Case StudyIndian Refrigerator Market India's Refrigerator market estimated at Rs. 2750 Cr. is catered mainly by 10 brands. The annual capacity is estimated at around 4.15 million units is running head of demand of 1.5 millions. As there is a demand and a surplus supply, all the manufacturers are trying out for new strategies in the market. Times have changed and also the buying behaviour of the customer. Earlier it was cash and carry system. Now dealers play an important role in selling; now the systems is exchange for old bring your old refrigerator and take a new one with many gifts. A new company by name Electrolux has entered the market which has acquired Allwyn, Kelvinator and Voltas brand. Researchers have revealed that urban and city sales are declining and hence all manufacturers are trying to concentrate on rural markets. Electrolux strategy is customisation of market, with special attention to the Northern and Southern India markets, while Godrej the main player thinks that dealer network in rural market for sales and service will be beneficial and is trying to give more emphasis on dealer network, whereas Whirlpool has adopted the strategy of increasing the dealer network by 30%. The market shares of the major players are as follows: Godrej 30% Videocon 13% Kelvinator 12% Allwyn 10% Voltas 5% Whirlpool 27% Daewoo 1% L.G 1% Others 1% Questions 1. Could the refrigerator market be segmented on geographical base planned by Electrolux? 2. What would be the marketing mix for rural market? 3. Would 125 L and 150 L models be an ideal choice to launch in rural market?

Possible Solutions 1. The main justification for Electrolux strategy would be Electrolux is amalgamation of 3 companies, Kelvinator, Voltas and Allwyn. Allwyn is popular in South Indian market, while Kelvinator is famous in North India Market. Electrolux wants to cash in on the popularity of the respective brands. It is not possible to segment according to North or South Indian Market, once a company's name becomes a logo, then the reason for buying for customers for other brand depends upon price, quality, usability and features of the product. The storage pattern of foods in North India and South India is same. Same is the case of rest of India, so it wont be possible to segregate the market according to the geographical base. 2. The rural market is small but significant as far as refrigerator is concerned. Moreover, the cost of selling of dealer in the rural market should also be justified. The type of food the rural people consume should also be taken into account; they prefer to have more of natural foods and less of derived food products like Ice-creams, butter, cheese etc. The cost of the refrigerator should be less attractive to buy. The size and material should be so adjusted that the cost price would be reasonable. The capacity of the refrigerator should be 100 l - 300 l. Much more space has to be given for storing vegetables. Other important factor to be taken into consideration is the Power supply which is not so good in rural areas. To avoid the voltage fluctuations in built stabilisers will be the selling features in the rural areas. 3. The chances of selling of 125 l and 150 l refrigerators are high because the prices of the refrigerators would be less. This would be a major factor. The second aspect would be they dont have many items to store. They would prefer a small refrigerator, also the space in their homes are not very big wherein a small refrigerator would serve their needs. *

BUYER BEHAVIOUR AND RELATIONSHIP DEVELOPMENT

RESEARCH COMPANY TRIES TO SHOW THAT YOU CAN ONLY UNDERSTAND CONSUMER BEHAVIOUR BY LIVING WITH THEIR BEHAVIOUR

How can any marketer get inside your mind to understand how you actually make purchase decisions? Structured questionnaire surveys may have a role for collecting large scale factual data, but they have major weaknesses when it comes to understanding individuals' attitudes. Qualitative approaches, such as focus groups can get closer to the truth, but participants often still find themselves inhibited from telling the full story. Many marketing managers, especially those without large research budgets, inevitably end up relying on their own personal experiences to understand how consumers behave. This may be easy for target markets which are in the 20-40 age range (the age of typical marketers), but how do you get inside the mind of teenagers, or elderly people? Ethnographic approaches are becoming increasingly popular among marketers as a means of getting closer to the truth about consumer behaviour. Ethnographic research is nothing new, having been used by anthropologists in their study of the rituals of tribal people. Marketers have been relatively recent converts to the techniques of ethnography. The advertising agency BMP DDB has taken on board the techniques of ethnography in its "Project Keyhole" in a manner which is reminiscent of anthropologists' practice of living with tribes in order to understand them. Its consumer researchers live with a family for several days in order to record their every move. The project is designed to meet the needs of client companies who are looking for more than the data gathered using traditional quantitative and qualitative research techniques.

Participants record their views and actions on a digital video camera, in the presence of a researcher who stays with them from 8am until 10pm for a few days. A normal project would last four or five days and the client may be invited along for part of the time. Participants are paid 100 for their troubles. What did they do with the direct mail when it came through the letter box? Did they use the coupon offer which it contained? Who drinks the fresh orange juice in the house? How long do they spend cooking dinner? How do they actually cook the ready-prepared meals they bought earlier? Does the family eat together? These are examples of the vital information that sponsoring companies hope to get hold of in order to position their products more effectively.

According to the company, the advantage of this method over conventional research is that it picks up inconsistencies between what people say they do and what they actually do. Following them throughout the day allows the researcher to see why a person's habits might change according to random factors such as their mood, the time of day or the weather. Crucially it reveals the quirks in our behaviour that marketers are desperate to gain an insight into. For example, a person's store-card data might tell you that they buy bread and margarine, but it doesn't tell whether they eat the bread fresh, or toast it first before putting margarine on it. In 1998, the magazine Marketing put this novel research method to the test with a guinea pig family called the Joness. It then compared the results of this approach with more traditional methods of profiling customers. In short, established systems such as CACI, Claritas and Experian might say one thing about the buying behaviour of a family, using lifestyle and electoral roll data, but did they bear any relation to reality? The information that the researcher gathered in a short space of time told a lot about the Jones family. By contrast, the database information about the Joneses, although detailed and often accurate, could not capture the quirks and details that make up the personality of the family. For example, it transpired that the Joneses had a keener than average eye on value for money. Although information on them from the four database companies correctly suggested that they enjoy luxuries like good food and foreign holidays, it didn't say anything about the real life factors that influence their purchasing decisions. The most noticeable of these was that although they like good food, Mrs Jones mixed her shopping between the supermarket and a local discount store which sells cut-price brands. This means that she only bought at Tesco or Sainsbury's what she could not get cheaper elsewhere. She showed the researcher a can of branded plum tomatoes which she got for 10p at the discount store as an example, explaining that it would have cost 26p in the supermarket. Mrs Jones prided herself on being able to hunt down bargains like this and occasionally rewarded herself by buying "something luxurious", such as smoked salmon from Marks & Spencer. The freezer had an important role to play as it allowed Mrs Jones to buy things she sees on special offer even if she doesn't need them immediately.

Mrs Jones's eye for an offer made her a keen scrutiniser of direct mail. She checked mailings for 'catches' in the small print and for any special offers. She collected mailers worth chasing up on a clip on the fridge door, along with vouchers collected from magazines. Mrs Joness financial nous means that she managed the family's money.

Not surprisingly, these details did not come out in database information. Of the commercial databases, CACI's People UK and Lifecycle UK databases seemed to be most at variance with the reality of the Jones' life. They got their ages wrong, incorrectly surmized that they took business flights and incorrectly attributed Mr Jones with being computer literate. Nobody in the household read the FT or the Independent as predicted - they read the Daily Mail instead. Some of the other points made by CACI were right, but were felt to be very generalized and could apply to anybody.

Claritas seemed to be much closer to reality. The Jones' predicted jobs were about right and the database was correct in stating that they had credit and store cards. They managed to say that the Joneses liked antiques, perhaps learnt as a result of them occasionally buying Homes and Antiques magazine. They similarly were correct in stating that they like gardening, DIY, foreign travel and eating out. The database had predicted that the family would be most likely to own a Ford or Renault car. In fact, Mrs Jones owned a Ford, while Mr Jones had a company Renault.

Based on "Keeping up with the Jones's, Marketing, 19th November 1998, pp 28-29.

CASE STUDY REVIEW QUESTIONS

1. Why is it important to study the composition of the decision making unit? To what extent do you think this research approach will give a complete understanding of how family units make purchases? 2. What new possibilities, if any, for market segmentation are opened up by this approach to the study of buyer behaviour?3. Critically assess the scope for expanding this type of research as a means of learning more about buyer behaviour.

THE MARKETING ENVIRONMENT

CONSUMERS CONFOUND MARKETERS

Household spending by all UK households amounted to over 500 billion in 1997, or 63% of gross domestic product. This level of expenditure is very closely related to conditions in the country's macro-economic environment. For marketers, it is crucial to be able to read the macro-economic environment and to predict the effects of change in demand for their goods and services. Identifying turning points in the economic cycle has become a work of art as well as science, as consumers frequently confound experts by changing their expenditure levels in a way which could not have been predicted on the basis of past experience.

During the Autumn of 1998, mortgage rates in the UK were falling; unemployment was close to its lowest level for two decades; pay rises were keeping ahead of inflation; and share prices were recovering from their recent falls. Yet expenditure by British households was falling sharply. For three consecutive months retail sales fell in value, with retailers such as Marks and Spencers and Storehouse reporting below expected levels of sales. Retailers have traditionally found excuses to justify poor sales to their shareholders, including weather which is too cold/too hot. Even the death of Diana Princess of Wales was widely blamed for keeping people out of the shops.

Throughout 1998, prices of consumer goods had fallen significantly, with consumer durables down in price by an average of 2% in a year and clothing by 5%. Economic theory would have suggested that lower prices would have resulted in higher sales, especially considering the other favourable elements of the macro-environment. However, this did not appear to be happening.

What else could have been happening in the marketing environment to explain falling household expenditure? At the time, the media was full of reports of an impending global economic crisis, triggered by difficulties in the Asian economies. Consumer confidence is crucial to many high value household purchases such as houses and cars, with consumers reluctant to commit themselves to regular monthly repayments when their source of income is insecure. Even this may be only a partial solution, as a survey of consumer confidence carried out in October 1998 by GFK on behalf of the European Commission showed that although consumers were pessimistic about the state of the national economy, they were quite upbeat about their personal financial situation.

One possibility was that consumers had become cannier. If prices are falling, why not wait longer until prices have fallen further? Consumers had also witnessed the effects of previous over-borrowing and had been more cautious during the recent period of economic growth, resulting in a historically low level of personal sector indebtedness. In 1997, 9% of disposable household income was saved, compared with just 3% at the height of the economic boom of 1988.

For companies who need to commit resources a long while in advance in order to meet consumers needs, an accurate understanding of the market environment is crucial if stock surpluses and shortages are to be avoided. But this case shows that getting it right can still be very difficult.

CASE STUDY REVIEW QUESTIONS

1. Identify all of the environmental factors that can affect the demand for consumer durables and assess the magnitude and direction of their impact.2. In what ways can a manufacturer of consumer durables seek to gain a better understanding of its marketing environment?3. How can a manufacturer of consumer durables seek to respond to environmental change as rapidly as possible?Cafe Coffee Day Brand Strategy in IndiaJan 8, 2010Case Study Contents1. Introduction2. CCD an established brand image in India3. CCDs wide network the anytime, anywhere cafe4. Exhibit 1: Total number of stores/cafes of Caf Coffee Day and its competitors5. 1996 2008, CCDs first store launch to building a strong competitive advantage6. Innovative formats to woo new customers7. Reinforcing brand image with the cluster approach strategy8. Company-owned stores instead of franchises to not dilute brand value9. Lower pricing and no-segmentation approach10. From a largely south Indian retail chain to a national brand11. Co-branding12. Reinvigorating the brand and taking it to the next level13. Projecting a feeling of togetherness14. Silent brew masters special employee program15. Background Note (History of Cafe Coffee Day)16. Caf Coffee Day Quick Facts17. Exhibit 2: Various store/caf formats of Caf Coffee Day18. Exhibit 3: Different divisions of Caf Coffee Day19. Exhibit 4: Brand Logo of CCD and its significance20. Exhibit 5: Sample Consumer profile by Age group at Caf Coffee DayCase Study AbstractThis case study covers the following issues: Examine and analyze Cafe Coffee Days brand strategy in India, its success and future challengesIntroductionCCD today has become the largest youth aggregator, and from a marketing stand point, the success has come by focusing on the3As: Accessibility, Affordability and Acceptability.- Bidisha Nagaraj, the Marketing president of Cafe Coffee DayAlthough demographically, a typical consumer would be male or female between 15-29 years of age, belonging to middle or upper middle class, we call our consumers young or young at heart. We are about juke boxes, good and affordable coffee and food. The brand fit is with youth or the young at heart. So we often look out for brands that are aspirational in nature. Sudipta Sen Gupta, Marketing head, Caf Coffee Day.CCD an established brand image in IndiaCafe Coffee Day (CCD) has an established brand image in India andranks No 2 in the Brand Equitys Most Trusted Brands 2008 survey in the food services category. Rival Barista is at No 5. CCD has been able to make a connection with the Indian consumers, predominantly among the youth. CCD is the market leader in India and was awarded theExclusive Brand Retailer of the Yearby ICICI Bank in its Retail Excellence Awards 2005 for the organized retail sector.CCDs wide network the anytime, anywhere cafeCCD has been able to make its brand presence felt through the sheer number of stores. CCD has 620 cafes at present and it has ambitious plans to launch more than 900 cafes by the end of the current financial year. This means launching one store every other day which is not surprising from a company which launched a cafe (in 2005) in Vienna, the coffee capital of the world. CCD also has three cafes in Vienna, and two in Karachi, Pakistan. Lagging behind CCD in the Indian market, Barista has about 200 cafs, Java Green (around 75 cafs) and Mocha (around 25 cafs). The Indian organized sector has potential for around 5,000 cafs but fewer than 1,000 cafs exist currently.Exhibit 1: Total number of stores/cafes of Caf Coffee Day and its competitorsDownload case study pdf to read moreCase Study KeywordsCafe Coffee Day, CCD, Amalgamated Bean Coffee Trading Company Ltd., ABCTCL, V G Siddhartha, Caf Beat, Brand Equitys Most Trusted Brands 2008 survey, Bidisha Nagaraj Marketing president, brand image, brand management, Exclusive Brand Retailer of the Year, Barista, Java Green, Mocha, company owned stores, national brand, south Indian retail chain, Chikmagalur, Co-branding, international brand consultant Landor, Silent brew masters special employee program, a feeling of togetherness, Coffee Day Exports, Coffee Day Xpress, Coffee Day Take Away (coffee vending machines), Coffee Day Fresh n Ground (ground coffee retail outlets), Coffee Day FMCG (packaged filter coffee powder)Case Updates/Snippets CCDs vision: To be the only office for dialogue over a cup of coffee CCDs Expansion Strategy: Cafe Coffee Day has around 821 outlets in 115 cities in India. CCD plans to take the total number of cafes to 1,000 by March 2010 and double it to 2,000 by 2014. (Update: By Jan 2012, CCD had approx 1,200 cafes and 900 Express outlets) In October 2009, CCD announced that it will increase its international presence from the current six outlets in Vienna and Pakistan to a total of 50 stores across Europe and Middle East in two years time. International coffee chains in India Recent entrants in the Indian market include Gloria Jeans, Coffee Bean & Tea Leaf and Illy Caf. Operating Formats Caf Coffee Day operates in both regular (Coffee Day Square) and premium formats (Lounge). Highway Cafes: In 2004, CCD began cafes on highways. By 2009, the total number of Caf Coffee Day highway cafes rose to 30 owing to the overwhelming response it received from travellers. CCDs new brand identity: In October 2009, CCD unveiled a new brand logo, a Dialogue Box, to weave the concept of Power of Dialogue. In accordance with this new brand identity, CCD planned to give all its existing outlets a new look by the end of 2009. Cafs would be redesigned to suit different environments such as book, music garden and cyber cafes suitable for corporate offices, university campus or neighborhood. The change plan included new smart menu, furniture design, among others. Coffee consumption in Indiais growing at 6% per annum compared to the global 2% plus. In India, the per capita consumption of coffee is around 85 grams while it is six kgs in the US.

Milk production in India India is the largest producer and consumer of milk in the world with 98% of milk being produced in rural India. Coffee production in India India ranks sixth as a producer of coffee in the world accounting for 4.5% of the global coffee production. India has about 170,000 coffee farms cultivating around 900,000 acres of coffee trees. CCDs International Expansion Strategy In June, 2010 Cafe Coffee Day chain acquired Emporio for Rs 15 crore. Emporio is a Czech Republic-based caf chain present at 11 locations. CCD plans to co-brand the chain as Caf Coffee Day Emporio and later transition it to Caf Coffee Day. CCD is also present in Vienna. The company wants to expand in the East European region, West Asia and the Asia-Pacific region. Cafe Market in India Coffee retailers cover only 170 cities out of 3,000 in India (early 2011 reports). In 2008, according to Technopak Advisors, the Indian food servcies market cafes, full-service restaurants, fast-food outlets/quick-service restaurants was estimated to be $6 billion (Rs 26,000 crore) with organized players taking 13% of the market. (By 2014 this number is expected to increase up to 27%.). According to Technopak Advisors, the caf market in India is estimated at $150 million (Rs 678 crore) and growing at 40 per cent over the last five years. Organized coffee market in India: The organized coffee market in India is about Rs 600 crores. This is approximately 20% of the total domestic coffee consumption (Rs 3,000 crores). New Entrants in Indian Coffee Cafe market: In early 2011, Hindustan Unilever, the FMCG giant planned to open a cafe outlet in Mumbai named Bru World Caf to popularize its in-house coffee brand Bru (HULs only coffee brand sold only in India). CCD to double its human resources count: CCD has 6,500 employees (as per Feb 2011 figures) with each cafe requiring about 6 employees. CCD plans to double its employee count by 2013. Lavazza Espression store in India: In 2011, Lavazza, the Italian coffee brand opened its first signature coffee shop Lavazza Espression in New Delhi, India. CoffeeDay Wakecup: In January 2012, CCD launched its own brand of coffee maker called CoffeeDay Wakecup targeting all coffee lovers. The product will be marketed at its 1125 cafes and 900 Express outlets. Competitor Lavazza had launched its own portable coffee machines (Lavazza Blue 850) already but targeted the premium segment with the price being higher than CCDs machines. In February 2012, Caf Coffee Day announced plans to install interactive touchscreen tablets in 500 cafes across the country.

THE CASE STUDY The Case StudyAhmed has a job and earns Dhs 20,000 per month. He has loans for his car and a personal loan to repay and also some credit card bills and well and his rent and telephone and food and other expenses to pay. The problem is that there are many things that Ahmed would like to have and he has realized that to get many of them he will need either increase his loan or use his credit card again.In particular he wants to get a tabled computer like the iPad or the Galaxy Tab by Samsung. He thinks the iPad is cool but then again a lot of people have them and he likes to be a bit different and also the Galaxy has some good features as well. He does not have the cash for either to buy either of them.Explain the above case using some of the economic theories covered in class. 3.Theory OneBasic Economic Problem 4.Basic Economic ProblemUnlimited WantsLimited Resources 5.Scarcity 6.Basic Economic Problem 7.AhmedAhmeds income in limitedHis wants are unlimited 8.Ahmeds SolutionHe borrows money to try and fulfill more of his needs. 9.The ProblemThis makes things worse - not better, as he now has to repay that money plus the cost of borrowing. 10.Cycle of Debt 11.ChoicesAhmed does have choices. 12.Cost / BenefitHe needs to evaluate the costs & benefits of each choice. 13.Cost / Benefit 14.The cost of what you give up 15.Everything has an Opportunity Cost 16.Ahmed Choices1. Whether to buy any tablet computer at all?2. Which tablet computer to buy? 17.Free Market EconomyAhmed is free to decide how to use his limited resources.These choices are his.In a Command Economy he would not get this choice at all. 18.Choice 1 can be shown in a PPF 19.A model of an economyHow do goods get to the shops?How do households get the money to buy them?How do Firms get the Factors of Production?Lets look at an Economic Model of this 20.Where does Ahmed get his salary? 21.Get the idea?There are several more theories I could cover in this case study.But I am sure that you get the idea.

1. What is a case study . 2. Evaluators generally do not focus on the discovery of a universal truth, nor do they typically look for cause-effect relationship, instead the emphasis is on exploration and description. It refers to the collection and presentation of detailed information about a particular situation by a participant or small group.Case study 3. When student are presented with a case, they place themselves in the role of the decision maker as they read through the situation and identify the problem.How does the case methodwork? 4. The case method of learning is based on the belief that management is a skill rather than a collection of techniques and concepts. The best way to learn this skill is to experience it.Why have a case study? 5. Increase the frequency of correct decision. Reduce the time required to take decisions Improve the analytical quality of decisions Make decision-making easierYou can learn how to 6. Develop an implementation plan Select the best alternative Identify all relevant alternatives Identify constraints to the problem Define the firms goals Define the central issue Read the case thoroughlySteps to solve a case 7. Read the case rather quickly the first time to get an overview of the industry, the company, the people and the situation. Read the case again more slowly, making notes as you go.Read the case thoroughly 8. Many cases will involve several issues or problem. Identify the most important problems. Examine related problems in the functional areas( marketing, finance. And so on)Define the central issue 9. Inconsistencies between a firms goal and its performance may further highlight the problems discovered in step 2. this will provide a guide for the remaining analysis.Define the firms goal 10. Constraints may limit the solutions available to the firm. It may include limited finances, personnel limitations, strong competitors and so on.. Constraints have to be considered when suggesting a solution.Identify constraints to theproblem 11. Use your creativity to come up with the alternative solutions.Identify all relevantalternatives 12. Evaluate each alternative in the light of the available information. Resist the temptation to jump to this early in the case analysis. you also need to explain to explain the logic you used to choose one alternative and reject the others.Select the best alternative 13. The final step in the analysis is to develop a plan for effective implementation of your decision.Develop an implementationplan 14. Oral report Written reportsThe report 15. implementation Conclusion Alternatives Problem statement Executive summaryWritten reports 16. Executive summary is a concisely written statement, less than one page, placed at the front of the report. it briefly summaries the major points of the case and your solution. It should describe the major issue, the proposed solution and the logic supporting solution.executive summary 17. Present the central issue or major problem in the case here.Problem statement 18. Discuss all relevant alternatives. Be sure to state your assumptions and the impact of constraints on each alternative.alternatives 19. Present the analysis and the logic that led you to select a particular solution. Also discuss the reasons you rejected the other alternatives.conclusion 20. Outline a plan of action that will lead to effective implementation of the decision so that the reader can see not only why you chose a particular alternative but also how it will work.implementation 21. Implementation Conclusion Analysis of the key alternatives Problem statement Description of the case situation Students should include the following whenever discussing a case in the test:-Oral reports 22.THANK YOU