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MarkStrat
Industry Gorilla - Team Lexis
Sonite   Launched in Period   Target Segment   Market share - Value Market share - Unit   Rec. retail price   Base Cost




LOCK             0                Savers              3.1%                 4.7%                 195             116



LOHA             4             High Earners           3.2%                 1.8%                 500             188



LOOP             0             Professionals          3.9%                 2.6%                 435             197



LOOT             8               Shoppers             2.4%                 2.9%                 245             163



LOSH             3               Shoppers             9.5%                12.6%                 225             111


                                                                                                                          2
MARKET :   Launched in   Market share -   Market share -
                                                           Rec. retail price   Base Cost
VODITES      Period         Value             Unit


 LELI          7             11.2%            10.5%              990             373


 LELO          8             0.9%             0.7%              1,259            373




                                                                                           3
4
TEAM L-SPI

                                    1493
               1290   1362   1380
                                           1320     1383     1425
        1151
 1000




Period Period
  0           Period Period
         1      2           Period Period
                       3      4           Period
                                     5             Period
                                            6               Period
                                                     7
                                                              8

                                                                     5
•   SPI:1151                             2 products – Lock & Loop
           •   Earning before Taxes: 18456   Loop($500) – Target Professionals
           •   Advertising: 4916K$                  Lock($250) -- Target Savers
Period 1   •   Commercial Team Cost: 1332$




           • SPI:1290                             Invested in LOSH– A product for Shoppers
           • Earning before Taxes:23476
           • Advertising: 4080K$
           • Commercial Team Cost: 1290K$         Made our first mistake!!
Period2    • R&D : 1250



                                                                                                       Analysis &
           •SPI:1362
           •Earning before Taxes:23534
                                                     Launched LOSH -$240
                                                     Invested in LOHA – A product for High Earners
                                                                                                       Strategies
           •Advertising : 5640K$                       Loop -$485
           •Commercial Team Cost: 1921$                Lock - $210 Reduced Price
Period3    •R&D: 1110                                  Price Race on




           • SPI: 1380                            LOHA launched- $500
           • Earning before Taxes:20285           Loop- $435
           • Advertising: 5649K$                  Lock - $195
           • Commercial Team Cost: 2796K$         Losh - $230 – Focus on one product
Period 4   • R&D : 2945                           Invested in LELI – Our Vodite planned for period 6




                                                                                                                    6
•SPI-1493                Lock starts sinking!
           •Earnings-$28225K        Invested in LELI
           •Advertising:6267        Frantic increase in commercial team size
           •Commercial Team:4001
Period 5                            Losh doing well




           •SPI- 1320               Budget hit!
           •Earnings-$22472K        Modification of Lock
           •Advertising:6684        Had to hold back on decision to launch Vodite
           •Commercial Team:4350
Period 6
                                                                                                   Analysis &
           •SPI- 1383
           •Earnings- -$16437K
                                      Launched LELI -$995
                                      Modified Loop picks up sales
                                                                                                   Strategies
           •Advertising:15374        Loop & Loha not doing well
           •Commercial Team :6011
Period 7                            Investment in LOOT- Targeted at the growing shoppers segment




           •SPI- 1425                  Launched another vodite LELO
           •Earnings- -$18139K         Launched Loot
           •Advertising:16728          Losh is the saving grace
           •Commercial Team :6661
Period 8

                                                                                                                7
What We Did??
            • Poor commercial team size initially
            • In period 3, didn’t know how to use the
              loan sanctioned

Mistakes    • In period 4, price of Loop was reduced
              drastically- Professionals are not price
              sensitive.
            • Budget too little for so many products




            • Focused on developing a product for
              every segment
            • Decision to focus on our prime product
              (Losh) pays off

Positives   • Decision to modify Lock and take
              advantage of its brand awareness
              works
            • SPI dips only in one period (6th), growth
              in every other period


                                                          8
The first thought that
                                                                                                 strikes you is the
                         Create demand for
                                                   Commercial Teams                               first thought that
                         your products and
                                                    are as crucial as    Always think of 2-3         strikes your
                       fulfill them too. In our
Have one product for                               advertizing spend.      periods ahead.       competitor too. That
                                case, our
ONLY one segment.                                 Demand creation can     Foresight saves        is the reason why
                          competitors took
                                                  only be met by sales    nasty surprises.         great strategies
                          advantage of our
                                                          staff.                               fail, because they are
                              advertizing.
                                                                                                duplicated by other
                                                                                                        players.




                                                                                                                        9
The market size is increasing by approx 30% for Sonites and aprox 330% for Vodites


The savers segment is increasing to 48% and the shoppers segment to 37% in the next 5 years.

Over the next 5 years the shoppers segment on an average increases by 5.8% while the savers
                                  are increasing by 10.9%.

The other segments are reducing and hence the above said 2 segments can be targeted to get
                                  the maximum returns.

            Set targets for market shares well in advance and try to stick to them.

                                                                                               10
Commercial teams should be allocated in such a way so that maximum sales can be availed from the various
avenues: Mass Merchandisers, Specialty Stores and Online Stores.

With unlimited budget, comes unlimited responsibility. Always remember that advertizing is an expense that will
ultimately be deducted from the revenues to get the EBIT. Spend prudently when you have unlimited budget.

Customize each product for a particular segment and price it accordingly. Avoid cannibalization of products.


The advertising expenditure and commercial team size needs to be competitive with respect to the market.


Don’t copy your market leader, but mark his moves.


                                                                                                                  11
12

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Markstrat Gorilla Team

  • 2. Sonite Launched in Period Target Segment Market share - Value Market share - Unit Rec. retail price Base Cost LOCK 0 Savers 3.1% 4.7% 195 116 LOHA 4 High Earners 3.2% 1.8% 500 188 LOOP 0 Professionals 3.9% 2.6% 435 197 LOOT 8 Shoppers 2.4% 2.9% 245 163 LOSH 3 Shoppers 9.5% 12.6% 225 111 2
  • 3. MARKET : Launched in Market share - Market share - Rec. retail price Base Cost VODITES Period Value Unit LELI 7 11.2% 10.5% 990 373 LELO 8 0.9% 0.7% 1,259 373 3
  • 4. 4
  • 5. TEAM L-SPI 1493 1290 1362 1380 1320 1383 1425 1151 1000 Period Period 0 Period Period 1 2 Period Period 3 4 Period 5 Period 6 Period 7 8 5
  • 6. SPI:1151 2 products – Lock & Loop • Earning before Taxes: 18456 Loop($500) – Target Professionals • Advertising: 4916K$ Lock($250) -- Target Savers Period 1 • Commercial Team Cost: 1332$ • SPI:1290 Invested in LOSH– A product for Shoppers • Earning before Taxes:23476 • Advertising: 4080K$ • Commercial Team Cost: 1290K$ Made our first mistake!! Period2 • R&D : 1250 Analysis & •SPI:1362 •Earning before Taxes:23534 Launched LOSH -$240 Invested in LOHA – A product for High Earners Strategies •Advertising : 5640K$ Loop -$485 •Commercial Team Cost: 1921$ Lock - $210 Reduced Price Period3 •R&D: 1110 Price Race on • SPI: 1380 LOHA launched- $500 • Earning before Taxes:20285 Loop- $435 • Advertising: 5649K$ Lock - $195 • Commercial Team Cost: 2796K$ Losh - $230 – Focus on one product Period 4 • R&D : 2945 Invested in LELI – Our Vodite planned for period 6 6
  • 7. •SPI-1493 Lock starts sinking! •Earnings-$28225K Invested in LELI •Advertising:6267 Frantic increase in commercial team size •Commercial Team:4001 Period 5 Losh doing well •SPI- 1320 Budget hit! •Earnings-$22472K Modification of Lock •Advertising:6684 Had to hold back on decision to launch Vodite •Commercial Team:4350 Period 6 Analysis & •SPI- 1383 •Earnings- -$16437K Launched LELI -$995 Modified Loop picks up sales Strategies •Advertising:15374 Loop & Loha not doing well •Commercial Team :6011 Period 7 Investment in LOOT- Targeted at the growing shoppers segment •SPI- 1425 Launched another vodite LELO •Earnings- -$18139K Launched Loot •Advertising:16728 Losh is the saving grace •Commercial Team :6661 Period 8 7
  • 8. What We Did?? • Poor commercial team size initially • In period 3, didn’t know how to use the loan sanctioned Mistakes • In period 4, price of Loop was reduced drastically- Professionals are not price sensitive. • Budget too little for so many products • Focused on developing a product for every segment • Decision to focus on our prime product (Losh) pays off Positives • Decision to modify Lock and take advantage of its brand awareness works • SPI dips only in one period (6th), growth in every other period 8
  • 9. The first thought that strikes you is the Create demand for Commercial Teams first thought that your products and are as crucial as Always think of 2-3 strikes your fulfill them too. In our Have one product for advertizing spend. periods ahead. competitor too. That case, our ONLY one segment. Demand creation can Foresight saves is the reason why competitors took only be met by sales nasty surprises. great strategies advantage of our staff. fail, because they are advertizing. duplicated by other players. 9
  • 10. The market size is increasing by approx 30% for Sonites and aprox 330% for Vodites The savers segment is increasing to 48% and the shoppers segment to 37% in the next 5 years. Over the next 5 years the shoppers segment on an average increases by 5.8% while the savers are increasing by 10.9%. The other segments are reducing and hence the above said 2 segments can be targeted to get the maximum returns. Set targets for market shares well in advance and try to stick to them. 10
  • 11. Commercial teams should be allocated in such a way so that maximum sales can be availed from the various avenues: Mass Merchandisers, Specialty Stores and Online Stores. With unlimited budget, comes unlimited responsibility. Always remember that advertizing is an expense that will ultimately be deducted from the revenues to get the EBIT. Spend prudently when you have unlimited budget. Customize each product for a particular segment and price it accordingly. Avoid cannibalization of products. The advertising expenditure and commercial team size needs to be competitive with respect to the market. Don’t copy your market leader, but mark his moves. 11
  • 12. 12