Marketing Environment Short Answer Type Questions
Question 1.
Explain the benefits of market segmentation.
Answer:
Market segmentation offer the following benefits:
(a) A more precise definition of the market:
Market segmentation improves the company’s understanding of consumer preferences. By knowing this the company can make adjustments to meet changing market demands.
(b) A more effective marketing programme:
With the help of market segmentation more effective marketing prgoramme can be prepared to satisfy the needs of consumers.
(c) Better understanding of the competition:
Marketing segmentation helps in assessing the strength and weaknesses of the competitors. It helps the company to capture new market for the product.
(d) Customer satisfaction:
Market – segmentation helps to satisfy the consumer groups in terms of quantity quality and variety.
(e) Better allocation of resources:
Study of each segmented market situation, helps the company to invest marketing funds in effective manner.
(f) Appropriate timing of the introduction of new, product advertising etc., could be easily determined:
Therefore market segmentation is an adjustment of products and the marketing appeals to satisfy the customers.
Question 2.
What are the bases for market segmentation?
Answer:
Marketing managers are taking decision on market segmentation. Main aim of segmentation is to get more profit from sale of products following are the methods used by marketing manager for market segmentation.
(a) Geographic segmentation:
Market is segmented oh the basis of geographic characteristics of people, regional difference in consumer tastes for products as a whole are well known. Marketing managers distinguish carefully among the regions in which they operate and select whose they have comparative advantage. Geographic segmentation helps the markets to concentrate their efforts to the exact places organizational promotional and distributional efforts can be fully and effectively utilized.
(b) Demographic segmentation:
Demography is the study of human population in terms of its size, density, and distribution, marketing manager also uses. Socio economic characteristics along with demography to segment market, age group, family size, income level, occupation, education, religion, social states etc., are main features of social and cultural approach. This segmentation is very popular because consumer durable goods are produced by the company by taking these information as a base for production.
(c) Psychographic segmentation:
Under this method buyers are divided into different groups on the basis of social class, life style, and personality characteristics, personality is the individuals consistent reactions to the world that surrounds him or her. These personality variables influence the buyer behaviour. This type of market segmentation helps for sale of motor car, ready made clothes, furniture’s etc.,
(d) Behaviour segmentation:
It is more important basis for market segmentation. Because consumer response to the market offerings are differ from product to product consumers gives importance to benefit, usage, loyalty and the occasion at the time of buying the product.
Question 3.
What are the essentials (Requisites) of sound marketing segmentation?
Answer:
Company is segmenting the market by taking different factors as pre requisites. To optimize the benefits from market segmentation every company is to adopt five point criteria for segmentation. These are spelled out by professor. Martin L. Bell of Washington University USA.
These are –
(a) It is identifiable and measureable:
Market segmentation should be clearly defined. Who is in the segment? And who is outside the segment? Are two important questions to be answered before segmentation. It is essential to collect data on demographic, socio cultural, psycholographic segment members. These collected data information should permit the measurement of the size and benefits.
(b) It evidence adequate market potential:
Marketers should forecast actual or potential need of the members of segment prior to going in for market. Purchasing power, taste and preference, income, savings etc., are main factors for consideration in market segmentation.
(c) It is economically accessible:
Market segmentation is a technique used by a company to develop its market for products. Therefore there is enough scope for easy accessibility or approachability to the segment member.
(d) It reacts uniquely to marketing efforts:
Market segmentation should be meaningful and differ in their responses to marketing efforts. Because it will help in optimising the market operations by changing marketing efforts.
(e) It is relatively stable over a period of time:
Marketing segments are long range plan that project three to five years into future long term segments gives good marketing opportunities for a firm.
Question 4.
Distinguish between micro-and Macro Marketing Environment.
Answer:
Micro-Marketing Environment:
The micro environment of our organisations consists of the elements which are controllable by the management.
(a) Organisation:
The organisation consists of many departments such as marketing production, finance, personnel, etc., & each department is placed under the control of manager. All departmental managers will work with co-ordination of each other. The marketing departments which is one of the important organs of the organisation has to straight line its activities.
(b) Corporate resources:
This comprises of men, material, money, machinery & management. All these are controllable & be adjusted according to marketing planning & policy. However, these factors influence the marketing environment.
(c) Marketing Mix:
Another controllable factor i§. Marketing Mix. The organisation can vary the price, or production can plan the promotion-activity according to external environment & that can have its own distribution strategy.
(d) Suppliers:
Even regarding supplier, the organisation can think of avialing the required material or labour according to its manufacturing programmes. It can adopt such a purchase policy which gives bargaining power to the organisation. Thus, the suppliers can be controlled.
(e) Employees:
Employees loyalty, sincerity, productivity & their attitude towards their job & the organisation & the behaviour can be controlled by following sound & employees oriented policies.
(f) Middlemen:
Middlemen are those who help the company in promoting & distributing the product. It can be controlled by imposing restriction on the middlemen regarding the distribution of the products.
Macro Marketing Environment:
The following are the external factors which influence the business activities.
(1) Demographic Environment:
Demographic environment refere to population structure or population characteristics like concentration & dispersion of population, rate of growth, life cycle, sex, age, education; income etc., of the population. A business firm cannot have control over population structure or characteristics.
Again the demographic structure or population structure does poi remain static. It goes oh changing. The changes in demographic structure or composition influence the behaviour of the consumers. Which, inturn, has a direct impact on the marketing plan & practice of the firm.
(2) Economic Environment:
Economic Environment refers to economic conditions. It comprises business depressions & booms, shortages, price level, money supply, take home pay of the people, rat of interest, etc.,
(3) Political & Legal Environment:
Political & Legal Environment refers to political & legal forces & conditions. Political & legal forces comprise the govt, monetary & fiscal policies, inport & export policies, customs & excise duties & numerous laws passed by the govt, for regulating the activities of business firms, & the public policies advocated by the govt. Today, political & legal environmental factors have considerable influence on the marketing activities of a business firm.
(4) Social & Cultural Environment:
Social & Cultural environment refers to Social & cultural forces. Social & Cultural environment comprises changes in life style, changing role of women, Social values, concern for ecological balance etc.
Social & Cultural environment influence the marketing activities of a business firm in the long run. To day, every business firm has Social obligation. The social marketing concept demands every business firm to pay greater attention to consumer welfare & citizen welfare.
(5) Technological Environment:
Technological environment refers to scientific & technological developments. Scientific & technological development provide Opportunities to business firms to produce & sell new products. Again, advances in science & technology have changed the life style of the people radically, & changed their consumption pattern, & have made the business firm to undertake production & sale of such products which satisfy the changing demand of the people.
(6) Competitive Environment:
Competitive environment refers to competition in the market. Competitive environment or competition includes price competition & non price competition. Competition inflences the marketing strategies of every business firm. No business firm can formulate its marketing plan & stratagies without assesing carefully the market competition. Competition influences the marketing strategies of every business concern, Particularly in relation to selection of target markets, marketing channels, product mix, promotion measures, price policy etc.
(7) Ecological Environment:
Ecological environment refers to nature & also the need for conservation of scarce natural resources & preservation of ecological balances. Ecological environment plays a very important role in the production & marketing activities of every business firm.
Ecological environment requires every business firm to satisfy not only the demands of the buyers of its products but also the wants of the society. Environment experts are vigorously advocating the conservation of natural, resources & the preservation of ecological balance.
Question 5.
Distinguish between controllable and uncontrollable environment.
Answer:
Controllable Environment:
The controllable environmental forces refers to those forces which are within the control of a company. In other words, it refers to those environmental factors or forces which can be controlled by the organization. These forces include developing a sound marketing mix. That is four P’s : product, price, place and promotion.
(i) Product – A product is a bundle of utilities consisting of various product features and accompanying services.
(ii) Pricing – It is the process of determining the value of a product or service in terms of money before it is offered to the market for sale.
(iii) Promotion – Promotion includes advertising, personal selling, sales promotion arid other selling.
(iv) Place or physical distribution – It refers to making arrangements for the smooth flow of goods and services from the products to the consumers.
Uncontrollable Environment:
Uncontrollable environmental forces refers to those forces or factors which are not within the hold of the business firm. The uncontrollable forces are a company’s at side environmental aspects. A company cannot do anything to prevent it, but only to adjust for those outside or external environment. The uncontrollable forces includes demography, customer needs and desires, competition from other companies, social, political economic scientific and technological conditions.
Question 6.
Briefly explain the components of marketing mix.
Answer:
In the simplest manner, the basic marketing mix is the blending of four inputs (or) submixes which form the core of the marketing system:
- Product Mix
- Price Mix
- Distribution Mix
- Promotion Mix
The outputs are optimum productivity & satisfaction.
(1) Product Mix:
Product is the thing possessing utility. It has four components –
- Product range
- Service after sale
- Brand
- Package
The product management evolues product mix in consultation with marketing manager.
(2) Price Mix:
Price is the valuation placed upon the Product by the offerer. It has to cover pricing, discounts, allowances & terms of credit. It deals with Price competition.
(3) Distribution Mix:
Distribution is the delivery of the product right to consume it. It includes channels of distribution, transportation, warehousing and inventory control.
(4) Promotion Mix:
Promotion is the persuasive communication about product by the offerer to the prospect. It covers advertising personal selling, sales promotion, publicity, public relations exhibition & demonstrations used in promotion, largely it deals with non-price competition.