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MARKETING OF FMCG AND CONSUMER DURABLE GOODS USING STRATEGIES OF BLUE AND RED OCEAN

Copy of Red and Blue Ocean

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Page 1: Copy of Red and Blue Ocean

MARKETING OF FMCG AND CONSUMER DURABLE GOODSUSING STRATEGIES OF BLUE AND RED OCEAN

Page 2: Copy of Red and Blue Ocean

Presented By:-

GROUP 9:-Vandana MalpaniPriyanka DhootNadeem UsmaniJitendtra MishraSantosh Sarvankar

Group 3:-Vandana GhanshaniManoj VarmaNarender SainiRahul GuptaKinjal RathodSachin Sharma

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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

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Trust

Leadership

Teams

Strategic Thinking

SUSTAINING INNOVATION

SOCIETAL CHANGE

DISRUPTIVE INNOVATION

ORGANIZATIONAL CHANGE

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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.

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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.

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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

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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

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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.

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An effective blue oceans strategy has three complementary qualities:

Focus

Divergence

Compelling tagline

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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

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Example of value innovation

Vicco Turmeric

Kailas Jeevan Ayurvedic Products

Vicks Vaporub

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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?

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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

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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

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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.

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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

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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.

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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)

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Red Ocean Strategy Blue Ocean Strategy

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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).

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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.

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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.

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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.

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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.

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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

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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

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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

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HALDIRAM’S

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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…

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Different Promotion Tools Used Enhancing the visibility of Haldiram Brand

Using touchy punch lines

Attractive packing

Benefits of technology used

Being Innovative

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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

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THANK YOU