Problem Statement: To develop a new marketing segmentation, targeting and positioning strategy for The Fashion Channel (TFC).

Options: 1. Product specialization across multiple segments: Fashionistas, Planners & Shoppers and Situationalists. 2. Single segment concentration focusing on the Fashionistas. 3. Selective specialization targeting two segments the Fashionistas and the Shoppers/Planners. Evaluation of Options: Summary Revenue Expenses Net Income Margin 2006 Actual 310,630,400 216,918,912 93,711,488 30.17 2007 Base 289,167,360 234,527,021 54,640,339 18.90 Scenario 1 330,680,832 235,772,425 94,908,407 28.70 Scenario 2 404,482,560 252,986,477 151,496,083 37.45 Scenario 3 427,545,600 258,678,368 168,867,232 39.50

Scenario 1: The objective here is to demographically target the women aged 18-34 in all the three clusters. The option generates revenues about 1.3% higher than 2006. Since this option targets multiple segments, it does not run the risk of segment turning sour or competitor completely invading the segment. Scenario 2: The Fashionistas segment though small is strong in the highly valued 18-34 female group. The option generates about 62% higher revenues than 2006. This single segment concentration runs the risk of segment turning sour and aggravates the damage which can be caused by a competitor fully sweeping away the segment. Scenario 3: Though this requires additional $20 m on programming, selective specialization generates the highest revenue among the three cases, about 80% higher revenues than 2006. Also, no single segment risks in this case. Positive Consequences: Selective specialization generates highest revenue. Diversifies the risk among two segments. Larger presence in the market. Negative Consequences: Additional investment is required on programming to ensure that selections were aimed at both segments. Action Plan : Segment-By-Segment Invasion: Target the segments one by one starting with the Shoppers/Planners since they constitute the largest cluster size. Thereafter move to target the Fashionistas.

DECISION SHEET FOR BLACK & DECKER: POWER TOOLS DIVISION

Problem: How can I, Joseph Galli, increase the market share of B&D within the professionaltradesmen segment share from under 10% to 20% within three years, with major share take away from Makita? Options: 1) Harvest Professional- Trade Channels 2) Get behind B&D Name with sub-branding 3) Drop the B&D name from the professional-tradesmen segment Decision: Drop the B&D name from the professional-tradesmen segment, using the brand of DeWalt, change the color of its tools, price it higher by 5-10% and focus on the Two-Step channel and Home Depot Reason: 1) Dropping the B&D name: An advertising campaign to push sales in tradesmen category might hurt the consumer category. B&Ds name hurts sales in the tradesmen category and hence must be changed. Using the DeWalt brand name, which comes with a 70% awareness, would ensure that the tradesmen tools would have brand recognition apart from B&D, and hence this name would increase sales in the professional tradesmen category, from those who avoid B&D name. They should also optimize the products for this category 2) Changing color to yellow would allow DeWalt to differentiate itself from the earlier B&D products 3) In this category of professional tradesmen, higher prices are seen to indicate higher quality and service. Pricing DeWalt 5-10 percent higher to match prices of Makita would help DeWalt differentiate from B&D and also increase revenues for B&D 4) As 40% of tradesmen buy from the Two-Step channel, we should focus on this segment to capture the most popular method for purchasing tools. Home Depot being the second largest and fastest growing channel, we should increase our relationship with Home Depot. Pros and Cons of decision taken: Pros Increase market share of B&D without loss in other categories Takes advantage of existing awareness of DeWalt Allow DeWalt to differentiate from B&D Having a different brand might have B&D to have a separate focus for the professional tradesmen category Cons Abandoning a brand name ranked 7th in US, and 19th in Europe Employees within B&D might not support this move

Plan to take care of cons: This would be a way for B&D to develop a new brand name free of any negative associations. Also this would allow B&D to market directly against Makita to the professional tradesmen category without alienating the consumer category.

Saxonville Sausage Company Lipika Mitra, Section-E Problem Statement: Suitable Positioning Strategy for the launch of national Italian sausage brand by Saxonville. Options: The research has highlighted following two major positioning concepts: 1. Family Connection. 2. Clever Cooking. Decision: Saxonville Sausage Company should adopt Clever Cooking concept. Rational: Sausages belong to a homogeneous class of products. Hence there exist easily available substitutes in the market. Product differentiation is the key to capture the market. Though family connection is ranked the highest, it would be difficult to differentiate it from other competitors. Clever cooking stands a close second to Family connection in ranking. It is targeted to save the cooking time and this can be positioned to save the housewife time thus giving her additional time to spend with the family. Hence even the family connection aspect can be indirectly targeted with this concept. Further, it is easier to provide tactical support for this strategy. Pros: Cons: Concept ranked second. Risk of not grabbing as many customers as in Family Connection concept. Saves time for the time crunched housewife. Family connects over delicious food and in the saved time as well. EASY is the keyword.

Contingency Plan: The risk of losing customers by not adopting Family Connection can be reduced by emphasizing on the additional time for family gained by quick cooking. The advertising will focus on the satisfaction gained by housewife by creating quick tasty recipes for the family and spending more time with them.

Problem Statement: Scale up project Shakti to reach 250 million additional consumers through 100,000 entrepreneurs by 2010 without a proportionate increase in costs. Challenges:

Costs and Management Control: Costs will increase with scaling up. The numbers of Shakti entrepreneurs have to be increased without significantly increasing the number of people managing them. Finances: Absence of SHGs and MFIs make it difficult to arrange finances in certain villages. Government support: The model has varying degree of support from different state governments. Cultural Issues: Status of women differs across states. It is impossible for women in certain parts of India to venture out of the house to sell HLL products. Further, wide difference in dialects of neighboring districts makes the task of a RSP difficult. High Drop out Rate: Newly appointed Shakti entrepreneurs get demoralized by rejects in early calls and drop out. Training problem: The entrepreneurs are amateurs and lack education in making their business successful.

Recommendations: Monthly gathering of entrepreneurs: HLL RSPs organize a monthly gathering for all entrepreneurs in the same district, encouraging interaction and communication among them entrepreneurs. The experience & knowledge of the successful entrepreneurs will motivates others. Focus only on states with SHG: Focus only in states with SHG movement to increase its cost effectiveness. Minimize Conflict: As the HLL penetration to rural market is only a mere 16%, there will not arise any conflict between Shakti entrepreneurs and direct sales channel for market share. Moreover, a control measure can be applied by limiting the number of entrepreneur in each district thus minimizing conflict. Rewards and Bonus: Promote the system of rewards and bonus to encourage more women entrepreneurs. Scale iShakti and Vani: Sell the channel (iShakti) to interested , non-competitor parties like banks, insurance companies etc. The revenues generated can be used to finance Vani. Vani will help increase hygiene awareness and directly increase HLL sales in long term. Tie up with Banks and MFIs: Tie up with banks and MFIs to ensure lower interest rate on micro-credit.

Positive Consequences:
1. Monthly gatherings will not only increase the efficiency of each entrepreneur thereby increasing profits but also decrease the amount of time spent by RSP in visiting an individual entrepreneur.

2. The system of rewards and bonus will encourage more participation from women increasing sales. 3. Tying up with banks and MFIs will ensure availability of micro-credit at cheaper rates. 4. Training by successful entrepreneurs and RSPs will help others to successfully handle business. Negative Consequences: iShakti will not be viable in all villages because of their limited IT penetration. Hence, revenues generated through advertising in iShakti will be limited.

Topic: Assessing Impact of Operating Environment on Marketing Decisions

Problem Statement: A new pricing strategy for Omnitel. Options: 1. Sell highly subsidized handsets in exchange of an agreement with customer for a yearlong contract. The tariffs will be higher. 2. New tariff plan for segmented markets-local, long distance and international calls in addition to current plans. 3. Introduce prepaid cards for low-end customers with no monthly fee. 4. Eliminate monthly fee without entering into a price war with TIM and open shops in strategic locations. Advertise this new tariff plan. Evaluation of Options: Selling highly subsidized handsets will increase the customer base. However, this increase will not be sustainable since the customers will discontinue the contract post termination owing to the high tariffs. The conjoint analysis conducted by Omnitel indicates customer preference for different set of tariffs for local, long-distance and international calls. Coming up with segmented tariff plans will help capture maximum consumer surplus. Introducing prepaid cards would help capture low-end customer segment. Also, introducing such cards before TIM will give Omnitel a lead in the segment and capture large market share. Eliminating monthly fee will not cause any price war with TIM and will help increase the customer base more than with that with offering handset subsidies. Also, the increased customer base will be a sustained one. This will benefit dealers as well hence eliminating the need to offer them increased commission. This money can be spent on advertising campaign to increase demand. Recommendation: Eliminate monthly fee and advertise the new tariff plans. Further, introduce prepaid cards and new separate tariff plans for segmented markets. Pros: 1. Increased customer base. 2. Capturing maximum consumer surplus by introducing separate tariff plans. 3. No price war signal to TIM. Cons: 1. Demands additional investment in advertising. Contingency Plan: 1. Focus on further strengthening customer satisfaction by reducing the waiting time to about zero. This will give Omnitel a competitive advantage and lead to customers choosing Omnitel over competitors among parallel options.

Decision Sheet Reka Enterprises Lipika Mitra(Section E)

Decision Problem: M/s. Reka Enterprises wants to capture the market for cement paints and
needs to design an effective marketing strategy for the same.

Issues to be addressed:
A distribution agency needs to be identified to promote sales effectively and instruct on the correct usage of the product The market should to be targeted An effective discount /pricing strategy Decision regarding the promotional gift scheme

Options considered:
Engage the services of a reputed agency for distribution, selling as well as instructing on the correct usage of the product through campaigning. Directly deal with individual retailers to save on discounts offered to the wholesalers. Discontinue the present gift scheme and advertising policy. Concentrate on sales in a specific market like Tamil Nadu. Sales representatives of the parent firm can be trained for correct usage of the product.

Recommendation and justification:

Instruction on the correct usage of the product is an important factor. It is important to find a reputed agency to take care of this apart from selling. However, chances of finding an agency as good as required look bleak. It is probably also not a good idea to depend on just one agency for all operations. Even if such an agency was found, it would not be financially viable for the company as they would have to offer high discounts of about 30% (The current net rate is 26%) being a new small firm. Further, concentrating in a specific market like TN will hamper growth prospects for the company in the long run. Hence it is recommended that the company directly supply to retailers and pass on discounts usually given to the wholesalers to them. Additionally, the gift scheme should be discontinued, and the ensuing savings can be passed on as price benefits to the retailers and customers.

Positive Consequences:
Additional Discounts: Directly selling to retailers will result in additional discounts being passed on to the retailers. This will attract larger retailers and will also ensure greater reach in the market. Instruction and Promotions: Savings from discontinuing the gift scheme can be used for instruction and promotions.

Negative Consequences:
Logistic s: Co-ordination between multiple retailers might lead to logistical issues. Study: An initial study will be required to determine retailers that service the markets selected.

Action Plan:
Conduct an initial survey to check list of interested retailers. The logistical burden can be passed on the retailers initially.