Post on 02-Apr-2015
MARKETINGMARKETING STRATEGY STRATEGY
-PROF. O.T.S NAMBIAR
““DESCRIBE THE DESCRIBE THE ELEPHANT”ELEPHANT”
MARKETING STRATEGYMARKETING STRATEGY
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a Sustainable competitiveadvantage . A marketing strategy should be centered around the key concept that customer satisfaction is the main goal.
APPLEAPPLE
NIKENIKE
AMERICAN EXPRESS-AMERICAN EXPRESS-“DON’T LEAVE HOME “DON’T LEAVE HOME
WITHOUT IT”WITHOUT IT”
AVISAVIS
CALIFORNIA MILK CALIFORNIA MILK PROCESSOR BOARDPROCESSOR BOARD
There Are Some Things Money Can't Buy. For
Everything Else, There's MasterCard.
U.S MARINES--THE FEW .THE U.S MARINES--THE FEW .THE PROUDPROUD
MC-DONALDSMC-DONALDS
SALES MARKETINGSALES MARKETING
INTERNET MARKETINGINTERNET MARKETING
Welcome to the exciting world of marketing
The Back Drop
Where is Ambassador car now? Brylcream has vanished (and reappeared)? Jawa Byke skidded? Metal Box the blue chip co collapsed? BSNL finds itself in the midst of hectic
competition? Where is Garden Vareily sarees? Kellog struggles, but Maggie smiles.Why?
HMT vs Titan
Dell zoomed ahead Radio FM has picked up momentum
fm nowhere Promise fm balsara, a small co had a
good start.USP of Clove , association with grandma
Yesterday..............Today
Jawa/Yezdi motor cycle
Indian Coffee house
Binny Fabrics Kores
Photocopier
Hero Honda,TVS Coffee day,
Barista
Raymonds Modi Xerox
Brand is an expression of your Personality....top brands
Coca cola Pepsi Microsoft IBM GE
Intel Disney Ford Mc Donald AT&T
Celebrity Ads
Amitabh Bachan...ICICI,PEPSI,Reid&Taylor,Hajmola,Dabur Chyvanaprash,Parker
SRK..Santro Abhishek..Idea Hema Malini.Water
filter
Snny Deol...tractor
Akshay Kumar...genes
Film stars(beauty platform)...Lux
Sachin.boost Imran
Khan.cinthol
Brand perception..country correlation?
UK.class ,heritage
France..fashion germany..sturdy,
qlty,reliability Switzerland..wat
ches
India..spices,cashew
Brand Associations
Van Heusen..aspirational,inner confidence, stylishand sophisticated
Saffola...association with health has created a memorable association in the psyche of consumers
Ad:Find a new gove,Dance to a new beat,Be bold.
Maggie..covenience platform,USP
Brand Associations
Fair&Lovely..positioned in the fairness platform ,now at marrid women
Cadburys...for children, now at adults(change in the imagery...Bachan taking chocolate along with diff people..togetherness ...for adults
Reynolds...reliability,though high priced
scooty...tgt.young, upwardly mobile working girls
Brand feelings
Warmth,pride.Complan..pride of mother when child carrying moher in cycle.
Warmth..Johnsons baby powder
Fun..cola excitement..byke
ads
Socialappeal ..Ford car for the upcoming professional
positioning
Titan's Nebula jeweellery watches
Fastrack fm titans.for the fashionable
Dash for children fm titans
LG air conditioners ..pure air
Product line extns..rasna with variants
Johnsons extendin to baby soaps, powders
Liril to powders Nirma det to
toilet soaps?
Brand attributes and benefits
lifebuoy.germ killing action ia the a, hygiene is the b
Samsung tv.extra space view is the a enlarged clear tv view is the b
Vguard.quality,tech is the a, relibility is the b
ICICI.technology is the a , convenience is the b
Cinthol.deodorent qlty is the a, hygiene, socilisng is the b
Some stray thoughts
Relationship management...dog
Why kellog failed,when maggie won..cold milk is the cobination for corn flakes ,why hot milk here?
I make cream in the factory , sell hope in the shop
Ford ..refused to give what consumer wanted..failed
Culture plays ..subtly
bru..taste of filter coffee(why venket)
margo.remembering hr childhood, mother's advice on neem
MTR..traditional recipes for modern busy consumer in covenient, hygine form
vicco..brides to be complexion traditional tumeric
Gorej Almirah wedding gift
Asian paints..festivals like Pongal
Charms and close up
Heralding the arrival of a new youth culture
Life Buoy...family soap Big small functional
attribute.Johns Umbrella succeeded
Lubricant..we sell more by selling less
vicks...emotional bond between mother and son.
Matiz failed..big and small confusion
Maruti van ,,,spacious car ,family car ,affection,family ties revived it.
March 12, 2000 Private & Confidential 29
What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
March 12, 2000 Private & Confidential 30
Marketing = ?
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals
American Marketing Association
March 12, 2000 Private & Confidential 31
Marketing = ?
Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
March 12, 2000 Private & Confidential 32
Simple Marketing System
Industry(a collection
of sellers)
Market(a collection
of Buyers)
Goods/services
Money
Communication
Information
March 12, 2000 Private & Confidential 33
Marketing = ? Marketing is the sum of all activities that take you to a
sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about
push. Marketing is all about managing the four P’s –
product price place promotion
March 12, 2000 Private & Confidential 34
The 4 Ps & 4Cs
MarketingMix
Product
Price Promotion
Place
CustomerSolution
CustomerCost
Communication
Convenience
March 12, 2000 Private & Confidential 35
Difference Between - Sales & Marketing ?
Salestrying to get the customer to want what the company produces
Marketing trying to get the company produce what the customer wants
March 12, 2000 Private & Confidential 36
Scope – What do we market
Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts
March 12, 2000 Private & Confidential 37
Core Concepts of Marketing
Based on : Needs, Wants, Desires / demand
Products, Utility, Value & Satisfaction
Exchange, Transactions & Relationships
Markets, Marketing & Marketers.
March 12, 2000 Private & Confidential 38
Needs, wantsdemands
Markets Marketing &Marketers
Utility, Value &Satisfaction
Xchange, TransactionRelationships
Products
Core Concepts of Marketing
March 12, 2000 Private & Confidential 39
Core Concepts of Marketing
Need – food ( is a must )
Want – Pizza, Burger, French fry's ( translation of a need as per our experience )
Demand – Burger ( translation of a want as per our willingness and ability to buy )
Desire – Have a Burger in a five star hotel
March 12, 2000 Private & Confidential 40
In order to understand Marketing let us begin with the Marketing Triangle
Customers
CompetitionCompany
March 12, 2000 Private & Confidential 41
Who is a Customer ??
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
that satisfies a want or a need
CUSTOMER IS . . . . .
March 12, 2000 Private & Confidential 42
Customer –
CUSTOMER has needs, wants, demands and desires
Understanding these needs is starting point of the entire marketing
These needs, wants …… arise within a framework or an ecosystem
Understanding both the needs and the ecosystem is the starting point of a long term relationship
March 12, 2000 Private & Confidential 43
How Do Consumers Choose Among Products & Services?
Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product.
Satisfaction - Based on a comparison of performance and expectations.
Performance > Expectations => Satisfaction
Performance < Expectations => Dissatisfaction
March 12, 2000 Private & Confidential 44
Customers - Problem Solution
As a priority , we must bring to our customers “WHAT THEY NEED”
We must be in a position to UNDERSTAND their problems
Or in a new situation to give them a chance to AVOID the problems
March 12, 2000 Private & Confidential 45
Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional Benefit
Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost
March 12, 2000 Private & Confidential 46
Analysis Of Competition
Who are your competitors?
What are their strengths and weaknesses?
What have been their strategies?
How are they likely to respond to your Marketing plan?
March 12, 2000 Private & Confidential 47
Strategic Marketing
Strategic marketing management is concerned with how we will create value for the customer
Asks two main questions
What is the organization’s main activity at a particular time? – Customer Value
What are its primary goals and how will these be achieved? – how will this value be delivered
March 12, 2000 Private & Confidential 48
Strategic Planning
Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.
Also called Strategic Management Process
All organizations have this
Can be Formal or Informal
March 12, 2000 Private & Confidential 49
The Strategic-Planning, Implementation, and Control Process
March 12, 2000 Private & Confidential 50
Business Strategic-Planning Process
External environment
(Opportunity &
Threat analysis)
Internal Environment
(Strength/ Weakness analysis)
Goal FormulationBusiness Mission
March 12, 2000 Private & Confidential 51
Strategy Formulation
Environmental Analysis
Internal AnalysisCompetitorCustomerSupplier
RegulatorySocial/ Political
Technology Know-HowManufacturing Know-How
Marketing Know-HowDistribution Know-How
Logistics
Strength & Weaknesses
Identity Core Competencies
Opportunities & Threats
Identify opportunity
Fit internal Competencies with external opportunities
Firm Strategies
March 12, 2000 Private & Confidential 52
The Marketing Plan
A written document that acts as a guidebook of marketing activities for the marketing manager
March 12, 2000 Private & Confidential 53
CONTENTS of MARKETING PLAN Business Mission Statement
Objectives
Situation Analysis (SWOT)
Marketing Strategy
Target Market Strategy
Marketing Mix Positioning
Product
Promotion
Price
Place – Distribution
People
Process
Implementation, Evaluation and Control
March 12, 2000 Private & Confidential 54
The Marketing Process
Business Mission Stateme
nt
Objectives
Situation or SWOT Analysis
Implementation Evaluation,
Control
Target Market Strategy
Marketing Strategy
Product
Promotion
Place/Distribution
Price
Marketing Mix
Marketing Environment
March 12, 2000 Private & Confidential 56
Why a product like radio declined and now once again
emerging as an entertainment medium ?
March 12, 2000 Private & Confidential 57
What Were the Drivers of This Change ?
Technology ?
Government policy ?
Other media substitutes ?
March 12, 2000 Private & Confidential 58
Why Market Leaders Suffered ?
HMT vs. Titan
HLL vs. Nirma
Bajaj vs. Honda
Dot.com boom, then bust and now resurgence
Market leadership today cannot be taken for granted.New and more efficient companies are able to upstage leaders in a much shorter period.
March 12, 2000 Private & Confidential 59
Factors Influencing Company’s Marketing Strategy
March 12, 2000 Private & Confidential 60
DemographicsDemographics
SocialChangeSocial
Change
EconomicConditionsEconomicConditions
Political & Legal FactorsPolitical &
Legal Factors
TechnologyTechnology
CompetitionCompetition
EnvironmentalScanning
Target Market
ProductDistributionPromotion
Price
ProductDistributionPromotion
Price
External Environment is not controllable Ever-Changing
Marketplace
External Marketing Environment
Physical / Natural
March 12, 2000 Private & Confidential 61
The macro-environment
is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities
March 12, 2000 Private & Confidential 62
P r o d u c tP r o d u c t
March 12, 2000 Private & Confidential 63
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
Product is . . . . .
March 12, 2000 Private & Confidential 64
Types of Products
ConsumerProducts
IndustrialProducts
PRODUCTS
Services
March 12, 2000 Private & Confidential 65
Product Items, Lines, and Mixes
Product ItemProduct Item
Product LineProduct Line
Product MixProduct Mix
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A specific version of a product that can be designated as a distinct offering among an organization’s products.
A group of closely-related product items.
A group of closely-related product items.
All products that an organization sells.
All products that an organization sells.
March 12, 2000 Private & Confidential 66
Product Mix
Width – how many product lines a company has
Length – how many products are there in a product line
Depth – how many variants of each product exist within a product line
Consistency – how closely related the product lines are in end use
March 12, 2000 Private & Confidential 67
Gillette’s Product Lines & Mix
Blades and Writingrazors Toiletries instruments Lighters
Fusion – 5 bladeMach 3 TurboMach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II Toni S.T. DupontAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus
Width of the product mixWidth of the product mixDep
th o
f the p
rod
uc
t lines
Dep
th o
f the p
rod
uc
t lines
March 12, 2000 Private & Confidential 68
What is a Service? Defining the Essence
An act or performance offered by one party to another (performances are intangible, but may involve use of physical products)
An economic activity that does not result in ownership
A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets
March 12, 2000 Private & Confidential 69
Some Industries - Service Sector
Banking, stock broking
Lodging
Restaurants, bars, catering
Insurance
News and entertainment
Transportation (freight and passenger)
Health care
Education
Wholesaling and retailing
Laundries, dry-cleaning
Repair and maintenance
Professional (e.g., law, architecture, consulting)
March 12, 2000 Private & Confidential 70
Classification of Services
Pure Tangible Product
Materials / Components
Computers
Major Product withMinor Services
Product = Service
Major Service withMinor Product
Business Hotels
Good Transportation
Banking Pure Intangible Service
March 12, 2000 Private & Confidential 71
Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase.
Inseparability - Services are produced and consumed simultaneously.
Variability or Heterogeneity – Services are highly variable
Perishability – Services cannot be stored.
Non Ownership - Services are rendered but there is no transfer of title
Major Characteristic of Services
March 12, 2000 Private & Confidential 72
The Marketing Mix
The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.
Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence
Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.
March 12, 2000 Private & Confidential 73
The “8Ps” of Integrated Service Management vs. the Traditional “4Ps”
► Product elements
► Place, cyberspace, and time
► Process
► Productivity and quality
► People
► Promotion and education
► Physical evidence
► Price and other user outlays
March 12, 2000 Private & Confidential 74
The Give and Get of Marketing
March 12, 2000 Private & Confidential 75
Great Words on Marketing
1. “The purpose of a company is ‘to create a customer…The only profit center is the customer.’”
2. “A business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.”
3. “The aim of marketing is to make selling unnecessary.”
4. “While great devices are invented in the Laboratory, great products are invented in the Marketing department.”
5. “Marketing is too important to be left to the marketing department.”
March 12, 2000 Private & Confidential 76
Drivers of Customer Satisfaction
Many aspects of the firm’s value proposition contribute to customer satisfaction:
The core product or service offered
Support services and systems
The technical performance of the firm
Interaction with the firm and it employees
The emotional connection with customers
Ability to add value and to differentiate as a firm focuses more on the top levels
March 12, 2000 Private & Confidential 77
Marketers and MarketsMarketers are focused on stimulating
exchanges with customers who make up markets – B2C or B2B.
The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers.
It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants.
Much happens before and after the sale to affect customer satisfaction
March 12, 2000 Private & Confidential 78
Stages of Customer Interaction
March 12, 2000 Private & Confidential 79
What Changed in Marketing…
• Organize by product units• Focus on profitable transactions• Look primarily at financial
scorecard• Focus on shareholders• Marketing does the marketing• Build brands through advertising• Focus on customer acquisition• No customer satisfaction
measurement• Over-promise, under-deliver
• Organize by customer segments• Focus on customer lifetime value• Look also at marketing scorecard
• Focus on stakeholders• Everyone does the marketing• Build brands through performance• Focus on customer retention• Measure customer satisfaction and
retention rate• Under-promise, over-deliver
Old Economy New Economy
March 12, 2000 Private & Confidential 80
Are Banks truly Are Banks truly marketing-savvy and marketing-savvy and customer - centric?customer - centric?
March 12, 2000 Private & Confidential 81
Myth 1 – The larger the range of products, the more customer-centric I am.
Mythbuster – The range of products has Mythbuster – The range of products has
emerged from beingemerged from being
competition-centric.competition-centric.
March 12, 2000 Private & Confidential 82
Myth 2 – Better technology (read CRM) leads to
better customer service.
Mythbuster – TechnologyMythbuster – Technology
alone does not deliver, alone does not deliver,
helps people do.helps people do.
March 12, 2000 Private & Confidential 83
Myth 3 – Launch a product and the customer will start
using instantly.- Give a customer a card and he will learn how to play
with it immediately
Mythbuster – Customers needMythbuster – Customers need
To be educated too…To be educated too…
March 12, 2000 Private & Confidential 84
Mythbuster – Customers are Mythbuster – Customers are not only present where not only present where competition is.competition is.
Myth 4 – The only way to get a customer is from
competition.
March 12, 2000 Private & Confidential 85
Myth 5 – Just advertise and - You will sell.
Mythbuster – Advertising will only sell, Mythbuster – Advertising will only sell,
Not retain customers. Not retain customers.
March 12, 2000 Private & Confidential 86
Myth 6 – No difference between marketing & selling
Mythbuster – Mythbuster – “Selling focuses on the needs of the seller; “Selling focuses on the needs of the seller; marketing on the needs of the buyer. marketing on the needs of the buyer.
March 12, 2000 Private & Confidential 87
Myth 7 – In the absence of relationships ‘trust’ builds financial brands
Mythbuster – TMythbuster – Trust is not a differentiator at all…rust is not a differentiator at all…it is the very minimum that the customer expects!!it is the very minimum that the customer expects!!
March 12, 2000 Private & Confidential 88
So what will the differentiators be :So what will the differentiators be :
• Technology ?
• Brand ?
March 12, 2000 Private & Confidential 89
The real differentiator of The real differentiator of
customer – centricity in a customer – centricity in a
commoditised world of commoditised world of
financial products - financial products -
Customer Service !Customer Service !
Chapter 12: Channels and Distribution Strategies
Learning Objectives:
• Understand the channel structure and the linkages between the buyer and the seller
• The Channel Design (11 C’s)
• Selection of Intermediaries
• Channel Management
• International Shipment
- Documentation
- Support Agencies for international shipment
• Importance of Distribution Channels
• Channels configurations
- Consumer goods- Industrial goods- Services
• In international distribution, The firm sells to it’s customers - Through its own sales force- Through independent intermediaries- Through an outside distribution system with regional/global coverage
• Channels structure should be designed to manage
- Physical flow of goods and services- Transactional flows- Information flows
• Channels Design
- Customer Characteristics- Distribution culture- Competition- Company objectives (for market share and profitability)- Character (nature of product, positioning of the product)- Capital (financial requirement)- Cost (cost incurred in maintaining the channel)- Coverage (intensive, selective, exclusive distributions)- Control (product/service presentations, quality, image)- Continuity
- Communication
• The concept of channel captain and power
- Reward
- Coercive
- Legitimate
- Referent
- Expert
• Type of “Distance” that cause communication problem
- Social Distance
- Culture Distance
- Technological Distance
- Time Distance
- Geographical Distance
• Selection of Intermediaries Agent
Foreign (Direct) - Brokers- Manufacturer’s Representative- Factors- Managing Agents- Purchasing Agents
Domestic (Indirect)- Brokers- Export Agent- EMCs- Webb-Performance Association- Commission Agents
Distribution
Foreign (Direct)
- Distribution/Dealers- Import Jobbers- Wholesalers/retailer
Domestic (Indirect)
- Domestic wholesalers - EMCs- ETCs- Complementary marketers
Types of Distributors
- Indirect Exporting- Direct Exporting- Integrated Distribution
• Sources for finding Intermediaries
- Govt. Agency
- Private Sources
• Criteria for Screening Intermediaries
- Performance- Professionalism
• Distributors agreement includes
- Contract duration
- Geographic boundaries- Compensation- Products and conditions of sale
- Communication between parties
• Channel management - Coordination- Long term relationship
• Factor in channel management - Ownership- Geographic, culture and economic distance- Difference in rules of law
• Gray Market (Parallel Imports)
- Why Gray markets occur- How to handle Gray markets
• Typical reasons for termination of channel relationship
- Change in international marketer’s distribution strategy
- Lack of performance by the intermediary- Make the terminators conditions explicit in the agreement
Documents Required for International Shipments
- Shipper export declaration• Documents required by U.S Government
- Export license• Commercial Documents
- Packing list- Commercial Invoice
- Inland bill of lading- Dock receipt- Bill of lading- Insurance Certificate- Shipper’s declaration of dangerous goods
• Import Documents- Import license- Foreign exchange license- Certificate of Origin- Consular Invoice- Customs Invoice
• Support Agencies for International Shipments
- Freight forwarder- Customs broker- Common carrier
The Marketing Mix
The Marketing Mix
The Marketing Mix
• The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives
• 7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment
• Traditional 4Ps extended to encompass growth of service industry
Price
Price
• Pricing Strategy• Importance of:
– knowing the market
– elasticity– keeping an eye
on rivals
Image copyright: www.freeimages.co.uk
Pricing Strategies
Pricing Strategies
Penetration Pricing
Penetration Pricing
• Price set to ‘penetrate the market’• ‘Low’ price to secure high volumes• Typical in mass market products –
chocolate bars, food stuffs, household goods, etc.
• Suitable for products with long anticipated life cycles
• May be useful if launching into a new market
Market Skimming
Market Skimming
• High price, Low volumes• Skim the profit from the
market• Suitable for products that
have short life cycles or which will face competition at some point in the future (e.g. after a patent runs out)
• Examples include: Playstation, jewellery, digital technology, new DVDs, etc.
Many are predicting a firesale in laptops as supply exceeds demand.Copyright: iStock.com
Value Pricing
Value Pricing
• Price set in accordance with customer perceptions about the value of the product/service
• Examples include status products/exclusive products
Companies may be able to set prices according to perceived value.
Copyright: iStock.com
Loss Leader
Loss Leader
• Goods/services deliberately sold below cost to encourage sales elsewhere
• Typical in supermarkets, e.g. at Christmas, selling bottles of gin at £3 in the hope that people will be attracted to the store and buy other things
• Purchases of other items more than covers ‘loss’ on item sold
• e.g. ‘Free’ mobile phone when taking on contract package
Psychological Pricing
Psychological Pricing
• Used to play on consumer perceptions
• Classic example - £9.99 instead of £10.99!
• Links with value pricing – high value goods priced according to what consumers THINK should be the price
Going Rate (Price Leadership)
Going Rate (Price Leadership)
• In case of price leader, rivals have difficulty in competing on price – too high and they lose market share, too low and the price leader would match price and force smaller rival out of market
• May follow pricing leads of rivals especially where those rivals have a clear dominance of market share
• Where competition is limited, ‘going rate’ pricing may be applicable – banks, petrol, supermarkets, electrical goods – find very similar prices in all outlets
Tender Pricing
Tender Pricing• Many contracts awarded on a tender basis• Firm (or firms) submit their price for carrying
out the work• Purchaser then chooses which represents best
value• Mostly done in secret
Price Discrimination
Price Discrimination
• Charging a different price for the same good/service in different markets
• Requires each market to be impenetrable
• Requires different price elasticity of demand in each market
Prices for rail travel differ for the same journey at different times of the day
Copyright: iStock.com
Destroyer Pricing/Predatory Pricing
Destroyer/Predatory Pricing
• Deliberate price cutting or offer of ‘free gifts/products’ to force rivals (normally smaller and weaker) out of business or prevent new entrants
• Anti-competitive and illegal if it can be proved
Absorption/Full Cost Pricing
Absorption/Full Cost Pricing
• Full Cost Pricing – attempting to set price to cover both fixed and variable costs
• Absorption Cost Pricing – Price set to ‘absorb’ some of the fixed costs of production
Marginal Cost Pricing
Marginal Cost Pricing
• Marginal cost – the cost of producing ONE extra or ONE fewer item of production
• MC pricing – allows flexibility • Particularly relevant in transport where fixed
costs may be relatively high• Allows variable pricing structure – e.g. on a
flight from London to New York – providing the cost of the extra passenger is covered, the price could be varied a good deal to attract customers and fill the aircraft
Marginal Cost Pricing• Example:
Aircraft flying from Bristol to Edinburgh – Total Cost (including normal profit) = £15,000 of which £13,000 is fixed cost*
Number of seats = 160, average price = £93.75
MC of each passenger = 2000/160 = £12.50
If flight not full, better to offer passengers chance of flying at £12.50 and fill the seat than not fill it at all! *All figures are estimates only
Contribution Pricing
Contribution Pricing
• Contribution = Selling Price – Variable (direct costs)
• Prices set to ensure coverage of variable costs and a ‘contribution’ to the fixed costs
• Similar in principle to marginal cost pricing
• Break-even analysis might be useful in such circumstances
Target Pricing
Target Pricing
• Setting price to ‘target’ a specified profit level
• Estimates of the cost and potential revenue at different prices, and thus the break-even have to be made, to determine the mark-up
• Mark-up = Profit/Cost x 100
Cost-Plus Pricing
Cost-Plus Pricing
• Calculation of the average cost (AC) plus a mark up
• AC = Total Cost/Output
Influence of Elasticity
Influence of Elasticity
• Any pricing decision must be mindful of the impact of price elasticity
• The degree of price elasticity impacts on the level of sales and hence revenue
• Elasticity focuses on proportionate (percentage) changes
• PED = % Change in Quantity demanded/% Change in Price
Influence of Elasticity
• Price Inelastic:• % change in Q < % change in P• e.g. a 5% increase in price would be
met by a fall in sales of something less than 5%
• Revenue would rise• A 7% reduction in price would lead to a
rise in sales of something less than 7%• Revenue would fall
Influence of Elasticity
• Price Elastic:• % change in quantity demanded > %
change in price• e.g. A 4% rise in price would lead to sales
falling by something more than 4%• Revenue would fall• A 9% fall in price would lead to a rise in
sales of something more than 9%• Revenue would rise
Product
Product• Methods used to
improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g.– Extension strategies– Specialised versions– New editions– Improvements – real or
otherwise!– Changed packaging– Technology, etc.
Image copyright: www.freeimages.co.uk
Promotion
Promotion
• Strategies to make the consumer aware of the existence of a product or service
• NOT just advertising
Place
Place
• The means by which products and services get from producer to consumer and where they can be accessed by the consumer– The more places to buy the product
and the easier it is made to buy it, the better for the business (and the consumer?)
People
People
• People represent the business– The image they present can be important– First contact often human – what is the lasting
image they provide to the customer?– Extent of training and knowledge
of the product/service concerned– Mission statement – how relevant?– Do staff represent the desired culture
of the business?
Process
Process• How do people consume services?• What processes do they have to go through to
acquire the services?• Where do they find the availability
of the service?– Contact– Reminders– Registration– Subscription– Form filling– Degree of technology
Physical Environment
Physical Environment
• The ambience, mood or physical presentation of the environment– Smart/shabby?– Trendy/retro/modern/old fashioned?– Light/dark/bright/subdued?– Romantic/chic/loud?– Clean/dirty/unkempt/neat?– Music?– Smell?
Sales Promotion
Whereas advertising gives a reason to buy, SP gives an incentive to buy
It is part of the Marketing spend of all companies and these days SP
spends in many companies exceed that of the adspends
Why?
• Internal• External
Internal reasons
• Top management is more conducive to spending on promotions
• Line managers under greater pressure to achieve targets
• Justification of expenditure is easy
External reasons
• Increase in number of brands• Consumer is more price savvy• Greater pressure from trade to
liquidate stocks• Add effectiveness declining owing
to rising costs, media clutter and legal constraints
SP is a push strategy
• Since it is at the last point where the consumer is often at the point of buying, the additional incentive makes a last ditch effort to convert the customer on to the incentivised brand
SP is of two types
• Trade• Consumer
Trade promotion
• Liquidating heavy inventories• Persuade retailers to carry stock,
carry more than usual stock, promote brand franchise
Consumer promotion
• Stimulate purchase• Induce trial• Create new users• Increase repurchase from
occasional customers• Reward loyal customers
Forms of trade promotion
• Bulk discounts• Free materials• Display windows• Shelf hiring• Lucky draws• ‘Mystery’ customer• Redistribution incentives• Shop salesmen incentives
Forms of consumer promotion
• Free samples• Free gifts• Coupons• In-packs• Price packs• Price-offs• Sweepstakes• Bundling offers
SP spurs action because they are supposed to run for a limited time
While the advertising budgets are controlled by the brand
managers, SP budgets usually are controlled by the
sales managers
The more the product’s quality and its advertising persuasiveness fail to meet competition, the greater is the need for promotion to improve the price – value relationship
Promotion at different stages of the PLC
• Introduction – wise to use heavy promotion to induce trials and promote brand franchise
• Growth – promotion should be limited ,if any• Maturity – Higher promotions required since the
brand is under attack from competitors or product quality or advertising effectiveness is tapering off
• Decline – Heavy promotions. Used only to retain a set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock clearance from the trade
Essential elements for an effective SP programme
• Significant value before promotion is effective• Promotions must be part of an overall plan
• Every brand must have a promotion objective and a strategy statement
• A written tactical plan – time frame, costs, evaluation yardsticks
• Factual knowledge must be gathered to plan
• Specialised professional skill and knowledge must be applied to every promotion operations
Final considerations
• Don’t promote if the product is not good• Promotions rarely stop a declining sales curve• It is very easy to lose the promotional gains made if your
promotion has not been effective in retaining new customers. So the product has to speak for itself.
• The objective of the promotion is to wean away users from competition and create new users.
• Excessive promotions lead to diminishing returns and may devalue the brand
Cont’d
• Promotions may be used in conjunction with advertising and other marketing communication tools
• It should be novel and attractive• Ensure supply lines are good and adequate
stock is available right through the promotion• Cater for contingencies. Have escape routes
built into the plan• Trade has to be handled tactfully• Reimburse incentives/ rewards/ gifts promptly• Must be within the legal boundaries
The Marketing Mix• Blend of the mix depends upon:• Marketing objectives• Type of product• Target market• Market structure• Rivals’ behaviour• Global issues – culture/religion, etc.• Marketing position• Product portfolio
– Product lifecycle– Boston Matrix
1. Imperatives for Market-Driven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion
Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control
Strategic Marketing
CHAPTER 12
Promotion, Advertising, and Sales Promotion Strategies
Promotion Strategy
Advertising Strategy
Sales Promotion Strategy
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
PROMOTION STRATEGY
The Composition of Promotion Strategy
Developing Promotion Strategy
Communications Objectives
Deciding the Role of the Promotion Components
Determining the Promotion Budget
Promotion Component Strategies
Integrating and Implementing the Promotion Strategy
Effectiveness of Promotion Strategy
Promotion Strategy:Promotion Strategy:
planning, implementing, andplanning, implementing, and
controlling an organization’scontrolling an organization’s
communications to its customers communications to its customers
And other target audiences.And other target audiences.
PromotionComponents
PublicRelations
DirectMarketing
SalesPromotion
PersonalSelling
Advertising
Interactive/Internet Marketing
Composition of Promotion Strategy
U. S. Annual Expenditures (billions)
0
$200
$400
$600
Personal Selling
Advertising
Sales Promotion
INTERNET FEATURE
Brand Advertising On-Line Has Taken Off
SEARCH WORKSGoogle and Yahoo! Have demonstrated the power of the Web by using customers’ search queries to connect them with advertisers.CUSTOMERS ARE ONLINEMore than half of American households have always-on Net connections. And the Web reaches millions at the office. The Big Three portals—Yahoo, AOL, and MSN—reach a combined 50 million a day–-twice the TV audience of a World Series game.VIDEO ROCKSThe adoption of broadband, which can handle videos, lets advertisers put TV-like ads online. Longer spots by BMW and Adidas have reached cult status. As demand for video soars, portals sell choice slots in advance, much like TV’s up-front sales.FEEDBACK IS INSTANTMarketers and online publishers have tools to track an ad’s performance in real time allowing them to make quick adjustments if customers aren’t clicking. This turns the Net into a vast marketing lab. And as video grows, it becomes a test bed for TV ads.CUSTOMERS LEAVE TRAILSIt was an empty promise during the dot-com days, but now advertisers have the technology to follow customers, click by click, and to hit them with relevant ads. The upshot? No wasted money peddling dog food to cat owners.
Source: Stephen Baker, “The On-Line Ad Surge,” BusinessWeek, November 22, 2004, 79.
COMMUNICATIONOBJECTIVES
ROLE OF PROMOTIONCOMPONENTS
PROMOTIONBUDGET
PROMOTION COMPONENTSTRATEGIES
Coordinationwith Product,Distribution,and PriceStrategies
DESIGNING THE PROMOTION STRATEGY
Advertising Sales Promotion Public Relations Personal Selling Direct Marketing Interactive/ Internet Marketing
MARKET TARGETING AND POSITIONING STRATEGIES
INTEGRATE AND IMPLEMENT PROMOTION COMPONENT STRATEGIES
EVALUATE EFFECTIVENESS OF PROMOTION STRATEGY
Illustrative Communications Objectives
Need Recognition
Finding Buyers
Brand Building
Evaluation of Alternatives
Decision to Purchase
Customer Retention
Deciding the Role of the Promotion Components
Expected contribution for each of the promotion components.
Which communication objective(s) will be the responsibility of each component?
What part of the budget will go to each component?
Factors Guiding the Role Assigned to Each Component
Market Target(s)
Desired Positioning
Role of Promotion in Positioning
Product Characteristics
Stage of Life Cycle
Situation Specific Factors
Determining the Promotion Budget
Percent of Sales
Follow the Competition
Objective and Task
All You Can Afford Budgeting Approaches
Percent of Sales Fixed percent of sales, often based on past
expenditure patterns.
Comparative Parity Budget is based largely
upon what competition is doing.
Objective and Task Set objectives and then determine tasks
(and costs) necessary to meet the objectives.
Percent of Sales The method is very arbitrary. Budget may be
too high when sales are high and too low when sales are low.
Comparative Parity Differences in marketing strategy may require
different budget levels.
Objective and Task The major issue in using this method is
deciding the right objectives so measurement of results is important.
Features Limitations
Budgeting Methods
Integrating and Implementing Promotion Strategy
Avoiding fragmentation
Difficulty in evaluating productivity
Differences in priorities
Separate organizational units
Assigning integration responsibility
Illustrative Factors Affecting Promotion Strategy
Number and dispersion of buyers
Buyers’ information needs
Size and importance of purchase
Distribution
Product Complexity
Post-purchase contact required
Small
High
Large
Direct
High
Yes
Large
Low
Small
Channel
Low
No
Advertising/ sales promotion driven
Balanced Personal selling driven
Promotion Strategy Issues
Expense/Response Relationships
Allocation
Impact on Brand Equity
Integration of Promotion Components
Effectiveness of the Strategy
ADVERTISING STRATEGY
Setting Objectives and Budgeting
Creative Strategy
Media/Scheduling Decisions
Role of the Advertising Agency
Program Implementation and Measuring Effectiveness
The Internet is Shifting the Power The Internet is Shifting the Power Position to the CustomerPosition to the Customer
• How the Money is Spent is Changing.How the Money is Spent is Changing.• The Amount Spent on Internet Advertising is a The Amount Spent on Internet Advertising is a
Small Fraction of the Total, but Very Powerful and Small Fraction of the Total, but Very Powerful and Growth is Accelerating.Growth is Accelerating.
• Consumers Spend 10 hrs/person/day with Media Consumers Spend 10 hrs/person/day with Media of all Kindsof all Kinds—How Much is Media Multi-Tasking?—How Much is Media Multi-Tasking?
• Ad Spending Versus Consumers’ Time Allocations.Ad Spending Versus Consumers’ Time Allocations.• Advertising Agency Consolidation and Advertising Agency Consolidation and
Reorganization—the Big 4.Reorganization—the Big 4.• Do Companies Recognize the Revolutionary Do Companies Recognize the Revolutionary
Implications of Newly Empowered Consumers?Implications of Newly Empowered Consumers?• The Internet Will be the Most Prominent Medium The Internet Will be the Most Prominent Medium
in the Lives of the 18-34 Age Group.in the Lives of the 18-34 Age Group.Source: The Economist, “Crowned at Last: A Survey of Consumer Power,” April 2, 2005, 1-16.
Advertising Strategy
Target Audience
Advertising Objectives
Advertising Budget
Creative Strategy
Advertising Media and Programming Schedules
Evaluate the Effectiveness of the Strategy
Expose communication to target audience
Create awareness
Change attitude(s)
Increase Sales
Generate profits
Advertising Objectives
Increasing UncertaintyAbout Impact onPurchasing Behavior
Increasing Difficultyof Measurement
Type of Objective
• Exposure
• Awareness
• Attitude Change
• Sales
• Profit
Alternative Levels for Setting Advertising Objectives
Budget Determination
OBJECTIVE AND TASK METHOD HAS THE MOST SUPPORT
Media/ Scheduling Decisions
Creative Strategy
Budget Determination
The Vuitton Machine*The Vuitton Machine*Inside the world’s biggest, most profitable luxury brand
BENCHMARKING VUITTON Brand 2003 SalesPercent Operating
Billions Change* Margin Louis Vuitton $3.80 +16% 45.0%
Prada 1.95 0.0 13.0 Gucci** 1.85 -1.0 27.0
Hermès 1.57 +7.7 25.4 Coach 1.20 +34.0 29.9
*At constant rate of exchange **Gucci division of Gucci Group Data: Company reports. BW
Vuitton increased advertising 20% in 2003—spends only 5% of revenues on advertising—about half the industry average
*BusinessWeek, March 22, 2004, 98-102.
Product Distribution Price Promotion
Advertising(How to communicate intended positioning to buyers and others influencing the purchase.)
Creative Strategy
CREATIVE STRATEGYThe creative strategy is guided by the market target and
the positioning strategy.
Provide a unifying concept that binds together the various parts of the advertising campaign.
Media/Scheduling Decision
Television
Radio
Magazines
Online
Website
Outdoor
Relative access to the target audience
Relative cost of reaching the target group(s)
Favorable zone
Unfavorable zone
Advertising Agencies in Perspective
Fast change has come to the advertising industry.
Huge, integrated agencies face a challenging future.
Do clients want a full-service agency?
The business model is in need of change.
The basis of compensation continues to be debated and altered.
Specialists (e.g. media buying services) are being used.
Importantly, the core of the creative process is the agency.
Several methods are available to evaluate advertising results.
Advertising Agency
Role of the Advertising Agency
Target Audience
Advertising Objectives
Advertising Budget
Creative Strategy
Advertising Media and Programming
Evaluate the Effectiveness of the Strategy
Advertising Strategy Implementation and Effectiveness
Decide how to measure effectiveness before implementing the strategy.
Assign responsibility for tracking performance. Assessing the quality of advertising is important. Exposure to advertising is not a very sensitive measure of
effectiveness. Several methods are available to evaluate
advertising results.
MEASURINGADVERTISING
EFFECTIVENESS
RatingServices
Sales andExpense AnalysisTest
Marketing
ControlledTests
RecallTests
SALES PROMOTION
consists of various incentives, mostly short term,
intended to stimulate quicker and/or greater purchase
of particular goods/services by consumers or the
trade.
SALES PROMOTION STRATEGY
STRATEGYSTRATEGYFEATUREFEATURE
• Consumers hate the hassles, companies love unredeemed rebates, Consumers hate the hassles, companies love unredeemed rebates, and regulators are investigating the consumer complaints.and regulators are investigating the consumer complaints.
• As much as 40% of rebates never get redeemed.As much as 40% of rebates never get redeemed.• Some 400 million rebates are offered each year with a total value of Some 400 million rebates are offered each year with a total value of
$6 billion.$6 billion.
• Unclaimed rebates translate into more than $2 billion of Unclaimed rebates translate into more than $2 billion of extraextra revenue revenue for retailers and their suppliers each year.for retailers and their suppliers each year.
• Complex filing rules and long delays discourage consumers.Complex filing rules and long delays discourage consumers.
• Companies emphasize the filing processes are intended to discourage Companies emphasize the filing processes are intended to discourage fraud.fraud.
• The largest rebate processor monitors 10,000 addresses suspected of The largest rebate processor monitors 10,000 addresses suspected of submitting bogus rebates.submitting bogus rebates.
• Rebates offer companies an opportunity to promote small discounts Rebates offer companies an opportunity to promote small discounts without marking the products down.without marking the products down.
• Rebates have become very popular with computer and consumer-Rebates have become very popular with computer and consumer-electronics companies.electronics companies.
The Realities of Mail-in Rebates
• The value of rebates has also increased.The value of rebates has also increased.
• Regulators are intensifying their scrutiny of the companies offering Regulators are intensifying their scrutiny of the companies offering rebates.rebates.
• The developing back-lash against rebates is pushing some companies The developing back-lash against rebates is pushing some companies to halt rebate strategies.to halt rebate strategies.
• Others are encouraging online filing.Others are encouraging online filing.• Fulfillment houses are revising their processing systems, using Fulfillment houses are revising their processing systems, using
computer technology to validate claims.computer technology to validate claims.
• Consumers would like mail-in rebates to go away but want the best Consumers would like mail-in rebates to go away but want the best price they can get.price they can get.
Source: Brian Grow, “The Great Rebate Runaround,” BusinessWeek, December 5, 2005, 34, 36, and 37.
SALESPROMOTION
TARGETS
ConsumerBuyers
Salespeople
BusinessBuyers
Value Chain
Sales Promotion Activities and Targets
Activities include trade shows, specialty advertising, contests, displays, coupons, recognition programs, and free samples.
Reliance & Retail
Jerry Jose
"Growth has no limit at Reliance. I keep revising my vision.
Only when you can dream it, you can do it."
Dhirubhai H. AmbaniFounder Chairman Reliance Group December 28, 1932 - July 6, 2002
Foundation
• The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002),
• India's largest private sector enterprise
• Businesses in the energy and materials value chain.
• Group's annual revenues are in excess of USD 22 billion.
Mukesh Ambani
• Chemical Engineer from the University of Bombay and pursued MBA from Stanford University, USA.
• Joined Reliance in 1981 and initiated backward integration from textiles into polyester fibers and further into petrochemicals
Mukesh Ambani
• Conferred 'ET Business Leader of the Year' Award by The Economic Times (India) in the year 2006.
• Had the distinction and honor of being the co-chair at the World Economic Forum Annual Meeting 2006 in Davos, Switzerland.
• Ranked 42nd among the 'World's Most Respected Business Leaders' and second among the four Indian CEOs featured in a survey conducted by Pricewaterhouse Coopers and published in Financial Times, London, November 2004.
Mukesh Anbani
Conferred the World Communication Award for the 'Most Influential Person in Telecommunications in 2004' by Total Telecom, October, 2004.
Chosen 'Telecom Man of the Year 2004' by Voice and Data magazine, September, 2004.
Ranked 13th in Asia's Power 25 list of 'The Most Powerful People in Business' published by Fortune magazine, August, 2004. 30 Growth is Life
Mukesh Ambani
• Conferred the 'Asia Society Leadership Award' by the Asia Society, Washington D.C., USA, May, 2004.
• Ranked No.1 for the second consecutive year, in The Power List 2004 published by India Today, March, 2004.
Men Behind Reliance
• Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was centrally involved in every aspect of the company’s management over the next 22 years.
Anil Ambani
Credited with a number of path-breaking financial innovations in the Indian capital markets.
Spearheaded the country’s first forays into the overseas capital markets with international public offerings of global depositary receipts, convertibles and bonds.
1991, directed Reliance Industries in its efforts to raise over US$ 2 billion.
Anil Ambani
• Steered the 100-year Yankee bond issue for the company in January 1997.
Why Reliance in Retail?
• Currently, selling through company-owned stores currently totals just $8 billion in India. Industry estimates say that the country’s retail industry is worth $300 billion, that is about Rs 13,50,000 crore. This stands a chance to blossom to $427 billion in the next four years. Organised retail accounts for just over Rs 35,000 crore.
Reliance Companies in Retail
• RIL's Retail Project will be through the following companies:– Reliance Retail Limited – Subsidiary of RILRanger Farms Private Limite – Subsidiary of Reliance Retail Limited– Retail Concepts and Services Private Limited– Subsidiary of Reliance Retail Limited– Reliance Retail Insurance Broking Limited– Subsidiary of Reliance Retail Limited– Reliance Dairy Foods Limited– Subsidiary of Reliance Retail Limited– Reliance Retail Finance Limited– Subsidiary of Reliance Retail Limited– RESQ Limited– Subsidiary of Reliance Retail Limited– Reliance digital Retail Limited– Subsidiary of Reliance Retail Limited– Reliance Service Solutions Limited– Subsidiary of Reliance Retail Limited
Reliance World
• Reliance World (formerly Reliance WebWorld) is a world-class nationwide chain of retail outlets for products and services of the Reliance – Anil Dhirubhai Ambani Group.
• Digital world of information, communication, entertainment and utility services.
• Connected to Reliance’s countrywide optic fibre network.
Reliance world
The Broadband Centre
With 241 Reliance World outlets across 105 cities in the country.
Qwiky's, has 22 outlets, apart from 76 Java Green coffee outlets in the Reliance Web World chain across the country.
Reliance communication
• In July 2003, Reliance Communications joined hands with HDFC Bank to deploy India’s first wireless Point of Sale (POS) for processing credit card transactions.
• Wireless POS enables banks to significantly expand the number of retail outlets accepting credit cards.
• Caused expansion of credit cards & ATM retail for banks in smaller towns.
Reliance money
“This is our effort to take financial instruments to rural masses and give them an opportunity to invest in various financial products like mutual funds, stocks and gold coins and secure their lives and other valuables by taking adequate insurance cover.
Reliance Money
• launched services in rural market
• Reliance Capital announced its tie-up with the Rural Relations, a rural consumer relations organisation.
• first to deploy Internet-enabled retail kiosks for trading
Present
The company, at present, has presence in 727 cities and towns across India.
1,000 talukas across five states in the country.
The five states have been covered. Madhya Pradesh, Maharashtra, Gujarat, Andhra Pradesh and Karnataka.
Future
20,000 outlets and 10,000 kiosks across the country by the end of this year.
10,000 outlets in over 5,165 talukas across the country by the end of this fiscal in Rural Area.
Extend its presence in Tamil Nadu, Chhattisgarh, Uttar Pradesh, Uttarakhand and Rajasthan.
Reliance key Petrol Pumps Dhabbas
Food restaurant aimed at anyone and everyone.
Charpais, khats, and normal tables.
Separate sections for family.
Showers for the long distance riders including truck drivers.
Reliance key Petrol Pumps Dhabbas
Reliance Infocomm tower.
Soon Reliance WebWorld
Free lunch/dinner to truck drivers getting in more than 100 litters of diesels and other schemes like these.
Future Reliance Petrol pumps.
• Not going straight ahead with expansion of its n/w for distribution, instead going to be export oriented company, to stay away from govt. pump competition.
Reliance Retail
• In talks to buy a stake in north-India based Modern Dairies.
• agriculture to retail.
• Not successful to expectations.
Reliance Mart
Reliance Mart steps up realty deals
The hypermarket arm of Reliance Retail
Plans to set up mega retail stores.
Reliance Mart
Inked acquisition deals for over 50 million sq ft via franchise & direct routes.
Target of a 100 million sq ft by 2011 to develop its hypermarket business.
• Reliance Mart’s first hypermarket opened in Ahmedabad on Wednesday 15th of Agust.
Reliance Mart
Would cover areas ranging between 1,65,000 to 2,00,000 sq ft.
40 % floor space will be earmarked for garment brands
The rest to stock home goods, white goods, footwear and food products.
Reliance mart
a range of over 95,000 products
categories fresh produce, food and grocery, home care products, apparel and accessories, non-food FMCG products, consumer durables and IT, automotive accessories, lifestyle products and footwear.
Unique services Tailoring, shoe repair, watch repair, a photo shop, gifting services and laundry services.
Reliance mart
automotive accessories, fine jewellery and fashion jewellery in a retail format for the first time.
The hypermarket also launched a host of Reliance's in-house brands
EDLP (every day low price) basis at prices 15-20% lower than market prices.
Reliance Mart
house a health and wellness store providing pharmaceutical drugs and other wellness products.
Reliance Mart will also sell as a part of its Lifestyle section.
cafeteria providing quality food and beverages, an ATM machine
consumer service / membership desk.
Reliance Mart.
61 check out counters
first time in India introduced the Mobile POS system for faster check outs.
The store planning, atmospheres and layout has been designed to provide “a complete solution”
Reliance mart
open from 10:00 a.m. to 10:00 p.m. seven days a week.
Reliance One, a common membership and loyalty program, Earn Anywhere, Spend Anywhere.
Attractive finance options, including 0% financing for your purchases on select products.
Future
Plan to open one or two new stores every month during this financial year.
Reliance Mart is a part of the Reliance group’s $5.5-billion retail initiative, targeting revenues of 1 trillion rupees ($24.6 billion) by March 2011.
Reliance Retail is expecting a top-line of Rs1,000 per sq ft/month.
Future
a pan-India presence
opening 30 Stores by the end of the year
500 by the end of 2010.
Reliance fresh.
• RIL’s Rs 25,000 crore venture
Reliance Fresh
Reliance Retail - 240 neighbourhood and convenience stores under the Reliance Fresh chain.
1.31 lakh Reliance loyalty customers, across Punjab, Andhra Pradesh, Rajasthan, Tamil Nadu, Delhi, Jharkhand, Karnataka, Gujarat, Maharashtra, Madhya Pradesh and Kerala.
Introducing retail apparel, footwear, women wear and lingerie at its stores.
Reliance Fresh
‘Reliance One’, customers can earn 1 RelianceOne point for every Rs 100 spent.
Open from 8 am to 9 pm, 7 days a week.
Fresh fruits and vegetables, staples, top-up grocery and ‘Reliance Select’, the Reliance brand of products.
Reliance Fresh
Unmatched affordability, quality, and service to the consumers.
Prosperity to the farmers.
Diageo, the world’s leading premium Drinks Company has announced a tie-up with Reliance Fresh to retail its international wines portfolio in India.
Reliance Fresh
20 trained sales associates attending to the customers.
Provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people
Future
Plans to add more stores across different geographies, and eventually have a pan-India footprint by year 2011.
seamless supply chain infrastructure, unprecedented even by world standards.
Reliance is aiming to touch almost every Indian customer and supplier.
Reliance Retail Future
Aims to launch 700 Reliance Town Centre (RTC) in the country to cater to population below 3 lakh.
These centres will house everything that a town needs. first Centre by December.
More centres next year across the country and the company aims to introduce first RTC in north India.
Future
From health centre to vocational training to multiplexes and retail, RTC is poised to become a centre point for various segments dwelling in town.
an auto-centre
60,000 to 2 lakh sq ft depending on the size of the town,
Future
plans to introduce rural business hubs (RBH) for the rural population and it aims to add 1,600 RBHs in the next few years.
Reliance Retail will soon have around 100 private labels across product categories
cheaper than mainstream brands.
Pharma major Cipla is in talks with Reliance Retail for an outsourcing arrangement
Future
Reliance Retail is getting ready for the launch of its pharma retail business next month.
The first pharma retail outlet in Reliance Retail hypermarket in Ahmedabad.
The group’s first exclusive Reliance Health and Wellness store will come up in Hyderabad.
Reliance Textiles.
• Reliance has roped in world famous Italian Designer, Mr. Maurizio Bonas of "Made in Italy“.
• Plan to introduce Bonas Designer label in India through Reliance and Vimal Retail outlets.
• Only Vimal Retail Outlets:
• Provide customers with the best designs and surprise them with prices.
Thank You!!!