Marketing Mix Development Approach for a Car Security System To propose a marketing mix for XYZ Security Systems, a sister company of ABC

To propose a marketing mix for XYZ Security Systems, a sister company of ABC

Marketing Mix Summary Product Two need segments: security & convenience Need gap: No products tailor-made for the convenience segment Gaps to be filled by Model 50 & Model 100 Performance issues with existing products gives XYZ an edge Installation critical to performance. Installer’s training levels/willingness uncertain Price Within a given range the buyer price sensitivity is low Most of the buyers fall in the price segment:‘Whatevers’ Establishing functionality provides an opportunity to increase brand loyalty Skimming Pricing : Model 300 & other high end variants Models build aspiration, become benchmarks of functionality Penetration pricing for Model 50, 100. Cannibalize on sales of alarm systems Competitive Pricing for Model 200

Product

Two need segments: security & convenience

Need gap: No products tailor-made for the convenience segment

Gaps to be filled by Model 50 & Model 100

Performance issues with existing products gives XYZ an edge

Installation critical to performance. Installer’s training levels/willingness uncertain

Price

Within a given range the buyer price sensitivity is low

Most of the buyers fall in the price segment:‘Whatevers’

Establishing functionality provides an opportunity to increase brand loyalty

Skimming Pricing : Model 300 & other high end variants

Models build aspiration, become benchmarks of functionality

Penetration pricing for Model 50, 100. Cannibalize on sales of alarm systems

Competitive Pricing for Model 200

Marketing Mix Summary Promotion Consumer Truth: I yearn for something which is truly secure & reliable in this insecure, unreliable world Brand Personality: Brand to be embodied as a personal car-guard Borrows from the “Bodyguard” platform that epitomizes reliable security ‘ Security’ platform has not been appropriated by any other brand Platform of security can be extended to home security system etc. Phase 1 to communication to build awareness, Phase 2 to build brand image PR, POPs, Press & Outdoor Ads , Internet & Events to play a role in communication Distribution Skeleton of distributor management control system does not exist. Little attempt in rationalizing territories & performance management Existing distributors unhappy with short term distributor management approach Network of accessory distributors independent to spare parts. Unlike spare parts, accessory is a ‘Push’ product. Recommended Distribution Option : XYZ Exclusive

Promotion

Consumer Truth: I yearn for something which is truly secure & reliable in this insecure, unreliable world

Brand Personality: Brand to be embodied as a personal car-guard

Borrows from the “Bodyguard” platform that epitomizes reliable security

‘ Security’ platform has not been appropriated by any other brand

Platform of security can be extended to home security system etc.

Phase 1 to communication to build awareness, Phase 2 to build brand image

PR, POPs, Press & Outdoor Ads , Internet & Events to play a role in communication

Distribution

Skeleton of distributor management control system does not exist.

Little attempt in rationalizing territories & performance management

Existing distributors unhappy with short term distributor management approach

Network of accessory distributors independent to spare parts. Unlike spare parts, accessory is a ‘Push’ product.

Recommended Distribution Option : XYZ Exclusive

From Products to Brands

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Augmented Product Need Segments

Augmented

Product

Need Segments

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Need Segments Two Segments Current Alignment Need Gaps XYZ Need Alignment

Need Segments

Two Segments

Current Alignment

Need Gaps

XYZ Need Alignment

Security Need Segment Articulating “ Even if my car is robbed, I want to be sure that it was not robbed due to my carelessness or lack of efforts on my part” “ A smart thief can get away with the most secure systems. But I have to make it tough for him” Actually Saying I want a security system that actually works

Articulating

“ Even if my car is robbed, I want to be sure that it was not robbed due to my carelessness or lack of efforts on my part”

“ A smart thief can get away with the most secure systems. But I have to make it tough for him”

Actually Saying

I want a security system that actually works

Convenience Need Segment Articulating “ I don’t want to manually lock every door. I just want to do it centrally” “ My young brother simply loves pressing the remote buttons.He loves showing off almost as if he is a James Bond. You should look at the tesshan (style)” Actually Saying I don’t want a security system. I only want central locking Convenience of of central locking, the remote adds an element of style

Articulating

“ I don’t want to manually lock every door. I just want to do it centrally”

“ My young brother simply loves pressing the remote buttons.He loves showing off almost as if he is a James Bond. You should look at the tesshan (style)”

Actually Saying

I don’t want a security system. I only want central locking

Current Need Alignment Alignment to Security Segment Existing products are the alarm system & security system. Products target the security need segment customers No alarm/security system targeted at cars with central locks “ If a guy has central locking, I give him a rebate of 400-500 Rs”(Prakash Motors) Consumers belonging to the convenience need segment are being sold the alarm/security system instead of a central locking system “ I don’t have a remote central locking system. So to the customers I sell the alarm system”(Preet Motors) “ I have heard that Silicon has a central locking system that does not have a remote. I sell only Piranha”(Classic Motors) “ I think a remote central locking will sell. Most of my customers want that” (Classic Motors)

Alignment to Security Segment

Existing products are the alarm system & security system. Products target the security need segment customers

No alarm/security system targeted at cars with central locks

“ If a guy has central locking, I give him a rebate of 400-500 Rs”(Prakash Motors)

Consumers belonging to the convenience need segment are being sold the alarm/security system instead of a central locking system

“ I don’t have a remote central locking system. So to the customers I sell the alarm system”(Preet Motors)

“ I have heard that Silicon has a central locking system that does not have a remote. I sell only Piranha”(Classic Motors)

“ I think a remote central locking will sell. Most of my customers want that” (Classic Motors)

Need Gaps No products tailor-made for the convenience segment. Customization absent in existing products Customers What she wants (Usually) What she gets (Usually) I want a key that can lock all my doors Manual Central Locking Alarm System I want a cool remote to lock all my doors Remote Central Locking Alarm System I have a central lock.I want a security system Alarm System without Actuator package( worth Rs. 1200) Alarm System with a discount of Rs 300-400 I want a security system. Not the hi-fi system An Alarm System Security System

XYZ Core Products Manual Central Locking System - Model 50 Lock/unlock all doors, aligned to status of driver’s door. Remote Central Locking System – Model 100. Remote control capability to manual central locking Car Alarm System – Model 200 Special Door, trunk and bonnet switches are connected to the 200 control unit. Siren sound if the vehicle is tampered with Car Security System – Model 300 Immobilizes the vehicle in addition to the siren sounding an alarm in case of intrusion.

Manual Central Locking System - Model 50

Lock/unlock all doors, aligned to status of driver’s door.

Remote Central Locking System – Model 100.

Remote control capability to manual central locking

Car Alarm System – Model 200

Special Door, trunk and bonnet switches are connected to the 200 control unit.

Siren sound if the vehicle is tampered with

Car Security System – Model 300

Immobilizes the vehicle in addition to the siren sounding an alarm in case of intrusion.

XYZ Need Alignment Convenience Need Segment: Model 50, Model 100 Security Need Segment:Model 200, Model 300

Convenience Need Segment: Model 50, Model 100

Security Need Segment:Model 200, Model 300

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Augmented Product Core Product Product Delivery After Sales Augmented Product

Augmented

Product

Core Product

Product Delivery

After Sales

Augmented Product

Always listen to the market

Feedback of Existing Products Accessory Retailer Feedback on Core Product Motor problems “ The motor seems to conk off.This happens in around 5-10% of cases”(Prakash Motors) “ Most of the complaints that I get are motor related”(Preet Motors) Remote related problems “ I get frequent complaints of remote not working. Sometimes the remote range is a problem. One has to go very close to the car”(Classic Motors ) “ Often the remote buttons have to be pressed hard. Sometimes the light when pressing the button fails to light off”(Prakash Motors) Quality is a factor “ I think Silicon products are better because it is an ISO 9002 company”( Prakash Motors) Performance/Quality problems with existing products.

Accessory Retailer Feedback on Core Product

Motor problems

“ The motor seems to conk off.This happens in around 5-10% of cases”(Prakash Motors)

“ Most of the complaints that I get are motor related”(Preet Motors)

Remote related problems

“ I get frequent complaints of remote not working. Sometimes the remote range is a problem. One has to go very close to the car”(Classic Motors )

“ Often the remote buttons have to be pressed hard. Sometimes the light when pressing the button fails to light off”(Prakash Motors)

Quality is a factor

“ I think Silicon products are better because it is an ISO 9002 company”( Prakash Motors)

Our Core Product Vs. Competition Product : Proven Technology & Quality Licensed from Directed, the World Leader in Vehicle Security Systems Adapted for Indian conditions by ABC (Parent Company of XYZ) Engineering Team Directed designs accepted by GM, Hyundai, Suzuki etc. Only product design approved by FCC Manufactured by ABC (Parent Company of XYZ) under ISO 9001 AND QS 9000 standards. ABC (Parent Company of XYZ) is an approved vendor to many OE Customers Competition Product: Uncertain Quality Unknown Technology Pirated or Copied. Key Features Like Shock Sensors not reliable Imported from unknown sources or manufactured in plants with lower QC Standards. Limited OE Experience Edge: Proven Technology, Quality

Product : Proven Technology & Quality

Licensed from Directed, the World Leader in Vehicle Security Systems

Adapted for Indian conditions by ABC (Parent Company of XYZ) Engineering Team

Directed designs accepted by GM, Hyundai, Suzuki etc.

Only product design approved by FCC

Manufactured by ABC (Parent Company of XYZ) under ISO 9001 AND QS 9000 standards.

ABC (Parent Company of XYZ) is an approved vendor to many OE Customers

Competition Product: Uncertain Quality

Unknown Technology Pirated or Copied.

Key Features Like Shock Sensors not reliable

Imported from unknown sources or manufactured in plants with lower QC Standards.

Limited OE Experience

Feedback on Installation Accessory retailers perceive installation to be very critical to product performance “ If you do not install properly, the alarm might not activate.One of the doors might not be locked”(Preet Motors) Improper installation related complaints “ Of the three major complaints: Activation, Motor & Locking problem; activation problems are due to poor installation by us”(Prakash Motors) Proper installation of product necessary to ensure performance

Accessory retailers perceive installation to be very critical to product performance

“ If you do not install properly, the alarm might not activate.One of the doors might not be locked”(Preet Motors)

Improper installation related complaints

“ Of the three major complaints: Activation, Motor & Locking problem; activation problems are due to poor installation by us”(Prakash Motors)

The Electrician: UTM Not a uniform practice that the installer is trained by the security system company in installation of security system Most accessory retailers apprehensive whether the UTM installer would be amenable to the idea of training “ He has been in the business for 20 years. I do not know whether he will be keen to learn about installation all over again”(Classic Motors) These guys think that they know all. They have big egos. I don’t think that they will welcome any further training”(Distributor A) Installers themselves are wary of any further training “ Unless there is something new. I don’t feel the need for training” “ I have never received a complaint that something went wrong with the security system that I installed” Installer's current training levels uncertain. Installer not open to further training

Not a uniform practice that the installer is trained by the security system company in installation of security system

Most accessory retailers apprehensive whether the UTM installer would be amenable to the idea of training

“ He has been in the business for 20 years. I do not know whether he will be keen to learn about installation all over again”(Classic Motors)

These guys think that they know all. They have big egos. I don’t think that they will welcome any further training”(Distributor A)

Installers themselves are wary of any further training

“ Unless there is something new. I don’t feel the need for training”

“ I have never received a complaint that something went wrong with the security system that I installed”

XYZ: Product Delivery XYZ needs to be deeply involved in installation By putting up a comprehensive training package for installers By incentivizing installers to undergo training By insisting that accessory retailers use certified installers for installation

XYZ needs to be deeply involved in installation

By putting up a comprehensive training package for installers

By incentivizing installers to undergo training

By insisting that accessory retailers use certified installers for installation

After Sales Service Besides Margin, After Sales Service is the key factor when a retailer recommends a system Accessory retailer is 1 st guy to be hassled by the customer “ I receive frequent complaints about the motor and the remote. Initially we were replacing it ourselves. Now AutoCop does it, so we direct the customers to the company”(Classic Motors) “ Usually when a customer has a problem, he brings the car to my shop. I call the Wheels guy to come over & fix it”(Preet Motors) “ My business is car air conditioning. I don’t want to spend much time on security systems that I install” ( Hans Air Conditioners) Accessory retailer receives flak for poor after sales service “ Customers complain about after sales services. The AutoCop guys do not arrive on time/day promised. Sometimes they repair the system, and it conks off again later” (Classic Motors)

Besides Margin, After Sales Service is the key factor when a retailer recommends a system

Accessory retailer is 1 st guy to be hassled by the customer

“ I receive frequent complaints about the motor and the remote. Initially we were replacing it ourselves. Now AutoCop does it, so we direct the customers to the company”(Classic Motors)

“ Usually when a customer has a problem, he brings the car to my shop. I call the Wheels guy to come over & fix it”(Preet Motors)

“ My business is car air conditioning. I don’t want to spend much time on security systems that I install” ( Hans Air Conditioners)

Accessory retailer receives flak for poor after sales service

“ Customers complain about after sales services. The AutoCop guys do not arrive on time/day promised. Sometimes they repair the system, and it conks off again later” (Classic Motors)

After Sales Service Accessory retailer knows that the after sales service of the security system will have an impact on customer relationships. In an insecure world,where the customer is being wooed by the car dealer, accessory retailer wants to retain his customer desperately. “ Most of customers today buy directly from car dealers.I don’t want my customers to face problems with the stuff they buy from me”(Prakash Motors) A lifetime warranty & an effective after sales network will be mission critical in winning a retailer’s loyalty

Accessory retailer knows that the after sales service of the security system will have an impact on customer relationships.

In an insecure world,where the customer is being wooed by the car dealer, accessory retailer wants to retain his customer desperately.

“ Most of customers today buy directly from car dealers.I don’t want my customers to face problems with the stuff they buy from me”(Prakash Motors)

Key Retailer Insight Quality of after sales service has an impact on my relationship with a customer. I want to safeguard the relationship. I feel insecure about the growing influence of the car dealer. A lifetime warranty & an effective after sales network will be mission critical in winning a retailer’s loyalty

Augmented Product Besides core product,the augmented product should ensure Effective installation Lifetime warranty and effective after sales network Effective Installation will build on product reliability and perceived quality Attractive warranty and after sales network will build strong retailer loyalty and will be a critical factor in the ‘push’ strategy

Besides core product,the augmented product should ensure

Effective installation

Lifetime warranty and effective after sales network

Effective Installation will build on product reliability and perceived quality

Attractive warranty and after sales network will build strong retailer loyalty and will be a critical factor in the ‘push’ strategy

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Summary Two need segments: security & convenience Need gap: No products tailor-made for the convenience segment Gaps to be filled by Model 50 & Model 100 Performance issues with existing products gives XYZ an edge Installation critical to performance. Installer’s training levels/willingness uncertain Improved warranty & an effective after sales service :mission critical in winning a retailer’s loyalty

Summary

Two need segments: security & convenience

Need gap: No products tailor-made for the convenience segment

Gaps to be filled by Model 50 & Model 100

Performance issues with existing products gives XYZ an edge

Installation critical to performance. Installer’s training levels/willingness uncertain

Improved warranty & an effective after sales service :mission critical in winning a retailer’s loyalty

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Pricing Strategy Price Segments

Pricing

Strategy

Price

Segments

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Price Segments Price Sensitivity Perceived Value Price Segments Segment Opportunities

Price

Segments

Price Sensitivity

Perceived Value

Price Segments

Segment Opportunities

Buying Process Step 1 Awareness Word of mouth, Observation Step 2 Information Search Hardly any Step 3 Evaluate Alternatives Advice from dealer, Threshold of money Step 4 Purchase Car showroom, Car accessory dealer Step 5 Evaluate Performance, Acclimatization /Blind Spots

Buying Process:Threshold of Money Evaluate Alternatives The buyer has a threshold of money to be spent say 5000. “We did not want to go for a hi-fi system for Rs 10 000” The car/accessory dealer recommends the model of his favoured brand that comes within the threshold The dealer has the final word Step 1 Awareness Word of mouth, Observation Step 2 Information Search Hardly any Step 3 Evaluate Alternatives Advice from dealer, Threshold of money Step 4 Purchase Car showroom, Car accessory dealer Step 5 Evaluate Performance, Acclimatization /Blind Spots Two price points in buyer’s mind. A hi-fi system @ 8-10 thousand.A normal one @ 3-5 thousand

Evaluate Alternatives

The buyer has a threshold of money to be spent say 5000. “We did not want to go for a hi-fi system for Rs 10 000”

The car/accessory dealer recommends the model of his favoured brand that comes within the threshold

The dealer has the final word

Price Sensitivity Price Sensitivity: Consumer’s Point of View “ When buying a car of 3-4 Lakhs, I am not really worried about extra expense of 3-5 thousand. I know that I will have to shell out an extra 30-40 thousand on accessories /insurance /registration” (Consumer) Price Sensitivity: Retailer’s Point of View “ A consumer does not come with a particular model in his mind. I can recommend the model and the company” (Prakash Motors) “ A customer may ask for a certain brand. But I can usually sell him the system that I keep(i.e Piranha)”( Classic Motors) Within a given range (say 3-5 thousand), the buyer price sensitivity is low.

Price Sensitivity: Consumer’s Point of View

“ When buying a car of 3-4 Lakhs, I am not really worried about extra expense of 3-5 thousand. I know that I will have to shell out an extra 30-40 thousand on accessories /insurance /registration” (Consumer)

Price Sensitivity: Retailer’s Point of View

“ A consumer does not come with a particular model in his mind. I can recommend the model and the company” (Prakash Motors)

“ A customer may ask for a certain brand. But I can usually sell him the system that I keep(i.e Piranha)”( Classic Motors)

Perceived Value Primary Benefit :User A more efficient locking system “ I am assured that all locking is done once I press the remote button” “ Even if I am careless, I am still assured that the locking has been been done” Perceived Barrier : Non-User Functionality is not fully established “ Security system is for style” “ I go for functionality….no sosha( show-off )” “ The only thing it(security system) does is consume battery” “ I have already taken car insurance. I don’t need a gizmo Perceived value is not high since the functionality is not established. Primary benefit is central locking, not security

Primary Benefit :User

A more efficient locking system

“ I am assured that all locking is done once I press the remote button”

“ Even if I am careless, I am still assured that the locking has been been done”

Perceived Barrier : Non-User

Functionality is not fully established

“ Security system is for style”

“ I go for functionality….no sosha( show-off )”

“ The only thing it(security system) does is consume battery”

“ I have already taken car insurance. I don’t need a gizmo

Perceptual Map Security System High Functionality Low Functionality High Style/ Convenience Low Style/ Convenience Caught in the middle. Not high on functionality. Not high on style/convenience Car Graphics Car Audio Car MP3/TV Power Steering Leather Upholstery Alloy Wheels

Price Segments

Primary Price Segment Current Buyers Most of the buyers fall in the segment:‘Whatevers’

Segment Opportunity 1 Current Buyers Establishing functionality provides an opportunity to increase brand loyalty by increasing perceived value Future Buyers

Segment Opportunity 2 Having a low value product like central locking encourages price sensitive non-users to sample the product Future Buyers Non Users

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Segmentation on Price Model 300 Model 50,100 Model 200 Pricing Strategy

Segmentation on Price

Model 300

Model 50,100

Model 200

Pricing

Strategy

Segmentation on Price Model 50, Model 100 Model 300 Model 200

Pricing Strategy:Model 300 Skimming pricing strategy: pricing strategy involving the use of a high price relative to competitive offerings Skimming strategies used by marketers of high-end goods or services Without other cues, price serves as an important indicator of a product’s quality to buyers Skimming

Skimming pricing strategy: pricing strategy involving the use of a high price relative to competitive offerings

Skimming strategies used by marketers of high-end goods or services

Without other cues, price serves as an important indicator of a product’s quality to buyers

Pricing Strategy:Model 300 High price and performance increases the perceived value of the product Currently, market for high-end security system is limited, the strategy provides opportunity for Model 300 and above to become the benchmarks of quality Skimming Model 300 & other high end variants become benchmarks of functionality.

High price and performance increases the perceived value of the product

Currently, market for high-end security system is limited, the strategy provides opportunity for Model 300 and above to become the benchmarks of quality

Pricing Strategy :Model 50, Model 100 Penetration pricing policy: pricing strategy involving the use of a relatively low entry price as compared with competitive offerings; based on the theory that this initial low price will help secure market acceptance Designed to generate many trial purchases Penetration

Penetration pricing policy: pricing strategy involving the use of a relatively low entry price as compared with competitive offerings; based on the theory that this initial low price will help secure market acceptance

Designed to generate many trial purchases

Pricing Strategy: Model 50, Model 100 Low price provides an excellent hook to lure price sensitive non-users into buying a central locking/remote locking Has the potential to cannibalize on sale of higher variants Penetration Model 50, 100 increase penetration. Cannibalize on sales of alarm systems.

Low price provides an excellent hook to lure price sensitive non-users into buying a central locking/remote locking

Has the potential to cannibalize on sale of higher variants

Pricing Strategy:Model 200 Competitive Pricing Strategy: pricing strategy that de-emphasizes price as a competitive variable by pricing goods at the general level of competitors Firms focus their own marketing efforts on the product, distribution and promotion elements of the marketing mix Need to leverage the augmented product with effective installation and prompt after sales Build differentiation through higher perceived value by reliable product performance and excellent service Competitive Build differentiation (higher perceived value) by reliable product performance and excellent service

Competitive Pricing Strategy: pricing strategy that de-emphasizes price as a competitive variable by pricing goods at the general level of competitors

Firms focus their own marketing efforts on the product, distribution and promotion elements of the marketing mix

Need to leverage the augmented product with effective installation and prompt after sales

Build differentiation through higher perceived value by reliable product performance and excellent service

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Summary Within a given range the buyer price sensitivity is low Most of the buyers fall in the price segment:‘Whatevers’ Establishing functionality provides an opportunity to increase brand loyalty Skimming Pricing : Model 300 & other high end variants Models build aspiration, become benchmarks of functionality Penetration pricing for Model 50, 100. Cannibalize on sales of alarm systems Competitive Pricing for Model 200

Summary

Within a given range the buyer price sensitivity is low

Most of the buyers fall in the price segment:‘Whatevers’

Establishing functionality provides an opportunity to increase brand loyalty

Skimming Pricing : Model 300 & other high end variants

Models build aspiration, become benchmarks of functionality

Penetration pricing for Model 50, 100. Cannibalize on sales of alarm systems

Competitive Pricing for Model 200

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Branding Strategy Connection Triangle: General Key Consumer Insight Product Connection Triangle Promotion Plan

Branding

Strategy

Connection Triangle: General

Key Consumer Insight

Product Connection Triangle

Promotion Plan

Connection Triangle Product Benefit Why I like it Consumer UHT Why I value it Brand Why I trust it

Connection Triangle:Fevicol Product Benefit Quality adhesive Consumer UHT Bonds of family/ friendship/love usually break Brand A bond that will not break

User Benefit Primary Perceived Benefits: User A more efficient locking system “ I am assured that all locking is done once I press the remote button” “ Even if I am careless, I am still assured that the locking has been done A ‘Done’ thing “ I have seen it on many cars” “ like an audio system, got to have it” The main perceived benefit is a ‘more efficient locking system’

Primary Perceived Benefits: User

A more efficient locking system

“ I am assured that all locking is done once I press the remote button”

“ Even if I am careless, I am still assured that the locking has been done

A ‘Done’ thing

“ I have seen it on many cars”

“ like an audio system, got to have it”

Non-User Barrier Perceived Benefits : Non User Style Perceived Barrier : Functionality is not fully established “ Security system is for style” “ Why spend an extra on an old car. When I buy a new one, I might consider” “ I go for functionality….no sosha(show-off)” “ The only thing it(security system) does is consume battery” “ I have already taken car insurance. I don’t need a gizmo” The effectiveness of security systems is not proven

Perceived Benefits : Non User

Style

Perceived Barrier : Functionality is not fully established

“ Security system is for style”

“ Why spend an extra on an old car. When I buy a new one, I might consider”

“ I go for functionality….no sosha(show-off)”

“ The only thing it(security system) does is consume battery”

“ I have already taken car insurance. I don’t need a gizmo”

Key Consumer Insight Articulating: There is nothing that a thief cannot break. However from my end I know that the theft has not happened because of my carelessness Actually Saying : I yearn for something which is truly secure & reliable in this insecure,unreliable world

Connection Triangle Product Benefit Reliable, secure system Consumer UHT I yearn for reliability & security Brand Personal Car-Guard, always by your side

Personal Car Guard Brand to be embodied as a personal car-guard Borrows from the “Bodyguard” platform that epitomizes reliable security Is a strong platform that strings the consumer insight and product benefit together ‘ Security’ platform has not been appropriated by any other brand None of the insurance brands, lock brands own security The platform of security can be extended to other security systems like home security system etc.

Brand to be embodied as a personal car-guard

Borrows from the “Bodyguard” platform that epitomizes reliable security

Is a strong platform that strings the consumer insight and product benefit together

‘ Security’ platform has not been appropriated by any other brand

None of the insurance brands, lock brands own security

The platform of security can be extended to other security systems like home security system etc.

The 360 Degree Brand Experience A Brand is not just what you say it is, the brand is the totality of what the consumer experiences From quality, to taste, to packaging, to the retail environment, to line extensions, to ergonomics, design and colour, to sales promotions, to price, to corporate reputations and public relations, to the sales force and service experiences, to the delivery trucks, to word-of-mouth, to telemarketing scripts and receptionists style, to the way you answer the telephone, to prejudices and attitudes, to collective and individual memories, to history. Scraps and straws that add up to a company’s most valuable asset: a 360* Brand -- Shelly Lazarus, 1998

A Brand is not just what you say it is, the brand is the totality of what the consumer experiences

From quality, to taste, to packaging, to the retail environment, to line extensions, to ergonomics, design and colour, to sales promotions, to price, to corporate reputations and public relations, to the sales force and service experiences, to the delivery trucks, to word-of-mouth, to telemarketing scripts and receptionists style, to the way you answer the telephone, to prejudices and attitudes, to collective and individual memories, to history.

Scraps and straws that add up to a company’s most valuable asset: a 360* Brand

-- Shelly Lazarus, 1998

The 360 Degree Communication Experience Consumer Packaging New / Emerging media POP One - to - One Promotions PR+Events Mass Media

Communication Task Phase 1 To launch the XYZ Brand and build awareness Phase 2 To build brand personality of a “Personal Car Guard”

Phase 1

To launch the XYZ Brand and build awareness

Phase 2

To build brand personality of a “Personal Car Guard”

Media Strategy Role of Various Media PR To build news around the reliability of security systems To exploit the American connection and become a thought leader in security systems POPs To create in-store visibility To influence the consumer Advertising : Press Ads, Outdoor At the launch stage to build excitement around the brand Spread awareness Motivate trade Internet & Events To create news and information about the product To reach out to the young male adult

Role of Various Media

PR

To build news around the reliability of security systems

To exploit the American connection and become a thought leader in security systems

POPs

To create in-store visibility

To influence the consumer

Advertising : Press Ads, Outdoor

At the launch stage to build excitement around the brand

Spread awareness

Motivate trade

Internet & Events

To create news and information about the product

To reach out to the young male adult

Mad Ideas! Car insurance and security system was co-branded ? Mercedes Benz endorsed our security system? We reduced the car theft rate in the city we test market in? The police commissioner used our system in his/her car? We threw a challenge to car thieves to “Dare to Steal the car”

Car insurance and security system was co-branded ?

Mercedes Benz endorsed our security system?

We reduced the car theft rate in the city we test market in?

The police commissioner used our system in his/her car?

We threw a challenge to car thieves to “Dare to Steal the car”

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Summary Consumer Truth: I yearn for something which is truly secure & reliable in this insecure, unreliable world Brand Personality: Brand to be embodied as a personal car-guard Borrows from the “Bodyguard” platform that epitomizes reliable security ‘ Security’ platform has not been appropriated by any other brand Platform of security can be extended to home security system etc. Phase 1 to communication to build awareness, Phase 2 to build brand image PR, POPs, Press & Outdoor Ads , Internet & Events to play a role in communication

Summary

Consumer Truth: I yearn for something which is truly secure & reliable in this insecure, unreliable world

Brand Personality: Brand to be embodied as a personal car-guard

Borrows from the “Bodyguard” platform that epitomizes reliable security

‘ Security’ platform has not been appropriated by any other brand

Platform of security can be extended to home security system etc.

Phase 1 to communication to build awareness, Phase 2 to build brand image

PR, POPs, Press & Outdoor Ads , Internet & Events to play a role in communication

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Existing Network Audit

Existing Network

Audit

Existing ABC (Parent Company of XYZ) Distributor MCS Forecast Plan Control Report Manager Retail Distributor DSM Retailer / Customer Sales Plan Route plan Contact Plan Customer / Retail Card DSM Daily Score Card Territory Sales Target Retail Manager Contact Plan Distributor Coverage Target DSM Target DSM Weekly Score Card DSM Monthly Score Card Distributor Weekly Score Card Distributor Monthly Score Card Review Distributor Sales Target Market Intelligence Retail Mgr Segment Manager Marketing Department Review Review Segment Mgr Monthly Score Card Retail Mgr Ride with Segment Mgr Weekly Score Card Segment Sales Target Review Distributor Daily Score Card Review Direct Sales input Retail Mgr Daily Score Card Review Review Review Review Segment Mgr Daily Score Card Review Review Review Distributor Quarterly ROI Analysis Marketing Ride with Retail Mgr Weekly Score Card Retail Mgr Monthly Score Card

Distributor Management Control System (DMCS) Critiques DMCS Audit conducted for West Region Regional Office Important Critiques Daily/weekly/monthly control and reporting absent both for field sales force as well for the distributor Attainment of targets, variance, course corrections absent. Post-mortem reports generated rather than proactive action No review of performance of distributor and corrective action plans to improve performance No formal feedback loops between the distributor and the field sales/H.O. No system to formally capture market intelligence, analyze data, formulate responses to competitor/market activities The skeleton of distributor management control system does not exist. Distributor management personality driven, not system driven.

DMCS Audit conducted for West Region Regional Office

Important Critiques

Daily/weekly/monthly control and reporting absent both for field sales force as well for the distributor

Attainment of targets, variance, course corrections absent. Post-mortem reports generated rather than proactive action

No review of performance of distributor and corrective action plans to improve performance

No formal feedback loops between the distributor and the field sales/H.O.

No system to formally capture market intelligence, analyze data, formulate responses to competitor/market activities

Sales Distribution on Dealer Rank Out of 72 distributors in West Zone, 52.5% sales come from top 10. Little attempt in rationalizing territories & performance management

Distributor Feedback: Relationship Management Feedback from interviews conducted with two distributors Distributor A & Distributor B in South West Region and New West Region respectively Short term approach to distributors management “ Car companies are trying to help their car dealers by selling spare parts through them, whereas ABC (Parent Company of XYZ) is planting more distributors in the same territory resulting in price wars”(Distributor B) “ I get undercut by ABC (Parent Company of XYZ) distributors of other areas who are willing to give any terms and conditions in my territory. Ultimately who loses in the long run?!”( Distributor A) Existing distributors unhappy with short term distributor management approach

Feedback from interviews conducted with two distributors

Distributor A & Distributor B in South West Region and New West Region respectively

Short term approach to distributors management

“ Car companies are trying to help their car dealers by selling spare parts through them, whereas ABC (Parent Company of XYZ) is planting more distributors in the same territory resulting in price wars”(Distributor B)

“ I get undercut by ABC (Parent Company of XYZ) distributors of other areas who are willing to give any terms and conditions in my territory. Ultimately who loses in the long run?!”( Distributor A)

Distributor Feedback: Relationship Management No involvement of Senior Company Management No national company-distributor meet. No dialogue/feedback on products “ I want to go and see their Coimbatore plant. But I keep waiting for opportunity”( Distributor B) “ I have other MDs calling up once in a while, to find out supply position, but not ABC (Parent Company of XYZ) .I have seen MD , only as a picture”(Distributor B) No company official from H.O. visits my stockists/retailers Distributors regret absence of involvement of senior management

No involvement of Senior Company Management

No national company-distributor meet. No dialogue/feedback on products

“ I want to go and see their Coimbatore plant. But I keep waiting for opportunity”( Distributor B)

“ I have other MDs calling up once in a while, to find out supply position, but not ABC (Parent Company of XYZ) .I have seen MD , only as a picture”(Distributor B)

No company official from H.O. visits my stockists/retailers

Distributor Feedback: Market Intelligence Products/marketing not aligned to realities of replacement market Slow Moving “ Can easily produce a fast moving , high volume clutch cable, instead of slow moving, low volume speed o-cables”(Distributor B) Product Strategy “ Brakes India released disc brakes in the market as a self sufficient unit. ABC (Parent Company of XYZ) ’s disc brakes was a confusing set of different units”(Distributor B) Price Insensitive “ For truck segments which is very price sensitive ,need to keep prices competitive”(Distributor B) “ Products like cigarette lighters at Rs . 250 on a price list. Can be fitted in accessory market in Rs. 100” (Distributor B) Over Engineered “ Vehicle’s life is 5-10 years. ABC (Parent Company of XYZ) equipment will last for 15 years” (Mr. Gopal) ABC (Parent Company of XYZ) does not capture the changing needs/realities of market place

Products/marketing not aligned to realities of replacement market

Slow Moving

“ Can easily produce a fast moving , high volume clutch cable, instead of slow moving, low volume speed o-cables”(Distributor B)

Product Strategy

“ Brakes India released disc brakes in the market as a self sufficient unit. ABC (Parent Company of XYZ) ’s disc brakes was a confusing set of different units”(Distributor B)

Price Insensitive

“ For truck segments which is very price sensitive ,need to keep prices competitive”(Distributor B)

“ Products like cigarette lighters at Rs . 250 on a price list. Can be fitted in accessory market in Rs. 100” (Distributor B)

Over Engineered

“ Vehicle’s life is 5-10 years. ABC (Parent Company of XYZ) equipment will last for 15 years” (Mr. Gopal)

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Our Recommendations Accessory Vs. Spare Parts Distribution Options before XYZ Evaluation of Options Recommended Option

Our Recommendations

Accessory Vs. Spare Parts Distribution

Options before XYZ

Evaluation of Options

Recommended Option

Distributing Accessories Vs. Spare Parts Accessories Spare Parts Independent network of accessory distributors. The accessory distributors do not distribute spare parts. Independent network of spare parts distributors/stockists. Spare part distributors do not distribute accessories Target audience is the accessory retailer /installer Target audience is the workshops and mechanics. Mechanics create a pull for the product ‘ Push ’ product.Demand for accessories have to be created ‘ Pull ’ product. Require competitive selling , “ incentives ” to induce retailers to sell our brands Selling by order taking Typical promotion will be an ad in an auto magazine like Overdrive, with massive POP support(banners, posters, product displays and demo boards etc.) A typical promotion will be mechanic contact programmes where company MSRs will educate/train/sell to mechanics

Distribution Options XYZ Exclusive Distribution Network ABC (Parent Company of XYZ) ’s Existing + XYZ in some areas ABC (Parent Company of XYZ) ’s Existing Distribution

XYZ Exclusive Distribution Network

ABC (Parent Company of XYZ) ’s Existing + XYZ in some areas

ABC (Parent Company of XYZ) ’s Existing Distribution

Recommended Option Recommended: XYZ Exclusive Pros High control over distribution process, service , pricing and channel costs High sales , since only an accessory focused network will provide sales Cons Low on Flexibility to exit. But XYZ has long term plans . To use existing network as a transition option The existing network will provide some spillover sales Investment : Investment vs. return in an exclusive accessory network will become very attractive once other accessory products are pushed in the network.

Recommended: XYZ Exclusive

Pros

High control over distribution process, service , pricing and channel costs

High sales , since only an accessory focused network will provide sales

Cons

Low on Flexibility to exit. But XYZ has long term plans .

To use existing network as a transition option

The existing network will provide some spillover sales

Investment : Investment vs. return in an exclusive accessory network will become very attractive once other accessory products are pushed in the network.

Marketing Mix Development Product Strategy Pricing Strategy Promotion Strategy Distribution Summary Skeleton of distributor management control system does not exist. Little attempt in rationalizing territories & performance management Existing distributors unhappy with short term distributor management approach Network of accessory distributors independent to spare parts. Unlike spare parts, accessory is a ‘Push’ product. Recommended Distribution Option : XYZ Exclusive Transition: Use ABC (Parent Company of XYZ) existing network while building XYZ Exclusive network

Summary

Skeleton of distributor management control system does not exist.

Little attempt in rationalizing territories & performance management

Existing distributors unhappy with short term distributor management approach

Network of accessory distributors independent to spare parts. Unlike spare parts, accessory is a ‘Push’ product.

Recommended Distribution Option : XYZ Exclusive

Transition: Use ABC (Parent Company of XYZ) existing network while building XYZ Exclusive network

When can we say we have acquired a competitive distribution capability? Finally

When can we say we have acquired a competitive distribution capability?

Competitive Distribution Capability Top management committed to distribution strategy & planning. Senior manager dedicated to distribution planning & management. Have a disciplined distributor management control system Helps identify market size, distributor volume by brand/market segment Helps process what-if scenarios with different distributor portfolios Manages performance: tracks, reviews and course corrects Manages complex distributor relationships Understand the concept of distribution intensity Balance distribution mix to cover market segments requiring different intensity Understand the related concepts of coverage, penetration and market share. Know their strategic moves: Maintain, Penetrate, Grow, Terminate.

Top management committed to distribution strategy & planning.

Senior manager dedicated to distribution planning & management.

Have a disciplined distributor management control system

Helps identify market size, distributor volume by brand/market segment

Helps process what-if scenarios with different distributor portfolios

Manages performance: tracks, reviews and course corrects

Manages complex distributor relationships

Understand the concept of distribution intensity

Balance distribution mix to cover market segments requiring different intensity

Understand the related concepts of coverage, penetration and market share.

Know their strategic moves: Maintain, Penetrate, Grow, Terminate.

“ You see, all the right things are written in books and research papers. The trick is to ensure that there is no gap between what is written in the books and your vision; from what is happening on the shop-floor and what is going on in the marketplace. That is execution. That is what makes the difference” Mukesh Ambani www.mastersungroup.com http://strategy-execution.blogspot.com [email_address] Sarvajeet Chandra: +91 9920803060 Jasravee Kaur : +91 9892301590

Profile of Sarvajeet Chandra Organizations Worked For : ICICI Bank, Our Consulting (UK), Baazee.com ( now Ebay), Ogilvy & Mather Sales & Distribution Operations/ Service Quality Brand Building Capability Development FMCG/Retail ITC( ITD Division) Eveready Travelport MSM Eveready Kodak Shringar Cinema (Fame) Infrastructure , Industrial & Real Estate Saurashtra Cement VNC Group Tata Steel Lavendor Group Mandala Asset Solutions Lion Group Tata Steel VNC Group Gujarat Glass Saurashtra Cement Pidilite (Fevicol, Fevikwik, Fevistik) VNC Group Tata Steel Textile, Leather & Commodities Tata International Indo Rama Texmaco Group Laxmi Machine Works Tata International ITC (IBD Division) World Gold Council Banking, Media, IT, Hospitality & Others XYZ Blue Star Cidade de Goa Tata Power Cidade de Goa ICICI Bank Thanjavur Hotel Residence Cidade de Goa STAR TV EBay India MIHMCT Vizualize LBi India Systime JW Mariott GTL Limited BST-Sayona