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ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

M.C.O.-6
Marketing Management
Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the
Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Auhtors for the help and Guidance
of the student to get an idea of how he/she can answer the Questions of the Assignments. We do not claim 100% Accuracy
of these sample Answers as these are based on the knowledge and cabability of Private Teacher/Tutor. Sample answers
may be seen as the Guide/Help Book for the reference to prepare the answers of the Question given in the assignment. As
these solutions and answers are prepared by the private teacher/tutor so the chances of error or mistake cannot be denied.
Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/
Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer & for uptodate and exact
information, data and solution. Student should must read and refer the official study material provided by the university.
Q. 1. Discuss in detail various micro and macro environmental factors that influence the marketing decisions
of a company and state the benefits of environmental scanning.
Ans. The micro-environment is also called the operating, competitive or task environment. It consists of sets of
forces and conditions that originate with suppliers, distributors, customers, creditors, competitors, and shareholders, as
well as trade unions, and the community in which the business operates. These forces, on a daily basis, impact the
organisation's ability to obtain inputs and discharge of its outputs. Factors in the micro-environment are largely within the
control of the managers. In this way, organisations can be much more proactive in dealing with the task environment than
in dealing with the macro environment. This macro environment refers to the wide ranging economic, socio-cultural,
political and legal, and technological forces that affect the organisation and its operating environment. These forces
originate beyond the firm's operating situation. The macro environment is also called the external or remote environment.
The macro environment presents threats and opportunities that are often difficult to grapple with (that is, identify and
respond to), than with events in the micro-environment.
Economic Forces: The economic forces have significant impact on the success of any organisation. These forces on
factors affect the conditions of procurement (buying) and sales market. For example, in Nigeria ( as elsewhere) where the
Naira is so devalued relative to foreign currencies (e.g. the dollar and pound), importation of required inputs of production constitutes a major threat to the corporate managers. In the same vein, during periods of unhealthy economic growth
occasioned by such factors as inflation, rising unemployment, high interest rates, and high taxes, among others, individuals as well as businesses have problems. This is more serious in the case of emerging enterprises, or new entrants. A
business firm is an open system. It gets resources from the environment and supplies its goods and services to the environment. There are different levels of environmental forces. Some are close and internal forces whereas others are external
forces. External forces may be related to national level, regional level or international level. These environmental forces
provide opportunities or threats to the business community. Every business organization tries to grasp the available
opportunities and face the threats that emerge from the business environment. Business organizations cannot change the
external environment but they just react. They change their internal business components (internal environment) to grasp
the external opportunities and face the external environmental threats. It is, therefore, very important to analyze business
environment to survive and to get success for a business in its industry. It is, therefore, a vital role of managers to analyze
business environment so that they could pursue effective business strategy. A business firm gets human resources, capital,
technology, information, energy, and raw materials from society. It follows government rules and regulations, social
norms and cultural values, regional treaty and global alignment, economic rules and tax policies of the government. Thus,
a business organization is a dynamic entity because it operates in a dynamic business environment.
Macro environment factors are uncontrollable external forces that affect how a business operates. They are largely
out of the control of the business, and often require changes in operating, management, production, and marketing.
Analysts often categorize them using the acronyms PEST or PESTEL. Broken down, PEST stands for political, economic, social, and technological concerns. PESTEL also includes environmental and legal factors.

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Political: Political macro environment factors include things like tax policies, government-issued safety regulations,
the availability of government contracts, and even shifts in the controlling political party. International laws, such as trade
agreements and tariffs, may affect the supply and demand chains and available markets for many different companies as
well.
Economic: A market boom, recession, or growing inflation problem can all change the way an organization plans for
the future and operates in the present. Economic factors are often difficult to assess, since economic forecasts and analyses vary widely between experts. Unemployment levels, comparative foreign exchange rates, and the state of the global
economy can all help or hurt a business' ability to get needed components and maintain a stable profit. The mood and
demographics of the population make up the social area of macro environment factors. For example, a society that places
an emphasis on self-guided jobs with room for creativity may cause organizations to redefine job descriptions and adapt
the model of the workplace to attract workers. Social trends, such as a preference for on-demand mobile media devices,
can also influence which products a company manufacturers and where it chooses to spend advertising dollars.
Technological: Technological macro environment factors can influence how an organization does business. A new
type of machinery, computer chip, or product created through research and development can help a company stay modernized and ahead of the market curve. Owners must be able to accurately identify which new developments will be truly
useful, and which are just fads.
Environmental: Environmental concerns are important to businesses both in the short and long term. In the shortterm, things like natural disasters can disrupt production and supply operations, or even destroy company assets. Programs such as environmental risk assessment can help companies prepare to handle many of the most likely short-term
crises. In the long view, however, businesses may have an interest in ensuring that their supply chains are not destroyed by
unsustainable practices.
Legal: Legal factors can limit or change how a business operates. For example, they may have to hire additional
supervisory staff or purchase safety equipment after a new health and safety law is passed. Child labor laws often limit the
hours a minor can work and require set break periods. If an organization employs several minors, it may have to hire
additional help to cover the hours when the minors cannot legally work. Legal factors are determined by both local
legislation and regional and national laws. In some cases, companies that do business internationally are also affected by
international laws.
"The micro environment consists of the actors in the company's immediate environment that affects the performance
of the company. These include the suppliers, marketing intermediaries, competitors, customers and the publics." The
macro environment consists larger societal forces that affect all the actors in the company's micro environment namely,
the demographic, economic, natural, technical, political and cultural forces." It is quite obvious that the micro environmental factors are more intimately linked with the company than the macro factors. The micro forces need not necessarily
affect all the firms in a particular industry in the same way. Some of the micro factors may be particular to a firm.
Q. 2. Distinguish between the following:
(a) Skimming Pricing and Penetration Pricing
Ans. Price skimming is a pricing strategy in which a marketer sets a relatively high pricefor a product or service at
first, then lowers the price over time. It is a temporal version of price discrimination/yield management. It allows the firm
to recover itssunk costs quickly before competition steps in and lowers the market price.
Price skimming is sometimes referred to as riding down the demand curve. The objective of a price skimming
strategy is to capture the consumer surplus. If this is done successfully, then theoretically no customer will pay less for the
product than the maximum they are willing to pay. In practice, it is almost impossible for a firm to capture all of this
surplus.
Penetration pricing occurs when a company launches a low-priced product with the goal of securing market share.
For example, a sponge manufacturer might use a penetration pricing strategy to lure customers from current competitors
and to discourage new competitors from entering the industry. If the sponge's price is low enough, consumers will flock
to the new product. Competitors who can't produce and promote sponges for such a small profit will avoid the market,
freeing the sponge company to maximize brand recognition and goodwill.
Penetration pricing requires extensive planning, according to the book "The Future of Business: The Essentials," by
Lawrence J. Gitman and Carl McDaniel. To properly execute a penetration-pricing strategy, the sponge manufacturer first
must gear up for mass production and then launch a sizable advertising campaign to publicize its new low-priced sponge.
Both steps are expensive, so penetration-pricing strategies might not work well for small businesses. Also, if your company's
forecasts for consumer demand are off, you could end up with a large stockpile of unwanted products.

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A price skimming strategy focuses on maximizing profits by charging a high price for early adopters of a new
product, then gradually lowering the price to attract thriftier consumers. For example, a cell phone company might launch
a new product with an initial high price, capitalizing on some people's willingness to pay a premium for cutting-edge
technology. When sales to that group slow or competitors emerge, the company progressively lowers its price, skimming
each layer of the market until the low price wins over even frugal buyers.
Price skimming offers four major advantages, according to "The Future of Business: The Essentials." It can offer
insight into what consumers are willing to pay. It can create an aura of prestige around your product. If the initial price is
too high, you can lower it easily.
(b) Sales promotion and personal selling
Ans. The business world today is a world of competition. A business cannot survive if its products do not sell in the
market. Thus, all marketing activities are undertaken to increase sales. Producers may spend a lot on advertising and
personal selling. Still the product may not sell. So incentives need to be offered to attract customers to buy the product.
Thus, sales promotion is important to increase the sale of any product. Let us discuss the importance of sales promotion
from the point of view of manufacturers and consumers.
From The Point of View of Manufacturers
Sales promotion is important for manufacturers because of the following reasons.
(i) It helps to increase sales in a competitive market and thus, increases profits,
(ii) It helps to introduce new products in the market by drawing the attention of potential customers,
(iii) When a new product is introduced or there is a change of fashion or taste of consumers, existing stocks can be
quickly disposed off,
(iv) It stabilizes sales volume by keeping its customers with them. In the age of competition it is quite possible that a
customer may change his/ her mind and try other brands. Various incentives under sales promotion schemes help
to retain the customers. Sales Promotion is what makes the online marketer a success. As an Online Marketer we
have the ability to take on the role of a go getter because we actually sell our products to new customers and we
take orders which have to be consistent through repeated sales. All Online Internet Marketers need support
personnel to oversee the selling progress but, not so much involved with the sales making. Building a sales force
is an important factor of the Internet Marketers' success in the business, because the sales force is responsible just
for generating the business revenue. Some major decisions that Internet marketer make is determining the sales,
recruiting others, manage the sales, Control and evaluate the performance of the sales of a product.
Personal Selling is basically interaction of communication that gives information to customers and often times persuading them to purchase a product of service. Personal selling generally serves the purpose of selling, locating potential
customers, encouraging them to buy with guaranteed customer satisfaction. Likewise there are many categories defining
a sales person rather consciously or unconsciously as the move through the process of selling their products.
(c) Departmental stores and chain stores
Ans. A department store is typically a large retail establishment that offers a wide variety of merchandise organized
into separate departments. Merchandise featured in department stores is generally clothing for men, women and children;
jewelry and accessories like handbags, belts and scarves; shoes; and cosmetics. Some department stores carry small
appliances for the home, electronics, sports equipment, toys and furniture. Many department stores are part of a retail
chain with stores in multiple locations. Department stores and chain stores are two different concepts. Department stores
have a long history of offering a wide variety of goods for retail sale, while chain stores are retail outlets in various
locations under the same brand and management. While many department stores are chain stores, the opposite is not true.
There are many chains such as restaurants and specialty stores that are not considered department stores. Macy's department store on Herald Square in New York City is one of the best-known department stores that is also part of a chain.
The department store is the precursor of the modern shopping center. Shifting populations from rural areas into urban
centers like New York fostered the rise of department stores in the mid-1850s. To accommodate large numbers of shoppers, move goods and manage heat, water and light, engineers and architects developed the idea of the modern skyscraper. The philosophy for both the department store and the contemporary shopping center is that shoppers should be
able to find whatever they need under one roof. To further accommodate shoppers, department stores offer restaurants,
restrooms, home delivery, gift wrapping and purchase on credit. For many shoppers, the conveniences of department
store shopping far outweighs the disadvantage of maneuvering through large stores with an abundance of merchandise.
Chain stores are retail outlets in multiple locations that share a brand and central management. They usually feature
standardized business methods. Some chain stores are branches owned by one company, while others are franchises

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owned individually. Some features common to chain stores include centralized marketing and purchasing, resulting in
lowered cost to the consumer and higher profit for the store.
(d) Wholesaler and Retailer
Ans. The terms "wholesale" and "retail" themselves explain the difference. "Wholesale" means "selling in large
quantities" and "retail" means "selling in small quantities."
In wholesale, the goods are mainly sold to the retailer who sells it to the customers. A wholesaler might also sell the
products directly to the customers. One of the main differences between wholesale and retail is in the price of the goods.
The wholesale price is always lower than the retail price. This is mainly because the retailer has to include many other
costs while selling the goods. The retailer has to add costs like the salaries of employees, rents of shops, sales tax, and
advertising of the goods that he buys from a wholesaler. A wholesaler does not worry much about all of these aspects
which prompts him to sell goods at a lower price.
The wholesaler has direct links with the manufacturer and buys products or goods directly from him. On the other
hand, a retailer has no direct contact with the manufacturer.
In choosing the quality, the retailer has an upper hand. A retailer can choose the products with quality and discard the
damaged ones as they only buy small amounts. On the contrary, the wholesaler will not have a say in the quality as he has
to buy in bulk from the manufacturer. This means that the retailer has the freedom to choose the products whereas the
wholesaler does not have the freedom to choose the products.
Q. 3. (a) What is channel conflict? Explain its causes. Discuss various mechanisms for effective conflict management.
Ans. Channel conflict is a situation in which channel partners have to compete against one another or the vendor's
internal sales department. Channel conflict can cost a company and its partners money as partners try to undercut one
another. It can also lower morale within the channel and cause some partners to consider other vendors. To prevent
channel conflict, partners sometimes enact agreements such as deal registration.
Channel conflict may also occur among various segments of corporate departments, such as the sales channel. For
example, the direct contact component of the sales department may have to compete with other sales channels, such as
telephone, online and mail campaigns.
Channel conflict occurs when manufacturers (brands) disintermediate their channel partners, such as distributors,
retailers, dealers, and sales representatives, by selling their products directly to consumers through general marketing
methods and/or over the Internet.
Channel conflict can also occur when there has been over production. This results in a surplus of products. Newer
versions of products, changes in trends, insolvency of wholesalers and retailers and the distribution of damaged goods
also affect channel conflict. In this connection, a company's stock clearance strategy is important.
To avoid a channel conflict in a click-and-mortar business, it is necessary to ensure that both traditional and online
channels are fully integrated. This reduces possible confusion with customers while providing the business benefits of a
dual channel.
Manufacturers today sell their products through a broad array of channels. Since most manufacturers sell through
several channels simultaneously, channels sometimes find themselves competing to reach the same set of customers.
When this happens, channel conflict is virtually guaranteed. In turn, such conflict almost invariably finds its way back to
the manufacturer.
This can also be termed as a situation when a producer or supplier bypasses the normal channel of distribution and
sells directly to the end user. Selling over the Internet while maintaining a physical distribution network is an example of
channel conflict.
In cases when the conflict can not be prevented, there are commonly used mechanisms to resolve them. How conflicts are resolved will have a significant impact on the success or failure of the PPP. The ultimate goal is to resolve any
difficulties quickly, in privacy, without disruption in service to the end user and in a manner that opens channels of
communication and reduces the potential for disputes further on in the life of the PPP.
There are many alternatives for conflict resolution. Deciding on the type of dispute mechanism to use depends on a
variety of factors including:
the nature of the dispute;
the relationship between the two partners;
the sensitivity of the issues involved; and
the likely outcome and cost of litigation.

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(b) What is publicity? How is it different from advertising? Explain with suitable examples.
Ans. Publicity is the movement of information with the effect of increasing public awareness of a subject. The
subjects of publicity include people (for example, politicians and performing artists), goods and services, organizations of
all kinds, and works of art or entertainment.
Publicity is gaining public visibility or awareness for a product, service or your company via the media. It is the
publicist that carries out publicity, while PR is the strategic management function that helps an organization communicate, establish and maintain communication with the public. This can be done internally, without the use of media.
We define publicity as a non personal and paid communication which promotes ideas, goods, or services, which is an
identified promotor. The first characteristic of publicity is Communication. Therefore, there is a Transmitter, a Message,
a Means and some Receptors. Publicity tries to communicate a message using different Means of Communication.
Publicity is paid communication: If a newspaper speaks about our company in an article this is not publicity. If in
a newspaper an article refers to us it is usually because our company has generated some news.
Promoting ideas, goods or services: Publicity tries to promote ideas, goods or services and therefore has the job of
taking certain ideas, goods and services to the citizens. Normally, when someone talks about publicit, they immediately
think about the advertising of products.
Advertising of Products: It is true that a large part of publicity concentrates on promoting products. Advertising
cars, detergents or perfumes are good exaples of product advertising.
In the modern world services are becoming more and more important. Banks, hospitals, universities and lawyers all
offer their services to society. As a country's income increases services become more important.
We differentiate between Public Relations and Publicity. Public Relations is a broader field that encompasses publicity, but also includes such things as investor relations, crisis communications, special events and sponsorships, and other
activities designed to mold opinion. One typical activity related to Public Relations is to make sure a company appears in
the media and that it appears in a positive light. They send press releases and relevant information about a company to
newspapers, radio stations and television channels.
Q. 4. What do you mean by marketing research? Discuss the process of conducting marketing research.
Ans. Marketing research is a systematic process. It first collects data (information) about the marketing problem.
Secondly, it records this data. Then it analysis (studies) this data and draws conclusions about it. After that, it gives
suggestions (advice) for solving the marketing-problem.
So, marketing research helps to solve the marketing problems quickly, correctly and systematically.
Marketing research collects full information about consumers. It finds out the needs and expectations of the consumers. So the company produces the goods according to the needs and expectations of the consumers. Marketing research is
"the process or set of processes that links the consumers, customers, and end users to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing
actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research
specifies the information required to address these issues, designs the method for collecting information, manages and
implements the data collection process, analyzes the results, and communicates the findings and their implications." It is
the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing
products and services. The goal of marketing research is to identify and assess how changing elements of the marketing
mix impacts customer behavior. The term is commonly interchanged with market research; however, expert practitioners
may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research
is concerned specifically about marketing processes.
The market research process involves a round of separate stages of data interpretation, organization and collection.
These stages could be considered as a benchmark of market research, but it depends on an organization how they have
encapsulated their strategies to follow this process. Hence some of the interlinked stages could be conducted repeatedly
and some of the stages can also be omitted. Given below is a typical market research process which is depicted stagewise:
1. Defining the Problem or Need: The starting phase is always identifying the reason or problem for which research
is to be conducted. This includes collecting of relevant initial information and how this information will affect decision
making process. It also includes defining problems after discussing with decision makers of the organization. Once the
problem is defined precisely and the need of research is discussed, the further process could be conducted in an efficient
manner.
2. Picking out the appropriate methodology: A specific methodology is entailed by the research professional after

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identifying the specific needs and exploring the case studies. It may include a combination of specific approaches like
telephone survey, web or email survey, one-to-one interviews, secondary research etc.
3. Data Collection Process: This process includes field work and desk work for collecting all relevant data and
information. Field work includes interviewing the personals by interacting them face to face by visiting them in home or
offices or arranging group meetings at any preferred place. Desk work includes contacting personals over telephone or
via series of emails and web meetings. This could take comparatively more time as compared to the field work. Involving
experienced and trained executive for this helps in reducing data collection errors.
4. Determining who will do the research: Once the initial stage of defining the problem and the need of research is
done, it is important to determine who will do the research and what will be the approaches to resolve these problems.
This involves creating a problem solving framework and analytical models after discussing with organization experts. In
this sample case studies are created according to the defined framework by enforcing the relevant information and secondary data.
Q. 5. Write short notes on the following:
(a) Total systems approach of marketing logistics
Ans. The term "total systems approach" implies that all of the parts of a particular system are synthesized to collectively achieve the ultimate goal for that system. A total systems approach for growing is identified as a total growing
systems approach. A total growing systems approach is (should be) part of a higher total systems approach with a higher
ultimate objective. A total growing systems approach, for example, would be under a total quality systems approach
which would be under a total nutritional (for humans & animals) systems approach which would be under a total health
systems approach which would be under a total business systems approach and so on. Eventually, all systems approaches
are under a total life systems approach which the ultimate goal is a person's or company's standards for right/wrong and
good/evil. Each person either passively (out of ignorance or by default) or aggressively (destiny in life) develops a total
systems approach with an ultimate objective for living. This is why all lower total system approaches ultimately, consciously or unconsciously, reflect the beliefs, destiny, and ultimate standards which motivate all thinking and actions in
life. Logistics is concerned with the storage and transportation of goods and information from the place of origin to the
place of consumption. It is broadly divided into two categories namely physical supply and physical distribution. Physical
supply deals with the transportation of the goods from the supplier to the manufacturer and the storage of raw material
used for work in progress. Physical distribution is concerned with transportation and storage of the finished goods from
the manufacturer to the customer. Cost is an important aspect in the logistics function. Every sub-function of logistics is
associated with some cost and the logistics function as a whole proves to be effective only when its total cost is minimized. This is the concept behind the application of the total cost approach to logistics. Customer service plays an
important role in the overall fulfillment of the logistics function. Elements of customer service in logistics include lead
time, inventory availability, order fill rate, and order status information.
Another sub-function, warehousing, is concerned with the effective storage and protection of goods. Warehouses are
divided into public warehouses and private warehouses. Public warehouses carry goods of more than one supplier whereas
private warehouses are dedicated to only one supplier. Every manufacturer aims at optimizing and in many cases, minimizing the inventory holding level. Economic Order Quantity (EOQ) is used to identify and carry optimum inventory
levels. Inventory can be minimized by applying the just-in-time technique to maintain very thin inventory levels. Effective logistics management aims at minimizing the order processing time and delivering the goods to the customer at an
early date and thereby satisfying the customers.
(b) Branding Strategies
Ans. A branding strategy is a plan devised in advance with the intent to increase a company's brand visibility in the
consumer market place. Often, especially in the industrial sector, it is just the company's name which is promoted (leading
to one of the most powerful statements of branding: saying just before the company's downgrading. This approach has not
worked as well for General Motors, which recently overhauled how its corporate brand relates to the product brands.
Exactly how the company name relates to product and services names is known as brand architecture. Decisions about
company names and product names and their relationship depends on more than a dozen strategic considerations.
In this case a strong brand name (or company name) is made the vehicle for a range of products (for example,
Mercedes-Benz or Black & Decker) or a range of subsidiary brands (such as Cadbury Dairy Milk, Cadbury Flake or
Cadbury Fingers in the UK).
By doing this a company increases it's brand equity and consumer trust. Strategies may include integrating brand into
letterhead, envelopes, advertisements, and promotional items. A branding strategy helps establish a product within the

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market and to build a brand that will grow and mature in a saturated marketplace. Making smart branding decisions up
front is crucial since a company may have to live with the decision for a long time.
Key Points:
Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product
or consumption of the product at all.
Iconic brands are defined as having aspects that contribute to the consumer's self-expression and personal identity.
In "no brand" branding, the product is made conspicuous through the absence of a brand name.
In derived branding, some suppliers of key components may wish to guarantee its own position by promoting
that component as a brand in its own right.
(c) Objectives of pricing
Ans. Pricing objectives or goals give direction to the whole pricing process. Determining what your objectives are is
the first step in pricing. When deciding on pricing objectives you must consider: 1) the overall financial, marketing, and
strategic objectives of the company; 2) the objectives of your product or brand; 3) consumer price elasticity and price
points; and 4) the resources you have available.
Some of the more common pricing objectives are:
maximize long-run profit
maximize short-run profit
increase sales volume (quantity)
increase monetary sales
increase market share
obtain a target rate of return on investment (ROI)
obtain a target rate of return on sales
stabilize market or stabilize market price: an objective to stabilize price means that the marketing manager
attempts to keep prices stable in the marketplace and to compete on non-price considerations. Stabilization of
margin is basically a cost-plus approach in which the manager attempts to maintain the same margin regardless
of changes in cost.
company growth
maintain price leadership
desensitize customers to price
discourage new entrants into the industry
(d) Repositioning
Ans. Repositioning refers to Changing a brand's status in comparison to that of the competing brands. Repositioning
is effected usually through changing the marketing mix in response to changes in the market place, or due to a failure to
reach the brand's marketing objectives.
It is the major change in positioning for the brand/product. To successfully reposition a product, the firm has to
change the target market's understanding of the product. This is sometimes a challenge, particularly for well-established
or strongly branded products. Firms may consider repositioning a product due to declining performance or due to major
shifts in the environment. Many firms choose to launch a new product (or brand) instead of repositioning because of the
effort and cost required to successfully implement the change. Repositioning involves changing the identity of a product
relative to competing products.

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