marketing management - mb0030

8/9/2019 Marketing Management - MB0030

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Set - I & IIMarketing Management

Sikkim Manipal UniversityLearning Centre: Wisdom Educational Institute, Abu Dhabi (UAE)

Course Name MBA (Semester II)

Marketing Management

AssignmentSubject Code: - MB0030

Prepared / Submitted By: - Deepti Sajesh

MBA Semester IIRoll No 530910495 Page 1


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Roll No: - 530910495



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Set - I

Q1. Explain BCG Matrix.

Answer:

BCG (Boston Consultancy Group) Matrix is a Strategic Planning model used in assessing the existing

businesses. Companies that are large enough to be organized into strategic business units face the

challenge of allocating resources among those units. In the early 1970's the Boston Consulting Group

developed a model for managing a portfolio of different business units (or major product lines):

BCG matrix: This model is used to identify companys SBUs (Strategic business unit) position in the

market. This model identifies the SBUs strength, weaknesses, opportunities and threats on the basis of

market growth rate and relative market share. This model is also known as growth share matrix.

BCG Growth Share Matrix -

Axis components:

1. Market growth rate: The rate at which market is growing

2. Relative market share: Market share of the SBU divided by the market share of the largest

competitor.



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Model components:

Star: This category represents the high market share and high industry growth. SBUs in this category

require large investment to defend their position. SBU will turn as cash cow after some time.

Cash cows: This category represents the low growth rate and high market share which is the

characteristic of SBU operating in mature industry. Here company needs less investment to hold their

position. Hence it generates more cash or in management terms we say cash cow can be milked.

Question Mark: This category represents high market growth and low market share. SBUs in this

category has two options, either to invest heavily and bring them to star position or divest / liquidate

from that position.

Dogs: SBUs in this category generates less cash for the company as it operates in low growth and low

market share. Usually companies will not invest in this category and try to liquidate or divest.

Under the growth-share matrix model, as an industry matures and its growth rate declines, a business

unit will become either a cash cow or a dog, determined solely by whether it had become the market

leader during the period of high growth. While originally developed as a model for resource allocation

among the various business units in a corporation, the growth-share matrix also can be used for

resource allocation among products within a single business unit. Its simplicity is its strength - the

relative positions of the firm's entire business portfolio can be displayed in a single diagram.

Limitations:

The growth-share matrix once was used widely, but has since faded from popularity as more

comprehensive models have been developed. Some of its weaknesses are:

Market growth rate is only one factor in industry attractiveness, and relative market share is only

one factor in competitive advantage. The growth-share matrix overlooks many other factors in these

two important determinants of profitability.



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The framework assumes that each business unit is independent of the others. In some cases, a

business unit that is a "dog" may be helping other business units gain a competitive advantage.

The matrix depends heavily upon the breadth of the definition of the market. A business unit may

dominate its small niche, but have very low market share in the overall industry. In such a case, the

definition of the market can make the difference between a dog and a cash cow.

While its importance has diminished, the BCG matrix still can serve as a simple tool for viewing a

corporation's business portfolio at a glance, and may serve as a starting point for discussing resource

allocation among strategic business units.

Q2. Describe the Marketing Mix for Pepsi.

Answer: Marketing Mix - The product, its price, promotion and distribution blended together to get

favorable response from the customer.

Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives.

Marketing mix has a classification for these marketing tools. These marketing are classified and called

as the Four Ps i.e. Product, Price, Place and Promotion.

The most basic marketing tool is product which includes product design, quality, features, branding,

and packaging. A critical marketing tool is price i.e. the amount of money that customers pay for the

product. It also includes discounts, allowances, credit terms and payment period.

Place is another key marketing mix tool. And it includes various activities the company undertakes to

make the product accessible and available to the customer. Some factors that decide the place are

transport facilities, channels of distribution, coverage area, etc.

Promotion is the fourth marketing mix tool which includes all the activities that the company

undertakes to communicate and promote its product to target market. Promotion includes salespromotion, advertising, sales force, public relations, direct marketing, etc

The Pepsi-Cola drink contains basic ingredients found in most other similar drinks including

carbonated water, high fructose corn syrup, sugar, colorings, phosphoric acid, caffeine, citric acid and

natural flavors. The caffeine free Pepsi-Cola contains the same ingredients but no caffeine.



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Some of the different and varied brands of Pepsi are as follows:

1. All Sport

2. Aquafina

3. Caffeine-Free Pepsi

4. Crystal Pepsi

5. Diet Pepsi

6. Gatorade7. Izze

8. Jazz

9. Josta

10. Kas

11. Manzanita Sol

12. Mirinda

13. Mountain Dew

14. Mountain Dew AMP

15. Mountain Dew LiveWire

16. Mountain Dew MDX

17. Mug Root Beer

18. Pepsi

19. Pepsi Blue

20. Pepsi Cappuccino

21. Pepsi Max

22. Pepsi One

23. Pepsi Samba24. Pepsi Tarik

25. Pepsi Twist

26. Propel Fitness water

27. Sierra Mist

28. Slice

29. So Be

30. Storm

31. Teem

32. Tropicana Products

33. Tropicana Twister

Pepsi Price

Pepsi again decides it price on the basis of competition. The best think about the company

Pepsi is that it is very flexible and it can come down with the price very quickly. The

company is renowned to bring the price down even up to half if needed.

But this risk taking attitude has also earned Pepsi losses. Though lowering the price would

attract the customers but it would not help them cover up the cost incurred in production



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hence causing them losses. This was the situation earlier but now Pepsi is a full-fledged

and growing company. It has covered all its losses and is now growing at a rapid rate.

Pepsi - Place

Pepsi again has spread worldwide. Pepsi when entering a new market does not go in alone

but it looks for partners and mergers. Till now Pepsi has collaborated with companies like

Quaker Oats, Frito-lays, Lipton, Starbucks, etc.

Pepsi like Coke has spread all over the world. It is because of this worldwide spread that

now it is coming up with Advertisements which can be broadcasted in the different

nations in the world. The recent example which would be the Pepsi advertisements having

David Beckham as it brand ambassador.

Promotion

Promotion is one of the four aspects of marketing. Promotion comprises four

subcategories:

1. Advertising

2. Personal selling

3. Sales promotion

4. Publicity and public relations

Pepsi started with its blind taste tests known as the Pepsi Challenge. The challenge is

designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are

identical drinks, with no meaningful differences. The challenge takes the form of a taste

test. At malls, shopping centers and other public locations, a Pepsi representative sets up a

table with two blank cups, one containing Pepsi and one with Coke. Shoppers are

encouraged to taste both colas, and then select which drink they prefer. Then the



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representative reveals the two bottles so the taster can see whether they preferred Coke or

Pepsi. If Pepsi is revealed, the shopper is given a small prize.



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its customers, realizing that they may there best collaborators. Customers feedback drive

there product development.

To be the market leader and satisfy the requirements of its customers, the company

has set certain objectives, these are

a. Improve Quality

b. Enhance Efficiency

c. Minimize Cost

d. Increase Productivity

Over the previous years company has put in its best efforts to manufacture quality cars

designed for its customers. In Pakistan more and more people want to experience the

unique pleasure of motoring. Exhaustive, in-depth research and consumer surveys

conducted over the past years revealed trend sof customers and the environmental factors

relating to use.

Toyotas Marketing Policy

Toyotas Slogan Reliability n Motion represents its emphasis son strong trustworthy

and lifelong automobiles. It has many brand loyal customers and is considered as market

leader. In Pakistan it ahd aimed at various segments with their variety of models of

Toyota Corolla, so customers in every segments can be satisfied.

Different Classes of Toyota Corolla was introduces in Pakistan are:


Model Descriptions Segments

SE Saloon 1600 ccIndustrialist, Well Established Businessman,

Professionals

GLi 1300 ccBusinessman, Top level management of

Multinationals, Professionals, Gov. high Officials

Xli 1300ccMiddle-level executives, Gov. departments &

Organizational, Professionals, Armed Forces.

2.0D/ 2.0D SaloonProfessionals, Business Executives, Who are fuel

Conscious.


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Toyota had got nationwide dealer network comprises of 25dealers at Karachi, Lahore,

Faisalabad, Mirpur. Islamabad, Peshawar, Sialkot, DI Khan, Multan, Quetta and Larkana.

This spread of networking shows how Toyota is sincerely busy in developing companys

customer relationship and winning the hearts of brand loyal as well as attracting potential

customers.

2. Suppliers -

Suppliers constitute a second component in a typical Micro organizations environment.

Toyota had to respond not only to the customers they supply, but also the source from

they receives supplies. Suppliers are given importance & respect by Toyota. It

continuously aims at developing strong relationship with its suppliers. This is done to

ensure that Toyota suppliers provide a quality material which is most important factor for

Toyota vehicles.

Japan is the major supplier of CBU or completely buildup vehicles. Also CKD kits or

completely knocked own kits are supplied from Japan. CKD Kits mainly comprises of

engine of vehicles. The vehicles which are assembled in Pakistan are comprises of 65%

locally manufactured parts.

Toyota Indus aims for good relation with both local & foreign suppliers. To achieve

maximum level of satisfaction is Toyotas mission. This can be proved by the fact that

dealership is authorized to these selective peoples who offers 3 Ss. That is Sales, Service,

and Spare parts. This is done to ensure convenience for its customers. They are offering

the following services to cater to the needs of their customers:

a. One year free servicing from any Toyota service center all over Pakistan.

b. Free checkup camps are set annually.

c. Spare parts easily available all over Pakistan

d. The dealership network comprises of seventeen dealership all offering sales,

services and spares.

e. The customer retention department at the dealership is also improved and

consolidated periodically.

The company believes on the fact that the favorable supplier relations lead to improve

quality, better shipping arrangements early warning of major price changes and advance

information abot technological or marketplace developments. So the aim, is to develop

friendly, professional relations with suppliers in which both will profit.



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5. Intermediaries Banks, Leasing Companies & car Agents are some of the

intermediaries for Toyota. These intermediaries basically giving boost to the sales

of Toyota, by offering cars to the customers, in easy installments and making the

cars affordable to the customers to the higher extent.

Macro Environment Toyota

The largest societal forces that affects the microenvironment demographic, economic,

natural, political, technological and cultural forces.

These factors represent constraints within which all

organizations including the automobile industry must

function. The various components of general

environment are:

1. Political

2. Economic

3. Demographic

4. Cultural

5. Technological

1. Political Factors

Government at all levels is an important component of the general environment no

organisation or industry is immune from the various decisions made by the government.

The Pakistan, governments in consistent polices, frequent change in duty tariff and

smuggling are main reasons on unstable market conditions. Like other motor companies

Toyota is also affected by current changing polices of Government.

Previously, automobile industry had to cope up with 77000 yellow cabs that were

imported during the yellow cabs scheme and later turned lose to the market after a change

of government & policy trapped.



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In 1995, all the previous taxes and duties were rolled into one import duty of 30percent on

CKD kits and CBU vehicles. In 1996 the sales tax on CBU was increased cost to

18percent. 1997 the industries of production recommended that duty on CKD be reduced

from 40percent to 35 percent were the cars sale should be exempted from CVT and the

deletion program should be accelerated.

Just few days back general sales tax has been increased to 15percent promoting more

price like. So there is going to be a increase of Rs.20000 in vehicle.

2. Economic Forces-

Government economic polices at federal level clearly influence the ability of the

industries t survive and progress. Inflation is the major economic factor that had affectedthe Pakistan. Automobile industry including Toyota. The current inflation rate is 21& to

23% annually price in the Auto market were deregulated in 2000and grew almost 20% to

30 % per annum to allow Toyota to bring their prices at profitable levels. After 3years of

Still Market, the market picked up. The recent increase of 15% of sales tax is however,

going to result in price increase.

3. Demographic Forces-

Society holds a global or summary belief that an organization is proper and worthy of

support. Toyota takes pride being trusted name allover Pakistan. Its vehicle is regarded as

a status symbol. It is the guided principle of Toyota which had strongly developed the

trust of people.

4. Cultural Forces-

Toyota respects the culture and customers of every nations and community and

contributes to the economic and societal development through corporate activities in the

communities. Toyota believes in honoring the language and spirit of law of every nation

and undertakes open and fair corporate activities to be a good corporate citizen of the

world. This is the reason that Toyota is proud of the fact that Pakistani society considers

Toyota vehicle to be a symbol of reliability, comfort, luxury and have to be trusted.



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5. Technological Forces-

Technology is of particular importance because it has been and continues to be the main

source of increase in productivity. Despite changes in the means used to motivate people

an dthe variety of incentives that have been offered to stimulated production the resulting

increase had been negligible when compared to that of created technology.

The locally produced Toyota Corolla introduced in may 1993is now in its 11th year. Its

excellent quality, low maintenance cost and high resale value had won it the support and

loyalty of its customers. Product diversification and a wide range of colors has allowed

customers to exercise greater options and has sustained this threat. The total companys

product range comprises of 8 variant of Corolla & 5 variant of Hilux. As a result of the

Safety First commitment; for the first time in Pakistan SRS Secondary Restrain

System Airbags have been introduced in the GLI Automatic & GLI manual models, side

impact bars which protects vehicles for side collusion have been however routinely fitted

in all corolla variants since inception. The process of making a car more durable includes

Pitospaate Primer, total immersion in a catholic Electro-deposit premier, which assures

long term anticorrosion and an extra thick color coat that is better than all others, ensuring

that New Car looks New for years to come.

Q4. Write a short note on consumer buying behavior.

Answer:

Consumer behavior refers to the mental and emotional process and the observable

behavior of consumers during searching, purchasing and post consumption of a product or

service.

Consumer behavior involves study of how people buy, what they buy, when they buy and

why they buy. It blends the elements from psychology, sociology, sociopsychology,anthropology and economics. It also tries to assess the influence on the consumer from

groups such as family, friends, reference groups and society in general.

Buyer behavior has two aspects: the final purchase activity visible to any observer and the

detailed or short decision process that may involve the interplay of a number of complex

variables not visible to anyone.



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Factors Affecting Consumer Buying Behavior

Consumer buying behavior is influenced by the major three factors:

1. Social Factors

2. Psychological Factors

3. Personal Factors.

A. Social Factors

Social factors refer to forces that other people exert and which affect consumers purchase

behavior. These social factors can include culture and subculture, roles and family, social

class and reference groups.

Example:

By taking into consideration Reference group, these can influence/ affect the consumer

buying behavior. Reference group refers to a group with whom an individual identifies

herself/ himself and the extent to which that person assumes many values, attitudes or

behavior of group members. Reference groups can be family, school or college, work

group, club membership, citizenship etc.

Reference groups serve as one of the primary agents of consumer socialization and

learning and can be influential enough to induce not only socially acceptable consumer

behavior but also socially unacceptable and even personal destructive behavior. For

example, if fresher student joins a college / university, he/she will meet different people

and form a group, in that group there can be behavior patterns of values, for example style

of clothing, handsets which most of group member prefer or even destructive behavior

such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So,

according to how an individual references him / her to that particular reference group, this

will influence and change his/her buying behavior.

B. Psychological Factors

These are internal to an individual and generate forces within that influence her/his

purchase behavior. The major forces include motives, perception, learning, attitude andpersonality.

Example:

Attitude, is an enduring organization of motivational, emotional, perceptual and cognitive

processes with respect to some aspect of our environment. Consumer form attitude



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towards a brand on the basis of their beliefs about the brand. For example, consumers of

Sony products might have the belief that the products offered by Sony are durable; this

will influence those customers to buy Sony products due to this attitude towards the

brand.

C. Personal Factors

These include those aspects that are unique to a person and influence purchase behavior.

These factors include demographic factors, lifestyle, and situational factors.

Example:

Lifestyle is an indicator of how people live and express themselves on the basis of their

activities, interests, and opinions. Lifestyle dimension provide a broader view of people

about how they spend their time the importance of things in their surroundings and their

beliefs on broad issues associated with life and living and themselves. This is influencedby demographic factors and personality.

E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and

less informal clothes like jeans as compared to a Mechanic or Civil engineer. So

according to their lifestyle and profession, the buying behavior of people differ from one

another.



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Q5. Company A has homogeneous consumer preferences in the market;

Company B sells different variants of soaps, While Company C is a small firm

with constrained resources. What do you think is the most suitable market

coverage strategy for the all the three companies.

Answer:

One of the most important decisions that a company makes is what market coverage

strategy to use for a brand. In analyzing any one product, the first thing to consider is the

market. In case of company A, market is too broad to segment effectively (since it

homogeneous consumer preferences), so it makes sense to narrow the market to what can

be called a focus market, in this case the consumer preferences for market. In a sense, the

focus market rules out products that are not substitutes. For example, a marketing analysis

for Gatorade (which has about a 90% market share) should not exclude water since that is

a substitute for a sports drink and a possible source of new sales. Otherwise the analysis

would be stuck with a market definition of sports drinks and thus virtually no practical

way of increasing sales.

Consumer segmentation variables include demographics (e.g., age, gender and family life

cycle), psychographics (e.g., self concept and lifestyle), usage rate (e.g., heavy and light

users) and benefits sought. In this case benefits sought may be batteries for normal vs.

high-drain devices. Company A has three basic choices for market coverage strategy:

Undifferentiatedignore segmentation variables and go after the whole market with one

brand. Differentiatedoperate in all or several segments of the market and design

separate brands for each. Concentratedoperate in one or only a few segments of the

larger market following a niche strategy with one brand. A way of telling what market

coverage strategy a company is using is the number of separately-branded products that it

offers in any one market. Gap could have regional variation in product assortments (say

for different climates), but if there was only one Gap name, the market coverage strategy

would be undifferentiated.



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Once a company chooses a market coverage strategy for a brand it knows its target

market. A concentrated market coverage strategy leads to one target market as does an

undifferentiated market coverage strategy. A differentiated market coverage strategy leads

to as many target markets as there are brands. A company must be sure to avoid the trap

of defining a target market by who is in that market before analyzing the needs and wants

of the target market. That's why we say that what the market is comes first, and then the

choice of a market coverage strategy.

For company B, which sells different variant of soap, the growth is not as high as there is

expansion in the market for soaps. The cash cows for HLL include Lifebouy, Lux, Liril,

Rexona and Breeze. The company's premium soap include Dove, Pears. The company has

come up with a new product offering i.e. Fair & Lovely soap. The strategy for 2006-07

would be to increase the market share from existing 63% to 70%. The strategic changes

taking 4 P's into consideration would be:

Product: I would continue with the existing portfolio of the products and would

concentrate on coming with new fragrances on different soaps than launching new soaps.

I would position Dove and Lux International soap very urban rich women who are extra

conscious for their complexion. Pears, Lux International would be positioned for the

urban and rural rich. For the consuming urban class, Liril, Rexona, Pears and Lifebouy

International would be positioned. I would also come up with 40gm packaging for

different products. I will also be thinking of extending popular brands of cosmetics in the

soap segment by that decision would be based on the popularity and acceptance of that

particular brand (Brand Extension).

Price: I would be try to customize the packaging of various products on the basis of price

points. e.g. I will come up with the pricing of Rs 5, Rs 10 and Rs 15 for different

products. I would try to experiment it with the products positioned for consuming class.

Promotion: For promotion, apart from continuing the existing strategy of concentrating

on T.V. channels, I would try to focus on the promotional campaign in rural sector. I

would also concentrate on promoting through radio and sponsoring the programs e.g.



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'Krishi Darshan' and 'Aap ka Swasthaya' programs that have greater number of audience.

The advertising for them would have a pastoral and cultural looks.

Place: As the marketing channels of the company are already established I would try to

increase the penetration in the rural sector to the extreme remote areas which are not

touched till now. I would try to reduce the delivery time of the products by choosing and

increasing the strategic locations of warehouses.

In case of company C, which is small firm, which constrained resources, It is often

argued that governments should promote SMEs because of their greater economic benefits

compared to large firms-in terms of job creation, efficiency, and growth. Share of Firms

and Employment. In most developing countries, microenterprises and small-scale

enterprises account for the majority of firms and a large share of employment. In Ecuador,

for exarnple, firms with fewer than 50 employees accounted for 99 percent of firms and

55 percent of employment in 1980; in Bangladesh, enterprises with fewer than 100

workers accounted for 99 percent of enterprises and 58 percent of employment in 1986.

Labor Intensity. Small firms employ a large share of the labor force in many developing

countries, but are they more labor demanding than large firms (for a given scale of

production)? Many analysts argue that, within industries, SMEs are more labor intensive

than large firms. However, the evidence suggests that enterprise scale is an unreliable

guide to labor intensity: many small firms are in fact more capital-intensive than larger

firms in the same industry.! Labor intensity exhibits more variation across industries than

among firm-size groups within industries-leading some authors to suggest that efforts to

make economic growth more labor-demanding should focus on altering the pattern of

demands in favor of labor-intensive industries rather than on supply-side efforts to change

the size distribution of firms.

Job Creation. Apart from labor intensity, it is often argued that SMEs are important for

employment growth, i.e., job creation. Here again, the evidence does not support the

conventional wisdom. While gross job creation rates are substantially higher for small

firms, so are gross destruction rates. This is because small firms exhibit high birthrates

and high death rates, and many small firms fail to grow. In developed countries, net job



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creation rates i(gross job creation less gross job destruction) do not exhibit a systematic

relationship to firm size.3 For example, in the United States between 1973 and 1988,

despite a widespread belief to the contrary, small manufacturing firms did not consistently

create more jobs on a net basis (after allowing for jobs eliminated and 4 firms that went

out of business) than large firms. There is some evidence that the same conclusion holds

for developing economies. Efficiency. Measures of enterprise efficiency (e.g., labor

productivity or total factor productivity) vary greatly 'both within and across industries.

Firm size may be associated with some other factors that are correlated with efficiency,

such as management skill and technology, and the effects of the policy environment.

Wages and Benefits. While there are many exceptions to the basic pattern, the weight of

evidence suggests that larger employers offer better jobs in terms of wages, fringe

benefits, working conditions, and opportunities for skills enhancement, as well as. Social,

Political, and Equity Justifications. SMEs are often said to contribute to a more equal

distribution of income or wealth. To the extent that SME owners and workers are in the

lower half of the income distribution, promoting the growth of SMEs may lead to a more

equitable distribution of income. It is often argued that SME promotion is justified on

grounds of the job-creating prowess of SMEs or of their greater efficiency and growth.

Attempts are often made to draw a causal link between SMEs and poverty alleviation so

as to justify policies and subsidies in favor of SMEs. But the empirical evidence

supporting many of these claims is very mixed, making it difficult to justify SME

promotion on the basis of inherent economic benefits of smallness.

Q6. Describe various bases for positioning the product with example.

Answer: Bases for positioning the Product:-

Overcoming positioning difficulties enables the company to solve the marketing-mix

problem. Thus seizing the high-quality position, requires the firm to produce high quality

products, charge a high price, distribute through high-class dealers and advertise in high-

quality media vehicles.



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The bases of positioning strategies that are available are:

a) Attribute Positioning

A company positions itself on an attribute such as size or number of years in

existence. Sunfeast position its snack brand as bigger lighter and crisper.

b) Benefits Positioning

The product is positioned as a leader in certain benefit. Automotive Hyundai

Santro.

Headline:

Indias best loved family car is now Indias simplest car to drive

Sub headline:

Hyundai introduces Santro zip line automatic. No shifting gears, no clutch no

problem.

Baseline:

The simplest car to drive (Positioning)

c) Use or Application Positioning:

Positioning the product as best of some use and application. For example kenstar

positioned its product as unexpectedly cold.

d) User positioning:Positioning the product as best for some user group. For example in Parle-G, the

boy was positioned as rock star. This advertisement basically targets kids and boys.

e) Competitor Positioning:



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The product claims to be better in some way than a named competitor. For

example, in the advertisement of Matrubhumi, base line says, In the wake of ABC

results, Matrubhumi celebrates the addition of 33960 copies while nearest competitor

laments the loss of 7258 copies. Planner, take note.

It is directly mentioning its and competitors sales of news paper.

f) Product Category Positioning:

The product is positioned as the leader in a certain product category. Bajaj CT100

was positioned as leader in the entry segment bikes.

g) Quality or Price Positioning:

The product is positioned as offering best value. Vegitable oil brand dhara position

itself as

Anokhi shuddata, anokha asar this means, company offers unique purity and

unique effect.

Set II

Q1. Write a short note on product life cycle.

Answer:

We define a product as "anything that is capable of satisfying customer needs. This

definition includes both physical products (e.g. cars, washing machines, DVD players)

as well as services (e.g. insurance, banking, private health care).

Businesses should manage their products carefully over time to ensure that they deliver

products that continue to meet customer wants. The process of managing groups of brands

and product lines is called portfolio planning.



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The stages through which individual products develop over time is called commonly

known as the"Product Life Cycle".The classic product life cycle has four stages

(illustrated in the diagram below): introduction; growth; maturity and decline

Introduction Stage

At the Introduction (or development) Stage market size and growth is slight. it is possible

that substantial research and development costs have been incurred in getting the product

to this stage. In addition, marketing costs may be high in order to test the market, undergo

launch promotion and set up distribution channels. It is highly unlikely that companies

will make profits on products at the Introduction Stage. Products at this stage have to be

carefully monitored to ensure that they start to grow. Otherwise, the best option may be to

withdraw or end the product.

Growth Stage

The Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to

an increase in output (economies of scale)and possibly better prices. At this stage, it ischeaper for businesses to invest in increasing their market share as well as enjoying the

overall growth of the market. Accordingly, significant promotional resources are

traditionally invested in products that are firmly in the Growth Stage.

Maturity Stage



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The Maturity Stage is, perhaps, the most common stage for all markets. it is in this stage

that competition is most intense as companies fight to maintain their market share. Here,

both marketing and finance become key activities. Marketing spend has to be monitored

carefully, since any significant moves are likely to be copied by competitors. The

Maturity Stage is the time when most profit is earned by the market as a whole. Any

expenditure on research and development is likely to be restricted to product modification

and improvement and perhaps to improve production efficiency and quality.

Decline Stage

In the Decline Stage, the market is shrinking, reducing the overall amount of profit that

can be shared amongst the remaining competitors. At this stage, great care has to be taken

to manage the product carefully. It may be possible to take out some production cost, to

transfer production to a cheaper facility, sell the product into other, cheaper markets. Care

should be taken to control the amount of stocks of the product. Ultimately, depending on

whether the product remains profitable, a company may decide to end the product.

Examples

Set out below are some suggested examples of products that are currently at different

stages of the product life-cycle:

INTRODUCTION GROWTH MATURITY DECLINE

Third generation mobile

phones

Portable DVD Players Personal Computers Typewriters

E-conferencing Email Faxes Handwritten

letters

All-in-one racing skin-suits Breathable synthetic

fabrics

Cotton t-shirts Shell Suits

iris-based personal identity

cards

Smart cards Credit cards Cheque books

Q2. Explain the various categories of brand sponsorship with examples.

Answer:



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Sponsorship plays a significant role in the planning and execution of any brand

promotion. Sponsors consider return on investment (ROI) when measuring the value of

sponsorships. And the most important elements include awareness and financial benefits.

Brand managers have four points of sponsoring the brand. They are

a. Manufacturer brand

b. Private brand

c. Licensing

d. Co-branding

a. Manufacturer Brand:

The brand owned by manufacturer and promoted either directly or indirectly. This type of

strategy has been followed for many years. The brand owned by manufacturer and

promoted either directly or indirectly. This type of strategy has been followed for many

years.

SEGMENTING the atta market to pit itself against the regional

players, General Mills India has launched a new sub-brand under

its Pillsbury brand - Punjabi atta.

b. Private Brand:These are also called store brands. These brands bear the store name or store selected

vendor name. Basic ingredients of private labels are:



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It must be a unit package: It is difficult to assign a private label character to say,

rice sold loose from a 100 kg bag. Even though it may enhance consumer loyalty

for whatever reason, it does not qualify as a private label product.

Relabeling: The unit pack must bear only the brand name of the particular store or

any there party the store may choose for its label program.

Private labels will enhance the category profitability, increase the negotiation power oof

the retailer and better value creates better consumer loyalty.

Private labels can be introduced if and only if,

o The consumer is not getting the tangible value.

o The retailer is not making enough returns from the sale of the branded goods.

Emerging issues in private labeling:o The private label strategy is effective, profitable and realistic.

o The retailer must understand the price, quality and willingness to pay.

o The retailer must have a sufficient large base of loyal customers inthe store before

introducing the private label.

o The focus must be on consumer needs and not any private agenda of the retailer.

o There must be a stringent system for the private label production. Quality control

is a must since there is no one else to blame.o Private label must work to fill in gaps in the category and not target the brand

leader.

o Smart manufacturers may take a private label initiative of the retailer seriously and

avoid value gaps in the categories as an impediment to growing private labels.

c. Brand Licensing:

It is the legal authorization by the trademarked brand owner to allow another company to

use its brand for a fee. For example, Hugo Boss, Tommy Hilfiger, Lacoste, and Nike are

some of the textile brands those licensed their brands in the Indian market. The major

benefits of brand licensing are low cost, free publicity and revenue from royalty fees.

Brand licensing also suffers from serious limitations like lack of manufacturing control,

and failure of licensing arrangements.

d. Co- Branding:



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According to Kotler, co-branding is the practice of using the established brand names of

two different companies on the same product. For example - Cinnabon has also engaged

in a special case of co-branding called ingredient branding. By creating brand equity for

Cinnabon through co-branding with other food products, Cinnabon increases their brand

awareness and encourages consumer preference for goods containing their product. For

example, Cinnabon has teamed up with Betty Crocker for a Cinnabon Cinnamon Streusel

Muffin Mix (These are really good, by the way!). Also, Orville Redenbachers popcorn

and Cinnabon come together in cinnamon popcorn with a pour-over Cinnabon frosting

topping. What could be more loved than a hot gooey cinnamon roll? Some would say ice

cream. Both are sweet and delicious; one is hot, the other is cold. This is the perfect match

for a co-branded operation.

Q3. Explain the product mix pricing strategy with examples



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Answer:

Pricing is one of the most important elements of the marketing mix, as it is the only mix,

which generates a turnover for the organisation. The remaining 3ps are the variable cost

for the organisation. It costs to produce and design a product; it costs to distribute a

product and costs to promote it. Price must support these elements of the mix. Pricing is

difficult and must reflect supply and demand relationship. Pricing a product too high or

too low could mean a loss of sales for the organisation. Pricing should take into account

the following factors:

Fixed and variable costs.

Competition

Company objectives

Proposed positioning strategies.

Target group and willingness to pay.

Types of Pricing Strategies

An organisation can adopt a number of pricing strategies. The pricing strategies are based

much on what objectives the company has set itself to achieve.

Penetration pricing: Where the organisation sets a low price to increase sales and

market share.

Skimming pricing: The organisation sets an initial high price

and then slowly lowers the price to make the product available to

a wider market. The objective is to skim profits of the market

layer by layer.

Competition pricing: Setting a price in comparison with

competitors.

Product Line Pricing: Pricing different products within the sameproduct range at different price points. An example would be a

video manufacturer offering different video recorders with

different features at different prices. The greater the features and



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the benefit obtained the greater the consumer will pay. This form of price discrimination

assists the company in maximizing turnover and profits.

Bundle Pricing: The organisation bundles a group of products at a reduced price.

Psychological pricing: The seller here will consider the psychology of price and the

positioning of price within the market place. The seller will therefore charge 99p instead

1 or $199 instead of $200

Premium pricing: The price set is high to reflect the exclusiveness of the product. An

example of products using this strategy would be Harrods, first class airline services,

Porsche etc.

Optional pricing: The organization sells optional extras along with the product to

maximize its turnover. This strategy is used commonly within the car industry.

Q4. What are the various logistics functions? Describe in brief.

Answer:

It is important to recognize that the various logistic functions come together to form the

totality of logistics support. A NATO logistician of one discipline will often work with a

staff officer of another discipline and, as a very minimum, will have to appreciate the

other's responsibilities and problems. For example, logistic planning originates in

national, NATO or MNC policy guidance and has to be coordinated with all the staff

branches concerned, whether they be operational, administrative or logistic, military or

civil.

Materiel Function of Logistics

Production or acquisition logistics covers materiel, from the first phase of the life cycle to

its final disposal from the inventory. The first part of the cycle, from specification, designand production is clearly a function of production logistics. Reception of the equipment

into service, its distribution and storage, repair, maintenance and disposal are clearly a

consumer logistic task. However, the initial design of the equipment which is part of



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production logistics has to take account of the consumer aspects of repair and

maintenance, and therefore involves both disciplines.

Supply Function of Logistics

Supply covers all materiel and items used in the equipment, support and maintenance of

military forces (classes of supply are listed at Annex A). The supply function includes the

determination of stock levels, provisioning, distribution and replenishment.

Maintenance and Repair Function of Logistics

Maintenance means all actions to retain the materiel in or restore it to a specified

condition. The operational effectiveness of land, naval and air forces will depend to a

great extent on a high standard of preventive maintenance, in peacetime, of the equipment

and associated materiel in use. Repair includes all measures taken to restore materiel to a

serviceable condition in the shortest possible time. Battle Damage Repair (BDR) is an

important element in maintaining materiel availability during operations. It is designed to

restore damaged materiel to a battleworthy condition, irrespective of the cause of the

failure, as quickly as possible. Damage assessment has to be done rapidly and must not

always require the use of automated test equipment or sophisticated tools. The

considerations are primarily aimed at limiting the damage, determining the cause of the

damage, establishing a plan for damage repair, and minimizing the risk to equipment and

operators. Once the operational mission has been accomplished, BDR must be followed

by specialized maintenance or repair to restore the equipment to fully serviceable

condition.

Service Function of Logistics

The provision of manpower and skills in support of combat troops or logistic activities

includes a wide range of services such as combat resupply, map distribution, labour

resources, postal and courier services, canteen, laundry and bathing facilities, burials, etc.

These services may be provided either to one's own national forces or to those of anothernation and their effectiveness depends on close cooperation between operational, logistic

and civil planning staffs.

Explosive Ordnance Disposal (EOD) Function of Logistics



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EOD involves the investigation, detection, location, marking, initial identification and

reporting of suspected unexploded ordnance, followed by the on-site evaluation, rendering

safe, recovery and final disposal of unexploded explosive ordnance. It may also include

explosive ordnance which has become hazardous by damage or deterioration. The NATO

EOD Technical Information Centre (EODTIC) holds records of all past and present

ammunition and explosives, and provides an immediate advisory service on EOD

problems.

Movement and Transportation Function of Logistics

It is a requirement that a flexible capability exists to move forces in a timely manner

within and between theatres to undertake the full spectrum of Alliance roles and missions.

It also applies to the logistic support necessary to mount and sustain operations.

Engineering Function of Logistics

The area of logistic engineering, while not exclusively a logistic function will require

close coordination with logistics as the mission is very closely aligned with logistics in

terms of facilitating the logistic mission of opening lines of communication and

constructing support facilities. The engineering mission bridges the gap from logistics to

operations and is closely related to the ultimate success of both. The acquisition,

construction and operation of facilities forms the basis for the NISP. This is the term

generally used in NATO for installations and facilities for the support of military forces.

Medical Function of Logistics

This function entails the provision of an efficient medical support system to treat and

evacuate sick, injured and wounded personnel, minimize man days lost due to injury and

illness, and return casualties to duty. An effective medical support system is thus

considered a potential force multiplier. Though medical support is normally a national

responsibility, planning must be flexible and consider coordinated multinational

approaches to medical support. The degree of multinationality will vary depending on thecircumstances of the mission, and be dependent upon the willingness of nations to

participate in any aspect of integrated medical support.

Contracting Function of Logistics



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Contracting has become increasingly important to the conduct of operations, particularly

when operating beyond NATO's area of responsibility. It is a significant tool that may be

employed to gain fast access to in-country resources by procuring the supplies and

services that the NATO Commander requires.

Budget and Finance Function of Logistics

The areas of budget and finance impact virtually every aspect of logistic operations. The

funding and budget policies to pay for deployment and sustainment and redeployment are

unique. While nations are generally expected to finance their own operations.

Q5. What is IMC? Describe the communication development process in brief.

Answer:

A management concept that is designed to make all aspects of marketing communication

such as advertising, sales promotion, public relations, and direct marketing work together

as a unified force, rather than permitting each to work in isolation.

It aims to ensure consistency of message and the complementary use of media. The

concept includes online and offline marketing channels. Online marketing channels

include any e-marketing campaigns or programs, from search engine optimization (SEO),

pay-per-click, affiliate, email, banner to latest web related channels for webinar, blog,

micro-blogging, RSS, podcast, and Internet TV. Offline marketing channels are traditional

print (newspaper, magazine), mail order, public relations, industry relations, billboard,

radio, and television. A company develops its integrated marketing communication

programme using all the elements of the marketing mix (product, price, place, and

promotion).

Integrated marketing communication is integration of all marketing tools, approaches, and

resources within a company which maximizes impact on consumer mind and which

results into maximum profit at minimum cost. Generally marketing starts from"Marketing Mix".

Promotion is one element of Marketing Mix. Promotional activities include

Advertising(by using different medium), sales promotion (sales and trades promotion),

and personal selling activities. It also includes internet marketing, sponsorship marketing,



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direct marketing, database marketing and public relations. And integration of all these

promotional tools along with other components of marketing mix to gain edge over

competitor is called Integrated Marketing Communication.

Reasons for the Growing Importance of IMC

Several shifts in the advertising and media industry have caused IMC to develop into a

primary strategy for marketers:

From media advertising to multiple forms of communication.

From mass media to more specialized (niche) media, which are centered around specific

target audiences.

From a manufacturer-dominated market to a retailer-dominated, consumer-controlled

market.

From general-focus advertising and marketing to data-based marketing.

From low agency accountability to greater agency accountability, particularly in

advertising.

From traditional compensation to performance-based compensation (increased sales or

benefits to the company).

From limited Internet access to 24/7 Internet availability and access to goods and services.

Selecting the Most Effective Communications Elements

The goal of selecting the elements of proposed integrated marketing communications is to

create a campaign that is effective and consistent across media platforms. Some marketers

may want only ads with the greatest breadth of appeal: the executions that, when

combined, provide the greatest number of attention-getting, branded, and motivational

moments. Others may only want ads with the greatest depth of appeal: the ads with the

greatest number of attention-getting, branded, and motivational points within each.Although integrated marketing communications is more than just an advertising

campaign, the bulk of marketing dollars is spent on the creation and distribution of

advertisements. Hence, the bulk of the research budget is also spent on these elements of

the campaign. Once the key marketing pieces have been tested, the researched elements



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can then be applied to other contact points: letterhead, packaging, logistics, customer

service training, and more, to complete the IMC cycle.

Q6. What are alternative approaches to marketing while going international?

Study Pepsis international marketing strategy.

Answer:

Markets and marketing are becoming ever more international in their nature and managers

around the world ignore this fact at their peril. To achieve sustainable growth in markets

that are becoming increasingly global, or merely to survive in domestic markets that are

increasingly attacked by international players, it is essential that organisations understand

the complexity and diversity of international marketing and that their managers develop

the skills, aptitudes and knowledge necessary to compete effectively around the globe.

A company must learn how to enter foreign markets and increase their global

competitiveness. Firms that do venture abroad find the international marketplace far

different from the domestic one. Market sizes, buyer behavior and marketing practices all

vary, meaning that international marketers must carefully evaluate all market segments in

which they expect to compete.

Whether to compete globally is a strategic decision (strategic intent) that will

fundamentally affect the firm, including its operations and its management. For many

companies, the decision to globalize remains an important and difficult one (global

strategy and action).

Typically, there are many issues behind a company`s decision to begin to compete in

foreign markets. For some firms, going abroad is the result of a deliberate policy decision

(exploiting market potential and growth); for others, it is a reaction to a specific business

opportunity (global financial turmoil, etc.) or a competitive challenge (pressuringcompetitors). But, a decision of this magnitude is always a strategic proactive decision

rather than simply a reaction (learning how to business abroad). Reasons for global

expansion are mentioned below:

a) Opportunistic global market development (diversifying markets)



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b) Following customers abroad (customer satisfaction)

c) Pursuing geographic diversification (climate, topography, space, etc.)

d) Exploiting different economic growth rates (gaining scale and scope)

e) Exploiting product life cycle differences (technology)

f) Pursuing potential abroad

g) Globalizing for defensive reasons

h) Pursuing a global logic or imperative (new markets and profits)

Moreover, there can be several reasons to be mentioned including comparative advantage,

economic trends, demographic conditions, competition at home, the stage in the product

life cycle, tax structures and peace. To succeed in global marketing companies need to

look carefully at their geographic expansion. To some extent, a firm makes a conscious

decision about its extent of globalization by choosing a posture that may range from

entirely domestic without any international involvement (domestic focus) to a global

reach where the company devotes its entire marketing strategy to global competition. In

the development of an international marketing strategy, the firm may decide to be

domestic-only, home-country, host-country or regional/global-oriented.

Each level of globalization will profoundly change the way a company competes and will

require different strategies with respect to marketing programs, planning, organization and

control of the international marketing effort. An industry in which firm competes is also

important in applying different strategies. For example, when a firm which competes in

the pharmaeutical industry which is heavily globalized, it has to set its own strategies to

deal with global competitors. (constant innovation)

Tracking the development of the large global corporations today reveals a recurring,

sequential pattern of expansion. The first step is to understand the international marketingenvironment, particularly the international trade system. Second, the company must

consider what proportion of foreign to total sales to seek, whether to do business in a few

or many countries and what types of countries to enter. The third step is to decide on

which particular markets to enter and this calls for evaluating the probable rate of return



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on investment against the level of risk (market differences). Then, the company has to

decide how to enter each attractive market. Many companies start as indirect or direct

export exporters and then move to licensing, joint-ventures and finally direct investment;

this company evolution has been

called the internationalization process. Companies must next decide on the extent to

which their products, promotion, price and distribution should be adapted to individual

foreign markets. Finally, the company must develop an effective organization for pursuing

international marketing. Most firms start with an export department and graduate to an

international division. A few become global companies which means that top

management plans and organizes on a global basis (organization history).

Typically, these companies began their business development phase by entrenching

themselves first in their domestic markets. Often, international development did not occur

until maturity was reached domestically. After that phase, these firms began to turn into

companies with some international business, usually on an export basis. But, this process

may vary dramatically with the size of the domestic market.

Pepsis international marketing strategy

When the "You're in the Pepsi Generation" advertising campaign launched in 1963, it may

have been the first time a brand was marketed primarily with an association to its

consumers' aspirational attitudes. A decidedly youth-oriented strategy, The newest

campaign slogan, introduced this year, is "More Happy," which definitely coincides with

one concrete example of "more" in the packaging of Pepsi products todaymore designs.

Many more. At least 35 distinct design ideas will grace the packaging of Pepsi's cans and

bottles this year alone, and this design strategy may continue indefinitely.

Though not "generational" in word, the campaign certainly has a youth-oriented feel with package designs, advertising, and websites that are fun and playful. PepsiCo worked

closely with Peter Arnell and Arnell Group, based in New York City, to devise a

comprehensive new strategy that would connect with Pepsi's core consumers. Arnell

reinvented the Pepsi package as a meaningful and appealing communications tool for the



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latest generation of youth that are not overwhelmed by media, music, or digital

distractions.

Pepsi actually asked their loyal consumers what brand elements would have to remain so

that they would be intuitively reassured that their favorite drinks were not changing and

the brand they trusted was still essentially the same. Their answer was direct and

consistent. Pepsilovers needed to see three elements for surethe Pepsi "globe," the

iconic Pepsi blue, and the familiar tilted Pepsi capital letters.

The most recent logo design had the Pepsi wordmark on top of and slightly overlapping

the iconic Pepsi red-white-and-blue "globe." On the previous can design, the wordmark

wrapped halfway around the can, and the globe was off-center. The new cans and bottles

have unbundled the word and globe, making the newly centered globe more of the hero,

and the smaller Pepsi wordmark less prominent.

Television ad campaigns are reinforcing the globe-centric approach by featuring a

bouldersized Pepsi globe in various settings careening to and fro like a pinball. In the ads

and on the front of most of the new packages is the reassuring tag line: "Same Pepsi

inside, new look outside." Miller explains that it is customary and important to reassure

consumers for at least six months in situations like this.



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Today's youth as demanding authenticity from the products they come into contact with in

their day-to-day experiences. The new Pepsi design strategy is versatile because it can be

authentic and stay current, and it could also make introducing special seasonal or regional

designs more intriguing and less disruptive. "This is a new way of using packaging as

media, "explains Miller. "The consumer is looking for more variety and expecting more

from their brands. They want to have a dialogue with their favorite brands.

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marketing management - mb0030

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