Description
This describes the 3C's model of kenichi ohmae and it includes the topics like Introduction to 3C model Corporation, Customer and Competitors. Application of 3C model to Pratham NGO. Vodofone, Nelco Ltd, Gujarat Amubujha Cement, Maruti Suzuki, Just Dial, Mont Blac, Santoor, Pidilite Industries, Apple, Harley Davidson, Big bazaar.
MANAGEMENT GURUS
Management Guru: Kenichi Ohmae
THE 3C?S MODEL OF KENICHI OHMAE
1 April, 2010
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Anuja Shah ? 141 Bhaumik Shah – 142 Bhavik Shah – 143 Chintan Shah – 144 Hiral Vakharia ? 158
Management Guru: Kenichi Ohmae
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TOPICS INTRODUCTION TO 3C MODEL CORPORATION ? SELECTIVITY & SEQUENCING EG. VODAFONE ? MAKE OR BUY EG. NELCO LTD. ? COST EFFECTIVENESS EG. GUJARAT AMBUJA CEMENT LTD. ? JAPANESE “WIN” STRATEGIES EG. MARUTI SUZUKI LTD. EG. JUST DIAL CUSTOMER ? SEGMENTATION BY OBJECTIVES EG. MONT BLANC ? SEGMENTATION BY COVERAGE EG. SANTOOR ? RE SEGMENTING THE MARKET EG. INDIAN BANKING SECTOR EG. PIDILITE INDUSTRIES COMPETITORS ? POWER OF IMAGE EG. APPLE EG. HARLEY DAVIDSON ? CAPITALISING IN PROFIT & COST STRUCTURE DIFFERENCES EG. BIG BAZAAR EG. FASHION STREET APPLICATION OF 3C MODEL (PRATHAM ? NGO) ? PRATHAM ? OBJECTIVES OF THE STRATEGY ? STDP ? THE 3C MODEL IN PRATHAM’S CASE ? THE 3C MODEL: QUESTIONS RAISED ? JAPANESE WIN STRATEGIES IN PRATHAM’S CASE ? FIRST STAGE OF THE MARKETING STRATEGY FOR PRATHAM
? SECOND STAGE OF THE MARKETING STRATEGY FOR PRATHAM
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THIRD STAGE OF THE MARKETING STRATEGY FOR PRATHAM HITO KANE MONO THE 3C MODEL: SOLUTIONS OFFERED
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Management Guru: Kenichi Ohmae
INTRODUCTION TO THE 3CS MODEL
Kenichi Ohmae (born February 21, 1943) is one of the world?s leading business and corporate strategists. He is known as Mr. Strategy and has developed the 3C?s Model. Described as ?Mr. Strategy? worldwide, Dr. Kenichi Ohmae is regularly sought out as a public speaker and management consultant. Ohmae, according to the Financial Times of London, is ?Japan?s only management guru.? The 3C?s Model is a strategic look at the factors needed for success. It was developed by Kenichi Ohmae, a business and corporate strategist. The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account:
• A. The Corporation • B. The Customer • C. The Competitors
Only by integrating these three C’s (Corporation, Customer, Competitors) in a strategic triangle, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle.
The Corporation
Corporate?based strategies are functional in nature. They aim to maximize the corporation?s strengths relative to competition in key functional areas. Once customers? needs and objectives are analyzed and understood corporate strategy will normally be designed to meet them in the most cost?effective way. But competition will soon discover what the corporation is doing and follow suit. When this happens, the way to survive and stay profitable is to be much stronger than the competition in the key functions. This can be achieved in following way:
1) Selectivity and Sequencing
a. The corporation does not have to lead in every function to win. b. If it can gain decisive edge in one key function, it will eventually be able to improve its other functions which are now average.
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Management Guru: Kenichi Ohmae
Example: Vodafone Vodafone, a mobile service provider company has very strong marketing department. After successfully rebranding ?Hutch? as ?Vodafone?, Vodafone Essar started expanding its presence in India. The company used almost all media channels to advertise its services. It not only advertised on television, but also in newspapers, the radio, and on hoardings across the country. In April 2009, it launched an innovative advertising campaign that caught the imagination of both the public and advertising experts. The campaign, focusing on the different value added services (VAS) offered by the company, introduced new characters called the Zoozoos. Several advertisements in which the Zoozoos featured were shown on television during the Indian Premier League (IPL) Season 2. Vodafone’s success in such an oligopolistic cellular market is evident and can be attributed to the unique and innovative egg?shaped Zoozoos characters that were created during the IPL Season 2 (May 2009). The ad gained immense popularity that elevated Vodafone’s brand image to greater heights in an industry where other cellular providers had celebrities endorsing their brands. The ad was indeed an advertising genius. The company’s quarterly results reveal that revenues did increase in the quarter ended June 30, 2009 by 9.3% to £10.7b. As this example suggests, as Vodafone’s main functional unit is providing services. But it has strongly built its marketing department, which in turn has provided good financial returns.
2. Make or Buy
a. In case of rapidly rising wage costs, it becomes a critical decision for a company to subcontract a major share of its assembly operations. b. If its competitors are unable to shift production so rapidly to subcontractors and vendors, the resulting difference in cost structure and/ or in the company’s ability to cope with demand fluctuations may have significant strategic implications. Example: Nelco Limited NELCO LIMITED, established in 1940, a part of the leading business house?The TATA Group, is focused on system integration and product management for
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158)
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Management Guru: Kenichi Ohmae
industrial controls, power, electronics, defence electronics, satellite communication and automation. Apart from the core expertise of the Tatanet division, Nelco specializes in the areas of security and surveillance for Defence and Civil applications, Traction, Electronics for Locomotives, Turnkey projects involving SCADA; AC and DC drives; as well as Real time and Embedded software. Nelco’s designs PCB (Printed Circuit Board) which is its core competency and then outsources PCB making to smaller manufacturers. Thus it reduces the cost of manufacturing and staff requirement.
3. Cost?Effectiveness
a. Improving the cost?effectiveness can be done in three ways: b. First by reducing basic costs, c. Second by exercising greater selectivity (orders accepted, products offered, functions performed) d. Third by sharing certain key functions with a corporation’s other businesses or even other companies. Example: Gujarat Ambuja Cement Ltd Consider an example of Gujarat Ambuja Cement which has successfully improved its cost effectiveness and had resulted in positive growth. Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of commercial production at its 2 million tonne plant in Chandrapur, Maharashtra. The company has a market share of around 10 per cent, with a strong foothold in the northern and western markets. Gujarat Ambuja is India?s largest cement exporter and one of the most cost efficient firms. Cost Effective Strategies • Capacity Utilization: Since the industry operates on fixed cost, higher the capacity sold, the wider the cost distributed on the same base. Working on this principle, GACL increased its capacity production and thus achieved economies of scale.
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• Pow wer: The ce ement indu ustry is en nergy inten nsive in na ature and thus powe costs er form the most critical c m cost compo onent in cement ma c anufacturin (about 30% to ng total l expenses). Higher t the captive e power consumption n of the com mpany, the better it is for the co ompany. G GACL estab blished its own capti ive power plant in o order to uce r s rce eaper and resulted in uninter rrupted redu power costs, as this sour is che supp ply of pow wer. • Freight: Since cement is a bulk co s ommodity transporting is a c y, costly affai (over ir 15% %). Plants lo ocated in c coastal bel lts find it m much chea aper to tran nsport cem ment by the sea route in order t cater to the coast markets such as Mumbai and the to o tal s a state es of Gujar rat and Tam mil Nadu. GACL rou uted its tran nsport of r raw materi ials and finis shed goods s through s sea. This re educed the eir freight c charges co onsiderably y.
Japan nese “Win n” Strateg gies
ple: Maruti Suzuki Lt td. Examp Maruti 800, the n i name most common for a mid n ddle class I Indians an the only car in nd y the A1 Segment c category. It served as s cash cow w of MUL fo or nearly 1 17 years. It started off wit th a low co ost car with h Maruti 8 800 and gra adually inc creased its s product o offering to high end us her sers. It then came ou with its A2 segme cars “Z n ut ent Zen” and “Wagon “ R”. It l later launc ched “Este eem” to ca ater to A3 segment. It gradually unveile new ed models s for A2 se egments an nd even la aunched Se edan SX4 f for A3 segm ment. It launched OMNI and Versa a for C segm ment.
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ple: Just Dia al Examp Just Dial is Indi ia’s no.1 lo ocal search destinat h tion. The c company c caters to over 25 o million unique u n users spre ead across 240 cities in India This uni s a. ique local search service e is availab ble on Phon ne, Web, W WAP and SM MS. 1) Just Dial starte ed its opera ations in 1996 with te elephone b based searc ch service. 3.2007: Internet Service 2) 14.03 Following the succe of the t g ess telephone based sea arch service they exp e; panded their se ervices to reach use via mu ers ultiple tool which w ls, would ma local searches ake conven nient, fast, and highly y accurate for consum mers. With h the prolif feration of mobile phones and the Internet, they launc s ched a loc search engine w cal www.JustD Dial.com which aims to m make local search info ormation available a the click of a butto The a at k on. as started f for 14 cities s of India. online service wa AP Service 3) 16.08.2007 WA Just Dial launched of the fastest local sear d l rch engin on Mo ne obile – wap.justdial.com. Th was for the people who are on the m his r e move and need to nhttp://w access to informa ation instan ntly. 4) 15.11.2007 SMS Service In a bid to o offer furt ther custom mization a after launch hing its W WAP site, Ju ust Dial Service es announc ces SMS Se earch. All t they need do is send d a text message to th he short code, fr rom their m mobile pho ones.
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Management Guru: Kenichi Ohmae
5) Just Dial is in advanced stages of launching its local search service in North America on a toll free number ?1?800?justdial?. Going forward the company intends to leverage the Just Dial brand and know?how for an international franchise.
Customer
In a free economy, any given market inevitably becomes heterogeneous, since each customer group will tend to want a slightly different service or product. Moreover, the corporation cannot reach out to all customers with equal effectiveness, and therefore it needs to distinguish the easily accessible customer groups from the hard? to?reach ones. Finally, the competitor?s abilities to respond to customer needs and to cover different customer groups will differ from those of the corporation. These are the reasons why the corporation must segment the market in order to establish a strategic edge over its competition. Fine structure within the customer group offers the opportunity to establish this kind of differentiation. There are two ways in which differentiation is done segmenting by objectives and segmenting by coverage.
• Segmentation by Objectives
In segmentation by objectives, differentiation is done based of the different ways that various customers use a product. Hence it becomes necessary for the corporations to design the product to cater the needs of that particular group of consumers. Example: Mont Blanc The Mont Blanc pen is used by different customers in different ways. Although the basic objective of the pen is to serve the purpose of writing, it is largely used for gifting purposes. The company has also designed the packaging of the pen in such a way that the consumers perceive it as luxury product. Also it is used by many as signature pen and not for writing purposes. This adds another dimension to the objective function of the pen. Some group of customers also consider them as jewelry pens and hence the company has come out with diamond studded and gem studded pen to cater to this particular objective of that particular segment.
• Segmentation by Coverage
Another mode of segmenting the market may arise from the corporation?s own circumstances known as segmentation by market coverage. Even when a large group
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Management Guru: Kenichi Ohmae
(or subgroup) of the customers share identical wants and needs, the corporation?s ability to serve them all may be constrained by limited resources, by gaps in the market coverage relative to competition, or by the cost of serving a fragmented market at a price acceptable to the customers ? who, if the price were too high, could always go without or resort to an alternative. This segmentation usually arises from trade?off study of marketing costs v/s marketing coverage. Example: Santoor The company has spent large amount of money behind its marketing and promotional activities in the Northern as well as Southern belt. It projected its product as a natural product and advertised it focusing on the natural ingredients like sandal, turmeric and milk of almonds, To position its product in the minds of the northern belt customers it had a Brand Ambassador, Saif who helped in changing the perception of the brand in the northern belt. This wasn’t that successful so the concentration shifted to the southern market. Since the returns were high only in the southern belt. It dominated the AP market because of the narrowness of its product range has been an advantage for it as it has been able to focus on fewer products. The new white Santoor also contributed in enhancing brand imagery and is also being liked for product per se.
Re?segmenting the market
In today’s sophisticated market, due to the presence of large number of players there is fierce competition. There are many companies targeting the same segment of the market. Hence after some period of time the effect of initial market segment will decline. In this case it is necessary to do a market research among the target group to find out what the customers exactly want. Hence, sometimes it may become necessary to re?segment the market, in order to remain competitive. Example: Indian Banking Sector The application of this concept can be found in Indian banking sector. Initially after liberalization in 1990, many private banks were given licenses. After this period the banking sector has been growing continuously. Large number of banks has come into existence since then. Most of these private banks are setup in urban areas and they target urban people. So there is fierce competition among banks. The banks
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Management Guru: Kenichi Ohmae
have tried to differentiate themselves from each other by providing many other sevices, but then too it has become necessary for them to target new segments. On the other hand, there are no banks available in rural areas. Indian being comprised mostly of villages this happens to be a large segment which can be exploited. Hence more and more banks are now moving towards rural areas so that they can cater needs of the rural customers. Example: Pidilite Industries Ltd products Since its inception in 1959, Pidilite Industries Limited has been a pioneer in consumer and specialities chemicals in India. Over two?third of the company’s sales come from products and segments it has pioneered in India. Their product range includes Adhesives and Sealants, Construction and Paint Chemicals, Automotive Chemicals, Art Materials, Industrial Adhesives, Industrial and Textile Resins and Organic Pigments and Preparations. Most of the products have been developed through strong in?house R&D. In 1959, when the company was established their main target market for adhesives were carpenter’s and other industries. In 1965, FEVICOL was established as carpenter’s preferred choice of synthetic adhesives. Due to the success of FEVICOL, many industries entered in the adhesive segment. This resulted in fierce competition in the adhesive market. Hence it became necessary for Pidilite to re?segment the market. At the same time there was high demand for adhesives especially glue which is used for domestic purposes and in schools. Hence Pidilite felt the need to explore this segment and introduced FEVICOL in the local market. After that it has been constantly gaining market share by differenting its product of the basis of price and size like introducing small sachets of 5, 10 Rs. etc.
Competitors
Strong and sustained differentiation vis?a?vis competitors, the core of competitor? based strategies, can be achieved as a result of a substantial advantage either in market coverage or in winning ratio deriving from any of a number of possible sources. Competitors based strategies can be constructed based on the following parameters:
• Power of image
Brands are more important than products. Products have limited life cycles, but brands ?? if managed well ?? last forever.
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Management Guru: Kenichi Ohmae
Example: 1) Apple Apple is one of the leading branding companies in the world. Marketing experts like Marc Gobe argue that Apple?s brand is the key to the company?s success. It?s got nothing to do with products like the iMac or iPod. The Apple brand has created such an impact that when we ask marketers and advertising experts why Mac users are so loyal, and they all cite the same reason: Apple?s brand and not because of the product. Apple, of course, is the archetypal emotional brand. It?s not just intimate with its customers; it is loved. Emotional brands have three things in common: • The company projects a humanistic corporate culture and a strong corporate ethic, characterized by volunteerism, support of good causes or involvement in the community. Apple comes across as profoundly humanist. • The company has a unique visual and verbal vocabulary, expressed in product design and advertising • The company has established a ?heartfelt connection? with its customers. This can take several forms, from building trust to establishing a community around a product. Apple designed its products around people. Apple has always projected a human touch. That?s what?s interesting about this brand. Somewhere they have created this really humanistic, beyond?business relationship with users and created a cult?like relationship with their brand. 2) Harley Davidson Founded in 1903, H?D was the only major American player in the global motorcycle market. It had served in every major war of the past 100 years and received four Navy ?E? awards4 for excellence in wartime production. It was the war veterans who started the H?D biker culture. Veterans returned home from war and bought H?D because they had fallen in love with the bike and the company when they were at war. They started riding H?D with strong American pride. To some it was a remembrance of their fellow soldiers who had perished for the freedom of Americans. From these bikers evolved the rough and tough breed of bikers with their leather jackets, tattoos, and long hair.
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Management Guru: Kenichi Ohmae
H?D built up a distinctive brand image and dominated the US motorcycle industry for many decades. H?D measured brand loyalty by the percentage of men and women who tattooed the company?s logo on their body. By that measure, H?D had the highest loyalty of any brand in the world. The most popular tattoo in the US was the H?D shield. Many H?D owners, even those who did not have tattoos, saw H?D as an important part of their identity. The experience of riding an HD, or even an association that came from wearing HD clothing, was a way for some to express their individuality. HD is now expanding its potential customer base by targeting younger segment and launching variety of models that appeal to that segment but its finding it difficult to penetrate into that market with an already created rough?tough image. • Capitalizing in profit and cost structure differences: The difference in source of profit might be exploited by new product sales, etc.. A difference in the ratio of fixed costs and variable costs might also be exploited strategically. A company with a lower fixed cost ratio can lower prices in a sluggish market and hence can gain market share. Few other ways of doing it are: • Giving marketing dominance over engineering • Earn while you grow • Accelerate the Product Life cycle Example: Big Bazaar Like many other super marts, Big Bazaar works with a low fixed cost ratio and it sells its products at the lowest possible price. This helps it to survive in the highly competitive market, raise its sales volume even though the prices are at the lowest and thus it gains a huge part of market share. It has given its marketing a huge dominance over engineering. It also follows the “Earn while you Grow” Strategy. Though multiple super marts offer the same line of products, what is important is how customer perceives that product and does he find value in the money he spends. Marketing by Big Bazaar on a grand scale does this job. Fashion Street Similarly, Fashion Street is one more example of a market where costs incurred are minimum which helps them to sell products at the best possible lowest price and
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Management Guru: Kenichi Ohmae
still enjoy a substantial amount of profit. The unorganized sector has an upper hand over the organized sector outlets like Reliance Retail or Bharti Walmart, and hence it takes advantage of this. Instead of concentrating on getting in new products all the time, this market concentrates on the latest needs of the customer and gives them their value for money type of products.
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Management Guru: Kenichi Ohmae
Application of Kenichi Ohmae’s 3C Model in the Marketing of Social Sector Organisations
It is our endeavour through this example to try and use learning from Kenichi Ohmae’s 3 C model. We have chosen to implement the 3C Model for the implementation of the marketing strategy for Pratham – an NGO. We utilise the 3 Cs – Corporation, Customer and Competition to prepare the marketing strategic plan. The principles from the Japanese “Win” Strategies and Hito?Kane?Mono have been adopted in this marketing strategy. Before proceeding with the details about the strategic plan, it is important to have a brief idea about Pratham, its mission, its activities and the current sources of funding.
Pratham
Introduction Pratham is the largest non?governmental organization working to provide quality education to the underprivileged children of India. Pratham was established in 1994 to provide pre?school education to the children in the slums of Mumbai city. Since then, the organization has grown both in scope and geographical coverage Today, Pratham reaches out to millions of children living in both rural and urban areas through a range of interventions. All the programs are designed to ensure that: 1. Enrolment in schools increases 2. Learning in schools and communities increases 3. The education net reaches children who are unable to attend school 4. Models are replicated and scaled up to serve large numbers of children to achieve scale impact. Mission To ensure “Every Child in School and Learning Well” Read India Pratham’s flagship program, “Read India”, helps to improve the reading, writing and basic arithmetic skills of the children in the age group of 6?14 years. Read India has created the largest nationwide impact and is already producing impressive results. In 2008?09, the campaign reached 33 million children across 19 states. It covered 305,000 out of the 600,000 villages of India and mobilized 450,000 volunteers. Over 600,000 teachers/ officials/ government workers have been trained.
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Management Guru: Kenichi Ohmae
Funding Pratham is a tripartite partnership between the government, citizens and corporations. Their work is supported by several national and international corporate like ICICI Bank, Reliance Industries, Citi Group, Johnson & Johnson, Piramal Group, etc., and multilateral foundations like UNICEF, World Bank, UNDP, UNESCO, American India Foundation and Paul Hamlyn Foundation. Pratham also has a strong presence internationally where overseas chapters in the US, UK, UAE and Germany help mobilize funds.
Objectives of the Strategy
• • To implement a stage?wise marketing strategy to build a brand image (awareness and trust) for Pratham To be devising strategies which provide value to promoters
Segmentation, Targeting, Differentiation, Positioning Strategy Segmentation
• Providing education to underprivileged children • Ensuring every child is ‘learning’
Target
• Management Students for Internships and Concurrent Projects • Corporations on the lookout for CSR activities that will provide value to their own brand • All students in schools and colleges in Mumbai
Differentiation
• Low costs for education (Rs. 1200/yr per child) • Simplicity of its programs to impart education and guage the level of learning • Award Winning Organization
Positioning
• An NGO dedicated to ensure that children are not just going to school, but also developing reading and learning abilities
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Management Guru: Kenichi Ohmae
The 3C Model
Corporation
Customer
Comparison
The 3C Model in Pratham’s Case
Pratham
Promoters, Public
Other NGOs, other CSR activities
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Ma anagement G Guru: Kenich Ohmae hi
The 3 3C Mod del: Questions r raised
Corpo oration
• • • • Marketing g Awareness Strategy y? How to pr rovide valu ue? How it will use prom moters as p partners to leverage i its own pos sition? tiveness of f the strate egy? Cost?effect
Custo omer
• • • • Why woul ld compan nies associa ate with Pr ratham? What valu ue does Pra atham offer them? Can Prath ham’s mark keting strat tegies bene efit its prom moters? How will Pratham b benefit thro ough aware eness camp paigns am mongst stud dents?
Comp petition (Compari ison with h other N NGOs and d CSR ac ctivities)
• Differentia ators?
Japan nese “W Win” Stra ategies
En nter Low w En nd of the Market
Expand t E to Me edium a and High End H ds
“Win Th he World”
ese “Win” Strategies s in Pratham’s Case Japane
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Management Guru: Kenichi Ohmae
Salient Features of the First Stage
• The first stage is the formation of the Joint Group (Pratham + Concurrent Projects, Internship students) to devise strategic plans for the marketing of Pratham. This stage would also include presenting seminars in management colleges. This helps us to create awareness about the activities of Pratham amongst the students. These activities also act as promoting tools for the internship programmes and concurrent projects with Pratham. Looking ahead to the future, these management students are going to assume corporate positions. So, it will aid them in making CSR decisions and allocation of funds to Pratham, since they would be aware of the functioning of Pratham and Pratham would be holding a brand image in their minds. The corporate tie?ups in this stage would be utilised to showcase banners in schools and colleges with the joint branding of Pratham and the respective company. These banners would be displayed during recruitment drives, cultural festivals, school functions, etc. The advertising campaign at this stage would be one that creates an impact through usage of smart colours and sentences, etc. such that the activities of Pratham and the areas where it functions come out clearly.
• • • •
•
• •
Execution Plan for First Stage (example)
Step 1 • Pratham organizes a guest lecture in TISS to explain its operations • Pratham signs up students for concurrent projects Step 2 • TISS Students prepare a database of target size of companies • They decide to target companies involved in recruiting Engineering graduates eg. Aker Solutions Step 3 • Aker Solutions endorses Pratham • Aker Solutions commences a recruitment drive in D.J.Sanghvi College of Engg.
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Management Guru: Kenichi Ohmae
• Pratham creates its own awareness using the platform provided by Aker Solutions • Pratham (in association with Aker Solutions) creates awareness • Aker Solutions also benefits through increased targeted visibility
Pratham
TISS
Joint Group
Joint Group *
Aker Solutions
D.J.Sanghvi Students
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Ma anagement G Guru: Kenich Ohmae hi
The example of t the banner r which Ak ker Solutio ons can use e along wit th Pratham m could be as sh hown belo ow.
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Management Guru: Kenichi Ohmae
T for Tongue
Not just bringing children to schools, But also………getting them taught
Supported By:
This will be of value to both the support institutes and partner companies in the following way: • Pratham’s needs are satisfied • Creates awareness of the company and builds its image among target groups: college students, women groups, etc • Implicit benefits: Awareness among future managers
Salient Features of the Second Stage
• • The second stage is the creation of mass brand consciousness for Pratham. This stage would include using social media tools such as newspaper articles, news channel documentaries, women’s magazines to bring to light soft issues addressed by Pratham such as women empowerment due to NGOs like Pratham, rescue of child labourers and educating them , etc. along with issues such as reading and learning ability statistics, Pratham’s vision for education. • • This medium would give Pratham legitimate certification of quality, accountability, and trust among the readers and audience. Simultaneously, Pratham’s advertising campaign would shift to educating the masses about the results obtained by Pratham.
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Execu ution Plan n for Second Stag ge (examp ple)
TH TIM HE MES OF INDIA F
Mumbai, S Sunday, Febr ruary 13, 2010 0
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‘READ I ‘ INDIA’? Making g India’s s Rural C Children n Read
Prat tham’s ‘Rea ad India’ – gaining g tprints in Ru ural foot India
Pratha am firmly believes s in workin ng with the govern nment to brin ng about large scale change and therefore our progra ams are aimed at supple ementing rather th han replac cing governmental efforts s. They have signe ed Memo orandums of Under rstanding with 8 st tate govern nments for our fla agship progra am ? Read India an nd are workin ng in close collabo oration with th he municipal corpora ations in several cities such as Mumbai and Delh hi m has also becom me a Pratham powerf ful voice in the area of educati ional reform. The Annual Status of Education Report (ASER) facilitated d by Pratham m is referred to by y the Central and State Govern nments for formula ating various s plans and policies s. Their se enior team leaders s are membe ers of important policy making g bodies both at th he Central and State levels, includin ng the Governing Council l of the Sarva Shik ksha Abhiyan
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Management Guru: Kenichi Ohmae
For a wonderful woman
May 2011
10 Simple tips for Safe Driving
NGO Empowerment Experience: A Pratham Story
The Success story of Small Town Business women
52% school children could read and do Maths in 2010
Now in 2012, 60% school children can read as well as do their Maths
Helping India Learn Well
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Management Guru: Kenichi Ohmae
Salient Features of the Third Stage
• By this stage, the awareness levels about Pratham and its activities would be high. Hence, Pratham would have established trust and brand image among the masses. Pratham can leverage its brand image and organise events such as marathons in college campuses, charity galas and mass donation drive weekends with various cultural events. Now, companies can sponsor entire projects and begin mass donation drives by activities like co?branding in products, print and electronic advertisements supporting the cause (other examples: Aircel Save our Tigers, Tata Tea Jaago Re)
•
•
Execution Plan for Third Stage (example)
FMCG / Service Providers: Here, Pratham can have a tie up some FMCG company or some service provider such as Idea, Vodafone, etc. For every FMCG product of the company that the customer buys some part of the revenue could be donated to Pratham for a social cause. For, say for example, Idea, on some special occasion as Children’s Day, they can share some part their revenue generated from the calls made by its users between 8 am to 8 pm. This helps the company in reaching hearts of its customers as well as raises funds for Pratham. Individual Donations: Online: Pratham can have provision on their website for the individuals to donate online where they can have an account in a bank and a gateway which will facilitate the entire process. Online donations could also be done by tying up with book stores like Crossword or website wherein an individual places order for a book like flipcart.com. Here, the individual when he is ordering any book online could also donate some funds for Pratham. For example, when the individual orders for book costing Rs. 142, there should be an option available to round off the figure to the nearest value i.e. Rs. 150. The additional Rs. 8 will be given to Pratham. Here, also other option could be given if the individual wants to donate more.
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Events s: Here, a as can be se een from th he market research p people are really keen n on partic cipating most o of the even nts organized by an N NGO as th here is no m major diffe erence in a any two events. . The event ts that cou uld be organised coul ld be like: • Exhibition ns can be h held by the NGOs to s sell products like bag gs, folders, , pouch etc. which h are made of environ nment frien ndly mater rial. • Organizin events l ng like marath hon, book fair witho being glamorous about out s these thing gs and thu us protect t the serious s image. Th hese exhibi itions / eve ents are basically c carried ou in tande with schools, co ut em s olleges and corporat This d te. helps the NGO to g generate re evenues fo their var or ried projec and sh cts howcase their talen nt pool. ng ya an etc. to for rm an em motional • Organizin events like Sathy Naraya puja e bondage w with the Vo olunteers. T This helps them reac ch the mass ses. (rural) ) • Printing calendars w with logos and missi of the NGO. Thi helps th NGO ion is he common m man and sp pread awar reness abou ut their cau use. reach the c • Organising a fund r raising eve ent like Do onation Dri ive or Auc ctions of pr roducts made by th hose children. Organising a a Marathon n Pratham O
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Management Guru: Kenichi Ohmae
Hito?Kane?Mono Mono
The First Step (First Stage) of the Marketing Strategy is the understanding of the things related to the operations of Pratham. It includes the formation of the team (in this case, machinery) for execution of the plan. Hito The Second Step (First Stage) of the Marketing Strategy is utilisation of the creative ideas of the Joint Group to identify the companies which are potential promoters and implement plans to associate them with Pratham. The Joint Group also finds ways to provide value to the existing promoters. Kane Then, after making corporations associate with Pratham, the money that flows in as revenues is utilized to fund Pratham’s core functions and move on to the next stage of the marketing strategy.
The 3C Model: Solutions offered
Corporation
• Decisive Edge that Pratham has: 1. Pratham’s effectiveness in improving the reading and learning abilities 2. The simplicity of implementation 3. Its unblemished record of being a trustworthy and award winning organization 4. High proportion of revenue earnings into core operations (about 97%) Strategy – 3 stage (as described above) Cost?effectiveness: conservative in the beginning, increasing costs only when increased funding is guaranteed
• •
Customer
• • Value in the form of branding, co?branding activities, targeted marketing (eg. Pratham ads supported by Fair and Lovely Foundation in women’s colleges) Students internships and concurrent project certificates, field work learning in one of the toughest sectors for marketing
Comparatives
Differentiators? • Promoter value • Transparency in workings (balance sheet and project reports on website) • Organizational vision as a transparent and accountable organization
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doc_707336880.pdf
This describes the 3C's model of kenichi ohmae and it includes the topics like Introduction to 3C model Corporation, Customer and Competitors. Application of 3C model to Pratham NGO. Vodofone, Nelco Ltd, Gujarat Amubujha Cement, Maruti Suzuki, Just Dial, Mont Blac, Santoor, Pidilite Industries, Apple, Harley Davidson, Big bazaar.
MANAGEMENT GURUS
Management Guru: Kenichi Ohmae
THE 3C?S MODEL OF KENICHI OHMAE
1 April, 2010
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Management Guru: Kenichi Ohmae
SR. NO.
TOPICS INTRODUCTION TO 3C MODEL CORPORATION ? SELECTIVITY & SEQUENCING EG. VODAFONE ? MAKE OR BUY EG. NELCO LTD. ? COST EFFECTIVENESS EG. GUJARAT AMBUJA CEMENT LTD. ? JAPANESE “WIN” STRATEGIES EG. MARUTI SUZUKI LTD. EG. JUST DIAL CUSTOMER ? SEGMENTATION BY OBJECTIVES EG. MONT BLANC ? SEGMENTATION BY COVERAGE EG. SANTOOR ? RE SEGMENTING THE MARKET EG. INDIAN BANKING SECTOR EG. PIDILITE INDUSTRIES COMPETITORS ? POWER OF IMAGE EG. APPLE EG. HARLEY DAVIDSON ? CAPITALISING IN PROFIT & COST STRUCTURE DIFFERENCES EG. BIG BAZAAR EG. FASHION STREET APPLICATION OF 3C MODEL (PRATHAM ? NGO) ? PRATHAM ? OBJECTIVES OF THE STRATEGY ? STDP ? THE 3C MODEL IN PRATHAM’S CASE ? THE 3C MODEL: QUESTIONS RAISED ? JAPANESE WIN STRATEGIES IN PRATHAM’S CASE ? FIRST STAGE OF THE MARKETING STRATEGY FOR PRATHAM
? SECOND STAGE OF THE MARKETING STRATEGY FOR PRATHAM
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THIRD STAGE OF THE MARKETING STRATEGY FOR PRATHAM HITO KANE MONO THE 3C MODEL: SOLUTIONS OFFERED
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Management Guru: Kenichi Ohmae
INTRODUCTION TO THE 3CS MODEL
Kenichi Ohmae (born February 21, 1943) is one of the world?s leading business and corporate strategists. He is known as Mr. Strategy and has developed the 3C?s Model. Described as ?Mr. Strategy? worldwide, Dr. Kenichi Ohmae is regularly sought out as a public speaker and management consultant. Ohmae, according to the Financial Times of London, is ?Japan?s only management guru.? The 3C?s Model is a strategic look at the factors needed for success. It was developed by Kenichi Ohmae, a business and corporate strategist. The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account:
• A. The Corporation • B. The Customer • C. The Competitors
Only by integrating these three C’s (Corporation, Customer, Competitors) in a strategic triangle, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle.
The Corporation
Corporate?based strategies are functional in nature. They aim to maximize the corporation?s strengths relative to competition in key functional areas. Once customers? needs and objectives are analyzed and understood corporate strategy will normally be designed to meet them in the most cost?effective way. But competition will soon discover what the corporation is doing and follow suit. When this happens, the way to survive and stay profitable is to be much stronger than the competition in the key functions. This can be achieved in following way:
1) Selectivity and Sequencing
a. The corporation does not have to lead in every function to win. b. If it can gain decisive edge in one key function, it will eventually be able to improve its other functions which are now average.
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Management Guru: Kenichi Ohmae
Example: Vodafone Vodafone, a mobile service provider company has very strong marketing department. After successfully rebranding ?Hutch? as ?Vodafone?, Vodafone Essar started expanding its presence in India. The company used almost all media channels to advertise its services. It not only advertised on television, but also in newspapers, the radio, and on hoardings across the country. In April 2009, it launched an innovative advertising campaign that caught the imagination of both the public and advertising experts. The campaign, focusing on the different value added services (VAS) offered by the company, introduced new characters called the Zoozoos. Several advertisements in which the Zoozoos featured were shown on television during the Indian Premier League (IPL) Season 2. Vodafone’s success in such an oligopolistic cellular market is evident and can be attributed to the unique and innovative egg?shaped Zoozoos characters that were created during the IPL Season 2 (May 2009). The ad gained immense popularity that elevated Vodafone’s brand image to greater heights in an industry where other cellular providers had celebrities endorsing their brands. The ad was indeed an advertising genius. The company’s quarterly results reveal that revenues did increase in the quarter ended June 30, 2009 by 9.3% to £10.7b. As this example suggests, as Vodafone’s main functional unit is providing services. But it has strongly built its marketing department, which in turn has provided good financial returns.
2. Make or Buy
a. In case of rapidly rising wage costs, it becomes a critical decision for a company to subcontract a major share of its assembly operations. b. If its competitors are unable to shift production so rapidly to subcontractors and vendors, the resulting difference in cost structure and/ or in the company’s ability to cope with demand fluctuations may have significant strategic implications. Example: Nelco Limited NELCO LIMITED, established in 1940, a part of the leading business house?The TATA Group, is focused on system integration and product management for
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Management Guru: Kenichi Ohmae
industrial controls, power, electronics, defence electronics, satellite communication and automation. Apart from the core expertise of the Tatanet division, Nelco specializes in the areas of security and surveillance for Defence and Civil applications, Traction, Electronics for Locomotives, Turnkey projects involving SCADA; AC and DC drives; as well as Real time and Embedded software. Nelco’s designs PCB (Printed Circuit Board) which is its core competency and then outsources PCB making to smaller manufacturers. Thus it reduces the cost of manufacturing and staff requirement.
3. Cost?Effectiveness
a. Improving the cost?effectiveness can be done in three ways: b. First by reducing basic costs, c. Second by exercising greater selectivity (orders accepted, products offered, functions performed) d. Third by sharing certain key functions with a corporation’s other businesses or even other companies. Example: Gujarat Ambuja Cement Ltd Consider an example of Gujarat Ambuja Cement which has successfully improved its cost effectiveness and had resulted in positive growth. Gujarat Ambuja Cements Ltd was set up in 1986 with the commencement of commercial production at its 2 million tonne plant in Chandrapur, Maharashtra. The company has a market share of around 10 per cent, with a strong foothold in the northern and western markets. Gujarat Ambuja is India?s largest cement exporter and one of the most cost efficient firms. Cost Effective Strategies • Capacity Utilization: Since the industry operates on fixed cost, higher the capacity sold, the wider the cost distributed on the same base. Working on this principle, GACL increased its capacity production and thus achieved economies of scale.
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• Pow wer: The ce ement indu ustry is en nergy inten nsive in na ature and thus powe costs er form the most critical c m cost compo onent in cement ma c anufacturin (about 30% to ng total l expenses). Higher t the captive e power consumption n of the com mpany, the better it is for the co ompany. G GACL estab blished its own capti ive power plant in o order to uce r s rce eaper and resulted in uninter rrupted redu power costs, as this sour is che supp ply of pow wer. • Freight: Since cement is a bulk co s ommodity transporting is a c y, costly affai (over ir 15% %). Plants lo ocated in c coastal bel lts find it m much chea aper to tran nsport cem ment by the sea route in order t cater to the coast markets such as Mumbai and the to o tal s a state es of Gujar rat and Tam mil Nadu. GACL rou uted its tran nsport of r raw materi ials and finis shed goods s through s sea. This re educed the eir freight c charges co onsiderably y.
Japan nese “Win n” Strateg gies
ple: Maruti Suzuki Lt td. Examp Maruti 800, the n i name most common for a mid n ddle class I Indians an the only car in nd y the A1 Segment c category. It served as s cash cow w of MUL fo or nearly 1 17 years. It started off wit th a low co ost car with h Maruti 8 800 and gra adually inc creased its s product o offering to high end us her sers. It then came ou with its A2 segme cars “Z n ut ent Zen” and “Wagon “ R”. It l later launc ched “Este eem” to ca ater to A3 segment. It gradually unveile new ed models s for A2 se egments an nd even la aunched Se edan SX4 f for A3 segm ment. It launched OMNI and Versa a for C segm ment.
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ple: Just Dia al Examp Just Dial is Indi ia’s no.1 lo ocal search destinat h tion. The c company c caters to over 25 o million unique u n users spre ead across 240 cities in India This uni s a. ique local search service e is availab ble on Phon ne, Web, W WAP and SM MS. 1) Just Dial starte ed its opera ations in 1996 with te elephone b based searc ch service. 3.2007: Internet Service 2) 14.03 Following the succe of the t g ess telephone based sea arch service they exp e; panded their se ervices to reach use via mu ers ultiple tool which w ls, would ma local searches ake conven nient, fast, and highly y accurate for consum mers. With h the prolif feration of mobile phones and the Internet, they launc s ched a loc search engine w cal www.JustD Dial.com which aims to m make local search info ormation available a the click of a butto The a at k on. as started f for 14 cities s of India. online service wa AP Service 3) 16.08.2007 WA Just Dial launched of the fastest local sear d l rch engin on Mo ne obile – wap.justdial.com. Th was for the people who are on the m his r e move and need to nhttp://w access to informa ation instan ntly. 4) 15.11.2007 SMS Service In a bid to o offer furt ther custom mization a after launch hing its W WAP site, Ju ust Dial Service es announc ces SMS Se earch. All t they need do is send d a text message to th he short code, fr rom their m mobile pho ones.
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5) Just Dial is in advanced stages of launching its local search service in North America on a toll free number ?1?800?justdial?. Going forward the company intends to leverage the Just Dial brand and know?how for an international franchise.
Customer
In a free economy, any given market inevitably becomes heterogeneous, since each customer group will tend to want a slightly different service or product. Moreover, the corporation cannot reach out to all customers with equal effectiveness, and therefore it needs to distinguish the easily accessible customer groups from the hard? to?reach ones. Finally, the competitor?s abilities to respond to customer needs and to cover different customer groups will differ from those of the corporation. These are the reasons why the corporation must segment the market in order to establish a strategic edge over its competition. Fine structure within the customer group offers the opportunity to establish this kind of differentiation. There are two ways in which differentiation is done segmenting by objectives and segmenting by coverage.
• Segmentation by Objectives
In segmentation by objectives, differentiation is done based of the different ways that various customers use a product. Hence it becomes necessary for the corporations to design the product to cater the needs of that particular group of consumers. Example: Mont Blanc The Mont Blanc pen is used by different customers in different ways. Although the basic objective of the pen is to serve the purpose of writing, it is largely used for gifting purposes. The company has also designed the packaging of the pen in such a way that the consumers perceive it as luxury product. Also it is used by many as signature pen and not for writing purposes. This adds another dimension to the objective function of the pen. Some group of customers also consider them as jewelry pens and hence the company has come out with diamond studded and gem studded pen to cater to this particular objective of that particular segment.
• Segmentation by Coverage
Another mode of segmenting the market may arise from the corporation?s own circumstances known as segmentation by market coverage. Even when a large group
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(or subgroup) of the customers share identical wants and needs, the corporation?s ability to serve them all may be constrained by limited resources, by gaps in the market coverage relative to competition, or by the cost of serving a fragmented market at a price acceptable to the customers ? who, if the price were too high, could always go without or resort to an alternative. This segmentation usually arises from trade?off study of marketing costs v/s marketing coverage. Example: Santoor The company has spent large amount of money behind its marketing and promotional activities in the Northern as well as Southern belt. It projected its product as a natural product and advertised it focusing on the natural ingredients like sandal, turmeric and milk of almonds, To position its product in the minds of the northern belt customers it had a Brand Ambassador, Saif who helped in changing the perception of the brand in the northern belt. This wasn’t that successful so the concentration shifted to the southern market. Since the returns were high only in the southern belt. It dominated the AP market because of the narrowness of its product range has been an advantage for it as it has been able to focus on fewer products. The new white Santoor also contributed in enhancing brand imagery and is also being liked for product per se.
Re?segmenting the market
In today’s sophisticated market, due to the presence of large number of players there is fierce competition. There are many companies targeting the same segment of the market. Hence after some period of time the effect of initial market segment will decline. In this case it is necessary to do a market research among the target group to find out what the customers exactly want. Hence, sometimes it may become necessary to re?segment the market, in order to remain competitive. Example: Indian Banking Sector The application of this concept can be found in Indian banking sector. Initially after liberalization in 1990, many private banks were given licenses. After this period the banking sector has been growing continuously. Large number of banks has come into existence since then. Most of these private banks are setup in urban areas and they target urban people. So there is fierce competition among banks. The banks
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have tried to differentiate themselves from each other by providing many other sevices, but then too it has become necessary for them to target new segments. On the other hand, there are no banks available in rural areas. Indian being comprised mostly of villages this happens to be a large segment which can be exploited. Hence more and more banks are now moving towards rural areas so that they can cater needs of the rural customers. Example: Pidilite Industries Ltd products Since its inception in 1959, Pidilite Industries Limited has been a pioneer in consumer and specialities chemicals in India. Over two?third of the company’s sales come from products and segments it has pioneered in India. Their product range includes Adhesives and Sealants, Construction and Paint Chemicals, Automotive Chemicals, Art Materials, Industrial Adhesives, Industrial and Textile Resins and Organic Pigments and Preparations. Most of the products have been developed through strong in?house R&D. In 1959, when the company was established their main target market for adhesives were carpenter’s and other industries. In 1965, FEVICOL was established as carpenter’s preferred choice of synthetic adhesives. Due to the success of FEVICOL, many industries entered in the adhesive segment. This resulted in fierce competition in the adhesive market. Hence it became necessary for Pidilite to re?segment the market. At the same time there was high demand for adhesives especially glue which is used for domestic purposes and in schools. Hence Pidilite felt the need to explore this segment and introduced FEVICOL in the local market. After that it has been constantly gaining market share by differenting its product of the basis of price and size like introducing small sachets of 5, 10 Rs. etc.
Competitors
Strong and sustained differentiation vis?a?vis competitors, the core of competitor? based strategies, can be achieved as a result of a substantial advantage either in market coverage or in winning ratio deriving from any of a number of possible sources. Competitors based strategies can be constructed based on the following parameters:
• Power of image
Brands are more important than products. Products have limited life cycles, but brands ?? if managed well ?? last forever.
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Management Guru: Kenichi Ohmae
Example: 1) Apple Apple is one of the leading branding companies in the world. Marketing experts like Marc Gobe argue that Apple?s brand is the key to the company?s success. It?s got nothing to do with products like the iMac or iPod. The Apple brand has created such an impact that when we ask marketers and advertising experts why Mac users are so loyal, and they all cite the same reason: Apple?s brand and not because of the product. Apple, of course, is the archetypal emotional brand. It?s not just intimate with its customers; it is loved. Emotional brands have three things in common: • The company projects a humanistic corporate culture and a strong corporate ethic, characterized by volunteerism, support of good causes or involvement in the community. Apple comes across as profoundly humanist. • The company has a unique visual and verbal vocabulary, expressed in product design and advertising • The company has established a ?heartfelt connection? with its customers. This can take several forms, from building trust to establishing a community around a product. Apple designed its products around people. Apple has always projected a human touch. That?s what?s interesting about this brand. Somewhere they have created this really humanistic, beyond?business relationship with users and created a cult?like relationship with their brand. 2) Harley Davidson Founded in 1903, H?D was the only major American player in the global motorcycle market. It had served in every major war of the past 100 years and received four Navy ?E? awards4 for excellence in wartime production. It was the war veterans who started the H?D biker culture. Veterans returned home from war and bought H?D because they had fallen in love with the bike and the company when they were at war. They started riding H?D with strong American pride. To some it was a remembrance of their fellow soldiers who had perished for the freedom of Americans. From these bikers evolved the rough and tough breed of bikers with their leather jackets, tattoos, and long hair.
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Management Guru: Kenichi Ohmae
H?D built up a distinctive brand image and dominated the US motorcycle industry for many decades. H?D measured brand loyalty by the percentage of men and women who tattooed the company?s logo on their body. By that measure, H?D had the highest loyalty of any brand in the world. The most popular tattoo in the US was the H?D shield. Many H?D owners, even those who did not have tattoos, saw H?D as an important part of their identity. The experience of riding an HD, or even an association that came from wearing HD clothing, was a way for some to express their individuality. HD is now expanding its potential customer base by targeting younger segment and launching variety of models that appeal to that segment but its finding it difficult to penetrate into that market with an already created rough?tough image. • Capitalizing in profit and cost structure differences: The difference in source of profit might be exploited by new product sales, etc.. A difference in the ratio of fixed costs and variable costs might also be exploited strategically. A company with a lower fixed cost ratio can lower prices in a sluggish market and hence can gain market share. Few other ways of doing it are: • Giving marketing dominance over engineering • Earn while you grow • Accelerate the Product Life cycle Example: Big Bazaar Like many other super marts, Big Bazaar works with a low fixed cost ratio and it sells its products at the lowest possible price. This helps it to survive in the highly competitive market, raise its sales volume even though the prices are at the lowest and thus it gains a huge part of market share. It has given its marketing a huge dominance over engineering. It also follows the “Earn while you Grow” Strategy. Though multiple super marts offer the same line of products, what is important is how customer perceives that product and does he find value in the money he spends. Marketing by Big Bazaar on a grand scale does this job. Fashion Street Similarly, Fashion Street is one more example of a market where costs incurred are minimum which helps them to sell products at the best possible lowest price and
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Management Guru: Kenichi Ohmae
still enjoy a substantial amount of profit. The unorganized sector has an upper hand over the organized sector outlets like Reliance Retail or Bharti Walmart, and hence it takes advantage of this. Instead of concentrating on getting in new products all the time, this market concentrates on the latest needs of the customer and gives them their value for money type of products.
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Management Guru: Kenichi Ohmae
Application of Kenichi Ohmae’s 3C Model in the Marketing of Social Sector Organisations
It is our endeavour through this example to try and use learning from Kenichi Ohmae’s 3 C model. We have chosen to implement the 3C Model for the implementation of the marketing strategy for Pratham – an NGO. We utilise the 3 Cs – Corporation, Customer and Competition to prepare the marketing strategic plan. The principles from the Japanese “Win” Strategies and Hito?Kane?Mono have been adopted in this marketing strategy. Before proceeding with the details about the strategic plan, it is important to have a brief idea about Pratham, its mission, its activities and the current sources of funding.
Pratham
Introduction Pratham is the largest non?governmental organization working to provide quality education to the underprivileged children of India. Pratham was established in 1994 to provide pre?school education to the children in the slums of Mumbai city. Since then, the organization has grown both in scope and geographical coverage Today, Pratham reaches out to millions of children living in both rural and urban areas through a range of interventions. All the programs are designed to ensure that: 1. Enrolment in schools increases 2. Learning in schools and communities increases 3. The education net reaches children who are unable to attend school 4. Models are replicated and scaled up to serve large numbers of children to achieve scale impact. Mission To ensure “Every Child in School and Learning Well” Read India Pratham’s flagship program, “Read India”, helps to improve the reading, writing and basic arithmetic skills of the children in the age group of 6?14 years. Read India has created the largest nationwide impact and is already producing impressive results. In 2008?09, the campaign reached 33 million children across 19 states. It covered 305,000 out of the 600,000 villages of India and mobilized 450,000 volunteers. Over 600,000 teachers/ officials/ government workers have been trained.
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Management Guru: Kenichi Ohmae
Funding Pratham is a tripartite partnership between the government, citizens and corporations. Their work is supported by several national and international corporate like ICICI Bank, Reliance Industries, Citi Group, Johnson & Johnson, Piramal Group, etc., and multilateral foundations like UNICEF, World Bank, UNDP, UNESCO, American India Foundation and Paul Hamlyn Foundation. Pratham also has a strong presence internationally where overseas chapters in the US, UK, UAE and Germany help mobilize funds.
Objectives of the Strategy
• • To implement a stage?wise marketing strategy to build a brand image (awareness and trust) for Pratham To be devising strategies which provide value to promoters
Segmentation, Targeting, Differentiation, Positioning Strategy Segmentation
• Providing education to underprivileged children • Ensuring every child is ‘learning’
Target
• Management Students for Internships and Concurrent Projects • Corporations on the lookout for CSR activities that will provide value to their own brand • All students in schools and colleges in Mumbai
Differentiation
• Low costs for education (Rs. 1200/yr per child) • Simplicity of its programs to impart education and guage the level of learning • Award Winning Organization
Positioning
• An NGO dedicated to ensure that children are not just going to school, but also developing reading and learning abilities
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 15
Management Guru: Kenichi Ohmae
The 3C Model
Corporation
Customer
Comparison
The 3C Model in Pratham’s Case
Pratham
Promoters, Public
Other NGOs, other CSR activities
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 16
Ma anagement G Guru: Kenich Ohmae hi
The 3 3C Mod del: Questions r raised
Corpo oration
• • • • Marketing g Awareness Strategy y? How to pr rovide valu ue? How it will use prom moters as p partners to leverage i its own pos sition? tiveness of f the strate egy? Cost?effect
Custo omer
• • • • Why woul ld compan nies associa ate with Pr ratham? What valu ue does Pra atham offer them? Can Prath ham’s mark keting strat tegies bene efit its prom moters? How will Pratham b benefit thro ough aware eness camp paigns am mongst stud dents?
Comp petition (Compari ison with h other N NGOs and d CSR ac ctivities)
• Differentia ators?
Japan nese “W Win” Stra ategies
En nter Low w En nd of the Market
Expand t E to Me edium a and High End H ds
“Win Th he World”
ese “Win” Strategies s in Pratham’s Case Japane
Group N 1 - Anuja Shah (141), Bhaumik Sh (142), No: a hah Bhavik S Shah (143), C Chintan Shah (144), Hiral Vakharia (158) h Page 17
Management Guru: Kenichi Ohmae
Salient Features of the First Stage
• The first stage is the formation of the Joint Group (Pratham + Concurrent Projects, Internship students) to devise strategic plans for the marketing of Pratham. This stage would also include presenting seminars in management colleges. This helps us to create awareness about the activities of Pratham amongst the students. These activities also act as promoting tools for the internship programmes and concurrent projects with Pratham. Looking ahead to the future, these management students are going to assume corporate positions. So, it will aid them in making CSR decisions and allocation of funds to Pratham, since they would be aware of the functioning of Pratham and Pratham would be holding a brand image in their minds. The corporate tie?ups in this stage would be utilised to showcase banners in schools and colleges with the joint branding of Pratham and the respective company. These banners would be displayed during recruitment drives, cultural festivals, school functions, etc. The advertising campaign at this stage would be one that creates an impact through usage of smart colours and sentences, etc. such that the activities of Pratham and the areas where it functions come out clearly.
• • • •
•
• •
Execution Plan for First Stage (example)
Step 1 • Pratham organizes a guest lecture in TISS to explain its operations • Pratham signs up students for concurrent projects Step 2 • TISS Students prepare a database of target size of companies • They decide to target companies involved in recruiting Engineering graduates eg. Aker Solutions Step 3 • Aker Solutions endorses Pratham • Aker Solutions commences a recruitment drive in D.J.Sanghvi College of Engg.
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158)
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Management Guru: Kenichi Ohmae
• Pratham creates its own awareness using the platform provided by Aker Solutions • Pratham (in association with Aker Solutions) creates awareness • Aker Solutions also benefits through increased targeted visibility
Pratham
TISS
Joint Group
Joint Group *
Aker Solutions
D.J.Sanghvi Students
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 19
Ma anagement G Guru: Kenich Ohmae hi
The example of t the banner r which Ak ker Solutio ons can use e along wit th Pratham m could be as sh hown belo ow.
Group N 1 - Anuja Shah (141), Bhaumik Sh (142), No: a hah Bhavik S Shah (143), C Chintan Shah (144), Hiral Vakharia (158) h
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Management Guru: Kenichi Ohmae
T for Tongue
Not just bringing children to schools, But also………getting them taught
Supported By:
This will be of value to both the support institutes and partner companies in the following way: • Pratham’s needs are satisfied • Creates awareness of the company and builds its image among target groups: college students, women groups, etc • Implicit benefits: Awareness among future managers
Salient Features of the Second Stage
• • The second stage is the creation of mass brand consciousness for Pratham. This stage would include using social media tools such as newspaper articles, news channel documentaries, women’s magazines to bring to light soft issues addressed by Pratham such as women empowerment due to NGOs like Pratham, rescue of child labourers and educating them , etc. along with issues such as reading and learning ability statistics, Pratham’s vision for education. • • This medium would give Pratham legitimate certification of quality, accountability, and trust among the readers and audience. Simultaneously, Pratham’s advertising campaign would shift to educating the masses about the results obtained by Pratham.
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 21
Ma anagement G Guru: Kenich Ohmae hi
Execu ution Plan n for Second Stag ge (examp ple)
TH TIM HE MES OF INDIA F
Mumbai, S Sunday, Febr ruary 13, 2010 0
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‘READ I ‘ INDIA’? Making g India’s s Rural C Children n Read
Prat tham’s ‘Rea ad India’ – gaining g tprints in Ru ural foot India
Pratha am firmly believes s in workin ng with the govern nment to brin ng about large scale change and therefore our progra ams are aimed at supple ementing rather th han replac cing governmental efforts s. They have signe ed Memo orandums of Under rstanding with 8 st tate govern nments for our fla agship progra am ? Read India an nd are workin ng in close collabo oration with th he municipal corpora ations in several cities such as Mumbai and Delh hi m has also becom me a Pratham powerf ful voice in the area of educati ional reform. The Annual Status of Education Report (ASER) facilitated d by Pratham m is referred to by y the Central and State Govern nments for formula ating various s plans and policies s. Their se enior team leaders s are membe ers of important policy making g bodies both at th he Central and State levels, includin ng the Governing Council l of the Sarva Shik ksha Abhiyan
Group N 1 - Anuja Shah (141), Bhaumik Sh (142), No: a hah Bhavik S Shah (143), C Chintan Shah (144), Hiral Vakharia (158) h
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Management Guru: Kenichi Ohmae
For a wonderful woman
May 2011
10 Simple tips for Safe Driving
NGO Empowerment Experience: A Pratham Story
The Success story of Small Town Business women
52% school children could read and do Maths in 2010
Now in 2012, 60% school children can read as well as do their Maths
Helping India Learn Well
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 23
Management Guru: Kenichi Ohmae
Salient Features of the Third Stage
• By this stage, the awareness levels about Pratham and its activities would be high. Hence, Pratham would have established trust and brand image among the masses. Pratham can leverage its brand image and organise events such as marathons in college campuses, charity galas and mass donation drive weekends with various cultural events. Now, companies can sponsor entire projects and begin mass donation drives by activities like co?branding in products, print and electronic advertisements supporting the cause (other examples: Aircel Save our Tigers, Tata Tea Jaago Re)
•
•
Execution Plan for Third Stage (example)
FMCG / Service Providers: Here, Pratham can have a tie up some FMCG company or some service provider such as Idea, Vodafone, etc. For every FMCG product of the company that the customer buys some part of the revenue could be donated to Pratham for a social cause. For, say for example, Idea, on some special occasion as Children’s Day, they can share some part their revenue generated from the calls made by its users between 8 am to 8 pm. This helps the company in reaching hearts of its customers as well as raises funds for Pratham. Individual Donations: Online: Pratham can have provision on their website for the individuals to donate online where they can have an account in a bank and a gateway which will facilitate the entire process. Online donations could also be done by tying up with book stores like Crossword or website wherein an individual places order for a book like flipcart.com. Here, the individual when he is ordering any book online could also donate some funds for Pratham. For example, when the individual orders for book costing Rs. 142, there should be an option available to round off the figure to the nearest value i.e. Rs. 150. The additional Rs. 8 will be given to Pratham. Here, also other option could be given if the individual wants to donate more.
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 24
Ma anagement G Guru: Kenich Ohmae hi
Events s: Here, a as can be se een from th he market research p people are really keen n on partic cipating most o of the even nts organized by an N NGO as th here is no m major diffe erence in a any two events. . The event ts that cou uld be organised coul ld be like: • Exhibition ns can be h held by the NGOs to s sell products like bag gs, folders, , pouch etc. which h are made of environ nment frien ndly mater rial. • Organizin events l ng like marath hon, book fair witho being glamorous about out s these thing gs and thu us protect t the serious s image. Th hese exhibi itions / eve ents are basically c carried ou in tande with schools, co ut em s olleges and corporat This d te. helps the NGO to g generate re evenues fo their var or ried projec and sh cts howcase their talen nt pool. ng ya an etc. to for rm an em motional • Organizin events like Sathy Naraya puja e bondage w with the Vo olunteers. T This helps them reac ch the mass ses. (rural) ) • Printing calendars w with logos and missi of the NGO. Thi helps th NGO ion is he common m man and sp pread awar reness abou ut their cau use. reach the c • Organising a fund r raising eve ent like Do onation Dri ive or Auc ctions of pr roducts made by th hose children. Organising a a Marathon n Pratham O
Group N 1 - Anuja Shah (141), Bhaumik Sh (142), No: a hah Bhavik S Shah (143), C Chintan Shah (144), Hiral Vakharia (158) h Page 25
Management Guru: Kenichi Ohmae
Hito?Kane?Mono Mono
The First Step (First Stage) of the Marketing Strategy is the understanding of the things related to the operations of Pratham. It includes the formation of the team (in this case, machinery) for execution of the plan. Hito The Second Step (First Stage) of the Marketing Strategy is utilisation of the creative ideas of the Joint Group to identify the companies which are potential promoters and implement plans to associate them with Pratham. The Joint Group also finds ways to provide value to the existing promoters. Kane Then, after making corporations associate with Pratham, the money that flows in as revenues is utilized to fund Pratham’s core functions and move on to the next stage of the marketing strategy.
The 3C Model: Solutions offered
Corporation
• Decisive Edge that Pratham has: 1. Pratham’s effectiveness in improving the reading and learning abilities 2. The simplicity of implementation 3. Its unblemished record of being a trustworthy and award winning organization 4. High proportion of revenue earnings into core operations (about 97%) Strategy – 3 stage (as described above) Cost?effectiveness: conservative in the beginning, increasing costs only when increased funding is guaranteed
• •
Customer
• • Value in the form of branding, co?branding activities, targeted marketing (eg. Pratham ads supported by Fair and Lovely Foundation in women’s colleges) Students internships and concurrent project certificates, field work learning in one of the toughest sectors for marketing
Comparatives
Differentiators? • Promoter value • Transparency in workings (balance sheet and project reports on website) • Organizational vision as a transparent and accountable organization
Group No: 1 - Anuja Shah (141), Bhaumik Shah (142), Bhavik Shah (143), Chintan Shah (144), Hiral Vakharia (158) Page 26
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