MARKETING-1

Case: Lightwel Match Company

PGP1 Section B Group 07 Date of Submission: 17 August 2012

1.) Market position is slipping because of increased competition and Government support to small scale and cottage industries and due to a. Decline in sales b. Cheaper alternatives available in market c. Seasonal fluctuations d. Retailers promoting and pushing other brands like blackbird due to their own interests. Decision issues before Lightwel executives at this stage are: a. To lower prices of existing products b. Introducing a new lower quality fighting brand c. To capitalize on established brand image and increase sales 2.) Main features of matches market are: Brand and price awareness: Users housewives, smokers etc. are brand aware, but more price sensitive Price awareness regarding different brands is less, people are speculative about price as per their perception (2/3rd of people surveyed felt brands are similar with respect to price) Four aces is most popular brand after blackbird Quality and Economic perception: Quality awareness only 2/3rd of people feel there is no difference in quality despite differences in prices Seasonal fluctuations happen in market ( during monsoon season sales of high quality matches increases by 30-40% while for lower quality matches it decreases to as low as 25% of their dry season sales levels) Four aces and snowax considered as superior quality by consumers aware about quality Low price brand is preferred, Brand loyalty is absent (3/4th of people surveyed said they had no brand preference) Retail sales and stocking patterns: Retailers are inconsequential about high margins they prefer selling other brands with less margins Retailers prefer brands which require their less investment in terms of credit, stock, shelf space, and have more goodwill like adjustment for damaged stocks Four aces is largest selling brand followed by black bird Most retailers claim to have high stocks of four aces but actual stocking is low (This is due to the hangover effect of the perceived brand image of Lightwel brands). Buyers mostly dont have any particular choice or preference, about 70% of buyers simply took matches given by shopkeeper. Retailers play most important role in pushing sales of a particular brand to customers. The retailer's motivations were the margins they received, inventiry they had to carry and services they got from the company. 3.) Marketing options available to Lightwel are: a. Lower prices of current products b. Introducing a somewhat lower quality fighting brand c. Exploring new markets d. Promotion to convert strong brand image to sales Recommended options:

Exploring new markets: core competency is to manufacture quality matches performing good in humid conditions, so they should target coastal markets in southern India and north east, since these are the markets that they haven't tapped into yet. Lowering prices of existing products by reducing margins as shopkeepers are inconsequential to margin. Developing good rapport with retailers by giving them flexibility in terms of credit, stock and shelf space providing them adjustments towards damages would be a better way of handling this, as the retailers were immensely important in making brand choice decisions in a majority of cases. Promotions like distributing free samples to shopkeepers for cigarette and beeri lighting, social messages based ad campaign, other feasible options.