Assignment Code: MMPC-006/TMA/JULY/2022

Course Code: MMPC-006

Assignment Name: Marketing Management

Year: 2022

Verification Status: Verified by Professor

1. (a) Define and discuss the term “Marketing”. Elaborate its scope and significance in an enterprise. Needs, Wants and Demands are always the starting point for marketing activities. Explain with a suitable example.

Ans) Marketing is the process of identifying consumer demands, translating them into products and services, and then moving the product or service to the end consumer segment with a focus on profitability and customer happiness while also guaranteeing the best possible use of the organization's resources.

Scope of Marketing

Goods: Physical goods include agricultural commodities, fish, eggs, newspapers, chocolates, laptops, televisions and furniture.

Services: Services sector is the largest sector in the world and over 63% of the total global wealth comes from the services sector. This sector accounts for over 53% of India’s GVA. Services include tourism, travel, hospitality, healthcare, education, banking and insurance.

Events: Marketers promote time-based events ranging from local events (e.g. Hornbill Festival in Nagaland, and Kerala Boat Festival) to national events (e.g. 150 Years of Celebrating the Mahatma) and international events (e.g. India International Trade Fair, and the Tokyo Olympics 2021).

Experiences: A firm can market personalised or customised experiences such as Ramoji Film City Star Experience, Climbing up the Mount Everest, and a weekend with stalwarts of cricket. Personalisation can be a huge boon for retailers and consumers.

Persons: Many companies are using personal marketing for promoting their brands. Renowned personalities market themselves as well as different products or services. Cristiano Ronaldo, the renowned football player endorsing Clear Shampoo and Nike sports shoes; famous film personalities

Aishwarya Rai Bachchan endorsing L’Oreal Shampoo and Salman Khan serving as a brand ambassador of Pepsi are a few examples. Self-branding became an emerging area.

Places: Nations, regions, states, and cities compete for investments, tourists, and companies. Some of the place marketers are governments, real estate agents, and investors. Singapore’s New Asia, India’s Incredible India, and Mumbai’s City of Dreams are a few examples of how branding is done with logo, slogan and so on.

Properties: They are either real estate or financial assets which are bought and sold. Godrej Properties and Oberoi Realty in the real estate sector, and ICICI Direct and HDFC Securities among Demat service providers are some examples.

Importance of Marketing

Helpful in Communication between Manufacturer and Customers: Through marketing activities, a seller collects various information regarding customer taste and their preferences and changes in customer behaviour from time to time.On the other hand, marketing gives necessary information regarding product quality, place, price, product quantity to buyers. In this way, buyers come to know about the new products.

Helpful in Profit Maximization: Profit maximization is the main task of every business firm. Marketing makes easier to availability of products are reduced cost at each level.It creates demand for products through sales promotion and advertisement activities. All these efforts create a maximum profit of the firm.

Helpful in Decision-Making: In modern changing economy a seller collects information and takes accurate decisions regarding the business. All over the marketing activities deeply concerned with are of decision-making. On the basis of various information seller able to take the right decision.

Provides Employment: Marketing activities require the services of various enterprises such as insurance, finance, production, transportation, research, wholesaler, warehousing, advertising, and retailers. These services require a large number of individuals and it provides employment to society.

Provides Standard of Living: Marketing provides the best goods and services to the people in the society according to their needs and expectations. Marketing generates, increases and maintains the demand for an existing product and new product and improve the standard of living of the society.

Needs, wants and demands are 3 important terms in marketing. No matter how similar they might seem, there are more differences in these terms that you might think. There are many layers within them and they play a vital role in arriving at segmenting the TG, targeting a particular target group and most importantly defining a sharp positioning for a brand.

Needs

“Needs” is the basic human requirements like shelter, clothes, food, water, etc. which are essential for human beings to survive. If we extend this further, other needs are education, healthcare or even a social thing, for example, belonging to a certain society or self-expression. One can say that the products which fall under the needs category of products do not require a push. Instead the customer buys it themselves. But it’s actually not true. in today’s world with thousands of brands competing in the same categories with identical offerings satisfying the same needs, even the “needs category product” has to be pushed in the consumers’ mind. Example of needs category products / sectors – Agriculture sector, Real Estate, Healthcare etc.

Wants

"Wants" are a step ahead of needs Wants aren’t essential for humans to survive, but it’s associated with needsSimply put, A want is a product desired by a customer that is not required for us to survive. So, want is the complete opposite of need, which is essential for our survival. Wants aren’t permanent and it regularly changes. As time passes, people and location change, wants change accordingly.  Wants are directed by our surrounding towards reaching certain needs. Therefore, human’s wants can be varied depending on each individual’s perception, environment, culture, and society. For example, an Indian needs food but he may want a Dosa or Paratha while an American may want Burger or Sandwich. Example of wants category products / sectors – Hospitality industry, Electronics, FMCG, Consumer Durables etc.

Demands

Wants turn to be Demands when a customer is willing and having the ability to buy that needs or wants. The basic difference between wants and demands is desire. A customer may desire something but he may not be able to fulfill his desire. Consequently, for people, who can afford a desirable product are transforming their wants into demands. In other words, if a customer is willing and able to buy a need or a want, it means that they have a demand for that need or a want. You might want a BMW for a car or an iPhone for a phone. But can you actually buy a BMW or an Iphone? You can, provided you have the ability to buy them. Example of demands –Luxury cars, 5 star hotels etc.

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

Ans) Even deciding what to buy involves some active reasoning. When deciding what to buy, a customer goes through these five steps:

1. Problem recognition.

2. Pre-purchase information search.

3. Evaluation of alternatives.

4. Purchase decision.

5. Post purchase behaviour.

But if the consumer is buying something they buy often, they may skip the second and third stages and go straight to the stage where they decide to buy. But when making a purchase decision that involves solving a lot of problems, the consumer is likely to go through all five stages in the order given.

The important thing to remember is that the buying process starts long before the actual purchase and has effects even after the purchase has been made. This should give the marketer some ideas about how to start making his marketing plan so that he can reach the marketing goals he has set.

Let us consider the same with the example of buying a smart phone.

Problem recognition – the current smart phone being used is slow, old and has scratches on it. Its appeal has diminished.

Pre-purchase information search – We see many ads for phones every day and we notice Apple iPhone 14 – the new launch worldwide. We search apples website for all the information on iPhone 14.

Evaluation of alternatives – We start comparing Apple vs Android and get specific detailed information on the phone specifications, applications, speed, camera quality, battery life, etc.

Purchase decision – after valuating everything, we decide that apple iPhone 14 is the best choice to make and we decide to buy it from Amazon.

Post purchase behaviour – We enjoy the new purchase and once the phone arrives we look for customizing it and also look for cases, screen protection, etc.

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

Ans) A specific product or brand, like an Apple or Samsung smart phone, is called a "product" or "product item." There are companies that only sell one product, but that happens less and less these days. There are also companies that sell a lot of products in order to gain more market share, make more money, or do both. You can have one product or more than one product as part of your product strategy. In this way, a product line is a group of products that are similar in many ways. Hindustan Unilever Limited (HUL), for example, has a line of products that includes products for personal care. HUL also sells other things, like food and drinks, home care items, and so on.

A product system could also be thought of as a group of different but related products that work together and in the same way. For instance, some PC (desktop) product lines come with headsets, keyboards, cameras, presentation projectors, voice recorders, etc. that can be attached. Also, a product mix, which is also called a product assortment, is all of the goods and services that a seller offers. For example, Dabur India Limited has a wide range of products, including five flagship brands with their own identities: Dabur as the master brand for natural health care products, Vatika for premium personal care, Hajmola for digestives, Réal for fruit juices and beverages, and Fem for fairness bleaches and skin care products.

Product line decisions are made by figuring out which products a company wants to sell, and a product manager is usually put in charge of a product line or lines. She or he is in charge of maximising market share and making sure that sales revenue and sales volume continue to grow, which will lead to higher margins. Decisions are made about how long or short the product line should be. Often, a product line is made to meet the needs of different groups of customers in the target market. These decisions are made based on the company's goals, the resources that are available, and how much money the proposed product lines could make.

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

Ans) When a company releases a new product, it hopes that it will make money and keep customers happy for a long time. But this doesn't always happen in real life. So, forward-thinking companies try to keep track of what's going on with sales and the money they bring in over the life of a product.

The Introduction Stage

Let's think about what happens when a new shaving cream product hits the market from the very beginning.

Since the product has just come out, it makes sense to think that it will take a while for sales to pick up. There are also some things you have to do first. The customer must be made aware of the product. It has to be at the distribution and retail points, and this takes time.

The Growth Stage

In case the shaving cream product launched is successful, the sales must start picking up or rise more rapidly.

The next stage is called the "growth stage," and it is when the plant grows. Here, sales will go up quickly, and the profit picture will also get a lot better. This is because the cost of distribution and advertising is now spread out over a larger number of sales. As the number of units made goes up, the cost of making each one tends to go down. Thus, from the point of view of product strategy, this is a very critical stage. Marketing the shaving cream with digital marketing, tv ads, hoardings, etc. must be done.

The Maturity Stage

To think that sales will keep going up is too optimistic. At this point, the other shaving cream competitors are more likely to step up their game. If your product is new, your competitors have probably already put out something similar to compete with you. So, it's likely that your competitors will drive down your sales, and you'll have to do more advertising to try to keep your sales steady. So, the number of sales stays the same. This is called the "saturation" or "maturity" stage. At this point, it's hard to get sales to go up. As for the "profit" picture, the profits are likely to stay the same or start going down because more advertising is needed now to keep up with the competition. Unless, of course, your product has the biggest share of the market and doesn't need any more push in the market.

The Decline or Obsolescence Stage

After that, sales are likely to go down, and the product may reach the point where it is no longer needed. There should be steps taken to stop this from happening and stop the decline. This decline, which usually happens next, could be caused by a number of things, such as changes in consumer tastes, improvements in technology, and the introduction of better alternatives. During this stage, the profits drop quickly, and the last stage comes into being. Keeping this kind of profit after this point may be risky and is certainly not good for the business.

Suggestion for the brand during its decline stage:

Marketing and advertising can be done in different ways, such as by asking social media influencers to review or promote a product in order to reach more customers.

Keep an eye on what the customer wants and make changes based on what they like. Because market trends are always changing.

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

Ans) Most of the time, cost, demand, and the amount of competition affect pricing decisions.

Demand

The popular "Law of Demand" says that "as price goes up, demand goes down, and vice versa," as long as everything else stays the same. When certain agricultural products are in season, there are lots of them, so the prices are low. Because the prices are low, the demand for them goes up a lot. You can use this law in your daily life to see if it works. Price and the number of items someone wants to buy go in opposite directions. If the price goes up, people buy less, and if the price goes down, people buy more. The law of demand, of course, is based on the idea that nothing else that affects demand should change except price. If one or more of the other factors, like income, the price of substitutes, consumer tastes and preferences, advertising, spending, etc., change, the demand may go up even if the price goes up, or it may go down even if the price goes down. The law of demand does not always hold true, though.

Some things are bought mostly because they make the buyer feel like a "snob." When the price of these goods goes up, they look more expensive and more people buy them. On the other hand, as the price of these goods goes down, their appeal to snobs goes down, and so does their demand. A good example is a diamond.

Competition

How much sellers can control prices depends a lot on how much competition there is in the market they are in. When there is only competition between sellers, the prices they get are completely out of their hands. On the other hand, a monopolist can set prices however he or she wants. When there isn't enough competition, sellers may have some pricing freedom. So, the marketer needs to know how much freedom he has when it comes to pricing.

It is said that there is "perfect competition" when I there are a lot of buyers and sellers, (ii) each buys and sells such a small amount that their absence from the market won't change the total demand and supply, and (iii) the products sold by sellers are all the same. In a market with perfect competition, prices are set by how much supply and demand there is. Prices will be set at a level where demand and supply are equal.

In a monopoly, one producer has full control over the entire supply of a certain good or service. Monopoly can be seen in IRCTC (Indian Railway Catering and Tourism Corporation) and HAL (Hindustan Aeronautics Limited). The main characteristics of a monopoly are I that there is only one seller of a certain good or service and (ii) that competition from producers of similar goods or services is so small that it is almost meaningless. So, the monopolist can set the price however he or she wants. So, he is what's called a Price Setter.

Oligopoly is a type of market where there are only a few sellers, and each of them has a significant share of the total output of the good. Cars, cement, tyres, oil and gas, aluminium and steel, cable TV services, cell phone services, airline services, cigarettes, and a lot of other goods and services are examples of oligopoly. In each of these markets, each seller knows exactly who his competitors are.

Because cost provides the base for a possible price range, some firms may consider cost-oriented meth­ods to fix the price.

Cost-oriented methods or pricing are as follows:

1. Cost plus pricing:

Cost plus pricing involves adding a certain percentage to cost in order to fix the price. For instance, if the cost of a product is Rs. 200 per unit and the marketer expects 10 per cent profit on costs, then the selling price will be Rs. 220. The difference between the selling price and the cost is the profit. This method is simpler as marketers can easily determine the costs and add a certain percentage to arrive at the selling price.

2. Mark-up pricing:

Mark-up pricing is a variation of cost pricing. In this case, mark-ups are calcu­lated as a percentage of the selling price and not as a percentage of the cost price. Firms that use cost-oriented methods use mark-up pricing.

Since only the cost and the desired percentage mark­up on the selling price are known, the following formula is used to determine the selling price:

Average unit cost/Selling price

3. Break-even pricing:

In this case, the firm determines the level of sales needed to cover all the relevant fixed and variable costs. The break-even price is the price at which the sales revenue is equal to the cost of goods sold. In other words, there is neither profit nor loss.

For instance, if the fixed cost is Rs. 2, 00,000, the variable cost per unit is Rs. 10, and the selling price is Rs. 15, then the firm needs to sell 40,000 units to break even. Therefore, the firm will plan to sell more than 40,000 units to make a profit. If the firm is not in a position to sell 40,000 limits, then it has to increase the selling price.

The following formula is used to calculate the break-even point:

Contribution = Selling price – Variable cost per unit

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

Ans) Austrian company Red Bull is one of the most iconic brands in the world and surprisingly its main product is simply an energy drink.  Another surprising factor is that many other energy, sports or soft drinks fall under a FMCG but Red Bull is under its own which is very hard to accomplish during present times. Having such an extensive brand is hard especially since it keeps to its niche so what does Red Bull do well to stand out from the crowd?  One of its main marketing strategies is to host and sponsor extreme sports and athletes all across the globe. From the Red Bull Air Race all the way to Red Bull BC One (Breakdancing), it helps become a figurehead brand for each sport. Generally, the sports are much niche which allows Red Bull to position themselves a lot easier as the main sponsor, further promoting their brand.

Aside from events, Red Bull’s packaging also plays a part in its global appeal.

“Red Bull really looks like a product from a global economy. It doesn’t look like a traditional American soft drink — it’s not in a 12-ounce can, it’s not sold in a bottle, and it doesn’t have script lettering like Pepsi or Coke. It looks European. That matters,” explains Harvard Business School professor Nancy F. Koehn in a 2001 article.

With packaging and a marketing strategy involving events and sponsorships, Redbull has catapulted itself into a worldwide global brand with no slowing down.

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

Ans) Advertising is any paid form of presenting and promoting ideas, goods, or services in a way that is not personal and is paid for by a known sponsor. Advertising's main marketing and communication functions today include informing, entertaining, persuading, influencing, reminding, reassuring, and adding value to the advertised product or service.

Types of advertising

1. Advertising efforts are put into different groups based on the type of task, the type of product being sold, or the focus of the activity being done. Let's look at a couple of examples.

2. Industrial advertising is for things like machinery and machine tools, while consumer advertising is for things like shoes, cereal, cooking oil, etc.

3. The ads that try to improve a company's image are called "corporate advertising," and the ads that try to sell a company's products are called "product advertising."

4. Also, ads that encourage people to buy tea or carpets are called "primary demand-creating" ads, while ads for specific brands, like Brooke Bond's "Tajmahal" or "Nescafe," are called "selective brand advertising."

5. Direct advertising is meant to get people to buy the product right away. Indirect advertising is used to do things like tell people about a new product, get them interested in it, or change how they feel about it.

6. Manufacturer advertising is advertising that is paid for and sponsored by the manufacturer. Co-operative advertising is advertising where the costs are split between the manufacturer and wholesalers or retailers. Co-op ads try to increase demand for a certain product made by a certain company through a certain wholesaler or retailer. On the other hand, retail advertising is when a store owner advertises his store on his own to get people to come in.

Role of advertising plays in the promotion

1. Advertising changes consumers' tastes and preferences, changes the way a product works, and sets it apart from similar products on the market. People become more brand loyal and less price sensitive, and they see fewer alternatives to the brands being advertised.

2. Advertising tells people what features a product has, but it doesn't change how they feel about those features.

3. Potential competitors have to get people to stop being loyal to well-known brands and spend more on advertising.

4. Firms are protected from competition in the market, and the number of firms that could be competitors grows. This gives firms more freedom to make decisions.

5. Firms can set their own prices, and they don't usually compare themselves to others in terms of quality, price, or size. There might be less innovation.

6. Advertisers benefit from high prices and huge profits, which gives them even more reason to market their products. Compared to when there is perfect competition, output is limited.

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

Ans) Nature and role of Personal Selling:

Personal selling is selling from one person to another, as the name suggests. So, it has the unique advantage of being able to adapt the sales presentation or interaction to the needs of the buyer. Another unique benefit is that two-way communication and human interaction make it possible to get feedback right away. Because of these two unique benefits, personal selling is the most effective way to promote something.

In general, the role of personal selling in a company depends on the type of goods or services being sold and the way they are distributed. So, personal selling is used a lot when it comes to industrial goods. The salesperson helps the customer design the product's specifications, instals and starts up the product, solves technical problems by providing service after the sale, and helps the customer get the most out of the product. When it comes to consumer goods, however, personal selling is usually limited to the level of dealer, distributor, or stockiest. Some of the tasks include getting orders on a regular basis, making sure there are enough supplies, giving dealers advice on how to display products, and getting the desired amount of stock to move. In the same way, personal selling is more important in a business that sells door-to-door than in a business that sells through large stockists, distributors, or sole-selling agents.

Even though personal selling plays a different role in the strategies of different companies, the following tasks must be done as part of the selling function:

1. Sales generation.

2. Feedback and information about the market are gathered.

3. Customer service, which includes things like delivering goods, taking care of warranties, making sure repairs and spare parts are available on time, etc.

4. Performance of sales support tasks, such as monitoring the distribution function, collecting on credit, improving the relationship between the manufacturer and the dealer, putting the promotional programmes into action, etc.

In real life, the complexity of the selling task varies from company to company, even though it fits into one of the four categories above.

Selling a software program online is something that requires different kinds of knowledge in different fields, communications, marketing, sales, and even law. However, in this marketing example, you’ll see that it’s not that complicated to be relatively successful when it comes to selling your software program.

 In this example, we’re assuming that your software is finished, from a technical point of view, and that no “business” decision has been made regarding selling it. However, if you already have taken a few steps towards promoting your software, you might even find these eight steps easier to implement.

Create a Brand Image and Position Yourself Against the Competition

A brand is the entire range of elements that allow you to form a representation as well as an opinion of your software. Consider this step as a prerequisite for selling your program online. For a company to become a brand, they have to have the following elements:

A Name: It should be short, catchy, and also have a free domain name (example: Salesforce and salesforce.com).

A Logo: Logos, if done right, immediately give the customer an image of trust, seriousness, and innovation

Positioning: There’s nothing better than to start by drawing up a SWOT and the 4 Ps to get started. Just as a reminder, SWOT is short for Strengths, Weaknesses, Opportunities, and Threats. Also, the 4 Ps are Product, Place, Price, and Promotion.

Choose a Business Model

The software industry has been revolutionized with the arrival of the SaaS model, Software as a Service, in the 2000s, which only keeps growing, day-by-day. By choosing a distribution type, you’re also determining how to sell your software. Here are some things you should know about the main ones:

Software Licence: Buying a license allows an individual user access to a program for an indefinite period. This model is becoming less and less prevalent, but it’s still popular with ERP and Project Management software. The main advantage of this model is that users pay upfront, in full, even before trying out the system.

Subscription: Subscriptions have undoubtedly overtaken licenses with the massive success of SaaS, users only pay for what they use each month. It’s the preferred model of choice these days among online software providers. It generally includes the cost of software, updates, data management, and customer support. Subscriptions are mainly more popular because they let the user leave whenever they want, and they pay month-to-month, instead of all upfront. However, subscriptions can be a strain on a business, due to the reduced MRR (Monthly Recurring Revenue) at the beginning.

Commission: Even though it might be the least popular model on this list, it still may be financially interesting for your business. Normally, the software is free-to-use, but you receive a part of the revenue generated with your program.

License and Free Subscription: You could distribute your program for free if your main revenue is from ads, for example. This is the case for almost all the Google tools. However, this model is not very well accepted, for example, Google has stopped scanning Gmail emails to add ads. Another option you could take would be an Open Source program (GNU or GNL license), the source code is free, and you could offer support services to generate revenue.

Copyleft: Copyleft is an authorization given by the creator that aims to regulate the uses of the software. These types of software have no commercial purpose and are created to enrich overall knowledge and culture.

Create a Website

Thanks to the first half of this example, you can now dive headfirst into website development. A software company’s website should be simple and convincing. Here are the main elements that should be a part of your site:  Value Proposition, Presentation Video , Features, Pricing, Legal Page, Blog, Translation, Testimonials, References, Contact Us, Call to Action

Come Up With a Customer Acquisition Strategy

Once you’ve successfully implemented the previous steps, you can move on to the acquisition phase.

Tailor Your Customer and Technical Support

Customer and technical support are there, above all, to satisfy and retain customers. However, continuous contact with customers typically leads to the sale of additional products and services, and recommendations through word-of-mouth. Don’t miss out on extra revenue, pay attention to your customers!

Conclusion

Selling software online or the old-fashioned way means you have to be proficient in multiple fields like communication, marketing, operations, and law, just to name a few. By following the steps we just laid out, you already have a broad starting plan to launch and start selling your software.