Q.1 What is product mix?

What are the strategies involved in product mix

and product line? (10 marks)
Answer

Product mix

The number of individual products produced or sold by an organization. The

mix is defined by the industry and manufacturing environment, and
management strategies that position the company as a specialty, niche or broad-
based supplier of goods and services. Instances where the product mix varies
widely from period to period often requires more investment in facilities and
inventory, and may result in lower levels of customer service.

It is extremely important for any organization to have a well-managed product

mix. Most organizations break down managing the product mix, product line,
and actual product into three different levels.

Strategies involved in product mix and product line

Product-mix decisions are concerned with the combination of product lines

offered by the company. Management of the companies' product mix is the
responsibility of top management.

Some basic product-mix decisions include:

1.reviewing the mix of existing product lines;

2.adding new lines to and deleting existing lines from the product mix;
3.determining the relative emphasis on new versus existing product lines in the
mix;
4.determining the appropriate emphasis on internal development versus external
acquisition in the product mix;
5.gauging the effects of adding or deleting a product line in relationship to other
lines in the product mix; and
6.forecasting the effects of future external change on the company's product
mix.

Product-line decisions are concerned with the combination of individual

products offered within a given line. The product-line manager supervises
several product managers who are responsible for individual products in the
line. Decisions about a product line are usually incorporated into a marketing
plan at the divisional level. Such a plan specifies changes in the product lines
and allocations to products in each line.
Generally, product-line managers have the following responsibilities:

1.considering expansion of a given product line;

2.considering candidates for deletion from the product line;
3.evaluating the effects of product additions and deletions on the profitability of
other items in the line; and
4.allocating resources to individual products in the line on the basis of
marketing strategies recommended by product managers.

Decisions at the first level of product management involve the marketing mix
for an individual brand/product. These decisions are the responsibility of a
brand manager (sometimes called a product manager). Decisions regarding the
marketing mix for a brand are represented in the product's marketing plan. The
plan for a new brand would specify price level, advertising expenditures for the
coming year, coupons, trade discounts, distribution facilities, and a five-year
statement of projected sales and earnings. The plan for an existing product
would focus on any changes in the marketing strategy. Some of these changes
might include the product's target market, advertising and promotional
expenditures, product characteristics, price level, and recommended distribution
strategy

Managing the product mix for a company is very demanding and requires
constant attention. Top management must provide accurate and timely analysis
(BCG) of their company's product mix so the appropriate adjustments can be
made to the product line and individual products.

Q.2 What is a distribution channel? Explain the factors to be considered

while setting up a distribution channel. (10 marks)
Answer

Distribution channel

A path through which goods and services flow in one direction (from vendor to
the consumer), and the payments generated by them that flow in the opposite
direction (from consumer to the vendor).

A marketing channel can be as short as being direct from the vendor to the
consumer or may include several interconnected intermediaries such as
wholesalers, distributors, agents, retailers. Each intermediary receives the item
at one pricing point and moves it to the next higher pricing point until it reaches
the final buyer. Also called channel of distribution or marketing channel.
Distribution is also a very important component of Logistics & Supply chain
management. Distribution in supply chain management refers to the distribution
of a good from one business to another. It can be factory to supplier, supplier to
retailer, or retailer to end customer. It is defined as a chain of intermediaries,
each passing the product down the chain to the next organization, before it
finally reaches the consumer or end-user. This process is known as the
'distribution chain' or the 'channel.' Each of the elements in these chains will
have their own specific needs, which the producer must take into account, along
with those of the all-important end-user.

Factors to be considered for setting up Distribution channel

The selection of distribution is affected by many of factors, which play

significant role while choosing the channel for distribution. It may include the
buying pattern of consumer, type of the product is perishable, or auto mobile,
weight and bulk and it also depends on the company's resources.

The main affecting factors are following..

Organization objectives - If company objective is to have mass appeal and rapid

market penetration.
type of product - Perishable products should have a short distribution channel,
FMCG goods should have a wide reaching, intensive distribution channel.
nature and extent of market- Distribution to consumer market or industrial
markets would be different channel structures.
existing channel for comparable product- company may chose it's existing
channel of distribution for relative product.
buying habit of customers- Understanding consumer needs and criteria for
buying
Channel Availability - Channels may not be available

and other factors like

Customer Characteristics
Product Attributes
Type of Organization
Competition
Marketing Environmental Forces and Characteristics of Intermediaries

Channels
A number of alternate 'channels' of distribution may be available:
Distributor, who sells to retailers,
Retailer (also called dealer or reseller), who sells to end customers
Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alice from

producer to consumer in certain sectors, since both direct and indirect channels
may be used. Hotels, for example, may sell their services (typically rooms)
directly or through travel agents, tour operators, airlines, tourist boards,
centralized reservation systems, etc. process of transfer the products or services
from Producer to Customer or end user.

There have also been some innovations in the distribution of services. For
example, there has been an increase in franchising and in rental services - the
latter offering anything from televisions through tools. There has also been
some evidence of service integration, with services linking together, particularly
in the travel and tourism sectors. For example, links now exist between airlines,
hotels and car rental services. In addition, there has been a significant increase
in retail outlets for the service sector. Outlets such as estate agencies and
building society offices are crowding out traditional grocers from major
shopping areas.

Channel decisions

Channel Sales is nothing but a chain for to market a product through different
sources.

Channel strategy
Gravity & adventure
Push and Pull strategy
Product (or service)
Cost
Consumer location

Managerial concerns

The channel decision is very important. In theory at least, there is a form of

trade-off: the cost of using intermediaries to achieve wider distribution is
supposedly lower. Indeed, most consumer goods manufacturers could never
justify the cost of selling direct to their consumers, except by mail order. Many
suppliers seem to assume that once their product has been sold into the channel,
into the beginning of the distribution chain, their job is finished. Yet that
distribution chain is merely assuming a part of the supplier's responsibility; and,
if they have any aspirations to be market-oriented, their job should really be
extended to managing all the processes involved in that chain, until the product
or service arrives with the end-user. This may involve a number of decisions on
the part of the supplier:

Channel membership
Channel motivation
Monitoring and managing channels

Q.3 Discuss the communication development process with examples. (10

marks)
Answer
In ‘development communication’, you see that there are two
words-‘development’ and ‘communication’.

Communication is a message understood or sharing of experience. When we

refer to communication, in the context of development, we refer to various types
of communication like interpersonal, group and mass communication.

Development,It is not easy to define this as it depends on the context.

Development is about change. It is about changing for the better.

It could be about social or economic change for improvement or progress.

When we refer to development communication, it is about such communication
that can be used for development. It is about using communication to change or
improve something. Here we use different types of messages to change the
socio-economic condition of people. These messages are designed to transform
the behaviour of people or for improving their quality of life. Therefore,
development communication can be defined as the use of communication to
promote development. Those who write or produce programmes on issues
related to development are called development communicators.

Role of a development communicator

The development communicator plays a very significant role in explaining the
development process to the common people in such a way that it finds
acceptance.

In order to achieve this objective a development communicator:

has to understand the process of development and communication;
should possess knowledge in professional techniques and should know the
audience;
prepare and distribute development messages to millions of people in such a
way that they are received and understood, accepted and applied.

If they accept this challenge they will be able to get the people to identify
themselves as part of a society and a nation. This identity will help in bringing
human resources together for the total welfare of the individual and the
community at large.

DEVELOPMENT COMMUNICATION USING VARIOUS MEDIA

The history of development communication in India can be traced to rural radio
broadcasts in the 1940s in different languages. Have you ever heard a rural
programme on radio? If you come from a rural area, you probably would have
heard. People who present these programmes speak in a language or dialect that
the people in your area speak. The programmes may be about farming and
related subjects. The programme may comprise of interviews with experts,
officials and farmers, folk songs and information about weather, market rates,
availability of improved seeds and implements. There would also be
programmes on related fields. During the 1950s, the government started huge
developmental programmes throughout the country.In fact, when Doordarshan
started on 15th September 1959, it was concentrating only on programmes on
agriculture. Many of you might have seen the ‘Krishi Darshan’ programme on
Doordarshan. Later in 1975, when India used satellites for telecasting television
programmes in what is known as SITE (Satellite Instructional Television
Experiment), the programmes on education and development were made
available to 2400 villages in the states of Andhra Pradesh, Bihar, Karnataka,
Madhya Pradesh, Orissa and Rajasthan.

As far as the print media is concerned, after Independence when the Five Year
Plans were initiated by the government for planned development, it was the
newspapers which gave great importance to development themes. They wrote
on various government development programmes and how the people could
make use of them.

If the print media have contributed to development communication, the

electronic media – radio and television especially All India Radio and
Doordarshan have spread messages on development as the main part of their
broadcasts. However, amongst all the media that are used for development
communication, traditional media are the closest to people who need messages
of development like the farmers and workers. Such forms of media are
participatory and effective.

You may have seen construction workers cooking their meal of dal and rice
over open fires in front of their tents set up temporarily on the roadside. They
need to be educated about the values of balanced nutrition, cleanliness, hygiene
and water and sanitation.

In various parts of India, groups of volunteers use street theatre as a medium for
development communication. This is done through humorous skits and plays
through which the importance of literacy, hygiene etc. are enacted. The content
for the skits is drawn from the audience’s life. For example, they are told about
“balanced nutrition” . This means supplementing their staple diet of dal and rice
with green leafy vegetables known to cure night blindness, an ailment common
among construction workers. Similarly, female construction workers and their
children are taught how to read and write.

However, problems in communicating a message in an effective way has been a

matter of concern to development workers.
How can people be taught new skills at a low cost?
What would be a good way to deal with sensitive topics such as health issues?
How can complicated new research, like that in agriculture for example, be
simplified so that ordinary people can benefit?
One option has been the use of comics. But, in order to achieve the desired
results, these comics should be created locally.
But what are ‘comics’ ? You must have all at some point of time read a comic.
Comics involve story telling using visuals which must follow local ideas and
culture in order to be understood correctly by people. The important thing about
comics is that they are made by people on their own issues in their own
language. So, readers find them closer to their day-to-day lives.
Programmes are organized in the remote areas of Jharkhand, Rajasthan,
Tamilnadu, and the North East to provide training to rural communicators to
enable them to use comics in development communication.

Information on sensitive health issues such as HIV/AIDS has been

communicated throught the medium of comics in several states. However, you
must understand that development communication using various media is
possible only with the active involvement of the following:

(i) Development agencies like departments of agriculture.

(ii) Voluntary organizations
(iii) Concerned citizens
(iv) Non governmental organizations (NGOs)

Examples

One of the first examples of development communication was Farm Radio

Forums in Canada. From 1941 to 1965 farmers met in groups each week to
listen to special radio programs. There were also printed materials and prepared
questions to encourage group discussion. At first this was a response to the
Great Depression and the need for increased food production in World War II.
But the Forums also dealt with social and economic issues. This model of adult
education or distance education was later adopted in India and Ghana.

In 1999 the U.S. Government and D.C. Comics planned to distribute 600,000
comic books to children affected by the Kosovo War. The comic books are in
Albanian and feature Superman and Wonder Woman. The aim is to teach
children what to do when they find an unexploded land mine left over from
Kosovo's civil war. The comic books instruct children not to touch the anti-
personnel mines and not to move, but instead to call an adult for help. In spite of
the 1997 Ottawa Treaty which attempts to ban land mines they continue to kill
or injure 20,000 civilians each year around the world.

Since 2002, Journalists for Human Rights, a Canadian based NGO, has operated
long term projects in Ghana, Sierra Leone, Liberia, and the DR Congo. jhr
works directly with journalists, providing monthly workshops, student sessions,
on the job training, and additional programs on a country by country basis.

Q.4. Select any mobile handset and mobile company and then evaluate its
positioning strengths or weakness in terms of attributes, benefits, values,
brand name and brand equity. (10 marks)
Answer

Abstract

In the late 1990s, Nokia overtook then leader Motorola to emerge as a behemoth
in the global mobile phone industry. Nokia's dominance continued into the first
few years of the 2000s, but it suddenly came under threat in 2003-2004, when
smaller Asian vendors started making their presence felt with better products at
lower prices.
The company's problems also had internal causes and analysts said one of the
reasons could be that it had become too complacent with its success and lost its
agility in reading and responding to market signals.

This case study discusses the various problems Nokia faced in 2003-2004,
including the company's tardiness in introducing the clamshell phones that had
become very popular and its resistance to manufacturing operator specific
handsets. It also discusses the efforts Nokia made to recover its market once it
realized that its performance was slipping. The case concludes with an analysis
of the challenges the company faced in the future and the various options ahead
of it.

Issues:

To understand the difficulties faced by an erstwhile giant in the global mobile

phone industry in 2003-2004.
To appreciate the importance of innovation in a dynamic and volatile industry.
To analyze the effect of changing market conditions on companies.
To appreciate the importance of keeping abreast with changing market
conditions and adapting to them speedily.
To examine future challenges that the company faced and the various options
available to it

We want to be the company that brings this industry to the next phase. And if
we have a little bit of a bump in the road in 2004, that's immaterial."

- Jorma Ollila, CEO of Nokia, in mid 2004.1

"Nokia didn't have the coolness factor. They didn't really do flip phones; they
were a little late with cameras, and they didn't push them. Coolness in the
consumer space is a big deal, and they were stodgy."

Jack Gold, vice president of Meta Group, a

Connecticut-based technology consulting firm, in 2005.2

Positive Signs
The announcement of Nokia Corporation's (Nokia) quarterly results in April
2005 was a much awaited event as far as the global mobile phone industry was
concerned. The company, which had emerged as an industry leader in the late
1990s, had run into rough weather in 2003-2004, with sales and earnings falling
below expected levels. So much so that when the company announced poor
results in the first quarter of 2004, several analysts declared that it was the
beginning of the end of Nokia's dominance in the industry.

However, Nokia was not ready to throw in the towel quite so easily. The
company put up a tough fight over the second half of 2004 to recapture its lost
position in the market.

It introduced several new models, modified designs, and aggressively promoted

products with a view to increasing its market share, which had fallen to a low of
around 28 percent in early 2004 from an average of 35 percent over the previous
three years.

Nokia's efforts started paying off by late 2004. The company announced
satisfactory results for the fourth quarter of 2004 and market share for the year
2004 also stabilized at 32 percent by the end of the year. Jorma Ollila (Ollila),
Nokia's CEO, while acknowledging that 2004 had been a challenging year,
declared that the company was poised to recover in 2005. Ollila's prediction
came true when the company announced better than expected results for the first
quarter of 2005, ending March 31.

In the first quarter of 2005, Nokia's sales increased 17 percent over the
corresponding quarter of the previous year to $9.65 billion.

Net profit rose 18 percent to $1.1 billion. Global handset sales rose 11 percent,
prompting Nokia to increase its estimate of the size of the global handset market
in 2005 by 100 million to 740 million.Commenting on Nokia's improved
performance, Jussi Hyoty (Hyoty), an analyst at securities firm FIM Securities,
said, "Nokia's result was definitely better than expected, and it shows that it's a
growth company again."3

However, despite these positive signs, several analysts wondered whether Nokia
would ever be able to dominate the industry as it did in the late 1990s and the
first two years of the new century, especially in light of the aggressive
competition posed by several new Asian companies as well as more established
players like Motorola and Sony Ericsson.

Background
Despite the relatively recent emergence of the mobile phone industry globally,
Nokia's company history goes back to the 1800s.

The company was first set up on the banks of the river Nokia (after which it was
named) in southwestern Finland in 1865 by Fredrik Idestam, who was a mining
engineer. The original Nokia was a forest industry enterprise that primarily
manufactured paper.

In 1898, Carl Henrik Lampen, a shopkeeper, and J.E. Segerberg, an engineer,

set up the Finnish Rubber Works Ltd. (FRW) to manufacture rubber and
associated chemicals. In 1912, Konstantin Wikstrom, an engineer, set up the
Finnish Cable Works (FCW) to manufacture electrical cables for lighting
purposes. These three companies had business dealings with each other through
the early 1900s and eventually merged in 1967 to form the Nokia Corporation.
The new company had four major businesses - forestry, rubber, cable and
electronics.

By 1980, Nokia was a large business conglomerate with several businesses

ranging from tires to televisions and computers to telecommunications.
Excerpts
The Rise to the Top
Nokia drew on its experience of setting up Nordic cellular networks (which
were more advanced than those used by Japan, the rest of Europe, and the US at
that time) to successfully adopt the GSM standard. The company was listed on
the New York Stock Exchange in 1994. Over the 1990s, Nokia became one of
the most successful mobile phone manufacturers in the world and began to enter
non-Scandinavian markets as well.

Nokia was also one of the first mobile manufacturers to realize the importance
of the design element in mobile phones and its phones were more aesthetically
designed than those of competitors. In 1998, Nokia overtook Motorola to
become the largest mobile manufacturer in the world...

Designed for Innovation

Nokia was the first mobile phone manufacturer to realize in the late 1990s that
phones no longer played only a functional role; they were also becoming
fashion symbols.

Until Nokia began emphasizing the design aspect, mobile phones were bulky,
bricklike devices with an external antenna and a standard keypad.
Manufacturers emphasized functionality over aesthetic appeal.

Nokia broke new ground in 1999, when it launched its 8200 handset on the
catwalk at a Paris fashion week...

The Decline
In mid-2004, The Economist wrote, "When a firm dominates its market,
especially one that is driven by constant technological advances, it risks
becoming so fixated with trying to ward off what it reckons to be its most
powerful challenger that it leaves itself vulnerable to attack from other
directions."Analysts said this statement accurately characterized what happened
with Nokia.

In the early 2000s, Microsoft Corp (Microsoft) announced its decision to enter
the mobile phones market. The announcement set alarm bells ringing in Nokia
as Microsoft had the reputation of being an aggressive competitor...

Efforts at Recovery
Soon after announcing disappointing results in the first quarter of 2004, Nokia
realized that it was in trouble and began to take steps to correct matters. The
company not only cut prices on certain handsets to increase market share, but
also fine-tuned its portfolio to adjust products to meet market needs. It killed
some outmoded models and brought forward the launch of several others,
including a number of clamshell phones.

In June 2004, Nokia launched five new models of phones, out of which three
were clamshells. Nokia's new models were the 6260 model, a clamshell whose
cover not only flipped open but also swiveled, the 6630, which Nokia claimed
was the world's smallest camera phone, designed for 3G networks, another
clamshell, the 6170, and two low end models, the 2650 and 2600. Several other
models were also marketed aggressively.

For instance, the low end 1100 model for emerging markets and the 6230 mid
range model became very popular in 2004. (The 6230 was so popular in some
markets that at times, Nokia was not able to meet the demand)...

A Challenging FutureDespite Nokia's laudable efforts in the direction of

recapturing its lost market position, the opinions of analysts on its turnaround
were mixed.

While the company's detractors believed that Nokia had lost its competitive
advantage in the mobile phone market, its supporters said the company's
inherent strengths and stable financial position would help it sail through the
difficulties it had faced in 2003-2004 to recover in the future. However, most of
them agreed that the mobile phone industry was undergoing a vast change.

In the early 2000s, mobile phones were expected to perform a variety of

functions in addition to looking stylish and being easy to operate. Nokia's
competitors had understood this and were in the process of launching several
models that were style statements in themselves...
Exhibits
Exhibit I: The Phone Feature of N-Gage

Q. 5 What is retailing? Explain the functions and different types of

retailing with its key features. (10 marks)
Answer

Retailing
Retail consists of the sale of goods or merchandise from a fixed location, such
as a department store, boutique or kiosk, or by mail, in small or individual lots
for direct consumption by the purchaser.[1] Retailing may include subordinated
services, such as delivery. Purchasers may be individuals or businesses. In
commerce, a "retailer" buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and then
sells smaller quantities to the end-user. Retail establishments are often called
shops or stores. Retailers are at the end of the supply chain. Manufacturing
marketers see the process of retailing as a necessary part of their overall
distribution strategy. The term "retailer" is also applied where a service provider
services the needs of a large number of individuals, such as a public utility, like
electric power.

Types of retailers by marketing strategy:

Department stores - very large stores offering a huge assortment of "soft" and
"hard goods; often bear a resemblance to a collection of specialty stores. A
retailer of such store carries variety of categories and has broad assortment at
average price. They offer considerable customer service.
Discount stores - tend to offer a wide array of products and services, but they
compete mainly on price offers extensive assortment of merchandise at
affordable and cut-rate prices. Normally retailers sell less fashion-oriented
brands.
Supermarkets - sell mostly food products;
Warehouse stores - warehouses that offer low-cost, often high-quantity goods
piled on pallets or steel shelves; warehouse clubs charge a membership fee;
Variety stores or "dollar stores" - these offer extremely low-cost goods, with
limited selection;
Demographic - retailers that aim at one particular segment (e.g., high-end
retailers focusing on wealthy individuals).
Mom-And-Pop (or Kirana Stores as they call them in India): is a retail outlet
that is owned and operated by individuals. The range of products are very
selective and few in numbers. These stores are seen in local community often
are family-run businesses. The square feet area of the store depends on the store
holder.
Specialty stores: A typical speciality store gives attention to a particular
category and provides high level of service to the customers. A pet store that
specializes in selling dog food would be regarded as a specialty store. However,
branded stores also come under this format. For example if a customer visits a
Reebok or Gap store then they find just Reebok and Gap products in the
respective stores.
General store - a rural store that supplies the main needs for the local
community;
Convenience stores: is essentially found in residential areas. They provide
limited amount of merchandise at more than average prices with a speedy
checkout. This store is ideal for emergency and immediate purchases.
Hypermarkets: provides variety and huge volumes of exclusive merchandise at
low margins. The operating cost is comparatively less than other retail formats.
A classic example is the Metro™ in Bangalore.
Supermarkets: is a self service store consisting mainly of grocery and limited
products on non food items. They may adopt a Hi-Lo or an EDLP strategy for
pricing. The supermarkets can be anywhere between 20,000-40,000 square feet.
Example: SPAR™ supermarket.
Malls: has a range of retail shops at a single outlet. They endow with products,
food and entertainment under a roof. Example: Sigma mall and Garuda mall in
Bangalore, Express Avenue in Chennai.
Category killers or Category Specialist: By supplying wide assortment in a
single category for lower prices a retailer can "kill" that category for other
retailers. For few categories, such as electronics, the products are displayed at
the centre of the store and sales person will be available to address customer
queries and give suggestions when required. Other retail format stores are
forced to reduce the prices if a category specialist retail store is present in the
vicinity. For example: Pai Electronics™ store in Bangalore, Tata Croma.
E-tailers: The customer can shop and order through internet and the
merchandise are dropped at the customer's doorstep. Here the retailers use drop
shipping technique. They accept the payment for the product but the customer
receives the product directly from the manufacturer or a wholesaler. This format
is ideal for customers who do not want to travel to retail stores and are
interested in home shopping. However it is important for the customer to be
wary about defective products and non secure credit card transaction. Example:
Amazon and Ebay.
Vending Machines: This is an automated piece of equipment wherein customers
can drop in the money in machine and acquire the products. For example: Soft
drinks vending at Bangalore Airport.

Some stores take a no frills approach, while others are "mid-range" or "high
end", depending on what income level they target.

Other types of retail store include:

Automated Retail stores are self service, robotic kiosks located in airports, malls
and grocery stores. The stores accept credit cards and are usually open 24/7.
Examples include ZoomShops and Redbox.
Big-box stores encompass larger department, discount, general merchandise,
and warehouse stores.
Convenience store - a small store often with extended hours, stocking everyday
or roadside items;
General store - a store which sells most goods needed, typically in a rural area;

Retailers can opt for a format as each provides different retail mix to its
customers based on their customer demographics, lifestyle and purchase
behaviour. A good format will lend a hand to display products well and entice
the target customers to spawn sales.

Functions of Retailing

Retailers play a significant role as a conduit between manufacturers,

wholesalers, suppliers and consumers. In this context, they perform various
functions like sorting, breaking bulk, holding stock, as a channel of
communication, storage, advertising and certain additional services.

Sorting

Manufacturers usually make one or a variety of products and would like to sell
their entire inventory to a few buyers to redu7ce costs. Final consumers, in
contrast, prefer a large variety of goods and services to choose from and usually
buy them in small quantities. Retailers are able to balance the demands of both
sides, by collection an assortment of goods from different sources, buying them
in sufficiently large quantities and selling them to consumers in small units.

The above process is referred to as the sorting process. Through this process,
retailers undertake activities and perform functions that add to the value of the
products and services sold to the consumer. Supermarkets in the US offer, on
and average, 15,000 different items from 500 companies. Customers are able to
choose from a wide range of designs, sizes and brands from just one location. If
each manufacturer had a separate store for its own products, customers would
have to visit several stores to complete their shopping. While all retailers offer
an assortment, they specialize in types of assortment offered and the market to
which the offering is made. Westside provides clothing and accessories, while a
chain like Nilgiris specializes in food and bakery items. Shoppers’ Stop targets
the elite urban class, while Pantaloons is targeted at the middle class.

Breaking Bulk

Breaking bulk is another function performed by retailing. The word retailing is

derived from the French word retailer, meaning ‘to cut a piece off’. To reduce
transportation costs, manufacturers and wholesalers typically ship large cartons
of the product, which are then tailored by the retailers into smaller quantities to
meet individual consumption needs.

Holding Stock

Retailers also offer the service of holding stock for the manufacturers. Retailers
maintain an inventory that allows for instant availability of the product to the
consumers. It helps to keep prices stable and enables the manufacturer to
regulate production. Consumers can keep a small stock of products at home as
they know that this can be replenished by the retailer and can save on inventory
carrying costs.

Additional Services

Retailers ease the change in ownership of merchandise by providing services

that make it convenient to buy and use products. Providing product guarantees,
after-sales service and dealing with consumer complaints are some of the
services that add value to the actual product at the retailers’ end. Retailers also
offer credit and hire-purchase facilities to the customers to enable them to buy a
product now and pay for it later. Retailers fill orders, promptly process, deliver
and install products. Salespeople are also employed by retailers to answer
queries and provide additional information about the displayed products. The
display itself allows the consumer to see and test products before actual
purchase. Retail essentially completes transactions with customers.

Channel of Communication

Retailers also act as the channel of communication and information between the
wholesalers or suppliers and the consumers. From advertisements, salespeople
and display, shoppers learn about the characteristics and features of a product or
services offered. Manufacturers, in their turn, learn of sales forecasts, delivery
delays, and customer complaints. The manufacturer can then modify defective
or unsatisfactory merchandise and services.
Transport and Advertising Functions

Small manufacturers can use retailers to provide assistance with transport,

storage, advertising and pre-payment of merchandise. This also works the other
way round in case the number of retailers is small. The number of functions
performed by a particular retailer has a direct relation to the percentage and
volume of sales needed to cover both their costs and profits.
Q. 6 a. What is CRM? What are its objectives? (2 marks)
b. Write a short note on Brand development. (8 marks)
Answer CRM stands for Customer Relationship Management. It is a process or
methodology used to learn more about customers’ needs and behaviors in order to develop
stronger relationships with them. There are many technological components to CRM, but
thinking about CRM in primarily technological terms is a mistake. The more useful way to
think about CRM is as a process that will help bring together lots of pieces of information
about customers, sales, marketing effectiveness, responsiveness and market trends.

CRM helps businesses use technology and human resources to gain insight into the behavior
of customers and the value of those customers.

Objectives of CRM

CRM, the technology, along with human resources of the company, enables the company to
analyze the behavior of customers and their value. The main areas of focus are as the name
suggests: customer , relationship , and the management of relationship and the main
objectives to implement CRM in the business strategy are:

• To simplify marketing and sales process

• To make call centers more efficient
• To provide better customer service
• To discover new customers and increase customer revenue
• To cross sell products more effectively

The CRM processes should fully support the basic steps of customer life cycle . The basic
steps are:

• Attracting present and new customers

• Acquiring new customers
• Serving the customers
• Finally, retaining the customers

Brand development

A plan to improve the performance of a particular product or service. For example, as part of
brand development a firm may initiate a new advertising campaign that includes free
samples.