Case Analysis

Business stuggling to keep afloat with rising costs

Y-o-Y sales in decline and company making losses
Family business - prestige and pride associated with running the businessrun by the 2nd
Production capacity being underutlized
Offer from a competitor - can you sub manufacture for us?
Offer is not competitive since with the given conversion rate, MKG will still make losses
However, not many options left for MKG to decide between

Decision
Go with the current proposal..this will be a tactical solution to survive in the business
With the lowering of operational overheads, MKG needs to look at increasing its market share
One way to do that would be to keep the current margins intact, but lower the prices

essrun by the 2nd generation

still make losses

e in the business
asing its market share
wer the prices

Optimization problem
Solve using logic rather than using any other method or trick
Need to determine the equation that needs to be maximized

Strengths of the company

1 Growwing market share in sweets segment; minor issues in confectionery
2 Company able to maintain to maintain long term relationship
3 In house corn capacity
4 Average utilisation in the range of 50-75%

Threats
1 Inability to pass fluctuations in input costs to customers
2 Most sales in bulk and direct distribution
3 Mostly unorganised players manufacturing glucose in the tapoica segment
4 Utilsaion levels in South - 50%; West 26.5%; North - 45%
5 Heavy dependence on the confectionery division

Facts - Industry
1 All units (organised or unorganised) produced glucose from internal RM
2 Total market capacity 277k tonnes per annum
3 East zone no production units
4 RM prices of tapioca inversely related to Corn
5 Most sales in bulk and direct distribution
6 Mostly unorganised players manufacturing glucose in the tapoica segment
7 Utilsaion levels in South - 50%; West 26.5%; North - 45%
8 Heavy dependence on the confectionery division
9 Ice cream amd pharma segment showing maximum potential

Points to be taken care while preparing the marketing budgets

1 More focus on imporvement in the pharma industry be resolving the quality
2 Focus to improve the customer base of the company by adding more organis
3 Minor issues in the confectionery to be addressed; healthy growth of 5-6% ca
4 More focus on sweets segment; customers not price sensitive. Healthy grwot
5 Quotes to be given mostly ex-factory to push the transport costs to the custo
6 Price of extra packaging to be passed to customers in the pharma segment
Facts - Company
1 Current capacity of 16,000 tonnes per year
2 Share of liquid glucose in the total sales of A-one is 18-20%
3 Orgainsed players in confectionery complained abt packing quality
4 Unorganised players (confect) complained abt delivery issues
5 Orgainsed players in pharma complained abt packing and delivery

6 Unorgainsed players in pharma complained abt quality issues

7 60% of the sales in the company are direct; when compared t 70% f the indu
8 Average contribution of Rs. 1,750 per tonne

Customer segmentation

Percentage of
customers
Upto 50,000
Above 50,000

Value of sales
contributed
70%
20%

26%
74%

Sales realisation

Year
91-92
92-93
93-94
94-95

Sales

Growth in %
8000
10000
12000
11500

25%
20%
-4%

37000
10500
18750
1100
4750
29500
20350

30%
9%
15%
1%
4%
24%
17%

94-95
Confectinery
Busc
Cakes
Fruits
Ice
Pharma
Others

121950

Year
91-92
92-93
93-94
94-95
95-96

Tapioca

Maize bought out

4825
7330
4210
7332
6520
8050
6500
9250
5600
9180

ent; minor issues in confectionery

ong term relationship

ts to customers

ng glucose in the tapoica segment

5%; North - 45%

Weakeness of the company

1 More or less flat growth in sale
2 De-growth in actual quantity o
4 Heavy reliance on few custome
5 Small customeers with sales a
6 Pharma sector with a expected
7 Reducing market shares
8 High transportation costs can e

Opportunities
Beer industry
Growing demand from organise
Ice cream amd pharma segme

uced glucose from internal RM

Pharma
Confectionery
Sweets

ng glucose in the tapoica segment

5%; North - 45%

g maximum potential

ma industry be resolving the quality and packaging issues; growth rate of 9-10% can be assumed in the
he company by adding more organised clients (to reduce the dependence on few large customers cont
ddressed; healthy growth of 5-6% can be assumed for the segment
rs not price sensitive. Healthy grwoth of 5-6% can be assumed
push the transport costs to the customers
customers in the pharma segment

of A-one is 18-20%
plained abt packing quality
ed abt delivery issues
d abt packing and delivery

ned abt quality issues

ect; when compared t 70% f the industry average

% of total sales

Growth in
Average price/tonne
price realisation
Actual sales
19
8602
68,816,000
20
8708
1%
87,080,000
18
8766
1%
105,192,000
19
10200
16%
117,300,000

95-96

96-97
40250
11400
20250
1150
5560
32700
22350

30%
9%
15%
1%
4%
24%
17%

133660

Maize/corn

30%
8%
15%
1%
4%
25%
17%

146550

Tapioca

2832
3600
3150
4110
4831

44000
12400
21750
1200
6500
36300
24400

Maize starch
-13%
55%
0%
-14%

Maize/corn
0%
10%
15%
-1%

27%
-13%
30%
18%

s of the company
ss flat growth in sales realisation
h in actual quantity of sales despite short supply in 94-95?
ance on few customer with 20% of customers contributing to 74% of sales
omeers with sales amount <10k, amounting to 22% of sales, heavy admin costs
ector with a expected CAGR of 13%; A-one has issues of quality, packing and delivery
market shares
portation costs can eliminate positive contribution

emand from organised players

amd pharma segment showing maximum potential

Organised Unorganised
ok
problem
OK
OK
good

an be assumed in the segement

large customers contributing to 74% of sales)

97-98
48000
13400
23500
1300
7250
40300
26750

98-99
30%
52000
8%
14600
15%
25200
1%
1400
5%
8560
25%
44750
17%
29300

99-00
30%
57000
8%
15750
14%
27200
1%
1500
5%
9750
25%
49700
17%
32200

160500

175810

193100

30%
8%
14%
1%
5%
26%
17%

CAGR
7%
7%
6%
5%
13%
9%
8%

Questions to be discussed:

1. What was Tweeter delivering in the 70s when it was set up and to whom? Describe the environmen

2. How did the environment change in the 80s and 90s and why? How did that effect consumer purch
3. What can Tweeter do to adjust to the changes in the business environment?

Decision

Currently, the market is characterized by slow overall growth and high com
Make marketing strategy more effective to make customers aware of t
Expand presence in the upcoming segments and technology such as m
Did not analyze properly whether Bryn Mawr tried their best to implem
Use effective advertising to reinforce the exclusivity of the products th

Describe the environment in which such a service was designed.

at effect consumer purchase behaviour?

owth and high competition, leading to high price sensitivity. Following can be some
tomers aware of their price competiveness for quality products
hnology such as mobile electronics segment, which expected to have a significant
eir best to implement APP; Company needs to think on the marketing strategy for
of the products that were marketed by Tweeter

wing can be some of the steps that can be taken by the company:

have a significant growth in the market. This could fit well into their current custom
eting strategy for its acquisitions

heir current customer base of Quality/Assurance

Why is Quartz shower not selling ?

Plumbers were not sure about performance of electronics products

For plumbers adopting to this change used to take time
Shower selection in UKs market is guided by plumbers choice to a
Highly priced compared to other existing types, and marketing has
Little knowledge about the product features

Market segment, Multi-brand

Niche as price is high, can target penetrating premium custome

Even compared to some standard products, price can be compare

Shower buyers in UK tend to fall in 3 segments - premium, standar

The company has developed a niche product with breakthrough te
The company may slowly start introducing this product as a mains

Market Strategy

Lot of opportunities in developers market as it holds 40% of show

Along with new product, 3 other brands for 3 different sectors m
Should portray the new product for the premium segment and trea
Plumbers need to be made more aware and it is required to gain t
Premium segment as customers are too concerned with style, th

ctronics products

mbers choice to as large as 73%. Hence their influence in the market is a key
nd marketing has not been done aggressively for the premium segment

remium customers
can be compared as excavation would not be required for Quartz, hence that

premium, standard, and value. Multiple brands cater to the segments accord
breakthrough technology. The product has definitely taken the company ahe
oduct as a mainstream product as the market matures for such products. It ta

lds 40% of shower market that are yet to decide on the showers
rent sectors markets need too much of awareness. Sector specific custome
segment and treat it as a niche product. Discounting or reducing price will no
equired to gain their trust on the technology applied on Quartz. This would gi
ned with style, this aspect should also be taken care

market is a key factor of poor sale

m segment

uartz, hence that installation cost would be saved

segments accordingly.
the company ahead of its competitors. It also provides a chance to develop it
uch products. It takes time for market to adopt to such products

specific customer awareness about the specifications and usage need to be s

cing price will not help the product to sustain in long term
rtz. This would give a huge hike on the sale figures.

nce to develop its brand with the customers

sage need to be spread across

Average utilization of 50-75% higher than the utilization levels prevalent in Western India (~26.5
Maintained a growth rate of ~12-20% YOY in the liquid glucose segment
In house corn processing facility reduced dependence on the market availability of raw materia
Company able to maintain long term relationship with its customers (especially in the confection
60% of sales is direct

Recommendations/ Points to be taken care for preparing the market strategy:

Pharmaceuticals :
More focus on improvement in the pharma industry be resolving the qua
Extra packaging costs (MS Drums) may be passed on to the customer
Confectioneries: Minor quality issues in the confectionery to be addressed; health
Sweets: More focus on branded sweets segment; customers not price sensitive. H
Others:
Quotes to be given mostly ex-factory to push the transport costs to the c
Focus to improve the customer base of the company by adding more org

in Western India (~26.5%), considering the regional nature of the business

vailability of raw materials, to a significant extent

ecially in the confectionery organized case study)

ket strategy:

be resolving the quality and packaging issues; growth rate of 9-10% can be assumed in the se
n to the customer
be addressed; healthy growth of 5-6% can be assumed for the segment
not price sensitive. Healthy growth of 5-6% can be assumed

ansport costs to the customers

y by adding more organised clients (to reduce the dependence on few large customers contribu

e assumed in the segment

e customers contributing to 74% of sales)

Companys growth was always driven by continuous innovation thr

Marketing campaigns were fresh and innovative
Since Cadbury was the market leader in chocolate category with 7
PGE was a unique product, which was not just chocolate but with a
Why brand name of Perk used
Launching of a new brand requires high expenditure on advertising
So it was decided to take the advantage of high brand awareness a
Perk Glucose energy was repositioning of perk addressing the barr
Also PGE would help the company in strengthening its position in t
Nestles Kit Kat and Munch were dominant brands in wafer chocolat

Decisions and Recommendations

Constant communication with different appealing tagline

As the new product is focused more on Glucose content,
There need to be lot more focus on the sports section as
It can gradually penetrate more into the price sensitive s

us innovation through launch of new products, extending and re-launching ex

e category with 70% market share, its target was to penetrate in the non-choc
colate but with a new value proposition i.e. glucose. Being a unique product,

ure on advertising and promotions

rand awareness and well established brand equity of perk
dressing the barriers of non users and targeting youth segment to satisfy sna
g its position in the chocolate wafer segment
in wafer chocolate segment. Cadburys launched PGE with a product different

ppealing taglines and consistent communication strategy is required

ucose content, the company should find the other existing ingredien
ports section as Glucose consumption is pretty common for every pla
price sensitive segment who are currently buying glucose biscuits

d re-launching existing products

e in the non-chocolate user market segment which led to the introduction of

unique product, it was targeted to enter the segment dominated by glucose

ent to satisfy snacking along with increasing energy level

product differentiation and different value proposition to increase penetration

egy is required to sustain the growth. It was eat Perk and get a shot
sting ingredients that would also add some food value to consumers
on for every players. Cricket might be the popular most sports, but ot
ose biscuits

e introduction of wafer based chocolate added with glucose

nated by glucose biscuits such as Parle-G etc. i.e. the non users of chocolate c

ease penetration in wafer chocolate segment

and get a shot of Glucose from chase your dream for the new pro
e to consumers, and can improve on the offerings
st sports, but other sports can also be targeted

ers of chocolate category. It tried to cover the segment which lacks affordabil

for the new product, hence the emotional attachment might be dilut

h lacks affordability of chocolates

might be diluted for the new product

Plot:
HP Sonos 100 B/W started with non-hospital segment of cardiology
Soon superseded by other systems offering color flow, hence HP sa
HP recognized their product limitation
HP reengineered to come up with color flow technology with high r
Key competitors: Interspec, Vingmed, Biosound
Market:
As per forthcoming regulation regarding reimbursement there is a
The future market potential is based on 13000 cardiologist. 85% o
Present US market for medium and small segment is $40M. Presen

Our recommendation is to target customers through direct sales force

Pros
Customer relationship management
Ability to demonstrate equipment and provide follow up service. A
Proven Track record of direct sales force doing much better in the s
Cost per sales is less than MRs. 30% against MR cost of 40%
Though the sales force strength is not huge, new engagement can
Cons
Currently having limited sales force and is to be shared across all s
Adding more sales force will include huge cost

ent of cardiology, and sold the product well for few months
flow, hence HP sales

ology with high reliability, advanced color flow, optimal combination of resolu

ement there is a potential market of approximately $700M

rdiologist. 85% of them are spread over 15 cities in non-hospital segment
t is $40M. Presently 90% of this market is dominated by Interspec, Vingmed a

direct sales force instead of using MRs.

ow up service. As per forthcoming regulation regarding reimbursement, if do

ch better in the segment than MRs.
ost of 40%
engagement can be considered as an investment as the potential market is v

hared across all segments

bination of resolution and penetration, and accurate diagnostic information

ital segment
rspec, Vingmed and Biosound

bursement, if doctors comes out of big hospitals and start small clinical setup

ential market is very high

tic information

mall clinical setups, direct sales team would be able to interact better with the

ct better with the doctors because of their prior relationship.

PLP1

plp2

plp3

Multiple issues in the process flow

No clear information flow.lack of clarity
Lack of ownership and transparency
Chaotic process, cannot predict the speed of the flow of process

Decision
Build clarity into the process and ensure it is well governed
Assign accountability in the process

Delivery issues with the product

Key customer comlaining

Through this case, we observe the significance of concurrent product and process development, and application

Developing best solutions can be evolutionary or revolutionary. The concept portrayed in the case was truly ahead of its time. T

development, and application of one of the fundamental principles of product development Go, See and then Act. Here the customer and

e was truly ahead of its time. Today, in the product (mechanical/ machinery) development space, a set based engineering is approach in w

n Act. Here the customer and his voice is sought by not only the marketing teams but also by the Product Engineering team in order to deve

d engineering is approach in which numerous concepts are developed and carried through the gates of design until such time one of the alte

gineering team in order to develop a robust product specifications and characteristics. True customer expectations are funneled through the

n until such time one of the alternative fails the proof of concepts, cost or quality objectives. Sometimes, one of the design concepts may no

ions are funneled through the house of quality concept to develop engineering definitions of the customer wants, and to develop best solutio

f the design concepts may not meet form fit function requirements as well. With the advent of Virtual Product Development and Virtual Prod

nts, and to develop best solutions.

Development and Virtual Product Engineering, the approach of Parallel Product Development provides great value proposition to hedge th

t value proposition to hedge the risks of revolutionary product development through virtual validation.