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ASSIGNMENT-1
Q.1
What do you understand by the term Strategy in the context of Business Management and Policy? And what are the stages in the formulation of a Strategy?
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A strategy is an operational tool to achieve the goals, and thus, the corporate mission. Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives. A company may view downsizing as a strategy in a competitive market to render cost-effective services. Thus, strategy provides a framework to guide thinking and action. Strategies are very much useful in organizations for guiding, planning and control. Strategy is a way of life both at the macro as well as micro levels for everyone, whether it is a nation or a company. To win over in a given complex situation, the organizations, even transnationals adopt strategies. They make changes, if necessary, even to their global strategies. An individual company may formulate its own strategy to bring out the desired results. The eventual success of the organization depends upon strategy formulation and implementation. The recently initiated moves such as globalization, privatization and liberalization are strategies to attain a globally competitive economy. Business management must focus on following issues a. Vision- For proper growth of the company. b. Mission What the company wants to achieve. c. Goals To achieve the above mission. d. Objectives To achieve the set goals e. Strategies To achieve the above objectives f. Policies To control strategies
g. Programmes For implementation of objectives h. The above list outlines some of the key issues at every stage of action illustrating how:
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d. Strategy variations e. Strategic choice f. Allocation of resources and formulation of organizational structure
g. Formulation of plans, policies, programmes and administration b. h) Evaluation and control Q.2
What, in brief, are the types of Strategic Alliances and the purpose of each? Supplement your answer with one real life example of each.
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What is the chief purpose of a Business Continuity Plan and what are its components for effective implementation. Explain in a sentence or two as to how it is different from a Business Plan.
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The Business Continuity Plan is a tool to allow organizations to consider the factors and steps necessary to prepare for a crisis (disaster or emergency) so that it can manage and survive the crisis and take all appropriate actions to help ensure the organizations continued viability. The advisory portion of the plan is divided into two parts: Planning process: It provides step-by-step Business Continuity Plan preparation and activation guidance, including readiness, prevention, response, and recovery/ resumption. Implementation and maintenance: It gives the details of tasks required for the Business Continuity Plan to be maintained as a living document, changing and growing with the
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2.
3.
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Difference between a Business plan & Business continuity Plan a. A Business plan is a detailed description of how an organisation intends to produce, market and sale a product or service. A Business continuity plan is an ongoing process supported by senior management and funded to ensure that the necessary steps are taken to identify the impact of potential losses, maintain viable recovery strategies and plans, and ensure the continuity of operations through personnel training, plan ,testing and maintenance. A Business continuity plan is a tool which allows organisations to consider the factors and steps necessary to prepare for a crisis.(disaster or emergency). Whereas a business plan is not prepared for such type of disaster or emergency. In a business continuity plan, a necessary Administrative structure is put in place to effectively deal with crisis management, whereas,in a business plan, no such administrative structure is available.
b.
c.
Q.5
Take any three examples of the components of a Decision Support System and explain how they help decision making
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Following are the three components of a Decision Support System 1. Annual Budget: It is really a business plan. The budget allocates amounts of money to every activity and/or department of the firm. As time passes, the actual expenditures are compared to the budget in a feedback loop. During the year, or at the end of the fiscal year, the firm generates its financial statements: the income statement, the balance sheet, the cash flow statement. When putting together, these four documents are the formal edifice of the firms finances. However, they can not serve as day-to-day guides to the General Manager. 2. Daily Financial Statements: The Manager should have access to continuously updated statements of income, cash flow, and a balance sheet. The most important statement is that of
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A decision system has great impact on the profits of the company. It forces the management to rationalize the depreciation, inventory and inflation policies. It warns the management against impending crises and problems in the company. It specially helps in following areas: a. The management knows exactly how much credit it could take, for how long (for which
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Name and explain any three ways in which a Companys CSR can be expressed.
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CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis as they are increasingly aware that responsible behaviour leads to sustainable business success. CSR is also about managing change at company level in a socially responsible manner. This happens when a company seeks to set the trade-offs between the requirements and the needs of the various stakeholders into a balance, which is acceptable to all parties. If companies succeed in managing change in a socially responsible manner, this will have a positive impact at the macroeconomic level. Following are the different ways in which company's CSR can be expressed. 1. Employment and Social Affairs Policy
Within a business CSR relates to quality employment, life-long learning, information, consultation and participation of workers, equal opportunities, integration of people with disabilities anticipation of industrial change and restructuring. Social dialogue is seen as a powerful instrument to address employment-related issues. Employment and social policy integrates the principles of CSR, in particular, through the European Employment Strategy, an initiative on socially responsible restructuring, the European Social Inclusion Strategy, initiatives to promote equality and diversity in the workplace, the EU Disability
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Only competitive and profitable enterprises are able to make a long-term contribution to sustainable development by generating wealth and jobs without compromising the social and environmental needs of society. In fact, only profitable firms are sustainable and have better chances to adopt/develop responsible practices. The role of enterprise policy is to help create a business objective of becoming the worlds most dynamic entrepreneurship and a sustainable economic growth. approach to sustainable development, which maximises and environmental dimensions. 3. Consumer Policy environment, which supports the Lisbon knowledge-driven economy, supports Its objective is to ensure a balanced synergies between its economic, social
CSR has partly evolved in response to consumer demands and expectations. Consumers, in their purchasing behaviour, increasingly require information and reassurance that their wider interests, such as environmental and social concerns, are being taken into account. Consumers and their representative organisations have an important role to play in the evolution of CSR. If CSR is therefore to continue to serve its purpose, strong lines of communication between enterprises and consumers need to be created.
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STRATEGIC MANAGEMENT & BUSINESS POLICY STRATEGIC MANAGEMENT & BUSINESS POLICY
(MB-0052)
ASSIGNMENT-2 Q.1 Having formulated a Business Strategy, what are the steps in its implementation? Explain each in a sentence or two. A strategy is an operational tool to achieve the goals, and thus, the corporate mission. Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives. A company may view downsizing as a strategy in a competitive market to render cost-effective services. Thus, strategy provides a framework to guide thinking and action. Strategies are very much useful in organizations for guiding, planning and control. Strategy is a way of life both at the macro as well as micro levels for everyone, whether it is a nation or a company. To win over in a given complex situation, the organizations, even trans-nationals adopt strategies. They make changes, if necessary, even to their global strategies. An individual company may formulate its own strategy to bring out the desired results. The eventual success of the organization depends upon strategy formulation and implementation. Strategy refers to the course of action desired to achieve the objectives of the enterprise. Formulation, together with its implementation, constitutes an integral part of the management activity. Managers use strategies for different purposes such as to overcome competition, to increase sales, to increase production, to motivate the employees to provide their best, and so on. Implementation of a strategy is a crucial task as the formulation of it. There may be a lot of resistance during the implementation process. It is necessary for the manager to be very tactful to involve the members of his group in the formulation of strategy to facilitate the implementation process. Following are the steps for implementing the business strategy 1. Identification of mission and objectives 2. Environment scanning 3. Generic strategy alternatives 4. Strategy variations 5. Strategic choice
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The implementation of plans and policies is designed in accordance with the strategy chosen. The firm creates plans and policies to guide managerial performance, and these make the chosen strategies work. The corporate success lies ultimately in the ability to convert corporate strategy into plans and policies that are compatible and workable.
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2. Successful Implementation And Maintenance - details those tasks required for the Business Continuity Plan to be maintained as a living document, changing and growing with the organization and remaining relevant and executable. The various steps involved are: i. ii. iii. iv. Educate and Train Test the BCP Develop BCP Review Schedule Develop BCP Maintenance Schedule
In order to use the Business Continuity Plan to manage and recover from the crisis, the following checklists on the basis of the above advisory portion of the guideline needs to be checked and necessary requirements as per the same, needs to be kept in ready mode for immediate applications. Accountability: 1. 2. Does your organizations policy include a definition of crisis? Has the person responsible for critical systems and business processes been identified? 3. Has a BCP Team been appointed, and does it include senior business function leaders? 4. 5. Has the BCP been communicated throughout the organization? Has a person been assigned with the responsibility to update the BCP?
Risk Assessment 1. 2. Has your organization conducted a Risk Assessment? Have the types of risks that may impact your organization been identified and
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Strategic Plans 1. Have methods to mitigate the risks identified in the Business Impact Analysis and Risk Assessment been identified? Have plans and procedures to respond to any incident been developed? Have strategies that address short and long term business interruptions been selected? Are the strategies attainable, tested, and cost effective?
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Compliance with Corporate Policy & Mitigation Strategies 1. 2. Have compliance audits been conducted to enforce BCP policy and procedures? Have the systems and resources that will contribute to the mitigation process been identified, including personnel, facilities, technology, and equipment? Have the systems and resources been monitored to ensure they will be available when needed?
3.
Avoidance, Deterrence, and Detection 1. Are employees motivated to be responsible for avoidance and deterrence and
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3. 4.
Response: 1.
Will the response program recognize when a crisis occurs and provide some level of response? Have the danger signals been identified that indicate a crisis is imminent? Have personnel been trained to observe warning signs of an imminent crisis? Has a notification system been put in place, including redundant systems? Is the notification contact list complete and up to date?
2. 3. 4. 5.
Assess the Situation 1. Has an assessment process to address the severity and impact of the crisis been developed? Has the responsibility for declaring a crisis, with first and second alternates, been assigned?
2.
Declare a Crisis 1. 2. 3. 4. 5. Have the criteria been established for when a crisis should be declared? Has the responsibility for declaring a crisis been clearly defined and assigned? Has an alert network for BCP Team members and employees been established? Is it ensured that there is an alternate means of warning if the alert network fails? Have the activities that will be implemented in event of a crisis been identified, including notification, evacuation, relocation, alternate site activation, team deployment, operational changes, etc?
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Communications 1. 2. 3. 4. Has a crisis communications strategy been developed? Are communications timely, honest, and objective? Are communications with all employees occurring at approximately the same time? Are regular updates provided, including notification of when the next update will be issued? Has a primary spokesperson and back-up spokespersons been designated who will manage and disseminate crisis communications to the media and others?
5.
Resource Management Logistics 1. Has a designated Crisis Management Center been identified, and does it have necessary life support functions, including uninterruptible power supply and communications equipment? Have alternate worksites for business resumption and recovery been identified? Have critical and vital records been stored at an offsite storage facility? How long can each business function operate effectively without normal data input storage processes? What must be done to restore data to the same previous point in time within the recovery time objective? Can any alternate data storage processes be used, after the initial data recovery, to speed the forward recovery to the present time?
2. 3. 4.
5.
6.
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Recovery and resumption 1. Damage and Impact Assessment, Process Resumption, and Return to Normal Operations Has a damage assessment been performed as soon as possible? Has the Damage Assessment Team been mobilized to the site? Has business process recovery been prioritized to recover the most critical business processes first? Is the schedule of the processes to be restored in accordance with the prioritization schedule? Is there documentation of when the processes were resumed? Has the organization returned to normal operations? Has the decision to return to normal operations been documented and communicated?
2. 3. 4.
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6. 7. 8.
The preparation and readiness of the resources as per the above checklists on the basis of the Business Continuity Plan helps us to manage and recover from the crisis in a successful manner. Q.3 What are the main components of Business Plan, explaining the role of each in the Plan?
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2. Company and Product Description: In this component one should provide type of business, reason of creating business unit, referencing the goal and attach references of business plan. Product or Service-Focus on the feature that distinguishes from rest of market and what will attract consumers to your product or service. Price-Provide realistic price estimate and discuss the rationale behind that price. Describe where this price positions you in the market place: at the high end, low end or in the middle of the existing range for a similar product or service. Place-Describe the location and its advantages where you will produce or distribute your product or provide your service.
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3. Market Description: A key composition of the operation of your business will be your sales and marketing strategy, so one must describe how you will inform your target market about your product or service and how you will convince customer to purchase. Production Description:-Describe the steps from raw material to finished goods, packaged and ready for distribution and sale. Avoid using industry jargon to describe the production process. Staffing:-Describe the type of staff, their qualification, skill, salaries, other benefit and how they will be recruited. 4. Equipment and Material: In this component one must describe the special type of machines and materials required to purchase, their cost and source. Facility:-Facilities and other infrastructure required for the company, specialized features if any are to be described. Market Description:-Strategy for locating your target market, informing or educating customers about your product or service and convincing them to buy it. Discuss the products feature you plan to emphasize to gain the attention of your target market. 5. Operations: In this component company must highlight the senior manager responsible for overseeing the start-up and operation of your business, their background and their responsibility in the business. Ownership- Potential investors and lenders will be interested in ownership stake of the board of directors and also in what portion of the companys equity is available. An investor or banker must know
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6. Management and ownership: Providing a brief description of the different financial statements of the business to be attached such as . Startup budget-Describe the initial expenses which may incur to get your business up and running. Cash flow projection-Provide month to month schedule of estimated cash inflow and outflows from the business for the first year. This include how much money and when. Income statement-Prepare a multiyear statement of projected revenue, expenses, capital expenditure and cost of goods sold. This should be supported by documents of growth pattern of similar companies or studies that forecast an industry wise forecast. Balance sheet-Provide a copy of balance sheet of sponsoring organization.
7. Financial information and timeline: Capital Requirement- Describe the Requirement of type of capital for financing and repayment period, amount of expected return and explain any commitment or investment that you may have already secured. Types of requirement of funds are. Seed Capital Fixed asset financing Working Capital Initial Start-up timeline-Provide a timeline of task and events necessary to get your business operational. Be sure to record stage as on today also. Set realistic dead line to capacity to complete these tasks. There may be several reasons to
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Need: Many companies in developing countries have a very detailed reporting system going down to the level of a single product, a single supplier, a single day. However, these reports which are normally provided to the General Manager should not be used by them at all. They are too detailed and, thus, tend to obscure the true picture. A General Manager must have a birds eye view of his company. He must be alerted to unusual happenings, disturbing financial data and other irregularities. As things stand now, the following phenomena could happen:
That the management will highly leverage the company by assuming excessive
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lead to wrong (even to dangerous) decisions. Importance: A decision system has great impact on the profits of the company. It forces the management to rationalize the depreciation, inventory and inflation policies. It warns the management against impending crises and problems in the company. It specially helps in following areas: The management knows exactly how much credit it could take, for how long (for which maturities) and in which interest rate. It has been proven that without proper feedback, managers tend to take too much credit and burden the cash flow of their companies. A decision system allows for careful financial planning and tax planning. Profits go up, non cash outlays are controlled, tax liabilities are minimized and cash flows are maintained positive throughout. The decision system is an integral part of financial management in the West. It is completely compatible with western accounting methods and derives all the data that it needs from information extant in the company. So, the establishment of a decision system does not hinder the functioning of the company in any way and does not interfere with the authority and functioning of the financial department. Q.5 Explain the importance of any five aspects of a Licensing Agreement that you will look for when negotiating the right to use an Intellectual Property A licence is a grant of permission made by the patent owner to another to exercise any specified rights as agreed. Licensing is a good way for an owner to benefit from their work as they retain ownership of the patented invention while granting permission to others to use it and gaining benefits, such as financial royalties, from that use. However, it normally requires the owner of the invention to invest time and resources in monitoring
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3. Movement of people: Workers move from one country to another partly to find
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Write a short note on GATT and WTO, highlighting the difference between the two.
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General Agreement on Tariff and Trade( GATT): The GATT, was established on a provisional basis after the Second World War in the wake of other new multilateral institutions dedicated to international economic cooperation notably the "Britton Woods" institutions now known as the World Bank and the International Monetary Fund. The original 23 GATT countries were among over 50 which agreed a draft Charter for an International Trade Organization (ITO) a new specialized agency of the United Nations. The Charter was intended to provide not only world trade disciplines but also contained rules relating to employment, commodity agreements, restrictive business practices, international investment and services. In an effort to give an early boost to trade liberalization after the Second World War and to begin to correct the large overhang of protectionist measures which remained in place from the early 1930s-tariff negotiations were opened among the 23 founding GATT "contracting parties" in 1946. This first round of negotiations resulted in 45,000 tariff concessions affecting $10 billion or about one-fifth of world trade. It was also agreed that the value of these concessions should be protected by early and largely "provisional" acceptance of some of the trade rules in the draft ITO Charter. The tariff concessions and rules together became known as the General Agreement on Tariffs and Trade and entered into force in January 1948. Although the ITO Charter was finally agreed at a UN Conference on Trade and Employment in Havana in March 1948, ratification in national legislatures proved impossible in some cases. When the United States government announced, in 1950, that it would not seek Congressional ratification of the Havana Charter, the ITO was effectively dead. Despite its provisional nature, the GATT remained the only multilateral instrument governing international trade from 1948 until the establishment of the WTO. Although, in its 47 years, the basic legal text of the GATT remained much as it was in 1948, there were additions in the form of "plural-lateral voluntary membership agreements and continual efforts to reduce tariffs. Much of this was achieved through a series of "trade rounds". The biggest leaps forward in international trade liberalization have come through
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The WTO has nearly 150 members, accounting for over 97% of world trade. Around 30 others are negotiating membership. Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTOs predecessor, GATT. The WTOs agreements have been ratified in all members parliaments. The WTOs top level decision-making body is the Ministerial Conference which meets at least once every two years. Below this is the General Council which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. At the next level, the Goods
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Multinational companies (MNC) may pursue business strategies that are home country oriented or host country oriented or world oriented. Perlmutter uses such terms as ethnocentric, polycentric and geocentric. However, "ethnocentric" is misleading because it focuses on race or ethnicity, especially when the home country itself is populated by many different races, whereas "polycentric" loses its meaning when the MNCs operate only in one or two foreign countries. According to Franklin Root (1994), an MNC is a parent company that a. b. c. engages in foreign production through its affiliates located in several countries, exercises direct control over the policies of its affiliates, implements business strategies in production, marketing, finance and staffing that transcend national boundaries. Business strategy of a MNC can be analyzed with the help of Three Stages of Evolution 1. Export stage initial inquiries - firms rely on export agents expansion of export sales further expansion - foreign sales branch or assembly operations (to save transport cost) 2. Foreign Production Stage There is a limit to foreign sales (tariffs, NTBs).Once the firm chooses foreign production as a method of delivering goods to foreign markets, it must decide whether to establish a foreign production subsidiary or license the technology to a foreign firm. Licensing is usually first experience (because it is easy) it does not require any capital expenditure
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e.g.: Kentucky Fried Chicken in the U.K. Problem that may arise while following a particular business strategy: The mother firm may find it difficult in exercise of any managerial control over the licensee (as it is independent). Secondly, the licensee may transfer industrial secrets to another independent firm, thereby creating a rival. The next stage for supplementing any particular business strategy is Investments involved. It requires the decision of top management because it is a critical step. it is risky (lack of information) (for example-US firms tend to establish subsidiaries in Canada first. Singer Manufacturing Company established its foreign plants in Scotland and Australia in the 1850s) plants are established in several countries licensing is switched from independent producers to its subsidiaries. export continues 3. Multinational Stage: The company becomes a multinational enterprise when it begins to plan, organize and coordinate production, marketing, R&D, financing, and staffing. For each of these operations, the firm must find the best location.
Q.5
What does FDI stand for? Why do MNCs opt for FDI to enter international market?
Ans.
FDI stands for Foreign Direct Investment. New MNCs do not pop up randomly in foreign nations. It is the result of conscious planning by corporate managers. Investment flows from regions of low anticipated profits to those of high returns. When MNC incorporated in one country, invests in another country, it is said that the FDI has flowed
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Given the dominance of Western MNCs, the values that dominate the global context are often based on a free market economy, democracy, acceptance and tolerance of diversity, respect of freedom of choice, individual rights, and openness to change. Below the global level are nested organizations and networks at the national level with
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e. Product invention-This needs a totally new idea to fit the exclusive conditions of the
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2. International Joint Ventures: JV is a business organization established by two or more companies that combines their skills and assets. A JV is formed by two businesses that conduct business in a third country. (US firm + British firm jointly operate in the Middle East) Joint venture with a local firm (GM + Shanghai Automobile Company) Joint venture may include local government (Bechtel Company-US; Messerschmitt Boelkow Blom, Germany; Iran Oil Investment Company; National Iranian Oil Company) International JV has certain benefits. These are Large capital costs costs are too large for a single company
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Total Gains from domestic investment = 10% (= 4% + 6%) because tax revenues can be used for public purposes. Total Gains from foreign investment = 7.2% (because US government gets nothing). The tax revenue which could have been used to build US highways would be used by Canadian government to build their highways. A firm has to evaluate all such kinds of complex factors to fix up any strategy before choosing to enter a foreign market
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Ans. A service is an activity which has some element of intangibility associated with it, which involves some interaction with customers or with property in their possession, and does not result in a transfer of ownership. A change in condition may occur and production of the service may or may not be closely associated with a physical product. Goods are simply the objects and services are simply the provision of such information of goods by the seller and the buyers. The goods are visible and shall be purchased by the buyers and sold by the sellers, whereas the services are the ones received by the guests and provided by the goods sellers. The objective in any service classification scheme is to get a deeper understanding of the service product. Despite the diversity in the range of service products, it is possible to classify and explore them on the basis of certain factors. There have been more than sixteen studies regarding the classification schemes. Naturally, some are worthwhile in developing marketing strategies, with others suffer shortcomings. According to Christopher Lovelock following issues should be considered for the
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b.
c.
As per Payne following factors determine classification of services: a. b. c. d. e. f. g. h. i. j. k. l. Type of services, Type of seller, Type of purchaser, Demand characteristics, Rented versus owned services, Degree of intangibility, Buying motives, Equipment based versus people based, Amount of customer contact, Service delivery requirements, Degree of customization and Degree of labour intensity.
According to Kotler and Station, services classification must be equipment based or people based. The service may meet a personal need or a business need, according to the difference in their objectives and the ownership. The objective may either be for profit or non-profit and the ownership may be private or public. Accordingly services may be classified as below: a. Housing,
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Lovelocks Classification Schemes is based on following factors: a. Nature of the Service Act : In this scheme, the nature of the service act, i.e intangibility etc., and the recipients of the services are considered. It has wide dimensions and considers how the customers presence, physically or mentally, is required during service delivery and the benefits gained by the customer. It also considers how the customers change on receipt of the service. It leads to the consideration of location and scheduling convenience for the presence of the customer to utilize the service. Relationship with Customer: This classification matrix contrasts the nature of service delivery and ascertains whether there is a formal relationship between the customer and service marketer. The knowledge of customers identities and addresses gained to meet out specific offers to specify customers by targeted direct marketing makes market segmentation easier and provides insights into trade off between pricing and usage rates. In the absence of personal relationship, services may be provided by continuous delivery or by discrete transaction. Customization and Judgment in Service Delivery : In this classification, the degree of customization of service characteristics is contrasted with the degree of judgment required by customer. The customized information is very important to the service marketers. They have to balance the cost of custom made service with a standard service and so the service marketers often seek to limit the number of options while deciding the extent of customization.
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b.
c.
e.
These classification systems of Lovelock provide frame work for service marketers to consider both the nature of their business and to what extent they share common characteristics with other seemingly unrelated service businesses. Other classification: Thomas classified the services on the basis of type of equipment or people rendering the services a. Equipment based : In this case, the equipments or the machines being utilized for service position are important while people play a secondary role. Some of the examples are automatic vending machines, automatic car washes and movies. In such services, the equipments may be operated automatically or by unskilled or skilled labour. Labour based : Here, the human element is primary in the production and delivery of services. The equipments or machines, if any, are secondary. This type of services includes counselling, legal advisory service, catering and hair dressing service. There are services in which both the equipments and labour have equal importance as in the case of hospitals. According to Nickles services can also be classified as being convenience, shopping and specialty services. a. Convenience services are those which the customer usually purchases
b.
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According to Hill the services may be classified as follows: a. b. c. d. e. Affecting person (eg. Health) or affecting goods (eg.cargo maintenance), According to the permanent or temporary effects, According to the reversibility or irreversibility of those effects, Physical effects or mental effects and Individual or collective services.
Q. 2. (3)Describe the stages involved in the positioning of services. Ans. Positioning is concerned with the identification, development and communication of a differentiated advantage which makes the organizations products and service perceived as superior and distinctive to those of its competitors in the mind of its target customers Services have a number of distinguishing features which have special implications for the positioning and attributes to emphasize. Three key characteristics for service positioning are the intangibility, the degree of variability or heterogeneity in quality of a given service, and inseparability. Positioning can be considered at several levels such
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Ans. The marketing mix concept is a well established tool used as a structure by markets. It consists of the various elements of a marketing programme which need to be considered in order to successfully implement the marketing strategy and positioning in the companys markets. Essentially the marketing mix represents the factors which need to be considered when determining a service firms marketing strategy. The marketing strategy for a service company depends on seven Ps which are - product, price, place, promotion, people, processes and physical evidence. The underlying concept in developing each of these elements is to use them to support each other to reinforce the positioning of the service product and to deliver appropriate service quality
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d.
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These represent some of the more common, pricing objective. The decision on pricing will be dependent on a range of factors including: a. b. c. d. e. f. g. h. i. Corporate objective Positioning of the service The nature of competition Lifecycle of the service(s) Elasticity of demand Cost structures Shared resources Prevailing economic conditions Service capacity
Pricing Method: After considering the demand, cost, competitors and all the other relevant factors in the light of the pricing objective, the service marketer should consider the method by which the prices are fixed. There are different methods and some of
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4. Promotion and Communication Promotion is a set of activities designed to increase by consumers and is the through which the service provider communicates with his target markets. The promotion of services covers a number of areas or promotional tools which form the communications mix or promotions mix. These include: a. b. c. d. e. f. Advertising Personal selling Sales promotion Public relationship Word of mouth, and Direct mail.
The use of promotional tools in service sector is a comparatively recent aspect. Now, the fiercely competitive environment has made the service marketers use promotional tools actively. But promotional exercise as it is done in consumer goods companies is not the same for service industry. A communication programme for a service organization may consist of a wide variety of alternative communications and promotion. To communicate the target markets, the various elements of the communication mix must be integrated within the promotion and communication programme. This process involves many tasks among which the following are considered important. a. b. c. Identification of target audience, Determination of promotion objectives, Selection of communications mix.
The choice of the communications mix for service involves decisions on such issues as
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The process by which the service is created and delivered to the customer is critical to the service operations as customer often perceive the service delivery system as part of
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Branding plays a very important role in tourism marketing. Car rental firms, hotel chains and airlines, in particular employ tremendous efforts to ensure that their name is widely recognized and synonymous with quality, value or some other characteristic. Travel agents and tour operators depend on reputation to a large extent, and so it is imperative that they have a strong, recognizable identity. The main reason to build brand loyalty is to encourage repeat business. 2. Price Mix In the tourism industry, the pricing decisions are found critical and challenging since it is a multi segment industry. When a tourist proposes to visit a particular place, the total cost on his / her traveling includes the expenses incurred on transportation, accommodation, communication or so. In the pricing decisions, the product or the service mix of the tourist organizations is found important. This makes it essential that the tourist organizations set prices in line with the quality of services to be made available to the customers. The tourist professionals while making the pricing decisions are required to think in favor of discounting price. The different forms of discount, such as discounting for cash payment, price reduction for quality, trade discounts, trade allowances, seasonal discount, distressed stock and similar discount tactics are the options. 3. Place Mix Distribution management is concerned with two things availability accessibility. If tourism marketing management is to be certain that their products and services are both available and accessible to the target market, they must design a channel strategy that will be effective.
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d. Embed business logic into your infrastructure. Business logic is the system of procedures and rules that underlie how the CRM system operates its technology and the people with the customers. e. Opportunistically outsource. Get to market with CRM capabilities faster and without huge capital commitments and old-style systems development efforts. Implement disposable infrastructure applications that can be added cheaply and then thrown away. f. Manage multi-channel performance. The performance of your company as experienced by customer must be consistent regardless of which channel they choose to work through. Measure performance rigorously first to understand which channels need work and second to provide continuous feedback across multiple
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CRM has gained importance in the recent days. Developing appropriate strategy is critical decision of a company. CRM uses the electronic media to operate and simplify customer related business processes, reducing the cost of customer facing operations. Q. 3 Ans. 5. Describe the use of CRM in designing and delivering the services. CRM applications, often used in combination with data warehousing, E-commerce applications, and call centres, allow companies to gather and access information about customers buying histories, preferences, complaints, and other data so they can better anticipate what customers are looking for. The other business objectives include: a. b. c. d. e. f. g. h. Increased efficiency through automation The ability to provide faster response to customer inquiries Having a deeper knowledge of customer needs Generating more marketing or cross-selling opportunities Better information for better management Reduced cost of sales and increased productivity of Sales Representatives Receiving customer feedback that leads to new and improved products or services Conducting more one-to-one marketing.
Essence of a CRM solution In many companies, sales, marketing and customer service/support organizations work as decentralized functions. This forces customers to run from pillar to post when trying to meet their demands, creating a good deal of dissatisfaction. CRM provides a common platform for customer communication and interaction. The use of CRM applications can lead to improved customer responsiveness and a comprehensive view of the entire Customer Life Cycle. It can extend the traditional channels of interaction such as direct sales force or tele-business to the Web by providing a framework for
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Marketing today allows a diversty of products. Using a system like this, allows a
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A Awareness: It demonstrated that movie goers to be aware of a product's existence ie the new movie. R Balkrishnan, the director of the film and also the brain behind its promotion campaign wanted to avoid the usual razzmatazz, he wanted it to be executed in such a way, that people discuss Auro the character and not Amitabh the.. Teaser ads was an innovation, very efficiently used in the campaign. A teaser ad showing a bald head in a card board box increased the curiosity of the people which multiplied exponentially, as it became the topic of discussion. In Balkis words, The noise level has beaten our expectations. Big Bs decision to visit schools to bring about awareness regarding the disease is the ace up his sleeve. This will contribute heavily in the promotion of the film. With so much new coming up by ways of innovation, how could the titles lag behind. Well for the first time in the history of Bollywood, the cast and the credits of the film will be introduced by Jaya Bacchhan, cutting out the usual trends of titles. And last but not the least, it is for the first time that Aishwarya Bacchhan is involved in the marketing and promotion of a film. With discussions on end with the marketing and creative heads of the film, she is
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To create large heads they used a material called Perspex, which was again stuffed with foam. Also, they casted only women and children to play the Zoozoos so that the thin hands and legs made the heads look even bigger. These ads were shot at a very slow frame rate to make the movements look funny.
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E-MARKETING
(MK0008)
ASSIGNMENT-1 Q. 1 Ans. How does e-marketing relate to e-business? E-Marketing: E-marketing, also referred to as online marketing or internet marketing, is marketing that uses the Internet. The Internet has brought many unique benefits to marketing, including low costs in distributing information and media to a global audience. The interactive nature of Internet media, both in terms of instant response, and in eliciting response at all, are both unique qualities of Internet marketing. Emarketing ties together creative and technical aspects of the internet, including design, development, advertising and sales. E-marketing methods include search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising and viral marketing. E-Marketing can also be defined as a subset of e-Business that utilizes electronic medium to perform marketing activities and achieve desired marketing objectives for an organisation. Internet Marketing, Interactive Marketing and Mobile Marketing for example, are all a form of e-Marketing. E-Business: E-Business means utilizing, electronic medium in every day business activities. There are several levels of involvement in when it comes to e-Business. For example where one organisation relies completely on e-Business the second one may choose a mixed presence and means of doing business. Difference between e-Business and e-Marketing E-Business is a very broad entity dealing with the entire complex system that comprises a business that uses electronic medium to perform or assist its overall or specialized business activities. E-Commerce is best described in a transactional context. So for example an electronic
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E-MARKETING
(MK0008)
ASSIGNMENT-2 Q. 1 Ans. (2)Explain the bases used in the e-marketing segmentation. Marketers can base their segmentation of consumer markets in various methods like Geographic Segments, Demographic Segments, Psychographic Segments & Behavior Segments. They also create segments by under mentioned methods: a. b. c. Combining bases & focus on categories (known as Geodemographics) Using any combination of variables that makes sense for their industry. Utilising variables that can be used to identify and reach the right people at the right time. Using any of these four bases alone or in combination plus many other variables. Knowing which variables broadly identify the target segment & which simply further describe it because marketers use identification variables to enumerate and
d. e.
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For E-marketing segmentation, geographic location of computers is not important to users accessing Web sites, but it is very important to organizations with an Internet presence. Most firms target specific cities, regions, states, or countries with their product offerings & also develop multi segment strategies based on geography. Product distribution strategy is a driving force behind geographic segmentation. Research has found that the following factors have been important in such strategies: a. Companies want to reach only customers in countries where they distribute products. b. Firms offering services online will only sell to geographic areas where they can provide customer service. c. Companies examine the proportion of Net users in its selected geographic targets before deciding to serve the Web community. E-marketers using geographic variables for segmentation also evaluate online markets by region, city, urban area, and so forth. While deciding on countries as a segmentation base, the quality of a countrys market is evaluated using additional criteria like infrastructure variables designed to predict their ability to access and absorb information technology viz.-computer adoption, information & Internet. For example, in 2001, Sweden and Norway held the top two positions as the worlds dominant information economies because of a high mobile Internet access. Another important factor is the language used on the internet web pages. English is no longer the language of most Web pages and online bulletin boards; a major change from just two years ago. The top Internet languages at present are: English (42%), Japanese (9%), Chinese (9%), Spanish (7%), German (7%). This has huge implications for e-marketers desiring to reach global markets via the Internet. Until online text appears in local languages, users in those countries will not
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In the Internets early years, the typical user was a young male, college educated, with a high income who was basically an innovator. Now, this is true in countries with low levels of Internet adoption. The e-marketers study about the age, income, population of a geographical area who have knowledge of internet. Occupation of the customers also give an idea of internet uses. This has huge implications for e-commerce and advertising, and big changes are still taking place. The blue-collar workers of any country are the fastest growing online occupational group that are engaged in internet surfing and they provide a good e-marketing segment. 3. Psychographic Segments User psychographics include the following characteristics: a. Personality: Traits (other-oriented / self-oriented) and habits, b. Values: Deeply held convictions (religious beliefs), c. Lifestyle: Non-product-related behavior
d. Activities: (playing sports or eating out), e. Interests: Attitudes and beliefs people hold. f. Opinions:
Attitudes are internal evaluations about people, products, and other objects which can be either positive or negative & the evaluation process occurs inside a persons head. Attitude segmentation can be implemented by studying the general ways that consumers spend time. This helps e-marketers define and describe market segments so they can better meet consumer needs & this is very important for Web page design. 4. Behavior Segments
Behavior refers to what a person physically does (calling a toll free number to order, shopping, or purchasing a product). Product behaviors are such a vital segment descriptor that they form an entirely separate category. Two behavioral segmentation variables are: a) Benefit segmentation: On the Internet, there is something for everyone: information, entertainment, news, social meeting places, and more. Marketers form segments
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1. Price Differentiation: Differentiating on price is probably the most common and easily understood method. However, one has to be cautious while using this strategy. On the one hand, potential customers might expect a lower price because they perceive the e marketing firm as having less overhead, etc. On the other hand, cheaper prices can evoke perceptions of lower quality, a less-stable business, etc. And if we compete on price against competitors with deeper pockets, we can price ourselves right into bankruptcy. Hence it is better to be creative with this differentiator by competing on something other than straight price. For example, we might offer:
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INTERNATIONAL MARKETING
(MK-0009)
ASSIGNMENT-1
Q. 1
Distinguish between international marketing, multinational marketing and global marketing. If we talk in general, both the terms Global and International marketing are used interchangeably nowadays. But if we are talking in terms of marketing theories, International Marketing was a stage in the evolution of Global Marketing. Let us see how, Stage 1 : Domestic Marketing : Companies manufacturing products and selling those within the country itself. So, no international phenomenon at all. Stage 2 : Export Marketing : Company starts exporting products to another countries also. This is the very basic stage of global marketing. Approach of marketer in this stage is said to be ethnocentric because although he is selling goods to foreign countries, product development is totally based upon the taste of local customer. So, focus is still on domestic market Stage 3 : International Marketing : Now, company starts selling products to various countries and the approach is Polycentric i.e. making different products for different countries. Stage 4 : Multinational Marketing : Now, in this stage, the number of countries in which the company is doing business gets bigger than that in earlier stage. And so, instead of producing different goods for different countries, company tries to identify different regions for which it can deliver same product. So, same product for countries lying in one region but different from product offered in countries of another region. e.g. a company may decide to offer same product to India, Sri lanka and Pakistan if it thinks the taste of people of these countries is same but at the same time offering different product for American countries. This approach is called Regiocentric approach. Stage 5 : Global Marketing : This is the final stage of evolution. In this stage company really operates in a very large number of countries and for the purpose of achieving cost
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Local product development is based on the needs of local customers. These marketers are considered polycentric, because they acknowledge that each market/country has different needs.
At the multi-national stage, consolidation, and thus product planning, does not take place across regions; a regiocentric approach.
Q. 2
Explain P-Time and M-Time. How do the high-context or low-context cultures affect P-Time and M-Time? Hall (1959) first proposed the handling of time as one of the key components of culture. He used the terms Monochronic and Polychronic to describe two basic orientations to time.
Ans .
Mononchronic Time (M- Time): The Monochronic orientation (or "M-Time") views time
as sequential and linear. Time is seen as being a limited resource which is constantly being used up, and thus scheduling tends to be "tighter," more rigid, with great importance placed on promptness. M- Time typifies most North Americans, Swiss, Germans, and Scandinavians. These Western cultures tend to concentrate on one thing at a time. They divide time into small units and are concerned with promptness. M-time is used in a linear way and it is experienced as being almost tangible in that we save time, waste time, bide time, spend time, and lose time. Most low-context cultures operate on M-time. From the Monochronic perspective, late arrival for a meeting is viewed as rudeness, and events and activities are scheduled sequentially, one after another, to avoid overlapping. This perspective is oriented to the future.
Poltphonic Time (P- Time): The Polychronic orientation (or "P-Time") views time in a
more "circular" fashion, as the turning of the seasons, and time is seen as renewing itself each year. Scheduling tends to be "loose" and flexible, with many last-minute changes to even highly significant events and activities. Often many activities are juggled
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Management agreement (MA) Contract manufacturing agreement (CMA) Build-operate-transfer (BOT) agreement. Participation in Export Processing zones or Free Trade Zones. Internet investment
Market Entry Strategy For Any MNC In India: Riding the success of economic reforms, the Indian Market as a whole is presenting ample opportunities of growth to its foreign investors. India owes much of its credit to the policies encouraging Foreign Direct Investment (FDI) that have been formulated by the present government. In order to make a successful entry into the Indian Market, the following steps should be taken care of:
Development of a basic understanding of the potential of the Indian Market. Formulation of a sound strategy before entering Indian Market. Successful implementation of such a strategy.
Potential of the Market of India India is being seen as a most deserving place for investment by the developed countries of the world. The economic ambiance of the nation is favoring the entrance of a number of foreign players into her market. Rated as one of the fastest emerging economies of the world, India is no longer being ignored by even her strongest critic of yesteryears. A company's success in India will depend on the correct estimation of the nation's potential. Overestimation of possibilities and underestimation of complexities that a company might face may lead to its failure. Due consideration needs to be given to the inherent difficulties and functional hazards that a company might encounter while working in the Indian system. The entry into the market of India necessitates the formulation of a well-designed plan which in itself should be a product of thorough research. Above all, the company's should bear in mind the objective of growth in the long run and not profit in the
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India is the fifth largest economy in the world (ranked above France, Italy, the United Kingdom and Russia).
The Gross Domestic Product (GDP) of India is the third largest in Asia. India ranks second among the emerging nations of the world.
Besides, the Indian Market is also one of the few in the world that offers high opportunities for growth and earning potential in virtually all areas of business activity. In spite of all such positive attributes, investment in India has been hindered by the following forces:
Highly complex and inelastic social structure. Bureaucratic impediments. Infrastructural limitations.
Since her independence in 1947, India has evolved as a highly protective, semi-socialist economy. Because of its diversified cultures, no change in social structure or financial reform has been accepted unanimously. All such alterations had been subjected to time by the authorities implementing them. All business activities in India have encountered the inefficiency and corruption prevalent in the Indian bureaucracy. Lately, the government is addressing the issue with strict supervision. The rapid economic growth in the past few years has revealed the India's deficiency in providing infrastructural facilities to investors. The most significant areas of such shortcomings include poor network and conditions of roads, shortfall in availability of power and mismatch among port traffic capacity. The market of India is also diversified by the presence of consumers having a wide variety of tastes and preferences. It is therefore advisable to every investor before undergoing Indian Market Entry, to undergo a thorough introspection of what exactly the company is willing to achieve in India, to what extent and in what time. The introspection should be backed by a detailed investigation to know the possible pros and cons that a company might face in the process. In this regard there a number of firms who assist foreign investors from beginning to end.
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INTERNATIONAL MARKETING
(MK-0009)
ASSIGNMENT-2 Q. 1 Ans . Describe product standardization versus adaptation in international marketing. A product can be defined as a collection of physical, service and symbolic attributes which yield satisfaction or benefits to a user or buyer. A product is a combination of physical attributes say, size and shape; and subjective attributes say image or "quality". A customer purchases on both dimensions. A products physical properties are characterized the same the world over. They can be convenience or shopping goods or durables and non-durables; however, one can classify products according to their degree of potential for global marketing: a. Local products seen as only suitable in one single market. b. International products seen as having extension potential into other markets. c. Multinational products products adapted to the perceived unique characteristics of national markets. d. Global products products designed to meet global segments. Quality, method of operation or use and maintenance (if necessary) are the catchwords in international marketing. A failure to maintain these will lead to consumer dissatisfaction. Changes in design are largely dictated by whether they would improve the prospects of
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10. ability to integrate oneself into the environment. What is direct marketing? Give example of any MNC practicing direct marketing in India. What are the advantages of direct marketing? Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. Direct marketing is a system of marketing that integrates ordinarily separate marketing mix elements to sell directly to both consumers and other businesses, bypassing retail stores and personal sales calls. It is used by virtually every consumer and business to-business
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c.
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h.
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Ford Motors
d. LG e. Samsung f.
Hyundai
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A majority of multinational corporations operating in India have rated the country as a better investment destination on various parameters than China, Brazil, the UK, France, Australia and Singapore. India scores over China on skilled labour force and its market growth prospects are brighter than the UK and Singapore, according to a perception survey conducted by Federation of Indian Chambers of Commerce & Industry (Ficci) among 135 MNCs in India. These include a. b. c. d. e. Q. 3 Procter & Gamble, Nestle, Hyundai, Ford Colgate Palmolive.
What are various challenges that marketer faces while doing international advertising? When organizations advertise across international boundaries, a number of important factors have to be taken into consideration. Whilst the process is ostensibly straightforward, that is someone (seller) says something (message) to someone (buyer) through a medium) the process is compounded by certain factors. International advertising entails dissemination of a commercial message to target audiences in more than one country. Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional appeals, as well as in levels of literacy and languages spoken. How the advertising function is organized also varies. In some cases, multinational firms centralize advertising decisions and budgets and use the same or a limited number of agencies worldwide. International advertising can, therefore, be viewed as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and
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3. Objectives : Advertising must only be undertaken for a specific purpose(s) and this purpose must be translated into objectives. Whilst difficult to directly attribute to advertising, persuasive advertisings ultimate objective is to obtain sales. Other objectives include building a favorable image, information giving, stimulating distributors or building confidence in a product. Whatever objective(s) are pursued, these must be related to the product life cycle and the stage the product is in. 4. Budgets: Budgets can be set in a variety of ways. Many budgets use a percentage of past or future sales, objective and task methods, or rule of thumb. "Scientific" methods include sales response methods and linear programming. 5. Agency: Agencies can be used or not, depending on the organizations own abilities, confidence in the market and market coverage. Many organizations, like Lintas and Interpublic, are worldwide and offer a wide range of expertise. 6. Message selection: Message selection is probably where the most care has to be taken. Decisions hinge on the standardization or adaptation of message decision, language nuances and the development of global segments and customers. Message design has three elements, illustration, layout and copy. Advertising appeals should be consistent with tastes, wants and attitudes in the market. Coke and Pepsi have found universal appeal. With the "post-modern age" now affecting marketing, message design is becoming particularly crucial. It is not just a question of selling, but of crafting images. It is often the image, not the product, which is commercialized. Products do not project images, products fill the images which the communication campaign projects. Cokes "Life" theme is a classic in this regard. In illustrations and artwork, some forms are universally understood. Coke, again, with its "life" theme is applicable anywhere. Cheese and beer advertisements would go well together in Germany, but it would have to be cheese and wine in France. Copy, or text, has been the subject of much debate. Effective translation requires good technical knowledge of the original and translated language, the product and the objectives of the original copy. Care has to be taken that the meaning does not get lost in translation. 7. Media selection : There is a great difference in variety and availability of media across the world. The choice of media depends on its cost, coverage, availability, character
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organized and controlled advertising campaigns, many are devolved to local subsidiaries or agencies. The degree of autonomy afforded to local subsidiaries depends on the philosophy of the organization and the relative knowledge of the local market by the principal.
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