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  • 1. Marketing Mix Development Approach for a Car Security System1. To propose a marketing mix for XYZ Security Systems, a sister company of ABC
  • 2. 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
  • 3. 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
  • 4. From Products to Brands
  • 5. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy Strategy Augmented AugmentedNeed SegmentsNeed Segments Product Product
  • 6. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy Strategy Need Segments Need Segments1. Two Segments2. Current Alignment3. Need Gaps4. XYZ Need Alignment
  • 7. 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
  • 8. 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 Convenience of of central locking, the remote adds an element of style
  • 9. 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)
  • 10. Need Gaps Customers What she wants What she gets (Usually) (Usually)I want a key that can lock Manual Central Alarm Systemall my doors LockingI want a cool remote to Remote Central Alarm Systemlock all my doors LockingI have a central lock.I Alarm System without Alarm System with awant a security system Actuator discount of Rs 300- package( worth Rs. 400 1200)I want a security system. An Alarm System Security SystemNot the hi-fi systemNo products tailor-made for the convenience segment.No products tailor-made for the convenience segment.Customization absent in existing productsCustomization absent in existing products
  • 11. 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.
  • 12. XYZ Need Alignment• Convenience Need Segment: Model 50, Model 100 • Security Need Segment:Model 200, Model 300
  • 13. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy Strategy Augmented Augmented Product Product1. Core Product2. Product Delivery3. After Sales4. Augmented Product
  • 14. Always listen to the market Always listen to the market
  • 15. 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. Performance/Quality problems with existing products.
  • 16. 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 Edge: Proven Technology, Quality
  • 17. Feedback on Installation Accessory retailers perceive installation to be very critical to product performance  “Ifyou 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 Proper installation of product necessary to ensure performance
  • 18. 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” Installers current training levels uncertain. Installers current training levels uncertain. Installer not open to further training Installer not open to further training
  • 19. XYZ: Product Delivery XYZ needs to be deeply involved in installation1. By putting up a comprehensive training package for installers2. By incentivizing installers to undergo training3. By insisting that accessory retailers use certified installers for installation
  • 20. After Sales Service Besides Margin, After Sales Service is the key factor when a retailer recommends a system Accessory retailer is 1st 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)
  • 21. 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 A lifetime warranty & an effective after sales network will be mission critical in winning a retailer’s loyalty will be mission critical in winning a retailer’s loyalty
  • 22. Key Retailer InsightQuality of after sales service has an impact on my relationship with a Quality of after sales service has an impact on my relationship with acustomer. I Iwant to safeguard the relationship. I Ifeel insecure about the customer. want to safeguard the relationship. feel insecure about thegrowing influence of the car dealer. growing influence of the car dealer. A lifetime warranty & an effective after sales network A lifetime warranty & an effective after sales network will be mission critical in winning a retailer’s loyalty will be mission critical in winning a retailer’s loyalty
  • 23. Augmented Product Besides core product,the augmented product should ensure 1. Effective installation 2. 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
  • 24. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy StrategySummary 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
  • 25. Marketing Mix DevelopmentProduct Pricing Promotion DistributionStrategy Strategy Strategy Price Price Pricing Pricing Segments Segments Strategy Strategy
  • 26. Marketing Mix DevelopmentProduct Pricing Promotion DistributionStrategy Strategy Strategy Price Price Segments Segments 1. Price Sensitivity 2. Perceived Value 3. Price Segments 4. Segment Opportunities
  • 27. Buying Process Word ofStep 1 Awareness mouth, ObservationStep 2 Information Search Hardly any Advice from dealer,Step 3 Evaluate Alternatives Threshold of money Car showroom,Step 4 Purchase Car accessory dealer Performance,Step 5 Evaluate Acclimatization /Blind Spots
  • 28. Buying Process:Threshold of Money Word ofStep 1 Awareness mouth, Observation Evaluate Alternatives Evaluate AlternativesStep 2 Information Search Hardly any  The  The buyer has aa threshold of buyer has threshold ofStep 3 Evaluate Alternatives Advice from dealer, Threshold of money money to be spent say 5000. money to be spent say 5000.Step 4 Purchase Car showroom, “We did not want to go for aahi- “We did not want to go for hi- Car accessory dealerStep 5 Evaluate Performance, fi system for Rs 10 000” fi system for Rs 10 000” Acclimatization /Blind Spots  The  The car/accessory dealer car/accessory dealer recommends the model of his recommends the model of his favoured brand that comes favoured brand that comes within the threshold within the threshold  The dealer has the final word  The dealer has the final word Two price points in buyer’s mind. Two price points in buyer’s mind. A hi-fi system @ 8-10 thousand.A normal one @ 3-5 thousand A hi-fi system @ 8-10 thousand.A normal one @ 3-5 thousand
  • 29. 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. Within a given range (say 3-5 thousand), the buyer price sensitivity is low.
  • 30. 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 gizmoPerceived value is not high since the functionality is not established. Perceived value is not high since the functionality is not established.Primary benefit is central locking, not security Primary benefit is central locking, not security
  • 31. Perceptual Map High Functionality Power Steering Car Audio Car MP3/TV Security System Alloy Wheels Leather Upholstery Low Style/ High Style/Convenience Convenience Car Graphics Low Functionality Caught in the middle. Not high on functionality. Caught in the middle. Not high on functionality. Not high on style/convenience Not high on style/convenience
  • 32. Price Segments
  • 33. Primary Price Segment Current BuyersMost of the buyers fall in the segment:‘Whatevers’Most of the buyers fall in the segment:‘Whatevers’
  • 34. Segment Opportunity 1 Current Future Buyers BuyersEstablishing functionality provides an opportunity to Establishing functionality provides an opportunity toincrease brand loyalty by increasing perceived value increase brand loyalty by increasing perceived value
  • 35. Segment Opportunity 2 Non Users Future BuyersHaving a low value product like central locking Having a low value product like central lockingencourages price sensitive non-users to sample the product encourages price sensitive non-users to sample the product
  • 36. Marketing Mix DevelopmentProduct Pricing Promotion DistributionStrategy Strategy Strategy Pricing Pricing Strategy Strategy 1. Segmentation on Price 2. Model 300 3. Model 50,100 4. Model 200
  • 37. Segmentation on Price Model 50, Model 300 Model 100 Model 200
  • 38. Pricing Strategy:Model 300  Skimming pricing strategy: pricing strategy involving the use of a high price relative toSkimmingSkimming 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
  • 39. Pricing Strategy:Model 300  High price and performance increases the perceived value of the product Skimming Skimming  Currently, market for high-end security system is limited, the strategy provides opportunity for Model 300 and above to become the benchmarks of qualityModel 300 & other high end variants become benchmarks of functionality.Model 300 & other high end variants become benchmarks of functionality.
  • 40. Pricing Strategy :Model 50, Model 100  Penetration pricing policy: pricing strategy involving the use of a relatively low entry price as compared withPenetrationPenetration competitive offerings; based on the theory that this initial low price will help secure market acceptance  Designed to generate many trial purchases
  • 41. Pricing Strategy: Model 50, Model 100  Low price provides an excellent hook to lure price sensitive non-users into buying a central locking/remote Penetration Penetration locking  Has the potential to cannibalize on sale of higher variantsModel 50, 100 increase penetration.Model 50, 100 increase penetration.Cannibalize on sales of alarm systems.Cannibalize on sales of alarm systems.
  • 42. 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 Competitive Competitive 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 serviceBuild differentiation (higher perceived value) Build differentiation (higher perceived value)by reliable product performance and excellent service by reliable product performance and excellent service
  • 43. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy StrategySummary 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
  • 44. Marketing Mix DevelopmentProduct Pricing Promotion DistributionStrategy Strategy Strategy Branding Branding Strategy Strategy 1. Connection Triangle: General 2. Key Consumer Insight 3. Product Connection Triangle 4. Promotion Plan
  • 45. Connection Triangle Product Benefit Why I like itConsumer UHT BrandWhy I value it Why I trust it
  • 46. Connection Triangle:Fevicol Product Benefit Quality adhesive Consumer UHT Bonds of family/ Brandfriendship/love usually A bond that will not break break
  • 47. 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’ The main perceived benefit is a ‘more efficient locking system’
  • 48. 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 The effectiveness of security systems is not proven
  • 49. Key Consumer InsightArticulating: Articulating: There is nothing that a thief Actually Saying::II Actually Saying There is nothing that a thiefcannot break. However from yearn for something yearn for something cannot break. However frommy end IIknow that the theft which is truly secure which is truly secure my end know that the thefthas not happened because of & reliable in this & reliable in this has not happened because ofmy carelessness insecure,unreliable insecure,unreliable my carelessness world world
  • 50. Connection Triangle Product Benefit Reliable, secure system Consumer UHT BrandI yearn for reliability & Personal Car- security Guard, always by your side
  • 51. 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.
  • 52. 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
  • 53. The 360 Degree Communication Experience Mass Media PackagingNew / POPEmergingmedia ConsumerOne - to - One Promotions PR+Events
  • 54. Communication Task Phase 1  To launch the XYZ Brand and build awareness Phase 2  To build brand personality of a “Personal Car Guard”
  • 55. 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
  • 56. 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”
  • 57. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy StrategySummary 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
  • 58. Marketing Mix DevelopmentProduct Pricing Promotion DistributionStrategy Strategy Strategy Existing Network Existing Network Audit Audit
  • 59. Existing ABC (Parent Company of XYZ) Distributor MCS Forecast Plan Control Report Review Review Segment Marketing Mgr MonthlySegment Segment Segment Score Card DepartmentManager Sales Target Review Mgr Weekly Segment Score Card Mgr Daily Review Retail Score Card Retail MgrManager Territory Manager Monthly Sales Target ReviewRetail Contact Plan Score Card Review Retail Mgr Weekly Retail Mgr Score Card Direct Sales Daily Score input Distributor Card Review Quarterly Review Distributor ROI Analysis Distributor Monthly DistributorDistributor Sales Target Coverage Distributor Score Card Target Review Weekly Distributor Score Card Daily Score Card Review Review DSM Monthly DSM Target Route plan Score Card DSM WeeklyDSM Review Score Card Retailer / DSM Daily Market Customer Contact Plan Score Card Intelligence Sales Plan Retail Mgr Customer / Marketing Retail Mgr Retail Card Ride with Ride with
  • 60. 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 activitiesThe skeleton of distributor management control system does not exist. The skeleton of distributor management control system does not exist.Distributor management personality driven, not system driven. Distributor management personality driven, not system driven.
  • 61. Sales Distribution on Dealer Rank 28.0% 52.5% 19.6% % sales from top 10 % sale from Rank 10-20 % sale from Rank 21-72Out of 72 distributors in West Zone, 52.5% sales come from top 10. Out of 72 distributors in West Zone, 52.5% sales come from top 10.Little attempt in rationalizing territories & performance management Little attempt in rationalizing territories & performance management
  • 62. 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 Existing distributors unhappy with short term distributor management approach
  • 63. 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/retailersDistributors regret absence of involvement of senior managementDistributors regret absence of involvement of senior management
  • 64. 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 ABC (Parent Company of XYZ) does not capture thechanging needs/realities of market place changing needs/realities of market place
  • 65. Marketing Mix DevelopmentProduct Pricing Promotion DistributionStrategy Strategy Strategy Our Recommendations Our Recommendations 1. Accessory Vs. Spare Parts Distribution 2. Options before XYZ 3. Evaluation of Options 4. Recommended Option
  • 66. Distributing Accessories Vs. Spare Parts Accessories Spare PartsIndependent network of accessory Independent network of spare partsdistributors. The accessory distributors do distributors/stockists. Spare partnot distribute spare parts. distributors do not distribute accessoriesTarget audience is the accessory retailer Target audience is the workshops and/installer mechanics. Mechanics create a pull for the product‘Push’ product.Demand for accessories ‘Pull’ product.have to be createdRequire competitive selling , “incentives” to Selling by order takinginduce retailers to sell our brandsTypical promotion will be an ad in an auto A typical promotion will be mechanicmagazine like Overdrive, with massive POP contact programmes where companysupport(banners, posters, product displays MSRs will educate/train/sell toand demo boards etc.) mechanics
  • 67. Distribution Options1. XYZ Exclusive Distribution Network2. ABC (Parent Company of XYZ)’s Existing + XYZ in some areas3. ABC (Parent Company of XYZ)’s Existing Distribution
  • 68. 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.
  • 69. Marketing Mix Development Product Pricing Promotion Distribution Strategy Strategy StrategySummary 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
  • 70. Finally• When can we say we have acquired a competitive distribution capability?
  • 71. 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.
  • 72. Get in TouchSarvajeet Chandra • +91 9920803060 • sarvajeet@sapphirez.in • sarvajeetchandra@gmail.comVisit Us•www.mastersungroup.com•www.facebook.com/strategyexecution