MB0046 Marketing Management ASSIGNMENT- Set 1

Q.1 Explain the various stages involved in new product development Ans.

Q2. Discuss the importance of SWOT analysis to develop effective marketing mix. Ans. A tool used by organisations to help the firm establish its Strengths, Weaknesses, Opportunities and Threats (SWOT). A SWOT analysis is used as a framework to help the firm develop its overall corporate, marketing, or product strategies. Note: Strengths and Weaknesses are internal factors which are controllable by the organisation. Opportunities & threats are external factors which are uncontrollable by the organisation. Strength examples could include: A strong brand name. Market share. Good reputation. Expertise and skill. Weaknesses could include: Low or no market share. No brand loyalty. Lack of experience. Opportunities could include: A growing market. Increased consumer spending. Selling internationally. Changes in society beneficial to your company. Threats could include: Competitors Government policy eg taxation, laws.

Changes in society not beneficial to your company. A SWOT analysis is an excellent tool to use if the organisation wants to take a step back and assess the situation they are in. Issues raised from the analysis are then used to assist the organisation in developing their marketing mix strategy. A SWOT analysis must form the part of any prudent marketing strategy.

Analysis A marketing plan starts with an analysis of the company, customers, competitors, external partners and the overall economy. The company's strengths may include its financial position and cash balance, product quality and brand recognition. Its weaknesses may include an inability to attract qualified candidates due to tightness in the labor market. Its market opportunities may lie in foreign markets with emerging and growing middle classes. It may also find opportunities in local markets indirectly by taking advantage of financial difficulties faced by some of its smaller competitors. However, entry of new competitors and emerging new technological innovations may represent threats because they can alter customer buying habits. External partners, such as suppliers and regulatory agencies, and the overall economic environment must also be evaluated for potential threats and opportunities.

Segmentation The division of a market into groups based on demographic and other factors is known as market segmentation. This allows advertising messages to be targeted specifically to maximize the sales opportunities in each segment. Using the SWOT analysis results, a company will know where the best opportunities are, including niche areas or specific demographic groups that might be underserved by its competitors. Similarly, it also will know potential weaknesses in its own product offerings that might be exploited by its competitors to gain market share and take steps to correct them. Strategy

The four "P's" of a marketing strategy are product, price, promotion and place (distribution channels). Once again, SWOT analysis forms the basis of strategic choices. For example, product decisions are based on the market opportunities, the company's own internal research and development and manufacturing strengths, the availability of adequate financial resources, and the brand recognition. Pricing considerations include sales volume sensitivity to price changes and the impact of discounts and flexible payment terms. The strengths and weaknesses of the distribution channel are important considerations; also important to the marketing plan are the type and mix of channels -- for example, retail or direct -- and the transportation and warehousing logistics. Promotion considerations include designing advertising campaigns based on a brand's strengths -- for example, value and quality -- and the timing of media buys.

Q.3 Briefly explain the major external and uncontrollable factors that influence an organization decision making, performance and strategies Ans. An organization's macro environment is defined as the major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. This means that the macro environment consists of factors that affect a company, but are outside of its control. This could be almost anything from the wider community, such as interest rates, cultural factors, competitors, technological advances, government policy and even disastrous weather situations, to name a few. In the business world, the four factors that any macro environmental effect could have on a business are known as PEST. PEST is an acronym for Political, Environmental, Social or Technological factors. These factors are umbrella terms for almost anything that could affect business from the outside world. McDonald's and the macro environment McDonald's provides us with a few good examples of macro environmental factors and also shows that even worldwide corporations have many factors that influence their functioning and decision making. Because McDonald's stores are located worldwide, they have had to adapt to each individual culture they have moved into. China Daily (2004) describe how well KFC and McDonald's did when they first broke into the Chinese market. However, after curiosity from the general public died down, they were not doing so well. The restaurants needed to adapt to their new market, so McDonald's started incorporating things like vegetable and seafood soup and corn soup. The American dcor was also overhauled, with many restaurants around Beijing having renovations to make them look like traditional Chinese architecture. Now, according the the Wall Street Journal (2011), McDonald's is claiming that China will be its biggest global market in years ahead.

Super Size Me: McDonald's reinvention Super Size Me was a documentary made by Morgan Spurlock, who ate nothing but McDonald's for 30 days. Toward the end, he had serious medical problems, much less energy and sex drive and had put on a lot of weight. While McDonald's itself would probably disagree with consuming that much of its food over a 30-day period, people worldwide were adopting a negative view of the chain. It had to reinvent itself. Six weeks after the release of the film, McDonald's in the U.S. removed its "super size" option. This was the first part of its new "Eat Smart, Be Active" campaign, which also introduced salads, fruits and yogurts to its menu. The new healthy options were received with great success by the general public, and McDonald's had redeemed itself, maintaining its positive reputation. The global financial crisis The GFC hit businesses hard back in 2009, and most of the world is still recovering. This is probably the most obvious recent example of how the macro environment can affect business. It is generally considered that this was the biggest financial crisis the world has seen since the Great Depression. While most people recognize how much the GFC has affected the business world, many people wouldn't consider food chains like McDonald's. With the GFC, many people started trying to be a bit more careful with how they spent their cash. To combat this, in Australia, McDonald's released several "budget" meals and snacks. They introduced the $2 range, which had a list of products that cost $2 or less. They also introduced the family box with four meals inside for $19.95. This was obviously targeted at young families, who are amongst some of McDonald's largest demographic of consumers. Constantly adapting, changing and reacting to the macro environment is crucial, even for large worldwide corporations like McDonald's. Conclusion The macro environment consists of anything and everything from the world outside of a business, which could have an effect on it. Being aware of these factors and being ready to adapt and change with them is crucial for a business to stay relevant over a prolonged period of time. McDonald's provides us with some great examples of how businesses adapt and change, and it is one of the biggest worldwide corporations. If it has to keep changing and reinventing itself, then it shows businesses of any size really need to be aware of macro environmental factors. http://joel-bickerton.suite101.com/what-is-the-macro-environment-with-examplesa359669

Q.4 Discuss the potential benefits associated with MIS. Ans. According to Kenneth C. Laudon and Jane Price Laudon in their book Management Information Systems: A Contemporary Perspective, an information system is "a set of procedures that collects (or retrieves), processes, stores, and disseminates information to support decision making and control." In most cases, information systems are formal, computerbased systems that play an integral role in organizations. Although information systems are computerbased, it is important to note that any old computer or software program is not necessarily an information system. "Electronic computers and related software programs are the technical foundation, the tools and materials, of modern information systems, " Laudon and Laudon wrote. "Understanding information systems, however, requires one to understand the problems they are designed to solve, the architectural and design solutions, and the organizational processes that lead to these solutions." Though it is sometimes applied to all types of information systems used in businesses, the term "management information systems, " or MIS, actually describes specific systems that "provide managers with reports and, in some cases, on-line access to the organization's current performance and historical records, " Laudon and Laudon noted. "MIS primarily serve the functions of planning, controlling, and decision making at the management level." MIS are one of a number of different types of information systems that can serve the needs of different levels in an organization. For example, information systems might be developed to support upper management in planning the company's strategic direction or to help manufacturing in controlling a plant's operations. Some of the other types of information systems include: transaction processing systems, which simply record the routine transactions needed to conduct business, like payroll, shipping, or sales orders; and office automation systems, which are intended to increase the productivity of office workers and include such systems as word processing, electronic mail, and digital filing. Ideally, the various types of information systems in an organization are interconnected to allow for information sharing. SYSTEMS DEVELOPMENT The development of effective information systems holds a number of challenges for small businesses. "Despite, or perhaps because of, the rapid development of computer technology, there is nothing easy or mechanical about building workable information systems, " Laudon and Laudon stated. "Building, operating, and maintaining information systems are challenging for a number of reasons." For example, some information cannot be captured and put into a system. Computers often cannot be programmed to take into account competitor responses to marketing tactics or changes in economic conditions, among other things. In addition, the value of information erodes over time, and rapid changes in technology can make systems become obsolete very quickly. Finally, many companies find systems development to be problematic because the services of skilled programmers are at a premium.

Despite the challenges inherent in systems development, however, MIS also offer businesses a number of advantages. "Today, leading companies and organizations are using information technology as a competitive tool to develop new products and services, forge new relationships with suppliers, edge out competitors, and radically change their internal operations and organizations, " Laudon and Laudon explained. For example, using MIS strategically can help a company to become a market innovator. By providing a unique product or service to meet the needs of customers, a company can raise the cost of market entry for potential competitors and thus gain a competitive advantage. Another strategic use of MIS involves forging electronic linkages to customers and suppliers. This can help companies to lock in business and increase switching costs. Finally, it is possible to use MIS to change the overall basis of competition in an industry. For example, in an industry characterized by price wars, a business with a new means of processing customer data may be able to create unique product features that change the basis of competition to differentiation. The impetus to develop a new information system can grow out of end-user demands, the availability of new technology, or management strategy. A variety of tools exist for analyzing a company's information needs and designing systems to support them. The basic process of systems development involves defining the project, creating a model of the current system, deriving a model for the new system, measuring the costs and benefits of all alternatives, selecting the best option, designing the new system, completing the specific programming functions, installing and testing the new system, and completing a post-implementation audit. Information systems designers, whether internal to the company or part of an outside firm, are generally responsible for assuring the technical quality of the new system and the ease of the user interface. They also oversee the process of system design and implementation, assess the impact of the new system on the organization, and develop ways to protect the system from abuse after it is installed. But it is the responsibility of small business owners and managers to plan what systems to implement and to ensure that the underlying data are accurate and useful. "The organization must develop a technique for ensuring that the most important systems are attended to first, that unnecessary systems are not built, and that end users have a full and meaningful role in determining which new systems will be built and how, " according to Laudon and Laudon. KNOWLEDGE MANAGEMENT Knowledge management (KM) is a relatively new form of MIS that expands the concept to include information systems that provide decision-making tools and data to people at all levels of a company. The idea behind KM is to facilitate the sharing of information within a company in order to eliminate redundant work and improve decision-making. KM becomes particularly important as a small business grows. When there are only a few employees, they can remain in constant contact with one another and share knowledge directly. But as the number of employees increases and they are divided into

teams or functional units, it becomes more difficult to keep the lines of communication open and encourage the sharing of ideas. Knowledge management is a way of using technology to facilitate the process of collaboration across an organization. A small business might begin sharing information between groups of employees by creating a best-practices database or designing an electronic company directory indicating who holds what knowledge. Larger companies, as David Coleman wrote in Computer Reseller News, can implement KM systems through targeted pilot projects or through a broader strategy involving the firm's technical infrastructure. Many companies have installed intranetsor enterprise-wide computer networks with databases all employees can accessas a form of KM. A number of software programs exist to facilitate KM efforts. Some of the leaders in the field include Lotus Notes, Microsoft Exchange Server, and a variety of systems based on XML. Q5. Describe five interdependent levels of basic human needs (motivators) as propounded by Abraham Maslow Ans. Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of Human Motivation"1 and his subsequent book Motivation and Personality.2 This hierarchy suggests that people are motivated to fulfill basic needs before moving on to other, more advanced needs. This hierarcy is most often displayed as a pyramid. The lowest levels of the pyramid are made up of the most basic needs, while the more complex needs are located at the top of the pyramid. Needs at the bottom of the pyramid are basic physical requirements including the need for food, water, sleep, and warmth. Once these lower-level needs have been met, people can move on to the next level of needs, which are for safety and security. As people progress up the pyramid, needs become increasingly psychological and social. Soon, the need for love, friendship, and intimacy become important. Further up the pyramid, the need for personal esteem and feelings of accomplishment take priority. Like Carl Rogers, Maslow emphasized the importance of self-actualization, which is a process of growing and developing as a person in order to achieve individual potential. Types of Needs Maslow believed that these needs are similar to instincts and play a major role in motivating behavior. Physiological, security, social, and esteem needs are deficiency needs (also known as D-needs), meaning that these needs arise due to deprivation. Satisfying these lower-level needs is important in order to avoid unpleasant feelings or consequences.

Maslow termed the highest-level of the pyramid as growth needs (also known as being needs or B-needs). Growth needs do not stem from a lack of something, but rather from a desire to grow as a person. Five Levels of the Hierarchy of Needs There are five different levels in Maslows hierarchy of needs: 1. Physiological Needs These include the most basic needs that are vital to survival, such as the need for water, air, food, and sleep. Maslow believed that these needs are the most basic and instinctive needs in the hierarchy because all needs become secondary until these physiological needs are met. 2. Security Needs These include needs for safety and security. Security needs are important for survival, but they are not as demanding as the physiological needs. Examples of security needs include a desire for steady employment, health insurance, safe neighborhoods, and shelter from the environment. 3. Social Needs These include needs for belonging, love, and affection. Maslow considered these needs to be less basic than physiological and security needs. Relationships such as friendships, romantic attachments, and families help fulfill this need for companionship and acceptance, as does involvement in social, community, or religious groups. 4. Esteem Needs After the first three needs have been satisfied, esteem needs becomes increasingly important. These include the need for things that reflect on self-esteem, personal worth, social recognition, and accomplishment. 5. Self-actualizing Needs This is the highest level of Maslows hierarchy of needs. Self-actualizing people are selfaware, concerned with personal growth, less concerned with the opinions of others, and interested fulfilling their potential.

Q.6 List the important differences between Consumer market and business markets Ans. The consumer market is all about selling products and getting the best revenue from that. So therefore, offers will be placed on products to make them more attractive for people to buy so that company gets the sales. The consumer market is also very competitive and this means that if you wish to be successful within it, you need to keep tabs on what the competition is doing and better them. The consumer market is all about making cheap produce and selling it on at a higher price to the general public to make a profit.

The business market, however, is more difficult to define. The differences between it and the consumer market are mainly that the business market is less directly competitive, but at the same time you need to make sure your product, or shares, are attractive to the buyer. So it is more about promoting what you have to make buyers aware of it and why it is so good. The factors that influence consumer buying behaviour will be things such as the price of the product, and whether it is actually worth the price that it is being marketed at, the place at which it is being sold, because consumers often have favourite stores, and will look for a reputable name to buy from, and necessity. If the product is something that is needed rather than a one off or a novelty then you are more likely to sell it. The factors that influence business buying are more about the professionalism of the companies selling and their potential to keep providing good share prices are key factors. In the business market it is all about getting your name seen as reputable and knowing what is good to invest in at the time. In business you are more likely to need to impress a company than in consumer buying because the only judge is the consumer themselves.