Period 1 Strategy Group 10

Charlotte Lie Rajat Shuvra Pramanik Rakesh Ks Roshan Prabhakar Saveria Guelfucci Subash M

Period 0 scenario - overview

Six teams

Two brands per team

Similar Market shares, Purchase intentions and Brand Awareness Decisions:
Marketing Mix (Production, Pricing, Advertising) Sales Force Marketing Research

Segmentation and Targeting

Objective Position existing brands as best as possible to its target segments Constraint Un-availability of market research data Current brand purchase intentions used as a surrogate to perceptual positioning
SONO is positioned closer to the requirements of Hi-earners and Pros SOLD positioned more towards the Others and Singles segment Buffs having purchase intentions towards both the brands but predominantly towards SONO

Assumed target market by segments:

Products: SOLD SONO Buffs 20% 50% Singles 100% 0 Pros 0 100% HiEarners 0 100% Others 100% 0

Marketing mix decisions - Production

Production level decisions Forecasted growth in size of target segments

SONO
Market growth of 21% as per forecast Production level growth of 21% from current levels of 97 6 units of inventory from period 0 Production level: 120 units
SONO Target Market Period 0 Period 1 Buffs (50%) 116.5 114

HiPros Earners (100%) (100%) 196 242 185 247

Total 497.5 603

SOLD
Market growth of 18% as per forecast Production level growth of 18% from current levels of 71 8680 units of inventory from period 0 Production level: 75 units (after adjusting for inventory)
SOLD Target Market Period 0 Period 1 Buffs (20%) 46.6 45.6 Singles (100%) 138 171 Others (100%) 260 308 Total 444.6 524.6

Marketing Mix decisions - Price

No reference point available for pricing decisions Inflation rate used as a reference point Price for SOLD increased by ~1% (1 percentage point below inflation) as it is targeted to the price-sensitive segment Price for SONO increased by ~3% ( 1 percentage point above inflation) as it is targeted to the relatively price insensitive segment

Marketing mix decisions - Advertising

No data on advertising effectiveness Estimates formed using correlation between period 0 segment-wise spend for each brand and the associated percentage awareness Advertising research spend approx. 7% of advertising expenditures

SONO
Key market segments of pros and hi-earners together expected to grow by 28%. Advertising expenditures increased accordingly Targeted awareness of close to 80% for pros and hi-earners Remaining spent on buffs
SONO Period 1 Buffs 18% Pros 41% HiEarners 41% Total spend 2880

SOLD
Key market segments of singles and others together expected to grow by 18%. Advertising expenditures increased accordingly Targeted awareness of close to 80% for singles and others. Remaining spent on buffs SOLD Period 1 Buffs 5% Si 45% Others 50% Total spend 1700

Sales Force and Distribution

Estimated Market Growth of 18%
Sales Force increased by 14% for both products

Allocation Decisions based on Shopping Habits

SONO Estimated target size Specialty Stores Departmental Stores Mass Merchandisers Buffs 110 70% 25% 5% Pros 240 50% 30% 20% Hi-Earners 250 20% 50% 30% Total 600 247 224.5 128.5 41.17% 37.42% 21.42% Total 14 12 8 34 % allocation Sales Force size

SOLD Estimated target size Specialty Stores Departmental Stores Mass Merchandisers

Buff 40 70% 25% 5%

Singles 150 50% 30% 20%

Others 300 20% 50% 30%

Total 490 163 205 122

% allocation 30.20408 38.77551 31.02041 TOTAL

Sales Force size 10 13 11 34

Market Research Studies

All market research studies except competitive advertising and sales, consumer survey and conjoint analysis ordered The above-mentioned surveys left out for cost-savings and based on assumptions of data redundancy

Learnings
Relationship between strategic and tactical decisions and their dependence Game Theory: What you know, what your competitor knows, what your competitor knows you know. Differentiating doesnt require all the Psone is enough to cause a difference A perfect product is not perfect unless the consumers feel so