JUNE 2011 EXAMINATION

MM01
MARKETING MANAGEMENT

Time: Three Hours Maximum Marks: 100

Note:
1. The paper is divided into three sections: Section A, Section B and Section C.
2. There are seven questions in Section A of 10 marks each. Attempt any four.
3. Section B has 5 questions of 15 marks each. Attempt any three.
4. All the questions of Section C (Case Study) are compulsory. This section is of
15 marks.

Marks will be awarded for the right procedure also in numerical questions

Section – A

1. Discuss the life cycle of a product in terms of its impact on manufacturers marketing
mix.
(10 marks)
2. What is the relevance of market potential, penetrated market and company’s
potential?
(10 marks)
3 Discuss the Holistic marketing concept.
(10 marks)
4. Define the following terms:
(a) Umbrella branding (b) Over positioning
(10 marks)
5. Discuss the role of social networks in marketing
(10 marks)
6. Distinguish clearly between mass marketing and target marketing. Use relevant
example.
(10 marks)
7. Relate the three basic promotions objectives to the four jobs (AIDA) of promotion
using specific examples.
(10 marks)

Section – B

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8. How can database marketing be used for segmentation and marketing strategy
development? Use relevant example.
(15 marks)
9. What are the goals of advertising? Discuss DAGMAR approach in detail.
(15 marks)
10. What are the pricing objectives? Discuss the cost oriented pricing methods in detail.

(15 marks)
11. Discuss the total product concept as given by Theodore Levitt. Discuss its
application in relation with PLC.
(15 marks)
12. Distinguish between Intensive Distribution and Exclusive Distribution Strategy.
Design the distribution strategy.
(a) Heavy duty, rechargeable battery
(b) Prepaid mobile coupons
(15 marks)
Section – C (Case Study) Compulsory

In 1997, two years after shedding its quaint Lucky Goldstar name, when Korean consumer
electronics giant LG entered India, local competitors that dominated the industry discounted
them. As their peril, as if turned out. Within a few years .LG had powered ahead, leaving a
trail of broken domestic companies – BPL and Onida, the most prominent of them.

But what gave the managers at LG even more satisfaction is that they had left their Korean
rival Samsung biting the dust. By 2007, LG was clocking $2 billion, Rs.8000 crore then, in
revenues in India. This despite the fact that globally, Samsung had become the Sony of the
21st century, the largest consumer electronics firm. Doubly hurtful was that Samsung was the
largest chaebol, or conglomerate, in Korea and LG NO.2.

It is time for that lead to be rewritten. Bolstered by rapidly climbing consumer electronic
sales, particularly of flat panel displays and mobile phones and better realizations through a
small pricing premium. Samsung has equaled LG in sales – around Rs. 16,000 crore – and
expects to end 2011 ahead of its rival by a substantial margin.

Some executives at Samsung boast LG is already behind. Data on market shares do not back
that up but with the benefit of stronger pricing – Samsung prices itself at a two to five percent
premium – the bigger chaebol is powering ahead.

Samsung’s sales projections for 2011 show revenues of Rs.22,400 crore, a growth of 40
percent. LG on the other hand expects sales of Rs.20,000 crore. In a market of around
Rs.1,10,000 crore for consumer electronics and mobile phones put together, as estimated by
Technopak, a Gurgaon retail advisory firm. Samsung’s is a powerful one-fifth share. Both
companies expect to double sales shortly. By 2013, Samsung hopes to touch around Rs.
46,000 crore; LG Rs. 40,000 crore by 2014.

How did Samsung get ahead and, as importantly, how did LG cede its ground?

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There is no doubt that mobile phones have powered Samsung’s recent sales success – half of
its India revenues come from mobile and information technology, or MIT, products. Various
surveys give Samsung market shares in mobile phones between 14 and 23 percent in India.
It is acknowledgement to be a strong No.2 to market leader Nokia, thanks to clarify success
with touch-screen phones and popular devices Galaxy S, Wave 2 and the Guru range.

Kwang –Ro Kim, LG’s erstwhile India chief who left his employer in 2007 after building the
company up from scratch in the country, says as much. “The management of LG in Korea
underestimated the appetite India has shown for mobile phones. Hence, LG faltered a bit on
that count.

Analysis also credit Samsung’s success at premium pricing though LG rubbishes this.
Samsung has not gone to the masses, but has created a premium positioning, compared to
LG.

This has helped Samsung in the replacement market, which accounts for 30 percent of urban
sales. Such buyers tend to pay more for what is perceived as a premium product.

Jung Soo Shin, Samsung South West Asia CEO, actually wants to emulate a part of LG’s
strategy from the early part of the last decade. Around 2003, Kim took LG deep into the
Indian market, going into towns with a population base of 100,000 people.

Samsung wants to expand its reach, from around the 17,000 outlets that sell its products
currently to exceed the 20,000 outlets that retail LG products. This would also entail an
increase in its single-brand Samsung Plaza outlets, 400 of which dot India (compared to 270
Sony Centres and over 1,600 LG Shoppers) and make for 14 percent of its India sales (12 to
13 percent for LG.

Samsung will open 600 “Samsung Smartphone Café outlets by the end of 2012. “Once they
are convinced on the business case.

Questions:

1. Elaborate on the strategy used by Samsung in entering, growth and reach leadership
position in India. (5)
2. What have the key products and market for success in India? (5)

3. If you were the CEO Indian operation of LG what steps you will take to regain
leadership position. (5)

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