MK_LMC
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Transcript of MK_LMC
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Problem identification:
The performance of Ligthwel Match Company in relation to the total match industry
had not been very satisfactory for the last two years. Sales have declined and
seasonal fluctuations which were a regular phenomenon for the match industry
have become more severe than before. Though LMC has a great reputation in India,
its market share is continuously decreasing. Due to the excise rebate and other
incentives, the small scale sector has been steadily gaining the market share of
match industry. Black bird matches made by a small Haryana based firm had
become phenomenally popular in some large urban markets. The brand awareness
of LMC is very high in consumers as well as in retailers, but the retailers were
actively pushing the lower price brands .The small manufacturers were gaining the
retailers loyalty by offering better margins, easier terms and flexible supply
patterns. Also a major portion of consumers were indifferent to the brand of match
box they got.
The high price perception of LW brands was a distinctly unfavorable factor in
existing market conditions.
Decision issues: Forecasting of sales, Inventory and stock planning, terms and
norms to the retailer, mode of supply patterns, and price of the product.
2)
Four Ace brand was the most well-known brand in market.
Chetak and snowax were also well known but Black bird is used by maximumnumber of people.
Price perception of various brands:
82% thought Black Bird is 7p, 18% thought it was at 8p 76% thought Four
Ace was at 8p and 21% thought it was at 7p.3% thought Four Ace was at 10p.
92% thought Snowax was at 10p , 8% thought it was at 8p.
10% thought chetak was at 9p, 60% thought it was at 8p, 30% thought it was
at 7p.
Percentage of respondents using Black Bird is 31 and Four aces is 20 ,
Chetak is 4, Snowax is 5 .
29% use LW brands. Black bird is the large one.
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More people are buying low priced matches in the dry season but they are
shifting towards high quality matches in monsoon season.
67% thought that all brands are same w.r.t price, 33% thought some brands
were different from others in terms of price. 30% thought that some brands
were costlier than others. 13.2% thought Four Aces is the costliest brand, 8.4
% thought Snowax is the costlier brand, 3.9% named Chetak is the costlier
brand . Only 4.5 % of the respondents named other brands as costlier brands.
Only 9% thought some brands are cheaper,
6.39% thought that Black Bird was relatively in expensive brand.
Quality:
67% thought that there were no differences in the quality of matches.
Of the other 33% majority thought Four Ace and Snowax are the high quality
brands.
Number of Match Sticks:
80% thought that all brands have same number of match sticks in them.
20% thought some have more sticks in them. They named Four aces and
Snowax.
75% indicated no brand preference.
25% indicated brand preference as Four ace, Black bird, Large ,Snowax and
Chetak.
Informal questioning of retailers showed LW brands were asked more in
monsoon season.
Consumers are brand aware but not brand conscious.
52% of retailers reported that Four Aces was the largest selling brand , 38%
was the largest selling brand. This is very less compared to their market
share before four years.
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Product mix:
Product: Matchsticks, more space, less revenue, bulky transport, 3 varieties
Price: higher than bb and other small scale due to excise concessions\
Production:
Place: North India, bit of east, no west no south
Brand awareness and its effects on usage:
Brand Awareness Usage Usage: Awareness ratioFour Aces 61 20 0.33Chetak 27 4 0.148Snowax 22 5 0.22
Black Bird (Large) 34 31 .91Black Bird (Small) 10 13 1.3
Table 1.1 Awareness and usage details
Analysis:
The usage to awareness ratio is very low for LMV products with highest being 0.33.
Such a low rate implies that even though the consumer is aware of the LMV brand,
the awareness is not being converted to usage. In contrast, the Black Bird brand has
a significant usage in spite of having a lower awareness. So LMC should realize that
higher awareness does not necessarily guarantee high sales.
Stocking patterns
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Fig. 1.1 Reported and Observed Stocking Pattern of Retailers
There is a discrepancy between reported stocking and actual stocking.
The retailer does not make it a point to match the 2
he keeps in stock more of brand which gives good margin
margins
Higher margin for bb in lower segment
Higher ordering freq of more for bb
Higher order size
trans behaviour
Retailer prefers providing bb
There is low customer involvement in selection of brand
Price not a huge criteria
Because the
Strengths:
Better quality
High sales in monsoon
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Perception that it has more sticks
Plan:
Enter new markets
Enter south, west,east
Improve position in north
How? By advertising
Packaging
discount
Focus on primary users h/w + smokers.. advertise on pan shop, grocery, marketplace, temples
Emphasize on quality, size
Convert from low involvement to high involvement
Easy to find, availability high
Link product to involving issue
Attractive packaging
retailers
Discount on purchase
Scratch card
Incentives to retailers
To encourage habitual buying behave, dominate shelf space
Avoid out of stock condition
Send sales person for checks
Encourage incremental n regular sales volume
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