Tuesday, December 27, 2011

Why is branding not an easy task?

 Brand values can be established as a brand identity, if the consumers also believes in it. A brand making claims is not sufficient, it has to deliver and then the consumer decides through its own measures of authenticity by experience. His satisfaction will aid in brand differentiation and consumer engagement. Building a brand and sustaining it is no more an easy task.

Consumer wants a reason-to-buy at all, to create buying impulse is tough task with many “Me too ‘s” around

Differentiation is in the Value. Just creating awareness about the brand is no more a customer puller. The differentiation in terms of product and service offering is critical for success --meaning sales and profitability.

Consumer expectations are growing. Those brands that understand where the strongest expectations exist will be the brands that survive - and prosper. The hollowness of the brands exposes more easily during the recessionary phase.

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What is Branding ? Name types of Brands.

The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.

• Thus branding is getting your prospects to see your product or services as the only one that provides a solution to their problem.

• There are three types of brands: manufacturer brands, private brands, and generic brands:

Manufacturer brand: A brand that is designated, owned, and used by the manufacturer of the product e.g., Raymonds, Mercedeze.

Private brand: A brand that is designated owned, and used by a wholesaler or retailer e.g., Brroke Bond or Nilgiri.

Generic brand: A non branded product that is identified only by its product category e.g., Basmati Rice, Darjeeling Tea.

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Redefining Branding Strategy through Logo

Case Study Level 5 Leadership.

Explain Holistic Marketing Concept

Building Sustainable Competitive Advantage

Monday, December 26, 2011

The Value of Branding

A brand is often an organization’s most valuable asset.

• It provides customers with a way of recognizing & specifying a particular product if they want to choose.

• A brand also enables marketers to develop specific images and interrelated marketing strategies for a particular product.

• In addition a brand can command a premium price in the marketplace.

• It is often the only element of a product competitors can’t copy.

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How do Brands Make Use of Innovation
Godrej Growth Strategy in Asia & Africa
Explain Post Purchase Evaluation-by Consumer

Thursday, November 17, 2011

What is Internal Marketing?

Holistic marketing incorporates internal marketing ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management. Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well.

It makes no sense to promise excellent service before the company’s staff is ready to provide it.

Internal marketing must take place on two levels. At one level, the various marketing functions sales force, advertising, customer service, product management, marketing research must work together. Too often, the sales force thinks product managers set prices or sale quotas “too high” ; or the advertising director and a brand manager cannot agree on an advertising campaingn. All these marketing functions must be coordinated from the customer’s point of view.

At the second, other departments must embrace marketing; they must also “think customer.” Marketing is not a department so much as a company orientation.

Internal marketing thus requires vertical alignment with senior management and horizontal alignment with other departments, so everyone understands, appreciates, and supports the marketing effort.

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Saturday, November 12, 2011

Why is Store Location Important in Retailing?

Store location is an important decision for a retailer due to following reasons:

First, location is typically the prime consideration in customer’s store choice decision. For instance, when choosing where you’re going to have your car washed, you usually pick the location closest to your home or work. Most consumers similarly shop at the supermarket closest to them.

Second, location decisions have strategic importance because they can be used to develop a sustainable competitive advantage. If a retailer has the best location, that is, the location that is most attractive to its customers, competitors can’t easily copy this advantage and are relegated to occupying the second best location.

In addition, many Western European countries restrict retailing to specific areas and then restrict the sizes of the stores that can be built.

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Case study level 5 leadership.

What information does retailer need?

Definition of Retail Market Strategy.

Retail Format - Internet Channel

E - Retailing High Potential
Shopping over the Internet provides the convenience and safety benefits offered by catalogs and other non store formats. However, the Internet, compared with store and catalog channels, also has the potential to offer a greater selection of products and more personalized information about products and services.

  1. Broader Selection: One benefit of the Internet channel, compared with the other two channels, is the vast number of alternatives available to consumers.

People living in Columbus, Ohio, can shop electronically at Harrod’s in London in less time than it takes them to visit their local supermarket.

2.  More Information to Evaluate Merchandise: An important service offered by retailers is the provision of information to help customers make better purchase decisions. Some catalogs provide only a few facts about each item, such as price, weight, and brand/model, along with a photograph. Other catalogs offer much more detail about each item carried.

Stores also differ in the information they make available to consumers. Specialty and department stores typically have trained, knowledgeable sales associates, whereas most discount stores do not.

Unlike in catalogs, the information on an electronic channel database can be frequently updated and will always be available – 24/7, 365 days per year. Furthermore, retaining knowledgeable sales associates difficult and, in many cases, not cost effective. The cost of adding information to an Internet channel is likely to be far less than the cost of continually training thousands of sales associates.

In addition, when using the Internet channel, customers can format the information so that they can effectively use it when evaluating products. In contrast, customers in stores usually have to inspect each brand, one item at a time, and then remember the different attributes to make a comparison.

Virtual communities, networks of people who seek information, products, and services and communicate with one another about specific issues, are examples of these problem-solving sites. For example, iVillage (www.ivillage.com) is a virtual community for women, with sub communities for pregnant women, women with babies, and working women.

  1. Personalization: The most significant potential benefit of the Internet channel is its ability personalize the information for each customer economically. Catalogers cannot economically tailor their merchandise and information to the needs and preferences of all individual consumers. To be cost effective, they have to send the same catalog to a large segment of customers.

To online chat provides customers with the opportunity to click a button at anytime and have an instant messaging e-mail or voice conversation with a customer service representative.

  1. Selling Merchandise with “Touch and Feel” Attributes: When you buy products, some critical information might be “look and see” attributes like color, style, and grams of carbohydrates or “touch and feel” attributes like how the shirt fits, the ice cream flavor tastes, or the perfume smells, Fit can only be predicted well if the apparel has consistent sizing and the consumer has learned over time what size to buy from a particular brand. Due to the problems of providing touch and feel information, apparel retailers experience return rates of more than 20 percent on purchases made through an electronic channel but only 10 percent for purchases made in stores.

  1. Role of Brands: Brands provide a consistent experience for customers that helps overcome the difficulty of not being able to touch and feel merchandise prior to purchase online. Because consumers trust familiar brands, products with important touch and feel attributes, such as clothing, perfume, flowers, and food, with well know name brands are being sold successfully through non store channels including the Internet, catalogs, and TV home shopping.

Consider branded merchandise like Nautical perfume or Levi’s 501 jeans.

Using Technology:

Retailers with electronic channels are using technology to convert touch and feel information into look and see information that can be communicated through the Internet. Web sites are going beyond offering the basic image customers the opportunity to view merchandise from different angles and perspectives using 3D imaging and/or zoom technology. The use of these image enhancing technologies has increased conversion rates (the percentage of consumers who buy the product after viewing it) and reduced returns.

To overcome the limitations for trying on clothing, apparel retailers have started to use virtual models on their Web sites.

Perceived Risks in Electronic Shopping:

Although most consumers have had the opportunity to try out electronic shopping, they also have some concerns about buying products through an electronic channel. The two critical perceived risks are :

(1) The security of credit card transactions on the Internet and
(2) Potential privacy violations.

Consumers also are concerned about the ability of retailers to collect information about their purchase history, personal information, and search behavior on the Internet. Consumers may be worried about how this information will be used in the future

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Benefits of Catalog Retail Channel

Que. : What are the benefits of Catalog Retail channel?

Ans. :The catalog channel provides some benefits to customers that are not available from the store or Internet channels.

1. Convenience 
2. Safety 
3. Quality of Visual Presentation

1.  Convenience :

Brows Where ever You Like
Catalog, like all non store formats, offer the convenience of looking at merchandise and placing an order on any day at any time from almost anywhere. With catalog, consumers have the added convenience of not being restricted to a place with Internet access and a computer; they can look through a catalog on the beach or propped up in bed.

Consumers can refer to the information in a catalog anytime by simply picking it up from the coffee table. The development of “magalogs,” catalogs with magazine-type editorial content, enhances consumers’ desire to keep catalogs readily available.

2.  Safety:
Security in malls and shopping areas is becoming an important concern for many shoppers, particularly the elderly. Non store retail formats have an advantage over store-based retailers in that they enable customers to review merchandise and place orders from a safe environment their homes.

3.  Quality of Visual Presentation: 
The photographs of merchandise in catalogs, while not as useful as in-store presentations, are superior to the visual information that can be displayed on a CRT screen.

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Friday, November 4, 2011

Building A Sustainable Competitive Advantage

Que. Explain the concept of Sustainable Competitive Advantages to a retailer. List Seven important opportunities for retailers to develop SCA.

Ans. : The final element in a retail strategy is the retailer’s approach to building a sustainable competitive advantage. Any business activity that a retailer engages in can be the basis for a competitive advantage, but some advantages are sustainable over a long period of time, whereas other can be duplicated by competitors almost immediately. 

    For example, it would be hard for Starbucks to establish to establish a long term advantage over Seattle’s Best Coffee by simply offering the same coffee specialties at lower prices.

Establishing a competitive advantage means that the retailer, in effect, builds a wall around its position in a retail market.

Over time, all advantages will be eroded due to competitive forces, but by building high, thick walls, retailers can sustain their advantage, minimize competitive pressure, and boost profits for a longer time. Thus, establishing a sustainable competitive advantage is the key to positive long term financial performance.

Seven important opportunities for retailers to develop sustainable competitive advantages are as follows:

(1) Customer Loyalty,
(2) Location,
(3) Human Resource Management,
(4) Distribution and Information Systems,
(5) Unique Merchandise,
(6) Vendor Relations, and
(7) Customer Service.

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Definition of Retail Market strategy

A retail strategy is a statement identifying

(1)    Retailer’s target market,

(2)    Format the retailer plans to use to satisfy the target market’s needs, and

(3) Bases upon which the retailer plans to build a sustainable competitive advantage.

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Sunday, October 16, 2011

Explain various stages through which a consumer passes while making Buying decision.

The buying process, the steps consumers go through when buying a product or service, begins when customers recognize an unsatisfied need.

They seek information about how to satisfy the need, such as what products might be useful and how they can be bought.

Customers evaluate the alternative retailers and channels available for purchasing the merchandise, such as stores, catalogs, and the Internet, and then choose a store or Internet site to visit or a catalog to review. This encounter with a retailer provides more information and may alert customers to additional needs.
Buying Behavior Stages

After evaluating the retailer’s merchandise offering by weighing both objective and subjective criteria, customers may make a purchase or go to another retailer to collect more information. Eventually, customers make a purchase, use the product, and then decide whether the product satisfies their needs during the post purchase evaluation stage of the customer buying process.

Customers may not go through the stages in the same order shown in the Exhibit.

For example, a person might learn about the Kodak Easy Share 740 digital camera at a Web site like www.dcrespirce.com, decide to buy the camera, and then search for retailer that sells the camera.

In this case, the customer decides what product he or she wants and then selects the specific retailer.

Alternatively, customers might decide they want to buy an iPod on the Internet, go to shopping web site such as www.mysimon.com, and then buy the iPod from the retailer with lowest price.

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Explain Post purchase Evaluation by a consumer and its reaction?

      The buying process doesn’t end when a customer purchases a product. After making a purchase, the customer uses the product and then evaluates the experience to determine whether it was satisfactory or unsatisfactory.

Satisfaction is a post consumption evaluation of how well a store or product meets or exceeds customer expectations.

This post purchase evaluation then becomes part of the customer’s internal information that affects future store and product decisions.

Post Purchase Behaviour by a Customer

Unsatisfactory experiences can motivate customers to complain to the retailer, patronize other stores, and select different brands in the future.

Consistently high levels of satisfaction build store and brand loyalty, important sources of competitive advantage for retailers.

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Explain the types of Consumer Needs

The needs that motivate customer to go shopping and purchase merchandise can be classified as:-

a. Utilitarian
b. Hedonic or
c. Conflicting.

Selection of dress for Interview is utilitarian need or basic need.

When consumers go shopping for pleasure, they are seeking to satisfy their hedonic needs. Their such needs are for an entertaining, emotional, and recreational experience.

Thus, from the consumer’s perspective, utilitarian needs are associated with work, whereas hedonic needs are associated with fun.

Buying can be for Fun or Need
Successful retailers attempt to satisfy both the utilitarian and hedonic needs of their customers. Consumers motivated by utilitarian needs typically shop in a more deliberate and efficient manner; thus retailers need to make the shopping experience easy and effortless for utilitarian shoppers by providing.

Some hedonic needs that retailers can satisfy include stimulation, social experience, learning new trends, status and power, self-reward, and adventure.

Conflicting Needs :

Most customers have multiple needs. Moreover, these needs often conflict.

Typically customers make trade offs between their conflicting needs.

Because needs often cannot be satisfied in one store or by one product, consumers may appear to be inconsistent in their shopping behavior.

A grocery shopper might buy an inexpensive store brand of paper towels and a premium national brand of orange juice. The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price oriented retailers is called cross-shopping.

Although all cross-shoppers seek value, their perception of value varies across product classes.

While retailers might think the buying patterns of cross-shoppers do not make sense, they make sense to their customers.

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Saturday, October 15, 2011

What information does a retailer need to collect to develop a strategy to attract customers?

Ans. : Thus, to develop a program for attracting customers, the retailer must do market research to collect the following information.

1. Alternative retailers that customers consider.

2. Characteristics or benefits that customers consider when evaluating and choosing a retailer.

3. Customers’ ratings of each retailer’s performance on the characteristics.

4. The importance weights that customers attach to the characteristics.

Armed with this information, the retailer can use several approaches to influence customers to patronize their store or Internet site.

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Friday, October 14, 2011

What are the benefits a store channel offers over other retail Channels?

Store offers a number of benefits to customers that they cannot get when shopping through catalogs or on the Internet.

1. Browsing: Shoppers often have only a general sense of what they want (e.g., a sweater, something for dinner, a gift) but don’t know the specific item they want. They go to a store to see what is available before they decide what to buy.
Store has Seven Advantages
2. Touching and Feeling Products: Perhaps the greatest benefit offered by stores is the opportunity for customers to use all five of their senses touching, smelling, tasting, seeing, and hearing when examining products.

3. Personal Service: Although shoppers might be critical of the personal service they get in stores, sales associates still have the capability of providing meaningful, personalized information. They can tell you if a suit looks good on you.

Customers for durable goods such as appliances reports that salespeople are the most useful information source, more useful than consumer Reports, advertising, or friends.

4. Cash Payment: Stores are the only channels that accept cash payments. Many customers prefer to pay with cash because it is easy, resolves the transaction immediately, and does not result in potential interest payments.

5. Entertainment and social Experience: In store shopping can be a stimulating experience for some people, providing a break in their daily routine and enabling them to interact with friends.

All non store retail formats are limited in the degree to which they can satisfy these entertainment and social needs.

6. Immediate Gratification: Stores have the advantage of allowing customers to get the merchandise immediately after they buy it. If your child has a fever, you are not going to wait a day or two for the delivery of a prescription from Drugstore.com.

7. Risk Reduction: When customers purchase merchandise in stores, the physical presence of the store assures them that any problems with the merchandise will be corrected. The store will be there to receive defective or unsuitable merchandise and issue you a credit for it. Consumers do not have this same level of confidence when buying merchandise from catalogs or through the Internet.

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What do you mean by Retail Channel? Name different types of retail Channels.

Ans. : Retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser. The route through which the goods reach to the end users are called retail channels.

Star Bazar - A Discount Store
The retail transaction is at the end of the supply chain. Manufacturers sell large quantities of products to retailers, and retailers sell small quantities of those products to consumers.

There are three different channels stores, catalogs, and the Internet through which retailers can communicate with and sell merchandise and services to their customers.

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Sunday, September 25, 2011

Quality must, it's an entry ticket to luxury car business: BMW Strategy in India

Main Observations :

BMW Series 7
1. BMW would never offer MPV

2. Rising female clients though still 80% are male.

3. Female clients look more for service & respect

4. In China and India the average age of people buying 7 series is low in 30s as against 40s in Europe.

BMW has established it’s lead in emerging markets of China and India, over competitors Benz and Audi, along other established markets. The marketing strategy  for a  luxury car branding and challenges in retaining the brand heritage is difficult more when the macro economy factors are not favourable.

Post slowdown of 2008  the scenarion has changed for luxury car makers and buying behaviour of consumers in markets like India, The companies manufacturing luxury cars have to adapt to these changes.A decade ago none  of these companies had  bothered for China and Indian markets. With shift in economy map interpretion of  luxury in a post recession economy. also redefined.

The interpretation of luxury with time has changed. The meaning of exclusivity changes even in markets where luxury goods exclude others by high price. In this segment Quality is must for entry, but at the top are emotional assets. Luxury cars have a crystal clear identity and premium image with more demand for class of elite differentiations.

Changing Demographics :
There are two changes in the customer patterns, (i) No of female buyers are increasing and (ii) The average age of buyers of premium segment has lowered.

This has changed the requirements of service level – more sophistication and more prompt. Research has shown that the female buyers look for a male brand to show that they have made it in life. Female buyers tend to be more demanding of service and more attention is to be paid on them. They have been climbing up the social ladder and expect more respect from luxury car manufacturers. Do not underestimate female customers, that is a growing segment. . In emerging market luxury car owners are younger , say in 30s as against in developed world generally they are of 40s age group.

Brand Values :

To gain the admiration and appreciation never compromise with quality of products and services. BMW always manage expectations; it never compromises brand values for high volumes, as per Mr Uwe though there is high demand for MPV, in Germany, BMW has refrained to produce. It could dilute it’s premium brand image.

Adapting to Emerging Markets :

BMW extended wheel base which means longer cars with more leg room in the rear in order to enhance the passenger orientation, as the Size is definitely an issue in many emerging markets in Asia. There is no major caveat for BMW to overcome in order to gain in brand strength.

Indian market was an untapped potential for decades and suddenly it turned into reality. China started earlier but has been a much more predictable market. There was enough awareness of the BMW brand among the potential customers in India, but to expand the market reach it has to build its brand outside big cities too.

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Sunday, September 11, 2011

Name the Economic Policies framed by the Governments

Economic policies of a government play a significant role in determining the economic environment of business in country. Broadly these policies are classified under four heads:

(1) Industrial policy,
(2) Trade Policy,
(3) Monetary policy, and
(4) Fiscal policy.

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Saturday, August 20, 2011

What is Capitalism and Socialism?


Each country operates under some economic system. Economists define an economic system “as the sum total of the devices by which the preference among alternative purposes economic activity is determined and by which individual activities are coordinated for the achievement of these purposes. The central problem of an economic system is the allocation of resources.”

Capitalism, in the broad sense, is a system of private in both producer and consumer goods, freedom of contract and competition, with limited government intervention in economic affairs. USA, UK, Germany follow Capitalistic system.

Socialism is a system of collectivization of means of production; there are no private profits, but incomes may differ according to individual skills and amount of work done; also personal property for consumption purposes is allowed. China, North Korea etc follow this type of system

It is clear that to a great extent economic system of a country determines its economic environment. Many countries like India try to adopt a middle path of the two system by taking some points of each.

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How does business firms influence the environment?

Individually, business firms can do little to change their economic environment. Collectively in a capitalist economy business firms can do a lot to make economic environment conducive to their activities.

Business firms now organize their associations through which they attempt to influence policies of the government.

In India, the Confederation of Indian Industry (CII), the Federation of Indian Chamber of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) are powerful organization of the business.

They exercise considerable influence on the government and thereby attempt to mould economic environment in their favour.

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Basic Principles-of Economics 
Todays Dynamic Work Place

Name Economic Policies framed-by Governments

Macro Environment of Business

Thursday, August 11, 2011

Monopolistic Competition in the Long‐run

The difference between the short-run and the long-run in a monopolistically competitive market is that in the long-run new firms can enter the market, which is especially likely if firms are earning positive economic profits in the short-run. New firms will be attracted to these profit opportunities and will choose to enter the market in the long-run. In contrast to a monopolistic market, no barriers to entry exist in a monopolistically competitive market; hence, it is quite easy for new firms to enter the market in the long-run.  
Figure  -  1
The monopolistically competitive firm's long-run equilibrium situation is illustrated in Figure 1
The entry of new firms leads to an increase in the supply of differentiated products, which causes the firm's market demand curve to shift to the left. As entry into the market increases, the firm's demand curve will continue shifting to the left until it is just tangent to the average total cost curve at the profit maximizing level of output, as shown in Figure 1 . At this point, the firm's economic profits are zero, and there is no longer any incentive for new firms to enter the market. Thus, in the long-run, the competition brought about by the entry of new firms will cause each firm in a monopolistically competitive market to earn normal profits, just like a perfectly competitive firm.
Excess capacity. Unlike a perfectly competitive firm, a monopolistically competitive firm ends up choosing a level of output that is below its minimum efficient scale, labeled as point b in Figure 1 . When the firm produces below its minimum efficient scale, it is under-utilizing its available resources. In this situation, the firm is said to have excess capacity because it can easily accommodate an increase in production. This excess capacity is the major social cost of a monopolistically competitive market structure.
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