Caselet 1 Export Marketing: The trade in black pepper is unhappy that exports may not show a sign of revival in prices in the immediate future. World prices have been showing a downward trend for eighteen months and this has resulted in much lower earnings for exporters. The UK, West Germany and the Netherlands have cut their import requirement though the American demand has shown some growth. Brazil has been resorting to aggressive selling at lower prices and the expectations are that its exports will reach an all-time peak of 32,000 tons in the 1981-82 season. The 1981-82 Indian seasons are only about six weeks away. The Brazilian offensive has forced India to withdraw so to any from the US and West European markets and increase its reliance on communist buyers. As many as 1980-81.the Soviet Union alone accounting for 12,647 tones. But exporters are concerned at the diversion on such a scale of this trade.
Question: 1. Had you been the pepper exporter, what would be your short term and medium-term export marketing strategy in the above environment?
Caselet 2 Smart Kids – Selling Educational Games and Resources to the World Smart Kids Ltd. An Auckland company that makes educational games and resources to read and understand math’s has won a Trade New Zealand Export Award for its success in international markets in 2003.Established eight years ago in the family home basement, Smart Kids is led by husband and wife team, joint chief executives David and Sun Milne and their sons Duncan and Frase. She Milne, an ex-teacher, says from just 30 products when it started, the company produces more than 200 produces catering for student’s activities, grammar concepts and numeracy. She says the international appeal of Smart Kids products was highlighted recently, when company’s SMART PHONICS was listed amongst the top five products out of almost 100 in the education trade show in the United Kingdom. The key requirement for every new Smart Kids products is that it stimulates student’s minds in the classroom, teaches them a specific concept easily, enjoyably and permanently and enables problem solving. David Milne says Smart Kids started selling its educational games and resources to New Zealand schools in 1995, drawings an immediate and strong response. It quickly became apartment that the New Zealand market was not large enough to sustain considerable investment in product development, and secondly, that their products have done so well that they deserved wider exposure.”Our export research came down to two options. Find educational distributors in other countries or set-up our own operations. The first option was less risky and easy to manage but it meant that Smart Kids products were lost in a wide range of materials. So we went for the second option and over the next few years established offices in Australia, in UK and Canada”. This has successfully branded Smart Kids as a leading supplier of educational resources in these countries. Mr. Milne says the Smart Kids product catalogue is now sent regularly to teachers in more than 50,000 schools across the UK, Ireland, Canada and Australia. “We also sell to schools in the US. In that market we elected to work through a distributor, we didn’t have the financial resources to setup an operation that could cover almost 70,000 schools and compete with every established educational publisher”. He says annual exports now exceed $2.2 million and account for more than 90% of turnover. In order to grow the business, surplus profits are reinvested back into product development, infrastructure – the company recently moved its Auckland operation into new 20,000 square feet premises in Ellerslie. Mr. Milne says the Smart Kids brand is now well established internationally with the company enjoying many competitive advantages, including its New Zealand origin. New Zealand education is highly regarded overseas and we find that international teachers to get hold of educational products made in this country.
Questions: 1. What are the major considerations for a firm in order to while deciding its markets entry strategy?
2. To what extent direct control and ownership are critical for Smart kids export distribution strategy?
Section C: Applied Theory
1. “India’s export markets are still largely limited to the developed countries.” Critically examine this statement highlighting the main factors responsible for the present state of affairs and your views about the future prospectus.
2. “A world in which exchange rates fluctuate constantly is a threat to international marketing”. Discuss.
Caselet 1 Swastika Computer System was established in 1981 at Delhi to provide computer training. In 1980s computer education was relatively new in India. Personal computers 286 existed and MS DOS was the operating system. Languages like Basic, Pascal, COBOL, FORTRAN were used in programming. Swastika Computer Systems was established with their support departments namely computer assembly, faculty training and computer servicing department. In the first financial year, it recorded a turnover of Rs 11.5 lakhs. Within a few years of its existence, Swastik Computer System opened its branches in eight major cities of India and had a gross annual turnover of Rs 86 lakhs. The organization was highly centralized. The head office at Delhi handled all accounts, recruitment, and placement of students and servicing of computers. The Bhopal branch of Swastik Computer Systems was set up in May 1987. The branch was headed by a dynamic branch manager Hemant Gupta. He was a BSc in computers and had previously worked in the data processing department of a manufacturing concern. To establish the Bhopal branch, Hemant Gupta realized the need for making Swastik Computer Systems, Bhopal known to the younger generation. With this in mind he introduced some innovative promotional schemes like offering scholarships to students doing well in the intelligence tests administered by the branch, giving personal computers to students to deposit term fees at their convenience. Hemant Gupta also ensured that teaching standards were high and computers at the branch were well maintained, so a student once enrolled felt that he had made the right decision by joining Swastik Computer Systems. He also made himself available from 8.00 a.m to 7.00 p.m at the branch. Students were free to go to him with their problems, which he took pains to solve. Soon Swastik Computer Systems was one of the leading computer training centres in Bhopal. As the Bhopal branch prospered, the head office at Delhi started taking an active interest in the running of this branch. The Regional Manager who visited Bhopal once a month started making frequent visits. During one of his visits, his attention was drawn to rumors that branch funds were being misappropriated. When the Regional Manager informed the Delhi office about the rumor, a team was sent to the Bhopal Branch to look into the matter. On investigation, the term was convinced that the rumors had some truth in them. It was found that a larger number of students attended the classes than were enrolled. It was felt that this fraud was not possible without the consent of Hemant Gupta, and without any further inquiry a decision was taken to remove him forthwith. Amit Verma who was a senior faculty at Swastik Computer Systems, Delhi was asked to take over the Bhopal branch as Manager. He was an MCA and had been associated with the organization since its inception. Amit Verma’s appointment at Bhopal was welcomed at the Bhopal branch by both, staff and faculty as he had the reputation of being an easy going person. After he joined the Bhopal, it was observed that Amit Verma, although academically sound, was not an effective administrator. His approach towards staff and faculty was lenient. He was not particular about punctuality and was not available during office hours. This had an adverse effect on faculty in general and classes in particular. Not only did classes suffer but even administrative work was affected. Monthly reports to the head office were not sent on time, as a result requisitions for computer servicing, reading material and funds were unduly delayed. Due to lack of maintenance, computer breakdowns became common, students did not receive their reading material on time and payment of building rent, and telephone bills etc were unnecessarily delayed. The symptoms of deterioration at the Bhopal branch were obvious. The branch which had an annual turnover of Rs 30.7 lakhs fell to Rs. 4 lakhs. As enrollments decreased the head office at Delhi started feeling the pinch. It started delaying transfer of funds to the Bhopal branch. As a result faculty salaries were unduly delayed. The faculty started leaving for greener pastures. Worried by the number of faculty turnover, the head office started a practice of recruiting only those faculties willing to sign a bond of 3 years. The organization started a practice of taking a deposit of Rupees 5000 from the joining faculty, which would be refunded after 3 years. In case the faculty left before this duration, the deposit stood forfeited. This policy further reduced the quality of faculty joining Swastik Computer Systems, Bhopal.
Questions: 1. What according to you went wrong at the Bhopal branch?
2. What can be done to revive the Bhopal branch?
Caselet 2 INTRODUCTION Rohit Jha, a small businessman from Rewa was a man full of ideas, enthusiasm and vision. He started his career with a small stationery business. With zeal to capitalize his business further, and with the desire to echo the voice of the people, he started with newsprint business in 1955. He launched the first six page Hindi newspaper daily, News Update, from Bhopal, capital of Madhya Pradesh. This was the beginning of the success journey. After having a good local response he decided to move further and the next edition was launched at Jabalpur, M.P. in the year 1958. In the expansion process after a decade News Update editions began from Sagar and Faridabad. Surprisingly, Jabalpur was the breadwinner, not Bhopal, though it was the capital city. Till 1983, it was like one of those family businesses. In the same year, Rohit Jha came into the print business as a result of an internal division of the family business, and decided to move on and relaunched the Bhopal edition. All newspapers then were working on sheet-fed machinery; and it became the first paper to get into web offset printing in Bhopal. Soon, the paper became number one in Bhopal, beating Kranti, the then local leader.
...................
Questions: 1. Comment on the strategies adopted by News Update for encroaching upon the Indore market.
2. Keeping in account the future competition, suggest strategies to Sunshine Group to overcome the problem of increasing newsprint cost.
Applied Theory
1. “The analysis of time series is done to understand the dynamic conditions for achieving the shortterm and long-term goals of business firms.” Discuss.
2. “Scaling describes the procedures by which numbers are assigned to various degrees of opinion, attitude and other concepts.” Discuss. Also point out the bases for scale classification