If you are looking for BCOE-141 IGNOU Solved Assignment solution for the subject Principles of Marketing, you have come to the right place. BCOE-141 solution on this page applies to 2021-22 session students studying in BCOMG, BAVMSME, BBARIL courses of IGNOU.
BCOE-141 Solved Assignment Solution by Gyaniversity
Assignment Code: BCOE – 141/TMA/2021-22
Course Code: BCOE-141
Assignment Name: Principles of Marketing
Verification Status: Verified by Professor
Marks = 100
Q1) What is marketing? Explain the different marketing concepts. (10)
Ans) Marketing is the process of identifying consumer needs, translating them into products or services, and delivering the product or service to the final consumer or user in order to meet the needs and wants of a specific consumer segment or segments while maximising the organization's resources.
There are five different marketing concepts that businesses use to market their products or services:
This is, without a doubt, the oldest concept. Some businesspeople feel that consumers are solely interested in low-cost, widely available products. They are unconcerned about the product's finer aspects. As a result, the producers believe that they must focus solely on efficient (cost-effective) and extensive (large-scale) production. A corporation that follows this strategy focuses on achieving great manufacturing efficiency and a vast distribution network.
When demand for a product exceeds supply, increasing production allows you to sell more of it. The management's main focus is to develop ways to expand output in order to close the demand and supply mismatch.
When the price of a product is high, increasing output will lower the price owing to economies of scale.
Organizations that use this approach are usually those that are focused on production. In this case, the production and engineering departments are critical. Only sales departments exist in such companies, and they sell the goods at a price determined by the production and finance departments.
Some organisations, in contrast to the production concept, believe in the product concept. Consumers prefer products with the highest quality, performance, and features, according to the product concept. They also believe that consumers value quality characteristics and are willing to pay a "higher" price for the "additional" quality of the product or service offered. As a result, companies who believe in this philosophy focus on product development and improvement. When it comes to enhancing the product, they rarely consider the customer's contentment and his diverse wants. Even when developing new items, the producer is more concerned with the product than with its uses or consumer demands. For example, a biscuit producer created a new brand of biscuits with good ingredients, colour, packaging, and so on, but without taking consumer likes and preferences into consideration. If the final consumer does not like the taste of the biscuit, it may fail in the market.
The fundamental challenge of an enterprise is sometimes not additional production, but rather selling the result. Similarly, a superior product may not guarantee market success. As a result, selling becomes more important. As a result, some producers believe that forceful persuading and selling are essential to their commercial success, and that they cannot sell or live without them. As a result, there is a focus on finding new ways to sell. They also feel that if customers/consumers were left to their own devices, they would not buy enough of the company's products and services, hence a significant promotional effort is justified.
As a result, the selling concept argues that unless the organisation engages in active sales and promotional activities, consumers will not buy enough of the organization's items on their own. This category includes many insurance brokers, salespeople for various electrical gadgets, health beverages, soft drinks, and fund raisers for social or religious causes. The success of marketing and production operations is measured by sales. Marketers who believe in the sales idea frequently overlook the fact that consumers purchase items to meet specific requirements. However, the goal of all of this activity is to increase sales. In comparison to manufacturing and product concepts, sales executives or sales departments are more important in the sales concept.
Many organisers have evolved to adjust their focus and perceive their marketing activities in a larger context as a result of this evolutionary process. The marketing notion is regarded as a business philosophy with a broader scope of application. According to the marketing philosophy, the organization's guiding spirit is to examine the needs and wants of customers, as well as the delivery of goods and services that may meet those needs more efficiently and effectively than rivals. The marketing concept is also considered to be consumer-oriented, with the goal of producing long-term profitability. It's a cutting-edge marketing theory for accelerating corporate growth.
To put it another way, marketing begins with determining what the customer wants and then creating a product that fulfils that need while providing maximum satisfaction. The customer, implicitly, is the boss or monarch who dictates. The consumer is now the centre of attention, which shifted from the product to the selling. When a company uses the marketing concept, all of its actions are focused on satisfying the customer, which becomes the company's corporate culture. Companies produce what customers desire, resulting in customer satisfaction and profit. This notion is used by firms that have reached a particular level of maturity and can see beyond the near future. Some businesses may be hesitant to implement this approach because they believe it will result in a drop in sales or earnings in the short term, and long-term profits are inherently unpredictable.
With an increasing understanding of business's social importance, marketers are attempting to make marketing more socially relevant. In certain ways, marketing is more than just a corporate activity; it must also include societal demands. Excessive resource exploitation, environmental degradation, and, in particular, customer mobility, have demanded the awareness of marketing's importance in society. As a result, marketing must be a socially responsible or accountable endeavour. According to the social notion, a business organisation must consider the requirements and wants of its customers and supply goods and services efficiently in order to improve customer happiness and society's well-being. The societal notion is a broadening of the marketing concept to include society as well as customers.
In practise, a company that adopts the societal notion must strike a balance between profit, customer pleasure, and the interests of society. The issue is nearly identical to that of corporate social responsibility. What is good for society is a question that has to be answered. For the long-term survival of private enterprise, voluntary adoption of this paradigm is desirable. A successful execution of the societal concept will undoubtedly improve the company's reputation. Businesses that subscribe to this philosophy will develop and market goods and services that are useful to society, do not destroy the environment, and provide full value for money spent.
Q2) What do you mean by consumer buying behavior? Explain the factors influencing consumer buying behavior. (10)
Ans) We all have one thing in common: we are all consumers. In fact, every single person on the planet is a consumer. We purchase and consume a wide range of goods and services on a daily basis. However, when it comes to purchasing selections, we all have various interests, likes, and dislikes, as well as diverse buying habits. Consumer behaviour deals with questions such as "what" items and services we buy, "why" we buy them, "how often" we buy them, "where" we buy them, "how" we buy them, and so on. Individuals (consumers) directly participating in the acquisition, use, and disposal of economic goods and services, as well as the decision processes that determine these acts, are referred to as consumers.
Individual motives, beliefs, and attitudes are essential factors of consumer behaviour. The consumer acts as a result of the interaction of these factors with environmental stimuli. All of the variables that influence customer behaviour can be divided into four categories:
The recognition of a perceived need is the starting point in the purchasing decision process. Simply said, a need is the absence of something beneficial. We all have wants, and we consume various commodities and services in the hopes that they will assist us in meeting those needs. A person is directed to seek pleasure when a need is sufficiently pressing. Motive is the term for it. Motives are thus inner feelings that guide people toward the objective of meeting a perceived need. Individuals are moved by the root word motive to take action in order to relieve tension and return to a state of equilibrium.
Despite the fact that psychologists disagree on how to categorise needs, Abraham Maslow established a useful hierarchy of needs hypothesis. His list is predicated on two key assumptions.
People desire animals whose demands are dictated by what they already have. A fulfilled need does not serve as a motivator. Only those needs that haven't been met can have an impact on behaviour.
From the lowest biological requirements to the highest psychological demands, all needs can be ordered in order of priority. Each unmet need motivates a person's behaviour, and as each degree of need is met, people move on to the next higher level of need.
Maslow has classified the needs into five categories as:
Physiological Needs: All humans have basic needs for food, housing, and clothing, which must be met before the individual may contemplate higher-order requirements.
Safety Needs: Security, protection from bodily damage, and avoidance of unfavourable events are among the safety requirements.
Social Needs: The satisfaction of physiological and safety requirements leads to the fulfilment of the third level of wants, known as social needs. These desires emerge from a desire to be accepted by family members as well as other persons and groups.
Esteem Needs: These are the most challenging criteria to meet because they are near the top of the ladder. The urge to experience a sense of success, achievement, and to be respected by others is found at the esteem level. However, at this stage, the individual wants more than just acceptance; he or she wants acknowledgment and respect. The individual wishes to stand out in some way from the throng.
Self-actualisation Needs: The highest level of human need is self-actualization, or the desire to be fulfilled, to realise one's own potential, and to fully utilise one's talents and abilities.
Personal attributes such as age, sex, stage in family life-cycle, education, occupation, money, lifestyle, general personality, and overall self-concept influence a consumer's purchase selections.
Demographic Factors and Life-cycle Stage: The buyer's age is the first aspect that influences his selection. With age, the demand for various products and services changes. Milk powder, baby meals, and toys have unique requirements for babies and children. Clothing, recreational, and educational facilities, transportation, and a variety of other age and fashion-related consumption needs are all necessities for young adults.
Education and Occupation: Education broadens a person's horizons, refines his tastes, and broadens his perspective. A well-educated individual is more inclined to use educational institutions, books, journals, and other knowledge-based products and services.
Income: A person's income has a significant impact on his or her consumption habits. He may want to purchase particular items and services, but his income may prevent him from doing so. The person's spending vs saving mindset, as well as his borrowing power, are major determining elements. Tea, shampoo, toothpaste, and other products are packaged in little sachets for lower-income clients who cannot afford a substantial one-time investment in such products.
Personality: Individual distinctions are defined by personality. Personality is defined as those inner psychological qualities that both determine and reflect how a person responds to environmental stimuli in consumer behaviour.
Life Style: Our motives, learning, attitudes, beliefs, and opinions, as well as our social class, demographic characteristics, and personality, all influence our way of life. You are in the role of a student while reading this unit. You have to juggle your profession, family, and social obligations at the same time. Your living style is reflected in the way you combine these many roles.
Social variables such as reference groups, family, social roles, social status, and opinion leaders all influence consumer behaviour.
Reference Groups: As a customer, the individuals you contact with and the many social groups to which you belong influence your purchasing and service decisions. Your purchase decisions are influenced by the groups with whom you connect directly or indirectly.
Family: Many things are purchased for consumption by all family members, and the family as a unit is an important consumer. Distinct members of the family have different responsibilities. Marketers are interested in learning more about the specific roles that individual members play so that they may tailor their promotion strategy to fit these roles.
Roles: A person can be a member of several groups. His role in each group can be described in terms of the tasks he is required to complete. You are most likely a manager, and you assume that function in the workplace. You, on the other hand, play the roles of spouse and parent at home. As a result, you play different roles in different social situations. Each of these responsibilities has an impact on your buying decisions.
Status: The degree of influence an individual has on the behaviour and attitude of others is frequently used to determine status. People purchase and use things that reflect their social standing. For example, a company's managing director may drive a Mercedes to express his social status. Rather from visiting Mussoorie or Ooty, he may take a vacation to Europe or the United States.
Opinion Leaders: A consumer's decision to acquire a product or service is also influenced by recommendations from friends, neighbours, family, and coworkers. This influencing technique is called as opinion leadership, and it is defined as a method through which one person can informally influence the behaviours or attitudes of another.
Cultural variables also have a significant impact on consumer behaviour. Marketers typically look at three cultural factors: 1) the buyer's culture, 2) the buyer's subculture, and 3) the buyer's social status.
Culture: Culture is the study of all aspects of a society, including religion, knowledge, language, laws, conventions, traditions, music, art, technology, labour patterns, and products, among others. All of these characteristics contribute to each society's particular personality. For the sake of this study, culture can be described as the sum total of taught beliefs, values, and conventions that serve to influence and lead all members of a society's consumer behaviour.
Sub-culture: Many sub-cultures occur inside the larger framework of a society. A subculture is a cultural group that, although adhering to the broader society's main cultural ideals, has its own beliefs, values, and customs that distinguish it from other members of the same community. Every member of a society belongs to multiple subgroups, and the consumer's buying decision is influenced by his or her membership in these subgroups. The marketer must comprehend how specific subcultural groups interact with one another and exercise influence on members' purchasing decisions.
Social Class: There is inequity in social standing among various persons in every society. As a result, people are divided into many socioeconomic classes. Individuals or families with similar values and lifestyles interact in social classes, which are typically permanent and homogeneous divisions in a society. Social classes are normally arranged in a hierarchical sequence, with low status descending to high status.
Q3) What do you understand by channel of distribution? Discuss the functions of channel of distribution. (10)
Ans) The distribution system is concerned with the transfer of commodities from the site of production to the point of consumption, and it encompasses a wide range of functions.
The following are the major players in the distribution system:
The facilitating agencies
The goods are made by manufacturers. In the distribution system, this is the starting point. Intermediaries, the second group of participants, are involved in direct negotiations between buyers and sellers, whether or not they take title to the goods. These intermediaries locate manufacturers of various products, as well as identify consumer needs and distribute goods. Various functions are performed during the process, such as buying, selling, assembling, standardisation and grading, packing and risk bearing, and so on.
Other than intermediaries, facilitating agencies are independent business organisations. These organisations make it easier for goods to get from producers to consumers via intermediaries. Banking institutions, insurance companies, transportation agencies, and warehousing companies are the major facilitating agencies. Consumers, the fourth category of distribution system participants, are the distribution system's final destination for goods.
By performing the function of physical distribution in a timely and efficient manner, a distribution channel provides products with place, time, form, and possession utilities. In modern societies, goods are produced on a large scale in factories concentrated in a few areas, while consumers are dispersed across the country. As a result, the majority of goods are produced in one location and consumed in others, making it difficult for consumers to contact the producers directly.
Another barrier arises as a result of the time lag between production and consumption. The goods produced do not all get consumed at the same time. Some goods are produced all year, but they are only consumed during certain times of the year. Umbrellas and raincoats, for example, are only worn during the rainy season, and woollen garments are only worn during the winter season. Other times, goods are produced during a specific season but consumed continuously throughout the year.
A distribution channel, likewise, allows consumers to obtain products in a convenient shape, unit size, style, and packaging. As a result, it adds convenience value. The consumer can also obtain goods at a price he is willing to pay and under conditions that give him satisfaction and pride of ownership through the distribution channel. As a result, possession utility is created. As a result, it is the distribution system that moves goods from the point of production to the point where they are available to consumers at the right time, place, and form.
The following are three categories of functions performed by distribution channels:
Transactional functions are functions that are required for a goods transaction to take place. This category includes functions such as buying, selling, and risk management. These three functions are performed by participants in the distribution channel. The goods are sold by producers, and they are purchased by intermediaries. After that, intermediaries market the goods to consumers.
Title to products changes hands and items pass from producer to consumer as a result of this buying and selling by channel players. There would be no transaction if there was no willingness to purchase and sell. When you buy something, you're taking a chance. An intermediary, for example, purchased items from the producer with the goal of reselling them at a profit. However, he may suffer a loss as a result of the price drop. The risk of loss is shared by all participants in the distribution chain.
Logistical functions are those that are involved in the physical exchange of products. Assembly, storage, grading, and transportation are all services that the distribution channel performs that are required for the physical exchange of goods.
Goods are assembled in large enough quantities to allow for effective selling and transportation. In order to supply an assortment of commodities wanted by purchasers, it is often essential to assemble a variety of goods. Grading and packing commodities makes it easier to handle and sell them quickly. Proper storage of commodities helps to prevent loss or damage while also ensuring that goods are available to customers whenever they want them. Transportation enables things to be delivered to locations where purchasers can be found. All of these functions are carried out through the distribution channel so that items can reach the market place on time and be sold to the final consumers easily.
Both the transaction and physical exchange of goods are facilitated by these functions. The following are some of the channel's facilitating functions: post-purchase service and maintenance, financing, market information, and so on. Buyers are given relevant information as well as after-sales services and financial aid in the form of a sale on credit by sellers. Similarly, manufacturers frequently counsel traders to assist them in selling goods, and traders also tell producers of client feedback on the products.
Buying, selling, risk bearing, assembling, storage, grading, transportation, post-purchase servicing and maintenance, financing, market information, and so on are all services that a channel of distribution provides. However, perishable items and large materials such as coal, petroleum products, iron, and other substantial materials require additional storage. After-sales support is critical in the case of autos and complex technological items such as computers.
Q4) What is augmented and virtual reality? State its advantages and limitations. (10)
Ans) Augmented and virtual reality marketing refers to the use of virtual and augmented reality technology by marketers to promote their brands. This technology creates a virtual (real-life-like) world. Films in 3D and 5D are examples of this. Rather than generating and providing actual experiences, this strategy creates them virtually or via the use of augmented reality technology. It is less expensive than the technique of experiential marketing.
Customers can be targeted on a large scale because only a smart phone or computer app is required. Popular games like PokemonGo, Freefire, GTA V, and others popularised the technique of augmented reality. Marketers began to use this technology to promote their products and services later on. Sephora, a cosmetics firm, was one of the first to embrace augmented reality marketing. Companies are utilising this technology to allow buyers to virtually try things before making a purchase. The products are seen in their entirety.
This strategy is often used in the service business, such as hotels and resorts. Customers are given a virtual tour of their facilities and virtual experiences in order to persuade them to purchase their services. People are immersed in an atmosphere thanks to these technology. Marketers develop user experiences that are lush, immersive, and interactive. Because the products are individualised, customers feel more connected to them. Ikea, Oreo, TOMS shoes, TopShop, and a few other brands use this strategy. Apps are being developed by businesses to engage customers and provide them with experiences in order to advertise their products.
Advantages of Augmented and Virtual Reality Marketing
It is less expensive because only mobile and desktop apps are required. A big number of customers can be targeted once the app is developed. Because the majority of people own smartphones, they can be easily reached. This makes it easier to reach out to potential customers.
It enables businesses to raise brand recognition.
It allows businesses to earn client loyalty by giving customers a virtual experience of a product or service.
It speeds up the buying process.
Limitations of Augmented and Virtual Reality Marketing
It is possible that it will not be as effective as a real-life experience. It's possible that not everyone has the imagination to imagine the real thing.
The initial investment is substantial. Virtual reality headsets are extremely expensive. These devices should be purchased by companies with sufficient financial resources.
People are aware of the risk of eye damage from excessive use of electronic devices, especially in situations such as the current pandemic, where people rely on electronic devices for practically all of their personal and professional demands.
One of the most significant drawbacks of virtual reality is motion sickness.
It isn't appropriate for all products that require social interaction.
Q5) What do you mean by advertising? Explain the various media of advertising and compare their advantages and limitations. (10)
Ans) "Any paid type of non-personal presentation and promotion of ideas, commodities, or services by an identified sponsor," according to the American Marketing Association. "Advertising is a paid, non-personal message from a recognised sponsor using mass media to persuade or influence audience," we might rephrase this definition.
Various Media of Advertising
Print media, broadcast media, direct advertising media, and outdoor media are the four broad forms of advertising media. However, there will be multiple classes within each of these four categories. Print media, for example, contains both newspapers and periodicals. Daily newspapers, weekly newspapers, morning newspapers, evening newspapers, and so on are examples of newspaper classifications. The number of units available in broadcast media is limited to channels or stations.
Newspapers and magazines are examples of print media. The fundamental distinction between newspapers and magazines is the frequency with which they are published. Newspapers come out every day, whereas magazines come out every week, fortnightly, monthly, quarterly, or biannually. In all cases, however, the message is communicated through written words, often supplemented by illustrations or photographs. Words in print, as well as the accompanying image, can be made as attractive, enticing, and informative as possible, but newspapers and magazines have their own unique characteristics.
Newspapers: Newspapers, which are published in a variety of languages, are widely and routinely read by the educated people. In India, some of the national daily have circulations in the millions. Newspapers published in regional languages also have a large readership, often across multiple states. As a result, newspapers reach a significant number of people as an advertising medium. Second, compared to other media such as radio and television, newspaper advertising is comparatively inexpensive. The amount of area to be used can be determined by the necessity and the expense. Finally, newspapers provide you the option of repeating the message every day if you need to. Furthermore, in the event of an emergency, there is the possibility of quickly introducing an advertisement. Finally, you might choose a newspaper that is appropriate for the target readership.
Magazines: Magazines are classified as periodicals since they are issued on a regular basis - weekly, fortnightly, monthly, and so on. For different types of readers, different types of periodicals are published. For example, popular general publications such as India Today, Illustrated Weekly, Dharm Yug, and others publish feature pieces, news, and stories
Broadcasting has become a very popular and essential advertising channel. Radio and television are examples of broadcast media. Radio is an audio-only media, whereas television is an audio-visual medium.
Radio broadcasting as a medium of advertising has become increasingly popular in India, owing to the availability of radio sets at affordable costs for people with little income. A substantial percentage of the population in India owns a radio set. Thus, radio broadcasts provide a very practical way for advertisements to reach the general population in various parts of the country.
In India, the use of television as a medium of mass communication has expanded dramatically in recent years. However, with the use of satellite broadcasting and the creation of new relay stations to cover the country's distant areas, its relevance as a medium of advertising has expanded. Individuals who cannot afford a television set can watch television shows in community centres and public spaces. Because of its wide reach and the power of visual communication on viewers, television has become a more popular medium for advertising in recent years. Because of the combination of sound, picture, and movement, advertisements can be used to demonstrate the product and its benefits.
Direct response advertising is a sort of interactive promotion that asks a prospect for a direct reaction without the use of a third party. The advertiser and the target audience have a two-way conversation. The means via which advertisers communicate directly with their target audience are known as direct advertising media. Direct mail and advertising specialties are two major direct media.
Direct Mail: Sending personalised letters to potential clients via the mail is a cost-effective promotional approach. The goal of sending circular letters is to directly engage clients with an advertising message and pique their interest in the product or service by providing a full explanation in a persuasive manner. As a result, a mailing list is compiled, and the letter is meticulously crafted with personalised wordings. It is thought that a message with a personal touch will be more successful.
Advertising Specialties: These are free items imprinted with a message and the advertiser's name and address, such as diaries, key rings, purses, paper weights, pens, calendars, T-shirts, and so on. They serve as reminders because they bear the advertiser's name. This medium adds a personal touch to your message. However, large-scale implementation is prohibitively expensive.
Outdoor advertising refers to advertising that reaches individuals while they are outside or travelling rather than at home or at work. The category of media includes pamphlets, posters, hoardings (billboards), neon signs, and electric displays.
Pamphlets (printed handbills) are frequently used as a form of advertising for local sales promotions. At street crossings, train stations or bus terminals, roadside market places, and other locations, pamphlets are delivered to passers-by. Posters (paper messages) are commonly hung on walls, roadside pillars, and lamp posts. Posters are often shown inside public transportation vehicles such as trams, buses, and trains. In some circumstances, space is available for a fee.
To attract people's attention, neon signs and electric displays are commonly erected on roof tops or at busy traffic crossings. These are only visible at night. Hoardings (billboards) are big message boards that are placed in public places, sometimes with life-size pictures. Hoardings are carefully designed to attract the public's attention. Because hoardings are often enormous, advertisements can be seen from a distance.
Exhibitions are also fantastic places to advertise products. In the expo, consumer items can be presented, and the use of industrial goods, such as machinery, can be demonstrated. The duration of exhibitions is limited to a set amount of time.
Showcases showcasing items in public spaces such as railway stations and airports capture the people's attention. The space has to be rented. The key characteristics of this advertising medium are the attractiveness of the products and the manner in which they are displayed.
Q6) What do you mean by market segmentation? Explain the basis of market segmentation. (6)
Ans) Market segmentation is the process of splitting a large market into one or more pieces (submarkets or segments), each of which is homogeneous in all important aspects.
Bases for Segmenting Consumer Markets
Broadly, there are four bases for segmenting the consumer market. They are:
Geographic segmentation entails separating the market into several geographical units such as countries, states, regions, cities, and neighbourhoods, among others. In this sort of segmentation, the corporation determines whether to operate in one or a few geographical groups, or in all, while taking into account differences in geographic demands and preferences.
Demographic segmentation is the process of breaking a market into groups based on consumer demographic factors such as age, gender, family size, income, occupation, education, religion, race, country, and so on.
The most common basis for separating client groups is demographic factors. Consumer demands, preferences, and usage rates are typically significantly associated with demographic traits, which is one of the reasons why demographic bases are preferred.
Consumer desires and capacities alter with age and life cycle stage. For example, the feeding requirements and intake potential of six-month-old children differ from those of three-month-old children.
Sex: Market segmentation based on sex has been used in the creation of apparel, cosmetics, publications, and other items. Marketers of other items will occasionally use sex as a segmentation criterion. Garments, toilet soaps, and shoe markets are all suitable examples in this context.
Income is another criterion for segmenting the vehicle, clothing, cosmetics, and tourism markets. As a result, segmentation in terms of low-, middle-, and higher-income groups may be created. To fit into a specific per capita income category, price may be the only requirement. It is more prevalent at the lower income levels. Other non-economic concerns or bases have a bigger influence as income rises.
Buyers are classified into distinct categories based on their socioeconomic status, lifestyle, personality traits, and other factors in psychographic segmentation. Within the same demographic category, people might have wildly divergent psychographic characteristics.
Social Class: A person's social class has a significant impact on their tastes in automobiles, clothing, house furnishings, leisure activities, reading habits, and other areas. Many businesses create products and services with a specific socioeconomic class in mind, then use marketing tactics to appeal to that group.
People's interests in different items are influenced by their life styles. In reality, the products they buy reflect their way of life. Consumer life styles are increasingly being segmented by marketers of various items and brands. Different jean styles, price advertising appeal, shops, and so on may be required by each demographic. The company's jeans may not appeal to anybody unless it identifies the target market and develops an appropriate marketing approach.
Personality factors are frequently used by marketers to segment markets. They create products with brand images that are fit for the characteristics of their customers.
Buyers are separated into groups based on their knowledge, attitude, use, or response to a product in behaviouristic segmentation. Many marketers believe that using behavioural factors as a starting point for establishing market groups is the best way to go. The following criteria are used to segment the markets in this category:
Buyers can be classified based on the circumstances in which they receive the idea to buy, make a purchase, or use a product. Festivals, vacations, and other events, for example, have an impact on visitor travel. A tourist bus company can specialise in serving passengers at one of these events. Occasion segmentation can assist businesses in increasing product utilisation.
Non-users, ex-users, potential users, first-time users, and frequent users of a product are all classifications that can be applied to many markets. Companies with a larger share of the market may be more interested in courting potential customers. Different types of marketing appeals are required for potential users and habitual users.
Utilization Rate: Markets can be divided into light, medium, and heavy user groups based on the level of product usage. Volume segmentation is another term for this. Heavy users make up a small percentage of the market yet use a large portion of the total.
Consumer Loyalty Patterns: Consumer loyalty patterns can also be used to segment a market. A brand-loyal market is one in which a large percentage of purchasers are committed to a single brand. As a result, the toothpaste market appears to have a high level of brand loyalty. Organizations selling to a brand-loyal market have a difficult time increasing market share, while companies trying to break into such a market have a difficult time breaking in.
Consumers can be divided into groups based on their level of excitement for a product. There are five different types of attitudes: enthusiastic, positive, neutral, negative, and hostile. If you run a door-to-door campaign for your product, the salespeople who are involved in the campaign can examine the attitudes of the people who live there and select how much time to spend with them.
Q7) Explain the process of new product development. (6)
Ans) The process of new product development includes the following eight stages:
Idea generation is the initial step in the product development process. During this stage, the company generates a variety of original ideas from both internal and external sources. Internal idea sources are usually the company's in-house research and development teams, while external sources are things like competition innovations, client desires, distributors, and suppliers, and so on. As a result, the organisation concentrates on coming up with as many viable concepts as possible.
The screening of this often-large list of ideas is the next step. The main goal of this stage is to concentrate on concepts that align with the company's customer value and financial objectives. The goal of this stage is to weed out concepts that aren't good or realistic and keep the ones that have a lot of potential. This is to prevent the company from incurring losses by pursuing speculative concepts that do not provide appropriate profits.
Concept Development and Testing
Concept development and testing are the third and final steps in the product development process. Good product ideas must be developed into detailed product concepts that are communicated in consumer-friendly ways at this level. The concept must be created in order to project the product in terms of how consumers see it and how it may be received in the market and by which group of potential buyers. This notion must next be put to the test by presenting it to the target audience and taking into consideration their feedback.
Development of Marketing Strategy
In marketing, the new product development process is described in stage four. The corporation seeks to come up with ways to launch a potential product into the market at this stage. In this step, the company must determine the price, prospective income figures, as well as advertising and distribution networks.
A thorough business study or test is conducted on the product concept in order to determine predicted sales and revenue, as well as assess risk and determine whether the product's production is financially possible. The company's goals are considered, and if they are met, the product progresses to the next stage.
This is the next step after a company's management deems a product concept to be in line with the company's aims and gives it the green light to develop. The company's research and development department then works on the product concept for months, if not years, to create a working and functional prototype of the product concept.
This is the penultimate stage of the new product development process, and it entails putting the product and its proposed marketing programme through its paces in real-world scenarios. This stage gives the company insight into how the product will be launched to the market, advertised, produced, packed, distributed, and eventually sold to clients, allowing for any necessary optimizations.
Commercialization is the last step in the product development process. The business management may opt to proceed with the product launch or put it on the backburner based on the information obtained throughout the test marketing phase. The product is finally introduced into the market if the go-ahead is given, and this procedure is known as commercialization. This period frequently results in significant costs, both in terms of initial infrastructure investments and sales efforts and advertisements.
Q8) What are the factors affecting promotion mix. (6)
Ans) The selection of elements in a promotion mix, as well as the relative relevance of each element, is influenced by a variety of factors. All of the factors that influence the promotion mix can be classified into four groups:
The factors that influence the promotion mix related to product are:
Product Information: Making the consumer aware of the goods through advertising is a simple concept that should be emphasised so that consumers may see the product readily. Consumers are also exposed to advertisements for things they are already familiar with. The advertisement's message is straightforward and easy to comprehend.
The Stage of the Product in its Life Cycle: By offering coupons and free samples, direct marketing sales promotion and publicity assist contact potential customers and inspire trail purchases. Personal selling also aids in reaching out to intermediates in order to ensure proper distribution.
Type of Product and Unit Price: The advertising mix is influenced by the product type, such as industrial or consumer. Industrial products are less significant than personal selling. Advertising can reach a huge number of people at a lower cost. Personal selling is expensive, but it is effective for industrial customers because there are fewer of them.
The factors influencing promotion mix are:
Characteristic of the Target Market: The most widely utilised promotional tool is advertising. It's a cold, impersonal method of promoting. The advertiser and the promotion target are not in direct communication. Personal selling is a sort of promotion that is adaptable and personalised.
Type of Buying Decisions: Every day, consumers must make purchasing decisions. Some decisions are more difficult to make than others, necessitating greater effort on the part of the customer. Other choices are more ordinary and take less thought. It's critical for a business to understand how customers approach buying decisions.
These factors take into account:
Marketing Channel and Promotion Strategy: The push and pull strategies are two aspects that influence the growth of a promotion. In the push approach, the manufacturer pushes its product through middlemen such as wholesalers, who actively promote it to retailers, who in turn actively promote it to ultimate consumers.
Branding Strategy: A company's branding strategy entails leveraging its existing brand name to market a new product. Branding gives the company complete control over the market. Product substitution is not feasible, which encourages repeat sales. It establishes a niche market for the goods. Price flexibility is also hampered by branding. To be accepted at each level of the marketing channel, each brand must have its own image.
Pricing Strategy: To encourage early purchase, businesses might employ a variety of price strategies. The producer spends a lot of money on advertising to get the merchant to advise the retail price. This is appealing to customers. This aids in the development of high consumer demand and brand loyalty. Advertising aids fast turnover for shops, allowing them to boost sales.
Budget: The retailer's responsibility of determining the promotional budget is crucial. For budgeting purposes, retailers should adopt the marginal analysis approach, as it is the most appropriate method for generating a budget that meets the retailer's goals.
Employees: This organization-related element is linked to the firm's personnel. Because some businesses lack experience with particular promotional aspects, they do not employ them. To have a major influence on promotion, a firm's approach to promotion should include influential and resourceful executives.
The promotion mix is influenced by two situation-related factors:
Firm Visibility and Environmental Factors: Some businesses are more well-known than others due to their goods, industry position, and impact on people's physical, economic, and social lives. Hindustan Unilever, Tatas, ITC, Reliance, and many others are examples. Such businesses frequently portray themselves as environmentally conscious. To attain this goal, these businesses fund activities that benefit the broader population.
Impact of Competition: In order to preserve or expand market share, businesses must frequently match or counter the promotional actions of their competitors. As a result, the promotional efforts of such businesses are affected and influenced by their competitors' activities. In recent years, we've seen advertising wars between rival companies in the soft drink and telephone industries (Coca Cola vs. Pepsi) (Reliance Jio Vs. Airtel).
Q9) What is product life cycle? Discuss briefly. (6)
Ans) The stages a product goes through from its inception to its growth and maturity to its final decline and death are referred to as the product life cycle (withdrawal from the market).
The following graph depicts the link between sales volume and profit volume at various stages of the product life cycle:
During this stage, full-scale production arrangements are arranged, a marketing plan is finalised, and the product is released to the market. Because the product is new and has been made available for purchase for the first time in the market, it may not encounter competition at this time.
The corporation must interact with its target market and notify potential clients about the new arrival in a significant way, resulting in a large promotional budget. The marketing campaign also aims to persuade potential buyers to buy and try the goods. In the process, it also hopes to secure distribution at retail outlets. The new product's distributors are being courted with more money. Because of the high promotional costs and low sales volume, the company's earnings are low, if not negative, at this initial stage.
Only a few competitors exist, and they all sell the same basic version of the new product with no refinements. At this point, the selling effort is focused on those potential purchasers who can be persuaded to buy. Because of the low level of manufacturing and high cost of promotion distribution, products at this stage usually have a high price.
The product enters the growth stage after gaining market acceptability, which includes consumer and trade acceptance. The product's demand is now rapidly increasing, far surpassing supply. As a result of the higher sales volume, the company's profits rise as well. During this stage, effective distribution and promotional efforts are regarded critical in order to capitalise on the rising demand trend. Increased sales volume is a primary priority for the organisation.
As a result of the increased demand, a slew of new competitors enter the market. The product's competitors begin to add new features. As competition grows, so does the number of distribution outlets, resulting in increased desire to "fill the pipeline." Prices usually stay the same or even decrease somewhat. To meet the challenge of competitiveness, the promotional speed is maintained or even increased.
At this point, the competitors are more likely to become more active. If your product is original, competitors will have already introduced a similar product to the market to compete with it. As a result, sales are likely to be pushed down by competitors, while your promotional efforts will need to be boosted to keep sales stable. As a result, sales approach a halt.
The 'maturity stage' or 'saturation' is the term for this. It's difficult to increase sales at this point. In terms of earnings, profits are expected to stabilise or begin to decline since more promotional effort is required today to keep up with competition. Unless, of course, your product has the highest market share and requires no additional marketing.
Decline or Obsolescence Stage
Following it, sales are expected to fall, and the product may approach the point of 'obsolescence.' To avoid obsolescence and deterioration, precautions should be taken. This downward trend could be attributable to a variety of factors, including shifting customer preferences, technological advancements, and the emergence of superior substitutes.
Profits begin to decline significantly at this point, and the final stage develops. Keeping such a product after this point could be dangerous and surely not profitable for the company. As a result, a company must choose between abandoning the product entirely or continuing it in a niche market. The selection will be made based on the amount of remaining potential and management's ability in this area.
Q10) What do you understand by marketing environment? Explain the types of marketing environment. (6)
Ans) The characters and forces outside of marketing that affect marketing management's capacity to build and maintain successful transactions with its target consumers, according to Philip Kotler, make up a company's marketing environment.
The relevant environment for a vehicle maker and buyer, tyre manufacturer, for example, may include other car manufacturers' competitors and tyre manufacturing technologies, tax structure, import and export rules, distributors, dealers, competitors, and so on. In addition, the corporation may need to think about its own capabilities in terms of production technology, financing, and sales force, among other things. Because the environment is dynamic and unclear, it becomes increasingly crucial. Some of these external circumstances are beyond our control. These changes present both a threat and an opportunity.
Types of Marketing Environment
These factors can be divided into two categories: microenvironment and macroenvironment. Internal and external environmental factors can also be used to classify these aspects. The company's immediate environment, or those environmental influences that are close by, is referred to as the micro environment. They include the company's own production and service capabilities, as well as dealers and distributors, competitors, and customers. As a result, the internal environment can be defined as the factors that exist within the organisation.
Human resources, inventory, company goals and strategies, financing, and other aspects of the organisation are all affected by these elements. These are also the people who have a direct impact on the company's future. The macro environment is made up of broader societal influences that can be grouped together in a circle. Demographic, economic, natural, technical, political, and cultural influences are among them. These factors have an indirect impact and require time to reach the organisation.
Micro Environment in Marketing
Suppliers, showcase delegates, consumer marketplaces, public, competitors, and marketing middlemen are examples of micro-environment factors that are near to the firm. Micro-environment also affects the organization's internal environment, affecting marketing as well as all other departments such as management, R&D, finance, Human Resources, purchasing, operations, and bookkeeping.
Macro Environment in Marketing
The company's uncontrollable aspect is the macro environment. As a result, it must organise its policies within the constraints imposed by these considerations. Macro-environment encompasses all facets of the market's demographic, economic, technological, ecological, socio-cultural, and politico-legal environments.
Thus, when a marketing manager considers presenting a marketing plan, he must examine both the internal and external marketing environments, as well as both opportunities and dangers to the organisation; only then will he be able to make the best business decisions.
Q11) Write short notes on the following: (5x2)
(a) Cash discount
Ans) The term "cash discount" refers to any reduction in the bill amount intended to encourage the buyer to pay the account immediately. When sales are made on credit, this is frequently done. After subtracting the trade and quantity discounts from the list price, the cash discount is computed. A common example is 2/10, n/30, which says that the payment is due in 30 days, but the buyer can reduce 2% of the total if the bill is paid in 10 days.
This cash discount approach can be used to:
Collect the bills as soon as possible.
Credit risk is reduced (i.e., bad debts).
Improve your liquidity situation.
To finance the credit, lower the cost of borrowing.
Reduce the cost of account administration and collection personnel.
From the buyer's perspective, it is also desirable to receive a 2% discount by paying the invoice 20 days before the date on which it must be paid in any case. When we compute it on an annual basis, it comes to 36 percent, which is a significant sum.
On the grounds of encouraging quick payment, a very substantial monetary discount may not be acceptable. A small cash discount, on the other hand, may not be enough to persuade the customer to pay promptly. After considering both of the above factors, the cash discount rate should be determined. The monetary discount is frequently offered simply because it is expected and has been customary in the industry. To avoid discrimination among purchasers, the cash discount must be granted at the same rate to all customers.
Ans) The majority of consumer products, as well as many industrial products, require a brand name. The brand name aids in instant recall for the consumer, which is vital for distinguishing competing products of similar kind. The choice of a specific brand name for the new product is an important part of the branding strategy. When the concept and practise of branding were far less developed in the past, the family name/surname was frequently used.
Siemens and Ford, for example, are still very much active today. Another prominent approach of branding involved mentioning the company's product line. General Motors and General Electricals are two well-known examples. It appears that the purpose of the brand was to either show the product's source or origin (family name) or to indicate the product range. However, in recent years, a brand name has evolved as one of the most significant parts of the merchandising function, and it will become much more vital as competition in India becomes fiercer.
Q12) Distinguish between the following: (5x2)
(a) Skimming and penetration pricing
Ans) The differences between market skimming price and market penetration price are listed below:
Market Skimming Price
A manufacturer skims the market (or removes the butter from the milk) by launching a new product at a high price and then progressively lowering the price to target new market segments. Skimming price is reasonable for a product that is a true breakthrough, according to Joel Dean (a product that represents a significant departure from establish ways of doing things). The price has been set at a level that is higher than the expected price range. The company can keep this policy in place indefinitely or cut the price for different sectors of the market later.
Under the following conditions, skim-the-cream pricing is appropriate for a new product:
The product has an inelastic demand.
The average cost of producing a small quantity is low.
The product is aimed at the upper echelon of the market.
There is a sufficient quantity of purchasers with a significant demand.
There isn't much of a chance that competitors will arise.
If the company uses the skimming pricing approach, its unit sales will be low, but its value sales will be high, and profits would be high.
Market Penetration Price
In penetration pricing, a low initial price is set to reach the mass market immediately.
Penetration pricing is said to be more suitable when the following conditions exists:
The product's demand is highly elastic, hence the quantity sold is highly sensitive to price.
Large-scale operations can result in significant reductions in production and marketing expenses.
The absence of a sufficiently large part of the market willing to pay a premium price, referred to as a "elite" market.
Because a penetration price can be utilised to raise entry barriers for possible competitors, there is a substantial threat of future competition. As a result, it's also known as 'keepout or pre-emptive' pricing.
Your decision between the two pricing techniques will be mostly influenced by the nature of the anticipated competitors. If competitors can enter a market soon and the product's market potential is high, management should most likely choose a penetration price strategy.
Penetration pricing, on the other hand, has two advantages:
For starters, it may deter other companies from entering the market. In light of the expected low profit margin, the required investment in production and marketing may be excessive.
Second, the innovator may get a firm hold on the market thanks to low prices, making it harder for competitors to cut into it.
Skimming price, on the other hand, may be more possible where the market isn't large enough to attract major competitors. While percentage margins may be appealing, total rupee profits may be insufficient to entice huge corporations.
(b) Product and services
Ans) In the case of products, they are first manufactured and then sold. The user can consume it after purchasing it. In the case of service, however, the procedure is different. Consumers of services first purchase the services before using them. For example, you contact an UrbanClap hair stylist, pay for her services first, and then receive the services.
Unlike products, the production and consumption of services occur simultaneously. Because services are diverse in nature, they can be extensively tailored and personalised. A service provider can tailor their offerings to meet the individual needs of each customer. Products, on the other hand, cannot be completely personalised or altered. It is possible to do so for a subset of clients
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