Marketing

assignment
Case Study
(Cool Air india ltd)
Submitted to
Prof. Prakash
SUKHATME

Submitted by
Mandira pant
C-23
THE CASE
Cool Air India Ltd. Is a market leader in ceiling fans, they
have now realized that the sector is facing a stagnation.
There are air coolers and air conditioners which have
emerged as a threat to the fan category.

The prices of these products are ever reducing with the

advancement of the technology which is another going
negative for the fan category. Moreover, the customers do
not change the fan for years together.

The company has already considered the option of

diversification in to other product line such as Air
Purifiers, Air Coolers and Air Conditioners. But this will
require heavy investment and high-risk factor.

There is another option put up by a few members of the

Board to launch an entirely new range of fans and
reposition the product in the market. What according to
you will be the right decision? Give justification.
PURPOSE OF THE CASE

• TO SUGGEST CHANGES IN THE PRODUCT PORTFOLIO OF

COOL AIR INDIA LTD

• TO DECIDE BETWEEN DIVERSIFACTION INTO NEW PRODUCT

LINES OR TO BRING CHANGES IN THE EXISTING PRODUCT
AND REPOSITION IT .

• TO UNDERSTAND THE COMPETITORS , ANALYSE THEIR

BUSINESS MODELS AND MARKETING STRATEGY

• TO SUGGEST CHANGES IN THE DISTRIBUTION STRATEGY

GENERAL UNDERSTANDING
Before we make a decision for Cool Air, India Ltd. It’s important to
understand their current position in the market and the current
state of the sector. We will try to understand these aspects using
two models:

1) Product life cycle

2) Porters five forces model

The Production Life Cycle (PLC) of a product (in
this case ceiling fans), has four stages.

Introduction: In this stage the product is released in the market.

Heavy expenditure towards advertising is done and revenue grows
at a slow rate.

Growth: If the product is successful the product enters the growth

stage. The product will start building its market share and the
revenue and profits will start growing at an increasing rate.

Maturity: At this stage the company has reached its peak in terms
of profitability. The cost of production and expenditure on
advertising and other expenses are at the optimum level.

Decline: Due to external factors the company starts losing market

share and with that there is a reduction in profits too.

Let us analyse which stage Cool Air India’s Ceiling Fans operate in.
It is mentioned that Cool Air India has reached a ‘stagnation’ stage.
We can safely conclude that the product has reached the maturity
stage and is entering the decline phase as there are external forces
in play too. To further understand the external forces we will now
analyse the porter’s five forces model.
As per the Model we can make certain observations:

THREAT OF NEW ENTRANTS

Cool Air India is the Market Leader but this advantage is redundant
as the market has reached stagnation and is rather contracting due
to introduction of affordable Air Conditioners and Coolers.

THREAT OF SUBSTITUTES

This is the factor that is causing a major shift in the dynamics of

Cool Air India’s business. New competitors have introduced
affordable Air Conditioners and Coolers in the market (the prices
continue to fall due to improvement in technology) this will slowly
but surely render ceiling fans obsolete.

BARGAINING POWER OF BUYERS

Until recently the bargaining power of customers was a positive

note for Cool Air India. The buyer concentration would be healthy as
they are the market leaders but with the introduction of the
substitutes the sector share of ceiling fans reduces causing the
buyer concentration to further reduce. Thus, increasing bargaining
power of the customers.
BARGAINING POWER OF SUPPLIER

Cool Air India is the market leader. The bargaining power of the
suppliers would be relatively low as they would be getting maximum
business from Cool Air India Ltd. There’s a risk of the suppliers
shifting their business too as the sector share is reducing. This
would increase the bargaining power of the suppliers

ANALYSING SOLUTION 1
(DIVERSIFICATION INTO A NEW PRODUCT LINE)
Diversification is a corporate strategy to enter into a new products or product lines, new
services or new markets, involving substantially different skills, technology and
knowledge.

• Deciding on what products to choose for diversification –

The basic purpose of this is to provide the best usability to our

customer or our target market . Cool air india ltd is a market
leader of ceiling fans and have never adapted itself into selling
different line of products . Now it has two choices , rather
choose products which are similar / direct competition to the
ceiling fan I.E air coolers , air conditioners etc or choose a
diffrent product like air purifier which has an increasing
market demand

• Analysing the direct competitors

As the entire fan market is facing stagnation , the other

market leaders would also be facing a similar crunch . Any
new changes in the product portfolio or the marketing strategy
will give us an idea about our next step and will help us
choose a product line which stands out or is actually
favourable to our consumers .
 •Decide on the distribution strategy

Our audience may change after this gradual shift or entering into
more market segments so a proper distribution channel very
essential to know hoe can we reach our defined consumers. This
will cater our marketing plan accordingly .

ANALYSING SOLUTION 2
REPOSITIONING
The company can rebrand and release a set of fans to target
different market segment.

WHY REPOSITIONING LET’S SEE

India is a hot country and fans are a relief. It is a major utility item
in the country. The company is the market leader in ceiling fans. It
can utilise the brand value to its advantage and continue to
dominate this market.

• A majority of the population comes under low income category.

These groups are highly dependent on ceiling fans in the hot &
humid climate. Moreover, all income groups are bound to use to the
product. Therefore, the product will continue to have a demand in
the market for decades to come.

AIR PURIFIER FAN SMART FANS

• Air coolers and air conditioners are mostly used in selected few
months in majority of the country. Fans have yearlong utility in at
least half of the country.

• Air conditioners and coolers have enough players in the market

and choosing to enter this market puts them at risk as the company
is a newbie in this segment whereas it is a trusted brand and the
market leader in ceiling fans.

• The world is experiencing global warming. Places that did need

ceiling fans 15 years ago face the need for them now. As the
technology advances, it can be used to create a better product for
the customers.
The company can include the following innovations in
their product:
• Remote-control fans: remote control fans are not new in the
market but they are yet to gain popularity. The company should aim
to make these products more affordable as there is great potential
in this segment.

• Customisable fans: fans are an integral part of any room’s décor.

Instead of choosing from a selected set of designs, the company
should offer to make customisable fans according to the
requirements of the customer.

• Zero noise/ soundless fans: sound is a major factor in fans, the

company should aim to make and popularise a soundless fan.

• Solar powered fans: these are also not new in the market, but can
be made more popular and affordable.

• The company can also incorporate foldable blades to keep them

dirt-free when not in use. The fan can acquire the shape of a lamp or
flower when not in use.

• The company can also use dirt resistant material to cover the
blades of the fan. This can help to keep the fan clean In the long
term.

The company should invest in research and development and look

to make more innovative products. It can include the following:

• Smart fans with voice recognition: as the technology

advances, more and more smart products are being
launched. Smart fans can include wifi, voice recognition,
speakers, sensors etc

• Hybrids of fans and air coolers/ air purifiers: fans can

include water sprays or air purifiers to hybrids. The
hybrids will be more affordable than the original products
 FINAL SOLUTION WITH CONCLUSION

I would suggest Cool Air India ltd. to go with the option to launch
new range of fans and reposition the product in the market and
diversify it.

The fan market in India has always been growing steadily, but with
emerging trends and technology, the industry has registered a fast
growth pace

Factors which are propelling the growth of the fan market in India
are:

- Higher disposable incomes

- Integration with technology
- The paradigm shift to the organised sector
- Demand for premium and luxury designs because
architects, interior designers design interior spaces
and choose the designer items that go well with the
look and feel of the place
- Rising rural penetration with increased
electrification

- Increased availability of continuous power

Experts believe that the future for fan market looks promising; the
growth spree isn’t going anywhere soon. However, much of the
growth will now be through organised players now as consumers
move towards branded and more technologically efficient fans.

So if Cool Air India ltd will provide a technologically advanced ,

superior quality , and a better product to the market , they will
retain their market leader position in the market.