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CONSUMER BEHAVIOR
CASE-I:
MAKING MAGIC THE MULTIPLEX WAY
The
middle class of India, a virtual nonexistent entity on Independence, has
gradually become more sensible, educated and demanding. The overall growth of
the economy has given a tremendous thrust to the middle class, expected to grow
by 5 to 10 percent annually. It has grown over 57 million by 2001-02 and is
expected to cross 153 million by 2009-10.
The
average household income in urban India has grown at a CAGR of 5 per cent over
the last decade, not only is this, but the age profile of the INDIAN spenders
is also undergoing a sea of changes. NCAER has identified five categories of
household on basis of income which is summarised in Table 1 below:
The
multiplex business has rightly tapped the growth of consumerism in India as it
has understood the pulse of the Indian Consumer’s preference towards superior
ambience, comfortable seating, air-conditioning and good quality snacks, even
at the cost of paying higher price. The average price of ticket in a
conventional theatre is Rs. 15-35, while a multiplex charges on an average of
Rs. 75-350 and consumer is willing to dish out this extra amount to enjoy the
“complete” movie experience, which most of the traditional theatres could not
render and are thus facing the fate of near extinction. It thus promises to
take the moviegoers’ experience to a whole new level and giving a new dimension
to watching movies at theatres.
Posers
1.
What lessons can you draw from the above
case regarding consumer behavior?
2.
Do you think change in consumer
perception in middle class has been instrumental in emergence of multiplexes?
What can be other reasons?
3.
Observe Table 1. Which of the groups,
according to you, would have demand for multiplexes?
4.
Would law of diminishing marginal utility
apply to movie watching? Will this affect the growth rate of multiplexes? Or
can it be seen a cause for establishment of multiplexes? Give argument in support for your contention.
5.
Can multiplexes use the concept of
consumer surplus for attracting more consumers? How?
CASE II: SUNDER SINGH
Sunder Singh
had studied only up to high school. He was 32-years of age, lived alone in a
rented room, and worked eight-hour shift at one petrol pump, then went to the
other one for another eight-hour shift. He had a girl friend and was planning
to marry.
One day when
he returned from work, he got a note from his girl friend that she was getting
married to someone else and he need not bother her. This was a terrible shock
to Sunder Singh and he fell apart. He stopped going to work, spent sleepless
nights, and was very depressed. After a month, he was running Iowan his savings
and approached his earlier employers to get back his job, but they would not
give him a second chance. He had to quit his rented room, and sold few things
that he had. He would do some odd jobs at the railway station or the bus
terminal.
QUESTIONS:
1. What
does the purchase of a product like Nike mean to Sunder Singh?
2. What
does the story say about our society and the impact of marketing on consumer
behavior?
CASE-III: TOYOTA
Of
all the slogans kicked around Toyota, the key one is kaizen, which means “continuous improvement” in Japanese. While
many other companies strive for dramatic breakthrough, Toyota overtook Ford
Motor Company to become the second largest automaker in the world. Ford had
been the second largest since 1931.
Toyota
simply is tops in quality, production, and efficiency. From its factories pour
a wide range of cars, built with unequaled
precision. Toyota turns out luxury sedans with Mercedes-Benz-like
quality using one-sixth the labor Mercedes does. The company originated
just-in-time production and remains its leading practitioner. It has close
relationships with its suppliers and rigid engineering specifications for the
products it purchases
Questions:
1.
In what ways is Toyota’s new-product
development system designed to serve customers?
2.
In what ways is Toyota’s manufacturing
system designed to serve customers?
3.
How does Toyota personalize its cars and
trucks to meet individual consumer needs?
CASE-IV: EXPOSURE, ATTENTION, AND COMPREHENSION ON THE
INTERNET
The
Internet universe literally grows more cluttered by the minute. According to
Network Solutions, Inc., which registers the vast majority of Web addresses
around the world, about 10,000 new addresses are registered each day. That
means by the time you finish reading this case, about 60 new domain names will
have been gobbled up. With all the clutter on the Web, how have some firms been
able to stand out and attract millions of customers?
Question:
1.
Consider the e-mail campaigns discussed
in the case. Why do you think these campaigns were successful? Discuss the
attention processes that were at work. Do you see any potential drawbacks to
this type of marketing?
2.
During the 2000 Super Bowl, ABC invited
viewers to visit its Enhanced TV website. Fans could play trivia, see replays,
participate in polls and chat rooms, and view player statistics. The site
received an estimated 1 million hits. Why? Frame your answer in terms of
exposure, attention, and comprehension.
3.
Think about your own Web surfing
patterns. Write down the reasons you visit sites. Which of the marketing
strategies discussed in the case do you find most (and least) influential?
CASE: V PEAPOD ONLINE
GROCERY—2003
The
online grocery turned out to be a lot tougher than analysts thought a few years
ago. Many of the early online grocers, including Webvan, ShopLink, StreamLine,
Kosmom, Homeruns, and PDQuick, went bankrupt and out of business. At one time,
Webvan had 46 percent of the online grocery business, but it still wasn’t
profitable enough to survive. The new business model for online grocers is to
be part of an existing brick-and-mortar chain. Large grocery chains, like
Safeway and Albertson’s, are experiencing sales growth in their online business
but have yet to turn a profit. Jupiter Research estimates that online grocery
sales will be over $5 billion by 2007, about 1 percent of all grocery sales,
while it expects more than 5 percent of all retail sales to be online by then.
A few years ago, optimistic analysts estimated online grocery sales would be 10
to 20 times that by 2005, but it didn’t work out that way.
Question:
1.
What behaviors are involved in online
grocery shopping? How does online shopping compare with traditional shopping in
terms of behavioral effort?
2.
What types of consumers are likely to
value online grocery shopping from Peapod?
3.
Overall, what do you think about the idea
of online grocery shopping? How does it compare with simply eating in
restaurants and avoiding grocery shopping and cooking altogether?
CASE: VI SONY
In
just over half-century, Sony Corporation has from a 10-person engineering
research group operating out of a bombed-out department store to one of the
largest, most complex, and best-known companies in the world. Sony co-founders
Masaru Ibuka and Akio Morita met while serving on Japan’s Wartime Research
Committee during World War II. After the war, in 1946, the pair got back
together and formed Tokyo Telecommunications Engineering Corporation to repair
radios and build shortwave radio adapters. The first breakthrough product came
in 1950, when the company produced Japan’s first tape recorder, which proved
very popular in music schools and in courtrooms as a replacement for
stenographers.
Question:
1.
Identify and discuss some of the cultural
meanings for Sony possessed by consumers in your country. Discuss how these
cultural meaning were developed and how they influence consumers’ behaviors
(and affect and cognition). What is the role of marketing strategies in
creating and maintaining (or modifying) these cultural meanings?
2.
It is often stated that the world is
becoming smaller because today people communicate relatively easily across time
and distance. Discuss whether that has been beneficial for Sony. What are some
marketing challenges it presents?
3.
What do you think about Sony’s tradition
of region-specific or nation-specific marketing? Would Sony be better served by
working to create a more uniform global image?
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