ART OF SUCCESSFUL MARKETING MANTRAS-AUTO COMPONENTS

MANTRA 2 - STRATEGY

In continuation of my article series on ' Art of Successful Marketing mantras' published on 24th Aug '20 where in Four Elements of Mantras were identified for successful marketing as-

1. Customers

2. Strategy

3. Brand 

4. Marketing Team

My Article on 'Mantra 1- Customers'; received many views along with lots of valuable Comments, Complements for which I am thankful to all my viewers.

I am now happy to publish my second in series Article on 'Mantra 2- Strategy '

The literal or basic meaning of Strategy may represent one of following MASTER PLAN, BLUE PRINT, GAME PLAN, APPROACH, PLAN OF ACTIONS etc etc All these are right and are important for the success of marketing efforts However based on my successful professional journey and rich experience of designing /executing many strategies , I wish to define the STRATEGY as under 

" Strategy is a Business Plan defining the Measurable Objective/Goal along with finalizing the Logical/Workable Steps to achieve Short term and Long Term Goals punctuated with Time Bound Milestones to ensure achieve Goal and Out smart the Competition" In simpler words of management " Strategy is set of specific directions set by the Company to achieve Desired results and pre-mandated Goals.. 

Golden Rules of Finalizing the Successful Strategy are -

1. Prioritize Revenue Growth

2.. Create Differential vs Identified Competitors and/or generate First Entry Advantage 

3.. Always Be Prepared & Have Plan 'B'

Company wide Strategic Thinking will incorporate the steps in the following domain-

A. Business Model

B. Products

C. Prices

D. Distribution Channel

E. Publicity & Promotion

F. Organization Structure 

A. Business Model-

To start with is the first basic decision to take whether one has to go for manufacturing , Trading or both manufacturing & marketing companies. This will depend on. Resource Capability wrt Finance, Technology ,Management, and also the Demand-Supply Gaps if any , Total potential and opportunity available. specifically for auto component one need to decide either play role of tier 1 or tier 2 supplier to OEM or enter the business in all the segments of OEM , Replacement, Export..

My Recommendation is to enter all the business segment for long term de-risking business a due to following-

OEM-        Offer Status and assurance of Quality product

Replacement - Offers growing potential and brand visibility

Export-       Offers great opportunity for exposure to best technology and best way of managing operations

All the above put together create Differentials and offer opportunity of Revenue Growth .

Example -1} As VP-Marketing during 1989-92 with Willard India a automotive battery manufacturing co , reoriented the business model successfully to improve sales in replacement segment pan India to exponentially improve top lines and bottom lines . 2} Shriram pistons and rings Ltd the leading company manufacturing critical components of IC engines under Usha brand was under 200 cr turnover during 1980 . I worked as Head After market till 2015, This Co was prominently operating in replacement market but after reorienting business models to cater to OEM and Export , today this company is 2000cr + cash rich co maintaining its turnover in the ratio of appx 60% OEM and 20% each in Rep and Expr segments.as per strategic decision taken during mid 80s.,

B. Products-

Decision to identify and launch product strategically depends on following inputs - a} Demand -Supply Gaps, b} Existing & Future Potential in Demand, c} Opportunity to improve Bottom Lines/Top Lines, d} manufacturing and technological capability . Depending on all these factors, products can be identified with a strategy to achieve success.

Example- 1} As VP marketing with Willard India in 1989 , which was the company predominantly in HCV Battery manufacturing , I took strategic decision to produce and launched battery for Maruti car which was gaining population then during 90s on Indian roads. In the first year itself achieved sales of 25000 units over and above the existing sales with entry in the car segment 2} As head Aftermarket Shriram Pistons & Rings ltd introduced Honda motorcycle Piston Assembly in tamper proof packaging .during 1998-99 and became NO1 and most preferred brand pan India 

C. Prices-

It is fact that product pricing is determined by the market . Decision on product price will depend on following factors - a} Identified Competitors, b} Product Differentials, c} Management Goal for achieving  Top Lines and Bottom Lines, d} Cost of product production and /or End cost of product purchase . All or some of these factors influence the decision while finalizing the the product pricing.

Example- A Leading Indian company with well known brand planned to introduce engine valve knowing very well about one of the Giant competitors with 80% mkt share, but strategically decided to fix the price higher than the price of this competitor with a sole objective to avoid price war, as a assurance but created differential in packaging and technology. As Head- Marketing I was key member to decide the price and we achieved our premediated sales numbers as per expected market share which grew significantly and we became significant player and well accepted brand with in next two years and continuing till date.  

D. Distribution Channel-

Decision on creating distribution channel depend both on product type as well as management business model of being only manufacturer or manufacturing cum marketing company/ eg for Tier 1 or 2 level OEM supplier , there is no need to create distribution channel as business model is to restrict supply only in OE or to large customer segment . Strategic inputs required to decide distribution network will be as following-

a} for fast moving , mass consumption product like fan , belts, nuts, bolts, bush, bulbs, there is need for deeper penetration in the market to reach last mile customer or product user b} For large Buyers like OEMs, Fleet owners, Export , large branding company, Govt institutions like Railways, STUs etc. only agents can be appointed . No need to create channel. c} For technologically critical component which required specialized trained persons we need to appoint authorized distributors in the areas where such workshops are available.

Example- Sansera who are well known Indian group manufacturing critical components follows business model to deal with and supply to only OEMs and do not have any distributors set up as they have no plan to be in after market where as companies like, GS group, Mico Bosch, Mahle, Talbros, TVS, Fag, Scafflers, usha etc have well established distribution and agent network as they operate in all segments of OEMs, After market , Export.

E. Publicity & Promotion -

Promotional efforts are based on Target Audience who are either actual users or they are influencers in creating Demand .. In general in Auto component industry, Media both print or TV etc not preferred because target customers are well identified . However for improving visibility of Brand, I find some companies are now getting into digital medium and /or print publicity on localized market in local languages for effective reach.

Recommended tools are Personal Visit to Garages, specialists etc who can influence the demand, and/or Retail network for mass components as they can influence the fitters /consumers n end sellers .In addition to these I recommend using tool of Van Campaigns in select markets, extensive use of POP , Dealers & Garage board, small gifts give away and Customer Meets/ Seminars to educate , improve and create demand.

Example- Most of the critical component manufacturers and brands follows above tool to get closer to the influencers and they employ special team to visit and create the demand for their brand .and create the link between dealer, workshop and the fleet owner . Strategy is to influence the Influencers .

F. Organizational Structure-

It is decided on the basis of various strategic inputs ie size of enterprise, well defined functional responsibilities of each dept. It is  management call on taking employees on their pay roll or to take third party contractual employees to keep the minimal efforts on managing people..   

Its recommended to employ on co payroll dedicated Experts for each dep't as head with lean management team using IT tools for day to day operations eg Finance, Quality, R&D, Marketing HO etc. However for workers category use the tool of contractual workers and for Missionary sales frontlines use third party employment companies while out- source the accounts, maintenance, office admiration for better productivity. 

In conclusion I wish to highlight that for successful marketing 2nd important mantra is well thought Company Strategy because the Customer is and belong to Co and its brand.

UKJ