Introduction – provide a detailed summary about Target; include the following De

Question

Introduction – provide a detailed summary about Target; include the following

Describe the department and the type of products it sale.

The places your client sells the product (i.e., online and in stores)

The type of promotion the client currently uses

What the marketing strategy will accomplish for the client

Analysis of the target market

Customers – summarize how consumer behavior is impacted if the 4 P’s are not strategically aligned with each other.

Buyer decision process – Discuss the impact this process has on a company and how it impacts the 4 P’s

Explanation / Answer

BAJAJ FANS

The Market scenario pre 2000

Summery of Target market

Electric Fans is a high market penetration product category and is very high in terms of purchase priority amongst durables. It is a matured product category with a stagnant growth rate during the period 1990-2002. The domestic market size of fans in India is around 20 Million units. The local/unorganised brands are quite appealing to a large section of the price-conscious Indian consumers, for their lower price points

Although Bajaj Fans decided to target nearly all the segments in the fans market, it was imperative to have a differentiation and concentrate on a set of customers in each segment, which will value the core benefit, which shall be offered by the Bajaj brand in each segment.
Existence of the product segments such as TPW and Freshair fans is largely necessitated by the desire to meet the customer needs in a price segment with a different product line i.e. a premium end customer can have a need for a ceiling fan as well as a TPW and Freshair fans. Therefore the Company decided to launch sub brands under the mother brand Bajaj to target each of the customer segments, segmented on the basis of price and launched a range of ceiling, TPW and exhaust fans under those sub brands for premium, economy and sub-economy segments.
The role of the sub brands was to create a differentiation in the mind of the consumer regarding the brand image. Thus, the image of the Crown sub-brand was built to appeal to the Premium Fan customer belonging to SEC A1, A2 and B1; whereas the Bahar sub-brand was aimed at the lower end customer.

The channel used by Bajaj to market the fans was an Indirect Distribution Model thanks largely to the legacy of the Appliances business of Bajaj Electricals, which is still based on an Indirect Distribution model: Company , Distributor ,Retailer , Consumer. The fans market is segmented based on price, quality and aesthetics.

The Department and the Type of products it sale:

The Fan industry has the following Product based segmentation and shares:

Introduction of Sub Brands
As many as five new Sub brands were introduced :

Type of promotion the client currently uses:

Television as the main media
It was important to create high aided and unaided brand recall related to the fans category in the minds of the consumer. Fan as a product category has no major regional disparities in sale. Much of the sale of organised sector is in the metro, Class I and Class II markets. The cable and satellite penetration in these markets is very high. It was therefore strategised to shift from the traditional way of promoting fans in print media to TV advertising through major C&S channels like Star, Sony and Zee.
TVC’s of 10, 20 & 30 secs were developed based on a positioning “Bajaj Fans Sabse Tez” in Hindi and various regional languages such as Tamil, Kannada, Telegu, Malayalam & Bengali.
A CD Rom containing some recent TVCs is submitted along with the Paper.
The Paper Weight TVC won a Silver Abby for 2002 and has been widely acclaimed. The Door Closer press ad won a Silver Abby for 2002 and the Fish Bowl press ad won a Bronze at the International ADFEST at for Asia Pacific 2002.

Increased brand visibility at the market place
Initiated various Ground level activities by hiring promoters in key wholesale and large retail markets for fans. These promoters were dressed in branded T-shirts and caps and were asked to distribute leaflets of Bajaj fans to the potential customers and to detail the products at the Point of Sale.
When visiting the market, they would carry placards with the core communication message of Bajaj fans “Subse Tez”. This created a lot of excitement in the market and customers started asking for Bajaj fans.
Attractive POPs, Display schemes and Mystery Customer Contests were also run for the dealers for better display of products and packaging on the retail shelves by the retailers and for a Channel Push.

Publicity
An effective public relations campaign was also started to get favorable word of mouth publicity and press coverage. The results have been quite encouraging.

The marketing strategy:

1 Product Strategy:

TPW Fans
Launch a new range of TPW fans in the premium and economy segments.

Fresh air Fans
Launch a new range of Freshair fans in the economy and sub-economy segments.

Actions
To bring the products in line with the positioning strategy the Revolutions Per Minute (RPM) of all products was increased from 330RPM to around 400RPM to ensure higher Air Flow Velocity.
Launched the Bajaj Midea range of TPW fans in the premium segment.
Launched the Crown range of TPW fans in the Premium segment.
Launched decorative & non-decorative fans in the economy segment of ceiling fans - Grace, Grace Gold & Ultima.
Launched basic models with no special features in the sub economy segment - Bahar & Maxima

2. Pricing strategy:

The company follows a competitive pricing strategy in all major markets for all product segments. The strategy to enter the lower price segments was executed through launch of differentiated models aimed at the lower price segments.
Earlier all Economy and Premium ceiling fans were sold at around Rs.1000 and Rs.1200 respectively to the customer. Sub-Economy ceiling fans were introduced at a customer price of less than Rs.900.
The company introduced their Maxima ceiling fans at a customer price of Rs.900 and Bahar ceiling fans at a customer price of Rs.800. However, one of the organised sector competitors (say Competitor A) introduced a ceiling fan model at a customer price of Rs.700. Today the sub economy segment is being actively looked at by most major competitors.
The pricing innovation aimed at the Bottom of the Pyramid mass market has been a key element of the Bajaj Fans success story.

3 Packaging Strategy:
All the carton graphics were revamped in line with a new theme of “Elements of Nature”. The Fans business being an Air business, took up the image of moving clouds as a graphical motif for it’s packaging and a new set of Carton graphics were implemented for the entire product range. This theme was also incorporated in the Posters, POPs, the shop boards and all other communication elements to give Bajaj fans a unique and instantly recognisable in-shop identity.

4 Promotion Strategy
Television as the main media
It was important to create high aided and unaided brand recall related to the fans category in the minds of the consumer. Fan as a product category has no major regional disparities in sale. Much of the sale of organised sector is in the metro, Class I and Class II markets. The cable and satellite penetration in these markets is very high. It was therefore strategised to shift from the traditional way of promoting fans in print media to TV advertising through major C&S channels like Star, Sony and Zee.

5. Distribution Strategy:

Reach of potential through “Mission Excel Initiative”
The aim under this initiative was to understand the reach of Potential of the retailer’s of the company in the total market and ensure presence and high shop share at key retail outlets, which had a high share of the defined market.

Retail Performance Standard (RPS)
The Francis Kanoi database was used to know the width of distribution of leading players in the market.The leading player was benchmarked and a Retail Performance Standard was developed for all markets, which were based on the ratio of our presence in the number of retail counters vs. that of the benchmarked competitor.

This distribution strategy enabled the company to:

6 People Strategy
Another major step taken by the company was on the people front. The Organisation Structure was revamped and the company moved from a complex matrix structure to a SBU based organisation with shared services. The Fans SBU had a change in leadership with a younger, dynamic and more risk taking people oriented leader. Appropriate structures were formed for Sales, Marketing and Supply Chain functions alongwith a revamping of the Manufacturing and Design & development teams.

Analysis of the target market Customers

The consumer perception of Bajaj brand in the Electrical trade has been good overall. However, the brand’s presence in the fans category in the minds of the consumer was missing. As a result the brand was not included in the consideration set of the consumers for fans purchase. Bajaj Fans was earlier focusing only on the premium segment of ceiling fans and was a niche player in the market. To have a dominating position in the fans market based on the strengths that company had in terms of brand, infrastructure, management capabilities and understanding of the fans market, the company decided to target most of the segments in the fan market by following a micro-segmentation strategy. The Company believed that the Right Product at the Right Price Point for the Right Target Consumer was the Right approach to creating the Right Competitive Advantage.

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