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Marketing Strategy23-12-20131Confidential Rajnish RohatgiDevelopment of the Marketing Concept

23-12-20132U.S. 1750 1850India 1947 19801850 WWII1970 2000Only I Make This,Come get it. (Known unmeet needs)

I make this,I am coming to you (before my competitor does);I am better than X coz of a,b,c Confidential Rajnish RohatgiThe marketing concept was developed over time through two other important business orientations called the production and the sales orientation. They will be discussed in more detail on the following slides.2Consumer OrientationBeyond a marketing focus

How all organizations in a demand chain adapt to changing consumer lifestyles and behaviors bringing product design, logistics, manufacturing, and retailing together

Role of consumers in shaping many aspects of lifesociety, government, social programs, health cares, and other areas23-12-20133Confidential Rajnish RohatgiSocietal Marketing ConceptConsiders consumers long-run best interestGood corporate citizenship

23-12-20134Confidential Rajnish RohatgiThe societal marketing concept was developed from the marketing concept. Marketers and consumers are increasingly taking stock of what is good for themselves, their family, their country, and the planet. Marketing looks for opportunities to provide products and services to help consumers reach their goals while also making profitable decisions for their companies. The image in this slide of a Siemens ad suggests the company is committed to developing products that are safe for customers and the environment.This web link will take you to the Cause Marketing Planner assembled by promomagazine.com. It is rich with information about not-for-profit organizations for cause marketing campaigns. 4Most technology driven CompaniesTraditional Structures came up:Businesses which built on Pioneering productsSellers market Invention latent customer need Only I make it Cost+ mark-up pricing Product focused sales teamShotgun approach You can have any color, as long as its BlackMass manufacturing23-12-20135Confidential Rajnish Rohatgi5Traditional manufacturers StructureData StorageB 2 B

IT HardwareCo.Enterpriseseg Coca ColaR & DFactoryStorage SolutionsServersR & DFactoryDesktopsR & DFactoryServers SalesDesktop salesPrintersR & DFactoryPrinter Sales23-12-20136Confidential Rajnish RohatgiCompany X - StructureXHolistic View of DiabetesPatient ??INSULINDELIVERYDIABETESR & DFactoryDHC SalesDiagnostic SystemsR & DFactoryDS SalesBio SciencesR & DFactoryBS SalesOtherPriorities TB / HIVSelf Image: Not Insulin Delivery, but Insulin SyringeExperts in precision plastic moulding and needlesPens23-12-20137DiagnosticLab testing toHome testingNew Treatments Stem Cell for PancreasLife ScanConfidential Rajnish RohatgiLimitationsHighly efficient production and operation capability ButCreates a narrow self image / definition of Core Competencies, basis technology and not customerPoor flexibility to see & react to threats that are discontinuousTechnology based Profit centers miss out on System-sell to customersStrong Inertia against changeStrong exit barriers to create obsolescence physical assets, mental.Large GP pool Launch with skimming pricing strategy, but dont drop prices at inflection point, if top tier growth is sufficient to meet internal growth and profit expectationsRisk of cannibalising own premium brand prevents own lower priced brands23-12-20138Confidential Rajnish Rohatgi8Disruption by New technologyGestetner: Cyclostyling / Stencil vs producing paper copiesDid not see new technology from Cannon, XeroxHMV / Grundig: phonographs / Vinyl vs Music storage and playbackCassettes (Philips)IBM : mainframe rather than computingKodak: Silver halide, rather than Saving imagesLandline phone manufacturersChange usually brought by new players (outside industry)Paper copying: Cannon, XeroxMusic: Philips (Cassettes)Sony: Pioneered music from public Private - WalkmanPublic, Institutional, shared personal computing: AppleSony digital cameras

23-12-20139Confidential Rajnish Rohatgi9Disruption Not only by Technology

1980s: Premium IVCs-$ 0.62005: Safety IVCs90s:Local IVCs-$ 0.2Winged needle sets - $ 0.0585% of venipuncture15% of venipunctureHuge price gap20 % of venipuncture65% of venipuncturePremium brands pioneer new category: High price to recover R&D, investment in market creation.Low Cost players accelerate diffusion of technology towards Middle Bottom of pyramidPioneer stays at the Premium end40 MM Units: STILL - 15% of venipuncture23-12-201310Confidential Rajnish RohatgiDisruption by New technologyThere are those manage the change wellIntelGilletteAnalog to Digital Audio CDs by PhilipsSony: personal analog walkman to mp4 ??Others Jolted by an upstart a Nirma moment but then embraced change and came out on topAuto industry Combustion engines to Electric cars

23-12-201311Confidential Rajnish Rohatgi11

Nirma a Harvard Case study

SURF

Only 15% penetration, over 50 yr, till 1980Advertising created large aspirations for bucket wash Huge pent up demandScaled up within Gujarat, Low cost model (no electricity, no excise duty) 50K TonnesNirma: 1970sLaunched a detergent 70% Soda;Started: At home, Manual mixing, sealing with Candle, hawked in town on cycle1984: Advent of National / Colour TV; Full Truck loads, on Advance payment; Low SSG&A200K 300 K TonnesNot even Noticed by UnileverJust a Local brand Thats not OUR market, Its a Soda, Not detergent300Surf: Decline / StagnateOperation STING: Stgy to Inhibit NIRMA GrowthLate 1980s: 500K tonnes 800 K TonnesWORLDS Single largest Consumer Product, Launched Blue Detergents powder and barsLaunched WHEEL / Lang; 10% premium, with Product plus;Separate Division; Re-engineered manufacturing / 3rd party / low cost SSG&A700100PRICE INDEXUNILEVER REACTION23-12-201312Confidential Rajnish RohatgiDisruption Not just by TechnologyOther examples ???Mobile phonesShampoos Chik

23-12-201313Confidential Rajnish RohatgiDevelopment of the Marketing Concept

23-12-201314U.S. 1750 1850India 1947 19801850 WWII1970 20001970 20001990 2000

2000+2010+

2010+ ?

Only I Make This,Come get it. (Known unmeet needs)I make this,I am coming to you (before my competitor does);I am better than X, coz a,b,c I Know you, what you want.I want to make it for youI Know you, I am like you, share same beliefsConfidential Rajnish RohatgiThe marketing concept was developed over time through two other important business orientations called the production and the sales orientation. They will be discussed in more detail on the following slides.14So What did IT hardware companies Do ?Data StorageB 2 B

DellEnterprisesR & DFactoryStorage SolutionsServersR & DFactoryDesktopsR & DFactoryServers SalesDesktop salesPrintersR & DFactoryPrinter SalesEnterprise GrpBANKINGTravelSOHO

ProfessionalsIndiv (Mob)Customer Domain ExpertsProduct Platform Experts23-12-201315Confidential Rajnish RohatgiWhat makes sense for X ?DIABETIC

DiagnosticLab testing to Home testing

New Treatments Stem Cell, XDiabetespatientDELIVERYMedication Delivery ExpertsR & DFactoryInsulin Syringe SalesDiagnostic SystemsR & DFactoryDS SalesBio SciencesR & DFactoryBS SalesCustomer Domain ExpertsProduct Platform ExpertsDiabetes Expert Group (Sales and Marketing)Experts in all that is happening in the Diabetes space

OtherPriorities TB / HIVAny Chronic Self injection23-12-201316Confidential Rajnish RohatgiCustomer Centric MarketingBrand names different for different technology Platforms / BUsEg: BD Needle Stick Injury preventionMSS / PIVC - Ported: Venflon (Pro Safety)MSS / PIVC Straight: Insyte AutoguardPAS / Vaccutainer: EclipseConsumer world: SaffolaCanvas of the tent: Heart healthPoles of the tent: Oil, Salt, Multi grain attaProduct Benefit Orientation

23-12-201317Confidential Rajnish RohatgiOncoCyto Toxic DrugsHuge risk to Nurses/ staff/ Patient AttenantsUse Luer Lok SyringesCustomer Centric MarketingTo ManufacturerA Syringe with a LuerFixed NeedlePrevents pop-outCustomerLuer Lok Syringe: 30% more expensive than Luer SlipProduct Brochure

NICUPre-term babies, Dose accuracy is crucial.If Needle Pops-out in middle of a IV push ?Should you repeat dose?So - Use Luer Lok Syringes

23-12-201318Confidential Rajnish Rohatgi18Benefit LadderIdentify Product Attributes, Functional & Emotional BenefitsPortrays a hierarchy of benefits that explain why & what the customer buysWhat are the specific, measurable, characteristics or features of the product? What does the product actually do for the customer? What is the unique value of this product(s)?What are the dominant feelings produced by or associated with the possession of or use of the product(s)?

Emotional BenefitsFunctional BenefitsProduct AttributesHierarchy of BenefitsDefinition of Each Rung23-12-201319Confidential Rajnish RohatgiWe developed the Value proposition, the Positioning.But, even before that, How did we:Know that is should be syringe?Know the unmet needs of existing products I market?That company can meet those unmet needs?Why prioritise NICU and Onco segments?

2023-12-2013Luer Lok Example..Confidential Rajnish RohatgiChart1352505509301775

tonnageTonnage

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yearin mmyearin mmyearin mm19970.7919970.7919970.7919981.0719981.0719981.0719991.6019991.6019991.6020003.1120003.1120003.1120015.9320015.9320015.93200211.44200211.44200211.44200330.102003200330.10200451.682004200451.68200583.512005200583.512006149.4920062006149.492007232.8920072007232.89

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tonnageTonnage