Mb0030 Mm Complete

Name

Firoz Khan G M

Roll No. Program MBA – Lateral Entry Subject

Marketing Management

Code

MB 0030

Learning Systems Domain –Indira Nagar, Centre Bangalore

1. Explain BCG Matrix? Set 1

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This model is used to identify company’s SBU’s position in the market. This model identifies the SBU’s strengths weaknesses, opportunities and threats on the basis of market growth rate and relative market share. This model is also known as growth share matrix. The origin of the Boston Matrix lies with the Boston Consulting Group in the early 1970s. It was devised as a clear and simple method for helping corporations decide which parts of their business they should allocate their available cash to. Today, this is as important as ever because of the limited availability of credit. However, the Boston Matrix is also a good tool for thinking about where to apply other finite resources: people, time and equipment. Market share is the percentage of the total market that is being serviced by your company, measured either in revenue terms or unit volume terms. The higher your market share, the higher proportion of the market you control. The Boston Matrix assumes that if you enjoy a high market share you will normally be making money (this assumption is based on the idea that you will have been in the market long enough to have learned how to be profitable, and will be enjoying scale economies that give you an advantage). The question it asks is, "Should you be investing your resources into that product line just because it is making you money?" The answer is, "not necessarily." This is where market growth comes into play. Market growth is used as a measure of a market's attractiveness. Markets experiencing high growth are ones where the total market is expanding, which should provide the opportunity for businesses to make more money, even if their market share remains stable. By contrast, competition in low growth markets is often bitter, and while you might have high market share now, what will the situation look like in a few months or a few years? This makes low growth markets less attractive

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Axis components: a. Market Growth rate: the rate at which market is growing. b. Relative Market Share: market share of the SBU dived by the market share of the largest competitor. Model Components: These groups are explained below: Dogs: Low Market Share / Low Market Growth. In these areas, SBU’s market presence is weak, so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the scale economies of the larger players, so it's going to be difficult to make a profit. Cash Cows: High Market Share / Low Market Growth Here, SBU’s are well-established, so it's easy to get attention and exploit new opportunities. However it's only worth expending a certain amount of effort, because the market isn't growing and your opportunities are limited.here we can say cash cow can be milked. Stars: High Market Share / High Market Growth Here SBU’s are well-established, and growth is exciting! These are fantastic opportunities, and you should work hard to realize them.

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Question Marks (Problem Child): Low Market Share / High Market Growth These are the opportunities no one knows what to do with. They aren't generating much revenue right now because you don't have a large market share. But, they are in high growth markets so the potential to make money is there. Here there are two choices, either to invest heavily to bring it to star position or divest or liquidate from that position. Question Marks might become Stars and eventual Cash Cows, but they could just as easily absorb effort with little return. These opportunities need serious thought as to whether increased investment is warranted. Key Points The Boston Matrix is an effective tool for quickly assessing the options open to you, both on a corporate and personal basis. With its easily understood classification into "Dogs", "Cash Cows", "Question Marks" and "Stars", it helps you quickly and simply screen the opportunities open to you, and helps you think about how you can make the most of them. Limitations: As any other marketing theories in the field, the BCG matrix model is not perfect either. There are according problems of this theory. Some limitations concerning the particular use of BCG include: 1. Only two dimensions – market share and product or service growth rate, are employed. These are the first limitations. 2. How to define market and how to get data about market share are also problems. 3. High market shares don’t always necessarily lead to profit at all times. It is not the only success factor. 4. Low share or niche businesses can be profitable too, which means in the real world some Dogs can be more profitable than cash Cows. 5. The model cannot reflect the growth rates of the general market and market growth is not the only indicator for market attractiveness. 6. The model also neglects the effects of synergy between different business units.

2. Describe the marketing mix for Pepsi. Marketing Mix: The product, its price, promotion and distribution / position blended together to get favourable response from the customer. PepsiCo is one of the world’s largest food and beverage companies with annual turnover of $44 billion [2008]. The company employs

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approximately 185000 people worldwide, and its products are sold in approximately 200countries through 4 Ps of marketing mix which are following. 1. Product 2. Promotion 3. Place 4. Price 1. Pepsi Products:

Quality: Pepsi follows on Quality standard across the globe. Pepsi has a long standing commitment to protecting the consumers whose trust and confidence in its products is the backbone of its success. In order to ensure that consumers stay informed about the global quality of all Pepsi products sold in world, Pepsi products carry a quality assurance seal on them. “One Quality Worldwide” assurance seal appears on the entire range of Pepsi’s beverages. The composition of the soft drink is as follows: Water (86-90%), Sugar (10-13%), CO2 (0.3 -0.7%) and Concentrate (0.2-0.4%). - Water used in Pepsi Co soft drinks must be as safe as possible for human consumption. At every plant , Pepsi require incoming water to be purified even further, using a variety of processes. At minimum, every plant in world employs a dual back to back carbon filter. - Sugar must meet the standards of quality of Pepsi, which are uniform for all plants across world. All Pepsi sugar manufacturers should undergo the same supplier qualification process. All plants in

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-

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the world further purify sugar with hot activated carbon anf fine filtration. The Co2 in each bottle of Pepsi surpasses the recognised standards for medical use. Each supplier undergo rigorous qualification process, which includes the complete audit of refineries and testing from international laboratories. Each batch carries certificate of analysis and compliance. Concentrates which makes up less than 1 % of Pepsi finished beverages, also are diligently controlled. All ingredients including flavours, emulsifiers, preservatives, colours, sweeteners are of food grade and approved by global standards like JECFA/CODEX etc.

To conclude, Pepsi products comply with most stringent international regulations. Design: Pepsi logo evolution:

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2. Pepsi promotion:

Promotion is a key element of marketing program and is concerned with effectively and efficiently communicating the decisions of marketing strategy, to favourably influence the target customers’ perceptions to facilitate exchange between the marketer and the consumer that may satisfy the objective of both. A company’s promotional efforts are the only controllable means to create awareness among publics about itself, the products and services it offers, their features and influence their attitudes favourably. Advertising: It is any paid form of non personal mass communication through various media to present and promote product, services and ideas by an identified sponsor. PepsiCo has advertised its products through many different channels and media. Through TV we have seen different advertisements of its products such as Pepsi or Dew. PepsiCo always advertises its products targeting those favourable television programs like sports, series etc. Through News papers PepsiCo has advertised wide range of products and also through posters a message has been sent to a lot of people about the products which it offers. 3. Pepsi Place:

Decisions with respect to distribution channel focus on marketing the product available in adequate quantities at places where consumers are normally expected to shop for them to satisfy their needs. Depending on the nature of the product, marketing management decides to put into place an exclusive, intensive or selective network distribution, while selecting appropriate dealers or wholesalers. - Direct distribution: o Delivery of post mix cylinders and handling of key accounts; the key accounts are different wholesalers, restaurants and hotels like pizza hut, etc. These are known as national key accounts and are very important in terms of competition. o Export parties. - Indirect Distribution: o Through base market distributors o Through outstation distributors. Before delivering the product, some certain guiding principles are followed for the assessment of distributors’ capability - Applicants must have 20to 25 vehicles - Applicants must have 20000 cases of empty bottles - Applicants must deposit 1000000 as a security. This is usually done through taking over key revenue areas. If the distributor des not achieve sales target, the distribution is taken back and addition of new distributor is done.

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4. Pepsi Price:

Pricing decisions are almost always made in consultation with marketing management. Price is the only marketing mix that can be altered quickly. Price variables such as dealers price, retail price, discounts, allowances, credit terms etc., influence the development of marketing strategy, as price is a major factor that influences the assessment of the value obtained by customers. Supplier Manufacturer  Distributor  Retailer  Customer Customers directly relate price to quality, particularly in case of profucts that are ego intensive of technology based. Pepsi being a company which emphasizes product quality, it tends to sell it sproducts with price range from moderately low to high prices depending on the use and target customers. Sample price list Pegular Pepsi (150ml) Pepsi (250ml) Pepsi can (300ml) Pepsi (1.5L)

->Rs .8/->Rs.15/->Rs.25/-> Rs.50/-

3. Choose any well-known company and study the micro environment and macro environment for the same. Company

:

PepsiCo

Micro Environment Supplier

:

Marketing Intermediaries: The***** was set up in **** and is the selling agent for Pepsi in south India, it is based in the *****. It manages the supply of several wholesalers, retailers, restaurants, hotels and other such food outlets.In order to acieve the projected sales targets effectively, the organisation ensures a comprehensive strategic alignment with the overall Pepsi’s business strategy. Customers: Pepsi cutomers are mostly of youg generation between age 14 and 30 years.

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Competitors: Coca-Cola is the main competitor in India.

Publics: There are lots of public are included such as channels, investment houses, radio stations, news papers community groups, general public etc. And also internal public include workers, board of directors, managers and so on. Macro Environment: Demographic forces: Age: The age of potential customers is around 14 to 30years. Income: As far as income levels are concerned, Pepsi targets mainly middle class to the upper class. Economic Forces: When the economy of the consumer becomes low and expenses become high, consumers move towards another product which is of lower cost than the PepsiCo product. Natural forces: Due to any earthquake, or disaster shortage of product will be there by marketers or suppliers, so this affects the product and market. Technology Forces: There is huge investment from the government to develop the infrastructure opportunities and the creation of the new product such as new advanced formulas, changes in technology of production this affects the product. Political and legal: India is politically stable and hence economy is stable and as a result it attracts investments from other countries. This increases other beverages companies to enter Indian market and this in turn affects the Pepsi products.

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Cultural forces: Majority of Indians are non vegetarians and they expect the beverages they consume must be free from all insects. Hence even if a small insect is found in an Pepsi product in any part of India by a customer, this affects the business of Pepsi in whole country.

4.Write a short note on consumer buying behaviour Consumers are individuals, households, or businesses who use the products. Here we will consider only individuals and households. Consumer characteristics vary from country to county. Therefore it is a challenging task for marketer to understand the need, buying behaviour of consumer before developing the product and marketing program. Characteristics affecting the consumer behaviour: Marketer need to understand the impact of the following factors on his/ her organisation. a. Cultural factors: - Culture is the combination of costoms, beliefs and values of consumers in a particular nation. Majority of Indians are vegetarians and a company which sells non-vegetarian items should analyse these values of the consumer. For example, KFC which sells chicken dishes all over the world added vegetarian burgers in their menu to serve vegetarian consumers. - Subcultures are part of culture comprising, geographic regions, religions, nationalities and racial groups. The value system of these groups differs from others. For example, Hindus in north India prefer to spend their time with family during the navaratri festival. During this time to attract consumers, restaurants started offering the authentic navarathri dishes. - Social Class are permanent groups in the society whose members have common linkings. According to Mckinsey consumer report, Indian consumers can be classified into 5 different categories. o Deprived: Deprived are the people who earn less than Rs.90000 annually. This group is also known as below poverty line. People in this category will do less of semiskilled work. o Aspires: As pires belongs to the families who earn between Rs.90000 to Rs. 200000. This group consists of shop keepers, industrial workers, and small land holding firms. Half of their earned money goes for basic amenities and food. o Seekers: Seekers earn between Rs200000 and Rs. 500000. This class varies largely. This group contains fresh workers, middle level employees, government employees and business people.

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Strivers: Strivers earn between Rs500000 and Rs1000000. They are considered very successful. The group contains business people, large farmers, senior government officials and professionals. They are leading the consumption lead India growth. o Global Indians: They are earning more than Rs.1000000. this group is comprised of senior officials, professionals, and top business executives. India is witnessing growth in this class. o

b. Social factors: Human beings are social animals. They live and interact with other people. Therefore there is a chance of influence by others on their opinions. Marketers identify such influential persons or groups of consumer. Generally such groups are classified into two major groups namely reference groups and family. Reference Groups are used in order to evaluate and determine the nature of given individual or other group’s characteristics and social attributes. Reference groups are those that people refer to when evaluating their own qualities, circumstances, attitudes, values and behaviours. Family: Indian culture gives utmost importance to the family. People discuss with their family before purchasing the valuable items. Therefore many companies use either whole family or kids in their promotional programs. For example Godrej introduced memory backup auto washing machine. They have shown family enjoying without any problems of washing clothes. c. Personal Factors: Individual factors like age, occupation, lifestyle and personality influence the consumer decision making. Personality is the image of personal traits. Traits includes self confidence, dominance, autonomy, defensiveness, adaptability and aggressiveness. Many companies use this concepts in their marketing communications. Bajaj pulsar used muscularity to highlight its image(definitely male). d. Psychological factors: Motivation: (Need Hierarchy theory) One of the most mentioned theory of motivation is the Hierarchy of needs put forth by psychologist Abraham Maslow. He saw human needs in the form of a hierarchy, ascending from the lowest to the highest. As per him the needs are: i. Physiological: These are important needs for sustaining the human life. Food, water, warmth, shelter, sleep, medicine and education are the basic physiological needs. Until these needs are satisfied no other motivating factor will work.

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ii. Security or safety: These are the needs to be free of physical danger and of the fear of losing job, property, food, shelter. It laso includes protection against emotional harm. iii. Social needs: People will try to satisfy their needs for affection, acceptance and friendship. iv. Esteem needs: Once the people are satisfied with social needs, they would like to have esteem needs like power, prestige, status, selfconfidence, self respect, achievements recognition and attention. v. Needs for self actualisation: Highest need in this hierarchy of needs. It is the drive to become what one is capable of becoming. It includes growth, achieving one’s potential and self fulfilment. Marketers interested in finding what state of need of hierarchy the consumer is in and what type of product to be developed to suit his or her need. Perception: It is the process of acquiring, interpreting, selecting and organising sensory information. Marketers research their consumer profile and communicates the product or service messages to them either through radio, demo or television. Types of consumer buying behaviour: High involvement Low involvement Significant difference Complex buying Variety seeking between brands behaviour buying behaviour Few differences Dissonance reducing Habitual buying between brands buying behaviour behaviour Complex Buying Behaviour: Consumers who are representing this behaviour are highly involved in the purchase if the product or service. The process become complex as different between brands is very high. For example, customer who wants to purchase refrigerator would like to know the meaning of defrosting, door lock, digital temperature control etc. The price of the product is usually high. Comparison of 3 brands and significant difference between them: LG GR T Akai 282 D186 Defrost system √ √ Door lock √ √ Adjustablee shelves √ √ Moisture and humidity √ X control

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Electrolux Kelvinator 386 √ √ √ √

Deodorising ability Water dispenser

√

√ √ √ √ √ From the above table it is clear that marketer should first develop the belief about the brand, provide the information and differentiate company brand from others. X

√

X

Dissonance reducing buying behaviour: The behaviour exhibited by the customer when product purchases require high involvement but not only have few differences existed. For example, customers who want to purchase CTV will not find many differences between the brands but the price of the product and its technicality makes customer to involve more. But customer will into show post purchase dissonance which is very difficult to control. Variety seeking buying behaviour: When there is significant difference between the bands existing but customer will not involve more while purchasing, marketer identify this behaviour as variety seeking behaviour. There are many varieties of biscuits available. One can purchase salt biscuits, cream biscuits, Marie biscuits etc. The customer who purchases Britannia tiger earlier may purchase sun feast biscuit next time. This does not mean that the quality of tiger is inferior to other. In this situation marketer should understand the following: - The market leader should encourage customers to buy repeatedly. - Make product available and visible to customer. - The firm who is not market leader should come out with promotional techniques to encourage customer to purchase the product. Habitual Buying behaviour: The low involvement between the brands and few differences in brands leads to this type of behaviour. For example spice powder marketed by MDH, Everest or MTR have very few differences between them and customers do not search the information to purchase particular product. The following strategies can be followed by marketer: - Use price and sales promotions to stimulate product trial. - Use more visible aspects than wording in the advertisements. - Television is the better medial for this type of products. - Use classical conditioning theory to create advertisements.

5.Company A has homogeneous consumer preferences in the market; Company B sells different variants of soaps, While Company C is a small firm with constrained resources. What do you think is the most suitable Set 1

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market coverage companies.

strategy

for

the

all

the

three

Depending on the emerging patterns of the market segmentation, homogenous preferences, diffused segmentation and cluster preference, a company chooses its market segmentation strategy. Company A: This company can follow un-differentiated marketing strategy. In this market coverage strategy, in which the company A treats the target market as one and does not consider that there are market segments that exhibit uncommon needs. The company A, focuses on the centre of the target market to get maximum advantage. The feature of one product all segments calls for presenting one market mix for the target market. Company B: This company can follow Differentiated marketing strategy. The company B goes for proper market segmentation as depicted by its analysis of the total market. The company, therefore, goes for several products or several segment approach which calls for preparing different marketing mixes for each of the market segment. This strategy can be followed by company B which sells different soaps and each of them has its own market. Thus the company B creates segment in the soap market and not in toiletries market. Company C: This company can follow concentrated marketing strategy. The company C follows one product one segment principle. The manufacturer gets maximum knowledge about the segment needs and therefore acquires special reputation. This strategy can also help the small companies like C to stand against a large corporation because the small company can create niches in its one product one segment approach by providing maximum varieties. Comparison of market coverage strategy: Focus Product Segment Marketing Mix

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Undifferentiated marketing One/few All One

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Differentiated Marketing Many Many Many

Concentrated Marketing One/ Few One/ Few One/ Few

Given the comparison of different coverage strategies, it is easy to locate the strategies for companies A, B and C. Company Undifferentiated marketing A Least Suitable B Most Suitable C More suitable

Differentiated Marketing Most Suitable More Suitable Least Suitable

Concentrated Marketing More Suitable Least Suitable Most Suitable

Given the above table, the firm’s resources and the products requirement in its present form would decide the choice of a particular marketcoverage strategy. Finally the competitor’s adoption of a particular strategy should be considered for deciding company’s own strategy. 6. Describe various bases for positioning the product

with example. Overcoming positioning difficulties enables the company to solve the marketing-mix problem. Thus seizing the high-quality position, requires the firm to produce high quality products, charge a high price, distribute through high-class dealers and advertise in high-quality media vehicles. The bases of positioning strategies htat are available are: a. Attribute Positioning: A company positions itself on an attribute such as size or number of years in existence. Sunfeast position its snack brand as bigger lighter and crisper.

b. Benefit Positioning: The product is positioned as a leader in certain benefit. Automotive Hyundai santro Headline: India’s best loved family car is now india’s simplest car to drive Sub headline: Hyundai introduces santro zip line automatic. No shifting gears, no clutch no problem.

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Baseline: The simplest car to drive (Positioning) c. Use or Application Positioning: Positioning the product as best ofrsome use and application. For example kenstar positioned its product as unexpectedly cold. d. User positioning: Positioning the product as best for some user group. For example in Parle-G, the booy was positioned as rock star. This advertisement basically targets kids and boys. e. Competitor Positioning: The product claims to be better in some way than a named competitor. For example, in the advertisement of Matrubhumi, base line says, “In the wake of ABC results, Matrubhumi celebrates the addition of 33960 copies while nearest competitor laments the loss of 7258 copies”. Planner, “take note”. It is directly mentioning its and competitors sales of news paper. f. Product Category Positioning: The product is positioned as the leader in a certain product category. Bajaj CT100 was positioned as leader in the entry segment bikes.

g. Quality or Price Positioning: The product is positioned as offering best value. Vegitable oil brand dhara position itself as ‘ anokhi shuddata, anokha asar’ This means, company offers unique purity and unique effect.

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