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In order to develop a marketing programme in an organization, management must first prepare a strategic plan for the total organizational effort. This strategic plan can be followed and used by various functional divisions in the organization such as marketing.
Different organizations approach strategic planning in different ways. The approach outlined in this topic is just one of many alternatives. Successful organizations share some common characteristics. These characteristics are based on effective strategic planning and a strong focus on organizational direction. Organizational goals and strategies are communicated to employees and coordinated at all levels of the organization.
While the process of strategic planning starts at the top of the organization, all managers, team leaders and team members have a role to play in the strategic planning process. Managers and team leaders are also involved in constructing functional and tactical plans based on the broad strategy and putting these plans into action.
Strategic planning assists organizations in managing a constantly changing business environment, identifying changes and threats that have the potential to affect the organization, as well as positioning the organization to capitalize on opportunities. The outcome of an effective strategic planning process is maintenance of the organisation’s competitive advantage.
Strategic planning can be seen as developing a road map to help organizations clarify their objectives, navigate through change and successfully complete in the marketplace.
1. Situation analysis to bridge the gap: Once you have collected information about an organisation’s external environment, it can be analysed at a higher level to give a picture of where the organization sits within its environment.
SWOT Analysis:
This analysis of an organizations external, as well as internal environment is often achieved with a technique known as a SWOT analysis – the first letters of the four words standing for strengths, weakness, opportunist and threats
These can be further categorized into aspects of the internal or external environment of the organization.

Internal environment
External environment
A SWOT analysis can be viewed as a reality check for the organization. Any strategies developed should take advantage of the organisation’s strengths, recognize its weaknesses, counter external threats and capitalize on its opportunities
Strengths and weaknesses:    
Strength as basis of competitive advantage:
Strengths form the basis of an organisation’s competitive advantage. In addition to existing strengths this includes characteristics that could be developed as strengths.
Some useful questions an organisation can ask itself at this stage in the planning process are: ’What is unique about our organization?”, What is out special expertise?”, “What do we do better than our competitors?”, “In what areas are we not so good?”, “Which products are successful and why?”.
Those involved in the strategic planning process should seek input on these questions from employees as well as those external to the organization – customers, investors and shareholders.
In looking in at its internal environment, an organization also needs to assess other resources such as financial, human resources and systems capabilities. Additional capital might be needed if the organization is about to undergo an expansion programme. Additional employees with different skills and experience might be required.
Why choose us over our competitors?
Central to the whole process of strategic planning is identifying the company’s key competitive advantage or strategic driving force. In other words, why do customers, shareholders and employees choose one particular organization over its competitors? For example, an organization might have a competitive advantage in customer service because it handles customer enquiries more effectively that its competitors. Other factors providing organsations with a competitive advantage include product quality, product range and price, markets, technical know-how and distribution strategy.
Can internal strengths be translated into customer value?
It is important to not that competitive advantage is defined by the key stakeholder, in our example, the customer. Internal strengths of the organization, such as superior computer systems, only become a competitive advantage if they can be translated into something of value to the customer.
Opportunities and threats:
Sometimes environmental conditions favour an organization in securing or improving a competitive advantage, and opportunities arise to further improve its position. The same change could be interpreted as either a threat or an opportunity by different companies. This can occur when there is a change in legislation. The organization should therefore ask itself, ‘Are there conditions that could jeopardize our competitive position?’
There are a number of recent examples illustrating how a change in legislation can impact significantly on a financial services organisation’s competitive position.
And as an industry that is subject to a broad range of regulatory controls, no financial services organization can take for granted that current market conditions will continue. Consider the range of regulatory changes that have taken place over the past 15 years and their impact on the operations of players in this market.
Threats occur when environmental conditions signal potential problems that might jeopardize an organisation’s competitive position. A common source of threats is competitor organizations as well as current competitors and their strengths and weaknesses.
Sources of competitive information:
Sources of competitive information could include the following:
  • Publications and promotional material
  • Investor and customer information
  • Employees, including salespeople
  • Customers
  • Trade shows and exhibitions
  • Media
Care needs to be taken with how competitive information is obtained. For example, making an investment in a rival fund manager’s product could be an acceptable and useful way of gaining an insight into your competitor’s customer communications.
1. Why do organizations invest so many resources in strategic planning?
2. What are some of the underlying questions that need to be answered for an organization to develop:
a. A vision statement?
b. A corporate strategy?
3. Compare product expansion and product diversification market growth strategies.
4. How is a SWOT analysis carried out?
1. Strategic planning can assist an organization to anticipate change, increase performance and maintain competitive advantage. Correctly done, planning will provide a framework for decision making al all levels. Organisation can be better prepared to respond to threats and opportunities.
2. a. Vision decisions might start with questions such as:
  • ‘Why does the organization exist’?
  • ‘Why are we doing what are we doing’?
  • What should we be doing’?
b. Corporate strategy and tactical decisions might start with questions such as:    
  • ‘How do we get ther’?
  • ‘When are we getting there’?
  • ‘Who do we need to help us to get there’?
3. Product expansion strategies involve developing new products or services into an existing market, while product diversification strategies involve both new products and new markets. The latter strategy will normally be a higher risk strategy.
4. SWOT analysis strengths, weaknesses, opportunities and threats involved in a particular situation. This is frequently used to analyse the internal and external environments for an organization. Focused questions such as ‘What is our special expertise?’ and ‘Are there conditions that could jeopardize out competitive position?’ assist in this analysis
                                    IMPORTANT POINTS BRIEFLY
  • Vision – attempts to answer the question, ‘Why does the company exist?’ It is made up of three components: core values and beliefs, purpose and mission.
  • Values – shape the way that an organization operates on a day-to-day basis. They are the underlying principles of the way an organization conducts its business and its role in the marketplace and community.
  • Purpose – a broad, enduring statement outlining an organisation’s reason for existence.
  • Mission – a statement about where an organisation is going.
Ø  Strategic planning assists an organization in anticipating change, increasing performance and maintaining competitive advantages.
Ø  The major steps of strategic planning involve establishing:
Ø  Vision – core values and beliefs, purpose and mission
Ø  Objectives and goals
Ø  Strategies and tactics
Ø  Core values and beliefs are the principles that underline the way an organization operates on a day-to-day basis.
Ø  An organisation’s purpose is its reason for being and needs to be expressed in a broad, enduring statement.
Ø  A mission is a clear and compelling overall goal that provides a focus for effort.
Ø  A good mission includes a time frame and is revised after a period of time to adapt to organizational changes.
Ø  Mission statements in market-oriented terms broaden an organisation’s market and extend its life.
Ø  Common objectives relate concrete goals facilitate the process of management planning control.
Ø  A strategic business unit is a separate identifiable business, has a distinct mission and has its own competitors and group executives with profit responsibility.
Ø  Strategies are broad, basic plans of action by which the organisation intends to achieve its goals and fulfill its mission.
Ø  Product/Market growth strategies include market penetration, market expansion/development, product expansion, diversification, price leadership, differentiation and focus.
Ø  Tactics are more specific courses of action carried out to achieve objectives.
Ø  Key external sources of strategic information include competitors, environmental factors and customers.
Ø  Environmental factors that affect organisations include globalization technology, demographic shifts, economic conditions, social and cultural forces and political influences.
Ø  Trend analysis attempts to identify environmental changes in the early stages of their development.

The term ‘marketing’ is often used interchangeably with words such as sales, public relations and advertising. However, these are only elements of marking and do not reflect the complexity an depth of the marketing process.
Marketing is both an art and a science, combining creativity with detailed planning and research.
To be successful in today’s competitive environment, organizations must be marketing oriented. This means the organizations must understand how their products and services are perceived by a diverse population of consumers, and recognize that their activities are customer driven.
To be successful in today’s competitive environment, organization must be marketing oriented. This means that organisations must understand how their products and services are perceived by a diverse population of consumers, and recognize that their activities are customer driver.
Marketing is a concern for everyone in the organisation, whether it is designing a more efficient administration system or educating the distributors of an organisation’s products, all employees have a role in identifying and interpreting consumer needs.
We will describe the major components and steps of the marketing process – from marketing research, to discovering what makes consumers ‘tick’, to delivering the final product to the consumer.
Developing an understanding of marketing will help you learn how marketing affects decision making in your organization and within your work teams. Studying marketing will also help you become a more informed consumer.
1. ‘Marketing’ is much more complex process than ‘selling’. Discuss this statement. Do you agree with it?
2. What is meant by the term ‘the marketing mix’?
3. Compare focus groups and surveys as methods of collecting primary marketing data
4. What are marketers becoming increasingly interested in the post-purchase behaviour of customers?
5. What are some of the important external influences on a customer’s purchase decision?
1. Marketing is seen as a more complex process involving matching customer needs with products available, so that in the process both parties receive something of value-there is a greater sense of building ongoing and long-term relationships.
2. The marketing mix is referred top as:
  • Product
  • Promotion
  • Place (distribution)
  • Price
These are seen as the controllable variables of marketing       
3. Focus groups tend to concentrate on more complex and subtle aspects of the marketing process. They are particularly effective for exploratory research. Surveys can involve a much larger sample group. They are flexible and when properly designed can be quick and reasonably accurate. Many are less effective because of inadequate time put into design and trailing the survey instrument.
4. Post-purchase discomfort and negative feeling about the product purchased can reduce the likelihood of customer loyalty being maintained: Follow-up calls, toll-free hotlines and other services for maintaining contact can prove worthwhile.
5. External influences include:
  • Attitude of the customer’s reference group
  • Social norms, roles and values

  • Cultural differences


Relationship marketing is the process of building long-term relationships with customers, as organisations aim to improve prospective customers to become advocates
The importance of market research relates to the need for relevant, timely information for decision making. Factors that have increased the need for this high level of information include:
  • Shorter product life cycles
  • Increasing complexity of markets
  • Globalization of markets
  • Increased levels of consumer awareness and expectation
  • The overall information explosion
  1. Primary research data is original information gathered specifically for a project, while secondary data has already been collected and used for other purposes. Secondary data is still often highly relevant and is usually the first information sought during research.
  2. Secondary data is basically gathered by ‘desk research’ from a range of internal and external sources. Primary data gathering involves more intensive process using a range of approaches including focus groups, surveys, observation and experimental methods.
§  Marketing is defined as the process of providing products and services to create exchanges that satisfy customer needs.
§  A major goal of marketing is to build long-term relationships with customers. This is referred to as relationship marketing.
§  Services are intangible, heterogeneous, inseparable and variable, but can also be associated with tangible products.
§  The marketing mix consists of four elements: product, promotion, place (distribution) and price. Marketing managers design different combinations of these four Ps to achieve their objectives.
§  The product component includes the core product being offered as well as other factors such as service, quality, advice, warranties and follow-up.
§  The promotional component refers to the various ways that organizations inform and persuade their consumers. Promotion includes advertising, personal selling sales promotion and public relations.
§  The price component equates to the perceived value of a product. Price planning considerations include discounts and other pricing tactics.
§  The place component is how a product is distributed both geographically and through the choice of distribution channels.
§  The production and sales orientation stages of commerce preceded the development of the marketing concept.
§  A firm is truly marketing oriented when all departments and employees are customer focused and coordinated in their decision making and activities.
§  Marketing research is defined as the systematic and objective process of generating information for use in marketing decision making.
§  Marketing research can be used to address problems or opportunities related to different aspects of the marketing mix and are often conducted by specialist research firms.
§  The two broad types of information used in marketing research are primary and secondary data.
§  Secondary data is existing information. Collecting secondary data and cheaper than gathering primary data but might less useful. Primary data is information that is specifically gathered for the research issue being addressed. Methods of primary data collection include surveys, observation and experiments.
§  Focus groups are small groups of consumers who are brought together to discuss a product and their buying behaviour in relation to it. Focus groups provide more qualitative feedback than surveys.
§  Consumers’ buying behaviour is influenced by how involved they feel in the purchase decision and how risky they consider it to be.
§  Consumers might experience post-purchase discomfort after making a buying decision unless their choice is reinforced.
§  Individual influences on buying behaviour include motivation, perception, learning attitudes and personality. External influences on buying behaviour include social and cultural factors and the influence of groups.



Marketing products and services to a diverse population of consumers is challenging organizations. Changing consumer needs, competitive threats and the rapid pace of technological change can create problems for even the best marketing plans. Most organizations realize that they cannot bee all things to all people and that some measure of specialization in their product offerings is required. Marketing-oriented firms also recognize that consumer needs and perceptions are the starting point in any new strategy.
Product development and enhancement become an ongoing process to manage and anticipate change wherever possible in the dynamic marketing environment.

1. a. What is meant by positioning?
    b. What are positioning strategies?
2. In a simple table compare features and advantages/disadvantages of:
a. undifferentiated marketing
b. differentiated marketing
c. concentrated marketing
d. custom marketing
3. How do organisations select meaningful market segment?
4. What qualities do you associate with effective brands?
5. Given a model that categorises consumers on certain characteristics from innovators to laggards – what strategies can be used to target innovators and other early adopters?
1. a. Positioning is the perception consumers have about a product relative to similar products in the market.
b. Positioning strategies identify the competitive advantage a product has and stress product characteristics and benefits that differentiated it from competitors.

Undifferentiated marketing
Differentiated marketing
Concentrated marketing
Custom marketing
Saves on development and marketing costs
Product varieties can affect different market segments
Competitive advantage of concentrating on a niche market
Each customer’s unique needs are met
Vulnerable to competition as consumers might dislike one size fits all approach
Cost of developing, marketing product variations
Segments of market might be too small and customer needs might change
Comparatively labour intensive high demand on staff
3. A meaningful market segment should:
  • Have characteristics that distinguishes it from the overall market
  • Have an identified need that the product mix can meet
  • Be sufficiently homogeneous
  • Be large enough to be profitable
  • Have sufficient spending capacity
  • Be measurable and accessible for promotion and distribution
4. Effective branding relates to memorability, positive image, durability, and allowing differentiation from other products, encouraging repeat buying and customer loyalty.
5. Innovators are the most venturesome consumers, typically younger and better educated. Marketing will focus on stimulating awareness and interest. Early adopters will enter the market for a product seen as successful and buy at the growth stage of the product cycle. Marketing might emphasis initial impact, rapid acceptance and high interest level.

1. a. Market segmentation is the process of dividing a market into groups or segments of customers with similar needs.
b. This could focus on the youth market, seniors, retirees, or small business
2. Life stages are classified as bachelor, new married, no children, full nest I, II, III, empty nest I, II, solitary survivor
3. Demographic market data includes age, income, occupation, education, gender, religion, nationality.
Psychographic date includes lifestyle, personality and social class classifications. Brand provides the means for consumers to recognize a product or organisation in the market-place and is closely tied with positioning. Brands identify the goods or services and differentiate them from competitors.

  • Market segmentation is the process of dividing a market into groups or segments of customers who have similar needs.
  • Geographic, demographic and psychographic segmentation are some of the ways organizations can select their target markets.
  • Target market strategies include undifferentiated, concentrated, differentiated, custom and mass-customized strategies.
  • Positioning relates to the perception that consumers have about a product relative to similar products in the market.
  • Markets sometimes use positioning statements and positioning maps to identify their products competitive advantage.
  • Brands help consumers identify products and provide assurance of quality and reliability. Brands enable organizations to differentiate their products, develop customer loyalty and provide a means to segment markets.
  • The total product comprises the core product, the extended product and the essential benefit.
  • Products go through four stages of a product life cycle: introduction, growth, maturity and decline.
  • Each product marketed by an organization makes different financial contributions in terms of its profitability and market share. The way in which these products are combined and managed is the product portfolio or ‘product mix’.
  • The process of product development can be described in four general stages: idea generation, screening, business analysis and development.

The marketing-oriented organization knows that having great products or superior service is not enough to survive in today’s competitive environment. Consumers need to be aware of the brand associated with the product. The need to be able to positively identify with the brand and the values it projects. A brand is far more than a logo carrying the company name – it should embody the company identity and company values. Organisations must therefore communicate their identity to consumers, through their advertising, website, promotions, direct marketing, sales force and customer service activities and include what they have to offer in their product portfolio. This must be consistent with their brand image and positioning.
Marketing communications is the part of the marketing function that is responsible for all communications. These have to be consistent with the brand image and positioning of the company. This includes informing, persuading and reminding customers about a company’s product i.e., informing them of the benefits and persuading them they have made the right choice. The ultimate aim is to influence consumer’s feeling, beliefs and behaviour.
To be effective a band not only needs to be well known but needs to be well regarded and wanted. All communications via advertising (both have and below the line), promotions and public activities in accordance with both the business and brand objectives. These in turn will vary according to the marketing objectives for each campaign.
For example, the advertising, promotions, public relations and sales force activities of a company that is about to launch a new innovative product will be different from those of a company that is suffering to declining market share and needs to reposition its products. Further, the mix of advertising, promotions, direct marketing, public relations and sales force activities will vary according to the nature of the product or service and the target audience.
Financial services organizations are starting to recognize that intangible products such as bank accounts, mortgages and investment products need well managed brand communication strategies that give the organisation a competitive edge.
Advertising, promotions, direct marketing, public relations and sales force activities are direct forms of communication with potential and existing customers. However, the sales force is the most direct form of communication because the sales staff directly interfaces with current and prospective customers.
1.     How can an appropriate marketing communications mix for an organization/product be determined?
2.     Can you give recent examples where advertising has been used to reposition firms and products?
3.     The first rule of selling is to sell yourself. ‘Would this apply to many staff working in the finance industry?
4.     There is little differentiation between many basic loan products offered by financial intermediaries. How does the use of sales promotions address this issue?
5.     You have been given the task of writing a media release for your organization. What are some base guidelines for making this effective and acceptable to the media?
1.   The various elements of marketing communications mix will need to combine and complement each other:
  • An advertising campaign might be effectively supported by promotional devices.
  • A decision might be taken on the relative value of ‘push’ and ‘pull’ promotional strategies, most marketing plans wi9ll use both strategies to some extent.
  • The positioning of the organization/product will need to be considered.
2.     Various possibilities here – there are currently a number of interesting finance sector examples in the media.
3.     All of us sell, either consciously or unconsciously. Our ability to influence people relates to our ability to understand them at personal level, and recognize their real needs.
4.     We have considered sales promotions based on product premiums, sales force promotions, intermediary promotions and internal promotions. Any one of these strategies might prove suitable. The issues for organizations marketing financial products have included ethical matters, regulatory requirements, appropriateness and image.
5.     The news value of a story might differ within the different types of media. News is up to the minute, unusual or something that will affect many people. A news release needs to be:
§  Written in short paragraphs with simple, positive words and phrases
§  Appropriately timed – it might be easier to obtain coverage with a release early in the week, on the weekend, or during holidays.
§  Promotion is the part of the marketing function that informs, persuades and reminds customers about an organization and its products.
§  Promotions need to be coordinated with other elements off the making mix and the organization’s overall strategy.
§  The marketing communications mix includes advertising, personal selling, sales force and public relations.
§  Marketing communications campaigns can use various positioning strategies to differentiate an organization’s products.
§  A brand is critical to a company’s success. To differentiate itself from its competitors a brand needs a positive image, must be relevant to its market and must perform.
§  At the introduction stage of the product life cycle, pioneering advertising is aimed at innovators. During the growth stage, competitive advertising differentiates between brands and attracts different types of consumers. At maturity, advertising persuades and reminds consumers. At the decline stage promotional efforts are cut back.
§  Advertising is a form of paid communication aimed either at the mass market or at market segments.
§  Product advertising can be direct or indirect. Institutional advertising aims to build favourable attitudes towards the organization.
§  The steps of campaign planning include conducting marketing research, creating a theme, selecting the media, promoting the campaign to distributors and employees, and evaluating the advertising.
§  Types of advertising media include newspapers, magazines, radio, television, Internet and direct mail.
§  Personal selling is the personal communication of information to persuade a prospective customer to buy a product or service.
§  A sales force in a financial services firm can include field sales representatives, customer service staff and telephone or telemarketing staff.
§  Steps in the selling process are prospecting, pre-approach, presentation, handling objections, closing and follow-up/servicing.
§  Sales promotions cover a wide variety of communication tools and often include some form of incentive.
§  Sales promotions can be tied to a product or targeted at employees, salespeople and intermediaries.
§  Public relations are the process by which management identifies, establishes and maintains favourable relationships between the organization and the groups which potentially affect its operations. These groups include shareholders, Government departments, the media, employees, customers and local communities.
§  Publicity is the part of public relations that relates specially to the media.
§  Spokespeople who have skills in dealing with the media can gain a competitive advantage for their organizations.



1.     What factors should marketing managers consider when planning product marketing and distribution programs?
2.     How closely linked are price and value for a particular commodity?
3.     Briefly compare the advantages and disadvantages of one-price and flexible-price marketing policies?
4.     What is meant by service quality?
1.     Marketing managers should consider:
§  Market – an appropriate choice of distribution channels
§  Product characteristics – are they more suited to one particular intermediary, do they require a higher level or personal contact?
§  Intermediary considerations – do they have access to the target customer group, have they the necessary technical skills, a good customer service record and the necessary management capability?
§  Pricing factors.
2.     Price is sometimes seen as an indicator of quality. The customer view is expressed in the equation Price = Cost + Perceived Value. Price alone does not build an ongoing client relationship, and organizations seek to develop strategies to increase the perceived value of their products.
3.     One-price policies are easier to administer and preserve customer goodwill. Flexible pricing can favour preferred customers but raises problems between distribution channels.
4.     Service quality is the degree to which the performance of service providers matches customer expectations.

§  The basic function of distribution is to provide the right products to customers at the right place and at the right time.
§  A distribution channel is a set of marketing intermediaries that form links between producers and customers.
§  The most dramatic change in the distribution of financial services in recent years has been the shift away from physical channels to electronic channels of distribution.
§  When choosing distribution channels, marketing managers need to consider the characteristics of the market, the products offered and the intermediaries used.
§  While intermediaries or ‘middlemen’ can eliminated, the functions of intermediaries cannot.
§  Intermediaries act as middlemen between service providers and the customer. They match customers’ needs to products, provide convenience and perform a communication function.
§  Setting the right price is important because it directly affects an organization’s profitability and will also have an effect on how customers perceive the organization.
§  Pricing is the only component of the marketing mix that generates revenue for an organization.
§  Pricing objectives and strategies need to be in line with the organization’s marketing strategy and moreover meet business targets.
§  When it comes to financial services, customers are motivated by factors such as security, peace of mind, prestige and wealth – as well as price.
§  Relationship pricing in the form of special rtes or additional services can be used by financial institutions to enhance customer relationships.
§  Pricing objectives might be profit oriented, sales oriented or competition oriented.
§  The demand for a product, the elasticity of that demand and competitors’ activities are some of the factors influencing pricing decisions.
§  Pricing strategies include the use of discounts, market skimming or market penetration strategies and one-price or flexible-price policies.
§  Customer service is one of the most important determinants of competitive advantage and quality service leads to higher profits.
§  The periods during which the customer interacts with the service provider are sometimes called service encounters or moments of truth.
§  If customers’ expectations do not match the perceived level of service received, a service gap is said to exist.
§  For high quality service to be maintained, service representatives need to deliver service that consistently meets or exceeds customer expectations.
§  Traditionally, the interaction between service providers and their customers has been close; however, personal contact is being reduced with the introduction of electronic channels of distribution.



The field of organizational behaviour is the study of individuals and organizations and how they interact. Closely related is the filed of human resource management (HRM), which creates the link between individuals and organizations by designing and implementing systems for attracting, developing and motivating individuals within organizations.
An increasing amount of attention is being paid to the development of organizational human resources. This has been prompted partly by the need to anticipate change and increase the overall performance of the organization to maintain a competitive advantage through its most important resource – its people.
The development of individuals is shared responsibility of the individual, the supervisor and the organization. Line managers and team leaders have an important role to play in fostering and sustaining performance through coaching, counseling and appraising their staff on a day-to-day basis.
1.     What are the goals of organizational behaviour studies?
2.     Why is employee job satisfaction important to an organization?
3.     How would you distinguish between employee’s job involvement and organizational commitment?
4.     What distinguishes a team from a group?
5.     List the major issues that will normally be addressed by an organization’s human resource management (HRM) policy.
6.     Discuss the advantages and disadvantages of an internal recruitment policy for an organization.
7.     A study by Herzberg suggested a strong link between ‘responsibility’ and job satisfaction. How can the level of employee autonomy and responsibility be raised?
1.     To explain why employees engage in some behaviours and to predict how they will respond to workplace conditions and various actions of the team leader.
2.     Job satisfaction attracts and retains quality employees. It also eliminates costs associated with high staff turnover and the loss of skills and knowledge.
3.     Job involvement is the degree to which employees identify with their jobs, actively participate in their jobs and consider job performance important to their self-worth; whereas organizational commitment is the degree of identification with an organization and its goals, and the desire to remain members.
4.     §     Teams have shared goals whereas groups can often be at cross purposes.
§  Teams are interdependent whereas groups are often independent
§  Teams believe in making decision together whereas groups rely on individual achievement

                  5.   §     Recruiting people
§  Developing people
§  Motivating people
§  Retaining people
§  Sustaining employee performance
§  Integrating people management strategies with organizational planning.
6.   Advantages
§  Taps into a pool of skilled people who are already familiar with the organization
§  Saves time and expense
§  Builds staff morale
§  Fosters loyalty
§  Interviewers might not be objective
§  Limited supply of candidates.
7.  Team leaders and managers should provide a work environment that meets employees’ higher level needs. They should provide opportunities for new learning, growth and development so employees can meet their needs for belonging, self-respect and achievement.

Factors that contribute to employee job satisfaction include:
  • Challenging work
  • Recognition for good work
  • Being part of what is going on
  • Job security
  • Good pay
  • Satisfactory work environment
  • Promotion and growth environment
  • Loyalty to employees by management
  • Appropriate discipline
  • Employee assistance programs
  • Organizational behaviour (OB) includes such elements as employee attitudes, motivation and performance.
  • The goals of OB are to explain and predict behaviour.
  • Job-related attitudes include job satisfaction, job involvement and organizational commitment.
  • A group is two or more individual, interacting and independent, who come together to achieve particular objectives, Groups can be formal or informal.
  • Groups tend to go through four developmental stages – forming, storming, norming, and performing.
  • An understanding of group behaviour can be build on certain foundation concepts; roles, norms and group behaviour.
  • Human resource management (HRM) is the process of recruiting, developing, motivating and retaining staff.
  • Human resources objectives and planning need to be firmly aligned with organizational strategies.
  • The position specification can be broken down into the job description and the personnel specification.
  • Recruitment is the process of locating, identifying and attracting suitable applicants to apply for positions in an organization.
  • Selection is the process of screening applicants to ensure that the most appropriate candidates are hired.
  • The outcome of job interviews can be affected by many variables, including government policies and laws on employment and the bias of both the interviewer and the interviewee.
  • Employees are motivated by reasons other than pay and benefits.
  • Maslow’s hierarchy classifies needs at five levels. Managers need to consider what jobs aspects will motivate employees to higher levels.
  • Team leaders and managers often rank factors of job satisfaction differently from employees.

On of the ironies of modern life is that while technological means and tools of communication have developed to levels beyond our imagination, we nevertheless often find it difficult to communicate effectively.
Communication is an essential part of corporate life. Effective communication skills can be among your most powerful business assets. A recent Canadian study found, as have many others, that 90% of business leaders surveyed believed that ability o present ideas convincingly was critical for cusses in their jobs. Despite sophisticated technological aids, the spoken and written word remain a paramount importance. An inability to communicate and interact effectively with other people can be a major cause of work-related problems. We need to be effective communicators if we are to contribute to the success of our work units and develop personally.
We will identify problems that lead to poor communication between the financial services representatives and the customer/colleague. There will be an opportunity for learning and practicing communications tools, including listening, questioning, and feedback and coaching.
Most organizations will benefit from improving the way communication is handled, This is particularly the case given the pace of change in the marketplace and the large volume of information that needs to be managed in today’s organisations. Good communication not only helps people work together as a tem, it provides an opportunity to weld together the various parts of an organization into a more different, effective and competitive whole.
1. When is communication judged to be effective?
2. What re the essential differences between the three communication models described in the subject notes?
3. Why can jargon commonly constitute a communication barrier?
4. How does the ‘halo/horns’ effect operate?
5. ‘Minimal encouragers’ are a useful active listening skill. What are they?
6. In a coaching interview we aim to examine reality objectively. What can the interviewer (coach) do to facilitate this?
1. Communication is effective when what is sent and what is meant equals what is understood.
2. The most basic model of communication does not contain a feedback loop, which is essential in determining if the intended message has been understood.
The feedback loop communication model does include the feedback loop, but does not contain the step where the sender shapes the message for the receiver so that the intended message is received.
The receiver-oriented communication model contains all the characteristics mentioned above.
3. Industry-specific jargon, e.g. finance, industry terms, might sound like a foreign language to a non-finance person. Consequently, communication breaks down as messages are misinterpreted or misunderstood.
4. This is a form of stereotyping and prejudice, where people responded in the manner that is expected of them. For example, if people are expected to do their best, this is how they will respond.
5. These are short phrases such as ‘I see’, which encourage the speaker to continue talking and indicate the listener is paying attention.

  • Phrase question that require factual and specific answers
  • Use descriptive (objective) language
  • Follow the lead of the coachee
  • Assist the coachee to align their reality with the context of the team/organisation
  • Use their senses to discover how the coachee prefers to communicate
  • Ask questions to discover what motivates or de-motivates the coachee
“Killer Phrases’ are negative statements such as ‘We’ve tried it before’, that discourage employees from innovating and going to their team leader with new ideas.
“Igniter phrases” are conducive to good communication and demonstrate a positive approach, which enhances employee motivation and morale.  An example is ‘Great job1’  
Non-verbal cues could include:
  • Actions
  • Appearance
  • Body language
  • Facial expressions
  1. Intention – the listener strives to capture all the information without interrupting or putting words into the speaker’s mouth.
      Attention – the listener pays attention to both verbal and non-verbal; communication
      Micro skills – these are skills such as attending, minimal encourages, paraphrasing. They   involve listening attentively and with empathy.
  1. We listen carefully to what the customer is saying and selectively interject with short phrases such as “I see” “go on” when appropriate. We are also careful not to overdo minimal encouragers and appear intrusive.
  2. Paraphrasing does not mean repeating what the speaker has said, Instead, the speaker wants to hear what you have understood their communication to have been. Iff you have interpreted the communication incorrectly, the speaker will correct you – this not possible if the message is simply ’parroted’ back.
  3. Open questions:
            ‘What is your opinion of the new software package?’
            ‘Why do you think the new bank account will be a success?’
            Closed questions:
            ‘Do you like the new software package?’
            Do you believe the new bank account will be successful?’
§  Communication is defined as a process by which a message is passed from one individual or group to another individual or group and achieves the required response.
§  Most communication takes place by combinations of verbal and non-verbal means. Ex. body language.
§  The most basic model of communication process is:
§  Sender
§  Message
§  Receiver
§  The feedback communication model show the effective communication needs to be two-way process and requires response and feedback.
§  Communication breaks down when the sender or receiver is unable to overcome communication barriers.
§  Some communication barriers are use of jargon, perceptions, disability, age, status, distance, ambiguity, stereotyping, time pressures, lack of trust, environmental barriers.
§  Some techniques for overcoming communication barriers are feedback, empathy, appropriate timing, a positive approach, constraining emotions, watching for nonverbal cues and selecting an appropriate location.
§  The three components of active listening are intention, attention and micro listening skills.
§  Micro skills of active listening include attending skills (using non-verbal signs), using minimal encouragers and paraphrasing.
§  Open questions are another useful skill for communications. However, questioning is usually best kept to a minimum when listening.
§  Coaching involves the transfer of information or skills from one person to another, or the development of skills and knowledge that a person already possesses.
§  Performance coaching helps to increase individual and organizational performance. It is based on the GROW sequence, i.e. goals, reality, options and what next?
§  There are a number of components of effective goal setting. Goals need to be specific, measurable, achievable, relevant, timely, hopes and fears.
§  An important criterion of the reality component is objectivity, which is distorted by option, judgements, expectations, prejudices, hopes and fears.
§  The purpose of options stage is not to find the ‘right’ answer but to create and list as many alternative courses of action as possible.
§  The ‘What next?’ stage puts the options into action by using a series of when, what, why and where questions.
  • It won’t work.
  • We haven’t time.
  • We’re not ready for it yet.
  • Good idea but out department is different.
  • That’s all right in theory, but can you put it into practice?
  • We’ve tried it before.
  • Too hard to administer.
  • It’s against our policy.
  • Come on, let’s be practical.
  • We’ve never done it like that.
  • It’s not in the budget.
  • Let’s form a committee.
  • It’s too academic.
  • Who do you think you are?
  • You haven’t considered ….
  • It needs more thought.
  • Don’t be ridiculous.
  • Let’s not step on their toes.
  • That’s too modern / old-fashioned.
  • Let’s discuss it some other time.
  • You don’t understand enough about it.
  • We’re too small / big for that.
  • The experienced people won’t use it.
  • Let’s get back to reality.
Goal:                What is the goal of this discussion?
                        What do you want to achieve (short and long term)?
                        Is it an end goal or a performance goal?
                        If it is an end goal, what is the performance goal related to it?
                        When do you want to achieve it by?
                        Does it fit within the SMARTI goals? (specific, measurable, attainable, relevant,,                             timely and inspirations)
Reality:             What is happening now? (what, when, how much)
                        Who is involved?
                        What results did that produce?   
                        What is happening both internally and externally?
                        What are the major constraints to finding a way forward?
Options:            What options do you have?
                        What else could you do?
                        What if…..?
                        Would you like another suggestion?
                        What are the benefits and costs of each?
What next?       What are you going to do?
                        When are you going to do it?
                        Will this meet your goal?           
                        What obstacles could you face?
                        How will you overcome them?    
                        Who needs to know?
                        What support do you need?
                        How will you get that support?
                        Rate yourself on a one-to-ten scale on the likelihood of your carrying out this                                  action.

When many people think of conflict they automatically think of large scale events, such as wars within or between different countries. Conflict, however, can flare up over our back fence and across the desk at work. It can arise from misunderstandings, intolerance, individual differences and even from the briefest of interactions. In essence, conflict is a part of everyday life.
Conflict can also provide challenges and open up avenues for change. Conflict resolution skills and strategies do not guarantee a solution every time, but they can turn conflict into an opportunity for learning more about ourselves and others. Using these skills effectively can help us become better colleagues, business managers, partners, parents, team leaders and employees.
Working closely with other people, particularly in high pressure environment, means that conflict is often unavoidable. The potential for conflict also arises where there is regular contact with customers or clients. However, a well handled conflict or complaint can result in more customer loyalty than any other type of customer interaction. The converse of this principle also applies equally. Poor handling of conflict in customer situations can lead to customer rage and eventual decline in business. Nowhere is evidence of this ore forcefully apparent than in several public sector undertakings (PSUs) managed by complacent employees of the Government. In financial markets the public sector banks have been steadily losing customers and their business to the new private sector banks. In many cases, customers of the PSU banks have longstanding conflicts with bank branch staff and have moved their business en masse to the private sector. However, the experience of the domestic PSU airline, viz Indian Airlines, is somewhat different. Proactive resolution of the customer’s conflicts regarding ticketing, seat allocation, preferential service and routing has allowed the airline to stand up to competition from a better and smarter set of private airlines over the past decade. Though the government-owned airline has yet to resolve other conflict situations related to in-flight experiences it is steadily improving its offer to the customers concerned. The vital edge required in today’s competitive business arena can often be gained by an ability to quickly resolve both internal and external conflict. 
Conflict that is well managed can boost individuals in their position as team leaders and role models and can help them tackle any workplace challenge.
1. What are empathy blockers?
2.give some examples of effective ‘I’ statements that could be used in a situation of conflict between a team leader and a team member.
1. Empathy blockers are statements that are dominating, manipulative, disempowering and denying. It is a form of ‘negative’ communication.
2.         ‘When I am expected to do more than my share’…
            ‘I fell really angry when’……
            ‘What I would like is for me to only do my work’….
Levels of Conflict:
Perhaps nothing has been said yet. Things don’t feel right. It might be difficult to identify what the problem is. Do you feel uncomfortable about a situation, but not quite sure why?
Here a short, sharp exchange occurs without any lasting internal reaction. Has something occurred between you and someone else that has left you upset, irritated or with a result you didn’t want?
Here motives and facts are often confused or misperceived. Do your thoughts keep returning to the problem?
Here relationships are weighted down by attitudes and fixed opinions. Has the way you feel about and regard the other person changed significantly for the worse? Is the relationship a source of constant worry and concern?
Behaviour is affected, normal functioning becomes difficult, extreme gestures are contemplated or executed. Are you dealing with a major event like a possible rupture in a relationship, possibly leaving a job, or violence?
The more success teams achieve, the more likely are members of the team to develop their skills, leading to greater rewards and responsibility and improved career paths. Multi-skilled employees are valuable to any company and this quality will be demanded increasingly by organizations of the future.
An important part of the team leader’s role is to help create alignment, both within the team and with the organisation’s vision and strategy to ensure that all team members are heading in the same direction for the same reason. Effective team leaders contribute to their organisation’s performance and assist in maintaining organizational competitiveness.
Harmonious work teams also lead to a better working environment for employees and the effect of this harmony flows on to customer satisfaction and loyalty and, in turn, profitability for the organization.
While it is true that more is demanded of team leaders and managers today, ultimately they also have the opportunity to derive greater satisfaction from their work and to assist other people to do the same. Today people want and sometimes demand more challenging and meaningful work.

1. What do you see as the most important differences between ,management’ and ‘leadership’?
2. As a team leader you are considering the most appropriate leadership style to use for a new and inexperienced team member. How might a situational contingency approach help you to make this decision?
3. What are the four major stages in the model of team development introduced in this topic?
4. Why do you believe performance review or schemes are often regarded with great scepticism?
1. Your response will be personal. Many writers highlight a sense of management focus on business and process compared to a leadership focus on inspiring and influencing people.
2. Situational contingency approaches focus on the matching of leadership style with a particular set of circumstances. Writers like heresy and Blanchard would argue that part of the set of circumstances is the task readiness level of your team members. If they have not achieved full competence for that task, or lack motivation and self-confidence, you would consider a more directive leadership style.
3. The four stages are forming, storming, norming and performing
It is important to realize that teams can move back and forth between the stages. Team development does not always mean a steady progression from forming to performing. Some teams never achieve a performing level, On occasion; teams can drop back to a storming stage.
4. Performance review, particularly if carried out infrequently without a clear, agreed framework for the process and interview, and without adequate training for the appraiser, can be an uncomfortable process for both appraiser and appraisee. The actual face-to-face meeting might be seen as threatening rather than providing affirmation and encouragement.

Leadership in today’s Organisation
Many team leaders will agree that to realize their ambitions, they must face and overcome testing challenges every day of their working lives. Team leadership makes demands not only on technical skills but on character too. Team leaders must possess courage and demonstrate integrity. Team leadership presents an infinite variety of challenges, some of them daunting and all of them fascinating, but the rewards for success are great and varied.
Alert new team leaders will not only develop their skills but will also keep in touch with their environment. They will study and strive to understand the shifts in influence within their organization and seek to be aware of the constantly changing patterns in the environment that surrounds it.
In contrast with organizations of the past with their strict rule books and fixed tasks and job descriptions, today’s organizations are becoming less structured and more flexible. /there is now more emphasis on sharing information and coordinating activities between different areas in the organization. The role of team leaders and their members is central to this process.
Control by command (traditional line management) has been rendered largely obsolete. Instead of obtaining results by ensuring conformity to a rule book and surveillance of work processes, performance can now be monitored more directly because of the widespread use of technology and the flatter structure of the organization.

  1. These approaches focused on the value of the individual and encouraged development of employees as highly effective way of increasing organizational performance. Many human resource practices we now take for granted originated in the studies of this very broad school of practitioners.
  2. Unfortunately, ‘empowerment’ has become a rather overused catchphrase. The underlying concept of giving vision and meaning and trust in team members  to share, fulfill, and on occasion, lead parts of the process has proved very effectively in a number of well documented studies.

  1. List the skills you believe contribute to effective team leadership.
Your list could include:
  1. effective communication skills
  2. coaching skills
  3. conflict resolution skills
  4. role modeling
  5. conceptual skills
f.              consistency
  1. risk taking
  2. ability to keep morale high
  3. creativity
  4. delegation skills
  5. ability to ‘walk the talk’
2.      Why do teams out perform other groups in a wide range of situations?
Studies have focused on:
a.     improved quality of team decision making
b.     better operational focus
c.     improved relationships
d.     higher levels of commitment/motivation
e.     involvement, so that team members have higher levels of awareness of organisational          vision / strategy/goals
1.             You have been introduced as the new team leader to an under-performing team.  What are the questions you might ask of the team?
Questions you might consider include
  • What are the problems?
  • Why is this team having these problems?
  • What do you like best about the team?
  • What would you like to continue?
  • What changes would make this team more effective?
  • How can the team begin to work together more effectively?
The ordering of these questions could be critical. To initially focus on the problems, unless they are blatantly apparent to everyone, might induce a defensive response.

2.   ‘Team members commonly seek information about goals and like to contribute to the planning process.’
---We have seen that lack of clarity about roles and expectations and a sense of being left out of all decision –making and planning processes can prove highly de-motivating for team members.

Steps a supervisor can take to make performance appraisal interviews more effective:
  • Give feedback regularly so that formal performance review does not entail surprises
  • Acknowledge positive performance and achievement at the time
  • Keep performance review interviews and pay interviews separately
  • Seek employee self-evaluation. It this is done early in the interview, the employee/s comments will often lead naturally to your own feedback
  • When criticizing, focus on behaviours and examples rather than the individual’s personality
  • Use the meeting to agree on what will constitute future satisfactory performance
  • Use the coaching and feedback guidelines previously discussed.


  • Today, effective leaders are needed at every level of the corporate structure.
  • Today’s flatter organizations are characterized by such things as respect being earned, team leaders and team players and flexible, innovative, visible leadership.
  • The is now a clear distinction between managing – controlling vital work process and changes within the business environment, and leading – inspiring people by setting a strong example of how to live with frequent change and uncertainty.
  •  Responsibilities of leaders include inspiring co-creating of a common vision, mission and values, empowering self and others to achieve the vision and leading by example.
  • Tow dominant approaches to the management of people have been the classical school and the human relations school.
  • In the situational leadership model, it is the situation that determines which style of leadership to use. This can also depend on the team member’s task readiness level.
  • Supervising or managing people is a skill because theories about motivation, communication, conflict resolution, leadership and performance coaching can be learned. It is an art because of the way it can be adapted and adopted in the team leader’s own unique way.
  • Leadership is a critical supervision skill that enables team leaders to meet the task requirements of their section/team.
  • The functions of a team leader include technical job-related skills, people skills and conceptual skills.
  • Characteristics of teams compared with other groups include improved quality of decisions, operations focus, improved relationships, commitment/motivation, managerial focus and awareness.
  • Some of the characteristics shared effective teams include productive response to change, common visions, objectives and goals and commitment to achieving these and an equal focus on leadership and individual team member empowerment.
  • The stages in team development are forming – initial analysis; storming – setting objectives; norming – role analysis; and performing – action planning.
  • The team’s performance is monitored so individuals know how well they are progressing against targets, and team leaders can measure actual results against planned results.
  • Performance review is a process of evaluating individuals in order to arrive at objective personnel decisions.
  • Some of the ways to make performance reviews and feedback more effective include providing regular feedback, focusing on specific behaviour, asking individuals to state what they need in order to perform more effectively and using the coaching and feedback guidelines provided in this course.


Anything which can satisfy a want or a need and can be offered to a market is a product. Product includes physical goods, services, persons, places, organizations and ideas. Offerings generally have a goods-service mix. A product personally comprises, besides the core product, associated features, brand name and logo, and package and label. Product has customer value hierarchy of five levels covering the core benefit, basic product, expected product, augmented product, and potential product.
Products are classified into several categories based on different aspects. The range of products offered by a seller is known as product mix, which comprises several product lines, each containing different product items. These determine the characteristics like length, width, depth and consistency of a product mix.
Products have a life cycle with four phases of introduction, growth, maturity and decline. The product life cycle operates on three levels – product, product subcategory and brand. Product elimination is an appropriate strategy for dealing with products in their decline stage.
New product development is another strategy adopted by the firms with a view to provide customers with products that will satisfy customer’s needs and wants. This becomes necessary on account of the competitors’ actions, changing consumer preferences, and technological advancements. The process of new product development is intricate involving idea generation, concept, development and testing, product development, test marketing and commercial launch.
A related strategy is diversification in which a firm enters attractive business opportunity outside its existing business based on some of the requisite business strength being available with it. Diversification is of three types – concentric, horizontal, conglomerate.
Branding of products is an important function of product management. A brand represents consumers’ perceptions and feelings of the product and its performance. It is the firm’s promise to the consumer in respect of features, benefits, services and experiences a product will deliver to them. The positive differential effect that knowing a brand name has on consumer response to a product or service is called as brand equity. Several options for brand development are line extension, brand extension, multi-brands and new brand.
Finally, products need packaging and labeling for protection, storage, delivery, and identification and information conveyance. Packaging comprises primary package, secondary package and shipping package. Labels are a part of packaging and they contain brand names, product name and information as also statutorily required information. Package and labels are important marketing tools.


Price, the amount of money charged for a product or service, is the only revenue generating element of marketing mix. Initially, the prices were settled by negotiation between the buyers and sellers, which was followed by the system of fixed price. Internet has again brought dynamic pricing into active zone. Price helps consumers to allocate their purchasing power and gives them information about the product quality. For firms, it affects profits hence is an important and risky area. Intense competition creates tremendous pressure for downward revision of prices.
Pricing has several objectives: profit optimisation, survival of the firm, increasing or maintaining market share, getting suitable cash inflows, stabilization of demand supply balance, product quality maintenance, and communicating image of the product value and quality. Some of the objectives are of short-term nature and others of long-term nature.
Pricing is influenced by several internal and external factors. These factors are not constant and hence price needs to be reviewed periodically. Three principal input affecting decisions are: customers’ demand schedule (setting a ceiling), cost functions (fixing a floor), and competitors’ prices (providing the orientation). Government regulations also influence price. Various pricing methods include one or more of these three Cs. Thus there are three main types of pricing methods: cost-based, value-based, and competition-based. Different methods have suitability under different conditions. Incase of banks the regulations of RBI, and guidelines of IBA and FEDI have some bearing on interest paid on deposits and that charged on advances, and the charges for fee-based services and forex transactions although largely the pricing has been deregulated.
Firms can arrive at a range of feasible prices by using pricing methods. However, for fixing the final price several other factors need to be taken into consideration. For this purpose, several pricing strategies are adopted to determine specific price under a given situation. These strategies take into account the geographical, customer segment, competition condition, buyers perception, product life cycle stage and product characteristics into account.


Distribution function refers to the set of activities which make the goods reach from the produces to the customers. It is typically performed by several intermediaries forming the distribution channel. These channels perform various functions such as, market information, promotion and negotiation, customer service, financing, and risk taking, apart from physical distribution of products.
The channels vary in the number of levels and the channel comprising only the producer and the consumer is called direct marketing channel. The selection of channels is influenced by several factors like, the characteristics of products, markets, and customers; reasons of the company; nature of competition and product lines.
The distinctive nature of services has ah impact on the distribution channel for services. Consequently, banking services have typically used direct channel for distribution. These characteristics have placed certain limitations on distribution function, however with the advent of the use of information technology for banking some of these limitations have been worked around.
The principal channel for banks is the branch network. The customers are required to visit branches to avail of the services and hence their location is important. The branch network is influenced by various factors including the bank’s own business policies and the branch licensing policy of RBI. The branch layout affects the customers’ experience feeling and hence is important.
Telecommunications and computing facilities have enabled several outlets for banks like, Tele-banking and call centers, ATMs, Home banking, Net banking, and virtual Branches.
Physical distribution covers the activities of transport, distribution, and storage of goods between the stages of production to purchase by the consumer. This is affected by several factors like, nature of product, place of production, etc. Several coasts are associated with this function, which now are one of the major cost components. Considerable scope exists for reduction in distribution costs. Various tasks involved in this function include demand forecast, order processing and inventory management covering storage, protective packaging, and transport.
Distribution Channel:
Intermediaries: Firms that help the producers to promote, sell and distribute its goods to final buyers; they include resellers, physical distribution firms, marketing service agencies, and financial intermediaries.
Channel Levels
Channel Length
Direct Marketing Channel
Indirect Marketing Channel
Telephone Banking
Automated Teller Machines
Home Banking
Net Banking
Credit Cards: A card issued by a bank or a financial services institution that, when used to make payment for purchases or for withdrawal of cash, debits a line or credit established for the customer
Debit Cards: A card issued by a bank to its customers that, when used to make payment for purchases or for withdrawals of cash, debits the current or savings bank account of the customer.
Virtual Branches
Direct Sales Agents
Merchant Establishments
Physical Distribution
Exchange Points; The interfaces where there is a change of agencies handling the goods in the distribution channel.
Orders: A formal requisition from an intermediary or the final buyer to the supplier for supply of goods specified therein indicating the quality and quantity of goods, and place and time of delivery.
Inventory management: the management functions pertaining to the set of activities, which ensure the supply of goods to meet, demand for them efficiently, as and when it arises.
Warehouse: a facility for receiving and storing goods from various plants and suppliers, which are delivered to the designated persons as per the instruction of the lodgers.
Just-in-time: The concept of the customers receiving goods exactly at the time when these are required by them neither beforehand nor later than that.
Distribution centre; A large, highly automated warehouse designed to receive goods from various plants and supplies, take orders, fill them efficiently, and deliver goods to customers as quickly as possible
Firms need to communicate with the consumers. Promotion mix primarily serves this function, although product, distribution and price also communicate. Promotion encourages the customer to move through various stages of decision making through persuasion, information, reminder and reinforcement. Promotion mix helps in building and maintaining contact with the consumer at various levels and thus enhances the customer relationship.
Promotion mix has five components namely, advertising, sales promotion, public relations, personal selling and direct marketing. Advertising is a paid and non-personal communication which is useful in creating or increasing awareness. Public relations also are useful in creating or increasing awareness, and in building good relations. Sales promotion is campaign for attracting consumer attention and induces buying decisions through strong incentives. Personal selling and direct marketing are personal communications with the customer and address his specific needs. They are useful in creating a great influence in the final stages of decision-making.
Promotion mix is determined by the type of market/product, the stage of the buyer’s readiness, and the product life cycle stage. Strategically, the promotion mix can have two approaches ‘push strategy’ directed at the channel intermediaries, and ‘pull strategy’ directed at the consumers.
These components need to be blended to give integrated marketing communications. Integrated marketing communications create a strong message consistency and great sales impact.
Marketing function requires on continuous basis relevant information about various aspects including the marketing environment, the consumers, the competitors, various intermediaries, and the firm’s market position. For collecting, collating, evaluating, analyzing, storing and disseminating the required information a marketing information system is required, which is well coordinated, computer-based, master plan for managing the flow of information analyzed using the analytical tools.
The need for MIS (Marketing Information System) has become more acute due to increased complexity of marketing activity, information explosion, need to bridge the communication gap between the producer and the consumer as also several intermediaries, endeavours. MIS encompasses the information on market information of the firm. To be effective MIS comprises four component subsystems namely internal records system, marketing intelligence, marketing research, and marketing management and science system.
A good MIS is a unified and centralized system, which is selective in information processing and provides information regularly and quickly. It helps in systematizing the information processing and integrating the information obtained from various sources, validating its accuracy and consistency. It provides tailor made information to the decision makers to meet their specific requirements.
Marketing Information System:
Customer database; An organized collection of comprehensive data about individual customers or prospects, including, geographic, demographic, psychographic, and behavioural data.
Database Management: The entire gamut of activities covering the identification of data requirement, designing database framework and system for collection, collation , storage, analysis, dissemination and updating of data.
Primary Sources: Sources of information, which are the origins of the information and are used for collection of data
Secondary Sources: sources containing data compiled and analyzed for some other purpose used for culling out the required information for a different purpose.
Information Explosion: It implies flow of information in very large quantity but not necessary of the type, in the form, and at the time required.
Operating Environment: The entire set of persons, organizations, activities, and developments which exist or take place in the operating area or sphere of the firm.
Internal Records System
Marketing Intelligence System
Marketing Research System

This glossary is a reference source for ‘Marketing’
Active Listening
Concentrating fully on what the other person is saying often involves making short summaries of what has been said by restating what you have heard to help ensure that you have understood and to encourage the speaker to elaborate.
Emphasising your own wants and needs while ignoring those of others.
Anti-discrimination legislation
A group of laws aimed at ensuring that disadvantaged members of our society receive the same fair and equal treatment as the rest of the workforce
Expressing your needs clearly from your own point of view, while still displaying respect and regard for other people.
Assessment centre
An elevating technique using situational exercises to identify an individual’s skills, knowledge and competence for recruitment or performance appraisal/promotion purposes.
A person’s likes, dislikes, beliefs and inclination towards a person or thing.
The right to take action to get things done.
Form of trade or transaction where products and/or services of equal value are exchanged rather than money.
The development of ideas without evaluating them; innovative thinking to generate new ideas without immediate regard to the feasibility of the ideas, conducted in a non-critical atmosphere.
Features such as name, logo or designs that identify a product and distinguish it from other products.
Chain of command
A concept, maintaining that information and authority proceed from level to level in a strict hierarchical fashion.
Cognitive dissonance
Feelings of tension and discomfort a consumer may feel after committing to a purchase.
The transfer of information and understanding from one person to another.
Communication barriers (noise)
Anything which hampers or distorts the flow of communication, resulting in communication breakdown.
Competitive advertising
Type of advertising which emphasizes the particular benefits of a product against the background of competitors.
A form of interaction between individuals or groups when one or both sides perceive that the other has thwarted or is about to thwart an important concern.
The process whereby a group reach a point agreement of decision, acceptable to all.
Marketing activities where new or existing products are promoted to customers.
The person who benefits from another’s efforts. Can be inside or outside the organization.

Decoding messages
When the recipient of a communication retranslates the sender’s message.
The composition of a human population and the way it is distributed by factors such as a age and income
Direct advertising
Advertising which seeks a quick response from the consumer in a form which can be measured, e.g. coupon
Unequal treatment during employment or failure to employ a person on the grounds of race, sex, age, national, origin, religion, criminal record, sexual preference, trade union activities, political opinion, physical or intellectual disability, marital status, medical record, nationality, parental status or social origin; a distinction, exclusion or preference on the basis of one or more of the above grounds which have the effect of multiplying or impairing equality of opportunity or treatment in employment or occupation.
Distribution channel
Structure which enables the transfer, by physical or electronic means, of an organisation’s products to its markets.
Early adopters
Type of consumer who purchases a product soon after its introduction
Early majority
Consumers who are more cautious in their buying decisions and purchase after the early adopters.
Looking at a problem or situation from the other person’s point of view; understanding the other person’s point of view and communicating that understanding back to them.
The process of enabling to do things that they would otherwise be unable to do by removing restrictions – artificial or otherwise – that prevent them from doing the things that they are capable of.
Encoding messages
When a though or idea in the mind of the sender is translated into a communication.
Expected role
The formal set of behaviours conveyed both by a job description and by members of the work unit.
Exploratory research
Type of research used to clarify the nature of a marketing problem.
Forecasting the future based on what is already known, i.e., what has happened in the past?
A process of encouraging and supporting staff to achieve goals, rather than controlling, directing and punishing.
Feedback interview
A meeting between manager/team leader and team leaer/team member in which the results of a performance appraisal are conveyed to the team member.
The earliest stage group development, in which members formulate which behaviours are acceptable and which are unacceptable.
A collection of two or more individuals who interact with each other, and share common beliefs.
Group cohesiveness
The extent to which members of a group support one another and see themselves as being part of a worthwhile group.

A phenomenon which occurs in groups with high cohesiveness which inhibits disagreement, constructive criticism and full assessment of alternatives, serving to filter out contra-indications to a decision.
Hersey-Blanchard Situational Theory
A theory proposing that optimum leader behaviour is related to the maturity of subordinates.
Hierarchy of needs
The categorization of people’s five main needs or wants which is used as a tool for understanding motivation.
‘I’ language
An assertive style of communication which involves taking responsibility for and communication your own feelings, thoughts and opinions.
When verbal and nonverbal communication does not match and confuses the interpretation of the message
The process of welcoming, introducing and familiarizing new employees within the organization, the department or division and other team members in order to help them fit in smoothly and efficiently.
Process of bringing into existence something entirely new or different.
Type of consumer most likely to try something new; the first to buy an new product
A characteristic of services which makes it difficult for the consumer to sense the product offering.
Internal marketing
Promotional and public relations efforts that an organization directs at its own employees which recognizes that staff are among its most important customers
A discussion between a potential employer and a job candidate, focusing on the candidate’s ability to meet the staff are among its most important customers.
Job description
A concise written summary, outlining the main objectives, tasks, duties and responsibilities of a job.
Key Result Areas(KRA’s)
The critical aspects of a job; it’s main areas of accountability.
Late majority
Type of consumer who resists change and challenges it; the last group to adopt a product.
Someone who can influence the behaviour of others to achieve a goal(s).
A change in behaviour resulting from experience; acquiring a knowledge or skill.
Life cycle/life stage
A form of market segmentation which describes stages families go through in their life, based on the assumption that family responsibilities will influence purchasing behaviour.
Mapping the conflict
A process which allows an objective evaluation of a conflict situation by examining the needs and fears of all individuals involved in the conflict.
Market segmentation
Process of diving a market based on groups of customers with similar needs.
Marketing concept
The premise that satisfying customers needs through an organisation’s special expertise leads to long term and sustainable profitability.

Marketing mix
A way of classifying functions: products, promotion, price and place.
A more experienced person who takes an interest in you and your career development and provides advice and support.
A long term goal that describes where an organization wants to be in a specific time frame. 
A process checking and regulating activities to achieve planned outcomes.
The state of mind of an individual or team.
The driving force which activates a person to make particular choices.
The personal desire to achieve something.
Factors in the job itself which provide satisfaction and encourage people to perform enthusiastically.
Non-assertive/passive behaviour
Acting in a manner where the wants, needs, opinions and rights of others become more important than our own.
Non-verbal communication
The transmission of information through facial expressions, eye contact, body language, stance etc. and the use of physical objects and space.
Non-verbal cues
Messages sent with facial expressions, posture, shifts of tone or pitch of voice and eve and head movements.
The third stage of group development in which group cohesiveness starts to develop.
Commonly accepted standards of behaviour.
Open/closed questions
Open questions cannot generally be answered in only one word. They require a fuller expansion. Closed questions can usually be answered in one word, often ‘yes’ or ‘no’.
Organisational culture
The collection of rules, codes of behaviour and norms by which people operate; ‘how we do things around there’.
A pattern of assumptions and beliefs and strengthening relationships with others.
People skills
Interpersonal skill used in developing and strengthening relationships with others.
The process of interpreting information and sensations in order to give them meaning.
Performance appraisal
A formalized, systematic assessment and discussion of employees’ performance and their potential and desire for development and training.
Performance coaching or counselling
The process of discussing an employee’s performance with a view to improving it, so that performance expectations are met.
The fourth and final stage of group development in which the group directs it energies towards performance of valued goals.
The set of traits and characteristics that form a pattern, distinguishing one person from all others.
Pioneering advertising
Advertising at the introduction of a product, designed to stimulate demand.

The process of deciding what needs to be done to accomplish specific objectives or goals.
Point of sale
Area where products are purchased, used for promotional items.
The way a product or organization is perceived by consumers in relation to its competitors.
Preferred sensory channels
When taking in, storing, processing and retrieving information, each person tends to prefer one of their three dominant senses – seeing, hearing or feeling. These are referred to as visual (seeing), auditory (hearing) and kinesthetic (feeling and touch).
Price/non-price competition
Differentiating a product by its price or by other features.
Primary data
Information that is gathered specifically for the purpose at hand.
Product life style
A map of the life of a product introduction, growth, maturity and decline.
Product portfolio
Group of products which are classified according to their differing sales growth and market share characteristics.
Process of finding potential customers who fit certain criteria.
Classification of a market, based on consumers’ attitudes, opinions and lifestyles.
Public relations
The process of building, maintaining and promoting an organisation’s favourite relationships with those groups who influence its operations.
Type of promotion that is communicated through the media.
Pull strategy
Promotion directed to end users to encourage them to ask intermediaries for the product being advertised.
The fundamental reason for an organisation’s existence
Push strategy
Promotion directed to intermediaries.
The process of attracting and hiring employees into an organisation.
Relationship marketing
The process where an organization builds long term relationships with customers for mutual benefit.
Summary of a person’s work experience, qualifications and capabilities.
Repeated social occasions which have important symbolic value.
The set of expected behaviours associated with an individual’s position in a group.
Role conflict
When the various roles a person plays required different and incompatible behaviour, beliefs or attitudes; or is could be a situation when an individual receives conflicting messages regarding appropriate role behaviour.
Role expectations
The expectations which others hold about a certain role.
Role model
A person whose behaviour and actions we can copy in order to acquire desired skills.
A small part which is representative of a larger population; conclusions can, therefore, be made based on this sample.

SBU – strategic business unit
A separate business within an organization with its own mission, competitors and management.
Secondary data
Existing information that may be applied to a new marketing problem or issue.
Selective listening
Listening only to those aspects of the communication which you are interested in or agree with.
Service encounter
The period during which the consumer interacts with the service provider, either in person or by other means.
Service gap
The difference between the level of service a customer expects to receive and what they perceive they have received.
Sexual harassment
Unwanted sexual advances, request for sexual favours or un-welcomed conduct of a sexual nature, including verbal, as well as non-verbal behaviour and innuendo.
Situation /SWOT analysis
Interpreting an organisation’s and weaknesses in light of changes and opportunities in the external environment.
Situational leadership
A study of the situational characteristics combined with a knowledge of the task readiness of an employee, used to indicate an appropriate leadership style.
Specific competencies required to complete a task or job.
The social ranking or worth accorded to an individual because of the position occupied in a group.
The second stage of group development, in which members wrestle with the division of power and status.
The major plans of action to be taken to ensure the success of an organization.
Specific short term action plants to fulfill the broader strategic plan.
Target market
Particular market segment(s) chosen by an organization to market its services to.
Task orientation
A style of leadership, referring to the extent to which a leader shows concern for getting a job done and helps steer the group to meet its goals.
Team building
An organizational development program designed to help existing work groups or newly formed special groups improve performance by tackling obstacles and problems.
Technical skills
Skills and abilities related to process, methods and system used in a job or group of jobs.
Type of promotion/personal selling conducted by telephone.
Future directions of a market or environment which can sometimes be identified early before they gather momentum.
The perception that a product is worth as much, or more, than the price paid for it.
Values (personal)
Enduring beliefs that a specific mode of conduct or end state of existence is personally or socially preferable.
Values (organizational)
The guiding principles underlying an organization.


1.     The product management organizational format was founded by Procter and Gamble. --TRUE

2.     The image a product reflects in the minds of consumers is called market segmentation. -- FALSE

3.     Strategic market planning is the task of selecting an overall company strategy for long-run survival and growth.  --TRUE

4.     Guided by marketing strategy, the company designs a marketing mix made up of factors under its control—product, price, place, and promotion. -- TRUE

5.     Making more sales to current customers without changing a firm’s products is market penetration. – TRUE

6.         Today’s marketers must be good at building relationships in order to connect effectively with customers, others in the company, and external partners. -- TRUE

7.         When your marketing manager, Suzie Kwan, discussed factors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers, you knew that she was talking about the external marketing concept.  – FALSE.

8.         Ramasamy  works for a firm that is a distribution channel member that helps the company find customers or make sales to them. Ramasamy works for a reseller.
--: True;

9.         No single competitive marketing strategy is best for all companies.—TRUE.

10.        The reason the demographic environment is of major interest to marketers is because it involves people, and people make up markets.—TRUE.

11.        Recent shifts in where people live affect where people work. --TRUE

12.        The Indian  workforce community nowadays is better educated and more white collar than what it was thirty years ago.  TRUE

13.  The central question for marketers is: How do consumers respond to various marketing efforts the company might use? The starting point is called the stimulus-response of buyer behavior.--TRUE

14.  Each culture contains groups of people with shared value systems based on common life experiences and situations.--TRUE
15.  Lifestyle is a person’s pattern of living as expressed in his or her psychographics.--TRUE

16.  A person’s buying choices are further influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.—TRUE.

17.  Maslow’s theory is that human needs are arranged in a hierarchy. They include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs. An unsatisfied need motivates one to take action to satisfy it.—TRUE.

18.  After purchasing the product, the consumer will be satisfied or dissatisfied and will engage in post purchase behavior.—TRUE.

19.   Today, most companies have moved away from mass marketing and are being choosier about the customers with whom they wish to build relationships.—TRUE.

20.  Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines.--TRUE

21.  Shopping For The Rich and Famous is a buying service that helps wealthy clients find the best buys in exclusive clothing, high-end cars, travel, and financial services. This firm would use income segmentation.--TRUE

22.  In evaluating different market segments, a firm must look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources.—TRUE.

1.     Given the rapid changes in consumer tastes, technology, and competition, companies must develop a steady stream of new products and services.--TRUE

2.     Common reasons why so many new products fail in the marketplace include the market size may have been overestimated, the product was not well designed, the product was incorrectly positioned in the market priced too low, or the product was advertised poorly.--FALSE

3.     New product development begins with a systematic search for new product ideas through idea generation.-- TRUE

4.     Malibu Beach Parties finds that the tastes and preferences of its customers change more rapidly than in the past. The manager is constantly looking for external ideas from customers, suppliers, competition, and the sales force.--TRUE

5.     Companies rarely ever give their customers the tools and resources to design their own products.--FALSE

6.     To avoid too few new product ideas and the failure of many good ideas, top management should install an idea management system. This system directs the flow of new ideas to each department where they can be collected, reviewed, and evaluated.—FALSE.

7.     A product idea is a possible product a company can offer the market. A product concept is a detailed version of the idea stated in meaningful consumer terms. A product image is the way consumers perceive an actual or potential product.--TRUE

8.     Concept testing works best with people who are familiar with the new idea and the new product’s purpose. This generally includes top management, the sales force, and research and development.--FALSE

9.     To test the product concept of a new idea, a firm will develop a prototype that will satisfy and excite consumers and be produced quickly at budgeted costs.--TRUE

10.  The stage at which new product and marketing programs are introduced into more realistic market settings is called concept test marketing.—FALSE.

11.  When a company determines that test marketing costs will become high, it is generally better to reconsider the proposal than make the mistake of spending too much.—FALSE.

12.  New product development begins with idea generation. --TRUE

13.  A firm can obtain new products in two ways: acquisition or new-product develop­ment. --TRUE

14.  During the introduction stage, a company that acts as a market planner must choose a launch strategy that is consistent with the intended product and company image.—FALSE.

15.           Companies need to pay more attention to their aging products. Management must regularly review sales, market shares, costs, and profit trends. The next step is to decide whether to harvest or drop these declining products.—TRUE.


1.         Explain the five marketplace concepts.

The core marketplace concepts are: needs, wants, and demands; marketing offers; value and satisfaction; exchanges, transactions, and relationships; and markets. Addressing customer needs and want is at the very heart of the marketing concept. The four elements of the marketing mix help firms meet the challenges of value creation, customer satisfaction, and to establish meaningful and profitable relation­ships.

2.         One of the major developments in marketing can be summed up on one buzzword: relationships. Define customer relationship management and its associated strategies for building long-term relationships.

Customer Relationship Management (CRM) is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Companies develop customer relationships with target markets at multiple levels. The most basic form of a relationship for mass-marketed products/services is through a Web site, sales promotion offer, or a 1-800 customer-response number. At the other end of the spectrum, companies like create full partnerships with key customers. Other marketers work closely with retailers, for example. Some marketers use tools such as financial benefits like rewards based on frequency of purchase. Other tools include social benefits, like offering key customers the opportunity to network and create communities. Another approach adds structural ties to the aforementioned financial and social benefits. Hence, to retain current customers and remain profitable, companies today are going beyond transactional marketing to customer relationship management. The key is to create and sustain relationships for the long term.    

3.         Define customer equity.

Customer equity is the sum of the lifetime values of all the company’s customers. Customer equity is dependent upon customer loyalty by a firm’s profitable customers. Because customer equity is a reflection of a company’s future, companies must manage it carefully.

4.                  Outline the three major steps in target marketing.

The first step is market segmentation: dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors, who might require separate products or marketing mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segment. The second step is target marketing: evaluating each market segment’s attractiveness and selecting one or more of the market segments to enter. The third step is market positioning: setting the competitive positioning for the product and creating a detailed marketing mix.

5.      Why do businesses segment their markets?

By going after segments instead of the whole market, companies have a much better chance to deliver value to customers and to receive maximum rewards for close attention to customer needs. Businesses segment using variables of operating characteristics, purchasing approaches, situational factors, and personal characteristics.

6.         Given the rapid changes in consumer tastes, technology, and competition, companies must develop a steady stream of new products and services. Briefly explain the common ways of accomplishing this.

One way to develop new products and services is through acquisition—by buying a whole company, a patent, or a license to produce someone else’s product. The other way is through new product development in the company’s own research and development department.

7.            Explain why so many new products fail and provide some ideas for a company to improve its odds of new product success.

Although an idea may be good, the market size may have been overestimated. The actual product was not designed as well as it should have been. It may have been incorrectly positioned in the market, priced too high, or advertised poorly. A high-level executive may push a favorite idea despite poor marketing research findings. Sometimes the costs of product development are higher than expected, and sometimes competitors fight back harder than expected. One way to improve the odds is to identify successful new products and find out what they have in common. Another is to study new product features to see what lessons can be learned. A company must understand its customers, markets, and competitors and develop superior value to customers.

8.            Briefly describe the steps in the new-product development process.

New-product development starts with idea generation from internal and/or external sources. Next, the ideas must be reduced through idea screening. Once the new ideas are decided upon, the product concept must be developed and tested. A marketing strategy must be developed to introduce the product to the market. Once the product concept and marketing strategy are chosen, a business analysis is conducted to review the sales, costs, and profit projections to see if they will satisfy the company’s objectives. A prototype will next be created in the product development stage. Test marketing will follow where the new product and its marketing program will be introduced into more realistic market settings. The last step is to launch or not launch the new product. If the company decides to launch the product, it will go ahead with the commercialization stage and later test its sales and profit results.
9.         What are the two advantages of an idea management system for developing new products? Provide five ideas for a company to use to accomplish a successful system.   

An idea management system helps create an innovation-oriented company culture. It shows that top management supports, encourages, and rewards innovation. It will yield a larger number of ideas, among which will be found some especially good ones. As the system matures, ideas will flow more freely. The company can do the following: (1) Appoint a respected senior person to be the company’s idea manager; (2) create a cross-functional idea management committee with people from each department; (3) set up a toll-free number or Web site for anyone who wants to send a new idea to the idea manager; (4) encourage all company stakeholders to send their ideas to the idea manager; and (5) set up formal recognition programs to reward those who contribute the best new ideas.

10.           Define commercialization. During the product launch stage, the company must first decide on two important issues. Explain.

Introducing a new product into the market is called commercialization. The company launching a new product must first decide on introduction timing. Next, the company must decide where to launch the new product—in a single location, a region, the national market, or the international market. Confidence, capital, and capacity are required to launch new products on a large-scale basis. Hence, firms plan a market rollout over time. Large companies pursue a national rollout while some firms plan global rollouts. For example, Colgate introduced a battery-powered toothbrush into 50 countries in a year.

11.           Explain concept testing.

Concept testing calls for testing new product concepts with groups of target consumers. The concepts may be physical or symbolic. A more concrete and physical presentation, however, will increase the reliability of the concept test. After being exposed to the concept, consumers are asked questions about it; their answers reveal to the marketer whether the concept needs to be altered in any way.

12.           Explain product line pricing.

With this option, management must decide on the price steps to set between the various products in a line. The price steps should take into account cost differences between the products in a line, customer evaluations of their different features, and competitors’ prices. The seller’s task is to establish perceived quality differences that support the price differences between various price points.

13.        When would price cuts and price increases be necessary?

Price cuts may be necessary when there is excess capacity. Another reason is that market share may be falling in the face of strong price competition. A company may also cut prices in a drive to dominate the market through lower costs. A major factor in price increases is cost inflation. Rising costs squeeze profit margins and lead companies to pass cost increases along to customers. Another factor leading to price increases is over-demand. When a company cannot supply all its customers’ needs, it can raise its price, ration products to customers, or both.

1.             14.        Explain the factors involved in setting international pricing.

In some cases, a company can set a uniform worldwide price. However, most companies adjust their prices to reflect local market conditions and cost considerations. A firm must consider economic conditions, competitive situations, laws and regulations, and development of the wholesaling and retailing system. Consumer perceptions and preferences also may vary from country to country, calling for different prices. The company may have different marketing objectives in various world markets. Costs play an important role in setting international prices. Management must prepare for price escalation that may result from the differences in selling strategies or market conditions. The additional costs of product modifications, shipping and insurance, import tariffs and taxes, exchange-rate fluctuations, and physical distributions must all be factored into the “price.”

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