BBA - II SEMESTERBBA 204- Marketing Management

Q1. Explain the components of traditional marketing mix in detail.(Definition of marketing mix, Explanation of components)

Answer:

The term Marketing Mix is one of the most famous terms used in the annals of Marketing. This term was coined by Neil H. Borden, when he began using the term in the late 1940s, while teaching his students. Borden derived the term from an idea formulated by James Culliton, when the latter equated a marketing manager as a mixer of ingredients.According to Culliton, a marketing manager needs to mix all the necessary ingredients in the right proportion, so as to address the needs of the market.

Components of a traditional marketing mixA marketing managers role is similar to that of a pastry chef who prepares a cake. The chef measures out the ingredients such as milk, eggs, flour and sugar in the correct proportion so that the cake is of the right taste and appearance. Depending on the type of cake, the chef also adds other ingredients such as flavors, nuts and finally, the icing. If any of the ingredients is out of proportion, the end result may not be edible. Similarly, a marketing manager should ensure that the components of the marketing mix are added in the correct proportion so as to address the marketing needs of the product. None of the ingredients should be more or less than the required quantity, as this will lead to the product being unacceptable. The marketing manager should include the required ingredients and customize the mix so that the product appears just right, in the eyes of the consumer.

The key ingredients of any marketing mix are Product, Price, Place and Promotion. These are also referred to as the 4 Ps of Marketing. Let us look at each of these components in detail.

ProductProduct refers to the physical entity offered by the company to its customers, which is a combination of tangible and intangible qualities.Product normally refers to the goods or services offered by a company which satisfies the needs or wants of a customer. In broad terms, product can include physical objects, services, ideas or a set of any of these items.

PricePrice refers to the amount of money which is paid by the consumer for the product. It is a very important element of the marketing mix. Price is a tool of revenue generation for marketing. The product should be priced right as consumers may not be willing to pay a very high price for an ordinary product.

The Price of a product is not fixed and is dependent on several factors. Pricing decisions need to be taken by considering the profit margins for the company as well as the pricing fixed by competition. Price mix needs to take into account the base price, discounts or allowances as well as the cost of freight, financing, credit, etc.

PlacePlace refers to the distribution systems of the organization or the channels through which the company plans to make the product available to the target market. Distribution channels are the sub-marketers or intermediaries who distribute the companys products. A company uses the distribution channels to ensure that its product reaches from the manufacturing plant to the customer.The channels should be selected and controlled in such a manner that the products reach the market at the appropriate time. The system should be capable of physically handling and transporting the products directly and through agents.

PromotionPromotion is the fourth component of the marketing mix. Promotion refers to the set of activities which communicate the features of the product to the customer and convinces the customer to buy it. The costs of promotion can be very high when compared with the manufacturing costs of the product.Hence, it is important to perform a break-even analysis when making promotion decisions. This will be useful in ascertaining whether it is worthwhile to spend money on acquiring additional customers, from the business perspective.

Q.2: Describe the methods of environmental analysis-SWOT, PEST.Strength, Weakness, Opportunity, Threat Political, Economic, Social, Technological Environment

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Strength, Weakness, Opportunity, Threat:SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats.Strengths: characteristics of the business or team that give it an advantage over others in the industry. For example, Microsofts strength is its operating system Windows and related software applications is used by a large customer base all over the world.Weaknesses: are characteristics that place the firm at a disadvantage relative to others. For example, weakness can be high attrition rate.Opportunities: external chances to make greater sales or profits in the environment. For example, changing lifestyle of people- the firm can make use of their capability to cater to the changing lifestyle of people which in turn could help company to gain profits.Threats: external elements in the environment that could cause trouble for the business. For example, the small retail shops owners found a great threat when big retailers began their operations in India.Political, Economic, Social, Technological Environment:PEST analysis stands for "Political, Economic, Social, and Technological analysis". It describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.The growing importance of environmental or ecological factors in the first decade of the 21st century has given rise to green business and encouraged widespread use of an updated version of the PEST framework. A PEST analysis incorporating legal and environmental factors is called apostle analysis. Specifically the PEST or PESTLE analysis is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization.Q.3: The brand is the symbol of the products personality. It is developed though diligent market research and is based on the customers needs and wants. Explain the various steps which are undertaken in the formation of a brand with examples.Definition of brand Steps involved in brand development Examples

Answer:

Definition of brand:The term brand has a broad meaning and is applied to all visible identification such as trademarks, symbols, pictures, package designs and signage with distinctive lettering. The brand ensures that the product has higher recall in the minds of the customers and that there is a guarantee on quality and standards as per the advertising for the brand. Branding provides a specific name to the product or group of products in an organization.

Steps involved in brand development:The various steps which are undertaken in the formation of a brand name and logo are as follows a) Selection of brand name The brand needs to convey a particular meaning to consumers. The first step in the creation of the brand is to select the elements such as brand name and logo. It is important to choose a good brand name which is easy to remember, recall and pronounce. The brand name should also be precise and appealing to the consumer and must communicate what the product stands for in the market place.b) Selection of logo A logo is the symbol of the brand represented as a picture. Along with the brand name, the logo helps to identify the brand. It is a creative symbol which reinforces the visual imagery of the brand in the minds of the consumer. It becomes inseparable from the brand over time. The logo must increase the brands relevance and staying power in the market. Example:Girl with butter and sandwiches Maul Butterc) Legal rights The brand name and logo should be chosen so that it can be registered and protected legally under the laws of the land.d) Characteristics of the brand The brand name should be unique, have pleasant associations and should be appealing. A few examples are Good Knight, Milkmaid, Magi, Boost and Fair & Lovely. The brand name or logo should not be used generically or commonly, as this leads to the dilution of the brand value. A few examples of brand names which are being used commonly are Xerox, Band-Aid, Aspirin, Kodak and Eveready.e) Permanence The brand name and logo should be stable and should not be affected by time. The brand should not be named after some item which is in fashion or is chic at the moment as these may lose value after some time. Some examples of enduring brands are Eicher, Singer and Vicco Vajradanti.f) Positioning The brand should project the value of the product in the consumers minds. It is important to develop the right positioning platform for the brand so that this value proposition reaches the customer.g) Brand portfolio The brand portfolio of the company must best lengthened by activities such as the right type of acquisitions, monitoring through the various cycles of the product, correct distribution and visibility, maintaining the product quality and analyzing the performance as well as the market perception of the brand.Examples: Apple More than just products, this company offers a lifestyle, one that is hip, fun, and on the cutting-edge of technology BMW The success of this automobile manufacturer stems largely from the fact that they have targeted a specific demographic (the young and upwardly mobile among us) and in doing so, have turned their product into something elite that other aspire to attain. Coca Cola Use of the companys name as brand name can also create strong value, we all know soda is bad for us, and yet, everyone drinks it. McDonalds As fast-food manufacturers go, you cant find a more widely recognized name.

Q.4: Define Product mix. Explain the factors determine the decisions of the Product mix.Definition of Product mixFactors determine the decisions of the product mix

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Definition of Product mix:A product mix (also called product assortment) is the set of all product lines and items that a particular seller offers for sale to buyers." An organization with several product lines has a product mix. Product mix need not consist of related products. In other words, product mix is "the composite of products offered for sale by a firm."

Factors determine the decisions of the product mix:The following factors, usually, influence the product mix decision of a firm:i) Changes in market demand:Changes in market demand are one of the factors influencing the product mix. When there is a change in market demand for a product, there will be a change in the product mix. If the demand for any new product has been constantly increasing, and if the firm is capable of producing that product economically, efficiently and profitably and competing with its rivals, then, it can include the new product in its product mix. In case the demand for any of its existing products has been declining constantly, then, it can remove that particular product from its product mix and can also suspend its production.ii) Cost consideration (i.e., Cost of production):The cost consideration, i.e., the cost of production, is one of the factors influencing the product mix. If a firm is able to produce a new product at a lower cost with its available machinery, labor, etc., it can produce the new product and expand its product mix. This will help the firm to bring down the cost of production of its existing products. Thus, cost consideration influences the product mix of a firm.iii) Advertising and distribution factors:A firm using a wide net-work of advertising and distribution channels can think of adding new products to its product line, as they can be distributed with the help of the same network. This will also bring down its advertising and distribution costs. Thus, advertising and distribution factors influence the product mix of firm.iv) Image of the Producer:Sometimes, product mix of an enterprise is changed to improve the image of the producer. For instance, a decision may be taken to produce product of only high quality just to improve the image of the producer.v) Objective of maximization of profits:The objective of maximization of profits influences the product mix. The product mix is required to be changed so as to earn maximum profits. The production of less profitable products may be stopped and the production of more profitable products may be increased to maximize profits.vi) Competitors action and reaction:A firm may have to change its product mix due to competitors' action and reaction. For instance, if the competitors have made any change in packing, size, color, price, etc. of their products, relevant changes have to be made in the product mix of the enterprise also.vii) Financial resources of the firm:Financial resources of the firm also decide its product mix. A firm may add new product lines according to its financial capacity during the period of prosperity so as to increase its profitable sales volume or dropout some existing items during the period of depression, when its financial resources are not adequate to carry on the production of all the products.viii) Production influences:Production capacity of a firm influences its product mix. A firm may change its product mix with a view to use its production capacity more effectively and efficiently, and thereby, reduce its overall net production cost. A firm may add new product line when the production of a product has been discontinued by its rival firms. A firm may also add new product lines in order to make a better use of its by-products or waste products. For instance, sugar factory may undertake the production of paper or card board by using the bagasse (i.e., sugarcane residue) instead of selling the same at throw-away price, and thereby, add a new product line.ix) Marketing efforts:Sometimes, the change in the product mix of an enterprise may be necessary to get the maximum results of marketing efforts of the enterprise. For example, if a product is not getting the desired response from the market, a decision may be taken to stop the production of such a product and the resources of the enterprise may be diverted to produce a new product.

Q.5: Define Green Marketing. What are the reasons for which companies adopt green marketing?Definition of Green marketing Reasons for which companies adopt green marketing

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Definition of Green marketing:Green marketing is a type of marketing in which the products and services of an organization are sold to its customers, based on their environmental benefits. The product or service is promoted so that it is eco-friendly or that it is packaged in eco-friendly manner using recyclable material. According to the American Marketing Association, Green marketing is the marketing of products that are presumed to be environmentally safe. It is also called as Environmental or Ecological marketing.

Reasons for which companies adopt green marketing:Green marketing has also served to increase the markets for businesses, as well as provide a competitive advantage. The reasons for which companies should adopt green marketing practices a) Corporate Social Responsibilities (CSR) This has become a watchword for organizations across the globe today. While companies exist for making profits, it is also important for companies to give back in some way to the environment and society in which they function. Companies have some social responsibilities to the countries and societies in which they operate and hence they cannot be driven by the idea of increasing their bottom lines only.b) Governmental pressure Many governments across the globe have evolved legislation to ensure that companies function within the sphere of business and also that they are accountable to the society and country, in case of violation of laws or exploitation of the environmental resources.

Q.6: Explain the personal, socio-cultural, Psychological determinants of consumer behavior.Definition of consumer behavior Personal determinants- Consumer demographics, Consumer psychographics Socio-Cultural determinants- Social factors, Cultural factors Environmental factors Psychological determinantsPerception, Learning, Memory Motivation

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Definition of consumer behavior: Consumer behavior is the field of study which analyses the behavior of consumers on the basis of the individual consumers characteristics and on the buying process, taken as a whole.Personal determinants- Consumer demographics, Consumer psychographics: There are two main personal factors which influence an individual consumer, as follows Consumer demographics These are the factors such as age, education level, income group, economic capacity, etc., which determine the buying behavior of consumers. For example, a consumer from a lower class may buy unbranded products which are low-priced, while a middle class or upper class consumer may buy branded products with abettor quality and increased price.Consumer psychographicsThese are the factors such as attitude, values, lifestyle, self-image, status and prestige which have an impaction the buying behavior. While the consumers may have the same or similar demographic profile, there may be a large variance in the psychographic profiles which influence the buying decisions. For example, consumers who have similar demographics might want to dress differently and pay different prices for clothes.Socio-Cultural determinants- Social factors, Cultural factors Environmental factors:The socio-cultural factors which determine buyer behavior can be classified as follows a. Social factors As per the adage No man is an island, individuals cannot live by themselves in society. Each individual has a definite role in societal activities and is also influenced by the social factors. The social groups, with which the individual interacts, have a bearing in the consumer behavior. A consumers social groups are of three types, namely, intimate groups (Family, friends, peers, etc), secondary groups (groups based on occupation, residence, professional bodies, etc) and society (this is the larger social tier or group to which the individual belongs). All the social groups tend to influence the thinking and behavior of the consumer. b. Cultural factors Culture refers to the set norms or rules or conduct which has been taught to the individual from childhood. A persons culture influences food, clothes, locality of residence, practices. Culture accompanies an individual from cradle to the grave. Hence, culture also plays a significant role in the social and buying behavior of the consumer. For example, a persons religion decides the festivals to be followed. The consumer may shop for new clothes only during times of such festivals.c. Environmental factors In the current age of information overload, the buyer is exposed to heavy advertising and promotion of products through diverse media such as television, internet, etc. The buyer is influenced into buying a product due to the extensive marketing campaigns launched by the organizations. Initial discounts, attractive window displays, free trial or samples being handed out, all serve to induce the buyer to purchase the product. Thus, environmental factors are a strong determinant of buyer behavior.Psychological determinantsPerception, Learning, and Memory Motivation:There are certain psychological factors which influence the buying decisions.a. Perception This is the process in which the buyer assimilates the information which comes to him from numerous sources. Based on the information input, the buyer then forms an opinion on the product or idea. The perception of a particular situation is different from one individual to another. The same object is perceived differently by different individuals. A favorable perception about the product makes the buyer to purchase the product.b. Learning When individuals learn new ideas, they tend to evaluate their ideas and beliefs and try to incorporate the new learning into them. The buyer can be made to learn new ideas by constant advertising. Marketing managers can use positive reinforcement tools to make the customer learn the product better.c. Memory Brand visibility and constant reinforcement through marketing communication and advertising helps to embed the product in the buyers minds. This also leads to better recall of the brand, which is a crucial factor to influence the buying decisions.d. Motivation Motives refer to the needs which have been awakened in buyer. The buyer gets motivated to achieve their goals or motives, when they become aware of such needs. An effective marketing manager succeeds in awakening the need of the customer for the product. This leads to a buying decision by the customer for the product.