MARKETING MANAGEMENT 0046

SET 1

Q 1 Explain the various stages involed in new product development

In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process : one involves the idea generation, product design, and detail engineering ; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.

There are several stages in the new product development process...not always followed in order:

(1) Idea Generation: Ideas for new products can be obtained from customers (employing user innovation), the company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or through a policy of Open Innovation.

(2) Idea Screening: The object is to eliminate unsound concepts prior to devoting resources to them. The screeners must ask at least three questions: Will the customer in the target market benefit from the product?, Is it technically feasible to manufacture the product?, Will the product be profitable when manufactured and delivered to the customer at the target price?

(3) Concept Development and Testing: Develop the marketing and engineering details and test the concept by asking a sample of prospective customers what they think of the idea

(4) Business Analysis: Estimate likely selling price based upon competition and customer feedback, estimate sales volume based upon size of market and estimate profitability and breakeven point.

(5) Beta Testing and Market Testing: Produce a physical prototype or mock-up. Test the product (and its packaging) in typical usage situations. Conduct focus group customer interviews or introduce at trade show. Make adjustments where necessary. Produce an initial run of the product and sell it in a test market area to determine customer acceptance

(6) Technical Implementation: Involves managerial planning and focusing on feedback. Make necessary adjustments to ensure product is ready for launch.

(7) Commercialization: Launch the product. Produce and place advertisements and other promotions. Fill the distribution pipeline with product. Critical path analysis is most useful at this stage

Q 2 Discuss the importance of SWOT analysis to develop effective marketing mix

A marketing plan documents and maps out the key elements of a company's marketing strategy, which flows from the company's long-term strategic plan. Components of a marketing plan include an analysis of the company's strengths, weaknesses, opportunities and threat, also known as a SWOT analysis; market segmentation; and strategies to drive sales and profit growth in each of these segments. SWOT is an important foundational element of the marketing plan.

1.

o SWOT -- the internal strengths and weaknesses, along with the external opportunities and threats -- offers guidance for the marketing plan. Management can evaluate how to leverage the strengths to take advantage of opportunities and protect the company against threats. It also can take measures to remedy the weaknesses and prevent competitors from using them as opportunities. SWOT analysis synthesizes the information for managers to make informed decisions on marketing and advertising strategies.

Analysis

o A marketing plan starts with an analysis of the company, customers, competitors, external partners and the overall economy. The company's strengths may include its financial position and cash balance, product quality and brand recognition. Its weaknesses may include an inability to attract qualified candidates due to tightness in the labor market. Its market opportunities may lie in foreign markets with emerging and growing middle classes. It may also find opportunities in local markets indirectly by taking advantage of financial difficulties faced by some of its smaller competitors. However, entry of new competitors and emerging new technological innovations may represent threats because they can alter customer buying habits. External partners, such as suppliers and regulatory agencies, and the overall economic environment must also be evaluated for potential threats and opportunities.

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Segmentation

o The division of a market into groups based on demographic and other factors is known as market segmentation. This allows advertising messages to be targeted specifically to maximize the sales opportunities in each segment. Using the SWOT analysis results, a company will know where the best opportunities are, including niche areas or specific demographic groups that might be underserved by its competitors. Similarly, it also will know potential weaknesses in its own product offerings that might be exploited by its competitors to gain market share and take steps to correct them.

Strategy

o The four "P's" of a marketing strategy are product, price, promotion and place (distribution channels). Once again, SWOT analysis forms the basis of strategic

choices. For example, product decisions are based on the market opportunities, the company's own internal research and development and manufacturing strengths, the availability of adequate financial resources, and the brand recognition. Pricing considerations include sales volume sensitivity to price changes and the impact of discounts and flexible payment terms. The strengths and weaknesses of the distribution channel are important considerations; also important to the marketing plan are the type and mix of channels -- for example, retail or direct -- and the transportation and warehousing logistics. Promotion considerations include designing advertising campaigns based on a brand's strengths -- for example, value and quality -- and the timing of media buys.

o Possible strengths in marketing might be:

o Specialist marketing expertise

o An innovative product or service

o The location of the business – convenient for customers

o The reputation of the brand – perhaps it is trusted or recognised as the highest quality

o Possible weaknesses in marketing might include:

o Lack of a clear product differentiation compared with competing products

o Weak distribution compared with competitors

o Inadequate online presence

o Potential marketing opportunities could include:

o The use of technology to develop new products

o Growing demand from overseas markets (e.g. China & India)

o The use of social media like Facebook and Twitter to reach new customers

o A list of possible marketing threats could include:

o Competitors introducing better products at lower prices

o Changes in the economic environment which encourage customers to be less loyal to established brands

o Changes in customer tastes and fashions

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o Q 3 Briefly explain the major external and uncontrollable factors that influence an organization decision making,performance and strategies

Macro environment is major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes and natural forces.Specific examples of macro environment influences include competitors, changes in interest rates, changes in cultural tastes, disastrous weather, or government regulations.There are a number of common approaches how the external factors which describe the macro environment, can be identified and examined. These factors indirectly affect the organization but cannot be controlled by it. One approach could be the PEST analysis. PEST stands for political, economic, social and technological. Two more factors, the environmental and legal factor, are defined within the PESTEL analysis.The six environmental factors of the PESTEL analysis are the following:

Political factors (like Taxation Policy, Governmental stability)

 Economical factors (like Inflation rate, Rate of people in a pensionable age)

 Technological factors (like Improved communication and knowledge transfer, Technological changes)

Environmental factors (like Energy consumption, Waste disposal)

 Legal factors (like Unemployment law, Health and safety, Advertising regulations)

 Ecology (affects customer's buying habits, affect the firm production process)

Socio-cultural (like consumerism, income level)

The macro environment in which a company or sector operates will influence its performance, and the amount of the influence will depend on how much of the company's business is dependent on the health of the overall economy. Cyclical industries, for example, are heavily influenced by the macro environment, while consumer staples are less so.

In the business world, the four factors that any macro environmental effect could have on a business are known as PEST. PEST is an acronym for Political, Environmental, Social or Technological factors. These factors are umbrella terms for almost anything that could affect business from the outside world.

Businesses' external environment consists of competitive pressures, marketplace influences, government regulations and other uncontrollable, macroeconomic forces. Organizational structure is the formal layout of a company's workforce, showing managerial hierarchies, lines of decision-making authority and the physical grouping of employees. The external business environment can exert a number of pressures that can cause companies and industries to alter and adapt their organizational structures

1. Competitive Pressureo The nature of the competition in a specific industry can have an effect on the

organizational structure of all players in the industry. Consider an industry where companies make changes to their products frequently to stay relevant

with customers. In this industry, companies will need the ability to make major product decisions quickly and frequently, making it helpful to structure organizations to center decision-making authority in a single individual or a small group. The same can hold true for industries with frequent price changes and promotional wars.

Consider the software industry, as an alternative example. Competitors in this industry release new products and new technologies frequently, making it necessary for companies to be continually innovative and place emphasis on research, development and idea-generation. These businesses can benefit from being structured with relatively few layers of management and employees who are empowered to try new things.

2. Legal and Political Factorso The legal and political environment can have an effect on how employees and

departments are distributed across countries around the world. Consider a company which does business in three different countries. If the employment tax rate is significantly higher in one country than the others, the company is likely to avoid locating any facet of their operations in that region.

Trade barriers, such as tariffs and import quotas, are an example of a political influence. These forces can cause a company to build new production facilities inside the countries they export to in order to reduce the total cost of their products. Both of these issues can cause a company to adopt a geographic organizational structure.

3. Customers in the Marketplaceo The importance of customer service in an industry can affect whether

companies in the industry favor a relatively tall or short organizational structure. Companies with only a small focus on customer service, such as paper towel manufacturers, can include more numerous layers of management to ensure that operations flow smoothly. Others, such as retail stores and restaurants, place a tremendous amount of importance on customer service, and front line employees need to be empowered to make decisions, such as giving cash refunds, making product exchanges and giving away free products.

Shareholder Pressure

o In some situations, companies can alter their organizational structure to appease stockholders' expectations. Expectations for profit margins, dividend payments and stock price targets can cause executives to restructure their operations to make their organizations more lean. This can lead to such sensitive challenges as outsourcing and downsizing, as positions are eliminated from the organization chart or moved to different geographic regions

Q 4 Discuss the potential benefits associated with MIS

1. Improves personal efficiency2. Expedites problem solving(speed up the progress of problems solving in an

organization)

3. Facilitates interpersonal communication4. Promotes learning or training5. Increases organizational control6. Generates new evidence in support of a decision7. Creates a competitive advantage over competition8. Encourages exploration and discovery on the part of the decision maker9. Reveals new approaches to thinking about the problem space10. Helps automate the Managerial processes.

Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organisation. It does the following function . - sub serves managerial function - collects stores , evaluates information systematically and routinely - supports planning and control decisions - Includes files , hardware , software , software and operations research models It Facilitates planning In Minimizes information overload MIS Encourages Decentralization It brings Co ordination It makes control easier MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information

A Contemporary Perspective, an information system is "a set of procedures that collects (or retrieves), processes, stores, and disseminates information to support decision making and control." In most cases, information systems are formal, computerbased systems that play an integral role in organizations. Although information systems are computerbased, it is important to note that any old computer or software program is not necessarily an information system. "Electronic computers and related software programs are the technical foundation, the tools and materials, of modern information systems, " Laudon and Laudon wrote. "Understanding information systems, however, requires one to understand the problems they are designed to solve, the architectural and design solutions, and the organizational processes that lead to these solutions."

Though it is sometimes applied to all types of information systems used in businesses, the term "management information systems, " or MIS, actually describes specific systems that "provide managers with reports and, in some cases, on-line access to the organization's current performance and historical records, " Laudon and Laudon noted. "MIS primarily serve the functions of planning, controlling, and decision making at the management level." MIS are one of a number of different types of information systems that can serve the needs of different levels in an organization. For example, information systems

might be developed to support upper management in planning the company's strategic direction or to help manufacturing in controlling a plant's operations. Some of the other types of information systems include: transaction processing systems, which simply record the routine transactions needed to conduct business, like payroll, shipping, or sales orders; and office automation systems, which are intended to increase the productivity of office workers and include such systems as word processing, electronic mail, and digital filing. Ideally, the various types of information systems in an organization are interconnected to allow for information sharing.

SYSTEMS DEVELOPMENT

The development of effective information systems holds a number of challenges for small businesses. "Despite, or perhaps because of, the rapid development of computer technology, there is nothing easy or mechanical about building workable information systems, " Laudon and Laudon stated. "Building, operating, and maintaining information systems are challenging for a number of reasons." For example, some information cannot be captured and put into a system. Computers often cannot be programmed to take into account competitor responses to marketing tactics or changes in economic conditions, among other things. In addition, the value of information erodes over time, and rapid changes in technology can make systems become obsolete very quickly. Finally, many companies find systems development to be problematic because the services of skilled programmers are at a premium.

Despite the challenges inherent in systems development, however, MIS also offer businesses a number of advantages. "Today, leading companies and organizations are using information technology as a competitive tool to develop new products and services, forge new relationships with suppliers, edge out competitors, and radically change their internal operations and organizations, " Laudon and Laudon explained. For example, using MIS strategically can help a company to become a market innovator. By providing a unique product or service to meet the needs of customers, a company can raise the cost of market entry for potential competitors and thus gain a competitive advantage. Another strategic use of MIS involves forging electronic linkages to customers and suppliers. This can help companies to lock in business and increase switching costs. Finally, it is possible to use MIS to change the overall basis of competition in an industry. For example, in an industry characterized by price wars, a business with a new means of processing customer data may be able to create unique product features that change the basis of competition to differentiation.

The impetus to develop a new information system can grow out of end-user demands, the availability of new technology, or management strategy. A variety of tools exist for analyzing a company's information needs and designing systems to support them. The basic process of systems development involves defining the project, creating a model of the current system, deriving a model for the new system, measuring the costs and benefits of all alternatives, selecting the best option, designing the new system, completing

the specific programming functions, installing and testing the new system, and completing a post-implementation audit.

Information systems designers, whether internal to the company or part of an outside firm, are generally responsible for assuring the technical quality of the new system and the ease of the user interface. They also oversee the process of system design and implementation, assess the impact of the new system on the organization, and develop ways to protect the system from abuse after it is installed. But it is the responsibility of small business owners and managers to plan what systems to implement and to ensure that the underlying data are accurate and useful. "The organization must develop a technique for ensuring that the most important systems are attended to first, that unnecessary systems are not built, and that end users have a full and meaningful role in determining which new systems will be built and how, " according to Laudon and Laudon.

KNOWLEDGE MANAGEMENT

Knowledge management (KM) is a relatively new form of MIS that expands the concept to include information systems that provide decision-making tools and data to people at all levels of a company. The idea behind KM is to facilitate the sharing of information within a company in order to eliminate redundant work and improve decision-making. KM becomes particularly important as a small business grows. When there are only a few employees, they can remain in constant contact with one another and share knowledge directly. But as the number of employees increases and they are divided into teams or functional units, it becomes more difficult to keep the lines of communication open and encourage the sharing of ideas.

Knowledge management is a way of using technology to facilitate the process of collaboration across an organization. A small business might begin sharing information between groups of employees by creating a best-practices database or designing an electronic company directory indicating who holds what knowledge. Larger companies, as David Coleman wrote in Computer Reseller News, can implement KM systems through targeted pilot projects or through a broader strategy involving the firm's technical infrastructure. Many companies have installed intranets—or enterprise-wide computer networks with databases all employees can access—as a form of KM. A number of software programs exist to facilitate KM efforts. Some of the leaders in the field include Lotus Notes, Microsoft Exchange Server, and a variety of systems based on XML.

Q 5 Describe five interdependent levels of basic human needs (motivators)as propounded by Abraham Maslow

Abraham Maslow, a psychologist and the first theorist to develop a theory of motivation based upon human needs produced a theory that had three assumptions. First, human needs are never completely satisfied. Second, human behavior is purposeful and is motivated by need for satisfaction. Third, these needs can be classified according to a hierarchical structure of importance from the lowest to highest (Maslow, 1970).

1. Physiological need2. Safety needs3. Belongingness and love needs4. The esteem needs – self-confidence5. The need for self-actualization – the need to reach your full potential

Maslow's hierarchy of needs theory helps the manager to understand what motivates an employee. By understanding what needs must be met in order for an employee to achieve the highest-level of motivation, managers are then able to get the most out of production. Theory X, Y and Z all play a role in how a company should manage successfully. Theory X and Theory Y were both written by Douglas McGregor, a social psychologist who is believed to be a key element in the area of management theory. In McGregor’s book The Human Side of Enterprise (1960), McGregor describes Theory X and Theory Y based upon Maslow’s hierarchy of needs, where McGregor grouped the hierarchy into a lower order (Theory X) needs and a higher order (Theory Y) needs. McGregor suggested that management could use either set of needs to motivate employees, but better results could be gained by the use of Theory Y, rather than Theory X (Heil, Bennis, & Stephens, 2000).

History of Theory Z

Professor Ouchi spent years researching Japanese companies and examining American companies using the Theory Z management styles. By the 1980’s, Japan was known for the highest productivity anywhere in the world, while America had fallen drastically. The word "Wa" in Japanese can be applied to Theory Z because they both deal with promoting partnerships and group work. The word "Wa" means a perfect circle or harmony, which influences Japanese society to always be in teams and to come to a solution together. Promoting Theory Z and the Japanese word "Wa" is how the Japanese economy became so powerful. And also because the Japanese show a high level enthusiasm to work,some of the researchers claim that 'Z' in the theory Z stands for 'Zeal'.

Ouchi wrote a book called Theory Z How American Business Can Meet the Japanese Challenge (1981), in this book; Ouchi shows how American corporations can meet the Japanese challenges with a highly effective management style that promises to transform business in the 1980’s. The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. “This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development, and consensus decision-making”(Ouchi, 1981). Ouchi shows that the results show lower turn-over, increased job commitment, and dramatically higher productivity.

William Ouchi doesn’t say that the Japanese culture for business is necessarily the best strategy for the American companies but he takes Japanese business techniques and adapts them to the American corporate environment. Much like McGregor's theories, Ouchi's Theory Z makes certain assumptions about workers. Some of the assumptions about workers under this theory include the idea that workers tend to want to build happy and intimate working

relationships with those that they work for and with, as well as the people that work for them. Also, Theory Z workers have a high need to be supported by the company, and highly value a working environment in which such things as family, cultures and traditions, and social institutions are regarded as equally important as the work itself. These types of workers have a very well developed sense of order, discipline, a moral obligation to work hard, and a sense of cohesion with their fellow workers. Finally, Theory Z workers, it is assumed, can be trusted to do their jobs to their utmost ability, so long as management can be trusted to support them and look out for their well being (Massie & Douglas, 1992).

One of the most important pieces of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work. This theory assumes that workers will be participating in the decisions of the company to a great degree. Ouchi explains that the employees must be very knowledgeable about the various issues of the company, as well as possessing the competence to make those decisions. He also points out; however, that management sometimes has a tendency to underestimate the ability of the workers to effectively contribute to the decision making process (Bittel, 1989). But for this reason, Theory Z stresses the need for the workers to become generalists, rather than specialists, and to increase their knowledge of the company and its processes through job rotations and constant training. Actually, promotions tend to be slower in this type of setting, as workers are given a much longer opportunity to receive training and more time to learn the ins and outs of the company's operations. The desire, under this theory, is to develop a work force, which has more of a loyalty towards staying with the company for an entire career, and be more permanent than in other types of settings. It is expected that once an employee does rise to a position of high level management, they will know a great deal more about the company and how it operates, and will be able to use Theory Z management theories effectively on the newer employees

Q 6 List the important differences between consumer market and business markets

The consumer market is all about selling products and getting the best revenue from that. So therefore, offers will be placed on products to make them more attractive for people to buy so that company gets the sales.  The consumer market is also very competitive and this means that if you wish to be successful within it, you need to keep tabs on what the competition is doing and better them. The consumer market is all about making cheap produce and selling it on at a higher price to the general public to make a profit. The business market, however, is more difficult to define. The differences between it and the consumer market are mainly that the business market is less directly competitive, but at the same time you need to make sure your product, or shares, are attractive to the buyer. So it is more about promoting what you have to make buyers aware of it and why it is so good. The factors that influence consumer buying behaviour will be things such as the price of the product, and whether it is actually worth the price that it is being marketed at, the place at which it is being sold, because consumers often

have favourite stores, and will look for a reputable name to buy from, and necessity. If the product is something that is needed rather than a one off or a novelty then you are more likely to sell it. The factors that influence business buying are more about the professionalism of the companies selling and their potential to keep providing good share prices are key factors. In the business market it is all about getting your name seen as reputable and knowing what is good to invest in at the time. In business you are more likely to need to impress a company than in consumer buying because the only judge is the consumer themselves

Business marketing vs. consumer marketing

Although on the surface the differences between business and consumer marketing may seem obvious, there are more subtle distinctions between the two with substantial ramifications. Dwyer and Tanner (2006) note that business marketing generally entails shorter and more direct channels of distribution.

While consumer marketing is aimed at large groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. According to Hutt and Speh (2004), most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals. While that advertising is limited, it often helps the business marketer set up successful sales calls.

Marketing to a business trying to make a profit (business-to-business marketing) as opposed to an individual for personal use (Business-to-Consumer, or B2C marketing) is similar in terms of the fundamental principles of marketing. In B2C, B2B and B2G marketing situations, the marketer must always:

successfully match the product or service strengths with the needs of a definable target market;

position and price to align the product or service with its market, often an intricate balance; and

communicate and sell it in the fashion that demonstrates its value effectively to the target market.

These are the fundamental principles of the 4 Ps of marketing (the marketing mix) first documented by E. Jerome McCarthy in 1960.

While "other businesses" might seem like the simple answer, Dwyer and Tanner (2006) say business customers fall into four broad categories: companies that consume products or services, government agencies, institutions and resellers.

The first category includes original equipment manufacturers, such as large automakers who buy gauges to put in their cars and also small firms owned by

1-2 individuals who purchase products to run their business. The second category - government agencies, is the biggest. In fact, the U.S. government is the biggest single purchaser of products and services in the country, spending more than $300 billion annually. But this category also includes state and local governments. The third category, institutions, includes schools, hospitals and nursing homes, churches and charities. Finally, resellers consist of wholesalers, brokers and industrial distributors.

Meaningful differences between B2B and B2C marketing

A B2C sale is to a "Consumer" i.e. an individual who may be influenced by other factors such as family members or friends, but ultimately the sale is to a single person who pays for the transaction. A B2B sale is to a "Business" i.e. organization or firm. Given the complexity of organizational structure, B2B sales typically involve multiple decision makers. The marketing mix is affected by the B2B uniqueness which include complexity of business products and services, diversity of demand and the differing nature of the sales itself (including fewer customers buying larger volumes). Because there are some important subtleties to the B2B sale, the issues are broken down beyond just the original 4 Ps developed by McCarthy

Set 2

Q1 What do you mean by marketing functions?Briefly explain the important marketing functions

Marketing is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.””

For business to consumer marketing it is "the process by which companies create value for customers and build strong customer relationships, in order to capture value from customers in return". For business to business marketing it is creating value, solutions, and relationships either short term or long term with a company or brand. It generates the strategy that underlies sales techniques, business communication, and business developments.It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves.

Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature markets and overcapacities in the last 2-3 centuries.The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable.

The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.

The term developed from an original meaning which referred literally to going to a market to buy or sell goods or services. Seen from a systems point of view, sales process engineering marketing is "a set of processes that are interconnected and interdependent with other functions, whose methods can be improved using a variety of relatively new approaches."

The Marketing Function are: 1. Distribution2. Product/Service Management3. Pricing4. Promotion5. Selling6. Financing7. Marketing Information Management

1. Distribution

The distribution function handles activities involved in getting products from producers to customers. Activities include:-transporting goods-storing goods-finding sources for products-making sure products get where they are needed on time -transferring ownership of products.

2. Product/Service ManagementThis function focuses on developing products.

Examples include:Developing a new productImproving on an old product

As it related to retail, product management includes deciding which products to carry in a store.

3. PricingThis function handles all activities involved in setting prices for products.Activities include:Financial information to determine price Setting prices to cover costs and include reasonable profit.Adjusting prices when conditions change.4. PromotionRefers to the non-personal communication with customers. In this type of communication, the same message is conveyed to all customers. Types of non-personal communication includes:-Advertising-Public relations-Sales promotion-Visual merchandising

5. SellingThe selling function consists of personal communication with customers.

Activities include:Helping customers in a storeMaking sales presentationsAnswering questions on the phoneDemonstrating how complex products work

6. FinancingFinancing in marketing includes:-Managing the money for marketing activities-Gathering information on costs of marketing-Preparing budgets

7. Marketing information management (MIM) is also known as Marketing Research.MIM gathers, analyzes and distributes information about markets, competition, and customers.This is one of the main ways that a business learns what customers want.MIM activities might include developing surveys, analyzing the results of surveys and meeting with customers.

Q2 Define the term “”Brand Equity””?Discuss the components of Brand Equity

The notion of “brand equity” has been common currency amongst marketers for several years. And barely a day goes by without marketing, HR and other departments speaking about the “health” or “value” of their brand.

In this paper I aim to untangle a number of related concepts of use to brand owners and those working with brands. (I’m not entering into the business of financial brand valuation. For an example of this see Interbrand’s methodology.)

First up are two ways of conceptualising the importance or power of a brand; brand equity and brand value. These topics form the first half of this paper. Brand health is a kind of hybrid which we’ll come to later. In the second part of this paper we’ll also review the difference between brand equity and brand outcomes, and consider brand equity in the context of other market-based assets.

Brand Equity

A brand can be said to have brand equity (also called consumer or market equity) when consumers respond favourably to it. This depends upon a combination of recognition, associations and judgements made by the consumer. Brand equity can be regarded as an indicator of the success of a brand.

Keller (2008) defines brand equity thus: “A brand has positive customer-based brand equity when consumers react more favourably to a product and the way it is marketed when the brand is identified than when it is not”. This is a much simpler definition than that of Aaker (1996). Aaker’s definition (which preceded that of Keller) describes brand equity as “the set of assets and liabilities linked to a brand’s name and symbol that adds to or subtracts from the value provided by a product or service to a firm and/or that firm’s customers”. Note how Aaker’s definition includes extensional (ie physical) components of the brand that are unconnected to its audience, while Keller’s definition requires an audience for equity to exist. While I believe Aaker is right to highlight the important role of tangible assets such as “name and symbol” in creating strong brands, I prefer to see these as causes of rather than components within brand equity. For this reason we will adopt a position that is closer to Keller for the remainder of this article.

Strictly speaking it is not entirely clear whether Keller means “brand equity” to refer to consumers’ favourable reaction itself or to the cause of this reaction. In some instances, his definition reads as though brand equity is the observable behaviour, but this means that the cause is something else – as yet unnamed. Since this introduces another layer to our conception of how brands work, things quickly start to get very complicated. As Raggio & Leone (2009) have observed, “if brand equity is defined as the outcomes or results of some unnamed and unmeasured construct, what is that construct and why are researchers not concerned with it?”. To avoid confusion, we will assume that

brand equity is the cause of the favourable phenomena; and use with this revised Keller position within this paper.

With this definition in mind then, the classic symptom of brand equity is reduced price sensitivity. For example, a consumer is willing to pay a higher price for a Coca-Cola than for a generic (or unknown) cola. It is the knowledge about the brand that consumers hold in their heads which determines this equity.

As noted in Keller’s definition, brand equity will also lead to increased effectiveness of marketing activity since the presence of the brand will ensure higher cutthrough. In this way, the concept of brand equity relates to the broader concept in business strategy of gaining competitive advantage from particular resources or assets (for example, see Peteraf (1993)). Asset-based advantage typically occurs when certain assets magnify the impact or attractiveness of other assets; and when these assets are difficult to imitate or substitute. We’ll come back to valuable assets when we consider the broader set of market-based assets later

"Brand Equity" is the sum total of all associations, experiences, and perceptions consumers have over time with a company, including its products, services, marketing, employees, retail stores, etc. As companies seek to establish greater Brand Equity, its three components must be considered separately.

AwarenessUnaided awareness is the foundation and first key measure of brand equity. Awareness comes from exposure, i.e. advertising, publicity, event sponsorship, store fronts and signage, email campaigns, direct mail campaigns, packaging, website, banner ads, etc. These things must be created with extraordinary style and creativity so they grab attention and have impact.

UnderstandingUnderstanding comes from what you say about yourself, and, more importantly, what others say about you. Do consumers think about you the same way you think about yourself? In the past, understanding was shaped largely by the news media and word of mouth, but now social media gives brands a tremendous opportunity to listen to what consumers are saying and engage them in actual conversation. Imagine for a moment that your target audience could only think of you in one single way. What would you want it to be, and how many would say that very thing about you?

LoyaltyLoyalty comes through positive interaction with a brand. The more positive the experience, the deeper consumer loyalty becomes. Branding is a business strategy not just a marketing strategy. It is a long-term commitment, not a short-term initiative. Develop a positive experience through product design, employee training, creating a great shopping experience, and customer-friendly corporate policies. From a marketing perspective, look at highly personalized data base driven marketing programs, i.e. preferred customer programs, cross-sell programs, and particularly the personalization of your website.

Q 3 Why are the marketing channels indispensable?List the functions of marketing channels

Marketing channels move products and services from businesses to consumers and to other businesses., channels of distribution consist of a set of interdependent organizations—such as wholesalers, retailers, and sales agents—involved in making a product or service available for use or consumption. Distribution channels are just one component of the overall concept of distribution networks, which are the real, tangible systems of interconnected sources and destinations through which products pass on their way to final consumers. As Howard J. Weiss and Mark E. Gershon noted in Production and Operations Management, a basic distribution network consists of two parts: 1) a set of locations that store, ship, or receive materials (such as factories, warehouses, retail outlets); and 2) a set of routes (land, sea, air, satellite, cable, Internet) that connect these locations. Distribution networks may be classified as either simple or complex. A simple distribution network is one that consists of only a single source of supply, a single source of demand, or both, along with fixed transportation routes connecting that source with other parts of the network. In a simple distribution network, the major decisions for managers to make include when and how much to order and ship, based on internal purchasing and inventory considerations.

In short, distribution describes all the logistics involved in delivering a company's products or services to the right place, at the right time, for the lowest cost. In the unending efforts to realize these goals, the channels of distribution selected by a business play a vital role in this process. Well-chosen channels constitute a significant competitive advantage, while poorly conceived or chosen channels can doom even a superior product or service to failure in the market.

MULTIPLE CHANNELS OF DISTRIBUTION

For many products and services, their manufacturers or providers use multiple channels of distribution. A personal computer, for example, might be bought directly from the manufacturer, either over the telephone, direct mail, or the Internet, or through several kinds of retailers, including independent computer stores, franchised computer stores, and department stores. In addition, large and small businesses may make their purchases through other outlets.

Channel structures range from two to five levels. The simplest is a two-level structure in which goods and services move directly from the manufacturer or provider to the consumer. Two-level structures occur in some industries where consumers are able to order products directly from the manufacturer and the manufacturer fulfills those orders through its own physical distribution system. In a three-level channel structure retailers serve as intermediaries between consumers and manufacturers. Retailers order products directly from the manufacturer, then sell those products directly to the consumer. A fourth level is added when manufacturers sell to wholesalers rather than to retailers. In a four-level structure, retailers order goods from wholesalers rather than manufacturers. Finally, a manufacturer's agent can serve as an intermediary between the manufacturer and its wholesalers, creating a five-level channel structure consisting of the manufacturer, agent, wholesale, retail, and consumer levels. A five-level channel structure might also consist of the manufacturer, wholesale, jobber, retail, and consumer levels, whereby jobbers service smaller retailers not covered by the large wholesalers in the industry.

FUNCTIONS OF MARKETING CHANNELS

Marketing channels (Distribution channels) move goods and services for producers to consumers. It overcomes the major time, place and possession gaps the separate good and services from those who would use them. Manufacturers, wholesalers, and retailers as well another channels members exist in channel arrangements to perform one or more of the following generic functions:-• Information gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.

• Promotion: Developing and spreading persuasive communications about an offer.

• Contact: Finding and communicating with prospective buyers.

• Matching: Shaping and fitting the offer to the buyers needs including activities such as manufacturing, grading, assembling and packaging.

• Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.

• Others help to fulfil the completed transactions.

• Physical distribution: Transporting and storing goods.

• Financing: Acquiring and using funds to cover the costs of the channel work

• Risk taking: assuming the risks of carrying out the channel work

• Carrying of inventory, demand generation or selling, after sales services.In getting its goods to end users, a manufacturer must either assume all these functions or shift some or all of them to channel intermediaries. The foregoing discussion underscores three important principles in the structure of marketing channels

Q4 Explain the different methods which allows a media planner to decide budget allocation

An offering’s budget is a critical factor when it comes to deciding which message strategies to pursue. Several methods can be used to determine the promotion budget. The simplest method for determining the promotion budget is often merely using a percentage of last year’s sales or the projected sales for the next year. This method does not take into account any changes in the market or unexpected circumstances. However, many firms use this method because it is simple and straightforward.

The affordable method, or what you think you can afford, is a method used often by small businesses. Unfortunately, things often cost more than anticipated, and you may not have enough money. Many small businesses think they’re going to have money for promotion, but they run out and cannot spend as much on promotion as they had hoped. Such a situation may have happened to you when you planned a weekend trip based on what you thought you could afford, and you did not have enough money. As a result, you had to modify your plans and not do everything you planned.

Other companies may decide to use competitive parity—that is, they try to keep their promotional spending comparable to the competitors’ spending level. This method is designed to keep a brand in the minds of consumers. During a recession, some firms feel like they must spend as much—if not

more—than their competitors to get customers to buy from them. Other companies are forced to cut back on their spending or pursue more targeted promotions. When Kmart faced bankruptcy, they cut back on expenditures, yet they kept their advertising inserts (free-standing inserts, or FSI) in Sunday newspapers to remain competitive with other businesses that had an FSI.

A more rational approach is the objective and task method, whereby marketing managers first determine what they want to accomplish (objectives) with their communication. Then they determine what activities—commercials, sales promotions, and so on—are necessary to accomplish the objectives. Finally, they conduct research to figure out how much the activities, or tasks, cost in order to develop a budget.

Part of the budgeting process includes deciding how much money to allocate to different media. Although most media budgets are still spent predominantly on traditional media, shifts in spending are occurring as the media landscape continues to change. Mobile marketing continues to become more popular as a way to reach specific audiences. One estimate shows that over one-third of cell phone users were exposed to mobile advertising in 2009 and that 16 percent of the people exposed to mobile advertising responded to the ads via text messaging. Younger people are typically the most accepting of mobile advertising

The manufacturers of most major brands plan to use texting and multimedia messages in the future. Mobile marketing allows advertisers to communicate with consumers and businesses on the go. Over half of Chinese, Korean, Indian, and Thai Internet users access social media sites through their phones rather than through computers. While many marketers plan to use electronic devices for their mobile-marketing strategies, other firms may use movable or mobile promotions

Q5 Define the term “direct marketing” Explain the different methods adopted for direct marketing

Direct marketing

involves a total set of activities by which the seller attempts to elicit a direct action response—for example, a purchase. As such, it employs many aspects of marketing, including marketing research, segmentation, advertising, evaluation, etc. A distinction is made between direct marketing and direct marketing media. The former includes the total set of marketing activities involved in obtaining a direct response. Direct marketing media are the tools that direct marketers use in the communications process. B. The Growth of Direct Marketing—Direct marketing has grown tremendously in the past few years as a result of a number of contributing factors:

•the catalog

•the use of consumer credit cards

•direct-marketing syndicates

•the changing structure of the Indian market

•technological advances

•various other factors.C.The Role of Direct Marketing in the IMC Program—Direct marketing activities support

Q6 List the important differences between International marketing and Domestic marketingand are supported by other elements of the promotional mix.1.Combining direct marketing with advertising—Direct marketing is in itself a formof advertising. Whether through mail, print, or TV, the direct-response offer is anad. Sometimes the ad supports the direct selling effort.2.Combining direct marketing with public relations—Private companies may usetelemarketing activities to solicit funds for charities or cosponsor charities thatuse these and other direct response techniques to solicit funds.3.Combining direct marketing with personal selling—Nonprofit organizations oftenuse telemarketing to solicit funds.4.Combining direct marketing with sales promotions—For example, airlines send outmailers announcing promotional airfares.D.Direct-Marketing Objectives—Direct marketers seek a direct response. This responseneed not necessarily be a behavioral response, as direct marketing is now used forother purposes: to build an image, maintain customer satisfaction, and inform and/or educate customers in an attempt to lead to future actions.E .Developing a Database—One of the most important parts of the direct marketing program is the development of a database. The database is the foundation from which direct marketing decisions evolve. Databases are used to perform the following functions:

•Improving the selection of market segments

•Stimulate repeat purchases

•Cross-sell Sources of database information are listed on pages 469-470.F.Direct Marketing Strategies and Media—Direct marketers generally pursue either a(1)

one-step approach

or a (2)

Two-step approach in developing media strategies. In the one-step approach, the medium is used to directly obtain an order (for example, direct response television ads). In the two-step approach, more than one medium may be used, with the first effort designed to screen or qualify buyers and the second designed to generate the response. A number of direct response media are available to the marketer including:1.Direct mail—Mail order sales exceeded $582 billion, and approximately half of this was in the consumer market. Keys to the success of direct mail are the mailing list and the ability to segment markets.2.Catalogs—Catalog sales are projected to reach $16 billion by the year 2006.3.Broadcast media—Two broadcast media are available to direct marketers: TV and radio. The majority of direct marketing broadcast advertising now occurs on TV.4.Infomercials—The lower cost of commercials on cable and satellite channels has led advertisers to a new form of advertising.5.Teleshopping—The major shopping channels in the United States—QVC, and the Home Shopping Network, —account for over $3.9 billion worth of sales, though there are indications that this medium may have already reached maturity.6.Print media—Magazines and newspapers are difficult media to use for direct marketing because of clutter and the relative expense.7.Telemarketing—Over $661 billion dollars worth of sales took place through telemarketing phone calls. Telemarketing continues to grow, particularly in the business-to-business

sector, which accounted for about 2/3 of the sales dollars.8.Electronic teleshopping—an on-line shopping and information retrieval service accessed through personal computers.

II.DIRECT SELLING

Direct selling involves the direct, personal presentation, demonstration and sales of productsand services to consumers in their homes:1 Repetitive person-to-person selling—Amway2 Nonrepetitive person-to-person selling – Encyclopedia Brittanica3 Party plans—Tupperware

III. EVALUATING THE EFFECTIVENESS OF THE DIRECT MARKETING PROGRAM

In addition to some of the effectiveness measures employed by other marketers, directmarketers also employ a measure based on cost per order (CPO). Using CPO the marketerknows almost instantly whether or not the advertisement is working.A.Advantages of direct marketing are cited including: (1) selective reach; (2)segmentation capabilities; (3) frequency; (4) flexibility; (5) timing; (6)personalization; (7) cost efficiencies; and (8) ability to measure effectiveness.B.Disadvantages include: (1) image factors; (2) accuracy; and (3) content support.

Q 6 List the Important differences between International marketing and Domestic marketing

International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm.It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets.According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives."In contrast to the definition of marketing only the word multinational has been added.In simple words international marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term

According to Kotabe, the following topics covers the micro-context of international marketing.

Organisational and consumer behaviour:

organisational buying behaviour ;

international negotiations ;

consumer behaviour ;

country of origin .

Marketing entry decisions:

initial mode of entry

specific modes of entry

exporting ;

joint ventures .

Local market expansion: marketing mix decisions:

global standardisation vs. local responsiveness

Marketing mix :

product policy;

advertising;

pricing;

distribution.

Global strategy:

Competitive strategy :

conceptual development;

competitive advantage vs. competitive positioning;

sources of competitive advantage and performance implications.

Strategic alliances :

learning and trust;

recipes for alliance success;

performance of different types of alliance.

Global sourcing :

global sourcing in a service context;

benefits of global sourcing;

country of origin issues in global sourcing.

Multinational performance:

determinants of performance;

a different interpretation of performance.

Analytical techniques in cross-national research:

measuerment issues;

reliability and validity issues.

Differences between domestic marketing and international marketing

International is developed by various multinational companies on a global level in order to set a common brand platform for their products and brands. It is then passed on to each local or domestic market who makes adjustments for their country and manages its implementation. Such a structure ensures a global brand consistency, pricing and messaging. It also can have significant cost savings as major advertising and marketing campaigns can be developed centrally