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Abstract
For most of it’s history, Wokas was the leading brand of Indian AC market, which was characterized
by the dominance of only two players in the organized market. The somewhat dramatic arrival of all
leading global brands changed the demographics of the industry. The survival of the brand Wokas is
under threat from all quarters. Newer offerings have flooded the market and Wokas’ credibility and
superiority is questioned. The motivation to buy Wokas is presently low and not being helped by the
fact that its offered features don’t match up to competition. Dealers are underselling the brand and
service centres are apathetic to customer complaints. The increased affordability of AC’s
necessitates targeting more customer segments due to the emergence of the middle class. A failed
advertising campaign in the recent past has worsened the situation. The recent attempts at
improving the situation, like introducing AMC’s etc., have not resulted in a revival of the brand. Thus,
the problem is identified as one of brand repositioning, where we are trying to modify the
company’s strategy to focus on the brand’s competitiveness.
Prior to repositioning the brand, a comprehensive situational analysis has been carried out detailing
strengths, weaknesses, opportunities and threats (SWOT). The exercise of repositioning the brand is
carried out in two phases. The actions to be implemented in each phase are reasoned out based on
the priority of the goals they help to fulfil and the effectiveness in attaining those goals given the
constraints. We are aiming to infuse the brand with a new spirit through innovative technologies and
customer care initiatives. Our proposed two‐phase action plan covers various aspects of the
company’s operations including production levels, advertising focus, R&D priorities and customer
service strategies.
Detailed Report
Key Issues:
Brand repositioning, perfectly competitive market, globalisation, technology development, new
market segments.
Situation Analysis:
In the transition from a purely national industry to global industry, the erstwhile leader in AC
market‐ ‘Wokas’ finds itself in the midst of a situation where in the survival of it’s brand is at stake.
Extrinsic and intrinsic factors governing the current situation are:
Strengths Weaknesses
• Good knowledge of Indian consumer and • Negative brand image in the eyes of
the AC market customers specially resellers
• Expertise in local and international • Developed technologies not in sync with
industrial markets market demand
• Technically competent as all other • Abysmal levels of customer service
brands • Manufacturing units affected by
• Backed by the most respected business unfavourable government legislations
group of India • Incompetent PR department and
media’s cold shoulder
Opportunities Threats
• Unprecedented growth in AC industry • Increasingly competitive market
• Excise duty exemptions in certain areas • Price war
• Future demand for CFC free ACs • Cheap Chinese imports
Analysis of brand Wokas according to McKinsey Brand Diamond
(Copeland):
• Nostalgia • Respect
• Patriotic fervour • Faith
• Low cost • Prestigious overseas projects
• World class technology • Industrial expertise
Problems, plausible solutions, their critical evaluation and our
recommendations:
In the following tables, we have stated various possible solutions and based on their critical
evaluation we have assigned them priority in which they are to be undertaken.
Pre Sales Pitch
Problems Plausible Solutions Critical Evaluation Priority
Many retailers, being Central database of all Affects immediate First
dissatisfied customers and priority sales and brand
customers, servicing for retailers image positively
discourage
prospective buyers.
Sales inquiries Routing of all inquiries Effective but will N/A
neglected through a nationwide toll consume time and
free number service by call money
centre
Setting up of priority Consumer will have First
dealers who stock all access to entire
variants product line but
needs widespread
advertisements
Profit margins of dealers Increased sales will First
should be proportional to offset apparent
targets achieved reduction of
company profits
After sales services
Problems Plausible Solutions Critical Evaluation Priority
Dismal record of Periodic surveys on quality Not effective when N/A
authorized service of service followed by damage has been
centres appropriate rewards and done
punishments
Setup a central database to Senior management First
track all maintenance must follow up data
performed at the service collected to ensure
centres (Rao, 2000). quality service
within a reasonable
timeframe
Advertising campaign Convert major First
promising redressal within weakness to
specified time failing which strength
service provided free of
charge–equip service
centres
Lacklustre response Sell AC’s at different prices A portion of price First
of authorized centres based on length of difference can be
to AMC warranty specified used to finance risk
transfer agreements
leading to
guaranteed profits a
part of which can be
transferred to
authorized centres
thereby increasing
popularity of AMC’s
among them
Increased warranty
will increase sales
immediately.
Focus Sectors
Problems Plausible Solutions Critical Evaluation Priority
Presence of vastly Choosing industrial focus Previously Second
divergent consumer areas based on the market unexplored market
segments(household, growth in the segment segments might
industrial) requiring (exhibit A) require huge
specialized products marketing and R&D
and marketing costs
strategies
Focusing on household Might exclude high First
markets where Wokas is return segments
relatively better off
New technologies
Problems Plausible Solutions Critical Evaluation Priority
Does not possess Increase spending on R&D Cheap but First
many in demand to develop new product impeccable
technologies lines standard of R&D
available in India
Unprepared for License the technology Very costly N/A
possible demand for
CFC‐compliance
Customer Finance Schemes
Problems Plausible Solutions Critical Evaluation Priority
Lack of attractive Implement zero‐percent Short loan period N/A
customer finance interest scheme and higher EMI as
schemes well as high default
rate
Implement floating financial Will appeal to both First
schemes where interest rate urban and semi‐
is dependent on loan urban consumers
duration. Longer duration and reduce default
will attract higher interests rate
but lower EMI with the
provision of a zero interest
payback period
Government Legislations
Problems Plausible Solutions Critical Evaluation Priority
Competitors have Set up manufacturing units Setup costs rise with First
manufacturing in the duty‐free areas time, but rise in
facilities at duty‐free demand will offset
locations while this
Wokas does not
Globalization
Problems Plausible Solutions Critical Evaluation Priority
Lack of major Start with a Global strategy Low cost engineering First
presence in the (Ghosal, 1989) and migrate in India, implies
lucrative to Trans‐national Wokas should focus
international on Global Strategy for
markets industrial market as
cooling solutions are
specialised and lack
generic geographical
similarity.
International strategy Second
Start with International is preferable for
strategy and migrate to household segments;
Trans‐national higher initial
investment, longer
gestation period and
no foothold in the
segment makes it
unattractive
In the household N/A
Joint ventures with local segment, it will open
players up new markets and
give access to new
technologies, but
diminished returns
makes it unattractive
Recom
mmended
d course of action
n:
Brand Repositioningg Based on th he critical evaaluation of the above parameters wee have come e up with
a plan of action to reeposition thee Wokas brand. We have e depicted th
he current an
nd aspired brrand
position below:
• Brand image
B e ‐ oldest player, outdated technology, low deependabilityy
• Very low bra
V and visibilityy
Currrent • Technically c
T competent, cheapest p product
Inteerim ?
• Brand image
B e ‐ contemp porary , tech h savvy, high
h credibilityy, Indianness
• Very high br
V rand visibilitty globally
Aspired • In
nnovative, p
presence accross consumer segment
Accordinng to a McKinsey study, ssecuring the customer’s “permission” before reppositioning anny brand
is necesssary; here, “permission” amounts to a reasonable and logical extension oof the brand’’s
current image in thee customer’s eyes. Since our aspired image is so ffar removed from the current
we are forced
image, w d to choose an “interim positioning” strategy.
Accordin ng to Keller eet al., we havve to clearly define three
e aspects witth respect to
o any brand p
position:
a frame of referencee, differentiaating points aand points off parity. In our case, the frame of reference
is a userr‐friendly coo
oling solution n for Indian ssummers. Eaach phase of our proposeed two‐phase action
plan achhieves a distinct set of diffferentiatingg points and points of parrity.
Our proposed interim
m position iss:
• Brand imagee –oldest plaayer evolvingg with time, ssignificantly raised depen
ndability
• Improved brrand visibilityy in national media
• Improved teechnology deeliverables, h high growth iin SOHO
ACTION PLAN
PHASE 1:
1) Top brass of marketing takes dealer network into confidence by informing them about new
company policies, implied expectations and incentives (as given in table)
2) Impart refresher training to service centre personnel
3) Set up a new customer care initiative which promises redressal of customer grievances
within a specific time‐frame, failing which all charges will be waived.
4) Hire and train a call centre to handle customer grievances by enabling coordination with the
relevant service centre and maintaining a central database
5) R&D develops technical specifications and production methods for new SOHO product line;
also increases production process capability to provide industrial cooling solutions
6) Maintain minimal production level while upgrading production facility to produce new line.
7) Offer discounts and various promotions to clear present stock from retail inventory.
8) Develop advertising campaign highlighting the support of the parent brand in the new
customer care initiatives (TV ads) and other discounts and promotions (print media). Major
thrust should be on the credibility of the personality featuring in the campaign.
9) Start industrial advertising (trade fairs, magazines, yellow pages, journals etc) required to
enter earmarked commercial sectors.
10) Buy land and set up a manufacturing facility in tax exempt zones.
11) Set up priority dealers in urban areas.
12) Start production of new products at minimal levels.
PHASE 2:
1) Advertise the new product line, highlighting the innovations in both technology (adaptive
cooling, debugging console, power budgeting etc.) and customer care, in a way which
appeals to the contemporary Indian. A possible tagline is: “The intelligent AC which cares”.
2) Production capacity for the new range is increased to meet demands.
3) The new range has models priced for budget, mid‐range and premium users, a fact reflected
in the advertisements.
4) Implement the aforementioned floating financing scheme
5) Set targets for profitability and customer satisfaction in SOHO
6) Set targets for market share in earmarked local and global commercial sectors
7) R&D priorities shift to developing specific commercial solutions and CFC‐compliances
8) Implement global strategy for entry into international commercial sectors
9) Ensure continued compliance with the high service standards
Exhibits:
(A)Market growth rate
30
25
20
15
10
(B) Simulation of floating financial scheme.
(C) Simulation of Extended Warranty scheme involving hedging.
(D)Price Advantage of Wokas
8000
7000
6000
5000
4000
Window AC
3000
High Wall Split
2000
1000
Bibliography
Copeland, J. T. Successful Brand repositioning: Aspirational vs Achievable Strategies. McKinsey
Marketing Solutions.
Ghosal, C. B. (1989). Managing across Borders: the transnational solution. Harvard: Harvard Business
School Press.
Kevin Keller, B. S. (2002). Three Questions You Need to ask about your brand. Harvard Business
School.
Rao, S. S. (2000). Enterprise resource planning: business needs and technologies. MCB UP Ltd.