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RAJ SCOOTERS LIMITED

Is marketing necessary in sellers market?

For the first time since his joining Raj Scooters more than a year ago, Alok Joshi was

feeling frustrated. He wondered whether he would ever be able to apply in practice any of his

modern marketing concepts in an organization like Raj Scooters which was in a virtually

commanding position in the market with its orderbook full for next six years.

Alok had completed his Bachelors in Mechanical Engineering from Delhi University and

had joined the MBA course in the university. During his studies, he had come to know of the

exciting field of marketing. He had, therefore, specialized in Marketing Management.

Personnel selection team of Raj Scooters was among the early ones to arrive at the

campus to conduct interviews. They were impressed by the strong conviction with which Alok

had emphasized the role a professional Marketing Manager can play in shaping the future of an

organization. He was offered the job as a junior marketing executive in the company.

It was for the first time that Raj Scooters had employed MBAs and as such they had no

systematic training programme. He was asked to report to the Personnel Manager for first six

months and in consultation with him, design an appropriate training schedule. During this time,

Alok could learn the practical functioning of the organization and its policies.

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Raj Scooters was incorporated in the year 1951 in the city of Hyderabad. The company

first started import of a foreign model of scooters for the Indian market. Slowly the company

switched over to import of components and started assembly work in the factory. By 1965, the

company was manufacturing a completely indigenous scooter. Right from the beginning, the

company and its products had a very strong position in the market and the sales rose up

rapidly. This was not merely due to being the first in the market. Maximum emphasis was

placed on quality. Their scooters had an inherent design speciality that gave it a far superior

pick-up and efficiency as compared to other competing products. The vehicle required very

little maintenance and hence was most liked by all ages as a reliable companion. The company

had been able to establish a good network of service centres to ensure that the users were not

put to any inconvenience. This was made possible by consistent hard work which the

production staff put in, in perfecting the product. And the management was right in saying that

a good product sells itself!

The company hardly ever advertised its products and even the few ads were essentially

given for charitable purposes. The orders came in at a pace the company could not cope with

inspite of the fact that time and again they were increasing the capacity. The customers showed

their willingness to wait for long periods to get Raj Scooters.

Competition was gradually increasing in the two wheelers market over last six years.

With the phenomenal rise in petrol prices, Govt. of India issued several licenses, mostly to

various State Industrial Developmental Corporations to manufacture scooters to increase the

supply position as these are economical substitutes for automobiles. All the competitors

products were, however, inferior in design and offered lower fuel efficiency and poorer pick-up.

Naturally, all of them were only the second choice of the customers. Raj Scooters business thuswas practically unaffected with the competition taking only the spilled over demand.

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The Managing Director of Raj Scooters was a dynamic man with several successful

industries to his credit. He did realize that his company enjoyed a near monopoly for a long

time which with the changing environmental conditions may not continue. The company was

not geared up to face tough competition if it came its way. Thus, for the first time, the company

had hired in Alok, a marketing man to make the sales efforts market oriented.

Immediately after completing his initial training, Alok joined the sales department

reporting to the Sales Manager. The organizational set up in his department consisted of the

Sales Manager with four senior Sales Assistants who looked after the sales of four zones into

which the country was divided. The main works involve allocating the quotas to various dealers

from the large dealer network and different categories of direct customers. Alok enjoyed his

work during the next six months and many of his suggestions were well received by the Sales

Manager.

Lately, he was getting a feeling that most of the changes he had brought about were

petty in nature that could have been done by anyone without an MBA. As he tried to analyze

the situation further, he realized that one of the main reasons for his lack of any

accomplishment was that this company had no problems on the marketing side. He felt thatlack of problems meant lack of opportunities to show his abilities. These thoughts were very

frustrating and Alok wondered if he had made a mistake in selecting and organization for

making a career in marketing. And the more time he spent there, he thought, the more rusted

his abilities will be and hence the more disqualified he will be from entering any other

organization with challenges. Does that mean he would have to quit as soon as possible? This

thought was something he would never have entertained a few weeks ago.

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PRODUCTION OF PASSENGER VEHICLES (Nos)

Item 1975-76 1976-77 1977-78 1978-79

Cars 21,777 36,449 34,422 33,567

Scooters 112,550 156,852 165,320 175,203

Motor Cycles 70,105 72,462 68,243 87,427

Mopeds 34,377 34,449 38,129 47,595

(Source: D. G. T. D.)

Questions:

1. Do you agree that Raj Scooters does not really need marketing?2. Do you expect this companys dominance to be challenged sometime in future? Discuss

why and how.

3. What long term strategy would you recommend for Raj Scooters?Solution:

Raj Scooters does need marketing.