TATA NANO

1.Reading the case

Tata Nano PRODUCT FAILURE HERE IS WHAT WENT WRONG:

Tata Motors launched the Nano with motorcyclists in mind. To appeal to them, Tata
manufactured the Nano as inexpensively as possible; the Nano was priced at 100,000
rupees, or approximately $2,500 in 2008 dollars.

The company hoped the Nano’s compact design and low price would make it a popular
choice with residents of urban areas, many of whom relied on motorcycles and mopeds for
personal transportation. The low-price tag led to numerous cut corners in production,
which resulted in serious safety flaws. However, the car faced a lot of technical issues in
its initial production run which further contributed to its failure and the production of Nano
halted as the year saw the production of only one unit in 2019. The car faced a lot of
technical issues the car had poor riding comfort and had stability issues moreover the price
did not remain as one lakh and in fact doubled due to which it started losing customers.

2. The Report Format

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 TATA NANO

I. Executive Summary
Tata Motors Group (Tata Motors) is a $34 billion organization. It is a leading global
automobile manufacturing company. Tata Motors Limited is an Indian multinational
automotive manufacturing company, headquartered in the city of Mumbai, India which is
part of Tata Group.

The company produces passenger cars, trucks, vans, coaches, buses, luxury cars, sports
cars, construction equipment. Its founder is J. R. D. Tata and it was founded in Mumbai.
Its revenue is 3.19 lakh crores INR (US$45 billion, 2021). Its subsidiaries are Jaguar Cars,
Jaguar Land Rover, Tata Technologies. Its diverse portfolio includes an extensive range of
cars, sports utility vehicles, trucks, buses and defence vehicles. Tata Motors is one of
India's largest OEMs offering an extensive rang Part of the USD110 billion Tata group
founded by Jamshedji Tata in 1868,
Tata Motors launched the Nano with motorcyclists in mind. To appeal to them, Tata
manufactured the Nano as inexpensively as possible; the Nano was priced at 100,000
rupees, or approximately $2,500 in 2008 dollars. The company hoped the Nano’s compact
design and low price would make it a popular choice with residents of urban areas, many
of whom relied on motorcycles and mopeds for personal transportation.
About a decade ago, the market was abuzz with talks of a revolutionary new product by
Tata Motors. The Tata Nano was set to change the entire game by making a four-wheeler
accessible to anyone. Cheap, fast and reliable, Tata Nano was the answer to all our
problems. In 2008, Indian car manufacturer Tata Motors launched the Tata Nano, an ultra-
compact hatchback designed specifically for the domestic Indian market.
India’s population still consists of a large part of the society dwelling as low pay
individuals. Buying a vehicle is still a dream for many in India. In 2008, Ratan Tata
announced the delivery of its vehicle nouvelle, which would stir a whole new section in

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 TATA NANO

the automobile industry. He called the “1 lakh rupee vehicle” and used the same title for
advertising.
Ratan Tata remained faithful to setting the Nano on the roads, and he did so by July 2009.
Initially, the demands were towering for the car, but they began to fall month after month.
Marketing the vehicle was the primary reason that lagged Tata to attract consumers. But
what could have possibly gone wrong with the marketing?
However, the low-price tag led to numerous cut corners in production, which resulted in
serious safety flaws.
Reports of Nanos bursting into flames after rear collisions were common in the months
after the vehicle’s debut. Tata ultimately sold fewer than 8,000 Nanos before pulling the
vehicle from the market entirely.
Tata Motors did not produce a single unit of its entry-level car Nano in 2019 although it
sold just one unit in February even as the company is yet to officially retire Ratan Tata's
"people's car".
The reasons why an ambitious project of Ratan tata failed was because it failed to attract
Indian consumers significantly due to the early cases of the Nano bursting into flames.
Tata failed to attract Indian consumers significantly due to the early cases of the Nano
bursting into flames. Because of this, the impression of the automobile being hazardous
due to the compromise in quality for slicing the cost was one of the major reasons why
Tata Nano failed.
The car faced a lot of technical issues the car had poor riding comfort and had stability
issues moreover the price did not remain as one lakh and in fact doubled due to which it
started losing customers. The relocation of the plant also had run into controversies. Also,
there was an engine issue. Like mentioned earlier, the vehicle burst into flames, and this
was related to the engine issue.
Nano promoted itself as the cheapest vehicle. No one likes to ride in a “cheap” car. Tata
launched this vehicle intending to target the low pay individuals and their families, but
however passionate the intention is, the automobile is seen with an eye of segregation in
the public platform. Moreover, words like “cheap” and “lakhtakia” used in promotions and
advertisements shook its image.
Tata Nano was focusing on individuals who never thought of buying a car – for those
people who had low income. However, this propelled a certain level of opposition. As per
the intended interest group, the media, followed by the general mass, pictured Tata Nano

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 TATA NANO

as a poor man’s vehicle. Eventually this car is very impressive for the following reasons
for use on narrow zigzag roads on Himalaya which have sharp turnings. First the 30%
gradeability is amazing in climbing even the steep slopes. Reduced body weight is blessing
because there is always risk of side road sliding by higher body weight.

II. Report main body

A. Situational Analysis

Ten years after it was launched, Tata Motors’s Nano is dead, waiting to be formally
buried.
In June 2018, only one Nano was produced and the company admitted two weeks ago that
the car cannot continue in its present form after 2019. When it was launched in 2008 it
won a plethora of international awards based on its defining features – high fuel efficiency,
low weight, designed to incorporate all international safety regulations then applicable and
having the lowest emission level among all cars then being made in India – offered at the
cheapest price in the world. However, the car faced a lot of technical issues in its initial
production run which further contributed to its failure. During the first two years, several
Tata Nano cars were reported to catch on fire due to faulty wiring. The Nano had poor ride
comfort and stability issues due to the lightweight body. Tata Motors is expected to
dispatch 250,000 Nanos every year. However, this did not happen. Instead, only 7591 were

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 TATA NANO

sold for the year 2016-17. In 2017, Tata Motors said that assembling would proceed
because of Tata’s compassion for the project.
B. Statement of the problem/ Formulation of the problem
 Sales fell far short of forecasts.
 The relocation of the factory was a debacle.
 Occasionally, the car even burst into very real flames.
 Common Problems Reported on the Tata Nano! Happened simultaneously like the
horn Stopped Working, Starter Motor Problem which is one of the major
components of a vehicle, the A/C not Effective, Power Windows failed, the Speedo
Meter was not working, the dashboard Rattling, and there was a lack of power.
C. List of critical factors
 Nano was never the “one lakh” car and over time the car was quoted at Rs 2.59
lakh, compared to the cheapest Alto 800 going at Rs 2.88 lakh.

 It will be best for city usage and trips such as a 200KM or so it is meant to say it
won’t be comfortable for overnight long trips of over 300km etc.
The Tata Nano received a zero-star adult protection rating and failed to meet even the most
basic UN safety requirements.
Tata Nano GenX is primarily a city car and it is not meant for highway driving.
The small wheels are not able to cope with bad roads and big bumps do unsettle the car
substantially. The car has good handling but grip levels are low and steering lacks feel and
feedback at high speed.
D. Assumptions.

The trait of demographic trends must be considered to understand the acceptance of the
product.
It comprises of lifestyle, consumer trends, income, spending power etc. it allows a
company to make plans and strategize on the kind of products to be marketed.
Study the Business environment in order to make plans, design strategies and take
decisions.
It is very significant for any company to analyze the location dynamics.
Being a huge manufacturer of automobiles, its periphery consists of all the accordant
forces and had all resources it could have set right the problematic technicalities.

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 TATA NANO

To analyze all your metrics about the product launch itself.

Should not have Changed product pricing which was the main marketing strategy.
If it’s a large product with several components or services, break it apart into separate
products. It’s possible your ideal customer doesn’t need everything you offer, but would
happily buy the components.

Bundled pricing in which other valuable, related products or services, are added usually
offering a discount for the bundle. Sometimes the addition of services such as free tech
support, maintenance contracts, or extended warranties can boost lagging product sales,
especially with complex, technical products
Understand the target audience and generate a sense of longing towards that product.
Before launching a new product, it is very important to understand the target audience of
that product. One needs to understand their psychology, their wants and desires. The
marketing strategy is based on making the product seem attractive to that audience. The
product becomes successful if the company can generate a sense of longing towards that
product so that people buy it as soon as it is launched.

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E. SWOT ANALYSIS

Strength:
1.Brand name very strong
2.Tata Nano is available at a very affordable price
3. Easy to drive in traffic conditions
4. Innovative engineering of Tata Nano provides better facilities compared to same
segment cars
5. Low maintenance and handling cost of Tata Nano
6. Good fuel efficiency goes well with Indian audiences
7. When it was introduced it created a huge buzz in the global automobile industry being
a ‘common mans’ car
8. Excellent advertising of the Tata Nano car across TVCs, print media, online ads
perhaps the biggest plus is its fuel efficiency and correspondingly low levels of
emission.
Weakness:
1. Perceived as a cheap product which repels the aspirational customers
2. Setting up of production plant in West Bengal with respect to Singur where the
location was determined first went into debacle as the farmers did not give their land
caused a lot of tension
3. Limiter international presence of Tata Nano
Opportunities:
1. Tata Nano can capitalize on the fact that it is the most affordable car and acquire new
customers
2. Increasing per capita income and purchasing capability of potential customer base
3. Promoting CNG model at the earliest and attract the public passenger car segment
4. Increase international market presence especially Europe too boost Tata Nano's
business
5. Augmenting the distribution and service network in various countries
THREATS:
1. Increasing fuel costs
2. Competition from other big automobile giants can affect Tata Nano's business
3. Competitive products offering same level features at a lesser price

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 TATA NANO

4. Product innovations and frugal engineering by competitors

F. SOLUTIONS FOR THE QUESTIONS IN THE CASE STUDY

TATA Motors could have continued to target their common man’s target customers.
They should have kept a low price so that it could have been affordable.
They could have marketed in the rural and remote regions.
They should have sorted out the technical issues.
The company should have proved their product's viability. ...
Implementing actionable post-launch refinement.
The company should have worked on removal of technical defects

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 TATA NANO

G. Conclusions

They are India's largest automobile manufacturer, and They continue to take the lead in
shaping the Indian commercial vehicle landscape, with the introduction of leading-edge
powertrains and electric solutions packaged for power performances and user comfort at
the lowest life-cycle costs. Their new passenger cars and utility vehicles are based on
Impact Design and offer a superior blend of performance, drive ability and connectivity.

Their focus is on connecting aspirations and their pipeline of tech-enabled products keeps
them at the forefront of the market. They have identified six key mobility drivers that will
lead them into the future – modular architecture, complexity reduction in manufacturing,
connected & autonomous vehicles, clean drivelines, shared mobility, and low total cost of
ownership of integrated, smart and e-mobility solutions.

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H. References

https://gomechanic.in/blog/tata-nano-what-went-wrong/

https://www.finnovationz.com/blog/tata-nano-failure-story

https://startuptalky.com/tata-nano-case-study/

https://www.tatamotors.com/

https://en.wikipedia.org/wiki/Tata_Motors

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 KELLOGG’S

INTRODUCTION TO THE CASE:

India became extraordinarily tough market for Kellogg’s. Reason being it had
to change ingrained eating habits of consumers. It passed through different
though d
phases of life-cycle before it has become the strongest player in breakfast
cereal category in India. Presently, Kellogg’s is estimated to hold about 60-65
per cent of India’s breakfast cereal market. The total worth of breakfast cereal
market in India is Rs 400 crore. While introducing a new product category, it
was not easy for Kellogg’s to establish a foreign brand into Indian market
where food habits of people change after a few kilometres. The journey of
Kellogg’s from failure to success is discussed in this case.

Kellogg’s is one of the most successful brands from U.S. which was world’s
leading producer of cereal and convenience foods. The products are
manufactured in 18 countries and sold over in 180 countries. It is hugely
popular breakfast cereal brand. It is sold in 160 countries with sales turnover
of over $9 billion. On its initial entry into the Indian market, it used similar
marketing mix which it was using in other global markets.

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 KELLOGG’S

When Kellogg’s first entered India in 1994, it heavily bet on transforming the
Indian breakfast cereal market. It wanted to switch breakfast habits of Indian
consumers who were used to hot breakfast foods.

The company wanted the Indian consumer to change its traditional habits of
having either Idly Dosas or Parathas in their breakfast and these habits too
varied from region to region with the northern region preferring Parathas and
southern region preferring Iblis, Vada’s etc. and the western region preferred
alternatives like Poha. They wanted customers to make an instant switch from
their own traditional habits. They wanted people to start having the healthier
breakfast cereals which was a huge Challenge for the company.

Executive Summary:

Kellogg’s is one of the most successful brands from U.S. which was world’s
leading producer of cereal and convenience foods. The products are
manufactured in 18 countries and sold over in 180 countries. Kellogg’s is
estimated to hold about 60-65 per cent of India’s breakfast cereal market. The
total worth of breakfast cereal market in India is Rs 400 crore.
While introducing a new product category. The products are manufactured in
18 countries and sold over in 180 countries.

REPORT MAIN BODY:

A. Situation analysis:

In its initial advertisements, Kellogg’s showed that what Indian public was
having in their breakfast was not at all healthy. This in turn hurted the
sentiment of the typical India ladies who had been serving traditional

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 KELLOGG’S

breakfast for ages to their families. The advertisement negatively affected the
mind set of major influencers and initiator

groups in the Indian families. Also the kind of breakfast which Indians were
having was available in many varieties at lower price than what Kellogg’s
offered. It was difficult for the company to convince people to leave their
traditional breakfast options and replace it with cereals.

Also, the company could not understand another cultural aspect that Indian
consumers have had warm milk in their breakfast. On the other hand corn
flakes (cereals) were preferably used with cold milk. Even when they
consumed it, crispiness of flakes was lost completely as soon as they were
dipped into the warm milk, thereby failing to keep their promise of providing
crispy flakes when it is to be consumed. Due to all the problems that
Kellogg’s was suffering from, its sales declined.

B. Statement of the problem:

Kellogg India receives technology inputs about how to customise products to

suit the Indian nutritional profile, developing packing material specifically for
India, manufacturing process etc. from its parent. Within the larger
management and strategic framework, Kellogg India has the flexibility to
adapt its operational strategy suited to the local environment. Price sensitive
customers necessitated a constant focus on cost reduction and supply chain
efficiency enhancement in India.

 Localised the entire raw and packing material requirement, saving

import duty. Also it has adopted single sourcing strategy achieving
scale efficiencies

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 KELLOGG’S

 Located its manufacturing plant at Taloja, near Mumbai in the state of

Maharashtra, which is the largest market for breakfast cereals in the
country thereby optimising transportation cost
 Set up a distribution network with storage hubs in all the key states of
the country serving over 200 distributors providing a good reach

C. List of Critical Factors/Facts:

The customers and their vale play a major role and cannot be neglected by the
companies in today’s business world

 Customer focus and retention is a powerful strategic

 To increase the profitability of the company

 To Survive in Highly Competitive market

 Varying concept in decision making units to sell the product

D. Assumptions:

 Sustained brand-building through advertising and investment.

 Introducing Kellogg’s Choco Spider Man 2 “web designed cereal”
 Conducting contact programmes in schools and having active interface
with opinion leaders – CFTRI, the government, independent agencies
etc.
 Adopting brand names that appeal to the Indian consumer such as
‘Shakti’, meaning power
 Using packaging as an effective marketing tool, for brand

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 KELLOGG’S

 communication and on-shelf differentiation

 Building up of image through recycling and reusing, improving access
to health and human services in local communities.
Company has been leveraging Indian managerial talent by moving Indian
managers to other countries. The Indian team also manages neighbouring
countries like Sri Lanka, Bangladesh and Nepal. Company views India as a
very important market which has a great future. Taking a longer-term
perspective, Kellogg India is planning to continue its investment in
communication of categories and brands to grow the breakfast cereal market
in the country.

E. SWOC Analysis of Kellogg’s:

Strengths

 Strong positioning the minds of customers

 Employee resource groups to drive business sustainability and

organizational success

 Multinational presence with global manufacturing and marketing

capabilities

 Strong commitments to nutrition

 Effective marketing campaigns

 Weaknesses

Lack of segregation in product portfolio

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 KELLOGG’S

 Known majorly as a breakfast cereal.

 Majority of the products in the portfolio is sold in North America only

 R&D centres are limited to certain regions only

Opportunities

 Venture into emerging markets

 Expansion of product portfolio

 Additional business models like E-business

 Rapid market growth in ready-to-eat cereal category

Challenges

 Intense competition

 Changing customer perception about breakfast and processed foods

 Regulations by the government

F. Solution for the question in the case study:

1) In Comparison to Kellogg’s, Explain the Product Profile of the

company

Over time Kellogg India has widened its product portfolio. It expanded its
range to include Frosties, chocolate-flavoured scoops and taste variants of

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 KELLOGG’S

Corn Flakes. Kellogg India also adapted its products to address the local
need gaps.For example it focused on iron and calcium fortification with
products like Iron Shakti and Calcium Shakti Kellogg India receives
technology inputs about how to customise products to suit the Indian
nutritional profile, developing packing material specifically for India,
manufacturing process etc. from its parent. Within management and strategic
framework, Kellogg India has the flexibility to adapt its operational strategy
suited to the local environment. Company has been leveraging Indian
managerial talent by moving Indian managers to other countries. The Indian
team also manages neighbouring countries like Sri Lanka, Bangladesh and
Nepal. Company views India as a very important market which has a great
future. Taking a longer-term perspective, Kellogg India is planning to
continue its investment in communication of categories and brands to grow
the breakfast cereal market in the country.

2) What are the challenges the company may face in future?

Kellogg Company, India's market leader in organised breakfast cereals

space, aims to double its revenue in the next five years with 20 per cent
growth in its business. Kellogg India will focus on increasing market
penetration both in the urban and rural areas. In short, the business
performed very well in 2020, and we will take that momentum into 2021.”
In North America, operating profit increased 21% in fiscal 2020 to $1.47
billion while sales eased to $8.36 billion from $8.39 billion. Organic sales,
meanwhile, were up 5.1% year-over-year, Kellogg said In FY19-20,
Kellogg posted decade-low sales growth of 4% to Rs 1001 crore while net
profit fell 16% to Rs 22 crore, as per Registrar of Companies filing
sourced from AltInfo, a data insights firm.

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 KELLOGG’S

CONCLUSION

All these various initiatives taken by the Kellogg’s as discussed for re-
positioning of its brand helped it in gaining around 60-65 per cent of the
market share of the breakfast cereals market thus helping themselves to
become a market leader. To expand its business further, the company has
decided to promote the brand as an evening snack as well.

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 KELLOGG’S

REFERENCE
 https://www.translatemedia.com/translation-blog/how-kelloggs-failed-
and-then-won-in-india/

 http://www.researchersworld.com/

 http://www.ibef.org/download/Kellogg_India.pdf

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 OREO

INTRODUCTION TO CASE
For most of its 100-year existence, Oreo was consistently America’s best
loved cookie, but today it is a global brand. Faced with stagnation in the
domestic market, Kraft Foods moved it into emerging markets where it made
some mistakes, learned from them changed its strategy and ultimately
triumphed in winning over customers. This case illustrates a complete re-
evaluation of the product, pricing, packaging, communication and distribution
strategy of an existing Oreo brand in an international market. It can also be
used to explore the global versus local mix that is needed for success in an
international market, and to illustrate the strategies necessary to succeed in
emerging markets like India and China.

BACKGROUND AND COMPANY PROFILE

The “Oreo Biscuit” was first developed and produced by the National Biscuit
Company (today known as Nabisco) in 1912 at its Chelsea, Manhattan
factory in the current-day Chelsea Market complex, located on Ninth Avenue
between 15th and 16th Streets. Today, this same location of Ninth Avenue is

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 OREO

known as “Oreo Way.” The name Oreo was first trademarked on March 14,
1912. It was launched that time as an imitation of the Hydrox cookie
manufactured by Sunshine Company, introduced in 1908.

On March 6, 2012, the famous cookie brand, Oreo, celebrated its 100th
birthday. From humble beginnings in a Nabisco bakery in New York City,
Oreo has grown to become the bestselling cookie brand of the 21st century
generating $1.5 billion in global annual revenues. Currently owned by Kraft
Foods Inc., Oreo is one of the company’s dozen billion-dollar brands.

Until the mid-1990s, Oreo largely focused on the US market – as reflected in

one of its popular advertising slogans from the 1980s, “America’s Best Loved
Cookie”. But the dominant position in the US limited growth opportunities
and spurred Kraft to turn to international markets. With China and India
representing possibly the jewels in the crown of international target markets
due to their sheer size, Oreo was launched in China in 1996.

Report Main Body

A. Situation Analysis:

Oreos haven’t always been popular outside the U.S. Kraft struggled for years
in China after being launched in China, for instance, and considered exiting
Chinese market several times. The cookie was spectacularly underperforming
once said Sanjay Khosla, Kraft’s president of developing markets. One
problem: Kraft offered Chinese consumers the same type of Oreos that it sold
in the U.S. Kraft believed that what was good for the U.S. was good for the
world.

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 OREO

After surveys showed that Chinese consumers found Oreos too sweet, Kraft
put Andrade to work coming up with a new formula to better suit local tastes.
In India, Kraft encountered the opposite problem: The American-style cookie
was too bitter, Indians told researchers. Adjusting for local preferences isn’t a
matter of just removing one ingredient said Andrade. It’s about making sure
you balance the flavours. You almost have to reconstruct the product.

 Kraft also observed that the Chinese consumers were value conscious and
considered the Oreo packets to be expensive. As a result of which the size of
the packets was reduced so as to suit the buying habits of consumers.
Moreover, very small packets were also introduced so as to give the
consumers a first taste of the cookie.

 The introduction of smaller packs required adjustments in

manufacturing plant. Similarly, marketing campaigns also had to be
adjusted accordingly.
 Initially, the distribution was through grocery stores and hypermarkets.
But later the convenience stores were used to enhance the distribution
network. In Shanghai, Carrefour even offered Oreos by weight so as to
give customers more control over the quantity that they buy.
 Recognizing the wafers were very popular amongst the Chinese, the
team introduced chocolate covered wafer sticks. Convincing the senior
management was a tough task, but eventually the product turned out to
be big hit and was subsequently launched in other markets.
 Americans have tradition of pairing milk with cookies. Kraft began a
grassroots marketing campaign so as to educate the Chinese consumers
about this habit.
 

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 OREO

 B. Statement of Problem/ Formulation of the problem:

 High cost of Raw materials

 Some of there product in American market has become poisoning

 Internal Competition is more in the company

 Cost of Advertisement is more

C. Assumption:Oreo had been an iconic product in US having been in the

country for over 100 years. Kraft expected the brand to achieve similar
success in China after its launch in 1996. But this was not the case as a result
of which, Kraft had to rethink about adapting the product according to the
needs of the Chinese. The cookie when launches in China did OK but wasn’t
a hit. The company even considered pulling out the brand out of China, but
before doing so that they thought of conducting research about why the
Chinese consumers did not like Oreo. Kraft concluded from the research that
Chinese found the cookie a little bit too sweet and a little bit too bitter and
this is where the turnaround strategy of Kraft was focused. The learning from
Chinese markets were used by Kraft when they entered Indian markets.
Initially Oreo was available in India only in imported form. As a result of
this, it was priced at Rs 50 for a pack of 14. Due to prohibitive price coupled
with lack of awareness, the sales were very low. At this point of time, global
CEO Irene Rosenfeld decided to adopt localization strategy similar to the one
used in China. This was helped partly by the acquisition of Cadbury in 2009.
As opposed to the Chinese, Indians love biscuits. India is world’s largest
market for biscuits. But the market is dominated by low-cost glucose biscuits,
and premium cream biscuits only occupy a small share. As a result, in order

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 OREO

to capture the Indian market, competitive pricing and strong distribution were
important components.

D. SWOC ANALYSIS:

Strengths
 Cost competitive for the market
 Known as the number one biscuit
 Quality product and packaging
 Partnership with many companies
 Customer relationships
 Assortment of products
 Strong history
 Large distribution network
 Double Stuff Racing League
 Endorsed by several celebrities, movies, and television shows
 Fat free and low-calorie options
Weaknesses
 Limited market
 High fat and calorie content in some products
 Uses of palm oil
 Certain products are only in some countries
 Supports the obesity increase in children
Opportunities
 Launch new products
 Sponsor more events
 Create scholarships for students
 Expand the company

Challenges
 Similar biscuits 
 Other chocolates
 Off brand copies
 Price inflation in production costs

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 OREO

 Lifestyle changes due to health concerns

Solutions for the questions in the case study:

1) What are the multi-pronged approach adopted by Oreo in

China?

The cookie when launches in China did OK but wasn’t a hit. The company
even considered pulling out the brand out of China, but before doing so that
they thought of conducting a research about why the Chinese consumers did
not like Oreo. Kraft concluded from the research that Chinese found the
cookie a little bit too sweet and a little bit too bitter and this is where the
turnaround strategy of Kraft was focused.

The multi-pronged approach adopted by Oreo in China can be summarized as

follows:

 Kraft’s Chinese division asked its headquarters to change the

ingredients of Oreo so as to make it biscuits suitable for local tastes.
Accordingly, 20 prototypes were developed and were tested on Chinese
consumers and the formula which was most preferred was selected.
 Kraft also observed that the Chinese consumers were value conscious
and considered the Oreo packets to be expensive. As a result of which
the size of the packets was reduced so as to suit the buying habits of
consumers.
 Moreover, very small packets were also introduced so as to give the
consumers a first taste of the cookie. The introduction of smaller packs
required adjustments in manufacturing plant. Similarly, marketing
campaigns also had to be adjusted accordingly.

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 OREO

 Initially, the distribution was through grocery stores and hypermarkets.

But later the convenience stores were used to enhance the distribution
network. In Shanghai, Carrefour even offered Oreos by weight so as to
give customers more control over the quantity that they buy.
 Recognizing the wafers were very popular amongst the Chinese, the
team introduced chocolate covered wafer sticks. Convincing the senior
management was a tough task, but eventually the product turned out to
be big hit and was subsequently launched in other markets.
 Americans have tradition of pairing milk with cookies. Kraft began a
grassroots marketing campaign so as to educate the Chinese consumers
about this habit.

2) What are the Strategy Used in India?

 The learning from Chinese markets were used by Kraft when they
entered Indian markets. Initially Oreo was available in India only in
imported form. As a result of this, it was priced at Rs 50 for a pack of
14. Due to prohibitive price coupled with lack of awareness, the sales
were very low. At this point of time, global CEO Irene Rosenfeld
decided to adopt localization strategy similar to the one used in China.
This was helped partly by the acquisition of Cadbury in 2009.

 As opposed to the Chinese, Indians love biscuits. India is world’s

largest market for biscuits. But the market is dominated by low-cost
glucose biscuits, and premium cream biscuits only occupy a small
share. As a result, in order to capture the Indian market, competitive
pricing and strong distribution were important components.

 Oreo developed a strategy to take on the existing market leaders which

included Britannia, ITC and Parle. Internally, they referred to this

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 OREO

strategy as TLD (Take Leaders Down). Its focus was to target the 10
million households which consumed 70 per cent of the cream biscuits.
It entered the Indian market as Cadbury Oreos as Cadbury had a better
brand recognition among the Indian consumers when compared to
Kraft. It has targeted the small towns and Kirana stores along with
modern stores in big cities. As a result of this strategy its market share
has grown from one per cent after its debut to 30 per cent.

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 OREO

CONCLUSION

Today, Oreo has become a global brand. It has presence in more than 100
countries. China is currently its No.2 market. This would have been highly
impossible had there been no clear strategy from Kraft about approaching the
Chinese markets. Manufacturing, marketing, distribution and packaging were
properly aligned as per the market requirements. The decision to reformulate
the Oreos according to the Chinese taste was a significant decision.

This case is a classic example of the dilemma which is faced by multinational

corporations when entering foreign markets. The firms should be able to
adjust to the local tastes. Oreo achieved success by integrating its global
brand with local preferences.

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 OREO

REFERENCES

 http://www.businesstoday.in/lbs-case-study/how-kraft-foods-won-over-
customers-in-china-and-india/story/193162.html

 http://articles.economictimes.indiatimes.com/2011-03-03/news/
28650890_1_oreo-biscuit-market-broader-foods

 http://www.canadianbusiness.com/business-news/industries/marketing-
to-china-oreos-chinese-twist/

 http://www.wsj.com/articles/SB120958152962857053

 http://www.forbes.com/2009/12/08/china-oreo-tang-cmo-network-
kraft.html

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 McDonalds

McDonald’s

INTRODUCTION:
McDonald's is the world's leading chain of hamburger fast food restaurant and the
prominent global foodservice retailer. Headquartered in the United States, the company
was founded in 1954 by businessman Ray Kroc. McDonald's serves more than 65 million
customers daily with over 35,000 local restaurants in 119 countries (McDonalds, 2017).
The corporation employs more than 2 million employees worldwide. It is worth noting that
a McDonald's restaurant is operated by either an affiliate, franchise, or the company itself.
About 15 percent of McDonald's restaurants are owned and operated by the corporation
directly (Schwarzschild, 2016). Most of its revenue comes from the payments, fees and
rent paid by the franchisees, as well as transactions made in the company-operated
cafeterias. The essential products that are sold in McDonald's include cheeseburgers,
hamburgers, French fries, chicken products, desserts, soft drinks and breakfast items. With
an aim to minimize obesity trends and criticism, the company often changes its menu.
In the UK, most of McDonald's restaurants operate on the franchise basis. The
organizational management and strategic focus have enabled McDonald's to compete
effectively in an already competitive industry. The company focuses on providing
tremendous customer service and best operations facilitated by the employees. Along with
advertising companies that leave the brand reputation in the customer's mind, McDonald's
continue not only to penetrate the market but also widen their market segment. This report
is mainly aimed to discuss the service concept of McDonald's and examine how the
subsequent operations of the company contribute to the functioning of the service concept.
Besides, the report will discuss how both the concept and the delivery system might be
improved.

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 McDonalds

EXECUTIVE SUMMARY:
McDonald's is one of the best-known brands worldwide. This case study shows how
McDonald's continually aims to build its brand by listening to its customers. It also
identifies the various stages in the marketing process. Branding develops a personality
for an organization, product or service. The brand image represents how consumers view
the organization.

Branding only works when an organization behaves and presents itself in a consistent
way. Marketing communication methods, such as advertising and promotion, are used to
create the colors, designs and images, which give the brand its recognizable face. At
McDonald's this is represented by its familiar logo - the Golden Arches.

Marketing involves identifying customer needs and requirements, and meeting these
needs in a better way than competitors. In this way a company creates loyal customers.
The starting point is to find out who potential customers are - not everyone will want
what McDonald's has to offer. The people McDonald's identifies as likely customers are
known as key audiences. McDonald’s has come up with advertising campaigns to help
combat the dropping sales such as its New Taste Menu, and this was geared toward the
healthier consumer. The message was that the company was tasty and nutritious,
friendly folks and fun could be found at McDonald’s.
Case:
McDonald’s has been forced to contend with a number of potential obstacles to growth
in recent years, most notably stark criticism and a less-than-favorable global economic
climate that has seen consumers reduce their discretionary spending. McDonald’s has,
however, employed strategies to counter these problems, and the decisions the company
has taken have allowed it to maintain a strong level of growth. The move towards a
healthier menu, achieved by making changes to existing items and introducing new
offerings, has helped satisfy some of its critics and attract those who are perhaps more

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 McDonalds

health-conscious than the ‘traditional’ McDonald’s customer, while new items such as
the McCafé range are helping the company attract new customers. The message has
been reinforced by a relentless and innovative marketing campaign, which has helped
make the McDonald’s brand one of the most recognized and valuable in the world.
According to the case, below stated problems aroused:
 What are the McDonald’s core brand values? Have these changed over the year?
 McDonald’s did very well during the recession in the late2000s.With the economy
turning around for the better, should McDonald’s change its strategy? Why or why not?
 What risks do you feel McDonald’s will face going forward?
Problem Statement:

McDonald’s has, employed strategies to counter the problem of customer spending, and

the decisions the company has taken have allowed it to maintain a strong level of
growth. The move towards a healthier menu, achieved by making changes to existing
items and introducing new offerings, has helped satisfy some of its critics and attract
those who are perhaps more health-conscious than the ‘traditional’ McDonald’s
customer, while new items such as the McCafé range are helping the company attract
new customers. The message has been reinforced by a relentless and innovative
marketing campaign, which has helped make the McDonald’s brand one of the most
recognized and valuable in the world.

ASSUMPTIONS:

 “Urban sophisticate adults” will be interested in McDonald’s expensive burger

The goal of the Arch Deluxe was to market McDonald’s fine cuisine to the urban adult
demographic. Unfortunately, adults weren’t interested in paying more for slightly different
burgers. The fact that McDonald’s is a fast-food chain limited its main target audience to
those who takes cheap and convenience over sophistication and fine taste. In any case,
people who want to eat refined food and don’t care about the price, would rather go to a
formal dining restaurant instead of a fast-food place.
 They only need to address new target audience for their new product
Another reason it failed was that the market campaign contradicted McDonald’s original
brand of “Child-friendly” and “Family-friendly”. Designing a new burger that excludes

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 McDonalds

children and emphasizing luxury consumer groups caused the lost of trust and broke the
bond with former customers.
SWOT ANALYSIS:

Strength:
 Universal franchise.
 Financial position.
 Innovative technology.
 Large market share.
 Specialized manager training.
Weakness:
 Imbalanced meals.
 Supply chain disruption.
 Imitable menu items.
 High dependence on suppliers.
Opportunities:
 Online food delivery industry.
 Focus on Asian markets.
 Innovative offers and products.
 Digital marketing.
Threats:
 Fast growing competition.
 Currency fluctuations.
 Environmental concerns.
 Focus on healthier dieting by consumers.

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 McDonalds

1.What are Mc Donald’s core brand values? Have these changed over the
years?
McDonald’s is a highly popular brand in the world. This brand has unique selling
proposition. McDonald’s core brand values are:

 McDonald’s core brand value is “hot high-quality food at a great value at the
speed and convenience of McDonald’s”.

 It delivers same quality products and services around the world.

 The core values of the brand have included quality, cleanliness, service and high
standard value.

 Their core values are reflected in their outlets, the pricing of their products and
their employees.

 Gaining high importance among masses via its 5Ps implementation.

Although the company lost focus during expansion in 80s, the company has learnt from its
mistakes. McDonald’s core values haven’t changed over years and it is still making effort
to improve it such as introduced a new McCafé coffee line, launched a worldwide
repackaging effort, improved the drive-thru service, and responded the health trend.
McDonald has reached this position because of the values the company thrives upon. The
consistent efforts and dedication when it comes to providing quality food that too speedily
to the customers, these all values have remained same since ages and these are the ultimate
success recipe for McDonald’s success.
Segmentation, Targeting and Positioning

Customer perception is a key factor for affecting a product’s success. Many potential
Market segmentation is the process of dividing up mass markets into different groups of
similar needs and wants. The motive behind segmentation is to know the customer in a
much more detailed manner, gaining a competitive advantage and be able to serve the
customer’s needs and wants in a better way.

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 McDonalds

SEGMENTATION
McDonald’s uses different types of segmentation to break a bigger market into small
customer groups. They are given below:
Geographic Segmentation: Geographic segmentation divides markets according to
geographic criteria. McDonald’s breaks its business into different geographical segments
like
 America
 Europe
 Asia/Pacific, Middle East, and Africa
 Other Countries (like Canada, Latin America)
Based on their geographic segmentation, McDonald’s optimizes its Menu and food
offerings to suit the regional tastes and needs. For example: Mc Aloo Tikki and Mc
Veggie are available in India, Bacon Smokehouse Burger and Quarter pounder (beef)
burger are available in the USA and Mc Arabia Chicken and Beef Burger are available in
Arabian countries.
Restaurants in several countries, particularly in Asia, serve soup. This local deviation
from the standard menu is a characteristic for which the chain is particularly known, and
one which is employed either to abide by regional food taboos (such as the religious
prohibition of beef consumption in India) or to make available foods with which the
regional market is more familiar (such as the sale of Mc Rice in Indonesia, or Ebi (prawn)
Burger in Singapore and Japan).

In Germany and some other Western European countries, McDonald's sells beer. In New
Zealand, McDonald's sells meat pies, after the local affiliate partially relaunched the
Georgie Pie fast food chain it bought out in 1996.In the United States and Canada, after

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 McDonalds

limited trials on a regional basis, McDonald's began offering in 2015 and 2017,
respectively, a partial breakfast menu during all hours its restaurants are open.
Demographic Segmentation:
Segmentation according to demography is based on consumer- demographic variables
such as age, income, family size, socio-economic status, etc. McDonald’s mainly
segments the market in below demographics

 Age: 8-45

 Life cycle stage: Newly married couples, youngest child six

or over Bachelor Stage: Young, single people not living at
home

 Students: Students, employees, professionals

Behavioral Segmentation:

 Degree of loyalty: Hard core loyal and

switchers.

 Benefits sought: Cost benefits, time

efficiency Personality: Easy going and
careless

 User Status: Potential and regular fast-food eaters

Psychographic Segmentation:
Convenience and lifestyle
McDonalds has adopted itself according to the convenience and lifestyle of the
consumers, as India has a huge vegetarian population so McDonalds came up with a
different and new product line which includes items like Mc Veggie burger and Mc Aloo
Tikki Burger. They also made McDonalds as a place to relax and even for entertainment.
TARGETING

After segmentation, the company needs to decide on the Targeting strategy. Companies
need to select the market segments that they want to focus on and put in their future
business strategy. The marketer faces a number of important decisions:

 What criteria should be used to evaluate markets?

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 McDonalds

 How many markets to enter (one, two or more)?

 Which market segments are the most valuable?
Below are three factors that are essential for evaluating a potential market segment.

 Segment size and growth

 Segment structural attractiveness
 Company objectives and resources.

McDonald’s target customers are:

 Children: McDonald’s offer a lot of goodies, toys, happy meals etc. to attract this
younger segment audience. The happy meal is ubiquitously known among kids
around the world. In an effort to appease health-conscious parents, fruits such as
apples and orange slices are offered as substitutes for French fries. Yogurt is a
replacement for the cookies that were classically included in the boxed meal, and
fruit juices and milk as alternatives for soft drinks. As young children are very
active with high energy levels, play grounds that allow climbing, crawling and
other moderately strenuous activities are typically included restaurant locations
 Young Adults (Age group between 18-29): Without much thinking, this segment
is the main source of income for any business, let alone McDonald’s. This
market segment may be having a disposable income which is lower than the
average, their consumption patterns are far much more than old the other market
segments. Advertising which includes trendy music and images of youths
enjoying McDonald’s food while engaging in vigorous and energetic activities is
the predominant integrated communications for the young adults.
 Adults: The third segment is the adults’ segment, in order to target this segment,
McDonald’s tweaked its menu and made its offering less in calories and healthy.
 Business Customers: In an effort to attract and retain these customers, lighter and
healthier food offerings are replacing traditional fat-laden foods at McDonald’s.
The franchise firm is attempting to lure business customers with foods that are
fresh, organic and sustainable. Advertising is geared toward information which
provide U.S Department of Agriculture guidelines for dietary recommendations,
and include sample menu suggestions which are based on gender, age, weight
and daily physical activity levels. Breakfast and lunch meals are most often
consumed by business customers.

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 McDonalds

POSITIONING

Positioning refers to decisions about how to present the offer in a way that resonates
with the target market. In order to position the products correctly in the target markets,
McDonald’s uses segment insights or information about the consumer behavior that are
developed through market research. The insights focus on the values, needs and lifestyle
of each segment.

Using these insights, McDonald’s create a positioning profile for every product and then
the creative team uses these profiles to create ads targeted to relevant segments as well as
to the general population. This concludes the positioning of McDonald’s. 
1. Mc Donald did very well during the recession in the 2000s. With the
economy turning wound for the better, should McDonalds change its
strategy? Why or why not?
The company created a more affordable menu for people who were affected by economic
downturn, The products of the company are preferable than the other options when people
have a thin time of it the company should definitely stick with their strategy even now
because if it has done well in financially trying times, it is favoured to do well when the
situation eases. The products can be priced cheaper than most of the other restaurants
would. Certain changes can be made to the existing strategy after in-depth study of the
current.
During 2000s McDonald’s did very well in the recession period but failed to acquire profit
so later o it applied the “Plan to win” strategy and again McDonald’s was on track.
McDonald’s changed its menu and strategy plans after a documentary “Supersize Me”
targeted McDonald’s for its unhealthy obese foods. It also put effort in new packaging
which included bold text and full colour photographs of real ingredients. The company
created a consciousness about its strategy focused on being cheap and healthy. So, it
should not change its strategies about price. If the company changes its focus and increases
the price, it can lose the loyalty of the customers. But the company can enhance its
strategies and increase the quality of services and products. After the financial downturn,
the customers could stick to the company, because of the strategy of the company focused
on being cheap and quality. It can be changed at a certain point. Changes can be made to

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 McDonalds

leverage on improved economic conditions of the global market to maintain their edge
among their competitors

Marketing Strategy: 5Ps

Product: Product consists of how the company must design, manufactures the products
which improve the experience of every customer. Product refers to physical product and
services provided by the business to its patron. McDonalds includes specific aspects of its
service and products like packaging, looks and desirability. This includes non-tangible
and tangible features of the services and product. McDonalds has intentionally kept its
product depth and width limited. McDonalds had studied the manners of the Indian
clients and totally provided various menus as compare to its menu presented in world
market. The company eliminates beef, mutton and pork burger from their menu. India is
just country wherein McDonalds offer vegetarian menu. As well as the cheese and sauce
use are pure vegetarian. The company constantly improves its product and service in
accordance to the fast-changing desires and tastes of its consumers. One of the good
examples is the launching of Chicken Maharaja Mac and the Chicken McNuggets.

As a food service business, McDonald’s has a product mix composed mainly of food and
beverage products. This element of the marketing mix covers the various organizational
outputs (goods and services) that the company provides to its target markets. McDonald’s
product mix has the following main product lines:

I. Hamburgers and sandwiches

II. Chicken
III. Snacks and sides
IV. Beverages
V. Desserts and shakes

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 McDonalds

VI. McCafé

Among the 5Ps, products are a fundamental determinant of McDonald’s brand and
corporate image. The company is primarily known for its burgers. However, the business
gradually expands its product mix. At present, customers can purchase other products like
chicken and fish, desserts, and breakfast meals. McDonald’s generic strategy and intensive
growth strategies influence the product lines included in this element of the marketing mix.
In diversifying its product lines, the company satisfies market demand, improves its
revenues, and spreads risk in its business. In terms of risk, a more diverse product mix
reduces the company’s dependence on just one or a few market segments. This element of
McDonald’s marketing mix indicates that the firm innovates new products to attract more
customers and improve its business stability.
Place: The place for the most part includes distribution outlet and channel of the
business. It is very essential because the service or the product should be accessible to the
consumers at the right time, right place and right quantity. In United States almost 50% of
McDonald’s outlets are located three minutes away from each other. There are specific
level of happiness and fun which McDonalds offers to its consumers. It offers value
position that based on the requirement of the consumer. This element of the marketing
mix enumerates the venues or locations where products are offered and where customers
can access them. Restaurants are the most prominent places where the company’s
products are distributed. However, the business utilizes various places as part of this 5P
variable. The main places through which McDonald’s distributes its products are as
follows:

I. Restaurants
II. Kiosks
III. McDonald’s mobile apps
IV. Website and app, and others

McDonald’s restaurants are where the company generates most of its sales revenues. Some
of these restaurants also manage kiosks to sell a limited selection of products, such as
sundae and other desserts. Some kiosks are temporary, as in the cases of kiosks used in
professional sports competitions and other seasonal events. This element of McDonald’s
marketing mix also involves the company’s mobile apps. These virtual places are where
customers can access information about the company’s products and buy these products.

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 McDonalds

For example, the company’s mobile apps for iOS and Android let customers claim special
deals, find restaurant locations, place orders, and pay for such orders involving
participating McDonald’s restaurants. Furthermore, customers can place their orders
through the website and mobile app. This element of the marketing mix supports
McDonald’s corporate vision and mission statements, especially in serving more
customers around the world.
Price: Pricing strategy is one of the most significant aspects when it comes to marketing.
This includes price breakdown, when any discount service or payment available. Business
should also consider the possible reactions from its rivalry when it comes to pricing.
Pricing strategy was developed in order to attract middle- and lower-class individual and
the result can clearly be seen the customer base which McDonalds has at present.
McDonald’s restaurant has specific value pricing as well as bundling strategy like combo
meal, happy meal, family meal and happy price menu in order to improve total sales of the
service and product
This element of the marketing mix specifies the price points and price ranges of the
company’s food and beverage products. The aim is to use prices to maximize profit
margins and sales volume. McDonald’s uses a combination of the following pricing
strategies:

I. Bundle pricing strategy

II. Psychological pricing strategy

In the bundle pricing strategy, McDonald’s offers meals and other product bundles for
prices that are discounted, compared to purchasing each item separately. For example,
customers can purchase a Happy Meal or an Extra Value Meal to optimize cost and
product value. On the other hand, in psychological pricing, the company uses prices that
appear significantly more affordable, such as $ .99 instead of rounding it off to the nearest
dollar. This pricing strategy helps encourage consumers to purchase the company’s
products based on perceived affordability. Thus, this element of McDonald’s marketing
mix highlights the importance of bundle pricing and psychological pricing to encourage
customers to buy more products improve total sales of the service and product.
Promotion: Advertising through television, radio, and billboards are great ways that
McDonald’s promotes their products and service. Over the years McDonald’s has used
several slogans to leave an impression in people’s heads. Some of these include “It’s a

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 McDonalds

good time for the Great Taste of McDonald’s,” “Food, Folks, and Fun,” “We love to see
you smile,” and the most recent slogan, “I’m Lovin’ it.” All of these slogans have been
used over the years to promote McDonald’s and by doing so people remember the name
and have become accustomed to visiting nearby locations.
Another strategy that McDonald’s used over the years was to promote their figure head,
Ronald McDonald. There has also been a television show called, The Wacky Adventures
of Ronald McDonald,” which have variously been released between 1998 and 2003. This
show was great promotion for children and McDonald’s because it only happened a very
limited number of times so kids were so excited when they actually got to experience it
and it allowed for McDonald’s to expand revenues.
McDonald’s continues to promote by using several athletes and celebrities to endorse
their products. During the 2008 Olympics in Beijing, McDonald’s featured nine Olympic
and Paralympic Athletes on their cups and packages. McDonald’s also held a Marketing
Campaign in Australia where there people could decide the name of a new burger about
to be introduced. By doing such things McDonald’s is creating a better brand image and
thus making greater profits.
This element of the marketing mix defines the tactics that the business uses to
communicate with customers. Among the 5Ps, this variable focuses on marketing
communications with target customers. For example, the company provides new
information to persuade consumers to purchase new products. McDonald’s uses the
following tactics in its promotional mix, arranged according to significance in the
business:
I. Advertising (most significant)
II. Sales promotions
III. Public relations
IV. Direct marketing

Advertisements are the most notable among McDonald’s promotion tactics. The
corporation uses TV, radio, print media and online media for its advertisements. On the
other hand, sales promotions are used to draw more customers to the company’s
restaurants. For example, McDonald’s offers discount coupons and freebies for certain
products and product bundles, as a way of attracting more consumers. In addition, the
company’s public relations activities help promote the business to the target market
through goodwill and brand strengthening. For instance, the Ronald McDonald House

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 McDonalds

Charities and the McDonald’s Global Best of Green environmental program support
communities while boosting the value of the corporate brand. Occasionally, the company
uses direct marketing, such as for corporate
clientele, local governments, or community events and parties. In this element of its
marketing mix, McDonald’s Corporation emphasizes advertising as its main approach to
promote its products.
People: McDonalds understands the significance of both consumers and employees. It
understands the truth that happy workers can serve properly and led in happy customers.
McDonald’s restaurant constantly does Internal Marketing as this strategy becomes
effective it will lead automatically to the success of external marketing.
McDonald’s does a lot of internal as well as External Marketing. They have found that it
is extremely important to show employees the proper respect and courtesy that they
deserve and by allowing for them to give input about things they think should be
improved or worked on is a great way of keeping everyone happy. If customers didn’t
feel a great sense of appreciation when they walk into a location, they are much less
likely to come back and be repeat customers. By doing research and taking surveys,
McDonald’s executives are finding out what people want and making sure that customers
and employees are completely satisfied. McDonalds has a target group of Families with
children because it is considered a treat for the children and easy for the parents. It is
considered more of an open, public atmosphere when compared to a fancier sit down
restaurant. They offer playgrounds and toys for the children at many locations.
McDonald’s also targets people without a lot of time who need a quick meal. They offer a
drive through for convenience, which brings you delicious food to you fast and at a
convenient price.
Ansoff’s Matrix in the Marketing strategy of McDonald’s
For McDonald’s the marketing strategy that the company can apply is the Ansoff’s
matrix. Based on the application of the Ansoff’s matrix, McDonald’s can develop
strategies for the future growth of the organization (Mcdonalds.com 2019). The reason
for the application of this strategy for McDonald’s is the fact that the company need to
regain its popularity in the international market since in many of the countries particularly
in Asia, McDonald’s have failed to maintain its dominance and had to forfeit its business
(Mcdonalds.com 2019). Thus, product-market strategy can be considered as a joint
statement that defines the product line of the company (Mcdonalds.com 2019).

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 McDonalds

The application of Ansoff’s matrix can be done based on four metric points that can help
in the growth of an organization. Each of the four-growth matrixes can help in
understanding a current scenario at the organizations and thus, based on its
understanding of the knowledge products can be offered at the existing market. For
McDonald’s the growth scenario can be the offering of products and services so that it
can gain its reputation back in the market and ensure that proper market development
takes place. It can increase its market share and ensure that existing market segments
can be identified by the sale of the products and services.

Figure: Ansoff’s matrix of McDonald’s

From the figure, it can be seen that each of the growth matrix have certain criteria which
is needed to be achieved by the organizations. For McDonald’s it is necessary that the
company apply the reduction of the pricing strategy so that it can ensure market
penetration (Mcdonalds.com 2019). At the same time, it can improve the promotion and
distribution support by the use of social media. As pointed out by Lovelock and Patterson
(2015) these strategies are considered as the least risky growth option that can help in the
development of McDonald’s in the competitive market.
2. What risks do you feel McDonalds will face going forward?
Health-conscious consumers might move to brands offering healthier options. McDonald’s
should offer more premium options and establish itself as a provider of normal goods
while maintaining the value that its customers expect. Changing tastes and lifestyles pose a
big threat. The company will need to adapt to changes to be able to tackle such problems
effectively Competition from local fast-food chains as they have to focus only on a small
area. Training employees rapidly and effectively during expansion drives. Rivals of
McDonald’s like Subway, Burger King are offering more customized offerings which
could bring problems to the brand. Rise in competitors in the market. The rate of its

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 McDonalds

expansion is very fast which might lead to dip in its quality. Company should also take
care of the cases where people use the company’s brand symbol as it may diminish the
brand value and hinder their upgoing trend.

MCDONALD'S CORPORATION PORTER’S FIVE FORCES ANALYSIS

Porter Five Forces Analysis is a strategic management tool to analyze industry and
understand underlying levers of profitability in a given industry. McDonald's Corporation
managers can use Porter Five Forces to understand how the five competitive forces
influence profitability and develop a strategy for enhancing McDonald's Corporation
competitive advantage and long-term profitability in Restaurants industry.
Porter Five Forces is a holistic strategy framework that took strategic decision away from
just analyzing the present competition. Porter Five Forces focuses on - how McDonald's
Corporation can build a sustainable competitive advantage in Restaurants industry.
Managers at McDonald's Corporation can not only use Porter Five Forces to develop a
strategic position with in Restaurants industry but also can explore profitable
opportunities in whole Services sector. The forces are given below:

 Threats of New Entrants: New entrants in Restaurants brings innovation, new

ways of doing things and put pressure on McDonald’s Corporation through lower
pricing strategy, reducing costs, and providing new value propositions to the
customers. McDonald's Corporation has to manage all these challenges and build
effective barriers to safeguard its competitive edge.
How McDonald’s Corporation can tackle the Threats of New Entrants:

1. By innovating new products and services. New products not only brings new
customers to the fold but also give old customer a reason to buy McDonald's
Corporation ‘s products.

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2. By building economies of scale so that it can lower the fixed cost per unit.
3. Building capacities dynamic industry where the established players such as
McDonald's Corporation keep defining the standards regularly and spending
money on research and development. New entrants are less likely to enter a. It
significantly reduces the window of extraordinary profits for the new firms thus
discourage new players in the industry.

 Bargaining Power of Suppliers: All most all the companies in the Restaurants
industry buy their raw material from numerous suppliers. Suppliers in dominant
position can decrease the margins McDonald's Corporation can earn in the market.
Powerful suppliers in Services sector use their negotiating power to extract higher
prices from the firms in Restaurants field. The overall impact of higher supplier
bargaining power is that it lowers the overall profitability of Restaurants.
How McDonald’s Corporation can tackle the Bargaining Power of the Suppliers:

1. By building efficient supply chain with multiple suppliers.

2. By experimenting with product designs using different materials so that if the
prices go up of one raw material, then company can shift to another.
3. Developing dedicated suppliers whose business depends upon the firm. One of the
lessons McDonald's Corporation can learn from Wal-Mart and Nike is how these
companies developed third party manufacturers whose business solely depends
on them thus creating a scenario where these third-party manufacturers have
significantly less bargaining power compare to Wal-Mart and Nike.

 Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by
paying the minimum price as possible. This put pressure on McDonald's Corporation
profitability in the long run. The smaller and more powerful the customer base is of
McDonald's Corporation the higher the bargaining power of the customers and higher
their ability to seek increasing discounts and offers.

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How McDonald’s Corporation can tackle the Bargaining Power of the Buyers:

1. By building a large base of customers. This will be helpful in two ways. It will
reduce the bargaining power of the buyers plus it will provide an opportunity to
the firm to streamline its sales and production process.

2. By rapidly innovating new products. Customers often seek discounts and

offerings on established products so if McDonald's Corporation keep on coming
up with new products, then it can limit the bargaining power of buyers.
3. New products will also reduce the defection of existing customers of McDonald's
Corporation to its competitors.

 Threats of Substitute Products or Services

When a new product or service meets a similar customer need in different ways, industry
profitability suffers. For example, services like Dropbox and Google Drive are substitute
to storage hardware drives. The threat of a substitute product or service is high if it offers
a value proposition that is uniquely different from present offerings of the industry.
How McDonald’s Corporation can tackle the Threat of Substitute Products and
Services:

1. By being service oriented rather than just product oriented.

2. By understanding the core need of the customer rather than what the customer is
buying.
3. By increasing the switching cost for the customers.

 Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down
prices and decrease the overall profitability of the industry. McDonald's Corporation
operates in a very competitive Restaurants industry. This competition does take toll on
the overall long-term profitability of the organization.
How McDonald’s Corporation can tackle the Intense Rivalry among the Existing
Competitors in Restaurants Industry:

1. By building a sustainable differentiation

2. By building scale so that it can compete better

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3. Collaborating with competitors to increase the market size rather than just
competing for small market.
 Service Differentiation: The service differentiation strategy implies that
McDonald’s shall offer superior services at each step of the customer touch points
right from the placement of order through the delivery of the products. Managers
of McDonalds are trained professionally. As a result, they can train employees
well. McDonald’s employees are evaluated high by customers because of their
behaviors as well as attitude. However, customers are not pleased at the idea of
waiting in long lines and insufficient employees to handle the volume of
customers. Just the minority, but sometimes the employees are rude forcing the
customers to go to a competitor’s restaurant next time. At the market which has
high market share and very huge number of customers such as USA, Canada or
United Kingdom, this issue occurs more frequently. McDonalds should find a way
to solve it. For example, the company has to rent more employees and increase
their salary in order to keep them working for a long time. This time is just
enough for them to get skills to service customers well. Besides, it is necessary to
increase the number of employees at the weekend or in the lunch time. More
employees means that pressures are shared and avoid the bad attitudes.
 Personnel Differentiation: The availability of well-trained staff is essential for
delivery of high-quality service to the customers. McDonald's should continue to
invest in the training and development of its employees to ensure high service
quality. Well-structured training programs shall ensure the long-term growth of
the organization.
 Integrated Promotional Mix: McDonald’s can implement an integrated
promotion mix that has a balance of both traditional and modern digital media

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CONCLUSION
McDonalds uses social media in the form of commercials, radio ads, and other ads posted
on Instagram, Facebook, and twitter to advertise many of its products. Through social
media McDonalds reaches a younger audience through its many promotional ads posted
online. By hooking in all different targets and not focusing on one particular group of
people to target it allows them to increase its sales. Because technology is so widely used
by many different groups of people, McDonalds would greatly benefit if it is up to date
with all of the information systems that are being used. For example, some McDonalds
use the E- Payment which allows customers to order and pay through the iPhone 6, 6plus
and apple watch.

This makes ordering easy for only a few because not every McDonald’s is implementing
this system. They cannot limit this only to Apple users because not everyone is 100
percent Working together is the only option to advance so they need to collaborate not
only with apple but other companies as well.

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REFERENCE

 Purdy, Chase (April 25, 2017). "McDonald's isn't just a fast-food chain—it's a

brilliant $30 billion real-estate company". Quartz. Retrieved November 23, 2021.

 Maze, Jonathan (February 26, 2015). "Why McDonald's won't ever get rid of its
real estate". Nation's Restaurant News. Retrieved November 23, 2021.

 Blomkamp, Samantha (June 13, 2016). "MacDonald’s HQ Move Is Boldest Step

Yet in Effort to Transform Itself". Chicago Tribune. Retrieved May 1, 2017.

  "Enrique Hernandez, Jr". McDonalds.com.

 Cain, Áine. "McDonald's drive-thus are 'not suitable for horses' — and 11 other
insider facts about McDonald's those employees know and most customers
don't". Business Insider.

  "MCDONALDS CORP, 10-K". February 22, 2019. Retrieved April 17, 2020.

  "McDonald's Corporation 2017 Annual Report Form (10-K)" (PDF). United States

Securities and Exchange Commission. February 23, 2018. Retrieved August
21, 2018

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AMAZON COMPANY

INTRODUCTION:
Amazon is a cloud computing giant and the largest American e-commerce company. It
was founded in 1994 by Jeff Bezos.
Originally known for selling books through its website (and later digital versions via its
Kindle e-reader), Amazon has built up a customer service, inventory, and shipping
empire that allows the site to offer everything from clothes to lawn furniture to janitorial
supplies. It also sells digital content like movies, music, and apps. Its Amazon Web
Services arm is a multibillion-dollar provider of cloud-based services for millions of
business customers around the world, including government agencies and universities.
And it’s a major player in consumer electronics--not only by offering devices such as
Fire tablets and TV boxes, but also via its Alexa AI assistant service, which made news
at the CES 2017 gadget show by being built into everything from LG refrigerators to
Ford cars.
Amazon is even a Hollywood player, taking home two awards at the 2017 Golden
Globes. Yet the basics of Bezos's business philosophy--focusing on long-term customer
loyalty over short-term profits and never-ending expansion into new businesses--have
been surprisingly consistent over the years. And Amazon's obsession with efficiency
explains why it's now delivering products in just two hours via its Prime Now service,
and why it hopes to be among the first e-commerce companies to deploy its own fleet of
drones with Amazon Prime Air, a future fleet of autonomous aerial vehicles that will
deliver packages under five pounds.
In an interesting twist, Amazon has made significant investments in brick and mortar,
opening its first bookstore in Seattle in late 2015 and since then expanding to 13
locations. In 2017, the company completed its acquisition of Whole Foods and in early
2018 opened an Amazon Go grocery store to the public at the company's headquarters in
Seattle. 

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Executive Summary:
In this world of digitization, digital marketing is a vogue that is sweeping across the whole
world. The trend of digital marketing is growing day by day with the concepts of Internet
marketing that is turning into an important platform of digital marketing along with the
electronic gadgets like the digital billboards, mobile, tablets and smart phones, gaming
consoles, and many such gadgets that help in digital marketing. Amazon with its
innovative digital marketing has created a niche market in online stores competing with the
conventional stores showing the power of online marketing. The case study analyses how
Amazon.com has brought in an array digital and online marketing strategies to succeed
and make it big in the digital marketing sector. The case also discusses how Amazon has
had a huge success in the online marketing sector as they brought in new insights into the
digital marketing field. And few years from now it will be eventually seen that the
conventional marketing being replaced by digital marketing. Digital marketing is going to
be top on the agenda of many marketers, and they might be looking for innovative ways to
market online, reduce cost per   lead, increase click-through-rates and conversion rates,
and discover what’s hot in digital marketing.

Case study of Amazon.com:

Amazon was founded by Jeff Bezos in Bellevue, Washington, in July 1994. The company
initially started as an online marketplace for books but later expanded to sell electronics,
software, video games, apparel, furniture, food, toys, and jewelry. In 2015, Amazon
surpassed Walmart as the most valuable retailer in the United States by market
capitalization In 2017, Amazon acquired Whole Foods Market for US$13.4 billion, which
vastly increased Amazon's presence as a brick- and-mortar retailer.[20] In 2018, Bezos
announced that its two-day delivery service, Amazon Prime, had surpassed 100 million
subscribers worldwide

Amazon.com is an Indian e commerce company headquartered in Bangalore.

Amazon.com, India’s largest e-commerce player for physical goods started with books in
2007 and entered the consumer electronics category with the launch of mobile phones, in
September 2010. Since then, it has grown rapidly with the introduction of innovative

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features like Cash on Delivery (Cod), 30-day replacement guarantee and its own delivery
network. Today, their portfolio is spread across 12 categories – from books to music,
mobiles, computers, cameras, home & kitchen appliances, TV & home theatre systems,
personal and healthcare products

and the newly launched stationery items. In addition to these, Amazon has also made a
foray

into the emerging digital content market with the recent launch of Flute, the digital music
store. The founders of Amazon have probably conquered their dreams with the amazing
success of Amazon. Amazon is something which has really opened up the Indian e-
commerce market and that also in a big way.Amazon was born with an initial investment
of 4 lakh. It was never going to be easy since India has had bad past experiences with e-
commerce trading. It was not an easy segment to break into, people were very particular in
paying money for something which they had not seen and received. The trust was missing
in the Indian customers. So, what Amazon had to do was to instill trust and faith in their
customers. Amazon began with selling books, since books are easy to procure, target
market which reads books is in abundance, books provide more margin, are easy to pack
and deliver, do not get damaged in transit and most importantly books are not very
expensive, so the amount of money a customer has to spend to try out one's service for one
time is very minimal. Amazon sold only books for the first two years. Amazon started with
the consignment model (procurement based on demand) i.e., they had ties with 2
distributors in Bangalore, whenever a customer ordered a book, they used to personally
procure the book from the dealer, pack the book in their office and then courier the same.
In the initial months the founder's personal cell numbers used to be the customer support
numbers. So, in the start they tried their best to provide good service, focus on the website
- easy to browse and order and hassle-free, and strove hard to resolve any customer issues.
Since there were not any established players in the market, this allowed them a lot of space
to grow, and they did in fact grew very rapidly.

The company started opening its own warehouses as it started getting more investments.
The company opened its first warehouse in Bangalore and later on opened warehouses in
Delhi, Kolkata and Mumbai. Today the company works with more than 500 suppliers. As
on date more than 80% orders of Amazon are handled via warehouses which help in quick
and efficient service.Amazon derives around 50% of its revenue from selling books online.

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Amazon is the Indian market leader in selling books both offline and online, it enjoys an
online share of around 80%. Amazon ships around 40000+ items on a daily basis.  The
average daily revenue is about INR 2.5 crore. 15+ million Titles are available on Amazon
books. There are 2.6 million registered users on Amazon.4500 employees working in
Amazon at the moment. Apart from this Amazon have 1.5 + million fans on face book and

about 67000 followers on twitter which shows its vast reach in social media. Social Media

Marketing is used to the hilt, by Amazon.com In its social media initiatives, Amazon.com
aims at facilitating an easier conversation channel for customers and users. Conversations
are to the point and are targeted at specific issues, thoughts and ideas. Amazon.com began
activities to make its presence felt on Facebook and Twitter about a year ago. The
company has also used LinkedIn to connect with people. The popularity of the site has
grown through recommendations i.e., people recommending the site to their family, friends
and co-workers. And what better platform than social media to leverage ‘word-of-mouth’!
Amazon.com recognized that using social media is about being human.

Questions:

1. What is the digital marketing strategy of Amazon?

2. What are the strategies of amazon to overcome the competition of conventional
stores?

ASSUMPTIONS:

 Amazon Thinks of Ideas as Assets

Most companies think of their assets as being things like their plants, equipment, and yes,
their people. Amazon also places an asset value on ideas. Bezos is the idea or in chief. His
zest for unconventional concepts, for enabling technologies, and for better ways of
operating, is infectious. “I could fill this whiteboard in an hour with 100 ideas,” Bezos
boasted to one interviewer, and there is little reason to doubt him.

Bezos believes that a continuous stream of ideas is what fuels growth. He sees his function
as creating the cultural alignment to value and respect ideas at all levels, and act with a

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sense of urgency to speed their implementation. Bezos sees his role as channeling this
“opportunity mindset” to every individual, department, business unit, and outpost.

 Social factors:
They have diverse impacts on Amazon’s performance. The changing trends in online
shopping present an opportunity to the company. People’s faith in online transactions is
increasing, and this is presenting an opportunity to online retailers to grow their
sales.  Developing countries are also embracing online transactions, and this trend is
increasing the market potential in these countries. Amazon has been focusing on developed
countries with little or no focus on developing countries. Developing countries are growing
fast leading to an increasing purchasing power thus creating a valuable opportunity for
Amazon and other online sellers.

 The technological environment:

The environment is dynamic an online seller who is serious about long term success must
closely monitor this environment to ensures strategies reflect the environmental conditions.
The increasing internet connectivity in developing countries provides an opportunity for
growing sales in these countries. There has also been an increasing information technology
in both developing and developed countries, and this is providing a valuable opportunity
for online sellers to enhance their operations. The dynamics in technology increases the
risk of technological obsolescence, and this presents both opportunities and threats to
Amazon. Concerning the opportunity, the company sells phones and tablets among other
technical devices implying that the demand for the products would increase as customers
seek to acquire more modern devices. On the other hand, the risk can lead to the company
holding an obsolete stock that would lead to huge losses.

SWOT ANALYSIS:
Amazon.com has become the king of its own private little industry. The only problem with
being the king is that everyone wants your throne. While Amazon.com has many strengths
and opportunities it has threats and weaknesses, too.

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Strengths:

 Well established web brand.

 Loyal customers base of over 12million shoppers.

 Distribution facilities to handle growth and fulfillment.

 Leader in use of technology to delivery targeted content.

 Excellent offline customer service.

 Amazon has moved away from being a low-price supplier of books toward a focus
on delivering outstanding service at a price.
Weaknesses:

 Too much diversity in their product line and Amazon.com could risk damaging its
brand name. There is the potential for confusing their clients.

 Shipping costs could be a deciding factor on whether a customer buys from

Amazon.com or goes to a traditional store. More online retailers are offering free or
discounted shipping such as Wal-Mart, offer site-to-store free shipping.

 Need to restructure business to drive toward profitability have meant upward

pressure on prices.

 No offline brand presence.

 Insufficient community added value.

 No telephone support.

Opportunities:

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 Opportunity to establish itself as a global mass merchant leader in the online

shopping arena.

 Building community events around the brand would help create brand affinity as
well as loyalty.

 Establish 24×7-hour telephone support for customers and order processing.

 Frequent shopper discounts will increase retention and repeat purchases.

 Further offline partnerships can potentially help Amazon by allowing customers to

return products offline stores.

 Amazon has an opportunity to create a higher international market segment.

 Also, can make Strategic alliances with companies.

Threats:

 Competitors such as Barnes and Noble, eBay.com, and half.com.

 Book publishing companies could start up own website and get rid of the
middleman companies.

 The continuous changing of trends in the marketplace.

 Amazon’s lack in-depth community leaves it exposed to customer being attracted

to competitors with more in-depth content.

1. What is the digital marketing strategy of Amazon?

There are various strategies that Amazon has implemented, few are stated below:

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 AMAZON

 Customer’s Review:
Amazon customer review service has been one of the fundamentals of digital marketing
services. While browsing the Amazon website a user comes across reviews, before and
after the purchase.
Reviewing services are now very common and have been implemented by various websites,
amazon has provided a blueprint for the companies that how to implement a model that
would efficiently.
A customer can rate, write reviews, and upload a picture of the product as per their
experience. Reviews are considered to be very important because while purchasing
something online customers can’t touch or test the product before they have made the
purchase and the product has been delivered; reviews provide indicators of the quality of
the product to the buyer.
Amazon also provides community moderation by encouraging customers to vote with the
option “Helpful” on the relevance and utility of the reviews left by other customers and
customers can ask a direct question about the product as well.
 Free Shipping and Discounts:
The free shipping method helps in increasing the customer purchasing limit. Although if it
is applicable on order above 1000 rupees, the customer would try to reach that amount by
increasing basket size to avoid additional charges. Eventually, it is a very beneficial deal for
them.
Amazon provides multiple discounts on various products which are not possible to get in
offline stores; hence more customers are driven towards purchasing offline.
 Communication with the Customer:
Nowadays every e-commerce company notifies customers about their order confirmation,
delivery date estimates, shipment, and delivery notification.
However, 15–10 years ago it wasn’t possible to provide such services easily by every
company. Most importantly, Amazon has been setting models for other e-commerce
companies back then. As an example, in the American customer satisfaction index, amazon
got a score of 88. And it was the highest customer score ever for any online or offline
services industry.
 Creative Digital Marketing Campaigns:
Through Digital Marketing Campaigns, a company promotes its product on online
platforms. It facilitates them with more sales and increases brand awareness.

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In India successful campaigns of Amazon are:

#AurDikhao
#DiwaliOnAmazon
#EkBarAmazonTryTohKar
Digital platforms that are used for Digital Marketing campaigns are Email, social media,
Google AdWords’, etc.
 Innovation and Technology:
Amazon has achieved various milestones in the world of technologies and eventually
making its lead in the Digital Marketing world. Using Machine learning, Artificial
Intelligence, and Computer vision.
Some examples are stated below:
Amazon Go: It is a new kind of store with no checkout and no line. It uses the “Just Walk
Out” technique. Using the app, customers can enter the store, take the product they want. It
will automatically add to the virtual cart, so, they can just walk out of the store.
Amazon achieved the vision by Deep Learning Algorithms, Computer vision, and sensor
fusion.

Amazon Prime: It is a paid yearly subscription that provides fast and free shipping as
compared to normal Amazon service and also provides accessibility of unlimited streaming
of TV shows and movies.

Alexa: Alexa is Amazon’s voice responding virtual assistant. Just like Siri is for Apple,
Google Assistant for Google.

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 AMAZON

Kindle: It is an e-reader that enables users to browse, buy, download, and read books,
newspapers, and magazines from the Kindle Store.

Amazon Food: Amazon begins the food delivery business in India. Getting in competition
with Swiggy and Zomato. Importantly, the company has launched services amid COVID-
19 when food ordering has been down by 80%. And also, providing services on the regular
app with availability at selective parts of Mumbai and Bangalore.

 Amazon “Make in India” Initiative

Jeff Bezos visited India in January 2020 and faced a backlash from Indian traders because
of the e-commerce company’s popularity and expansion, many small traders’ occupation
has been jeopardized.
He then assured that Amazon will plan to sell $10 billion worth “Made in India” goods
globally by the end of 2025. With this strategy, Indian sellers will get access to millions of
customers across 180+ countries. Moreover, Amazon announced $1 billion for digitizing
Small and Medium Enterprises. After completion of this initiative, numerous traders will
get the opportunity to sell their products to a huge audience in India as well as globally.

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In conclusion, Amazon through its successful digital marketing approach will give an
opportunity to Indian traders to make its huge impact on the global market.

2. What are the strategies of amazon to overcome the competition of

conventional stores?
 They focus on the customer:
Many companies talk about customer focus but Amazon walks the talk. Its customer
obsession is unparalleled. It led to the establishment of Amazon Web Services (AWS), a
business that is worth over $10 billion now.
A CNBC article says, "AWS was designed to solve the problems with too-expensive in-
house application hosting and open-source products that weren't robust enough to easily
support fast-growing or already-large companies."
Amazon's culture of listening to customers, instead of competitors has enabled it to get
ahead of the market as it's able to think for itself, instead of blindly following what other
brands are doing.
"Many companies," Bezos once said, "describe themselves as customer-focused, but few
walk the walk. Most big technology companies are competitor focused. They see what
others are doing, and then work to fast follow."
If you want to stay a step ahead of your competitors, focus on your customers first. Doing
so can have benefits well beyond competitive advantage. I've seen this in action--back in
March, I wrote about how Live Chat was been able to grow to over 19,000 customers
through obsessive customer focus rather than marketing.

 Take risks:
Despite monumental failures, Amazon willingly takes risks.
Although investors are calling for him to curb spending, Bezos believes avoiding failure is
the wrong strategy. He says it would be a bigger problem if a company stopped taking
risks.
He made this observation at Business Insider's Ignition conference in December 2014.
"A few big successes compensate for dozens and dozens of things that didn't work," he
said, pointing to Amazon's gains from its Kindle tablet, data center business and third-

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party online marketplace. "Bold bets ... pay for a lot of failures. I've made billions of
dollars of failures at Amazon.com."
It does not matter the mistakes you make while taking risks, what matters are the
breakthroughs you record from a few of the things you're willing to try.
Last year, I convinced the development team at my company to stop what they were doing
to work on a crazy marketing idea. While the end result didn't fully live up to expectations,
the experiment drove our team to discover a new revenue opportunity. That's still a win.
 Give workers a stake in the company:
In A Stake in the Outcome, authors Jack Stack and Bo Burling ham say creating a culture
of ownership enables organizations "to tap into the most underutilized resource in business
today--namely, the enthusiasm, intelligence, and creativity of working people
everywhere."
Amazon leverages this to fight off competition in the marketplace. It is obsessed with its
internal customers (employees) alongside the external. It uses stock options in hiring.
Whether it's stock, bonuses or profit sharing, giving workers a stake in the success of your
company motivates and empowers them to put in their best.
 Differentiate or die:
Author Jack Trout writes in “Differentiate or Die” that differentiation lies at the heart of
successful marketing. He outlines the many ways you can differentiate and carve out your
own image in a crowded marketplace. He also warns how difficult it is to achieve
differentiation by being creative, cheap, customer-oriented, or quality-driven; things that
your competitors can do as well.
Dr. Tony Grundy, a lecturer at Henley Business School, says Amazon is worth studying
not just because of its competitive scope, but also because of its differentiation strategy.
A differentiation strategy is where the product or service is either perceived to be, or is, of
superior customer value and has a definite price premium. A cost leadership strategy is
where the price may be similar or usually lower than the competition, but costs are
certainly lower.
The International School of Management Excellence says cost leadership, customer
differentiation, and focus strategies have helped Amazon to enhance its competitive
advantage.
To fend off competition, you've got to differentiate and stand out in the marketplace, like
Amazon.

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 Rise of Social Media Marketing in India

At 82 million monthly active users, India is the second largest audience base for Facebook
in the world and it may possibly dethrone US on Facebook soon. India is positioned
second for user population of LinkedIn at 20 million users, while for YouTube and Twitter
user population from India goes up to 52 million and 42 million. There is easier and cost-
effective access to middle class to upper middle-class people in India, that are mostly
young and capable to spend large amounts, and they’re target audience to almost all
brands. Interestingly, local businesses are using social media especially Facebook to sell
online in India. Hence, we can expect an unprecedented growth in social media users in
India that will help social media marketing to experiment and become more popular tool
for branding, online selling and customer engagement among businesses/brands.

 Content Marketing
Content Marketing will be throughout in limelight. In India, people are extensively
searching, researching and consuming content – text, audio (not that popular), image and
video. Largely, social media networks are pushing for improved, meaningful and creative
content marketing. Text is the foremost tool in SEO that will easily help you acquire
higher ranks, reach targeted audience, engage your audience and convert them. It’s at the
top of all the game that you maybe planning. Images are usually subordinate to text and
complement it, and they are highly popular among Indians. Images are known to trigger
imagination and help in building trust. India has 54 million viewers that are spending
uncountable hours to watch 3.7 billion videos per month. Brands in India are now realizing
the power of video marketing and now developing creative and innovative video
marketing campaigns to build their brand identity. All – text, image and video – constitute
your content marketing. And more and more brands, businesses and organizations in India
will understand its importance and will use it optimally in coming years.

 Key Performance Indicators and Return on Investments

Brands and businesses were only investing without caring much for the returns on digital
marketing. The ‘conversion rate’, ‘key performance indicators’ and ‘return on investments
will catch in trend across all sections of digital marketing in India. With the availability of
deep analytics and increasing awareness of clients in India, the marketers will have to
explain digital marketing ROI. Furthermore, Indian digital marketing consultants will use
KPIs and ROI to improve their conversion rate, enhance customer experience and brand

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reputation. Today to convince an aware Indian client, its necessary to elaborate the
possible cost-per-lead, each digital spend, return on each spend, and key performance
indicators.

 Viral Video Marketing

With up to 250 million Internet users in India, it’s easy to go viral with something
awesome. Brands and businesses will be planning to use viral video marketing with the
help of social media networks more effectively to reach large audience in India.
Essentially, with video marketing in India it has become easier to build brand identity,
improve brand storytelling and engage audience, and enhance brand loyalty. Viral video
marketing will increasingly find many takers in India, given many advantages. At present,
big brands, Indian cinema, Indian music, government of India, political parties, Indian
educational organizations, and many others are successfully using video to entertain,
educate and emotionalize audience in India.

 Responsive/Mobile Marketing
Firstly, the easy availability of smartphones, tablets, phablets, and touchpads that is
redefining mobility in India. Secondly, there is large audience (approx. 130 million users
according to IAMAI and IMRB) in India accessing Internet through mobile devices.
Thirdly, Gartner says India to have 72 per cent mobile penetration by the year 2016.
Fourthly, India’s mobile video consumption has doubled and more than 65 per cent of
Indians are sharing videos on mobile. Lastly, according to Facebook, there are 62 million
Indians accessing Facebook through mobile. Mobile is the way forward in India, to reach
Indians across India. In 2014, mobile applications, mobile advertising, mobile video
marketing, and marketing on popular mobile networking apps such as WeChat, Line,
WhatsApp, Vine, Snapchat, Instagram and others will increase exponentially. Return on
mobile marketing investment will remain an issue that may disturb marketers. However,
with m-commerce, mobile payments, and innovations by Google India, Amazon and many
other market leaders, some breakthrough could be seen that would increase ROI on mobile
marketing.

 Localization
In India, localization has become endemic. It will gain further ground with the help of
Google India search engine, Google Maps, online classifieds (e.g., Quicker), local online

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search engines (e.g., Just Dial), local listing websites (e.g., Grotal), vertical search engines
(e.g., Zomato and Think Vidya) and others. Moreover, websites will increasingly localize
as well. In digital marketing industry, localization will increase among brands/businesses.
Many local joints, bars, clinics, super stores, shops, restaurants, clubs, pubs, companies,
organizations etc. will also invest in digital marketing to reach their audience online and
specifically on mobile. In localization – timing, limited budget, content strategy, mobile
marketing and advertising – will be great challenges that may disturb marketers.

 Personalization
However, there are privacy issues attached with it, but despite that, there are many takers
for personalization to improve customer experience and delight. Google acquired NEST
labs for US$ 3.2 billion. NEST labs manufacture smart home thermostat. Google uses
NEST to know more about its customer for better customer experience. The point is
personalization will not expand world, but also in India at much higher speed especially in
e- commerce industry. As all are trying to enhance customer experience to push sales, by
providing them more personalized services. For effective personalization, businesses have
to deeply understand their customer behavior and clickstream, and analytics will help them
a lot to understand this. Variety of analytics and testing will be used in further years such
as heatmaps, deep analytics, customer journey, A/B testing etc. in order to know what their
customers’ wants, needs, and requirements in any particular time, season and moment.

 Online and Social Customer Relationship Management

Many Indian e-commerce websites, portals and others do not have effective online
customer- relationship management systems. Moreover, many customers are now
comfortable on chat, email, mobile chat and social media. Therefore, companies are
expanding its outreach to improve their CRM systems and enhance customer delight.
Social CRM would be strategic of all, as many Indians are comfortable in using social
CRM on the go.

 Conversion Rate Optimization and Testing

Recently, conversion rate optimization and testing in digital marketing industry of India is
picking up fast due to e-commerce boom in India. Conversion rate optimization and testing
will be strategic to improve digital strategy, enhance outcomes and sales, and perk up
customer delight. In India, many SEOs and digital marketers tend to ignore analytics, but

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in future, analytics will regain its due importance in digital strategy. Moreover, deeper
analytics is bound to take place as Google has improved Google Analytics for deeper
understanding of customer online behavior and background. In addition, analytics will
largely drive CRO and testing in India. The CRO in mobile in India might also take place,
as we know it increasingly in India users are purchasing through mobile apps on their
smartphones and tablets. The biggest challenge for CRO and Testing will be the limited
budget and ignorance.

 Innovations in Online Payment System

There are lots of innovations in online payment system with new launches expected this
year and boost in Indian e-commerce industry. Just recently, Visa and MasterCard
launched new mobile payment services. With this technology, you can make payment
through KitKat OS and NFC powered Smartphone. It uses Host Card Emulation feature of
Android to save card details remotely in encrypted form and can be disabled remotely if
phone is lost. In 2013, Amazon launched ‘Pay Zippy’, which is an online payment system
made for Indian e-commerce websites. Similarly, Pay India also emerged as prominent
contender, which is increasingly becoming popular among small/niche   vendors. PayPal  
will   have   to optimize its system according to Indian situation and needs. For digital
marketing industry, all these happenings will help them increase conversion rate of e-
commerce websites and improve customer delight. Because most of the time in India, the
cart abandonments take place because of the limitations in the online payment systems.

 Ever-Evolving UX and Web Designs

In the world of digital marketing, user experience and web design are ever evolving, where
interactivity, rich content and speed are essential components. There are some innovations
in user experience and web designing. Mostly, e-commerce websites in India will drive
these innovations, and more will jump into the bandwagon. In CRO and testing, user
experience and web designing are strategic, which directly enhance incredibly conversion
rates with simple and innovative changes and improvements. In India, news sites and e-
commerce have been experimenting with web and user experience designing.

 Humanization of Digital Marketing

Digital marketing will humanize further, where brands/businesses will understand the
importance of conversations and engagements. Moreover, Google contents that have

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higher likes, shares, comments and other customer engagement signals. Companies will try
to connect and converse more through digital marketing with their target audience. And we
can expect, this will only increase customer retention, brand loyalty and word-of-mouth.
Digital strategies in future will be based on co-creation and collaboration concept, where
humanization of business, interactivity and engagement will help in delivering value.

 Multi-Channel/ Integrated Marketing

In India, multi-channel/integrated marketing will grow in popularity and effectiveness. As
many brands/businesses in India are increasingly embracing this concept to attract and
engage customers on all online and offline platforms. All businesses/brands in India, will
try to integrate their marketing efforts, especially their digital marketing with offline
marketing. In India, brands are realizing of importance integrated marketing
communications, in which conveying single message across all platforms helping them to
improve brand experience, brand loyalty, keep brand top-of-the- mind, and increase sales.
However, there are challenges such as mobile and disintegrated marketing teams, which
are plaguing the effectiveness of integrated marketing leading to no credible business
value generation. Nevertheless, given advantages of multi- channel marketing/integrated
marketing, large number of businesses in India will embrace it.

CONCLUSION
In a recent research, digital marketing shows that in India businesses are getting serious
about digital marketing and investing in it heavily. In the current scenario, internet is pretty
small right now and the larger share of the target market is still available offline. However,
going forward, in the next two to three years, digital consumption and spends will go up in
India and, for this to happen, both quality and quantity of content needs to grow in India.
Once that is achieved, the overall industry spends on digital standing at around 15 to 20
per cent in the next two to three years. Currently the digital medium has its constraints
with the number of people accessing and spending time on this. It has to become a large
enough medium in terms of consumption to compete with TV. Though people are buying
online, a large proportion of their time is still spent offline. Having said that, today, the
target group for most online companies is people living in the metros and slowly it is
becoming important for a brand to be built online also. And we can see that in other
business segments as well.

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