MARKETING MANAGEMENT-II

Marketing Plan
V-Guard Stabilizer Brand

Table of Contents
1. Executive summary……- ……………………………………....1
2. Situational Analysis………………………………………………………………....2
a. Economic Analysis…- ….2
b. Analysis of various market of stabilizer…- …………………………….2
c. Analysis of competitor of V-Guard…- …………3
d. Analysis of manufacturing facility…- ……….3
e. SWOT analysis of v-Guard stabilizer……- …….4
3. Marketing Objective…- ……………………………………………...………4
a. Issues affecting the objective………………………………………...……...5
4. Target Markets……- …………………………………………………...….5
a. Segmentation and targeting………………………………………………….5
 b. Positioning………………………………………………………….….…….5
5. Marketing Strategies……- ……………………………5
6. Marketing Programs -.6
a. Product………………………………………………………..………….…...6
b. Price……………………………………………………....…………...……...6
c. Place……………………………………………………....…………...……...6
d. Promotion………………………………………………………………….….6
e. Service……………………………………………………….…………,,.…...6
7. Financial Plan……- ……………………....………7
8. Implementation control……- ………………....……….7
Executive summary
V-Guard started its journey in 1977 from Kerala by assembling stabilizers for refrigerator. It
was started by Mr. Kochuseph Chittilappilly and since then it has expanded its market from
stabilizers to variety of electrical and electronics products. V-guard has a very good brand
recognition in the south but has limited presence in the north and is now currently trying to
expand their stabilizer brand across the length and breadth of the country.
V-Guard currently have a large nationwide distribution network covering almost the entire
country. Majority of its sales are from the Southern part of the country, with Kerala
accounting for 39% of the sales in 2012, Tamil Nadu 14.5% and Karnataka 14.2%. Their
sales from other states is not enough and there is a huge scope of improvement in those states.
In the North, Haryana and Uttar Pradesh, inspite of having more distributors than Karnataka
and Kerala, only contribute to about 4.75% of the total sales. V-Guard is now focusing on a
new strategy to reach these areas by changing their marketing strategy.
In this marketing plan we have done a situational analysis of the internal and external market
of V-Guard with respect to its products and competitors and based upon our analysis we have
tried to project some marketing strategies that needs to be taken up by V-Guard to increase
their reach all over the country and fulfil their objective.
Situational Analysis:-
Economic Analysis: -
The company is doing extremely well in generating revenue and profit in the last few years
and have increased their sales from 97cr to 200 cr in only 4 years. Along with this it is
steadily increasing its revenue from other new products and thus reducing its dependency on
stabilizers, with increased revenue and almost saturated market share in south the company is
in a good position to expand its foothold in the north if it takes concrete directed steps
towards it.

Stabilizer Performance

200
166

122
97

0 25.7 36
20.5
2008 2009 2010 2011

Sales Revenue Relative Growth Rate

Analysis of various market of stabilizers: -

Few of the key applications of stabilizers are in AC/TV and refrigerator and the consumer
appliance sector has been growing at a rate of 25% for the last few years. Moreover the
domestic penetration rate of refrigerator in India is only about 9%. The AC market is also
valued at 5000 cr as of 2011 and with increasing global warming the demand will only go up
in the future which is estimated to grow around 30%. The TV has the highest market share
among all the consumer appliances with 30% market share and with the advent of new
innovations like LCD and LED the demand for TV has seen a huge jump.
The above-mentioned situation provides a huge potential to V-Guard to expand their
stabilizer business and that also especially in north as the demand of ac and refrigerator is
more in the northern and western part of the country due to extreme weather faced by this
part of the country along with that the power fluctuation that is more pronounced in states
like Uttar Pradesh where at times people faces power outages of as much as 10 hrs a day.
 Market Share V-Guard Pan India

South
9% North
6%
East
12%
West

72%

Analysis of competitor of V-Guard: -

The main concern for the stabilizer market is the competition it faces from the unorganized
sector. Out of 2100 cr market, 1200 cr market is unorganized and it is very difficult to
compete with unorganized sector providing below standard products at a very cheap rate. The
fact that the govt is drafting a GST bill it may take few years before it comes into effect and
this menace can be taken care of. Apart from that the company faces stiff competition from
region players like Capri, Blue bird, Premier, Everest etc. Most of them have some or other
features that’s stand out from V-guard which has helped them to hold onto their market like
after sales service or cheap price. This has restricted V-Guard from increasing its foothold in
northern part of the country and therefore it is essential to come up with some new marketing
strategies to target these markets.

Chart Title

Analysis of manufacturing facility: -

The company has a unique advantage of manufacturing over its competitors. The company
has outsourced its production of electronic goods to third parties called outsourced unit. The
company is responsible for providing all the technological know-how and other related inputs
to them and also make sure that the produced goods are of good quality. This has helped to
company to reduce their manufacturing cost by a large margin from its competitor. The cost
incurred to V-Guard for its stabilizer is around 49% including margin to third party vendors
whereas for competitors it went as high as 60%. Another advantage of outsourcing was the
company was not liable for any workers working the third parties for producing the products
thus it helped the company to get rid of any labour related trouble in manufacturing and also
any liability of workers working in its plant.

Strengths
 Good brand recognition in south India.  High dependence on south market
 Market leader in Stabilizer segment
 Strong dealer networks
 Low manufacturing cost as compared to
competitors
 Strong Human resource to lead the way
 Ability to innovate and a strong R&D
Weaknesses
 After sales services needs to be improved
 Less availability of variety in respect to
colour and shapes of the stabilizers are
not as good as competitor as per
consumer survey
 Prices are on higher side compared to
other market players.
 Low commission for dealers

Opportunities Threats
 Growing of refrigerators and AC  Presence of highly unorganized player in
market at 15% and 30%per year the market providing the products at a
respectively very cheap cost
 Low penetration of refrigerators in  Improvement in power distribution
India with only 9% penetration resulting in lesser power fluctuations
 Growing aspiration of middle class for  Technological advancement in appliances
electronic goods providing with built-in stabilizers
 Growth opportunities in Northern  Copper being the main contributor to the
market where it has relatively very low product has high price volatility
market share.
 Lack of consumer knowledge about the
effective usage of stabilizer
SWOT Analysis of V-guard stabilizers

Marketing Objectives: -
 Effective communication about the value proposition of the brand in the northern part
of the country to increase brand recognition and brand recall among consumers
 To make people aware of benefits other than voltage stabilization of using stabilizers
along with electronics products.
  To implement a push strategy of the product through retailers and distributors as the
customers generally rely on retailers for their advice for this kind of supporting
devices.
 To tie up with corporates or other business houses for marketing and selling the
products on a bulk scale

Issues affecting the objectives: -

 Proper budget allocation for all the marketing activities with specific focus on
activities that helps to create the brand recognition in the northern part of the country.
 Technological advancement in home appliances can dent the market of stabilizers as
some company has started providing with in-built stabilizers.
 As the number of distributors is less it is essential to ensure availability of product
through proper supply chain arrangement in the northern region.

Target Market
The main segments to be targeted for the stabilizer markets are as follows: -
1. The young urban generation people who are just settling down in their career and
slowly starting to purchase household appliances can be targeted by providing with
more product options and varieties.
2. The urban household people with good disposable income and who uses this kind of
products in their homes can be targeted through proper awareness of product and
explaining the usage benefit other than stabilizing power.
3. The rural people who has started using this appliance can be targeted through
highlighting the problem of power fluctuations and how usage of stabilizers can
improve the longevity of the electrical appliances.
Positioning: -
The stabilizers can be positioned as unique from others in the following ways:-
1. Marketing the product with different design and colours and showcasing it as more
than just an electronic product which can be used as an aesthetics as well.
2. Good after sales service to carter to customer demands.
3. Positioning the product at a cheaper price than its competitor in the northern market
by following a penetrative pricing strategy.
Marketing Strategies: -
The following marketing strategies needs to be followed to increase its market in North: -
1. Direct sales in the rural market where the sales representative can go to household and
explain the benefits of the product to the customer.
2. Promoting the products through word of mouth in the rural areas.
3. Marketing the products by tying up with large contractors and builders in large
commercial projects.
4. Building a value proposition of the brand through direct advertisements via different
medias in urban areas.
5. Provision of tie-up with large electronic retail store to improve its brand visibility.
6. Using social media to target the employed youth who are purchasing the electrical
appliances.
7. Marketing of the unique features of the product by highlighting different aspect of the
product like designs, colours, after sales service and leveraging its brand value.
Marketing Programs: -
Product
The following improvements would be added in the product to make it more acceptable to
customers: -
 Increase in varieties of shape to crater the needs of different segments.
 Addition of different colour ranges to support its position strategy of promoting
the item as an aesthetic.
Price
The following pricing strategy would be implemented for marketing the products in the
north: -
 The company would follow penetrative pricing strategy in the northern region to
counter the market leaders in the region.
 Increase in sales commission for retailers and distributors to push the product from
the seller end.
Place
The following channels would be use to promote the product
 Retailers
 Wholesalers
 Direct sales through tie up with commercial establishments
 Direct sales through sales agents in rural areas
Promotion
 Promotion budget method to be changed from “percentage of sales” method to
more aggressive marketing to capture market share in the northern region.
 Advertisement through mass media channels to create a value proposition of the
brand.
  Building a brand awareness among consumers through social media, liver
demonstration, trade shows.
 Running sales promotion during festival seasons and peak summer season to
increase sales.
Service
 Increased focused on after sales service as the main competitor in the northern
market has a better after sales service.
 Set up customer helpline for faster lodging of complaints and providing time-
based service.
 Increasing customer interaction using social media handles.
 Discussion forums for customers to take feedback and improve on it.

Financial Plan
Based on following assumption we present the financial plan for the year 2012-2013
Particulars 2010-11 2011-12 2012-13 2013-14(expected)

Sales 122 166 200 235

Material cost 42.7 58.1 70 82.25

Overheads 6.1 8.3 10 11.75

Advertising expenditure 3.66 4.98 6 11.75

Distributor Margin 7.32 9.96 12 14.1

Dealer Margin 14.64 19.92 24 37.6

Retailer Margin 9.76 13.28 16 18.8

Excise duty 12.2 16.6 20 23.5

PBT 25.62 34.86 42 35.25

Taxes 7.32 9.96 12 11.75

PAT 18.3 24.9 30 23.5

 Growth of sales has been assumed to be 35% up from 21% for the year 13-14 due
to increased expenditure on advertisement and commission to retailers.
 Advertising expenditure has been increased from 3 to 5% for greater market
outreach in the northern market
 Dealer margin has been increased to 16% from present 12% to counter its nearest
rival’s monopoly in distribution network and thus making room from aggressive
pushing of the product through the retailers.
 Due to higher spending on marketing and dealer expenses and also due to lower
prices the overall profit margin has decreased as the marketing strategy has been
 made with the motive of market penetration to capture new market because of
which the profit margin has reduced.
Implementation control
Sales metrics: - The effectiveness of the marketing plan would be decided by measuring
various sales metrics like sales growth rate and increase in market share and based upon the
result the next set of decisions will be taken.
Customer readiness to buy metrics: - This metrices will help us to find out the customer
awareness, preference and increase in purchase intention due to increased spending on
advertising expenditure and accordingly help us to decide the next course of action.
Distribution metrics: - This metrics will help us to find out the increase in shelf space of V-
Guard’s product, average replenishment of stock out of stock inventory and thus help to find
the effectiveness of increase in expenditure on commission of distribution agents.