KEYLEARNINGS

MODULE 1

COMMUNICATIONMATTERS

• ITS NOT EVERYTHING. ITS ONE THING!

• BE: COHERENT, INTERACTIVE, ENGAGING

• DON’T BE: POOR PACING, WRONG SLIDES, LESS PREPARATION

Presentation Zen

• Importance of spreading ideas

• Importance of simplicity, restraint, naturalness

• Importance to creativity, simplicity

Presentations should be….

Nothing superfluous

Minimalistic

Beauty mattersContent matters

• Adopt a child’s

creativity

• Preparations

• Visuals

• Delivery

Keep messages sticky

• Simplicity

• Unexpectedness

• Emotion

• Credibility

• Concreteness

• Story

“Jobsian” Method

Tahakashi method

A presentation needs..

• Emotions along with logic

• Passion

• Enthusiasm

• Being in the moment

Go Global Or Not?

WHY NOT??

• Need to learn other languages and law

• Volatile currencies

• Redesign the products

• Political and legal uncertainties

Why should we?• Better opportunities

• Larger customer base

• Reduce dependencies on one market

• Counterattack global competitors

• Consumers going abroad

• Government policies

Which markets to enter?

Waterfall approach

• Carefully plan extension

• Less likely to strain human and financial resources

Sprinkler approachUsed when first mover advantage is crucial and a high degree of competitive intensity prevails

Main risk: substantial resources needed, planning entry strategies

BRIC Nations

BRIC nations,Indonesia, South Africa.

Unmet needs —> potential markets

IDENTIFY ”INVISIBLE” CUSTOMERS

Differences between marketing in developed and developing markets

20%

80%

Developed nations

Developingcountries

Revenue from developing markets

• PepsiCo, Kellogg’s - 5-15%• Kraft Foods - >25%• Nestle- >$1 Billion

Key developingmarkets

87% low incomegroups

Was once the 2nd largest economy

Costlytransportation

BRAZIL

RUSSIA

PROS CONS

Largest exporter of naturalgas,oil, and steel.

Growing middle class andtheir salaries

Income $700/million

1. Poor infrastructure

2. Dwindling workforce

CHINA

Demand higher qualityproducts

Indonesia

Third fastest growing economy

14,000 islands, hot and humid climate leads to inefficient distribution

SouthAfrica

Bad roadsWar, famine, AIDS

VOLATILE CURRENCY

WHICH MARKETS TO ENTER?

Indirect exporting

DirectExporting

Licensing

Joint venture

s

DirectInvestments

CHOICES

Indirect and direct exports

Domestic based export merchants

Domestic based export agents

Cooperative organisations

Export management companies

Licensing

• Licensor issues a license to a foreign company to use a

manufacturing process, trademark, patent for a fee or royalty.

• Licensee gains production expertise/ well-known brand

ManagementContracts

Contract manufacturing

Franchising

Joint Ventures

One of the most powerful strategic tools

Good partners share “brand values” help maintain brand consistency across markets.

Direct Investment

Foreign InvestmentUltimate goal is direct ownership

1. Secures cost economies through cheaper raw materials, incentives, etc

2. Strengthens image in host country because it creates jobs

3. Deepens its relationship with government, customers,local suppliers, etc.

4. Retains full control over its investment

5. Firms assures itself itself of access to the market

To what extent should a company adapt its products and marketing strategies to a

country?

2ways

Global similaritiesand differences

Global productstrategies

MarketingAdaptation

• Brand name

• Product features

• Pricing

• Packaging

• Advertising

High end in USA, Mediocre in Dutchyouth in Japan,reliability in USA

High end in Chinamiddle class car in USA

Product adaptation

Less carbonated and sweeter in few countries

Brand element Adaptation

Global Pricing Strategies

• Price escalation

• Transfer prices

• Counterfeit products

• Gray markets

Price escalation

Set a uniform priceeverywhere

Market-based and cost-basedpricing in each country

Arm’s lengthprice

DumpingTRANSFER

PRICES

GRAY MARKETS

A. Harms distributor’s relations

B. Poses risks to customers

C. Accounts for 8% of total global IT sales of $725 billion.

Counterfeit products

GLOBAL DISTRIBUTION STRATEGIES

Country of origin effects

Country of origin effects

Nissan:Japan :: Japanese driven art and engineering

Consumer perceptions

If its French, it’s stylish!

Manage InternationalRelations

Exportdepartment

Global Organisation

International Division

Corporate staffarea specialist

Vice-President

President

Expertise on geographicalarea

Ensures worldwide salesof each product group

Set Goals andBudgets

InternationalSubsidiariesSubsidiary President

reports to theDivision President

Global Integration

NationalResponsiveness

“ ‘Not invented’ here is a good thing, ‘Invented here’ is also a good thing, but ‘improved here’ is the best”- Jack Daniels

Stages of New-ProductDevelopment

Challenges

• The Innovation Imperative

• New Product Success

• New Product Failure

Innovation Imperative

• Works with potential customers

• Lets employees choose projects and appoints project leaders and

teams• “Dabble” time

New-ProductSuccess

• Established companies use incremental companies

• New companies use disruptive technologies

What can a company do??

Well-defined product concept.

Technological and marketing strategy.

New-Product Failure

• Ignored

• Misinterpreted

• High development costs

• Poor design

Evista, a failed contraceptive, became a $1 Billion-a-year drug for osteoporosis!

Stages in new productdevelopment

Idea Generation

• Greatest opportunities——> Unmet needs

• Demand-first Innovation and growth (DIG)

• Nokia’s “Club 10”

Concept to Strategy

• Positional map

• Rapid Prototyping

• Conjoint analysis

• Business analysis

Marketing strategyDevelopment

• Target market’s size, structure,behaviour

• Planned price, distribution strategy, marketing strategy for 1st year

• Long run sales and profit goals and marketing-mix strategy

Development to commercialisation

Product development• Quality function

deployment (QFD)

• Physical prototypes

• Market testing trial, first repeat, adoption, and purchase frequency

• sales-wave research, simulated test marketing, controlled test marketing, and test markets

Commercialisation

• When (Timing)

• Where (Geographical Strategy)

• To whom (Target- market prospects)

• How (Introductory market strategy)

Manage new-productdevelopment

New product development

Complete process of bringing a product to the market. Improved or replacement products and services that

maintain or build sales.

• Identify unmet needs

• Research your ideas

• Tax efficient ways to support innovation

Managing new ideas

• Interact with others

• Interacting with employees

• Studying competitors

• Adopting creative techniques

• Use idea screening

Support innovation with finance and tax efficient ways

A new idea should be protected with Intellectual Property Rights (IPR)

• Adoption: an individual’s decision to become a regular user of a product and is followed by the consumer-loyalty process.

Steps:

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. adoption

Factors affecting

• Readiness to try new products and personal influence

• Characteristics of the innovation

• Organisation’s readiness to adopt innovations

ADOPTER GROUPS

To gain “street card” with teen skaters, it sold exclusively to independent shops, advertised nowhere but sports magazines.

Evolution of “DOVE”

Earlier Advertisements

Silvia Lagnado, global brand director of Dove, led a worldwide investigation into women’s responses of beauty

industry.

Natural

Aver-age

At-tractive

Fem-inine

Good-

look-ing

Cute Pretty

Beautiful

So-phisticated

Sexy Stunning

0

0.1

0.2

0.3

0.4

Average

Attractive

Good looking Cute

Beautiful

Sophisticated

Stunning

Findings…

Dove Tick Box Campaign (Stage 1)

Change the way world sees beauty (Stage 2)

“We want to challenge the definition of the beauty. We believe that beauty has become too narrow in definition. We want to defy the stereotype that only young, blond and tall are beautiful.”

-Philippe Harousseau, Dove’s Marketing Director

Stage 3

Stage 4“Evolution” film

WHY?

• Declining sales

• Increased competition

• Resulting advertising clutter

• Stagnation

• Brand positioning

“Real ads by real women”

• Try the product

• What does “luxury” mean to you?

• Explore the world around you

Media Planning

• Oprah Winfrey dedicated a whole show to low self-esteem

• The Ad was one of the most downloaded commercials on Youtube.

Bought all billboards in Grand Central Station

“..behind a 700% risein sales of Dovecreams in the

first half of the year

“…within amonth sales ofthe Dove range

of firming creams had doubled.”

“…surpassed $1 billion mark in 2004 globalsales… expected to gain between $60 million and

$70 million in lotion sales..”

Results..

PUBLIC RELATIONS

Global Self-esteem Fund

Brand Development System

Development

Product Category

Brand

Unilever

Building thebrand in

specific marketsBringing the brand to life, in

marketplace

Developing idea,innovation

SWOT Analysis

Strengths Weakness

• Unconventional

• Effectiveness of advertising• Emotional touch

• Contradictory• Women featured were

comparatively thin

ThreatsOpportunity

• Male customers

• Continuous Innovation

• Risk for being called a brand for

“fat” girls

• Marketing Risk• Undermining the aspirations

of women

Key Learnings

TakeInitiative

Global Relevance

Case basedMarketing

SocialSensitivity

Recommendations for future marketing

Connect campaign to Dove Products

Move away from issues and focus more on products: MakeDove Self-esteem Fund separate from Dove products

Keep real people and customers involved: Take advantage of online buzz with separate websites for products and funds.

Connect women to specific products:“How does Dove make you feel beautiful?”

Problem:Lost control of the

campaign. Themessage overpowers

the brand

SolutionReal women,Real BeautyCampaign tofocus on how Dove productshelp women

achieve beauty

Importance to: Customer Relations Management

Mountain Man Brewing Company: Bringing theBrand to Light

Mountain Man Beer Company

• Legacy brew with a strong brand

• Premium segment market leader in West Virginia for almost 5o years

• Known as West Virginia’s Beer

• Family owned business

• Core customers: Blue collar working men

High brand equity in premium segment

2% decline in revenue

4% growth in light beer segment due to youth preference

Possess 74% market shareof the overall brewing

market

84% market share in thelight beer market

Rely heavily on broadcasting marketas well as product diversification

COMPETITORS

1,56,20,253 42%

85,53,948 23%

33,47,197 9%

46,48,885 12.5%

5,57,866 1.5%

44,62,929 12%

3,71,91,077 100%

Anheuser-Busch

Miller

TOTAL

Imports

Craft/Specialitybrewers

2nd tier Premium

Coors

East Central Region

Market Research

• Authenticity, quality, and a unique West Virginia “toughness”- core attributes

• Grassroots marketing is more effective

• Brand loyalty :53%

East CentralRegion % Total 6-year

CAGR

LightBeer 1,87,44,303 50.4 4%

PremierBeer 73,26,642 19.7 4%

Popular 43,51,356 11.7 5%

ImportedPremium 44,62,929 12 6%

Superpremium 23,05,847 6.2 9%

TotalBarrels 3,71,91,077 100.0

Introduce light beer under Mountain Man

Cons

• Product cannibalisation

• Brand erosion

• Loss of core customers

Pros

• Increase in revenue

• Low advertisement costs

• Cater untapped market

High advertising costs

Have to build a strong brand

revenue

Untapped markets

Introduce under a different brand name

ConsPros

Costs• SG&A: $900,000 annually

• Advertising: $750,000 for 6 month advertising

• Variable cost: $66.93/barrel

• Variable cost of Light beer: $66.93+ $4.69 = $71.62

• Market price of new light barrel: $97/barrel

Revenue

• Market price: $97/barrel

• Revenue: $97- $71.62 = $25.38

• Total Investment: $1.65 million

• Break even volume: 65,012 barrels

Risks attached

• Can get lost in the sea of new product introductions by big companies

• Overly Optimistic

• Advertising not aggressive enough

Analysis after math

• Mountain Man Light Beer is expected to cover all its investment costs and become profitable past 2007

• Uplift brand value and equity

Takeaways from this internship:

• Improved presentation skills

• Better understanding of marketing

• Fantastic case analyses• Opportunity to work with eminent

faculty

Special Thanks to

PROF Sameer Mathur,IIM Lucknow