Disclaimer: This is an example of a student written essay.
Click here for sample essays written by our professional writers.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Markstrat Report for Team Panther U

Paper Type: Free Essay Subject: Marketing
Wordcount: 4162 words Published: 1st Jan 2015

Reference this

Panther U developed many short and long term objectives during the course of the 11 periods of ‘Markstrat’ simulation. These objectives were formulated was a result of in-class learning, opportunities in the market and competitor movements. However there were a couple of objectives we stuck to right through the 11 periods of running our company. They were: A.) Try to improve our return on investment every period and B.) Maintain a steady flow of income and liquidity. At no point, did we take any un-necessary risks, an attitude that eventually proved to be both beneficial and otherwise. We aimed to maintain steady growth through systematic adjustments to production, marketing, sales force and R&D.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Essay Writing Service

We focussed less on becoming overall market leaders and more on protecting our turf in the competitive environment. Thus, our objectives were straightforward and on many occasions, less ambitious. During the course of the game, we took some corrective steps and took a few bold decisions. Some of them proved correct and some backfired simply because we should have implemented those earlier on in the game.

Broadly our objectives were A.) Maintain an optimum level of inventory, matching demand with production adequately each time B.) Focus on improving return on investment in each period C.) Improve stock price steadily without sudden peaks or falls

Performance analysis

Broadly, our company performance across 11 periods can be broken down into the following three phases based on the nature of strategies employed.

Period 0-3

When we initially started out with 2 products SURF and SUNY in the Sonite market, our main focus was on understanding existing demand for these products and monitoring production levels to match demand, keeping cost of holding goods in the inventory to a minimum. Within one period we managed to bring down inventory holding costs by a good measure thereby contributing to a healthy contribution per brand. Right through the subsequent periods, we constantly controlled costs of holding inventory except on a couple of occasions when competitors grabbed a huge market share in the SONITE industry driving down demand for our products. Even in that situation, we were always quick to respond and stabilized inventory within one period. Hence, this is one aspect of Markstrat where team ‘Panther U’ almost never failed to perform as per expectations.

Our company saw a steady increase in retail sales for both products SURF and SUNY. SURF in fact had the largest market share in the Singles segment. This market share remained steady upto period 3.

We didn’t spend aggressively on advertising. While, we captured the Singles market for SURF correctly by positioning the product right, we didn’t use the available cash surplus to create better awareness for our products in the introduction phase of the industry lifecycle. We understood the importance of spending appropriately on advertising only towards period 4. By then, the SONITE industry had entered growth and competitors were already ahead of us. Hence, though we had an initial advantage for SURF which continued to work in our favour till the end, SUNY lost out to increasing competition.

Due to controlled inventory costs and conservative approach to advertising, our net contribution improved greatly and remained steady till the end of period 4. We logged steady growth and ensured healthy cash inflow. This surplus should have been invested in R&D or marketing SUNY to the right target group. However, we didn’t dare to risk profits in R&D at this stage of the game. Towards the end of period 3, having realised the need to send SUNY back to R&D, we invested in modifying the product to target PROs market. This should have been done either a period earlier.

In this phase, our company employed only competitive pricing or going rate pricing. In going rate pricing, the firm bases its price largely based on competitors’ prices, charging the same, more or less that major competitors [1] . Having captured Singles market for SURF with adequate production control and competitive price levels, we never felt the need to segment market clearly on the basis of price. SUNY continued to struggle due to incorrect positioning and lack of method in pricing the product. Though in phase 3, we logged the highest return on investment, we weren’t able to sustain the growth in subsequent periods.

Period 4-7

In the SONITE industry, SURF lost its stronghold amongst Singles market. The reason for this was simply that competition positioned rival products for Singles which were superior in quality and more economical. Demand for SURF simply shifted from Singles to ‘Others’ in the Sonite industry. Hence SURF continued to do well in terms of net contribution. The ‘Singles’ which were potentially a very big target group in the process were not being tapped by our company.

We tried to push the modified version of SUNY to PROs and High Earners. A considerable amount of money was invested in advertising and promotions to target the PROs and High Earners for many successive periods on the basis of product design and features. However, PROs and High Earners being very demanding when it came to performance, our product couldn’t match their needs. Thus we had one product SURF that only ‘Others’ seemed to opt for and another SUNY that despite being aggressively pushed towards PROs and High Earners simply didn’t click. Both products weren’t very far apart in price, further adding to the lack of differentiation. We therefore had to re-strategize at this stage on our product portfolio in the Sonite industry.

Our growth rate had seen a dip and the overall net contribution had also begun to decline gradually. The available income would have to be invested in R&D for diversifying in the Sonite industry and re-establishing our presence. This was also the time when we had to launch R&D projects for the Vodite industry. The market leader and our main competitor by now owned 3 successful Sonite brands for 3 distinct target segments and hence it was obvious that a Vodite launch to target Innovators was on the cards for them. We therefore intended to target our first Vodite product at the Early Adopters.

Therefore, this phase was an R&D intensive one for our company. We undertook one each for Sonite and Vodite, thereby directly impacting our ROI and profitability. The product SUSI that was designed keeping needs of Singles in mind didn’t however produce expected results. The product though was fit to match needs of Singles, being a late entrant proved to be a disadvantage we couldn’t overcome. Also, SUSI was the 3rd product from our company and we still had not distinctly differentiated the other 2 (SURF and SUNY) that enjoyed a very high level of brand awareness. We didn’t have the resources to promote SUSI in comparison and thus SUSI failed to capture the market as desired.

Our brand in the Vodite industry ‘VUVU’ was ready for launch in period 6. But due to an oversight on our part, we weren’t able to till period 7. Marketing and advertising built up the awareness, but the delay caused our reputation and stock price to take a hit.

Period 8-11

In this phase, we analysed all our decisions for the Sonite industry so far and discovered one reason for losing market share was lack of clear segmentation and portfolio management. Hence in Vodite, we decided to focus more on analysing consumer segments, their needs, investing in relevant R&D before launch. Our first product VUVU was designed especially keeping Early Adopters in mind as competition had already captured the Innovators. This product was priced right and managed to attract Innovators along with the designated.

Immediately after launch of VUVU, we launched R&D to design a product for followers. While VUVU continued to enjoy considerable market share amongst Innovators and Early Adopters, the new product VUFU was meant to cater to the large market of followers.

SURF continued to be the only product in Sonite that did reasonably well. Our stock price didn’t recover from the losses our company suffered in Sonite. No amount of competitive positioning helped in a mature industry such as Sonite. We had to cut down on advertising and sales force heavily due to impending loans. There was a high amount of brand awareness for our Sonite brands which we failed to capitalize on. However, by controlling production in Sonite ensured we were able to phase out non performing brands such as SUNY without impacting net contribution.

In-depth look at R&D and ‘Product portfolio’ management

To begin with team Panther U didn’t plan for any research activities in the Sonite industry. With 2 products SURF and SUNY, we aimed to capture ‘Singles’, ‘High Earners’, ‘Pros’ and eventually others. The idea was to position existing products accurately to match needs of the above segments and price them competitively. However, marketers often need multiple brands in order to pursue multiple segments. Some reasons to introduce multiple brands in a category include:

1. Increasing shelf presence and retailer dependence in the store

2. Attracting consumers seeking variety who may have otherwise switched to another brand

3. Increasing internal competition within the firm

4. Yielding economies of scale in advertising, sales, merchandising and physical distribution [2] 

Close to period 4 we realized the significance of researching consumer needs, purchase behaviour and then building a portfolio of products to cater to those needs. The products in this portfolio had to be as mutually exclusive as possible and be priced in such a manner that one product doesn’t cannibalize sales of other. By period 4, when a particular competitor demonstrated the power of segmentation and a diverse product portfolio, we decided to invest in our product SUNY and re-launch it in the Sonite industry.

SUNY

In order to market SUNY better to Pros and High Earners, we decided to modify the product and match the design needs of these 2 consumer segments. By period 5, the modified SUNY was available and we tried hard to push the product to the intended target groups. We spent heavily on advertising and promotions for the same. However, competitors products targeted at the same consumer groups were better than SUNY in terms of design specifications and performance. The price of SUNY was rather close to that of SURF and thereby created more confusion in minds of the consumers.

The brand contribution and market share per brand began to dip in the phase ‘period 4-7′. The brand’s performance only deteriorated further in the subsequent periods. SUNY never fully recovered the loss from customers’ initial brand experience. Therefore by period 8, we decided to phase on SUNY. The inventory held a large number of un-sold SUNY products. We completely reduced production on SUNY and focused only on milking the brand for the remaining periods. The cost reduction measures for SUNY also included reducing the sales force allocations, advertising and promotions and advertising research expenditure. Thus by period 10, we were able to completely phase on SUNY from the industry.

SUSI

SURF was the product we exclusively wanted to target Singles with. Before competition came out with a product better suited to the Singles needs, SURF enjoyed good market share. Gradually, competition pushed SURF out and captured Singles. No amount of re-positioning was able to bring SURF closer to the Singles. The market was expected to grow and our company couldn’t ignore the potential. Hence, we launched a product called SUSI which to specifically target Singles. However, in a mature industry like Sonite, when competitor products targeted at Singles were in late growth, early maturity stage of their life cycle, a new entrant like SUSI couldn’t shake the loyalty that the competitor products demanded. We ideally should have positioned SUSI differently which also wasn’t the case. Hence, though we realized the need for a new product in Sonite, we didn’t market the product keeping in mind the life cycle stage that the industry was in.

VUVU

VUVU was the first product in the Vodite industry for which we launched research. We expected competition to attract the Innovators early on and hence our strategy was to target the Early Adopters and subsequently followers. VUVU technologically and in terms of design was far superior to any other in the industry. The cost per unit of producing the product also as a consequence went up. Following non-performance in Sonite industry, the first thing we ensured in Vodite was to invest in superior design. Since our target group was ‘Early Adopters’, we researched on the design specifications that they need and in the price range that they can afford. Though the launch got delayed by one period, the product still did well amongst Innovators and Early Adopters.

VUFU

The followers were a huge segment waiting to be tapped by manufacturers in the Vodite industry. Our current product VUVU though could have been pushed to followers as well eventually, we analysed that the current product design and price was on the higher side for them. We could afford to compromise on the product’s look and feel and performance features thus bringing down the cost per unit substantially. VUFU was targeted mainly at Early Adopters and Followers. Its positioning also was different from VUVU’s thereby ensuring clear perception in the minds of the consumers.

Summary of Strategies

One of our main strategies has been to concentrate and focus on the product performing well in Sonite i.e. SURF and phase out non-performing ones (such as SUNY). All our actions were aimed at improving our return on investment at each stage. We closely monitored our costs at every stage with respect to production costs, inventory holding costs, advertising expenditure and manpower expenditure. Each stage of the product life cycle calls for different marketing strategies. The introduction phase is marked by slow growth and minimal profits. If successful, the product enters a growth stage marked by rapid sales growth and increasing profits. There follows a maturity stage in which sales growth slows and profits stabilize. Finally, the product enters a decline stage. The company’s task is to identify truly weak products; develop a strategy for each one; and phase out the weak products in a way that minimizes hardship to company profits, employees and customers. [3] 

We aimed at matching competitors’ performance and gradually increasing our profitability. In many respects, we could describe ourselves as Market Followers and specifically as ‘Adapters’. The adapter takes the leader’s products and then adapts or improves them. An adapter often grows into a future challenger, as demonstrated by many Japanese firms [4] .

To compete more effectively, many companies are embracing target marketing. Instead of scattering their marketing efforts, they are focussing on those customers they have the greatest chance of satisfying. Effective target marketing requires that marketers:

1. Identify and profile distinct groups of buyers who differ in needs and preferences. (market segmentation)

2. Select one or more market segments to enter (market targeting)

3. For each target segment, establish and communicate the distinctive benefits of the company’s offering [5] .

Our strategies in Vodite were almost always accurate in delivering the expected results, whether it was about which group to target, what design features to implement or how to position. Clear segmentation and aggressive advertising at the time of launch ensured high brand awareness. Despite losses in Sonite, we managed to control costs, stay afloat and concentrate on improving brand contribution for our Vodite brands.

Find Out How UKEssays.com Can Help You!

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

View our services

We figured our early on in the simulation that continuously monitoring potential demand and inventory levels is extremely crucial to maintaining optimum production levels. This strategy worked in our favour right through the simulation exercise. Consumer shopping behaviour, estimated market size and characteristics of the target group contributed to our analysis on which product and features to push to which consumer segment.

Though we took off to a good start, a few wrong decisions mid way led to us slipping to position 2/3 by the end of the simulation.

Appendix

Overall Performance Snapshot

Sonite Snapshot

Vodite Snapshot

Company analysis: Britannia Industries Ltd.

Britannia industries Ltd. has its roots in Kolkata in 1892, being founded as a biscuit company. It has been jointly-owned by DANONE group and the Wadia group since 1997. The company is solely focused on packaged food.

Overview of the Indian Biscuit Industry:

The growth of biscuits in the past couple of years has been rapid. The penetration of branded biscuits has increased across both the economy and the premium segments, with lesser demand for unorganised biscuits across the country. Biscuits evolved from being just tea-time snacks to snacks that can be eaten at any time of day. The introduction of biscuits in smaller pack sizes and pouch-like packs also encouraged out-of-home consumption. Biscuits are perceived to be nourishing and healthier than other snack products such as chocolate confectionery, ice cream and sweet and savoury snacks, leading to double-digit growth in both volume (1104.6 thousand tonnes in 2008) and value terms in 2008 (70503.5 million in 2008).

Biscuit Category:

Sweet Biscuits

Plain Biscuits

Cookies

Chocolate coated Biscuits

Sandwich Biscuits

Filled Biscuits

Savoury Biscuits and crackers

Plain biscuits and savoury biscuits are increasingly being consumed by consumers in the lower middle income segments, and sandwich biscuits and cookies being increasingly consumed by middle- and upper-middle-income consumers. Plain sweet biscuits, led by glucose and Marie variants, remain the largest selling biscuits type. Filled biscuits saw the fastest retail value growth in 2008, as these products are growing from a very low base in the country. Recent product launches such as Treat Fruit Rolls and Parle Golden Arcs, along with Cadbury’s Bytes, have helped stimulate growth in this nascent category.

The reason I chose Britannia Industries Ltd. was to take a closer look at its product portfolio management. Britannia is by far one of the most successful companies in the biscuits and dairy products space in India. The company has been a market leader in product and format level innovation for the past decade. Some of the marketing decisions made by the company in the past few years can be termed as bold but they worked in their favour.

From the year 1997 to 2008, the company focussed on the core positioning “Eat Healthy, Think Better”. For more than a decade, Britannia focussed on building brands in the biscuits category as biscuits accounted for almost 90% of its sales. Despite a lull till Vinita Bali took over the helm in 2005, Britannia’s success in creating brands that have challenged existing monopolies and thrived despite socio-cultural challenges is commendable. In this period some of the brand launches that deserve a mention are:

1. Launch of Tiger biscuits to counter Parle G

Since the time it was launched, Parle G has been the largest selling glucose biscuit in India. A 100 gm pack of Parle-G was sold for a price of Rs. 4 for 25 years till 1994 and Price became the USP of the product. It captured over 75% of the Indian glucose biscuit market and a number of organizations and smaller companies tried to counterfeit its packaging and brand name to capitalize on the success of this biscuit.

For Britannia to succeed in the biscuit business, it was imperative to launch a glucose biscuit as they account for over 44% of the biscuit volumes in the country. Since its launch in 1997, Tiger became one of the largest brands in Britannia’s portfolio giving it an entry into the value segment for biscuits. The launch of Britannia Tiger was characterized by large media spends and sampling to fight the competition from Parle G. Additionally, distribution was strengthened to be able to reach the availability of Parle G. Small Shops and Panwallas were key targets for displaying and selling Tiger biscuits.

Today with a series of launches and brand extensions the Tiger portfolio now boasts of the following products:

1. Tiger Coconut

2. Tiger Creams

3. Chota Tiger

4. Tiger Banana

2. Launch of Britannia 50-50 to counter growth of Parle in the sweet and salted biscuits category

The original sweet and salted biscuit launched in 1972 was creating ripples around the country with its innovative product and huge media spends. Krackjack was the second largest biscuit in the Parle portfolio. Britannia in its fray to garner volumes launched Britannia 50-50 in 1993 marking its entry into the crackers segment. The brand took the platform of a 50-50 that satisfies all contradictory needs. The ads generated high recall and helped the brand garner the expected pull from the market. Since then, there has been a constant fight between Krackjack and 50-50 for the no. 1 position in the category. Both brands subscribe to the fun philosophy and both are light on the wallet. In effect there was little or no differentiation between these competitor products.

In order to leap frog ahead of Parle in the category, Britannia launched Britannia 50-50 Maska Chaska which gave it a product attribute Parle lacked for years. The new variant was promoted heavily and that gave a natural push to the original brand as well. Britannia’s crackers segment suddenly overshadowed the Krackjack. Over time the 2 brands have had series of packaging and rebranding exercises but the battle continues to be close with Britannia currently leading the pack with over a third of the market.

One example of Britannia’s aggressive stance on the category was the co-branding initiative with KBC on star plus which gave the brand a 20% increase in volumes in 2000-01 making the organization unable to cater the demand. The Britannia 50-50 and Parle Krackjack story is all about branding, innovative campaigns, tongue in cheek ads and below the line promotions.

3. Jumping onto the health bandwagon

The increasing health consciousness among urban consumers is fuelling the growth of light, multigrain and diet biscuits. The growing emphasis of health and wellness is evident in the number of new launches with the biscuit industry making use of this as a marketing factor in biscuits. The health biscuit category is about 12% of the total biscuit market (2008).

Britannia as a part of its health and wellness biscuit portfolio launched iron-fortified Britannia Tiger Banana biscuits – which contains real banana and positioned as having a high iron content, Britannia Nutrichoice 5 Grain sweetened with honey and Britannia Nutrichoice Sugar Out sweetened with Sucralose, along with Low Fat Dahi. These products aimed to combine nutrition with convenience and indulgence.

In this manner, Britannia has expanded its menu to include a wide array of products in biscuits and dairy formats. There are a number of products in the pipeline and the company firmly believes in pushing the boundaries of innovation to make people’s lives healthier. Britannia’s commitment to consumer research is visible in the widespread consumer acceptance of all its latest product launches.

 

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: