Management Consulting/Marketing Management

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Question
Dear Sir, its for my assigment..

1.   a) "Now the Indian market has totally become the consumer oriented market". - Discuss this statement with its pros and cons. Also suggest your opinion towards consumerism.
b) In what circumstances would you recommend an organization should pursue a market follower strategy? Elaborate your response with relevant examples.   
2.   Select a service industry you are familiar with and conduct the study of six 'how s' - namely:
a) How do you want your customers to view you?
b) How do you want your staff to view you?
c) How do you want your shareholder to view you?
d) How do you want the competition to view you?
e) How do you want your supplier to view you?
f) How do you want your community to view you?
and how do they view you right now?

Answer


1. a) "Now the Indian market has totally become the consumer oriented market". - Discuss this statement with its pros and cons. Also suggest your opinion towards consumerism.

This market orientation does have advantages. These advantages include:
• The business should be flexible to changes in demand patterns
• The business, through market research, will have a strong understanding of the needs of the customer
• New products should have a greater chance of success

Customer-Centric Alignment
A major cultural advantage of adopting the marketing orientation in your business is that you can can employees at all levels involved in one strategic mission of customer satisfaction. This requires top management emphasizing the needs and satisfaction of customers as top priorities. If all employees commit to providing what customers want, your business should do better developing quality, well-received products and earning profits on them over time.
Customer-Centric
A major advantage with a marketing orientation is that your business is built on addressing the needs of those you serve. If customers want certain features or attributes in your products, you can more quickly learn and react if you have a hand on the pulse of the marketplace. Customer-centric organizations spend significant time researching to get the best understanding of what works and doesn't work with existing offerings.
Competitive Advantage
Making your customers a top priority can be a big advantage in a competitive industry. When competitors put too much time and effort into product engineering and development, they are less equipped to build solutions that appease the demands of discerning customer markets. Knowing what customers want not only helps you develop products to suit, it helps you better market them persuasively to grow your customer base and sales levels.

Adaptability
Another significant advantage of a marketing orientation is that your company likely has its ear to the market to garner more immediate feedback from customers. This helps you improve service but also make product or service adjustments generally desired by customers. Companies that make the product the focus are often too busy focusing on product research and development that they lose sight of what customers need or want in a solution.




But there can be disadvantages to being market led. These disadvantages include:
• High cost of market research to understand the market
• Constant internal change as needs of the market are met

Unpredictability of future, especially from point of view of staff
• Abandonment of earlier product investment

Technological Advances
A knock against the marketing orientation, and a benefit cited with a product orientation, is the ability to more quickly upgrade products with advanced technology and quality features. Though more responsive, companies that do not make product improvements a focus may not have the ability to adapt as quickly to provide these quality benefits to customers. This can serve as a deterrent to cutting-edge buyers who want to get in on the latest product advances.
Production Efficiency
Another potential drawback of a customer-centric strategy is less emphasis on perpetual improvement of production processes and efficiency. New equipment and production processes emerge all the time in industries and if your company is not constantly watching for these improvements, it can fall behind. Production efficiency is critical to maintain low costs and generating strong profits. Even with a marketing orientation, your business should watch for opportunities to upgrade on production.
Less Product Differentiation
Spending more time on customer interaction and research can detract from fine-tuning your product features. Having a product differentiation strategy is more difficult with a marketing orientation. Your competitors may be able to develop more distinct features and more cutting-edge advances in their products. The hope for marketing-oriented businesses is that these more-advanced products miss the mark on what customers want or cost too much.
Lack of Predictability
A marketing orientation makes advanced planning on product development and product much more difficult. Your business must respond to the perpetual changes in consumer desires from your solutions. Marketing-oriented companies must have strong technology infrastructures and clearly defined communication channels to allow for efficient response times. Production processes must flex to the new features customers want and marketing, and sales employees need to know what benefits to use in persuasive selling.
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WHAT  IS  CONSUMERISM
1. Organized-efforts by individuals, groups, and governments to help protect consumers from policies and practices that infringe consumer rights to fairbusiness practices.
2. Doctrine that ever-increasing consumption of goods and services forms the basis of a sound economy.
3. Continual expansion of one's wants and needs for goods and services.


THE  STATEMENT  IS  TRUE.  
There are two major forces that shape who we are and what we buy. Our personal motives, attitudes, and decision-making abilities guide our consumption behavior. At the same time, our families, cultural background, the ads we see on TV, and the sites we visit on the Internet influence our thoughts and actions).
UNDERSTANDING CONSUMERS: INTERNAL FACTORS
Our consumption behavior is a function of who we are as individuals. Our thoughts, feelings, attitudes, and patterns of behavior determine what we buy, when we buy it, and how we use it. Internal factors have a major impact on consumer behavior.
Consumer motivation. A marketer's job is to figure out what needs and wants the consumer has, and what motivates the consumer to purchase. Motivation is the drive that initiates all our consumption behaviors, and consumers have multiple motives, or goals. Some of these are overt, like a physiological thirst that motivates a consumer to purchase a soft drink or the need to purchase a new suit for an interview. Other motives are more obscure, like a student's need to tote a Kate Spade bookbag or wear Doc Martens to gain social approval. Most consumption activities are the result of several motives operating at the same time. Researchers specially trained in uncovering motives often use qualitative research techniques in which consumers are encouraged to reveal their thoughts (cognitions) and feelings (affect) through probing dialogue. Focus groups and in-depth interviews give consumers an opportunity to discuss products and express opinions about consumption activities. Trained moderators or interviewers are often able to tap into preconscious motives that might otherwise go undetected. Sentence completion tasks (e.g., Men who wear Old Spice are . . .) or variants of the Thematic Apperception Tests (TAT), in which respondents are shown a picture and asked to tell a story surrounding it, are additional techniques that provide insight into underlying motives.
CONSUMER  BEHAVIOR  ARE  AFFECTED  BY
1.COGNITIVE  INPUTS>>>SOCIAL  INPUTS
-motivation______________groups
-information  processing____family
-attitudes________________culture/subculture
VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
DECISION  MAKING>>>>>CONSUMPTION BEHAVIOR
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Consumer motives or goals can be represented by the values they hold. Values are people's broad life goals that symbolize a preferred mode of behaving (e.g., independent, compassionate, honest) or a preferred end-state of being (e.g., sense of accomplishment, love and affection, social recognition). Consumers buy products that will help them achieve desired values; they see product attributes as a means to an end. Understanding the means-end perspective can help marketers better position the product and create more effective advertising and promotion campaigns.
Consumer information processing. The consumer information-processing approach aids in understanding consumptive behavior by focusing on the sequence of mental activities that people use in interpreting and integrating their environment.
The sequence begins with human perception of external stimuli. Perception is the process of sensing, selecting, and interpreting stimuli in one's environment. We begin to perceive an external stimulus as it comes into contact with one of our sensory receptorsyes, ears, nose, mouth, or skin. Perception of external stimuli influences our behavior even without our conscious knowledge that it is doing so. Marketers and retailers understand this, and they create products and stores specifically designed to influence our behavior. Fast-food chains paint their walls in "hot" colors, like red, to speed up customer turnover. Supermarkets steer entering customers directly into the produce section, where they can smell and touch the food, stimulating hunger. A hungry shopper spends more money.
Close your eyes and think for a moment about the hundreds of objects, noises, and smells surrounding you at this very moment. In order to function in this crowded environment, we choose to perceive certain stimuli while ignoring others. This process is called selectivity. Selectivity lets us focus our attention on the things that provide meaning for interpreting our environment or on the things that are relevant to us, while not wasting our limited information-processing resources on irrelevant items. Did you even notice that after you decide on, say, Florida, for your vacation destination, there seems to be an abundance of ads for Florida resorts, airline promotions for Florida, and articles about Florida restaurants and attractions everywhere? Coincidence? Not really. There are just as many now as there were before, only now you are selectively attending to them, whereas you previously filtered them out. Marketers continuously struggle to break through the clutter and grab consumers' attention. Advertising and packaging is designed to grab our attention through a host of techniques, like the use of contrast in colors and sound, repetition, and contextual placement.
Did you watch TV last night? You may have paid attention to many of the ads you saw during the commercial breaks; you may even have laughed out loud at a few of them. But how many can you recall today? Consumers' ability to store, retain, and retrieve product information is critical to a brand's success. When information is processed, it is held for a very brief time (less than one minute) in working, or short-term, memory. If this information is rehearsed (mentally repeated), it is transferred to long-term memory; if not, the information is lost and forgotten. Once transferred to long-term memory, information is encoded or arranged in a way that provides meaning to the individual. Information in long-term memory is constantly reorganized, updated, and rearranged as new information comes in, or learning takes place. Information-processing theorists represent the storage of information in long-term memory as a network consisting of nodes (word, idea, or concept) and links (relationships among them). Nodes are connected to each other depending on whether there is an association between concepts, with the length of the linkages representing the degree of the association. 2 illustrates a network model of long-term memory. When Edwin Land invented the first Polaroid instant camera, knowledge structures for cameras changed to reflect the association between photography and instant output. Now, knowledge structures are changing to reflect the new I-Zone camera.
The complete network brought to mind when a product is activated is called the product schema. Knowing the set of associations that consumers retrieve from long-term memory about a particular product or category is critical to a successful marketing strategy. For new products or services, marketers must first select the set of associations they want consumers to have. This is called positioning the product, or selecting the brand image. Peak Freans' unique positioning as an adult cookie was accomplished by establishing a link between the concept "serious" and "cookie." The brand position is then translated into clever ads, reinforced on product packaging, and integrated into all promotion and communication strategies. Over time, a brand's image can fade or become diluted. Sometimes consumers associate concepts that are not favorable to a brand. When this occurs, marketers reposition the brand, using advertising and other marketing tools to help consumers create new links to positive association and discard links to the unfavorable ones. In the mid-1990s, Hush Puppies shoes made a comeback after decades of low sales. Introducing exciting, vibrant colors, Hush Puppies repositioned their basic comfort shoe as fashionable, youth-oriented, and "cool." Strategies for successful brand extensions also depend on the brand schema. Generally speaking, a brand extension is more likely to be successful if the set of associations for the extension matches the set of associations of the core product. Would Lifesavers brand toothpaste sell? Probably not, because the associations for Lifesavers (sweet, candy, sugar, fruity) are not the same as those for toothpaste (mint, clean, noncandy). On the other hand, a Lifesavers brand sugared children's cereal with colorful, fruity rings has a much better match of associations.
Attitude formation and change. The set of beliefs consumers have stored in long-term memory provides another critical function to marketers: It provides the basis for a consumer'sattitude toward a brand or an ad. An attitude is an overall evaluation of an object, idea, or action. Attitudes can be positive or negative, and weakly or strongly held. The statement "I love Ben& Jerry's Vanilla Toffee Crunch" is a strong, positively valenced attitude toward a product. The statement "I dislike the new Toyota ad" is a weak, negatively valenced attitude toward an advertisement. Marketers work hard to continuously  monitor consumer attitudes toward their products. Among other things, attitudes can indicate problems with a product or campaign, success with a product or campaign, likelihood of future sales, and overall strength of the brand or brand equity.
A popular perspective is that attitude has three components: cognitive, affective, and co native. The cognitive component reflects the knowledge and beliefs one has about the object (e.g., "Digital Club Network is an on-line live music Internet site."), the affective component reflects feelings (e.g., "I like the Digital Club Network site") and the co native component reflects a behavioral tendency toward the object (e.g., "I will become a registered user of digitalclubnetwork.com"). Thus, attitudes are predispositions to behave in a certain way. If you have a favorable attitude toward a politician, you will likely vote for him or her in the next election. Because of this, many marketers use attitude measures for forecasting future sales. It is important to note, however, that the link between attitudes and behavior is far from perfect. Consumers can hold positive attitudes toward multiple brands but intend to purchase only one. External economic, social, or personal factors often alter behavioral plans.
Attitudes are dynamic, which means they are constantly changing. As an individual learns new information, as fads change, as time goes on, the attitudes you once held with confidence may no longer exist. Did you ever look at old photos of yourself and wonder "What was I thinking wearing clothes like that? And look at my hairstyle!"
UNDERSTANDING CONSUMERS: EXTERNAL FACTORS
In addition to the internal factors, consumer behavior is also shaped to a large extent by social factors, such as culture, family relationships, and other aspects of the external environment. Awareness of these influences can help marketers to identify groups of consumers who tend to think, feel, or act similarly and separate them into unique market segments. Aspects of the marketing programuch as product design, advertising, and pricingan then be tailored to meet the unique needs, values, and goals of these distinct groups.
Group influences on individual consumer behavior. Group influences on consumer behavior can impact motivation, values, and individual information processing; they can come from groups to which consumers already belong or from groups to which they aspire to belong (aspirational groups). Groups can exert a variety of influences on individuals, including: (1) informational influences where the group acts as a source for expert opinions; (2) comparative influences such that the group provides opportunities to manage the individual's self-concept with respect to the group's identity; and, (3) normative influences, whereby the group specifies guidelines and sanctions for appropriate or inappropriate individual behaviors.
The influence of groups on consumer behavior tends to vary with a variety of group and product-related factors. For example, the more the group is perceived to be a credible, valued source of approval or disapproval to the consumer, the more likely that consumer is to conform to group values. In addition, the more frequently group members interact, and the more outwardly visible use of the product is to group and non-group members, the greater the group's influence on individual consumption behavior.
Family influences on consumer behavior. Families have a particularly significant influence on consumer behavior. For example, consumption behavior often changes substantially as family status changes over time. Thus, young unmarried adults, who are often focused on individual self-definition, tend to purchase products that enhance or define their self-concepts. In contrast, couples with children may be more interested in purchasing items or experiences that can be shared by all family members and, as a result, may spend less on individually oriented products.
Family membership also leads to a greater need for joint rather than individual decision making, further complicating consumer behavior at the household level. For example, the person who buys a product may not be the ultimate consumer of the product. Or perhaps the husband and wife have differing levels of involvement with certain product decisions, leading to different types of separate decision processes that must be integrated before a choice is ultimately made. Understanding the dynamics involved in joint decision making and which family members influence which types of decisions has important implications for marketers interested in directing marketing efforts to the right person. Importantly, these family dynamics and lifestyle transitions are complicated by the decline in traditional households and the accompanying rise in nontraditional family structures, such as cohabitating couples or couples integrating families from previous marriages.
Cultural and sub-cultural influences on consumer behavior.Culture comprises the common meanings and socially constructed values accepted by the majority of members of a society or social group. It includes such things as shared values, beliefs, norms, and attitudes, as well as affective reactions, cognitive beliefs, and patterns of behavior. Typically, when we think of culture, we tend to think of differences among individuals from different countries or regions of the world. With the increasing globalization of the world economy, understanding differences and similarities in consumer behavior across cultures becomes increasingly meaningful, with important implications about the degree to which marketing strategies can be standardized across countries and cultures, or localized to reflect country or region-specific cultural distinctions.
One important cultural difference is the degree to which the self is defined as independent from others versus interdependent with important others. Individualistic cultures, such as the United States, tend to foster an independent sense of self, with the self believed to be a set of internal attributes unique to each person. Collectivist cultures, however, such as China, foster an interdependent sense of self, with the self believed to be inseparable from others and the social context; person-specific attributes are less important in self-definition than are interpersonal relations. These differences in self-definition affect a variety of consumer behaviors, including emotional reactions to advertisements, the degree to which information from others is valued when making consumption decisions, and gift-giving behavior.
In addition to cultural differences that exist across countries, marketers are also increasingly recognizing the importance of cultural differences within a society. Subcultures are distinctive groups within a society that share common meanings. Subcultures can often be identified based on demographic characteristics, such as geographic location (e.g., the southern United States), ethnicity (e.g., Hispanic Americans), or age (e.g., baby-boomers). Polaroid's I-Zone camera is targeted in the United States to appeal to the teenage subculture.
Subcultures can also be identified based on common lifestyles. For example, a strong subculture exists around Harley-Davidson motorcycles and the Harley Owner's Group (HOG). Members of this group share a core cultural value of personal freedom, which is exemplified in both the experience of using the product (taking to the open road) and in the company's marketing strategy (e.g., the open-winged insignia ]. Importantly, identification of lifestyle subcultures, and the corresponding development of an inventory of shared meanings, is typically more difficult than the development of such understanding of subcultures based on observable demographic characteristics.
Increasingly, Internet marketers have come to realize the value of subculture segments and have tailored product offerings and/or Web site content to appeal to particular subcultures, most often demographically based, and to foster a greater sense of community and connection among subculture members. For example, iVillage.com features content of particular interest to women and offers forums for discussion of issues relevant to its users. Similarly, His panic.com aims to provide services and information to Hispanic Americans as well as to provide a virtual meeting space for Hispanic Americans to meet and help one another. These represent early attempts to use the Internet to target and serve subculture populations. Future sites are likely both to target more narrowly defined subcultures (e.g., Hispanic Americans with an interest in gourmet cooking) and to focus on reaching more lifestyle-based subcultures.
THE CONSUMER DECISION-MAKING PROCESS
What consumers think and the social environment they live in determine what they buy and how that purchase decision is made. Typically, the decision process is described as a series of five stages. The first stage, need recognition, occurs when consumers perceive a difference between their ideal and actual states. Need recognition is often prompted by persuasive advertising. Consumers then begin the information searchprocess by conducting an internal search of their own knowledge structures, followed by an external search for information from friends, family members, salespeople, and advertisements. This step can clarify the problem, providing criteria to use for assessing product alternatives and resulting in a subset, or "consideration set," of potential choices. These options are then assessed more completely in the third stage,alternative evaluation. In this stage, products in the consideration set are compared with one another. Sometimes a simple heuristic rule of thumb, such as "I'm going to buy the cheapest product" is used. At other times a more complex strategy, such as a weighted-average model that compensates for product strengths and weaknesses, is used. After examining each alternative, consumers are ready to purchase, the fourth step in the decision process. Finally, after buying, the consumers enter thepost-purchase phase of the process, during which the performance of the chosen alternative is evaluated in light of prior expectations. Consumers will be satisfied with the product if it meets or exceeds expectations; dissatisfaction occurs if the product does not meet expectations.
This model of consumer behavior, while very useful, is highly simplified and does not always accurately reflect the decision process consumers follow. Consumers may not always proceed linearly through the five steps as described, and sometimes they may skip certain steps entirely. However, the model is a close approximation of the process for most consumers for most purchase occasions.
We are all consumers. Understanding why we behave as we do is integral to an efficient transfer of goods and services in a market-driven economy.

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b) In what circumstances would you recommend an organization should pursue a market follower strategy? Elaborate your response with relevant examples.
Market Follower – a market follower position can be profitable as it may be possible to take a share of the large market created by the market leader, for example by copying the brand leader at a lower price, or making something better or cheaper. For example, the soft drinks producer Corrs entered the UK market by developing an acceptable own brand alternative to Coke – the market was sufficiently large for some Coke drinkers to accept a different but cheaper Cola drink.
the market follower strategy. It doesn't have as large a potential as the market leader approach, but it also doesn't require the huge resources of the latter approach. The top three behaviors of this approach are to: 1) upset the cart, 2) get noticed and 3) hitch-a-ride.
First is to upset the cart. Here the choice is to create innovations that the market leaders must address. The tactic is to force the leaders to change their standards to address your innovations. A positive result would increase your market share and your influence in the market. This is exemplified by Google(TM). They are forcing the market leaders to change their perspective. This business plan tactic takes great skill, great financing and business stubbornness. Ultimately, you are trying to get the market leaders to blink. This is something the leaders don't want to do and work to avoid.
Second, you want the market to turn their head to you. This is similar to someone trying to attract a potential new friend. You do things that get you noticed in a positive light by the market and to establish the business as important to be associated with. Your business plan isn't to directly challenge the market leaders, but to get them to notice and respond to innovations you have proposed and introduced. This tactic is often used by startups to position them for purchase by a market leader. Your goal is to defend your position and instill new customer desires into the market. If you are successful, you could become a market leader or a purchase candidate.
Finally is the hitch-a-ride strategy. This business plan strategy is normally associated with companies in industries that are stable. This company type is content to just follow the pack. They typically don't innovate nor challenge the industry with new ideas. It's like they are worn out or have grown old. They just plod along taking what they can get, changing very little and running along with every one else. While they can survive and make money, they are not stars and will not be market leaders unless they make significant changes in how they do business. Of all the strategies, this is a dangerous one for a new company and it is not recommended that a business plan be created with this type of new business in mind.
As has been shown, there are many strategies that aren't very aggressive. They are not star strategies and they won't make the huge profits that other types of more aggressive strategies will. As a new business, you should consider a more aggressive stance so that the chances of reward are much greater. True, other strategies are more risky, but so are the rewards.
It is recommended that a more aggressive business plan and business be envisioned than those of the strategies enumerated here. To accomplish this, you would be better using a market leader strategy. There are both more rewards and risks, but the company will be more vibrant.



4. Adapter: The adapter takes the leader’s products and adapts or improves them. The adapter may choose to sell to different markets, but often the adapter grows into the future challenger, as many Japanese firms have done after adapting and improving products developed elsewhere.
What does a follower earn? The follower normally earns less than the leader. For example, a study of food-processing companies showed the largest firm averaging a 16% return on investment; the number two firm, 6%; the number-three firm,-1%, and the number-four firm,-6%. In this case, only the top two firms have profits. No wonder jack Welch, former CEO of GE, told his business units that each must reach the number-one or number-two position in its market. Following the leader is often not a rewarding path.
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2. Select a service industry you are familiar with and conduct the study of six 'how s' - namely:

COURIER   SERVICE

a) How do you want your customers to view you?
A  BUSINESS  PERSON,  WHO   OFFER  VALUE  FOR  MONEY  SERVICE.
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b) How do you want your staff to view you?
AN  UNDERSTANDING   SITUATIONAL  LEADER,  WHO   OFFERS
Motivation People with Existence Needs
• Pay people enough
• Workplace safe and good environment
• Incentives – employee of the month
• Set goals
• Treat people as individuals

Motivating People with Relatedness Needs
• Show respect
• Delegate – give responsibility
• Give recognition
• Communicate
• Involve people in decision-making
• Encourage ideas
• Praise people
• Get to know people
• Team building days and office away days
• Celebrate success

Motivating People with Growth Needs
• Offer support to complete new tasks
• Give staff and employees a challenge
• Work should be made interesting
• Encourage people to think for themselves
• Keep people informed
• Ask people what motivates them
• Stretch people with new work
• Offer training where possible
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c) How do you want your shareholder to view you?
A  SOUND  BUSINESS  ORIENTED  PERSON, WHO  OFFERS  THE  SHAREHOLDERS  A  GOOD  RETURN  ON  INVESTMENT.
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d) How do you want the competition to view you?
A   WELL  RESPECTED/  REAL  HONEST COMPETITOR.
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e) How do you want your supplier to view you?
A  HONEST  BUSINESS  PERSON,  WHO  KEEPS   HIS WORD  ON  THE  SUPPLY   CONTRACT  AND  PAYS  ON  TIME.
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f) How do you want your community to view you?  and how do they view you right now?
A  BUSINESS  PERSON  WHO  KEEPS  HIS  WORD  ON THE  SOCIAL  RESPONSIBILITY
AND  PROVIDES  SUPPORT  TO  THE  COMMUNITY PROGRAM.
THE  SAME .
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