Developing Credibility and Raising Visibility - Assignment Example

Marketing and Marketing Communications Part-I (Five questions to be answered out of ten) Ans-2: Difference between Scientific and Heuristic budget setting approaches The scientific approach divides the task into sub-tasks while Heuristic approach is basically a trial and error approach Scientific approach simulates the budgeting in advance, while heuristic approach believing in comparing the costs and revenue at different levels. Scientific approach studies the competitors in advance while heuristics adopt appropriate steps on observing the market reaction. Scientific approach devises marketing communication strategies in advance, while heuristic approach devises the market communication strategy once the initial market reaction is felt. Ans-5: Nine steps for a typical agency selection process Step-1: Gathering data about the marketing communication strategies Step-2: Screening of agencies. Comparing and analyzing the information. Step-3: Short-listing some agencies. Step-4: Preliminary talks with the agency Step-5: Chemistry check i.e. negotiations with the agency Step-6: Negotiation of costs/ compensations for the task/s. Step-7: Showcasing the strengths and opportunities of the company Step-8: Taking a look at some sample work of the agency Step-9: Sealing the deal Ans-6: Turning Features into Benefits Translating the technical aspects into behavioral one's Listing out the benefits in the product for the customer How to communicate the features e.g. language, medium etc. What does the customer gets out of the product/ service These benefits are uncovered from; Company's standing in the market Product differentiation strategies Bold and honest statements/ communications from the company Ans-8: Ladder of Loyalty It is a means of communicating with niche market. Advocate Someone who refers other people to your business. Regular A repeat purchaser. Customer Someone who has purchased. Prospect Someone who is interested in purchasing. Ans-9: Developing Credibility and Raising Visibility Developing creditability is a long drawn process and there are no short cuts Raising visibility means being visible all over the media space, shopping malls etc. Credibility development requires investment of time and other resources to gain the goodwill and confidence of the customer Raising visibility requires the same press release appearing in all credible newspapers, the same commercial over all television channels, the same radio jingle over all radio channels, similar hoardings in all important shopping malls etc. Credibility calls for faultless service to the customer. It requires adherence to quality and reliability. Recently Honda Motor Company, Japan's second largest auto maker, recalled 298,231 cars in Japan to repair a fault in the fuel pump relay that could have stopped the engine. In the recent past Microsoft launched its Windows Vista operating software amidst much fanfare and media glare, which raised the level of visibility for the product. Part-II (Three questions to be answered out of six) Ans-2: Internal and External factors influencing Pricing decisions Pricing is a very crucial aspect for managing the business. While carrying out the pricing decisions, a company has to take a comprehensive look at all its internal factors as well as the prevailing market scenario, economic policies and legal framework for the market and the product. Most of the companies begin pricing deliberations based on their own internal cost structures. Internal factors affecting the pricing decisions are basically the profit and cost factors. How the company arrives at the total cost of the product and how much profit is expected from the product makes. In general costs are divided in two components fixed costs and variables costs. Costs of labor, material, energy, supervision, R&D contribution, marketing, administrative, transportation, taxes, channel costs, factory overhead etc. are some of the internal cost components which form part of the pricing decision. On the other hand external factors affecting pricing decisions include the existing pricing strategy resorted to by the competitors/ alternative products, market profile, customer's buying power, geographical conditions, economic policies prevailing in the country/ market, legal provisions for carrying out business in the market, acceptability of the product in the market, number of competitors and their profit margins etc. Tender Pricing: This type of pricing is based on actual costs of different sub tasks in producing the product. Tenders are invited for carrying out the subtasks and then the company chooses the best (generally minimum cost) tender. The process of tendering is generally a secret affair so that all competing firms can have level play ground. The final price is then decided based on all such costs. Psychological Pricing: This type of pricing strategy is devised when the company plays with the perceptions of the consumer. To some extent this type is similar to value pricing, so high value goods are priced according to what the consumer 'thinks' should be the price. At times the company has to place a product in the market at low prices though its cost is much high. Similarly, a low cost product is at times priced high because it gains in status as a premium product in the perception of the consumer. Ans-4: Role of Sales Promotion in overall Promotion mix Producing a quality product or service in itself doesn't guarantee bright business opportunity. The prospective customer also requires to be informed and educated about the availability of such a product and its features. This task is achieved by promotion and public relations (PR) strategists. Though in today's context marketing and marketing communication has assumed a very crucial but the existence of promotion as an important part of marketing has even by accepted by McCarthy way back in 1960s. Traditional marketing mix concept, first proposed by McCarthy in 1960, consists of Product, Price, Place and Promotion (better known as the 4Ps). Promotion mix in general comprises of Personal selling, Advertising, Publicity and sales promotion. Sales promotion plays a big role in complementing the promotional mix elements during a specific time period. Any activity material used as a direct inducement to purchase is known as sales promotion. Offering free samples, buyback offers, buy one get one free offers, contest, games, sweepstakes, offering incentives to sales-force on surpassing targets, offering incentives to wholesalers and retailers etc. are all sales promotion activities. Sales promotion is directed towards the sales force of the company, customers, wholesalers and retailers. Sales force, wholesalers and retailers are induced by offers of bonuses, percentages and incentives for doing brisk business for the company. For customers the sales promotion activities include multiple purchase offers, frequent user incentives, product placements/ tie-ins etc. Sales promotion can be classified as; Promotional pricing: This includes price reductions, free samples, tied goods, discounted price for next purchase, loss leader pricing, cheap credit etc. It has been observed that if the product is of good quality and offering better alternative then such promotional activities are very much effective. Non price promotions: Activities like contests, free gifts, multi brand promotional schemes, buyback offers, guarantees for free replacement/ service etc are known as non price promotions. While these types of sales promotion schemes help in generating awareness level about the product, it also helps the customer in judging the product for its stated features and quality. Sampling: This is a very expensive sales promotions activities and taken up when the company plans to take the competitors head one in an aggressive manner. Distributing free samples of the product in the initial stages of the product launch helps in generating immediate awareness about the product. Such a strategy proves effective only if the company has a long term plan ready to fulfill the demand generated after the free sampling. Ans-6: Market Coverage Strategies A market is divided into different segments based on buyer's profile, market profile, location etc. It is practically impossible for any company to cover all the segments in the market. Therefore, companies adopt market coverage strategies for evaluating various segments of the market and then zero-in on particular segment/s to cover them. There are in general three types of market coverage strategies; i. Undifferentiated Marketing: Theoretically this strategy focuses on the entire market without differentiating between them and ignoring segmentation variables. But in practice, this strategy involves segmenting the market in a broad manner, without going into minute details. Such a strategy is resorted to by the company when there is no history of such a product in the past. For example the space travel offers by Virgin airways have been made to everybody around the world in equal measure. But the strategy is meant only for affluent people in the society having good amount of money to spend on such a space jamboree. ii. Differentiated Marketing: In such marketing efforts the company tries to cover single or multiple market segments by carefully selecting these segments against some criteria while leaving the other segments. Different types of promotional schemes are offered for different segments. For example, Reebok implements differentiated market coverage option for its sports range of shoes, while offering the jogger shoes to the general public. iii. Concentrated Marketing: In this strategy, the company plans out aggressive marketing campaign for a narrow segment of the market. This type of market coverage strategy is resorted to when the company seeks to gain a large share of the small market. For example the micro light aircraft segment is meant for a miniscule hobbyists or enthusiasts around the globe and there are a limited number of companies producing such aircrafts. Read More