BOOK REVIEW

SUBMITTED BY : Akshay Mandhana (29002) Arindam Das (29005) Gautham N (29014) Jatin Jaswani (29016) Lokesh Arya (29023) Vaibhav Kumar (29055)

How to develop perception of quality in the mind of consumer ?

THE SPECIALIST EFFECT by positioning your company as doing nothing but making a certain product or providing a certain service, and that all your energies are focused upon doing that to the best of your company’s ability.

THE LEADERSHIP EFFECT by being the first company to offer a product or service, or by being the largest company to offer it, conveys the idea that the company is setting the standard and therefore must be the leader in product quality.

THE PRICE EFFECT the highest-priced product in the category is generally perceived to have the highest quality (Rolls-Royce or Rolex).

THE NAME EFFECT a powerful and evocative name for a product or service can help develop an image of high quality. Perhaps the most important aspect of quality is the name itself. It's especially important to use a specialist name rather than a generalist name.

Business model Fads 1960

• conglomeration

1970

• Diversification

1980

• Synergy

1990

• Convergence

Companies operating in

different businessesEg; GECompany acquiring a

counter cyclic business to balance out each other

Eg;Xerox

Companies could exploit similarities between products

Eg; coca-cola & Wine Co

It is a further development of Synergy, with companies merging with each other to gain

a leading edge.Eg;computing,communications& entertainment

ConvergenceConverse to convergence,

the computer industry has divided again and again resulting in personal computers, laptops, notebooks, super computers etc.,

In late 90’s diversification was dead and synergy & convergence looked pale. The Business world shifted in opposite direction.

Focus on core values of businessThe companies started to focus on their core

values of their business.

Volvo Sweden's largest company, has been paying down to its original role as manufacture of cars and trucks by getting by getting rid of a 26% stack on Hertz

Creating a deep hole in business is more important than creating a few inches of impression over

diverse industries.

Five key steps in Retail business

Narrow focus

Stock in depth

Buy cheap

Sell cheap

Dominate the category

A TALE OF TWO COLASPepsi Co driven by growth at all cost.Pepsi Co owned : Frito Lay Pizza Hut Taco Bell KFC Hot n Now Chevys California Pizza Kitchen D angelo Sandwitch Shop East side Mario’sIn all 24000 restaurant units made up the worlds largest restaurant system

Coca Cola focused only on its beverage heritage.

Sales of Pepsi - $ 28.5 Billion Coca Cola - $16.2 BillionIf we measure the value of these on the stock market basis , Pepsi Co - $ 44 Billion Coca Cola - $ 93 BillionPer Dollar Of Sales Coca Cola was worth 4 Times Pepsi Co.

Pepsi Vs Mc Donalds24000 restaurants 14000 restaurants$9.4 Billion sales $7.4 Billion Sales$400 million profit $1.1 Billion profit(4 %) (15%)Market Value – $10 Billion $31 Billion

PROBLEMS FOR PEPSIManagement Problem Beverage business

Frito Lay Restaurant Chains

Competing with Its customers For Pepsi , Dominos Pizza is a Customer and a

Competitor

Beverage ExpertSnack Food Expert

Fast Food Expert

CEO

STRONG BRAND NAME

WEAK BRAND NAME

NARROW

BROAD

NARROWING THE FOCUS

FOCUS

TOYOTAMcDONALDSROLEXAMWAY

Sacrifice is the essence of corporate strategy which defines one’s position.

In politics a leader vigorously campaign to a set of people while publicly denouncing the other set of people.

Two kinds of consumers

One who wants to buy what others

do

One who wants to buy different than

others

CONSUMER FOCUS

Specialist

Generalist

Est

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as

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men

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Loss o

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Special segments must be treated with focus by providing special benefits, otherwise they might feel dejected and consequently might give up the brand.

Strong narrow focus is better than weak broad focus.

CONSUMER FOCUS (Contd.)

Competitive market

Advantage

Distribution

channel

Core competency

During the time of failure a company should try and figure out what is working for it and focus that.

Narrow focus in a large market is better than broad focus in a small market.

Focus is not a trap, but a goal to achieve. Amway focuses on distribution through agents. Hospitals are also good examples of focusing on specified

treatment. B-schools also concentrate on specialization.

One foot

Another Foot

OLD CAMP NEW CAMP

One foot

Another

Foot

OLD CAMP NEW CAMP

WAYS TO COPE WITH CHANGE

One foot

Another

Foot

One foot

Another Foot

One foot Anothe

r Foot

OLD CAMP NEW CAMP

OLD CAMP NEW CAMP

FOCUS • Be in your product specialization• Act Early• Develop a totally new product• New product with new name • Move boldly• Avoid fiddling with brand image

Enemies in a marketplace are required for creation of position.

Try to innovate and improve the proposition for your existing segments.

At times of merging companies one should not lose focus.

FEW MARKETING MANTRAS

THANK YOU