Description
"MMTC which is today a successful market player in silverware products,
had to fight its way on its tips & toes into the market. The article explains the basics of branding in niche marketing."
AMITY BUSINESS SCHOOL
Marketing Management
Term Paper
Name of Author: Dhruv Bisht Co Author: Ravi Kishore General Manager, MMTC Ltd. (Precious metals)
1|Page
Creating silverlining
Executive summary
The term paper discusses the issue of a product entering a new market & developing its brand equity & brand recognition. Whenever a new product enters in a existing market it has understand the needs & wants of the customers precisely. Also it has to understand the trends of the market, taste buds & preferences of the consumers, pricing techniques & develop market differentiation.
This paper in detail throws light on the concerns faced by MMTC LTD. ltd. while launching their brand sanchi as they entered in a already established market. It talks about the techniques of market differentiation (why my product is better than others?), brand equity (creating loyalty for a product & various ways of educating the customer.
This paper analyses the various market differentiation strategies that are used throughout the world and also states as well as tries to correlate the various strategies actually adopted by MMTC LTD. Ltd., and also discusses how the company benefited from each method. In this paper I have discussed in detail:
The main issues sanchi had to face while entering a new market.
? ? ? ?
Commonly used strategies while creating a brand value for a product & the various surveys done by MMTC LTD. Ltd. Methods actually adopted by the company to do branding of its silverware articles. Explain in detail the solutions & benefits of those strategies to the company The current scenario & position of the company in the market.
2|Page
Introduction of company
Minerals & metals trading corporation ltd.(a govt. Of India enterprise), established in 1963, is today India's leading international trading company, with a turnover of over US$ 1billion. The first public sector enterprise to be accorded the status of "five star export house" by govt. of India for long standing contribution to exports. MMTC LTD.'s share of import in India's import of refined base non-ferrous metals in terms of value is about 20%. MMTC LTD. is the largest nonoil importer in India. Its diverse trade activities encompass third country trade, joint ventures, link deals - all modern day tools of international trading. Its vast international trade network, which includes a wholly owned international subsidiary in Singapore, spans almost in all countries in Asia, Europe, Africa, Oceania and Americas, giving MMTC LTD. global market coverage. During the year 1995, MMTC LTD. opened a jewellery show room at Chhatrapati Shivaji international airport .in the same year. From year 1996 onwards, the company started to import the chemical items and homeopathic medicines. The company had opened a new outlet at Thiruvananthapuram as a duty free business in the year of 2002 and a new line of silverware, Sanchi-silver in style. In year 2003, MMTC LTD. had acquired Rs.800 crore deals from Japanese and South Korean companies for the supply of iron ore. MMTC LTD. was a top exporter for the year 2006-07 in merchant exporter category by engineering export promotion council of India (EEPC). Today MMTC LTD. is at the peak of its industrial capabilities and is constantly increasing capacity by investing in many different projects outside for the fulfillment of its expansion needs.
3|Page
What is a brand?
The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers. Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem. The objectives that a good brand will achieve include:
? ? ? ? ?
Delivers the message clearly Confirms your credibility Connects your target prospects emotionally Motivates the buyer Concretes User Loyalty
To succeed in branding you must understand the needs and wants of your customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact. Your brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot. A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building your brand. After all your brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without.
4|Page
Problem definition
Problem faced by Sanchi silverware The main issue for MMTC LTD. ltd was to create a market for their new brand Sanchi. The brand Sanchi was in the manufacturing of silverware products and the foremost issue was to make the brand known to customers. They had to create a space for their new & high on cost product in the market which already had a very huge number of players. The various concerns for sanchi were:
?
BRANDING: The product & the brand were new in the market & they were yet to gain recognition among the people. Whenever a new product enters in the market it faces competition & there was already such a huge competition in the market that MMTC LTD. ltd. had very little scope to aggressively promote its brand. So through advertising &publicity techniques the product had to be recognized by the people wisely. MARKET DIFFRENTIATION: Identifying elements of the product or service which will provide it with a competitive advantage over its competitors is called market differentiation. The issue for MMTC LTD. was that the target market for silver was scattered between a large number of small players in the domestic market. There are a numerous number of small shops in Delhi selling silverware & silver articles (specifically in old Delhi) & MMTC LTD. had to prove its product to be unique & better from their products. They had to attract & convince the customer to the level that he is ready to shift from their local silver selling shops to a brand which had a higher cost.
?
5|Page
?
HIGH COST IN COMPARISION TO ITS COMPETETORS: the price of the products of MMTC LTD. was high in comparison to the products sold by other competitors. The competitors were selling silver at the cost of raw silver but MMTC LTD. could not do so because the MMTC LTD. was selling silver of the utmost quality which had very low margins. However the other small dealers sold silver of 20-60% quality so they could easily sell at the price of raw silver. Thus, the issue for MMTC LTD. was to justify the price of their products to the customers.
?
Differentiation on the basis of experienced and skilled craftsmen: The competitors of sanchi were very small manufacturers scattered all over Delhi & have been pioneers in the field. The jewelry shops that had silverware products had extremely skilled & experienced craftsmen. They had an edge because they understood the taste & preferences of the consumers in terms of design of silverware products. Also the people were used to the same designs based on traditional themes. Continuous innovation: constant innovation was needed to develop new designs in order to sustain in the market which already had a large variety of designs available.
?
6|Page
ANALYSIS
The company was to launch a new product in the market & for any product launch it is necessary to understand the concept of market capitalization. Sanchi as a brand was unknown to the customers. Moreover it was to enter a market where there were a huge number of experienced, skilled & strong players.
STRENGTHS
The main strength of sanchi was that it is a brand of a well known company MMTC LTD. which is one of the major players in gold ornaments & products. Also MMTC LTD. has a stringent purity standard which has been already appreciated & accepted by the consumers in the market. The other factor which proved to be the strength for sanchi is that MMTC LTD. is a govt of India enterprise & people thus have a trust on the company regarding its stability & future. One edge that brand sanchi could take was that despite of a heavy competition in the market, there was no well known & established brand name in the market to deal with. Sanchi had a good support & research & development infrastructure which is always a must for any brand to compete. It also proved to be beneficial to maintain the quality of silver. Sanchi was providing the silver of highest quality, so this was one advantage as well.
WEAKNESS
The biggest weakness of sanchi was that it had a very high price of its products in comparison to the products offered by competitors. So the main issue for MMTC LTD. was to justify the high cost of its products. One weakness was that it needed a lot to force the customer to move out of his comfort zone & come to the company showroom from the nearby & personally known sonars (local jewelry shops).
7|Page
Another weak point of MMTC LTD. was that they were not experienced in designing of silverware articles. Thus it was very difficult to get the customer convinced about royalty of their product
The opportunity was that there was no set quality standard & bar for silver products. So sanchi was open to tap the market on the same basis. On the other hand it had a threat from global players as well because it had major technological advancement in silver procurement in research and development. It was an essential step for sanchi to do the market segmentation for the target market. Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function MMTC Ltd.’s sanchi had to segment the market in order to be successful.
8|Page
TECHNIQUES TO OVERCOME THIS PROBLEM
Whenever a new product is launched in the market, there are a series of issues to deal with. As the product is new in the market it is vulnerable to the hard competition. Being a scattered industry it is very difficult to aggressively market the product, thus a judicial marketing strategy had to be adopted after close study of various factors. These factors are: Customers The first and the last step of any marketing strategy is customer, thus it becomes very important for any new business to understand the needs,aspirations,tastes ,preferences .etc of consumer through market study , surveys & experience. Some of the basic questions that are needed to formulate marketing strategy are:
How many of them are there? What are they buying? What practical problems do they try to solve? What emotional problems do they try to solve? What is the size of your market? What is your customer's price point and other economics? Exactly what does it take to win an order? How long does it take to win an order? Exactly how do customers use competitive products? What's the current satisfaction with competitors? The answers to these questions help to bridge te gap between manufacturer & consumer. Study of consumer behavior can make or break any business. Market Segmentation Before any product is launched it is the foremost requirement to segment the market. It means sub sections of the market. It is very essential to segment the market, unless & until you know whom to sell your product, how can a company form a strategy. Market segmentation can be done on the basis of following: 1. Income
9|Page
2. Gender 3. Demographic location 4. Psychological needs Thus only after segmentation a company stands in a position to understand its true potential. Various steps followed in segmentation are: Group customers (needs, industry, distribution, geography). Narrow the targets. Select targets. Label the segments. Consider the similarities and differences. Anything missing?
Competitors It is always vital to understand the strengths & weakness of your competitors because every marketing strategy is done in the light of the marketing strategy of competitors. So it is very important to be aware of your competitors not only to make profits but also develop the brand equity of the product in the market exponentially. What are they doing now? Where do competitors advertise, and how often? What is their sales pitch? How do competitors price? How do they distribute? How do competitors position themselves? How do competitors react to threats? How do successful competitors differ from the lesser? What are their market shares? Compare competitors to your organization in terms of your: Strengths Weaknesses Opportunities Threats
10 | P a g e
Methods actually adopted to overcome this problem
1. Brand equity
Branding is endowing products and services with the power of a brand. It is all about creating differences between products. It creates mental structures that help consumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the firm. To make a successful brand one has to acknowledge the fact that consumers must be convinced of the meaningful differences in the various available brands of the product or service. Although there were numerous traders of silverware, still there was no known brand for silver products (unlike gold e.g.- tanishq) & MMTC LTD. realized this & made the brand SANCHI (symbolic to purity). They created a image of the brand in the minds of the customer & associated their products with purity.
This way a brand equity was created for the product in the market. For the first time a brand for silverware products was available to the customers & it also had a trust amongst the people, being a govt. brand, which made the brand well known.
11 | P a g e
2. Market Differentiation
MARKET DIFFRENTIATION is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own product offerings. MMTC LTD. was aware of the fact that it would take a lot to attract the customer from his local jewelry shop to the branded showroom and for that it was necessary to convince the customer that products of MMTC LTD. were better than other available products. Thus, they emphasized on the unmatched purity standard of their product & on the same line they started marketing their product. MMTC LTD. was using the best quality of silver in their products. The best quality of silver possible to man is 92.5 %( scientifically tested) & it is known as sterling silverware. MMTC LTD. was selling the best possible quality of silver & this was their competitive advantage in the market. On the other hand the other competitors used only 60-70% purity on their articles. None of their rivals was selling silver of this quality & this proved to be a asset for them. They created a benchmark for quality. Products that MMTC LTD. was selling were so high on purity standards that the effect of corrosion was subdued. For example most of the traders selling silver medallions used the base of nickel which blackened in the course of time but sanchi’s medallions did not. This way sanchi was able to target the audience in an effective manner & created a unique image for its products.
3. Educating The Customers
This was the most effective strategy adopted by sanchi to promote its products & increase its sales. MMTC LTD. very aggressively started to educate the consumers about the quality of silver. They almost created a situation where price took the back seat & quality standard came in the picture. Various strategies were adopted to educate the customer about the quality standards of sanchi. A few of them were:
?
Certification by BIS was used as a proof of quality. The BIS mark developed a sense of assurity & guarantee in the mind of the customer. It is very important as to what image your brand has in the mind of customer. BIS mark helped in developing that.
12 | P a g e
?
Sanchi had a few exclusive stores in the city in which they started providing free testing of purity standards of silver & the customers were also educated about sterling silver & its features. This attracted customers a lot because they also told the customers various techniques to subdue the effect of corrosion on silver i.e. blackening of silver. Earlier many of the silver traders used to befool customers by showing WCG world council for gold mark as a purity mark for silver but sanchi educated the customers about various standards & how to measure their purity.
?
4. Cost Control
Although with a low margin of profit it was difficult for sanchi to curtail on its price but in order to tap the market they curtailed on their cost by various methods like reducing on heavy designing used on silver articles. The issue for MMTC LTD. was to justify the high cost of their products in comparison to their competitors & they were constantly working on it by educating the customers about purity of their products.
5. Advertising
As it was a new product in the market, company knew that advertising would play a very vital role in branding of their product, thus a well organized advertising strategy & techniques were taken up. The first advertising campaign of sanchi started in 2005. In the initial phase the campaign took off in a moderate pace. The unique selling proposition of sanchi was its purity standard & its advertisement campaigns revolved around it. Even today its tagline-purity you can trust is on the same grounds. Various number of articles were also published in leading newspapers. Sanchi did not want to lose on any publicity technique. It published a lot of articles in newspapers & journals about the purity standards of silver.
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Another strategy that worked for sanchi was numerous number a exhibitions held in the country. Already being a well known brand for gold MMTC Ltd. used to put up exhibitions & those proved to be an effective stage to address the audience. In those exhibitions people were educated about purity standards as well. It was during 2007 sanchi decided to add up to its catalogue & included various new articles like sculptures, photo frames, cutlery sets, etc. Today sanchi has a range of more than 1000 silverware articles ranging from Rs.500 to Rs.70000.sanchi’s advertisement campaign did wonders for them, various celebrities called in the exhibitions added to the exquisiteness of the band. It was after this advertisement campaign that for the first time local jewelers were on question regarding purity standards.
6. Market Segmentation
Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function Sanchi segmented the market on two grounds- location & income groups Location Sanchi realized that the demand for silverware articles is more in few locations as compared to the whole of nation. MMTC LTD. did a market survey & noticed that along with metropolitan cities demand for silverware articles was also good in Agra, Meerut & few cities of Southern part of the nation. Sanchi accordingly decided on the number of stockists in the city. A few relevant findings from the survey were that demand for silver utensils was high in south India as they eat in them, demand for silver articles was low in coastal regions due to fast corrosion effect because of climate & many people are interested in resale value of silver as well.
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All these findings helped sanchi a lot in dividing the regions as per their demand. Today sanchi has 65 stockists along with its exclusive showrooms in various regional offices.
Income groups MMTC LTD. realized that the main demand for silverware articles was from the middle income consumers rather than high income consumers. Thus they focused alot on variety & range of products.
Market segmentation is also done on the basis of gender i.e. is the product commercially viable for male or female.
CONCLUSION
Today sanchi is the most established & a well known accepted brand of silverware. It has a very few close competitors & its products have a high demand in the market. Also people have a trustworthiness attached to the brand. Sanchi has succeeded in developing a market in which silverware articles are also measured by its purity standards. By Providing the finest quality silver, sterling silver-92.5% pure, it has created a brand equity. It has created a space for its brand & products in the market with great effort & in the current scenario it has a brand value attached to its products.
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Bibliography
1. Kotler, Keller, Koshy & Jha. (2009) marketing management. Pearson - to understand various definitions of market differentiation, brand, brand equity, etc. 2. Website of the company www.mmtclimited.in 3. Help of co author on various classified data & internal issues. 4. Wikipedia referred for basic terminologies & understanding.
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doc_866681686.docx
"MMTC which is today a successful market player in silverware products,
had to fight its way on its tips & toes into the market. The article explains the basics of branding in niche marketing."
AMITY BUSINESS SCHOOL
Marketing Management
Term Paper
Name of Author: Dhruv Bisht Co Author: Ravi Kishore General Manager, MMTC Ltd. (Precious metals)
1|Page
Creating silverlining
Executive summary
The term paper discusses the issue of a product entering a new market & developing its brand equity & brand recognition. Whenever a new product enters in a existing market it has understand the needs & wants of the customers precisely. Also it has to understand the trends of the market, taste buds & preferences of the consumers, pricing techniques & develop market differentiation.
This paper in detail throws light on the concerns faced by MMTC LTD. ltd. while launching their brand sanchi as they entered in a already established market. It talks about the techniques of market differentiation (why my product is better than others?), brand equity (creating loyalty for a product & various ways of educating the customer.
This paper analyses the various market differentiation strategies that are used throughout the world and also states as well as tries to correlate the various strategies actually adopted by MMTC LTD. Ltd., and also discusses how the company benefited from each method. In this paper I have discussed in detail:
The main issues sanchi had to face while entering a new market.
? ? ? ?
Commonly used strategies while creating a brand value for a product & the various surveys done by MMTC LTD. Ltd. Methods actually adopted by the company to do branding of its silverware articles. Explain in detail the solutions & benefits of those strategies to the company The current scenario & position of the company in the market.
2|Page
Introduction of company
Minerals & metals trading corporation ltd.(a govt. Of India enterprise), established in 1963, is today India's leading international trading company, with a turnover of over US$ 1billion. The first public sector enterprise to be accorded the status of "five star export house" by govt. of India for long standing contribution to exports. MMTC LTD.'s share of import in India's import of refined base non-ferrous metals in terms of value is about 20%. MMTC LTD. is the largest nonoil importer in India. Its diverse trade activities encompass third country trade, joint ventures, link deals - all modern day tools of international trading. Its vast international trade network, which includes a wholly owned international subsidiary in Singapore, spans almost in all countries in Asia, Europe, Africa, Oceania and Americas, giving MMTC LTD. global market coverage. During the year 1995, MMTC LTD. opened a jewellery show room at Chhatrapati Shivaji international airport .in the same year. From year 1996 onwards, the company started to import the chemical items and homeopathic medicines. The company had opened a new outlet at Thiruvananthapuram as a duty free business in the year of 2002 and a new line of silverware, Sanchi-silver in style. In year 2003, MMTC LTD. had acquired Rs.800 crore deals from Japanese and South Korean companies for the supply of iron ore. MMTC LTD. was a top exporter for the year 2006-07 in merchant exporter category by engineering export promotion council of India (EEPC). Today MMTC LTD. is at the peak of its industrial capabilities and is constantly increasing capacity by investing in many different projects outside for the fulfillment of its expansion needs.
3|Page
What is a brand?
The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers. Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem. The objectives that a good brand will achieve include:
? ? ? ? ?
Delivers the message clearly Confirms your credibility Connects your target prospects emotionally Motivates the buyer Concretes User Loyalty
To succeed in branding you must understand the needs and wants of your customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact. Your brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot. A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building your brand. After all your brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without.
4|Page
Problem definition
Problem faced by Sanchi silverware The main issue for MMTC LTD. ltd was to create a market for their new brand Sanchi. The brand Sanchi was in the manufacturing of silverware products and the foremost issue was to make the brand known to customers. They had to create a space for their new & high on cost product in the market which already had a very huge number of players. The various concerns for sanchi were:
?
BRANDING: The product & the brand were new in the market & they were yet to gain recognition among the people. Whenever a new product enters in the market it faces competition & there was already such a huge competition in the market that MMTC LTD. ltd. had very little scope to aggressively promote its brand. So through advertising &publicity techniques the product had to be recognized by the people wisely. MARKET DIFFRENTIATION: Identifying elements of the product or service which will provide it with a competitive advantage over its competitors is called market differentiation. The issue for MMTC LTD. was that the target market for silver was scattered between a large number of small players in the domestic market. There are a numerous number of small shops in Delhi selling silverware & silver articles (specifically in old Delhi) & MMTC LTD. had to prove its product to be unique & better from their products. They had to attract & convince the customer to the level that he is ready to shift from their local silver selling shops to a brand which had a higher cost.
?
5|Page
?
HIGH COST IN COMPARISION TO ITS COMPETETORS: the price of the products of MMTC LTD. was high in comparison to the products sold by other competitors. The competitors were selling silver at the cost of raw silver but MMTC LTD. could not do so because the MMTC LTD. was selling silver of the utmost quality which had very low margins. However the other small dealers sold silver of 20-60% quality so they could easily sell at the price of raw silver. Thus, the issue for MMTC LTD. was to justify the price of their products to the customers.
?
Differentiation on the basis of experienced and skilled craftsmen: The competitors of sanchi were very small manufacturers scattered all over Delhi & have been pioneers in the field. The jewelry shops that had silverware products had extremely skilled & experienced craftsmen. They had an edge because they understood the taste & preferences of the consumers in terms of design of silverware products. Also the people were used to the same designs based on traditional themes. Continuous innovation: constant innovation was needed to develop new designs in order to sustain in the market which already had a large variety of designs available.
?
6|Page
ANALYSIS
The company was to launch a new product in the market & for any product launch it is necessary to understand the concept of market capitalization. Sanchi as a brand was unknown to the customers. Moreover it was to enter a market where there were a huge number of experienced, skilled & strong players.
STRENGTHS
The main strength of sanchi was that it is a brand of a well known company MMTC LTD. which is one of the major players in gold ornaments & products. Also MMTC LTD. has a stringent purity standard which has been already appreciated & accepted by the consumers in the market. The other factor which proved to be the strength for sanchi is that MMTC LTD. is a govt of India enterprise & people thus have a trust on the company regarding its stability & future. One edge that brand sanchi could take was that despite of a heavy competition in the market, there was no well known & established brand name in the market to deal with. Sanchi had a good support & research & development infrastructure which is always a must for any brand to compete. It also proved to be beneficial to maintain the quality of silver. Sanchi was providing the silver of highest quality, so this was one advantage as well.
WEAKNESS
The biggest weakness of sanchi was that it had a very high price of its products in comparison to the products offered by competitors. So the main issue for MMTC LTD. was to justify the high cost of its products. One weakness was that it needed a lot to force the customer to move out of his comfort zone & come to the company showroom from the nearby & personally known sonars (local jewelry shops).
7|Page
Another weak point of MMTC LTD. was that they were not experienced in designing of silverware articles. Thus it was very difficult to get the customer convinced about royalty of their product
The opportunity was that there was no set quality standard & bar for silver products. So sanchi was open to tap the market on the same basis. On the other hand it had a threat from global players as well because it had major technological advancement in silver procurement in research and development. It was an essential step for sanchi to do the market segmentation for the target market. Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function MMTC Ltd.’s sanchi had to segment the market in order to be successful.
8|Page
TECHNIQUES TO OVERCOME THIS PROBLEM
Whenever a new product is launched in the market, there are a series of issues to deal with. As the product is new in the market it is vulnerable to the hard competition. Being a scattered industry it is very difficult to aggressively market the product, thus a judicial marketing strategy had to be adopted after close study of various factors. These factors are: Customers The first and the last step of any marketing strategy is customer, thus it becomes very important for any new business to understand the needs,aspirations,tastes ,preferences .etc of consumer through market study , surveys & experience. Some of the basic questions that are needed to formulate marketing strategy are:
How many of them are there? What are they buying? What practical problems do they try to solve? What emotional problems do they try to solve? What is the size of your market? What is your customer's price point and other economics? Exactly what does it take to win an order? How long does it take to win an order? Exactly how do customers use competitive products? What's the current satisfaction with competitors? The answers to these questions help to bridge te gap between manufacturer & consumer. Study of consumer behavior can make or break any business. Market Segmentation Before any product is launched it is the foremost requirement to segment the market. It means sub sections of the market. It is very essential to segment the market, unless & until you know whom to sell your product, how can a company form a strategy. Market segmentation can be done on the basis of following: 1. Income
9|Page
2. Gender 3. Demographic location 4. Psychological needs Thus only after segmentation a company stands in a position to understand its true potential. Various steps followed in segmentation are: Group customers (needs, industry, distribution, geography). Narrow the targets. Select targets. Label the segments. Consider the similarities and differences. Anything missing?
Competitors It is always vital to understand the strengths & weakness of your competitors because every marketing strategy is done in the light of the marketing strategy of competitors. So it is very important to be aware of your competitors not only to make profits but also develop the brand equity of the product in the market exponentially. What are they doing now? Where do competitors advertise, and how often? What is their sales pitch? How do competitors price? How do they distribute? How do competitors position themselves? How do competitors react to threats? How do successful competitors differ from the lesser? What are their market shares? Compare competitors to your organization in terms of your: Strengths Weaknesses Opportunities Threats
10 | P a g e
Methods actually adopted to overcome this problem
1. Brand equity
Branding is endowing products and services with the power of a brand. It is all about creating differences between products. It creates mental structures that help consumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the firm. To make a successful brand one has to acknowledge the fact that consumers must be convinced of the meaningful differences in the various available brands of the product or service. Although there were numerous traders of silverware, still there was no known brand for silver products (unlike gold e.g.- tanishq) & MMTC LTD. realized this & made the brand SANCHI (symbolic to purity). They created a image of the brand in the minds of the customer & associated their products with purity.
This way a brand equity was created for the product in the market. For the first time a brand for silverware products was available to the customers & it also had a trust amongst the people, being a govt. brand, which made the brand well known.
11 | P a g e
2. Market Differentiation
MARKET DIFFRENTIATION is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own product offerings. MMTC LTD. was aware of the fact that it would take a lot to attract the customer from his local jewelry shop to the branded showroom and for that it was necessary to convince the customer that products of MMTC LTD. were better than other available products. Thus, they emphasized on the unmatched purity standard of their product & on the same line they started marketing their product. MMTC LTD. was using the best quality of silver in their products. The best quality of silver possible to man is 92.5 %( scientifically tested) & it is known as sterling silverware. MMTC LTD. was selling the best possible quality of silver & this was their competitive advantage in the market. On the other hand the other competitors used only 60-70% purity on their articles. None of their rivals was selling silver of this quality & this proved to be a asset for them. They created a benchmark for quality. Products that MMTC LTD. was selling were so high on purity standards that the effect of corrosion was subdued. For example most of the traders selling silver medallions used the base of nickel which blackened in the course of time but sanchi’s medallions did not. This way sanchi was able to target the audience in an effective manner & created a unique image for its products.
3. Educating The Customers
This was the most effective strategy adopted by sanchi to promote its products & increase its sales. MMTC LTD. very aggressively started to educate the consumers about the quality of silver. They almost created a situation where price took the back seat & quality standard came in the picture. Various strategies were adopted to educate the customer about the quality standards of sanchi. A few of them were:
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Certification by BIS was used as a proof of quality. The BIS mark developed a sense of assurity & guarantee in the mind of the customer. It is very important as to what image your brand has in the mind of customer. BIS mark helped in developing that.
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Sanchi had a few exclusive stores in the city in which they started providing free testing of purity standards of silver & the customers were also educated about sterling silver & its features. This attracted customers a lot because they also told the customers various techniques to subdue the effect of corrosion on silver i.e. blackening of silver. Earlier many of the silver traders used to befool customers by showing WCG world council for gold mark as a purity mark for silver but sanchi educated the customers about various standards & how to measure their purity.
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4. Cost Control
Although with a low margin of profit it was difficult for sanchi to curtail on its price but in order to tap the market they curtailed on their cost by various methods like reducing on heavy designing used on silver articles. The issue for MMTC LTD. was to justify the high cost of their products in comparison to their competitors & they were constantly working on it by educating the customers about purity of their products.
5. Advertising
As it was a new product in the market, company knew that advertising would play a very vital role in branding of their product, thus a well organized advertising strategy & techniques were taken up. The first advertising campaign of sanchi started in 2005. In the initial phase the campaign took off in a moderate pace. The unique selling proposition of sanchi was its purity standard & its advertisement campaigns revolved around it. Even today its tagline-purity you can trust is on the same grounds. Various number of articles were also published in leading newspapers. Sanchi did not want to lose on any publicity technique. It published a lot of articles in newspapers & journals about the purity standards of silver.
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Another strategy that worked for sanchi was numerous number a exhibitions held in the country. Already being a well known brand for gold MMTC Ltd. used to put up exhibitions & those proved to be an effective stage to address the audience. In those exhibitions people were educated about purity standards as well. It was during 2007 sanchi decided to add up to its catalogue & included various new articles like sculptures, photo frames, cutlery sets, etc. Today sanchi has a range of more than 1000 silverware articles ranging from Rs.500 to Rs.70000.sanchi’s advertisement campaign did wonders for them, various celebrities called in the exhibitions added to the exquisiteness of the band. It was after this advertisement campaign that for the first time local jewelers were on question regarding purity standards.
6. Market Segmentation
Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function Sanchi segmented the market on two grounds- location & income groups Location Sanchi realized that the demand for silverware articles is more in few locations as compared to the whole of nation. MMTC LTD. did a market survey & noticed that along with metropolitan cities demand for silverware articles was also good in Agra, Meerut & few cities of Southern part of the nation. Sanchi accordingly decided on the number of stockists in the city. A few relevant findings from the survey were that demand for silver utensils was high in south India as they eat in them, demand for silver articles was low in coastal regions due to fast corrosion effect because of climate & many people are interested in resale value of silver as well.
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All these findings helped sanchi a lot in dividing the regions as per their demand. Today sanchi has 65 stockists along with its exclusive showrooms in various regional offices.
Income groups MMTC LTD. realized that the main demand for silverware articles was from the middle income consumers rather than high income consumers. Thus they focused alot on variety & range of products.
Market segmentation is also done on the basis of gender i.e. is the product commercially viable for male or female.
CONCLUSION
Today sanchi is the most established & a well known accepted brand of silverware. It has a very few close competitors & its products have a high demand in the market. Also people have a trustworthiness attached to the brand. Sanchi has succeeded in developing a market in which silverware articles are also measured by its purity standards. By Providing the finest quality silver, sterling silver-92.5% pure, it has created a brand equity. It has created a space for its brand & products in the market with great effort & in the current scenario it has a brand value attached to its products.
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Bibliography
1. Kotler, Keller, Koshy & Jha. (2009) marketing management. Pearson - to understand various definitions of market differentiation, brand, brand equity, etc. 2. Website of the company www.mmtclimited.in 3. Help of co author on various classified data & internal issues. 4. Wikipedia referred for basic terminologies & understanding.
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