INDIAN INSTITUTE OF MANAGEMENT JAMMU

Mid Term Examination

Term I
(Academic Year 2020-21)

Program: MBA (Batch 2020-22) Term I

Exam Type: Open Book

Course: Marketing Management-1 Max Marks:30

Date: Duration:2 hrs

Instructions: Do as directed. The numbers in the bracket at the end of the Question indicate the marks

1. Suggest how “Kitu Restaurant” should respond to the situation (10 marks)

There is a small restaurant named as Kitu Restaurant in front of a newly set up University campus.
Kitu, the owner of the restaurant was earlier selling idli, bada and samosa at the same place when
the University was a small Engineering college around 20 years back. Gradually the Engineering
college has become a big university with number of professional programmes and new courses.
Now the campus has student strength close to 10 thousand and around 5 thousand students stay in
hostel on campus. In due course Kitu has acquired the adjacent land and opened a decent restaurant
for the university students, staff and other people going through that road. There are many stores
and eateries have come around, but no other restaurant till date. Kitu serves best quality food
through Thali (Plate) system and makes roughly 3 rupees per plate while selling food at 35 rupees
per thali. Roughly 700-800 thali is sold during lunch and around 400-500 during dinner throughout
year except during summer vacation when the sale drops drastically. In June 2019, another person
named Dillip opened a new restaurant besides Kitu Restaurant and looks like a perfect replica of
Kitu Restaurant. Dillip almost follows the same menu in thali and prepares as good quality food as
Kitu but sales per thali at 32 rupees. Kitu is quite worried as his turn over has dropped by almost
40% in last couple of months compared to same time previous year and he doesn’t find Dillip
Restaurant food and service quality any inferior to his. Kitu is a God-fearing ethical person and
finds that there is no way of reducing his operating cost any further. Food delivery of any sort inside
campus or carrying cooked food to hostel room or class is not allowed by the administration.

2. Discuss your learnings from the following cases discussed in the class and the applicability of those
learning in marketing strategy (10 marks)
A. Starbucks: Delivering Customer Service
B. Rosewood Resorts: Branding to Increase Customer Profitability and Lifetime Value

3. Analyze the case given in Annexure-1, as per your understanding and suggest corrective action to
improve business (10 marks)

Good luck

Page 1 of 3
Annexure-I

When entrepreneur Eric Hudson started Preserve Products in 1996, people thought he was crazy. “When
we first started the company, a lot of people looked at us like we had three heads, saying, ‘Recycled
materials are for ashtrays. Recycled materials are for pen holders,’” Hudson said. However, Hudson
recognized that cultural values were beginning to shift toward green products. He founded Preserve
Products, with the mission “to deliver consumer products that offer great looking design, high performance
and are better for the environment than alternative products.” The first Preserve product was its recyclable
toothbrush. The toothbrush has become one of the organization’s more popular products and even had an
appearance as Will Ferrell’s toothbrush in the movie Stranger than Fiction. More than 15 years later, the
green revolution is in full swing and Preserve has become a multi-million-dollar company with products
available in over a dozen countries. Preserve takes plastics from products at the end of their life cycle and
recycles them to create consumer goods such as toothbrushes, razors, kitchenware, mixing bowls, and
storage containers. As green products become more mainstream, Preserve has seen an increase in demand
from both retailers and consumers. Preserve products can now be found in Wegman’s, Whole Foods, Trader
Joe’s, and Target.
In addition to being recyclable, Preserve products are dishwasher safe and are manufactured in the United
States. The company also guarantees that no products have been tested on animals and that it never uses
ingredients that could potentially harm consumers. Preserve works to ensure that its products are well-
designed and will last for a long time. In 2010 the company won the Spark International Design Silver
Award for responsible packaging.
Being a green company is not easy, particularly because many consumers believe that green products are
costlier than traditional products. Economic forces like the latest recession have made the cost of goods an
even greater concern for consumers. Additionally, greenwashing, or marketing products as being more
environmentally-friendly than they really are, is also a problem for Preserve because then consumers
become more cautious of trusting green marketing claims. As a result, Preserve works hard to deliver price-
competitive, trustworthy products through legitimate retailers.
In order to make its business work, Preserve forms partnerships with both organizations and consumers to
get the materials it needs. It has strong relationships with companies like Brita and Seventh Generation,
which send their waste to preserve to be recycled into new products. For instance, Preserve uses the plastic
from Stonyfield Farm yogurt cups to create the handles of its recycled toothbrush. Support from these
companies is crucial for Preserve to maintain its competitive advantage as a company that offers quality
green products.
Additionally, Preserve has been able to use consumers as suppliers. The company encourages their
customers to send them used products when they reach the end of their life cycles rather than throwing them
into landfills. In 2010 Preserve introduced the Mail-Back package at Whole Foods and Target for its
recycled toothbrushes. The package not only protects the toothbrush but also allows consumers to use the
package as a mailer to send it back to the company when they are finished with the product. Preserve can
therefore reduce costs and widen its distribution range by incorporating consumers into the process. “They
can facilitate being part of our supply chain,” Hudson said.
Despite its advantages, Preserve must constantly engage in environmental scanning and analysis to
effectively respond to changing environmental forces. For instance, Preserve must try to understand
consumer perceptions toward green products. One way Preserve achieves this is by remaining in constant
dialogue with its customers. “We’ve sought to have a very innovative approach of really reaching out to
our advocates,” Hudson said. Preserve uses personal e-mails and electronic newsletters to answer concerns
and update consumers on recent events.
Preserve also must constantly analyze the competition. Brand competitors include not only other green
consumer product firms but also big brand companies that sell more traditional products. Because the
company operates in an environment of monopolistic competition, Preserve strives to differentiate its
products and communicate their benefits to relevant stakeholders. Its recent initiative is to work with

Page 2 of 3
partners to recycle #5 plastic, which makes up 25 percent of plastic waste but is one of the least-recycled
types of plastic.
Preserve has come far in its short history, witnessing a sociocultural shift from little stakeholder concern
for green products to strong stakeholder support. As the company continues to research innovative
approaches toward reusing products and researching consumers, Preserve appears well poised to compete
in the green marketplace.

Page 3 of 3