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MARKETING OF FMCG AND CONSUMER DURABLE GOODSUSING STRATEGIES OF BLUE AND RED OCEAN
Presented By:-
GROUP 9:-Vandana MalpaniPriyanka DhootNadeem UsmaniJitendtra MishraSantosh Sarvankar
Group 3:-Vandana GhanshaniManoj VarmaNarender SainiRahul GuptaKinjal RathodSachin Sharma
The Strategic PlanningStrategic Planning is a comprehensive statement and it is broadly classified into 4 phases:
PHASE 1 PHASE 2 PHASE 3 PHASE 4
Strategy Formulation
Strategy Development
Strategy Implementation
Strategy Evaluation
Develop mission & vision statements and define organizational values
Conduct SWOT, establish long-term objectives, & identify strategies
Establish short-term objectives, develop action plans, allocate resources and motivate employees
Review strategies, measure performance and take corrective action
Trust
Leadership
Teams
Strategic Thinking
SUSTAINING INNOVATION
SOCIETAL CHANGE
DISRUPTIVE INNOVATION
ORGANIZATIONAL CHANGE
Sustaining Innovations Represent the majority of technological and
business model innovations within most industries.
Examples of strategies include Intel’s continued development of faster microprocessors.
Sony’s pursuit of next generation Walkmans.
These innovations always help established players sell more products and earn more profits.
Example:- Notebook Computers, Wireless Telephone, Printed Greeting
Cards.
Disruptive Innovations
Disrupt and redefine products and services that are not as good as those currently available.
These types of innovations are typically simpler, more convenient, and often times less expensive as compared to current offerings.
Examples- Downloadable Greeting Card’s, Mobile Telephony, Digital Printing.
Blue Ocean Strategy is a business strategy book written by W. Chan Kim and Renée Mauborgne.
Create uncontested market space/untainted by competition.
Make the competition irrelevant.
Create and capture new demand rather than fought over.
Breake the value/cost trade off.
Align the whole system of a company’s activities in pursuit of differientiation and low cost.
The corner-stone of Blue Ocean Strategy is 'Value Innovation’.
Examples: Tata Nano, Kaya Skin Clinic, Red BullBlue Ocean•Effort to bake a bigger pie.
Blue
Oce
an S
trat
egy
4
Think total customer solution.
Think about what is happening before, during
and after the product is used.
1
Investigate market boundaries. Look at alternative/related industries, e.g. circus and theatre.
3
Revise customers.Buyer, user, influencer etc.
5
Make a buyers segmentation: emotional or
functional.If emotional then add
functionality. If functional then add emotion.Dish TV ,insurance
ads,johnson johnson,Surf
2
Look at ‘strategic groups’ within an industry (=companies pursuing a similar strategy).
Blue Ocean
Blue Ocean Strategy LENSES
Blue Ocean Strategy Execution Key Principles
Build execution into strategy. (Should be realistic ,should be impelementable)EG : Red BULL
Blue Ocean
Highlight and manage organizational hurdles e.g. change of culture.Instead of considering an areated drink an energy drink being accepted whereas indians consider eneergy in healthy eating habits so changing the culture May consider as an alcholic drink till it reaches to mind of the end consumers
Consider risks in everything you do.A drink to compete with areated drink may or may not workFailure example : Blue Pepsi.
Visual communication.
An effective blue oceans strategy has three complementary qualities:
Focus
Divergence
Compelling tagline
Value Innovation Should Monitor your
competitors but don’t use them as benchmarks.
Competing should be eliminated.
Don’t offer product and or service features just because the competition is doing so.
Think fresh: what should be starting new today?
Total Solutions to customers problem
Cost
ValueInnovation
Buyer Value
Example of value innovation
Vicco Turmeric
Kailas Jeevan Ayurvedic Products
Vicks Vaporub
How to find new Value Curve Four Actions Framework:
Eliminate◦Which of the factors that the industry takes for
granted should be eliminated?Reduce
◦Which factors should be reduced well below the industry's standard?
Raise◦Which factors should be raised well above the
industry's standard? Create
◦Which factors should be created that the industry has never offered?
Circus Industry
Traditional Circus:
Target Market : Children Dependent to : Star
performance,animal shows
High fun & humor High thrills & dangers
Low price, high cost
Cirque du Soleil: Target Market : Adults Not dependent to Star
performance & animal shows
Reduce fun & humor Reduce thrills & dangers Unique Venue Theme & Theater
High price, low cost
CIRQUE another snapshots of this tool in action and shows what it
reveals.ELIMINATE
Star performers Animal shows Concession sales Multiple show arenas
REDUCE Fun & Humor Thrill & Danger
RAISE Unique Venue
CREATE Theme Refined environment Multiple productions Artistic Music & Dance
Examples of blue ocean strategy Red Bull Energy drink changed the way people use to see
the Colas.(carbonated soft drinks). Nestlé's Instant Coffee. Dove soap(P&G) - made of 100% moisturisers. Himalaya Drugs: They created an entirely new market of
consumers who prefer medically proven herbal medicine. Following t heir lead, all FMCG majors came out with their own little herbal range.
I-phone. Sony Walkman. Reva Electric car. Tablet pc with touch screen.
Red Ocean
•Fight for the biggest piece of the pie.
Compete in existing market space (war for marketshare).
Industry boundaries are defined and accepted.
Market space gets crowded, prospects for profits and growth are reduced.
Products become a commodities and cutthroat competition turns the red oceans bloody.
Beat the competition.
Exploit demand.
Make the value/cost trade off.
Align the whole system of a company’s activities with it’s strategic choice of differientiation or low cost.
Examples: Parle, Fritolay,Pepsi
Red
Oce
an S
trat
egy
Red Ocean Strategy
Assumes that an industry’s structural conditions are given and that the firm are forced to compete within them. Red Oceans will continue to dominate company’s strategic agenda even as the business are eager for creating blue oceans takes on new urgency.
Examples explaining Red Ocean Strategy Skin Care in India: In service industry. Marico
started Kaya Skin Clinic which has turned a red ocean.
Star bucks coffee shops, Café Coffee Day, Barista
Horlicks, Bournvita, Complan
Telecom Vodafone, Airtel now is spice
TV channels (promotion could be different like colors)
Red Ocean Strategy Blue Ocean Strategy
Companies from Red to Blue
Nintendo has stated that the Wii ,7th generation video game console April 27th 2006. The system is unique in that will be cheaper than the PS3 and Xbox 360, with the basic Xbox 360 at $299 USD and the basic PS3 at $499 .The system is unique in that the console's controller, can detect its position and orientation in three-dimensional space.
Dell Computers Customize laptops.
Nirma Cheap washing powder when surf existed by HLL.
Women Kelloggs(weight reduction).
Calcium Sandoz for Women(stronger bones and teeth).
Women Horlicks(energy drink).
What is FMCG… 1. Fast moving consumer goods. 2. Goods that is consumed every day by the
average consumer. 3. Goods need to be replaced frequently,
compared to those that are usable for extended periods of time.The sector includes 1. Groceries, 2. Beauty products,3. Home care companies. 4. Cleaning products.
Cont..... 4. Products sold quickly at relatively low cost.
5. Profits made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be large.
Durable Goods A durable good or a hard good is a good which
does not quickly wear out, or more specifically, it yields services or utility over time rather than being completely used up when used once.
Perfectly durable goods never wear out. Eg : Brick
Durable goods are typically characterized by long interpurchase times--the time between two successive purchases.
It Includes:1. Cars, 2. Appliances, 3. Business equipment, 4. Electronic equipment, 5. Home furnishings and fixtures, 6. Houseware and accessories, 7. Photographic equipment, 8. Recreational goods, 9. Sporting goods, 10.Toys and games.
What do companies do for a blue ocean strategy? Eg: Tata Nano
What factors should be raised well beyond the industry standard?
Raise
What factors should be created that the industry has never offered?
Create
What factors should be reduced well below the industry standard?
Reduce
Low Price Car never introduced.
Prestige at low price(pride of the 1st car)
Purchase CostFamily Car (Taxi ko karo tata).
Parking Space
Repairs & Maintenance Running Costs
Critizimize that it can never be made India never the right skills ,physical and social infrastructure for their worlds low cost car
What factors should be eliminated that the industry has taken for granted?
Eliminate
Case Study Of Red ocean Strategy Eg:- Maruti Suzuki (Consumer Durable) While the customers expect their cars to be reliable, fuel efficient, with low cost of ownership, requiring affordable spare parts and service network, at the same time they look for cars that are trendy, stylish and contemporary.
Maruti and Suzuki’s strategy has been to widen the offerings for the Indian customers.
A wide product range with superior features, is helping the company to tap entry-level customers and yet meet the evolving lifestyle needs of the customers who are looking to upgrade.
“Complete Car Maker”. Product Portfolio
Under Rs. 3 Lakhs : Entry level / small cars: Maruti 800, Alto, Omni Rs. 3-5 Lakhs : Utility cars: Maruti Zen, Wagon R, Versa Rs. 5-10 Lakhs : Midsized cars: Swift, Maruti Baleno, Esteem Rs. 10-20 Lakhs : Luxury / Sports (SUV) cars: Grand Vitara
What do companies do for a blue ocean strategy? E.g.: Nestle Instant Coffee(Cold and Hot Coffee)
What factors should be created that the industry has never offered?
Create
What factors should be reduced well below the industry standard?
Reduce
What factors should be eliminated that the industry has taken for granted?
Eliminate
• Easy to Carry (Sachets)• Instant Coffee saves time and less of preparation with same taste .
• Same Quality at low price• Easy Packaging with zip lock
• Change the standards of making coffee.• Overheads costs reduced with same taste and quality
• Never thought that consumers would accept it More prone to traditional methods of making coffee
What factors should be raised well beyond the industry standard?
Raise
HALDIRAM’S
Reasons for Easy Availability.
Supermarkets , Provision stores , Bakeries, Sweet Shops
,
Ice cream parlors , etc.
Public places like Bus & Railway stations.
Direct -Marketing through E-Commerce.
at National websites.
indiatimes.com
at Regional Specific websites.
mumbaiflowergifts.com (for Mumbai)
Cont…
Different Promotion Tools Used Enhancing the visibility of Haldiram Brand
Using touchy punch lines
Attractive packing
Benefits of technology used
Being Innovative
THE ROAD AHEAD
Competition in ‘Ready -to-Eat’ snack foods intensified.
Faced competition from
Foreign players: Frito Lay India Ltd SM Foods
Domestic Players: Britania Industries Ltd Bikanerwala Foods
THANK YOU