Master of Business Administration-MBA Semester 2

MB0046 – Marketing Management - 4 Credits

Assignment Set- 1 (60 Marks)

1 a. Explain the meaning of market with its features.

Originally, a “Market” was a public place in a town or village, where household

provisions and other objects were available for sale. The definition of market has
expanded in this globalized world. The traders may be spread over a whole town, or city
or region or a country and yet form a market. For example, stock market, Oil & Oilseeds
market, Steel or Metals market etc where people across the countries can participate in
the business. The essentials of a market are
(i) a commodity / item which is dealt with,
(ii) the existence of buyers and sellers,
(iii) a place; be it a certain region, a country or the entire world and
(iv) nteractions between buyers & sellers to facilitate transactions.

Features of a market economy are: where people get to make there own decisions, they
have the right to choose their own job, things don’t stay the same for a long period of
time (economy hanges from time to time), and where the ruler does not make all the
decisions. An example of this is the United States.

The features of Market are as follows.

1) The less successful traders are anticipating market movement and trading accordingly.
The highly successful traders are identifying asset class mispricings and trading off those.

2) The less successful traders are trading particular instruments and pretty much stick to
those. The highly successful traders recognize that any combination of trading
instruments can be considered an asset class and appropriately priced (and gauged for
mispricing).

3) The less successful traders think of their market as *the* market. The highly
successful traders focus on interrelationships among markets that cut across nationalities
and asset classes.

4) The highly successful traders place just as much emphasis on understanding markets
as predicting them. The less successful traders don't ask "why" questions.

5) The less successful traders are convinced they have proprietary information of value
that they must not disclose to anyone. The highly successful traders use their proprietary
information to selectively share with other highly successful participants, thereby gaining
a large informational edge.
On the basis of Geographic Area

Local Market is the place where the purchase and sale of goods / services involve buyers
and sellers of a small local area. The example of local market is a village or a town,
market. In this market day to day requirement like vegetable, fruits, meat and fish are
sold.

Regional Market
When the purchase and sale of goods involve buyers and sellers of a region, such as a
large town market catering to needs of a group of villages or towns, such a market is
common in case of wholesale / retail sale of food grains.

National Market
When the purchase and sale of goods involve both buyers and sellers of the entire nation
then it is called as national market. This type of market in the case of commodities such
as Cotton & Textiles Market located in Mumbai, Tea and Jute Markets located in
Kolkata. With the advent of internet, this concept is also getting obsolete, as you can
operate in any market, sitting in your town or city.

Global or World Market

When the purchase and sale of goods involve buyers and sellers of many nations, there is
said to be a World or Global Market. Many commodities such as Gold, Silver, Tea,
Coffee, Spices are sold in such global markets. Many manufactured products and
specialized services are also sold across the globe by many companies. Producers of
Coca-cola and Sony brand sell their products in the global market in almost all countries.
Indian companies like TCS, Infosys, and WIPRO sell and provide their IT enabled
services to many companies in different parts of the world. They operate in a Global
Market.

On the basis of Nature of Competition in the market

Perfect Market
It refers to a market or market situation where there is perfect competition. Competition
is said to be perfect when (a) the sellers & buyers of a particular product are so many that
none of them have to sell or buy at a single uniform price. (b) Price is determined by the
market forces of supply & demand.

Imperfect Market
In contrast to the perfect competition, the imperfect market will have imbalance between
number of buyers and sellers. This market is further divided into three parts. They are
Monopoly, Monopolistic and oligopoly. In case of monopoly, single seller dominates the
entire market where as in oligopoly few sellers dominate the market. The details of these
types of markets will be discussed in the pricing unit.
On the basis of Nature of Goods Sold

Consumer Goods Market

This is a market, where the buyers who are individuals and households purchase a variety
of products and services to satisfy their needs and wants. For example, an individual buys
a chocolate for his personal consumption whereas a family buys a refrigerator for
household or family consumption. Products sold in consumer goods market are classified
as Non-Durables, such which are frequently purchased such as bathing soap, detergent
etc. and Durables such as refrigerator, TV Set, Washing Machine, Car, Clothing etc.
Non-Durables are also known as FMCG – Fast Moving Consumer Goods e.g. Soap,
detergent etc…

Industrial Goods Market

This market is also known as organizational or B 2 B market. It is made up of

organizations including manufacturing units, service firms, government departments and
other business enterprise. The products which are sold in the industrial goods market are
typically, raw materials, machines, machine tools, equipments, components and spares
etc. Generally, the buyers of industrial goods, purchase products and services either for
producing other products and services which can be sold in the consumer markets or for
using them to facilitate the operation of business enterprise. In many such cases, the
buyer is an organization whose consumption will depend on how the end user’s demand
will change. Hence, in business markets, the demand is a derived demand. Demand for
steel will depend on the consumption of steel equipments, rods and other accessories in
the construction and real estate sector.

Non-Profit and Government Markets –

This market which consists of Non-Profit organizations such as social-service agencies,
educational organizations, charitable organizations and Government Departments and
agencies needs special skills to sell to them. These buyers have limited purchasing power
which is why pricing to this market needs to be planned carefully. Government, which is
a large buyer, makes purchases on the basis of tenders, bids and negotiation.

b. Marketing is more than just an exchange process. How can you prove the validity
of this statement?

Marketing is a set of business activities that facilitate movement of goods and services
from producer to consumer. It is an ongoing process of discovering and translating
consumer needs into products and services, creating demands for them, serving the
customer and his demand through a marketing programme of promotion and distribution
to fulfill the company’s marketing goals in a competitive environment.

It is evident that customer, his needs and wants are very important aspects of today’s
marketing. Customer focus is the very essence of marketing and his viewpoints should be
taken into account while making marketing decisions.
In this era of rapid changes, it is marketing which keeps the business in close contact with
its economic, political, social and technological environment and informs it of events and
changes that can influence its activities.

Definition: Marketing is an organization function and a set of process for creating,

communications and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stake holders.

The Exchange Process

Today’s marketing system has evolved from the time of a simple barter of goods through
the stage of a money economy to today’s complex marketing. Throughout all these
stages, exchanges have been taking place. In small town and villages there were artisans
such as carpenters, weavers, potters blacksmiths, barbers and others such service
providers who produced goods and services not only for their own consumption but also
for exchanging with others what they could not produce but needed. This was barter
system of exchange. For a transaction to take place between two parties, it was necessary
that there be needs and wants on both sides. The development of money came to act as a
common medium, and the exchange process became very easy and convenient.Fig.1.1.
below shows the exchange process under money economy in which products and services
flow to the market from the producers and sellers and money, the value of the products
and services, flow from the buyers to the sellers.

Thus, exchange is an act of obtaining a desired product or service from someone by

offering something in return. This exchange process will continue as long as human
society exists because satisfying one’s needs is the basic instinct of human beings and no
one can produce everything that he /she needs. For an exchange process to take place,
between two or more parties, few conditions have to be met. They are:

• Each party has something that could be of value to other party.

• Each party has desire, willingness and ability to exchange.
• Each party is capable of communicating and delivering.
• Each party has the freedom to accept or reject the offer.

Once a positioning strategy has been determined, marketing managers seek to control the
four basic elements of the marketing mix: product, price, place, and promotion, known as
the four P's of marketing. Since these four variables are controllable, the best mix of these
elements is determined to reach the selected target market.

Product. The first element in the marketing mix is the product. Products can be either
tangible or intangible. Tangible products are products that can be touched; intangible
products are those that cannot be touched, such as services. There are three basic levels of
a product: core, actual, and augmented. The core product is the most basic level, what
consumers really buy in terms of benefits. For example, consumers do not buy food
processors, per se; rather, they buy the benefit of being able to process food quickly and
efficiently. The next level of the product is the actual product—in the case of the previous
example, food processors. Products are typically sorted according to the following five
characteristics: quality, features, styling, brand name, and packaging. Finally, the
augmented level of a product consists of all the elements that surround both the core and
the actual product. The augmented level provides purchasers with additional services and
benefits. For example, follow-up technical assistance and warranties and guaranties are
augmented product components. When planning new products, firm managers consider a
number of issues including product quality, features, options, styles, brand name,
packaging, size, service, warranties, and return policies, all in an attempt to meet the
needs and wants of consumers.

Price. Price is the cost of the product paid by consumers. This is the only element in the
marketing mix that generates revenue for firms. In order to generate revenue, managers
must consider factors both internal and external to the organization. Internal factors take
the form of marketing objectives, the marketing-mix strategy, and production costs.
External factors to consider are the target market, product demand, competition,
economic conditions, and government regulations. There are a number of pricing
strategies available to marketing managers: skimming, penetration, quantity, and
psychological. With a price-skimming strategy, the price is initially set high, allowing
firms to generate maximum profits from customers willing to pay the high price. Prices
are then gradually lowered until maximum profit is received from each level of
consumer. Penetration pricing is used when firms set low prices in order to capture a
large share of a market quickly. A quantity-pricing strategy provides lower prices to
consumers who purchase larger quantities of a product. Psychological pricing tends to
focus on consumer perceptions. For example, odd pricing is a common psychological
pricing strategy. With odd pricing, the cost of the product may be a few cents lower than
a full-dollar value. Consumers tend to focus on the lower-value full-dollar cost even
though it is really priced closer to the next higher full-dollar amount. For example, if a
good is priced at $19.95, consumers will focus on $19 rather than $20.

Place. Place refers to where and how the products will be distributed to consumers. There
are two basic issues involved in getting the products to consumers: channel management
and logistics management. Channel management involves the process of selecting and
motivating wholesalers and retailers, sometimes called middlemen, through the use of
incentives. Several factors are reviewed by firm management when determining where to
sell their products: distribution channels, market-coverage strategy, geographic locations,
inventory, and transportation methods. The process of moving products from a
manufacturer to the final consumer is often called the channel of distribution.

Promotion. The last variable in the marketing mix is promotion. Various promotional
tools are used to communicate messages about products, ideas, or services from firms and
their customers. The promotional tools available to managers are advertising, personal
selling, sales promotion, and publicity. For the promotional program to be effective,
managers use a blend of the four promotional tools that best reaches potential customers.
This blending of promotional tools is sometimes referred to as the promotional mix. The
goal of this promotional mix is to communicate to potential customers the features and
benefits of products.

Q.2 a. Examine how a firm’s micro environment operates when compared with its
macro or external environment.

Micro and Macro Environment of Nestle.

INTRODUCTION TO NESTLE

Today, Nestle is the world leading Food Company. Nestle headquarters is in Switzerland.
Its international R&D network supports the products made in more than 500 factories in
86 countries. The Nestle factories are operating in the region of:
1. Africa
2. America
3. Asia
4. Europe
5. Oceania

Being a company dedicated to food from the beginning, Nestle remains sensitive to
culinary and eating habits, and responds to specific nutritional problems, whilst also
setting and matching new trends such as growing out-of-home consumption and caring
about the well being of its consumers.

EANING OF NESTLE

Henri Nestlé endowed his company with the symbol derived from his name. His family
coat of arms, the nest with a mother bird protecting her young, became the Company's
logo and a symbol of the Company's care and attitude to life-long nutrition. The Nestlé
nest represents the nourishment, security and sense of family that are so essential to life.

Micro Environment

In Nestle microenvironment includes:

a) Suppliers: Suppliers provide the resources like labor and material resources to produce
goods and services. They add to customer overall value delivery system labor supplies
include handling of

•Quantity of labor
•Quality of labor
•Labor strikes
•Labor relations Material supplies deals with the
•Quantity of material
•Quality of material
•Price of material
•Stability of material inputs
•Delivery delays

Nestle efficiently handles the quality, quantity, price and stability of both material and
labor supplies. Management maps out the strategies for labor strikes, supply shortages
and delays to avoid increasing the cost of production, which can badly affect sales in
short run and customer satisfaction in long run.

b) Marketing Intermediaries:

It includes the firms that help the company to promote, sell and distribute its goods to
final buyers.
•The physical distribution firms determine the ways to store and ship goods to reach their
destination.
•Marketing service agencies including marketing research firms, advertising agencies and
media firms are also hired to target and promote product to right market.
•Financial intermediaries like banks, insurance companies helps to finance transactions
and insure against risks associated with buying and selling of goods.

Nestle works in coordination with marketing intermediaries to make its product Pure Life
Water available and visible to its valuable customers

c) Customers

Nestle deals with the reseller customers who buy the product Pure Life to resell at a
reasonable profit.

Macro Environment

Macro environment include political, cultural, economical factors but as for as Nestle
Pure Life Water is concern none of above factors affect on it. Because it is not at luxury
item they are selling necessities of life which can never be affected.

Demographic Environment

Demographic environment including age, sex and income also not effect Nestle Pure Life
water. Because Water is for every gender, every age and for every class.

STRENGTHS

•The only brand in the area maintaining its quality and taste and having the same impact
on its customer
•Economical
•Pure Drinking Water in market (Free of chemicals)
•Strong Brand Name

WEAKNESS

•Communication is weak
•Lack of Awareness

OPPORTUNTIES

•Concentrating on these areas can increase sales

•Increase in product line.

THREATS

•Segments are being shared by competitors

•Uncertain conditions will affect the sales (diseases of animals)
•Under cutting by competitors.

b. Mention the key points in one of the four buyer behavior models

Types of Buying Decision Behavior

Henry Assael Model

Complex buying behavior

Customers who are representing this behavior are highly involved in the purchase of the
product or service. The process became complex as difference between brands are very
high. For example, customer who wants to purchase refrigerator would like to know the
meanings of defrosting, door lock, digital temperature control etc… The price of the
product usually high let me show you the comparison of three brands and significant
difference between them.
From the above example it is clear that marketer should first develop the belief about the
brand, provide the information and differentiate the company brand from others. In the
above example you can see both Akai and LG don’t have water dispenser while
Electrolux have. Both LG and Electrolux have moisture and humidity control while Akai
lacks it. Customer would like to know what these features are and how they add value to
the product.

Dissonance reducing buying behavior

The behavior exhibited by the customer when product purchase requires high
involvement but only few differences exist. For example, customers who want to
purchase CTV will not find many differences between the brands but the price of the
product and its technicality makes customer to involve more. One of the major
disadvantages of this type of behavior is customer will show post purchase dissonance
which is very difficult to control.

Variety – seeking buying behavior

When there are significant difference between the brands existing but customer will not
involve more while purchasing, marketer identify this behavior as variety seeking buying
behavior. Let us discuss the purchasing behavior of customer for biscuits. There are many
varieties of biscuits available. One can purchase salt biscuits, cream biscuits, Marie
biscuits, and milk biscuits of Britannia, Parle, ITC sun feast and others. The customer
who purchased Britannia tiger earlier may purchase Sun feast cream biscuit next time.
This doesn’t mean that quality of Britannia tiger is inferior to other brands but customer
would like to try the varieties available in the market. In this situations marketer should
undertake following steps

a. The market leader should encourage customers to buy repeatedly.

b.Make the product available and visible to the customer in the shopping places.

c. The firm who are not market leader should come out with sales promotion techniques
to encourage customer to purchase the product.

Habitual buying behavior

The low involvement between the brands and few differences between the brands leads to
the habitual buying behavior. For example spice powder marketed by MDH, Everest or
MTR have very few difference between them and customer do not search the information
to purchase particular product. Marketers whose customer represents this category should
follow below listed strategies

a. Use price and sales promotions to stimulate product trial.

b. Use more visual aspects than the wordings in the advertisements

c. Television is the better media for this type of products.

d. Use classical conditioning theory to create advertisements.

3. a. State the meaning of Marketing Information System and Marketing Research.

Marketing Information means Set of procedures and practices employed in analyzing

and assessing marketing information, gathered continuously from sources inside and
outside of a firm. Timely marketing information provides basis for decisions such
as product development or improvement, pricing, packaging,
distribution, media selection, and promotion.

Marketing Research means is the function which links the consumer, customers and
public to the marketer through information – information used to identify and define
marketing opportunities and problems; generate, refine and evaluate marketing actions;
monitor marketing performance; and improve understanding of marketing as a process.

b. Explain the various steps involved in the business buying process

Steps involved in buying a business are as follows.

Step One – Defining the business you want to buy

When larger corporations do this they call it ‘acquisition profiling’. For you, it will
probably manifest itself in a series of questions such as: What kind of business do I want
to buy? How do I know which business is right for me? Where do I start?

Even if you already know what business is right for you it’s still a good idea to do some
research. Read up on any future legislation that may affect the business sector. For
example, deregulation plans for the gaming industry may be a wonderful opportunity. But
new legislation on how care homes are run may prove restrictive. Know your facts and
figures.

Each trade has its own series of trade magazines and associations and you should use this
stage to read up. If, for example, you are thinking of buying a pub, then you should start
subscribing to the Publican – a trade magazine for the industry – and contact the British
Beer and Pub Association to find out why pubs fail. Get as much information about the
sector and don’t be afraid to change your mind.

If you’re thinking of buying a hotel, ask yourself what makes one successful? What
examples of success do you know? Could you replicate that? Go and stay in your
favourite hotel and make notes as to why you like it so much. It may sound simplistic to
do this but it will help you to define the business you want to buy.

In many respects, if you have not decided on the type of business you want to buy this
can be a very frustrating stage. Being sure of the business type is very important because
it will have to be something you enjoy and be able to do well.

However, never forget that sometimes the true benefits of business ownership are not
related to what you do, but the fact that you are financially independent. Therefore, if
you’re unsure about the type of business you want to buy but confident about being your
own boss you might want to consider one of the many franchise opportunities available to
you. There are over 650 systems on offer in the UK and thousands around the world. Go
to www.FranchiseSales.com to see a comprehensive list.

Please note, at this stage you’ll also be considering how much to spend on buying a
business. Careful financial planning at this stage is crucial as you don’t want to
overstretch yourself in the purchase only to find you don’t have adequate resources to
make any changes or implement new plans. Make sure you build in some fat or slack into
your budgets. Start doing the maths now.
Step Two – Targeting the business

Once you’ve defined the parameters of the business you to want buy – the market sector,
size, location (are you prepared to move?), the price range etc, you’ll be in a position to
start targeting the right business. There are two ways of targeting a business:

(1) Find a business that is already listed for sale.

(2) Approach a business not for sale and make an offer.

Our site has thousands of businesses – most of which are represented by leading business
agents, brokers and accountancy firms. It’ll make your task of targeting a business much
easier than searching through a newspaper.

However, if the business you want to buy is not actively being marketed for sale there is
nothing to stop you from approaching the owner direct and making an offer. Every
business has its price. If you go down this route then it is advisable to employ an
intermediary who will represent you.

There are many business brokers and accountancy firms who will target an opportunity
on your behalf. However, this process can be expensive and the costs should be
proportional to the size of the business you are targeting.

There’s no point in spending £50,000 with a top-five accountancy firm if you’re targeting
a post office. However, if you’re spending between £1m and £10m on buying a business
then an experienced professional will be invaluable. BusinessesForSale.com has a
directory of professionals who can be engaged for this type of activity.

Step Three – Quick and dirty DIY due diligence

Okay – now things are getting interesting. You’ve narrowed down the opportunities and
you’ve created a shortlist of possible businesses that interest you. Ideally, you will have
five or six targets on your list. Before you engage lawyers and accountants and start the
official due diligence process you will need to do your own – a DIY, quick and dirty
version of due diligence.

What is due diligence? Well, it’s a fancy term – used by accountants and lawyers – to
sum up the process of making sure the business is what it says it is.

It’s no different to buying a car. The AA – the equivalent of an accountant – will do a

professional due diligence on your behalf for a fee. However, before you engage them
you will do a bit of your own – kick the tyres, check the mileage, and give it a test drive.
It’s the same with a business.

Spending time on checking out the business could save you heartache down the line –
whether you’re buying a fish and chip shop, a florist or an electrical engineering firm.
Once you’ve got your shortlist you should get as much information as possible about
each business on your list.

This is your chance to dig around and make sure the business is as good as it seems. If
you’re buying a listed business for sale then it should come with a sales memorandum –
which will give an overview of what is being sold. However, don’t stop there.

This is a crucial stage. You must find out the truth about the business being sold. Any
flaws or irregularities could also help you to negotiate on the price or make your decision
to walk away much easier.

You will want to get access to financial records – audited and management accounts. For
this you will be asked to sign a confidentiality agreement. Don’t be alarmed at this. This
confidentiality agreement (it won’t be more than a couple of pages) is a promise by you
not to reveal sensitive information to a third party and is designed to make the seller feel
comfortable about sharing the knowledge of how his business is being run.

Remember, the business will still be operational and no owner likes it to be known (to
either his customers or competitors) that his business is for sale.

Beyond financial records you will want access to information about existing contracts –
either with suppliers or employees. You will want to research the local area and make
sure there are no legal issues that might threaten your activity.

If you are buying a services business you may want to test the quality of those services
and pretend to be a customer. If you’re buying a hotel, for example, you should stay there
and review the standards.

This is your chance to get to the bottom of what is actually being sold before you employ
expensive accountants and lawyers. It’s also a crucial stage if you are going to borrow
money from a lender to buy a business. The surer you are about the business and the
more evidence you can gather to back up your case, the easier it will be to start
negotiations with a lender. From your shortlist of five or six you should be narrowing
down to just one or two – the major target and a backup.

Step Four – Negotiating the price

Once you are satisfied that the business you have targeted is what it seems to be – and
that you have done as much as you possibly can to understand what it is you are going to
buy – you can start to talk about buying the business. And inevitably this will mean a
conversation or dialogue with the business owner or intermediary (agent, broker, and
accountant) about the price of the business.

It’s important to note that at this early stage of discussions, the price remains subject to
contract. This means you can make an indicative offer that can change at some future
point. Between now and when the contract is drawn up you may discover some
information about the business that will affect your perceived value of it and you may
wish to negotiate further on the price.

A similar situation arises in house buying. A surveyors report may reveal information that
will change your opinion of the valuation. So feel free to talk about what you are willing
to pay at this stage with the security that you won’t have to pay it once you’ve done
further investigation. Of course, you may find out (upon further research) that the
business is actually undervalued – and that you have a real gem on your hands (but don’t
ever count on it). In this case, you may just want to pay the asking price.

Also, at this stage and throughout the process, don’t allow yourself to be rushed. Don’t
allow yourself to be pushed into a quick sale. Take your time. Once you make an
indicative offer a business owner or intermediary may want to rush things through. That’s
only natural.

However, resist them. Remember, as a buyer, you hold most of the cards. Take as much
time as you need to get to the bottom of what it is you are buying. Don’t let them force a
timetable on you that you feel uncomfortable about. A timetable must be structured in
your favour. You’re paying. You’re the buyer.

Step Five – Valuing the business

A price is the ultimate reflection of the value of the business. There are many valuation
methods used to assess a business. Most first-time buyers will be buying a property-based
business (such as a pub, child nursery or coffee shop), which means that a great deal of
the valuation will be based on the property itself. A surveyors report will give you
comfort here.

However, when it comes to valuing a non-property-based business or valuing the rest of a

business (the turnover of the pub, child nursery or coffee shop) you will want to look at
the methods, such as (i) Multiple of earnings (ii) Discounted cash flow and (iii) Asset
valuation. You will need to take into account intellectual property and goodwill.

Because you’re a first-time buyer, using a multiple of earnings is a good starting point.
As a general rule you can take a multiple of future profits to land on a price. A majority
of businesses that are sold are done so on a multiple of between three and eight times the
profit. So if a business is making profits of £100,000 then it could be valued at between
£300,000 and £800,000.

If you were buying a hotel, restaurant or care home you would then have to factor in the
value of the bricks and mortar. It’s a rough rule and anything between three and eight
times profit is about right for most businesses.

There are companies that specialize in valuing certain types of businesses and you may
wish to engage the services of an accountant with experience in buying and selling
businesses when making an assessment. However, in the final analysis, a business is
ultimately worth what you’re willing to pay for it.

Step Six – Paying for the business

There are many ways you can structure how you pay for a business. The simplest and
most convenient way is to pay in cash on completion. You pay the whole lump sum and
the business is yours. Banks will lend up to 60% of the value of the business and you will
need to find the rest yourself.

Another way to pay for the business is to defer the consideration. Consideration is the
legal term meaning payment. This way involves you holding back some of the payment
until a certain event or milestone is hit. For example, if the value of the business you are
buying is affected by the renewal of an important contract – with a key customer – then
you may wish to defer full payment until that contract is renewed.

You may wish to agree terms with the vendor. In effect, he or she loans you some of the
money you need to buy the business he or she is selling by taking a big deposit for the
business and then accepting monthly or quarterly payments from you, the buyer, over a
specific period of time (three years, five years or even longer) for the rest.

This is a very common way of buying a business in the United States – usually called
‘loan notes’ or ‘vendor financing’ – and is becoming more popular in the UK. The seller
will wish to have some security built into an agreement that will give him an equitable
stake in the business, should you fail to meet payments or if the venture fails.

Step Seven – Heads of agreement

The purpose of heads of agreement is so that there are no misunderstandings between the
buyer and seller when it comes to completing a deal. Think of it as a roadmap that
outlines how the sale will take place. It’s not the contract of sale – which comes later.

Essentially it’s a document of terms – matters that you’ve both agreed on. For example, it
will include a period of exclusivity that will prevent the vendor from talking to another
prospective buyer. It will also protect the seller by preventing you from revealing
information about the business to third parties.

Importantly, the document gives you the right to recover costs if the seller suddenly
decides to pull out of the deal.

The heads of agreement are only partially legally binding, e.g. the exclusivity period or
confidentiality terms discussed above. But the price of the business or the completion
date, or whether you actually want to complete the deal, is not legally binding. You can
still walk away, even if you’ve signed heads of agreement.
See them as laying down the foundation of the deal, setting the parameters for it. They
are designed to give comfort to both the buyer and seller.

At this stage you will be employing professionals, such as lawyers or accountants. Make
sure they have actual experience of buying and selling a business. Your family solicitor
or current accountant may not be the right professional.

With heads of agreement a timetable will be drawn up. Detailed negotiations with finance
providers will be taking place and information about when and how the money will be
made available will be written into the heads of agreement.

Step Eight – Due diligence

This is the official due diligence undertaken by professionals to make sure that
everything is as it should be. It may include commercial due diligence to assess the
business itself, legal due diligence to look at the contracts of the business, and financial
due diligence to assess the tax position.

Depending on the nature of the business you’re buying you may not need a complex
assessment. For example, the due diligence involved in buying a post office may only be
one or two days of your accountants' and lawyers' time. If you were buying a multi-
million pound software company you would probably need a team of lawyers and
accountants working over a period of many days and perhaps weeks. However, in each
case, the principle remains the same – to make sure that the buyer is 100% sure of the
business he or she is buying.

Step Nine – Sale and purchase agreement

This legal document will contain the terms and conditions of the acquisition and the
rights and obligations of the parties involved.

Apart from the price, and when and how the purchase will be financed, it will also
contain more detailed clauses. For example, you may put in a restrictive covenant
preventing the seller from setting up a new business that will directly compete with you.

Step Ten – Completion

Congratulations. You’ve signed all the forms and documents and the business is now
yours. On average it can take up to six months to go through this 10-step process but if
you get it right – and that means making sure you know as much about the business as
possible before you buy it – then the rewards can be considerable.

Throughout the process you should always be prepared to walk away. However
expensive or painful it might be to do so – both the pain and expense will pale into
comparison if you go ahead and buy the wrong business. It could be the costliest mistake
you’ll ever make.
Many thousands of people buy businesses every year and for many it is the start of a
fulfilling and liberating chapter in their lives. You will need a measure of good fortune,
determination, organisation and a good accountant. And when it gets tough and you have
moments of doubt just remember how good it will feel to be your own boss, to be the
master of your own ship.

There is possibly no greater freedom than to be in control of your own, profitable and
successful business. Independence is the ultimate happiness.

4. a. Suppose you need to conduct a small marketing research study in your

neighborhood regarding the purchase and use of detergent powders. What will be
your approach in the process?

Quality Assurance
whether it is detergent powder, dish wash bar or toilet cleaner, the products should give
best after wash result. It should have high quality detergent material which ensures a
complete hygienic wash. The detergents should not simply make the accessories clean
and shining but also make those free from all kind of germs. Should be checked with
highly trained experts for best quality.

Skin Friendly
the detergent products used should be very high quality ingredients. When these products
come in the contact with water they produce mild suds that are not harmful to your
delicate skin. One doesn’t need to use gloves while washing your dishes or your clothes.

Best Fragrance
It should be of fine aromatic compound products which enhance the fragrance of your
accessories. It washes out any kind of staled smell very easily. The products should be
available in various beautiful fragrances which leave a long lasting effect.

The Farmer's Market

The farmer's market is a great place to get your business started. Before we ever dreamed
of making a soap nuts website, we began selling in the farmer's market.

Local Stores
Quite often local stores are looking for unique products that not too many people have
heard of. If you can establish yourself in your community as the local wholesale soap
nuts supplier, you will sell bulk quantities of soap nuts.

The products should be introduced in Jammu & Kashmir; they have been successfully
catering in the market of other states as well. The product supply system is also very
efficient. Owing to the constant market research of our R & D experts and the feed back
of our customers, we make constant improvement in our products and the process is
everlasting.

Marketing anything is easier if you can find people who want to buy whatever you're
selling. Soap marketing is easy because so many people are interested in special soap
products. Produce a special product and it will generate interest. Now how is the best way
to start?

If you're producing a handmade soap, you can sell your product dozens of ways. If you're
producing just small volumes, you will profit more by selling at something higher than
wholesale prices. That means you need to find the end user and sell direct to the final
customer. Otherwise your margins may be too narrow to really generate much profit.

You can find the final customer several ways. One way is to sell from your own shop, but
that requires either a large investment or on-going rent. Either way is dangerous for a
small scale venture. What about selling in a mall from a kiosk? That's a way to contact
many people, but maybe not that many. Plus you still face stiff rents plus the cost of the
display.

Another popular soap marketing method is selling at craft shows. Craft shows can be part
of many different events including fairs, festivals and shows of all kinds. The point is
there are crowds of people there to look and buy from a gathering of crafted things. The
beauty of marketing soap like that is you can sell a lot of products in a short time.

Not only is it an efficient way to move product, it provides leads for future sales. Who
better to make future offers to than people who have already bought from you? Include
sales material with each craft show order and some people will reorder from you. If you
keep customer contact information, you can mail material to your customers. Mail out a
little catalog offering to your customer list and orders will come right back at you.

Soap marketing using craft shows as the main sales tool is a fast way to build a business.
If you sell a really quality product, your customers are the base for an on-going business.
You can truly convert soap to cash with your customers' help.

Another beauty of craft shows is the follow up sales. You can build a customer list of
people who probably would respond to a mailing of future offers. This is very valuable.
A mailing list together with a brochure and a little catalog could quickly build a little
business where you can just ship out orders without going anywhere. As long as you
provide your customers with your address and phone number, you'll continue to get
orders.

There are huge numbers of little gift shops and businesses out there just looking for
unusual items to market. If you can sell at a discount to a retail price, these businesses
will order in larger quantities if you produce enough for wholesale orders.

The options for marketing soap are many. You can market direct to spas, guest houses,
bed and breakfasts with customer labels. You can sell from a website. Team up with a
gift basket seller.
b. As a consumer, what factors will you consider when you have to buy a laptop?
How will you arrive at a decision whether or not to buy a particular brand? Once
you have selected a brand, identify the various marketing P’s for that brand.

Weight and size

Weight: Most laptops weigh between 1 - 2 kgs. (Some heavier, some even
lighter!) When you're buying your laptop, ask yourself if you'll be taking it
outside your house often. If the answer is yes, you'll want to buy a thinner, lighter
laptop that will fit into your bag or briefcase.

On the other hand, if your laptop is going to stay in your room most of the time,
you might want to consider investing in a laptop that has more features; it'll be
bulkier, but it will be packed with each and everything you need.

Size: The most common screen sizes on laptops are 12.1, 13.3, and 14.4 inches
(although some really tiny laptops have screens that are as small as 8.4 inches).
Again, a tiny screen is appropriate for frequent travelers, but it'd be ideal to have
a larger screen if it’s convenient and you do not have to move around much.

Input devices

Instead of a hand-driven mouse, laptops come with other more cumbersome

"input devices" for navigating a cursor around the screen. You have to get used to
them. Hard-core gaming with these devices might be a little problematic. The
kinds of devices that come with laptops are:

Touchpad: A touchpad is a square-shaped surface located below the space bar of

a laptop keyboard. It is touch-sensitive and you navigate the screen by moving
your finger around the box, as if you were drawing. The majority of laptops have
a touchpad as their input device. A touchpad can be a bit tough to get used to
(you have to be careful not to let your thumb fall on it while typing, or it'll move
the cursor), but they work quite nicely.

Pointing stick or rubberized nipple: This input device is a tiny rubber dot that
sticks out of the keyboard right between the G, H, and B keys, and it responds to
pressure from your index finger. So you navigate the cursor by applying pressure
in the direction you want the arrow to go (like a joystick). Sounds easy, but most
people find nipples very frustrating to use - the slightest touch causes the arrow to
go flying across the screen.

Batteries

Batteries act like your laptops in-built UPS (Un-interrupted power supply!). You
can charge your laptop and then you don’t need a plug point to use it. It will run
on battery for a few hours. However, it is important that you check up how many
hours your battery will run. Some batteries last long. Some don’t. You want a
battery that lasts the longest and is still in your budget!

There are three main types of batteries

Li+: Most people get Lithium-ion (Li+) batteries. These batteries range in quality;
batteries with a high mill ampere and high voltage measurements are best. These are
generally good, safe and secure.

NiMH: If you want something cheap, a nickel metal-hydride (NiMH) battery will do.
However, be aware that they'll require you to recharge them every hour or so.

NiCad: This probably won't be an option, but if a dealer does try to sell you a nickel
cadmium (NiCad) battery, run away. NiCads are the worst batteries because of their
requirements for constant recharging.

However, all this may not be true in the near future. Technology is changing. Things are
getting better. So, if you are reading all this many years after it has been published, you
might want to check up on the latest developments in the battery world.

Display

There are two types of displays (that is, screen images) to choose between: active-matrix
(a.k.a. thin-film transistor or TFT) and passive-matrix (or dual-scan).

Active-Matrix (TFT): Go for an active-matrix display if you've got enough cash. It'll be
worth it. Pictures come out sharper and moving images play out smoother. In fact,
nowadays most laptops come with active-matrix displays because they're so commonly
preferred.

Passive-Matrix (Dual-Scan): This is the older and cheaper display. Images that run on
this display react more slowly. It's not that great, but it’s cheap. If you need a laptop
purely for word processing, or excel or accounts, this kind of display should be good
enough. If you want your laptop for hard-core gamming and making 3d animations, then
this may not be a good idea.

To figure out what type of display you're dealing with on a laptop, move the cursor very
quickly across the screen. If the cursor disappears while moving, the display is passive-
matrix, and if you can keep your eye on it, it's active.

Other things i would look out for

Keyboard: All laptops have cramped keyboards, but at least try to find a laptop with a
keyboard with which you can comfortably type. Also, consider getting a spill-resistant
keyboard if you have kids or work in a “spill” type environment.
Durability: If you plan on taking your laptop just about everywhere, you might want to
consider a model with shock-resistant hard drive mounts. These are specifically designed
to protect your laptop from bumpy rides and crashes.
Your Compatibility: If possible, “test-drive” a laptop before purchasing it. A laptop is
different from a computer. In a computer if you don’t like your mouse or cd-rom drive
you can replace it. In a laptop that is not possible. Once you buy it, you either keep the
complete piece or you throw away the complete piece. (Please don’t throw it away. Give
it to me!) It is hard to replace an annoying keyboard, an irritating touch pad device, or a
poor display. So make sure that you're okay with your laptop by playing around with it.
Having seen all the laptop specific things you have to worry about, let us look at other
things you have to worry about. Basic computer things you have to worry about while
buying any computer.

Use of the Laptop?

If you want the laptop for simple emailing or word processing, you're obviously not
interested in a machine with the best processor and 4GB of RAM.
If you want the laptop for portability, you'd go for an ultra portable rather than a rugged,
bulky model. If you need it for video editing, processing power becomes extremely
important - plus you'll likely need a Fire wire port too.
So it's critical to consider the intended usage of the laptop before deciding which model
to buy.

Bigger Equals More Rugged

If you are considering a rugged laptop as a purchase choice, then a heavier machine is
almost certainly your best bet. A small system with tightly integrated components is
likely to break apart compared to a bulkier unit with room for extra bracing.
Add to the the rugged exterior, and you have a wonderful winner of a laptop here. Last I
checked this unit was going for about $1500.

Transreflective Versus Matted

This point is important. Many laptops these days come with transreflective screens which
are glossy in nature. Some folks don't like that (myself included), particularly if the
laptop is usef for business / professional settings. In those cases, you'd want a matted or
anti-glare screen.

Need Extended Warranty

Extended warranty is usually considered a 'moneymaker' for the seller. You need to think
whether you really need that. For individual owners, there is a comfort of knowing if the
laptop breaks early in its life, you will get a new one replacing it. However, the flip side
is that the laptop functions perfectly fine for many years - that dilutes the advantage of
your extended warranty.
5 a. What are the features of Business markets? How are they different from
consumer markets?

Features of Business Markets

Recently Acquia solicited some feedback from us about what kind of features we though
would be useful to small businesses for their upcoming product, code named "Acquia
Gardens". While we typically only work with small businesses with a social mission, we
often do hear from businesses looking for web development work. In addition, I feel I
have a pretty good beat on what small businesses need for a web presence given my
regular attendance at the Seattle Drupal User Group (SeaDUG), Drupal Camps, and being
"that guy" that my family and friends always refer to people who need websites. After
responding to the inquiry, I though this would be a good topic for the blog, and to invite
some other suggestions.

1. Their Location
2. Their Hours of Operation
3. Contact Information

• About: Information about the business or organization, and then also bios or profiles
of the key people or staff, like the founder of the company, who are they, their story,
and a picture.
• Offering: What products or services do they offer? A description of each, possibly a
picture, and link to examples of these in their portfolio (see below)
• Portfolio: Examples of their work, or successes, or ongoing projects. This could be
complimented with or supplanted by testimonials.
• News Room: articles and accolades, and/or links to them, along with the ability to
attach a scanned copy. Think of this as the wall of clippings hanging next to the register,
or the "as seen on [the local news]". For non profit orgs, they often ask for a place to put
press releases. I am not a big fan of press releases. I think they are a bit of a vestige of
the past, especially for most organizations, posting them on the web is fine and all, and
it can certainly help for SEO, but you really need to file those releases with something
like PR Newswire. Your audience probably doesn't want to read through a dry press
release, but they would read a blog. What is the difference? Both are content, and both
can talk about a new product, service or initiative, but the tone of the blog entry is much
less formal and much more authentic (or at least it should be -- if your blogs read like
press releases you are blogging wrong).
• Links: Links to where you can buy a product, or where else you can find the
company or organization on the web: Twitter, YouTube, Facebook, LinkedIn, etc...
 • Photo Gallery: the ability to post pictures, whether it is of happy customers, a
company's work (like an architect or interior designer, or landscaper... this stuff is also
part of the portfolio above), business owner with local elected officials, or tossing out
the first pitch at a little league game. This functionality could be offloaded to Flickr, for
example, but small organizations don't have the time to manage many things when it
comes to the website, so giving them one place for it all is probably better, as long as it
is easy.
• Calendar: the ability to post upcoming events, and also show past events. Events
should have information not just about start and end times, but also locations, and any
costs associated, as well as the ability to add an image (either before, like a flyer or
advertisement, or after)
• Blog: I believe that even small businesses should be blogging. It is a way to build up
a loyal customer base (tell them how things are going with the business, link to
interesting articles, announce special promotions, or new products) and to increase
organic traffic via search engines. But a blog should really only be a part of the site if
the company or organization can commit the resources to regularly blog, which I would
consider weekly or more frequently than that.

So all that was really "content" oriented features. There are also true functionality
oriented features that users look for and at a minimum they include:

• Contact: ability for site visitors to contact someone via email, and/or by phone.
I've seen some sites that are clearly built with blogging software jerry-rig commenting
for contacting, and that is just lame. A contact form is essential. Put some spam
blocking on it too.
• Send to Friend & Share: Send to friend functionality used to be all you needed,
but now, making it easy for a site visitor to post the site or page to Facebook, Twitter,
Google Book Marks, Delicious, etc... is crucial.
• Printer Friendly Pages: I think this is less important these days, but since it is
easy to provide, a printer friendly button, or PDF this page option is nice.The last bit,
which is really specialized depending on the business or non-profit has to do with
transactions:
• Email Signup: let users signup for email updates or special offers
• E-commerce: I'm not even going to go there because there are so many variables,
but if you are going to think about e-commerce then you better be sure the revenues
justify the expense of implementing it.
• Donations: this one is for non-profits, again, it is specialized and important, but
really requires much more planning and requirements gathering. Again, be sure the
revenues justify the expense of the functionality.
On the "back end" creating all of this content should be easy. Page titles and urls should
be automatically configured for SEO benefits without requiring much additional
configuration from the site owner. Spam protection should be built in and easy to
maintain, especially if any kind of commenting is allowed. Automated link checking to
make sure that all the links on the site work, and if they don't the site owner is notified of
the problem and can correct it, Google Webmaster tools can be used for this, though it is
not automated. Google Analytics or a comparable web analytics package to provide
information on traffic and visitor behavior is also important for any site.

For small business and small non profits, its important to keep it simple, both in terms of
features and functionality, and design. With small budgets these organizations probably
can't afford fancy design or implementing it, so sticking with clean, user friendly visual
and information design is key. Of course it should be easy to change some colors and add
in a logo, move things around and such, but there is definitely a line that should not be
crossed. Most site visitors are not going to remember design subtleties; they are going to
remember if they could find the information they were looking for easily. (Read Steve
Krug's don’t Make Me Think if you don't believe me on this one.)

You'll notice that nothing I have listed above is particularly complicated. Most of the
functionality and features is easily achievable through existing Drupal modules and some
configuration. With the introduction of the Features module, much of the configuration
could be reduced to "features" that can just be turned on or off depending on the client.

The other thing to mention is that all of this functionality is also basically available
through an amalgam of free or nearly free web services. Stitching together Tumblr,
Blogger, Wordpress or event Google Sites with Google docs (for forms) and Google
calendar, Flickr or Picasa for images, and Google groups, or Constant Contact for mailing
lists could also achieve much of this. Granted the result would be a bit more
Frankenstein-ish, and putting it all together and maintaining it would be more of a
challenge, ultimately a more fragile solution and one that won't grow easily and
smoothly.

The key take-away is that the functionality has been commoditized, and when things are
commoditized, the price basically trends towards zero, especially in the digital age. The
value worth paying for is making this entire run smoothly and reliably and looks pretty.

If Acquia Gardens can deliver this, then it will be a fantastic product and service for
small businesses and organizations, and one that gives them a platform for growth
because it is built on Drupal.
b. List out the 5 important prerequisites of effective segmentation by giving suitable
examples.

Requisites of Effective Segmentation

To be useful, segmentation of market must exhibit some characteristics that are as
follows:

1. Measurable and Obtainable: The size, profile and other relevant characteristics of
the segment must be measurable and obtainable in terms of data. If the information is not
obtainable, no segmentation can be carried out. For example, Census of India provides
the data on migration and education level, but do not specifies how many of the migrated
employees are educated and if educated how many are there in white color jobs. If a
company wants to target white color employees who are migrated to particular city, will
not able to measure due to non availability of data.

2. Substantial: The segment should be large enough to be profitable. For consumer

markets, the small segment might disproportionably increase the cost and hence products
are priced too high. For example, when the cellular services started in India cost of the
incoming calls and outgoing calls were charged at Rs 12/minute. As the number of
subscribers grew, incoming calls became free. Further growth of subscribers resulted in
lowering tariffs to the lowest level in the world.

3. Accessible: The segment should be accessible through existing network of people at a

affordable cost. For example, Majority of the rural population still not able to access the
internet due to high cost and unavailability of connections and bandwidth.

4. Differentiable: The segments are different from each other and require different 4Ps
and programs. For example, Life Insurance Corporation of India needs separate
marketing programs to sell their insurance plans, unit plans, pension plans and group
schemes

5. Actionable: The segments which a company wishes to pursue must be actionable in

the sense that there should be sufficient finance, personnel, and capability to take them
all.

The process of Market segmentation:

1. Identify existing and future wants in the current market.
Marketers must examine the changing needs of the customer. This process provides
opportunity to examine whether customers are satisfied with the existing products or not.
If they are not satisfied what are the features they are looking at. It also helps to test the
innovative concepts that company has, commercially viable or not. For example, Titan,
wrist watch manufacturer from Tata group should analyze whether customer are satisfied
with the time accuracy in the watch. It should also analyze what are the other features
customer is looking in the watch. It may be style, calculator, voice recorder, jewels
studded or pulse monitor. In this case, time accuracy became existing want and other
features become future wants.

2. Examine the attributes that distinguish among segments.

In this process marketers should segregate different types of wants into homogeneous
categories. This may be on the basis of product features, lifestyle or behavior. For
example, Titan should analyze how style, calculator, voice recorder, jewels studded and
pulse monitor attribute are different. Is there any possibility of bringing some of these
features together? If yes what are the attributes that makes it homogeneous. To illustrate,
student community may be interested in style and also wants calculator.

3. Evaluate the proposed segment attractiveness on the basis of measurability,

accessibility, and size.
Segments selected in second steps should be evaluated against the requisites i.e.
measurability, accessibility, substantial, actionable and differentiability. Company’s
further programs will depend on the outcome of this process.
Titan should examine

a. How big this student segment who like style and also wants calculator?

b. How to get the data pertaining to these students?

c. Whether this segment is accessible to existing Titan showroom?

d. How this segment is different from current segments? If selected what value this
proposed segment adds to the company.

Example based segmentation process

The basic approach to tagging customers is to utilize historical retention data to make
predictions about active customers regarding:

 Whether they are at high risk of canceling their service

 Whether they are profitable to retain
 What retention tactics are likely to be most effective

The idea is to match up active customers with customers from historic retention data who
share similar attributes. Using the theory that “birds of a feather flock together”, the
approach is based on the assumption that active customers will have similar retention
outcomes as those of their comparable predecessors.

From a technical perspective, the segmentation process is commonly performed using a

combination of predictive analytics and cluster analysis.

Q. 6. Explain briefly the important bases for segmenting markets (2 marks) and
then identify the bases for these products by giving appropriate reasons:

i) A digital wrist watch (2 marks) ii) Sunglasses (2 marks)

iii) Air-cooler (2 marks) iv) Dictionary (2 marks)

Bases for Segmenting Markets

1) Geographic segmentation: Dividing the market into different geographical units such
as nations, states, regions, cities or neighborhoods. The company can operate in one or a
few Geographic areas or operate in all but pay attention to local variations. For example,
Bennett, Coleman and co Ltd divided markets according to geographical units for their
tabloids. In Bangalore the tabloid is known as Bangalore Mirror where as it is Mumbai
Mirror in Mumbai.

2) Demographic Segmentation: In demographic segmentation the market is divided into

groups on the basis of variable such as age, family size, family life-cycle, gender,
income, occupation, education, religion, race, generation, nationality and social class.
Demographic variables are the most popular bases for distinguishing customer groups.
One reason is that consumers’ wants, preferences and usage rates are often associated
with demographic variables. Demographic variables are easy to measure. Even when the
target market is described in non-demographic terms, the link back to demographic
characteristics is needed in order to estimate the size of the target market and the media
that should be used to reach it efficiently. Some of the demographic variables used are:

a) Age and Life-Cycle Stage: Consumers’ wants and abilities change with age. On the
basis of age, a market can be divided into four parts viz., children, young, adults and old.
For consumers of different age groups, different types of products are produced. For
instance, different types of ready-made garments are produced for consumers of different
age groups. A successful marketing manager should understand the age group for which
the product would be most suited and determine his marketing policy, pricing policy,
advertising policy etc., accordingly.

For example,
HUL launched ‘pepsodent kids’ for small children.

b) Gender: Gender segmentation has long been applied in clothing, hair-styling,

cosmetics and magazines. For example, Emami segmented its personal care business on
the basis of gender. For women, it is having Emami naturally fair, and for men it is fair
and handsome.

c) Income: Income segmentation is a long-standing practice in such product and service

categories as automobiles, clothing, cosmetics and travel. However, income does not
always predict the best customers for a given product.

For example,
Baja Auto limited, a leading automobile company, different bikes for different commuters.
For entry level (less than Rs35000) it is Bajaj CT 100, for mid segment (greater than
Rs35000 but less than Rs60000) it is pulsar and for the upper segment greater than Rs
60000 Avenger and Eliminator is positioned.

3) Psychographic Segmentation: In Psychographic segmentation, buyers are classified into

different groups on the basis of life-style or personality and values. People within the
same demographic group can exhibit very different psychographic profiles.

a) Life-style: People exhibit different life-styles and goods they consume express their
life-styles. Many companies seek opportunities in life-style segmentation. But life-style
segmentation does not always work.
One of the most used psychographic profiling schemes is called VALS TM. Developed by
SRI International, Inc., its first version groups the entire U.S. population into eight
groups, based on the identities they seek and implement via marketplace behaviors.
The Eight VALSTM Group: – Using the self-orientation and resources dimensions, VALS
defines eight segments of adult consumers who have different attitudes and exhibit
distinctive behavior and decision making patterns. These segments are Innovators
Thinkers, Achievers, Experience’s, Believers, Strivers, Makers and survivors
Innovators are successful, sophisticated, active, take-charge people with high self-esteem
and abundant resources. They are leaders in business and government and are interested
in growth, innovation, and change. They seek to develop, explore and express themselves
in a variety of ways, sometimes guided by Principle and sometimes by a desire to have an
effect or to make a change. They seek to develop, explore and express themselves in a
variety of ways, sometimes guided by principle and sometimes by a desire to have an
effect or to make a change. Image is important to them, not as evidence of status or
power but as an expression of their taste, independence, and character. They possess a
wide range of interests, are concerned with social issues, and show a cultivated taste for
the finer things in life.
Thinkers are mature, satisfied, comfortable, reflective people who value order,
knowledge, and responsibility. Most are well educated and in (or recently retired from)
professional occupations, content with their career, families, and tend to center around
the home. Thinkers have a moderate respect for the status quo institution, but they are
open minded to new ideas and social changes. They tend to base their decision on firmly
held principles and consequently appear calm and self-assured. Thinkers are
conservative, practical consumers, and the universal values of performance, service, and
price are more important than person values (e.g., social and emotional values).
Achievers are successful career ad work oriented people who like to feel in control of
their live. They value predictability and stability over risk. They are deeply committed to
work and family. Work provides them with a sense of duty, material rewards, and
prestige. Their social lives are centered on family, church, and career. Achievers live
conventional lives are phonically conservative, and respect authority and the status quo.
Image is important to them: they favor established prestige products and services that
demonstrate success to their peers.
Experiences are young, vital, enthusiastic, impulsive, and rebellious. They seek variety
and excitement, savoring the new, the offsets, and the risky. Still in the process of
formulating life values and patterns of behavior they quickly become enthusiastic about
new possibilities but are equally quick to cool. At this stage in their lives they are
politically uncommitted, uninformed, and highly ambivalent about what they believe.
Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities.
Experiences are avid consumer and spend much of their income on clothing, fast food,
music, movies and video.
Believers are conservative, conventional people with commitment to family, church,
community, and the nation. Living by a moral code is very important to them. As
consumers, Believers are conservative and predictable and favor American products and
established brands. Their income, education, and energy are modest but sufficient to meet
their needs.
Strivers seek motivation, self-definition and approval from the world around them. They
strive to find a secure place in life, unsure of themselves and low on economic, social,
and psychological resource. Strivers are concerned about the opinions and approval of
others. Money defines success for Strivers, who don’t have enough of it and often feel
that life has given them a raw deal. Strivers are impressed by possessions, but what they
wish to obtain is often beyond their reach.
Makers are practical people who have constructive skills and value self-sufficiency. They
live within a traditional context of family, practical work and physical recreation and
have little interest in what lies outside that context. Makers experience the world by
working in it, building a house, raising children, fixing a car, or canning vegetable and
have enough skill, income and energy to carry out their projects successfully. Makers are
politically conservative, suspicious of new ideas, respectful of government authority and
organized labor, but resentful of government intrusion on individual rights. They are
unimpressed by material possessions other than those with a partial or functional
pursuing pressed by martial possession other than those with a practical or functional
purpose, such as tools, utility vehicles, and fishing equipment.
Survivors tend to be chronically poor, ill-educated, low skilled, elderly and concerned
about their health. Preoccupied with the urgent needs of the present moment, they do not
show a strong self-orientation. Their chief concerns are for security and safety. Survivors
are cautious consumers. They represent a very modest market for most products and
services but they are loyal to favorite brands.

b) Personality: Marketers have used personality variables to segment the markets. They
endow their products with brand personality that corresponds to consumer personalities.

c) Social Class: It has a strong influence on preference in cars, clothing, home

furnishings, leisure activities, reading habits etc. Many companies design products and
services for specific social classes.

Behavioral Segmentation or Consumer Response Segmentation:

In behavioral segmentation, buyers are divided into groups on the basis of their
knowledge or attitude towards the use of, or response to a product. Some marketers
believe that behavioral variables are the best starting points for constructing market
segments.

a) Occasions: According to the occasions, buyers develop a need, purchase a product or

use a product. It can help firms expand product usage. A company can consider critical
life events to see whether they are accompanied by certain needs. For example, Tanishq a
TATA enterprise offers schemes and promotions for Akshaya Thrutiya (auspicious day to
purchase jewellary)

b) Benefits: Buyers can be classified according to the benefits they seek. For example,
Peter England, a madhura garment brand positioned its wrinkle free trousers on the basis
of benefits.

c) User Status: Markets can be segmented into non-users, potential users, first time users
and regular users of a product. Each market segment requires a different marketing
strategy. The company’s market position will also influence its focus. Market leaders will
focus on attracting potential users, whereas smaller firms will try to attract current users
away from the market leader. For example, Kishkinda resort near Hampi classifies its
customers according to this characteristic. Resort believes that locals falls into non- user
category, affluent class who comes to Hampi as potential users, foreigners as first time
users rich people near Hampi who frequently come there as regular users.

d) Usage Rate: Markets can be segmented into light, medium and heavy product users.
Heavy users are often a small percentage of the market but account for a high percentage
of total consumption. Marketers prefer to attract one heavy user rather than several light
users and they vary their promotional efforts accordingly.

For example, Alan Paine textile brand, offered 4 cotton trousers for Rs 999. Company is
interested in getting profit from sales volume.

e) Loyal Status: Consumers have varying degrees of loyalty to specific brands, storesand
other entities. Buyers can be divided into four groups according to brand loyalty status.
a) Hard-core Loyal: Consumers who buy one brand all the time. For example, customer
may be using only BSNL cellular services though there are different options available.

b) Split Loyal: Consumers who are loyal to two or three brands. For example, consumer
may go for tax savings schemes of post offices and Life Insurance Corporation of India

c) Shifting Loyal: Consumers who shift from one brand to another. For example,
consumer who used Nokia cell phones starts buying Sony- Ericsson mobiles.

d) Switchers: Consumers who show no loyalty to any brand. When there is a low
involvement and few significant perceived brand differences consumer try to purchase
different brands in the category. To illustrate, customer who bought cinthol wants to try
Medimix, Mysore sandal, Himalaya, Santoor, Chandrika/ etc…
A company can identify its product’s strengths by studying its Hard-core Loyal. By
studying its Split Loyal, the company can pinpoint which brands are most competitive
with its own. By looking at customers who are shifting away from its brand, the company
can learn about its marketing weaknesses and attempt to correct them.

(f) Buyer-Readiness Stage: A market consists of people in different stages of readiness

to buy a product. Some are unaware of the product, some are aware, some are informed,
some are interested, some desire the product and some intend to buy. The relative number
makes a big difference in designing a marketing program. For example, People may be
aware of Aqua guard but don’t know much about it.

i) Bases for A digital wrist watch

Wrist Watches form an integral part of the personality of individuals in the present era.
Earlier seen as a luxury item, they are now witnessing a fundamental change in
perception, and are now gaining respect as an essential utility item. For the watch
industry, time seems in its favour what with the liberalization of the Indian market
coupled with the rising purchasing power of the young and consumerist Indians.
Indian watches market was for long dominated by public sector organisations like
Hindustan Machine Tools Ltd. (HMT) and Allwyn (also famous for its refrigerators once
upon a time!), and has now left the pioneers far behind or nowhere in market by private
sector enterprises like Titan, Sonata, Ajanta and Timex along with foreign entities
jostling for display space in the smallest of shops selling these products.
Before the establishment of HMT as the dominant player in the Indian markets initially,
the country was solely dependent on imports to meet the internal demand. However,
establishment of HMT as the leading player in the wrist watch segment in the 1960’s,
changed the scenario.
In post liberalization India, the market stood to witness intensive competition between
foreign and Indian manufacturers like Timex, Titan, Movado, Longines, Rado, Rolex,
Fréderique Constant, Mont Blanc, Swatch, and many others. Many watch makers have
made significant inroads in the industry and others are in the process of establishing
themselves, currently.
Besides this, buyers are extremely choosy about the brand and type of wrist watches they
wear. Being extremely brand conscious, their tastes have evolved over the years and have
gone beyond the realms of durability to choose in terms of aesthetics and elegance. Thus
it is a buyers market with multitude of designs that have entered and flooded the market
place.
The size of the watch market currently is estimated to be around 40 to 45 million pieces
annually. The organized sector alone contributes up to 30 percent of this figure, and the
rest of the demand is being met by the unorganised grey sector. This data is significant
indeed in view of the socio economic distribution of the Indian populace. More than 58
percent of the population is under twenty five and more than 80 percent of the population
is below 45 years of age.
In dollar terms, the estimated annual market size is around USD 195 million, despite the
fact that the penetration of watches is the lowest, compared globally. Looking into this
fact and the long standing Indian tradition of comparing watches with jewellery and other
traditional items, many watch companies are interested in setting up base in India. The
average growth in the size of the market is slated to be around 10 -15 percent per year.
A casual study of the watch market reveals that it is segmented on basis of multiple
proportions such as price, benefits and types of watches. The price of the watches is a
major motive in the minds of the customer. Accordingly, three segments can be identified
here, namely low priced, medium priced, and high priced watches.
The lower priced segment consists of watches priced less than INR 500; the medium
price range consists of watches in the INR 500-1500 range and the high priced watches
come in the INR 1500 upwards range. There are other higher categories as well such as
the premium and luxury range, but they appeal to only a small category of the watch
market in India.
Many customers prefer mechanical and automatic watches, while others prefer quartz
watches. Newer segments are also on rise such as ladies watches, children’s watches and
gent’s watches. Customers usually base their preferences and buying decisions on a
variety of factors like price, durability, utility, aesthetic appeal and brand name. A
combination of all these points ultimately forms the customer’s buying decision that
translates into the purchase of a watch.
The retail sector has just begun to boom in India. Since the early 1990’s, Indian
customers are relying more on departmental stores and shopping malls to purchase their
wants and needs. This has come as a boon for watch manufacturers and dealers, who are
now looking forward to utilise these new outlets to reach out to the Indian masses. Watch
manufacturers are looking at a suitable mix to market their products ranging from
exclusive retail outlets to display sections in malls and large departmental stores.
In the end, though India is still considered to be a difficult market to penetrate, due to
reasons like price sensitiveness and its largely unorganised sector. However, with the
right planning and the right partners and experienced collaborators, it is expected that
both international and domestic watch manufacturers will do well in the Indian markets.

ii) Sunglasses
The worldwide eyewear segment is considered to be a part of the overall Retail Trade
Sector.

Players within the industry retail a variety of optical merchandise, which includes
prescription eyewear, such as glasses, contact lenses and fashion eyewear like
sunglasses.

The eyewear retail market has been growing at a low- to midsingle-digit average annual
rate over the last few years.

The optical segment of the market has also been growing at a similar rate during this
period. However, the sunglasses / sunwear segment of the market has been growing at a
midsingle-digit average annual rate (in both dollars and units), with the premium-priced
segment growing at more than twice the rate of the rest of the market. Growth in the
sunglasses segment is driven by increasing awareness of both the useful benefits (i.e., eye
protection) and trendy appeal of these accessories, the latter of which also contributes to
shorter replacement cycles as styles changes frequently and growing occurrence of
buying multiple sunglasses for different occasions. The report focuses on the global
eyewear industry – its size, growth rate, trends, growth drivers, etc.

The U.S eyewear market has been covered separately in the report which includes data on
the U.S sunwear market.

It also covers a separate section on brand portfolio of different eyewear manufacturers /

retailers.

The report profiles most of the major industry players, including their financial
information, SWOT analysis and key business strategies.

iii) Air-cooler

On the branded and grey market size, he said the brand segment currently sells three lakh
pieces per annum, while the grey market sells 10 lakh pieces per annum. "The last few
years have seen the branded segment eating into the unorganised market," Mr. Bakeri
said.

The branded cooler market is largest in Maharashtra, followed by Andhra Pradesh and
Uttar Pradesh. "We sell well in Kerala, Mumbai and Chennai," he said. In Northern India,
unbranded coolers sell more.
On whether the squeeze in air-conditioner pricing had impacted the cooler market
adversely, he said, "Although the AC may have become cheaper, it still remains an
expensive product."

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Product/Services
Gas heater installation and maintenance
Ventilation equipment installation and maintenance
Installation of heating/ventilation ducts
Building automation product installation and
maintenance
Chilling plants installation and maintenance
Electrical and hydraulic components installation and
maintenance

iv) Dictionary
Dictionary is derived from the word "diction" which means style. You can take help from
a dictionary in finding meanings of difficult words of any language. If you want to learn
English, you can learn difficult words from it. This will help you improve your English a
lot. If you want to search a word's meaning in a dictionary, just see the first letter by
which that word starts. Then look for the first three letters of that word. In this way, you
will find the meaning of that word.

Dictionary is a simple tool which helps us to pronounce, respell and the grammars we
need to collaborate within in a communication. This book gives meaning to that word
which cannot be understood or it has another deeper meaning of the given word. It also
teaches the reader on the proper syllabication and pronunciation of the word It also give
the reader on how the words in a sentence used. English is the world's official language,
so it is important to learn it so that we could communicate with each other dictionaries
are important for a persons learning. Dictionaries are used for words or phrases you don't
know and you want to know the meaning/s.

It is easy to use a dictionary, just find the first letter of the word you want to know and
search for it page by page until you spot the word/s or phrases, and read its meaning.