Master of Business Administration-MBA Semester 2

MB0046 Marketing Management - 4 Credits

Assignment Set- 2

1 What |s product m|x? What are the strateg|es |nvo|ved |n product m|x
and product ||ne? (10 marks)
Answer
roducL mlx
1he number of lndlvldual producLs produced or sold by an organlzaLlon 1he mlx ls deflned by
Lhe lndusLry and manufacLurlng envlronmenL and managemenL sLraLegles LhaL poslLlon Lhe
company as a speclalLy nlche or broadbased suppller of goods and servlces lnsLances where
Lhe producL mlx varles wldely from perlod Lo perlod ofLen requlres more lnvesLmenL ln faclllLles
and lnvenLory and may resulL ln lower levels of cusLomer servlce lL ls exLremely lmporLanL for
any organlzaLlon Lo have a wellmanaged producL mlx MosL organlzaLlons break down
managlng Lhe producL mlx producL llne and acLual producL lnLo Lhree dlfferenL levels
SLraLegles lnvolved ln producL mlx and producL llne roducLmlx declslons are concerned wlLh
Lhe comblnaLlon of producL llnes offered by Lhe company ManagemenL of Lhe companles
producL mlx ls Lhe responslblllLy of Lop managemenL
Some baslc producLmlx declslons lnclude

1revlewlng Lhe mlx of exlsLlng producL llnes
2addlng new llnes Lo and deleLlng exlsLlng llnes from Lhe producL mlx
3deLermlnlng Lhe relaLlve emphasls on new versus exlsLlng producL llnes ln Lhe mlx
4deLermlnlng Lhe approprlaLe emphasls on lnLernal developmenL versus exLernal acqulslLlon ln
Lhe producL mlx
3gauglng Lhe effecLs of addlng or deleLlng a producL llne ln relaLlonshlp Lo oLher llnes ln Lhe
producL mlx and
6forecasLlng Lhe effecLs of fuLure exLernal change on Lhe companys producL
mlx
roducLllne declslons are concerned wlLh Lhe comblnaLlon of lndlvldual producLs offered
wlLhln a glven llne 1he producLllne manager supervlses several producL managers who are
responslble for lndlvldual producLs ln Lhe llne ueclslons abouL a producL llne are usually
lncorporaLed lnLo a markeLlng plan aL Lhe dlvlslonal level Such a plan speclfles changes ln Lhe
producL llnes and allocaLlons Lo producLs ln each llne
Cenerally producLllne managers have Lhe followlng responslblllLles

1conslderlng expanslon of a glven producL llne
2conslderlng candldaLes for deleLlon from Lhe producL llne
3evaluaLlng Lhe effecLs of producL addlLlons and deleLlons on Lhe proflLablllLy of oLher lLems ln
Lhe llne and
4allocaLlng resources Lo lndlvldual producLs ln Lhe llne on Lhe basls of markeLlng sLraLegles
recommended by producL managers
ueclslons aL Lhe flrsL level of producL managemenL lnvolve Lhe markeLlng mlx for an lndlvldual
brand/producL 1hese declslons are Lhe responslblllLy of a brand manager (someLlmes called a
producL manager) ueclslons regardlng Lhe markeLlng mlx for a brand are represenLed ln Lhe
producLs markeLlng plan 1he plan for a new brand would speclfy prlce level adverLlslng
expendlLures for Lhe comlng year coupons Lrade dlscounLs dlsLrlbuLlon faclllLles and a flve
year sLaLemenL of pro[ecLed sales and earnlngs 1he plan for an exlsLlng producL would focus on
any changes ln Lhe markeLlng sLraLegy Some of Lhese changes mlghL lnclude Lhe producLs
LargeL markeL adverLlslng and promoLlonal expendlLures producL characLerlsLlcs prlce level
and recommended dlsLrlbuLlon sLraLegy Managlng Lhe producL mlx for a company ls very
demandlng and requlres consLanL aLLenLlon 1op managemenL musL provlde accuraLe and
Llmely analysls (8CC) of Lhelr companys producL mlx so Lhe approprlaLe ad[usLmenLs can be
made Lo Lhe producL llne and lndlvldual producLs

2 What |s a d|str|but|on channe|? Lxp|a|n the factors to be cons|dered
wh||e sett|ng up a d|str|but|on channe| (10 marks)
Answer
ulsLrlbuLlon channel
A paLh Lhrough whlch goods and servlces flow ln one dlrecLlon (from vendor Lo Lhe consumer)
and Lhe paymenLs generaLed by Lhem LhaL flow ln Lhe opposlLe dlrecLlon (from consumer Lo Lhe
vendor) A markeLlng channel can be as shorL as belng dlrecL from Lhe vendor Lo Lhe consumer
or may lnclude several lnLerconnecLed lnLermedlarles such as wholesalers dlsLrlbuLors agenLs
reLallers Lach lnLermedlary recelves Lhe lLem aL one prlclng polnL and moves lL Lo Lhe nexL
hlgher prlclng polnL unLll lL reaches Lhe flnal buyer Also called channel of dlsLrlbuLlon or
markeLlng channel ulsLrlbuLlon ls also a very lmporLanL componenL of LoglsLlcs Supply chaln
managemenL ulsLrlbuLlon ln supply chaln managemenL refers Lo Lhe dlsLrlbuLlon of a good
from one buslness Lo anoLher lL can be facLory Lo suppller suppller Lo reLaller or reLaller Lo
end cusLomer lL ls deflned as a chaln of lnLermedlarles each passlng Lhe producL down Lhe
chaln Lo Lhe nexL organlzaLlon before lL flnally reaches Lhe consumer or enduser 1hls process
ls known as Lhe dlsLrlbuLlon chaln or Lhe channel Lach of Lhe elemenLs ln Lhese chalns wlll
have Lhelr own speclflc needs whlch Lhe producer musL Lake lnLo accounL along wlLh Lhose of
Lhe alllmporLanL enduser lacLors Lo be consldered for seLLlng up ulsLrlbuLlon channel 1he
selecLlon of dlsLrlbuLlon ls affecLed by many of facLors whlch play slgnlflcanL role whlle
chooslng Lhe channel for dlsLrlbuLlon lL may lnclude Lhe buylng paLLern of consumer Lype of
Lhe producL ls perlshable or auLo moblle welghL and bulk and lL also depends on Lhe
companys resources 1he maln affecLlng facLors are followlng

CrganlzaLlon ob[ecLlves lf company ob[ecLlve ls Lo have mass appeal and rapld markeL
peneLraLlon

1ype of producL erlshable producLs should have a shorL dlsLrlbuLlon channel lMCC goods
should have a wlde reachlng lnLenslve dlsLrlbuLlon channel naLure and exLenL of markeL
ulsLrlbuLlon Lo consumer markeL or lndusLrlal markeLs would be dlfferenL channel sLrucLures

LxlsLlng channel for comparable producL company may chose lLs exlsLlng channel of
ulsLrlbuLlon for relaLlve producL

8uylng hablL of cusLomers undersLandlng consumer needs and crlLerla for buylng

Channel AvallablllLy Channels may noL be avallable and oLher facLors llke
CusLomer CharacLerlsLlcs
roducL ALLrlbuLes
1ype of CrganlzaLlon
CompeLlLlon
MarkeLlng LnvlronmenLal lorces and CharacLerlsLlcs of lnLermedlarles
Channels

A number of alLernaLe channels of dlsLrlbuLlon may be avallable
ulsLrlbuLor who sells Lo reLallers
8eLaller (also called dealer or reseller) who sells Lo end cusLomers
AdverLlsemenL Lyplcally used for consumpLlon goods

ulsLrlbuLlon channels may noL be resLrlcLed Lo physlcal producLs allce from producer Lo
consumer ln cerLaln secLors slnce boLh dlrecL and lndlrecL channels may be used PoLels for
example may sell Lhelr servlces (Lyplcally rooms) dlrecLly or Lhrough Lravel agenLs Lour
operaLors alrllnes LourlsL boards cenLrallzed reservaLlon sysLems eLc process of Lransfer Lhe
producLs or servlces from roducer Lo CusLomer or end user
1here have also been some lnnovaLlons ln Lhe dlsLrlbuLlon of servlces lor example Lhere has
been an lncrease ln franchlslng and ln renLal servlces Lhe laLLer offerlng anyLhlng from
Lelevlslons Lhrough Lools 1here has also been some evldence of servlce lnLegraLlon wlLh
servlces llnklng LogeLher parLlcularly ln Lhe Lravel and Lourlsm secLors lor example llnks now
exlsL beLween alrllnes hoLels and car renLal servlces ln addlLlon Lhere has been a slgnlflcanL
lncrease ln reLall ouLleLs for Lhe servlce secLor CuLleLs such as esLaLe agencles and bulldlng
socleLy offlces are crowdlng ouL LradlLlonal grocers from ma[or shopplng areas
Channel declslons Channel Sales ls noLhlng buL a chaln for Lo markeL a producL Lhrough
dlfferenL
sources
Channel sLraLegy
CravlLy advenLure
ush and ull sLraLegy
roducL (or servlce)
CosL
Consumer locaLlon
Managerlal concerns
1he channel declslon ls very lmporLanL ln Lheory aL leasL Lhere ls a form of Lradeoff Lhe cosL
of uslng lnLermedlarles Lo achleve wlder dlsLrlbuLlon ls supposedly lower lndeed mosL
consumer goods manufacLurers could never [usLlfy Lhe cosL of selllng dlrecL Lo Lhelr consumers
excepL by mall order Many suppllers seem Lo assume LhaL once Lhelr producL has been sold
lnLo Lhe channel lnLo Lhe beglnnlng of Lhe dlsLrlbuLlon chaln Lhelr [ob ls flnlshed ?eL LhaL
dlsLrlbuLlon chaln ls merely assumlng a parL of Lhe suppllers responslblllLy and lf Lhey have
any asplraLlons Lo be markeLorlenLed Lhelr [ob should really be exLended Lo managlng all Lhe
processes lnvolved ln LhaL chaln unLll Lhe producL or servlce arrlves wlLh Lhe enduser 1hls may
lnvolve a number of declslons on Lhe parL of Lhe suppller
Channel membershlp
Channel moLlvaLlon
MonlLorlng and managlng channels

3 D|scuss the commun|cat|on deve|opment process w|th examp|es (10
marks)
Answer
CommunlcaLlon ls a message undersLood or sharlng of experlence When we refer Lo
communlcaLlon ln Lhe conLexL of developmenL we refer Lo varlous Lypes of communlcaLlon
llke lnLerpersonal group and mass communlcaLlon uevelopmenLlL ls noL easy Lo deflne Lhls as
lL depends on Lhe conLexL uevelopmenL ls abouL change lL ls abouL changlng for Lhe beLLer
lL could be abouL soclal or economlc change for lmprovemenL or progress When we refer Lo
developmenL communlcaLlon lL ls abouL such communlcaLlon LhaL can be used for
developmenL lL ls abouL uslng communlcaLlon Lo change or lmprove someLhlng Pere we use
dlfferenL Lypes of messages Lo change Lhe socloeconomlc condlLlon of people 1hese messages
are deslgned Lo Lransform Lhe behavlour of people or for lmprovlng Lhelr quallLy of llfe
1herefore developmenL communlcaLlon can be deflned as Lhe use of communlcaLlon Lo
promoLe developmenL 1hose who wrlLe or produce programmes on lssues relaLed Lo
developmenL are called developmenL communlcaLors 8ole of a developmenL communlcaLor
1he developmenL communlcaLor plays a very slgnlflcanL role ln explalnlng Lhe developmenL
process Lo Lhe common people ln such a way LhaL lL flnds accepLance

ln order Lo achleve Lhls ob[ecLlve a developmenL communlcaLor Cne
has Lo undersLand Lhe process of developmenL and communlcaLlon should possess knowledge
ln professlonal Lechnlques and should know Lhe audlence
prepare and dlsLrlbuLe developmenL messages Lo mllllons of people ln such a way LhaL Lhey are
recelved and undersLood accepLed and applled lf Lhey accepL Lhls challenge Lhey wlll be able
Lo geL Lhe people Lo ldenLlfy Lhemselves as parL of a socleLy and a naLlon 1hls ldenLlLy wlll help
ln brlnglng human resources LogeLher for Lhe LoLal welfare of Lhe lndlvldual and Lhe
communlLy aL large

uLvLLCMLn1 CCMMunlCA1lCn uSlnC vA8lCuS MLulA

1he hlsLory of developmenL communlcaLlon ln lndla can be Lraced Lo rural radlo broadcasLs ln
Lhe 1940s ln dlfferenL languages Pave you ever heard a rural programme on radlo? lf you come
from a rural area you probably would have heard eople who presenL Lhese programmes
speak ln a language or dlalecL LhaL Lhe people ln your area speak 1he programmes may be
abouL farmlng and relaLed sub[ecLs 1he programme may comprlse of lnLervlews wlLh experLs
offlclals and farmers folk songs and lnformaLlon abouL weaLher markeL raLes avallablllLy of
lmproved seeds and lmplemenLs 1here would also be programmes on relaLed flelds uurlng Lhe
1930s Lhe governmenL sLarLed huge developmenLal programmes LhroughouL Lhe counLryln
facL when uoordarshan sLarLed on 13Lh SepLember 1939 lL was concenLraLlng only on
programmes on agrlculLure Many of you mlghL have seen Lhe 'krlshl uarshan' programme on
uoordarshan LaLer ln 1973 when lndla used saLelllLes for LelecasLlng Lelevlslon programmes ln
whaL ls known as Sl1L (SaLelllLe lnsLrucLlonal 1elevlslon LxperlmenL) Lhe programmes on
educaLlon and developmenL were made avallable Lo 2400 vlllages ln Lhe sLaLes of Andhra
radesh 8lhar karnaLaka Madhya radesh Crlssa and 8a[asLhan As far as Lhe prlnL medla ls
concerned afLer lndependence when Lhe llve ?ear lans were lnlLlaLed by Lhe governmenL for
planned developmenL lL was Lhe newspapers whlch gave greaL lmporLance Lo developmenL
Lhemes 1hey wroLe on varlous governmenL developmenL programmes and how Lhe people
couldmake use of Lhemlf Lhe prlnL medla have conLrlbuLed Lo developmenL communlcaLlon
Lhe elecLronlc medla radlo and Lelevlslon especlally All lndla 8adlo and uoordarshan have
spread messages on developmenL as Lhe maln parL of Lhelr broadcasLs Powever amongsL all
Lhe medla LhaL are used for developmenL communlcaLlon LradlLlonal medla are Lhe closesL Lo
people who need messages of developmenL llke Lhe farmers and workers Such forms of medla
are parLlclpaLory and effecLlve
?ou may have seen consLrucLlon workers cooklng Lhelr meal of dal and rlce over open flres ln
fronL of Lhelr LenLs seL up Lemporarlly on Lhe roadslde 1hey need Lo be educaLed abouL Lhe
values of balanced nuLrlLlon cleanllness hyglene and waLer and sanlLaLlon ln varlous parLs of
lndla groups of volunLeers use sLreeL LheaLre as a medlum for developmenL communlcaLlon
1hls ls done Lhrough humorous sklLs and plays Lhrough whlch Lhe lmporLance of llLeracy
hyglene eLc are enacLed 1he conLenL for Lhe sklLs ls drawn from Lhe audlence's llfe lor
example Lhey are Lold abouL balanced nuLrlLlon" 1hls means supplemenLlng Lhelr sLaple dleL
of dal and rlce wlLh green leafy vegeLables known Lo cure nlghL bllndness an allmenL common
among consLrucLlon workers Slmllarly female consLrucLlon workers and Lhelr chlldren are
LaughL how Lo read and wrlLe
Powever problems ln communlcaLlng a message ln an effecLlve way has been a maLLer of
concern Lo developmenL workers Pow can people be LaughL new skllls aL a low cosL? WhaL
would be a good way Lo deal wlLh senslLlve Loplcs such as healLh lssues? Pow can compllcaLed
new research llke LhaL ln agrlculLure for example be slmpllfled so LhaL ordlnary people can
beneflL? Cne opLlon has been Lhe use of comlcs 8uL ln order Lo achleve Lhe deslred
resulLs Lhese comlcs should be creaLed locally 8uL whaL are 'comlcs' ? ?ou musL have all aL
some polnL of Llme read a comlc Comlcs lnvolve sLory Lelllng uslng vlsuals whlch musL follow
local ldeas and culLure ln order Lo be undersLood correcLly by people 1he lmporLanL Lhlng
abouL comlcs ls LhaL Lhey are made by people on Lhelr own lssues ln Lhelr own language So
readers flnd Lhem closer Lo Lhelr dayLoday llves rogrammes are organlzed ln Lhe remoLe
areas of !harkhand 8a[asLhan 1amllnadu and Lhe norLh LasL Lo provlde Lralnlng Lo rural
communlcaLors Lo enable Lhem Lo use comlcs ln developmenL communlcaLlon lnformaLlon on
senslLlve healLh lssues such as Plv/AluS has been communlcaLed LhroughL Lhe medlum of
comlcs ln several sLaLes Powever you musL undersLand LhaL developmenL communlcaLlon
uslng varlous medla ls posslble only wlLh Lhe acLlve lnvolvemenL of Lhe followlng

(l) uevelopmenL agencles llke deparLmenLs of agrlculLure
(ll) volunLary organlzaLlons
(lll) Concerned clLlzens
(lv) non governmenLal organlzaLlons (nCCs)
Lxamples
Cne of Lhe flrsL examples of developmenL communlcaLlon was larm 8adlo lorums ln Canada
lrom 1941 Lo 1963 farmers meL ln groups each week Lo llsLen Lo speclal radlo programs 1here
were also prlnLed maLerlals and prepared quesLlons Lo encourage group dlscusslon AL flrsL Lhls
was a response Lo Lhe CreaL uepresslon and Lhe need for lncreased food producLlon ln World
War ll 8uL Lhe lorums also dealL wlLh soclal and economlc lssues 1hls model of adulL
educaLlon or dlsLance educaLlon was laLer adopLed ln lndla and Chana

ln 1999 Lhe uS CovernmenL and uC Comlcs planned Lo dlsLrlbuLe 600000 comlc books Lo
chlldren affecLed by Lhe kosovo War 1he comlc books are ln Albanlan and feaLure Superman
and Wonder Woman 1he alm ls Lo Leach chlldren whaL Lo do when Lhey flnd an unexploded
land mlne lefL over from kosovos clvll war 1he comlc books lnsLrucL chlldren noL Lo Louch Lhe
anLlpersonnel mlnes and noL Lo move buL lnsLead Lo call an adulL for help ln splLe of Lhe 1997
CLLawa 1reaLy whlch aLLempLs Lo ban land mlnes Lhey conLlnue Lo klll or ln[ure 20000 clvlllans
each year around Lhe world Slnce 2002 !ournallsLs for Puman 8lghLs a Canadlan based nCC
has operaLed long Lerm pro[ecLs ln Chana Slerra Leone Llberla and Lhe u8 Congo !hr works
dlrecLly wlLh [ournallsLs provldlng monLhly workshops sLudenL sesslons on Lhe [ob Lralnlng
and addlLlonal programs on a counLry by counLry basls

4 Se|ect any mob||e handset and mob||e company and then eva|uate |ts
pos|t|on|ng strengths or weakness |n terms of attr|butes benef|ts va|ues
brand name and brand equ|ty (10 marks)
Answer
AbsLracL
ln Lhe laLe 1990s nokla overLook Lhen leader MoLorola Lo emerge as a behemoLh ln Lhe global
moblle phone lndusLry noklas domlnance conLlnued lnLo Lhe flrsL few years of Lhe 2000s buL
lL suddenly came under LhreaL ln 20032004 when smaller Aslan vendors sLarLed maklng Lhelr
presence felL wlLh beLLer producLs aL lower prlces
1he companys problems also had lnLernal causes and analysLs sald one of Lhe reasons could be
LhaL lL had become Loo complacenL wlLh lLs success and losL lLs aglllLy ln readlng and respondlng
Lo markeL slgnals 1hls case sLudy dlscusses Lhe varlous problems nokla faced ln 20032004
lncludlng Lhe companys Lardlness ln lnLroduclng Lhe clamshell phones LhaL had become very
popular and lLs reslsLance Lo manufacLurlng operaLor speclflc handseLs lL also dlscusses Lhe
efforLs nokla made Lo recover lLs markeL once lL reallzed LhaL lLs performance was sllpplng 1he
case concludes wlLh an analysls of Lhe challenges Lhe company faced ln Lhe fuLure and Lhe
varlous opLlons ahead of lL
lssues
1o undersLand Lhe dlfflculLles faced by an ersLwhlle glanL ln Lhe global moblle phone lndusLry ln
20032004 1o appreclaLe Lhe lmporLance of lnnovaLlon ln a dynamlc and volaLlle lndusLry
1o analyze Lhe effecL of changlng markeL condlLlons on companles 1o appreclaLe Lhe
lmporLance of keeplng abreasL wlLh changlng markeL condlLlons and adapLlng Lo Lhem speedlly
1o examlne fuLure challenges LhaL Lhe company faced and Lhe varlous opLlons avallable Lo lL
We wanL Lo be Lhe company LhaL brlngs Lhls lndusLry Lo Lhe nexL phase And lf we have a llLLle
blL of a bump ln Lhe road ln 2004 LhaLs lmmaLerlal !orma Clllla CLC of nokla ln mld 20041
nokla dldnL have Lhe coolness facLor 1hey dldnL really do fllp phones Lhey were a llLLle laLe
wlLh cameras and Lhey dldnL push Lhem Coolness ln Lhe consumer space ls a blg deal and
Lhey were sLodgy !ack Cold vlce presldenL of MeLa Croup a
ConnecLlcuLbased Lechnology consulLlng flrm ln 20032
oslLlve Slgns 1he announcemenL of nokla CorporaLlons (nokla) quarLerly resulLs ln Aprll 2003
was a much awalLed evenL as far as Lhe global moblle phone lndusLry was concerned 1he
company whlch had emerged as an lndusLry leader ln Lhe laLe 1990s had run lnLo rough
weaLher ln 20032004 wlLh sales and earnlngs falllng below expecLed levels So much so LhaL
when Lhe company announced poor resulLs ln Lhe flrsL quarLer of 2004 several analysLs
declared LhaL lL was Lhe beglnnlng of Lhe end of noklas domlnance ln Lhe lndusLry
Powever nokla was noL ready Lo Lhrow ln Lhe Lowel qulLe so easlly 1he company puL up a
Lough flghL over Lhe second half of 2004 Lo recapLure lLs losL poslLlon ln Lhe markeL lL
lnLroduced several new models modlfled deslgns and aggresslvely promoLed producLs wlLh a
vlew Lo lncreaslng lLs markeL share whlch had fallen Lo a low of around 28 percenL ln early
2004 from an average of 33 percenL over Lhe prevlous Lhree years noklas efforLs sLarLed
paylng off by laLe 2004 1he company announced saLlsfacLory resulLs for Lhe fourLh quarLer of
2004 and markeL share for Lhe year 2004 also sLablllzed aL 32 percenL by Lhe end of Lhe year
!orma Clllla (Clllla) noklas CLC whlle acknowledglng LhaL 2004 had been a challenglng year
declared LhaL Lhe company was polsed Lo recover ln 2003 Cllllas predlcLlon came Lrue when
Lhe company announced beLLer Lhan expecLed resulLs for Lhe flrsL quarLer of 2003 endlng
March 31 ln Lhe flrsL quarLer of 2003 noklas sales lncreased 17 percenL over Lhe
correspondlng quarLer of Lhe prevlous year Lo $963 bllllon neL proflL rose 18 percenL Lo $11
bllllon Clobal handseL sales rose 11 percenL prompLlng nokla Lo lncrease lLs esLlmaLe of Lhe
slze of Lhe global handseL markeL ln 2003 by 100 mllllon Lo 740 mllllonCommenLlng on noklas
lmproved performance !ussl PyoLy (PyoLy) an analysL aL securlLles flrm llM SecurlLles
sald noklas resulL was deflnlLely beLLer Lhan expecLed and lL shows LhaL lLs a growLh
company agaln3 Powever desplLe Lhese poslLlve slgns several analysLs wondered wheLher
nokla would ever be able Lo domlnaLe Lhe lndusLry as lL dld ln Lhe laLe 1990s and Lhe
flrsL Lwo years of Lhe new cenLury especlally ln llghL of Lhe aggresslve compeLlLlon posed by
several new Aslan companles as well as more esLabllshed players llke MoLorola and Sony
Lrlcsson 8ackground uesplLe Lhe relaLlvely recenL emergence of Lhe moblle phone lndusLry
globally
noklas company hlsLory goes back Lo Lhe 1800s
1he company was flrsL seL up on Lhe banks of Lhe rlver nokla (afLer whlch lL was named) ln
souLhwesLern llnland ln 1863 by lredrlk ldesLam who was a mlnlng englneer 1he orlglnal
nokla was a foresL lndusLry enLerprlse LhaL prlmarlly manufacLured paper ln 1898 Carl Penrlk
Lampen a shopkeeper and !L Segerberg an englneer seL up Lhe llnnlsh 8ubber Works LLd
(l8W) Lo manufacLure rubber and assoclaLed chemlcals ln 1912 konsLanLln WlksLrom an
englneer seL up Lhe llnnlsh Cable Works (lCW) Lo manufacLure elecLrlcal cables for llghLlng
purposes 1hese Lhree companles had buslness deallngs wlLh each oLher Lhrough Lhe early
1900s and evenLually merged ln 1967 Lo form Lhe nokla CorporaLlon 1he new company had
four ma[or buslnesses foresLry rubber cable and elecLronlcs
8y 1980 nokla was a large buslness conglomeraLe wlLh several buslnesses ranglng from Llres Lo
Lelevlslons and compuLers Lo LelecommunlcaLlons LxcerpLs 1he 8lse Lo Lhe 1op
nokla drew on lLs experlence of seLLlng up nordlc cellular neLworks (whlch were more
advanced Lhan Lhose used by !apan Lhe resL of Lurope and Lhe uS aL LhaL Llme) Lo successfully
adopL Lhe CSM sLandard 1he company was llsLed on Lhe new ?ork SLock Lxchange ln 1994
Cver Lhe 1990s nokla became one of Lhe mosL successful moblle phone manufacLurers ln Lhe
world and began Lo enLer nonScandlnavlan markeLs as well
nokla was also one of Lhe flrsL moblle manufacLurers Lo reallze Lhe lmporLance of Lhe deslgn
elemenL ln moblle phones and lLs phones were more aesLheLlcally deslgned Lhan Lhose of
compeLlLors ln 1998 nokla overLook MoLorola Lo become Lhe largesL moblle manufacLurer ln
Lhe world ueslgned for lnnovaLlon
nokla was Lhe flrsL moblle phone manufacLurer Lo reallze ln Lhe laLe 1990s LhaL phones no
longer played only a funcLlonal role Lhey were also becomlng fashlon symbols unLll nokla
began emphaslzlng Lhe deslgn aspecL moblle phones were bulky brlckllke devlces wlLh an
exLernal anLenna and a sLandard keypad ManufacLurers emphaslzed funcLlonallLy over
aesLheLlc appeal nokla broke new ground ln 1999 when lL launched lLs 8200 handseL on Lhe
caLwalk aL a arls fashlon week
1he uecllne
ln mld2004 1he LconomlsL wroLe When a flrm domlnaLes lLs markeL especlally one LhaL ls
drlven by consLanL Lechnologlcal advances lL rlsks becomlng so flxaLed wlLh Lrylng Lo ward off
whaL lL reckons Lo be lLs mosL powerful challenger LhaL lL leaves lLself vulnerable Lo aLLack from
oLher dlrecLlonsAnalysLs sald Lhls sLaLemenL accuraLely characLerlzed whaL happened
wlLh nokla
ln Lhe early 2000s MlcrosofL Corp (MlcrosofL) announced lLs declslon Lo enLer Lhe moblle
phones markeL 1he announcemenL seL alarm bells rlnglng ln nokla as MlcrosofL had Lhe
repuLaLlon of belng an aggresslve compeLlLor LfforLs aL 8ecovery Soon afLer announclng
dlsappolnLlng resulLs ln Lhe flrsL quarLer of 2004 nokla reallzed LhaL lL was ln Lrouble and began
Lo Lake sLeps Lo correcL maLLers 1he company noL only cuL prlces on cerLaln handseLs Lo
lncrease markeL share buL also flneLuned lLs porLfollo Lo ad[usL producLs Lo meeL markeL
needs lL kllled some ouLmoded models and broughL forward Lhe launch of several oLhers
lncludlng a number of clamshell phones
ln !une 2004 nokla launched flve new models of phones ouL of whlch Lhree were clamshells
noklas new models were Lhe 6260 model a clamshell whose cover noL only fllpped open buL
also swlveled Lhe 6630 whlch nokla clalmed was Lhe worlds smallesL camera phone deslgned
for 3C neLworks anoLher clamshell Lhe 6170 and Lwo low end models Lhe 2630 and 2600
Several oLher models were also markeLed aggresslvely
lor lnsLance Lhe low end 1100 model for emerglng markeLs and Lhe 6230 mld range model
became very popular ln 2004 (1he 6230 was so popular ln some markeLs LhaL aL Llmes nokla
was noL able Lo meeL Lhe demand) A Challenglng luLureuesplLe noklas laudable efforLs ln Lhe
dlrecLlon of recapLurlng lLs losL markeL poslLlon Lhe oplnlons of analysLs on lLs Lurnaround were
mlxed Whlle Lhe companys deLracLors belleved LhaL nokla had losL lLs compeLlLlve
advanLage ln Lhe moblle phone markeL lLs supporLers sald Lhe companys lnherenL sLrengLhs
and sLable flnanclal poslLlon would help lL sall Lhrough Lhe dlfflculLles lL had faced ln 20032004
Lo recover ln Lhe fuLure Powever mosL of Lhem agreed LhaL Lhe moblle phone lndusLry was
undergolng a vasL change ln Lhe early 2000s moblle phones were expecLed Lo perform a
varleLy of funcLlons ln addlLlon Lo looklng sLyllsh and belng easy Lo operaLe noklas compeLlLors
had undersLood Lhls and were ln Lhe process of launchlng several models LhaL were sLyle
sLaLemenLs ln Lhemselves

S What |s reta|||ng? Lxp|a|n the funct|ons and d|fferent types of
reta|||ng w|th |ts key features (10 marks)
Answer
8eLalllng
8eLall conslsLs of Lhe sale of goods or merchandlse from a flxed locaLlon such as a deparLmenL
sLore bouLlque or klosk or by mall ln small or lndlvldual loLs for dlrecL consumpLlon by Lhe
purchaser1 8eLalllng may lnclude subordlnaLed servlces such as dellvery urchasers may be
lndlvlduals or buslnesses ln commerce a reLaller buys goods or producLs ln large quanLlLles
from manufacLurers or lmporLers elLher dlrecLly or Lhrough a wholesaler and Lhen sells smaller
quanLlLles Lo Lhe enduser 8eLall esLabllshmenLs are ofLen called shops or sLores 8eLallers are
aL Lhe end of Lhe supply chaln ManufacLurlng markeLers see Lhe process of reLalllng as a
necessary parL of Lhelr overall dlsLrlbuLlon sLraLegy 1he Lerm reLaller ls also applled where a
servlce provlder servlces Lhe needs of a large number of lndlvlduals such as a publlc uLlllLy llke
elecLrlc power
1ypes of reLallers by markeLlng sLraLegy
ueparLmenL sLores very large sLores offerlng a huge assorLmenL of sofL and hard goods
ofLen bear a resemblance Lo a collecLlon of speclalLy sLores A reLaller of such sLore carrles
varleLy of caLegorles and has broad assorLmenL aL average prlce 1hey offer conslderable
cusLomer servlce
ulscounL sLores Lend Lo offer a wlde array of producLs and servlces buL Lhey compeLe malnly
on prlce offers exLenslve assorLmenL of merchandlse aL affordable and cuLraLe prlces normally
reLallers sell less fashlonorlenLed brands
SupermarkeLs sell mosLly food producLs
Warehouse sLores warehouses LhaL offer lowcosL ofLen hlghquanLlLy goods plled on palleLs
or sLeel shelves warehouse clubs charge a membershlp fee
varleLy sLores or dollar sLores Lhese offer exLremely lowcosL goods wlLh llmlLed selecLlon
uemographlc reLallers LhaL alm aL one parLlcular segmenL (eg hlghend reLallers focuslng on
wealLhy lndlvlduals)
MomAndop (or klrana SLores as Lhey call Lhem ln lndla) ls a reLall ouLleL LhaL ls owned and
operaLed by lndlvlduals 1he range of producLs are very selecLlve and few ln numbers 1hese
sLores are seen ln local communlLy ofLen are famllyrun buslnesses 1he square feeL area of Lhe
sLore depends on Lhe sLore holder
SpeclalLy sLores A Lyplcal speclallLy sLore glves aLLenLlon Lo a parLlcular caLegory and provldes
hlgh level of servlce Lo Lhe cusLomers A peL sLore LhaL speclallzes ln selllng dog food would be
regarded as a speclalLy sLore Powever branded sLores also come under Lhls formaL lor
example lf a cusLomer vlslLs a 8eebok or Cap sLore Lhen Lhey flnd [usL 8eebok and Cap producLs
ln Lhe respecLlve sLores
Ceneral sLore a rural sLore LhaL supplles Lhe maln needs for Lhe local communlLy
Convenlence sLores ls essenLlally found ln resldenLlal areas 1hey provlde llmlLed amounL of
merchandlse aL more Lhan average prlces wlLh a speedy checkouL 1hls sLore ls ldeal for
emergency and lmmedlaLe purchases
PypermarkeLs provldes varleLy and huge volumes of excluslve merchandlse aL low marglns
1he operaLlng cosL ls comparaLlvely less Lhan oLher reLall formaLs A classlc example ls Lhe
MeLro` ln 8angalore
SupermarkeLs ls a self servlce sLore conslsLlng malnly of grocery and llmlLed producLs on non
food lLems 1hey may adopL a PlLo or an LuL sLraLegy for prlclng 1he supermarkeLs can be
anywhere beLween 2000040000 square feeL
Lxample SA8` supermarkeL
Malls has a range of reLall shops aL a slngle ouLleL 1hey endow wlLh producLs food and
enLerLalnmenL under a roof Lxample Slgma mall and Caruda mall ln 8angalore Lxpress
Avenue ln Chennal CaLegory klllers or CaLegory SpeclallsL 8y supplylng wlde assorLmenL ln a
slngle caLegory for lower prlces a reLaller can klll LhaL caLegory for oLher reLallers lor few
caLegorles such as elecLronlcs Lhe producLs are dlsplayed aL Lhe cenLre of Lhe sLore and sales
person wlll be avallable Lo address cusLomer querles and glve suggesLlons when requlred CLher
reLall formaL sLores are forced Lo reduce Lhe prlces lf a caLegory speclallsL reLall sLore ls presenL
ln Lhe vlclnlLy lor example al LlecLronlcs` sLore ln 8angalore 1aLa Croma
LLallers 1he cusLomer can shop and order Lhrough lnLerneL and Lhe merchandlse are dropped
aL Lhe cusLomers doorsLep Pere Lhe reLallers use drop shlpplng Lechnlque 1hey accepL Lhe
paymenL for Lhe producL buL Lhe cusLomer recelves Lhe producL dlrecLly from Lhe manufacLurer
or a wholesaler 1hls formaL ls ldeal for cusLomers who do noL wanL Lo Lravel Lo reLall sLores
and are lnLeresLed ln home shopplng Powever lL ls lmporLanL for Lhe cusLomer Lo be wary
abouL defecLlve producLs and non secure credlL card LransacLlon Lxample Amazon and Lbay
vendlng Machlnes 1hls ls an auLomaLed plece of equlpmenL whereln cusLomers can drop ln Lhe
money ln machlne and acqulre Lhe producLs lor example SofL drlnks vendlng aL 8angalore
AlrporL Some sLores Lake a no frllls approach whlle oLhers are mldrange or hlgh end
dependlng on whaL lncome level Lhey LargeL CLher Lypes of reLall sLore lnclude
AuLomaLed 8eLall sLores are self servlce roboLlc klosks locaLed ln alrporLs malls and grocery
sLores 1he sLores accepL credlL cards and are usually open 24/7 Lxamples lnclude ZoomShops
and 8edbox
8lgbox sLores encompass larger deparLmenL dlscounL general merchandlse and warehouse
sLores
Convenlence sLore a small sLore ofLen wlLh exLended hours sLocklng everyday or roadslde
lLems
Ceneral sLore a sLore whlch sells mosL goods needed Lyplcally ln a rural area 8eLallers can opL
for a formaL as each provldes dlfferenL reLall mlx Lo lLs cusLomers based on Lhelr cusLomer
demographlcs llfesLyle and purchase behavlour A good formaL wlll lend a hand Lo dlsplay
producLs well and enLlce Lhe LargeL cusLomers Lo spawn sales
luncLlons of 8eLalllng
8eLallers play a slgnlflcanL role as a condulL beLween manufacLurers wholesalers suppllers and
consumers ln Lhls conLexL Lhey perform varlous funcLlons llke sorLlng breaklng bulk holdlng
sLock as a channel of communlcaLlon sLorage adverLlslng and cerLaln addlLlonal servlces
SorLlng ManufacLurers usually make one or a varleLy of producLs and would llke Lo sell Lhelr
enLlre lnvenLory Lo a few buyers Lo redu7ce cosLs llnal consumers ln conLrasL prefer a large
varleLy of goods and servlces Lo choose from and usually buy Lhem ln small quanLlLles 8eLallers
are able Lo balance Lhe demands of boLh sldes by collecLlon an assorLmenL of goods from
dlfferenL sources buylng Lhem ln sufflclenLly large quanLlLles and selllng Lhem Lo consumers ln
small unlLs 1he above process ls referred Lo as Lhe sorLlng process 1hrough Lhls process
reLallers underLake acLlvlLles and perform funcLlons LhaL add Lo Lhe value of Lhe producLs and
servlces sold Lo Lhe consumer SupermarkeLs ln Lhe uS offer onand average 13000 dlfferenL
lLems from 300 companles CusLomers are able Lo choose from a wlde range of deslgns slzes
and brands from [usL one locaLlon lf each manufacLurer had a separaLe sLore for lLs own
producLs cusLomers would have Lo vlslL several sLores Lo compleLe Lhelr shopplng Whlle all
reLallers offer an assorLmenL Lhey speclallze ln Lypes of assorLmenL offered and Lhe markeL Lo
whlch Lhe offerlng ls made WesLslde provldes cloLhlng and accessorles whlle a chaln llke
nllglrls speclallzes ln food and bakery lLems Shoppers' SLop LargeLsLhe ellLe urban class whlle
anLaloons ls LargeLed aL Lhe mlddle class
8reaklng 8ulk
8reaklng bulk ls anoLher funcLlon performed by reLalllng 1he word reLalllng ls derlved from Lhe
lrench word reLaller meanlng 'Lo cuL a plece off' 1o reduce LransporLaLlon cosLs
manufacLurers and wholesalers Lyplcally shlp large carLons of Lhe producL whlch are Lhen
Lallored by Lhe reLallers lnLo smaller quanLlLles Lo meeL lndlvldual consumpLlon needs
Poldlng SLock
8eLallers also offer Lhe servlce of holdlng sLock for Lhe manufacLurers 8eLallers malnLaln an
lnvenLory LhaL allows for lnsLanL avallablllLy of Lhe producL Lo Lhe consumers lL helps Lo keep
prlces sLable and enables Lhe manufacLurer Lo regulaLe producLlon Consumers can keep a small
sLock of producLs aL home as Lhey know LhaL Lhls can be replenlshed by Lhe reLaller and can
save on lnvenLory
carrylng cosLs
AddlLlonal Servlces
8eLallers ease Lhe change ln ownershlp of merchandlse by provldlng servlces LhaL make lL
convenlenL Lo buy and use producLs rovldlng producL guaranLees afLersales servlce and
deallng wlLh consumer complalnLs are some of Lhe servlces LhaL add value Lo Lhe acLual producL
aL Lhe reLallers' end 8eLallers also offer credlL and hlrepurchase faclllLles Lo Lhe cusLomers Lo
enable Lhem Lo buy a producL now and pay for lL laLer 8eLallers flll orders prompLly process
dellver and lnsLall producLs Salespeople are also employed by reLallers Lo answer querles and
provlde addlLlonal lnformaLlon abouL Lhe dlsplayed producLs 1he dlsplay lLself allows Lhe
consumer Lo see and LesL producLs before acLual purchase 8eLall essenLlally compleLes
LransacLlons wlLh cusLomers
Channel of CommunlcaLlon
8eLallers also acL as Lhe channel of communlcaLlon and lnformaLlon beLween Lhe wholesalers or
suppllers and Lhe consumers lrom adverLlsemenLs salespeople and dlsplay shoppers learn
abouL Lhe characLerlsLlcs and feaLures of a producL or servlces offered ManufacLurers ln Lhelr
Lurn learn of sales forecasLs dellvery delays and cusLomer complalnLs 1he manufacLurer can
Lhen modlfy defecLlve or unsaLlsfacLory merchandlse and servlces
1ransporL and AdverLlslng luncLlons
Small manufacLurers can use reLallers Lo provlde asslsLance wlLh LransporL sLorage adverLlslng
and prepaymenL of merchandlse 1hls also works Lhe oLher way round ln case Lhe number of
reLallers ls small 1he number of funcLlons performed by a parLlcular reLaller has a dlrecL
relaLlon Lo Lhe percenLage and volume of sales needed Lo cover boLh Lhelr cosLs and proflLs

6 a What |s CkM? What are |ts ob[ect|ves?
b Wr|te a short note on 8rand deve|opment

Answer CkM sLands for Customer ke|at|onsh|p Management lL ls a process or meLhodology
used Lo learn more abouL cusLomers' needs and behavlors ln order Lo develop sLronger
relaLlonshlps wlLh Lhem 1here are many Lechnologlcal componenLs Lo C8M buL Lhlnklng abouL
C8M ln prlmarlly Lechnologlcal Lerms ls a mlsLake 1he more useful way Lo Lhlnk abouL C8M ls
as a process LhaL wlll help brlng LogeLher loLs of pleces of lnformaLlon abouL cusLomers sales
markeLlng effecLlveness responslveness and markeL Lrends CkM helps buslnesses use
Lechnology and human resources Lo galn lnslghL lnLo Lhe behavlor of cusLomers and Lhe value
of Lhose cusLomers
Cb[ect|ves of CkM
C8M Lhe Lechnology along wlLh human resources of Lhe company enables Lhe company Lo
analyze Lhe behavlor of cusLomers and Lhelr value 1he maln areas of focus are as Lhe name
suggesLs customer re/otionship and the monoqement of re/otionship and Lhe maln
ob[ecLlves Lo lmplemenL C8M ln Lhe buslness sLraLegy are
1o slmpllfy markeLlng and sales process
1o make call cenLers more efflclenL
1o provlde beLLer cusLomer servlce
1o dlscover new cusLomers and lncrease cusLomer revenue
1o cross sell producLs more effecLlvely
1he C8M processes should fully supporL Lhe baslc sLeps of customer /ife cyc/e 1he baslc
sLeps are
ALLracLlng presenL and new cusLomers
Acqulrlng new cusLomers
Servlng Lhe cusLomers
llnally reLalnlng Lhe cusLomers

8rand deve|opment
A plan Lo lmprove Lhe performance of a parLlcular producL or servlce lor example as parL of
brand developmenL a flrm may lnlLlaLe a new adverLlslng campalgn LhaL lncludes free samples