Business Admin-ISBM
1) Discuss how the environment acts does as a stimulant to business. Analyse why business
often does little for the preservation of physical environment despite the fact that it is
significant for business activity. (10 Marks)
2) Explain the relevance of ecological issues to business environment (10 Marks)
3) What do you understand by Business Social Responsibility (B S R ). How this can be used
to improve the Business Environment. (10 Marks)
4) Explain how the business in an organization can be regulated with regard to the
Organization’s Basic Objectives. (10 Marks)
5) Describe in detail the different role played by the Government towards enriching the
business Environment. (10 Marks)
6) In the Business Environment context, explain how the Political and legal Environment of
business plays a vital role. Justify by bringing in suitable examples. (10 Marks)
7) Evaluate the advantages and disadvantages of FDI. What is your opinion on the role of FDI
in the Retail Sector? Justify your views with India's experience in this sector. (20 Marks)
Business Communication-ISBM
CASE-1 (20 Marks)
Nestle has launched quality street ,lion and after 8 choclates imported from Europe. Qualtty Street is an assortment of chocolates priced at Rs. 7 5 for 218 gm. After Eight is a popular adult chocolate priced at Rs.25 for 20 gm and Lion is a caramel wafer bar priced at Rs. 20 for a 45 gm bar. (Kit Kat )is priced at Rs. 6 for a 17 gm bar and has a chocolaty taste while Lion has a crunchy taste). The brands have different tastes and will appeal to different target segments (though the target segment is one which may have already been exposed to these brands during visits abroad). These brands have been introduced in metros in upmarket stores which sell brands bears the label "lmported by Nestle India Ltd." indicating that they may be better than smuggled ones (which may be stale).
Question :
1 Suggest suitable media /media vehicles for promoting these brands. Give reasons in support of your answer
2 What business communication media you will utilize if you have to launch a soap in rural India?
CASE -2 (20 Marks)
The herbal shampoo market is valued at around Rs. 100 crores. Ny/e, Ayur, Dqbur and Biotique are some of the established brands in the market.
Helene Curtis (JK Group) has introduced a premium herbal shampoo (with variants Shikskai, henna and qmla and brqhmi and josur) priced between Rs. 80 and Rs. 90 (500 ml) for different types of hair. The proposition is the benefits offered by lhe variant based on the combination of herbs, benefits offered by the variants range from extra protection and nourishment to colour, body and bounce. The shampoos have been launched under the brand name Premium Herbsl Shsmpoos and they target urban housewives with a monthly household income of Rs.25,000. The brand is distributed through 7 0,000 retail outlets and 120 Raymond shops. The company has planned only point of purchase (POP) posters initially and may consider the electronic media later. The shampoo has an annual advertising expenditure of Rs. 10 crores.
1 Comment on the marketing mix of JK's Premium Herbsl Shampoos ?
2 How can you make their communication more effective ?.
CASE 3 (40 Marks)
Attempt all cases of the following: (10 marks each)
(i) Iran Rafsanjan Co., Rafsanjan City, Iran has taken a marine insurance policy No. VB/84/3629/29 dated
20th December, 2005 from Albroz Insurance Co., Kerman City, Iran for the import of 500 tractor gears
from Apex Products (India) Ltd., Delhi. The exporter shipped the cargo on board vessel — SEEMA on
26th December, 2005 for Bandar Abbas Port of Iran.
As per the letter of credit condition, the exporter was required to fax the shipment details to Albroz
Insurance Company within 24 hours of the shipment. However, the exporter could not fax such details due
to change in telephone (fax) number of the insurance company.
Draft an express telegram to intimate shipment details.
ii) Yours is a multinational company having joint venture with a Chinese company. Plant is to be located at
Surat. The company immediately needs an Executive - Foreign Affairs (male/female) with ability of
“writing and speaking Chinese language.
Draft a recruitment advertisement for publication under classified column of a national daily. Salary-is no
bar for the right candidate. E-mail address -info@krishnafashions.com
iii) The local head office of State Bank of India is located at 11, Parliament Street, New Delhi-110001. The
bank wants to construct 76 flats at Noida for its employees and invite applications for pre-qualification of
contractors. Full details are available on its website - www.sbi.co.in or www.statebankofindia.com/
procurement_news.
Draft a notice for pre-qualification of contractors.
iv) The Joint Admission Board (JAB) of Indian Institutes of Technology in its meeting held on 17th
September, 2005 at Kolkata has taken some decisions with regard to Joint Entrance Examination (JEE)
2006, i.e., to appear in JEE, one must secure at least 60% marks (55% for SC/ST and PD) in 10+2
examination; a candidate can have only two attempts with effect from JEE-2006; and a candidate who
joins any of the IITs through JEE-2006 will not be permitted to appear in JEE in future.* It was also
decided that candidates, who have passed their qualifying examination in 2005 or earlier, will be allowed
to appear in JEE-2006 as the last chance, witji no consideration of marks or attempts at JEE subject to age
requirements. On behalf of the JAB, draft a suitable press release to be issued by organising chairman
highlighting these decisions. (5 Marks each)
Business Communication-ISBM
SUB : BUSINESS COMMUNICATION
N. B. : All cases are Compulsory.
CASE NO. 1
How to Proofread like a Pro :
Tips for creating the Perfect Document
You’ve carefully revised and polished your document, and it’s been sent off to the word-processing department or a designer to be put into final form. You can breathe a sigh of relief, but only for the moment : You’ll still be proofreading what comes out of the printer. To ensure that any document is error-free, always proofread the final version. Following are some hints to help make your proofreading more effective.
§ Multiple passes – Go through the document several times, focusing on a different aspect each time. The first pass might be to look for omissions and errors in content; the second pass could be for layout, spacing, and other aesthetic features; a final pass might be to check for typographical, grammatical, and spelling errors.
§ Perceptual tricks – Your brain has been trained to ignore transposed letters, improper capitalization, and misplaced punctuation. Try (1) reading each page from the bottom to the top (starting at the last word in each line,) (2) Placing your finger under each word and reading it silently, (3) making a slit in a sheet of paper that reveals only one line of type at a time, and (4) reading the document aloud and pronouncing each word carefully.
§ Impartial reviews – Have a friend or colleague proofread the document for you. Others are likely to catch mistakes that you continually fail to notice. (All of us have blind spots when it comes to reviewing our own work)
§ Typos – Look for the most common typographical errors (typos): transposition (such as teb), substitution (such as economic), and omission (such as productivity)
§ Mechanics – When looking for errors in spelling, grammar, punctuation, and capitalization, if you’re unsure about something, look it up in a dictionary, a usage book, or another reference work.
§ Accuracy – Double –check the spelling of names and the accuracy of dates, addresses, and all numbers (quantities ordered, prices, and so on). It would not do to order 500 staples when you want only 50.
§ Distance – If you have time, set the document aside and proofread it the next day.
§ Vigilance – Avoid reading large amounts of material in one sitting, and try not to proofread when you’re tired.
§ Focus – Concentrate on what you’re doing. Try to block out distractions, and focus as completely as possible on your proofreading task.
§ Caution – Take your time. Quick proofreading is not careful proofreading.
Proofreading may require patience, but it adds creditability to your document.
Career Applications :
1. What qualities does a person need to be a good proofreader ? Are such qualities inborn, or can they be learned ?
2. Proofread the following sentence :
application of these methods in stores in San Deigo nd Cinncinati have resulted in a 30 drop in robberies an a 50 percent decling in violence there, according at the developers if the security system, Hanover brothrs, Inc.
CASE NO. 2
ACTIONS SPEAK LOUDER THAN WORDS ALL AROUND
THE WORLD
“He wouldn’t look me in the eye. I found it disconerting that he kept looking all over the room but rarely at me,” said Barbara Walters after her interview with Libya’s Colonel Muammar al-Qadhafi. Like many people in the United States, Walters was associating eye contact with trustworthiness, so when Qadhafi withheld eye contact, she felt uncomfortable. In fact Qadhafi was paying Walters a compliment. In Libya, not looking conveys respect, and looking straight at a woman is considered nearly as serious as physical assault.
Nonverbal communication varies widely between cultures, even between subcultures, and the differences strongly affect communication in the workplace. Whether you’re trying to communicate with your new Asian American assistant, the Swedish managers who recently bought out your company, the African American college student who won a summer internship with your firm, or representatives from the French company you hope will buy your firm’s new designs, your efforts will depend as much on physical cues as on verbal ones. Most Americans aren’t usually aware of their own nonverbal behavior, so they have trouble understanding the body language of people from other cultures. The list of differences is endless.
§ In Thailand it’s rude to place your arm over the back of a chair in which another person is sitting.
§ Finnish female students are horrified by Arab girls who want to walk hand in hand with them.
§ Canadian listeners nod to signal agreement.
§ Japanese listeners nod to indicate only that they have understood.
§ British listeners stare at the speaker, blinking their eyes to indicate understanding.
§ People in the United States are taught that it’s impolite to stare.
§ Saudis accept foreigners in Western business attire but are offended by tight – fitting clothing and by short sleeves.
§ Spaniards indicate a receptive friendly handshake by clasping the other person’s forearm to form a double handshake.
§ Canadians consider touching any part of the arm above the hand intrusive, except in intimate relationships.
It may take years to adjust your nonverbal communication to other
cultures, but you can choose from many options to help you prepare. Books and seminars on cultural differences are readily available, as are motion pictures showing a wide range of cultures. You can always rent videos of films and TV shows from other countries. Examining the illustrations in news and business magazines can give you an idea of expected business dress and personal space. Finally, remaining flexible and interacting with people from other cultures who are visiting or living in your country will go a long way toward lowering the barriers presented by nonverbal communication.
Career Applications :
1. Explain how watching a movie from another country might help you prepare to interpret nonverbal behavior from that culture correctly.
2. One of your co-workers is originally from Saudi Arabia. You like him, and the two of you work well together. However, he stands so close when you speak with him that it makes you very uncomfortable. Do you tell him of your discomfort, or do you try to cover it up ?
CASE NO. 3
MASTERING THE ART OF CONSTRUCTIVE CRITICISM
To become better writers, people need to be evaluated, but taking criticism
from others is often difficult. The way you tell someone “ You did it wrong” can destroy goodwill and cooperation, or it can build the relationship and help the person learn from the mistake, improve performance, and retain self-esteem. To criticize more constructively, follow these suggestions :
§ Get all the facts first : Don’t accept hearsay or rumors.
Find out specifically who did or said what, when, where, why, and how
§ Don’t act in haste : Never act while you’re angry. Think things out before you write or speak, and then explain your criticism calmly, rationally, and objectively.
§ Phrase your remarks impersonally : Criticize the mistake, not the person. Focus your remarks on the action only, and analyze it thoughtfully.
§ Never criticize in an offhand manner : Treat the situation seriously. Take the time to state the problem in detail, explaining what was wrong and why.
§ Avoid an abusive tone : Ridiculing someone, talking down to a person, or using sarcasm prevents people from accepting what you have to say.
§ Make the offense clear : Don’t talk in generalities. Be specific about exactly what was done wrong.
§ Preface the criticism with a kind word or a compliment : Start with a few words of praise or admiration, saying how much you value the person. First the good news, then the bad.
§ Supply the answer : Explain how to do things right. Don’t dwell on the mistake, emphasize how to correct it and how to avoid repeating it.
§ Ask for cooperation : Don’t demand cooperation. Asking makes the person feel like a team member and provides an incentive to improve.
§ Limit yourself to one criticism for each offense : Don’t dredge up or rehash past mistakes. Focus on the current problem.
§ End on a friendly note : Don’t conclude by leaving things up in the air, to be discussed again latter. Settle them now, and make the close friendly. Give the other person a pat on the back. Let the last memory of the matter be a good one.
§ Forgive and forget : Once the criticism has been made, let the person start with a clean slate. Avoid looking for more mistakes, and give the person a chance to improve.
§ Take steps to prevent a recurrence : Follow up to make sure the person is acting on your suggestions and doing things right.
If you follow these guidelines, constructive criticism can benefit you, your company, and – most important – the person you’re criticizing.
Career Applications :
1. Think back over the lessons you’ve learned in life. How did you benefit from some one telling you the truth about something you were doing wrong ?
2. With a partner, role-play a situation in which one of you is the boss and the other an employee. The boss is angry because the employee repeatedly arrives late for work, takes long lunches, and leaves 5 to 10 minutes early. However, the employee’s work is always excellent. After the role-play, analyze what the boss did right and what could be improved.
CASE NO. 4
WHAT YOU MAY LEGALLY SAY IN A SALES LETTER
As you prepare to write your sales letter, think carefully about your choice
of words. False or misleading statements could land you in court, so make sure your language complies with legal and ethical standards. To keep your sales letters within the limits of the law, review the legal considerations of these typical sales phrases :
§ “Our product is the best on the market.” – This statement is acceptable for a sales letter because the law permits you to express an opinion about your product. In the process of merchandising a product, statements of opinion are known as “puffery,” which is perfectly legal as long as you make no deceptive or fraudulent claims.
§ “Our product will serve you well for many years to come.” This statement from a sales brochure triggered a lawsuit by a disgruntled customer who claimed the manufacturer’s product lasted only a few years. The courts ruled that the statement was an acceptable form of puffery because the manufacturer did not promise that the product would last for a specific number of years.
§ “We’re so confident you’ll enjoy our products that we’ve enclosed a sample of our most popular line. This sample can be yours for only $5.00! Please send your payment in the enclosed, prepaid envelope.” If you include a product sample with your sales letter, your readers may keep the merchandise without paying for it. Under the law, consumers may consider unordered goods as gifts. They are not obligated to return the items to you or submit payments for unsolicited merchandise
.
As Mrs. Fields, Mrs. Pauls, FedEx, and other companies know, keeping customers, employees, investors, and other stakeholders informed with electronic reports is the only way to do business in the global workplace.
Career Applications
1. What advantages and disadvantages do you see in asking store managers at Mrs. Fields to file electronic troubleshooting reports immediately on the company’s intranet ?
2. What kinds of electronic reports might a company want to post on its website ?
Business Management-ISBM-1
BUSINESS MANAGEMENT
N. B. : 1) Attempt any Four cases
No: 1
REMAINS OF A DREAM
This is a tragic story, narrated in first person, of an entrepreneur who became bankrupt for no fault of him, without producing anything, mostly because of the irresponsible political and government environment. This case study, documented by Bibek Debroy and P.D. Kaushik and published in Business Today is reproduced here with permission.
In the 1980s, I worked as a chemical analyst for a transnational in Germany, but kept thinking about shifting to India.
Opportunity knocked when I saw an advertisement by the Uttar Pradesh government inviting NRI professionals to start a chemical unit in the newly identified Basti Chemical Industrial Complex. I hail from Lucknow. Hence, this was attractive. I inquired from the Indian High Commission and was told that there is single window clearance for NRI investors. The brochure said several things about the benefits - excise and sales tax holiday for five years, uninterrupted power supply, low rate of interest on loans, and clearance of application within 30 days.
I started the application formalities for a chemical unit. Once the application was accepted, I requested for long leave from my employers. I also inquired from my relatives in Lucknow and was told that the Uttar Pradesh government's intentions are clear, and developmental work is progressing at fast speed.
Every now and then, I received a letter from the ministry of industry in Uttar Pradesh to furnish some paper or the other, as part of procedural formalities. After three months, I received my provisional sanction letter for allotment of land, and term loan. The letter also stated that within six months, I must take possession of the land, and initiate construction. Otherwise, the deposited amount (Rs 1 lakh as part of my contribution) will be forfeited. I resigned from the company, and shifted permanently to India, since my employer turned down my request for long leave.
On reaching the complex, I was surprised to see that the Uttar Pradesh State Industrial Development Corporation (UPSIDC) had actually developed the land in terms of markers, and signboards, compared to what I had seen on my last visit.
Though roads were not fully laid, it was evident that work was in progress. I took possession of my land and started construction.
Meanwhile, I approached the UPFC for granting me the term loan for ordering the plant and machinery. The first obstacle came from the Uttar Pradesh State Electricity Board (now Uttar Pradesh Power Corporation). The electricity supply to the complex was not yet available. On inquiring, I was told that the plan had been sanctioned, but required clearance from the power ministry, before undertaking further work. The approximate time to get grid supply ranged between four and six months.
The next obstacle came from the Uttar Pradesh Financial Corporation (UPFC). It could release the first instalment after I completed construction till the plinth level. I continued work with the help of a diesel generating set. It took another month to reach the plinth level.
But before I could request UPFC to release my first instalment, I received a letter from UPFC that I had to deposit interest against the amount paid to the UPSIDC for land possession. This was a shock, because interest had to be paid even before anything was produced.
But I had no alternative, because the first insatlment was due. The UPFC promptly released the first instalment after inspecting the construction. It helped me continue construction work, and also book for plant and machinery.
Six months went by. Construction was almost complete. I had received three instalments from the Uttar Pradesh Financial Corporation (UPFC). Each time the payment of interest was due, the required sum was adjusted from the instalment released. If there was any shortfall in money required for construction, I paid from my own pocket.
But after nine months, my coffers went empty. Machinery suppliers were after me, for payment. UPFC insisted on interest payments, because this was the last instalment of my term loan and interest due couldn't be deducted from future instalments. I borrowed from family and friends and paid up. Then I received the final instalment from UPFC for plant and machinery, with another notice that the yearly instalment for the principal was due.
Within two months, machinery was commissioned at the site. But electricity was yet to reach the complex, hi the previous year, I had visited the Uttar Pradesh State Electricity Board (UPSEB) office innumerable times. I also approached the industry association to assist me. But all my efforts were in vain. This did not help me, or others like me, to get the grid supply.
There were 14 other who were in the same boat. The biggest company of them all -obviously with contacts at higher levels - arranged for grid supply from the rural feeder. But that plan also did not take off, because the rural feeder supplied poor quality power for a mere six hours. A process industry requires 24 hours of uninterrupted electricity supply without load fluctuations. It is precisely because of this that all 15 of us, who were waiting for electricity, had insisted on industrial power from UPSEB.
All plans failed. Captive generation was not a viable alternative now. And we continued to wait for the grid supply. We met the former minister for industry and pleaded our case. He assured us that he would take up the case with the power ministry.
Meanwhile, I defaulted on interest payment. So did the others. The final blow came in the Assembly elections, when both the sitting : Member of Legislative Assembly, from Basti, and the state industrial minister lost their seats. Suddenly, everything - from road construction work, to the laying of sewer and phone lines - came to a standstill.
Only the police post and the UPSKB rural feeder office remained. The new incumbent in the industrial ministry hailed from Saharanpur, so the thrust of the ministry changed. Basti was not on their priority list anymore. After waiting for tow years, UPSEB was not able to connect the complex with grid supply.
In the end, UPFC initiated recovery action and sealed my unit. Besides, they claimed that I could not get NRI treatment, with preferential interest rates, because I had permanently moved to India. Thus, there were also plans to file a case against me on account of misinforming the corporation. Experts suggested I should file for insolvency if I wanted to avoid going to prison. This I did in 1994. I spent Rs. 15 lakh from my own pocket.
Now, all that remains of an entrepreneurial dream is a sealed chemical unit in Basti and a complex legal tangle.
I was better off working for the transnational in Germany. Power does not come out of the barrel of a gun. A gun's barrel comes of power, especially when the latter does not exist.
QUESTIONS
1. Identify and analyse the environmental factors in this case.
2. Who were all responsible for this tragic end?
3. It is right on the part of the government and promotional agencies to woo entrepreneurs by promising facilities and incentives which they are not sure of being able to provide?
4. Should there be legislation to compensate entrepreneurs for the loss suffered due to the irresponsibility of public agencies? What problems are likely to
be olved and created by such legislation?
5. What are the lessons of this case for an entrepreneur and government and
promotional agencies?
No: 2
THE COSTS OF DELAY
The public sector Indian Oil Corporation (IOC), the major oil refining and marketing company which was also the canalizing agency for oil imports and the only Indian company I the Fortune 500, in terms of sales, planned to make a foray in to the foreign market by acquiring a substantial stake in the Balal Oil field in Iran of the Premier Oil. The project was estimated to have recoverable oil reserves of about 11 million tonnes and IOC was supposed to get nearly four million tonnes.
When IOC started talking to the Iranian company for the acquisition in October 1998, oil prices were at rock bottom ($11 per barrel) and most refining companies were closing shop due to falling margins. Indeed, a number of good oil properties in the Middle East were up for sale. Using this opportunity, several developing countries ''made a killing by acquiring oil equities abroad."
IOC needed Government's permission to invest abroad. Application by Indian company for investing abroad is to be scrutinized by a special committee represented by the Reserve Bank of India and the finance and commerce ministries. By the time the government gave the clearance for the acquisition in December 1999 (i.e., more than a year after the application was made), the prices had bounced back to $24 per barrel. And the Elf of France had virtually took away the deal from under IOC's nose by acquiring the Premier Oil.
The RBI, which gave IOC the approval for $15 million investment, took more than a year for clearing the deal because the structure for such investments were not in place, it was reported.
QUESTIONS
1. Discuss internal, domestic and global environments of business revealed by this case.
2. Discuss whether it is the domestic or global environment that hinders the globalization of Indian business.
3. Even if Elf had not acquired Premier Oil, what would have been the impact of the delay in the clearance on IOC?
4. What would have been the significance of the foreign acquisition to IOC?
5. What are the lessons of this case?
No: 3 NATURAL THRUST
Balsara Hygiene Products Ltd., which had some fairly successful household hygiene products introduced in 1978 a toothpaste, Promise, with clove oil (which has been traditionally regarded in India as an effective deterrent to tooth decay and tooth ache) as a unique selling proposition. By 1986 Promise captured a market share of 16 per cent and became the second largest selling toothpaste brand in India. There was, however, an erosion of its market share later because of the fighting back of the multinationals. Hindustan Lever's Close-up gel appealed to the consumers, particularly to the teens and young, very well and toppled Promise form the second position.
Supported by the Export Import Bank of India's Export Marketing Finance (EMF) programme and development assistance, Balsara entered the Malaysian market with Promise and another brand of tooth paste, Miswak.
The emphasis on the clove oil ingredient of the Promise evoked good response in Malaysia too. There was good response to Miswak also in the Muslim dominated Malaysia. Its promotion highlighted the fact that miswak (Latin Name : Salvadora Persica) was a plant that had been used for centuries by as a tooth cleaning twig. It had reference in Koran. Quoting from Faizal-E-Miswak, it was pointed out that prophet Mohammed used 'miswak before sleeping at night and after awakening." The religious appeal in the promotion was reinforced by the findings of scientists all over the world, including Arabic ones, of the antibacterial property of clove and its ability to prevent tooth decay and gums.
Market intelligence revealed that there was a growing preference in the advanced counties for nature based products. Balsara tied up with Auromere Imports Inc. (AAII), Los Angeles. An agency established by American followers of Aurobindo, an Indian philosopher saint. Eight months of intensive R&D enabled Balsara to develop a tooth paste containing 24 herbal ingredients that would satisfy the required parameter. Auromere was voted as the No. 1 toothpaste in North Eastern USA in a US Health magazine survey in 1991.
The product line was extended by introducing several variants of Auromere. A saccharine free toothpaste was introduced. It was found that mint and menthol were taboo for users of homoeopathic medicines. So a product free of such mints was developed. Auromere Fresh Mint for the young and Auromere Cina Mint containing a combination of cinnamon and peppermint were also introduced. When the company relaised that Auromere was not doing well in Germany because of the forming agent used in the product, it introduced a chemical free variant of the products.
QUESTIONS
1. Explain the environmental factors which Balsara used to its advantage.
2. What is the strength of AAII to market ayurvedic toothpaste in USA?
No: 4 THE SWAP
The Economic Times, 20 October 2000, reported that Reliance Industries entered into a swap deal for the export and import of 36 cargoes of naphtha over the next six months. Accordingly, three cargoes of 50,000 tonnes each were to be exported every month from Reliance Petroleum's Jamnagar refinery a..
If RIL imports naphtha for Hazira petrochemical plant, the company does not have to pay the 24 per cent sales tax, which it will have to pay on a local purchase, even if it is from Reliance Petro. Besides Reliance Petro will also get a 10 per cent duty drawback on its crude imports if it exports naphtha from the refinery at Jamnagar.
The export of naphtha with Japanese traders is being looked as a coup of Reliance as it gives the company an entry into the large Japanese market.
Indian refineries have a freight advantage over the Singapore market and can quote better prices.
QUESTIONS
1. Examine the internal and external factors behind Reliance's decision for the swap deal.
2. What environmental changes could make swap deal unattractive in future?
3. Could there be any strategic reason behind the decision to import and export naphtha?
4. Should Reliance import and export naphtha even if it does not provide any profit advantage?
No: 5 A QUESTION OF ETHICS
TELCO opened bookings for different models of its proud small car Indica in late 1998. The consumer response was overwhelming. Most of the bookings were for the AC models, DLE and DLX. The DLE model accounted for more than 70 per cent of the bookings.
Telco has planned to commence delivery of the vehicles by early 1999. However, delivery schedules for the AC models were upset because of some problems on the roll out front. According to a report in The Economic Times dated 13 March 1999, Telco officials attributed the delay to non-availability of air conditioning kits.
Subros Ltd. supplies AC kits for the DLE version and Voltes is the vendor for the DLX version. Incidentally, Subros is also the AC supplier to Maruti Udyog Ltd.
Telco officials alleged that Subros was being pressured by the competitor to delay the supply of kits. ^ If this continues, we will be forced to ask Voltas to supply kits for the DLE version too," a company official said.
QUESTIONS
1. Why did Telco land itself in the problem (supply problem in respect of AC kits)?
2. If the allegation about the supplier is right, discuss its implications for the supplier.
3. Evaluate the ethical issues involved in the case. (Also consider the fact Maruti was 50 per cent Government owned.)
No: 6 DIFFERENT FOR
GAMBLE
Product and Gamble (P & G), a global consumer products giant, 'stormed the Japanese market with American products, American managers, American sales methods and strategies. The result was disastrous until the company learnt how to adapt products and marketing style to Japanese culture. P & G which entered the Japanese market in 1973 lost money until 1987, but by 1991 it became its second largest foreign market."
P & G acclaimed as 'the world's most admired marketing machine", entered India, which has been considered as one of the largest emerging markets, in 1985. It entered the Indian detergent marketing the early nineties with the Ariel brand through P & G India (in which it had a 51 percent holding which was raised 65 per cent in January 1993, the remaining 35 per cent being hold by the public). P & G established P & G Home products, a 100 per cent subsidiary later (1993) and the Ariel was transferred to it. Besides soaps and detergents, P & G had or introduced later product portfolios like shampoos (Pantene) medical products (Viks range, Clearasil and Mediker) and personal products (Whisper feminine hygiene products, pampers diapers and old spice range of men's toiletries).
The Indian detergent and personal care products market was dominated by Hindustan Lever Ltd. (HLL). In some segments of the personal care products market the multinational Johnson & Johnson has had a strong presence. Tata group's Tomco, which had been in the red for some time, was sold to Hindustan Lever Ltd. (HLL). HLL, a subsidiary of P & G's global competitor, has been in India for about a century. The take over of Tomco by HLL further increased its market dominance. In the low priced detergents segment Nirma has established a very strong presence.
.......
One of P & G's big in India was the compact technology premium detergent brand Ariel. After an initial show, Ariel, however, failed to generate enough sales - consumers seem to have gone by the per kilo cost than the cost per wash propagated by the promotion. To start with, P & G had to import the expensive state-of-the-art ingredients, which attracted heavy customs duties. The company estimated that it would cost Rs. 60 per kilo for Ariel compared to Rs. 27 for Surf and Rs. 8 for Nirma. Because of the Rupee devaluation of the early 1990s, the test market price of Rs. 35 for 500 gms was soon Rs. 41 by the time the product was launched. HLL fought Ariel back with premium variants of Surf like Surf Excel.
It is pointed out that, 'in hindsight, even P & G managers privately admit tha
QUESTIONS
1. Discuss the reasons for the initial failure of P & G in Japan.
2. Where did P & G go wrong (if it did) in the evaluation of the Indian market and its strategy?
3. Discuss the reasons for the difference in the performance of P & G in India and China.
1) Discuss how the environment acts does as a stimulant to business. Analyse why business
often does little for the preservation of physical environment despite the fact that it is
significant for business activity. (10 Marks)
2) Explain the relevance of ecological issues to business environment (10 Marks)
3) What do you understand by Business Social Responsibility (B S R ). How this can be used
to improve the Business Environment. (10 Marks)
4) Explain how the business in an organization can be regulated with regard to the
Organization’s Basic Objectives. (10 Marks)
5) Describe in detail the different role played by the Government towards enriching the
business Environment. (10 Marks)
6) In the Business Environment context, explain how the Political and legal Environment of
business plays a vital role. Justify by bringing in suitable examples. (10 Marks)
7) Evaluate the advantages and disadvantages of FDI. What is your opinion on the role of FDI
in the Retail Sector? Justify your views with India's experience in this sector. (20 Marks)
Business Communication-ISBM
CASE-1 (20 Marks)
Nestle has launched quality street ,lion and after 8 choclates imported from Europe. Qualtty Street is an assortment of chocolates priced at Rs. 7 5 for 218 gm. After Eight is a popular adult chocolate priced at Rs.25 for 20 gm and Lion is a caramel wafer bar priced at Rs. 20 for a 45 gm bar. (Kit Kat )is priced at Rs. 6 for a 17 gm bar and has a chocolaty taste while Lion has a crunchy taste). The brands have different tastes and will appeal to different target segments (though the target segment is one which may have already been exposed to these brands during visits abroad). These brands have been introduced in metros in upmarket stores which sell brands bears the label "lmported by Nestle India Ltd." indicating that they may be better than smuggled ones (which may be stale).
Question :
1 Suggest suitable media /media vehicles for promoting these brands. Give reasons in support of your answer
2 What business communication media you will utilize if you have to launch a soap in rural India?
CASE -2 (20 Marks)
The herbal shampoo market is valued at around Rs. 100 crores. Ny/e, Ayur, Dqbur and Biotique are some of the established brands in the market.
Helene Curtis (JK Group) has introduced a premium herbal shampoo (with variants Shikskai, henna and qmla and brqhmi and josur) priced between Rs. 80 and Rs. 90 (500 ml) for different types of hair. The proposition is the benefits offered by lhe variant based on the combination of herbs, benefits offered by the variants range from extra protection and nourishment to colour, body and bounce. The shampoos have been launched under the brand name Premium Herbsl Shsmpoos and they target urban housewives with a monthly household income of Rs.25,000. The brand is distributed through 7 0,000 retail outlets and 120 Raymond shops. The company has planned only point of purchase (POP) posters initially and may consider the electronic media later. The shampoo has an annual advertising expenditure of Rs. 10 crores.
1 Comment on the marketing mix of JK's Premium Herbsl Shampoos ?
2 How can you make their communication more effective ?.
CASE 3 (40 Marks)
Attempt all cases of the following: (10 marks each)
(i) Iran Rafsanjan Co., Rafsanjan City, Iran has taken a marine insurance policy No. VB/84/3629/29 dated
20th December, 2005 from Albroz Insurance Co., Kerman City, Iran for the import of 500 tractor gears
from Apex Products (India) Ltd., Delhi. The exporter shipped the cargo on board vessel — SEEMA on
26th December, 2005 for Bandar Abbas Port of Iran.
As per the letter of credit condition, the exporter was required to fax the shipment details to Albroz
Insurance Company within 24 hours of the shipment. However, the exporter could not fax such details due
to change in telephone (fax) number of the insurance company.
Draft an express telegram to intimate shipment details.
ii) Yours is a multinational company having joint venture with a Chinese company. Plant is to be located at
Surat. The company immediately needs an Executive - Foreign Affairs (male/female) with ability of
“writing and speaking Chinese language.
Draft a recruitment advertisement for publication under classified column of a national daily. Salary-is no
bar for the right candidate. E-mail address -info@krishnafashions.com
iii) The local head office of State Bank of India is located at 11, Parliament Street, New Delhi-110001. The
bank wants to construct 76 flats at Noida for its employees and invite applications for pre-qualification of
contractors. Full details are available on its website - www.sbi.co.in or www.statebankofindia.com/
procurement_news.
Draft a notice for pre-qualification of contractors.
iv) The Joint Admission Board (JAB) of Indian Institutes of Technology in its meeting held on 17th
September, 2005 at Kolkata has taken some decisions with regard to Joint Entrance Examination (JEE)
2006, i.e., to appear in JEE, one must secure at least 60% marks (55% for SC/ST and PD) in 10+2
examination; a candidate can have only two attempts with effect from JEE-2006; and a candidate who
joins any of the IITs through JEE-2006 will not be permitted to appear in JEE in future.* It was also
decided that candidates, who have passed their qualifying examination in 2005 or earlier, will be allowed
to appear in JEE-2006 as the last chance, witji no consideration of marks or attempts at JEE subject to age
requirements. On behalf of the JAB, draft a suitable press release to be issued by organising chairman
highlighting these decisions. (5 Marks each)
Business Communication-ISBM
SUB : BUSINESS COMMUNICATION
N. B. : All cases are Compulsory.
CASE NO. 1
How to Proofread like a Pro :
Tips for creating the Perfect Document
You’ve carefully revised and polished your document, and it’s been sent off to the word-processing department or a designer to be put into final form. You can breathe a sigh of relief, but only for the moment : You’ll still be proofreading what comes out of the printer. To ensure that any document is error-free, always proofread the final version. Following are some hints to help make your proofreading more effective.
§ Multiple passes – Go through the document several times, focusing on a different aspect each time. The first pass might be to look for omissions and errors in content; the second pass could be for layout, spacing, and other aesthetic features; a final pass might be to check for typographical, grammatical, and spelling errors.
§ Perceptual tricks – Your brain has been trained to ignore transposed letters, improper capitalization, and misplaced punctuation. Try (1) reading each page from the bottom to the top (starting at the last word in each line,) (2) Placing your finger under each word and reading it silently, (3) making a slit in a sheet of paper that reveals only one line of type at a time, and (4) reading the document aloud and pronouncing each word carefully.
§ Impartial reviews – Have a friend or colleague proofread the document for you. Others are likely to catch mistakes that you continually fail to notice. (All of us have blind spots when it comes to reviewing our own work)
§ Typos – Look for the most common typographical errors (typos): transposition (such as teb), substitution (such as economic), and omission (such as productivity)
§ Mechanics – When looking for errors in spelling, grammar, punctuation, and capitalization, if you’re unsure about something, look it up in a dictionary, a usage book, or another reference work.
§ Accuracy – Double –check the spelling of names and the accuracy of dates, addresses, and all numbers (quantities ordered, prices, and so on). It would not do to order 500 staples when you want only 50.
§ Distance – If you have time, set the document aside and proofread it the next day.
§ Vigilance – Avoid reading large amounts of material in one sitting, and try not to proofread when you’re tired.
§ Focus – Concentrate on what you’re doing. Try to block out distractions, and focus as completely as possible on your proofreading task.
§ Caution – Take your time. Quick proofreading is not careful proofreading.
Proofreading may require patience, but it adds creditability to your document.
Career Applications :
1. What qualities does a person need to be a good proofreader ? Are such qualities inborn, or can they be learned ?
2. Proofread the following sentence :
application of these methods in stores in San Deigo nd Cinncinati have resulted in a 30 drop in robberies an a 50 percent decling in violence there, according at the developers if the security system, Hanover brothrs, Inc.
CASE NO. 2
ACTIONS SPEAK LOUDER THAN WORDS ALL AROUND
THE WORLD
“He wouldn’t look me in the eye. I found it disconerting that he kept looking all over the room but rarely at me,” said Barbara Walters after her interview with Libya’s Colonel Muammar al-Qadhafi. Like many people in the United States, Walters was associating eye contact with trustworthiness, so when Qadhafi withheld eye contact, she felt uncomfortable. In fact Qadhafi was paying Walters a compliment. In Libya, not looking conveys respect, and looking straight at a woman is considered nearly as serious as physical assault.
Nonverbal communication varies widely between cultures, even between subcultures, and the differences strongly affect communication in the workplace. Whether you’re trying to communicate with your new Asian American assistant, the Swedish managers who recently bought out your company, the African American college student who won a summer internship with your firm, or representatives from the French company you hope will buy your firm’s new designs, your efforts will depend as much on physical cues as on verbal ones. Most Americans aren’t usually aware of their own nonverbal behavior, so they have trouble understanding the body language of people from other cultures. The list of differences is endless.
§ In Thailand it’s rude to place your arm over the back of a chair in which another person is sitting.
§ Finnish female students are horrified by Arab girls who want to walk hand in hand with them.
§ Canadian listeners nod to signal agreement.
§ Japanese listeners nod to indicate only that they have understood.
§ British listeners stare at the speaker, blinking their eyes to indicate understanding.
§ People in the United States are taught that it’s impolite to stare.
§ Saudis accept foreigners in Western business attire but are offended by tight – fitting clothing and by short sleeves.
§ Spaniards indicate a receptive friendly handshake by clasping the other person’s forearm to form a double handshake.
§ Canadians consider touching any part of the arm above the hand intrusive, except in intimate relationships.
It may take years to adjust your nonverbal communication to other
cultures, but you can choose from many options to help you prepare. Books and seminars on cultural differences are readily available, as are motion pictures showing a wide range of cultures. You can always rent videos of films and TV shows from other countries. Examining the illustrations in news and business magazines can give you an idea of expected business dress and personal space. Finally, remaining flexible and interacting with people from other cultures who are visiting or living in your country will go a long way toward lowering the barriers presented by nonverbal communication.
Career Applications :
1. Explain how watching a movie from another country might help you prepare to interpret nonverbal behavior from that culture correctly.
2. One of your co-workers is originally from Saudi Arabia. You like him, and the two of you work well together. However, he stands so close when you speak with him that it makes you very uncomfortable. Do you tell him of your discomfort, or do you try to cover it up ?
CASE NO. 3
MASTERING THE ART OF CONSTRUCTIVE CRITICISM
To become better writers, people need to be evaluated, but taking criticism
from others is often difficult. The way you tell someone “ You did it wrong” can destroy goodwill and cooperation, or it can build the relationship and help the person learn from the mistake, improve performance, and retain self-esteem. To criticize more constructively, follow these suggestions :
§ Get all the facts first : Don’t accept hearsay or rumors.
Find out specifically who did or said what, when, where, why, and how
§ Don’t act in haste : Never act while you’re angry. Think things out before you write or speak, and then explain your criticism calmly, rationally, and objectively.
§ Phrase your remarks impersonally : Criticize the mistake, not the person. Focus your remarks on the action only, and analyze it thoughtfully.
§ Never criticize in an offhand manner : Treat the situation seriously. Take the time to state the problem in detail, explaining what was wrong and why.
§ Avoid an abusive tone : Ridiculing someone, talking down to a person, or using sarcasm prevents people from accepting what you have to say.
§ Make the offense clear : Don’t talk in generalities. Be specific about exactly what was done wrong.
§ Preface the criticism with a kind word or a compliment : Start with a few words of praise or admiration, saying how much you value the person. First the good news, then the bad.
§ Supply the answer : Explain how to do things right. Don’t dwell on the mistake, emphasize how to correct it and how to avoid repeating it.
§ Ask for cooperation : Don’t demand cooperation. Asking makes the person feel like a team member and provides an incentive to improve.
§ Limit yourself to one criticism for each offense : Don’t dredge up or rehash past mistakes. Focus on the current problem.
§ End on a friendly note : Don’t conclude by leaving things up in the air, to be discussed again latter. Settle them now, and make the close friendly. Give the other person a pat on the back. Let the last memory of the matter be a good one.
§ Forgive and forget : Once the criticism has been made, let the person start with a clean slate. Avoid looking for more mistakes, and give the person a chance to improve.
§ Take steps to prevent a recurrence : Follow up to make sure the person is acting on your suggestions and doing things right.
If you follow these guidelines, constructive criticism can benefit you, your company, and – most important – the person you’re criticizing.
Career Applications :
1. Think back over the lessons you’ve learned in life. How did you benefit from some one telling you the truth about something you were doing wrong ?
2. With a partner, role-play a situation in which one of you is the boss and the other an employee. The boss is angry because the employee repeatedly arrives late for work, takes long lunches, and leaves 5 to 10 minutes early. However, the employee’s work is always excellent. After the role-play, analyze what the boss did right and what could be improved.
CASE NO. 4
WHAT YOU MAY LEGALLY SAY IN A SALES LETTER
As you prepare to write your sales letter, think carefully about your choice
of words. False or misleading statements could land you in court, so make sure your language complies with legal and ethical standards. To keep your sales letters within the limits of the law, review the legal considerations of these typical sales phrases :
§ “Our product is the best on the market.” – This statement is acceptable for a sales letter because the law permits you to express an opinion about your product. In the process of merchandising a product, statements of opinion are known as “puffery,” which is perfectly legal as long as you make no deceptive or fraudulent claims.
§ “Our product will serve you well for many years to come.” This statement from a sales brochure triggered a lawsuit by a disgruntled customer who claimed the manufacturer’s product lasted only a few years. The courts ruled that the statement was an acceptable form of puffery because the manufacturer did not promise that the product would last for a specific number of years.
§ “We’re so confident you’ll enjoy our products that we’ve enclosed a sample of our most popular line. This sample can be yours for only $5.00! Please send your payment in the enclosed, prepaid envelope.” If you include a product sample with your sales letter, your readers may keep the merchandise without paying for it. Under the law, consumers may consider unordered goods as gifts. They are not obligated to return the items to you or submit payments for unsolicited merchandise
.
As Mrs. Fields, Mrs. Pauls, FedEx, and other companies know, keeping customers, employees, investors, and other stakeholders informed with electronic reports is the only way to do business in the global workplace.
Career Applications
1. What advantages and disadvantages do you see in asking store managers at Mrs. Fields to file electronic troubleshooting reports immediately on the company’s intranet ?
2. What kinds of electronic reports might a company want to post on its website ?
Business Management-ISBM-1
BUSINESS MANAGEMENT
N. B. : 1) Attempt any Four cases
No: 1
REMAINS OF A DREAM
This is a tragic story, narrated in first person, of an entrepreneur who became bankrupt for no fault of him, without producing anything, mostly because of the irresponsible political and government environment. This case study, documented by Bibek Debroy and P.D. Kaushik and published in Business Today is reproduced here with permission.
In the 1980s, I worked as a chemical analyst for a transnational in Germany, but kept thinking about shifting to India.
Opportunity knocked when I saw an advertisement by the Uttar Pradesh government inviting NRI professionals to start a chemical unit in the newly identified Basti Chemical Industrial Complex. I hail from Lucknow. Hence, this was attractive. I inquired from the Indian High Commission and was told that there is single window clearance for NRI investors. The brochure said several things about the benefits - excise and sales tax holiday for five years, uninterrupted power supply, low rate of interest on loans, and clearance of application within 30 days.
I started the application formalities for a chemical unit. Once the application was accepted, I requested for long leave from my employers. I also inquired from my relatives in Lucknow and was told that the Uttar Pradesh government's intentions are clear, and developmental work is progressing at fast speed.
Every now and then, I received a letter from the ministry of industry in Uttar Pradesh to furnish some paper or the other, as part of procedural formalities. After three months, I received my provisional sanction letter for allotment of land, and term loan. The letter also stated that within six months, I must take possession of the land, and initiate construction. Otherwise, the deposited amount (Rs 1 lakh as part of my contribution) will be forfeited. I resigned from the company, and shifted permanently to India, since my employer turned down my request for long leave.
On reaching the complex, I was surprised to see that the Uttar Pradesh State Industrial Development Corporation (UPSIDC) had actually developed the land in terms of markers, and signboards, compared to what I had seen on my last visit.
Though roads were not fully laid, it was evident that work was in progress. I took possession of my land and started construction.
Meanwhile, I approached the UPFC for granting me the term loan for ordering the plant and machinery. The first obstacle came from the Uttar Pradesh State Electricity Board (now Uttar Pradesh Power Corporation). The electricity supply to the complex was not yet available. On inquiring, I was told that the plan had been sanctioned, but required clearance from the power ministry, before undertaking further work. The approximate time to get grid supply ranged between four and six months.
The next obstacle came from the Uttar Pradesh Financial Corporation (UPFC). It could release the first instalment after I completed construction till the plinth level. I continued work with the help of a diesel generating set. It took another month to reach the plinth level.
But before I could request UPFC to release my first instalment, I received a letter from UPFC that I had to deposit interest against the amount paid to the UPSIDC for land possession. This was a shock, because interest had to be paid even before anything was produced.
But I had no alternative, because the first insatlment was due. The UPFC promptly released the first instalment after inspecting the construction. It helped me continue construction work, and also book for plant and machinery.
Six months went by. Construction was almost complete. I had received three instalments from the Uttar Pradesh Financial Corporation (UPFC). Each time the payment of interest was due, the required sum was adjusted from the instalment released. If there was any shortfall in money required for construction, I paid from my own pocket.
But after nine months, my coffers went empty. Machinery suppliers were after me, for payment. UPFC insisted on interest payments, because this was the last instalment of my term loan and interest due couldn't be deducted from future instalments. I borrowed from family and friends and paid up. Then I received the final instalment from UPFC for plant and machinery, with another notice that the yearly instalment for the principal was due.
Within two months, machinery was commissioned at the site. But electricity was yet to reach the complex, hi the previous year, I had visited the Uttar Pradesh State Electricity Board (UPSEB) office innumerable times. I also approached the industry association to assist me. But all my efforts were in vain. This did not help me, or others like me, to get the grid supply.
There were 14 other who were in the same boat. The biggest company of them all -obviously with contacts at higher levels - arranged for grid supply from the rural feeder. But that plan also did not take off, because the rural feeder supplied poor quality power for a mere six hours. A process industry requires 24 hours of uninterrupted electricity supply without load fluctuations. It is precisely because of this that all 15 of us, who were waiting for electricity, had insisted on industrial power from UPSEB.
All plans failed. Captive generation was not a viable alternative now. And we continued to wait for the grid supply. We met the former minister for industry and pleaded our case. He assured us that he would take up the case with the power ministry.
Meanwhile, I defaulted on interest payment. So did the others. The final blow came in the Assembly elections, when both the sitting : Member of Legislative Assembly, from Basti, and the state industrial minister lost their seats. Suddenly, everything - from road construction work, to the laying of sewer and phone lines - came to a standstill.
Only the police post and the UPSKB rural feeder office remained. The new incumbent in the industrial ministry hailed from Saharanpur, so the thrust of the ministry changed. Basti was not on their priority list anymore. After waiting for tow years, UPSEB was not able to connect the complex with grid supply.
In the end, UPFC initiated recovery action and sealed my unit. Besides, they claimed that I could not get NRI treatment, with preferential interest rates, because I had permanently moved to India. Thus, there were also plans to file a case against me on account of misinforming the corporation. Experts suggested I should file for insolvency if I wanted to avoid going to prison. This I did in 1994. I spent Rs. 15 lakh from my own pocket.
Now, all that remains of an entrepreneurial dream is a sealed chemical unit in Basti and a complex legal tangle.
I was better off working for the transnational in Germany. Power does not come out of the barrel of a gun. A gun's barrel comes of power, especially when the latter does not exist.
QUESTIONS
1. Identify and analyse the environmental factors in this case.
2. Who were all responsible for this tragic end?
3. It is right on the part of the government and promotional agencies to woo entrepreneurs by promising facilities and incentives which they are not sure of being able to provide?
4. Should there be legislation to compensate entrepreneurs for the loss suffered due to the irresponsibility of public agencies? What problems are likely to
be olved and created by such legislation?
5. What are the lessons of this case for an entrepreneur and government and
promotional agencies?
No: 2
THE COSTS OF DELAY
The public sector Indian Oil Corporation (IOC), the major oil refining and marketing company which was also the canalizing agency for oil imports and the only Indian company I the Fortune 500, in terms of sales, planned to make a foray in to the foreign market by acquiring a substantial stake in the Balal Oil field in Iran of the Premier Oil. The project was estimated to have recoverable oil reserves of about 11 million tonnes and IOC was supposed to get nearly four million tonnes.
When IOC started talking to the Iranian company for the acquisition in October 1998, oil prices were at rock bottom ($11 per barrel) and most refining companies were closing shop due to falling margins. Indeed, a number of good oil properties in the Middle East were up for sale. Using this opportunity, several developing countries ''made a killing by acquiring oil equities abroad."
IOC needed Government's permission to invest abroad. Application by Indian company for investing abroad is to be scrutinized by a special committee represented by the Reserve Bank of India and the finance and commerce ministries. By the time the government gave the clearance for the acquisition in December 1999 (i.e., more than a year after the application was made), the prices had bounced back to $24 per barrel. And the Elf of France had virtually took away the deal from under IOC's nose by acquiring the Premier Oil.
The RBI, which gave IOC the approval for $15 million investment, took more than a year for clearing the deal because the structure for such investments were not in place, it was reported.
QUESTIONS
1. Discuss internal, domestic and global environments of business revealed by this case.
2. Discuss whether it is the domestic or global environment that hinders the globalization of Indian business.
3. Even if Elf had not acquired Premier Oil, what would have been the impact of the delay in the clearance on IOC?
4. What would have been the significance of the foreign acquisition to IOC?
5. What are the lessons of this case?
No: 3 NATURAL THRUST
Balsara Hygiene Products Ltd., which had some fairly successful household hygiene products introduced in 1978 a toothpaste, Promise, with clove oil (which has been traditionally regarded in India as an effective deterrent to tooth decay and tooth ache) as a unique selling proposition. By 1986 Promise captured a market share of 16 per cent and became the second largest selling toothpaste brand in India. There was, however, an erosion of its market share later because of the fighting back of the multinationals. Hindustan Lever's Close-up gel appealed to the consumers, particularly to the teens and young, very well and toppled Promise form the second position.
Supported by the Export Import Bank of India's Export Marketing Finance (EMF) programme and development assistance, Balsara entered the Malaysian market with Promise and another brand of tooth paste, Miswak.
The emphasis on the clove oil ingredient of the Promise evoked good response in Malaysia too. There was good response to Miswak also in the Muslim dominated Malaysia. Its promotion highlighted the fact that miswak (Latin Name : Salvadora Persica) was a plant that had been used for centuries by as a tooth cleaning twig. It had reference in Koran. Quoting from Faizal-E-Miswak, it was pointed out that prophet Mohammed used 'miswak before sleeping at night and after awakening." The religious appeal in the promotion was reinforced by the findings of scientists all over the world, including Arabic ones, of the antibacterial property of clove and its ability to prevent tooth decay and gums.
Market intelligence revealed that there was a growing preference in the advanced counties for nature based products. Balsara tied up with Auromere Imports Inc. (AAII), Los Angeles. An agency established by American followers of Aurobindo, an Indian philosopher saint. Eight months of intensive R&D enabled Balsara to develop a tooth paste containing 24 herbal ingredients that would satisfy the required parameter. Auromere was voted as the No. 1 toothpaste in North Eastern USA in a US Health magazine survey in 1991.
The product line was extended by introducing several variants of Auromere. A saccharine free toothpaste was introduced. It was found that mint and menthol were taboo for users of homoeopathic medicines. So a product free of such mints was developed. Auromere Fresh Mint for the young and Auromere Cina Mint containing a combination of cinnamon and peppermint were also introduced. When the company relaised that Auromere was not doing well in Germany because of the forming agent used in the product, it introduced a chemical free variant of the products.
QUESTIONS
1. Explain the environmental factors which Balsara used to its advantage.
2. What is the strength of AAII to market ayurvedic toothpaste in USA?
No: 4 THE SWAP
The Economic Times, 20 October 2000, reported that Reliance Industries entered into a swap deal for the export and import of 36 cargoes of naphtha over the next six months. Accordingly, three cargoes of 50,000 tonnes each were to be exported every month from Reliance Petroleum's Jamnagar refinery a..
If RIL imports naphtha for Hazira petrochemical plant, the company does not have to pay the 24 per cent sales tax, which it will have to pay on a local purchase, even if it is from Reliance Petro. Besides Reliance Petro will also get a 10 per cent duty drawback on its crude imports if it exports naphtha from the refinery at Jamnagar.
The export of naphtha with Japanese traders is being looked as a coup of Reliance as it gives the company an entry into the large Japanese market.
Indian refineries have a freight advantage over the Singapore market and can quote better prices.
QUESTIONS
1. Examine the internal and external factors behind Reliance's decision for the swap deal.
2. What environmental changes could make swap deal unattractive in future?
3. Could there be any strategic reason behind the decision to import and export naphtha?
4. Should Reliance import and export naphtha even if it does not provide any profit advantage?
No: 5 A QUESTION OF ETHICS
TELCO opened bookings for different models of its proud small car Indica in late 1998. The consumer response was overwhelming. Most of the bookings were for the AC models, DLE and DLX. The DLE model accounted for more than 70 per cent of the bookings.
Telco has planned to commence delivery of the vehicles by early 1999. However, delivery schedules for the AC models were upset because of some problems on the roll out front. According to a report in The Economic Times dated 13 March 1999, Telco officials attributed the delay to non-availability of air conditioning kits.
Subros Ltd. supplies AC kits for the DLE version and Voltes is the vendor for the DLX version. Incidentally, Subros is also the AC supplier to Maruti Udyog Ltd.
Telco officials alleged that Subros was being pressured by the competitor to delay the supply of kits. ^ If this continues, we will be forced to ask Voltas to supply kits for the DLE version too," a company official said.
QUESTIONS
1. Why did Telco land itself in the problem (supply problem in respect of AC kits)?
2. If the allegation about the supplier is right, discuss its implications for the supplier.
3. Evaluate the ethical issues involved in the case. (Also consider the fact Maruti was 50 per cent Government owned.)
No: 6 DIFFERENT FOR
GAMBLE
Product and Gamble (P & G), a global consumer products giant, 'stormed the Japanese market with American products, American managers, American sales methods and strategies. The result was disastrous until the company learnt how to adapt products and marketing style to Japanese culture. P & G which entered the Japanese market in 1973 lost money until 1987, but by 1991 it became its second largest foreign market."
P & G acclaimed as 'the world's most admired marketing machine", entered India, which has been considered as one of the largest emerging markets, in 1985. It entered the Indian detergent marketing the early nineties with the Ariel brand through P & G India (in which it had a 51 percent holding which was raised 65 per cent in January 1993, the remaining 35 per cent being hold by the public). P & G established P & G Home products, a 100 per cent subsidiary later (1993) and the Ariel was transferred to it. Besides soaps and detergents, P & G had or introduced later product portfolios like shampoos (Pantene) medical products (Viks range, Clearasil and Mediker) and personal products (Whisper feminine hygiene products, pampers diapers and old spice range of men's toiletries).
The Indian detergent and personal care products market was dominated by Hindustan Lever Ltd. (HLL). In some segments of the personal care products market the multinational Johnson & Johnson has had a strong presence. Tata group's Tomco, which had been in the red for some time, was sold to Hindustan Lever Ltd. (HLL). HLL, a subsidiary of P & G's global competitor, has been in India for about a century. The take over of Tomco by HLL further increased its market dominance. In the low priced detergents segment Nirma has established a very strong presence.
.......
One of P & G's big in India was the compact technology premium detergent brand Ariel. After an initial show, Ariel, however, failed to generate enough sales - consumers seem to have gone by the per kilo cost than the cost per wash propagated by the promotion. To start with, P & G had to import the expensive state-of-the-art ingredients, which attracted heavy customs duties. The company estimated that it would cost Rs. 60 per kilo for Ariel compared to Rs. 27 for Surf and Rs. 8 for Nirma. Because of the Rupee devaluation of the early 1990s, the test market price of Rs. 35 for 500 gms was soon Rs. 41 by the time the product was launched. HLL fought Ariel back with premium variants of Surf like Surf Excel.
It is pointed out that, 'in hindsight, even P & G managers privately admit tha
QUESTIONS
1. Discuss the reasons for the initial failure of P & G in Japan.
2. Where did P & G go wrong (if it did) in the evaluation of the Indian market and its strategy?
3. Discuss the reasons for the difference in the performance of P & G in India and China.
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