our socially unacceptable desires. According to Freud, the composition of the unconscious are the underlying influences which drive our conscious actions.
Sigmund Freud proposed that every individual’s personality is the product of struggle among three interacting forces – the id, the ego and superego.
The id, the ego and the superego are three theoretical constructs, in terms of whose activity and interactions, the mental life can be described and complex human behaviors formed. Hence, these three components of the personality structure are functions of the mind rather than parts of the brain.
Freudian motivation theory is frequently applied to a number of disciplines, including sales and marketing, to help understand the consumer's motivations when it comes to making a purchasing decision. More precisely, Freud's theory has been applied to the relationship between the qualities of a product, such as touch, taste, or smell, and the memories that it may evoke in an individual. Recognizing how the elements of a product trigger an emotional response from the consumer can help a marketer or salesperson understand how to lead a consumer toward making a purchase.
The Freudian motivation theory explains the sales process in terms of a consumer fulfilling conscious, functional needs, such as blinds to cover a window, as well as unconscious needs, such as the fear of being seen naked by those outside. A salesperson trying to get a consumer to purchase furniture, for example, may ask if this is the first home that the consumer has lived in on their own. If the consumer indicates yes, this may prompt the salesperson to mention how the furniture is warm or comfortable, triggering a feeling of safety.
Freud believed that the human psyche could be divided into the conscious and unconscious mind. The ego, the representation of the conscious mind, is made up of thoughts, memories, perceptions, and feelings that give a person their sense of identity and personality. The id, which represents the unconscious mind, is the biologically determined instincts that someone possesses since birth. And the superego represents the moderating factor of society's traditional morals and taboos as seen in the fact that not every person acts on impulse. These ideas can help market researchers determine why a consumer has made a particular purchase by focusing on their conscious and unconscious motivations, as well as the weight of societal expectations.
Answer: (d) part
In today’s world, image and reputation of a business is critically significant than past due to increased market competition and also, with developed technologies, the consumers can be more easily evaluate to particular brand of product or organization. Therefore, it is essential that businesses and organizations have understanding of the effective public relation strategy for healthy and positive brand development. Successful public relation can be give to organization as a good image, and thus publicity is significant role in terms of successful public relation. Because, publicity can be helps gain public awareness and build relationship between products and consumers.
The publicity can be defined in many interpretations. Publicity involves supplying information that is factual, interesting, and newsworthy to media not controlled by you, such as radio, television, magazines, newspapers, and trade journals. It can be both positive and negative to one’s business or organization and thus, it is significant to be aware of what strategies can support to either improve as a positive or reduce a negative way, rather than just simply analysis how they are addressed. Due to organization crises frequently result in negative publicity, threatening the image of the company, the company should have an effective tactics for reduce the impact. Furthermore, organization need to try achieve positive publicity for enhance their healthy image and reputation for a successful within market competition. As a result, crisis management is mostly important tactic, which could be positive publicity or an overcome in a negative way, and once overcome in a negative way; publicity has essentially support public relation endeavors.
Positive publicity is a main issue when organizing new event or product because it allows to company send a message out to wider audience in effective way, rather than reach the message personally. In a further extend, it is normally acknowledged to be more credible and more influential than company-controlled communications. In this sense, therefore, it is vital to know which strategies can be support to maintain positive publicity.
Firstly, organization has to become familiar with the wide range of publicity tools available with them. It can be feature articles, news releases, interviews, press conferences and special events. Besides, these days people more familiar with online sources such as online news reports, blog posts, Facebook updates, YouTube videos and Twitter entries. For instance, good news may spread to wider audience via online sources and its may potentially create healthy public image. Therefore, select effective publicity tool is most important point that can be achieve positive publicity.
In addition, the media can be an effective publicity tool if it is used correct for building healthy image between an organization and the community. The media is one of the main avenues value of the media in influencing or bringing a message to the notice of the greatest number of people in the shortest time. With developed technologies, most of consumers are able to interact with at least one source of media tool and thus, using effective media is opportunities organization to communicate with consumers. For instance, consumer may evaluate what the organization say and what they do via growth of media.
Secondly, organization needs to develop making a publicity plan for presenting their message to the public via the media. A good publicity planning will help the organizations come out ahead in the competition for space in publications and air time. In a further extend, the organizations can get a lot of coverage for free if it is done correctly and sent to targeted media. Effective publicity plan can be including as determine goal of event or product and also decide what message send to public. It may create public awareness that the event or product, build a stronger reputation within one’s community or simply to introduce organization to the media and public. After knowing organization’s goal, it enables to determine right target audiences which deliver the message to people who will be interest the message. Therefore, effective publicity plan is most important strategic for maintain positive publicity, and its lead to good image of one’s business. As a result positive publicity can be establish and maintain goodwill and mutual understanding between organization and its publics. In other words, effective publicity supports public relation as successfully.
Make Lower and Prevent Negative Publicity
Look at the reality; it is really obvious, that one little mistake, rumor or gossip can make a serious damage one’s business image even though the company is a market leader. This can be regarded as negative publicity. Negative publicity is the adverse publicity that an organization may incur due to a particular reason, which may lead to potentially disastrous consequences. Like this, negative publicity has the possible to injury corporate image and reputation. This is due to its high credibility as well as the negativity effect, a tendency for negative information to be weighted more than positive information in the evaluation of people, objects, and ideas. Because the media has a preference for reporting bad news, thus companies are more likely to receive bad press rather than positive press. Furthermore, blog, online forum and talk radio and uncontrolled media, it is easier than past, to damage organization image and reputation. Therefore, It is compulsory know that how to organization can diminish the negative publicity, and get better their image in the public.
Negative publicity can be the result of a mishandled crisis. In a further extend, negative publicity is often occurs due to wrong response from the crisis. Perrier, for example, was unable to overcome negative publicity when top management hesitated in the crisis-solved process. Traces of benzene were found in the company’s bottled water in 1990, however top management reassured the public that it was necessary to recall contaminated bottles only in North America. The crisis continued when scientists found benzene in bottled water being sold in Europe. Finally, media discovered, and reported, that benzene-tainted product had been sold all over the world for months. The media questioned Perrier’s integrity and concern for public safety, and the company lost its dominant position in the market place; it has been unable to rebuild its reputation due to mishandled the crisis. This may suggest that effective crisis management is necessary for a reduce damage organization image or reputation. Effective crisis management can be regarded as careful planning, research and training, which can be overcome negative publicity. As Perrier crisis publicity suggests that, consumers need honest answer and they need them fast. Therefore, the company should have good crisis planning for deal with negative publicity. The plan can be include recall the all the products and make an apology to public.
Moreover, dedicate a team to keep a sharp eye on all fronts, including the Internet which involves blog, online forum and search engine ranking. This can be excellent strategy for prevent from negative publicity. For instance, negative movie review on the magazine or online forum, it may badly influence to the movie itself and also production company, because it leads to lose consumers’ attention and also possibly to decrease sale a movie ticket. Like this, company need keep look at any comments or developments that might turn ugly. Although it can never be all-encompassing, it’s better to be aware of possibilities than being caught unawares.
Develop Optimal Communication Plan
In addition, it is necessary develop optimal communication strategy for reduce negative publicity. For reduce negative publicity, the company may training about how to communicate with the media press and the public about the crisis that is happening. A classification of communication strategies that can be employed during a crisis event to manage the image of the affected organization. The company need well prepared communication plan for interview or presentation that open communicate with public in order to protect organization image by negative publicity. In addition, communicate in web-site or informal networking can be useful tool for present information as effectively. Word-of-mouth, for example, it can be powerful tool for positive publicity or negative publicity, yet generally assumes that negative word-of-mouth should hurt product success. Therefore, the company need develop word-of mouth communication in order to quash rumor or gossip and make consumers more aware or encourage the product or event. As a result, careful planning, research, and training can lessen negative publicity and can assist companies control crises.
Is Negative Publicity Can being a Good Thing?
On the other side, though negative publicity can definitely hurt sales in some cases, in others, negative may actually be positive. In a further extend, even though negative publicity can be damage organization image or reputation, it may occurs positive effect in some case if the negative image can assist to increase public attention, overwhelming the negative influences . It suggests that, because negative publicity can increase product awareness and accessibility; it can sometimes have a positive influence on product choice and sales. Due to number of brands are in market place, it is important that get a consumer’s awareness in order to successful business. Informal media or word-of-mouth, for instance, even though they are presents the products or event as badly, consumers may more inform of their particular product or event. Moreover, a wine described as ‘redolent of stinky socks’, saw its sales increase by five percentages after it was reviewed by a prominent wine website. Also, indirect negative publicity can be positive in terms of sales. For example, when Britney Spears represented as issue maker via media, such as hit to paparazzi, over binge problem, her new album ‘Circus’ actually more increased sales, because the articles also mentioned her new album, and thus direct positive publicity. Like this, these examples show that negative publicity can be a good thing in some case.
In addition, after effectively overcome and control the negative organization image and reputation, the organization can regain the consumer’s trust. In other words, after found lots of problems from the public, as negative publicity, the organization may use them as feedback in order to rebuild their positive image. It may take a long time, however, with resolved negative image, the organization potentially get a public attention.
Question No. 4
Differentiate between the following:
a) Production concept and Product concept
b) Market skimming and penetration pricing strategies.
c) Marketing research and marketing information system.
d) Brand extension with brand loyalty.
Answer: (a) part
Product concept refers to the idea that a company should make products that meet the needs and wants of its customers. In order to minimize costs and maximize profits, companies should focus on making products as efficiently and cheaply as possible. A production concept may not take into account the needs and wants of customers, while a product concept may not take into account costs and efficiency.
Difference between Product and Production Concept | ||
Concept | Product Concept | Production Concept |
Definition | Focus on a product's features and benefits. | Making a product or providing a service efficiently and cost-effectively. |
Philosophy | When a product offers desirable features and benefits, customers are willing to pay more. | It is important for customers to find a product that is affordable and can be produced efficiently. |
Approach | Meeting customers' needs and wants with new and innovative products. | Increasing efficiency and reducing costs by improving existing products and production processes. |
Risk | New product development can be costly and may not be successful. | In addition to being less expensive and more likely to succeed, improving existing products and processes has a low risk. |
Example | With products like the iPhone and iPad, Apple introduces new and innovative products. | As part of Toyota's production philosophy, they constantly improve their manufacturing processes to reduce costs and increase efficiency, resulting in the development of the "Toyota Production System" or "Lean Manufacturing." |
Answer: (b) part
Skimming pricing is a pricing strategy where a high price is initially set for a new product, gradually lowering as competition increases and demand decreases. Penetration pricing is a pricing strategy where a low price is initially set for a new product to quickly attract a large customer base and gain market share, before gradually increasing the price.
| Feature | Skimming Pricing | Penetration Pricing |
| Definition | A pricing strategy where a high price is set initially and gradually reduced over time. | A pricing strategy where a low price is set initially to attract customers and gradually increased over time. |
| Purpose | To recover costs and maximize profits from early adopters. | To gain market share and attract a large customer base quickly. |
| Product Life Cycle | Suitable for mature products or markets. | Suitable for new products or markets. |
| Price Change | Prices increase over time. | Prices increase over time. |
| Customer Segment | Early adopters and premium customers who are willing to pay a premium price. | Price-sensitive customers who are attracted by low prices. |
| Margin | High margins initially, gradually decreases. | Low margins initially, gradually increases. |
| Competition | High competition due to high prices. | Low competition due to low prices. |
| Marketing | Focus on product quality and uniqueness. | Focus on price and value. |
| Sales Volume | Low initially, gradually increases. | High initially, gradually decreases. |
Answer: (c) part
| Marketing Information System (MIS) | Marketing Research (MR) |
| 1. Meaning MIS is a structure of people, equipment, and procedures to gather, sort, analyse and transmit. | MR is systematically collecting and analysing data to solve specific marketing problems. |
| 2. Components The components of MIS include: Internal records, marketing research, marketing intelligence, and MDSS | The elements of MR include: Consumer research, dealer research, product research, pricing research, place research, promotion research etc. |
| 3. Cost Factor MIS involves huge costs, as it involves maintaining lot of data base and marketing decision support system. | MR need less data as compared to marketing information system (MIS) as it tries to solve specific problem. |
| 4. Purpose MIS provides relevant information to make proactive and reactive decisions. | The basic purpose is to solve current marketing problems. |
| 5. Quality of data MIS need huge mounds of data. The data is collected, analysed and stored for future needs. | MR need less data as compare to marketing information system (MIS) as it tries to solve specific problem. |
| 6 Reports MIS provides four types of reports such as periodic reports, plan reports, demand reports and triggered reports. | In marketing research, the decisions to solve specific marketing problem is based on one specific report. |
| 7. Specific MIS is more general in nature. It can solve a wide range of problems. | MR is more specific in nature, as it is conducted to solve a specific problems. |
| 8. time factor MIS is a continuous activity. There is no definite time period to collect the data. | MR is a one time activity to solve a specific problem. There is defnite time limit to collect data. |
| 9. Past MIS is future oriented as it makes a firm to be proactive to solve problems that may arise in future. | MR is past and present oriented as it attempts to solve the problems that have already taken place or are taking place in current situation. |
| 10. Number of problems MIS collects and stores data that can solve a variety. | MR relates to one specific problem at a time. |
| 11. Frequency of Data collection MIS data is collected regularly. | MR is conducted as and when a specific problem arises. |
| 12. Nature of firms MIS is maintained by large firms, as it involves huge expenditure. | MR can be conducted by any firm large and small. |
Answer: (d) part
Brand Extension
A brand extension is a marketing strategy where a company uses its brand name to launch a new product or service in a different category. This strategy allows companies to capitalize on their existing brand equity and customer base.
Types of brand extensions
1. Line extension
When a company introduces new variations of an existing product line. For example, Coca-Cola released cherry, vanilla, and zero flavors of its traditional cola.
2. Product extension
When a company releases a new product that complements its existing product line. For example, a coffee bean roaster may launch creamer in addition to their coffee beans.
3. Complementary product extension
When a company introduces a new product line that is similar to or complementary to its existing product line. For example, an oral care company may sell whitening toothpaste and strips.
Benefits of brand extensions
- Brand extensions can help companies attract new customers.
- Brand extensions can help companies create a larger shelf presence for their brand.
- Brand extensions can help companies capitalize on the success of their established products.
Examples of brand extensions
- Apple's expansion from computers to smartphones and wearables
- Starbucks' expansion into packaged coffees and teas
Brand Loyalty
Brand loyalty is when a customer keeps buying a brand's products or services over time, even if other brands offer similar options. It's based on a combination of a customer's positive feelings towards a brand and their perception of the brand's quality.
Benefits of brand loyalty
- Profitability: It's cheaper to keep existing customers than to attract new ones.
- Customer satisfaction: Brand loyalty can improve customer satisfaction.
- Long-term relationships: Brand loyalty can help companies build long-term relationships with customers.
Why is brand loyalty important?
Brand loyalty is a goldmine for businesses. Here's why it's so important:
1. Customer retention
Acquiring new customers is expensive. Loyal customers, on the other hand, stick around, providing a stable and predictable revenue stream. This allows businesses to focus on growth and innovation without constantly scrambling to replace lost customers.
2. Increased sales
Loyal customers don't just buy repeatedly, they tend to spend more per purchase. They're familiar with and trust the brand, so they're more likely to try new products or upgrade existing ones. This translates to increased profitability for the business.
3. Reduced marketing costs
Loyal customers require less marketing effort. They're already sold on the brand and become advocates, spreading positive word-of-mouth recommendations to their circles. This organic marketing is often more trusted and effective than traditional advertising.
4. Positive brand image
Loyal customers are like walking billboards for the brand. Their positive experiences and enthusiastic recommendations enhance the brand's reputation and image. This attracts new customers and reinforces the brand's position in the market.
5. Valuable customer insights
Loyal customers are a valuable source of feedback and insights. They're invested in the brand's success and are often willing to provide honest feedback on products, services, and overall brand experience. This feedback helps businesses improve their offerings and stay ahead of the curve.
6. Stronger brand advocacy
Loyal customers become brand champions. They actively defend the brand against criticism, promote its products or services online, and even participate in brand communities. This passionate advocacy strengthens the brand's connection with its audience.
examples of brand loyalty
Now that we’ve gone over how to build brand loyalty, here are three examples of brands who have used strategies to grow their businesses, increase their customer base, and drive brand loyalty with their audiences.
Question No. 5
Comment briefly on the following statement:
a) “The environment becomes important due to the fact that it is changing and there is uncertainty”.
b) "Consumer's decision to purchase a product is influenced by a host of factors."
c) "Rural markets in India offer huge opportunities and challenges to marketers”
d) “There are so many inter-linkages between services and products in several instances.
Answer: (a) part
It is said that every manager’s primary responsibility is decision-making. Managers follow a sequential set of steps to make good decisions that are in the interest of the firm. This process is known as decision making process. However, the decision making environment is also an important factor in the process.
Decision Making Environment
The quality of the decisions made in an organization will dictate the success or failure of the said business.
So all the available information and alternatives must be studied before arriving at an important decision. The process of decision making will help a great deal.
Another factor that affects these decisions is the environment in which they are taken. There are a few different types of environments in which these decisions are made.
And the type of decision making environment has an impact on the way the decision is taken. Broadly there are three basic types of decision making environment. Let us take a brief look at each of them.
1] Certainty
Such type of environment is very sure and certain by its nature. This means that all the information is available and at hand. Such data is also easy to attain and not very expensive to gather.
So the manager has all the information he may need to make an informed and well thought out decision. All the alternatives and their outcomes can also be analyzed and then the manager chooses the best alternative.
Another way to ensure an environment of certainty is for the manager to create a closed system. This means he will choose to only focus on some of the alternatives.
He will get all the available information with respect to such alternatives he is analyzing. He will ignore the other factors for which the information is not available. Such factors become irrelevant to him altogether.
2] Uncertainty
In the decision making environment of uncertainty, the information available to the manager is incomplete, insufficient and often unreliable.
In an uncertain environment, everything is in a state of flux. Several external and random forces mean that the environment is most unpredictable.
In these times of chaos, all the variables change fast. But the manager has to make sense of this mayhem to the best of his ability. He must create some order, obtain some reliable data and make the best decision as per his judgment.
3] Risk
Under the condition of risk, there is the possibility of more than one event taking place. Which means the manager has to first ascertain the possibility and probability of the occurrence or non-occurrence of the event.
The manager will generally rely on past experiences to make this deduction.
In this scenario too, the manager has some information available to him. But the availability and the reliability of the information is not guaranteed. He has to chart a few alternative courses of actions from the data he has.
Answer: (b) part
To be successful in online retail, understanding key factors influencing consumer purchasing decisions is a top priority. Behind each online sale, several factors sway a consumer. Nevertheless, getting to the core of these influences is vital to growing and scaling your online business. However, it isn’t an exact science.
In fact, there are many different types of shoppers. Some follow their instincts, acting on impulse. Others, however, take things slower. They choose to break down and analyze every product detail in depth. Some sit in between both poles.
From cultural influence, societal pressure, quality product information, and hassle-free user experience.
Factors that influence consumer purchasing decisions
Numerous factors influence consumer purchasing decisions. The hard work involves getting to the bottom of these influences. If you do, you’ll connect with your audience. So, what are some factors that influence consumer purchasing decisions?
1. Price and Value
Price plays a crucial role. Did you recently lose interest in a product because it was too expensive? Discounts, promotions, and competitive pricing strategies influence buying decisions.
2. Product Information
Product detail pages loaded with detailed product descriptions. Additionally, product images and videos will give consumers an understanding of what they’re buying.
Product information is vital to driving consumer confidence. After all, would you buy a product if it was missing essential information?
3. Product Quality & Features
The design of products influences consumer purchasing decisions. Quality and performance will attract buyers seeking that extra edge.
4. Emotional & Psychological Triggers
Emotional appeals will evoke desire or urgency. Product shortages coupled with the ‘fear of missing out’ will trigger impulse buying. Limited-time offers coupled with dynamic marketing will tap into these triggers.
5. Convenience and User Experience
A frictionless and user-friendly experience with hassle-free transactions can be a deciding factor. Remember, consumers value ease of navigation and convenience.
6. Ethical and Sustainability Considerations & Brand Image
More and more so, consumers will consider a brand’s ethical and environmental standpoint when making decisions. Make sure you display sustainability credentials where applicable. This is a crucial example of how brands affect consumer purchase decisions.
Answer: (c) part
Rural markets in India offer both opportunities and challenges to marketers.
Challenges
- Transportation: Poor infrastructure, such as kaccha roads, makes it difficult to transport goods to rural areas.
- Low literacy: Low literacy rates and poor media reach make it difficult to communicate with rural consumers.
- Seasonal demand: Demand for products varies based on the agricultural season, which depends on the monsoon.
- Low incomes: Low per capita incomes and low buying capacity make it difficult to predict demand.
- Imitation products: Retailers may push imitation products in place of branded ones.
- Power cuts: Power cuts or a lack of electricity can affect buying decisions.
Opportunities
- Rapid economic growth: Rural marketing can contribute to rapid economic growth, employment generation, and improved living standards.
- Development of agriculture: Rural marketing can help develop agriculture and optimize the use of rural resources.
- Improved infrastructure: Rural marketing can help improve rural infrastructure.
- Price stability: Rural marketing can contribute to price stability.
Strategies
To succeed in rural markets, companies can use rural market segmentation to identify target audiences and tailor their messaging. They can also leverage digital tools and connect with rural consumers on a personal level.
Answer: (d) part
Though, the products differ from services in many respects, there are so many inter-linkages between services and products in several instances. In fact, services and products complement each other in many cases. Sales prospects of products that are in need of substantial technological support and maintenance will be badly affected if proper arrangement for service is not made. For this reason, the initial contract of sale of a product often includes a service clause. This practice is common in the case of many durable goods. In the case of TV s, cars, refrigerators, washing machines, etc., manufacturers provide free after sale service for a certain period. Similarly, the sale of computer hardware is critically linked to availability of proper servicing and software. Sellers of capital equipment often enter into maintenance contracts with buyers. These are some instances of services complementing products. Similarly, products also complement services. For example, an airline cannot exist without airplanes. Without rooms, furniture and kitchen equipment, a hotel cannot provide hospitality service. In the same way, hospitals (health care service) cannot provide services without using tangible products such as operation instruments, testing equipment, medicines, hospital buildings, etc.
There is an increasing recognition of this complementary nature of services and products.
Manufacturing based industries (such as automobiles and computers) are recognizing the role of service in improving the competitiveness of a product. In many industries providing quality service is no longer simply an option. The quick pace of developing technologies makes it difficult to gain strategic competitive advantage through physical products alone. Customers not only expect high quality goods, but also expect high levels of service along with them. Companies are realizing the need to focus on service to keep pace with rising customer expectations and to compete effectively. Similarly, various services sectors are depending on quality products to improve their service quality. Good hospitals use the latest technical and testing equipment, hotels provide well furnished rooms, TV channels use the digital transmission equipment, banks use the ATM equipment, airlines use most comfortable airplanes, etc. Thus, continuous product improvement and service improvement are simultaneously going on in many sectors.
An important point which needs to be mentioned here is that when it comes to a marketing offer it becomes very difficult to draw a clear, demarcating line between product and service. According to T. Levitt, a renowned marketing specialist, “In almost every tangible pure physical product, an intangible service component is associated. Therefore, everybody is in service. ” Philip Kotler, one of the world’s leading authorities on marketing, classified a marketing offering into the following categories for establishing the product– services relationship:
a) Pure Tangible Good only: The offering is only tangible goods such as toothpaste, soap, etc., but no services accompanying the product.
b) Tangible Good with Accompanying Service: The offering consists of a tangible good accompanied by one or more service. Automobiles companies, for example, offers repairs, maintenance, warranty fulfillment, frees service up to a period or kilometers, and other services along with its cars. For more technologically sophisticated durable products, the sales depend on accompanying services. Examples include computers, TVs, washing machines and many other durable goods. Industrial goods particularly Capital goods also require certain types of services along with the tangible product.
c) Hybrid: The offering consists of equal parts of goods and services. For example, people go to the restaurants both for food and service.
d) Major Service with Accompanying Minor Goods and Services: Here the offering is predominantly in the form of a service. Here consumer primarily goes for the quality of service but may give importance to accompanying minor goods and services. For example, Airlines not only provide the transportation as the major service, but also provide food, drinks, magazine and other facilities as accompanying minor goods and services.
e) Pure Services: The offering consists primarily of service and no or very insignificant accompanying minor goods or services. For example, insurance, banking, psychotherapy, baby-sitting, hair cutting, etc.
Because of this varying nature of goods-to-service mix, it is difficult to generalize services without further distinctions. Services can be classified or distinguished as follows:
i) Services Marketing Equipment based services (e.g. Automatic car washing, repair etc.) and people based services (e.g. accounting services, banking, etc.).
ii) Services requiring presence of clients (e.g. surgery, hair cutting, etc.) and services not requiring presence of clients (e.g. banking, broking, etc.).
iii) Services meeting personal needs (e.g. telephone, credit cards, etc.) and services meeting business needs (e.g. technical consultancy, call centre services, etc.).
iv) Service providers with profit oriented objectives and service providers with non-profit oriented objectives.
v) Service enterprises under private sector and service enterprises under public sector.
