1-3 chapters
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INTRODUCTION
MARKETING CONCEPT
Marketing is needed an ancient art; it has been practiced in one form or the
other since the days of Adam and Eve. Its emergence in the market management
discipline However is of relatively recent orgin. And within this relatively short
period, it has gained a Great deal of importance .In fact, today most
management thinkers and practitioners all ver the world regard marketing as
the most important of all management f!nction in any "!siness.
Marketing is a comprehensive term and it incl!des all reso!rces and a set
ofActivities necessary to direct and facilitate the flow of goods and services
from prod!cer to #ons!mer in the process of distrib!tion.
There are twin activities,which are most significant in mareting
$%Matching the prod!ct or service with demand, i.e. c!stomer needs and desires
or target Market.
&%'he transfer of ownership and possession at every stage in the flow of goods
from the (rimary prod!cer to the !ltimate cons!mer.
Definition of maret!"
'he father of marketing philip kotler defines a market th!s)*A market consists
of all (otential c!stomers sharing partic!lar need or want who might be able to
Engage in the e+change process to satisfy that need or want*
Definition of Mareting
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Marketing in partic!lar is defined as a social and managerial process by which
Individ!als and gro!ps obtain what they want thro!gh by creating offering
and e+changing (rod!cts of val!e with others.
The Evo#$tion of Mareting
'he pre ind!strial revol!tion world was characteried by barter system and then
the Agric!lt!ral c!m handicraft economy..'here was no elaborate distrib!tion
system,the need And habits of the people and the prevalling technology did not
demand s!ch a system.
The stage of mone% econom%
'he ne+t stage in the evol!tion of marketing was that of money economy. 'he
#hange was limited to the replacement of the barter system by the moneysystem, pricing "ecoming the mechanism of the e+change process.
The stage of in&$stria# revo#$tion
'he ind!strial revol!tion was the ne+t stage. -ar reaching changes took place in
this tage. It introd!ced new prod!cts new systems of man!fact!ring ,new
modes of 'ransportation and comm!nication bro!ght abo!t a variety of low
priced goods in ab!ndance, 'his stage also generated income revol!tion.
The e#ements of the mareting mi' are !
• (rod!ct mi+
•
(rice mi+• (romotion mi+
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• /istrib!tion mi+
ince the topic for the st!dy is distrib!tion late !s have a detailed st!dy what
distrib!tion is and how it works.
MARKETING MANAGMENT
A s(ecia# note on Distri)$tion
#ompanies are increasingly taking a val!e network view of their b!siness.
Instead hey are e+amining the whole s!pply chain that links raw material,
component and man!fact!red goods and shows they move towards the final
cons!mer. In today0s economy, most prod!cer do not sell their goods directly to
the final !ser. "etween them and the final !ser stand a host of marketing
intermediaries performing a variety of f!nction and bearing a variety of names.
ome intermediaries s!ch as wholesalers b!y take and resell the merchandise
known as the merchant middleman . others s!ch as brokers, man!fact!rer0s
representative and sales agent search as c!stomer and may negotiate on behalf
of prod!cers b!t do not take title to the goods known as agents and there are
others who assist in the performance of distrib!tion b!t neither take title to
goods nor negotiate or sell are called as facilitators.
*+AT I A DITRI-UTION C+ANNE. /
'he marketing system of any co!ntry is made !p of a vast manifestation of the
organiations and individ!als linked by information, prod!cts, negotiation,
money and people of these , instit!tions and individ!als act as pipeline thatconnects the makers
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f prod!cts with people and organiations that cons!mes prod!ct .'his
channel in the marketing system seeks to satisfy the needs and want of target
and !sers and ob1ectives of the channel participants.
(hilip kotler defines distrib!tion channel as 2a set of independent organiations
involved in the process of making prod!ct, commodity or service available for
!se or cons!mption.*
T+E RO.E O0 DITRI-UTION C+ANNE.ignificance of the channels of distrib!tion can be compared to the pipeline
system or the ro!tes that connect two points. 'hey are lifelines in the palm of
marketing system.
Management e+pert peter /r!cker e+plains ,*channels are primary and
prod!cts are secondary and deserve m!ch more attention and st!dy than they
!s!ally receive.It is the trade channel that creates 2val!e added* to allprod!cts
and services. /istrib!tion channel decisions are among the most critical
decisions facing management.
It represents a significant corporate commitment to large n!mber of
independent companies whose b!siness is distrib!tion and to the partic!lar
market they serve. (recisely, it is less e+pensive and complicated to deal
indirectly than directlywith the final !sers
'herefore management m!st choose channels with an eye on tomorrow0s likely
selling environment as well as today0s.
DITRI-UTION C+ANNE. 0UNCTION
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A distrib!tion channel performs the work of moving goods from prod!cers to
cons!mers. It overcomes the time ,place and possession gaps that separate
goods and services from those who need or want them .
Members of the distrib!tion channel perform a n!mber of key f!nction)
• 'hey gather information abo!t potential and c!rrent c!stomers,
competition and other actors and forces in the marketing environment.
• 'hey develop and disseminate pers!asive comm!nication to stim!late
p!rchasing and also place orders with man!fact!rers.
• 'hey ass!me risks connected with carrying o!t channel work.
• 'hey reach agreements on price and other terms so that transfer of
ownership or possession can be affected.
• 'hey provide for the s!ccessive storage and movement of physical
prod!cts.
•
/istrib!tion channel solves the geographical distance.
• /istrib!tion channel helps to forecast the demand.
• /istrib!tion channel helps in marketing research.
• /istrib!tion channel ens!res the s!ccess of other marketing efforts.
C.AI0ICATION O0 DITRI-UTION C+ANNE.
'he distrib!tion channels are classified as conventional and non3conventional;
the following diagram clearly e+plains this)
#HA44E5 - /I'6I"7'I4
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#48E4'I4A5 443
#48E4'I4A5
/I6E#' I43/I6E#' 8E6'I#A5
H6I94'A5
A/MI4I'E6E/ #4'6A#'7A5
#6(6A'E
.eve#s of &istri)$tion channe#s
• A 1ero #eve# channe# consists of a man!fact!re selling directly to the final
cons!mer.
• A one #eve# channe# contains one selling intermediary s!ch as retailer.
• A two #eve# channe# contains two intermediaries like the wholesaler and the
retailer.• A three #eve# channe# contains three intermediaries s!ch as wholesalers,
1obbers and retailers.
C+ANNE. C+OICE
CON2ENTIONA.
A3 MANU0ACTURER"CONUMER
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'his ero level channel is the shortest and simplest of all channels available
to the company. It is the direct channel in which a man!fact!rer witho!t any
intermediary participating in the pathway transfers the prod!ct directly to the
cons!mers.
-3 MANU0ACTURER"RETAI.ER"CONUMER
'his one level channels consists of one type of intermediary called retailer,
thro!gh whom a man!fact!rer sells goods to the cons!mer .In this channel the
man!fact!rer moves away from cons!mer by one step and as s!ch the
directness of contact is proportionally red!ced.
C3 MANU0ACTURER"*+O.EA.ER"RETAI.ER"CONUMER
'his channel consists of two types of intermediaries wholesaler and retailer
thro!gh whom a man!fact!rer channels his prod!ct to the cons!mer, here again
the man!fact!rer moves away from the !ltimate cons!mer owning to the
appearance of wholesaler between him and retailer. 'his is the most traditionalchannel being followed in India by many companies.
D3MANU0ACTURER"*+O.EA.ER"EMI"*+O.EA.ER
RETAI.ER"CONUMER
It is an indirect, and the largest channels of distrib!tion consisting of
three intermediaries wholesaler , semi3wholesaler and retailer respectively. Here
the man!fact!rer stands f!rther away from the !ltimate cons!mer owing to the
appearance of the thee intermediaries.
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NON CON2ENTIONA.!
A3 2ERTICA. C+ANNE.
8ertical channels are those , which are professionally managed and
centrally programmed networks that are pre engineered to achieve
operating economies and ma+im!m market impact. 'hese vertical
channels are of three types namelya4 A&ministere& one in which coordination of marketing activities is
achieved thro!gh !se of programmes developed by one or limited
n!mber of firms)4 Contract$a# is one in which the independent channel components
integrate their program on contract!al lines to attain the economies
and enhance the market impact.c4 Cor(orate is one in which the channels components are owned and
operated by the same organiation.
-3 +ORI5ONTA. C+ANNE.
Horiontal channel is the one in which two or more companies 1oin
their hands to e+ploit a marketing opport!nity or opport!nities, either by
themselves or by creating an independent !nit.
NECEIT6 AND UE O0 MARKETING
INTERMEDIARIE
:hy is the prod!cer willing to delegate some of the selling 1ob to
intermediaries
'he delegation means relin<!ishing some control over how and whom the
prod!cts are sold . 'he prod!cer appears to be placing the firms destiny in the
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hands of the intermediaries . 'he following are the advantages a prod!cer gains
by employing intermediaries in the midst.
Many prod!cers lack the financial reso!rces to carry o!t direct marketing,
which wo!ld re<!ire many prod!cers to become middleman for the
complementary prod!cts of other prod!cts in order to achive mass
distrib!tion economies.(rod!cers who can afford to establish their own channels can often earn
greater ret!rn by increasing their investment in their main b!siness.If a company earns &= percent ret!rn on man!fact!ring and foresees only
$= percent ret!rn on retailing, it will not want to !ndertake its own
retailing b!siness.
0ACTOR IN0.UENCING T+E C+OICE O0 C+ANNE.
'here are myriad of factors both s!b1ective and ob1ective varying from prod!ct
to prod!ct which give rise to channel choices.
-ollowing is the threadbare analysis, each having a set of factors.
A3 MARKET 0ACTOR
73 #ons!mer a% 4!mber
b% 5ocationc% (!rchase pattern
83 E+isting market str!ct!re93 #ompetitors channels:3 Intermediaries
-3 PRODUCT 0ACTOR
73(hysical nat!re83 Market position
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93 cons!mer prod!ct:3 p!rchase nat!re
C3 0INANCIA. 0ACTOR
73 ales vol!me83 6et!rn on investment
D3 INTUTIONA. 0ACTOR
73-inancial ability of channel members83 (romotional ability of channel members
C+ANNE. DEIGN DECIION
/esigning a channel system calls for analying c!stomer needs establishing
channel ob1ectives, identifying the ma1or alternative and eval!ating them
Designing a channe# s%stem invo#ves eight ste(s!
73ANA.6ING T+E CUTOMER NEED
Here the marketer m!st !nderstand the service o!tp!t levels desired by target
c!stomers. #hannels prod!ce five service o!tp!ts they are)
a% .ot si1e! 'he n!mber of !nits the channel permits a typical c!stomer to
p!rchase on one occasion. b% *aiting time! 'he average time c!stomer of that channel wait for the
receipt of goods, they generally prefer fast delivery channels.c% (atia# convenience! 'he degree to which the marketing channel makes
it easy for the c!stomers to p!rchase prod!ct.d% Pro&$ct variet%! 'he assortment breadth provided by the marketing
channel, 4ormally c!stomers prefer a greater assortment.e4 ervice )ac$(! 'he add on services provided by the channel s!ch as
>credit, delivery , installation% more the services back!p provided by the
channel, keep the c!stomers increasing. 'he marketing channel designer m!st know the service o!tp!ts desired by the target c!stomer.
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83 NUM-ER O0 INTERMEDIARIE
Companies have to decide on the n!mber of middleman to !se at each channel
level. 'hree strategies are available)
a3 E'c#$sive &istri)$tion! It means severely limiting to the n!mber of
intermediaries and !sed when the prod!cer wants to maintain control over
service level and o!tp!ts offered by the resellers and often involves
e+cl!sive dealing arrangement, here the prod!cer hopes to obtain more
dedicated and knowledgeable selling.
)3 Intensive &istri)$tion! Its consists of the man!fact!rers placing goods
or services in as many as o!tlets as possible, man!fact!rers !se this to
increase coverage and sales.
c3 se#ective &istri)$tion! Involves the !se of more than a few b!t less than
a few b!t less than all of the intermediaries who are willing to carry a partic!lar prod!ct .'he prod!cer m!st also determine the rights and
responsibilities of participating channel members ? . 'he main element in
the 2trade relations mi+* are price policies, conditions of sale territorial
rights and specific services to be performed by each party. M!t!al
services and responsibilities m!st be caref!lly spelled o!t especially in
franchised and e+cl!sive agency channels.
93 E2A.UATE MA;OR A.TERNATI2E
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Each channel alternatives needs to be eval!ated against economic control and
adaptive criteria. Each channel alternative will proc!re a different level of
sales and costs and the ne+t step is to estimate the costs of selling different
vol!mes thro!gh each channel. #hannel eval!ation m!st be broadened to
incl!de control iss!es.
'o develop a channel , members m!st make some degree of commitment to
each other for a specified period of time. In rapidly changing volatile or
!ncertain prod!cts market the prod!cer needs channel str!ct!res and policies
that provide high adaptability.
<3 TRAINING C+ANNE. MEM-ER
#ompanies need to plan and implement training programs for their
intermediaries and keep them !pdated with the latest developments.
=3 MOTI2ATING C+ANNE. MEM-ER
'he company sho!ld provide training programs, market research programs , andother capability b!ilding programs to improve intermediaries performance. 'he
company m!st constantly comm!nicates its view that the intermediaries are
partners in a 1oint effort to satisfy end !sers of the prod!ct.
>3 E2A.UATING C+ANNE. MEM-ER
(rod!cers m!st periodically eval!ate intermediaries performance against
s!ch standards as sales @<!ota attainment. Average inventory levels, c!stomer
delivery time, treatment of lost and damaged goods and cooperation in
promotional and training programs.
. MODI06ING C+ANNE. ARRANGEMENT
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A prod!cer m!st periodically review and modify its channel arrangements.
Modification becomes necessary when the distrib!tion channel is not working
as planned , cons!mers b!ying patterns change the market e+pands new
competition arises, innovative distrib!tion channels emerges, and the prod!ct
moves into later stages in the prod!ct life cycle.
'he most diffic!lt decision involves revising the overall channel strategy,
distrib!tion channels clearly become o!tmoded and a gap arises between the
e+isting distrib!tion systems and the ideal system that wo!ld satisfy target
cons!mers0 needs and desires.
REEARC+ DEIGN
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TATEMENT O0 T+E PRO-.EM
'he p!rpose of this st!dy is to known the effectiveness of distrib!tion channel
of 4avneet (!blication pvt.ltd. 'o s!ggest meas!res to improve the
effectiveness of distrib!tion channel of 4avneet (!blication pvt. ltd.
O-;ECTI2E O0 T+E TUD6
'he st!dy is cond!cted to find o!t)
• 'o identify the effectiveness of the distrib!tion channel of 4avneet
(!blication pvt.ltd.
• 'o s!ggest meas!res to improve company0s distrib!tion channel and set
new markets.
• #!stomer awareness abo!t 4avneet (!blication pvt. 5td.
• 'o !nderstand and improve the distrib!tion strategy in accordance with
competitors strategy.
COPE O0 TUD6
'he scope of the st!dy is limited to dealers, contractors in an aro!nd
Malleshwaram "angalore.
REEARC+ MET+ODO.OG6
'he research is e+ploratory research. 'he research methodology is primarily
based <!estionnaire prepared to ens!re ma+im!m coverage for the research
ob1ective. 'he <!estionnaire will be prepared to ens!re that the s!fficient data,
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information and analysis will be available to s!pport the concl!sion and
recommendations.
'wo kinds of data were !sed in this st!dy)
• (rimary /ata.
• econdary /ata.
PRIMAR6 DATA
'he primary data for this st!dy was collected !sing the !ndisting!ished
B!estionnaire method. 'he <!estionnaire method was applied to collect the data
from the Manager. 'his tools was applied to get the cons!mer view abo!t the
ind!stry . 'he <!estionnaire concentrated on comm!nication accepts of
knowledge of the manager, their views, opinion, tastes, and s!ggestions which
are !sef!l to improve the efficiency and broadening the company0s e+isting
market share.
ECONDAR6 DATA
'he secondary data re<!ired for the st!dy was collected from the company
broch!re, 1o!rnals, books, magaines websites related to the s!b1ect of the
st!dy. 4!mber of vivid talks and disc!ssions had cond!cted with the company
officials to get the desired res!lts.
REEARC+ APPROAC+ ? DEIGN
All research approaches can be classified into one of the three general
cetegories of research)
• E+ploratory research
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AMP.ING DEIGN
ample is a s!bset of the total pop!lation selected in a deliberate manner to
pro1ect the characteristics of the entire pop!lation.
ample sie) C=
TARGET POPU.ATION
I, considered a opinion of corporate and b!siness people , sales e+ec!tives , to
improve the val!e of st!dy.
P.AN O0 ANA.6I
'he data was collected !sing a <!estionnaire and were properly tab!lated,
analyed and interpreted.
.IMITATION O0 T+E TUD6
'he statistical techni<!e !sed in the st!dy may have certain limitations
therefore all those limitation will apply to the st!dy.
• 'he sample sie of <!estionnaire method was limited to D=
respondents only.
• 'he company co!ld not reveal to !s all the information some need to
be kept confidential.
COMPAN6 PRO0I.E
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'he term publishing means, in the broadest sense, making something p!blicly
known. Historically, it came to refer to the iss!ing of printed materials, s!ch as
books, magaines, periodicals, and the like; it now also encompasses iss!ing
s!ch materials in an electronic form. 'here is, however, great latit!de of
meaning, beca!se p!blishing has never emerged, and cannot emerge, as a
profession completely separate from printing on the one hand and the retailing
of printed matter on the other.
Ear#% +istor%
'he practice of making e+tra copies of man!scripts goes back to ancient times;
in 6ome there were booksellers3Horace mentions the osii, who were
apparently brothers3and the copying of books by trained slaves reached
considerable proportions. :ith the introd!ction of printing into E!rope in the
middle of the $Dth cent.
The Emergence of P$)#ishing +o$ses
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'he first important p!blishing ho!se >$DC3$F$% was that of the Elevir family
in Holland >see Elevir, 5o!is%. 'he Elevirs were b!sinessmen rather than
scholars, and the b!siness of bookselling grew as literacy increased.
#onc!rrently, printing, p!blishing, and bookselling spread learning across the
:est. 6eligio!s controversy bred polemics, and arg!ments printed in
broadsides, pamphlets, and books were handed o!t ealo!sly and bo!ght
eagerly by partisans. An interest in knowing the f!t!re also increased the
amo!nt of literat!re iss!ed by bookseller3p!blishers, and almanacs and the like
were iss!ed for the wider p!blic.
:ith the steadily broadening mass of readers, great p!blishing ho!ses slowly
came into being; many were well established by the late $th cent. 5eipig had
become a printing center in the $Dth cent. and retained its eminence, along with
M!nich; most of the larger German cities had flo!rishing p!blishing concerns
by the end of the $Fth cent. Modern E!ropean cities with long traditions of
p!blishing are 8ienna, -lorence, Milan, 9rich, (aris, 5ondon, and Edinb!rgh.
In the 7nited tates, "oston, (hiladelphia, and especially 4ew ork #ity took the lead.
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PU-.I+ING .I0EC6C.E
The In&ian )oo ($)#ishing in&$str%
'he Indian book p!blishing ind!stry is very attractive and has a high growth
potential, b!t is operating in an e+tremely competitive market, with over $,===
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Exhibit 1 "ook (!blishing Ind!stry Market
Maret Attractiveness
verall market attractiveness & of the Indian book p!blishing ind!stry is very
high. 'his is d!e to strong market growth, s!pportive government policies, low
s!pplier and b!yer power, low rivalry and high ind!stry margins. However, the
ind!stry faces threats from new entrants owing to low barriers to entry. 'he rise
of s!bstit!tes like e3books and online ed!cation will be a serio!s threat in the
years to come. Any player aiming to gain a s!stainable competitive advantage in
the ind!stry nee&s to create a strong )ran& to increase barriers to entry and at
the same time nee&s to form$#ate strategies to com)at the threat of
s$)stit$tes3
:e now e+plore the vario!s dynamics and characteristics of the book p!blishing
ind!stry in India.
Ke% Insights a)o$t the -oo P$)#ishing In&$str%
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'wo stark aspects of the book p!blishing ind!stry are as follows)
P$## &riven: In a book p!blishing ind!stry, it is the cons!mer who demands the
books for his or her needs. Marketers cannot p!sh a c!stomer to read a book;
the cons!mer decides what heshe will read. wing to this, the ind!stry is
highly price inelastic and provides a good margin for every player in the val!e
chain. 'his f!rther ens!res that there is eno!gh room for the new entrants and
no price competition.
2a#$e"a&&ition )% P$)#ishers: A look at where the money flows in a val!e
chain, as seen in E+hibit & and E+hibit C, shows that over DDJ of the val!e is
added by the p!blisher, b!t only $&.DJ of it is capt!red as profits. 'he
ma+im!m profits are reaped by the retailers who, in most cases, bear the risk of
sale. 'h!s, the p!blishers r!n a stable, low3risk b!siness.
Exhibit 2 8al!e #hain of Indian "ook (!blishing Ind!stry
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Exhibit 3 8al!e plit in the 8al!e chain
Maret Driving 0orces
'hree key forces drive the growth of book p!blishing ind!stry in India)
73+igh Attractiveness! High and s!stainable margins for all the players in the
val!e chain ens!res that each player gets his own rightf!l share in the val!e
chain, prompting and motivating them to stay and grow in the val!e chain.
83+igh Potentia#! :ith the literacy rate going !p, along with the growth of the
economy and the increase in spending power, the demand for books is also on
the rise, thereby res!lting in high growth for the ind!stry too. 'here is a h!ge
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!ntapped potential in India beca!se these factors are only bo!nd to become
more favorable in the f!t!re, and drive the growth of the ind!stry.
93Protection from economic shocs! "ooks are commodities for the ed!cation
ind!stry. ince the ed!cation ind!stry is protected from any economic shocks
>recessionsslowdown etc%, the book p!blishing ind!stry also gets an a!tomatic
shield against s!ch shocks.
Having !nderstood the str!ct!re of the book p!blishing ind!stry, we now
analye the c!rrent position of 4avneet (!blication vis3N3vis the ind!stry.
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Mission!"
• Anticipate the client0s re<!irements and to e+ceed their e+pectations.
• Improve o!r standard of prod!ction by employing innovative
prod!ction
'echni<!es.
• Always provide <!ality service to o!r clients for a long term
relationship.
-UINE
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-OOK
-or over K decades, 4avneet has been consistently prod!cing high <!ality and
dependable Indian school c!rric!l!m books and mass3market children books
that have helped millions of st!dents across India.
4avneet today has p!blished till date more than K,D== titles in several Indian
and International lang!ages.
Alphabet #hildren "ook -lying A"# GregQs Grammar
I#E model 'est
(apers
More -!n
#rayons6ainbow A"# 8al!e Ed!cation