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1 | P a g e Marketing 1. What is Marketing Mix? Marketing: Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. It is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. In simple way “putting the right product in the right place, at the right price, at the right time.” Marketing Mix: The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4Ps make up a typical marketing mix - Price, Product, Promotion and Place. However, nowadays, the marketing mix increasingly includes several other Ps like Packaging, Positioning, People and even Politics as vital mix elements. Understanding the Tool The marketing mix and the 4 Ps of marketing are often used as synonyms for each other. In fact, they are not necessarily the same thing. "Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way – probably the best-known way – of defining the marketing mix, and was first expressed in 1960 by E J McCarthy. The 4Ps are: 1) Product (or Service). 2) Place. 3) Price. 4) Promotion. A good way to understand the 4Ps is by the questions that you need to ask to define your marketing mix. Here are some questions that will help you understand and define each of the four elements: 1. Product/Service What does the customer want from the product/service? What needs does it satisfy? What features does it have to meet these needs? Are there any features you've missed out? Are you including costly features that the customer won't actually use? How and where will the customer use it? What does it look like? How will customers experience it? What size(s), color(s), and so on, should it be? What is it to be called? How is it branded? How is it differentiated versus your competitors? What is the most it can cost to provide, and still be sold sufficiently profitably? (See also Price, below). 2 | P a g e 2. Place Where do buyers look for your product or service? If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue? How can you access the right distribution channels? Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies? What do you competitors do, and how can you learn from that and/or differentiate? 3. Price What is the value of the product or service to the buyer? Are there established price points for products or services in this area? Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin? What discounts should be offered to trade customers, or to other specific segments of your market? How will your price compare with your competitors? 4. Promotion Where and when can you get across your marketing messages to your target market? Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct marketing mailshot? Through PR? On the Internet? When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions? How do your competitors do their promotions? And how does that influence your choice of promotional activity? The 4Ps model is just one of many marketing mix lists that have been developed over the years. And, whilst the questions we have listed above are key, they are just a subset of the detailed probing that may be required to optimize your marketing mix. Amongst the other marketing mix models have been developed over the years is Boom and Bitner's 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus people, processes and physical layout decisions. Another marketing mix approach is Lauterborn's 4Cs, which presents the elements of the marketing mix from the buyer's, rather than the seller's, perspective. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion). In this article, we focus on the 4Ps model as it is the well-recognized, and contains the core elements of a good marketing mix. 3 | P a g e 2. Differentiate between Sales & Marketing. SELLING MARKETING Needs of the Seller Needs of the buyer Focuses on product sales for revenue Focuses on customer needs Company manufactures and then sells it Determines customer needs and then delivers the product. Views business as goods producing and selling process Views business as consumer satisfying process Planning is short term oriented Planning is long term oriented. Selling customer is the last link Marketing views customer as the very beginning link Sales is 1:1. Marketing is 1: many. Sales is relationship driven. Marketing is data driven. Salespeople don’t develop products. Marketers do. Sales is very track-able. Marketing is not. Sales is about sales. Marketing is about more than sales. 3. Explain Positioning. A marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer. Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. Also called product positioning. Definition: Positioning defines where your product (item or service) stands in relation to others offering similar products and services in the marketplace as well as the mind of the consumer. Description: A good positioning makes a product unique and makes the users consider using it as a distinct benefit to them. A good position gives the product a USP (Unique selling proposition). In a market place cluttered with lots of products and brands offering similar benefits, a good positioning makes a brand or product stand out from the rest, confers it the ability to charge a higher price and stave off competition from the others. A good position in the market also allows a product and its company to ride out bad times more easily. A good position is also one which allows flexibility to the brand or product in extensions, changes, distribution and advertising. If we don't define our product or service, a competitor will do it for us. Our position in the market place evolves from the defining characteristics of our product. The primary elements of positioning are: Pricing - Is your product a luxury item, somewhere in the middle, or cheap, cheap, cheap. 4 | P a g e Quality - Total quality is a much used and abused phrase. But is your product well produced? What controls are in place to assure consistency? Do you back your quality claim with customer-friendly guarantees, warranties, and return policies? Service - Do you offer the added value of customer service and support? Is your product customized and personalized? Distribution - How do customers obtain your product? The channel or distribution is part of positioning. Packaging - Packaging makes a strong statement. Make sure it's delivering the message you intend. Positioning is our competitive strategy. What's the one thing we do best? What's unique about our product or service? We have to identify our strongest strength and use it to position our product. 4. Differentiate between Advertising & Sales Promotion. Advertising and sales promotions are two marketing terms that are often used interchangeably by marketers. But they are different and they both have distinct definitions and uses. It is important to understand the role each plays in reaching today's ever more elusive consumer. Advertising positions a product or service against that of competitors to convey a brand message to consumers and to enhance its value in the consumer's eyes. A television commercial for a brand new automobile emphasizing the car's new features and styling is an example of advertising. Sales promotions include a variety of strategies designed to offer purchasers an extra incentive to buy, usually in the short-term. Examples of sales promotions include cents-off coupons, two-for-the-price- of-one sales and double coupons at the grocery store, all for a limited period of time. The key difference between advertising and sales promotion is the nature of the appeal to the consumer. Advertising is emotional in nature and the objective is to create an enduring brand image. Perfumes, makeup and jewelery need imaginative advertising to create the allure needed to sell these products. Sales promotions, on the other hand, are unemotional in their approach. A cents-off coupon for cereal appeals to the consumer's rational mind and is a sales promotion. The consumer weighs the price of one cereal brand versus others. Brand equity and identity typically develop over the longer term. Many advertising exposures are required for the consumer to feel the emotional pull a product might offer. Advertising develops this relationship over time. Sales promotions are after shorter-term gains in market share and the main message to the consumer is not necessarily brand-oriented. Rather it is an appeal to act immediately to purchase the product. Advertising uses indirect and subtle methods to create a brand image while sales promotions are much more direct. Advertising for a cell phone service might emphasize the coverage area and the many styles of phones available. A cell phone sales promotion might emphasize a free phone for signing a two-year contract if sign-up is within the next month. Advertising is a message which promotes ideas, goods or services communicated through one or more media by a sponsor while Sales Promotion consists of short-term incentives provided by a sponsor to consumers and traders to persuade them to purchase products. 5 | P a g e Differences between Advertising and Sales Promotion are: Advertising 1. A reason is offered to buy. 2. Theme is to build up brand loyalty. 3. Aim is to attract the ultimate Consumer. 4. Effective in the long run. 5. Heavy Advertising makes the brand image of the product and accord it the perception of higher quality. Sales Promotion 1. An incentive is offered to buy. 2. Theme is to break down the loyalty to a competing brand. 3. Aim is to attract not only Consumers but retailers, wholesalers and sellers force also. 4. Effective in the short run. 5. Heavy Sales Promotion leads to the product being perceived as having a brand image of cheaper and lower quality product. Advertising Promotion Time Long term Short term Definition One-way communication of a persuasive message by an identified sponsor, whose purpose is non-personal promotion of products/services to potential customers. A Promotion usually involves an immediate incentive for a buyer (intermediate distributor or end consumer). It can also involve disseminating information about a product, product line, brand, or company. Price Expensive in most cases Not very expensive in most cases. Suitable for Medium to large companies Small to large companies Sales Assumption that it will lead to sales Directly related to sales. Example Giving an advertisement in the newspaper about the major products of a company Giving free products, coupons etc. About A type of marketing tool A type of marketing tool Purpose Increase sales, brand building. Increase sales. Result Slowly very Soon 6 | P a g e 5. What is Niche Marketing? Market Niche: A small but profitable segment of a market suitable for focused attention by a marketer. Market niches do not exist by themselves, but are created by identifying needs or wants that are not being addressed by competitors, and by offering products that satisfy them. Niche Marketing: Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Also called micromarketing or Beach-head marketing/strategy. A niche is a focused, targetable part of the market. You are a specialist providing a product or service that focuses on specific client group’s needs, which cannot or are not addressed in such detail by mainstream providers. However, it is important to understand that there is a difference between your niche and your target market: Your target market is the specific group of people you work for e.g. women in the City, dog owners, creative female freelancers, ceramic collectors, and brides to be, outdoor galleries. Your niche is the service you specialise in offering to your target market. For example various design businesses can have creative freelancers as their client group: a design company can offer them web design and app development, another company can offer them branding advice or photography. It is the combination of target market and specific service that creates a niche market. 6. Discuss Strategic Planning. A systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them. In contrast to long-term planning (which begins with the current status and lays down a path to meet estimated future needs), strategic planning begins with the desired-end and works backward to the current status. At every stage of long-range planning the planner asks, "What must be done here to reach the next (higher) stage?" At every stage of strategic-planning the planner asks, "What must be done at the previous (lower) stage to reach here?" Also, in contrast to tactical planning (which focuses at achieving narrowly defined interim objectives with predetermined means), strategic planning looks at the wider picture and is flexible in choice of its means. Strategic Planning is a management tool that helps an organization focus its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization's direction in response to a changing environment. In short, strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. 7 | P a g e The process is strategic because it involves preparing the best way to respond to the circumstances of the organization's environment, whether or not its circumstances are known in advance; non-profits often must respond to dynamic and even hostile environments. Being strategic, then, means being clear about the organization's objectives, being aware of the organization's resources, and incorporating both into being consciously responsive to a dynamic environment. The process is about planning because it involves intentionally setting goals (i.e., choosing a desired future) and developing an approach to achieving those goals. The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. The process raises a sequence of questions that helps planners examine experience, test assumptions, gather and incorporate information about the present, and anticipate the environment in which the organization will be working in the future. Finally, the process is about fundamental decisions and actions because choices must be made in order to answer the sequence of questions mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Because it is impossible to do everything that needs to be done in this world, strategic planning implies that some organizational decisions and actions are more important than others - and that much of the strategy lies in making the tough decisions about what is most important to achieving organizational success. 7. Differentiate between Core Competency & Competitive Advantage. Distinction between Competitive Advantage and Core Competence: 1. A competitive advantage does not necessarily imply a core competence while a core competence does imply a number of competitive advantages. 2. A competitive advantage does not constitute a sure success formula for a firm over a long term; a core competence usually does. 3. A core competence provides a lasting superiority to the company while a competitive advantage provides a temporary competitive superiority. And behind any lasting competitive superiority, one can always find a core competence. 4. While a competitive advantage accrues from a functional strength in any of the manifold functions performed by a firm, a core competence does not normally accrue from functional strength. The strength has to be at the root of businesses and product; it has to be core strength like a unique capability in technology or process. 5. A competitive advantage helps a firm in a specific and limited way; a core competence helps it in a general, far-reaching and multifaceted manner. A competitive advantage provides competitive strength to the firm in a given business or product. A core competence helps the firm to excel in a variety of businesses and products. To conclude, a core competence is fundamental and unique to a firm. A competitive advantage can be easily imitated and competitors catch up fast. Core competence is an exclusive and inimitable preserve of a firm. It is long lasting; competitors cannot easily catch up with the firm. Competitive advantages are not unique to any firm over the long term. 8 | P a g e 8. Explain Target Costing. Target Cost is an estimate of a product cost which is derived by subtracting a desired profit margin from a competitive market price. Target costing is a pro-active cost control system. Techniques such as value analysis are used to change production methods and/or reduce expected costs so that the target cost is met. Target costing is a system under which a company plans in advance for the price points, product costs, and margins that it wants to achieve for a new product. If it cannot manufacture a product at these planned levels, then it cancels the design project entirely. With target costing, a management team has a powerful tool for continually monitoring products from the moment they enter the design phase and onward throughout their product life cycles. It is considered one of the most important tools for achieving consistent profitability in a manufacturing environment. Target costing is a process of determining the actual cost price of any product or service after considering the desired profit margin behind the same. Formula Target Cost = Expected selling price – Desired profit It helps in completing the product within the set price by changing the process for the same or by making the existing process more efficient. The process of target costing is as below: 1. Identification of customer needs and wants 2. Selling price is planned for the needs. 3. Target cost identified which is Expected selling price – Desired profit 4. Product is designed, manufacturing process is fixed and suppliers are identified keeping the price in consideration. 5. The sample product is produced that meets the target and the production starts for selling purposes and the product is launched. Target costing involves setting a target cost by subtracting a desired profit margin from a competitive market price. A lengthy but complete definition is "Target Costing is a disciplined process for determining and achieving a full-stream cost at which a proposed product with specified functionality, performance, and quality must be produced in order to generate the desired profitability at the product’s anticipated selling price over a specified period of time in the future." This definition encompasses the principal concepts: products should be based on an accurate assessment of the wants and needs of customers in different market segments, and cost targets should be what result after a sustainable profit margin is subtracted from what customers are willing to pay at the time of product introduction and afterwards. These concepts are supported by the four basic steps of Target Costing: 9 | P a g e 1. Define the Product 2. Set the Price and Cost Targets 3. Achieve the Targets 4. Maintain Competitive Costs. Japanese companies have developed target costing as a response to the problem of controlling and reducing costs over the product life cycle. Objectives of Target Costing The fundamental objective of target costing is very straightforward. It is to enable management to manage the business to be profitable in a very competitive marketplace. In effect, target costing is a proactive cost planning, cost management, and cost reduction practice whereby costs are planned and managed out of a product and business early in the design and development cycle, rather than during the latter stages of product development and production. 9. What is Market Skimming Strategy? Definition: An approach under which a producer sets a high price for a new high-end product (such as an expensive perfume) or a uniquely differentiated technical product (such as one-of-a-kind software or a very advanced computer). Its objective is to obtain maximum revenue from the market before substitutes products appear. After that is accomplished, the producer can lower the price drastically to capture the low-end buyers and to thwart the copycat competitors. A product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price- sensitive segment. Therefore, the skimming strategy gets its name from skimming successive layers of "cream," or customer segments, as prices are lowered over time. Firms often use this technique to recover the cost of development. Skimming is a useful strategy when: 1. There are enough prospective customers willing to buy the product at the high price. 2. The high price does not attract competitors. 3. Lowering the price would have only a minor effect on increasing sales volume and reducing unit costs. 4. The high price is interpreted as a sign of high quality. Reasons for price skimming Price skimming occurs in mostly technological markets as firms set a high price during the first stage of the product life cycle. The top segment of the market which are willing to pay the highest price are skimmed of first. When the product enters maturity the price is then gradually lowered. 10. Discuss the Causes for Channel Conflicts. Answer in the pdf 10 | P a g e 11. What is Costing Leadership? Definition: Strategy used by businesses to create a low cost of operation within their niche. The use of this strategy is primarily to gain an advantage over competitors by reducing operation costs below that of others in the same industry. Cost leadership is a concept developed by Michael Porter, used in business strategy. It describes a way to establish the competitive advantage. Cost leadership, in basic words, means the lowest cost of operation in the industry. The cost leadership is often driven by company efficiency, size, scale, scope and cumulative experience (learning curve). A cost leadership strategy aims to exploit scale of production, well defined scope and other economies (e.g. a good purchasing approach), producing highly standardized products, using high technology. In the last years more and more companies choose a strategic mix to achieve market leadership. This patterns consist in simultaneous cost leadership, superior customer service and product leadership. Cost leadership is different from price leadership. A company could be the lowest cost producer, yet not offer the lowest-priced products or services. If so, that company would have a higher than average profitability. However, cost leader companies do compete on price and are very effective at such a form of competition, having a low cost structure and management. 12. Explain Differentiation. Definition: Approach under which a firm aims to develop and market unique products for different customer segments. Usually employed where a firm has clear competitive advantages, and can sustain an expensive advertising campaign. It is one of three generic marketing strategies (see focus strategy and low cost strategy for the other two) that can be adopted by any firm. Differentiation strategy: Marketing technique used by a manufacturer to establish strong identity in a specific market; also called segmentation strategy. Using this strategy, a manufacturer will introduce different varieties of the same basic product under the same name into a particular product category and thus cover the range of products available in that category. For example, a soda company that offers a regular soda, a diet soda, a decaffeinated soda, and a diet-decaffeinated soda all under the same brand name is using a differentiation strategy. Each type of soda is directed at a different segment of the soda market, and the full line of products available will help to establish the company's name in the soda category. This technique is quite costly to the advertiser because each individual product must be marketed independently, since separate marketing strategies are necessary for each market segment. Positioning a brand in such a way as to differentiate it from the competition and establish an image that is unique; for example, the Wells Fargo Bank positions itself as the bank that opened up the West. Also called product differentiation. 13. What is Segmentation? How do you Segment the Market? Answer in the pdfs 11 | P a g e 14. What is Brand Equity? Definition: A brand's power derived from the goodwill and name recognition that it has earned over time, which translates into higher sales volume and higher profit margins against competing brands. The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability. Mass marketing campaigns can also help to create brand equity. If consumers are willing to pay more for a generic product than for a branded one, however, the brand is said to have negative brand equity. This might happen if a company had a major product recall or caused a widely publicized environmental disaster. The additional money that consumers are willing to spend to buy Coca Cola rather than the store brand of soda is an example of brand equity. One situation when brand equity is important is when a company wants to expand its product line. If the brand's equity is positive, the company can increase the likelihood that customers will buy its new product by associating the new product with an existing, successful brand. For example, if Campbell's releases a new soup, it would likely keep it under the same brand name, rather than inventing a new brand. The positive associations customers already have with Campbell's would make the new product more enticing than if the soup had an unfamiliar brand name. 15. Explain Product Life Cycle? Definition: Product life cycle (PLC) is the cycle through which every product goes through from introduction to withdrawal or eventual demise. Description: These stages are: Introduction: When the product is brought into the market. In this stage, there's heavy marketing activity, product promotion and the product is put into limited outlets in a few channels for distribution. Sales take off slowly in this stage. The need is to create awareness, not profits. The second stage is growth. In this stage, sales take off, the market knows of the product; other companies are attracted, profits begin to come in and market shares stabilize. The third stage is maturity, where sales grow at slowing rates and finally stabilize. In this stage, products get differentiated, price wars and sales promotion become common and a few weaker players exit. The fourth stage is decline. Here, sales drop, as consumers may have changed, the product is no longer relevant or useful. Price wars continue, several products are withdrawn and cost control becomes the way out for most products in this stage. Significance of PLC: PLC analysis, if done properly, can alert a company as to the health of the product in relation to the market it serves. PLC also forces a continuous scan of the market and allows the company to take corrective action faster. But the process is rarely easy. 12 | P a g e There is no set schedule for the stages of a product life cycle. Differences will occur depending on the type of product, how well it is received by the market, the promotional mix of the company, and the aggressiveness of the competition. 16. Dealer Development strategies. Answer in the pdfs 17. Retail - The Indian Story. Answer in the pdfs 18. Difference between B2B and B2C sales. Size of B2B vs. B2C Markets B2B markets are generally small vertical markets, often niche in size, comprised of a few thousand sales prospects to maybe as large as 100,000 prospects B2C markets that are typically large broad markets of tens to thousands to millions of sales prospects Purchasing Process B2B sales typically have a purchasing process that is usually defined in months and the sale is complex, often taking additional months to complete. B2C sales have short purchasing periods of anywhere from a few minutes (the impulse buy), to a few days and is a simple sale consummated immediately. Sales Process B2B sales require consultative selling(selling based on understanding a client's needs and developing a relationship of trust) sometimes from a two-step level sales organization including the seller's sales force and distribution sales force. B2C sales are usually direct to the consumer or involve a retailer. The sales approach is a traditional product sell of "convincing the consumer" they need the product or service being sold. Cost of a Sale B2B sales are "higher ticket" purchases usually costing from just a few thousand dollars to tens of millions of dollars. B2C sales can range in cost from a dollar to a few thousand dollars. Except, for cars and homes. Purchase Decision 13 | P a g e The decision to purchase in B2B sales is generally driven by need and budgets therefore; it tends to be a very rational decision. B2C purchase decisions tend to be made based on want more than need or a budget and, therefore, are triggered by more emotional decisions. The Value of Brand Brand identity in B2B markets is created through personal relationships and consultative selling. Brand identity in B2C markets is created through advertising and now social media. Lifetime Customer Value The lifetime value of B2B customers is much higher due to the higher cost of sales and the likelihood of repeat or add-on sales to the same customer. The lifetime value of a B2C customer is lower than B2B because of the lower cost of individual sales and repeat sales are generally fewer. These B2B versus B2C marketing differences are crucial to your marketing strategy and tactics. Knowing your target audience, developing an appropriate B2B marketing message, and the distribution methods of your communication messages are very different, if you are a B2B versus B2C Company. Using big business consumer marketing tactics are not cost effective and are not likely to produce the new business-to-business clients you seek. Your Bottom Line: B2B sales prospects are very different from B2C. B2B sales prospects are found in small vertical markets require consultative selling and take longer to sell. B2B sales are "higher ticket" sales driven by a rational sales approach that requires developing personal relationships. The payoff for B2B sales prospects is a high lifetime customer value. Knowing the marketing differences between B2B versus, B2C are just the beginning steps to achieving B2B sales lead prospecting success. 14 | P a g e 19. Explain De-marketing & Planned Obsolescence. *De-marketing Definition: Efforts aimed at discouraging (not destroying) the demand for a product which (1) a firm cannot supply in large-enough quantities, or (2) does not want to supply in a certain region where the high costs of distribution or promotion allow only a too little profit margin. Common DE marketing strategies include higher prices, scaled-down advertising, and product redesign. It is a strategy in which marketers intentionally try to bring down the demand of a product. In this case effort is made to decrease and not to destroy the demand. It is usually done in the following cases: 1. When the demand is more than production capacity of the company 2. DE marketing is done in a particular region when that market is unprofitable 3. To achieve a lowered demand, marketers use methods like raising prices, providing lesser margins, decreasing advertising and promotion spends or introduction of new packaging. De-marketing: The process of reducing the demand for a product or decreasing consumption. Marketing aimed at limiting market growth; for example, some governments practice de-marketing to conserve natural resources and organizations use a de-marketing approach when there is so much demand that they are unable to serve the needs of all potential customers adequately. Efforts aimed at discouraging (not destroying) the demand or a product which (1) a firm cannot supply in large-enough quantities, or (2) does not want to supply in a certain region where the high costs of distribution or promotion allow only a too little profit margin. Common de-marketing strategies include higher prices, scaled-down advertising, and product redesign. Example: A case in point would be the example of IPCL (Indian Petrochemicals Corporation Limited) which de-markets its own product saying “Save Oil Save India”. The impetus here is not to stave away the consumers, it is the fact that oil being a finite resource product should be used carefully to maximize its utility. Another example: Experts feel that Apple has done a good job of de marketing its products. For that, it has used pricing as a strategic tool to keep its product safely inside its target consumer segment. Though the prices of iPhone were brought down to $399, Apple can still lower the prices which it chooses not to do. Not surprisingly, there is a 4P of de-marketing too which is based on the exclusivity of the product, place, price and promotions. DE marketing basically refers to when a company discourage its customers to buy the product produced by them. There are many reasons of adopting this strategy. It’s because of shortage of supply, want to promote their other products and the company is not having so much profit with the sale of that product. For this companies stop promoting that product or start promoting others. for example: This happened in case of Tata Nano, when the demand for Tata Nano increased from its supply level then Tata started promoting their other products and completely stopped the promotion of Tata Nano. Other example is: when Maruti A-star was launched, for the promotion of A-star Maruti started discoursing its customers to buy Maruti Xtilo. 15 | P a g e **DEFINITION OF 'PLANNED OBSOLESCENCE' Definition: Business practice of deliberately outdating an item (much before the end of its useful life) by stopping its supply or service support and introducing a newer (often incompatible) model or version. Its objective is to prod the consumer or user to abandon the currently owned item in favour of the 'upgrade.' Most prevalent in computer hardware and software industry. A manufacturing decision by a company to make consumer products in such a way that they become out-of-date or useless within a known time period. The main goal of this type of production is to ensure that consumers will have to buy the product multiple times, rather than only once. This naturally stimulates demand for an industry's products because consumers have to keep coming back again and again. Products ranging from inexpensive light bulbs to high-priced goods such as cars and buildings are subject to planned obsolescence by manufacturers and producers. Also known as "built-in obsolescence". 'PLANNED OBSOLESCENCE' Explanation: Planned obsolescence does not always sit well with consumers, especially if competing companies offer similar products but with much more durability. Pushing this production too far can result in customer backlash, or a bad reputation for a brand. However, planned obsolescence doesn't always have such a negative connotation. Companies can engage in this activity solely as a means of controlling costs. For example, a cell phone manufacturer may decide to use parts in its phones that have a maximum lifespan of five years, instead of parts that could last 20 years. Its unlikely most consumers will use the same cell phone five years after purchase, and so the company can lower input costs by using cheaper parts without fearing a customer’s backlash. Planned obsolescence tends to work best when a producer has at least an oligopoly. Before introducing a planned obsolescence, the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence, there is an information asymmetry between the producer – who knows how long the product was designed to last – and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. For example, when Japanese vehicles with longer lifespans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products.