ASSIGNMENTS - MBA II SEMESTER

MB0030 (4 CREDITS)

SET 2

MARKETING MANAGEMENT

Q.1:- a. Give a short note on bases of Segmentation.

b. Analyze the pricing methods with relevant examples

Ans:- Bases for Segmenting Consumer Markets

1. Geographic segmentation: Dividing the market into different

geographical units such as nations, states, regions, cities or neighborhoods.
The company can operate in one or a few Geographic areas or operate in all
but pay attention to local variations. For example, Bennett, Coleman and co
Ltd divided markets according to geographical units for their tabloids.
In Bangalore the tabloid is known as Bangalore Mirror where as it is
Mumbai Mirror in Mumbai.

2.
Demographic Segmentation: In demographic segmentation the market is divided in
to groups on the basis of variable such as age, family size, family lifecycle,
gender, income,
occupation, education, religion, race, generation, nationality and social class.
Demographic variables are the most popular bases for distinguishing customer
groups. One reason is that consumers wants, preferences and usage rates are
often associated with demographic variables. Demographic variables are easy
to measure. Even when the target market is described in non-
demographic terms, the link back to demographic
characteristics is needed in order to estimate the size of the
target market and the media that should
be used to reach it efficiently. Some of the demographic variables used are :

(a) Age and LifeCycle Stage: Consumers wants and abilities change with
age. On the basis of age, a market can be divided into four parts viz.,
children, young, adults and old. For consumers of different age groups,
different types of products are produced. For instance, different types
of readymade garments are produced for consumers
of different age groups. A successful marketing manager should
understand the age group for which the product would be most suited

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 and determine his marketing policy, pricing policy, advertising
policy etc., accordingly.
For example, HUL launched pepsodent kids for small children.

(b) Gender: Gender segmentation has long been applied in clothing, hair-
styling, cosmetics and magazines. For example, Emami segmented its
personal care business on the basis
of gender. For women, it is having Emami naturally fair,
and for men it is fair and handsome.

(c) Income: Income segmentation is a longstanding practice in such

product
and service categories as automobiles, clothing, cosmetics and travel. Howev
er, income does not always predict the best customers for a given product.
For example,
Baja Auto limited, a leading automobile company, different bikes for
different commuters. For entry level (less than Rs35000) it is Bajaj CT 100, for
mid segment (greater
than Rs35000 but less than Rs60000) it is pulsar and for the upper
segment greater than Rs 60000 Avenger and Eliminator is positioned.

3. Psychographic Segmentation: In Psychographic segmentation, buyers

are classified into different groups on the basis of lifestyle or personality and
values. People within the same demographic group can exhibit very different
psychographic profiles.

(a) Lifestyle: People exhibit different lifestyles and goods they

consume express their lifestyles. Many companies seek opportunities in
lifestyle segmentation. But lifestyle segmentation does not always work.
(b) Personali Marketers have used personality variables to segment
the markets.
They endow their products with brand personality that corresponds to
consumer personalities.
(c) Social Class: It has a strong influence on preference in cars,
clothing, home furnishings, leisure activities, reading habits etc. Many
companies design products and services for specific social classes.

4. Behavioral Segmentation or Consumer Response Segmentation: In beha

vioral segmentation,
buyers are divided into groups on the basis of their knowledge or attitude
towards the use of, or response to a product. Some marketers believe that behaviora
l variables are the best starting points for constructing market segments.

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 (a) Occasions: According to the occasions, buyers develop a
need, purchase a product or use
a product. It can help firms expand product usage. A company can
consider critical life events to see whether they are accompanied by certain n
eeds. For example, Tanishq a TATA enterprise
offers schemes and promotions for Akshaya Thrutiya ( auspicious
day to purchase jewellary)

(b) Benefits: Buyers can be classified according to the benefits they

seek. For example,
Peter England, a madhura garment brand positioned its wrinkle free trousers
on the basis of benefits.
c) User Status: Markets can be segmented into nonusers, potential
users, first time users and regular users of a product. Each market
segment requires a different marketing strategy. The companys market
position will also influence its focus. Market leaders will focus on
attracting potential users, whereas smaller firms will try to attract current
users away from the market leader. For example, Kishkinda resort near
Hampi classifies its customers according to
this characteristic. Resort believes that locals falls into on-
user category, affluent class who comes
to Hampi as potential users, foreigners as first time users rich people
near Hampi who frequently come there as regular users.

(d) Usage Rate: Markets can be segmented into light, medium and
heavy product users. Heavy users are often a small percentage of the
market but account for a high percentage of
total consumption. Marketers prefer to
attract one heavy user rather than several light users and they
vary their promotional efforts accordingly.

Price determination is very important aspect of strategic planning.

Marketers fix the price of the product on the basis of cost, demand or competition.
Dell, which allows customers to customize the product adopted flexible pricing metho
ds. In contrast, Indian oil companies product prices are fixed by the government whe
re company does not have any control. Retailer like big bazaar Fair price and Subhi
ksha targeted price conscious consumer. Manufacturers and service providers
all over
the world outsourced some of their functions to developing countries to get cost adva
ntage which help them in reducing their final price. Internet has become alternative t
ool for shopping to the consumer. It offers wide range of products and lesser price.

Pricing method which affect price decision

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1. Marketing objectives: There are four major objectives on which
prices are determined. They are survival, current profit maximization, Market
share leadership and product Quality leadership. Survival strategy adopted
when company is facing stiff competition
from the competitors and it wants quick reaction and recovery. Current profit
maximization strategy is used to defend the market position. To explain,
assume
a company is operating in the lubricants business. Its sales and market share are ve
ry high. It always tries to hold their current position. To do this it increases the price o
f the product. The next objective is market share leadership. Here, company
strives to achieve the leadership position in the market. It reduces the price
of the product so that more number of customers buys the product. Through
volume generation company gets the market leadership position. Product
quality leadership objective is used when company decides to come with
high quality product and premium price. The intention
of the company is to cater to the needs of the niche segment.
2. Costs: The cost of marketing and promoting the product will have direct
impact on the price. For example, Airline fuel cost went up recently. All airline
companies increased the price of the ticket. Company will be incurring
fixed cost
(plant, Machinery etc...) as well as variable cost (Raw material, labor etc) The fixed
cost will go down if the number of products produced increases. The variable cost of
the product decreases if the product
is produced up to optimal level and then once again it goes up. Hence
the total cost (fixed cost plus variable cost) vary according to both fixed cost and
variable cost. Marketer is interested in knowing the break even analysis when
he introduces
the product in the market. The break even point for a product is the point where total
revenue received equals the total costs associated with the sale of the product (TR=
TC). A break even point is typically calculated for businesses to determine whether it
would be profitable to sell a proposed product, as opposed to attempting to modify a
n existing product instead so it can be made lucrative. BreakEven Analysis can also
be used to analyze the potential profitability of an expenditure in a sales-
based business.

3. 4Ps of marketing:
The price of the product is determined by the other marketing mix elements
also. Product influences the price level i.e. if the product quality is very
high company would like to price it high and vice versa. The new product
requires aggressive promotion and results
in higher promotion cost and higher price. Supply chain
management also plays an important role in the price determination. If the
organization able to integrate their supply chain well then it will be
having distribution advantage than others. Let me explain these concepts

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with examples. Nokia when it introduced 1100 handset in Indian market
priced at Rs 5200. It did so to get back its R&D
and promotion cost. When the sales picked up, the price of the product has come do
wn to Rs3800. Cavin care introduced sachets and priced at 50 paisa. HUL
was forced to come out with sachets at the same price.

4. Nature of the market and demand: The price determination depends on the
nature of the
market also. The nature of the market is classified into following categories.
(a) Perfect competition
(b) Monopolistic competition
(c) Oligopolistic competition
(d) Monopoly

5. Competition: Price is also determined by how intense the competition i

s in the industry. Cellular industry and airline industry in India are involved in
such type of price wars.
The price war between Hutch (Now Vodafone) and Airtel is exemplary. Air Deccan
which started no frill airline made other airliners like go air, spice jet and
paramount to reduce the price of their airlines.

6. Environmental factors. These external factors are very crucial for the
companys price decisions. We discussed the impact of Macro and micro
environment on the companys strategies. For example, in the union budget
tax on cigarette is increased. Hence company that manufactures cigarette
should increase the price. The increase in the price is determined by the
government environment which is external to the company.

Q.2:- Explain the benefits and demerits of the different types of advertising
media.
How will a marketer decide on the suitable media for his/her products?

Ans:- Advertising Any paid form of non-

personal presentation and promotion of ideas, goods, or services by
an identified sponsor. For example: Print ads, radio, television, billboard, brochures
and, signs, in store displays, posters, motion pictures, and banner ads.

It has been universally accepted that advertising is an important tool of

marketing of the products. The expenditure on advertising is regarded as a profitable
investment. The main benefits claimed of advertising are as follows:-

1. 3 R's of advertising. These are retaining the loyal customer, reducing lost
customers and recruiting new customers.

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2. Reduction in per unit cost Advertising enables a businessman to increase
the sales of the product.

3. Increase in employment Advertising increases the sales volume of goods

and provides employment to a large number of workers.

4. Change in the living habits An effective advertisement brings about a rapid

change in the habits and attitudes of people.

5. Elimination of middleman Advertising awakens interest and provides utility

of goods far and wide in the country.

6. Acceptance of new products It introduces new products to the customers.

7. Virtues of thrift It has a great educative value. It teaches the people the
benefits of thrift and their responsibility to their dependents.

8. Institutional management Advertising helps in building up a favourable

image of the country.

Some other benefits are: Sales of entire line of product Increasing the sales of
entire industry Advantages to consumers Encourages competition Social benefits.

Demerits of Advertising

Various objections against it may be listed as follows:

1. Economic Objections

(a) Advertising is not productive. It is true that it does not produce any
tangible goods. It is said to involve wasteful expenditure.

(b) It forces people to desire and buy goods, which, in fact, are not within
their means.

(c) It increases the cost of goods. Advertising charges are included in the
price, which the consumer has to pay.

(d) Advertising results in monopoly. The consumer becomes a slave to a

particular brand.

2. Social Objections

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 (a) Most of the advertisements contain tall claims and the consumers do
not enjoy the benefits advertisement in full. They are shortlived only.

(b) The press is influenced by the advertisers because they provide major
revenue for the existence of newspapers.

3. Ethical Objections

(a) Advertising appeals make people to use such articles, which may affect
their health. For example alcoholic drinks and cigarettes.

(b) People with less purchasing power cannot afford to buy articles even
though advertisements create a strong need in them. Thus a section of
society remains discontented. Whatever may be said against advertising, it is
increasingly used almost in every branch of business to promote sales. It is
not merely a means of sales promotion but today it has become a science
equivalent to any other social science.

Other disadvantages of Advertisement These are the disadvantages

of advertising:

1. Increases the cost: It increases the cost of goods. The cost of the
advertisement is included in the price and is ultimately borne by the customers.

2. Misleads the public: It misleads the public by giving false statements about
the product. (It may be true in some cases but majority of advertisers know the value
of honest statements.)

3. Creates a dissatisfaction: It creates tastes and desires for some people

whose income may not allow them to buy. Such people feel dissatisfied.

4. Creates a monopoly: It increases monopolistic trend. Due to advertisement

some manufacturers create monopoly in industry and thus reduce healthy
competition. It becomes difficult for new firms to enter the field.

5. Creates the confusion: It creates the possibility of wrong purchases. Being

impressed by the advertisement, in some cases, a person is not able to purchase the
commodity, which he actually wants to purchase.

6. Encourages luxury: This encourages luxury. Mostly the commodities related

to comforts and luxuries are advertised, for example, cigarettes, cosmetic goods and
etc. due to advertisement of cigarettes several persons start smoking cigarettes,
which becomes habit.

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7. Reduces cleanliness: It reduces cleanliness. Large number of posters and
writings on the walls are used for advertisement. This makes the roads and the walls
of the houses look dirty. Thus, it reduces the natural beauty.

8. Causes wastage: It is a cause of wastage of natural resources. As a results

of advertisement, style and fashion change quickly. It makes the goods out of
fashion.

Marketer The marketer divides the market into homogeneous sub markets by
understanding the needs, perceptions and expectations of the consumers. On
the basis of segmentation, the company will prepare and follow different
marketing programs for different segments to ensure better customer
relationship. Marketer divides the market into distinct groups of buyers who
have similar preferences. These groups are called segments with their own
specific demographic, psychographic and behavioral
characteristics. The marketer decides as to which of these segment or segments off
er highestopportunity for his company. For each of these target markets, the firm de
velops a product / service suited to their needs. TATA group has recently designed
an economy car called NANO is priced around Rs.1 Lakh. The target market for thi
s car is all aspirants who dream of owning a car but cannot afford cars
which are now available for minimum Rs.2.5 Lakh. A Target Market is the
group of people at whom a marketer targets his
marketing efforts to sell his goods and services.

Marketers must examine the changing needs of the customer.

This process provides opportunity to examine whether customers are satisfied with
the existing products or not. If they are not satisfied what are the
features they are looking at. It also helps to test the
innovative concepts that company has, commercially viable or not. For example,
Titan, wrist watch manufacturer from Tata group should analyze whether
customer are satisfied with the time accuracy in the watch. It should
also analyze what are the other features customer is looking in the watch. It
may be style, calculator, voice recorder, jewels studded or pulse monitor. In
this case, time accuracy
became existing want and other features become future wants.

Decisions involved on the suitable media in setting up a channel Marketer

should consider various factors before deciding the particular type of channel. It
may be company or competitive factors. The type of goods to be transported
and stored will decide the length and intensity of channel. To decide on the
particular channel, marketer will take following decisions.

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1. Understanding the customer profile: Purchasing habits differs from
individual to individual. Individuals who face
shortage of time would like to purchase on the net (direct channel) and who
have abundance of time would like to experience the shopping.
Some of them would like to have variety of goods while others want unique or
specialized products. Hence marketer should understand who are his customers?
How do they purchase? For example, customer dont like to travel half a kilometer
to purchase a shampoo sachet but he dont mind travelling two kilo meters while
purchasing durable goods.

2. Determine the objectives on which channel to be developed.

(a) Reach: Company would like to make the goods available in most of the
retail outlets. It will adopt intensive distribution channel.
(b) Profitability: Company wants to reduce the cost in the channels and e
nhance their profitability. It
will restructure the channel to optimum level so that it can reduce
the cost and increase the profit.
(c) Differentiation: Company positions their products differently. When
most of the industry players follow conventional system, company goes
with new format of channels. For example, all computer manufacturers
were adopting dealer retailer channel to sell their products but
Dell started selling its product on the internet.

3. Identify type of channel members: Once the objectives are set on

the basis of companys
policies, it will analyze which type of the channel best suits. Merchants, agents
and resellers are some intermediaries involved in the distribution. Merchants are
those who buy the product, take
title and resell the merchandise. Agents will find the customers,
negotiate with them but do not take the title of the product. Facilitators are the people
who aid the distribution but do not negotiate or take the title of the product.

4. Determining intensity of distribution: Intensity of distribution means how

many middlemen will be used at the wholesale and retail levels in a particular
territory. If the numbers of intermediaries
are excess then the cost of the channel will increase vice versa
if the number of intermediaries
are less then company will not be able to meet all target
customers. Therefore company should adopt optimum number of intermediaries.
On the basis of how many intermediaries required, company can adopt any
one of the following strategies.

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 (a) Intensive distribution: A strategy in which company stocks goods i
n more number of outlets. The intention is to make the goods available near
to the customer. For example, you can find Parle-
G glucose biscuits available in almost all the
retail outlets in rural and urban areas.
(b) Selective distribution: A strategy in which company stocks
goods in limited number of
retail outlets. For example, televisions are sold only in selected
retail outlets. TVs cannot be sold like toothpaste. Onida TVs are available
in electronic retail shops like Viveks, Girias, Next, Ezone etc
(c) Exclusive distribution: In this type of channel format marketer
gives only a limited number of dealers the excusive right to distribute its
products in their territories. For example, a Kaya skin
care solution of Marico was marketed through exclusive distribution.

5. Assigning the responsibilities to channel members.

Company should define the territory
in which channel member should operate, at what price he should sell, services he
should perform, and how he should sell.

6. Selecting the criteria to evaluate the channel member: company may

have different types of channel alternatives. It would like to choose any one
of the alternatives, which meets
its objectives. Channels can be evaluated in the design phase by the
method called SCPCA.

(a) Sales(S) The ability of each channel member to generate the sales
for company in a given period.
(b) Cost(C) how much cost each channel alternatives incur?
Which one of the alternative provides the optimum solution?
(c) Profitability (P) various channel alternatives available to the
company and their
profitability shall be compared. Company with better profitability shall be
selected.
(d) Control (C) Every company would like to have better control
over its channel members. Alternative channels can be evaluated on
the basis of how much control each
channel member desires? And how much control the company is
willing to provide?
(e) Adaptability (A) Marketing is dynamic world. Competition exerts
pressure on companies
to relook at their practices and supply chain continuously.
The channel alternatives should be flexible enough to meet the changing

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 requirements. Whichever channel alternative
meets such objectives shall be selected.

Example: Radio

Benefits

1. A universal medium. Can be enjoyed at home, at work, and while driving.

Most people listen to the radio at one time or another during the day.
2. Permits you to target your advertising dollars to the market most likely to
respond to your offer.
3. Permits you to create a personality for your business using only sounds and
voices.
4. Free creative help is ususally available.
5. Rates can generally be negotiated.
6. Least inflated medium. During the past ten years, radio rates have gone up
less than other media.

Demerits

1. Because radio listeners are spread over many stations, to totally saturate your
market you have to advertise simultaneously on many stations.
2. Listeners cannot refer back to your ads to go over important points.
3. Ads are an interruption to the entertainment. Because of this, radio ads must
be repeated to break through the listener's "tune out" factor.
4. Radio is a background medium. Most listeners are doing something else while
listening, which means your ad has to work hard to be listened to and understood.
5. Advertising costs are based on ratings which are approximations based on
diaries kept in a relatively small fraction of a region's homes.

Q.3:- Write a note on new product development and product mix.

Ans:- Product: A good, service, person, place, events or

organizations offered to consumers to
satisfy his need or want. A product may be person also. Here marketer tries to buy
and sell the celebrities or sports persons of a league or club etc For,
example, Board of
cricket control in India (BCCI) asks its Indian premier league (IPL) teams to buy Iconi
c players and foreign players for certain price.

Product development New products are essential for existing firms to

keep the momentum and for new firms they provide the differentiation. New
product doesnt mean that absolutely new to the world. It may

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be modification, or offered in the new market, or differentiate from existing
products. Therefore it is necessary to understand what are new products? New
Products are:-

1. They are really innovative: Googles Orkut a networking site which

revolutionized social
networking. In this site people can meet like minded people; they can form
their own groups and many more.

2. They are very different from the others: Haier launches pathbreaking 4-
Door Refrigerators First time in India.

3. They are imitative; these products are not new to the market but new
to the company. For example, cavin Kare launched ruche pickles. This
product is new to cavin kare but not to
the market. New product development process:

Stage 1: Idea generation: new product idea can be generated either from
the internal sources or external sources. The internal sources
include employees of the organization and data collected from the market. The
external source includes customers, competitors and supply chain members.
For example, Ingersoll rand welcomes new ideas from the General public

Stage 2: Idea screening: Organization may have various ideas but it should find
out which
of these ideas can be translated into concepts. In an interview to Times of India,
Mr. Ratan Tata, chairman TATA group discussed how his idea saw many
changes from the basic version. He told that he wanted to develop car with
scooter engine,
plastic doors etc... But when he unveiled the car so many change were there in the p
roduct. This shows that initial idea will be changed on the basis of market requireme
nts.

Stage 3: Concept development: Concepts used for Tata Nano car are

Concept 1: lowend 'rural car,' probably without doors or windows and with plastic curt
ains that rolled down, a fourwheel version of the autorickshaw
Concept 2: a car made by engineering plastics and new materials, and using
new technology like aerospace adhesives instead of welding.
Concept 3: Indigenous, inhouse car which meets all the environment standards

Stage 4: Concept testing: at this stage concept was tested with the group of targ
et customers.

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Stage 5: Marketing strategy development: The marketing strategy development
involves
three parts. The first part focuses on target market, sales, market share and profit
goals. TATAs
initial business plan consisted sales of 2 Lakh cars per annum. The second
part involves product rice, distribution and marketing budget strategies. TATAs fixed
Rs 1 Lakh as the car
price, and finding self employed person who works like agent to distribute the
cars. The final part contains marketing mix strategy and profit goals.

Stage 6: Business analysis: It is the analysis of sales, costs and profit estimate
d for a new
product to find out whether these align with company mission and objectives.

Product mix: The number of product line and items offered

by marketer to the consumer
A companys product mix has four different dimensions. They
are product mix width,
product mix length, and product mix depth and product mix consistency.

Product mix width: The total number of product line that

company offers to the consumers. For example, Jyothy laboratories product
mix has six lines. Hence width is 6

Product mix length: The total number of items that company carries within its
product line.
For example, Jyothy laboratories fabric care division has three items

Product line depth: The number of versions offered of each product

in the line. For example, Jyothy laboratories Jeeva Natural is offered in three
versions i.e. Coconut
Milk with Milk Protein, Coconut Milk with Jasmine and Coconut Milk with Kasturi
Manjal, and is presented in 75gm packs.

Product mix consistency: If companys product lines usage, production

and marketing are
related then product mix is consistent else it is unrelated. Incase of Jyothy
laboratories, all six product lines are FMCGs. Hence it is having consistent product
mix. But ITC Companys cigarette and cloth product line are totally unrelated.

Q.4:- Select any brand of toilet soap and evaluate its positioning strengths
or weaknesses in terms of attributes, benefits, values, brand name and brand

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equity. Also, examine how competitive brands influence the marketing
strategies of the selected soap.

Ans:- LUX Lux soap was first launched in 1916 as laundry soap targeted
specifically at 'delicates'. Lever Brothers encouraged women to home launder their
clothes without fear of satins and silks being turned yellow by harsh lyes that were
often used in soaps at the time. The flake-type soap allowed the manufacturer some
leeway from lye because it did not need to be shaped into traditional cake-shaped
loaves as other soaps were. The result was a gentler soap that dissolved more
readily and was advertised as suitable for home laundry use. Lux toilet soap was
introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a play on the
word "luxury." Lux has been marketed in several forms, including bar and flake and
liquid (hand wash, shower gel and cream bath soap). Lux in step with the changing
trends and evolving beauty needs of the consumers, offers an exciting range of
soaps and Body Washes with unique elements to make bathing time more
pleasurable. One can choose from a range of skincare benefits like firming, fairness
and moisturising. Lux stands for the promise of beauty and glamour as one of India's
most trusted personal care brands. Since its launch in India in the year 1929, Lux
has offered a range of soaps in different colours and world class fragrances. Lux is a
beauty soap of film stars. Lux recognized the need for a compelling message about
beauty that would resonate with women of today. From the 1930s right through to
the 1970s, Lux soap colours and packaging were altered several times to reflect
fashion trends. In 1958 five colours made up the range: pink, white, blue, green and
yellow.

People enjoyed matching their soap with their bathroom colours. In the early
1990s, Lux responded to the growing trend away from traditional soap bars by
launching its own range of shower gels, liquid soaps and moisturizing bars. Lux
beauty facial wash, Lux beauty bath and Lux beauty shower were launched in 1992.

In 2004, the entire Lux range was re-launched in the UK to include five
shower gels, three bath products and two new soap bars. 2005 saw the launch of
three exciting new variants with dreamy names such as Wine & Roses bath cream,
Glowing Touch and Sparkling Morning shower gels. Lux has recently launched its
two fruit extract variants New Lux Strawberry & Cream and Lux Peach & Cream
contain a blend of succulent fruits & luscious Chantilly cream. The most recent
addition in the brand is Lux Crystal Shine.

Study of LUX with respect to 4 Ps

1. Product A product is anything that can be offered to a market to satisfy a

need or want. Products that are marketed include physical goods, services,
experiences, events, persons, places, properties, organizations, information and
ideas.

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Product Classification

1. LUX is a Tangible, Non Durable Good on the basis of this classification.

2. LUX and other soaps fall into the category of Convenience Good

Sales Promotion Sales promotion, a key ingredient in marketing campaigns,

consists of a collection of incentive tools, mostly short term, designed to stimulate
quicker or greater purchase of particular products or services by consumers or the
trade.

Whereas advertising offers a reason to buy, sales promotion offers an

incentive to buy. Sales promotion includes tools for
Prominent Sales Promotion Schemes Used By LUX
1. Lux presented 30 gm gold each to the first three winners of the Lux Gold Star
offer from Delhi. According to the promotional offer that Lux unveiled in October
2000, a consumer finding a 22-carat gold coin in his or her soap bar got an
opportunity to win an additional 30 gm gold. The first 10 callers every week got a 30
gm gold each. The offer could be availed only on 100 gm and 150 gm packs of Lux
soap. Lux celebrated 75 years of stardom with the Har Star Lucky Star activity. All
wrappers of Lux had a star printed inside them. If the consumer found written inside
the star, any number from 1 to 5, she would get an equivalent discount (in rupees)
on her purchase from her shopkeeper. If the consumer found 75 years written
inside the star, she will get a years supply of Lux free.

Price segments of toilet soaps

Segment Price/weight
Premium > Rs. 15 / 75 gms
Popular Rs. 8-15/75 gms
Economy < Rs. 8 /75 gms
However, recently HUL has been forced to hike its price by one rupee, to Rs17 (for
100 gm), giving in to the pressures of inflation. This paves the way for competing
soap makers like Godrej Consumer Products (GCPL) to take price increases. Lux
has versions in all the three price segments:
Recent pricing of Lux (100 g) Lux Crystal Shine Rs 17 Lux Festive Glow Rs 15
Mini Lux Rs 5

STRENGTHS OF LUX

1. Strong Market Research (door to door sampling is done once a year in Urban
and Rural areas)
2. Many variants (Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts, Saffron,
Sandalwood Oil, and Honey to name a few)
3. Strong sales and distribution network backed by HLL

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4. Strong brand image
5. Positioning focuses on the attractive beauty segment
6. Dynamically continuous innovation of the product and brand rejuvenation
new variants (Aromatic Glow and Chocolate Seduction and Lux White Spa body
wash) and innovative promotions (22 carat gold coin promotion Chance Hai)
7. Perceived to have high value for money (strong brand promotion but relatively
lower price which is a winning combination in the popular segment)
8. Though it is in popular segment, it is having mass appeal/market presence
across all segments (15% of the soap market captured by Lux (sales / volume)
9. Unique advantage of having access to resources and assets of HLL

WEAKNESSES
1. Lux is mainly positioned as beauty soap targeted towards women, hence it
lacks unisex appeal
2. Usage rate/ wear rate is high and is generally mushy and soggy
3. Some variants like the sunscreen, International variant did not do well in the
market
4. Certain advertisements like the recent one with Shah Rukh Khan resulted in
controversial interpretations of the message of the advertisement and lead to some
loss of focus (of message of the advertisements)
5. Stock out problems - replenishment time is high in semi-urban/rural areas
6. Earlier positioning as the soap of the stars has somewhat alienated the
brand from a portion of the consumers especially in rural areas.

Q.5:- As a salesperson in a fast moving consumer goods company, what

kind of training and development methods do you feel are required? How
important is training for sales force and how can it be evaluated?

Ans:- Training is a continuation of selection. Having selected

the salesmen, there are two options.
They can be sent to the field directly with samples, order books etc., (born salesman
)
and/or they can be sent for training programme. Some people think that salesmansh
ip is born in man, but there are only born salesmen, like born doctors, lawyer, engine
ers, teachers etc. However all these people need training to
call them qualified, and so also is the case with salesman. A man may
have interest in the profession. The interest can be fully developed, through
proper training. One attains perfection,self development etc., through training.
Training means it is the process of perfecting the salesmen
for their work. Training programme are
organized procedure or methods through which knowledge as well as skill, for a
definite purpose, is acquired. By training, one can increase knowledge in a
particular field. The salesmanship
is not born but can be made effective through training.

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Training Methods: For imparting training to the salesman, different methods are bei
ng used. Broadly, these methods may be divided into two:

1. Group Training:

(a) Lecture Method: An expert or a lecturer speaks to trainee-

salesmen about the various aspects of selling. It consists of oral talk
in a classroom. This system is widely used. The trainees listen to the
lectures. The instructor invites questions and answers from them.
To make the lecture more interesting, visual aids, demonstration,
suitable examples may be added. This system is more economical,
and is the easiest and quickest in imparting theoretical training to
a group of salesman. But it is difficult to evaluate
the effectiveness of lecture method. This method can be used more
effectively in continuing sales
training programme to provide new information or
changes in the policies of the firm. This may include seminars, demonstration
etc., by expert salesmen.

(b) AudioVisual Method: In order to supplement the lecturing (telling)

method,
training programs include the use of visual aids, such as films, slides, posters
etc., and are capable of making, them more interesting.

(c) Discussion Method: This is a good method. Here an

actual case or an imaginary case is given
as a problem to be solved, to the different groups. The case or the problem
may be typed or printed. Each group is asked to understand the
problem and draw a conclusion. After this, the different conclusions or
suggestions are analyzed collectively, under the leadership of the
instructor, in drawing generalizations from each
case or problem. This type of training enables the salesmen in
correcting their own views. It is suitable for a small group. It is slow and
costly.

(d) Conference Method: Sales conferences and sales meeting are a

kind of get together of all the concerned staff, weekly, fortnightly or monthly.
The thoughts of various persons are pooled in the conference. Meetings or
conferences have motivating effects as the participants are
given chances for creative thinking and to express their views. To
make the conference more interesting, dramas, demonstrations etc., are
included. Topics like, sales policies,
facing competition, publicity ideas, dealings with complaints etc., are dealt wit

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 h. And these will facilitate the participants in broadening their outlook and ide
as. But this type of meetings or conferences is not suitable for new recruits.

(e) Role Playing Method: Role playing is a newly developed method.

The sales trainees are made to act out roles in contrived problems. The
trainer explains the situation of the problem and assigns the role of
salesman and customers of different characters to the sales trainees.
Each one has to act the assigned role. The trainer watches the role
played by each and discusses their weaknesses and strong points. A few
may be selected to act the play, while others may watch it. Thus, the
salesman have chance to see and understand the ideas in
different situations. It is not suitable for new recruits.

(f) Panel Method: Members in the panel group may be permanent.

The members, who are experts in the panel, discuss the problems,
and solutions are passed to the salestrainee groups, who may have further
discussion. This system is ineffective.

(g) Round Table method: It is similar to the discussion method. It con

sists of
few members. The salesmen sit around a table along with a good discussion
leader. They deal with the problems of actual cases. Every participant
takes part freely in discussing the problems and solutions. Exchanges of
new ideas take place advantageously.

(h) Brain Storming Method: Under this method, more or less, similar to r
ound table conference, persons sit around the table. The leader presents the
problems for discussion. The
sales trainees have to understand the problems and find the solutions. The
solutions are analyzed by the leader or tested by the panel of experts. This method
practically fetches no value.

2. Individual Training:
(a) Onthejob Training:
Under this method, a new salesman is placed under an
experienced or senior salesman who trains him. First the coach explains the
sales techniques under different situations. He also takes the trainee
along with him on his rounds and gives him chances to observe the
dealings with the customers. Doubts of the trainee are also clarified.
Then the coach along with the trainee calls on customers; the sales
trainee is allowed to deal with
the customer and the coach observes the performance. If any weak point or s
hortcoming is found in the sales trainee, they discuss how to overcome
them. After some time, the sales

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 trainee becomes a trained and independent salesman.
This system is good for traveling salesman.

(b) Sales Manual: It is a complied textbook. It contains details

of the firm and products,
job description, sales policies, opinions or reports required for
reference purposes etc. Generally, it contains many problems with suggestiv
e solutions.
A copy of the book is given to a salesman to go through it and understand the
ideas. It works as a readyreckoner.

(c) Initial or Breakin Training: New recruits are given an

orientation training
so as to know about the company and its products. He may be allowed to
work
for some time in the firm itself to gain sufficient information about the products
. After that he is sent to work in his field.

Importance of Training to sales persons

1) A trained salesman always wins customers by systematic approach.

2) Salesman acquires better understanding of the firm, as to its past
history, policies and procedures and this helps the salesman for effective dealings.
3) A trained salesman takes less time in concluding a saleearly selling maturity.
4)
A trained salesman brings increased volume of sales, in turn, more profit to th
e firm and himself.
5)
A trained salesman is able to meet consumers demand and help in solving pr
oblems.
6) Increased volume of sales facilitates reduction in cost of production i.e.,
sales rise faster
than expected. The cost per unit of order or per prospect can be minimized.
7) A better relation is created among the customers through reducing
customers
complaint, increasing brand loyalty etc. Customers satisfaction is gained.
8) The ability of the salesman is increased by expert knowledge.
9) Controlling of salesman becomes easy.
10) Training facilitates better demonstrations, selling the products which
have high profit margin, better methods of canvassing etc. Sales training
helps to increase the sales
volume. Supervision cost is reduced as trained salesman needs less supervision.

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Q.6:- What is International Marketing? What are the various strategies to enter
International markets? Explain.

Ans:- International marketing is defined as The performance of business

activities designed to plan,
price, promote and direct the companys flow of goods and services to
consumers or users in more than one nation for a profit. A company that wants
to sell their product in other than domestic market should understand
the environmental factors, consumer behavior, market forces and other
characters relevant to the international market.

The marketing concept is the idea that a firm should seek to evaluate market
opportunities before production, assess potential demand for good, determine the pr
oduct characteristics desired by the consumers, predict the prices consumers are will
ing to pay and then supply goods corresponding to the needs and wants of target ma
rkets. Adherence to marketing concept means the firm conceives and develops
products to satisfy consumer wants. For international marketing this means
the integration of the international side of the companys business
with all aspects of its operations and the willingness to create new products and
adapt existing products to satisfy the needs of world markets. Products may
have to be adapted to suit the tastes, needs and other characteristics
of consumers in specific regions, rather than it being assumed that an item
which sells well in one country will be equally successful elsewhere.

International Market Entry Strategies Organizations that plans to go for internatio

nal marketing should answer some basic questions like

a. In how many countries the company would like to operate?

b. What are the types of countries it plans to enter?

To answer the above questions companies evaluate each country against the
market
size, market growth, and cost of doing business, competitive advantage and risk lev
el.

Once the market is found to be attractive companies should decide

how to enter this
market. Companies can enter international market from any one of the following
strategies. They are:-
a. Exporting
b. Licensing
c. Contract manufacturing
d. Management contract
e. Joint ownership

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 f. Direct investment

Exporting is the techniques of selling the goods produced in the domestic

country in a foreign country with some modifications. For example, Gokaldas
textiles export the cloths to different countries from India. Exporting may be
indirect or direct. In case of indirect exporting,
company works with independent international marketing intermediaries.
This is cost effective and less risky too. Direct exporting is the techniques in which
organization exports the goods on its own by taking all the risks. Maruti udyog
limited Indias leading car manufacturer exports its cars on its own.

Company can also set up overseas branches to sell their products. Adani exp
orts another leading exporter from India has international office in the Singapore.

Licensing: According to Philip Kotler licensing is a method of entering a foreign m

arket in
which the company enters into an agreement with a license in the foreign market, of
fering
the right to use a manufacturing process, trademark, patent, or other item of value fo
r a fee or royalty. For example, torrent pharmaceuticals has license to sell the cardio
vascular drugs of Chinese manufacturer Tasly. Licensing may cause some problems
to the parent company. Licensee may violate the agreement and can use the technol
ogy of the parent company.

Contract manufacturing: Company enters the international market with

a tie up
between manufacturer to produce the product or the service. For example, Gigabyte
technology has contract manufacturing agreement with D link India to produce
and sell their mother boards.
Another significant manufacturer is TVS electronics; it produces key boards in
its own name as well as for other companies too.

Management contracting: In this type

a company enters the international market by providing the
know how of the product to the domestic manufacturer. The capital, marketing
and other activities are carried out by the local manufacturer hence it is less risky too
.

Joint ownership: A form of joint venture in which an international company

invest equally with a
domestic manufacturer. Therefore it also has equal right in the controlling
operations. For example, Barbara a lingerie manufacturer has joint venture with Gok
aldas images in India.

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Direct Investment: In this method of international market entry Company invest in m
anufacturing or assembling. The company may enjoy the low cost advantages of that
country. Many manufacturing firms invested directly in the Chinese market to
get its low cost advantage. Some
governments provide incentives and tax benefits to the company which
manufactures the product in their country. There is government restriction in some c
ountries to opt only for direct investment as it produces the jobs to the local people.
This mode also depends on the country attractiveness. It may become risky if the ma
rket matures or unstable government exists.

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