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REJUVENATING MARKETING MIX THROUGH COMPARATIVE RESPONSE STRATAGIES

Course Name: Marketing Management-1 Course Code: MFT4CCMM01

Course Coordinator: Dr. Ashwini Awasthi

Submitted By: Group-7 (Section-D) Kunal Vijay (191432) Parag Gandhi (191437) Rahul Bhavsar (191442) Sanyam Chouradiya (191448)

Comparative Response Strategies

Table of Content

Content

Page No.

Comparative Response Matrix (CRM)

3

Price-Price Comparative Response Strategy (Cpp)

3

Quality-Price Comparative Response Strategy (Cqp)

4

Advertising-Price Comparative Response Strategy (Cap)

6

Price-Quality Comparative Response Strategy (Cpq)

7

Quality-Quality Comparative Response Strategy (Cqq)

8

Advertising-Quality Comparative Response Strategy (Caq)

9

Price-Advertising Comparative Response Strategy (Cpa)

11

Quality-Advertising Comparative Response Strategy (Cqa) Advertising-Advertising Comparative Response Strategy (Caa) References

12 13 15

Page 2

Comparative Response Strategies COMPARATIVE RESPONSE MATRIX (CRM):

Company A Actions Price Company Price B

Quality

Advertising

MI phone vs. LG Netflix vs. Colgate vs. phone (Cpp) Amazon Prime Dantakranti (Cqp) (Cap)

Reactions Quality

Indigo Airlnes Honda City vs. Vivo vs. vs. Kingfishers Hyundai OnePlus (Caq) Airlines (Cpq) Verna (Cqq)

Advertising D Mart vs. Big O General vs. Layer’r Bazaar (Cpa) Voltas (Cqa) Fogg (Caa)

vs.

1. Price-Price Comparative Response Strategy (Cpp): This strategy implies that when one of the competitors (Company A) reduces the price of the product, the other one (Company B) react with the same measure i.e. it too reduces the price of the product to be in the competition. Below case explains the same about this strategy between two of the smartphone rivals.

CASE: MI Phones vs. LG Phones The Chinese manufacturer of smartphone Xiaomi operates in India under the brand name of MI. It provides the cheapest smartphones with lots of many features to attract the middle class and lower middle class market of India. The various ranges of varieties and with strong customer holding xiaomi has captured whooping 30.6% Indian smartphone market over the years. Many budget constrained customer as well as millennial and high school students prefer MI phone over all the others.

Page 3

Comparative Response Strategies

To counter Xiaomi’s low cost affordable smartphone strategy, South-Korea based LG also launched new series of smartphone called W-series. The W-series smartphones starts with price as low as Rs. 8999 and it is designed to specifically target the youth and millennial of India. They priced it by keeping in mind the Indian price competitive landscape. [1]

2. Quality-Price Comparative Response Strategy (Cqp): This strategy implies that when one of the competitors (Company A) increases the quality of the product, the other one (Company B) reacts by reducing the price of the product to be in the competition. They play on the different level playing field to attract the new customers and retain the older ones too. This strategy measure can be best observed in the online video streaming market between two major competitors i.e. Netflix and Amazon prime videos.

Page 4

Comparative Response Strategies

CASE: Netflix vs. Amazon Prime Videos Online video streaming platform Netflix was introduced in India in the year 2016. Netflix is very well known for its quality content and this is the main reason why its customers are loyal to it. Though it makes very high quality of content when it comes to pricing, it is highly costly and not vast number of consumer can afford it.

In the year 2017, amazon also introduced its online video streaming platform Amazon Prime Video. But the market was somewhat small at that time and majorly captured by Netflix. To counter this and increase its market share, amazon prime video introduced at very low cost as compare to Netflix to attract the middle class and upper middle class people of India (which form large part of population).It also introduced the amazon prime music (an online audio streaming platform) services free to the customer who subscribe for the same. This way, when Netflix was introducing high quality content with way to higher price, amazon prime took this opportunity to provide services at very low cost to capture sufficient amount of market share. [2]

Page 5

Comparative Response Strategies 3. Advertising-Price Comparative Response Strategy (Cap): This strategy implies that when one of the competitors (Company A) increases the advertising of the product, the other one (Company B) reacts by reducing the price of the product to be in the competition. Company A spends more money on advertising to attract more customers but ultimately that more spending result into more pricing of the product. In this situation the other company B can bet on the low prices of the product because it does not bear the high advertising costs. This strategy measure can be best observed in the example of two rival toothpaste brand Colgate and Patanjali’s DantKranti.

CASE: Colgate vs. Dantkranti Colgate Palmolive India Pvt Ltd’s Colgate brand is very well known and widely used toothpaste brand in India. Over the years, it has captured majority of the market before the real competition started. It is very well known for maintaining the same product quality, huge customer base and many of them are loyal customers. However, the Colgate was forced to do higher advertising for this toothpaste product the day it started facing higher amount of competition from its rivals. While at the same time, Patanjali was also trying to enter in this market.

So Patanjali started providing its toothpaste at lower value as compare to Colgate to counter the heavy advertising strategy of Colgate. It also made people aware about its product being more herbal and natural and without any type of harmful elements. But, at first to enter into the market and make its space, Dant Kranti was introduced at very lower price so as to attract more and more number of customers. [3]

Page 6

Comparative Response Strategies 4. Price-Quality Comparative Response Strategy (Cpq): This strategy implies that when one of the competitors (Company A) reduces the price of the product, the other one (Company B) react with increase in the quality to be in the competition. Below case explains the same about this strategy between two of the airline rivals.

CASE: Indigo Airlines vs. Kingfishers Airlines The Indigo Airlines is a private company was founded by Rahul Bhatia in 2006. Presently it is the largest airlines in India, covering 50% of the market share. The marketing strategy of Indigo Airlines is to strictly follow a low-cost airline model such that the cost of these airlines always remains lower than the others in the market. Due to the same reasons, the profits of the airline increased from 550 to 650 Crore rupees in the last financial years.

On the other hand, Kingfisher Airlines Limited is a group based airline having Vijay Mallya as the Chairperson and was founded in 2003. Kingfisher airlines started as a low-cost airline but shifted its focus on quality as a premium airline service. Moreover, it merged with Air Deccan in order to expand in both domestic as well as international sectors. But the company’s planning failed and as a result the airlines fell into continuous losses and high debt, which led to closing the company’s operation completely in 2012. Thus, although it failed but the marketing strategy of the kingfisher airlines increasing quality to over-counter low prices of Indigo Airlines can be stated as Price vs. Quality Marketing Mix. [4]

Page 7

Comparative Response Strategies

5. Quality-Quality Comparative Response Strategy (Cqq): This strategy implies that when one of the competitors (Company A) increases the price of the product, the other one (Company B) react with the same measure i.e. it too increases the quality of the product to be in the competition. Below case explains the same about this strategy between two of the automobile rivals.

CASE: Honda City vs. Hyundai Verna Honda City has been known as a premium sedan from a past decade. Honda’s City has set a benchmark for sedan class automobiles in the market and has been at the first place for a long time. City is very well known for the quality of its engine, interiors, exteriors, and performance in overall context. Many companies tried to compete by selling the vehicles at low cost but the pride of the Honda City never went down.

Page 8

Comparative Response Strategies And then in the year of 2017-18, the battle of quality vs. quality took place, when Hyundai launched Verna’s new model. The quality of Hyundai Verna levelled up to the quality of Honda City in terms of engine, interior, exterior and overall performance moreover, Hyundai added some additional features as well (such as Air vented Seats) while keeping the cost comparatively lower from the Hondas City. And the sales of Hyundai Verna increased by 64% in the year 2018. [5]

6. Advertising-Quality Comparative Response Strategy (Caq): This strategy implies that when one of the competitors (Company A) increases the advertising of the product, the other one (Company B) reacts by improving the quality of the product to be in the competition. Company A spends more money on advertising to attract more customers but ultimately that more spending result into more pricing of the product. In this situation the other company B can bet on the highrt quality of the product. This strategy measure can be best observed in the example of two famous mobile brands Vivo and OnePlus.

CASE: Vivo vs. OnePlus Vivo is well very well known for its street marketing campaigns as well as marketing over tv commercials. Vivo is doing advertisement at very high extent and keeping the cost comparatively low as well in order to drag competitors out of the market. If we talk in facts and figures, Vivo India allotted 200 crore rupees as part of their marketing strategy to IPL 2016. Moreover, it is estimated that Vivo and Oppo are going to spend 2200 crore rupees as a part of their marketing strategy in order to drag Samsung out of the market.

Page 9

Comparative Response Strategies

On the other hand, OnePlus has always been over quality and thus the price of the product has a significant difference. For example, Vivo V15 pro and OnePlus 7 pro, Vivo has gone for advertisement as always while OnePlus launched 7pro with premium quality standards. Although, the price of OnePlus is much higher than Vivo V15 pro, the sales of OnePlus are way ahead. [6] [7]

Page 10

Comparative Response Strategies 7. Price-Advertising Comparative Response Strategy (Cpa): This strategy implies that when one of the competitors (Company A) reduces the price of the product, the other one (Company B) react with increased advertising to be in the competition. Below case explains the same about this strategy between two of the supermarket rivals.

CASE: D Mart vs. Big Bazaar Indian supermarket giant D Mart is known for its low price and quality product offering. D Mart was not an established player in the supermarket marketplace but when it entered in it, it started offering much more discounts to the customer to cover as much market it can. And this strategy also worked very well because customer got quality products at discounted price.

While Big Bazaar was an established player in Indian Supermarket market place, it started doing heavy advertising to counter the D Mart low price strategy. It also started festival sales offers and opted for heavy marketing of it through electronic and print media. This strategy paid off well to the Big Bazaar and it was able to manage its position in the market. [8]

Page 11

Comparative Response Strategies 8. Quality-Advertising Comparative Response Strategy (Cqa): This strategy implies that when one of the competitors (Company A) increases the quality of the product, the other one (Company B) reacts by increasing the advertising of the product to be in the competition. They play on the different level playing field to attract the new customers and retain the older ones too. This strategy measure can be best observed in the air conditioner market between two major competitors i.e. O General and Voltas.

CASE: O General vs. Voltas Ogeneral is known for its reliability and tropical compressor. They claim 52′c ambient operations and it's quite true. Their machines are very good at cooling no matter whatever the condition you have, you will get satisfactory cooling. They bank heavily on the quality part rather than the advertising. So it is like your product quality speaks itself instead of your marketing and advertising.

While its rival Voltas Banks heavily on advertising only. They advertise everywhere they can to expand its market base and establish its presence. And this strategy helped very well to Voltas too. So, this shows that how the other company behaves when one of the competitors tries to capture the market purely based on the quality, the other does advertising about its product to be in the competition. [9]

Page 12

Comparative Response Strategies

9. Advertising-Advertising Comparative Response Strategy (Caa): This strategy implies that when one of the competitors (Company A) increases the advertising of the product, the other one (Company B) react with the same measure i.e. it too increases the advertising of the product to be in the competition. Below case explains the same about this strategy between two of the perfume rivals.

CASE: Layer’r vs. Fogg MacLean-Fogg is the company comes up with the strong unique advertisement factor of-NO GAS, ONLY SCENT-first time in the market with its Deodorant segment. This quite of new strategic marketing encouraged people to buy the most of its product over the other brand. In order to capture market on a big scale, they are using common people for their advertisement.

Layer’r- Layer'r is one of India's fastest emerging brands of personal care and styling products. The ad is having an impact on customer to give a try on the product. For covering market share they are using film star like varun dhawan and parineeti chopra.

Page 13

Comparative Response Strategies These are times when the consumer has to sit back and enjoy the brand wars in terms of advertisement. Fogg came up with the idea- OR KYA CHAL RAHA HAI, FOGG CHAL RHA HAI- in the market. Layer’r is giving competition to fogg in terms of advertisement by introducing a character named ‘kunal’. [10]

Page 14

Comparative Response Strategies References [1] LiveMint. [Online]. https://www.livemint.com/industry/retail/lg-targets-millennialswith-smartphones-starting-at-8-999-1561571993303.html [2] [Online]. https://www.indiatoday.in/technology/features/story/amazon-prime-vsnetflix-5-reasons-why-it-makes-more-sense-for-indians-to-opt-for-prime-13988792018-11-29 [3] BloombergQuint. [Online]. https://www.bloombergquint.com/business/colgateayurvedic-bet-to-protect-turf-starts-to-pay-off [4] Business Standard. [Online]. https://www.businessstandard.com/article/companies/a-tale-of-two-airlines-kingfisher-vs-indigo112022100014_1.html [5] Gaadiwaadi. [Online]. 1. https://gaadiwaadi.com/hyundai-verna-sales-up-by-64-in2018-thanks-to-new-gen-model/ [6] Economic Times. [Online]. 1. https://economictimes.indiatimes.com/tech/hardware/revealed-oppo-vivos-rs-2200crore-marketing-strategy-to-overtake-samsung-in-india/articleshow/58485988.cms [7] [Online]. https://www.exchange4media.com/ipl-news/vivo-india-allocates-rs-200crore-for-brand-promotion-during-ipl-2016-64081.html [8] The Hindu Businessline. [Online]. https://www.thehindubusinessline.com/infotech/online-to-offline-ad-campaign-clicks-for-big-bazaar/article25137860.ece [9] [Online]. https://www.exchange4media.com/industry-briefing-news/mr.-murthy-isback-with-the-new-voltas-ac-campaign-this-summer-89893.html [10] [Online]. http://www.adageindia.in/marketing/cmo-strategy/fogg-bets-big-onperfumes-releases-new-campaign-to-position-it-as-a-giftingitem/articleshow/56799817.cms

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