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1. The solution for the first three questions will be in the form of a PPT while the
campaign will be in the form of a PDF or Video.
2. The presentation should NOT contain more than 8 slides (including the
Introduction and Thank You slide).
3. Submission details of the case solution:
a. Last date for submission is December 24, 2020; 11:59 PM
b. The nomenclature of the solution should be Marquity_TeamName
c. Solution has to be uploaded on Dare2Compete
4. Participants should not use the name or logo of their institute in the PPT deck.
5. No entries will be accepted after the deadline. Participants will not be allowed to
change their entries once submitted.
6. The teams will present their case-study solutions to the judges on an online
platform.
7. The time allotted for each presentation will be 8 minutes followed by 2 minutes of
Q&A session by the judges.
8. Teams who do not follow the rules and regulations at any stage of the event will
be disqualified. In case of any dispute, the decision of the judges and the
organizing committee will be final.
INTRODUCTION
Mrs. Nitu Sharma, the Brand Manager of SHIP had just returned from an hour-long
meeting with her supervisors, and her mind was revolving around the task that she
had been assigned. SHIP had recently roped in a market research agency to conduct
Computer Assisted Telephonic Interviews (CATI) and Computer Assisted Personal
Interviews (CAPI) with customers across the metro cities: Delhi, Mumbai, Bangalore,
and Kolkata. The immediate plan was to develop an understanding of customer
touchpoints in offline retail models for consumer electronics. This had to be done in
order to establish a transition from online retailing to offline store-based retailing.
The agenda of the meeting was clear, but her anxiety was also well-founded. The
proliferation of online market platforms has transformed the Indian consumer
electronics market. However, it was also true that store-based retailing has had high
volume potential in tier 2/3 cities and rural areas. Furthermore, physical stores'
perceived benefits, such as higher visibility, direct customer connectivity, product
sampling, and other intangible assets, had gained significant relevance. She had a
hundred different thoughts going around in her mind about whether the idea to go
offline would be feasible enough?
Founded in 2015 by Akash Gupta and Sameer Gupta in their family garage, SHIP
started as a consumer electronics start-up in Delhi. The company initially sold mobile
phones but soon diversified its product portfolio and added other consumer electronics
and appliances. In 2017, they started local manufacturing and selling under their
brand, SHIP. The company brands itself as a lifestyle brand dealing in fashionable
consumer electronics, with a high-volume presence in rural and urban cities.
The company has 75 members, with offices in Delhi, Mumbai, and Bangalore, and has
celebrity brand ambassadors on board, all this with a family of over 750,000 happy
customers. Entering the fourth year of their journey, SHIP's FY2019 revenues were
Rs 102 crores from Rs 27 crores in FY2017. Additionally, sales for the next five years
have been estimated at over Rs.700 crores.
The consumer electronics sector has seen the highest share in the total production of
electronic goods in India. The market was valued at INR 2,442.3 billion in 2019 and
has demonstrated a CAGR of 2.3% in 2015-2019.
The rise in disposable income, increased awareness, easy access, and changing
lifestyles have been the main drivers of consumer market growth. Additionally, the
policies and regulatory frameworks of the Indian government, such as the relaxation
of licensing rules, and the approval of 51% foreign direct investment (FDI) on many
products are some of the factors contributing to the massive consumer market growth.
According to the Department of Industry Promotion and Internal Trade, from April 2000
to March 2019, FDI's entry into the electronic sector stood at USD 2.36 billion.
The high production of electronics in the Indian market can be attributed to the urgent
need for advanced computers, cell phones, TVs, and security-related electronics. This
market situation allows manufacturers to keep abreast of the latest technology, as it
attracts ordinary consumers, and technological features play a significant role when
selling in high-priced showrooms.
In India, the TV industry reached USD 10.19 billion by 2017 and has been estimated
to reach USD 13.31 billion by 2021. Also, the demand for durables such as
refrigerators and other consumer appliances and electronics may increase in the
coming years in the rural market as the government plans to invest heavily in rural
electrification. As of 2018, India's washing machines, refrigerators, and air
conditioners are estimated at USD 1.09 billion, USD 3.03 billion, and USD 3.1 billion,
respectively.
Internet sales are mainly driven by the increased digital penetration in India. Global
System for Mobile Communications (GSMA) expects that by 2025, the total number
of internet users will reach 92 crores, creating e-commerce and m-commerce
momentum. Also, due to the influx of electronic gadgets, digital payments in India are
rising and have accounted for over 80% of online transactions. An increase in the
population of millennials and generation Z has also facilitated this significant growth.
One of the initial challenges faced by SHIP was convincing contract manufacturers in
China to produce small volumes, while the in-house team designed the product and
the packaging. Gupta recalls urging the Chinese manufacturers: "Please support us
now, we will order more later". The produce was then shipped to the Indian company
— where only a minimum inventory was maintained. The warehouse was located in
Delhi from where Amazon picked up packages for distribution. Between 2014 and
2016, the company worked as a distributor of the global audio brand, House of Marley
(that is, before formally launching SHIP in 2016).
SHIP's growth has also been driven by its distribution partnerships. Warehouses,
previously only in Delhi, were set up in Kolkata, Chennai, Pune, and Indore. SHIP
started selling its products on Flipkart, Myntra, Jabong, and PayTM Mall too. Besides
selling on these e-retail platforms, the consumer electronics company is now retailing
at Croma outlets, and testing shop-in-shop concepts to give potential buyers an
'immersive experience' of its products.
Many multi-brand electronics retailers have begun to provide discount mainly due to
the increase in competition from e-commerce retailers. Some of them are also
collaborating with various financial institutions to offer the customers low-cost EMIs
and flexibility in payment. Since there is a high price involved in electronics and
appliances, customers prefer to purchase through EMIs. To tackle the increased
competition in the market, store-based retailers offer interest-free EMIs by
collaborating with the finance companies. Customers these days want to touch and
feel the product for expensive electronics and consumer appliances before making the
purchase. Festive sales during Dussehra and Diwali, coupled with customer-focused
financing options, also work in favor of retailers.
Focus on tier-two and tier-three cities due to the increase in the rental cost
The escalating cost of real estate rents stimulates retailers to re-evaluate their store
expansion, strategy, sizing, and efficiency. They are shifting to cities where retailing is
less explored, and their brand presence is comparatively less prolific. Moreover, these
locations generally experience lower penetration of household appliances, particularly
refrigerators, washing machines, and air conditioners. The same is true of many
brands of smartphones that initially launched exclusively via e-commerce. Many are
now opening their stores, offering consumers the opportunity to experience the brands
before purchase, with tier-two and tier-three cities proving ideal locations. Given the
rising aspirations for such products, these cities could provide considerable
opportunity for electronics and appliance specialist retailers over the forecast period.
Reliance Digital from Reliance Retail remains the leading retail brand in electronic
retailers in 2019. The company is rapidly expanding its Jio stores, which are its smaller
store formats, through which the company sells Jio mobile phones as well as Jio
connectivity services. Since the launch of Jio mobile phones in 2017, the brand has
grown to become one of India's leading mobile phone companies in volume sales. The
growth of Jio mobile phones helps to propel the fortunes of Reliance Digital stores in
India.
Founded in 1967 by Nanu Gupta as a small TV showroom, Vijay Sales has grown to
operate over 100 stores in Maharashtra, Haryana, UP, Gujarata, Telangana, and
Andhra Pradesh. The company has a product range of 3500 electronic products. It
has been fairly active and resorted to organic and inorganic growth strategies. In 2019,
the company acquired a consumer durable retail store under the name TMC, and now
has rebranded it in the name of Vijay Sales. It also entered into partnership with
Hyderabad FC in December, 2020.
Customers also prefer to shop at multi-brand outlets, as they are attracted by brand
and product offerings at different price points in multiple brand outlets. This includes a
greater prominence given towards private label products, with store-based retailers
allocating more shelf space to private label. As a result, major multi-brand retailers
witnessed higher revenue generation from their stores than single-brand retailers. As
consumer expenditure on durables saw double-digit growth during the review period,
multi-brand electronics and appliance specialist retailers such as Croma and Reliance
Digital increased their outlet penetration to target a larger audience.
Earlier headphones used to come as a complimentary piece, which was free of cost,
with the mobile. Today’s generation owns many pairs of headphones for various
purposes like communication, travel, movies and audio playback. With the screen
getting more personal, there is a huge demand for personal devices. The related
accessory market including that of headphones is also growing. The pandemic which
has confined people to their home has actually increased the dependency on audio
devices for various activities.
“The consumer wants audio to be part of their lifestyle, especially after COVID-19.
Audio has become part of their lifestyle; they use headphones to study, watch videos
and exercise, enjoy home cinema, and work with video calls,” says the co-founder.
Additionally, COVID 19 has actually helped the sales grow as on account of the
pandemic, activities starting from work to workout were confined to people’s homes.
Accounting this surge, the sale of SHIP products skyrocketed. The founders of SHIP
claim to be selling 15000 units per day during the pandemic. SHIP also registered a
108.8 % growth in terms of revenue in FY 2020.
The brand has so far remained online-centric but after capturing a dominating share
of the online market, the company is taking offline seriously now. Akash says the offline
success of previously online-only brands such as Xiaomi shows that millennials are
still buying offline. "We have hired a team now, only to manage offline sales. Croma
sales are picking up for us now," says Gupta. According to him, while offline and online
commissions are similar and in the range of 30-40%, there are added costs involved
in online distribution. "The spending on shipping and marketing increases the cost,
which you don't have to incur if you are selling offline," he says.
PROBLEM STATEMENT
● Devise a strategic marketing plan which shall envision SHIP's targets and reflect
the industry's essence.
● What are the points that the plan should cover to improve the in-store experience
for the customers?
● What are the key factors that should be considered to establish a balance between
online and offline modes without cannibalizing each other?
● Design a marketing campaign for the offline retail store. The campaign shall include
a video that can be launched across prime-time TV slots and social media. Also,
provide details of the campaign in the PPT presentation.
EXHIBIT 3
BRAND % SHARE
RELIANCE DIGITAL 8.5
CROMA 1.4
VIJAY SALES 1.3
SAMSUNG PLAZA 0.8
LG SHOPPE 0.6
VIVEK'S 0.2
NEXT 0.1
SPICE HOTSPOT 0.1
UNIVER-CELL 0.1
SONY CENTRE 0.1
E-ZONE 0.0
VASANTH & CO 0.0
ACER MALL 0.0
OTHERS 86.6