DRIVE SUMMER 2014

ASSIGNMENT
PROGRAM- BBA
SEMESTER- 2
SUBJECT CODE & NAME
BBA 204
MARKETING MANAGEMENT
BK ID- B1521
CREDITS 4
MARKS 60



Q.1: Explain the personal, socio-cultural, Psychological determinants of consumer behaviour.
Definition of consumer behaviour (1 Marks)
Personal determinants- Consumer demographics, Consumer psychographics (3 Marks)
Socio-Cultural determinants- Social factors, Cultural factors Environmental factors (3 Marks)
Psychological determinantsPerception, Learning, Memory Motivation(3 Marks)

ANS:
Definition of consumer behaviour:
Consumer behaviour is the field of study which analyses the behaviour of consumers on the basis of the
individual consumers characteristics and on the buying process, taken as a whole.

Personal determinants- Consumer demographics, Consumer psychographics:
There are two main personal factors which influence an individual consumer, as follows
Consumer demographics These are the factors such as age, education level, income group, economic
capacity, etc., which determine the buying behaviour of consumers. For example, a consumer from
alower class may buy unbranded products which are low-priced, while amiddle class or upper class
consumer may buy branded products with abetter quality and increased price.
Consumer psychographicsThese are the factors such as attitude,values, lifestyle, self-image, status and
prestige which have an impacton the buying behaviour. While the consumers may have the same
orsimilar demographic profile, there may be a large variance in thepsychographic profiles which influence
the buying decisions. Forexample, consumers who have similar demographics might want todress
differently and pay different prices for clothes.

Socio-Cultural determinants- Social factors, Cultural factors Environmental factors:
The socio-cultural factors which determine buyer behaviour can beclassified as follows
a. Social factors As per the adage No man is an island, individuals cannot live by themselves in
society. Each individual has a definite role in societal activities and is also influenced by the social
factors. The social groups, with which the individual interacts, have a bearing in the consumer behaviour.
A consumers social groups are of three types, namely, intimate groups (Family, friends, peers, etc),
secondary groups (groups based on occupation, residence, professional bodies, etc) and society (this is the
larger social tier or group to which the individual belongs). All the social groups tend to influence the
thinking and behaviour of the consumer.
b. Cultural factors Culture refers to the set norms or rules or conduct which has been taught to the
individual from childhood. A persons culture influences food, clothes, locality of residence, practices.
Culture accompanies an individual from cradle to the grave. Hence, culture alsoplays a significant role in
the social and buying behaviour of the consumer. For example, a persons religion decides the festivals to
befollowed. The consumer may shop for new clothes only during times ofsuch festivals.
c. Environmental factors In the current age of information overload, the buyer is exposed to heavy
advertising and promotion of products through diverse media such as television, internet, etc. The buyer is
influenced into buying a product due to the extensive marketing campaigns launched by the organisations.
Initial discounts, attractive window displays, free trial or samples being handed out, all serve to induce the
buyer to purchase the product. Thus, environmental factors are a strong determinant of buyer behaviour.

Psychological determinantsPerception, Learning, Memory Motivation:
There are certain psychological factors which influence the buying decisions.
a. Perception This is the process in which the buyer assimilates the information which comes to him
from numerous sources. Based on the information input, the buyer then forms an opinion on the product
or idea.The perception of a particular situation is different from one individual to another. The same
object is perceived differently by different individuals. A favourable perception about the product makes
the buyer to purchase the product.
b. Learning When individuals learn new ideas, they tend to evaluate their ideas and beliefs and try to
incorporate the new learning into them. The buyer can be made to learn new ideas by constant
advertising. Marketing managers can use positive reinforcement tools to make the customer learn the
product better.
c. Memory Brand visibility and constant reinforcement through marketing communication and
advertising helps to embed the product in the buyers minds. This also leads to better recall of the brand,
which is a crucial factor to influence the buying decisions.
d. Motivation Motives refer to the needs which have been awakened ina buyer. The buyer gets
motivated to achieve their goals or motives, when they become aware of such needs. An effective
marketing manager succeeds in awakening the need of the customer for the product. This leads to a
buying decision by the customer for the product.


Q.2: Describe the methods of environmental analysis-SWOT, PEST.
Strength, Weakness, Opportunity, Threat (5 Marks)
Political, Economic, Social, Technological Environment (5 Marks)

ANS:
Strength, Weakness, Opportunity, Threat:
SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats.
Strengths: characteristics of the business or team that give it an advantage over others in the industry. For
example, Microsofts strength is its operating system Windows and related software applications is
used by a large customer base all over the world.
Weaknesses: are characteristics that place the firm at a disadvantage relative to others. For example,
weakness can be high attrition rate.
Opportunities: external chances to make greater sales or profits in the environment. For example,
changing lifestyle of people- the firm can make use of their capability to cater to the changing lifestyle of
people which in turn could help company to gain profits.
Threats: external elements in the environment that could cause trouble for the business. For example, the
small retail shops owners found a great threat when big retailers began their operations in India.

Political, Economic, Social, Technological Environment:
PEST analysis stands for "Political, Economic, Social, and Technological analysis". It describes a
framework of macro-environmental factors used in the environmental scanning component of strategic
management. It is a part of the external analysis when conducting a strategic analysis or doing market
research, and gives an overview of the different macro environmental factors that the company has to take
into consideration. It is a useful strategic tool for understanding market growth or decline, business
position, potential and direction for operations.
The growing importance of environmental or ecological factors in the first decade of the 21st century has
given rise to green business and encouraged widespread use of an updated version of the PEST
framework.A PEST analysis incorporating legal and environmental factors is called aPESTLE
analysis.Specifically the PEST or PESTLE analysis is a useful tool for understanding risks associated
with market growth or decline, and as such the position, potential and direction for a business or
organization.
Q.3: Discuss the characteristics of services (any three) and the important strategies which help in
marketing of services.
Characteristics of Services (any three) (3 Marks)
Strategies for marketing of services (7 Marks)

ANS:
Characteristics of Services (any three):
a) Perishability Services are perishable or short term in nature. They cannot be transported or stored for
a long time, like other goods. The service comes into existence only when the customer demands for the
same. Both the customer and the service provider have to be physically present at the time of providing
service. Due to the perishable nature, there is a lot of fluctuation in providing services as there is greater
risk and uncertainty. For example, airlines charge for seats even if the passenger fails to turn up for a
flight.
b) Change in demand Due to the instantaneous nature of services, there is a demand and supply
mismatch. This problem is acute as it is not possible to increase or decrease the quantity of service supply
to match the demand. Hence, the demand for services is ever shifting. For example, tourism industry has
seasonal demand.
c) Intangibility Unlike physical products, services are intangible, i.e., they do not have a real or physical
form and cannot be perceived by a persons senses. Due to the intangible nature, the customer has to rely
upon personal inference or impressions to grade a service and it is difficult to describe quality standards
to a service. The marketing manager has to highlight certain aspects of the service, such as thevalue or
benefit of the service, celebrity endorsements, brand building and visibility as well as focusing on the real
or tangible aspects of the service, as a part of the marketing strategy.

Strategies for marketing of services:
a)Deepening of customer relationship In the fast pace of modern life, customers look for one-stop-
shop solutions for most of their purchasing needs. This helps them to save time and costs and provides
consolidation of services. Also, a customer who has multiple relationships with a service provider will
tend to be more loyal and willprovide higher volumes of business due to the concentration of services.So,
service providers adopt the strategy of cross-selling other productsto an existing customer, thereby
increasing the customer loyalty. For example, banks cross selling products to customers.
Membership relation or reward programsService industries offer tiered loyalty programs to
customers, wherein customers who use the service more frequently are provided preference and are given
special treatment. Loyal customers are divided into tiers or classes and are provided reward programs
which suit that level. Rewards may be provided in monetary or non-monetary value to the customer. Such
programs help to increase the value perception of the service in the minds of the customer and ensure that
the customer is loyal to the brand. However, due care should be taken so that the program does not
generate dissatisfaction in the mind of the customer by not providing the service value perceived by the
customer. For example, airlines providing frequent flier points or miles to passengers who use their flights
regularly.
b)Social relationships Service is an intangible element which is heavily dependent upon the people
factor. For providing a successful service, it is important to develop inter-personal relationships with the
customers. The service provider has to understand the personality traits of the customer, so as to serve
them better. Time and again, customers tend to be loyal to the provider who has an established social
relationship with them, as it makes them feel more valued. For example, clubs are formed on social
relationships between members.
c) Customisation Could also be referred to as personalisation of services. If the service provider is able
to customise the service to suit the consumers needs, then such a strategy is very effective in the
marketing of services. Customisation of the user experience satisfies the human need for seeking attention
and makes the customer to feel valued. This increases the brand loyalty and seeks to retain the customer
within the organisation. For example, restaurants or hotels remembering their guests preferences.
d) Structural bonding Some service industries provide structural or infrastructural support to its
customers by integrating the customers into the organisational systems and processes. This helps to
strengthen therelationship with the customer. As the customer becomes used to the organisations
processes, it becomes a tool of customer loyalty. This type of bonding can be used for both individuals as
well as organisations. For example, airlines providing SMS or e-mail alerts for passengers.


Q.4: Define Product mix. Explain the factors determine the decisions of the Product mix.
Definition of Product mix (2 Marks)
Factors determine the decisions of the product mix (8 Marks)
ANS:
Definition of Product mix:
A product mix (also called product assortment) is the set of all product lines and items that a particular
seller offers for sale to buyers." An organizationwith several product lines has a product mix. Product mix
need not consist of related products. In other words, product mix is "the composite of products offered for
sale by a firm."

Factors determine the decisions of the product mix:
The following factors, usually, influence the product mix decision of a firm:
i) Changes in market demand:
Changes in market demand are one of the factors influencing the product mix. When there is a change in
market demand for a product, there will be a change in the product mix. If the demand for any new
product has been constantly increasing, and if the firm is capable of producing that product economically,
efficiently and profitably and competing with its rivals, then, it can include the new product in its product
mix. In case the demand for any of its existing products has been declining constantly, then, it can remove
that particular product from its product mix and can also suspend its production.
ii) Cost consideration (i.e., Cost of production):
The cost consideration, i.e., the cost of production, is one of the factors influencing the product mix. If a
firm is able to produce a new product at a lower cost with its available machinery, labour, etc., it can
produce the new product and expand its product mix. This will help the firm to bring down the cost of
production of its existing products. Thus, cost consideration influences the product mix of a firm.
iii) Advertising and distribution factors:
A firm using a wide net-work of advertising and distribution channels can think of adding new products
to its product line, as they can be distributed with the help of the same network. This will also bring down
its advertising and distribution costs. Thus, advertising and distribution factors influence the product mix
of firm.
iv) Image of the Producer:
Sometimes, product mix of an enterprise is changed to improve the image of the producer. For instance, a
decision may be taken to produce product of only high quality just to improve the image of the producer.
v) Objective of maximization of profits:
The objective of maximization of profits influences the product mix. The product mix is required to be
changed so as to earn maximum profits. The production of less profitable products may be stopped and
the production of more profitable products may be increased to maximize profits.
vi) Competitors' action and reaction:
A firm may have to change its product mix due to competitors' action and reaction. For instance, if the
competitors have made any change in packing,size, colour, price, etc. of their products, relevant changes
have to be made in the product mix of the enterprise also.
vii) Financial resources of the firm:
Financial resources of the firm also decide its product mix. A firm may add new product lines according
to its financial capacity during the period of prosperity so as to increase its profitable sales volume or
dropout some existing items during the period of depression, when its financial resources are not adequate
to carry on the production of all the products.
viii) Production influences:
Production capacity of a firm influences its product mix. A firm may change its product mix with a view
to use its production capacity more effectively and efficiently, and thereby, reduce its overall net
production cost. A firm may add new product line when the production of a product has been
discontinued by its rival firms. A firm may also add new product lines in order to make a better use of its
by-products or waste products. For instance, sugar factory may undertake the production of paper or
cardboardby using the bagasse (i.e., sugarcane residue) instead of selling the same at throw-away price,
and thereby, add a new product line.
ix) Marketing efforts:
Sometimes, the change in the product mix of an enterprise may be necessary to get the maximum results
of marketing efforts of the enterprise. For example, if a product is not getting the desired response from
the market, a decision may be taken to stop the production of such a product and the resources of the
enterprise may be diverted to produce a new product.


Q.5:The brand is the symbol of the products personality. It is developed though diligent market
research and is based on the customers needs and wants. Explain the various steps which are
undertaken in the formation of a brand with examples.
Definition of brand (2 Marks)
Steps involved in brand development (6 Marks)
Examples (2 Marks)

ANS:
Definition of brand:
The term brand has a broad meaning and is applied to all visible identification such as trademarks,
symbols, pictures, package designs andsignage with distinctive lettering. The brand ensures that the
product has higher recall in the minds of the customers and that there is a guarantee on quality and
standards as per the advertising for the brand. Branding provides a specific name to the product or group
of products in an organisation.

Steps involved in brand development:
The various steps which are undertaken in the formation of a brand name and logo are as follows
a) Selection of brand name The brand needs to convey a particular meaning to consumers. The first
step in the creation of the brand is to select the elements such as brand name and logo. It is important to
choose a good brand name which is easy to remember, recall andpronounce. The brand name should also
be precise and appealing to the consumer and must communicate what the product stands for in the
market place.
b) Selection of logo A logo is the symbol of the brand represented as a picture. Along with the brand
name, the logo helps to identify the brand. It is a creative symbol which reinforces the visual imagery of
the brand in the minds of the consumer. It becomes inseparable from the brand over time. The logo must
increase the brands relevance and staying power in the market. Example:
Girl with butter and sandwiches Amul Butter

c)Legal rights The brand name and logo should be chosen so that it can be registered and protected
legally under the laws of the land.
d) Characteristics of the brand The brand name should be unique, have pleasant associations and
should be appealing. A few examples are Good Knight, Milkmaid, Maggi, Boost and Fair & Lovely. The
brand name or logo should not be used generically or commonly, as this leads to the dilution of the brand
value. A few examples of brand names which are being used commonly are Xerox, Band-Aid, Aspirin,
Kodak and Eveready.
e)Permanence The brand name and logo should be stable and should not be affected by time. The
brand should not be named after some item which is in fashion or is chic at the moment as these may lose
value after some time. Some examples of enduring brands are Eicher, Singer and Vicco Vajradanti.
f) Positioning The brand should project the value of the product in the consumers minds. It is important
to develop the right positioning platform for the brand so that this value proposition reaches the customer.
g) Brand portfolio The brand portfolio of the company must bestrengthened by activities such as the
right type of acquisitions, monitoring through the various cycles of the product, correct distribution and
visibility, maintaining the product quality and analysing the performance as well as the market perception
of the brand.

Examples:
Aqua guard Guards water
Ford Ikon Indicates that the car is an icon or landmark image
IBM Acronym for the companys name (International Business Machines)
Coca Cola Use of the companys name as brand name can also create strong value


Q.6: Define Green Marketing. What are the reasons for which companies adopt green marketing?
Definition of Green marketing (2 Marks)
Reasons for which companies adopt green marketing (8 Marks)

ANS:
Definition of Green marketing:
Green marketing is a type of marketing in which the products and services of an organisation are sold to
its customers, based on their environmental benefits. The product or service is promoted so that it is eco-
friendly or that it is packaged in eco-friendly manner using recyclable material. According to the
American Marketing Association, Green marketing is the marketingof products that are presumed to be
environmentally safe. It is also called as Environmental or Ecological marketing.

Reasons for which companies adopt green marketing:
Green marketing has also served to increase the markets for businesses, as well as provide a competitive
advantage. The reasons for which companies should adopt green marketing practices
a)Corporate Social Responsibilities (CSR) This has become a watchword for organisations across the
globe today. While companies exist for making profits, it is also important for companies to give back in
some way to the environment and society in which they function. Companies have some social
responsibilities to the countries and societies in which they operate and hence they cannot be driven by
the idea of increasing their bottom lines only.
b) Governmental pressure Many governments across the globe have evolved legislation to ensure that
companies function within the sphereof business and also that they are accountable to the society
andcountry, in case of violation of laws or exploitation of the environmental resources.