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IMPACT OF INFORMATION
TECHNOLOGY ON MARKETING DECISIONS
Lesson - 1
On Line Marketing
INTRODUCTION:
On-line marketing is otherwise known as web marketing. Considering the number of people who are
entering the domain of Internet worldwide, it is important that companies embrace this marketing which
does not require physical facilities. Future is only going to be for the companies who will be doing more
business through the web than the real physical infrastructure. On-line marketing has been proven to be
the most cost effective investment in capturing targeted product enquiries and online sales, resulting in a
growth of the business. In fact many companies which were doing badly through physical infrastructure
have shown how effectively they can market the products through the web. This unit will delve into all the
issues in web or on-line marketing.
LEARNING OBJECTIVES:
When you finish this unit, you should be able to understand:
The need and scope of on-line marketing

The process of on-line marketing
The essential elements of on-line marketing
The examples of on-line marketing in the Indian context
On-line marketing:
On-line marketing is the one which allows products and brands to be displayed in the Internet space. As in
physical infrastructure, there is a need for websites to attract the user to return to the website and continue
the purchases. The success of a website is based on the interactivity, attractiveness and also on the
importance attached by the user in terms of keeping their privacy. The primary purpose of marketing an
online business is the promotion of a good or service. On-line marketing makes extensive use of the
available tools for getting web users to purchase a product or service from a website. In marketing an
online business one needs to use good online marketing activities. In marketing an online business one
needs to use good online marketing activities. A wise website owner places priority on one particular
activity. That is the creation of strong advertising copy. An excellent copy can make the person come again
and again to the website. It is to be remembered that most of the users are paying for their online services
in India which will make them see or use only resourceful sites.
Essentially, Internet marketing is using the Internet to communicate a company’s message about itself, its
products, or its services. Conduct research as to the nature (demographics, preferences, and needs) of
existing and potential customers and sell goods, services, or advertising space over the Internet.
file://C:\OldD\mba\Madras Univ\2nd Semester\Marketing Management\unit_v_ri... 10/25/2010

Difference between physical marketing and online marketing:
Let us first look at the difference between physical product and that of a digital or web product. With a
physical product people love things that they can actually hold in their hands. They get a feeling of real
value when they purchase a physical product. So its easier time, in some cases, of making a sale with a
physical product. Selling a physical product also will, in many cases, cut down on refunds. For most people,
it’s a real hassle to have to send back a product. So unless there is something really wrong with it, they’re
not going to take the time to do this. Certainly, there is more work involved with selling physical products,
such as packing and shipping. Because the cost of making a physical product is greater, you either have to
charge more for it or accept a smaller profit margin. This is another drawback to selling physical products.
With digital products, there is no shipping. Download is immediate and you can make a ton of sales in a
short period of time and literally do no physical work at all. Plus, many customers like the ability to get a
product right away instead of having to wait for it to come in the mail. Digital products are as easy as it is to
get them; it is just as easy to return them. The refund rates for digital products are much higher than for
physical products.
Components of internet marketing:
Components of Internet marketing (also referred to as online marketing) may include, a Web site,
consisting of text, images and possibly audio and video elements used to convey the company’s message,
to inform existing and potential customers of the features and benefits of the company’s products and/or
services. The Web site may or may not include the ability to capture leads on potential customers or
directly sell a product or service online. A Web site can be the offline equivalent of a brochure or a mail
order catalog and is a great way to establish your business identity. Search Engine Marketing (SEM), which
is marketing a Web site via search engines, either by improving the site’s natural (organic) ranking through
search engine optimization (SEO), buying pay-per-click (PPC) ads with search engines which are based on
selected keywords and then displayed on search engine results pages when those keywords are used in a
search, and/or on other Web sites whose content includes the keywords specified, pay-for-inclusion (PFI)
listings in Web site directories. PFI listings are similar to offline yellow page listings. Email marketing, which
is a method of distributing information about a product or service or for soliciting feedback from customers
about a product or service through Email. Email addresses of customers and prospective customers may
be collected or purchased. Various methods are used, such as the regular distribution of newsletters or
mass mailing of offers related to the company’s product or services.
Email marketing is essentially the online equivalent of direct mail marketing. Banner advertising, which is
the placement of ads on a web site for a fee. Offline this would be similar to traditional advertising in
newspapers or magazines. On-line promotion, including press release distribution, which involves placing a
newsworthy story about a company, its website, its people, and/or its products/services with on on-line wire
service, or blog (Web log) activity, which is the act of posting comments, expressing opinions or making
announcements in a discussion forum. Marketing can be accomplished in blogs either by hosting your own
blog or by posting comments and/or URLs in other blogs related to your product or service.
On-line advertising:

The successful promotion of a produce requires that, at a minimum, a positive message be received by
potential customers. And advertising is the main and most commonly used source of communication to
convey the message to the ultimate customers. On-line advertising is also known as Web advertising,
Internet advertising and e-advertising. Information technology has pervaded the advertising industry also. It
has become highly skilled and dynamic profession. With the escalating cost of producing advertising films
for about 30-60 seconds, computer graphics, and morphing are now the way out. In this context, no
advertiser can ignore the 100 million netizens for whom the advertisements could be the right target. As in
the diffusion of innovation cycle, now it is easier to target the innovators as they are none-other than the
netizens.
Hence, this webvertising is proving to be a lucrative affair. Floating URLs on the Internet are the sites for
advertising. On-line advertising worth nearly $1 billion in 1998 expected to be around $ 10 billion by 2008 is
growing much faster than any other conventional media. As Internet users are growing day by day; so are
Internet advertisers because they can easily, effectively and efficiently communicate their products or
services to targeted mass audience. Add to this the fact that Internet users are well educated with high
incomes, it is only logical to conclude that Internet surfers are a desired target for advertisers. On-line or
web advertising is growing very fast. The reasons are manifold. Advertisements can reach very large
number of potential buyers globally. There is a web superiority over other advertising medium. Web page
(advertisement) can be updated any time and changes or corrections are painless. On-line advertisement
works 24 hours a day, 7 days a week, 365 days a year. In on-line advertisement specific interest groups or
individuals can be targeted. On-line advertisement can effectively use the convergence of text, audio,
graphics, and animation. On-line advertisements are cheaper in comparison to traditional advertisement.
There is no printing costs, no postage costs etc.
Some of the advertisements that can be seen on the web are e-mail sponsorship advertising, newsletter
and E-zine advertising, flash ads, Interstitials & Superstitials, streaming audio/video, pop-up/pop -under
advertising, online banner advertising, sponsorship (web sites, e-mails, sweep stakes) and advertorial
(paid-for editorial) placements. Currently finance sector is most dominating sector in on-line advertising and
accounted about 40% of total online advertising in India. Some of the leading companies from this sector
are HDFC, Citibank, SBI, and UTI etc. FMCG goods have just started to come in led by companies like
Hindustan Lever, Procter and Gamble etc. FMCG accounted about 20% of total online advertisement
spending in India. Consumer durables companies are also coming and accounted 15% of total online
advertisement. Share of media sector is about 10% and rest comes from other. In India, most popular form
of online advertising is banner advertising. The reason, it is easy to create, place and use. E-mail
advertising follows it. Online advertising facilitates the advertiser to reach an absolutely pinpointed and
targeted audience. The Internet as a medium knows no demographic boundaries and gives the advertiser a
huge audience to tap and build brand image if not sell products. Internet’s interactive nature allows for
greater flexibility than traditional media in the type of information transmitted and the method of
transmission. On-line advertisement can facilitate purchase decision. It enhances customer company
relationship. On-line advertising expands the company’s market to global market. It is easy to create, and
place, it saves time, labor and money. There is no loss of quality even after a very long period of time.
Indian on-line marketing case studies:

Mosaic services is an young and upcoming on-line marketing company India, nurtured by a team of fresh
as well experienced team members. The company is setting commendable benchmarks for on-line
marketing in India. The on-line marketing company offers customized solutions to individual client’s
technical, marketing and business related problems. Mosaic services offer a wide range of services like
Web consultancy, Technical consultancy and Search Engine Optimization. This is an example for on-line
marketing agency in India. As for the on-line marketing companies, all those in tangible business have
entered the virtual business, thereby making use of online marketing. Let us look at some of the case
studies:
1. Korea’s LG group has set up a new company in India, ‘LG Commerz Now’ for venturing into e-
commerce-related activities in the country. Mr. Rupert Murdoch’s NewsCorp group is picking up a 10 per
cent stake in this ecommerce software foray by LG worldwide. The LGSI subsidiary has made an
investment of Rs. 45 crores. Initially, LG Soft invested around Rs. 3.6 crores (90 per cent) and Star E-buy
pump in around Rs. 40 lakhs (10 per cent) in the company’s paid-up capital of Rs. 4 crores. A total
investment of $185 millions planned for the entire LG Electronic business in India over the same period.
They launched the website called www.lgezbuy.com for their presence in the e-business world.
2. To increase its on-line presence, bookstore chain Landmark plans to tie up with various e-commerce
portals in the country to become their exclusive bookstore. Landmark currently has its on-line presence
only as part of the sify website and is hosted on the latter’s server. The company started its on-line
business about six years back. Under the new system, the payment gateway would still be of the e-
commerce portals and a revenue sharing system would be worked out.
3. Estimating the online lottery business to be between Rs 5,000 and Rs 6,000 crore, Playwin has entered
the Indian lottery business which is under the control of the government.
4. Considering the boom in the Indian aviation market, many online marketing companies have entered.
They are yatra.com, makemytrip.com, ezeego1.com etc., apart from ticketing being done by the airliners
themselves which have started to provide the e-ticketing initiatives.
Summary
On-line marketing is here to stay on account of the following aspects:
1. Power shift from sellers to buyers
2. Death of distance
3. Time compression
4. Knowledge management is key
5. Intellectual capital rules

Considering the fact that India is leading in the field of IT, it is only natural that the new generation of
customers belonging to the below 20 age group will enmasse utilize the benefits of online marketing.
Review Questions
1. In India, the on-line marketing has taken off after:
a. 1990
b. 1995
c. 1997
d. 2000
2. Indian companies are not interested in embracing on-line due to the touch and feel of physical marketing
- State whether true or false.
3. Which among the following is the first company in electronics to go on a massive drive for on-line
marketing?
e. Samsung
f. Sony
g. LG
h. Sanyo
4. cleartrip.com is an example of:
i. on-line travel agent
j. on-line airline
k. on-line ticketing agent
l. on-line brokerage
5. On-line advertisements are cheaper in comparison to traditional advertisement. Do you agree? Yes/No.
Have You Understood?

1. Visit one of the companies in the following industries and explain how on-line marketing is undertaken by
them:

a. Fast moving consumer goods
b. Slow moving consumer goods
c. Consumer durables
d. Services
e. Agricultural produces
2. Do you think that on-line marketing can substitute the physical marketing in years to come? Justify.
3. Universities can enter on-line marketing by setting up virtual universities -Comment on the marketing
strategies
4. Explain the provisions of legal aspects over the on-line marketing in India.
E-Commerce
INTRODUCTION:
E-Commerce is the use of technology to automate business transactions and work flows. In 1997-98,
experts predicted the e-commerce trade to be worth $200- 250 billion and next year it rose to $3 trillion of
volume transacted. The method of doing business in the e-commerce medium differs from traditional
commerce because it combines information technology and business processes. It is estimated that in
1999, 100 million shoppers would have spend $15 million in the cyber market place. This is only expected
to increase substantially paving way for managerial talent to hook on. The subject may have topics like
Electronic Data Interchange, barcodes, electronic mails, Internet, product data exchange and electronic
forms. The programming part of it is not going to be the job of managers as is widely speculated. Since
financial services, entertainment, travel and groceries going to have more presence through this mode and
the need for educated managerial pool in this sector are beckoning the need for this subject.
The scope of e-commerce in India

The elements of e-commerce
The e-commerce success stories
The electronic payment options
e-commerce:
E Business is the use of electronic means and platforms to conduct a company’s business.
E Marketing describes company efforts to inform buyers, communicate, promote and sell its products and

services over the internet. e commerce is that a company or site offers to transact or facilitate the selling of
products and services online. It is the subset of e-business focused on transactions.
e-business markets:
According to Marian Woods, the following is the classification of e-business markets:
E-Business Markets Source: Marian Wood (2001) with minor adaptation (p. 2) There are further
classifications of e-business. They are:
Pure Click Companies
Those that have launched a website with out any previous existence as a firm.
1. Most suitable for products and services when the shopper seeks greater ordering convenience and
lower cost etc. Ex: Books, Music, Stock trading Newsletters, Amazon.com
2. Less suitable for products that must be touched or examined in advance. But exceptions are also
there. Computers from Dell.com
Brick and click Companies:

Companies that have added an online site for information or e-commerce
1. Adding ‘E’ flavor to their existing traditional Marketing functions.
2. Facilitating the Marketing Mix elements
3. Caution about backlash from existing channel members.
Failure : Compaq computers
Success: Harley Davidson
E-business model:
E Business Model is a method by which the organization sustains itself in the long term using IT (Even
without Internet), which includes its value proposition for partners and customers as well as its revenue
streams.
1. Whether online or offline, the value proposition involves knowing what is important to the customer or
partner and delivering it better than other firms.
2. Value encompasses the customer’s perceptions of the product’s benefits, specifically its attributes,
brand name, and support services.
3. Subtracted from benefits are the costs involved in acquiring the product, such as monetary, time,
energy, and psychic.
Value = Benefits - Costs

According to Mohansawhney, Pure plays are businesses that began on the Internet, even if they
subsequently added a brick-and-mortar presence. Pure plays face significant challenges: They must
compete as new brands and take customers away from established brick-and-mortar businesses. One way
to change the rules is to invent a new e-business model, as Yahoo! and eBay did. E-business is the
continuous optimization of a firm’s business activities through digital technology. Firms usually combine
traditional business and e-business models. For example, Schwab combined its online and offline
brokerages in a unified system.
1. The challenge: customers expect a high degree of coordination between online and offline
operations.
2. The danger: the established corporate culture might squash e-commerce initiatives or slow them
down with the best of intentions.
3. The solution: Many businesses have spun off their e-commerce operations as wholly owned
subsidiaries or pure plays so they can compete without the weight of the parent business.
Elements of e-commerce:
Product:
Items sold in e-commerce:
Software
Books
Toys
Music
Travel
Video
Magazines
Electronics
Apparel
Flowers
Autos
Place:
It is primarily website
Some of the examples of websites are:
1 Cyber CD stores
www.Cdnow.com
www.ktel.com
2 Digitized products:

www.intraware.com
www.softwarebuyline.com
www.egghead.com
3 cyber flower stores
www.1-800-flowers.com
B2B marketing as mentioned earlier is the most prominent in the webspace. The benefits of having a
website are:
1. Eliminates paper and reduces administrative costs.
2. Expedites cycle time e.g. BHEL
3. Lowers search costs and time for buyers e.g. GE
4. Increases productivity of employees dealing with buying and/or selling
5. Reduces errors and improves quality of services.
6. Reduces inventory levels and costs e.g. Toyota
7. Increases production flexibility, permitting just-in-time delivery e.g. TVS
8. Facilitates mass customization e.g. Tata Timken
9. Increases opportunities for collaboration
Promotion:
People coming to a website need to be attracted. Higher the traffic to a website more will be acceptance
among the customers. There are many websites which quote the viewer number also. There are many
providers who give the list of number of people who have hooked on. One aspect of promotion is
personalization. The goal for any personalization model is to earn a user’s trust, and convince him/her in
the value of providing intimate details in order to better the experience. Some of the personalization done
by Amazon.com is:
Special Occasion Reminders

Customer defined gift-giving occasion
‘Purchase Circle Favorites’
Permission-enabled Community-based Profiling mechanism
A dynamic ‘best-seller list’
‘Holiday Wish Lists’
Personally selected products
Registry-like service to keep track of all purchases
Pricing:

Normally the pricing is supposed to be attractive. There are many provisions for the provider to offer
different slabs of prices according to the product and its class. However, the following strategies are quite
commonly used:
1. Everyday Low Pricing by on line retailers
2. Rs.0 or Rs.1 pricing by airliners
3. Psychological pricing ( Rs.999 by Rediff.com) etc..
Electronic payment options:
Electronic Data Exchange is exchange of electronic data between companies using precisely defined
transactions. Set of hardware, software, and standards that accommodate the EDI process. Electronic
exchange of specially formatted standard business documents such as orders, bills, and approval of credit,
shipping notices, and confirmation sent between business partners. It is primarily to transfer electronically
repetitive business transactions.
The process of EDI is that supplier’s proposal sent electronically to purchasing organization. Then an
electronic contract approved over the network. Supplier manufactures and packages goods, attaching
shipping data recorded on a bar code. Quantities shipped and prices entered in system and flowed to
invoicing program; invoices transmitted to purchasing organization. Manufacturer ships order. Shipment
notice EDI transaction then be sent. Purchasing organization receives packages, scans bar code, and
compares data to invoices actual items received. Payment approval transferred electronically. Finally the
bank transfers funds from purchaser to supplier’s account using electronic fund transfer (EFT). Electronic
Funds Transfer is designed to transfer a certain amount of money from one account to another. EFT is the
transferring of funds from one bank savings or current account to another account. This electronic transfer
process is also known by the following names: Funds Sweep, Direct Debit, Direct Credit, and Direct
Deposit, Automatic Checking, Automatic Payment, Ach Processing, etc.
The various benefits of EFT are:
EFT MEANS ON TIME PAYMENT - customer’s bank account is debited exactly on the due date.
EFT MEANS NO SLOW PAYMENTS - right on time.
EFT MEANS LESS PAPERWORK - No opening of envelopes, running to the bank, etc. - the funds
are deposited directly into your account.
EFT IMPROVES CASH FLOW - no more check is in the mail excuses - it’s in your account.
EFT IS SAFE - Payments can only be made on specified dates and for specified amounts and are
electronically tracked.
EFT IS CONVENIENT - Easier for both customer and merchant - like clockwork it is done every
month right on time.
Electronic payments can be made through:
Credit Card Payments (Secure Presentation)

Electronic Cash (Currency)
Electronic Cheques

E-cash is the digital equivalent of paper currency and coins, which enables secure and anonymous
purchase of low-priced items.
Indian e-commerce successes and failures:
Internet is a very powerful medium where if an idea is not sound, it cannot sustain momentum. That was
one of the reasons for the success and failure of a dot com. It may be noted that all those which started as
a search engine like Rediff.com, yahoo.com, google.com have succeeded since they were able to have
clear and sound idea. Ebay.com is successful because it was able to consolidate its position by
acquisitions in various national dot.coms and showed that they can be successful. Google is thriving and its
influence is felt across the globe. In five years, this start-up has forever changed the way millions of people
find information on the Internet. However, formidable rivals like Yahoo! and Microsoft have begun to close
in. Many of the Indian dot coms like naukri.com, makemytrip.com, lgezbuy.com, bharatmatrimonial.com,
shaadi.com etc.. have become successful primarily because of the type of business they were in. Some of
the stock brokers like motilal oswal, 5paisa, icicidirect etc have become a phenomenal success due to the
nature of the business they are in. Indian dotcom market has yet to see mature entrepreneurs who not only
have a sound business idea and the domain knowledge but also a competent team to translate these into a
sustainable business in a long run. Most dot.coms failed in India because Direct Credit, and Direct Deposit,
Automatic Checking, Automatic Payment, Ach Processing, etc.
The various benefits of EFT are:
EFT MEANS ON TIME PAYMENT - customer’s bank account is debited exactly on the due date.
EFT MEANS NO SLOW PAYMENTS - right on time.
EFT MEANS LESS PAPERWORK - No opening of envelopes, running to the bank, etc. - the funds
are deposited directly into your account.
EFT IMPROVES CASH FLOW - no more check is in the mail excuses - it’s in your account.
EFT IS SAFE - Payments can only be made on specified dates and for specified amounts and are
electronically tracked.
EFT IS CONVENIENT - Easier for both customer and merchant - like clockwork it is done every
month right on time.
Electronic payments can be made through:
Credit Card Payments (Secure Presentation)

Electronic Cash (Currency)
Electronic Cheques
E-cash is the digital equivalent of paper currency and coins, which enables secure and anonymous
purchase of low-priced items.
Indian e-commerce successes and failures:
Internet is a very powerful medium where if an idea is not sound, it cannot sustain momentum. That was
one of the reasons for the success and failure of a dot com. It may be noted that all those which started as
a search engine like Rediff.com, yahoo.com, google.com have succeeded since they were able to have
clear and sound idea. Ebay.com is successful because it was able to consolidate its position by

acquisitions in various national dot.coms and showed that they can be successful. Google is thriving and its
influence is felt across the globe. In five years, this start-up has forever changed the way millions of people
find information on the Internet. However, formidable rivals like Yahoo! and Microsoft have begun to close
in. Many of the Indian dot coms like naukri.com, makemytrip.com, lgezbuy.com, bharatmatrimonial.com,
shaadi.com etc.. have become successful primarily because of the type of business they were in. Some of
the stock brokers like motilal oswal, 5paisa, icicidirect etc have become a phenomenal success due to the
nature of the business they are in. Indian dotcom market has yet to see mature entrepreneurs who not
only have a sound business idea and the domain knowledge but also a competent team to translate these
into a sustainable business in a long run. Most dot.coms failed in India because 7. This is true for anything
to do with the internet or ecommerce. There is an overload of information out there, but you need to use
your common sense as well. It’s your business and sometimes you have to follow your intuition.
Summary
The concept of ECommerce first came about in the early 1970s with the development of ECommerce
applications such as the innovation of Electronic Funds Transfer (EFT). Electronic Funds Transfer allowed
funds to be sent electronically from one organisation to another. However, this was limited to large,
corporate businesses and financial institutions. Next in line came Electronic Data Interchange (EDI) which
allowed not only large, corporate businesses and financial institutions to send funds electronically, but also
allowed manufacturers, retailers, services and many other types of businesses to electronically transfer
routine documents. Many other ECommerce applications such as stock trading and travel reservation
systems evolved out of Electronic Data Interchange until finally the commercialisation of the Internet
brought about the introduction of Ecommerce. Business deals with the models and strategies of the
business itself. E-Commerce is a result of E-business, and deals with the technology mediated physical
transactions and exchanges between parties as well as electronically based intra- or inter-organisational
activites that facilitate such exchanges. One thing is clear that e-commerce is here to stay as world
becomes wired on a daily basis.
Review Questions
1. Amazon.com comes under the following model
(A) B2B (B) B2C
(C) C2C (D) C2B
2. E-Commerce is not suitable for
(A) Sale/Purchase of expensive jewellery and antiques.
(B) Sale/Purchase of mobile phones.
(C) Sale/Purchase of branded clothes.

(D) On line job searching
3. ‘Shopping Cart’ is a
(A) mechanism to select multiple items from online catalogue before purchasing
(B) Credit Card
(C) Debit Card
(D) Smart Card
4. State whether true or false. E-cash must have a monetary value. It must be backed by either cash, bank
authorized credit or bank certified cashier’s check.
5. EDI stands for
(A) Electronic Data Interchange
(B) Electronic Digital-Signal Interchange
(C) Electronic Digital Signature Interchange
(D) Electronic Data Information
Have You Understood

1. A new start-up company proposes to develop an electronic wallet, a device that can cryptographically
hold electronic money, data, credit card numbers etc. Such a device might, for example, be included in a
mobile phone. Explain the legal implications of such a device.
2. A company proposes to introduce a new e-mail service, one with a small postage charge for each
message. It is believed that by charging for each message sent the amount of spam will be reduced. The
response rate for spam is about 0.005%, that is about five in a hundred thousand messages elicit a positive
response. Explain how do you price such a email service.
3. Compare and contrast the email provided by gmail, indiatimes mail, sify mail and zapakmail.
4. In e commerce, it is found that as many as 40% of shopping carts are abandoned before the checkout
process is complete and the main reason for this is the length of time the process takes. How do you
overcome this?
Trends in Marketing
INTRODUCTION:

While we will learn to live with change - good or bad - innovation will not stop at any end. When companies
find ways to innovate, consumers will welcome the value addition they offer. The catch here is that the
company which adds the highest value to products will emerge as winners in this competitive arena. In the
subsequent years, consumers will see drastic changes that will change their lives forever. But despite all
changes, business will remain business. Products will never cease to add value. And that, will be the only
constant. Hence, changes are always accepted and companies have to respond to these changes that are
happening around. This will also alter their marketing strategy and fine tune the companies to face
challenges whether short term or long term. In this context, let us look into all those forces that are possibly
going to affect companies in this concluding unit.
The latest trends that is happening in marketing

The importance of marketing in organizations
The relevance of marketing in this IT era
The threats to marketing
Marketing in the 21st Century:

In the 21st century, marketing will be an integrated function which may be undertaken by a production or
operations manager. It will be a difficult task for a manager to leave the function as marketing will pervade
the entire organization and will be responsibility of every members of the organization. In this context it is
important that new trends in this field needs to be known.
Consumerism
Consumerism is concerned with broadening the rights of consumers. The concepts of social responsibility
and consumerism go hand-in-hand. If every organization practiced a high level of social responsibility the
consumer movement might never have begun. Consumerism is a struggle for power between buyers and
sellers; specifically, it is a social movement seeking to increase the rights and powers of buyers in relation
to sellers.
Seller’s rights and powers are presented in the following list:
To introduce any product in any size and style they wish into the marketplace, so long as it is not
hazardous to personal health or safety or if it is hazardous, to introduce it with the proper warnings
and controls.
To price the product at any level they wish, provided there is no discrimination among similar classes
of buyers.
To spend any amount of money they wish to promote the product, so long as the promotion is not
defined as unfair competition.
To formulate any message they wish about the product provided that it is misleading or dishonest in
content or execution.
To introduce any buying – incentive schemes they wish.
In contrast, here are buyers’ rights and power:
To refuse to buy a product that is offered to them

To except the product to be safe

To expect the product to essentially match how the seller represented it
To receive adequate information about the product
It is in the best interest of marketers to understand the level of consumer standards and the nature of
consumer perceptions, as well as what is required to foster realism and accuracy among consumers.
Cause – Related Marketing and Ethics
Cause-related marketing should not be confused with social marketing. A key difference is that a major
purpose of cause-related marketing is to help a business. It might be used to improve the image of the firm
or to increase market share. The technique involves associating a business with a cause. Social marketing,
on the other hand, is generally not associated with any company and issued solely to help society by
dealing with a social problem. Cause-related marketing has to be done correctly or it can hurt a company.
A firm may look like it is exploiting a charity. It is important for the firm to be transparent and honest about
what it is doing. There should also be a fit between the company and the cause.
Green marketing:
It is a known fact that marketing strategies of various companies across the globe have been influenced by
environmental issues. With the well publicised “Earth Day” activities in the United States of America in April
1990, the “Green Marketing” movement was born. An explosion of “environmental friendly”: products and
marketing programs appeared as company after company tried to capitalise on consumers’ increased
sensitivity to environmental issues. People hear and read daily about a growing list of environmental
problems – global warming and acid rain, depletion of the Ozone layer, air and water pollution, hazardous
waste disposal, the build up of solid wastes – and they are calling for solutions. The new environmentalism
has caused many consumers to rethink what products they buy and from whom. A number of business
house, noticed and responded to consumers’ environmental consciousness. Specific efforts have focussed
on using resources efficiently. The term green marketing came into prominence in the late 1980s and early
1990s. The American Marketing Association (AMA) held the first workshop on “Ecological Marketing” in
1975. The proceedings of this workshop resulted in one of the first books on green marketing entitled
“Ecological Marketing” Thus green marketing incorporates a broad range of activities, including product
modification, changes to the production process, packaging changes, as well as modifying advertising. Yet
defining green marketing is not a simple task. Indeed the terminology used in this area has varied, it
includes: Green Marketing, Environmental Marketing and Ecological Marketing. Green marketing offers
business bottom line incentives and top line growth possibilities. While modification of business or
production processes may involve start-up costs, it will save money in the long term. For example, the cost
of installing solar energy is an investment in future energy cost savings. Companies that develop new and
improved products and services with environmental impacts in mind give themselves access to new
markets, substantially increase profits and enjoy competitive advantages over those marketing non-
environmentally responsible alternatives.
In Japan, Honda & Toyota companies introduced respectively Insight and Prius hybrid cars that combine
traditional petrol powered engines with electronic motors. In India, Maruti company has launched eco-

friendly car in the popular small on segment, i.e. Euro II series confirming to emission forms laid down by
Govt. of India under Motor Vehicles Act. Xerox corporation now remanufactures its copy machines and
markets them as proven work horses under Eco-series and Green line. One of the important issues today
is compatibility with environment. The cosmetics companies have started using the packaging to target
environmentally concerned segments.
Shampoos and Hair conditioners are packed in bottles that are biodegradable. Fast food restaurants have
promoted recycled and recyclable packaging for many items. For example, Burger King and Mc Donald no
longer use Styrofoam cartons to pack their burgers in an effort to decrease wastage. Further Mc Donald
conserved 3200 tons of paper and cardboard by replacing sandwich containers with single layer flexible
sandwich wraps and eliminated 1100 tons of cardboard materials that would have been used for shipping
by switching to light drink cups. Sheraton Hotels opened its first environmentally smart hotel in U.S.A. All of
the hotels’ furniture was made of wood harvested from managed forests and all of carpets, draperies, paint
and wall paper were free of toxic chemicals. The entire hotel is designated no smoking, and a ventilation
system that ensures fresh air is circulated into all rooms. Even retailers are jumping into the green
bandwagon. Wal-Mart runs videos to educate customers and has set up recycling drop off bins into store
parking lots. It even opened eco friendly stores where rainwater is collected from parking lots, skylight
supplement fluorescent lighting adjusted by photo sensors and road sign is solar powered.
The three R s of Green Marketing:
Reduce
Reuse and Recycle.
Green marketing refers to the development and distribution of ecologically safe products. It refers to
products and packages that have one or more of the following characteristics:
(1) Are less toxic
(2) Are more durable
(3) Contain reusable materials
(4) Are made of recyclable material. In short, these are products considered “environmentally responsible”.
Research based studies on green marketing are very scanty. Whatever studies available are those carried
out in the West. Zinkhan & Carlson (1995) in a study titled ‘Green Advertising and the Reluctant Consumer’
analyses the advertiser’s dilemma from different perspectives of consumers having negative attitudes
about business and negative impressions of the advertising industry. The nature of green marketing is
clarified by Kilbourne (1995) in ‘Green Advertising: Salvation or Oxymoron’, demonstrating that the concept
is far more complex than what the existing marketing literature suggests.
Green is characterized in this study as a two dimensional concept with political and human dimensions.

Banerjee et al (1995) in a study on multi dimensional analysis of environmental advertising suggests that
environmental appeals are becoming increasingly common in advertising. The results of a content analysis
designed to uncover the underlying structure of green advertising are presented. A majority of advertisers
in the sample attempted to project a green corporate image rather than focusing on the environmental
benefits of their product or service. Most of the studies focus on the communication aspect of green
marketing and studies that cover the entire gamut of green marketing are woefully lacking and more such
studies conducted are in an Indian context.
Green marketing takes account of the wider relationship of the organization and its products to the
surroundings. It is about a more aware, open, targeted and sensitive approach that integrates the strategic
link between the company, the environment, and marketing, rather than being primarily concerned with
tactical communications opportunities. The prime emphasis is on, developing relationships and satisfying
separate stakeholders needs in an environmentally and socially responsible manner. The key stakeholders
are customers, investors, parent company, directors, employees, the community, legislators, pressure
groups, suppliers, and the media Green marketing differs from its societal and ecological predecessors in
it’s intertwining of ecological and social concerns, in the breadth of the ecological agenda that it tackles,
and in its potential application across all types and sectors of business.
Green marketing goes beyond societal marketing in four key ways:
It is an open-ended rather than a long-term perspective.

It focuses more strongly on the natural environment.
It treats the environment as something which has an intrinsic value over and above its usefulness to
society.
It focuses on global concerns rather than those of particular societies.
The key elements of green marketing can be summarized as under:
A balanced approach to the social, technological, economic and physical aspects of businesses and
societies.
An emphasis on long term sustainable qualitative development rather than short term unsustainable
quantitative growth.
A holistic approach aimed at reversing the reductionalist and fragmented approach of previous
business theory and practice.
A consideration of consumers as real human beings rather than as hypothetical ‘rational economic’
entities. An emphasis on meeting the genuine needs of consumers, rather than on stimulating
superficial desires.
A recognition that consumers and society have multiple and sometimes conflicting wants and needs.
A view of the company and all its activities as part of the ‘product’ that is consumed.
A recognition that the large scale long distance nature of the current economy is not sustainable, and
that in the future small and local will be beautiful.
Embracing the concept of eco-performance which incorporates the non-market outputs of the
company, with performance of the product during and after use and the environmental impact of
companies which contribute to the creation and marketing of the product elsewhere in the supply
chain.
The pursuit of added socio-environmental value as well as added techno economic value.
De-marketing:

There are many products which are on the depletion stages in the world market as well as in national
markets. De-marketing is aimed at limiting growth; practiced, for example, by governments to conserve
natural resources, or by companies unable to serve adequately the needs of all potential customers. It can
also be advertising, which urges the public to limit the consumption of a product, as at a time of shortage. It
could also be viewed as strategy for pruning the marginal markets and can be used to maintain customer
goodwill in times of shortages. Some examples of de-marketing in India are in the area of alcohol
consumption, tobacco consumption, police and control authorities need behaviour modifications, energy
depletions and use of alternate mechanisms of transportation.
De-marketing is necessary when there is a limited supply of a product and very heavy demand. In the past,
petrol and related products were demarketed and it is quite likely that electricity will have to be demarketed
if the supply situation does not improve soon. Water is becoming scarce in many regions and general de-
marketing will be necessary. This is the reason Municipal Corporations install water meters in homes.
De-marketing, the methods that have been used to reduce market demand for a particular item or product.
De-marketing usually involves the alterations of marketing mix variable to affect lesser demand when it is
bigger than an organization can or able to tackle the situation. Oftentimes, de-marketing methods involve
raising prices, reducing advertising and promotion expenditures, or deleting product benefits. Usually,
demarketing may be intended to decrease demand either for a shorter period or forever.
In selective de-marketing, a company may try to decrease demand in a specific or particular market such
as the one that is considered to have less profitable than others. In de-marketing, most or oftentimes
marketers are encountered with the social change that is, the shifting of social values and attitudes away
from the excessive consumption to the limited consumption. However, it is not that easy to obtain changes
in direction than it is to launch existing attitudes and behavior. Here, a marketer needs to understand the
concept of marketing problem that is, a problem to one organization is a chance or an opportunity to
another. De-marketing is considered to be an integral component of general marketing and needs to be
positioned from a very wider prospect instead of a limited point of view. Marketing management needs to
be more aware of the situations of marketing mix elements in terms of marketing environment shifts from
excess supply to over demand. In developing a substitution strategy, it is the marketers’s responsibilities to
ensure the possible alternatives through evaluation in terms of supply trends, price trends, technical
compatibility, product quality acceptability, time interval to achieve change, cost of change, and political
stability. However, the impact of substitutes on product quality needs to focus on special consideration.
Product demand has a connection with the level of quality and consumer expectations. Once marketing
strategies become more cautious, then de-marketing strategies enable or managed to be increased.
The passive de-marketing aims to persuade customers from using the product, but at the same time keeps
the product to be available in the market. Active de-marketing attempts to reduce overall demand. Finally,
complete de-marketing takes place especially when the marketing of a product slowly become diminish,
and the customers are informed carefully of not to use the product. Here, the marketers need to be aware
of the dilemma that they will probably have to face with.
Viral marketing:

Viral marketing is any marketing technique that induces web sites or users to pass on a marketing
message to other sites or users, creating a potentially exponential growth in the message’s visibility and
effect. Nowadays, it is practiced in such a way that there can be more emails that are very attractive which
immediately gets the attention of the receiver and he/she in turn passes this to many recipients who would
also do so to others there by creating a chain of action that will result in the message being passed to many
people which the company normally may not be able to reach. One such message from Microsoft to test
the genuiness of the platform being used is:
Dear Friends; please do not take this for a junk letter. Bill Gates sharing his fortune. If you ignore this, You
will repent later. Microsoft and AOL are now the largest Internet companies and in an effort to make sure
that Internet Explorer remains the most widely used program, Microsoft and AOL are running an e-mail
beta test.
When you forward this e-mail to friends, Microsoft can and will track it (If you are a Microsoft Windows
user)? for a two weeks time period.
For every person that you forward this e-mail to, Microsoft will pay you $245.00 For every person that you
sent it to that forwards it on, Microsoft will pay you $243.00 and for every third person that receives it, you
will be paid $241.00. Within two weeks, Microsoft will contact you for your address and then send you a
check. Regards Charles S Bailey General Manager Field Operations 1-800-842-2332 Ext. 1085 or 904-
1085 or RNX 292-1085
I thought this was a scam myself, but two weeks after receiving this e-mail and forwarding it on. Microsoft
contacted me for my address and within days, I receive a check for $24, 800.00. You need to respond
before the beta testing is over. If anyone can afford this, Bill gates is the man.
It’s all marketing expense to him. Please forward this to as many people as possible. You are bound to get
at least $10, 000.00. We’re not going to help them out with their e-mail beta test without getting a little
something for our time. My brother’s girlfriend got in on this a few months ago. When I went to visit him for
the Baylor /UT game, she showed me her check. It was for the sum of $4, 324.44 and was stamped ‘Paid
in full’ Like I said before, I know the law, and this is for real.
Intel and AOL are now discussing a merger which would make them the largest Internet company and in an
effort make sure that AOL remains the most widely used program, Intel and AOL are running an e-mail

beta test.
When you forward this e-mail to friends, Intel can and will track it ( if you are a Microsoft Windows user) for
a two week time period.
Try it; What have you got to lose!
Customer delight:
We are now in an era where the customer satisfaction merely alone may not work. According to
customerdelight.com. there are ten principles to follow for delighting the customers and making them come
back to your product or service. They are:
1. In advance, find out who your end customers are? And find out what they want and expect? In other
words “Anticipate their needs!
2. Understand what you have to offer them that matches their wants?
3. Provide the goods and/or services to the customers in a manner that is enjoyable. Overcompensate
your behavior.
4. Be sure that the customer perceives value from the experience?
5. During the process, make sure that the customer feels important and cared for? Don’t “hover over
them” and don’t ignore them as well.
6. Study their actions, facial expressions, tone of voice, hand gestures and analyze what your
interaction should be.
7. Ask them if they would like some more of this or another product or service.
8. When completed, ask them how they enjoyed the experience.
9. Analyze their answer and “brainstorm” how to make it better the next time. Everything can be made
better. Think hard!
10. Be ready for the next experience. Look sharp, clean up, plan ahead, organize everyone, lead the
activities (be visible) and ask others opinions.
Customer delight is the one which is driving organizations like Sony, intel, Philips, Nokia and others to get
more customers and also make sure that the customer once bought the brand becomes loyal customers
ever.
Guerrilla marketing:

Guerrilla marketing is a form of unconventional marketing intended to get maximum results from minimal
resources. It was coined by Jay Conrad Levinson; guerilla marketing is more about matching wits than
matching budgets. Guerilla marketing can be as different from traditional marketing as guerilla warfare is
from traditional warfare. Rather than marching their marketing dollars forth like infantry divisions, guerilla
marketers snipe away with their marketing resources for maximum impact. Some of the Indian examples of
guerrilla marketing are:
According to agency faqs, ‘Future Group’- Big Bazaar, Pantaloons, Future Bazaar, eZone which are all part
of this group are taking on the biggies like Shoppers Stop, Lifestyle, and Tata’s Westside. In order to do the
same, Future Group have come up with 3 advertising campaign as follows:
1. Keep West-aSide. Make a smart choice !
2. Shoppers! Stop. Make a smart choice !
3. Change your Lifestyle. Make a smart choice !
All the above three are major competitors to bigbazaar. Infact, they have used the outdoor hoardings to
drive the message.
Another effort was when Coca-cola tries do something, Pepsi keeps quiet and then later on attack them on
the very territory which they consider safe and competitive.
According to bized.com, the following can be used as guerrilla marketing strategies:
Stickers – can be put anywhere – especially in the target area
Pavement chalking
Bio-degradable tree postings
Product give-aways
Stenciling
Spray paint logos
Offering free demonstrations and talks
Offering free consultations
Finding a way of generating mystery and intrigue to involve consumers
Peer marketing – putting people of similar interests/ages/segments together to generate interest in
the product, e.g. one claim for downloading music is that it opens up the chance for ‘new’ music to be
discovered and later purchased
Using SMS text messaging
Marketing aimed at mobile phones:
Only companies advertising on cell phones were mobile phone companies, ringtone vendors, mobile game
makers and various other application developers for the growing mobile phone market. For the cell phone
to become the next great marketing medium, a platform comparably similar to radio, TV or the Internet, it
will need to attract large advertisers from outside the mobile industry. Car makers, movie studios and other
big companies have already started testing the waters of mobile marketing, and research firms estimate

mobile advertising could be a $1 billion-a-year market in just a few years. This trend is expected to come to
India soon as mobile phones will have 3G convergence.
Re-branding:
When a brand undergoes a change in identity, there is always a compelling business reason. For instance,
in the case of Hutch-Vodafone it is migration to a new brand. In the case of Bank of Baroda it was the need
to refresh brand image and create a more contemporary persona. What you retain and what you change
depends entirely on this business reason. For instance, the Hutch pug had excellent recall and was widely
appreciated so it has been retained to ease the transition. In the case of Bank of Baroda, the old identity
was not well recalled or liked so a dramatic transition was called for.
Medimix had an extremely distinctive but unappealing packaging that did not resonate with youth. That was
changed by R+K agency in 2006, not just as a cosmetic exercise but to communicate cues that the product
was better. This too has been a huge success in the market. Change requires intelligent, consistent
communication. As long as that is delivered, consumers will not worry. All branding must adopt a 360-
degree approach in all its communication. Every single touch point must be uniform and consistent and this
never changes. The message that there is now a new platform or look and feel usually lasts for 3-4 months
after the launch. There was a recent re-branding of Network 18, bringing all its different brands under a
common umbrella.
Summary
It is important that the marketing manager keeps track of the developments in the environment and also
updates the aspects of other functional areas. The future will see commodities being branded, more
emphasis on marketing communication with specific inputs from integrated marketing communication.
Marketers will start becoming Chief Executive officers like Mr. Vindi Banga. The future lies in the approach
being adopted by organizations being competitive and market savvy.
Review Questions
1. Which of the following was used by Pepsi to counter Coke?
A. Viral marketing
B. De-marketing
C. Re-marketing
D. Guerrilla marketing
2. What type of promotional objective is achieved by offering free samples of a new candy bar?
A. To make customer interested

B. To induce trial
C. To ask more feedback
D. To allow competition to get unnoticed
3. State whether True or False. Companies in India are spending huge sums just to make sure that they
are in the minds of the customers even though cost effective measures are available.
4. What is the form of making sure that the customer is intact with the company?
A. Customer satisfaction
B. Customer orientation
C. Customer delight
D. Customer retention
Have You Understood

1. “Marketers must try not to link their fortunes too much to the Indian team’s performance” –Do you
agree with the Indian cricket team and celebrity endorsements? Justify.
2. Is this statement acceptable as a marketing strategy using advertising- “Star TV channels ran a whole
day’s inventory with only Vodafone advertising. And the entire Rs 50-crore advertising campaign in all
major communication touch points revolved around one little pug that O&M and its memorable
advertising had created”.
3. Explain the relevance of finance for a marketing manager. Try to link finance function with marketing
function and see how it works.
4. Trace the developments in public sector marketing in India. Compare the same with that of private
sector.
CASE STUDIES
1. PROJECT SCORPIO:
The broad objectives of the Project Scorpio were:
* To create a new segment and retain market domination
* To differentiate offering (vis-a vis MNCs)- an excellent value proposition
* To optimise project costs.

Mantra of success
Customer focus from thought to finish Key buying factors were evolved through the Quality Function
Deployment process (QFD) Customer inputs were taken from first design to finished product, at every
stage IDAM and global alliances Just 120 Million Dollars and 120 persons across 19 cross functional teams
with people from design and development, testing and validation, marketing, manufacturing and supplier
development.
M&M tied up with the best in the world in their respective areas of the global auto industry. Fukui, Japan for
the Press shop. Fuji, Japan for the Dies. Korean company Wooshin for body shop. Fori Automation, USA
for the tester line for final assembly.
Durr Germany for the paint shop. Lear, USA for Seats and interiors. Visteon, USA for exteriors. Samlip,
Korea for suspension and BEHR, Germany for AC. M&M tied up with Renault for petrol engines.M&M
facilitated the development of these aggregates and played the role of an integrator.
Marketing Strategy: To create a market category
The Marketing Objectives set for Scorpio
First year of launch
*Scorpio to capture 22 per cent of the premium hard top market in F03 (9 months)
* Sell 12000 Scorpios in F03 (9 months)
*Mahindra unaided brand recall score to increase by 22 pts (defined in terms of Brand Track study scores)
* Scorpio brand recall score to achieve 50 points (in W4)
Within three years of launch
* Scorpio to capture 45 per cent of the premium hard top market
* Scorpio to sell 24,000 units in F04
* Mahindra to emerge as a true urban player
Value Proposition for Scorpio:
To capture the identified need -gap, the value proposition of Scorpio was defined as - ‘Car plus’
Rational benefits: World class vehicle, good looks, car like comfort, great value
Emotional benefits: Ownership, experience of thrill, excitement and power

Relational benefits: Young modern, premium, city companion / extension of lifestyle.
Brand Promise: ‘Luxury of a car. Thrill of an SUV’
This brand positioning addresses the key consumer insight and the product delivers the promise. The
position is also a unique proposition, which will help the brand have a distinct image in the consumers’
mind.
Pricing Strategy: to be a premium brand yet having universal appeal Distribution Strategy - Serve
less markets at a time but serve them well
Showroom infrastructure and experience
Phased launch
Shadow brand endorsement (Scorpio from Mahindra )
Advtg and promotions strategy – Car Plus ; Brand association with modern & urban lifestyle
Response - The strategy delivered
Achieves targeted market share
12000 Scorpios in first 9 months
High brand image and product image
Massive footfalls in showrooms
Excessive demand leading to wait period of 3 months
Scorpio Impact on M&M
As on June 19, 2002. Mahindra was losing market share and the share prices @ all time low at around Rs.
100. Created a new segment even in stagnating semi-urban and rural market scenario. The revenue for
M&M Auto Sector increased from Rs. 1827 Cr. in F 02 to Rs. 2511 Cr. in F 03, a growth of 37 per cent. The
profits before Interest and Tax (PBIT) too zoomed up from Rs. 102 Cr. in F 02 to Rs. 147 Cr. in F 03, an
increase of 43 per cent. The share prices have outperformed the Sensex and Share prices have zoomed
from Rs. 100 to Rs. 400 by December ‘03.
Questions:
1. Do you think Scorpio was successfully keeping in mind the above marketing strategy? Explain.
2. What marketing strategy you would adopt for a company like Mahindra in the case of Scorpio?

2. PRIVATE LABELS IN THE INDIAN RETAILING:
When Pepsico’s Frito-Lay decided to boycott Pantaloon’s Food Bazaar due to differences in terms of trade,
it was the latter’s private label which got a boost in shares. Today Tasty Treat, the ready-to-eat private label
of Food Bazaar, is leading with a 16 per cent share among the rest of the snack brands. Today Pantaloon
Retail has 80 products comprising 350 SKUs with five private labels. Since Pepsico’s rejection, it has
promptly approached local manufacturers such as Prakash Snacks in Indore and Pogo Chips in Kolkata to
manufacture its snacks brands. The power of private labels is being explored by most retailers today as
they do not want to be at the mercy of the big manufacturers. At the same time, they also realise that it’s
not going to be easy as it takes time and money to build private labels. Private labels are generally
introduced to get higher gross margins from branded products. Besides, they place the retailer at a
competitive advantage over the branded FMCG players who have historically been arrogant with the
retailers. It gives the retailers a platform to negotiate with such branded players. At the same time, in India,
there are not enough branded products to fill the retail shelves. In fact, branding in commodities is an
easier proposition compared to other categories where there may be relatively more brands to stock the
shop shelves.
There are others like Trent from the Tatas who have developed a business model purely on private labels,
especially in apparel. It all depends on the kind of price the customer is willing to pay. The question is
whether a customer is willing to pay the same amount for a private label compared to a well-known brand
in the same category. It all depends on the kind of sales and the kind of margins that the retailer can drive
in this business. The ‘store equity’ in the mind of the consumer decides the fate of the private label. It
denotes the trust that a consumer has in the store. In the apparel category, sourcing would play a key role
in differentiating the products from the rest of the retailers. Globus which has 90% private labels plans to
build its brand by roping in a new brand ambassador – Kareena Kapoor. In the consumer durables
category, it is still the known brands in the category which continue to drive the business for retailers. The
Tatas-promoted Infiniti Retail, with its Croma stores, is on the threshold of bringing in private labels with
caution. How strong supplier brands are in the minds of Indian consumers: Many supplier brands are
relatively new in India, so potentially have less awareness, and therefore, easier for private label products
to supplant supplier brand products. How effectively suppliers innovate: Supplier innovation is often what
allows them to stay ahead of retailer private label. Innovative suppliers can come out with new products
that retailers haven’t necessarily thought of. How consolidated Indian retail eventually becomes: The more
market share a retailer has, the greater the opportunity to create a strong private label offering, and the
greater the leverage a retailer can put on a supplier.
Questions:
1. Do you think private labels will succeed? Justify.
2. What in case of private labels succeeding, national brands have to come out with some new strategy.
Suggest.
3. ELECTROLUX:

Electrolux, the home appliances and consumer durables company, became synonymous with home
refrigeration through its tie-up with Kelvinator. While it used the Kelvinator logo of the penguin to advantage
and gained market share in refrigerators, it lost its way somewhere down the line. But the company hopes
to be back with a bang. Electrolux has a very specific worldwide approach that sets it apart. The company,
not only in India, but also across the globe, is extremely consumer-oriented. Very much led by consumer
insight. Everything the company does is related to how understanding the problems of consumers and how
it can bring to life demands of consumers. This always lead the company to thoughtful innovations, though
there are very often differences in products depending on different types of consumers in various countries.
But one commonality across the world is focus on energy and water conservation. Therefore, across the
globe, Electrolux products are made keeping in mind these factors. The company launched during 2007, a
four-door refrigerator. It is the first of its kind with unique features such as an extra-wide internal space (770
mm), deep door pockets with adjustable dividers, an integrated LCD display to modify operating and
storage conditions along with a stainless steel finish. The company will be importing them, not
manufacturing them in India. In fact, the company conducted extensive research across Asia on the
specific requirements of Asian consumers on food preservation. Many consumers felt there was a great
need to ensure that food retained its original nutritional values, taste, and most importantly, flavours do not
mix. So, in response to the needs of the consumers, Electrolux decided to launch a number of unique
innovations to our new frost-free range. The refrigerators will have features like dual deodorisers to control
odours, multi-air flow cooling system to keep moisture at optimum levels and a door alarm and frost-free
freezers. Besides, it also plan to get more of our global products into the Indian market. For now, the
consumers can choose the new refrigerators models in capacities ranging from 180-320 litres. Electrolux
grew through a very large number of acquisitions in the seventies and eighties. The company acquired a
number of brands.
But the global strategy has always been to focus and build the Electrolux brand. And buying those
companies gave it the resources to focus on our business strategies.
Questions:
1. So you think the product innovation brought out by Electrolux will help them?
2. Conduct a competitive analysis of refrigerator market and identify the attributes of customer
satisfaction.
4. INFRASTRUCTURE MARKETING:
The Tamil Nadu Industrial Development Corporation (TIDCO) started marketing space at the multi product
SEZ in Ennore from April. The Government has sanctioned funds for road and rail connectivity with the
State-level Export Promotion Committee chaired by the Chief Secretary sanctioning Rs 26 crore for the
works.
Expected to be the first of the multiproduct special economic zones to take off in the State, it is in the final
stages of approval. TIDCO plans to implement the road and rail work immediately with Rs 16 crore for the

road linking it to the Ennore Port and Rs 10 crore for a 3-km rail link. The SEZ is promoted by TIDCO,
which holds a 50 per cent stake. The State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and
the Ennore Port hold 25 per cent equity each. They have promoted Ennore SEZ Company Ltd for
developing the port-based multiproduct SEZ. The equity in the first phase is Rs 100 crore with the project
estimated to cost Rs 600 crore, including land, for development. Mahindra Acres Consulting Engineers Ltd
has submitted the draft master plan for the 3,000-acre SEZ.
The Ennore SEZ is among the ones that have been granted in-principle approval and the final notification is
expected at the next meeting of the Board of Approval. Officials pointed out that there are no land
acquisition hassles as the entire land meant for the SEZ is available with the Government agencies. The
paper work for transferring the land available with the Tamil Nadu Salt Corporation is in the final stages and
TIDCO has sought transfer of an additional 1,000 acres. The Ennore SEZ has generated keen interest
among manufacturers due to the large chunk of ready space available. Officials pointed out that to the
South and West of Chennai there was little space available and land prices were spiralling upwards. North
Chennai with the road, rail and port link offers an ideal location for industries. In addition to the road linking
the SEZ to the Ennore Port to the South, the port itself is provides a six- or eight-lane road connecting it to
the NH 5 leading to Kolkata. The SEZ will provide space for non-polluting industries such as engineering,
information technology, auto components, garments and leather products. It would have container freight
station facilities and free trade warehousing zone.
Questions:
1. With private infrastructure working very competitively, how do you expect TIDCO to make a mark?
2. Conduct a comprehensive evaluation of marketing strategies to be adopted by TIDCO.
5. CATHOLIC SYRIAN BANK:
In a study of SWOT analysis conducted at some branches of CSB, the following was found:
Strengths
Branches
Bank deliver products and services through a variety of channels ranging from extensive branch network,
extension counters, ATM centre, Internet banking and Mobile banking. There are 344 branches all over
India. Non-performing assets of the bank is reduced. i.e, amount of bad and doubtful debts reduced.
Supreme customer services. Employees are shareholders hence more commitment from employees.
Technology Implementation
Weaknesses
A major part of bank’s branch network is concentrated in southern India. More than 90% of the total
branches are located in Southern India. Any disruption, disturbance or breakdown in the economy of these

areas could adversely affect the result of bank’s business and operations. CSB does not have any
trademark for the name ‘The Catholic Syrian Bank” along with the logo and the tag line ‘support all the way’
associated with the Bank. The Bank may not be able to prohibit persons from using the said trademark to
their advantage and any unfavorable use of such trademark may adversely affect bank’s goodwill and
business. Human resource profile is weak. Cost involved in adopting technology. Reducing Spreads. CBS
is not started yet
Opportunities
The Bank may undertake mergers or acquisitions. The Bank may make acquisitions and investments to
expand customer base, acquire new service or product offerings or to enhance technical capabilities. The
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (The
Securitisation Act). With the enactment of The Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act 2002 (The Securitisation Act), banks have been empowered to attach
assets of the defaulters without intervention of lengthy and time consuming court procedures. This has
suddenly turned the tables in favour of banks. Till recently, debt recovery was one of the most hopeless
jobs in India due to archaic laws, which were totally tilted towards borrowers. Banks were in fact at the
mercy of borrowers’ willingness to pay. Thus, in spite of, the fact that most borrowing is against security,
the value of which is often higher than the loan, banks still could not do much except cajole and tempt
borrowers to pay up. Huge NPAs were burdening the entire banking sector. Due to the fear of increasing
NPAs, their willingness to lend and expand business was also adversely affected. It is expected that over
the next couple of years, banks will be able to significantly clean up their NPA mess due to the
Securitisation Act.
Threats
Delay in the rollout of bank’s core banking solutions. CSB is in the process of implementing Core Banking
Solution (“CBS”) and has already succeeded in bringing a substantial number of branches under the CBS
system. This technology initiative will allow to increase interconnectivity among branches and to provide
many of the products and service. In the event of any delay in the roll-out of the CBS across entire branch
network, it may be difficult to expand products and services. Competition. Regulatory System Cost.
Questions:
1. Do you think the SWOT gives an option for improvement by the bank? Justify.
2. Develop a SWOT for another bank and compare the same with CSB.
2. MARKS AND SPENCER
“There’s no need to ask the price - it’s a penny” was the proud claim of Marks and Spencer a hundred
years ago. From the start, it had developed a unique position in its market - an emphasis on low price, wide
range and good quality. Over time, the Marks and Spencer position has been steadily developed, along
with its profitability.

By the 1990s it looked unstoppable as a retailer, as it progressively expanded its product range from
clothing to food, furnishings and financial services. The world seemed to be waiting for M&S to exploit, and
despite disappointing starts in the US and Canada, it developed steadily throughout Europe and the Far
East. Then, just like any star who has been put on a pedestal, the media began to savage the company.
After a sudden drop in profits and sales during 1998, critics claimed that the company had lost its position
in the market place. It appeared to be like a super tanker, ploughing straight ahead with a management that
had become much less adaptable to change than its nimbler competitors. Many observers had commented
on the fact that the company did not have a marketing department until 1998. Marketing, at least in terms of
advertising the brand, had become so important to its competitors, but had never been high on Marks &
Spencer’s agenda. According to Media Monitoring Services, M&S’s total media spending between Dec
1997-Nov 1998 was just £4.7 million, almost a drop in the ocean compared to the spending of Sainsburys
(£42.1m); Tesco (£27.5m); and Woolworths (£21.5m). While other retailers had worked hard on building a
brand image, M&S has relied on the quality of its stock to do the talking. The argument was that everyone
knew what they were getting with M&S underwear or shirts - good quality at fair, but not cheap prices.
Similarly, with food, M&S’s offering was about quality rather than price. M&S believed its customers knew
what the brand stood for and advertising was much less important than ensuring that it could obtain the
right products at the right price.
In 1998, M&S looked to marketing to help turn around its performance, describing its new marketing
division for UK retail as “a significant development in our retailing philosophy”. Many suspected that M&S’s
conversion to marketing had been encouraged by the example set by the star of modern retailing, Tesco.
There are many similarities between the problems facing M&S and those which Tesco faced a decade
previously. In the early 1990s Tesco was a brand which looked like it had seen better days. The retailer’s
format was tried, its stores poorly laid out and the positioning of the company was still based on its
founder’s principle of ‘pile it high and sell it cheap’.
Its arch-rival, Sainsbury’s, was regarded as the more upmarket store for the middle classes, who shopped
for quality food in a more pleasant environment. Since then, Tesco had innovated with improved store
designs, petrol stations, coffee shops, a new fascia, the Tesco Clubcard and 24-hour store opening. The
list of Tesco’s marketing initiatives seemed to be unstoppable, in an attempt to keep one step ahead of its
competitors. In contrast, M&S had failed to keep pace with customer service. In many issues of retail
development, such as out-of-town shopping centres, sunday opening and loyalty cards, it had lagged
behind its main competitors. While it has stood still, the likes of Tesco and Sainsbury’s marched ahead until
there was no longer much that felt exceptional about the M&S shopping experience. Analysts argued that
M&S had failed to make its store layouts help shoppers bring clothing together to make outfits. In a typical
M&S store, for examples all jackets would be located in one area and all cardigans in another. Its
competitors had made much greater progress in bringing together coordinated sets of clothing which would
encourage shoppers to spend more. M&S has also been criticized for making things difficult for customers
by not accepting payment by major credit cards.
In response to its current troubles, the newly created marketing department of M&S launched its first
national campaign for retail towards the end of 1998. The ads followed an initial attempt at regional TV
advertising earlier in the year, which the company was said to be very pleased with. The newly appointed

Chief Executive claimed “It’s not that people don’t like what we’re selling, but that we haven’t got the
message across. There are an awful lot of people who love us for our knickers, but they don’t love our
home furnishings because they don’t even know they are there.” Many critics thought the problems were
much more deep-seated and blamed the store’s problems on the fact that its autumn fashions were seen
as dull and uninspiring, and out of touch with consumers’ preferences. Greater authority was pledged to the
marketing department when it came to new product design.
In response to its pledge to listen to what its customers wanted, new designers were brought in to try and
give the company’s ranges more sparkle. The company even thought the previously unthinkable by
proposing to stock manufacturers’ own branded products, instead of relying entirely on M&S’s own label
products. If customers wanted to obtain variety at M&S, the new thinking was that the company must adapt
and offer it. Another area identified for development was direct marketing of fashion products - an area
where the company had begun to lag behind its rivals who had developed interactive web sites. Serious
questions remained about the company. How quickly, could it change in response to its changed
environment? The company had not been known for speedy decision making, so probably a major
structural overhaul was essential before it could get down to the serious business of adapting to customers’
changing needs. Also, there was a great danger of changing the company’s position too far and too fast,
thereby alienating its traditional customers without gaining sufficient new ones.
As a warning of how not to change, M&S’s rival Laura Ashley had repositioned itself so radically from its
original format that it now failed to gain the support of any major group. M&S had itself tried to become
more fashion conscious during the mid-1980s with similar effect, and had to make a hasty retreat to its
traditional, more staid image.
QUESTIONS
1. What do you understand by positioning, and what tools are available to Marks and Spencer to give it
a positioning advantage?
2. There has been a lot of debate bout whether the existence of a marketing department can actually be
harmful to services companies because it absolves everybody else of marketing responsibilities.
What then, do you make of M&S’s decision to introduce a marketing department.
7. MOBILE PHONES AND MARKETING
One of the oldest principles of marketing is that sellers may sell features, but buyers essentially buy
benefits. This is a distinction sometimes lost on technology led organisations, and the service sector is no
exception. Recent experience of the UK’s largest telecommunications company, Vodafone Airtouch,
illustrates how crucial it is to see service offers in terms of the benefits they bring to customers. The
company was aware of extensive research which had found high levels of confusion among purchasers of
mobile phones, with a seemingly infinite permutation of features and prices. With four main networks to
choose from, dozens of tariffs and hundreds of handsets, it easy to see why buyers sought means of
simplifying their buying process. Throughout the 1990s, Vodafone had positioned its UK network as

superior technically to its competitors.
Advertising focused on high coverage rates and call reliability. Vodafone was the UK’s most popular mobile
phone operator, with almost eight million customers, including 4.2 million Pay as you Talk customers. It had
opened the UK’s first cellular network on 1 January 1985and was the market leader since 1986.
Vodafone’s networks in the UK - analogue and digital - between them carried over 100 million calls each
week. It took Vodafone more than 13 years to connect its first three million subscribers but only 12 months
to connect the next three million. Vodafone had the largest share of the UK cellular market with 33% and
had more international roaming agreements than any other UK mobile operator. It could offer its
subscribers roaming with 220 networks in 104 countries.
Despite all of the above, Vodafone was aware that although it was recognised as an extremely strong
business in the corporate marketplace, it was not so strong in the market for personal customers. Research
indicated that personal buyers bought Vodafone for essentially rational reasons rather than having any
emotional attachment to the brand. The success of the competing Orange network, which had developed a
very strong image, was a lesson to Vodafone that many people did not understand many of the product
features on offer, but instead identified with a brand whose values they could share. Vodafone recognized
that it needed to be perceived as adding value to a consumer’s lifestyle?. Given the increasing complexity
of product features, positioning on technical features was likely to make life more confusing for personal
customers. An alternative approach was needed which focused on image and lifestyle benefits. The
company decided to hire Identica – the consultancy that originally created the One 2 One brand – to
revamp its brand communications and advertising strategy in an effort to make Vodafone more appealing
to personal customers. Identica created a new ‘visual language’ for the Vodafone brand. Vodafone became
involved in the biggest ever TV, press, poster and radio advertising campaign in its 15 year history.
Employing a completely new style, the new advertising centred around the theme: ‘You are now truly
mobile. Let the world come to you’ and featured a new end-line - Vodafone YOU ARE HERE. The
campaign demonstrated how Vodafone’s products and services were designed to make life easier for its
customers.
The campaign, created by BMP DDB, was worth £20 million over two months alone and ran for the whole
year. Bringing meaning to the Vodafone brand and what it represented, a series of advertisements, through
a range of media, showed how Vodafone let the world come to its customers, enabling them to be truly
mobile. This portrayed how Vodafone always pioneered to make things more possible for its customers in a
wire-free world. In press and poster executions, Vodafone used arrows photographed in various real life
situations to depict its flagship services, eg., a weather vane was used to illustrate the Vodafone Interactive
weather service showing how weather information could be brought to customers through their mobile.
Each advertisement again had the Vodafone YOU ARE HERE end-line. The arrows indicated the
directional approach of Vodafone, letting the world come to the customer. Other executions illustrated
cinema listing information, sports updates, share price information, international roaming and the Vodafone
Personal Road watch 1800 service.
The change in emphasis by Vodafone seemed to be timely. The mobile phone industry was facing a new
wave of confusing product features hitting consumers, with the development of Wireless Access Protocol

(WAP) phones and the newer “Third generation” phones due to be launched in 2001. It seemed inevitable
that all of the competing networks would be offering confusing permutations of features with their service,
so Vodafone calculated that, given similar levels of reliability and sophistication by all networks, a
favourable image and lifestyle association would be an important source of competitive advantage. Given
the right image with existing technology, there would be a strong probability that consumers would migrate
with the brand to the new technology when it arrived.
QUESTIONS
1. Identify the principal benefits to customers which derive from a mobile phone. What differences are
likely to exist between market segments?
2. Is a strong brand identity on its own a source of sustainable competitive advantage? To what extent
must this be backed up by real product features?
3. Are goods different to services in the way that a distinction is made between features and benefits?
8. NANZ
When Nanz hit the market in 1993, it was considered a bold step into what was then a sunrise industry. In
1997, the chain had projected a turnover Rs100 crore by 1999. But by the appointed date, turnover was
less than a fifth of that level, and profits were nowhere visible on the horizon. Nanz appears to have got it
just right. It had the right stores in the right places - places where well-heeled customers would come to buy
things at a premium; places like South Extension and Greater Kailash, representing some of New Delhi
uppercrust areas. But Nanz is out for the count today, after struggling for nearly a decade with low business
volumes and turnover. Why did a chain with three high-profile backers fail in an industry that has seen a
boom in the last decade? The answer, in one sentence, is simple: getting a couple of rules of the game
right is not enough if you get the rest of them horribly wrong. With 20/20 hindsight one can say that the
Nanz management failed on almost every count. It failed to do its homework, a fact that affected both its
cost structures and its target market. It also failed in building effective partnerships with its vendors to
ensure an efficient supply chain. The problem began right from the groundwork. Nanz chose to start its
chain in Delhi, where its Indian promoters, the Nandas, are based. But this proved to be a bad decision
because of crippling real estate prices. In contrast, RPG group’s Foodworld opened in Bangalore,
Hyderabad, Chennai and Pune, where real estate prices are almost a quarter of those in Delhi. For one of
its first outlets in Delhi’s Greater Kailash locality, Nanz was paying as much as Rs 5 lakh for its 10,000
square feet space in 1993. Thus at Nanz, rent accounted for as much as 4 to 5 per cent of gross margins.
But real estate proved to be a bigger killer than Nanz had bargained for. The first Nanz outlet was opened
in May 1993 in South Extension in Delhi. Within a year, it was attracting 2,000 customers per day. But the
dream run came to a sudden halt when the Municipal Corporation of Delhi razed the building. Apparently,
Nanz had violated building by-laws by taking a lease on residential property. Kapoor claims that the Nanz
management was unaware of these irregularities; it had merely leased the property from parties who
owned the real estate. Then in 1998, a part of another Nanz outlet on Pusa Road was demolished because

the builder had taken up more are than what was permitted. Meanwhile, Nanz had another, bigger problem
on its hands - the lack of a market. When Nanz Food Products was formed in 1993, the supermarket
concept was in its infancy.
Though retail activity started in the mid-eighties, players like Nilgiri and Foodworld were restricted to the
south and west. The first Shoppers’ Stop outlet opened in Mumbai in 1991. Nanz was the first major food
and grocery retail store chain in northern India. It was, therefore, in direct competition with the kirana
shops, which have three distinctive advantages - proximity, service (they offer such convenience as home
delivery) and high margins due to low infrastructure costs. Nanz’s ambiance may have been in keeping
with the promoters’ aim of providing an international shopping experience, but it failed to lure middle class
and lower middle class consumers who would help generate volumes to partially neutralise the high
overheads. Nanz made sure it targets the low turnover customers by setting up ‘LoBill” stores - no-frills
stores of 1,000 to 2,000 square feet to increase its consumer base. These stores were opened in such
middle class “catchment areas” like Noida and Shahdara in 1994. This format was extended in December
1996 when Nanz established six sub-1,000 square food stores called “Kiryana from Nanz”. However, by
1997, two of these had shut shop.
The reason: Nanz Kiryana stores did not offer sufficient price differentials from the neighborhood shops.
Moreover, Nanz did little to strengthen customer relationships in a durable manner. Where, for instance,
Shoppers Stop has an energetic loyalty program, Nanz launched special promos and went in for some
aggressive advertising. But the problem was that these efforts were rarely consistent. Nanz would step up
its media presence during the fag end of one month and the beginning of another (from the 25th of one
month to the 10th of the next). Such measures only brought temporary relief.
Typically, retailers source directly from manufacturers instead of distributors. By cutting one link in the
chain, they are able to negotiate better bulk discounts. In the case of Nanz, they could not leverage the
same. The lax standards at the store level were a direct reflection of the management, which was
constantly in flux. In eight years, Nanz Food Products has had six CEOs.
Questions:
1. What were the problems as seen by the company and perceived by the customers?
2. Nanz was also trying to fight the general perception that a supermarket or branded store need not
necessarily charge higher prices. Do you think this is the right strategy? Explain.

MR 5

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New Page 3 Page 1 of 35

The need and scope of on-line marketing

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Difference between physical marketing and online marketing:

Components of internet marketing:

file://C:\OldD\mba\Madras Univ\2nd Semester\Marketing Management\unit_v_ri... 10/25/2010

Indian on-line marketing case studies:

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1. Power shift from sellers to buyers

4. Knowledge management is key

5. Intellectual capital rules

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4. cleartrip.com is an example of:

i. on-line travel agent

k. on-line ticketing agent

Have You Understood?

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a. Fast moving consumer goods

b. Slow moving consumer goods

The scope of e-commerce in India

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According to Marian Woods, the following is the classification of e-business markets:

Pure Click Companies

Brick and click Companies:

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Companies that have added an online site for information or e-commerce

1. Adding ‘E’ flavor to their existing traditional Marketing functions.

2. Facilitating the Marketing Mix elements

3. Caution about backlash from existing channel members.

Failure : Compaq computers

Success: Harley Davidson

Value = Benefits - Costs

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Items sold in e-commerce:

Some of the examples of websites are:

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3 cyber flower stores

1. Eliminates paper and reduces administrative costs.

2. Expedites cycle time e.g. BHEL

3. Lowers search costs and time for buyers e.g. GE

4. Increases productivity of employees dealing with buying and/or selling

5. Reduces errors and improves quality of services.

6. Reduces inventory levels and costs e.g. Toyota

7. Increases production flexibility, permitting just-in-time delivery e.g. TVS

8. Facilitates mass customization e.g. Tata Timken

9. Increases opportunities for collaboration

Special Occasion Reminders

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1. Everyday Low Pricing by on line retailers

2. Rs.0 or Rs.1 pricing by airliners

3. Psychological pricing ( Rs.999 by Rediff.com) etc..

Electronic payment options:

The various benefits of EFT are:

Electronic payments can be made through:

Credit Card Payments (Secure Presentation)

file://C:\OldD\mba\Madras Univ\2nd Semester\Marketing Management\unit_v_ri... 10/25/2010

Indian e-commerce successes and failures:

The various benefits of EFT are:

Electronic payments can be made through:

Credit Card Payments (Secure Presentation)

Indian e-commerce successes and failures:

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