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Q.1 Write a short note on product life cycle?

Answer

Introduction:

Product life cycle management is the succession of strategies used by management as a product goes through its product life cycle. The conditions in which a product is soldchanges over time and must be managed as it moves through its succession of stages.

Product life cycle:

A product's life cycle (PLC) can be divided into several stages characterized by therevenue generated by the product. If a curve is drawn showing product revenue over time, itmay take one of many different shapes, an example of which is shown below:

Product Life Cycle Curve

The life cycle concept may apply to a brand or to a category of product. Its durationmay be as short as a few months for a fad item or a century or more for product categoriessuch as the gasoline-powered automobile.

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Product development is the incubation stage of the product life cycle. There are no salesand the firm prepares to introduce the product. As the product progresses through its lifecycle, changes in the marketing mix usually are required in order to adjust to the evolvingchallenges and opportunities.

Introduction Stage:

When the product is introduced, sales will be low until customers become aware of the product and its benefits. Some firms may announce their product before it is introduced,  but such announcements also alert competitors and remove the element of surprise.Advertising costs typically are high during this stage in order to rapidly increase customer awareness of the product and to target the early adopters. During the introductory stage thefirm is likely to incur additional costs associated with the initial distribution of the product.These higher costs coupled with a low sales volume usually make the introduction stage a period of negative profits.

During the introduction stage, the primary goal is to establish a market and build primarydemand for the product class. The following are some of the marketing mix implications of the introduction stage:

•  Product - one or few products, relatively undifferentiated•  Price - Generally high, assuming a skim pricing strategy for a high profit margin as

the early adopters buy the product and the firm seeks to recoup development costsquickly. In some cases a penetration pricing strategy is used and introductory pricesare set low to gain market share rapidly.

•  Distribution - Distribution is selective and scattered as the firm commences

implementation of the distribution plan.•  Promotion - Promotion is aimed at building brand awareness. Samples or trial

incentives may be directed toward early adopters. The introductory promotion alsois intended to convince potential resellers to carry the product.

Growth Stage:

The growth stage is a period of rapid revenue growth. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted.Once the product has been proven a success and customers begin asking for it, sales willincrease further as more retailers become interested in carrying it. The marketing team may

expand the distribution at this point. When competitors enter the market, often during thelater part of the growth stage, there may be price competition and/or increased promotionalcosts in order to convince consumers that the firm's product is better than that of thecompetition. During the growth stage, the goal is to gain consumer preference and increasesales. The marketing mix may be modified as follows:

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•  Product  - New product features and packaging options; improvement of productquality.

•

 Price - Maintained at a high level if demand is high, or reduced to capture additionalcustomers.•  Distribution - Distribution becomes more intensive. Trade discounts are minimal if 

resellers show a strong interest in the product.•  Promotion - Increased advertising to build brand preference.

Maturity Stage:

The maturity stage is the most profitable. While sales continue to increase into thisstage, they do so at a slower pace. Because brand awareness is strong, advertisingexpenditures will be reduced. Competition may result in decreased market share and/or 

 prices. The competing products may be very similar at this point, increasing the difficulty of differentiating the product. The firm places effort into encouraging competitors' customersto switch, increasing usage per customer, and converting non-users into customers. Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products.

During the maturity stage, the primary goal is to maintain market share and extend the product life cycle. Marketing mix decisions may include:

•  Product - Modifications are made and features are added in order to differentiate the product from competing products that may have been introduced.

•

 Price - Possible price reductions in response to competition while avoiding a pricewar.•  Distribution - New distribution channels and incentives to resellers in order to avoid

losing shelf space.•  Promotion - Emphasis on differentiation and building of brand loyalty. Incentives to

get competitors' customers to switch.

Decline Stage:

Eventually sales begin to decline as the market becomes saturated, the product becomes technologically obsolete, or customer tastes change. If the product has developed

 brand loyalty, the profitability may be maintained longer. Unit costs may increase with thedeclining production volumes and eventually no more profit can be made.

During the decline phase, the firm generally has three options:

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• Maintain the product in hopes that competitors will exit. Reduce costs and find newuses for the product.

• Harvest it, reducing marketing support and coasting along until no more profit can be made.

•

Discontinue the product when no more profit can be made or there is a successor  product

The marketing mix may be modified as follows:

•  Product  - The number of products in the product line may be reduced. Rejuvenatesurviving products to make them look new again.

•  Price - Prices may be lowered to liquidate inventory of discontinued products.Prices may be maintained for continued products serving a niche market.

•  Distribution - Distribution becomes more selective. Channels that no longer are profitable are phased out.

•

 Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued products.

Limitations of the Product Life Cycle Concept:

The term "life cycle" implies a well-defined life cycle as observed in living organisms, but products do not have such a predictable life and the specific life cycle curves followed by different products vary substantially. Consequently, the life cycle concept is not well-suited for the forecasting of product sales. Furthermore, critics have argued that the productlife cycle may become self-fulfilling. For example, if sales peak and then decline, managersmay conclude that the product is in the decline phase and therefore cut the advertising

 budget, thus precipitating a further decline.

 Nonetheless, the product life cycle concept helps marketing managers to plan alternatemarketing strategies to address the challenges that their products are likely to face. It also isuseful for monitoring sales results over time and comparing them to those of productshaving a similar life cycle.

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Q.2 Explain various categories of brand sponsorship with

example?

Answer

Introduction:

American Marketing Association defines the brand as “A name, term, design, symbol or 

any other feature that identifies one seller’s good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of 

terms, or all items of that seller. If used for the firm as a whole, the preferred term is trade

name.

Brand Sponsorship:

Brand managers have four options of sponsoring the brand.

A. Manufacturer Brand-

The brand owned by manufacturer and promoted either directly or indirectly. This type of 

strategy has been followed for many years. Pillsbury Atta is a manufacturer brand.

B. Private Brand-

These brands are also called store brands. These brands bear the store name or store

selected vendor name. Basic ingredients of private labels are:

I. It must be a unit package: It is difficult to assign a private label character to

say, rice sold loose from a 100kg bag. Even though it may enhance consumer 

loyalty for whatever reason, it does not qualify as a private label product.

II. Relabeling: The unit pack must bear only the brand name of the particular 

store or any other party the store may choose for its private label programme.

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Private labels will enhance the category profitability; increase the negotiation power of the

retailer and better value creates better consumer loyalty. All retailers cannot go for the

 private labeling. Private labels can be introduced if and only if:

a) The consumer is not getting the tangible value.

 b) The retailer is not making enough returns from the sale of the branded goods.

Emerging issues in private branding:

a. The private label strategy is effective, profitable and realistic.

 b. The retailer must understand the price, quality and willingness to pay.

c. The retailers must have a sufficiently large base of loyal customers in the store before introducing the private label.

d. The focus must be on the consumer needs and not any private agenda of the

retailers.

e. There must be a stringent system for the private label production. Quality control is

a must since there is no one else to blame.

f. Private labels must work to fill the gaps in the category and not target the brand

leader.

g. Since manufacturers may take a private label initiative o the retailer seriously and

avoid value gaps in the categories as an impediment to growing private labels.

C. Brand Licensing-

It is the legal authorization by the trade mark brand owner to allow another company to use

its brand for a free. For example- Hugo Boss, Tommy Hilfiger, Lovable, Lacoste and Nike

are some of the textile brands those licensed their brands in the Indian market. The major 

 benefits of brand licensing are low-cost, free publicity and revenue from royalty fees. Brand

licensing also suffers from serious limitations like lack of manufacturing control, and

failure of licensing arrangements.

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D. Co-Branding-

According to Kotler, co-branding is the practice of using the established brand names of 

two different companies on the same product. For example- ICICI and HPCL came together 

to sell ICICI-HPCL petro cards to the customer. Here card is the co-branding between thetwo companies. Co-branding helps ICICI to utilize their financial resources well. It adds

another banking facility to the bank while HPCL can lock the customer from buying the

 petroleum products from competitors. HPCL also gets benefit of financial power which it

doesn’t have. Both companies promote these products. Hence, they can leverage brand

image and can reduce the cost. All companies will not get benefit from co-branding.

Sometimes company may lose the brand image f the product fails.

Q.3 Explain the product mix pricing strategies

with example?

Answer

Pricing Strategy:

One of the four major elements of the marketing mix is price. Pricing is an important

strategic issue because it is related to product positioning. Furthermore, pricing affects other marketing mix elements such as product features, channel decisions, and promotion.

While there is no single recipe to determine pricing, the following is a general sequence of steps that might be followed for developing the pricing of a new product:

1. Develop marketing strategy - perform marketing analysis, segmentation, targeting,and positioning.

2. Make marketing mix decisions - define the product, distribution, and promotionaltactics.

3. Estimate the demand curve - understand how quantity demanded varies with price.

4. Calculate cost - include fixed and variable costs associated with the product.5. Understand environmental factors - evaluate likely competitor actions,

understand legal constraints, etc.6. Set pricing objectives - for example, profit maximization, revenue maximization,

or price stabilization (status quo).

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7. Determine pricing - using information collected in the above steps, select a pricingmethod, develop the pricing structure, and define discounts.

These steps are interrelated and are not necessarily performed in the above order.

 Nonetheless, the above list serves to present a starting framework.

Marketing Strategy and the Marketing Mix:

Before the product is developed, the marketing strategy is formulated, including targetmarket selection and product positioning. There usually is a tradeoff between productquality and price, so price is an important variable in positioning.

Because of inherent tradeoffs between marketing mixes elements, pricing will depend onother product, distribution, and promotion decisions.

Estimate the Demand Curve:

Because there is a relationship between price and quantity demanded, it is important tounderstand the impact of pricing on sales by estimating the demand curve for the product.

For existing products, experiments can be performed at prices above and below the current price in order to determine the  price elasticity of demand. Inelastic demand indicates that price increases might be feasible.

Calculate Costs:

If the firm has decided to launch the product, there likely is at least a basic understanding of the costs involved; otherwise, there might be no profit to be made. The unit cost of the product sets the lower limit of what the firm might charge, and determines the profit marginat higher prices.

The total unit cost of a producing a product is composed of the variable cost of producingeach additional unit and fixed costs that are incurred regardless of the quantity produced.The pricing policy should consider both types of costs.

Environmental Factors:

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Pricing must take into account the competitive and legal environment in which the companyoperates. From a competitive standpoint, the firm must consider the implications of its pricing on the pricing decisions of competitors. For example, setting the price too low mayrisk a price war that may not be in the best interest of either side. Setting the price too high

may attract a large number of competitors who want to share in the profits.

From a legal standpoint, a firm is not free to price its products at any level it chooses. For example, there may be price controls that prohibit pricing a product too high. Pricing it toolow may be considered predatory pricing or "dumping" in the case of international trade.Offering a different price for different consumers may violate laws against pricediscrimination. Finally, collusion with competitors to fix prices at an agreed level is illegalin many countries.

Pricing Objectives:

The firm's pricing objectives must be identified in order to determine the optimal pricing.

Common objectives include the following:

• Current profit maximization - seeks to maximize current profit, taking intoaccount revenue and costs. Current profit maximization may not be the bestobjective if it results in lower long-term profits.

• Current revenue maximization - seeks to maximize current revenue with noregard to profit margins. The underlying objective often is to maximize long-term profits by increasing market share and lowering costs.

• Maximize quantity - seeks to maximize the number of units sold or the number of customers served in order to decrease long-term costs as predicted by the experience curve.

•

Maximize profit margin - attempts to maximize the unit profit margin, recognizingthat quantities will be low.• Quality leadership - use price to signal high quality in an attempt to position the

 product as the quality leader.• Partial cost recovery - an organization that has other revenue sources may seek 

only partial cost recovery.

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• Survival - in situations such as market decline and overcapacity, the goal may be toselect a price that will cover costs and permit the firm to remain in the market. Inthis case, survival may take a priority over profits, so this objective is consideredtemporary.

•

Status quo - the firm may seek price stabilization in order to avoid price wars andmaintain a moderate but stable level of profit.

For new products, the pricing objective often is either to maximize profit margin or tomaximize quantity (market share). To meet these objectives, skim pricing and penetration pricing strategies often are employed. Joel Dean discussed these pricing policies in hisclassic HBR article entitled, Pricing Policies for New Products.

Skim pricing:

Attempts to "skim the cream" off the top of the market by setting a high price and selling tothose customers who are less price sensitive. Skimming is most appropriate when:

• Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive.

• Large cost savings are not expected at high volumes, or it is difficult to predict thecost savings that would be achieved at high volume.

• The company does not have the resources to finance the large capital expendituresnecessary for high volume production with initially low profit margins.

Penetration pricing:

It pursues the objective of quantity maximization by means of a low price. It is mostappropriate when:

• Demand is expected to be highly elastic; that is, customers are price sensitive andthe quantity demanded will increase significantly as price declines.

• Large decreases in cost are expected as cumulative volume increases.• The product is of the nature of something that can gain mass appeal fairly quickly.• There is a threat of impending competition.

As the product lifecycle progresses, there likely will be changes in the demand curve and

costs. As such, the pricing policy should be reevaluated over time.

The pricing objective depends on many factors including production cost, existence of economies of scale, barriers to entry, product differentiation, rate of product diffusion, thefirm's resources, and the product's anticipated  price elasticity of demand.

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Pricing Methods:

To set the specific price level that achieves their pricing objectives, managers may make useof several pricing methods. These methods include:

• Cost-plus pricing - set the price at the production cost plus a certain profit margin.• Target return pricing - set the price to achieve a target return-on-investment.• Value-based pricing - base the price on the effective value to the customer relative

to alternative products.• Psychological pricing - base the price on factors such as signals of product quality,

 popular price points, and what the consumer perceives to be fair.

In addition to setting the price level, managers have the opportunity to design innovative pricing models that better meet the needs of both the firm and its customers. For example,software traditionally was purchased as a product in which customers made a one-time

 payment and then owned a perpetual license to the software. Many software suppliers havechanged their pricing to a subscription model in which the customer subscribes for a set period of time, such as one year. Afterwards, the subscription must be renewed or thesoftware no longer will function. This model offers stability to both the supplier and thecustomer since it reduces the large swings in software investment cycles.

Price Discounts:

The normally quoted price to end users is known as the list price. This price usually isdiscounted for distribution channel members and some end users. There are several types of discounts, as outlined below.

• Quantity discount - offered to customers who purchase in large quantities.• Cumulative quantity discount - a discount that increases as the cumulative

quantity increases. Cumulative discounts may be offered to resellers who purchaselarge quantities over time but who do not wish to place large individual orders.

• Seasonal discount - based on the time that the purchase is made and designed toreduce seasonal variation in sales. For example, the travel industry offers muchlower off-season rates. Such discounts do not have to be based on time of the year;

they also can be based on day of the week or time of the day, such as pricing offered by long distance and wireless service providers.• Cash discount - extended to customers who pay their bill before a specified date.• Trade discount - a functional discount offered to channel members for performing

their roles. For example, a trade discount may be offered to a small retailer who maynot purchase in quantity but nonetheless performs the important retail function.

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• Promotional discount - a short-term discounted price offered to stimulate sales.

Product Pricing Strategies:

The most challenging stage of product is introductory stage. In introductory stage of new product companies face the challenge of setting the prices for the first time. Companieshave only one chance to get new product price right. They can choose among the twostrategies i.e. market skimming pricing and market penetration pricing.

Market Skimming Pricing:

Companies interested in profitable sale set initially high price for a product to skimmaximum revenue from the segments which is willing to pay high price and then slowlymove to low price.

Market Penetration Pricing:

Companies interested in large market share set low price for a product in order to attract largenumber of customer.

Product Mix Pricing Strategy:

The strategies of setting the price for a product when the product is part of product mix.

Product Line Pricing:

Same product with different features the price is kept on the bases of the cost difference between the products in product line and customer evaluation of features and competitor  prices. For example Sony offering different television with different features at different prices.

Optional Product Pricing:

It’s the pricing of the main product with the accessories or optional product for example car with power window CD changer and car without power window and CD changer.

Captive Product Pricing:

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Pricing of the product which must be used with the main product for example films must beuse with VCR, CD must be use with CD player etc.

Product Bundle Pricing:

Making the bundle of different product and price the bundle at a reduce price. It is basicallyfor selling the slow moving items.

\

Q.4 What are various logistics functions? Describe in brief?

Answer

Introduction:

A logistic function or logistic curve is the most common sigmoid curve. It models the"S-shaped" curve (abbreviated S-curve) of growth of some set P, where P might be thoughtof as population. The initial stage of growth is approximately exponential; then, assaturation begins, the growth slows, and at maturity, growth stops.

A simple logistic function may be defined by the formula

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Where the variable P might be considered to denote a population and the variable tmight be thought of as time. If we now let t range over the real numbers from −∞ to +∞then we obtain the S-curve shown. In practice, due to the nature of the exponential function e−t, it is sufficient to compute t over a small range of real numbers such as [−6, +6].

Standard logistic sigmoid function:

The logistic function finds applications in a range of fields, including artificial neural networks,  biology,  biomathematics,  demography,  economics, chemistry, mathematical  psychology, probability, sociology and statistics.

Logistic differential equation:The logistic function is the solution of the simple first-order non-linear  differential 

equation

Where P is a variable with respect to time t and with boundary condition P (0) = 1/2. Thisequation is the continuous version of the logistic map. One may readily find the (symbolic)solution to be

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Choosing the constant of integration eke = 1 gives the other well-known form of thedefinition of the logistic curve

The logistic curve shows early exponential growth for negative t, which slows to linear growth of slope 1/4 near t = 0, then approaches y = 1 with an exponentially decaying gap.

The logistic function is the inverse of the natural logic function and so can be usedto convert the logarithm of odds into a probability; the conversion from the log-likelihood ratio of two alternatives also takes the form of a logistic curve.

The logistic sigmoid function is related to the hyperbolic tangent, A.p. by

In ecology: modeling population growth:

A typical application of the logistic equation is a common model of  population growth,originally due to Pierre-François Verhulst in 1838, where the rate of reproduction is proportional to:

•  The existing population•  The amount of available resource.

All else being equal. Thus the second term models the competition for availableresources, which tends to limit the population growth. Letting P represent population size(N is often used in ecology instead) and t represent time, this model is formalized by thedifferential equation:

Where the constant r defines the growth rate and K is the carrying capacity.

Interpreting the equation shown above: the early, unimpeded growth rate is modeled by the first term +rP. The value of the rate r represents the proportional increase of the population P in one unit of time. Later, as the population grows, the second term, whichmultiplied out is −rP2/K, becomes larger than the first as some members of the population P

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interfere with each other by competing for some critical resource, such as food or livingspace. This antagonistic effect is called the bottleneck, and is modeled by the value of the parameter K. The competition diminishes the combined growth rate, until the value of Pceases to grow (this is called maturity of the population).

Let us divide both sides of the equation by K [5] to give

 Now setting x = P / K gives us the differential equation

For r = 1 we have the particular case with which we started.

In  ecology, species are sometimes referred to as r-strategist or  K-strategist depending upon the selective processes that have shaped their  life history strategies. Thesolution to the equation (with P0 being the initial population) is

Where

Which is to say that K is the limiting value of P: the highest value that the

population can reach given infinite time (or come close to reaching in finite

time)? It is important to stress that the carrying capacity is asymptotically

reached independently of the initial value P (0) > 0, also in case that P (0) > K.

Time-varying carrying capacity:

Since the environmental conditions influence the carrying capacity, as a consequence it

can be time-varying: K (t) > 0, leading to the following mathematical model:

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A particularly important case is that of carrying capacity that varies periodically with periodT:

It can be shown that in such a case, independently from the initial value P (0) > 0, P (t) willtend to a unique periodic solution P*(t), whose period is T. A typical value of T is one year:in such case K (t) reflects periodical variations of weather conditions.

In statistics:

Logistic functions are used in several roles in statistics. Firstly, they are the cumulative distribution function of the logistic family of distributions. Secondly they are used inlogistic regression to model how the probability p of an event may be affected by one or more explanatory variables: an example would be to have the model

Where x is the explanatory variable and a and b are model parameters to be fitted.

An important application of the logistic function is in the Rasch model, used in item response theory. In particular, the Rasch model forms a basis for  maximum likelihood estimation of the locations of objects or persons on a continuum, based on collections of 

categorical data, for example the abilities of persons on a continuum based on responsesthat have been categorized as correct and incorrect.

In medicine: modeling of growth of tumors:

Another application of logistic curve is in medicine, where the logistic differentialequation is used to model the growth of tumors. This application can be considered anextension of the above mentioned use in the framework of ecology. Denoting with X (t) thesize of the tumor at time t, its dynamics are governed by:

Which is of the type?

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Where F(X) is the proliferation rate of the tumor.

If chemotherapy is started with a log-kill effect, the equation may be revised to be

Where c (t) is the therapy-induced death rate. In the idealized case of very long therapy, c(t) can be modeled as a periodic function (of period T) or (in case of continuous infusiontherapy) as a constant function, and one has that

I.e. if the average therapy-induced death rate is greater than the baseline proliferation ratethen there is the eradication of the disease. Of course, this is an over-simplified model of  both the growth and the therapy (e.g. it does not take into account the phenomenon of clonally resistance).

Double logistic function:

 The double logistic is a function similar to the logistic function with numerous

applications. Its general formula is:

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Where d is its centre and s is the steepness factor. Here "sign" represents the sign function.

Importance of a global view of Logistics:

Today’s economy is a global one and enterprises must be prepared to conduct business withcustomers and suppliers anywhere in the world. Efficient logistics services system plays amajor role in competitive pricing and operational efficiency. Cutting-edge technology withglobal logistics knowledge can create a seamless network of suppliers, carriers, andregulatory agencies, warehouse facilities and clients. Global logistics effectiveness is a process, a supply pipeline that stretches from your vendor to the customer. Use the serviceof a logistics-consulting firm to assess your logistics management needs and find a logistics

solution. Assess the need for a third party logistics provider.

• Healthcare Logistics:

Distribution of healthcare products is a great challenge for the healthcare logisticssystem. Healthcare logistics has industry-specific needs of purchasing, warehousing,transport logistics and collaboration. Specific healthcare logistics software can help solve  problems. Healthcare logistics software can help in bar code technology of medical products for faster delivery, reduced medical errors and prevention of fraud and abuse.Using a healthcare logistics software system can cut operation costs and result in lower   patient care costs. Streamlining operations with suppliers through effective use of e-

commerce is a resultant from applying healthcare logistics tools. Efficient healthcarelogistics system can also reduce internal labor costs.

• Distribution Logistics:

The Defense Logistics Agency is an excellent example of distribution logistics. Itsmission is to provide best distribution logistics support to America’s Armed Forces.Distribution logistics, in this case, takes care of everything the service members eat, wear,drive or even shoot.Strategic Distribution Logistics is a logistic job designed to transform the Department of Defense worldwide by integrating stock positioning and transportation.

The aim of distribution logistics services is to drive down customer wait time and costwhile improving quality and reliability of service. Distribution logistics focuses on forwardstocking.

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• Logistics Solution / Logistics Services:

A logistics solution can be implemented on the recommendations of a logistics-consultingfirm. An efficient logistics solution guarantees fast return on investment. A customized

logistics solution brings about decisive impacts on logistical processes to suppliers andcustomers. Logistics service is a strategic to the success of a firm. Logistics service andsolution team needs to focus on eliminating non-productive distance and real–time vehicle fleet tracking.

• Logistics Software:

Integrated logistics management software will help gain a competitive edge. SAP, a leadinglogistics software provider, delivers tools and capabilities that can help your logisticsServices Company operate with efficiency, flexibility and speed. Logistics software benefitswarehouse logistics management by implementing cross docking. Logistics software offers

tracking and tracing tools that allow measurement of key performance indicators (KPIs).

• Reverse Logistics Services:

Reverse logistics services allow manufacturers to increase customer satisfaction by providing a complete view of their supply chains, including goods in the return loop.Integrating the reverse logistics services into the complete logistics job provides feedback for the design, engineering, assembly and distribution. Reverse logistics involves is allabout products that are returned by the customers, either for repair or after-sales service.The questions that need to be asked before applying a reverse logistics management system:

- Where is the repair facilities located?

- How should you integrate your reverse logistics processes into your

total after-sales supply chain?

- Should you outsource the reverse logistics return loop?

Q.5 What is IMC? Describe the communication development process in brief?

Answer:

Introduction:

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Integrated Marketing Communications is a term used to describe a holistic approach tomarketing communication. It aims to ensure consistency of message and the complementaryuse of media. The concept includes online and offline marketing channels. Onlinemarketing channels include any e-marketing campaigns or programs, from search engine 

optimization (SEO), pay-per-click, and affiliate, and email, banner to latest web relatedchannels for webinar, blog, micro-blogging, RSS, podcast, and Internet TV. Offlinemarketing channels are traditional print (newspaper, magazine), mail order, public relations,industry relations, billboard, radio, and television. A company develops its integratedmarketing communication program using all the elements of the marketing mix (product, price, place, and promotion).

Integrated marketing communication is integration of all marketing tools, approaches, andresources within a company which maximizes impact on consumer mind and which resultsinto maximum profit at minimum cost. Generally marketing starts from "Marketing Mix".Promotion is one element of Marketing Mix. Promotional activities include Advertising (by

using different medium), sales promotion (sales and trades promotion), and personal sellingactivities. It also includes internet marketing, sponsorship marketing, direct marketing,database marketing and public relations. And integration of all these promotional toolsalong with other components of marketing mix to gain edge over competitor is calledIntegrated Marketing Communication.

Reasons for the Growing Importance of IMC:

Several shifts in the advertising and media industry have caused IMC to develop into a

 primary strategy for marketers:

1. From media advertising to multiple forms of communication.2. From mass media to more specialized (niche) media, which are centered on specific

target audiences?3. From a manufacturer-dominated market to a retailer-dominated, consumer-

controlled market.4. From general-focus advertising and marketing to data-based marketing.5. From low agency accountability to greater agency accountability, particularly in

advertising.6. From traditional compensation to performance-based compensation (increased sales

or benefits to the company.

Selecting the Most EffectiveCommunications Elements:

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Answer

Introduction:

International marketing (IM) or global marketing refers to marketing carried out bycompanies overseas or across national borderlines. This strategy uses an extension of thetechniques used in the home country of a firm. [1] According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services

to create exchanges that satisfy individual and organizational objectives."[2] In contrast tothe definition of marketing only the word multinational has been added.[2] In simple wordsinternational marketing is the application of marketing principles to across national  boundaries. However, there is a crossover between what is commonly expressed asinternational marketing and global marketing, which is a similar term.

The intersection is the result of the process of  internationalization. Many American andEuropean authors see international marketing as a simple extension of exporting, wherebythe marketing mix 4P's is simply adapted in some way to take into account differences inconsumers and segments. It then follows that global marketing takes a more standardizedapproach to world markets and focuses upon sameness, in other words the similarities inconsumers and segments.

Four Ps:

Elements of the marketing mix are often referred to as 'the four Ps':

• Product - A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units.Intangible products are often service based like the tourism industry &the hotel industry or codes-based products like cell phone load andcredits. Typical examples of a mass produced tangible object are themotor car and the disposable razor. A less obvious but ubiquitous massproduced service is a computer operating system.

• Price – The price is the amount a customer pays for the product. It isdetermined by a number of factors including market share, competition,material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product

if other stores have the same product.

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• Place – Place represents the location where a product can be purchased.It is often referred to as the distribution channel. It can include anyphysical store as well as virtual stores on the Internet.

• Promotion represents all of the communications that a marketer may usein the marketplace. Promotion has four distinct elements - advertising,public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principal elementstogether, which is common in film promotion. Advertising covers anycommunication that is paid for, from cinema commercials, radio andInternet adverts through print media and billboards. Public relations arewhere the communication is not directly paid for and includes pressreleases, sponsorship deals, exhibitions, conferences, seminars or tradefairs and events. Word of mouth is any apparently informalcommunication about the product by ordinary individuals, satisfiedcustomers or people specifically engaged to create word of mouthmomentum. Sales staff often plays an important role in word of mouthand Public Relations (see Product above).

Broadly defined, optimizing the marketing mix is the primary responsibility of marketing. By offering the product with the right combination of the four Ps marketers canimprove their results and marketing effectiveness. Making small changes in the marketingmix is typically considered to be a tactical change. Arm Bains says making large changes inany of the four Ps can be considered strategic. For example, a large change in the price, sayfrom $19.00 to $39.00 would be considered a strategic change in the position of the product. However a change of $130 to $129.99 would be considered a tactical change,  potentially related to a promotional offer. The term 'marketing mix' however, does not

imply that the 4P elements represent options. They are not trade-offs but are fundamentalmarketing issues that always need to be addressed. They are the fundamental actions thatmarketing requires whether determined explicitly or by default.

Extended marketing mix:

There have been attempts to develop an 'extended marketing mix' to better accommodatespecific aspects of marketing. For example, in the 1970s, Nickels and Jolson suggested theinclusion of  packaging. In the 1980s Kotler  proposed  public opinion and   political power  and Booms and Bitner included three additional 'Ps' to accommodate trends towards a

service or knowledge based economy:

• People – all people who directly or indirectly influence the perceivedvalue of the product or service, including knowledge workers, employees,management and consumers.

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• Process – procedures, mechanisms and flow of activities which lead to anexchange of value.

• Physical evidence – the direct sensory experience of a product or servicethat allows a customer to measure whether he or she has received value.Examples might include the way a customer is treated by a staff 

member, or the length of time a customer has to wait, or a cover letterfrom an insurance company, or the environment in which a product orservice is delivered.

Four Cs:

The Four Ps is also being replaced by the Four Cs model, consisting of consumer, cost,

convenience, and communication. The Four Cs model is more consumer-oriented and fits better in the movement from mass marketing to niche marketing. The product part of theFour Ps model is replaced by consumer or consumer models, shifting the focus to satisfying

the consumer. Another C replacement for Product is Capability. By defining offerings asindividual capabilities that when combined and focused to a specific industry, creates acustom solution rather than pigeon-holing a customer into a product. Pricing is replaced bycost, reflecting the reality of the total cost of ownership. Many factors affect cost, including but not limited to the customers cost to change or implement the new product or service andthe customers cost for not selecting a competitors capability. Placement is replaced by theconvenience function. With the rise of internet and hybrid models of purchasing, place is nolonger relevant. Convenience takes into account the ease to buy a product, find a product,find information about a product, and several other considerations. Finally, the promotionsfeature is replaced by communication.

Four Cs in 7Cs compass model: This section may need to be vilified to meet Wikipedia's quality standards. Please

help by adding relevant internal links , or by improving the section's layout. (October 

2009). This section may be confusing or unclear to readers. Please help clarify the 

article; suggestions may be found on the talk page. (October 2009)

An editor has expressed a concern that this section lends undue weight to certain

ideas relative to the section as a whole. Please help to discuss and resolve the

dispute before removing this message. (October 2009). A formal approach to this

customer-focused marketing mix is known as 4C(Commodity, Cost, Channel,

Communication) in 7Cs compass model. This system is basically the four Ps 

renamed and reworded to provide a customer focus. The four Cs Model provides a

demand/customer centric version alternative to the well-known four Ps supply side

model (product, price, place, promotion) of marketing management.

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o Product→ Commodityo Price → Costo Place → Channelo

Promotion→ Communication

 

Pepsi's Global Strategy:

When the "You're in the Pepsi Generation" advertising campaign launched in 1963, it

may have been the first time a brand was marketed primarily with an association to itsconsumers' inspirational attitudes. A decidedly youth-oriented strategy, the campaign hopedto hook young Baby Boomers while they were still young. In 1984 Pepsi launched another long-running campaign, "The Choice of a New Generation," and in 1997 they debuted the"GeneratioNext" concept.

The newest campaign slogan, introduced this year, is "More Happy," which definitelycoincides with one concrete example of "more" in the packaging of Pepsi products today— more designs. Many more. At least 35 distinct design ideas will grace the packaging of Pepsi's cans and bottles this year alone, and this design strategy may continue indefinitely.

Though not "generational" in word, the campaign certainly has a youth-oriented feelwith package designs, advertising, and websites that are fun and playful. PepsiCo workedclosely with Peter Arnell and Arnell Group, based in New York City, to devise acomprehensive new strategy that would connect with Pepsi's core consumers. Arnellreinvented the Pepsi package as a meaningful and appealing communications tool for thelatest generation of youth that are not overwhelmed by media, music, or digital distractions.

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Experiential packaging:

Arnell Group (a wholly-owned subsidiary of Omnicom Group) is a design and brandcreation firm specializing in experiential design and product innovation, preferring to takecomplete branding and packaging projects from first concept to complete market solutions.Peter Arnell, currently chairman and chief creative officer of Arnell Group, formed theArnell Group Innovation Lab in 1999 to place invention and innovation at the forefront in a

collaborative laboratory for corporations interested in designing for next generation products and experiences. Arnell applied many of his philosophies in the Pepsi project.

"Peter has taken a classic and turned it into a modern, innovative, and relevantmarketing and communications tool," said Ron Coughlin, chief marketing officer, beverages, PepsiCo International. The new global look launched in February with eight new package designs across cans and bottles, and the campaign is unfolding in a similar manner overseas. The can designs roll out one at a time approximately three weeks apart to enhancethe anticipation of discovery and to pique the interest of collectors.

"Product innovation today must be driven by deep consumer meaning and

connectivity," says Arnell. "It is less about unmet needs and more about giving people whatthey haven't asked for but are dying to have. Using design to turn packaging into personalconsumer-powered media helps create the ultimate supportive and inspiring relationship between Pepsi and its youth audience."

Thinking globally

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The Pepsi can designs roll out one at a time, but the two-liter Pepsi bottles will havethree or four designs out at any given time.

Mike Doyle, creative director at Arnell Group, explains that there was a great depth

of exploration and research that was conducted before even beginning to formulate a newPepsi packaging strategy. PepsiCo and Arnell Group traveled extensively to emergingmarkets to find key consumer product drivers for youth cultures and to learn how the Pepsi brand was perceived in different countries. They found, somewhat surprisingly, that therewere very few differences around the world in how consumers felt about Pepsi's fun,effervescent brand image.

"The brand equity is really consistent," says James Miller, marketing director,Pepsi-Cola North America. They also found many consistencies in youth cultures aroundthe world in how today's youth is preoccupied with newness, discovery, and personalizationof their possessions. Miller describes the design campaign's goal as "sustainable discovery,"

where the consumer audience is constantly intrigued and engaged.

Designers at Arnell Group created the dozens of new and vibrant designs with onlya handful of blue and gray shades. Each design tells a story of sorts and each can design hasa unique website address on the side of the can. The first one on the "Your Pepsi" canallows web users to design a digital billboard that will appear in Times Square, and onecoming shortly will allow users to mix their own music online.

"We redefined packaging as media in the marketplace for Pepsi," says Doyle. "It speaksto youth in their language." Doyle believes that the designs succeed because they are able tocapture the audience's mind space. "The designs are reflecting back to the culture instead of 

talking to the culture or imposing on it."

Reassuringly Pepsi:

Pepsi actually asked their loyal consumers what brand elements would have to remainso that they would be intuitively reassured that their favorite drinks were not changing andthe brand they trusted was still essentially the same. Their answer was direct and consistent.Pepsi-lovers needed to see three elements for sure—the Pepsi "globe," the iconic Pepsi blue,and the familiar tilted Pepsi capital letters.

Arnell Group updated the primary logo substantially and cleverly without really

redesigning its key elements. The most recent logo design had the Pepsi wordmark on topof and slightly overlapping the iconic Pepsi red-white-and-blue "globe." On the previouscan design, the word mark wrapped halfway around the can, and the globe was off-center.The new cans and bottles have un-bundled the word and globe, making the newly centeredglobe more of the hero, and the smaller Pepsi word mark less prominent.

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Television ad campaigns are reinforcing the globe-centric approach by featuring a boulder-sized Pepsi globe in various settings careening to and fro like a pinball. In the adsand on the front of most of the new packages is the reassuring tag line: "Same Pepsi inside,new look outside." Miller explains that it is customary and important to reassure consumers

for at least six months in situations like this. Miller also sees today's youth as demandingauthenticity from the products they come into contact with in their day-to-day experiences.The new Pepsi design strategy is versatile because it can be authentic and stay current, andit could also make introducing special seasonal or regional designs more intriguing and lessdisruptive. "This is a new way of using packaging as media," explains Miller. "Theconsumer is looking for more variety and expecting more from their brands. They want tohave a dialogue with their favorite brands."

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