Pricing Strategies ;1.Penetration Pricing; 1.Price set to penetrate the market ,2.

Low price to secure high

volumes,3.Typical in mass market products chocolate bars, food stuffs, household goods, etc 4. Suitable for
products with long anticipated life cycles 5.May be useful if launching into a new market. 2.Market Skimming. 1. High
price, Low volumes 2. Skim the profit from the market 3. Suitable for products that have short life cycles or which will
face competition at some point in the future (e.g. after a patent runs out 4. Examples include: Playstation, jewellery,
digital technology, new DVDs, etc 3.Value Pricing; 1. Price set in accordance with customer perceptions about the
value of the product/service 2. Examples include status products/exclusive products 4.Loss Leader ; 1.
Goods/services deliberately sold below cost to encourage sales elsewhere 2. Typical in supermarkets, e.g. at
Christmas, selling bottles of gin at 3 in the hope that people will be attracted to the store and buy other things 3.
Purchases of other items more than covers loss on item sold 4. e.g. Free mobile phone when taking on contract
package 5.Psychological Pricing; 1.Used to play on consumer perceptions, 2. Classic example - 9.99 instead of
10.99. 3.Links with value pricing high value goods priced according to what consumers THINK should be the price
6.Going Rate (Price Leadership); 1. In case of price leader, rivals have difficulty in competing on price too high and
they lose market share, too low and the price leader would match price and force smaller rival out of market 2. May
follow pricing leads of rivals especially where those rivals have a clear dominance of market share 3. Where
competition is limited, going rate pricing may be applicable banks, petrol, supermarkets, electrical goods find very
similar prices in all outlets 7.Tender Pricing ; 1.Many contracts awarded on a tender basis 2. Firm (or firms) submit
their price for carrying out the work 3. Purchaser then chooses which represents best value 4. Mostly done in secret
8.Price Discrimination; 1. Charging a different price for the same good/service in different markets 2. Requires each
market to be impenetrable 3. Requires different price elasticity of demand in each market 9.Destroyer
Pricing/Predatory Pricing; 1. Deliberate price cutting or offer of free gifts/products to force rivals (normally smaller
and weaker) out of business or prevent new entrants 2. Anti-competitive and illegal if it can be proved 10.
Absorption/Full Cost Pricing; 1. Full Cost Pricing attempting to set price to cover both fixed and variable costs 2.
Absorption Cost Pricing Price set to absorb some of the fixed costs of production 11.Marginal Cost Pricing; 1.
Marginal cost the cost of producing ONE extra or ONE fewer item of production 2. MC pricing allows flexibility 3.
Particularly relevant in transport where fixed costs may be relatively high 3. Allows variable pricing structure Example;
Aircraft flying from Bristol to Edinburgh Total Cost (including normal profit) = 15,000 of which 13,000 is fixed
cost*Number of seats = 160, average price = 93.75,MC of each passenger = 2000/160 = 12.50,If flight not full, better
to offer passengers chance of flying at 12.50 and fill the seat than not fill it at all 12.Contribution Pricing: 1.
Contribution = Selling Price Variable (direct costs 2. Prices set to ensure coverage of variable costs and a
contribution to the fixed costs 3. Similar in principle to marginal cost pricing 4. Break-even analysis might be useful in
such circumstances 13.Target Pricing ; 1. Setting price to target a specified profit level 2. Estimates of the cost
and potential revenue at different prices, and thus the break-even have to be made, to determine the mark-up 3.
Mark-up = Profit/Cost x 100 14.Cost-Plus Pricing ; 1. Calculation of the average cost (AC) plus a mark up 2. AC = Total
Cost/Output 15.Influence of Elasticity ; 1. Any pricing decision must be mindful of the impact of price elasticity 2. The
degree of price elasticity impacts on the level of sales and hence revenue 3. Elasticity focuses on proportionate
(percentage) changes 4. PED = % Change in Quantity demanded/% Change in Price Price Inelastic; % change in Q
< % change in p 2. e.g. a 5% increase in price would be met by a fall in sales of something less than 5% 3. Revenue
would rise 4. A 7% reduction in price would lead to a rise in sales of something less than 7% Revenue would fall Price
Elastic; % change in quantity demanded > % change in price , e.g. A 4% rise in price would lead to sales falling by
something more than 4% , Revenue would fall , A 9% fall in price would lead to a rise in sales of something more than
9% , Revenue would rise Distribution Channels and Logistics ; 1.What are Critical functions seller looks forward
to from Channels? 1. Quick / Exceptional faster delivery 2. Financial resources 3. Good manpower 4. Quicker service
5. Selling expertise 6. Good systems for feedback 2.What are Customers expectations 1. Quick supplies 2. Lot sizes
as per requirements 3. Immediate attention for Problems , Convenience , Meeting 4. Technical

service 5. Availability of spares or emergency requirements 3. Factors for Choosing right

Channel; 1. Good organisation which can act like the manufacturer and offer marketing
functions 2. Covering the product line 3. Market / customer coverage 4. Do market
development 5. Exclusive or Multiple distribution 4 Legal Issues ; 1. Area / product range
restrictions 2. Restricting dealing with competitors 3. Exclusive rights / territories 4. Conflict of
interest 5. Serving of large orders (through dealer or directly 5.LOGISTICS ACTIVITIES; 1.
TRANSPORTATION 2. INVENTORY MANAGEMENT 3. CUSTOMER SERVICE 4. ORDER PROCESSING
Supports available for above activities ;Warehousing, Material handling

EFFECTIVE NEGOTIATION; A process through which parties move from initially divergent
positions to a point where agreement may be reached . The reason you negotiate is to produce
something better than the results you can obtain without negotiating, B A T N A Best
Alternative To a Negotiated Agreement , W A T N A Worst Alternative To a Negotiated
Agreement The Five Key Approaches 1. Compromise 1. Ready to give up something that
is dear 2. Feel as if lost something 3. Use as last resort 4.Generally perceived as sub-optimal
2.Logical ; 1. Strong role of Facts/Data dont nitpick 2. Analytical flow important 3. Source
Credibility/Impeccability 4. Generally emotions take back seat 3.Bargaining; 1. 1st & Last
levels known 2. Start higher than expected. Get a return for every concession you make 3. Do
not indicate you will move quickly from your position 4. Generally played like a game
4.Emotion ; 1. Strong understanding of respective emotional clues control your emotions
dont let them control you 2. Facts/data take back seat/selectively used 3. Variable tonality of
discussion 4. Generally involves play acting 5. Coercion ; 1. Strong understanding of
respective pulse points think before you threaten 2. Use mirrored or emotional threats rather
than real ones 3. Making offers that cannot be refused 4. Generally happens when there is
some inequality in dependence The Seven Phases of Negotiation ; 1.PLANNING &
PREPARATION ; 1. Setting Targets 2. Cost on concessions 3. S.W.O.T.- both sides 4.
Variables/Outcomes 5. Market Intelligence 6. Team clear 2. OPENINGS ; 1. Be Polite 2.
Outline your position 3. Never accept their first offer 4. Avoid markers 3. TESTING 1.
Understand their weaknesses 2. Probe facts and inconsistencies 3. Get them on the back foot
4. Silence get them talking 5.Challenge them 4. MOVING YOUR POSITIONS ; 1. Positive
Summary 2. Put on Pressure 3. Emphasise that you have moved 5.MAKING CONCESSIONS 1.
When to do it 2. How much to give 3. What do I get in return 6. AGREEMENT 1. Make final
offer with TOTAL conviction 2. Watch for closing signals before you move 3. Only break deadlog
if to your advantage 4. Use Closing Techniques 5. Make sure everybody knows what has been
agreed.The Seven Phases of Negotiation 1.last phase is of review, What went right?,What
went wrong, What could be done differently/better? What could have been avoided The
Sources of Power Need Who needs this solution more, you or your client Ask what they
need; State what you need Remember, focus on interests, not positions : Options
What are the options for each party if an agreement is not reached? Consider your
BATNA Application Sketch multiple solutions. Pictures can drive a point home
Brainstorming session with key stakeholders Time What is your clients deadline
Tight deadlines can strengthen or weaken your time power Application We lose time
power because testing is done too late in the process Present short and long term
solutions to give you time power

CULTURE: The word culture comes from the Latin cultura, which is related to cult or worship. In its broadest sense,
the term refers to the result of human interaction. For the purposes of the study of international management, culture is
acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms
values, creates attitudes and influences behavior. CHARACTERISTICS; 1.Learned. Culture is not inherited or
biologically based; it is acquired by learning and experience 2.Shared. People as members of a group, organization, or
society share culture; it is not specific to single individuals 3.Transgenerational. Culture is cumulative, passed down
from one generation to the next 4.Symbolic. Culture is based on the human capacity to symbolize or use one thing to
represent another 5.Patterned. Culture has structure and is integrated; a change in one part will bring changes in
another 6.Adaptive. Culture is based on the human capacity to change or adapt, as opposed to the more genetically
driven adaptive process of animals. CULTURAL DIVERSITY ; There are many ways of examining cultural differences
and their impact on international management. Culture can affect technology transfer, managerial attitudes, managerial
ideology, and even business government relations. Perhaps most important, culture affects how people think and
behave Stereotypes; are pictures in the head / mind , mental reproductions of reality , are beliefs about people
based on their membership in a particular group , can be positive, negative or neutral , Contain true and false
information Traditions and Customs: Tradition; 1.Derived from Latin word TRADITIO which means to hand down
or to hand over 2. Elements of culture passed on from generation to generation Customs; 1.An established pattern
of a behavior within a particular society is known as a custom 2.Passed on from generation to generation over the
years become ingrained into the social system 3.Food habits exhibit a high level of cultural sensitivities 4. Americans
and German blend chocolates types of Cross cultural classifications ;1.Hofstedes; 1.masculinity femininity 2.
individualistic collectivistic 3. low power distance high power distance 4. low uncertainty avoidance high
uncertainty avoidance 5. long-term orientation short-term orientation 2.Trompenaars ; 1.Obligation 2.emotional
orientation 3.Structuring 4.legitimating power and status 5.relation to the environment Individualism vs Collectivism :
1. Individualism 1. Tendency of people to look after themselves and only their individual family 2.Societies with high
level of Individualism tend to have strong work ethics, promotions based on merit 3.Ability to be independent of others
considered to be the key criterion for success 4. Level of competition is high 2. Collectivism ; 1.Refers to the tendency
of people to belong to groups and look after each other in exchange of loyalty 2.Interests of group have priority over
individual interests 3.US, UK, France have highly individualistic societies 4.Guatemala, Pakistan, Singapore, Malaysia,
Japan high level of collectivism Masculinity society; Dominant values emphasize on work goals eg. earnings,
advancement, success, material belongings-entire time in life devoted to work Feminine Society; Dominant values are
achievement of personal goals eg. Quality of life, earning for others, friendly atmosphere, getting along with boss and
others Uncertainty Avoidance : 1. Refers to lack of tolerance for ambiguity and the need for formal rules 2.
Measures the extent to which people feel threatened by ambiguous situation 3. Greece, Portugal, Japan: Most
uncertainty avoidance societies 4. Singapore, Denmark: Least uncertainty avoidance societies 5. In high uncertainty
avoidance societies: Life time employment is more common 6. In low-uncertainty avoidance societies: Job mobility is
common. Trompenaars Cultural Classifications: Universalism: Ideas and practices can be defined-rules and
applied every where without modifications. US, Austria, Germany,
Sweden, UK focus on formal rules rather than
relationships. Business contracts are closely related to: a deal is deal Particularism; A belief that unique
circumstances and relationships rather than abstract rules are important considerations to determine how ideas and
practices should be applied. Venezuela, CIS, Indonesia, China, Hong Kong, Thailand focus is more on relationship
than rules, Legal contracts can be modified honoring the changing circumstances based on the reality of the situation.
Individualistic Society: People refer themselves as individuals use of I and me Decisions are made on the spot
during business negotiation Achievement s and Responsibility are personal. Communitarian Society: People are
part of a group. We used more frequently than I Business decisions referred back to organization achievements
considered as group achievement managers believe in joint responsibility. Neutral Cultures; 1.People tend to hold
in check emotions dont exhibit their feelings 2.Consider anger, delight in work place unprofessional 3.Colleagues
from affective cultures considers this as emotionally dead or mask of deceit. Affective culture: 1.People smile,
laugh, talk loudly, express great deal of enthusiasm in greetings each other 2. Switzerland, China, Italy, Spain Egypt,
Mexico, Netherlands, CIS, Brazil belong to affective culture 3. Japan, UK, Singapore, Indonesia, Hong Kong Thailand

Australia belong to neutral culture Specific cultures; Work is set apart from rest of life. Diffuse culture: Everything is
connected to everything else-Doing business in diffused culture takes time. Achievement Culture: 1.People are
evaluated and accorded social status on the basis of how well he has performed their allocated functions-own effort
2.Australia, US, Switzerland, UK, Sweden , Germany and Mexico High achievement cultures.Ascription Cultures;1.
Status is accorded to individuals who naturally evoke admiration from others eg. Elderly persons, Seniors in the
organization 2.Society show respect to such distinguished people who are not easily compared with others
Homophilous cultures:1.People share same beliefs, speak same language, practice same religion 2. Japan, Korea,
Scandinavian countries 3. Diffusion of new products take place in less timeUniform marketing mix decisions can be
adopted Heterophilous Cultures: 1. Differences in language, beliefs, and religion 2. Cultures varies from state to
state, province to province 3. Business communications needs to be adapted from region to region. Relationship
focused cultures: Lay emphasis on human relationship , Focus people are vague, slack and enigmatic Deal
focused cultures: Task oriented, aggressive, offensive and even blunt Formal cultures; 1. India, Bangladesh,
Indonesia, Malaysia, Vietnam, Thailand, Philippines, Saudi Arabia, Greece, Brazil, Japan, China, Germany, Denmark
Formal cultures 2. Formality is used to show respect 3. Status difference large and valued 4. Counterparts are
addressed by title or family name 4. Protocol rituals are nemerous and elaborate Informal cultures; 1. US, Canada,
Australia 2. Informal behavior not considered disrespectful 3. Status difference not valued 4. Counterparts are
addressed by first name 5. Protocol rituals are few and simple. Polychronic cultures: 1. Relaxed approach to time
schedules, punctuality and meeting deadlines 2. India, Bangladesh, Indonesia, Vietnam, Egypt, UAE, Brazil, Saudi
Arabia 3. Relationship more important than punctuality and precise scheduling 4. Schedules and deadlines flexible 5.
Meetings are frequently interrupted Monochronic (Rigid time) Cultures; 1. France, Belgium, Italy, Spain and
Hungary modernately, monochronic cultures. Japan, China, South Korea, UK, US, Canada, Australia, Germany,
Denmark, Finland rigid time (Monochronic culture 2. Primacy of punctuality and schedules 3. Rigid schedules and
deadlines 4. Seldom interrupted meetings Expressive Culture; 1.UAE, Egypt, Greece, Brazil, Mexico, France,
Belgium, Italy, Spain and Hungary, Russia, Australia, Canada have expressive cultures 2. Speak louder,
Uncomfortable with silence 3. Interpersonal space is half an arms length 4. Physical contact 5. Direct eye
contact 6. Lively facial expressions and gesturing Reserved cultures; 1. India, Bangladesh, Indonesia, Malaysia,
Vietnam, Thailand, Philippines, Japan, China, South Korea, Singapore, Britain, Germany, Denmark, Finland,
Netherlands 2. Speak softly, comfortable with silence 3. Interpersonal space is arms length 4. Little physical contact
5. Eye contact is indirect 6. Facial expressions and gesturing restrained EPRG Approach: Ethnocentric orientation 1.
Considers ones own culture as superior to others 2. Business strategy worked in the home country - suitable in alien
cultures 3. Ignores cultural differences across countries 4. Extension Strategy Polycentric Orientation; 1.
Recognizes cultural differences in host country Approach is strongly market oriented customized business strategy
2. HSBC Bank network in six continents, serving 100 million customers advertises with punch line THE
WORLDS LOCAL BANK 3. Focuses on cultural differences between countries 4. Body tattoos trendy in East,
whereas colored, glittery mehendi is a popular tradition in India Regiocentric orientation; Firms treats the region as a
uniform cultural segment and adopts a similar strategy within the region, Mc Donalds strategy not to serve poRk , and
sell all meat preparations made out of halal process in middle east and other Muslim dominated countries Geocentric
Orientation; Whole world as a single market formulate integrated business strategies , Integrated global business
programme, Harry Potter series of books is a classic example of geocentric orientation wherein the author J R Rowling
has brought out a series of fictions that appeal to global readers and has marketed it globally using a highly integrated
business strategy Cultural Challenges in Modern Indian Work place; Modern Indian work place is a blend of Indian
values and Western Management systems. Most managers have been educated in schools that use U.S. textbooks 1.
Role of Karta; Father figure who can nurture, care, sacrifice while at the same time be demanding, task-oriented and a
strict disciplinarian. Inculcates culture of sneh-shraddha. He shows his followers affection (Sneh) and they respond
with Shraddha (deference 2. Relationship-Orientation; Indians are relationship-oriented rather than task-oriented.
They prefer personalized and not contractual relationship 3. Proximity to Power ; Indians have a strong need for
power and are power-striving 4. Insecurity; Due to intense competition for jobs Indians feel insecurity, anxiety and fear
in the workplace 5, Simple living & High Thinking; Inspite of new fascination for wealth and consumer goods there is
innate respect for simple living and high thinking in Indian Culture,Difference of culture in private and public/Govt.
offices. Ethnocentrism - considers ones own culture is superior to others - contemplates business strategies that work
well in ones country will work as well as in foreign countries. CrossCultural Management: The growing importance of
world business has created a demand for managers sophisticated in global management skills and working with people
from other countries HOFSTEDE; Hofstede (1980) undertook a comprehensive study on worldwide sociocultural

factors influencing management. Hofstedes research compared workrelated attitudes across a range of cultures. From
his survey of 116,000 employees in 40 countries, Hofstede isolated 4 major dimensions which were congruent with
different cultural values of specific countries. International Management: Process of developing strategies designing
and operating systems, and working with people around the world to ensure sustained competitive advantage. The
Communication Process; source*encoding*channel*decoding*receiver.
Shortcuts to Judging Others;1. Selectivity - choosing bits of data depending on the interests, background,
experience, and attitudes of observer 2. Assumed Similarity - perceptions of others more influenced by what the
observer is like or thinks 3. Stereotyping - basing perception on group membership or association 4. Halo Effect drawing a general impression on the basis of a single characteristic, such as intelligence, sociability, or appearance.
Negotiation; The process in which two or more parties communicate and exchange goods or services in an attempt to
rich a mutually agreeable solution Motivation; Is the result of an interaction between the person and a situation; it is
not a personal trait. Is the process by which a persons efforts are energized, directed, and sustained towards attaining
a goal. Motivation works best when individual needs are compatible with organizational goals. Theories of Motivation;
Maslows Hierarchy of Needs: psychological ,safety, social, esteem ,self actualisation, MacGregors Theories X :
Assumes that workers have little ambition, dislike work, avoid responsibility, and require close supervisionand y :
Assumes that workers can exercise self-direction, desire responsibility, and like to work,Herzbergs Two-Factor Theory
: Job satisfaction and job dissatisfaction are created by different factors, Attempted to explain why job satisfaction does
not result in increased performance. Contemporary Theories of Motivation: 1. Three-Needs Theory (McClelland:
1.There are three major acquired needs that are major motives in work, Need for achievement (nAch,Need for power
(nPow,Need of affiliation (nAff. 2. Goal-Setting Theory; Proposes that setting goals that are accepted, specific, and
challenging yet achievable will result in higher performance than having no or easy goals, Is culture bound to the U.S.
and Canada 3. Reinforcement Theory: Assumes that a desired behavior is a function of its consequences, is
externally caused, and if reinforced, is likely to be repeated 4. Designing Motivating Jobs; Job Characteristics Model
(JCM: A conceptual framework for designing motivating jobs that create meaningful work experiences that satisfy
employees growth needs 5. Equity Theory: Proposes that employees perceive what they get from a job situation
(outcomes) in relation to what they put in (inputs) and then compare their inputs-outcomes ratio with the inputsoutcomes ratios of relevant others 6. Expectancy Theory (Vroom: States that an individual tends to act in a certain way
based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to
the individual, Key to the theory is understanding and managing employee goals and the linkages among and between
effort, performance and rewards. Leadership: has been a real challenge for a long time. Today, this term has been
described as the process of social influence in which one person is able to enlist the aid and support of others in the
accomplishment of a common task (according to R. E. Riggio, S. E. Murphy and F. J. Pirozzol in their work Cognitive,
social, and emotional intelligence of transformational leadership ). Put even more simply, the leader is the inspiration
and director of the action. He or she is the person in the group that possesses the combination of personality and skills
that makes others want to follow his or her direction Globe Project :1. Performance orientations: Performance
orientation reflects the extent to which a community encourages and rewards innovation, high standards, excellence,
and performance improvement, Low performance orientation countries value societal and family relationships,
harmony with the environment, being over doing and are uncomfortable with direct feedback, preferring indirect
feedback, High performance orientation countries value competitiveness and materialism, value doing over being
and are appreciative of direct feedback with explicit communication 2.Humane Orientation; The degree to which an
organization or society encourages and rewards individuals for being fair, altruistic, friendly, generous, caring, and kind
to others, In high humane orientation societies, the well-being of others is important, and people are motivated by a
need for belonging and affiliation, In low humane orientation societies, people are motivated primarily by power and
material possessions and the state provides support for peoples well-being 3. Assertiveness: The degree to which
individuals are assertive, confrontational, and aggressive in their relationships with others, In highly assertive societies,
competition, success, and progress are valued. Communication is direct and subordinates are expected to take
initiative, In societies that are low in assertiveness, communication is indirect, in order to save face. Coop0eration and
warm relationships at the workplace are valued 4. Collectivism: Both Hofstede and Trompenaars have identified
collectivism as a dimension to classify societies on the basis of culture. The GLOBE project divided collectivism into two
types in-group collectivism and institutional collectivism. In-group collectivism is the degree to which individuals
express pride, loyalty, and cohesiveness in their organizations or families. Institutional collectivism is defined as the
degree to which organizational and societal institutional practices encourage and reward collective distribution of
resources and collective action. Indian society is high on in-group collectivism and low on institutional collectivism.

Indians exhibit high loyalty to their families but not to their organizationsThe Chinese exhibit higher institutional
collectivism than Indians CHARACTERISTICS OF CULTURE: Learned; Culture is not inherited or biologically based;
it is acquired by learning and experience, Shared:People as members of a group, organization, or society share
culture; it is not specific to single individuals, Transgenerational. Culture is cumulative, passed down from one
generation to the next, Symbolic. Culture is based on the human capacity to symbolize or use one thing to represent
another,pattern, adaptive

Q What is services:- It is the part of the product or the full product for which the customer is
willing to see value and pay for it. It is intangible.,It does not result in ownership.,It may or may
not
be
attached
with
a
physical
product
Characteristics
of
services:Intangibility,Inseparability,Perishability, Variability The three additional Ps of Service
Marketing:People,Physical
evidence,Process
Qualities
of
services:Search
qualities,Experience qualities,Credence qualitiesDifferentiation in services: Offering,Faster
and better delivery,Image Managing Service quality:- Gap between management perceptions
and consumer expectations,Gap between management perceptions and service quality
specifications,Gap between service quality specifications and service delivery,Gap between
service delivery and external communication,Gap between expected service and perceived
serviceDeterminants of service quality:- Reliability delivering on promises,Responsiveness
willing to help,Assurance inspiring trust and confidence,Empathy individualising
customers,Tangiblesphysical
representation
Service
Encounter
Themes:Recovery,Adaptability,Spontaneity,CopingTypes
of
complainers:Passives,Voicers
,Irates,ActivistsManaging Service Productivity:- Giving quality service is an expensive
business,Not every consumer is willing to pay extra for service quality,Service providers would
have to find their optimum service quality/cost ratios,Can technology substitute part of the labour
content,Can customers substitute part of the labour content,Making services obsolete by product
innovations Q SERVICE DISTRIBUTION:1 Direct Delivery of Service:- Channels for services
are often direct- from creator of the service directly to the customer,Services cannot be owned,
there are no titles or rights to most services that can passed along a delivery channel,Inventories
cannot exist, making warehousing a dispensable function 2Delivery of Service through
Intermediaries:- Intermediaries may co-produce service, fulfilling service principals promises
to customers.eg: Franchise Services,They make service locally available,Provide time and place
convenience for the customers,Provide retailing function for customers because they represent
multiple service principals. eg: travel agents,Primary types of intermediaries Franchisees,
Agents & Brokers, Electronic Channel COMMON ISSUES INVOLVING INTERMEDIARIES:`conflict
over objectives and performance,conflict over costs and rewards,control of service
quality,empowerment versus control,channel ambiguity lack of role clarity 3 DIRECT/
COMPANY OWNED CHANNELS Benefits Company has control over the outlets thus owner can
maintain consistency in service provision,Control over hiring, firing, and motivating
employees,Allow expansion or contraction of sites without being bounded by contractual
agreements,Owns the customer relationship Challenges:-Company must bear all financial
riskLarge companies are rarely experts in local market. When adjustments are needed in business
formats for different markets, they may be ,unaware of what these adjustments should be,Service
partnerships they are very much like company owned channels except that they have multiple
owners. eg: Jet & Kingfisher,Benefit: risk, resources and effort are shared,Disadvantage: control
and returns gets distributed
4 FRANCHISING:- Benefits for Franchisor Leveraged business format for greater expansion
and revenues- increased revenues, market share, brand name recognition and economies of scale
for Franchisors,Can maintain consistency in outlets across cultures and countries ,Company can
obtain connection to the (knowledge about) local markets,Franchisees must contribute their own

capital for equipment and personnel, thereby bearing part of the financial risk of doing business.
Challenges for Franchisor Difficulty in maintaining and motivating franchisees,Highly
publicized disputes and conflict,Inconsistent quality that may undermine the companys image,
reputation and brand name,Customer relationships are controlled by the franchisee rather than
the franchisor 5 AGENTS & BROKERS:- Benefits Reduced selling and distribution costs eg: if
an airline need to contact every potential traveler to promote its offerings, cost would be
exorbitant,Intermediarys possess special skills and knowledge in their areas eg: Passport
Agent,Wide representation they act as company representative in different areas
ChallengesLoss of control over pricing and other aspects of marketing,Representation of multiple
service principals6 ELECTRONIC CHANNELS:- Benefits Consistent delivery for standardized
services,Low cost3Customer convenience,Wide distribution,Customer choice and ability to
customize,Quick customer feedback Challenge Customers are active, not passive,Lack of control
of electronic environment,Price competition,Inability to customize with highly standardized
services,Lack of consistency with customer involvement,Requires changes in consumer
behavior,Security concerns,Competition from widening geographies STRATEGIES FOR
EFFECTIVE SERVICE DELIVERY THROUGH iNTERMEDIARIES:- Control Strategies create
standards both for revenues and service performance, measures results, and compensates or
rewards on basis of performance level Empowerment Strategies Service principal allows
greater flexibility to intermediaries,Help intermediary develop customer oriented service
processes,Provide needed support systems,Develop intermediaries to deliver service
quality,Change to a cooperative management structurePartnering strategies Partnering with
intermediaries to learn together about end customers, set specifications, improve delivery, and
communicate honestly,Alignment of company and intermediarys goals,Consultation &
Cooperation Q TYPES OF NEW SERVICES:- -major innovations2-startup business 3 -new
services for the currently served market 4 service line extensions 5 service improvements 6 style
changes Q STAGES IN NEW SERVICE DEVELOPMENT:- 1)FRONT END PLANNING: -business
strategy development: review the overall strategic vision and mission of the organization,-new
service strategy development: In terms of markets, types of services, profit criteria, time frame
etc. Idea generation: (a) Screen ideas against new service strategy (b) brainstorming, inviting
ideas from employees and customers, lead user research and studying the competitors offerings.
Concept development and evaluation: Test the concept with customers and employees.Business
analysis: Test for profitability and feasibility. (2) IMPLEMENTATION -Service development and
testing: (a) A service blueprint that represents the implementation plan has to be prepared(b)
Conduct service prototype testMarket testing: Test the service and other marketing mix elements.(b) Pilot run the service.(c)
Study the responses-Commercialisation: Train and monitor the service delivery employees for
service quality.Monitor costs and operating effiency. SERVICE BLUEPRINTING:- It is a
pictorial representation that accurately portrays the service system so that it can be easily
understood.,It visually displays the service by depicting the various processes involved in the
service delivery, points of customer contact, the roles of customer and employees etc.
Components of service blueprint: In the diagramatic representation the components could be
are the,-customer actions area ,-onstage contact employee action area ,backstage contact
employee action area,support process Building a Blueprint:(a) Identify the process to be
blueprint(b) Identify the customer or customer segment.(c) Map the process from the
customers point of view.(d) Map contact employee actions, onstage backstage and
technological actions.(e) Link contact activities to needed support functions(f) Add evidence of
service at each customer action step. Q The Integrated Service Marketing Model :-1Initial
Market Research:- Capturing market trends, market sizes, market potentials Market research

can be performed in a formal way (e.g. standardized questionnaires, telephone interviews, )

or informally (checking competitors websites, ask experts, visit trade shows, )Design of
marketing instruments relies on adequate market and customer information 2 Strategic
Service Definition:- Dominated by product, price, and distribution decisions,Product: service
design including the service environment (service encounter), service components, service
production process (including communication),Price: setting prices on the basis of costs,
competitor prices, and demand; price segmentation as major pricing tool (also: Yield
Management)Distribution: importance of the service location variesThe service definition
impacts expectations and
perceptions of consumers 3 Initial Service Communication:- Raising awareness and
convincing customers,Typical instruments are:TV commercials,Advertisements in newspapers,
magazines (also billboards),Direct marketing.Events (incl. trade shows),Sponsoring,Sales
promotions,Online marketing,Public relations,Word-of-mouth,Instruments have to be adjusted
to each other,Initial service communication has a huge impact on consumer expectations 4
Service Production (Co-Creation):- Mainly impacted by the service encounter and
interpersonal communications ,Service performing employees often have a huge influence on
the customers service perception,It is not only important to communicate the service to
consumers (external communication) but also within the organization (internal communication)
- the latter is also called internal marketing,Important to balance employee behavior with
initial communication instruments (integrated marketing communication 5 After Sales
Support:- Communicative instruments to ensure customer satisfaction and to stimulate
customer retention,Ensure that customer perceptions have at least met their
expectations,Otherwise: compliance management 6 Marketing Implementation:Information management plays a crucial role in service marketing ,Information is not only
gathered during initial market research but also during the whole service (marketing)
process,Also, information can be spread not only during the initial communication phase but
also (and especially) during the service production process,Important to ensure an effective
information flow within the company Conclusion :- Coordination of all marketing
instruments ,Achievement of marketing goals,Service marketing offers several opportunities to
balance customer expectations with customer perceptions,Customer satisfaction (service
quality) is a main factor that impacts customer retention,Continuous and constant service
quality accompanied by continuous, constant, and balanced communication efforts lead to the
development of a strong brand image,Growing impact of service marketing on the whole
marketing field Q Difference between physical goods and services Physical goods:1tangible 2 homogeneous 3 Production and distribution are separated from consumption 4 A
thing 5 Core value processed in factory 6 Customers do not participate in the production
process 7 Can be kept in stock 8Transfer of ownership Services:- intangible, heterogeneous,
Production, distribution and consumption are simultaneous processes, An activity or process,
Core value produced in the buyer-seller interaction, Customers participate in production,
Cannot be kept in stock, No transfer of ownership

Approaches to Marketing Strategy:1. Entrepreneurial marketing involves visualizing an opportunity and

constructing and implementing flexible strategies 2. Formulated marketing involves developing formal marketing
strategies and following them closely 3. Intrepreneurial marketing involves the attempt to reestablish an internal
entrepreneurial spirit and refresh marketing strategies and approaches. Porters four basic competitive positioning
strategies; 1. Overall cost leadership strategy is when a company achieves the lowest production and distribution
costs and allow it to lower its prices and gain market share. 2.Differentiation strategy is when a company concentrates
on creating a highly differentiated product line and marketing program so it comes across as an industry class leader. 3.
Focus strategy is when a company focuses its effort on serving few market segments well rather than going after the
whole market. 4. middle-of-the-roaders Porter believed that companies that pursued a clear strategy would achieve
superior performance and that companies without a clear strategy would not succeed. Basic Competitive Strategies:
1. Operational excellence refers to a company providing value by leading its industry in price and convenience by
reducing costs and creating a lean and efficient value delivery system 2. Customer intimacy refers to a company
providing superior value by segmenting markets and tailoring products or services to match the needs of the targeted
customers. 3. Product leadership refers to a company providing superior value by offering a continuous stream of
leading-edge products or services. Product leaders are open to new ideas and solutions and bring them quickly to the
market. Competitive Positions: 1. Market leader is the firm with the largest market share and leads the market price
changes, product innovations, distribution coverage, and promotion spending #Expand total demand : New users ,
New uses , More usage of its products , #Protecting Market Share: Fixing or preventing weaknesses that provide
opportunities to competitors , Maintaining consistent prices that provide value, Keeping strong customer relationships,
Continuous innovation. #Expanding Market Share: Increasing market share in served markets, thus increasing
profitability , Producing high-quality products , Creating good service experiences , Building close customer
relationships 2. Market challengers are firms fighting to increase market share , Challenge the leader with an
aggressive bid for more market share , Play along with competitors and not rock the boat , Second mover advantage
occurs when a market follower observes what has made the leader successful and improves on it , Challenges firms its
own size or smaller 3. Market followers are firms that want to hold onto their market share 4. Market nichers are
firms that serve small market segments not being pursued by other firms , Ideal market niche is big enough to be
profitable with high growth potential and has little interest from competitors. Balancing Customer and
Competitor Orientations :1. Competitor-centered company:spends most of its time tracking competitors moves and
market shares and trying to find ways to counter them , Advantage is that the company is a fighter , Disadvantage is that
the company is reactive.2. Customer-centered company spends most of its time focusing on customer developments
in designing strategies , Provides a better position than competitor-centered company to identify opportunities and build
customer relationships 3.Market-centered company spends most of its time focusing on both competitor and customer
developments in designing strategies. Defensive Marketing Strategies : #Pre-entry Strategies: Signalling , Fortify
and defend , Covering all bases , Continuous improvement, Capacity expansion #Post-entry Strategies: Defend
position before entrant becomes entrenched , Fighting brands , Cross-parry. 1. Position Defense: Least successful of
the defense strategies , A company attempting a fortress defense will find itself retreating from line after line of
fortification into shrinking product markets. Saunders (1987) , e.g. Mercedes was using a position defense strategy
until Toyota launched a frontal attack with its Lexus 2. Mobile Defense : By market broadening and diversification , For
marketing broadening, there is a need to Redefine the business (principle of objective) and Focus efforts on the
competition 3. Flanking Defense: Secondary markets (flanks) are the weaker areas and prone to being attacked , Pay
attention to the flanks , e.g. San Miguel introduced a flanking brand in the Philippines, Gold Eagle, as a defense against
APBs Beerhausen.4.Contraction Defense: Withdraw from the most vulnerable segments and redirect resources to
those that are more defendable , By planned contraction or strategic withdrawal , e.g. Indias TATA Group sold its soaps
and detergents business units to Unilever in 1993 5.Pre-emptive Defense: Detect potential attacks and attack the
enemies first , Let it be known how it will retaliate , Product or brand proliferation is a form of pre-emptive defense e.g.
Seiko has over 2,000 models 6. Counter-Offensive Defense ; Responding to competitors head-on attack by
identifying the attackers weakness and then launch a counter attack , e.g. Toyota launched the Lexus to respond to
Mercedes attack.Offensive Marketing Strategies:Market Challenger Strategies objective is to gain market share and
to become the leader eventually By attacking the market leader , By attacking other firms of the same size , By attacking
smaller firms Types of Attack Strategies:1.Frontal Attack : Seldom work unless The challenger has sufficient firepower (a 3:1 advantage) and staying power and The challenger has clear distinctive advantage , e.g. Japanese and
Korean firms launched frontal attacks in various ASPAC countries through quality, price and low cost . 2.Flank attack:
Attack the enemy at its weak points or blind spots i.e. its flanks , Ideal for challenger who does not have sufficient
resources,e.g. In the 1990s,Yaohan attacked Mitsukoshi and Seibus flanks by opening numerous stores in overseas.

3.
Encirclement attack: Attack the enemy at many fronts at the same time , Ideal for challenger having superior
resources , e.g. Seiko attacked on fashion, features, user preferences and anything that might interest the consumer 4.
Bypass attack: By diversifying into unrelated products or markets neglected by the leader , Could overtake the leader
by using new technologies , e.g. Pepsi use a bypass attack strategy against Coke in China by locating its bottling plants
in the interior provinces. 5.Guerrilla attack: By launching small, intermittent hit-and-run attacks to harass and
destabilize the leader , Usually use to precede a stronger attack , e.g. airlines use short promotions to attack the
national carriers especially when passenger loads in certain routes are low. Market-Follower Strategies Theodore
Levitt in his article, Innovative Imitation argued that a product imitation strategy might be just as profitable as a product
innovation strategy e.g. Product innovationSony , Each follower tries to bring distinctive advantages to its target
market--location, services, financing , Four broad follower strategies Counterfeiter , Cloner , Imitator , Adapter
Market-Nicher Strategies Smaller firms can avoid larger firms by targeting smaller markets or niches that are of little or
no interest to the larger firms , e.g. Logitechmice , Nichers must create niches, expand the niches and protect them ,
e.g. Nike constantly created new niches--cycling, walking, hiking, cheerleading, etc , Market niche may be attacked by
larger firms once they notice the niches are successful Multiple Niching: [A] firm should `stick to its niching but not
necessarily to its niche. That is why multiple niching is preferable to single niching. By developing strength in two or
more niches the company increases its chances for survival Marketing Strategy Development: 1.Strategic Market
Analysis: External Environment PESTLE, Environmental Scanning , Performance Environment 5 Forces,
Competitor and Supplier Analysis , Internal Environment resource analysis , Pestle An appraisal of the Political,
Economic, Social, Technological, Legal and Environment Forces acting on the organizations business and marketing
activities , Competitor Analysis An evaluation of the impact that different forces have on a market and the way
companies compete , SWOT A series of checklists derived from the marketing audit and the PESTLE analysis,
presented as the internal strengths and weaknesses, and the external opportunities or threats 2.Strategic Marketing
Growth Goals : Intensive growth refers to concentrating activities on markets and/or products that are familiar. By
increasing market share or by introducing new products to an established market growth, growth is achieved by
intensifying activities , Integrative growth occurs where an organization continues to work with the same products and
same markets but starts to perform some of the activities in the value chain that were previously undertaken by others ,
Diversification refers to developments outside the current chain of value adding activities. This type of growth brings
new value chain a activities because the firm is operating with new products and in new markets. 3.Strategic Market
Action : Competitive: is achieved when an organization has an edge over advantage its competitors when attracting
buyers. It has a superior value proposition , Generic:there are three generic strategies; overall cost strategies
leadership, differentiation and focus strategies, used in order to develop an advantage , Competitive:Four main
positions can be identified; market leader, positioning challenger, follower and nicher , Strategic:Strategic Competition &
Warfare, Strategic Cooperation intent & Relationships , Marketing:organizing and implementing the strategic action.
Planning. Strategic Marketing Plan : 1.Environmental Analysis (SWOT): Know Your Marketplace , SWOT , Trends
and changes - Market analysis , Segmentation , Prioritizing target markets 2. Identifying Customers : Who Are Your
Customers , customers-Just-in-time inventory , B2B , Manufacturing mentality , Industrialization of agriculture ,
Consumers - Households with fewer people , Active, on-the-go lifestyles , Concern over the health aspect of food, with a
desire for good taste , Less time for meal prep , Know What Is Important to Your Customer . 3. Competitor/Value
Creation Analysis: Make sure you are distinctively different from your competition in areas of importance to your
customers , Competitive analysis , Reallocation of resources if necessary , Positioning . 4. Determining the
Marketing Mix:The set of controllable variables that will accomplish the marketing objectives Product strategy , Place
(distribution) strategy , Promotion (communication) strategy , Pricing strategy . 5. Financial Analysis and
Budgeting: Estimate the demand given the pricing and promotion strategy , Determine expenses associated with
production and marketing , Determine anticipated cash flows , Will strategy cash flow? When , What are the critical
assumptions of the financial analysis and what are the impacts of changes in those assumptions . 6. Implementation
and Control: Focus attention of everyone on delivering what the customer wants , Management of people , Monitoring
and control Marketing Plan: A marketing plan is an outline of price, date and quantity objectives used to generate a
reasonable return for the business given the existing market conditions Steps: Relationship between the business plan
and marketing plan , Production history and expectations , Expected prices , Production costs , Price and date targets ,
Review and evaluation

Competitive Advantage: An advantage over competitors gained by offering consumers greater value than
competitors offer. Competitive Analysis: The process of identifying key competitors; assessing their objectives,
strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid. Steps:
1. Identifying Competitors: Firms face a wide range of competition , Be careful to avoid competitor myopia ,
Methods of identifying competitors - Industry point-of-view , Market point-of-view 2. Assessing Competitors:
Determining competitors objectives , Identifying competitors strategies , Assessing competitors strengths and
weaknesses , Estimating competitors reactions 3. Selecting Competitors to Attack or Avoid: Strong or weak
competitors , Close or distant competitors , Good or Bad competitors Strategic Planning: It is the managerial
process that helps to develop a strategic and viable fit between the firms objectives, skills, resources with the market
opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products .
Marketing Myopia: Industry is a customer satisfying process not a goods producing process , It is important therefore
how you redefine your business Perceptual mapping is a diagrammatic technique used by asset marketers that
attempts to visually display the perceptions of customers or potential customers. Typically the position of a product,
product line, brand, or company is displayed relative to their competition. new product development (NPD) is the
complete process of bringing a new product to market. New product development is described in the literature as the
transformation of a market opportunity into a product available for sale [1] and it can be tangible (that is, something
physical you can touch) or intangible (like a service, experience, or belief). A good understanding of customer needs
and wants, the competitive environment and the nature of the market represent the top required factors for the success
of a new product.[2] Cost, time and quality are the main variables that drive the customer needs. Aimed at these three
variables, companies develop continuous practices and strategies to better satisfy the customer requirements and
increase their market share by a regular development of new products. There are many uncertainties and challenges
throughout the process which companies must face. The use of best practices and the elimination of barriers to
communication are the main concerns for the management of NPD process What is PESTLE Analysis? PESTLE
analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. Moreover, this concept is
used as a tool by companies to track the environment theyre operating in or are planning to launch a new
project/product/service etc. PESTLE is a mnemonic which in its expanded form denotes P for Political, E for Economic,
S for Social, T for Technological, L for Legal and E for Environmental. It gives a birds eye view of the whole environment
from many different angles that one wants to check and keep a track of while contemplating on a certain idea/plan.
Political: These factors determine the extent to which a government may influence the economy or a certain industry.
[For example] a government may impose a new tax or duty due to which entire revenue generating structures of
organizations might change. Political factors include tax policies, Fiscal policy, trade tariffs etc. that a government may
levy around the fiscal year and it may affect the business environment (economic environment) to a great extent.
Economic: These factors are determinants of an economys performance that directly impacts a company and have
resonating long term effects. [For example] a rise in the inflation rate of any economy would affect the way companies
price their products and services. Adding to that, it would affect the purchasing power of a consumer and change
demand/supply models for that economy. Social: These factors scrutinize the social environment of the market, and
gauge determinants like cultural trends, demographics, population analytics etc. An example for this can be buying
trends for Western countries like the US where there is high demand during the Holiday seasonTechnological: These
factors pertain to innovations in technology that may affect the operations of the industry and the market favorably or
unfavorably. This refers to automation, research and development and the amount of technological awareness that a
market possesses. Legal: These factors have both external and internal sides. There are certain laws that affect the
business environment in a certain country while there are certain policies that companies maintain for themselves. Legal
analysis takes into account both of these angles and then charts out the strategies in light of these legislations. For
example, consumer laws, safety standards, labor laws etc. Environmental: These factors include all those that
influence or are determined by the surrounding environment. This aspect of the PESTLE is crucial for certain industries
particularly for exampletourism, farming, agriculture etc. Factors of a business environmental analysis include but are
not limited to climate, weather, geographical location, global changes in climate, environmental offsets etc . Market
segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be
reached more efficiently and effectively with products and services that match their unique needs . Geographic ,
Demographic , Psychographic , Behavioral . market targeting A target market is a group of customers a business has
decided to aim its marketingefforts and ultimately its merchandise towards. A well-defined target market is the first
element of a marketing strategy . Positioning: Product position is the way the product is defined by consumers on
important attributesthe place the product occupies in consumers minds relative to competing products

Important determinants of
organizations overall strategic
position

m
Co

tit
e
p

e
iv

C.R.M: C.R.M is a business strategy that enables organizations , to get closer with their customers , to better serve their
needs , improve customer service , enhance customer satisfaction , maximize customer loyalty & retention. Strategies:
1. Customer Acquisition: Gain the greatest number of new Best customers as early in their lifespan as possible 2.
Customer Retention : Retain and expand your business and relationships with your customers through up-selling,
cross-selling and servicing 3. Customer Loyalty : Offer programs to ensure that your customers happily buy what you
offer only from you 4. Customer Evangelism : Enable loyal customers to become a volunteer sales force 5. Cost
Reduction : Reduce costs related to marketing, sales, customer service and support 6. Improve Productivity 7.
Enhance your e-business strategies . C.R.M. IS IMPORTANT: Every business has to focus on the needs of the
customer & C.R.M. Is the array of processes that help a company to understand the preference or dislikes of individual
customers in order to build lasting relationships , C.R.M. Solutions help to safely store volumes of customer data in an
organized manner for easy to use & access , By analyzing this data business person can determine individual customer
behavior, analyze preference & provide one-to-one services to maximize satisfaction , Such a customer centric
approach helps to augment customer loyalty & increase their value to the company SCM Competitive (Business)
Strategy : 1. Product Development: It relates to Technologies for future operations (via patents) and Set of
products/services , Be the technology leader , Offer many products , Offer products for locals 2. Marketing
and sales strategy: relates to positioning, pricing and promotion of products/services 3. Supply chain management
strategy relates to procurement, transportation, storage and delivery. Strategic Fit: Fit SC to the customer ,
Understanding the Customer Range of demand, Production lot size, Response time , Service level , Product
variety , Innovation , Accommodating poor quality. SUPPLY CHAIN PERFORMANCE ACHIEVING STRATEGIC FIT:
Competitive strategy of an organization is supported by a corresponding supply chain strategy , To achieve strategic fit,
a company must ensure that its supply chain strategy/capability is able to satisfy customer need steps: 1. Qty. of
product needed , Response time acceptable , Variety of product needed , Service level reqd , Price of product ,
Desired rate of innovation in the product by customer.2. how does the firm respond to meet customer demand in
uncertain environment? , Respond to wide range of qty. demanded & meet short lead time , Handle large variety of
products , meet high service level , Handle supply uncertainty. 3.The final step in achieving Strategic Fit is to match

supply chain

responsiveness with uncertain

demand & supply .

Drivers of Supply Chain Performance:

OBSTALCES TO ACHIEVING STRATEGIC FIT: Quantity of the product needed emergency orders , Increasing
variety of products , Decreasing Product Life Cycle , Increasingly Demanding Customers , The response Time that
customers are willing to wait , Globalization , Price of the Product , Number of channels through which a product may be
acquired , Fragmentation of supply chain ownership INVENTORY MANAGEMENT: Key to successful distribution
business , Deals with receipt & movement of goods, valuation of goods, availability of goods at any time, obsolescence
etc , Customer satisfaction depends on inventory management , Reactive inventory system:- responds to inventory
needs by retailer deciding how much to order from wholesalers. Wholesalers in turn order independently from suppliers
SCM SOFTWARE PRODUCTS: WARE HOUSE EXPERT , TRANSPORT EXPERT , ROUTNG EXPERT , YARD
EXPERT , LOADING EXPERT , DELIVERY EXPERT , CONTAINER EXPERT , BILLING EXPERT