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Marketing Case Analysis

AMBASSADOR TORCHLIGHTS CASE

GEETESH SANODIA SCMHRD 2011A57 MBA 2011-13

Situational Analysis
The Ambassador Torchlights is one of the most famous companies when it comes to dry cell batteries and has grown due to its vast distribution network with more than 80000 retailers and stockiest. They have wide national level distribution network covering both urban and rural sector. They have wide presence in rural area. It wanted to follow the leader in consumer products to serve the weaker sections of society. The company biggest competitor is Union battery manufactures, having their own line of blade manufacturing called as Best. Ambassador wanted to take care manufactured by Central Industries. of the distribution of blades

Central Industries marketing has not paid off well and they were desperate to hand over the distribution to Ambassador under clause that they would terminate the contract if they were not satisfied with performance. There was keen competition among 30-40 nationally marketed blade brands. Stiff competition from foreign brands was substantial. Now Ambassador Torchlights is at crossroads as to go for their own brand with Central industries or to take over their distribution.

The Problem
Ambassador Torchlights want to make use of their good distribution network in consumer products area. So they are now at Carrefour as to how to leverage on it. Central Industries blade has often received complaints on their faulty blades. The control on quality is poor and bad repeat purchases. Now it is a risk on part of Ambassador to make Central as their supplier unless their operation and production got stabilized. Ambassador Torchlights with their vast retailer network can take over

distribution of Central Industries blades. But according to contract Central Industries may any day terminate from the contract and can cash in on their profits. The competition from the national market brands and the smuggled international brands is intense. Hence it is hard for Ambassador to bring their brand. Proper strategy and research has to be done before entering followed up by intense marketing. They have to devise structured advertising and promotional strategy to edge out in a blade market.

The Options
1. Ambassador Torchlights can make Central Industries as their blade supplier and can distribute the new brand using wide dealership network.

2. Ambassadors can themselves start producing blades and can distribute using their strong network of dealers.

3. Distribute Central Industries blades with Ambassador Torchlights dealer network in weaker sections of India, specially the rural sector.

4. To launch the new type of battery in India with superior performance and great value for money. By having focus on rural India.

5. Collaborate with some chemical company to make wet cell and OEM for mobiles phones, laptops etc.

Criteria for Evaluation


The following criteria for evaluation have to be considered on the order of importance.

1. Quality of blade 2. Feasibility in manufacturing of blades 3. Capital needed for blade manufacturing facility 4. Technical man power and process know how about blade manufacturing 5. Future state of things with Central Industries 6. Positioning of new brand blades in market 7. Long term plan and intention in blade market

Evaluation of Options
1. Ambassador can ask Central Industries to make blades for them and they themselves can look after the distribution, which is their core strength. But Ambassador should make sure the quality of the blades and their control on quality is good. This has been a major issue with Central Industries for a long time. But in the highly competitive market where so many national and smuggled goods are there, it is necessary to have a proper strategy and marketing plan to achieve profits.

2. Since Ambassador has a very strong distributor network it can take over the distribution of Central Industries blade. But Central Industries contract poses a huge threat as to they may take advantage of Ambassadors network and in future they may start their own network with the dealers. In a long-term perspective this contract may affect Ambassadors growth and there is no value addition to it.

3. Since metallurgical processes for dry cell is more common with carbide blade, Ambassador themselves can start their own facility to manufacture. Their network will make it easy for them to sell the blades. This may require capital and blade process knowledge. It may be a huge risk to diversify from dry cell business, but in long term it will help them enter into rural market for more consumer goods. Finding apt technical resources and process domain unit is a big challenge in order to sustain.

4. Ambassador may expand themselves in areas of wet cell and molten salt batteries. They can acquire or collaborate with chemical companies to start off. Using their network they can distribute easily too. This will increase their share and help them move as a leader in battery segment. Also in a long-term perspective this gives clear edge over competitors.

The Recommendation
After evaluating the options, knowing the process of blade manufacturing and starting their own facility will be a good option for Ambassador Torchlights. Since they are doing very well in dry cell battery market, starting a new facility to produce blade that is more oriented towards their early process will be less painful. Also their edge is in their distribution network. Making a product under Ambassador will increase their brand image too. Finding technical expertise will be a major challenge.

Action Plan
1. Make a study on blade manufacturing process and find a technical expertise team for the same. 2. Collaborate with some foreign company about technological knowhow of modern blade manufacturing. 3. With the new management team in Blade business, develop companys growth strategies in rural market. 4. Invest in product innovation and manufacturing facility. 5. Bring continuous improvement in operating procedures and produce efficient and effective blades. 6. Create a marketing and promotion plan for the launch of new blades. 7. Sell the blades using the wide distribution network. 8. Push the blades to dealers by offering initial sales promotion and discounts.

Contingency Plan
If the suggested plan doesnt work out, they can look for other consumer products. The broad distribution will really help them sell these consumer goods. They can collaborate with FMCG Company to distribute their products. By this way they can make use of their distribution network to its fullest strength.

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