Marketing Mix

Q No. 1. Describe the four components of marketing mix. Ans. Marketing mix Marketing mix is an analytical approach that uses historic information, such as syndicated point-of-sale data and companies’ internal data, to quantify the sales impact of various marketing activities. Mathematically, this is done by establishing a simultaneous relation of various marketing activities with the sales, in the form of a linear or a nonlinear equation, through the statistical technique of regression. Marketing Mix defines the effectiveness of each of the marketing elements in terms of its contribution to salesvolume, effectiveness (volume generated by each unit of effort), efficiency (sales volume generated divided by cost) and ROI. These learning’s are then adopted to adjust marketing tactics and strategies, optimize the marketing plan and also to forecast sales while simulating various scenarios. The marketing mix is generally accepted as the use and specification of the four Ps describing the strategic position of a product in the marketplace. Although some marketers have added other Ps, such as personnel and packaging, the fundamental of marketing typically identifies the four Ps of the marketing mix as referring to: •

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Product - An object or a service that is mass produced or manufactured on a large scale with a specific volume of units. A typical example of a mass produced service is the hotel industry. A less obvious but ubiquitous mass produced service is a computer operating system. Typical examples of a mass produced objects are the motor car and the disposable razor. Price – The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product. Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principle elements together, which is common in film promotion. Advertising covers any communication that is paid for, from television and cinema commercials, radio and Internet adverts through print media and billboards. One of the most notable means of promotion today is the Promotional Product, as in useful items distributed to targeted audiences with no obligation attached. This category has grown each year for the past decade while most other forms have suffered. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations (see Product above).

Broadly defined, optimizing the marketing mix is the primary responsibility of marketing. By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness. Making small changes in the marketing mix is typically considered to be a tactical change. Making large changes in any of the four Ps can be considered strategic. For example, a large change in the price, say from $129.00 to $39.00 would be considered a strategic change in the position of the product. However a change of $131 to $129.00 would be considered a tactical change, potentially related to a promotional offer. Q. No.2. Why should a firm select a target market before developing a specific marketing mix? Ans. Targeting Identification of market segments and tailoring the marketing mix to meet segment needs Target marketing is the identification of attractive market segments and tailoring the marketing mix to match the needs of target customers. This contrasts with mass marketing, whereby the marketing mix is vaguely aimed at all customers. A specific target market is a homogeneous group of customers to whom an organization wishes to appeal; it must be large enough to be profitable, and its members must have sufficient disposable income to spend on the goods, services, or ideas. What position does your product hold in the minds of your current and potential customers? Positioning is the concept of defining what role the brand will play in enhancing customers' lives and then highlighting specific brand attributes to best match consumer needs. •

Ways to position: o Understand how customers perceive key dimensions of your brand, both tangible and intangible, relative to competitors' brands.  Price, Taste, Design and look of product are tangible benefits. Whereas feelings such as trust and confidence are intangible benefits products can have. o Understand which needs your target audience wishes to satisfy with your brand. o Position or reposition your brand to meet various target markets' needs, and manipulate the Four P's accordingly.

Information used to define segments of homogeneous consumers. Information is collected, aggregated, and used to define segments of homogeneous consumers. In providing targeted offerings to these consumers, several segmentation techniques are valuable: • • •

Database Management: Use third party database information to segment target markets according to a variety of meaningful variables. Anonymous Personalization: Segmenting a market based on anonymous consumer information. Permission Based marketing: Consumers provide meaningful information that is then used by the firm to supply targeted offerings to the consumer.

Q. No.3. What is the most important objective for an organization? Why. Ans. It would seem to be a given that no strategic plan – nor any marketing plan – can be developed without a clear view of objectives. After all, if you don't know where you're going, how do you know how to get there? The problem is that too many objectives are flawed by being unrealistic, unachievable, or just plain wishful thinking. Too often, the programs that stem from the stated objectives bear no relationship to the objectives themselves. And strategic and marketing plans, remember, are really the same thing, simply because you can’t have a strategic plan except in terms of the market you serve. In setting objectives, the primary consideration is your vision of the nature of your practice. What kind of firm do you want to be? How do you mean the firm to serve the personal and professional needs of you and your partners (and not to be overlooked, your staff)? How do you mean to be perceived by your clientele? And most significantly, how do you mean to serve the needs of your marketplace? Setting Firm Objectives In defining firm or practice objectives, two specific elements are paramount… •

Firm Environment. Nothing -- not even profitability -- is more important than the kind of firm you are or want to be. Without a firm environment that's satisfying and fulfilling to its partners and staff, there will be no growth or profitability. • Market. There are three aspects of a market that must be considered -- its needs, its size, and its location -- and all three must be viewed carefully in formulating objectives. What are the parameters of the market's needs – and opportunities -- that you're prepared to serve effectively? Where is the market going, and are you in tune with it? How large a market can you realistically serve? What geographical limitations are realistic? With these two elements defined, consider, then … •

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Size. Businesses rarely grow substantially by accident. It's almost invariably a conscious decision by its partners or owners, who then take steps to implement that decision. However, some accounting and law firms, fully cognizant of the implications of growing, may feel that they want to limit or define their growth. But it should be recognized that in order to plan to contain growth, or to grow larger, determining size must be a conscious decision. Profitability. Profitability, of course, is as much a function of margins as it is of volume, and so it's useful to know your costs as precisely as possible -- a particularly difficult task in a professional firm. It becomes, as well, a function of the kind of service you're offering, and the kind of market you want to reach.

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Time Frame. The ability of a firm to meet its objectives must be defined within a realistic time frame.

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Pricing. Pricing is as important an element of defining a practice as is advertising or promotion. Pricing affects revenues and profitability, but it also affects positioning. For example, do you charge less and go for volume, or do you charge more and go for a more affluent clientele. What are your prices based on? Costs? Competition? Custom? Value added? In today's competitive climate, pricing has become a tool of marketing. As in other forms of marketing, pricing is often set by competition, where it had once been relatively arbitrary.

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Share of market. When a firm is in a rapidly growing market, or functioning in an era of rapid growth, share of market is not primarily significant. Growth will come with the market. But when that market or industry slows its growth, and competition for existing business is the only possibility for growth, then share of market is crucial. If the only way to grow is to capture your competitor's clients, then obviously, your share of market grows as your competitor's diminishes.

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Service concept. As a professional service, your relations with your clients dictate that they are served personally. But even within that function, there are degrees and options. A firm may decide to give impersonal service to each client, particularly those not on retainer, or it may decide to devote a considerable amount of time and effort to client relations. It may be a 9-to-5 operation, or it may express a willingness to function around the clock. The service option is the firm's, but it should be made a specific choice.

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Skills and staffing. The decision to add or develop staff and skills is a function of both the firm’s partners’ own vision, and the needs of the marketplace. The decision should be a specific element of defining objectives. There's always the danger, too, of successfully achieving marketing objectives too soon, and thereby outrunning your ability to serve a new or growing clientele. It makes little sense to do a successful job of increasing your tax or audit business if you can't find a sufficient number of tax or audit specialists to serve your new clientele.

Consider, as well, those elements that are beyond individual control. One can't control, for example, the national economy, which can throw the best formulated objectives awry. An accounting or legal practice can be enhanced or diminished by a new law or regulation, or a new FASB change. Opportunities for professionals are generated or obliterated regularly. This is why objectives are never more than guidelines that serve to define a course of action, whether in marketing or otherwise. Q. No.4. How do the independent media affect a firm’s marketing practices? Ans. New Media Marketing is a relatively new concept utilized by businesses in developing an online community, which allows satisfied customers to congregate and extol the virtues of a particular brand. In most cases, the online community includes

mechanisms such as blogs, pod casts, message boards, and product reviews, all of which contribute to a transparent forum to post praises, criticisms, questions, and suggestions. One of the primary arguments to promote New Media Marketing is the premise that traditional advertising is losing its influence on consumers. Backed by statistical evidence demonstrating a growing trend of consumers making purchasing decisions off Internet research and referrals. These advocates strongly adhere to the notion that consumers are more inclined to believe feedback from like-minded peers than corporate marketing verbiage dispersed through traditional television, radio, direct mail, or newspaper advertising. Although businesses would be exposing certain weaknesses to the marketplace by allowing individuals, or even competitors, to post critical comments, responding with an honest and transparent answer designed around solving the issue at hand may mitigate potential risks. Claimed negative characteristics of mass media Another description of Mass Media is central media which implies: • • • •

An inability to transmit tacit knowledge (or perhaps it can only transfer bad tacit). Corporate propaganda. The manipulation of large groups of people through media outlets, for the benefit of a particular political party and/or group of people. One of the biggest critics in media's history, brought up the idea that "the medium is the message." Bias, political or otherwise, towards favoring a certain individual, outcome or resolution of an event

This view of central media can be contrasted with lateral media, such as email networks, where messages are all slightly different and spread by a process of lateral diffusion. Q.No.5. How does a firm’s corporate culture influence the performance of its personnel? Organizational culture, or corporate culture, comprises the attitudes, experiences, beliefs and values of an organization. It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Organizational values are beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another" Senior management may try to determine a corporate culture. They may wish to impose corporate values and standards of behavior that specifically reflect the objectives of the organization. In addition, there will also be an extant internal culture within the workforce. Work-groups within the organization have their own behavioral quirks and

interactions which, to an extent, affect the whole system. Task culture can be imported. For example, computer technicians will have expertise, language and behaviors gained independently of the organization, but their presence can influence the culture of the organization as a whole

Organizational culture and change When one wants to change an aspect of the culture of an organization one has to keep in consideration that this is a long term project. Corporate culture is something that is very hard to change and employees need time to get used to the new way of organizing. For companies with a very strong and specific culture it will be even harder to change. The following six guidelines for cultural change, these changes are in line with the eight distinct stages mentioned. 1. Formulate a clear strategic vision In order to make a cultural change effective a clear vision of the firm’s new strategy, shared values and behaviors is needed. This vision provides the intention and direction for the culture change. 2. Display Top-management commitment It is very important to keep in mind that culture change must be managed from the top of the organization, as willingness to change of the senior management is an important indicator. The top of the organization should be very much in favor of the change in order to actually implement the change in the rest of the organization. Provide a framework with five different ways of thinking about change. 3. Model culture change at the highest level In order to show that the management team is in favor of the change, the change has to be notable at first at this level. The behavior of the management needs to symbolize the kinds of values and behaviors that should be realized in the rest of the company. It is important that the management shows the strengths of the current culture as well; it must be made clear that the current organizational does not need radical changes, but just a few adjustments. 4. Modify the organization to support organizational change The fourth step is to modify the organization to support organizational change. 5. Select and socialize newcomers and terminate deviants. A way to implement a culture is to connect it to organizational membership, people can be selected and terminate in terms of their fit with the new culture. 6. Develop ethical and legal sensitivity

Changes in culture can lead to tensions between organizational and individual interests, which can result in ethical and legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security.

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