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Christ University,Bengaluru

Questions View-II Semester

Subject : MCO205(MARKETING MANAGEMENT)

U1--Introduction

U1-T1-S1--introduction

1 Distinguish clearly between selling and marketing. 5.0 Simple Conceptual 2 What are the five different Marketing management

orientations? Justify each one of them with appropriateexample and state its relevance as of today?

10.0 Complex Descriptive

3 Describe the characteristics of services with suitableexamples.

10.0 Medium Descriptive

4 Comment on the widened marketing concept. To whatextent is it practiced in India?

5.0 Simple Conceptual

5 What is marketing and what is its primary goal? 5.0 Simple Descriptive 6 Explain the reasons for growth of service sector. 5.0 Complex Conceptual 7 What are the various approaches to the study of

marketing? Elaborate. 10.0 Medium Descriptive

8 “Defining the problem is the key to marketing researchprocess” Discuss.


9 “Services marketing is considered as a distinctive area inthe study of marketing”. Discuss with suitable examples.

5.0 Medium Conceptual

10 Comment on the various entities that can be marketed bymarketers.


11 “Customer is the king”. Explain the statement withreference to the modern concept of marketing:

Needs and Wants1. Value and Satisfaction2. Marketing Myopia3. Shopping Goods4.

10.0 Simple Descriptive

12 Comment on societal marketing concept. Can it bepracticed in India?


13 Bring out the different research approaches followed inmarketing research.


14 "Needs pre-exist in the market” Discuss. 5.0 Complex Conceptual 15 Explain the difference between old and new concepts of

marketing. 5.0 Medium Conceptual

16 Differentiate goods and services. 5.0 Simple Conceptual 17 Describe the term “Marketing Myopia” with adequate

examples. 5.0 Medium Conceptual

18 Describe the evolution of marketing concepts. 10.0 Simple Descriptive 19 “Marketers can create needs” Do you agree? Give

reasons to support your answer. 5.0 Medium Conceptual

20 What is marketing? Discuss the scope of marketing. 5.0 Medium Descriptive 21 Bring out the scope of marketing research. 5.0 Medium Conceptual 22 What are the important aspects to be considered while

designing a questionnaire? 5.0 Complex Conceptual

23 What do you mean by marketing functions and how arethey useful in the process of marketing ?


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24 Differentiate market segment and target market withillustrations.


25 Comment on how has the internet changed consumersand marketers?


26 What is a market? What are the types of Market? 5.0 Simple Descriptive 27 “Marketing should aim at meeting a given customer’s

need rather than selling a given product”. Reflect on thestatement and elucidate the benefits of marketingconcept.


28 Discuss the different methods used to contact therespondents in marketing research.


29 List and explain the core concepts of marketing with helpof example.


30 What is the difference between market niche and marketsegment? Describe the market-niche strategy for a carmanufacturing firm. Show the difference between the twostrategies.


31 How does Marketing Intelligence and research systemhelp in decision making process?


32 Critically examine the scope of marketing in today’sbusiness scenario.


33 “Internal Records System is a vital component ofMarketing Information System” Substantiate.

5.0 Complex Conceptual

34 Discuss the evolution of marketing, highlighting thefactors that caused those shifts.


35 What are the special characteristics of services? 5.0 Medium Descriptive 36 Discuss the nature and scope of marketing. 10.0 Medium Descriptive 37 What are the salient features of Marketing? 5.0 Complex Descriptive 38 Define Needs, Wants and Demands. 5.0 Medium Descriptive 39 Explain Holistic marketing concept and explain its

dimensions. 5.0 Complex Descriptive

40 Has marketing changed in the “Connected World”?Discuss the strategy implications of the internet formarketing.


41 How has the internet (in particular, the social media)affected marketing? As a result, what are the newtrends/phenomena that you observe?


42 Explain in detail Maslow’s need hierarchy theory. 5.0 Medium Descriptive 43 How social media has influenced marketing, mention the

latest trends/phenomena that is helpful to marketers inthis technology age?


44 What are Sociological determinants of consumerbehavior?


U2--marketing environment

U2-T1-S1--UNIT II MARKETING ENVIRONMENT AND MARKETING RESEARCH

45 Discuss how companies can react to the marketingenvironment.


46 Frame a questionnaire for finding out the demand forTelevision.



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47 Comment on the key changes in the political and culturalenvironments.


48 What is survey? How is the technique adopted inmarketing?


49 How do suppliers and marketing intermediaries impactthe marketing environment?


50 Discuss the relative importance of cultural environmentaffecting the marketing system of the firm.


51 Name and describe the elements of a company's microenvironment and give examples to illustrate it'simportance.


52 "Modern marketing adversely affects the biologicalenvironment". Comment.


53 Marketers should be aware of the purchasing power andspending patterns of the consumers. Discuss to whatextent these factors affect the marketers.


54 “India’s population is no longer a burden rather it is anopportunity for the marketers” Explain.


55 Comment on how changes in the demographic andeconomic environment affect marketing decisions.


56 Describe the environmental forces that affect thecompany's ability to serve its customers.


57 “The customer is not to be treated as one- time purchaser,but as a person who will patronize the brand forlife-time.” Examine the statement and explain theimportance of CRM in today’s highly competitivemarketing environment.


58 Compare and contrast the reliability of primary andsecondary sources of data.


59 To what extent customers play a vital role as actors in themicro environment?


60 "Marketing decisions are strongly affected bydevelopments in the political environment". Explain.


61 What can be the possible effect of changes in theGovernment’s fiscal and economic policies on themarketing environment? Support your answer withreference to India.


62 Evaluate the importance of marketing research. Is itgaining importance in India.


63 Explain the process of marketing research. 10.0 Simple Descriptive 64 What are the features of marketing research? What are its

objectives? 10.0 Medium Descriptive

65 Outline a market research plan for a restaurant thatwishes to become market driven.


66 Discuss the role of competitors in the marketingenvironment.


67 Explain how the general public can affect the marketingenvironment.


68 According to you, how should marketers respond to thechanging environment?


69 How do technological changes affect the marketingenvironment?



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70 Discuss the factors that have led to the increasingimportance of marketing research in India.


71 Write short notes on the following:

Types of e-markets1. Relationship selling 2.


72 Write short notes on the following:

Cause- Related Marketing1. e-advertisements2.


73 In what ways does the demographic factors affect themarketers? Explain with suitable examples.


74 On what grounds do you support and oppose externalresearch organization?


75 Explain some of the major uses of marketing research. 5.0 Complex Descriptive 76 Write short notes on:

a. Indepth Interview Methodb. Observation Method


77 Discuss the benefits of market segmentation. 5.0 Medium Descriptive 78 Explain some of the major uses of marketing research. 5.0 Complex Descriptive 79 Write down the criteria for market segmentation. 5.0 Simple Descriptive 80 Define marketing research and explain the steps involved

in marketing research process. 10.0 Medium Descriptive

81 Explain the advantages of secondary data. 5.0 Medium Descriptive 82 Analyze the external uncontrolled factors which affect

marketing environment. 10.0 Complex Descriptive

83 Discuss the contents of a marketing research report. 5.0 Complex Descriptive 84 Discuss the usefulness of qualitative research in

marketing. You may illustrate your answer with examples. 10.0 Complex Descriptive

85 Why is it necessary for an MNC to study the marketingenvironment in India. Illustrate your answer withexample?


86 Why is it necessary for a marketer to study the marketingenvironment? What are the environmental variables to betaken into consideration?


U3--identifying and selecting the segment

U3-T1-S1--UNIT III IDENTIFYING AND SELECTING MARKET

87 State the different types of subcultures and bring thedistinctiveness of the taste and preferences among eachone of them.


88 Write brief notes on market segmentation, markettargeting and positioning.


89 Bring out the different ways the company candifferentiate services.


90 “Differentiation is the key to survival” substantiate youranswer and also bring out the different ways in whichdifferentiation can be done.



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91 “A person will tend to buy the brand whose image ismost congruent with his or her self image”. Is a person’sself image a highly reliable predictor of his or her brandimage? Substantiate your answer.


92 How does culture impact consumer behavior? 5.0 Medium Conceptual 93 Describe the various stages through which the consumer

buying process moves. 10.0 Simple Descriptive

94 Discuss the five needs in Maslow’s needs-wantshierarchy.


95 Why is the term buyer behaviour referred to as theproblem solving behaviour?


96 Explain the different stages in the family life cycle andalso trace the consumption pattern in each of thesestages.


97 Outline the market segmentation procedure with relevantexamples.


98 How can a company gain competitive advantage throughpersonnel differentiation? Also list the characteristics ofbetter – trained personnel.


99 How would you segment on the basis of behavioralvariables? Elucidate with an example.


100Write short notes on the following:

Ecology and Marketing1. Internal Controllable Factors2.


101Explain the Herzberg’s theory in relation to consumermotivation.


102Bring out the importance of demographic segmentation. 5.0 Medium Conceptual 103Explain the important ways of segmenting consumer

market on the basis of their behaviour. 10.0 Simple Descriptive

104What are the procedures used in segmenting the market?Explain.


105Contrast demographic analysis with psychographicanalysis.


106Write short notes on the parameters required foreffective segmentation.


107How do industrial buyers make their purchase decisions?Explain with the help of a suitable example.


108Define marketing Management. What are the majorresponsibilities of marketing manager?


109Write short notes on the following:

a. Marketing Environment

b. Components of Marketing Environment


110 Discuss how companies identify attractive marketsegments and choose a market-targeting strategy.


111 How do Government buyers make their buyingdecisions?


112 Product choice is affected by the economiccircumstances of an individual. Discuss.


113 Describe the different types of buying behavior. 10.0 Simple Descriptive


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114 People choose product that matches their lifestyle.Explain.


115 How should a company choose its positioning platforms? 5.0 Complex Conceptual 116 Compare and contrast consumer and industrial markets. 10.0 Complex Descriptive 117 Explain the five different roles that persons can play in a

buying decision. 5.0 Medium Conceptual

118 Bring out the different ways a company can differentiateits products.


119 Give two examples of goods and services whose marketdemand would be particularly affected by each of thefollowing population factors:

a) Regional distribution b) Marital status, c) Gender, d)Age e) Urban and Rural distribution


120List and explain the different patterns involved in targetmarket selection.


121Who participates in the Industrial Buying process? Witha relevant example.


122How would you segment the market for cars? 5.0 Complex Conceptual 123Bring out the different types of reference groups. 5.0 Complex Conceptual 124Explain the process involved in psychographic

segmentation along with example. 10.0 Simple Descriptive

125With the help of an example describe customer deliveredvalue.


126Explain the different patterns of market segmentationwith necessary diagrams.


127Write short notes on Mass marketing and product varietymarketing.


128How do beliefs and attitudes influence buying behavior? 10.0 Medium Descriptive 129List and write brief note on the 7 P’s of marketing. 5.0 Medium Conceptual 130Bring out the different ways through which a company

does image differentiation. 5.0 Complex Conceptual

131What are the criteria to be followed in order to bringabout meaningful brand differences?


132What are the various levels at which segmentation cantake place?"


133List the factors that influences consumer behavior? 10.0 Simple Descriptive 134Explain the concept of positioning and re-positioning

with examples 5.0 Medium Descriptive

U4--Product Planning and Development

U4-T1-S1--UNIT IV PRODUCT PLANNING AND DEVELOPMENT

135 How does the company modify its market when theproduct is in the growth stage?


136 What are the different categories of new product? 5.0 Simple Conceptual 137 Write short notes on product idea, product concept and

product image. 5.0 Simple Conceptual

138 Why do new products fail? 5.0 Complex Conceptual 139 Differentiate style, fashion and fad with the help of life

cycles. 5.0 Complex Conceptual


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140 Briefly explain the different stages in the adoptionprocess.


141 What is a product? How does money back guarantee,after sale service and credit improve a total product?


142 How does product characteristics influence rate ofadoption of new product?


143 What are the different ways in which the marketers try tomodify the product when it is in the growth stage?


144 Discuss the marketing strategies followed in growthstage.


145 Bring out the different marketing strategies followed inthe introduction stage.


146 Discuss the different ways by which a company stretchesits product line.


147 Explain product positioning with examples. 5.0 Medium Descriptive 148 Explain the various idea-generating techniques for new

product development. 10.0 Simple Descriptive

149 How does branding facilitate buyer behaviour? 5.0 Complex Conceptual 150 Discuss the various sources from which new product

ideas can come. Give some real time examples. 10.0 Medium Descriptive

151 Write short notes on brand image and brand equity. 5.0 Medium Conceptual 152 Examine the various strategies adopted by the marketers

during the decline stage. 10.0 Medium Descriptive

153 How does branding play an important role in theformulation of marketing mix and marketing strategy?


154 Briefly explain the terms concept development andconcept testing.


155 Discuss the importance of innovation in marketing. 5.0 Complex Conceptual 156 Discuss the strategies followed in naming a brand and

also explain the desirable qualities of a brand name. 10.0 Medium Descriptive

157 Describe the various stages in the new productdevelopment marketing –strategy plan for introducing thenew product in the market.


158 Describe the major methods of consumer-goods markettesting.


159 Bring out the factors that hinder new productdevelopment.


160 Critically examine the need for good packaging andlabeling.


161 “Firms trade up during periods of prosperity and tradedown during recessions”. Do you agree? Why?


162 How does a company’s advertising strategy differaccording to the Product’s life cycle?


163 List define the steps in the new product developmentprocess and the major considerations in managing thisprocess.


164 Discuss the different phases in the maturity stage ofPLC.


165 Examine the role of personal influence in the adoption ofnew products.


166 Explain the various factors to be considered whilecommercializing a new product.



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167 Discuss the various modifications that can be made onthe marketing-mix elements to improve sale.


168 With the help of charts explain how PLC concept can beused to analyze a product category?


169 “People differ in their readiness to try new products”Explain.


170 On what basis the company decides to develop acommercially feasible product after the product conceptpasses the business test ?


171 Outline the stages in new product development. 5.0 Complex Descriptive 172 Discuss the process of new product planning and

development. 5.0 Complex Descriptive

173 Explain the stages and strategies involved in a standardPLC.


174 Draw the different forms of Product Life Cycle (PLC)and discuss how the marketing mix elements vary fromone PLC stage to the other.


175 Explain in detail the packaging strategies. 5.0 Simple Descriptive 176 "Labelling is another significant means of product

identification". Mention the purpose of labelling. 10.0 Simple Descriptive

U5--pricing

U5-T1-S1--UNIT V PRICING

177How do Customers’ react to price changes? 5.0 Medium Conceptual 178"Pricing strategies usually change as the product passes

through its life cycle". Explain with suitable examples. 10.0 Complex Descriptive

179Discuss how companies adjust their prices to take intoaccount different types of customers and situations.


180Discuss the forms of promotional pricing. 10.0 Medium Descriptive 181Write short notes on price adjustment strategies in price

setting. 5.0 Medium Conceptual

182Describe the different factors considered for estimatingcost.


183Describe the major strategies for pricing imitative andnew products.


184Describe the various internal and external forces thatinfluence pricing strategy of a firm.


185List the various objectives companies pursue and explainhow it can be achieved through pricing?


186Why would a marketer of innovative high-tech productschoose market-skimming pricing rather than market-penetration pricing when launching a new product?


187 Illustrate Product-line pricing. 5.0 Complex Conceptual 188 Identify the factors that affect buyers’ price sensitivity. 10.0 Complex Descriptive 189Describe the options available with the market leaders

when other firms resort to price changes. 5.0 Complex Conceptual

190What are the ways in which competitors’ react to pricechanges?


191What are the different forms of geographical pricing?Explain with suitable examples.



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192Discuss the influence of other marketing-mix elements onpricing.


193Evaluate the importance of pricing in a marketingprogramme. What are the objectives of pricing?


194Explain the following pricing terms a) skimming b)penetration pricing. Point out the reasons for such pricingstrategies.


195Discuss the situations where product-mix pricingstrategies can be adopted.


196When and how should a company change its price? 10.0 Complex Descriptive 197State how consumers, marketers and society view

pricing. 10.0 Medium Descriptive

198Briefly explain the following concepts: Captive productpricing and Optional product pricing.


199Discuss product bundle pricing and captive productpricing.


200Retailers often use psychological pricing as a priceadjustment strategy. Explain this pricing strategy. How doreference prices affect psychological pricing decisions.


201How do psychological pricing influence consumerspurchase decision?


202Explain the following pricing strategies with illustrativeexamples

Psychological Pricing1. Promotional Pricing2.


203State the internal factors that influences the productpricing decisions.


204How to choose between skimming and penetrationpricing? Explain.


205Explain Event marketing and Franchising. 5.0 Medium Descriptive

U6--Distribution

U6-T1-S1--UNIT VI DISTRIBUTION

206 Discuss the functions and services of a wholesaler. 5.0 Simple Conceptual 207 Describe the constraints that should be considered by the

manufacturers when they develop channel objectives. 10.0 Complex Descriptive

208 Explain channel management decisions. 10.0 Medium Descriptive 209 What can be the causes of channel conflict? 5.0 Medium Conceptual 210 "You can eliminate middlemen but not distribution

activities” discuss. 5.0 Medium Conceptual

211 Explain why companies use marketing channels anddiscuss the functions these channels perform.


212 How does the organization manage channel conflict? 5.0 Medium Conceptual 213 Discuss the key functions performed by the members of

the marketing channel. 10.0 Simple Descriptive

214 Describe selective and exclusive market coverage indistribution.


215 Indicate the relative importance of different channels. 10.0 Medium Descriptive


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216 Write short notes on the service output levels that wouldbe desired by the target customers.


217 Write short notes on Horizontal and vertical conflictsamong channel members.


218 Discuss the basis of evaluating major channelalternatives.


219 Identify the major channel alternatives open to acompany.


220 Discuss the factors governing channel choice. 10.0 Simple Descriptive 221 Comment on the role of distribution channels in

marketing. 10.0 Medium Descriptive

222 Discuss the reasons behind channel conflict, And how tomanage those conflicts?


223 Explain the functions and flows in marketing channel. 10.0 Medium Descriptive 224 With illustrations from Indian context describe various

distribution channels. 10.0 Complex Descriptive

225 Compare and contrast push and pull promotionstrategies. What promotion tools are most effective ineach?


U7--promotion

U7-T1-S1--UNIT VII PROMOTION

226 Describe the importance of advertising as acommunication tool.


227 “CRM enhances customer loyalty” Explain. 5.0 Complex Conceptual 228 Critically examine the reasons for customers not

reporting their dissatisfaction. 5.0 Complex Conceptual

229 List and explain the steps in personal selling process. 5.0 Medium Conceptual 230 Discuss the role of a company's sales person in creating

value for customers and building customer relationships. 10.0 Complex Descriptive

231 State the role and objectives of sales promotion. 5.0 Simple Conceptual 232 Write short notes on trade promotions. 5.0 Medium Conceptual 233 “Share of Customer” is more important than “Share of

Market” Explain. 5.0 Complex Conceptual

234 How does promotion stimulate demand? 5.0 Medium Conceptual 235 Explain the differences between primary and secondary

data. When is it appropriate to use either of them andhow are they collected?


236 How does a marketer determine upon issues of timing,frequency and duration of promotion?


237 Discuss the relevance of integrated marketingcommunication in the present marketing scenario.


238 Would it be appropriate for a firm to use advertising tocreate awareness and at the same time use salespromotion to stimulate demand? Explain with anexample.


239 What does the leaky bucket theory depict? 5.0 Complex Conceptual 240 How does customer relationship management (CRM)

help companies develop customer insights and deliversuperior customer value?



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241 Explain the process of communication in marketing withan illustration.


242 How does an organization strike a healthy relationshipwith its customers?


243 Briefly explain the concept of salesmanship. 5.0 Medium Conceptual 244 Explain the process of IMC. 10.0 Complex Descriptive 245 Bring out the steps to develop advertising programme for

the selected target audience. 10.0 Complex Descriptive

246 “Customer satisfaction is no longer good enough tosurvive in today’s competitive market. What is needed iscustomer delight” Examine the statement.


247 Write short notes on pull and push strategy in promotion. 5.0 Simple Conceptual 248 State the advantages and limitations of personal selling. 5.0 Complex Conceptual 249 Discuss “sizing-up” of customers. 5.0 Complex Conceptual 250 Critically evaluate the social aspects of promotion.

Should it be controlled by law. 5.0 Medium Conceptual

251 Enumerate the various steps in Sales force management. 10.0 Medium Descriptive 252 Describe the qualities of a successful salesman. 5.0 Complex Conceptual 253 Discuss the role of personal selling in the promotion mix.

In what situations is it more effective than advertising? 10.0 Medium Descriptive

254 Why do companies lose customers? 5.0 Complex Conceptual 255 Comment on the AIDAS formula in the sales process. 5.0 Complex Conceptual 256 Explain the factors that determine the promotional mix. 10.0 Simple Descriptive 257 “Salesmanship is persuasion” comment. 10.0 Medium Descriptive 258 Describe the strategies for building a relationship with

the customers. 10.0 Medium Descriptive

259 Critically examine any three direct selling models. 5.0 Complex Conceptual 260 Explain the basic steps in a sales process. 10.0 Simple Descriptive 261 Discuss the concept of Customer Relationship

Marketing. Highlight its importance in the globalizedscenario.


262 What are the benefits of having loyal customers? Why orhow do those benefits occur?


263 Develop a promotional strategy for the following andexplain:

Tata Bolt1. Apple I pad 102. Samsung Smart 5000 series.3.


264 Discuss the impact of advertising on products andconsumers.


U8--competitors

U8-T1-S1--UNIT VIII COMPETITORS

265 What is each competitor seeking in the market place andwhat drives each competitor’s behavior?


266 Bring out the different ways in which a company mightview its competitors.


267 Critically examine the main factors that determineindustry structure with relevance to competition.



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268 Bring out the different competitive strategies followed toattack and avoid competitors.


269 Discuss the need to understand competitors as well ascustomers through competitor analysis.


270 “Competitive advantage is a company’s ability toperform in one or more ways that competitors cannot orwill not match” Discuss.


271 Bring out the roles the competing companies follow towithstand competition.


272 Explain how having strong competitors can benefit acompany.


273 Trace the common reaction profiles of competitors. 5.0 Medium Conceptual 274 How does a company identify its competitors and their

strategies? 5.0 Medium Conceptual

275 Describe the steps involved in designing a competitiveintelligence system.


276 How does a firm assess its competitors’ strengths andweaknesses?


U9--marketing strategy planning

U9-T1-S1--UNIT IX MARKETING STRATEGY PLANNING

277 Describe the components of a marketing plan. 10.0 Medium Descriptive 278 Enumerate the steps in marketing planning. 10.0 Simple Descriptive 279 Trace the evolution of modern marketing orientation. 10.0 Simple Descriptive 280 Bring out the significance of a product-oriented

organization. 10.0 Medium Descriptive

281 State and explain the features of marketing audit. 5.0 Medium Conceptual 282 State and explain the key elements of market planning. 5.0 Medium Conceptual 283 Explain Functional organization with the help of a neat

diagram. 5.0 Medium Conceptual

284 How important is a mission statement important to acompany?


285 Discuss the various levels in planning. 5.0 Simple Conceptual 286 Write short notes on strategic business units. 5.0 Simple Conceptual 287 Discuss the different kinds of questions that could be

raised in a marketing audit. 10.0 Complex Descriptive

288 State the objectives of a marketing plan. 5.0 Simple Conceptual 289 Explain the BCG matrix. 10.0 Complex Descriptive 290 Write short notes on market-oriented organisation. 10.0 Medium Descriptive 291 Explain the components of a marketing plan. 5.0 Complex Descriptive

U10--case study

U10-T1-S1--case study

292 YUM RESTAURANTS.

Yum! Restaurant is a major global player in the quick-service restaurant(QRS) market, and has 36000 restaurants in over 110 countries. The IndianQRS market is growing at the rate of more than 20 per cent per annum, andYum! Restaurant is running its KFC, Pizza Hut and Taco Bell chain of

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restaurants in India.

Pizza Hut is driving Yum! Its growth India. Pizza Hut has successfullyrepositioned itself from a fast food joint to a casual dining restaurant withan enlarged menu. Its menu has 30 items and 75 food options that diner canchoose from. its casual dining experience is characterized by customershaving of choice of what they want eat, rather than by speed and value-for-money, which was the cause when it had positioned itself as a fast foodjoint. At Pizza Hut outlets, customers enjoy spending half an hour enjoyinga multi course meal and they may spend up to rs.600 on a single meal. Sincethe customer is spending a substantial amount of time at the outlet, and isalso spending a relatively large sum of money, ambience and service atPizza Hut have been refurbished. Employees have retained in ways ofcasual dining. It has also invested to make the decor more imaginative. Ithad to work hard to shed the image of a fast food outlet- it had to changeeverything from lighting to cutlery and crockery.

KFC first entered India in 1995, but it was forced to retreat due to protestsfrom Swedeshi groups. It came back in 2004, and has opened a largenumber of outlets across the country. It is growing at a fast pace, and ispresent in all formats- mall, airport, drive through. More than a millioncustomers visit these outlets every month, and a customer spends aroundrs.100 every time he has a meal at KFC. KFC advertises profusely, and itreserves 5% of it’s for advertising and other forms of promotion.

KFC’s positioning is slightly ambiguous. Yum is trying to position it betweenfood sold on stalls in the streets and finding restaurants. It is trying to caterto the middle segment of the proverbial ‘pyramid’. KFC is trying to straddlebetween street food and fine dining restaurants, because it discovered thatwhen the economy is not doing well, diners visit restaurants less frequently,but they visit fast service restaurant where they can have meals atreasonable rates. But when the economy is doing well, they stop eatingfrom the stalls in the streets, and visit fast service restaurants to have theirmeals.

Most fast service restaurants focus on providing large variety of snacks ontheir menu, and KFC does the same. But, it is also experimenting- it hasintroduced chilled beverages called Krushers in 3 variants of crunchy,smoothies and sparklers. Customers have liked Krushers and it contributesalmost 10% of its revenue. Like McDonald’s, which is one of its maincompetitors, KFC wants to serve customers the whole day. It already catersto lunch as well as dinner and is the strengthening its snacking portfolio.The third chain under its portfolio is Taco Bell, which was launched in Indiain March, 2010. Taco Bell offers Mexican fast food such as burritos, tacos,quesadillas and topped nachos. Taco Bell offers food that is a contrast intexture and flavours, which strikes a chord with the youth who seeksomething new. Food at Taco Bell tastes different, and its menu promptscustomers to think beyond traditional snacks like burgers. Taco Bellspecializes in Mexican fast food, and hence it appears to only a limitednumber of customers. Hence, Taco Bell will operate only in large cities. Itsproducts are reasonably priced, and they match those at KFC. Yum! Hastweaked the taste and prices of the cuisine of Taco Bell based on consumerfeedback. Its menu includes the chain’s trademark crunch wrap and grilledstuffed burrito. Now, footfalls exceed 2000 customers a day.


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But yum! Are worried-customers doing not spend lavishly at fast-servicefood outlets, and therefore the average bill size is low. Yum is trying toincrease average bill size by offering more items on its menu. it has addedmore vegetarian snacks on KFC’s menu, and is trying to move pizza hut’smenu beyond pizza and pastas-in the hope that customers will order moreitems if they have longer menus to choose from. Yum! Is increasing thenumber of outlets in the cities in which it is present and focused onincreasing footfalls. Opening more stores in the cities in which it is present,will allow it to leverage the supply chains that it has set up in these cities-supply chain of food is expensive to set up. It has plans to add more than1000 new outlets by the year 2015-for successful fast food chains’ revenuesare proportional to number of outlets.

Yum! Will need capital to expand-it takes around Rs 2.5crore to open aKFC store, and around Rs 1.7crore to open a pizza hut equipment are moreexpensive, and space for sitting has to be provided. All Yum outlets areearning profits. It is important to remember that in fast food business, outletprofit is relatively easier to achieve, but chain’s profits are delayed due toheavy investments in supply chain.

Yum! Is doing well, but it has seen turbulent times. KFC had to retreatbecause some Swadeshi groups protested against it establishing base inIndia. Pizza hut was perceived to be too expensive, and hence customersdid not patronize it in the initial years. With Taco Bell, the company isjudging consumer reactions to the Mexican platter. The organized quick-service restaurant market is still nascent in India; more players will expandthe market in malls and high streets. However, specialized chains may notbe competing directly with McDonald’s, because of a difference in the scaleof operations, and also because McDonald’s pricing is very different fromthat of Yum!’s restaurants.

Questions

Do the three chains of yum! Restaurant serves three differentsegments? Can these three different segments be clearly defined?

1.

Should Yum! Restaurant goes the McDonald’s way-designingproducts to suit the Indian palate and pricing low to serve Indianpockets? Or should it retain the distinctive taste of its products.

2.

293 THE INDIAN MAN.

The Indian man has transformed. His mindset and behavior have changed,and so have his play and priorities. The result is that many categories ofproducts and services that have looked at men seriously as target groups,have started showing interest in them. Many categories like personalgrooming, premium apparel, luxury cars and even ready-to-cook food arediscovering the new Indian man as a new target customer. Advertisers andmarketers are also finding newer and fresher ways of connecting with him.

The Indian man’s transformation is evident from the change in theBollywood archetype-the oily-haired hero with a prominent belly hasmetamorphosed into the chisel bodied hero with toned looks and croppedhair. And it is not that the Indian man has changed only his appearance-hiswhole persona has changed. The Indian man has steeled himself to face

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new circumstances-the Indian man has had to fend for himself duringeconomic hardships, and has been facing pressures to upgrade his lifestyle.Also, he has had to contend with women at his workplace-a completely newphenomenon for him. New circumstances of existence have sharpened hisambition-he may have a wife at home who may be earning more than him,and he may have a lady boss in office. He no longer feels secure of hissuperiority.

The new hero is opportunistic –he is no longer angry, and is not contentventing out of his frustrations. He doesn’t blame the system for hisplight-he uses the system to get ahead. He does not believe that he has anyrole in changing the system-That might be somebody else’s job. He wants toachieve his goals, and doesn’t allow the system to become impediment –heworks around the system. The new Indian man is not an idealist- but he isclever. He is not worried about the society and will do anything to protecthis interests.

The new Indian man wants to be successful-no longer is he content doinghis ’karma’. He doesn’t let success elude him-no losing hero business forhim. And such a success-obsessive personality reflects in advertisements ofmasculine brands like signature whisky and Honda cars. But, he is notallowing work, and he is fond of playing roles other than that of anexecutive and entrepreneur. The new-age Indian man realises that afterworking the whole week, the weekend should be spent with family. Heunderstands that he may have to sacrifice his ‘life ‘to get success, but he isattempting to hold on his ‘life’. And he is not shy of celebrating andflaunting his success- big cars, large homes, lavish parties, luxuriousholidays. If he can afford something, he might as well have it. BMW andAudi have registered India as one of the fastest growing markets for theircars.

The new Indian man wants to look good and is obsessed about fitness. Hehas to be presentable at all times, whatever the cost. Chiseled bodies are amust, and so are designer suits worn casually over them – the thought–about, planned carelessness defines the look of the new Indian man.Indian men are spending more time in front of the mirror than their femalecounterparts and they are not apologetic about it.Men with waxed chestsand sculpted bodied are everywhere – in films and advertisements, on thestreets and in clubs. There is a huge market for products and services thatwill make the Indian man look good. Emami’s Fair & Handsome fairnesscream for men is successful, which will motivate other companies tomanufacture beauty products ‘only for men’. Garnier has launched GarnierMEN, a new range of products designed specifically for men, and India isthe first country in which this product was launched.

The role of women in the life of the Indian man has changed. Indian menhave always wanted wives that were dutiful, loving and understanding.Indian wives were expected to be extremely devoted to their husbands, andwere expected to fulfill their responsibilities. But now, the Indian man,without making any fuss, shares the chores at home with his wife. He willget his children ready for school, and will boast about it in office. He isallowing his wife to play a significant role in areas such as householdinvestments, car purchase and other decisions in which he unilaterally lookdecisions earlier. And his new avatar as a ‘caring and cooperating’ husband


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is being depicted in advertisements – in an advertisement of Kellogg’sspecial K, the husband acts as a spokesman for his wife, describing how shehas lost weight since she started using special K. similarly, in anadvertisement of future general life insurance, the husband gifts his wife alife insurance policy as a token of good omen for a happy life.

As the head of the family, the Indian man was isolated in the family-he wasfeared. No more, as a father, he is one of the boys-and most of the time thekids love him more than they love the mother. He is often in the kitchennow preparing delicacies for the kids-sometimes for the wife too. He isbuying grociers for the family, and stationary for the kids. The Indian manwill be the target market for FMGC products and will feature prominentlyin their advertisements

Therefore the new Indian man has arrived focused on his goals an achiever,manipulative, charming, witty, a lovable father and accommodatinghusband. When companies make marketing strategies of their products andservices they will have to be mindful of the sensibilities of the new Indianman the Indian man is opening up whole new marketers of all shades andhues.

Questions

1) Much is being made about the Indian man taking care to dress and groomhimself. Has he really changed or is it just that he obviously cannot besloppily dressed and unkempt when the ladies around him are someticulously turned out? Will he fall back on his sloppy ways when he is anall-male company?

2) Does he enjoy being in kitchen or is he there because he will otherwiseremain hungry – his wife is on a tour or just refuses to cook?

3) Do marketers know enough about this new man to be able to designproducts and communications specifically for him?

4) When everybody and everything has changed has changed – what is thisfuss about Indian men changing?

294Shri Ram Consultants have been appointed by a leading group in Hotel

industry to prepare a feasibility report for opening a five-star hotel in Pune.The group has been the most successful one in the Hotel industry and hadalways kept its eyes open of new opportunities. In view of the very fastindustrial growth in the city ofPune, the city had attracted the attention ofthe group. Pune, apart from being a modern city, had the added advantageof pleasant weather and several places of tourist attraction in theneighbourhood. Moreover, the closeness to Mumbai, city of internationalstature made it very easily accessible to international tourists.

For Shri Ram Consultants, this was the first time that an assignmentconcerning hotel industry had been received. They however, soon realizedthat the assignment was not as simple as it appeared to be in the first place.The feasibility of such a hotel would depend essentially on two factors.Businessmen visiting the city for work would constitute on segment of themarket, while tourists would constitute the other. Further, the tourists could



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be Indians or foreigners. The success of such a hotel would also dependupon the relative attraction of other tourist centres in the vicinity.

Further, it was necessary to estimate seasonal fluctuations in demand forhotel accommodation so that attractive discounts could be offered duringthe off-season for business conferences, executive developmentprogrammes, etc.

The consultants realized that they would have to undertake a marketresearch on a national scale to assess the tourist potential of the city. Theywould also have to survey the foreign tourists to estimate on of the mostimportant segments of the market.

The consultants wondered whether such a survey will have to extend over aperiod of one full year to completely take into account the seasonalvariations in tourist traffic. They were also undecided about the manner inwhich the survey should be conducted. The company also feared that in theabsence of an accurate definition of the problem, they may land upsurveying the complete tourist market inIndiarather than studying feasibilityof a hotel in Pune. They had heard that ITDC had appointed ladyinterviewers at several major airports for conducting such surveys andwondered if such a methodology could be of use to them.

The problem appeared much defined and they were concerned as thepreliminary report explaining methodology of the research and thequestionnaires to be used had to be submitted to the client along with theestimate of expenses within one month.

Questions

1 How would you define the problem of assessing the feasibility of theHotel so as to help design the survey?

2. How would you plan a survey for actually collecting information onexpected demand for hotel space?

295 BARISTA LAVAZZA.

Barista Lavazza – owned 100% by Lavazza of Italy – has created a newposition in the market place. The coffee chain has decided to test themarket for food, though the core brand promise remains coffee and relatedproducts. The reason is that the coffee chain market in the country islimited, but the food market is limitless. To ensure that the brand does notlose its core properties, a true Italian coffee experience remains the corepromise of Barista Lavazza. But the food market is too lucrative to resist. Non coffee products like tea, sparkles, chocolates, and smoothies account

for all most 1/5th of Barista’s sales. Due to its foray into food, this %contribution will increase.

The foray could provide Barrista a differentiator in the market place againstthe competitors such as Cafe Coffe Day, Costa Coffee, Gloria Jean’s andCoffee Bean and Tea Leaves. At present, Cafe Coffee Day is the leading



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coffee chain with over 750 stores, barista coffee company is the second andCosta Coffee third. CCD has 6 formats as compared to Barista’s two andCosta Coffee is good in the aspiration value it lends.

Barista has Espresso bars and lounge format crème cafes with an elaboratefood menu. Crème cafes open for longer hours than the Espresso bars andspread over 1600 sq ft. The investment in crème cafe is higher, around RS1600 / sq ft than in an espresso bar which requires about 100 / sq ft to setup .Like the espresso bars, the crème cafes cut about 100 bills daily and175 bills on weekends. The average bill size in a Crème Coffee is RS 300,about 60% more than the 190 RS in an Espresso bar. About 40% of the saleis food. The cafes are been open in select high income areas which cansupport such a store.

Barista sensed growth opportunity on the high ways. It has opened severaleateries along high ways, competing with local dhabas. Some eateries havebeen opened along the Delhi - Karnal - Chandigarh Shimla highway,Bangalore Mysore highway, Delhi with Agra and Jaipur and Mumbai withPune, Ahmadabad and Goa highways.

Along these highways, for instance, the one along the Delhi Shimala route,dhabas sell paratha , dal makhani, tandooori roti and lassi. Barista’seateries sell the same menu. Travellers get more choice. There are severalhigh ways where there is sufficient movement of travellers who could stopat barista store. Barista has opened its cafes on both side of the highway.The key challenge for Barista was to get the branding and visibility ofthe stores right so that travellers did not miss it while cruising at high speedon the highway.

The rent on the highway is just 5 to 7 percent sales, compared to 20 % incities, while the number of bills is almost the same in the cities, and highway stores run round the clock. The average bill size is RS 275, way abovethe average for Espresso bars and close to that of the Crème Cafes. Thestore is bigger, about 2000 sq ft, because large toilets need to be providedfor the highway travellers. Barista Lavazza has also begun to experimentwith its menu. For instance, it has introduced filter coffee in steel tumblers.Recent brand extensions also included ice cream and chocolates at selectoutlets. A highway store is a good business roads have improved and Indianfamilies have begun to travel more. The orders are meal- oriented and arehence bigger in size. But barista needs to concentrate on its backendoperations and supply chain management, as this business is different fromits existing one. Barista needs to make investments as customers expectconsistency from a large retail chain across all its stores. Every parathas willhave to be of same quality. There is also a certain level of risk involved inleveraging existing brands for a new business. Perhaps Barista could haveinvested in creating another brand for its food business.

Barista keeps an account of store – wise profit and loss account. Each store

has to break on an MCM- basis (manager controllable margin) in the 1st

month, EBT- basis (earnings before tax) between 12 and 15 months, andalso has a payback period between 24 and 36 months. This model is broadlyfollowed across the chain. Some stores could be kept for strategic branding


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reasons. Though they do not hit the EBT break even in the 1st year. Thesewould be exceptions and have been looked at in this manner from the firstday itself. Barista does not advertise in the popular media, though it does in– store promotions now and then. This is a huge cost saving which helps inearly break even .large chains in the food category generally spend up to 12or 13 % of their sales turnover in advertising.

The chain has initiated a new real estate strategy to save costs. Rent havebeen renegotiated down by 35-40% at several sites. The company plans toopen several new stores, keeping its identity intact. However, Barista doesnot plan to open stores in malls, as most across the country are a losingproposition. An atrium is a better option as the investment required to getstarted is low and visibility is high. If business does not take off, the exit iseasy.

Questions

Barista faces the risk of being labelled a ‘fact food chain’, which doesnot have the same sophistication in connotations that a ‘coffee chain’has. Is it too much risk?

1.

Barista wants to be ‘on the highways’ and ‘on the high streets’. Howdoes barista straddle the two ends of the market?

2.

Should barista operate both store formats under the same brandname, and in the same retail space?

3.

296It looked as if a miracle had happened. The Charminar Coffee House wasthere at same place, opposite the Deccan Gymkhana bus stand, one of thebusiest places of the town from where it has been operating for the last 12years. However, unlike the morose outlook it used to offer with hardly25-30 customers at a time, it is now bustling with 125 – 135 customers atany time of the day. These comprise college students, family groups andpeople from almost all walks of life. And the reason is that the place hasbeen bought over by a young entrepreneur and is thus under newmanagement.

Ironically enough Charminar Coffee House was started by one Mr. Sethwho has considerable experience in running restaurants. He has five morerestaurants running in the town and all of these are doing fairly goodbusiness. One of these also offers lodging facilities. Surprisingly, CharminarCoffee House could never do well. Neither was any systematic effort evermade to improve its working. So when he got this lucrative offer from Mr.Raj Kumar Jain, some four years ago, he jumped at it.

It is quite strange to note that Jain has no previous experience in this field.While he was in the Indian Army and retired at the rank of a Major, none ofhis family members have any experience in the catering line, though, hiscommunity is famous for the same. Mr. Jain completely renovated the placewith attractive interior décor. The menu offered was also trebled, therebygiving a wide choice to customers. Even though it was kept a vegetarian



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restaurant, southIndia, Gujarati and Punjabi delicacies were also offered.Arrangements for entertainment through stereophonic music systems werealso added.

The success has baffled Mr.Jain himself. So much so that, he even stoppedborrowing from the banks for his working capital requirements within sixmonths of starting the operation. Today, Charminar Coffee House is the talkof the town.

Questions

1. Discuss the various reasons as to why the restaurant could not functionwell under the earlier management.

2. Discuss the strategies which are used by Charminar Coffee House.297The product Coco-Cola that has given the world its best known taste was

born in Atlanta, Georgia on May 8, 1886. Coca plant and kola nut were themain ingredients of the drink. Initially, the drink was positioned as amedicine to cure headache and depression. Coca-cola’s success came fromadvertising which made it an emblem of good things inAmerica. The themesof all the ads for the drink have remained more or less constant since theearly days i.e, “Drink Coca-Cola, Delicious and Refreshing” to “Always thereal thing”. Coca-Cola is now available in about 200 countries. Theturnover is $18 billion which is less than Pepsi Co’s turnover. The reasonbeing Pepsi Co has diversified into fast food and snacks businesses, butCoca-cola remained focused on its core area of business. The market valueof the company is 8 times greater than that of Pepsi. After leavingIndiainthe year 1977, coca-Cola relaunched its drink in the subcontinent in 1993by taking over the Rs 150 crores Parle Company. The company took overall the brands of Parle including Thums-Up.

Coca-Cola has been a subdued player with sub-standard marketing andexpenditure being another hurdle. There has been a drop in sales of all thebrands of the Coca-Cola Company. This could be because of Coca-Cola’sneglect of its Indian brands especially Thums-Up which was the strongestplayer in the Indian market. Out of the total expenditure of Rs 27 crores,81% was spent on coca-Cola and only 19% was spent on Thums-Up. NowCoca-cola has earmarked Rs 40 crores to promote its products. Coca-colawas the first in the country to launch cans, plastic cap leak proof bottles andalso full length delivery crates.

Coca-cola has also diffused its strategy between its own and the acquiredbrands. All the bottles of coke franchisees as compare to Pepsi’s whose halfthe bottlers are self-owned. Coca-cola was airing Creative Artistes agencyads till 1995 which were looked on with interest by the young urbanconsumers but the older lot seemed dazed. In February 1995, theadvertising changed with Sushmita Sen as the model and at the end of it noone seemed to be sure of what Coke really wanted to say to do. It has notsaid anything about being the real thing that is the positioning it wants toadopt, whereas the competitors like Pepsi are very clear about theirpositioning as the choice of the new generation.



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Coke has been an erratic marketer, the print campaigns are more often thanproduct launch announcements and promises and when they happen, aretoo poorly publicized. Today the company is in a peculiar situation withcompeting brands in its portfolio. The company has now decided thatapplying international strategies will not work here; one has to localize itsventure like Pepsi has done. The company must beef up the existing brandsor do away with them. Coke has been the longest surviving sponsor of theOlympics.

Questions

1. How should Coke position itself to take on Pepsi in thisBattleof theGiants?

2. How would you differentiate Coke’s promotional strategy from that ofPepsi?

3. List the attributes that you consider relevant to this product class. Eventhough most attributes in the products are the same, suggest an attributethat can be considered a USP or can be used to differentiate among thebrands.

298 DALDA.

Dalda has been repositioned. It is now positioned as an edible oil ratherthan vanaspati. The re-branding includes a new logo design. Thedecades-old palm tree logo on a yellow backdrop has been replaced by amother and child symbol which connotes the purity and caring nature ofbrand, along with a golden border which signifies premium value and a sealof protection. The fond style for Dalda has been made more contemporary.It has been positioned as the ‘husband’s choice’. And , it is been offeredwith more vitamins to make the oil better.

Though Dalda has been doing well since bunge India acquired the brandfrom Hindustan lever 2003, Dalda still had a strong association withvanaspati or hydrogenated vegetable oils. In the present scenario, vanaspatiis perceived as unhealthy, and thus not preferred. For the future growth ofthe brand, it was essential to move its sticky association with vanaspati.

Research reveals that housewives are concerned about the health of theirhusbands. They feel that their husbands are over worked, stressed and ofteneat outside. The husbands want to eat tasty food and healthier alternativesare perceived as less tasty. The housewives feel the need to cook in healthyoil, but also want their food to be tasty. Consumers perceive that they arecompromising on taste if they use edible oil for cooking. The upgradedproduct offering addresses these concerns and thus, Dalda is positioned asthe ‘husband’s choice’. ”Husband’s choice’ conveys to the housewife thatwhile Dalda oil is healthy, it will also help her provide tasty food for herhusband. It is an attempt to connect better with the younger generation.Television commercials, radio ads and retail activation exercises were doneto reinforce the repositioning.

All edible oil brands are focusing on the health platform. Dalda is doing thesame, but with difference-stands with health without compromising ontaste. It is a big departure from its earlier positioning when Dalda was

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synonymous with ‘vanaspati ghee’, and when ‘health’ had not become apart of everyday lingo. The new product supposedly contains vitamins A, Dand E and higher level of anti-oxidants.it has also launched Soya bean,mustard, groundnut and sunflower oils under the same brand name. It hasan active website www.daldaindia.com, where it gives information abouthuman health.

It still might be difficult to change embedded perceptions of consumersabout Dalda as vanaspati. With a legacy as strong as Dalda’s, it is verydifficult to compete on the ‘health’ element, especially so when thecategory is ruled by pioneers like Saffola, which has a legacy of variantsvouching for heart benefits and less sodium.

Bunge India has also introduced blended edible oils in a range of affordablypriced packets. It is making Dalda more accessible to consumers. Edible oilis a key ingredient in cooking, and in small towns and cities, it is sold inloose form by local vendors who pour the oil into containers carried by theircustomers. This allows people to buy edible oil in affordable quantities.However, edible is dispensed in this manner be adulterated, and consumersmay not always receive the desired amount. From the perspective ofretailers, the new Dalda packs are easy to display and store readily visibleto consumers.

Questions

1. Dalda has been poor man’s desi ghee. Would it not have been better if ithad repositioned itself as desi ghee?

2. The market of ‘healthy edible oil’ is already cluttered. In fact,manufacturer of edible oil positions himself on health plank. Could Daldahave position on a different plank? What could it have been?

3. Dalda has become a generic name. Can customers ever perceive itdifferently?

299 MAHINDRA AND MAHINDRA SCOOTERS.

India is the second largest market for two wheelers in the world, next onlyto China. The two wheeler market includes motor cycles, scooters, mopedsand electric two wheelers. In the last few years, Mahindra and Mahindrahas evolved from being a manufacturer of tractors to being a manufacturerof commercial vehicles and passenger cars. Two wheeler is the only gap inthe portfolio and if unplugged, Mahindra and Mahindra could straddle theentire spectrum of automobiles.

Its foray into the two wheeler market could be risky- the market for twowheelers is different for utility vehicles. Motorcycles comprise over 80% ofthe market. The competition is cutthroat, and it would not be easy to gainmarket share from established players like Honda, Hero Honda, Bajaj Autoand TVS. But, it has its own competitive advantages- Mahindra andMahindra is a trusted brand. It has strong brand equity in rural markets,which contributes 40% to two wheeler sales. It has a wide distributionnetwork in place. It has done a successful transition from tractors andcommercial vehicles to cars, though these markets have nothing incommon. The Scorpio is the largest- selling sports utility vehicle in the



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country.

Mahindra and Mahindra undertook extensive research, surveying 7500respondents across the country to check if its foray into the two wheelermarket made sense. Most of them said that the company had the credentialsto roll out its two wheeler plans.

It first launched a range of gearless scooters. Stylish and fuel efficient,motorcycles had almost killed the market for scooters. The market leaderBajaj Auto had decided to stop manufacturing scooters. But, the scootersmarket has recovered- scooters now offer mileage that is not very differentfrom motorcycles, and scooters require less maintenance than motorcycles.Honda leads the scooter market with a share of 53%, followed by TVS witha market share of 21%, Hero Honda with a market share of 14% and Suzukiwith a market share of 8%. Mahindra and Mahindra’s market share is about2%.

The incumbents have cemented their position by differentiating theirproducts. Honda boasts of superior mileage and style. Hero Hondapositions itself as the scooter for women with a campaign that featuresPriyanka Chopra. TVS has similar positioning with Sania Mirza as its brandambassador. Suzuki has projected itself as product for the whole family.But, there aren’t too many models yet, which means that the market can begrown by launching new models, as motorcycle companies have done in thelast two decades.

Mahindra and Mahindra has positioned its portfolio of three scooters- Duro,Rodeo and Flyte- as power scooters. Its positioning is in sync with theMahindra and Mahindra’s overall brand position of being ‘Tough andRugged’. The company wants to build on the stereotypical macho image ofits sports utility vehicles- The Scorpio and Xylo- that its competitors cannotclaim. Each of the three scooters have been equipped with an 8-hp 125ccengine, which is more powerful than the 100cc scooters of the competitors.The Suzuki Access is the only other scooter in the market that has a 125ccengine.

Mahindra and Mahindra has priced its scooters between Rs. 38300 and Rs41300. Though priced in the same range as the Hero Honda Pleasure andTVS Scooty Pep, these are five to six percent than market leader HondaActiva, despite an engine that is 12 to 18% larger. These are also 8-12%cheaper than Suzuki Access. The pricing strategy may resemble that forScorpio- low inaugural prices that can be increased once the brand is wellestablished in the marketplace. But the company insists that the pricing isstrategic, and that no changes will be required.

People doubt if scooters can be successfully positioned as power scooters.The scooter market is predominantly a market for the family and womenriders. Scooters are purely utility products, not lifestyle accessories-customers do not show off their scooters. Therefore, a showy and powerfulproduct like Kinetic Blaze, which has a 165cc engine and was positionedalong similar lines had to be withdrawn. Therefore, whether the marketwould really shift beyond utility and move towards style and power willreally decide the fate of Mahindra and Mahindra scooters.


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Mahindra and Mahindra uses advertising, and social media such asYouTube to inform customers about its scooters. It has more than 300dealers selling its scooters, of which nearly one fifth are dealers of KineticScooters. M & M also has around 120 new and existing four wheelerdealers, including those selling tractors. It could open up the opportunitiesto upsell and downsell. For example, a logan customer could buy a scooterfor his college going son.

The fact that M&M has acquired the assets of Kinetic motors helped it in itsendeavour to enter the two wheeler market. Kinetic already had a 125ccscooter- Flyte, which gave M&M a ready power scooter to launch. Ittweaked the product by giving it a new look and feel, before launching it inthe market. M&M acquired 4 scooter brands from Kinetic- the Flyte, Nova,Kine and 4S, but it found the Flyte to be the best in technology, design andcustomer feedback. Nova, Kine and 4S are still being sold. Kinetic hadcollaborations with SYM, a Taiwanese automobile manufacturer that hashelped it to launch Flyte. SYM gave valuable inputs in the development ofthe Duro and Rodeo. M&M also drew on the experts of enginesengineering, the Italian automobile design and Technology Company thatworked on brands such as Ducati and Honda.

Questions

It is widely assumed that motorcycle killed the scooter market. Is ittoo simplistic an assumption? Where are the families who rode soproudly on ‘Hamara Bajaj’? Could Bajaj Auto have saved the scootermarket? Did it give in too easily?

1.

Mahindra and Mahindra launched scooters instead of motorcycles asits first two wheeler products?

2.

Who should M&M compete with- Motorcycle manufacturers orscooter manufacturers? What should its scooters match- scooters ofother manufacturers or motorcycles?

3.

What can M&M do to help develop the scooter market?4.

300In the fall of 1998, Chrysler and Mercedes – Benz merged. FormingDaimler – Chrysler AG. Daimler – Chrysler is the world’s third largest carmaker in sales and world’s fifth largest car maker in the number of carssold. Daimler-Benz, best known for making luxury sedans, also makescommercial vehicles, sport utility vehicles, and aerospace products. TodayMercedes – BenzUSAis a wholly owned subsidiary of Daimler – Chrysler.

Mercedes-Benz cars, which are manufactured inGermany, were first sold intheUnited Statesin the 1950s. Mercedes – Benz’s strategy in theUnitedStateshas always been to market premium automobiles. During the 1970sand 1980s Mercedes-Benz engineers built the best cars they could. They seta premium price tag in the products and for years that was how prices ofcars in the United Sates were established.

When Japanese automobiles Lexus and infiniti were introduced intotheU.S.market, Mercedes-Benz found itself facing increased competition.Lexus and Infiniti, along with a resurgent BMW, elected to compete withMercedes-Benz by offering comparable quality, at lower prices. Thesemarketing strategies had an impact on Mercedes-Benz business. To combatthe increased competition, dealers in theUnited Statesbecame focused on

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marketing efforts that would maximize customer satisfaction.

Mercedes-Benz’sU.S.strategy for customer satisfaction is based on what itcalls a customer value triad. The customer value triad consists of: 1)perceived goods quality 2) service quality 3) value-based prices.

Questions:

1. Based on the information provided in the case, evaluate Mercedes-Benz’s internal strengths and weaknesses and external opportunities andthreats when the Lexus and Infiniti automobiles were introduced.

2. What role customer expectations have in a customer’s satisfaction with aMercedes – Benz automobile? How might a company like Mercedes – Benzplan each element of the Customer Value Triad, so that each would help thecompany to exceed customer expectation?

3. What is the relationship between price and value in the purchase ofMercedes-Benz?

301Sony started as a radio repair shop, founded by Masuru Ikura and AkioMorita after the World War II. The company began its long history ofproducing compact consumer electronics in1957, when it introduced theworld’s first pocket – sized all-transistor radio. The company’s name, Sonywas taken from Sonus; the Latin word for “Sound” Sony went on to inventa series of transistor-based TVs and increasingly smaller audiocassetterecorders. In 1979, the Sony walkman introduced the world to anew,portable way of listening to music. Sony became a world leader in consumerelectronics and was the first Japanese company to have its shares on theNew York Stock Exchange.

In the late 1980s, Sony began expanding into media, purchasing a U.S.record company (CBS Records for $22 billion in 1988) and a majorHollywood studio (Columbia Pictures for $4.9 billion in 1989). Thepurchase made Sony a major force in the entertainment industry.

The importance of marketing at Sony started with Akio Morito, who saidthat for a company to be successful, it must have three kinds of creativity:creativity to make inventions, creativity in product planning and productionand creativity in marketing.

Creativity in marketing at Sony means not just clever ads, but deep insightsinto its customers. For eg, Sony knows its PlayStation customers like to findclues and to decode things. So Sony’s ads for PlayStation 2, feature a youngman walking the streets of a city where he encounters various signsforeshadowing the events. Mannequins appear in a store window, armoutstretched and point enigmatically to something that’s about to happen.“The lead character is almost in the midst of its own role-playing game. Heneeds to follow clues to save the heroine”, said Andrew House, Sony’sexecutive vice president of marketing. In the ads, “we were essentiallytrying to tap into a range of emotions that we think we deliver in the games– intrigue, foreboding, excitement, panic, relief and achievement in theend”

Sony’s marketing also includes careful measurement of each campaign’seffectiveness. For eg Sony runs a 30-second commercial for its PlayStation



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as part of the previews in more than 1,800 theatres and on 8000 moviesscreens. The ads appear before such films as “The Cat in the Hat”. SonyComputer Entertainment America has been running movie ads for six years.“Cinema advertising has been very effective for us” said Ami Blaire,director of product marketing. “The reason why we have committed tocinema every year is the tremendous unaided recall shown by our ownresearch and communicus commissioned ad tracking”

Another example of measurement is Sony’s’ Gen Y Youth marketingefforts. “The online program promoting the NetMD, ATRAC CD walkmanand Cybershot U30 ran July 1 through Sept 30, 2003, and we found thatmore than 70% of the click throughs were spurred by rich media ads versusstatic banners” Said Serge Del Grosso, Director of Media and InternetStrategy, Sony Electronics.

In Fact, Sony has even developed a direct-marketing solution which it sellsto other companies who want to measure marketing effectiveness. Theproduct, called eBridge™ allows marketers to use video, measure theeffectiveness of the campaign, and gain insight into the target audience, allin one package.

Sony expects the next big breakthrough will not come from a single newelectronic device. Rather, Sony president Kunitake Ando says that thefuture lies in making a whole range of devices more useful by linking themin a networked home-entertainment system. The company believes that itsclout in consumer electronics, combined with its media content, will allow itto steer that convergence in a way that suits it. Whether the future ofconvergence resides in TVs or PCs or devices, $62 billion Sony makesevery one of them – with a strong brand name that gives them an extra pushoff retail shelves around the world.

Questions

1. What have been the key success factors for Sony?

2. Where is Sony vulnerable? What should it watch out for?

3. What recommendations would you make to senior marketing executivesgoing forward? What should they be sure to do with its marketing?

302At 6.52 p.m. onWednesday, January 29, 2000, Rajpal and Sumitra bought afood processor. There was no doubt. Any observer would agree that thepurchase took place at, precisely that time. Or did it? When questionedafter the transaction, neither Rajpal nor Sumitra could remember, who, fromboth of them, first noticed or suggested the idea of getting a food processor.They did recall that in the summer of 1999, they attended a dinner partygiven by a friend who was specialized in South Indian and Chinese cooking.The meal was scrumptious, and their friend Gupta was very proud of theExcel food processor, which he had used to make many of the dishes. Theitem was quite expensive, however, at about Rs 6500. The followingsummer, Sumitra noticed a comparative study of food processors in Feminaand Savvy. Four different brands were compared across a number ofdimensions. At the same time, Rajpal noticed that many consumer reportscompared the number of brands of food processors. In both instances, theExcel brand was on the top. Rajpal even ran his own weighting schemes on



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some of the results. Later that year new modles of the Excel wereintroduced and the old standard model went on for sale, in departmentalstores at Rs 5,500. The Pals searched, occasionally for Excel in ‘Discounthouses’ or in ‘Wholesale showroom’ in hope to find an even lower price forthe product, but could not find.

In the year 1998 for Diwali the Pals traveled from Mumbai to the hometown inMeerut. There, the Pals received sunbeam Deluxe Mixer as a giftfrom grandmother. While the mixer was beautiful, Sumitra , immediately,thought how versatile a food processor would be and brought immediateagreement form Rajpal. The box was not opened, although many thankswere expressed. The box remained unopened the entire time the pals keptthe item.

Back home in Mumbai, in January, sumitra again saw the item of Rs 5,500.Excel advertised by Rich’s one of the tow major full-service departmentalstores in Mumbai. Rajpal and Sunitra visited a branch location in a Saturdayafternoon and saw the item. The sales person, however, was notknowledgeable of its features and not very helpful in explaining itsattributes. The Pals left disappointed. Two days later, Sumitra called thenearby store where she talked to Mrs. Gupta , a seemingly knowledgeablesales person. Furthermore, Mrs. Gupta said that they could exchangeSunbeam Mixer, which they received as a gift for processor. On thefollowing Friday morning the Pals drove through heavy rainy day traffic toRich’s to meet Mrs. Gupta. After a brief demonstration, the Pals confirmedtheir initial decision to buy the Rs 4,500 basic item. They then asked aboutexchanging the Sunbeam mixer that they had brought with them. “Noproblem” said Mrs. Gupta.

After making quick phone calls, Mrs Gupta returned with bad news, Rich’shad not carried that particular model of mixer. This was a single colourmodel that is usually carried at the discount houses. The one carried by thebetter departmental stores such as Rich’s was a two-tone model whichallowed two-tired pricing structure through two different channels ofdistributions. Mrs. Gupta was sorry, she could not make the exchange, butsuggested that other stores such as Ebony or Big’s kemp might carry theitem. She even offered to allow the Pals to use her phone to verify. Sumitradialed several of the suggested stores, looking for a retailer who carriedboth the Excel and the Sunbeam model. Finally the sales man at Ebonysagreed to take the item if she could get there by afternoon. Ebony’s wasone and a half km away. She took a taxi to ebonys with the still unopenedmixer box. After an hour later Sumitra returned with Rs 1000 in exchangefor the mixer. Together they bough the Excel at6.52 p.mand proudly took ithome.

Questions

1. Who of the Pals decided to buy the Excel food processor? Defend youranswer.

2. When did the decision to buy the processor made? Discuss.

3. What in your opinion was the deciding factor in purchasing the item?


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4. Would you consider this purchase process to be careful and deliberate?Was it an inefficient use of time? Is it a good model to follow?

303 Demand for Automated Switches

Singer Electronics is a manufacturer of automated switches that could beprogrammed to turn lights or appliances on or off at designed times. Theswitched incorporated microprocessor to achieve automated operation. Theindustry sales had increased rapidly since 1997 and with the massproduction the prices came down significantly.In 1997, singer had a major market share of 50 percent of the unitsproduced. However in 2000 a major competitor entered the market andaggressively went after the market share with lower than average industryprices. By 2002, singer had 35 percent share with its nearest competitor at30 percent of the marketSinger’s market share was declining due to aggressive marketing by itscompetitors and Singers belief that its high product quality demanded apremium in the market place. Singer followed the price reduction by itscompetitors reluctantly but always 2 to 3 percent higher pricesThe marketing manager was asked to forecast the demand for theautomated switches over the next five years. Based on this demand he wasfurther requested to develop Singer’s sales over the next three years for twoscenarios: (1) Continuation of same policies, and (2) Increase market shareto 45 percent in three yearsMARKET FOR AUTOMATED SWITCHES

Year Unit Sales Average PriceTotal

Revenues(Millions)

1997 200000 60 12

1998 500000 45 22.4

1999 1000000 36 36

2000 2500000 30 75

2001 4000000 27 108

2002 5000000 24 120

SINGER’S MARKET SHARE

Year Unit Sales Market ShareTotal

Revenues(Millions)

1997 100000 50% 6

1998 250000 50% 11.25

1999 450000 45% 16.2

2000 1000000 40% 30

2001 1520000 38% 41.04

2002 1750000 35% 42

Questions

Develop a demand profile (units and revenues) for automatedswitches over the next five years, and state your assumptions ofbusiness environment.

1.

What will happen to sales if Singer continues its current marketingpolicy?

2.

Do you believe that Singer could increase its share to 45 percent onthree years? What would be the impact of this strategy on company’sprofitability?

3.



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304 Marketing in a changing society

As economy expands and education becomes widespread, more and morefamily units have two or more earning members. The traditional role of menas the brand earner is now diminishing as women enter the workforce.Some women work because they like to pursue careers and put to use theireducation, while others work to supplement family income.Both types of women groups point to the transformation in society beingcaused by the expanding ranks of working women. The changing role ofwomen has already affected consumer advertising, politics and otherrecreational activities.Many marketers have leaped into the multibillion dollar “working woman”market, with mixed results. They are offering everything from workingwomen magazines to seminars on climbing the corporate ladder. Many arefinding that they initially misunderstood the employed woman and hereffect, not only on new but also on existing product markets. For example,the perception was that women with pay cheques like to “splurge” onthemselves. But women polled said that they feel guilty about suchexpenditures. In general, there has not been enough thinking about what thechanging market really means. But it is clear that this trend has squelchedsome outmoded assumptions.Marketing of household products, for instance, should emphasise thrift,convenience, or speed, if it is to succeed. Women no longer find theiridentity and self-esteem in clean, brighter-than-bright kitchen and house.Two-income families share decisions about purchases from banking servicesto bleach. They want plenty of product information which is equallyappealing to men and women. Women aren’t necessarily doing all of theshopping and meal preparation any more. Men, children and especiallyteenage girls are making choices of food and other products. New productsthat promise more leisure will also favor among employed women. Today’stwo income family earn more than average family but saves a smaller thanaverage proportion of its income. The working couple buys more clothes,cosmetics, transportation, domestic services, child care, restaurant meals,and readymade food.Questions

With more women working, why should the traditional advertisingconcept be changed?

1.

In developing new household products, how should the marketerstarget the buying population?

2.

Characterize the changing role of men, women, and children inworking family.

3.


305 Marketing Management ProcessDiebold Company specialized in making safes over the last 25 years. It hada solid reputation building safes that survived fire and other catastrophes. Inthe 1980’s, Diebold supplied bank branch networks with safer securitysystems and drive-in teller windows. The business boomed as branchnetworks multiplied. The marketing managers knew that growth from theseproducts would slow eventually and that they needed new trend-settingproducts to keep the company profitable.In the 1990’s, the company decided to break into automated teller machineswhich were being installed by big bank organizations. At that time, ThemisCorporation had a big lead in the market and ABM and MCR Corp., majorelectronics corporations, were challenging Themis. Diebold lacked



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electronics and automation capability and, most importantly, know-how tocrack the market.When the decision to enter automated teller market was made, Dieboldacquired electronics expertise and devoted resources to extensive research.Diebold through its marketing research discovered that Themis in its rapidgrowth and created servicing problems. Moreover, Themis was complacentas the leader and neglected to make their products up-to-date. MCRentered with a machine that was too big, slow and clumsy. ABM’sproduction was not enough to satisfy the demand.Diebold capitalized on competitor’s weakness and entered with a productthat was well suited to banking needs. Diebold was willing to work withcustomers to develop special packages that were tailored to bank’sspecifications. It modified the mechanical design and programming forCitibank. The flexibility offered by Diebold won business rapidly fromcompetitors. Diebold offered extensive servicing for overcomingoperational problems customer had with Themis. Diebold fixed machineswherever they had problems, thus increasing reliability and reputation.Diebold acquired 47 percentage of the business in seven years based onhigh quality products that offered up-to-date services and a tremendouslyresponsive after sales services to customer. Diebold nearly doubled itsassembly capacity to fill numerous orders. Its backlog is growing instead ofshrinking. Its profits doubled and stock price jumped.

Questions

How did Diebold turn the odds against it and gain leadershipposition?

1.

What is that we can learn from the success story of Diebold?2.

306 Nirma- SWOT Analysis

Strengths: Strong brand equity, Nirma is a $17 billion umbrella brandoffering consumers a broad portfolio of products at multiple price points inthe Detergents, Soaps & personal care market. Produces a range ofindustrial chemical products which are primarily serving as raw material orintermediates for soaps and Detergents business. Market leadership indetergents and fabric wash and second largest player n toilet soaps. Widedistribution network.Weakness: High interest burden. Less presence in premium segment. Lacksglobal tie-ups and thus finding it hard to tap export markets.Opportunities: Exports. Acquisitions for strengthening its distributiontie-ups. Entry into other categories like shampoos, toothpastes, and fabricwhiteners.Threats: MNC’s coming into India, particularly in Toilet and Soap industry.Emergence of small but strong regional players. Nirma as a brand has beenable to etch a niche for itself in the face of intense MNC competition. It hasonly emerged victorious in its core competency, detergents, but has alsosuccessfully moved on into newer products. Nirma’s achievement is surelysomething about which an Indian can be proud of, a brand that has lived

up to its catch line; Better Products, Better Value, Better Living!

The Man behind the Brand: A man of exemplary vision and extraordinarycourage, Mr. K.K Patel has his finger on the proverbial pulse of the ruralIndia, from the very beginning. He is the stuff that legends are made of. Thewall street journal, The Economist, Discover India and the EconomicReview have all featured him at some time or other. A marketing wizard,



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humanitarian and entrepreneur par excellence, his marketing expertiseforms the basis for the case studies at Business Schools. Mr. K.K Patelfirmly believes that a person who has received a lot out of life needs to givesomething back. One among the many contributors has been the NirmaMemorial Trust that takes care of deprived women in Gujarat. The NirmaFoundation, set up in 1979, has donated millions, within the state & outside,for schools, colleges, temples and social institutions. The best reward of allMr. K.K Patel, as he often says, continues to be “the smile on the face of a

satisfied buyer”. He built the brand, Nirma, from scratch, took it fromstrength to strength and, in the process, pioneered rural marketing in India.The result being one of the most comprehensive and widespreaddistribution networks in the country. Housewives swear by it, retailers stockit unfailingly, and brand loyalty continues to increase. Nirma has arrivedand has truly become a household name, in every sense of the term.Commenting on his success, in Sep 10, 1988, the Economist wrote:” Rarely

does a small manufacturer in a developing country take on a bigmultinational and win . Mr. K.K Patel has done it in India, taking

three-quarters of Hindustan Lever’s potential market from it.”

Questions

What is that you can learn from the success story of Nirma?1. Can you use similar strategies for other fast moving consumer goods?2.

307 Planning for new business

Mr. John London was a sales manager for a big heating equipment companyuntil he acquired Abbott’s Seafoods. This was the first business he ownedwhen an entrepreneurial urge led him to buy the tiny seafood cannery in1995.Mr. London’s initial strategy was to make Abbott’s national firm. Hesucceeded in getting Abbott’s products into 50 East Coast distributors thatsell to restaurants and institutions. This was a big step for a firm takers. SoMr. London spent long days calling on chefs. But selling to individualrestaurants took too much time and energy. Instead, he began toconcentrate on sales to institutions. Selling to big users involves a lot millionbusiness a year. Mr. London had to change his marketing plans and themanner in which he marketed to get a gradual business expansion .Mr. London thought he could bring the clam fritter into the market in 1988.That was two years ago. But the new product is still behind schedulebecause he had hired a free lancer who was busy in developing anotherproduct for Abbott’s to sell to a large catering concern.Mr. London sold this product to a home-office executive of this largecatering concern. He approved the new soup and ordered big quantities of itfor all company’s locations around the country. Soon, however, localmanagers of the carterer who had final say over what they served werecomplaining because they were forced to use Abbott’s soup. Abbott’s didnot lose money on this order but huge anticipated sales disappeared. Thisdisaster could have been avoided if the product had been introduced in onelocation at a time to gain the local manager’s acceptance.The test marketing of clam fritters with a group of local women turned outto be a disappointment. They said the fritters were too greasy and thecolour was too dark as if they had been overcooked. So it was back to thedrawing room.On another front, Abbott’s was forced out of its old factory because it



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violated zoning laws and local officials would not grant a waiver. Mr.London knew of this problem when he bought the company but he thoughthe could win the waiver from the city. So he did not expect to move. Hefound new quarters in an old commercial neighbourhood but the moveextended one year beyond his expectations. Obtaining influence and gettingplans approved took twice as long.Plans go wrong for everyone sometimes; but new business owners usuallytend to make unrealistic plans. Optimism and inexperience lead them tobelieve they can do more I less time than they really can.

Questions

What are the lessons learned from new small owners?1. How can planning be improved or is the learning from experience theonly alternative?

2.

Are some of the disappointments due to lack of resources orunderestimation of actual time to complete tasks ?

3.

308 Quality Bathing Soap

Navin Mehta, a fresh chemical engineer, developed a new detergent duringhis M. Tech. course. Upon passing out, he invested a small capital to startmanufacturing and selling the detergent under the brand name ‘Nippo’.Coming from a middle class family himself, Mehta decided to price hisdetergent much lower than the other detergents available in the market atthat time. His pricing strategy pad rich dividends and Nippo became aninstant success. Using his newly acquired financial strength, Navindeveloped a premium quality bathing soap with a unique colour andperfume combination. Although, the cost price of this soap was itself high,Navin again priced it substantially lower to be a comparable product in themarket by maintaining a low profit margin.Questions

Do you feel Navin committed a pricing mistake in the case of bathingsoap? Give reasons for you answer

1.

Suggest an appropriate marketing plan to Navin Mehta.2.


309 Computerisation of Distributor's Accounts

John Symon and Co. Ltd is a fast moving consumer goods company. Thecompany is in business for the last 20 years. Due to keen competition inmajor cities and big towns, they had planned at the beginning of 2009 toexpand their business in smaller towns on all India basis. To set up the basicinfrastructure they decided to computerize their distributors. The totalnumber of distributors were approximately 200. The implementation was tobe completed by middle of 2010.The purpose of computerization was to get information from distributorsregarding product sales, collections, outstanding, etc. on a more frequentbasis. The information was to be uploaded into the ERP package forconsolidation and analysis and then proposed to be sent twice a week to theHead Office through e-mail.The major initiative was headed by Mr. Krishnan, the finance Head and Mr.Patil, the logistics head. The programme was to be developed by the ITdepartment along with the logistics department. The internal needs of theorganization were assessed and the programme developed forimplementation at the distributors. The distributors were informed by means



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of a letter about the implementation schedule and asked to purchase thecomputer, printer and get an e-mail connection. The Zonal Sales Managerswere similarly informed.The big distributors were also dealing with other products. Many of themhad a computer which was used for financial accounting and keeping trackof all their businesses. Some of the small distributors had a computer but itwas not compatible for the implementation of the new software. Thedistributors also complained about lack of back up support andinfrastructural problems. Software had bugs, which were not noticed before.The project was delayed and distributors’ resentment was growing. At theend of 2010, the heads of the concerned departments sat down to get theproject back on steam.Questions

Do SWOT analysis of the project1. Where did the team go wrong?2. Was there a better way to implement the initiative?3.

310 Segmentation in Retail trade

CompanyMorgan Departmental store has been in business for 64 years in a smalltown in West Virginia. The department store sold all items such as shoes,gifts, small appliances, and apparel from children to adults. The store washit by recession and was out of touch with its customers. It faced plungingsales and soaring debt. About 60 percentage of its sales were on creditcharge accounts and as the recession deepened, customers fell way behindon payments causing a cash squeeze for the store. To pay its bills, thestoreborrowed money at 21 percent, interest, while it could collect only 18percent interest on credit card balances due to State laws. Morgans debtsclimbed and losses increased.

Survival Stage

The banks shut off credit and manufactures stopped shipping unless theywere paid on delivery. Owners of Morgan decidedto liquidate the businessand called in Mr. Buxabaum. Mr. Buxabaum, upon his arrival, found thatthe overall unemployment was much below national average and evenlower among the store’s middle income customers. For two days hesurveyed the towns traffic pattern, competitors merchandise and shoppinghabits at a new mall 50 km away. He talked with local media about store’sadvertising strengths and weakness.He recommended that the business could be salvaged if the store ownerstook certain action. He said the store was trying to be everything toeverybody. So he recommended that Morgan eliminate least profitable lines:shoes, gifts, small appliances and the children’s department. Morganreduced major appliance display area to make room for expanded ladies’and men’s apparel. The ladies and men’s garments had high volume andhigher profit margins. Mr. Buxabaum found people driving out of the townto buy sheets and towels at a distant store. Morgan, therefore, added a linendepartment.To get shoppers, the store announced a three-month “fight for Survival”sale offering discounts of as much as 50 percent. Previously, Morgan haddiscounted only 20 percent or less Mr. Buxabaum said that at least 40percent of the merchandise must be sold off price or you won’t bring incustomers.



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Morgan also revamped its merchandise buying. With Mr. Buxabaum’s help,they found suppliers who could offer better prices on furniture and apparel.Instead of buying from travelling salesman, Morgan’s buyers went tomanufacturer’s showroom. These efforts provided 10 to 30 percent savingson most apparel and also allowed store to update its fashions morefrequently.These changes finally paid off. The store’s sales went up for two months ina row. Profits were slim but atleast the cash started coming in. Morgan feelsthat its fight survival is far from over. It needs more planning, more marketresearch, and rapid changes to meet the customer demands. It must offerappropriate marketing mix for each typical market segment. It must haveenlightened promotional devices. It must have clear and precise marketingstrategies.Questions:

Why was Morgan Store about to fall?1. The reason retailers fails is because he does not make changes. Hedoesn’t ask himself basic questions: who are we trying to reach?What are our strengths? Comment.

2.

What other actions should Morgan take to continue on the road toprofitability?

3.


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