Description
This presentation describes marketing myopia
Marketing Myopia: indian context
Presented By: Aliasgar Dhariwala – (106) Tapan Doshi – (108) Kaustubh Joshi – (118) Nayan Joshi – (119) Pooja Parekh – (137)
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K J Somaiya Institute of Management Studies and Research
Marketing Myopia – Indian Context
Table of Contents
Introduction .................................................................................................. 3 Sector - IT/ITES ............................................................................................. 5 Indian Outsourcing myopia........................................................................... Politics:.......................................................................................................... 7 The BJP and their myopic ideology ............................................................... Congress ideology ......................................................................................... Bringing out BJP’s myopic view ..................................................................... Sector – Automobiles: ................................................................................. 12 Hindustan Motors: Ambassador .................................................................... Maruti Udyog Limited: Gypsy ........................................................................ Bajaj Auto Company: Chetak’s Shortsightedness .......................................... Sector – Telecommunications: ................................................................... 20 Defining Growth, redefining business: Telecommunications v/s ICE ........... Conclusion .................................................................................................. 22
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K J Somaiya Institute of Management Studies and Research
Marketing Myopia – Indian Context Introduction:
One of the challenges frequently faced by the companies today is how to strike the balance between thinking big and charting a path to market and then growth that is appropriately focused and likely to succeed. The inability to see the future and design offerings that will be relevant in that future to come, is what's termed as Marketing Myopia. Marketing Myopia is a term that refers to the short sightedness of a marketer. It is basically a strategy where in the marketer wants to sell the product and services, without much focusing on the customer demands. The company must be a customer creating and a customer satisfying organization as a whole. There is a vast difference in Selling and Marketing. Selling focuses on the needs of the seller, while marketing concentrates on the needs of the buyer. Marketing Myopia is the failure to define an organization’s purpose in terms of its function from the consumers’ point of view. Marketing Myopia is the short sighted look of the managers in wrongly identifying the category and goals of the company, not looking at the whole industry of the product neglecting the fields of opportunities in their area of industry. It means that the vision of most organizations is too constricted by a narrow understanding of what business they are in. For example, Railroad business was railroad oriented instead of being transportation oriented. They were product oriented instead of being customer oriented. Growth is always threatened, slowed or stopped because of the failure of management. If companies are not customer oriented their new products might have been wrong and their sales method is useless. Sustained growth depends on how broadly you define your business—and how carefully you gauge your customers’ needs. Many business people make their decisions based on current circumstances. They do not think about what will likely occur in their industry in the future. Marketing myopia exhorted CEOs to re-examine their corporate vision; and redefine their 3
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markets in terms of wider perspectives. It has a successful impact because it is essentially practical and pragmatic. Management with Short vision often fails to recognize that in fact there is no such thing as growth industry. Organizations found that they had been missing opportunities which were plain to see once they adopted the wider or broader view. One reason that short sightedness is so common is that people feel that they cannot accurately predict the future. While this is a legitimate concern, it is also possible to use a whole range of business prediction techniques currently available to estimate future circumstances as best as possible. There is a greater scope of opportunities as the industry changes. It trains managers to look beyond their current business activities and think "outside the box". Marketers who value the long term objective of the organization and some time sacrificing the short term objectives can rise above the myopia. People who focus on the future predictions, trend analysis and customer life time value will be able to successfully erase the marketing myopia. For example, Pepsi says its direct competitor is Water and not Coca-Cola. This is the wider view talked about. Pepsi is a soft-drink which even quenches thirst, like water does, with an added flavor. One more example would be of Harrison Locks - the market leader in India. Harrison Locks specifically only advertises the new products what it launches in the locks market. This is a perfect example of marketing myopia. If they call themselves as India’s best Security solutions provider, the domain in which the company could play would be very wider be it locks, security doors, handles, doors, security alarms, digital alarms, and even to large extent security guards service. Thus, the organization should think of itself not as producing goods or services but as buying customers. The companies should take up tasks and do things that people would want to do business with.
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Marketing Myopia – Indian Context Sector - IT/ITES: Indian Outsourcing myopia:
The analysis for the decline is as under: In 2008, the IT and IT enabled services (ITES / BPO) industries were supposed to be the major drivers of India’s economic growth. According to Nasscom, the two industries employed 4 Million people combined, account for 7% of GDP, and 33% of foreign exchange inflow. But the reality is that wages are rising in India causing the reduction in cost advantage for off-shoring to Indian from at least 1:6 to 1:3, attrition being other factor. Jobs that are low value add and easily automatable should and will disappear over the next decade. People talk a lot about India moving up the value chain. Some of that has indeed happened. An industry that started gaining momentum with the Y2K porting projects has blossomed beautifully into one that offers a much more comprehensive spectrum of services. Yet, India, for all its glory, is still the world’s back-office. The IT / ITES industry is a “services” industry. In simple terms, the Indians don’t do the thinking. The customers do. India executes. As a result, India has not learnt to come up with technology products of its own. Barring a few exceptions, the huge amount of venture capital chasing India finds it difficult to be deployed. There is way too much money, way too few deals. Instead, tech-sector VCs are now diverting capital to retail, real estate, hotels, etc. The $30 Billion IT / ITES services industry, meanwhile, is slowly and surely, losing its competitive advantage. They are complacent. They will not take risks. They have “outsourced” thinking to their customers. As the 1:3 cost structure becomes 1:1.5, it will soon become inefficient to use Indian labor. For many Europeans, Eastern Europe has already become more compelling than India. The pure labor arbitrage equation will no longer balance. 5
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In a decade, what would happen to the newly minted affluent class created by the Indian IT boom is the major growing concern. Companies like Infosys and Wipro, assuming that they want to preserve their business momentum, will need to diversify their portfolios away from pure bodyshopping and process competencies to technology driven advantages. The obvious place for them to go is Software-As-A-Service (SAAS). Their current market caps and cash reserves are high, so an easy way for this transition would be via acquisitions. Wherever SaaS and manual BPO services overlap, they should cut the manual and replace with SaaS to the extent possible. To give you an accurate picture, none of this is happening quite yet. In fact, Infosys is hiring tens of thousands of new employees in India still. The mood is upbeat. The golden goose is still laying large, warm eggs, enough to feed the 4 Million and their families. Meanwhile, the workforce is getting comfortable in their cubicle chairs, just as the turkey gets comfortable before Thanksgiving. This is an example for myopia where the Indian IT industry has to do much to gain customers as well as employees satisfaction with the up gradation of technologies in momentum with the business outcomes.
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Marketing Myopia – Indian Context Politics: The BJP and their myopic ideology:
As a party, the BJP depends on a particular historical narrative to prop up its primary ideological precept: that India is, and always has been, a Hindu nation. This is why the BJP exerted itself while in power, from 1998 to 2004, to rewrite school textbooks, emphasizing Hindu victimhood and the rapaciousness of the Islamic invasions of India between the eleventh and sixteenth centuries. This is why the party vehemently objects to the Aryan invasion theory of Indian prehistory, which suggests that the basic tenets of Hinduism were formulated abroad and only subsequently carried by migrants into the Indian subcontinent. This is particularly evident from the case where Jaswant Singh was expelled from the party for the book Jinnah: India-Partition-Independence. It was not Singh’s faulting of Nehru in his book that got him expelled; that alone would have earned him accolades from his BJP colleagues. Rather, it was his declaration that Jinnah was actually a champion of Hindu-Muslim unity, forced to call for a separate Muslim state only because Nehru’s blueprint for an India with a strong center and weak states might fail to protect the Muslim minority from the massive Hindu majority. Singh’s argument, despite having been asserted earlier by other historians, seemed to rub the BJP’s guardians of ideology the wrong way; they would prefer to project Jinnah as a narrowly communal leader who yearned for his own Islamic state. By the party’s facile arithmetic, this voluntary subtraction of Pakistan’s Muslims automatically made the new Indian state a Hindu one -- never mind the silent elision of Christians, Jains, Buddhists, Sikhs, and Parsis, not to mention the Muslims who opted to remain in India, numbering nearly as many as those in the new Pakistan. The BJP seems like a party that lacks logic. It is a party in which you take a stand, and then you stick stubbornly to that stand, whatever the arguments against it. Jaswant Singh also suffered from a case of awful timing. Four years ago, when the BJP was feeling more secure about its ideology, Lal Krishna Advani, then the party’s president, visited Jinnah’s tomb in Pakistan and described its occupant as “secular” and an “ambassador of Hindu-Muslim unity.” For this, there was no expulsion; Advani was merely removed from the presidency, but he remained so
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close to the party’s power center that he was able to make himself the BJP’s candidate for prime minister during the general elections held last spring. Mistakenly or otherwise, the BJP chose to run a campaign of personality; Advani’s presence on the ticket often outweighed the local issues in individual parliamentary seats. Having derided the 76-year-old Prime Minister Manmohan Singh as a weak, aging leader, Advani, all of 82 years old, ran campaign posters of himself karate-chopping the air and promising to be a “strong leader” and provide “decisive government.” Flaunting his supposedly youthful decisiveness seems to have failed: the BJP won only 116 out of 545 seats, 22 fewer than it had squeezed from the 2004 elections. When Advani refused to accept responsibility for the defeat and resign as leader of the opposition, mutiny began to brew. And like nearly every Indian political party, the BJP is not internally democratic, so the disagreements resulting from the electoral misadventure began to seep out through the media like smoke under the door of a burning building. In a letter circulated within the party, then leaked to the press, Jaswant Singh questioned the coordination and accountability of the BJP’s senior leaders -- an implied jab at Advani. Around the same time, another BJP member, Arun Shourie, wrote a serialized account of his party’s degeneration in The Indian Express, a major newspaper. By the time Singh’s book was released, Advani and the BJP were tired of dissent. The fault line along which these various factions have emerged is a deep one, and it suggests a serious identity crisis within the BJP. The ideological wellspring -and, some observe cuttingly, the puppet master -- of the BJP is the Rashtriya Swayamsevak Sangh (RSS), India’s foremost right-wing Hindu organization, which has been accused of helping to demolish a mosque in Ayodhya and of complicity in the anti-Muslim Gujarat riots of 2002. But after two successive electoral defeats, pragmatists within the BJP as well as external analysts have perhaps begun to realize that too much Hindutva -- too much of a focus on temple-building, for instance, or too much spurning of the Muslim vote -- is hurting the BJP. The RSS, on the other hand, insists that the BJP is floundering because it has diluted its Hindutva to appear moderate. For a party that is barely 30 years old, this is a midlife crisis that has struck much too early. 8
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The BJP’s dilemma was best illustrated by what occurred in the northern Indian town of Pilibhit at the height of the election campaign. In late March, the BJP’s candidate from Pilibhit, Varun Gandhi, was charged with making viciously antiMuslim statements at a rally; a video that he insisted was a fabrication captured him promising to cut the throats and hands of Muslims as his audience raucously cheered. Gandhi, the estranged grandson of Indira Gandhi, was arrested, and the BJP, torn between the demands of decency and the potential electoral profits of defending Gandhi and rousing its base, chose the latter. “Gandhi was only talking in abstract terms,” the BJP leadership’s rationalization went. “Gandhi was merely protecting Hinduism.” In Pilibhit, the BJP’s strategy worked. Visiting the town a few days after Gandhi’s outburst, when riot-control vans still lurked on the side of a main road, the town’s Hindu residents repeatedly told me that, while they had never experienced any religious friction, they saw nothing wrong with Gandhi’s bellicose defense of his faith and said that they would certainly vote for him. The imam at Pilibhit’s biggest mosque was confused and wary. He thought Gandhi was saying these things “just to get elected,” adding, a little unsurely, “Well, that is the hope.” Gandhi won in Pilibhit by the highest-ever margin for a new member of parliament. But the BJP, which had hoped to transmit the Hindu-chauvinist sentiment whipped up in Pilibhit across the rest of the state of Uttar Pradesh, ended up performing miserably in areas it had once dominated. Relying on Hindutva thus yielded a lopsided payoff: it was attractive in the short term but a liability in the long run. The same model is now shaping the BJP on a national level. At the moment, because of the moral authority it exerts over the party, the RSS is the only power that can remove unpopular party leaders, repair rifts between feuding factions, and save the BJP from imploding. But in the long term, if India remains committed to secularism, the RSS’ imposition of extreme Hindutva on the BJP will only erode the party, turning it into a lumbering, inflexible, failure-prone outfit. The staunchest, most valuable BJP members may very well end up being the moderates who can reject the RSS’ constricted vision, rebuild the party, and rescue it from that dire fate.
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Marketing Myopia – Indian Context
Congress ideology: As a party has kept pace with the changing wants of the Indians. The two consecutive elections lost have made them change their strategy. The are now focusing on the mandate “Aam Admi Ke Badthe Kadam, Har Kadam Par Bharat Buland” which roughly translates to ‘The common man moves forward, And with his every step India prospers.’ The manifesto highlights all the achievements of the UPA Government over the last 5 years in power and identifies improving various policies to favour more rural & under-privileged sections of the Indian society. They have also brought in change through Rahul Gandhi as a young leader bringing the needed change. Unlike to BJP that was portraying Advani (81) as the young and zealous leader that India needed against Manmohan Singh (76) dint sell to the Indian public. The congress has focused on the needs of the people (customers) and has stirred the right ingredients for a growing India. Bringing out BJP’s myopic view: The expulsion of Jaswant Singh from the BJP points to the party falling prey to what's termed 'Marketing Myopia'. With Jaswant, one of the only symbols of urban sophistication in an otherwise rustic party, gone, the BJP has lost its last hope at connecting with a rapidly changing voter demographic in India. Liberalised urban India seeks sophistication in their lifestyles. A party saddled with symbols, real and contrived that seem like they are a throwback to yore, will find it increasingly difficult to connect with voters who want move forward and leave behind cultural hangovers of the past. Of course, the party bets it will connect with 'less sophisticated' masses who identify with what's rural and rustic. But even the 'less sophisticated' crave urban sophistication. And the mass media has presented to them on a platter, a lifestyle that they may not for the moment enjoy, but surely crave. After all, who amongst the citizenry looks to staying still? Staying stuck to relics of the past and the soon to be obsolete present? It’s the 'moving on' masses the BJP will miss if it holds on to what it calls ideology. The inability to see the future and design offerings that will be relevant in that future to come, is what's termed, Marketing Myopia. And not knowing that isn't 10
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ideology that matters, and that it’s about what the voter wants, is a learning that's imperative. It’s a learning of what businesses know keeps them alive and kicking. It isn’t about the product, it’s about the buyer. It isn’t about the party, it’s about the needs and wants of the voter.
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Marketing Myopia – Indian Context Sector – Automobile: Ambassador: Marketing Myopia:
Ambassador can be called as the first Indian car. Ambassador was born in 1958. The car owes its design and technology to a British car model - Morris Oxford which was built by Morris Motor Co at Oxford UK. Hindustan Motors launched the Indianite version of Morris Oxford as Ambassador in 1958. From 1958 to 1980's Ambassador ruled the Indian market. In fact there were only two cars in the Indian market - Premier Padmini and Ambassador. Then came the era of licensing where the unfriendly Indian economic policies ensured that no automobile manufacturers entered the Indian market. There was heavy investment required in upgrading and innovating new products as the consumers had already started adopting the western world. Soon in 1983, Maruti Udyog Ltd launched the Maruti 800. This saw the emergence of a new era in the Indian car market. Ambassador started losing its leadership position to Maruti. The family segment which is the largest segment in the car market embraced Maruti. Ambassador was reduced to a marginal player within no time. But Ambassador had some advantages over 800 which made it dearer to certain segments. It was the only Indian car with Diesel option. During those times, there was a significant difference in the prices between Diesel and Petrol. Second advantage of Ambassador over Maruti was that it was spacious and sturdy. These two factors enabled the brand to become popular among big families and more importantly among the Taxi and tour operators. Ambassador was perceived to be a sturdy car ideal for Indian roads which made a positive perception of being less expensive to maintain. These two were only perceptions. In fact, Ambassador was expensive to maintain and even though the car looked sturdy and well built, the car lacked the quality and refinement. Rattling sounds and rusting was common complaints. But consumers bought the car because of the significant economy of diesel cars which made consumers to compromise on other parameters.
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Another significant market for Ambassador was the Government. Over 16 % of the brand sales came from the Government. Ambassador was the first choice for most bureaucrats. Soon the officials also lost interest in the brand. With the emergence of new and better models from other auto-makers, there was a significant drop in the orders from the Government. The fall of Ambassador from a leadership position to a marginal player is a classic case of marketing myopia. For four decades, the brand has been taking its customers for granted. There are many reasons that can be attributed to this brand's failure. The fundamental issue was with the product and price. If we look at the product, Ambassador never changed with times. The brand made many cosmetic changes from 1958-2000 and three upgrades were made which were named as Mark II, Mark III and Mark IV. But there was no significant value addition between these upgrades. The look and the built quality remained the same. A major change happened when the brand introduced an 1800 Isuzu engine. The Ambassador with Isuzu engine again lifted the sales of the brand. But the euphoria was short lived. The apathy of Hindustan Motors (HM) to offer product changes in tune with the times made the brand stale. Second factor that failed Ambassador was the price. HM never bothered to rationalize the price of the brand. The price that they were offering was equal to the price of luxurious indigo sedan. The company at no point thought of passing on the reduced cost to the consumer. Had the company rationalized the price of Ambassador, the brand could have survived the competition. The other factor that added fuelled to failure of Ambassador came with the launch of Indica. Indica took away the taxi car market from Ambassador. Again the diesel loving individual consumers had a better affordable modern car as compared to the ageing Ambassador. Indian consumer is now spoilt with choices. The competition is immense and the quality of cars has also gone up. Consumers now have new set of purchase considerations like quality, brand, drivability, luxury, cost of maintenance etc 13
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In the value proposition domain, Ambassador is never in the radar of the consumers. The narrowing price difference between petrol and diesel also eroded the value in investing in an old dated Ambassador. Without investing in either brand or product, HM had sealed the fate of this brand. Ambassador should have learned from Maruti 800. The brand is still surviving because it made changes along with the changing consumer values. Also the brand rationalized its price in the light of emerging competition which made Maruti 800 relevant even in the current market. Ambassador had the potential to become an Iconic brand like Volkswagen Beetle. But the brand could have been relevant to Indian market as a basic family car.
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Marketing Myopia – Indian Context Sector – Automobile: Maruti Gypsy – Myopic Approach:
Gypsy was one of India's first sports utility vehicles. The vehicle distinguished itself by creating a breakaway category of SUV off roader from the existing jeep category which was dominated by Mahindra. The brand was considered as an aspiration by many young crowds in India. The brand was positioned on the basis of its ruggedness. The brand was promoted as a pure off roader. The positioning was reinforced by the success of the brand in rally and off-road events. Maruti also promoted such events to boost the brand as the ultimate off roader. The brand had the tagline of "There is a Gypsy in Everyone".
But the brand failed to capitalize on the first mover advantage although it is still considered to be one of the sportiest looking SUV in the Indian market. The brand is now confined to certain niche markets like Police and Army vehicle segments. Gypsy was the rebadged version of Suzuki Jimny. Although Jimny is still surviving, Gypsy is in the last stage of its product life cycle. The brand which pioneered the off roader category sadly is dying when the SUV category has started growing. The brand failed because of the apathy of the company in investing in the brand. The product had inherent problem that created negative word of mouth and the company didn't care to look at the negatives of the brand. Gypsy although considered as a tough vehicle lacked many important attributes valued by a customer. The driving quality and the mileage were unpleasant. The product was priced at a ridiculous premium which was not justified in terms of delivering value. The brand was priced that was comparable with an entry level sedan. The product although looked excellent outside was a mess inside. The vehicle lacked space and comfort especially for the rear seat. It had all the qualities for an off roader but failed to understand that Indian consumers use off roaders on roads (cities). The mileage was awful and that ensured that only those who fall head over heels over the looks only will buy this brand. Since MUL at that time was in the public sector, the brand was sold to Police and army. For the ordinary consumers, the brand did not make any sense. 15
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Gypsy also did not change itself in tune with the changing industry requirements. This is shortsightedness. The vehicle initially was severely underpowered for an off roader. The company enhanced the power from 975cc to 1300 cc only after 11 years. Gypsy King was launched sported to have the more powerful Esteem engine but was priced steeply. The last four years has shown that SUV category is growing very fast fuelled by the success of the likes of Mahindra Scorpio. Most of the global bigwigs in the SUV segment are now there in India. Had this brand changed its looks and feel in tune with the emerging category requirements, Gypsy could have been a major brand. But the brand’s fate is a classic example of Marketing Myopia.
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Marketing Myopia – Indian Context Sector – Automotive: Bajaj Chetak’s Shortsightedness:
BAJAJ CHETAK was a popular Indian made motor scooter produced by the Bajaj auto company. The Chetak was BAL's first scooter model under the Bajaj brand. Originally based on Italian Vespa, Chetak was the only choice for millions of Indian families as an affordable way of transport for decades. The Chetak was positioned as reliable and sturdy. The Chetak, a geared scooter, had come to occupy a near-iconic status. In early 70’s scooters dominated the Indian two-wheeler market. Most middle-class Indians preferred scooters because of their durability, low maintenance costs, and versatility. At that time, the motorcycles available in India were heavier and not as fuel efficient as scooters. They were also costlier. The brand was introduced in the era of licensing with virtually no competition. Bajaj Chetak gained huge brand equity. With reasonable price and the low maintenance cost made this product a huge hit among the middle class Indians. If reports are to be believed, Chetak was an unavoidable dowry in 1970's and 80's. It had a waiting period of more than 10 years. Decline in Bajaj Market In the late 1990s, the Indian two-wheeler market witnessed a shift in consumer preferences. The popularity of geared scooters began to wane while that of motorcycles soared. There were various reasons for the shift 1. India was undergoing a demographic change, with the proportion younger people in the population growing significantly. 2. The economy was growing, which increased the disposable incomes of the middle class. 3. Many newer models of motorcycles, with improved designs and modern technology had become available in the market. While these changes were taking place in the market, the features of scooters, especially those of the Bajaj Chetak, remained essentially unchanged. 17 of
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Scooters were BAL's main products, and when market preferences shifted to motorcycles, the company was faced with declining sales and revenues. It was during 1990-91 that the brand began the journey to the end. In January 2006, BAL announced that it had stopped production of the Chetak. Reasons for decline The primary reason is that the Brand forgot the customers. Another case of Marketing Myopia! The company failed to understand the changing perception of the customers towards scooters. Rather than looking at the customers, the company focused on influencing Government to block the opening up of economy. Bajaj never did anything with the product. For 40 years Chetak had the same look, same quality and style. During the mid nineties the company realized lately that the segment has shifted to motorcycles. Scooters were no longer the option. But did the company make a mistake in discarding the scooter segment? Looking at the way the share prices are going, the market thinks that Bajaj Auto made the right decision. But they made a mistake in leaving the scooter segment completely. Contrary to expectation, the scooter segment has not died. It has only changed. Chetak lost its identity somewhere during the nineties. It was only in 2004 that company made any change in Chetak. Bajaj never was serious about product development. The R&D spent for a long time was a miniscule 1%. The average cycle time for the new product development was 4-5 years compared to 2-3 years of other competitors. Even after the opening up of economy, the scooter segment did not witness much competition. The players like Vespa did not have much of success in this segment. Kinetic Honda managed to carve a niche with its gearless scooters. Another segment which was growing was the scooterette segment which was dominated by TVS scooty. Bajaj never seriously looked at customer perception about Chetak. The product had serious problems like starting trouble and riding comfort. There was nothing 18
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wrong with the Promotion. " Hamara Bajaj " and " No one can beat a Bajaj " were famous base lines. There was nothing wrong with distribution and the pricing was very reasonable. The major problem was in the Product. In fact what BAL could have done was re-launch the product with the following additional features: ? Electric start ? Riding comfort ? Greater mileage ? Better R&D i.e. redevelopment of the product according to current market needs
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Marketing Myopia – Indian Context Defining Growth, redefining business: Telecommunications v/s ICE
Experience shows that when a business has redefined its market, it has continued to grow as new targets are set. Perhaps the best example is the recent one, where categories such as telephones, television, wireless communication, cable television service providers, Internet, DTH and film producers have all converged into a single category known as ICE, which is a combination of information (and Internet), communication and entertainment categories.
Companies such as Reliance Telecommunications and Bharti Airtel are good examples of companies that have redefined their business strategies and long term goals with the changing need of the consumers. Bharti Airtel, India’s leading telecom service operator has been at the forefront of meeting its customers’ needs and wants. They have kept pace with the changing environment augmenting their products and launching new products. It operates in four major segments namely, Enterprise services Carriers, Telemedia services, Mobile services, and Enterprise services Corporate. The Enterprise services Carriers segment provides telecom services to large enterprise customers as well as to other telecom carriers and also provides long distance wholesale voice & data services to the telecom carriers and to the subsidiaries of Airtel. The Telemedia services segment provides DSL (digital subscriber line) and fixed-line services over 94 cities across India. The Mobile services segment provides mobile and fixed wireless services (FWP) using GSM (global system for mobile) technology along with value-added services. It has also started providing DTH services through its brand Dish TV. Bharti Airtel is a good example of a company that has broadened its business purview and has adapted quickly to the changing demands of its large consumer base. Reliance entered the communication business offering the WLL & CDMA services to customers. They then augmented their services and entered the land line market becoming competitors to established players such as
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Marketing Myopia – Indian Context MTNL. Their model involved having the landline service provided through a wireless network which reduced operating costs tremendously and gave them easy entry into the business. They have kept developing their products as per the changing need of the customers. Now they offer a plethora of services including GSM, Broadband and wireless broadband.
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Marketing Myopia – Indian Context Conclusion:
Marketing myopia is true for all companies who define their markets too narrowly, including companies in India, who have defined markets in the '60s and '70s on the basis of licensing production. In the brand management perspective, it’s suicidal not to continuously invest in a brand. Often heritage brands wait till it becomes dated. Once the brand becomes dated, it is virtually impossible to rejuvenate the brand. The task is to prevent the brand to become dated. For that the brand has to go to the consumer for ideas. Changes in product or promotions can sustain the brand even in the light of emerging competition. Brands like Lux, lifebuoy, Surf has been successful because of continuous investment in branding and product development.
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doc_740832404.pdf
This presentation describes marketing myopia
Marketing Myopia: indian context
Presented By: Aliasgar Dhariwala – (106) Tapan Doshi – (108) Kaustubh Joshi – (118) Nayan Joshi – (119) Pooja Parekh – (137)
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Table of Contents
Introduction .................................................................................................. 3 Sector - IT/ITES ............................................................................................. 5 Indian Outsourcing myopia........................................................................... Politics:.......................................................................................................... 7 The BJP and their myopic ideology ............................................................... Congress ideology ......................................................................................... Bringing out BJP’s myopic view ..................................................................... Sector – Automobiles: ................................................................................. 12 Hindustan Motors: Ambassador .................................................................... Maruti Udyog Limited: Gypsy ........................................................................ Bajaj Auto Company: Chetak’s Shortsightedness .......................................... Sector – Telecommunications: ................................................................... 20 Defining Growth, redefining business: Telecommunications v/s ICE ........... Conclusion .................................................................................................. 22
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Marketing Myopia – Indian Context Introduction:
One of the challenges frequently faced by the companies today is how to strike the balance between thinking big and charting a path to market and then growth that is appropriately focused and likely to succeed. The inability to see the future and design offerings that will be relevant in that future to come, is what's termed as Marketing Myopia. Marketing Myopia is a term that refers to the short sightedness of a marketer. It is basically a strategy where in the marketer wants to sell the product and services, without much focusing on the customer demands. The company must be a customer creating and a customer satisfying organization as a whole. There is a vast difference in Selling and Marketing. Selling focuses on the needs of the seller, while marketing concentrates on the needs of the buyer. Marketing Myopia is the failure to define an organization’s purpose in terms of its function from the consumers’ point of view. Marketing Myopia is the short sighted look of the managers in wrongly identifying the category and goals of the company, not looking at the whole industry of the product neglecting the fields of opportunities in their area of industry. It means that the vision of most organizations is too constricted by a narrow understanding of what business they are in. For example, Railroad business was railroad oriented instead of being transportation oriented. They were product oriented instead of being customer oriented. Growth is always threatened, slowed or stopped because of the failure of management. If companies are not customer oriented their new products might have been wrong and their sales method is useless. Sustained growth depends on how broadly you define your business—and how carefully you gauge your customers’ needs. Many business people make their decisions based on current circumstances. They do not think about what will likely occur in their industry in the future. Marketing myopia exhorted CEOs to re-examine their corporate vision; and redefine their 3
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markets in terms of wider perspectives. It has a successful impact because it is essentially practical and pragmatic. Management with Short vision often fails to recognize that in fact there is no such thing as growth industry. Organizations found that they had been missing opportunities which were plain to see once they adopted the wider or broader view. One reason that short sightedness is so common is that people feel that they cannot accurately predict the future. While this is a legitimate concern, it is also possible to use a whole range of business prediction techniques currently available to estimate future circumstances as best as possible. There is a greater scope of opportunities as the industry changes. It trains managers to look beyond their current business activities and think "outside the box". Marketers who value the long term objective of the organization and some time sacrificing the short term objectives can rise above the myopia. People who focus on the future predictions, trend analysis and customer life time value will be able to successfully erase the marketing myopia. For example, Pepsi says its direct competitor is Water and not Coca-Cola. This is the wider view talked about. Pepsi is a soft-drink which even quenches thirst, like water does, with an added flavor. One more example would be of Harrison Locks - the market leader in India. Harrison Locks specifically only advertises the new products what it launches in the locks market. This is a perfect example of marketing myopia. If they call themselves as India’s best Security solutions provider, the domain in which the company could play would be very wider be it locks, security doors, handles, doors, security alarms, digital alarms, and even to large extent security guards service. Thus, the organization should think of itself not as producing goods or services but as buying customers. The companies should take up tasks and do things that people would want to do business with.
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Marketing Myopia – Indian Context Sector - IT/ITES: Indian Outsourcing myopia:
The analysis for the decline is as under: In 2008, the IT and IT enabled services (ITES / BPO) industries were supposed to be the major drivers of India’s economic growth. According to Nasscom, the two industries employed 4 Million people combined, account for 7% of GDP, and 33% of foreign exchange inflow. But the reality is that wages are rising in India causing the reduction in cost advantage for off-shoring to Indian from at least 1:6 to 1:3, attrition being other factor. Jobs that are low value add and easily automatable should and will disappear over the next decade. People talk a lot about India moving up the value chain. Some of that has indeed happened. An industry that started gaining momentum with the Y2K porting projects has blossomed beautifully into one that offers a much more comprehensive spectrum of services. Yet, India, for all its glory, is still the world’s back-office. The IT / ITES industry is a “services” industry. In simple terms, the Indians don’t do the thinking. The customers do. India executes. As a result, India has not learnt to come up with technology products of its own. Barring a few exceptions, the huge amount of venture capital chasing India finds it difficult to be deployed. There is way too much money, way too few deals. Instead, tech-sector VCs are now diverting capital to retail, real estate, hotels, etc. The $30 Billion IT / ITES services industry, meanwhile, is slowly and surely, losing its competitive advantage. They are complacent. They will not take risks. They have “outsourced” thinking to their customers. As the 1:3 cost structure becomes 1:1.5, it will soon become inefficient to use Indian labor. For many Europeans, Eastern Europe has already become more compelling than India. The pure labor arbitrage equation will no longer balance. 5
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In a decade, what would happen to the newly minted affluent class created by the Indian IT boom is the major growing concern. Companies like Infosys and Wipro, assuming that they want to preserve their business momentum, will need to diversify their portfolios away from pure bodyshopping and process competencies to technology driven advantages. The obvious place for them to go is Software-As-A-Service (SAAS). Their current market caps and cash reserves are high, so an easy way for this transition would be via acquisitions. Wherever SaaS and manual BPO services overlap, they should cut the manual and replace with SaaS to the extent possible. To give you an accurate picture, none of this is happening quite yet. In fact, Infosys is hiring tens of thousands of new employees in India still. The mood is upbeat. The golden goose is still laying large, warm eggs, enough to feed the 4 Million and their families. Meanwhile, the workforce is getting comfortable in their cubicle chairs, just as the turkey gets comfortable before Thanksgiving. This is an example for myopia where the Indian IT industry has to do much to gain customers as well as employees satisfaction with the up gradation of technologies in momentum with the business outcomes.
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Marketing Myopia – Indian Context Politics: The BJP and their myopic ideology:
As a party, the BJP depends on a particular historical narrative to prop up its primary ideological precept: that India is, and always has been, a Hindu nation. This is why the BJP exerted itself while in power, from 1998 to 2004, to rewrite school textbooks, emphasizing Hindu victimhood and the rapaciousness of the Islamic invasions of India between the eleventh and sixteenth centuries. This is why the party vehemently objects to the Aryan invasion theory of Indian prehistory, which suggests that the basic tenets of Hinduism were formulated abroad and only subsequently carried by migrants into the Indian subcontinent. This is particularly evident from the case where Jaswant Singh was expelled from the party for the book Jinnah: India-Partition-Independence. It was not Singh’s faulting of Nehru in his book that got him expelled; that alone would have earned him accolades from his BJP colleagues. Rather, it was his declaration that Jinnah was actually a champion of Hindu-Muslim unity, forced to call for a separate Muslim state only because Nehru’s blueprint for an India with a strong center and weak states might fail to protect the Muslim minority from the massive Hindu majority. Singh’s argument, despite having been asserted earlier by other historians, seemed to rub the BJP’s guardians of ideology the wrong way; they would prefer to project Jinnah as a narrowly communal leader who yearned for his own Islamic state. By the party’s facile arithmetic, this voluntary subtraction of Pakistan’s Muslims automatically made the new Indian state a Hindu one -- never mind the silent elision of Christians, Jains, Buddhists, Sikhs, and Parsis, not to mention the Muslims who opted to remain in India, numbering nearly as many as those in the new Pakistan. The BJP seems like a party that lacks logic. It is a party in which you take a stand, and then you stick stubbornly to that stand, whatever the arguments against it. Jaswant Singh also suffered from a case of awful timing. Four years ago, when the BJP was feeling more secure about its ideology, Lal Krishna Advani, then the party’s president, visited Jinnah’s tomb in Pakistan and described its occupant as “secular” and an “ambassador of Hindu-Muslim unity.” For this, there was no expulsion; Advani was merely removed from the presidency, but he remained so
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close to the party’s power center that he was able to make himself the BJP’s candidate for prime minister during the general elections held last spring. Mistakenly or otherwise, the BJP chose to run a campaign of personality; Advani’s presence on the ticket often outweighed the local issues in individual parliamentary seats. Having derided the 76-year-old Prime Minister Manmohan Singh as a weak, aging leader, Advani, all of 82 years old, ran campaign posters of himself karate-chopping the air and promising to be a “strong leader” and provide “decisive government.” Flaunting his supposedly youthful decisiveness seems to have failed: the BJP won only 116 out of 545 seats, 22 fewer than it had squeezed from the 2004 elections. When Advani refused to accept responsibility for the defeat and resign as leader of the opposition, mutiny began to brew. And like nearly every Indian political party, the BJP is not internally democratic, so the disagreements resulting from the electoral misadventure began to seep out through the media like smoke under the door of a burning building. In a letter circulated within the party, then leaked to the press, Jaswant Singh questioned the coordination and accountability of the BJP’s senior leaders -- an implied jab at Advani. Around the same time, another BJP member, Arun Shourie, wrote a serialized account of his party’s degeneration in The Indian Express, a major newspaper. By the time Singh’s book was released, Advani and the BJP were tired of dissent. The fault line along which these various factions have emerged is a deep one, and it suggests a serious identity crisis within the BJP. The ideological wellspring -and, some observe cuttingly, the puppet master -- of the BJP is the Rashtriya Swayamsevak Sangh (RSS), India’s foremost right-wing Hindu organization, which has been accused of helping to demolish a mosque in Ayodhya and of complicity in the anti-Muslim Gujarat riots of 2002. But after two successive electoral defeats, pragmatists within the BJP as well as external analysts have perhaps begun to realize that too much Hindutva -- too much of a focus on temple-building, for instance, or too much spurning of the Muslim vote -- is hurting the BJP. The RSS, on the other hand, insists that the BJP is floundering because it has diluted its Hindutva to appear moderate. For a party that is barely 30 years old, this is a midlife crisis that has struck much too early. 8
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The BJP’s dilemma was best illustrated by what occurred in the northern Indian town of Pilibhit at the height of the election campaign. In late March, the BJP’s candidate from Pilibhit, Varun Gandhi, was charged with making viciously antiMuslim statements at a rally; a video that he insisted was a fabrication captured him promising to cut the throats and hands of Muslims as his audience raucously cheered. Gandhi, the estranged grandson of Indira Gandhi, was arrested, and the BJP, torn between the demands of decency and the potential electoral profits of defending Gandhi and rousing its base, chose the latter. “Gandhi was only talking in abstract terms,” the BJP leadership’s rationalization went. “Gandhi was merely protecting Hinduism.” In Pilibhit, the BJP’s strategy worked. Visiting the town a few days after Gandhi’s outburst, when riot-control vans still lurked on the side of a main road, the town’s Hindu residents repeatedly told me that, while they had never experienced any religious friction, they saw nothing wrong with Gandhi’s bellicose defense of his faith and said that they would certainly vote for him. The imam at Pilibhit’s biggest mosque was confused and wary. He thought Gandhi was saying these things “just to get elected,” adding, a little unsurely, “Well, that is the hope.” Gandhi won in Pilibhit by the highest-ever margin for a new member of parliament. But the BJP, which had hoped to transmit the Hindu-chauvinist sentiment whipped up in Pilibhit across the rest of the state of Uttar Pradesh, ended up performing miserably in areas it had once dominated. Relying on Hindutva thus yielded a lopsided payoff: it was attractive in the short term but a liability in the long run. The same model is now shaping the BJP on a national level. At the moment, because of the moral authority it exerts over the party, the RSS is the only power that can remove unpopular party leaders, repair rifts between feuding factions, and save the BJP from imploding. But in the long term, if India remains committed to secularism, the RSS’ imposition of extreme Hindutva on the BJP will only erode the party, turning it into a lumbering, inflexible, failure-prone outfit. The staunchest, most valuable BJP members may very well end up being the moderates who can reject the RSS’ constricted vision, rebuild the party, and rescue it from that dire fate.
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Congress ideology: As a party has kept pace with the changing wants of the Indians. The two consecutive elections lost have made them change their strategy. The are now focusing on the mandate “Aam Admi Ke Badthe Kadam, Har Kadam Par Bharat Buland” which roughly translates to ‘The common man moves forward, And with his every step India prospers.’ The manifesto highlights all the achievements of the UPA Government over the last 5 years in power and identifies improving various policies to favour more rural & under-privileged sections of the Indian society. They have also brought in change through Rahul Gandhi as a young leader bringing the needed change. Unlike to BJP that was portraying Advani (81) as the young and zealous leader that India needed against Manmohan Singh (76) dint sell to the Indian public. The congress has focused on the needs of the people (customers) and has stirred the right ingredients for a growing India. Bringing out BJP’s myopic view: The expulsion of Jaswant Singh from the BJP points to the party falling prey to what's termed 'Marketing Myopia'. With Jaswant, one of the only symbols of urban sophistication in an otherwise rustic party, gone, the BJP has lost its last hope at connecting with a rapidly changing voter demographic in India. Liberalised urban India seeks sophistication in their lifestyles. A party saddled with symbols, real and contrived that seem like they are a throwback to yore, will find it increasingly difficult to connect with voters who want move forward and leave behind cultural hangovers of the past. Of course, the party bets it will connect with 'less sophisticated' masses who identify with what's rural and rustic. But even the 'less sophisticated' crave urban sophistication. And the mass media has presented to them on a platter, a lifestyle that they may not for the moment enjoy, but surely crave. After all, who amongst the citizenry looks to staying still? Staying stuck to relics of the past and the soon to be obsolete present? It’s the 'moving on' masses the BJP will miss if it holds on to what it calls ideology. The inability to see the future and design offerings that will be relevant in that future to come, is what's termed, Marketing Myopia. And not knowing that isn't 10
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ideology that matters, and that it’s about what the voter wants, is a learning that's imperative. It’s a learning of what businesses know keeps them alive and kicking. It isn’t about the product, it’s about the buyer. It isn’t about the party, it’s about the needs and wants of the voter.
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Marketing Myopia – Indian Context Sector – Automobile: Ambassador: Marketing Myopia:
Ambassador can be called as the first Indian car. Ambassador was born in 1958. The car owes its design and technology to a British car model - Morris Oxford which was built by Morris Motor Co at Oxford UK. Hindustan Motors launched the Indianite version of Morris Oxford as Ambassador in 1958. From 1958 to 1980's Ambassador ruled the Indian market. In fact there were only two cars in the Indian market - Premier Padmini and Ambassador. Then came the era of licensing where the unfriendly Indian economic policies ensured that no automobile manufacturers entered the Indian market. There was heavy investment required in upgrading and innovating new products as the consumers had already started adopting the western world. Soon in 1983, Maruti Udyog Ltd launched the Maruti 800. This saw the emergence of a new era in the Indian car market. Ambassador started losing its leadership position to Maruti. The family segment which is the largest segment in the car market embraced Maruti. Ambassador was reduced to a marginal player within no time. But Ambassador had some advantages over 800 which made it dearer to certain segments. It was the only Indian car with Diesel option. During those times, there was a significant difference in the prices between Diesel and Petrol. Second advantage of Ambassador over Maruti was that it was spacious and sturdy. These two factors enabled the brand to become popular among big families and more importantly among the Taxi and tour operators. Ambassador was perceived to be a sturdy car ideal for Indian roads which made a positive perception of being less expensive to maintain. These two were only perceptions. In fact, Ambassador was expensive to maintain and even though the car looked sturdy and well built, the car lacked the quality and refinement. Rattling sounds and rusting was common complaints. But consumers bought the car because of the significant economy of diesel cars which made consumers to compromise on other parameters.
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Another significant market for Ambassador was the Government. Over 16 % of the brand sales came from the Government. Ambassador was the first choice for most bureaucrats. Soon the officials also lost interest in the brand. With the emergence of new and better models from other auto-makers, there was a significant drop in the orders from the Government. The fall of Ambassador from a leadership position to a marginal player is a classic case of marketing myopia. For four decades, the brand has been taking its customers for granted. There are many reasons that can be attributed to this brand's failure. The fundamental issue was with the product and price. If we look at the product, Ambassador never changed with times. The brand made many cosmetic changes from 1958-2000 and three upgrades were made which were named as Mark II, Mark III and Mark IV. But there was no significant value addition between these upgrades. The look and the built quality remained the same. A major change happened when the brand introduced an 1800 Isuzu engine. The Ambassador with Isuzu engine again lifted the sales of the brand. But the euphoria was short lived. The apathy of Hindustan Motors (HM) to offer product changes in tune with the times made the brand stale. Second factor that failed Ambassador was the price. HM never bothered to rationalize the price of the brand. The price that they were offering was equal to the price of luxurious indigo sedan. The company at no point thought of passing on the reduced cost to the consumer. Had the company rationalized the price of Ambassador, the brand could have survived the competition. The other factor that added fuelled to failure of Ambassador came with the launch of Indica. Indica took away the taxi car market from Ambassador. Again the diesel loving individual consumers had a better affordable modern car as compared to the ageing Ambassador. Indian consumer is now spoilt with choices. The competition is immense and the quality of cars has also gone up. Consumers now have new set of purchase considerations like quality, brand, drivability, luxury, cost of maintenance etc 13
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In the value proposition domain, Ambassador is never in the radar of the consumers. The narrowing price difference between petrol and diesel also eroded the value in investing in an old dated Ambassador. Without investing in either brand or product, HM had sealed the fate of this brand. Ambassador should have learned from Maruti 800. The brand is still surviving because it made changes along with the changing consumer values. Also the brand rationalized its price in the light of emerging competition which made Maruti 800 relevant even in the current market. Ambassador had the potential to become an Iconic brand like Volkswagen Beetle. But the brand could have been relevant to Indian market as a basic family car.
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Marketing Myopia – Indian Context Sector – Automobile: Maruti Gypsy – Myopic Approach:
Gypsy was one of India's first sports utility vehicles. The vehicle distinguished itself by creating a breakaway category of SUV off roader from the existing jeep category which was dominated by Mahindra. The brand was considered as an aspiration by many young crowds in India. The brand was positioned on the basis of its ruggedness. The brand was promoted as a pure off roader. The positioning was reinforced by the success of the brand in rally and off-road events. Maruti also promoted such events to boost the brand as the ultimate off roader. The brand had the tagline of "There is a Gypsy in Everyone".
But the brand failed to capitalize on the first mover advantage although it is still considered to be one of the sportiest looking SUV in the Indian market. The brand is now confined to certain niche markets like Police and Army vehicle segments. Gypsy was the rebadged version of Suzuki Jimny. Although Jimny is still surviving, Gypsy is in the last stage of its product life cycle. The brand which pioneered the off roader category sadly is dying when the SUV category has started growing. The brand failed because of the apathy of the company in investing in the brand. The product had inherent problem that created negative word of mouth and the company didn't care to look at the negatives of the brand. Gypsy although considered as a tough vehicle lacked many important attributes valued by a customer. The driving quality and the mileage were unpleasant. The product was priced at a ridiculous premium which was not justified in terms of delivering value. The brand was priced that was comparable with an entry level sedan. The product although looked excellent outside was a mess inside. The vehicle lacked space and comfort especially for the rear seat. It had all the qualities for an off roader but failed to understand that Indian consumers use off roaders on roads (cities). The mileage was awful and that ensured that only those who fall head over heels over the looks only will buy this brand. Since MUL at that time was in the public sector, the brand was sold to Police and army. For the ordinary consumers, the brand did not make any sense. 15
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Gypsy also did not change itself in tune with the changing industry requirements. This is shortsightedness. The vehicle initially was severely underpowered for an off roader. The company enhanced the power from 975cc to 1300 cc only after 11 years. Gypsy King was launched sported to have the more powerful Esteem engine but was priced steeply. The last four years has shown that SUV category is growing very fast fuelled by the success of the likes of Mahindra Scorpio. Most of the global bigwigs in the SUV segment are now there in India. Had this brand changed its looks and feel in tune with the emerging category requirements, Gypsy could have been a major brand. But the brand’s fate is a classic example of Marketing Myopia.
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Marketing Myopia – Indian Context Sector – Automotive: Bajaj Chetak’s Shortsightedness:
BAJAJ CHETAK was a popular Indian made motor scooter produced by the Bajaj auto company. The Chetak was BAL's first scooter model under the Bajaj brand. Originally based on Italian Vespa, Chetak was the only choice for millions of Indian families as an affordable way of transport for decades. The Chetak was positioned as reliable and sturdy. The Chetak, a geared scooter, had come to occupy a near-iconic status. In early 70’s scooters dominated the Indian two-wheeler market. Most middle-class Indians preferred scooters because of their durability, low maintenance costs, and versatility. At that time, the motorcycles available in India were heavier and not as fuel efficient as scooters. They were also costlier. The brand was introduced in the era of licensing with virtually no competition. Bajaj Chetak gained huge brand equity. With reasonable price and the low maintenance cost made this product a huge hit among the middle class Indians. If reports are to be believed, Chetak was an unavoidable dowry in 1970's and 80's. It had a waiting period of more than 10 years. Decline in Bajaj Market In the late 1990s, the Indian two-wheeler market witnessed a shift in consumer preferences. The popularity of geared scooters began to wane while that of motorcycles soared. There were various reasons for the shift 1. India was undergoing a demographic change, with the proportion younger people in the population growing significantly. 2. The economy was growing, which increased the disposable incomes of the middle class. 3. Many newer models of motorcycles, with improved designs and modern technology had become available in the market. While these changes were taking place in the market, the features of scooters, especially those of the Bajaj Chetak, remained essentially unchanged. 17 of
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Scooters were BAL's main products, and when market preferences shifted to motorcycles, the company was faced with declining sales and revenues. It was during 1990-91 that the brand began the journey to the end. In January 2006, BAL announced that it had stopped production of the Chetak. Reasons for decline The primary reason is that the Brand forgot the customers. Another case of Marketing Myopia! The company failed to understand the changing perception of the customers towards scooters. Rather than looking at the customers, the company focused on influencing Government to block the opening up of economy. Bajaj never did anything with the product. For 40 years Chetak had the same look, same quality and style. During the mid nineties the company realized lately that the segment has shifted to motorcycles. Scooters were no longer the option. But did the company make a mistake in discarding the scooter segment? Looking at the way the share prices are going, the market thinks that Bajaj Auto made the right decision. But they made a mistake in leaving the scooter segment completely. Contrary to expectation, the scooter segment has not died. It has only changed. Chetak lost its identity somewhere during the nineties. It was only in 2004 that company made any change in Chetak. Bajaj never was serious about product development. The R&D spent for a long time was a miniscule 1%. The average cycle time for the new product development was 4-5 years compared to 2-3 years of other competitors. Even after the opening up of economy, the scooter segment did not witness much competition. The players like Vespa did not have much of success in this segment. Kinetic Honda managed to carve a niche with its gearless scooters. Another segment which was growing was the scooterette segment which was dominated by TVS scooty. Bajaj never seriously looked at customer perception about Chetak. The product had serious problems like starting trouble and riding comfort. There was nothing 18
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wrong with the Promotion. " Hamara Bajaj " and " No one can beat a Bajaj " were famous base lines. There was nothing wrong with distribution and the pricing was very reasonable. The major problem was in the Product. In fact what BAL could have done was re-launch the product with the following additional features: ? Electric start ? Riding comfort ? Greater mileage ? Better R&D i.e. redevelopment of the product according to current market needs
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Marketing Myopia – Indian Context Defining Growth, redefining business: Telecommunications v/s ICE
Experience shows that when a business has redefined its market, it has continued to grow as new targets are set. Perhaps the best example is the recent one, where categories such as telephones, television, wireless communication, cable television service providers, Internet, DTH and film producers have all converged into a single category known as ICE, which is a combination of information (and Internet), communication and entertainment categories.
Companies such as Reliance Telecommunications and Bharti Airtel are good examples of companies that have redefined their business strategies and long term goals with the changing need of the consumers. Bharti Airtel, India’s leading telecom service operator has been at the forefront of meeting its customers’ needs and wants. They have kept pace with the changing environment augmenting their products and launching new products. It operates in four major segments namely, Enterprise services Carriers, Telemedia services, Mobile services, and Enterprise services Corporate. The Enterprise services Carriers segment provides telecom services to large enterprise customers as well as to other telecom carriers and also provides long distance wholesale voice & data services to the telecom carriers and to the subsidiaries of Airtel. The Telemedia services segment provides DSL (digital subscriber line) and fixed-line services over 94 cities across India. The Mobile services segment provides mobile and fixed wireless services (FWP) using GSM (global system for mobile) technology along with value-added services. It has also started providing DTH services through its brand Dish TV. Bharti Airtel is a good example of a company that has broadened its business purview and has adapted quickly to the changing demands of its large consumer base. Reliance entered the communication business offering the WLL & CDMA services to customers. They then augmented their services and entered the land line market becoming competitors to established players such as
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Marketing Myopia – Indian Context MTNL. Their model involved having the landline service provided through a wireless network which reduced operating costs tremendously and gave them easy entry into the business. They have kept developing their products as per the changing need of the customers. Now they offer a plethora of services including GSM, Broadband and wireless broadband.
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Marketing Myopia – Indian Context Conclusion:
Marketing myopia is true for all companies who define their markets too narrowly, including companies in India, who have defined markets in the '60s and '70s on the basis of licensing production. In the brand management perspective, it’s suicidal not to continuously invest in a brand. Often heritage brands wait till it becomes dated. Once the brand becomes dated, it is virtually impossible to rejuvenate the brand. The task is to prevent the brand to become dated. For that the brand has to go to the consumer for ideas. Changes in product or promotions can sustain the brand even in the light of emerging competition. Brands like Lux, lifebuoy, Surf has been successful because of continuous investment in branding and product development.
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