The Marketing Conundrum

Mr. Bhansal, Marketing Manager of ABC Jewelers, looked out of his office window. It was 2 in
the night and he all he could see was the darkness of the deserted street. The Owner of ABC
Jewelers had called for a meeting the following Monday. Mr. Bhansal very well knew that the
owner would be asking him for a turnaround strategy. He had been hired a month back for
specifically this reason To improve the Topline and Bottom line of ABC. The numbers before
him did not make for very good reading. The revenue of his company has been on a decreasing
trend for some years now. To add insult to injury, their major competitor, XYZ Jewelers, had
grown almost 650% in the last 4 years (See Exhibit A). Mr. Bhansal was given a months time to
study the business and suggest a turnaround strategy.

He had spent the entire month looking for a turnaround strategy. He had consulted all his senior
salesmen, studied the trade and gone over the books of account. He did have a few ideas in his
mind but even he wasnt sure if that would significantly impact the fortunes of his company. He
sat on his office chair, deep in thought, waiting for that elusive idea to strike.

Case Background
ABC Jewelers was founded in 1960 and plied its trade in the Artificial Jewelry Business in India.
It identified all the segments apart from the Rich Class and the Upper-Middle Class as its target
segment. Any female belonging to the target segment and between the ages of 12 to 40, was a
potential customer. Gold-Plated jewelry was one of its major offerings (See Exhibit B). There
was a change in its management 4 years ago. The new management had not been able to counter
the rise of XYZ Jewelers till date. XYZ was formed 5 years ago only and yet, its revenue was
almost double to that of ABC. Both ABC and XYZ were operating only in Eastern India.
The most important reason for the rise of XYZ was pretty apparent. ABC had a dispute with its
biggest supplier. The supplier was the Point of Differentiation between ABC and its competitors.
The supplier had developed a technology which enabled it to do Gold-Plating on jewelry in a
manner that the Gold covering lasted for a very long time and also made the gold-plated jewelry
appear glossy and shiny. In other words, it increased both the durability and attractiveness of the
imitation jewelry.
XYZ Jewelry had managed to take advantage of that dispute and entered into an exclusive
contract with that supplier. ABC searched and searched, but could not manage to find a supplier
which offered the same quality of offerings. The end result was that XYZ was offering a much
better product to the customer. XYZs products not only looked better, but also lasted longer.


While ABCs product lasted for 2-3 months, XYZs products lasted for 4-6 months on an
average.
Another reason for XYZs success was its distribution system. It sold to 10 Distributors who did
not carry any products of its competitors. These Distributors in turn sold to 30 Wholesalers who
in turn sold to 600 Retail Shops in eastern India. Trade relationship was being managed in a very
healthy manner. The distributors were simply order takers. XYZ directly transported the goods to
the wholesaler after the Distributors had taken the order from that Wholesaler.
Territories and Channel Structures were clearly defined and respected. If a wholesaler tried to
bypass the Distributor and directly approach XYZ, it did give them the product but sales were
recorded in the name of the Distributor only. The Wholesaler would still have to pay to the
Distributor. This helped the wholesaler get the goods faster but he still had to pay the same
amount. A retailer belonging to one area could only buy from the wholesaler designated to that
area. Regular checks were maintained to ensure that such structures were maintained.
On the other hand, ABC was not enforcing the Channel Structures properly. It directly sold to
Wholesalers if they approached ABC. The sales volume was constantly reducing. The margins
were much lower as compared to XYZ (See Exhibit C). These were some of the reasons why the
Trade Partners were not happy with ABC. Some of its major Distributors had shifted to XYZ and
now ABC was left with only 5 distributors. There was this fear that if sales did not go up, even
the remaining Distributors would defect.
The condition seemed very bleak for ABC. Even its suppliers were hesitating to give it credit. In
contrast, XYZ had no difficulties in getting credit from any of their suppliers.
ABC could not even compete with XYZ in terms of promotion. It allocated 1 crore annually for
both Trade and Customer promotions. It spent its promotional budget on TV adverts, Newspaper
Ads, Hoardings, Gifts for Wholesalers, etc. In contrast, XYZ allocated 3 crore annually for
Promotion. It did not even feel the need for Trade Promotion. It believed that it had set up a very
strong Distribution network and the channel members were already very committed to them, so
Trade Promotion wasnt a priority. It advertised heavily in TV, Newspapers and had lots of
Hoardings. In just 5 years, it had developed a strong brand and customers asked for XYZs
product in retail shops by name. It had considerable Pull in the imitation jewelry market.


Advertising heavily on TV was not an option for Mr. Bhansal as the budget was only INR 1
crore annually. But as Marketing Manager, he was supposed to come up with ingenious ways to
promote the Brand name of ABC within the given budgetary constraint. After all, ABC was
more than a 50 year old Brand and there had to be a way to leverage that. He just couldnt figure
out how.


XYZs products were better, its market share was rising, its distribution network was wider and
stronger and its promotion budget was thrice that of ABC. Mr. Bhansal thought and thought and
thought. He asked himself Was there a way out of this Conundrum?


Exhibit A

Annual Turnover (In Rs. Crores)
Company 2014 2013 2012 2011 2010
ABC 16.4 18.225 20.25 22.5 25
XYZ 30 20 15 8 4


Exhibit B

Product Offerings by ABC and their Price Range (In INR)
Product Price Range
Earrings 80-300
Bangles 120-1500
Chain 250-900
Necklace 400-3000


Exhibit C
Margins Prevalent in case of a Product with MRP Rs. 100 (Similar Margins for all types of
Products)
Cost to Intermediaries ABC XYZ
Cost Price to Distributor 40 40
Cost Price to Wholesaler 45 50
Cost Price to Retailer 50 70
Cost Price to Customer 70 100




Case Deliverables:

Identify where the company is going wrong and the rationale behind it
Suggest Strategies to Improve Sales
Suggest steps to Improve Relations with Channel Members and develop a strong
distributor Network
Identify ways how ABC can get more and more Wholesalers and Retailers to carry their
Product. Also suggest what steps needs to be taken to keep them motivated
Decide the Marketing Strategy for ABC Jewelry
Decide how the Rs. 1 crore promotion budget has to be spent


Case Instructions

You can analyze the case in your PPTs, no need to summarize it
Limit your PPTs to 12 slides
The PDF that you would send if you qualify for the second round must have explanations
for all the points mentioned in your PPT
Get inside the Shoes of the Marketing Manager and take decisions
Supply-Side Issue is beyond the purview of the Marketing Manager
Do not suggest ways to promote Company on the Internet. Keep the Solutions focused on
Dealer Relations, Promotions and overall Marketing Strategy
Be Creative. New and fresh ideas would be appreciated
At the Same time, be rational. The Idea must be feasible