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BOWMAN’S STRATEGY CLOCK PERSONAL CARE
KESHAV BAGRI [H006] ASHWINI DESHPANDE [H012] AKSHAY MATHUR [H035] ROSHAN P R [H045] RISHI SAMPAT [H049] KSHIPRA SINGH [H060]
GROUP 8
BOWMAN’S STRATEGIC CLOCKBowman’s strategy clock is a model used by a company while designing marketing strategy to analyse its competitive position in comparison to the offerings of competitors
As with Porter's Generic Strategies, Bowman considers competitive advantage in relation to cost advantage or differentiation advantage.
Bowman's Strategy Clock represents eight possible strategies in four quadrants defined by the axes of price and utility value.
The resulting star shape is reminiscent of a clock face, giving this tool its name
BOWMAN’S STRATEGIC CLOCK
Position 1: Low Price / Low Added Value
It's a position they find themselves forced to compete in because their product lacks differentiated value. The only way to "make it" here is through cost effectively selling volume, and by continually attracting new customers.
Position 2: Low Price
Companies competing in this category are the low cost leaders. These are the companies that drive prices down to bare minimums, and they
balance very low margins with very high volume.
Position 3: Hybrid (moderate price & differentiation)
Hybrids are interesting companies. They offer products at a low cost, but offer products with a higher perceived value than those of other low cost competitors. Volume is an issue here but these companies build a reputation of offering fair prices for reasonable goods.
Position 8: Low Value/Standard Price
Any company that pursues this type of strategy will lose market share. If you have a low value product, the only way you will sell it is on price. You can't sell day-old bread at fresh prices.
Position 7: High Price/Low Value
This is classic monopoly pricing, in a market where only one company offers the goods or service. As a monopolist, you don't have to be concerned about adding value because, if customers need what you offer, they will pay the price you set, period.
Position 6: Increased Price/Standard Product
Sometimes companies take a gamble and simply increase their prices without any increase to the value side of the equation. When the price increase is accepted, they enjoy higher profitability
Position 4: Differentiation
Companies that differentiate offer their customers high perceived-value. To be able to afford to do this they either increase their price and sustain themselves through higher margins, or they keep their prices low and seek greater market share.
Position 5: Focused Differentiation
These are your designer products: High perceived value and high prices. Consumers will buy in this category based on perceived value alone. The product does not necessarily have to have more real value, but the perception of value is enough to charge very large premiums.
FMCG INDUSTRY OVERVIEW
Food ProductsPersonal CareFabric careHair CareHouseholdsOTC ProductsBaby CareOthers
US$ 30 billion in 2011
US$ 74 billion in 2018
22%
Personal Care
Skin Care
Bath And ShowerColor Cosmetics
Hair Care Oral CareFragrance
Key Growth Drivers for Personal Care Sector in FMCG
Rise in disposable incomes resulted in shift from essential to premium products
Growing awareness and easier access Changing lifestyles Rise in organised retail
HAIR CARE SECTOR
Low
Low
High
High
Perc
eive
d Va
lue
to th
e Co
nsum
er
Price
Low Price / Low Added Value
Low Price
Hybrid Differentiation Focused Differentiation
Increased Price/ Standard Product
High Price/Low ValueLow Value/Standard Price
HUL
HUL
HUL
P&GP&G
Marico
Dabur
CavinKare
CavinKare
Marico
HUL
L’orealL’oreal
HAIR CARE SECTOR - ANALYSISMajor presence in the upper half of the clock, focus on scale as well as differentiation.
Sunsilk, Clinic Plus and Dove major contributors to HUL’s market share of 47%
Although known for scale, HUL launched TRESseme only to those clusters where adoption of beauty trends was gathering momentum
Broad strategyTo obtain scale in mass brands such as Sunsilk but premium positioning and restricted distribution for products such as TRESemme
P&G has presence in the more premium segments and does not offer cheaper options in this category. Absence in the left half of the clock
Pantene has a major share in P&G total revenues. Overall, market share of P&G is 27%
Major presence in the higher priced products. Focus on higher margins. However, lack of innovation has affected its market position
Broad strategyP&G has looked to follow a mixed pricing strategy globally. It cuts prices in India while increases the same in markets such as Russia or Brazil
Major presence in the left half with products pricing on the lower side, that is, the budget segment
Marico has four major brands in the value added hair oil category (accounting for 29% of sales). Parachute , Nihar, Hair & Care are the major brands
Parachute hair oil caters to the budget segment while the value added portfolio caters to a largely urban, premium consumer segment seeking specific benefits from hair oil
Broad strategyIt builds prototypes of its products and launches them within a small segment of customers before going for a nation-wide launch
COLOR COSMETICS SECTOR
Low
Low
High
High
Perc
eive
d Va
lue
to th
e Co
nsum
er
Price
Low Price / Low Added Value
Low Price
Hybrid
Differentiation
Focused Differentiation
Increased Price/ Standard Product
High Price/Low Value
Low Value/Standard Price
COLOR COSMETICS - ANALYSIS
1909 20141964 1995 2006
To increase its market share in North America
Positioned as a Luxury Brand
To cater to the growing needs of quality products
Providing premium product for masses
Positioned as lifestyle product targeting teenagers and young girls
To compete with Indian brand Lakme
Positioned as a cosmetics brand with natural ingredients
To compete with brands like Bath and Body Works
Low
HighPe
rcei
ved
Valu
e to
the
Cons
umer
Low Price / Low Added Value
Low Price
Hybrid
Differentiation
Focused Differentiation
Increased Price/ Standard Product
High Price/Low Value
Low Value/Standard Price
SOAPS SECTOR
Low HighPrice
SOAPS SECTOR - ANALYSIS
Lifebuoy Pears Lux Hamam Rexona Cinthol Medimix Liril Dettol Santoor Dove Fiama Di Wills
Superia Vivel1820
1840
1860
1880
1900
1920
1940
1960
1980
2000
2020
0
10
20
30
40
50
60
70
80
18951902 1905
1931
19471952
19691974
19811986
1995
2007 2007 2008
Evolution of Soap market in India Key Takeaways
HUL is the undisputed market leader in soap
market due to first mover advantage
Due to almost no competition, it consolidated its
leadership position by getting a foothold in all
the categories
Cinthol entered to compete with Rexona
Liril entered to compete with Cinthol
Fiama to compete with Pears
IMPLEMENTATION – USING THE CLOCK !
Are you a price
leader?
Sustaining a cost leader
position
Exploit all of the cost
advantages?
Risk of perception of too low
value?
Segment wise –
Limited Cost advantage?
Well-identified
target market?
What your target
market truly values?
Perceived value of
competitor's products?
Differentiation areas that others
can’t copy?
Alt methods of differentiation
COMPETE ON PRICE ? COMPETE ON VALUE ?Designing a marketing strategy to analyse its competitive position vis-a-vis competitor offerings
Low Price / Low Added Value
Low Price
Hybrid
Differentiation
Focused Differentiation
Increased Price/ Standard Product
High Price/Low Value
Low Value/Standard Price
