1

A
PROJECT REPORT
ON
“MARKETING STRATEGIES OF
HP (Hewlett Packard) “

SUBMITTED BY: UNDER GUIDANCE OF:

Ritesh
REG NO: - 1828100151 MS. SAVNEET KAUR
MBA (3RD SEMESTER)

BHARATI VIDYAPEETH DEEMED UNIVERSITY

INSTITUTE OF MANAGEMENT & RESEARCH,
NEW DELHI
An ISO 9001:2008 Certified Institute
NAAC Accredited Grade “A” University
CRISIL Grading – MBA Programme
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ACKNOWLEDGEMENT

This report has been made possible through direct and indirect support of various people for
whom I wish to express my appreciation and gratitude.

I also owe my sincere and whole hearted thanks to MS. SAVNEET KAUR for constantly
guiding me and tackling variety of hurdles with implicit patience throughout my research project
and whose deep involvement and interest in the project infused in me great inspiration and
confidence in taking up this study in right direction. Without his overall guidance and help the
project may not have seen to be completed.
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TABLE OF CONTENT/INDEX

PARTICULARS PAGE
NO.
ACKNOWLEDGEMENT 2

CHAPTER-1 INTRODUCTION 4

CHAPTER-2 RESEARCH METHODOLOGY 26

CHAPTER-3 CONCEPTUAL DISCUSSION 33

CHAPTER-4 DATA ANALYSIS 77

CHAPTER-5 FINDINGS & CONCLUSION 85

CHAPTER-6 SUGGESTIONS 88

BIBLIOGRAPHY 90

QUESTIONNAIRE 91
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CHAPTER-1

INTRODUCTION TO THE TOPIC

About HP:
HP is a technology company that operates in more than 170 countries around the
world. It explores how technology and services can help people and companies
address their problems and challenges, and realize their possibilities, aspirations
and dreams. It applies new thinking and ideas to create more simple, valuable and
trusted experiences with technology, continuously improving the way our
customers live and work.
No other company offers as complete a technology product portfolio as HP. It
provides infrastructure and business offerings that span from handheld some of
the world's most powerful supercomputer installations. It offers consumers a wide
range of products and services from digital photography to digital entertainment
and from computing to home printing. This comprehensive portfolio helps us
match the right products, services and solutions to our customer's specific needs.

MISSION
Hp’s mission is to invent technologies and services that drive business values,
create social benefit and improve the lives of customers – with a focus on affecting
the greatest number of people possible.
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HP FAST FACTS

1. HP was founded in1939.

2. Corporate headquarters are in Palo Alto, California.
3. Meg Whitman is president and CEO.
4. HP is the world’s largest IT companies, with revenue totaling $127.2 billion
for fiscal 2011.
5. Hp’s 2011 fortune 500 ranking is no. 11.
6. HP serves more than one billion customers in more than 170 countries on six
continents.
7. HP has approximately 324,600 employees worldwide.
8. Hp’s revenue for the four fiscal quarters ended October 31, 2011: $127.2
billion.
9. HP dedicates $3.6 billion annually to its research and development of
products, solutions and new technologies.

TECHNOLOGY LEADERSHIP

HP’s three business group drives industry leadership in core technology areas:
1. The personal system group: business and consumers pc’s, mobiles
computing devices and workstations.
2. The imaging and printing group: inkjet, laser jet and commercial printing,
printing supplies, digital photography and entertainment.
3. The technology solutions group: business products including storage and
servers, EDS, managed services and software.
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CONTRIBUTION
Global citizenship encompasses our commitment to align our business goals
with our impact on society and the planet. It is one of our seven corporate
objectives, rooted in hp’s founding values and key to success. For more than
70 years, global citizenship has influenced how it runs our business, holding
us to higher standards of integrity, contribution and accountability in
everything it do.
It focuses our energies and expertise in five areas:
1. Ethics and compliances
2. Human right and labor practices
3. Environmental sustainability
4. Privacy
5. Social investment

Hp’s shared values

1. Passion for customers
It put our customers first in everything it does.

2. Trust and respect for individuals

It work together to create a culture of inclusion built on trust, respect and
dignity for all.

3. Achievement and contribution

It strives for excellence in all it does; each person's contribution is critical to
our success.

4. Results through teamwork

It effectively collaborates, always looking for more efficient ways to serve
our customers.
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5. Speed and agility

It is resourceful and adaptable, and we achieve results faster than our
competitors.

6. Meaningful innovation
It is the technology company that invents the useful and the significant.

HP’S CORPORATE OBJECTIVES:

1. Customers loyalty
It earns customers respect and loyalty by consistently providing the highest
quality and value.
2. Profit
It achieves sufficient profit to finance growth, create value for our
shareholders and achieve our corporate objectives.
3. Growth
It recognizes and seized opportunities for growth that builds upon our
strengths and competencies.
4. Market leadership
It leads in the marketplace by developing and delivering useful innovative
products, services and solutions.
5. Commitment to employees
It demonstrates our commitment to employees by promoting and rewarding
based on performance and by creating a work environment that reflects our
values.
6. Leadership capabilities
It develops leaders at all levels that achieve business results, exemplify our
values and lead us to grow and win.
7. Global citizenship
It fulfills our responsibilities to society by being an economic, intellectual
and social asset to each country and community where it does business.
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Global citizenship

Global citizenship is hp’s commitment to hold ourselves to a higher standard of

integrity, transparency and accountability. The values that have been present
since HP was founded in 1939 remain integral to our work today, helping us
balance our business goals with our impact on society and the planet. It has five
global citizenship priority areas: ethics and compliance, environmental
sustainability, human rights and labor practices, privacy and social investment.
Its efforts in these areas help differentiate hp, reduce costs and drive innovation
as they respond to growing market opportunities and stakeholders expectations.
They continue to focus on enriching people and communities around the world,
striving to be a force for positive and lasting change. At hp, practicing good
global citizenship includes supporting human and labor rights, making strategic
social investments- particularly to advance student achievement and entrepreneur
success and protecting the privacy of customers and employee information.

Serving enterprises
At hp, it continually explores how technology and services can create new and
better way for people to live, work and to transform their current play. Every day it
partner with our largest customer IT environment into business assets. It
recognizes that CIO’s are now business managers who specialize in technology. It
work hard to help them create more manageable IT environments that costs less to
operate their IT infrastructures, speeding access to information, enabling faster
communication between branch offices and headquarters or helping them deal with
obsolete IT equipments. HP solutions leverage our broad portfolio- from servers
and storage to software and services, imaging and printing, and personal
computing technology-to help companies drive growth, lower business risk, and
cut costs.
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DRIVING TECHNOLOGY TRANSFORMATION

With the volume of data today increasing faster than our abilities to capture and
use it, the industry is rapidly shifting to a model where everything can be delivered
as a service. People want instantaneous access to content and information that they
care about. Meeting this worldwide demand for information and rich digital
content will require dynamic, compelling services. The fundamental building
blocks of this model will be smarter, more intelligent networks, next generation
data centers; and perhaps most importantly, software that blinds all the disparate
elements together. Over the next five years, HP will invest $20 billion in research
& development. It believes that the power to propel the industry forward and
improve the ways our customers live and work.

HP Retains Leadership

2014 PC Shipments (Desktop PCs + 2015 PC Shipments (Desktop PCs + Notebook

Notebook PCs) PCs)

Vendor Market Share Vendor Market Share

Hewlett-Packard 15.6% Hewlett-Packard 18.2%

Dell 11.0% HCL Info systems 9.8%

HCL Info systems 9.6% Dell 9.7%

Acer 7.7% Acer 7.3%

Lenovo 6.6% Lenovo 4.7%

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IT in India over the Years:

1. In 1991, new economic policies were introduced.

2. Foreign multinationals such as Coca Cola, Mercedes, IBM, HP flooded into
3. India, eager to take advantage of the cheap professional labor and the
opening up of one of the world's biggest markets.
4. Adoption of Globalization and liberalization principles brought tremendous
success BPO, IT, ITES, Retail and Insurance sector, health sector, education.
5. IT sector showed the most rapid growth amongst all the sectors.
6. Today more than 500 major international companies have IT operations in
Bangalore alone.
7. Intel’s Indian development center made chips for computer which are
compatible with Microsoft‘s Operating System Vista.
8. Microsoft has established one of its 3 key centers in Bangalore other two
being in China and its HQ in New York.

MARKETING MIX

Marketing Mix
 
 
 
  Product Place
 
Promotion
Price

1. The First P =PRODUCT

 
Product is a key element in the market offering. Marketing mix planning being
with formulating to meet target customer’s need & wants. The customer will
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judge the offering by three basic elements features & quality, services mix

&quality & price appropriateness. Kotler said -A product is anything that can be offered
to a market to satisfy the wants or needs of the consumers. Products that are marketed
include physical goods, services, events, experience, persons, place, properties,
organizations, information‘s & ideas.
A firm does not sell only a product. It sells product benefits. Product is the most important
variable in the marketing mix of the firm. If the product is sound &easily acceptable
to the market if it satisfies seller’s need, consumer’s preference & is carefully fitted to the
needs & desires of the customers, sales success is assured. Hence, product is the center of
all marketing policies &decisions. The marketing planning begins with the product
& also ends with the product.
Company plans to increase their product range in the future. A brief description of
some products is as follows: -
Products Name:

1. Laptops, Notebook Computers & Tablet PCs

i. Everyday computing
Laptops for movies, music, photos and multitasking in your
home or home office

ii. Performance & entertainment

Laptops for cutting-edge entertainment and gaming

iii. Ultra – portable

Laptop computers or tablet PCs for on-the-go personal

productivity and connectivity

iv. Mini

Perfect companion PC to keep you connected while you

are on-the-go

1. Laptops for Business

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i. EliteBook laptops

Best in class, packed with features and functionality

ii. Compaq laptops

Advanced features for business

iii. ProBook laptops

Stylish and affordable for small business options

2. Other laptops
i. HP Pavilion Home Desktop PCs

a) Fitted with features that appeal to your whole family and yet flexible and
reliable in meeting all their needs.
b) Sleek in design; a stylish showpiece for the modern home however compact
the space, whatever the budget

ii. HP Pavilion Elite Home Desktop PCs

a) Fitted with features that appeal to your whole family and yet flexible and
reliable in meeting all their needs.
b) Sleek in design; a stylish showpiece for the modern home however compact
the space, whatever the budget.

3. Monitors

i. Home & Home Office monitors

ii. Business Monitors

4. Options & Accessories

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Keyboards, mice, memory, storage, speakers, headsets, webcams, cables,

gaming and other accessories for desktop computers.
i. Home & Home Office desktop accessories
ii. Business desktop accessories
iii. Extended service plans for Home & Home Office

5. Laser Printers, Inkjet Printers and Multifunction Printers

i. Color Printers
a) Inkjet printers
DeskJet, Office jet, and Business Inkjet printers

I. Home inkjet printers

II. Business inkjet printers

b) Color laser printers

Color laser printers with HP LaserJet performance

I. Home colour lasers

II. Business colour laser

c) Large-format printers

HP Design jet, Design jet Commercial and Scitex printers; HP Indigo presses

I. Design jet printers

II. Other graphic arts products

ii. Black & White Printers

1. Laser printers

HP LaserJet printers for high-speed, high-volume, high-quality

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Printing

I. Home laser printers

II. Business laser printers

6. Wireless printing

Enjoy the freedom to print from anywhere with HP's line of wireless printers.
Wireless allows greater mobility, no wires and shared printing. Many HP printers
have wireless printing built into the printer and HP offers an add-on to your
existing printer.
Live Wirelessly. Print Wirelessly.

2. THE SECOND P = PRICE

 
Sales are only income for any business concern. But price is the main factor which
affects the sale of the market. If the price is high, few buyers purchase and if the
price is low many buyers purchase. Therefore a sound pricing policy must be
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adopted to have maximum sale revenue. Moreover, it is only through proper

pricing policy the already laid down marketing objective and corporate goals could
be achieved. Price is the exchange value of a product or service always expressed
in tem of money. In other words, price of a product or service is what the seller
feels its worth on term of money, when offered to a buyer. To the customer, the
price is an agreement between seller & buyer concerning what each is to receive. The
buyer is interested in the price of the whole package consisting of physical product plus a
bundle of expectation and satisfaction. The consumer has numerous expectations
such as after sale service, replacement of parts, technical guidance & money other
benefits. However, to the seller, price is a source of revenue and a main
determinant of profit. To the seller, price is equivalent to the total product offering.
This offering includes a brand name, a package, product benefits, after sale service
and so on. We can define price as the -money of the product or service agreed upon in a
market transaction‖.
 So, Price in money = physical product + bundle of expectations

The Price Factor of PCs

India is a price-sensitive market. When the PC was launched in 1984, it cost well
over $4,450 here, and in the late 1980s, the price was around $2,220.
While the price was around $1,100 in the mid-90s, today, a MNC brand with
multimedia costs only around $761.
The Indian market has seen local assemblers stealing a march over their domestic
and multinational computer hardware rivals.
The Indian PC industry has also witnessed the rise and fall of many a domestic
brand. Prominent players who fell out include DCM-DP, PCL, Sterling and
Unicorp, though many Indian brands including HCL today account for nearly half
of the branded PC sales in the country.
The pricing adopted by HP India Pvt. Ltd. can describe under this subhead: -
Competitive pricing: - HP India Pvt. Ltd. adopted the method of pricing called
competitive pricing for their PCs. Under this policy, the price of HP PCs is fixed
according to the price of other competitor brand of the market & the price moves
accordingly.
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The price list of the some IT Products of HP India Pvt. Ltd. is as follows:
Desktop Price Model

HP (Hewlett-Packard) Touch Smart IQ504 Desktop $972.99

HP (Hewlett-Packard) Pavilion Elite m9550f Desktop $999.99

HP (Hewlett-Packard) Compaq Presario SR5710f Desktop $349.99

HP (Hewlett-Packard) TouchSmart IQ506 Desktop $799.96

HP (Hewlett-Packard) Pavilion a6750f Desktop $659.99

HP (Hewlett-Packard) Pavilion s3710t Desktop -

$379.99
Customizable
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HP (Hewlett-Packard) Touch smart IQ526 Desktop $1175.00

HP (Hewlett-Packard) Touch Smart IQ524 Desktop $979.95

HP (Hewlett-Packard) Firebird Voodoo DNA 802 Desktop $972.99

HP (Hewlett-Packard) Touch Smart IQ816 Desktop $1299.99

1. THE THIRD P – ‘PROMOTION’

Promotion is the process of making communication involving information,

persuasion and influence. Promotion has three specific purposes. It
communicates marketing information to the customers, users & retailers.
Promotion persuades and convinces the buyer & enters into this consumer
behaviour. Promotional efforts act as powerful tools of competition
providing of cutting edge of its entire marketing programmed. Promotion
has been defined as “the coordinated self-initiated effort to establish
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channel of information & persuasion to facilitate or faster the sale of goods

or services, or the acceptance of ideas of points of view.” It is a non-price
competition.
Broadly speaking, promotion means to push forward or to advance ideas in
such a way as to gain its acceptance & approval. It is an effort by the
marketer to inform and persuade buyer to accept, resell, recommend, or
use the article, services or ideas, which is being promoted. The promotional
activity always attempts to affect knowledge, attitude, preferences &
behaviour of recipient, i.e. buyers. The element of persuasion to accept
ideas, products, services etc., is the heart of promotion.
You may have the best product, package & so on. It may have a fair price.
But people will not buy your products, if they have never heard of it, and
they are simply unaware of its existence.
The market must communicate to his prospective buyer & provide them
adequate information in a persuasive language. People must know that the
right product is available at the right place & at the right price. This is the
job of promotion in marketing. In essence, promotion is the spark plug in
our marketing mix. It is said that:-
“Nothing until somebody promotes something”
Promotion can create & stimulate demand, capture demand from rivals and
maintain the demand of your products even against keen competition. It is
true that nothing can be sold & nothing can make money (except mint)
without means of promotion.

The communication & promotion mix includes four ingredients viz.

1. Sales promotion.
2. Advertising.
3. Publicity.
4. Personal selling.
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1. Sales promotion

Sales promotion is an important instrument in marketing to lubricate the

marketing efforts. Today, sales promotion is a necessity & not a luxury. It is
not expenditure, it is an investment, which can pay a rich dividends. It is an
integral part of marketing effort.
“In a specific sense, sales promotion includes those sales activities that
supplement both personal selling & advertising & coordinated them and
help to make them effective such as displays, shows and expositions,
demonstration and other nonrecurring selling effort not in a ordinary
routine. Sales promotion aims at stimulating the purchasing at the point of
sales & dealer’s effectiveness at the retail channel of distribution.

Sales promotion.
Company plans to follow two kinds of promotional tool for their products.
They are: -

(a) Dealers promotion

(b) Customers promotion

(a) Dealers promotion

To make a proper channel of distribution & to increase the market share of

the company, corporate plans to promote their dealer or retailers through
the various promotional strategies. Under which they provide a price off, a
straight discount off the list price. The offer encourages retailers as well as
distributors to buy a quantity or carry a new item.
As it is company provide allowances to the distributors for the carrying out
of the company’s brand. An advertising allowance compensates retailers
for advertising the company’s products.
Company also provides free goods to the distributors as the offer for taking
up extra goods or for carrying new products. In the extra company plans to
organize the industrial associations in the form of trade fairs & conventions
o stimulate the sale result of their intermediaries.
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(b) Customers promotion

Due to the proper attention towards the channel of intermediaries, company

is not able to give proper attention towards consumer’s promotion but they
arrange whole the method of local promotion for the awareness of the local
customers. As it is they also provides demonstration & gifts to the
customers shortly by which products of the company are able to create a
spec in the customer’s mind.

2. Advertising
The modern age is an era of competition. To withstand competition
manufactures have to think of new & unfamiliar uses for their products or
they have to find out new buyers for their products. The patent medicine
people were the first to prove what advertisement could do.
“Advertisement is the art of influencing human action’ the awakening for the
desire to possess & possess your product.”
“Advertisement consists of all the activities in presenting a group a non-
personal, oral or visual, openly sponsored message regarding a product,
services or idea.”

Advertising with the reference of HP

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At present time the chairman of HP give attention to make proper

distribution channel for their products. It is the company’s policy that firstly
they make proper distribution channel for their products by which any
customer either he/she will be belongs to rural area or belongs to urban
area got the product easily. After making proper distribution channels,
corporate plans to come through the media, because advertisement on
media requires heavy investment.
As far as advertisement is concerned HP provides claim to their respective
stockiest of the different districts of the state for the local awareness /
promotion as per required by the stockiest of the districts.
Local promotion includes Banners, Holdings, and Cable TV. Adz Installing,
Trade fairs, sponsorships etc. for the awareness of their products to the
local customers. Because of the company doesn’t come through the media
in present time i.e. why company bears all the expanses for the local
promotion as required by the distributors?

It is true, that it is not sufficient in today’s high competitive marketing

scenario, but after the attainments of the proper distribution channel
company definitely come through the media which is a powerful source of
demand generation in today’s tough marketing scenario & it is definitely
provides a strong consumer pull to the new products of the HP India Pvt.
Ltd.

3. Personal selling

A salesman is one who practices the profession of selling. One can learn a
lot about selling and salesmanship just by thinking about definition of
personal selling.
American marketing association defined salesmanship as ‘the process of
including and assisting a prospective buyer to buy a commodity or service
or to act favorably upon an idea that has commercial significance to the
seller.’
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E.F. Schumaker defined selling as ‘the process affecting the transfer, with a
profit to buyer & seller, of goods & services that gives such lasting
satisfaction that the buyer is predispose to come back to seller for more of
the same.’
Personal selling refers to oral presentation in conversation or more
prospective customers for the purpose of making sales.
Personal selling involves two-way communication, “a well defined problem
is half solved.” Due to seller buyer interaction, personal selling alone can
provide immediate feedback of information, which enables salesman to
understand properly the buyer’s mind, his problems, his needs & his
preferences.

Personal selling with the reference of HP India Pvt. Ltd.

As far as the HP India Pvt. Ltd. is concerned corporate plans the effective
medium of personal selling for their products. They provide full support to
the salesman for selling their products. Effective communication & facilities
motivate salesman to make a good relationship with the customers.
Corporate actually knows the importance of the phenomenon of the
personal selling I.e. why they tries to implement the ‘A-I-D-A-S’ formula of
personal selling. The brief description of this formula is as follows: -

A: - Attention – The ‘Attention’ of the customer.

I: - Interest -- Create an ‘Interest’.
D: - Desire -- Ignite the ‘Desire’ of the customer.
A: - Action -- Gaining an order.
S: - Satisfaction – Customer ‘Satisfaction’.

2. THE FOURTH ‘P’ - PLACE

Marketer has to ensure the availability of its products to the target

customers. If a product is not available to the target customers at the right
place, then he/she may shift to competitive products. So place decision
relates to:
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(i) Channel decision – what kind of distribution channels a company

adopts between plants & consumer.
(ii) Distribution channel policy – whatever to go for extensive or selective
or exclusive distribution.
(iii) Degree of selectivity among wholesalers & retailers.
(iv) Effort to get the cooperation of the trade.
(v) Physical distribution decision includes logistics, transportation,
warehousing, material handling, bulk packaging etc.

Meaning of channels of Distribution

Goods produced by the manufacturers must come to the knowledge of the
ultimate consumers. This is arranging by the sales promotion activities like
salesmanship & advertising. By mere knowledge, the prospective
consumers are not happy. The products must reach their hands for actual
use. Channels of distribution are paths through which products move from
the point of production to the point of consumption. Distribution channels
are also called Trade channels.

Distribution Channels of HP India Ltd.

State
Eastern Central Western

Distributors Distributors Distributors

Retailers Retailers Retailers

Customers Customers Customers

COMPETITORS
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Major Brands of Computers in India

HCL Info systems:

HCL Info systems Ltd is one of the pioneers in the Indian IT market, with its
origins in 1976. For over quarter of a century, we have developed and implemented
solutions for multiple market segments, across a range of technologies in India.
The country’s number one desktop brand had yet another great year selling
4.76 lakhs units. The company targeted aggressively the B and C class cities and
upped its distribution network. The significant milestones over the last year include
the launch of the low cost Ezeebee Pride that came with an attractive price tag of
Rs 12,990. It attacked all the buying segments with low cost processors like via to
industry standard P4 HT offerings. The aggression HCL showed in pricing its
product in a way kick-started the price war with brands like Acer, and vendors like
HP cutting down end-user price points. Another significant development for HCL
was its launch of the high-end home PC called Neo, complementing its Beanstalk
range. Neo was also the first desktop brand in India to come with Windows XP
Media Center OS. Meanwhile, on the Notebooks front, HCL is the exclusive
distributor of Toshiba in India whose volumes scaled to 20,000 units, compared to
last year’s 11,600 units. With Toshiba aligned to the
Higher end of the spectrum HCL was unable to tap the low and mid-end segments
of the portables. And to plug that, during the year the company made a low key
launch of its own brand of notebooks called eZeebee and Powerlite, which
summed up to 3,000 units during the fiscal. Meanwhile, the banking vertical did
buy aggressively with large mandates from SBI and other nationalized banks.
From the government side, nodal agencies like Tamil Nadu’s ELCOT also went for
large-scale installations. As a result of growing demand for its offerings, the
company is in the process of expanding its Pondicherry plant.

Acer Computer International Limited

Few IT companies offer the breadth and depth of products that Acer Group does.
Leveraging the vast collective technological resources available - Acer India (Pvt.)
 25

Ltd., was incorporated as a wholly owned subsidiary of Acer Computer

International Ltd. on 9th September 1999. Acer's mission in India is to translate the
Group's goal of making computer technology easier to use and more affordable - to
everyone in this country. With a focused customer-centric approach, Acer in India
is offering unmatched uptime for all its systems through a vast network of Service
points, innovative and user friendly functionality while continuously lowering
barriers that limit the access to the fruits of technology.

Compaq India:

The world’s largest seller of PCs entered India in 1994. Initially, the commercial
segment (large corporations, government, educational & research institutions) was
its main target segment. But with recession in the economy in mid 1990s and the
consequent slashing of IT budgets of corporate, it turned its attention to the home
segment. However, it soon realized that its PCs, although perceived well on
reliability and quality, were considered too expensive. The assemblers and Indian
brands were cornering a major chunk of the market. It slashed prices of its sub
brand Presario from Rs.65, 000 to Rs.50, 000 to penetrate into the price conscious
Indian households.

At the same time, Compaq is aggressively going after corporate segment by

offering a range of products tailored around services to meet specific needs. Its
merger with Digital Equipment further strengthened its position in the high-end
server market.

Wipro Limited:

Wipro intends to focus more on the lucrative services business in future. Already,
services accounts for more than half of its turnover. In contrast, the contribution of
systems business dropped from 43 per cent to 25 per cent.

It had a joint venture with Acer for marketing the Wipro-Acer brand of PCs.
However, they called it off in 1999.
Wipro has a 500-strong dealer network. It also distributes IBM PCs and Sun
Microsystems.
26
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CHAPTER-2
RESEARCH METHODOLOGY
 28

RESEARCH METHODOLOGY

The procedure adopted for conducting the research requires a lot of attention as it has direct
bearing on accuracy, reliability and adequacy of results obtained. It is due to this reason that
research methodology, which we used at the time of conducting the research, needs to be
elaborated upon. Research Methodology is a way to systematically study and solve the research
problems. If a researcher wants to claim his study as a good study, he must clearly state the
methodology adapted in conducting the research the research so that it way be judged by the
reader whether the methodology of work done is sound or not.

The Research Methodology here includes.

1. Meaning of Research.
2. Research Problem.
3. Research Design.
4. Sampling Design.
5. Data Collection method.
6. Analysis and interpretation of Data.

Meaning Research:

Research is defined as “a scientific and systematic search for pertinent information on a

specific topic”. Research is an art of scientific investigation. Research is a systematized effort to
gain now knowledge. It is a careful investigation or inquiry especially through search for new
facts in any branch of knowledge. Research is an academic activity and this term should be used
in a technical sense. Research comprises defining and redefining problems, formulating
hypothesis or suggested solutions. Making deductions and reaching conclusions to determine
whether they if the formulating hypothesis. Research is thus, an original contribution to the
existing stock of knowledge making for its advancement. The search for knowledge through
objective and systematic method of finding solutions to a problem is research.
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Research Design

A research designs is the arrangement of conditions for collection and analysis data in a manner
that aims to combine relevance to the research purpose with economy in procedure. Research
Design is the conceptual structure with in which research in conducted. It constitutes the
blueprint for the collection measurement and analysis of data. Research Design includes and
outline of what the researcher will do form writing the hypothesis and it operational implication
to the final analysis of data. A research design is a framework for the study and is used as guide
in collection and analyzing the data. It is a strategy specifying which approach will be used for
gathering and analyzing the data. It also include the time and cost budget since most studies are
done under these two cost budget since most studies are done under theses tow constraints.
The design is such studies must be rigid and not flexible and most focus attention on the
following.
1. What is the study about?
2. Why is the study being made?
3. Where will the study be carried out?
4. What type of data is required?
5. Where can be required data be found?
6. What period of time will the study include?
7. What will be sample design?
8. What techniques of data collection will be used?
9. How will the data be analyzed?
10. In what style will the report be prepared?

TYPES OF RESEARCH DESIGN:

 EXPERIMENTAL RESEARCH DESIGN

 EXPLORATORY RESEARCH DESIGN
 DESCRIPTIVE& DIAGNOSTIC RESEARCH

Exploratory Research Design: This research design is preferred when researcher has a vague
idea about the problem the researcher has to explore the subject.
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Experimental Research Design – The research design is used to provide a strong basis for the
existence of casual relationship between two or more variables.
Descriptive Research Design – It seeks to determine the answers to who, what, where, when
and how questions. It is based on some previous understanding of the matter.
Diagnostic Research Design It determines the frequency with which something occurs or its
association with something else.

Research Design Used in this Project

Research Design chosen for this study is Descriptive Research Design. Descriptive study is
based on some previous understanding of the topic. Research has got a very specific objective
and clear cut data requirements.

Sampling Design
Sampling is necessary because it is almost impossible to examine the entire parent population
(i.e. the entire universe) various factors such as time available cost, purpose of study etc. make it
necessary for the researchers to choose a sample. It should neither be too small nor too big. It
should be manageable. The sample size of past 3 years is taken for present study due to time
limitation.
Sample size: 100

DATA COLLECTIONS
The process of data collection begins after a research problem has been defined and research
design ahs been chalked out. There are two types of data –

METHODS OF PRIMARY DATA

 OBSERVATION METHOD
 INTERVIEW METHODS
 QUESTIONAIRE METHOD
 SCHEDULE METHOD
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PRIMARY DATA -
It is first hand data, which is collected by researcher itself. Primary data is collected by various
approaches so as to get a precise, accurate, realistic and relevant data. The main tool in gathering
primary data was investigation and observation. It was achieved by a direct approach and
observation from the officials of the company.

SECONDARY DATA - it is the data which is already collected by someone else. Researcher
has to analyze the data and interprets the results. It has always been important for the completion
of any report. It provides reliable, suitable, adequate and specific knowledge.
I took data comprise annual reports and post records. Bank has provided me annual reports by
help of which, I prepared my report.
The valuable cooperation extended by staff members contributed a lot to fulfill the requirements
in the collection of data in order to complete the project. Various statistical tools are applied
depending on the research problem. In this study ratio analysis, comparative financial statements
analysis, common size statements and Trend Analysis has been used for analyzing and
interpreting the result.

LIMITATIONS:
 Suggestion is based on the given information.
 Due to the large number of employee it was not possible to collect all the information
from each.
 The time period is limited to know the entire process .We cannot draw effective
conclusion as it is continuous process.
 The area of survey was limited to some particular areas.

STATEMENT OF THE PROBLEM

The first step while conducting research is careful definition of Research Problem. “To ERR IS
THE HUMAN” is a proverb which indicates that no one is perfect in this world. Every
researcher has to face many problems which conducting any research that’s why problem
statement is defined to know which type of problems a researcher has to face while conducting
any study. It is said that, “Problem well defined is problem half solved.”
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Basically, a problem statement refers to some difficulty, which researcher experiences in the
context of either a theoretical or practical situation and wants to obtain the solution for the same.
The problem statement here is: “Customer Satisfaction towards Micro Industrial Corporation”.

OBJECTIVE OF THE STUDY

Objectives are the ends that states specifically how goal be achieved. Every study must have an
objective for which all the efforts have been done. Without objective no research can be
conducted and no result can be obtained. On the basis of objective all the research process is
followed. Objectives are the main aspect of every study. The objective of the study gives
direction to go through the research problem. It guides the researcher and keeps him on track.

I have two objectives regarding my research project. These are shown below:-

1. Primary objective:-
1) To study the Marketing Strategies used in Micro Industrial Corporation
2) To analyze the customer satisfaction in the organization to its true service &
dedication of the employees.

2. Secondary objective:-
1) To see whether Micro Industrial Corporation is going well or not in different
areas.
3) To inform the management about the marketing condition of Micro Industrial
Corporation
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SCOPE OF THE STUDY

Extensive survey on customer preferences will provide lot of valuable information about the
brand awareness of the product and it will be easy to find out the likes and dislikes about the
product. For company, it will provide through knowledge about the consumer preferences in
comparison with other market product and suggest valuable direction of the current market trend.
It will provide lot of information about the market trend and customer preferences about the
product.
It will include valuable suggestions for the company, how the company can strengthen their own
brand?
The study of customer preferences will provide me lot of information on:
How customer profile differs across the user segments?
Dopes the different classes of the customers differ their preferences?
My study includes an extensive survey over 100 customers who normally use the services.
The companies included:

MANAGERIAL USEFULNESS OF STUDY:

The study highlights the problems related to distribution of Micro Industrial Corporation also
that the company can improve the service rendered by them as a distributor. The study gives
information about prospective buyers both individual as well as institutional clients. The study
provides the complete information about all close competitors of Micro Industrial Corporation It
provides the feedback from customers regarding their problems and their perception about
investing in Micro Industrial Corporation also that the company can improve their services.
 Helping the organization to understand the importance of business

 Getting to know where the organization is lacking in customer satisfaction

 Setting up the channel partner

 Bringing the notice to the organization the untapped markets

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CHAPTER-3
CONCEPTUAL DISCUSSION
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LITERTURE REVIEW

MARKETING STRATEGY OF HP

Marketing strategy is a process that can allow an organization to concentrate its limited resources
on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A
marketing strategy should be centered around the key concept that customer satisfaction is the
main goal. Marketing strategy is a method of focusing an organization's energies and resources
on a course of action which can lead to increased sales and dominance of a targeted market
niche. A marketing strategy combines product development, promotion, distribution, pricing,
relationship management and other elements; identifies the firm's marketing goals, and explains
how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the
choice of target market segments, positioning, marketing mix, and allocation of resources. It is
most effective when it is an integral component of overall firm strategy, defining how the
organization will successfully engage customers, prospects, and competitors in the market arena.
Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the
source of a company's revenue, marketing strategy is closely linked with sales. A key component
of marketing strategy is often to keep marketing in line with a company's overarching mission
statement.

All four elements of the Marketing mix are closely related in formulating the Marketing strategy.
Marketing planning involves establishing objectives for marketing activity, determining and
scheduling the steps necessary to achieve the objectives, and then allocating the necessary
resources. Marketing strategy includes the activities of finding a competitive advantage, planning
for the company’s growth, analyzing the company’s portfolio and allocating the company’s
resources.

Marketing control involves a careful monitoring of the results of the Marketing plan to ensure
that the plan is achieving the objectives that were set and that it is cost-effective. Facts of
Marketing These are diverse facts of Marketing, but the tasks of Marketing remain the same: to
understand the customer, know who is involved in making a purchase decision, and then develop
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a Marketing mix- product, price, distribution system, and communication- that will satisfy those
customers.

MARKETING STRATEGY OPT BY HP IN PAST YEARS

Direct marketing addresses some of the biggest challenges in marketing a business - lead
generation, converting those leads into high quality customers, and then systematically growing
customer profitability. Direct marketing helps the company to get through the ‘marketing noise’,
and delivers a high return on investment for your marketing spend.

With prospects being presented with so many choices, they seldom, if ever, buy at the first
contact. In fact, it can take anything from 9 to 15 contacts before they have sufficient trust in you
to finally buy your product.

Systematic Direct Marketing is that set of processes - a marketing strategy based on direct
marketing methods which will deliver an immediate and sustainable sales improvement.

By improvements we mean:

 Your lead generation costs will drop,

 Converting leads into sales will not be due to profit-killing price discounts, and

 Your quality clients will form enduring relationships - providing you with profitable
repeat sales

The Highly Effective Cycle of Systematic Direct Marketing

In order to attract, retain and nurture a list of highly profitable customers, the company needs to
craft direct marketing strategy around a number of marketing activities that can start in a fairly
simple way, but over time develop into a fairly sophisticated set of direct marketing processes
leading to prime aim of expanding.

If you cycle through the following direct marketing activities you will experience an
unprecedented improvement in your business’s results:
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Each direct marketing cycle will create a set of clients who can start providing the company with
referrals. These ‘lowest cost’ prospects will supplement the prospects that you attract through
your normal ongoing lead generation techniques, yielding an ever-increasing prospect base for
you to convert into customers.

Services marketing is marketing based on relationship and value. It may be used to market a
service or a product. Marketing a service-base business is different from marketing a goods-base
business.

There are several major differences, including:

1. The buyer purchases are intangible

2. The service may be based on the reputation of a single person

3. It's more difficult to compare the quality of similar services

4. The buyer cannot return the service

Service Marketing has been relatively gaining ground in the overall spectrum of educational
marketing as developed economies move farther away from industrial importance to service
oriented economies. What is marketing? Marketing is the flow of goods and services from the
producer to consumer. It is based on relationship and value. In common parlance it is the
distribution and sale of goods and services. Marketing can be differentiated as:

• Marketing of products

• Marketing of services.

Marketing includes the services of all those indulged may it be then the wholesaler retailer,
Warehouse keeper, transport etc. In this modern age of competition marketing of a product or
service plays a key role. It is estimated that almost 50% of the price paid for a commodity goes
to the marketing of the product in US. Marketing is now said to be a term which has no particular
definition as the definitions change every day.
"Managing the evidence" refers to the act of informing customers that the service encounter has
been performed successfully. It is best done in subtle ways like providing examples or
descriptions of good and poor service that can be used as a basis of comparison.
However, it is worth remembering that many of the concepts, as well as many of the specific
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techniques, will work equally well whether they are directed at products or services. In
particular, developing a marketing strategy is much the same for products and services, in that it
involves selecting target markets and formulating a marketing mix. Thus, Theodore Levitt
suggested that "instead of talking of 'goods' and of 'services', it is better to talk of 'tangibles' and
'intangibles'". Levitt also went on to suggest that marketing a physical product is often more
concerned with intangible aspects (frequently the `product service' elements of the total package)
than with its physical. Sales after service is very important in service sector. Properties. Charles
Revson made a famous comment regarding the business of Revlon Inc.: `In the factory we make
cosmetics. In the store we sell hope.' Arguably, service industry marketing merely approaches
the problems from the opposite end of the same spectrum,

INTERNAL INFLUENCES

You can start your examination of the influence on consumer purchase decisions by first looking
inside yourselves to see which are the most important internal factors that affect how you make
choices.

Perceptual Filter

Perception is how we see ourselves and the world we live in.  However, what ends up being
stored inside us doesn’t always get there in a direct manner.  Often our mental makeup results
from information that has been consciously or unconsciously filtered as we experience it, a
process we refer to as a perceptual filter.  To us this is our reality, though it does not mean it is an
accurate reflection on what is real.  Thus, perception is the way we filter stimuli (e.g., someone
talking to us, reading a newspaper story) and then make sense out of it. 

How these steps are eventually carried out depends on a person’s approach to learning.  By
learning we mean how someone changes what they know, which in turn may affect how they
act.  There are many theories of learning, a discussion of which is beyond the scope of this
tutorial, however, suffice to say that people are likely to learn in different ways.  For instance,
one person may be able to focus very strongly on a certain advertisement and be able to retain
the information after being exposed only one time while another person may need to be exposed
to the same advertisement many times before he/she even recognizes what it is.  Consumers are
also more likely to retain information if a person has a strong interest in the stimuli.  If a person
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is in need of new car they are more likely to pay attention to a new advertisement for a car while
someone who does not need a car may need to see the advertisement many times before they
recognize the brand of automobile.

Marketing Implication:

Marketers spend large sums of money in an attempt to get customers to have a positive
impression of their products.  But clearly the existence of a perceptual filter suggests that getting
to this stage is not easy.  Exposing consumers to a product can be very challenging considering
the amount of competing product messages (ads) that are also trying to accomplish the same
objective (i.e., advertising clutter).  So marketers must be creative and use various means to
deliver their message Once the message reaches consumer it must be interesting enough to
capture the their attention (e.g., talk about the product’s benefits).  But attending to the message
is not enough.  For marketers the most critical step is the one that occurs with awareness.  Here
marketers must continually monitor and respond if their message becomes distorted in ways that
will negatively shape its meaning.  This can often happen due in part to competitive activity
(e.g., comparison advertisements).  Finally, getting the consumer to give positive meaning to the
message they have retained requires the marketer make sure that consumers accurately interpret
the facts about the product.

Knowledge

Knowledge is the sum of all information known by a person.  It is the facts of the world, as
he/she knows it and the depth of knowledge is a function of the breadth of worldly experiences
and the strength of an individual’s long-term memory.  Obviously what exists as knowledge to
an individual depends on how an individual’s perceptual filter makes sense of the information it
is exposed to.

Marketing Implications:

Marketers may conduct research that will gauge consumers’ level of knowledge regarding their
product.  As we will see below, it is likely that other factors influencing consumer behavior are
in large part shaped by what is known about a product.  Thus, developing methods (e.g.,
 40

incentives) to encourage consumers to accept more information (or correct information) may
affect other influencing factors.
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Attitude

In simple terms attitude refers to what a person feels or believes about something.  Additionally,
attitude may be reflected in how an individual acts based on his or her beliefs.  Once formed,
attitudes can be very difficult to change.  Thus, if a consumer has a negative attitude toward a
particular issue it will take considerable effort to change what they believe to be true.

Marketing Implication:

Marketers facing consumers who have a negative attitude toward their product must work to
identify the key issues shaping a consumer’s attitude then adjust marketing decisions (e.g.,
advertising) in an effort to change the attitude.  For companies competing against strong rivals to
whom loyal consumers exhibit a positive attitude, an important strategy is to work to see why
consumers feel positive toward the competitor and then try to meet or beat the competitor on
these issues.  Alternatively, a Micro Industrial Corporation can try to locate customers who feel
negatively toward the competitor and then increase awareness among this group.

Personality

An individual’s personality relates to perceived personal characteristics that are consistently

exhibited, especially when one acts in the presence of others.  In most, but not all, cases the
behaviors one projects in a situation is similar to the behaviors a person exhibits in another
situation.  In this way personality is the sum of sensory experiences others get from experiencing
a person (i.e., how one talks, reacts).  While one’s personality is often interpreted by those we
interact with, the person has their own vision of their personality, called self-concept, which may
or may not be the same has how others view us. 

Marketing Implication:

For marketers it is important to know that consumers make purchase decisions to support their
self-concept.  Using research techniques to identify how customers view themselves may give
marketers insight into products and promotion options that are not readily apparent.  For
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example, when examining consumers a marketer may initially build marketing strategy around
more obvious clues to consumption behavior, such as consumer’s demographic indicators (e.g.,
age, occupation, income).  However, in-depth research may yield information that shows
consumers are purchasing products to fulfil self-concept objectives that have little to do with the
demographic category they fall into (e.g., senior citizen may be making purchases that make
them feel younger).  Appealing to the consumer’s self concept needs could expand the market to
which the product is targeted.

Lifestyle

This influencing factor relates to the way we live through the activities we engage in and
interests we express.  In simple terms it is what we value out of life.  Lifestyle is often
determined by how we spend our time and money. 

Marketing Implication:

Products and services are purchased to support consum itions carry certain responsibilities yet it
is important to understand that some of these responsibilities may, in fact, be perceived and not
spelled out or even accepted by others.  In support of their roles, consumers will make product
choices that may vary depending on which role they are assuming.  As illustration, a person who
is responsible for selecting snack food for an office party his boss will attend may choose higher
quality products than he would choose when selecting snacks for his family. 

Marketing Implication:

Advertisers often show how the benefits of their products aid consumers as they perform certain
roles.  Typically the underlying message of this promotional approach is to suggest that using the
advertiser’s product will help raise one’s status in the eyes of others while using a competitor’s
product may have a negative effect on status.

Motivation

Motivation relates to our desire to achieve a certain outcome.  Many internal factors we have
already discussed can affect a customer’s desire to achieve a certain outcome but there are
others.  For instance, when it comes to making purchase decisions customers’ motivation could
 43

be affected by such issues as financial position (e.g., can I afford the purchase?), time constraints
(e.g., do I need to make the purchase quickly?), overall value (e.g., am I getting my money’s
worth?), and perceived risk (e.g., what happens if I make a bad decision). 

Marketing Implication:

Motivation is also closely tied to the concept of involvement, which relates to how much effort
the consumer will exert in making a decision.  Highly motivated consumers will want to get
mentally and physically involved in the purchase process.  Not all products have a high
percentage of highly involved customers (e.g., milk) but marketers who market products and
services that may lead to high level of consumer involvement should prepare options that will be
attractive to this group.  For instance, marketers should make it easy for consumers to learn about
their product (e.g., information on website, free video preview) and, for some products, allow
customers to experience the product (e.g., free trial) before committing to the purchase.

EXTERNAL INFLUENCES

Consumer purchasing decisions are often affected by factors that are outside of their control but
have direct or indirect impact on how we live and what we consume.

Culture

Culture represents the behavior, beliefs and, in many cases, the way we act learned by interacting
or observing other members of society.  In this way much of what we do is shared behavior,
passed along from one member of society to another.  Yet culture is a broad concept that, while
of interest to marketers, is not nearly as important as understanding what occurs within smaller
groups or sub-cultures to which we may also belong.  Sub-cultures also have shared values but
this occurs within a smaller groups.  For instance, sub-cultures exist where groups share similar
values in terms of ethnicity, religious beliefs, geographic location, special interests and many
others.

Marketing Implication:

As part of their efforts to convince customers to purchase their products, marketers often use
cultural representations, especially in promotional appeals.  The objective is to connect to
consumers using cultural references that are easily understood and often embraced by the
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consumer.  By doing so the marketer hopes the consumer feels more comfortable with or can
relate better to the product since it corresponds with their cultural values.  Additionally, smart
marketers use strong research efforts in an attempt to identify differences in how sub-culture
behaves.  These efforts help pave the way for spotting trends within a sub-culture, which the
marketer can capitalize on through new marketing tactics (e.g., new products, new sales
channels, added value, etc.).

Other Group Membership

In addition to cultural influences, consumers belong to many other groups with which they share
certain characteristics and which may influence purchase decisions.  Often these groups contain
opinion leaders or others who have major influence on what the customer purchases. 

Some of the basic groups that may be included:

 Social Class

 Represents the social standing one has within a society based on such factors as income
level, education, occupation

 Family

 One’s family situation can have a strong effect on how purchase decisions are made

 Reference groups

 Most consumers simultaneously belong to many other groups with which they associate
or, in some cases, feel the need to disassociate.

Marketing Implication:

Identifying and understanding the groups consumers belong to is a key strategy for marketers. 
Doing so helps identify target markets, develop new products, and create appealing marketing
promotions to which consumers can relate.  In particular, marketers seek to locate group leaders
and others to whom members of the group look for advice or direction.  These opinion leaders, if
well respected by the group, can be used to gain insight into group behavior and if these opinion
 45

leaders accept promotional opportunities could act as effective spokespeople for the marketer’s
products
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Decisions about the elements of Marketing

For all decisions marketers must consider the overall environment in which their business Micro
Industrial Corporation operates. Important factors include not only the legal, cultural, political,
and economic environments of the overall society but also the company’s corporate environment
and the financial constraints in which it operates. Marketing research is the phase of Marketing
concerned with obtaining usable information, to make it more effective it is necessary to define
carefully what information is required to make a better decision. After defining the problem, the
marketers specify the source of information to be collected and analyzed. Consumer research is
another important aspect of Marketing research, concentrates on buyer behaviour. Segmentation
is also an important aspect of Marketing. The consumers who need product category are diverse;
not everybody will want the same thing from the product category, will want to buy it in the
same place, is interested in the same kinds of features or services. On the other hand it is not
realistic to offer a unique product for each customer. There are group of customers with similar
sets of needs, and the market can be divided into such groups. This concept is known as Market
Segmentation.

Once the needs of the market are understood, the marketer considers the details of what the
Micro Industrial Corporation might offer. It should try to develop the product that will satisfy the
needs of the consumer in the market segment that had been identified and selected; provide the
product at a price customers are willing to pay; create a distribution system that makes the
product available to the customer in the place where it can be purchased; and communicate the
appropriate information to promote the product, making customers aware of and interested in the
product, helping them understand what the product offers, and reminding them that the product is
available. These four elements: - product, price, promotion and place constitute the marketing
mix. They are sometimes referred to as the “four P’s of Marketing”. The appropriate Marketing
mix varies with the market targeted.
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STRATEGIC PLANNING AND THE MARKETING PROCESS

Plans and planning:

Plans are needed to clarify what kinds of strategic objectives an organization would like
to achieve and how this is to be done. Such plans must consider the amount of resources
available. One critical resource is capital. Microsoft keeps a great deal of cash on hand to be able
to “jump” on opportunities that come about. Small startup software firms, on the other hand, may
have limited cash on hand. This means that they may have to forego what would have been a
good investment because they do not have the cash to invest and cannot find a way to raise the
capital. Other resources that affect what a firm may be able to achieve include Trademarks/brand
names: It would be very difficult to compete factors such as: Patents: It would be difficult to
against Coke and Pepsi in the cola market. Compete against Intel and AMD in the
microprocessor market since both these People: firms have a number of patents that it is difficult
to get around. Even with all of Microsoft’s money available, it could not immediately hire the
Distribution: Stores have spacepeople needed to manufacture computer chips. For only a
fraction of the products they are offered, so they must turn many away. A firm that does not have
an established relationship with stores will be at a disadvantage in trying to introduce a new
product.
Plans are subject to the choices and policies that the organization has made. Some firms have
goals of social responsibility, for example. Some firms are willing to take a greater risk, which
may result in a very large payoff but also involve the risk of a large loss, than others.
 48

Strategic marketing is best seen as an ongoing and never-ending process.

Typically:

 The organization will identify the objectives it wishes to achieve. This could involve
profitability directly, but often profitability is a long term goal that may require some
intermediate steps. The firm may seek to increase market share, achieve distribution in more
outlets, have sales grow by a certain percentage, or have consumers evaluate the product
more favorably. Some organizations have objectives that are not focused on monetary profit
—e.g., promoting literacy or preventing breast cancer.
 An analysis is made, taking into consideration issues such as organizational resources,
competitors, the competitors’ strengths, different types of customers, changes in the market,
or the impact of new technology.
 Based on this analysis, a plan is made based on tradeoffs between the advantages and
disadvantages of different options available.
 This strategy is then carried out. The firm may design new products, revamp its advertising
strategy, invest in getting more stores to carry the product, or decide to focus on a new
customer segment.
 After implementation, the results or outcome are evaluated. If results are not as desired, a
change may have to be made to the strategy. Even if results are satisfactory, the firm still
needs to monitor the environment for changes.

Levels of planning and strategies:

Plans for a firm can be made at several different levels. At the corporate level, the
management considers the objectives of the firm as a whole. For example, Microsoft may want
seek to grow by providing high quality software, hardware, and services to consumers. To
achieve this goal, the firm may be willing to invest aggressively.
Plans can also be made at the business unit level. For example, although Microsoft is best
known for its operating systems and applications software, the firm also provides Internet access
and makes video games. Different managers will have responsibilities for different areas, and
goals may best be made by those closest to the business area being considered. It is also more
practical to hold managers accountable for performance if the plan is being made at a more
specific level. Boeing has both commercial aircraft and defense divisions. Each is run by
 49

different managers, although there is some overlap in technology between the two. Therefore,
plans are needed both at the corporate and at the business levels.
Occasionally, plans will be made at the functional level, to allow managers to specialize
and to increase managerial accountability. Marketing, for example, may be charged with
increasing awareness of Microsoft game consoles to 55% of the U.S. population or to increase
the number of units of Microsoft Office sold. Finance may be charged with raising a given
amount of capital at a given cost. Manufacturing may be charged with decreasing production
costs by 5%.
The firm needs to identify the business it is in. Here, a balance must be made so that the
firm’s scope is not defined too narrowly or too broadly. A firm may define its goal very narrowly
and then miss opportunities in the market place. For example, if Dell were to define itself only as
a computer company, it might miss an opportunity to branch into PDAs or Internet service. Thus,
they might instead define themselves as a provider of “information solutions.” A company
should not define itself too broadly, however, since this may result in loss of focus. For example,
a manufacturer of baking soda should probably not see itself as a manufacturer of all types of
chemicals. Sometimes, companies can define themselves in terms of a customer need. For
example, 3M sees itself as being in the business of making products whose surfaces are bonded
together. This accounts for both Post-It notes and computer disks.
A firm’s mission should generally include a discussion of the customers served (e.g.,
Wal-Mart and Nordstrom’s serve different groups), the kind of technology involved, and the
markets served.
Several issues are involved in selecting target customers. We will consider these in more
detail within the context of segmentation, but for now, the firm needs to consider issues such as:

 The size of various market segments;

 How well these segments are being served by existing firms;
 Changes in the market—e.g., growth of segments or change in technology;
 How the firm should be positioned, or seen by customers. For example, Wal-Mart
positions itself as providing value in retailing, while Nordstrom’s defines itself more in
terms of high levels of customer service.
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The Boston Consulting Group (BCG) matrix provides a firm an opportunity to assess how
well its business units work together. Each business unit is evaluated in terms of two factors:
market share and the growth prospects in the market. Generally, the larger a firm’s share, the
stronger its position, and the greater the growth in a market, the better future possibilities. Four
combinations emerge:

 A star represents a business unit that has a high share in a growing market. For example,
Motorola has a large share in the rapidly growing market for cellular phones.
 A question mark results when a unit has a small share in a rapidly growing market. The
firm’s position, then, is not as strong as it would have been had its market share been
greater, but there is an opportunity to grow. For example, Hewlett-Packard has a small
share of the digital camera market, but this is a very rapidly growing market.
 A cash cow results when a firm has a large share in a market that is not growing, and may
even be shrinking. Brother has a large share of the typewriter market.
 A dog results when a business unit has a small share in a market that is not growing. This
is generally a somewhat unattractive situation, although dogs can still be profitable in the
short run. For example, Smith Corona how has a small share of the typewriter market.

Firms are usually best of with a portfolio that has a balance of firms in each category. The cash
cows tend to generate cash but require little future investment. On the other hand, stars generate
some cash, but even more cash is needed to invest in the future—for research and development,
marketing campaigns, and building new manufacturing facilities. Therefore, a firm may take
excess cash from the cash cow and divert it to the star. For example, Brother could “harvest” its
profits from typewriters and invest this in the unit making color laser printers, which will need
the cash to grow. If a firm has cash cows that generate a lot of cash, this may be used to try to
improve the market share of a question mark. A firm that has a number of promising stars in its
portfolio may be in serious trouble if it does not have any cash cows to support it. If it is about to
run out of cash—regardless of how profitable it is—is becomes vulnerable as a takeover target
from a firm that has the cash to continue running it.
A SWOT (“Strengths, Opportunities, Weaknesses, and Threats”) analysis is used to help the
firm identify effective strategies. Successful firms such as Microsoft have certain strengths.
Microsoft, for example, has a great deal of technology, a huge staff of very talented engineers, a
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great deal of experience in designing software, a very large market share, a well respected brand
name, and a great deal of cash. Microsoft also has some weaknesses, however: The game console
and MSN units are currently running at a loss, and MSN has been unable to achieve desired
levels of growth. Firms may face opportunities in the current market. Microsoft, for example,
may have the opportunity to take advantage of its brand name to enter into the hardware market.
Microsoft may also become a trusted source of consumer services. Microsoft currently faces
several threats, including the weak economy. Because fewer new computers are bough during a
recession, fewer operating systems and software packages.
Rather than merely listing strengths, weaknesses, opportunities, and threats, a SWOT analysis
should suggest how the firm may use its strengths and opportunities to overcome weaknesses and
threats. Decisions should also be made as to how resources should be allocated. For example,
Microsoft could either decide to put more resources into MSN or to abandon this unit entirely.
Microsoft has a great deal of cash ready to spend, so the option to put resources toward MSN is
available. Microsoft will also need to see how threats can be addressed. The firm can earn
political good will by engaging in charitable acts, which it has money available to fund. For
example, Microsoft has donated software and computers to schools. It can forego temporary
profits by reducing prices temporarily to increase demand, or can “hold out” by maintaining
current prices while not selling as many units.
Criteria for effective marketing plans:
Marketing plans should meet several criteria:

 The plan must be specific enough so that it can be implemented and communicated to
people in the firm. “Improving profitability” is usually too vague, but increasing net
profits by 5%, increasing market share by 10%, gaining distribution in 2,000 more stores,
and reducing manufacturing costs by 2% are all specific.
 The plan must be measurable so that one can see if it has been achieved. The above plans
involve specific numbers.
 The goal must be achievable or realistic. Plans that are unrealistic may result in poor use
of resources or lowered morale within the firm.
 The goals must be consistent. For example, a firm cannot ordinarily simultaneously plan
improve product features, increase profits, and reduce prices.
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 53

Consumer Behavior:

Consumer behavior involves the psychological processes that consumers go through in

recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether
or not to purchase a product and, if so, which brand and where), interpret information, make
plans, and implement these plans (e.g., by engaging in comparison shopping or actually
purchasing a product).

Sources of influence on the consumer:

The consumer faces numerous sources of influence. Often, we take cultural influences for
granted, but they are significant. An American will usually not bargain with a store owner. This,
however, is a common practice in much of the World. Physical factors also influence our
behavior. We are more likely to buy a soft drink when we are thirsty, for example, and food
manufacturers have found that it is more effective to advertise their products on the radio in the
late afternoon when people are getting hungry.

THE GLOBAL MARKETPLACE

Globalization of Markets and Competition:
Trade is increasingly global in scope today. There are several reasons for this. One
significant reason is technological—because of improved transportation and communication
opportunities today, trade is now more practical. Thus, consumers and businesses now have
access to the very best products from many different countries. Increasingly rapid technology
lifecycles also increases the competition among countries as to who can produce the newest in
technology. In part to accommodate these realities, countries in the last several decades have
taken increasing steps to promote global trade through agreements such as the General Treaty on
Trade and Tariffs, and trade organizations such as the World Trade Organization (WTO), North
American Free Trade Agreement (NAFTA), and the European Union (EU).
Stages in the International Involvement of a Firm:

We discussed several stages through which a firm may go as it becomes increasingly involved
across borders. A purely domestic firm focuses only on its home market, has no current
ambitions of expanding abroad, and does not perceive any significant competitive threat from
 54

abroad. Such a firm may eventually get some orders from abroad, which are seen either as an
irritation (for small orders, there may be a great deal of effort and cost involved in obtaining
relatively modest revenue) or as "icing on the cake." As the firm begins to export more, it enters
the export stage, where little effort is made to market the product abroad, although an increasing
number of foreign orders are filled. In the international stage, as certain country markets begin to
appear especially attractive with more foreign orders originating there, the firm may go into
countries on an ad hoc basis—that is, each country may be entered sequentially, but with
relatively little learning and marketing efforts being shared across countries. In the multi-national
stage, some efficiencies are pursued by standardizing across a region (e.g., Central America,
West Africa, or Northern Europe). Finally, in the global stage, the focus centers on the entire
World market, with decisions made optimize the product’s position across markets—the home
country is no longer the center of the product. An example of a truly global company is Coca
Cola.
Note that these stages represent points on a continuum from a purely domestic orientation
to a truly global one; companies may fall in between these discrete stages, and different parts of
the firm may have characteristics of various stages—for example, the pickup truck division of an
auto-manufacturer may be largely domestically focused, while the passenger car division is
globally focused. Although a global focus is generally appropriate for most large firms, note that
it may not be ideal for all companies to pursue the global stage. For example, manufacturers of
ice cubes may do well as domestic, or even locally centered, firms.

Some forces in international trade:

The text contains a rather long-winded appendix discussing some relatively simple ideas.
Comparative advantage, discussed in more detail in the economics notes, suggests trade between
countries is beneficial because these countries differ in their relative economic strengths—some
have more advanced technology and some have lower costs. The International Product Life
Cycle suggests that countries will differ in their timing of the demand for various products.
Products tend to be adopted more quickly in the United States and Japan, for example, so once
the demand for a product (say, VCRs) is in the decline in these markets, an increasing market
potential might exist in other countries (e.g., Europe and the rest of Asia).
Internalization/transaction costs refers to the fact that developing certain very large scale
 55

projects, such as an automobile intended for the World market, may entail such large costs that
these must be spread over several countries.

POLITICAL AND LEGAL INFLUENCES

The political situation:
The political relations between a firm’s country of headquarters (or other significant
operations) and another one may, through no fault of the firm’s, become a major issue. For
example, oil companies which invested in Iraq or Libya became victims of these countries’
misconduct that led to bans on trade. Similarly, American firms may be disliked in parts of Latin
America or Iran where the U.S. either had a colonial history or supported unpopular leaders such
as the former shah.
Certain issues in the political environment are particularly significant. Some countries,
such as Russia, have relatively unstable governments, whose policies may change dramatically if
new leaders come to power by democratic or other means. Some countries have little tradition of
democracy, and thus it may be difficult to implement. For example, even though Russia is
supposed to become a democratic country, the history of dictatorships by the communists and the
czars has left country of corruption and strong influence of criminal elements.

Laws across borders:

When laws of two countries differ, it may be possible in a contract to specify in advance
which laws will apply, although this agreement may not be consistently enforceable.
Alternatively, jurisdiction may be settled by treaties, and some governments, such as that of the
U.S., often apply their laws to actions, such as anti-competitive behavior, perpetrated outside
their borders (extra-territorial application). By the doctrine known as compulsion, a firm that
violates U.S. law abroad may be able to claim as a defense that it was forced to do so by the local
government; such violations must, however, be compelled—that they are merely legal or
accepted in the host country is not sufficient.
The reality of legal systems:

Some legal systems, such as that of the U.S., are relatively "transparent"—that is, the law
tends to be what its plain meaning would suggest. In some countries, however, there are laws on
the books which are not enforced (e.g., although Japan has antitrust laws similar to those of the
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U.S., collusion is openly tolerated). Further, the amount of discretion left to government officials
tends to vary. In Japan, through the doctrine of administrative guidance, great latitude is left to
government officials, who effectively make up the laws.
One serious problem in some countries is a limited access to the legal systems as a means
to redress grievances against other parties. While the U.S. may rely excessively on lawsuits, the
inability to effectively hold contractual partners to their agreement tends to inhibit business
deals. In many jurisdictions, pre-trial discovery is limited, making it difficult to make a case
against a firm whose internal documents would reveal guilt. This is one reason why personal
relationships in some cultures are considered more significant than in the U.S.—since enforcing
contracts may be difficult, you must be sure in advance that you can trust the other party.

Legal systems of the World:

There are four main approaches to law across the World, with some differences within each:

 Common law, the system in effect in the U.S., is based on a legal tradition of precedent. Each
case that raises new issues is considered on its own merits, and then becomes a precedent for
future decisions on that same issue. Although the legislature can override judicial decisions
by changing the law or passing specific standards through legislation, reasonable court
decisions tend to stand by default.
 Code law, which is common in Europe, gives considerably shorter leeway to judges, who are
charged with "matching" specific laws to situations—they cannot come up with innovative
solutions when new issues such as patentability of biotechnology come up. There are also
certain differences in standards. For example, in the U.S. a supplier whose factory is hit with
a strike is expected to deliver on provisions of a contract, while in code law this
responsibility may be nullified by such an "act of God."
 Islamic law is based on the teachings of the Koran, which puts forward mandates such as a
prohibition of usury, or excessive interest rates. This has led some Islamic countries to ban
interest entirely; in others, it may be tolerated within reason. Islamic law is ultimately based
on the need to please God, so "getting around" the law is generally not acceptable. Attorneys
may be consulted about what might please God rather than what is an explicit requirements
of the government.
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Socialist law is based on the premise that "the government is always right" and typically has not
developed a sophisticated framework of contracts (you do what the governments tells you to do)
or intellectual property protection (royalties are unwarranted since the government ultimately
owns everything). Former communist countries such as those of Eastern Europe and Russia are
trying to advance their legal systems to accommodate issues in a free market.

U.S. laws of particular interest to firms doing business abroad:

 Anti-trust. U.S. antitrust laws are generally enforced in U.S. courts even if the alleged
transgression occurred outside U.S. jurisdiction. For example, if two Japanese firms
collude to limit the World supply of VCRs, they may be sued by the U.S. government (or
injured third parties) in U.S. courts, and may have their U.S. assets seized.
 The Foreign Corrupt Influences Act came about as Congress was upset with U.S. firms’
bribery of foreign officials. Although most if not all countries ban the payment of bribes,
such laws are widely flaunted in many countries, and it is often useful to pay a bribe to
get foreign government officials to act favorably. Firms engaging in this behavior, even if
it takes place entirely outside the U.S., can be prosecuted in U.S. courts, and many
executives have served long prison sentences for giving in to temptation. In contrast, in
the past some European firms could actually deduct the cost of foreign bribes from their
taxes! There are some gray areas here—it may be legal to pay certain "tips" –known as
"facilitating payments"—to low level government workers in some countries who rely on
such payments as part of their salary so long as these payments are intended only to speed
up actions that would be taken anyway. For example, it may be acceptable to give a
reasonable (not large) facilitating payment to get customs workers to process a shipment
faster, but it would not be legal to pay these individuals to change the classification of a
product into one that carries a lower tariff.
 Anti-boycott laws. Many Arab countries maintain a boycott of Israel, and foreigners that
want to do business with them may be asked to join in this boycott by stopping any deals
they do with Israel and certifying that they do not trade with that country. It is illegal for
U.S. firms to make this certification even if they have not dropped any actual deals with
Israel to get a deal with boycotters.
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 Trading With the Enemy. It is illegal for U.S. firms to trade with certain countries that are
viewed to be hostile to the U.S.—e.g., Libya and Iraq.

SEGMENTATION, TARGETING, AND POSITIONING

The importance of STP:
Segmentation is the cornerstone of marketing—almost all marketing efforts in some way
relate to decisions on who to serve or how to implement positioning through the different parts of
the marketing mix. For example, one’s distribution strategy should consider where one’s target
market is most likely to buy the product, and a promotional strategy should consider the target’s
media habits and which kinds of messages will be most persuasive. Although it is often
tempting, when observing large markets, to try to be "all things to all people," this is a dangerous
strategy because the firm may lose its distinctive appeal to its chosen segments.
In terms of the "big picture," members of a segment should generally be as similar as
possible to each other on a relevant dimension (e.g., preference for quality vs. low price) and as
different as possible from members of other segments. That is, members should respond in
similar ways to various treatments (such as discounts or high service) so that common campaigns
can be aimed at segment members, but in order to justify a different treatment of other segments,
their members should have their own unique response behavior.
Approaches to global segmentation:
There are two main approaches to global segmentation. At the macro level, countries are
seen as segments, given that country aggregate characteristics and statistics tend to differ
significantly. For example, there will only be a large market for expensive pharmaceuticals in
countries with certain income levels, and entry opportunities into infant clothing will be
significantly greater in countries with large and growing birthrates (in countries with smaller
birthrates or stable to declining birthrates, entrenched competitors will fight hard to keep the
market share).
There are, however, significant differences within countries. For example, although it
was thought that the Italian market would demand "no frills" inexpensive washing machines
while German consumers would insist on high quality, very reliable ones, it was found that more
units of the inexpensive kind were sold in Germany than in Italy—although many German
consumers fit the predicted profile, there were large segment differences within that country. At
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the micro level, where one looks at segments within countries. Two approaches exist, and their
use often parallels the firm’s stage of international involvement. Intra-market segmentation
involves segmenting each country’s markets from scratch—i.e., an American firm going into the
Brazilian market would do research to segment Brazilian consumers without incorporating
knowledge of U.S. buyers. In contrast, inter-market segmentation involves the detection of
segments that exist across borders. Note that not all segments that exist in one country will exist
in another and that the sizes of the segments may differ significantly. For example, there is a
huge small car segment in Europe, while it is considerably smaller in the U.S.
Inter-market segmentation entails several benefits. The fact that products and
promotional campaigns may be used across markets introduces economies of scale, and learning
that has been acquired in one market may be used in another—e.g., a firm that has been serving a
segment of premium quality cellular phone buyers in one country can put its experience to use in
another country that features that same segment. (Even though segments may be similar across
the cultures, it should be noted that it is still necessary to learn about the local market. For
example, although a segment common across two countries may seek the same benefits, the
cultures of each country may cause people to respond differently to the "hard sell" advertising
that has been successful in one).
The international product life cycle suggests that product adoption and spread in some
markets may lag significantly behind those of others. Often, then, a segment that has existed for
some time in an "early adopter" country such as the U.S. or Japan will emerge after several years
(or even decades) in a "late adopter" country such as Britain or most developing countries. (We
will discuss this issue in more detail when we cover the product mix in the second half of the
term).

Positioning across markets:

Firms often have to make a tradeoff between adapting their products to the unique
demands of a country market or gaining benefits of standardization such as cost savings and the
maintenance of a consistent global brand image. There are no easy answers here. On the one
hand, McDonald’s has spent a great deal of resources to promote its global image; on the other
hand, significant accommodations are made to local tastes and preferences—for example, while
serving alcohol in U.S. restaurants would go against the family image of the restaurant carefully
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nurtured over several decades, McDonald’s has accommodated this demand of European
patrons.

ENTRY STRATEGIES
Methods of entry:
With rare exceptions, products just don’t emerge in foreign markets overnight—a firm
has to build up a market over time. Several strategies, which differ in aggressiveness, risk, and
the amount of control that the firm is able to maintain, are available:

 Exporting is a relatively low risk strategy in which few investments are made in the new
country. A drawback is that, because the firm makes few if any marketing investments in
the new country, market share may be below potential. Further, the firm, by not operating
in the country, learns less about the market (What do consumers really want? Which
kinds of advertising campaigns are most successful? What are the most effective methods
of distribution?) If an importer is willing to do a good job of marketing, this arrangement
may represent a "win-win" situation, but it may be more difficult for the firm to enter on
its own later if it decides that larger profits can be made within the country.
 Licensing and franchising are also low exposure methods of entry—you allow someone
else to use your trademarks and accumulated expertise. Your partner puts up the money
and assumes the risk. Problems here involve the fact that you are training a potential
competitor and that you have little control over how the business is operated. For
example, American fast food restaurants have found that foreign franchisers often fail to
maintain American standards of cleanliness. Similarly, a foreign manufacturer may use
lower quality ingredients in manufacturing a brand based on premium contents in the
home country.
 Contract manufacturing involves having someone else manufacture products while you
take on some of the marketing efforts yourself. This saves investment, but again you may
be training a competitor.
 Direct entry strategies, where the firm either acquires a firm or builds operations "from
scratch" involve the highest exposure, but also the greatest opportunities for profits. The
firm gains more knowledge about the local market and maintains greater control, but now
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has a huge investment. In some countries, the government may expropriate assets without
compensation, so direct investment entails an additional risk. A variation involves a joint
venture, where a local firm puts up some of the money and knowledge about the local
market.

MARKET ANALYSIS TOOLS:

Country Map - (Country Map is free to all users worldwide and does not require a login or
password.)
Benchmarking national and sectoral trade performance and competitiveness. Profiles of
184 countries and territories, freely available.  Country Map provides a wide range of analytical
tools, including the Trade Performance Index on export competitiveness, National Export
Performance and Import Profile, the econometric trade simulation model Trade Sim on bilateral
trade potential and an assessment of the reliability and characteristics of national trade statistics.
Country Map also includes links to Trade Information Sources, Trade Support Institutions and
current ITC projects for the country concerned.

Trade Map:
Trade statistics for international business development.
An online database of global trade flows in goods and services and tariff measures for
international business development and trade promotion, providing detailed export and import
profiles and trends for over 5,300 products in over 200 countries and territories.  Based on the
world’s largest database COMTRADE, Trade Map presents import/export values and quantities,
growth rates, market shares and market access information.  It allows users to analyze markets,
select priority countries for export diversification, review the performance of competing
countries and assess opportunities for product diversification by identifying existing and
potential trade between countries.

Product Map
Business information for going global a Web portal presenting business information and
intelligence in a product context for 72 product clusters.  The product clusters range from
agricultural machinery to wood products.  Product Map includes market studies, price indicators,
 62

links to product information, trade data and links to over 20,000 companies and organizations.
Companies can also create their own basic web site, which is hosted on the portal.

Market Access Map:

Making market access barriers transparent Market Access Map is an interactive database of
tariffs and market access barriers.  It contains the market access conditions applied at the
bilateral level by over 170 importing countries to the products exported by over 200 countries
and territories.  Market Access Map’s strength lies in its wide geographical coverage; its taking
into account of almost all multilateral, regional and bilateral trade agreements; the integration of
ad valorem equivalents of specific tariffs; as well as certificates and rules of origin.  Market
Access Map allows users to analyze the protection of any geographic grouping and sectoral
aggregation.  It also offers the possibility of simulating tariff reductions using various negotiation
formulae.  Developed by ITC in collaboration with CEPII, UNCTAD and WTO, Market Access
Map aims to enhance market transparency, support international trade promotion, and to
facilitate the analysis of related trade policy issues.

OPINION OF RESPONDENT

 It is a process of executing, planning, effective marketing mix for the purpose of

achieving objects for all those whose involve in the process.
 International marketing will helps to improve to banking facilities and advantages.
 International marketing helps to improve to the import & export goods & services.
 The informal interviewing gives valuable indication as to how use.
 International marketing is helps to develop good relations between two countries and at
international level we get best quality product.
 The concept of International marketing is necessary to developing countries & it
improves economic development of country.
 International marketing will improve the quality & quantity of the product.
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 International marketing improved the competitive efficiency of forms.

 International marketing product is reasonable one customer like the product and they
keep on demanding.

MARKETING RESEARCH
Primary vs. secondary research:
There are two kinds of market research: Primary research refers to the research that a firm
conducts for its own needs (e.g., focus groups, surveys, interviews, or observation) while
secondary research involves finding information compiled by someone else. In general,
secondary research is less expensive and is faster to conduct, but it may not answer the specific
questions the firm seeks to have answered (e.g., how do consumers perceive our product?), and
its reliability may be in question.
Secondary sources:
A number of secondary sources of country information are available. One of the most
convenient sources is an almanac, containing a great deal of country information. Almanacs can
typically be bought for $10.00 or less. The U.S. government also publishes a guide to each
country, and the handbook International Business Information: How to Find It, How to Use It.
Several experts may be available. Anthropologists and economists in universities may have built
up a great deal of knowledge and may be available for consulting. Consultants specializing in
various regions or industries are typically considerably more expensive. One should be careful
about relying on the opinions of expatriates (whose views may be biased or outdated) or one’s
own experience (which may relate to only part of a country or a certain sub segment) and may
also suffer from the limitation of being a sample of size 1.
Hard vs. soft data:
"Hard" data refers to relatively quantifiable measures such as a country’s GDP, number of
telephones per thousand residents, and birth rates (although even these supposedly "objective"
factors may be subject to some controversy due to differing definitions and measurement
approaches across countries). In contrast, "soft" data refers to more subjective issues such as
country history or culture. It should be noted that while the "hard" data is often more convenient
and seemingly objective, the "soft" data is frequently as important, if not more so, in
understanding a market.
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Data reliability:
The accuracy and objectivity of data depend on several factors. One significant one is the
motivation of the entity that releases it. For example, some countries may want to exaggerate
their citizens’ literacy rates owing to national pride, and an organization promoting economic
development may paint an overly rosy picture in order to attract investment. Some data may be
dated (e.g., a census may be conducted rarely in some regions), and some countries may lack the
ability to collect data (it is difficult to reach people in the interior regions of Latin America, for
example). Differences in how constructs are defined in different countries (e.g., is military
personnel counted in people who are employed?) may make figures of different jurisdictions
non-comparable.

Cost of data:
Much government data, or data released by organizations such as the World Bank or the United
Nations, is free or inexpensive, while consultants may charge very high rates.

Issues in primary research:

Cultural factors often influence how people respond to research. While Americans are used to
market research and tend to find this relatively un-threatening, consumers in other countries may
fear that the data will be reported to the government, and may thus not give accurate responses.
In some cultures, criticism or confrontation are considered rude, so consumers may not respond
honestly when they dislike a product. Technology such as scanner data is not as widely available
outside the United States. Local customs and geography may make it difficult to interview
desired respondents; for example, in some countries, women may not be allowed to talk to
strangers.

Lifecycle stages across the World:

It has been suggested that Europe runs some five years behind the U.S. in electronic commerce,
but some sources dispute this, suggesting that lack of success among American retailers may
have other origins, such as inadequate adaptation (for example, some British users are put off by
American English). There are, however, some factors which cause most countries run behind.
Even in Europe, Internet access penetration rates are lower than they are in the U.S., and the
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slower speed associated with downloading Asian characters is discouraging. In some countries,
credit card penetration is lower, and even in European countries with high penetration rates,
consumers are reluctant to use them. Further, the fact that consumers in most countries have to
pay a per minute phone charge discourages the essential casual and relaxed browsing common in
the U.S. so long as unlimited cable or hardwired access is not offered.

What is marketing?
Almost every marketing textbook has a different definition of the term “marketing.” The
American Marketing Association (AMA) uses the following: “The process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods, and services to
create exchanges that satisfy individual and organizational objectives.” From this definition, we
see that:

 Marketing involves an ongoing process. The environment is “dynamic.” This means that
the market tends to change—what customers want today is not necessarily what they
want tomorrow. For example, sales of beef are declining in the United States because
consumers have become health oriented. Similarly, Tupperware parties are less popular
today than they once were because there are fewer housewives who do not work outside
the home.
 This process involves both planning and implementing (executing) the plan.
 Some of the main issues involved include:
o Marketers help design products, finding out what customers want and what can
practically be made available given technology and price constraints.
o Marketers distribute products—there must be some efficient way to get the products
from the factory to the end-consumer.
o Marketers also promote products, and this is perhaps what we tend to think of first
when we think of marketing. Promotion involves advertising—and much more. Other
tools to promote products include trade promotion (store sales, coupons, and rebates),
obtaining favorable and visible shelf-space, and obtaining favorable press coverage.
o Marketers also price products to “move” them. We know from economics that, in most
cases, sales correlate negatively with price—the higher the price, the lower the quantity
demanded. In some cases, however, price may provide the customer with a “signal” of
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quality. Thus, the marketer needs to price the product to (1) maximize profit and (2)
communicate a desired image of the product.
o Marketing is applicable to services and ideas as well as to tangible products. For
example, accountants may need to market their tax preparation services to consumers.

THE MARKETING ENVIRONMENT

ELEMENTS OF THE ENVIRONMENT:
The marketing environment involves factors that, for the most part, are beyond the control of the
company. Thus, the company must adapt to these factors. It is important to observe how the
environment changes so that a firm can adapt its strategies appropriately. Consider these
environmental forces:

 Competition:

Competitors often “creep” in and threaten to take away markets from firms. For example,
Japanese auto manufacturers became a serious threat to American car makers in the late
1970s and early 1980s. Similarly, the Lotus Corporation, maker of one of the first
commercially successful spreadsheets, soon faced competition from other software firms.
Note that while competition may be frustrating for the firm, it is good for consumers. (In fact,
we will come back to this point when we consider the legal environment). Note that
competition today is increasingly global in scope.

 Economics:

Some firms in particular are extremely vulnerable to changes in the economy.

Consumers tend to put off buying a new car, going out to eat, or building new homes in bad
times. In contrast, in good times, firms serving those needs may have difficulty keeping up
with demand.

 Political:

Businesses are very vulnerable to changes in the political situation. For example,
because consumer groups lobbied Congress, more stringent rules were made on the terms of
car leases. The tobacco industry is currently the target of much negative attention from
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government and public interest groups. Currently, the desire to avoid aiding the enemy may
result in laws that make it more difficult for American firms to export goods to other
countries.

 Legal:

Firms are very vulnerable to changing laws and changing interpretations by the
courts. Firms in the U.S. are very vulnerable to lawsuits. McDonald’s, for example, is
currently being sued by people who claim that eating the chain’s hamburgers caused them to
get fat. Some impacts of the legal environment.

 Firms are significantly limited in what they can do by various laws—some laws, for example,
require that disclosures be made to consumers on the effective interest rates they pay on
products bought on installment. A particularly interesting group of laws relate to antitrust.
These laws basically exist to promote fair competition among firms. Some principles
involved here include:
o Collusion: Firms may not “conspire” to fix prices (agree that they will not sell below an
agreed upon price) or reduce services.
o Predation: Firms may not sell their products below their cost of production for the purpose
of driving competitors out of business so that they, themselves, can raise prices when
competition is reduced.
o Market share: Firms which have an unacceptably large market share may be “broken” up by
court order so that many smaller firms will be around to compete. (This is what happened to
AT&T, and at times, IBM has been worried about this prospect). • Tying: A firm that
controls a valuable product may not require the consumer to buy a more commonplace one to
get the scarce product. For example, Intel controls many of the newest microprocessors (e.g.,
Pentium IV). Intel also makes motherboards for computers; however, motherboards are made
by a lot of firms. Intel would be thought to abuse its effective monopoly power if it required
consumers to buy a motherboard in order to get its newest chips.
 Technological:
 68

Changes in technology may significantly influence the demand for a product. For
example, the advent of the fax machine was bad news for Federal Express. The Internet is a
major threat to travel agents.

 Social:

Changes in customs or demographics greatly influence firms. Fewer babies today are
being born, resulting in a decreased demand for baby foods. More women work outside the
home today, so there is a greater demand for prepared foods. There are more unmarried
singles today. This provides opportunities for some firms (e.g., fast food restaurants) but
creates problems for others (e.g., manufacturers of high quality furniture that many people
put off buying until marriage). Today, there are more “blended” families that result as parents
remarry after divorce. These families are often strapped for money but may require
“duplicate” items for children at each parent’s residence.

Environmental scanning:
Its helps the firm understand developments in the market. Such developments may involve
changes in the market place due to social trends (e.g., Gerber, a manufacturer of baby products,
faces a serious challenge with declining U.S. birth rates), technology (e.g., VCR makers are
threatened by DVD players), or new or potential competitors (e.g., Internet service providers are
being threatened by increasing marketing efforts from MSN). Note that environmental scanning
must be performed continuously, since environmental change does not cease.

Economic cycles:
The economy goes through cycles. In the late 1990s, the U.S. economy was quite strong, and
many luxury goods were sold. Currently, the economy is somewhat weak, and many firms are
facing the results. Car makers, for example, have seen declining profit margins (and even losses)
as they have had to cut prices and offer low interest rates on financing. Generally, in good
economic times, there is a great deal of demand, but this introduces a fear of possible inflation.
In the U.S., the Federal Reserve will then try to prevent the economy from “overheating.” This is
usually done by raising interest rates. This makes businesses less willing to invest, and as a
result, people tend to make less money. During a recession, unemployment tends to rise, causing
 69

consumers to spend less. This may result in a “bad circle,” with more people losing their jobs
due to lowered demands. Some businesses, however, may take this opportunity to invest in
growth now that things can be bought more cheaply.
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ECONOMICS

Historical Basis for Trade:

Throughout history, countries have tended to trade with each other, but usually to a much
lesser extent than they do today. There are several reasons:

 Difficulties in transportation and communication made it difficult to transport

manufactured goods which would, in any event, arrive with long delays after
manufacturing;
 Border disputes, a history of invasions, and other tensions between countries discouraged
trade with historical or potential enemies; and
 Paper money was less readily available, so it was more difficult to match products for
barter between the same buyer and sellers.

Today, trade is necessitated by several factors:

 Technological advances are so fast that, at any point, a different country may have the
latest and most effective technology in compelling areas (e.g., computers, medical);
 Certain product lines (e.g., automobiles) require tremendous economies of scale to be
cost effective, so these costs must be spread over several different markets;
 With advances in transportation, it becomes essential to take advantage of relative
strengths that different countries have (e.g., technological leadership, low labor costs).

Absolute advantage is typically measured in terms of labor input and refers to the number of
units that one worker can produce in one unit of time. For example, suppose that a Japanese
worker can produce fifteen shirts in one hour, while a Malaysian worker can produce only five.
Thus, the Japanese worker has the absolute advantage. However, suppose that the Japanese
worker can produce two cars a week, while the Malaysian worker can produce only one tenth of
a car in that amount of time. It can be shown that, assuming that these are the only two countries
that can trade with each other; it would be to the advantage of both countries to trade Japanese
cars for Malaysian shirts. This is known as relative advantage. In practice, it is often more useful
to think of relative technological sophistication vs. lower labor costs.
 71

Protectionism:
Although trade generally benefits a country as a whole, powerful interests within
countries frequently put obstacles—i.e., they seek to inhibit free trade. There are several ways
this can be done:

 Tariff barriers: A duty, or tax or fee, is put on products imported. This is usually a
percentage of the cost of the good.
 Quotas: A country can export only a certain number of goods to the importing country.
For example, Mexico can export only a certain quantity of tomatoes to the United States,
and Asian countries can send only a certain quota of textiles here.
 "Voluntary" export restraints: These are not official quotas, but involve agreements
made by countries to limit the amount of goods they export to an importing country. Such
restraints are typically motivated by the desire to avoid more stringent restrictions if the
exporters do not agree to limit themselves. For example, Japanese car manufacturers have
agreed to limit the number of automobiles they export to the United States.
 Subsidies to domestic products: If the government supports domestic producers of a
product, these may end up with a cost advantage relative to foreign producers who do not
get this subsidy. U.S. honey manufacturers receive such subsidies.
 Non-tariff barriers, such as differential standards in testing foreign and domestic
products for safety, disclosure of less information to foreign manufacturers needed to get
products approved, slow processing of imports at ports of entry, or arbitrary laws which
favor domestic manufacturers.

Justifications for protectionism: Several justifications have been made for the practice of
protectionism. Some appear to hold more merit than others:

 Protection of an "infant" industry: Costs are often higher, and quality lower, when an
industry first gets started in a country, and it thus be very difficult for that country to
compete. However, as the industry in the country matures, it may be better able to
compute. Thus, for example, some countries have attempted to protect their domestic
computer markets while they gained strength. The U.S. attempted to protect its market for
small autos American manufacturers were caught unprepared for the switch in demand
 72

away from the larger cars caught U.S. auto makers unprepared. This is generally an
accepted reason in trade agreements, but the duration of this protection must be limited
(e.g., a maximum of five to ten years).
 Resistance to unfair foreign competition: The U.S. sugar industry contends that most
foreign manufacturers subsidize their sugar production, so the U.S. must follow to remain
competitive. This argument will hold little merit with the dispute resolution mechanism
available through the World Trade Organization.
 Preservation of a vital domestic industry: The U.S. wants to be able to produce its own
defense products, even if foreign imports would be cheaper, since the U.S. does not want
to be dependent on foreign manufacturers with whose countries conflicts may arise.
Similarly, Japan would prefer to be able to produce its own food supply despite its
exorbitant costs. For an industry essential to national security, this may be a compelling
argument, but it is often used for less compelling ones (e.g., manufactures of funeral
caskets or honey).
 Intervention into a temporary trade balance: A country may want to try to reverse a
temporary decline in trade balances by limiting imports. In practice, this does not work
since such moves are typically met by retaliation.
 Maintenance of domestic living standards and preservation of jobs: Import
restrictions can temporarily protect domestic jobs, and can in the long run protect specific
jobs (e.g., those of auto makers, farmers, or steel workers). This is less of an accepted
argument—these workers should instead by retrain to work in jobs where their country
has a relative advantage.
 Retaliation: The proper way to address trade disputes is now through the World Trade
Organization. In the past, where enforcement was less available, this might have been a
reasonable argument.

Note that while protectionism generally hurts a country overall, it may be beneficial to
specific industries or other interest groups. Thus, while sugar price supports are bad for
consumers in general, producers are an organized group that can exert a great deal of influence.
In contrast, the individual consumer does not have much of an incentive to take action to save
about $5.00 a year.
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Effects of protectionism:
Protectionism tends to lead to additional tariffs or other protectionist measures by other
countries in retaliation, reduced competition (which results in inflation and less choice for
consumers), a weakening of the trade balance (due in part to diminished export abilities resulting
from foreign retaliations and in part because of the domestic currency loses power as there is less
demand for it). An overall effect may be a vicious cycle of trade wars as each country responds
to the other with a "tit for tat."

EFFORTS TO ENCOURAGE TRADE:

The General Agreement on Trade and Tariffs (GATT), which was negotiated at the Bretton
Woods Conference in 1947, sought to encourage international trade following World War II,
when many countries were in bad shape after the war.

There were several objectives:

 To encourage trade in general;

 To replace non-tariff barriers with tariff barriers—i.e., it is acceptable but not encourage
able to impose some burden on foreign products, but this must be in the form of a readily
identifiable duty rather than a more vague restriction which is less transparent;
 Reciprocity: Countries should respond in kind when other countries reduce tariffs or
barriers;
 Providing the most favorable trade terms offered to anyone to all members of the
agreement.

Note that the above represent general principles, which in practice are implemented with
numerous exceptions. For example, the Uruguay Roundtable Agreement, which set up the World
Trade Organization, literally runs several thousand pages. The EU and NAFTA are accepted, but
go against the provision of offering the best terms available to everyone.
The 1994 Uruguay Round Table Agreement resulted in the establishment of the World
Trade Organization (WTO). The main thrust of this organization is to expand the scope of trade
affected (e.g., services are now covered), the protection of intellectual property (e.g., patents,
 74

copyrights, and trademarks) and, most importantly, to provide binding decisions on disputes
which member countries must meet.

Stages in International Trade Agreements:

Trade between countries is generally started gradually—it takes a long time before
barriers are eliminated entirely or even reduced dramatically. The stages on slide 11 are points on
a continuum. Starting with heavy barriers to trade, countries may decide to move toward a "free
trade area," where two countries agree on one or more trade liberalizations—e.g., two countries
agree that bananas and steel can now be traded between the two countries with only a three
percent duty (in contrast, say, to a fifteen percent duty that existed earlier). Water melons and
charcoal may then be added later, along with products that may follow over time.
A customs union involves a more systematic trade agreement with reductions in duties
and quotas covering a large spectrum of goods and services. For example, NAFTA
systematically reduced tariffs and improved access of Canada, the U.S., and Mexico, to each
other’s markets. Significant barriers still exist, however.
In a common market, goods can be moved freely from one member country to another.
Although the EU has been calling itself a common market since the 1970s, it has not quite
reached that reality yet. To understand what is going on here, we need to understand the
distinction between duties (taxes imposed on goods which are imported, but not on goods
produced in the home country) and excise taxes (such as the American sales tax, which is
imposed on all goods, whether they are produced at home or abroad). Currently, individuals can
bring almost anything they want in from other member countries, although businesses are
somewhat less free. For example, one firm offered to deliver a pallet of two thousand five-
hundred beers from Germany, where "sin" taxes are lower, to Denmark. The authorities
intervened and it was decided that the consumers would have to go and pick up the beers abroad
themselves to benefit from the lower rates. One can now no longer take in duty free goods
moving from one EU country to another, but one can buy whatever one wants in another EU
country, paying a possibly lower sales tax there, and bring it back to one’s home country. It used
to be that many Danish consumers would take a ferry to Germany and buy a limited quantity of
duty free alcohol and tobacco which could be taken into Denmark with no additional duties or
excise taxes. This is no longer possible, since both countries are part of the EU, but now it is
 75

possible to take the ferry and not even go aboard in Germany, buying all desired goods in
German territorial waters at the lower German sales tax.
A monetary union involves countries abandoning their own currencies and monetary
policies. The European Union will soon replace the currencies of some member countries with
the Euro (not all countries are eligible to join, since some have too high a national debt or too
large a government budget deficit, and others have chosen not to join at this time). A monetary
union removes the ability of each country to control its own currency—it can no longer devalue
its currency to improve export opportunities—but also introduces greater stability in exchange
rates so that trade will not be interrupted by actual exchange rate fluctuations or avoided due to
fears or exchange rate instability. Note that actually implementing a monetary union is difficult.
The EU monetary union will be implemented over time—although contracts can now be
specified in terms of Euros, actual currency will not be introduced until next year, and even when
it is introduced, there will be a period of overlap where the Euro and the original currencies will
coexist.
A political union involves countries actually merging, which laws of the union
superseding national laws. At the present time, no such unions exist, although many trade related
decisions in the EU are now handled through the European Parliament. (The states of the United
States and various other countries such as Mexico, Brazil, and Germany are not genuinely
sovereign.) The bottom line here is to recognize that trade liberalization is a gradual process and
that not all countries will move all the way toward completely free trade.

ECONOMIC ISSUES:

 "Open" vs. "closed" currencies: Not all currencies can be freely traded—some
countries prohibit their currencies from leaving their borders, although this is mostly
confined to developing countries that want to encourage tourists to spend their remaining
currency rather than converting it back to their own currencies and spending it in their
home countries. There are, however, some currencies for which international markets are
not readily available, because the demand for those currencies is limited.
 76

Exchange rates come in two forms:

 "Floating"—here, currencies are set on the open market based on the supply of and
demand for each currency. For example, all other things being equal, if the U.S. imports
more from Japan than it exports there, there will be less demand for U.S. dollars (they are
not desired for purchasing goods) and more demand for Japanese yen—thus, the price of
the yen, in dollars, will increase, so you will get fewer yen for a dollar.
 "Fixed"—currencies may be "pegged" to another currency (e.g., the Argentinean
currency is guaranteed in terms of a dollar value), to a composite of currencies (i.e., to
avoid making the currency dependent entirely on the U.S. dollar, the value might be
0.25*U.S. dollar+4*Mexican peso+50*Japanese yen+0.2*German mark+0.1*British
pound), or to some other valuable such as gold. Note that it is very difficult to maintain
these fixed exchange rates—governments must buy or sell currency on the open market
when currencies go outside the accepted ranges. Fixed exchange rates, although they
produce stability and predictability, tend to get in the way of market forces—if a currency
is kept artificially low, a country will tend to export too much and import too little.
 Trade balances and exchange rates: When exchange rates are allowed to fluctuate, the
currency of a country that tends to run a trade deficit will tend to decline over time, since
there will be less demand for that currency. This reduced exchange rate will then tend to
make exports more attractive in other countries and imports less attractive at home.

Measuring country wealth:

There are two ways to measure the wealth of a country. The nominal per capita gross
domestic product (GDP) refers to the value of goods and services produced per person in a
country if this value in local currency were to be exchanged into dollars. Suppose, for example,
that the per capita GDP of Japan is 3,500,000 yen and the dollar exchanges for 100 yen, so that
the per capita GDP is (3,500,000/100)=$35,000. However, that $35,000 will not buy as much in
Japan—food and housing are much more expensive there. Therefore, we introduce the idea of
purchase parity adjusted per capita GDP, which reflects what this money can buy in the country.
This is typically based on the relative costs of a weighted "basket" of goods in a country (e.g.,
35% of the cost of housing, 40% the cost of food, 10% the cost of clothing, and 15% cost of
 77

other items). If it turns out that this measure of cost of living is 30% higher in Japan, the
purchase parity adjusted GPD in Japan would then be ($35,000/(130%) = $26,923.
In general, the nominal per capita GPD is more useful for determining local consumers’
ability to buy imported goods, the cost of which are determined in large measure by the costs in
the home market, while the purchase parity adjusted measure is more useful when products are
produced, at local costs, in the country of purchase. For example, the ability of Argentineans to
purchase micro computer chips, which are produced mostly in the U.S. and Japan, is better
predicted by nominal income, while the ability to purchase toothpaste made by a U.S. firm in a
factory in Argentina is better predicted by purchase parity adjusted income.
It should be noted that, in some countries, income is quite unevenly distributed so that
these average measures may not be very meaningful. In Brazil, for example, there is a very large
underclass making significantly less than the national average, and thus, the national figure is not
a good indicator of the purchase power of the mass market. Similarly, great regional differences
exist within some countries—income is much higher in northern Germany than it is in the former
East Germany, and income in southern Italy is much lower than in northern Italy.

Economic trends:
Certain countries have high levels of inflation; this figure, for example, has run at several
hundred percent at various times in Brazil. In that case, then, it becomes important to adjust
figures for inflation. Suppose that, as an illustration that the Brazilian economy grew from 1997
to 1998 from 200 trillion cruzeiros to 410 trillion while there was an inflation of 100%. The
economy, then, did not really double. Therefore, the "real" growth, adjusted for inflation, is (410-
200)/(100%+100%)-1 = (210/200)-1=5%. (You will not have to do such calculations on the
exam, but you should understand the principle of real [inflation adjusted] vs. nominal growth.)
Please note that even in countries that have inflation rates as moderate as 1-5%, adjustment for
inflation is still essential.
When one looks at an entire country, note that overall GDP may increase as population increases
while its per capita GDP increases less or even decreases. Suppose, for example, that the GDP of
India from 1997 to 1998 increases from $1 trillion to $1.02 trillion and that there is no inflation
but the population increases by 3%. The population adjusted economic growth would be ((1.02-
 78

1.00)/1.03)- 100%=98.5%-100%=-1.5%. Again, you will not be asked to make actual

calculations on the exam.
Some countries run trade deficits over long periods of time, and when this happens, their
currency is expected to weaken over time. In principle, this weakening ought to increase exports
and decrease exports, but since countries may be able to borrow from foreign lenders, this may
not always happen in practice. The U.S., for example, has been able to finance deficit spending
by foreign borrowing. While the U.S. dollar declined sharply against the yen in the 1980s and
early 1990s, it has remained much more stable in recent years at 100-130 yen per dollar.

CULTURE

Dealing with culture: Culture is a problematic issue for many marketers since it is inherently
nebulous and often difficult to understand. One may violate the cultural norms of another
country without being informed of this, and people from different cultures may feel
uncomfortable in each other’s presence without knowing exactly why (for example, two speakers
may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal
distance).

Warning about stereotyping:

When observing a culture, one must be careful not to over-generalize about traits that one sees.
Research in social psychology has suggested a strong tendency for people to perceive an "out-
group" as more homogenous than an "in-group," even when they knew what members had been
assigned to each group purely by chance. When there is often a "grain of truth" to some of the
perceived differences, the temptation to over-generalize is often strong. Note that there are often
significant individual differences within cultures.

Definition:
The text defines culture as "A learned, shared, compelling, interrelated set of orientations
for members of society." While memorizing definitions is not essential, note the following parts
of the definition:
 79

 Learned: Culture is not genetically based—if that were the case cultures across the
World would have been much more similar to each other. We learn what is considered
appropriate in our culture through trial and error. If a child engages in competitive
behavior, this might be rewarded in the United States with the expression of parental
approval, while in Japan it might result in subtle shows of disapproval, such as lack of
attention.
 Shared: The beliefs, interpretations, and behaviors are shared by all or most of the
people within the culture, so that it becomes a truly society-wide phenomenon.
 Compelling: Culture must have implications (such as social disapproval if contradicted)
in order to be considered important.
 Interrelated: Although there may be conflicts between elements of culture (e.g., respect
for seniority may come into conflict with a growing value of achievement in Singapore),
for the most part, elements of culture constitute a coherent and relatively consistent
whole. For example, the tendency for Japanese business people to bow when meeting
each other and the tendency of lower level Japanese employees to show great deference
to their superiors are both manifestations of a strong emphasis on respect.

Cultural lessons:
We considered several cultural lessons in class; the important thing here is the big
picture. For example, within the Muslim tradition, the dog is considered a "dirty" animal, so
portraying it as "man’s best friend" in an advertisement is counter-productive. Packaging, seen as
a reflection of the quality of the "real" product, is considerably more important in Asia than in
the U.S., where there is a tendency to focus on the contents which "really count." Many cultures
observe significantly greater levels of formality than that typical in the U.S., and Japanese
negotiator tend to observe long silent pauses as a speaker’s point is considered.
Elements of culture:
The text considers several elements of culture, such as the material culture, education, and
religion. Another way to look at cultural contents involves the areas of:

 Beliefs: While Americans may attribute success to hard work or skill, it may be attributed to
luck or connections in other cultures.
 80

 Attitudes: Beliefs, feelings, and behavioral intentions may differ. While the American may
appreciate getting a bargain in a sale, this may conjure up images of not being able to afford
the full price in other cultures.
 Goals: While "progress" (having new and improved products, for example) is considered a
good thing in the U.S., many Japanese parents are concerned that the "wa-pro" leaves their
children unable to write the traditional Japanese pictographs.
 Values: In the U.S., individual uniqueness is generally considered a good thing while in
some cultures fitting in with the group is a higher priority. Thus, for example, an American
may enjoy wearing relatively innovative clothing, which may be frowned upon in a more
collectivistic society.

Cultural characteristics as a continuum:

There is a tendency to stereotype cultures as being one way or another (e.g., individualistic rather
than collectivistic). Note, however, countries fall on a continuum of cultural traits. Hofstede’s
research demonstrates a wide range between the most individualistic and collectivistic countries,
for example—some fall in the middle.
Hofstede’s Dimensions. Gert Hofstede, a Dutch researcher, was able to interview a large
number of IBM executives in various countries, and found that cultural differences tended to
center around four key dimensions:

 Individualism vs. collectivism: To what extent do people believe in individual responsibility

and reward rather than having these measures aimed at the larger group? Contrary to the
stereotype, Japan actually ranks in the middle of this dimension, while Indonesia and West
Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward
individualism.
 Power distance: To what extent is there a strong separation of individuals based on rank?
Power distance tends to be particularly high in Arab countries and some Latin American
ones, while it is more modest in Northern Europe and the U.S.
 Masculinity vs. femininity involves a somewhat more nebulous concept. "Masculine"
values involve competition and "conquering" nature by means such as large construction
 81

projects, while "feminine" values involve harmony and environmental protection. Japan is
one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is
close to the middle, slightly toward the masculine side.
 Uncertainty avoidance involves the extent to which a "structured" situation with clear rules is
preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance
tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any
absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in
the lower range of the distribution.

Although Hofstede’s original work did not address this, a fifth dimension of long term vs.
short term orientation has been proposed. In the U.S., managers like to see quick results,
while Japanese managers are known for take a long term view, often accepting long periods
before profitability is obtained.
 82

CHAPTER-4
DATA ANALYSIS
 83

 To perform better than other competitors.

 Cross-check of the production with the planned displaying units.

 Determining the cost indulged.

 Listing up of the new products.

 Better service of the products.

 Increase sales on online platforms like Amazon, EBay, and Flipkart etc.

 Improvement in current product soft wares.

HP Inc's global net revenue from 1998 to 2018

(in billion U.S. dollars)
 84

HP Inc. net earnings from 1998 to 2018

(in billion U.S. dollars)
 85

Number of employees at HP Inc. from 2001 to

2018 (in 1,000s)

Data analysis is a process of inspecting, cleansing, transforming, and modeling

data with the goal of discovering useful information, informing conclusions, and
supporting decision-making. Data analysis has multiple facets and approaches,
encompassing diverse techniques under a variety of names, and is used in different
business, science, and social science domains. In today's business world, data
analysis plays a role in making decisions more scientific and helping businesses
operate more effectively.

Data mining is a particular data analysis technique that focuses on modeling and
knowledge discovery for predictive rather than purely descriptive purposes, while
 86

business intelligence covers data analysis that relies heavily on aggregation,

focusing mainly on business information.[2] In statistical applications, data
analysis can be divided into descriptive statistics, exploratory data analysis (EDA),
and confirmatory data analysis (CDA). EDA focuses on discovering new features
in the data while CDA focuses on confirming or falsifying existing hypotheses.
Predictive analytics focuses on the application of statistical models for predictive
forecasting or classification, while text analytics applies statistical, linguistic, and
structural techniques to extract and classify information from textual sources, a
species of unstructured data. All of the above are varieties of the data analysis.

Data integration is a precursor to data analysis,[according to whom?] and data

analysis is closely linked[how?] to data visualization and data dissemination. The
term data analysis is sometimes used as a synonym for data modeling.
 87

 Types of Data Analysis Method:-

 Descriptive
 Exploratory
 Inferential
 Predictive
 Causal
 Mechanistic

1. Descriptive (least amount of effort):  The discipline of quantitatively describing

the main features of a collection of data. In essence, it describes a set of data.

 Typically the first kind of data analysis performed on a data set

 Commonly applied to large volumes of data, such as census data
 -The description and interpretation processes are different steps
 Univariate and Bivariate are two types of statistical descriptive analyses.
 Type of data set applied to: Census Data Set – a whole population

2. Exploratory: An approach to analyzing data sets to find previously unknown

relationships.

 Exploratory models are good for discovering new connections

 They are also useful for defining future studies/questions
 Exploratory analyses are usually not the definitive answer to the
question at hand, but only the start
 Exploratory analyses alone should not be used for generalizing and/or
predicting
 Remember: correlation does not imply causation
 Type of data set applied to: Census and Convenience Sample Data Set
(typically non-uniform) – a random sample with many variables
measured
 88

3. Inferential: Aims to test theories about the nature of the world in general (or
some part of it) based on samples of “subjects” taken from the world (or some part
of it). That is, use a relatively small sample of data to say something about a bigger
population.

 Inference is commonly the goal of statistical models

 Inference involves estimating both the quantity you care about and
your uncertainty about your estimate
 Inference depends heavily on both the population and the sampling
scheme
 Type of data set applied to: Observational, Cross Sectional Time
Study, and Retrospective Data Set – the right, randomly sampled
population

4. Predictive: The various types of methods that analyze current and historical

facts to make predictions about future events. In essence, to use the data on some
objects to predict values for another object.

 The models predicts, but it does not mean that the independent
variables cause
 Accurate prediction depends heavily on measuring the right variables
 Although there are better and worse prediction models, more data and
a simple model works really well
 Prediction is very hard, especially about the future references
 Type of data set applied to: Prediction Study Data Set – a training and
test data set from the same population

5. Causal: To find out what happens to one variable when you change another.

 Implementation usually requires randomized studies

 There are approaches to inferring causation in non-randomized studies
 Causal models are said to be the “gold standard” for data analysis
 Type of data set applied to: Randomized Trial Data Set – data from a
randomized study
 89

6. Mechanistic (most amount of effort): Understand the exact changes in variables

that lead to changes in other variables for individual objects.

 Incredibly hard to infer, except in simple situations

 Usually modeled by a deterministic set of equations
(physical/engineering science)
 Generally the random component of the data is measurement error
 If the equations are known but the parameters are not, they may be
inferred with data analysis
 Type of data set applied to: Randomized Trial Data Set – data about
all components of the system.
 90

CHAPTER-5
FINDINGS & CONCLUSION
 91

FINDINGS

 Majority of the respondents come under the age group of 25-35.

 50% of the respondents have got the experience of 5-10 years.
 100% of the respondents are getting the on the job training.
 Majority of the respondents are satisfied with their present salary.
 60% of the respondents are satisfied with the incentive scheme
 50% of the respondents are aware with the Job responsibility.
 43.33% of the respondents have the Job knowledge before the assignment of a particular
job.
 60% of the respondents believe that they possess the Leadership qualities in them which
will be the major consideration for the selection process.
 40% of the sample size reveals that qualification is an important factor in the process of
Recruitment and Selection
 Majority of the respondents are satisfied with their relationship between the top level
management and the low level management.
 80% of the respondents feels the communication must be improved Majority of the
respondents are satisfied with the working condition.
 80% of the respondents agree that communication plays a major role in the selection
process
 56.6% of the respondents are good with their communication skills
 63.3% of the respondents have opinion saying that they are satisfied with the safety
measures provided by the organization.
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CONCLUSION

In the present competitive & dynamic environment, it has become essential for organization to
build and sustainable. in competitive advantage, the Communication skill set has assumed more
importance than even before. Dynamic and growth-oriented organization recognizes
Communication as an important aspect of the Recruitment and Selection system for managerial
function in a rapidly changing and economic environment.

Insurance industries should possess a valuable work force with good communication skill sets to
get a good deal or business from their customers. In this sector the Open Market channel is the
main source of revenue for the company for which they should be able to communicate well
with their clients. Then the company can reach its profitability and objectives easily.

The company should take the suggestions and ideas from the employees and can conduct and
examine the communication skill set within the employees. So that they can analyze the need
and act accordingly for a better result and the growth of its own and valuable workforce
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CHAPTER - 6
SUGGESTIONS
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SUGGESTIONS

 The organization should provide or set up a communication lab for the

benefit of the fresher and existing employees that makes a career
development and new opportunity to grow up in the organization.
 This increases the employee morale and helps to attain the target.
 Communication classes should be conducted timely to all employees should
be followed by organization.
 I have seen the attitude and style of the working of this company’s people is
very good and target oriented. They are full of zeal to work for the
organization which is a good sign for the development of the company.

 Even in this recession period when most of the companies are struggling to
survive this company is one of those strong companies which is not only
stable but making huge profits.

 Company should focus more on promoting things online as online

promotion is increasing and it have more visibility.

 There should be a more appropriate feedback system in HP.

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BIBLIOGRAPHY

 Wikipedia.org/wiki/Hewlett-Packard

 Hpshopping.in

 Support.hp.com

 Facebook.com/HPIndia/

 Amazon.in/HP-Laptops

 www8.hp.com/in/en/home.html

 Hpconnected.com/us/en

 Linkedin.com/company/hp/
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QUESTIONNAIRE

1. HP has enough platforms to sell their products?

(a) Strongly Agree (c) Disagree
(b) Agree (d) Strongly Disagree

2. What according to you is the HP product’s best selling point?

(a) Cheap (c) Easy availability
(b) Quality (d) Others

3. What is the target audience for HP?

(a) High income group (c) lower Income Group
(b) Middle Income Group (d) All

4. Where does HP sells their products mostly?

(a) In a business premise (c) Online
(b) Through Agents (d) through business sources

5. What Does the Marketing plan of HP covers?

(a) Internet (c) Sales Promotion
(b) Advertising (d) Direct Marketing
(e) Public Relations
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6. How can marketing help increase in sale for HP?

(a) Increase visibility (c) Building a brand name
(b) Increasing customer knowledge (d) no use

7. What is the best medium for the advertisement according to your view?
(a) Local Newspapers (c) Radio
(b) Hoardings (d) Campaigns
(e) Internet

8. What according to you can be other modes of marketing that can be used by
HP.
(a) Email Marketing (c) Social Media Marketing
(b) Direct Marketing (d) Mobile Web Marketing
(e) All of them

9. How much according to you HP are willing and realistically able to spend on
advertisement and promotion services?
(a) 0 to 10% of Revenue (c) 20% to 30% of Revenue
(b) 10% to 20% of Revenue (d) 30% to 40% of Revenue