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Q1) Explain the buying motives of a consumer.
A motive can be defined as a drive or an urge for which an individual seeks satisfaction. It becomes a buying motive when the individual seeks satisfaction through the purchase of something. It is an effectual desire that prompts one to a definite action. Important buying motives of consumers are-
1) Freedom from fear and danger: Fear is a negative motive but it is a very powerful one. The most basic instinct of a human being is self-preservation. A person would do anything to guarantee – his safety. Fear is a very powerful and compelling force in human affair.
2) Desire for economy: Person’s desire for money to satisfy their other desires. The businessman wants money to make more profits or lower costs. Saving money is a universal desire. Customers spend money to get more money.
3) Vanity: Vanity is a powerful motive in the hands of the marketing man being the safest appeal that may be used.
4) Appreciation: Everybody desires to be appreciated and complemented. He likes to be recognized as an important person. He wants to be in a position from where he can issue orders to others.
5) Fashion: It is the desire of everyone to imitate what others are doing. This also be called imitation motive. It is closely linked with pride or desire for importance.
6) Possession: The instincts of possession or a desire to call things as ‘mine’ leads persons to hoard and collect things. A miser takes delight in possessing money. Some persons collect postage stamps and old coins. Here the hoarding instinct is at work.
7) Sex or romance: The sex motive is a very powerful one and can sell almost anything. It is no wonder why this instinct is very often used by marketing men in women centred advertisements.
8) Love of others: This motive plays an important part when parents purchase all kinds of things for their children like toy, fancy garments and other presents, may go infor life insureance to make provision for their future. Insurance men use this motive to include the prospect to protect his loved ones by purchasing an insurance policy.
9) Health or physical well-being: Young persons full of energy and are sometimes indifferent to their health or physical well-being till they attain the age of forty. Many persons purchase health foods, vitamin tablets and patent medicine to maintain their health and physique well-being.
10) Comfort and convenience: Most people like to easy going. They don’t like to exert much. They simply like to do everything the easy way and in comfort. Hence the motive may be well exploited by the marketing particularly for selling luxury items.
Q2) Bring out the importance of branding and labeling.
Branding –
A brand is a name, term, phrase, design symbol, or any combination of these chosen by an individual or organization to distinguish a product from competing products.
Importance of Branding
1- A brand is an organization’s most valuable asset because it provides customers with a way of recognizing and specifying a particular product if they want to choose it again or recommend to others.
2- A brand also enables marketers to develop specific images and interrelated marketing strategies for a particular product.
3- A brand can command a premium price in the marketplace.
4- It is often the only element of a product competitors can’t copy.
Labeling –
Many consumer and organizational goods must have labels. Labels can range from a thumbnail-size sticker on a Y bunch of bananas to a full-page label outlining refrigerator features. Many labels are an absolute necessity; others are optional. In either case, labeling is an important product element that deserves careful consideration.
Importance of Labelling-
1- Labelling helps to promote the product.
2- It provide information for buyers and intermediaries.
3- It is used to meet regulatory requirements. i.e. Promotional support and information for buyers and intermediaries.
Q3) What factors should be considered in selection of advertising media?
Advertising is commonly understood to communicate about a product or service. However Advertising includes all activities performed by an enterprise to present the goods and services to the consumers and to motivate them to buy these goods and services.
Media of Advertisement means any object or any device which is used to communicate the message, either written or oral, to the potential consumers. For the convenience of study means of advertisement may broadly be divided into four parts:
1- Press Advertising
2- Outdoor or mural advertising
3- Advertisement by mail
4- Other media
Factors that should be considered in selecting advertising media are-
1- Press Advertising
Press is the most popular media of advertisement these days. It should be considered when the media to be selected should be cheapest and best media because of its wide circulation. Press advertising may be divided in two forms-
- Newspaper Advertisement
All the advertisements made through newspapers, are called Newspaper advertisements. A newspaper may be of national level, state level, or district level. It may be daily, weekly or fortnightly. It may of Hindi, English or any other language.
- Magazines or journals advertisements.
When an advertisement is published in a magazine or a journal it is called magazine or a journal it is called magazine or journal advertisement.
2- Outdoor or mural advertising
Outdoor advertisements should be used when the advertiser has to attract the customers when they are out of their home. These advertisements are displayed on roads or otherwise. This is the oldest form of advertising but it is equally common even these days. This is used very widely and very often. Actually, this form of advertising is complement to press advertisement. It is adopted with the object to remind the consumers of the product again and at all times and places. This method is very useful for the products which need a wide appeal.
3- Direct Mail advertising
Direct mail advertising should be used when the advertiser has to send personal message in writing through post to some selected persons.
It should be used when –
1- The advertisement messages are to be prepared in writing.
2- These messages are to be addressed directly to some selected persons.
3- The message may be different for different persons.
4- Other media of advertising
Some other forms of advertising may be explained as under-
4.1 Fairs and exhibitions: When the advertiser has to reach a mass population, they advertise through fairs and exhibitions. Since fairs and exhibitions are visited by a large number of persons, businessmen and manufacturers get good opportunity of advertising their goods.
4.2 Cinema: Cinema is considered to be the cheapest and most popular medium of entertainment these days. Advertisers get their cinema slides prepared and these slides are played in the beginning and during interval.
4.3 Radio and television: For creating success, increasing and maintaining the demand of the products, the radio and television media should be used.
4.4 Loud-speaker: When the message is to be announced in different location of the city, this media of advertising is used. Under this a rickshaw or a
4.5 Sky writing: Under this method of advertising, some words are written in the sky with the help of a special gas by aeroplanes. These words stay in the sky for some seconds. This is not popular in our country.
4.6 Free samples: Under this method, some sample packages are prepared and distributed among consumers. These samples provide an opportunity to the consumers to use these samples and then adopt these products.
4.7 Competition: Some producers announces a competition in it, comsumers are required to reply some questions and to give a slogan about the product. They are also required to send some wrappers or cartoons or cash memo that may prove that they have purchased the product.
4.8 Other means: Other means of advertising may be sale at reduced prices, trade discount, free gift with a purchase of certain value or certain quantity, window display etc.
Q4) Write a note on distribution channels.
Production of goods and services is just a half success of a manufacturer. The success is completed when he makes these goods and services available at proper time and place. This is done through distribution. The ways through which the goods and services are distributed to consumers are called channels of distribution.
Types of Channels of Distribution
There are different types of channels of distribution and a manufacturer may select any one of these channels. These channels may broadly be divided into two parts-
1) Channels of distribution related to industrial products.
2) Channels of distribution related to consumer products.
1) Channels of distribution related to industrial products
A manufacturer of industrial goods may use any one of the following channels of distribution for the distribution of his products:
1- The goods may directly be distributed by a manufacturer to consumer.
2- A manufacturer may take the help of agents to distribute his goods to the buyers. Producer – Agents – Industrial Users.
3- A producer of industrial goods may take the help of wholesalers for the distribution of his goods. Producer – Wholesalers – Industrial Users.
4- Industrial goods may be distributed to their users through two middlemen also. These middlemen may be wholesalers or distributors and selling agents. Producer – Wholesalers – Distributors – Agents – Industrial
2) Channels of distribution related to consumers goods
A producer of consumer goods may use any of the following channels of distribution:
1- A producer of consumer goods may distribute his products direct to his consumers. Producer – Consumers.
2- A producer may take the help of middlemen for the distribution of his products. Middlemen may be a retailer of an agent. Producer – Retailer – Agents – Consumers.
3- A manufacturer may choose to distribute his goods with the help of two middlemen. These two middlemen may be wholesaler and retailer. Producer – Wholesalers – Retailers – Consumers.
4- A manufacturer may distribute his goods to his consumers with the help of three middlemen. These middlemen may be agents, wholesalers, and retailers. Producer – Agent – Wholesaler – Retailers – Consumers.
5- A producer of consumer goods may also decide to distribute his goods to his consumers through four middlemen. These middlemen may be distributor, agent, wholesaler and retailer. This is the longest channel of distribution.
Producer – Distributor – Agents – Wholesalers – Retailers – Consumers.
Q5) Explain the different stages of product life cycle with suitable diagram.
All products have certain life during which they pass through certain identifiable stages. Through the conception of the product, during its development and up to the market introduction, product remains in prenatal stage. The different stages of a product life cycle are as follows-
i) Introduction: It is the first stage of the product life cycle. The product is first introduced in the market. Heavy expenditure on advertisement is made to inform the customers about its qualities and characteristics and it is made popular among its users through promotional efforts. The sales at this stage do not pick up much because the consumers are quite unaware of the product characteristics. Consequently the quantum of profits is low or rather negligible in this stage but risk factor is much higher. Competitors are not in the market because the product is new for the consumers. Most of the product fail in this stage due to lack of proper innovation efforts.
ii) Growth: After the product is introduced in the market, the product enters the second stage, i.e., growth stage. Under this stage, the product gains popularity among and recognition from the customers. The demand and sales go up tremendously due to promotional efforts. Consequently profits of the firm start going up and up because of two primary reasons:
- Production and sales, go up hence firm gets economies of large scale production and sales.
- Advertising and distribution costs, through go up but per unit cost is reduced. High profits attract the competitors to enter the field.
iii) Maturity: The next is maturity stage. In this stage competition increases. Through sales of the product go up but with a lower speed. The advertisement and distribution costs increase in order to make the product service. The profit rate begins to decline. The producer makes search for new markets. Market and marketing research expenditure goes up. The prices came down due to stiff competition.
iv) Saturation: At this phase the sale value comes to standstill despite best efforts but it is at all time high. The competition is also at its peak in this period. Competition bring the cost of distribution and promotional efforts at new high; prices begin to fall and therefore profits come down. Fresh efforts are made in this stage to improve the product. New markets are tried.
v) Decline: This stage is brought about by the product’s gradual displacement by some new innovation or change in consumer behaviour. New products start to introduce in the market by competitors. Sales go down despite of all best efforts of picking it up. Cost control becomes necessary to reduce the price in order to comete.
vi) Obsolescence: As new products are developed and introduced by the competitors, the company’s product dies out. Its demand and sales are likely to taper off. Profits are reduced to a negligible point. At this stage, it is advisable to stop the production of the product and switch off to other products.
Q1) Explain the various stages of new product development.
Planning A New Product
Each concern have different details for their product planning. They come under three phases:
1) First new product ideas are created. The planners evaluate the extent and importance of identified markets needs through marketing research and buyer behaviour and appraise the extent to which present products fulfill. Company’s capabilities are valued as such based on scientific and technical knowledge of the concern for new products.
2) In the second phase, competitive market situation is investigated with company resources. Market research is critically carried on so that size and type of marketing organization may be known. Analyst of company resources show the adequacy of plant capacity, product service facilities, marketing channels engineering abilities and other human resources. Relative profitability, target market segment and opportunity to attain product leadership are known.
3) In the third phase the product is actually developed management gets the programme and the project is executed. This includes overall plan for the products eventual marketing.
The New Product Development Process Marketers follow a six-step process to develop new products
Step 1 – Marketers generate ideas by looking inside and outside the company.
Step 2 – Marketers screen the ideas and then pick the most promising for further analysis.
Step 3 – The best ideas are analysed further to define the product concept, to understand how the new products would relate to other products in the line and to determine how much of the company’s resources it would require.
Step 4- Marketers begin to develop the product, which can be an internal or external activity.
Step 5 – The new product is test marketed and a variety of marketing mixes are evaluated.
Step 6 – Marketers commercialise the product by starting production and implementing the preferred marketing mix.
Q2) What factors should be considered in selection of distribution channel?
Decision relating to channels of distribution are very important decisions to be taken in an enterprise because the success of marketing efforts of an enterprise depends to a large extent upon the accuracy and correctness of these decisions. This decision must be must be based upon a careful and critical study of all the relevant factors. Efforts should be made not to change a decision very frequently.
Factors to be considered in selection of distribution channel are-
There may be many channels of distribution for a product and a manufacture has to select any one or more of these channels. Selection of a particular channel is a decision upon which the success of all the marketing efforts of an enterprise depends. Therefore a particular channel must be selected only after a careful study and consideration of all the relevant factors. Factors affecting the selection of channels of distribution can be divided into five parts –
- Factors related to the manufacturer.
- Factors related to the product.
- Factors related to the market.
- Factors related to the middlemen.
- Factors related to the environment.
1- Factors related to the manufacturer
1.1 Financial resources
1.2 Marketing experience and managerial ability
1.3 Goodwill
1.4 Size of the enterprise
1.5 Desire to control
2- Factors related to product
2.1 Perishability of product
2.2 Ordered products
2.3 Price per unit
2.4 Weight
2.5 Technical nature of product
3- Factors related to market
3.1 Number of consumers
3.2 Regional concentration
3.3 Size of orders
3.4 Nature of market
3.5 Policies of competitors
4- Factors related to middlemen
4.1 Availability of desired middlemen
4.2 Sales Possibilities
4.3 Cost consideration
4.4 Marketing policies and strategies
4.5 Services provided by middlemen
5- Environmental Factors
Some environmental factors also affect the selection of channels distribution for a product. Such as – In the market condition of slump, a channel of distribution must be selected with a view to provide goods and services to the consumers at lower rate. In addition to this, some legal restrictions also affect the-selection of a channel of distribution. The channel selected by the enterprise must also meet social expectation.
Q3) Explain production and selling concept.
Production Concept – This philosophy holds that customers favour those products with low offered price and easily available products. Thus this concepts holds that high production efficiency and wide distribution coverage would sell the product offered to the market.
Organisations voting for this concept are impelled by a drive to produce all that they can. Naturally they get focused on production and put all their efforts toward that aspect of the organization. They do achieve efficiency in production. But their thinking is guided by the assumption that the steep decline in unit costs arising from the maximization of output would automatically bring them all the customers and all the profits that they need. But, they do not get the best of customer patronage. Customers, after all, are motivated by a variety of considerations in their purchases. As a result, the production concept fails to serve as the right marketing philosophy for the enterprise.
Production concept is applicable in situations where demand exceeds supply.
Selling Concept – This philosophy holds that customer, if left alone, would not buy enough of the company’s products. The organization must, therefore undertake an aggressive selling and promotion effort.
As more and more became buyers markets and the entrepreneurial problem became one of solving the shortage of customers rather than that of goods, the sales concept became the dominant idea guiding marketing. Most firms practice this concept when they have overcapacity. This concept maintains that a company cannot expect its product to get picked up automatically by the customers. The company has to consciously push its products. Aggressive advertising, high-power personal selling, large scale sales promotion, heavy price discounts and strong publicity and public relations are the tools used by organizations that rely on this concept. As a result the public often identifies marketing with hard selling and advertising.
But marketing based on hard selling carried high risk. It assumes that customers who are coaxed into buying a product will like it and if they don’t, that they won’t bad mouth it or complain to consumer organizations and will forget their disappointment and buy it again. These assumptions do not have base. One study showed that dissatisfied customers may bad-mouth the product to 10 or more acquaintances and bad news travels fast.
Selling concept is practiced more aggressively with unsought goods, goods that buyers normally do not think of buying such as insurance, encyclopedias etc.
Q4) Write a note on mass marketing.
Being a lot of tactics, like advertising, brand management, sales, service, pricing, email marketing, etc. That's a good start, but far from complete.
The marketing concept, a philosophy of early 1950 gave marketing a much more important role in business.
To apply this concept , an organization must meet basic need.
(i) It must truly believe in the costumers importance. Most of the companies give lip service to this idea.
No manager wants to be caught saying that customers are not important.
(ii) Marketing efforts must be integrated. Specific and measurable goals should be set. All marketing activities should be coordinated . if various departments follow their one private agendas in conducting marketing activities. The organization may lose sight of customers needs.
Q5) What are qualities of a good salesman?
To get the maximum value from this list.
1. Knowledge of the merchandise he sells. The super-salesman analyzes carefully the merchandise or service which he sells and understands thoroughly every advantage which it embraces, because he knows that no salesman can sell successfully that which he, himself, does not understand and believe.
2. Belief in the merchandise or service. The super-salesman never tries to sell anything in which he does not have implicit confidence because he knows that his mind will "broadcast" his lack of confidence to the mind of the prospective buyer, regardless of what he may say about his wares.
3. Appropriateness of merchandise. The super-salesman analyzes both his prospective buyer and his needs and offers him only that which is appropriate to both. He never tries to sell a Rolls Royce to a man who ought to purchase a Ford, even if the prospective buyer is financially able to buy the more expensive car. He knows a bad bargain for the buyer is a worse bargain for the seller!
4. Value given. The super-salesman never tries to get more for his wares than they are actually worth, realizing that the sustained confidence and good-will of his prospective buyer is worth more than a "long-profit" on a single sale.
5. Knowledge of the prospective buyer. The super-salesman is a character analyst. He has the ability to ascertain, from his prospective buyer, which of the nine basic motives he will respond to most freely, and he builds his sales presentation around those motives. Moreover, if his prospective buyer has no outstanding motive for buying, the super-salesman creates one for him, knowing that a motive is essential in "closing" a sale.
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