MARKETING MANAGEMENT II

CASE STUDY ANALYSIS

PRESENTED BY:

ANSH SHAH (C006)

SIDDHARTH SINGH (C016)
ABHEET DEVASTHALE (C026)
ROHIT KUKREJA (C036)
AKSHITA TYAGI (C046)
AVANYA TIWARI (C056)
 WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE DIRECT-TO- CONSUMER MODEL?

Advantages: 
 Better connect with Customers: Manufacturers who sell their products through merchants have little control on their brand's reputation. Selling
directly to customers eliminates this problem while also giving you complete control over your brand's messaging and customer service. This is an
opportunity to take a proactive, personal approach to customer service and build a strong relationship with your customers.
 Easy and direct access to Customer Data: One of the most significant benefits of direct to consumer model for brands is complete access to business
data. This gives you an opportunity to learn about your customers' behavior- the source that brought them to your brand, the store they visited or
products they expressed interest in and much more. All of these put you in control of your business, allowing you to act on the incredibly important
insights provided by your data and enhance your store accordingly.
 Cost saving: By eliminating any third parties, D2C businesses can save money that would otherwise go to wholesalers and distributors. The additional
funds can be used to improve your client experience and boost your marketing efforts, allowing you to reach and interact with a larger portion of your
consumer base.
 Higher reach: The D2C business model is extremely digital, allowing businesses to access clients all over the world while gradually reducing
geographical limits as the company grows and expands its operating capabilities.
 Better Control : D2C brands have complete control over all aspects of branding, imaging, messaging, and values. They can generate high-quality
content and communicate with their audience across several channels without worrying about a third-party seller mismanaging their image. D2C
brands may use this to communicate, relate, and empathize with their target audience, resulting in deeper levels of engagement and connection that
keep customers coming back for more.
Disadvantages:
 Increased Competition: In the recent decade, the D2C market has shifted dramatically, with an increasing number of businesses
utilizing the technique to fight for the same customers. Previously, there were only a few startups offering glasses, makeup, and a
few consumer packaged goods. Now companies like Comcast, Verizon, and Amazon are entering the market.
 Privacy concerns: Going direct to consumer provides firms complete control over their operations, but it also increases their
liability for information exchanged with third parties (e.g. shipping, sensitive customer and financial data).
 Complicated Internal Operations: Having comprehensive control over the entire business process has obvious advantages, but
it complicates day-to-day operations. You'll be handling a lot more areas of your business (for example, orders, shipments,
transportation, payments, refunds, and customer service), which will increase not only your obligations but also your
vulnerabilities
 WHAT ARE THE FINANCIAL REALITIES OF DIRECT-TO-CONSUMER VENTURES?
No Middlemen = More Profits
With the elimination of middle men in forms
of distributors, retailers, the companies can
price save their costs and have a resulting
increase in profit margins. D2C brands sell
their product through their website which help
in this manner. Companies using this model
resort to the use of Social Media platforms
such as Facebook, Instagram for effective
promotion of their products. For example,
Glossier, a chemical free cosmetic brand has
adopted a D2C model and has leveraged the
use of social media through Instagram which
has 2 million followers and this has resulted
in the benefit of marketing its product to a
vast audience 
 Affordable pricing options
This model provides companies the
opportunity to price their products at a more
effective pricing tag than the companies
going through the traditional approach. For
example, companies in the audio industry
going through the traditional approach
could markup their products by 5 to 10
times which actually might cost them about
100$. Whereas companies going through
the D2C approach have the liberty of
marking their same product to about 2 to 2.5
times thus resulting in affordable pricing in
the competitive market
Shipping Costs
While using the D2C approach results in
better profit margins, but reduction in terms
of costs concerning with Shipping and
delivery charges is an important
consideration. Distributors with their better
and wider network results in reduced costs
as compared to the D2C model.
Additionally inhouse shipping also results
in delay which may in the future results in
reduction of sales unless this aspect is
considerably worked upon and brought to
the appropriate efficiency levels
 SEARCHING FOR THE LEGITIMACY THRESHOLD IN NEW VENTURES: HOW DOES PASSION
(OR LACK OF IT) AFFECT THE TRAJECTORY OF A VENTURE? HOW SHOULD STODDARD
PURSUE HIS OWN CAREER GOALS?

 For a new venture and its founders, initial few years are the most challenging. These years define the trajectory and also serve as
a litmus test to check the resilience of its founders. People usually enter into a venture either to cash a passion they always
wanted to follow or to cash new innovations. Sometimes people for the sake of establishing a venture, falsely claim themselves
to be passionate about their venture. One cannot blame the founders for this claim, it is the age old dream of making it big, which
often makes people falsely believe that they are passionate.
 People who lack passion or are under the false impression of having passion, find it difficult to sustain the initial enthusiasm as
they move forward with their venture. They start seeing every challenge as an obstacle. Every obstacle gives a beating to their
initial rigor and they start distancing themselves from the venture. On the other hand, people who are actually passionate, make
their way through every challenge to make their way, to achieve their dream. No doubt they also feel demotivated at times, but
the inner urge to follow passion makes them stick to the path they imagined to tread all their lives .
Stoddard can pursue his career goals in the following ways :
 By asking himself what he actually wants to do. For somebody who has nurtured 2 businesses right from their inception, this
would be a very difficult decision. Case mentions that Stoddard is unable to choose among the two and also he is finding it
difficult to manage them at the same time. He should follow his wife’s advice and choose a business that will make him feel
happy in the long run. From the case one can infer that Stoddard was more inclined toward the Schiit business. If that makes him
feel happy, he should pursue it
 If it is not possible for Stoddard to make a choice, he should hire more reliable people and should offload his day to day
responsibilities of both the businesses. This would give him more time to relax and focus on areas that require more attention, for
both the companies.
 ASSUMING SCHIIT AUDIO CONTINUES SELLING THROUGH THE AMAZON MARKETPLACE, SHOULD IT MODIFY PRICING OR THE PRODUCT LINE-UP OFFERED VIA THIS CHANNEL? OR SHOULD THE COMPANY END
ITS PARTNERSHIP WITH AMAZON?
 

 Assuming Schiit continues its partnership with the Amazon, it should use the current analysis from the data of the existing sale of
products on the marketplace. Firstly, since Amazon is a discount marketplace, a small mark up with a discount on the products is
encouraged for more conversions.
 Secondly, since the lower segment of audio products are hotter on Amazon, Schiit should focus on R and D for products in this
price segment and launch new products in this range. The discount period can end once Schiit has a bigger name in the market
with a larger customer base. Initially, trust is required to create a credible name and brand in the audio market especially for high
end products.
 Since all their products are rated 4 and above on Amazon, this is essential in building trust and generating sales for all products
(Especially high-end audio devices) since consumers are very picky about sound quality (Especially the ones in their target
market).
 Talking about whether Schiit should continue their association with Amazon, we strongly believe it should. In spite of the lower
margins, higher return rates and inventory hassles, Schiit has a lot to gain from this association. What we get out of Amazon is a
larger customer base.
 As of now, we need more recognition in the market and our aim is to make Schiit known to as many people as we can. With time,
our growing userbase can help us get more revenue and liquidity of cash which can enable us to overcome our issues with
inventory management with time.
 As of now, even when our inventory is out and our products lose visibility on Amazon, we would still benefit from the exposure
we get when we have stock in our inventory as opposed to disassociating with Amazon. Although the vision was to provide
products starting from about 100$ and higher, we should focus on the lower range of the spectrum as of now and Amazon would
be the perfect channel for that.
 Since E-Commerce is growing at a faster rate than other channels, it is important to ride this wave and be on board with Amazon.
The maximum volume of our current sales is also through Amazon and we believe it is important for us to continue and foster our
relationship with Amazon.