2015 – Solved Question Paper | Marketing Management | Final Year – Masters of Commerce (M.Com) | Dibrugarh University

2015 – 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) Discuss about the Tasks and Philosophies of marketing management. (16)

-> Major tasks of marketing management are:-

Marketing management has to do a set of tasks necessary for success in marketing. The basic tasks of marketing are as follows:

1. Develop marketing strategies and plans

The first and foremost tasks of marketing are to develop marketing strategies and plans. They consist of following tasks:

· Determining the strategies consist of identifying the marketing objectives or goals of the organization, their determination, and modification as well as determination of specific resources to achieve objectives or goals set. They are concerned with product, price, channel, promotion, competitors, etc.

· Marketing plans involve mangers by which the marketing goals can be achieved. They involve deciding policy, strategy, tactics, procedures, rules and regulations and marketing programs, budgets and schedules to achieve the long-term as well as short-term goals.

· Marketing strategies and plans allocate economic, physical and managerial resources of the organization for future.

· They access and analyze strength and weakness, opportunities and threats (SWOT).

2. Creating marketing information system

It is concerned with understanding what is happening inside and outside the company. Simply there are four components of marketing information. They are Internal Record System, Marketing Intelligence System, Marketing Research and Decision Support System.

3. Build customer relationship

Marketing needs to build customer relationship. Building customer relationship is a very effective way to increase satisfaction and sustain in market. The relationships can be built by using the emerging concepts such as relationship marketing and customer relationship management.

4. Build strong brands

Marketing needs to build strong brand. It is also a major task of marketing. Strong brand helps in promotion, value creating, image development, product positioning, brand loyalty and expansion of product lines.

5. Determine marketing mix

Marketing needs to create and determine and effective marketing mix to satisfy needs of target markets. It is the combination of four inputs such as the product, the price, the place and the promotional activities. Different marketing mix is essential for different groups of customers.

6. Deliver value

Marketing needs to deliver value to the target customers. Value is the ratio between what the customers pay and what they receive. Marketing must determine how to properly deliver the value embodied by the products and services to the target market. Customers’ product choice is guided by value. So, marketing should add maximum value to the customers.

7. Communicate value

Marketing needs to communicate value to target markets. It has to develop an integrated marketing communication program that maximizes the individual and collective contribution of all communication activities by which firm attempts to inform, persuade, remain and reassure consumers about the brands. For this, marketing has to set up mass communication programs consisting of advertising, personal selling, sales promotion, public relations and publicity.

8. Create long-term growth

Marketing must take a long-term view of its products and brands and how its profits should be grown. Based on its positioning, it must initiate new-product development, testing and launching.

9. Implementation and control

Marketing must organize its marketing resources and implement and control the marketing plans. It must build a marketing organization that is capable of implementing marketing plans and strategies. Similarly, it must find out any deviations between achieved performances against planned or budgeted performance using predetermined standards. It provides feedback about marketing planning and strategies.

Philosophies of marketing management:-

Marketing concepts or marketing management philosophies are the philosophies used by the businesses to guide their marketing efforts.

In simple terms, marketing concepts relate to the philosophy a business use to identify and fulfill the needs of its customers, benefiting both the customer and the company.

Same philosophy cannot result in a gain for every business, hence different businesses use different marketing concepts (also called marketing management philosophies).

Marketing concepts are driven by clear objectives like cost efficiency, product quality, customer’s need fulfillment etc.

There are five marketing concepts. A company should choose the right one according to their and their customers’ needs.

1. Production Concept

2. Product Concept

3. Selling Concept

4. Marketing Concept

5. Social Marketing Concept

Production Concept

This concept works on an assumption that consumers prefer a product which is inexpensive and widely available. This viewpoint was encapsulated in Says Law which states ‘Supply creates its own demand’. Hence companies focus on producing more of the product and making sure that it is available to the customer everywhere easily.

Increase in the production of the product makes the companies get the advantage of economies of scale. This decreased production cost makes the product inexpensive and more attractive to the customer.

A low price may attract new customers, but the focus is just on production and not on product quality. This may result in a decrease in sales if the product is not up to the standards.

This philosophy only works when the demand is more than the supply. Moreover, a customer not always prefers an inexpensive product over others. There are many other factors which influence his purchase decision.

Product Concept

This concept works on the assumption that customers prefer products of ‘greater quality’ and ‘price and availability’ doesn’t influence their purchase decision. Hence the company devotes most of its time in developing a product of greater quality which usually turns out to be expensive.

Since the main focus of the marketers is the product quality, they often lose or fail to appeal to customers whose demands are driven by other factors like price, availability, usability, etc.

Selling Concept

Production and product concept both focus on production but selling concept focuses on making an actual sale of the product. Selling Concept focuses on making every possible sale of the product, regardless of the quality of the product or the need of the customer. The main focus is to make money. This philosophy doesn’t include building relations with customers. Hence repeated sales are very less. Companies following this concept may even try to deceive the customers to make them buy their product.

Companies which follow this philosophy have a short-sighted approach as they ‘try to sell what they make rather than what market wants’.

Marketing Concept

Selling Concept cannot let a company last long in the market. It’s a consumers market after all. To succeed in the 21st century, one has to produce a product to fulfil the needs of their customers. Hence, emerged the marketing concept. This concept works on an assumption that consumers buy products which fulfil their needs. Businesses following the marketing concept conduct researches to know about customers’ needs and wants and come out with products to fulfil the same better than the competitors. By doing so, the business establishes a relationship with the customer and generate profits in the long run.

However, this isn’t the only philosophy that should be followed by all the businesses. Many businesses still follow other concepts and make profits. It totally depends on the demand and supply and the needs of the parties involved.

Societal Marketing Concept

Adding to the marketing concept, this philosophy focuses on society’s well-being as well. The business focuses on how to fulfill the needs of the customer without affecting the environment, natural resources and focusing on society’s well-being. This philosophy believes that the business is a part of the society and hence should take part in social services like the elimination of poverty, illiteracy, and controlling explosive population growth etc.

Many of the big companies have included corporate social responsibility as a part of their marketing activities.

(b) What is marketing system? What are its components or sub-systems? (7+9=16)

-> A market system is any systematic process enabling many market players to bid and ask: helping bidders and sellers interact and make deals.

There are three main types of economies: freemarket, command, and mixed. The chart below compares free- market and command economies; mixed economies are a combination of the two. Individuals and businesses make their own economic decisions.

The five major market system types are Perfect Competition, Monopoly, Oligopoly, Monopolistic Competition and Monopsony.

Perfect Competition with Infinite Buyers and Sellers

Perfect competition is a market system characterized by many different buyers and sellers. In the classic theoretical definition of perfect competition, there are an infinite number of buyers and sellers. With so many market players, it is impossible for any one participant to alter the prevailing price in the market. If they attempt to do so, buyers and sellers have infinite alternatives to pursue.

Monopoly with One Producer

A monopoly is the exact opposite form of market system as perfect competition. In a pure monopoly, there is only one producer of a particular good or service, and generally no reasonable substitute. In such a market system, the monopolist is able to charge whatever price they wish due to the absence of competition, but their overall revenue will be limited by the ability or willingness of customers to pay their price.

Oligopoly with a Handful of Producers

An oligopoly is similar in many ways to a monopoly. The primary difference is that rather than having only one producer of a good or service, there are a handful of producers, or at least a handful of producers that make up a dominant majority of the production in the market system. While oligopolists do not have the same pricing power as monopolists, it is possible, without diligent government regulation that oligopolists will collude with one another to set prices in the same way a monopolist would.

Monopolistic Competition with Numerous Competitors

Monopolistic competition is a type of market system combining elements of a monopoly and perfect competition. Like a perfectly competitive market system, there are numerous competitors in the market. The difference is that each competitor is sufficiently differentiated from the others that some can charge greater prices than a perfectly competitive firm.

An example of monopolistic competition is the market for music. While there are many artists, each artist is different and is not perfectly substitutable with another artist.

Monophony with One Buyer

Market systems are not only differentiated according to the number of suppliers in the market. They may also be differentiated according to the number of buyers. Whereas a perfectly competitive market theoretically has an infinite number of buyers and sellers, a monophony has only one buyer for a particular good or service, giving that buyer significant power in determining the price of the products produced.

2(a) Discuss the steps involved in Consumer Decision making process. (16)

-> The consumer decision-making process can seem mysterious, but all consumers go through basic steps when making a purchase to determine what products and services will best fit their needs.

Think about your own thought process when buying something––especially when it’s something big, like a car. You consider what you need, research, and compare your options before taking the plunge. Afterwards, you often wonder if you made the right call.

If you work in sales or marketing, make more of an impact by putting yourself in the customer’s shoes and reviewing the steps in the consumer decision-making process.

Steps in the consumer decision process

Generally speaking, the consumer decision-making process involves five basic steps. Start to understand the unique decision process of your customers with this decision flowchart template.

1. Problem recognition

The first step of the consumer decision-making process is recognizing the need for a service or product. Need recognition, whether prompted internally or externally, results in the same response: a want. Once consumers recognize a want, they need to gather information to understand how they can fulfill that want, which leads to step 2.

But how can you influence consumers at this stage? Since internal stimulus comes from within and includes basic impulses like hunger or a change in lifestyle, focus your sales and marketing efforts on external stimulus.

Develop a comprehensive brand campaign to build brand awareness and recognition––you want consumers to know you and trust you. Most importantly, you want them to feel like they have a problem only you can solve.

2. Information search

When researching their options, consumers again rely on internal and external factors, as well as past interactions with a product or brand, both positive and negative. In the information stage, they may browse through options at a physical location or consult online resources, such as Google or customer reviews.

Your job as a brand is to give the potential customer access to the information they want, with the hopes that they decide to purchase your product or service. Create a funnel and plan out the types of content that people will need. Present yourself as a trustworthy source of knowledge and information.

Another important strategy is word of mouth––since consumers trust each other more than they do businesses, make sure to include consumer-generated content, like customer reviews or video testimonials, on your website.

3. Alternatives evaluation

At this point in the consumer decision-making process, prospective buyers have developed criteria for what they want in a product. Now they weigh their prospective choices against comparable alternatives.

Alternatives may present themselves in the form of lower prices, additional product benefits, product availability, or something as personal as color or style options. Your marketing material should be geared towards convincing consumers that your product is superior to other alternatives. Be ready to overcome any objections ––e.g., in sales calls, know your competitors so you can answer questions and compare benefits.

4. Purchase decision

This is the moment the consumer has been waiting for: the actual purchase. Once they have gathered all the facts, including feedback from previous customers, consumers should arrive at a logical conclusion on the product or service to purchase.

If you’ve done your job correctly, the consumer will recognize that your product is the best option and decide to purchase.

5. Post-purchase evaluation

This part of the consumer decision-making process involves reflection from both the consumer and the seller. As a seller, you should try to gauge the following:

  • Did the purchase meet the need the consumer identified?
  • Is the customer happy with the purchase?
  • How can you continue to engage with this customer?

Remember, it’s your job to ensure your customer continues to have a positive experience with your product. Post-purchase engagement could include follow-up emails, discount coupons, and newsletters to entice the customer to make an additional purchase. You want to gain life-long customers, and in an age where anyone can leave an online review, it’s more important than ever to keep customers happy.

(b) What is Marketing Information system? Discuss the need for an orderly ongoing marketing information system. (8+8=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.


The marketing information system is presently used by all kinds of organizations to attain a competitive edge and success in their business.

Let us now understand its multiple features to grab a clear understanding of the concept:

Computer-Based System : In the marketing information system, all the information is gathered, analyzed and communicated through a computer device, and the useful marketing information is stored in microfilms.

Quick, Selective and Accurate Information : The organization can maintain relevant marketing database through marketing information system which can be immediately and accurately accessed anytime.

Easy Accessibility : The information maintained with the help of the marketing information system can be easily viewed and utilized through a computer system.

Inter-related Components : In marketing decisions and communication, all the four components are inter-linked, i.e., the information provided by one element is useful for the functioning of the other aspects.

These interconnected components include internal report, marketing research, marketing intelligence and marketing decision support systems.

Future-Oriented : The marketing information system initiates strategy formulation and planning for future marketing operations.

Supports Decision Making : Since this system provides an accurate marketing database, it can be certainly used for instantaneous decision making, by the marketing managers.

Consistent Information : Marketing information system enables the management and decision-makers to assess relevant, updated and valuable marketing information.

Applicable at All Levels of Management : Every manager uses the marketing information system to decide marketing strategies, plans, policies and procedures prepared at all managerial levels.

Need of Marketing Information System:-

After understanding what Marketing Information System is, we move on to the need 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.

3(a) Define Product Planning and Development? Describe the stages in Product Planning Process? (8+8=16)

-> Product planning and development is the critical journey a product takes from conception through to sales. While product planning and development is an integral part of any successful product’s launch and lifespan, there are no guarantees on the road to success. And yet, this phase can’t be rushed, or consequences can be severe.

Product planning and development begins, like the Big Bang, as an inkling in the void. It’s a concept for a product that can meet a need, deliver a service or solve a problem. From aerosol cheese to the remote control, everything once began as just an idea.

From there, planning for a new product is much like crafting a good story – it needs the what, where, why, when, who and how. Once the development team has the answers, they begin understanding what the product is and what its potential could be – plus the costs, risks and challenges along the way.

Some questions a good product planning team needs to solve include:

· What is the product?

· Why is it needed?

· Why is your team the best suited to bring it to life?

· When can it be launched?

· When and where would it be used?

· Where could it be sold?

· Who would buy the product?

· Who cares?

· Who’s the competition, and what do they offer?

· What’s the available market share?

· What kind of market growth is possible, and for how long?

· What is the profit margin?

· How could the product be manufactured and distributed?

· How could it be marketed?

Planning and development are about answering these questions and more. It involves a discovery phase focusing on public needs and demand, then developing a prototype, testing it, planning the launch and eventually seeing it sold to market.

Beyond that, though, it’s about solving problems before they can derail the project.

The stronger the planning and development phase is, the more likely a company has a successful launch. But, like all things in business, there’s no guarantee someone else won’t build a better mousetrap first. Therein lays the challenge: Thorough product planning and development can be the key to success – but it can also cripple the project if it takes too long and the competition gets there first.

The 7 Stages of the Product Planning Process

Before diving headfirst into any of the strategic phases of the product planning process, it’s essential to understand all the steps. While mostly discrete activities, they do build on each other. A faulty foundation can result in a wobbly, flawed future.

1. Product Concept Development

This initial phase might be the most fun and creative stage in the product lifecycle, and it’s the most critical. Businesses come up with lots of ideas. So only the most promising projects must get the traction and resources they deserve.

So, once there’s an initial idea internal folks are excited about, it’s time to employ some of the available tools and techniques for some quick market validation . These tests give the team confidence they’re onto something with real promise.

A key step in this phase is product discovery. This process gives the product team a much deeper understanding of the problems potential customers face and the user personas the solution can target. Without a solid foundation of who the product is for and which of their pain points it solves, there’s little hope of finding product-market fit.

Armed with a good idea and a solid understanding of the key problem, the concept is then fleshed out while gathering additional information.

2. Competitive analysis

If a company has stumbled onto a great idea, there’s a high likelihood they’re not the only ones to have this epiphany. That’s why the next step is surveying the landscape. You do this to see how the product concept compares to what’s already available or under development.

The goal here is to understand the other options potential customers already have. Sometimes there will be a direct competitor with a relatively similar offering. There may be broader solutions that include similar functionality to the product in question. Just as importantly, an effective competitive analysis must include completely unexpected, less-than-elegant workaround solutions potential customers use to solve their pain points.

This includes using spreadsheets for building product roadmaps , authoring code in a plain text editor, or building animations in PowerPoint. People often use the tools they already have at their disposal. Changing those behaviors may be just as important and challenging as taking on direct competitors.

3. Market Research

Still not done with homework! Now that the business has a handle on how its solution fits into the scene, it’s time to see if its differentiated approach to solving user problems holds up.

Market research typically involves both qualitative and quantitative research. Surveys and aggregated data can indicate trends, help calculate the total addressable market, and serve as valuable input to the prioritization process.

Meanwhile, qualitative research can help product teams get to the “why” at the heart of the solution. Using focus groups, interviews, and other in-depth research methods. These methods add both color and a sense of humanity to the research and development process. An added benefit is that they challenge assumptions.

4. Minimum Viable Product development

The tail end of the market research phase may also entail developing a Minimum Viable Product. An MVP is functional for gauging the reaction and interest of likely buyers. It only includes the most vital features and functionality based on the business’s understanding of which user stories customers need most. It is laser-focused on solving core problems.

During MVP definition and development, the team may begin employing prioritization frameworks . MVPs determine which items would deliver the most “bang for the buck” and must be in place for the initial product offering. Frameworks focused on core functionality versus product line expansion are a good fit at this time. Examples include the jobs-to-be-done framework , which ensures the business is building products customers actually want and use.

By getting something to the market quickly, the company can validate its concept and generate user feedback. This is crucial during these early stages. It serves to inform for adjustments to perform key tasks at launch, and the value proposition and messaging matches the offering.

5. Introduction and launch

With “Version 1.0” about to become a reality, it’s time to take this idea to market. Even if it still bears a “beta” label . The hard work of generating awareness and demand often starts well before the “download” link goes live.

The product marketing team should be generating demand and building some buzz for the offering in anticipation of the release.

Using A/B testing on different messaging and price points to build up a list of interested parties and validate the value proposition’s efficacy. Press and analysts are briefed in advance and given product demos. This seeds the media market with coverage when the grand unveiling occurs.

A robust mechanism for soliciting, collecting, aggregating, and analyzing user feedback must be in place at launch. Asses the first impressions and the efficacy of different campaign messages and tactics. The results inform plans and how to allocate resources for wider promotion and growth.

Employing product analytics and customer research, product teams can begin measuring product-market fit. If gaps are identified, they can be added to the product backlog in preparation for future prioritization and product roadmapping activities.

6. Product lifecycle

Mature products enter a new phase of existence. Typically, this is a cycle of iterative improvements and modifications. Interspersed with more significant expansions (or removal) of functionality and capabilities.

At this point, the product roadmap becomes indispensable. As processes mature, release cadences are established, and the focus shifts to enhancements and growth. KPIs, goals, outcomes, and objectives will evolve throughout the product lifecycle. It will shift based on both the success and struggles of the product as well as the organization.

While rarely boring, this is the most predictable and routine phase of the product lifecycle. Suppose the product continues to find traction and adequate growth while establishing profitability. This phase may last for years, if not decades assuming the product remains viable and there’s a persistent market for it.

To synchronize strategic objectives with resource allocation and development priorities, structure a product roadmap using themes . Themes are excellent to ensure efforts remain focused on what matters most. This method still gives the implementation team some latitude in an Agile development framework.

7. Sunset

All things must end. For some lucky product management professionals, this never happens on their watch. However, statistically, there’s a pretty good chance they’ll have to say goodbye to an entire product or major component at some point during their career.

This isn’t always a bad thing. In fact, it’s just an inevitable part of the strategic phases of the product planning process. It’s a phase in which you are retiring a product due to a superior offering’s arrival. Another reason is a dwindling need for a particular solution. This is because the problem is no longer acute enough to warrant a product.

But wrapping up a longstanding offering has many implications. Using a checklist can ensure all the aspects are properly addressed during the wind-down period.

(b) Describe the various internal and external forces that influence the pricing strategy of a firm. (16)

-> The pricing decisions for a product are affected by internal and external factors.

A. Internal Factors:

1. Cost:

While fixing the prices of a product, the firm should consider the cost involved in producing the product. This cost includes both the variable and fixed costs. Thus, while fixing the prices, the firm must be able to recover both the variable and fixed costs.

2. The predetermined objectives:

While fixing the prices of the product, the marketer should con­sider the objectives of the firm. For instance, if the objective of a firm is to increase return on investment, then it may charge a higher price, and if the objective is to capture a large market share, then it may charge a lower price.

3. Image of the firm:

The price of the product may also be determined on the basis of the image of the firm in the market. For instance, HUL and Procter & Gamble can demand a higher price for their brands, as they enjoy goodwill in the market.

4. Product life cycle:

The stage at which the product is in its product life cycle also affects its price. For instance, during the introductory stage the firm may charge lower price to attract the custom­ers, and during the growth stage, a firm may increase the price.

5. Credit period offered:

The pricing of the product is also affected by the credit period offered by the company. Longer the credit period, higher may be the price, and shorter the credit period, lower may be the price of the product.

6. Promotional activity:

The promotional activity undertaken by the firm also determines the price. If the firm incurs heavy advertising and sales promotion costs, then the pricing of the product shall be kept high in order to recover the cost.

B. External Factors:

1. Competition:

While fixing the price of the product, the firm needs to study the degree of competi­tion in the market. If there is high competition, the prices may be kept low to effectively face the competition, and if competition is low, the prices may be kept high.

2. Consumers:

The marketer should consider various consumer factors while fixing the prices. The consumer factors that must be considered includes the price sensitivity of the buyer, purchasing power, and so on.

3. Government control:

Government rules and regulation must be considered while fixing the prices. In certain products, government may announce administered prices, and therefore the mar­keter has to consider such regulation while fixing the prices.

4. Economic conditions:

The marketer may also have to consider the economic condition prevail­ing in the market while fixing the prices. At the time of recession, the consumer may have less money to spend, so the marketer may reduce the prices in order to influence the buying decision of the consumers.

5. Channel intermediaries:

The marketer must consider a number of channel intermediaries and their expectations. The longer the chain of intermediaries, the higher would be the prices of the goods.

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) Explain the process of Communication in marketing. Give illustrations. (16)

-> Marketing communication involves sharing of meaning, information and concepts by the source and the receiver about the products and services and also about the firm selling through the devices of promotion via, advertising, publicity, salesmanship and sales promotion.

In marketing the source is the marketer who desires to promote the product. Marketer delivers a message to a receiver, who is the target market segment. Message is received and integrated by consumers and if their predisposition becomes favorable, they decide to purchase. Feedback is the reverse flow of communication to the marketer.

Marketing communication may be distorted particularly when a message passes through a number of channels. Noise is a major injurious. Noise can arise due to faulty transmission, faulty reception. Competitive communication constitutes the most serious noise.

Process of Communication in Marketing :

Marketing communication involves sharing of meaning, information and concepts by the source and the receiver about the products and services and also about the firm selling through the devices of promotion via, advertising, publicity, salesmanship and sales promotion.

In marketing the source is the marketer who desires to promote the product. Marketer delivers a message to a receiver, who is the target market segment. Message is received and integrated by consumers and if their predisposition becomes favorable, they decide to purchase. Feedback is the reverse flow of communication to the marketer.

Marketing communication may be distorted particularly when a message passes through a number of channels. Noise can arise due to faulty transmission, faulty reception. Competitive communication constitutes the most serious noise.

Communication is a process of exchanging verbal and non-verbal messages. It is a continuous process. Pre-requisite of communication is a message. This message must be conveyed through some medium to the recipient.

It is essential that this message must be understood by the recipient in same terms as intended by the sender. He must respond within a time frame. Thus, communication is a two way process and is incomplete without a feedback from the recipient to the sender.

The main components of communication process are as follows:

(i) Context:

Communication is affected by the context in which it takes place. This context may be physical, social, chronological or cultural. Every communication proceeds with context. The sender chooses the message to communicate within a context.

(ii) Sender/Encoder:

Sender/Encoder is a person who sends the message. A sender makes use of symbols to convey the message and produce the required response. Sender may be an individual or a group or an organization. The views, background, approach, skills, competencies and knowledge of the sender have a great impact on the message.

The verbal and non-verbal symbols chosen are essential in ascertaining interpretation of the message by the recipient in the same terms as intended by the sender.

(iii) Message:

Message is a key idea that the sender wants to communicate. It is a sign that elicits the response of recipient. Communication process begins with deciding about the message to be conveyed. It must be ensured that the main objective of the message is clear.

(iv) Medium:

Medium is a means used to exchange/transmit the message. The sender must choose an appropriate medium for transmitting the message else the message might not be conveyed to the desired recipients.

The choice of appropriate medium of communication is essential for making the message effective and correctly interpreted by the recipient.

(v) Recipient/Decoder:

Recipient/Decoder is a person for whom the message is intended/aimed/targeted. The degree to which the decoder understands the message is dependent upon various factors such as knowledge of recipient, their responsiveness to the message, and the reliance of encoder on decoder.

(vi) Feedback:

Feedback is the main component of communication process as it permits the sender to analyze the efficacy of the message. It helps the sender in confirming the correct interpretation of message by the decoder. Feedback may be verbal or non-verbal. It may take written form also in form of memos, reports, etc.

5. Write a brief note on any four of the following: (4*4=16)

(a) Factors affecting marketing environment.

-> Factors affecting marketing environment are:-

1. Demographic Factors:

Demographic factors are related to population. Marketer must study these factors due to the fact that the market is made of people, and people constitute the population. Demographic study provides customer profile that is basic need for market segmentation as well as selecting target market. Therefore, demographic variables have direct and notable impact on firm’s operations. A marketer must analyze demographic factors to get idea about number and type of people to be served as customers.

2. Ecological Factors:

These factors primarily concern with ecological (natural) environment. They are closely related to protection of ecological environment and pollutions – air, water, noise, and land pollutions. At present, the global-level efforts are made to protect environment.

Such efforts can lay down certain restrictions in terms of use of natural resources, cost of raw material, quality of products, production process and technology, disposal of wastes, pollution control measures, and so on. These factors affect to the several aspects of production, distribution, and disposal of products. A firm must understand that people want better quality products at low price, but not at a cost of quality of life.

3. Economic Factors:

Economic environment consists of economic forces that affect company’s costs, revenues, and profits on one hand, and customers’ purchasing powers and willingness to spend on the other hand.

4. Socio-cultural Factors:

Social and cultural factors affect consumers’ tastes and preferences. People buy or favour those products which suit or complement their social and cultural norms, values, traditions, and habits. Knowing these factors of the target market, a manager can effectively design product- mix and promotional programme.

Social-cultural environment is ever-changing and requires the manager to undergo adjustment and readjustment in his marketing mix to balance between what consumers want and what company offers. Ignoring or underestimating this environment can harm severely the company’s interest.

5. Political and Legal Factors:

A firm has to operate within the present political system and legal framework. Political factors affect economic policies. Every marketing decision is subject to be affected by political and legal factors. Governments have formulated a series of legislations to regulate business operations to restrict unfair trade practices and protect consumer and social interests. These laws may create new opportunities or challenges for businessmen. A manager must know business philosophy and approach of the current governments, and legal provisions that he has to observe while dealing with other parties.

6. International Environment:

The world had become a global village. Most countries have permitted free trade (with little restrictions). A marketer has to deal with and satisfy cosmopolitan customers. Liberalization, globalization, and privatization promoted multinational companies that carry their operations in many countries. A businessman is required to follow global business theory – act locally, but think globally. Every firm, whether large or small, is, directly or indirectly, influenced by international economic and political forces.

7. Technological Factors:

Technological factors affect the firm’s production process, product quality, cost effectiveness, and, hence, competitive ability. A wise manager must know the latest technology in the relevant field. Technology has released wonders in fields of business transactions, communication, entertainment, medical science, agriculture, and manufacturing systems.

At the same time, it has released horrors in fields of hydrogen bombs, horrible chemical weapons, crime styles, deterioration of ecological environment, and so forth. Every new technology is a force for creative destruction. New technology compels old one to exit. New technology brings superior products having more capacity to satisfy consumer needs.

(b) Product Differentiation.

-> Product differentiation is what makes your product or service stand out to your target audience . It’s how you distinguish what you sell from what your competitors do, and it increases brand loyalty , sales, and growth.

Focusing on your customers is a good start to successful product differentiation. What do they want? What is no one else providing them? What delights them? What frustrates them? What makes them feel good? What would make them feel even better? The answers to these questions can kickstart ideas for differentiation.

Fortunately, differentiation can occur at any stage of your business—you don’t have to start from scratch. What’s special about your product could be a new added feature or capability. Or your product could offer fewer features than the products already on the market, focusing instead on a simple, streamlined experience.

Other differentiators include price, packaging, quality, customer service , and overall customer experience when buying or using your product. For example, a makeup company might provide an online tool to help customers find the right shade of foundation. A tennis shoe producer might give buyers the option to customize their shoes by choosing the color for each component. Customers are more willing to pay for products that come with a unique, useful experience.

Types of product differentiation

Here are a few ways customers use product differentiation to make buying decisions.

Vertical differentiation

Vertical differentiation is when customers choose a product by ranking their options from best to the worst using an objective measurement, like price or quality.

While the measurements are objective, the value each customer places on them might vary. For example, 1 meal at a restaurant may be lower in calories than another meal. To a customer who is watching their weight, the lower-calorie meal represents a “better” option. Another customer might place a higher value on price and choose the higher-calorie meal if it costs less.

Horizontal differentiation

Horizontal differentiation is when customers choose between products subjectively, because they have no objective measurement to distinguish between best or worst.

For example, there is no qualitative measurement to rank ice cream flavors. Whether you choose chocolate, vanilla, or strawberry is entirely a matter of personal taste.

If most of the products on the market cost about the same and have many of the same features or qualities, the purchase decision comes down to subjective preference.

Mixed differentiation

Customers making more complex purchases tend to use a mix of vertical and horizontal differentiation when making purchase decisions.

Let’s say you’re shopping for a car. You might consider 2 similarly priced four-door sedans from 2 separate manufacturers. You’ll likely use mixed differentiation to make a decision. Objective measurements to vertically differentiate between them include gas mileage and safety ranking. Horizontal differentiation, between subjective preferences like design aesthetic and impression of the car brand, also plays a role in the decision.

As with both horizontal and vertical differentiation individually, each customer will value the combination of these factors differently.

Advantages of product differentiation

Communicating the distinct features and benefits of your product is the secret to successful marketing. Here’s how it can help strengthen your business.

Building brand loyalty

Strong product differentiation makes your business memorable. Customers will associate elements of your brand —like your logo, voice and tone , and social media presence—with your product or service and all of its benefits.

The more differentiated your product is and the better it meets your target audience’s wants and needs, the more likely they are to become repeat customers.

Achieving higher price points

You can increase your profits, sometimes by a significant margin, through product differentiation.

You can typically sell a differentiated product for a higher price because people will pay for durability, appearance, and customer service. They will also pay more for packaging they like or an experience that excites. (But for some businesses, of course, your strategy may be to differentiate by setting lower prices than what’s on the market.)

Narrowing down your target audience

Product differentiation helps you refine your target audience as well.

The more research you do and the more you differentiate, the better you’ll understand who’s actually buying your product or service. Then you can repeat the process to streamline your target audience even more. Focusing on a niche group of consumers often leads to better sales and return on investment (ROI) for marketing spend than trying to market to the general public.

(c) Benefit Segmentation.

-> Benefit segmentation is the segmentation of the consumers based on what particular benefit of the product appeals to them. Benefit segmentation in marketing considers that for a particular service or product what is the value perceived, advantages or benefit that a customer gets. Different consumers look for different benefits and the marketer needs to understand each segment and accordingly develop his communication for each group.

Importance of benefit segmentation

People look for products from different perspectives depends upon what type of benefits they want to seek form that product. Benefit segmentation helps companies identify customers on the basis of the values they looking to take out from a product or service.

Benefit segmentation is one of the various ways of behavioral segmentation, as it helps companies tap customers based on the customer behavior. Behavioral segmentation is one of the four ways to do market segmentation.

Benefit segmentation example

Each and every product or service gives some benefit to the customer. Some examples of benefit segmentation are as below:

1. Soaps- One particular soap offers a variety of benefits, say fragrance (liked by older women), fairness (liked by younger women), freshness (liked by kids), cleanliness (like by men),longer lasting(liked by housewives), etc. Benefit segmentation helps to identify each group and accordingly promote the product within that group.

2. Sport shoes- Certain products like sport shoes can offer various benefits for a different target group. Benefits like sturdiness (professional athletes), stylish (college students) etc can all be taken from sports shoes itself.

3. Smartphone’s – Smartphone’s can be classified as offering different benefits to different set of people. Smartphone’s helps in business (professionals), leisure (kids), stylish (brand conscious people) etc.

The above examples of Benefit segmentation highlight that it is upto the customer to identify what value he or she perceives from a particular product or service.

(d) 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.

(e) Rural marketing

-> Due to stiff competition in domestic as well as global markets, companies are now moving from urban areas to rural areas. Companies are establishing themselves in rural areas by developing and upgrading the knowledge of their products and creating a segment of necessity for their products among customers. The rural areas had negligibly been tapped, but increasing globalization, has forced marketers to connect with the rural markets.

Rural marketing is a compilation of the developed product, reasonable price, appropriate placing and right awareness. The marketing rule sates that, the right product, at the right price, at the right place, at the right time, through the right medium should reach the right customer. This same rule stands good for rural marketing also.

Over the last few decades, the Indian rural market has become prominent due to growth in the purchasing power of rural population. The rural areas consume a large quantity of products manufactured in urban areas; therefore, the rural market is getting more importance than urban market. Nowadays, the marketers are looking for expansion in the untapped rural market.

The majority of Indian population lives in rural areas; therefore, there is a vast scope for marketing in rural India.

An organization follows rural marketing for the following reasons:

a. Rural Population – Consists of more than 720 million people and forms a huge market for organizations.

b. Rural Economy – Contributes significantly in the country’s GDP. Rural India has a large number of households who are aware about the branded products and willing to buy them.

c. Relation between Rural and Urban Economy – Refers to economic connectivity between rural and urban areas.

In order to focus the rural market and to develop effective strategies for tapping the market potential of the Rural Market, it is necessary for the companies to know the features of Rural Market, which are described as follows:

1. Large, Diverse and Scattered Market:

Rural market in India is large and scattered into a number of regions. It consists of approximately 75 crores rural consumers who live in 6,38,365 villages spread over 32 lakh square kilometer area. It is scattered and widespread over 6.30 lakh villages, unlike the urban market confined to a handful of metros, cosmopolitan cities and towns. Covering, such a large and widely scattered geographical market, characterized by less population per settlement, raises the inventory and transportation cost and thus affects the viability of the route schedule operations of the distribution system in rural areas.

2. Major Income of Rural Consumers is from Agriculture:

Rural prosperity is tied with agriculture prosperity. Major part of income of rural people comes from agriculture. In the event of crop failure, the income of rural masses is directly affected. However, the recent past has seen a gradual reduction in the sole dependence on agriculture, as other sectors have started playing significant role in the rural economy.

3. Low Standard of Living:

Rural population is employed in small-scale agricultural and related occupations. This unreliability factor in case of rural income makes the rural consumers extremely conscious in their purchase behavior as they are not confident about their future earnings. Majority of the rural population lives below poverty line and have low literacy rate, low per capita income, social backwardness etc.

Added to this the traditions, religious pressures, cultural values and deep-rooted superstitions are the hindering factors for an upward social mobility. The prosperity to save for future exigencies makes rural people spend less to improve their standard of living even when they have good income.

4. Traditional Outlook:

Villages develop slowly and have a traditional outlook. Change is continuous process but most rural people accept changes gradually. They mostly resist changing. This is gradually changing due to literacy especially in the youth who have begun to change the outlook in the villages.

5. Infrastructure Facilities:

Inadequate infrastructure is the single most important factor that distinguishes urban and rural markets. The infrastructure facilities like cemented road, warehouses, communication system and financial facilities are inadequate in rural areas. Promotion and physical distribution thus becomes very difficult in the rural areas because of inadequate infrastructural facilities, which has increased the scope of rural marketing.

6. Market Growth:

The rural market is growing steadily over the years. Demand for traditional products, such as bicycles, agricultural inputs, FMCG Products etc. has also grown over the years. The growth has not been only quantitative but also qualitative.

This was the result of new employment opportunities and new sources of income made available through rural development programmes which have resulted in green and white revolutions and a revolution in rising expectations of rural masses. Demand for products such as bicycles, agricultural inputs, farm products etc., has also grown over the years. This result into the increasing the potential of rural areas.

7. Diverse Socio-Economic Background:

Due to dispersion of geographical areas and uneven land fertility, rural people have separate socioeconomic background, which ultimately affects the rural market. Villagers belong to different religions, culture, and social groups. Socio-cultural background influence consumer willingness to accept innovations and new products in different areas.

The variations in behavior due to consumer environment geographical, occupation, demographical and behavioral, influences the lifestyle and create altogether different sets of needs in different areas. This creates the need to segment the rural market to cater it effectively and profitability.

8. Literacy in Rural Area:

The literacy rate is low in rural areas as compared to urban areas and leads to the problem of communication for promotion purposes. With low literacy rates, print medium become inefficient and to an extent irrelevant in rural areas since its reach is poor.

The dependence is more on electronic media – cinema, radio and television but the rural literacy level has improved in the rural past. Rural people have started to go to urban areas for higher education. Even government has introduced various schemes for rural education. Awareness has increased and the farmers are well informed about the world around them. They are also educating themselves on the new technology around them and aspiring for a better lifestyle.

9. Purchasing Capacity:

The purchasing power of the people in rural areas in dependent on several direct and indirect factors related to the rural economy. Marketing agricultural surplus and rural – urban terms of trade are the main sources of purchasing power for rural consumers. To a large extent, Indian agriculture is dependent on rainfall.

Therefore, the rural demand for consumer goods is indirectly influenced by the rainfall. This result into inadequate purchasing power of the rural consumers. But now a day’s purchasing power of the rural people is increasing because government spends huge amounts of money on irrigation, flood control, infrastructure development, antipoverty schemes, subsidies etc.

Therefore, marketers are interested in developing the market in rural area. Media has reached to rural area, so it becomes easy for marketer to sell product in rural area. Marketers have realized the potential of rural markets and thus are expanding their operations in Rural India.

(f) Relationship marketing

-> Relationship marketing involves all those tools needed to inform the customers about the new offers and variants of the brand. It also takes to earn referrals from existing customers and make strong customer relations . It does not involve strategies only to increase the number of consumers, but a lot more things than this.

It involves processes or steps like customer experience management , lead generation management, targeted information, automation tools for marketing, interlinking of customer relationship management tools, etc. these processes blend together to give the desired relationship marketing strategies and tools. The effect is not specific to a product or service that the brand has to offer while it has its effect on the company as a whole. It is upon the company’s brand image and trust that relationship marketing can make or break.

Relationship marketing is all about making a long-term association with any customer. It is catering to the changing needs of the customer and making him/her happy. It takes into account every step that would lead to retaining and gaining new customers. It also has to be in sync with the company’s vision and ideation. The customers should feel it as a burden but should genuinely connect to the company and the brand. It is making meaningful, long-lasting with a relational approach towards customer retention .

5 Levels of Relationship Marketing

These five levels of relationship marketing are as follows

1) Basic Marketing

The salesperson sells to the final customers. This is also known as direct sales.

2) Reactive Marketing

The salesperson sells the product and encourages the customer to call for any comments or enquiries.

3) Accountable Marketing

The salesperson calls the customers to ensure whether the product is working as per satisfaction and if there is any problem in the product. Furthermore, he also asks the customer for any suggestions/feedback to improve the service/product. Thus he is taking responsibility for the sale.

4) Proactive marketing

The company works continuously with its large customers to help improve performance . This is especially seen in financial companies wherein the movement in the financial market induces the company to make changes regularly. However, at the same time, these financial companies have to take care of their customers as well. Thus they take regular feedback from their large customers thereby developing their products accordingly.

5) Partnership Marketing

The company works continuously with its large customers to improve its performance. An example would include General Electric which has stationed Engineers to its third party service centers to improve overall performance. Thus even in partnerships, GE is ensuring optimal relationship development with the parent brand.

(h) e-marketing

-> Web marketing, digital marketing, internet marketing or online marketing; all of these words are synonymously used for E-Marketing. What it means is the marketing of products or services by using the internet. E-mails and wireless marketing also fall into the category of e-marketing.

We can say that it uses different technologies and media to connect customers and businesses. Especially in this era of technology , e-marketing has become a very important part of the marketing strategy of different companies.

Types of E-Marketing

When we talk about digital and email marketing, then there are different type and methods of e-marketing which are as follows;

Email Marketing

Email marketing is considered very efficient and effective because you already have a database of your targeting customer. Now, sending emails about your product or service to your exact targeted market is not only cheap but also very effective.

Social Media Marketing

Social media is a great source of directly communicating with your customers to increase your product awareness. It could be done by any or all of the social media channels such as LinkedIn, Facebook, Instagram, Twitter, Google, and YouTube. Some of the important advantages of social media are as follows;

  • Increase product awareness and reputation means more sales.

· Directly communicating with your customers can increase brand loyalty.

· You can increase the number of visits to your website and rank it up in the search engine.

· Targeting the exact audience will help you to know more about your customers’ needs.

Video Marketing

It is said that a picture is worth a thousand words, and a video is worth thousands of pictures. You can catch the attention and emotions of your target market by showing them a video clip about your product or service. Video marketing is very effective if it conveys the right message to the right audience.

Article Marketing

Engaging quality content by providing valuable information to your targeted market, what people are looking for over the internet to solve a certain problem? It is a consistent and ongoing process of delivering quality content to your readers. It is not always about selling; you’re educating your audience and helping them by adding some value in their lives.

Affiliate Marketing

Affiliate marketing is the process of promoting some products of certain brands and earning your commission out of every sale. It works for everyone; win, win situation.

E-Marketing Advantages

Some of the important advantages of e-marketing are given below;

1. Instant Response. The response rate of internet marketing is instantaneous; for instance, you upload something and it goes viral. Then it’d reach millions of people overnight.

2. Cost-Efficient. Compared to the other media of advertising, it’s much cheaper. If you’re using the unpaid methods, then there’s almost zero cost.

3. Less Risky. When your cost is zero and the instant rate is high; then what one has to lose. No risk at all.

4. Greater Data Collection. In this way, you have a great ability to collect a wide range of data about your customers. This customer data can be used later.

5. Interactive. One of the important aspects of digital marketing is that it’s very interactive. People can leave their comments, and you’ll get feedback from your target market.

6. Way to Personalized Marketing. Online marketing opens the door to personalized marketing with the right planning and marketing strategy, customers can be made to feel that this ad is directly talking to him/her.

7. Greater Exposure of your Product. Going viral with one post can deliver greater exposure to your product or service.

8. Accessibility. The beauty of the online world and e-marketing is that it’s accessible from everywhere across the globe.

Disadvantages of E-Marketing

E-Marketing is not without disadvantages, some of them are as follows;

1. Technology Dependent. E-Marketing is completely dependent on technology and the internet; a slight disconnection can jeopardize your whole business.

2. Worldwide Competition. When you launch your product online, then you face a global competition because it’s accessible from everywhere.

3. Privacy & Security Issues. Privacy and security issues are very high because your data is accessible to everyone; therefore, one has to be very cautious about what goes online.

4. Higher Transparency & Price Competition. When privacy and security issues are high, then you have to spend a lot to be transparent. Price competition also increases with higher transparency.

5. Maintenance Cost. With the fast-changing technological environment, you have to be consistently evolved with the pace of technology and the maintenance cost is very high.

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