CASE 1 : TRUST TOOTHPASTE
Study the Case entitled “Positioning ‘Trust’ Toothpaste” and give your specific recommendations regarding the action to be taken by the company. Your decision must be based on a careful analysis of the situation given in the case and your answer should be precise and up to the point.
Positioning Trust’ Toothpaste
In September 1990, Mr. Sarin, the Marketing Manager of Deepa Products (P) Limited was wondering what marketing and product positioning strategy the company should follow for launching their two new brands of toothpaste. Trust Night and Trust Regular in a market which was becoming highly competitive.
Deepa Products (P) Ltd. was one of the successful manufacturers of various types of packaging materials for both industrial and consumer products. Established in 1960, the company has shown substantial growth over the years. Much of the company’s growth was attributed to the high quality of its products and also the systematic manner in which its marketing decisions were made.
In 1990, keeping in view the growing market for consumer goods, the top management of the company decided to diversify into new consumer products areas. In the first instance the company thought of entering into the toothpaste market. Depending upon their success in the market, the company would decide their expansion plans into other areas of consumer goods sector.
The company chose to enter toothpaste market simply because the market for toothpaste was growing fast almost by 15 to 20% in India and it provided enough profit opportunities. The market was dominated only by a very few players. Further Mr. Sarin felt that there was scope for capturing a significant market share in the growing toothpaste market, since the company’s products had some unique features to meet the emerging new market segments.
- What marketing strategy should be designed by Mr. Sarin to be able to achieve the targeted 5% market share?
- How should Deepa Products (P) Ltd. position Trust Regular and Trust Night to induce customers to buy it? What should be the key benefits of their toothpastes?
- Should the company price its products economically, or should it aim for premium pricing?
CASE 2: THE CATERPILLAR TRACTOR COMPANY
Caterpillar Tractor Company (CTC) is a large manufacturing firm headquartered in Illinois, USA. Its familiar ‘CAT” logo and yellow paint are known throughout the world. Indeed in its business, CTC has an estimated 37% of world market. Its closest rival, Japan’s Komatsu has an estimated 15%. A multinational company CTC has manufacturing and dealer representatives throughout the world. The products, which the firm designs, manufactures and markets, can be classified into two basic segments:
Earth moving, construction and materials handling equipment-track type tractors, bulldozers, rippers, track and wheel type loaders, pipe layers, wheel dozers, compactors, wheel scrapers off highway trucks and tractors, motor graders, hydraulic excavators, long skidders, lift trucks and related parts and equipment.
Engines– for earth moving and construction machines on highways trucks, marine, petroleum, agricultural, industrial and electric power generation systems. Engines either, diesel or natural gas, have power ranges from 85 to 1600 horsepower or in generator set versions from 55 to 1200 kilowatts. Turbines range from 10 to 7,900 kilowatts.
CTC’s market success is based to a great extent on its four-point product strategy. First, advances technology is incorporated into machines so that users derive optimal productivity and efficiency. To maintain the flow of product application the organization commits hundreds of millions of dollars each year to research and development. A second product guideline is quality. Within the last ten years several billion dollars have been spent on plant and equipment to ensure reliability in the hostile environments the machines endure. The third aspect of product strategy is to offer a full line of products. This implies machines capable of performing on job sites as small as a residential plot or as large as the Alaskan product line offers over 100 different machines within nearly infinite option/modifications. The fourth and final principle of the product strategy is to design and build only machines that can be produced on an assembly line, to take advantage of manufacturing expertise and efficiency of Caterpillar plant and to provide significant economies of scale.
Questions to be answered
- How important is new product development to Caterpillar?
- What sources of new product ideas might a company like caterpillar use?
- Evaluate CAT as a brand name.
- Evaluate each of the four points of CTC’s strategy.
CASE 3: ABC HANDLOOMS Ltd.
ABC Handlooms Ltd. (ABC) was established in the year 1991 to manufacture and market handloom furnishings throughout the country. Over the years, it has developed a wide network of handloom units in and around Delhi. ABC manufactures a wide range of furnishings catering to the needs of different strata of society. The pattern of sales of the company during the last three years was as under:
Other states and Union territories
The market for furnishings was highly competitive. ABC had not only to face competition from well established houses but it had also to face competition from various state government corporations. Besides, the product had to face competition with the imported material, which was freely available. Prices of different types of furnishings differed widely. Private and cooperative channels marketed different brands. The Coops accounted for more than 60 per cent of material sold. Though there was no brand loyalty yet a large manufacturer in Western India was able to market similar products at a marginal premium in Rajasthan and Madhya Pradesh.
- How do you explain the present situation faced by the company?
- Was it a good idea to enter into a three-year contract with the Cooperative Society? Why?
- Is it possible to renew the contract with the Cooperative Society? If so, how? Suggest a detailed programme on a crash basis with the budget constraint of Rs. 50, 00, 000.
CASE 4: APEX ELECTRICAL COMPANY LTD.
Mr. Nathan, Sales Manager of Apex Electrical Co. Ltd. had just received a proposal from his Regional Manager at Bangalore for opening a sub-office in Madras and was considering what would be the best decision in the company’s short run as well as long run interest.
The company was in the business of manufacturing and marketing electric motors of a wide range of horse power that could be used as a prime mover in numerous applications. The company’s factory and head office were situated in Bombay and it had its branch offices at New Delhi, Calcutta and Bangalore, each headed by a Regional Manager.
The Regional Office at Bangalore was responsible for sales in Karnataka, Tamil Nadu and Kerala. The company also maintained a godown at Bangalore which was used as the stocking centre for feeding sales in the complete region. The company’s distribution network had grown over several years and as such there was no one rule by which the arrangements could be explained. In Karnataka, due to the proximity of the Regional Headquarters, the distribution, network was closely controlled by the Regional Office. Company had several dealers covering the State and they all purchased goods directly from the Regional Office. All the dealers got a fixed percentage of discounts. The ultimate prices to the consumers were fixed by the company. Each dealer covered a specific area which was generally one to several districts and the company discouraged one dealer interfering in other’s territory. However, in main cities of Bangalore and Mysore, there was more than one dealer who collectively covered the sales in the city. The company salesmen regularly contacted the dealers and the office maintained good marketing information.
- What decision would you take if you were in place of Mr. Nathan?
- Do you feel the proposal of a new sub-office is economically justified against the stated policy of the company? If yes, why? If no, then how could it be made justifiable?