CASE STUDY – PROXIMITY OR SOMETHING MORE?

What matters?
-Proximity or something more??

Written by

ASHIK ABDULLAH
10SBCM0066
MARKETING –B

MBA 2010-12
ALLIANCE UNIVERSITY
SCHOOL OF BUSINESS

ASHIK ABDULLAH – ABS-BANGALORE- 13-03-11

 CASE STUDY – PROXIMITY OR SOMETHING MORE?

Proximity or something more??

“Now that you have an MBA, you will never be as successful as me!”

- Larry Ellison, co-founder and CEO, Oracle Corporation

Vaibhav Anand watched the discussion from the last row. In the front row sat Kunal and
Vidhur. There were many more in the room including Sriram, Vishal and Vijeyta.

The environment seems very heated up. To know what was going on would be difficult to
tell. But a closer look at the proceedings and one will discovers that discussion was on the
decreasing sales of Mother’s Pizza and increasing market share of Food club. The discussion
started as part of the case study that they were to write for MRDM module.

And just when the Vidhur said angrily, “Arre baba! This is nothing but an advantage of
proximity, the place part in service marketing and nothing else” Vaibhav decided he would
need that coffee which his doctor had said, “Only if it will kill you to not have it.”

For Vaibhav it was not just the proximity that mattered, there was something more. With his
2 years of experience in sales he was sure proximity is not the only factor that rides the
business there is something more, but he was not able to figure it out. So he decided to talk
with the owners of both the eateries located at stone’s throw away from each other and
catering to the gastronomic needs of Alliance students.

MOTHERS PIZZA

Mother’s pizza owner when asked about the Food club and competition had some interesting
comments to make, something that Vaibhav never learned in his marketing classes.

“Conventional wisdom in most companies is that “the competition is the enemy” But many
take this too far.”   Vaibhav listened to him keenly nodding occasionally.

It felt like he was waiting to talk to someone from the morning, Vaibhav was also happy, as
he believed may be this long lecture can teach him more than what he learned so far in a 3
credit service marketing class.

“In the early days I purely demonized competitors.  They were stupid, evil and about to suffer
a crushing death.  They never did.  Instead, every time we launched new features they seemed
to launch similar features 2 weeks later like in the case of parcel service and home delivery at
zero cost.  They must have been working on them at the exact same time. I also learned that
we had way more in common with each other than I had thought.  “

ASHIK ABDULLAH – ABS-BANGALORE- 13-03-11

 CASE STUDY – PROXIMITY OR SOMETHING MORE?

Vaibhav was excited to know about this concept, but when he pointed out to decreasing sales
and market share, Mother’s pizza owner was quick to counter the argument and pointing to
the almost fully occupied eating space, said “Do you still think our sales are declining?? They
can copy our features but not our taste nor gain the loyalty that we have enjoyed over the
years from our valued kings- the customers.”

Vaibhav wanted to ask much more but the counter was getting busy, so he ordered a PEPSI
drank the same and moved out, amazed at the wealth of the knowledge that lies outside the
four walls of the classroom and also much more confused on what's that something that helps
you get the market share.

FOOD CLUB

Vaibhav moved straight to the cashier counter of Food club, the owner was there.
With a sweet smile and utmost courtesy he asked “what you want -sir??”
“Your success mantra” Vaibhav always knew how to start the conversation. The owner was
little surprised, but then Vaibhav struck the chord and explained him about the case study and
the search for that SOMETHING!!

Like the Mother’s owner he too had some interesting things to share. Vaibhav wondered why
they are so excited to talk about their success mantra. Anyways its good for me, he told in his
mind and pulled a chaired and sat near the counter.

“We know we got the proximity advantage, but we don’t except our business to be driven by
this alone. We don’t take your competitors for granted; they’re probably much better /
stronger than we think.”

When asked about copying the features and supplementary offerings of Mother’s, he just
scratched his head little and said “Listen, we have to understand you rarely will have
anything that’s TRULY unique.  Victory is often about better execution. They might say we
copied them, may be they are true but remember we always delight our customer. We believe
and treat them as co-producer and I believe that even if take away the proximity part away we
will win.”

“It’s all about customer relation and motivation and the best internal motivation for us is to
always be paranoid about our competitor.  I’m not saying to overly focus on them – I don’t
believe that. We focus on our customers & market, but are paranoid about the competition.

Vaibhav was all the more confused-Is it the taste of food that matters or is it the customer
relationship? Is it first mover advantage that matters or is it better execution? Is it being
paranoid about the competitor or is it something else? It was then he realised that he need to
submit the case study the next day. Stressed, confused, tired, Vaibhav goes for a beer!!

Anyone who isn't confused really doesn't understand the situation.

-Edward R. Murrow

ASHIK ABDULLAH – ABS-BANGALORE- 13-03-11