Channel Problem Sales Problem

Year 2010 Year 2003

Submitted By-
Rohit Sethi
Smitha Uppoor
Silky Gera
Vaishnavi Parvatika
Submitted to-
Prof. Vasant Cavale
CHANNEL PROBLEM
PART 1
CISCO CASE [Year 2010]
The technology transition has just begun. Network infrastructure providers around the
world are discovering that the network is not just about connecting people on the internet
or through mobiles. There are multiple market transitions that are expected which are to
change the way people acquire and use technology from collaboration and video to
virtualisation and cloud based services.
Four years back, Cisco Systems launched its massive rebranding campaign. It shortened its
name to Cisco and created The Human Network advertising campaign. The sole motive
of the campaign was to make Cisco a household brand a strategy to support its low end
products. Today, Cisco has built a significant presence in India, establishing its Globalization
Centre East in Bengaluru for $1 billion with 20% of global leaders to be based here.
The company has now redefined its business objectives to align with the changing market
space. Historically, the global strategy was focused on the networking domain. The partner
program in India was designed to cater to the same. Cisco is now evolving its strategies to
focus on three architectures: Collaboration, Virtualization and Borderless Networks and
other market adjacencies that are expected to be the growth drivers in future. This
demands a greater penetration into the Indian market. The intent is to shift the business
strategy to drive coverage in a competitive landscape.
Around 95% of Ciscos go-to-market strategy in India is driven by its channel partners, hence
forming a critical segment. They have been majorly concentrated across network domain.
With the revamp of business objectives there is a growing misalignment of the current
partner model with the evolved objectives. Should Cisco diversify its partners?
The company has had a negligible contact with the lower end partners. The company finds
their technical capability insufficient to keep in pace with the emerging technologies.
How can Cisco align its current partners with its new objectives?
How can the company ensure each of its intended technologies received required focus
from partners?
How can the company extend its reach in India?


PART 2
CISCO CASE SOLUTION
Cisco realised its need to revamp the its partner model in India to align it with the
companies renewed business objectives.
What did Cisco do?
The channel organization (the current partners) and the strategic alliance organization (of
the company) were merged into single, cohesive unit Partnership Organization, to ensure
moving beyond system integrators to build a more cohesive partner unit. The go-to-market
team and Cisco sales team were integrated. The partners received sufficient support from
the companys sales team. This increased the architecture adoption among the channel
partners and increased penetration across sectors and markets.
How did Cisco diversify its partners to cater to new business objectives?
Cisco diversified from its previously established channel partners majorly comprising of
system integrators by dividing its channel partners into five categories, each with specific
business objectives and market segment to cater to:
a) Gold and Silver partners who formed the largest chunk of India partners contributing
to 75% of the revenues
b) Managed Services or Service Providers which included telecom companies and large
service providers
c) Architecture led partnership focusing on creating coverage for adoption of the three
identified architectures: Borderless networks, collaboration and virtualisation
d) Transformational partnerships focusing on new market adjacencies to extend reach
e) Distribution Partners and disti-led partners were approached with renewed rigour to
drive their reach in Tier 2 and 3 cities
Leaders were appointed for each of the categories to drive coverage and market expansion.
It also overhauled the existing partners to steer penetration, enhance go to market, and
greater optimization of operations. It also strengthened existing team by adding new
distributors.
How did Cisco ensure each of its intended technologies received required focus from
partners?
The company supported its partner network with richer, better and faster offerings. It
continued to build value to its partners ensuring their profitability, investing in building their
capabilities and making more conducive business relationships with them.
Cisco evolved its industry-leading Value Incentive Program (VIP) to motivate its channel
partners to invest in architectural capabilities around collaboration, virtualization and
borderless networks.
How did Cisco connect to low end partners?
Training was provided to partners in Tier 1, 2 and 3 cities and remote partners were
encouraged to attend training in the cities nearest to them.
Direct online support was provided through Partner Help Online for partner issues, including
complete presales technical and product design assistance.
A six-month channel financing stimulus program was offered to provide the working capital
the partners needed to grow their business.
How did Cisco ensure extended reach in India?
Nine Rapid fulfilment depots were set across country to help partners with spares and
product replacement on a next business day provided the partner had a signed a service
contract.
Cisco build a distribution network with 30 stocking points across the country through which
they could reach out to any city.

To help reward and enable its partners' managed services practices, Cisco launched its next-
generation Managed Services Channel Program (MSCP) to increase its reach and benefits
Cisco started involving its partners in building strategies and future roadmap for the
company. It helped them get into specific verticals, develop solution around them increase
their ability to make margins, hence increasing their profitability.
Cisco adopted, a so well known, Together we lead approach prioritizing its partners to
help drive growth, engagement and loyalty through collaborative channel, partner model
transformation, business simplification and optimization to turn its game around in India.
IMPACT
As we see today, borderless network is extensively used in India both by corporations and
individuals (3G, Wifi). This huge proliferation in mobility led to raising security issues which
is further attended by Cisco. The solutions reached 40 million homes in India. The company
now partners in smart cities and industrial corridor projects.



SALES PROBLEM
PART 1
Cadbury India The story of regaining consumer confidence [Year 2003]
Cadbury India has been one of the most successful chocolate brands in India. The company
has commanded a whopping 70% share in the Indian market. In the early 2000s, the
company was very effective in meeting the global expectations, also one of the fastest
growing companies in India.
Cadburys growth rate in the 3
rd
quarter was 15.1% in the year 2003 and profits up by 15%.
At that time, Cadbury was busy planning to become a major sourcing hub for Cadbury
Schweppes and supplier of chocolates to the entire Asia-Pacific region.
In October 2003, worms were reported to be in a few Cadbury Dairy Milk chocolate bars in
Mumbai. Problems with infestation during storage occasionally can occur in the chocolate
industry throughout the world, if the product is not stored in ideal conditions. To be clear,
infestation, though unpleasant, is not a food safety risk. And although Cadbury provided its
then 700,000 shopkeepers with metal dispensers and coolers to keep the chocolate stored
properly, it was simply not possible to ensure all retail outlets were handling the chocolate
well. Before the 2003 infestation, Cadburys relationship with the FDA was agreeable: all of
Cadburys factories were certified and there had never been any food safety problems or
complaints.
At the time, this issue was further exacerbated by a recent incident in the soft drink industry
that had heightened consumer consciousness and scepticism of multinational companies
(MNCs). The soft drink incident succeeded in making Indian consumers ever more careful
and vigilant with their purchases; and the discovery of worm infestation in Cadbury
chocolates two months later occurred in this environment. The results of the widespread
media coverage were instantaneous. In less than a week, sales volumes crashed by 30%. In
the peak festival season, this was an unmitigated disaster. Cadbury quickly conducted a
research survey among 200 consumers in 7 cities. It showed that consumers did not want to
take a risk by buying Cadbury chocolates; 69% of consumers did not want their kids to buy
it, 58% would not buy it for kids. The awareness of infestation was high in the states of
Maharashtra and Kerala, and consumer behaviour had been adversely affected in the cities
of Mumbai, Kolkata and Cochin.
Within a few weeks of the initial incident, the perfect storm of media, regulators, and
political parties had created an impression that each and every bar of Cadburys chocolate
was infested. The damage to Cadburys public image was severe; Cadburys business and
reputation were at stake, as was internal employee morale.
What was the major problem that Cadbury faced during the crisis?
The primary challenge Cadbury faced was a lack of experience in knowing how to deal with
the media onslaught and subsequent crisis in consumer confidence to regain the sales.

Should the retailers be blamed for poor storage? And why?
What, in your opinion, are the possible actions to be taken to address the crisis and regain
the sales?
Cadburys response to consumers, however, was developed through learning by doing.
Cadbury therefore developed three key messages to respond to consumer concerns:
1. Infestation was a storage problem;
2. It was safe to eat Cadbury chocolates; and
3. Consumers must exercise the same care in purchasing a chocolate as they would
when buying any food item
Cadburys external response to the crisis included changing the product packaging,
implementing a comprehensive media campaign, and reaching out to its retailers.



























PART 2
CADBURY CASE SOLUTION
Major steps taken up by Cadbury to regain the reputation and improve sales:
Manufacturing related:
1. Investment in packaging: Cadbury responded with the consumer concern and
changed the packaging to include a sealed plastic wrapper inside the outside foil.
They invested up to Rs 15 crore on imported machinery and revamped the packaging
of Dairy Milk.
2. The metallic poly-flow was costlier by 10-15% but they did not hike the pack price.
3. They also reduced the number of chocolates in its bulk packets of 22 bars from the
present 60 bars
4. They also invested millions of dollars to achieve a production process in 8 weeks that
normally took 6 months.
Retailers related:
1. They acted responsibly and had emotional appeal by launching project 'Vishwas'
which was an education initiative to cover 190,000 retailers in key markets. The
campaign also helped to build awareness among retailers on storage requirements
for chocolates and assistance in improving storage conditions.
2. Replacement of old stocks: The team of quality control managers and 300 sales staff
executives checked over 50,000 of retail outlets in Maharashtra and replaced all
questionable stock with immediate effect.
Advertising:
1. Ad- spend increase: The company increased ad spends for Jan-March 2004 Quarter
by over 15% to re-gain the consumer confidence
2. Endorsement by a credible person: Amitabh Bachchan campaign helped restore
consumers' faith in the quality if the product. He put his personal equity in the brand
and did heavy duty endorsement.
3. They also used testimonial and have emotional connect with consumers and used
testimonial advertisement on TV called 'Sincerity'.

Other major campaigns were brought in by Cadbury with an emotional appeal towards the
consumers Kuch meetha ho jaye, Shubh Aarambh.