Question Paper of MS-06 Marketing For Managers Dec-2002

SECTION A

Q.1(a) Discuss the scope and relevance of the concept of market segmentation. Will the scope change with the opening of Indian economy? Illustrate- how firms would be benefited in marketing their products and services by segmentation.
(b) Briefly discuss the concept of positioning. What is the positioning of
(i) Santro Car
(ii) Indian Airlines
(iii) Pepsi Cola

Q. 2(a) Discuss the major considerations involved in designing the marketing organisation. Discuss by taking the example of a major importer of medical equipment, with all India operations.
(b) How is a “Product-Management Organisation” different from the Market-Centred Organisation?

Q. 3(a) Enumerate and discuss the major packaging decisions appropriate for the following:
(i) FMCG company
(ii) Consumer durable company
(b) Discuss the marketing strategies that may be used at the introductory and maturity stages of the product life cycle.

Q.4 Write notes on any three of the following:
(a) Institutional Buyer Behaviour
(b) Application of Marketing Research in decision making
© Relevance of studying post purchase behaviours
(d) Branding as a tool for market development
(e) Determinants of pricing

SECTION B

Q.5 Study the case given below and answer the questions given at the end. The Indian moulded-luggage market estimated at around Rs. 8,500 million per annum is largely dominated by the small and unorganised-sector units. In terms of volume, only about 15-18 per cent and in terms of value, 40-45 percent luggage sold every year is accounted for by the organised sector, where Blowplast Limited’s VIP brand is the market leader. After acquiring the Universal Luggage Company (Aristocrat brand) in 1988, Aristocrat and VIP together now account for a hefty 85 per cent share of the organised market, which was till the early 1990s growing at the low rate of 2-3 percent per annum. The growth rate refused to pick up inspite of VIP’S persistent efforts to expand the market by adding several new models to their range at regular intervals. Way back in 1981, VIP introduced a soft-luggage range, sub-branded as ‘Skybag’. It was aimed at the up market frequent traveller. But the product failed to take off because the soft-luggage concept was alien to the Indian consumer. The brand was also let down by imitators. For every piece of genuine Skybag sold, there were 40 fake pieces being sold by the unorganised sector. In 1986, the company launched another premium sub-brand ‘Odyssey’ made with a new ‘vacuum foaming’ technology, which gives a pseudo leather finish to the product. In spite of its steep price the brand was well received by the market. However, the success of1 one or two models was just not enough to give the required momentum for growth to a company of VIP’s size and stature. In the meantime, Aristocrat launched a frameless suitcase. The innovation reduced assembly time, and lowered the product weight and material cost resulting in significant reduction in the production cost. It enabled them to sell a 20 inch suitcase for about Rs. 200. Not to be left behind, VIP also launched its own frameless economy model ‘International Tourister’ aimed at the lower end of the market. But somehow, an up market brand name and the urban appeal of its ads did not match the middle-class consumer profile. The promotional efforts resulted only in further alienating the low-end buyer. The product fell flat and had to be withdrawn.

In 1988, the price war between VIP and Aristocrat ended rather dramatically with the buy-out of Universal Luggage by Blowplast. This was the most significant development on the market place, resulting in Blowplast’s virtual monopoly in the moulded-luggage market.

In 1989, another economy range named ‘Alfa’ was launched at the lower end of the market. It was even cheaper than the International Tourister brand and was basically aimed at competing with the unorganised sector products as a ‘loss leader’ brand of the firm. Alfa, as expected by the firm, brought large volumes to the company, and in 1994, contributed about half of VIP’s Rs. 2,700 million turnover; however, in terms of profits its contribution was very low. Second, the brand name and the features were as usual readily copied by the unorganised sector, resulting in several look-alike Alfas. Selling the Alfa was not a problem for VIP; the real problem was to increase the demand for those models which could bring a higher revenue to the firm.

In 1993, the company reworked their entire marketing strategy. It was at this stage that the firm started looking at the premium segment for growth. The Odyssey range, which was growing at the rate of 10-15 percent per annum as against. Against 2-3 per cent growth rate of the regular and the economy range, showed the way. A detailed study of each premium mode! was conducted to chalk out the strategy. In the global market soft luggage is the largest selling variety, but in India it failed to take off, probably due to improper positioning and inadequate promotion. The firm realized this mistake and started promoting it vigorously.

The revised focus ad greater stress on premium range yielded good results. The sale of Skybag range increased by 25 per cent in 1994. Under the Odyssey range, new models named ‘Lumina’ suitcases and ‘ZX’ briefcases were launched in March 1994. These sub-brands are reported to be growing now at the rate of 30 percent per annum.

Questions

1. Comment on the loss-leader pricing strategy followed by VIP in case of Alfa. Was the strategy in conformity with the company’s objectives?
2. Did the company accomplish the marketing objectives by adopting premium pricing strategy for “Odyssey"?