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Marketing Management Caselets 15102009

Marketing Management Caselets 15102009

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Section B: Caselets (40 marks)
• This section consists of Caselets.• Answer all the questions.• Each caselet carries 20 marks.• Detailed information should form the part of your answer (Word limit 200 to250 words).
Caselet 1
NBC Industries had pioneered the battery technology in India for over 75 years. Itwas formallyknown as NBC Chloride Industries, a subsidary of FKS, U.S. It had been a leaderin packaged powertechnology and was India’s largest storage battery company with internationallyreputed brands. Till 1995, NSC’s major brand Suraksha had been the market leader in theautomotive segment butwas a niche player in the segment. Fifty percent of its sales came from OEM andonly fifteen percentcame from the replacement sales. The remaining thirty five percent came fromindustries, motorbikesand exports. NBC was forced to follow the downturn in the automotive sector. Itwas increasinglyfelt that the company needs to expand its market base and in an effort to do so,it decided to increaseits penetration in the industrial segment. It went in for a technical collaborationwith a leadingindustrial battery manufacturer, whose brand Pickwick, enjoyed a dominantmarket share in theindustrial segment. It also acquired the production capacity of Pickwick. Thus,after the technicalcollaboration Pickwick which was a competing brand became a partner brand forSuraksha. Anotheradvantage of industrial segment was that they were generally high capacitybatteries, which gave
higher profit margins to the firm. The technical collaboration , required NBC tosell the industrialbatteries under the brand name of Pickwick. Since, NBC was able to capture agood market share inindustrial market.
 The NBC had a product range covering a capacity of 2.5 Ah to 15,000 Ah. Usingthe latesttechnology, NBC now manufactured industrial battery for power, telecom,computer industries,railways, mining and defence. Suraksha and Pickwick were the major brands of the firm and cateredto both the automotive and the industrial segment. The industrial segment hadbeen showing growthand NBC had capitalized on this growth. The total turnover of NBC was 30 crores.Suraksha, NBC’soriginal brand, enjoyed an image of reliability and trustworthiness while, Pickwickcontinued toenjoy its heritage of being a Japanese brand.Semester 1 Examination paperIIBM Institute of Business Management
As the two brands were technically identical, the company policy was to keep theMRP for both thesame but the margin to the dealer for Pickwick was five percent more.
After the technical collaboration, the company had four regional officers andtwenty five branchofficers. Currently, Pickwick had 1000 authorised and 500 sub-dealers. Surakshaon the other hand,had 1500 authorised dealers and 700 sub-dealers . Battery up to 20 Ah were soldthrough the dealer
network and those upto 20 Ah and more were sold directly by the productmanagers (Exhibit 1). Thusa branch office took care of the industrial batteries upto 200Ah capacity and thereplacement marketof the automotive segment. For the automotive sales, the company had separatesales personal forPickwick and Suraksha as the volume were generally very large. The same salespersonal handledindustrial sales of both Pickwick and Suraksha.
 The buyer of battery was generally known to be loyal to the brand in thereplacement market but inthe industrial sales a committee took the purchase decision and therefore therewas a time lagbetween inquiry and purchase. The NBC policy was generally not to convert thePickwick users toSuraksha unless the demanded brand was not in stock. There were times whenthe branch managerwould push Suraksha when his opinion was sought as it offered more profit tothe company.
In the industrial segment NBC was facing competition from its unbrandedimported products as wellas the Indian manufacturers. Anti dumping duties were put on imported productsbut batteries fromSAARC countries like Bangladesh and Thailand continued to enter the Indianmarkets. Theunbranded batteries were forty percent cheaper and were maintenance free andoffered toughcompetition to the branded products but gave no guarantee. Ajay Bhandari hadrecently joined NBCcompany as the branch manager at Nagpur. He was reviewing the monthly salesreport for Surakshaand Pickwick batteries. He found that the Pickwicks sales were slippingcontinuously while, sales of 

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