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Subject Code:GM04 Subject Name:MANAGERIAL ECONOMICS Component name:TERM END
Assignment Start Date:10/02/2021 Assignment End Date:20/02/2021
Question 1:-Besides analyzing the managerial problems of business units, managerial economics aims at finding out optimal solutions to the business problems of firms.
a) TRUE
b) FALSE
Case Study
In most categories of consumer products, there is one dominant segment, glucose in biscuits, cola in soft drinks, vanilla in ice creams. These are good categories, but the same thing can be extended to the other product categories. Now the tendency is that when a new player wants to enter an established product category, he automatically looks at the dominant segment first. This is known as "vanilla trap". A trap because you, as a new entrant, can never come close to challenging the dominance of the biggest player in the vanilla segment. For example When Cadbury India decided to extend to biscuits, it started of by challenging Parle in glucose, a segment where Parle`s strength is unmatched, Cadbury didn`t succeed. By the time it launched Chocolate biscuits, it was too late. Then take Britannia, for years, it tried to break Parle`s dominance in glucose biscuits, with little success. It then went for number of branded products that gave it an aura and gained it respect and attention. Little hearts was so different, it gave Britannia a distinction. And then the company launched Tiger, a glucose biscuit. Tiger i snow a large brand in the glucose segment. You have got to do something that is very specially your own. Otherwise the consumer won`t pay you attention and trade won`t want to stock your product. Therefore, you can`t fight the dominant guy in the dominant segment. get into the segment`s volume indirectly instead.
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