Q 1: How does an organization product mix relate to the development of  product lines? When should an enterprise add depth to its product lines rather than width to its product mix?

Ans: Let us first discuss the concept of product mix and product lines.

A product mix is the set of all product lines and items that a particular seller offers for sale to buyers.

Like a seller has Three major product lines namely cosmetics, jewelry and household.

Where Cosmetics beaks down into lipstick, rouge, powder, facial cream etc. 

A product line is a group of products that are closely related in terms of functional benefit, the same customer group, price range or marketing through same outlet.

Like In detergent the P&G Has Tide, Joy, Gain, Bold and other products having same functional benefit of washing cloths to the consumers.

A line can comprise related products of various sizes, types, colors, qualities, or prices.

Like a seller has Three major product lines namely cosmetics, jewelry and household.

Where Cosmetics beaks down into lipstick, rouge, powder, facial cream etc.

The  depth of product line refers to the number of product variants in a line. . If a line of products is sold with the same brand name, this is referred to as family branding. Like the depth of Colgate Dental Cream includes Colgate fresh energy gel, Colgate Herbal, Colgate Active Salt, Cibaca etc.

The product mix and product lines also depend upon the size of the organization. Like HLL has a big product mix and product lines. The companies usually keep product mix less and product lines more. This is all to become competent with the giant competitors.

The depth of product line refers to the number of product variants in a line. .

The conditions when an enterprise adds depth to its product lines rather than width to its product mix.

1. To leverage Family brand name: The depth of product line refers to the number of product variants in a line. . If a line of products is sold with the same brand name, this is referred to as family branding. Like the depth of Colgate Dental Cream includes Colgate fresh energy gel, Colgate Herbal, Colgate Active Salt, Cibaca etc.

2. To increase brand equity: Trough family branding enterprises usually aim to increase the brand equity in the marketing but it is usually followed when there is consistency.

3. Competitive perspective: When the competitive Family brands adopt this strategy the counterpart has to follow the suit, etc. 

Q 2: Discuss the external environment of the marketing and explain how it affects a firm.

How the current demographic trends are forcing changes in marketing mix of a company.

Justify using examples.

Ans:

A firm's marketing external environment consists of factors that manifest on a large or macro scale.

These are typically

1. economic,

2. Social or

3.  Political phenomena.

4.  Technological

5. Cultural

6. Demographic

7. Global etc.

A common means of assessing a firm's macro-environment  are:

1.  SWOT analysis- strength, weakness, opportunities and threats where opportunities and threats part the external environment of the marketing.

PEST (i.e. Political, Economic, Social and Technological) analysis. Within a PEST analysis, a firm  analyzes national political issues, culture and climate, key macroeconomic conditions, health and indicators (such as economic growth, inflation, unemployment, etc.), social trends/attitudes, and the nature of technology's impact on its society and the business processes within the society.

The U.S. population is expanding by less than 1 percent annually, and immigrants constitute about one-fourth of this increase.

 
The trend toward smaller households with increasing numbers of single-person and one-parent households is  continuing .

The decreasing household size and greater numbers of single-person and one-parent households indicate that total spending for food and beverages is likely to increase very slowly. More women work outside the home and a higher number of single-person households cause redistribution of the food and beverage dollar away from home and towards other outlays at the expense of the retail grocery industry where potential profits are higher.

So the Size of the Pepsi bottles will be smaller and prices will be comparatively higher.

The product is needed to provide at near the workplace.

This will again require repositioning the brand for single-households. 
 
The domestic market growth will be limited, thus manufacturers will likely compete very aggressively for market share and intensify export efforts to increase sales and enjoy high profits 

Q 3: Explain the importance of market segmentation. List the steps involved in segmenting consumer market. Describe the target market for web portal like Jobstreet.com. Design differentiation strategy for Jobstreet.com.

Ans: Market segmenting is the process that a company divides the market into distinct groups who have distinct needs, wants, behavior or who might want different products & services

• Geographic variables

• region of the world or country, East, West, South, North, Central, coastal, hilly, etc.

• Country size/country size : Metropolitan Cities, small cities, towns.

• Demographic variables

• Age, gender- Male and Female, family size, family life cycle, Education Primary, ,socioeconomic status, religion, nationality/race (ethnic marketing) ,language

• Psychographic variables

Personality, life style, value, attitude.

• Behavioral variables

benefit sought, product usage rate, brand loyalty, product end use, readiness-to-buy stage, decision making unit, profitability, income status

• Technographic variables

• motivations

• usage patterns
• attitudes about technology

The target market for a web portal

Spillurdil.com is an interactive site hat helps those in love express themselves to their beloveds in the company of Cornetto ice-creams.

Target Audience 
 
are the most relevant consumers within target are: 
Junior College goers & 1st / 2nd year college as 'they have more money and more time'. 
Primary target is 16 - 20 young people, unisex 
General target is 15 - 25 young people, unisex

“The site provides a platform to get connected the lovers (male and female) with the users or beloved to express their love” 

The concept of designing strategy for Jobstreet.com.

JobStreet.com should strategize to expand its service of online recruitment in the region, it should entered into partnership some reputed online companies to establish JobStreet.com  in other countries so that they can be persuade for availing its services since India is in better position to employ people and this will definitely open new market for the Jobstrret.com.

Q 4: Justify the importance of developing new products. Explain the process of new product development process. Comment “Product testing is a critical decision”

Ans: The importance of the developing new product is:

1. Unit or Rupee value sales of the product by the year.
2. Market share by the year, and
3. Product profitability in terms of percentage margins.

 

The steps in New-Product Development Process are:

1. New-Product Development strategy

First of all, the top management decides the purpose, objective and role of the new product.

These could be to become, competitive, market leader, follower, innovator etc. keeping this in mind a strategy is determined.

 

2. Generation/ sources of new product ideas

The new ideas are invited from many sources they are: 

a) Customers: The customers are asked for the product they want with its features.  

b) Employees: Especially the sales & marketing employee have knowledge about the demands of the customers and the idea about the existing product.  

c) Distributors: The Wholesalers. Dealers, Retailers do know a lot about what is the demand of the consumers and which product can fare good in the market? 

c) Competitors: Usually companies compete with the competitors in the market by launching similar product in the market. Like Colgate launched New product Colgate Gel Against Close-Up Gel to be competitive. 

d) Consultants: These days many consultant organizations and professionals are providing service on deciding new product ideas. 

e)  Research & Development: Every company spends on R & D so as to get efficient new product ideas.,  

f) Creative Thinking & Brainstorming:

The process of getting a group to think of unlimited ways to vary a product or solve a problem. 

3. The Screening of the new product ideas:

The screening is a filter process where the new product ideas are processed and determined if the idea could be developed with the given resources into a company product for achievement of organizational goal.

The objective of screening is to find an idea that is consistent with the criteria that organization thinks important. 

Criteria for screening new product ideas

Screening criteria are the evaluative standards in new product development.

These criteria have concern for three factors:

1. Markets: market size, Share: Market Growth, market positioning etc
2. Products: the availability of technology, organizational support, servicing requirement.
3. Financial : Profitability, return on investment, cash flow;

Other important criteria are:

1. Similar product
2. Consistent with organizations’ resources.
3. Objective of the organization.

 

4. Concept testing

Concept testing is used to evaluate a new-product idea, before any product or prototype has been created.      

The uses of concept testing

* The concept testing helps to know if the new product concept is acceptable to the consumer so that it could be taken for developmental process.

* It tests the product concept.

* Concept testing identifies if the product is liked by the target market.

* It is used for revision and improvement of existing products. 

5. Organizing for new product development

A new Product of the organization has effect on all functional area s such as marketing, manufacturing, Human Resource and Finance, therefore the development of new product is duly contributed by all functional areas. This increases the planning and coordination for each of the department in the organization.

Studies have shown that the organization which measured the greatest success in new product development is the ones that have given the greatest care to organizing for developing those products. 

Setting responsibility for new product development

Responsibility for new product development set at the corporate level, the divisional level or the operating level. 

New product development for corporate level: 

The involvement of corporate level executives like MD, CEO, GM and others When the new product is an ambitious and highly valued project for the company otherwise Between CEO and Divisions there are Units Which are extensively involved into Research and development and new product development as well.

Advantage

The involvement of corporate level brings greater effectiveness and control of innovative activities.

Disadvantage

Since the executives of the operating know the customers need and demands their knowledge goes in vain. 

6. Physical development of the product. 

This is the first activity to develop the product idea into its physical form. This requires designing, prototyping, testing and manufacturing the product. 

During this process all functional department are involved.

Product prototyping:

Prototype is a tangible form of a product concept to approximate the product. It exhibits some of the functions of the desired product. It can also be called a functional model of a product.

The objectives of Product Development are:

1. To make the use of product safe, easy, and understandable for the consumers.

2. To give the pleasing look to the product.

3. To make it so good that it can be maintained and repaired easily

4. The cost of the final product should be affordable for the consumers.

The product design should communicate the corporate mage of the company.

Concurrent Engineering includes concurrent design, which is parallel.

*Design of the product 

*Design of evaluation of the product 

*Design of prototyping of the product 

*Design of the production of the product 

*Design of the test of the product 

Q 5: a) Differentiate the following terms.

             1) Intensive distribution

Intensive Distribution - making a product available in as many outlets as are willing to stock it.

intensive distribution and selective distribution 

It is used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.

             2) Selective Distribution

A form of market coverage in which a product is distributed through a limited number of wholesalers or retailers in a given market area. 

1. Exclusive distribution.

It uses only one outlet in a relatively large geographic area or in a given market to distribute a product

Using product/ service of your choice justify the distribution strategy adopted by you. 

Q 5:  b) Define the type of channel intermediaries and describe their function and activities.

Ans: Types of channel Intermediaries

1. Stockiest / Distributor / Wholesaler

2. Retailer- Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by post, in small or individual lots for direct consumption by the purchaser

3. Broker: A broker is a n intermediate who does not buy the goods buy sells the goods and charges commission in percent.

4. Franchisees: Franchising refers to the methods of practicing and using another person's business philosophy.

The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee 

The functions of the wholesalers are:

1. Buying function:   A wholesaler buys the product in large quantities) and resells the goods in sizeable lots to

Other intermediaries down the line, such as semi-wholesalers and retailers.  

2. marketing functions:

Wholesalers add value by performing Stock holding and sub-distribution , promotion, financing, and collection of accounts receivables and

provision of market feedback.  

3. Risk bearing function: the risk associated with product failures, price changes and bad debts. : 

4. The Sub-distribution functions are:

a. Reselling, b. Transport, c. Handling, d. Accounting

Q 6: Critically examine the effect of advertising on market share and consumer decision making process. Discuss the role of IMC in today’s Marketing.

Ans: the effect of advertising on market share is:

1. Launch of New Products and Services: The introduction of new products and brands under line extension, product diversification or category diversification and getting advertised effectively can give the seller a great opportunity for increasing his sales revenue and economies of scale.

 
 

2. Market Expansion: Advertising is also used to tap a new segment of the market like advertisers are directing their advertising to the government institutions and large organization for closed circuit TV networks, security systems and educational purposes. Another way of expanding the consumer base is to promote new uses of the product ad hence boosting market espansion.  

3. Announcement of a Product Modification or improvement: For such advertising, generally, the terms “new”, “improved”, “Excel” etc. is used as prefixes to the brand name. For example, “Surf Excel” gives the impression of an advanced detergent powder,  

The effects of advertising can be grouped in to the following  

• Creating awareness (spreading information): 

firstly, the advertising aims to make the audience know that the product or service is available in the market and explain exactly what it is.

Vodafone’s ad campaign “Hutch is Now Vodafone” was informative in nature.

Tata Tea’s Jaago Re, Times of India’s Lead India and Idea Cellular’s My Idea campaigns are the ones that have been the most recalled. However, Jaago Re is the winner, with the majority of the respondents voting for the tea brand’s election campaign. 

• Creating favorable attitudes (persuasion).

Secondly, the advertisement does brainwashing of the consumers to create the favorable attitude towards the brand which will result in adaptation of the product by the consumers.

The Coca Cola’s Ad Campaign Thanda Matlab Coca Cola” is such advertisement penned by Prasoon Joshi. 

• Maintenance of loyalty (reinforcement) One of the tasks which is often forgotten is that of maintaining loyalty of existing customers who will almost always represent the main source of future sales  
 

Within this we have the following tools:  

• Advertising: Which is any paid form of non-personal communication of ideas, products and services by an identified sponsor.  

• Sales Promotion: Short term direct inducement to encourage sales of products and services.  

• Publicity: Non-personal stimulation of demand for a product / service or business organization as a whole by putting commercially significant news in media to create a favorable image. The sponsor does not pay it for.  

• Personal selling: For making sales, a salesman interacts orally with the buyer or buyers in the form of sales presentation.  

• Public Relations: Marketers engage in public Relations to develop a favorable image of their organizations in the eyes of the public – public at large, customers, suppliers, government, media, competitors, shareholders, employees and the society.  

Q 7: Discuss how the product life cycle , competition, Distribution, promotion strategies, customer demand and quality perception can affect pricing strategies.

Ans: Effect of  Demand

The effect of Price elasticity of demand on pricing decisions.

It is percentage change in quantity demanded by the percentage change in price of the same commodity.

In economics and business studies, the price elasticity of demand is a measure of the sensitivity of quantity demanded to changes in price.

Inelastic demand  means a producer can increase prices without much hurting demand for its product, and elastic demand means that consumers are sensitive to the price at which a product is sold and will not buy it if the price rises.

Quality perception

Perceived value pricing: if the seller feels that his product gives better values to the customers as expected by the consumer he charges high price irrespective of cost of product. This pricing method is called perceived value pricing.

Promotional strategy and pricing strategies.

These include: price skimming, price discrimination and yield management, price points, psychological pricing, etc.

Price discounts and allowance like Cash discounts, Quantity Discounts, seasonal discounts are offered to the customer for achieving marketing objectives.

Promotional pricing refers to an instance where pricing is the key element of the marketing mix.

The price/quality relationship refers to the perception by most consumers that a relatively high price is a sign of good quality. The greater the uncertainty surrounding a product, the more consumers depend on the price/quality hypothesis and the more of a premium they are prepared to pay.

Premium pricing (also called prestige pricing) is the strategy of consistently pricing at, or near, the high end of the possible price range to help attract status-conscious consumers. They believe the high price is an indication of good quality;

1. They believe it to be a sign of self worth.

The Goldilocks pricing is a practice of providing a "gold-plated" version of a product at a premium price in order to make the next-lower priced option look more reasonably priced;

for example, encouraging customers to see business-class airline seats as good value for money by offering an even higher priced first-class option 

These include: price skimming, price discrimination and yield management, price points, psychological pricing, etc.

Multidimensional pricing is the pricing of a product or service using multiple numbers.

In this practice, price no longer consists of a single monetary amount (e.g., sticker price of a car), but rather consists of various dimensions (e.g., monthly payments, number of payments, and a down payment).  

Effect of Product life cycle on pricing strategies.

How you price, and what value you provide for that price, will change as you move through the product lifecycle.

The marketing Strategy used are Rapid Skimming strategy, Slow skimming strategy, Rapid penetration strategy and slow penetration strategy.

Aircel is at its introduction stage with Rapid penetration strategy.

In growth and maturity stage the price solely depends upon the market share and product positioning of the product.

The Decline phase the lower your price should be, since your market will be

One technique to consider is unbundling support, training and services from the product itself, which will allow you to lower price without discounting.

Competition.

Pay attention to them, but don't copy them . . . when it comes to pricing strategy they may have no idea what they're doing. 

The effect of competition on pricing strategy requires that you consider this price range and where your price should be within that price range. You determine the best price range according to your product’s strengths and weaknesses compared to competitors’ products.

How Your Price Compares Determines Your Price

If your product has the most strengths, you can price it on the high end. If your product offers few benefits compared to competitors’, your price needs to be on the low end. So the effect of competition on pricing strategy requires an analysis of your and your competitors’ strengths and weaknesses.