Professional Documents
Culture Documents
Section-A 2 Marks Questions (Question 1 To 15) Page (1 To 3)
Section-A 2 Marks Questions (Question 1 To 15) Page (1 To 3)
Section-A 2 Marks Questions (Question 1 To 15) Page (1 To 3)
Sales Management: - is the process include planning about the production, sales
promotion and profit through sales volume. In it mgt have to consider about how they
will increase sale. Mgt have to manage the sales. Not he customer satisfaction or
product. Main concentration is on sale.
1) Price: Price includes price list, discount, allowance, and payment period and
credit term.
2) Product: Include product variety, quality, design, features, Brand name,
packaging, sizes, services, and warranties, Returns.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 2/36
1) Core Benefit: The fundamental services or benefits that the customer is really
buying like the purchaser of the customer is really buying like the purchaser of
the drill is buying “holes”.
2) Basic Product: Here the stress is on product. Acc to our e.g. On drill.
3) Expected product: A set of attribute that the buyer normally expects and
agree to when purchase product.
4) Augmented product: Which encompasses all the augmentations and
transformations that the product.
5) Potential product: Which encompasses all the augmentations and
transformations that the product might ultimately go in the future. The
potential product points to the possible evolution of the product.
1) Loss Leader Pricing: Here dept. drops the price on well-known brands to
stimulate additional store traffic.
2) Special event pricing: Special price offers in certain seasons to draw in more
customers.
3) Cash rebates: Cash rebates are offered to encourage sales.
4) Low interest financing: Instead of decreasing prices, the co. can offer low
interest financing like 0% financing etc.
5) Longer payment term.
6) Warranties and services contract: Services offer sales etc.
1) Target market
2) Positioning
3) Product line
4) Price
5) Distribution outlet
6) Sales force
7) Services
8) Advertising
9) Sales promotion
10) Research & development
11) Marketing research
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 4/36
Marketing Selling
It is a new concept It is a new concept.
It Stress the wants of the It stress needs of the
Buyer. Seller.
It include all those It include all activities
Activities in the process of which are performed in the
satisfying customer’s Need process of selling.
Starting focus mean end point Starting focus mean End point
Target customer integrated Factory product selling
profit market need marketing promotion profit through
through customer satisfaction.
At last we can conclude here Here main focus is product
Main focus is customer needs and goal is increase in sales
And goals is customer No attention on customer
satisfaction. Satisfaction.
1) The production concept: Holds that consumers will favour those products
that are widely available and how in cost manages of production oriented
org. concentrate on achieving high production oriented org. Concentrate on
achieving high production efficiency & wide distribution.
2) The product concept: Holds that consumers will favor that offer the most
quality, performance or innovating features. Manager in production oriented
organization focus their energy on making superior products and improving
them over time.
3) The selling /sales concept: Holds that consumers left alone, will ordinarily
not buy enough of the organization’s products. The organization must theory
undertakes an aggressive selling and promotion effort. Most firm practices
the selling concept when they have over capacity. Their aim is to sell what
they make rather than make what the market wants.
4) The marketing concept: Holds that the key to achieving organizational goals
consists of being more effective than competitors in integrating marketing
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 5/36
activities towards determining & satisfying the needs & wants of target
markets.
5) The societal marketing concept: Holds that the organization’s task is to
determine the needs, wants and interest of target markets & to delivers that
desired satisfaction more effectively & efficiency than competitors in a way
that preserves or enhances the consumer’s and the society’s well being.
1) Width: Product mix refers to how many different product lines the
company carries. Like P& G. provide product mix width of five lines – lie
hair care product, health care product, personal hygiene product,
beverages, food & so on.
2) Depth: P.M. refers to how many variants are offered of each product in the
line
3) Consistency: of the product mix refers to how closely relate the various
product lines are in end use, production requirement, distribution channels
or some other way.
Disadvantage:
1) It ignores completely the influence of competition & market demand.
4) Cost of joint products not easily estimated.
Price per unit = Total cost of production + Total desired profit at desired rate on
investment
Total no. of units produced
This method is good where there is no competition
B.E Analysis helps to establish prices only when the cost of production remains
reasonably constant.
Advantages:
1) Method is useful in introductory campaigns (New product should not bear
fixed test)
2) When product is perishable & competitor is weak this method is good
3) In order to protect shut down & keeping labour force busy in slack reason.
4) Method is particularly useful in quoting for competitive tender & in export
marketing.
Limitation:
1) This method cannot be followed long time as its share of fixed cost remains to be
unabsorbed
2) The producer may lose the market of other products because of the high cost &
competitors may drive away the customer.
Here demand is main factor. Price is determined by simply adjusting it to the market
conditions. High price is charged where the demand is intense & low price is charged
when the demand is low.
It has following method.
Purchasing Power pricing method: Price is determined what the purchasers can bear
to pay. All it depends upon their purchasing power. Retailer rather than
manufacturing firm uses it more. These methods. brings high profit in the short run.
But in long run it is not safe. It can be used. Where monopoly/oligopoly conditions
exist where demand is inelastic with respect to price.
Market penetrating pricing: Opposite to skimming pricing it offers a low introductory
price to speed up its sales & therefore widening the market base. It aims at capturing
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 7/36
market.
Competition oriented pricing: Most of the companies fix the prices of their products
after a careful consideration of the competitor’s price structure. Three-policy
alternative are available to the firm under this pricing method.
a) Parity pricing or going Rate pricing: Prices are determined on the price
structure. Three-policy alternative are available to the firm under this
pricing method.
So all the above are pricing strategies used by different firms in different situation.
2) Probability control:
The prime responsibility is with marketing controller. The main purpose of this is to
examine whether the company is making and losing money. Companies need to
measure the profitability of their various products, territories, customer group,
segments, trade channels & other sizes, This information will help management
determine whether any products or marketing experience should be expanded,
reduced or eliminated.
3) Efficiency control:
Lien and staff management and marketing controller does this control. The purpose
this control is to evaluate and improve the spending efficiency and impact of
marketing expenditure. This control helps in sales force, advertising sales promotion
& distribution etc.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 8/36
4) Strategic Control:
Top management marketing auditors do this control. The purpose of this is to
examine whether the company is pursuing its best opportunities with respect of
markets, products and channels. This control helps in marketing effectiveness,
marketing audit, marketing excellence review, company ethical and social
responsibility.
Q6. What is the market research? What are the various steps undertaken in
marketing research?
Ans. Marketing Research: In marketing research gather significant information about
the marketing environment like opportunities for the business, requirement of the
user, strategies of the competitor, trends of the market etc. that helps the
management to decide about the product program.
5) Present the finding: The research presents the finding to the relevant parties. The
researcher should present major finding that are relevant to the major marketing
decision mgt.
Q7. What are the different factors affecting consumers buying behavior?
Ans. A consumer's buying behavior is influenced by cultural, social personal and
psychological factors. Explanations of these are as follows:
1) Cultural factors:
a) Culture: Individual acquires a set of values, perception, preferences and
behaviors through his or her family and other key institution. Culture is the
most fundamental determinant of person's want and behavior.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 9/36
2) Social factors:
Like reference group, family & social roles and statures also affect consumer-
buying behavior.
a) Reference Group: A person's reference group consists of all the groups
that have direct or indirect influence on the person's attitude or behavior.
These groups are like family, friends, neighbour & co. worker.
b) Family: Family members are the most influential primary reference group.
c) Role and status: A person's participation in many group –family clubs
organizations.
The persons' position in each group can be defined terms of role and status. Role
consists of activities that person is expected to perform. Each role carried a status of
consumer so as to provide potential product & brands.
3) Personal Factors
a) Age and stage in the life cycle: People by diff goods and services over a
lifetime.
b) Occupation and economic circumstances: Occupation also influences a
person's consumption better.
c) Life style: People from same subculture social class, and occupation may
lead quite different lifestyle. Lifestyle is a person's pattern of living in the world
as expressed in activities, interest and option.
d) Personality and self-concept: By personality we means distinguishing
psychological chrematistics that lead to relatively consistent and enduring
responses to environment.
4) Psychological Factors
a) Motivation: One person has many needs. A need becomes a motive when it
is aroused to a sufficient level of intensity. And this motive sufficiently
pressing to drive the person to act.
b) Perception: Is the process by which individual selects organizes and interpret
information input to create a meaningful picture of the world.
c) Learning: People act when they learn. Learning involves changes in an
individual 's behavior, behaviors arising from experience.
d) Beliefs and Attitude: Through doing and learning people acquire belief and
attitude. A belief is description thought that a person holds about something.
Beliefs are persons' enduring favorable or unfavorable evolution, emotional
feelings and action tendencies toward some object or idea.
So at last, we can say all these factors affect consumer's buying behavior.
1) Problem recognition: Buying process starts when the buyer recognized a problem
or need. He should know what he wants at this stage.
4) Marketing Strategy: This decision is based on the attitude of the individual and
the unanticipated situational factors. Like if U want to opt branded product then
you decision for purchasing go in that direction. The influence on individual of
other also affects purchase decision.
5) Post purchase Behavior: P.P.B. of the producer also comes under the buying
process. If the consumer will experience some level of satisfaction after purchase
then he/she will opt for that product for further purchase. If not then vice versa.
Consumers during these days are very much aware of the benefits they can get.
So they look for aware of the benefit they can get. So they look for.
really god products, there is no need for advertising – as good products are sold
automatically. During 1940s ‘Product Concept’ was replaced by ‘Sales Concept’ and
worked on the belief that sales will not result unless there are promotional efforts –
which meant aggressive advertising. This prevailed very strongly up to 1940s, but we
do find it in practice even to day. During 1950s, we come across customer orientation
concept, where customer is the centre of whole activities of production and
marketing. It meant-conduct of marketing research to know customers needs, make
available products-promote or advertise them to market effectively. Thus, product
came last and customer products-promote or advertise them to market effectively.
Thus product came last and customer first. Since 1950s-this is predominant even
today. This customer orientations concept has now undergone emerge and still
undergoing-which is called as social concept-that cares for consumer welfare and
environment protection. These changes took place in 1960, 70s, 80s and 90s. Thus,
a person wants can, which is less pollutant, a cigarette without smoke, a medicine
without side effect, a product that causes no environmental imbalance.
5) Adoption
Q8. Positioning.
Ans. Positioning is the act of designing company’s offering and image so that they occupy
a meaningful mind. It means what you position in the mind of the prospect of the
product. It focus on how many and which difference to promote to the target
customer.
3) Early majority: Most deliberate – not consider buying a new product until a
number of their peer have done so.
4) Late Majority: Person who have below average income and social prestige
and older than members of earlier groups.
5) Laggards: They have still lower income & social status they are the last over
the adopt a new products by the time they but a new product.
Q20. Trademarks.
Ans. Trade marks- when the brand mark is registered and legalized it becomes a
trademark. In that sense all trademarks are brands but all brands are not trademarks.
Definition
“Brand or part of a brand that is given legal protection because it is a
capable of exclusive appropriation.”
Thus trademark is essential a legal term protecting the manufacture’s right to use the
brand name or trademark.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 15/36
S Segmentation
T Targeting
P Positioning
Targeting: When the market is segmented than targeting starts. After various
segments of the markets are evaluated. So we can say targeting means to evaluate
the attractiveness of each segment so that sales can be increased.
1) Geographic segmentation: Calls for dividing the market into different geographical
units such as nations, states, regions, counties, cities or neighborhoods.
4) Behavioral Segmentation: Buyers are divided into group on the basis of their
knowledge of attitude toward use of or response to a product. Many marketers
believe that behavioral variable – occasions, benefits, usage rate, loyalty stages,
buyer readiness stage & attitude are the best starting points for constructing
market segments.
2) Conformance Quality: is the degree of which all the produced units are identical
meeting the promised target specification. Low conformance means when
product will fail to deliver its promise.
3) Durability: is the measure of the product expected operating life under natural
and stressful conditions? Basically customer feels if they pay more for products
they have more durability. But is not purely true. No technological obsolescence
is three if price are less.
4) Reliability: is the measure of the probability that a product will not malfunction or
fail within a specified time period.
6) Style: Describe the product 's book & feel to the buyer like packaging,
accessories etc.
7) Design: The totality of features that affect how a product looks & functions in
term of customer requirement
The consumer adoption process focuses on the mental process through which an
individual passes from the first hearing about an innovation to final adoption.
Adopter of new products has observed to move through the following five stages.
4) Trial: The consumer tries the innovation to improve his or her estimate of its
value.
5) Adoption: The consumer decides the make full & regular use of the innovation.
This progression suggests that the new product marketer should aim to facilitate
consumer movement through these stages. The manufacturer should consider
offering a trial use plan with option to buy. So this is brief view of consumer adoption
process.
Q5. What is the process of new product development? Explain various steps in
detail.
Ans. Basically there are eight stages involved in development of new product, which are
as follows:
Idea Generation: The process starts with the search of ideas. Top management
should define the product and market to emphasize and should state the new
products Objective, Idea can come from various sources customer, scientists,
employees, competitors, channel member & top mgt. This step emphasis on
customer needs & wants. This step can take place through attribute listening forces
relationship, morphological, analysis, Brainstorming etc.
Idea Screening: Any company can attract good ideas by organizing itself properly.
The co. should motivate its employees to submit their idea to an idea chairman then
this idea should be stored in three groups. Promising ideas, marginal ideas & rejects.
In screening ideas company must avoid two types of error. A drop error –when co
dismissed otherwise good ideas. Second is a Go error when the co. permits poor
ideas to move into development and commercialization. In it product ideas rating
devices are also used.
Concept Development and Testing: For developing a good product we must have
product ideas, product concept product image. The entire like product positioning
map, brand positioning map etc. help in concept development.
Where as concept testing calls for testing product concept with an appropriate group
of target consumers, then getting those consumer's reaction
4) Marketing Strategy Development: After testing the new product manger must
develop a preliminary marketing strategy plan for introducing the new production into
the market. Marketing strategy plan consists of three parts. Acc. to first plan –target
market size, structure & behavior etc should be described acc. to second plan. M.S
outlines product's planned process Acc. To third plan describes the ling run sales &
profit goals & marketing mix strategy over time.
6) Business Analysis: After mgt. develops the product concept and marketing
strategy, it can evaluate the proposal’s business attractiveness. Mgt needs to
prepare sales, cost & profit projects to determine whether they satisfy the
companies objective. In it mgt. have to decide about estimating total sales.
Estimating costs & profits.
8) Market Testing: Have product sales met our expectation? Whether the marketing
test is under control.
Each firm when want to promote difference then that firm appeal most strongly to its
that firm to different it self with another company. Like Auto Company might choose
to differentiate its cars on during durability while its competitor choose to emphasize
fuel economy, comfort or smoothers of ride. Here the end result of positioning the
successful creation of a market focused value proposition.
Labeling:
Labeling is subset of packaging. Label may be a simple tag attached to the product
or elaborately designed graphic that is the part of the packaging. Label might carry
only the brand name, which help in identification of the product. The label might help
in identification of the product. The label might help in identification of the product.
The brand name which help in identification of the product. The label might describe
the product, which made it, where it was made, when it was made it was made, what
it contains, how it is to be used and how to use it safely. Finally the label might
promote its product through attractive graphic.
Q8. What is branding? What are the branding strategies and its benefits?
Ans. Branding: Manufacturer who decides to brand their product must choose which brand
name to use.
Brands can be given with any of the four strategies.
Some points should be remembered before allocating brand name to the product.
Brand Strategy Decision: A company has five choices when it comes to brand
strategy.
1) Line extension: existing brand name extended to new size of flavor
and soon.
2) Brand extension: Brand name extended to the new product
categories
3) Multi-brands: New brands introduced in the same product
category.
4) New brands: New brands names for a new category product.
5) Co- brands: brands bearing two or more well-known brand names.
The adoption process is believed to follow a five stage sequential process beginning
with actual awareness of a product’s existence and ending with adoption or
commitment to the product. From the point in time when an individual first hears of an
innovation to the point in time when adoption occurs has been recognized as
consisting of five logical stages namely, awareness – interest-evaluation-trial and
adoption.
1. Awareness Stage: - Here the individual is exposed to the innovation but lacks
complete information about it. That is, the individual is aware of the innovation
but is not yet motivated to seek further information. He knows of product
existence.
2. Interest stage: - The individual becomes interested in the new idea and seeks
additional information about it. The innovation is favored in a general way but
is not yet judged in terms of its utility to a specific situation. He seeks further
information.
3. Evaluation stage: The individual applies his mental faculty to the innovation to
compare present and anticipated situation and then decides to whether or not
to try it. It is to do with careful weighting as to whether or not to try it.
4. Trial stage: -The individual uses the innovation uses the innovation on a
small-scale in order to determine its utility in his own situation. That is he tries
it one or twice to confirm it’s utility.
5. Adoption stage: - The individual decides to continue the full use of the
innovation. That is he purchases and repurchases.
It is worth emphasizing here that any innovation may be rejected at any stage of
adoption process. Even rejection can take place after adoption, which is called as
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 20/36
1. Idea generation
Product idea generation means fusion of perceived need with the recognition
of a technical opportunity.
The Sources of new product ideas: - These sources are internal and external:
The internal sources are:
1. Basic research
2. Manufacturing
3. Sales people.
4. Top management.
The external sources are:
1) Secondary source of information.
2) Competitors.
3) Customers.
4) Resellers.
5) Foreign marketing.
6) Inventors
Methods or techniques of getting new ideas. The most reliable method is:
1. Focus groups.
2. Attribute listing.
3. Forced relationships.
4. Brain storming
5. Reverse brainstorming.
6. Problem inventory analysis.
The screening methods: - There are two most commonly used methods used
for screening the new product ideas namely, 1. check-list method and 2. Idea
rating method.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 21/36
3. Business analysis
It is an in-depth study of the estimated economic feasibility of new product
ideas. It is an attempt to predict the economic consequences of the product
for the company as a whole.
4. Product development
Product development stage marks the making up of actual prototype of the
product and tested, and refined and marketing campaign is planned. It is a
scientific and engineering task leading to the design and building of prote-
type, working models on one hand and functional testing on the other.
This stage is important because:
1. It gives a concrete form.
2. It speaks of investment.
3. It provides definite answer.
5. Test-marketing
It is the controlled experiment done in a limited but carefully selected part of
the market place whose aim is to predict the sales or profit consequences,
either in absolute or relative terms of one or more proposed marketing
actions.
Why test-marketing?
Test marketing is undertaken because of:
1. Improving the knowledge of product sales.
2. Pretesting alternative marketing plans.
3. Predicting product faults.
4. Knowing reactions of competitors.
Alternatives to test-marketing
The alternatives to this technique of test-marketing are:
1. Markov chain analysis.
2. Model test-marketing.
3. Market simulation model.
4. Roll-out method.
6. Commercialization
It is the actual introduction of the product into the market place, with all of the
related decisions and resource commitments. It is the stage whereby
contracts are entered into for the supply of raw materials and components
parts, channels of distribution are selected, manufacturing facilities and
equipments are set in operation, sales people are hired and advertising
programmes are okayed.
2. It should be Short and Sweet: The name must e short yet sweet, appealing to
eyes, ears and brain. Mukund and Mukund, Panama, D.C.M., Bombay
Dyeing, Bata, Tata, etc, are of such kind.
4. It should be Legally Protectable: The brand name must lend them for legal
protection. A brand name, legally recognized, is known as trademark.
Normally, it depends on the will and discretion of a producer, middlemen than
on brand name.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 23/36
Q4 What is Publicity?
Ans. Publicity: It is program design to promote company is image or its products. It is
basically used for launching new products, repositioning a mature product, building
interest in product, repositioning a mature product, building in a way that project
favorably on its products. About the Co & its product.
1) Arranged Interview
2) Intercept Interview
1) Press relations
2) Product publicity
3) Corporate communication
4) Lobbying: dealing with legislation and government officials to promote
or defeat legislation and regulation.
5) Counseling: Advising management about public issues and company
positions and image.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 26/36
1) Affordable method: Here promotion budget set at what they think company
can afford. They don’t think about requirement.
2) Percentage of sales Method In it promotion expenditure vary with sales.
Encourage competitive atmosphere.
3) Competitive parity Method: Promotion budget is set up on the behavior of the
competitor’s achievement.
4) Objective and Task Method: Calls upon marketers to develop their promotion
budget by defining their specific objective, determining the tasks that must be
performed to achieve these objectives, and estimating the cost of performing
these tasks.
1) Internal marketing: Include work done by the co. to train and motivate its
employee to serve customer well.
2) External marketing: Work done by the company to prepare, price, distribute &
promote the service to customer.
3) Interactive marketing: describe employees’ skill in serving client like technical
and functional quality.
use positive motivators such as higher margin, special deal premiums, co-operative
advertising allowances, display allowances & sale contests.
Q3. What are the different steps in managing the sales force?
Ans. Difference steps in managing the sales force are as follows
1) Recruiting and selecting sales representative: First of all selection of effective
sales representative. Select those S.R. which are honest reliable, knowledgeable
and helpful because customer look for these traits in the sales, representative.
2) Training sales Representative: Many companies send their new sales
representative into to field, which makes their selling ineffective. So the S.R.
should be properly brained. Customer expects sale people to have deep
knowledge of product to add ideas to improve the customer operations and to be
efficient and reliable. These demands have required companies to make too
much higher investments in sale training. In training sales representative much be
made aware of following points.
i) Sale representative need to know and identify with the company.
ii) Sales representative need to know the customer and competitors.
iii) Sales representative need to make effective dales presentation.
iv) Sales representative need to know understand filed procedure &
responsibilities.
v) Sales representative need to know company's product.
3) Supervising sales representative: Sales representative who are paid mostly on
commission generally receive less supervision. But those who are salaried must
cover definite accounts are likely to receive substantial supervision.
1) Developing norms for customer calls.
2) Developing norms for prospect calls.
3) Using sales time efficiently
4) Motivation sales Representative: Some S.R. will put forth their best effort
without any special coaching from management to them selling is the most
fascinating job in the world. They are ambitious self-starters. But majority
require motivation, encouragement for increasing sales. Churchill, Ford &
Walker, studies this problem. They follow this model
1) Sales manager must be able to convince salespeople that they can sell more by
working border or by being training to work smarter.
2) Sales manager must be able to convince the sale people that the reward for
better performance is worth the extra efforts.
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 30/36
1) Store Retailing: Like departmental stores, customer today can shop for goods &
service in a wide variety.
2) Non-store retailing: Like direct selling, direct marketing, buying services, mail
order shopping, TV shopping.
3) Retail organization: achieve many economics of scale, such as greater
purchasing power, wide brand reorganization, example of these type of shores
are consumer co-operative, franchise.
Whole Selling:
Whole Selling include al the activities involved in selling goods or services to those
who buy for resale or business use. Wholesaling exclude manufacturer and farmers
because they are engaged primarily in produce wholesaler is different from retailer,
whole seller pay less attention to promotion, atmosphere location etc.
Type of whole selling
1) Merchant whole seller
2) Brokers and agent
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 31/36
Distribution:
For distribution the goods & services in the market companies have to decide on the
number of intermediaries to use at each channel level
Basically 1) Exclusive Distribution 2) Selective Distribution 3) Intensive Distribution
methods are used like
1) Exclusive distribution: Involves limiting the number of intermediaries handling the
company's goods services.
2) Selective Distribution: Involves the use of more than a few but less than all the
intermediaries who are willing to carry a particular product.
3) Intensive Distribution: The manufacturer places the goods and services in as
many outlets as possible. When the consumer require a great deal of location
convenience, it is important to offer greater intensify of distribution. At last we can
say distribution is channel of delivering goods from product to consumer
Functions:
Wholesaler traders perform a number of functions in the process of marketing
the goods. Of them, the most important ones are:
storage. They also bear risks of non-or under payment by the retailers. Risk
shouldering is the part of his game.
6. Grading, Packing and Packaging: Grading is another function of wholesalers
where by they sort-out the stocks in terms of differing sizes, qualities,
moisture contents and so on. Bulk breaking is done with a view to meet the
small lot requirement of the retailers. In fact, they repack for the consumers
as per the orders of the retailers.
7. Dispersing and Selling: The goods assembled and held in stock are meant for
dispersing and selling. It is the retailers who buy from the wholesalers.
Similarly, wholesalers do have their own sales-army moving to retailers in
collecting order.
8. Providing Market Information: Wholesalers are the vital link between the
retailers and the manufacturers. They provide relevant and up-to-date
information to the retailers affecting their trade interests; so also they
reciprocate the same to manufacturers as to whatever retailers feed them on
changing market conditions useful for the wholesalers.
1. Economics of Scale: - The wholesalers buy in bulk than in small lots. The bulk
selling for manufacturers brings the benefits of the economics of large-scale
production because, bulk selling supports bulk selling supports bulk
manufacturing on the part of producers.
2. Saving in Time and Trouble: Wholesalers collect orders from large number of
retailers on behalf of the manufacturer and supply them goods in small lots.
This relieves the manufacturer from the wastage of his valuable time, trouble
and treasure. Thus, he can concentrate on the production problems than
distribution.
3. Regularization of Production Cycle: The wholesalers give the actual and
potential demand conditions being in close contact with the retailers. Further
manufacturers can keep production a continuous activity because the
wholesalers act as the safety value to smoothen the seasonal demand and
regular supply and vice versa.
4. Better Use of Capital: In absence of wholesalers, every producers or
manufacturer would have been forced to maintain huge stocks, which mean
capital lock-up, in addition to the risks of loss. Now he is using those funds in
production because, the wholesalers have taken the task of stock holding.
5. Price Stabilization: In absence of wholesalers, there would have violet price
fluctuation harming the interests of the consumers and the wholesalers. It is
the wholesalers who match seasonal demand and supply and regular
demand and supply. It reduces the vagaries of extremes, which are deadly.
A ‘full-function’ wholesaler is an intermediary who buys and sells the products on his
own account, assembles products from different sources in bulk, carries stocks, sells
in smaller lots, grants credit and renders valuable counsel and advice. Because of
wide range of functions, he performs and service he renders, he is called as full-line
wholesaler. A ‘converter’ is that full-line wholesaler who buys products and sells them
to the subsequent channel members after processing them. Thus, in cotton textiles,
he may convert gray cloth into bleached and dyed, in corns; he may convert wheat
into wheat flour of pallets. A ‘drop-shipper’ is that wholesaler who neither stores the
products nor delivers them to the buyers from his own stock but books orders and
directs manufacturers to the retailers to those effects. However, he has to take
delivery of goods in case the retailer or the buyer fails to accept the same.
The retailers can be classified in number of ways. However, the most practical and
popular way is that of small scale and large retailers with further sub-classification as
under:
1. Unit Stores: - Unit stores are the retail stores run on proprietary basis dealing
in general stores or single line stores such as drugs, clothes grocery items,
hardwires, shoes, books, utensils etc. Single line stores are mostly called as
specialty shops as they may specialize in one line only.
2. Street Traders: Street traders are the retailers who display their stock on
footpaths, or the sidewalks of busy spots of cities and towns. The most
SUBJECT: MARKETING MANAGEMENT (PGDBM/MBA-2) 34/36
(i) No need to carry large stock. (ii) Easy meeting of demand fluctuations. (iii)
Improved operating efficiency. (iv) Optimal use of transport facilities.
(i) Heavy transport cost (ii) Loss of customer service. (iii) Loss of potential market. On
the other hand the plus points in favor of decentralized warehousing are:
On the other hand the plus points in favor of decentralized warehousing are:
(i) Better customer service (ii) Savings in freight (iii) Facilities product movement by
block rates.
B Inventory controlling: Inventory control implies holding just stock to minimize costs
and losses. The goals of inventory management are:
determined by the factors like – the warehouse layout, the nature of product,
the resources, costs of operation and customer service.
4. Transportation: Transportation involves loading and unloading of products
and transshipment between the places of dispatch and places of arrival. The
transport media mix is made up of railways, roadways, airways, waterways
and pipelines.
Railways have the merits such as: (a) large carrying capacity. (b) Economical means.
(c) All weather mode. (d) Containerization. (e) Linking international markets.
The minus points are: (a) Costlier over short distances (b) Slower movement. (c)
Inordinate delays.
Roadways have the plus points like: (a) Economical over short distance (b) Speedier
movement (c) Touching far-flung markets. (d) Lesser conditions of service.
The demerits are: (a) Costly over long distance (b) It is fair weather friend. (c) Not
suitable for bulk transport.
Airways have the merits such as: (a) Fastest means (b) all weather friends (c)
Consumer satisfaction. (d) Reduced inventory holdings.
The demerits are (a) It is costlier means (b) Limited coverage (c) Limited cargo
capacity.
Waterways have the merits like: (a) it is cheaper means. (b) Most suitable for heavy
and fragile products. (c) Loading and unloading facilities. (d) No. Problem of
congestion.
The demerits are (a) slow speed. (b) Unreliable (c) Limited service
Pipe-lines have the specific merits such as: (a) Economical. (b) Uninterrupted
service. (c) No danger of wastage. (d) Underground
The demerits are: (a) Initial heavy investment. (b) Danger of enemy attacks.