CASE: 1
VIRGIN MOBILE INTRODUCTION
Virgin Mobile, a leading branded venture capital organization, is one of the world’s most recognized and respected brands. Conceived in 1970 by Sir Richard Branson, the Virgin Mobile Group has gone on to grow very successful businesses in sectors ranging from mobile telephony, to transportation, travel, financial services, leisure, music, holidays, publishing and retailing. Virgin Mobile has created more than 200 branded companies worldwide, employing approximately 50,000 people, in 29 countries. Its revenues around the world in 2006 exceeded £10 billion (approx. US$20 billion). In Indian mobile market, Virgin mobile is a unique player based on its business model and strategy. It is the only service provider which does not hold any bandwidth and mobile setup infrastructure but uses Tata Teleservices spectrum and is penetrating market totally on its branding and marketing strategy. Creating a niche brand and promoting it to specific customer segment with proper marketing has been the key success factor for virgin mobile across the globe. So, from marketing and customer understanding point of view, this is a very unique company to study.
UNDERSTANDING VIRGIN’S BUSINESS MODEL:
Virgin has promoted itself as the brand for young India, keeping the Indian youth as its target customer segment. The idea behind targeting this segment can be found inherited in virgin’s business model. The salient features of Virgin’s business model from customer perspective are:
1) With intensive competition and reducing voice tariffs, the profit margins for voice service are decreasing day by day. So, the future profit strategy is maximizing profit margins through data services and it is youth segment which provides maximum data service revenues.
2) Future projection of increasing young and working population of India as 65% of overall population by 2020.
3) Increased use of data services in future due to technological advancements. So , in mobile sector where all other players are trying to provide similar service to different customer segments, virgin is targeting specific segment with tailor made plans keeping its long term goals in mind.
CUSTOMER ACQUISITION AND RETENTION STRATEGIES
The company knows that they are trying to position themselves into a very established and competitive market. They understand the fact that they cannot start making profit from day one neither they have plans for it; they anticipate to achieve a subscriber base of 5 million in next three years and will make profit afterwards they will be able to break even in three year or so. Sir Richard once said, “We want to deliver a more tailored and relevant offering for a single segment.” Company targets only 10% of the above mentioned segment and have plans to acquire and retain them by various innovative propositions, some of them are-
1 Providing services which were not offered so far
a) Get paid for incoming calls.
b) 50 paisa calls across the country.
c) A brand truly meant for the young India which is reflected at each & every touch point.
d) Extensive data service offers in the form of Vbytes.
e) Excellent value added plans.
f) Go online facility for enquiry, purchasing phone, recharging and everything.
g) One-touch VAS access from every virgin mobile.
2 Providing services which others are not providing meticulously
a) Easy to change the handset from a wide range of handset providing at very reasonable prices
b) Boring customer care services telling you are in queue.
c) One customer care officer dedicated for all queries of one customer leading to transparency.
d) No jammed or bad network coverage.
e) Tailor made customized plans without any hidden charges.
f) No monthly bills.
VALUE CREATION THROUGH PRODUCT DESIGN:
Various steps that Virgin is taking to add value to the customer are on price, quality, technology and social front. Company is providing the best prices in whichever plan you go, quality of signals is not only comparable but better than most of the service providers, on technology front it is the first in India to go for one-touch VAS access from every Virgin Mobile.
Questions
1) Who was the Target Market for Virgin Mobile?
2) What do you understand by Value Creation in context to this case study?
3) Does the customer acquisition and retention strategy really help Virgin Mobiles?
4.) Study and elaborate the business model of Virgin mobile?
CASE: 2
SOTC: An Overview
Established in 1949 with just five employees at an office in Cawasji Hormusji Street, Mumbai, SOTC has grown to become one of India’s largest travel companies. By the year 1968, the Company had a turnover touching Rs 25 million. A major turning point came in 1976 when SOTC handled its first group tour to the US during the bicentennial celebrations. Within three years, SOTC had taken about 500 passengers to Europe, the US, Singapore and Japan. In 1981, came another breakthrough when SOTC Package Tours began active advertising, with the first ad hitting the newspapers Between the years 1983 and 1995, SOTC grew by leaps and bounds. It moved to new premises at Church gate, Mumbai, installed the first computer for sales and operations, and went through a management metamorphosis with a complete restructuring of the business into autonomous Strategic Business Units (Subs) with a state-of-the-art call centre. SOTC has been fulfilling the travel needs of Indians for over five decades now. It continues to seek out new and exciting destinations to offer to outbound travelers. SOTCs outbound business operations broadly encompass Packaged Group Tours for Indians and Individual Holidays. SOTC World Famous Tours caters to those who seek comfort in group travel. It is widely acknowledged to be the most successful package tour brand in India. Recognizing the importance of language markets, SOTC also pioneered tours conducted in Marathi and Gujarati under the SOTC brand extensions:
MARKETING MIX OF SOTC PRODUCT
Product is the combination of tangible and intangible elements. The Tourism(SOTC) product, which is mainly the destination, can only be experienced. The views of the location travel to the destination, the accommodation and facility as well as the entertainment at the destination all form the tourism product. Thus, it is a composite product combination of attraction, facilities and transportation . Each of these components has its own significance in the product mix and in the absence of even single components, the product mix is incomplete.
Services Offered by SOTC
- Escorted tours
- Customized holidays
- Trade fairs
- SOTC sports
- Corporate tours
PRICE
Pricing in tourism is a complex process. Pricing includes the prices of other services like Air travel, Bus, Railways, Hotels, etc. All are included in tourism package. Pricing also depends on the Geographic Location of the destination. Pricing also depends on the competitors price. Pricing also depends on Seasonality. Seasonality is the most important factor in pricing. To match demand and supply tourist managers try to get either discount .E.g. Taj is the tourist attraction in India. Pricing is also based on competitors pricing. Pricing is also subject to government regulations .E.g. Air price changes tourism package also changes, if Hotel charges change then also tourism package changes. Pricing of the tourist product is a complex matter because of its composite nature. Geographical location of the destination affects the pricing decision. At the same time, seasonality factor and varying demand cannot be overruled. The objective of pricing in any other firms is to fetch a target market share, to prevent competition, and to take care of the price elasticity of demand. A very important way, in which SOTC responded to their highly complex pricing circumstances, is to operate at two levels.
- The first level is corresponds with the marketing strategy, which concerns with the product positioning, value for the money, long run return on investments etc.
- The second level corresponds to the marketing operations or tactics where the prices are manipulated to match the current demand and competition
PLACE
Different distribution strategies can be selected for Tourism marketing. Tourism as a product is distributed as a travel. Internet is also used widely. There is an also small agent spread all over the town who plays a role of place. Large travel companies like Thomas Cook, Cox & Kings, SOTC, etc they act as a wholesalers and these wholesalers also act as a retailer. The two major functions performed by the distribution system in tourism marketing are
- To extend the number of points of sales or access, away form the location at which services are performed or delivered
- To facilitate the purchase of service in advance
Different distribution strategies are selected for Tours marketing by SOTC. There are also small agents (who have taken franchise of SOTC) spread all over the town/country who also play a role of place. SOTC act as wholesalers and also act as a retailer. The latest mode of reaching customers is through Internet that is SOTC has its own website from where information on the tours can be procured, direct booking can be done for which the payment can be made through the credit card. SOTC also has its own offices from where booking can be done.
1) Franchises: Offices in all major cities of India,347 offices in India
2) Tie Ups: Flightraja.com
3) Travel boutique online
4) Internet Booking of Packages and Tickets
PROMOTION
Advertising and sales promotion in Tourism can be very effective when supplemented by publicity and personal selling. They use electronic, print all sorts of media they use; and it is highly promoted industry. Public or PR (Public Relation) plays an important role in tourism. It is also through recommendation of friends and relatives this is a biggest promotion. Creation of awareness is an important factor in the formulation of marketing mix for the tourism industry. The promotion task simplifies the activities of informing, persuading and influencing the decisions of potential tourists. The promotion mix plays a vital role as the users of service feel high degree of involvement and uncertainty about the product and their role in buying process In the tourism industry the travel agents and the travel guides are the two most important people who speak a lot about the industry. Hence it is imperative that they have to be at their best at all times. Travel guides especially, are expected to have a lot of patience, good sense of humor, tact to transform the occasional tourists into habitual ones, thorough knowledge of the places, linguistic skills etc
SOTC`S PEOPLE MIX-
- Includes travel agents, tour operators, tour guides.
- Locals are employed
3 Exhaustive training is provided
4 2900 employees through its 347 offices and caters to 3 million customers.
PROCESS OF SOTC
The operation process of the tourism firm will depend on the size of the tourism firm. The sequential steps involved in the delivery of the SOTC products are:
- Provision of travel information — The information regarding the travel is provided at a convenient location where the potential tourist seeks clarification about his proposed tour.
- Preparation of itinerates—— SOTC prepares its composition of series of operations that are required to plan a tour.
- Liaison with providers of services— Before any form of travel is sold over the counter to a customer; SOTC enters into the contracts with the providers of various services including transportation companies, hotel accommodation, coaches for local sightseeing etc.
- Planning and costing tours—— Once the contracts and arrangements are entered into, then the task of planning and costing the tour, this will depend on the tour selected as well as physical evidence.
- Ticketing—– The computerized reservation system has in recent years revolutionized the reservation system for both rail and air travel. SOTC also provides the online ticket booking facilities to its customers, which further leads to time saving process for it`s customers.
- Provision of foreign currency and insurance— SOTC in case of foreign travel also provide foreign currency as well as insurance to its customers.
PHYSICAL EVIDENCE
The Physical evidence of a tourism product refers to a range of more tangible attributes of the operations. Tangibalising the product is a good way of giving positive and attractive hints or cues to potential customers with regard to the quality of the product., For SOTC , Elements Such as quality and attractiveness of décor, effective layout of establishment, surroundings and quality of promotional materials are all important.
MARKET SEGMENTATION
Indian travel market can be classified into two broad categories International Travelers- Those crossing International borders Domestic Travelers – Those travelling within India. International Travelers can be classified as Inbound Travelers (those who travel into India from Overseas) and Outbound of India (who travel internationally.)
Inbound market is further segmented into six broad categories
- Holiday and sight seeing.
- Business travelers
- Conference attendees.
- Students
- Visiting friends
- Relatives etc.
TARGETING
Such segmentation is required when targeting the offerings to a particular segment. For Example
- The mass market consists of vacationists that travel in large groups and prefer all-inclusive tours. They are generally conservative. The popular market consists of smaller groups going on inclusive or semi-inclusive tours. This group includes pensioners and retired people.
- The individual market consists of chairmen, senior executives, etc.
- As the lifestyle changes, consumption of services might change. For example, a newly married couple might prefer romantic holidays, but once they have children they would prefer family vacations where there are plenty of activities to entertain kids. Teens and youth might prefer adventure holidays whereas senior citizens would probably prefer more relaxing vacations
KEY TO SUCCESS FOR SOTC
The key to success for SOTC will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. Along these lines the company intends to implement advertising, personal selling and direct marketing strategies to the target markets. Their personal selling marketing strategies will rotate around keeping in touch with hotels and travel agencies for major customers, and advertising customers. Hence their key success factors will include the following:
1) Excellence in fulfilling the promise: intend to offer completely enjoyable, comfortable and informative travel excursions that will ensure that travelers are thoroughly satisfied and appreciative at the end of their trip.
2) Timely response to customers’ requests: SOTC cannot afford to delay their clients for whatever reason, as this will have negative bearing on our image and reputation, including future business. Hence they need to be continually communicating with the client, including hotels and lodges so as to ensure that are constantly available to the client meeting their expectations.
3) Solid and fruitful strategic alliances: Considering the nature of their services and our relative infancy on the market, SOTC should realize the importance of establishing and maintaining fruitful strategic alliances with various stakeholders, including hotels, lodges, and travel agencies, so as be assured of constant flow of customers, fulfilling their needs at every opportunity.
4) Marketing know-how: There will be a need to aggressively market SOTC business and the services they provide so as to be continuously at the top of prospective client minds. This will also act as a temporary deterrent for companies contemplating entering our market. Advertising shall be undertaken on a regular basis.
Questions
1. What P’s are involved in marketing mix of services?
2. Explain the People mix with reference to SOTC?
3. State the key to success for SOTC?
4. Give an short marketing mix of services of Banking?
CASE: 3
ICICI: Hum Hai Naa
Making impact with the experiences on post decision processes
Banking in Indian post nationalization in 1969 projected a picture of a laid back approach, where the basic focus was driven towards savings and deposits. Most retail customers with banks operated with in the dictate laid down by banking regulations. Aspects like, banking between 10- 2pm, Saturday half-day, Sunday off day, lag time get drafts made and numerous other facets which were like bottlenecks with which the retail customer at the bank was conditioned too. After liberalization in 1991 and with banking sector also opening, the industrial credit arm of the government expanded into retail banking in 1994 with ICICI bank.
After Mr K V Kamath took over as MD and CEO of the bank in 1996, ICICI went through a series of takeovers and new product launches between 1996 & 1999. with 364 branches, over 46 extension counters, a network of over 1050 ATMs, multiple call centers and well-developed internet banking, the Mumbai HQ of ICICI bank can provide financial services all over India. Its customers often use multiple channels, and they are increasingly turning to electronic banking options. Business from ATMs, internet, and other electronic channels now comprises of almost 50% of all transactions, up from just 5% in last couple of years. In the process of growing its business to this level, ICICI bank has distinguished itself from other banks through its customer relationship. ICICI bank executive director Chanda Kochar says, “In an increasingly competitive environment where customers are becoming more demanding and financial services are getting commoditized, ICICI realized the key differentiator would be customer focus”.
ICICI today has not just expanded into numerous divisions like insurance, mutual funds, securities, and commodity trading, but even their core banking business has extended into a multitude of activities, providing benefits to the customers. The ICICI ATM today is not just a point for cash withdrawal, but it can also be used for mobile prepaid card recharge, buying internet packs (ATNAny Time Net), payment of donations (Anytime blessings), Mutual funds transactions, bill payments, flexi top ups and calling cards. ICICI’s aggressive and customer driven approach on the flip side has also been able to open the market. Nationalized banks like SBI, Corporation Bank etc., have had to realign themselves and a host of other private banks have followed the suit. HDFC bank, UTI bank, IDBI bank to name a few have always been known as the follower in the segment after ICICI’s aggressive opening. ICICI has redefined the Indian banking industry on how customer driven banking is done.
The case of ICICI bank illustrates and highlights the importance of customer satisfaction as the foundation of a successful business. Also, it shows how customer satisfaction depends on good performance creating positive feelings and perceptions of equity. In addition to this, it shows how customers can learn about the offerings by experiencing them directly. Finally, ICICI shows how by offering innovative and new range of services make the customers stay loyal. All this phenomena occurs after the consumer has made a decision. Hence, once a customer comes to you after making a decision on your product, as a marketer you should be ready to provide them with a detailed experience of your offerings so as to make them stay with you. You should be careful enough to provide them with the experience which should have a favorable impact of you and your products on your customers.
Questions
1. According to u what driven the success of ICICI in presence of so many nationalized banks?
2. What do you understand by customer satisfaction? How did ICICI gain it?
3. How the ICICI did changed the Indian Banking approaches?
4. What you understand by Post Decision Process?
CASE: 4
Why Grow Up” Frooti
“Why Grow Up” was a campaign started by Parle Agro to give Frooti new look and new positioning. The campaign was started in 2009 and now when we look back, it seems that creative agency has done a wonderful job in creating this campaign.
Advocacy is the most powerful means of creating goodwill and thus creating stronger brand. In all these advertisements, company has used common people and they are seen playing around with large, non-symmetrical, funny mango.
This is a great strategy in which brand has given preference to common people over celebrities and stars. The new campaign gives a new, young, happy and funny look to brand. “Why Grow Up” campaign is conceptualized by creativeland .
This is a part of long term strategy of company, as per the news they want to take brand to new heights and associate it with young and aspirations of audience. The company has even incorporated the new designs in the packaging with a small change in logo and brighter color of tetra packs.
The company has gone aggressive with smaller packs of frooti and gave a heads on collision to other fruit juices and aerated drinks. People have spent their lives growing with frooti and now when they are part of their new brand strategy.
The creator of ad has used candid cameras and captured the surprise impact of the participants who are playing a game and which in turn is made an ad. This is a very unique concept and highly appreciated by the audience. All people not only children but adults who still long for happiness in their lives love the advertisement.
Frooti is considered to be a cult brand and in some sense a category name also. Mango is considered to be king of fruits and brand company has done a great job in understanding the strengths of the company and revamping the identity of brand thus keeping its heritage intact
Questions
1. What is main objective of the “why grow up “campaign?
2. According to you what impact did the “why grow up campaign on consumer’s mind?
3. What role do the packaging plays create an image of brand like frooti?
4. How successful the “why grow up” campaign?