Problem retailers were actively pushing the lower price

Problem retailers were actively pushing the lower price

Problem identification: The performance of Ligthwel Match Company in relation to the total match industry had not been very satisfactory for the last two years. Sales have declined and seasonal fluctuations which were a regular phenomenon for the match industry have become more severe than before. Though LMC has a great reputation in India, its market share is continuously decreasing.

Due to the excise rebate and other incentives, the small scale sector has been steadily gaining the market share of match industry. Black bird matches made by a small Haryana based firm had become phenomenally popular in some large urban markets.The brand awareness of LMC is very high in consumers as well as in retailers, but the retailers were actively pushing the lower price brands .

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The small manufacturers were gaining the retailers loyalty by offering better margins, easier terms and flexible supply patterns. Also a major portion of consumers were indifferent to the brand of match box they got. The high price perception of LW brands was a distinctly unfavorable factor in existing market conditions. Decision issues: Forecasting of sales, Inventory and stock planning, terms and norms to the retailer, mode of supply patterns, and price of the product. ) ? Four Ace brand was the most well-known brand in market. ? Chetak and snowax were also well known but Black bird is used by maximum number of people.

? Price perception of various brands: ? 82% thought Black Bird is 7p, 18% thought it was at 8p… 76% thought Four Ace was at 8p and 21% thought it was at 7p. 3% thought Four Ace was at 10p. ? 92% thought Snowax was at 10p , 8% thought it was at 8p. ? 10% thought chetak was at 9p, 60% thought it was at 8p, 30% thought it was at 7p. Percentage of respondents using Black Bird is 31 and Four aces is 20 , Chetak is 4, Snowax is 5 . 9% use LW brands.

Black bird is the large one. More people are buying low priced matches in the dry season but they are shifting towards high quality matches in monsoon season. 67% thought that all brands are same w.

r. t price, 33% thought some brands were different from others in terms of price. 30% thought that some brands were costlier than others. 13. 2% thought Four Aces is the costliest brand, 8. 4 % thought Snowax is the costlier brand, 3.

9% named Chetak is the costlier brand . Only 4. 5 % of the respondents named other brands as costlier brands.Only 9% thought some brands are cheaper, 6. 39% thought that Black Bird was relatively in expensive brand. Quality: 67% thought that there were no differences in the quality of matches.

Of the other 33% majority thought Four Ace and Snowax are the high quality brands. Number of Match Sticks: 80% thought that all brands have same number of match sticks in them. 20% thought some have more sticks in them.

They named Four aces and Snowax. 75% indicated no brand preference. 25% indicated brand preference as Four ace, Black bird, Large ,Snowax and Chetak.

Informal questioning of retailers showed LW brands were asked more in monsoon season. Consumers are brand aware but not brand conscious. 52% of retailers reported that Four Aces was the largest selling brand , 38% was the largest selling brand. This is very less compared to their market share before four years.

Product mix: Product: Matchsticks, more space, less revenue, bulky transport, 3 varieties Price: higher than bb and other small scale due to excise concessions Production: Place: North India, bit of east, no west no south Brand awareness and its effects on usage: Brand |Awareness |Usage |Usage: Awareness ratio | |Four Aces |61 |20 |0. 33 | |Chetak |27 |4 |0. 148 | |Snowax |22 |5 |0. 22 | |Black Bird (Large) |34 |31 |.

1 | |Black Bird (Small) |10 |13 |1. 3 | Table 1. 1 Awareness and usage details Analysis: The usage to awareness ratio is very low for LMV products with highest being 0.

33. Such a low rate implies that even though the consumer is aware of the LMV brand, the awareness is not being converted to usage. In contrast, the Black Bird brand has a significant usage in spite of having a lower awareness. So LMC should realize that higher awareness does not necessarily guarantee high sales.Stocking patterns pic Fig. 1.

1 Reported and Observed Stocking Pattern of Retailers There is a discrepancy between reported stocking and actual stocking. The retailer does not make it a point to match the 2 he keeps in stock more of brand which gives good margin (margins Higher margin for bb in lower segment Higher ordering freq of more for bb Higher order size (trans behaviour Retailer prefers providing bb There is low customer involvement in selection of brand Price not a huge criteria Because the Strengths: Better quality High sales in monsoon Perception that it has more sticksPlan: Enter new markets Enter south, west,east Improve position in north How? By advertising Packaging discount Focus on primary users h/w + smokers.. advertise on pan shop, grocery, market place, temples Emphasize on quality, size Convert from low involvement to high involvement Easy to find, availability high Link product to involving issue Attractive packaging (retailers Discount on purchase Scratch card Incentives to retailers To encourage habitual buying behave, dominate shelf space Avoid out of stock condition Send sales person for checks Encourage incremental n regular sales volume

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