This action might not be possible to undo. Are you sure you want to continue?
Design test marketing and new product launch strategy for: 1. MARUTI RITZ (Consumer Durable Goods) 2. Mc DONALDS ( Service Industry) 3. SUNSILK (Consumer Nondurable)
1. MARUTI RITZ- CONSUMER DURABLE GOODS INDIAN AUTOMOBILE INDUSTRY
Maruti Suzuki has been the leader of the Indian car market for about two decades, one of the major global automotive industries in the coming years. A number of domestic companies produce automobiles in India and the growing presence of multinational investment, too, has led to an increase in overall growth. Following the economic reforms of 1991 the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. The monthly sales of passenger cars in India exceed 100,000 units
In 1953, the government of India and the Indian private sector initiated manufacturing processes to help develop the automobile industry, which had emerged by the 1940s in a nascent form. Between 1970 to the economic liberalization of 1991, the automobile industry continued to grow at a slow pace due to the many government restrictions. A number of Indian manufactures appeared between 1970-1980. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies. Timeline of Indian automobile industry: 1897 First Person to own a car in India - Mr. Foster of M/s Crompton Greaves Company, Mumbai 1901 First Indian to own a car in India - Jamshedji Tata 1905 First Woman to drive a car in India - Mrs. Suzanne RD Tata 1905 Fiat Motors 1911 First Taxi in India 1924 Formation of traffic police
1928 Chevrolet Motors 1942 Hindustan Motors 1944 Premier Auto Limited 1945 Tata Motors 1947 Mahindra Motors 1948 Ashok Motors 1948 Standard Motors 1974 Sipani Motors 1981 Maruti Udyog 1994 Rover Motors 1994 Mercedes Benz 1994 Opel 1995 Ford Motors 1995 Honda SIEL 1995 Reva Electric Car Company 1995 Daewoo Motors 1996 Hyundai Motors 1997 Toyota Kirloskar Motors 1997 Fiat Motors (Re-Entry) 1998 San Motors 1998 Mitsubishi Motors 2001 Skoda Auto 2003 Chevrolet Motors (Re-Entry) India’s car market has emerged as one of the fastest growing in the world. The number of cars sold domestically is projected to double by 2010, and domestic production is skyrocketing as foreign makers are setting up their own production plants in India. The government’s 10-year plan aims to create a $145 billion auto industry by 2016. According to McKinsey, the auto sector’s drive to lower costs will push outsourcing. The auto sector could be worth $375 billion by 2015, up from $65 billion in 2002. McKinsey thinks India could capture $25 billion of this amount. Out of 400 Indian suppliers, 80 percent have the ISO 9000 certificate—the international standard for quality management.
The production of automobiles in India is largely aimed at local consumers. Several Indian manufacturers also export a diverse variety of auto components. Indian passenger vehicle exports are also expected to rise from 170,000 in 2006 to 500,000 in 2010
Maruti Suzuki Ritz engines and variants:
Maruti Ritz is fitted with the all aluminum K12M engine. The 1.2-litre, four cylinder, petrol engine is the latest in lightweight K-series engines that are very much fuel efficient. To achieve fuel efficiency and NVH (Noise, Vibration and Harshness) reduction, plastic parts have been used along with shortened piston skirts, plastic intake manifolds, rocker-less DOHC cam shaft and nut-less conrods. The raisin coatings on the pistons reduce transmission losses. There will be six variants of the Maruti Ritz- three in petrol and the other three in diesel. The K12M is an 1197cc petrol engine. It generates 85 bhp at 550 rpm. The common rail diesel engine is a 1248 cc engine that produces 75 bhp.
Environment friendly and fuel efficient:
To make it a more environment friendly car, Maruti Ritz has been ridded of harmful substances like chromium, cadmium, mercury etc. This makes Maruti Ritz more recyclable to salvage valuable materials. The Maruti Suzuki Ritz is the first car from Maruti Suzuki India Ltd. that complies with BS-IV emission norms. The Maruti Ritz has Smart DistributionLess Ignition (SDLI) that enables the car to achieve a fuel efficiency of 17-18 kmpl. Maruit Ritz will also be able to run on 10% ethanol-petrol blend. The diesel version will have a fuel efficiency of 21 kmpl.
Other features of Maruti Suzuki Ritz:
The Maruti Suzuki Ritz will come with a 5-speed manual gearbox. Rumor is that a auto-gear version will be released. The Maruti Ritz will be available with RR fog lamps. The Maruti Suzuki Ritz will come with a rear bumper designed to suit the roads of India. For security, the Maruti Ritz will come with i-CATS (Intelligent Computerized Anti-theft System) on all the variants of the Ritz.
The Quality Advantage A Buying Experience like No Other Quality Service across 1036 Cities
WEAKNESS Commodity price risk Exchange rate risk
OPPURTUNITIES Leading Growth in passenger car sector Earning capacity of customers are increasing
THREATS Risk factor Business Risk Competitors
TEST MARKETING STRATEGIES
The ultimate way to test the Maruti RITZ is to put it into full-blown test markets. Firstly Maruti has to choose a few representative cities and sales force tries to sell the trade on carrying the product and giving it good shelf exposure. Maruti has to run full advertising and promotion campaign in these markets. The number of test cities
The decision of selecting cities: Selection of the cities is a major challenge for Maruti. As Maruti Ritz will cost between Rs.400,000- 550,000, the standard of living of the people must be taken into account. As the price is not as affordable as TATA NANO, its better to introduce the car in metropolitan cities. In metropolitan cities the Double Income group has become a majority these days. Thus their disposable income has also increased and they have become the target customer of Maruti RITZ. Length of test: The test marketing can be carried for atleast 3 months before the launch of the RITZ in the market. The test marketing should carry on simultaneously in all the metropolies. The car must be put into test drive in all the crowded places like shopping malls, hotels, restaurants, colleges etc as well as in the showrooms of Maruti. Kind of information: Before the test market, Maruti must understand the needs of their customer. What type of car they want? Which colours will be preferable? What facilities they need in their dream car? Keeping all these in mind Maruti must provoke the customers to come and try the new car for test drive so that they could gather the feedback from the customers. Mode of action: Test Marketing can be carried on by giving test drives to the customers coming in the showrooms. Not only that in each city Maruti must outsource the activity to the reputed EVENT MANAGEMENT Companies. The event management companies must undertake promotional activities focusing on giving test drives in shopping malls.
To launch a new product in market, a wide range of things are to be taken into consideration starting from market assessment. For the launch of Maruti RITZ, the following marketing plan is to be undertaken:
1.Segment to be targeted 2.Product characteristics 3.Unmet needs to be covered by the new product 4.Distinctive advantage 5.Strategic fit with Distribution and channel model
1.How is the market segmented? 2.What is the proposition to customers? 3.What is the unique selling point? 4.How can the product best complement the 1. What is most effective way to reach, sell to and retain customers? 2. What adjustments are needed to current model? 1.At what price customer will be able to buy the product? 2.What will be the profit margin? 1.Strengths 2.Weakness 3.Oppurtunities 4.Threats 1.Fit with current strategy, objectives and projects? 2.Impact on existing projects?
Future Outlook of the Product
Impact of new product on existing product portfolio
1.Cannibalisation/ substitution 2.Existing product/ project lifecycle 3.Impact over current investment
What is Product Strategy?
Line lengthening: A company can lengthen its product line in 2 ways a) line stretching b) And line filling. Line Stretching: This occurs when a company lengthens its product line beyond its current range. This is a frequent measure taken by companies to enter new price slots and to cater to new market segments. The product may be stretched by the addition of new models, sizes, variants etc. Line filling: As the name applies, filling means adding a product to fill a gap in the existing line. The company wants to portray itself as full line company and that customers do not go to competitors for offers or models in particular price slots.
EXISTING PRODUCT STRATEGY of MARUTI:
Portfolio of 12 products Five product lines
Product Line A1 A2 A3 SUV C - Class Products
800 Alto, Zen ,Wagon –R, Swift, A-star D ZiRE, Sx4 Vitara, Gypsy Omani, Versa
More focus on A1, A2 & A3:
Now we will discuss what RITZ’s product strategy……is…
Maruti RITZ has undertaken LINE STRECHING by introducing the new RITZ in the market of Hatch back cars. RITZ is positioned for the A-2 segment with the Maruti Swift, Wagon R, & A-Star
Maruti Suzuki Ritz will be positioned between the Maruti Suzuki A-Star and Maruti Swift. It will mainly compete with Hyundai’s i10 and i20, Skoda’s Fabia, Ford’s Fusion, Fiat’s Palio and Tata Motors’ Indica Vista. A similar version of the model, which will be named Maruti Suzuki Splash, will be launched in the international market. While the Swift was lapped up all sorts of consumers for its all-rounder abilities, it was essentially meant for the young and sporty crowd looking for a fabulous driving experience. The Ritz will be a more sensible car, with the focus lying on space, comfort and driveability. To this effect, the Ritz has a taller body design. In fact, it's clone-with-adifferent-name Splash was made to replace the Suzuki WagonR in the international market, just like the A-Star was the next generation international Alto. To this effect, class beating headroom to add a feeling of spaciousness and well-being to the cabin is the largest achievement of the Ritz. The other factor that will make the Ritz unique from the rest of Maruti Suzuki's portfolio is the K12M engine. Elder sibling of the earlier K10B engine that powers the peppy A-Star, the K12M carries the same fundamentals of light-weight and hence far lower levels of fuel consumption and NVH.
MARKET PENETRATION PROCESS
Maruti and Hyundai seemed to be locked in a battle for positioning their small cars. The new war seems to have been sparked off after the launch of Maruti Suzuki Ritz. Maruti RITZ made a PARALELL ENTRY in the market of small cars with launch of Hyundai i20. Auto analysts say that Maruti Suzuki Ritz neatly fills in the gap between Hyundai i10 and i20. It was cleverly devised by Maruti Suzuki to eat into the market share of the rival company. As Ritz is bigger in dimensions compared to i10 and comes with a diesel engine option, it is considered a better bet. Ritz is smaller than the i20 and there too the pricing helps Maruti fight Hyundai. This interesting occurrence has led many people to assume that Ritz rivals Hyundai i20. Maruti officials claim that, the new pricing strategy incidentally fell into the category between two Korean cars. Hyundai, has three products like i10, i20 and Getz prime in this category. It is not the price along but also the advertisement campaigns which are a sources of trouble between the two companies. Maruti Suzuki has also launched a new advertising campaign for Ritz, called ‘Live the Moment.’
Pricing Objective :- To increase the Market share & To maintain Cost Leadership
Pricing Method :- Markup Pricing (cost plus pricing ) Pricing strategy :- Economical Pricing MARUTI RITZ should under take RAPID PENETRATION Strategy. As RITZ is a medium priced consumer durable product, thus it should undertake intense promotional activity in order to attract the attention of the customers. As the market for the hatch back cars are already loaded with models, thus it has to take in rapid penetration strategy to become a profitable venture. Keeping in mind the prices of Competitors both internal & external, the prices of RITZ are the following: PRICE LIST OF RITZ
Fuel Engine Price (Rs.)
Maruti Ritz Lxi BS IV Maruti Ritz Vxi BS IV Maruti Ritz Vxi (ABS) BS IV Maruti Ritz Ldi BS IV Maruti Ritz Zxi BS IV Maruti Ritz Vdi BS IV Maruti Ritz Vdi (ABS) BS IV
Petrol Petrol Petrol Diesel Petrol Diesel
1197 CC 1197 CC 1197 CC 1248 CC 1197 CC 1248 CC 1248 CC
4,05,872 4,37,055 4,63,037 4,80,754 5,02,644 5,15,635 5,34,579
PRODUCT 1. Maruti Ritz Lxi BS IV 2. Maruti Ritz Vxi BS IV 3. Maruti Ritz Vxi (ABS) BS IV 4. Maruti Ritz Ldi BS IV 5. Maruti Ritz Zxi BS IV 6. Maruti Ritz Vdi BS IV 7. Maruti Ritz Vdi (ABS) BS IV
PRICE The prices of the variants of Ritz will be in the range of Rs 400000 To Rs 55000 PLACE Ritz will be available in all the registered showrooms of MARUTI SUZUKI
PROMOTION TELEVISION ADVERTISEMENT HOARDING & BANNERS ACTIVITIES IN MALLS like giving Test Drive. Contests-Lucky Draw, Scratch card to attract the customer
The competitors of Ritz can be subdivided into: 1. Internal Competition 2. External Competition In internal completion Ritz has to fight against Maruti SWIFT. Swift has been the fastest selling model in the Maruti stable ever since it was launched. RITZ will get tough challenge for the small hatchbacks of Hyundai specially Hyundai i10 & Hyundai i20. The following graph will show the positions of the competitors in the market:
Globally Ritz (Splash) is designed to replace the Wagon-R. Ritz is targetted towards young but married male between the age of 25-35. Clearly the word to the designers is to come up with a roomy hatch that can carry a family. Ritz has a short snub nose, wheels set far apart and a non-existent rear overhang. The taller stance, big wheel arches, rising waistline and almost vertical tail exudes the functional styling of ritz. However its not without sex appeal, it is good looking with plenty of cheekiness. The angled rear lamps are designed to look like splashes of water, apparently! Pictures of Maruti Suzuki Ritz
WHAT IS POSITIONING?
POSITIONING is what you do to your customer’s mind. It is the act of
designing the company's offering and image to occupy a distinctive place in the target market's mind.
There are several approaches to positioning strategy. Maruti Suzuki RITZ has undertaken positioning strategy Using product characteristics or customer benefits.
PROMOTIONAL STRATEGY of RITZ
Maruti, which has consistently retained its position among the top three advertisers in the category, has a high voltage campaign lined up for its compact hatchback Ritz, which will sport the tagline ‘Live The Moment’. The company plans to spend close to Rs 15 crore in the first three months (MayJuly). “The first three months will be crucial in creating a strong positioning for the brand,” says Shashank Srivastava, chief general manager (marketing) of the Indian car major. Dentsu, which is handling the advertising duties for Ritz, is looking at print, television and the digital media to create a buzz around the brand.
Advertising Strategy- Maruti has undertaken a new ad campaign for RITZ. They have went out of track of their Persuasion Advertising “Ghar Aa Gaya Hindustan” “India Comes Home in Maruti Suzuki.” by “LIVE THE MOMENT” campaign. These ads mainly depicts the pleasure the customer will get during their ride in RITZ.
Information Advertising- the new ads of Maruti RITZ are informative based. The ads gives information about the product, its specification and its features.
The Ritz looks like a winner all the way has all the boxes checked on the must have list of features. Maruti has done its homework well. The Ritz comes as Maruti Suzuki's eighth launch in
the last four years - and the fourth major hatchback after the Zen Estilo, Swift and A-Star. Built around the Swift platform, the Ritz will also share plenty of components with the runaway success. What then would define the Ritz' positioning and uniqueness.
2. Mc DONALDs- Service The McDonald’s Story - Genesis
The story of McDonald’s started in 1954, when its founder Raymond Kroc saw a hamburger stand in San Bernardino, California and envisioned a nationwide fast food chain. Kroc proved himself as a pioneer who revolutionized the American restaurant industry. Today McDonald’s is the world’s largest fast food chain serving 47 million customers daily. McDonald’s is now one of the most valuable brands globally, worth more than $25 billion. The Golden Arches and its mascot Ronald McDonald have gained universal recognition. Though the company has roots in the US, McDonald’s today has become an accepted citizen of the world.
McDonald’s in India
McDonald’s entered India in 1996. McDonald’s India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. Apart from opening outlets in the major metros, the company is now expanding to Tier 2 cities like Pune and Jaipur.
Franchise Model – Only 15% of the total number of restaurants are owned by the Company. The remaining 85% is operated by franchises. The company follows a comprehensive framework of training and monitoring of its franchises to ensure that they adhere to the Quality, Service, Cleanliness and Value propositions offered by the company to its customers. Product Consistency – By developing a sophisticated supplier networked operation and distribution system, the company has been able to achieve consistent product taste and quality across geographies. Act like a retailer and think like a brand – McDonald’s focuses not only on delivering sales for the immediate present, but also protecting its long term brand reputation.
Challenges in Entering Indian Markets
Regiocentricism: Re-engineering the menu - McDonald’s has continually adapted to the customer’s tastes, value systems, lifestyle, language and perception. Globally McDonald’s was known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to consume beef or pork. To survive, the company had to be responsive to the Indian sensitivities. So McDonald’s came up with chicken, lamb and fish burgers to suite the Indian palate. The vegetarian customer – India has a huge population of vegetarians. To cater to this customer segment, the company came up with a completely new line of vegetarian items like McVeggie burger and McAlooTikki. The separation of vegetarian and nonvegetarian sections is maintained throughout the various stages.
Segmentation, Targeting and Positioning
McDonald’s uses demographic segmentation strategy with age as the parameter. The main target segments are children, youth and the young urban family.
% of kids who influence what FMCG brand their family buys
80% 70% 60% 50% 40% 30% 20% 10% 0%
71% 59% 52%
Burgers & Pizzas
As shown above, kids reign supreme in FMCG purchase related to food products. So to attract children McDonalds has Happy Meal with which toys ranging from hot wheels to various Walt Disney characters are given (the latest in this range is the toys of the movie Madagascar). For this, they have a tie-up with Walt Disney. At several outlets, it also provides special facilities like
‘Play Place’ where children can play arcade games, air hockey, etc. This strategy is aimed at making McDonald’s a fun place to eat. This also helps McDonald’s to attract the young urban families wanting to spend some quality time while their children have fun at the outlet. To target the teenagers, McDonald’s has priced several products aggressively, keeping in mind the price sensitivity of this target customer. In addition, facilities like Wi-Fi are also provided to attract students to the outlets like the one at Vile Parle in Mumbai. “Mc Donald’s mein hai kuch baat” projects McDonald’s as a place for the whole family to enjoy. When McDonald’s entered in India it was mainly perceived as targeting the urban upper class people. Today it positions itself as an affordable place to eat without compromising on the quality of food, service and hygiene. The outlet ambience and mild background music highlight the comfort that McDonald’s promises in slogans like “You deserve a Break Today” & “Feed your inner child”. This commitment of quality of food and service in a clean, hygienic and relaxing atmosphere has ensured that McDonald’s maintains a positive relationship with the customers.
Customer perception is a key factor affecting a product’s success. Many potentially revolutionary products have failed simply because of their inability to build a healthy perception about themselves in the customers’ minds. McDonalds being an internationally renowned brand brings with it certain expectations for the customers Target Segment What is McDonald’s for me? A Family with children A treat to children, a fun place to be for the children. Urban customer on the move Great taste, quick service without affecting the work schedule Teenager Hangout with friends, but keep it affordable. Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their values. The customer’s expect the brand to enhance their self-image. Customer responses obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect strongly with the brand. However, fulfilling some of the customer expectations like a broader product variety provide McDonald’s a great scope for improvement.
Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the nontangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the behaviour of the Indian customer and provided a totally different menu as compared to its International offering. It dropped ham, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Chicken Maharaja Mac. McDonalds bring with it a globally reputed brand, world class food quality and excellent customer specific product features.
Distribution Strategy: The place mainly consists of the distribution channels. It is
important so that the product is available to the customer at the right place, at the right time and in the right quantity. There is a certain degree of fun and happiness that a customer feels each time he dines at McDonalds. There are certain value propositions that McDonalds offer to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. Now McDonalds have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. There are certain dedicated areas for children where they can play while their parents can have some quality time together.
Pricing includes the list price, the discount functions available, the financing options available etc. It should also take into the consideration the probable reaction from the competitor to the pricing strategy. This is the most important part of the marketing mix as this is the only part which generates revenue. All the other three are expenses incurred. The price must take into consideration the appropriate demand-supply equation. McDonald’s came up with a very catchy punch line “Aap ke zamane mein ,baap ke zamane ke daam”. This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base McDonalds has now. McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes.
The various promotion channels being used by McDonald’s to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonald’s are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonald’s does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonald’s are:
• “You Deserve a break today, so get up and get away- To McDonald’s” • • “Aap ke zamane mein ,baap ke zamane ke daam”. • “Food, Folks, and Fun” “I’m loving it”.
How to converge the benefits of internal and external marketing? McDonald’s understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing. This is important as it must precede external marketing. This includes hiring, training and motivating able employees. This way they serve customers well and the final result is a happy customer. The level of importance has changed to be in the following order (the more important people are at the top): 1. Customers 2. Front line employees 3. Middle level managers 4. Front line managers The punch line “I’m loving it” is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.
The McDonald’s Experience
Marketing in a services industry is becoming an increasingly complex challenge. The paradigms of service marketing demand a passionate understanding of customer expectations and perceptions, and linking them to product design & delivery as well as operational planning. This is where McDonald’s has excelled due to its ability to successfully integrate the customer’s perspective in its products and operations in a comprehensive manner. The revamped menu in India is an example of McDonald’s strategy of integrating the customer’s perspective in its products. And, the operational integration is evident from McDonald’s emphasis on its suppliers as its customers as well as its treatment of its consumers as co-producers of services.
The ultimate aim of Service Marketing is not just to become a Service Leader but to create a Service Brand. The Service Delivery Process is the key to achieving this aim of Service Marketing.
Service Delivery Process
Supplementary Process During the Service Delivery Process, each moment of interaction between the firm and the customer, called “Moments of Truth”, helps understand the opportunities that a firm has to win or lose the customer. For example, these “moments of truth” are created for McDonald’s every time the guard at the McDonald’s outlet meets the customer, every time an attendant takes down the order from the customer waiting in the queue, every time the cashier interacts with the customer, every time the attendant helps the customer guided the customer towards the table, every time the attendant cleans Of table, etc. – The Service Encounter “Moments the Truth” Customer
Service Delivery Points
Managing these “moments of truth” is a great challenge in Service Marketing especially due to customer’s involvement as a co-producer of services (e.g. McDonald’s self-service concept wherein the customer not only collects the order but also cleans the table after consuming the food). However, McDonald's has been able to create a great experience for its customers by understanding the nature of the entire Service Delivery Process and the various stages in the process that are exposed to the customers. Transparency in the processes at its outlet has helped McDonald’s bring the back office in its outlet at the front so that the customer is able to know the operations and provide feedback on service design improvements. Internal Customer Focus is equally important as External Customer Orientation in order to win these “moments of truth”. McDonald’s focus on its People and their service delivery methods therefore plays a very important role in creating a successful Service Brand. The quality and the consistency of the service delivered by McDonald’s have been greatly enhanced by the combination of the factors mentioned above. This has helped McDonald’s become Service Leader and a successful Service Brand. This is evident from the fact that very few of its customers opt for take-home parcels or home deliveries while most of them prefer to eat at the outlet and enjoy the McDonald’s experience.
McDonald’s has been a leading fast-foods outlet in Vile Parle. But the outlet understudy has other competitors eating away into its market share. In addition to its traditional rivals—KFC, Dominos, Pizza Hut—the firm encounters new challenges. Jumbo King competes using a backto-basics approach of quickly serving up burgers for time-pressed consumers. On the higher end, the KFC has become potent competitor in the quick service field, taking away customers from McDonald’s. Perhaps in the new environment, fast, convenient service is no longer enough to distinguish the firm. At this time, a new critical success factor may be emerging: the need to create a rich, satisfying experience for consumers. This brings us to service and experience based competition which McDonald’s can use for competitive advantage against Jumbo King. Keeping in mind the demographics of the area, McDonald’s has Wi-Fi enabled the outlet to cater
to the student community. It is for this overall “Food, Fun & Folks” experience that customers pay a premium over the other competitors. Competition also reduces product lifecycle; inducing firms to revise their products portfolios and to revisit their product market to understand changing needs, expectations and perception of different market segments. The new McBreakfast would be introduced between 6 to 11 am as a pilot project. This would open up a whole new revenue stream for McDonald’s by tapping into the student and working population by providing a healthy and wholesome breakfast. This shows how demographic shift can affect the demand for products and services. McDonald’s has anticipated these changes to maintain its competitive edge. Two Dimensional Perceptual Mapping
1. McDonald’s Indian Menu
Vegetarian McVeggie McAlooTikki Paneer Salsa Wrap Crispy Chinese McCurry Pan Pizza McPuff Non Vegetarian Chicken Maharaja Mac McChicken Burger Shahi Chicken McCurry Wrap Chicken Mexican Fillet-O-Fish
3. SUNSILK- CONSUMER NON-DURABLE Sunsilk is a hair care brand, primarily aimed at women, produced by the Unilever group. Sunsilk is Unilever’s leading hair care brand, and ranks as one of the Anglo-Dutch conglomerate's “billion dollar brands". Sunsilk shampoos, conditioners and other hair care products are sold in 69 countries worldwide. Sunsilk is sold under a variety of different names in markets around the world including Elidor, Seda and Sedal. The brand is strongest in Asia, Latin America and the Middle East and is the number one hair care brand in Brazil, Argentina, Bolivia, Sri Lanka and Thailand.
Their main target market is females between the age group 16-40 belonging to the two upper income classes. But n their promotional activities, they cover the whole market irrespective of these classes.
The major competitor of Sunsilk in the rural areas is Bio Amla while in the urban areas; Sunsilk faces cutthroat competition with P&G. In urban areas, Sunsilk is acting as a market challenger against P&G. Sunsilk has got the advantage of keeping their prices lower than P&G shampoos but P&G has captured a bigger share of the market due to its intense promotional activities.
Unilever claims to practice value-based pricing in which the customers’ perception of the product’s price provides a starting point for developing the marketing mix of the product. The research department determines this price usually by using focus groups. The price of Rs 2 for Sunsilk shampoo sachets shows how the price also reflects a concern to make the purchase more convenient, since the rupee is denomated in this value. The primary importance of this value-based pricing is that the product demand will be much higher if its price is in line with the customer’s perception of its value. One crucial concern for valuebased pricing is strict management of cost in order to be able to make a profit at the value-based price. After the initial price is determined, Unilever then uses target costing in order to achieve the required profits. With the marketing plan now being termed as ‘Annual Contract’ the importance of meeting the profit margin requirements has increased. Target costing thus provides an essential tool to manage cost effectively. The characteristic of monopolistic competition typifying the market sets the threshold for pricing. This market consists of many buyers and sellers trading over a range of prices. The key element is differentiation, which allows the seller to gain market share in contrast to competitors. Given this market condition, Unilever differentiates its products and also sells them in different price ranges to cover at least a large portion of the market. Also this makes Unilever more sensitive to price changes of competitors’ products. Last year P&G revised their prices which has increased the prices of their shampoos considerably but Sunsilk has maintained its prices and their prices are much lower than P&Gs’, which is a
major blow to P&G because being a poor country people go for products which are within the range of Rs.100. 200ml bottle Rs.120 6ml Sachet Rs.3
Build top of the line consumers’ awareness. Creating a personality of the brand. Besides having these general objectives, the advertising objectives are set avoiding to the advertising strategy for each product, e.g. Sunsilk advertising objectives since it was being relaunched were: To increase the usage. Conditioning benefits. Makes the hair appear clean and shiny. Imparts a feeling of freshness-due to fragrance. Easy to manage, silky, soft hair. Unique shampoo for every hair type. Effectively communicate brand promise
The advertisement of a product should follow the smile approach that is: S - Simple M - Memorable I - Interesting with relevant information L - Linked to the brand E - Emotionally involved and liked. The advertisement should be in line with the past ad (if any). The ad should have a good advertising idea.
• • • • •
Advertising should meet the brief Message clearly communicated Advertising should fit the brands personality An add is usually changed after 18 months TARP(Target Audience Rating Points)
A product’s particular advertising strategy also depends on the level of competition involved with each product. For example shampoo ads previously used to provide emotional benefits but when P&G entered the shampoo market with it’s shampoo Pantene, it revamped the whole situation, Pantene ads promoted the shampoo’s functional benefits, which greatly appealed the consumers. Unilever s seeing this trend changed its advertising strategy for Sunsilk so that Sunsilk advertisements also promoted the shampoo’s functional benefits. Thus Unilever evaluates the product’s present position in the market, the promotion objectives it wants to achieve and the level of competition involved while setting the advertising strategy for a product. Elida Hair Institute does a lot of research and they come up with innovation in the product. Elida provides credibility that Sunsilk is not locally made but it is based on a lot of research by internationally accredited institutions. Unilever believes that messages about product delivered by credible sources can be very persuasive. Hence Nabila who is an hair care expert endorses Sunsilk and more value is added to the brand. Consumers relate to products itself, they can relate to a human being who consumers believe is an expert so if Nabila is an expert so is Sunsilk. Nabila a recognized and highly qualified hair stylist is used
by Sunsilk in its ads because they want to bring out an expert’s image. Sunsilk has come up with a new promotional campaign GOOD HAIR DAYS in six major cities in collaboration with famous hair stylists of the country.
Unilever also carriers out on extensive evaluation process. Target audience rating points are used to evaluate a product. Households are monitored in various cites to get consumers response and feedback. R-Lintas carriers out in own evaluation proceeds for its advertisement. Weekly figures are presented by research department. Regarding sales which have been carried out by
extensive surveys. Products manager themselves have to visit the Consumers’ View of Sunsilk Advertisements
“To reach as many towns and villages as we can” Unilever has 150 distributors whose function is to sell to wholesalers directly. There are different distributors for different areas. They are carefully selected and their performance is constantly evaluated.
33.33% 54.55% 12.12% Attractive Average Cheap
They appear extremely satisfied with their channel systems and have a good rapport with them. We feel that this is essential since these are not too many levels, thereby preventing channel complexity and allowing Unilever greater control. Unilever’s statements were verified by our consumer survey, which revealed that the retailers were very satisfied with Unilever’s distribution system, which allowed wellstocked shelves. This is an added advantage, since the consumers undergo habitual buying behavior. Sunsilk has a very good distribution network all over the country. They have struggled hard to adopt such channels that guarantee the perfect results regarding the placement of their product.
These distributors are given clear instructions regarding the selection of the retailer and to make sure that the retailer; Knows about the significant characteristics of the product. Places the product along with its major competitors like P&G. Displays the sachets distinctly. They give off and on offers as trade promotion incentives to their distributors. The distributors contribute to the promotion of Sunsilk by word of mouth.