Case No.

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SALONI CHOCOLATES

Objectives After going through this case, you will be able to : • • • • recognise how concepts are converted into skills. identify the planning of the marketing channels. explain business expansion limitations. relate consequential effects on marketing strategies.

When she was 11 years old, Saloni sampled chocolates at a candy-store and thought that she could do better. She made her own recipe and began selling small candy bars in her hometown. The effort was much like that of many youngsters who open lemonade-stands and earn a few rupees to spend on movies. People, however, began asking her for more. Using her meagre profits, Saloni began making large batches of candy in her mother's kitchen, designed her own wrappers and developed a commission system for friends who sold chocolates at schools. Business was so good that it became an obsession. Saloni worked hard, with grit, determination and tenacity after school hours, at week-ends, and holidays, aside from a brief period when the health department suspended her operations until she could obtain proper licence to cook candy. She made candy by hand until she graduated from high school. At first, she could meet demand without special equipment or by sacrificing other activities, but when she provided candy for a school fund-raising event, demand exceeded capacity. It was at this stage that Saloni found herself buying professional equipment, hiring helpers and purchasing bulk supplies.

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Looking back,Saloni recalls the obsession, the long hours, the entrepreneurial risks and the vision and the challenge to learn about a business. Always on the initiative, Saloni set about placing orders with local stores and developing contacts with dozens of schools. Her business soon occupied her entire family and close friends and she registered the company and set up a chocolate boutique. During the first month alone, she had 18,000 orders. By now, Saloni was distributing speciality chocolates to retail stores in three districts. At 21, Saloni repositioned her company as a major distributor of speciality candies and began planning a chain of upscale chocolate shops. The chain would complement her candy manufacturing and distribution system, but it would also mean major changes in her organisational strategies. She paused to think about her plans, realising that to launch a regional or national chain would mean a corporate endeavour. She and her family could not handle all the responsibilities. This was not a pleasant thought, although the idea of pursuing a major business was exciting. Reflecting on her business, Saloni realised that she had fun and made a great deal of money, but many people considered her success no more than the luck of a personable young lady who made good candies and had accidentally stumbled into a good market. On the other hand, Saloni knew that she had worked extremely hard to win over the clients. Most of her customers were not comfortable buying from a young high school student, and she was seldom taken seriously by customers until they had dealt with her over a period of time. Winning over her customers had always been a challenge to Saloni, not a road block, and creating unusual candies had been a joy, not a job. About her plans : she was not anxious to become a corporate manager. And although she had always worked well with others, Saloni liked the feeling of independence. Running a company would mean sacrificing her autonomy. Yet the idea of a chain of stores selling her specialty candies had been a dream for years. At the same time, expansion would mean financial risks and Saloni had always avoided debt; she dealt in cash and had always carefully calculated her expenses to avoid even the slightest loss. She realised that she was at a major crossroads in her young career, and the choice seemed to be whether to follow her dream and expand or to be content with her existing business.

Case No. 2
SOLAR ENERGY
Objectives After going through this case, you will be able to : • • • • evaluate new technology product benefits assess marketing policy projections determine if report reorientation essential write your ''own'' report

Mr. Rajan took his MBA Degree from a reputed University in the U.K., specialising in marketing. He was then appointed as a Marketing Director of a newly established company in the Nagpur region, manufacturing fans, pressure cookers, air-conditioners, etc. These products are operated with the help of solar energy - a substitute for electricity. The company adopted this new technology for the benefit of consumers. The production commenced recently. The Board of Directors entrusted all the responsibilities - formulation and implementation of marketing policies and programmes - to Mr. Rajan. He prepared a preliminary report in respect of the long-term marketing policies of the company which mainly emphasised the following aspects: a) b) c) d) Efficient after-sales service should be initiated. Intensive market research programme should be instituted. Efficient methods of sales promotion and advertising should be adopted. Intensive training programme for the sales force should be organised.

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e) f)

Consumer-oriented pricing policies should be adopted. Efficient sales organisation on the basis of product lines should be set up.

Case No. 3
ATUL CHOCOLATES
Objectives After going through this case, you will be able to : • • • • • recognise a company' s record performance. analyse exports-agreement gains. evaluate re-entry in Indian market. identify quality, pricing and brand-name problems. list out alternative strategies.

Atul Chocolates Ltd was registered in 1982. After achieving a 60% share in the domestic market by 1987, it entered into an an agreement with Market Dairy Products Inc. a United States multinational, in 1987. The agreement was to last for ten Years. The essential term of the agreement was : total exports of Atul's entire production to the United States. In 1997, the agreement expired. During the last 10 years, the company had established a brand name and reputation in the Indian market. Despite fierce competition, the company could manage to increase its market share by 2% annually. In these 10 years, the company developed a sophisticated export grade chocolates technology in consultation with Market Dairy Products, Inc. Now that the agreement is over, Atul is free to use the same technology for the products to be sold in the Indian market.

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The Atul management is wondering how the export quality products, obviously having better quality than the prevailing Indian chocolates, will be received by the existing customers. Secondly, the export quality chocolates were sold in the foreign market under the brand name of Market Dairy Products, Inc. The Atul Management is in two minds about :
a)

Using sophisticated technology (which is now free of cost) and producing higher quality chocolates for the domestic market. Exporting the chocolates to other countries, by using the cost-free technology. Making a proper mix of both the strategies.

b) c)

Case No. 4
INDIAN ALUMINIUM COMPANY
Objectives
After going through this case, you will be able to : • • • • recognise a company's monopolistic market status. find diversification in production. identify management weaknesses. explain product failure causes.

The Indian Aluminium Company with an annual turnover of Rs.800 crores was established in 1951, at Calcutta. The company had set up Foil Division in 1980 at Lonawala, near Bombay. The Foil Division commenced manufacture of Superwrap in 1982-83. The demand for aluminium foil by pharmaceutical, cigarette and other industries was what the company initially had in mind when the Foil Division was set up. The decision to manufacture household foil for wrapping foodstuffs was basically an offshoot of its British partner. Since the British company was already making the product, it was decided to do the same in India. The product was packaged in white paper and no advertising was done from 1982 to 1992 during which time, it sold just 2500 rolls per month. The company had always been catering to the needs of institutional bulk buying. The distributor for the aluminium foils was given the rolls Superwrap which he would hand over to retailers or sub-distributors to sell as part and parcel of a whole consignment, in addition to what the distributor's sales personnel could sell. The Indian Aluminium Company was the first to launch the product in India and the target audience was the housewives with an income group of Rs.3000 and above. The product was launched in Bombay and its availability extended beyond Bombay during the last two-three years only.

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In 1986, the Foils Division requested for money to be allocated for market research but was turned down by the management, as it did not think it worthwhile. It was only in the 90's after two to three proposals were turned down, that the division got the go-ahead. In 1990, another company started manufacturing household foils. It was at this time that the Indian Aluminium Company started facing problems as the new company did systematic market research and advertising. The management of the Indian Aluminium Company now wonders where they went wrong and had to push the product in the market in the view of the growing competition.

An instructor's guidance while exercising was felt to be important. They preferred company. identify the causes of declining sales.Case No. 'Fit-Kit' is the brand name of a popular whole-body exerciser equipment. This has adversely affected the 'Fit-Kit' sales. A recent survey conducted by 'Fit-Kit' showed: a) Individuals often experienced low/no motivation to exercise alone. 5 FIT-KIT Objectives After going through this case. It is meant to be used by individuals at home. Over the last two years. Growth in its sales had been steady and adequate for the manufacturer. recognise the emergence of health-clubs. Its utility is proven and its clientele belongs to the 'highermiddle to high-income' segment. A range of services/facilities like diet-consultancy and weight-loss guidance were considered as additional advantages of a health-club membership. you will be able to : • • • justify an equipment's unique advantages. a large number of health-conscious people are registering with the rapidly mushrooming health clubs. The equipment was sold through all the major sports shops in urban localities. b) c) . however.

Case No. B) C) Mr. The survey revealed a number of realities. known as Samadhan Sakhali Udyog. he was happy about the upcoming trend. a firm engaged in production and marketing ready to eat food products under brand-name 'Samadhan'. was thinking seriously about the new trend. Ashok is also the Managing Director of a retail chain shop. identify measures to combat problem areas. And on the other. Ashok has been keenly studying a survey report on Environmental Issues. he had realised that his firm now needs a change in its marketing focus on consumer satisfaction. 65% are ready to pay extra. air and other environmental factors. Mr. On one hand. for quite sometime now. a member of Nature Club. 6 SAMADHAN SAKHALI UDYOG Objectives After going through this case. you will be able to : • • • relate consumer concerns to environmental issues. Mr. underline a retail chain's lead through green marketing. . Consumers have become concerned and sensitive about quality of land. Buyer's Behaviour : Opinions and Attitudes. 40% and more avoided the product which was packed in materials. for a product packaged with recyclable or biodegradable materials. not protected from pollutants and toxins. in general. water. Ashok. Some of the prominent ones are: A) Out of 1000 adults.

Use and Disposal of the product. it was operating through 4800 own retail stores in the widespread markets covering Mumbai.Cases in Marketing Management In his capacity as MD. he constituted an Advisory Committee seeking suggestions regarding APs focus on Green Marketing. . Mr. Presently. Madhya Pradesh and Tamil Nadu. Uttar Pradesh. Presidents of environmental safety Councils.Manufacturing. Pune and other towns in Maharashtra. Ashok as Chairman of this Committee. Samadhan Sakhali Udyog was established in 1986. Advisory Committee will comprise of : a) b) c) d) Heads of all functional departments. as members. Gujarat. He expected changes in three areas . Marketing consultant from each state. Karnataka.

is inclined to sell only one product. He believes in Free Sampling as an excellent tool of product promotion and gives 5 ml samples generously. price increase. consumer durables. underline single product marketing strategy. Lubri-Smooth commands a tight grip with 80% market share. However. with a view to keep distribution and promotion expenses. It has remarkable household penetration. you will be able to : • • • recognise LSL's lubricants market-leadership. manageable. Lubri-Smooth has increased the price only twice. during the last twenty five years. tiny mixers and even nuts and bolts. and has a solid standing in household sector during the last 25 years. A-20 is used for bicycles. with a gap often years. separate labels for different users. changing the product . "Don't look for A-19 or A-21. in factories.Case No. relate market-leadership to strategy. 7 LUBRI-SMOOTH LIMITED (LSL) Objectives After going through this case.machines. scissors. garages and even in offices. sewing. Atul Jumale. Atul has been receiving a number of suggestions for changes in packaging. despite competition from other five brands. brand extension. it won't be available-because there is only A-20" is the advertising message from Lubri-Smooth Ltd. Managing Director. Mr. The company's target group is household/ domestic users. However. Ironically. It is used at farms.

however. He. .Cases in Marketing Management width etc. has strong convictions that Single Product Marketing is the formula for 'success'.

Objectives After going through this case. the company will face losses in the coming years. carry an image about the company as a producer of agricultural pumps. 16.8. Fifty years ago when the organisation commenced its operations (1948) for manufacturing pumps.24 crores. it was considered a pioneering venture.00 crores the company had a gross profit of Rs. it alone produced pumps worth Rs.00 crores. Today. a loser to-day. on a turnover of Rs. however. too. while in 1998 the gross profit increased to only Rs. out of total pumps-market of Rs. It consolidated the business till 1968. is very small. the company's share is only Rs. In 1968.60. Users. All this is reflected in reduced profitability and cash balances for the company. too. simple in construction and design and made out of cast iron which three hundred other units in the country can produce. If this trend continues.Case No. Fluid Control Devices Ltd. 8 crores .including R & D. 1. the situation is not at all encouraging. moreover.5 crores. is celebrating its Golden Jubilee Year in 1998. On the export front.00 crores. in 1998.00 lacs on a turnover of Rs. analyse strategies and management failures. The company has . out of the total pumps-market of Rs. This shows that the demand level has grown much faster and that the company has missed the bus. The company has paid little or no attention to the export sector. use failures as challenges for turnaround. 16. 8 FLUID CONTROL DEVICES LTD.00 crores. identify strengths . you will be able to : • • • • realise the meaning of a leader yesterday. The company's R & D department has developed alloy steel pumps for industrial applications but the company's share of industrial pumps market. 120. In 1968.

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the Company has generated considerable goodwill in the market. Moreover. trained manpower. Based on the above credentials. the company has at its command the excellent resources which include. with 50 years standing. a complete turnaround may be possible if appropriate strategies are worked out and implemented at all the levels. perhaps. .Cases in Marketing Management already started facing the problem of working capital and payment to its creditors is getting delayed. the best manufacturing and testing base possible. Still. a wide distribution network and most important.

because the majority of the units in India are in the small sector. you will be able to : • • • • explain the leather industry's low profile abroad. analyse low performance causes. His company had participated in an exhibition there. Chinmaya is the Managing Director of Seema Leather Goods Ltd. recognise differing marketing strategies. His observations of and experiences in the exhibition have.Case No. could command good sales. however. 9 SEEMA LEATHER Objectives After going through this case. nonetheless made him restless. the leather industry in India is facing the problem of modernisation . These stalls. underline export promotion measures. however. He had returned from Germany only two days ago. The scale of operations of companies in Western countries is very large. As against this. He also observed a low preference for Indian leather goods by Western customers. sold by Italy are imported from India and re-exported with their brand name. . Conventional Kolhapuri chappals sold at German stalls seemed to sustain higher prices than at Indian stalls Some of the countries had not used interior leather. Mr. The goods. Some of the observations were: Italian leather goods enjoy a good reputation in the Western market.

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This gives the company unrestricted use of Daewoo's brand name which is popular in China and the South East Asian countries. The company is in the process of becoming a global player. The acquisition is the first of its kind for the company. This acquisition will also help the company take on the challenge posed in the Indian market by Volvo in trade and passenger bus segments. The company can import the higher range vehicles to India from the Korean facility. to be sold under the brand name of Rovers at the Rovers distribution outlets in Europe. 10 TATA MOTORS Objectives After going through this case. as well. recognise "acquisition" and "exports" as strategic thrust areas. Tata Motors is going places. At the same time. The Company has signed an agreement with Rovers U. They have a presence in Europe and have been selling Tata Safari and other brands in these markets.000 cars to them in the next five years. the company has just acquired a unit of Daewoo Motors in Korea for manufacturing the trucks. The initiative followed by the company in this strategy is unique as far as the Indian industry goes.leadership strategies. to sell 1.K. Tatas are. that they are follwing. The Indian market is on the threshold of growth due to the road projects that are being implemented in the .. Selling cars in Europe is a tough job as it is a well-developed market. will definitely work.00. confident that this strategy. for quite sometime now. you will be able to : • • • identify multipronged global. the company is going to sell Indica cars in the European markets at its own distribution outlets in Europe and under its own brand name. and have a dealers network and service back-up in some countries in this region. On the other hand. justify low manufacturing costs and domestic market demand. however.

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Low cost manufacturing base to be leveraged to offer models at prices that are expected to be at least 25% lower than those offered by global majors. wherever required. Following facts give an idea as to what the company is up to : New-age Tata trucks in a range to roll out of emerging markets like South Africa. something that American and European manufacturers do not focus on. Global sales to contribute 10% of total commercial vehicles business by 2010. A six member team with Italian experts is simultaneously working on a new design for the cabins. Acquisition of local companies. Tata Motors has developed strategies to be a global player. . and has been negotiating a big tender for a supply of trucks to South Africa. Offerings will be in the range of 9 to 49 tonnes payloads. Focus on fuel efficiency. The company also is seriously planning to enter the Chinese markets soon.Cases in Marketing Management country and also due to the fact that old vehicles are being phased out due to environmental problems. Thus. in the near future. China. Brazil and Indonesia.

Saffola Oil is also respositioned . 821 crores hair-care market. Its flagship brand is Parachute coconut hair oil. . Marico took over the anti-lice shampoo. its brands like SAFOLA and SWEEKAR have established new standards. 10 crores to P & G. Further extensions are SaffolaSalt and Saffola Atta. Recently. In the cooking oil market.Parachute and Saffola. you will be able to : • • • • recognise Marico's edible oils market leadership classify brand extensions with a health-care accent find a growing thirst for volume extensions explain a Rupee 821 crores hair-care market entry. looks like this : stars-parachute. 11 MARICO INDUSTRY Objectives After going through this case. now extended or say relaunched as a kardi-cum-Sunflower variant.SIL Jam and Medikar. Marico's 65% turnover comes from only two brands . known for health.from cardiac problems affected members . Marico's marketing strategy is : a) Acquire more FMCG brands such as Medikar to spur volumes and topline growth.Case No. Marico's "BCG matrix". Marico Industry is a leading player in a Rs. Marico has 60 thousand retail outlets in the rural market. it could work. by paying Rs. cashcows-soffola and sweekar question mark . Both these brand extensions are a premium segment of Salt and Atta. It thinks that the problems of lice infestation are rampant in rural India and if cheaper versions of Medikar are launched. Saffola. medikar. offering taste and health benefits rolled into one.to the entire family. having market share of 54%.

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Clearasil. d) . Distribute third party brands like Smoodles.Cases in Marketing Management b) c) Leverage its distribution strength in rural markets to drive sales volumes. Build on the equity of strong brands like Saffola and Parachute by launching more extensions. to build volumes. Old Spice.

company" recognise hostile criticism from the community. ltd. Due sanction was obtained from the concerned authorities. they took an extraordinary decision of dissolving the Trust of the Kendra. More funds enabled the purchase of more medical/diagnostic equipment as also a larger capacity of housing/handling/treating of patients. But somehow the common people around feel that this new outfit is there to loot the people. you will be able to : • • • find a "trust" becoming a "pvt. fitness and routine medical check-up. if they could bring professionalism as well as modern/diagnostic equipment. 12 SUSHRUT SEVA KENDRA Objectives After going through this case. Sushrut Seva Kendra hard been a reputed charitable organisation in the medical field. whereas the former Kendra was not viewed so. a new venture was started under the new name and form: Sushrut Hospitals (P) Ltd. The earlier set of doctors was retained by the new hospital. In line of this thinking. list out the management's justifications and claims. The goodwill of the organisers and the doctors constituted a strong asset. homoepathy and ayurveda were attached to this Kendra. . There is a rising public demand for services in the area of hygiene. The management doesn't know whether to offer this as a combined package or individually. Many well-known doctors practising allopathy. Over a period of time. the Trustees felt they would serve a much larger section of the society.Case No. which was located in the same place as that of former Kendra. The management of the hospital has made the following observations : a) b) A more positive image of the hospital needs to be built up quickly. serving thousands of patients for over 50 years. Soon after this.

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Cases in Marketing Management c) d) A couple of medical/pharmacy colleges have shown interest in linkage with the College. There is no other hospital of this capacity and standard in the whole district. . The management has appointed you as the marketing manager.

Mr. The state-of-the-art six-seater Eagles possess outstanding landing capabilities and low fuel consumption costs. M. starting with a flyaway. aviation major.A. The U. following the completion of raw materials series helicopters. assess the product's performance and characteristics.Case No. The company projected an annual domestic demand of 60 and the Puna plant would have 120 units as the annual production capacity. Blue Bird Incorporated. set up with a project proposal of Rs.C. recognise the export obligations. sub-assemblies. D'souza. who was on his way to attend the pre-launch strategic meeting for the finalisation of marketing plans for the first batch of "flyaway" category of helicopters. envisaged the manufacturing programme in a phased manner. Marketing Director I. major assemblies. 13 INDIAN AVIATION COMPANY Objectives After going through this case. identify the phased programme under license-agreement. disclosed that the license-agreement constituted a part of the Government's initiative in inviting NRIs with investments in India alongwith their expertise.S. you will be able to : • • • • find the first Indo-American private sector joint-venture in Indian aviation history. details and parts and culminating in the raw materials series by 2010. Indian Aviation Company (IAC) has won the unique distinction of being the first private sector aviation company to have been granted Government clearance for the manufacture of light-duty helicopters in India under the license-agreement with the U. designed lightweight series with brand name "Eagles" would be assembled at the company's base in Puna under the supervision of U.S.S. aeronautical engineers. 1000 crores for the joint venture. . The Government obligation under the clearance demands that the company embarks upon the exports markets. His company.

but sales are spread all over the country. During the initial years. district based. manufacturing the entire range of switchgear products. The switchgears market is dominated by two major companies having market share of 40% and 37% respectively. the company is trying to establish its presence in the Western region. for servicing its dealers in the Western region. 14 SWITCHEX COMPANY Objectives After going through this case.Case No. It has appointed dealers in its markets. Its manufacturing unit is near Delhi. It has a foreign collaborator. judge the situation for remedial measures. usually. . Since the last two years. underline quota pressure as a weapon to increase sales. identify dealer problems affecting sales. The competition among the first three organisations is quite fierce. recall efforts to establish presence in the western region. SWITCHEX has opened up a Regional Office at Bombay and Branch Offices at Pune. you will be able to : • • • • • analyse Switchex's share in the all-India market. sometimes. SWITCHEX is an eight-year-old organisation. Vadodra and Indore. it deals directly with the customers and offers them discounts. SWITCHEX concentrated on the Northern region and established itself as a reputed manufacturer of switchgears. SWITCHEX has established 14% market share and the remaining 9% divided among three other manufacturers. The pricing strategy of the company has always been to be lower than two major competitors by about 8-10%. It's discounting policy is also flexible and.

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a competent electronics engineer with a postgraduate in management. These partners have been assuring Mr. M/s. Patil since the last two years. will serve S WITCHEX satisfactorily. . causing financial problems. another dealer from the same area has approached Mr. His dealer at Kolhapur is the major cause of his concern. Mr. Patil is faced with tough decisions. It is reported that the remaining two partners are also concentrating on their other business activities and consequently have less time for developing business of S WITCHEX. In turn. except for the last six months when one of the partners decided to leave the partnership and had to be paid his share in cash. till now. Patil that they will soon have another competent partner and thus will come out of their problems soon. Patil is pressurised to 'accept' higher quotas. Mr. and has good contacts with the switchgear buyers from Kolhapur Region. is the motto of his sales manager. Moreover. But he has no time as the Regional Sales Manager is pressuring him to increase quotas of his dealers fast or get them replaced. Patil knows that given the time. He is dealing with the electric panels. "We want quick sales". Mr. This dealer has been with Mr. But no progress is reported in the matter. he has no option but to increase the quotas of his dealers. Since the company wants to establish itself in the Western region. a partnership firm. Kadam Brothers will recover from the crisis situation and because of their experience and reputation as well as contacts. Patil believes that this is one of the reasons for the untimely payments to SWITCHEX for the sales. Mr. In the meantime.Cases in Marketing Management Its Pune Office is headed by Mr. Patil. themselves have suffered. the sales. The dealer is M/s Kadam Brothers. Patil for the dealership. These days. till now.

As part of expansion. . Mr. find out how the father's death instigated the sons into a "new ventures" mode. On the death of Lala Shriram his sons. (JEWL) Objectives After going through this case. Bharat Ram. these measures should have improved the sales of the company and made their market standing better. The products under the able leadership of Lala Shriram became very popular and soon acquired the status of a market leader. automobiles. etc. was founded by Lala Shriram in the forties to manufacture the well known Usha Ceilling Fans and Sewing Machines at a factory in Calcutta. gensets. however. Ideally speaking. 15 JAY ENGINEERING WORKS LTD. started falling..Case No. The sales. they set up ceiling fan factories at Hyderabad and Agra. you will be able to: • • • underline JEWL's market leadership. Charat Ram and Mr. took over the company. Jay Engineering Works Ltd. They soon went into an expansion and diversification spree. recognise how sudden changes in strategy spell failures. And the reputation of the company took a big nose dive. they went into various other fields like textiles. As part of their diversification.

Case No. Divya Bhaskar : Pre Launch Activities and Strategies Divya Bhaskar was launched with a clear objective of involving the people of Ahmedabad to make their own newspaper. This task was to be carried out by dividing the city into four divisions to target 8 lac households by 1500 surveyors.32 lakhs out of which the Gujarati reading population comprised of 25. It was planned to reach out 12 lakh households in Ahmedabad and surrounding districts in a time frame of 45 days. 16 THE MAKING OF DIVYA BHASKAR Objectives After going through this case. It was important to know the expectations of the people from a newspaper. Gujarat offered huge market potential with a total adult reading population of 31.7 lakhs. you will be able to : • • • • • assess leadership potential formulate the pattern of the readership survey identify "news" and "advertising" content percentage select state-of-the art technology and machines measure effectiveness of strategies The month of June was equally hot for the print media in Ahmedabad with scorching heat proving menacing for the launch of Divya Bhaskar-the third Gujarati daily newspaper to be launched in Gujarat. The strategy was to create awareness for Divya Bhaskar and establish a brand image to give a newspaper to the people of their own choice. There was a scope for substantial readership growth and new opportunities as the current net readership of 15.66 lakhs was monopolized by two existing players: Gujarat Samachar and Sandesh. .

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Well begun is half done but a long way to go.415 copies 1. With all marketing insights in line. To their credentials.).000 + copies 2. crossed a record mark of 2 lakh. Post Survey Phase The second round of the door-to-door contact programme was initiated in order to meet the 12 lac households once again. Further. The most important finding.168 copies 32. The process was streamlined and transparent to surprise checks and audits on circulation. received before a month of the launch.07. Divya Bhaskar has a long road ahead to make Divya Bhaskar the People's Newspaper.979 copies . was that the readers felt the need for an unbiased and ethical newspaper.25 lac sq.00.29. as indicated by 90%. signifying the circulation numbers achieved on the launch of the paper. Findings of the survey were shared with readers and product offerings of Divya Bhaskar were explained.75. they wanted a newspaper to be colourful with a daily supplement for the entire family. It continues to grow and validate strongly the effectiveness and efficacy of identifying consumer needs and expectations.54. they had largest newspaper office in Ahmedabad (1. The strategies resulted positively. Order bookings confirmation. Divya Bhaskar installed the most advanced software and state-of-art high speed printing machines with 5 lakh copies run. Around 85% of people wanted not more than 25% advertisements on the front page alongwith due importance to business updates and career guidance material.136 copies Exhibit 2 : Order received till 18th May 2003 Ahmedabad City Surrounding Area Total Paid Copies 1.Cases in Marketing Management Key Findings of Survey The survey resulted in useful insights in making of the newspaper as they indicated their current newspaper just average in all respects. Exhibit 1: Circulation Numbers Divya Bhaskar Gujarat Samachar Sandesh 3.811 copies 2.ft. the respondents had given importance to local news.

Product: To offer food products endowed with the highest standards of quality and with a wide variety. Economic: It aims its operations to achieve a sound financial base. Its mission is: Mission Statement A and S strives to create an example of corporate culture . The company spends ten percent of its post tax earnings on social welfare programmes. regional. A and S Ltd. enhancing value for stockholders and the creation of financial rewards and career opportunities for its employees. engaged in the manufacture of processed food products and established at the grassroots level. analyse the vision statement for progress and prosperity. grace and honour for human values within the organisation and outside as well. using inputs from its own farms. Economic and Social Prosperity alongwith dignity. creation of more options for development. recognise quality production and social upliftment. It seeks to find out innovative ways and means to touch Product.linked prosperty. to initiate innovative ways to enhance the quality of life of the society at large. at all levels. enjoys an impressive market share in major Indian metros. . you will be able to: • • • underline the company's social welfare schemes. local.Case No. Company. Objectives After going through this case. 17 A AND S LTD. Social: With the utmost integrity and social responsibility. in 1995. national and global.

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every day. all that he has been doing. however. The factory layout in Indian Microscopes Ltd. Strict supervision has always been maintained and productivity is high.e. You find that each and every workman feels bored. 12 years ago. This system has been operational since the last 12 years. A single operator later on assembles these minute items in the assembly shop. you will be able to : • • • recognise the time management which dominates the division of labour. 18 INDIAN MICROSCOPES LTD. argue that bored workmen do repetitive jobs. is such that each workman only manufactures one minute item of the microscope in the production department. In fact.Case No. i. . You have joined the company as a Personnel Manager and are full of innovative ideas. one of the workmen confides that ever since he joined the company. is the threading operation on one of the nuts used to assemble the microscope. The motivation level. needs improvement. identify the ways for enhancing motivation levels. Objectives After going through this case. since the inception of the company.

preservation and keeping the premises clean. the workers take things easy. there is no dearth of food for him and his factory job provides him with extra income. bottling. assess a processing unit's working and transfer problems. evaluate legal or infarmal measures. extracting juice. a fruit processing unit was added by the company.workers own family properties here. The factory is itself surrounded by cultivable land and many of the factory . 19 SOAP FACTORY Objectives After going through this case. Since he does not depend entirely upon the factory wages. One of them is heavy absenteeism. As the worker is also a farmer. About six years ago. The factory is situated in the beautiful rural surroundings. you will be able to : • • • • recognise the agricultural background of the soap workers. This results in severe absenteeism in the Factory. adding other ingredients in syrups/jams. inside the same factory compound. labeling. During the agricultural season. fruit juices are also filled in wooden casks and stored. The jobs in this unit are seasonal. . built ten years ago. The unit employs 22 workers.a fast developing industrial area 18 miles away from Pune.Case No. identify absenteeism during the farming season. their living pattern is that of a joint family system. besides the bottling of fruit products. Some of the jobs done in this unit are: peeling fruit. I feel that production at our factory has never come up to the management's expectations for several reasons. In most cases. During the season. it works to full capacity only during the fruit-growing season. boiling juice. That is. so that they could be bottled later in lean periods. capping. Grade E jobs. All of them are given semiskilled. at Koregaon . the workers stay at home to work on their own land.*- I am a supervisor at a modern soap factory. --.

This has only resulted in a 'go slow' response from them. a major portion of this unit is closed. part of the workforce is transferred to the soap plant and other allied sections. a small number of workers who remain in the fruitprocessing plant are given light jobs. have been doing the jobs for years. the demands of these two workmen are just and fair. rolling the barrels and the like.Cases in Marketing Management During the lean period. They have an obvious job title: Bottle Filler and Capper. keeping the premises clean. They cannot be given higher grades because workers in the soap factory doing almost similar jobs are in E grade. Their job also calls for greater skills than the rest of the workers. The other workers cannot be asked to do these jobs because the quality of work would be badly affected. such as. I first cajoled those workers and also counseled them. I threatened them with disciplinary action. but without success. Finally. have attained great skills in doing it. The only exceptions to this are two workers who are engaged in filling and capping bottles. their demands cannot be granted. Bottle Filler and Capper. However. . will then claim higher grades. I am faced with a dilemma. too. I am convinced that so far as my unit is concerned.see others having an easy time. As a result. expecting that others should also do the filling and capping jobs. They. in the context of the whole organisation. However. since their workload is definitely more than the others. Both these. When these two workers-Bottle Filler and Capper. Others cannot match those skills and pace. they became disgruntled and demanded higher wages. to make good of labour shortages there.

high tension sub-stations. SAMPAT PATIL Objectives After going through this case. you will be able to: • • • • recognise the industrialist's skills background. etc. 20 MR. underline the human approach in dealings. Patil had a short stint as a consultant engaged in repairs of electrical transformers and allied job work. rose to the status of an industrialist engaged in the manufacture of electric transformers.Case No. Patil always noticed a lit streetlight. Mr. at taluka headquarters at the age of 14. Mr. During his term with the Maharashtra State Electricity Board as ajunior engineer. before setting up a company under the banner of 'Patil Electrical Industries' for the manufacture of 33 kV to 5000 kV transformers. justify team spirit as the fountainhead of a success story. Sampat Patil. now in the electrical industry. operating rod. And. Mr. transformers and sub-stations. he deploys the experience of darkness felt during his childhood as a parallel for the economic weaknesses of his colleagues to bring in team spirit his company. . Realising the financial constraints. Mr. recall his early childhood experiences. Patil had gained adequate experience in the field of repairing various kinds of electrical instruments. his company also undertakes jobs related to power distribution transformers. who came to Bombay in search of a job with a diploma in electrical engineering. drop-out fuses. Having had his childhood in an area with no supply of electricity in Katarge in Karnataka.

he has been able to bring in a small-scale enterprise that functions as a small family striving not merely for their own growth but also of their clients. .Cases in Marketing Management By concentrating more on the reasons responsible for absenteeism of any of the members of his staff than on the managerial action against those who were absent.

'HEH' is studying this situation carefully. assess link-factors in entry into unfamiliar routes. in fact. however. Their service is wellknown and the flights absolutely punctual. seen to concentrate on Metro-to-Metro routes. Their planes are small in capacity (16. 70 seats). evaluate HEH's aircraft passenger capacity and limitations. But 'HEH' is unsure of stepping into a not so familiar nonmetro segment. Major inland aviation players are. 'Hawa-E-Hind' is the new airline operating as an intermetro air-service in India since (lielast seven years.Case No. 50. . you will be able to : • • • • identify economies of scale in intermetro air service. with their bigger planes whose passenger capacity remains underutilised. They see a ray of hope here. underline HEH's efficient flight operations and service. are pulling out of Metro-to-nonMetro routes. 21 HAWA-E-HIND Objectives After going through this case. They. 'HEH' obviously cannot compete with bigger airlines on international routes. saying that these are becoming unviable for them.

But in LMT. Besides this. you will be able to : • • • analyse LMT customer survey findings. Chandra Prakash is also aware of an ideal Bus: Employees ratio of 1:11. 22 C A D RP A S H N E R KH Objectives After going through this case. b) Fleet of buses is inadequate. Salient observations are as follows : a) The LMT is safe. underline safe and accident-free operations identify weaknesses in service.Case No. he initiated a customer survey. Chandra Prakash is a senior administrator. fewer accidents per year. c) d) Buses are often unclean. . LMT is regarded as unduly expensive over short distances. 'tam-tams' etc. it is 1:17. appointed recently to head the newly formed Marketing Department of the Local Municipal Transport (LMT) of a fast developing north Indian city. Chandra Prakash wants to revamp the LMT and believes that marketing holds the key to the LMT's success. no punctuality. especially as compared to options like 6-seater rickshaws. On assuming the office.

etc. Vatia tried to persuade the staff to be punctual. Mr. None of this. he resorted to punishment of the erring members of the staff. This led to some improvement but not to the desired levels. indeed. meeting friends. When caught. Vatia. Initially. He also felt that prolonged use of this method may. Other local and British banks were able to exercise sufficient control over their staff to ensure proper attendance and maintain office decorum. Vatia noticed that no canteen facilities were available in the branch nor was there any space. state failures of corrective measures. during the day. where it could be set up. the general explanation given by the staff member was that he had gone out for a cup of coffee. on a number of occasions. H. The problem was generally not faced by other banks in Kenya. The British and other local banks. another Indian bank having branches in Kenya. B. He sermonised them on several occasions. Kenya Main Branch of Kamini Bank was wondering as to what could be done to restore the punctuality of the staff in his branch. revealed that the unauthorised "time off' was used mainly for personal work which included shopping. Branch Manager. identify the problem are of loss of control over staff. lead to more serious trouble. you will be able to : • • • analyse the root cause of indiscipline. however.KAMINI BANK Objectives After going through this case. going for coffee. Failing in these methods. and in the payment of overtime wages for its completion. however. except the Bharat Bank. had made adequate provision for the purpose. His investigation in the habits formed. A majority of the staff members were taking time off from the work. Mr. 8 1 . personal errands. made any dent on the problem. which resulted in work remaining incomplete. He therefore thought of analysing and identifying the root cause to the problem. Mr.

All efforts by Mr. also did not favour the idea. Authorised outside work could be authenticated by the immediate Supervisor. Vatia. by an unscheduled visit to the branch late at night without any indication to any one in the branch. he should have this scheme approved by the Secretary of the Kenya Bankers Association. when individually contacted. Valia to convince him that there was nothing wrong in it and that most officers of major corporations had this system did not move him. Other bankers. . To overcome this. Vatia that the muster-roll of the branch did not have any provision of marking the period of the absence by the members of staff in the event they had to go out for coffee. still. pointed out to them that this was a scientific method of recording the attendance and it was not possible to falsify the same. but the move did not succeed as the stall complained that the coffee given was not up to the standard. The members of the staff protested and refused to use the machine. the Regional Manager advised Mr. It was not possible to know or to control the period of their absence. Mr. Mr. As it happened. however. Vatia. Vatia pointed out to the union representatives that by the introduction of "time clock. He was a man of old British tradition and was shucked a! the idea of introduction of a time-clock in the banking industry there. One day. the Regional Manager. At this stage. The meeting with the Secretary was failure. he decided to install a "time-clock" at the maingate with in & out" trays for attendance cards. from time to time. thereby. it occurred to Mr. Days passed by. The idea was brought to the notice of the branch union by the staff members. They had altered the time marked in their muster-roll for departure. Vatia that as no other bank in Kenya was adopting this procedure. Vatia to shelve the idea. The staff was advised to use these cards for marking their arrival and departure and also the absence periods. claiming overtime for a period in which they did not work. suggested to Mr. were not fully convinced. Not willing to go all alone. This was proved by the photocopy of the day's musterroll taken by Mr.('uses in Marketing Management An automatic coffee vending machine was installed." the temptation to alter time by members of the staff would be removed and that it would he of long-term benefit to the staff. The union members almost came round to accepting (he idea but. who came to know of the proposal of installing the Clock. the services of three members of the staff were terminated for dishonesty and fraud. There was resistance to the idea initially. during that period only.

50 to 5p.Case No. The company used to employ apprentices from ITI.). That time. at about 4. to 1 p.m. In December 85. he personally escorted them to their work-place. Sudhir was promoted as Foreman-in-charge. The Supreme Engineering Company in the Bhosari area near Poona was established in 1973.m. who had worked as apprentice with this company..m. The working-hours of the company were from 8 a. indulging in an indisciplinary act.m. The company allowed 10 minutes at the end of the day for washing and cleaning purposes (from 4. Ashok and Manoj told Sudhir that at one time they all were Assistant Foreman together. . Sudhir noticed that Ashok and Manoj were already in the Washing Room. to 5 p. Sudhir. On 18 December 85. determine the action against the erring foremen. He shouted at them that there are still 35 minutes of working time left and that they should go back to their work-spots and commence work. By January 83. was a qualified hand from ITI and was employed by them in January' 75 and confirmed in April' 75 as an Assistant Foreman. Sudhir also used to join them in avoiding work by going to the canteen and washing rooms. Ashok and Manoj who were also from ITI from the same batch of Sudhir. were employed by this company from June 75. While on way to the workshop.15 p. It's main production was spareparts and small parts required for automobile and two wheeler companies.m. and then from 2 p. Furthermore. all the three were promoted as foremen. you will be able to : • • • • find ITI apprentices promoted to foreman' s grade differentiate one of them as formen-in-charge identify two.m. 24 SUPREME ENGINEERING COMPANY Objectives After going through this case.

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find it difficult to control others. He would. From that day.Cases in Marketing Management Sudhir told them that as a Foreman-in-Charge. Sudhir reported the situation to his Departmental Head who asked him to go and meet the Personnel Manager for his advice. Ashok and Manoj did not co-operate with Sudhir and did the minimum amount of work and created imaginary problems for Sudhir. . he had to maintain discipline in the Workshop and he could not allow his own friends to take liberty with him. otherwise.

bats bearing his picture don't sell at all. As per the present catalogue. Some of the models use pictures of international cricket stars.Case No. The exports accounted for 30% of the company's sales of Rs. have realised this. Since the expiry of the collaboration agreement. including the U. Shree Siddhi Vinayak Arts & Commerce Manila Mahavidyalaya 'Challenger Sports of Srrenagar (J&K). if a particular cricket star fails in his performance during the season. As it is. however. facing certain peculiar problems. West Indies. The company is. The pictures are known to popularise each particular model. K. evaluate product differentiation. Challenger is a leader in the sports-goods. Aroyalty is paid to these stars for this. 750 per piece. So much so that. at their cost. leading to a large inventory. They command 60% of the market-share. M/s. recognise the relation of cricket stars to exports and sales. the company has launched new models at regular intervals. This has also adversely affected the sales. you will be able to : • • • find the company' s market leadership and foreign collaboration. some of these stars belong to countries which do not have good relations with India at present. However. 10 crores last year. specially in cricket bats.. M/s. 25 CHALLENGER SPORTS Objectives After going through this case. 50 to Rs. but also export their products to over 20 countries. Hammonds of Great Britain. These relate to the product differentiation. the company has 55 models of cricket bats in different sizes. Sri Lanka and Australia. 89 . Their production started 25 years ago in technical collaboration with M/s. Indeed. Besides. they not only continue to be the leaders in Indian market. Prices range from Rs. designs and quality. the success or failure of a sports-star need not have a direct effect on the sales of a company. through their own experience in the field and thanks to the best quality of wood available in plenty in the Kashmir valley.

. for making relatively simple calculations and graphic display. While first generation computers lasted five years before new models came along. identify the ensuing price war and losses. 26 SECOND GENERATION SYSTEM Objectives After going through this case. This would put enormous pressure on them because of the strong brand name appeal of both these companies. subsequent models were expected to have a life of two years or less due to the fast changing technology. These computers were having 4 to 16 times higher storage capacity than the first generation computers. markets in early 1983. A price war ensued and all companies selling first and second generation computers simultaneously engaged in price cutting. The home computer market was changing rapidly. the threat of Alfa Computers and Info Tech Corporation introducing second generation computers was looming large over all the competitors. The second generation computers were first introduced in the U. lost the market share heavily. all competitors lost profit margins. These could not be used as word-processors due to limited memory. The prices of these computers were slashed to US $ 200 per equipment to beat competitors from the first generation computers which were sold around US $ 100 per equipment and which were useful only for playing video games. In 1984.S.Case No. underline the changing nature of advancing technology. Those who did not. These could also operate more sophisticated programmes and could be used as word-processors as well. As a result. you will be able to : • • • recognise the emergence of second generation computers.

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S. These helicopters could land anywhere without requiring helipad. the Marketing Director of Bharat Aviation Company (BAG) was on his way to attend a pre-launch strategic meeting which had a special importance as it was to open the marketing plans of his company for a new helicopter. 27 BHARAT AVIATION COMPANY Objectives After going through this case.S. Mr. 2000 per hour of flying. 2 crore in 1992. you will be able to : • • • • find the first Indo-American private sector joint-venture in Indian aviation history. recognise the export obligations. licence besides Indian Aircrafts Ltd. the helicopter was to be designed originally by the U. identify the phased programme under license-agreement. . The company decided to manufacture two models . As per the terms of joint venture. The company projected an annual demand of 60 and the plant had a production capacity of 120 per annum. assess product's performance and characteristics. (IAL). partner and assembled in India under the supervision of U. the first from a private sector company in this category in India. The company was set up with a project proposal of Rs.one with a carrying capacity of two passengers and the other with five. experts. a public limited co. Wagle. BAG was the first in the private sector to have got. 75% of the output was to be exported out of the country. The project was in response to Indian Government's initiative in inviting non-resident Indians (NRIs) to bring home their expertise.Case No. As per the exports regulations of India. the fuel efficiency was amazingly low. Further. working out to Rs.

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The sale of their major potato chips brand has been badly affected due to the mushrooming growth of smaller units. Marketing Manager of Crunchy and Crispy Ltd.Case No. you will be able to : • • • find that small units can compete with organised business. these smaller units can afford to keep the prices low and competitive. he has been toying with the idea of introducing a new product. identify the areas of new product planning "Crunchy and Crispy Ltd. 'Honey Coated Peanuts' in the market. Mr. is a worried man.. 28 CRUNCHY AND CRISPY LIMITED Objectives After going through this case. recognise that the small units' low overheads lead to low prices. ." who are in the processed food business for a fairly long time have now been facing severe competition from the unorganised sector. With the lower overheads.. D K Roy. For the last six months.

In the light of these developments. he appoints a consultant to devise future strategies in regard to 1) Segmentation 2) Rural markets and 3) Long term strategic planning . could neutralise the advantage painstaingly built up by Indian companies like his own. formulate reorganisation with new strategies. new foreign brands have started flooding the Indian markets. following the enunciation of liberalisation and new economic reforms. He. DINESH KULHAN Objectives After going through this case.Case No. however. you will be able to : • • • find that liberalisation encourages foreign investments. in turn. Kulhan is deeply concerned about the ambitious marketing exercise of some of the foreign companies which. he is increasingly getting restive over the kaleidoscopic changes in the fundamentals of the soft-drink business. With the opening up of the domestic markets for foreign investments under the liberalisation programme. Mr. After a comfortable living for almost two decades. still continues to be numero uno in the soft-drink business. In particular. underline the fact that desi businessmen feel threatened about their survival. To cite an example: one estimate predicts India to be a more than 3 billion (in volume terms) market. Dinesh Kulhan has had been a worried man of late. 29 MR.

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15000 and Rs..60000. already in the market and which was launched just one month before.You can have ten snaps and then just hand it over to a Developing Shop.Case No. TAMTOOM-2. The production department of Pratima Ltd. a leading company. You can take a picture with camera submerged upto 12 feet underwater. Pratima Ltd. There is another product. 'WPDC-3'. . You can take five snaps with it but it has an auto-development facility.300. The price range of its cameras is between Rs.. which is a Waterproof Disposal Camera (WDC) with a price tag of Rs. you will be able to : • • • recall Pratima' s market-leadership in films and cameras recognise it's plans for ''WDC-3'' with unique features identify existence of a similar product already being sold in the market. Pratima markets seven models. This disposable camera price is Rs.700. It is extremely simple and convenient to operate. is now ready to manufacture a new product. 30 PRATIMA LIMITED Objectives After going through this case. was controlling nearly 75% of the market of films and cameras in India.

likes to tease you about how much the marketing people spend on research in buyer behaviour. "The company should decide what to make and stick to it". . an accountant. You are working in the Marketing Department of 'Ice-Kool'. a large ice-cream manufacturing company. before your research budget for the coming year receives acceptance for allocations. He says that he and his colleagues think that members of their families are so fickle in choosing ice-cream that it hardly seems worthwhile establishing what they might think. you will be able to : • • • find the questioning of the CB research expenditure by the finance department recognise the need for educating finance personnel underline the presentation on CB -related marketing mechanism. He has invited you to make a presentation to the Finance Department about why it is necessary to study consumer behaviour.Objectives After going through this case. they assert. One of your colleagues.

was relatively new to the Indian market as a Telecom Service Provider (TSP). one of the well-known companies. 32 REACH INDIA LTD. benefits provided by the telecom service providers and handset features. Different handsets were available for different technologies and so the consumers had a choice for handsets too! The consumers are in a dilemma about service attributes. recognise a wide consumer choice for technology and handsets. you will be able to : • • • find RIL' s entry in the competitive TSP market. it was important for the company not only to grow but to grow sustainably. Objectives After going through this case.Case No. . The consumer had a wide choice between GSM and CDMA technologies for service provision. Reach India Limited (RIL). identify the consumer expectations from TSP's. With a boom in the telecom market and tough competition.

components and sourcing costs. the idea is to create an Indian version of the Global Alliance that the three already have.100 crores a year.6. sell each other's cars in various markets.Case No. GM. In India. three players out of 12 would play the game as one.India is a small player in India right now. What helps is that GM.473 cars. The alliance could bring . the alliance will form on the companies sharing each other's products. and make it an alliance with the widest range of passenger cars. It has a plant to produce 25. G. They can now develop new products. the dealership and service network will jump to 360. you will be able to : • • • analyse the entry of global players in Indian markets underline joint ventures. working on engines and transmissions together.M. 33 GENERAL MOTORS ASIA-PACIFIC Objectives After going through this case. plans to use its 21 -year-old global alliance with Suzuki and a more recent one with Fiat to move into gear. for all practical purposes. In the new scenario. source components together and even enter into joint ventures. owns a 20% stake in both the companies. Frederick Henderson came for a visit to India and announced that his dream was to turn the world's biggest car manufacturer into the biggest car marketer in India. buying components together in order to cut both. but at the last fiscal sold only 8. and entering into cross branding agreements.000 cars. It seems stuck in the slow lane in India. Apparently. The Indian automobile industry is in for a big change. In what will be a first in the Indian automotive industry. alliances growth. the engines of progress recognise the globalisation of the Indian automotive industry Seven months after taking over as President of General Motors Asia-Pacific. Combined in India. their purchasing will soar over Rs.

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Thus.Cases in Marketing Management to India the world's largest car maker's vast portfolio of brands. and Fiat auto plan to invest $100 million at Fiat's Ranjangaon facility in order to produce new models and powertrains. In India. Country President and M. But the pattern can be seen quite clearly." .Globally.Ravi Khanna. the auto industry is now more agile as a result of consolidation. The Asia-Pacific region is after all. Fiat can help Maruti with its quest for diesel engines for cars. And the volumes of Maruti will give the alliance the leeway with vendors to source components at lower costs and expand markets through Maruti's wide network. Delphi Automotive Systems (INDIA). the details of which are being worked out. circumstances may be peculiar or unique. could also become a global source of powertrains for small and mid-sized cars.M. According to Mr. The joint venture with equal ownership.. there is little reason to doubt the partnership rolling in India. G.D. the fastest growing car market.

toiletries.Case No. urban and rural customers. 'Natural Remedies' has gone in various segments viz. His company. 34 "THINK GLOBAL & ACT LOCAL" ADVERTISING CAMPAIGN Objectives After going through this case. But in the wake of five years of sluggish growth and faced with the prospects of intense competition. . Vyas thought that to increase sales. consume it. spilling the paste on the user. Mr. He thought. Burden of this disastrous launch began to show on other product lines. Vilas was toying with the idea of going global against the advice of his consultant friend. the packaging and the tube gave problems. he would have been better off in global market. Complaints began to mount. he ought to concentrate on toothpaste marketing as both. both. Pradip Vyas. Vilas's single minded perseverance ensured that 'Natural Remedies' saw a rapid rise in sales in 70's and 80's. toothpastes and vanishing cream markets. the screaming headline of an advertising campaign triggered off a thought process in Mr. Vilas Borde's mind. learning from these mistakes. Ayurvedic cosmetics. however. you will be able to : • • • spot the Indian firms aspiring for entry in global markets consider the consultant's advice against such a move analyse the firm's weaknesses in quality and packaging of products Think Global and Act Local. During the initial stages.

brochures and sales literature from Germany about the electronic components to be sold by their partnership firm in India. In course of time. B) C) . His present turnover is in the range of Rs. Harish got an attractive offer from Naresh Mistry.] Harish will receive booklets. [ Percentage level of partnership is yet to be finalised. you will be able to : • • • • find a Indo-German electronic goods partnership deal in the offing identify export-import proposal details/options criticise the Indian partner's ignorance of IT practices recognise change in the product-line. exposing tie-up chances Harish Patel of Kandla port town is a dealer in electronic goods. For the first five years. The proposal runs like this : A) Harish and Naresh will form a partnership firm in India. 35 HARISH PATEL Objectives After going through this case. Recently. Products will be high-tech in nature ranging from PCBs . 15 lakhs. modem cards to components / spares for computers and fax machines. his NRI friend in Germany.Case No. it will serve as a representative firm of a German electronics manufacturing firm owned by Naresh. he steadily built business contacts in the electronics market and industry.

which itself is a great advantage to Harish. Harish is further confused. in such a business. Foreign exchange earned from this can be utilised for importing electronic goods. For each consignment under such an option. Harish has no experience. Naresh. OR 2) The Indian firm only establishes contacts with customers in India. His knowledge of export. Interested parties then directly import goods from Germany. He doesn't know how to raise the foreign exchange. if the 'Indian firm' decides to settle for the first option of importing the goods by itself. which are in great demand there. Harish doesn't understand this at all. however. further.import formalities is limited. . Naresh suggests that Harish can start exporting Indian (classical) music instruments to Germany. Musical instruments is an altogether new line of business for his firm. the Indian firm receives commission from the German firm.Cases in Marketing Management Harish has two options. suggests that Kandla Port town has a 'Seepz Zone'. 1) The Indian firm will import items from Germany and then sell these in the Indian markets.

they set up centers in that geography and hired natives to cater to the business. the Technovate experiment in hiring foreigners to work in India on Indian wages has been distinct and remarkable. The question is what brings the Europeans to India to work? Some say it is the challenge of working in the unfamiliar emerging markets. the European and US companies were outsourcing only English language BPO work to India. when BPO firms got non-English business. The Europeans are interested in coming to India. .Case No. you will be able to : • • • find the foreign job-seekers' growing interest in BPO firms recognise language skills and knowledge-base as assets underline globalisation: Indian BPO business breakthrough 29-year-old Ethel Graff worked with an international firm in Paris drawing about $3000 per month. BPO firms even hired Indians proficient in foreign languages. So far. Msource has set up a center in Mexico to deliver Spanish work. India could well be looking to bite into the $ 65 billion European BPO market. however. she flew into Delhi on a one year work Visa to work with a Delhi-based BPO firm Technovate Evolutions at Okhla for under 25% of her European salary. However. by 2005. others come because new work experience in India matters. 36 ETHEL GRAFF Objectives After going through this case. which is a subsidiary of the London headquartered online travel agency "ebookers Pic" has given new dimensions to the evolution of Indian BPO industry. to the surprise of her friends. Today. As BPO people. which is evident from the fact that one company received 100 applications for five posts that it had advertised for in the newspapers in Scandanavia. In some cases. If this trend grows. however. In the last few months. For instance. The arrival of Graff and 29 other Europeans at the company. they serve their own people from India and also get opportunities for travel in the country. till four months ago.

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while the Indian center employs 650 people. .35. Its rate of attrition is 15% compared to the industry average of 40%. e-Daksh. as it finds that the cost in that country is lesser than in India. another Indian BPO firm. The company plans to increase its intake of Europeans to 100 by December 2003. These operations will be managed by the local CEO and the staff will also be local. The times are going to be challenging. people.Cases in Marketing Management Technovate has a BPO center in Ireland too. has decided to set up operations in the Philippines. 25. time zones. All these developments mean an interesting mode in the development of Indian BPO business. in the future. Firstly. Why then are they more interested in India? The most important reason is that Ireland is three times more expensive than India. Here again.000 on the training of each employee on countries. The Irish center employs 60 people. On the other hand. Foreigners' distinctive and vast knowledge is another area where foreign professionals score naturally. the Europeans score as they have better knowledge about the environment they come from. Indians can learn the foreign languages but they do not match up on skills that can get additional bookings for the company. habits and culture. BPO companies spend a few months and Rs. according to its CEO.000. Europeans also have a significant effect on Indians working with them as it helps the Indians to hone their skills in the foreign language. including 30 Europeans. This kind of model is important for the company on three counts. The foreign staff in India costs the company 25 % of the European wages.

It wasn't until 1996 that the United States placed an embargo on the import of shrimp from countries that failed to mandate the use of excluder devices. the US government dragged its heels on enforcing the import ban. The law also banned the import of shrimp from countries that fail to mandate the use of turtle excluder devices by their shrimp fleet. In an effort to limit this carnage.000 sea-turtles are trapped and drowned in the nets of shrimp boats every year.) The WTO formed an independent arbitration panel composed of three experts from countries not involved in the dispute.India. Even then. As with many such laws. it did so only because environmental groups in the United States had sued the Government to compel it to enforce its own law. which decided as a matter of principle to pursue the WTO case (Thailand had already satisfied the United States that its turtle protection methods were adequate. Three countries were targeted by the 1996 ban . The three responded to the ban by filling a complaint with the World Trade Organisation. the US Congress passed a bill in 1989 that required shrimp boats to be equipped with a turtle excluder device. They were joined by Thailand. particularly by shrimp boats. Pakistan and Malasia.50. 37 SEVEN SPECIES Objectives After going through this case. six of them are on the US list of endangered species. you will be able to : • • • find out how US law and import bans affect other countries' interests identify the WTO platform for the settlement of disputes identify the WTO verdict against US' s import ban threats There are seven species of sea-turtles in the world. The panel was charged with reviewing the US position . An estimated 1.Case No. a simple grate that fits over the mouth of shrimp trawling nets and prevents sea turtles from being trapped. A major cause of the decline of sea-turtles has been the poor fishing practices.

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Its behaviour on the climate change issue is one example. According to these countries. the United States was violating WTO rules by applying domestic legislation outside its boundaries and by applying it in a discriminatory manner. An article in the Hindu. The World Trade Organisation panel issued its ruling on April 6. an Indian newspaper. The WTO stated that while environmental considerations were important. A Sierra Club spokesman noted : this is the clearest slap at environmental protection to come out of the WTO to date. "It is unthinkable 130 . a spokeswoman for the Washington. 1998. the United States would not be allowed to force other nations to adopt policies to protect an endangered species such as the turtle. the WTO stated that even under WTO treaty provisions that allow environmental exceptions. Influential voices in all these countries accused the United States of hypocrisy. The WTO ruled that the United States was wrong to prohibit shrimp imports from countries that failed to protect sea-turtles from entrapment in the nets of shrimp boats. the WWF claimed that the United States acted in a manner consistent with its obligations and took reasonable measures that reflected the will of the international community. Its refusal to sign the bio-diversity treaty is another. what complainant nations like India are doing to the marine turtle is a contemptuously small problem. Even though no multilateral body or resolution had authorised the United States to enact its ban. In its defense.Cases in Marketing Management to see whether it conflicted with the WTO rules. Environmental groups responded with outrage to the WTO's ruling. the world's climate and atmosphere. DC based Center for Marine Conservation stated." The US leadership has. The four countries that brought the complaint argued that the US ban represented an unfair restraint on trade that was illegal under WTO rules. the WWF argued that marine turtles are migratory animals. The United States was supported by a number of environmental organisations. the United States must pay a penalty to the WTO if it keeps its law and imposes a ban in place. Its refusal to pay dues to the United Nations is yet another. While the WTO has no power to overturn US law. including the World Wildlife Fund (WWF). the primary aim of international agreements on trade remained the promotion of economic development through unfettered free trade." Similarly. stated. the United States claimed there are provisions in the WTO rules for using restrictive measures if they are related to the conservation of exhaustible natural resources and if such measures are made effective in conjunction with restrictions on domestic production or consumption. In a brief submitted to the panel. unfortunately. always put its national interests before global concerns in its global environmental policies. "Compared to what the US as a nation is doing to other global shared resources. a global resource that should be subject to stewardship by international society. Further.

C ase 37 Seven Sp ecies that we should not be allowed to mitigate the impacts of our own shrimp markets on endangered sea-turtles. . This entire life form is threatened with extinction".

taste in the drink. the entire inventory of Coke products from one country were banned from sale. The entire episode left more than 200 Belgiuns and French school children ill. By June 15. which were suspected to be responsible for the sudden illness of more than 100 school children in the preceding six days. This recall was in addition to the 2. the largest ever recall in its 113 year history. Ghent and Wilruk in Belgium. For the first time.Case No. while some batches were also produced in Dunkirk. The Company's products had been bottled in Antwerp. 1999. Spain. France. the Governments of France. while Coke's Dutch arm recalled all products that had come from its Belgium plant. Most of them reported an "unusual odour" and an off . and Luxembourg also banned Coke products. In the same week.5 million bottles that had already been recalled in the previous week. Coke had recalled about 30 million cans and bottles. . you will be able to : • • • • find Coke consumption by children leads to illness analyse fierce controversy over Coke' s lapses evaluate Coke's justification about its standards justify European Commission's observations The Coca-Cola recalled over 15 million cans and bottles on June 13. The Company had to assure its British customers that the products made in its UK factories were safe. The children in 6 schools in Belgium had complained of headache. vomiting and shivering which ultimately led to hospitalisation after drinking Coke beverages. 1999 after the Belgian Health Ministry announced a ban on Coke beverages. nausea. 38 COCA COLA O bjectives After going through this case.

On the other hand. but it is not harmful". The Company said that there had been separate errors in two plants. Analysts said that Coke had not handled the situation well and its media messages were confusing. Coke alternately claimed that pesticide residue on the can or bottle. inconsistent and muddled. asserting that the Company had not cooperated adequately and its explanations were not entirely satisfactory. They blamed coke's promotion strategy to sell soft drinks to school children. they had determined that the strange taste was the result of a substandard gas used to carbonate the products. While no deaths were linked to the Coke problems . that worried analysts was the illness caused to the innocent school children. Coke had an opportunity to disclose this information but chose not to do so and was accused of being unethical.S. it had a significant negative impact on the public confidence in Europe. A Company spokesman assured consumers "It may you feel sick. Coke investigated the problem by testing the suspect batches for chemicals. Another issue. After the crisis. In August 1999. the Company also insisted that there was never any health threat. prior to the above incidents. The Company claimed that the tests showed nothing toxic in the beverages. . which had raised a lot of controversies in the U.Cases in Marketing Management Analysts felt that the Belgium recall was one of the worst public relations disasters in Coke's history. The products from Antwerp plant had a strange odour as some fungicide had accidentally fallen on the exterior of the cans. It was alleged that the Company had information about people who had become ill weeks . or a bad batch of Carbon dioxide was to be blamed for the "off taste. the European Commission reprimanded Coke. In addition. It also said that errors were committed in the selection of plants or the dosage of extracts in Coke's own concentrate.

The company's first President. was based on two of the drink's ingredients. The name Coca-Cola. and France. calendars and scales bearing the CocaCola brand. the US Army shipped bottles of the beverage abroad to supply American soldiers in Europe and Asia. the company had established syrup plants in Chicago. Coca-Cola pursued aggressive global branding. since 1893 recognise ''vision'' in expansion plans identify image-building advertising campaigns all over the world underline global player's varying marketing strategies The most recognised brand name in the world got its start in an Atlanta pharmacy. Puerto Rico. you will be able to : • • • • find Coca-Cola's innovative promotional strategies. At Candler's behest. extracts from coca leaves and the cola nut. and Los Angeles. Its popularity throughout the world was fuelled by colorful and persuasive advertising that cemented its image as the "All-American" beverage . when the drink contained a form of cocaine. a drug made from coca leave extracts. Coca-Cola expanded beyond the American borders in the early 1900s into numerous countries including Cuba. 39 THE REAL THING Objectives After going through this case. In its early days. where it sold for five cents a glass. the company printed coupons offering complimentary first tastes of Coca-Cola and outfitted distributing pharmacists with clocks. registered as a trademark on January 31. Dallas. Asa Candler was a savvy businessman who implemented numerous marketing strategies to increase consumption. In the 1920s. finding creative placements for its logo such as on dogsleds in Canada and on the walls of bullfighting arenas in Spain. the Coca-Cola was marketed as an "Esteemed Brain Tonic and Intellectual Beverage". During World War II. 1893. The drink soon became a national phenomenon by 1895.Case No.

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In Spain. Additionally. Coke developed more globally aware advertising. he expressed his desire for Coca-Cola managers to adopt a new mantra. Coke's moves into formerly restricted markets such as China in 1978 and the Soviet Union in 1979. local managers were assigned responsibility for sales and distribution programs of Coke products to reflect the marked differences in consumer behavior across countries. ads in South America used the Argentine soccer star. In Italy. For example. In 1971. with more than 230 brands in 200 countries. weary football star reluctantly accepts a coke from an admiring young fan and then unexpectedly tosses the kid his jersey in appreciation was replicated in a number of different regions using the same format but substituting famous athletes from those regions (e. in China the beverage is served at special government occasions. Still. Coca-Cola conducts business." There are about two products that lend themselves to global marketing and one of them is Coca-Cola". Rather. packaging. "When Douglas Daft took over as Chairman and CEO in 2000. The company used the phrase " think global. price and advertising to match the tastes in specific markets. Coca-Cola did not institute a uniform marketing program in each of its global markets. Coke is served with meals in place of wine or cappuccino. the company pursued a restructuring plan that would recast the beverage gaint as a collection of smaller. Coke's famous "Mean Joe"Green TV ad from the United States-in which the tired. the company ran its legendary "I'd like to buy the world a Coke" television spot. as evidenced by shallow earnings during the global economic upheaval in the late 1990s. One ad agency executive said. bolstered its image as a global company.g. More than two-thirds of Coca-Cola's revenues come from outside the United States. act local" to describe its marketing strategy. Today. Niat). coke has been used as a mixer with wine. during the 1990s. while those in Asia used the Thai soccer star. In response to the depressed sales brought by international recessions. Coca-Cola was voted the best known and most admired brand in the world. locally run businesses. . Maradona.Cases in Marketing Management when the Vietnam War tarnished the American image. in which a crowd of children sang the song from atop a hill in Italy. By 1988. "think locally and act locally". a fact which makes the company vulnerable to downturns in international economies. the company often tailored the flavor.

Coca-Cola could not have become over a 50 billion dollar business. John Pemberton. • The Coca-Cola company started out as an insignificant one man business and over the last one hundred and ten years it has grown into one of the largest companies in the world. The first operator of the company was Dr. He concocted the formula in a three legged brass kettle in his backyard on May 8. He had paid $76. the carbonated water was added to the syrup to make the beverage that we know today as Coca-Cola. you will be able to : • examine this case study and note various internal and external factors affecting the fortune of the company. Pemberton was forced to sell because he was in a state of poor health and was in debt. an Atlanta pharmacist. . Coca-Cola debuted in Atlanta's largest pharmacy. He also penned the famous Coca-Cola logo in it's unique script. analyse the importance of various factors responsible for shaping the company's policies over the years. Coca-Cola was invented by Dr. but he only made $50. Dr.Case No.00 in profits. Without the help of society. Jacob's Pharmacy. John Pemberton and the current operator is Roberto Goizueta. cinnamon. 40 COCA-COLA : THE LEGEND Objectives After going through this case. as a five cent non-carbonated beverage. and the seeds of a Brazilian shrub to make the fabulous beverage (Things go better with Coke 14). coca leaves. after Pemberton's death the remainder was sold to Candler. He mixed a combination of lime. John Pemberton sold a portion of the Coca-Cola company to Asa Candler. Coca-Cola was named by Frank Robinson. 1886. Later on. one of Pemberton's close friends.96 for advertising. Coca-Cola was originally used as a nerve and brain tonic and a medical elixir.

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He also opened the first syrup manufacturing plant in 1884. Candler also introduced the twelve ounce Coke-can in 1960. In 1915. Robert Woodruff was an influential man in Atlanta because of his contributions to area colleges. they operated Coke's system of providing refreshments for soldiers. Currently. He also made Coca-Cola available through vending machines in 1929 and that same year. Coca-Cola is advertised on over five hundred TV channels around the world. the CocaCola bell glass was made available. who welcomed the beverage as a reminder of home. The popularity of the drink exploded as American soldiers returned home from the war with a taste for the drink.Cases in Marketing Management Candler acquired the whole company for $2. The Coca-Cola contour bottle was patented in 1977. When he made a contribution. Coke began to represent itself as a patriotic drink by providing free drinks for soldiers of the United States Army. Woodruff did . businesses and organisations. Instead. The Company was then passed on to his son. universities. Robert Woodruff. so did Coke. In the newspapers. he introduced the Coke Santa as a Christmas promotion and it caught on. In 1931. Anonymous. Coca-Cola adopted an apparent policy of ignoring the practice of eugenics and anti-semitism by Nazi Gemany. Candler achieved a lot during his time as the owner of the company. Woodruff introduced the six bottle carton in 1923. Several of Coke's top executives in Germany were prominent members of the National Socialist German Workers Party. He started advertising on the radio in the 1930s and on the television in 1950. setting the stage for the company's post-war overseas expansion. The United States Army permitted Coca-Cola employees to enter the front lines as "Technical Officers" when in reality they rarely if ever came close to a real battle. Candler aggressively advertised Coca-Cola in newspapers and on billboards.300. this is how he became to be known as Mr. who would be president for six decades. As the Allies of WWII advanced. The Root Glass Company made the contour bottle for the Coca-Cola Company. When the United States entered World War II. Coca-Cola set up bottling plants in several locations overseas to assure the drink's availability to soldiers. which took advantage of the situation by establishing new franchises in the newly occupied countries. 1893. he would never leave his name. Coca-Cola was sold after the Prohibition Era to Ernest Woodruff for 25 million dollars. His great achievement was the large scale bottling of Coca-Cola in 1899. On January 31. Before and during WWII. The two litre bottle was introduced in 1978 and the same year the company also introduced plastic bottles. the famous Coca-Cola formula was patented. he would give away coupons for a free Coke at any fountain.

Another factor that influenced the change was that Coke's market share fell 2. But he improved efficiency at every step of the manufacturing process. The decision to change their formula and pull the old Coke off the market came about because taste tests showed a distinct preference for the new formula. The Coca-Cola company stumbled onto the new formula in efforts to produce diet Coke.Cola Company. . The change was announced April 23. which were all answered and each person got a coupon for the new Coke. The Jingle read like this: "I'd like to teach the world to sing In perfect harmony. it was also slightly smoother. A financial analyst said. emphasising quality control. The new formula was a sweeter variation with less tang. a history of Coca-Cola. This was the first flavor change since the existence of the Coca. Some two hundred TV and newspaper reporters attended this very glitzy announcement. Coke's market share fell from 24. Most of the callers were shocked and outraged. The company also fielded over forty thousand letters. The Boss. Within a week of the change. Woodruff also increased productivity by improving the sales department. I'd Like to Buy the World a Coke. he raised the syrup prices for distributors.8 percent in 1984. Robert Woodruff's death was a large contributor to the change because he stated that he would never change Coca-Cola's formula.Case 40 Coca-Cola : The Legend have one dubious distinction. A retired Air Force officer explained in a letter to the Coca-Cola company that he wanted to be cremated and interred in a Coke can. For all of these achievements he earned the name. 1985 at the Vivian Beaumont Theater at the Lincoln Center. and many other elements. many said that they were considering switching to Pepsi. the Coca-Cola Company made what has been known as one of the biggest marketing blunder. Each percentage point lost or gain meant 200 million dollars.3 percent in 1980 to 21. Within six weeks. I'd like to buy the world a Coke And keep it company ". It included a question and answer session. They put forth 4 million dollars of research to come up with the new formula. but now that this change had come about. and beginning large-scale advertising and promotional campaigns. The change to the world's best selling soft drink was heard by 81 percent of the United States population within twenty-four hours of the announcement. The debut was accompanied by an advertising campaign that revived the Coca-Cola theme song of the early 1970s.5 percent in four years. the eight hundred number was being jammed by six thousand calls a day. one thousand calls a day were flooding the company's eight hundred number (1 -800-GET-COKE). he was reconsidering his decision. Woodruff made Coke available in every state of the Union through the soda fountain. In 1985.

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people in trouble tend to do desperate things. with its secret flavoring ingredient. first.. That is worth 200 million dollars a year. Roger Enrico. Coca-Cola officials said. to those of you who are drinking Coca-Cola with its great new taste.. She also stated. we have two messages to deliver to the American consumer. The old Coke formula. The letter read like this: "It gives me great pleasure to offer each of you my heartiest congratulations. called Merchandise 7X. Many American consumers of Coca-Cola asked if they would have the final say... This tasted almost like it's flat. This was greatly due to dropping market share and consumer protest. and we have earned a celebration. a thirty-five year old vice president of an insurance company said. I say. the new formula will boost Coke's share by 1 percent. 1985. The market share fell from a high of 15 percent to a low of 1. eighty-seven days after the new Coke was introduced.4 percent. Wendy Koskela. the president of the Coca-Cola Company stated. . Roger Enrico President.and we'll have to keep our eye on them. When Pepsi heard that the Coca-Cola company was changing its secret formula. they said that it was a decision that Pepsi tastes better. and is reformulating brand Coke to be more like Pepsi. our thanks. On July 10. Roberto Goizueta said. The change back to the old Coke was known as the Second Coming.. "I hate the new stuff". But for now.There is no question that the long-term market success of Pepsi has forced this move. will stay locked in the Trust Company of Georgia bank vault in Atlanta. After eightyseven years of going at it eyeball to eyeball. Enjoy!" Best Regards. that Real Coke had punch. CEO Pepsi-Cola USA. Roberto Goizueta. It tastes like Pepsi". victory is sweet. Coca-Cola management had to decide: Do nothing or buy the world a new Coke. This is what many Coke officials said and thought that this was the most significant soft drink development in the company's history. They decided to develop the new formula. the old Coke was brought back in addition to the new one. "It's too sweet. Well. We're going to declare a holiday on Friday. to declare the victory.Maybe they finally realised what most of us have known for years. the other guy just blinked. Pepsi tastes better than Coke.S.But there is a second group of consumers to whom we want to speak to today and our message to this group is simple: We have heard you".. a thirty-six year old anthropologist said. never to be used again.. "Today. the president and CEO of Pepsi-Cola wrote a letter to every major newspaper in the U. Coca-Cola is withdrawing their product from the marketplace.Cases in Marketing Management Sharlotte Donneally..

The new corporate headquarters came to be known as The Tower. more than half Coca-Cola sold was outside of the U. One caller said they felt like a lost friend had returned home. He said that costs and location did not matter.8 billion people in eighty different languages. One in every two colas and one in every three soft drinks is a Coca-Cola product. and many other exciting items. Coca-Cola is worth more than 58 billion dollars on the stock market. the Coca-Cola company tried to bring back the reformulated Coke. It still houses a collection of memorabilia. . This is why CocaCola is the largest soft drink company in the world. They accomplished this through scholarships. it was known as The Bunker. Mr. Don Keough. phosphoric acid. The effort to phase in Coke II into the soda market was quite unsuccessful.S. vanilla. "the truth is we are not dumb and we are not that smart". exhibits. said in response to the comeback. Another large accomplishment was that Coca-Cola was the first company to make and use recycled plastic bottles. "You would have thought we had invented a cure for cancer". During the time when the research for the new formula was taking place. The Coca-Cola company's eight hundred number received eighteen thousand calls of gratitude. various oils and essences and extracts of the coca leaf and the kola nut. One great earmark that the Coca-Cola Company had been helping the people of Atlanta. the home of Coca-Cola. Five years after the infamous Coke fiasco. The best-known trademark in the world is sold in about one hundred and forty countries to 5. Coca-Cola president.Case 40 Coca-Cola : The Legend Roberto Goizueta and Donald Keough took full blame for this failed product launch. a Coke marketer said. samples of the products. hotlines. Coca-Cola executives admitted that they had goofed by taking the old Coke off the market. he supplied 5 billion bottles to the service. This was said to be a classic marketing retreat. During the Woodruff era. etc. This was said to be the only way to regain the lead on the cola wars. donations and contributions. Ike Herbert. Coca-Cola products outsell it's closest competitors by more than two to one. The known ingredients in present day Coca-Cola are water. The comeback of old Coke drove stock prices to the highest level in twelve years. The one in four hundred part of cocaine was removed from Coca-Cola in 1903. caffeine. In the mid-1970's. Georgia. For more than 65 years. Coca-Cola has been a sponsor of the Olympics. One old Coke loyalist said that the company had spoiled the taste of its ninety nine year old soft drink and betrayed a national trust. The 1996 Summer Olympics was to be held in Atlanta. In 1979. All of what has been said is the basis of what Coca-Cola was built on. fifteen hundred employees moved to the new corporate headquarters in Atlanta located on North Avenue. Woodruff made a promise to the armed forces of the United States to supply Coca-Cola to every serviceperson.

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The company removed its branding from vending machines in Scottish schools in December 2003. It has also been alleged that due to the amount of water required to produce Coca-Cola. In 2003. In particular. Luke Visconti. Coca-Cola is appealing the case. evidence has been presented showing Coca-Cola is no more harmful than comparable soft drinks or acidic fruit juices like apple juice. promotes and treats minority employees. .and a number of its distributors and bottlers were fined $68m for unfair commercial practices. which rates companies on their diversity efforts. replacing it with a graphic of an urban scene. One study has shown that this hastens bone loss. Coca-Cola was forced to put in management practices that have put the company in the top 10 for diversity.Cases in Marketing Management Turn of Events. Under normal conditions. it is feared that the water used to produce Coke may contain unhealthy levels of pesticides and other harmful chemicals. Like most other colas. Coca-Cola agreed to pay $192. a United States federal judge dismissed an antitrust lawsuit filed by PepsiCo Inc. Coca-Cola's Mexican unit Coca-Cola Export Corporation . Coca-Cola contains phosphoric acid.. contributing to illnesses such as osteoporosis. the beverage does contain high fructose corn syrup. In some of these cases. scientific evidence indicates that Coca-Cola's acidity causes no immediate harm. the United Kingdom government launched a wide-ranging review into food promotion and childhood obesity. said: "Because of the settlement decree. One survey found that Coca-Cola did not broadcast a high proportion of their advertisements during children's television. accusing Coca-Cola Co. Although numerous court cases have been filed against the Coca-Cola Company since the 1920s alleging that the acidity of the drink is dangerous. of monopolising the market for fountain-dispensed soft drinks in the United States. However. Coca-Cola in Europe formally agreed to end deals with shops and bars to stock its drinks exclusively after a European Union investigation found its business methods stifled competition. In June 2005.5 million to settle a class-action race-discrimination lawsuit and promised to change the way it manages." In 2004. protesters at Coca-Cola's annual meeting claimed that blacks remained under represented in top management at the company. and the frequency of which teeth are exposed to cariogenic (acidic) environments affects the likelihood of tooth decay through caries development. In India. In 2004. there exists widespread concern over how Coca-Cola is produced. a co-founder of Diversity Inc. no evidence corroborating this claim has been found. In November 2005. Cola in the Box? In 2000. paid less than white employees and fired more often. In November 2000. acquifiers are drying up and forcing farmers to relocate.

the quantity and quality of water available to local . Pepsi. an Indian parliamentary committee backed up CSE's findings. Another issue that plagued the Coca Cola company was one of ecological degradation. CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations. In 2004. Coca-Cola had registered a 15 percent drop in sales after the pesticide allegations were made in 2003. In March 2004. the Centre for Science and Environment (CSE). Narain defended CSE's actions by describing them as a natural follow-up to a previous study it did on bottled water. Fanta. DDT. CSE said it had tested the same products in the US and found no such residues. of "brandjacking" -—using Coke's brand name to draw attention to her campaign against pesticides. The Coca-Cola Company and PepsiCo angrily denied the allegations. accused Sunita Narain. Mirinda. Limca and Sprite) are among the many produced by The Coca-Cola Company. Environmental degradation in the form of depletion of the local ground water table due to the utilisation of natural water resources by the company poses a serious threat to many communities. Coca-Cola and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. contained toxins including lindane. arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks like soda. and a government-appointed committee was tasked with developing the world's first pesticide standards for soft drinks. CSE's director. As of 2005.Case 40 Coca-Cola : The Legend In 2003. and several other soft drinks (Seven -Up. But an Indian parliamentary committee in 2004 backed up CSE's findings and a governmentappointed committee is now trying to develop the world's first pesticide standards for soft drinks. Malathion and Chlorpyrifos-pesticides that can contribute to cancer and a breakdown of the immune system. The Coca-Cola Company has responded that its plants filter water to remove potential contaminants and that its products are tested for pesticides and must meet minimum health standards before they are distributed. Coca-Cola's 30 times. said that aerated waters produced by soft drinks manufacturers in India. including multinational giants Pepsico and Coca-Cola. David Cox. Coke's Hong Kong-based communications director for Asia. Coke and Pepsi together hold 95% market share of soft-drink sales in India. local officials in Kerela shut down a $16 million Coke bottling plant blamed for a drastic decline in both. an NGO in New Delhi. Tested products included Coke. Thums Up. Coke and PepsiCo oppose the move.

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fighting a case that has gone all the way to India's Supreme Court. Kerala's highest court rejected water use claims. a local water official blames a Coke plant — which has been the scene of many protests by NGOs and local residents — for polluting the groundwater by releasing wastewater into surrounding land." the "most significant factor" was a lack of rainfall.Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). A Coke official confirms there had been a drainage problem with treated wastewater several years ago but says that the company built a long pipeline to correct it. These controversies are a reminder of India's sometimes acrimonious relationship with huge multinational companies. a scientific study requested by the court found that while the plant had "aggravated the water scarcity situation. the Indian state of Kerala banned the sale and production of Coca-Cola. In Columbia. On Friday. it has been alleged that the bottling company hired paramilitary mercenaries to assassinate union leaders. near the holy city of Varanasi in North India. along with other soft drinks. In April 2005. the United Steelworkers of America and the International Labour Rights . In 1993. the company (along with PepsiCo) returned in pursuance of India's liberalisation policy. In July 2001. some argue that Coke and Pepsi have been major targets in part because they are well-known foreign companies that draw plenty of attention. Indeed. In 2006. the High Court in Kerala overturned the Kerala ban ruling that only the federal government can ban food products. months after the local Coke plant stopped operating. 2006. These issues are not restricted to environmental damage alone. Coca-Cola's main bottler in Latin America. Further. the packaging used in Coca-Cola's products have a significant environmental impact but the company strongly opposes attempts to introduce mechanisms such as container deposit legislation. due to concerns of high levels of pesticide residue. Indian environmental activists Vandana Shiva has stated that it takes nine litres of clean water to manufacture a litre of Coke though Coca-Cola says it is only an average of 3. Moreover. Meanwhile. noting that wells there continued to dry up last summer. The case has been appealed and a decision is pending. These charges have resulted in several court cases and boycott actions against The Coca-Cola Company.12 litres. Panamerican Beverages (Panamco).Cases in Marketing Management farmers and villagers. has been criticised for its relationship with unions. September 22. The company has been trying to regain the plant's license. Critics respond that Coke shouldn't be locating bottling plants in droughtstricken areas.

In October of that year.Case 40 Coca-Cola : The Legend Fund filed suit in a US court against Coca-Cola and some bottlers in Colombia on behalf of their workers. and following repair work and construction on the plant. controversially decided to ban the sale of Coca-Cola products (in the Student Union shops.CocaCola found a new owner. On September 4th. Coca-Cola is still available from vending machines and other non-SU controlled outlets on campus) as a result. Family members of union activists have been abducted and tortured. In the 1970s. there have been a total of 179 major human rights violations of Coca-Cola's workers. According to the plaintiffs. The company's decisions . the SINALTRAINAL trade union. Union members have been fired for attending union meetings. As way back as 1970s the scene was not very different. In Summer 2003. the largest university in Ireland. The companies denied the charges. the companies "hired. as well as a number of bars and restaurants. which represents the 250. 1985. Dublin. a Coca-Cola franchised bottling plant in Guatemala suffered a spate of mysterious murders of unionaffiliated employees leading to the non-renewal the bottling plant's license in 1981 . The company has pressured workers to resign their union membership and contractual rights. and fired workers who refused to do so. most notably Trinity College. as well as the Teachers' Union of IReland and the Irish National Teachers Organisation and a number of other trade unions and political organisations. work resumed at the Guatemala bottling plant on March 1. Most troubling to the delegation were the persistent allegations that paramilitary violence against workers was done with the knowledge of and likely under the direction of company managers. the Students' Union at University College. called for an international boycott of Coca-Cola products. The boycott is opposed by some branches in the SIPTU trade union (who represent the majority of Coca-Cola workers in Ireland) and by the Coca-Cola Company themselves. Dublin and the National College of Art and Design. including nine murders. which represents the majority of workers at CocaCola bottling plants in Colombia. 2006. A later attempt to reverse the ban at UCD failed.000 students on the island of Ireland. Judge Martinez dismissed the remaining claims against Panamco and the Colombian bottler Bebidas y Alimentos. In January 2004. the New York City Fact-Finding Delegation on Coca-Cola in Colombia confirmed the workers' allegations. and the boycott has spread to other colleges in Ireland. They found: To date. contracted with or otherwise directed paramilitary security forces". Motions in support of the boycott have been passed by the Union of Students in Ireland. In April 2003 District Judge Jose E Martinez in Miami excluded The Coca-Cola Company and its Colombian unit because its bottling agreement did not give it "explicit control" over labor issues in Colombia. The physical access that paramilitaries have had to Coca-Cola bottling plants is impossible without company knowledge and/or tacit approval.

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created in 1886. Rutgers University in New Jersey. Along with Mc Donald's. he said: "I am under immense pressure from the public. One such instance in 2000 saw a claim that the Coca-Cola label. The Company argued that "it had no right to interfere in labor disputes between independent parties and asserting that such an intrusion would be improper". Mr. Michigan University officials mentioned that this was a . declaring that the logo "does not injure Islam or Muslims. The manager of Egypt's Coca-Cola bottling operations quickly informed the press that Coca-Cola would never do business with Israel. some backlash has occurred. mostly in the form of boycotts in the Middle East. V.The president of the Gangaikondan panchayat. Coca-Cola's annual contracts with the University of Michigan alone were worth around US$ 1. forced to explain this." The University of Michigan became the tenth US University to have put on hold the sale of Coca-Cola's products in its campus. actually contained hidden anti-Islamic phrases ("No Muhammad. Coca-Cola was content not to sell in Israel. So I have issued this statement. Both the University of Michigan and New York University were Coca-Cola's largest campus markets in the USA. the largest private university in the US. In 1949 Coca-Cola attempted to open a plant in Israel but was refused a permit. with effect from January 01. The controversy became so widespread that the Grant Mufti of Egypt — who has proudly admitted in related interviews that he himself indulges in at least one Coke daily—publicly addressed it. Coca-Cola officials invented the excuse that Israel was too small a market for a Coca-Cola operation. and accused Coca-Cola of doing business with Israel.Cases in Marketing Management were made after pressure from several groups. 2006. In 1961 the issue came up again when an Egyptian civil servant mistook Amharic writing on a Coca-Cola bottle for HEBREA. When asked about the conflicting statements.4 million in sales. However. No Makkah" in its mirror image in Arabic. Coca-Cola has become an international symbol of American culture. including a shareholders resolution filed in 1979. police and other quarters. Eager to avoid the Arab League boycott and sell to the much larger Arab market. " Five other Indian states have announced partial bans on the drinks in schools. colleges and hospitals. and the Santa Clara University in California. While the company still enjoys widespread popularity. In Sivaganga District of Tamil Nadu state there were several protests and rallies opposing the proposed Coca-Cola bottling plant in fear of water depletion and contamination. Other prominent US universities that have banned Coca-Cola are New York University. and especially of American consumerism.) The Coca-Cola Company claimed sales dropped 10 to 15% in Egypt after the rumor began spreading in 2000. Kamson died under mysterious circumstances two days after going back and forth in his resentment against the upcoming Coca-Cola bottling plant in the village.

less affected by the new economy booms into south eastern Asia. in late 2003. also took part in the Canadian tour. "There is a humanitarian crisis in Colombia." he said. Coke reps visited McMaster and the University of British Columbia." but "hundreds more could follow suit soon in England." Stung by a series of controversies. Kari Bjorhus. the Indian subsidiary of Coca-Cola hired Perfect Relations to help rebuild its damaged reputation and sales in ten states. Coke's PR manager in Colombia. Turkey and India. Corporate responsibilty towards its workers. McMaster and the University of Guelph." reported Associated Press. Britain's Manchester University banned Coke from its campus. Students are now expected to call for the National Union of Students to instruct its commercial arm NUS Services to end its supply contract with Coke at its national conference later this month. "because of its behavior in Colombia. Both Coca-Cola and the university have agreed to keep the negotiations on. it seems. After students at two Canadian universities. Coke has also recently hired a labour-relations director and plans to issue a human-rights policy next year." In December 2005. 20 North American campuses were "Coke free.. but [student activists] have made it a Coca-Cola-centric thing when it's a Colombia-centric thing. "The University of Michigan is an important school. As of December 2005.The newly contracted PR specialists have so far successfully managed to play down anti-capitalist protests concerning the wider availability of 'Coca-Cola' in some areas. "the world's largest soft-drink company has launched a counter-offensive in hopes of heading off further boycotts. including buying billboards and the backs of magazines for ads apparently by "The Zero Movement". . "According to a news report the contract involved handling 'all external communications in addition to the regular marketing activities' as well as close cooperation with the company's advertising agency " McCann-Erikson. voted down campus exclusivity deals with Coca-Cola. and I respect the way they worked with us on this issue". as well as putting up posters in public places. than of clean drinking water. . "The Zero Movement" is an astroturf campaign by Coke to sell a new sugar-free drink called "coca cola zero" in Australia. Coke PR coordinator Kerry Kerr stressed that "these boycotts are actually affecting workers in the local area " and said that the allegations that the company is complicit in human rights violations in Colombia are false.Case 40 Coca-Cola : The Legend temporary suspension and sales of Coca-Cola's products could resume if the company made satisfactory progress on addressing these problems. The campaign has involved viral marketing strategies. In early 2007. was not a top priority. Pablo Largacha Escallon. a spokesperson for The Coca-Cola Company said..

PepsiCo Chairman Donald Kendall got the right to bottle and sell Pepsi in the Soviet Union in 1972. Limca. the company struggled to establish itself. made things difficult for Coca-Cola. the competition has led to rivalry. CCI had five presidents. It was also criticised for neglecting the Parle brands. CCI decided to buy out a local soft drink company. Von Behr decided to reposition CCI as a beverage company rather than as a carbonated soft drinks (CSD) company. Donald Short (April 1997-November 1999) streamlined the bottling operations and the supply chain.March 1997). Coca-Cola encountered problems one after the other. launched a series of highly effective marketing initiatives. where the winner was sometimes determined by who sat in the Oval Office. After Jimmy Carter moved to Washington. believing that its international image was well entrenched in the minds of the Indian consumers. The Coke-Pepsi rivalry took a bizarre twist when several Coca-Cola employees who had reportedly tried to sell trade secrets were taken into custody by federal authorities Wednesday after Pepsi tipped Coke off to the scheme. as well as a lot of intricate high-level maneuvering in Washington. Between 1993 and 2000. Douglas Jackson (November 1999-January 2000) had a short stint before being replaced by Alex Von Behr. Parle's popular brands like Thums Up. his old Atlanta pal Coca-Cola Chairman J. Von Behr along with Sanjiv Gupta. However in recent years. Paul Austin captured the exclusive right to sell Coke to a billion Chinese. The duo convinced the Atlanta headquarters about the need to introduce new affordable package sizes in India to increase beverage consumption. Maaza. Parle in 1993. Three suspects were charged with stealing confidential information—including a sample of . However. then Vice President (Operations). Jayadev Raja (1992-May 1995) and his successor. The company focused on establishing the Coke brand quickly.Cases in Marketing Management After reentering India. To gain a quick entry into the market and neutralise Pepsi's early mover advantage. a clear reflection of the difficulties which the company faced in navigating through a challenging. unfamiliar business environment. During the tenure of the founding CEO. Citra and Gold Spot had a 60% market share. the emergence of many local soft drink brands since the time it had left India and competition from Pepsi. Coke-Pepsi Rivalry. A New Twist? The global sales competition between Coke and Pepsi has produced some of the catchiest tunes in advertising. Richard Nicholas (June 1995. when his friend Richard Nixon was in the White House.

federal prosecutors said. it went straight to its corporate rival. Information is the lifeblood of the company. 30-year-old Ibrahim Dimson of New York and 43-year-old Edmund Duhaney of Decatur. Six weeks later. An undercover agent posing as a Pepsi spy says one of the suspected Coke thieves handed him an Armani bag containing the cola sample and documents.5 million transaction was to occur—when the F.B. three people face federal charges of stealing confidential information. according to the Associated Press." He said Coke will review its information-protection policies. Joya Williams. got a letter offering to sell Coke trade secrets. and trying to sell it to PepsiCo Inc. according to The Wall Street Journal. Ga. Ga. More specifically.5 million. were charged with wire fraud and unlawfully stealing and selling Coke trade secrets. the wire service elaborated. "Sadly. 41. of Norcross. 2006. "We're pleased that the authorities and the FBI have identified the people responsible for this"... it underscores the responsibility we each have to be vigilant in protecting our trade secrets. Those arrested include a Coke executive's administrative assistant who is accused of rifling through corporate files and pilfering information about a beverage that's so new it's still in the research phase. Pepsi spokesman Dave DeCecco said. for $ 1. today's arrests include an individual within our company. . "Competition can sometimes be fierce.Case 40 Coca-Cola : The Legend a new drink—from The Coca-Cola Co. from The Coca-Cola Co. The scheme was uncovered when Pepsi notified Coke. The bitter enemies. in exchange for a Girl Scout cookie box stuffed with cash. but also must be fair and legal". The three were charged with wire fraud and unlawfully stealing and selling Coke trade secrets. procedures and practices to make sure it safeguards intellectual property. Coke thanked Pepsi for its assistance. however performed an incredible act in 2007. The arrests happened the day a $1. including a sample of a new drink. Chief executive Neville Isdell said.I set up a sting operation. While this breach of trust is difficult for all of us to accept. when PepsiCo Inc. and trying to sell it to PepsiCo. they are accused of going through Coke's files and stuffing documents and a sample of a new Coca-Cola product into a personal bag. Coke contacted the Federal Bureau of Investigation on May 24.

while he experimented with the Indian Market. By generating an export market. It was commonly used in Indian families. Rajan had taken care of that. underline Kardai-Oil marketing strategy effects. you will be able to : • • • recall switch-over and marketing strategies of refined-oil. At that time. 2. The oilseeds yielded an excellent quantity oil. The Mill had to get people to accept a "tasteless" cooking medium because that is what the oil became after refining. the buyers had to be convinced that it was not harmful.base was large Groundnut was grown widely. there were a large number of Europeans in India to form the base of his domestic market. 3.Case No. 41 LAXMI MILLS Objectives After going through this case. The change was not only in name but also in a major technological difference. It undergoes a thorough cleaning process. The oil was sold in 15 and 50 Kg barrels to cater both the nucleus and joint family needs. Rajan Kohali alongwith his brothers. embarked upon making and selling edible oils way back in 1910. In 1930. However. . Rajan sold the concept of refined oil as one that is pure. retaining the flavour of the foodstuff itself. The potential customer . The Laxmi Mills adopted a new process : refining. identify its selling concept and consumer acceptance. Rajan and his sons started Laxmi Mills with factories operating in Mumbai and Hyderabad. Rajan had chosen groundnut oil for the following reasons: 1. The concept being new. he covered the risk of being left with excess stocks.

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To remain in the market as a leader.Cases in Marketing Management The company enjoyed 80 percent of the market-share. Maruti Oil Mills launched refined Kardai Oil which helps to lower cholesterol levels. ten. till 1970. Any person with a heart problem was immediately prescribed to change his cooking medium to Kardai Oil. In 1980. . fifteen and twenty-five kg. Doctors also started prescribing Kardai Oil. two. Mumbai Oil mills exploited this to the hilt. A number of big players entered the market. the primary cause of heartattacks. the Laxmi Mills changed the pack-size to one. Competition. Consumer queries started pouring in to Laxmi Mills. however became fairly intense in 1980. Other companies saw the growing potential and entered the market. The market share dropped sharply to 65 percent. five. People wanted to know if it was safe to use refined groundnut oil.

fees etc. They were not sure whether all of them were required by Indian Industries. The approval was for a period of five years.P. a) b) To give to a consultancy firm or To do it themselves . They were. training.Case No. 42 U. MINI COMPUTERS Objectives After going through this case. you will be able to : • • • • • underline conditional Government nod for tie-up recognise collaborator's stress on Market Research judge product-mix. The standard models amounted to 30 types. undecided as to how this Market Survey should be conducted.P Mini Computers Limited entered into technical collaboration with Zenith Mini Computers in India. measure alternatives for Market Survey identify Indian Company's limitations U. As the computer technology is moving at a fast pace. The collaboration was approved by the Government of India. during which the Company was expected to setup their own R&D cell and develop new models for future. Zenith Mini Computers had a wide range of computers. They had two alternatives. however. the collaborators had agreed to these conditions with an option to renew the association subject to the Government approval.

He also thought that computers being a complicated equipment. in particular. thinking of doing it through his own staff. .to Rs.000/. Both the alternatives had their merits and demerits. type of training and number of personnel required. from his friends. The Chief Executive had received bad reports about performance of consulting firms. He was. 3 lakhs. the consultants may not have the right people to do the survey and may not do justice to the job.Cases in Marketing Management Based on present foreign exchange rates and on the basis of straight conversion. suggested to their Indian counterparts that detailed Market Survey should be carried out in India.Mini Computers agreed to this proposal.P. the price ranged between Rs. and Mini Computers. therefore. in general.30. They. therefore. which will help the company in deciding the product mix suitable to Indian industries and business. he is working with a skeleton staff and he is not having any person experienced in Marketing or Market Research. At present. settle the know-how fees to be paid by Indian company. U.

The royalty rates vary from2% to 5%p. you will be able to : • • • • underline CSIR. he can sign a contract with BRDC for buying the process. for a period of 5 to 11 years. chemistry. cost of the project and estimated profit levels. potential applications. metallurgy. BRDC publishes a monthly newsletter as "BRDC Bulletin".controlled BRDC's multifarious services recognise entrepreneurs' demand for marketing data analyse BRDC's limitations in Market Research Services judge corrective measures for MR cell Bharat Research Development Corporation (BRDC) was set up as an autonomous body under the supervision and control of Council of Scientific and Industrial Research. It lists different products and processes that have been developed by various research laboratories and which are now available on sale. Its main function was to market the various products as processes developed by the different laboratories in the country. The entrepreneurs or industries interested in any of the items can write to BRDC and upon the payment of nominal sum (ranging from Rs. If and when an entrepreneur gets interested in a particular project. types of machinery and raw materials required. This covers such details as product identification and specifications. 43 BHARAT RESEARCH DEVELOPMENT CORPORATION Objectives After going through this case.5 to 30) can get a printed report which is termed as a 'project profile'.Case No. physics and so on. depending on the product process. These covered such areas as electronics. This normally consists of payment of a lumpsum fee and royalty on sales after the production commences.a. .

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The entrepreneurs have even agreed to share the costs. a marketing organisation has failed in marketing of its services. in principle. complaints of one type or the other are mounting. They are wondering whether they should set up their own cell or should utilise the services of professional market research agencies. They are neither in touch with the markets nor have the machinery to compile the market data which could be provided in the project profile. The entrepreneurs feel that BRDC. As a result of this situation. The proposal has been accepted. BRDC is not considered as a successful venture for several reasons. These cover such areas as incorrect estimation of cost of the project.Cases in Marketing Management Even after six years of its existence. does not have a market research cell. There are lot many products or processes for which there are no buyers. the entrepreneurs cannot establish the marketing feasibility of the project before they enter into an agreement with BRDC. However. BRDC. The project profile which is given to the prospective entrepreneur is prepared by respective research laboratories. from time to time. on assignment basis. non-availability of raw materials recommended and many others. a detailed market research should be done. . On some of the sales effected earlier. so that the entrepreneurs will have no doubt in their mind about the feasibility of the project. the major areas of dissent is on the lack of any marketing data. Suggestions are pouring with BRDC that before they decide to market a project. at present.

thinking about the establishment of a permanent consumer panel. Out of their total revenue earnings. Under this discipline itself.D. The Company had made consistent efforts to increase the domestic sales for last 3-4 years without much success. traditional methodology of market research is being practised. It was young Mr. while the rest is for consumer market research projects from various customers. jalebi.C a s e N O . have been in the management consultancy. . the market research services still constitute a major share amounting to over 30%. Objectives After going through this case. With a modest beginning in market research services. different soups etc. they have opened a branch office in Bangalore. They are in instant food business. since the last 16 years. M.Virani. For this purpose. M. you will be able to : • • • • state Consultancy's Firm's sphere of services recognise it's need for setting up Consumer Panel identify MR thurst on CB Surveys analyse CB Survey methodology problems Raja Consultants Ltd.3 crores. of Vitas Foods Pvt. A. Out of their total turnover of Rs. Vitas Foods are facing a typical problem. 60% share goes to industrial market research. manufacturing different types of ready mixes like gulab jamun. they diversified their activities in different areas of management consultancy. who got them interested. For the latter. they are in a position to offer turnkey assignments for different types of projects. almost 80% was through exports. Today. 4 4 RAJA CONSULTANTS LTD. Ltd. dosa. Besides their Head Office in Bombay.

they had once trained Raja to study the consumer behaviour and the apathy of these .

in all metropolitan cities. Mielson's rating etc. Head of Market Research Division of Raja Consultants.Cases in Marketing Management consumers towards the so called 'instant foods'. The other questions as to who should be his clients. then. he studied the working of such panels as Gallop Poll. The characteristics of this sample were to be used for predicting the behaviour of population. fees they will be willing to pay etc. who would be interested in the services of consumer panel. Mehta was seriously thinking of setting up of such consumer panel. Dr. . Dr. however. Mr. were relatively minor.A.Mehta.S. He had also studied the working of Operations Research Group and their model of retail shop audit. to begin with.. However. The main question facing him was how to come up with a consumer sample which could be substantially considered as a representative of the population. it was easier said than done. Virani had suggested the setting up of consumer panel and making a regular use of that. Mehta with his wide experience in market research was certainly not unaware of the use of consumer panels. During his few visits to U. gave only quantitative data and no qualitative model was in operation in the country which could explain the consumer behaviour. However while talking with Mr. The exercise remained inconclusive for some reason or the other. This model. first in Mumbai and. He felt that there is a great potential in this idea and it could be made as ORG model on retail shop auditing.

felt that research needs to be conducted on this issue. 45 AIR . however. The Senior Manager.INDIA Objectives After going through this case. One Manager came up with a bright idea to provide telephone facilities on board the aircraft. Other Managers got excited about the idea and felt that it should be implemented as a Unique Selling Feature. you will be able to : • • • identify AI Manager's "Unique Selling Feature" idea state "In-flight Telephone" facilities for passengers underline the need for research for correct assessment Air India is constantly looking for newer ways to serve the needs of its passengers.Case No. .

it was decided that biscuits made in different animal shapes were prepared and the Company carried out a test marketing exercise in Pune. This was possible mainly due to the high quality of the product. The Company has always adopted innovative methods in bringing out newer varieties to cater to the changing tastes of the market. besides Pune. The Management of Tasty Biscuits decided to develop special biscuits to cater to this market segment. Pune are in the field of biscuits for the past few years. indicated that out of the total consumption of biscuits. Delhi and Calcutta. for this purpose. The results for first six months were encouraging. you will be able to : • • • identify the novel features of Company's new product launch state accent on children.Case No. they have constantly been increasing their sales. Chennai. However. After due deliberations. a good distribution network and creative promotion policy. 46 TASTY BISCUITS Objectives After going through this case. declining sales Tasty Biscuits. The price right from the beginning was 10% higher than the other types of biscuits of the same weight. A study made on biscuit industry by the 'Indian Biscuits Manufacturers Association. Majority of the sample-consumers showed their interest and informed that their children have liked the product. In the twelth month. product varieties and Test Marketing analyse poor segment-response. from the seventh month onwards. the total sales of the new range were reported only at 25% of the peak reached. . the Company introduced this range of biscuits in four metropolitan cities of Mumbai. the sales started declining. A sample size of 200 was selected. almost 21 % is consumed by children below the age of 11. With considerable publicity. During this period. The quality was maintained.

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. in eighties. However. despite massive efforts contrast its failure with success story of Maggi Noodles Hindustan Lever Ltd. which proved to be a roaring success.Case No. had entered the processed-food-market (PFM) in the early sixties with a unique product called 'Hima Peas'. . Nestle entered the processed food market with Maggi Noodles. 47 HINDUSTAN LEVER LTD. The product was launched with a lot of funfare and publicity. in spite of all the promotional activities and advertising campaigns the product was a failure and HLL was forced to withdraw the product from the market. Objectives After going through this case. which was a ready-to-use Peas available round the year. you will be able to : • • • find MNC entry in processed-food-market with Hima Peas recognise product failure. However.

Case No. 48
ROSHNI LAMPS MAKERS LTD.
Objectives

After going through this case, you will be able to : • • • find lamp-maker: planning "electronic ballast" based lamps recognise product-features : Savings in consumption and efficiency underline Market Research plans: Potential threat by CF tubes

Roshni Lamp Makers Ltd. (RLML) would like to introduce an electronic ballast for fluorescent lamps in this direction. In fluorescent lighting, a ballast and starter are essential for starting and running the lamp. The electronic ballast virtually eliminates this loss. The normal ballast consumes 12 watts power, the electronic ballast entails a loss of 2 to 3 watts. The energy consumption is, thus, reduced. The efficiency of lamp also goes up by 7 to 8 percent. The tube-life increases to about 2500 hours. The tube also does not have a flicker start. All this leads to a saving of Rs.450 during the life of the tube. Also the electronic ballast is useful in areas where voltage fluctuations are high and the tube fuses out in 6 to 8 months. RLML would like to conduct a Market Research study to evaluate the new product opportunities that an electronic ballast offers. The organised sector accounts for 75 million fluorescent lamps production. The industry sources estimate that in the next five years, about 30 to 40 percent of the lamps will have electronic ballast. However, a potential threat is offered by the new compact fluorescent tube (CFT) introduced in the market but it has a high cost of installation compared to an electronic ballast fitted fluorescent tube. The presence of an electronic ballast would increase the price of fluorescent tube by Rs.200 or so.

Case No. 49
RAY LTD.
Objectives

After going through this case, you will be able to : • • • • find firm's diversification into production and marketing of chocolates state Market Research findings and Test Marketing response analyse launch strategies and product features identify product failure causes and of consumers' negative response

Ray Ltd. was a reputed consumer product marketing organisation with branches throughout India. Neer, the Marketing Director of the Company made his proposal to Vithal, the Managing Director, for diversification into the manufacture and marketing of chocolates. The project involved considerable capital investment as well as high pressure advertising. Neer presented full details of the market potential, competitor's activities and market share expectations of the Company. Moon and Co., a leading market research organisation did the test marketing of the Company's chocolates in early winter in the metropolitan cities and reported the results, which were quite encouraging. Neer was very much impressed about the product's viability and the project was duly approved by him. The Company decided to introduce milk chocolates of three sizes in the market under the name 'Super' to be followed by a series of other chocolates. The basic formulation of 'Super' was different from that of 'Crystal' the market leader. The packaing of 'Super' was attractive and novel and held edge over 'Crystal'. The price too was competitive. The initial launching of 'Duper' milk chocolates was done on all India basis during early summer. Heavy advertising support with the help of various media with children and students as target audience was given. All these created a positive product image, resulting in tremendous consumer awareness.

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The sales were quite encouraging in the first month of the launch . In the subsequent months, however, there were frequent complaints of melting of chocolates at the retail outlets as well as packaging defects. The consumer off-take was badly affected. A detailed investigation by Neer revealed that the product formula was not suitable under the tropical conditions and the packaging has to be modified to fully protect the product. Due to these, the introduction of further varieties of chocolates also got delayed considerably.

Case No. 50
ELEVATOR GRANT
Objectives

After going through this case, you will be able to : • • explain Elevator Grant's plans for India. relate entry in Indian Market : as linked to Market Research.

A world famous Elevator Grant with second largest market share in global market wishes to enter the Indian Market. Market Research for elevators in India is considered as a pre-requisite by the Company, prior to its entry.

Case No. 51
AIR COOL INDIA LTD.
Objectives

After going through this case, you will be able to : • • • • find firm's diversification : from "Fans" to "Air Coolers" explain wrong Test Marketing period : proving positive results. recognise material shortages: delay in all-India launch. analyse design and manufacturing snags: cause for non-acceptance by customers.

Air Cool India Ltd. are the pioneers and leaders in electric fans manufacturing in India. As a part of their diversification plan, they decide to manufacture Air Coolers. The manufacturing plant of Air Cool is in Mumbai. They decide to test-market the product in Mumbai, mainly to see the performance of the product. Mumbai is chosen as R & D team is located in Mumbai and can exert better control on test-marketing activity. Test-marketing is done for two months i.e. December and January. Results come out to be positive. Based on these, they decide for an all-India launch in March. All India launch gets delayed to April due to raw material shortages. Dealers give overwhelming response to the launch. Company faces complaints within one week of the launch, the complaints which they had not visualised during the test-marketing. Number of complaints start rising and dealers find it difficult to handle the irate customers. Some of the dealers take back the cooler and return money to customers to save their goodwill. Confused Design Department of Air Cool, acts, but dealers say "Midmay is too late".

Case No. 52
ROTOMATIC ELECTRONICS
Objectives
After going through this case, you will be able to : • • • • find a firm: specialising in ''Magnetic Disc Drives''. recognise unique product features. underline market leadership plans : through diversification. justify achievement: through new "Single Board Computer".

Rotomatic Electronics was a small company with product-lines in accessories for medium to large computers. The Company specialised in the manufacture and sale of magnetic disc drives, a complex product requiring extensive electric controls. As the product involved stringent compliances, it attracts high unit cost in meeting the customer satisfaction. Rotomatic's business in the computer industry was highly competitive. Many bigger companies manufactured their own magnetic disc drives and there were also quite a large number of small manufacturers who had entered the field, recently. Rotomatic's disc drives offered large capacity and high speed and could interface with any existing computers. The company could expand its operations due to attractive features and flexibility. However, as the Company, not occupying leadership position in the market, had to constantly come up with innovations to increase sales. In order to attain more corporate ability, the management decided to diversify into new product areas. They asked the R & D Department to design a single board efficient computer. Following six months of hard work, the R & D Department gave the prototype.

Case No. 53
SHREE GANESH DETERGENTS
Objectives After going through this case, you will be able to : • • • • find a chemical engineer-turned-entrepreneur develops detergent. analyse his market-entry, product and position amidst competitors. identify his weaknesses: lack of knowledge about marketing strategies. recognise need for marketing consultant's help.

"I always thought that innovating an excellent product would be key to success in business, but looks it's not beginning at all." These words of Mr. Sachin Acharya were a typical reflection of his mood, since last so many weeks. Immediately after completing his degree in Chemical Engineering, Mr. Acharya concentrated all his energies in developing a Detergent that would be better in quality, cheaper in price and less harmful to the hands. He was also successful in adding a pleasant perfume that would stay on the clothes giving a fresh feeling to the wearer. Confident of his technical abilities, Mr. Acharya never had a bit of doubt about achieving success in market. The Detergent Market almost being monopolised by a multinational and the remaining small demand shared by several small manufacturers having stiff competition, he decided to concentrate only on the Pune city to start with and formed a Company under the name Shree Ganesh Detergents. He developed the detergents in two shades. The production cost of blue shade being Rs. 25 per kg while light yellow shade cost him Rs. 20 per kg. While all the characteristics of the two varieties were absolutely identical, he felt, despite the sufficient consumer education achieved over the years, the consumer will be more receptive to the blue shade which

Acharya had to consider what different sales outlets he should use to market his product in the city. 36 per kg to traders and Rs. however. Acharya wondered how long it would take before he could really start marketing his product. wondered whether they would be prepared to pay the difference in cost for that. Second problem that Mr. He realised that a proper distribution arrangement would be the cornerstone of his marketing success. thus. . each or in a powder form. Faced with such numerous problems Mr. Acharya also had decided the type of advertising he should float and other promotional programmes he should adopt. 38 per kg to consumer and yellow at Rs. felt that he would be able to offer the blue variety at Rs. He also wondered whether it would be worthwhile appointing a consultant or trying to test marketing. Mr. Acharya was facing was to decide whether to market the detergent in soap cakes of 200 gms. Mr. 25 to trader and Rs. Mr. 41 per kg to consumers in blue powder form. Next. 32 per kg to trader and Rs. The competing brand of multinational company was being sold at Rs. This decision was further linked with the problem of deciding suitable packaging for powder or wrapper for the soap. 30 per kg to consumer.Cases in Marketing Management gives an impression of cleanliness rather than the yellow. He also wondered what colour the packaging should have. He. Acharya expected around 25% profit on cost and.

since its inception in 1965. is a Rs. Market-probe initially told that Bangalore showed greater buying intention even though Bangalore customers had a better modern mindset than Allahabad. for whose market research. 54 HEALTH PRODUCTS LTD. The Company. was a worried man with a market-probe.Case No. has been selling laundry and detergent brands traditional balms and cough drops (known in herbal base). Objectives After going through this case. 500 crore company. . Health Products Ltd. Mr. services were hired for studying awareness level and perceptions of new herbal addition 'Nat Potion' to combat cold and cough. Vivek Malhotra. you will be able to : • • • find a new herbal-based product planned for launch. identify causes of differing responses. He was shocked at the differing consumer responses to Nat Potion at Allahabad and Bangalore. Nat Potion was supposed to have provided instant relief from cold and or a cough. assess consumer awareness level and perceptions through product-probe. its Branch Manager.

Vijay Kumar had built up his small electronic-control-system business during the last five years. recognise its development of AGDOD system. had recently adopted some of the equipments produced by his firm to make an automatic-garage-door-opening-device (AGDOD). The engineer had seen a similar device in use in U. passed through a beam located on the garage forecourt. The idea. fitted to the garage door. One of Mr. you will be able to : • • • • find a small firm producing electronic devices.) in response to customer's requests. Vijay kumar's engineers. explain firm's decision for marketing consultant's services. 55 ELECTRONIC CONTROL DEVICE Objectives After going through this case. fitted the equipment in their own garages and cars and the system seemed to work very well. A) Why is Case Study Method is important in marketing management education? B) Read the following case and answer the questions given at the end. which contained a small electronic package. There was little in-house original research done as business mainly concerned with the production of small-control-devices (automatic time switches clocks etc. Vijay kumar and the Engineer had. during his visit to a number of small electronic companies on a fact finding tour some months ago. S. . identify AGDOD system's market potential. basically. a switch was activated in a dooropening-mechanism. Mr. Mr. however. both. was that when a vehicle. He was handling subcontract work for Government departments and large electronic companies. A.Case No.

Cases in Marketing Management Mr. therefore. . He. decided to invite a firm of marketing consultants to advise him regarding sale of this product. Vijay kumar was anxious about the follow up of this idea and was prepared to incur limited expenditure on developing the market.

The ABC. 1200 crores and is said to be growing @ 5% annually. it is 12 bottles. ABC has over 60% of the total domestic market with 60 franchise bottling plants in the country. The per neighbouring capita consumption of soft drinks in India barely works out to 3 bottles. recently. . recognise export potential for Indian brands. lemon 25% Orange 10% and others 15%. while in Bangladesh. CCA an international brand leader.e. Rs.A MAJOR BEVERAGES COMPANY Objectives After going through this case. With the enunciation of liberalization of economic policies by the Government of India. Under the negotiated terms. The total market for soft drinks in India is estimated at 120 million cases (one case contains 24 bottles) i. a major beverage company in India. negotiated a mutually profitable proposal accruing strategic marketing advantages for their products with CCA an international brand leader of soft drinks. a large number of multinational companies are re-looking at India as the star market for their products. will market ABC brands alongwith their international brands in the domestic as well as the world market.Case No. you will be able to : • • • underline advantages of strategic alliance with MNC analyse business growth under new tie-up. 56 ABC . Product-wise contribution to sales is Cola 30%.

Rajendra Kulkarni. 6. do no harm to the fabric. prices and wholesaler commission. 4.the blue shade costing Rs. at the same time. a graduate with innovative mind and creative abilities.50 per kg and 10% commission was offered to wholesalers on these prices. has developed a detergent which could wash clothes better and.00 per kg for ivory shade powder to consumers. 5. 57 DETERGENTS .00 per kg and ivory shade Rs. 9.RAJENDRA KULKARNI Objectives After going through this case. 7. analyse his price-structure with MNC's. The detergent is developed in two colours.50 per kg for blue shade powder and Rs. you will be able to : • • • find a graduate-entrepreneur in detergent business. respectively. Competing brands of reputed multinationals were sold to the consumers in the range of Rs. underline his products.00 per kg.00 to 9. Both the varieties are absolutely identical in propertiesexcept the shades.Case No. . Rajendra was ready to offer 20% commission to wholesalers on the selling price of Rs.

e. you will be able to : • • • • find Biscuit Company planning a product launch identify animal shaped biscuits for children-segment underline Marketing Manager's anxiety about consumer acceptance recognise Marketing Consultant's guidance M/s Ajanta Biscuits Ltd. Glucose. . They market their product in Karnataka. is still anxious. The Marketing Manager. they sell three types i.Case No. They are planning to introduce a novelty in the children-segment of the biscuit market. 58 AJANTA BISCUITS Objectives After going through this case. though optimistic of the innovative appeal of proposed animal shaped biscuits for youngsters. is a Bangalore-based biscuit company. At present. Salted and Plain.

59 THE COLD ICE-CREAM COMPANY Objectives After going through this case. The product would be test marketed in Nagpur. A larger proportion would buy the product at full price at least once during the test period. when compared to those not receiving the coupon.22/-. the Company wishes to evaluate the effectiveness of a "Rs.Case No.6/. The marketing team of the Company believes that the use of coupon would result in greater brand awareness and a larger product trial among those receiving the coupon.off " coupon-the dessert would be priced at Rs. you will be able to : • • • find Ice-cream firm planning a product launch recognise frozen-fruit-based dessert's unique features identify a special discount offer during Test-Marketing period The Cold Ice-Cream Company is planning a test-market for the new frozen-fruit-based dessert which is distinct from an ice-cream-based-dessert. when compared to those not receiving the coupon. . During the test-market.

b) c) The study revealed following facts: 1) Market for prickly heat powder was growing .. a) To study the potential for such product.. bath soap for children. as this was a new concept in India at that time. a multinational giant in the field of health care products has a fairly successful product mix. before launching the brand. To study the satisfaction level of consumers of Thomson and Thomson baby powder. diapers. The Product Manager thought it fit to carry out a Market Research. baby powder. The Company developed a prickly heat powder (PHP) in early 90's. while two products were considered similar.THOM SON AND THOM SON Objectives After going through this case. analyse and compare Company's objectives with MR findings underline circumstances leading to product failure. Thomson and Thomson. To study the awareness and reputation that the Thomson and Thomson brand enjoyed. etc. A professional marketing research firm was assigned the task with clearly laid down objectives. as the Product Manager was thinking of extension of this brand. consisting of ready made dressing. state the need for Market Research with planned objectives. viz. you will be able to : • • • • explain prickly heat powder launch plans by MNC.

from the third month. The Product Manager was optimistic till summer 1991. The product was channelised through existing wholesalers and retailed. Hyderabad. safe started declining. But when situation kept on deteriorating even in summer 1991. Thomson and Thomson It was decided to position this product as another high quality product from Thomson and Thomson''. only 10% below the target. Nagpur and Delhi in the month of January 1990.Cases in Maturing Alanagenient 2) 3) Market was virtually dominated by Glaxo's Nycil Brand. Marketing policies of Nycil were also studied. Madras. Calcutta. 1990 and first two months sales were satisfactory. Delhi and Madras. 4) Hotisewives were fairty satisfied with Thomson and thomson baby powder specially its odour was liked by them. Company also went for Test Marketing in Nagpur. Company had on option but to think of withdrawing product from the market . However. it was decided to launch the product on All-India-basis wilh die following specifications: Chemical composition similar to Nycil Odour similar to Thomson and Thomson baby powder Packaging similar to its existing powders Sizes similar to Nycil Brand. With a view to encash on the brand equity of Thomson and Thomson'. the ad and promotional campaigns were also centered around the image of Thomson and Thomson. The survey was earned out in Bombay. Thomson and Thomson enjoyed a high level of brand awareness and reputation. Before the national launch. retail off-take was recorded in these 3 cities. As the results ware encouraging. for one mouth. Product came into the market on March 10.

as late as six months to one year. it is. this does not always happen. Obviously. However. Some of their models use pictures of the forthcoming popular Hindi movies. This is with regard to product differentiation. For this. is the market leader in this field with almost 70% market share. Presently. should the sale of Vacuum Flasks go down too? Ideally. Peacock Vacuum Flask Co. If CHINAGATE or OIL SE flops. you will be able to : • • • explain product differentiation with film-star picture links recognise potential risks to sales with fluctuating movie popularity underline sales in rural areas with dependence on release schedules. the Company has to pay royalty to the producer.350. .of-the-art plant with Japanese collaboration in 1965. is facing a peculiar problem.VACUUM FLASKS Objectives After going through this case. Can you imagine a situation wherein the sale of Vacuum Flasks was dependent on the success or failure of a movie? Almost unbelievable! But this precisely was the problem faced by Peacock Vacuum Flasks of Chandigarh. The Company.45 to Rs. For this reason also. they want to catch up with the popularity of the movie to boost their sales. they end with a huge inventory. sometimes. Since the expiry of the collaboration agreement they have. For example. however. by the time the movie reaches the rural areas. the particular brand fails to pickup. If the movie flops. nobody can establish a relation between the two. They established a state. Also. they are having different models and sizes whose price ranges from Rs. through their own R&D. come out with new models at regular intervals and developed exports as well.

analyse risks with help from marketing consultants. So the family decided to open a new business line for him and acquired know-how to manufacture diesel generator sets from Italy. they were operating as distributors of leading automobiles. they realised the scope for marketing portable generator sets running on diesel. Instant Electrics have plans to capture 30% market share by that time. INSTANT ELECTRICS Objectives After going through this case. The elder son in their family had done graduation in Electrical Engineering with specialisation in design. This product is in competition with existing petrol/ kerosene run gensets in the market upto 3KVA. new line and of substantial risk.Case No. they also acquired an agency for portable diesel pumpsets. . instead of conventional fuel like petrol. Madhya Pradesh. The estimated market size at present is about 15000 units which is expected to be around 20000 units per annum in next 3 years. Prototypes were made. There are three major competitors. Earlier. they have decided to seek a help of marketing consultants. 62 M/S. They set up a medium scale industry with a production plan of 1200 units per year to start with and to reach the target to manufacture 6000 units per annum in the following 3 years. However. M/s. they gained the experience in running a large fully equipped workshop. While serving the customers. recognise "pumpsets-to-diesel generator sets" problems identify areas of competition based by 3 KVA players. In view of the recession in automobile field. situated at Indore. M/s. being a new product. Instant Electrics are medium-scale-industry. successfully tested and the results were comparable to the best in the market (both Imported diesel run and run on petrol). you will be able to : • • • • • find a unique journey of an agent-turned-industrialist explain how pumpsets agency led to an Italian tie-up. In the course of business.

227 .

His R & D team had developed a soap with an anti-infection ingredient of therapeutic value (TV) which Ranganathan was convinced. As the Company was confronted by resource constraints. However. it had taken several years before the Company was able to attain that enviable position. Shri Krishnan Ranganathan.Case No. and a marketing team ill-suited to launch an all-new brand. you will be able to : • • • • Find a firm developing soap with therapeutic value. Since Company's inception in 1978. Ranganathan found himself in a dilemma. Analyse if "TV" would suit" B and CC" platform for brand extension. should outperform Company's Star Brand. Glow was slotted through six brand extensions in beauty and complexion care segment which accounted for a turnover of Rs. Recognise CEO's resistance to brand extension. Glow. was fighting a loosing battle. rivals competing fiercely. 250 crores. But his CEO. . till 1994. Company had adopted the beauty and complexion care (B and CC) Platform for Glow's marketing and advertising right from the beginning. Glow! "it cares for you" became catchy campaign-making it synonymous with beauty and complexion care. Manubhai Shah felt that extension of a brand that had become synonymous with beauty into the health-soap segment would do more harm than good. 63 SHRI KRISHNAN RANGANATHAN Objectives After going through this case. Identify firm's internal problems and competitive scenario. however. the Vice-President of Sales and Marketing at Angar Ltd.

9%. Tabeffer India also hired the services of product profile.1 % the soft-drink market though a low volume in comparison was far more impressive in terms of value Rs.D. M. a leading market research firm. while the concentrates segment was stagnant.2%.Case No. Company had worked out a third-party contract distribution arrangement with Gretas which is also distributing soaps. The initial research revealed the following facts: a) The consumption pattern in volumes was: filter-coffee: 3. sugaring and stirring and disposing of the package unlike tetrapack. biscuits. that he had commissioned. analyse product strengths and Market Research findings. Sounitro Gosh. . recognise high risks in entering fiercely competitive soft-drink market. instant coffee 1. The product had two overriding advantages. malted drinks 2. indicated the consumers were not only interested in the concept. It didn't have the inconvenience of mixing.8%. breaking into soft-drinks market would not be simple. Tabeffer India. but also liked the flavours in which Lorino had been test-marketed. underline Company's plans for building brand image of the product. and soft-drinks 1. a tablet based soft drink. However. and hair-creams. The results of the market research. 1300 crore per annum. 64 TABEFFER INDIA Objectives After going through this case. however. branded Lorino. you will be able to : • • • • find Company's "tablet-based soft drink" Test Marketing results encouraging. the aerated drinks segment was dominated by global players with huge ad spends. felt that his company had developed a product with the potential to be a winner.

Life is a 100-year old global brand with a brand image built around fun. It's cloudy appearance was well received. 3. 1100crores. Tetrapacks have seen the largest number of failures. Prime is a close rival of life in several markets around the world. the six broad conclusions were analyzed by the company.60 crore. ASD brands have enormous ad spends. tetrapacks Rs. the concentrates market has defied all attempts of expansion. 6.Cases in Marketing Management b) Aerated Soft Drinks (or ASDs) accounted for Rs. ASDs consisted of Colas (70%). c) d) e) Later it projected an 'anytime-drink' image highlighting the occasion-brand association. Rs. 4. Prime and Vic. Brands targeting several demographic and psychographic segments have not been successful. youth and group socialising. In the lemon segment. Misty was the single largest selling brand in the 70's and 80's which initially used its hygienic and thirst quenching values. Lemon drink (20%). Thus. The brand image during the launch will be vital. 1. 5. with its macho image it had tried to position directly against Prime.25 crore. concentrates Rs. 150 crores. Vic had a near-monopoly position. branded squashes. For five years. . but also single-largest success. Global brands have been successful only in the Cola segment. Orange( 10%) There are three brands in the Cola segment of ASD: Life. 2. with a 60% share of Cola market.

to 982 cars.546 cars.3 litre petrol version of the Ford Escort was underpowered. • Not many could have found fault with the launch of Ford's launched vehicle Escort. Ford's sales fell from 2. cocking impressive sales of 2. If it is any indication. you will be able to : • • • • find MFIL's new "Escort" taking severe beating from Honda City. recognise that "Zetec" launch strategy correction did not change market perceptions. CEO John Parker's team managed to roll out vehicle from makeshift plant at Nasik. identify consumer preferences for diesel versions.Case No. MFIL's Vice-President for Marketing and Sales is that the sales dip is despite the recent launch of Ford's much-hyped Zetec. (MFIL). What's perhaps more worrying for Jim Johnston.6 valve engine was meant to correct the market perception that the 1. it was a dream launch. Clearly. may well be interrupted. the strategy did not work. during the same period last year. Ford's nemesis has been Honda City.720 cars. Mahindra Ford India Ltd. Ford had clocked bookings for nearly 60. so far. during the same period. analyse the classical hedging strategy for petrol and diesel versions. Sales were impressive too! By the end of 1997. .000 cars. 65 DREAM LAUNCH OF FORD ESCORT Objectives After going through this case. which has bitten into its market share. Within one year. The Zetec powered by a 1. underline special discount offer on the eve of Independence Day celebrations for petrol version "Escorts". But the smooth passage. In many ways. between April-June 1998.

it managed to push out nearly 400 cars. But word soon got around that the petrol version was underpowered. instead of using a line extension like Zetec to correct consumer perception? The injury is still out on the one. now. As a launch strategy. however. As a launch pad vehicle. the benchmark car. The advice to launch a diesel version. The 1300CC petrol version was pitched against the Esteem. It launched four options on the Ford Escort. Parker then had to use the occasion of Independence Day celebrations to introduce a cleverly masked discount offer. mostly the petrol version. expected from Zetec's smaller cousin Fiesta.Cases in Marketing Management In some respects. But the market is yet to respond to the offering. MFIL. had petrol cars piling up at the Nasik plant. petrol and diesel versions with standard and deluxe versions. couldn't Ford consolidate its diesel models. Given obvious consumer preferences in India towards the diesel model.One Lakh from the price tag. With 70 percent of buyers demanding diesel versions. in the category. For the moment in his office at Anna Salai in Chennai. notwithstanding the success of its diesel version. Having overcome the initial hurdles. Placing freedom badges and lopping off Rs. the diesel car may have prevented the JV from suffering a virtual wipeout. Parker's next target was to correct the negative connotations of its petrol version. The greenbacks are. Ford's product selection has largely been at fault. The Zetec was supposed to do the trick. came from his partners. John Parker clearly won't be an amused man as he pores over figures of Honda City's surging volumes . Escort could not simply afford to leave Ford with a stained reputation. both. Ford had chosen a classical hedging strategy. The Escort came in. In the end. says Parker.

underline "Vikas 1000" improving sales-AAL's earlier version. 'Vriddhi 2000' will be twice as costly as the present variety. However. 66 VRIDDHI 2000 Objectives After going through this case.Case No. fear that 'Vriddhi 2000' may cannibalise 'Vikas 1000. . Directors of Ashok Agro Ltd. since it was launched three years ago. 'Vriddhi 2000' is the new seed variety of rice.' 'Vikas 1000' is in the growth stage of its PLC.After five years of research in laboratory and in paddy fields. 'Vikas 1000' being marketed by Ashok Agro Ltd. argue. developed by Ashok Agro Ltd (AAL). new variety may kill demand level of "Vikas 1000". significantly the crop yield of 'Vriddhi 2000' expected to be thrice as 'Vikas 1000. recognise its features in terms of cost and yield.' 'Vikas 1000' sales have been consistently improving. you will be able to : • • • • find "Vriddhi 2000" a new rice seed variety developed by AAL.

Case No. and optical films. 3M has a long history of innovation.000 products. first synthetic running track . since 1904 identify its results through achievements in Sales and Patents recognise corporate environment. in its 99-year history Here is a brief timeline: 1925-Scotch masking tape 1930-Scotch transparent tape 1939-First reflective traffic sign 1956-Scotchgard fabric protector 1962-Tartan Track. facilitating new discoveries analyse 3M's falling Sales in 1990s and restructured plans Minnesota Mining and Manufacturing (3M) fosters a culture of innovation and improvisation evident in its very beginnings. Today. Companies each year in patents received. In addition to inventing sandpaper. Each year. 3M makes more than 60. including sandpaper. but they turned the leftover grit and wastage into a revolutionary new product: sandpaper. and the Company earns about 35 percent of revenues from products introduced within the past five years. computer disks.S. you will be able to : • • • • underline 3M's" Culture of Innovation" philosophy. which is a healthy portion of its annual $16. contact lenses. The Company regularly ranks among the top U. the Company's directors were faced with a failed mining operation. In 1904. 3M have an annual R&D budget of $1 billion. 67 INNOVATION AND IMPROVISATION Objectives After going through this case. 3M launches scores of new products. as well as adhesives.7 billion in sales. the Company has developed numerous product innovations.

he vowed he would continue to improve the Company's bottom line-while keeping its culture of innovation intact. Its slogan is "You have to kiss a lot of frogs to find a prince". 3M struggled as sales stalled and profits fell. The company's "15 percent rule" allow all employees to spend up to 15 percent of their time working on projects of personal interest. Due to these moves. Each promising new idea is assigned to a multidisciplinary venture team headed by an "executive champion. The following are some tactics 3M uses to ensures its culture remains focused on innovation: 3M encourage everyone. sales or $4 million in worldwide sales within three years of commercial introduction. 3M hands out its Golden Step awards each year to the venture teams whose new products earned more than $2 million in U. to become "product champions". In the late 1990s. masking tape.S. and the Company's micro replication technology were developed because of 15 percent rule activities. not just engineers. in part.Cases in Marketing Management 1979-Thinsulate thermal insulation 1980-Post-it notes 1985-First re-fastening diaper tape 1995-First non-chlorofluorocarbon aerosol inhaler 2000-First laminating products that do not require heat 3M is able to consistently produce innovations. . Products such as Post-it Notes. and cut its work-force. because the Company promotes a corporate environment that facilitates new discoveries." 3M accepts some failures and users failed products as opportunities to learn how to make products that work. when 3M named GE executive James McNerney its new Chairman and CEO that year. shed several proprietary non-core businesses. The Company restructured. 3M had record sales and income in 2000.

Kamlesh and Laltu have not really understood what Ajay had told them. you will be able to : • • • find two partners in mandap-contract business recognise their one-type. Citizens of the town. living in a small town bordering Surat city. 68 KAMLESH AND LALTU Objectives After going through this case. They are partners in a Mandap (pandal) contracting business. are mostly engaged in diamond cutting industry and most of them are quite well-to-do. they have only one-type and one-size of 'mandap'.Case No. Kamlesh and Laltu supply mandaps on all such occasions. All the family functions. one-size mandap limitations analyse "would be expert consultant" friend's success formula Kamlesh and Laltu are two school drop-outs and friends. However. who has passed MBA with marketing elective. Besides. a school cham. Ajay said "Target marketing and product differentiation will do the magic to your business. as well as nearby villages. and recommended a success-formula to them. as also the social occasions are celebrated with zest. Ajay. recently met Kamlesh and Laltu. ." Though impressed. the citizens are religious in nature.

For many years. it's sales have declined steadily. once. Scripto's mechanical pencils. Meanwhile. are high. With the introduction of its Easy Roller pens. you will be able to : • • • find a 55-year-old firm's continued losses in recent years recognise firm's revitalised strategies : stretched to unmanageable limits analyse restructured product-lines to regain market share Scripto has been marketing pens and pencils for 55 years. from one model to four. It recently lowered the number of its ballpoint pen models from nearly a dozen to three. ballpoint pens and cigarette lighters had a good market share. Scripto then tried to meet or undersell Bic and Paper Mate by bringing out new items. the fastest-growing segment of the pencil market. two big competitors. Over 20 years ago. The hopes to command good market-share soon. however. brought out new writing products. the competition is tough with many well-known brands in the field. 69 SCRIPTO Objectives After going through this case. It has increased its ultra-thin-lead line. Scripto had entered into unrelated product. Scirpto has entered the rapidly growing roller pen market. It was.areas like ceramics. this action resulted in more similar products and a broader line than the Company could handle. Scripto has not made profits. In recent years. the best selling brand. .Case No. However. It also dropped two un-profitable lines. refillable lighters and porous-point pens. However. Scripto still sees mechanical pencils as one major area for future growth. while sales volume in the industry has increased in the last decade. Bic and Paper Mate.

unpacked. He should also be selling his products in a proper packing. indeed. His bakery is located by the riverside on outskirts of the city with 10.00. impressed with this idea and has cultivated special interest in this suggestion. toast. bread. cake. you will be able to : • • • • find a baker with traditional baking techniques. underline someone's suggestion: for branding and packing the items. justify the acceptance of the idea. bun.000 population. Someone strongly suggested that he should choose a name for his products.Case No. pastries. . All these are non-branded products. 'butter' and 'kharee'. Raghunath is. recognise his products as non-branded. He has a traditional brick oven in which he roasts and bakes his preparations viz. Raghunath is a small-time baker. but he is worried about the possible increase in the cost. though worried about increase in costs. 70 RAGHUNATH Objectives After going through this case.

recognise his services to other poultry-operators. Secretly. sells the products to the consumers. like other poultry-keepers. identify poultry-owner' s working-philosophy : keep prices competitive and expand market base. increased profits. Besides. But the Co-operative Society will not agree. All of them. Being socially minded. you will be able to : • • • • • find a poultry-owner with modern management practices. Sarif knows that by means of competitive pricing. the market can be expanded. He employs all the efficient and modern techniques of poultrykeeping in his business. The Co-operative is governed by members whose focus is on profit-maximization. Saif. He wonders if they will pressurize the 'Co-operative' in accepting . he has further trained almost all poultryoperators in the Taluka. now. Saif is curious to know what the local 'Grahak Manch' (Consumer's Forum) will be doing about this. whereas.Case No. identify benefits to Society: reduction in costs. through its retail outlets. All the members have to sell their produce to the Co-operative Society which. should result in reduction in price. Saif knows that reduction in costs. Saif runs a medium-size poultry in a Taluka place. use hygienic and economic methods of poultrymanagement. subsidies on poultry-feed and medicines have resulted in the reduction in their costs. in turn. 71 SAIF RUNS Objectives After going through this case. explain Society-members' greed for profit maximization. He had completed a certificate course in Poultry and Hatchery. is a member of Taluka Poultry Co-operative Society.

.Cases in Marketing Management lower profits. it will be good for the poultry -keepers. Saif believes that if such a thing happens.

Though the Company had a German back-up. . it faced certain problems in the market. already commanding the market recognise competitor's price-increase decision analyse TL's counter strategy to beat impending price-war threats and challenges by competitor Tushar Laboratories (TL) have been in the Pharmaceuticals Industry for four decades. ESI. The Marketing Department is headed by an experienced Manager. in the initial stages.Case No. who supervised a team of 25 field representatives in the Southern States and Orissa. at least ten times bigger and reputed than Tushar Laboratories. qualified personnel and has been supplying bulk requirements to the Government. The Company has a sound manufacturing infrastructure. The Company's Chairman toured Germany in the recent past and struck a deal with his German counterpart for the manufacture and marketing of a life-saving drug used extensively in surgery. defence etc. Tushar too had to confront with heavy odds. These problems are: a) A similar product based on indigenous technology was already being marketed in India by a giant company. 72 TUSHAR LABORATORIES Objectives After going through this case. you will be able to : • • • • • find TL's drug manufacturing tie-up with a German counterpart assess TL products' strengths and weaknesses identify TL's problems : arising out of a product. Like all companies entering the market.

Tushar had a certain edge over its giant competitor. Tushar's sales slumped. with the result that the demand situation was very lukewarm and the market was small and expanding slowly.Cases in Marketing Management b) The giant company had not been concentrating on this product. This spell. in Bombay. Even though Tushar was a German collaboration. the unexpected happened. Moreover. however was brief and when giant's products reappeared. Thus. the chemists were able to substitute all the giant's products with Tushar's brand. The giant suddenly revised its price from Rs. However.64 Then. the giant had major sales from Bombay . dame fortune smiled on Tushar's face. the giant's product went out of stock for two months.64 to Rs. while the giant was charging Rs. It so happened that the market for this life-saving product was several fold bigger in Bombay than in any other city. This took Tushar's marketing team by surprise. Though the product was a life-saving one. The Tushar personnel attributed the sudden increase in the price of their competitor to the following reasons: a) The giant wanted to make as much profit as possible by putting up a stiff price. it was faced with the difficult task of marketing the drug because its competitors already enjoyed terrif patronage and brand reputation. particularly starving the other markets in the country. the Indian medical profession was not using it extensively as in Germany or the US because of its high price. the giant company's product had quality problems and was in and out of the market frequently. by projecting foreign name and quality. 108. the latter became popular. Thus. since. the difficulty in assessing the need for the product and the fear about fatal reactions (though nonexistent) However. costly drugs meant better quality.60 per unit. Apart from the fact that it had backing from a German Collaboration. Hence. it was marketing its product at Rs. Being the only alternative brand available. the giant competitor diverted all its stocks to Bombay. Tushar was able to launch the product with success in the Southern States. When Tushar entered the Bombay market.

namely : 1.C ase 72 Tushar L aboratories b) The revision in the retail price of the giant's products would enable the chemists to enjoy a better profit margin and lead them to substitute Tushar prescriptions with the giant's product since the latter enjoyed better brand im age and gave m ore retail margin. . if a m arket is slowly expanding. it will surely disturb the doctors from other parts of the country from using the product. thus. though the Bombay market may not be deterred by the higher price. in fix. Launch a campaign highlighting the advantage of the economy in using Tushar's brand over that of the competitor. The strategy presupposes that the customer may equate the cheaper price with inferior quality since in the pharm aceutical m arket cheaper brands rarely becom e brand leaders. Raise the price of Tushar Lab's product and bring it at par with or som ewhere near the giant's product-Tushar 's product already enjoyed an excellent profit margin and any increase in price. while making the product less affordable. At the same time. M oreover. will add to the kitty of the company. It had to evolve a suitable counter strategy and the options available to them were just two. 2. Tushar's marketing team was. raising the prices may once again retard growth.

10. The fact is that this typewriter model is priced high. fonts but not price • underline that justification for'' quality-price relationship'' is disapproved Suppose you are the Sales Executive of Excel Typewriters Ltd. is dissatisfied with Rs. The customer feels this price is not justified. However.Case No. recognise that customer appreciates unique features. In fact. you will be able to : • • find a firm marketing typewriter: with four fonts. the customer mentioned here. . one of your machines. actually has four letter-styles/ fonts. One of your potential customers tells you that he will be happy to purchase a machine having different letterstyles or fonts. due to the variety of four letter-styles available. This is appreciated by the customer. Objectives After going through this case. 73 EXCEL TYPEWRITERS LTD.000 as price for this machine.

they have steadily built a rapport with major dealers all over the country and have established a bond directly with farmers. They had recently sponsored a joint research project with a nationally reputed laboratory. you will be able to : • • • • find a seed plantation firm promoted by specialists recognise their dealer-network and access to farmers underline joint research output: output within 3 months justify firm's efforts in marketing their achievement without loss of time M/s Sue Seed Plantations (Pvt. They are basically innovator. is now made to flower within % months as a direct fruit of this research. M/s Sue Seed have always believed in "Excellence Through Innovation". . they do not want their new idea fall into rivals hands or waste by not using at all. is promoted and managed by a group of Agriculturists. 74 SUC SEED PLANTATIONS Objectives After going through this case.) Ltd. Knowing this universal dimension of Bamboo plant. while they have consistently played to their strengths and turned out new varieties of crops and seeds every season. As per UNO report. 33% of world population is directly or indirectly dependant for their livelihood on "Bamboo" plant. Over the years. At the same time.manufacturers and not too expert in marketing techniques. The outcome of the flower once in 15/20 years.Case No. Microbiologists and Researchers in applied chemistry. M/s Sue Seed have realised that they have some real "big thing" on their hand.

radio and T. recognise the firm stipulating offer conditions to retailers. you will be able to : • • • find a BJ discount-offer to encash on sales during Sept-December period. after survey. (BJ) manufacturing jams and sources. magazines. the Company decided to float a very attractive discount offer as follows: On purchase of 1 gross bottle. The Company had limited Sales Force and it was not possible for them to cover every district. while those of B J falling.5% cash discount in bill On purchase of 2 gross bottles -12 % cash discount in bill On purchase of 4 gross bottles -26 % cash discount in bill On purchase of 8 gross bottles -55 % cash discount in bill On purchase of 12 gross bottles -70 % cash discount in bill To ensure this scheme to be a grand success. explain piquant situation as B J Managers refusing to take back leftover stocks. • • Benson and Johnson Co. indentify BJ scheme leakage. underline B S Company sales zooming. they planned their advertising campaigns in newspapers.V.. observed that there is maximum consumption of these product during the months of September to December. it was decided that all the wholesalers . To take the advantage of this opportunity. Hence.75 BLUE SHIELD COMPANY Objectives After going through this case. provoking B S competitor in launching a more profitable offer.

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Many of these retailers clearly mentioned to the representative of Benson and Johnson that though the profits are more in Benson products. the Company should take back the stocks and return the money by even deducting the scheme amount. After the season was over. In spite of their telling to the retailers that the company will arrange a special campaign and help to liquidate the stocks. It was also made clear that no stocks will be taken back after December. Blue Shield came to know about the Benson and Johnson scheme. 1. As a result. . When the representatives refused to do so. the company refused. many retailers in the town started telling the field force of Benson and Johnson that as they could not sell the entire stock purchased. Considering the bumper scheme of Benson and Johnson. the retailers persisted to take back the stocks. in reality it was observed in the middle of September that people were demanding the jams and sauces of Blue Shield more. which. It was made clear to all the retailers that they should push these products maximum across the counter.50 free on every bottle purchased.Cases in Marketing Management will be contacted and booked with the large quantities.Rs. many retailers bought substantial bottles. The position of District Managers and Area Sales Managers became very embarrassing in the field. many retailers curtailed their purchases of other equally good moving products. When the competitor. the investment in Blue Shield products is less and yet they get their extra profits. However. the retailers started selling these products. they also declared a scheme to retailers and consumers as follows: For Retailers-1 bottle free on purchase of 11 bottles. the sales position declined in the next quarter. For consumers.

Shakti Fitness Centre provides the following facilities : a) b) c) d) Weight training Aerobic Sauna( steam) bath Ground for jogging (running) . Being an educational centre as well. here.Case No. Shakti Fitness Centre offers an opportunity to the citizens of maintaining good health through physical exercises. Effect of modern living and industrial environment is evident from the increasing number of people suffering from breathing problems. The city has been developing rapidly as an industrial and commercial centre. So is the number of pensioners comfortably settled. 76 SHAKTI FITNESS Objectives After going through this case. you will be able to : • • • • • find a new Health Club (HC) in rapidly growing Pune recognise evils associated with City's industrial growth identify environmental pollution and serious health problems making HC. hypertension and such other disorders. A remarkable percentage of population. a saviour explain HC infrastructure to cater to different age-groups underline HC plans: optimum utilisation of facilities to build up membership strength Shakti Fitness Centre is the new health club in Pune. is either self-employed or having a job with adequate compensation packet. number of students is significantly large.

it offers. It also plans to recruit expert instructors for training the members. It has lot of spare. Manager at Shakti has observed that: i) Young members prefer weight training and aerobics ii) Middle aged people prefer Sauna and Jogging iii) Senior citizens like yoga sessions and diet consultancy iv) Demand for swimming pool is seasonal Shakti Fitness Centre wants to know how to promote its activities. Market Segmentation to generate Promotion Schemes The year-round demand for swimming pool .capacity to take in new members. Shakti has 200 members. Advise them about: a) b) c) d) Possibilities of new schemes combining the various facilities.Cases in Marketing Management e) f) g) h) Yoga Swimming Pool and Diet Consultancy At present.

Mahabaleshwar is also known for strawberry plantations. but occupancy of the lodge-rooms is declining. the neglect of service-standards. known for cool and pleasant climate. bugs and pests in the rooms and of minor damage to the tourist vehicles kept in hotel garage. 'Sapphire' came up in the neighbourhood. over years.Case No. Patronage to the hotel comes from middle and upper middle class. you will be able to : • • • • find HBP in Mahabaleshwar known for excellent service standards. the overall clientele are reduced. business of Black Pearl has been remarkably affected. for its high mountains. deep valleys. however. It seems to be doing well. underline ensuing competition with another hotel coming up in neighbourhood. Even couple of small thefts in the lodge were reported. Recently. leather handicrafts and pure honey. However. lushgreen forests and the Venna Lake. But the Management did not consider these seriously. Hotel Black Pearl has earned a reputation for it's courteous service. Tourist trade is flourishing at this hill-station. There were some murmurs of disapproval about leaking taps and toilets in the lodge. identify Management's continued indifference: results in low occupancy rate. People still crowd at their restaurant. comfortable accommodation and its locational advantage in being situated near a point of great scenic beauty. 77 HOTEL BLACK PEARL Objectives After going through this case. a new hotel. . during the last 5/6 years. indeed. Hotel Black Pearl is located at a scenic hill station Mahabaleshwar in Maharashtra. Repeat customers are plenty. recognise. Since its opening.

they do not know how to handle the aggressive promotion of their rival firm. underline dealer-promotion schemes of competitor HLL to be the prime factor recognise HLL's dealer tours abroad. 78 BAGS AND BAGGAGES LTD. (HLL) a rival company. . dealer-promotion schemes employed by 'Holyday Luggage Ltd. Reason for this is seen to be a very strong.commanding highest sales analyse BBL's confusion in future strategy to handle rival firm's aggressive stance Bags and Baggages Ltd. M/s. is facing a serious setback in the market. Bags and Baggages Ltd. has always preferred to give discounts to the consumers.000 pieces in a year. if they sell 20.Case No. (BBL) a wellknown baggage manufacturing company. besides offering them superior product and service. Now. you will be able to : • • • • find a baggage manufacturing firm BBL suffering setbacks. This company is even offering a week-long trip to Hongkong (for two) to the dealers. Objectives After going through this case.

The membership has been adversely affected. recognise hostile public criticism against inadequate facilities. b) increase the Membership Fee to attract the up market membership c) d) try and hide the fact of deaths at the swimming pool from the public' s notice call the media and the eminent public personalities and convince them that 'deaths' were due to no fault of the Management or it's swimming pool facilities. Public seriously doubts about the facilities at this pool. These are: a) reduce the Membership Fee to attract more members. having its own international grade indoor swimming pool. Their suggestions/ recommendations are not so helpful. explain declining membership resulting in the Fact-Finding Committee's odd suggestions underline a deceitful recommendation at "C" to suppress the facts.Case No. judge Committee's irresponsible plea to absolve the management of genuine death causes. you will be able to : • • • find health club swimming pool reporting deaths last year. . The Management of the Health Club had appointed a Fact-Finding Committee. there were two deaths in this swimming pool. During the last one year. • • You have been appointed as the Marketing Manager of a Health Club. 79 HEALTH-CLUB Objectives After going through this case.

In 1998.making and began to use mail-order channel for its distribution. it started its manufacturing unit at Bhosari in Pune. . recognise his strengths: quality. thus. AR Sons entered into ready-to-assemble furniture. it thought of using Internet for its hallmark of Fast. They built brand equity of its own style. AR Sons. offices. 'The internet plus mail-order delivery could attain popularity". you will be able to : • • • • find an old-furniture-dealer emerges to be a manufacturer. Mr. After five years. | underline his new Corporate Status. quality. Friendly. professionals. is the prediction of its Vice President. analyse his new tools of distribution: mail order and internet. AR Sons soon won in enviable reputation for its commitment. new line and services. Further.Case No. offering furniture at low prices.Marketing. 80 AR SONS Objectives After going through this case. Knowledgeable and Professional service. "AR Sons" made a modest beginning as a dealer for old and used furniture in 1970. service. personnel and differentiation with marketing orientation. shapes and matching needs of large and small families.Sandeep. with variety of designs. service and professional integrity. attained the heights of a big corporate.

Y and Z cities alone. recognise the seriousness and genuine needs. underline the appeal-strategy and background preparation. killing over 5000 and injuring hundreds of thousands of residents in X.Case No.5 temblor struck your State. . A powerful earthquake with the magnitude of 6. 81 DIRECT MAIL' CAMPAIGN Objectives After going through this case. Urgent humanitarian and public support constitute the need of the hour. identify the audience and direct-mail campaign-thrust frequencies. and causing misery and massive destruction of life and property around the ABC District. you will be able to : • • • • assess the situation with down-to-earth approach.

recognise ban on pharma companies' ethical products advertising in "lay press. The idea is outstanding. BabaAmte. The pharmaceutical companies have to do direct marketing by necessity. Mother Teresa. Lata Mangeshkar.Case No. It brings out the circumstances that inspired the magic in each of them It becomes a collector's series. 82 ALCOPHIN Objectives After going through this case. as they cannot advertise ethical products in the "lay" press under various legislative measures. you will be able to : • • • • underline A's strategy to use image-platform of celebrities. • Direct mailing of Alcophin constitutes the legend among antibiotics. S." recall legislative measures imposing restrictions. R. Sunil Gavaskar. The selection covers a wide cross-section of interests. Ten living legends are chosen and include names like Satyajit Ray. well-designed and printed. The most important thing is to make the mundane promotion outstanding with creative ideas. The folders are extremely well-executed. Laxman. They produce fine visual aids and product literature which could either be sent as direct mailing to the medical profession or can be delivered to them through medical representatives. K. Abdul Kalam and Shivaram Karanth. identify "Direct Mail" or "Representatives" as the most ideal medium to carry the drug-message. Each folder deals exclusively with one legend. Oberai came out with a set of 10 four-page folders for Alcophin based on the theme 'The Living Legends'. state outstanding features of "The Living Legends". . Each folder is well-researched. Mr.S.

It is not intrusive at all. . A short write-up on the characteristics of Alcophin and the line 'The legend among antibiotics'. Yet it is effective.Cases in Marketing Management The Centre-Spread has the manufacturer's plug.

83 THE KELLOG COMPANY Objectives After going through this case. The problem was especially prominent in Brazil. they also had no market. Kellog Company. you will be able to : t • • • • find K's market development plans : where neither any competition nor the sales exist. Peter A. The company continued to operate successfully with sales in 1980 amounting to 2.Kellog. underline market creation and sales as the ''follow-up'' strategy. In 1980. Horekens. Although Kellog had no competition in the ready-to-eat cereal market in this region.150. Horekens had to clear a nutritious breakfast habit. Kellog international operations accounted for 38 percent of Kellog company's sales of more then 52. although in . headquartered in Battlecreek. assess market-response and K's long-term strategy : based on nutrition. by far. recognise need for cultivating breakfast habits: fundamental consideration.Case No. Michigan. Marketing Director for Kellog Company was faced with the problem of developing a market for ready-to-eat cereals in the Latin American 'region'. analyse JWT ad agency's campaigns to reach potential consumers.9 million U. flavour and preparation. To create a market and increase sales in this region. The ready-to-eat cereals sales made up the majority of international sales. The Kellog Company produced and marketed a wide variety of convenience foods with ready-to-eat cereals topping the distribution in 130 countries.K. sales in the ready-to-eat cereal market continued to increase. Internationally. Kellog's largest market.S Dollars.0 billion. In 1980. was founded in 1906 by W. Latin Americans did not eat breakfast as the Americans did. The United Kingdom was.

nutritions breakfast. The Latin American Market The Latin American Market. Brazilians do what people in Novellas do. The population mix was becoming younger.Cases in Marketing Management the past few years the competition also had increased. The 1980. especially Brazil. Within this population growth was an increase in the number of women of childbearing age. Walter Thompson tried to advertise Kellog ready-to-eat cereal and instill the breakfast habit by advertising within a soap opera. Kellog's advertising agency. J. not just Kellog's cereal. The developing economy enabled consumers to spend more than their income on food. The first experience of advertising within a soap opera failed. The structure of the population in Brazil in 1980 was Thirty seven percent of population under age 15 Forty eight percent of population under age 20 Twelve percent of population over age 50 . The company believed that the growing population in this region would reinforce the importance of grains as a basic food source. Kellog wanted to increase sales in this Latin American region. which further supported Kellog's potential for a successful cereal market. But in Latin America.Walter Thompson (JWT). which made it the sixth most populated country in the world and the population was expected to grow to 165 million in the next few years. The Latin American market included a growing number of families with children. consumption of ready-to-eat cereals was negligible. to help instill the breakfast habit in Brazil. mainly Mexico and Brazil. the only problem was Latin Americans did not eat the traditional style breakfast. The commercial did not work because it made Kellog ready-to-eat cereal seem more like a snack than a major part of a complete breakfast. but consumers had turned their backs to the American style breakfast. According to Horekens. How was Kellog to create a nutritious breakfast habit among the Brazilians? The company asked J. "In general. population in Brazil was 119 million. showed great potential as a Kellog's ready-to-eat cereal market. the advertisement portrayed a boy eating the cereal out of a package. Kellog wanted to portray ready-to-eat cereal as a part of a complete to be eaten in a bowl with milk alongwith other foods to make a complete breakfast." Novellas are Brazilians' soap operas. The demographics fit the ready-to-eat market. Kellog wanted to teach the Brazilians how to eat a complete.

His problem was-How could Kellog further convince the Brazilians of the importance of eating a nutritional breakfast in order to establish a long-term market? . Composed mostly of family scenes in their commercials. Through the use of the novellas. Kellog made a second attempt to teach the Brazilians the importance of breakfast. there was not much of a market to control.Case 83 The Kellog Company Six percent of population over age 60 These figures showed that the population of Brazil better fit the market for a ready-to-eat cereal consuming segments. and then added milk. The "cult of the family" continued to be the most important institution in the formation of the Brazilian society. As a result of this campaign. This culture ideal was reflected in the ways they conceptualised and evaluated the range of personal and social relations. took the cereal box. Most Brazilians families watched these soap operas. sales in Brazil increased Kellog controlled of 99. percapita cereal consumption was less than one ounce or several spoonfuls per Brazilian annually. However.by playing up the family and its importance. even after advertising.5 percent of the ready-to-eat cereal market in Brazil. usually the father. then on flavour and finally on ease of preparation. Brazilians had begum to eat breakfast. The advertisement focused first on nutrition. Although Kellog controlled the market. This seemed to be the way Kellog would have to demonstrate the importance of a nutritional breakfast. One member of the family. but Horekens was not sure whether sales would continue to increase. poured the cereal. This scene represented a complete "Kellog' breakfast in a way that Brazilians could relate to. Kellog opted for scenes that showed the family at the breakfast table.

find that he is planning a website on internet and seeks your suggestions. it is his practice to discuss and confirm his marketing ideas. Besides. Now. 84 BANARASIDAS Objectives After going through this case. (English). He had completed his M. twenty years ago. according to their specific requirements and preferences. Packing of paan. recognise his insistence on adopting sales promotion techniques: discuss ideas with consultant. his promotion methods. His marketing ideas are always creative and innovative as his profile is far different from other Paanwalas. you will be able to : • • underline paanwala's sound "customer-relationship" on firm footing. with a professional consultant. etc. ultra cleanliness. He has been keeping close relationship with his customers and has developed the practice of offering Paan to the customers. he has a profound sense of modernity. He is fond of reading English books.Case No.A. This is reflected in the display of his paan-shop. He would like to get your suggestions on using website for marketing. he is thinking of creating a website on Internet. • Banarasidas is a famous Paanwala in Fort Area in Mumbai. As he is running his paan shop in a city like Mumbai. . also his client.

Ms.Shhakti Rohilla to herself as she arranged her agenda for the day. 'A GLORIOUS MORNING!' muttered Ms. This meeting was to evaluate the initial thoughts of Ms. will accept it. you will be able to : • • • • • find CCL engaged in manufacture of inflatable products. the only change that Mr. 85 THE WATER-BEDS Objectives After going through this case. The organisation manufactured rafts. quality image and customer satisfaction. identify new product-features and advantages.Case No. recently. too. Over the years. . The water-bed was a major offering in the series by CCL in the middle of 1991 to Indian markets. boats. The product had already been accepted. Rohilla was the newly appointed Marketing Manager of Customer Comforts Limited (CCL) -a Rs. Customer Comforts Limited (CCL) was set up about a quarter of century ago in New Delhi by Harjinder Singh to create and market a variety of inflatable products. underline product weakness. abroad and it was hoped that Indian consumers. by CCL. recognise its Water-Bed developed for Indian Markets. to a large extent. Singh had allowed in Company philosophy was to innovate and add more vigorously to the consumer products in the inflatable category to meet customer desires. It had acquired. (Marketing) early in the morning. both. explain comprehensive market plan design for the product. Rohilla on how to plan marketing efforts for 'water-beds'-a major product developed. First on her engagements for the day. she had a meeting with her Director. 20 crore company in Mumbai. lifejackets and collapsible containers for bulk storage purpose.

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as if at once. "Oh nine-thirty! Time to get ready for the office" said Ms. or foam. Among the major benefits of water-beds over the conventional beds and mattresses. However. Ms. however. One could even stub a cigarette without springing a leak. Before that. Ms. she felt confident that the benefit would reach customers.Rohilla believed that the benefit will be its chief attraction and needed to communicate this. made of jutes.Cases in Marketing Management Water-beds are made of PVC with mattresses full of water. she consulted her Director (Marketing) with her initial thoughts. Further. whether. Rohilla knew that this would be a major hurdle to cross as it would take some communication to convince customers. Rohilla was to design a comprehensive market plan for the Water-bed. was that a water-bed applied equal pressure on every point in the body. . cotton. they are sturdy enough as the in-house research and limited field experiments proved to withstand children romping on them. This water needs to be changed once in six months. if customers desired. This ensured its users a healthy and comfortable night's sleep. The Director seemed to agree but asked her to marshal them in writing and discuss the same again that afternoon. In winter. As she began. Ms . the water could be heated to a required temperature. the PVC used in marketing water-beds was of high quality. Rohilla and spurted out of her study. her study room clock chimed.

KUMAR Objectives After going through this case. Kumar at XYZ Ltd. recognise its lack of focus.. The high media decibels created interest with the adults in the so-called kid segment. The north and northwest were their stronghold territories. 86 MR. They knew that they had to grow the segment if profits were to grow. underline MNC's successful entry in the same market with : "Hole-Mint". Their own product was doing dismally poor due to lack of company focus and no promotional support in a fragmented confectionery market.Case No. sat with the marketing team concerned about the growth opportunities lying in the Rs. But how to go about the entire thing? Afterall. "Hole mint" users. you will be able to : • • • • • find a firm with dismal performance in Mint market. as well as. new users had to be brought about in to use of the XYZ product.. XYZ Ltd. They could not commit more than 1. Biscuit sales were more important to the sales representatives than the confectionery sales. knew their distribution and financial constraints. A recent launch of "hole mint" roll by an MNC had created waves in the confectionery market. explain firm's dilemma: distribution and financial constraints. The team was sure that the old product needed to be relaunched. identify marketing team aiming at promotion mix strategy. . The "hole mint" virtually began to represent the mint category in the Indian context. a mint was a mint and nothing more.5 crores over the entire the year on the promotional support. Mr. 140 crore mint market. absence of promotional support as mint's causes of failure.

both. you will be able to : • • • • find Cadbury and Nestle. Leading brands like Cadbury's and Nestle encompass all of them. 87 CHOCOLATES Objectives After going through this case. Kit-Kat from Nestle and Perk from Cadbury's have started running from neck-to-neck. The market seems to accept chocolate more easily compared to the past since 1993. While Nestle Kit-Kat wishes to push CDM by concentrating the wafer market. recognise. Within one year of their launch. underline massive thrust of ad and promotional campaigns analyse each company' s brand segment: and struggle for expansion strategy. A child's preference for chocolate could be for plain milk chocolate. the two wafer enrobed brands have established new segment which threatens the traditional plain milk chocolates. in volume share. Cadbury's aim of launching Perk appears to have been reactionary since it followed KitKat's launch. or the latest hit: wafer-enrobed chocolate. running from neck-to-neck. chocolate-enrobed goodey bars. scaling new heights: despite distribution and time-frame constraints. no chocolate has succeeded in getting the share both have got. the growth has been from 15 % to 25 % and new consumer interest has been created in chocolate because of high profile ad-campaigns and promotional efforts-While COM (Cadbury's Dairy Milk) has attempted to break consumer mindset that chocolates were for children only. Cadbury's is looking at milk chocolates for consolidation of gains.Case No. with 8% volume share each. And trend of snacking . the Perk was a logical step into an evolving market which synergized with the Company's revitalised expansion strategy. despite the fact that Kit-Kat and Perk are available only in 16 and 20 towns and not at national level. Here lies the strategy of KitKat and Perk. Obstensibly. both.

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thereby. said their Vice President (Sales). Perk and Five Star.Cases in Marketing Management products has acted as a spur. get into the evoked set (preferred set) of brands-CDM. . was an effort to build-up its repertoire of brands and. For Cadbury's launch. Kit-Kat.

. c) E nvironm ent friendly bio-fertilizers are b elieved to be slow in action and not lik ely to b oo st th e c ro p y ie ld. a naly se cau se s o f re sistan ce to bio -fe rtilize rs by fa rm ers. T h e c o m p a n y re alizes that inspite of the general aw areness abou t the hazards o f chem ical fertilizers. R ecently. Its te st-m a rk e tin g h a s th ro w n u p p o o r re su lts. G re e n B e lt (I) L td . this firm set up an Indian subsidiary.GREEN BELT O bjectives A fter going th rough this case. bio-fertilizers firm sets-up su bsidiary in Ind ia. by the n a m e . you w ill be able to : • find a U . • G re e n B e l t I n c . the farm ers still prefer to u se th em . . b) T h e ch em ical fertilizers are believ ed to g iv e a g u aran te ed inc re ase in th e c ro p y ield . T his is due to th ree reasons: a) S u bsidy /L oa n is av aila ble fo r th e p u rch a se o f ch em ic al fe rtilize rs. i s a n A m e r i c a n f ir m e n g a g e d i n th e m a n u f a c t u r e a n d m a rk e t i n g o f environm ent-friendly bio-fertilizers. re c o g n i se th e p o o r te s t-m a rk e ti n g re su lts.S .

From modest beginning. in fact. you will be able to : t find ABC's quality toothpaste commanding the market. to give customer a choice or for other reasons and it had seen marginal operations of certain companies go out of business to fulfill the grocers' desire for a second brand. the ABC company was considering the manufacture of a second line of toothpaste. These companies failed because they seemed unable to produce toothpaste of the same uniform high quality as ABC Company. In due course. toothbrush and toothpowder under the brand name "KLEAM". almost a separate and distinct marketing operation. The products of ABC Company included toothpaste. While the Company was keen to expand its total volume of business.Case No. similar in all ways. it would be necessary to consider the advailability of having a separate fleet of trucks and a separate set of books. to the first in quality. price and packaging-except that it would carry a different brand lable If the company decided to engage in the manufacture of a separate line. underline high sales promotion expenditure. • • • • recognise grocers' demand for two brands for display explain companies complying with this demand. it was apprehensive that it might end up . The company was not quite sure whether this was to spread business. it was discovered that most grocery stores wanted to display two brands of toothpaste on their racks. failed. As a result of the demand of the grocers for a second brand. analyse complications for ABC : infrastructure for second line product. the Company expanded several folds in three years time and was regarded by all the grocery stores in its area as the leading producer of high quality toothpaste. 89 KLEAM O bjectives After going through this case.

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Cases in Marketing Management with two weak brands. It also it feared that the promotion of two brands might be unduly expensive. . instead of one strong one.

the commercial was offensive to Brazilians. The clip. the commercial depicting two chimpanzees sipping the rival soft drinks will continue to air. But to Coca-Cola. The decision signalled "the triumph of a good sense of humour" said Attorney Saulo Ramos. . a new television commercial campaign seemed a little more than a case of playful monkey business. you will be able to : • • • find Ad and SP war between beverage giants : sparks off controversy identify Pepsi-sponsored TV Commercial : a bone of contention underline Brazilian Ad Council's verdict: rejecting Cola plea t analyse Clip's sequence of shots. one drinking Pepsi and other sipping a Coke. 90 RIO-DE-JANEIRO O bjectives After going through this case. The animals are taken to a laboratory to determine the results of Pepsi and Coke on them. telecast since the last three weeks. however.Case No. its humour appeal. Feb 5: To Pepsi. has become a national conversation piece. The commercial shows two chimpanzees. a former Justice Minister who represented Pepsi. Brazil's Advertising Regulations Council voted 8-3 on Friday to reject a request by CocaCola to suspend the ad. After a bitter legal dispute. Rio-de-Janeiro. especially to Coke drinkers.

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Coca-cola claimed that the ad showed 'Prejudice against Coke drinkers' by comparing them with monkeys. but do not compare to his Pepsi-guzzling counterpart. He throws away his Pepsi. Pepsi paid to have two giant nine-meter-high inflatable dolls. the chimp is introduced to "guarana" a soft-drink made from the Amazon "guarana" Berry and says it's the best taste ever. Pepsi may not be laughing for long. Coke attorney Harry Thomas Tate said the decision was unfair and rewarded aggressive advertising. The Pepsi drinker is shown wearing stylish clothes and a hat driving along the Rio beachfront trying to meet bikini-clad women. Pepsi is third in the country with a 8. In this ad.5 percent share. . but Pepsi has made gains with slick advertising in the last two years. Pepsi countered that Coke's own ads showed elephants and polar bears guzzling the soft drink. Coca-Cola sales are 50% of the growing and lucrative Brazilian soft drink market. The results are not bad for a chimp. a chimpanzee talking on a cellular phone and a Pepsi can placed outside Coke's headquarters on Friday. however.Cases in Marketing Management The Chimpanzee who drinks Coca-Cola is then shown in diapers hammering differently shaped moulds into holes. Brazilian soft drink manufacturer Antarctica the country's number two bottle has already prepared a new ad with a chimpanzee wearing the same clothing as the Pepsi drinker. The chimp then giggles widely with a car full of human friends. He said the company had not decided whether to appeal.

Services unlimited had received Rs. one organisation had received this type of funding continuously for the 15th year. It is a national fund raising trust established in 1971. they are subject to rigorous monitoring.Rs. 10000 . recognise its focus on ensuring VSSO concentration on cause of their interest. whereas some stipulated that the money should be given to a type of organisation operated by women/ disabled persons.. analyse campaign plans. In 1994. you will be able to : • • • • • find NGO Fund Raising Trust: rendering yeoman's services to VSSO. budget and target audience. Services Unlimited is an NGO (Non-Governmental Organisation) registered under the Charity Commissioner as a trust. assess Trust's plans to widen network of doners. There are no restrictions as far as 'acceptance' of funds are concerned. But its problem was to decide between helping more . In fact. etc. However. Its general policy was to give funds to each organisation in the range of Rs. Rs. Its basic purpose is to raise funds and provide them to the Voluntary Social Services Organisations working in India. Services Unlimited's chief purpose is to ensure that voluntary social service organisations should spend their time in serving the cause of their interest rather than fund raising. till 1994. Its trustees were aware that the upper limit of donations.30 lakhs by way of donations and allocated them to 125 organisations.20000 per year. Some donors donated money to 'Services Unlimited' without any conditions.Case No. viz. underline its decision to appoint Ad/Publicity Expert to increase donations inflow. There was no restriction regarding the number of years an organisation to receive its help. 91 SERVICES UNLIMITED O bjectives After going through this case.20000 per year was not enough to many organisations.

the trustees had not tried to receive more funds for donations in a professional manner. personally. Till recently. They also believed that the voluntary organisations which were receiving funds from Services Unlimited would also help them in generating more funds. therefore. Sharma. they recently appointed one Ms. . realised that her immediate task was to formulate a campaign plan and a campaign budget and present it to the trustees for their approval. spread all over India. Sharma realised that the trustees had no idea. The rest of them were companies and other institutions. the trustees decide to make systematic effort of raising its donations particularly from the corporate sector and other individuals spread all over the country. Nearly. Ms. Soon after joining. Sharma had an experience of working in advertising industry for over 10 years. 70% of its donors were individuals contributing above 1/3rd of its collections. they must have developed a good reputation by the word of mouth. They had not thought of advertising and publicity budgets or had no time-bound plans. Recently. about how advertising works. The trustees felt that because of their good work of the past 22-23 years. They were of the opinion that a good advertising would result in receiving more donations. Such organisations were numbering over 300. Most of these donors were known to the trustees. As a result of this. Sharma as Advertising/ Publicity Manager. Ms. Ms.Cases in Marketing Management organisations with smaller funds and helping smaller number of organisations with more funds. whatsoever.

Shulton follows a global brand strategy and also adopts a flagship approach to advertising. you will be able to : • • • recognise the flagship advertising strategy of brand owners. it has established itself firmly in the No. The company. 92 OLD SPICE O bjectives After going through this case. In the Indian market. the change in ad strategy to suit the wide range of products in India underline the flagship approach modified for a piggyback support to Leather Shaving Cream analyse the ad media assess how to make the best use of limited funds with the most creative campaigns • • "Old Spice" is the oldest men fragrance range in the world.Case No. it was decided to promote lather shaving cream (LSC) as the next step towards the men's . marketed a men's toiletry range : after shave lotion lather shaving cream. hair cream and shampoo Colfax kept to the international strategy of using after shave lotion (ASL) to boost the range in India.. while the other products of the company ride piggyback on its equity. Alcohol supplies can be very erratic. body talc. too. such a heavy reliance on a single alcohol-based product was extremely risky. It is also the world's largest selling brand of after-shave-lotion (ASL). However. has since the 60's. This umbrella approach is probably more successful in the West. recognise. Colfax Laboratories (I) Ltd. where marketing and distribution is done through department stores. Keeping in mind the budgetary and profitability constraints that plague the toiletries market. decided in 1987 that it was imperative to promote other products and reduce its reliance on ASL. therefore. It promotes the mother brand. 1 position.

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owners of the brand name worldwide. The decision was made easy because LSC is a complimentary product. the key elements of the advertising strategy followed by Old Spice were : Historically. the commercial is being used by Shulton in international markets. Both the volumes and value recorded excellent growth.Cases in Marketing Management toiletries market. Press was used to announce the launch of a new variant or for tactical purposes.V was the primary medium. the results were impressive. The commercial also got kudos from "Shulton". As the saying goes. In fact. the 50ml pack and the atomizer. Due to the limited budget. The Adworld survey rated the Old Spice shaving cream commercial among the 15 most liked ads (unaided). the advertising was concentrated in a approximately 40 select towns which contributed over 70 percent of the then sales. T. the international 'Surfer' and 'Lovely Day' commercials incorporating the range pack shot were used. retail margins could be brought down after the launch. Because of the success. Old Spice lather shaving cream continues to grow. an umbrella campaign for Old Spice focusing on ASL was run. the proof of the pudding is in the eating. This advertising gave a fillip to ASL sales with a marginal impact on other products. since budgets had been inadequate to run multiple product campaigns. for example. In terms of creative umbrella. In the case of Old Spice LSC. . As for its advertising impact.

People. The result: Philips decided to buy ad space and let the network or magazine fill it themselves with "real" content. 93 RETHINKING : IS LESS MORE? Objectives After going through this case. "Sense and simplicity". The best advertising gambit.0.5 minutes of ad time on NBC's Nightly News and giving three of those minutes back to programming. you will be able to : • examine and demonstrate how consumer industry instraction is always a two way process. where readers could easily find them. While the notion of "less is more" is hardly a new one—the trend most recently resurfaced back in 2000. the research led them to conclude. reason out change in consumer perception regarding the same. . Fortune and Business 2. • • Philips Electronics was in the midst of a $600 million global effort to transform its image from a light bulb maker into a customer-centric consumer products company last year when customer feedback uncovered a useful nugget of information. would be for the brand to remove a chunk of its advertising from consumers' lives. Towards the back of the publications. and had no intention of putting advertisements there. a Philips' ad told readers what the company had done and why : to help simplify their lives by giving them less advertising with which to deal. and the magazines added editorial content. The company started when it bought all the ad pages before the table of contents in issues of Time. evaluate the consumer behaviour pattern with regard to compulsive and stereotyped advertisement techniques. The result was that its visibility moved up from the hinterland to the magazines' third pages. By the end of 2006. Philips was buying 4. The idea of giving back was a natural extension of the company's tagline.Case No.

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In the spot that broke last month. Apple and AT&T all have marketing strategies that consumer anthropologist Robbie Blinkoff. Fidelity. They want their products and services to be varied. when it began to market itself as a mass-market consumer.S. TV and online ads that show investing one's money can be as simple as answering a few questions and hanging a picture. Along with Philips. brand director. Dutch-owned Philips—the only prominent brand to literally give back ad time—made a shift to simplicity in 2002. GSD&M promoted the ease of the company's multipronged business model with an ad that shows people hanging out in a coffeehouse with their favourite electronic gadgets. not technology. but the barrier was that marketers were over-featuring the products and over promising the benefits. but they want them presented in a clear. was inspired by watching people figure out on their own how to make their communication devices work together. Fidelity's Vice President of marketing. according to Eric Plaskonos.Cases in Marketing Management encapsulated in the launch of Real Simple magazine—this time around it's the marketing that's being trimmed down. sophisticated and smart. One of the largest electronics companies in the world. "we tell people that if you like easy things. He notes that consumers. companies as varied as Staples. says financial services seem so complicated to most people that they get stuck in inertia." The company received clear marching orders from its global target of affluent 35-55 year- . This new form of simple is now popping up in such high-profile campaigns as Staple's "Easy button" and Apple's "Mac vs. They're looking to (marketers) to uncomplicate their offerings". The company conducted focus groups with 2. which broke late last year. "Giants" the voiceover talks about communications companies making business plans "while back on planet earth people were simply communicating. PC. overwhelmed by a large and fractured media marketplace. Philips' U." Last November. a cd at GSD&M. brand. straightforward way that hides all the complexity. "So instead of talking about our bells and whistles like other financial brands." she says. Fidelity and Boston-based Arnold simplified the company's message in humorous print. says Jeff Nixon. you might like this plan. that they "were fascinated about new technology and what it could do." As part of AT&T's image campaign discussing its merger with Cingular.000 people in eight countries and found. managing director of Context-Based Research Group in Baltimore. Claire Huang." The idea. "don't see a road map. dubs "simplexity".

about 30 lines to guide us in the tone and feeling we wanted for the ads. "The gift of simplicity. New York. explained how it was designed to simplify the audience's experience." The campaign has featured clean graphics. last summer via its afore mentioned media buying strategy. references to global warming and a baby on an ice floe. plain language and a minimal look for TV. The ad ends with the voiceover. the company ran TV." a global branding effort by DDE. We realised the tag was staring us right in the face. Last year.S. and that increasingly time-harried customers value every second in each day. print and online campaigns in the U. I just want to drive it. who co-wrote the tag with John Russo. Philips bought ad space and gave some or all of it back to the content provider with the goal being to "give people their desired experience and get the obstacles out of the way". The company took this to another level in the U. DDB's regional account director. "I don't want to build a car.S. Sonicare electric toothbrushes. "Simplicity is a light bulb that can help change the world". chief creative officer of DDE. and for all its consumer products in a holiday effort with Amazon. in simple terms. print and the Web site. As one participant puts it.com called. The company ran a branded announcement of the advertising reduction." Research culminated in 2004 with the launch of "Sense and simplicity.S. promotes the company's light bulbs and so.. and asked consumers to go to its Web site to give feedback. "The phrase that kept coining up was that the bland was about the sensibility of making things simple. says Plaskonos which is why the 30-second spot "Glacier" for instance. How is something simple? When it makes perfect sense.Case 93 Rethinking : Is Less More? olds: Innovative products should be easy to use. flat-screen TVs and energy-efficient lightbulbs." "We were writing a mantra for the marketing. In the U. New York. "Simplicity should be as simple as the box it comes in ". where the company's ad budget hovers at about $150-160 million." Ongoing customer research informed the company that everyone wants to be able to comfortably use even the most advanced equipment. It opens with striking footage of melting Arctic glaciers. A subhead invited consumers to "Join us on our journey." explains Lee Garfinkel. . energy reduction. The positioning was introduced with TV and magazine ads showing a baby on a white background holding a white box and the headline. According to Catherine East. for state-of-the-art Philips Norelco shavers. most of the marketing has migrated from general branding to product ads connecting the simplicity theme with its better known sub-brands.

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to No. The work will evolve. The Nightly News effort prompted about 5. "The most passionate responses came from University of Texas football fans—particularly former band members—who really appreciated an uninterrupted game" he says.000 e-mail messages through the NBC site. "It's all logic. results from its effort are promising. Agencies can complicate things". say sources. Philips registered a 14 percent increase in the value of its brand to $6. of which marketing is only one phase. the 4. For example. a consumer research agency in Studio City. "The Philips campaign strives to make an emotional connection. secure. In the 2006 annual Interbrand global brand study. comforted. he adds. Simplicity for Philips has evolved into a defining philosophy. The strategic thinking is sound. says DDB's Garfinkel. but the ads read like a creative brief.73 billion. "But afterward. an exhilarating. we have to get . exhilarated. "It's a celebration of technical benefits. In addition to simplifying its communications. Hirsch. Philips CEO Gerard Kleisterlee promised to "deepen and extend commitment to our 'Sense and simplicity' brand promise". empowered. Global sales were up 6 percent in 2006 compared to 2005. "It defines the way we go to market and the way that we do business" says Plaskonos.Cases in Marketing Management The media program included: buying eight minutes of ad space on 60 Minutes and giving back half of that for programming. has been so positive that the company will continue the program starting in March. Take the much ballyhooed International Consumer Electronics Show in Las Vegas in January. user product manuals have gone through a rigorous streamlining for ease of operation. The company has also learned that "simplicity is an intricate process and it's not easy to stay on track" says Plaskonos. not consumer communications. In January. says Plaskonos. but falls flat" says Jeffrey B. I want more than an 'efficient shave. and jumped five places in the rankings.5 minutes of ad inventory with three minutes back on the Nightly News and buying and giving back the entire 30-minute ad inventory for a TNT broadcast of the regular season football game between the University of Texas and Oklahoma State University. Feedback from the anti-clutter promotions. the company also simplified its products and its working procedures. or any other number of uplifting emotions". President of Right Brain Studio. "We sometimes had to force ourselves to think simply. Calif.' I want to feel free. plus more than 100 people scoured the Web for the online addresses of Philips executives to send messages of support. 48. Critics say that Philips' marketing still has a way to go to tap the emotions behind the yearning for simplicity. full of potential. Overall. overwhelming sensory experience" he says.

. get away from the 'wow' and focus on how we make life easier for consumers".Case 93 Rethinking : Is Less More? back to basics.

The shampoo will have some basic features like Anti Dandruff and strong roots for long and silky hair. Apart from this. only one shampoo can be used for all these problems. herbal soaps and other herbal cosmetics. the shampoo that it wants to launch is for mass target audience. It specialises in producing herbal products which include herbal oil. Objectives After going through this case. you will be able to : • • identify the steps for the development of a new product in the market explain the significance of packaging for a new product Himalaya Soaps Ltd. In the current market. .if priced low. Therefore. Though Himalaya is well known for its long standing tradition of maintaining good quality standards.Price being a major tool as a motivator for buying of any product . Himalaya would definitely get better results in the Introduction stage and can expect good market standing in the long run. . has its registered office and factory in New Delhi.Case No. the new strategy would be that it would act as a conditioner for damaged hair (to avoid dryness of hair) and also will avoid knots in the hair. 94 HIMALAYA SOAPS LTD. Also Himalaya intends to use the Penetration pricing strategy as the target audience are the Mass audience. customers are to use 2 to 3 different products for one problem of damaged hair while with this product the customers would have an advantage of getting the solutions to all these problems in one product in the form of Himalaya Shampoo.a Government of India undertaking.

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This time they plan to go for Mass communication on TV and Magazines.Cases in Marketing Management The shampoos existing in the market can be divided into three segments: Class Brand Names Rich/ High Class Target Audience: Gamier. Himalaya. . Lower / Mass Target Audience: Rejoice. the Mass / Lower class target audience by adopting the penetrating pricing strategy. Ultra Doux Middle Class Target Audience: Head and Shoulders.e. The features would be : Good odour Different colours Attractive Packaging Enriched with moisturiser Enriched with conditioner Makes knot free hair The advertising agency has adopted a campaign which says: New entrant in the Herbal field. Sunsilk. The ad agency airs the ads on radio after prime programs and on hoardings. serving the Middle Class level target audience. It was suggested to modify the colours and packaging. Silk & Shine. Anti Dandruff Shampoos. Velvet Reasons for going for low priced shampoo for mass target audience: Since Himalaya is an established name in the market.After two months of launching of the product a survey revealed that Himalaya was not performing according to the expectations in the market and the sales went down drastically. before that it wants to try out a different segment i. Clinic Plus. The colour combinations were not appreciated and the size of the bottle of the product was too big. A unique shampoo. But. in future it wants to launch shampoo for its rich class target audience.

This strategy helped in improving the sale of Maggi. Objectives After going through this case. Maggi had a tough time in the market. Its target audience in the beginning were kids. This then ruled the market and was called the market leader for several years till the competitors started entering the market. • 'The King of Noodles at Home" An important product of the Nestles was launched in the market. This improved the sales of Maggi and observed a growth of 15% during that period.. 5. It came up with new Maggi with different flavours and this change was not adjustable to the target audience and Maggi's sales went down drastically. Good to eat' became a part of Indian advertising. for a 100 gm packet of Maggi. you will be able to: • explain why it is important to go for Brand Extension in the Product to Avoid Market Saturation. This was followed by other promotional schemes. It was launched for the first time in the market in 1980. justify saying that Maggi had Already used Several Tools of Promotion of the Product but Still Failed to be a Market Leader for Longer Time. 95 MAGGI . After facing market challenges from the competitors. Some of these included advertisement of Maggi during and between Kids Show. Even after enjoying and ruling the market for more than 15 years. To expand more it began extensive sales promotion like offering gifts in return of empty wrapper. . By January 1994. Many retailers stopped maintaining the product in their shops. the price of Maggi noodles was brought down from Rs. The punch line 'Fast to cook. Maggi decided to relaunch itself with product expansion strategy in 1997. 7 to Rs.PRODUCTION EXPANSION .Case No. 1.

. Maggi could have existed in the market in the growth stage for a longer period had it adopted the new expansion strategies in the same product. tomato and curry.Cases in Marketing Management In 2001. tried to extend the brand in various categories and failed many times. Ultimately Nestle. Magi was able to sustain its leadership position by introducing 50 gm packs with two new flavours. Maggi did rule the market in the earlier phases only because of the reason that it adopted an innovative strategy in the food market.

His marketing plan comprises: 1) The review of brand's performance of the previous year. you will be able to: • • select appropriate channels of sales promotion explain the procedure for understanding the consumer perception Mr. Mr. Deodorant Bar Segment : sales figures 10000 units (1999) 9899 units (2000) 9000 units (2001) Beauty Bar Segment: sales figures 13000 units (1999) 1422 units (2000) 1528 units (2001) .Case No. 4) Preparing / Allocation of funds for advertising of the product for the coming year. SWOT analysis of the brand. Shah has experience in the similar field of three years. 3) Formulate primary and secondary objectives of the product. He has to submit his marketing plan to his boss. 96 CONSUMER'S PERCEPTION Objectives After going through this case. 2) The focus on innovative marketing strategies for the coming year. Shah is the Product Manager for Unilever Co.

Promotion of the Deodorant bar in small packs could have increased the awareness and also could have helped to boost the sales. Sales promotion was one aspect which was totally overlooked here.of higher level Highly priced No proper advertising / communication No repeat customers / No brand loyalty Features of Beauty bar segment after the survey 1) 2) 3) 4) Cleanliness enhancing fairness Moisturising Proper channel of advertising Satisfied customers because of special offers. coupons. Therefore. Sales Promotion was done by the local newspapers and was on radio and some hoardings for a few days which could not capture the target audience. This was due to the cultural factors and the people were more interested in cleansing and skin protection and enhancing the complexion which according to the consumers was possible by using the Beauty Bar Soap and not the Deodorant Bar Soap. This implies that the consumer's perception was not clear about the Product. Mr. 2) Features of deodorant bar segment after the survey 1) 2) 3) 4) Deodorant fragrance . etc. Customers could not draw a line of discretion between both the Bar soaps and the purpose of each in the Market. Shah's brand is a deodorant bar. Deodorant Bar soap was according to them meant for cleansing. sales promotion and advertising in the coming year. Mr.This was not done. .Cases in Marketing Management 1) The underdevelopment of the deodorant bar segment with an over development of the beauty bar segment. To understand the market standing. One more important aspect was the mismanagement of funds in the deodorant bar segment.Therefore. Also expenditure on advertising was less. Shah used a consumer attitude research. According to this. the brand awareness of the deodorant bar segment was less. Deodarising etc. first priority would go to fund allocation.Deodrant Bar Soap. Also these activities would go region by region. the ratio of sales of Beauty Bar segment were higher.

You were appointed to organise and direct this major new effort and one question was where to locate the regional headquareters for the Asian Division (ADR). from Japan in the north to New Zealand in the south. It has a relatively efficient telephone and telegraph system and good air service to all the major Asian destinations in which you are interested and to the United States. After considerable study. so the main language is English. It is about equidistant between New Zeland and Japan. 97 AN AMERICAN WORLDWIDE CORPORATION Objectives After going through this case. It was a British colony. the Luau government is delighted to have your company locate and invest there. Not least important. Luau's advantages are several. It plans to source much of its raw material and subcontracting there and manufacture and market throughout Asia. you will be able to : • • • recognise Chinese domination in of business and banking identify causes for concentration of Micronesians in labour and agriculture sectors underline social. . It has made very attractive tax concessions to the company and to its personnel who will move there. economic and ethnic imbalances arising out of the employment scenario assess the rise and implications of ''PR Problem'' situation for AWWC • An American World Wide Corporation has decided to expand aggressively in Asia. as well. you selected the island nation of Luau.Case No.

you notice a gradual change of attitude towards you and the company among the government officials and among the people in general. more evasive. you begin to be more aware of luau characteristics about which you had not thought much previously. . while the native Luauans do not like those activities and have stayed with their traditional pastimes. which is the great majority. They have become less friendly. The Chinese enjoy and are good at banking and business. Then as the months pass. government and manual labour. leases one large building and puts out invitations to bid on the construction of a large building which will be its permanent headquarters. is a Micronesion race.Cases in Marketing Management The company moves in. fishing. Occasionally. You find that the only applicants for the jobs are Chinese. The native population of luau. while the Micronesians stay with farming. Almost all of the middle and upper management personnel in the business and finance sector are of Chinese extraction. On enquiry why the Chinese are dominant in banking and business. They are quite satisfactory. and you select the best available. The two groups buy and sell from and to each other. but there are almost no social relations and very little business or professional overlap between the groups. You ask your Chinese staff about it. but they have noticed nothing unusual. some of the Micronesians study abroad and some work abroad for periods. Now as you begin to work much more with the private banking and business people of luau and less with government officials. you are told that this is the way it developed historically. and the operation gets off to a good start. You must staff your headquarters with middle and lower management people and with clerical help. and less co-operative. when they return they frequently go to work in a bank or business or take a government position.

you will be able to • • • state a fanatic's views on tobacco consumption by the youth recognise his influence in favour of ayurvedic herbal cigarettes identify consumer suspicion about the reduction of nicotine content in conventional cigarettes You have been appointed as Marketing Advisor to the Marketing Director of a large company. As a result. Somehow. Besides. The Marketing Director does not want the sales to decline in this way. 98 CIGARETTES Objectives After going through this case. therefore. as he is emerging as a strong force in the company. the sales of conventional cigarettes have also shown a setback. the sales of these cigarettes are not picking up. 'by launching a non-tobacco cigarette. the chairman has recently said that. The company has. On the other hand. He is also scared of the Chairman's son. He believes that tobacco consumption is bad for the youth.Case No. the traditional loyal customers are now thinking that the company has been slowly reducing the nicotine contents in all it's brands.' . The young son of the company's chairman is a fitness fanatic. which manufacturing cigarettes. launched a non-tobacco ayurvedic herbal cigarette. the company is doing a great service to the society.

manufacturing and selling herbal cosmetics and perfumes. you will be able to : • • • identify Musky's raw materials underline the wild life preservation measures against the killing of musk-deers in Nepal analyse ethical issues involved in the firm's future strategies 'Nature Beauty Products' has been a medium sized business. This has pushed up the raw material price by 50 %. the trapping and killing of musk-deers has been restricted. 99 NATURE BEAUTY PRODUCTS O bjectives After going through this case. Its raw material is an organic extract from musk-deers in Nepal. . Their top-selling perfume 'Musky' has been a favourite among the nation-wide clientele. After a recent regulation enforced in Nepal.Case No.

Case No. Satish has asked for a personal interview with the Chairman at his residence and the Chairman has been kind enough to grant the interview. 100 MR. Satish knows that this Chairman has a reputation for giving contracts only on receiving kickbacks. A big contract is at the negotiations stage. As one last ditch attempt. The negotiations will be taking place with the Technical Committee. as it will improve his prestige and will also fetch him good money. Satish also knows that the contract has almost gone to his competitor. SATISH Objectives After going through this case. . it is the Chairman of the Technical Committee who will have the last word in finalising the contract. you will be able to : • • • negotiate a major deal underline corrupt Chairman' s powers: as the final authority recognise the various ethical issues at state Satish is a government contractor. However. This is important for Satish. Satish is ready to appease the Chairman to a certain extent but not to the extent of the kickbacks offered by his competitor. His firm enjoys a good reputation for the quality of his work.

Shri Nitin Shah. 101 SHRI NIRANJAN KAPADIA Objectives After going through this case. Shri Niranjan Kapadia in his address to the board observed that the signs. There were many consumer complaints and protests as also public hearings.. The law usually allowed four years to the signowners to comply with the provisions and almost every type of sign was covered.Case No. One member of the board who was also the Chief Executive of the National Metal Works Ltd. sign control laws had been adopted much earlier overlooking the objections of many local and national companies. reported that his company had stopped using outdoor signs about three years back and diverted the cost of such advertising to underwriting the costs of a series of musical concerts. This legislation aimed at governing the proliferation of signs. advertising products and services underline the controversy revolving round this ad medium analyse the plea of the sign companies against the ban explain the ethical issues put forth by the Chamber of Commerce members • • • An urgent board meeting of the Chamber of Commerce was called to discuss the proposed new legislation. The President of the Chamber of Commerce. you will be able to : • find a proposal for the ban on the display of moving sign-boards. It must practice good ethics and operate in the manner that would benefit the community. . controlling the display of flashing. rotating and moving signs. particularly flashing and rotating signs. In some other cities. He believed that business must be concerned with the quality of life in the community in which it operates. had become too numerous and offensive to the community.

. The main objection by the sign companies was that their business would be adversely affected as a result of such a law. One argument was that the proposed law would be unconstitutional and would be in violation of free enterprise and trade. This they would like to avoid as the economy was already inflationridden.Cases in Marketing Management The local sign companies were criticizing the proposed legislation and wanted it to be more lenient by providing for exemptions through a review board. They would be compelled to increase the cost of other forms of advertising service to make up for income.

Moreover. Amul has given multinationals a run for their money. Producers had to travel long distances to deliver milk to the only dairy. The country's largest food company. you will be able to : • examine this case study and investigate the reasons for the success of this enterprise. especially in the summer season. The Kaira District Cooperative Milk Producers' Union Limited was established on December 14. These agents decided the prices and the off-take from the farmers by the season.2 million milk producers organised in 10. whole milk. the government at that . cheese. as producers had to physically carry milk in individual containers. Milk is a commodity that has to be collected twice a day from each cattle. • analyse the feasibility of its replication in the contemporary period. leadership strategies. individual actors. marketing innovation and socio-economic contexts that shaped its fortune. the Poison Dairy in Anand .often milk went sour.552 co-operative societies in 2003-2004. dairy whitener. institutional framework. while protecting the interests of the milk-producing farmers who are its suppliers as well as its owners. condensed milk. Objectives After going through this case. Amul follows a unique business model. ice cream. the producer was either left with surplus unsold milk or had to sell it at very low prices. Amul. 102 AMUL .Case No. saturated fats and long life milk. The Story of AMUL Amul is the largest co-operative movement in India with 2. 1946 as a response to the exploitation of marginal milk producers in the city of Anand (in the Kaira district of the western state of Gujarat in India) by traders or agents of existing dairies. is the market leader in butter. Despite being a farmers' co-operative.THE REVOLUTION. t note various factors. which aims at providing 'value for money' products to its consumers. In winter.

The new plant had the capacity to pasteurise 300. manufacture 10.200 pounds of casein per day. 12. the dairy cooperative movement in the State of Gujarat had evolved into a network of2. We move to year 2000. GCMMF has 42 regional distribution centers in India.000 pounds of milk per day.Cases in Marketing Management time had given monopoly rights to Poison Dairy (around that time Poison was the most well known butter brand in the country) to collect milk from Anand and supply to Bombay city in turn (about 400 kilometers away). AMUL is one such Union. . Sardar Vallabhbhai Patel and Morarji. serves over 500. Anand becomes the focal point of dairy development in the entire region and AMUL emerges as one of the most recognised brands in India. These Village Societies. They urged the farmers to form a cooperative and supply directly to the Bombay Milk Scheme instead of selling it to Poison (who did the same but gave low prices to the producers).for the first time on a commercial scale anywhere in the world. The foundations of a modem dairy industry in India had just been laid as India had one of the largest buffalo populations in the world.000 retail outlets and exports to more than 15 countries.12 million milk producers (called farmers) who are organised in 10. India has emerged as the largest milk producing country in the world. The Kaira District Cooperative Milk Producers' Union Limited. India ranked nowhere amongst milk producing countries in the world in 1946. independent dairy cooperatives (called Unions). ahead of many international brands. Starting with a single shared plant at Anand and two village cooperative societies for milk procurement. Milk and milk products from these Unions are marketed by a common marketing organisation (called Federation). The producers of Kaira district took advice of the nationalist leaders. Milk collection was also decentralised. Thus the Kaira District Cooperative was established to collect and process milk in the district of Kaira.500 pounds of milk powder per day and 1.000 pounds of butter per day. Village level cooperatives were established to organise the marginal milk producers in each of these villages. Indigenous R&D and technology development at the Cooperative had led to the successful production of skimmed milk powder from buffalo milk . The first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name).411 milk collection independent cooperatives (called Village Societies). henceforth called (VS) supplymilk to thirteen. The dairy industry in India and particularly in the State of Gujarat looks very different. Gujarat emerges as the most successful state in terms of milk and milk product production through its cooperative dairy movement. as most producers were marginal farmers who would deliver 1-2 litres of milk per day.

Researchers have looked at cooperatives as channels for re-distributing wealth. Sometimes. Today AMUL is a symbol of many things.. the National Dairy Development Board (NDDB) and the National Co-operative Dairy Federation of India (NCDFI) were established to coordinate the dairy activities through cooperatives in all the states of the country. Globally. efforts in democratic and participative governance of organisations etc. it . Of the triumph of indigenous technology. The former provides financing for development while the latter manages a national milk grid and coordinates the deficit and surplus milk and milk powder across the states of India. cooperatives have been established to serve the needs of its members in order to maximise their returns. thereby providing scale effects to a network of such producers. Interestingly.from multi-national corporations (MNCs) that brought in new and improved product portfolio. etc. This makes such cooperatives an interesting organisational alternative to traditional business enterprises (i. alternative institutions for property ownership. Governments have usually seen these organisations as effective mechanisms for delivering their own programmes (for example. Of the marketing savvy of a farmers' organisation. Of high-quality products sold at reasonable prices to consumers. Of making a strong business proposition out of serving a large number of small and marginal suppliers. Of a promise to member farmers who are assured a guaranteed purchase of all the milk that they produce at predetermined prices. international network and immense financial support. investor owned firms) in terms of concern for shareholders.. In the early nineties. The Cooperatives face new challenges that test the robustness of their approach and their commitment to the movement and a new style of management thinking. Of developing and coordinating a vast co-operative network. Cooperatives and the Global Dairy Industry Traditionally. modern day cooperatives are an agglomeration of many such small groupings that serve some of the above objectives but have now moved from being protected entities to becoming market driven.Case 102 Amul .The Revolution. In emerging economies. Interestingly. Two national organisations. while Poison folded up sometime in 1960s. the cooperatives are faced with new competition in liberalised India . improving the opportunities for the weaker sections of the society.). In that. the Gujarat movement spread all over India and a similar structure was replicated (all are at different levels of achievement but their trajectory appears to be quite similar). distributional effectiveness and the ability to provide product/service variety. the cooperatives have often sought protection of sorts from uncertainties in the market place.e. cooperatives have been used as institutions to organise marginal producers.. sectoral development or poverty reduction. AMUL was asked by the Government of Sri Lanka to establish a dairy on similar lines in Sri Lanka.

these cooperatives look very different from the merged entities.. Globally. However. opening of new international markets (also markets for new products). Moreover. the Dairy Farmers of America and Land O'Lakes had annual sales of US$ 7. the majority of cooperatives in North America etc. improvements in trucking and milk handling. In many cases. they have to serve the market very effectively. the determinants of success for this kind of cooperatives are no different from those of other commercial organisations.e.). Dairy Farmers of America was formed by the merger of four large . producers themselves come together to produce and distribute their own products (as in the case of AMUL.. they present an interesting model to other commercial organisations on strategic management of resources and their conservation. they recognise that in order to optimise the objective function of the marginal producers.e. This number was reduced to 226 (with 87. for instance.9 and 5. producer-driven cooperatives have to develop systems and processes that respond to market requirements and be competitive. fluid milk) or products with some value addition (i.).Cases in Marketing Management is the government that organises these marginal producers and may also manage the collective (as in various cooperatives in the former Soviet Union and Africa).938 members) in 1997. need for more milk supply (and declining membership). need to offer wide variety.8 percent in 1975 to about 30 per cent in 1998. There have been several factors driving the restructuring of the dairy business (which has chiefly been organised around cooperative principles). Cooperatives are. Traditionally.. In that.065 producers) that marketed milk to plants and handlers in 1973. These include efficiencies in managing fewer large plants versus a number of under-utilised small plants. Cooperative dairies that operate with small membership have retained a certain focus (i. In that. The two largest dairy cooperatives in the US. seeking marketing clout and need to bring investment from outside the cooperatives. On other occasions. the producers of goods and services who happen to be the members of the cooperatives) in good and bad times.1 billion respectively. different from other commercial organisations in one respect they are bound to serve the suppliers (i. geographical or product related) in their offerings. This situation has been changing dramatically in the last decade and especially in the last three years. there were 592 cooperatives (with a membership of 281. dry powder.. the share of milk delivered by the cooperatives increased by 9 percent during this period though the share of dairy sales of small cooperatives reduced from 43. thereby facilitating long hauls.e. There has been a spate of mergers all around the world to create fewer but larger dairy cooperatives. While control and subsidies from the government distort the performance of the former.e. however. In USA. butter etc. cooperatives have played the role of preventing market failures for small producers especially in the dairy industry. a large number of these cooperatives have had small membership and produced predominantly raw products (i.

Similar has been the experience of dairy fanners in other parts of Europe with a higher involvement of government in reshaping the structure of the industry. and supports the efforts of the cooperatives in international markets. It has.e. regulates prices and quality.5 billion in 1996. Outside Europe and USA.The Revolution. however. European (and especially Scandinavian) dairy cooperatives have also seen tremendous consolidation. Many Irish cooperatives have. relation of the State and . the experience of dairy cooperatives in New Zealand is instructive. mostly producers' cooperatives. Dairy cooperatives collect milk from individual farmers and sell processed products in the domestic markets and to the NZDB for exports. Interestingly. interface of the dairy cooperative and the rural power structure. cooperatives in the US in 1998.. the sociology of cooperation. the form that a producing organisation should take and the relationship that it should have with its marketing has been the center of debate in managing dairy cooperatives. It believes that its competition is from the dairies outside Denmark. Dairy coops in Denmark have reduced to 45 units in 2002 from 1500 in 1930s with one large dairy processing 90 per cent of the available milk.499 members across 45 states of USA. which had an annual worldwide sale of NZ$3. have often faced difficulties in raising capital internally for investment (though government support has been quite strong on this count) and have been re-structuring since the mid-70s.. formed it own organisational structure (i. The AMUL experience has attracted considerable interest from the development community-predominantly anthropologists.. AMUL is a cooperative of village cooperatives) to bring about a change in the lives of the marginal farmers of India. Consolidation in cooperatives during the last five years was also in anticipation of (and in reaction to) the consolidated Federal Milk Marketing Order of 2000 which removed geographical anomalies in minimum support prices for dairy products and hence reduced the need to locate spatially distributed processing centers to take advantage of varying prices. Scholars argue that this structure looks more like strategic partnership between producers and the board (the global marketing arm) with the latter providing capital for growth and innovation.Case 102 Amul . 2001). The New Zealand Dairy Board (NZDB) zealously guards the structure of the industry. development agriculture economists and political scientists. allots quota for milk supply to individual farms. however. however. invests in R&D. Key areas of their enquiry have been the role of AMUL in reducing social and economic inequality in the region of the cooperative. The Danish Dairy Board. AMUL in India has learnt from many of these experiences and has been influenced by practices in dairies around the world especially in its formative years. It helped dairy cooperatives to forge alliances with firms in various regions. It consists of 25. converted to noncooperative forms (Hamm. Danish cooperatives.

This implied that AMUL had to develop distinct capabilities that would deliver competitive advantage to its operations. • • • Leadership While Kaira Union (or AMUL) had the support of national leaders who were at the forefront of the Indian independence movement. AMUL has successfully managed to exercise its independence from the government unlike other cooperatives in India). it also had the advantage of creating a momentum that would be necessary to bring more people into the fold and thereby help more suppliers and consumers. AMUL's journey towards excellence is marked by some critical understanding of the business environment in large emerging economies like India where markets have to be developed by combining efficiency related initiatives with increasing the base of marginal suppliers and consumers. elements and replicability of the cooperative movement at Anand. suppliers and consumers. While large scale production had the danger of failure due to poor control and required more resources. It recognised the interlinkages between various environments that governed the lives of marginal milk farmers and the unmet needs of the consumers. etc.Cases in Marketing Management the Cooperative and the role of the government in its growth (interestingly. its local leaders were trained in Gandhian simplicity and had their feet rooted firmly amongst people whom they had mobilised . It also realised that its goal could only be achieved in the long run and this required developing values in people and processes that were robust. The essence of AMUL's efforts were as follows: • It combined market and social development in an emerging economy. This would include long term cost containment. how AMUL developed a robust organisation based on sound values and commercial interests. it had to benefit a large number of people . world-class deployment of technological resources and R&D. cost effectiveness of subsidies to AMUL (in its initial years). It also realised that the cooperative would not be independent and viable in the face of competition if it were not financially sound. and better leveraging of scarce resources. We now present. replicable and transparent.the poor farmers of Anand. The foremost amongst them was Tribhuvandas Patel who had led .both. It also changed the supply chain paradigm in order to reduce the cost to the consumer while increasing the return to the supplier. It realised that in order to achieve their objectives.

a can-do attitude and a desire to change the lives of poor people. the movement for the formation of cooperatives of small and marginal farmers in order to compete against investor owned enterprises on one hand.he gave complete autonomy to managers of the union and earned complete commitment from them. and keep bureaucracy away on the other hand. Over a period of time. He was charismatic in his communication and committed in his effort. worked tirelessly to establish the values of modern economics. He interfaced with global financing agencies to build new projects at AMUL. "were his employers" at the cooperative. He worked with the Unions to bring the best of technology to the plants.. Convincing farmers to join the cooperative required commitment bordering on stubbornness. He is remembered as fair and honest person whose highest sense of accountability to the members of the union laid the foundation of trust between network members. Tribhuvandas knew that his fledgling cooperative needed a technocrat manager who shared his concern for the fanners and also had the tenacity to organise marginal producers. shape the destiny of the Union and then the milk movement throughout the country. first. Verghese Kurien was one such manager who would. as he always says. Verghese Kurien had those skills and had linkages to the government. He worked with marginal village farmers to create systems that would increase milk yields.. These leaders were created at the village.Case 102 Amul . He helped build a modern organisation with professional management systems that would support the aspirations of fanners and customers. Kurien had learnt the persuasive charm of Tribhuvandas through plain speaking and had soon created a cadre of highly capable managers to whom he had delegated both. Several young people left better paying jobs to help create a dream of making India the milk capital of the world. Kurien shaped the destiny of the milk movement in India through the NDDB (as its Chairman) and particularly at GCMMF and cooperatives in Gujarat. Kurien emerged as the father of the dairy movement in India. district and state levels in different organisations of the network. He managed to keep the government and bureaucrats away from the cooperative and gave shape to the modern structure of the cooperative. in making them believe in the power of cooperation and their rights towards the improvement of human condition. He would travel through the villages along with Tribhuvandas . he developed a very close link with the poor farmers who. His skills lay in organising the village producers. In short. Tribhuvandas was the first Chairman of the cooperative. Another important aspect of his remarkable management style was his gentleness and ability to repose trust in people .The Revolution. He understood that without meeting the needs of customers he would not be able to satisfy his obligations to the farmers. technology and concern for farmers within the cooperative. management as well as commitment.

Membership of the cooperative started to increase. cooperative societies.a task that was ridiculed by all who heard of it including the international aid agencies in the dairy industry. AMUL adopted .a network of plants. would work on the design of the dairy plant including conducting experiments to create powder out of buffalo milk . 1. at the time AMUL was formed. Subsequently. comprises of elements described below. He was slowly laying the foundation of a modern dairy industry in India. an institute for training future managers in rural management. Strategy AMUL's business strategy is driven by its twin objectives of (i) long-term. the vast majority of consumers had a limited purchasing power and were value conscious with very low levels of the consumption of milk and other dairy products. Kurien's biggest strength lay in his ability to convince people that the cause of rural farmers was important thus establishing an important shared value. AMUL and GCMMF adopted a number of strategies to assure such growth. professional managers started to join AMUL and the production capacity at AMUL started to expand (and this expansion was done through innovative changes to processes at the plant and through equipment designed and fabricated in-house). Operational details were meticulously planned and executed. Accordingly. how trucks would pick up milk from village societies. Kurien had transformed AMUL from a dream into a major industrial entity . such development could not be left to the market forces and that proactive interventions were required.Cases in Marketing Management and work out the details of how the milk collection cooperative would work. how the cattle would have to be taken care of and how all of this would help the poor milk farmer come out of poverty and the clutches of the middleman. given the primitive state of the market and the suppliers of milk. sustainable growth to its member farmers. the cooperative realised that sustained growth for the long-term was contingent on matching supply and demand. The organisation also recognised that in view of the poor infrastructure in India. which evolved over time. and (ii) value proposition to a large customer base by providing milk and other dairy products a low price. research centers. Thus. Tribhuvandas and Kurien were able to convince the government also of the value of his efforts and secured funding for several projects of the cooperative. secondary services like veterinary/artificial insemination expertise/feed factory etc. their development in a synchronous manner was critical for the continued growth of the industry. For example. Further. Its strategy. along with two of his close associates. And then he. Simultaneous Development of Suppliers and Customers: From the very early stages of the formation of AMUL. he could convince the government to replicate the AMUL model in almost all states of the country.

The choice of product mix and the sequence in which AMUL introduced its products is consistent with this philosophy. while competing in the market for high value dairy products. Second. These include provision of veterinary services. AMUL and other cooperative Unions adopted a number of strategies to develop the supply of milk and to assure steady growth. Given the low purchasing power of the Indian consumer and the marginal discretionary spending power.Case 102 Amul . Cost Leadership: AMUL's objective of providing a value proposition to a large customer base led naturally to a choice of cost leadership position. it chose a strategy to focus on core dairy activities and rely on third parties for other complementary needs. the only viable option for AMUL was to price its products as low as possible. distribution. This philosophy is reflected in almost all phases of AMUL network spanning R&D. only part of the surplus generated by the Unions is paid to the members in the form of dividends. cash payments for milk supply was made with minimum of delay. For example. GCMMF ensures that adequate supplies of low value products are maintained. Focus on Core Activities: In view of its small beginnings and limited resources. AMUL focused on the processing of liquid milk and the 3. collection. production. A substantial part of this surplus is used for activities that promote the growth of the milk supply and improve yields.. Accordingly. . Beginning with liquid milk. the Unions followed a multi pronged strategy of education and support. retailing etc. support for cold storage facilities at the village societies. The success of this strategy is well recognised and remains the main plank of AMUL's strategy even today. marketing. were illiterate and had no prior training in dairy farming. it became clear fairly early that AMUL would not be in a position to be an integrated player from milk production to delivery to the consumer. the product mix was enhanced slowly by progressive addition of higher value products while maintaining the desired growth in existing products. For the long-term.. 2. as mentioned earlier. To summarise. the dual strategy of simultaneous development of the market and member farmers has resulted in the parallel growth of demand and supply at a steady pace and in turn has assured the growth of the industry over an extended period of time. Even today. the member-suppliers were typically small and marginal-farmers had severe liquidity problems. processing. This in turn led to a focus on costs and had significant implications for managing its operations and supply chain practices. On the supply side. For example.The Revolution. First. etc. aware of the liquidity problems. for the short term. a low price strategy to make their products affordable and guarantee value to the consumer. the Unions have put in place a number of initiatives to help educate the members. the procurement prices were set so as to provide a fair and reasonable return. In parallel.

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Thus to assure a continued growth in milk production and supply. and many are not professionally managed. sale of products through dealers and retail stores. veterinary service. the Unions focused efforts on these activities and related technology development. In cases where such partnerships could not be established. while third parties perform the activities. Marketing efforts (including brand development) were assumed by GCMMF. Similarly. From the beginning. etc. some veterinary services etc. its small and marginal member farmers did not have access to finance. it was recognised that the core activity for the Unions lay in processing of milk and production of dairy products.. pay at the same time as the receipt of milk). . AMUL actively sought and worked with partners to provide these required services. logistics of milk collection and the distribution of products to customers was managed through third parties. etc. On the other hand. it played a proactive role in making support services available to its members wherever it found that markets for such services were not developed. For example. AMUL's financial strategy may thus be characterised by two elements: (a) retention of surplus to fund growth and development. and the reluctance to depend on Government support and thus be obliged to cede control to bureaucracy. However. the Unions and GCMMF have developed a number of mechanisms to retain control and assure quality and timely deliveries (see the sub-section on Coordination for Competitiveness later in the case for more details). All other activities were entrusted to third party service providers. This was particularly important. these concepts were practiced by GCMMF and AMUL. Hence. For example. AMUL developed the necessary capabilities and provided the services. however. These aspects are elaborated later in this section. i. all transactions are essentially cash only. These include logistics of milk collection. and (b) limited/ no credit. 4. given the limited 5. Managing Third Party Service Providers: Well before the ideas of core competence and the role of third parties in managing the supply chain were recognised and became fashionable. Accordingly. the payment for milk procured by village societies is in cash and within 12 hours of procurement (most. It is worth noting that a number of these third parties are not in the organised sector. Financial Strategy: AMUL's finance strategy is driven primarily by its desire to be self-reliant and thus depend on internally generated resources for funding its growth and development.Cases in Marketing Management conversion to a variety of dairy products and associated research and development.e. knowledge of basic animal husbandry. This is particularly critical for a perishable product such as liquid milk. in the initial stages. no dispatches of finished products are made without advance payment from distributors. distribution of dairy products. This choice was motivated by the relatively underdeveloped financial markets with limited access to funds.

. The network had to have several layers . The task of ensuring that returns to the farmers was commensurate with the objectives with which the cooperatives were setup was achieved through the representation of farmers at different levels of decision making throughout the network the board of directors of societies. each village society. payment for milk purchased from member farmers and its subsequent sale to the union. This strategy strongly helped AMUL to implement its own vision of growth and development. And once built. is a member of the AMUL cooperative) thereby deriving the advantage of scale and uniformity in decision making. ensuring timely collection and the dispatch of milk on milk routes established by the union. a cooperative in itself. etc. It is important to mention that many of the above approaches were at variance with the industry practices of both domestic and MNC competitors of AMUL. accounting. Organisational AMUL is organised as a cooperative of cooperatives (i.The Revolution. Cooperative development programmes at the village level for educating and training its members have become an important part of the strategy to build this extensive network. Competition in the markets ensured that the entire network was responding to the requirements of the customers at prices that were very competitive. The milk procurement activity at AMUL comprises development and servicing of village societies. a process had to be put in place to build these networks.. The founders of Kaira Union realized that to fulfill their objectives.the operations remained very "lean" and started to provide cost based advantage to the entire network. This turned out to be a blessing in disguise .. increasing . the intermediaries had to operate very effectively and on razor thin margins. the group had to train the VS to run the cooperative democratically. it had to grow so as to draw more rural poor to undertake dairy farming as a means of livelihood.the organisational network where the voice of the owners governed all decisions. a physical network of support services and product delivery process and a network of small farmers that could deliver the benefit of a large corporation in the market place. liquidity position of the farmer/suppliers and the absence of banking facilities in rural India.a network of stakeholders had to be built.e.Case 102 Amul . This included establishing procedures for milk collection. testing. AMUL established a group to standardise the process of organising farmers into village societies. a large number of marginal farmers had to benefit from the cooperative . In addition to establishing the criteria for selecting members. In order to ensure that most returns from sales went to the producers. A loose confederation was developed with GCMMF representing the voice of the customers. Unions and the Federation comprised of the farmers themselves. the Unions representing the milk processors and the village societies representing the farmers. The Village Societies Division at AMUL acts as the internal representative of village societies in their dealings with the Union. profitably and with concern for its members. Building an organisational network that would represent the farmers and the customers was the most complicated task. More importantly.

procurement of milk from societies and its transport to the chilling locations. the organisation structure of AMUL allows for the effective utilisation of resources without losing the democratic aspiration of individual members. These activities. the introduction of new products and the choice of product mix and markets should be consistent with the growth strategy. This strategy often requires GCMMF to allocate a sufficient quantity of milk supply to low value products. In this context. the GCMMF provides umbrella branding to all the products of the network. Milk collection takes place over a large number of pre-defined routes according to a precise timetable. the GCMMF preferred a lower price with the emphasis on efficiency in advertising. The field staff of this division also help village societies interface with the Union on various issues ranging from improvement of collection. In essence. Interestingly. they are also responsible for the formation of new societies. GCMMF's demand growth strategy may be characterised by two key elements: (i) developing markets for its high value products by graduating customer segments from low value products.a process that has long-term benefits for any organisation.The Taste of India"). Interestingly. repair of equipments to obtaining financing for purchase of equipment etc. Marketing GCMMF is the marketing arm of the network and manages the physical delivery and distribution of milk and dairy products from all the Unions to customers. which is an important activity at AMUL. liquid milk as well as various milk products produced by different Unions are sold under the same brand name of AMUL. GCMMF also plays a key role in working with the Unions to coordinate the supply of milk and dairy . As mentioned earlier. the key advertising slogan says "AMUL . thereby sacrificing additional profits that could be generated by converting the same to high value products. and resolving the problems of farmers and village societies. It is obvious that such a system needs charismatic leadership to achieve consensus across issues . and synchronous with the growth in the milk supply. and (ii) maintaining a healthy level of customer base for its base products (low value segment). For example.Cases in Marketing Management milk collection. which range from long-term planning to medium-term and short-term operational decisions are described below. Instead. resolving disputes. the advertising has centered on building a common identity (for example. Their stated objective is to ensure that producers get the maximum benefits. In addition. advertisement and promotion was not considered to be enough of value addition and hence the budget was kept relatively small. GCMMF is also responsible for all decisions related to market development and customer management. a happy and healthy "cartoon" AMUL girl) and evoking national emotion (for example. The Village Societies Division coordinates these activities.

These distributors are also responsible for servicing retail outlets all over the country. Some interesting mechanisms exist for coordinating the supply chain at GCMMF. A well-defined supply chain has been developed to service customers who order in this manner. Since 1999. the strategy. In what follows. These mechanisms are: • • Inter-locking Control Coordination Agency: Unique Role of Federation . products. Operations and Supply Chain Management As mentioned earlier. GCMMF distributes its products through third party distribution depots that are managed by distributors who are exclusive to GCMMF. we describe various features of these elements that have contributed to the evolution of an efficient supply chain. the real owners of the cooperative. process and information technology and managerial practices and systems. Liquid milk is distributed by vendors who deliver milk at homes. GCMMF sales staff manages this process. There appear to be two critical mechanisms of coordination that ensure that the decision making is coherent and that the farmers gain the most from this effort. it procures from multiple production plants (the thirteen Unions). In essence.. It may be remembered that coordination mechanisms have to link the lives and activities of 2. and distributors are constantly reminded that they work for the farmers and the entire network strives to provide the best returns to the farmers. which in turn procure from the Village Societies registered with each Union..(a) coordination of the diverse elements of the network and (b) the use of appropriate technology that includes product.5 million retailers. design and practices in AMUL's network are strongly driven by the objective of establishing and operating an efficient supply chain from milk production and procurement to product delivery to customers. the reason for setting up of this cooperative is not amiss to any one in this large network organisation. Coordination for Competitiveness Robust coordination is one of the key reasons for the success of operations involving such an extensive network of producers and distributors at GCMMF. GCMMF has started web based ordering facilities for its customers. Employees. third part service providers. Retailing of GCMMF's products takes place through the FMCG retail network in India most of whom are small retailers. These range from ensuring a fair share of the allocation of benefits to various stakeholders in the chain to coordinated planning of production and distribution.The Revolution.Case 102 Amul . Management of this network is built around two key elements . More importantly.12 million small suppliers and 0.

In this regard. GCMMF is guided by two main objectives-(i) maximising the network surplus. Each individual organisation. It must be pointed that all members of all the boards in the chain are fanners who pour milk each day in their respective Village Societies. Akey reason for developing such an interlocking control mechanism is to ensure that the interest of the farmer is always kept at the top of the agenda through its representatives who constitute the Boards of different entities that comprise the supply chain.Cases in Marketing Management Inter-locking Control Each Village Society elects a chairperson and a secretary from amongst its member farmers of good standing to manage the administration of the VS. This helps in coordinating decisions across different entities as well as speeding the flow of information to the respective constituents and decisions. Coordination Agency: Unique Role of the Federation In addition to being the marketing and distribution arm of the Unions. determining the best production allocation for its product mix from amongst its Unions. is run by professional managers and a highly trained staff. In making allocations to Unions. GCMMF follows an interesting strategy. The managing director of GCMMF reports to its Board of Directors. reports to the chairperson and the board. GCMMF plays the role of a coordinator to the entire network within the State . managing inter-dairy movements. Nine of these chairpersons (from amongst those VS affiliated to a Union) are elected to form the Board of Directors of the Union. All chairpersons of all the Unions form the Board of Directors of GCMMF. and (ii) maintaining equity among unions for the surplus . the Union or GCMMF. decides on the product mix at each Union location. GCMMF. It works with two very clear objectives: to ensure that all milk that the farmers produce gets sold in the market either as milk or as value added products and to ensure that milk is made available to an increasingly large sections of the society at affordable prices. distribution costs from various locations. Demand for daily products and the supply of milk vary with the season. Some considerations that govern this choice are the strengths of each Union. demand and supply seasons run counter to each other making the planning problem more complex. etc.coordinating procurement requirements with other Federations (in other states). etc. in consultation with all the Unions. procurement volumes at different Unions. This form of direct representation also ensures that professional managers and farmers work together as a team to strengthen the cooperative. Further. The managing director of the Union. long term strategy of each Union. who is a professional manager. the demand for various products in its region as well as the country. The Chairperson of the Union Board is elected from amongst these members. In addition. it has to plan its production at different Unions in such a way that the market requirement matches with the unique strengths of each Union and that each of them also gets a fair return on its capacity.

Case 102

Amul - The Revolution...

realized. In this regard, very often the GCMMF is willing to sacrifice realisable surplus and allocate products to "less efficient" Unions in order to achieve better balance in surpluses accruing to the Unions. Technology for Effectiveness Service to customers required the following: better and newer "products", "processes" that would deliver the low cost advantage to the network and "practices" that would ensure a high productivity and delivery of the right product at the right time. Thus technology or knowledge that was embodied in products, processes, and practices became an important factor in delivering effectiveness to the network of cooperatives. One distinguishing feature of AMUL (in comparison with other similar cooperatives globally) is the large variety in their product mix. Producing them not only requires diverse skills but also the knowledge of different types of processes. AMUL dairy led the way in developing many of these products and establishing the processes for other member Unions. Equally impressive are the achievements on process technology. While several continuous innovations to equipment and processes have been done at AMUL, the most significant one has been the development of processes for using buffalo milk to produce a variety of end products. Gujarat (and most of India) is a buffalo predominant area. As more farmers joined the cooperatives, the need to develop a mechanism for the storage of the increasing quantities of milk became intense. Moreover, the cooperative was established on the promise that it would buy any quantity of milk that a member farmer wanted to sell. The need to store milk in powder form increases as excess milk quantities in winter seasons could then be used in lean summer seasons. Moreover, demand for liquid milk was not growing along with the growth in milk production. No technology, however, existed worldwide to produce powder from buffalo milk. Engineers at AMUL successfully developed a commercially viable process for the same - for first time in the history of the global diary industry. Subsequently, it also developed a process for making baby food out of this milk powder. It has also developed a unique process for making good quality cheese out of buffalo milk, thereby converting a perceived liability into a source of comparative advantage - the task was done through the process technology research. Most of its plants are state of art and automated. Similar efforts in the area of "embryo transfer technology" have helped create a high yield breed of cattle in the country. AMUL's innovations in the areas of energy conservation and recovery have also contributed to the reduction in the cost of its operations. AMUL also indigenously developed a low cost process for providing a long shelf life to many of its perishable products. The total quality management at the grassroots has been a strong force and motive to develop leadership, operational and strategic capabilities in the entire network - farmers, village

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cooperatives, dairy plants, distributors and wholesalers and retailers. Key elements of this total quality management have been:

Friday Departmental Meetings: Each Friday, at a prescribed time, every one in the network (from the farmers to the carry and forwarding agents) joins their respective departmental meeting to discuss quality initiatives and share policy related information. Training for Transformational Leadership so that individuals are able to control their thoughts, feelings and behavior and take more responsibility in one's life and in the surrounding environment. Aligning policies for effective management of Unions and village societies on hand with those of channel members on the other hand. ISO certification was obtained for all the Unions and each village society is in the process of obtaining the same. Training for farmers and their families emphasising the need for good health care for not only cattle during its pregnancy and feeding but also for expecting and feeding the mothers and the whole family. This effort has brought about a significant social change towards such issues in villages that have cooperative milk societies. Retail Census: GCMMF undertakes a census of all retail outlets (over 500,000) to evaluate customer perceptions and distribution efficacy of their network. Interestingly, this is being done by wholesalers in their respective territories at their own cost. This information is used for policy deployment exercise. The extent of IT usage includes a B2C ordering portal, an ERP based supply chain planning system for the flow of material in the network, a net based dairy kiosk at some village societies (for dissemination of dairy related information), automated milk collection stations at village societies and a GIS based data network connecting villages societies to markets. Milk collection information at more than 10,000 villages is available to all dairies (or Unions) to enable them make faster decisions in terms of production and distribution planning, and disease control in more than 6,700,000 animals. Similarly, this is linked with information at all 45-distribution offices and 3900 distributors. This network is being extended to cover all related field offices in the network. The GCMMF cyber store delivers AMUL products at the doorsteps of the consumers in 125 cities across the country. What is remarkable about the above is the implementation of very contemporary practices in rural areas where both, education and infrastructure are generally low. One of the key sources of a competitive advantage has been the ability of the cooperatives to continuously implement good practices across all elements of the network - the federation, unions, village societies and the distribution channel. Whether it is the implementation of small group activities or quality circles at the

Case 102 Amul - The Revolution...

federation and the total quality management at the Unions or housekeeping and good accounting practices at the village societies level, the network has developed very interesting ways of rolling out improvement programmes across different entities. While these programs may not be very unique, the scale is impressive. One of the key strengths of GCMMF and AMUL can surely be characterised as the development of processes that allow them to implement these practices across a large number of members. Growth and Challenges From its inception with the formation of its first milk cooperative, the AMUL network has sustained an impressive growth rate for more than 50 years culminating in the emergence of Indian dairy industry as the world's leading milk producer. However, it is unclear whether AMUL's strategy and practices that have worked well for so long, can maintain this growth trajectory in a changing environment with globalisation and increased competition. In this section, we describe some of AMUL's initiatives and briefly discuss opportunities for growth and challenges that need to be overcome. AMUL's growth during the past five decades has been fuelled primarily by the growth in the milk supply with a corresponding pricing strategy to generate demand. This growth has been sustained by a two-pronged strategy - (a) growth in the number of member farmers by widening its coverage with more village societies and increasing the membership in each society, and (b) growth in the per capita milk supply from its members. This growth is achieved by increasing milk yields and by helping members raise their investments in cattle. It is worth noting that AMUL has funded these support activities from its earnings (instead of repatriating them to the members either as dividends or with a higher procurement price). It is expected that AMUL's growth in the immediate future will continue to rely on this strategy. However, in the new emerging environment, several challenges have become apparent and the AMUL network needs to evolve proactive mechanisms to counter these threats. First, competitors are cutting into the milk supply by offering marginally higher procurement prices, thereby challenging the practice of provision of services for long-term growth in lieu of higher prices in the short-term. Second, for a section of its membership, dairy activity is a stepping-stone for upward mobility in the society. Typically, such members move on to other occupations after raising their economic position through milk production. As a result, AMUL is unable to realise the full benefits of its longterm strategy, and finds new members (mostly marginal farmers) to replace those who have higher potential and capacity. While this is a welcome development for the society as a whole, it is unclear whether AMUL would be able to sustain it in the light of increased competition. By progressively increasing the share of higher value products, AMUL has

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been able to grow at a faster rate than the growth in milk supply. AMUL has been rather cautious in implementing this strategy and has always ensured the retention of its customer base for liquid milk and low value products. With the slowdown in the growth of milk supply, this strategy is likely to come under pressure and AMUL will be forced to make some hard choices. More important, it is fairly clear that its low price, cost efficient strategy may not be appropriate for the high value segment. Thus, AMUL may have to adopt a dual strategy specific to its target markets, which in turn may lead to a dilution in the focus. Apart of AMUL's growth has come from diversification into other agro-products such as vegetable oils, instant foods, etc. In some of these initiatives AMUL adapted its successful cooperative organisation structure, but the experience to date has been somewhat mixed. More recently, the network is exploring conventional joint venture arrangements with suitable partners for diversification into areas such as fast food and speciality chocolates. While it is too early to assess the success of these ventures, the challenges involved are becoming quite visible. For example, diversification has resulted in the expansion of the network with disparate elements, each motivated by their own objectives. This in turn has led to a lack of focus within the network and a dilution in the commonality of purpose. These developments are likely to have serious implications for coordination and control in the network. More important, shared vision and a common goal was one of the main planks of AMUL's growth during the past 50 years, and its dilution is likely to adversely impact the network performance. The largest segment of the market in emerging economies desires value for money from its purchases. Development of such markets requires careful nurturing and a long-term approach. Initial success in these markets is typically based on a low price strategy (providing value for money) supported by cost leadership. This strategy helps to grow the market exponentially by focusing on the largest segment of the population, the middle and the lower middle class. In this context, it is important for global players to note that the value proposition perceived by consumers is influenced to a large extent by the state of markets and the economy and cultural factors. Development of an appropriate value proposition suitable for large mass markets in India requires a thorough understanding of the environment and a focus on costs. This in turn requires designing the organisation structure and practices in a manner that delivers continued market share through cost leadership. AMUL is a good example of this strategy. Firms that are able to develop control processes through the better use of operational practices and supply chain coordination are the ones that are able to serve large volumes and enjoy top line growth in revenues. Development of suppliers likewise requires nurturing with a long-term perspective. It is interesting to note that this was achieved by AMUL through a process of education and social development activities - activities that are not usually considered to be standard business practices.

Case 102 Amui - The Revolution...

This type of 'out of the box' vision is essential for developing an innovative mechanism in new, unfamiliar environments where the building of the relationship with consumers goes much beyond marketing messages and useful product offerings. Environments with underdeveloped markets and suppliers (as in the case of AMUL) add one more dimension of complexity relating to the relative pace of growth of these two areas. Through its pricing strategy, AMUL has been able balance the growth in markets and suppliers and has achieved some degree of synchronisation. Otherwise, gaps between demand and supply would require complementary strategies.

Case No. 103
THE NICOTINE RUSH
Objectives After going through this case, you will be able to : •

examine the nature of consumer behaviour reflected in the case study. evaluate the marketing strategies of the tobacco industries and also assess their advertisement campaign approach. examine the choice factor that the consumers possess. scrutinise the role that the popular media in changing perceptions of consumers and industry analysts.


This case is quite different from other cases of marketing or consumer behaviour. The product involved is harmful for health which has been proven through medical research and the governments across the globe are pushing for restrictions to curb expansion of this sector for public good. Additionally the industry is facing multiple litigations. Yet, the tobacco industry has not only sustained itself but has been growing by leaps and bounds. How is this possible? What makes the consumer so dependent on the industry? Companies such as Philip Morris, RJ Reynolds, Brown and Williamson, and Lorillard hold almost the entire market share in the tobacco industry. While each company has different advertising and marketing techniques, they all target the same customer group. Tobacco companies try their best to generate interest in their particular brand or brands. Companies market a number of attributes that usually include, but are not limited to: taste, flavour, strength, size and image in order to distinguish themselves from competitors. However, all tobacco companies are satisfying the same needs. Many long-time smokers are addicted to the nicotine in cigarettes. They smoke because the nicotine is needed to help them feel normal. Many addicts go through withdraw without nicotine. All tobacco

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companies have nicotine in their cigarettes, which fulfills the need of long-time smokers. Other smokers depend on cigarettes in social settings. Many smoke to look sophisticated and mature. Tobacco companies make many kinds of cigarettes that target different groups. Social smokers may perceive certain brands as more sophisticated, and therefore, they shy away from other lesser-known brands. For example, a person who smoked generic cigarettes at the bar may be perceived as uncultured. On the other hand, the smoker with the Marlboro Lights may be more socially accepted because they have a brand name product. Many types of cigarettes cater to the many markets of smokers who want to portray a certain image in social settings. Tobacco companies do not create the need to smoke, but try to generate interest in their particular brand. Overall, the tobacco companies satisfy consumer demand for the millions of adults across the globe who choose to use tobacco by providing differentiated products to different target markets of smokers. The tobacco industry has developed a rather large array of products. Companies such as Philip Morris, Lorillard, RJ Reynolds, and Brown and Williamson, as well as the other smaller competitors, all provide the same product- cigarettes. The tobacco industry is filled with fierce competitors. But underneath the brand names and images, the product is relatively the same. All tobacco companies produce an inhalant that is made with tobacco, tar, and nicotine. These materials are rolled in a special kind of slow-burning paper for longer smoking time. The cigarettes are approximately three to four inches long and come in packs of twenty to twenty-five or even thirty. With so many similarities, one would think that the market would resemble that of a commodity. However, through brand marketing and promotions, each cigarette is uniquely different in the mind of the customer. Boundaries The tobacco industry can be broadly or narrowly defined. Many products use tobacco as the main material. This case defines the market by focusing on the tobacco and the way it is smoked. Companies produce cigarettes, which are lit and the smoke is inhaled to the lungs. Tobacco products such as cigars, snuff, and chew are considered close substitutes to cigarettes. Cigar smoke is just taken into the mouth, but not inhaled like cigarettes. Snuff and chew do not even contain smoke, but are put on the skin for nicotine absorption. Companies such as Imperial Tobacco, which produce a wide array of chew and snuff products, would be considered a company that provides substitutes to cigarettes. They would not fall in the cigarette industry itself. The affect of substitutes on profits is also low. Nicotine can be found in cigarettes, as well as cigars, chew, and snuff. But most people will not switch over to chew and snuff if the price of cigarettes rises. Chew and snuff do

Case 103 The Nicotine Rush

not substitute for the needs of a cigarette. Cigarettes are smoked for the nicotine and for social acceptance. Chew and snuff are not acceptable substitutes for most smokers; the nicotine is not inhaled but put on the skin for absorption. Buyers and Retailers The stores that sell tobacco products have a moderate influence on the market. Retailers have some power over manufacturers who need prime slotting to ensure strong sales. However, manufacturers have leveraged quite a bit of power by offering retailers special incentives for giving their products good placement or for installing certain numbers of brand advertisements around the store. To some stores, such as Super Malls, losing a major cigarette brand would mean large loss of revenues from customers who would rather go to another mall to locate their favorite brand. Also, companies are trying to develop closer relationships with bars and coffeehouses. Tobacco companies offer ashtrays, napkins, and matches, saving each buyer thousands of dollars in supply costs. Retailers now are marketing the brand on coasters and napkins for the company. The end-users in the industry also have moderate power. Brand loyalty is very high, and it has been shown that smokers generally chose a brand in their teen year and continue to smoke that brand the rest of their lives . However, in the face of a dramatic price hike, consumers have been quick to notice that brands are interchangeable and then go for the lowest price. But the dearth of substitutes for tobacco products makes it difficult for the industry to lose customers all together. The suppliers in the tobacco industry have a low level of influence, even though there are no close substitutes that the industry can use in place of tobacco. Tobacco is purchased from farmers, who essentially have to take the market-determined price for their crops. Tobacco is a commodity, so it makes no difference from which supplier a firm buys its materials. The large number of individual farms that supply the industry makes it almost impossible for anyone to raise the price. There is not a threat of forward integration from suppliers because they have none of the tools necessary to manufacture or market tobacco products. The farmers have only the land and equipment necessary to grow the leaf. If they were to try to produce cigarettes, they would probably not be able to compete with the many large companies that have economies of scale. Profit Analysis Why are tobacco executives still smiling? Simple - They continue to rake in the huge profits. Indeed, the tobacco industry has faced much opposition during recent years but still remains profitable. To be specific, there are two main reasons that the industry has

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tobacco companies as a whole would have a better chance of achieving greater profits. Retail Masters is a multi-level program of promoting brands in the retail environment. Buyer power is lower because the smokers depend on the cigarettes to fulfill their addictions.2 packs per day. . And finally. The management practices of the tobacco industry have also contributed to the industry's success. the industry is bound to make substantial profits. if the industry were to constantly maintain better displays and shelf space. the new product inventions mentioned above could either help or harm the industry depending on how well they do. but there are a lot of changing conditions that might affect the future of the industry. is in the final phase of conducting market studies on its latest product. the tobacco industry could become more profitable. Don't Start campaign ". For example. Buyer influence increases because they have the power to delegate displays and shelf space. In fact for most tobacco users cigarettes are inelastic commodities as they are very brand-loyal and therefore less price sensitive than most would think. the strong addiction of tobacco has allowed for a very loyal following in the tobacco industry. the marketing management practices behind the tobacco industry bring a promise of strong future profits. Again. the profits of the industry look to be good. For example. Even when the average store sells around 25 packs per day. who will also have to invest a great deal of capital to get the product on the market. tobacco companies are having to pay more and more money for court settlements. Although the industry has been under close scrutiny as of late. Simply by getting better displays and shelf space. Tobacco companies are also trying to get a better public image by producing public service announcements such as the "Be Smart. A survey points out that the average smoker still smokes 1. ridding itself of ash and odors. the new Eclipse cigarette will more than likely be imitated by other competitors. for instance. This program has the potential to increase a store's cigarette sales by 11 percent. The Retail Masters program has allowed for strong profits. RJ Reynolds. Not only does this bring in revenue for the companies themselves but for the wholesalers and retailers as well. As already stated. for example. Government influence and lobbying have also played a smaller role. First. Eclipse. Overall. For example.Cases in Marketing Management continued to be prosperous: addiction and management practices. The loyalty of customers in tobacco has allowed for a successful forecast of future profits in the industry. The company claims the new product reduces second-hand smoke by nearly 90 percent. Also. most tobacco companies are introducing new products in order to keep high profit margins. their customers are impressed with the message. which means strong profits for the industry as a whole.

They have a huge base of resources with which to attack other competitor entrants. For example. Any new entrants would be sure to receive heavy retaliation from the other companies fighting to keep their share of the lucrative industry. Store managers may be reticent to give away prime slots for fear of losing discounts or other offers from major players. Industry Environment The tobacco companies play off each other for market share and innovate marketing strategies to fight back and keep the smoking demand. The products currently on the market are differentiated somewhat in their design. if the government keeps increasing excise tax and still allots money to the prosecution during tobacco lawsuits. It is highly unlikely that the same customers who are currently paying less than three dollars a pack. get one free or offer coupons at certain times during the year to discourage entrants to the industry. which would be a disadvantage for newcomers to the market. Large settlements against the tobacco companies have been the norm in the past several years. One of the biggest obstacles to a new entrant would be finding a decent place of the shelf with such heavyhanded competition already occupying that space. Overall. the industry will be severely handicapped. the profits of the industry are bound to decrease.7 billion in the year 2004. which include legions of sales representatives that vie for shelf space. These firms have finely tuned distribution channels. Tobacco companies now pour $4 billion a year into promotions and advertising. Just over the past decade.Case 103 The Nicotine Rush Profits can be decreased greatly if money the money is spent defending the company. A few powerful firms. The government is also a very limiting factor to tobacco. as the restrictions of the government increase and lawsuits are lost. Although the customers still seem to be buying as they have in the past. but mostly through the large advertising budgets that are used to promote them.nine times what they spent in the decade of 1970s. Although gigantic . there is certainly a price ceiling that a customer will not be willing to pay above. control most of the industry. will pay ten dollars for a single pack of cigarettes. However. Philip Morris is by far the industry leader with estimated tobacco sales of $46. The barriers to entering the tobacco industry are numerous. The tobacco industry has a very low threat of entry. Government policy is another possible deterrent to enter the market. Many small companies will not be able to compete with the capital requirements in the tobacco industry. The high volume of cigarette sales gives existing firms economies of scale. the government has passed so many laws that it has forced the tobacco companies to double their prices on cigarette packs. They could easily start promotions such as buy one.

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more brand switching . The tobacco companies were mocking the ads and celebrating those who continued to use tobacco. These ads were a result of an advertising war between the tobacco industry and anti-tobacco campaigns. Switching costs are very high in the tobacco industry. a combination of a magazine and catalog. Companies have also been required to create advertisements solely about the harmful consequences of using tobacco products. due to high brand loyalty. The government wants the companies to avoid targeting vulnerable markets. companies are coming up with creative ways to advertise and appeal to consumers. it is difficult to imagine how a small startup company would be able to burden the expense. The government has also intervened with tobacco marketing by altering the slogans and gimmicks the companies use. but they do advertise tobacco products and accessories. The issues come out monthly and contain articles about travel. Tobacco companies are hoping these magalogs will persuade the existing smokers to purchase more. Even if the price of their brand is raised. The idea of the magalogs is to portray an image that a smoker's lifestyle is fun and exciting. Even with magazines and other legal forms of advertising. Some companies are developing smoker's lifestyle "magalogs''. Many smokers are still smoking the same brand they first started smoking. tobacco makers are still running into restrictions. In each magazine advertisement. they would not consider switching to another brand. The magalogs do not contain articles about smoking and do not have pictures of people smoking. The tobacco companies have been prohibited from advertising on television and radio. The tobacco industry has limited media coverage due to government restrictions placed over the past two decades. and shopping. magazines are the most common method of advertising.Cases in Marketing Management companies like Philip Morris are able to handle the charges because of their extensive monetary resources. such as young children and teenagers under the legal smoking age of 18 years. In the past consumers have been proven to remain loyal to one company throughout their lives. Since government regulations have become such a threat to the tobacco industry. The government intervened and required the tobacco warning advertisements for all tobacco companies. and even more recently from billboards and outdoor posters because of the harmful side effects their products may cause. a Surgeon General's warning is required to appear with information about tobacco-related health risks that the product may lead toward. cooking. but as tobacco prices have steadily increased several times. Since so many channels of marketing are closed for the tobacco industry. Many companies who would want to come into the industry would not easily take away market share.

Philip Morris. But the opportunities of the leader and the other companies can be dampened by government regulations. Once the tobacco gain market share. The tobacco industry has many strong competitors with varied portions of market share. it is somewhat easy to keep it. Another reason is that companies need to cover the higher costs that they have incurred from legal settlements with state governments. As of now. Marlboro is one of the most well-known brands in the world. This type of competitive rivalry causes threats to all competitors. We could easily create a line extension and rely on the brand name for customer loyalty. the price leader is Philip Morris. and they will continue to find alternatives around regulations to keep their image up as they fight hard in the competitive environment. The addictive substances in tobacco products give the industry opportunities to keep consumers brand loyal and trying their new products. The companies with less market share want to follow the trends to avoid losing share no matter how high costs are. with its extensive capital. If a price war were to be started. Tobacco makers rely on the key success factor of image in all that they do. and Lorillard are the top four . Companies such as Philip Morris. One of the main reasons for the price increases in the tobacco industry is that companies are trying to keep shareholders happy by paying them high dividends.Case 103 The Nicotine Rush from the premium brands to the lower priced one is occurring. could easily outprice all other brands. The price leader controls the industry and sets the rules of the game. The smaller tobacco companies could not compete and would soon go out of business. Surveys' have shown that the number of smokers has decreased 10% in 2004. Any attempt to take away market share from the leader will result in more harm than good for the lower companies with less share. Competitive Analysis Philip Morris is the industry leader and is able to heavily promote and advertise a new product. As more restrictions are being placed in the tobacco industry. Brown and Williamson. The premium brand companies are also spending more money on advertising as the prices increase to keep their customers from switching to the lower-cost brands. RJ Reynolds. The price increases are decreasing the demand for tobacco products as well. The competitors have to watch the price leader carefully to make a competitive strategy. and they are trying to gain new consumers as well. When they increase prices. all companies will lose consumers if they do not find successful alternatives to marketing their products. The new magalogs are another attempt to create a wanted tobacco user's lifestyle. other brands will follow the lead to avoid price wars. The environment of the tobacco industry is constantly changing with all of the threats and opportunities.

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the scientific communities in both the United States and Europe have been developing new nicotine delivery systems in an attempt to transform the cigarette industry. Also. They are trying to become a more responsible company in the eyes of the public. Doral. but tobacco companies use several line extensions in order to gain market share in an attempt to overthrow the king Philip Morris. they can gain some market share from Philip Morris. the company is trying to introduce a new kind of cigarette that would directly compete with Marlboro. The brand loyalty to Marlboro will help Philip Morris keep customers. currently third in the standing. Basically. In March of 1999. The new product would be a non-menthol cigarette. Not only that. tobacco companies aim their sites through very general segmentation strategies—men and women. Philip Morris -the industry giant is responsible for the development of Marlboro. Lorillard is the fasted growing brand in the cigarette category. Lorillard is undertaking a series of print advertisements to expand on their commitment to responsibility. RJ Reynolds. Philip Morris is the leader in the tobacco industry. RJ Reynolds.Cases in Marketing Management competitors in the tobacco industry that together hold almost all of the market share. and the everpopular Camels. has undergone some recent changes in their corporation. Other than producing tobacco products. . Currently. the largest food company in the United States. they too rely on a multi-segmented market to bring in the majority of their sales revenue. Indeed. but is still quite far behind Philip Morris. RJ Reynolds decided to sell its overseas cigarette unit to Japan Tobacco Incorporated and concentrate on its United States business.Marlboro is one of the most well-known brands in the world. RJ Reynolds is responsible for such brands as Monarch. and Basic. gradual reduction in nicotine delivery. Kraft's affiliation with Philip Morris has led to much scrutiny from anti-tobacco users and a decrease in profits. Several recent trends in competitive products have shown just that. three of the best-known brands on the market. For example. Lorillard's strength is shown with its creativity. As mentioned before. The weaknesses of competitors are the weaknesses of the market. which is a first in the industry because most companies usually introduce menthol cigarettes. Virginia Slims. as we know it. Much like Philip Morris. the Imperial Group and Brown and Williamson compete for the right to own the third spot in the industry. which is currently second behind Marlboro. the company has expanded and purchased Kraft Foods in 1988. As long as they try new products. Lorillard is responsible for cigarette brand Newport. RJ Reynolds will use the money from the international sale to pay off large debts and to repostion in the market. the idea behind it all is to make a product with a controlled. After whom several international companies such as JTI. with over twice the market share of its closest competitor. Philip Morris has a strong advantage with the Marlboro brand.

Many parts of this value chain have been strategically used to build a competitive advantage in the cigarette industry. and Brown and Williamson.Not only that. RJ Reynolds publicly announced a new type of cigarette called Premier. and limited fire safety problems. smelled and tasted bad. the Imperial Group. As discussed earlier. It was offered in two test markets in Arizona and Missouri. . is a strong indication that RJ Reynolds is doing its best to steal the number one position away from Philip Morris. This work. such as the economies of scale they have achieved by being the biggest supplier of tobacco products in the market.B. Value Chain Analysis Philip Morris creates value in a number of ways. In fact. these new products are not quite that simple for companies to create. it eventually failed. the outsider can easily see that the competition of Philip Morris is trying to gain market share in the tobacco industry and eventually overthrow the strongest company in the industry. such as the flip-top box and the soon-to-be-released slow-burning paper. from product design to getting the product into the customer's hand. safer. Instead. Procordia A. This can be easily seen as a strong indicator that several companies have extensive interest in the development of a superior nicotine delivery device. The markets did not do well and a little over one year later they closed. A product like cigarettes may seem impossible to improve on.. Since Premier's introduction. Even though cigarettes cause cancer and a myriad of other fatal illnesses. only one domestic tobacco company has attempted to commercialize a new type of nicotine delivery device. very little second-hand smoke. research and design are an important part of Philip Morris' strategy. But it had a number of key attributes: no ashes. the product would have established itself as a mainstream smoke. Premier was hard to light. Philip Morris wants customers to know that they are looking out for their safety. Through all of this. along with a large collection of project ideas on the way. A discussion of Philips Morris' value chain cannot ignore their operational advantages. but RJ Reynolds is not alone in its pursuit of a better smoke. Maybe if those who had tried it had taken the time to acquire a taste for it. but time and again they have made minor improvements that have added to their differentiation in the market.Case 103 The Nicotine Rush However. They are constantly trying to find ways to make their products better. A few years ago. RJ Reynolds has continued to work on the product to try to improve the problems associated with it. or more convenient for the customer to use. Other activity has been noted form tobacco industry companies such as JTI. which should reduce cigarette related fires significantly. did not burn down the way people wanted them to. Philip Morris.

gas stations. in-store advertising and prime slotting. and of course for doing the opposite with other companies' products. Philip Morris has built and deployed an effective sales force to build strong relationships with cigarette retailers. and overall marketing clout and prowess have made brands such as Marlboro industry leaders and the envy of marketers everywhere. And although Philip Morris is a megabrand. With eighteen individual brands of smokes. the list goes on and on. bars. Philips Morris' skillful branding is a major competitive advantage for the company. An important ingredient to their formula success has been a clever branding strategy that seems to leave no segment without the perfect brand. Linkages Through the variety of effective linkages Philips Morris has carefully constructed over their years of deft marketing practices. Most of Philip Morris' differentiation has been achieved through aggressive promotional strategies. The individual brands have much more power than the megabrand. Retailers get points for things like point of purchase displays. In distribution. Indeed. it is not a powerful one. In any given store. The company name is stamped on all of its products and customers often know which company produces their brand. A powerful. Distribution is a function which Philip Morris has mastered. Promotion. Philip Morris uses its large market share to help it leverage for shelf space. No cigarette . discount stores. Anywhere that sells cigarettes carries most of their brands. The company has also developed a rewards program whereby retailers actually get paid for giving them freedom in the store. they have built a competitive advantage that is seemingly rock solid. one is likely to notice Marlboro and the rest of the Philip Morris family in a prominent place at eye level. The marketing aspects of the value chain are the points where Philip Morris has related differentiated itself. and they are what have a vivid position in each consumer's mind. each smoker is almost certain to be able to find one the fits his or her particular image or lifestyle. inescapable message that Philip Morris brands are the best cigarettes on the market have been a key factor in the success of the company. and always carries the top brands such as Marlboro. they do not have to use such persuasive techniques to simply get good shelf space.Cases in Marketing Management They also have made a number of production oriented advancements that have allowed them to produce high quality products at sufficiently low cost to buffer profits. They spend a great deal of money and effort getting out the message about their products in all (legal) media. and with great success. and the retailers get money back or credit for the points. and the other firms watch and learn. Although the aggressive sales tactics described above are used to get total retailer cooperation. Convenience stores. This strategy has given Philip Morris a big advantage at the point of purchase by making retailers happy. distribution. Philip Morris is the industry leader. The campaigns they use are seen as cutting-edge by customers and the industry.

As the strong market leader. It can be hard to choose which cigarette to buy and pinpointing the differences between brands can be even harder. the most important thing for them at this point is to not fall asleep at the wheel. The strategy that they have formulated has worked extraordinarily well for them. they should enjoy market leadership for a long time to come. When the first studies that indicated lung cancer was directly related to smoking came out. tobacco companies can help to gain market share and broaden their variety and assortment of products. but light cigarettes can still cause cancer. Strategy At this point. By giving their products such appeal and differentiation. . it would be difficult to make very strong recommendations to Philip Morris for strategic change. Philip Morris was the first company to take a step in the right direction by introducing Marlboro. By offering a lower priced brand. Besides brand name recognition. Since then. Light cigarettes are made with less tar. smokers began to look for substitutes that would provide a healthier alternative. but there is a possibility that some do buy the cheapest brand available. Cost is another concern when it comes to smokers. Due to the high demand for their products.Case 103 The Nicotine Rush seller would think of eliminating Marlboro from their shelves. The filtered cigarettes were believed to be healthier and reduce the chance of developing cancer. for instance. This strong demand forces the hands of retailers. ultra lights have almost no tar in them. The strong promotional tactics that they employ give them much of the power that they have over retailers. more companies have introduced their own version of a healthier cigarette. The concept of light cigarettes opens up the field of opportunity for smokers. Research shows that most smokers are brand loyal and do not pay attention to price. A flexible strategy that stays in touch with changing consumer wants and needs is paramount to remaining on top of the industry. They can now be more health conscious when choosing a cigarette. Potential Segmentation Dimensions There are hundreds of different kinds of cigarettes available in today's market. Tobacco companies introduced such innovations as light and ultra light cigarettes. buyer (retailer) power is limited. They must stay one step ahead of competitors at all times and resist complacency. customers will not be satisfied without them. As long as Philip Morris is able to market their products carefully while avoiding stagnation. Not all tobacco companies have this sort of power. tobacco companies look at segmentation dimensions in order to clarify whom the cigarette is for and what features it has to offer to smokers.

but has failed in the past. Flavored cigarettes are becoming an industry favorite. there are still soft and hard packages being offered to the smoking community. The tobacco industry has been trying to also segment ethnicity. light. So what is an adult? By company standards. and Carlton are aimed at the female population. At the time. Philip Morris has also used market specialization to its advantage. Consumers were outraged and felt betrayed by their brands. the country was engulfed in WWII and people were rationing cigarettes. and ultra light varieties and offer a different perspective on smoking. as well as RJR. Philip Morris pulled "Mild As May " brand cigarettes off the market. Philip Morris markets to adults by using a multiplesegment targeting strategy. Today. Virginia Slims is currently running ads that target many cultures by showing their brand as a cigarette to be smoked by all women worldwide. were exploiting and encouraging minorities to smoke. This little innovation made cigarettes less messy and easier to keep track of. The idea caught on quickly and now most cigarette packages do have the flip-top box. but there is room for improvement. Menthol cigarettes used to be the only choice available for a different taste. There had never been much shift in brand . Gender is segmented within the tobacco industry. Targeting Strategy Philip Morris has adopted the strategy that they are committed to marketing their tobacco products to adults who choose to smoke. These cigarettes come in regular. In today's market. Marlboro was the first brand to alter the appearance of the cigarette package by offering a flip-top box. which was aimed at African Americans. Consumer Behaviour and Marketing Strategy After a failed attempt to target women in the 1920s and 30s. they tend to focus their strength on their top brand. there are many alternatives to menthol and regular cigarettes popping up around the industry. Many critics felt that the tobacco industry. but can be removed for immediate use. Brands like Misty's. The Marlboro Man is an example of how market specialization has been a success with the public. Men have the Marlboro Man. Product specialization has worked well for the company over the last forty years. They have developed a series of brands that are very popular and well known among the smoking population. When the war was over. distributed by RJ Reynolds. Camel also is offering different blends of cigarettes that are made with Turkish and domestic tobaccos. Cigarette box designs have not really changed much since the 1950s. Camel is currently marketing new citrus and vanilla flavored cigarettes. but new studies coupled cigarette smoking with lung cancer. Virginia Slims. Each package comes wrapped in a cellophane seal to help protect the box.Cases in Marketing Management Not all current tobacco companies offer a low price cigarette. all giving off a different taste. an adult is a person who is at least 21 years old. women have slimmer and slender cigarettes. One example is the brand Uptown. cigarette consumption skyrocketed.

The men's hands were calloused and rough. but the product had undergone a drastic makeover. smoking. the Marlboro Man takes you to a place that many consumers have come to know very well: Marlboro Country. beautiful image-filled ads featured in present day magazines. When the Marlboro Man was first introduced to the public. This introduction led to many more educational ads over the years. which in turn has led to silent. Currently. The design is very important to Marlboro smokers. One box was the standard red with black. and ranching out West. ranchers. The "Tattooed Man " gave off the image of a new Marlboro smoker. The campaign was a success and turned Marlboro into a top selling filtered cigarette overnight. Naval officers. Only 21 % were interested in the generic brown box. where each frame pictured the cowboy talking about freedom. Philip Morris had to explain him. Men were portrayed as lean. even considering price and model differences. Without words. Trying to attract old smokers who feared lung cancer. Philip Morris saw this as an opportunity to reintroduce their "Mild As May " brand. The box symbolizes membership into an elite club that recognizes the Marlboro Man as their spokes-person. Marlboro was a filtered cigarette that would be safer for all consumers. Consumers have also become very familiar with the Marlboro flip-top box. Marlboro developed full-page black and white advertisements that featured information on the filter and a new flip-top box. rugged. There was only one problem. as discovered by Forbes magazine in 1987. Philip Morris needed to assure male smokers that Marlboro was the right cigarette for them. The other box contained unaltered Marlboro cigarettes dressed in a generic brown wrapping and at half price. and airmen represented a "Tattooed Man." all showing that filter cigarettes were not at all sissy or feminine. The cowboy emerged as the most popular character and has gone on to represent what a Marlboro cigarette is today. and outdoors oriented.Case 103 The Nicotine Rush preference before. depicting they were hardworking and demonstrating that filtered cigarettes were not sissy. filtered cigarettes were viewed as sissy and feminine. Life ran an article on who and what the Marlboro Man was in January 1957. relaxed. merited respect. At that time. which proves that consumers prefer the bright red packaging. The article's purpose was to draw in men and make them jealous of a lifestyle that they did not possess. tobacco industry . But consumers felt mislead and dropped their allegiances with old brands. bold lettering on it. As the campaign continued. Forbes polled smokers by giving them two different packages of Marlboro cigarettes. Philip Morris introduced Marlboro brand to the public in 1955. researchers used different personalities to find the ideal Marlboro representative. Marlboro launched a new advertising campaign entitled the "Tattooed Man" campaign.

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Although Camel Lights and Marlboro Lights have the highest prices compared to most brands of cigarettes. Friends in high school were a main factor in deciding which brand to smoke. Many started to smoke a particular brand. Female 3. Every person was from the Midwest. but most would but a soft pack if hard packs were sold out. Each group member feels a high emotional connection with their particular brand. Still others. or just the stereotypical Marlboro Man quietly holding his cigarette in his hand. mainly for the convenience. and even on some billboards. the switching costs are high in the tobacco industry. Some group participants liked to stop at the gas station on their way to work or school. like Female 1 and Male 1. All the participants in the focus group now smoke Camel Lights or Marlboro Lights. Almost all the participants smoke the brand they had started with. Overall. Apparently. Three males and three females participated in the focus group.Cases in Marketing Management advertising standards are very harsh. which is convenient for her. but overall advertising has diminished. and would not consider switching brands. One girl had even started smoking the brand her mother used. For example. Marlboro must make use of its minimal space. Male 1 sometimes has trouble getting his cigarettes from the gas station after the weekend because they are usually sold out. a mountain scene with wranglers herding cattle. the participants preferred hard packs. The gas station was a popular place to buy cigarettes. became accustomed to the taste. buys her cigarettes at the bar where she works. but others thought that the wrapping protected the cigarettes . Modern ads depict cattle running through a field. and many attended Truman State University. Some participants were annoyed with the amount of wrapping on the boxes. which is what Philip Morris and Marlboro have been working on for over forty years. and have never changed. Banned from television and any print media that is targeted at people under 21. the people in the group would not switch to another brand even if the price of the competitor's brand was extremely low. The participants basically smoke because they believe they are addicted to the nicotine in the cigarettes. One participant. Price is not even a consideration. Also. each around the age of 21. Some agreed that social smoking was enjoyable. buy their cigarettes at Walmart because the price is cheaper. Female 1 and Male 1 like to smoke while at the bar. Marlboro ads no longer explain anything because consumers are well educated and understand their meaning. Focus group The focus group consisted of people with basically the same demographic information. Marlboro Man ads can still be seen in magazines like Time and Life. Men understand the message and privately long to be a true Marlboro Man. the participants were satisfied with the current product. Many feel that smoking is a relaxing activity. As stated earlier.

Marlboro needs to watch competition (RJ Reynolds and Brown and Williamson). If they can get people to start smoking their brand first. and well-defined target. The tobacco industry is seen by consumers to be very differentiated. The creating of this image as a socially conscious company is a company wide customer orientation. but did not have a solution to the problem. With the 1998 Master Settlement Agreement. What has helped them remain on top is their size advantage. but each was willing to pay for their particular brand. and packaging. Current Marketing Mix Philip Morns' Marlboro is currently in the mature life cycle. Most group members did not like the smell that the cigarettes left on their clothing. and continue with creating a socially conscious company. allowing the companies to charge higher prices and creating high switching costs. . The cigarette industry as a whole is in this life cycle. advertising image. maintain high brand loyalty to keep brand leadership. then they have a good chance of having that person making a repeat purchase. Tobacco companies do not need to lower price because the members of the group were still willing to pay. and cannibalizing the product. but everyone would pay to get their favorite brand. One point that surprised researchers was the excitement for pre-packed cigarettes. It was also noted that the participants still smoked the same brand of cigarettes that they started out with. The objectives for the mature stage are to extend the life cycle for Marlboro by maintaining the brand leader position. Some specific areas that Philip Morris needs to focus on are sales growth. and a problem with the after taste. The price was considered to be high.Case 103 The Nicotine Rush better. where Philip Morris had to pay a large settlement to past consumers for with holding information about the harmful effects of smoking. But these complaints would not stop anyone from smoking. Many have not even bothered to try different brands. profits. customers. smell of smoke. and competition. Although the industry is in the mature life cycle. They all saw the brands of cigarettes as being very differentiated. the cigarettes were not well protected. Soft packs were not liked by any participants. Marlboro still controls a majority of the share and sales are increasing. The tobacco companies need to look at the problems of aftertaste. Tobacco companies might have a marketing strategy with prepacked cigarettes. but a few ideas have been raised. sales still increased from 1998 to 1999. because his girl friend did not like it. The severity of the problems is not great. experience. and therefore the industry has very high switching costs. This is a key point that the tobacco companies focus on. The participants were dissatisfied with the soft packaging. Marlboro is currently in a growth maturity stage for sales growth. This is mostly due to the high brand loyalty of consumers. More hard packs should be distributed. Male 3 had a problem with the smell. The high price of the cigarettes was noted within the group.

smoking could become even more expensive than it already is. The three big competitors in the tobacco industry are Philip Morris (market leader). unwavering brand loyalty. they try to target current consumers. If Marlboro falls into the age-old trap of incumbent inertia. and the new slogan for Philip Morris. They do expect more from the parent company that helps explain the Philip Morris Foundation. and Brown and Williamson. That is only if the prices increase so much that brand loyalty sways.Cases in Marketing Management As mentioned above. with cigarette prices on the rise as much as they are. The case discusses how these stated strategies of Marlboro effect Porter's Five Forces. Marlboro targets adults over twenty-one and will not use anybody in an advertisement who looks younger than twenty-five. Many smokers start smoking in high school and remain loyal to the brand they start smoking. They wish to retain current customers and try to discourage youth smoking. in 1997. If government raises the price per pack as a standard and consumers remain brand loyal. the company uses a substantial amount of promotion and goodwill to keep its highquality name. Buyers are an overall weak force in that they are so brand loyal. more price-sensitive than they currently are. To combat these issues. . For the first part. Though reality and their strategy are incongruent. cheaper non-premium brands are catching price sensitive customers. and it will take a lot of work for the company to maintain its current market share. Pending litigation. taking place in 10 cities over January and February. Due to the price increases delegated by the government. a soap-opera actress who made her singing debut on a CD which was given away with a free pack of cigarettes. If such price increases persist. profits could increase for the company. The biggest problems that Marlboro faces today are health problems and advertising to children. there is a good possibility that the corporation will lose their number one spot in the industry. profits have increased even with stricter laws and regulations. the company is constantly giving to charities and running television commercials to promote their image. Marlboro began a concert series known as the "Dueling Diva" concerts. Taxes could be imposed to increase price per pack. The winner at each location won a spot to open for Martha Byrne. For example. a community service charity ran by the people of Philip Morris. Indeed. consumers are more likely to become. due to the high and unusually strong brand loyalty of the market. Newcomers are plentiful. RJ Reynolds. The People of Philip Morris''1 The main reason buyers are a weak force is because of their strong. competition could increase as well. Philip Morris (Marlboro) and RJ Reynolds (Camels) own the two main brands. which would hurt profits if consumers start buying cheaper brands. in the future. "Working to Make a Difference'. they will pay inflated prices for product.

Marlboro is expected to remain strong for years to come. By definition. they have maintained their market share at twice that of their closest rival. However. It has the best position according to a recent research study. Although some of the new consumers come through the means of brand switching. Instead. The company awarded $ 100. Indeed. there are many creative individuals who . through the use of the aforementioned promotions. there are very few new customers during the stage. It simply encourages retailers to verify the age of those purchasing tobacco products. but to benefit society as well. The corporation uses this publicity. These two situations are but a few of the several examples that Marlboro is a societyminded company. However.Case 103 The Nicotine Rush Marlboro saw this as an opportunity to not only sell their cigarettes with the promotional CD. the company has done much to promote their goodwill through generous donations to various charities. Marlboro is trying to make known that it does not support children smoking. Marlboro Company has a longstanding relationship with National Newspaper Publishers Association.000 for the establishment of a Black Press Institute. the company. Also. will more than likely turn the negative growth rate into a positive one. As far as advertising itself is concerned. Indeed. the company is very limited due to the constraints put upon it by the United States Government. The programme's goal is to facilitate student transfers from community colleges to universities. Marlboro' promotion is not always offered with a purchase. the University of Memphis was the happy recipient of one of Marlboro' donations. For example. By doing so. which is a big part of the reason why the growth rate is starting to decline. in order to improve teacher education and diversify the pool of prospective educators.000 people per day become regular consumers to match about the same number that quit smoking all together. to defend against competitors Governmental regulations have increased recently. for its products on television. For example. an estimated 100. Furthermore. directly. through press releases and regular news.000 to University of Michigan for the progmme called "Extending the Bridge: Community Colleges and the Road to Teaching". The company was "providing opportunities for local bands to showcase their talent. events such as the Winston 500 are no longer allowed to be sponsored by cigarette makers." However. nor is it allowed to advertise. Marlboro does not fit every aspect of the maturity stage to a tee. Marlboro faces much opposition in the way of advertising. This relationship became solidified even further when the corporation gave over $35. as an additional source of promotion. but not for any of its products. that only adults who chose to should be allowed to smoke. the company markets its brand-name by sponsoring a program known as the "We Card" programme. the company is not allowed to use any sort of character that might appeal to children. Marlboro is also a regular advertiser on television. Through this. However.

and the company remains quiet about the whole ordeal. but the press seems to focus in on the bad points of the tobacco industry.' and 'The latest in lip sticks. Benson & Hedges or other Marlboro brands can be found. through the use of both traditional and creative forms of advertising. we travel in packs.Cases in Marketing Management work for the company. Even with all of the positive publicity toward Marlboro. very little will outweigh the negative issues in consumer's minds. and distrusting of the company as a whole. They have begun to run ads in alternative weeklies in select cities such as San Francisco to promote parties in nightclubs for smokers. a one to two page advertisement can be found relating to Marlboro. this industry is booming! . Ads carry targeted copy such as 'Like you. This silence makes customers weary of the products. forming America's consciousness. In nearly every periodical. It is well known that there are several law suits pending against Marlboro." This is not to say that the company does not run regular ads as well. Yet. One of the biggest problems with Marlboro' promotional campaign is its lack of effort towards the legislation towards the company. Again. Marlboro has remained the industry leader. Marlboro even goes so far as to buy "space over urinals and on the doors of bathroom stalls. Not only that. because they do. Virginia Slims.

48 billion dollars. • note the stress that the company lays on consumer satisfaction and also their use of technology in an innovative fashion to advertise and promote their interests. Ford introduced the world's first assembly line for cars.32 billion dollars. By 1923 more than half of America's vehicles were made by Ford. Visteon and Hertz. Jaguar. This became known as the Ford Model T. automotive. As far as Ford Motor Company can remember. a man by the name of Henry Ford started what is today the Ford Motor Company. Results reflect increased vehicle sales offset by higher warranty and costs related to the Firestone recall. Recently.2 billion dollars. this is more than any other . there was a huge demand for them. Ford. Ford profits have increased significantly. It revolutionised the industry. Net income from continuing operations decreased 10% to $4. Ford credit. 104 THE MAGIC OF FORD Objectives After going through this case. Today. In 1903. Last year's total sales went up 13% to become 163 billion dollars and profits also rose 10% to become $7. It was only experimental at the time. however. It started it in 1896 when Henry Ford built his first car. Lincoln and the Mercury and Volvo brands. in a small wagon shop in Dearborn Michigan. Once people realised what a wonderful novelty this was and how it would greatly facilitate their lives. they think of just Ford. In order for the company to be able to satisfy this heavy demand. total revenues increased 9% to 127. the Ford Motor Company is the number two company in its industry as well as the number two industrial corporation in the world. for the nine months ending 30/09/06. When the average person thinks of the Ford Motor Company. is incorrect. This thinking. Ford also produces vehicles under the names of Aston Martin. you will be able to : t assess the various strategies used by the company to climb on its way upward. Ford is divided into four major components. but less than ten years later in 1908 he introduced a more updated version to the public.Case No.

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Nasser states. This case highlights certain strategies of this corporation that propelled it to its current number two spot in its market. the customer will tell others they are satisfied. When you purchase a Ford product. if you provide the right product at the right time. pricing strategies as well as internet marketing and other forms of product distribution. the consumer knows that they are receiving a high quality product. William Clay Ford. Each one of these strategies plays a key role in the success of the number two motor company in the . Ford strives to connect with their customers as well as reach them. Jacques A. Toyota. because it is cheaper to keep an old customer rather than to attract new ones. Ford Motor Company admits that its greatest asset is the trust and confidence earned from its consumers. product strategies. you are truly purchasing Ford quality. no matter where aFord is produced. When people see a Ford trademark. Jim Vannier. Nissan and Volkswagen. and more and more people will be willing to consume their products. "we will be a leader in corporate citizenship if we are a well trusted company that people believe contributes positively to a society and uses its resources to create a more sustainable world". reliability of performance and value. but in occupation as well. Honda. These opportunities were not just in transportation. They try to use relationship marketing. He realises that the best cars are socially and environmentally responsible. you'll get the numbers". There are many aspects of marketing strategies that will be discussed in this case.Cases in Marketing Management car company ever. Ford's main automotive competitors are General Motors. The reason for this is that the majority of Ford vehicle parts are designed by Ford engineers. The above quotes make it quite obvious that the top executives of the company all concur that customer satisfaction is of the utmost importance in succeeding. Today. People want to do business with companies who care about them and their environment. If they keep the customer happy. Here and Now The twentieth century was profoundly affected by the innovations of Henry Ford. quality. second only to the General Motors Corporation. promotion strategies. such as. Chairman of the Board for Ford Motor Company says that satisfying customers goes beyond great products and services. The invention of the automobile gave opportunities to multitudes of people. One of the ways that Ford has established its spot as the number two company in the automotive market is its focus on customer satisfaction. Ford wants them to associate that with a trust mark of certitude. Chief Executive Officer. Daimler Chrysler. Ford is the number two manufacturer of automobiles. Manager of Ford's advertising and marketing programs admits "if you listen toyour customer. manufactured in Ford plants and assembled in Ford product lines.

someone else will. accommodate their customer's needs. Since Ford is ranked the number two company. The Edsel looked like some kind of giant fish sucking a lemon. allowing [them] to prosper as a business and to provide a reasonable return for [their] stockholders. and with such a large span of people this was next to impossible for becoming a success. Without a quality product. Their mission shows their devotion to constantly improve and while improving. its main competitor is quite obviously the number one company. Ford's biggest mistake in marketing the Edsel was their failure to decide on their target market. The Arena Ford has many competitors. the owners of the business. Objective of the Company The mission of the Ford Motor Company is very basic. Ford sees their customers as one of the most important things. "[their] mission is to improve continually [their] products and services to meet [their] consumer's needs. the better the worker. General Motors Corporation. For example. 1) Quality: they put the quality of their products first and foremost. It is all about feeling that they are part of the Ford Team. The Edsel became known as one of Ford Motor Company's biggest flops. their competition would eventually have a huge advantage over them. 5) They consider dealers and suppliers to be their partners: without the dealers and suppliers Ford would not be able to manufacture the things they need alone and therefore would not be able to produce as many vehicles as there would be a demand for or even be able to distribute them all to people. They also want their employees to think like consumers and not like employees of a car company. Surprising as it may sound.Case 104 The Magic of Ford automotive industry. it is said that the look is not what caused its downfall. Many people tend not to realise just how important the marketing of a new product can be. It plays a huge role in the success or failure of the new product. 4) Employee Involvement: Ford wants each and every employee to be involved in their company. Once they start thinking like a consumer. They tried to market their product to everyone. because they would have newer and better product lines to offer. . they know customer satisfaction also plays a gigantic role in their success. Ford's five main principals include. Although the thought of such an odd-looking car does not sound appealing. if not the biggest. people will have no desire to waste their money or jeopardize their safety. the demise of this vehicle was due to poor marketing strategies. 3) Constant Improvement: If the Ford Motor Company allowed themselves to remain stagnant in their environment. The happier the employee. they can cater more to the needs of their actual consumers because they will know what the consumers want. 2) Customer Care: If you don't take care of the Customer. many people may remember many years ago when Ford came out with a new vehicle called the Edsel.

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The remaining 32 states have secondary laws that allow law enforcement to ticket a driver for not belting up only after the person has been stopped. The Catch A car. If General Motors develops a new feature or automobile. in order to include more areas and allow for more stringent tests. and the public overwhelmingly supports them. The main focus of the act was to cut down on all the urban smog. Ford must be right behind them with their most innovative invention. also and American company holds 29.Daimler Benz acquired Chrysler and Ford bought Volvo. maintained. to wear your seat belt.percent increase from the previous year. In the past years the following mergers have occurred. General Motors. and one state does not have any seat belt law. In 1990 the government amended the Clean Air Act. Among these regulations are seatbelts. In 2005 Ford sales raised up to $163 billion dollars. This is quite extraordinary. This is quite impressive considering that the number one automotive company. Ford has 25. Primary enforcement seat belt laws allow police to stop and ticket a driver for not wearing a seat belt. The government has also made inspection and maintenance programs more expanded.4%. or ticketed. according to a recent public opinion . Of the top 5 best selling cars in 1999. the operator of the vehicle is responsible for obeying many regulations as well. and viceversa. The total market value of the Ford Motor Company is approximately $56 Billion dollars and their profits are well over $7 billion. this way Ford is not allowing General Motors to become too much larger than they already are. The automotive industry has fierce rivalry among its competitors. and operated can become a deadly weapon. It has become extremely important. safety belt laws work. Obviously. The amended act demands that polluted cities must sell improved gasoline that helps to reduce ozone forming Hydrocarbons and Carbon Monoxide. for another violation.4 % of the automotive market share while following close behind them the Ford Motor Corporation holds 25. carbon monoxide and particulate emissions from Diesel engines and to help decrease acid rain and toxins that motor vehicles contribute to. for instance. Ford Taurus appears as number three and Ford Escort appears as number five in a recent survey.1%.1 % of the market share presently. This was a thirteen. Ford bought Volvo in order to be able to properly compete with General Motors. Three out of four Americans support safety belt laws. just like any other routine traffic violation. This means that the top two companies hold more than 50% of the market share. if not properly assembled. Seventeen states and the District of Columbia have enacted these laws. Once inside an automobile. airbags and shatter proof windshields. also an American company has 29.Cases in Marketing Management General Motors. The United States government regulates many aspects of the automotive industry.

Currently. and employee involvement in environmental activities. and stepped up enforcement of those laws. they do it because it is the right thing to do. Ford is working on a new line of intelligent vehicles. They create vehicles according to the specifications of the Research. audio systems. Stronger safety belt and child passenger safety laws. cleaner manufacturing. Ford organised a weekend clinic in which the automotive safety office educated fifty-five people and their children on the proper use and installation of child safety seats. The Design Packagers are the people who decide the most appealing way to package the final product. For example in the Detroit area. The voice activation will also be implemented into the navigation system. These vehicles will enable the driver. Diversity makes the business world go round and no one knows this better than the Ford Motor Company. and other electronic things inside the automobile. cleaner operating vehicles. this is where the famous black inventor George Washington Carver performed many of his experiments. Ford is constantly trying to improve their product development and expand their innovations. heating and air-conditioning. The researchers find out what types of things that consumers would like their vehicles to be equipped with. through voice activation. They sponsor programs to educate our children on environmental cleanliness and responsibility. The Research and Advanced Technology Teams then decide which technologies should be used in the new products. Design Packaging and Financial Analysts. Corporate responsibility towards society Ford Motor Company sponsors many programs to better the community and their safety. They demonstrated this in the consumer's actual vehicles. Next. to connect to the internet. This is up 1 % from 1998. but culturally as well. Design Packaging and Financial Analysts. The financial analysts put the numbers together to figure out exactly how much money all of the above will cost. This way they are producing what the market wants. designers and engineers along with testers actually create the vehicles. Ford Motor Company. [Their analysts Develop product cycle plans that help forecasters determine [their] approach to different markets. cell phones.2 percent of its employees as minorities. The Ford Motor Company not only is socially active. Innovation or Death The Ford Motor Company values heir Product Analysts. are the most effective steps we can take to save lives. Ford provides financial support at many historically black colleges such as the Tuskegee University in Alabama. They also sponsor company -wide recycling. Ford is adapting to each . Ford is also committed to environmental cleanliness. The people who start the product cycle are called the Research.Case 104 The Magic of Ford survey. as of 1999 has 23. recyclable components. Ford does not do these thing because they have to.

trucks. Another example is Ford Trucks. The Taurus station wagon for instance is a great family car with tons of room. luxury cars. wheel type. the odds are that Ford will satisfy you. which includes a wiring harness and an H. This is exhibited by its slogan of it is what it was and more. Each of Ford's different types of vehicles have many different options that come along with them. The third and final example is the Ford Taurus. commercial trucks. in the convenience group of options. When the word "tough" is thought of. The 2001 Explorer for example.D. The above three examples are only a small sampling of what Ford offers. Product Targeting Ford Motor Company has different types of cars. personalities. trucks. which are each targeted towards many different markets of people. luxury cars and more. sports car. They offer small cars. As soon as new technology becomes available. it seems that it would be very unlikely that the Ford Motor Company would be using that to attract women. seat type. This implies that the targeted consumer would be old enough to remember what the mustang was when it first came out in the 1960's. Its slogan is "Ford makes it smart to buy American. For instance. wagons. They can customize the engine. vehicles. There is even a trailer tow prep package.Cases in Marketing Management change in order to be able to bring their customers the most innovative and convenient products possible. there would be many choices. the importance of a target market is extremely high. However. Ford Motor Company manufactures sedans. Loss of a targeted marketing focus usually means a loss in sales. genders and economic standing and more. In the XLS sports group anything from chrome steal wheels to wheel moldings." The target market for a Ford Taurus is a family. women are generally not the first thing that comes to mind. Their slogan is "Built Ford Tough" The toughness implies a target towards rugged men. transmission. rear axle. Product Mix The Ford Motor Company has such a wide selection of vehicles in order to satisfy every different type of potential consumer.715 dollars. Ford Motor Company is among the first few to try to implement it into their vehicles. without any extras. Because of the fact that the word "tough" is used. seat equipment . yet it handles like a sports car. After that. As the company learned the hard way with the Edsel. Ford has a different car targeted towards different age groups. should the consumer decide that he or she would like to add perks. the consumer has the option to add even more options. If you are looking for it. runs to roughly $25. midsize cars. vans. tire type. drive. minivans. you can add anything from a cargo cover to speed control. SUVs. for example. is targeted mainly at the middle aged. convertibles. The Ford Mustang. Flasher for only $355 dollars extra. and even environmentally efficient cars.

Technical Service Information and their website. trying to find a Good Samaritan who is willing to give you a jump is a rarity. This promotion and all of the above promotions appeal to people who are thinking ahead to the cold winter months. Roadside Assistance. clamps. and Mercury dealerships specialize in the servicing of their own vehicles. tips for vehicle safety. This includes reminders of when your vehicle need to be serviced. do it yourself pointers and online manuals. links to Ford Company Specialists. online shopping. Lincoln. This once again appeals to the person(s) who is preparing for the . A radiator is not actually something you would want to break down in the middle of a snowstorm. It is a good idea to replace your battery before a new winter season. The company also offers the Explorer in 10 different colors for the exterior. front or rear turn rotators and drums. tough series battery. top of all fluids and a free 12 pt all weather check of hoses. The Brake promotion comes with the Motorcraft brake service. When it is freezing outside. They are also offering a Silver Series Battery for only $20 dollars more. Brake Service. and Batteries. With the plethora of the above options. private communication. if not more. Services Offered When you own a Ford vehicle. The promotion includes replacement of brake pads or shoes. belts and more. The radiator service includes. you can register for Owner's Services. if necessary. shocks replaced and batteries as well. Collision Assistance. offers and discounts exclusive to people registered for the service. The battery promotion is offering a Motorcraft tested. The promotion will also check the brake's hydraulic system and repair. maintenance information. Ford. It also includes warranty guides. The way the plan works is. This winter in New York has been predicted to be one of the worst we have seen in a while. The company also offers Extended Service Plans (ESP). how could anyone not find what they are looking for? Each one of the 24 cars manufactured under the Ford name has many options as the Explorer. With the extended Warranty Plan and the Factory unlimited Warranty. The web site includes links to safety tips and Frequently Asked Questions. Promotion Strategies The current promotions that are offered by the Ford Motor Company are Radiator Service. The Ford ESP cost protects the consumer from increasing prices in labor and increased prices in parts. The dealership is a wonderful place to go to have your breaks serviced. Other services that are offered by Ford Motor Company are a Customer Assistance Center. you are able to choose a plan that suits your needs. you pay a small deductible anywhere from $0-$ 100. Each promotion for a new battery comes with over an 83-month warranty.Case 104 The Magic of Ford and much more. All of the above promotions are wonderful for the upcoming winter months.

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Ford Credit also has a commercial lending operation.Cases in Marketing Management harsh winter to come. select a vehicle. They are the first company to give consumers the option of product comparison. which are backed by Ford Motor Company with a 100 point inspection. The new web site allows perspective customers to compare Ford vehicles to other cars made by other manufacturers. With weather conditions like that. which caters to light truck fleets and heavy trucks. "With our new design we incorporated new technologies that deliver more visually exciting content". feature description. who needs to worry about brake failure? Pricing Strategies One of Ford' pricing strategies is the fact that they try to help the consumer finance a Ford vehicle. The first is the Red Carpet Lease: The consumer is offered flexibility for payment. Distribution Internet Marketing Ford's newest web site for Ford division cars and trucks is www. The web site is so user friendly that consumers can just go right from one Ford vehicle to the next with out any trouble. there are advance payment plans and Additional Payment Programs. The online calculator will then give the consumer an estimated lease and retail payment. model. All that needs to be done in order to do this is. a bad winter generally means a lot of snow and ice.com. Ford offers its consumers many plans to choose from in order to find the financing option that best fits their needs. make. .Fordvehicles. then Ford also offers a whole line of pre-owned vehicles. The Municipal Financing is so convenient that it can be calculated on the internet. The section of product comparison on the web site comes complete with photographs. There are so many different financing options that are offered. that finding a plan that is right for you has become easier than ever. competitive pricing. financing and warranty information. Trisha Habucke states. The finance rate is based on your credit and the terms of the transaction. safety options. Ford financing company provides a variety of products and services to both. and product line. The second financing plan is Mobility Financing: Mobility Financing offers flexible and convenient financing terms for their physically challenged consumers who need adaptive equipment in their vehicles. depending on which one is best for you. If buying a new vehicle is not financially possible. The following are only a few of Ford's financing options. Ford division internet coordinator. Ford credit has earned a top ranking place in the world of automotive finance by providing loans and leases that are convenient and affordable. Being that. Ford wants to make it as easy as possible for consumers to be able to drive a Ford. They also specialise in services such as commercial lending and municipal financing. the dealers and the consumers. Ford is committed to bringing their customers total brand experience.

for example are rugged. once per month all of the internet coordinators get together to share their most recent e-commerce news and best practices. They went from a little wagon shop to the second leader in automotive sales. Erin's Regional Manager realised that if they had one person whose sole job was to be dedicated to the internet. Hughes started the first internet club for Ford dealers. Hughes says "my job is to provide our dealers with the resources and technology needed to help them sell more vehicles on Main Street and E-Street". on television movies. Ford advertises on Television quite often and also on the radio. the "No Boundaries-Ford Outfitters" slogan appeals to them. The internet is a way reach millions of people. Ford attributes a fair amount of the success to the internet. The company realises that is has been a powerful tool. Erin later became the first Internet Customer Satisfaction Coordinator. Their advertising agency. can they some day be the number one automotive company. and ambition for the satisfaction of the customer. if we don't save our planet now there will be nothing left for future generations. J. Advertising also plays a large role in the distribution of Ford Motor Company's products. In addition. Ford is also a very well rounded company in that they are very environmentally concerned. Erin Hughes. admits that her greatest tool is the internet. Ford knows that people with certain types of personalities are attracted to certain types of cars. beating out the General Motors Corporation? . With Ford's experience and high understanding of. When Ford began their Internet market. Walter Thomson found that 210 test participants concurred that the Ford website deserved a high rating for its complete content. Ford also has their slogans and product photographs on major highway billboards a cross the county as well as scoreboards at sporting events such as baseball. Previous slogans that Ford had etched in everyone's minds include things like "Have you Driven a Ford Lately ?" with a catchy little tune along with it. Sometimes. you will even catch a glimpse of the Ford logo during commercial breaks where the broadcaster will say something along the lines of sponsored by Ford Motor Company. since Henry Ford first established it.Case 104 The Magic of Ford For example. It is nice to see that people realise. the company would prosper. The Ford Motor Company has come a very long way. they did the most extensive research even conducted by a car company. They have been around for almost a century. Explorer drivers. who is a Ford employee since 1999. Ford has elaborative marketing strategies as well as distribution strategies. Their web site was extremely easy and fun to use. Since the position of Internet Coordinator is now more common at Ford Motor Companies.

As yet. . In the course of road-widening activity. in a suburb 7 kms away from the city-centre. Municipal authorities have offered a free alternative shop-space to Get-well Medico. the municipal authorities have decided to demolish the building. The municipal decision is duly cleared by the courts of law. This suburb is a up-market locality having wealthy residents. there is not a single hospital or dispensary or a medical shop in this locality. housing the 'Get-well Medico'. 'Get-well Medico' is a reputed medical store. But this space will be too small and too expensive. The proprietor of Get-well Medico is also considering the option of purchasing a shop-space in the central part of the city.Objectives After going through this case. located along a busy street in a densely populated area of the city. you will be able to : • • • underline the offer of alternative space by the authorities after demolition analyse the proximity and location problems which creating hurdles assess shop-keeper's decision to purchase shop-space in the city.

the organisation was among the top ten sellers in the field. you will be able to : • • • • • find that fierce competition plunges profit-making fertilizers firm into huge losses analyse restructuring and suspension of unviable products underline the marketing and distribution tie-up with US firm explain the US firm's decision for a second distributor recognise the US firm's insistence on distribution and marketing priorities Paramount Fertilizers is a limited company. The GM exhorted the top officers to find out ways and means of reducing expenses. Mr. was appointed as General Manager. Trichy and Thanjaur in the State of Tamilnadu. The company was one of the pioneers in the industry and had branches at Coimbatore. at Guntur in Andhra Pradesh and a Sales Office in Bombay. Rama Murthy. situated at Ooty. degree. thus. a leading industrialist. Sunderesan. lay off the workers and faced severe financial crisis. engaged in the manufacture and marketing of fertilizers and rose-mixtures in India. a balanced turnover of around Rs. and look after the technical as well as marketing coordination of the company. with a M. was the promoter of the organisation and acted as Chairman-cum-Managing Director from the day of its inception. Kesavaprasad.D.Case No. in the Nilgiri District. Since it had a professional marketing set-up. 2 crores was maintained yearly.Tech. the company had stiff competition and was forced to reduce the output. There was a good demand for their products and Mr. 106 PARAMOUNT FERTILISERS LTD. Madras. to bring back the company to its original glory. Objectives After going through this case. motivating the sales force and. For nearly 10 years. having 15 years of marketing experience. that . a middle-aged man. was working as the Marketing Manager and under him were a few Sales Executives and Sales Assistants at the regional level. It was found. During 1963. Mr. who was to report to M.

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the oil crisis and subsequent inflation forced M/s. retired and was retained as Technical Advisor to his M. However. to increase the market share and profits in future. Paramount since it had a professional marketing team and a reasonable financial back-up. M/s Paramount was concerned and seriously discussed the possibility of cancelling the tie-up if a joint distributor was to be appointed. Since. the test marketing was encouraging and the new products were soon selling alongwith old products.B. In the meanwhile. Hence. was a leading manufacturer of fertilizers. M/s. Though the Marketing Manager of M/s. a sea change in attitude came over in the Management of M/s. M/s. lllingworth. M/s. it was decided to suspend the production of those four uneconomic lines and to go ahead with the other six products in full steam. Hence. they thought that M/s. to draft an initial 5 years agreement. the M. M/s. They now had made up their mind about M/s. both of them joined. Pennsylvania Insecticide was a giant American company. lllingworth being appointed as the second distributor in the region. Pennsylvania had been looking for a second distributor. he also succumbed to the pressure and accepted the new idea. And they were interested in marketing their fungicides in India.As were recruited to head three new branches. Pennsylvania agreed to relax the credit facility further by a month. The mutual agreement was extended for five more years. two products were of purely seasonal nature and the off-take was always far below the breakeven and only the other six products contributed towards the company's profits. As a special case. it was decided that the company should either diversify or look out for the marketing rights of insecticide or fungicide manufacturing company. Pennsylvania for distributorship in Tamil Nadu. the Pennsylvania outfit felt that it would be better to appoint one more joint distributor. Paramount. viz.D's chair. who succeeded him in the M. they approached M/s. M/s. The turnover and the profits showed three-fold increase. two products' life cycles were very poor. Further.D. Towards the end of 9th year of the tie-up. Three young M. lllingworth to concentrate more on marketing activity.Cases in Marketing Management out of 10 product lines in existence. In the meantime. Paramount was very much against the proposal. However. They were ready to give the distribution and marketing rights to M/s. A giant Indianised British organisation. son. Pennsylvania refused to resolve priorities in supply matters and contended that the delivery can be made only on first come first served basis. As such. since the products were under great demand. A.B. On learning of this intention. Andhra Pradesh and Kerala. lllingworth would be an ideal choice. .

as a management trainee in the Sales Department. However. air-conditioners and refrigerators. analyse illogical demand forecasts and spiralling costs of sales. Tristar's estimates of the stock requirement of its 800 dealers were invariably faulty. each of which controlled two sales depots. • After obtaining a management qualification. . recognise its occasional system failures. Often. within eight years. 107 TRISTAR Objectives After going through this case. distribution and insurance. leading to a collapse in the distribution system.Case No. Kaushik joined Tristar. its refrigerators rolled out of a plant at Jalgaon in Maharashtra. Mr. Tristar had set up eight branch offices across the country. Tristar had two product lines viz. he became Sales Manager. it became necessary to transport goods between the 16 sales depots to bridge gaps in stock levels. you will be able to : • • • find a firm with a simple marketing and distribution network. where they were then held in stock until invoiced to dealers. While the company's air-conditioners were manufactured at its Thane factory outside Bombay. underline the competitor's "45-days credit period" facility: plunging firm's sales by dealers. A typical branch served 50 dealers. caused by external forces. goods were dispatched to these 16 sales depots. due to various reasons including political uncertainty and acts of God. It was a sudden rise for him and. The distribution system was simple : based on the demand estimates supplied by the branches.

Dealers stock-out became a common problem on several occasions. Illogical demand forecasts were adding to sales and distribution costs to the tune of 6. due to 45 days credit given by the competitor for its brand 'Pleasant' against the 30 days by Tristar.Cases in Marketing Management Tristar's split level air-conditioner started experiencing erosion in the market share base.3 % of sales. Tristar was keeping its customers waiting for upto three weeks before it delivered. Transit insurance costs went through the roof to an alarming 35 %. . Orders would pile up with dealers who always used to deflect consumer preference to a rival.

which Mr. supply of engineering items.Case No. he diversified in many other fields such as gas agency. Ramrao was supplying his products and had created a goodwill amongst the small shopkeepers. Ramrao that his original business had a wide scope and that if the marketing of these products is done scientifically. Ramrao Panase had a small business of manufacturing papads. his products became so popular that he started getting orders from other towns also. However. During these years. however. D'costa was to retire within 2 to 3 years. He took premature retirement and joined hands with Mr. D'costa knows that if the business is to be expended. He told Mr. RAMRAO PANASE Objectives After going through this case. 108 MR. these products will become very popular and create a name of its own in the consumer market. Mr. After a few years. Ramrao. There were about 10 to 12 towns where Mr. wafers. . toffees and biscuits. etc. the weaknesses in the strict follow-up of terms and conditions. he had come across a person who became his good friend also. D'costa. This friend. D'costa gladly accepted. Mr. He had a vast experience of selling these consumer products. While doing the other businesses. Mr. it has to have a distribution network and a marketing team. was General Manager of a company manufacturing chocolates. Mr Ramrao requested him to shoulder this responsibility and offered him a partnership. He was doing his business himself. you will be able to : • • • find an entrepreneur expanding and diversifying his business into a partnership firm recognise a firm's well-knit distribution network and marketing team underline. Since Mr. his main business was increasing so much that it was not possible for him to give personal attention to it. while dealing with distributors analyse the consequential effects resulting in huge outstandings • Read the following case and answer the questions at the end. jams and many other daily needed things.

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After one or two transactions. Every time these two distributors gave some lame excuses like someone's death in the family or the main proprietor was away from the town and so on. The District Manager and the Sales Representative did neither recommend termination nor did they stop booking orders with a possible fear that the demand created in the market may get disturbed. M/s. moderate and strong letters indicating that the repetition may compel the company to terminate the contract. While appointing the distributors. And every time. Anil Dhanya Bhandar who were direct dealers were appointed as full fledged distributors. both these dealers reluctantly made the part payment with an assurance to the District Manager incharge of territory that they will complete the security deposit amount within the next 6 months. As per the terms and conditions of the company when the security deposit money was asked. Sujata Provision Stores and M/s.Cases in Marketing Management Accordingly. the distributors were appointed all over the country. the District Manager had to run to collect the outstanding payments. the cheque bouncing continued. The company could not take the decision to terminate the contract since the heavy outstanding payment was due. it was observed that the cheques of these two parties started bouncing. However. . The company wrote mild.

tape players. discuss their plans for commercial production. Those who are big names in stereo systems also mostly ignore the market for car tape players. they had plans to take up cassette players. Both Joshi and Deshpande come from middle class families. Sudhir Joshi and Kailash Deshpande are two brilliant electronics engineers. they decided to manufacture car radios to begin with hater. they had displayed a good aptitude for practical work. During this time. As such. Right from their college days. for the commercial production. Joshi and Deshpande found that they were making around 10-15 sets every month. The market for car radios and tape players is dominated by small scale manufacturers. Surprisingly. recognise. However.Case No. Joshi and Deshpande developed a prototype. they had developed different electronic gadgets for home use. He asked these young engineers to make more sets which he offered to his clients. with product-acceptance. After their graduation. they decided to set up their own business. The only outlet . He found the performance very satisfactory. better-known names for radio receivers are not making car radios. raising finance was always a problem for them. you will be able to : • • • • • find two engineers developing car radio. Majority of them are from Delhi-Punjab area. 109 CHANNELS OF DISTRIBUTION Objectives After going through this case. underline market domination by small players. analyse large-scale production and distribution problems. They offered it to a friend of theirs who owns a large automotive service station. emerging distribution problems.

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the two partners decided to go in a big way. They found that their quality was superior and prices almost 25% lower than the competitors. At this juncture. They were confident about the production.Cases in Marketing Management that was used for marketing was this automotive service station. but. would they be able to do the distribution on an all India basis? .

Case No. you will be able to : • • • find sports material firm catering to rural markets. The company receives orders with total payment in advance. Objectives After going through this case. Ashoka is known for its quality image. . underline resistance to discount strategy to avoid compromise with quality. parcels. It concentrates on rural markets in Maharashtra. Ashoka Sports Ltd. channels. Ashoka does not permit any slash of price or discount by the retailers on any grounds as the company feels that it will tamper its quality image. since it follows Just-in-Time (JIT) policy. is a leading name in sports material. recognise meticulous follow-up of distribution schedules. Retailers re-order throughout the season of six months (From November to April). The company seeks assurances of premium service and quality display from its retailers. The company is very selective about its distribution and follows Just-in-Time (JIT) Inventory and the 80-20 principle. It ships sports goods to its retailers by road. courier. and trains. 110 ASHOKA SPORTS LTD.

This scheme shall be particularly targeted at the lowest income consumers. you will be able to : • • • find PDS flops. recognise separate cards and prices for different segment consumers. The main objective of this scheme had been to ensure the supplies of the essential consumer items to the 'vulnerable' sections of society. underline a new TPDS proposal for lower income groups. with failure to reach target audience. . The government is now proposing to launch a new "Targeted Public Distribution Scheme" (TPDS). However. This scheme shall segment the lower and higher segment consumers through separate ration cards and prices for the items sold. The Indian Government has implemented the scheme of Public Distribution System (PDS) for foodgrains and other essential consumer items.O bjectives After going through this case. it has been found that the scheme has not been very efficient and many of the 'vulnerable' society members could not avail the services of this distribution system.

To streamline these tasks. and superior service all keep the customers coming. Wal-Mart is currently the largest retailer in the United States. you will be able to : • • • find WM living upto its motto : quality products and service for low prices. These outlets range from its Wal-Mart discount stores. Wal-Mart Supercenter combination discount and grocery stores. manage inventory in its warehouses.071 overseas. neighborhood markets mid-sized grocery stores. A Logistics Leader Several factors contributed to Wal-Mart's enormous success in the American retail market. The company must co-ordinate with its more than 85. One of Wal-Mart's biggest strengths .appears only behind the scenes as the biggest retailer in the United States. The Founder. Centers are spaced across the country so that no store location is more than a day's drive away.118 retail locations in America.Case No. Arkansas. underline its history. Today. to the asda stores in the United Kingdom. • The first Wal-Mart was opened in Rogers. Wal-Mart's marketing logistics demands are considerable. Wal-Mart set up a "hub-and-spoke" network of distribution centers. recognise perfection in the development of worldwide logistical systems and local distribution centres. and another 1. Sam Walton envisioned a store offering high-quality products and service for low prices.000 suppliers. 112 WAL-MART : A LOGISTICS LEADER Objectives After going through this case.its logistics . Sam's club warehouse stores. vast selection. analyse WM's logistics expertise in depth. growth and expansion strategies. in 1962. Its low prices.2 million employees and operates 3. and bring that inventory to its 20-feet-tall retail shelves. Its . Wal-Mart employs more than 1.

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As a result of this forward-looking move. Wal-Mart Moves to the Internet Wal-Mart capitalised on its logistics expertise when it took to the Internet with Walmart.000 to 70. Global Expansion As Wal-Mart expands into global markets in South America. Walmart.000 items for each international supercenter.S. and Europe. walmart. and tailoring the stores to meet local tastes. At first." Sam Walton was something of a visionary when it came to logistics. and information systems from its parent company. that the company growth he was striving for required the installation of advanced information systems to manage the volumes of merchandise. In 2000. it relies heavily on its logistics prowess to help it move quickly and support the rapid growth it seeks.com was widely initially criticised for its sluggishness and poor customer service.com a separate company and retooled the website. Among the features added was in-store returns for items purchased on the site and more reliable delivery. ''the icon of just-in-time inventory control and sophisticated logistics. inexperienced management. as early as the 1960s. By 1997. distribution. The website borrowed resources like inventory. For example. Wal-Mart's computer database was second only to the Pentagon's in terms of capacity. WalMart grew to be." By 1998.Cases in Marketing Management ability to effectively manage such a vast network prompted one business writer to declare Wal-Mart "the king of store logistics. in the words of another business writer. and the monumental task of buying and stocking 50. When Wal-Mart opened its first supercenters in Brazil before the 1995 holiday season. store and could not keep up. the company had made rapid progress.com in 1996. which offer unlimited Web access for less than $ 10 a month. the ultimate user of information as a competitive advantage. In 1966 Walton hired the top graduate of an IBM school and assigned him the task of computerizing Wal-Mart's operations. In une 2001. After Wal-Mart expanded the site in 1999. developing local distribution centers to manage the huge volumes of goods going to the stores. Asia. managers did not anticipate sales which were quadruple those of a comparable U. . He had the foresight to realise. the company's systems for entering foreign markets needed improvement.com debuted its internet service provider. the company added fresh pasta shops to the Wai-Marts in Brazil after customer data revealed heavy pasta consumption in that market. Wal-Mart encountered difficulties in certain markets due to the lack of historical data. the company partnered with a Silicon Valley venture capital firm and made walmart. Wal-Mart was opening locations at 20 percent less cost.

He developed a system for giving current merchandise enough shelf space.Case 112 Wal-Mart: A Logistics Leader Wal-Mart's dedication to logistics was evidenced by its promotions of H. . Wal-Mart's annual sales in 2000 reached $ 191 billion. Scott was famous for taking a logistics approach to Wal-Mart stores when he took charge of merchandising for the company in 1995. The company's commitment to logistics played a major role in bringing it to that point. and increased direct-to-store shipments from suppliers. a figure that earned the company the number two spot in the Fortune 500 ranking. the former head of its logistics division. limited price markdowns. and will doubtless continue to be large part of the Wal-Mart in years to come. Scott took over the company at a time of unparalleled success. to CEO in 2000. Lee Scott.

250. despite the CEO's resentments. had a global exposure in marketing. even though a salesman at heart. you will be able to : • • • • find MRs replaced with PTHWs as couriers. His logic: it lessens costs. identify differing perceptions : global exposure x down-to-earth approach. Panchal had a down. If it was left to his senior Vice-president (Sales Marketing). Mr. wider reach. Rajadhyaksha would soon have been left with a frontline team. . Jitendra Panchal. while Rajadhyaksha's was thoroughly professional. Rajadhyaksha resented Panchal's strategy of appointing health workers on the ground that these part-time status workers would spell hard times for the company. was confronted with an ugly reality.Case No. Panchal was replacing Surabhi's medical representatives with part-time health workers as couriers (PTHW). Panchal's career was rather colourless in comparison.to earth approach. Rajadhyaksha. Objectives After going through this case. firm posting profits. The company has posted a profit of Rs.00 erores. 113 SURABHI DRUGS LTD. appointed as CEO of Surabhi Drugs Ltd. while Mr. etc.00 crores on the turnover of Rs. Niranjan Rajadhyaksha. improves reach and frees the Sales Manager to deal with customers. 18. underline. state apparent causes for change : low costs.

Case No. 114
DEEPAK PHARMACEUTICALS
O bjectives
After going through this case, you will be able to : •

find an executive with vision and judgement in business. recognise his actions and policies which resulting in higher sales, profits and plant expansion. evaluate his mindset concerning his own employees and reflecting his own failures. underline his denials of opportunities, lack of motivation and loss of faith and confidence in his own employees. criticise his final blow to the Training Department's existence.


Prakash Khanna joined the Deepak Pharmaceuticals in 1980. He earned quick promotions and in 1983 was promoted as a General Manager of the company. The company had an annual turnover of Rs. 3 crores. As the products of the company were in high demand, in spite of company having a large manufacturing capacity, the backlog of unexecuted orders increased substantially. Soon after taking over, Khanna informed all the dealers that only orders accompanied by cheques for the value of the goods ordered will be executed. The dealers enjoying clean credit facilities for years were told that the company could not afford it any more. This irked the dealers but they put up with this. Khanna also slashed the advertising budget as in his opinion a company which could not fully meet the existing demand should not seek to create additional demand. In spite of the withdrawal of credit facility and the reduction in advertisement expenditure, the sales continued to rise. Cash reserves showed a distinct improvement and the company was able to buy some of the latest machinery, which it had been postponing for last two years.

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Khanna was against filling higher positions from among the existing employees of the company. He ordered all the departmental heads to fill in existing positions by recruiting fully trained persons from outside. Consequently, the Training Department was wound up and its personnel were absorbed elsewhere. Khanna suffered a heart stroke in 1992 and sought voluntary retirement. The Board of Directors appointed an outsider to fill the vacancy caused by Khanna's retirement.

Case No. 115
JOB SATISFACTION
O bjectives
After going through this case, you will be able to : •

find interference in daily working by a boss's son, which disturbs the executive. recognise an executive's concern for a wider field (scope) for his skills development and satisfaction. analyse alternatives in consultation with his friend. underline the stark realities of life: no finance, no influence.

• •

Jayant had prospered fairly well in his employment and had a good pay and status. He however, started feeling clamped when the boss's young son joined the business and started interfering with the day-to-day work of senior officers. Jayant also felt that for proper development, his skills demanded a wider field which would not be available under the boss's son. He toyed with the idea of standing on his own. As a result of discussions with friends, he picked out a friend, Dinesh, who was in more or less a similar situation. They together listed the alternatives before them as follows: a) b) c) d) e) To continue the status-quo To seek other employment To join together to form a consultancy firm To join together to form a small jobbing firm To do as in (c) but independently

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Cases in Marketing Management

f)

To do as in (b) but independently

When they analysed the alternatives, they felt they had not got the finance or the "influence" to insure a degree of confidence for success. At the same time, to continue as before was to court frustration and demoralisation.

Case No. 116
PRIYA AUTOMOBILES
O bjectives
After going through this case, you will be able to : • •

find a moped company with two brands a market leadership and a good reputation. recognise the entry of advanced technology vehicles - a setback to moped sales. underline the company's restructured strategies, enthusing new blood, reactivating FAS scheme. analyse an unpleasant motivational award by which the recipient gets discouraged. assess the consequential effects on low performance.

• •

Priya Automobiles Ltd., Pune is in the manufacturing field of two wheelers. They manufacture and market mopeds. These are available in the brand names 'Priya' and 'Supriya', while 'Priya' is their traditional model, 'Supriya' is the improved version. The company was started about 15 years ago. Their product 'Priya' enjoyed a good reputation and they were comfortable in the market. However, with the entry of new generation fuel-efficient mopeds, the company started loosing its market. The Priya model was still acceptable by a segment of the market, as it was the cheapest vehicle. Supriya was a generation vehicle. It was costlier than Priya, but its performance was much superior. It compared favourably with the competitors' products. However, it was yet to gain a foothold in market. The company had to restructure the marketing activities in order to get back their market share. They employed a young sales engineer, Mr. Sudhir Jain, BE with a diploma in marketing, to launch a strong sales drive. He was selected and was put on the job.

Cases in Marketing Management

Mr. Jain started off well in his new job. He was given a territory to contact the prospective customers and book the orders. The company had introduced a new Financial Assistance Scheme (FAS). Under this scheme, the buyers were given easy loans. It was particularly advantageous for group bookings by employees working in an organisation. Mr. Jain was able to contact people in different organisations, arrange for group bookings and facilitate the loans. His performance was good in the first year, as well as in the second year of his service. The company had its own system of rewarding those whose performance happened to be good. The Marketing Manager calculated and told him that it would cost about Rs. 6000/- Mr. Jain quickly asked him whether he could get that Rs. 6000/- in cash instead of the trip as he had better plans. The Marketing Manager countered this saying that it might not be possible to do so. It was not the tradition of the company. However, he would check with the Personnel Manager. The Marketing Manager and the Personnel Manager thought he was a bit fussy about money. Some of his colleagues also thought so. During the subsequent year, Mr. Jain's performance was not at all that good which showed his lukewarm attitude towards his job. Many questions arise from this case.

chess. badminton. In one year when the middle level officer won a triple crown in All India Championship and also a championship in two international prestigious tournaments. first the state title. The organisation very generously encourages sports and sportsmen and has a number of teams participating in various local and state tournaments. Kokan Trading Company also has individual officers and workmen participating in different tournaments in individual games such as tennis. One of the middle-level officers of the company achieved an extraordinary standard in tennis and has won in his individual capacity. The organisation. has a common seniority both. the local Chief Manager under whom he was working was immensely impressed by the performance. was proud of this employee and gave him every facility to develop himself. table tennis. though spread over in different cities. Kokan Trading Co." "guidelines" or "comprehensive policy" for motivating sportsmen-employees. you will be able to : • find an organisation with no "rules.Case No. 117 KOKAN TRADING COMPANY Objectives After going through this case. for officers and workmen. underline such decisions' consequential effects on the sincerity of employees. . etc. analyse the situation involving confrontation with union-leaders. recognise management decisions on "ad hoc" basis or at the "wish a will" of management officials. The establishment has over 7000 employees. including 1150 officers. • • • Kokan Trading Company is an engineering concern and has branches in as many as ten States and Union Territories of India. then the National title and then the International title.

is perhaps as good as the officer's feat of attaining international standard. Normally. had also obtained sufficient expertise and skills to represent in the state in the Basketball team with definite potential of representing at the national level in due course.Cases in Marketing Management The Chief Manager. . thus. The Trade Union therefore expressed its hope that the management would promote the workman for his sports activities also five ranks. as was done for the officer for his purely sports activity. The union leader argued that in spite of the worker's poor circumstances and generally unfavourable conditions of life. conducted by the management). his attaining the expertise to reach a standard of representing state level team. promoted him straight fives steps above his own level. It so happened that one of the workmen of the Kokan Trading Co. also requested the management to show a similar gesture for this workman who has reached a level representing a state team. while thanking management for promoting the officer. it would take about 14 years to reach the level and that too by appearing for different examinations and interviews (for judging suitability. The trade union operating in the establishment. impressed by his performance in the sports field. five ranks above his own for the splendid performance in sports. for his colleagues in the same grade.

Since his promotion. As a long-serving employee. identify his presentation which climaxes his colleagues' resentment. too. Its turnover shot up from 20 crores to 200 crores. He had bagged several annual awards for his selling efforts. On one each occasion. Amreesh was called a super sales person. he is not trained as a sales manager or as a salesforce trainer. It produces personal computers. know their business. in the last three years. The corporation distributes its products through own retail-outlets as well as franchisees. recognise his outstanding selling record. though with no formal SM training. Though a super sales person himself. He had earlier worked in IBM and Compaq. He wants to pass all his expertise to his juniors. underline his concern for sharing his knowledge with the sales personnel. Amreesh was promoted to the post of Regional Sales Manager. is promoted as RSM. 118 ASTROID COMPUTER CORPORATION Objectives After going through this case. Some clients are also getting suspicious of Amreesh's intentions. analyse the causes of resentment among the sales personnel. This was very much disliked by his juniors. The junior sales staff is resentful about Amreesh. Astroid Computer Corporation is a Bangalore-based manufacturing company. After all they. monitors. disk-drives and printers. Six months ago. he has been spending a lot of time with the sales personnel in the field.Case No. you will be able to : • • • • • find an employee. Amreesh personally made the sales presentation. Astroid has experienced an explosive growth in sales. During the last three years. . massive experience. as assets. These clients feel that Amreesh does not believe in his juniors or he wants to teach them a hard lesson. interactive terminals. They think he should not so literally breathe down their necks.

258 crores annual sales underline sales manpower(7) : Ad spend Rs. VIKRANT MODI Objectives After going through this case. their sales were Rs. The sales target for 2000-01 has been set at Rs. 1. 119 MR. marketing industrial raw materials used in chemicals and pharmaceutical industries. manpower.70 crores. Mody. Their expenditure on advertising during the year was Rs.70 crores identify the 2000-01 sales target: Rs. Vikrant Modi is the Vice President [Marketing] of a national company. In 1998-99. 258 crores. . you will be able to : • • • • find a company with Rs. Please help Mr. with an employment strength of seven Sales Engineers in two Branch Offices. ad spend and other promotional avenues Mr. 375 crores.Case No. 1. 375 crores analyse forecast for inputs.

you will be able to : • • analyse the supervisor's belief an " informal working relationship". Finally. Over a period of time. Rajesh had exhorted his employees to put across their problems and views frankly and honestly. "I am taking Saturday off and going out of town. analyse its weaknesses and the incident involving friction in this relationship. on occasions. team-spirit and the freedom of expression. but also in the department's openness. as he believed that this management style was the best method to utilize everyone's status and abilities. he walked into Rajesh's office late one Friday evening and announced. How he could rein so many professionals so well? But there was one person wild and on the loose and this time Rajesh felt clawed. identify virtues of this open climate management style: mutual trust. Occassionally. when Vivek's programme came to a temporary halt while waiting for computer time.Case No. Out of conviction. so that I can completely relax. I will see you on Monday. attracting outstanding people. there were high tempers and Rajesh wished he had more competent people. his boss had also often praised the department for high professionalism. he even teased Rajesh. 120 RAJESH JOSHI Objectives After going through this case. putting in a lot of evening hours and an occasional Sunday. Rajesh firmly believed in what he was trying to do." . One of his best employees. However. underline the need for the framework of guidelines/rules governing this relationship. he knew his group of strong-willed high professionals extracted the best out of everyone else. Moreover. had been working under high pressure for some time. True. Rajesh deliberately encouraged an open climate in his section. Vivek Purohit. Rajesh Joshi's approach to work had paid off not only in the high level of quality and quantity of work. • • Rajesh Joshi is a supervisor of thirteen employees.

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Rajesh treated Vivek's absence as 'without pay'. I put in plenty of extra time and you know it. but nearly all of Vivek's colleagues felt the same way . "It is downright rotten to be treated like dirt and not to know of it until pay-day. . Pay-day fell on the following Friday and when Vivek's pay cheque was short he blew his top off. but Vivek had already left in a huff. Within half an hour.Cases in Marketing Management Since Vivek had used all his leave and there was no Policy of Compensatory Time Off. That was bad enough. there was not much enthusiasm either from the entire group the following week.that Vivek had got a raw deal. Rajesh received a letter of resignation from Vivek. How come you are such a Shylock demanding your pound of flesh and not giving me a day off?" Rajesh tried to explain. The extra hours I worked are at least three times the time I took off. He stormed into Rajesh's office in a rage and said. While there was not a slow down.

thus. distinguished for its prompt after-sales service to the customers. however. is a leading T. however. . manufacturing company (TVMC). nowadays. They can. offer service within few hours only. mechanics are. at the cost of 25% additional service cost "Suchitra Vision Ltd". becoming available. even in a remote village. can attend to a customer's service call within 48 hours. thus.Case No. self-trained local T. However.V. you will be able to : • • • • find a TVMC with an excellent after-sales service reputation recognise. To compete with them. is poor. a minimum two service engineers at every taluka place. the company will have to maintain.V. 121 SUCHITRA VISION LTD. The company maintains a serviceengineer at every taluka place and. This will push up the service cost by 25%. The quality of their service. Objectives After going through this case. the emerging competition from the self-trained local mechanics underline their strengths (prompt service) and weaknesses (poor quality workmanship) analyse the strategy to overtake them.

000 1998 9.000 53.000 19. the Marketing Director presented the sales performance for 1999 through attractive audio-visuals.250 1999 6. Manipal was a leading marketing organisation dealing in consumer nondurables.000 34.000 27.000 52.850 29. Ravikiran. The direct sales and redistribution figures in the respect of the Company's three key products were as follows: Direct Sales (Units) Product A B C 1997 10. 122 MOONLIGHT LTD. Objectives After going through this case. After the initial address by him.Case No..000 35.500 41.000 42.000 1999 9. the Managing Director conducted the Annual Sales Conference in a five star hotel.000 1998 7.000 19.500 .900 28. Ruta Advani.000 Redistribution Sales (Units) 1997 8. The company's selling operations included direct sales to wholesalers as well as re-distribution to the retailers in the market place. you will be able to : • • • • • find a marketing company dealing in consumer non-durables recognise selling operations: direct sales to wholesalers and redistribution to retailers underline direct sales targets (DST) for three products identify additional marketing inputs for DST identify branchwise targets to managers and the latter's reluctance to accept the same Moonlight Ltd.000 20.

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Cases in Marketing Management The share of various products on the total volume of sales turnover was as under: Product A B C Other Products Total % Age on Sales Turnover 20 30 40 10 100 Ravikiran took Ruta to task for the stagnant growth in direct sales in respect of A&B. Ruta agreed to the above and gave the branchwise sales targets to the Branch Managers. . They reluctantly accepted the same. Ravikiran announced the direct sales targets for millennium 2000 for the three products as below: Product A Direct Sales Target(units) 13. After further discussions.000 B C Ravikiran offered certain additional marketing inputs for achieving the increased direct sales targets.000 35. he was impressed with the growth of C. However.000 69.

The Chairman of the company saw this as a problem area and appointed a Marketing Manager (MM). it was necessary to appoint Product Managers. The company even sold abroad and 50% of its sales were due to exports. 123 WATTS AND VOLTS LTD. Objectives After going through this case.Case No. The Marketing Manager felt that to develop these systems. making calls. He evolved a thorough marketing plan. The Regional Sales Manager (RSM) was responsible for generating sales. The sales were effected either directly to the consumers who would place large orders or through distributors. He suggested an entry into the Systems Market (SM). These were to be sold as packages. he meant that the equipment connected to a power generator should also be developed by the company e. irrigation pumps for use in the farms.g. to conceive new ideas as well as developing new products. It took into account the present selling efforts as well as the development of new products. in depth • t Watts and Volts Ltd has been manufacturing power generation equipment (PGEM) in small and medium sizes. Regional territories (RTs) were the basis of Sales Department. The . who were to be given total responsibility of the development and marketing of the system. By this. you will be able to : t find RTs of a PGEM company headed by RSM with specific tasks • • underline MM's appointment and with it Chairman's SM plans identify the MM's opposition to combining SM tasks with the RSMs' regular responsibilities support the MM's demand for PMs' appointment for exclusively handling development and marketing of the system analyse the entire restructuring programme.

they did not have system. The Marketing Manager.consumer knowledge and the inclination. He believed that the job of a Product Manager ended with successful development and introduction of a given product.Cases in Marketing Management Regional Sales Managers did not have the time to market the specialised systems satisfactorily. Besides. was strongly opposed to having two parallel sales organisations under the same roof. . The sales responsibility will be that of Regional Sales Manager only.

124 LARSEN & TOUBRO Objectives After going through this case. Siemens were the pioneers in this field and were followed much later by L&T. you will be able to : • • • • find L&T and SIL. They also had the reputation that their products were the only ones suitable for heavy duty applications.Case No. however. Even today.(L & T) and Siemens India Ltd(SIL) are the leading players in the field of Switchgear products (Switchgear means protective electrical devices used in factories as the advance level of a fuse with which we are all familiar). both to be leading players in the switchgear market recognise. and are requested to: . When L&T entered this field. Siemens is facing a peculiar situation in the sense that they are losing their market heavily to L&T. However. Siemens had literally a monopoly of this market with most of the key accounts in their bag. The prices of the products of both the companies are more or less the same. Siemens has an edge over L&T quality wise. You have been appointed the Marketing Manager of Siemens India Ltd. SIL's pioneering leadership and reputation identify the price-range of both companies' products to be more or less the same underline the fact that SIL is gradually losing its market to L & T Larsen & Toubro Ltd.

categories. as per details given below: a) A category twice a week.. On the whole. Of these. c) C category once a month. calls etc. b) B category once a week. you will be able to : • • • • find SM under criticism for shortcomings in penetrating various market segments underline advice to him to assess the workload to salesmen and redesign sales territory analyse the data-base concerning dealers. he came under severe criticism for not being able to deeply penetrate the various market segments. of which 20% belong to A category. he was told to take a fresh look at whether the sales territory had been designed appropriately. 20% B and the balance to C category. and also whether each sales person had an adequate workload. The salesmen made 10 calls a day. He looked at his data base and found that the sales force serviced 6000 dealers nationally. in depth assess results of workload and alternatives The Sales Manager (SM) of a company had often wondered if he had the right number of sales people. 20% to B category and the balance to C category. To his concern that he was understaffed. . 125 THE SALES MANAGER Objectives After going through this case.000 dealer outlets servicing the industry.Case No. 20% belong to A category. In a recent review of operations. there were 10.

40% of the total dealers operated in the branch HQ's town and the balance in the upcountry markets. the sales manager had 300 working days. the norms were as follows: All A and B category were visited once in 15 days and all C category once a month. . The total number of sales personnel he had were 60. In 2000-2001.Cases in Marketing Management For the up-country markets.

Designers and the Draughtsmen to see that the target was achieved. as far as the designing was concerned. Where certain sections were lagging slightly. all departments had to gear themselves to perform their portion of the work expeditiously to fulfil the target dates set by the Import Substitution Committee. it was necessary to secure the active participation of the staff. vigour and vitality in working as one family and with team spirit. you will be able to : • • • • • find the extraneous circumstances force the organisation to be self-reliant recognise its crash-programme for the manufacture of components. The Tool Design Section of the company for designs tooling to the fabricated and for the successful implementation of the programme. There was a proper feedback of the progress and close security was maintained. underline the vim. the Jr. 126 THE MECHANICS OF SUCCESS Objectives After going through this case. . analyse measures to overcome emerging problems.Case No. Engineers. so that the company's goal would also become the staff's goal. because of the shortage of foreign exchange and the low priority given to the industry. Due to the crash programme of manufacturing components. successfully motivating and identifying every employee with the "Goal". the staff was adjusted to make up for the lag and the concern was there to establish a good name for the department. The urgency of the programme was discussed with the Deputy and Assistant Superintendents whose active participation was sought and they it turn impressed upon the Asstt. analyse 'Organisational Goal'.

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In the final outcome. it was found that the job orders for the design were released on the target dates for 80 % of the items and the balance job orders within a week afterwards. thus illustrating the acceptance of the goal by the department and their active participation. The departments concerned with other work like taking out prints. though the printing machines used to breakdown frequently and upset the apple cart. .Cases in Marketing Management Even the clerical staff was motivated by the revision of grades and the whole project was taken up in a spirit of challenge to complete the task as per the schedule. estimating and issuing job orders were also followed up with vigour. Permission was also obtained for the issue of job orders against job requests to expedite the release of job orders for fabrication.

you will be able to : • • find an executive. printed in English. underline sales.Case No. recognise his Company's logic in concentration only on one type. • • Mr. The following information about number of diaries sold during earlier years was with him2003 2002 2001 2000 1999 21500 19250 18900 17500 16200 . though in four languages. planning print-order number for diaries for 2004. Gujarathi and Marathi. Sales Manager of Abha Diaries was thinking about the number of diaries to be printed for 2004. Anand. 127 MR. It was marketed in Western India. analyse and interpret the forecast. Hindi. ANAND O bjectives After going through this case.trend. The company was printing only one type of table diary with dates. during the last five years.

delivery schedules and promotional expenses based on past forecasts and consumption. The production had to be completed by September in order to utilise the printing facilities for calendars. By spending some money on personal selling. Based on the past record of sales. planning print-order of new year diaries 2004. The prices of raw materials are going up. 491 . there are curbs on advertising and promotion expenditure and consumer purchasing is going down.structure : manufacturing and for wholesalers. Patel was taking a review of past performance in June 2001 to schedule the production of diaries for 2004. analyse the cost.Case No. The normal selling season begins in October. Table I gives the data on past forecasts and actual consumption for earlier years. Patel has to consider the general economic conditions in order to take a decision. Diaries remaining unsold at the end of 2004 would be scrapped at virtually a total loss. you will be able to : t • • • find a printer. The managing partner of Jagat Stationery Company. 270 and the diaries were sold to wholesalers at a price of Rs. 360 per dozen. Mumbai. it is possible to receive some firm orders for 2004 diaries by end of June to plan better. The diaries are marketed in the State of Maharashtra through wholesalers and retailers. It was the company's practice to schedule production in lots of 1000 dozens. identify background. 128 JAGAT STATIONERY COMPANY Objectives After going through this case. underline risk factors in decision-making of print-order. he is thinking 25000 dozens of 2004 diaries. The variable manufacturing cost per dozen diaries was Rs. Mr. phone calls and/ or publicity literature. Mr.

Cases in Marketing Management Year 1997 1998 1999 2000 2001 2002 2003 Forecast (Dozens) 12000 13000 16000 17000 20000 22000 22000 Actual Sales (Dozens) 11800 14500 16000 17800 19500 23000 22500 .

They became members of the union. 129 DELANA HOSIERY WORKS Objectives After going through this case. identify his "Ad Hoc" decisions : bypassing Personnel Department. rewards given involved favour to some employees. • • Delana Hosiery Works Ltd. One small group of employees. issuing written communication to his employees in personal capacity and not insisting on formal procedure of personnel management. issue confirmation letters as per rules in . The annual increments were made through acquaintances. The owner of the company believed in informal human relations and decided to recruit manpower on ad-hoc basis without issuing appointment orders. favouritism discontentment etc. is a small-scale industry producing readymade garments. Initial motivation of the owner in appealing to the employees not to become members of the union went in vain and proved futile. The owner did not like the employees' attitude. constantly neglected by the owner became hostile and secretly approached the union's office. analyse effects on organisational performance. loyal to the employer also became members of the union. • • underline human weaknesses in IHR functioning : prejudices. The legal recourse taken by the union ultimately resulted in directing the owner to issue appointment orders in writing to all employees.Case No. Very soon other groups of employees. everything went alright and the team functioned like a family unit. analyse consequential confrontation with Union : and disregarding consultant's advice. you will be able to : t find owner's management style : based on "informal human relations"(IHR). subsequent number of employees grew sizeably. For the first two to three years.

The arrears paid on account of difference in minimum wages worked out in the neighborhood of Rs. The owner contacted the consultant. informal procedure of personnel management was required to be changed. two to three lakhs.Cases in Marketing Management writing and give annual increments based on performance. The production and productivity declined substantially. who advised to set procedure in all areas of personnel management but the owner looked to the entire episode with prejudices and acted vindictively. reducing the profit ratio below the level of break even point. . In all areas. Besides. the employees started working on "work to rule" basis.

To study the situation.Case No. pointed out his incapabilities especially in dealing with people. As a result of this change. He won their esteem for his valuable services as a manager. recognise change in nature of work: or job specifications. HARI PRASAD O bjectives After going through this case. the M. underline "Skills-Job Specifications" relationship. The report of the consultant while praising the expert knowledge of Mr. They were helpless. he has been selected as the Administrative Manager. Prasad on many technical aspects of office administration. It is a medium sized company. since the last 10 years as a Secretary and Chief Accountant. Mr. This new post was created. Hari Prasad is the Administrative Manager of the XYZ company. a year ago. you will be able to : • • • • • find Secretary-cum-Accountant : takes over as Administrative Officer. His record was excellent. Prasad in dealing with people. identify Officer's lack of skills in "public dealings": starts taking its toll. analyse Consultant's accent on exposure to human relations skills in job shiftovers. engaged a consultant. 130 MR.D. There was an alarming increase in staff turnover. Hari Prasad has been working in the company. output of his work in the office dropped considerably and morale became low. Prasad enjoyed considerable popularity among the senior executives of the company. Mr. Mr. Recently. They were worried over the capabilities of Mr. Surprisingly. .

you will be able to : • • • explain HLL's history. The company was undertaking a promotional exercise in the rural areas of three states. how to wash utensils? In June 2002. scouring bar market-although it has been growing at a rate of 15% per annum. Teaching People. the promotion drive involved company officials to visit rural towns and demonstrate how vessels are cleaned with Vim. 131 HINDUSTAN LEVER . infrastructure and resources of its command. "Consider the market. we are educating the rural masses on the on-going 'Vim bar Challenge' TV commercial by conducting live demonstrations about vessel cleaning. Sanjay Bhel. since last year it has been decelerating. Commenting on this.RURAL MARKETING INITIATIVES O bjectives After going through this case. so far. in 2001." This exercise was just one of the numerous marketing drives undertaken by HLL over the decades to increase its penetration in the . 4 bn.. t underline the vast network of distributors. (HLL).Case No. 'Vim' . growth and FMCG market-leadership in India. out of five lakh villages in India only one lakh have been tapped. HLL's Marketing Manager. analyse its marketing strategies to tap villages for its multifarious products. "For the purpose. identify HLL's major media and product-propaganda campaigns. the employees of Hindustan Lever Ltd. for its utensil-cleansing bar. said.Madhya Pradesh (MP) Bihar and Orissa. Hindustan Lever Ltd. Corporate Communications Manager.A part of HLL's on-going television (TV) campaign 'Vim bar Challenge'. a subsidiary of the Fast Moving Consumer Goods (FMCG) major Unilever and India's leading FMCG company literally took to streets." Irfan Khan. Our aim is to tap the growth rate of the Rs.

the company established the Hindustan Manufacturing Company for production of edible oil. (LBIL) was incorporated as a whollyowned subsidiary of Unilever. Backround Note HLL's origins can be traced back to the England based company. In 1961. HLL entered the oral care market with a gel toothpaste called 'Close-up'. These three subsidiaries were merged in 1956 to from HLL. and 'Liril' (bathing soap. . In October 1933. in the early -1960s). In 1975. a majority of Unilever's revenues came from soaps and vanaspati. In late 1970s. United Traders was set up for import and distribution of toilet products. The same year.0% of its equity to the public by an initial public offer in the same year. It also expanded its manufacturing capacity for vanaspati by buying factories atTrichy (Tamilnadu). By 1960. FMCG companies had to turn towards rural areas in order to sustain revenue growth and profitability. earned the distinction of becoming one of the few Indian companies that had tapped the country's vast population so extensively. HLL introduced 'Lux' soap in a range of colours. It was. Lever Brothers (India) Pvt.600 tons. the company merged with the Netherlandsbased Margarine Unie [an established player in India through the export of vanaspati (hydrogenated edible fat)] to form Unilever Ltd.'Anik' (clarified butter. The company entered India in 1888 through the export of its laundry soap 'Sunlight. The company had. With the penetration of their products reaching saturation levels in many urban markets. in 1974). pioneering efforts towards establishing well-entrenched distribution and marketing networks to reach the vast Indian rural masses. HLL's Vanaspati accounted for almost three-fourth of India's production of nearly 6. in 1971). in 1969). Ltd. in UK. in fact. Initially. Since the disposable income in the hands of rural people had been increasing in the late 1990s and the early 21st century. Industry observers also felt that HLL was at an advantage compared to most of his competitors. In 1932. 'Sunsilk' (shampoo. therefore. Shamnager and Ghaziabad (near Delhi). not mere coincidence that around 50% of its turnover came from rural markets. Two years later. in 1964). 'William Hesketh Lever.000 tonnes. it made sense for companies to focus their energies on this segment.' established in 1885 by Lever Brothers. HLL offered 1. HLL set up 70 medium and small-scale factories in the rural areas for manufacturing soaps and detergent. 'Rin' (washing-bar. HLL's annual production of vanaspati had gone up to 33.' In 1930. The 1960s-70s witnessed a series of new product launches. In the late 1950s the company undertook modernization of its facilities. 'Clinic' (shampoo.Cases in Marketing Management Indian rural markets. thanks to its consistent.

HLL formed a 50:50 joint venture with the US based Kimberly Clark Corporation called Kimberly Clark Lever Limited (KCLL) that manufactured diapers and sanitary napkins. HLL moved into agri-products by setting up a unit in Hyderabad (Andhra Pradesh). In 1992. there was a paradigm shift towards value-for-money products. The company also complied with the government's condition of minimum 10% export and 60% turnover from priority Secotrs. HLL formed another joint venture. In early 1997 also. HLL launched Lifebuoy Plus and Le Sancy soaps in the market. HLL had been successful in launching 10 new brand extensions and products in 1996 alone. In 1980. In spite of the sluggish market conditions. In 1991. Even in India. Between 1992-1996. In the same year. HLL launched 41 new products and re-launched around 41 product innovations. Taloja (Maharashtra) and Jammu (Jammu and Kashmir). which had been 52% in 1996. . Pepsodent and Mentadent G. Growth in the urban markets had slowed down and even the rural market showed signs of sluggishness in terms of. In the 1990s. Kwality. West Bengal).Rural Marketing Initiatives The company also diversified into manufacturing chemicals and set up chemical plants at Haldia (Calcutta. In 1997. In 1989. with the US Based SC Johnson & Co.. the company introduced a new variant of 'Lux'.Case 131 Hindustan Lever . The early 1990s (1991-1994) was period of global recession and 'value-for-money' became the buzzword for many FMCG companies all around the world. It also set up 10 new factories in India-among them two each for packet tea and personal products and one each for soaps and detergents. This was followed by the launch of 'Lifebuoy Personal' and 'Breeze' soaps in 1987. HLL bought many companies like Tomco. to manufacture and market pest repellants and disinfectants. the company had launched six new products and brand extensions. which further increased to 62% in 1998. USA. HLL had a total market share of 58-60% in the FMCG sector. This was evident from the fact that the growth in volumes (in rural areas). dropped steeply to 29% in 1997. Unilever offered HLL shares for sale in order to reduce the non-resident holding in the company to 51 % to comply with the Foreign Exchange Regulation Act (FERA) regulations. Kissan. respectively. The company also took up many initiatives in the area of distribution to double its reach in the rural markets. In 1988. HLL set up a manufacturing facility at Pondicherry in collaboration with National Starch Corporation. and Lakme. a synthetic detergent plant and a toilet soap plant were established in Sumerpur and Orai (both in Uttar Pradesh). In 1983. the company came out with two more dental care products. a new plant for synthetic detergents was set up in Chindwara district of MR In 1986. Lever Johnson. both value and volumes.

HLL adopted a phased approach in order to meet its target and decided to address the key issue related to availability.Cases in Marketing Management The year 2001 was a tough year for the Indian FMCG sector due to the country's economic growth slowing down to 4% from 6. 985 mn. These vans induced retailers to stock HLL products and display advertising material in their shops. 109. Rin. Ponds.4bn. HLL's efforts to build a market for its products in these areas had started way back in the days it began operations in the country. Sunsilk. Kwality. HLL was undoubtedly the company that had virtually shaped India's FMCG market over the decades. Kissan. Clinic. This was to be achieved by strongly focusing on the 'Power Brands' in the rural markets. Profit-after-tax also increased from Rs. there were redistribution stockists who carried bulk stocks and serviced retailers. Breeze. sales increased to Rs. Lipton. Wheel.4% in 2000. HLL used both wholesalers and retailers to penetrate the rural market. In many towns. From Rs. Lifebuoy. and Dalda had become and integral part of almost every Indian household (Refer Exhibit I for HLL's product/brand profile). There were some 7. HLL realised that despite its pioneering efforts to expand its rural consumer base. HLL called the 30 best selling brands as 'Power Brands' a title well-deserved. a large part of the market remained untapped. Annapurna. the company set itself a target of contacting 16 million new village households by 1999. Close-up. aimed at sustaining profitable growth in slow markets. Brook Bond. rural markets had become a significant destination for FMCG marketers like never before. HLL's financial results clearly depicted its leadership position in most of the product categories it operated in. 15. and especially those in categories like fabric wash. Lakme. By the 1990s. in 1992. Lux. As a result. However. . in 2001. Vim. Penetrative pricing was also an important factor that was addressed. many of the above products. The company had built some of the most successful brands in India and many of its advertising campaigns had become part of the country's advertising folklore. Surf. HLL Goes to the Villages Traditionally. This was because brands such as Fair & Lovely. Interestingly.71 bn. 17. Amongst over 110 Brands that it owned. awareness and overcoming prevalent attitudes and habits of rural consumers. HLL was able to post significant gains despite a slowdown in both the rural markets and the industrial segment. personal wash and beverages derived more than 50% of their sales from rural areas. This was because of its strategy to focus on its 'Power Brands. In the late 1990s. in2001. A fleet of motor vans covered small towns and villages.57 bn. Pepsodent. Thus.000 redistribution stockists who served over a million retail outlets. to Rs.

Another program targeted at villages with a population of less than 2000 was simultaneously launched. thus. the company sensed that the sampling campaign was not enough to attract first time users.' HLL vans visited villages and sold small packs consisting of lowunit-price pack each of its detergent. In mid-1998. The villagers were also educated about the superior benefits of using the company's products as compared to their current habits.Case 131 Hindustan Lever . to enhance HLL's control on the rural supply chain as well as to increase the number of rural retail outlets from 50. the number of HLL brands and the Stock Keeping Units (SKUs) stocked by the village retailers increased. The sub-stockists performed the role of driving distribution in the neighbouring villages using unconventional means like bullock-carts and tractors. the personal products division of HLL launched another campaign called 'Project Bharat' to be carried out by the end of 1999. toothpaste. Project streamline was targeted at place that had a poor market development base. ''full-line availability' and 'credits'.Rural Marketing Initiatives One of HLL's initial initiatives was in the form of 'Project streamline which addressed the problems of the rural distribution system. As a result.000 in 1998 to 100. attitudes and habits of rural consumers and increase the penetration level of HLL products. As a part of the project. 'Project Bharat' was a direct marketing exercise undertaking to address the issues of awareness. During the sales. It was the first and the largest rural home-to-home operation to have ever been taken up by any company carried out its direct marketing operations in the high potential districts of the country to attract first-time users. This was very helpful for HLL. as it created awareness of its product categories and the availability of the affordable packs. Under this program. However. This initiative helped HLL increase its reach in the rural market to 37% in 1998 from 25% in 1995. making any kind of distribution unavailable. Under 'Project Bharat. which further enhanced the awareness about HLL's products in villages with a population above 2000. Therefore. This project was to be carried out with the help of a rural distributor who had 15-20 rural sub-stockists. connected to him in villages. HLL aimed at providing higher quality services to consumers in terms of 'frequency. 15. company representatives also explained to the people how to use these products with the help of a video show. it rolled out a follow-up program called the 'Integrated Rural Promotion Van' (IRPV). face cream and talcum powder for Rs. the company provided self-employment opportunities to .000 in a time span of one year.

This helped it to create greater awareness about hygiene and cleanliness thus. Using this money. the company aimed at achieving a 65% reach through the TV media up from the current reach of 33%. thereby. while the urban growth rate was only 4-5%. in the skincare market. toothpaste market. which. By the end of 1999. whereas Colgate-Palmolive was the leader with over 50% market share in the Rs.Cases in Marketing Management villagers through Self-Help Groups (SHG). Starting with Maharashtra. HLL launched a nationwide Community Dental Health campaign in association with the Indian Medical Association (IMA) to promote its toothpaste Pepsodent. This also helped HLL grow at a better pace than the industry. the company tied up with various Non-Governmental Organisations (NGOs). The campaign was successful in increasing penetration levels.000 villages from the existing 85. whereas. The company set a goal of reaching 2.35. In August 1999. United Nations Development Program (UNDP) and other voluntary organisations to increase awareness about health and hygiene in villages. usage and the awareness about the company's products in the districts targeted. influencing people's behavior. This activity also helped the company increase the reach of its products.' Company sources placed the total investment in the program between Rs. generating income as well as employment for themselves. HLL had covered 13 million households through 'Project Bharat'. would have a direct impact on its sales. in May 1999. 100-200 mn. Moreover. the company encouraged primary education in villages with the help of V-Sat connections. it was 14% in the rural markets. HLL stood at the second position in terms of market share in the dental care segment (37%) that comprised Pepsodent's 16% and Close-up's 21 %. Apart from this. 10 bn. 750 per month) were provided with an opportunity to take micro-credit from banks. only 47% of the Indian population used toothpastes. The company wanted to attain the leadership status with the help of aggressive marketing initiatives. villagers could buy HLL's products and sell them to consumers. the rural growth was at 15-16%. Statistics revealed that penetration level in India was very low with the per capita consumption (of toothpaste) being only 0. the rest used traditional methods . SGHs operated like direct-to home distributors wherein groups of 15-20 villagers who are below the poverty line (those people whose monthly income was less than Rs. in turn.75 gm. while 27% used toothpowder. the urban growth was only at 7-8%. In the shampoo market. The vision of the project was 'to make every person in urban and rural India to adopt a good oral care regime.000 and covering 75% of the population from the existing 43%. Similarly. To further increase the effectiveness of the campaign.

Inspired by the success of its earlier ventures. (RC&M). As a part of the project. an agency that specialised in rural advertising and marketing. The programme was launched by the Rural Communication and Marketing Pvt. predominantly in the rural areas. These were priced very attractively for a rupee. This campaign aimed to increase the direct reach of toothpaste in rural India to 1. Around 200 health fairs were organised. Ltd.Case 131 Hindustan Lever . The company provided affordable tea packets that were suitably blended to appeal to the rural taste of 'Kadak chai' (strong tea).Rural Marketing Initiatives such as coal and neem sticks. Representatives of IMA and local public health centers conducted educative demonstrations on good brushing habits. several infomercials were launched to increase awareness on dental hygiene and also to highlight common dental problems and their causes. The IMA-Pepsodent project increased the overall dental care penetration in the country to 58-60% form the prevailing 48%. The company test marketed an especially designed product 'chai-ki-goli'. These infomercials were aired on Doordarshan (India's national television channel).. Besides . the company launched another campaign called 'Project millennium' wherein it targeted at increasing its share in the tea market. whereas the rural market growth was projected at 9-10%. Dental checkups were also conducted in these health centers. HLL planned ways to tap the 'chai-kidukan' (tea vendors). By 1999. correct use of dentrifices and other issues related to dental hygiene. HLL went on participate in a rural communication programme called the ''Grameenon ke Beech'' (Amidst villagers) in August 2001. The Dental Health Campaign was carried out for a period of three years and targeted 100 million people across rural India. the promotion covered 10 districts in UP and Maharashtra and by the end of 2000. the number touched 50.000 villages by the year 2001. whereas. All these initiatives seemed to have paid off for HLL. Nirma and Colgate-Palmolive followed in that order with 56% and 33% respectively. it was found that HLL had overtaken both Colgate-Palmolive and Nirma in creating brand awareness and penetration in rural households. The survey revealed that HLL was leading with 88% rural market penetration. In April 2000. HLL brands had the highest penetration in many product categories. since the increase in brand consciousness and disposable incomes had significantly altered the consumption patterns of rural people. The growth in the segment was around 3-4% in the urban market. In a survey conducted in December 2000 called the 'Emerging Market Trends' by the Center for Industrial and Economic Research. (Fully soluble ball) that was dropped in boiling milk-water combination. Various dental health programmes as well as education and check up modules were organised at public health centers.25 lakh villages. up from the existing 40.

the 'rural cell' within HLL worked closely with self-help groups. formulation. and reward for growth and enterprise through shared profits. In late 2001. fragrance. in February 2002. magic shows and the screening of a hit movie interspersed with product commercials. HLL claimed to have achieved a 20% increase in consumption in the areas where it was carried out. HLL also planned to work with a group of NGOs to implement the project in the states of Maharashtra and MP in 2002-03. Staying on in the Villages Continuing its focus on rural areas. Mass Market Soaps and Detergents. Sanjay Dube said.Cases in Marketing Management HLL. Lifebuoy .000 villages and 2. "it is the biggest and comprehensive re-launch of any our brands. HLL launched another project called 'Project Shakti' in the state of Andhra Pradesh for a period of six months. At the end of six months of implementation (March 2002). The relaunch of 107-year-old Lifebuoy was primarily done to increase growth in the sluggish soap market. product briefings and demonstrations. HLL decided to expand this project to other states like Gujarat. lucky draws. interactive games." HLL decided to further highlight the concepts of health and hygiene in rural areas to support the relaunch. The project at Gujarat was to be carried out in early -2002. automobile major Mahindra & Mahindra and foods major Parle. 5 bn. The product was given a completely new look (size and shape). This was a favourable development for the company. The company introduced many variations of the product including Lifebuoy Active Red. Maharashtra and MP.000 satellite villages in 22 districts of western UP and 13 districts of central UP over a period of six months. Lifebuoy was the single largest soap brand in rural India with 20 lakh soaps sold every year and had an estimated value of Rs. During 2001. The first phase of the program covered 1. HLL launched a massive rural campaign to reposition one of its leading brands. Lifebuoy. lather profile and was repositioned as a family soap rather than a male soap. The programme involved setting up of company stalls. Head. Project Shakti sought to create a sustainable partnership between HLL and its low-income rural consumers by providing them access to microcredit. Commenting on this category. an opportunity to direct that credit into investment opportunities as company distributors. NGOs and governmental bodies in Andhra Pradesh to put in place a comprehensive experiment in training these self-help groups. Having been successful in this initiative. the other companies that had participated in this program included Colgate-Palmolive. coming at a time of an overall economic slowdown.

Case 131 Hindustan Lever . HLL expected the campaign to bring the company's growth to double digit levels in 2002. . more than it had expected. It was evident that HLL's rural marketing initiatives were paying off well and. there was the question of how long would it be when even the rural markets become saturated. a Korean based market research agency that conducted an extensive consumer behavior study in India. stated that the growth potential for FMCG brands was more in the downtown suburbs rather than the urban metros and rural areas.Rural Marketing Initiatives International Plus and Lifebuoy International Gold. However. The company had left competitors Colgate-Palmolive and Nirma way behind in terms of the overall market penetration in the rural areas (Refer Table I). However. remains to be answered. A study conducted by the Asian Market Research Association (AMRA). in some cases. how long would it be before HLL and other FMCG marketers lost their fancy for the villages.

The farm is situated at Pimpalgaon. Mr. maize. wheat. from Nasik and eight kms from Sugar Factory. onions etc. recognise his farm equipment. identify his professional interests and leadership qualities in setting up a sugar factory. 132 MR. on the National Highway. He owns a 100 hectare canal irrigated farm. Patil has a tractor with trolley and other farm equipments. • Mr. commanding assured market in his own village. He is also Director of the DCC Bank and Chairman of Taluka Kharedi Vikri Sangh. The soil is fertile and ideally suited for sugarcane. grapes and other crops. you will be able to : • • • find a farmer with 100 hectare land. underline his farm-produce. vegetables. Bank and other institutions. coop distillery.Case No. grapes. The Cooperative Sugar Factory accepts sugarcane produced in 20 hectares of land and the distillery accepts grapes produced in 5 hectares of land. . contributing to the crop-yield. maize. He grows sugarcane. growing sugarcane. potato. grapes. He is a promoter-member of a Sugar Factory at Pimpalgaon Co-operative Distillery. ANNA PAUL O bjectives After going through this case. onions etc. Anna Patil is a progressive farmer in Nasik District. 35 kms. jowar.

after 10 years (i. . you will be able to : • • • find a Cooperative Milk Society supplying milk to consumers in Pune. The Managing Director could not take harsh steps against such workers as many of them had come from poor families. thereafter. The Dairy earned profits up to 1993. In 1990. the Union started construction of multi-crore project in December 1990. Union decided to diversify its product line. The area of operation was also extended to hundred villages lying within a radius of 30 kms from the Factory.e. During flush season October-December. Accordingly. The Union was set up in 1980 to process milk and produce milk products.000 litres of milk per day and sends to its customers in Pune. assess marketing and growth potential under diversification plans. since 1980 underline its diversification decision to milk products. there were large number of colourful festivals and melas around the Dairy. as such most of the workers remained absent from job. • • A Cooperative Milk Union has its area of operation spread over 20 villages of Baramati Taluka of Pune District. The city of Pune is 120 Kms away from the Dairy. Absenteeism among workers on account of social and other family obligations became a common phenomena. The Society collects 20.Case No. Union appointed a large number of unskilled and semi-skilled workers from nearby villages. with completion of a multi-crore project in 1993 : the coop body started incurring losses. The staff appointed did hard work for convincing people for producing higher quality of milk and enrolling them as members of the society. 133 A COOPERATIVE MILK UNION Objectives After going through this case. analyse causes for losses. It was completed in January 1993. but started incurring losses. During the intervening period. causing production loss. in 1990) recognise. it was marketing fluid milk only. But till 1990.

Engineers and other Managers. the Dairy could not get qualified personnel like Chartered Accountants. .Cases in Marketing Management On the other hand. Since the Dairy collects only 60 percent of the milk produced in the area. due to Plant being located in rural area where facilities of urban life were not available. it desires to diversify its products. inspite of good salaries offered by the Union.

have a strong say in controlling the destiny of their projects. Located in the Western United States. the project managers' possessed up what through the project structure it led to the influential edge that seemed to exist.000. functional and project managers coexisted at the same level in the management hierarchy. Due to of the matrix structure. HEC grew rapidly in the 1970s to become one of the nation's largest government contractors with employees in excess of 50. Duplicating these equipment purchases for every project would not be cost effective. the project managers in the engineering divisions wielded a great deal of power (if not total power) to set policy and make decisions. in depth • • • Huge Electronics Company (HEC) is a designer and manufacturer of electronics equipment that is sold primarily to government/military customers. Naturally. 134 HUGE ELECTRONICS Objectives After going through this case. the company organisation chart was constantly in a state of flux. Partly because of HEC's rapid growth. The manufacturing division was structured in a matrix organisation because of the large investments in manufacturing equipment necessary. you will be able to : • find an American electronics giant specialising in design and manufacture of electronics equipment for US Govt / defence forces recognise structuring pattern of its engineering and manufacturing divisions analyse 'make versus buy decisions discuss the production location for Tiger electronic cables example. however. if not the operating policy of the division. when push came to shove. both reporting directly to the division manager. While the power in the division was spread evenly between functional and project management. . the engineering divisions remained fairly stable in a classic project management structure. The manufacturing project managers did not possess the total authority shared by their engineering counterparts.Case No. Despite the changes. they did.

They are a simple design and we need to concentrate our manufacturing engineering efforts on the more complicated designs. and has an inherent distrust for the wire and cable shop because of bad past experiences. The engineering project manager can influence make-buy decisions by the way the products are specified on the drawings to be used for manufacturing facility is incapable of producing. Her advice to the MPM is: "We should offload these cables to a local vendor. Below is a description of the cast of characters who attempt to influence the Tiger MPM's decision. the plan goes into action. This plan includes the "make versus buy" plan for components. the MPM has no alternative but to have the product fabricated by a firm with the necessary capability. Project Tiger and the Cable Shop The decision faced by the Tiger MPM regarding the selection of a production location for the Tiger electronic cables is a dramatic example of the make-buy decisions faced by HEC managers. she has purchased an interest in a local wire and cable subcontractor that specializes in doing overflow work from large prime contractors.Cases in Marketing Management Make Versus Buy Decisions As a result of the fast growth experienced by HEC. At least three parties influenced the decision: (l) the manufacturing project manager (MPM) (2) the manufacturing functional managers. and final assemblies. His advice to the MPM is: "We should set up our own shop over in the new Tiger final assembly building. The manufacturing functional managers generally attempt to influence the project to have the product either assembled in their shops or not." Cable Project Engineer: Charlene Rain has five years experience in the firm and was previously in sales for a small electronics distributor. Final Assembly Project Engineer: Wally Carr has 25 years experience with the company." . and (3) the engineering project manager. subassemblies. production capacity could not keep pace with demand in many cases. depending on the capacity and the current and future workloads. This can have control over our own destiny. That's what we did on the old Stingray project and it worked great. worked his way up through the ranks. Unless the plan is met with resistance from the functional management. The question of who should/would make the decision whether to manufacture in-house or off-load a particular product (or portion thereof) was always a point of contention. Those cable guys never meet their schedules. Some of the company's product designs had to be offloaded either completely or partially for the production phase of a contract. Initially a manufacturing project plan is published by the MPM. It known to anyone at the time.

study the rationale and ethicality behind telemarketing. Mr.Case No. Mr. he couldn't do it as again his eye sight was bad enough even with his glasses. However. Mr. J & F's is a $ 150 million company. The cellular company's call centre executive said she was helpless as the incoming calls cannot be barred. The problem began when Mr. Before he could recognise the exact button on his cell. He couldn't help but receive these calls as he was not a mobile savvy person and he could not bar the incoming calls. Fredman was now in his cool and agreed to the executive's advice. John Fredman owns it and he is a 67 year old man who believes in traditional methodologies of work. Many executives of various companies keep calling him to market their products and services. you will be able to : • • • study the telemarketing culture and its effects on the customers. the call ring would irritate him and to avoid it he has to receive the call. Fredman now thought of calling the cellular company and asks for a solution. Fredman threatened the executive to sue the company as they were not able to solve his problem. . Fredman was suggested to disconnect the unwanted incoming calls. Fredman was not keeping well and these telemarketers kept calling in. Immediately the executive gave him a suggestion of changing his mobile phone. know the new methodologies in the way of e-Marketing. 135 e-COMMERCE O bjectives After going through this case. Being quiet busy with his schedule he cannot manage these calls on his mobile phone. Fredman is not adaptive to the new latest technologies in the market.

However the problem remained.Cases in Marketing Management Fredman received a brand new mobile phone from the company in exchange of his old cell phone. .

she is fair. Suddenly. "Love Fairever" is a fairness cream meant for ladies. every mother-in-law wants her daughter-in-law to be fair. beautiful and attractive !! Soon she is the talk of the town. Simran. • learn the cause and effect of an advertisement. Simran gets engaged to a rich and handsome boy. justify the social and ethical issues of advertising. Social rejection is very disastrous. many girls have ended their lives. The cream promises to make the skin fair in four weeks. however that is not practically true with this cream. "Lucky boy to have Simran!" Now. Her relatives rave. The ad campaign of the product was aimed at dark girls and promised fairness within four weeks. Embarrassed and humiliated with the rejection in marriage proposals as well as within social groups. every girl would want herself to be fair. A visual effect has been shown as in Simran turns fairer week after week. 136 'LOVE FAIREVER' . The ads showed a dark girl. However. Simran comes to know about "Love Fairever" and applies the same.Case No. this ad has made a very deep impact on Indian teenagers and especially dark skinned girls. Many girls have committed suicide because of this reason. you will be able to : • • • • analyse the marketing gimmicks of attracting and marketing a product. every boy want his girl to be fair. It is because of the Indian weather that Indians are wheatish in color. being rejected for marriage proposals as she was dark skinned. Amar.THE CASE OF DECEPTIVE ADVERTISING Objectives After going through this case. One .

pimples. Many girls (customers / non-customers of "Love Fairever") have gone under depression. many have started buying and using this cream although the cream had bad effects on the skin viz. . The National Women's Society has slapped a letter to the company's chairman which has branded its advertisements as being socially and ethically wrong and as promoting wrong concepts amongst the Indian women. etc.. Falling prey to this ad campaign. skin rashes. dark spots. oily skin.Cases in Marketing Management cannot take this easily. The letter has threatened legal action if the ads are not withdrawn by the company forthwith.

more than triple the repeat purchase rate on other Levi's products. In effect. To purchase these customised jeans the customer willing to pay an extra $ 10 to $ 15 had to go to a property equipped Levi's retailer where a salesperson took four measurements inseam. Sewed into the waistband was a bar code with an individual customer reference number. low cut or relaxed than choose from colour.Case No. Levi Strauss brought customisation to the women's casual clothing industry by introducing its Personal Pair product. where the customised jeans were assembled and mailed directly to the customer or to the store within three weeks. In 1995. fly and leg opening options. state the process of building a system. these were a manufacturing specification for a factory in Tennessee. The customer tried on the trial pair and told the salesperson about any adjustments that would improve the fit. Original Spin. A computer network transmitted the specification to the factory. 137 SELLING CUSTOMISED CASUAL CLOTHING Objectives After going through this case. The Personal Pair program achieved a repeat-purchase rate of 38%. Legs can be tapered. "Costumer choose a base jean model -classic. evaluate technical advances of IT-enabled services. straight. the program accounted for 25% of women's jeans sales at Original Levi's Stores. you will be able to : t • • summarise the basic concepts for understanding how businesses operate through systems. waist. which identified one of over 400 pairs of nonadjustable "fitting jeans" that were only for try-on use. The fall of 1998 brought the next iteration. By 1997. The salesperson used these suggestions to produce the precise measurements for the customised jeans. . The customer could order another pair easily because the personal measurement information is saved in a database. hips. and rise. which was sold to women and men. boot cut. The salesperson entered these numbers into a computer. flare or wide.

Cases in Marketing Management

files, zip or button then there are four colours to choose. A trained sales associate measures a costumer's waist and seat, inseam length is determined on the base on what shoes are worn with the jeans and whether the customer like cuffs. A computer used these measurements to suggest a pair of fitting jeans, customer try them on and decide whether they want their jeans the same size or tighter, looser, shorter, or longer. Levis jeans produced for the original spin process cost $55, and every pair has a guarantee of a full refund, a new pair, or credit." Moving further in the direction of customisation, by early 2000 retails could send measurement and order information to original spin web server. There measurement were converted to pattern used Levi's proprietary, computerised pattern-making algorithms that create unique patterns based on each buyer's size and desired features. In contrast, earlier attempts at mass customisation used a massive pattern database and matched each customer's measurements as closely as possible to a stored pattern. To help assure quick order turnaround, the company reconfigured a Texas plant to handle the special orders with work cells of seven or eight people producing one pair of pants at a time using the customer's pattern and an automated cutting table. In another aspect of its business, Levi Strauss started to sell jeans to consumers through Levi's and Dockers Web sites in late 1998 with the proviso that its retail partners would not be able to sell its merchandise over the Web. This created channel conflict, competition between a manufacturer and its retailers. Disgruntled retailers decide to put more retail effort into other brands. Online sales were disappointing and October 1, 1999 Levi Strauss reversed its strategy. It kept several different Web sites but used them for consumer information and advertising rather than direct sales. The late 1990s did not treat Levi Strauss well. It suffered sagging sales, heavy layoffs, and plant closings. After peaking at $7.1 billion in 1996, company-wide sales dropped to $6.9 billion in 1997, and further to $6 billion in 1998. What's more, exhorbitant advertising campaigns have done little to lure teens from the store racks of rival designers.

Case No. 138
HERSHEY FOODS
Objectives

After going through this case, you will be able to : •

evaluate the technical advances of IT-enabled services. explain the challenges of embracing technology without succumbing to hype and overselling. anticipate how technology will be adapted in practice.

The Halloween and holiday season of 1999 was a major disappointment for Hershey Foods, the largest U.S. candy maker. In July 1999, it had gone live with a new $ 12 million information system that combines SAP's R/3 enterprise software with software from Manugistics Group and Siebel Systems. IBM was the system integrator. Glitches in the system left many distributors and retailers with empty candy shelves in the season leading up to Halloween. Despite the complexity of the system, Hershey decided to go live with a huge piece of it all at once, an approach that is both rare and dangerous. With a number of vendors involved it was difficult to assign responsibility for the problems. Hershey had embarked on this project in 1996 partly to satisfy retailers who wanted to keep their own costs down by receiving deliveries when they are really needed. The new information system is used by Hershey's 1200-person sales force and other departments 'Tor handling every step in the process, from original placement of an order to final delivery, it also runs the company's fundamental accounting and touches nearly every operation; tracking raw ingredients; scheduling production; measuring the effectiveness of promotional campaigns; setting prices; and even deciding how products ought to be stacked inside truck." The project was supposed to go live during the slow period in April, but development and testing were not yet complete. The July startup occurred as Halloween orders were arriving. In July, Hershey informed customers that computer problems might cause delays

Cases in Marketing Management

and some customers soon started receiving incomplete shipments. In September, it announced that its turnaround time for orders would double to 12 days. In September, Hershey announced it would miss third-quarter earnings forecasts due to the problems rolling out new systems designed to take customer orders and make store deliveries. This particularly hurt Hershey during the Halloween season when it sacrificed some market share to competitors such as Mars and Nestle. Hershey blamed lower-thanexpected sales in December on a slowdown in customer order demand partly due to earlier customer-service and order-fulfillment issues. Hershey predicted its sales would be off by as much as $ 150 million for the year. The problems with the information system were reported in Hershey's 1999 annual report: "We have experienced the well-publicised problems associated with the implementation of the final phase of our enterprise-wide information system. While this has been a painful process for us and for our customers, we should remember that the system is designed to make Hershey more competitive through lower costs, better customer service, and increased sales. It has not been the easiest journey, but we still expect to arrive at our intended destination."

Case No. 139
ARAMARK UNIFORM SERVICES : CUSTOMERS IN A SERVICE INDUSTRY
Objectives

After going through this case, you will be able to : • • justify the principles that apply to any system in a business. study the relationship between information systems and work systems.

Aramark is a $7 billion world leader in providing managed services - food services and facilities management, uniform and career apparel, and child care and early education programs. Headquartered in Philadelphia, Aramark has more than 160,000 employees serving 15 million people at 500,000 locations in 15 countries every day. In corporate communications to customers and employees, Aramark makes a big point of working together to provide the best services possible in the most convenient way. Aramark Uniform Services rents, leases, or sells uniforms for service employees working in industries including food processing, airlines, manufacturing, hotels, department stores, and many more. It claims to have the broadest range of uniform and career apparel products and services in the industry. The rental service includes clean uniforms delivered every week, automatic repairs and replacements, and free upgrades. The lease option allows the customers to clean the garments without having to purchase them still, repairs and replaces worn-out garments at no cost and allows size changes. The purchase option does not offer cleaning but allows a wider range of products and fabrics, and extensive embroidering and screen-printing for personalisation. Its trademarked ApparelOne Process is designed to determine which option is best for a customer. The process starts with a needs assessment. The second phase is customisation to meet the needs of each employee group and to define the right services. The third phase is to provide proactive improvement suggestions, immediate problem resolution, and one-stop, hassle-free service. Consistent with this service orientation, Aramark announced an improved customer invoice as follows : "Spend more time managing your business........And less time learning about

Cases in Marketing Management

our invoice.... We listened when you told us our invoice could improve by making the format more readable and less confusing. Accordingly, we have taken the first step in the process of continuous improvement." The changes included redesigning and simplifying invoice layout, removing reduce clutter, and reduce customer time spent in reviewing invoices. Invisible to Aramark's customers is an enormous amount of data processing required to keep track of uniforms, services, and customer accounts. Until Aramark changed its internal data processing systems, it took three days to retrieve an invoice to resolve a customer complaint. The old paperwork system involved storage rooms full of file cabinets and approximately 100 employees who did nothing but file and retrieve invoices at branch offices. Anew outsourcing arrangement with Xerox changed that. "Aramark bills are now sent to a single Xerox-run processing center in Toledo, Ohio, Xerox scans and archives 2 million invoices a month into an electronic repository and mails out the monthly statements. The database is accessible to any one of Aramark's local offices through a secured internet hookup." According to the director of marketing services," If a customer calls with a dispute, we can instantly pull that image up on the screen and we can fax it directly to the customer. Ironically, the Forbes article that described this outsourcing arrangement presented it as a counterpoint to major internal problems at Xerox due to two bungled reorganisations. In one of them 53 administration centers in Europe and 36 in the United States were consolidated into 1 and 3 locations, respectively. "The result was chaos. The invoices and shipping orders piled up; instead of cutting expenses, the transition ended up costing Xerox money and customer goodwill."

Case No. 140
PAN AM SAT : RECOVERING FROM A SATELLITE FAILURE
Objectives

After going through this case, you will be able to : • implement a principle based analysis method that can be used as a starting point for identifying and organizing issues. t study the improvement goals related to a system.

A Galaxy 4 satellite operated by PanAmSat, a subsidiary of Hughes Electronics, tilted away from the earth at 6:13 P.M. on May 19, 1998 and began to spin because of a computer failure and the subsequent failure of a backup computer. This unexpected problem disabled 80% to 90% of the pager services in the U.S. along with a number of credit card authorisation networks, television transmissions, and other networked services. PanAmSat's effects to realign the satellite failed, but it was able to restore service within a day by rerouting the traffic the satellite normally handled. Of the 17 satellites PanAmSat had in orbit at the time, one was a spare. The recovery plan included rerouting signals for paging, retail-store services, and other services though its Galaxy 3R satellite and rerouting television signals through its Galaxy 4 had occupied since its launch in 1993. Computer failure had transformed the Galaxy 4 from a $200 million link in the U.S. business infrastructure into a 3700-pound place of space junk with a 100-foot span of solar panels. The satellite was insured for $ 116 million, and the company did not expect to suffer a major financial loss as a result. The immediate consequences of the satellite failure demonstrated the widespread dependence on communications infrastructure. Emergency communication to police departments and physicians was disrupted for hours. Customers at 5,400 Chevron stations could no longer pay by credit card at the pump because automated credit-card authorisation requests were transmitted from antennas atop gas stations through the Galaxy 4 satellite. Customers in Wal-Mart stores had similar problems. At home, the nonresponse of family

Cases in Marketing Management

members and friends when paged repeatedly led to confusion and annoyance. The cost of satellite time suddenly jumped. It had ranged from $100 to $500 for a 15-minute block depending on the satellite's location; after the failure the prices jumped to $250 to $600. Annual prices of $900,000 to $ 2.500,000 seemed to be increasing by up to 50% Ten months later, a failure on GE Americom's satellite GE-3 disrupted a number of key networks including PBS broadcasting, CNN, and Turner Classic Movies. Although satellites typically have been extremely reliable, with a failure rate of less than 1%, the widespread impact of this event was a reminder of vulnerability to infrastructurerelated weak links that affect business and society. It is possible to imagine ways to reduce risks through investment in redundant capacity, but the costs are prohibitive in many situations. For example, CBS television shifted to a backup satellite when the Galaxy 4 could not carry its planned broadcasts. CBS could afford the backup, but many paging businesses do not have the resources to keep a satellite idling in reserve.

Case No. 141
CISCO SYSTEMS
Objectives

After going through this case, you will be able to : • • • • • examine the working of a business process. study the process modeling and graphical methods for summarising a process. state the process characteristics. determine how well processes perform. explain communication and decision making activities that play key roles in processes.

With over $21 billion in sales and over 38,000 employees, Cisco Systems is one of the most highly valued companies in the world. It had the good fortune of providing routers and other components of the Internet's infrastructure just as the Internet was taking off. Other firms were in the same line of business, but Cisco found distinctive methods for servicing its customers, performing its internal operations, coordinating with its suppliers, and successfully acquiring and assimilating other firms whose products complemented those that Cisco already had. Cisco places so much emphasis on customers that customer satisfaction is an explicit part of the personal goals for a majority of its employees. Cisco actually outsources much of its production, and in many cases passes orders on to suppliers who send the product directly to customers without additional handling by Cisco. One part of Cisco's success is related to the way it uses information systems, both its internal Oracle enterprise software and the Internet-based systems that provided data and communication and links for customers and employees. One advantage Cisco had in this regard was that it was founded in 1984 and therefore was not encumbered by the remnants of incompatible and poorly programmed data processing systems from the 1970s. "Despite its central role as a maker of Internet equipment, Cisco discovered the power of

the discounts given on those orders. but there still was no commercial Web—customers had to dial into Cisco's computers directly. Cisco engineers looking for a better way to interact with customers turned to Mosaic. Cisco's employees have come to expect that everyday data processing tasks that annoy and frustrate employees of most companies will be done quickly and efficiently through web-based applications. .Cases in Marketing Management the Internet almost by accident. This helps the company react more quickly to the market. Cisco uses a system of top-down transparency in which managers at every level in the company have extensive. In February 2000. margins. distributors. At any time. Cisco's sales database is updated three times a day. Cisco's chief financial officer can obtain the company's revenues. Shifts and competitive threats : It also allows Cisco executives to maintain tight control without suffocating the employees' entrepreneurial spirit. salespeople. and other business partners had access to portions of Cisco's internal website. Cisco began using Mosaic. Cisco has even shortened the time it needs to close its books at the end of each quarter from the ten days four years ago to one day today while cutting spending on finance from 2% of sales to 1 %. Cisco created a simple text 'bulletin board' for customer questions and comments. up-to-date information on sales and other important business transaction. 97% of it orders arrived via the Internet. suppliers. engineers. and the top ten customers for the previous day. By 2000. In the early 1990s. the first Web browser. For example. Financial data that once took weeks to gather and verify is now collect automatically as part of doing business. allowing the Cisco management to keep tabs on whether sales goals are being met. and others who need to travel to the customer site can enter their expense reports using the Internet instead of turning in handwritten reports that certainly involve delays and will have a higher chance of misinterpretation and errors. customers. In late 1993." Cisco began using the Internet for selling in 1995. orders.

Patients complained that the insurance companies or HMOs chosen by their employers forced them to switch doctors. It started by saying. 1998 to address some aspects of these issues. H. you will be able to : • • • • compare different types of databases. high-quality medical care. 3605. "A group . Doctors. On the other side. Section 112 (one of 19 sections of the bill) concerned the collection of standardised data about medical care. but also selfemployed individuals who pay for themselves. quality assurance. 142 PATIENT'S BILL OF RIGHT ACT OF 1998 Objectives After going through this case. The rapid growth of health maintenance organisations (HMOs) and managed care was a hot button issue because it involved contradictory goals. state basic concepts related to computerised data files and data modeling.R.Case No. The resulting tug of war left many stakeholders unhappy. people wanted to be able to choose their own doctors and to receive convenient. summarise the capabilities of database management system. and HMOs were caught in the middle because greater patient choice and higher quality care are more expensive to deliver. The insurers and HMOs complained they couldn't make a profit. primarily businesses and government organisations. hospitals. On one side. reducing medical costs was a key issue for anyone paying medical insurance premiums. learn how to store and control databases. patient information. or accept inadequate treatment. use inconvenient hospitals. They also complained they could not get outcome data to help in choosing a physician. It contained provisions related to access to medical care. and grievance and appeals procedures. was introduced in the House of Representatives on March 31. The doctors complained that they wasted inordinate amounts of time trying to convince insurers that particular treatments were necessary. the Patients' Bill of Rights Act of 1998.

This is because the HMOs have greater central control over patient medical records and over the process of routing patients to specialists. (4) data on satisfaction of such individuals.. to the extent feasible and appropriate. The process of sifting through different doctors' records to track the type and quality of treatment each patient received would be much more complicated for the preferred provider plans. Such data shall include at least: (1) aggregate utilisation data. they would therefore be required to spend more on their internal record keeping and therefore would have to raise their rates. and (5) data on quality indicators and health outcomes.. (3) data on disease-specific and age-specific mortality rates and (to the extent feasible) morbidity rates of such individ uals. In contrast. and enrollees. and the standard format for such data. 3605 would be substantially lower for HMOs than for preferred provider plans. The costs of the data collection called for in Section 112 of H. data on pediatric cases and on a gender-specific basis. The plans with the least choice for patients are HMOs and other organisations that permit only member physicians to provide services except under extreme circumstances. including data on voluntary disenrollment and grievances. The data collection provisions of H.R. This would tilt the economic advantage further in the direction of the HMOs that provide less choice. The plans with maximum flexibility for the patient are preferred provider plans. but charge the patients more for physicians who are not a member of the plan.R. which allow patients to obtain medical services from any physician.Cases in Marketing Management health plan and a health insurance issuer that offers health insurance coverage shall collect uniform quality data that include a minimum uniform data set— The Secretary [of Health and Human Services] shall specify (and may from time to time update) the data required to be included in the minimum uniform data set. (2) data on the demographic characteristics of participants. If the law passed. . including. but some observers believed they might actually have the opposite impact. 3605 were intended to support the patient's choice of physicians. beneficiaries. large preferred provider plans may have thousands of doctors with no central repository of medical records and little consistency in record keeping.

. and China. justify the importance of formal models. China had opposed the NATO intervention in Serbia and the bombing caused further strains in the relationship between the U.S.Case No.S. An 11 -month inquiry into the incident led to the firing of one middle manager at the CIA and punishment of six others for their roles in providing incorrect information about the target. 143 U. The Chinese Embassy in Belgrade had 'unmistakable markings' that should have prevented its bombing. The bombs had actually hit the targeted building... NATO had given the Serbian leadership an ultimatum about ending the abusive treatment of ethnic Albanians in the Serbian province of Kosovo. killing three people and injuring twenty others. explain the performance concepts for evaluating information.. Air Force fighter jet during the 1999 NATO offensive against Serbia struck the Chinese embassy in Belgrade. It was impossible for the U. Bombs dropped by a U. Some observers believed the bombing was not an accident and a backlash of anti-American sentiment occurred in China. The embassy had moved to this site four years earlier. One spokesman said." In events leading to the bombing. but that building was the Chinese embassy instead of Serbia's Federal Directorate of Supply and Procurement. Chinese officials were not satisfied with this result. S. "To pretend that the United States did not know the position of the Chinese Embassy in Yugoslavia is not credible.S. . which was actually over 1. you will be able to : • • • study the technique for understanding information requirements.000 feet away and did not resemble the embassy physically. Serbia did not conform and NATO decided to begin air strikes under the assumption that several days of bombing would force the Serbian President Milosevic to agree to NATO's . side to mix up these two buildings. AIR FORCES Objectives After going through this case.

When the bombing began.. and a U." The potential target was given an official number. an intelligence official said that the building looked more like a hotel than an office building. Bombing targets were initially suggested by NATO's Joint Analysis Center in Britain and at the Air Force's European headquarters in Germany. These concerns were actually unrelated to the NATO action. government map produced in 1997.Cases in Marketing Management demands. based on a limited knowledge of addresses on a parallel street. which was built in 1996.000 potential targets including electric grids and commercial facilities.S. NATO's commander asked for a list of 2. the officer who was dismissed used an unclassified military map to try to pinpoint the building's location. While announcing the punishments for those involved in the fiasco. On the map. but over half of those were hit within the first several days. 2 Bulevar Umetnosti. the bombing was caused by a fundamentally flawed process for trying to locate the directorate's headquarters in the New Belgrade section of the Yugoslav capital. "According to administration. Realising that a much more extensive bombing campaign might be required. which the National Imagery and Mapping Agency produced in 1997. Armed with only an address. defense and intelligence officials. the other listed the embassy and its grid coordinates in its index but did not mark the building on the map itself. the call for more targets brought other agencies into the process. Milosevic did not capitulate until the bombing had gone on for 78 days. the building that turned out to be the embassy was not identified. the CIA director also singled out another officer who heard about the proposed target informally and despite having no direct authority in the matter called NATO to raise doubts and contacted several others at the National Imagery and Mapping Agency and the NATO task force responsible . 0251WA0017. Around 650 targets were bombed during the campaign. Looking at satellite images after the bombing. The person who tried to locate the Directorate used three maps: two Yugoslav commercial maps from 1989 and 1996. Determining these targets is a complicated process that uses intelligence reports and satellite photographs. NATO had 219 military targets for the bombing. None showed the location of the Chinese embassy. Only after the disaster did the CIA turn up in its files two maps that accurately placed the embassy: one was a map handed out by a Belgrade bank that showed a branch office near the embassy. The CIA's Counter-Proliferation Division proposed the Directorate of Supply and Procurement as a target because of long-held suspicions that it was involved with smuggling missile parts to other countries. The method for locating the building was based on triangulating between other addresses on the assumption that street addresses are numbered uniformly. the map showed the embassy in its former location in central Belgrade.. As the known targets were being hit. Instead..

.Case 143 U. Air Forces for the bombing runs. For a variety of reasons his concerns were not conveyed to senior officers who could have called off the attack.S.

including shingles. Owens Corning embarked on a long-term effort to reorient the entire company. The company was organised around different product lines. CRM. Furthermore. 144 INTEGRATING ACROSS BUSINESS UNITS Objectives After going through this case. and other materials.Case No. One of its most daunting tasks was a complete overhaul of its hodge-podge of outdated and . Externally. you will be able to : • state the use of important information system categories such as CAD. siding. It reorganised sales so that salespeople sold the entire company's whole line instead of just one product line. and its revenues were shrinking slowly. Builders and remodelers also saw few benefits in this product line orientation because they were less concerned with selecting the right brand of a particular material such as insulation and far more concerned with timely. Internally it had 200 incompatible systems dedicated to specific tasks such as invoicing for specific product lines. there were significant gaps in the product line. It was deeply in debt due to a financial restructuring five years earlier. meaning that retailers dealt with four service centers and four sets of bills. • • Owens Corning manufactures building supplies such as fiberglass insulation and roofing materials. It acquired 14 smaller manufacturers to fill in the products it lacked. In 1991 the company faced challenges on all fronts. EDI. convenient acquisition and the delivery of all the materials for a project. and sells them to building contractors and to building supply distributors such as Home Depot. MIS and DSS. waterproofing. tudy how the IS categories are linked to specific functional areas of business. idealise types of information systems such as TPS. the company was out of step with the direction the market was moving. SCM. although the company wanted to provide a complete "envelope" for a house.

Councils with members from all five groups made sure that each process meshed with other processes. distribution. and $80 million in 2000. but notoriously complex. reserve inventory." By mid-1995 the project team of 250 people was housed at Toledo headquarters to maximise internal coordination and minimise delays in answering questions. the project team and local business operations sometimes had to be satisfied with "good-enough reengineering" rather than insisting on the best way to perform each process. such as production planning.Cases in Marketing Management incompatible information systems. setting it up on the computers. Estimated benefits were $ 15 million in 1997. However. In some areas. manufacturing. Each group included representatives from local business units and IS and business professionals from across the company. . each focused on a different set of processes. Anew head of IS was hired in 1994. After reviewing the state of the existing information systems in the light of the company's strategy. and training people to use it. and produce consistent bills. and that its success would be defined in business terms. not the IS group. Owens Corning embarked on a twoyear rush project to replace its old order fulfillment. In what was virtually a "bet the company" strategy. enterprise software package. Project cost through 1997 was $ 110 million for a combination of analysing how to use SAP. SAP's capabilities were not as good as those in homegrown systems. It was divided into five groups. $50 million in 1998. such as a 50% reduction in inventory. because the company's strategy required greater integration. he and his staff decided that an integrated information system was needed so that salespeople could enter orders. inventory. and financial accounting software with SAP's R/3 program. The head of IS insisted that half the staffing for this project would have to come from the business units. an integrated.

an e-commerce site for Enron's trading operations in energy and other areas. CRM. you will be able to : • explain the use of important information system categories such as MIP.Case No. CIM. MIS and DSS.000 miles of pipeline and has built or acquired production or distribution facilities as it has moved into other industries. Within a year of its launch." excess capacity on fiber optics networks. It now controls over 10. and plastics. it had the highest amount of dollar transactions of any e-commerce site in the world. • Enron is a leading energy and communications company based in Houston.000 online transactions involving commodities with a gross value of $183 billion. became the leading gas and power trader in Europe. idealise types of information systems such as TPS. over 60% of the world's wholesale gas trades were on EnronOnline. Enron is actually a principal in all of the transactions on its site. and also built other trading operations in paper. gas and electric power trading it branched out. As of October 11. coal. Starting from its base as the dominant player in the U. it was a far cry from buying several books at a B2C site. At an average of over one-half million dollars per trade. Its traditional business was buying and selling gas and electricity by purchasing from public utilities with surplus supplies and selling to utilities that need more. In late 1999 it opened Enron Online. It guarantees delivery or payment on all sales executed through EnronOnline.000 miles of fiber. Unlike a typical B2B exchange that provides services for buyers and sellers but does not own anything that is being traded. EFT. Within one year. In January 2000 it announced it would begin trading "telecommunications bandwidth. If a public utility uses the site to sell a fixed amount of gas to be delivered over 30 days in June. Enron had used the site for executing over 350. .S. 145 ENRON : THE WORLD'S LARGEST eCOMMERCE WEBSITE FOR COMMODITY Objectives After going through this case. It has over 32. 2000.

Buyers and sellers see real-time price spreads of both. it will actually make sure the delivery occurs unless it sells the contract to someone else. those prices might have changed. By the time monthly prices had been quoted on the telephone. Reuters and Dow Jones have offered subscription-based real-time commodity pricing for some time. The switch to Enron Online removed the company's 500 traders from the order process. including credit checks. Conversely.Cases in Marketing Management Enron will actually use its pipeline facilities to receive and resell that gas at whatever price it can get at that time. . The fact that Enron participates in a large number of trades and controls a large number of buy and sell contracts at any time gives it a great deal of flexibility to recombine those contracts in new ways to meet the needs of utility buyers. the sell price and the buy price. allowing them to handle 10 times the previous order volume by focusing solely on bidding based on Enron's own needs and costs. if Enron contracts to deliver a guaranteed supply of gas to a utility if its local temperatures go over 95 degrees. Enron Online lets buyers and sellers act on prices that can change by the minute. In some ways this is like doing a jigsaw puzzle whose pieces are existing and potential contracts for future delivery. but Enron's service provides real-time pricing for 800 products at no charge. Transactions that once took three minutes over the phone now take a few seconds.

process improvement. and the selection of one of eight categories the website offered (accounting. the person needing help accessed an extensive collection of Frequently Asked Questions (FAQs) in many areas. tax. general background information about the user's firm. 146 PROVIDING CONSULTING THROUGH THE WEB O bjectives After going through this case. information technology. you will be able to : • explain the concepts including three dimensions for visualizing the products and services of the work system. Each year. this award program honors visionary uses of information technology that produce positive social. The forms were routed . attracting customers.Case No. the form requested the general topic area (such as organisational change). and other). economic. personal finance. and educational change. • • In May 1998. Ernie provided client benefits by using information technology instead of much more expensive face-to-face meetings. After logging on using a company's password. In addition to the user's question itself. study the coverage of e-commerce in handling the challenges such as establishing and integrating systems. Ernst & Young announced that its online consulting service called Ernie had been nominated for a Computerworld Smithsonian Award. Companies that used this service paid $6. If the FAQs didn't provide the answer. human resources. corporate finance.000 per year for access to information on the Ernie website plus the ability to direct questions to E&Y consultants via e-mail. Ernie was started in 1996 as an Internet-based consulting service for mediumsized companies that can benefit from the knowledge of consultants but cannot afford the high prices experienced consultants charge for extended engagements. evaluate the understanding of the phases in the customer experience related to a product. the user could direct the question to human experts by filling in a computerised form.

actionable advice related to specific client questions and charged by the question.com.to twopage response came back via e-mail within two days. in mid-1998 it included five "Ernie SuperTools.500. and Management Accounting. and programmers to learn recent software applications. Responding to predictions that Ernie would cannibalise E&Y's traditional consulting business.Cases in Marketing Management to appropriate Ernst & Young consultants using its corporate intranet and a one. The information. markets. Management Review. .com was no longer visible on the Web." Several years later. in 1998 the firm's director of Internet service delivery said that the firm had not viewed this as an important issue. Users could ask as many follow-up questions as they wanted." Ernie Diagnostix for supply chain provided a way to compare a firm's supply chain with those of top-performing companies in an E&Y database. "Bringing a team of consultants onsite remains the best way to implement large computer systems or to bring large-scale change to an organisation. Ernst & Young brought out a new online service called Ernst & Young Online Tax Advisor.ey. Real Estate Forum. and industry trends. including HRfocus. The pace of change is so fast today. could be used without the direct involvement of consultants. They need help today. Now they don't. and traditional consulting can't offer that kind of help. Alink to the Gartner Group's self-paced courses provided a way for end users. Ernie Business Analysis provided a way to commission an in-depth report to analyse competitors. A 1998 extension called Ernie MediaWatch also linked Ernie to seven prominent trade magazines. By 2000. In addition to FAQs. managers. directly accessible through www.ernie. Tax Advisor had handled over 15. So Ernie is serving an entirely new market—the market for decision support. that there is a need for immediate support to help navigate the waters of change. That need hasn' t always been there.000 questions.200. A dedicated group of subject matter experts answered the questions. The client could get a feeling for the fee for an inquiry by looking at a list of previous inquiries and the fees charged. the international consulting company Cap Gemini acquired Ernst & Young's consulting unit and www. in early 2000. The Tax Advisor provided specific. The maximum fee per inquiry was $2.ernie. Ernie Software Selection Advisor provided an eight-step approach for selecting the right enterprise-wide software package.ey. Linking to these magazines provides additional expertise and perspective that otherwise might not be as readily accessible. A technology selection tool provided a way of determining technology needs and taking advantage of E&Y's buying power. Organisations used to have time to adapt to change. with the average around $1.

Atlanta. The $450 billion grocery market is 15 times as large as the $30 billion book market. move the order to a refrigerated Webvan delivery truck. nonprescription drug products.98 versus $7 for drugstores.57 Borders founded Webvan after concluding that a carefully engineered distribution center could provide timely. The average price per item is $1. 147 WEBYAN : CAN AN INTERNET GROCERY MAKE A PROJECT? Objectives After going through this case. Several unsuccessful waves of online grocers had preceded Webvan. but the economics are daunting. who had previously founded the book chain Borders Books. and books. highly automate distribution center designed to package the items in a specially designed tote. Sacramento. study the criteria a customer uses to evaluate the product of a work system. The grocery industry turns on margins of 1 % to 2% of sales. When the order is received. Webvan is an Internet retailer founded by Louis Borders. Webvan's first operations in the San Francisco Bay region. and that the lower cost of operating a distribution center could more than offset the cost of vans and drivers. cost effective grocery service. assess the importance of the system as providing an effective self service environment. and general merchandise such as houseware. Webvan customers submit orders using its "Webstore". you will be able to : • • • state the relationship between Customer and product.) Webvan charges approximately the same prices as typical grocery stores and pro vides approximately the same quality. (During 2000. It delivers food.com and added sites ii other cities.Case No. and Chicago allow customers to order the same popular grocery products that they can order from a Safeway or other large grocery stores. pet supplies. and complete delivery within a time window committed to the customer at . whose third-wave model is based or highly automated distribution centers containing miles of conveyor belts. Webvan's order fulfillment process occurs in a large. Webvan merged with Homegrocer.

up from the current average of three times a quarter. Deliveries from the Oakland facility occur from 7:00 a. to 10:00 p. . Webvan had an innovative business model.8 times each quarter. and turkey stuffing. When customers tried to order those goods. Webvan had not yet become profitable even in its initial San Francisco facility. Webvan planned to improve its Web site and offer preferred deliveries. To achieve break-even. 2000.000 unique users to 294.000. some gravy products.m. The Webstore is divided into 11 intuitively organised categories and allows the customer to find items quickly and efficiently by drilling down from general to more specific categories. Customers schedule their delivery by selecting a time from a grid of 30-minute alternatives on the same day or within the next several days. but by mid-February 2001 the price had fallen below $0. every day of the week. Following its merger with Homegrocer. The torrent of shoppers also caused some longer-than-normal delays in turning pages on the site. its revenues for Q3 were $87 million but its loss was $120 million. The number of shoppers jumped from 144.500 orders per day.com. According to the Internet research firm PC Data.300 to 3. with an average order size of $105. To add to shopping convenience Webvan encourages! Customers to keep an online list of nonperishable items they purchase regularly. it had some of the same inventory problems that other grocers have. a 99% drop from the peak.Cases in Marketing Management the time of the order. This approach automatically tracks every item purchased art therefore creates much more accurate customer profile data than is available through customer loyalty cards and other methods used by typical groceries. The company delivered an average of 2. Through Q3 of of 2000. it would need 3. a message popped up saying they were out of stock. coupons. Customers can add items to a shopping cart or save them in a shopping list. It ran out of pumpkin-pie filling. and online promotions to its best customers in an effort to achieve that goal.350 orders each day. After Webvan went public in late 1999 share prices went as high as $34. To achieve that goal. the Monday before Thanksgiving. Webvan's total traffic on the previous Saturday more than doubled from the week before. such as moving from produce to fruits to bananas. but on November 20. The shopping cart is always visible and instantly updates and calculates the order total while the customer shops. Customers must be at home to accept delivery of perishable or frozen items or regulated products such as alcohol and tobacco.m.34 per share. the company's best customers would have to shop on average 3.

noting that most new hires have no child support obligations whatsoever. point out that the success of any system in business depends on its participants explain the impact of ethical issue such as privacy and access on the users. Several states already had state directories that had been quite useful. 148 CREATING A NATIONAL DIRECTORY Objectives After going through this case. and Justice Departments would also have access for the some purposes.or part-time job in the United States by all but the smallest employers. you will be able to : • • • • assess the negative and positive impacts of work systems study the impact of information systems on people at work.Case No. Under the new law. One of its many provisions called for the creation of a National Directory of New Hires containing the name. social security number. The Internal Revenue Service (IRS). the directory would be available to state welfare and child support agencies. The U. Including information about them in this database would be a threat to their privacy because so many agencies would have access to this information and because data in this type of database has not been totally secure in the past. This type of risk had been publicised in 1992. Welfare officials predicted that matching the federal and state directories would produce billions of dollars in child support payments. Some privacy advocates voiced alarm about the new database. In Missouri. when an 18-month federal . Social Security Administration (SSA). address. for example. child support collections had increased 17% in 1996 after the state required reporting of new hires even though its state directory did not cover people who had moved to different states. Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 as part of an effort to change many aspects of the welfare system.S. and wages for each of the 60 million people hired into a full.

and insurance companies. This request followed shortly after a Federal appeals court reversed the 1995 conviction of an IRS employee who was also a Ku Klux Klan member. The going rate to obtain a ten-year earnings history within three to five days was apparently $175. The conviction was overturned because the prosecution failed to prove that the former employee had done anything with the information he collected. more than 420 IRS employees received some form of discipline for illegally browsing through the tax returns of friends. prospective employers. the IRS has increased its training on privacy issues and has installed automatic systems to monitor data access by its employees. Since that time. lawyers. In 1997 the IRS Commissioner asked Congress for legislation that would add criminal penalties to the law that prohibits IRS employees from snooping into taxpayer records.Cases in Marketing Management investigation found a ring of "information brokers" who allegedly bribed SSA workers to steal personal information. In 1994. and neighbors. Buyers of the information apparently included private investigators. That employee had been convicted of using his computer terminal to look through the tax records of other white supremacists he suspected of being informers for the FBI. relatives. of which $25 went for the bribe to the SSA worker. .

and specialist magazines.com. Business executives can access the ElU's full-text reports directly over the Internet at www. . the Economist Intelligence Unit. Converted to dollars. • The Economist Group grew out of The Economist. Lotus Notes. the Journal of Commerce. $35 mil-lion. explain the strategic issues. you will be able to : • assess the strategic and practical issues involved when deciding how to incorporate IT into a firm's business strategy. and business environment in 195 countries. Vienna. and Cambridge (USA). New York. ElU's electronic publishing division provides the ElU's full database of country. 149 ECONOMIST INTELLIGENCE UNIT: LAUNCHING A WEB BASED BUSINESS INTELLIGENCE SERVICE Objectives After going through this case. regional. and industry information through a range of electronic media including CD-ROM.eiu. news services. It provides objective and timely analysis and forecasts of the political. The Economist Intelligence Unit was founded in 1946 and directed toward companies establishing and managing operations across national borders anywhere in the world. The intelligence is based on regular contributions from a global network of more than 500 information specialists. and $38 million in the previous three years. which was launched in February 1996 as a way to make the existing content more conveniently accessible. Hong Kong. online databases. compared to profits of $46 million. Economist enterprises.Case No. its revenue for the fiscal year ending in 2000 was around $330 million and its loss before taxes was around $74 million. CFO Magazine. Singapore. EIU is a worldwide operation with offices in London. economic. a weekly newspaper of international news and business founded in Great Britain in 1843. and customised network feeds to corporate intranets. It currently comprises The Economist.

Each day. The pricing for the regional network goes from $3. which includes the option to set up a range of personal pro-files.900 to $46. working in a variety of different formats and timelines. Pricing is based on the number of authorised users. especially how to drill down into the EIU database to find information they needed.viewswire. It also includes carefully selected analysis from other respected sources to ensure a full perspective on international business conditions as a complete decisionsupport tool for global executives. ViewsWire required the EIU to reengineer how it organized information internally and how it coordinated that process across more than 500 editors and analysts in more than 100 countries. They would also have to learn to use more internal resources within the Group instead of only turning to their typical sources for reports. Users had to learn things as well. by subject and by a powerful search facility. which describes itself as a pioneering web-based intelligence service from the Economist Intelligence Unit. The aim is to give the content the analytical depth needed to make informed decisions about doing business around the world. political and business developments around the world. The mandate of publishing a total of 100-150 new articles every day previously required a quota of submissions from reporters and editors. . it provides views not news from the Economist Intelligence Unit and the rest of The Economist Group. www. The previously existing culture had been organised around producing news articles on strict deadlines. To successfully produce.000 users. it supports navigation by country.650 for one user to $102. the ViewsWire supplies 100-150 analytical articles on any of 195 countries. It delivers timely analysis on key economic. Unlike a traditional news service.000. Now they had to change their emphasis and had to be on alert to provide analysis and forecasts in response to fast-changing events. Editors had to learn to break out of publishing time frames to adopt more of a daily focus in their work.050 for over 100.com. the EIU launched ViewsWire.Cases in Marketing Management In May 1998. The sliding scale for the Global EIU ViewsWire network goes from $8.

improve customer satisfaction. dispersed . with market-leading operations in Mexico. Founded in 1906. and the southwest United States. and emissions far lower than legal requirements. Philippines. Although it was a laggard IT user through the 980s. diversifying globally to cushion against volatility in local markets. with operating costs of $25 per ton. understand issues related to project management. reviewed. Cemex is one of Mexico's few truly multinational companies. and reduce bureaucracy and excess staffing. In 1992 Cemex purchased Spain's two largest cement companies. became its CEO at age 41 in 1985. such as by consolidating 19 offices into one. and reduced the workforce dramatically. you will be able to : • • study the methods for selecting among proposed information system investments. a Stanford MBA whose family owned a third of the stock. with revenues of $4. 150 CEMEX: INCORPORATING IT INTO A CEMENT COMPANY'S STRATEGY O bjectives After going through this case. ready-mix concrete. Lorenzo Zambrano. Within a year. In 1987. and a significant presence in the Caribbean. and providing training and education for employees. Venezuela. It is the largest cement company in America and one of the three largest cement companies in the world. using IT to help increase flexibility. Spain. Indonesia. he hired an information system director and gave him the mandate of developing Cemex's then primitive IT capabilities. and related materials. Its strategy includes focusing on cement and concrete products. Costa Rica. marketing. roughly $10 lower than the industry average. developing efficient production and distribution processes. Egypt.Case No.8 billion and close to 65 million metric tons of production. and sale of cement. their operations thoroughly. Its state-of-the-art Tepeaca facility supplies one fifth of the Mexican market and may be the lowest cost cement producer in the world. Dominican Republic. distribution. Panama. Cemex is now widely recognised as a company that uses IT extensively and views IT as an integral part of its long-term strategy. Colombia. Cemex and its subsidiaries engage in the production. invested in facilities.

and the expansion of Cemtec Cemex's information technology and Internet consulting services company into new markets. Lotus Notes. Application areas that demonstrate the importance of IT include management information and control of operations. costs. Eliminating these lengthy delays in evaluating production. The reason for this dramatic improvement in customer service is its dynamic synchronization of operations. capricious weather. delay. CxNetworks will initially focus on three business areas: the development of online construction marketplaces. CxNetworks will leverage Cemex's assets onto the Internet and extend the reach of the company into marketplaces that complement its core business. CxNetworks is in the process of developing and will soon launch a series of online construction market places with a variety of local partners in South America. Today. reschedule. the creation of an Internet-based marketplace for the purchase of indirect goods and services. maintenance. a cement plant in a town with only 20 telephones used a satellite dish to transmit voice and data. managers could use the satellite-based communications network to monitor operations and market conditions all over the world and to communicate using voice. In one case. Use of IT in controlling operations occurs at many points. low-cost operation by making it possible for management to take action quickly instead of waiting almost two months to just receive the data in some cases. and sales volume helps in running a lean. In 1995. The result is significant savings in fuel. recent production data. an endeavour that used to take a whole month. Cemex's ready-mix delivery trucks are equipped with dashboard computers that allow tracking using global positioning satellite technology. which has increased the productivity of the company's trucks by 35%. and payroll costs. Such conditions often forced customers to cancel. a new subsidiary that will build a network of e-businesses. thus bypassing Mexico's chaotic phone system. By 1998. Europe. because of traffic gridlock. and even the deployment of trucks dispatched by different cement and concrete distribution centers. and other technologies.Cases in Marketing Management operations were being linked via satellite. A central dispatcher in a region constantly reroutes the trucks as customers cancel. or speed up orders. and a considerable increase in customer goodwill. the United States. A Cemex news release in September 2000 announced the launch of CxNetworks. Cemex managers can immediately link to any of the 18 plants in Mexico and immediately access the status of each cement kiln. Cemex could promise delivery no more precisely than within three hours of the scheduled delivery time. video. at its largest operations in Mexico and Venezuela. or change half of their orders. Financial statements are available two days after the end of the fiscal month. as an integral element of its overall eenabling strategy. and . Cemex is committed to delivering ready-mix shipments within 20 minutes of the scheduled time. and labor disruptions at the construction site.

as well as online services and information to small and large contractors. and other construction industry participants. builders. These businesses will offer an array of construction products.Case 150 Cemex: Incorporating IT into a Cement Company's Strategy Mexico. . including cement.

study different approaches for building information system. Founded in Elkhart. Contrary to consultant advice and prevailing wisdom. with each focusing on one area but no one individual in charge. sales and distribution. Further analysis by an internal committee led to a July 1996 recommendation that the company should go with SAP's R/3 system and should pur-chase modules for finance and controlling. valves. It is a privately held company with around 3. NIBCO Inc. In 1995 its management became concerned that its internal systems would not support the company's growth path because they relied on a hodge-podge of incompatible computer applica-tions that could not communicate with each other. material management and production planning. IBM was chosen as an implementation partner even though NIBCO believed it had not done a successful big-bang implementation up to that point. A strategic IT planning study with a consulting' firm recommended that NIBCO replace its legacy systems with an ERP system on a client/server platform over a three. and actuators to residential and commercial construction.000 employees and revenues around $500 million. industrial. you will be able to : • • • identify the phases of any information system project understand how these phases are performed. the committee recommended a "big bang" implementation in which all the modules (except human resources) would go live at the same time so that NIBCO could pursue its business goals without further delays. and irrigation markets. Three coleaders of the project were selected. pipe. Business coordina- .to five-year time frame. and human resources.Case No. is a lead-ing provider of flow-control products such as fittings. Indiana. 151 NIBCO: A "BIG BANG" IMPLEMENTATION OF ERP Objectives After going through this case. in 1904 as the Northern Indiana Brass Company.

and we brought it in on time and on budget. the company created a bonus plan in which every salaried employee would receive a bonus depending on six criteria related to meeting the schedule and budget for the project. manufacturing. To compensate for the stress of doing so much extra work. The November 29. consultant time and our time. Our cost was $ 18 million. In addition. The business jogged. including training time. The project team worked in a 50. phones were in a hallway leading out of that area. but we've had no troubles. To avoid distractions. 1997 date proved impossible because of delays in the consolidation of a number of distribution centers. "We knew we wanted to go to an ERP system. According to one of the three project leaders. it had been necessary to load the master data for manufacturing six times and more testing was needed. In July 2000. on schedule.Cases in Marketing Management tion and change management went to long-time NIBCO managers. We rolled it out on Jan. This meant that others in their areas needed to take over the work they were previously doing. but getting there nearly killed us. technology went to an experienced CIO who had joined the company in 1995. A great deal of the work would involve figuring out how to standardize what previously had been ten different ways of doing things in ten plants with ten different databases. Data from 85 files and a number of databases had to be cleaned up and loaded in order to test the data system with real data. The project team included three business process teams of seven or eight people. Our service to customers diminished during that time. 1996. No replacements were hired for important individuals who had moved from their primary responsibilities. 1997." People hadn't heard the horror stories about SAP yet. two and a half years after the big bang. Project kickoff occurred on September 30. a change management team. We had at least 150 people assigned full-time to the project. 1. "NIBCO has undergone a complete transformation in just a few years. on December 30. and some users still wanted to go back to the way things were. The new system did go live. and a technical team. The system was to go live at ten plants and four distribution centers on November 29. NIBCO issued a statement in which its CEO said." Ten weeks after the roll-out NIBCO was still in start-up mode in its financial. Looking back on the project in late 1999. it didn't run. Conversion from the existing legacy systems was an enormous task. 1997.000-square-foot open office. "It absolutely affected our financial performance. but the pain was worth it. with a 30-day grace period. 1998. The project leaders had worked hard on setting expectations around the difficulty of the project and the likelihood of disruptions. Monthly shipments fell well below plan. Transferring important managers to full-time project responsibility without replacing them did lead to lower productivity. We . and sales management systems. the CEO said. SAP has been well-suited to our needs.

" The company called its new way of doing business eNIBCO.Case 151 Nibco: A "Big bang" Implementation of ERP have inte-grated an SAP computer software infrastructure enterprise-wide. which reduces customer overhead by transferring to NIBCO responsibility for customer inventory management. day or night. EDI. The CEO said this was a platform to provide better and stronger service. • NIBCOpartner. order entry. and made other strategic moves to position NIBCO for leadership in the 21 st century.com. product brochures. an informational Web site providing complete product information. focused on perfect order completion. The platform includes • NIBCO. Vendor-managed inventory. catalogs. a secure Web site providing real-time access to customersensitive information and fast online order processing anytime. and specification guides. and forecasting. implemented demand-pull manufacturing. developed interactive Web sites with online ordering and other transactional capabilities for our customers. current price sheets.com. • • . which allows customers to enter orders via the exchange of standardized electronic busi-ness forms.

Although not usually associated with the computer failures. the FAA wanted to accomplish the same type of function with a few keystrokes in a totally paperless environment. The information system air traffic controllers use to control airplanes in the air and on the ground is a mission-critical system whose failure literally endangers hundreds of lives. you will be able to : • • understand how these phases are performed. 152 FAA: TRYING TO OVERHAUL THE AIR TRAFFIC CONTROL SYSTEM Objectives After going through this case. who wanted to retain paper strips they used to chart the progress of planes. Unfortunately.99999% reliability. The Government Accounting Office (GAO) warned that this was unrealistically low/The FAA pushed for an unprecedented 99. the FAA selected IBM's $3. In 1981 the Federal Aviation Administration (FAA) proposed a project to overhaul the entire air traffic control system by building the Advanced Automation System (AAS) with an initial installation in Seattle in 1992. Its ideal design goals include minimizing delays. This was not achieved with the available technology. and ensuring the safety of passengers and crews.Case No. up 22% from 1996. study different approaches for building information system. no more than three seconds of downtime per year. in 1997 there were 225 near misses by aircraft flying too close together. After three years and $500 million of FAA expenditures on prototypes. including the inability to reach the required peak load . A report in 1992 found significant technical flaws in the work to date. maximizing airport efficiency. Computer failures have occurred occasionally at control centers. it uses obsolete computers and workstations and displays only part of the potentially available information that air traffic controllers might be able to use in normal situations and emergencies. In 1984 IBM Federal Systems and Hughes were chosen as finalists for the con-tract. Contrary to the wishes of the air traffic controllers.6 billion fixed-cost-contract in 1988. leaving the air traffic controllers with little to work on but guesses and projections from last known locations.

A mock-up of the new display caused major controversy at the 1995 air traffic controllers' convention because it did not adequately handle the paper strips used to chart the progress of the planes. In 1994 the FAA administrator also launched a project to use global positioning satellites to make sure that aircraft would not fly on collision courses. Loral purchased IBM Federal Systems. Meanwhile. An initial system design by one contrac-tor was deemed unreliable in 1995 and a $475 million contract went to Hughes Electronics in 1996 to continue the work. a human factors team had solved 87 of 98 remaining issues. deciding to emphasize Display System Replacement (DSR) in a new contract with Loral.000 small. In 1994 a new FAA administrator revamped the A AS team and later threw out major portions of the AAS design. including 180. general aviation planes. The controllers had complained that the design of the Standard Terminal Automation Replacement System (STARS) might hinder air traffic control because the system's windowing software frequently blocks icons that represent aircraft on the screen. In February 1998. IBM announced a 14month delay. the next FAA administrator testified that the FAA was closer to solving what air traffic controllers described as a hazardous flaw in the new hardware and software the agency planned to install nationwide starting in late 1998 or 1999. "I am optimistic that all the human factors issues will be resolved. and air traffic systems specialists about "human factors" in the design of air traffic displays and workstations. . Six months later. 1998. By 1998 the future of this project was in doubt. The FAA administrator left the government in 1996. During 1996 and 1997 the scope of the technical requirements expanded to include as many as six new satellites and addi-tional navigation aids on each airplane. the FAA announced it would spend $270 million to address long-standing complaints from air traffic controllers about the design of STARS. the air traffic controllers." In May 2000. STARS contractor Raytheon Co.Cases in Marketing Management of 210 coordinated consoles in a single facility.. work continued on the new terminal's for air traffic controllers. The decision to modify STARS came after two years of discussions by the FAA. The admin-istrator said. The FAA and IBM both pro-posed a number of changes and finally agreed to freeze technical requirements by April 1993. Later that year. On March 5.

The worm then used Microsoft Outlook to mail itself to everyone in the user's address book. people around the world began receiving e-mail messages with the title line ILOVEYOU and a message saying "Kindly check the attached LOVELETTER from me. a VBScript worm) that destroyed artwork files ending with the letters jpg or jpeg." The attachment was called LOVE-LETTER-FOR-YOU. By various estimates the virus affected as many as 45. you will be able to : • • identify different types of risks related to accidents and computer crimes. understand some of the business conditions that increase vulnerability.000. and modified MP3 files to make them inaccessible. Inc. It used Internet Explorer to visit a Web site in the Philippines. when organizations started blocking messages with ILOVEYOU in their title. Anyone who opened the attached letter was in for a rude surprise. 1999. Later. On May 4. Even some computer users who were aware of virus threats were caught off guard because the message seemed to come from someone they knew and had the title ILOVEYOU. called WIN-BUGS-FIX. The way the worm was addressed played a major role in its rapid spread." With unintended bad timing. sent legitimate email to many of its customers marked "Great Gifts for Mom. they may have inadvertently blocked messages that could have been helpful in analyzing the situation. because the attachment contained a computer virus (technically. such as one called "Mother's Day Order Confirmation.EXE was downloaded.000 computers at a total cost of the wasted time and effort probably exceeding $ 10 billion.TXT. Soon a number of mutations of the virus appeared.vbs.Case No. where another piece of malicious software. Williams Sonoma. 153 THE LOVE BUG: HOW A STUDENT HACK CAUSED $10 BILLION IN DAMAGE Objectives After going through this case. That program searched the victim's hard drive for specific password files and sent them to an Internet account in the Philippines." . meaning that it was a program written in Visual Basic.

In Europe alone." and performed downloads from Web sites operated by Sky Internet in the Philippines. 24. de Guzman admitted that he created viruses but didn't know if the Love Bug was one of his. Although a Philippine law against computer hacking was passed after the Love Bug incident occurred. He said he saw nothing wrong with stealing software from other computers. Other companies that did not use Microsoft Outlook had no problem with the Love Bug because it could not attach itself to the software they used. He suggested that the entire network should be shut down. Computer logs at Sky Internet showed the password-stealing program was loaded on April 29 and that the programmer used Internet accounts from another Manila ISR Incriminating chat-room logs traced to email accounts also revealed several individuals chatting about hacking and the creation of virus programs. The worm actually left a number of traces that made it easy to determine its source. a computer-college student who had written his college thesis on a password-stealing program similar to the one used in the virus. He said software makers. were to blame for the Love Bug debacle because they licensed products vulnerable to sabotage. In an October 1999 interview (with his lawyer present). Its factories kept running.Cases in Marketing Management Events at Ford Motor Company exemplify what happened as companies around the world learned about the problem.000 infected computers and 30. notably Microsoft. but said he meant no harm. no such law existed in the Philippines at the time the Love Bug was launched.000 contaminated e-mail messages in the three hours before the network was shut down. Philippines. just as he has no moral qualms about the damage caused by viruses. but many employees could not access their electronic calendars. . The clues were so numerous that some experts worried they might be false tips left to thwart investigators. The prime suspect was Onel de Guzman. He acknowledged during a May 1999 news conference that he might have released the virus by accident. Ford had 1. The computer code contained the words "Manila. The manager of a Ford computer center in England determined that a worm was spreading across Ford's global e-mail network.000 salaried employees receiving 140. Members of Ford's network administration staff in Michigan stayed up most of the night writing corrective software that would be downloaded the next day to each desktop as it was reconnected to the network. and all charges were dropped.

The computer system's performance under a full . The London Ambulance Service (LAS) covers a population of 6. telephones.8 million people. state the techniques related to web based commerce. 154 LONDON AMBULANCE SERVICE: A NEW SYSTEM CAUSES A DISASTER Objectives After going through this case." A formal inquiry into this disaster concluded that neither the computerized parts of the system nor the human participants had been ready for full implementation. The software was neither complete nor fully tested. and computer displays in vehicles. 1992. Between 10 and 20 people probably died because ambulances arrived up to three hours late. As the night progressed. Operators in the dispatching center received calls about emergencies and worked with local ambulance stations to identify the nearest available ambulance and then dispatch it to the site. A new system was developed to treat all of London as a single zone. A previous system for dispatching ambulances in response to medical emergencies had divided London into three separate zones and had communicated with ambulances through a combination of two-way radios. and operators in the dispatching center were swamped with computerized' exception messages. Unfortunately the new system had not been completely tested or debugged when it was put into operation on October 26.500 calls a day. A spokesman for LAS called the situation "a complete nightmare. It effectively did away with radio and telephone calls to stations and permitted the computer to dispatch ambulance crews automatically based on the location of the patient and of available ambulances. you will be able to : • • • study a value chain for system security with special attention to security issues. carries over 5.Case No. Its goal is to respond to calls in an average of 14 minutes. Some emergency callers could not get through for up to 30 minutes. several ambulances were dispatched to the same emergency. and receives up to 2. explain the techniques related to web based transactions. calls were missed.000 patients every day.

but it gradually tied up more memory until the computer could no longer operate. This bug had little impact initially. The dispatchers reverted entirely to manual dispatching. The next day the dispatching staff reverted to a semi-manual approach in which the computer stored data but the decisions were made while contacting an ambulance station near the incident. In several memos to LAS management he had warned that the planned system would be "an expen-sive disaster" and that its rule-based. a radio communica-tions bottleneck. making the information even less accurate. Imperfect data in the dispatching system caused inappropriate and duplicated alloca-tions of ambulances to emergencies. Problems w ith th e sy stemb eheand p re d ic te d b y th e o w n e r o f a c o m p a nuyilt h oese b id to b w th system had been unsuccessful. they became less likely to press their status buttons in the right sequence. The computer problem turned out to be a software bug that prevented the computer from releasing a small amount of memory each time a vehicle mobilization was generated. but the information it received was imperfect due to incomplete status reporting from the ambulance crews. when the computer system slowed down and then locked up and could not be rebooted. poor coverage (black spots) in the radio system. The automated dispatching approach required virtually perfect information. analytical approach could not be as effective as an experi-enced operator in the small minority of difficult cases. A swarm of computerized exception messages plus an increased number of callbacks when ambulances did not arrive slowed the work even more. As the ambulance crews became more frustrated. and technical inconsistencies between the mobile data terminals and the central computer. . This approach worked well until November 4. The dispatching staff and ambulance crews had no confidence in the new information system and had not been fully trained. Physical changes in the dispatching room meant that the staff were working in unfamiliar positions without paper backup and were less able to collaborate on problems they had previously solved jointly.Cases in Marketing Management load had not been tested.

assess the different types of computer systems. The TM5400 and TM5600 are designed to solve the problems of poor battery life and sub-par performance in the ultra-light (weighing less than four pounds) mobile PCs. By October 2000. explain some of the technical choices for capturing data.Case No. Performing at 700 MHz. 2000. NEC. Sony. TM5400/5600-based laptops can last up to eight hours on battery power when running everyday office applications. The TM3200 is designed to provide a full day of Web browsing on a single battery charge for mobile Internet devices weighing one to two pounds. Major challenges in designing Transmeta's Crusoe chip centered on reducing the chip's power consumption while still supporting applications that ran on Intel's 86xx line of . 155 TRANSMETA CORPORATION: BUILDING A NEW CHIP FOR MOBILE COMPUTING Objectives After going through this case. you will be able to : • • • measure the performance of technology. Its November 2000 IPO was greeted favorably on Wall Street even though just a few days earlier IBM had announced a decision not to use Transmeta's Crusoe chip in the new IBM ThinkPad 2400. Transmeta Corporation was founded in 1995 to build a new type of computer chip directed at mobile applications that rely on battery power to run laptop computers and other portable devices. and three to four hours running heavy-duty multimedia applications like DVD movies. Sony said it will use the processor in its new Vaio PictureBook Cl VN notebook. and Transmeta claimed that Crusoe should nearly double the battery life of the new model. Transmeta's Crusoe product is actually a family of processors. and Fujitsu had all launched notebook computers based on its Crusoe chip. The company said nothing about its product until an unveiling on January 19. storing and retrieving data and displaying data.

Cases in Marketing Management processors (which include the Pentiums). replacing them with software. "The main issue is performance. In standby mode. With the right Code Morphing software. and enables light-weight notebooks to work for up to eight hours. The chip uses emulation or 'code morphing' and therefore does not give the same performance as you get with Intel the reason IBM moved away from the chip is that either there was not enough power or there was not enough performance. After IBM decided not to go ahead with the Crusoe for its new product. Crusoe runs it before doing anything else. According to Transmeta. "The IBM 480 notebook has a battery life of 4. translates) x86 instructions into the hardware engine's native instruction set. it is possible to improve the hardware over time without affecting legacy software. the Crusoe will not only translate x86 instructions. BeOS. This ROM chip holds the Code Morphing software and loads the Code Morphing software into memory." There was no guarantee that the Crusoe chip or Transmeta would succeed. the chip consumes around 20 milliwatts of power." Because the hardware is fully decoupled from the x86 instruction set architecture. Transmeta chips were being incorporated into portable products there was some controversy about the importance of the power saving afforded by the Crusoe chip. "The hardware component is a very simple. high-performance. or another operating system. compared with an Intel Pentium's 15 to 20 watts. Transmeta claimed that "the chip consumes around one watt of power when running. Transmeta applied a unique design that shifted the balance of work between hardware and software. Windows. As first. it is the surrounding software layer that gives programs the impression that they are running on x86 hardware. saying that the chip does give an increase in battery life but that the back light on a sub notebook computer also consumes a lot of power.5 hours and it was hoped that Crusoe would extend this to eight hours. The Crusoe chips require a bootable ROM chip on the computer's motherboard. He thought the battery life advantage in this market would be no more than 30% to 40%. This unique approach to executing x86 code eliminates millions of transistors. However." A Gartner Group consultant said. . a spokes-woman said. This innovative software layer is called the Code Morphing software because it dynamically 'morphs' (that is. The current implementation of the Crusoe processor uses roughly\one quarter of the logic transistors required for an all-hardware design of similar performance.5 hours in IBM's benchmarking tests. low-power VLIW (Very Long Instruction Word) engine with an instruction set that bears no resemblance to that of x86 processors. especially since Intel and other companies were developing chips for the same market. With this scheme it could also run Linux. This means it uses significantly less battery power. Crusoe only managed 5. Instead. but any other instruction set." A Toshiba product manager was not greatly impressed.

Gemstar purchased two com-panies that had developed previous e-book readers (NuvoMedia and Softbook) and then upgraded their products and brought out two new products for the. full-colour REB 1200 cost around $700. Many observers were surprised that these readers were so expensive. study how to retrieve data. however. or a bookstore. a portable electronic screen display about the size of a book. and waste. and newspapers are attractive in many ways. The black-and-white REB1100 cost around $300 and the larger. given a choice of reading articles in a paper magazine or reading exactly the same articles on a computer screen.Case No. It can be used to download electronic books through a personal Gemstar eBook account. study how to display data. magazines. holiday season of 2000. an online retailer. but able to store 4. you will be able to : • • • present some of the technical choices for storing data. the human factors of using paper media such as traditional books.000 pages of text. Although it is possible to access enormous amounts of information using computers. A student lugging six heavy textbooks in a backpack might have second thoughts. For example. especially with the limited amount of available content. but Gemstar's CEO said that an e-book would probably cost around $100 by 2001 and by 2003 might be given away as a free premium for making book purchases. inflexibility. and anyone looking at the amount of paper that is produced and discarded might wonder whether there is a way to enjoy the beneficial features of paper publications without the bulk. . 156 GEMSTAR INTERNATIONAL: WILLITS E-BOOK READER PROVIDE ENOUGH BENEFITS? O bjectives After going through this case. Gemstar's solution is an e-book reader. most people would view this as no contest and would choose the paper magazine.

This makes the surface appear white at that spot. Harper Collins. Within the ink are "millions of microcapsules. developed a type of electronic ink that can be printed onto nearly any surface. each one containing white particles suspended in a dark dye. .Cases in Marketing Management E-book readers are useless if there is no content. Gemstar signed up major publishers including Penguin Publishing. Xerox invented electronic paper in the form of a thin piece of transparent plastic that contains millions of small beads that act some what like toner particles in an office copier. but content was starting to become available. Images of pictures and text are created when a pattern of voltages is sent to the paper. E-Ink. or printing it. Time Warner Trade Publishing. Other companies were looking further into the future and wanted to combine the efficiency of electronic distribution with the human factors of paper books. but Random House felt it was justified since there would be no inventory and transportation costs.000 copies but there was the question of how many people actually read the book since it was protected by encryption technology that prevented people from mailing. a spin-off from MIT's Media Lab. and Robert Ludlum were released in e-book format prior to print release and were exclusive to Gemstar for 90 days. the beads rotate to display either their black sides or white sides. When an electric field is applied. the ink is printed onto a sheet of plastic film that is laminated to a layer of circuitry. a 66-page novella called Riding the Bullet that was priced at $2. but Xerox is working on adding additional color capacity. Earlier in the year the horror author Stephen King had published the most successful e-book thus far. but one of its long-term goals is to produce high-resolution displays so thin and flexible that they can be bound into an electronic book. This makes the surface appear dark at that spot. Another development that indicated e-books might be at a take-off phase was an announcement by Random House that it would pay authors a 50% royalty for books sold and delivered electronically." E-Ink's initial products are industrial displays. To form an electronic display. Random House. The initial version has only two colors. Simon & Schuster. the white particles move to one end of the microcapsule where they become visible. The image will remain until the voltage pattern changes.95. Ken Follett. This is much higher than a typical royalty. It had sold more than 500. Each half white and half-black bead is enclosed in an oil-filled cavity and is free to rotate within its cavity. The circuitry forms a pattern of pixels that can then be controlled by a standard display driver. Along with the launch of Gemstar's new e-book readers. An opposite electric field pulls the particles to the other end of the microcapsules where they are hidden by the dye. six titles by popular authors such as Patricia Cornwell. Electronic paper is electrically writeable and erasable and can be reused thousands of times. copying. When voltage is applied to the surface of the sheet. and others.

you will be able to : • • • study the impact of information systems on people at work. explain the negative and positive impacts of work systems. Integrating facial recognition software into the processing of driver's license applications should help combat identity fraud by making it extremely difficult for anyone to obtain multiple driver's licenses under assumed names. 157 VISIONICS : APPLYING FACIAL RECOGNITION SOFTWARE IN DRIVER REGISTRATION Objectives After going through this case. The speed of the Facelt search engine makes it possible to process thousands of images in less time than it would take a DMV agent to scroll through and verify an individual's address or the spelling of their name in a computerised driver license record. which is unique to the individual. the product utilises a mathematical technique called local feature analysis that "represents faces in terms of statistically derived features from specific regions of the face. This print is resistant to changes in lighting. These features are used as building blocks that make it possible to . similar to a fingerprint. the face print extracted from the digital photograph will be used to search the DMV database of millions of faces for potential duplication. eyeglasses. On April 15. 1998 Polaroid Corporation signed an agreement with Visionics Corporation to integrate Visionics' Facelt facial recognition software into Polaroid's secure identification products for the Departments of Motor Vehicles (DMVs). When a new license application is submitted.Case No. Facelt extracts a 'face print' from the photograph. justify the impact of ethical issue such as privacy on the users. Polaroid's press release stated that "computerised facial recognition works from a standard OMV photograph and does not require the collection of any additional information. making it convenient and noninvasive for the applicant. skin tone." According to the Facelt website. facial expression and hairstyle.

It might also be used to identify missing children. thereby reducing the chances that stolen cards can be used or even eliminating the need for the cards. A number of other current or potential applications of facial recognition are mentioned on the Facelt website. facial expression. Face recognition could be used in a similar way to control access to ATMs. A computer equipped with a video camera can lock a PC after a period of inactivity and start it again only after the user looks at the camera and is recognised by the software. a version of face recognition can search a live video of a crowd to find faces of individuals on a watch list. In a video surveillance application. and hair and is robust with respect to pose variations. eyeglasses. In time and attendance applications. This might be used in an airport to identify known terrorists or in a department store to identify previously convicted shoplifters within minutes of their arrival. skin tone. It is resistant to changes in lighting. The mathematical representation of the user's face can even be used as part of the key for encrypting information stored by the computer. The mathematical "faceprint" can be compressed to 84 bytes. One of these is access control for PCs. up to 35 degrees in all directions." Using this type of transformation for a new photo and for every picture in a photo database makes it possible quickly to display the closest matches in order of similarity. facial recognition can make it unnecessary for employees to punch in and punch out.Cases in Marketing Management quickly map an individual's identity to a complex mathematical formula. .

address. you will be able to : • • • • assess the negative and positive impacts of work systems study the impact of information systems on people at work. social security number. point out that the success of any system in business depends on its participants justify the impact of ethical issue such as privacy and access on the users.or part-time job in the United States by all but the smallest employers. Several states already had state directories that had been quite useful. child support collections had increased 17% in 1996 after the state required reporting of new hires even though its state directory did not cover people who had moved to different states. Social Security Administration (SSA). noting that most new hires have no child support obligations whatsoever. the directory would be available to state welfare and child support agencies.S.Case No. In Missouri. 158 CREATING A NATIONAL DIRECTORY Objectives After going through this case. Welfare officials predicted that matching the federal and state directories would produce billions of dollars in child support payments. One of its many provisions called for the creation of a National Directory of New Hires containing the name. and wages for each of the 60 million people hired into a full. Under the new law. Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 as part of an effort to change many aspects of the welfare system. when an 18-month federal . The U. for example. Some privacy advocates voiced alarm about the new database. and Justice Departments would also have access for the some purposes. Including information about them in this database would be a threat to their privacy because so many agencies would have access to this information and because data in this type of database has not been totally secure in the past. This type of risk had been publicised in 1992. The Internal Revenue Service (IRS).

of which $25 went for the bribe to the SSA worker. prospective employers. . In 1997 the IRS Commissioner asked Congress for legislation that would add criminal penalties to the law that prohibits IRS employees from snooping into taxpayer records. and neighbors. relatives. more than 420 IRS employees received some form of discipline for illegally browsing through the tax returns of friends. That employee had been convicted of using his computer terminal to look through the tax records of other white supremacists he suspected of being informers for the FBI. The going rate to obtain a ten-year earnings history within three to five days was apparently $175.Cases in Marketing Management investigation found a ring of "information brokers" who allegedly bribed SSA workers to steal personal information. lawyers. Buyers of the information apparently included private investigators. The conviction was overturned because the prosecution failed to prove that the former employee had done anything with the information he collected. and insurance companies. the IRS has increased its training on privacy issues and has installed automatic systems to monitor data access by its employees. This request followed shortly after a Federal appeals court reversed the 1995 conviction of an IRS employee who was also a Ku Klux Klan member. In 1994. Since that time.

" Additional content such as news and games is offered on a subscription basis in the range of $ 1 to $3 per month. you will be able to : • • explain different types of network that link communication devices and computers. it had over four million subscribers. exchange photographs. Since i-mode service is used through cell phones with tiny screens. because most of the data was text. DoCoMo's i-mode is the only network in the world that now allows subscribers continuous access to the Internet via mobile telephone. The fact that the connection is also online makes it unnecessary to log on and much easier to use instant messaging. NTT DoCoMo launched its i-mode service. I-mode was built using IP and a subset of HTML. In February 1999.Case No. "DoCoMo (meaning 'anywhere' in Japanese) is a NTT subsidiary and Japan's biggest mobile service provider.6 Kbps. . but that is gradually creeping into business environments as well. The 9. The initial version operated at only 9. however. the types of interaction and graphical displays expected by World Wide Web users are not possible. with over 31 million subscribers as of June 2000. and within another six months it went up to eight million and had overtaken other Japanese Internet service providers (ISPs) that provide service to the desktop. slower than the 56 Kbps modems that often seem very slow for downloading Internet graphics. survey major networking technologies. The service lets users send and receive e-mail.6 Kbps data rate was initially adequate. Within one year. 159 NTT DOCOMO PIONEERING THE WIRELESS INTERNET VIA CELL PHONE O bjectives After going through this case. obtain financial information. download personalised ringing melodies for their phones. and navigate among more than 7. a feature that teenagers love.000 specially formatted Web sites. NTT DoCoMo announced that it would come out with a 384 Kbps service in Spring 2001. do online shopping and banking.

People [in the U. The more requests for Web pages or e-mails that a user sends. Until we get colour graphics.5 fixed phone users). around $0. model or a time-metered European model. and the fact that PC use in general is not as widespread in Japan as in the United States. 70% of i-mode users subscribe to these services. the higher the total charge. think 'I've got to have. Additional charges are applied on a perpacket basis. the charges appear on the user's mobile phone bill and the provider pays DoCoMo a 9% gross commission. culturally specific content. . 1-Mode is so popular in Japan that the primary method of Internet access in Japan could soon be through mobile phones and other portable devices. For example. mobile access won't become something that people. In March 2000. the number of mobile phone users in Japan exceeded the amount of fixed phone line subscriptions (56.] think text is boring especially coming from the graphics-rich PC world. NTT DoCoMo has looked at ways to penetrate the U.9 million mobile phone users vs.Cases in Marketing Management I-mode's pricing model is totally different from the fixed-rate U. Another source of revenue for DoCoMo is billing services. According to one analyst. and a huge commuting population.S. Factors that encourage i-mode use include the limited amounts of space to put computers in a Japanese home. What flies in Japan won't necessarily fly in the States or Europe. I-mode users pay a $3 flat monthly fee for unlimited access to mobile data services. when Bandai charges for its cartoon character downloads. on an emotional level. market. DoCoMo announced that Internet access would be an option on every phone it sells. generating an additional $ 1 per customer per month in billing and collection commissions for DoCoMo. Some observers are skeptical about whether i-mode would succeed elsewhere. the high price of dial-up Internet access.S. such as a huge audience interested in using the Internet. successful mobile applications are highly specific to cultures and national demographics. with unique characteristics that may not exist elsewhere. 55. I-mode charges are based on the number of packets of data sent per month (as of April 2000. They note that Japan may be a unique market. Although pay-per-use content accounts for only 20% of all i-mode content.S.003 per packet).

An example of the types of service demands that Exodus encounters occurred when the Webmasters of RollingStone. had difficulty trying to solve a slow response time problem just a day before the publication of a multimedia cover story on Britney Spears. Its customers include eBay. Exodus bought two computer security companies and had moved into a number of new services. By 2000.com.Case No. its engineers helped in solving the problem. it had grown from no consultants to 660 as managed services increased from 8% to 34% of its business. joined the company before its IPO in 1998. Merrill Lynch. which involved incorrect configuration data that caused the server to use 10 to 15 seconds to refresh domain name data every few minutes instead of daily. The company offers sophisticated system and network management. its CEO. the Web site of Rolling Stone magazine. 80% of its customer base was Internet start-ups and 20% were in the enterprise category. along with professional services to support performance for customers Websites. Europe. This would obviously cause a spike in demand that would exacerbate the response time problem. Founded in 1994. . Since Exodus was hosting and maintaining the site. and Johnson & Johnson. 49% of the customer base was in the enterprise category. British Airways. In the same time frame. During this transition. Yahoo!. When Ellen Hancock. Exodus Communications helped create the complex Web hosting business and has attained a market value of over $10 billion. Exodus has 22 data centers around the world and is building another 14. 160 POLAROID CORPORATION Objectives After going through this case. you will be able to : • • identity the importance of standards explain the policy issues that affects the future of telecommunications. and Asia Pacific. Exodus manages its network infrastructure via a worldwide network of Internet Data Centers (IDCs) located in North America.

In late 2000. it's very hard to say what you're not doing. Both Exodus and its rival Digex seem to be evolving into "managed service providers. storage management. According to one industry analyst. asset management. billing. but we've spent a lot of time trying to do that. site/server layouts. but they're unwilling to raise the level of responsibility to something that is application specific or customer-specific. We have no notion of competing with Oracle on e-commerce. "These guys are happy to host.300 companies) are application service providers (ASPs) that run application software for other firms using remote servers linked to a WAN so that those firms no longer have to install and maintain the software. In addition. and this fits well with an ASP charging scheme. We say we're not going to know applications.Cases in Marketing Management Approximately 400 of its customers (12% of its customer base of 3. Digex unveiled a customer self-service portal called myDigex. it gives access to service-level agreements and Digex support staff. We do not intend to ever understand HR [human resources] applications. and help desk issues. Exodus charges for service based on usage. We just support the ASP. and performance monitoring. and they're willing to manage your servers. In contrast. We're not in that business. such as performance statistics. Its ASP customers range from start-ups to established software firms such as PeopleSoft and Oracle's BusinessOnline. the new but not yet named services Exodus announced included remote monitoring." .com that gives them the ability to manage and provision their own services. According to Ellen Hancock." but using different paths.

not upside-down.Case No. You can usually see people's noses. 161 CYCORP: BUILDING A KNOWLEDGE BASE TO SUPPORT COMMONSENSE REASONING Objectives After going through this case. If you cut a lump of peanut butter in half. A glass filled with milk will be right-side-up. Developing techniques for capturing commonsense knowledge and building it into computerised systems is one of the greatest challenges of computer science. state the difficulty in trying to program intelligence into machines. each half is also a lump of peanut butter. • . you will be able to : • • • • identify different types of software study the processes of programming. but if you cut a table in half. but not their hearts. Capturing and codifying common sense is difficult because the rules of thumb used in everyday life to understand language and to interpret the world are almost never published explicitly in books or dictionaries. Here are some examples : • • • • • You have to be awake to eat. You cannot remember events that have not happened yet. trace the evolution of programming languages. Once people die they stay dead. neither half is a table.

substances. creating application-specific thesauruses. Special-purpose inference modules were developed for a few specific classes of inference. a set of interface tools. and so on. This will provide a 'deep' layer of understanding that can be used by other programs to make them more flexible." Applications of CYC that are available or in development are in areas such as natural language processing. events. contradiction.000 hand-entered assertions (or 'rules') designed to capture a large portion of what we normally consider consensus knowledge about the world. time. Windows NT. Various microtheories are focused on a particular domain of knowledge. CYC will help break the software brittleness bottleneck once and for all by constructing a foundation of basic common sense knowledge. space. a particular level of detail. The knowledge base is a formalised representation of common sense knowledge including facts. The CYC inference engine performs logical deductions using a variety of logical techniques. The knowledge base is built upon a core of over 1. extracting information from databases. and methods for reasoning about the objects and events of everyday life. and other aspects of human existence. One such module handles reasoning . In 2000. and retrieving information from the Web. The assertions are related to causality. but may yield contradictory inferences. a representation language. with the goal of codifying this type of knowledge. and this seems to contradict the assertion that you can usually see people's noses. a particular interval in time. The knowledge base currently contains hundreds of thousands of assertions and is divided into hundreds of "microtheories. rules of thumb. a 1995 spin-off of MCC. Use of microtheories makes it possible to reconcile and resolve assertions from separate contexts that are both applicable to a situation. For example. and other platforms. Inc. such as using microtheories to optimize the inference process by restricting the search domains. an efficient inference engine. multi-contextual knowledge base. The Cycorp webpage describes the CYC product family as "an immense. belief. CYC technology includes a knowledge base. Cycorp. Inc. Cycorp. interface tools. emotions. an inference engine. was founded to continue the development of CYC technology. and a number of special-purpose application modules running on Unix. and modules designed for specific applications. had approximately 70 employees and a number of corporate sponsors who hoped to apply CYC technology in a variety of ways. searching for examples in captioned databases (such as news photos or film clips)..000." each of which is a set of assertions sharing a common set of assumptions. in the context of total darkness you cannot see anything. If successful. New assertions are added continually. It consists of a vocabulary of terms and a "sea of assertions" about those terms. The vast size of the knowledge base requires that special inference techniques be developed. planning. intention. Texas.Cases in Marketing Management The CYC project began in 1984 at the Microelectronics and Computer Technology Corporation (MCC) in Austin.

CYC at one point concluded that everyone born before 1900 was famous. There are similar sorts of errors. But what we're seeing is not so much something that sits quietly on its own and makes discoveries but rather something that uses the knowledge it has to accelerate its own education. For example." . whether CYC would be able to learn things on its own. temporal reasoning. Some of the things it learns reflects the incompleteness of its knowledge and are just funny. and mathematical reasoning. CYC's original developer. In 1999 an interviewer asked Doug Lenat. He responded: "We're already able to see isolated cases where CYC is learning things on its own. Others handle equality reasoning. because all the people that it knew about and who lived in earlier times were famous people.Case 161 Cycorp: Building a Knowledge Base to Support Commonsense Reasoning concerning set membership or disjointness.

illicit refilling. resealing and reselling of the used mineral water bottles.NOVA Objectives After going through this case. hotel-chains. • 'Aqua-Nova'. you will be able to : • • • find a new brand of mineral water. The 'Aqua-Nova' is now being promoted in common households. a new brand of mineral water is selling very well in the institutional markets. analyse sudden media outcry about unauthorised. well-established in institutional markets. e. the marketing manager is disturbed about news that has flashed in leading local and national newspapers.Case No. recognise plans to tap household's market. However. illicit refilling and resealing of used bottles. It describes how the water from practically any source is used for this purpose and then sold as genuine pure mineral water. 162 AQUA . . industrial and commercial establishments. Initial response in this segment seems to be encouraging. underline Marketing Manager's problems. The news is about the unauthorised.g.

underline the way-out with firm's registration in Gujarat. the Chief Executive of the firm Mr. you will be able to : • • • • find a drug formulation firm planning expansion in Gujarat recognise negative market-survey response. though the products are all of a general nature e. it also launched some tablet formulations. Anil Kumar sent one of his representatives to explore the possibility of selling his products in Gujarat. he offered. They are selling both on doctor's prescription and otherwise. Mahesh Pharmaceuticals is a small scale sole proprietorship concern based in Chandigarh.g. the firm's products enjoy a good reputation in Chandigarh. A credit facility of 30 days. the firm introduced liquid formulations. It is engaged in the production and marketing of drug formulations. cough syrup. But later on as the market for its products started growing. 163 MAHESH PHARMACEUTICALS Objectives After going through this case. paediatric suspension etc. and can also be treated as OTC drugs. a) b) Commission of 40-45% (negotiable) on the written price. For this. Haryana and Punjab. it offers a good range of more than ten different medicines. The representative visited a few stockists and wholesalers of drugs in Ahmedabad and Baroda with an intention to appoint a propaganda stockist who will not only keep the stocks and distribute them but will also try to get the drugs prescribed by the doctors in the region. At the time of its inception. As a part of strategy to expand the market.Case No. At present. analyse causes of resistance to Punjab based firm in Gujarat markets. . At present.

Many of these restrict their markets to nearby areas and hence particularly in Gujarat. they devised one scheme. the stockists refuse to work without any further thought. The crux of the problem is something else. Also it is well known that Ahmedabad has an established reputation for fine chemicals and drug manufacture. they cannot penetrate the market in far off states. The moment I talk of a firm from Chandigarh. the competition is very tough. here would buy a medicine made by a small concern in Punjab. Mr. Anil Kumar and his colleagues come to the conclusion that under the existing circumstances. He described the situation like this "There are many small manufacturers of medicines in and around Ahmedabad. All the stockists I talked to have described the commission offered by Mahesh Pharmaceuticals very low. Some of them even described the prices set by Mahesh Pharmaceuticals as higher as compared to local manufacturers. Punjab that they do not have faith in the medicines made there and they can afford to do so because. Therefore. They say that nobody. the representative failed to find any stockist who could be interested in selling his products. none of the products of Mahesh is a specialty item. This address of the firm's registered office will be printed on the labels of the medicines. Mahesh Pharmaceuticals would open one small office in Ahmedabad and get registered there. . All these things are still manageable. People of Gujarat are so scared of the name. in the market the firm will be recognized as one from Ahmedabad. As per this. Thus.Cases in Marketing Management Inspite of all his efforts. while for all practicals it will operate from Chandigarh only. after all. After a careful investigation of the situation.

His business place has even come to be associated with a meeting venue for people of his generation. 164 MR. analyse his strengths leading to business expansion. he hawked his good door-to-door and soon developed a sizeable number of steady customers. He feels that he needs to be 'professional' in his approach. now. he feels emotionally attached to his original grocery business and continues to operate it with enthusiasm. Initially. • • • Mr. He expanded the range of his business activities and he. His extrovert nature helped him develop many friends and well wishers. Rajesh. Being of a conservative frame of mind. Mr. This was largely due to his sober temperament. grown up. Over a period of time. reliable dealings and his amiable nature. Panjwani became a socially prominent person with good acquaintances in many walks of life.Case No. recognise new perceptions of business : with son stepping into his shoes. has just returned from abroad after completing his management education there. In . dairy products and also has general stores besides a large medical shop. you will be able to : • find a hawker-turned-businessman: with excellent customer relationship marketing skills. Harish Panjwani was a refugee when he started his small grocery business about 40 years back. owns several shops dealing in consumer durables. and the eldest one. His children are. now. HARISH PANJWANI Objectives After going through this case. Rajesh would like to expand his business fast. Ambitious by nature. irritating customers. underline value-based relationship marketing skills being replaced by business-like formal approach.

they feel that the old "warmth" of their relationship with one senior Panjwani is somehow. He expects that his customers should appreciate this "modern" way of doing business. anyhow. Rajesh feels that this type of casual come together is a waste of time. started to notice the change in Rajesh dealing with them. He has. . He would prefer to be more "business-like". Some of the customers have. and he found that his father believes in maintaining close personal links with his customers. serving them with precision and in a methodical manner. missing and that they are now less welcome at the shops. his father's ways of dealing with people are outdated. He would like to deal with them as customers only. Many a time he feels irritated when his father's old friends drop in at the shops and spend some time talking. however broached his inner feeling only in an indirect way to his father.Cases in Marketing Management his opinion.

• • The Indo-Foreign Bank has two senior marketing personnel. Narendra Rana believes that a bank is basically a 'retail outlet'. Mr. Tarannum Topee. He says. with widely different views as to the future. 'You go to a cloth shop to buy cloth. 165 THE INDO-FOREIGN BANK Objectives After going through this case. 'is the relationship we build up with the customers. you will be able to : • • find two executives with differing perceptions about banking business.Case No. identify one branding bank as a "retail outlet" : another banking on" relationship marketing" concept underline significance of customer-relationship in banking business. his colleague Ms.' On the other hand. she says. You go to bank to buy financial services. The essence of successful marketing. believes that this approach is futile and pointless. analyse both views. in depth. .

He was almost tied up with work 6 days a week and had to work on Sundays too. He could find time only on some Sundays for his family. Dilip moved around in the showroom for about half an hour without any executive attending him. select Appropriate tools to have a completely satisfied customer. Mr. Dilip after spending so much time in the showroom unattended was annoyed when the executive said "MAY I HELP YOU". Dilip responded saying that the company had to realise the significance of the "CUSTOMER". Dilip wanted to step out of the showroom and at that point one executive noticed Mr. But that did not happen. it failed in establishing a proper relationship with the customers and thereby kept on loosing the market share over the period. Though SONY has established itself in the market. Then Mr. you will be able to : • • identify your prospective customer and approach him accordingly. 166 A CUSTOMER UNATTENDED IS A CUSTOMER LOST Objectives After going through this case. and give some information about the product that he wanted to buy. Since long he had been planning to a new DVD player for his family but was confused as to choose which brand from the variety of brands available in the market. Dilip was a person with a very lousy life schedule. A customer unattended is a customer lost and Mr. Mr. After visiting the showroom he expected the showroom executive to attend to him.Case No. . Dilip and approached him for help. Dilip walked out to buy a DVD player from the next showroom. He tried collecting ample information regarding different DVD players and finally decided to buy a SONY DVD player and walked into the showroom of SONY on a Sunday with his family. Mr. Mr.

The Manager at first was not interested in attending her and thought that she was lying.Case No. On this Meena felt very embarrassed and decided never to visit the restaurant in future. So on weekends she would plan for some outing with friends. Meena. Meena with her friends entered a restaurant. a very young working professional with a very hectic schedule found it really difficult to manage career and home simultaneously. identify ways to handle all types of customers. After shopping. After placing the order they once aging confirmed it with the waiter and were told that their order would be places in the next 15 minutes and was placed accordingly. they realised that they had been charged for the larger/full plate serves for both. But to their surprise. Meena approached the manager/cashier for clarification. Meena noticed that the quantity of Pasta in both the plates seemed the same. They again confirmed it with the waiter. you will be able to : • • explain how and why it is important to treat customer like God. When Meena insisted that she had not ordered for a full plate and she would not pay for what she had not ordered the Manager in an aggressive manner asked if Meena could afford paying the bill and insulted her in front of the other customers. . Different people had ordered for different food items while Meena and one of her friends ordered for pasta. They had several delicacies to choose from. But her word of mouth would definitely spread and would result in loss of good customers from coming to the restaurant in the long run. 167 THE UNPALATABLE DINNER Objectives After going through this case. Meena had ordered for half plate of pasta while her friend Mrs Gauri had ordered for a full plate. On one Saturday Meena had been out with her friends for shopping and planned to have dinner at a very famous restaurant which specialised in Pasta foods.

Mr. Jacob also realised that there was a slight difference in the prices of local market and that of the International market.Case No. you will be able to : • • formulate the service rules required for an efficient transaction of sevices. On enquiry. On coming Thursday also the delivery was not made. He therefore thought he would be in a position to devote his full time only if he takes up Vs. He was in the process of renovating the office which he set up for his Consultancy. Mr. had recently taken voluntary retirement from his service as he wanted to concentrate on his own Consultancy. explain the importance of developing the skills within an individual dealing in the service sector so as to serve the customer better. Jacob decided to order the colours and paints from the same. neither was there any sort of apology from the company's end. Mr. He believed that the exact combination of the colours that he wanted though available in the local market. Jacob a top-level Manager. He started with other arrangements till then and was eagerly waiting for Thursday. He placed the order on a Monday and was told that he would get the delivery by Thursday. Mr Jacob was informed that the delivery would reach him by the following Thursday. Mr Jacob was told that his order was not processed since the Marketing Manager was out of town. 168 DOMESTIC MARKET OVER INTERNATIONAL MARKET Objectives After going through this case. Mr Jacob finally placed an order in the International market for the colours and paints. On Thurday Mr Jacob found that the delivery was not done. This was because there was no . This was not informed to Mr Jacob. He started with the painting of the office and wanted to give a different look to it. he would get a better product when the colours and paints were imported.

To add on there was no kind of apology from the Marketing Manager nor the company. .while he could have got the similar colours and paints from the domestic market immediately after placing the order.Cases in Marketing Management other order along with Mr Jacob's order and the company could not afford the shipping charges for a single order. Mr Jacob was told that the Marketing Manager would personally look into this matter and was promised that delivery would now reach him in a weeks time for sure. Mr Jacob had paid an advance of 50% while placing the order and had to wait for a period of 15 days.Hence. the delay in delivery. This time also Mr Jacob was not informed about this and there was no apology end from the company's end.

Horekens. Michigan. which headquartered in Battlecreek. The developing economy enabled consumers to . was founded in 1906 by W. The population mix was becoming younger. Kellog. Dollars.THE KELLOG COMPANY In 1980. In 1980.0 billion. they also had no market. Kellog International operations accounted for 38 percent of Kellog Company's sales of more than $ 2. Peter A.S. The Latin American Market The Latin American Market. The Kellog Company manufactured and marketed a wide variety of convenience foods with ready-to-eat cereals topping the list. Latin Americans did not eat breakfast as the Americans did. was faced with the problem of developing a market for ready-to-eat cereals in the Latin American region. showed great potential as a Kellog's ready-to-eat cereal market. Although Kellog had no competition in the ready-to-eat cereal market in this region.K. The company's products were manufactured in 18 countries and distributed in 130 countries. The problem was especially prominent in Brazil.150. The demographics fit the ready-to-eat market. Horekens had to create a nutritious breakfast habit. Kellog Company.9 million U. The United Kingdom was by far Kellog's largest market. the only problem was that Latin Americans did not eat the traditional American-style breakfast. mainly Mexico and Brazil. consumption of ready-to-eat cereals was negligible. Internationally. although in the past few years the competition also had increased. But in Latin America. The company continued to operate successfully with sales in 1980 amounting to 2.SOLVED CASES CASE I . The Latin American market included a growing number of families with children. To create a market and increase sales in this region. sales in the ready-to-eat cereal market continued to increase. The ready-to-eat cereals sales made up the majority of international sales. marketing director for Kellog company.

Walter Thompson. the advertisement portrayed a boy eating the cereal out of a package. These figures showed that the population of Brazil better fit the market for a ready-to-eat cereal. How was Kellog to create a nutritious breakfast habit among the Brazilians? The company asked J. Novellas are Brazilian soap operas. The company believed that the growing population in this region would reinforce the importance of grains as a basic food source. This culture ideal was reflected in the ways they conceptualised and evaluated the range of personal and social relations. Brazilians do what people in novellas do". Twelve percent population over age 50. especially Brazil. The commercial did not work. Forty-eight percent of population under age 20.Cases in Marketing Management spend more of their income on food. Within this population growth was an increase in the number of women of childbearing age. J. "In general. The "cult of the family" continued to be the most important institution in the formation of the Brazilian society. with the increasing number of children and elderly people as the two largest cereal consuming segments. not just Kelloy's cereal. well-balanced nutritious breakfast. which made it the sixth most populated country in the world and the population was expected to grow to 165 million in the next few years. but consumers had turned their backs on the American style breakfast. Kellog wanted to increase sales in this Latin American region. Kellog wanted to portray ready-to-eat cereal as a part of a complete. which further supported Kellog's potential for a successful cereal market. Kellog's advertising agency. According to Horekens. Six percent of population over age 60. nutritious breakfast. This seemed to be the way Kellog . The first experience of advertising within a soap opera failed. to help instill the breakfast habit in Brazil. Thus. The 1980 population in Brazil was 119 million. because it made Kellog ready-to-eat cereal seem more like a snack than a major part of a complete breakfast. The structure of the population in Brazil in 1980 was: • • • • Thirty seven percent of population under age 15. they needed the cereal to be eaten in a bowl with milk alongwith other foods to make a complete breakfast. Walters Thompsons tried to advertise Kellog ready-to-eat cereal and instill the breakfast habit by advertising within a soap opera. Kellog wanted to teach the Brazilians how to eat a complete.

took the cereal box. Kellog opted for scenes that showed the family at the breakfast table. Most Brazilian families watched these soap operas.to continue or quit . The only problem was that Latin American did not eat the traditional American -style breakfast. Although Kellog controlled the market. Kellog controlled 99. Through the use of the novellas. Kellog made a second attempt to teach the Brazilians the importance of breakfast. Brazilians had begun to eat breakfast. there was not much of a market to control. This scene represented a complete "Kellog" breakfast in a way that Brazilians could relate to. was faced with the problem of developing a market for ready-to-eat cereals in Latin American region. and then added milk. composed mostly of family scenes. even after advertising. but Horekens was not sure whether sales would continue to increase. • • . Marketing Director of Kellog Company. especially Mexico and Brazil. What would be your advice .case subject .to the board of Directors of Kellog? Explain with reasons the factors which you would consider essential in framing your report? SOLUTION Summary of the case • Peter A Horekens . usually the father.5 percent of the ready-to-eat cereal market in Brazil.was Brazil which showed a great potential. poured the cereal.by playing up the family and its importance. Analyse the case to enable you to prepare a report about the given situation. sales in Brazil increased. His immediate problem . As a result of this campaign. per capita cereal consumption was less than one ounce or several spoonfuls per Brazilian annually. and finally on ease of preparation. One member of the family. The advertisement focused first on nutrition. however. His problem was .would have to demonstrate the importance of a nutritional breakfast . then on flavor. 2. In their commercials.how could Kellog further convince the Brazilians of the importance of eating a nutritional breakfast in order to establish a long-term market? QUESTIONS 1.

then on flavor. with the increasing number of children and elderly people as the two largest cereal consuming segments. with the population mix was becoming younger. According to Horekens. The "cult of the family" continued to be the most important institution in the formation of the Brazilian society. the structure of population was: 37 percent of population under age 15. and finally on the ease of preparation. As a result of this campaign. the advertisement portrayed a boy eating the cereal out of a package. Horekens was not sure whether sales would continue to increase. These figures showed that the population of Brazil better fit the market for a readyto-eat cereal. Through the use of novellas. Kellog made a second attempt to teach the Brazilians the importance of breakfast. His problem was . 06 percent population over age 60." The first experience by Kellog of advertising within a soap opera failed. nutritious breakfast.by playing up the family and its importance.how could Kellog further convince the Brazilians of the importance of eating a nutritional breakfast in order to establish a long-term market? • • • • • • • • • • • • • • • . not just Kellog's cereal. The advertisement showed the family at the breakfast table. 48 percent of population under age 20. The advertised focused first on nutrition. even after advertising. "In general. 12 percent population over age 50.Cases in Marketing Management • In Brazil. Horekens thought that Kellog would have to demonstrate the importance of a nutritional breakfast . per capita cereal consumption was less than one ounce or several spoonfuls per Brazilian annually. sales in Brazil increased. Brazilians do what people in novellas do. however. Kellog wanted to teach the Brazilians how to eat a complete.

in fact mothers . Kellog should install the appropriate incentive schemes to motivate the channel managers. Kellog can then build their promotional plan on this characteristic. Kellog could also introduce children shows and an award titled ''Kellog Child'' should be instituted. . say every month. This will be a very slow process and could take years together. should involve doctors in the campaign. 9. shall be a very vast market for the cereals. 4. they should highlight the nutritional aspect of the cereal. A distinct feature of Kellog cereals is their nutrition value which. Kellog should also establish distribution channels where local people would get directly involved in the marketing of the product. Activities suggested at serial nos. Kellog in order to promote this cereal. This should be done through a further dialogue either through the meetings or by conducting opinion surveys. though have a gimmickry element are essential to maintain the continuity of the image building process of the company as well as the product. Through the advertisement. Another channel for promoting the cereal shall be a direct talk with the house ladies. 3. 7 and 8. 7. 10. Horekens approach to market the cereals by changing the breakfast habits of Brazilians is a formidable task and seems to be impractical as well. Kellog could also start a slogan campaign for example. His focus should be to sell the cereal and not to stress upon the changes in Brazilian's breakfast habit. 8. Kellog should try to sell the cereal to hospitals.Solved Cases ADVICE TO KELLOG : 1. 2. who once roped in. "Why I like Kellog cereals?" with suitable awards. Kellog should arrange meetings with the house ladies and explain to these housewives . 6.the nutritional value of the cereal and distribute free samples. 5. It will be in the interest of channel managers to promote this product. 5. Another potential for promotion shall be to arrange once-a-week free distribution of cereals in schools where children should be served free. as identified in the case is very suitable for old and growing children. 6.

It has a relatively efficient telephone and telegraph system and good air service to all the major Asian destinations in which you are interested and to the United States. leases one large building. so the main language is English. the luau government is delighted to have your company locate and invest there. Luau's advantages are several. which will be its permanent headquarters. its growth would be a logical conclusion. is a Micronesian race. It has made very attractive tax concessions to the company and to its personnel who will move there.AN AMERICAN WORLD WIDE CORPORATION An American world wide corporation. The native population of luau. You were appointed to organise and direct this major new effort. Instead. All these activities must be planned in a manner. Once the product starts gaining acceptability. 13. as you begin to work much more with the private banking and business people of luau and less with government officials. It is about equidistant between New Zealand and Japan. is a conceptual fallacy. The company moves in. so that Kellog brand name is continuously hammering on the minds of the people without a gap. first to change the habit of the people and then promote the product. In conclusion. 12. you begin to be more aware of a luau characteristic about which you had not thought much previously. from Japan in the north through New Zealand in the south. CASE II . Kellog should keep the public informed of their promotional efforts listed above. and one question was where to locate the regional headquarters for the Asian Division. has decided to expand aggressively in Asia. It was a British Colony. After considerable study. and puts out an invitation to bid on the construction of a larger building. let the product creep into the minds of the people and when the direct user starts seeing its utility. which is the great majority. . Now. Promotion through medical profession would also gain its acceptability by the old people. I feel that the Harkenes approach. Almost all of the middle and upper management personnel in the business and finance sector are of Chinese extraction.Cases in Marketing Management 11. It Plans to source much of its raw material and subcontracting there and manufacture and market throughout Asia. it will then one day reach at the breakfast table in Brazilian homes. And not the least important. All this will be followed by the advertisement campaign through various media where besides the characteristics of the product. you selected the island nation of luau.

They are quite satisfactory. selected the island of luau. Analyse the case. 2. Luau's main language is English and has good infrastructure facilities. you are told that this is the way it developed historically. Occasionally. some of the Micronesians study abroad. but they have noticed nothing unusual. You ask your Chinese staff about it. The Chinese enjoy and are good at banking and business. The two groups buy and sell from and to each other. Is there anything gone wrong? Who could be responsible for it? What might you do to improve government and public relations? SOLUTION_____________________________________________________________ Summary of the Case: • An American world wide corporation. government. While the native Luauans do not like those activities and have stayed with their traditional pastimes. Luau's Govt. has made attractive tax concessions to the company and its expatriate employees. • • • . has decided to expand aggressively in Asia and after considerable study. you notice a gradual change of attitude towards you and the company among the government officials and among the people in general. QUESTION NO. and less cooperative. but there are almost no social relations and very little business or professional overlap between the groups. 3. they frequently go to work in a bank or business or take a government position. Then. when they return.Solved Cases On enquiry why the Chinese are dominant in banking and business while the Micronesians stay with farming. is delighted with the decision of the company and. They have become less friendly. more evasive. and some work abroad for periods. and you select the best available. and manual labour. and the operation gets off to a good start. The company moves in into a leased building and also decides to make its own building which will be its permanent headquarter. fishing. You find that the only applicants for the jobs are Chinese. 1 : 1. You must staff your headquarters with middle and lower-management people and with clerical help. in turn. as the months pass.

The company was carried away by the luau's government's generosity. and manual labour. 4. 2 : Whatever has gone wrong. as the company executives understood. QUESTION NO. Case itself states that there were almost no social relations and very little business or professional overlap between the groups. • • • • QUESTION NO. When company executives asked the Chinese staff about it. As the island of luau was well connected by airlines and had a good communication system. The company in it's zeal to start the business. The two groups buy and sell from and to each other. As the months pass. didn't study the cultural aspect of the society. fishing. Selection of Luau island was based on a very narrow perspective. The native population of luau. Almost all of the middle and upper management personnel in the business and finance sector are of Chinese extraction. This can be summarised as under : 1. was developed historically. While recruiting the staff. This additional workforce . government. 3. it is due to the mistake of the company. but there are almost no social relations and very little business or professional overlap between the groups. shall require additional workforce. they said that they didn' t notice anything unusual. From this it appears the that lack of interaction between the two groups was very apparent. The company is constructing an office building with the expectation of the business growth which. consisting of local population which is a Micronesian race and Chinese. This pattern. and you select out of them. 2. It was not an undercurrent. in turn. 3 :_________________________________________________ My suggestions are as under : 1. it provided enough facility to study the social set up of the island. company notices a gradual change of attitude of government officials and among the people in general. is engaged in farming. the company found that the only applicants for the jobs are Chinese.Cases in Marketing Management • • Luau's population is a mixture.

In actuality. . I therefore suggest that the company should recruit native people now itself and train them. Though it might not be possible for the company to spend a huge amount immediately but in order to build up the confidence and calm down the hurt feelings of the natives which is Micronesian race. This would appear an additional expenditure but this. PROMOTION SOLVED CASE NO. Increment in Sales Promotion Expenditure : A heavy rate of discount has been given to retailers. P. This can be curtailed to some extent and the same expenses could be diverted into various other field of sales promotion.should be recruited from the Micronesian race. shall be an investment which will pay off in the form of goodwill from the natives as well as government machinery. The company as a part of social obligation. identification of problems and the suggested solutions. 2. a modest beginning is a must. The company can also mend the fences by developing relations with the influential people in the Micronesian race and explain to them their faux-pas which was not deliberate. every student shall have his own analysis. Any solution substantiated logically with the assistance of the facts given in the case shall fulfill the objective for evaluation purpose. should streamline the native population's educational system and also involve themselves in updating the technology of the trades being followed by the natives. Educated and matured persons in all likelihood would understand and even suggest some measures and help the company in repairing the damage. 1) BENSON AND JONSON Promotion Strategy has been divided into two parts. But the implementation of this corrective action shall take time and in the meanwhile would aggravate the feelings of the native population.S. Both the cases have been analysed for reference purposes. in fact. They are: a) b) Sales Promotion Trade Promotion Sales Promotion Strategy : It will be performed with the view of attracting final consumers towards the product. 3.

Cross Promotions : It means using one brand to advertise another non-competing brand. This helps to attract the customers.Cases in Marketing Management Issuing Free Samples : Along with magazines and newspapers. caps. . Knowing our customers and our distribution budget or expenditure. They should take a whole channel view of the problem of distributing products to final users. Speciality Advertising : Supplying dealers and selected segments of people with T-shirts. pen. a small pouch or sachet could be attached as Taj Mahal Tea did a couple of months ago. once the product leaves the factory. free sachets of jam of a nominal value on a purchase of a pack of bread of a particular brand and weight. We will be targeting departmental as well as supermarket stores. For example. An umbrella counter outside the grocery shops can be kept. displaying Benson and Johnsons product. People were puzzled to find the product in the newspaper. We should go for more sales force in order to cover the entire district as well as to monitor the wholesalers and the retailers properly. TRADE PROMOTION Trade shows and conventions : Booths can be set up in order to display and demonstrate the product. Printing Discount Coupons : Discount coupons will be printed on newspapers and magazines leading to a reasonable discount in prices along with the submission of coupons. etc. we will go for a few more retailers including the previous existing retailers. Organising sales contests : Including sales force or dealers to increase their sales result over a stated period with prizes going to those who succeed. highlighting the brand. PLACE MIX Many companies think that their job is over. specially those from non-user groups who then onwards may turn into permanent customers.

Average Firms Copy their . accordingly planned its competitive scheme in order to counter attack B & J Co. • • • • • • • This Blue Shield Co. magazines. So they also declared a bonus scheme to retailers and consumers. So it means that if you have created a steady share of mind and share of heart. came to know about their scheme.In this is way. which the company denied. the Blue Shield Co. market survey and 4 P's of marketing mix.e. we will be able to win the retailer's faith and also liquidate our stocks after taking back from the retailers. So the retailers asked the representative of Benson and Jonson to take back the stocks and refund the amount back. They offer a very attractive bonus scheme to the wholesalers to maximise the sales. knew very well that the need to increase its market share and that this can be done only by creating a share of mind and a share of the heart. By share of mind it means the company is familiar to consumer minds and by share of heart it means that people will buy the company product whenever they are purchasing. there is no doubt that your market share is increased. As Benson and Jonson's scheme was not attractive to the customers. There is a saying that "Poor Firms Ignore their Competitors. FACTS OF CASE • The Benson and Jonson Company. They advertise their scheme in newspapers. we will be going at our distribution network and making the appropriate changes whenever necessary. the radio and the TV. It was not possible for the company to cover the entire district because of a limited sales force. Thus this reduces the consumption of other equally good moving products. After adopting the above steps i. observed that the maximum consumption of these products is during September to December. After studying all this. The company promises to come up with alternative solutions to liquidate the stock but the retailers persisted that they take back the stocks. Blue Shield Company as a competitor of Benson and Jonson. their goods were laying in the retailers' warehouses. The company made it very clear that goods once sold would not be taken back. manufacturing jams and sauces.

So it has to heavily rely upon retailers and wholesalers to push it's products whereas in the Blue Shield Company. 5) Nil 6) Zero Consumer feedback BLUE SHIELD COMPANY 1) Consumer and retailer oriented. 4) Less investment and more profits comparatively. became more successful? I think the best way of answering this question is to have a comparison between these two companies. 2. it didn't pay any attention towards its consumers. 5) Increasing rapidly. 2) Aggressive and large sales force. Why did the scheme of the Blue Shield Co. This is how the scheme of Blue Shield Company was more successful. B & J Co. didn't have enough sales force to cover entire district. 1) Retailer oriented 2) Limited 3) No discount to consumers 4) From retailer point of view i. the profits is comparatively lesser. BLUE SHIELD CO. BENSON & JONSON VS. As far as the sales force is concerned. it has an aggressive sales force is are capable of promoting its products effectively. The Benson and Jonson Company was basically retailer oriented. Whereas Winning Firms Lead their Competitors". So Blue Shield Co.e. because of huge Investment. 5) Sales Growth 6) Feedback 1. 3 ) Discount on every bottle purchased for consumers.Cases in Marketing Management Competitors. whereas the Blue Shield Company paid emphasis to both the retailer as well as consumer and that's how it was able to satisfy both the sections of society. BLUE SHIELD COMPANY BASIS 1) Orientation 2) Sales force 3) Discount 4) Investments BENSON & JONSON CO.managed to fit in the third category by leading its competitor B & J Co. . 6) Proper consumer feedback.

So there was literally zero feedback of the customers. So according to them. had a discount of Rs.e. did ignore consumers.50 on every purchase of bottle for their customers as well as free bottles scheme for retailers. So there wasn't any uniform price for the company product and it ultimately led to the downfall in the sales of the company. objectives. it provided cash discount to the extent of 70% and to some retailers it provided 5% cash discount. sales was rapidly increasing as they provided free bottles instead of discount to their retailers. And the fact that because B & J Co. . the main reason for the downfall of company sale was because of the fact that B & J Co. So retailers were more interested in selling the product of the Blue Shield Co. was its closest competitor. 6.. So Blue Shield Co. This created a conflict amongst retailers because of the price fixed by the other retailers who were getting less discount. Till the goods reached the retailer. this company's sales were drastically increased. went to study the strategy. 5. The company knew that B&J Co. and so the price fixed by the retailer for their customers were uniform. there wasn't any scheme for consumers although they had huge cash discount for their retailers i. Whereas the Blue Shield Company had a proper feedback of the consumers by doing various consumer value surveys. To some retailers. offered different cash discounts to its retailers. It also had market based surveys and industrial surveys for B & J Co. Whereas Blue Shield Co.Solved Cases 3. in some cases as huge as 70% whereas the Blue Shield Co. The more you purchase the more will be the discount provided to you was the policy of the company. There wasn't any concern for the customers in the B & J Co. The B & J Co. reacting patterns of its competitors. was not doing well. strengths. there was no problem but after it came to the retailer there was a problem in the price fixation of the product for the consumers. on the basis of the gross bottles purchased by them. The closest competitor means fighting for the same consumers and their needs. 4. In addition to this the Blue Shield Co. product. Investment: This is from the retailer view point. i.. rather than that of the B & J Co. came into the market or rather it planned its marketing strategy after knowing well its capable and closest competitors. weaknesses.e. the profits on this company's product were marginally lower than that of the Blue Shield Co. dales came to full stop for B & J Co. 1. although they have profits in both the company's products but due to the fact they had to invest heavily on B & J Co. Sales were almost nil.

. advertisement and promotion distribution. To invite new users through increasing trials. 6. Hence product decisions can't be seen in isolation from other elements of marketing mix like price distribution. by asking them what do they think of Company's position in respect of its competitor. Reasons for taking the product back • • • • • • • To maintain good relations with the retailers. To increase growth in the number of potential loyal customers. 2. To avoid reduction in sales of other products of the company. Product Mix Most of the new ventures fail not because of their quality but because they fail to live up to the customer's expectation. To ensure that long-term viability of the company remains unaffected. To prevent the company from public embarrassment. Objectives of Product Relaunch : 1. Increase usage in keeping with the strategy to provide complete satisfaction. 5. 3. Reinforcing the institutional image. To enter the new market as a part of relaunch. 7. To ensure that the goodwill of the company does not suffer. Packaging • • Packaging is done through product and brand planning. To prevent further increase in demand of the competitor' s product. To maintain a stable bargaining power of the company. To bring forth visible changes in what was perceived to be unwanted. It is done with a view to protect and draw the attention of the customers.Cases in Marketing Management The company also paid attention towards the consumers by having various consumer value surveys. 4. or what do they expect from the companies for their satisfaction as well as by asking them what do they perceive of the offers made to them by the competitor. To enhance the national image.

2) JAY ENGINEERING WORKS THE DILEMMA FACTS • Jay Engineering Works Ltd. Appearance of packaging at point of sale should be as per the planning. was started by Lala Shriram in the forties to manufacture ceiling fans and sewing machines. . The Cost of packaging should also be taken into consideration. It should always be made clear beforehand whether packaging is really necessary or not.Solved Cases •• The message to be delivered needs proper planning as wrong messages communicated will be very fatal for the company. Define The Problem & Research Objectives Develop The Research Plan Collect The Information Analysis The Information Present The Findings Market Research SOLVED CASE NO.

• The factory was in Calcutta. .

What is Diversification? Diversification is the process of moving into various fields. Similarly. They went for an expansion and diversification spree. due to opportunities arising in those fields. Expansion: As part of the expansion. automobiles. areas in which one has a competitive edge. but instead the sales started falling and the company's market standing took a downturn. these steps should have increased the sales of the company and made their market standing better. it does not refer to the first product the company started with. when one talks about Nokia. etc. This is because they excel in this product and as a result have a competitive edge in the market place. they opened two new factories in Agra and Hyderabad.Cases in Marketing Management • Under the able leadership of Lala Shriram. their core competence would be in heavy commercial vehicles. . Diversification: As part of diversification they went into new fields like textiles. However. For example. On his death. This is what we would consider as their core competence. sales started falling and their reputation took a nose dive. they always have other businesses to offset the losses in. • • • • • Problem Faced As mentioned above. Companies usually diversify to hedge their risks or balance their risks. the diversification and expansion measures taken by the company should have helped to increase its sales and profits. gensets. It is moving away from one's core competence. When one talks about core competence. but the product on which it is the market leader. talking about Ashok Leyland. the products became very popular and very soon acquired the status of a market leader. What is Core Competence? Core competence is one's strengths. the first thing that comes to mind is Cellphones. Ideally.In case one of their businesses doesn't do well. his sons took over the company. It is what one can excel in.

Mini Computers with Zenith Mini Computers is approved by the Government of India. UPMCL is to set up its own Research and Development Cell. automobiles and gensets. 3. WIPRO: Wipro started off with Shikakai. RELIANCE: Reliance would probably be the best example for diversification. The Association is for five years. The Managing Director of Reliance. a) 30 models available. Reliance Petrochemicals Reliance Oil & Gas Reliance Petroleum (1st refinery to be set up in the private sector) Reliance Power Reliance Financial Services Reliance Infocom (Telecom) Reliance Health Care • • • • In this case of Jay Engineering Works Ltd. Anil Ambani. himself said that the core competence of Reliance is diversification! The various fields into which Reliance has it's competencies are: • • • 2. Zenith has a wide range of Computers. The collaboration of U. Mr. It diversified into shirts with the brand called 'Ambassador'. .Solved Cases Coming back to diversification. SOLVED CASE NO. a few examples are listed below : 1. 4. 2. 3. MINI COMPUTERS _______________________________________________________________________ Facts of the Case Background information 1. which apparently is their core competence. a hair washing soap and then went into software. as part of diversification the company branched into textiles.P. 3) SOLUTIONS TO U. that being it's core competence.P. B ATA: Bata is known for its footware.

3. 30. Two alternatives for market survey a) b) 2. The existing marketing department of UPMCL is not very competent. Issues Concerned 1. 3. • Preliminary Requirements 1.Cases in Marketing Management b) 5. . Product Place Price Promotion And then select an appropriate marketing strategy. The Chief Executive of UPMCL does not agree to rely on a consultancy firm. 4. Analysis of the Case Since we are into launch a new brand in the market the case analysis is done while keeping in mind. UPMCL to undertake market survey for deciding the product-mix suitable to Indian industries and businesses.000 to Rs.000. • When (Timing) Where (Geographical Strategy) Whom (Target Market Prospect) Objectives 1. 3. 6. Give the job to a consultancy firm Choose an in-house operation. 2. Price range Rs. 3.00. Zenith will take care of know-how fees and the type of training. 2.

Comparison of Options • Consultancy Firms 1. 5. Personal involvement Clear objective More awareness Limited coverage More infrastructure Selection Made Considering both the options. 4. UPMCL will arrange for the orientation and training of the persons chosen. 5. Recruitment and Selection The Specifications • • The consultancy firm will provide the manpower according to requirements. we decide on hiring the services of a consultancy firm for doing the market survey. 3. 3.Solved Cases Options for Market Survey • • External consultancy firms Internal marketing department. • Wide spread Professional service Temporary service Cuts on costs Time-saving In-house Department 1. 2. 4. . 2.

Good quality of biscuits.a well-established biscuit company in Pune for the past few years. 2. 4) TASTY BISCUITS . Innovative ideas. Job specification : List of job's "Human Requirements" Orientation and Training • • Orientation vs Training Training needs analysis 1.Cases in Marketing Management Educational qualifications of the persons hired • • Computer proficiency (preferably of a technical background) Experience of customer relations and industrial marketing (2-3 years). Task analysis (new employees) Performance analysis (current employees) Setting training objectives Some Training Techniques • • • Job instruction training (JTT) Lectures audio visual techniques Programmed learning SOLVED CASE NO. . 3.PUNE _______________________ Facts of the Case • • • Tasty Biscuits . Orientation Program Defining the job Good selection Proper training Job analysis Job description : What the job entails.

Introduced in Mumbai. Buyer are less price sensitive when the product is more distinctive. they should have added some new flavours and designs to beat the competition. flavour and design. They continued with the same pricing policy even after six months. • • • • • • Cause of Slump in Sales • Market size underestimated. Price 10% higher right from the beginning. Decline in sales from seventh month onwards. Same product. • .Solved Cases • • Good distribution network and promotion policy. Encouraging response for the first 6 months. Introduction of animal shaped biscuits by Tasty Biscuits. • • • Failure in Revision of Prices • • • • Tasty Biscuits failed to realise that in the beginning. Delhi. flavour and design for a long time. even other potential markets could have been detected. Calcutta and Pune. Tasty Biscuits stuck to the same product. Since the company did not pay attention to the competitors they faced heavy competition from them. Product incorrectly positioned in the market. Market research was carried out in Pune with a sample size of 200. By doing a proper survey. When a product is no more novel it fails to attract customers. Buyers are less price sensitive when the are less aware of substitutes. The animal shaped biscuits were introduced in Pune and the four metropolitan cities only. Smaller cities have also started welcoming such new ideas. Buyers are less price sensitive when the product is assumed to have more quality prestige and exclusiveness. A study made by the 'Indian Biscuit Manufacturers' Associationshows-21% of the target market are children. Competitors fight back harder than expected. Seeing the competition. Chennai.

The sample of 200 was very small. • • • • Remedial Measures • Target marketing. Delhi. • • • . Not focussed. Chennai and Calcutta. There was no focus. New flavours and designs. The children should have been majorly targeted but also other age groups could have been included. Small sample size. Whenever a new product is launched the competitors fight back. Sampling should have been carried out according to the income groups and hence accordingly the product price and product launch could be decided. Young parents are very particular about the nutritional value of a product for their children. If something of that sort could be added it would be an added advantage. The response of the parents were taken instead of the children. Rather. the children could have been directly targeted. Nutritional biscuits. Varied flavours and designs can be introduced to bring a novelty and keep the children attracted to the biscuits. Also some gifts could be given like stickers to attract the kids.Cases in Marketing Management • • They had initially adopted the rapid skimming strategy in the introduction stage. They failed to make a study of the competitors. Wrong Market Research • Restricted only to Pune. Sampling was not done according to the income group. Free samples in school. The price of the product was high and so was the cost of promotion. Failed to make a study about competitors. The market research was only done in Pune and the product was launched in Mumbai. Free samples should be distributed in schools.

Margaret decided to pursue the possibility of purchasing the business. At this meeting the owner presented the following information about his operation: 1.000 inhabitants. Margaret and the owner agreed to meet to discuss the possibility of purchasing/selling the business.SAMPLE CASE STUDY Margaret. The community in which she was building her home had a population of 100.000. The thought of purchasing this business was appealing to Margaret. While they had an income from her retirement program. and was the financial and economic center of a country with 300. it was not sufficient to appropriately support the two of them. Three other important factors in Margaret's considerations were that the per capita income of the community and county was above the average for the state. and there were no other plumbing display showrooms in the city or the county of any significance. who had recently retired from a thirty-year career in public school administration. The projected county growth rate was even higher than that of the city. The plumbing contractor indicated to Margaret that he was considering selling this business in order that he could concentrate more on his plumbing contracting operation. This sole proprietorship consisted of a display showroom featuring various upscale plumbing fixtures and a showroom sales staff of four persons including the manager and a shipping receiving clerk. a projected population growth rate of 2% per year. A P & L Statement for the eight months of operation of the business since its establishment . consequently the need for additional income prompted her consideration of buying a business. there were several new upscale housing developments being planned for the near future in the community. Because of these factors. Margaret had become acquainted with their plumbing contractor who also owned and operated another business for the propose of selling plumbing fixtures for the kitchen and bathroom. During the process of constructing their new home. was considering a new career by the purchasing of a business in the community where she and her spouse of three years had moved.

he could be readily available for assistance when needed. although he doubted that the adjustment would be much since such an inventory took place within the past 45 days. He also suggested that he assumes the responsibility for existing account receivables as well as account payables. 3. provided it was appropriate with Margaret. and other relevant legal documents pertaining to the business. In the two weeks that followed. the accountant reviewed the monthly income statements. he could rent a small office area in the rear of the building on a month-to-month basis and operate the plumbing service business out of it. Margaret contacted the vendors and they assured her that new accounts with the same terms and discounts as the existing ones would not be a problem. . the owner suggested that if Margaret agreed. He also stated his willingness to work on the showroom floor and in the sales office on Saturdays for two months to assist in the transition. He also presented equipment and furniture depreciation schedules and existing tax documents and records. thus increasing the estimated annual net profit available to him to approximately Rs. At the conclusion of the meeting. the Balance Sheet for the end of the 8-month operating period. Margaret decided to purchase the business in accordance with the terms discussed. By doing this.Cases in Marketing Management 2. In the next meeting. Margaret asked for time "think the matter over" and if she chose to do so. A copy of the Lease Agreement ( 28 months remaining on the current lease with a three-year option to renew) A listing of the major suppliers of goods sold and the account terms from each supplier. After checking with the county offices on a variety of items. 31. If Margaret was to buy the business. but could grow given that the existing business had only operated for eight months. The owner suggested that the selling price be adjusted based on a physical inventory of the stock. call the major vendors to ensure that she would be able to open new accounts under her name with the same that existed for the current accounts. To assist in the transition. she was planning to eliminate one of the staff members and assume that responsibility herself. Margaret believed that the current level of sales could not only be maintained.500. such as the number building permits issued and anticipated to be issued and available plans for housing developments.

Q2. and The Financial terms of her offer to purchase the business? Q3.000 40. Rs.600/1. which he would be willing to do. Rs. What observations do you have of the relationship of the buyer and seller in this negotiation process and the potential future effect (s) or implication (s). In the discussion that followed.800/3. 2. system) Leasehold improvements. showroom (orig.000/140.Sample Case Study QUESTIONS Q1. Rs. Wholesale cost of stock in inventory Wholesale cost of Stock on display in showroom Book value of office furniture and equipment (tel. Rs. Rs. What are your thoughts regarding whether or not this is 'the right' business investment for Margaret? If you have concerns please indicate the reason(s) for those concerns.e.000 30. 400. 130. if any. Rs. 220. Rs. cost of Rs. Rs. if any.month period) SALES COST OF GOODS SOLD (65%) GROSS PROFIT OPERATING EXPENSES Wages and Benefits Rent Telephone Utilities Rs. Rs.000/26.000) TOTAL AMOUNT SUMMARY OF PROFIT & LOSS STATEMENT. What suggestions do you have.000 Rs. regarding Margaret's investigation of the other aspects of the business other than the financial review? Q4. 3. what would your advice have been to Margaret.000 220.000/60. 4. The basis for this asking price was the following : 1. the owner indicated that his asking price for the business was Rs. Rs.600/- . As a financial advisor.000 if he were to carry a note for any substantial balance. 60. regarding a) b) Her analysis of the financial aspects of the business.000/260. i. (For 8 .000 20.

500. Rs.378.220. .000.000 or a 61/2% return. this monthly payment would total approximately Rs.Cases in Marketing Management Advertising & Marketing Accounting Services Mic.000/36. Margaret would need to have a working capital reservoir of Rs. when you include the payments on the promissory note in the financial considerations.000/2. 75.000/10. PROFIT BEFORE TAXES TAXES (Maximum anticipated federal income tax) ESTIMATED NET PROFIT (For 8-month period) Rs. Among these are: a) What was the average turnover period for accounts receivable and did Margaret have a sufficient reservoir of working capital to address this consideration? Given the guideline of having a working capital reservoir equal to one and one-half of one month's gross revenues. If the owner were to carry a 10-year note at 10% interest for the balance of Rs. 600.000 from annual sales of Rs. When you include the wages for the one employee in the financial considerations. the advisability of purchasing this business should be seriously questioned unless you can be relatively positive about being able to increase profits. Rs. Rs. Margaret will be receiving approximately 5% on his Rs. Rs.000 on the business if she was to buy it. Margaret failed to consider other financial factors important to a successful business acquisition.600/104.000/- After reviewing this information. 2. 180. She arranged a second meeting with the owner and her accountant. the business is yielding an annual operating profit of approximately Rs. Margaret was still interested in pursuing the matter further.7.40. RS.40. 8.000 for that period or a projected annual net profit of approximately Rs.500. thus reducing the annual net profits to Rs. 40. 26. In addition.000 investment.900. This raises the question about the advisability of purchasing this business with that rate of return unless you could be relatively sure of your ability to substantially increase sales without significantly increasing operating. 10.400/1. In 8 months.000. 10. Subtracting this amount from Rs. Margaret planned to make a downpayment of Rs. Again. the payments would be Rs.000/26. Rs.74 per month unless the arrangement were to include a balloon payment.000 in addition to her down payment of Rs.000 estimated net profit at the end of the 8-month operating period would leave abalance net profit of Rs. Office Supplies & Exps TOTAL OPERATING EXPENSE. 1.

These additional funds could be used in a variety of ways. It is very difficult to know whether or not this is "the right" business investment for Margaret. but growing urban community. since it does not appear that she spent sufficient time investigating many aspects. 4. 2. Either of these would have made more funds available each month during the first few years of operation. It does not appear that Margaret spent time observing and analysing the day-to-day operation of the business before deciding to purchase it. It is the intent of the questions and the answers to each to explore the following: 1. The buyer did not analyse all aspects of the business as thoroughly as she should have and consequently may have placed herself and the business in jeopardy as far as future success is concerned. one with a balloon payment or one with an escalating rate of payment over the term of the note. a more creative promissory note might be beneficial. although the current and prospective home-owners were the ultimate customers for Margaret's products.Sample Case Study b) What methods were available to increase the discount received on purchases of goods to be sold? Obviously. the cost of goods sold of 60% is substantial increasing this margin should be an important financial consideration As for the financial terms of the offer to purchase the business. Without her having experiences in this field. The specific weakness or omissions in the financial analysis of the business. . It also does not appear that Margaret spent time determining who the customers were and what their needs were. Understanding this aspect of the customer base is very important. The weaknesses in the buyer/ seller relationship in the negotiation process that culminates in the buying and selling of this business. it would seem that such observations would be important. general contractors and plumbing contractors were quite often the actual purchasers of these products. such as purchasing a greater volume of goods to be sold. 3. For example. CASE WATER WORKS_____________________________________________ Discussion This case presentation a review of the process and consideration involved in the decision by Margaret to purchase a retail sales business which sells upscale bathroom and kitchen plumbing fixtures in a small. and thus increasing the discount or creating and operating reserve.

The omissions in analysing other aspects of the business other than financial. In this case. This codependency requires the buyer and the seller to perform careful research before the sale and establish a common psychological and emotional understanding as sale negotiations proceed. then it did not allow the seller and Margaret to establish the trusting relationship that is needed when a long -term relationship is imminent. . The most apparent "error" in assessing the financial aspect of this business investment by Margaret was her removal of the one of the employee's wages from the total amount of expenses in his calculation of the potential return to her. including Margaret should review when investigating the possible purchase of an existing business. The general consideration anyone. she should not exclude that amount of wages from the financial consideration of determining the operating profits of the business. you want to buy a business. If this is true. In this case. If a sale requires the seller to receive a substantial portion of the purchase price over an extended period such as by a promissory note. the seller depends on the buyer to succeed in the business and make regular payments on the note. the relationship between the buyer and seller will likely last five or ten years. 6. it does not appear that the discussions and review of the business were as comprehensive as they should have been. 5. You do not want to "buy a job". 4. Even though she does plan to eliminate one staff position and fill that position herself. How to establish this mutual understanding when circumstances make it necessary is the secret to buying and selling a business. In turn.Cases in Marketing Management 3. It also did not allow the buyer to learn as much about the business as she probably needed to know given the fact that her previous experience had not been in a private business nor in the plumbing industry. the buyer depends on the seller to have been truthful about all aspects of the business. Both of these omissions could lead to potential problems.

and recommended solutions. and personnel. time pressure. Others are more straightforward. and limited information . Some are comprehensive. such as those you will find in this text. and the compatibility of the recommended course of action with other described conditions. incorporating problems in production. a business case is a device for learning. Your task is to "solve" the cases much as detectives solve crimes. Put another way. WHY DO CASE ANALYSIS?______________________________________________ The central purpose of preparing cases is to improve your ability to identify and isolate major problems and to offer practical solutions for an organisation in a particular situation. finance. or selecting a new source of supply. the reasonableness of any assumptions made. In business there are usually several solutions that. Cases illustrating a decision situation have been developed for all areas of a business.CASE ANALYSIS GUIDELINES WHAT IS A CASE? Like lectures. if properly implemented.in which a decision must be made. specific problems to be solved. For instance. and texts.a real problem. can solve a problem. How then can a case solution be evaluated? The instructor will look for the quality of the analysis undertaken. therefore. the proper use of concepts from the business disciplines. Case analysis involves reading about a business situation and preparing an oral or written report on the key facts. The same is true in most business cases. discussions. The special feature of a case is that it stimulates the circumstances faced by a business executive . decreasing expenses. The major difference is that in crime there is a particular guilty party and. only one correct solution. the purpose is to improve the analyst's skill in offering penetrating insights into marketing problems. a retailer might achieve the same end result by increasing advertising. marketing. . symptoms that reflect the presence of problems.

some of which may not seem terribly relevant to your immediate problem. and headache. It is only through a careful analysis of the information that the physician can consider and eliminate many possibilities and eventually arrive at the correct diagnosis. The next step is to ask you the reason for your visit. is not likely to be important. dizziness. These bits of information. The task of the physician is to study the symptoms alongwith the facts and possibly some additional details (e. It is critical to realize that these symptoms are not the problem (unless they are life threatening). or the symptoms you are experiencing. most individuals develop their own method (which often carries over to the workplace following graduation). Imagine going to see the doctor. However. dizziness. A medical analogy will help illustrate this approach. and current mediation.g. and recommendations. A second purpose of case analysis is to develop the skill to present and defend recommendations. height. having experienced fever. allergies. but also presents it in a convincing fashion. you will be asked your age. the possibility of a blow to the head) and arrive at an educated conclusion about the causes. Not until the problems. or primary and secondary data. . symptoms. X-ray. Experience and training tell the medical persons that the colour of your hair. problems. For example. Students have the opportunity to compare the problems and solutions that they identify in a case with the problems and solution identified by others in the class. They are discomforts that indicate the presence of problems. blood test. or causes of the symptom are rectified will you return to good health and a feeling of normalcy. or the problems. for example. weight. with training and experience. despite the physician's skills. invariably more facts are collected than are needed. COMPONENTS OF A CASE ANALYSIS__________________________________ There are many approaches to analysing a case and. and a headache for several days. your recent eating behaviour. some new data will be collected. When you first arrive. alternative solutions. One that many students find useful in a five-part analysis-facts. nausea. will familiarise the physician with your case and may provide some clues to be used in the analysis. blood pressure and pulse.Cases in Marketing Management Case analysis permits a hands-on experience in the classroom within a short period of time. In addition. A good analyst not only identifies a workable solution. In this example. like your temperature. nausea. the cause could be as varied as a concussion or a virus. the physician or an assistant will collect a variety of facts. Note that the physician is fairly selective in the facts gathered. At this point you describe in some detail the duration and severity of the fever.

etc. the physician will double-check the facts to ensure that the preferred solution is compatible with the existing conditions. and the situation facing the organisation. Once diagnosed. Problem Alternative Solution Various courses of actions that will eliminate problems and alleviate symptoms. Recommendation The specific course of action proposed (often presented first so the reader knows where the analysis is headed). assembles. In this section identify concepts (segmentation. dissatisfied employees) that suggest the presence of a problem. sifts. Are you allergic to any medication? What dosage is appropriate for your body weight? Given your job or life-style. is it necessary for you to engage in certain behaviour changes? Finally. Undesirable condition (a decline in sales.a conclusion about what is causing the discomfort. dual. push promotion strategy. Concepts may appear here also. don't worry too much about details. the physician makes a final recommendation as to how to address your problem. Try to get a sense for the time period. Make a list of the facts and look for the major symptoms. As a result of training and experience. Basic weaknesses that create symptoms and undermine efficient performance. Go . This same approach can be sued with a business case. just before suggesting a course of action. Notice the expertise which the physician provides. Next. the personalities. During the first reading. the doctor arranges. At this point you may want to gather some additional outside information. rising expenses. price lining. and analyses the facts and symptoms to arrive at a diagnosis . APPROACHING A CASE It is best to read a case from beginning to end to get a feel for the situation. If the problem has been correctly diagnosed and the appropriate solution administered. product life cycles. the problem will be solved and the symptoms will disappear. In fact. distribution. the written presentation can be subdivided into the following sections: Facts Symptoms Important issues necessary to become familiar with the situation.). read the case again in more detail. the physician is prepared by training and experience to prescribe a remedy or solution. customer complaints.Case Analysis Guidelines Lastly.

the skill of the business case analyst is in correctly identifying the problems. Also. check your text for the marketing concepts.Cases in Marketing Management to the library and look up the company or industry in the Business Periodicals Index. push versus pull promotion. and techniques that are relevant to this case. Make use of the marketing principles you are learning. Just as the skill of the physician is in diagnosing an illness. yet comprehensive. Read a few articles to flesh out your comprehension of the situation. Spend some time wording your problem statement so that it is clear and succinct. and/or vertical marketing system relevant? The problem may be poor strategy or bad implementation. The next step is to do some brainstorming about solutions. Ask yourself some "What if questions. Having considered several options. . select the solution or recommendation that is most compatible with the conditions found in the case. why do these symptoms exist? Keep in mind that the physician does not rely entirely on intuition in making the diagnosis. Are products life cycle. What would happen if the firm shifted its promotional budget away from consumers and more toward the trade? How would competitors react to a reduction in price? Would television be a better advertising medium for the product than print? Could the product line be extended? Be careful here not to rely too heavily on your intuition of common sense. Similarly. you should make use of the marketing fundamentals you are learning. strategies. This leads to the crucial step of defining the problem. Ask yourself.

The case method brings out the complete realities of problem solving and help us in developing the decision making capabilities of students. recognising the complexity and ambiguity of the practical world". Thus. To be an effective marketing professional. The cases included in this study course material cover various areas of marketing so that the student develops the skills on each of those areas. the case method is integrated as a dominant tool in its education methodology.The Case Study Focus THE CASESTUDY APPROACH As the cases in the marketing program is uniquely designed to develop marketing management skills that are required in a competitive business environment. by allowing each student an opportunity to get into the shoes of the protagonist. it provides data . "A case is a partial historical clinical study of a situation which has confronted a practicing administrator or managerial group. "Case studies focus attention on what a firm has done or should do in an actual business environment. students can develop and refine their analytical skills". By reading. the program has a very strong case study orientation. understanding and analysing cases. A case is usually a depiction of a managerial situation or dilemma that calls for the best possible plan of action given the available information. A case study reinforces the students' understanding of the concepts and their ability to apply them in the real and practical situations. the student has to think and act like one. WHAT IS A CASE? According to the Harvard Business School.substantive and essential to the analysis of a specific situation for the framing of alternative action programs and for their implementation. The educational methodology followed gives a . Presented in a narrative form to encourage student involvement. AN EFFECTIVE LEARNING AID Case studies are widely acknowledged as very effective learning aids.

The main body of the case is a comprehensive write up on the situation / problem and it is presented chronologically. it requires the reader to analyse the situations on hand. planning. which is later examined in detail. This study course material contains case studies covering a multitude of marketing management concepts. According to Philip Kotler. implementation and control of programs designed to create build and maintain. Marketing Management is "the analysis. Therefore understanding the concepts of marketing management is all about understanding the application of marketing concepts and practices by domestic and global companies. marketing management emerges from this application of theory. marketing management involves managing demand. Thus. The background note provides comprehensive information about the situation/problem. its evolutional and the attempts to deal with it. Promoting analytical thinking and a practical approach to problem solving. Marketing Management deals with an organisation's efforts to identify customer needs and wants and designs the appropriate products or services to meet these demands. Giving a detailed perspective to work out the alternative solutions to the situation/ problem at hand.Cases in Marketing Management thrust to the skill development of the students by providing them exposure to various real life situations. All the cases are involved at fullfilling the following purposes: • Arousing interest in the topic under discussion by involving the reader in the company's problems . which in turn involves managing customer relationships". . With target buyers for the purpose of achieving organisational efforts to identify customer needs and wants and design appropriate products or services to meet these demands. The cases are designed to facilitate the understanding of these concepts and enable the reader to link them with the practical aspects as experienced by the companies involved. This describes the genesis of the problem. A case brings to life the various dimensions of a managers job. • 1. beneficial exchanges'. A case is a tool for applying theoretical concepts to real life business situations. The importance of case studies in understanding. making decisions wherever required and depend those decisions with logical arguments. by small and large businesses and in intense and moderately competitive markets.each begins with the build-up of a situation problem. Case studies attempt to stimulate learning by doing.

which are essentially aimed at enabling the reader to link marketing theory to practical situations as mentioned in the case and help those readers who wish to go beyond the information presented in the cases. the cases included in this study material focuses on the different facets of marketing management. Bridging the Gap Between Theory and Practice .The Case Study Approach The findings of surveys. . In a nutshell. comments from industry experts are provided wherever possible.Each case is followed by a set of questions. It is hoped that this study material on case studies in marketing management will be found interesting and useful by the students and teachers of marketing.

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