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Advertising forces people to buy goods that they do not want
MARKETING MANAGEMENT
Answer any FIVE questions
All questions carry equal marks
1. Explain the following:
(a) Production concept
(b) Product line
(c) Augmented product
(d) Social marketing concept.
2. Explain various concepts of marketing with suitable examples.
3. Explain market segmentation with suitable examples.
4. “PLC as a tool for marketing strategy" justify.
5. Explain process of selecting the final price.
6. “Advertising forces people to buy goods that they do not want" Elucidate.
7. Explain the process of integrated Marketing communication.
8. Explain “direct marketing" and its applicability with examples.

CONTENT
1. Answer No1.

The Product Concept: This orientation holds that consumers will favor those
products that offer the most quality, performance, or innovative features. Managers

focusing on this concept concentrate on making superior products and improving them
over time. They assume that buyers admire well-made products and can appraise
quality and performance. However, these managers are sometimes caught up in a love
affair with their product and do not realize what the market needs. Management might
commit the “better-mousetrap” fallacy, believing that a better mousetrap will lead
people to beat a path to its door.
The Selling Concept: This is another common business orientation. It holds that
consumers and businesses, if left alone, will ordinarily not buy enough of the selling

company’s products. The organization must, therefore, undertake an aggressive
selling and promotion effort. This concept assumes that consumers typically show
buying inertia or resistance and must be coaxed into buying. It also assumes that the
company has a whole battery of effective selling and promotional tools to stimulate
more buying. Most firms practice the selling concept when they have
overcapacity. Their aim is to sell what they make rather than make what the market
wants.
The Marketing Concept: This is a business philosophy that challenges the above
three business orientations. Its central tenets crystallized in the 1950s. It holds that
the key to achieving its organizational goals (goals of the selling company) consists of
the company being more effective than competitors in creating, delivering, and
communicating customer value to its selected target customers. The marketing concept
rests on four pillars: target market, customer needs, integrated marketing and
profitability.
Distinctions between the Sales Concept and the Marketing Concept:
 The Sales Concept focuses on the needs of the seller. The Marketing Concept

focuses on the needs of the buyer.
 The Sales Concept is preoccupied with the seller’s need to convert his/her product

into cash. The Marketing Concept is preoccupied with the idea of satisfying the
needs of the customer by means of the product as a solution to the customer’s
problem (needs).

 The Marketing Concept represents the major change in today’s company
orientation that provides the foundation to achieve competitive advantage. This
philosophy is the foundation of consultative selling.
The Marketing Concept has evolved into a fifth and more refined company
orientation: The Societal Marketing Concept. This concept is more theoretical and
will undoubtedly influence future forms of marketing and selling approaches.

The Societal Marketing Concept: This concept holds that the organization’s task is
to determine the needs, wants, and interests of target markets and to deliver the desired
satisfactions more effectively and efficiently than competitors (this is the original
Marketing Concept). Additionally, it holds that this all must be done in a way that
preserves or enhances the consumer’s and the society’s well-being.
This orientation arose as some questioned whether the Marketing Concept is an
appropriate philosophy in an age of environmental deterioration, resource shortages,
explosive population growth, world hunger and poverty, and neglected social
services.
Are companies that do an excellent job of satisfying consumer wants necessarily
acting in the best long-run interests of consumers and society?
The marketing concept possibily sidesteps the potential conflicts among consumer
wants, consumer interests, and long-run societal welfare. Just consider:
The fast-food hamburger industry offers tasty buty unhealthy food. The hamburgers
have a high fat content, and the restaurants promote fries and pies, two products high
in starch and fat. The products are wrapped in convenient packaging, which leads to
much waste. In satisfying consumer wants, these restaurants may be hurting
consumer health and causing environmental problems.
2. Answer No3
 Definition: According to Philip Kotler:” Market segmentation is the subdividing

of market into homogenous sub set of customers, where any subnet may
conceivably be selected as market target to be reached with distinct marketing mix
 Benefits of Market segmentation

o Meeting different customer needs

o Enhanced profits for business: customers have different disposable incomes
and vary in how sensitive they are to price. Thereupon businesses can raise

average prices.

o Better opportunities for growth: Market segmentation can build sales.
o Retain more customers: business can retain customers who might otherwise

switch to competing products and brands with customer at different stages
of their life.
 Four segment a market by:
o Demographics: uses various population measures including age, gender,
income, ethnic background, education, and occupation as the basis for
dividing people into specific markets. Demographic segmentation easy to
measure and is widely used.
Example: Segmenting your market by age as Amul has segmented their
product in different age group, for kids: Amul kool, chocolate milk,
Nutramul energy drink, for youth: Amul cool kafe.
While the target market for a given product can include females and
males, Emami has segmented their product in gender. For Women’s:
Naturally fair. For Men: Fair and handsome.
When companies develop pricing strategies for their brands and products,
they consider the income levels of their target markets For example,
designers such as Zac Posen and Isaac Mizrahi have created affordable
clothing and accessories, sold at Target, to reach customers who cannot
afford their high-end, more expensive lines.
o Psychographics: Psychographics segmentation divides the market into
group base on social class, lifestyle and personality characteristics. It is
based on the assumption that the types of products and brands an individual
purchases will reflect that persons characteristics and patterns of living.
Example: You operate a cruise line. You currently have a fleet of three
cruise ships that are in the process of being renovated. You decide to
segment your market into customers who want luxury, customers who want

more shore excursions and customers who want a more family-friendly
cruise experience. You renovate each cruise ship and its itineraries to meet
the needs of each market segment and advertise each ship accordingly
o Geographical: This is the most common form of market segmentation,
wherein companies segment the market by attacking a restricted Geographic
area. Potential customers are in a local, state, regional or national market
place segment. If a firm selling a product such as farm equipment,
geographic location will remain a major factor in segmenting your target
markets since their customer are located in particular rural areas.

Example: Certain foods have very specific geographic interest in the U.S.
Grits, for instance, are common in the South and Southeast regions.
Seafood, while enjoyed elsewhere, is marketed more heavily along the east
and west coasts, where supply is fresh all year. McDonald's offers seasonal
seafood meals, including lobster and crab, in select markets like New
England. This is an example of regional segmentation based on geographic
consumer preferences and product availability. Small chains may find
similar opportunities to achieve supply and demand advantages in select
geographic markets
o Behavior: behavior segmentation is possibly the most useful way to
segment the market as it is based on consumers’ knowledge of, attitude
towards, uses for, and response to a product (Kotler). After all, marketing is
about finding out what people need and want and then developing a product
that satisfies those needs.
Some behavior variables include:
 Benefit sought
 Usage rate
 Brand loyalty
 Use status: potential, first-time, regular, etc...

 Readiness to buy
 Occasions: holidays and events that simulate purchase.

 Summary: A product segment is a subdivision of a market. Marketers can
segment markets and then focus on marketing to the unique characteristics, needs
and wants of each market segment. Market segments can be based upon
demographic, psychographic, geographic and behavior characteristics.

3. Answer No5
 Define price: Price is simply the value you give in exchange for a product or
service. Price is not static; it can change depending on the circumstances. Things
such as regulatory requirements, competition, consumer reaction, and your overall
objectives and strategy for increasing sales will affect your pricing.
 Pricing Objectives
Pricing objectives are aligned with the company's overall goals. Let's take a quick
look at some pricing objectives (structures).

o Competitive pricing is just matching the price of your product with the price
set by the industry leader. Since prices will be about the same, you will focus
on other product attributes to differentiate your product, such as quality and
customer service.

o Prestige pricing involves pricing your product high so that only wealthier
customers can afford it. You attempt to use the high price and limited
availability to enhance your product's image, causing the product to be viewed
as a status symbol. A classic prestige product is a Rolex watch or Bentley.

o Profitability pricing is designed to maximize your profit. The formula to
achieve this is profits = revenue - expenses (P = R - E). You have to monitor
price and volume of sales carefully, as setting the price too high will reduce

sales volume, resulting in lower profits. If you have a large market share, this
is a viable option. It can be argued that oil exporting countries use this
technique.

o Volume pricing is when you forgo the highest price possible in exchange for
sales volume with a particular customer. You anticipate that increases in sales
volume will more than make up for the lower profit margins. Volume
purchases also increase customer loyalty and reinforce your name, as the

product is used longer. Volume pricing is common in industrial transactions.
For example, you may order tens of thousands of screws at a deep discount or
order hundreds of tons of refined iron to manufacture steel.
 Pricing Strategies: Pricing strategy refers to method companies use to price their
products or services. Almost all companies, large or small, base the price of their
products and services on production, labor and advertising expenses and then add
on a certain percentage so they can make a profit. There are several different
pricing strategies, such as penetration pricing, price skimming, discount pricing,
product life cycle pricing and even competitive pricing. Pricing strategies are
designed to achieve more specific goals on a one-off basis. Let's take a look at
some strategies.
o Penetration pricing is a strategy where you aggressively price your product
substantially lower than competitor products with the objective of quickly
obtaining a large market share. This strategy is often employed when a
company enters a new market. Once the market share objective and customer
loyalty has been established, the price may be gradually increased.
o Price skimming is a strategy where the product price changes during the
product's life cycle. The price is set high during product introduction to
capture early adopters who are willing to pay higher prices. The price will be
reduced during the growth and maturity stages to capture the typical
consumer. The price will be reduced a third time during the product's decline

to capture discount shoppers before the product is eventually taken off the
market.
o Competitive pricing can be used as a strategy by analyzing a competitor's
changes in price to determine the appropriate action to take. It's important to
determine why your competitor has increased or decreased its prices. Is there
an increase in price because of a shortage of product, a technological
innovation, or because the company is desperate for revenue?
For example, one competitive technique used is price shadowing. Let's say
that most of your competitors have increased their prices for smart phones. In

price shadowing, you wait to increase your price so you can attract customers
who don't want to pay the increased prices.
o Product Life Cycle Pricing: All products have a life span, called product life
cycle. A product gradually progresses through different stages in the cycle:
introduction, growth, maturity and decline stages. During the growth stage,
when sales are booming, a small company usually will keep prices higher.
For example, if the company's product is unique or of higher quality than
competitive products, customers will likely pay the higher price. A company
that prices its products high in the growth stage also may have a new
technology that is in high demand.
 Summary: A price is simply the value a customer gives a seller in exchange for a
product or service. Businesses employ different pricing structures to achieve
different strategies. Common pricing structures include competitive pricing,
prestige pricing, profitability pricing, and volume pricing. Pricing strategies
include penetration pricing, which is an attempt to enter a market and quickly gain
market share. Price skimming is employed to maximize profits during each stage
of the product's life cycle. Competitive pricing is employed to increase or decrease
prices in accordance with your competition if your analysis indicates it's
appropriate.
4. Answer No7

Have you ever received mixed messages from someone before - one day they act
like they're your best friend and the next day they ignore you? Sometimes this
confusing communication pattern can also happen in a marketing environment.

One television ad might focus on product quality, and then a radio ad might push
how the product is the cheapest on the market. A marketing communication
message should be integrated, which means that the message reaching the
consumer should be the same even if it's from a television ad, magazine article,
coupon or social media site. All four elements of the promotional
mix (advertising, public relations, personal selling and sales promotion) should
focus on a similar message.

Most companies have realized how important it is to have a cohesive marketing
communication plan and have adopted an IMC or integrated marketing
communications plan. This plan is a coordination of all promotional messages
for a product or service to ensure consistency at every customer contact point. A
candy company called Sugar Rush Candy has established a central theme for their
marketing communication message. Each component of their promotional mix
focuses on how Sugar Rush's candy delivers a bolt of energy without caffeine.
They are now in the review phase of the promotional plan and need to make sure
that each part is fully integrated into a cohesive IMC.

 IMC Plan - Advertising
o All integrated marketing communication plans must start out with a
cohesive advertising plan. For Sugar Rush Candy, all aspects of the
promotional message revolve around Bolt Candy's extra sugar dose and the
fact that it can help with giving consumers more energy throughout the day.
The product itself has packaging that is orange and yellow which features a
battery being filled up with energy. The product also states that by eating the

candy it will make your day more productive.
o This message is featured prominently in the advertising examples. For
instance, the television ad shows a person struggling through their day. The
consumer eats some Bolt Candy; it refills their internal energy battery, and they
are able to finish their work day with success. Radio ads also feature a cartoon
voice saying over and over again how Bolt will give a person a battery-refill of
energy. A giant billboard ad near the local bridge continues the same message
by featuring an enormous battery that is animated. The battery fills up with
energy as the person pours Bolt Candy into their mouth.
o Integrated plans are even more successful and easier to create nowadays due to
the tremendous number of options for promotional messages, such as the
Internet, social media and alternative advertising methods such as e-mail
blasts. The 'battery-full' message must be continued throughout the entire
promotional mix.

 IMC Plan - Public Relations
The public relations plan for Bolt is also focused on the energy-inducing
experience. The public relations team concentrates on promoting the non-
caffeine energy boost to the media in order to get good, free coverage on local
news. The message is consistent in that the candy is better for consumers than
coffee or energy drinks. The team also sponsors local teen hangouts and charity
events where Bolt T-shirts (with the full battery logo) are given out for free.

 IMC Plan - Sales Promotion
The integrated marketing communications plan, which also contains a sales
promotion element, focuses short-term sales efforts with the same promotional
message. The store displays feature a large battery with Bolt candy filling up
different cartoon characters with energy. Bolt product coupons reflect the same
image and sweepstakes revolve around winning different adventure challenge
trips that will include free Bolt candy to allow the winner to have the energy to

enjoy their prize.

 IMC Plan - Personal Selling
Even the Bolt sales team is instructed to focus their sales message on an energy
increase without caffeine. The sales team explains to retailers that their product
is better than the competition because not only does the candy taste great, but it
also delivers a Bolt of energy. This key promotional message continues with
the sales force showing how the entire campaign (sales promotion, advertising
and public relations) all concentrate on one integrated marketing
communication plan.

 Summary: In this day and age, a marketing manager must create not just a
promotional mix, but an integrated marketing communications plan. This plan
is a coordination of all promotional messages for a product or service to ensure
consistency at every customer contact point. The product's promotional message
should be consistent and create an overall integrated theme.

5. Answer No8

Direct marketing is just what it sounds like - directly reaching a market (customers
and potential customers) on a personal (phone calls, private mailings) basis, or mass-
media basis (infomercials, magazine ads, etc.).
Direct marketing is often distinguished by aggressive tactics that attempt to reach
new customers usually by means of unsolicited direct communications. But it can
also reach out to existing or past customers. A key factor in direct marketing is a
"call to action." That is, direct marketing campaigns should offer an incentive or
enticing message to get consumers to respond (act).
Direct marketing involves the business attempting to locate, contact, offer, and make
incentive-based information available to consumers.
Benefit of direct marketing

 Buyers

o Convenient
o Easy to use
o Private
o Access to a wealth of information
o Immediate
 Sellers
o Building relationships
o Targeting of small groups or individuals with customized offers in a

personalized fashion
o Access to buyers that couldn’t be reached via other channels
o Low-cost, effective alternative for reaching specific markets
 Types of Direct Marketing: Three main types of direct marketing include:
 Telemarketing: Direct marketing that involves calling people at home or work to
ask for donations, an opinion, or for sales purposes.
Telemarketing is a direct marketing sales technique that has the advantage of
speed in a marketing campaign. When you are a conducting a telephone
solicitation you should first introduce yourself then offer an incentive in solving a
problem that you know exists (to do this would require you to do some research

on the business or what individuals would be looking for in your product). Ask
question that you know will lead to a yes answer (keep prospects on phone
answering yes to your questions). Describe your product or service and how it
solves the client's needs. Ask if they have any questions. You now can ask for a
face to face meeting, or to get permission to send information via mail or e-mail,
or make another brief follow-up call. If unavailable, ask what would be a good
time to call back.
 Email Direct Marketing: The most common medium today for direct marketers is

e-mail because of its low cost, and because customer responses can be generated
rapidly. You must understand that the internet is a different medium. The copy
that worked for you in postal mail will not on the internet, not as e-mail. In e-mail
copywriting, the subject is the headline, you must write succinct headline-3 to 5
words. Your subject determines whether your e-mail gets read or not. Next, make
it personal. People on the internet want personal notes. Next, get to the point keep
it short and simple. Next, give them an incentive to act by giving them a reason to
buy now. Next, include a call to action to tell people what you want them to do.
Don't leave them wondering what to do next. Next, drive people to your web site
(don't try to close the sale in the e-mail). Next, build relationship with your
clients. Listen to their want and needs. Treat your clients like you would treat
yourself. Next, you must follow through on your promises that you made to your
client. Do what you said you were going to do
 Direct Mail Marketing: One of the most commonly used mediums in direct
marketing is direct mail. Direct mail allows you to design marketing pieces in
many different formats. Direct mail can include envelope mailers, catalogues,
self-mailers, snap mailers, dimensional mailers, brochures, and postcards. When
you write your direct mail piece make sure you know your target market, and how
you are going to appeal to their wants and needs. Write your objective and refer
to it often. Don't lose sight of where you want to go with the piece that you are
writing. You can purchase a mailing list of businesses and services in your target
market from a list company, or you can develop your own list by gathering email
addresses on your web site.