Entrepreneurship 5 Marks Question

In order to distinguish their products from that of their competitors, the marketers give some names to their products. After identifying the concept, name and give two examples each of its different types.

Satnam, an IIT-IIM graduate, started three chemists shops at Amritsar, Patiala and Chandigarh in the name of 'Quality Medicines'. Encouraged with the success of these shops Satnam opened 50 more shops in different parts of Punjab. His strategy was to cut price, focus on lower and upper middle class and open shops near hospitals. He operated on very thin margins. But he was not able to maintain sufficient funds to meet the day-to-day expenses of the business. The staff at the shops did not give much attention to the customers, and there was very poor system of control. Because of this mismanagement, he started incurring huge losses, and his business failed.Based on the above paragraph, identify and explain any four causes of business failure of Satnam.

What is advertising? State with reasons the mode of advertising you would adopt to sell ‘Fast Moving Consumer Goods’ in urban centres.

Jaishree started a readymade garments shop for ladies in a residential area where mostly government servants live. Suggest her the ways to make her business a successful one.

Raghav after doing his B. Pharma. Degree from a reputed government college started two chemist shops in two different localities of his home town. Encouraged with the success of these shops, he started six more shops in different cities of the State. His strategy was to cut price, focus on lower and middle-class patients and open shops near hospitals. He operated on very thin margins. But he was not able to maintain sufficient funds to meet the day to day expenses of the business. The staff of the shops did not give much attention to the customers, and there was very poor system of control. Because of this mismanagement, he started incurring huge losses, and his business failed.
Based on the above para identify and explain any four causes of business failure of Raghav.

‘Mittil Ltd’. is a leading company for manufacturing of soft toys for children. The company is in the process of developing a prototype for a talking pillow, ‘Talk O Hug’, which would enable parents to convey messages to their children when they are away at work. The mechanism is such that the message is recorded in the device in the pillow and the moment the child touches the pillow, the speaker sensors would repeat the message recorded by the parents for their children. Though an innovation for India, imported versions of this product are already available in the market. The management wanted to devise a pricing strategy to target the ‘switchers’ present in the market.

1. Identify the pricing strategy that the management is planning to adopt. State the marketing objective of the company behind this pricing decision.
2. State any two advantages and one disadvantage of adopting this pricing policy to ‘Mittil Ltd.’
3. Keeping in mind the nature of the product, suggest the distribution channel that would suit the company for distributing ‘Talk O Hug’.

Explain the methods of negotiation.

What major considerations affect the variable price method?

Why is packaging an important ingredient in the Product Mix?

What is variable pricing technique?

When does an entrepreneur employ dealers for sales?

Why do different entrepreneurs adopt different types of market mix for their products?

What are the advantages of penetrating pricing method?

What is meant by base pricing and discount?

What is trade marking? Why is it necessary?

What is trade discounting? Why is it done?

Will you, as an entrepreneur, use the base pricing method for consumable items? Justify your answer.

Imagine that you have started selling FMCG goods then what kind of promotional strategies will you be using?

Enlist some typical sales promotion activities.

Floral Art and Craft' opened its first store in Mumbai in the year 2010 with the objective of providing its customers with fresh flowers creatively packed and value for money.It procures fresh flower directly from the farmers. The organization makes sure that the farmers adopt organic means to nourish the soil and do not use chemical fertilizers as it degrades the soil fertility. Packaging material is procured from specially abled craftsman of I CAN.
Floral Art and Craft's facebook and twitter page encourages two way communication with its customers. These social media channels provide a platform through which it can interact with customers and access their opinion about the brand. The store also uses direct e-mails to their frequent customers to inform them about different schemes and other promotional messages. Its website promotes the store by organizing different flower decorating classes and competitions using the products of I CAN.

1. Identify the promotion strategy adopted by I CAN. Also state the lines from the text that helped to identify the form.
2. State any two features of this type of promotion strategy.
3. State two values communicated to the society.

Explain the various types of brands available.

Differentiate between Standardized product and Customized product. Which channel of distribution is best suited for customized product/ goods?

How will you show that market mix is dependant on the type of the product?

While selecting a brand name, what care must be taken by a entrepreneur?

Mention the disadvantages of penetrating pricing method.

How does market mix play an important role in enhancing the sale?

Explain Promotional mix in detail.

Saksham has opened a general store in the garage of his home. Which approach of promotion should be used by him?

How is vendor management done?

What is penetration pricing method and enlist it’s advantages and disadvantages.

Give advantages and disadvantages of cost plus pricing method.

Explain the reasons for business failures.

Which values are exhibited by an enterprise which makes use of public relation' as a tool of sales promotion?

Aarav has decided to open a retail oultet for autoparts. His friends and family has advised him to establish certain goals so as to be able to judge the progress of his venture. But Aarav is of the view that goal setting will serve no purpose at all. Do you agree with Aarav? Give reasons for you answer.

What are the various factors which help in employee management?

Suggest any six techniques to Sonu, which will help him in boosting the sales.
OR
Assuming you plan to manufacture detergent powder, how would you assess the size of the market of your locality? What strategies would you adopt to sell the product?

Creating Value through Marketing Mix In increasingly competitive markets, consumers have a greater choice of where they buy their goods and services. For an organisation to meet its business objectives, it has to find out what the consumers require and then identify the best way in which it can satisfy these needs and wants. Creating a competitive advantage can be difficult. A unique marketing strategy with clear objectives is vital to ensure effective promotional activity. Since, opening its first store in 1913, Aldi has established itself as one of the most reputable retailers in the global business market by providing great value and quantity. Aldi's goal is simple. "To provide our customers with products they buy regularly and ensure that those products are of the highest possible quality of guaranteed low prices. Aldi's products are sourced from hand-picked suppliers whose products are sold under Aldi's own brand labels. Aldi's main marketing objective is to grow its market share within the UK grocery market. With the economic crisis came an increased demand for value for money. Market research identified that 80% of Aldi's customer base also shopped at other supermarkets. These customers spent around £20 billion per year in the other stores. Aldi's marketing strategies, therefore focused on generating customer loyalty. Aldi focused its marketing efforts on encouraging customers that are already familiar with the brand to shop at Aldi more often. Another key focus of Aldi's marketing strategy is on demonstrating that Aldi brands are of equal quality to well known brands such as Heinz and Fairy Liquid. To do this, Aldi's ran blind taste tests amongst a cross section of shoppers. These confirmed that the majority of consumers that liked the famous brands also liked Aldi's brands. These findings formed the basis to Aldis 'Like Brands' marketing campaign. This provided Aldi with a platform to communicate its quality and value messages effectively. Aldi's immediate challenge for the 'Like Brands' campaign was to increase market share from 2.3% to 2.5%. Although, this sounds very little, the retail grocery market is very large. A single 0.1% is worth an extra £65 million revenue. This case study focuses on the marketing strategies used by Aldi to increase its market share and encourage loyal customers. The Marketing Mix The Chartered Institute of Marketing describes the term marketing as "The process responsible for identifying, anticipating and satisfying Price consumer requirements profitably'. This places consumers at the heart of every organisation. The marketing mix is often referred to as the Marketing 4 Ps. It involves creating a unique blend of the right product, sold at mix the right price, at the right place, using the most suitable methods of Promotion | Product promotion. A marketing mix is a complex set of variables. The marketing mix of every business will be different. Aldi's mix D focuses on providing high quality products that are cheaper alternatives to famous brands.Aldi's marketing mix therefore focuses on:

1. Product- high quality 'Like Brands'.
2. Price- Aldi offers lower prices than its competitors, without compromising on quality.
3. Place- Aldi outlets are expanding globally.
4. Promotion- Aldi uses a combination of above the line and below the line promotions with a focus on its 'Like Brands' and 'Swap and Save' campaigns.

Balancing the Mix Organisation need a balanced marketing mix to meet the needs of their customers. Aldi's focus is on offering the best possible quality products at the lowest possible prices. Every buyer for Aldi, from fresh fruits and vegetables to meats and electronics, is an expert in his field. They look for products from around the word. This enables them to get the finest quality products that Aldi then sells under its own brand labels. Selecting the prices is one of the most difficult considerations when developing a marketing mix. Different Pricing Strategies that are commonly Used Include

1. Market penetration: Charging lower prices for new products to help them enter the market and gain market share quickly.
2. Competitive pricing: Pricing at a slightly lower prices than competitors.
3. Strategic pricing: Emphasising the quality of brand positioning of a product to allow a higher price to be charged.

Competitive pricing is a key strategy for Aldi. Aldi is able to offer quality products at low prices as it buys in great volume. The fact that Aldi buys such large quantities of these products allows great leverage for negotiating the best possible prices with its suppliers. This is called economies of scale. Buying large quantities of each products allows Aldi to pass these savings to its customers. The place element of the marketing mix involves identifying where the product or service will be sold. Aldi keeps its store layouts simple to limit waste and keeps the costs down. This means Aldi can focus on offering its customers the lowest possible prices for its products. When considering new store locations, Aldi takes into account:

1. The number of people visiting an area as well as the demography of the area, e.g. the population of the area should be more than 30000 people.
2. The position of store- Aldi focuses on edge of the town centre locations with good visibility from a main road and not too much competition.
3. The accessibility of the store and its public transport links.
4. The number of parking spaces available.

Above the Line Promotion For Aldi to achieve its objective of increasing its market share, it had to ensure its promotional activity demonstrated the balance of its marketing mix, e.g. to increase customer loyalty it had to communicate its key quality and value messages. Promotion helps to:

1. Increase awareness and improve brand recognition.
2. Increase demand for products
3. Improve brand image
4. Highlight the superiority of products and services.

Above the line promotions are paid for advertising aimed at a mass audience. These include the media such as television, radio, magazines and newspapers that reach a large number of people. This form of promotion can be costly. It can also be difficult to target specific audiences. Aldi uses a range of above the line methods to reach its customers and potential customers. These include Advertising on TV the 'Like Brands' campaign features 20 second TV adverts which focus on a particular product. The adverts show, a famous brand as a benchmark for quality side-by-side with an Aldi brand product. They use the slogan 'Like Brands, Only Cheaper'. This reinforces the message that Aldi products are cheaper than leading brands but equal in terms of quality. The adverts provide personality to the Aldi brand use humour which helps to build trust and an emotional connection with target audiences. Printed leaflets are distributed within stores (1 million copies printed per week) and also to customers living in areas surrounding the stores. These leaflets help to reinforce the 'Like Brands' campaign. They also showcase products with limited availability and seasonal offers available in stores. Newspaper adverts extend the 'Like Brands' campaign and help to showcase a variety of product categories. They also communicate Aldi's Swap and Save message. This campaign demonstrates the amount that shoppers could save if they swapped their weekly shop to Aldi. They compare Aldi products to famous brands to demonstrate Aldi's value for money message. In-store posters are also used to highlight the 'Swap and Save' message. Below-the-line promotion uses different ways to engage with customers. These methods can be more easily targeted to specific audiences than above-the-line methods. They offer organisations a greater level of control over their communications. Aldi Uses a Range of Below-the-line MethodsThese include:

1. Social media.
2. Targeted e-mails to customers.
3. 3rd party endorsement and awards.
4. Public relations and media relations.

Aldi's Facebook and Twitter pages encourage two-way communication with customers. These social media channels provide a platform through which Aldi can interact with customers. It can then assess their opinions about the brand. One objective of this form of promotion is to create "Aldi Advocates'. These are consumers who recommend Aldi to others, through stimulating interactions about the high quality and low prices of Aldi product. e.g. the 'I love Aldi' campaign asked fans to send a virtual Aldi Valentines card to a Facebook friend. This was encouraged by providing rewards. The campaign gave consumers the chance to win a £10 voucher. They could also win a box of Aldi chocolates for their Valentine. The campaign also encouraged consumers to complete the sentence 'I love Aldi because ...' directly onto Aldi's Facebook page to encourage positive brand feedback. Aldi also uses direct e-mails. These e-mails allow Aldi to communicate a variety of message to target customers. e.g. They can convey the 'Swap and Save' message as well as to promote seasonal message such as products associated with Pancake Day. Aldi's website is an integral part of its below-the-line promotion. It features all of Aldi's key promotional messages as well as additional content to engage consumers. Examples include recipe ideas and weekly offers. Aldi developed the www.likealdi.co.uk micro-website to further encourage brand engagement with the 'Like Brands' TV campaign. The site provides consumers with the opportunity to upload their ideas for the next Aldi TV campaign. Aldi also uses a dedicated recruitment website to promote its employer brand message and career opportunities. A further below-the-line method used to highlight the quality of Aldi's products is positive 3rd party endorsements. Aldi has entered over 1000 of its products into awards such as Grocer Golds, Pizza and Pasta Awards (PAPA) and the British Frozen Food Federation Awards. In 2012, Aldi was awarded 'Best Supermarket' by Consumer Watchdog. It beats competition from Marks and Spencer and Waitrose. Further positive endorsements for production on TV and in the press re-affirm the message that Aldi products are of the highest quality and also are great value for money, e.g. Aldi's Christmas pudding was awarded runner up and acknowledged as a 'bargain' in a taste test comparison in Good Housekeeping magazine. Effective public and media relations help to create positive press exposure. Aldi has secured record coverage through hardworking and innovative media relations. Journalists from newspapers such as The Grocer, The Financial Times and The Times were invited for exclusive interviews with Aldi's Group of Managing Directors. They discussed record breaking sales results. Aldi: Creating Value Through the Marketing Mix Further coverage was gained through targeting key media at specific times with seasonal promotional message. The 'Swap and Save' campaign highlighted the savings available through shopping at Aldi at times when value for money is high on the agenda. This was particularly relevant with its 'Back to School' and Christmas products. Conclusions Aldi has a distinct approach to retailing that has given it a competitive advantage in a crowded marketplace. Aldi's unique balance of the marketing mix enables it to provide high quality, own branded products at the lowest possible price. Aldi's innovative 'Like Brands' and 'Swap and Save' marketing campaigns are improving brand perceptions. They are aiding the achievement of Aldi's marketing objectives. The campaigns have increased Aldi's sales per store by +100% over 3 years through creating more loyal customer. Its multi-channel promotional activity is engaging consumers and creating positive feedback. Courtesy The Times 100 Business Case Studies.

1. Give the definition of marketing, as given by the Chartered Institute of Marketing:
2. What does Aldi's marketing mix focuse on?
3. Which pricing strategy is followed by Aldi? Give any one benefit of this method.
4. What are the factors considered by Aldi, when deciding the location of its store?
5. What is Aldi's goal?
6. How does Aldi use social media as below-the-line promotion method ?

Flipkart, an e-trading business giant, started operations with online selling of goods. People who wanted to buy at ease at any time. Through its quality service and timely delivery and return policy it has crafted a position for itself. It has developed its logo very attractive. The brand volue has increased a lot.

1. What do you understand by 'brand?
2. What is a logo? Give any two functions that logo serves.

The Apple iphone, a smartphone was launched by Apple in January 2007 in North America and when it went on sale it quickly sold out. It has launched the sixth generation phone, i.e. iphone in 2012. The latest is iphone 6+. Apple has been doing continuous research and development to attain this position, it has invested a lot into R&D. It prices its latest phone quite high. Which pricing strategy is being followed by Apple? Give reason.

What does 'product' mean in marketing mix? Explain the various elements of product mix.

What do you mean by remote market? How would you arrange a distribution system for the same?

Saurabh is the HR Manager of Flintstone Limited He is well aware of the importance of this department in employee relationship management and is also of the view that an organisation should be sensitive towards employees needs. Give any two ways in which the needs of the employees be assessed by Saurabh.

Imagine that you have started selling FMCG goods, then what kind of promotional strategies will you be using?

Sony is famous for its quality products in the electronic industry. Inspite of high prices, demand for its products never fall. Which aspect of management is responsible for this?

Samar has started his business one year back and deals in artificial women jewellery. Being aware about the importance of goal-setting, he has set the following goals for his business:

1. Sales should be enough.
2. Profit per month from first year of operation should be ₹ 2,50,000.
3. in the backdrop of recession in the economy, his goal was to open 5 retail outlets throughout the city.

Are Samar's goals appropriate? Which factors should be considered by him while establishing achievable and relevant goals?

Saurabh has just started his business of selling designer furniture. Being new to the business community, he approaches you to tell him about how to promote his business. So, tell him the elements of promotion mix.

Explain any 6 commonly used media options.

Samiksha is running her boutique for past 3 years. Recently, she has observed that her customer base is diminishing because of increased competition as well as peoples growing inclination towards readymade garments. Is this a cause of concern? Give any two ways to diversify customer base.

Mother dairy dealing in dairy products and fruits and vegetables sells it various products like milk, curd, cheese, fresh vegetables, etc., through its own outlets. It also deals in frozen vegetables, processed food like fruit juices, jams, pickle, etc. Its slogan is 'Happy People, Happy Food.' It success its milk requirement from dairy cooperatives.

1. What is the tagline of Mother dairy?
2. What type of distribution channel is adopted by Mother dairy? Explain.
3. What values it provides to the society?

RW, a public limited company collects waste from houses, offices and factories. Most of the waste is burnt to produce heat and electricity for the company's own use. This saves the cost for the company. But recent increase in customers has increased waste and now it has started dumping waste in old quarriwhere it is causing bad smell and gas emissions. In its business plan, it has stated 'RW will become country's number one waste business and will protect the environment for our children's benefit'.

1. What is the difference between private limited company and public limited company? Give one difference.
2. The company's goals do not appear to be completely S.M.A.R.T. Do you agree? Give reasons.
3. What values are not taken care of by RW (any two)?