ON E

Creating & Communicating value to Customers

The art and science of
Brought to this classroom by Originally scripted by

Easwar Krishna Iyer

Great Lakes Institute of Management

Philip Kotler
Kellogg School of Management

Communicating value

Creating value

Chapter 3

Gathering Information & Scanning the Environment

1. Importance of Information and MIS 2. Internal MIS Some literature 1. Level 01 - Customers calls this as the a. Order to Payment Cycle b. Sales Information System 3C Analysis c. Databases, warehousing [Kotler doesnt] d. Market Intelligence System 2. Level 02 - Competitors 1. Ways in which Competition can come 2. Ways to get Competitor Information 3. Case Study 03 Tata Motors Tata Ace 4. External MIS [Knowing Climate] 1. Level 03 Market 1. Attractiveness Some other 2. Profitability etc literature adds 2. Level 04 - Environment Company & 1. Demographic Environment Collaborators 2. Economic Environment also into this list 3. Socio-Cultural Environment and calls it the 4. Natural Environment 5. Technological Environment 6. Political-Legal Environment 5C Analysis 5. Case Study 05 Strategic Intent Of Marketing
[Again Kotler doesnt]

Of Marketing

Every step in marketing involves complicated decisions

Segmentation Market Definition, Choice of Variable etc Targeting Segment Attractiveness, Segment Profitability,
Internal Core Competence etc Category definition etc

Positioning Point of Parity [POP], Point of Difference [POD], Product Strategy Make or buy, innovate or adapt, levels of
differentiation, product length, width etc

Pricing Strategy Skimming Vs. penetration, line stretching Vs.

line filling, Starting point Cost Vs. Market intermediaries, direct Vs. Channel sales Mix analysis for maximum ROI etc

Placing Strategy Push Vs. Pull Strategy, No. of levels of

Promo Strategy Advertisement Vs. promotion budgets, Media

Marketing Is critically linked to Decision Making

Make or Buy Innovate or Adapt Channel or Direct Cost + or Market Minus Bat or Field

Decisions Are driven by power of Information

Measurability Latent consumer needs Future Growth patterns Competitor Moves Pitch, Weather

Information Is a function of Probability For a Certain Event P=1 &

For an Impossible Event

Thus any Marketing Decision is driven by An assorted aggregate of Uncertain Information Each of which has an A-priori Probabilistic Assumption & a A-posteriori Data-driven Verification

Every Decision has its own Risk-Benefit Tradeoff Most decisions have an Equally Viable Alternative Given such Dynamic Boundary Conditions, how do you decide?

Marketing Information System

Continuing

Marketing Information System

Customer Related 1. 2. 3. 4. The Order to Payment Cycle Sales Information System Databases, Data warehousing Market Intelligence System

Environment Related 1. 2. 3. 4. 5. 6. Demographic Environment Economic Environment Socio-Cultural Environment Natural Environment Technological Environment Political-Legal Environment

Competitor Related 1. 2. Ways in which Competition can come Ways to get Competitor Information

For defining Who Your Potential Customers are . . . You have to first define Which Your Potential Market is . . . When we Aggregate

Individual customers Are People

...Aggregate Customers Are

Route 01 : Order

to Payment Cycle

Results Data OR Transactional Data Data that links Sales, Channel and Customer

Invoicing Inventory Management Shipping Billing Payments

O to P cycle is the heart of the any firms internal record system

Customer Profitability Analysis

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 1000 900 700 400 150 100 90 75 40 0 -50 -75 -90 -120 -250 -400 -700 -1200 1000 1900 2600 3000 3150 3250 3340 3415 3455 3455 3405 3330 3240 3120 2870 2470 1770 570

In any Business - For reasons that we will see later There will be 3 types of customers Individually From the Profitable Profitability point of view
Neither here nor there
C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18

Total Final Profit

Individually Loss making

Customer Profitability Analysis

Customers :
4000 3500 3000 2500 2000 1500 1000 500 0 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18

Profit & Loss Leaders

Why have the whites & the maroons when we can get away with the Greens Only?

Neither profit nor loss

Total Final Profit

Individually Profitable

Individually Loss making

Customer Profitability Analysis

80

What is the significance of the

70 60 50 40 30 20 10 0

AM ore R ealistic P lot G reen & W hite O nly

Mandatory sale that needs to happen to mop up fixed cost with minimal individual contribution [Faster way to reach breakeven] More or less any production line product Currently heavily discounted customers. Once they fall in for the product / service, the price point can be slowly hiked up [All early birdcompanies which sell direct +schemes direct will be for profit For type offers] Pre / Post paid channel, [Green ones], while the channel will be for volumes [white ones] Say a shirt maker who is also into direct retail In some cases, production can be made only in lot quantities. The excess has to be sold at no profit no loss such that the remaining ones make profit [ Annual Subscriptions HBR type]

9 C 1 0 C 1 1 C 1 2 C 1 3 C 1 4 C 1 5 C 1 6 C 1 7 C 1 8 C 1 9 C 2 0 C 2 1 C 2 2

7 C

C 1

C 2

C 3

Customer Profitability Analysis

70 60 50 What is the 40 significance 30 20 of the 10 0 -10 -20 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14

2 Major "Lossy" Customers

Maroons are Loss leaders - Prestigious customers, but will not pay the right price But if you do not have such a customer in your client list, you lose credibility If the above chart is that of P&G, then one of the maroon customers is Wal mart. Other examples: Major Government orders Sale to educational / charitable institutions Bad debt sales [Not a planned / designed maroon, but an incidental maroon]

Customer Profitability Analysis

Can we avoid the maroons & whites & live only with the greens? NO
The real profitable ones (green) will come only after acquiring white & maroon ones. Drop the maroons & whites - the green will also disappear!!
Customers :
4000

Profit & Loss Leaders

Maroons bring in credibility as a top notch vendor

3500 3000 2500 2000 1500

White brings in scale / volumes

1000 500 0 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18

Customer Profitability Analysis

C1 C2 C3 C4 C5 C6 C7 C8 C9 C10
Prof it

10 10 10 10 5 5 5 0 0 -10

C.P. Cash 20 10 in

60 50 40 30 20 10 0 -10 -20 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10

20 30 40 45 50 55 55 55 45

40 60 80 95 110 125 135 145 145

Route 02 : Sales

Information System

Market data OR Demand data Connects demand, sales & inventory

Yesterdays demand data leads to todays sales data Todays demand data leads to tomorrows sales data Concept of Bullwhip RFID & Retail information management Hand-held billing devices and Sales management This cycle talks about Need sensing / demand sensing / inventory readiness All pre order Route # 1 was post order delivery and payment management Route # 2 is pre - order

Demand Forecasting
Approach 01: Time

1. Moving Average Method 2. Weighted Moving Average Method 3. Exponential Smoothening Method 4. Trend Projection Method

Series Method

4 Components of Time Series

1. Trend 2. Seasonality 3. Cyclicity

Basic Assumption
Past is a good guide to the future

4. Random Variations

Demand Forecasting
Approach 02: Causal

Sales of Automobiles
(y) is driven by 1. Real Disposable Income 2. Pricing of automobiles 3. Amount of advertisement 4. Cycle of economy 5. Development of roads

Method

Agricultural yield to
1. 2. 3. 4. 5. 6. 7. 8. the consuming markets (y) Rainfall Acreage of cultivation Seed quality Soil quality Fertilizer consumption Product perishability Warehousing facilities Supply Chain Efficiency

y = a + b1x1 + b2x2 + b3x3 + . Basic Assumption

Dependence on multiple variables Causes Demand

Route 03 : Databases,

Data Warehousing, Data Mining

Warehoused data OR Non-live data Sales information is dynamic Warehoused information is relatively static
Data Base

Customer
Database
Purchase recency Purchase frequency Ave. purchase value

Product
Database
Geographic acceptance Demographic acceptance Price point of ave. sale

Salesperson
Database

Cross Tabulation for deeper insights

Suspects Prospects Lead funnel ratios Credit pattern

Cross Tabulation [Crosstabs]

Real Estate Retail Ready mades

PGWPM

Mom-Pop Vs. Retail

Route 04 : The

Market Intelligence System

Happenings Data OR Interactional Data Books, journals, newspapers data To get it To get it Informal conversations with stakeholders e-data via social networking sites e-mails, blogs etc Sales force with ear on ground Intermediaries trained to pass information Customer advisory panels / help desks Government data sources [Secondary] Purchase info from professional agencies

Results Data Market data

OR

Transactional Data

OR Demand data OR Non-live data

Warehoused data

Happenings Data OR Interactional Data

In Customer Analysis we try to define the broadest possible customer space In Competitor Analysis we do a similar broad angle Competitors Competitor Space hunt for all Competitors
Pepsi, Thums Up + Miranda, Fanta, Sprite . + Frooti, Aapy, Real, Tropicana + Mineral Water Cola Market Carbonated Drinks Market Chilled Soft Drinks Market Thirst quencher Market Alcoholic + Non Beverages Market Starbucks doesnt vend coffee, they sell a lifestyle. They have eaten into the US cola market !!!

For

COKE

+ All forms of Beer With all these definitions, Starbucks still does not come because

The Competition is

Coke is in the cluttered Red Ocean market of Beverages Starbucks is in the Blue Ocean market of lifestyle

But Viewing Only Current Competitive Space Will be the ULTIMATE

Open your eyes towards

For Air Deccan, the First Class Railway Traveller is the target market

FIVE Axes/ Parameters for Analyzing 1. Market Expansion Potential Competitor Space

ost obvious source in the Potential Competitor Space

opening of FDI give provision for new MNC entrants

ai expanding to Indian Market has hit Marutis market share in the lower

arts India expansion [The Mittal way] will affect the Pantaloons of the pla pl

ational Insurance companies coming to India

2. Product Expansion

isting conglomerates on a related or unrelated diversification

hen it is unrelated, the surprise element is higher

a Coming to Salt market, Tea Market for that matter any new market

ul getting into beverages market [Pan Indian Market Taste of India Tag

FIVE Axes/ Parameters for Analyzing 3. Backward Integration Potential Competitor Space

Customer Becoming Competitor

Auto [Customer]

Auto Major buying out an Ancillary A pharma company buying a bottle unit Retailers who start their private labelAncillary [Supplier]

4. Forward Integration

plier can become a Competitor

el - The eternal chip supplier - enters market with Intel computers,

at will happen to Intel Inside computers like Compaq, HP, DELL etc?

e label retail [Arrow, Louis Philippe] Manufacturer moving forward to Re

FIVE Axes/ Parameters for Analyzing Potential Competitor Space

5. Mergers & Acquisitions

Synergistic M&A suddenly bring in new & powerful competitors

Vodafone acquiring Hutch One of the biggest global Telecom companies with huge R&D and CAPEX strength sets foot in India DSL as competitor & HCL as competitor in IT product market [HCL acquired DSL] for product companies like Polaris. Any pure market share enhancing M&As [One single vendor having share of x+y is any day more powerful than 2 independent vendors with shares of x & y respectively]

We have so far looked at how Competition can come Let us now look at how to get Competitor Info Independent Goods & services review forums Auto magazines [for automobiles], Pagalguy.com [for BSchools], third party rating agencies [Like Outlook ratings] Distributor / Sales Agent Feedback sites Open sites with 3rd party access. Not very common in India Combo sites offering customer views & expert opinions High tech products like Cisco, Fin. Services products like Oracle Finance Public Blogs [Difficult to authenticate. There could be planted blogs also]

Do a cross tab between functional market segments and customer market segments. Do an OT analysis.

Outsourcing would allow Tata Motors to convert fixed cost of production to variable cost which would be beneficial in a market turndown - Explain

What will be the effect of Tata Motors new launch Tata NANO- on Tata Ace

Explain the Pyramid segmentation of Page # 18 for some other product / industry.

1. 2. 3. 4. 5. 6.

Demographic Economic Socio-cultural Natural Technological Political-Legal

Attractiveness, Profitability, Growth, Costs, Trends

Environment

Competitors

Present Competition Potential Competition

Customers

O to P cycle Data warehousing Market intelligence etc

Space just outside customers & Competitors [Not covered by Kotler] Customer Space Competitor Space

Attractiveness Profitability Growth Potential Cost Structure Trends / Fads Success Factors

Where customer-competitor spaces converge The space beyond individual firms The space with its own generic dynamics

Attractivene ss
Actual & Potential Market size Hostility in market Entry / Exit barriers Current Economy cycle CAPEX / OPEX requirement

Profitability
Long term & Short term ROI Intensity of competition Bargaining power of buyers / suppliers Presence of sub markets

Growth Potential
PDLC phase (the BCG picture) Cash flow management + Strategic SBU priority from an internal point of view

Cost Structure
Criticality of Fixed cost for CAPEX / OPEX breakeven Criticality of Variable cost for Pricing &

Trends / Fads
Long term, buying driven, customer driven TRENDS Short term, notion driven, product driven - FADS

Success Factors
Pre-ownership of assets and / or competencies Current synergies in terms of capacities, S&D force, technology know how etc Marginal costing skills by

No.

Dimension of

Current Examples of Indian Industries High Real Estate Fad Markets [Dress, Film Music etc] Cosmetics
(Post twin success of Ash / Sush)

Market Analysis
1 Long Term ROI 2 Short Term ROI 3 Actual Market Size 4 Potential Market Size 5 Market Growth 6 Market Profitability 7 Cost Structure 8 Trends / Dynamics 9 Threat Perceptions

Low Spec. Stock Markets High CAPEX industries [Shipping, Mining] Fax, Pagers, Manual typewriter, Housewives Ski Equipment, French / European movies Fountain pens Tyre Industry, L.E. Education Lower end Service Ind.
[Low Entry / Exit Barriers]

Electric Cars, RTE food, Foreign Tour Operators Mobile Phone, Plasma TV Pharma, IT, H.E. Education Capex intensive
[High Entry / Exit Barriers]

Technology Intensive Airlines, Cigarettes

Old Economy Industries Restaurant, Cloth Fabric Industry

Further fine-tuning the picture Taking Market Parameters in TWOS

Does High Growth Automatically Mean High Profitability?

No. In an Infrastructure boom [say current China], there is tremendous growth in Cement & Steel Industry. But that does not make those industries suddenly more profitable [In margin terms]. Profits will increase [because on volumes] but not profitability Again, high growth industries are highly volatile / hostile industries. Hence price undercutting for gaining market share is common. This can reduce profitability. E.g.: Computer Hardware, 100 cc 2 wheeler market, Lower end handset market

Does the vice versa hold good? Low growth means Low Profitability?

Again Not necessarily. Cosmetic Surgery will no day become a high growth market. It will be a peripheral market. But profits huge. Utilities Market Not much growth, but steady profits

Market Parameters in Twos continued

High Threat Perceptions do they stifle Market Growth?

It Depends. For the Cigarette industry yes. The regulatory threat that the product is facing worldwide will eventually stifle its market itself But not so for Airline industry. Threat is Profitability driven & Risk driven. But Market Growth is Disposable income driven & Lifestyle driven. Hence booming market despite high threat perceptions

Are long term & Short term returns two different ball games? All industries do not assure long term & short term ROI Both Long term & Short term : Coca Cola -Market / brand leadership for decades, beer / alcohols , IT [In the present Indian context] More of long term : Real Estate, Shipping, Pharma, Petrochem More of short term : All fads, film stars (particularly heroine) careers, designer wear, microprocessor chip

Customer Space

+
Competitor Space

+
Market Space

1. 2. 3. 4. 5. 6.

Demographic Economic Socio-cultural Natural Technological Politico-legal

The space that is JUST ONE STEP removed from the Market A space with immediate business relevance The space where relevant scenarios unfold Singur, Nandigram, Telecom & FDI, BPO & Cultural shock, Cyber crime,
Obama & Presidency, Chinese learning English, Assault of Indian students in Australia, France and Purdah Comments of French President etc - YES

Before we look at each force separately Let us see whether they have a cumulative interactive effect
Explosive population growth [Demographic] Leads to resource depletion & pollution [Natural] Hence consumers ask for stringent laws [Political Legal] This stimulates new products/solutions ... [Technological] Which, if they are affordable [Economical] May change attitudes & behavior [Socio Cultural]

Today . . .
HUF is almost gone Family sizes have become small More of working wives Kids have seen readymade garments There is no time in todays world

15 20 years back
India had large families (mostly undivided) Our disposable incomes were lower Families always had a housewife Kids were less finicky on what they wore Home made dresses were accepted

Singers market went for a TOSS!!

Drivers
1.

Population growth [Global, national and regional]

1. High growth markets with low purchasing power [Africa, parts of Latin America] 2. High growth markets with new found purchasing power [India, SE Asia] 3. Low growth markets with high purchasing power [Western Europe]

2.

Population age mix

1. One extreme Mexico, India etc very young population [Milk, primary education, toys, chocolates, school supplies etc] 2. Other extreme, Japan, China aging population [Healthcare, insurance, pharma, dietary food products etc]

3.

Population Literacy levels

1. Literacy and earning power [gender, earning power, purchasing power] 2. Literacy and type of jobs [unskilled, semi-skilled, skilled, knowledge, expertise]

1. Swatch watches & Youth 2. Bluetooth, camera, FM radio, MP3 player, gaming etc inside mobiles are youth 3. E-mail access, data storage, GPS positioning etc inside mobile for the traveling professional 4. Low denomination recharge coupons for the penny conscious market 5. Hinglish music channels like MTV and Channel V for the urban youth 6. Valentines day cards for the new promiscuous urbanite

1. Scooters [partly demographic, partly social-cultural] 2. Typewriters [partly demographic, partly technology] 3. Fountain pens 4. Big size but non-luxury houses 5. Half Sari [Davani], pavadai-blouse etc the teen south Indian girls ethnic dress landscape [Again partly demographic, partly cultural]

Demographic Landscape and India China had a demographic dividend in the 1980s 40% of its population Advantage of age. Productivity boomed with double digit was less than 25 years
GDP growth.

But now the same population has started aging [by 2020, 20% of Chinese will be over 60. This translates to more pension funds, less productivity, more healthcare, less buying power]

India is going to start the same cycle. 40% of us are less than 25 The Saavariya age When BRIC story started there were 4 contenders. In a decade it became
Chindia. 2 fell on the way. Another decade down will it be ONLY INDIA ?

1. Current Income [individual and aggregate] / Disposable Income 2. Prices / Price Range / Outliers in Price Range 3. Credit / Availability as well as culture of credit buys 4. Saving tendency [again individual and aggregate] 5. GDP / a holistic indicator of purchasing power / PPP 6. Consumerism / has got elements of demographic & Socio-cultural 7. Inflation 8. Unemployment 9. Liquidity 10.Discretionary goods spending

Prices Go up Inflation

Govt Concerned Vote Banks

RBI raises Interest Rate Higher Cost of Borrowings Liquidity Squeeze Demand Falls

Landscap e

Interest Rates lowered Liquidity Returns

Govt Concerned Recession Trend Fall in Industrial Growth Vote Banks Unemployment Markets fall / FII pullout

Markets start again becoming buoyant FDI / FII / Demand all return

Prices Again start going up Govt Concerned Inflation Vote Banks

Current Slowdown

Laid the foundations as Indias FM yesterday . . . . . . Consolidating the gains as our PM today
1000 900 800 700 600 500 400 300 200 100 0 1980-1981 1982-1983 1984-1985 1988-1989 1990-1991 1986-1987
% th Rate of 3 Hindu Grow
: % 03 20 f 5-6 o t o te 91 19 h Ra t ow Gr

30 billion USD

[1980]

100 billion USD [1991] TRILLION + USD [Today]

1991
117

Slowdown due to 2002-03 Recession

1992-1993

1996-1997

1998-1999

2000-2001

2002-2003

2006-2007

1994-1995

2004-2005

The Point of Inflection

Cur re is in nt Gro ch wt Do ing to h Rat ubl e w e D ards igit

Indian GDP

1028

100 90 80 70 60 50 40 30 20 10

100
Significantly faster GDP Growth for India Vis-a-vis USA

Normalized Data wrt Current GDP

70

47

21 15 3 1985 1990 1995 2000 2005 2010

0 1980

India
33 Times in 25 years 6 times after Economic Liberalization Doubled after 2000

100 90 80 70 60 50 40 30 20 10 0 1980
1981

Ratio of US GDP to Indian GDP in the last 25 years

81 Times

GDP

GDP
1991

39 Times
2001

20 Times

2006

13 Times

1985

1990

1995

2000

2005

2010

A peculiar anomaly in Salwar Prices & Working Women

Housewives need lesser numbers of dresses BUT at higher price points with lots of ostentation Working women need more numbers of dresses BUT at lower price points with subdued colors & subtlety

One tends to guess just the opposite!!

 Kappa-meen [Kerala], jhunka-bakar [Maharashtra], Dokla [Gujarat],

Kuzhi- paniyaram [TN] are slowly getting eased off the menus They are getting replaced with Pizza Noodle Burger Pasta French Fries Sandwiches BF Cereals across the country Traditional Indian wear is giving way to Western wear Indian Music is giving way to Western Music African Music, Thai Food, Italian Dress, French perfume, Chinese dolls

Valentines Day & BJP / RSS / Bajrang Dals Moral Policing Tamil Cables blackout of Hindi Channels [ZEE, Star etc] TV Channel censorship by Sushma Suraj Surrogate Alcohol Ads Islamic banking

 Coca Cola and Plachimada problem Mavoor Rayons (Birla) and Chaliyar River polution Euro 2 norms, emission and Auto Industry Refrigeration industry and ozone layer depletion and global warming Non-renewable energy sources Five levels of Environment friendly consumers True Blue Greens [30%] Perpetually committed Green back Greens [10%] More likely to choose green Sprouts [26%] Fence sitters. Green, if it suits them Grousers [15%] Individual behavior cannot change environment Apathetics [18%] Dont care about environment

Disruptive emergence of

new technology can change existing business dynamics

The Impact cuts across businesses The Impact of technology can be

positive OR negative depending upon whose business we are looking at

Positive Impact of Technology RFID / bar coding & Retail [Automatic Inventory Management] Laser technology & eye surgery Webcam, Internet telephony & long distance spouse calls Satellite imaging and crop forecasting [Commodities market] Laptops + mobiles The anytime, anywhere, 24/7 office

Negative Impact of Technology DTH and its potential impact on Cable TV operators ATM & fall in banking recruitment I-Banking, E-banking etc and its potential for cyber related crime e-commerce Vs. physical space driven commerce [Amazon. COM] i-pod is killing walkman, DVD is killing CD, CD killed Floppy etc

 Regulations can
make or mar entire industries change the competitive landscape & alter profitability (increase or decrease) In todays globalized environment, impact of regulations is also global Sub prime crisis erupts in far away (?) USA Fed [US Federal reserve] responds with interest rate cut Regulatory Dollar weakens against rupee following rate cut Indian IMPEX markets profitability affected !!! Driver is US regulation

More examples of regulatory measures with business impact are: Prohibition FDI [opening up as well as changing cap] Steep tax increase YOY on all tobacco related products Interoperability of Set top boxes for all DTH providers AICTE / UGC approval for new courses, foreign tie ups etc

Assignment 1st of 10 [3 marks]

1. Take 5 of the 6 external environments [avoid Natural Environment] 2. For each environment, give two TYPICAL examples 1. An Industry / product which has gained / benefited because of a change on that environment 2. An industry / product that has lost / suffered because of some other change in that environment 3. The assignment would be a 5 page assignment [Each environ one page] 4. Page 01 D+ and D-, Page 2 E+ and E-, Page 3 S+ and S- etc 5. Give only one example (+ as well as -) for each 6. Justify the reasoning in about 3-4 bulleted points 7. Purely a team submission. In the book, 1. 1st page Team Name and team members name 2. 3rd page Pagination for all 10 assignments [Assignment title and page no.] 3. From page 5, assignment No. 01 8. Usage of my examples or Kotler examples will fetch ZERO marks

Assignment 1st of 10 [3 marks] How it should look

Gainer : ABC Reasons 1. 2. 3. 4.

Loser : XYZ Reasons 1. 2. 3. 4.

Assignment 2nd of 10 [3 marks] If you carefully examine the positions taken by two leading strategists of the 60s, you will observe a Stark Contrast. Hidden in that contrast would be some Subtle Commonalities too. The strategists in mention are: 1.Theodore Levitt - Marketing Myopia 2.Igor Ansoff - Ansoff Grid Discuss the contrasts and the commonalities in brief [Not more than 1 page each]

Assignment 3rd of 10 [3 marks] Refer Case Study # 4 : The 3 Idiots Case

1. Demographic 2. Economic 3. Socio-cultural 4. Natural 5. Technological 6. Politico-legal

Correlate the case with the 6 Environments that we just saw. Which 2 environs is Aamir using?

Generate a 2 page note - one for each environment - as applicable to the 3 idiots case

What does CKP mean by Changing Terms of Engagement? Give own as well as case examples

Surrender becomes inevitable Discuss the Honda Vs. Harley Davidson case. Can you think of any Indian examples?

Examples of Change

Terms of Engagement

Case 05

CKP

Military DELL

Guerilla Tactics [Vietnam] Suicide Squads / Civilians as Front end [LTTE] Non-retaliation [Mahatma Gandhi] No Dealer / retailer Network No installments Only Cash & Carry Only e-booking No investment in stocking No investment in costly space with charges for rent, utilities, salaries 24 / 7 access Extensive catalog information with abstracts Home delivery No Consumables / Zero consumable cost Only initial investment, no running costs Superior Quality Amenable to post shoot processing [color, brightness, contrast] Immediate replays / on the spot corrections Same equipment can take stills & Video shoots

Amazon. COM Digicam

With the Right Strategic Intent -

Surrender becomes Inevitable

Unseen Strategic Intent
Honda surreptitiously moving into US market with 50 cc motor bikes when they had the BIG 4 wheeler market in mind

Case 05

CKP

Underestimated Resourcefulness

Unconventional Entry Tactics

Opens up in a small niche area [product or market] which is not prominent. Actually company is searching for Loose Bricks

Competitive Surprise Partial Response

Drastically cut costs Outsource Sudden Quality drives Increase Ad noise Increase Capacities Roll back prices

Catch-up Trap Lost Battles

Incumbent goes for Market flooding & Kamikaze pricing Erosion of Market share

Turnaround Strategies Divestment Plant Closures

Sense of Inevitability
The Harley Davidson Route

Retreat & Exit

Surrender becomes Inevitable

A closer home Example @ PGPM Term 05: The Last Empty Rhetoric Lost Battles

The Last 3 terms in Campus

Sau saal pahele, muche tum se pyaar tha (2) Aaj bhi hai aur kal bhi rahega
Sense of Inevitability But the writing is already there on the wall Term 06: The First Pinch of Doubt

Imtihah ho gaye intezar ki, hai na kuch khabar mere yaar ki Intezar ki..
Retreat & Exit Fight, Negotiate or Surrender Term 07: The Final Surrender

Pather ke sanam, tuche ham ne, mohabaat ka, And then maana, kahin Khudathey happily get married bhool huyi
(To

someone else!!!)

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