NARSEE MONJEE INSTITUTE OF MANAGEMENT & HIGHER STUDIES

Deemed University

                         

                        Section I

Section I = 40 marks

 

Each question carries one mark.

1. Which of the following is a trade sales promotion method aimed specifically at retail outlets?

                        (a) Trade show (b) Buyback allowance

                        (c) Merchandise allowance (d) Scan back allowance

                        (e) Free merchandise.

 

2. A company in its communication message lays emphasis on the quality, performance and value of its products. What is the communication objective of the company?

                        (a) Awareness (b) Knowledge (c) Liking

                        (d) Preference (e) Conviction.

 

3. Which of the following is not a condition necessary for an exchange to take place?

                        (a) Each party must have something that interests the other

                        (b) Each party must be in a position to communicate and deliver the product

                        (c) The parties must involve themselves even if they consider each other undesirable or unacceptable to deal with

                        (d) Each party must be free to accept or reject any offer from the other party

                        (e) At least two parties must be involved.

                         

4. If Adidas needs to survey retailers attitudes on the availability of product literature in athletic shoe shops and needs the results within four working days, Adidas will probably use a/an_________ survey.

                        (a) Mail (b) Telephone (c) Mall intercept

                        (d) Personal interview (e) In-home.

 

5. Sonys communication objective is to achieve 95 percent awareness for its latest camcorder model during the six-month introductory period. Which of the following methods can Sony use to set its advertising budget?

                        (a) Affordable method (b) Percentage of sales method

                        (c) Objective and task method (d) Competitive parity method

                        (e) Discount method.

 

6. The statement that "It costs five times as much to attract a new customer as it does to keep an old customer" means that firms should

                        (a) Advertise more (b) Build lasting customer relationships

                        (c) Provide quality products (d) Price their products low

                        (e) Customize their products.

 

7. Automobile manufacturers such as Maruti, manufacture different models like Maruti800, WagonR and Esteem to cater to different segments with different levels of income. This is an example of

                        (a) Selective specialization (b) Product specialization

                        (c) Market specialization (d) Full market coverage

 

                        (e) Single segment concentration.

8. The Nike swoosh that is prominent on all of the firm's packaging, products, and advertising is a

                        (a) Trade name (b) Corporate mark (c) Brand name

                        (d) Brand mark (e) Brand equity.

 

9. Harsha, a trained engineer, is a salesperson for a chemical manufacturer. She provides current customers with advice about a product's characteristics and applications. She is a

                        (a) Missionary salesperson (b) Trade salesperson

                        (c) Field order taker (d) Inside order taker

                        (e) Technical salesperson.

10. Positioning of a product is based on

                        I. The price charged for the product.

 

                        II. The promotional pitch for the product.

                        III. Product characteristics.

                        (a) Only (I) above (b) Only (II) above

                        (c) Only (III) above (d) Both (I) and (II) above

                        (e) All (I), (II) and (III) above.

 

11. There are seven principles that guide the formulation of public policy toward marketing. Of the principles listed below, which does not represent one of those principles?

                        (a) The principle of curbing potential harm

                        (b) The principle of economic efficiency

                        (c) The principle of maximising profits at any expense

                        (d) The principle of consumer education and information

                        (e) The principle of innovation.

 

12. Location is extremely important to a retailer because

                        (a) Suppliers charge service stores in certain trading areas an extra amount

                        (b) A desirable location appeals to consumers' emotions and encourages them to buy

                        (c) Location is the major determinant of store image

                        (d) Location determines the trading area from which the store must draw its customers

                        (e) Convenient location is an essential for good customer service.

                       

13. Anita, a buyer for Nestle, buys carpeting for use in an office area. What determines whether this carpeting is a consumer or an industrial product?

                        (a) The price of the carpet (b) The type of selling organisation

                        (c) The buyer's intended use of the product (d) The terms of the sale

                        (e) Whether the carpet is a replacement item.

 

14. Polaroids instant camera is an example of

                        (a) New to the world products (b) Product line extension

                        (c) Line stretching (d) New product lines

                        (e) Improvement/revision of existing products.

 

15. A company uses the Indian Cricket Team to endorse its range of snack foods. This endorsement is likely to be particularly effective if the Indian Cricket Team is seen by large numbers of the company's target market as a/an

                        (a) Membership reference group (b) Tertiary reference group

                        (c) Secondary reference group (d) Non-reference group

                        (e) Avoidance group.

                       

16. Rakesh Sharma has been promoted as the sales manager at a new firm and is trying to come up with a sales-force compensation method. He would like to have selling expenses relate directly to sales resources, a highly aggressive sales force aiming at greater challenges and, minimization of non-selling tasks. What compensation method would best fulfill his requirements?

                        (a) Salary plus commission (b) Straight salary

                        (c) Straight salary plus generous fringe benefits (d) Straight commission

                        (e) Salary plus a bonus.

 

17. The Parker Pen Company manufactures several different categories of writing instruments: inexpensive disposable ballpoints, pens with erasable ink, pens specifically designed for artwork, and expensive executive pens. The Parker Pen Company is using which type of segmentation?

(a) Benefit (b) Demographic

(d) Geographic (e) Laboratory test.

 

 

 

18. Marketing chewable vitamins for children and a different version for adults is an example of

(a) Geographic segmentation (b) Psychographic segmentation

(c) Regional segmentation (d) Age and life-cycle segmentation

(e) Physiological segmentation.

 

 

19. Which of the following consumer responses is least likely to overcome cognitive dissonance experienced by a consumer who is dissatisfied with their purchase?

(a) Rationalizing that a product is actually quite good

(b) Seeing the product in a different light so that the bad aspects of a product are emphasized

(c) Seeing the product in a different light so that the good aspects of a product are emphasized

(d) Complaining and returning goods to the supplier

(e) Find alternative uses of the product.

 

20. When a customer asks for Band Aid instead of adhesive bandage, it is a case of

(a) Poorly educated customers not aware of adhesive bandages

(b) The brand name having replaced the generic product in the customers mind

(c) Leading pharmaceutical players reluctant to enter the adhesive bandage segment

(d) An attempt by band-aid manufacturers and trade to block competition

(e) Band-aid being the only adhesive bandage available in the market.

 

21. ___________ is the number of times a target prospect is exposed to your advertising.

22 Copywright is nothing but ____________________.

23 Aaker and Myer have added an extra positioning strategy called positioning by ________________.Product class/cultural symbol/product user

24 Magazine have a long life span and ___________ readership

25 _______________ is heavily dependent on database management direct marketing/personal selling/event sponsorship.

26 When Procter & Gamble introduced Swiffer, a new product to make it easier to clean increasingly popular hardwood floors, it knew it had to achieve high brand awareness among its potential consumers because the product was low-tech and fairly easily imitated. Which promotional element did P & G emphasize?

(a) Advertising (b) Personal selling(c) Sales promotion (d) Public relations(e) All of the above equally.

 

27 When the salesperson told the safety engineer his company needed to buy a mercury clean-up kit, the engineer promptly replied his company did not need such a thing and refused to introduce the salesperson to the companys purchasing agent. In this instance, the safety engineer acted in which buying center role?

(a) Influencer (b) Buyer (c) User (d) Decider (e) Gatekeeper.

 

28 Which type of advertising is most appropriate for introducing new product categories?

Reminder advertising (b) Informative advertising

Persuasive advertising (d) Comparison advertising

(e) Reinforcement advertising.

 

 

 

 

29. ______________ department is the most important department of an advertising agency.

 

30. The promotion mix has the following elements _________, ________, __________,

__________, _____________.

 

 

 

Section II marks 20

Can the Brand be saved

It was almost 11 P.M. when Shivani Mehta left the office. She was exhausted. The day had been filled with one meeting after another, and she wanted nothing more than to crawl into bed and get some sleep. But she couldn't head home before stopping by the local 24-hour supermarket. The store was enormous and stocked food, pharmaceuticals, stationery, books, and even small appliances. Squinting in the bright lights, Shivani Mehta made her way to the health-and-beauty display and stood, staring, at the display of La Shampoo on the top shelf. Nearby, grouped with other conditioners, was the La Shampoo conditioner.

Introduced in 1975 and targeted at women between the ages of 15 and 30, La Shampoo had a stylish image that had immediately become popular. The line had quickly advanced from a strong West regional presence to a solid 4% share of the national market -- a position it had held more or less steadily for 25 years. La Shampoo's basic products and packaging had been modified several times over the years, but its look had remained essentially unchanged. And its slogan, "La Shampoo: For the Look and Feel of Europe ," had stayed the same since day one. In 2000, the line had begun a very slow descent, but the company hadn't really addressed the problem until two years ago, when it named Shivani Mehta brand manager.

At first, Shivani called for a new packaging design. She knew that La Shampoo was in trouble, but maybe a quick pick-me-up would do the trick. The ad agency backed her up and developed a modest "new look" campaign. This repackaging had caused a lot of tension at the office. Most of the people who worked on La Shampoo had been with the company for years and couldn't imagine anything other than a slight variation on the tall, slim, blue plastic bottles with the beige labels and cursive lettering. And, in fact, the repackaging -- a wider bottle and yellow label with sharper lettering -- had had no positive effect on sales since its introduction eight months ago: the numbers had continued their slow decline. Shivani wondered if many customers had even noticed the change.

Shivani shifted her gaze down to the products displayed at eye level. All newer than La Shampoo. All starting to grab market share. But with no consistent recipe for success -- at least none that she could discern. Some claimed to be "green" products, charged a premium, and made out like bandits. One touted a "Low, Low, Low Price!" and sold huge quantities. La Shampoo had always been a high-quality product, a bit more expensive than its competitors, and its marketing strategy -other than the package redesign -had remained consistent over the years. La Shampoo had always sold on an image . Clearly, though, that message wasn't working anymore. Tired , Shivani left the health-and-beauty Display and walked slowly toward the exit, deep in thought.

The next morning, Shivani Mehta was at her desk early, doing some last-minute prep work for an 8 AM marketing meeting with Aseem Narang, her product sales manager, and Piyush Mathur , a representative of the advertising agency that held the La Shampoo account. Both had submitted proposals before the meeting; each document was thoughtfully constructed and presented a cogent argument. However, the two recommendations were radically different. Piyush thought that La Shampoo needed a strong brand campaign. Aseem wanted to compete on price. Shivani wasn't convinced either of them had the right recipe, but she did feel strongly that the middle road wasn't an option.

At the meeting, Aseem spoke first. "I'm not going to waste anyone's time mincing words. We need a short-term solution as well as a long-term plan. Some of our key accounts are in jeopardy, and the only way to save them is to lower our prices permanently."

"That's not a real solution," Piyush countered. "What happens after you cut the price? The competing brands will lower their prices, too, and then we'll be in the same situation we're in now."

"You don't seem to be getting the point, Piyush," Aseem snapped. "La Shampoo is dead unless we discount right now. We need to buy some time in order to save the brand."

Shivani raised her eyes toward the ceiling but said nothing. Aseem was known for getting riled up pretty quickly, and today, it seemed, was no exception. His style worked for revving up his sales force, but it didn't go over as well in a small conference room.

"And you don't seem to understand that you won't be buying any time by making that kind of move," Piyush shot back. "If you drop the price, you won't have a brand left to build up."

Aseem stood up and grabbed a black marker. He quickly outlined a bar graph on the wall board depicting national market-share levels of the top shampoo brands and then circled the bar representing La Shampoo, just below the 3% mark.

"Here is where we are," he said. He drew another circle below and to the right of the first one. "Here is where we'll be in three months without some sort of price advantage." He jabbed at the board, crushing the marker's felt tip. "I'm telling you, we don't have the time to develop and roll out a completely new ad campaign. After we've stabilized the account, maybe. But not now. I'm even beginning to think that trying to protect any kind of brand name is a losing battle. You've read the papers -- brands are going the way of the dinosaur.'

"You're too close to the issue to see what's good for the product," Piyush said.

"And you're too concerned with your own interests," Aseem countered. "At bottom, you want a new advertising campaign because it will be good for your company."

The debate went around in circles. After a mere 25 minutes, Shivani could see that discussion of this kind wouldn't solve anything. She called the meeting to a halt.

"I'm going to have to review your proposals again and come to a decision," she said. "I'd like a commitment from each of you that you'll support the plan I choose, even if it is not yours. You both know that the only way either of these options will work is if we pull together at every level -- and those of us at the top will have to send that message."

Piyush nodded. "I'll support that," he said.

Aseem stood up. "I will as well," he said. "But if you're seriously considering a new advertising campaign, I think you'll find out pretty quickly that we're too late for that kind of move." He gathered his papers and quickly left, letting the door slam shut behind him.

Shivani Mehta was temporarily at a loss for words. She hadn't expected Aseem to leave so abruptly. She told Piyush that she'd get back to both of them within a week and followed Aseem into the hall, but he was already gone.

Back in her office, Shivani returned a few phone calls and then turned her attention to her E-mail. She had only one message -- from Mrinal Sinha, director of new product development.

"Shivani, I'd like to schedule a meeting with you ASAP to discuss the combination shampoo/conditioner our team has been working on. We should have a preliminary conversation about La Shampoo, and whether or not you think our new combo should be rolled out as part of the La Shampoo line. I think it should. Our research indicates that people are increasingly demanding more convenient products like combos. Without some kind of a shot in the arm, La Shampoo will be at the end of its life cycle sooner than we'd all like to think. And, frankly, it will be an embarrassment to the company if we don't introduce a combo soon. We've been ready for four months."

"As if I didn't have enough to deal with," Shivani Mehta said under her breath. The market research was so cloudy that it could be used to support almost any argument. And Shivani had heard Mrinal talk about new product launches before. Mrinal clearly had no concept of what was needed to build a brand. But Mrinals limitations weren't the issue right now. La Shampoo was the problem, and some decision about the marketing plan had to be made soon.

Who do you think would be the customers for La Shampoo's.

What should Shivani do.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Integrated Marketing Communication (marks-50)

 

(Do any two question)(10 marks)

1)      What is scheduling and the various patterns

2)      What is sales promotion

3)      What are the various methods of setting advertising budgets

4)      What are the various media available to communicate marketing message how does one take the decision .

 

 

 

Read the case carefully and answer the following questions:

Relate the case to the Product Life Cycle concept and analyse the strategies adopted by ITC in the introduction and growth stage of the PLC of Scissors.

(Marks 15)

4. What are the Brand Management lessons that can be learnt from ITCs management of Scissors, over the years?

( Marks 15)

 

SCISSORS

Scissors was launched in 1912, by the erstwhile Imperial Tobacco Company, today's ITC. In launching Scissors, ITC was introducing not just a new brand of cigarette but an altogether new product in the market. In fact, the company was launching a new smoking habit for the Indians. The smoking habits till then generally consisted of Hookah, Chillum, Cigar and Beedi. Chewing tobacco was also popular and formed a part of the general pattern of tobacco consumption.

ITC was attempting to open the vast Indian market for a new experience in smoking. Initially, ITC employed a commodity marketing approach for Scissors as those tempted by the promotions would naturally go for Scissors, because there was no competing brand. The Promotion campaign extolled the virtues of cigarette as such and not the brand, Scissors or the company. The brand was positioned in the market as a new concept in smoking. The Product itself was a Unique Selling Proposition. The prices were kept low. Promotions and distribution

accounted for the bulk of ITC's expenditure.

During 1920s, 30s and the major part of the 40s, the sales of Scissors climbed up substantially. A large number of conventional non-cigarette smokers were shifting to cigarettes. ITC kept a close watch on the price-demand patterns and increased the price in small doses. The low price continued as a part of the market penetration strategy. In the early 1940s the first competing brand, Panama, launched by the National Tobacco Company, appeared in the market. It was priced much lower than Scissors and adopted a high volume - low unit pricing strategy. It provided a new flavour. Its modern soft-cup design was an added attraction. This packaging was cheaper and reduced the unit costs. Panama had the benefit of yet another advantage, its Ad campaigns tried to explain the "Swadeshi" mood, a strong national sentiment, prevalent at that time. Positioning against ITC, the Imperial Tobacco Company of Britain, this was a cash-in point for Panama. Though Panama did not have a perceptible impact on launch, it succeeded in fragmenting the cigarette market, based on price. So far, for ITC, the job was one of marketing a generic product, cigarettes.

Panama changed the situation for ITC and Scissors. Though Panama was a slow-starter, with the aid of aggressive marketing strategy and sustained market place inputs, it started growing in the early 1950s at the expense of Scissors. The sales of Scissors went down to 193 millions sticks in 1952-53 from 234 million sticks in 1948-49. ITC revamped the three-decades-old advertising campaign, by changing the visuals and the message. Along with the new Ad campaign, ITC also implemented several sales promotions aimed at the trade. It had very little image-building potential and had little effect on the consumers. ITC made an attempt to bring price parity with Panama, while, still, keeping the brand financially viable. To meet the double objectives, ITC went in for strategies of product economy like cheaper tobacco and reduced the length of the stick. To contain the costs further, ITC also reduced the expenditure on promotion and advertising. These mid-course corrective measures became counter-productive and expedited the process of decline. In 1948-49, Scissors commanded a share of 16.6% of the market. During the next 12 years, the market share of Scissors went down steeply touching a dismal 6.5% by 1961-62.

ITC was confronted with two choices. Milk the brand and exit or revive the brand. ITC embarked on a bold strategy to make higher investments in the brand and revive its image and provide superior value for money. To revive the brand, enriching the product was a major requirement. Scissors was to acquire a distinct image through innovative packaging and marketing communication. Changing the pack design was a highly sensitive issue. Wrongly handled, it would amount to "discontinuity" of the brand and give opposite results. So, ITC discovered a reason for changing the pack design.

A rationale was found in the diamond jubilee celebrations of Scissors. The new Ad campaign "For men of Action - Satisfaction" adopted a life-style positioning. The "Action" was the image dimension, "Satisfaction" was intended to underscore the physical product promise. The product, too, came in a better blend. All these inputs reversed the decline, and the market share increased from 6.5% in 1961-62 to 12.8% in 1970-71.

Between 1971 and 1973, the cigarette market underwent substantial changes. More manufacturers had come on the scene, dozens of new brands in various categories had appeared; the "filters" had come in a big way and the "plains" were losing ground and the consumers had a variety of choices available to them. Both Scissors and Panama were

losing their sales and shares. Their customers were turning away from them, switching over to brands in the lower price categories. In 1974, Scissors hiked its price beyond the erstwhile price of 10p per stick while Panama held its price at 10p per stick. Scissors market share nose-dived from 13%in 1970-71 to 3.9% in 1975-76. The volume fell to 191 million sticks in 1975-76 from 675 million in 1970-71. Scissors, obviously, had not yet attained an image, strong

enough, to breakaway from the price barrier. The brand had not been prepared for a price increase - a lesson ITC learnt the hard way.

In 1977, the price was reverted to the original level of 10p per stick. In 1980, Scissors managed to capture the all-time high of 17% market share and a volume of 1133 million. But this revival was at the cost of profits. While the Scissors sales volume continued to grow, the profitability of the brand continued to decline due to the inability of the manufacturer to increase its price in the face of the competitors holding their price. ITC did not repeat its earlier mistake of a quick price increase. It adopted a strategy entirely different from the earlier one. Scissors was prepared for a price increase through product improvement. Scissors was provided with fresh inputs in product, packaging, blend and quality. The "Action - Satisfaction" theme was retained, as an element of continuum, but "the man of action" was more

sophisticated. He graduated from the scooter rallies of yester-years to car rallies. These inputs allowed Scissors to break away from the strangle-hold of the competitor's price barrier. The price was increased in 1981. The consumer did perceive the improved product as good value for money. On this occasion the volume decline was only marginal and, after a temporary dip, the volume continued to grow. Recognising the need for further upgrading the brand image and

heightening its contemporariness, ITC also placed a king-size version of Scissors in that market.

Over the years, the goodwill of the Scissors brand was used to spawn an entire brand family. Scissors massive volume base made it a carrier brand on whose broad back, many other brands of ITC rode.