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Strategic Marketing:
Case Study on Sudhir Telang Machinery Components
By Group 3 :
ASUTOSH DAS
UEMF15004
IPSITA SATAPATHY
UEMF15015
SOHAM PRADHAN
UEMF15027
Contents
1. SITUATION ANALYSIS (WHERE ARE WE ?) .................................................. 2
2. WHY ARE WE THERE? .................................................................................. 2
3. Target of STMC: (WHERE COULD STMC BE?) .............................................. 3
4. PROBLEM STATEMENT ................................................................................ 3
A. What type of pricing strategy to be followed ? ......................................... 3
B. What marketing strategies to be adopted to ............................................ 3
5. RECOMMENDATIONS (HOW TO GET THERE?) ............................................ 3
FOCUSSING MORE ON CUSTOMER PERSPECTIVE ..................................... 3
DEFINING COMPETITIVE ADVANTAGE ...................................................... 4
DEFINING PRICING STRATEGY .................................................................. 4
TACKLING LOW COST COMPONENT MANUFACTURERS ........................... 6
DERIVE BENEFITS BY INCREASING THE PRICE : .......................................... 6
MARKETING STAREGIES TO BE FOLLOWED ............................................... 7
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STMC promoted them shelves as High Quality oriented supplier with reference to its
competitor.
The company was using Cost + Margin Formula for pricing their products.
Single price offer for all type of buyers.
Sold no parts with loss.
Competitor:
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Nature of Demand:
To double its sales form Rs. 15 Lakhs in 1977 to Rs. 30 Lakhs in 1978.
To introduce spare sand components of new textile machine being introduced to Indian
market.
4. PROBLEM STATEMENT
A. What type of pricing strategy to be followed ?
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Quality: You can choose to beat the competition by offering a superior quality than
others.
Price: you can choose to beat the competition by offering the lowest prices
Service: or you can choose to beat the competition by offering an unforgettable
customer service.
Theres always an alternative to quality; if STMC focus on only offering the highest quality
at a premium price, customers will scout around for a lower quality at a cheaper price.
Theres always an alternative to price; if STMC focus on offering the cheapest price possible
it will require that you find a way to drive down your cost to the barest minimum. And this
can turn out in form of low quality products or services and customers will start to complain.
So what STMC should do?
STMC shall pick either of the two; price or quality as your competitive advantage and
complement it with service. Without the element of service in STMC competitive strategy it
can never deliver happiness to the mill owners.
DEFINING PRICING STRATEGY :
Pricing should take into account the following factors into account:
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Penetration pricing strategy should be used by recalculation to reduce the prices. It will
enable to capture market share by entering the market with a low price relative to the
competition to attract buyers. The idea is that the business will be able to raise
awareness and get people to try the product. Even though penetration pricing may
initially create a loss for the company, the hope is that it will help to generate word-ofmouth and create awareness amid a crowded market category.
Economy pricing: STMC can opt for a no frill very basic low cost approach to marketing,
just the bare minimum to keep prices low and attract a specific segment of the market
that is very price sensitive.
Premium PricingPremium pricing strategy establishes a price higher than the competitors. STMC can
effectively use this strategy when there is something unique about the component or
when the component is first to market and the business has a distinct competitive
advantage. Premium pricing can be a good strategy for companies entering the market
with a new market and hoping to maximize revenue during the early stages of the
product life cycle.
Price Skimming
As STMC is well known for quality which is competitive, it can enter the market with a
price skimming strategy designed to gain maximum revenue advantage before other
competitors begin offering similar products or product alternatives.
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Flank Defence:
Here, the purpose is to protect weak sides or fronts. Flank defence consists of erecting/setting
outposts to protect weak fronts that are vulnerable to be attacked. Such protection attempts
serve as invasion base for counterattack, if needed. Introduction of low-price products or
(discrimination pricing of existing products), aggressive sales force who could pitch in the
STRATEGY MARKETING CASE STUDY
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benefits of having a high quality STMC spare part and generate sales, etc., makes sense for
STMC if it wants to improve.
II.
Mobile Defence:
Mobile defence also called shifting defence is much more than simply protecting the
territories. STMC would stretch or expand its domain (area) over new territories that can
serve as the future centres for offense as well as defence. STMC would deploy its resources
in such a way to avoid the future invasion and create an impression in mind of competitors
that STMC is capable to safeguard its territories.
Approaches to Mobile Defence:
Market Broadening: It involves shifting firms focus from the current product to
forthcoming new technology and concentrating more on research and development
activities. However, too much focus on the future at the expense of the present is not
advisable. Company must maintain its strengths today to fight in the future. It must
go for reasonable broadening.
In order to expand market share, STMC is considering to add new and diversified product lines
to make the product mix comprehensive and attractive. However, there must be adequate
demand for new product lines. Looking at the introduction of a new textile machine in the
market, STMC is looking at introducing components for those machines.
It calls upon expanding current product lines by adding new models, varieties or items with
attractive features and superior qualities (durability, reliability, usefulness, safety,
convenience, etc.) This strategy may attract more customers.
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Heavy advertising, aggressive sales force, effective sales promotion, and attractive publicity
efforts can help expanding market share faster relative to competitors. STMC can use few
intermediaries to make the product available or acceptable to those customers for whom
relationship plays a role in cracking the deal.
Market share can be expanded via better distribution system. Both direct and indirect
channels and overall physical distribution system must be modified so that customers can
avail the products with the least difficulties. Similarly, effective distribution system can bring
down overall selling costs which can further improve profitability. For STMC, having few
intermediaries could help to increase sales and raise market share.
Effective personal selling efforts could also have positive impact on sales volume, market
share, and profitability as well.
Applying Price-cut:
To attract price-sensitive customers, leader can practice price-cut strategy. In order to target
Rs 15 Lakhs from the existing product line and Rs 15 Lakhs from the spares of the new
machinery, the company should reduce their price on certain aspects so as to generate
volume in sales and thus benefit from economies of scale.
A leader must improve production efficiency to reduce overall costs. Due to improved
production efficiency, STMC can sell better-quality products even at low price.
Another way to gain a new audience and extend brand awareness is by collaborating with
the top influencers in your industry.
STMC can have their employees be their biggest champions and brand advocates.
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It is important to obtain new customers if we want our business to grow. But we should not
forget about the customers we already have.
STMC can employ few experienced resources which could help them have a better
youngster versus experienced resource ratio.
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