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Case – 1 -Fashion Statement through Khadi
As India’s traditional hand-spun cotton fabric, khadi feels coarse and unrefined. But the feelings it evokes
in anyone with any empathy in India’s heroic struggle for emancipation from colonial rule, is anything but
Till date the fabric bears the invisible-but-indelible imprint of the charkha (spinning wheel), the late
M.K. Gandhi’s revolutionary symbol for self-reliance and emancipation (through unity, expressed in the
refusal to kneel before insolent might). Instead of exporting raw cotton and importing fine Manchestermade
cloth, freedom fighters wanted all Indians to spin their own clothing and boycott imports to weaken
the British Raj.
With the end of Colonial Rule in 1947, the congress government headed by Jawaharlal Nehru opted
for state-led large-scale industrialization, instead of Gandhi’s idea of rule hut-industry development. But it
also decided to provide employment to thousands of spinners by selling their output through a vast
network of retails stores.
Thus was formed the Khadi and Village Industries Commission (KVIC), a nodal agency to promote
the fabric, with its Khadi Bhandar outlets in urban India.
Over the years, KIVC set up thousand of outlets across India. Sales were good. But with the
evolution of technology, perhaps it was inevitable that the sentimental dreams of village self-reliance
would be disrupted. And so it was. Modern machines of Europe’s industrial revolution were soon to arrive.
Indian industrialists set up capital-intensive textile mills and began the mass-production of fine cloth. As
the mills gained volume, they achieved economies of scale and started lowering prices. And so, the
labour-intensive homespun fabric losing out to mill fabric.
Driven by its sentimental attachment to Khadi, and concern for mass-scale-sector employment, the
government started subsidizing India’s traditional spinners. This was an extension of its ‘tax-the-rich’ and
‘feed-the-poor’ outlook, and was projected via the media as a good thing. In any case, KVIC was intended
to be a noble organization, motivated by lofty ideals instead of profit. For decades, all was fine behind the
‘khadi’ curtain of socialism’. The reason behind the support mechanism even acquired a holiness of its
own. Institutionalized, it became immune to doubt. But alas, the system was artificial and its main flaw lay
in the very ‘certain’. Public information was lacking, and so it escaped proper scrutiny. In the real would,
even the best-international projects can fail, or worse, degenerate into instruments for patronage.
But the 1990s, the vision of clothing the masses with khadi was beginning to look absurd. Despite
all policy incentives to the sector, people were buying efficiently machine-made textiles. The forces of
mass production were making polyester, which had gained economies of scale at the raw materials stage
(made from petrochemicals), cheaper still. Yet KVIC continued to produce huge quantities and sell khadi
clothes through its extensive retail chain. By now, khadi was more expensive than other fabrics and had
acquired the image of an outdated clothing material worm chiefly by politicians and social workers.
Ordinary people preferred cheaper alternatives.
Was khadi a lost cause-stuck in the time wrap? Clearly, if KVIC continued the way it was; it was
headed for trouble. Given India’s poor fiscal health, subsidies had become untenable. Yet, the fabric
couldn’t be torn out from consciousness of caring Indian. Something needed to be done. And fast.
By the start of the new century, KVIC discovered a pragmatic solution based on using modern
marketing to revive the fabric. After all, the Free Market can also accommodate common sentiments.
Instead of directing taxpayers’ money towards the cause, it was thought that private citizen should
contribute on their own volition (by buying khadi at premium prices).
The strategy? Refurbish the range, acquire an upscale image, aim the cloths at the well off and
reposition khadi as a fashion statements. Given KVIC’s lineage, the idea was radical. But it was worth a
try. KVIC started with a single-outlet experiment in Delhi’s Khan Market. The first air-conditioned shop
opened here in May 2001, selling khadi muslin garments designed by high-profile designers (Rohit Bal and
Malini Ramani), in addition to a well-packaged range of Ayurvedic products. It was a runaway success,
with Delhi’s elite thronging the shop.
KVIC started marketing two brands, Khadi and Sarvodaya, to which it owns the rights. The former
caters to the premium and export segments, and include essential oils, herbal oil soaps, face scrubs, and
dry fruits honey. Sarvodaya, the mass-market brand, sells mass items such as toilet soap, honey, pickles,
spices and incense sticks.
The move has also sparked off a controversy. Some Gandhians, troubled by the glamour, are
aghast at this ‘betrayal of ideals’. Realists, however, criticize them for failing to free themselves of their
dearly held ‘khadi mindset’. Don’t get them wrong. The latter love the old idealism too. But they also
realize that a product with great symbolic value deserve to be marketed as such, if it is to reach out, and
with mind-space for the poor weaver’s child who might have something to offer if given a chance. Holding
Gandhi’s method (or tools) as sacred amounts to confusing the means with the end.
The capital’s response to Khan Market shop has been so good that KVIC wants to upgrade a
significant fraction of its network. The transformation is to be entrusted to a new marketing company that
will function as any other professional firm. Plans to extend the concept include display units at airports
and modern outlets at Delhi’s Ashoka Hotel, Nehru Place, Hauz Khas, and Kamla Nagar. Next on the
agenda: Jaipur, Chandigarh and Lucknow. What’s more, the sales personnel are to be retrained for
customer orientation at the shop-floor level. The sale boost is expected to be substantial. The Khadi Gram
Udyog store at Connaught Place, New Delhi does an annual turnover o Rs. 10 crore. After renovation, this
is expected to touch close to Rs. 25 crore.
The product range will be widened too. Ahmedabad’s National Institute of Design (NID) has
proposed a special cell for design support, while Delhi’s National Institute of Fashion Technology (NIFT)
may also pitch in.
KVIC has hired three and agencies to promote its brands: Appeal for Khadi; Market Missionaries for
Sarvodaya and Pressman for the corporate and promotional schemes. The budget is about 25 crore. Khadi
campaign is likely to start by highlighting the brand’s eco-friendly credentials, before turning attitudes
towards it and portraying it as a lifestyle insignia.
Vivek Sahni has been roped in to do the packing graphics and retail outlets. E-commerce options
are also being weighed, with KVIC having already booked khadi.com and khadi.org as its domain names.
The export thrust will also be sharpened. Right the around 200 production units, which cater
exclusively to the export to the market. KVIC wants to identify new markets and tap them with its
products. Test marketing efforts are already underway in South Africa, Dubai, and a few other overseas
1. Would marketing in foreign countries require study of a popular country’s culture aspects and
buyer behaviour before marketing Khadi there? What aspects would need to be studied?
2. Suggest an approach to make Khadi garments popular among Indian youth.
Case-2- Purchase of a Microwave Oven
Ramesh Sikand and his family lived a comfortable two-bedroom flat in a respectable locality in a large
city. He was employed with a general insurance company in a supervisory capacity. His wife, Sumita was
a teacher in an English medium public school. Both their children, Rachit aged 10 and Sarita aged 8
years, were studying in the same school where Sumita was employed.
Just before Diwali in 2002, one Friday evening the family went shopping. Besides clothes for
children and few other things, they bought a 27 liter. Excel microwave from an outlet with good
reputation. Sumita was very happy and the children were excited with this new purchase. Both the
children were anticipating quick cooking of a variety of dishes they liked. They were expecting that
everyday their mom would give them school Tiffin-boxes packed with noodles other Chinese food.
To celebrate, Sumita invited two of her school colleagues for dinner and prepared a few dishes in
her brand new microwave. Both her friends observed her cooking with great interest. On the dinner table
most talk was around difficulties of both spouses being employed and the shortage of time to attend to so
many household chores. The friends, Ramesh and the kids profusely praised the dishes and how quickly
everything for the dinner was ready. What really took most time was cooking the Chapatis. Sumita said,
“ How nice and convenient it can be if some portable chappati-preparing gadget was available.”
Ramesh said, “It was my idea to buy a microwave. “Sumita said, “Why? You have forgotten. It
was I who two years ago during exam time suggested that it would be good if we buy a microwave.” Both
of them were trying to take credit for the purchase. Finally, both of them agreed that the idea to buy a
microwave was discussed after they attended the dinner at a friend’s place where for the first time they
saw a microwave in operation.
One of Sumita’s friends asked, “why did you buy this particular brand? I have read in the
newspaper just a few days back that there are attractive schemes on some brands.” Sumita and Ramesh
spoke simultaneously,” In fact, both of us have read advertisements and articles in magazines within the
last six months about what features and benefits every brand offers. “Sumita said, “As and when I got
the opportunity, I consulted some of my knowledgeable friends who have owned microwaves for quite
some time, what to look for and what brands to consider.” “You know, I came across some scaring
information about the safety of microwaves. Now the technology is so advanced that all those scaring tit
bits of information are quite baseless. ”Ramesh said, “Whatever we learned from magazine articles and
experienced friends has helped us quite a lot in buying this brand.” Sumita said, “About schemes, you are
right. We too got a set of three bowls to be used for microwave cooking. Besides, we have paid just a
thousand rupees and the rest would be paid in fifteen interest free installments. There is an extended
warranty of three years, and if we are not satisfied with the machine, we can return it within the first 30
days of purchase, and no questions asked. Our Rs.1,000 would be refunded in cash.”
One of Sumita’s friend said, “Recently, one of my relations in Delhi told me her bad experience with
this brand. She went to the extent of suggesting me never to buy this brand of microwave.” Ramesh said,
“I don’t know what to say about your relation’s experience. What information we could collect goes quite
in favor of this brand. Those who recommended it have had few years use experience without any
complaints.” Sumita’s friend said, “You may be right Bhaisaheb. But one thing we all know is that these
are machines and they are not perfect. Excellent cars with unmatched reputations like BMW, Rolls Royce,
and Mercedes too, need repairs.” She smiled, and said, “Haven’t you heard of Murphy’s Law “If a thing
can go wrong, it will”.
At about 10.30 pm, the friends thanked Sumita and Ramesh, and congratulated them for owning a
microwave and left. Sumita and Ramesh were a bit pensive after their departure. They felt somewhat
uneasy about the correctness of their decision in choosing this particular brand of microwave. They knew
their money was safe, but it would be embarrassing if they had made a mistake. They agreed to discuss
the matter with some of their eexperience3d friends.
1. Discuss whose decision it was to buy a microwave and when was the purchase decision made.
2. What factors influenced the purchase of the microwave?
3. What is likely to be the post-purchase behavior in this case and what is the significance of such
4. What is the significance of post-purchase behavior for the marketer?
Case-3- Fancy Dreams
The boardroom was filled with the voice of marketing manager, Ashutosh Kant. He was addressing the
meeting of senior managers of Fancy Dreams. “The last three months were spent by our market research
team in finding out the reasons and patterns of sales at stores. Let me emphasize that retail sales is
showing growth all over the country and in the process, competitions is intensifying. We can no longer
afford to sit and relax, instead we need to put ourselves fully to retain our market leadership.” There facts
revealed by the survey were particularly disturbing.
1. People found Fancy Dreams service staff bordering on aggressiveness and not really helpful, as
customers were never left to browse.
2. Children got bored and hence parents often left the store within minutes after finishing essential
shopping. They never browsed or spent leisure time at Fancy Dreams store, which could otherwise
help promote sales.
3. With many choices available in the market, consumers stopped treating Fancy Dreams store as
unique and exclusive anymore.
Rehman, an entrepreneur, had set up a garment shop in one of Delhi’s busy up market area about 10
years ago. He realized that to attract customers, he must do something new. With this in mind, he
chalked out a detailed plan to open a chain of stores called Fancy Dreams. Some major features of this
1. Complete dress range for kids, parents and teenagers.
2. Full accessories for women and in footwear, purses, jewelry and cosmetics.
3. A play center where kids could spend time when the parents shopped.
The stores were opened in two locations in Delhi on an area of 10,000 sq.feet each. Within six
months, the stores became popular and the business grew rapidly and in three years the turnover crossed
Rs.6 crore. The promotion plans included advertising in print media and through cable operators. The
store also conducted festivals such as children’s carnival, and Valentine special etc., to attract crowds of
Stress on store ambience was high as Rehman wanted to create an image of a complete shopping
experience for the entire family. The sales personnel were carefully selected and trained to promote, not
push, any product and to encourage customers to browse through.
The women’s section was given a feminine touch and the men’s section had polished wood and leather
all over. The garments, the accessories, and the gifts were displayed in large racks and
Full-length mirrors were placed in multiple places. Sales personnel present on all the three floors often
advised the customers but never showed around everything. The kid’s section included garments, toys,
books, and was manned by more staff. The play center for the kids was a major attraction. The parents
could safely leave their children in the place, situated on the ground floor itself. The place had separate
section of toys and books for children and was supervised by trained staff. They felt comfortable that
their children would be taken care off properly and the parents, therefore, could leave the children and
shop in a relaxed manner. This concept was unique and highly appreciated by customers and became the
major attraction for them.
The stores were one of a kind in the early 1990s and grew rapidly. The new sections on books, gifts,
and handicrafts were launched gradually and at any time the store had more than 200 categories of
products. During this time, the competition started intensifying as three similar ventures were launched in
the city. This didn’t bother Rehman much, because he felt he had built and image of Fancy Dreams being
the ultimate store. By 1996, multi-storey, one-stop stores became the trend in Delhi and many such
stores came up.
Rehman had expanded his stores in three other cities as well and the turnover had crossed Rs.40
crore. The total manpower rose to 500 and several new management and non-management cadres were
introduced in the company.
Last year during Diwali festival season, the store attracted nearly 40,000 customers in the entire
month. This worried Rehman as it was almost 20 percent less than their estimates. His marketing
manager, after ling discussions, hired a market research firm to study the buying pattern and preferences
of people walking in the store.
1. Identify the relevant major problems and issues in this case.
2. Suggest a strategy to rectify the problems.
Case -4- Impact of Retail Promotions on Consumers
Shoppers Delight, a large retail store, had above average quality and competitive prices. It advertised its
retail promotions in local newspapers. Its TV advertising was mainly aimed at building store image and
did not address retail promotions. The management knew it well that they had to advertise their retail
promotions more, but they did not feel comfortable with the effectiveness of present efforts and wanted to
better understand the impact of their present promotions.
To better understand the effectiveness of present efforts, a study of advertising exposure,
interpretation, and purchases was undertaken. Researchers conducted 50 in-depth interviews with
customers of the store’s target market to determine the appropriate product mix, price, ad copy and
media for the test. In addition, the store’s image and that of its two competitors were measured.
Based on the research findings, different product lines that would appeal to the target customers
were selected. The retail promotion was run for a full week. Full-page advertisements were released each
day in the two local Hindi newspapers, and also in one English newspaper that devotes six pages to the
coverage of the state.
Each evening, a sample of 100 target market customers were interviewed by telephone as follows:
1. Target customers were asked if they had read the newspaper that day. This was done to
determine their exposure to advertisement.
2. After general description of the product lines, the respondents were asked to recall any related
retail advertisements they had seen or read.
3. If the respondents were able to recall, they were asked to describe the ad, the promoted products,
sale prices, and the name of the sponsoring store.
4. If the respondents were accurate in their ad interpretation, they were asked to express their
intentions to purchase.
5. Respondents were also asked for suggestions to be incorporated in future promotions targeted at
this consumer segment.
Immediately after the close of promotion, 500 target market customers were surveyed to
determine what percentage of the target marker actually purchased the promoted products. It also
determined which source of information included them in their decision to purchase and the amount of
The results of the study showed that as exposure was 75 percent and ad awareness level was 68
percent and was considered as high. Only 43 percent respondents exposed to and aware of the ad
copy could accurately recall important details, such as the name of the store promoting the retail sale.
Just 43 percent correct interpretation was considered as low. Of those who could accurately interpret
the ad copy, 32 percent said they intended to respond by purchasing the advertised products and 68
percent said they had no intention to buy. This yields an overall intention to buy of 7 percent. The
largest area of lost opportunity was due to those who did not accurately interpret the ad copy.
The post-promotion survey indicated that only 4.2 percent of the target market customers made
purchases of the promoted products during the promotion period. In terms of how these buyers learnt
of the promotion, 46 percent mentioned newspaper A (Hindi), 27perecent newspaper B (Hindi), 8
percent newspaper (English), and 15 percent learnt about sale through word-of –mouth
The retail promotion was judged as successful in many ways, besides yielding the sales worth
Rs.900,000. However, management was concerned about not achieving a higher level of ad
comprehension, missing a significant sales opportunity. It was believed that a better ad would have at
least 75 percent correct comprehension among those aware of the ad. This in turn would almost
double sales without any additional cost.
1. Why would some consumers have high-involvement levels in learning about this sales promotion?
2. Is a level of 75 percent comprehension realistic among those who become aware of an ad? Why or
3. Do you think such promotions are likely to influence the quality image of the retail store? Explain.
Case- 5- Tattoos and Extended Self
Most product and services associated with extended self and physically separated from the
physically self. Until recently, exceptions were limited primarily to hairstyles and coloring and cosmetics.
One could also alter the physical self through excersise,diet,weight training and plastic surgery. In recent
years, body piercling and tattooing have become additional ways to alter both the extended self and the
physical self. Tattooing is unique (expect for plastic surgery) in that it is a relatively unalterable change to
physical self. It can be done primarily for adornment or beauty enhancement reasons. Or, it conserve
primarily as public or private symbol.
For most of this century, tattooing was not socially acceptable among most social groups in the
United States. The most noticeable exception was enlisted men in the Navy, and even then alcohol
consumption was frequently involved in the decision to secure a tattoo. This has changed sharply in the
recent years. Why has this become socially acceptable and what does it mean it man to the self concept of
those who secure tattoos? Research on tattoo focuses on four themes – the renaissance of tattooing, the
impact of the tattoo on the extended self, the risks associated with acquiring a tattoo, and the satisfaction
/ dissatisfaction that can result.
A tattoo renaissance began in the 1960s with the hippie movement and the evolution of skilled
tattoo artists in the San Francisco area. Interest also began to grow in the historical and ethnographic
aspects of the tattoo medium. The commercial art world and academic art historians began to pay
attention to tattooing as an art from. This, in turn, attracted better tattoo artist. By the early 1990s public
figures, particularly athletes began to wear visible tattoos, which increased their acceptability among the
more venturesome member of “mainstream” society. Tattoos have meaning on at least three levels. First,
there is the meaning associated with having a tattoo .While increasingly common, having a tattoo is still
far from the norm. Thus, having a tattoo in and of itself makes a statement about the person. A person
.with a tattoo is still viewed as somewhat of a risk taker or non –conformist .The location of the tattoo also
contains meaning. The more visible the tattoo, the more rebellious or non – conforming the individual
appears to be. The tattoo itself is a major source of meaning, both private and symbolic. Tattoos may
symbolize group membership, interests, activities, relationship, life transition, or values. Tattoos may be
unique and failed primarily with personal meaning or their meaning may be rooted in the cultural practice
Acquiring a tattoo is risky. It is very expensive to remove or alter a tattoo .Thus , if you don’t like
your tattoo or your tastes change over time , you are at financial risk ., There is also the social risk that
one’s current or future friends , colleagues , or employers will have a negative reaction to the tattoo.
Finally, there is still physiological risk associated with acquiring a tattoo.
Ultimately, there is evaluation and satisfaction or dissatisfaction. As mentioned earlier,
dissatisfaction is difficult and expensive to correct. Satisfaction, often at a high level, is a frequent
outcome. Some research indicates that this may even produce addiction.
(Source advances in consumer Research, ed J. W. Alba and J. W. Hutchinson, 1998)
(Authors’ note: Tattooing has been in India for the last several decades. Rural people visiting meals
were to get their names tattooed on their forearms. Womenfolk were more interested in getting some
design or flowers tattooed. Probably, they did not have such complex psychological reasons as the
research in United States shows. In acquiring a tattoo, the new generation youth may be having complex
psychological reasons as reported in the study).
Question:- (Any Two)
1. What is the significance of acquiring a tattoo in India? Are tattoos considered a way of making a
2. Contact two educated persons who wear a tattoo (just not the name).Interview them to find out
what does it mean to them?
3. Interview three of your friends. Find out about their self- concepts and what kind of tattoo would
they like have.
BUSINESS STRATEGY KSBM ONGOING EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558
SUBJECT: Business Strategy
Case 1 (20 Marks)
Door Darshan is the India’s premier public service broadcaster with more than 1,000 transmitters
covering 90% of the country’s population across on estimated 70 million homes. It has more than
20,000 employees managing its metro and regional channels. Recent years have seen growing
competition from many private channels numbering more than 65, and the cable and satellite
operators (C & S). The C & S network reaches nearly 30 million homes and is growing at a very fast
DD’s business model is based on selling half – hour slots of commercial time to the programme
producers and charging them a minimum guarantee. For instance, the present tariff for the first 20
episodes of a programme Rs.30 lakhs plus the cost of production of the programme. In exchange
the procedures get 780 seconds of commercial time that he can sell to advertisers and can generate
revenue. Break-even point for procedures, at the present rates, thus is Rs.75,000 for a 10 second
advertising spot. Beyond 20 episodes, the minimum guarantee is Rs.65 lakhs for which the
procedures has to charge Rs.1,15,000 for a 10 second spot in order to break-even. It is at this
point the advertisers face a problem – the competitive rates for a 10 second spot is Rs.50,000.
Procedures are possessive about buying commercial time on DD. As a result the DD’s projected
growth of revenue is only commercial time on DD. As a result the DD’s projected growth of revenue
is only 6-
10% as against 50-60% for the private sector channels. Software suppliers, advertisers and
audiences are deserting DD owing to its unrealistic pricing policy. DD has options before it. First, it
should privates, second it should remain purely public service broadcaster and third, a middle path.
The challenge seems to be exploit DD’s immense potential and emerge as a formidable player in the
i. What is the best option, in your view, for DD?
ii. Analyse the SWOT factors the DD has.
iii. Why do you think that the proposed alternative is the best?
In 2006-07 PTC Food division decided to enter the fast growing (20-30% annually) snacks segment,
an altogether new to it. It had only one national competitor-Trepsico’s Trito. After a year its wafer
snack brand- Ringo, fetched 20% market share across the country. Ringo’s introduction was
coincided with the cricket world cup. The wafer snacks market is estimated to be around Rs. 250
The company could take the advantage of its existing distribution network and also source potatoes
from farmers easily. Before the PTC could enter the market a cross-functional team made a customer
survey through a marketing research group in 14 cities of the country to know about the snacks of
eating habits of people. The result showed that the customers within the age-group of 15-24 years
were the most promising for the product as they were quite enthusiastic about experimenting new
snack taste. The company reported to its chefs and the chefs came out with 16 flavours with varying
tastes suiting to the targetted age-group.
The company decided to target the youngsters as primary target on the assumption that once they
are lured in, it was easier to reach the whole family.
Advertising in this category was extremely crowded. Every week two-three local products in new
names were launched, sometimes with similar names. To break through this clutter the company
decided to bank upon humour appeal.
The Industry sources reveal that PTC spent about Rs. 50 crores on advertisement and used all
possible media- print and electonic, both including the creation of its own website,
Ringoringoyoungo.com with offers of online games, contests etc. Mobile phone tone downloading
was also planned which proved very effective among teenagers. The site was advertised on all
dotcom networks. Em TV, Shine TV, Bee TV and other important channels were also used for its
advertisement along with FM radio channels in about 60 cities with large hoardings at strategic
Analysts believes that Ringo’s success story owes a lot to PTC’s widespread distribution
channels and aggressive advertisements. Humour appeal was a big success. The `Ringo’ was made
visible by painting the Railway bogies passing across the States. It has also been successful to
induce Lovely Brothers’ Future Group to replace Trito in their Big-Bazaar and chain of food Bazaars.
PTC is paying 4% higher margin than Trepsico to Future group and other retailers.
Ringo to giving Trepsico a run for its money. Trito’s share has already been reduced considerably.
Retail tie- ups, regional flavours, regional humour appeals have helped PTC. But PTC still wants a
bigger share in the market and in foreign markets also, if possible.
Answer the following questions:
a) What is SWOT Analysis? (4 Marks)
b) What are the strength of PTC? (4 Marks)
c) What are the weaknesses of PTC for entering into the branded snacks market? (4 Marks)
d) What kind of marketing strategy was formulated and implemented for Ringo?
What else need to be done by Ringo so as to enlarge its market? (8 marks )
Dr. Sukumar inherited his father’s Dey’s Lab in Delhi in 1995. Till 2002, he owned 4 labs in the National
Capital Region (NCR). His ambition was to turn it into a National chain. The number increased to 7 in
2003 across the country, including the acquisition of Platinum lab in Mumbai. The number is likely to go
to 50 within 2 – 3 years from 21 at present. Infusion of Rs.28 crores for a 26% stake by Pharma Capital
has its growth strategy.
The lab with a revenue of Rs.75 crores is among top three Pathological labs in India with Atlantic
(Rs.77 crores) and Pacific (Rs.55 crores). Yet its market share is only 2% of Rs.3,500 crores
market. The top 3 firms command only 6% as against 40 – 45% by their counterparts in the USA.
There are about 20,000 to 1,00,000 stand alone labs engaged in routine pathological business in
India, with no system of mandatory licensing and registration. That is why Dr. Sukumar has not
gone for acquisition or joint ventures. He does not find many existing laboratories meeting quality
standards. His six labs have been accredited nationally whereon many large hospitals have not
thought of accreditation. The College of American Pathologists accreditation of Dey’s lab would help it
to reach clients outside India.
In Dey’s Lab, the bio-chemistry and blood testing equipments are sanitized every day. The bar
coding and automated registration of patients do not allow any identity mix-ups. Even routine tests
are conducted with highly sophisticated systems. Technical expertise enables them to carry out
1650 variety of tests. Same day reports are available for samples reaching by 3 p.m. and by 7 a.m.
next day for samples from 500 collection centres located across the country. Their technicians work
round the clock, unlike competitors. Home services for collection and reporting is also available.
There is a huge unutilized capacity. Now it is trying to top other segments. 20% of its total business
comes through its main laboratory which acts as a reference lab for many leading hospitals. New
mega labs are being built to encash preclinical and multi – centre clinical trials questions.
i. What do you understand by the term Vision? What is the difference between ‘Vision’ and
‘Mission’? What vision Dr. Sukumar has at the time of inheritance of Dey’s lab? Has it been
achieved? ( 8 Marks)
ii. For growth what business strategy has been adopted by Dr. Sukumar?
iii.What is the marketing strategy of Dr. Sukumar to overtake its competitors?
iv. In your opinion what could be the biggest weakness in Dr. Sukumar’s business strategy?
. (4 Marks)
Case : 4 (20 Marks )
The origins of Deepak Nitrite—the flagship comp any of the Deepak group of industries-go back to 1970
when Chimanlal K. Mehta, an entrepreneur, sensing an opportunity in India’s drive towards selfsufficiency
and import substitution and relying on his trading and manufacturing experience, ventured into
the chemicals industry. The Company was originally incorporated as Deepak Nitrite Private Limited in
1970, under the Companies Act, 1956 and was subsequently converted into a public limited company in
the name of Deepak Nitrite Limited in 1971. The company’s registered office is at Vadodara and its
corporate office is at Pune with manufacturing plants in Gujarat and Maharashtra. Net sales for the year
ending March 2007 are about Rs. 4172 million and net profit is Rs. 357 million. Exports constitute nearly
half of the sales.
Overt he years, Deepak Nitrite has grown impressively through a judicious use of integration, related
diversification and internationalization strategies, using the means of acquisition and restructuring. In
1983, adopting a horizontal integration strategy, the company used foreign collaboration to start
commercial production of ammonia. In 1989, the group employed ammonia-based forward integration and
also diversified into the chemicals related area of methanol. In 1992 came the commercial production of
low-density ammonium nitrate, nitro phosphate and nitric acid, resulting in a multi-product portfolio
consisting of organic, inorganic, fine and specialty chemicals. Deepak Nitrite has made tremendous
progress over the years and has posted impressive financial results as well as excellent export
performance. It (the growth of the company), was born out of a process of deep thinking, strategy and
planning,’ said the managing director Deepak Mehta, who claims that planned strategy has led to growth.
Environmental scanning led to foreseeing the threats coming from a dismantled duty regime. Anticipating
this, the company went about implementing strategies that would convert these threats into opportunities.
The strategic approach was to build on its strengths in niche areas of the chemicals market, leverage
strong R & D and a robust lab to product ion skills, bring the strengths up to global levels and work
towards a leadership position.
The success of Deepak Nitrite could be attributed to its focused strategy. Implementation capabilities. A
series of plans, programmes and project have been initiated and implemented over the years, in
alignment with its corporate and business strategies. For instance, it has worked on a number of R&D
projects over the years to develop its skills to swiftly transfer products from the labs through production to
the markets. It has effectively developed differentiating capabilities by planning and implementing
projects for handling bulk products to handling batch products, transforming from a commodity supplier to
a value-added, branded product supplier with customization skills. Projects in supply chain management
have helped the company in extending its ability to source its own raw material to tracking customers’
delivery and inventory scheduling. Cost control has been attempted through wider sourcing; including
international vend ors, and investing in energy-saving equipments.
In the course of strategy implementation, Deepak Nitrite has to deal with a host of government agencies
for procedural implementation. For example, raising finance has taken it to SEBI. A continual interaction
takes place with the export and import regulatory authorities. For instance, anti-dumping duties have
been levied on the comp any for sourcing cheap materials from China. Being in the chemical processing
industry, the company is under the scrutiny of environmental protection agencies. It has been a signatory
to the ‘Responsible Care’ initiative of the global chemical industry. It has also achieved the ISO 14001
certification. Dealing with explosives, the company has to seek licenses from the Department of
Explosives, Industrial Safety and Health Departments and State Pollution Boards of Gujarat and
Maharashtra. Apart from these are the regulatory requirements dealing with taxation purposes. Resource
generation has been through raising money in the capital markets on the basis of its good reputation,
internal accruals, loans from commercial banks and financial institutions and sale of factory land at
1. Identify and discuss briefly, the three themes of strategy implementation of activating strategies,
managing change and achieving effectiveness in the case of Deepak Nitrite.
2. picking up data from the case, demonstrate how formulation and implementation of strategy are