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STRATEGIES FOR INCREASING MARKET SHARE

STRATEGIES FOR INCREASING MARKET SHARE. BY. A K BHAN Dy. GM – Technical Services HPCL. Brand Building. in the Lubes Market. BRAND A SET OF DIFFERNTIATING PROMISES THAT LINK A PRODUCT TO ITS CUSTOMER. BRANDING

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STRATEGIES FOR INCREASING MARKET SHARE

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  1. STRATEGIES FOR INCREASING MARKET SHARE BY A K BHAN Dy. GM – Technical Services HPCL

  2. Brand Building in the Lubes Market

  3. BRAND • A SET OF DIFFERNTIATING PROMISES THAT LINK A PRODUCT TO ITS CUSTOMER. • BRANDING • IS ABOUT CREATING A LASTING VALUE PROPOSITION FOR YOUR SERVICE AND COMMUNICATING IT EFFECTIVELY TO YOUR EMPLOYEES AND THE MARKET PLACE.

  4. AWARENESS PYRAMID Top of mind Brand Recall Brand Recog Unaware of Brand

  5. XHigh Recognition X High Recognition Low recall High recall Recognition Recall

  6. POWER BRAND Satisfaction Quality Value is the Customer Customer needs delivering superior quality on attributes low `Cost of Quality` Overall cost leadership effective positioning Powerful service brand

  7. Brand Building for Lubes • Product Advertising for various Lube Brands suiting the Target Group of different segments like Car Engine Oils, Diesel Engine Oils and 2/3 wheeler oils • Product Promotion Campaigns • Below-the-line activities for the Trade • Micro Marketing at Retail Outlets • New Trends

  8. Advertising - MASS MEDIA • ELECTRONIC – TELEVISION • PRINT / PRESS – NEWSPAPERS, MAGAZINES AND PERIODICALS • RADIO – FM AND OTHER CHANNELS • OUTDOOR – HOARDINGS – RETAIL OUTLETS, TRUNK ROUTES AND AT EVERY POSSIBLE LOCATION

  9. Electronic Media • News Channels – widened choice – English and Hindi baskets • Music Channels for youth-oriented Brands – 4-stroke bike oils • Movie Channels for Hindi and English • General Entertainment Channels – Soaps & popular entertainment programs

  10. PRINT OR PRESS • PRINT ADVERTISEMENTS AS CARRIERS OF BRAND MESSAGE • GENERAL, BUSINESS, AUTO NEWSPAPERS • MAGAZINES – GENERAL INTEREST, AUTO, AIRLINES, SPORTS ETC., • PERIODICALS – INDUSTRY BASED, R&D, INSTITUTION-BASED • SOUVENIRS

  11. RADIO AS A MEDIA OPTION • REBIRTH OF THE MEDIUM • ARRIVAL OF NEW FM CHANNELS • CHOICE OF A.I.R. AND PRIVATE FM CHANNELS • SUITABLE TO BRANDS WELL RELATING TO TARGET AUDIENCE

  12. UNCONVENTIONAL MEDIA • SURFACE PAINTING AND PANELS ON SUBURBAN BUSES • OIL TANKERS • PANELS AND PAINTING OF PASSENGER RAIL RAKES • PAINTING ON GOODS WAGONS • DISPLAYS AT AIRPORTS • WALL PAINTINGS AND SHUTTER PAINTINGS IN BAZAAR • WEIGH BRIDGES AND TOLL NAKAS

  13. POPs for support at POS • BANNERS – CLOTH, PLASIC, VINYL • POSTERS – PAPER, PVC, POP-UP • DISPLAY RACKS IN SALES ROOM • ISLAND DISPLAY STANDS • FOAM BOARDS • GLOW SIGNS – BACKLIT GLOW BOXES WITH MESSAGES ON VINYL MOUNTED FRAMES

  14. HP LAAL GHODA : A CASE STUDY ENGINE OIL FLOW PATTERN IN INDIAN MARKET SUPERIOR PERFORMANCE BRAND DRIVEN PERF. (12000 KL) (60000 KL) API CF –4 10% 10% STANDARD PERF. COST DRIVEN PERF. (84000 KL) (120000 KL) API CD + MACKT-7 16% MIL-B MONO, MIL-B-MULTI 7% • SPURIOUS • (48000 KL -EST)

  15. LAAL GHODA- A CASE STUDY OBJECTIVES OF BRINGING THIS BRAND IN THE MARKET • ATTACK SPURIOUS MARKET • MARKET UPGRADATION BY ENSURING A MINIMUM QUALITY LEVEL • TO MAKE A COSTWISE ATTRACTIVE `HP BRAND` AVAILABLE IN THE MARKET

  16. IMPROVE `HP SHARE` IN COST DRIVEN PERFORMANCE PURCHASE. • INCREASE OUR VALUE ADDED SALES. • REDUCE REREFINING

  17. CASE STUDY – LAAL GHODA • BRAND NAME – Simple, Customer friendly without any jargons • PACKAGING – Label showing the picture of bucking horse as pneumonic • POSITIONING – at a technical spec level hitherto unexplored • PRICING – competitive and value-for-money • SIMPLE PRINT COMMUNICATION – Ghode ke taakhat, Chane ke bhav !!

  18. HP LAAL GHODA • BECAME ONE OF THE HIGHEST SELLING BRANDS IN DEO SEGMENT • BRAND – EXTENSIONS • IMPROVED VERSION AS LAAL GHODA PLUS

  19. the LAAL GHODA print ad

  20. PRODUCT PROMOTIONS • SHORT-TERM FOCUSED ACTIVITY FOR INCREASING SALES • ALSO CONTRIBUTE TO BRAND BUILDING • STRONG BRANDING OF PROMO BASED ON A POWERFUL TARGET GROUP CENTRIC THEME • BIG ASPIRATIONAL PRIZE AS CENTRAL FOCUS • GOOD NUMBER OF SURE-SHOT GIFTS TO SPREAD THE MESSAGE THROUGH WORD-OF-MOUTH

  21. GIFTS IN PROMOS • MEGA ASPIRATIONAL PRIZES/ GIFTS LIKE TRUCK, BIKE, FOREIGN TRIP ( HOLIDAY OR SPORTS EVENT ), ETC., • SURE-SHOT GIFTS LIKE COINS, COUPONS, GARGLES, PILLOWS, WATER BAGS WATCHES, TORCHES, MUGS, KEY CHAINS, CASSETTES, UMBRELLAS, RAIN COATS, ETC., DROPPED INSIDE THE PACK

  22. LEARNINGS FROM PROMOS • NECESSARY TO HAVE A STRONG BRAND FOR PROMO • SURE-SHOT GIFTS WORK • INSTANT GRATIFICATION Vs REDEMPTION MECHANISM • MORE LESS VALUE PRIZES THAN LESS MORE VALUE PRIZES

  23. New Trends • In-Movie Advertising • Promoting Brand related Movies • Sports related sponsorships like SERVO end in one of the Cricket stadiums

  24. MICRO MARKETING FOR RETAIL OUTLET NETWORK • Most significant communication initiative providing customized solutions at a local level to reach more users and create greater Brand-Customer interaction than Mass Media • HP Engine Oils – more realistic, measurable, sales linked local activity bridging the gap between media delivery and desired end result which is sales

  25. today’s Lube Market is ….. • as much a FMCG market in terms of competition and hence the tremendous need for Branding initiatives • every single opportunity for Branding is being explored !!!

  26. PRICING STRATEGIES LUBES

  27. If India is a net importer… Import Parity Prices (IPP) will prevail in the country Refiners will be able to sell all their produce domestically at or near IPP If India is a net exporter... Export Parity Prices (EPP) will prevail in the country Some refiners will export Even for refiners which sell domestically, realisations will be at or near EPP levels Expected product realisations (price) for the Direct consumer segment

  28. New ChallengesLeveraging Technology • Robust Accounting & Business Process • Enterprise Resource Planning • Efficient Logistics Management • Supply Chain Management System • Consumer Interphase • Customer Relationship Management • E-Commerce • B2B B2C

  29. New ChallengesLeveraging Technology • Establishing Demand/Supply Trends • Predicting Pricing of products • Street Pricing of Retail products • Along with Industry • Free competition • Reacting to competition changes • Data collection/Pricing

  30. PRICING Importance of Pricing • Pricing is of critical importance in the marketing mix • Only element that produces revenue without incurring additional costs • Positions your company in the minds of consumers • Pricing influences short- and long-term profit performance

  31. STRATEGIES Pricing Strategies • Cost plus • Customer value • Market driven • Channel distribution • Infrastructure driven

  32. PRICING POLICIES The Problem • Adoption of skewed pricing policies • Damaging to the company • Erodes services to customers and community • Desperate attempt to “hang on to customers” • Fend off new rivals • Grab or maintain market share • The hope does not square with the reality • Price is but one weapon in the marketing battle

  33. IT IS NOT THE CROOK IN MODERN BUSINESS THAT WE FEAR…… IT IS THE HONEST MAN WHO DOES NOT KNOW WHAT HE IS DOING

  34. Pricing Model for Lubes MRP Model Base Oil Cost XX Additive Cost XX Raw Material Cost XXX Blending Cost XX Marketing Overheads XX Drum Cost XX Total Cost XXX

  35. Pricing Model for Lubes MRP Model(cont…) Total Cost XXX Margin XX Excise Duty XX Package Differentials XX Sales Tax XX Dealer’s Commission XX MRP XXX

  36. STRATEGIES FOR INCREASING MARKET SHARE • VALUE BASED CUSTOMER SERVICES/ CONVENIENCES - DIFFERENTIATION OF SERVICES HAVE BECOME IMPERATIVE - SUPPORT SERVICES ARE ESSENTIAL IN TODAY’S COMPETITIVE SCENARIO

  37. APPROACH TO MARKETING SERVICES • DEFINE VALUE IN USE • ONE CAN SELL SERVICE IF IT IS PERCEIVED AS HAVING VALUE IN USE • IDENTIFY THOSE SERVICES THAT ARE SEEN AS INCREASING THE VALUE IN USE OF PRODUCT. • SEGMENT YOUR MARKET - NO MARKET IS HOMOGENEOUS • CUSTOMERS WHO ARE VERY PRICE SENSITIVE REQUIRE SOME ADDED VALUE • CUSTOMERS NEEDING ENHANCED ADDED VALUE ARE PREPARED TO PAY FOR THE SERVICES

  38. APPROACH TO MARKETING SERVICES • DEFINE VALUE IN USE • ONE CAN SELL SERVICE IF IT IS PERCEIVED AS HAVING VALUE IN USE • IDENTIFY THOSE SERVICES THAT ARE SEEN AS INCREASING THE VALUE IN USE OF PRODUCT. • SEGMENT YOUR MARKET - NO MARKET IS HOMOGENEOUS • CUSTOMERS WHO ARE VERY PRICE SENSITIVE REQUIRE SOME ADDED VALUE • CUSTOMERS NEEDING ENHANCED ADDED VALUE ARE PREPARED TO PAY FOR THE SERVICES

  39. LIST YOUR SERVICES - MANY SERVICES CAN BE OFFERED WITH THE PRODUCT AND SOLD AT A PRICE - e.g. INVENTORY MANAGEMENT, LOGISTICS MANAGEMENT, TRAINING ETC - IN SOME CASES THESE SERVICES CAN BE SOLD SEPARATELY EVEN IF THE CUSTOMERS HAVE NOT BOUGHT THE PRODUCT

  40. CHOOSE A CUSTOMISATION STRATEGY - DEPENDING ON THE NEEDS OF THE CUSTOMER THE STRATEGY NEEDS TO BE WORKED OUT • SELECT YOUR TARGETS - NOT ALL CUSTOMERS WILL WANT THE SAME VALUE ADDED SERVICES - IN MATURE MARKETS WE CAN DISTINGUISH BETWEEN RISK AVOIDANCE SEGMENT, THE TROUBLE FREE SEGMENT AND THE PRICE SEGMENT - TARGETING MEANS CHOOSING WHICH SEGMENT YOU WILL ATTACK FIRST AND WITH WHAT OFFERING

  41. PACKAGE THE SERVICE TO MAKE THE INTANGIBLE TANGIBLE - MAKING THE “ ABILTIY TO SERVE” AS TANGIBLE AS ITS REALITY REQUIRES COMMUNICATION e.g. TESTIMONIALS, REFERENCES, REFERRALS. - IN ADDTION CLEARLY PACKING WHAT THE CUSTOMER GETS IN A TRANSPARENT LANGUAGE WILL ALSO CONTRIBUTE TO REINFORCING YOUR ABILITY TO SERVE.

  42. PRICE ACCORDING TO THE AMOUNT OF CUSTOMISATION • IT CAN BE COST PLUS VALUE PRICE PER ITEM OR PRICES AND LIST (LABOUR AND PARTS) PER PROJECT • FOR PACKAGED SERVICES PRICE PER SERVICE IN THE FORM OF AN ANNUAL LUMPSUM IS BETTER • DEVELOP SPECIFIC ORGANISATIONAL AND SELLING SKILLS • DIAGONISTIC SKILLS TO PROPOSE THE RIGHT SOLUTION AND THE MAXIMUM USE OF INDIRECT COMMUNICATION METHODS TO REINFORCE THE “ABILITY TO SERVE”

  43. CREATE COMMUNICATION PARTNERSHIPS - THE OPTIMAL PACKAGE (REMOTE, ELECTRONIC AND FACE- TO- FACE) OF COMMUNICATION WILL DEPEND ON THE INTENSITY OF THE INTERACTION REQUIRED, ITS FREQUENCY AND ECONOMIC ANALYSIS - FOR EACH CUSTOMER OR CUSTOMER SEGMENT THE APPROPRIATE FORM OF COMMUNICATION MUST BE CREATED

  44. MEASURE TO I MPROVE EFFECTIVENESS - MEASUREMENT MUST BE BALANCED BETWEEN THE NEEDS OF THE CUSTOMER AND REQUIREMENTS OF THE SERVICE PROVIDER

  45. THANK YOU !

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