Learn Through Technology

14 September, 2021

Market Environment

The market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful relationships with customers. Three levels of the environment are 3: Micro (internal) environment - small forces within the company that affect its ability to serve its customers. Meso environment – the industry in which a company operates and the industry’s market(s). Macro (national) environment - larger societal forces that affect the microenvironment.^[1]

Micro-Environment

The micro environment refers to the business itself and to all the challenges that come from inside the business. Businesses can therefore take control over all the challenges and influences in the micro environment. Sometimes, the micro environment is also known as the internal environment. The micro environment refers to the forces that are close to the company and affect its ability to serve its customers. It includes the company itself, its suppliers, marketing intermediaries, customer markets and public.

The company aspect of micro-environment refers to the internal environment of the company. This includes all departments, such as management, finance, research and development, purchasing, operations and accounting. Each of these departments has an impact on marketing decisions. For example, research and development have input as to the features a product can perform and accounting approves the financial side of marketing plans and budget in customer dissatisfaction. Marketing managers must watch supply availability and other trends dealing with suppliers to ensure that product will be delivered to customers in the time frame required in order to maintain a strong customer relationship.

Macro-Environment (external environment)

The macro-environment refers to all forces that are part of the larger society and affect the micro-environment. It includes concepts such as demography, economy, natural forces, technology, politics, and culture.

Factors affecting organization in Macro environment are known as PESTEL, that is: Political, Economical, Social, Technological, Environmental and Legal.

Demography refers to studying human populations in terms of size, density, location, age, gender, race, and occupation. This is a very important factor to study for marketers and helps to divide the population into market segments and target markets. An example of demography is classifying groups of people according to the year they were born. These classifications can be referred to as baby boomers, who are born between 1946 and 1964, generation X, who are born between 1965 and 1976, and generation Y, who are born between 1977 and 1994. Each classification has different characteristics and causes they find important. This can be beneficial to a marketer as they can decide who their product would benefit most and tailor their marketing plan to attract that segment. Demography covers many aspects that are important to marketers including family dynamics, geographic shifts, work force changes, and levels of diversity in any given area.

Another aspect of the macro-environment is the economic environment. This refers to the purchasing power of potential customers and the ways in which people spend their money. Within this area are two different economies, subsistence and industrialized. Subsistence economies are based more in agriculture and consume their own industrial output. Industrial economies have markets that are diverse and carry many different types of goods. Each is important to the marketer because each has a highly different spending pattern as well as different distribution of wealth.

The natural environment is another important factor of the macro-environment. This includes the natural resources that a company uses as inputs that affects their marketing activities. The concern in this area is the increased pollution, shortages of raw materials and increased governmental intervention. As raw materials become increasingly scarcer, the ability to create a company’s product gets much harder. Also, pollution can go as far as negatively affecting a company’s reputation if they are known for damaging the environment. The last concern, government intervention can make it increasingly harder for a company to fulfill their goals as requirements get more stringent.

The technological environment is perhaps one of the fastest changing factors in the macro-environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. As these markets develop it can create new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology as it becomes outdated. They must stay informed of trends so they can be part of the next big thing, rather than becoming outdated and suffering the consequences financially.

The political environment includes all laws, government agencies, and groups that influence or limit other organizations and individuals within a society. It is important for marketers to be aware of these restrictions as they can be complex. Some products are regulated by both state and federal laws. There are even restrictions for some products as to who the target market may be, for example, cigarettes should not be marketed to younger children. There are also many restrictions on subliminal messages and monopolies. As laws and regulations change often, this is a very important aspect for a marketer to monitor.

The final aspect of the macro-environment is the cultural environment, which consists of institutions and basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which passed on from generation to generation and very difficult to change, and secondary beliefs, which tend to be easier to influence. As a marketer, it is important to know the difference between the two and to focus your marketing campaign to reflect the values of a target audience.

When dealing with the marketing environment it is important for a company to become proactive. By doing so, they can create the kind of environment that they will prosper in and can become more efficient by marketing in areas with the greatest customer potential. It is important to place equal emphasis on both the macro and micro environment and to react accordingly to changes within them.^[2]

Green Banking

Green Banking means eco-friendly or environment-friendly banking to stop environmental degradation to make this planet more habitable. This comes in many forms. Providing innovative green products: using online banking instead of branch banking, paying bills online instead of mailing them, purchasing green mortgage, opening up of CDs, green credit cards and money market accounts at online banks instead of large multi-branch banks or finding the local bank in your area that is taking the biggest steps to support local green initiatives. Green Banking is also a multi-stakeholders' endeavor where banks have to work closely with government, NGOs, International Financial Institutes (IFIs)/International Government Organizations (IGOs), Central Bank, consumers and business

communities to reach the goal.

A Green Banking is an ethical banking/ social banking (“banks with a conscience”-Benedikter, 2011) as there is a strong building block which is corporate social responsibility (CSR) within the agenda of green banking. CSR

bind banks in a relation with society/people showing the caring face of it in different situation, especially, in crisis period. Furthermore, Green Banking is regarded as sustainable banking, which has a role to safeguard the planet from environmental degradation, with the aim of ensuring economic growth which is sustainable.

Customer satisfaction

Customer satisfaction

is a term frequently used in marketing. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals."^[1] In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses.^[1]

It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.^[2]

"Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers' expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability.... These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective."^[1]

Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction.

"In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel—even though its facilities and service would be deemed superior in 'absolute' terms."^[1]

The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, 100 cell phone plan providers, because customer satisfaction would be far too low, and customers would easily have the option of leaving for a better contract offer.

Here are the top six reasons why customer satisfaction is so important:

It’s a leading indicator of consumer repurchase intentions and loyalty
It’s a point of differentiation
It reduces customer churn
It increases customer lifetime value
It reduces negative word of mouth
It’s cheaper to retain customers than acquire new ones

Relationship marketing

RM was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions.

As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages

With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with customers that goes beyond simple demographic and customer service data. Relationship marketing extends to include inbound marketing efforts, (a combination of search optimization and strategic content), PR, social media and application development.

Implementing a relationship marketing strategy

Relationship marketing is based on the tenets of customer experience management (CEM), which focuses on improving customer interactions to foster better brand loyalty. While these interactions can still occur in person or over the phone, much of relationship marketing and CEM has taken to the Web.

With the abundance of information on the Web and flourishing use of social media, most consumers expect to have easy, tailored access to details about a brand and even expect the opportunity to influence products and services via social media posts and online reviews. Today, relationship marketing involves creating easy two-way communication between customers and the business, tracking customer activities and providing tailored information to customers based on those activities.

For example, an e-commerce site might track a customer's activity by allowing them to create a user profile so that their information is conveniently saved for future visits, and so that the site can push more tailored information to them next time. Site visitors might also be able to sign in through Facebook or another social media channel, allowing them a simpler user experience and automatically connecting them to the brand's social media presence.

This is where CRM and marketing automation software can support a relationship marketing strategy by making it easier to record, track and act on customer information. Social CRM tools go further by helping to extend relationship marketing into the social media sphere, allowing companies to more easily monitor and respond to customer issues on social media channels, which in turn helps maintain a better brand image.

Satellite Product Strategy

Satellite Marketing is a communications strategy designed to connect an organization with its target markets via social media sites and services. These social media sites and services act as marketing sub-stations, or “satellites”.

Satellites are used in addition to, or in place of, traditional media, such as print, radio, television, direct and outdoor advertising. The goal is to expand the reach of the organization and enhance the results by creating relationships.

Satellites offer smaller, faster, dynamic communications opportunities, engaging prospects where they already exist. Social media is among the fastest growing forms of communication today (site reference), with users connecting online for both personal and professional purposes

To start, Satellite Marketing helps products or services to;

Utilize social media, networks and functionality for marketing
Develop relationships with prospects, customers, industry and media
Promote the sampling and sales of products and services
Supplement traditional media planning with social media planning
Increase brand awareness, participation, engagement, reach and audience

Satellites are configured with strategically placed (and re-purposed) communications content from existing brochures, advertisements, web sites, public relations, branding, design, multimedia and events on social media sites then set in “orbit” around the prospect with the same diligence as traditional media. When planned properly, “social media planning” accounts for the same demographics, psychographics, frequency and impressions as conventional media planning. These Satellite-borne communications have greater credibility and frequency than traditional media, resulting in an enhanced impact upon the target market(s) of a product or service. Inherent in the model is the opportunity of a customer relationship.

CHALLENGES IN PRICING FINANCIAL SERVICES

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1) Financial Services Prices are Often Multi-Dimensional

2) Elusive Measures of Quality

3) Economic Forces

4) Poor Consumer Price Knowledge

5) Difficulty in Determining Customer Profitability

6) Indeterminable Costs

7) Conflicts of Interest

STRATEGIC CONSIDERATIONS IN PRICING

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1) The Demand Function

2) Price Complexity

3) Promotional Pricing

4) Environmental Forces Influencing Pricing

UNIQUE ASPECTS OF ADVERTISING IN FINANCIAL SERVICES

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(A) Vague Product/Service Attributes

(B) Quality is Intangible

(D) Limited Ability to Visually Communicate Financial Products

(E) Regulations

(F) Variable Prices

SUCCESS FACTORS IN FINANCIAL SERVICES ADVERTISING

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1. Having a Unique Selling Proposition

2. Target Marketing

3. Creating Memorable Ads

4. Facilitating Consumer Action

5. Coordinated Use of Media

6. Use of Direct Marketing

STEPS IN ADVERTISING FINANCIAL SERVICES

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(1) Identification of Advertising Objectives

(2) Budget Determination

(3) Computing the Return on Investment (ROI)

(4) Developing the Contents of the Ad

(5) Media Selection, Scheduling and Campaign Execution

(6) Measurement

Strategies for the enhancement of bank marketing

In the fierce competitive market, needs of customer keep changing. Hence, our marketing strategy must be dynamic and flexible to meet the changing scenario. Here are steps that form successful and effective marketing strategy for bank products.

· Emphasis on Deposits

Emphasis, though in a discrete manner, should be given to mobilize more of term deposits as they are more profitable for the bank in comparison to demand. Introduction of products comparable to “Kisan Vikas Patra” of post office and product with the facility of tax rebate under section 88 of Income Tax Act will of much help in this regard.

· Form a Saleable Product Scheme

Bank should form a scheme that meets the needs of customers.

A bunch of such schemes can also form a product. A bank product may include deposit scheme, an account offering more flexibilities, technically sound banking, tele/mobile/net banking, an innovative scheme targeted to special group of customers like children, females, old aged persons, businessman etc. In short, a bank product may consist of anything that you offer to customers.

· Effective Branding

Man is a bundle of sentiments and emotions. This can effectively be helpful in branding our products. Considering the features of products and target group of customers, the product can be effectively branded so as to sound it catchy and appealing. Some proven examples are Apna Ghar, Dhan Laxmi, Kuber, Flexi Deposit, Smart Kid, Sapney, Vidya etc.

The branding should be done in such a way that the brand name must attract the attention of customers. It should be easy to remember. The target group and the silent feature of the product should resemble brand name. This will help a lot in making the brand successful. All employees and all our campaigns should refer the product by its brand name only so that to strike the same in the customer’s mind.

· Products for Women

The national perspective plan for women states that 94 pc of women workers are engaged in the unorganized sector and 83 pc of these in agriculture and allied activities like dairy, animal husbandry, sericulture, handloom, handcrafts and forestry. Banks should do something to improve their access to credit which they require.

· Customer Awareness

There is a need to educate the customers on bank products. Efforts should be made to widen and deepen the process of information flow for the benefit and education of Indian customers. Today, the customers do not have any idea as to how much time is required for any type of banking service. The rural customers are not aware for what purpose the loans are available and how they can be availed.

Customers do not know the complete rules, regulations and procedures of the bank and bankers preserve them for themselves and do not take interest in educating the customers. It is a need to educate the customers from the grassroots of banking. It is time that each bank branch takes steps to educate the customers on all banking function, which will facilitate growth of banking on healthy lines both qualitatively and quantitatively.

· Advertisement

Advertisement is an eminent part of marketing of bank products. Advertisement should be such that appeals to people. It should not follow the orthodox pattern of narrating a product. For effective advertisement, bank should understand people’s tastes and choices.

· Selling Products in Rural Areas

For enhancing the marketing of their product, bank should sell their products in rural areas. For it, there is a need to open branches in the rural areas.

· Informing Customers About Products

The bank should embark upon aggressive marketing of its products, particularly at the time of launching a new product, which will inform the perspective customers regarding product and at the same time relieve staff at branch level from explaining the product to all customers.

· Customer Convenience

In a service industry like banking where product differential is hard to maintain and quality of service depends upon the service provider, from whom it cannot be separated. So the bank employees have to render services to the satisfaction of the customer, not as per their own conveniences or whims.

· Re-orient Staff

Sincerity of efforts in implementation of the measures is lacking among the bank staff. It is a fact that its employees are not able to rise up to the expectations of its customers. They lack in their behavior, attitude and efficiency. The phenomenon is glaring at urban centers. Therefore, it calls for an immediate attention which is missing link in the entire process of marketing, and the bank should undertake all such steps to motivate and reorient its staff.

· Sale of Products and Services through E-delivery Channels

After the Information Technology Act, many new e-delivery products have been introduced. These e-delivery channels are very helpful in enhancing the marketing of various products and services. Thus banks should sale the products and services through e-delivery channels.

· Sale of Products and Services through Web-sites

Internet is a network of network which connects the world. Thus, banks should sale their products through web-site. This will enhance the marketing of the products not only at the national but also at the international level.

What do you mean by competitive strategies

Competitive strategies: Competitive strategies are the method by which you achieve a competitive advantage in the market. There are typically three types of competitive strategies that can be implemented. They are cost leadership, differentiation and a focus strategy. A mixture of two or more of these strategies is also possible depending on your business' objectives and current market position.

Cost leadership: The aim of this strategy is to be a low-cost producer relative to your competitors and is particularly useful in markets where price is a deciding factor. Cost leadership is often achieved by carefully selecting suppliers and production techniques to minimize production, distribution and marketing costs. However you need to be aware of any serious loss in quality that may render low cost ineffective.

Differentiation: A differentiation strategy seeks to develop a competitive advantage through supplying and marketing a product that is in some way different to what the competition is doing. If developed successfully this strategy can potentially reduce price sensitivity and improve brand loyalty from customers.

Focus strategy: This strategy recognizes that marketing to a homogenous customer group may not be that effective a strategy for the product the business is selling. Instead the business focuses its marketing efforts on a different selected market segments. That is, identify the needs, wants and interests of the particular market segments and customize marketing techniques to reflect those characteristics.

What is Mobile Banking and Internet Banking (June’13)?

Mobile Banking: Mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or personal digital assistant.

Mobile banking differs to mobile payment's which involves the use of a mobile device to pay for goods or services either at the point of sale or remotely, analogously to the use of a debit or credit card to effect an EFTPOS payment.

The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking has until recently (2010) most often been performed via SMS or the mobile web.

Internet banking: Online banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secured website operated by the institution, which can be a retail bank, virtual bank, credit union or building society.

To access a financial institution's online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password (under various names) for customer verification. The password for online banking is normally not the same as for [telephone banking]. Financial institutions now routinely allocate customers numbers (also under various names), whether or not customers intend to access their online banking facility. Customer’s numbers are normally not the same as account numbers, because number of accounts can be linked to the one customer number. The customer will link to the customer number any of those accounts which the customer controls, which may be cheque, savings, loan, credit card and other accounts. Customer numbers will also not be the same as any debit or credit card issued by the financial institution to the customer.

To access online banking, the customer would go to the financial institution's website, and enter the online banking facility using the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted.

The common features fall broadly into several categories

A bank customer can perform non-transactional tasks through online banking, including -

Viewing account balances
Viewing recent transactions
Downloading bank statements, for example in PDF format
Viewing images of paid cheques
Ordering cheque books
Download periodic account statements
Downloading applications for M-banking, E-banking etc.

Bank customers can transact banking tasks through online banking, including -

Funds transfers between the customer's linked accounts

Paying third parties, including bill payments (see, e.g., BPAY) and telegraphic/wire transfers

Investment purchase or sale

Loan applications and transactions, such as repayments of enrollments

Do you believe in advertising? Put your arguments.

Adversiting is any paid form of non-personal presentation and promotion ofgoods, services or ideas by an identified sponsor.Advantages of advertising:

The attraction of a large and geographically-dispersed market.
A pass along rate for print media that supplements circulation.
Low costs per viewer or listener.
The large number of media available.
Sponsor control over message content, graphics, timing, and the audience targeted.
A uniform message delivered to all members of the audience.
Editorial content that often surrounds an advertisement.
The easing of the way for personal selling and self-service retailing.

Disadvantages of advertising:

Advertising messages are inflexible and not responsive to consumer questions.
It is difficult to satisfy diverse audience needs.
A large portion of viewers or readers may be wasted.
Some types of advertising require high total expenditures.
Messages are usually brief, with limited information.
Feedback is hard to obtain.
Low attention is given to advertising by some people, who may even “zap” commercials on television.

What is Millionaire Deposit Scheme (June’13)?

Millionaire Deposit Scheme: Millionaire Deposit Scheme (MDS) Account is a time specified monthly deposit scheme for clients where the deposited money will become one million on maturity.

Features and Benefits:
1. Tenor: 4, 5, 6, 7, 8, 9 and 10 year’s term;2. Deposit on monthly installment basis;
3. Attractive rate of interest;
4. Account can be opened at any working day of the month;
5. Monthly installment can be deposited through a standing debit instruction from the designated CD/SB Account;
6. Monthly installment can be deposited in advance;
7. An account can be transferred from one branch to another branch of the bank;
8. Credit facility for maximum of 2 years can be availed at any time during the period of the scheme;
9. Allowed to open more than one MDS Account for different amount at any branch of the Bank;

But these features and benefits can be varied bank to bank.

What is musharaka product (June’13)?

Musharaka product: Musharaka is a contract of partnership between two or more parties in which all the partners contribute capital, participate in the management, share the profit in proportion to their capital or as per pre-agreed ration and bear the loss, if any, in proportion to their capital/equity ratio.

In the Islamic Banking context, the Islamic Bank may be a partner with its client for running a business where both of them contribute capital, either both of them or the client alone take part in the management of business as per terms of the contract and share the profit as per agreed ration or bear the loss, if incurred, as per their capital/equity ratio.

What is Customer Loyalty (June’13)?

Customer Loyalty: Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring you even more customers. However, that focus is not how you build customer loyalty.

You build loyalty by-

1. Keeping touch with customers using email marketing, thank you cards and more.

2. Treating your team well so they treat your customers well.

3. Showing that you care and remembering what they like and don’t like.

4. You build it by rewarding them for choosing you over your competitors.

5. You build it by truly giving a damn about them and figuring out how to make them more success, happy and joyful.

Figure: Customer Loyalty Cycle

In short, you build customer loyalty by treating people how they want to be treated. Does your marketing plan include strategies and tactics for customer loyalty & customer retention?

What is window dressing (June’13)?

Window dressing: Window dressing is a term that describes the act of making a company's performance, particularly its financial statements, look attractive.

A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund's holdings.

Performance reports and a list of the holdings in a mutual fund are usually sent to clients every quarter. Another variation of window dressing is investing in stocks that don't meet the style of the mutual fund. For example, a precious metals fund might invest in stocks that are in a hot sector at the time, disguising the fund's holdings, so clients really have no idea what they are paying for.

Window dressing may make a fund appear more attractive, but you can't hide poor performance for long.

How It Works/Example: Let's assume Company XYZ wants to look attractive to potential acquirers. It might do some window dressing by announcing much higher sales projections, obtaining and holding a lot of cash, or making other announcements that are likely to raise the stock price, even if only for a short time. The objective is to make a favorable impression on potential acquirers.

Companies are not the only ones to engage in window dressing. Mutual funds do it as well, often by cutting their losses and buying high-fliers (sometimes that are not even in the fund's investment sector) near the end of a reporting period.

What is the Marketing Communications Mix (Nov’11)?

The Marketing Communications Mix: The Marketing Communications Mix is the specific mix of advertising, personal selling, sales promotion, public relations, and direct marketing a company uses to pursue its advertising and marketing objectives.

Advertising: Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Figure: Marketing Communication Mix

Personal selling: Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.

Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.

Public relations: Building good relationships with the company’s various publics by obtaining favorable publicity, building up a good "corporate image", and handling or heading off unfavorable rumors, stories, and events.

Direct marketing: Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships.

What do you mean by Consumerism (Nov’11)?

Consumerism: Consumerism is a social and economic order that encourages the purchase of goods and services in ever-greater amounts. Early criticisms of consumerism are present in the works of Thorstein Veblen (1899). Veblen's subject of examination, the newly emergent middle class arising at the turn of the twentieth century, comes to fruition by the end of the twentieth century through the process of globalization. In this sense, consumerism is usually considered a part of media culture.

The term "consumerism" has also been used to refer to something quite different called the consumerists movement, consumer protection or consumer activism, which seeks to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards. In this sense it is a movement or a set of policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer.

For example, an industrial society that is advanced; a large amount of goods is bought and sold. Sometimes referred to as a policy that promotes greed, consumerism is also coined as a movement towards consumer protection that promotes improvement in safety standards and truthful packaging and advertisement. Consumerism seeks to enforce laws against unfair practices implement product guarantees.

What do you mean by competitive strategies (Nov’11)?

Competitive strategies: Competitive strategies are the method by which you achieve a competitive advantage in the market. There are typically three types of competitive strategies that can be implemented. They are cost leadership, differentiation and a focus strategy. A mixture of two or more of these strategies is also possible depending on your business' objectives and current market position.

Cost leadership: The aim of this strategy is to be a low-cost producer relative to your competitors and is particularly useful in markets where price is a deciding factor. Cost leadership is often achieved by carefully selecting suppliers and production techniques to minimize production, distribution and marketing costs. However you need to be aware of any serious loss in quality that may render low cost ineffective.

Differentiation: A differentiation strategy seeks to develop a competitive advantage through supplying and marketing a product that is in some way different to what the competition is doing. If developed successfully this strategy can potentially reduce price sensitivity and improve brand loyalty from customers.

Focus strategy: This strategy recognizes that marketing to a homogenous customer group may not be that effective a strategy for the product the business is selling. Instead the business focuses its marketing efforts on a different selected market segments. That is, identify the needs, wants and interests of the particular market segments and customize marketing techniques to reflect those characteristics.

What do you mean by product line (Nov’11)?

Product line: A group of related products manufactured by a single company. In marketing jargon, product lining is offering several related products for sale individually. Unlike product bundling, where several products are combined into one group, which is then offered for sale as a unit, product lining involves offering the products for sale separately. A line can comprise related products of various sizes, types, colors, qualities, or prices.

For example, a cosmetic company's makeup product line might include foundation, concealer, powder, blush, eyeliner, eye shadow, mascara and lipstick products that are all closely related. The same company might also offer more than one product line.

What do you mean by strategic business unit (Nov’11)?

Strategic business unit (SBU): In business, a strategic business unit is a profit center which focuses on product offering and market segment. strategic business units typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.

An strategic business units may be a business unit within a larger corporation, or it may be a business unto itself or a branch. Corporations may be composed of multiple strategic business units, each of which is responsible for its own profitability. General Electric is an example of a company with this sort of business organization. Strategic business units are able to affect most factors which influence their performance. Managed as separate businesses, they are responsible to a parent corporation.

An example of a strategic business unit is General Electric. Product offering typically encompasses a strategic business unit.

marketing research

According to American marketing association, marketing research is the function that links, the consumer, customer and public to the marketer through information - information

used to identify and define marketing opportunities and problems, generate, refine and evaluate marketing actions, monitors marketing program and improve understanding of marketing as a process.

Marketing research is the systematic and objective identification, collection, analysis, dissemination and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.

B. Important things are in marketing research :

Some specific things are very important in the marketing research definition. These things are discuss below :

1. Identification of problem :

The most important things in the marketing research are problem identification. Because, if the researcher is unable to identify the actual problem, then all works or activities of the researcher that are related with time, energy, effort and cost will be wasted.

2. Collection of data :

A researcher can collect data and information from various sources and he can use different type of methods. But all sources and data collection methods are not appropriate for all type of research works. So, it is very important for the researcher to select the right sources and right methods to collect data and information.

3. Analysis of data and information :

A researcher use different types of tools and techniques to analysis and interpret data and information. Such as coding, decoding, editing, transcription and verification of data and information. Different types of statistical tools and techniques are also used to analysis data and information. All types of statistical tools and techniques are not appropriate for all types of research works. So, it is very important for the researcher to select right statistical tools and techniques to analyze his collected data and information.

4. Dissemination of information :

The findings, implications and recommendations are provided in a format that makes this information actionable and directly useful as an input for decision - making.

C. Classification of marketing research :

Different types of organization conducted marketing research for two reasons. These are as follows :

1. Problem identification research :

The goal is to identify existing and / or potential problems that are likely to arise in the future, not apparent on the surface. Examples of problems identification research include market potential, market share, brand or company image, market characteristics, short range forecasting, scale analysis, long range forecasting and business trends research.

2. Problem solution research :

Once a problem or opportunity has been identified than problem solving research is undertaken to arrive at a solution. The findings of problem solving research are used in making decisions that will solve specific marketing problems. Marketing problem solving research included segmentation, product, pricing, promotion and distribution research.

D. Steps involved in the marketing research process :

To conduct a marketing research work properly, it is necessary to follow the right steps. The success of the marketing research mostly depends on the work performance of each step. These steps are discuss below :

1. Problem definition :

The first step in any marketing research project is to define the problem. Some time the researcher wrongly thinks that the symptoms are the real problems. But the real causes can be underline with the symptoms. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, the information needed and how it will be used in the decision - making. To identify the marketing problem the researcher can discuss about the problems with the decision makers, interviews with the industry experts and analysis of secondary data. Some time the researcher can conduct the qualitative research to find out the problems. Such as focus group, reference group or depth interview etc.

2. Development of an approach to the problem :

Developing an approach to the problem includes in the research work to formulating an objective or theoretical framework, analytical models, research questions, hypotheses and identifying the information needed. This process is guided by the discussions with management and industrial experts, analysis of secondary data and qualitative research considerations.

3. Research design formulation :

A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required data and information and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables and designing appropriate scales to measure them are also a part of the research design. The issues of how the data should be obtained from the respondents must be address. It is also necessary to design a questionnaire and a sampling plan to select the respondents for the study. More formally, formulating the research design involve the following steps :

(a) Definition of the information needed :

First the researcher prepares a list for information that is required for the research work. The list of the required information prepared on the basis of the objectives of the research project.

(b) Secondary data analysis :

In the information collection stages the researcher first search secondary data. Because the secondary data help to reduce time, effort, energy and cost.

(c) Qualitative research :

Some time the researcher conduct a qualitative research to understand the problem in a better way. This research technique is unstructured, exploratory in nature, based on small samples and may utilize popular quantitative techniques, such as focus groups, depth interview and projective techniques.

(d) Method of collecting quantitative data :

When the researcher realize that secondary data are not appropriate, not available or not valid for his research work then he search the primary data. Three methods are used to collect primary data, these are survey, observation and experimentation methods. Which method will be used that also depend on the nature of the research project ?

(e) Measurement and scaling procedures :

Measurement indicates the assigning numbers or other symbols to characteristics of objects according to certain perspecified rules. Scaling is the process or technique of placing the respondents on a continuum with respect to their attitude towards something.

(f) Questionnaire design:

Questionnaire is designed on the required data and information. Questionnaire has play a vital role to collect data and information through survey method. In the questionnaire preparation the researcher has to consider selecting right words, use non - technical terms, avoid leading question, and avoid to use dual meaningful word and so on.

(g) Sampling process and sample size:

A researcher cannot able to consider the population to collect data and information. It is sometime impossible and hug costly to collect data and information from the population. So, researcher uses the samples that represent the population. Sample can be selected through probabilistic sampling or non - probabilistic sampling. If the researcher uses large number of sample for his research work then the he can able to get more accurate result.

(h) Plan of data analysis:

The researcher prepares a plan to use different type of tools and techniques that are appropriate for his research work.

4. Field work or data collection:

To collect primary data and information, the researcher involves field forces or staffs that operate in the field. The field forces, staffs or interviewers could be use different types of methods to collect primary data and information. These are:

(a) Telephone survey:

Researcher prepares a well - designed questionnaire and then he asks questions to the respondent over telephone. When the respondents are very busy and important person in society then telephone survey is more appropriate. This method also helpful for the researcher to collect data and information from a place to cover a vast areas. But the major disadvantages of this method are, it is very expensive and at the same time all respondents cannot be a telephone set holder.

(b) Personal interview:

This method is very popular and wieldy used in the research work. Through this method researcher collect data and information with face to face interaction. In this method the researcher can give explanation, interpretation and show pictures to the respondents so that they can able to give appropriate answers.

(c) Mail survey:

Here the researcher sent questionnaires to the respondents with a return envelope. This method is very helpful when researcher want to collect data and information on personal related, social and sensitive issues. But the response rate of this method is very low.

(d) Electronic survey :

First the researcher collects the e - mail addresses of the respondent then he sent questionnaire through Internet. Another way to use electronic surveys that is web site. Here the researcher can sent a questionnaire in the web site. But the main disadvantages of this method are that all the respondents are not the owner of a e - mail address or they can not be the user of the web site and the response rate is very low here.

5. Data processing and analysis :

Data preparation includes coding, decoding, editing, transcription and verification of data and information. Different types of statistical tools and techniques are used to analyze data and information. Such as correlation, regression, time series analysis, t - test, ANOVA test etc. Each questionnaire or observation form is inspected or edited and if it is necessary then these will be corrected.

6. Report preparation and presentation:

The entire project should be documented in a written report that address the specific research questions identified, describes the approach, the research design, data collection and data analysis procedures adopted and present the results and the major findings. The findings should be presented in a comprehensible format so that management can readily use them in the decision making process. In addition, an oral presentation should be made to management using tables, figures and graphs to enhance the clarity and impact of the research work.