Strategy paper-I

MARKTING III
Course Instructor: Prof. Jayasimha K.R

Submitted on 4th February 2013

Section C Group: Kings (industry Group-II) Erika Kerketta (2013PGP136) Goutam Kumar (2013PGP147) Kumar Vikash (2013PGP195) Shubham Nishad (2013PGP385) Sudipendra Nath Roy (2013FPM013)

Content:

Current Scenario:
Round:1 1. 2. 3. Brand Kite Kiwi Kore Target Segment Pragmatists Hermits Bluebloods Revised Market share 13% 13% 17%

Marketing perspective

Since bluebloods was growing at a much faster rate, we thought to focus on this segment so as to tap the new customers. Our product Kore was focussed towards this segment, so we increased Trade shows and Events advertising to Rs. 500,000. Also this segment had highest profit margin since Kore was our premium product. We reduced advertisement through Print since its potential reach was poor on bluebloods. This segment focussed least on price, so we increased the margin so as to generate more revenue after increasing portability according to bluebloods. However, our net sales of Kore decreased to Rs. 26,812,000 from Rs. 34,034,000 because of our overall less resource allocation to promotion of Kore. Also, we increased portability to only 7.1 whereas bluebloods expected portability went up to 7.9, resulting in our decreased sales. We also maintained status quo in Kite and Kiwi. For Kiwi and Kite, we increased advertising cost through print, radio and television since these channels can more effectively reach Hermits which is the target segment of Kiwi. For Kiwi and Kite, we gave higher consumer promotions than for Kore since Pragmatists and Hermits are more price sensitive.

Future Plans for marketing:

We will focus more on trade promotions for Kore since trade promotions may increase the visibility of this premium segment. Our awareness in all 3 segments decreased, thus we will increase our marketing budget, and try to increase the visibility of our products. As our strategy to target the premium segment worked to quite a good extent, thus giving us a market share of 17 % now, which we can build on further in the coming sessions.

 We plan to enter into a new product taking into consideration our current focus that id towards the bluebloods, thus we will be focussing into the product, which has target segment as bluebloods and also techgeeks segment is one of our future target segment as both the segments share a lot of similarities in terms of perception and needs, which we can further build on, by modifying our products in accordance with our target segment.
Production analysis

We decided to focus on KORE because of the following reasons: In case of bluebloods, the projected growth rate for next year is 5.1% which is more as compared to other segments (Pragmatist and Hermits), so it was profitable if we focus on this segment. Also total industry demand in this segment is 3740 units and actual industry sales that were happening were 2408 units which were 64.39% of total industry demand. So it is evident that there is scope of growth in this segment. The product KORE was tempting in case of margin which was 54% which was high as compared to other products. So we decided to focus on the production of this product. The capacity utilization in terms of this product was also lower in comparison to the other two products which led us to focus on this segment more as this would lead us to increase the production without investing further in the production in the current scenario.

Production planning for KORE

600 528 500 400 400 363 Desired production sales 200 478 528

300

100 0 0 period 0 period 1 period 2

As evident that, even after we targeted KORE as our products for the bluebloods, we now think that we missed out in the promotions and the product designs. As our product lacked in the criteria of age, due to which we were not matching their needs in the perpetual map, which we will try to take care further in our next rounds of simulation.

Future: Also the segment, Bluebloods is similar to Wanderers, which also has a high growth rate, less sensitivity to price, features and style. So, if we focus on this segment (Bluebloods), so in future, it will be helpful for us to launch our product in that segment too. Also, it will help us in installing capacity for Wanderers segment. From similarity, we can also guess that, we may expect to earn similar profit margins from Wanderers segment, further adding to our profitability.

As we see that we were lacking in terms of portability too for the bluebloods segment, so we will try and make sure from the next rounds that, we would be more focussed in our strategy, as we tried to maintain the status quo, in terms of the other products which might have diluted our image in the market for the bluebloods, and thus we lost on sales, and also perception, even had some HR issues. Future scope for improvement in the following areas: HR policies and recruitment decisions. Product innovation and investment in R&D. Margins can be improved by better selection in procurement. New products, and better focussed strategy in terms of target segment.