NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Marketing Management
Internal Assignment Applicable for December 2022 Examination
A.1
For M/s Herbal life company it is important to know product mix pricing and price adjustment
strategies. Firstly, we will discuss product mix pricing. A product mix includes all products
a company has to offer to its customers. A product mix pricing strategy can be explained as
any strategy that takes the product mix into consideration. The product mix is segmented into
the products consumers are most likely to buy together, and the strategy aims to maximize
product, market share or company growth. The product mix strategy must be changed when
product is part of product mix. Pricing is always challenging task as various products have
different demand, costs, competition. Let’s take a closer look at 5 product mix pricing
strategies.
1. Product line pricing: -
Companies generally develop product line rather than a single product. In product line pricing
strategy, management must determine price levels among various products in line. This
strategy should account for differences in customer’s perception of the value of different
features.
2. Optional product pricing: -
Many times, it is a good strategy to use optional product pricing technique to cover more
customers with one base product and having variation in accessories or additional services.
Companies use this optional product pricing method for their main product. For example, in
market and AC will be available with a remote control of an option of Wi-Fi capabilities. If
some customer wants that feature, he/she will have to pay extra else in base variant
conventional remote will be available. Deciding price of optional items is a sticky problem and
companies will have to decide which accessories or services are to be included in base price
and which are to be offered as an option.
3. Captive product pricing: -
Product or service which are used with main product or service offered by a company is called
captive product. Pricing of such product is called captive product pricing. Captive product can
have substantial amount of brand’s sales and profit. Finding correct balance in pricing of main
product and captive product requires lots of study and experience. Consumers trapped into
buying expensive captive product may come to resent the brand that ensnared them.
4. By-product pricing: -
While manufacturing a product or providing service it is observed that its process generates a
by-product. If by-product has no value and getting rid off that product is costly, then it will
affect pricing of main product. For example, in a coal fired power plant, in early days, ash was
a by-product, which is not used anywhere. Nowadays, ash is used for bricks manufacturing.
This way power plant can have alternate source of income and reduces cost of electricity.
Sometimes by-product themselves can turn into main profit-making item.
5. Product bundle pricing: -
Using product bundle pricing, company often combine their several products and offer the
bundle at reduced price. In India, airtel has bundled their telecom services with internet
connection and TV services and selling them as cost effective package which is an example of
product bundle. Product bundle pricing promotes sales of product which, consumers might not
have bought.
Now let’s discuss product price adjustment strategies. Keeping in mind various customer
differences and changing situations, companies will have to adjust their basic pricing. Let’s
examine 7 price adjustment strategies.
1. Discount and allowance pricing: -
The adjustment in product’s price to reward customer, based on certain response is called
discount and allowance pricing. In general, we observe, companies provide discount for paying
bills early, volume purchases, off season buying etc. There are various forms of discounts like
a. Cash discount
b. Quantity discount
c. Functional discount
d. Seasonal discount
Allowances are another type of price reduction from original listed price. For example, trade-
in allowances are price reduction for re-turning an old or used item while buying new one. This
is very common in automobile and cell phone industry.
2. Segmented pricing: -
In segmented price adjustment method companies may sell product or service at different prices
even though there no significant cost differences. For example, in museum, kids and elderly
people will be charged less than common adult person. There are different form of segmented
pricing.
a. Product form pricing
b. Location based pricing
3. Psychological pricing: -
This this price adjustment strategy, human psychology is used. It makes use of trend, or feelings
of customer to decide price. Price speaks about products and many consumers pursue that
costly products are of good quality and cheap products are of poor quality. Another aspect of
psychological pricing is reference price.
4. Promotional pricing: -
In this price adjustment strategy, companies will temporarily reduce prices of their product
below the least common price and sometimes even below the cost of manufacturing. This is to
create excitement and urgency among the consumers. Promotional price takes several forms
like discounts, special event pricing, limited time offers etc. Sometimes manufacturers offer
cash rebates to consumer who buy the product from dealer within specified period of time.
Manufacturers also offer low interest financing and longer warranties or free maintenance to
reduce consumers prices.
5. Geographical pricing: -
In geographical price adjustment strategy, companies also have to decide how to price products
for consumer located in different parts of a country or world. In this strategy company covers
the risk of higher cost of shipping to different geographical locations. There are different
practices in industries.
a. FOB prices
b. Uniform delivered pricing
c. Zone pricing
d. Base point pricing
e. Freight absorption pricing
6. Dynamic and online pricing: -
In modern days, dynamic and online pricing strategy is very much famous this is developed
with development of large scale business and Internet technology. This is a continuous change
adjustment in the pricing based on the consumers demand characteristics and need of individual
consumers and situations. Sample of this type of pricing is in airline industry.
7. International pricing: -
In international price adjustment strategy companies help to decide their products price based
on the international market. They have to decide what prices to charge in different countries.
In some cases, a company can set uniform worldwide price.

A.2
Promotion mix, also known as marketing communication mix, consists of specific mix of various tools
that company uses to engage consumers, communicate value, and build customer relations. For M/s
Herbal life to become a major household supplier like Patanjali or Dabur, they have to use various
types of promotion mix explained below.
1. Advertising: -
Advertising is any paid form of nonpersonal presentation and promotion of ideas, products, or services
by an identified sponsor. This promotional tool is historically traced back to very old times like Romans
or golden age of Greece. Modern advertising has become far more effective and interesting that it
becomes difficult to remain un-noticed. As per information on link mentioned here,
https://www.statista.com/outlook/amo/advertising/worldwide#ad-spending,
In year 2022, approximate advertising industry size is US$ 910Billion. This size itself indicates
importance of the advertising as a promotional method. It is a good way to engage, inform, and
persuade customer of a business firm or a non-profit making organization. Marketing managers in
herbal life company must make important decision while setting up advertising program.
a. Setting objectives
b. Setting budget
c. Developing strategy
d. Evaluating effectiveness
2. Public relation: -
Public relation is another form of promotional method in which an organization builds good relations
by obtaining favourable publicity, building good corporate image, and handling unfavourable rumours,
stories, and events. Public relation includes following functions.
a. Press relation or press agency
b. Product or brand publicity
c. Public affairs
d. Lobbying
e. Investor relation
f. Development of donors
Public relation is used to build support for newsworthy company, events, and actions. This form of
promotion can have strong impact at a lower cost. Public relation method should be developed such
a way that advertising and public relation methods are synchronised and gives same message.
3. Personal selling: -
Personal selling can be defined as personal customer interaction by organization’s sales force for the
purpose of engaging customers, making sales, and building customer relations. Personal selling is one
of the oldest professions in the world. In this method sales professionals who are well trained, well
educated add value for customer and maintain long term relationship. They listen to their customers,
assess their needs, and organize company’s efforts to resolve problems of customer. Personal selling
is an interpersonal arm of promotion strategy. It involves interaction by face to face, by phone, via
email, social media, through video or online conference or other means. In this method salesperson
is critical link between organization and customer.
4. Sales promotion: -
Sales promotion is a technique in which, short term incentives are provided to encourage the purchase
of product or service. Sales promotion works often very closely with Advertising and personal selling.
Sales promotion includes many types of promotion tools designed to simulate fast and strong growth
of market. A company must set sales objectives while developing sales program and then select most
suitable tool for accomplishing those sales objectives. Major sales promotion tools are;
a. Consumer promotion: -
This includes distribution of samples, coupons, Cash refunds (Rebates), price
packs, premiums, advertising specialities, point of purchase, Contests,
sweepstakes, event marketing etc.
b. Trade promotion: -
In this method manufacturers directs focus on dealers, wholesalers, and retailers.
c. Business promotion: -
This promotion is used to generate business leads, stimulate purchases, reward
customers, motivate salesperson.
5. Direct and digital marketing: -
Direct and digital marketing is most modern way of promotion. In this method targeted customer or
group of customers are engaged directly with application of digital media. In this promotion method
extensive use of media is obvious to identify direct user and targeting segment of customer with less
time spent in data collection. This method proves to be cost effective, quick, and highly effective as it
shows fast response in market.
Each of above-mentioned category of promotion mix involves specific promotional tools that are used
to communicate with customers. M/s Herbal life has to design promotion mix keeping in mind their
budget, resources and targeted market. Their product, package design, price must be co-ordinated
with promotion mix to get greatest impact.

A.3.a
In general, when a buyer approach for purchase of new product, he/she follows a typical
process of decision making of buying that new product or new service. Even though the product
or service may have been around in market for a while, it will be perceived as a new product
or service by customer as new. This depends upon how customer learns about product or
service first time. Depending upon his/her learning it will be decided whether to adopt the
product or service or not. Adoption process can be defined as mental process, which an
individual passes through after first learning of innovative product or service to final adopting
that product or service. Adoption is decision by an individual to be a regular user of the product
or service. In given case study Mr. Raj is potential buyer of new phone and his process of
adoption or decision making for buying a new phone is described below.

1. Awareness: -
In this step, consumer has identified the desire, want, or need of some product or service
and becomes aware about new product or service available. At this stage, he/she is
lacking information about product or service.
2. Interest: -
Once customer is aware about product or service which can satisfy desire, want, or need
then, customer will seek information about that product or service. After information
searching there will be set of product or service which can satisfy customer’s
requirement. Customer will eventually select best suitable product or service among
those.
3. Evaluation: -
Among the available set of product or service which can satisfy customer’s desire, want,
or need, customer will process information of competitive brands, value provided, ease
of using etc. Unfortunately, there is no uniform process for various products and
services to evaluate, hence every customer will have their own unique way to evaluate
product or service.
 4. Trial: -
The customer will try the new product or service in a smaller scale like small time or
small quantity to improve value estimation of selected product or service.
5. Adoption: -
In this step customer implements the decision of purchase. After full satisfaction, the
customer finally decides to make full and regular use of product or service.
This model guides market researchers about how to help consumers to move through various
stages of product buying decision making process. Market researcher should be aware that
customers are not living in vacuum, they are aware about competitors, and they have multiple
choices as well. In given circumstances market researchers should understand what influences
decision making of customers like Mr. Raj in this case would like to have maximum features
in his new phone within his pre-defined budget.

A.3.b
These days, people connect online which means digitally with information, brands, and each
other at almost any time and from almost anywhere. In the era of the “Internet of Things” (IoT),
it seems that everything and everyone will soon be connected digitally to everything and
everyone else. The digital technology fundamentally, changed customers’ perception of
convenience, speed, price, product information, service, and brand interactions. As a result, it
has given market researcher a whole new method to create customer value, engage them, and
build customer relationships. For promoting Global Stock app online, I will opt for below
mentioned five ways.
1. Online marketing: -
Due to more use of internet, many companies have shifted their focus to online
marketing. Main forms of this method are display ads and search related ads. In online
display ads the advertise appears on user’s screen and related to information being
viewed. In search related ads the advertise appears on top or alongside search engine.
2. Email marketing: -
In today’s digital age, more than 200Million emails are sent in a minute which
represents importance of this digital media. When used effectively, email can be best
direct media of advertising. Emails are not limited to PCs or laptops; they are being
accessed using mobiles as well. There is dark side of this communication as well like
increased spam emails, hackers sending fraudulent emails.
3. Blogs and other forums: -
Brands also conduct online marketing using various blogs and forums. Blogs are forums
where people and companies post their contents or thoughts. Organizations like Twitter,
Facebook, Instagram promotes their blogs specially those with large and devoted
following has substantial influence.
4. Social media: -
This form of marketing makes extensive use of social media for marketing. Social
media are bunch of websites where people generate socialize and share messages,
opinions, pictures, videos, and other contents. Social media can be used in 2 ways.
Either use existing social media platform or create own. Using existing is cost effective.
5. Mobile marketing: -
In this media of digital marketing information is conveyed using messages on mobile
like SMS, WhatsApp. This tool is also very effective as customer can be engaged from
anywhere and anytime. Wide use of mobile has made this tool as must have tool. Many
consumers are initially skeptical about mobile marketing, but they change their mind if
a offer or brand is useful for them.
In my opinion, digital direct marketing online, social media, and mobile marketing offers great
promise and many challenges for the future. Even though some experts still envision a time
when the internet and digital marketing will replace magazines, newspapers, and even stores
as sources for information, engagement, and buying. Most market researchers, however, hold
a more realistic view. For most of companies, digital and social media market researchers will
remain just one important approach to the marketplace that works alongside other approaches
in a fully integrated marketing mix.