MARKETING MANAGEMENT

Very Short answer type questions :

Ques 1. ‘Marketing is business’. Comment.

Ans 1. Marketing in business

 The marketing is heart of a business. Its success lies in its marketing. Most aspects of your
business depend on successful marketing. The overall marketing umbrella covers advertising,
public relations, promotions and sales.
 Marketing is a process by which a product or service is introduced and promoted to potential
customers. Without marketing, your business may offer the best products or services in your
industry, but none of your potential customers would know about it. Without marketing, sales
may crash and companies may have to close.
  Marketing is an essential process to the success of your small business. Marketing involves
researching, packaging and presenting products and services to consumers.
 Good marketing campaigns help drive sales and better inform your consumer about your
business. Discuss the functions of marketing with your company team members to understand
their role in selling your products and services.
 Marketing is perhaps the most important activity in a business because it has a  direct effect
on profitability and sales. Larger businesses will dedicate specific staff and departments for
the purpose of marketing.
 It is important to realise that marketing cannot be carried out in isolation from the rest of the
business. For example: The marketing section of a business needs to work closely with
operations, research and development, finance and human resources to check their plans
are possible.
 Operations will need to use sales forecasts produced by the marketing department to plan
their production schedules.
 Sales forecasts will also be an important part of the budgets produced by the finance
department, as well as the deployment of labour for the human resources department.
 A research and development department will need to work very closely with the marketing
department to understand the needs of the customers and to test outputs of the R&D section.

Ques 2. Differentiate between brand and trade mark.

Ans 2.

s. no Basis of Trade mark Brand

distinction
1. Meaning Trade mark is used in the narrow Brand is used in broader sense
sense. Trade mark is that part of
brand which has a legal protection.
2. Denotion Trade mark denotes the producer. Brand denotes the qualities of
So trade mark can be used with product
every brand.
3. usage Some businessman use the same Some give different brands to their
symbol or design for their brands different products with the same
and trade mark. trade mark.

Ques 3. Describe factors influencing pricing.

Ques 4. How important middleman are?

Ans 4. Importance of middleman

 Middlemen in business refer to independent businesses that form the distribution channels
through which a product passes on its way from a manufacturer to end user.

 Middlemen are of different types like wholesalers and retailers. Generally goods are
manufactured in large quantities at a few centralized locations, to reap the advantages of
economy of scale. However the end users are widely dispersed over large geographical areas.

 The goods manufactured must be transported from the manufacturing locations, and delivered
to each retail customers, when and where they want. Using the services of middlemen the
manufacturers distribute their product economically and quickly.

 Distribution channel provides many benefits to customers also by making goods available to
then at locations near them. Also they are able to buy products of many different
manufacturers at one place.

 The retailers may also provide advice and add on service to customers to help them choose
the right product. A salesman in a shoe shop may advice its customer on the right type of
 shoes for different purposes like jogging, mountain climbing, and very cold climates. They
also help the customers to try out the fit of the shoes.

Ques 5. Define promotion mix.

Ans 5. Promotion mix:

1. Advertising

2. Sales promotion

3. Personal selling

4. Public relation

1. Advertising:
Advertisement can be defined as the “paid form of non-personal presentation and promotion of idea,
goods or services by an identified sponsor”.

It is an impersonal presentation where a standard or common message regarding the merits, price and
availability of product or service is given by the producer or marketer. The advertisement builds pull
effect as advertising tries to pull the product by directly appealing to customer to buy it.

2. Sales Promotion:
Sales promotion refers to short term use of incentives or other promotional activities that stimulate the
customer to buy the product
3. Personal Selling:
Personal selling means selling personally. This involves face to face interaction between seller and
buyer for the purpose of sale.

4. Public Relations:
Apart from four major elements of marketing mix, another important tool of marketing is maintaining
Public Relations. In simple words, a public relations means maintaining public relations with public.
By maintaining public relations, companies create goodwill.

Ques 6. What is meant by product mix.

Ans 6. PRODUCT MIX

The number of different product lines sold by a company is referred to as width of product mix.
The total number of products sold in all lines is referred to as length of product mix.

FACTORS INFLUENCING PRODUCT MIX

 Change in demand.
 Marketing influences.
 Production efficiencies.
 Financial influence.
 Use of waste.
 Competitor’s strategy.
 Profitability.

Ques 7. Differentiate between consumer and industrial goods.

Ans7. Consumer Goods

 The goods which are bought for household use, personal use, or family use from retail stores
are called “consumer goods.”
  The consumers have certain buying habits, and based on these habits the consumer goods are
divided into three different subcategories:
 shopping goods,
 specialty goods,
 convenience goods.
 The consumer goods can also be differentiated or categorized into durable and non-durable
goods. Durable goods are goods which have longer durability such as furniture, etc. whereas,
non-durable goods include food, supplies for school, etc.

 Convenience Goods- Goods which the consumer wants to buy with maximum convenience
are mostly non-durable, bought in small quantities, are of low value, and frequently purchased
are called “convenience goods” like milk, bread, etc. These goods which are planned buys are
called “staple goods” whereas goods like newspapers, candies, etc which are bought
impulsively and were not planned are called “impulse goods.”
Industrial goods

 Goods which are bought by companies to produce other products which are sold later are
called “industrial goods.” These goods can be directly or indirectly used in the production of
goods which are sold at retail.
 Industrial goods are classified according to their usage instead of consumer habits. The
durable goods are called “capital items” as they are of very high values, and non-durable
goods are called “expense items” and are usually used within a year.
 They have been categorized into five subcategories: industrial supplies, installations,
fabricated materials and parts, accessory equipment, and raw materials.

Ques 8. Comment on AIDA model.

Ans 8. AIDA MODEL

AIDA stands for Attention, Interest, Desire and Action. These are the four stages that a consumer
goes through when watching or viewing an advertisement.  According to Lewis, first and foremost,
the role of an advertisement is to attract the customers. Once an ad grabs attention, it has to invoke
interest towards the product in the minds of the consumers. After creating an interest, the ad has to
bring desire in consumers mind to use the product and finally the consumer has to take a favorable
action towards the product by ultimately purchasing the product.

THE PROCESS OF AIDA

 Attention: Attention is usually grabbed by the use of image, color, layout, typography, size,
celebrity, model etc
 Interest: Once attention is grabbed, it’s necessary to create interest in the viewers mind so
that they will read more about the brand being advertised. By the use of an attractive sub head,
interest can be invoked
 Desire: The element of desire is usually created by the use of body copy where you write in
detail about the necessity of buying the brand, thereby explaining the features of the brand, facts
and figures
 Action: Towards the end, the contact information of the brand will be given where they
expects the viewers to take action immediately. It can be in the form of shop address, toll free
numbers or website address

Short answer type questions

Ques 1. What are the factors affecting choice of distribution channel?

Ans 1. Important factors affecting the choice of channels of distribution by the manufacturer are:

(A) Considerations Related to Product

When a manufacturer selects some channel of distribution he/she should take care of such factors
which are related to the quality and nature of the product. They are as follows:

1. Unit Value of the Product:

When the product is very costly it is best to use small distribution channel. For example, Industrial
Machinery or Gold Ornaments are very costly products that are why for their distribution small
distribution channel is used. On the other hand, for less costly products long distribution channel is
used.

2. Standardised or Customised Product:

Standardised products are those for which are pre-determined and there has no scope for alteration.
For example: utensils of MILTON. To sell this long distribution channel is used.

3. Perish ability:
A manufacturer should choose minimum or no middlemen as channel of distribution for such an item
or product which is of highly perishable nature. On the contrary, a long distribution channel can be
selected for durable goods.

4. Technical Nature:
If a product is of a technical nature, then it is better to supply it directly to the consumer. This will
help the user to know the necessary technicalities of the product.

(B) Considerations Related to Market

Market considerations are given below:
1. Number of Buyers:
If the number of buyer is large then it is better to take the services of middlemen for the distribution of
the goods. On the contrary, the distribution should be done by the manufacturer directly if the number
of buyers is less.

2. Types of Buyers:
Buyers can be of two types: General Buyers and Industrial Buyers. If the more buyers of the product
belong to general category then there can be more middlemen. But in case of industrial buyers there
can be less middlemen.

3. Buying Habits:
A manufacturer should take the services of middlemen if his financial position does not permit him to
sell goods on credit to those consumers who are in the habit of purchasing goods on credit.

4. Buying Quantity:
It is useful for the manufacturer to rely on the services of middlemen if the goods are bought in
smaller quantity.

5. Size of Market:
If the market area of the product is scattered fairly, then the producer must take the help of
middlemen.

(C) Considerations Related to Manufacturer/Company

Considerations related to manufacturer are given below:
1. Goodwill:
Manufacturer’s goodwill also affects the selection of channel of distribution. A manufacturer enjoying
good reputation need not depend on the middlemen as he can open his own branches easily.

2. Desire to control the channel of Distribution:

A manufacturer’s ambition to control the channel of distribution affects its selection. Consumers
should be approached directly by such type of manufacturer. For example, electronic goods sector
with a motive to control the service levels provided to the customers at the point of sale are resorting
to company owned retail counters.

3. Financial Strength:
A company which has a strong financial base can evolve its own channels. On the other hand,
financially weak companies would have to depend upon middlemen.

Ques 2. Explain product life cycle in detail.

Ans 2. THE PRODUCT LIFE CYCLE

Products often go through a life cycle. Initially, a product is introduced.

Product Introduction/ Development Stage

This is the first stage in product life cycle. Before a new product is introduced in the market place, it
should be created first. The processes involve in this stage include generation of idea, designing of the
new product, engineering of its details, and the whole manufacturing process. This is also the phase
where the product is named and given a complete brand identity that will differentiate it from the
others, particularly the competitors. Once all the tasks necessary to develop the product is complete,
market promotion will follow and the product will be introduced to the consumers. Product
development is a continuous process that is essential in maintaining the product’s quality and value to
consumers. This means that companies need to continuously develop or innovate their products to out
ride new and existing competitors.

Product Growth Stage This is a period where rapid sales and revenue growth is realised. However,
growth can only be achieved when more and more consumers will recognize the value and benefits of
a certain product. In most cases, growth takes several years to happen, and in some instances, the
product just eventually died without achieving any rise in demand at all. Hence, it is important that
while the product is still in the development and introduction stages, a sound marketing plan should
be put in place and a market and primary demand should be established.

Product Maturity and Saturation Stage

In the maturity stage, the product reaches its full market potential and business becomes more
profitable. During the early part of this stage, one of the most likely market scenarios that every
business should prepare for is fierce competition. As business move to snatch competitor’s customers,
marketing pressures will become relatively high. This will be characterised by extensive promotions
and competitive advertising, which are aimed at persuading customer to switch and encouraging
distributors to continue sell the product.

Product Decline Stage

The decline stage is the final course of the product life cycle. This unwanted phase will take place if
companies have failed to revitalize and extend the life cycle of their products during the maturity
stage’s early part. Once already in this phase, it is very likely that the product may never again
recover or experience any growth, eventually dying down and be forgotten.

Ques 2. Define product and types of product in detail.

Ans 2. Product

Product is a set of basic attributes assembled in an identifiable form. Each product is

identified by a commonly understood descriptive or generic name.

Quality
Seller's Physical
service features

Seller's
reputation Price

Product
Color Brand

Product
packaging
warranty
Design

Types of Product

1. Consumer products
Consumer products are those products which are manufactured for the use of general public
such as shoes, soap, mobiles, clothes, food products etc. Consumer products are subdivided in
to the following categories:

 Convenience goods ( food items, inexpensive products, soaps, toothpaste, daily used
inexpensive products)
 Shopping goods( fashionable apparel, furniture, major appliances, automobiles)
 Speciality goods ( branded products like Nikon, men’s suits, health foods, certain
home appliances)

2. Industrial products
These are the products which are sold primarily for the use in manufacturing other goods.
These includes items like machinery, components, and raw materials which form the bulk of
industrial goods.
  Raw materials
 Fabricating materials
 Accessory equipment

Ques 3. Explain marketing mix.

Ans 3. Marketing mix introduction

In the words of Philip Kotler, “Marketing Mix is the set of controllable variables and their levels that
the firm uses to influence the target market.” Marketing mix is a combination of various elements,
namely, Product, Price, Place (replaced by Physical Distribution) and Promotion.

Product
Price
Variety
List price
Quality
Discounts
Design
Allowances
Features
Payment period
Brand name Target customers

Place

Channels

Promotion Assortments

Advertising Locations

Personnel selling Inventory

Public relations Transportation

The various important elements of marketing mix are briefly discussed as follows;

PRODUCT: It is the thing possessing utility. It is the bundle of value the marketer offers to potential
customers. Today manufacturers are realizing that customer expects more than just the basic product.
Therefore the product must satisfy the consumers needs. The manufacturer first understands the
consumer needs and then decides the type, shape, design ,brand, package etc. of the goods to be
produced. The product is a marketer’s primary vehicle for delivering customer satisfaction.

PRICE: it is the amount of money asked in exchange for product. It must be reasonable so as to
enable the consumer to pay for the product. While fixing the price of a product, the management
considers certain factors such as cost, ability of the consumers, competition, discount, allowances,
margin of profit etc.
PLACE (PHYSICAL DISTRIBUTION): It is the delivery of products at the right time and at the
right place. It is the combination of decision regarding channel of distribution (wholesalers, retailers
etc. ), transportation, warehousing and inventory control.

PROMOTION: It consist of all activities aimed at inducing and motivating customers to buy the
product. The selection of alternatives determine the success of marketing efforts. Some firms use
advertising, some others personal selling or sales promotion. Thus promotion includes advertising
public relations, personal selling and sales promotion.

Ques 4. What are the types of marketing organization.

Ans 4. Types of marketing organization

1. Military Type of Organisation:

This is the simplest and oldest form of organisation. It is also referred as line organisation, scalar or
hierarchical organisation. Under this type of organisation, a superior delegate’s authority to a
subordinate, who in turn delegates authority to another subordinate and so on. Authority descends
from the top to the bottom level, through downward delegation of authority. Subordinates become
responsible to their immediate superiors. The topmost management has full control over the entire
field.
2. Functional Type Organisation:
The limitations of line organisation have been removed under this system. All types of work of the
organisation are grouped and managed by the top executive. There are separate functional
departments for major functions of the enterprise; example personnel department, purchase
department etc. Each department does its function for the entire organisation. Sales department does
the function for the whole enterprise. The functional organisation works through the line organisation.
Functional organisation is based on expert knowledge and makes the greatest use of division of labour
resulting in high efficiency and specialization.

3. Line and Staff System:

In this type, the organisation is based on the line organisation and the functional experts advise the

line officers as to the functions of the enterprise. The line officers are the executives and the staff

officers are their advisers. Though the staff officers do not have the power to command the line

officers, their advice is generally adhered to.

4. Committee Organisation:
Committee organisation is widely used for the purpose of discharging advisory functions of the
management. Committees are formed in different levels of organisation. A committee is a group of
people who meet by plan to discuss or make a decision on a particular subject. Because of its
advantages, committee organisation is preferred. The management committee usually consists of
General Manager and departmental heads to deal with current problems.
 5. Product Type:
Certain companies produce different varieties of products and it is advantageous to boost the sales on
the basis of product or product groups. A separate product manager is appointed for each product.

6. Market Type (Consumer)

7.  Matrix Type:
Matrix organisation is also known as grid or project organisation. Matrix organisation is created by
merging the two or more complementary organisations, say, purchase section and sales section. A
team may be set up within the existing organisation, to conduct a study of a particular product or
design or to complete a specific assignment in time.
Long answer type questions

Ques 1. How is pricing policy formulated ? explain the various methods of pricing a new
product.

Ans 1. Pricing Marketing Mix | Pricing in Four P’s

After product, pricing plays a key role in the marketing mix. The reason for this importance is that
where the rest of the elements of the marketing mix are cost generators, price is a source of income
and profits. Through pricing, the organization manages to support the cost of production, the cost of
distribution, and the cost of promotion.

Simplistically, price is the value measured in money term in the part of the transaction between two
parties where the buyer has to give something up (the price) to gain something offered by the other
party or the seller. Pricing is a complicated element, which needs to reflect supply and demand, the
actual value of the object, and the perceived value of it in the mind of the consumer. A price that does
not reflect these factors and is either too high or too low will lead to unsuccessful sales. This is why
an organization’s pricing will change according to circumstances and time.
Types of Pricing Strategies

Penetration Pricing
A low price is set by the company to build up sales and market share. This may be done to establish
position in a market with pre-existing similar products on offer. Once a position is created, the prices
may be raised. A satellite channel provider may offer an introductory price and then increase as
business grows.

Skimming Pricing
Here, the initial price is set high and may slowly be brought down. This will allow the company to
introduce the product step by step to different layers of the market. Electronic and tech gadgets often
start at a very high price which is subsequently lowered with the lowest point reached right before a
new model is launched.

Competition Pricing
When trying to go head to head with competitors offering similar benefits, a company may decide to:
a. price higher to create a higher quality perception or to target a niche market
b. price the same to show more benefits for the same price
c. price lower to try to gain a wider customer base

Product Line Pricing

Here, different products in the same range may be set at different prices. Television sets are priced
differently depending on whether they are HD or not, whether they have wifi features of not and
whether they are 3D or not.
Bundle Pricing

A group of products may be bundled together and sold at a reduced price. Supermarkets often use this
method through their ‘buy one get one free’ offers.

Psychological Pricing
Often a company will make small changes to prices to make a customer think the item is priced lower
than it is. This is often seen in prices ending in 99. For example, an item market 199 will be perceived
as closer in price to 100 than 200.

Premium Pricing
A high price is set to establish an exclusive product of high quality. Designer cars and premium brand
stores are a good example of this type of pricing.

Optional Pricing
A company may add optional extra items within the price to increase a product’s attractiveness. Car
sellers may offer car insurance for the first year for example.

Cost Based Pricing

Simply, a company may determine the exact cost of producing and selling an objective, add a markup
that may be desirable for profits and price accordingly. This method may be used in a changing
industry where even costs of production are unpredictable.

Cost Plus Pricing

A percentage is added to the costs as a profit margin to determine final price.

Ques 2. What are the methods of promotion? Explain in brief the methods of promotion.

Ans 2. Major Methods of Advertising

Brochures or flyers
-- Many desk-top publishing and word-processing software packages can produce highly attractive tri-
fold (an 8.5 inch by 11-inch sheet folded in thirds) brochures. Brochures can contain a great deal of
information if designed well, and are becoming a common method of advertising. (See Writing
Brochures.)

Direct mail -- Mail sent directly from you to your customers can be highly customized to suit their
nature and needs. You may want to build a mailing list of your current and desired customers. Collect
addresses from customers by noticing addresses on their checks, asking them to fill out information
cards, etc. Keep the list online and up-to-date. Mailing lists can quickly become out-of-date. Notice
mailings that get returned to you. This should be used carefully and it can incur substantial cost, you
don't want to inundate your stakeholders with information so make the most of your message.
(See Using Direct Mail and Mailing Lists.)

E-mail messages -- These can be wonderful means to getting the word out about your business.
Design your e-mail software to include a "signature line" at the end of each of your e-mail messages.
Many e-mail software packages will automatically attach this signature line to your e-mail, if you
prefer. (See Netiquette - Techniques and styles of writing e-mail messages andE-mail vs. voice mail.)

Magazines -- Magazines ads can get quite expensive. Find out if there's a magazine that focuses on
your particular industry. If there is one, then the magazine can be very useful because it already
focuses on your market and potential customers. Consider placing an ad or writing a short article for
the magazine. Contact a reporter to introduce yourself. Reporters are often on the look out for new
stories and sources from which to collect quotes. (See Classifieds of Newspapers and Magazines.)

Newsletters -- This can be powerful means to conveying the nature of your organization and its
services. Consider using a consultant for the initial design and layout. Today's desktop publishing
tools can generate very interesting newsletters quite inexpensively. (See Newsletters.)

Newspapers (major) - Almost everyone reads the local, major newspaper(s). You can get your
business in the newspaper by placing ads, writing a letter to the editor or working with a reporter to
get a story written about your business. Advertising can get quite expensive. Newspaper are often
quite useful in giving advice about what and how to advertise. Know when to advertise -- this depends
on the buying habits of your customers. (See Classifieds of Newspapers and Magazines.)

Newspapers (neighbourhood) -- Ironically, these are often forgotten in lieu of major newspapers, yet
the neighbourhood newspapers are often closest to the interests of the organization's stakeholders.
(See Classifieds of Newspapers and Magazines.)

Online discussion groups and chat groups -- As with e-mail, you can gain frequent exposure to
yourself and your business by participating in online discussion groups and chat groups. Note,
however, that many groups have strong ground rules against blatant advertising. When you join a
group, always check with the moderator to understand what is appropriate. (See the groups listed on
the right-hand side, Netiquette - Techniques and styles of writing e-mail messages and E-mail vs.
voice mail.)

Posters and bulletin boards -- Posters can be very powerful when placed where your customers will
actually notice them. But think of how often you've actually noticed posters and bulletin boards
yourself. Your best bet is to place the posters on bulletin boards and other places which your
customers frequent, and always refresh your posters with new and colorful posters that will appear
new to passers by. Note that some businesses and municipalities have regulations about the number of
size of posters that can be placed in their areas. (

Radio announcements -- A major advantage of radio ads is they are usually cheaper than television
ads, and many people still listen to the radio, for example, when in their cars. Ads are usually sold on
a package basis that considers the number of ads, the length of ads and when they are put on the air. .
A major consideration with radio ads is to get them announced at the times that your potential
customers are listening to the radio.

Telemarketing -- The use of telemarketing is on the rise.

Television ads -- Many people don't even consider television ads because of the impression that the
ads are very expensive. They are more expensive than most of major forms of advertising. However,
with the increasing number of television networks and stations, businesses might find good deals for
placing commercials or other forms of advertisements. Television ads usually are priced with similar
considerations to radio ads, that is, the number of ads, the length of ads and when they are put on the
air.

Web pages -- You probably would not have seen this means of advertising on a list of advertising
methods if you had read a list even two years ago. Now, advertising and promotions on the World
Wide Web are almost commonplace. Businesses are developing Web pages sometimes just to appear
up-to-date. Using the Web for advertising requires certain equipment and expertise, including getting
a computer, getting an Internet service provider, buying (usually renting) a Website name, designing
and installing the Website graphics and other functions as needed (for example, an online store for e-
commerce), promoting the Website (via various search engines, directories, etc.) and maintaining the
Website

Yellow Pages --The Yellow Pages can be very effective advertising if your ads are well-placed in the
directory's categories of services, and the name of your business is descriptive of your services and/or
your ad stands out (for example, is bolded, in a large box on the page, etc.). The phone company will
offer free advice about placing your ad in the Yellow Pages. They usually have special packages
where you get a business phone line along with a certain number of ads.

Promotional Activities Through the Media (Reporters, Newspapers, etc.)

Articles that you write -- Is there something in your industry or market about you have a strong
impression? Consider writing an article for the local newspaper or a magazine. In your article, use the
opportunity to describe what you're doing to address the issue through use of your busines

Press kits -- This kit is handy when working with the media or training employees about working
with the media. The kit usually includes information about your business, pictures, information about
your products, commentary from happy customers, etc.

Press releases or news alerts -- They alert the press to a major event or accomplishment and
requesting, e.g., it get included in the newspaper; they explain who, what, where, why and when;
some include pictures, quotes, etc. to make it easier for the reporter to develop an announcement or
story.

Public service announcements (PSA)s -- Many radio and some television stations will provide public
service announcements for non profit efforts. Usually, these PSAs are free.

Other Promotional Activities and Events

Annual reports - Disseminate these to key stakeholders; they're ripe with information if they include
an overview of your year's activities, accomplishments, challenges and financial status.

Collaboration or strategic restructuring - If you're organization is undertaking these activities,

celebrate it publicly.

Networking - Spread the word to peers, professional organizations and those with whom you interact
outside the organizations, e.g., educators, consultants, suppliers, clients, etc. (See Networking.)

Novelties -- It seems more common to find ads placed on pens and pencils, coffee cups, T-shirts, etc.
These can be powerful means of advertising if indeed current and potential customers see the
novelties. This condition often implies additional costs to mail novelties, print T-shirts, etc.
Presentations -- You're probably an expert at something. Find ways to give even short presentations,
for example, at local seminars, Chamber of Commerce meetings, trade shows, conventions, seminars,
etc. It's amazing that one can send out 500 brochures and be lucky to get 5 people who respond. Yet,
you can give a presentation to 30 people and 15 of them will be very interested in staying in touch
with you.

Ques 3. What is marketing research ? explain the process of marketing research.

Ans 3. Marketing research

The systematic and objective process of generating information for aid in making marketing
decisions.

Process of marketing research

Stage 1: Formulating the Marketing Research Problem

Formulating a problem is the first step in the research process. In many ways, research starts with a

problem that management is facing. This problem needs to be understood, the cause diagnosed, and

solutions developed.

We will determine if the lack of sales is due to:

 Poor expectations that lead to a general lack of desire to buy, or

 Poor performance experience and a lack of desire to repurchase.

What then is the difference between a management problem and a research problem? Management

problems focus on an action. Do we advertise more? Do we change our advertising message? Do we

change an under-performing product configuration?

If so, how?

Research problems, on the other hand, focus on providing the information you need in order to solve

the management problem.

Stage 2: Method of Inquiry

The scientific method is the standard pattern for investigation. It provides an opportunity for you to

use existing knowledge as a starting point and proceed impartially.

The scientific method includes the following steps:

1. Formulate a problem

2. Develop a hypothesis

3. Make predictions based on the hypothesis

4. Devise a test of the hypothesis

5. Conduct the test

6. Analyze the results

The terminology is similar to the stages in the research process. However, there are subtle differences

in the way the steps are performed. For example, the scientific method is objective while the research

process can be subjective.

Objective-based research (quantitative research) relies on impartial analysis.

The facts are the priority in objective research. On the other hand, subjective-based research

(qualitative research) emphasizes personal judgment as you collect and analyze data.

Stage 3: Research Method

In addition to selecting a method of inquiry (objective or subjective), you must select a research

method.

There are two primary methodologies that can be used to answer any research question: experimental

research and non-experimental research.

Experimental research gives you the advantage of controlling extraneous variables and manipulating

one or more variables that influences the process being implemented. Non-experimental research

allows observation but not intervention.

You simply observe and report on your findings.

Stage 4: Research Design

The research design is a plan or framework for conducting the study and collecting data. It is defined

as the specific methods and procedures you use to acquire the information you need.

Stage 5: Data Collection Techniques

Your research design will develop as you select techniques to use. There are many ways to collect

data. Two important methods to consider are interviews and observation.

Interviews require you to ask questions and receive responses.

Common modes of research communication include interviews conducted face-to-face, by mail, by

telephone, by email, or over the Internet. This broad category of research techniques is known

as survey research.

These techniques are used in both non-experimental research and experimental research.

Another way to collect data is by observation. Observing a person’s or company’s past or present

behavior can predict future purchasing decisions. Data collection techniques for past behavior can

include analyzing company records and reviewing studies published by external sources.

The way you record the data changes depends on which method you use.

Stage 6: Sample Design

Your marketing research project will rarely examine an entire population. It’s more practical to use

a sample—a smaller but accurate representation of the greater population. In order to design your

sample, you must find answers to these questions:

1. From which base population is the sample to be selected?

2. What is the method (process) for sample selection?

3. What is the size of the sample?

Once you’ve established who the relevant population is (completed in the problem formulation stage),

you have a base for your sample. This will allow you to make inferences about a larger population.

There are two methods of selecting a sample from a population: probability or non-probability

sampling.

The probability method relies on a random sampling of everyone within the larger population.

Non- probability is based in part on the judgment of the investigator, and often employs convenience

samples, or by other sampling methods that do not rely on probability.

The final stage of the sample design involves determining the appropriate sample size. This important

step involves cost and accuracy decisions. Larger samples generally reduce sampling error and

increase accuracy, but also increase costs.

Stage 7: Data Collection

Once you’ve established the first six stages, you can move on to data collection.

Depending on the mode of data collection, this part of the process can require large amounts of

personnel and a significant portion of your budget. Personal (face-to-face) and telephone interviews

may require you to use a data collection agency (field service).

Internet surveys require fewer personnel, are lower cost, and can be completed in days rather than

weeks or months.

Regardless of the mode of data collection, the data collection process introduces another essential

element to your research project: the importance of clear and constant communication.

Stage 8: Analysis and Interpretation

In order for data to be useful, you must analyze it.

Analysis techniques vary and their effectiveness depends on the types of information you are

collecting, and the type of measurements you are using. Because they are dependent on the data

collection, analysis techniques should be decided before this step.

Stage 9: The Marketing Research Report

The marketing research process culminates with the research report.

This report will include all of your information, including an accurate description of your research

process, the results, conclusions, and recommended courses of action. The report should provide all

the information the decision maker needs to understand the project.

It should also be written in language that is easy to understand. It’s important to find a balance

between completeness and conciseness. You don’t want to leave any information out; however, you

can’t let the information get so technical that it overwhelms the reading audience.

The summary report, as its name implies, summarizes the research process and presents the findings

and conclusions as simply as possible. Another way to keep your findings clear is to prepare several

different representations of your findings. PowerPoint presentations, graphs, and face-to-face reports

are all common methods for presenting your information.

Along with the written report for reference, these alternative presentations will allow the decision

maker to understand all aspects of the project.

Ques 4. What do you mean by buyer motive? Explain how does the consumer behaviour affect
the buying decisions .

Ans 4. BUYING MOTIVES

It is the buying motives which induce a consumer to buy a particular product. A lady may buy a sari
for physical protection or for wearing something to look beautiful or as a status symbol. Thus buying
motive is a strong feeling, instinct, desire or emotion that make the buyer to buy a product.
According to D J DUNCAN, “ buying motives are those influences or considerations which provide
the impulse to buy, induce action or determine choice in the purchase of goods and services.” In short,
a buying motive is the reasons why buyers buy.

TYPES OF BUYING MOTIVES

 Emotional and Rational motives.
 Product and Patronage motives.
 Inherent and Learned motives.
 Psychological and Social buying motives.

CONSUMER BEHAVIOUR

The study of consumer behaviour is the study of how individuals make decisions to
spend their available resources ( time, money, effort ) on consumption related items.
In the words of Walters and Paul “ consumer behaviour is the process whereby
individuals decide what, when, where, how and from whom to purchase goods and services.”

FACTORS INFLUENCING CONSUMER BEHAVIOUR/ BUYING DECISIONS

(DETERMINANTS OF CONSUMER BEHAVIOUR)
All factors which determine the buying or consumer behaviour are broadly classified into six.
 Psychological factors
 Social factors
 Cultural factors
 Personal factors
 Economic factors
 Environmental factors.

Psychological Factors
The following are the important psychological factors:

1) Consumer Needs and Motivation: All buying decisions start with need recognition. People
always seek to satisfy their needs. When need is not satisfied it drives people to satisfy that
need. Then the need becomes a motive. Thus motive arises from needs and wants. The force
that converts needs into motives is called motivation.

2) Perception: It is the process of selecting, organizing and interpreting information in order to

give meaning to the world or environment we live in. the way the consumers display selective
attention, distortion or retention motivates marketers to design the product, package,
 promotional themes etc. The marketers should understand the consumer perception and
convert perception into a buying response.

3) Learning: Learning is the process of acquiring knowledge. Generally, learning results in four
ways- Listening, Reading, Observing and experiencing. The importance of learning theory for
marketers is that they can create demand for a product by associating it with strong drives,
using motivating cues and providing positive reinforcement.

4) Belief and Attitude: A belief is a descriptive thought that a person holds about something.
Such thoughts are based on learning, opinion or faith. For example, A consumer believes that
Maruti cars are less costly and fuel efficient. Attitude means a person’s feelings towards a
particular object or situation.

Social Factors
The major social factors are as follows:

1) Reference Group: consumer behaviour is influenced by various groups within society known as
reference groups. We have several reference groups with whom an individual associate such as
friends, relatives, classmates, club memberships etc. In each groups there is an opinion leader whose
style is adopted by others. Marketers often identify such opinion leaders and develop advertisement
featuring them as endorsers.

2. Role and Status: A person takes up many roles in different situations in his /her life. He can be
son, father, husband, employee etc. Each role has a status. A person’s role and status influence his
general as well as buying behaviour.
3) Family: Family is one of the important factors influencing buying behaviour

Cultural Factors

Culture determines and regulates our general behaviour. The major cultural factors are as follows:

1) Culture: Culture simply refers to values and beliefs in which one is born and brought up. It is
a set of Ideas, Customs, Values, Art and Belief that are produced or shaped by a society and
passed on from generation to generation. Culture influence what we eat and wear, how we
relax and where we live etc.

2) Sub-Culture: It is based on religion, language, geographic region, nationality, age etc. It is a

segment within a large culture that shares a set of beliefs, values or activities that differ in
certain respects from those of the main or overall culture. The food habits are different in
different parts of India.

3) Social Class: A social class is a group of people with similar values, interest and behaviour
within a society. Consumers buying behaviour is determined by the social class to which they
belong rather than by their income alone. The social class is based on income, education,
occupation, family history, wealth, lifestyle, area of residence etc.

Personal Factors
Personal factors are unique to a particular person. These factors include demographic factors and are
as follows.
1) Age: Need and wants are determined by age. So buying changes with age, Taste for food, clothing
and recreation etc. changes with age.
2) Stages in the Life Cycle: People buy different goods during different life cycle stages. Life cycle
of an individual refers to the different phases of his or her life.

3) Occupation and Economic Status: Occupation influences product choice, brands beliefs etc. It
determines income, buying power and status.

4) Life Style: It indicates how people live, how they spend their time, how and what they choose and
where they shop. It is the way people eat, drink, spend leisure time, work and so on.

5) Personality: Personality refers to the unique psychological characteristics of an individual.

Personality of consumers influences brand preference and choice of products.

6) Self-Image: Self image implies what one thinks of himself/herself .It is the way one sees
himself/herself or wishes to see himself/herself or wants to be seen by others. Self-concept is an
important factor to marketers in planning advertising campaign.

Economic Factors
The various economic factors which determine consumer behaviour are as follows:
1) Personal Income: Gross income of a person is composed of disposable and discretionary income.
When disposable income rises, the expenditure on various items will increase and vice versa
.
2)Family Income: It is the aggregate income of all members of a family. The family income
remaining after the expenditure on the basic needs of the family is made available for buying goods,
durables and luxuries.

3) Income Expectations: If a person expects any increase in his income he will buy durables on hire
purchase etc, if his future income is likely to decline he will restrict his expenditure to bare
necessities.
4) Savings: When a person decides to save more, he will spend less on comfort and luxuries.
5) Liquidity Position: If an individual has more liquid assets, he goes in for buying comfort and
luxuries.
6) Consumer Credit: If Consumer Credit is available on liberal terms, expenditure on comfort and
luxuries
will increase.