8/7/2019 Case-Study on Voltas AC

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TEAMNO

5

IIT

KHARAGPUR

8/7/2019 Case-Study on Voltas AC

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AbstractFormostofitshistory,WokaswastheleadingbrandofIndianACmarket,whichwascharacterized

bythedominanceofonlytwoplayersintheorganizedmarket.Thesomewhatdramaticarrivalofall

leadingglobalbrandschangedthedemographicsoftheindustry.ThesurvivalofthebrandWokasis

underthreatfromallquarters.NewerofferingshavefloodedthemarketandWokascredibilityand

superiorityisquestioned.ThemotivationtobuyWokasispresentlylowandnotbeinghelpedbythe

factthatitsofferedfeaturesdontmatchuptocompetition.Dealersareundersellingthebrandand

servicecentresareapathetictocustomercomplaints.TheincreasedaffordabilityofACs

necessitatestargetingmorecustomersegmentsduetotheemergenceofthemiddleclass.Afailed

advertisingcampaignintherecentpasthasworsenedthesituation.Therecentattemptsat

improvingthesituation,likeintroducingAMCsetc.,havenotresultedinarevivalofthebrand.Thus,

theproblemisidentifiedasoneofbrandrepositioning,wherewearetryingtomodifythe

companysstrategytofocusonthebrandscompetitiveness.

Priortorepositioningthebrand,acomprehensivesituationalanalysishasbeencarriedoutdetailing

strengths,weaknesses,opportunitiesandthreats(SWOT).Theexerciseofrepositioningthebrandis

carriedoutintwophases.Theactionstobeimplementedineachphasearereasonedoutbasedon

thepriorityofthegoalstheyhelptofulfilandtheeffectivenessinattainingthosegoalsgiventhe

constraints.Weareaimingtoinfusethebrandwithanewspiritthroughinnovativetechnologiesand

customercareinitiatives.Ourproposedtwophaseactionplancoversvariousaspectsofthe

companysoperationsincludingproductionlevels,advertisingfocus,R&Dprioritiesandcustomer

servicestrategies.

DetailedReport

KeyIssues:Brandrepositioning,perfectlycompetitivemarket,globalisation,technologydevelopment,new

marketsegments.

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SituationAnalysis:Inthetransitionfromapurelynationalindustrytoglobalindustry,theerstwhileleaderinAC

market Wokasfindsitselfinthemidstofasituationwhereinthesurvivalofitsbrandisatstake.

Extrinsicandintrinsicfactorsgoverningthecurrentsituationare:

Strengths Weaknesses

GoodknowledgeofIndianconsumerandtheACmarket

Expertiseinlocalandinternationalindustrialmarkets

Technicallycompetentasallotherbrands

BackedbythemostrespectedbusinessgroupofIndia

Negativebrandimageintheeyesofcustomersspeciallyresellers

Developedtechnologiesnotinsyncwithmarketdemand

Abysmallevelsofcustomerservice Manufacturingunitsaffectedby

unfavourablegovernmentlegislations

IncompetentPRdepartmentandmediascoldshoulder

Opportunities Threats

UnprecedentedgrowthinACindustry Excisedutyexemptionsincertainareas FuturedemandforCFCfreeACs

Increasinglycompetitivemarket Pricewar CheapChineseimports

AnalysisofbrandWokasaccordingtoMcKinseyBrandDiamond(Copeland):

Nostalgia Patrioticfervour

Respect Faith

Lowcost Worldclasstechnology

Prestigiousoverseasprojects Industrialexpertise

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Problems,plausiblesolutions,theircriticalevaluationandourrecommendations:Inthefollowingtables,wehavestatedvariouspossiblesolutionsandbasedontheircritical

evaluationwehaveassignedthempriorityinwhichtheyaretobeundertaken.

PreSalesPitchProblems PlausibleSolutions CriticalEvaluation Priority

Manyretailers,being

dissatisfied

customers,

discourage

prospectivebuyers.

Centraldatabaseofall

customersandpriority

servicingforretailers

Affectsimmediate

salesandbrand

imagepositively

First

Salesinquiries

neglected

Routingofallinquiries

throughanationwidetoll

freenumberservicebycall

centre

Effectivebutwill

consumetimeand

money

N/A

Settingupofpriority

dealerswhostockall

variants

Consumerwillhave

accesstoentire

productlinebut

needswidespread

advertisements

First

Profitmarginsofdealers

shouldbeproportionalto

targetsachieved

Increasedsaleswill

offsetapparent

reductionof

companyprofits

First

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AftersalesservicesProblems PlausibleSolutions CriticalEvaluation Priority

Dismalrecordof

authorizedservice

centres

Periodicsurveysonquality

ofservicefollowedby

appropriaterewardsand

punishments

Noteffectivewhen

damagehasbeen

done

N/A

Setupacentraldatabaseto

trackallmaintenance

performedattheservice

centres(Rao,2000).

Seniormanagement

mustfollowupdata

collectedtoensure

qualityservice

withinareasonable

timeframe

First

Advertisingcampaign

promisingredressalwithin

specifiedtimefailingwhich

serviceprovidedfreeof

chargeequipservice

centres

Convertmajor

weaknessto

strength

First

Lacklustreresponse

ofauthorizedcentres

toAMC

SellACsatdifferentprices

basedonlengthof

warrantyspecified

Aportionofprice

differencecanbe

usedtofinancerisk

transferagreements

leadingto

guaranteedprofitsa

partofwhichcanbe

transferredto

authorized centres

therebyincreasing

popularityofAMCs

amongthem

First

Increasedwarranty

willincreasesales

immediately.

Periodicserviceas

perscheduleof

AMCsnotadhered

to

Centralcoordinationof

periodicservicesthrough

thecentraldatabase

Centraldatabase

unitcancoordinate

this

First

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FocusSectorsProblems PlausibleSolutions CriticalEvaluation Priority

Presenceofvastly

divergentconsumer

segments(household,

industrial)requiring

specializedproducts

andmarketing

strategies

Choosingindustrialfocus

areas basedonthemarket

growthinthesegment

(exhibitA)

Previously

unexploredmarket

segmentsmight

requirehuge

marketingandR&D

costs

Second

Focusingonhousehold

marketswhereWokasis

relativelybetteroff

Mightexcludehigh

returnsegments

First

NewtechnologiesProblems PlausibleSolutions CriticalEvaluation Priority

Does

not

possess

many indemand

technologies

IncreasespendingonR&Dtodevelopnewproduct

lines

Cheapbutimpeccable

standardofR&D

availableinIndia

First

Unpreparedfor

possibledemandfor

CFCcompliance

Licensethetechnology Verycostly N/A

EnterintoJVs Nolocalcompanies

andpoorbrand

imagemayhamper

this

N/A

IncreaseR&Dthrustfor

developingthistechnology

Willprovide

customised

solutions leadingto

reducedproduction

costsandbetter

technologies

Second

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CustomerFinanceSchemesProblems PlausibleSolutions CriticalEvaluation Priority

Lackofattractive

customerfinance

schemes

Implementzeropercent

interestscheme

Shortloanperiod

andhigherEMIas

wellashighdefault

rate

N/A

Implementfloatingfinancial

schemeswhereinterestrate

isdependentonloan

duration.Longerduration

willattracthigherinterests

butlowerEMIwiththe

provisionofazerointerestpaybackperiod

Willappealtoboth

urbanandsemi

urbanconsumers

andreducedefault

rate

First

GovernmentLegislationsProblems PlausibleSolutions CriticalEvaluation PriorityCompetitorshave

manufacturing

facilitiesatdutyfree

locationswhile

Wokasdoesnot

Setupmanufacturingunits

inthedutyfreeareas

Setupcostsrisewith

time,butrisein

demandwilloffset

this

First

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GlobalizationProblems PlausibleSolutions CriticalEvaluation Priority

Lackofmajor

presenceinthe

lucrative

international

markets

StartwithaGlobalstrategy

(Ghosal,1989)andmigrate

toTransnational

Lowcostengineering

inIndia,implies

Wokasshouldfocus

onGlobalStrategyfor

industrialmarketas

coolingsolutionsare

specialisedandlack

genericgeographical

similarity.

First

StartwithInternational

strategyandmigrateto

Transnational

Internationalstrategy

ispreferablefor

householdsegments;

higherinitial

investment,longer

gestationperiodand

nofootholdinthe

segmentmakesit

unattractive

Second

Jointventureswithlocal

players

Inthehousehold

segment,itwillopen

upnewmarketsand

giveaccesstonew

technologies,but

diminishedreturns

makesitunattractive

N/A

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Reco mende courseofactio :BrandR

aplano

position

epositionin

factiontor

below:

Basedont

positionth

ecriticalev

Wokasbra

aluationoft

nd.Wehav

Accordi

isneces

current

image,

Accordi

aframe

isauser

planac

Ourpro

Cur

Int

Asp

gtoaMcKi

sary;here,

imageinthe

eareforce

gtoKeller

ofreferenc

friendlyco

ievesadisti

posedinteri

Brandimag

Improvedb

Improvedte

ent

rim

ired

I

nseystudy,

permission

customers

dtochoose

tal.,weha

,differentia

lingsolutio

nctsetofdi

positioni

oldestpla

andvisibilit

chnologyd

randimag

erylowbr

echnically

randimag

eryhighbr

novative,

securingthe

amountsto

eyes.Since

aninterim

etoclearly

tingpoints

forIndian

ferentiating

:

yerevolvin

innational

liverables,h

oldestpl

ndvisibilit

ompetent,

contemp

andvisibili

resencea

customers

areasonabl

ouraspired

positioning

definethre

ndpointso

ummers.E

pointsand

withtime,

media

ighgrowthi

ayer,outda

cheapestp

orary,tec

yglobally

rossconsu

heabovepa

depictedth

rametersw

ecurrenta

havecome

daspiredb

upwith

and

tedtechno

permission

eandlogica

imageissof

strategy.

aspectswit

parity.Ino

chphaseof

pointsofpa

ignificantly

nSOHO

roduct

logy,lowd pendabilit

?savvy,hig

mersegme

credibilit

beforerep

lextension

arremoved

hrespectto

urcase,the

ourpropos

ity.

raiseddepe

nt

,Indianness

ositioninga

fthebrand

fromthecu

ybrand

s

rrent

anybrand

frameofref

dtwophas

osition:

erence

eaction

dability

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ACTIONPLANPHASE 1:

1) Topbrassofmarketingtakesdealernetworkintoconfidencebyinformingthemaboutnewcompanypolicies,impliedexpectationsandincentives(asgivenintable)

2) Impartrefreshertrainingtoservicecentrepersonnel3) Setupanewcustomercareinitiativewhichpromisesredressalofcustomergrievances

withinaspecifictimeframe,failingwhichallchargeswillbewaived.

4) Hireandtrainacallcentretohandlecustomergrievancesbyenablingcoordinationwiththerelevantservicecentreandmaintainingacentraldatabase

5) R&DdevelopstechnicalspecificationsandproductionmethodsfornewSOHOproductline;alsoincreasesproductionprocesscapabilitytoprovideindustrialcoolingsolutions

6) Maintainminimalproductionlevelwhileupgradingproductionfacilitytoproducenewline.7) Offerdiscountsandvariouspromotionstoclearpresentstockfromretailinventory.8) Developadvertisingcampaignhighlightingthesupportoftheparentbrandinthenew

customercareinitiatives(TVads)andotherdiscountsandpromotions(printmedia).Major

thrustshouldbeonthecredibilityofthepersonalityfeaturinginthecampaign.

9) Startindustrialadvertising(tradefairs,magazines,yellowpages,journalsetc)requiredtoenterearmarkedcommercialsectors.

10)Buylandandsetupamanufacturingfacilityintaxexemptzones.11)Setupprioritydealersinurbanareas.12)Startproductionofnewproductsatminimallevels.

PHASE2:1) Advertisethenewproductline,highlightingtheinnovationsinbothtechnology(adaptive

cooling,debuggingconsole,powerbudgetingetc.)andcustomercare,inawaywhich

appealstothecontemporaryIndian.Apossibletaglineis:TheintelligentACwhichcares.

2) Productioncapacityforthenewrangeisincreasedtomeetdemands.3) Thenewrangehasmodelspricedforbudget,midrangeandpremiumusers,afactreflected

intheadvertisements.

4) Implementtheaforementionedfloatingfinancingscheme5) SettargetsforprofitabilityandcustomersatisfactioninSOHO6) Settargetsformarketshareinearmarkedlocalandglobalcommercialsectors7) R&Dprioritiesshifttodevelopingspecific commercialsolutionsandCFCcompliances8) Implementglobalstrategyforentryintointernationalcommercialsectors9) Ensurecontinuedcompliancewiththehighservicestandards

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Exhibits:

(B)Simulationoffloatingfinancialscheme.

0

5

10

15

20

25

30

(A)Marketgrowthrate

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(C)SimulationofExtendedWarrantyschemeinvolvinghedging.

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(D)PriceAdvantageofWokas

BibliographyCopeland,J.T.SuccessfulBrandrepositioning:AspirationalvsAchievableStrategies.McKinseyMarketingSolutions.

Ghosal,C.B.(1989).ManagingacrossBorders:thetransnationalsolution.Harvard:HarvardBusinesschoolPress.

KevinKeller,B.S.(2002).ThreeQuestionsYouNeedtoaskaboutyourbrand.HarvardBusinessSchool.

Rao,S.S.(2000).Enterpriseresourceplanning:businessneedsandtechnologies.MCBUPLtd.

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