SWOT Analysis:

Strategic Objectives:
SO:
1. Since the spending capacity of middle-class population is increasing the company can use
their brand image power to achieve TOMA in the minds of consumers and retain consumer
loyalty.
2. As many of the rural markets are unexploited, the company can use their strong dealer
network power to tap into such areas.
3. Many of the potential markets in north and western regions are untapped, the company can
tap into these markets has they have wide range of product portfolios.

ST:
1. The company can use the power of their high brand image to overcome the presence of
unorganized sector in the market.
2. With wide range of product portfolio the company give a tough competition to their
competitors in each product lines.
WO:
1. As there is huge potential for markets in north and western region, V- guard should not
depend only on Southern region for revenue generation.
WT:
1. As there is stiff competition in all product lines, V- guard should change the sales structure
of other category products as it was not ideal.

Competitor analysis:

Market share by Market share Price of below 300 litre Price for
Brands Value by Volume refrigerator stabilizer above 300 ltr Product lines
voltage
correctors/
stabilizers and
Automatic
voltage
Capari ₹ 36,45,00,000 13.50% ₹ 1,150 ₹ 1,937 regulators
Automatic
Voltage
Stabilizers, Servo
Voltage
Stabilizers,
Constant
Voltage
Transformers &
Bluebir Control/Isolatio
d ₹ 21,60,00,000 8% ₹ 1,070 ₹ 1,857 n Transformers
automatic and
servo
stabilizers , UPS,
Everest ₹ 16,20,00,000 6% ₹ 1,030 ₹ 1,817 inverters etc
Voltage
Stabilizers,
Mixers, Grinders
Keeline ₹ 10,80,00,000 4% NA NA and Ceiling Fans

Though the market share of V- guard is more than its competitors it was still not and
undisputed market leader. Because the closest competitor (Capari) has a market share of
13.5%.
Perceptual mapping: Consumers perception

Customers usually make their purchase decision mostly based on two important factors: Price
and Aesthetic appeal. Therefore, we selected these two aspects. Based on the above
perceptual mapping we can infer that V- guard is perceived as a product that is highly priced
and provides and high aesthetic appeal according to consumers.
Perceptual mapping: Dealer’s perception
Based on the above perceptual mapping we can conclude that V- guard is perceived as a
product with high price and has high functionality features. V- guard gives high functionality
features at a very high price as compare to its competitors.

Organisation structure

 The market was divided into 3 zones. Each zone had a VP.
 The company offered 12 categories of products. Each category had a product head
and reported to the VP of the zone.
 The product heads looked after Sales, distribution, and retail management.
 Stabilizer business was treated specially with a GM under whom he had a State
Product–in charge (PIC) and Territory Sales-in-charge (SIC).
 The GM also had the branch heads for all product managers under him.
 PIC and SIC were in charge of stabilizers only.
 The VPs of zones reported to the Director of Marketing strategy
 Director of marketing strategy reported to MD who answered to the chairman.
The organisation structure for stabilizers is specially treated.
It should be clear, as we do not know the zones and the performance of the zones. We can
only say that the states which come under the southern region are doing well and should
stay put.
More efforts should be taken by the sales personnel deployed in Northern and western
states. These are potential states and they must find a strong foothold in these zones.
We can also observe that although the structure is beneficial for the stabilizer business, such
focus is not necessarily endowed on other categories. So, to succeed in other categories as
well, the company needs to restructure its sales teams for different product lines.

Marketing Plan:

Executive Summary:
V guard is a highly reputed organization in the electrical, electronic home appliances and
electromechanical markets. It has a wide portfolio and has a presence in 144 states with
around 200 branches. The case takes place in 2013, the Director for Marketing and Strategy
of V – Guard has called a meeting for planning of stabilizer product range for the year. He is
aware of and wants to tap into the untapped markets and segments in the country. He also
expects a 10% increase in market share in India in stabilizer business. The market has 8-10
major players in the organized sector. V guard started in South India and has a big presence
in southern region. V guard pioneered different shapes and color, for its refrigerator
stabilizers. Its slogan is – “The name you can trust.
To achieve the company’s objectives for the year 2013, the team must look at Increasing
market share for stabilizers and tap into the unpenetrated markets all over India. They should
also look at modifying product features to induce acceptability, current pricing model,
commission structure for dealers and distributors, evaluate the effectiveness of promotions &
advertisements. The team also needs to review their outsourcing model and look at its
benefits as compared to own manufacturing facility.

Current marketing situations:

Market Analysis:
Percentag Total State Share (2012) %
State e Sales (crores) Change change
Andaman 0.2 200 0.4 -0.015 -0.05
AP 4 200 8 3.02 1
Assam 0.25 200 0.5 0.085 0
Chandigarh 0.5 200 1 0.585 0.25
Chhattisgar
h 1.5 200 3 -0.32 -0.5
Delhi 2 200 4 1.51 0.5
Goa 3 200 6 0.19 -0.5
Gujarat 0.4 200 0.8 0.136 0
Haryana 1.75 200 3.5 1.01 0.25
Himachal 0.6 200 1.2 0.37 0.1
J&K 0.3 200 0.6 -0.064 -0.1
Jharkhand 2.5 200 5 1.68 0.5
Karnataka 14.2 200 28.4 3.5 -0.8
Kerala 39 200 78 10.77 -1.5
MP 2.5 200 5 1.514 0.4
Maharashtr
a 1.5 200 3 1.34 0.5
Odisha 1.6 200 3.2 0.71 0.1
Pondicherry 1.2 200 2.4 0.74 0.2
Punjab 2.1 200 4.2 0.88 0.1
Rajasthan 0.8 200 1.6 0.355 0.05
Tamil Nadu 14.5 200 29 3.768 -0.7
UP 3 200 6 0.19 -0.5
Uttarakhan
d 0.2 200 0.4 0.068 0
Uttaranchal 2 200 4 1.51 0.5
West
Bengal 0.4 200 0.8 0.468 0.2
Total 100   200    

In 2011, 75% of total sales was from South Indian region which declined to 72% in 2012.
This means the market was at its maturity stage. Therefore, V- guard should try to target
northern and western markets.
There is a huge potential in AC and colour TV markets. But 60% of V- guard’s stabilizers are
for refrigerators. Therefore, V- guard should aim for other markets.
Objectives and issues:
Objectives:
• To increase market share for stabilizers and tap into the unpenetrated markets all over India
• To modify product features to induce acceptability
• To facilitate optimal pricing and commission structure
• To increase effectiveness of promotions and advertisements
• To choose between outsourcing and manufacturing

Issues:
• Operates in a highly mature South Indian Market. 60% of sales come from refrigerator
stabilizers which consists of only 15% market share for V-Guard. The company needs to
penetrate other markets, so how to identify and penetrate potential markets.
• Bring out new design innovations and spend on overall appearance of product based on
consumer preferences. If the stabilizers need more differentiation.
• Choosing between manufacturing in house or outsourcing.
• To incentivise the channel to push their products by providing higher margins and make the
product more affordable for consumers.
• To test the effectiveness of advertising and promotional efforts.

Target Market:
Segmentation –Middle-Class families
Targeting –Groups with a need to secure their electronic appliances like AC, TV,
Refrigerator etc.
Positioning – “The name you can trust”. A brand logo and tagline was embossed on all the
products, so ensure safety of their equipment.
Marketing strategy should focus on these middle-class population and the marketing mix
should be aimed at this set.
Increasing the availability in rural and semi urban areas in the country where power outages
and voltage fluctuations are imminent.
As the brand is already very well established in south, they should focus more on the northern
and eastern markets by leveraging the brand image.
 Marketing Strategy:
 Target eastern and northern markets in the country and aim for deeper market
penetration (currently states like Maharashtra and Delhi contribute to only 1% of
sales).
 Slightly modify external features so that it is better suited to consumer taste and
preferences. Make sure the variants offering is such that it fits the electric appliance.
 Slightly lower the price so that the brand can also have a competitive pricing.
 Provide better margins to dealers so that they push their products to consumers, ( their
closest competitor Capri offers more commission to dealers)
 Increasing the expenditure in advertising so that people become aware about their
product.
 To continue with their Outsourcing strategy as it results in less cost of production and
high quality.

Marketing Programs
 Positioning and Advertising – V-Guard should increase advertising expenditure and
position their invertors as unique from other competitors in terms of its high aesthetic
appeal, best-in-class after sales service and excellent performance in terms of Thermal
Overload Protection, Voltage Fluctuation Protection and Reliability.
 Pricing – V-Guard stabilizers are the most expensive stabilizers in the market. They
should decrease the price to increase their consumer reach.
 Distribution – V-Guard offers the highest compensation to its distributors as
compared to its competitors. They should ask the distributors to increase investment
in order to increase the consumer reach.
 Promotion – It has good promotional strategies in place which are highly appreciated
by the dealers as they have ranked the Promotional support offered by V-Guard as the
best compared to its competitors. So, V-Guard should continue with its current
promotional strategies.

Financial Plans:

  Below 300 litre refrigerator stabilizer   Above 300 litre refrigerator stabilizer
  V guard Capri Blue Bird Everest   V guard Capri Blue Bird Everest
MRP 1350 1050 1070 1030   2137 1837 1857 1817

Material cost 472.5 420 428 412   747.95 734.8 742.8 726.8
product cost (Overhead etc) 661.5 525 642 556.2   1046.95 918.5 1114.2 981.18
Distributor commission 108 52.5 85.6 72.1   170.96 91.85 148.56 127.19
Dealers commission 182.25 189 107 206   288.495 330.66 185.7 363.4
profit margin 236.25 157.5 96.3 82.4   373.975 275.55 167.13 145.36
  Since the relative cost of V-Guard is less as compared to its competitors, they should
continue to Outsource their production
 V-Guard offers much higher distributor commission than its competitors. They should hence
ask the distributors to increase their investment in order to reach more customers and
achieve higher penetration.
 Dealer commissions offered by V-Guard on the other hand are the least and have ranked low
by dealers in terms of commission. They should thus increase their dealer compensation in
order to motivate them to achieve higher sales.

Implementation Controls:
 V-Guard should focus more on increasing their sales in the North and East region of
the country as these are the regions where they have achieved minimum penetration.
 Stabilizers can be designed based on the consumer feedback on colour and design.
This will increase their aesthetic appeal.
 Stabilizers should be compatible with all the new and bestselling Refrigerators, TVs
and ACs.