Name of the College : armiet

roll no : armiet/mms 19/gt48

NAME OF THE STUDENT : Tejaswini Gajendra Gurav
ACADEMIC YEAR : 2019-2020
SUBJECT : Marketing Management

Q.1] Find why analysing competitive environment is important for brand competitors like
coke & pepsi which have engaged in the so called cola wars for decades

Ans.

PEPSI

Pepsi is a carbonated soft drink that is produced and manufactured by PepsiCo. Created and
developed in 1898 and introduced as "Brad's Drink", it was later renamed as Pepsi-Cola on June
16, 1903, then to Pepsi in 1961.It is one of the most well known brands in the world today
available in over 160 countries. It has an extremely positive outlook for India. This reflects that
India holds a central position in Pepsi's corporate strategy.India is a key market for Pepsi co, and
at the same time the company has added value to Indian agriculture and industry. PepsiCo
entered India in 1989 and is concentrating in three focus areas- Soft drink concentrate, snack
foods and vegetable and food processing.Faced with the existing policy framework at the time,
the company entered the Indian market through a joint venture with Volta‘s and Punjab Agro
Industries. With the introduction of the liberalization policies since 1991, Pepsi took complete
control of its operations.

COCA-COLA

Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more
than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often
referred to simply as Coke. Originally intended as a patent medicine when it was invented in the
late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs
Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market
throughout the 20th century.The Coca-Cola Company has, on occasion, introduced other cola
drinks under the Coke brand name. The most common of these is Diet Coke, with others
including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Zero, Coca, and
special versions with lemon, lime or coffee.

PEPSI VS COCA-COLA

Taste

Coca-Cola is the original cola, while there isn't a huge difference in taste; Pepsi mirrored their
cola after Coke's, being just different enough in taste to not actually be the same drink.

Similarities

Pepsi-Cola and Coca Cola Classic are both carbonated cola beverages

Sweetness

Pepsi tastes sweeter than Coca-Cola, This is the reason why many prefer Pepsi over Coca-Cola
in a blind test but may prefer Coke when drinking an entire can.

Carbonation

Coca-Cola has more carbonation than Pepsi depending on what region you are in. It was said
that depending on where each one was made the amount of carbonation in them will be different
therefore proving that neither Coca-Cola nor Pepsi have more carbonation.

THE COLA WAR

The Cola Wars are a campaign of mutually-targeted television advertisements and marketing
campaigns since the 1980s to present between soft drink manufacturers Coca-Cola Company
and PepsiCo Incorporated. According to Consumer Reports, in the 1970s, the rivalry continued to
heat up the market. Pepsi conducted blind taste tests in stores, in what was called the "Pepsi
Challenge".

These tests suggested that more consumers preferred the taste of Pepsi (which is believed to
have more lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. The sales of
Pepsi started to climb, and Pepsi kicked off the "Challenge" across the nation. This became
known as the "Cola Wars."

The Beginning

1975 heralded the *Pepsi Challenge‘, a landmark marketing strategy, which convinced millions of
consumers that the taste of Pepsi was superior to Coke. Simultaneously, Pepsi Light, with a
distinctive lemon taste, was introduced as an alternative to traditional diet colas.

In 1983 Coke launched aspartame/saccharin blend Diet Coke. In response in 1989 Pepsi-Cola
introduced an exciting new flavor, Wild Cherry Pepsi. Thus Diet Pepsi's 'The Other Challenge'
campaign was based around a 54-46% lead over Diet Coke in independently researched taste
tests in Australia.
 It was only in 1996 that Pepsi unveiled a revolutionary 'blue' look worldwide 'to transform the
image and attitude' of one of the world's best-known brands. 'Pepsi Blue represents a quantum
leap into the future and redefines how the Cola Wars will be fought and won in the 21st Century.'

Competition

Many of the brands available from the three largest soda producers, The Coca-Cola Company
and PepsiCo are intended as direct, equivalent competitors. The following chart lists these
competitors by type or flavour of drink.

Marketing Campaigns

Coca-Cola and Pepsi-Cola focused particularly on pop stars; notable soft drink promoters
included Mariah Carey, KISS, Tina Turner , Britney Spears , David Bowie, Rod Stewart ,Jim
Varney, Elvis Presley, Michael Jackson, Madonna, and Ray Charles (for Pepsi) and Whitney
Houston, Paula Abdul, Weird Al Yankovic, George Michael, Christina Aguilera, Max Headroom,
and Elton John (for Coca-Cola).

Second Cola War

During the 1990s, a "second cola war" was reported in the United Kingdom. This time it was due
to the launch of Virgin Cola, as well as Sainsbury's store brand Classic Cola, which, unlike most
store brand colas, was designed to look like a top product worthy of competition. For a few years
both colas were competitive with Coca-Cola and Pepsi; at one point Coca-Cola even sued
Sainsbury's claiming the design of the Classic Cola can was too similar to Coke's. However,
today, both Virgin and Cla ssic Cola are far behind the two major brands.

______________________________________________

Q.2] Write marketing research process of HUL

Ans.

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited, is INDIAs
largest consumer products company and was formed in 1933 as Lever Brothers India Limited. It
is currently headquartered in Mumbai, India and its 41,000 employees are headed by Harish
Manwani, the non-executive chairman of the board. HUL is the market leader in Indian products
such as tea, soaps,detergents, as its products have become daily household name in India. The
Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever Limited.

The company was renamed in late June 2007 as "Hindustan Unilever Limited".

Today, HUL is one of India’s largest exporters of branded Fast Moving Consumer Goods. It has
been recognized by the Government of India as a Golden SuperStarTradingHouse.

HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East, Africa,
Australia, and North America etc.
* HUL’s products touches two out of three Indian everyday

* Reach 80% Households

* Direct Coverage of 1mln outlets

* 2000 Suppliers and Associates

* 71 Manufacturing locations

* 15000 Employees

* 1100 managers

* Shelf availability 84% outlets in India

OBJECTIVES AND METHODOLOGY

OBJECTIVE

Primary objective

To find the past sale growth and demand analysis

Secondary Objective

Market structure analysis

SWOT analysis

Competitor analysis

Performance evaluation

Methodology

* Secondary data’s are pre published and research data’s collected from different websites,
journals, newspapers, company research papers.

* These documents and data’s are very useful for the theoretical, conceptual and organizational
background analysis.

* Detailed analysis of data’s is made by plotting different graphs and tables which can be easily
understandable.

* Then by observing these graphs we have made our conclusions and recommendations

PRODUCT LINE

A) HOME AND PERSONAL CARE:

1) Personal wash : Lux Lifebuoy Liril Hamam Breeze Dove Pears Rexona

2) Laundry : Surf Excel Rin Wheel

3) Skin Care : Fair and lovely ponds avaince

4) Hair care : sunsilk clinic

5) Oral care : pepsodent closeup ,

6) Deodorants : axe rexona

7) Colour Cosmetics : lakme

SWOT ANALYSIS

STRENGTH

* Variety of products

* Distribution Network

* Brand image

* Quality Management

* Innovation and R&D strength

THREATS

* From High Class Competitor

* Proctor & Gamble

* Pantene

* Dabur

* Babool

OPPORTUNITIES

* Huge Market

* Increasing per capital income

* Increasing consumption pattern

* Potential for making more impact of brand image.

* Coming in technology e.g. in water purifiers

WEAKNESS

* Not able to compete with local competitor in the rural market

* Not focus on upper class population

* Pricing policy is not good

COMPETITORS ANALYSIS

According to the market survey done by BUSINESS TODAY the top 10 companies of FMCG
sector are given below.

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestlé India

4. GCMMF (AMUL)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

PERFORMANCE ANALYSIS

DATA ANALYSIS:

We have the sales and profit figures of HUL from the year 1998 to 2007 in the 10year past data
from Yr1998-2007, after plotting two graph one of sales & other of profit as shown in here we can
see that both profit and sales of the company rose from the year 1998 till 2001, but in the year
2002 we see that the sales fell but there was actually rise in the profit of the company . In the year
2004 we see that there was a steep fall in the profit of the company and from the year 2005
onwards there was a slow but steady rise in the profit of the company, but a rapid rise in the sales
of the company in the given years.

FUTURE OPPORTUNITIES

India is a fast developing country with a huge population whose per capita income is growing
rapidly and there is huge opportunity for FMCG companies.

The opportunities are as follows:

Increasing per capita income is driving FMCG growth in India

India’s consuming class is growing rapidly

Changing consumption pattern: Per capita income of Indian customer is increasing and FMCG
products are relatively elastic in nature hence the expected sale should increase.

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Q.3] Suppose you have joined as a market researcher in an organisation you have been
made responsible for marketing intelligence of the organisation. what aspects would you
consider to ensure effective marketing intelligence of the organisation ?
Ans.

As a market researcher iam considering following steps

1. STRONG ANALYTICAL SKILLS :

Converting raw data to useful insights is the single biggest skill I need to have to be a leading
researcher. My clients depend on me to collect huge amounts of data – quantitative or qualitative.
However, the key is to make sense of that data and convert it into actionable insights and trends
for my clients’ business. Ultimately, everything should tie back to the business goals. How would
this research help my client in improving the key business metrics they care about? These could
be the traditional ones like revenue, customer experience, marketing ROI, or increase in new
customers. The key which is i have to understand the final business objectives and analyze the
data taking that into consideration. Furthermore, it is imperative to visualize my analysis and
present results in an easy to understand format that the management can relate to right away.

2. APPROACHABLE & FRIENDLY :

Surely, that is not hard to be! As a market researcher, I will be meeting people on a day-to-day
basis. I will be conducting anywhere between 20-40 one-on-one interviews and focus groups on a
monthly basis. It’s critical that Iam a people person. To make sure that research subjects feel “at
home” when they are with me is paramount. It is possible that their answers might be different if
they feel under pressure compared to when they are at ease and relaxed during the interview.

3. METHODOLOGICAL LIKE A SCIENTIST :

Market Research is not science – far from it – but researchers should use the time tested and
well established scientific methodology to uncover useful insights for clients. Any thorough
researcher would make sure that the process of uncovering insights follows the scientific
procedure: Observation, Hypothesis, Prediction & Testing. The results and insights from the
project vitally depend on the process followed to get to those insights. Consequently, it is key to
have a strong, validated and scientific process to gather insights.

4. CURIOUS BY NATURE :

Essentially, my role is much like that of an intelligent messenger. I gathers raw data from one
party and applies my intelligence and analytical skills to convert it into meaningful and useful
insight for the second party (the client). Mostly i have to keep myself by nature or by profession
are, or should be, always hungry and curious for information about anything. If iam expect to
unearth actionable insights for my client, i should be curious to find them myself. The deeper I
can dig, the better information and probably better insights me can gather.

5. STAR COMMUNICATOR :

Communication verbal or written is key for all professions, My job is to effectively communicate
with the research subjects either verbally (interviews or focus groups) or written (quantitative
surveys). At the other end, I have to present my analysis to my clients in a well documented,
actionable, and visually attractive report that helps the clients to make informative decisions.

6. ANTI STEREOTYPICAL :

Stereotypes are dangerous. As a researcher, my goal is to find insights based on the facts and
data i have to collect not on pre-informed opinions or societal stereotypes. As an individual, I
might have established stereotypes based on my professional or personal experiences. However,
it is imperative that I keep them aside and conduct my research with a neutral mindset. Quality
researchers are data and trend fanatics. They don’t believe in making even the smallest of
assumptions or in having stereotypes. It’s hard on an individual level, but it is hugely important if
Iam aspire to become a leading market researcher.

7. CLIENT FOCUSED NOT METHOD FOCUSED :

Every client is different. Every project is different. Rather than having standard tools and methods
that i have to use for all projects, I have to first try to understand the needs of the project and the
business and then decide the research methods to use. I have to always adopt the research to
the problem rather than start with a research method and then find a problem to solve.
Furthermore, there is no one method or set of methods, No one is better than others. Solid
research recognizes the value of using multiple methods, tools and data sets to achieve
repeatable and reliable results.

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Q.4) What approaches a seller in the business market should take while targeting CISCO
or HCL as a buyer.

Ans.

HCL provides innovative business consulting along with deep Cisco expertise to deliver complex
global IT transformation projects. HCL can also help run these environments with our industry
leading IT services organization.
Enabled by executive alignment and targeted joint investments, the Cisco-HCL partnership is
crafting digital-ready IT Infrastructure solutions optimized to adapt to the unpredictable needs of
21st Century Enterprises while delivering excellent business value and outcomes to our mutual
customers.
Our portfolio and capabilities to deliver Cisco based solutions has been widely acknowledged. In
2017, we received two significant awards from Cisco: Global IT Service Provider of the year for
Networking Excellence and Overall IT Service Provider of the year for EMEA region.

The hall and the Cisco is a type of a it services organization it attract or targeting thaire buyers
such a unpick or old ideas and also some new ideas this can easily use and us full to attract the
buyers and target the buyers that as follows
Road shows:
Road shows is also an effective promotional activity and most of companies are using
it.hcl and Cisco also using this promotional tools is a great help in getting the attention of the
target customers, the procurers of road show is to setup a canopy at the road side in different
markets or public places where the no of footfalls is high and where chance of getting national is
high too.
Hence we may conclude that a canopy should be set up prime location like in the market place
.we distribute the leaflet in public and also answer queries generated by the vision ,it is an easy
and effective way to generated queries for the follow-ups which can help in converting the
interred person into customers. road show also can be done with mega event. it helps in
awareness about the special schemes and offers by the company to the public.
Mega event:
HCL is organizing mega event in various places vary aggressively. these event are
organized at publicpalaces.appropriate location in a good market,in schools colleges and also in
residential colonies or societies where potential customer is available for the success of event.
In school and colleges these events can be organized on particular day for egg annual day
teachers day cultural day and other special occasions so as to have a maximum reach and
convert the calls to customers or clients.
Special offers :
Channel partner of hall give special discount offers to thaire customers on the
behalf of the company on order to sell the products puff the company .these special offers are like
this special offer in summers or in the festival season this special offers are helpful for customers
in decision making because when customer compare the price and benefits of hall home pcs with
other competitors then he can easily understand and give special offers
This are some main function or point that’s help to targeting buyers and attract them.

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Q 5] Prepare report on brand like coca-cola & explain how they segment their market as
per the needs & performance of diffrent sets of customer.

Ans.

Coca-Cola Company (see Appendix A) is a well-known big drinks manufacturer with over one
hundred year. Because of its strong brand, it not only makes and delivers their products around
the world, but also markets the non-alcoholic beverage concentrates and syrups. The company
has a vast portfolio of drinks, beverages, waters, juice, teas, coffees, energy and sports drinks
which they products, distribute, market and license all over the world. Meanwhile, Coca-Cola also
manages its business in more than 200 countries. (Datamonitor, 2009) The company plays an
important part in the international markets, and it also gives its one of the closest competitors
Pepsi a big challenge when the prices of the drinks are nearly the same. According to the Coca-
Cola official website, the company is growing very fast with its expanding, 92,400 worldwide
employees are being employed to work for it (The Coca-Cola Company, 2009).

On the other hand, Coca-Cola becomes a successful company and earns great revenue, using its
internal and external marketing strategies to overcome most of the other competitors. The
company also claims that innovation is at the heart of everything they do and it is one of the
reasons why they success. The report aims to analyze the market segmentation for one of the
world’s strongest brands Coca-Cola and talks about the different market segmentation variables
by theories and practices in the company. Furthermore, the report discusses the targeting and
positioning of Coca-Cola Company, it also provides the market for the organization is segmented
for the company.

With its high reputation and strong brand image, Coca-Cola Company changed its original name
Coke with New Coke in 1985, and, the company also aims to give their customers better taste
(Datta, 1996). Generally speaking, although the company focus on whole population in the world,
young generation is the target marketed of the company and they also want to show their
products with full of youth and energy to their customers. Pendergrast(1993) states that Coca-
Cola are cool and real, and , differentiate Coke from its competitors while Plummer (1995) argues
“pepsi being young, exciting and hip and Dr pepper being nonconforming, unique and fun”. (cited
in Jennifer, 1997). Coca-Cola Company had to carefully consider releasing a diet product line due
to fears of weakening the brand. Part of the decision process relied on the invention of
aspartame, which is regarded as a superior sweetener to saccharine with less side effects
(Patrick and Thomas, 1992). Coca-Cola has been using its marketing mix to prove their success
business.

Market segments help the company to improve their products and services, knowing what their
customers need and innovate new sectors. They markets the products selling into different or
more than one market (e.g. Diet coke) (Patrick and Thomas, 1992). To know what their customers
need, Coca-Cola uses the consumer segmentation criteria and market into different groups:
behavioural, psychographic and profile.

Coca-Cola creates value to its customers and with good performance to convince people to buy
their products. The company heavily invested lots of money to advertise the products from one
country to another. According to its official website (2009), Coca-Cola Company says that it is
proud to be the longest continuous corporate partner of the Olympic Games. It is obviously that
the company has a long partnership with the Olympic Games since 1928 (The Coca-Cola
Company, 2009). The reputation is getting stronger and stronger now. There are more than 3,000
beverages and being sold at every store and luncheonette and sports ground across the land
(Hays, 2004). It is very convenience to buy them everywhere for parties or any functions. The
Coca-Cola Company treats each store differently. For example, in Japan, Coca-Cola Company
segmented its products for customers, not only through their products or favourite choices but
also according to the saving needs of logistics and vending machines to bring more convenience
and time saving, such as help the billing or regularly delivery (Joseph et al., 1993). Though the
company is earning good profit, innovation is still one of the important strategies to gain more
wealth. Different new products and packages could attract people to buy. For instance, if
companies want to run success business, they must know how to dissolve in different culture.
Coca-Cola knows people from different culture, using its innovation to mix different cultures and
flavours together to make new product (e.g. with the European launch of Jianchi, a new drink
inspired by the ancient principles of traditional Chinese wisdom (The Coca-Cola Company,
2009)).

Conclusion

The Coca-Cola Company/ Industry have covered a strong business market scale around the
world. Using different market strategies and dividing the market segments to help the company to
gain more profits. Moreover, the corporation (partnership) strategy and implementation provides a
brief overview of Coca-Cola Company’s operation, targeting and positioning in the drink industry.
In this case, although the company is running a good business, there are still some other internal
(e.g. positioning) and external challenges waiting for it to achieve, for example, Pepsi is one of
the closet competitors and purchases similar products.

Being the biggest manufacturer, distributor and marketer of non-alcoholic beverage industry, the
Coca-Cola Company has been running successful business with its franchising model in the
world. The company is in a good position to capture the market of any new drink categories.
Coca-Cola continues to expand their customers through investing new products, keeps
innovating and pursuit to get better results for its business in order to catch their loyal customers
throughout the world.

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Q.6] Take any product of your choice and identify the target market of that brand reflect it
through diagram

Ans.

Cadbury is a trade name with a long times past in New Zealand and a loving assurance to make
every person believe cheerful. Cadbury is a confectionery company owned by Kraft Foods. Its
main headquarter is in Dunedin. John Cadbury shaped the business in 1824 on the name of
Cadbury. The business started as a shop in a fashionable place.

A description of Cadbury’s and their aims of Cadbury is a worldwide company that makes market
and sells exclusive branded chocolate. Cadbury have done this effectively for over 200 years.
The cause they are so successful is because they have a comprehensible understanding of the
needs of their consumers, customers and other stakeholders

Product and services

The specific product that will be the focus of this assignment is Cadbury roses. It is considered to
be the best confectionary worldwide. It has almost various sorts of flavors shapes and 100%
gluten free.

Market of Interests

Cadbury Confectionery Ltd is the most leading player in chocolate making in New Zealand. The
company rebound from unhelpful media interest in 2009 to recover a lost percentage position in
assessment allocate during 2010, to account for 52%, production it by far the major participant in
chocolate confectionery. (Euro monitor, 2011)

Chocolate is known to be the best confectionary for everyone. The first is the upward share that
high-cocoa dark chocolate makes up of the likely $350 million to $400m of chocolate each year.
(Wikipedia, 2012). Dark Ghana slabs are now Whittaker’s major supplier, and therefore hold 20%
of NZ market share, whereas cocoa Old Gold is Cadbury’s best ever-growing line mirror rising
70% (Whitakers, 2012)

Cadbury is a confectionery company that makes 7.3% of the worlds, 27% of the world’s gum, and
7.4% of its chocolate. Australia and New Zealand are the largest markets in the region.
Cadbury’s foremost chocolate brand name in Australia is Cadbury Dairy Milk and in New Zealand,
brand contain Cadbury Dairy Milk. Cadbury has a number one location in New Zealand’s
confectionery marketplace by means of a 47% contribute to.

External Environment Impacts

Technology

Cadbury’s long traditions of expertise specializes its tastes and texture. In this competitive market
of confectionary technologies are improving consumer’s growing tastes as well as preference.
Chocolate creation is a greatly tasteful computer controlled procedure, with a good deal of the
new professional technology and equipment individual fashioned to Cadbury’s own design and
requirement.

Political

Milk chocolate be required to each be 20:20, with a lowest amount of 20% dried out cocoa solids
and a lowest amount of 20% milk solids. Dairy Milk is this kind of milk chocolate. (Skillsspace,
2012)

The Food Standards Agency is accountable for checking that the rule is uphold for the security of
resources that come into get in touch with with foodstuff and labeling. Labels have to hold certain
in sequence e.g. the manufactured goods name, the company’s name, a list of ingredient,
particular storage space directions).

Economics

Cadbury Dairy Milk chocolate is the leader chocolate in overall New Zealand. It almost holds 47%
of New Zealands confectionary market share in todays market. The scale of Cadbury Dairy Milk
chocolate going Fair trade is massive with more than 5.7 million Fair trade Certified Cadbury
Dairy Milk chocolate blocks in New Zealand and estimated 350 million Fair trade Certified
Cadbury Dairy Milk chocolate blocks globally in 2010. (Cadbury, 2012).

Social culture–source

Today Cadburys have become a company who have a culture, which is concerned in keeping its
stakeholders joyful. all along with this and the improvement in technology Cadburys have now
lost its wide employee variety and replace it with machinery and at the moment just spend
sufficient employees to stay the equipment leaving by individual stakeholder run the company has
now become restricted by shareholders who are chiefly concerned in the company creation a
wages (123helpme, 2011).

Demography

Cadbury chocolate targets kids between the age group of 5 to 10. During this age they are more
likely to prefer chocolates more than any other confectionary since it is one of the best and
satisfies most needs of the kids.

Competitors

An analysis of the current competition for Cadbury chocolates are centered on the 3 most popular
chocolate sold in the New Zealand market today is presented using SWOT analyses. The
weakness and strengths of Cadbury Chocolate has been identified as well as the threats and
opportunities.
Target Market segments profile

Cadbury chocolate targets kids between the age group of 5 to 10. During this age they are more
likely to prefer chocolates more than any other confectionary since it is one of the best and
satisfies most needs of the kids.

by means of customers attractive even additional anxious with healthy drinking Cadburys would
be sensible to look into producing a near to the ground obese or fat free chocolate variety. The
return of this, at the same time as it, could open a potential marketplace wherever people are
attractive additional conscious of strong. (123helpme, 2011)

Cadbury the chocolate leader aims to target kids between the age group of 5 to 10 who consume
chocolate the most. Though it does not have any specific segmentation targets therefore Cadbury
chocolates are eaten by people of all ages, sexes, cultures, educational backgrounds, regions
and on all occasions. It is not just for a taste but also people taste it on the celebration occasions.
However, there is some differentiation targeting as a variety of Cadbury products are available to
cater for the individual needs of different groups of customers. For example, a family block (350g)
is available for families.

___________________________________________________________________________

Q.7] Take any brand & analyse its performance by applying the porter's five force model

Ans.

Toyota Motor Corporation faces the significant effects of the external factors in its industry
environment, as shown in this Five Forces analysis based on Porter’s model. These external
factors exert forces on Toyota and influence its strategic direction. Even with the issues and
challenges identified in this Five Forces analysis, Toyota remains one of the top players in the
global automotive industry. Such success represents the company’s ability to withstand the
negative forces in its external environment. However, as indicated in this Five Forces analysis,
Toyota must continue innovating for competitive advantage against other firms.

Toyota’s Five Forces

Toyota’s Five Forces analysis shows that the most significant concerns are competition and the
bargaining power of customers, which are the strongest external factors in the automobile
industry environment. The following are the five forces and their intensities in impacting Toyota:

1.Competitive rivalry or competition (strong force)

2.Bargaining power of buyers or customers (strong force)

3.Bargaining power of suppliers (weak force)

4.Threat of substitutes or substitution (moderate force)

5.Threat of new entrants or new entry (weak force)

This Five Forces analysis shows that Toyota must focus on ensuring competitive advantage to
withstand the strong force of competition. In addition, Toyota needs to maximize its ability to
satisfy the preferences and expectations of customers, who also exert a strong force on the
business and the automotive industry.

1.Competitive Rivalry or Competition with Toyota (Strong Force)

Toyota must deal with the strong force of competition. This component of the Five Forces analysis
determines how firms affect each other. In Toyota’s case, the following external factors are the
main contributors to the strong force of competitive rivalry in the industry environment:

High aggressiveness of firms (strong force)

High variety and differentiation of firms (strong force)

Low number of large firms (moderate force)

2.Bargaining Power of Toyota’s Customers/Buyers (Strong Force)

Toyota’s customers directly affect the business through revenues. This component of the Five
Forces analysis shows the influence of buyers on business. In Toyota’s case, the following
external factors are the main contributors to the strong force or bargaining power of buyers in the
automotive industry environment:

Low switching costs (strong force)

High quality of information (strong force)

Moderate substitute availability (moderate force)

3.Bargaining Power of Toyota’s Suppliers (Weak Force)

Toyota’s suppliers aim to influence the firm to improve their businesses. This component of the
Five Forces analysis reflects the interactions between firms and their suppliers. In Toyota’s case,
the following external factors in the automobile industry environment contribute to the weak force
or bargaining power of suppliers:

Moderate population of suppliers (moderate force)

High overall supply (weak force)

Low forward integration of suppliers (weak force)

4.Threat of Substitutes or Substitution (Moderate Force)

Substitutes affect Toyota’s business by competing with the company’s products. This component
of the Five Forces analysis determines the impact of substitute products. In Toyota’s case, the
following external factors in the automotive industry environment are the main contributors to the
moderate force or threat of substitution:

Low switching costs (strong force)

Moderate availability of substitutes (moderate force)

Low convenience in using substitutes (weak force)

5.Threat of New Entrants or New Entry (Weak Force)

New entrants are potential competitors that threaten Toyota’s business. This component of the
Five Forces analysis shows the potential impact of new entry. In Toyota’s case, the following
external factors in the automotive industry environment contribute to the weak force or threat of
new entrants:

High capital costs (weak force)

High cost of brand development (weak force)

High supply chain costs (weak force)

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Q.8 ] By taking example of any one particular brand and study various pramotional
strategies that is adopted by them to reach the masses

Ans.

Promotional Strategies for PEPSI

The two basis objective for carrying out such various promotional activities by Pepsi is to
generate more sales as well as to create and maintain an image of its product. It carries out
promotional activities as controlled and integrated programmer of communication land, material
design presents its soft drink to perspective customers, and it also helps in communicating the
need of soft drink to facilitate the sale eventually to contribute toward the profit in long range.

The tools used by Pepsi for fulfilling various purposes of its promotional activities are the following

1. Advertising

The main motive behind the purpose of advertising of Pepsi Food Pvt ltd is to maintain the brand
loyalty.

All the bottles of India has to advertise the product Pepsi, 7up, Mirinda,Slice, Team and Soda as
per the norms and guidance of the Pepsi Food Pvt Ltd. India. On national basis the Pepsi Food
Pvt Ltd does the advertisement on an extensive basis using a number of media.

Media

1. Painting wall of visible site

2. Aerial signage – Glow signage board

3. Boards

4. Poster
5. Banner

6. Striker

7. Dangler

The main slogan used by Pepsi Food (Soft drink) all over India for its cola product has been the
choice of new generation. But past years, it was dropped and introduced new slogan, “ Yahi Hai
Right Choice Baby” and then “Yeh Dil Mange More”. Various characters have been used to
advertisement from time to time,

Coolers

In spite of the above method being used for display the best one is to use the coolers as an
equipment of display of soft drinks. The coolers are supplied to the retail outlets by the company
itself through the distributors. The company supplies these coolers at reasonable price without
changing the profit.

2. Sales Promotion

The sale promotion is one area of “Promotion Mix” where every company concentrates most to
promote its brands. Although sell promotion has short life period yet it is very effective in
promoting sale to the greater extent. Sale promotional activities adopted by Pepsi are:

Premiums (Gifts): The Company gives different types gifts to his own consumer with either
every bottle or some bottles in its crown. The gifts often comprise cash money, rebates free soft
drinks, openers, crown scheme, goods etc.

POP display and demonstration: The Pepsi Company involves POP (Point purchase display
and demonstration) to promote its brands. Here, the company supplies different kinds of attractive
and good posters, calendars, caps tee to wholesalers and retailers to promote its brand through
POP display and demonstration.

Discount: Time to Time and is peak season (ie; MarchSeptember) company announces discount
for wholesalers, retailers and consumers also.

Scratch Card: Scratch is one of the very effective and important methods of the sale promotion
adopted by the Pepsi. The company offers scratch card offer at every retail outlet to promote sale.
Here, with every bottle of Pepsi brands, a scratch card is given to buyer. Every card ha some
hidden prizes. The prize is appeared after rubbing. The consumers are given the prize associated
with appeared prize.

3. Public relation and Publicity

As public relation is a management tool designed to favourably influence attitudes towards an

organization, its products and policies, whereas publicity is any communication about an
organization, its products and policies through the media which is not paid by the organization But
beyond this, Pepsi goes for “Marketing Public Relation (MPR)” where the company directly
support corporate product promotion and image making. This is the responsibility make for
marketing division rather than public relation department. To promote its products through
Marketing Public Relation, Pepsi has various tools,
4. Personal selling

Conceptually there is not any place for personal selling in soft drink industry. It falls into illegal
trade. However Pepsi adopts surrogate nature of personal selling. As soft drink allows the
company to communicate frequently and directly with wholesalers and retailers than consumers.
For clear and reliable communication, the company appoints “Territory sales executive” in every
market segments. The main work of territory sales executives is to communicate with wholesalers
and retailers of their concerned market segments on regular basis.

Besides they also play the watchdog in the market. They observe the brand position in the market
and compare it with competitor’s brand and place the report to area sales manager. They also
see that there is no much fluctuation in the supply of Pepsi’s products in the market and the
products are available to consumers with ease especially in the peak season (March to
September). The distributors are also involved in the personal selling. For this they appoint
salesman as per the instructions and guidance given by the company. The company provides the
training facilities to salesman when required by the distributors.

___________________________________________________________________________

Q.9] Explain TATA ( diffrent business unit of TATA ) in the BCG Matrix

Ans.

TATA Group

The Tata Group is a multinational conglomerate company headquartered in Mumbai, India. In

terms of market capitalization and revenues, Tata Group is the largest private corporate group in
India and has been recognized as one of the most respected companies in the world. It has
interests in steel, automobiles, information technology, communication, power, tea and hospitality.
The Tata Group has operations in more than 85 countries across six continents and its
companies export products and services to 80 nations

The Tata Group comprises 114 companies and subsidiaries in seven business sectors.
Companies which form a major part of the group include Tata Steel, Corus Steel, Tata Motors,
Tata Consultancy Services, Tata Technologies, Tata Tea, Titan Industries, Tata Power, Tata
Communications, Tata Teleservices and the Indian (Taj) Hotels. The chairman of the Tata group is
Ratan Tata, who took over from J. R. D. Tata in 1991 And Cyrus Mistry came as a new chairman
of tata sons in 2012 who have the 18.5% partnership in Tata Group.

TATA Steel

the Indian market production of finished steel is increased by 4% to 85 MT in FY14. While Tata
steel is the market leader of Indian finished Steel Inc. with 8.9% market share as per FY14.Tata
Steel’s business in India improved with the company’s net profit growing 67% to ₹2,267 crore.
Tata steel is on the Star position in the BCG matrix because steel inc. market growth is high with
Tata steel’s highest market share. The main reason behind the market leadership of Tata steel is
mainly its standard quality of steel & the low manufacturing cost of steel

Tata Motors

BCG MatrixAs per FY 2014, the growth of automobile industry is so diverse in India. As per the
report of IBEF (India Brand Equity Foundation)

 Passenger Vehicle- 6.05% of fall

 Commercial vehicle- 20.2% fall (17.6% in LCV & 25.3% in HCV)

Tata Motors is on the 3rd position in the Passenger vehicle segment with 10% of Market share
while Maruti Suzuki is leader with 45% of market share.

Tata Motors is the leader in the HCV & LCV (Commercial vehicle) segment with 63% & 59% of
market share respectively.-

Tata Motors is on the Dog position in the Passenger vehicle segment because the market growth
is falling and Tata Motors have only 10% of market share against the competitors.

While in the Commercial Vehicle segment it Tata Motors is on the Cash cows position, due to
great market leadership with low market growth rate. The main competitor of Tata motors in
commercial vehicle segment is Mahindra only with 30% of market share.

Tata teleservices

BCG Matrix India is currently the second-largest telecommunication market and has the third
highest number of internet users in the world. India’s telephone subscriber base reached 933
million in March 2014. So from this statistics provided by IBEF we can say that India is one of the
most growing telecommunication market in the world.

In the Wireless communication segment Bharti Airtel is the market leader with 22.7% of market
share while, while TTS is on 7th position in the market with only 7% of market share.

The market size of wireless communication is of 933 million subscriptions as per March 2014.
Here Tata Telecommunication Service is comes under the Question mark position due to low
market share instead of high growth of industry.

Tata Consultancy Services

BCG Matrix IT-BPM industry is reaching around 118 billion with the growth of 13% in FY14. IT
industry is one of the major driver industries for GDP of India. And the most important thing is that
Indian IT Inc is growing with 55% share in global sourcing market.

TCS is the market leader, with 10.1% of market share In IT-BPM sector. The main advantage of
Tata Consultancy Service is that it has the highest market cap of ₹ 495,930.34 Cr. company in
Indian market irrespective of sector or industry. Here Tata consultancy Services is comes on Star
position due to the leadership of IT Inc. and growth rate of IT Inc. is also very high that it affects
the nation’s GDP.
___________________________________________________________________________

Q.10] Apple is one of the most widely respected & valued brands that have successfully
maintained some of the top most margins in the industry with the high level of brand
loyalty Using the internet find what step the organisation takes for developing a new
product.

Ans.

New product team: a start-up is formed.

Once a new product has been decided on, a team is organized and segregated from the rest of
the company by secrecy agreements and sometimes physical barriers. Sections of the building
may be locked or cordoned off to make room for the teams working on a sensitive new project.
This effectively creates a ‘start-up’ inside the company that is only responsible to the executive
team, freeing them from the reporting structure of a big company.

Apple New Product Process (ANPP).

Once the design of the product has begun, the ANPP is put into action. This is a document that
sets out every step in the product development process of a product in detail. It’s not an original
Apple concept but was first applied at the company during the development of the Macintosh. It
maps out the stages of the creation, who is responsible for completion, who will work on each
stage and when they will be completed.

Products are reviewed every Monday.

The ET (Executive Team) meets every Monday to go over every product that the company has in
process. It is able to accomplish this because Apple has so few products in production at any
given time. Any that do not get a review are rolled over to the next review Monday. This means
that no product is ever more than two-weeks away from a key decision being made.

The EPM mafia.

Once a product begins production, two responsible people are enlisted to bring it to fruition. The
engineering program manager (EPM) and the global supply manager (GSM). The former has
absolute control of the product process and is so powerful that it is referred to as the “EPM
mafia”. Both of these positions are held by executives that spend most of their time in China
overseeing the production process. The supply manager and program manager collaborate, but
not without tension, always making decisions based on ‘what is best for the product’.

Once a product is done, it is designed, built and tested again.

At times there are leaks that display versions of a product like the iPhone that we never see
released. Many times these leaks come from China, where a factory worker has been paid to
hand off a prototype to a blogger or journalist. It turns out that once Apple is done building a
product, it redesigns the product and sends it through the manufacturing process again,
explaining the various versions we may see leaked. This is a 4-6 week process that ends with a
gathering of responsible Apple employees at the factory.
The EPM then takes the beta device back to Cupertino for examination and comments, hopping
right back on a plane to China to oversee the next iteration of the product. This means that many
versions of any given device have been completed, not just partially prototyped. This is an
insanely expensive way of building a new product, but it is the standard at Apple.

The packaging room.

A room in the Marketing building is completely dedicated to device packaging. The security here
is matched only by the sections of the building dedicated to new products and to design. At one
point before a new iPod was launched there was an employee who spent hours every day for
months simply opening the hundreds of box prototypes within in order to experience and refine
the unboxing process.

Apple new product launch is controlled by the Rules of the Road.

An action plan for the product launch is generated, called the Rules of the Road. It’s a top secret
document that lists every significant milestone of a product’s development up until launch. Each
milestone is annotated with a DRI (directly responsible individual) that is in charge of making that
item happen. Losing or revealing this document to the wrong people results in an immediate
firing, as noted in the document itself.

___________________________________________________________________________

Q.11] Take a product that is in its maturity stage ( example laptop tv gas/electric hybrid
vehicle etc ) discuss the pramotion strategy for the product.

Ans.

Pramotion strategy in maturity stage

1. Market Modification

The market modification strategy searches new buyers for the product. A firm can attract new
buyers in three ways:

i. Convert non-users into users

The firm may enlarge the size of its market by inviting non-users to use the product. This may be
achieved by introducing new sales promotional tools or price cuts targeted at the non-users.

ii. Enter into new market segments

This involves search for new market segments that were neglected in the growth period because
they were small in size, had lower growth rates, and provided small profit opportunities. Market
expansion to some extent can be achieved by entering into these new segments.

iii. Win competitor's customers

A firm may launch a promotion campaign targeted at competitor's customers and tempt them to
switch their brand in favor of firm's brand. This can help to get some more buyers for the product.

2. Product Modification

During maturity period, several organizations modify their product to satisfy the needs of
the buyers. Product modification involves the following:

i. Flanking

Manufacturers often re-launch an existing product with flanking that involves adding something
new to the product. For example, Horlicks has brought its original product with extra calcium and
chocolate flavor.

ii. Product revitalization

Manufacturers often add an adjective on the brand name such as plus, super, deluxe, extra and
new to suggest to buyers that something extra has been added on the product. Changing product
features, designs, and packaging is a popular strategy during the maturity period.

3. Marketing Mix Modification

The marketing firm may retain current sales volume by changing one or more components of the
marketing mix.

i. Sales promotion

Marketers change the promotion mix by reducing persuasive advertising and focusing on sales
promotional campaigns targeting both consumers and resellers. Often the firm changes sales
promotion schemes every three months. All promotional efforts during this stage are push-sell
their matured products.

ii. Reminder advertising

Marketers also change the advertising message during this stage of product life cycle. Most of the
advertising themes used during the maturity stage are either to support the sales promotions or
provide reminder communication.

iii. Temporary price reduction

Marketers also temporarily reduce the price of the product for one to three months to push sales.

iv. Permanent price reduction

When other modifications do not work marketers start to cut down the price level permanently to
attract the price-sensitive buyers.

v. Maintain higher volume channels

Marketers reduce the distribution intensity and shrink their networks in this stage of product life
cycle. They try to maintain higher volume cost-effective channels, and withdraw from low-volume
high cost channels. Firms often change their dealers frequently in this stage.
___________________________________________________________________________

Q12) List the two purposes served by service marketing in an organization.

Ans.

Service marketing is the promotion of economic activities by a company to

individuals and business customers. It includes everything from office and car rentals
to wellness treatments. An accounting firm, for example, can market its services to
other companies, big and small.

Marketing plays an important role in establishing relationships between customers

and the organizations offering to the market. It gives us the confidence to want to try
a new product in the market as opposed to situations where the products enter the
market without publicity. This makes the marketing function critical in every
organization irrespective of whether the organization is a profit or non-profit centered.
Marketing shapes the image of the organization, how people associate the
organizations products or services and indeed give people the confidence about their
products or services. 

Service marketing is all about relationships, even more so than other types
of marketing. Effective service marketing is important because, without
it, service providers would not attract and retain customers. Service marketing falls
into two categories: business to business (B2B) and business to consumer (B2C).

Services marketing is a specialized branch of marketing. Services marketing emerged

as a separate field of study in the early 1980s, following the recognition that the
unique characteristics of services required different strategies compared with the
marketing of physical goods.

Services marketing typically refers to both business to consumer (B2C) and business-

to-business (B2B) services, and includes marketing of services such
as telecommunications services, financial services all types of hospitality, tourism
leisure and entertainment services, car rental services, health care services
and professional services and trade services. Service marketers often use an
expanded marketing mix which consists of the seven Ps product, price, place,
promotion, people, physical evidence and process. A contemporary approach, known
as service-dominant logic, argues that the demarcation between products and
services that persisted throughout the 20th century was artificial and has obscured
that everyone sells service. The S-D logic approach is changing the way that
marketers understand value-creation and is changing concepts of the consumer's role
in service delivery processes.

Importance of Marketing of Services

Given the intangibility of services, marketing them becomes a particularly challenging

and yet extremely important task.

 A key differentiator: Due to the increasing homogeneity in product offerings,

the attendant services provided are emerging as a key differentiator in the
mind of the consumers. E.g.: In case of two fast food chains serving a similar
product (Pizza Hut and Domino’s), more than the product it is the service
 quality that distinguishes the two brands from each other. Hence, marketers
can leverage on the service offering to differentiate them from the competition
and attract consumers.

 Importance of relationships: Relationships are a key factor when it comes to

the marketing of services. Since the product is intangible, a large part of the
customers’ buying decision will depend on the degree to which he trusts the
seller. Hence, the need to listen to the needs of the customer and fulfill them
through the appropriate service offering and build a long lasting relationship
which would lead to repeat sales and positive word of mouth.

 Customer Retention: Given today’s highly competitive scenario where multiple

providers are vying for a limited pool of customers, retaining customers is
even more important than attracting new ones. Since services are usually
generated and consumed at the same time, they actually involve the customer
in service delivery process by taking into consideration his requirements and
feedback. Thus they offer greater scope for customization according to
customer requirements thus offering increased satisfaction leading to higher
customer retention.

Some main point if service marketing:

People: People are a defining factor in a service delivery process, since a service is

inseparable from the person providing it. Thus, a restaurant is known as much for its
food as for the service provided by its staff. The same is true of banks and
department stores. Consequently, customer service training for staff has become a
top priority for many organizations today.

Process: The process of service delivery is crucial since it ensures that the same
standard of service is repeatedly delivered to the customers. Therefore, most
companies have a service blue print which provides the details of the service delivery
process, often going down to even defining the service script and the greeting
phrases to be used by the service staff.

Physical Evidence: Since services are intangible in nature most service providers

strive to incorporate certain tangible elements into their offering to enhance customer
experience. Thus, there are hair salons that have well designed waiting areas often
with magazines and plush sofas for patrons to read and relax while they await their
turn. Similarly, restaurants invest heavily in their interior design and decorations to
offer a tangible and unique experience to their guests.

This some of the main point of the service marketing and the purposed of the service
marketing.

_____________________________________________________________________________
Q.13] Take example of an organisation & find out which method it has adopted to
reposition its brand in market.

Ans.

Tata Motors Repositioning strategy

Positioning often has very little to do with the product, it can be changed without necessarily
changing the product. So when a positioning fails, a product may be repositioned— given a new
identify. Often, products are repositioned to target a different audience. According to Jack Trout
(2010). Repositioning is how we adjust perceptions whether the perceptions are about you or
about your competition.

The road ahead for Tata Motor’s continues to be challenging, yet full of opportunities but Tata
Motor’s is committed to improve its customer-centricity, to better understand customer needs and
translate them into exciting and appropriate products for their markets in order to increase the
"perceived value" of its aspirational venture Nano .After four years of it commercial launch Tata
Nano, decided to create a new niche for itself in august 2013 , by managing to move away from
tag like the “world’s cheapest car to "smart city car". Thus they are repositioning Tata Nano as a
"smart city car" by focusing on the youth to rejuvenate its image.

The failure of Tata Nano was because of its positioning strategy but this time Tata Motor’s has
come up with the positioning strategies which are relevant in the automobile industry. Saloni
Pawan Diwan & B. S. Bodla (2011) has identified eight positioning strategies/factors in the
automobile industry which are considered important by the customers in India.

Visual artistic and basic features positioning strategy

Tata Motor’s have repositioned Tata Nano by boasting of some “intelligent features” like power
steering option, improved interior and exterior of the car and improved fuel efficiency and
additional features like remote keyless entry, twin glove boxes, and a four-speaker Amphi Stream
music system with Bluetooth, USB and auxiliary connectivity. The new Nano is available with new
personalization kits- Jet, Alpha, Remix, and Peach. Focusing on the youth to rejuvenate its image
because, its buyer profile has been getting younger since the launch of the 2012 edition. About
45% of the buyers are younger than 35 years. Thus moving away from the concept of being an
affordable four-wheeler. With the upgrades, Tata Motor’s is trying to increase the value for money
proposition it offers to customers.

Promotional campaign positioning strategy

Considering the young buyers Tata Nano have this time ensured that the Promotional campaign
is relevant to the target market,” Tata Nano’s new campaign called ‘celebrate awesomeness’ is
becoming popular among youngsters. The latest TVC has crossed 5 million views on YouTube till
September 2013. The latest television commercial for the Nano features young celebrities such
as model Sarah Jane Dias, fashion designer Masaba Gupta and magician Ugesh Sarkar and a
racy soundtrack. The new edition Tata Nano's colourful TV commercial on 'Celebrate
Awesomeness' has crossed 5 million views on YouTube in less than 30 days - the highest for any
Automotive brand TVC in India, till date. The video has been an instant hit, bringing in more than
17,000 post likes and over 700 comments from the Nano fan base. In the new TVC, the brand
has showcased the colourful world of Nano and young achievers from different genres who share
the brand's unique attitude - to do things bigger, better, and differently- whether it's the gutsy
Masaba Gupta whose quirky pop prints stand out from the crowd, the beauty-pageant-winner-
turned-entrepreneur-turned-actor Sarah Jane, or the riveting street magician Ugesh Sarkar,
everyone embodies the spirit of 'Awesomeness'. All throughout, it carried the jingle

celebrating the awesomeness factor, almost making the film like a complete music album. There
are plans to feature automobile designer Jagpreet Singh and Formula One racer Narain
Karthikeyan in future ads, as well as a series of brand marketing events around them. For
potential buyers in smaller cities, towns and villages, Tata Motor’s has adopted a multi-pronged
approach. In the villages and smaller towns, the company plans to use devices such as floats to
communicate the basic values of the Nano brand such as fuel efficiency and total cost of
ownership while in metros it would continue to engage youngsters aspiring for a car that can be
customized for colour and features.

Although Tata Motor’s have developed proper repositioning strategies this time that will make the
product cater to a larger number of customer segments. Changing perceptions of consumers is
not so easy and it will take time .And Jack Trout, one of the world’s leading international
marketing strategists has given the Tata Motor’s unsolicited advice to just ‘kill the brand’. So will
the repositioning transform the Tata Nano's fortunes? - Is there a future for the product? will be
interesting to see in the future

CONCLUSION

The automobile industry has gathered immense pace in India in the last few years and the Indian
passenger car market more specifically small car market is far from being saturated leaving
ample opportunity for volume growth .Tata Motor’s tried to grab this opportunity with Tata Nano
and tried to position Tata Nano as an affordable car but regrettably got wrongly positioned as
word cheapest car. Positioning is the key to selling a product. Positioning helps create an image
for a product or brand or even company. How the potential customers perceive a product is very
important. This is where Tata Motor’s failed miserably. Nano's positioning as a "cheap" car killed
the aspirational element in the car and the performance of the model has been terribly
underwhelming over the years. Although Tata Motor’s tried to correct its 4Ps it could not help Tata
Nano to get the success. So finally after four years of it commercial launch, understanding the
inevitability of positioning management repositioned Tata Nano as a "Smart City Car" by focusing
on the youth to rejuvenate its image.

___________________________________________________________________________

Q.14] Explain ITC and create a chart of extensions that it has made in its business under a
particular brand

Ans.
ITC was formed on August 24, 1910 under the name Imperial Tobacco Company of India Limited.
Later the name of the Company was changed from Imperial Tobacco Company of India Limited to
India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. ITC contains a wide
range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging,
Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education &
Stationery and Personal Care. Finally the company changed its name to 'ITC Limited’ on
September 2001

The earlier decades of the Company's existence were mainly depending on growth and
consolidation of the Cigarettes and Leaf Tobacco businesses, In the Seventies it started to
transform into a corporate. In 1975 the Company launched its Hotels business with the
acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The
objective of ITC's entry into the hotels business was rooted in the concept of creating value for
the nation. In 1979, ITC entered the Paperboard business by promoting ITC Bhadrachalam
Paperboards Limited, which today has become the market leader in India.

In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since
inception, its shares have been held by ITC, British American Tobacco and various independent
shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and
its name was changed to Surya Nepal Private Limited (Surya Nepal). Also in 1990, leveraging its
agrisourcing competency, ITC set up the Agri Business Division for export of agri-commodities.
The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged
eChoupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10
states covering over 4 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was
inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now
operational in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.

In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch
of Expressions range of greeting cards. A line of premium range of notebooks under brand
“Paperkraft” was launched in 2002. To augment its offering and to reach a wider student
population, the popular range of notebooks was launched under brand “Classmate” in 2003.
“Classmate” over the years has grown to become India’s largest notebook brand and has also
increased its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw the
launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the
“Classmate” brand. In 2008, ITC repositioned the business as the Education and Stationery
Products Business and launched India's first environment friendly premium business paper under
the “Paperkraft” Brand. “Paperkraft” offers a diverse portfolio in the premium executive stationery
and office consumables segment. Paperkraft entered new categories in the office consumable
segment with the launch of Textliners, Permanent Ink Markers and White Board Markers in 2009.

In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value
chain found yet another expression in the Safety Matches initiative. ITC now markets popular
safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro. ITC's foray into the
marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with
the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep across a
range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and
Nagchampa. ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath &
body care products for men and women in July 2005. Continuing with its tradition of bringing
world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium
range of Shampoos, Shower Gels and Soaps in September, October and December 2007
respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the
mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of
soaps in February and Vivel range of shampoos in June 2008.

___________________________________________________________________________

Q.15] Look for a product that has been launched in the market recently make a note of the
price that has been fixed for this product try to find out the factor that led to fixing the
price of the product at the given level also comment what would happen to production
demand if the price is increased on demand

Ans.

Following factors leading to fix product price

(i) Cost of Production:

Cost of production is the main component of price. No company can sell its product or services at
less than the cost of production. Thus, before price fixation, it is necessary to compile data
relating to the cost of production There are two types of cost: (i) Fixed Cost (e.g., Rent of building,
Salary of permanent staff, etc.) (ii) Variable Cost (e.g., Material, Labour, etc.). At least the price
should be able to recover the variable cost as the fixed cost is incurred whether the production
takes place or not.

(ii) Demand for Product:

Intensive study of demand for product and services in the market be undertaken before price
fixation. If demand is relatively more than supply, higher price can be fixed.

(iii) Price of Competing Firms:

It is necessary to take into consideration prices of the products of the competing firms prior to
fixing the price. In case of cut-throat competition it is desirable to keep prices low.

(iv) Purchasing Power of Customers:

What are the purchasing power of the customers and at what price and how much they can
purchase? It should also be taken into consideration.

(v) Government Regulation:

If the price of the commodity and services is to be fixed as per the regulation of the government,

(vi) Objective:

Usually, at the time of price fixation a certain amount of profit is added to the cost of production. If
company’s objective is to earn higher profit it may add higher amount of it.

(vii) Marketing Method Used:

Price is also influenced by the marketing method used by the company, e.g., commission which is
to be paid to the middlemen for sale of the goods is also added to the price. Similarly, if the
customers are to be provided “after sale service” facility, then those expenses are also added to
the price.

If the price of a resource used to produce the product increases, this will increase the
costs of production and the producer will no longer be willing to offer the same quantity at
the same price. They will want a higher price to cover the higher costs.

If the price decreases, quantity demanded increases.

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Q.14]