Market Expansion
Business growth brings pressures to a system that may not have had the time / experience to get geared up for increased production or services. How well the company is structured and the process defined will be the difference between success and failure.
The Client
A fast-growing manufacturer and distributor of consumer and home appliances with a strong regional market presence.
The Problem
The company has an ambitious plan to reach Rs 1000 Cr annual revenue with a healthy bottom line in the next 5 years and the leadership team realized that they were not properly organized to achieve this objective. They recognized that to manage such an aggressive expansion plan they need to add a strong organizational structure with proper checks and balances, new capabilities in data-based decision making, create greater focus and integration for teams and increase their ability to provide timely services across the country. Also, they had a strong image of a value brand but wanted to move into the aspirational consumer segment.
The Solution
Working closely with the leadership, we decided that to move into the aspirational segment, we had to introduce a second brand into the market with a positioning which would be aligned with this segment. Moreover, it was important to have a holistic view when it comes defining its value proposition rather than just going with a communication campaign showcasing it as aspirational. We used the famed BCG Value Pyramid to help design a complete offering.
When customers evaluate a product or service, they weigh its perceived value against the asking price. Brands generally focus much of their time and energy on managing the price side of that equation, since prices are easy to change. But price strategies are easily countered and hence will get defeated by larger sized competitors or overly aggressive ones with deep pockets.
What consumers truly value, however, can be difficult to pin down and psychologically complicated. If a brand can establish a strong value proposition on the emotional or lifechanging elements rather than the functional ones, it would be very hard for any competitors to counter them and that was exactly our goal when it came to defining the new brand proposition. We also tied up with a exciting young celebrity who would evoke this image among our target segment.
Once the brand proposition was defined, the next was the Market Entry Strategy. This required a detailed exercise encompassing the study of the current market landscape and current barriers to entry, finding robust pricing and promotion strategies, defining the channels of distribution, and setting up the supply chain for them.
The other side of the problem dealt with creating an organization that had two brands with conflicting value propositions and both would be growing exponentially in the next few years. We defined a new, customer-centric organizational model featuring a hybrid model of brand-based divisional structure for sales and a more traditional functional structure for the rest of the organization. Clear roles and responsibilities—defined via specific RACIs and well-defined workflows — were a cornerstone of the new model. To monitor its effectiveness, a strong Performance Management System with KRAs & KPIs were defined for all employees and implemented with reviews in every quarter.