Birla Institute of Technology & Science, Pilani

Work-Integrated Learning Programmes Division

Second Semester 2021-2022

Mid-Semester Test
(EC-2 Regular)

Course No. : BA ZC411

Course Title : MARKETING
Nature of Exam : Open Book
Weightage : 30% No. of Pages =5
Duration : 2 Hours No. of Questions = 3
Date of Exam : Saturday, 12/03/2022 (AN)
Note:
1. Please follow all the Instructions to Candidates given on the cover page of the answer book.
2. All parts of a question should be answered consecutively. Each answer should start from a fresh page.
3. Assumptions made if any, should be stated clearly at the beginning of your answer.

Q.1 The Chief Marketing Officer of ABC Ltd., a firm manufacturing color televisions, was
addressing the sales force. The company was beginning the new financial year, and the CMO
decided to discuss the targets for the coming year with his sales representatives.
“This year, we have decided to innovate on our goals. Unlike other years, where goals used
to be purely sales numbers, this time they would cover several other factors to make it more
representative.”
He gave a sly smile to the assembled group of sales persons.
“Don’t you think you would be able to escape your sales numbers? They would always be
there.”
“Apart from that, this year, you would have many other targets.”
“We shall now judge you on profitability. All sales executives would be ranked based on the
profitability of the products they sell.”
“We shall also check the brand recall of the brand at all your regions. The company is hiring
a brand audit firm to inspect how many prospective customers in your respective areas
remember our brand. Your incentives would be linked to brand recall.
The sales executives looked at one another.
“But Sir, we are not responsible for brand recall. That is determined by advertising and other
activities that are controlled by the head office. We have no role to play.”
“Head office, Head office. For far too long, you people have gotten away with blaming the
head office. Please stay accountable for your areas. This has been discussed amongst us in
the top management. There is no escape now.”
“Sir, I handle the Raipur branch where the market is largely rural. The profitability goals
would be hard to meet. I think I will not be able to meet the guys who are selling in metro
cities like Delhi or Mumbai.”
“Are you not taking a salary? Is the guy in Delhi or Mumbai being paid in separate currency?
If there is no profit, let us close down the business in Raipur.”
The sales person of Raipur thought it was better to be silent. Discretion is the better part of
valor.
“We shall also check walk-ins to our dealer showrooms. We suspect we have some bad
apple dealers who try to convert our customers to brands of their (the dealer’s) choice.
These dealers think they are smart. The customer comes to their shops as a result of our
 advertisements, and they think nothing of converting them to the competitor’s brand
because of their more margin in it. We have to stop this.”
This time the Head of Sales objected.
“Sir, it is not always about dishonesty. Smart dealers always size up customers. If the
customer does not seem to be well off, they pitch cheaper products. This is difficult to
quantify.”
“ I don’t know. Your people are not performing, and the management is worried. Here are
the sales targets for the year. Please sit with your sales representatives and work out how
you would achieve them.”
The head of sales looked at the target sheet.
“These are twice last year’s numbers. Do you think the market is doubling every year?” the
sales head replied incredulously.

a. What are SMART goals? (2)

Specific means Simple, sensible and significant

Measurable means motivating and meaningful

Achievable means attainable and agreed

Relevant means reasonable, realistic, resourced and result based

Time bound means time bound, time limit, time sensitive

b. Is the goal setting exercise mentioned in the case appear conform to the principle of
smart goals? Critically evaluate. (8)

Since the company is already established one, the customer base of company is
already established and for considering the profitability of the company. The
company has to make some SMART goals.

Company has to set some sensible targets which can be measurable and attainable
for the employees of the company.

The employees must be reliable in whose hands the command of the company is
given and time limit must be specified for the work alloted to them.

Any target which is set by the company must be time limit based and the employees
are to be fully motivated to maintain the customer base and increase profitability at
the same time.

Q.2 It was New Year day. Vasisth and Mohan had just concluded a puja in their office at
Gurugram, suburb of New Delhi. It had been a hectic new year. After years of hard work, they
finally seemed to be in sight of success when a leading investment fund had agreed to extend
a capital of U$ 10 million to their firm. In return the fund had acquired 25% equity in their
firm. The thought of being owners of a U$ 40 million company was exhilarating. But there
were challenges ahead of them. The fund management had set forth some conditions the
most important of which was a plan to scale the business up.
Vashisth and Mohan were class mates at a leading IIT. After a few years of work in the
corporate sector, they had been bitten by the entrepreneurial bug. After some deliberation
they had decided to start a coaching centre to train people for the competitive Joint
Entrance Exam for admission into the prestigious Indian Institutes of Technology. Every year
over 15 lakh students applied for admission there and the success rate was less than 1:200.
There was a reason why they had chosen this line of work. Both of them were able teachers
and were passionate about science. Both of them had been efficient students and knew of
methods that would help pupils master their lessons with ease. Finally, they had though
coaching was an asset-light business which required relatively less investment which they
could fund from their savings. They had started with a small one room outlet in a mall which
doubled as their coaching centre and office. Initially they did not hire teachers, preferring to
teach themselves. Their business had attracted students and in a couple of years their
coaching centre was running to full capacity. By the fourth year they had over a thousand
students. They employed 10 teachers and had taken on rent most of the available space
inside the mall which had come to be known by their name as the Master Class mall.
They were now planning to have a nationwide launch. On the first phase, they wanted to
launch their coaching centre across Delhi following it up with opening up outlets in major
cities across the country.
The top management of the investment fund had appreciated their success. In a meeting,
Mr. Bhushan, the Managing Director of the fund had said “I am happy to meet two energetic
and competent educators and am glad to be in a position to help you out with capital. But
you must note that scaling up a business is not the same as setting one up. This project
would challenge your organizing skills. You may consider engaging the services of a
consulting firm to help you out.”
Vashisth and Mohan paid heed to Mr. Bhushan’s advice. Their conversation with the
consultants of a leading firm went as follows.
Consultant: First of all you need to map out the core business processes of your firm. The
structure, systems and other aspects of the organization would be built around them.
Vashisht: Could you bit a little more elaborate? What do you mean by “core business
processes”?
Consultant: Most businesses are characterized by five core processes. They are market
sensing, offering realization, customer acquisition, customer relationship and fulfilment
management. You got to think through the different activities associated with your line of
work and place them under these headings. We shall take up from there in the next
meeting.
As they were returning to their office, Vashisth and Mohan found themselves intensely
discussing the different activities associated with the coaching businesses.
Mohan: Let us start with the obvious. We teach. We have developed a curriculum. We take
tests. We give academic feedback to our students. Undoubtedly they constitute core
processes of our business. I wonder under which heading we need put these.
Vashisth: These are all academic activities. We also research question paper trends. We
search for videos on the net to make our classes interesting. We have equipped all our class
rooms with personal computers and projectors. I am sure all of them would come under one
among the five business processes mentioned by the consultant.
Mohan: That is true. We have also built our web site and have engaged the services of a
digital marketing firm. We also take out ads in newspapers, drop newspaper inserts at
admission time.
Vashisth: Even Vanitha is also doing a good job. We must appreciate her work.
 Vanitha was Mohan’s wife. She had taken some time off from her corporate career to focus
on her family. But after some time she had got bored and joined Master class. She had
undertaken the task of in interacting with parents who were interested in enrolling their
wards in master class. On her initiative the firm regularly held monthly Parent-Teacher
meetings in their premises. She had set up a small IT infrastructure that enabled them to
send regular SMS and mailers to parents updating them about their children’s attendances
and academic performances. She had also initiated innovative programs like a math camp at
a nearby hill station. The students had appreciated the break and the scenic surrounding had
helped them focus on their studies.
Mohan smiled while acknowledging the compliment meant for his spouse. “We really do a
lot of work. I never really thought of that. Let us put them up in the tabular format
suggested by the consultant. What do you say Vashisth?”
“Sure.” Vashisth replied before turning a little pensive.
“ I wonder what we do on market sensing. I think that particular process has been left
unattended. Let us address that.” Vashishth added.
Prepare a table outlining the core business processes of Master Class. What market sensing
activities the coaching firm should focus on? (10)

The core business process of  Process

masterclass
Product development  foundational process providing
opportunity in maximising the value
 sales process  correlating the sales and performances
which is much most important
 procurement  involving selecting vendors and
establishing payment terms and strategic
weighting
 client onboarding  client heavily dependent on the industry
and the business models
 customer support  transition from sales to customer
success
 employee onboarding  focusing on managing the process in
keeping the business
 content promotion  reaching potential customers from all
over the world
 financial planning  importance of thorough planning UN
preparation by financial managing
 accounting management  responsible on companies accounts and
legal complaint reports
 process improvement  continuous creation of refining adaptive
products of business
Q.3 Mr. Jayesh Parikh, the CMD of Bharat Paints Company, talked to Mr. Bhaskar Karmakar, the
chief of Karmakar Brothers, a leading ad agency in the country. Bharat Paints has been one of
the top paint suppliers of the country, ranging from painting solutions for consumer
households to automobiles and sophisticated industrial buildings. At the moment, they were
immersed in a discussion about an effective ad campaign to increase the consumption of
paints in the consumer sector.
JP: It looks like the paint business has entered a recessionary phase. The economy is caught
in a rut that has affected the construction sector. Consumer income is depressed. Banks are
not willing to lend money and had kept the interest rates at a high level. People are not
buying houses. Our only hope for growth lies in replacement demand.
BK: That is true, Mr. Parikh. These are bad times for most of us. Even we are not getting
many ad campaigns to run. We need ways to stimulate demand if we need to keep out
home fires burning. Mr. Karmakar smiled.
BK (continued): The replacement demand is a tricky business, though. There are substantial
regional and cultural variations associated with the painting of a house. In many parts of the
country, people associate their homes with their personal and family fortunes. For example,
in North India, people paint their houses around Diwali as they light up their houses for the
festival. It is believed Laxmi, the Goddess of prosperity, visit their homes on that day and
would bless them if she found them to be tidy. Otherwise, she would ignore them, thus
consigning them to a period of bad luck.
JP: Well, apart from that, there is a necessary variation in house owners' frequency of
repainting their houses. Some do it every year. Others don't think of painting their homes for
years. One can probably run a campaign urging the latter to paint more frequently.
BK: That sounds like a good idea. We can always do a campaign on the theme of how people
who live in dull, colorless houses tend to be less imaginative and hence less successful. Even
though we don't say it overtly, this would match the widespread belief that Goddess Laxmi
deserts people who own shabby houses.
JP: That sounds a little negative, No?
BK: Well, sometimes fear works as a better motivator. We can always run a campaign saying
the opposite. People who live in shining houses are generally more successful if you are
worried about the negative impact of the first campaign.
JP (laughs out loudly): Or is it because they can afford it? More successful people generally
are likely to repaint their houses more frequently. But of course, that does not matter as far
as our campaign is concerned. What is more important is the perception we create.
BK: We can also take a cue from the car business. Many change their cars frequently to
make a new statement. We can create a campaign urging people to change the look of their
houses more often to enjoy the feeling of living in a "new house" each time they repaint
theirs. A leading paint company once ran a memorable campaign, "Har Ghar Kuch Kehta
Hai." ("Every house has a story to tell.") People express themselves through their houses.
JP: That is pretty interesting. When I pass by predominantly Muslim neighborhoods, I come
across many houses painted green. These days, as Hindutva gains ground, we also see a rise
in the demand for saffron color. Typically, when older people make houses, they prefer to
use white paint. There is undoubtedly something about color that links with the
psychographic profile of the user.
BK: Well, Mr. Parikh. All this focus on the replacement market is fine. But don't you think this
would go against the spirit of the campaigns you have run so far? For a long, we have talked
about the durable nature of our paints. We even ran the "Kal, Aaj Aur Kal" (Yesterday,
 Today, and Tomorrow) campaign, where we focused on how our colors have lasted across
generations. Now we are asking the customer to replace the paint fast.
JP: Well, that is an interesting point. The point to be noted is that our paints have not ceased
to be durable. They continue to be so. We are asking the customer to change colors so that
he feels good about it. The campaign should focus on youth, newness while taking care not
to convey the impression that our paints are not lasting as long as before. The fact is they
are the same paint with the same life.
BK: Of course, as always, we shall also run a complementary campaign with the masons, the
painters and the building contractors to convince customers to repaint their homes more
frequently in keeping with the message of our main campaign. We may also consider loyalty
schemes to ensure the customer sticks to buying our range of paints only.
1. How does the case illustrate the influence of such groups (direct and indirect reference
groups) on the behaviour of consumer’s while considering the purchases of paints? (5)
2. How do you think the company should plan its marketing mix (the four Ps) based on the
influence of reference groups. (5)

a) Direct and indirect reference group:

 Direct reference groups are small set people with you communicate
regularly, it is of primary (e.g.- Family and friends) and secondary (e.g.,
Society).

 Indirect reference this an individual or group like film stars, cricket player,
Hockey Player, etc. We can identify them but do not have personal
communication.

How they influence consumers in the purchase decisions?

Direct reference means friends and family members have an important role
in purchase decisions. Individual values and culture are inculcated by family
and friends. Society also plays an important role in consumer purchase
decisions because everyone tries to maintain social status through purchase.

When role models and experts have endorsed the brand, the followers also
made purchase decisions as they have trust in their idols and they want to
look like them, for e.g., cosmetics advertisement by female film stars,
consumers follow the stars and make a purchase decision.

b) In this case, they are planning to use indirect reference groups such as the
Mason, the painter, and the building contractors to convince the customer to
repaint the home frequently. They can influence the customer as they are
experts in this field. Customers can make a purchase decision if experts
convince them. Also, the company is planning to push products in a festival
season like Diwali, as in this time people used to renovate the home in the
belief of Goddess Laxmi visit their home on that day. The company is
willing to catch this society's widespread belief to promote the products.

c)  The company should effectively use the marketing mix (Price, product,
promotion, and place) to get desired revenue. The price of the paint should
be kept affordable; there must be rewards and discounts during the festival
season. The price should be affordable where a direct reference group can
recommend it to his friends and family.

The product must have good quality, attractive reusable packaging material.
If the quality of the product is good there will be word-of-mouth marketing
of the product.

 The product promotion can be through Television advertisement using

indirect reference groups where filmstar can endorse the product. The
ambassador of the advertisement must depend upon the region for e.g. in
South India audience follows more to regional actors/actresses.

In this way, we can use direct and indirect reference groups in the marketing
mix.  

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