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INDIAN INSTITUTE OF PLANNING AND MANAGEMENT NEW DELHI

PROJECT REPORT ON

SHIMADZU ANALYTICAL PVT. LTD


AWARENESS OF LINEN IN GLOBAL

MARKET

Submitted by AMIT KUMAR PANDEY DEL-5A,DB-1275 IIPM(New Delhi)

Under The guidance of


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Mr. PRAVIN TYAGI (Asst.Marketing Manager)

Acknowledgement
Behind every successful venture, there is some hand .I pay my all regard to all those people who are directly or indirectly with me for the

encouragement and because of their immense help I could complete my project successfully.
In my prior list, I would like to express my profound sense of gratitude to the authorities of SHIMADZU ANALYTICAL PVT, LTD especially Mr. PRAVIN TYAGI(Asst manager, Industrial Group) for providing me the platform and track for the purpose and under whose guidance I was able to complete my project and got help for the same at each and every step .

I would also like to express my profound sense of gratitude to the authorities of INDIAN INSTITUTE OF PLANNING AND MANAGEMENT,NEW DELHI for giving me such opportunity and providing me better guidance. Last but not the least; I would also like to thank all the employees of SHIMADZU & others who helped me directly or indirectly towards completion of my project.

TABLE OF CONTENTS
TOPIC
DECLARATION EXECUTIVE SUMMARY EMBLEM OF SHIMADZU PRESIDENTS MESSAGE COMPANYS HISTORY CORPORATE PROFILE BUSINESS OUTLINE(PRODUCTS AND APPLICATIONS) OBJECTIVES OF THE STUDY OBJECTIVES OF THECREDIT POLICY CREDIT SALES A MARKETING TOOL CONSUMER BEHAVIOUR CONCEPT DEMOGRAPHICS SUGGESTION AND RECOMENDATION ANALYSIS & ITS INTERPRETASION FINDINGS AND CONCLUSIONS BIBLIOGRAPHY AND WEBLIOGRAPHY QUESTIONER 11 12 13-21 22 23 24-29 30-38 39 40-41 42-45 46-47 48 49

PAGE NO.
5 6 7 8-9 10-

DECLARATION
I, Amit Kumar Pandey, student of Indian Institute Of Planning And Management (IIPM), New Delhi, here by state that this report, submitted in partial fulfillment of requirement for the Master of Business Administration (MBA) Programme, is an original work carried out by me under the guidance and supervision of Mr. PRAVIN TYAGI (Asst. Manager, Industrial Group SHIMADZU Ltd.) and declare that the project, or any part it thereof, has not been submitted previously for any degree/diploma course of any institute/university elsewhere.

Date: (Amit Kumar Pandey) Place:

Executive Summary
The study concentrates on the scanning of the Viability of distribution of products and payment trends of various customers from different category as,

Regular Customers to whom secured service has been provided, New Customers to who company have to influence through its service.

It provides efficient platform in rating the customer and helps in deciding there on which category is the best in service and beneficial for the company. The format designed for data presentation on the earlier and present services of company, is compact and effective record of current customers carrying every vital information about them. The outsourcing data and feedback facilitates, helps in the comparative analysis of the different customers in easy way. The scope of this project is wide as it also covers important analysis like CUSTOMER ANALYSIS, SWOT ANALYSIS and competitor of the company.

The study has surveyed the various publicly available websites of SHIMADZU and important personals of the organization were met during the course of the study.

Shimadzu's Emblem

The corporate emblem, "the Circle Crossed" originates with Genzo Shimadzu, the founder of Shimadzu Corporation, who decided to use it as our trademark in 1912. Later, the emblem was scientifically re-designed into the present trademark. The solid circular margin has a width of 1/8 the outer diameter of the circle while the cross bars are another 10% thicker. This design is based on scientific data used to optimize the beauty of uniformity as the dimensional ratios used correct the illusion of difference in widths leading to a pleasing perception of balance. In late 16th century, when Yoshihiro Shimadzu, the lord of Satsuma Province, passed through Banshu Himeji to visit his land newly given to him by Hideyoshi Toyotomi, one of
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the three warriors who reunited Japan, Sohbei Inoue, an ancestor of Genzo Shimadzu was given a role to attend the lord. In recognition of the services of Sohbei Inoue, it is reported that Lord Yoshihiro Shimadzu allowed him to use the name of Shimadzu and the family emblem, "the Circle Crossed."

President's Message Striving to become a true global business

We have strived to contribute to people's health and well-being since our inception in 1875. To do this, we have consistently challenged ourselves to develop state-of-the-art technology that creates solutions and new values in a variety of fields. This desire is enshrined in our corporate philosophy: "Contributing to Society through Science and Technology," and we are unwaveringly committed to realizing our core management principle: "For the Well-being of both Mankind and the Earth." Shimadzu presently offers a multitude of products, encompassing analytical and measuring instruments, medical systems and equipment, aircraft equipment, and industrial equipment, across a wide range of fields, as well as meticulous, responsive service. In addition to these core businesses, we continue to explore new ventures that will positively impact society in the future.
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Acknowledging the realities of an aging society and heightened interest in the well-being of individuals, and in response to the goals of ultra-early diagnosis and treatment in the field of next-generation medicine, we are focusing on the development of molecular imaging technology to enable detection of subtle symptoms before the onset of full-blown diseases. In addition, we fully support the realization of dreams in other technological fields. For example, in the environmental field, we are developing cleanup technologies which will not require the removal of existing buildings to rehabilitate polluted underground soil. In the field of industrial measurements, we are developing combustion measurement technology for automobile engines, an innovation that will further reduce fuel consumption. Looking forward, we will continue to cultivate new business opportunities in such fields as the global environment, energy, automotives, and IT, by promoting leading-edge seed technology development. In addition to our R&D objectives, Shimadzu is keenly aware that the 21st century is an age of explosive globalization in which barriers are tumbling, and the world is steadily becoming a single vast marketplace. Therefore, in addition to our networks in the United States, Europe, Asia, and China, Shimadzu is now expanding into Brazil, India, Russia, and other regions. We are setting up production, sales, and service bases throughout the world, striving to become a truly global business by perfecting an organizational structure which ensures that the various needs of our customers in all regions are swiftly addressed. Our goal from this point is to accelerate business reform; this includes strengthening our marketing power, achieving new businesses, and improving business structure while steadfastly adhering to customer feedback and ascertaining global affairs. Keeping in mind our corporate slogan, Best for our customers, we at Shimadzu aim to develop into a true global business, one that is welcomed around the world.

Company History
1875
Genzo Shimadzu (1839-1894) began to manufacture physical and chemical instruments. It was the first step of Shimadzu s activity.then in,1877,Genzo Shimadzu manufactured a balloon, and successfully launched it, with a person in it, from the Old Imperial Palace in Kyoto.After

that in 1896 Umejiro Shimadzu assumed the name of his father, Genzo Shimadzu, and in
cooperation with his younger brother, succeeded taking roentgenograms for the first time in Japan. It was the year after Dr Roentgen discovered X-rays.After which in 1909 ,they built a medical X-ray apparatus for the first time in Japan. Shimadzu was reorganised as a joint-stock Company. Started manufacture of material testing machines.In 1919 , Sanjo Works, the main factory today.In 1930 ,Genzo Shimadzu, Jr (1869-1951) was invited to the Emperor s dinner party as one of the ten greatest inventors of Japan.After which in 1934, shimadzu Developed spectrographs for the first time in Japan.In 1936, they Started manufacture of aircraft equipment.

In1947, they Started manufacture of electron microscopes for the first time in Japan. In 1951, Former Emperor Hirohito visited Sanjo Works, the main factory. 1956,SHIMADZU Developed gas chromatographs for the first time in Japan.
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1971, Analytical Applications Centre. (Now Application Development Center) 1975, SHIMADZU SCIENTIFIC INSTRUMENTS, INC. in U.S.A. 1979, SHIMADZU PRECISION INSTRUMENTS, INC. in U.S.A. 1983,SHIMADZU Started manufacture of analytical instruments in U.S.A.
Started Production Engineering Laboratory.

1984,they Developed MRI systems and Started manufacture of opto-electronic equipment. 1985,They started Atsugi Works, Kanagawa Prefecture.. 1987,Started manufacture of analytical instruments in F.R. Germany. 1989, The most important they acquired KRATOS GROUP PLC., U.K 1992 TOSHBRO SHIMADZU PVT, LTD., a joint venture, in India.
A joint venture, Beijing Shimadzu Medical Equipment co., Ltd., in China.1993, they Developed lactic acid based bio-degradable plastic. .1996-1999 * SHIMADZU PHILIPPINES MANUFACTURING INC. * SHIMADZU U.S.A. MANUFACTURING INC. * SHIMADZU MEDICAL SYSTEMS (OCEANIA) Pty Ltd. * SHIMANE SHIMADZU CORPORATION. in Japan. * SHIMADZU VIETNAM MEDICAL HIGH-TECH COMPANY LTD. * SHIMADZU (HONG KONG) LTD. *SHIMADZU (SUZHOU) INSTRUMENTS MANUFACTURING. CO., LTD. in China.

In 2002,Mr. Koichi Tanaka was awarded the Nobel Prize in Chemistry. 2003,SHIMAZDU Developed world first direct-conversion Flat Panel Ditector for the
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diagnostic X-ray imaging system.

In 2005, Celebrated the 130th anniversary of foundation. In 2006, Completed new analytical instruments plant in Sanjo Works.
In 2008, Shimadzu Corporation to Take Over Turbo-Molecular Pump Business of Mitsubishi.

Corporate Profile
Name SHIMADZU CORPORATION Establishment March, 1875 Formation of Limited Company September, 1917 Head Office 1,Nishinokyo-Kuwabara-cho, Nakagyo-ku, Kyoto 604-8511, Japan Phone +81-75-823-1111 Capital 26.6 billion Directors and Auditors Number of Employees (Shimadzu group total) 9,670 (as of March 31, 2009) FY2008 Consolidated Net Sales
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273 billion

Business Outline
ANALYTICAL & MEASURING INSTRUMENTS

Analytical & Measuring Technology developed by Shimadzu can be easily termed "Technology for Science". Our high-level, sophisticated products include Chromatographs, Light Absorption Analysis Systems, and Composition and Surface Analysis Systems. We also provide a broad range of analytical instruments indispensable for research, development, and quality control in a variety of fields, including new drug development. For primary instruments such as the Liquid Chromatographs and Gas Chromatograph Mass Spectrometers, we have moved actively to incorporate technology that responds to the latest needs of the United States and Chinese markets and the life science fields. As a result, we are anticipating continued future growth in these important markets. Shimadzu also provides a broad range of high-precision testing and measuring technology that is essential for product development. Our high-precision measuring instruments are termed the key to 21st Century technology and include equipment for the evaluation of physical properties, nondestructive inspection, and environmental measurement.
High-Performance Liquid Chromatograph

---Gas Chromatograph Mass Spectrometer

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-----Mass Spectrometer for Protein Analysis -----Total Organic Carbon Analyzer ----Universal Testing Machine Autograph -----Microfocus X-Ray TV System -----Microfocus X-Ray TV System MEDICAL SYSTEMS

To carry out our role in the early diagnosis of disease and the improvement of cure rates, Shimadzu provides a broad range of diagnostic imaging equipment that includes digital X-ray systems, PET systems, CT scanners and diagnostic ultrasound systems. At this time, a number of innovations are occurring at the leading edges of medical treatment. In the field of diagnostic imaging, Shimadzu has developed the direct conversion flat panel detector (FPD) that provides heretofore unavailable high-quality images. We are also the first in the world to market the circulatory organ diagnostic system on which this detector is mounted. Additionally, we have developed a variety of other diagnostic systems that utilize this FPD. Shimadzu is now a leading pioneer of these new types of diagnostic imaging. Furthermore, recent IT technology developments are introducing efficient diagnostic systems to a variety of medical treatment areas. Shimadzu is supporting the renovation of IT systems in hospitals and medical centers by providing digital processing systems that incorporate the newest IT technology wherever possible and can process many kinds of medical information, including examination images

. ---Digital X-Ray System ----X-Ray System for Use with Circulatory Organs -----PET/CT System

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INDUSTRIAL EQUIPMENT

In the ever-innovating world of industrial technology, the upgrading of a system's equipment is very important. Shimadzu has developed a variety of industrial equipment, including semiconductor manufacturing equipment, liquid transmission equipment and hydraulic equipment. We have a complete product line, from which you can choose the most appropriate equipment, according to your plant's size and type of operation. Additionally, Shimadzu is actively developing our semiconductor manufacturing equipment business as we consider this to be an important future area of growth. We are also investing in the development of film deposition systems and turbo-molecular pumps, which are considered essential to the manufacture of key cell phone and personal computer devices. Additionally, we are continuing our development of testing equipment used for semiconductor and liquid crystal panel quality control.
----Film Deposition System for Use in Solar Cell Production ----Film Deposition System for Use in Solar Cell Production

AIRCRAFT EQUIPMENT

Shimadzu has now incorporated leading-edge electronics technology into our company's tradition of cultivating high-precision processing technology. We provide a variety of equipment for safe aircraft operation and the assurance of passenger comfort. Here, Shimadzu products are used in a variety of areas such as onboard air management systems, flight control systems, and cockpit display systems. Our equipment is also used for engine startup systems and for electronic control systems. Additionally, we are also proud that we have the Japanese market leader for head-up displays. Furthermore, Shimadzu provides ground-level support equipment including function-testing equipment for onboard hydraulic, air and fuel system equipment. We also provide aerospace medical training systems that simulate the aerospace environment and provide training. Our products also support the launch into orbit of rockets and satellites, and the long-term operation of satellites via a propellant supply valve for thrusters used to control the direction and positioning of rockets and satellites.

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Moreover, we have entered into technological cooperation with a leading American aerospace company. In this way, we are contributing to an improvement in aerospace safety.

Supports Applications from Environmental Analysis to Pharmaceutical Water Management Shimadzu Launches TOC-L Series Combustion Catalytic Oxidation TOC Analyzers for Laboratory Use

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Shimadzu has launched the TOC-L Series of combustion catalytic oxidation total organic carbon analyzers for laboratory applications. Total organic carbon (TOC) analyzers are used to evaluate the total amount of organic matter in water from the amount of carbon it contains. TOC analyzers are used in diverse fields, including the management of tap water, effluent, and ultrapure water, management of pharmaceutical water used in drug manufacturing processes, evaluation of cleaning efficiency (cleaning validation), and environmental investigations of river water and soils, for example. The TOC-L Series inherits the basic performance of the TOC-V Series, but upgraded components and software expand the range of applications and make operation easier. Background to the Product Launch With applications from ultrapure water to environmental water, the worldwide total organic carbon analyzer market is expected to grow by 6 % per annum. For instance, TOC has been adopted as a water control standard for tap water in Japan. The 16th Japanese Pharmacopoeia (planned implementation from April 2011) additionally expands the application range of TOC measurements to include the purity testing of pharmaceutical water, increasing the demand for TOC analyzers in the pharmaceutical industry. Shimadzu pioneered the development of total organic carbon analyzers using the 680 C combustion catalytic oxidation method. This method permits the analysis of samples containing high salt concentrations, such as sea water, which used to be hard to measure. Through its continued excellence in accuracy, sensitivity, and functionality, combined with an extensive product range and options, Shimadzu has become the leading manufacturer of TOC analyzers and holds the largest market share. Shimadzu aims to further increase sales of its total carbon analyzers through the launch of the TOC-L Series, which inherits the excellent performance of the previous models but offers a revamped external design, including a color LCD display. Features of the New Models The new TOC-L Series offers the following features.
(1) Proven 680 C Combustion Catalytic Oxidation method

The combustion catalytic oxidation method achieves both high organic matter detection capacity and high measurement sensitivity. The ultra wide range from 4 g/L to 30,000 mg/L permits measurements from purified water to highly-polluted water. * The combustion catalytic oxidation method analyzes TOC by burning the sample and using an infrared gas analyzer to detect the carbon dioxide generated from the carbon contained in the organic matter. The high oxidation decomposition capacity permits the efficient detection of insoluble organic matter and covers a wide range from low concentrations to high concentrations.
(2) Improved Operation and Visibility (standalone model)

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The high-resolution, high-class color LCD screen enhances the visibility and feel of the instrument. Previous models employed a built-in thermal printer to print the measured data but the new models use general-purpose computer printers (not included). Data saved in the TOC instrument can be transferred to USB memory for easy data management.
(3)Power- and Space-Saving Design

When used for eight hours/day, five days/week, the new standby power function reduces power consumption by 36 %( 100 V) and 43 %( 200 V) as compared to the previous series. The instrument width has been reduced approximately 20 %, from 440 mm to 340 mm. In addition, the TN unit, which was previously installed adjacent to the TOC analyzer, is now installed on top to reduce the overall system width by 260 mm.
(4) Comprehensive Range of Options

Options are available to handle a diverse range of applications, including the measurement of small sample volumes and the continuous measurement of sea water and other samples containing high salt concentrations with only simple maintenance.

Shimadzu Introduces World Fastest* Tandem Quadrupole LC/MS/MS System Provides Speed Beyond Comparison for Multi-Analyte Determination
*Based on our survey (as of August 2010)

Shimadzu UHPLC Nexera and Triple Quadrupole Mass Spectrometer LCMS-8030 Shimadzu Corporation announces the ultra-fast triple quadrupole LC-MS system, the model LCMS-8030, and user-friendly LabSolutions LCMS workstation software. With its exceptionally fast electronics and robust design, the LCMS-8030 is ideally suited for analysis of a wide range of applications, such as detection of drugs and metabolites from large numbers of biological specimens, contaminants from environmental samples or pesticides in food for highthroughput laboratories. Shimadzus LCMS-8030 features the most innovative technology ever put into a commercial tandem quadrupole analyzer. The new instrument includes an ultra-fast pulse counting detection
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system, an innovative high-speed UFsweeperTM collision cell, and a novel RF power supply that can switch conditions and achieve complete stability in microseconds. These innovations allow this tandem quadrupole mass analyzer to provide the fastest measurements possible, including a scan speed of up to 15,000 u/sec without any compromise of resolution, sensitivity or mass range. With reproducible MRM results with just one millisecond dwell times, the LCMS-8030 can perform up to 500 different MRM measurements per second. With the current trend going toward higher pressure HPLC and faster operating speeds for greater throughput, the LCMS8030 is the ideal detector to keep up with the ever faster chromatographic peaks. Fast 50 millisecond UHPLC peaks are now easily tamed by the LCMS-8030. *A triple quadrupole liquid chromatograph mass spectrometer (LC-MS) is a three-stage mass analyzer in which molecules in the form of ions are first selected by mass, fragmented in a collision cell, and then measured and quantitated in a separate quadrupole analyzer. This type of instrument provides extremely high selectivity of target constituents, provides quantitation at ultra-low levels, and can be used in wide-ranging fields from pharmaceuticals and life sciences to leading-edge materials research, foods, and environmental analysis.
Development Background

In recent years, interest in health and safety has grown significantly, and the list of regulated compounds and analytes has increased as well. For food safety, Japan implemented a positive list in 2006 which includes over 700 compounds that have to be measured and reported, and certifying safety is now a requirement for both importing and exporting countries. The demand for multi-compound and multi-analyte analysis continues to grow, even in emerging countries that mainly export agricultural products. In Japan, strengthening regulations for industrial use of perfluorooctane sulfonate (PFOS) and perfluorooctanoate (PFOA), additives and residual pharmaceutical and personal care products (PPCP) in the environment is progressing, which in turn is creating demand for instrumentation that provides reliable trace-level determination. In addition, pharmaceutical companies are under more pressure to speed up development of new drugs. Their demand for high-throughput analysis to test pharmacokinetics of possible drug candidates in clinical trials or providing faster quantitative results to support new development efforts is growing. Shimadzu Corporation is responding to market demand for fast and high-sensitivity analysis of trace-level and multi-analyte analysis by continually expanding our product line. Our recently released Nexera UHPLC features a world-class pressure range up to 130MPa (19000 psi), shortening analysis times and tripling the separation capacity, compared to typical 40 MPa (6000 psi) instruments. In order to instantly capture and ionize the samples separated by ultrafast LC and to obtain appropriate quantification data, speeding up the LC-MS is a necessity. Shimadzu Corporation answered this need in 2008 with the release of the worlds fastest single quad LCMS-2020, and now builds on that speed by introducing the incomparable LCMS-8030. Now, the LCMS-8030 will maximize the world-class performance of Nexera and provide the solution to the growing high-speed and trace-level analysis markets. Unique Product Features
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1) Ultra high-speed performance enables the world-class data acquisition speed and high reliability

A unique technology created by Shimadzu with the LCMS-8030 enables world-class ultra highspeed measurement and reproducibility. In triple quadrupole LC/MS analysis, a collision gas is used to bring about collision induced dissociation (CID*) of ions in the cell. However, reaccelerating ions to the mass analyzer after collision has been a slow part of the operation. The CID cell, at the heart of the triple quadrupole LC-MS, incorporates Shimadzus innovative tapered octaplate UFsweeperTM cell technology (patent pending) that allows faster and more stable measurements than ever. The UFsweeperTM collision cell prevents cross-talk from accumulated ions from affecting the measurement of the next compound, ensuring highly stable and reliable data. For comparison purposes, the Shimadzu LCMS-8030 improves Relative Standard Deviation (RSD) values by a factor of two over currently available instruments. (*) Collision induced dissociation (CID) -fragments ionized compounds selected by the mass analyzer for further analysis. The LCMS-8030 provides ultra-fast MRM transitions, enabling data acquisition with up to 500 different channels per second. The improvements to the electronics provide ultra fast scan mass spectrum measurement speeds of 15,000 u/sec without sacrificing sensitivity or resolution, and ultra-fast polarity switching (15msec) for the most information without signal deterioration. These features result in superior reproducibility for detection of peaks only one second wide or less. For example, the LCMS-8030 can elute 226 pesticides included in the positive list within 2 minutes and easily provide reliable and accurate quantitative results.
2) User-friendly operation and maintenance

Unified software for LC and LC-MS Software is a critical component with respect to analytical instrumentation. The LCMS-8030 software was designed to provide intuitive, easy-to-use operation. It fully integrates operation of Shimadzus LC product lines (Nexera, Prominence) and LCMS-2020 single quadrupole LC-MS. Automated optimization of analytical conditions for each quantitative target compound, which is the key to high-sensitivity analysis, allows unattended, overnight operation, greatly lessening the burden on users. Finally, its multilingual support includes Japanese, English and (soon to come) Chinese. Automated optimization of analysis conditions The unified presentation of instrument parameters and displays was specifically designed to enhance user-friendly operation. Minimize instrument downtime with Easy Maintenance The desolvation capillary through which ions are guided into the MS can be quickly replaced without breaking vacuum, a process that otherwise requires spending a day conducting maintenance. In addition, switching between multiple ion sources is a quick, tool-free operation.
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These are some of the highly-valued features of the LCMS-2020 which have been incorporated into the LCMS-8030 to provide users with easier operation and maintenance. Shimadzu has the highest market share in our domestic market for applications such as R&D and impurity analysis in pharmaceuticals and chemical synthesis for single quadrupole LC-MS. We expect to engage with the newly developed LCMS-8030 into the triple quadrupole market

A Collection from nature and SHIMADZU


(February 2011 ~)

Customer-communication orientated magazine

Shimadzu has published the international corporate magazine, "A Collection from nature and SHIMADZU", and posted it on our corporate home page with the aim of establishing increased communications with overseas customers. This new magazine has been developed in partnership with Nature, the world-renowned science magazine, and replaces Innovation, our former corporate magazine. "A Collection from nature and SHIMADZU" contains some articles reproduced from nature interwoven with original Shimadzu articles. The letter-size, 12-page magazine is mainly distributed to overseas subsidiaries, overseas visitors coming to Shimadzu and at overseas trade fairs where it is enthusiastically received.

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OBJECTIVE OF THE STUDY


The purpose of my research was to evaluate the monitoring techniques and collection strategy employed at BSO, DELHI and to find out the reasons for growing bad debts, if any. I was asked to set this objective so as to To help Shimadzu Corporation in extending credit by observing their needs. To know the views of Dealers and Customers of institutional segment regarding Shimadzu Corporation credit policy. Find out the satisfaction level from the Dealers and Customers who are already availing credit facility. To estimate and evaluate the success percentage of extending credit. To find and suggest the means by which Shimadzu Corporation could easily and effectively manage its receivables. To identify the credit needs and requirements of the potential customers.

CREDO
We build lasting relationships with customers based on trust and mutual benefit. 22

We uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is We chart a challenging career for employees with opportunities for We value the opportunity and responsibility to make a meaningful

proactive to change. advancement and rewards. difference in people's lives.

OBJECTIVES OF CREDIT POLICY


The sale of goods on credit is an essential part of the modern competitive economic systems. In fact, credit sales are treated as a marketing tool to aid the sale of goods. The credit sales are generally made on open account in the sense that there are no formal acknowledgements of debt obligations through a financial instrument. As a marketing tool, they are intended to promote sales and thereby profits. However, extension of credit involves risk and cost. Management should weigh benefits as well as cost to determine goals of credit sales management. The objective of credit sales management is to promote sales and profits until that point is reached where the return on investment in further funding.

WHY DO FIRMS EXTEND CREDIT?

Companies in practice feel the necessity of granting credit for several reasons:

Competition:

Generally the higher the degree of competition, the more

the credit granted by a firm. To meet the prevailing competition in the market the firms allows sales on credit also.

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Companys bargaining power:

If a company has a higher

bargaining power vis--vis its buyers, it may grant no or less credit. The company will have a strong bargaining power if it has a strong product, monopoly power, brand image, large size or strong financial position.

Buyers

requirements:

In

number

of

business

sectors

buyers/dealers are not able to operate without extended credit. This is particularly so in the case of industrial products.

Buyers status: large buyers demand easy credit terms because of bulk
purchases and higher bargaining power. Some companies follow a policy of not giving much credit to small retailers since it is quite difficult to collect des from them.

Relationship with dealers:


loyalty.

Companies sometimes extend credit to

dealers to build long-term relationship with them or to reward them for their

Marketing tool:
products.

Credit is used as a marketing tool, particularly when a

new product is launched or when a company wants to push its weak

Industry practice:

Small companies have been found guided by

industry practice or norm more than the large companies. Sometimes companies continue giving credit because of past practice rather than industry practice.

Transit delays:

This is a forced reason for extended credit in the case

of a number of companies in India. Most companies have evolved systems to minimise the impact of such delays. Some of them take the help of banks to control cash flows in such situation.

CREDIT SALES
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A MARKETING TOOL OF Shimadzu


Trade Credit
Trade credit arises when a firm sells its products or services on credit and does not receive cash immediately. It is an essential marketing tool, acting as a bridge for the movement of goods through production and distribution stages to customers. A firm grants trade credit to protect its sales from the competitors and to attract the potential customers to by its products at favorable terms. Trade credit creates accounts receivable or trade debtors (also referred to book debts in India) that the firm is expected o collect in the near future. The customers from whom receivable or book debts have to be collected in the future are called trade debtors or simply as debtors and represent the firms claim or asset. A credit sale has three characteristics. First, it involves an element of risk that should be carefully analysed. Cash sales are totally riskless, but not the credit sales as the cash payment are yet to be received. Second, it is based on economic value. To the buyer, the economic value in goods or services passes immediately at the time of sale, while the seller expects an equivalent value to be received later on. Third, it implies futurity. The buyer will make the cash payment for goods or services received by him in a future period.

Debtors constitute a substantial portion of current assets of several firms. For example in India, trade debtors, after inventories, are the major components of current assets. They form about one-third of current assets in India. Granting credit and creating debtors amount to the blocking of the firms funds. The interval between the date of sale and the date of payment has to be financed out of working capital. This necessitates the firm to get funds from banks or other sources. Thus, trade debtors represent investment. As substantial amounts are tied-up in trade debtors, it needs careful analysis and proper management.

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Five Cs of credit
Accurate credit granting decision requires an analysis of assets relative to the five credit factors. The five Cs of credit which the credit manager evaluates in classifying loans are capacity, capital, collateral, character and conditions. The relative weight assigned to each credit factor varies with the circumstances of the individual situations. 1. Capacity: Capacity refers to the borrowers ability to pay. The determination of repayment capacity requires an analysis of cash flow, sources of repayment and earning history. Earning history should evidence that future income is sufficient to meet all obligations, including normal living expenses, with some left for capital replacement and contingency. Following points should be considered during evaluation: Historic earning performance Repayment history Stable and reliable income Sources of repayment Projected earnings; and Cash flow projections 2. Capital: Capital relates to the ability to meet obligations, continue business operations and protection against undue risk. Following points should be considered during evaluation: Assets/liability structure Working capital and liquidity Owner equity position Financial trends; and Earned net worth as a per cent of total net worth 3. Collateral: Collateral is the security pledged on the loan where applicable, the collateral amount taken must comply with regulatory requirements i.e. it should reasonably protect the lenders. Following points should be considered during evaluation: 26

Reasonable lender protection Current and accurate evaluation reports Availability of additional collateral Collateral risk (potential to decline in value) Income producing and debt servicing ability of collateral 4. Character: Character refers to the borrowers integrity and management ability. Character is an important aspect of business credit decision. However in most instance credit analysts do not actually appraise character-but rather the reflection of character as revealed by reputations and references. Following points should be considered during evaluation:

Realistic production and financial goals Adequate financial records Proven management experience Borrowers marketing plan/approach; and Compliance with loans terms 5. Conditions: Conditions include the amount of loan, use of proceed and loan terms over which lender has direct control. Conditions such as loan agreements, personal liability, additional collateral and insurance should be required a each situation warrants. Following points should be consider during evaluation:

Prudent and productive loan purpose Past experience in fulfilling conditions Loan maturities coinciding with the purpose of loan Proper structure of loans financing specific major capital items; and Appropriate repayment plans/schedule

Trade Credit Management


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A sound managerial control requires proper management of liquid assets and inventory. These assets are a part of working capital of the business. An efficient use of financial resources is necessary to avoid financial distress. Receivables result from credit sales. A concern is required to allow credit sales in order to expand its sales volume. It is not always possible to sell goods on cash basis only. Sometimes, other concerns in that line might have established a practice of selling goods on credit basis. Under these circumstances, it is not possible to avoid credit sales without adversely affecting sales. The increase in sales is also essential to increase profitability. After a certain level of sales the increase in sales will not proportionately increase production costs. The increase in sales will bring in more profits. Thus, receivables constitute a significant portion of current assets of a firm. But, for investment in receivables, a firm has to incur certain costs. Further, there is a risk of bad debts also. It is, therefore, very necessary to have a proper control and management of receivables.

Trade Credit Management-A Marketing Tool

Why at all do firms sell on credit? Firms use credit policy as a marketing tool for expanding sales. In a declining market, it may be used to maintain the market share. Credit policy helps to retain old customers and create new customers by weaning them away from competitors. In a growing market, it is used to increase the firm competitors. In a growing market, it is used to increase the firms market share. Under a highly competitive situation or recessionary economic conditions, a firm may loosen its credit policy to maintain sales or to minimize erosion of sales.In practice, companies may grant credit for several other reasons such as the company position, buyers status and requirement, dealer relationship, transit delays, industrial practice etc.

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Credit Policy
A firm may follow liberal or a stringent credit policy. The firm following a liberal credit policy tends to sell on credit to customers on very liberal and standards, credit are granted for longer periods even to those customers those creditworthiness is not fully known or whose financial position is doubtful. In contrast, a firm following a stringent credit policy sells on credit on a highly selective basis only to those customers who have proven credit worthiness and who are financially viable. In practice, firms follow credit policies ranging between liberal to stringent. The term credit policy is used to refer to the combination of three decisions variables. Credit Standards are criteria to decide the type of customers to whom goods could be sold on credit. If a firm has more slow-paying customers, its investment in accounts receivable will increase. The firm will also be exposed o higher risk of default. Credit terms specify duration of credit and terms of payment by customers. Investment in accounts receivable will be high if customers are allowed extended time period for making payments. Collection efforts determine the actual collection period. The lower the collection period, the lower the investment in accounts receivable and viceversa.

OBJECTIVES OF CREDIT POLICY


The sale of goods on credit is an essential part of the modern competitive economic systems. In fact, credit sales are treated as a marketing tool to aid the sale of goods. The credit sales are generally made on open account in the sense that there are no formal acknowledgements of debt obligations through a financial instrument. As a marketing tool, they are intended to promote sales and thereby profits. However, extension of credit involves risk and cost. Management should weigh 29

benefits as well as cost to determine goals of credit sales management. The objective of credit sales management is to promote sales and profits until that point is reached where the return on investment in further funding.

Despite of Higher Risk of Bad Debts Why Firm Grants Credit?


There is a widespread recognition that corporate credit managers control one of the biggest, riskiest and most important assets companies are likely to have. The management of accounts receivable can have an impact on firms balance sheet structure, their liquidity, efficiency and profitability thus credit policies and procedures can contribute to firms long term survival. In downturns, trade credit, and especially late payment, is likely to become an even bigger issue for the survival and prosperity of most firms, especially small and medium enterprises. Business leaders in all organisations, especially small and medium enterprises, need to understand the contribution that credit policies and processes can make to their cash conversion cycle which is the lifeblood of any business. If used effectively and proactively, formal credit policies have the potential to reduce this cycle that hold the key which can unlock very precious cash resources, especially in time of recession. Some of the reasons for bad debts and late payment relate to the management of the credit operation and/ or the lack of credit policies and processes. Businesses that invest in their credit management policies and procedures minimise the risks of bad debts and slow payment, improve cash-flows and credit performance. This Workshop examines ways of managing and protecting this all important asset: accounts receivable in the context of the continuing decline in economic activity. With the combination of topics covered - from importance of credit management and risk mitigation to effective credit policies and processes, this Workshop will be valuable to those involved directly or indirectly in the credit function.

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Consumer Behavior Concept

Introduction
The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society."
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Although it is not necessary to memorize this definition, it brings up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g., friends influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use). Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. Since many environmental problems result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at landfills) this is also an area of interest. Consumer behavior involves services and ideas as well as tangible products. The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.

There are four main applications of consumer behavior:

The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices. A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers. 32

Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain.

There are several units in the market that can be analyzed. Our main thrust in this course is the consumer. However, we will also need to analyze our own firms strengths and weaknesses and those of competing firms. Suppose, for example, that we make a product aimed at older consumers, a growing segment. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. To assess a competing firms potential threat, we need to examine its assets (e.g., technology, patents, market knowledge, awareness of its brands) against pressures it faces from the market. Finally, we need to assess conditions (the marketing environment). For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically.

Culture and Subculture

Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals.
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The definition of culture offered in one textbook is That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man person as a member of society. From this definition, we make the following observations:

Culture, as a complex whole, is a system of interdependent components. Knowledge and beliefs are important parts. In the U.S., we know and believe that a person who is skilled and works hard will get ahead. In other countries, it may be believed that differences in outcome result more from luck. Chunking, the name for China in Chinese, literally means The Middle Kingdom. The belief among ancient Chinese that they were in the center of the universe greatly influenced their thinking. Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of wearing ties in some countries and wearing turbans in others. Morality may be exhibited in the view in the United States that one should not be naked in public. In Japan, on the other hand, groups of men and women may take steam baths together without perceived as improper. On the other extreme, women in some Arab countries are not even allowed to reveal their faces. Notice, by the way, that what at least some countries view as moral may in fact be highly immoral by the standards of another country. For example, the law that once banned interracial marriages in South Africa was named the Immorality Act, even though in most civilized countries this law, and any degree of explicit racial prejudice, would itself be considered highly immoral.

Culture has several important characteristics: (1) Culture is comprehensive. This means that all parts must fit together in some logical fashion. For example, bowing and a strong desire to avoid the loss of face are unified in their manifestation of the importance of respect. (2) Culture is learned rather than being something we are born with. We will consider the mechanics of learning later in the course. (3) Culture is manifested within boundaries of acceptable behavior. For example, in American society, one cannot show up to class naked, but wearing anything from a suit and tie to shorts and a T-shirt would usually be acceptable. Failure to behave within the prescribed norms may lead to sanctions, ranging from being hauled off by the police for indecent exposure to being laughed at by others for wearing a suit at the beach. (4) Conscious awareness of cultural standards is limited. One American spy was intercepted by the Germans during World War II simply because of the way he held his knife and fork while eating. (5) Cultures fall somewhere on a continuum between static and dynamic depending on how quickly they accept change. For example, American culture has changed a great deal since the 1950s, while the culture of Saudi Arabia has changed much less.

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Dealing with culture. Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each others presence without knowing exactly why (for example, two speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal distance).

Warning about stereotyping. When observing a culture, one must be careful not to over-generalize about traits that one sees. Research in social psychology has suggested a strong tendency for people to perceive an outgroup as more homogenous than an ingroup, even when they knew what members had been assigned to each group purely by chance. When there is often a grain of truth to some of the perceived differences, the temptation to over-generalize is often strong. Note that there are often significant individual differences within cultures.

Cultural lessons. We considered several cultural lessons in class; the important thing here is the big picture. For example, within the Muslim tradition, the dog is considered a dirty animal, so portraying it as mans best friend in an advertisement is counter-productive. Packaging, seen as a reflection of the quality of the real product, is considerably more important in Asia than in the U.S., where there is a tendency to focus on the contents which really count. Many cultures observe significantly greater levels of formality than that typical in the U.S., and Japanese negotiator tend to observe long silent pauses as a speakers point is considered. Cultural characteristics as a continuum. There is a tendency to stereotype cultures as being one way or another (e.g., individualistic rather than collectivistic). Note, however, countries fall on a continuum of cultural traits. Hofstedes research demonstrates a wide range between the most individualistic and collectivistic countries, for examplesome fall in the middle. Hofstedes Dimensions. Gert Hofstede, a Dutch researcher, was able to interview a large number of IBM executives in various countries, and found that cultural differences tended to center around four key dimensions:

Individualism vs. collectivism: To what extent do people believe in individual responsibility and reward rather than having these measures aimed at the 35

larger group? Contrary to the stereotype, Japan actually ranks in the middle of this dimension, while Indonesia and West Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism. Power distance: To what extent is there a strong separation of individuals based on rank? Power distance tends to be particularly high in Arab countries and some Latin American ones, while it is more modest in Northern Europe and the U.S. Masculinity vs. femininity involves a somewhat more nebulous concept. Masculine values involve competition and conquering nature by means such as large construction projects, while feminine values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the masculine side. ( The fact that these values are thought of as masculine or feminine does not mean that they are consistently held by members of each respective genderthere are very large within-group differences. There is, however, often a large correlation of these cultural values with the status of women.) Uncertainty avoidance involves the extent to which a structured situation with clear rules is preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range of the distribution.

Although Hofstedes original work did not address this, a fifth dimension of long term vs. short term orientation has been proposed. In the U.S., managers like to see quick results, while Japanese managers are known for take a long term view, often accepting long periods before profitability is obtained. High vs. low context cultures: In some cultures, what you see is what you getthe speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S.if you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy. In Japan, in contrast, facial expressions and what is not said may be an important clue to understanding a speakers meaning. Thus, it may be very difficult for Japanese speakers to understand anothers written communication. The nature of languages may exacerbate this phenomenonwhile the German language is very precise, Chinese lacks many grammatical features, and the meaning of words may be somewhat less precise. English ranks somewhere in the middle of this continuum. Ethnocentrism and the self-reference criterion. The self-reference criterion refers to the tendency of individuals, often unconsciously, to use the standards of ones own culture to evaluate others. For example,
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Americans may perceive more traditional societies to be backward and unmotivated because they fail to adopt new technologies or social customs, seeking instead to preserve traditional values. In the 1960s, a supposedly well read American psychology professor referred to Indias culture of sick because, despite severe food shortages, the Hindu religion did not allow the eating of cows. The psychologist expressed disgust that the cows were allowed to roam free in villages, although it turns out that they provided valuable functions by offering milk and fertilizing fields. Ethnocentrism is the tendency to view ones culture to be superior to others. The important thing here is to consider how these biases may come in the way in dealing with members of other cultures. It should be noted that there is a tendency of outsiders to a culture to overstate the similarity of members of that culture to each other. In the United States, we are well aware that there is a great deal of heterogeneity within our culture; however, we often underestimate the diversity within other cultures. For example, in Latin America, there are great differences between people who live in coastal and mountainous areas; there are also great differences between social classes. Language issues. Language is an important element of culture. It should be realized that regional differences may be subtle. For example, one word may mean one thing in one Latin American country, but something off-color in another. It should also be kept in mind that much information is carried in non-verbal communication. In some cultures, we nod to signify yes and shake our heads to signify no; in other cultures, the practice is reversed. Within the context of language:

There are often large variations in regional dialects of a given language. The differences between U.S., Australian, and British English are actually modest compared to differences between dialects of Spanish and German. Idioms involve figures of speech that may not be used, literally translated, in other languages. For example, baseball is a predominantly North and South American sport, so the notion of in the ball park makes sense here, but the term does not carry the same meaning in cultures where the sport is less popular. Neologisms involve terms that have come into language relatively recently as technology or society involved. With the proliferation of computer technology, for example, the idea of an add-on became widely known. It may take longer for such terms to diffuse into other regions of the world. In parts of the World where English is heavily studied in schools, the emphasis is often on grammar and traditional language rather than on current terminology, so neologisms have a wide potential not to be understood. 37

Slang exists within most languages. Again, regional variations are common and not all people in a region where slang is used will necessarily understand this. There are often significant generation gaps in the use of slang.

Writing patterns, or the socially accepted ways of writing, will differs significantly between cultures.

In English and Northern European languages, there is an emphasis on organization and conciseness. Here, a point is made by building up to it through background. An introduction will often foreshadow what is to be said. In Romance languages such as Spanish, French, and Portuguese, this style is often considered boring and inelegant. Detours are expected and are considered a sign of class, not of poor organization. In Asian languages, there is often a great deal of circularity. Because of concerns about potential loss of face, opinions may not be expressed directly. Instead, speakers may hint at ideas or indicate what others have said, waiting for feedback from the other speaker before committing to a point of view. Because of differences in values, assumptions, and language structure, it is not possible to meaningfully translate word-for-word from one language to another. A translator must keep unspoken understandings and assumptions in mind in translating. The intended meaning of a word may also differ from its literal translation. For example, the Japanese word hai is literally translated as yes. To Americans, that would imply Yes, I agree. To the Japanese speaker, however, the word may mean Yes, I hear what you are saying (without any agreement expressed) or even Yes, I hear you are saying something even though I am not sure exactly what you are saying. Differences in cultural values result in different preferred methods of speech. In American English, where the individual is assumed to be more in control of his or her destiny than is the case in many other cultures, there is
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a preference for the active tense (e.g., I wrote the marketing plan) as opposed to the passive (e.g., The marketing plan was written by me.) Because of the potential for misunderstandings in translations, it is dangerous to rely on a translation from one language to another made by one person. In the decentering method, multiple translators are used.

The text is first translated by one translatorsay, from German to Mandarin Chinese. A second translator, who does not know what the original German text said, will then translate back to German from Mandarin Chinese translation. The text is then compared. If the meaning is not similar, a third translator, keeping in mind this feedback, will then translate from German to Mandarin. The process is continued until the translated meaning appears to be satisfactory. Different perspectives exist in different cultures on several issues; e.g.:

Monochronic cultures tend to value precise scheduling and doing one thing at a time; in polychronic cultures, in contrast, promptness is valued less, and multiple tasks may be performed simultaneously. (See text for more detail). Space is perceived differently. Americans will feel crowded where people from more densely populated countries will be comfortable. Symbols differ in meaning. For example, while white symbols purity in the U.S., it is a symbol of death in China. Colors that are considered masculine and feminine also differ by culture. Americans have a lot of quite shallow friends toward whom little obligation is felt; people in European and some Asian cultures have fewer, but more significant friends. For example, one Ph.D. student from India, with limited income, felt obligated to try buy an airline ticket for a friend to go back to India when a relative had died. In the U.S. and much of Europe, agreements are typically rather precise and contractual in nature; in Asia, there is a greater tendency to settle issues as they come up. As a result, building a relationship of trust is more important in Asia, since you must be able to count on your partner being reasonable. In terms of etiquette, some cultures have more rigid procedures than others. In some countries, for example, there are explicit standards as to how a gift should be presented. In some cultures, gifts should be presented 39

in private to avoid embarrassing the recipient; in others, the gift should be made publicly to ensure that no perception of secret bribery could be made.

Demographics

Demographics are clearly tied to subculture and segmentation. Here, however, we shift our focus from analyzing specific subcultures to trying to understand the implications for an entire population of its makeup. Several issues are useful in the structure of a population. For example, in some rapidly growing countries, a large percentage of the population is concentrated among younger generations. In countries such as Korea, China, and Taiwan, this has helped stimulate economic growth, while in certain poorer countries, it puts pressures on society to accommodate an increasing number of people on a fixed amount of land. Other countries such as Japan and Germany, in contrast, experience problems with a "graying" society, where fewer non-retired people are around to support an increasing number of aging seniors. Because Germany actually hovers around negative population growth, the German government has issued large financial incentives, in the forms of subsidies, for women who have children. In the United States, population growth occurs both through births and immigration. Since the number of births is not growing, problems occur for firms that are dependent on population growth (e.g., Gerber, a manufacturer of baby food). Social class is a somewhat nebulous subject that involves stratifying people into groups with various amounts of prestige, power, and privilege. In part because of the pioneering influence in American history, status differentiations here are quite vague. We cannot, for example, associate social class with income, because a traditionally low status job as a plumber may today come with as much income as a traditionally more prestigious job as a school teacher. In certain other cultures, however, stratification is more clear-cut. Although the caste system in India is now illegal, it still maintains a tremendous influence on that society. While some mobility exists today, social class awareness is also somewhat greater in Britain, where social status is in part reinforced by the class connotations of the accent with which one speaks.
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Textbooks speak of several indices that have been used to "compute" social class in the United States, weighing factors such as income, the nature of ones employment, and level of education. Taken too literally, these indices are not very meaningful; more broadly speaking, they illustrate the reality that social status is a complex variable that is determined, not always with consensus among observers, by several different variables.

Suggestions and Recommendations


After completing my summer internship programme at SHIMADZU, I recognized certain loopholes regarding the practice of receivables management at SHIMADZU, so I am giving following suggestions: 1. Re-engineer Receivable Process: Re-engineer is a fundamental rethink and re-design which incorporates modern business approaches. Nature of credit sales is such that decision made elsewhere in the organization are likely to affect the level of resources that are expended on the management of credit sales. Following practices present opportunities to improve the account receivable function in SHIMADZU. Centralized processing for finance function such as accounts payable and accounts receivables. Alternative payment strategies i. Direct debit ii. iii. iv. i. ii. iii. Integrated voice response Collection by third party Lock box processing Customer orientation Good customer relations Better customer knowledge Better debt management

2. Evaluation of Risk: Branch manager at SHIMADZU needs to properly identify, assess and evaluate risk because a proper risk assessment opens 41

the way for efficiency and effectiveness benefits in the management of credit sales. A proper assessment of risk can be made by maintaining database of current and prospect customers. Major components of effective database are: Billing name and address Credit information Place of purchase Date of purchase Special service requirements Method of payment Payment history Customer type This database will need to be regularly maintained and updated. 3. Use of latest technology: Advances in technology present and opportunity for improvement in credit sales management. The principal innovations available are: E-commerce: It is a term applied to the use of computer and telecommunications technology, particularly on an inter-organizational basis, to support trading and goods and services. Manager at SHIMADZU can used following tools made available by E-commerce: i. Electronic fund transfer (EFT) ii. Electronic data interchange (EDI) iii. Electronic Catalogue System (ECS) Accounts Receivables System: SHIMADZU BSO should develop and maintained automated receivable system. They should spend on enterprise, knowledge based system such as SAP, ORACLE, PEOPLE SOFT. These integrated systems will automatically update all the accounting records affected by transactions. 4. Restructuring of Receivable Collection Practice: The fundamental rule of sound credit sales management is to minimize the time span between sale and collection. Any delays that lengthen this span cause receivables to build to unnecessary high levels and increase the levels of bad debts. These delays 42

are caused by customer and employee both. Receivable practice at SHIMADZU can be made more efficient by implementing following points: Prompt invoicing Open account Credit terms Periodic statement Use of payment incentive and penalties Record keeping and continuous accounting Business Process Outsourcing (BPO)

ANALYSIS AND INTERPRETATIONS


SWOT ANALYSIS
I. Conducting a SWOT Analysis
A SWOT Analysis takes is a method for examining the Strengths, Weaknesses, Opportunities, and Threats facing a business. It can give insight into companys position in the competitive arena. When carrying out a SWOT analysis to determine how you rate against a competitor, the following guides should be used:

Strengths
Consider your strong points. This should be both from your own and your customers' points of view. Don't be modest; be realistic. What distinct advantages does your company offer? Why do customers say they enjoy doing business with you? Is there anything you currently offer that can not be copied by a competitor, now or in the future?

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Weaknesses
Evaluate your company's weaknesses not only from your perspective, but also from the perspective of your competitors. It's sometimes difficult to think about and discuss your weaknesses, but it is best to be realistic now and face any unpleasant truths as soon as possible. What does your company do that can be improved? What does your company do poorly? What should be avoided? What do your competitors do better than you? Do competitors have a particular market or segment locked up?

Opportunities
Next consider the areas in your market that offer you room to grow. Opportunities can come from changes in technology and markets on both a broad and narrow scale; changes in government policy related to your industry; changes in social patterns demographics and customer lifestyle changes; and local events, such as the closing of a store near you. What and where are the interesting opportunities in your market? What are the important trends occurring in your local area as well as across the nation? What do you anticipate happening in the future that may represent an opportunity?

Threats
Although we don't like to think about them, we all face threats in our businesses. Many times they're out of our control, such as a downturn in the economy, a shift in market demographics, or perhaps a new mega-corporation opening in your local area. It is critical to think about and be prepared for such events.

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What are the obstacles that your company faces? What is your competition doing that could take business away from you or stunt your company's growth? Are the required specifications for your products or services changing? Is the changing technology threatening your position in the market? Do you have cash flow problems that could keep your company from acquiring new technology, staff or equipment? The primary strength of SWOT analysis arises from matching specific internal and external factors and evaluating the multiple interrelationships involved. The matching process can be greatly facilitated by the construction of a SWOT matrix. The SWOT matrix is constructed by creating a table showing the strengths, weaknesses, opportunities and threats that you've just identify.

SWOT ANALYSIS OF SHIMADZU

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Strengths
1.Good Customer Relationship(10% of customer give 90% of business)

Opportunity

1. Unexplored rural market

2. Statutory monopolies, availability of iron ore and coal, mature production base. 2.Growing domestic demand and increasing export

3. Default rate is negligible in case of credit sales of SHIMADZU 3..Expanding market

4.Exclusive licenses and strong brand 4.Grasping new technological equipments

5. Abundance of quality manpower. 5. Booming Real Estates and Infrastructure can give indirect benefits 6.Customers prefer SHIMADZU than other private players 6. Export consolidation

Weaknesses
1. Unscientific mining, low productivity, low R&D investments, high cost of

Threats
46 1. Stiff competition from other players in the industry who are

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Findings and Conclusions


The credit forms an essential part of the modern competitive economic systems. In fact credit sale and therefore, receivables are treated as marketing tool and aids to sales growth, and growth of the business in return.

But there is always need of sufficient cash inflow for the smooth and efficient carrying of production process. This crafts need for studying the payment terms and trends of various customer segment.

The in depth study of payment terms and trends related to customers which were the debtors of SHIMADZU conveys that there is negligible amount of annual bad debts due to stringent credit policy followed by SHIMADZU. As we know credit extended at SHIMADU are backed by Bank Guarantee or letter of Credit so as soon as customers try to avoid their due payments, Financial Incharge after giving series of reminder encash these financial documents to make their debts a good one. After the study of various customers small dealers are appreciated as the orders are small and payment can be received completely in advance for the order execution, which help in enriching good cash inflow. Hence Business with small dealers is beneficial.

SHIMADZU has strong bargaining power against the buyer as it has always witness excess of demand over supply. Therefore each Branch Sales Office used to supply lesser than the goods demanded by the customers. Shimadzu have very strict terms and conditions which emphasis on the timely recovery of debt.

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Customers of public sectors undertakings are granted with more liberal/nonrestrictive credit terms as no advance received even though the contract value are of large as compared to Private customers, Industrial customer and Small customer segment and they also enjoy the benefits of Interest Free Charge (IFC) for certain period. Which implicated cost and has led to the blockingup of funds for extended period.

It would be more profitable if the payment terms of public sectors segment customers are revised accordingly and they are agreed on the terms that ensures regular inflow of money and keeps the contract cash rich. Mostly public sectors customers were found to be late payers of dues in most of the cases so this matter needs to be looked upon and certain strict measures need to be taken as they are the one which buy in bulk and are regular customers of SHIMADZU.

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BIBLIOGRAPHY
WEBSITES:
HTTP://SHIMADZU.COM
HTTP://ECONOMICSTIME.COM

HTTP://KHOJ.COM

MAGAZINES
BUSINESS INDIA BUSINESS WORLD BOOKS KOTLER PHILIPS, MARKETING MANAGEMENT, PUBLISHED BY

PRENTICE HALL OF INDIA PVT.LTD.

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QUESTIONIER
1) Name----------------------------------------------

2)

Age------------------------------------------

3)

Location--------------------------------

4)

Profession----------------------

1) Which country linen aircraft equipment is

imported from?
A)Italy nd Japan B)US C)France D)None

2) Which advertising medium do you think is

the most effective for fabric?


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A)Tv B)Radio C)Newspaper D)Magazine E)Online

3) What country does linen come from?


A)Egypt B)Italy C)France D)None

4)Last time where you have notices Linen

Club Advertisement?
A)TV B)Hoardings C)Magazine D)Friends mouth F)Internet G)Did not noticed E)Word of

5) Do you feel linen is more eco-friendly in

comparisons to others?
A)Yes B)No C)Cant say

6) What payment methods does Linen Linen

accept?
A)Online B)By mail

7) What do you think which media is more effective?


A)Tv B)Radio C) Television D)Hoardings E)Online

8) What is your suggestion to increase the

Awareness of growth technology?...........................................

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