CASE 27
Choosing the Right Horse
Star Ltd., manufactures colour TV sets priced lower than the national and local marketers. It has created a name for it in the middle and lower segments of the market. The TV sets priced at Rs. 10,000 per piece give a margin of Rs. 2,000 over its manufacturing cost of Rs. 8,000 per unit. To keep the selling costs low, it goes for local advertising through wall paintings, hoardings and leaflets distribution through newspaper boys. Its advertising and promotion expenditure is in the range of 1–2 per cent of its sales revenues depending on the market characteristics and competition.
It is considering to route its sales through a marketing agency and obtained proposals from three such agencies. All the three agencies ...
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