Mid Term Examination: Marketing Strategy

IIM Kashipur
20 Marks

Please answer all questions

Time-2 hours

1. How do firms co-create value with consumers? (5 marks)

Ans:
We can define co-creation as a collaborative development of new value (solutions, products,
and services) together with the stakeholders (such as customers, suppliers etc.). Co-creation
is a form of innovation that is collaborative: ideas are shared and improved upon together.
Through co-creation and involving customers early, companies can improve success rate of
new product introduction. Co-creating value with customers means involving the consumer
fully in the process.

There are 4 ways in which companies co-create with their customers:

 Co-Designing
o In this process a small group of people submit their ideas for the larger group
to select from, to get implemented or developed. Ex: Digg news site
 Collaborating
o In this, the customers pitch in their ideas to contribute towards the new
product. Open Source Applications would be a good example, like the
Chromium project
 Submitting
o Here the customer submits entire design to the company for the company to
incorporate in their product, often compensated by money or some other
ways. Ex: Ducati submit your design challenge
 Tinkering
o This is where the customers can tinker/alter the existing commercially
available products, which may be incorporated in the future releases. Ex:
Mods in Counter Strike, which were later incorporated as official maps and
character maker into the game.
2. How do you decide if there exists a platform opportunity for a business? (5 marks)

Ans:
To decide whether there exists a platform opportunity for a business we need to see it
through 4 lenses:

Cross-side
2 distinct Unexploited One side on network
sides Long tails board effect
potential

 Lens 1: Two distinct sides

o If there are 2 distinct sides, namely those who are willing to supply and those
who are willing to consume that supply, there can exist a business
opportunity in this area. Ex: Amazon fulfilled the gap between sellers and
buyers online, Zomato filled the gap between the restaurants and the people
who want to order from them.
 Lens 2: Unexploited long tails
o This means to see for future expansion opportunities, like in the case of
Amazon, it expanded further into the self-selling business, or Zomato, which
started from the Metros and made its way to tier 2 and 3 cities.
 Lens 3: One side on board
o To have an opportunity at doing business, out of the 2 potential sides, on
needs to be ready to hop on board. This is essential to get the other side to
join at a later stage. Ex: For Zomato, restaurants need to join first, in order for
the buyer to be able to see what they can order, similarly, the customers
need to be there first in order for the restaurants to come and participate.
We need at least 1 side on board beforehand.
 Lens 4: Cross-side network effects potential
o There needs to be opportunity to expand and diversify, the scope to do so in
the future gives the company the chance to rope in the customer for more
than what they initially came in for. Ex: Zomato with their Gold offering, gave
customers incentive to use them in restaurants as well, giving them more
visibility, and in recent times they started grocery services as well, giving
them a new set of customers, or giving the existing customers more options
to stay within the platform.
3. Read the case ‘Amazon and Walmart on collision course’, and answer the following:

A successful online expansion of Walmart and a successful offline expansion of

Amazon appear imminent in their battle for omni channel supremacy. So far, the two
giants fought on different turfs and the rest of the retail industry had borne the blunt of
their aggressive market warfare. But now the two have their biggest fight on hand. While
the market seems to be now favoring Amazon, the advantage can change hand anytime.
As the chief strategist of Walmart what would say? (10 marks)

Ans:
As the battle for crossing their respective boundary into the area of other one seems
imminent, Walmart needs to stay razer focused on improving its services to avoid
encroachment of its territory, i.e. the offline place. Since Amazon is the king in the online
marketplace, leading the digital space from so long, what Walmart must try to do is to go for
an online presence, and at the same time try to optimize their supply chain to compete with
higher margins. Explained in depth below:

 Create a digital brick and mortar store: While it sounds counter intuitive but having
a connected store inside a brick and mortar space can be an instant draw for the
newer generation, who want to experience new technologies. Like what Amazon Go
store is doing, a store that is having arrays of cameras and sensors to allow you to
shop without ever interacting with anyone, or even standing in lines for checkout is
the perfect dream, especially since in the current times social distancing has caused
people to venture out lesser and lesser.

 Come up with a subscription/loyalty program: While customers nowadays do not

want to be bothered with yet another loyalty program, but when it comes to
Walmart, customers would want to give it a try. The reason being their costs and the
existing customer base ready to shop there. Giving loyal customers free shipping to
the comfort of their homes, or an extra percentage of discount can go a long way in
establishing customer loyalty and gain an advantage over Amazon.

 Collaborating with the other players to get more coverage: While Walmart need
not collaborate with other brands due to its sheer position in the market but giving
the customers choices in store while they shop can be a big advantage. Amazon
offers many services online that do not correspond to what they had initially started
with. This is what Walmart needs to do, probably have some new offerings in the
stores, like a fashion section that offers not only clothes, but salon offerings, or
beautician services. This can help keep the customers engaged in their stores for
longer.

 Search engine optimization and collaboration: Walmart can partner with Google’s
shopping arm to set up paid redirects towards Walmart website to promote their
online presence. This paid traffic will help Walmart establish their online presence
quicker and get insights into what the customers are searching for and where they
reached searching that. Getting not only reach, but also customer insights, which can
be immensely helpful into future expansion where they can give better
 recommendations to users even without tracking them, based on the metrics they
collect continuously and anonymously.

 Optimize the existing offline network: Since Walmart is present in many physical
locations, having a more optimized delivery network can help save huge on the costs
of transportation and stocking. Zip-code based segregation of areas; allocation of
routes based on the destination to optimize the transport can be a few ways it can
be optimized.

 Focus more on Walmart Labs: The above point acts as the focus of Walmart Labs,
but in addition to the supply chain and delivery, Walmart Labs also focuses on
optimizing the operational efficiency and offering customers a seamless experience
regardless of the channel they interact with Walmart from. This ensures that the
customer is hooked to the brand and comes back again and again for their
requirements. Most importantly like the way Walmart mobile app turned into
shopping assistant while in store, they need to have more such features that
augment the buying process of the customer, and enrich their experience.