Assignment Code: MCO-06/ASST/TMA/2022-2023

Course Code: MCO-06

Assignment Name: Marketing Management

Year: 2022-2023

Verification Status: Verified by Professor

1) What do you mean by Buyer Behavior? Discuss various social and Cultural factors which influence the buyer behavior? (20)

Ans) A buyer is maybe anyone who might buy a given product or service to meet his or her need and solve problems. A buyer may be either an individual person or a firm. Generally, an individual buyer buys products for personal consumption and a firm usually buys for both consumption and for reproduction purposes.

A person is said to be the buyer when he makes an actual purchase of products. A buyer is also called a customer, purchaser, shopper, client who has an interest in products and is willing to buy them. Simply, buyers or consumers are the people in families and other kinds of households who buy and use products and services to satisfy their personal needs and wants.

Retailers spend billions of dollars every year trying to generate that feeling in their customers. Web campaigns, video and print ads, social media campaigns, and branding seem to converge as the consumer finally feels a connection to a product and makes a purchase. So, what drives that behavior? And how do you capture and then replicate that lightning-in-a-bottle moment when a potential customer turns into a buyer? This blog will dive into what consumer buying behavior is, what influences it, and what the different types of buyers are.

Consumer Buying Behavior refers to the actions taken (both on and offline) by consumers before buying a product or service. This process may include consulting search engines, engaging with social media posts, or a variety of other actions. It is valuable for businesses to understand this process because it helps them better tailor their marketing initiatives to the marketing efforts that have successfully influenced consumers to buy in the past.

Social Factors

Humans are social beings, and they live around many people who influence their buying behavior. Humans try to imitate other humans and also wish to be socially accepted in the society. Hence their buying behavior is influenced by other people around them. These factors are considered as social factors. Some of the social factors are:

Family: Family plays a significant role in shaping the buying behavior of a person. A person develops preferences from his childhood by watching family buy products and continues to buy the same products even when they grow up.

Reference Groups: A reference group is a group of people with whom a person associates himself. Generally, all the people in the reference group have common buying behavior and influence each other.

Roles and status: A person is influenced by the role that he holds in the society. If a person is in a high position, his buying behavior will be influenced largely by his status. A person who is a Chief Executive Officer in a company will buy according to his status while a staff or an employee of the same company will have different buying pattern.

Cultural Factors

A group of people is associated with a set of values and ideologies that belong to a particular community. When a person comes from a particular community, his/her behavior is highly influenced by the culture relating to that particular community. Some of the cultural factors are:

Culture: Cultural Factors have a strong influence on consumer buying behavior. Cultural Factors include the basic values, needs, wants, preferences, perceptions, and behaviours that are observed and learned by a consumer from their near family members and other important people around them.

Subculture: Within a cultural group, there exists many subcultures. These subcultural groups share the same set of beliefs and values. Subcultures can consist of people from different religion, caste, geographies and nationalities. These subcultures by itself form a customer segment.

Social Class: Each and every society across the globe has the form of social class. The social class is not just determined by the income, but also other factors such as the occupation, family background, education and residence location. Social class is important to predict the consumer behavior.

2) What are the objectives of Pricing? Discuss the basic methods of Price Determination. (20)

Ans) Pricing is a process of fixing the value that a manufacturer will receive in the exchange of services and goods. The producer uses a pricing strategy to make the cost of its products suitable for both the manufacturer and the consumer. Pricing is determined by the company's average prices as well as the buyer's estimation of an item's value in relation to that of competitors' goods.

Basic Methods of Price Determination

Cost-based pricing is the technique of determining a product's price based on the cost of the product and a certain profit margin. There are two approaches that depend on the price of the product. Cost-plus pricing, break-even analysis, and target profit pricing are three of them.

Cost-plus pricing: This is arguably the easiest technique of determining a product's price because it just adds the typical profit margin to all of the costs associated with producing, distributing, promoting, branding, packing, and servicing the product.

Analysis of bread-even points and target-profit pricing Another cost-focused approach to pricing is break-even analysis or target profit pricing. Companies who want to guarantee a specific return on investment first choose the profit they want to make before figuring out the pricing that will guarantee them the budgeted profit. The break-even analysis approach is applied to determine the pricing. The production level at which total income and total cost are equal is known as the break-even point. At this stage, the company is neither making a profit nor losing money. Output that exceeds the break-even threshold results in profits, whereas production that falls short of the break-even point results in losses for the business.

Buyer Based Pricing: This pricing strategy was created with the idea that it makes more sense to price a product based on demand than on the seller's cost or the actions of the competition. Perceived value pricing and differential pricing are the two approaches used to set prices based on demand.

Perceived Value Pricing: It is advisable to first create a perceived value for the goods in the eyes of the purchasers before matching the perceived value with a price because pricing symbolises the value that the customer assigns to the product. Because people place various values on the same product depending on where they are, for example, different restaurants charge different prices for the same item. This approach can only be successful if the business can accurately predict the relative importance of multiple services to clients. Prices that are incorrect or high will result in fewer sales than expected. For custom, non-branded things, perceived value pricing will be more useful.

Differential pricing acknowledges that demand for a given product varies from person to person, from location to location, occasionally, and from product version to product version. Therefore, when implementing alternative pricing, consideration is given to the customer, location, time, and product version. For instance, even though the show is the same, different rates are charged for tickets for different classes of seats (person and location) in a theatre, concert hall, or movie theatre. Similar to this, the cost of a particular good (fruits, sweets, soft drinks, etc.) varies according to the location where it is bought, such as a market shop, a train station, an airport, or a neighbourhood shop.

Pricing based on competition: Since the competition acts as a benchmark, pricing a product in relation to the price of a comparable or alternative product provided by the competitor is another pricing strategy.

Going-Rate Pricing: With this pricing strategy, the company bases the price of its product in large part on the prices demanded by competitors for identical or comparable goods, paying little attention to the product's costs, the consumer's perception of its value, or the variations in the level of demand for the product among different consumer groups. While pricing in this scenario is based on the "going rate" in the market for the same goods or a similar product, it does not follow that a company's price will always be exactly the same as that of its competitors.

The main reason for this pricing method is that the price decided will yield the best return under the current demand conditions since the "going rate" represents the industry's collective knowledge of those conditions. It is also challenging to quantify consumer value perception, demand elasticity, or customer response to price disparities with any degree of accuracy. Additionally, this approach avoids wasteful price wars and rivalry conflicts between businesses that are industry participants. Vendors of uniform goods that employ minimal technology and are frequently purchased frequently use going-rate pricing.

Businesses use the sealed-bid method to procure goods and services. This tactic involves the customer giving potential vendors a technical description of the product they are wanting to acquire and asking for bids. Each vendor presents a sealed cover containing information on the product he wants to offer, its price, and the terms of the deal. The buyer opens each sealed cover carrying a bid in front of the bidders. The buyer decides to buy from the seller who had provided the lowest price when the technical specifications of the goods meet his needs.

3) Write short notes on the following: (4×5)

(a) Positioning

Ans) The company's next managerial problem is deciding what position it wants to hold in the chosen segment after it has chosen its market targeting strategy (s). According to Kotler, product positioning refers to how consumers describe a product based on key characteristics and the position it holds in comparison to rival items in their minds. Therefore, a product's ranking indicates significant qualities that customers assign to it. Customers frequently express their opinions about certain product qualities in relation to the product's position in the consumer's mental space as compared to those of competitors. Product positioning is influenced by market structure, the firm's competitive position, and the ideas of product replacement and competition.

The majority of the characteristics of the word "position" are reflected in product positioning, such as the product's place in the market, how it ranks in comparison to its rivals across different evaluative dimensions, and consumer attitudes, such as their cognitive, effective, and action-oriented tendencies. Therefore, it is important to measure consumer perceptions and organisational buyer preferences for the product in respect to its rivals when evaluating product positioning.

Brand positioning entails ingraining in customers' minds the brand's distinctive advantages and peculiarities. In the Indian market, Maggi noodles are positioned as a quick meal that can satisfy the growing children's frequent eating needs. Dove soap is marketed as a high-end brand with a lot of moisturisers that can also be used as a face cleanser. Vicks Vapo-rub is marketed as a rub that can only be used to treat colds and coughs.

(b) Warehousing

Ans) Warehousing is the process of storing physical goods or inventory in a warehouse or storage facility before they are sold or distributed. Warehouses safely and securely store and protect products in an organized way, making it easy to track an item’s location, when the items arrived, how long the item has been there, and the quantity on hand.

For a small or new business, warehousing their inventory may be done from home until they outgrow the space. At that point, the business will have to rent storage space, lease a warehouse, or outsource logistics to a third-party and store inventory in their warehousing facilities.

In ecommerce warehousing, products are stored until an order is placed online, which triggers  the order to be  shipped directly to the consumer from the warehouse facility. In retail stores, inventory may be temporarily stored in a warehouse before it’s shipped to a brick and mortar store.

(c) Personal Selling

Ans) Personal selling is also known as the act of convincing a customer to buy a given product or device. It is also considered to be one of the most costly and effective promotional methods that are ever seen. Personal selling is face-to-face selling where one person who is the salesman tries to convince the customer to buy a product assigned by the company. It is a promotional activity by which the salesperson uses his or her skills and abilities to persuade people to buy the product thereby in an attempt to make a sale.

Here, the salesperson tries to highlight the features of the product to convince the customer that the product will hold benefits in the long term. However, getting a customer to buy a product is not always the motive behind personal selling, this personal selling is also done to make the customers aware of new products in the market. It is an expensive method of selling that requires high capital costs. Also, this method involves many labours as it is a labour-intensive method as a large sales force is needed to carry out personal selling successfully. The training of the salesperson for personal selling is also a very time-consuming and costly process.

(d) Relationship Marketing

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

Relationship marketing stands in contrast to the more traditional transactional marketing approach, which focuses on increasing the number of individual sales. In the transactional model, the return on customer acquisition cost may be insufficient. A customer may be convinced to select that brand one time, but without a strong relationship marketing strategy, the customer may not come back to that brand in the future. While organizations combine elements of both relationship and transactional marketing, customer relationship marketing is starting to play a more important role for many companies.

4) Differentiate between the following (4×5)

(a) Consumer goods and Industrial goods

Ans) Difference between Consumer goods and Industrial goods is as follows:

(b) Selective and Intensive Distribution

Ans) Difference between Advertising and Publicity is as follows:

(c) Advertising and Publicity

Ans) Difference between Advertising and Publicity is as follows:

(d) Selling and Marketing

Ans) Difference between Selling and Marketing is as follows:

5) Comment briefly on the following statement: (4×5)

(a) “Rural marketing in India offer huge opportunities and throw challenges to marketers.”

Ans) It offers a great chance for different branded goods as well as services for large number of customers. It is estimated by HLL that out of 5 lakh villages in India, only lakh has been taped so far, which goes on to indicate the market potentials of the rural market.

1. Market Size and Potential: The size of India s rural market is stated as 12.2 % of the percentage of the old population this means 12.2% of the worlds consumers leave in rural India. In India, rural household farm about 72% of total household constitutes a huge market by any standard.

2. Increasing Income: Different programs undertaken have helped to improve the economic the economic situation of the rural areas. The increase in income is seen in both absolute values as well as in the increase in average number of days of occupation in a year.

3. Accessibility Markets: Though the road network has not developed to the best possible extent, but a fire amount of development has been made in many regions, making these regions accessible from the urban region and making it easier for supplying products to these regions

4. Competition in Urban Areas: The urban market is getting saturated and thus is enabled to provide the much needed market to many companies and in search of greener pastures many of these companies are now targeting the rural market.

Despite the fact that rural markets are a huge attraction to marketers, it is not  easy to enter the market and take a sizeable share of the market, in the short time due to the following reasons.

1. Low per Capita Income: Per capita income is lower in rural areas compared to those in urban areas. Again, the distribution of rural income is highly skewed, since the land holding pattern, which is basic asset, it is skewed. Thus, the rural population presents a highly heterogeneous spread in the villages.

2. Transportation: Transportation infrastructure is quite poor in rural India. Nearly 80 percentages of villages in the country are not connected by well-constructed roads. Marketing activities require transportation facilities. Due to poor transportation facilities, farmers and marketers find it difficult to reach markets.

3. Warehousing: In the rural areas, there are no facilities for public as well as private warehousing. Marketers face problem of storage of their goods

4. Packaging: It is the first important step of product processing. If the packaging cost is high, it will increase the total cost of products. It is suggested that the marketers should use cheaper materials in packaging for the rural markets.

5. Distribution: An effective distribution system requires village-level shopkeeper, Mandal/ Taluka- level wholesaler or preferred dealer, distributor or stockiest at district level and company-owned depot or consignment distribution at state level. The presence of too many tiers in the distribution system increases the cost of distribution.

6. Traditional Life: Life in rural areas is still governed by customs and traditions and people do not easily adapt new practices. For example, even rich and educated class of farmers does not wear jeans or branded shoes.

7. Buying Decisions: Rural consumers are cautious in buying and decisions are slow and delayed. They like to give a trial and only after being personally satisfied, do they buy the product.

(b) “The basic purpose of marketing research is to facilitate decision making process.”

Ans) The task of marketing research (MR) is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment.

Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers.

Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.

Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing, and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research.

(c) “The rate of failure of new products is very high.”

Ans) The "offer" has not met the client need in terms of one or more variables, which is the obvious explanation. This occurs because either the business did not understand the customer's perspective accurately, the customer's preferences have changed since then, or the business did not fully translate the consumer requirements into its offer. The Failure may specifically be attributed to one or more of the following elements:

Product: A product's functional quality, size, shape, colour, design, materials utilised in production, and other aspects may not meet client expectations.

Package: Functional quality, material used in the package, size, shape, colour, design, and instructions on the package, as well as its disposability or reusability, compatibility with the product, aesthetic appeal, ease of opening and closing the package, etc., determine whether the package and, along with it, the product, are acceptable or not.

Label: The shape, material, colour, size, and languages used all affect client preference.

Brand: Along with trademarks, brand names and logos are important factors in purchasing decisions.

Service: Pre-sale, point-of-sale, and after-sales service are crucial factors in purchasing, particularly when it comes to capital equipment and durable commodities with high unit values. Consumers expect great after-sales service at a fair price, available at a time and location that is convenient for them, for a reasonable amount of time before they decide to purchase a product. They also want the seller to install the product and train them to maintain it. A company's product will fail if any one of these is neglected.

Distribution: Choosing the wrong channels and outlets, distributors' lack of motivation, their unfavourable locations, and their subpar customer service are a few of the issues that contribute to a product's failure.

Pricing: Products fail because of a poor quality/price relationship, unavailability of credit for high unit value commodities, a lack of incentives like price reductions, and frequent price changes.

Promotion: Poor communication with the customer affects product sales because of the choice of an ineffective promotional tool, the absence of an effective promotional tool, communication errors, low market literacy levels, the lack of competent promotional companies, and issues with personal selling and sales promotion.

(d) “Market Communication plays an important role in a company’s overall marketing program.”

Ans) Marketing communication is crucial to a business's overall marketing strategy. Marketing communication is the process of a corporation employing a variety of media to provide pertinent marketing information to its target market and other publics in a systematic and scientific manner. Through its marketing communications, a firm seeks to influence its target market to choose its goods and services over those of its rivals.

Marketing communication is persuasive in nature since it seeks to persuade consumers to choose the company's products. One of the four Ps of the marketing mix, which was developed by Jerome McCarthy in 1964, is made up of a variety of persuasive marketing communication methods together referred to as "Promotion." Marketing communication, then, refers to the assortment of advertising mediums that marketers employ to spread information and persuading messages to their target audience and wider public.

Therefore, the study of marketing communication is the study of the marketing function of promotion. It should be emphasised that how well a corporation does its promotion role greatly affects how well it performs its marketing function. There are countless instances where businesses have been successful in the market due to efficient communication.

For instance, the marketing communication function significantly contributed to the success of the following goods and services: Hero Honda motorcycles, Maggie noodles, and Nirma washing powder, to name a few. In the same.-lay, poor marketing communication was to blame for some products' mediocre performance in spite of their high quality and affordable costs.

It has become even more important for marketers to provide persuasive marketing messages of the proper kind for the correct target market given the sharp growth in market rivalry and the range of products and brand choices accessible to customers.