Marketing Management Caselets 15102009

Section B: Caselets (40 marks) • This section consists of Caselets. • Answer all the questions. • Each caselet carries 20 marks. • Detailed information should form the part of your answer (Word limit 200 to 250 words).

Caselet 1 NBC Industries had pioneered the battery technology in India for over 75 years. It was formally known as NBC Chloride Industries, a subsidary of FKS, U.S. It had been a leader in packaged power technology and was India’s largest storage battery company with internationally reputed brands. Till 1995, NSC’s major brand Suraksha had been the market leader in the automotive segment but was a niche player in the segment. Fifty percent of its sales came from OEM and only fifteen percent came from the replacement sales. The remaining thirty five percent came from industries, motorbikes and exports. NBC was forced to follow the downturn in the automotive sector. It was increasingly felt that the company needs to expand its market base and in an effort to do so, it decided to increase its penetration in the industrial segment. It went in for a technical collaboration with a leading industrial battery manufacturer, whose brand Pickwick, enjoyed a dominant market share in the industrial segment. It also acquired the production capacity of Pickwick. Thus, after the technical collaboration Pickwick which was a competing brand became a partner brand for Suraksha. Another advantage of industrial segment was that they were generally high capacity batteries, which gave

higher profit margins to the firm. The technical collaboration , required NBC to sell the industrial batteries under the brand name of Pickwick. Since, NBC was able to capture a good market share in industrial market. Product The NBC had a product range covering a capacity of 2.5 Ah to 15,000 Ah. Using the latest technology, NBC now manufactured industrial battery for power, telecom, computer industries, railways, mining and defence. Suraksha and Pickwick were the major brands of the firm and catered to both the automotive and the industrial segment. The industrial segment had been showing growth and NBC had capitalized on this growth. The total turnover of NBC was 30 crores. Suraksha, NBC’s original brand, enjoyed an image of reliability and trustworthiness while, Pickwick continued to enjoy its heritage of being a Japanese brand. Semester 1 Examination paper IIBM Institute of Business Management Pricing As the two brands were technically identical, the company policy was to keep the MRP for both the same but the margin to the dealer for Pickwick was five percent more. Distribution After the technical collaboration, the company had four regional officers and twenty five branch officers. Currently, Pickwick had 1000 authorised and 500 sub-dealers. Suraksha on the other hand, had 1500 authorised dealers and 700 sub-dealers . Battery up to 20 Ah were sold through the dealer

network and those upto 20 Ah and more were sold directly by the product managers (Exhibit 1). Thus a branch office took care of the industrial batteries upto 200Ah capacity and the replacement market of the automotive segment. For the automotive sales, the company had separate sales personal for Pickwick and Suraksha as the volume were generally very large. The same sales personal handled industrial sales of both Pickwick and Suraksha. Consumer The buyer of battery was generally known to be loyal to the brand in the replacement market but in the industrial sales a committee took the purchase decision and therefore there was a time lag between inquiry and purchase. The NBC policy was generally not to convert the Pickwick users to Suraksha unless the demanded brand was not in stock. There were times when the branch manager would push Suraksha when his opinion was sought as it offered more profit to the company. Competition In the industrial segment NBC was facing competition from its unbranded imported products as well as the Indian manufacturers. Anti dumping duties were put on imported products but batteries from SAARC countries like Bangladesh and Thailand continued to enter the Indian markets. The unbranded batteries were forty percent cheaper and were maintenance free and offered tough competition to the branded products but gave no guarantee. Ajay Bhandari had recently joined NBC company as the branch manager at Nagpur. He was reviewing the monthly sales report for Suraksha and Pickwick batteries. He found that the Pickwicks sales were slipping continuously while, sales of

Suraksha remained constant and this pattern seemed to be similar nationally. Taking concern of the matter, chief executive officer (marketing) had called for a meeting of all the branch managers and regional managers to evaluate the reasons for the same and call for their suggestions. Ajay Bhandari knew that the two brands have to be promoted simultaneously as it was evident that the sales of Suraksha brand increased at the cost of Pickwick and achieving the Pickwick target was going to be difficult. After a lot of pondering,, Bhandari put forth the following alternatives in the meeting. • Separate executives should sell the brands even in the industrial segment. This would increase the overhead cost but the commitment to one brand may help the sales executive to sell the product more convincingly. • Secondly, the two brands should be positioned differently in the industrial market and thus, ensuring that they were not competing with each other in the market and no selling efforts were wasted. Although, this needed to be taken up the regional level because two similar brands in the same segment appeared meaningless. Semester 1 Examination paper IIBM Institute of Business Management • Promotion could be used to create perceptual difference between the brands but this would require substantial promotional expenditure over a long period before any thing could be achieved. 1. Do you feel that Suraksha is cannibalising the Pickwick Brand?

2. What are the problems generally faced by the companies going for multibranding?

Caselet 2 Rajesh Kasliwal, a young and dynamic entrepreneur was born in 1956. He was a medical graduate from M.G.M medical College, Indore. He hailed from a business class family and had his private practice as a physician, but a thought kept on tormenting his mind, to enhance the diagnosis services. Thus , Kasliwal started a diagnostic centre with a small set up in 1980. To grow further, he started Apollo Medical Investigation Centre in Late 80s’. The center had an immaculate track record of delivering the best in diagnostics. Rajesh realized that Indore market needs a state-of-the-art diagnostics center and thus, Vishesh Diagnostic Solutions came into existence in August 2003 and was located in the heart of the city near Geeta Bhawan, Indore (M.P). the objectives of the centre was to enhance the quality of patient care. Kasliwal always believed in providing best quality services for which he imported a Multislices CT Scanner, a highly advanced MRI Machine and Colour Doppler’s. The centre had a tie-up with leading doctors of the city who visited the centre from time to time to treat the patients of O.P.D. prices were not based on updation rather it was based on information provided by the examiners. The centre had collaboration with Sahayata, an NGO, to tap the price sensitive customer who were given 50% reduction in the price. The marketing executives with a graduate degree and experience in Pharmacy interacted with doctors, hospitals, banks and insurance companies, and informed them about the latest services rendered by the centre,

the PR executives interacted with the Top Executives/Corporate Heads regarding their health checkups. The diagnostic centre included good seating space, well-designed interiors, good cafeteria, centrally air conditioned floors, high level of cleanliness, which evoked the customers’ feelings. The management emphasized on happiness of the clients, confidence and reliability of the customers and the doctors and believed in providing the ultimate solutions. Vishesh Diagnostic Solutions had six departments, which included Radiology, Mammography, Sonography, Dispatch and Customer Care Cell . Each department had their own process owner, who briefed the patients about the various tests and procedures. The centre believed in maintaining the punctuality by delivering reports on time. By this time the Centre had reached a turnover of Rs. 4,86,45,865 crores and the customer base had increased from 25 to 200 customers per day. Rajesh Kasliwal was never complacent with whatever he had achieved. He had decided to diversify into the hospital business with a world class Operation Theatre, Intensive Care Unit, Special Ward that would include Trauma Section, Nephrology section and General Ward. Rajesh Kasliwal, a 48 year old, enterprising, and dynamic entrepreneur was born in 1956. He was a medical graduate from M.G.M Medical College, Indore. He hailed from a business class family, which dealt in the business of scientific equipments. In a company like India there were diagnostic centres But a need was felt for a complete centre, which would provide ultimate solutions to the ailments. The initial step in this direction was taken up by Pioneer Laboratories in the

year 1950, but it had a limited set up for the requirement of the patients with the changing time. Rajesh Kasliwal had his private practice as a physician but the idea of enhancing the diagnostic services to centre to the needs of his patients constantly occupied his mind. Thus, with the zeal to do something in the field of diagnosis, Kasliwal started a diagnostic centre with a small set-up in 1980 at Chetak Centre near RNT Marg, Indore (Madhya Pradesh). Semester 1 Examination paper IIBM Institute of Business Management To grow further in this field, he shifted his investigation centre at Palasia Square, a centrally located commercial place in late 80s’ by the name Apollo Medical Investigation Centre. This departed from the traditional of all pathology labs by bringing a CT Scanner first time in the Indore city. The centre was promoted by the undisputed leaders the very best in diagnostics. It enjoyed an enviable position in the industry and had been the front-runner on technology absorption. By this time, the Indian market saw a revolution in diagnostic business, as hospitals in Indore began to using more on the basic hospital facilities pertaining to patients, rather than the diagnostic aspect.This was the time when Rajesh realized that Indore market needed a state-of-the-art diagnostic centre, and it motivated him to survey the hospitals and diagnostic centres within the country as well as abroad. With an aim to provide complete diagnostic solutions and to resolve diagnostic dilemma, Vishesh Diagnostic Solutions came into existence in August 203, spreading over 3,4000 sq. feet an independent four storied building, the largest stand alone diagnostic facility in the country. It was

created with the vision “On what matters most, were patient and the diagnosis”. This was supported by intelligent technology, increased speed and innovative applications and the year April 2006, they came up with an OPD division. Profile Vishesh Diagnostic Solutions, a project of Rs. 32 crores was an initiative to brought in the latest medical technologies and breakthrough in the field of diagnostics in Indore. The principal aim of the centre was to provide single window solutions for investigations ranging from simple pathological tests to complex imaging problems combining multiple devices. It was ensured that every delivered service met the clinical needs in the most perfect fashion. The objective of Vishesh Diagnostic Solutions was to enhance the quality of patient care. The state-of-the art technology worked in synergy with global expertise for accurate and timely diagnosis. Its promoter always believed in professional ethics and values. It recognized and appreciated the attitude that a noble professional must posses i.e. an attitude of care and concern. The virtue of management was reflected even in a routine procedure by a paramedic or examination by a specialist. Product Rajesh Kasliwal always believed in providing best quality services for which he imported a Multislices CT Scanner, which was the third in the country and had the facility of navigating the human body at 38 slices per second, a highly advanced MRI Machine which was among very few machines in the country. With the capability of conducting all routine MRI studies in virtually no

time, the machine also facilitated special investigations like MR Spectroscopy, MRI Angiographies and high quality Abdominal and Pelvic Imaging. Two types of colour Doppler’s were brought to Vishesh, one was Radiology Colour Doppler and the other was Accuson Sequoia, one of the best Cardiac Colour Doppler available internationally. It was very powerful and highly useful in the case of obese patients. For various routine tests, special tests and hormonal studies Vishesh Diagnostic Solutions, had a well equipped and advanced pathology lab, which was constituted of auto-analyzers, automatic cell counter, elisa readers and numerous other equipments. Place The Diagnostic Centre was located in the heart of the city near Geeta Bhawan A.B Road Indore (M.P). The place was near the Medical College and surrounded by leading hospitals like Suyash hospital, CHL Apollo, M.Y Hospital, Gokuldas Hospital, S N G Hospital, to name a few. This enabled better accessibility and connectivity to the center. In order to reach the customer at the earliest and provided them prompt services the centre provided the patients with a mobile van. Semester 1 Examination paper IIBM Institute of Business Management Promotion To reach the customer better, Vishesh diagnostics solutions organized various camps on nominal basis like Mammography check-up on Women’s Day, Lipid Profile check-up on World Heart Day, free health check-up for children in association with Nai Duniya, a Hindi daily newspaper, wheres

the mothers educated about obesity related ailments and remedial measures. Apart from this the centre conducted CME’s (Continue Medical Education) programmes for doctors by its Radiologists who provided knowledge about new equipments and facilities. The doctors were invited to these programmes according to their specializations after every fifteen days. The centre had a tie-up with leading doctors of the city who visited the centre from time to time to treat the pre-registered patients of O.P.D. For such programmes the patient paid Rs.30/- per check-up and the Centre paid the doctor Rs. 50/- per visit. Price Vishesh Diagnostics Solutions followed a competitive pricing strategy, because in a service industry it is difficult to price a product against the industry norms. Prices were not based on updation rather it was based om information provided by the examiners. They followed two types of pricing strategies; one helped in building business volumes and was cost effective, the other was customized according to the information provided. Apart from that, Vishesh Diagnostics Solutions used innovative patient centric approach and a solution based approach for general health checkups, which included disease specific, organ specific and individual specific packages, which was valuebased (Annexure 1). The centre had collaboration with Sahayata, an NGO, to tap the price sensitive customer base and was given 50% reduction in the price of the various services. This helped in bringing volumes as this customer base comprised of 35% of the total clientele. People

Vishesh interactions, an autonomous body promoted interactive intelligence in imaging, a unique gesture they envisaged right forum of discussion and deliberations among experts, specialists and academicians, who adored innovation. The varied packages introduced by the centre comprised of categories of people right from senior citizens to children, from housewives to working women, from employees to self-employed professionals, from stressed out individuals to physically healthy ones. The centre also believed that employee satisfaction would lead to customer satisfaction therefore, marketing executives who had a graduate degree and experience preferably in Pharmacy, were selected and thereafter they were imparted with a minimum of six months on the job training. The training programmes were manned by highly qualified, trained and dedicated team of professionals. The executives interacted with doctors, hospitals, banks like Canara Bank, Union bank and State Bank of Indore and insurance companies like Max New York Life, Aviva, ING Vyasya etc. and informed them about the latest services rendered by the centre once a month or fifteen days, depending upon the customer profile. The PR executives on other hand, directly interacted with the Top-Executives/Corporate Heads regarding the executive health check-ups, which included annual health check-ups and pre-employment check-ups. Physical Evidence The basic characteristic of service is that it is insurmountable in nature. The centre had made special efforts to create ambience in which the customers felt comfortable and relaxed. In order to make the

services reachable to the customers the various amenities were supported by promotional material and brochures. The diagnostic centre included good seating space, well designed interiors inclusive of proper signage boards, appearance of the people, designed service facilities, good cafeteria, pleasantly Semester 1 Examination paper IIBM Institute of Business Management decorated corridors, centrally air conditioned floors, high level of cleanliness, abundant parking space, evoking the customers’ feelings. It also enhanced credibility perception and increased satisfaction with the service experience. The management emphasized on happiness of the clients, confidence and reliability of the customers and the doctors and believed in providing the ultimate solutions. Process Vishesh Diagnostic Solutions had six departments which included Radiology, Mammography, Sonography, Pathology, Dispatch and Customer Care Cell. As services are intangible in nature therefore, the centre gave special attention to the patients. In the front office, the process owner received the customers and treated them as their guests. After the preliminary formalities the process owner escorted the patients to the respective departments. Each department had their own process owner, i.e department’s coordinators who briefed the patients about the various testes and procedures besides carrying on the diagnostics tests. The process owner later on took the patient to the dispatch department where he was briefed about the date and the time when he could receive the reports. The

centre believed in maintaining the punctuality by delivering reports on time. Future Ahead By this time the Centre had reached a turnover of Rs. 4, 86,45,865 crores and the customer base had increased from 25 to 20 customers per day within a three year span. However, it was felt that 60% of the machines were under-utilized as the doctors were unaware of the advanced technology. According to Kamlesh Pare, CEO of Vishesh Diagnostic Solutions, Rajesh Kasliwal was never complacent with whatever he had achieved. With his maverick temper of moving ahead and with eagerness to do something different, he had decided to diversify into the hospital business with a world class Operation Theatre, Intensive Care unit, special Ward that would include Trauma Section, Nephrology section, and General ward with Auto Clave Construction, which would enable proper maintenance. In order to provide exclusive patient care services, doctors would also be called from across the globe. 1. What were the various strategies adopted by Vishesh Diagnostic Center. Discuss them in light of seven Ps of service marketing. 2. What do you understand by service quality; explain what parameters of service quality are listed in the case? 3. How would you visualize the success of Vishesh Diagnostic Centre after diversification? 4. If you were Rajesh Kasliwal what necessary steps you would have taken to enhance the performance of the Centre?