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SEM 4 – MK

Master of Business Administration – MBA Semester 4

MK0015 — Service Marketing  & Customer Relationship Management – 4 Credits

Assignment Set- 1 (60 Marks)



Note: Each question carries 10 Marks. Answer all the questions.


Q.1 Mention the bases for segmentation of services with examples.

Answer : Over the last years we have been doing a tremendous amount of customer segmentation work with the marketing departments in companies across number of industries. We have experienced that there are many misconceptions about what “segmentation” really is, why we do it, and what we can expect to achieve from it. All too often marketing departments thinks that database analysis is the first, last, and only step in segmenting the base of existing customers. In fact, identifying clusters of common behaviours is only the first activity you should undertake in creating a customer base segmentation.

Customer segmentation is not a piece of database work. It is a strategic or tactical business activity with with hard monetary benefits. Yes, you do need to-do some data mining, and how clever you are in doing that is important, but that is not (or should not be) the primary activity. Assuming that you are doing segmentation for the right reasons and you therefore know how tomeasureif you are successful, then what are the steps you need to make it happen? We have found the following list useful:

1.Database analysis


  • Behavioural clusters


2.Market survey


  • Behavioural segment descriptions

3.Market strategy


  • Brand and market positioning

4.Market research


  • Strategic segments

5.Needs-based segmentation


  • Development segments


This is not intended to suggest that you must always perform all the activities on the list. Sometimes you may only need some of them to achieve your objectives. But it is an ordered list so start at the top and work your way through until you have achieved (and measured!) your goals.

Let’s look at the steps in turn.

1. Database analysis to determine behavioural clusters

The first step is to take your customer data and analyze it to determine clusters of similar behaviour. Much has been written on the subject elsewhere so I will not go into technical details here. But from a business perspective it is essential that you know why you are segmenting so you know which variables you want the clusters to split. We discussed this in some detail in our previous article about the 3 things we want from customer segmentation

. You want the segments to be different on the variables that are important for your business. Otherwise the segments are not useful. All too often we see marketing departments commissioning data mining without specifying clearly how they want to use the resulting segments. “Find us some clusters” is not project brief. The analysts will find you clusters without any problems, but they will not be commercially significant or deliver the bottom-line benefits that you need.

2. Survey your customers to obtain behavioural segment descriptions

Sometimes the database clusters may be sufficient. Maybe you only want to improve the targeting of some existing campaigns. But if you want to consider developing new campaigns or new propositions then you need at least some business understanding of these customers. Not just what they do(step 1) but also who they are(step 2)

Usually you will to this by asking them. You take a small random sample and interview them about who they are. This is classic market research and there is plenty of available literature on the subject. You know what you need to do, just realize that your organization is probably not very good at it unless it is specialized agency and it has a large budget (which is rarely cost-justified). But it doesn’t have to be perfect, it has to be useful. You can (and should!) almost always trial your campaigns first to see if they really deliver what you expect.

3. Determine your market strategy and your company’s position in the market

You’ll want to understand your organization’s desired position in the market so you can develop the right segments with he right propositions. It is thatvisionthingagain. You need to have a vision for your company and where it is going. As marketing manager, it is your responsibility to translate this into customer segments. Who are our customers. Who are our non-customers? Who are our customers that are not using all of our services or products? How do we target


them better and how do we articulate the value that we as a company can add toothier lives. You need this when you want to develop new campaigns, new marketing messages, and new propositions.

4. Determine your strategic segments



This is segmentation as a strategic business tool. You’ll want to understand your organization’s desired position in the market so you can determine which segments to develop. Depending on how strategic the marketing department is considered with the company, and depending on the status and ambition of the marketing manager, this may be a step too far. But if you want to play at the top table this is what you do. One company we worked with commissioned additional market research on their segments to measure them on two dimensions: lifetime value (x-axis) and how well the segment was aligned with the organization’s strategic direction as expressed in its vision (y-axis). They then focused their attention on the segments to the right of the dotted line. That does not mean giving up on the others, but most of new campaigns and propositions target the strategic focus segments. This picture proved to be an important tool in communicating at the CXO level what the company was about, where it was headed, what the challenges were, and where the opportunity lay. This is an extremely powerful tool


5. Needs-based segmentation for proposition development

There may not be enough growth opportunity in your strategic segments from the previous analysis. Or maybe you are responsible for developing new

propositions. In that case you want to develop an needs-based segmentation not just of your customers but of the whole market. You can start with your customers and understand their needs, especially the needs your company is not currently fulfilling. In fact, you should  start by analyzing and questioning your customers since (a) it is much easier to sell to an existing customer and (2) you (probably) know who they are so they are easy tocontact.Eventually you will probably want to commission market research to identify unmet needs in the general population of potential customers. But this inexpensive research and it is hard to make sure you develop the right offers and very expensive to bring them to market. So make sure you get the most of your existing customers.

Organizational alignment to make use of segments

We will talk more about this some other time. But as the marketing manager it is your responsibility to clearly demonstrate the business value of the segmentation that you are developing at each step in the process and to ensure organizational buy-in to use them as the reference for communication and activities. Segments are not just for marketing.


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Q.2  Explain service quality concept.  Evaluate the growth of services marketing.


Q.3 Briefly explain the five factors that influence the level of adequate service.


Q.4  Discuss service quality measurement and service mapping.


Q.5             Explain hard and soft customer defined standards.  Compare flexible services and standard services.


Q.6           Define service sector in India and classify  the major service sectors.






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Master of Business Administration – MBA Semester 4

MK0015 — Service Marketing  & Customer Relationship Management – 4 Credits

Assignment Set- 2 (60 Marks)



Note: Each question carries 10 Marks. Answer all the questions.


Q.  Explain the types of new service developments and its stages

Answer :                             THE PERFECT BRIDE


“Perfect Bride” is a service firm which helps the would-be brides or girls who are about to get married to learn and train themselves to better adapt to the change that they are about to witness in their lives. We conduct sessions where in girls are trained in various aspects of married life like:



  • Inter personal relationship handling


  • Time management


  • Personal grooming


  • Fund management


  • Inter cultural training



House hold learning We also provide services of wedding planner which will take care of althea activities of the wedding including decorations, various rituals planning, guests handling, caterers, venue handling, wedding couture, bridal make up, etc.One of the striking features of our service is that we give inter cultural training to girls having inter caste marriages where in we train them in various aspects of the new cultural that they are being married into like dress, food type, rituals, language, etc.




The new service development process starts with the search for ideas. New service ideas can come from customers, competitors, employees, interacting with various groups or top management. There was a brain storming session conducted by the company with the top management discussing about various customer requirements. Various informal sessions were also conducted where customers talked about their needs and wants. Thus various ideas were generated.


The basic need for idea screening is to eliminate poor ideas as early as possible because with each service development step, the cost of development rises. All the ides were submitted to the idea manager which was then reviewed by the idea committee. The ideas were then divided into groups of promising ideas, marginal ideas and rejects. The idea in the group of promising ideas was then researched by the committee. The committee reviewed the idea against set criteria like: a)


a)      Will the service meet a need)


b)      Can the service be appropriately advertised)


c)      Does the company have enough capital for the service?



In this stage the service had to be described in detail. The company needed to develop a concept about the service to describe it to its customers

To develop a concept for this service the company had to think about many questions like- who will use this service?? Teenage girls or would be brides. Second, what benefit will it provide them? Better adjustment after marriage or experience sharing about married life. Third, when will people use this service? After being engaged, after graduation or after marriage. After considering various questions for developing a concept for the service, our company finally formed the concept of an opportunity for would be brides who want overall knowledge and experience sharing about marriage life for leading happy married life.


Concept testing involves presenting the service concept to appropriate target customers and getting their reactions. The more the tested service resembles the final service, the better it is. Concept testing involved elaborating the customers upon the concept of the service and getting their reactions and acceptability of the service. We elaborated on the concept as providing services that will help girls who are about to get married to learn about the various aspects of being married and leading a happy married life by training them on handling relationships, time management, personal grooming, adapting to new cultures in case of inter caste marriages, wedding planner and many more.


After the management developed the service concept and tested the feasibility of the service, it prepared a sales, cost and profits projections to analyze the entire service.

Estimating total sales: Sales in term of this service would mean as to how many people avail this service and enrol for such programs. This is a repeated purchase service i.e. people keep getting married and thus customers demanding such a service will not go down torero. So sales are estimated to be favourably good in this kind of a service. Estimating costs and profits: The initial cost of this service would include the cost of advertising and marketing the service, hiring teachers and experienced work staff to train the people whoenroll and collaborating with various people who will be needed to ultimately plan the wedding for their clients. Profits are expected to be fairly good because as in a country like India where people spend lavishly for weddings, profits are expected to be good over a period of some time.


After the management was satisfied with the concept of the service and the business aspect of it, they decided to go for market testing where the consumers are offered the product and its acceptability can be checked. We went in for alpha testing where we tested our service within our organization. We went to few of our friends and one of our relative who were about to get married and explained them about our concept. The customers we approached towered quite excited about this service and wanted to enrol for it.


Now is the time to finally launch the service in the market. Before the service is launched in the market, several decisions are to be taken like:


WHEN: This involved deciding upon the market entry timing. As this is a very new service concept which does not exists, we will surely enjoy the first mover advantage by way of grabbing key distributors and customers.

Secondly, we have decided to come out with this service in the month of September, as this is the time when the wedding season which is considered auspicious in our country is about to start. Thus it will be a good time to start this service.

WHOM: Our target customers will be upper middle class and upper class society people who can afford to and will be willing to spend lavishly at weddings.

WHERE: During our initial launch, we will be starting up with our service in Delhi and Mumbai which are big metropolitan cities and have population who might be willing to avail such a service.

HOW: this decision basically includes how the service will be launched. It requires deciding upon the marketing strategy and promotional techniques of launching the service in the market. The marketing strategy has been explained in terms of the following:


Our product is basically a service that provides would-be brides withal detailed learning experience about the new life they are about to enter. It provides services like relationship handling, fund management, time management, personal grooming and wedding planner.


We have decided to start our service in metropolitan cities like Delhi and Mumbai where the population will be willing to spend on wedding planning and learning courses.


The price list for our services is as below: We have courses in:

Relationship handling: Rs. 6000 for 15 classes twice a week

Time management: Rs.4000 for 10 classes twice a week

Fund management: Rs. 4000 for 10 classes twice a week

Personal grooming: Rs.7000 for 15 classes twice a week

Wedding planner: as per requirement

Household learning: Rs.5000 for 10 classes twice a week

Cross cultural training: Rs.4000 for 19 classes twice a week

Entire package cost without wedding planner: Rs.25000 + taxes as applicable

Entire package cost with wedding planner: Rs.25000 + cost as per wedding requirement+ taxes as applicable


The various promotion techniques that will be used for promoting the service willbe:1)


1)      Newspaper advertisement in matrimonial section of the newspaper2)


2)      Online marketing on matrimonial sites like and vivaah.com3)


3)      Promotion by setting up stalls at wedding exhibitions like Vivian, bridalasia,bride and groom,etc4)


4)      Printing ads in wedding magazines5)


5)      Radio jingles6)


6)      Printing brochures and pamphlets7)


7)      Advertising at various popular beauty salons


Our services will be provided by people who have been specially trained to provide relationship counselling, cross cultural training incise of inter caste marriages, time and fund managers who will train clients, interior decorators and planners for wedding planning.




All the members who enrol for our service will be given an automated i-cardwhich will serve as an identity proof for them and which can be used for entering personal data on our website, any personal queries and will also be used to track class records and take back up classes.


The entire course will be conducted by experienced trainers who would create real life situations for clients and then teach them and help them deal withsituations.Practical learning sessions will also be conducted for personal grooming sessions which would include cooking classes, personal make up sessions, etc.For the purpose of relationship handling, counselling sessions and open discussions will be conducted where personal queries can also be taken.





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Q.2               What is service differentiation? Explain service differentiation strategies

Q.3              What are the different stages in which organisations choose innovative operational methods?

Q.4               What are the various levels of customer satisfaction? How important is a plan or methodology to initiate customer responses?


Q.5            Categorise the marketing mix in insurance sector & airline industry .


Q.6  Define the elements of strategic management. Mention the technical options in the service marketing.


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Master of Business Administration – MBA Semester 4

MK0016 — Advertising Management & Sales Promotion – 4 Credits

Assignment Set- 1 (60 Marks)



Note: Each question carries 10 Marks. Answer all the questions.


Q.1              Why sales promotion is an integral part of marketing?  How does it differ from marketing and advertising?

Answer :   Sales Promotion

Kotler indicates that sales promotion has “distinctive qualities”.

Insistent presence. An attention-getting quality that can break through buyer inertia.

Product demeaning. Careless or too frequent use can cause people to question the value of the product.

Factors accounting for the increasing use of sales promotion:

The proliferation of new brands. Sellers have to work hard to get people to try their brand

Low quality retail staff and growth in self service. Sales promotion is often associated with the point of sale (eg an on-pack promotional gift) where the purchasing decision is made

Many sales promotion activities can be introduced quickly. e.g.: “10p-off” coupons and can produce sales quicker than advertising

It can contribute to the effectiveness of other elements in the promotional mix (synergistic effect)

Some problems associated with the use of sales promotion:


Product demeaning


It can be expensive e.g.: unexpected high demand for free gift

Problem of subsidising already loyal users. e.g.: 20% extra free packs


Targets of Promotion:


1. The trade. Examples include prizes for high sales levels and discounts to encourage dealers to stock


2. The consumer. Examples include free samples to encourage trial of a new product or a competition to encourage consumption of a product in the off season.


3. The sales force. Examples include holidays as a reward for meeting sales targets, and sales conferences as a means of improving sales force motivation and morale.




Kotler indicates that publicity has the following qualities:

High credibility. News stories and features seem more credible than adverts.

Off guard. Publicity reaches people who might avoid salesmen and adverts

Dramatisation. Like adverts it can dramatise a company or product.

Free, win save!


A Guide to the Use of Sales Promotion Techiques

Offers. There’s so many different types, — competitions, buyback offers, free draws, money-off coupons, sweepstakes, phone–ins, free samples, share-outs, charity promotions, free mailings, self-liquidating premiums and so on. The list seems endless. Promotions are now an integral part of the modem business scene. No longer are they purely in the supermarket domain. More and more industries are learning how to use sales promotion as part of their marketing effort.

It’s important to bear in mind, however, that promotions are just one part of the marketing mix and consequently you need to consider whether or not investment in other areas eg. on improving the product or on advertising might meet your objectives in a more cost-effective manner. Once the decision has been made that a promotion is required — how does one select the most relevant technique from the wide variety available? In the first stage it is a question of defining the promotional objectives. Techniques can vary considerably in their effectiveness at solving particular problems. Sales promotions can assist in solving quite diverse problems such as: stimulating stock movement, encouraging repeat purchase, securing marginal buyers, increasing penetration of new or existing products, increasing sales volume, bringing forward buying peaks e.g.: seasonal sales, attracting customers to premises, correcting poor distribution levels, increasing awareness and loyalty, securing display in store, or broadening the brand’s appeal.

Promotions cannot change long term trends in the life of a brand or take the place of advertising and personal selling, nor are they any substitute for healthy consumer demand. For example, promotions may slow down the rate of decline of a brand but cannot reverse it without a significant and lasting change in the value (product and advertising based) that the brand offers the customer.

Promotions are generally regarded as short term marketing tools which are used to achieve specific objectives during a defined time period. Whilst they are acknowledged to be a means of offering temporary added value to the customer they should, nonetheless, form an integral part of the brand’s long term strategy. Unlike advertising, promotions act at the point of sale. As such they can be extremely versatile. They can be used against specific target groups e.g.: particular groups of customers, stores on a geographic or time basis, sales can be substantially increased during the promotional period and their effect and cost can usually be assessed in advance by prior testing. On the downside, most often fail to provide a lasting sales increase, there can be considerable extra costs involved; special displays, extra packaging, time and effort by the salesmen which is frequently ignored in evaluation. Price promotions if run for too long could establish a lower price level or price war with competitors and a profusion of price promotions cannot only seriously undermine brand loyalty but can increase the likelihood of switching between brands.

Sales promotion activity will impact on a company’s sales operation and in particular the sales force, so it is essential to plan ahead and co-ordinate promotional activity across all the company’s brands. Promotional activity should be tied in to key marketing activity such as new product introductions, relaunches, merchandising activity or price increases. Not only will this result in more cost-effective promotions but will also help to avoid difficulties such as conflict of sales force priorities, repetitious use of identical promotional techniques, over-promoting a brand, the incorrect timing or use of promotions. Forward planning can help identify when it might be appropriate to mount multi-brand schemes, merchandising activity, tailor-made promotions and so on. Identifying the promotional objectives is an essential pre-cursor to effective and efficient promotional activity. Aspects to consider in drawing up the objectives include: the nature of the problem the promotion is to solve; penetration, repeat purchase, distribution, or display, the budget available, the nature of the product or service involved and target group the promotion is seeking to influence.

Finally, it is important that all promotional activity is evaluated against pre-set action standards, as this can help in the design and budgeting of future promotional activities. Wherever possible, promotional objectives should be quantified in order to provide a yardstick against which the promotion can be measured. Money off coupons are used extensively to secure brand trial. In this respect couponing, after free samples, is the most effective device to introduce a new or improved product. It is also effective at building onto existing users, winning back lapsed users and encouraging repeat buying.


1.Sales Promotion Vs. Advertising

Successful companies use targeted marketing strategies to compel consumers to purchasing goods and services. Marketing campaigns may include sales promotions or advertising, two popular marketing techniques of businesses.

Sales Promotion Definition

Sales promotions are ways to promote sales by offering extra incentives for consumers. Standard sales promotion gimmicks include “buy one, get one free,” free gifts with purchases, special coupons and 0 percent financing.


Best Uses

Sales promotions are best used with special events or big-ticket consumer items. Goods with an established market and consumer demand benefit from sales promotions because they give consumers motivation to purchase items now rather than later.

Advertising Definition

Advertising is any method used to attract consumer attention to products and services. Radio commercials, television ads and Internet websites are popular forms of advertising.


Best Uses

Advertising is used to introduce new products into the marketplace and show consumers the benefits of these new products. Advertising can also infuse life into existing products by reminding consumers of the need to replace an item that is old or worn out.


Marketing Budgets

Marketing is an expensive part of doing business. Creating a good mix of advertising and sales promotions can generate a lot of interest for a company and lead to increased sales. Companies must determine which marketing method best promotes their product and create a marketing strategy that is inexpensive and effective.


2. Sales Promotion vs. Marketing


Advertising and promotion are two marketing tools and they are both used in the modern marketing. At first sight it is very hard to see the exact difference between advertising and promotion. Both advertising and promotion use the same techniques and the gained results are basically the same.



However, there are a few things that highlight the difference between advertising and promotion. These differences are the following :



– amount of time spent ( advertising need more time for results, while promotions have instant effects )


– impact on overall sales ( advertising can produce greater profits, promotion lower profits )


– overall costs


– general purpose


– company type


The advertising techniques are often used by middle level and large level companies. The goals of these companies are the strengthening of their brand and the building of long term sales. The most popular types of advertising are the television and radio adverts, national or local press advertisements, large billboards and posters.


The main power of advertising is creating strong brands and making long term sales. Beside the long term sales advertising also helps to improve short term and middle term sales too. Building and the strengthening of the consumer loyalty is the ultimate goal of advertising.


After starting an advertising campaign we must wait a longer period of time before we can see any substantial results. This time period can be from months to even years. Because of this time frame and the high initial costs, advertising is suitable for large companies and corporations only.


On contrary to advertising, promotion is more focused towards the short term results. Although promotion is also participating in the process of brand building this is not its goal. The only major goal of the promotion is to build the sales in the short time period. The most popular ways of promotion are the discount coupons in the local press, two for one special promotions, free product samples and other special events held in stores.


The creation of promotions is very easy and they can result in very good short term gains. The cost of the promotion is significantly lower than advertising and because of this fact promotions are more suitable for small companies. The cost efficiency and the required time frame do not exclude medium companies or large companies to organize promotions. On the contrary, medium and large corporations also set up promotions, the everyday example is the daily or weekly product promotions in large national store chains.


Of course, there is a number of similarities in advertising and promotions. These two marketing tools are sometimes support each other and it is not rare that advertising campaigns use promotions too. During advertising campaigns, promotions are used to make the overall success of the campaign greater.




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Q.2              Explain why the three segments of the very young, the working women and the elders need different advertising strategies now.


Q.3              Explain the advantage of Direct Marketing. List all the methods and media used for it.

Q.4              Marketers and advertisers are often accused of cheating the customer. How far is it true? To what extent is the customer also responsible for it?



Q.5              What role does copy play in a campaign? Why copy has to be written with great knowledge and skill?

Q.6             Mention the methods of fixing advertising budget, with their strengths and weaknesses.   Which method will you recommend for a medium sized FMCG manufacturer in a stable market?


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Master of Business Administration – MBA Semester 4

MK0016 — Advertising Management & Sales Promotion – 4 Credits

Assignment Set- 2 (60 Marks)



Note: Each question carries 10 Marks. Answer all the questions.


Q.1               What are the above – and below – the-line media? Describe the most powerful ones in both. What is a media mix?

Answer :  Above-the-line

There are a number of approaches to promotion that are open to organisations. Above-the-line promotions use mass media methods. This type of promotion focuses on advertising to a large audience. It includes print, online media, television and cinema advertising.

As the fourth largest car company in the world, Kia is a big brand. It offers a range of products targeted at different market segments. Above-the-line activities include adverts in the press. They also produce online banner advertisements, place advertisements on billboards and use their website to meet the needs of their consumers. Recent TV advertising campaigns have included the ‘small yet mighty’ cat for the new Piano and the ‘future proof’ Kia cue’s, emphasising the 7 year warranty. TV advertising has also been used to relay the message that Kia is an official FIFA partner.

Making a message memorable to a large audience is not always easy. It is difficult to tailor a promotion to a specific group of consumers through above-the-line promotions. This is because it is viewed by a mass audience with different tastes and needs. Above-the-line promotion is also very expensive.


Below-the-line methods are very specific, memorable activities focused on targeted groups of consumers. They are under the control of the organisation. Kia uses these techniques to target clearly defined consumer groups rather than a mass audience like its above-the-line activity. The purpose of these activities has been to develop the brand by creating awareness and building a brand profile. Below-the-line methods include:

  • sponsorship
  • sales promotions
  • public relations
  • personal selling
  • direct marketing.

Difference between ‘above the line’ and ‘below the line’ advertising

Above The Line (ATL) and Below The Line (BTL) advertising are two terms that are bandied around often these days in the advertising world and often have the lay person confused as to what they stand for. It might be worth our while to begin this by defining what constitutes the metaphoric ‘Line’. To quote Michael John Baker from The Marketing Book , the terms ‘Above The Line’ and ‘Below The Line’ came into existence way back in 1954 with the company Proctor and Gamble paying their advertising agencies a different rate and separately from the agencies who took on the other promotional activities.


What are ATL and BTL activities? They seem simple enough. Above The Line (ATL) advertising is where mass media is used to promote brands and reach out to the target consumers. These include conventional media as we know it, television and radio advertising, print as well as internet.  This is communication that is targeted to a wider spread of audience, and is not specific to individual consumers. ATL advertising tries to reach out to the mass as consumer audience.

Below the line (BTL)  advertising is more one to one, and involves the distribution of pamphlets, handbills, stickers, promotions, brochures placed at point of sale, on the roads through banners and placards. It could also involve product demos and samplings at busy places like malls and market places or residential complexes. For certain markets, like rural markets where the reach of mass media like print or television is limited, BTL marketing with direct consumer outreach programmes do make the most sense. Says Right Hanna, CEO, CASHurDRIVE,  “When budget is issue and the brand wants to have a consumer connect BTL has better ROI.”


Other BTL activities could include road shows, or moving hoardings with the ad of the product, and vehicles with promotional staff interacting with people demonstrating the product and distributing  literature on the product.  BTL advertising is advertising that uses less conventional methods of advertising that the specific channels of advertising that may or may not be used by ATL advertising to promote products and services.  According to Ida Amphora Bhatia, Marketing Professional, “BTL is a preferred tool when test marketing a product, sampling and also in case of a targeted campaign in related to another bigger phenomenon. Also when TG is very niche, BTL makes more sense.”


BTL promotion might include direct mail promotional campaigns, PR and sales promotions which are handled directly by the company itself or outsourced to specifically PR agencies and sales promotion agencies and may or not be related to the advertising campaign. BTL advertising might include email campaigns, telemarketing, etc with targeted groups of potential clients.  Says Meghan Ghost, Account Director, Client Services at Encompass, “BTL is preferred on several occasions but the foremost would be when you need to have a personal interaction with the consumer.”


Says Kepi Tania, Regional Head, North, FUN Cinemas (Esselgroup company), “Sometimes BTL is preferred over ATL due to budget issues, the need to physically display the product, to conduct a hand on product contest as well as for new launches and teasers campaigns.” Companies prefer adopting BTL as a means of reaching out to their target consumers when their product is something they need to engage the consumer in a touch and feel experience with.


Some people would consider ATL and BTL antiquated terminologies in an era which uses the internet and lightening speed changes in modes of communication to reach out to the consumer. “When you are communicating with a niche audience BTL is better. However, digital media has more or less broken these boundaries of ATL versus BTL as digital communication can address both at the same time.,” says Narmada Rena, Director, Futures cape.


Interestingly, there is a new phrase called Through the Line, or TTL, which integrates both ATL and BTL activities. BTL communications from brands is rapidly becoming a dying form of reaching out to the audience with agencies and clients going adopting the Integrated Communication approach.


To end with a quote O&M’s Pixyish Pander, from a previous interview, on the two forms of brand communication, Below-the-line is extremely important, but then when wasn’t it? It is just that till now it was taken a bit for granted and not too many innovations were made. I am glad the industry is planning to revolutionise this game. It is not a question of mass media versus below-the-line. It is an era of mass media plus below-the-line.”

Media Mix

The entire process of strategizing, creating and executing an advertisement is one thing. And communicating that advertisement to the entire target segment is totally another aspect. For the latter prospect, certain skills and resources are required. Advertising communication is a unique process with its distinct mechanism to reach the target market as well as its own set of tool to make the desired feat possible. The diverse set of tools through which advertising communication is carried in a smooth manner is termed as media mix. Of course there are many sorts of hindrances (inclusive of both internal and external factors) surrounding the ambience of the media mix, the smooth carriage of advertising communication requires the media mix to effectively quash all those constraints and perpetuate their task. The tools that constitute the media mix are the channels of communication through which the advertisement is delivered to the target market. For instance, the electronic, print and interactive media, which contain a variety of sub-categories, the entire amalgam of which establishes the media mix.




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Q.2   Every business in India wants to pursue the middle class spending habits. Describe how valid it is and why.



Q.3              Describe the fundamental differences between the urban consumer markets and the very scattered and diverse rural markets. What created the current boom in semi-rural market?

Q.4      What is Gestalt psychology? Explain with examples how  it resembles the way a person fits in the advertising message with his existing knowledge.


Q.5   Describe some of the major tools of trade promotions. What incentive would you recommend for increasing sale of refrigerators?

Answer : Trade Promotional Tools




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Q.6            Describe why advertising objectives ought to be set up clearly at the outset. Why is it difficult to measure the return on investment of an advertising campaign?


Master of Business Administration – MBA Semester 4

MK0017 —       e- marketing     – 4 Credits

Assignment Set- 1 (60 Marks)



Note: Each question carries 10 Marks. Answer all the questions.


Q.1             List out the elements of today’s Web 2.0 landscape. What are the technological challenges faced in e-business?

Answer :  WEB 2.0 Definitions




Every aspect of Web 2.0 is driven by participation. The transition toWeb 2.0 was enabled by the emergence of platforms such as blogging, social networks, and free image and video uploading, that collectively allowed extremely easy content creation and sharing by anyone.



Standards provide an essential platform for Web 2.0. Common interfaces for accessing content and applications are the glue that allow integration across the many elements of the emergent web.



Web 2.0 is decentralized in its architecture, participation, and usage. Power and flexibility emerges from distributing applications and content over many computers and systems, rather than maintaining them on centralized systems.



The world of Web 2.0 has only become possible through a spirit of openness whereby developers and companies provide open, transparent access to their applications and content.



Web 2.0 is the antithesis of the monolithic. It emerges from many, many components or modules that are designed to link and integrate with others, together building a whole that is greater than the sum of its parts.


User Control

A primary direction of Web 2.0 is for users to control the content they create, the data captured about their web activities, and their identity. This powerful trend is driven byte clear desires of participants.



Identity is a critical element of both Web 2.0 and the future direction of the internet. We can increasingly choose to represent our identities however we please, across interactions, virtual worlds, and social networks. We can also own and verify our real identities in transactions if we choose.


Components of Web 2.0

I came across the following while working on a book chapter about mishaps. It appeared in an O’Reilly XML blog by Dan Zambonini and influenced by a Tim O’Reilly article.


It is a nice graphical representation of the various pieces and parts which make up programmable web applications:









Open web

The entire space of the World Wide Web open to anyone to access and participate. This has been the initial domain in which Web 2.0 technologies, applications, and attitudes have developed.





Inside the firewalls of organizations and their business partners. The power of Web 2.0 technologies, originally developed on the open web, are now being applied within enterprises to enhance performance and achieve business outcomes. This domain is sometimes termed Enterprise 2.0.



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Q.2              Briefly explain the meaning of SEO and how SEO works. Also explain any 3 benefits of Search Engine Optimisation in e-marketing

Q.3     What are the three different levels distinguished while defining the concept of e-CRM?

Q.4             Explain different types of positioning strategies.  Discuss targeting strategies in e-marketing

Q.5             Mention the features of e-marketing. What are the benefits & scope of e-marketing?

Q.6             Explain in brief about customers’ responses in e-marketing & how customer responses are evaluated in e-marketing.




Master of Business Administration – MBA Semester 4

MK0017 —       e- marketing     – 4 Credits

Assignment Set- 2 (60 Marks)



Note: Each question carries 10 Marks. Answer all the questions.


Q.1.   Describe briefly the nature and characteristics of B2B markets & B2C markets.

Answer : Introduction

According to the American Marketing Association, “Marketing is an organizational function and set of a processes for creating, communicating, and delivering value to customers and for managing customer relationships in a way that benefits the organization and its stakeholders” (2006). In other words, it is how a company determines what a customer’s needs are and gears its products or services towards those needs in a way that their customers perceive value and the company makes money. Marketing can be broken down into two areas, between businesses and individual customers (B2C) and between businesses and businesses (B2B). When most people think of marketing, they picture consumer products being promoted through large advertising campaigns. While that area might be publicly perceived to be the largest area in marketing, the (B2B) market is actually much larger. According to researchers, “forecasters expect domestic B2B purchases will total several trillion a year” compared to “$269 billion expected [for] 2005” (American Marketing Association, 2006). The following paper will look at some of the differences between marketing on a B2B and a B2C website.

Marketing Strategy

When a company is creating its strategy for marketing, they “must consider both the nature of their products and the nature of their potential customers” (Schneider, 2004, p. 156). What a company is trying to sell or who they are trying to sell it to will help to determine how they market their product or service. A B2C site aims to sell its product or service to an individual end user, so they “organize their websites from an internal viewpoint, that is, according to the way that they arranged their product design and manufacturing processes” (Schneider, 2004, p. 158), which is a product based strategy. They may include categorized lists of all their available products and/or services on their website for users to search through, making it easier for customers to find what they are looking for. An example of this type of marketing strategy is the OfficeMax website, where there are several different categories of office supply materials, each with its own products. A B2B site, on the other hand, is based on a consumer based strategy. Because they have to meet the exact needs of a variety of different types of customer, they cannot base their marketing on a few products or services. Instead, they need to be geared to working with the client to provide their customized needs.

Market Segmentation

Market segmentation is defined as “the categorization of potential buyers into groups based on common characteristics such as age, gender, income, and geography or other attributes relating to purchase or consumption behaviour” (Plans, 2006). It is important for both B2B and B2C sites to determine who their different customers are and divide them into groups based on similar needs to make better use of their resources. B2C sites usually place large numbers of customers with similar desires into groups who then can be targeted with similar marketing and advertising campaigns. B2B sites deal with much smaller segments than B2C sites. Instead of targeting millions of customers like B2C sites, they might only target a handful of businesses or even a single firm at a time.


Customer Relationships

Due to the nature and complexity of B2B transactions, B2B websites need to be completely focused on their customers. They need to build value oriented relationships that will keep their customers coming back in the future. A B2B customer tends to be more intellectual and investigative than a B2C customer; therefore, many B2B sites include more technical information than their counterparts. B2B users are also usually part of a decision process chain and realize that more effort needs to go into researching their needs, so they tend to accept a more complicated website than a B2C user. To build customer relationships, B2B sites work at automating the trading process, saving both parties time and money. They also tend to be set up to get users who want to know more information about their product/service to register, which provides them with contact information. A company member can then contact the interested party to give them a more personal touch, aimed at building customer loyalty. B2C sites, however, are more focused on creating a direct relationship with end users and getting them to complete a transaction right away, so they tend to use type, colour, pictures, etc. to pull consumers in, as well as providing easy transaction processing with few steps. If their site is too complex, then consumers might perceive the whole process as too complicated and move on to other sites. If they did decide to purchase at that point, they probably would not return in the future due to the work involved on their part.



Having a strong brand is important for both the B2B and B2C site; however, it is for different reasons. The B2C site needs to have a powerful brand for customers to buy their product and remain loyal. Having a strong brand also means that the company has the potential to charge a higher price than a competitor. For example, Nike can charge more for its shoes, which might be similar to a competitor’s, because its brand name carries a certain image that consumers want to have. The same is true for an online brand. When consumers recognize a brand, there is a certain amount of trust that goes along with it. Consumers tend to trust sites they have heard of over those they have not. The B2C site, for the most part, relies on appealing to consumer’s emotions, playing to their desires, style trends, and image. With a B2B site, brand identity is created through personal relationships and will only help a business to be considered, not necessarily chosen. B2B buyers use more rational thought when choosing a product/service for their company and then to be motivated by cutting costs, increasing profitability, and increasing productivity.


B2C sites’ online advertising tends to consist of e-mail marketing, pop-ups, banner ads, online communities, other companies websites, etc. B2B sites may use some of these techniques as well, but also use word of mouth, brochures at trade shows and conferences, field sales, e-mail marketing, etc.

The following chart highlights some of the key differences between B2B and B2C website marketing:





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B2B Marketing features: B2C Marketing features:


Consumer based strategy



Product based strategy
                                                           2. Transactions


Transactions take place among and within value chains. Transactions through the dealer to the end consumer
                                                   3.  Transaction Size  
Large unit transactions Small transactions
                                                                         4. Value                
Value primarily determined by business economic use. Value determined by end-consumer perception.


                                                         5.   Market Size  
               Small, focused target market Large target market


                                                       6. Branding

               Brand identity created by personal relationships.


Brand identity created through repetition and imagery.
                                                               7. Products  
Personalized marketing and customized products and prices for many types of customer. Generally similar consumers looking for similar products.


                                      8. Selling Process

Complex and lengthy selling processes, usually involving a demand decision chain.


Linear selling process, usually of short duration.
Educational and awareness building activities Merchandising and point of purchase activities.


                                                        9. Sales Focus

Sales focused on key account management and multiple purchasing influencers.  

Sales activity focused on the end user.


                                           10.   Buying Decisions              


Rational buying decision based on business value. Emotional buying decision based on status, desire, or price.




Whether a site is geared to do business between other businesses or with individual consumers, marketing plays an important role. A company must know its product and the audience it is trying to target. Depending on who the site is trying to target will determine the marketing strategy that will be used. Personal relationships play a much more important role in the B2B site. It has to be flexible for the differing needs of all its different customers, while the B2C site needs to engage the user with bold and entertaining images to try to entice them to stay with the site.



Q.2   What is a social networking site? Discuss its merits and demerits.


Q.3    How does an e-CRM help? Explain briefly the method used to calculate the Life-cycle of a customer.

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Q.4             Why is knowledge management necessary? What is knowledge management metrics and how important is it to an organisation?


Q.5            Explain briefly any three types of cyber-crimes. Explain the punishments given for cyber-crimes.

Q.6            Make a comparative study of advantages and disadvantages of B2B, B2C, B2G markets and how e-marketing can be successful in each



MBA in Marketing Management — Semester 4

MK0018: “International Marketing”

(4 credits)

(Book ID: B1199)



Marks 60

Note: Each Question carries 10 marks. Answer all the questions.



Q1.         Explain how Letter of Credit acts as an appropriate mode of payment for both exporter and importer.

Answer :    Any exporter will perhaps tell you that the most important aspect in the export-import business is finding a payment mode which is secure and safe, and all the more, acceptable to both parties. I strongly believe that it is of utmost importance for each and every exporter to have extensive knowledge of export payment mechanisms and extend credit cautiously. Whenever I’m asked as to which I believe is a relatively cheap and uncomplicated method of payment for both importers and exporters, I invariably go with Letter of Credit.


Although I always advocate Letter of Credit, with the world turning into a digitally connected global village, both the buyer and seller have, however, found various means of transacting commensurate with their needs and comfort.


For newbies to the export-import business, I would like to introduce Letter of Credit (also known as L/C, LC, or LOC) as a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. L/Cs are ideally used in international transactions to ensure that payment will be received by the seller.


The reasons why I feel a L/C is a very important tool for export-import transactions is primarily due to the factors involved in international dealings such as distance, different laws in respective countries and absence of face to face interactions between the buyer and seller sitting in two far-flung areas on the globe. It is a fact that the exporter or importer, who are located in different countries, may not know each other. As such many a time the problem of buyer’s creditworthiness hampers trade between the two.


At various platforms in the past, I have discussed with several exporters on whether L/Cs are indeed the safest and secure payment mode. They opined that being an exporter, L/Cs amount to guaranteed payment upon presentation of certain documents, thus reducing production risk, for situations when the buyer cancels or changes his/ her order.


Moreover, they felt that it gives them the ability not only to structure the delivery schedule according to their interests, but also in obtaining pre-export finance to finance the production or the purchase of the goods.


Perhaps the single-most advantage as a seller or exporter in using L/C as a payment mode is that the buyer cannot refuse to pay due to any complaints about the goods and the buyer has to raise his/ her complaint or claim separately from the Letter of Credit. This, I think, gives the exporter a significant advantage in resolving such issues related to delayed payments.


However, many importers whom I have met were unanimous on the benefits of L/Cs because the bank acts on behalf of the buyer who is the holder of Letter of Credit by ensuring that the seller or the exporter will not be paid until the bank receives a confirmation that the goods have been shipped.


Having said that, several exporters and importers have been successful too without Letter of Credits. Cash in advance, documentary collection or draft, open account, and other payment mechanisms are also popular amongst the exim community.


Since I always argue for L/Cs as the safest and more secure payment mode, I would definitely like readers to share their views on: ‘Do you really think L/C is the safest and secure means of transaction?’ or ‘Which payment method do you mostly use?’ or ‘What according to you is the safest means of export-import payment method?’





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Q2.         “International distribution decisions are critical decisions”. Substantiate.

Q3.         Discuss the EPRG orientations and give the differences between international and domestic marketing.

Q4.         How is international marketing segmentation helpful in making strategies?What are the bases of the segmentation?

Answer : International market segmentation


About forty years ago, segmentation was viewed as an imperfection in market structure rather than as a more precise adjustment to consumer or user requirements. From this time, the benefits of adapting marketing resources to the heterogeneous needs and wants of customers is recognized. Nowadays, in the context of globalization, the focus has shifted towards looking for similarities and the search for ‘global segments’. As a result of these changes, Hassan and Katsanis defined ‘(global) market segmentation’ as follows:


“Global market segmentation is the process of identifying specific segments, whether they be country groups or individual customer groups, of potential customers with homogeneous attributes who are likely to exhibit similar behaviour” (Hassan & Katsanis, 1991).


This trend of globalizing economies raised a new question: how should a company segment a global/international market? Segmentation of a international market implied the addition of another, country specific, dimension.


In domestic markets customer characteristics such as age, sex, social class, etc. and attitudes toward a certain product or brand are often used as bases for segmentation. In international markets an extra dimension has to be considered, i.e. country characteristics. For instance, every country has its own specific social, cultural, economic, technological, political, legal and environmental characteristics affecting marketing strategies and customer/market responses.


The different perceptions and approaches of multinational companies determined their segmentation approach. Besides the shift from looking for differences towards the focus on similarities mentioned above, one can observe the influence of the internationalizing environment and the evolvement of global strategies.


Frank, Massy and Wind proposed three approaches to international market segmentation (Frank, Massy & Wind, 1972):

–   Approaching each country as a individual segment;

–   Approaching groups of countries with similar characteristics as individual segments;

–   Approaching the entire world as one segment.


In their approaches they do not take into account that there may be groups of customers in different countries that are alike and can form one cross-national segment. However, this is recognized by Hassan and Katsanis who identified three main segmentation methods (Hassan & Katsanis, 1991):


–    The ‘country cluster’ segmentation strategy;

–    The ‘cross-national’ segmentation strategy;

–    The ‘world segment’ strategy.


In the remaining part of this paragraph the following segmentation strategies will be discussed:


1.  ‘Local’ segmentation strategy;

2.  ‘Country cluster’ segmentation strategy;

3.  ‘Cross-national’ segmentation strategy;

4.  ‘World segment’ strategy.


The ‘local’ segmentation strategy

When the ‘local’ segmentation strategy is used, every single country is viewed as a separate market with its own unique characteristics, making adaption of marketing necessary. No relation with other countries/markets is made, neither in the field of segmentation, nor in the organizational field of responsibilities and strategy.


At first sight, this segmentation strategy leaves little room for standardization of the international marketing strategy.


The ‘country cluster’ segmentation strategy

Sethi & Holton (1973) propose a method for clustering countries. They mention that as companies grow, the ‘every country is different approach’ might turn out to be less usable and a grouping device might increasingly necessary. They recognize the possibilities standardization offers as part of a global strategy.


‘The Middle East’ or the developed countries’ are often used by managers to address specific groups of countries. Sethi and Holton, however, question the way country groups are identified. They propose a two-step method. In the first step variables that could describe countries are grouped in clusters which must have ‘within group’ similarities and ‘between group’ differences. The second step is comparing and grouping the countries based on variable cluster score, that is clustering the countries based on the variables distinguished in step one.


Frank, Massy and Wind (1972) proposed a slight modification towards a ‘Cross national’ segmentation strategy. In two steps they identify segments of both countries and customers.

First, individual or groups of countries are identified. This composition of so-called ‘macro-segments’ enables an initial screening and selection of countries, which on the basis of national market characteristics, legal and political constraints, provide potentially attractive market opportunities. The analysis of buying patterns is limited to only these macro-segments which passed this initial screening. Then within each macro-segment the market can be subdivided based on customer characteristics such as social classes, age, sex, etc. The appropriate bases for segmentation may be the same across all macro-segments, but may also differ from macro-segment to macro-segment. In the first case segments are similar and thereby form an adaption to the international environment and homogenization of customers preferences.


It should be noted that defining segments in this way ignores the differences that exist between countries in terms of possible micro-segments. The next approach pays attention to this problem.


The ‘cross-national’ segmentation strategy


Jain (Jain, 1984) defined market segmentation as a technique of dividing different countries into homogeneous groups, hereby focusing on country segmentation.

Jain also provided a number of steps that should be followed in order to gain insight into the segmentation criteria suitable for classifying world markets:


1.  Develop a market taxonomy for classifying the world market.

2.  Segment all countries into homogeneous groups having common characteristics with      reference to the dimensions of the market taxonomy.

3.  Determine theoretically the most efficient method of serving each group.

4.  Choose the group where the marketer’s own perspective (its product/service, strengths, etc.) is in line with the requirements of the group.

5.  Adjust this ideal classification to the constraints of the real world (f.e. legal and political      restrictions).


This country approach incorrectly assumes that countries are indivisible. According to Jain, this imperfection can be solved by making use of so-called ‘inter-country’ segments. These segments are formed by groups of customers who are alike and can be identified in several different countries. These similar segments in different countries may be combined to form one viable inter-market/country segment.


To identify these inter-country segments, the following three steps can be used:


1.  Select countries.

2.  Select in-country segments.

3.  Select inter-country segments.


The first two steps are discussed earlier, but the third step, search for comparable in-country segments across boundaries which can form one inter-country segment, is new.


Note that Jain’s approach is still very country oriented. The following approach of Kreutzer is more focused on customer similarities across boundaries.


In 1988, Kreutzer was one of the first to argue that segmentation should be incorporated in the process of standardizing marketing programs and marketing processes (Kreutzer, 1988). He argues that before it is possible to determine a company’s or product’s standardization potential, a standardization-oriented segmentation has to be accomplished. This segmentation centres on the tracking down of the target group to be handled by standardized marketing. Segmentation has to answer two important questions:


1.  Which countries, already handled and/or potentially interested, show the conditions for   global marketing (standardization)?

2.  Of these, are there, trans-nationally, customers who are comparably structured with respect to their expectations of consumption and use and/or habits?


In terms of Kreutzer, this means starting with country segmentation, followed by the stage of customer segmentation. Trans-nationally homogeneous target groups are formed and handled trans-nationally with the same marketing concept. Kreutzer noted that trans-national does not necessarily mean global, but rather a large regional unit, for example Europe.


Now the focus is completely on identifying similarities in order to gain from standardization and a global marketing strategy. However, adaption to present differences should not totally be forgotten. Because, although a global market exists, a company, in order to survive global competition, needs to target its products at specific segments within different countries.


The ‘world segment’ strategy

It was Levitt who basically initiated the ‘world segment’ strategy (Levitt, 1983). The idea that customers were becoming more and more homogeneous across the globe, made him define one world segment, consisting of customers wanting products and services of low price and high quality. Levitt assumed that differences in perceived preferences for specific product or service features were not of influence on the customer’s buying behaviour when a standardized high quality/low priced product is offered.


In this view we can recognize the one extreme of the globalization-localization continuum, i.e. a completely standardized, global marketing strategy.



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Q5.         What are the factors that affect the pricing strategy of an international firm? What different pricing strategies can the firms adopt?


6.            What are star export houses? Mention the various special strategic packages for status holders.



MBA in Marketing Management — Semester 4

MK0018: “International Marketing”

(4 credits)

(Book ID: B1199)



Marks 60

Note: Each Question carries 10 marks


Q1.         Discuss briefly the steps involved in processing of an export order.

Answer :   Golden Rule: In order to be successful in exporting one must fully research its markets. No one should ever try to tackle every market at once. Many enthusiastic persons bitten by the export bug, fail because they bite off more than they can chew. Overseas design and product requirements must be carefully considered.


Always sell as close to the market as possible. The fewer intermediaries one has the better, because every intermediary needs some percentage for his share in his business, which means less profit for the exporter and higher prices for the customer. All goods for export must be efficiently produced. They must be produced with due regard to the needs of export markets. It is no use trying to sell windows which open outwards in a country where, traditionally, windows open inwards.

Sell Experience: If a person cannot easily export his goods, may be he can sell his experience. Alternatively, he can concentrate on supplying goods and materials to exporters’ who already have established an export trade. He can concentrate on making what are termed ‘own brand’ products, much demanded by buyers in overseas markets which have the manufacturing know-how or facilities.


Selling in Export: In today’s competitive world, everyone has to be sold. The customer always has a choice of suppliers. Selling is an honorable profession, and you have to be an expert salesman.


On-Time Deliveries: Late deliveries are not always an exporters fault. Dock strikes, go-slows, etc. occur almost everywhere in the world. If one enters into export for the first time, he must ensure of fast and efficient delivery of the promised consignment.


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Communication: Communication internal and external must be comprehensive and immediate. Good communication is vital in export. When you are in doubt, pick up the phone or email for immediate clarification.


Testing Product: The risk of failure in export markets can be minimized by intelligent use of research. Before committing to a large-scale operation overseas, try out on a small scale. Use the a sample test, and any mistakes can then be corrected without much harm having been done. While the test campaign may appear to cost more initially, remember that some of the cost will be repaid by sales, so that test marketing often turns out to be cheaper.


Approach: If possible some indication of the attitudes towards the product should be established, like any sales operation. Even if the product is successful, to obtain reactions from the customer.


  • Preliminaries for Starting Export Business
  • Setting up an appropriate business organization.
  • Choosing appropriate mode of operations
  • Naming the Business
  • Selecting the company
  • Making effective business correspondence
  • Selecting the markets
  • Selecting prospective buyers
  • Selecting channels of distribution
  • Negotiating with prospective buyers
  • Processing an export order
  • Entering into export contract
  • Export pricing and costing
  • Understanding risks in international trade
  • Setting up an appropriate business organization


The first and the foremost question you as a prospective exporter has to decide is about the kind of business organisation needed for the purpose. You have to take a crucial decision as to whether a business will be run as a sole proprietary concern or a partnership firm or a company. The proper selection of organisation will depend upon


  • Your ability to raise finance
  • Your capacity to bear the risk
  • Your desire to exercise control over the business
  • Nature of regulatory framework applicable to you

If the size of the business is small, it would be advantageous to form a sole proprietary business organisation. It can be set up easily without much expenses and legal formalities. It is subject to only a few governmental regulations. However, the biggest disadvantage of #138;sole proprietary business is limited liability to raise funds which restricts its growth. Besides, the owner has unlimited personal liability. In order to avoid this disadvantage, it is advisable to form a partnership firm. The partnership firm can also be set up with ease and economy. Business can take benefit of the varied experiences and expertise of the partners. The liability of the partner though joint and several, is practically distributed amongst the various partners, despite the fact that the personal liability of the partner is unlimited. The major disadvantage of partnership form of business organisation is that conflict amongst the partners is a potential threat to the business. It will not be out of place to mention here that partnership firms are governed by the Indian Partnership Act,1932 and, therefore they should be form within the parameters laid down by the Act.


Exporters Manual and Documentation


Company is another form of business organisation,which has the advantage of distinct legal identity and limited liability to the shareholders. It can be a private limited company or a public limited company. A private limited company can be formed by just two persons subscribing to its share capital. However, the number of its shareholders cannot exceed fifty, public cannot be invited to subscribe to its capital and the member’s right to transfer shares is restricted. On the other hand, a public limited company has a minimum of seven members. There is no limit to maximum number of its members. It can invite the public to subscribe to its capital and permit the transfer of shares. A public limited company offers enormous potential for growth because of access to substantial funds. The liquidity of investment is high because of easiness of transfer of shares. However, its formation can be recommended only when the size of the business is large. For small business, a sole proprietary concern or a partnership firm will be the most suitable form of business organisation.In case it is decided to incorporate a private limited company, the same is to be registered with the Registrar of Companies.


For details as to be procedures for registration with the registrar of Companies, kindly refer to Nabhi’s FORMATION AND MANAGEMENT OF A PRIVATE COMPANY ALONG WITH PRACTICAL PROCEDURES.



Choosing appropriate mode of operation

You can chose any of the following modes of operations:


Merchant Exporter i.e. buying the goods from the market or from a manufacturer and then selling them to foreign buyers.


Manufacturer Exporter i.e. manufacturing the goods yourself for export Sales Agent/Commission Agent/Indenting Agent i.e. acting on behalf of the seller and charging commission Buying Agent i.e. acting on behalf of the buyer and charging commission



Naming the Business

Whatever form of business organisation has been finally decided, naming the business is an essential task for every exporter. The name and style should be attractive, short and meaningful. Simple and attractive name indicating the nature of business is ideal. The office should be located preferably in a commercial complex, in clean and workable surroundings. The letter head should be simple and superb providing information concerning H.O., branches, cable address, telephone number, fax number, banker’s name and address etc. Pick up a beautiful trade name and logo which reinforces your organisation’s name and image.


Open a current account in the name of the organisation in whose name you intend to export. It is advisable to open the account with a bank which is authorised to deal in Foreign Exchange.



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Selecting the Company

Carefully select the product to be exported. For proper selection of product, study the trends of export of different items from India. The selected product must be in demand in the countries where it is to be exported. It should be possible to procure or manufacture the selected product at most economic cost so that it can be competitively priced. It should also be available in sufficient quantity and it should be possible to supply it repeatedly and regularly. Besides, while selecting the product, it has to be ensured that you are conversant with government policy and regulations in respect of product selected for export. You should also know import regulations in respect of such commodities by the importing countries. It would be preferable if you have previous knowledge and experience of commodities selected by you for export. A non-technical person should avoid in dealing in high tech products.


Making effective Business Correspondence

You should recognise the importance of business correspondence as it is an introduction with the buyer in proxy which may clinch his response according to the impression created by the correspondence. For creating a very favorable and excellent impression, you must use a beautiful letter head on airmail paper and a good envelope, nicely printed, giving fully particulars of your firm’s name, telephone, telex and fax number etc. Your language should be polite, soft, brief and to the point, giving a very clear picture of the subject to be put before the customer. Letters should be typed/ computer typed set, preferably in the language of the importing country. Also make sure that the full and correct address is written and the envelope is duly stamped. It should also be borne in mind that the aim of your business correspondence is not only to clinch the buyer’s order but also to obtain the information on the following:


The specifications of the products already in use in the importing country. Whether your product meets the above specifications. If not, Whether your specifications offer any distinct advantages in terms of prices, quality, after-sales service, etc. The import policy prevailing in the buyer’s country (e.g. whether there is any import licensing, any restrictions on remittances, any pre-qualification for product/supplier, etc.)


The trade practices in the buyers’ country with special reference to your product, information like whether importers import and distribute the product/high sea sales, whether agent is required to book orders from actual users etc. In case your item requires after sales service, the manner in which it can be offered. The prices at which your product sells in the retail/wholesale market, the duty structure and any other cost element to arrive at the landed cost. Information on the margins at which the product is sold. This information will help you in evolving a pricing strategy.


Study of various market segments viz. Importers, Supermarkets, Government Suppliers, Institutional Sales, Tenders, Suppliers, etc.


The various factors that rule the market viz. Quality, Price, Delivery, Brand Name, Credit Terms, etc. Role of advertising and publicity and reference to the product and the country.





Q2.         Discuss briefly the various techniques to assess country risk. Give examples to illustrate your answer.




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Q3.         Discuss fundamental methods of exchange rate forecasting. What are the problems in forecasting exchange rates?





Q4.         What is the role and elements of culture?


Q5.         Write a short note on International Advertising.How is it important for international marketing?




Q6.         Describe the various modes of entries in international market.


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