2014 – Solved Question Paper | Marketing Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University

2014 – Solved Question Paper | Marketing Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University



Paper- 202

(Marketing Management)

Full Marks- 80

The figures in the margin indicate full marks for the questions.

1(a). Enumerate the marketing functions and describe those functions. (16)

-> Marketing is the process that comprises of all the activities involved from the concept of the product all the way till it reaches the final consumer. So there are a lot of activities in this process, which we call the functions of marketing.

The seven functions of marketing are distribution, market research, setting prices, finance, product management, promotional channels and matching products to consumers.

1. Finding the Best Distribution Channels

Distribution is about deciding how you’ll get the goods or services you want to sell to the people who want to buy them. Having an idea for a product is great, but if you aren’t able to get that product to the customers you aren’t going to make money. Distribution can be as easy as setting up shop in the part of a city where your target customers are – but in an increasingly interconnected world, distribution more often than not now means that you’ll need to take your products or services to the customers.

2. Financing an Enterprise

It takes money to make money. As a business owner, an important function of marketing a product is finding the money through investments, loans, or your personal capital to finance the creation and advertising of your goods or services.

3. Deep Market Research

Market research is about gathering information concerning your target customers. Who are the people you want to sell to? Why should they buy from you as opposed to a rival business? Answering these questions requires that you do some on-the-ground observation of the market trends and competing products.

4. Setting Prices

Setting the correct price for your product or service can be a challenge. If you price it too high, you might lose customers – but if you price it too low you might be robbing yourself of profits. The “right” price normally comes through trial and error and doing some market research.

5. Product and Service Management

Once you’ve determined the target market and set the price of your product or service, the goal becomes to effectively manage the product or service. This involves listening to customers, responding to their wants and needs, and keeping your products and services fresh and up to date.

6. Promotional Channels

Most business owners are familiar with the idea of promotion. Advertising your products and services is essential to attracting new customers and keeping existing customers coming back. As the marketplace changes, you’ll want to respond appropriately by tailoring your promotion messages to social media, by sticking with more conventional outlets, or by using a mix of the old and new.

7. Matching Products to Customers

While we tend to think of selling and marketing as being closely linked, selling is last on the list of the seven functions of marketing. This is because selling can happen only after you’ve determined the wants and needs of your customer base and are able to respond with the right products at the right price point and time frame.

(b) What is marketing-mix? Comment in brief upon its ingredients or inputs. (6+10= 16)

-> The marketing mix is defined by the use of a marketing tool that combines a number of components in order to become harden and solidify a product’s brand and to help in selling the product or service. Product based companies have to come up with strategies to sell their products, and coming up with a marketing mix is one of them.

Marketing Mix is a set of marketing tool or tactics, used to promote a product or services in the market and sell it. It is about positioning a product and deciding it to sell in the right place, at the right price and right time. The product will then be sold, according to marketing and promotional strategy. The components of the marketing mix consist of 4Ps Product, Price, Place, and Promotion. In the business sector, the marketing managers plan a marketing strategy taking into consideration all the 4Ps. However, nowadays, the marketing mix increasingly includes several other Ps for vital development.

4 P of Marketing

Product in Marketing Mix:

A product is a commodity, produced or built to satisfy the need of an individual or a group. The product can be intangible or tangible as it can be in the form of services or goods. It is important to do extensive research before developing a product as it has a fluctuating life cycle, from the growth phase to the maturity phase to the sales decline phase.

A product has a certain life cycle that includes the growth phase, the maturity phase, and the sales decline phase. It is important for marketers to reinvent their products to stimulate more demand once it reaches the sales decline phase. It should create an impact in the mind of the customers, which is exclusive and different from the competitor’s product. There is an old saying stating for marketers, “what can I do to offer a better product to this group of people than my competitors”. This strategy also helps the company to build brand value.

Price in Marketing Mix:

Price is a very important component of the marketing mix definition. The price of the product is basically the amount that a customer pays for to enjoy it. Price is the most critical element of a marketing plan because it dictates a company’s survival and profit. Adjusting the price of the product, even a little bit has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product in the market. Things to keep on mind while determining the cost of the product are, the competitor’s price, list price, customer location, discount, terms of sale, etc.,

Place in Marketing Mix:

Placement or distribution is a very important part of the marketing mix strategy. We should position and distribute our product in a place that is easily accessible to potential buyers/customers.

Promotion in Marketing Mix:

It is a marketing communication process that helps the company to publicize the product and its features to the public. It is the most expensive and essential components of the marketing mix, that helps to grab the attention of the customers and influence them to buy the product. Most of the marketers use promotion tactics to promote their product and reach out to the public or the target audience. The promotion might include direct marketing, advertising, personal branding, sales promotion, etc.

7 P of Marketing:

The 7Ps model is a marketing model that modifies the 4Ps model. As Marketing mix 4P is becoming an old trend, and nowadays, marketing business needs deep understanding of the rise in new technology and concept. So, 3 more new P’s were added in the old 4Ps model to give a deep understanding of the concept of the marketing mix.

People in Marketing Mix:

The company’s employees are important in marketing because they are the ones who deliver the service to clients. It is important to hire and train the right people to deliver superior service to the clients, whether they run a support desk, customer service, copywriters, programmers…etc. It is very important to find people who genuinely believe in the products or services that the particular business creates, as there is a huge chance of giving their best performance. Adding to it, the organization should accept the honest feedback from the employees about the business and should input their own thoughts and passions which can scale and grow the business.

Process in Marketing Mix:

We should always make sure that the business process is well structured and verified regularly to avoid mistakes and minimize costs. To maximize the profit, it’s important to tighten up the enhancement process.

Physical Evidence in Marketing Mix:

In the service industries, there should be physical evidence that the service was delivered. A concept of this is branding. For example, when you think of “fast food”, you think of KFC. When you think of sports, the names Nike and Adidas come to mind.

2(a). What is meant by Consumer behavior? What are the usual steps of the buyer process? (6+10=16)

-> Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services, they will be able to determine—which products are needed in the marketplace, which are obsolete, and how best to present the goods to the consumers.

The study of consumer behavior assumes that the consumers are actors in the marketplace. The per­spective of role theory assumes that consumers play various roles in the marketplace. Starting from the information provider, from the user to the payer and to the disposer, consumers play these roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of an influence in a child’s purchase process, whereas she plays the role of a disposer for the products consumed by the family.

Nature of Consumer Behavior:

1. Influenced by various factors:

The various factors that influence the consumer behavior are as follows:

a. Marketing factors such as product design, price, promotion, packaging, positioning and dis­tribution.

b. Personal factors such as age, gender, education and income level.

c. Psychological factors such as buying motives, perception of the product and attitudes towards the product.

d. Situational factors such as physical surroundings at the time of purchase, social surroundings and time factor.

e. Social factors such as social status, reference groups and family.

f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behavior is not static. It undergoes a change over a period of time depending on the nature of products. For example, kids prefer colorful and fancy footwear, but as they grow up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior citizens they prefer more sober footwear. The change in buying behavior may take place due to several other factors such as increase in income level, education level and marketing factors.

3. Varies from consumer to consumer:

All consumers do not behave in the same manner. Differ­ent consumers behave differently. The differences in consumer behavior are due to individual factors such as the nature of the consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a shopping and spend beyond their means.

They borrow money from friends, relatives, banks, and at times even adopt unethical means to spend on shopping of advance technologies. But there are other consumers who, despite having surplus money, do not go even for the regular purchases and avoid use and purchase of advance technologies.

4. Varies from region to region and country to county:

The consumer behavior varies across states, regions and countries. For example, the behavior of the urban consumers is different from that of the rural consumers. A good number of rural consumers are conservative in their buying behaviors.

The rich rural consumers may think twice to spend on luxuries despite hav­ing sufficient funds, whereas the urban consumers may even take bank loans to buy luxury items such as cars and household appliances. The consumer behavior may also vary across the states, regions and countries. It may differ depending on the upbringing, lifestyles and level of development.

5. Information on consumer behavior is important to the marketers:

Marketers need to have a good knowledge of the consumer behavior. They need to study the various factors that influence the consumer behavior of their target customers.

The knowledge of consumer behavior enables them to take appropriate marketing decisions in respect of the following factors:

a. Product design/model

b. Pricing of the product

c. Promotion of the product

d. Packaging

e. Positioning

f. Place of distribution

6. Leads to purchase decision:

Positive consumer behavior leads to a purchase decision. A consumer may take the decision of buying a product on the basis of different buying motives. The purchase decision leads to higher demand, and the sales of the marketers increase. Therefore, marketers need to influence consumer behavior to increase their purchases.

7. Varies from product to product:

Consumer behavior is different for different products. There are some consumers who may buy more quantity of certain items and very low or no quantity of other items. For example, teenagers may spend heavily on products such as cell phones and branded wears for snob appeal, but may not spend on general and academic reading. A middle- aged person may spend less on clothing, but may invest money in savings, insurance schemes, pension schemes, and so on.

8. Improves standard of living:

The buying behavior of the consumers may lead to higher stan­dard of living. The more a person buys the goods and services, the higher is the standard of living. But if a person spends less on goods and services, despite having a good income, they deprive themselves of higher standard of living.

9. Reflects status:

The consumer behavior is not only influenced by the status of a consumer, but it also reflects it. The consumers who own luxury cars, watches and other items are considered belonging to a higher status. The luxury items also give a sense of pride to the owners.

Consumers go through a set of sequential steps while buying a product. A buying process is the sequence of steps that a consumer takes while making a purchasing decision. A normal consumer purchase includes the recognition of needs and wants. Next comes the information search, followed by an evaluation of all the choices. Finally the purchase happens, and post-purchase evaluation follows a purchase.

Let’s go over each stage of a consumer buying process:

1. Identify the Problem

This is the first stage of the buying process. A consumer will not initiate a purchase without the recognition of the needs or wants. When a consumer feels the need to buy a particular product, he will go for a purchase decision. There is an unmet need or there is a problem which can be solved by buying a particular product.

Needs arise as there is a problem. For example, you broke your table that you were regular ling using for your business. And due to this problem, you now have to buy a new table.

Wants arise either because you have need a product or just because you are influenced by external factors. For example, you see your friends using a laptop for their project work. You might also have seen numerous advertisements about how a laptop can help you in your project work. Due to this influence, you feel you want to upgrade to a laptop though you may already have a desktop.

In this stage, the marketer should identify the needs of the consumers and offer the products based on the desire.

2. Information search

At this stage, the consumer is aware of his need or want. He also knows that he wants to buy a product that can relive his problem. Therefore, he wants to know more about the product that can relive of his problem. This leads to the information search stage.

The consumer will try to find out the options available and the best solution for his problem. The buyer will look for information in internal and external business environments. A consumer may look into advertisements, print, videos, online and even might ask his friends and family.

When consumers want to buy a laptop, they look for a laptop, its features, price, discounts, warranty, after sales service, insurance, and a lot of other important features.

Here, a marketer must offer a lot of information about the product in the form of informative videos, demos, blog, how-to-do videos, and celebrity interviews.

3. Evaluation of Alternatives

By now the consumer has done enough research about the kind of product that can solve his problem. The next step is to evaluate alternative products that can solve his problem. Various points of information gathered from different sources are used in evaluating alternatives.

Generally, consumers evaluate the alternatives based on a number of attributes of the product. Looks, durability, quality, price, service, popularity, brand, social media reviews are some to the factors that consumers consider.

The market offers many products that can solve the problem of a consumer. Hence the consumer has to make a choice after evaluating the various alternatives available.

At the end of this stage, the consumer will rank his choices and pick a product that best matches his needs and wants.

4. Purchase Decision/Purchase

At this point, customers have already explored multiple options. They are aware of the pricing and payment options available. Here, consumers are deciding whether to buy that product or not. Yes, even at this stage they can still drop the purchase and walk away.

Philip Kotler (2009) says, the final purchase decision may be ‘interrupted’ by two factors. Customer may get a negative feedback from friends or other customers who bought it. For example, a customer shortlisted a laptop, but his friend gave a negative feedback. This will make him to change his decision. Furthermore, the decision might also change. Sudden change in business plans, financial crunch, unexpected higher prices, etc. might lead the consumer to drop the idea of buying the laptop.

The Consumer chooses the product that he wants to buy, but many times, he may not actually buy it for various reasons. At this stage, a marketer should find out the various reasons due to which the consumer is hesitating to buy. The reasons could be price, value, and change in the needs of the consumer.

Marketer needs to step up the game. Start by reminding the customers of the reason behind their decision to buy the product. Furthermore give as much information regarding your brand reiterating that you are the best provider of the product that can fulfill his needs.

Retargeting by simple email reminders can enforce the purchase decision.

5. Post-Purchase Evaluation

This is the last stage and most often ignored by marketers.

After buying the product, customers compare products with their expectations. There can be two outcomes: Either satisfied or dissatisfied. Consumers will be happy after buying the product if it has satisfied their needs. But in case the product was not up to his expectations, the consumer will be dissatisfied. A consumer can be lost even at this stage.

A dissatisfied customer might feel as though he took an incorrect decision. This will result in returns! Offering an exchange will be a straightforward action. However, even when a customer is satisfied, there is no guarantee that the customer might be a repeat customer.

Customers, either satisfied or dissatisfied, can take actions to distribute their experience in the form of customer reviews. This may be done through reviews on customer forums, website, social media conversations or word of mouth.

A marketer has to make sure that the consumer will be satisfied with the product so that his experience will lead to repeat customers. Brands need to careful to create positive post-purchase experience.

(b) Evaluate the role, scope and importance of marketing information system. (16)

-> The marketing information system refers to the use of technology for the arrangement of the relevant data related to the market, sales, promotion, price, competition and allocation of goods and service. This information is acquired after a proper analysis and understanding of the marketing environment to ensure effective decision making in the organization.

It majorly deals with the input (i.e., gathering appropriate internal and external data), generating useful information out of it (with the help of the various marketing information system components) and then communicating the outcome so acquired to the decision-makers.

Role of Marketing Information System:-

Proper Marketing Planning

Marketing information system helps in framing of marketing policies. It regularly supplies all market related information to management for regulating all market operations.

Various budgets are prepared in accordance with market conditions through information provided by this system for carrying out production, distribution and marketing activities. Proper availability of information helps in reducing the complexity of designing marketing activities which keeps on changing as per the requirements of market.

Anticipation of Customer Demands

Anticipation of customer needs and wants is important for every organisation. It helps in taking proper decisions regarding production activities and delivering the right product which may satisfy customers. If producers do not have an idea of what their customer wants then they may incur losses by producing product which may not be accepted by customers.

Adequate information about nature, size and character of consumer demands is necessary for manufacturing right product. It gives full details regarding changing tastes, fashions and likes of customers.

Helps in Analyzing Competition

Marketing information system helps organizations in analyzing the competitive environment around them. It enables the prediction of competitor’s behavior which helps in formulating strategies accordingly to gain advantage over them. Various decisions regarding nature of product, pricing and promotion are taken by business by considering their rivals activities.

Today’s market is very competitive and every business needs to face and overcome it. Through market intelligence system, organizations get regularly all information about market competition which helps in making plans for overcoming this.

Increase the Efficiency

Every organization strives to enhance its efficiency and overall profitability. Marketing information system helps in proper management and coordination of various departments within organization. It develops a proper communication network through which information can be easily circulated within whole organization among employees and employers. Employers can easily communicate employees about their role in accordance with market demand and trends.

Employees can also contact their employers in case of any problem so that it can be easily resolved. Proper communication between these two give clear pictures to employees regarding what is to be done so that they can focus on their activities attentively. This increase the overall productivity and efficiency of organization.

Better Understanding with Customers

Developing better understanding with customers is beneficial for retaining them for a longer term. Market information system aims at strengthening the relation of business with customers. It develops a proper channel through which business are able to interact with their customers.

Business can easily take their all queries and resolves them timely which help in satisfying them. As a part of marketing information system, business maintains an online website for providing various customer support services. Customers can contact them through their websites and send them feedback or their queries. A proper communication between customers and organization takes place which results in better understanding among them.

Recognizes Market Trends and Changes

Marketing information system recognizes all trends and changes prevailing in market. It monitors and acquires the current economic conditions and regularly updates the business about it. Business requires market intelligence system to keep in touch with market always.

They are able to frame better strategies to reflect these prevailing changes in their activities. By analyzing the current economic conditions of market, business can easily decide optimum production of its products. Overproduction or underproduction is both unfavorable for any organization. Proper analysis of market changes and trends helps in avoiding these situations and production of right quantity.

Enhances Management Performance

Marketing information system has an important role in improving the performance of management. Quality of information available with managers impacts their decision making ability. It collects data from both internal and external sources of organization and delivers it regularly to managers.

Management has clear idea of what is going inside the organization and can check whether it is in line with requirements of market. They can take all necessary steps as and when required to bring changes accordingly. By maintaining a systematic internal records managers can easily ensure that optimum amount of required resources are always maintained to avoid any crisis in organization.

Scope of Marketing Information System:-

After understanding what Marketing Information System is, we move on to the scope of Marketing Information System. Information Systems is growing at a fast pace to become one of the most promising career fields in today’s world. With everything happening digitally, the demand for Marketing Information System professionals is increasing more than ever. Marketing Information System involves performing a number of tasks simultaneously such as-

  • Processing data
  • Initiating transactions
  • Responding to inquiries
  • Producing reports and its summaries

· Manage the data created within the structure of a particular business

Marketing Information System acts in an organization just like a nervous system in a body by providing with the relevant information for ease in the process of decision making.

The purpose of Marketing Information System is to work towards satisfying the information needs of everyone in the business. It means providing the relevant information to those who need it.

Thus, Marketing Information System has a lot of potential to become one of the most promising careers for individuals interested in the workings of a business.

Importance of Marketing Information System:-

The marketing information system has simplified the task of decision making for the marketing managers and has also provided as a useful tool for strategic planning of the business activities .

Let us now understand its various other benefits:

Fills up Information Gap : Marketing information system facilitates the companies involved in global retailing and other international trade practices. The purpose is to meet their information needs and being aware of the world-wide scenario.

Facilitates Decision Making : It is a useful tool for future decision making involving the strategic, operational and control related decisions.

Marketing Planning : Marketing information system assesses the market demand and prospective sales to ensure effective planning of the marketing operations.

Competing Over Non-Price Factors : MIS is used for adopting non-price competition strategies. It facilitates brand image, product customization, product differentiation, public relations , additional services, etc., to retain consumers without any price war.

Demand Creation and Fulfillment : It also provides information on customer requirements. Thus, generating the need for those products which are desired by the consumer’s subconscious mind, through marketing research and then meeting such needs in reality.

Saves Cost and Time : Marketing information system targets the problem area and take desired decisions to avoid the wastage of time, cost and efforts on unnecessary activities.

Systematic Recording of Data : It provides for an orderly arrangement of the gathered data to provide useful information for further marketing planning and decision making.

Better Evaluation and Control : Marketing information system helps to monitor and evaluate the marketing operations and programmes. It also provides for taking corrective actions in case of not acquiring the desired outcomes.

Coping Up with Marketing Environment and Trends : It regularly keeps an eye on any changing trends in the economic, political, technological and competitive environments. It helps to grab new opportunities and prepare for the upcoming challenges.

With the development of technology and modernization, the management of business activities has become a lot simpler than it was before. We can now keep up with the current happenings and recent trends on our computer systems with just a simple click.

3(a) Discuss the stages in the Product Life Cycle. What is significance of product life cycle in product planning and development? (10+6=16)

-> The product life cycle is the course of the life of a product from when the product is in development to after it has been removed from the market.

The product life cycle is the process a product goes through from when it is first introduced into the market until it declines or is removed from the market. The life cycle has four stages – introduction, growth, maturity and decline.

While some products may stay in a prolonged maturity state, all products eventually phase out of the market due to several factors including saturation, increased competition, and decreased demand and dropping sales.

Stages of the Product Life Cycle:-

1. Development:

When an idea of product is conceived in the minds of entrepreneurs / promoters there begin the first stage. Ideas are obtained from both internal and external sources. The selected ideas will be screened, tested and certified for product development.

At this stage, product is in the concept form. Hence, there cannot be any sales. On the unborn product, management is investing heavy amount on its research and development. Hence, the sales curve touches the beginning zero point and profit curve on the negative side of graph showing loss position. Heavy investment without return results into losses.

2. Introduction:

Once the product is successfully developed, it is ready to be introduced in the selected market segment. A product is really facing the real market situation in a large scale. Just like a new born baby, a product also experiences the difficulty of breathing, sharp light, environmental hazards, feeling problems etc. Management with anticipated demand (demand forecasting) enters the product to obtain effective demand. The market which has seen the product through media takes time to accept it. The customers are choosy and hesitant to go for a new one.

Hence, the following features appear at the introductory-stage:

a. Snail Pace Sales:

The pick-up period for sales is very lengthy due to customer’s hesitation, the difficulties associated with shifting from the existing product brands, lack of proper supply to all segments, dealers’ hesitation to keep and suggest for an alternative product, expansion problems of management, even low confidence of management also pushes down the sales.

b. High Promotional Costs:

Though the product was tested in the market while developing, it needs more investment to introduce on large scale. The fixation of product picture in the minds of customers’ needs highest efforts with heavy amount on promotional activities. The cost of advertisement free-samples, offers, trials, dealers and retailers promotion, establishment activities add to the cost. Both sales and cost are adversely related at this stage.

c. Inevitable High Price:

The management may try to fix the low price (unless high skimming price strategy is in practice) but the high costs, technological problems, low sales/returns etc., force them to fix high product price.


i. ‘Product failure’ is the common feature at introduction stage. Every amount of investment is a burden on the management with lowest sales and returns. Attempts are made to stimulate products, market pick up of products. As the product is at the point of decisive stage i.e., accept or reject by the customers, the result of hanging sword would be severe on part of introducers. The effect of positive impression would last forever. Hence, the management’s intelligent and cautious strategies would incorporate.

ii. Right advertisement.

iii. Systematized preparation and quick introduction.

iv. Newness in marketing strategies.

v. Proper attention on stocks, supply, channel selection.

vi. Effective promotional measures.

3. Growth Stage:

Once the product is accepted and adopted by the customers, the sale picks up. This is the stage during which the sales volume increases followed by profits. In spite of prevailing market competition, the additional sales become common feature.

It shows following features:

i. The economies of scale (cost reduction)

ii. Channels of Distribution and distribution outlets increases.

iii. Additional Promotional expenditures have to be incurred to meet the competition trends and face successfully.

iv. Spreading the products to newer market segments.

v. Product improvements take place in terms of its styles, product packaging, wrapping etc.


Cautious steps should be taken by management during growth stage.

The following areas need to be considered:

i. Reduce efforts to attract new and maintain the existing customers.

ii. Promotional activities are boosted further to maintain the same tempo of marketing.

iii. Add to the product – features with recent expectations and practices.

iv. Quality to be improved to add to the customer’s satisfaction.

v. Competitive and comparative advantages should flow to the buyers specially to potential buyers who divert from competitor’s products.

4. Maturity:

The end product of growth is maturity, sales increase at a declining rate i.e., total sales show an upward trend but marginal sales would decline. ‘Channels of Distribution’ are full, intensive competition more alternatives available to customers. Hence a shift of customers begins. Due to decline in sales, profit margin also falls. Producers struggle hard to match cost of marketing with thin marginal returns.

The product experiences the following situations:

i. Increasing total sales but declining marginal sales – There remains little space in growth in the market as the product has already reached every house hold. The gap between production and sales expands as demand comes with difficulty in marketing the product.

ii. Controlled promotional expenses – The ratio between the promotional costs and sales value speaks the normal rate. As nothing is left in the market for expansion, the existing cost on advertisement are just maintained to support dealer’s active support.

iii. Normal Price – The ability to charge higher prices reduces gradually. Very normal rates are charged and exceptional price differentiation is followed for product difference.


The manufacturer enjoys maximum profit with matured product. Creative marketing is followed by manufacturer on pushing the product to every corner.

The following strategies are to be adopted by producers:

Extension Strategies:

The extension strategy is common during the maturity stage. Here the marketer prefers to obsolete the weaker products and concentrate more on profitable or newer products.

The two ways of extension activities are:

i. Product modification

ii. Market modification

i. Product Modification:

Accepting the same product for longer period is boring to the customers. They expect change. Hence the producer has to bring changes in the product.

The possible changes would be:

a. Product Quality – Add to the existing quality by its taste, capacity, applicability, multiplicity, durability etc. A qualitative improvement is as good as making a fresh market. You can sell second round to the existing customers circle.

b. Brand Name – Modify the brand name. Selling the same with new brand name. Binaca tooth paste changed to Cibaca, Birla Cements to Ultratec cement etc.

c. Size of pack – Modification in packing size, content. Either smaller packs or additional larger packs.

d. Style change – Usually consumer’s durable product expects new styles very frequently. Consumer who experiences a new style often keeps on purchasing the product. An advertisement is just sufficient to sell a new style with customers waiting for it. Change in style should be right to the tune of change in taste and fashion. Smaller car concept has entirely changed the car market. Smallest mobiles, color screens in every pocket etc.

e. Wide range – Add different range – products to the existing. Chocolate market, wide range, biscuit product, kid bicycle etc., experience the wide range products in the same line. Hero cycles have introduced not less than 20 ranges in the same product.

ii. Market Modification:

Every attempt is made to increase in sales quantity. The brand users’ number and rate per user should also be increased. Both can be increased by –

a. Marginal reduction in price to attract non-users, to maintain users.

b. Widen the channels of distribution especially effective smaller distribution points.

c. Change the message of advertisement to keep on watching, newer Medias new models.

d. Rate of consumption suggests more time consumption, good for health. Brush your teeth day and night wills double the market.

5. Saturation:

The peak – point of product life is saturation. The features of saturation exist everywhere in all components. Consumption achieves constant rate, presence of replacement sales, hard work to get a tiny market share with higher costs, rapid fall in price thus making the profit margin thinner and thinner, intensified competition strategies and costs etc. The rise and fall of sale depend upon supply and demand i.e., exclusively on market forces.

6. Decline:

The last stage in the product life cycle is decline. Downward trend persists in the sale of product. The changes brought by technology, new product of competitors, taste and fashion, styles, would make an existing product obsolete. Product brand becomes too old to opt for purchase in front of another product standing with strong features.

Significance of Product Life Cycle

The concept of product life cycle indicates that sooner or later all products die and that if management wishes to sustain its revenues, it must replace the declining products with the new ones. The product life cycle concept also indicates as to what can be expected in the market for a new product at various stages.

Thus, the concept of product life cycle can be used as a forecasting tool. It can alert management that its product will inevitably face saturation and decline, and the host of problems these stages pose. The product life cycle is also a useful framework for describing the typical evolution of marketing strategy over the stages of product life cycle. This will help in taking sound marketing decisions at different stages of the product life cycle.

After a product has been developed, it is launched in the market with the help of various promotional devices such as advertising, sales promotion, publicity and personal selling. In other words, product development (some people call it incubation stage of product life cycle) must be followed by the successful introduction of the product in the market.

For this, planning for introduction of the product starts during the process of product development itself. Every firm makes sale projections during introduction, growth and maturity stages of the product life-cycle.

To achieve the projected sales target, it formulates promotional, pricing and distribution policies. Thus, the concept of product life-cycle facilitates integrated marketing policies relating to product, price, promotion and distribution.

The advantages of forecasting the life cycle of a product are as follows:

(i) When the product life-cycle is predictable, the management must be cautious in taking advance steps before the decline stage, by adopting product modification, pricing strategies, distinctive style, quality change, etc.

(ii) The firm can prepare an effective product plan by knowing the product life-cycle of a product.

(iii) The management can find new uses of the product for the expansion of market during growth stage and for extending the maturity stage.

(iv) The management can adopt latest technological changes to improve the product quality, features and design.

(v) The management can abandon the product which is not demanded by the customers.

(b) Evaluate the importance of pricing in marketing in a marketing programme. What are the typical pricing objectives? (8=8=16)

-> Pricing is an important decision making aspect after the product is manufactured. Price determines the future of the product, acceptability of the product to the customers and return and profitability from the product. It is a tool of competition.

Importance of Pricing in a Marketing Programme!

Pricing becomes a vital decision area on account of many other factors, besides its crucial role bringing revenues and profits to the business. It is essential that we get a full picture of the significance of pricing before we proceed with a discussion of the various issues relating to pricing.

The very fact that pricing constitutes one of the four P’s of marketing signifies clearly the importance of pricing in marketing management. The marketing process cannot be consummated without the mechanism of pricing—the seller and buyer agreeing to sell/buy at a price acceptable to both.

We know that companies can resort to two broad strategy routes—the price route and non- price route. Those who take to the non-price route concentrate on elements like product, distribution, advertising, personal selling and sales promotion in their marketing strategy. They try to meet the competitors on the non-price front rather on price.

Some other firms attach much importance to pricing and believe that they can always break customers’ brand loyalty by a lower price. They feel that the other elements of the marketing mix are not that important when they have the required freedom in the matter of price. The reality, however, is that pricing is an important decision area, whether the firm takes to the price route or the non-price route in its marketing strategy.

While non-price factors have, no doubt, acquired increasing importance in marketing over the years, price has not lost its significance. Even when a product or a brand is kept out of price competition through product differentiation and other strategies, the pricing decisions still remain crucial.

For, on the decision relating to price depends on the sales volume and profits of the firm even in the context of such strategies. Moreover, it may not be correct to view the price factor and the non-price factors as mutually exclusive while developing the marketing strategy for any product. They are very much related to each other. By adjusting the price upward or downward, the firm can make available more funds or less funds for the other factors like advertising, sales promotion or distribution.

It is competition that contributes the maximum to the importance of pricing. It is competition that makes pricing a highly dynamic function. And in meeting competition, pricing decisions acquire their real importance. Pricing acquires its importance on account of yet another consideration—it is a risky area of decision in marketing management. Mistakes in pricing decisions seriously affect the firm, its growth, profits and future.

Pricing Objectives:

Pricing can be defined as the process of determining an appropriate price for the product, or it is an act of setting price for the product. Pricing involves a number of decisions related to setting price of product. Pricing policies are aimed at achieving various objectives. Company has several objectives to be achieved by the sound pricing policies and strategies. Pricing decisions are based on the objectives to be achieved. Objectives are related to sales volume, profitability, market shares, or competition.

1. Profits-related Objectives:

Profit has remained a dominant objective of business activities.

Company’s pricing policies and strategies are aimed at following profits-related objectives:

i. Maximum Current Profit:

One of the objectives of pricing is to maximize current profits. This objective is aimed at making as much money as possible. Company tries to set its price in a way that more current profits can be earned. However, company cannot set its price beyond the limit. But, it concentrates on maximum profits.

ii. Target Return on Investment:

Most companies want to earn reasonable rate of return on investment.

Target return may be:

(1) fixed percentage of sales,

(2) return on investment, or

(3) a fixed rupee amount.

Company sets its pricing policies and strategies in a way that sales revenue ultimately yields average return on total investment. For example, company decides to earn 20% return on total investment of 3 crore rupees. It must set price of product in a way that it can earn 60 lakh rupees.

2. Sales-related Objectives:

The main sales-related objectives of pricing may include:

i. Sales Growth:

Company’s objective is to increase sales volume. It sets its price in such a way that more and more sales can be achieved. It is assumed that sales growth has direct positive impact on the profits. So, pricing decisions are taken in way that sales volume can be raised. Setting price, altering in price, and modifying pricing policies are targeted to improve sales.

ii. Target Market Share:

A company aims its pricing policies at achieving or maintaining the target market share. Pricing decisions are taken in such a manner that enables the company to achieve targeted market share. Market share is a specific volume of sales determined in light of total sales in an industry. For example, company may try to achieve 25% market shares in the relevant industry.

iii. Increase in Market Share:

Sometimes, price and pricing are taken as the tool to increase its market share. When company assumes that its market share is below than expected, it can raise it by appropriate pricing; pricing is aimed at improving market share.

3. Competition-related Objectives:

Competition is a powerful factor affecting marketing performance. Every company tries to react to the competitors by appropriate business strategies.

With reference to price, following competition-related objectives may be priorized:

i. To Face Competition:

Pricing is primarily concerns with facing competition. Today’s market is characterized by the severe competition. Company sets and modifies its pricing policies so as to respond the competitors strongly. Many companies use price as a powerful means to react to level and intensity of competition.

ii. To Keep Competitors Away:

To prevent the entry of competitors can be one of the main objectives of pricing. The phase ‘prevention is better than cure’ is equally applicable here. If competitors are kept away, no need to fight with them. To achieve the objective, a company keeps its price as low as possible to minimize profit attractiveness of products. In some cases, a company reacts offensively to prevent entry of competitors by selling product even at a loss.

iii. To Achieve Quality Leadership by Pricing:

Pricing is also aimed at achieving the quality leadership. The quality leadership is the image in mind of buyers that high price is related to high quality product. In order to create a positive image that company’s product is standard or superior than offered by the close competitors; the company designs its pricing policies accordingly.

iv. To Remove Competitors from the Market:

The pricing policies and practices are directed to remove the competitors away from the market. This can be done by forgoing the current profits – by keeping price as low as possible – in order to maximize the future profits by charging a high price after removing competitors from the market. Price competition can remove weak competitors.

4. Customer-related Objectives:

Customers are in center of every marketing decision.

Company wants to achieve following objectives by the suitable pricing policies and practices:

i. To Win Confidence of Customers:

Customers are the target to serve. Company sets and practices its pricing policies to win the confidence of the target market. Company, by appropriate pricing policies, can establish, maintain or even strengthen the confidence of customers that price charged for the product is reasonable one. Customers are made feel that they are not being cheated.

ii. To Satisfy Customers:

To satisfy customers is the prime objective of the entire range of marketing efforts. And, pricing is no exception. Company sets, adjusts, and readjusts its pricing to satisfy its target customers. In short, a company should design pricing in such a way that results into maximum consumer satisfaction.

5. Other Objectives:

Over and above the objectives discussed so far, there are certain objectives that company wants to achieve by pricing.

They are as under:

i. Market Penetration:

This objective concerns with entering the deep into the market to attract maximum number of customers. This objective calls for charging the lowest possible price to win price-sensitive buyers.

ii. Promoting a New Product:

To promote a new product successfully, the company sets low price for its products in the initial stage to encourage for trial and repeat buying. The sound pricing can help the company introduce a new product successfully.

iii. Maintaining Image and Reputation in the Market:

Company’s effective pricing policies have positive impact on its image and reputation in the market. Company, by charging reasonable price, stabilizing price, or keeping fixed price can create a good image and reputation in the mind of the target customers.

iv. To Skim the Cream from the Market:

This objective concerns with skimming maximum profit in initial stage of product life cycle. Because a product is new, offering new and superior advantages, the company can charge relatively high price. Some segments will buy product even at a premium price.

v. Price Stability:

Company with stable price is ranked high in the market. Company formulates pricing policies and strategies to eliminate seasonal and cyclical fluctuations. Stability in price has a good impression on the buyers. Frequent changes in pricing affect adversely the prestige of company.

vi. Survival and Growth:

Finally, pricing is aimed at survival and growth of company’s business activities and operations. It is a fundamental pricing objective. Pricing policies are set in a way that company’s existence is not threatened.

4(a) Comment on the role of distribution channels in marketing and distribution. (16)

-> Channels of distribution indicate routes through which goods and services flow or move from producers to consumers. In the ever widening markets, especially in consumer goods, marketing channels have a distinctive role in the implementation of marketing plans and strategies.

The institutions specializing in manufacturing, wholesaling, retailing and many other areas join forces in marketing channel arrangements to make possible the delivery of goods to industrial users or customers and to final users. The same is true for the marketing of services too.

Role of Channels of Distribution:

In the present widening market, distribution channels play an important role in achieving marketing objectives of an organization. A manufacturer creates value utility in the product or service but time and place utilities are created by distribution channels. In the words of Drucker, “both the market and the distribution channels are often more crucial than the product. They are primary, the product is secondary”.

Distribution channels help in the following ways:

(i) Enhance Efficiency:

The components of distribution channels enhance the efficiency of the system. A system of manufacturers directly dealing with consumers will be less efficient than the decentralized system involving distribution agents.

(ii) Smooth Flow of Goods and Services:

The distribution channels smoothen the flow of goods and services by creating possession, time and place utilities.

(iii) Reducing Cost of Transactions:

The cost of transactions is minimized if they are undertaken regularly. The distribution through intermediates will be possible if products are standardized. The terms and conditions of purchase, sale, and payments will be standardized resulting into increased number of transactions. Instead of casual transactions, routine dealings will reduce the cost of marketing.

(iv) Facilitate Search:

The buyers and sellers search for each other in the market to transact for products and services. This function is facilitated by distribution agents. These intermediaries remain in touch with sellers and buyers, thus facilitate exchange.

(v) Less Stocks of Goods:

In the absence of distribution agents manufacturers are required to keep large stocks of goods. When middlemen enter the chain of distribution then stocks are maintained by large number of intermediaries and it reduces the burden of producers.

(vi) Proximity to Consumers:

The intermediaries are more near to the consumers as compared to the producers. They are in direct touch with the users of goods and services and understand their reactions to the supplies. The intermediaries help producers in knowing the reactions of consumers to the goods and services brought out by them. This information is of immense value to producers in planning for their products.

(b) How Promotion influences demand? What are the three basic purposes of Promotion? (8+8=16)

-> Advertising is an effective way to build brand awareness and to tell consumers about the benefits of your product or service. Creating targeted advertising campaigns can help businesses increase demand for their offerings. However, if an advertising campaign is unsuccessful, it can also reduce the demand for the products or services. It’s important to understand how advertising works and the ways it can change the demand for your product.

Advertising is a fundamental aspect of marketing. It involves paying for a promotional space to encourage consumers to purchase a product or service. There are several goals for advertising, and they depend on where the advertising takes place and who it is targeting.

Like most promotional vehicles, advertising is most successful when it is targets a specific segment of an audience. Businesses can segment their audience in a number of ways, including demographic characteristics such as age, gender and income or behavioral characteristics such as purchasing history and social causes.

In order to successfully reach their audience segment, it’s important topick an advertising location that consumers will see. Advertising vehicles include TV, radio, magazines, newspapers, billboards, websites and more. It’s critical to establish goals for the advertising campaign and to pick the medium accordingly. For example, if a business wants to build brand awareness, then TV or radio advertisingmight work best as it reaches a large, varied audienc e. If promoting a specific product sale, advertising in niche magazines or websites might be the right option.

Effects of Advertising on Consumer Demand

Advertising plays an important role in increasing and decreasing demand for a product or service. It’s a way to engage consumers and educate them about the business, product or service and results. If the advertising is targeting the audience segment correctly, then the effects on demand will likely be positive. However, if the advertising misses the mark, theeffects on the business can be devastating. Advertising can affect both the demand for a particular product or service, and the demand within a particular audience segment.

Increasing Demand for a Product or Service

In order to increase demand for a particular product of service, it’s important to create messaging that outlines the problem consumers are facing, and offer the product as the solution. This kind of persuasive advertising influences demand by setting the product apart from competitors and educating consumers about the results they will achieve.

For example, if a small business is selling children’s backpacks, the best time to increase demand for the product may be in the late summer before schools reopen. Parents and children are likely shopping for school supplies during this time, so they are more likely to pay attention to school-related messages.

To increase demand, the business needs to show consumers why their backpacks are better than any other backpacks on the market. If they aremore durable, for example, this may be a key selling point for parents who do not want to have to purchase multiple backpacks if one rips. The small business can increase demand for their product by carefully selecting the timing and venue for advertising, and setting them apart from the competition.

Increasing Demand within an Audience Segment

Another way to increase demand is to target a particular audience segment through advertising. The effects of advertisement on consumer demand are linked to brand awareness and brand loyalty. If an audience segment doesn’t know about the product or service, they have no way of affecting the demand. That’s why it’s important for businesses to understand their consumers and target them effectively.

Advertising aimed at creating consumer awareness for a product needs to carefully consider who the audience segments are. There are often multiple audience segments for a specific product. Those different segments may have different needs and problems, but the same product may fill those needs and solve those problems.

For example, while the main target audience for the small business that sells backpacks is parents and their school-aged kids, they may also have a secondary audience of new moms who use the backpacks as diaper bags. To increase demand for that particular audience segment, the small business could advertise in local online mommy groups or hand out flyers at mom and tot activity classes. This way, they can raise brand awareness and build demand in a new audience segment.

Decreasing Demand for a Product or Service

If an advertising campaign is unsuccessful, it can decrease demand for a product or service. For example, if the ad misrepresents the product or sets unrealistic expectations , the campaign can have negative results on the business. It’s critical for advertising to be truthful about what kinds of benefits the product or service provides. This helps to build trust and loyalty with consumers, which can increase demand.

If a small business provides hair dressing and make-up services, and misrepresent the results in their advertising, they may have a slew of unhappy customers. For example, if the advertisement talks about the high quality products they use and the skills of their aestheticians, the consumers will assume that the service will give them the kind of look they are after.

However, if thequality of make-up is poor and the artist is inexperienced , the consumer may be upset by the end result. She may post negative reviews about the business online, which can then lead to a decrease in demand for that service.

Decreasing Demand within an Audience Segment

A successful advertising campaign would likely raise demand within a specific audience segment. However, if the business doesn’t correctly target the market, then the campaign can fail. This is why it’s i mperative for businesses to thoroughly research their audience. Through market research and competitor research, businesses can learn more about who they serve. They need to know their demographic and behavioral attributes to know how to appeal to them through advertising.

If the small business that provides hair dressing and make-up services decides to target new mothers with a beauty package, they need to fully understand what that market is looking for. The advertisement needs to be sensitive to emotions new mothers may be feeling about their post-partum bodies, for example. That may not be all the new mothers are considering when making a purchase for aesthetic services. For example, new mothers in that region may be more environmentally minded, and conscious about not using products that have been tested on animals.

If the business fails to fully understand its audience segment’s needs, the business will see reduced demand in that segment. The business needs to address a number of aspects in its advertisement for this audience segment; otherwise the campaign may have poor sales.

Three basic purposes of Promotion:-

1. To Stimulate Demand:

It is the primary objective of market promotion. Through the use of appropriate means of market promotion, such as advertising, sales promotion, personal selling, and so forth, the company can stimulate demand for the product. Market promotion efforts convert potential buyers into actual buyers. Company, by highlighting product benefits, tries to match the product with needs, wants, and expectations of buyers. As per need, various means of market promotion are used to establish the information link with the target customers.

2. To Inform Consumers:

Promotion is aimed at informing consumers about features, qualities, performance, price, and availability of firm’s products. Market promotion is also a valuable means to inform consumers the changes made in the existing products and introduction of new products. In the same way, market promotion, by various tools of market communication, is used for communicating the special offers, price concession, utility of products, and incentives offered by the company.

3. To Persuade Consumers:

Market promotion is an effective way to persuade consumers the superiority of product over competitors. A firm can communicate competitive advantages the product offers to distinguish it from competitors’ products. Obviously, market promotion can assist the firm to convince buyers that the firm’s product is the best solution to their unmet needs and wants. Advertising is one of the most effective tools to distinguish the product from competitors’ products.

5(a) What it is necessary to scan marketing environment? What are the controllable and uncontrollable variables in marketing environment? (6+10=16)

-> Environmental scanning is necessary because there are rapid changes taking place in the environment that has a great impact on the working of the business firm. Analysis of business environment helps to identify strength weakness, opportunities and threats. SWOT analysis is necessary for the survival and growth of every business enterprise.

The following is the need and importance of environmental scanning:

1. Identification of strength:

Strength of the business firm means capacity of the firm to gain advantage over its competitors. Analysis of internal business environment helps to identify strength of the firm. After identifying the strength, the firm must try to consolidate or maximise its strength by further improvement in its existing plans, policies and resources.

2. Identification of weakness:

Weakness of the firm means limitations of the firm. Monitoring internal environment helps to identify not only the strength but also the weakness of the firm. A firm may be strong in certain areas but may be weak in some other areas. For further growth and expansion, the weakness should be identified so as to correct them as soon as possible.

3. Identification of opportunities:

Environmental analyses helps to identify the opportunities in the market. The firm should make every possible effort to grab the opportunities as and when they come.

4. Identification of threat:

Business is subject to threat from competitors and various factors. Environmental analyses help them to identify threat from the external environment. Early identification of threat is always beneficial as it helps to diffuse off some threat.

5. Optimum use of resources:

Proper environmental assessment helps to make optimum utilization of scare human, natural and capital resources. Systematic analyses of business environment helps the firm to reduce wastage and make optimum use of available resources, without understanding the internal and external environment resources cannot be used in an effective manner.

6. Survival and growth:

Systematic analyses of business environment help the firm to maximize their strength, minimize the weakness, grab the opportunities and diffuse threats. This enables the firm to survive and grow in the competitive business world.

7. To plan long-term business strategy:

A business organization has short term and long-term objectives. Proper analyses of environmental factors help the business firm to frame plans and policies that could help in easy accomplishment of those organizational objectives. Without undertaking environmental scanning, the firm cannot develop a strategy for business success.

8. Environmental scanning aids decision-making:

Decision-making is a process of selecting the best alternative from among various available alternatives. An environmental analysis is an extremely important tool in understanding and decision­ making in all situation of the business. Success of the firm depends upon the precise decision making ability. Study of environmental analyses enables the firm to select the best option for the success and growth of the firm.

Controllable and Uncontrollable Variables in Marketing Environment:-

Business activities do not operate in a vacuum. But they are surrounded by environmental variables, which affect them, either positively or negatively. These marketing environmental variables are categorized into two, namely:


Controllable variable refer to those variables that can be easily controlled by a business-man or a company to suit the demand of the business. They include the following:

Product :
A company or marketer is said to have control over a product because he or she can undertake the following adjustments to suit prevailing demands of the business. The business can increase the capacity of output to cope with increasing demand, modify the product in terms of color, size, shape, fashion, design, or change the package of the product and so on.

A business or a marketer is said to have control over price of his products because he or she can undertake the following adjustments to suit the demand on business: it can offer discounts, offer price reductions or use the money off e.g. he can use this slogan, “buy two get one free”.

Promotion :
A marketer is said to have control over promotional activities of his organization because of the following factors: it is able to select appropriate promotional media to use depending on different situations , is able to select appropriate slogans to use for different market segments. It can to do this because different advertising slogans are perceived differently in different market segments.

Place or Distribution:

A company or a marketer is able to control distribution activities in his or her organization by way of choosing appropriate marketing channels to use in the distribution of his goods and services e.g. supermarkets, village shops, kiosks and multiple shops. This will enable customers to get goods at the right time and place.

Companies can either increase the number of suppliers or decrease it.


These refer to those variables that a marketer has little or no control over them. But they can affect a marketer’s activities either positively or negatively. As such, a marketer has to devise ways of undertaking these activities under the umbrella of these variables. These variables include:

Demography :
This simply refers to the study of human population as well as its structure. This can affect marketing activities in the following ways: A low rate of population growth implies small potential market for goods and services, and vice versa. High mortality rate affects negatively the demand for goods and services. Demand for goods and services always decrease.

Technology :
Changes in technology affect marketing activities either positively or negatively. However, the marketer has no control over them. As such, he needs to try and cope

Political stability :

When a country is stable politically, a marketer’s activities are boosted. As such a marketer is free to penetrate the market and serve all the customers. But during periods of political instability in a country, marketers’ activities are jeopardized.

Legal Forces :

The government makes laws that govern a given country. These rules and regulations may affect marketing activities either positively or negatively.

Social and Cultural Forces:

These include races, tribes, religion, class or status. Due to these differences, the marketer has to produce what suits the market e.g. Muslims do not eat pork, while Christians do not smoke and drink beer etc.

Economic Forces :

When the economy of a country is booming, people’s purchasing power becomes high. Hence they are able to purchase more goods and services. Thus, a marketer registers high sales’ volume. But during economic recession, coupled with inflation and devaluation of a country’s currency, prices of essential commodities hike. Hence, people are not able to purchase all that they require due to limited purchasing power.


A company has no control over the activities of competing firms. But to ensure a competitive strategy is laid down, it has to compete fairly by offering better services and other strategic techniques.

Adjusting To Uncontrollable Variables

Since the marketer has little or no control to the uncontrollable variables, he can adjust to them. This can be done through the following strategies:

Competition – It is important for marketers to understand their competition’s marketing mix. This involves looking at what they are doing and how they go about doing it. This allows you to see what they could be doing better, and use that information within your marketing strategy. And depending on your size, you may be able to influence your competition when you make the most of your signature strengths.

Economy – The current economy must also be taken into consideration. Luxury items may not do as well in a hurting economy. You can see the opportunities available to offer the most affordable product. Your marketing strategy will need to be adjusted in order to maintain or increase your market position in challenging circumstances.

Regulations – Changes in current laws and regulation are also key factors for companies to keep into consideration. As laws and regulations change, what kinds of products are allowed, how they are produced, exporting and importing regulations, and shipping can change drastically

Technology – Having the latest technology can reduce costs, improve the quality of your product, and make marketing more effective. This can allow you to better target your customer, produce more efficiently, and create innovative products. As technology changes, your product or service may become obsolete, like the many manufacturers of buggy whips after the invention of the automobile.

Social – Marketing can be improved by paying attention to current social trends, such as concern for the environment and going “green”. Knowing what is most important to your customers will allow you to fine tune your marketing strategy to better target customers and create the kind of products and services.

(b) Write short notes on the following: (5+5+6=16)

i. Social marketing versus service marketing.

ii. Mass marketing versus Relationship marketing.

iii. International marketing.

-> iii) International marketing-

International marketing may be defined as an activity related to the sale of goods and services of one country in the other, subject to the rules and regulations framed by the countries concerned.

In simple words, it refers to marketing activities and operations among the countries of the world following different political and economic systems.

International marketing is marketing abroad i.e., beyond the political boundaries of the country. International marketing brings countries closer due to economic needs and facilitates understanding and co-operation among them.

International marketing, though it has certain distinct characteristics, is similar to domestic marketing in terms of certain technical attributes. Marketing can be concerned as an internal part of two processes, viz. technical and social. International marketing and Domestic marketing are identic.al, so far as technical process is concerned.

It includes non-human factors such as product, price, cost, brands etc. The basic principles regarding these variables are of universal applicability. But the social aspects of marketing are unique in any given stratum, because it involves human elements, namely, the behavior pattern of customers and the given characteristics of a society, such as consumers attitude, values etc. It is obvious that marketing, to the extent it is visualized as a social process, will be different from domestic marketing.

The scope of international marketing essentially includes exporting of goods and services in foreign markets. The exporter performs various activities, other than exporting the goods and services.

These activities are:

1. Establishing:

A branch in foreign market for processing, packaging or assembling the goods according to the needs of the markets. Sometimes complete manufacturing is carried out by the branch through direct investments.

2. Joint Ventures and Collaborations:

International marketing includes establishing joint ventures and collaboration in foreign countries with some foreign firms for manufacturing and/or marketing the product. Under these arrangements, the company works in collaboration with the foreign firm in order to exploit the foreign markets.

3. Licensing Arrangements:

The company, under the system, establishes licensing arrangements with the foreign term whereby foreign enterprises are granted the right to use the exporting company’s know- how, viz., patents, processes or trademarks according to the terms of agreement with or without financial investment.

4. Consultancy Services:

Offering consultancy services are also covered in international marketing scope. The exporting company offers consultancy services by undertaking turnkey projects in foreign countries. For this purpose, the exporting company sends its consultants and experts in foreign countries who guide and direct the manufacturing activities on the spot.

5. Technical and Managerial Know-How:

The scope of international marketing also includes the technical and managerial know-how provided by the exporting company to the importing company. The technicians and managerial personnel of the exporting company guide and train the technicians and managers of the importing company.


1. Different Legal System:

Every Country has its own legal system. Some of the countries follow English Common Law while others follow the civil law. Some of the European countries are having their own legal system. This difference in the legal system among different countries increases the difficulties of businessmen.

It is not sure for the businessmen that which legal system will be applicable to their business transactions. There must be uniform legal system. However some of the agencies are trying to make it uniform for all countries. The United Nations Commission on International Trade Law is also supporting the opinion of uniformity and is doing, its efforts to bring uniformity in International trade Law.

2. Market Characteristics:

The Market Characteri­stics of every Country is different due to the environmental factors, demand patterns, Government Controls etc. In some countries like India and USA the market characteristics are found different from state to state. It is because of all above factors responsible for the market characteristics.

3. Monetary System:

The monetary system of each country is decided by the government of that country and the exchange value of country’s currency is being determined by the forces of supply and demand.

4. Procedure and Documentation:

Every country has its own procedure of documentation requirements for the purpose of experts. Every business house has to comply with these rules and regulation for the purposes of export and imports.

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