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Marketing Management II Term Project  A Report  By Meera N. (63) Pisharody Ranjit (75) Saranga Sharma (89) Sruthi S (103) Subasri S (104) Sujith Valsalan (113) March 02, 2010  

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Marketing Management II

Term Project

 A Report 


Meera N. (63)

Pisharody Ranjit (75)

Saranga Sharma (89)

Sruthi S (103)

Subasri S (104)

Sujith Valsalan (113)

March 02, 2010  

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Marketing Management II Page 3


1 Objectives 4

2 Situation Analysis 4

2.1 Industry Analysis 4

2.2 Competitor Analysis 5

2.3 Company Analysis 6

2.4 SWOT Analysis 11

3 Segmentation, Targeting and Positioning 12

3.1 Segmentation 12

3.2 Targeting 13

3.3 Positioning 14

4 Marketing Mix 14

4.1 Product 14

4.2 Price 14

4.3 Distribution 15

4.4 Promotion 15

5 Plan for the next year 16

6 Conclusion 18

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1  Objectives

y  Analyze the current trends in film exhibition industry

y  Study the marketing strategy of PVR Cinemas

y  Provide a plan for the next 1 year 

2  Situation Analysis

2.1  Industry AnalysisIndia¶s Film industry is one of the largest in the world with more than 1000 movie releases and over 3

 billion movie goers annually. The filmed entertainment sector is estimated to have grown at a Compound

Average Growth Rate (CAGR) of 17.7 percent over the past 3 years. The entertainment industry is

expected to grow faster than GDP growth. The film segment will ride on the growth of multiplexes and

digital distribution formats. In India the multiplex business is modeled to the ones in developed countries.

Whilst Southern India accounts for the majority of cinemas, the majority of multiplexes are in north India

The main revenue stream is box-office collections from movies. Other revenue streams include rent from

display systems, restaurant rentals, food and beverage collections, product launch rentals and promotions

 by companies. In several cases the other revenue streams are often larger than box-office collections, but

movies are the main pull of such complexes. In India, there are only 12 screens per million population as

compared to 117 screens per million in US. In order to encourage investment in the film exhibition sector,

many state governments have announced policies offering entertainment tax benefits. This has

encouraged the growth of Multiplex Cinemas and also encouraged single-screen theaters to convert into

Multiplexes. The quantum of entertainment tax benefit which may be available in each state is different

and the availability of these exemptions would be dependant on compliance with certain conditions

specified by the relevant state. One of the main features of the Indian film industry that differentiates it

from those in western countries is the limited initial release of films. In the long term, the industry is

 projected to grow at the CAGR of 9.1 percent during 2008-2013, and reach the size of INR 168.6 billion

 by 2013. The performance is expected to be mainly driven by improved contributions from multiplexes in

the overall exhibition industry, rise in overseas box office collections and growth in home video segment.

While theatrical collections continue to be the largest contributor to Industry revenues, ancillary revenue

streams such as sale of TV rights, mobile rights, internet download rights etc are becoming increasingly

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important in the overall pie of the industry (S ource: KPMG±The Indian Entertainment   and Media

 Industry Report 2009. 

2.2  Competitor Analysis

PVR Cinema currently faces competition from other companies in the Indian film exhibition sector.

Major players in the field are PVR Cinemas, Inox Leisure Limited, Adlabs Films Limited, Shrinagar 

Cinemas Limited, E City Entertainment, Wave Cinemas, DT Cinemas and Fun Cinemas.

Ma jor Competitors


INOX has recently acquired 50.5% stake in Fame India which doubled Inox¶s exhibition assets as the

combined strength of the entity is now 55 multiplexes with 204 screens and 57,891 seats resulting in one

of India¶s largest multiplex network leaving behind PVR. Compared to PVR, INOX is strong in south

India too. The company has experienced fall in margin over the last three years due to pressure on

revenue realizations.

BIG Cinemas

The Anil Ambani-promoted BIG Cinemas is the biggest multiplex operator with 516 screens, of which

246 are in India. The biggest strong point for the company is that they are mostly centrally located. The

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 possession of large property and execution of their own projects help BIG cinema to price its shows

competitively compared to its competitors. The promoters have been investing in multiple streams across

the value chain of film business.

DT Cinemas

It is a wholly owned subsidiary of DLF group.PVR had signed an acquisition agreement with DT

Cinemas in November last year. Recently it was announced that PVR Ltd has terminated its agreement to

acquire the cinema exhibition business of DT Cinemas Ltd. due to non compliance of set conditions. The

strengths of DT Cinemas are it has imported state-of-the-art projection systems from Christie, the US-

 based company known to have one of the best projection systems in the world. Currently 26 screens are

operational which are spread across six locations in Delhi. But it lacks a Pan India presence unlike PVR.

Wave cinemas

One of the unique ventures of Wave Inc. is Wave Cinemas ± the Group¶s own Movie Theater launched on

the 27th September 2003. With projection systems from Kinoton-Germany, Audio Systems from Martin

Audio-UK, Screens from Harkness Hall-UK and Dolby Cinema Processors from USA, movie viewing at

Wave Cinemas is definitely a distinctive experience for the populace. The Wave Cinemas at selected

venues offer the star attraction and revolutionary concept - the µPlatinum Lounge¶ ± a royal luxurious

movie-viewing experience. Wave cinemas are meant for an elite crowd and do not cater to the needs of 

the middle class like a PVR talkies does.

Threat of Substitutes

In addition, PVR faces competition from other forms of entertainment including, television, film DVDs,

newspapers, magazines, radio, internet and theatre and advances in technology. Piracy and home-viewing

may reduce the number of cinema patrons. What are the strengths and weaknesses of competitors 

2.3  Company Analysis

Priya Exhibitors (P) Ltd is a part of the diversified Bijli Group. They revolutionized the existing cinema

in June 1991 through a slew of active steps which include the installation of a Dolby stereo sound system,

 possession of exclusive rights to screen blockbusters from major distributors mainly Warner Brothers,


Century Fox, Small Wonder etc thereby attracting over 30000 patrons a week.


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The main goals of PVR are to remain India¶s largest and most preferred cinema exhibition company. To

achieve these goals, the business strategy emphasizes the following elements:

y  Continue to provide the highest exhibition standards to achieve customer delight. No pictures 

y  Increase the number of cinemas under the operation on a pan India basis. Their strategy is to

adopt a price-based differentiation model, offering patrons a superior cinema-going experience at

each price point.

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y  Establish and/or acquire cinemas in line with their goal to remain India¶s largest and most

 preferred film exhibition company.

y  Open lower cost cinemas using digital technology along with the refurbishment and remodeling

of the cinema to give patrons a superior movie experience at an affordable price

Current and anticipated state of  f inancial and human resources

The employee base of PVR totals upto more than 700 across India, approximately 60 of them are in

management positions. They are so worker-friendly that even during the contraction, not a single person

in housekeeping was laid off. You are wasting the space by displaying pictures 

Sources of revenue / f actors that inf luence the f inancial performance of PVR 

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Box Office revenue

In the revenue from ticket sales, PVR benefits from the entertainment tax exemption. PVR uses flexible

ticket pricing, marketing initiatives, bulk ticket sales etc to increase the profile of the films played and

thereby increase occupancy. They cashed in on the fact that demand for going to cinema is price inelastic

from Friday through Sunday.

Food and Beverages (concessions) revenue

It is their second largest source of revenue and has a much higher margin than ticket sales. The offerings

are based on geographies. Large foods and beverages are strategically placed to improve traffic flows

around the counters. Combo-deals with preselected assortments and co-branded products that are uniqueto PVR are offered to patrons.

Advertisement revenue

This includes income from on-screen and off-screen advertisements and cinema association activities.

Royalty income

It is the income received from certain of their beverage suppliers for agreeing not to sell directly

competing products. As they incur no direct cost related to royalty income, any changes in their royalty

income will have a larger percentage impact on their PBT than changes in some of other sources of 


Management/franchise fees

A combination of Project Evaluation and Advisory Fee, Basic Revenue Share/ Management Fee and

Incentive Fee constitute the management fees.

Performance in relation to competitors

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The above graph shows the comparison of PVR cinemas with other major competitors on the basis of 

number of screens. Which year ? 

Ansoff  Matrix ansoff can¶rt come at this stage 

Market penetration

PVR has added four new cinemas with 24 screens during the FY09. The expansion plan for FY10

involves setting up of 42 additional screens which will be in line with our strategy to be the major Cinema

Exhibition player in the country. In this regard, PVR has successfully opened up theatres at Chennai,

Ahmedabad, Raipur and Ghaziabad. Also they have plans to start operations at Orion Mall Bangalore,Allahabad and Surat.


PVR has also ventured into the business of film distribution and set up PVR Pictures, a fully-owned

subsidiary of PVR Ltd. PVR Pictures specializes in acquisition and local distribution of films. This is a

strategic business unit aimed at solidifying PVR's exhibition growth and strength. To date, PVR Pictures

has successfully released films produced by US-based production house Miramax and has also has also

signed a 50:50 joint venture with K Sera Sera's production company µFactory' which has exclusive

distribution rights in select cities. They have also come out with a film magazine.  PVR Movies First ,

which will be available in all the multiplexes.

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2.4  SWOT Analysis


y  First mover advantage in the multiplex business in India- PVR was the first to launch a multiplex

in India.

y  Premium positioning- It charged a high price and positioned itself as a premium service. It has

further strengthened its premium position by launching luxury cinema at select locations.

y  Very strong brand equity- PVR has successfully assimilated the Standard operating business and

operational practices of Village Roadshow and set new standards in the quality of exhibition in

India creating a strong brand name for itself.

y  Started the concept of µa complete movie going experience- PVR has innovatively made movie

going experience more than that. µEuropa¶ and µGold Class¶ experience has completely redefined

the movie watching experience.

y  Locational strength- PVR has presence in all major cities and is continuously planning to expand

to smaller towns and cities.

y  Market leader.

y  Updated technology.???? 

y  Plays Hindi, English, Regional & foreign movies.

y  Blend of retail & entertainment.

Weak n


y  High cost perceptions- Many of the audiences feel that some of the services inside do not

command the prices that is charged for them needs clarity 

y  Customer retention. Needs clarity 

y  Parking problems.


y  India has the largest Film Industry.

y  Demographic scenario supports long-term fundamentals- The sector¶s growth is directly related

to the changing demographic profile and rising disposable income of the country.

y  Rising market for Indian film abroad- The overseas market has been fast emerging as a primary

source of revenue for the filmmakers because of the growing interest in the Hindi films amongst

non-resident Indians.

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y  Improvement in the quality and variety of content- Growing corporatization in the film industry

has opened up gateways for creative producers who have good scripts but no source of financing.

Multiplexes are offering greater opportunities for creating content catering to the multiplex


y  Adoption of Digital Technology - Digital solutions in Filmed Entertainment have helped the

 producers & exhibitors to reach relevant audience and increase the number of prints with

comparatively lower additional costs.

y  Integration across value chain and changing business mix creating additional value- Opportunities

exist to vertically integrate across the film industry value chain (production, distribution and

exhibition) and diversify their business mix into other entertainment-related revenue generating

avenues such as food courts, gaming, advertising.


y  Concentration risk- Significant expansion plans across various markets of India may lead to

excess supply and unhealthy competition.

y  Execution delays- Due to delay or failure in handover of properties from real estate developers

due to the slowdown in organized retail and sluggish real estate activity.

y  Piracy

y  Quality of Content- Success in the film exhibition business is heavily dependent on the quality

and the flow of the content released during the year.

y  Competition from other forms of entertainment like theme parks, movie-on-demand on DTH and

cable platforms, IPL, Live Gaming, amongst others, could affect revenues.

y  Conflict between film producers/ distributors with multiplexes

3  Segmentation, Targeting and Positioning

3.1  Segmentation 

Geographic Segmentation need proper justif ication  

PVR initially catered to the tier 1 cities like Mumbai, Bangalore, Hyderabad and Delhi and now hasshifted its focus to the tier 2 cities Faridabad, Gurgaon, Ludhiana, Ghaziabad, Lucknow, Indore,

Aurangabad, Baroda, Chhattisgarh and Latur.

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Demographic Segmentation does not make sense 

PVR mainly focuses on the young, middle and upper class of age between 18 and 40. The prime target is

the young earning group existing in the happening cities.

Consumer Psychographic Segmentation 

PVR Movie Goers are people with high resources and can be classified as ³Experiencers´ who seek 

variety and entertainment. PVR targets on the people who are interested in hanging out, very much

aligned with the technology savvy world that they call as ³ PVR Movie Buffs´.

Consumer Behavioral Segmentation  

PVR tries to exploit the young group of the cities who attends the movies once or twice a month.

Roughly, one-third of the target group falls in the segment.

Characteristics of the Target Segment  needs clarity 


y  Benefits sought - Complete movie-going experience

y  Demand factors - Price, movie, day, time of the day, day of the week, month etc.

y  Product function ± Entertainment

y  Buying criteria? ± Price, ambience, placement, quality service, premium positioning, status


y  Risks perceived ± Risk of being overcharged, risk of being in an emergency like fire at the



y  Mode of buying - Online /Telebooking / In person

y  Length of the process - Simple and prompt

y  Influence of marketing mix elements

y  Product fit

y  Amount ready to be spent

3.2  Targeting

PVR has premium pricing and they target mainly SEC A and SEC B. PVR witnessed tremendous success

Europa Lounge in Delhi. PVR Cinemas has also recently introduced the concept of luxury viewing to

Formatted: Font: Highlight 

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Bangalore. Patrons can also enjoy star like treatment at the exclusive Gold Class lounge which provides

an excellent pre cinema experience with scrumptious food and beverages.

3.3  Positioning

PVR¶s much planned premium positioning affects the customers perceptual positioning. Therefore, they

decided on their marketing strategy and pricing, keeping the target market in mind. Also, since some of 

the other movie theatres (which are not multiplexes) are still offering movies at rates as low as Rs 35, it is

the task of its marketer to ensure that PVR comes across as a superior brand in terms of cinema viewing

as well as the experience.

4  Marketing Mix

4.1  Product need to discuss levels of product, product mix« 

PVR Cinemas offers different classes: Classic, Gold, Europa, Talkies and Premiere. PVR has augmented

its product offerings.PVR has brought to its customers the experience of luxury cinema. There are special

arrangements for bulk bookings (of twenty or more tickets) done by corporate, e-booking and planning

 birthday/kitty parties at PVR. To keep its customers hooked on to movies and to PVR, it has also come

out with an online newsletter called µPVR Wire¶and a magazine called ³Movies First´. They have also

taken out the unique concept of movie vouchers which people can use as gifts.

4.2  Price

As PVR aimed at providing luxury along with movie-watching, they charged at a higher rate than the

other movie theatres. Prices that had originally started from Rs 125 (for evening shows) and Rs 90 (for 

morning shows and weekday plans) have increased to a high of Rs 200 and the lowest is Rs 70. The high

 pricing however has not led to any change in the footfalls that PVR gets. PVR Talkies¶ prices vary from

Rs 45 to Rs 150 for different slabs of consumers. The pricing at PVR Europa is Rs 160 and a Gold Class

ticket is charged at Rs. 750. The ticket rate is low during weekdays than at weekends, holidays and

evening shows. So, they follow a time pricing strategy. They follow the image pricing strategy as they

have vast different rates for the Premium and the Gold classes as they both offers similar services. As

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PVR was first of its kind, the positive differentiation that it created in the market helped to capture the

market share and the mind share and they continued with the perceived value pricing.

4.3  Distribution 

The issue of location here plays a very important role, as all PVR Cinema Halls are stationed at good

locations in the city. PVRs usually open at eventful yet untapped locations, followed by which other retail

chains get opened around it as well. PVR does not have any other channel of distribution, as their service

is sold solely at their chains. They do not follow any franchisee outlets, even though they indulge in ticket

sales online and via tele-booking. The only intermediary involved for procuring movies are Indian as well

as international movie distributors, by way of whom they acquire the movies.

Distribution of Movies

The company operates a film distribution and production business through PVR Pictures, a subsidiary of 

the company. PVR Ltd holds 60% shareholding in the subsidiary with the balance 40% stake held by JP

Morgan Mauritius Holding Ltd and ICICI Venture in equal proportion (20% each). The movies co-

 produced by PVR Pictures include "Taare Zameen Par" and "Jaane Tu Ya Jaane Na". By virtue of its

strong brand equity and partnerships with major independent Hollywood studios like Miramax, Newline

Cinemas etc. that are not represented in India through their own offices, PVR has managed to procure and

distribute titles in the country

4.4  Promotion 

PVR as a brand indulges into print advertisements on every Friday giving out the latest movie schedules.

Any new developments are communicated to the audience via press releases. Apart from that, they

usually have contests pertaining to latest festivals like Valentine¶s Day, New Years Eve, Oscar Movies

Week etc. PVR also has a host of online promotional contests associated with movies. They are also in

collaboration with cellular services like Airtel and have SMS-and-win contests and give out free tickets to

the winners. Also, PVR attracts a lot of commercial shooting / media coverage via programmes etc which

 promotes it as a brand in a big way. Organizing Star Events on Premiers of movies with leading movie

stars and fun events helps PVR relate better with its target audience. The whole PVR banner and its

exterior environment including movie hoardings, banners etc help promote the concept of movie viewing

as well as PVR as a strong and successful brand.

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Picture 1 PVR Promotion Campaign (ref er Annexure)

5  Plan for the next year

Along with the Hollywood and Hindi movies, PVR should equally focus on the regional movies

especially in Mumbai and Delhi as regional movies are sometimes creatively superior to Hindi

movies and thus can attract more people from multilingual backgrounds. PVR can start a cinema

club and bring critically acclaimed movies especially for the people in the club. This club then

can be further promoted in various social networking sites so as to increase the membership

among true film connoisseurs. What is the regional movie in delhi????? 


PVR should continue with the existing pricing policies with high prices in metro cities and

comparatively lower prices in Tier two cities. In the larger centres where ticket prices are higher,

even a 30-35 per cent occupancy results in the multiplex making up the money paid for film

distribution rights. So, once the profits have started pouring, PVR has to aggressively employ

differential pricing on weekdays. Such a strategy should be employed after one-two weeks after 

the movie is released. This can help to increase the viewership among the teenagers.

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Further, it can employ captive pricing in F&B. eg. It can sell items like  samosa at lesser 

 price. This would increase the demand for cold drinks which should be priced at considerably

higher rates.


PVR has to continue with its brand-building exercises so as to achieve good customer base. PVR 

would have loyalty programmes, gift cards and pre-paid cards which could be used for buying

tickets or food in the multiplex. On some of the peak occasions, PVR can surprise its customers

with attractive offers on the F&B items. PVR can employ CRM technology to come up with

attractive online ticket booking for movies, attractive sales promotion schemes, home delivery of 

tickets, SMS booking, toll-free calling services etc. Also the movie that PVR would produce

should help to create brand image as cult movie production company. Thus the script should be

given maximum importance rather than star cast of the movie.

PVR can start with a programme where in first 3 days viewers can write the review in not

more than 150 words on a special wall planted there. This would give a feeling of empowerment

to the customers. Further PVR can employ the technology of geo-fencing, where in the loyal

customers will get SMS if they are near the vicinity of the multiplex.

The PR department should make the people aware of the CSR activities that PVR is

undertaking. PVR can also display some of the photographs of its CSR initiatives in the

multiplex lobby. This would help to create good image for company.

PVR can conduct a short film making among the college students and these movies

should be exclusively shown in PVR theatres just before the main cinema is to start. Such a

strategy can help to attract student community.

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6  Conclusion 

PVR is one of the major players in the multiplex business in India. However given the increasing

competition in the multiplex segment the company is coming out with huge capacity expansion.

Moreover, PVR is going to bank on tier two cities through its no frills arm PVR talkies. By the end of 

FY10, they plan to come up with 43 more screens and approximately 10750 seats. The revenues of the

company have grown at a CAGR from 50.7% from 2005 to 2009.

Further, PVR has also started new ventures like bowling centers which has full potential of their 

mainstream revenues in the coming days.

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Ref erences

1.  (2005, June 15). Retrieved February 22, 2010, from 

2.  About Wave. (n.d.). Retrieved February 22, 2010, from

3.  Agencies. (2010, Februray 15). FE Home- Companies - Story. Retrieved Februrary 22, Februray,



4.  Cinema Chain: DT. (n.d.). Retrieved February 22, 2010, from

5.  Das, D. (2009, December 03). Brand Line Retailing. Retrieved Februray 17, 2010, from

6.  Kotler, P., Keller, K. L., Koshy, A., & Jha, M. (2009). Marketing Management. Pearson


7.  Mahesh, P. (2006, December 20). Markets & Funds / Cover Stories . Retrieved February 20,

2010, from

8.  PVR HOME. (n.d.). Retrieved February 2010, from PVR Cinemas Website:

9.  PVR:About Us. (2010, February 22). Retrieved February 22, 2010, from PVR Cinemas Website:

10.  Agarwal, Roma & Dalal, Kunal (October 22, 2009). PVR Limited report and Indian Media &

Entertainment industry review. Retrieved February 4, 2010, from


11. PVR Cinemas (2010) Report on the performance for the Quarter ended June 30, 2009. Retrieved

February 22, 2010, from the PVR Cinemas Web site

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Picture 1

PVR Cinemas had come up with a novel scheme to get parents to buy movie tickets. Any student

with more than 80% marks as proved by her report card (bring a photocopy) would get a free

weekday movie ticket between March 4 and April 15, 2009. The scheme was valid only till class 8

and not for Gold class.

Two corporate print campaigns, which are designed to suit the specific communication needs of 

the three offerings, are in the pipeline. Print advertising, which is crucial on a day to day basis, is the

 primary medium of communication. Newspapers are considered for listings, which bring business.

Advertising in magazines is essential for building the image of the brand in the minds of the targetconsumers. Television is being looked at in a big way, but there is still time to go for a corporate


PVR has set aside Rs 9-10 crore for its advertising and marketing activities for the fiscal. Saatchi

& Saatchi is its creative agency, and Initiative handles i ts media duties.

PVR plans to put up digitised banners and branding in the premises, rather than traditional printed

 banners. At PVR Premier, consumers will be given the option of downloading ringtones, pictures,

movie schedules, etc., free of cost. With a footfall of 20 million, PVR is looking forward to various

sponsorships and tie-ups. Very recently, it was an on-ground sponsor for the Twenty20 Cup. A

number of advertisers ± big brands such as Airtel, Maruti and Hero Honda, to name a few ± have

entered into various on-screen, off-screen and other promotional tieups with PVR. Mobile advertising

is cost-effective besides giving advertisers a targeted access to consumers 

The report is basic, few unanswered questions

The objectives are shallow

4p¶s need more clarity and information

Descent attempt by the team

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Criterion Points

Executive Summary 5/10The Objective 4/10

Situation Analysis (50 points)

Industry Analysis 6/10

Company Analysis 6/10

Competitor Analysis 5/10SWOT Analysis 14/20

Market Segmentation (10 points) 5/10

Marketing Mix (40 points)Product 5/10

Price 6/10

Distribution (Place) 5/10

Promotion 5/10

Plan for the next 1 year 20/40Conclusion & Learning 9/15

Quality of the presentation 17/25Appearance

Typographical, spelling and grammar 

Structure, language and convention


Punctuality in submission

GRAND TOTAL 112/200 

15% of the marks= 8/15 

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