Masters of Business Administration (MBA)

2nd Semester

Assignment on International Business

Submitted By: Submitted To:

Aakriti Paudel Mr. Suresh Bhandari Sir

CASE STUDY

(a) Read the following situation and answer the question that follows:

Dikshya Giri and her sister Rakshya are about to launch a business that specializes in kids
parties. Their target customer is upscale families who want to throw unique, memorable parties
to celebrate special occasions for their kids between the ages of 1 to 10. Dikshya has leased a
large building with 700 square meter land and have renovated it to include many features to
attract kids. They can offer simple birthday parties and special theme parties as programs and
other entertainment too.

They have invested NRs. 1.5 million each to get the business ready to launch. Based on the
quality of their business plan and their preparation, Miss Dikshya negotiated and NRs. 2.5
million bank loan with Nepal Investment Bank Ltd. Because they both have families and they
want to minimize their exposure to potential legal and financial problems, a large portion of their
start up cost went to purchase to liability insurance policy to cover the business in case a child is
injured during the party. If they are business plan is accurate, the company will earn a small
profit in its first year (about NRs.) 150000 and more attractive profit of NRs 750000 in its second
year of operation. With five years, they export their company to generate much as NRs 5
millions in profits. They have agreed to share the profit and work load as there expertise.

If business is successful as they think it will be, they eventually want to franchise their company.
That, however, is a part of their long term plan. For now, they want to protect their business
system and proof that it can be profitable before they try to duplicate it in the form of franchises.
As they move closer to the launch date for their business, they are reviewing the different forms
of ownership and promotional activities of the company.

Questions:

i) The given case has only pointed out optimistic scenario, and it appears that negative
factors have not been considered. Find out the possible adverse factors they should
consider in their plan?

Business environment is sum total of all internal and external factors which affect the
functioning of commercialism. Whenever we try to start new business, we should consider both
positive and adverse factor in our business plan. Here, we are asked to point out possible adverse
factors to be considered in our plan which are as follows.

a) Risk of new business: Since new business is start up, there could be high chance of loss in
first year. There are several risk such as
- ) Financial risk: It is the power of company to manage its debt and financial leverage. How to
manage the flow of fund so that there is will be no shortage of cash in the business is the main
problem in start up business. We need to prepare well developed capital strategy to reduce
financial risk. Developing a solid business plan and choosing right investor also helps in
minimizing financial risk.

- ) Product Risk: First of all we need to identify what we are selling. We should have ability to
describe or give explanation about characteristics, features and uses of our product which will
help customers in deciding to buy the product. We should select our product wisely before
starting our business. Product risk is the business risk that arises when we are not able to deliver
the product to market within available resources at given time. If we are able to deliver the
product to the market then it may not work exactly as we have described then also product risk
arises.

- ) Strategic Risk: The risk that arises from fundamental decision that director is taking for
fulfilling organizational objective is strategic risk. Risk of failing to achieve organizational goal
is strategic risk. There is high probability of strategic risk in new business because it becomes
difficult to decide what steps are to be taken to fulfill organizational goal.

- ) Security Risk: Generally new business is victim of data breaching because they are not
updated regarding security control. This loss can be minimized by providing best training to
employees to make them aware about data security, data theft and data integrity. Social
Engineering is particular threat for small business. Hackers try to steal confidential information
by posting a link as a trusted source and if employee clicks on particular link then virus is
installed in their computer and confidential data are leaked. Thus employee should try to check
legitimacy of source and should not click on the link which is sent from unauthorized source.

Important data should be protected by using strong password and there should be authorized
access to business computer.

- ) Market Risk: It is real risk which arises when we have launched our product in the market and
we are not able to get market for our product. There are so many similar product and services
from where customer choose that may lead to strong indifference towards new product. This
situation of not getting market could arise due to failure to identify and get target customer.
Whenever we plan to start a new business we should know who our target customer are and how
can we get our target audience. If we are unable to identify our target customers then there is
high chance of being failure in our new business.

b) Risk of losing competition: Since Event Management Company (company which is engaged
in throwing birthday parties) is highly competitive; there is risk of not getting proper
market. We may not be able to compete with competitors who are already established
successfully in business. So before starting new business, we should try to obtain list of
organizations dealing in same business and should develop strong strategy to compete with
competitors.
 c) Conflict between partners and team members: Conflict between team members and partners
arises when there is no proper distribution of responsibilities.

There should be optimum utilization of available resources to achieve desired goal. There
might be dispute regarding how to allocate resources for specific job.
There is chance of breach of fiduciary duty where there is misappropriation of company’s
fund. If business fund is utilized for personal use then it hurts the basic objective of
organization and situation of conflict arises among the partners. These things should be kept
in mind before making plan for new business.

d) Natural disasters and pandemic: Whenever we plan for setting new business, we should also
be prepared for worst situation. Natural disasters and pandemic occurs without giving any
notice. In order to prevent such situation we should get insurance coverage so that if such
disasters happens then we will be least affected. For example outbreak of COVID-19, totally
hampered financial, strategic and operational component of every business.

e) In efficient debt recovery management system: We should plan for efficient debt recovery
management system at the beginning of starting our new business so that possibility of bad
debtor will be minimized. Focusing on how to increase sales will not be beneficial if we do
not have proper debt recovery system.

f) There could be chances of high turnover of labor in newly established business. So there
should be proper co-ordination between supervisor and labor. Management should try to
provide healthy and friendly working environment so that efficiency of workers can be
maximized.

Conclusion: Since Dikshya giri and her sister have focused only on earning profit, they should be
aware of business risk and other essentials component which are listed above before starting new
business.

ii) State and explain the best promotional activities to attract customers.

Promotional mix refers to combination of different marketing communication method to perform

marketing activities. Various types of promotional activities to attract customers are as follows.

a) Advertising: In order to attract customer, we must be able to create belief and faith in our
brand. By promoting products through radio, TV, magazines or newspaper, we can reinforce
customer belief towards our product. Although we are in age of digitalization, majority of
customer’s buying decision are based on the influence of traditional marketing. Media
advertising helps to attract customers who are not active in social media and do not have
 belief in online marketing. It is the paid form of communication. The main objectives of
advertising are promoting new product, supporting personal selling, helps in maintaining
brand patronage, taking immediate buying action and supporting dealer.
A good advertisement should be focused on providing right message through right media.
Right timing in advertisement plays vital role in making advertisement successful. If message
is communicated to right person at right time then it can grab attention of customers.
Advertising should be designed in such a way that it is easily understood by targeted people.
The art of advertising is creation of message that must be capable to capture the attention and
arouse desire to purchase the product advertised. Good advertising is focused towards
grabbing attention of group rather than individual.

b) Personal Selling or Telemarketing; Effective personal selling depends upon expert

interpersonal and communication skill. The sales person should have good knowledge of the
product which he is going to sell. Personal selling depends upon convincing power. He not
only inform product to potential customer but also use his persuasion power to remind the
customers about product features, qualities, price, service agreement etc. the seller should
give honest response to customer’s queries which will help in attracting new customer and
retention of old customer.
Telemarketing is cost effective form of promotional strategy which is operated by trained
staffs who uses telecommunication and informational technology with a view to implement
marketing strategies. Telephone is used as major medium to sell directly product and services
to customers.

c) Publicity: Publicity is the method of mass communication for creating awareness of any
product or service .It implies movement of ideas and information from its source to general
public. It is not paid form of advertisement. It is generally done by giving public speeches,
interviews, conducting seminars or a donation campaign that attracts mass media to publish
news about them. Generally it focuses on information regarding public interest. It is focused
on publishing or highlighting company’s activities or services that help in creating
company’s image. Publicity is done at lower cost than advertisement and it is the part of
public relation.

d) Sales Promotion: It is one of the major elements of promotional mix that uses both media and
non media marketing communication to grab interest of new customers and to retain old
customers. It helps in increasing customer demand and improves product availability.

Sales promotion helps in stimulating customer and main customer promotion tools are samples,
coupons, demonstrations etc.

e) Direct Marketing: Direct marketing provides wide range of ways to promote product and
services. It is the process of communicating to customers through direct channel without
using any intermediaries. Direct marketing helps in reduction of cost and saves time. Various
 forms of direct marketing are sending email or letters to customer, face to face selling,
catalog marketing, telemarketing etc. Telemarketing provides low cost solution to direct
marketing.

f) Social Media Marketing: It is most useful tool for promoting product or services. It is
important platform to get connected with our customer to build brand and increase revenue.
The five core pillar of social media marketing are developing strategy, planning and
publishing, listening and engagement, analytic and reporting and the last one is advertising.

We should be clear about our strategy before posting anything in social media. We should know
what our goals are, which social media platform to be used, and type of content to be shared.

Although Planning and publishing in social media is very simple task, we should publish our
content at right time so that it gets attracted by target customer.

After posting in social media, we get lots of comments and queries from people. We can use
social media listening and engagement tool that helps in aggregating all our messages and
comments including post.

We can use variety of social media analytical tool such as buffer to analyze how our social media
marketing is performing.

Social Media advertising helps us to reach wider audience and can target audience based on
demographic, interest and behavior. For example we use face book to promote our products and
to increase brand awareness.

g) Mobile Marketing helps in promoting product and services with the help of mobile devices
such as tablets and smart phone that uses modern mobile technology. Promotion in mobile
marketing is done through sending SMS text messaging and MMS multimedia messaging.

h) Sponsorship: It is the peculiar type of public relation which is mainly used in large business.
The purpose of sponsorship is to build brand awareness among public.

Conclusion: We can use either of one components of above mentioned promotional mix tool for
promoting our product or service or we can use combination of these methods to target our
potential customers. In my opinion, Integrated Marketing Communication is best tool for
promoting goods or services.

Integrated marketing communication is combination of various marketing tools such as

advertising, sales promotion, direct marketing, public relation online marketing etc. Nowadays
single promotional tool is not that effective in comparison to integrated marketing
communication. We should have better promotional strategy in order to survive in market.
 Fig: IMC tools for better promotional strategy.

To determine which promotional activity to use and how to combine them is challenging
task. Campaign approach often aids in planning process. Nowadays organization creates
different types of IMC campaign to attract customers’ attention.IMC are conducted on the
basis of geographic areas, distribution of fund, availability of resources and marketing
objectives.
New display material reflecting common objectives and message should be prepared in each
IMC campaign. People answerable for the physical delivery of the products or services must
make sure that the distribution points are well stocked and equipped to deliver. People
managing public and media relations should be constantly responsive to marketing planning
and allowing them to spot and coordinate opportunities for attracting media attention. PR
deals with media, conference/event organizers, and other stakeholders outside the
organization. It's extremely important to give enough time for public relations to take the
advantage.

iii) What are the suggestions would you like to give them to meet their target with
example?

The main objective of marketing is to provide right information to right people. We can
provide right information to right people after knowing who our target customers are and at
the same time we need to know how to reach to our target audience. Following suggestion
should be implemented by Dikshya giri and her sister to meet their target.
a) Define our target audience: In order to meet our target, we should first define our target
audience which means we should know who our real customers are. We can identify our real
customers by making a consumer persona which is the generalized representation of our ideal
buyers. We can make consumer persona by listing demographic and psychographic attributes
of consumer. After that we can make aware of our product to that specified group who are
genuinely interested in our product. This helps in increment of customer’s response and
conversation which automatically helps in increasing sales revenue.

Similarly Dikshya giri and her sister had already found out their target customer who are their
kids between the ages of 1 to 10and belong to upscale families. Now they need to list out rich
people who are willingly to throw birthday parties of their children in surrounding areas.

b) Deciding useful and relevant matter: The optimum way to reach our target audience is to
provide them with useful and relevant content. Preparation of introduction of product
including their quality and feature will enable to grab attention of target customers. Content
marketing plays important role in attracting customers which can be done through by making
video and by creating blog to post articles and news.

After listing out their target customer, Dikshya giri and her sister need to prepare introduction of
their event management company including features and services they are offering. More over
they can prepare video for introduction of company from where people can see and observe the
place for event. They should communicate it to concerned group. They can create blogs to write
down their experience of conducting previous parties. They can share their experience in social
media also. They can post pictures and upload videos of previously held parties so that it
becomes easier for grabbing customers’ attraction. Now there is high chance of getting customer
response because they have selected particular group of people who have interest in conducting
birthday parties for their children.

c) Leverage influencers: Here we can use our power of social media to grab attention of our
target customers. Influencer marketing is very attractive technique of marketing to achieve
marketing goals. If we are able to create our niche with the help of influencer then we can
reach to our potential customer who is interested in our brand. For example Grin is software
that is used as influencer for marketing e-commerce.

Another example is Huda Kattan which is popular instagram influencer in beauty brand. If other
beauty brand collaborates with her, they can attract massive audience.

In the above scenario they may use such platform for reaching to their target customers. Grin
software makes influencer marketing simple by providing statistic and helps in tracking all
necessary data from one single portal. It is well managed software that helps our brand to reach
to maximum people.
 .
d) Use Targeted Advertising: We can reach to our audience more quickly by using targeted
advertising. This form of advertising is focused towards customer with certain
characteristics, support the merchandise or person that advertiser is promoting. The trait can
be demographic or psychographic. In targeted advertising, the consumer who is likely to
own a robust preference will receive the message rather than people who don't have
any interest and whose preferences don't match with product's attribute that helps in
eliminating waste.

Here in the above mentioned case, Dikshya giri and her sister can use and take the advantage of
Targeted advertising that helps in attracting large mass of customers. Since Targeted Advertising
is concentrated on particular trait, people with same character/ trait will receive the message
rather than person who don’t show any interest or preference towards the product. They can use
Google ad or social media ad which provides advanced targeting choice to reach to their target.

For example face book provides access to multiple targeting that helps to create and run ads.

e) Referral marketing: It is the method of encouraging the use of product to new customers
through referrals. Referrals here mean use of word of mouth or by recommending our brand
to family and friends. It is the oldest and most frequently used technique to grab attention of
customer towards their product or services.

Online referral marketing is internet based approach which helps in increasing brand awareness
by tracking customer behavior online through the use of web browser.

Referral marketing helps in improving customer retention rate which helps in easily identifying
and targeting our loyal customers. Whenever a consumer refers our brand to his friend then there
is high probability for him to visit our website more often either to claim his reward or to discuss
about our product to others. If he visits our site frequently then there is high chance of
purchasing more products. It also helps in increasing engagement which strengthens our online
presence and thus more revenue can be generated. Referral marketing is the cost effective
method to retain our loyal customers.

Dikshya giri and her sister can use referral marketing because it is cost-effective way to advertise
product when compared to others. By tracing customer referrals and engagement, they can give
feeling of personalization to their client. Satisfied client usually refers their brand to other people
which helps in capturing more market. It helps in increasing greater return in investment value
and saves loyal customers.

f) Reach our target audience on social Media via Hash tags.

Nowadays people spend more time in social media either for their personal use or for
commercial use. We cannot ignore the importance of social media to reach our target audience.
In order to promote our brand in social media so that it could reach our target audience, we need
to use Hash tags. Hash tags are fundamental to grab the attention of people which is the way of
making our content visible when used in correct way. Correctly used hash tag helps in searching
the people who are interested in our brand and also helps in increasing our followers.

Similarly Dikshya giri and her sister can use hash tags as a medium for promoting their services.
They can share pictures and videos on social media and use hash tag there so that it becomes
noticeable. Correctly used hash tag helps in increasing attention to their post and encourages
interaction. People who are not their followers can still observe content. It can be placed at the
beginning middle or at the end of social media post or comment.