Discuss the role, relevance and responsibilities of sales personnel ...

Discuss the role, relevance and responsibilities of sales personnel in the following situation.
i) Salesmen selling medical equipments (capital goods)
ii) Salesmen selling space (publications)

ROLE OF PERSONAL SELLING:-
Personal selling, as the name implies, is an individual to individual selling. It therefore, caries the distracter advantage of deniability in terms of tailoring the sales presentation to the needs of the buyer - Another unique advantage comes from it 2 - way communication, and human interaction thereby providing instant feedback. These 2 unique advantages makes personal- selling the most result - oriented promotion method.
The nature or goods marketed; as well as the distribution system adopted; determine the role of personal selling in a firm. Therefore; personal selling is used entirely in the case of Industrial Goods; where the sales person performs functions such as assisting the customer in designing the product specification, product installation; product commissioning; solving technical problems through providing service after sales & helping customers to have optimal product utilisation. In the case of consumer goods; the role of personal selling gets restricted to the dealer level.
The scope of the tasks performed include obtaining periodic orders ensuring supplies; offering types to dealers on the product display &; attaining desired levels of stick movement. Similarly, the role played by personal selling is more is a firm, which uses door-to-door-selling method through its sales force than is the form which sells through large stockiest, distribution or sale-selling agents.
Not without ending, the varying role of personal selling is the strategies followed by different companies, the nature of the selling function, requires that the following tasks be performed:
(1) Sales generation •
(2) Feedback & market information collection
(3) Provision of customer service coming aspects such as delievery of goods. Warranty administration, timely availability of repair to spares
(4) Performances of sales support activities such as monitoring distribution function credit collection, improving dealer relations, implementing promotional programmes. Thus personal selling makes use of direct personal communication to influence the target customers.
Now before discussing the selling styles one point should be noted that only well developed and established companies have reached to consultant stage level, every discussed here are used in Indian companies. Table shows the activities relevant to the use of each strategy.

The Changing Roles of the Sales Representative



Strategies for Selling
Activities




Business Management

• Manage accounts and Territory strategies as a strategic business units
• Invest time and expenses in the most profitable opportunities
• Sell to meet the clients total system and long term needs. Be a consultant


Client Profit-Planning Strategies
• Become part of the clients' plan ' Expand to other department ' Find new uses for your product
• Services are an important part of"the offer at this point
• The customer become a client
' Perceive, classify and serve the customer's needs


Negotiation Strategics
Persuasion Strategies
Communication Strategies
' The product is adjusted to meet the customer's need
• The representative understands the immediate and narrow needs of the customers
• The representative tries to fit the customers into the existing product mix by skillfully overcoming objections.
' The representative is a personal communication, providing product and service information close to the point of the buying decision


Communication Strategies: At the lowest level of personal selling, the sales representative is an alternate medium for communicating information about the product or service offered by company. The only strategy appropriate for increasing sales at this level is walking more and talking more. There is little reason to use representatives as a communication medium when there are alternative mass communication media like press, radio, and television available.
Persuasion Strategies: The persuasion level requires the sales representatives to go beyond the role of a mere communicator to the role understanding at the immediate and narrow needs of the customers. At this stage, the sales representative tries to fit the customer into the existing product or service mix by skillfully anticipating and overcoming objection. This is what Indian market is experiencing.
Negotiation Strategies : During negotiation, the product and commercial terms are adjusted to meet the customer's needs rather than just attempting to skillfully overcoming objections as practiced in previous stages. The critical skill at this stage of selling is analysing and understanding the customer needs and determining how the company's products and services can meet these needs. At this point, the customer becomes a client and the process of consultative selling begin.
Client Profit-planning Strategies : In India , client profit -planning strategy is applicable in industrial product selling . The representative is put to work with clients team to learn about profit-planning system, product, finance, marketing, research and development and future plans etc. So that the product meeting the client's needs could be developed.
Business Management Strategies : At this stage professional representative is responsible for managing territory as a strategic business unit-investing time and expenses in most profitable manner. Few Indian Companies are using a system of national account management (like Modi Xerox) in which manager is responsible for all sales to few key accounts. Territory representatives along with sales managers and accounts managers develop business strategies and bottom line responsibility to meet objectives of the organisation.
A salesman following these steps will have a higher chance of being successful with his customers. In sharp contrast to selling activity, a sales supervisor performs the function of managing the sales staff. This is a very important aspect. It is at times thought that good salesman can make good sales manager. This job changes in emphasis to that of managing, which consists of (i) planning and goal setting, (2) organizing, (3) motivating, and (4) controlling his subordinates. Thus the job has changed from 'doing' to "getting things done through people". Of course, it is true that many sales managers continue to perform he selling function and provide necessary support

Distinguish and bring out the major differences between sales planning and sales forecasting.

Distinguish and bring out the major differences between sales planning and sales forecasting. Why and when firms should undertake sales forecasting task. Explain citing two examples.


Differences between Sales Planning and Sales Forecasting
Sales Planning is an integral part of the overall Sales Department; let us try to understand the concept of Sales Management in brief. The concept and the role of Sales Management has been evolving over the years.
There was a time when selling the goods was no problem at all. Orders for goods produced, were always on hand even before the goods were actively produced. The problem was to produce enough goods so as to meet the demand of nereby customers. Maximum time of the management was devoted to manufacturing problems, while selling and marketing were handled on a part-time basis.
With the increase in production and setting-up of large-scale organisations, the problems of market expansion started cropping-up. Total production of goods went so high that nereby customers could not absorb the goods produced, but even under such circumstances other departments took precedence over Sales Management.
The other department which were preferred over Sales Management, were manufacturing and financial department. It was after these departments were set-up that the Sales Management came into being.
As the companies, business and market expansion increased, the distance between its customers and the company also went on increasing. It was here that the problem of communication with its customers, on a regular basis, came up. This function of communication and other aspects of marketing therefore was also assigned to Sales Management.
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Interestingly, as more and more goods were produced, the differentiation between the similar goods of different manufacturers started becoming more and more difficult. Thus a need for the specialised job functions of advertising, promotion, marketing research etc. was felt. Though initially all these functions (now assigned to of marketing Management) were assigned to Sales Management, later on separate specialised functional departments for these functions were created and grouped under the Marketing Manager rather than a Sales Manager.
Thus, we can very well infer, that the meaning of Sales Management has been undergoing a change over the years. Initially it meant the market expansion and the management of sales force. Later on all the marketing activities like advertising, sales promotion, marketing research, pricing etc. were also assigned to it. But still later the term Marketing Management was used to define the broader Concept and the term Sales Management was defined as "Planning, Direction, and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating the sales force. "When looked from the top and given an overall view, the Sales Management is responsible for organising the sales process, both within and outside the companies. Inside the organization, it builds an informal organisation structure, which ensures effective communication not, only inside the sales department but also in its relations with other organisational units. And outside the company, the Sales Management has to service as the company's representatives above, the Sales Management is responsible for some other important functions too. Some of these functions are important in making some key marketing decisions such as budgeting deciding the objective, sales force size, territories etc. .
Sales forecast:
A sales forecast predicts the value of sales over a period of time. It becomes the basis of marketing mix and sales planning.
A short-term sales forecast (say for a period one year) when linked to the sale budget helps in the preparation of an overall budget for the firm as a whole. The short-term sales forecast in effect also provides the essential financial dimension to sales in terms of expected sale revenue and their sources.
A long-term sales forecast (say for a period of 5 years or so) on the other hand, focuses on capital budgeting needs and process of the firm. It provides for changing the marketing strategy of the firm, if needed, and includes reference to emerging product market needs, new market segments to be catered, review of distribution network and promotional programmes, organisation of salesforce, and marketing set up. The long-term sales forecast triggers the task of aligning the production, procurement, financial and other functional needs of the firm with the finalized sales forecast.
The rapid developments in computer hardware and software has made it possible for managers to make sophisticated forecasts with the help of computers. The greatest advantage of this is that managers can introduce subjective inputs into the forecast and immediately test their effects.
Specifically, the last few years have seen sophisticated forecasting models being rewritten using Spread Sheet software programmes for personal computers. Lotus 1 -2-3 and Microcast programmes are now available at reasonably affordable prices. Developments in the computer field especially in computer artificial intelligence systems have also enabled the development of expert systems models i.e., the model that the experts use in making a decision. These are of great us"e when judgement is an important part of the forecast. In future, we are going to see greater use of computers in sales forecasting in India.
In order to achieve forecasted sales and planned profits, a certain level of sales inputs are a must. The required sales inputs when expressed 'in monetary term result in the preparation of the sales budget. Since the sales inputs have to be deployed in anticipation of the sales results which may not be achieved on the expected lined suggest caution to be exercised while expending the sales budget.
Profitable marketing suggests a break up of the sales budget on product-wise, territory sales wise and time-period-wise in the first instance. The second basic requirement relates to close monitoring of the actual sales against the targets on a continuing basis.
The thumb rule is that not more than 40 per cane of the sales budget should be spent in the first six months of the budget year. The underlying logic is that since a sales forecast is based on assumption sales efforts should be spent in conjunction with the culmination of reality as assumed.
The dynamic nature of the market, therefore, requires that the managers must feel the pulse of the market particularly with regard to customer behaviour, competitors plans and reactions as well as the way the market environment unfolds itself. In case the market reality is markedly different form the forecasted one a thorough probe and necessary modification may be required in the deployment of sales inputs budget and even in the profit plan.
In a nutshell, sales forecasting should be treated as a dynamic activity particularly in relation to the sales budget and profit plan of the firm. For, if forecasting is not practised as a dynamic activity then there may be little to regulate the continued use of sales budget and erosion of profitability. It is important, therefore, to use simple yet comprehensive sales information formats to monitor the market and conduct sales analysis at a regular periodicity.

Rationalize the reasons for organizing sales promotion activities periodically by Firms.

Rationalize the reasons for organizing sales promotion activities periodically by Firms. Pickup any two firms/products which in the recent past has organized sales promotion activities and discuss their success stories.

Sales promotion, a key ingredient in marketing campaigns, consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular product or services by consumers or the trade. Sale promotion expenditure have been increasing as a percentage of budget expenditure annually for the last two decades. Several factors contribute to this rapid growth, particularly in consumer markets. Promotion is now more accepted by top management as an effective sales tool; more products managers are qualified to use sales-promotion tools; and product managers are under pressure to increase current sale. In addition, the number of brands has increased; competors use promotions frequently; many brand are similar; consumers are more price oriented; the trade has demanded more deals from manufacturers; and advertising efficiency has declined because of rising costs, media clutters, and legal restraints. The rapid growth of sales promotion media has created clutter- for instance, by offering larger coupon-redemption values or using more dramatic point-of-purchase displays or demonstrations.
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A perusal of the list of the product groups, which emerged as the major users of sales promotion, and from the market feel, it seems clear that a transformation from the seller to buyer market is taking place and marketing has become more competitive in these product markets. In addition to increasing competition. The reasons for organizing sales promotion activities periodically by firms are many:
• Sales promotion makes an immediate effect on sales.
• Measurement of the effectiveness of sales promotion is easier as against the other promotional methods.
• Channels of distribution are emerging as powerful entities and demand greater use of incentives to get desired results.
• Products are becoming standardized and similar, and so need increased support of non-price factors of which sales promotion is an important one.
• Impulse buying is on the increase, and so is the rise in the number of marginal customers. With virtually no brand loyalty, offer of attractive schemes help manufacturers to induce such customers to choo'se their product.
• Sales promotions do not tend to yield new, long term buyers in mature markets because they attract mainly deal- prone consumers who switch among brads as deals become available.
Akai, a Japanese manufacturers of stereo equipment and TV sets, managed to become a TV- set market leader in India by running value —added sales promotion. It offered good trade-in value on black- and -white TV sets at the purchase of a new color TV sets. At other times it would offer a free watch, or calculator or radio, along with the purchase of TV sets. This steady promotion made AKAI a very popular brand in India and competitors such as Sony were not free to compete in the same way. The major users of promotion are: tea, coffee, and beverages, soaps, toiletries, detergents and washing soaps; tooth paste; textiles; food products and baby; foods; house hold remedies; and consumer durables like fans , refrigerators, sound systems television and house hold appliances.

Distinguish costing from pricing.

Distinguish costing from pricing. Discuss the determinants of pricing. Suggest pricing structure you would recommend for the following:
i) Molded luggage
ii) Premium ceiling fans

There is a popular belief that costs determine price. It is because the cost data constitutes the fundamental element in the price setting process. However , their relevance to the pricing decision must neither be underestimated nor exaggerated . For setting prices, apart from costs, a number of other factors have to be taken into considerations . Demand is of equal, and, in some cases, of greater importance than costs. An increase in cost may appear to justify an increase in prices yet the demand situation may not permit such possible, even without any increase. On the other hand, an increase in demand may make increase in prices possible, even without any increase in costs.
very often, price determines the cost that may be incurred. The product is tailored to the requirements of the potential consumers and their capacity to pay for it. The radio manufacturers in India realized that if they have to capture the mass market prevailing in India, they have to price it at low level, which could be done only by reducing costs-reducing the number of wave bands in the radio. And now a single wave radio is available at around Rs. 100. Given the price, we arrive at the cost working backwards from the price consumers can afford to pay. Over a period, cost and quality are adjusted to the given price.
If costs were to determine prices, why do so many companies report losses? There are marked differences in costs as between one producer and another. Yet the facts remains that the prices are quite close for a somewhat similar product. This is, if anything, is best evidence of that costs are not the determining factor in pricing.
Price decision cannot be based merely on cost. It is very difficult to measure costs accurately. Cost are affected by volume , and volume is affected by price .The management has to assume some desired price and volume relationship for determining costs. That is why cost plays even a less important role in case of new products as compared to existing products. It is not possible to determine costs without having an idea of what volumes or numbers can be sold. But, since there is no experience of volumes, costs and prices, one starts with the going market price for similar products.
All this discussion does not purpose to show that costs should be ignoured altogether while setting prices. Costs have to be taken into consideration. In fact, in the long run,if costs are not covered, manufacturers will withdraw from the market and supply will be reduced which, in turn, may lead to higher prices. The point that needs emphasis is that cost is not the only factor in setting prices. Cost must be regarded as only as an indicator of the price which ought to be set after taking into consideration the demand , the competitive situation, and other factors.
Costs determine the profit consequences of the various pricing alternatives. Cost calculations may also help in determining whether the product whose price is determined by its demand is to be included in the product line or not.
DETERMINANTS OF PRICING
Pricing decisions are usually determined by cost, demand and competition. We shall discuss each of these factors separately . We take demand first.
Demand
The popular 'Law of demand' states that "higher the^price, lower the demand , and vice versa , other things remaining the same". In season, due to plentiful supplies of certain, agricultural product, the prices are low and because of low prices, the demand for them increases substantially .You can test the validity of this law yourself in your daily life. There is an inverse relationship between price and quality demanded. If price rises, demand falls and if the price falls, the demand goes up. Of course, the law of demand assumes that there should be no change in the other factors influencing demand except price. If any one or more of the other factors, for instance, income, the price of the substitutes, tastes and preferences of the consumers, advertising, expenditure etc However, there are important exceptions to the law of demand.
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There are some goods, which are purchased mainly for their 'snob appeal'. When prices of such goods rise, their snob appeal increases and they are purchased in larger quantities .On the other hand, as the price of such goods falls, their snob appeal and, therefore, their demand falls. Diamonds provide a good example.
In the speculative market, a rise in prices is frequently followed by larger purchases and a fall in prices by smaller purchases. This is specially applicable to purchasers of industrial raw materials.
More important than the law of demand is the elasticity of demand. While the law of demand tells us the direction of change in demand , elasticity of demand tells us the extent of change in demand . Elasticity of demand refers to the response of demand to a change in price.
It is necessary for the marketers to know what would be the reaction of the consumers to the change he wishes to make in the price. Let us take some examples . Smokers are usually so addicted to smoking that they will not give up smoking even if prices of cigarettes increase. So also the demand fro salt or fro that matter of wheat is not likely to go down even if the prices increase. Another example of inelastic demand is the demand for technical journals, which are sold mainly to libraries. On the other hand , a reduction in the price of television will bring in more than proportionate increase in demand . some of the factors determining the price-elasticity of demand are the nature of the commodity, whether it is necessity or luxury, extent of use, range of substitutes, urgency of demand and frequency of purchase of the product.
The concept of elasticity of demand becomes crucial when a marketer is thinking of lowering his price to increase the demands for his product and to get a larger market share. If the increase in sale is more than proportionate to the decline in price, his total sale proceeds and his profits might be higher. If the increase in sales is less than proportionate, his total sales proceeds will decline and his profits will definitely be less. Thus knowledge of the elasticity of demand for his products will help a marketer to determine whether and to what extent he can cut the prices or pass on the increase in costs to the consumer.
It may also be noted that the price elasticity of demand for a certain commodity and the price elasticity of demand for a certain commodity' may be radically different. For example, while the demand for cigarettes as such, may be highly in elastic, the price elasticity of demand for four square or charms' may be highly elastic. The reasons fro this are weak brand loyalty and the availability of substitutes.
Competition
The degree of control over prices, which the sellers may exercise, varies widely with the competitive situation in which they operate. Sellers operating under conditions of pure competition do not have any control over the price they receive. A monopolist, on the other hand may fix prices according to his discretion. The marketer, therefore, needs to know the degree of pricing discretion enjoyed by him. Let us take up each of these cases individually.
Perfect competition is said to exist when (i) there are a large number of buyers and sellers,(ii) each purchasing and selling such a small quantity that their withdrawal from the market will not affect the total demand and selling,(iii) the pproducts sold by sellers are homogeneous in nature.
Prices under perfect competition are determined by the forces of supply and demand. Prices will be fixed at a point where supply and demand are at an equilibrium. This is illustrated in the following fig.





In pure competition , all that the individual seller can do is to accept the price prevailing in the market, i.e. he is in the position of a Price Taker . If he wants to charge a higher price, buyers will purchase from other sellers. And he need not charge less since he can sell his small supply at the going market price.
Under monopoly , a single producer has complete.control of the entire supply of a certain product. Railways and telephones are examples of monopoly. The main features of monopoly are(i) there is only one seller of a particular good or service and (ii) rivalry from the producers of substitutes is so remote that it is almost insignificant.As a result, the monopolist is in a position to set the price himself. Thus , he is in the position of a Price Setter.
However, even in the case of monopoly, there are limits to the extent to which he can increase his prices. Much depends on the elasticity of demand for the product.This , in turn, depends on the extent of availability of substitutes for the product. And in most cases, there is rather an infinte series of closely competing substitutes . Even railways and telephones organizations must take into account potential competitrion by alternative servicesa-railways may be substituted by motor transport and telephone calls by telegrams. The closer the substitutes and greater the elasticity of the demand for a monopolist's product,the less he can raise his price without frightening away his customers. High price of oil has led to development of alternative sources of energy.
Monopolist are constantly tending the break down due to the following reasons.(i) shifts in consumer demand ,(n) continuous process of innovations and technological developments leading to development of substitutes, (iii) lack of stimulus to effiency provided by competition, (iv) entry of new competitors, and (v) intervention by governments.
Oligopoly is a market situation characterised by a few sellers, each having an appreciable share in the total output of the commodity . Example of oligopoly are provided by the automobiles, cement, tyre, infant food, dry batteries, tractor ,cigarettes,aluminium'and razor blades industries .In each of these industries , each seller knows his competitors individuality in each market.
Each oligopolist realizes that any change in his price and advertising policy may lead rivals to change their policies. Hence, an individual firm must consider the possible reactions of other firms to its own policies. The smaller the number of firms , the more interdependent are their policies. In such cases, there is a strong tendency towards close collaboration in policy determination both in regard to production and prices. Thus, oligopolist follow the philosophy of ' live and let live'. Two examples of this may be mentioned here. In response to tenders invited by the Director General of Civil Supplies and Disposals , the three principal manufacturers of storage batteries, chloride India, standard Batteries and AMCO Batteries, quoted almost identical prices ,
Oligopolistic industries are usually characterised by what is known as price leadership -a situation where firms fix their prices ina manner dependent upon the price charged by one of the firms in the industry, called the price leader. The price has lower costs and adequate financial resources, a substantial share of the market and a reputation for sound pricing decisions. Price leaders with the strongest position in the market may often increase their prices with the hope that competition will follow suit. Price followers may delay raising their prices in the hope of snatching a part of the market share from the leader.
Monopolist competition is a market situation, I which there are many sellers of a particular product, but the product of each sellers is in some way differentiated in the minds of consumers from the product of every other seller. None of the sellers is in a position to control a major part of the total supply of the comm. odity but every seller so differentiates his portion of the supply from the portions sold by others, that buyers hesitate to shift their purchases from his product to that of another in response to price differences. At times, one manufacturer may differentiate his own products.
For example, a blade manufacturer in India manufactures more than 25 brands of blades. This differentiation of product by each manufacturers by giving it a brand name give some amount of monopoly if he is able to create a goodwill for his product and he may be able to charge higher prices to some extent. Still, his product will have to compete with similar products of other manufacturers, which puts a limit on his pricing discretion. If he charges too high a price, consumers may shift their loyalty to other competing suppliers. Out can find it out yourself by going to the market, as a large number of consumer goods like toothpastes, soaps, cigarettes, radios, etc. are subject to a large degree of product differentiation as a means of attracting customer.
As long as a consumer has an impression that a particular product brand is different and
superior to others, he will be willing to pay more for that brand than for any other brand
of the same commodity. The differences real or illusory may be building up in his mind
by (a) recommendations by friends, (b) advertising, (c) his own experience and
observation. The producer gains and retains his customers by (a) competitive advertising
and sales promotion, (b) the use of brand names quite as much as by (c) price
competition. ;
Product differentiation is more typical of the present day economic system, than either pure competition or monopoly. And, in most cases , an individual firm has to face monopolistic competition. It tries to maintain its position and promote its sales by either(i) changing its price and indulging in price competition , or (ii) intensifying the differentiation of its product, and /or (iii) increasing its advertisement and sales promotion efforts.

Identity and name any three products of your choice where both the brand name and packaging has largely contributed to their success.

Identity and name any three products of your choice where both the brand name and packaging has largely contributed to their success. In the light of the above discuss the strategic importance of Branding and Packaging as tools for pull
strategy.


Brand Name: The American Management Association defines it thus : "Brand name is a pan ol'a brand consisting of a word, letter, group of words or letters comprising a name which is intended to identify the goods or services of a seller or a group of sellers and to differentiate ihem form those of competitors,"
Comparing this definition with that of a brand, it is found that the function remaining the same, brand name is only one of the means that the brand can use for identification. Brand name is a word or a combination of words/letters that is pronounceable, e.g., Promise toothpaste. Rexona soap, etc. Sometime you must have also heard words like brand mark and trade 'mark. Since a brand name is used in identification of a product amongst a competing set, it is necessary that each brand must have only a unique identity and ii must also be protected by law. This brings in the concepts of brand mark and trade mark.
A brand mark is a symbol used for the purpose of identification. It can be a mark, a design, a distinctive logo type or a colouring scheme, a picture, etc. In other words, it is IKH a name bul a means of identification, e.g. picture of an elephant in a distinct frame used in the Department of Tourism, Government of India or the famous star-circle of a Mercedez Benz car. or I in circle which you must have seen on buses and trucks made by TATA (T). A trade mark is the legalized version of a brand. Brand falls under the category of industrial property right and. there fore being trscd by other. 'A brand or a pan of a brand that is given legal protection because it is capable of exclusive appropriation" is defined as a trade mark. It is strictly speaking a legal concept, even though brand and trade mark are quite often used synonymously.
Branding Decisions
lla\ing as appropriate brand has emerged as the most important activity in the area of marketing of products especially consumer products. Several decisions need to be taken, though not simultaneously, with regard to brand selection and its use. These are:
I ) Should the product be branded at all?
2) Who should sponsor the brand?
3) What qualilN should be built into the brand?
4) Should each product be individually or family branded? Should other products be given the same brand name?
5) Should two or more brands be developed in the same product category?
6) Should the established brand be given a new meaning (repositioning)?
I.el us consider each of these issues:
Whether to brand a product or not is a decision which can be taken only after considering
the nature of the product, the type of outlets envisaged for the product, the perceived.

advantages of branding and the estimated costs of developing the brand. Historically, it is found that brand development is closely correlated with the increase in the disposable income, the sophistication of the distribution system and the increasing size of the national market. The same trend is visible in India now.
1 \ en lew years back, nobody could have thought of selling branded rice refined flour and Iodised Salt, but several firms in the recent past have become successful even in such product categories. The basic reason is that a class of consumers is willing to pay more for uniform and better quality product represented by the brand. Irrespective of the location and from which retailer they buy, customers are always buying the same product attributes when they buy a branded product. Many other commodities, such as spices are also being branded. There is no doubt that this trend will become stronger in the coming \cars.
fhe question of sponsorship of a brand refers basically to the decision as to whether it should be a manufacturer's brand, also known as a national brand or a private brand , also kiumn as a middleman's brand . This is a major decision in most developed countries where large chain/ departmental stores dominate the retail distribution system. This is, however, largely a hypothetical question in India, where retail distribution system is highl\ fragmented. Only Super Bazars have started marketing a few products, which are specially packed and sold under their names.
I Umcver. if outlets of Super Bazars, Mother Diary and National Consumers Cooperative federation increase in sufficient numbers, it is possible that private brands will also become a reality in future. Some retailers" brand names in the product categories of sarees and car accessories have already been established.
A \er\ crucial decision is with regard to the quality and other attributes lu be built into the product. The matrix of such attributes wiH—decide the product positioning. A marketer has the option to position at any segment of the market: top. bottom or the intermediate, faking an example, surf is positioned as a premium quality and high priced product .At the other end of the scale, Nirma is positioned as low priced, While products such as Dot or Key are somewhere in between.
I he marketer also has to decide at the outset whether he would like to adopt a family brand under which all the products of the company would be sold or he would like to brand each product separately.
Companies like GE or Philips follow the family name strategy, while GM follows the individual brand strategy. In India, L&T and kissan are examples of the former, while I Imdusian Lever follows the latter.
These are advantages in either approach: a) Family Brand
One basic advantage of using the family brand is that it reduces the costs of product launching and on going promotional expenditure substantially. The firm has to promote only one brand, which, if successful, would be able to sell the entire product line. Lining up the distribution channel, members also become comparatively easier. A family brand name has been found to be very cost effective in tyre marketing.
II. 2)lf one product does exceptionally well, it is perfectly possible that there would he positive fall-outs for other products being marketed under the same brand.
Ill It is. however, necessary to be cautious in following the strategy. It will be a very ill advised strategy if the products being offered are of highly uneven quality. It may not also be a good strategy if the markets are quite dissimilar in terms of consumer profile.
IV. A greater weakness of this strategy is that it does not recognize that each product can be given a specific identity by a suitable brand, which can go a long way to make it successful.
b) Individual Brand
i) flic weakness, as pointed out above, becomes the principal strength of thi strategy. Recent consumer researches have irrefutably established that a name can have varied associations and conjure diverse images. These psychological factors can immensely influence the buying decisions. Individual brand strategy is in a position to take care of this aspect of marketing.
n i The second advantage of this strategy is that if there is a product failure, its damaging effect will be limited to that particular product and will not extend to the entire product
line. —
iii) The basic disadvantage lies in the economics of developing an individual brand . It is ob\ loush a costlier strategy than the other.
iv) flic other disadvantage is that the brand does not directly derive any benefit from the
reputation of the firm.
I o lake care of these problems, some firms follow a slightly modified strategy. This invokes using individual brands but also giving prominence to the company name or logo in all promotional campaigns as well as in product packaging. For example, TOMCO follows individual brand strategy but displays prominently the words. 'TATA PK( )l )l '("I". In many cases a brand extension strategy is adopted. This really is an effort on the part of the manufacturer to secure additional mileage from a particularly successful product for launching either similar or even dissimilar product under the same brand. A recent successful example is the decision to introduce Maggi range of sauces to capitalise on the image of Maggi brand of noodles.
5) A firm may decide several brands of the same product, which to some extent are competing inter se. The basic reason is that, at least in the consumer products, various benefits and appeals and even marginal differences between brands can win a large

I o lake care of these problems, some firms follow a slightly modified strategy. This invokes using individual brands but also giving prominence to the company name or logo in all promotional campaigns as well as in product packaging. For example, TOMCO follows individual brand strategy but displays prominently the words. 'TATA PK( )l )l '("I". In many cases a brand extension strategy is adopted. This really is an effort on the part of the manufacturer to secure additional mileage from a particularly successful product for launching either similar or even dissimilar product under the same brand. A recent successful example is the decision to introduce Maggi range of sauces to capitalise on the image of Maggi brand of noodles.
5) A firm may decide several brands of the same product, which to some extent are competing inter se. The basic reason is that, at least in the consumer products, various benefits and appeals and even marginal differences between brands can win a large


Ibllowing. Do you recall that in unitl 1 we discussed the illustration of a company, which has several soaps, under different brands for different segments?
Bnuul repositioning
O\cr the life cycle of a product, several market parameters might undergo a change such as introduction of a competing product, shifts in consumer preference, identification of new needs, etc. All and each of such changes call for a relook as to whether the original positioning of the product is still optimal or not. Stagnating or declining sales also point td need for reassessment of the original product positioning. For example, Thums Up has been rcpositioned several times in the recent past, from the young to the professionals to the kids and back to the young.
Packaging has been variously defined in both technical and marketing literature. One of the most quoted definition is 'Packaging is the art, science and technology of preparing goods for transport and sale'. This definition brings out two salient aspects of packaging.
I Itcsc are:
a) It has to help in the physical transportation and sale of the products packaged.
bj Packaging as a function consists of two distinct elements, (i) the positive aspects, I he science and technology related to package design, selection of packaging materials etc. and (ii)lhe behavioral aspects.vi/.. the art of product design which is associated with consumer research, buying research, etc.
I he last aspect has been highlighted in another definition of packaging. Properly designed, the package should enhance the value of its contained product, and impart that impression, either directly or subtly, to the consumer marketing today.
Packaging should perform the following basic functions: it should (a) protect; (b) appeah(c) perform; (d) offer convenience to the end-users; and (e) be cost- effective.
Protection
Of the live functions, this is the one, which is the oldest and most basic. The primary function is to protect the products from the environment and physical hazards to which the product can he exposed to. in transit from the manufacturer's plant to the retailer's shcKcs and while on display on the shelves.
I he specific types of hazards against which protection has to be sought would obviously vary from product to product. It is however possible to identify the principal hazards which are almost universal. These are:
a) Breakage /damage due to rough mechanical or manual handling during transportation,
b) I Extremes of climatic conditions which can lead to melting, freezing,
c) Contamination, either bacterial or non-bacterial, such as by dirt or chemical elements.

d) Absorption of moisture or odours of foreign elements,
c) Loss of liquid or vapour,
0 Pilferage during transit or storage.
Packaging Cost versus Damage to the Goods
While ii may be technically feasible to identify the total risk profile of a product with regard to its physical and distributional parameters, it will not be necessary or economically desirable to develop and adopt a zero-risk package. After a certain stage the reduction in the probability of loss due to the damages to the goods will not be commensurate with the increase in the arising out of possible damage to the goods rather than going tor Tool-proof packing. The firm has to take a managerial decision as to the level of risks that it is willing to trade -off against the increase in packing costs. The relationship between the packaging costs and loss due to product damages is shown in figure.



sorry for poor quality for this article..

What is marketing research ? Discuss its scope in accomplishing the marketing goal...

What is marketing research ? Discuss its scope in accomplishing the marketing goal of profit maximization set by the firm. Explain with suitable examples.

Marketing research is the function that likes the consumer with the organisation through
information. It involves systematic and objective search for and analysis of information
iluit tan be uses for evolving some marketing decisions.
An> research study must clearly state the issues being investigated. It must apply
s\ sicniatic and formal procedure in collection and analysis of information. It must
communicate the study findings in a manner, which could help in arriving at some
marketing decisions.
A research study will fail to serve its purpose if marketing researcher merely collates
some stalistieal facts or is pre-occupied with techniques or uses data of questionable
validity or communicates the findings in too much vague or technical language.
Likewise, a research study wills suffer_ _ the marketing manager does not offer full
perspective of the research problem; or allows inadequate time; or uses research as a
lireliglning device or does not really appreciate the value of research.
Problem must be clearly defined and reasons for undertaking the research from the point
of vie\\ of marketing decision-making should be explicitly justified.
In order to carry out effective research programme
1. Prepare a list of objectives to-be examined
2. Avoid
Vague terms of reference
I rivial research projectors
Research where underlying purpose in known or with held.
I nsuic concurrence about the terms of references (specially research objectives, plan ol data collection, time and budget) among all concerned.
Bulk of research is done to measure consumer wants and needs. Also, marketing research is carried out to assess the impact of past marketing actions. Some research is done to understand the competitive, technological, social, economic, cultural, political or legal cm ironments of the market.
Another \sa\ of looking at the function of marketing research is to look at the particular decision area where research results are used.
I) Sales Analysis
Much research is done in the following areas, which are broadly referred as sales analysis
• Measurement of market potential/demand projection;
• Determination of market characteristics:
• Market share estimation;
• Studies of business trends.
In fact, some of the more detailed studies to be carried out under the broad ambit of analysis could be as follows.
• The types of consumers that constitute the potential market;
• The size and location of the market;
• The growth and concentration of the market over certain period of time;
• The competitive picture for the product;
• The major strategies of leading competitors with respect to price, offerings
distribution etc.
• 1 he purchase habits of key market segments;
• What is the pattern of per-purchase deliberations made by the consumers?
• Who arc the involved in the decision-making?
• I low does the product lit into the consumer's life styles? (Operation if it is an industrial product);
• Do consumers prefer to buy some particular brands? (i.e. Assess the degree of grand loyalty).
The above list is not exhaustive. Here research is basically done with a view to know consumers" motivation, attitude, cognition and perceptions etc. Thus information will be collected in a manner so that they have some implications for various marketing
decisions.
11) Sales Methods and Policies
Marketing research studies are also conducted with a view to evaluate the effectivness of present distribution system. Such studies are used in establishing or revising sales territories. They are also helpful in establishment of sales quotas, design of territory boundary, compensation to sales force, physical distribution and distribution cost analysis etc. Marketing research is also done to assess the effectiveness of different promotional activities such as premiums, deals, coupons, sampling etc.
Ill) Product Management
l-'ver\ marketer tries to formally or informally utilize information to manage the existing and ncu products. It examines market feedback about competitive product offerings. Also, some companies make use of marketing research to form market segments through choice of aliernaiixc bases. Companies also carry out different research studies to assess consumer feedback to new products and their likely potential. Of late, in India many consumer products have been launched after making rigorous amount of research. \loreo\er. researches have enabled to diagonise how consumers perceive various brands of a product. Such studies have enabled the companies to position their brands. Marketing research studies have been conducted to monitor the performance of the test brand (in terms of trial and repeat purchase) launched in select shops in the market. Studies are popularly known as simulated test marketing (STM) models. Pricing studies, packaging research, design or physical characteristics, have also been sometimes conducted.
IV) Advertising Research
Media research: There National Readership Surveys (NRS) have so far been conducted in India. These studies have basically estimated the readership of leading newspapers. The last NRS has also assessed, qualitatively, readers feedback on the editorial content. Moreover, some marketing research have evaluated the relative effectiveness of different media in specific product fields, and in context of achieving specific tasks such as creating brand awareness or a particular product benefit.

Copy research: Advertising agencies have been regularly engaged in this activitywhere ihc\ lest out alternative copy designs by assess and monitor effectiveness of different ad\ crtising campaigns.
V) Corporate Research
Large scale corporate image studies among different target publics - They involve an assessment of knowledge about company activities, association of company with sponsored activities and company perceptions on specific dimensions. These type of corporate image studies are done periodically to monitor any change in image over time among different publics. Social values research: Knowledge, attitude and practices on family planning,
antidowry. smoking, drinking etc.
Political studies: In recent times marketing studies have been conducted to ascertain the public opinion about the election results.
Customer service studies: Many banks and large industrial houses have resorted to marketing research to know the consumers' changing need for service and possible grievances about existing operations.
VI) Syndicated Research
Several research agencies collect and tabulate marketing information on a continuing basis. Reports are sent periodically (Weekly, monthly or quarterly) to clients who are paid subscribers. Such services are found specially useful in the spheres of movement of consumer goods through retail outlets (ORG Retail Audit), incidence of disease and use of branded drugs (MARG - prescription audit), Television Program viewing (the television Rating Points). Newspaper & Magazine readership (NRS - discussed earlier under media research), assessment of market potential of a city with-population one lakh and abo\e (Thompson Indices), study of nation's attitudes and psychographics (PSNAP and IMRM's life style research on the cigarette market).

Discuss the various factors that affect the design of marketing organization in the Indian context.

Discuss the various factors that affect the design of marketing organization in the Indian context.


The principles of organisation apply whether you are designing the entire organisation or
a department within it. The three most basic functions necessary for any business
organisation are finance, production and marketing. Each of these functions is organised
separately. Thus, within the organisation structure of the firm you would have distinct
organisations for each function. In this unit we shall discuss the specifics of organising
the marketing function. Broadly speaking, marketing is concerned with all aspects of the product, pricing promotion and distribution. All sub-functions or activities relating to these four basic dimensions are included in the marketing function. You have to account for these various ctivities when designing the marketing organisation.
The structure of a marketing organisation can be studied at different levels, such as
overall organisational issues at each of these levels. These are the various factors that affect the design of marketing organization in the Indian context. ——
Advertising and Sales Promotion Marketing Research Marketing Information System Dealer Development Customer Service New Product Development Marketing Planning.
Sales : The Sales factor is performed by a team of sales people who are responsible for actually selling the product or service. The product may be sold directly to the actual customers and this is known as direct sales. Or else the product may be sold to distributors, wholesalers, retailers or other middlemen, who in turn sell to the actual customers. This is known as indirect selling. A firm may sell either directly or indirectly or use a combination. We shell discuss indirect selling in the following section while here \\e shell confine ourselves to direct selling through company sales force. There are three basic methods in which the sales force may be organised: geographic division, product di\ ision and customer or marketing channel division.

company manufacturing computer peripherals, printers, floppy disks, and consumable items such as magnetic tape has one sales team selling to original equipment manufacturers (OHM) who are these items in assembling their own branded computer, and another sales team selling to computer retail outlets such as Computer Point, computer City, which retail these individual items on per piece basis.




Many companies use a combination of above basis for organizing the sales force. At the head office level, the sales team may be divided on a product basis, but if the market is very large, the team may be further sub-divided on a geographic basis. Thus, there is sales spcciali/ation at the product level as well as the market level.
Distribution: Distribution refers to the physical movement of goods from the factory to the customer. In organising the distribution function, the objective must be to find the least-cost physical distribution method, which allows you to service your customer in the most efficient manner.
There are three most common types of physical distribution organisations. The first is where the company has one plant and delivers to a single market. In this case the plant is usually located close to the market, the godown/warehouse is next to the plant and the cost of distribution is relatively low. Examples of this kind can be found in case of perishable foods and confectionaries, such as bread. The company may use its own sales force or distributors who in turn use wholesalers and retailers to reach the actual customers or a combination of both distributors and own sales forces. In the second type, there arc many geographically farflung markets which are served from one plant. The manufacturer can choose to ship directly to customers in each

market, appoint regional or town level distributors, set up own godowns and branches in each important centre or use a combination of any these.
The third case is where there are multiple plants catering to multiple markets. The two problems in this situation are (i) those of minimising the transportation and the stock cam ing costs at the current level of facilities and (ii) the long-term problem of deciding whether the combination of existing godowns and distribution centres is the most cost-effective one

At your end. you have to take decisions regarding the number and location of godowns, type of transportation to be used, strength and role of sales force. The decision regarding sales force has to be taken in relation to the type of intermediaries available. There are wholesalers, stockists, distributors, commission and freight (C&F) agents, who can act as middlemen for moving your product form your godown to the final customer. The combination of intermediaries varies form company to company, and may also vary within

the same company, for each product and each market.

Advertising and Promotion: There are many objectives for which advertising may be used. Some objectives are long-term and their scope is wide enough to include the entire operations of the firm. Other objectives are shot-term and have a limited scope and coverage. Most firms divide their advertising budget into two parts, one part (and often the larger part) is reserved to be used by the head office for achieving long-term or corporate objectives. This part of the budget is used for advertising in national media such as television and magazines such as India Today. Some of
the corporate objective may he building corporate image, creating brand image at the national level, capturing a specified share of the national market. Thus, a large part of the advertising is planned, controlled and executed by the corporate office. The branch offices may be given a certain budget and authority which they can use for advertising in local newspapers, local radio, local hoardings etc. The branch offices may also have freedom to undertake some local lc\cl sales contests. This is the most commonly observed pattern of organising the advertising function, hut there can be many variations.
Marketing Research: In many companies, marketing research is organised along the same lines as advertising. The major chunk of research activity is centralised at the corporate office and the branch offices have the freedom to undertake only some local lc\cl research. In a country like ours, where most market research organisations arc located in the major metropolitan cities, allowing the branch offices located in small touns to initiate local research is rather irrelevant simply because there exist no reputed research organisations in these towns. Thus for all practical purposes, the entire marketing research function is usually organised at the corporate office.
Marketing Information System (MIS): MIS refers to the system of collecting, processing and using information, which helps improve the quality of decision-making in the area of marketing. The basic processes are collecting, processing, maintaining and using information. There arc three ways in which MIS can be organised. In the first method, the branch office not only collects but also processes the information uhicli it has collected. After processing, all the relevant and critical reports are passed on to the corporate office. 1 lowever. all the information files and records, collectively known as ihe data base are maintained at the head office. _
In the third method, all the three tasks of collecting, processing and maintaining information, are deccntralixed at the branch level. The head office receives regular reports and can requisition any additional information that it requires.
I he use of computers and introduction of real time information systems and networking has greatly increased the efficiency of MIS, irrespective of the manner in which it (MIS) is organised.
Customer and Dealer Relations: This is rather a broad-team and may include activities such as after sales service, and development of new customers, markets, and dealers. The specific activities included under this head would vary according to the nature of product and type of distribution channel which the firm has. In terms of organising this function, it is usually deccntrali/.ed since efficient servicing of the relationally requires proximity to the customer and dealer. But the manner of servicing the customer/dealer may be strictl) defined b\ company policies, guidelines and procedures.
Nc\\ Product Development: This is probably the most critical function for a company \\hich wants to be in business five, ten and fifteen years from today, and yet it is often the most neglected function. The reason for this is that most companies are organised for toda\ and not for the future. New product development requires vision and foresight and the ability to take risks. It requires an organisation in which new product development is recogamsed and organised as a separate activity and allocated resources but the expectation of results is not specified.
It is not enough to merely create a research and development cell. At the most it may produce some technical improvements or modifications in the product. But unless is a marketing person involved with R & D, you cannot expect a new product which would satisfy customer wants. Ideally the organisation for new product development must include marketing people who have
thorough knowledge of market and buyer characteristics.
One \\ay of organising for new product development is to totally segregate the organisation for existing and new products as shown in Figure. Richardson Hindustan Limited (engaged in manufacturing and marketing the Vicks range of products and C'learasil cream and soap) is organised on the basis of product teams. Of the total of 20 product terms, only S work on the existing products, which the remaining 12 work on nc\\ products.



Marketing Planning: This includes activities such as forecasting, target setting, budgeting, establishing control and review procedures, and strategy formulation. Sales targets are usually set on the basis of market knowledge of the sales staff combined \\ith the top management's vision for the future. Each area salesman provides feedback on the potential in his area and the competitor's strength. All this data are compiled into a ureawisc target plan which is discussed across the table between the marketing people and the top management.
budgeting and establishing control and review systems have traditionally been the exclusive preserves of lop management. The budget for the coming year is based upon last \ear's budget with a certain percentage increase to account for inflation and genuine increase in expenditures. The middle and lower levels of management have not much to contribute in this kind of budgeting exercise. But the introduction of zero-based budgeting has changed this. In x.ero-based budget there is no historical precedent to base
the budget upon. Ivach expenditure head has to be justified afresh for inclusion in the budget, since the last year's expenditure on this head is assumed to be zero. The entire onus is on the operating managers for preparing and justifying expenditure heads. In strategy formulation, top management requires the active participation of the marketing people in term of their feedback on success of present strategy, competitors acitivities. and consumer tastes.
I lui.v the functional marketing organisation is based