Class 12 Consumer Awareness Project Report on Advertisement Appeals of Liberty Shoes - Class 12 Business Studies Advertisement Project Report - Class 11 and 12 Advertisement project Report

 

Class 12 Business Studies Advertisement Project Report  - Class 11 and 12 Advertisement project Report on Advertisement Appeals of Liberty Shoes, AIDA Model, advantages and disadvantages of Advertisement, Various advertisement appeals

 

Table of Contents	Page number
Introduction to Promotion Mix
Elements of Promotion Mix
Advertising
Characteristics of Advertising
Advantages of Advertising
Disadvantages of Advertising
AIDA Model for Advertisement
Introduction to Advertisement Appeals
Types of Advertisement Appeals
Introduction of Liberty Shoes
Various types of appeals shown by different Print, TV & Radio advertisements of Liberty Shoes

Promotion Mix refers to the blend of several promotional tools used by the business to create, maintain and increase the demand for goods and services.

The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating the awareness and persuading the customers to initiate the purchase. The several tools that facilitate the promotion objective of a firm are collectively known as the Promotion Mix.

The Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion, Public Relations and Direct Marketing. The marketers need to view the following questions in order to have a balanced blend of these promotional tools.

• What is the most effective way to inform the customers?
• Which marketing methods to be used?
• To whom the promotion efforts be directed?
• What is the marketing budget? How is it to be allocated to the promotional tools?

 Elements of Promotion Mix

1.   Advertising: The advertising is any paid form of non-personal presentation and promotion of goods and services by the identified sponsor in the exchange of a fee. Through advertising, the marketer tries to build a pull strategy; wherein the customer is instigated to try the product at least once. The complete information along with the attractive graphics of the product or service can be shown to the customers that grab their attention and influences the purchase decision.

2.   Personal Selling: This is one of the traditional forms of promotional tool wherein the salesman interacts with the customer directly by visiting them. It is a face to face interaction between the company representative and the customer with the objective to influence the customer to purchase the product or services.

3.   Sales Promotion: The sales promotion is the short term incentives given to the customers to have an increased sale for a given period. Generally, the sales promotion schemes are floated in the market at the time of festivals or the end of the season. Discounts, Coupons, Payback offers, Freebies, etc. are some of the sales promotion schemes. With the sales promotion, the company focuses on the increased short term profits, by attracting both the existing and the new customers.

4.   Public Relations: The marketers try to build a favorable image in the market by creating relations with the general public. The companies carry out several public relations campaigns with the objective to have a support of all the people associated with it either directly or indirectly. The public comprises of the customers, employees, suppliers, distributors, shareholders, government and the society as a whole. The publicity is one of the form of public relations that company may use with the intention to bring newsworthy information to the public. For example, Large Corporate such as Dabur, L&T, Tata Consultancy, Bharti Enterprises, Services, Unitech and PSU’s such as Indian Oil, GAIL, and NTPC have joined hands with Government to clean up their surroundings, build toilets and support the swachh Bharat Mission.

5.   Direct Marketing: With the intent of technology, companies reach customers directly without any intermediaries or any paid medium. The e-mails, text messages, Fax, are some of the tools of direct marketing. The companies can send the emails and messages to the customers if they need to be informed about the new offerings or the sales promotion schemes. E.g. The Shopperstop sends SMS to its members informing about the season end sales and extra benefits to the golden card holders.

Introduction to Advertising

Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods, and services by an identified sponsor. It is a way of mass communication. It is the most popular and widely practiced tool of market promotion. Major part of promotional budget is consumed for advertising alone. Various advertising media – television, radio, newspapers, magazines, outdoor means and so forth – are used for advertising the product.

Characteristics of advertising

i. Adverting is non-personal or mass communication. Personal contact is not possible.

ii. It is a paid form of communication.

iii. It is a one-way communication.

iv. Identifiable entity/sponsor-company or person gives advertising.

v. It is costly option to promote the sales.

vi. It can be reproduced frequently as per need.

vii. Per contact cost is the lowest.

Viii. Various audio-visual, print, and outdoor media can be used for advertising purpose.

ix. It is a widely used and highly popular tool of market promotion.

Advantages of Advertising

Following are the advantages of advertising:-

(1) Introduces a New Product in the Market:

Advertising plays significant role in the introduction of a new product in the market. It stimulates the people to purchase the product.

(2) Expansion of the Market:

It enables the manufacturer to expand his market. It helps in exploring new markets for the product and retaining the existing markets. It plays a sheet anchor role in widening the marketing for the manufacturer’s products even by conveying the customers living at the far flung and remote areas.

(3) Increased Sales:

Advertisement facilitates mass production to goods and increases the volume of sales. In other words, sales can be increased with additional expenditure on advertising with every increase in sale, selling expenses will decrease.

(4) Fights Competition:

Advertising is greatly helpful in meeting the forces of competition prevalent in the market. Continuous advertising is very essential in order to save the product from the clutches of the competitors.

(5) Enhances Goodwill:

Advertising is instrumental in increasing goodwill of the concern. It introduces the manufacturer and his product to the people. Repeated advertising and better quality of products brings more reputation for the manufacturer and enhances goodwill for the concern.

(6) Educates The Consumers:

Advertising is educational and dynamic in nature. It familiarises the customers with the new products and their diverse uses and also educates them about the new uses of existing products.

(7) Elimination of Middlemen:

It aims at establishing a direct link between the manufacturer and the consumer, thereby eliminating the marketing intermediaries. This increases the profits of the manufacturer and the consumer gets the products at lower prices.

(8) Better Quality Products:

Different goods are advertised under different brand names. A branded product assures a standard quality to the consumers. The manufacturer provides quality goods to the consumers and tries to win their confidence in his product.

(9) Supports The Salesmanship:

Advertising greatly facilitates the work of a salesman. The customers are already familiar with the product which the salesman sells. The selling efforts of a salesman are greatly supplemented by advertising. It has been rightly pointed out that “selling and advertising are cup and saucer, hook and eye, or key and lock wards.”

(10) More Employment Opportunities:

Advertising provides and creates more employment opportunities for many talented people like painters, photographers, singers, cartoonists, musicians, models and people working in different advertising agencies.

(11) Reduction in the Prices of Newspapers and Magazines Etc:

Advertising is immensely helpful in reducing the cost of the newspapers and magazines etc. The cost of bringing out a newspaper is largely met by the advertisements published therein.

(12) Higher Standard of Living:

The experience of the advanced nations shows that advertising is greatly responsible for raising the living standards of the people. In the words of Winston Churchil “advertising nourishes the consuming power of men and creates wants for better standard of living.” By bringing to the knowledge of the consumers different variety and better quality products, it has helped a lot in increasing the standard of living in a developing economy like India.

Disadvantages of Advertising

Advertising has the following disadvantages:

(1) Adds to Costs:

An organisation has to spend large amount on advertising. It increases the cost of the products. To meet this expenditure, price of the product is raised. No manufacturer pays for the advertising expenses out of his pocket. Advertising, therefore, leads to unnecessary rise in prices. In this reference it is said that advertising costs are passed on to the consumers in the form of high prices.

(2) Undermines Social Values:

Advertisement is a sort of day-dreaming for the people. These days it is taking the people away from reality and into the realm of artificiality. Through its medium people get information about new products. Only very few products are of any use for them. The brilliance of new products really gets on their nerves. They want to buy them but have no resources at their command. Consequently, they start feeling upset with their present status. Taking it as a social evil, it can be said that advertisement undermines social values.

(3) Confuses the Buyers:

Many a time distorted version of reality is shown in the advertising. Believing in advertising, consumers buy the product. On its use, they feel cheated.They come to realize later that the information given in the advertisement was something else whereas the actual product was quite different from it. Thus, people lose confidence in advertising because of wrong presentation. In this reference it is said that advertising confuses rather than helps.

(4) Encourages Sale of Inferior Products:

Every manufacturer projects his product as superior one in the advertisement. Therefore, the buyer is unable to decide as to which product is really good. Consequently, it is difficult to get good quality product even after paying a handsome price for it. If a seller gets good price for some inferior product, it becomes a habit with him. It affects other sellers also. Therefore, it is said that advertisement encourages the sale of inferior products.

 (5) Some Advertisement is in Bad Taste:

Many times, foul language and objectionable pictures are used in advertising in order to attract a particular class. They may be insulting to a particular class. It causes decay of social values.

Such kinds of advertising are generally opposed by the people as it hurts their feelings. In this reference it is said that some advertisements are in bad tastes.

AIDA Model for Advertisement

The AIDA model is just one of a class of models known as hierarchy of effects models or hierarchical models, all of which imply that consumers move through a series of steps or stages when they make purchase decisions. These models are linear, sequential models built on an assumption that consumers move through a series of cognitive (thinking) and affective (feeling) stages culminating in a behavioural stage (doing e.g. purchase or trial) stage.

The steps proposed by the AIDA model are as follows:

Attention –

The consumer becomes aware of a category, product or brand (usually through advertising)

Interest –

The consumer becomes interested by learning about brand benefits & how the brand fits with lifestyle

Desire –

The consumer develops a favorable disposition towards the brand

Action –

The consumer forms a purchase intention, shops around, engages in trial or makes a purchase

Advertisement Appeal

Advertising Appeal is an igniting force which stimulates the customer mindset towards the product or services. It not the only factor in the marketing mix which initiates a consumer for buying the product but it is certainly one of the advertisers' most important creative strategy decisions involves the choice of an appropriate appeal.

Advertising appeals are designed in a way so as to create a positive image of the individuals who use certain products. Advertising agencies and companies use different types of advertising appeals to influence the purchasing decisions of people.

Types of Advertisement Appeals

1.   Rational or Informational Appeal

2.   Emotional Appeal

3.   Moral Appeal

4.   Other Advertisement Appeals

I. Rational or Informational Appeals

This is generally product oriented appeal, highlights the functional benefits like- quality, economy, value, or performance of a product. Following are different types of rational appeals:

Feature Appeal –

Advertisements based on such appeal are highly informative, provides information of product attributes or features that can be used as the basis for rational purchase decision. Technical and high involvement product often uses this appeal.

Competitive Advantage Appeal –

Such appeal is used to compare the product with the competitor's product directly or indirectly and advertiser try to present his product superior then competitor's product on one or more attributes.

Favorable Price Appeal –

Here price offer is considered as the dominant point of the message.

News Appeal –

Some type of news or announcements about product or company dominates the advertisement.

Product Popularity Appeal –

Product popularity is considered as the dominant point of advertisement by highlighting the increasing number of users of brand or the number who have switched to it.

High Quality –

Some products are preferred for their quality not merely because of their taste or style, such products are advertised by highlighting the quality attribute in advertisement.

Low price –

Many people prefer low priced goods. To target such audience products are advertised by highlighting the low price tag of the product.

Long Life –

Many consumers want product of durable nature that can be used for a long period, in advertisement of such product durability is the dominant point of the message.

Performance –

Many advertisements exhibit good performance of product.

Economy –

Many customers consider savings in operation and use of product, for example in case of automobile the mileage is considered while selecting the brand or model.

Scarcity –

Another appeal that is occasionally used is scarcity. When there is a limited supply of a product, the value of that product increases. Scarcity appeals urge consumers to buy a particular product because of a limitation.

Other Rational Appeals –

Other rational appeals include purity, more profits, time saving, multifunction, more production, regular supply and availability of parts, limited space required, artistic form, etc. that can make advertising effective.

II. Emotional Appeals

An emotional appeal is related to an individual’s psychological and social needs for purchasing certain products and services. Emotions affect all type of purchase decisions.

Types of emotional appeals are as follows:

Positive Emotional Appeal –

Positive emotions like- humour, love, care, pride, or joy are shown in advertisements to appeal audience to buy that product. For example- Jonson and Jonson baby products.

Negative Emotional Appeal –

This includes fear, guilt, and shame to get people to do things they should or stop.

Fear –

Fear is an emotional response to a threat that expresses some sort of danger. Ads sometimes use fear appeals to evoke this emotional response and arouse consumers to take steps to remove the threat. For example- Life Insurance

Anxiety –

Most people try to avoid feeling anxious. To relieve anxiety, consumers might buy mouthwash, deodorant, a safer car, get retirement pension plan.

Humour –

Humour causes consumer to watch advertisement, laugh on it, and most important is to remember advertisement and also the product connected with humour. For example- Happydent, and Mentos.

III. Moral Appeals

Moral appeals are directed to the consumers’ sense of what is right and proper. These are often used to exhort people to support social and ethical causes. Types of Moral Appeal are as follows:

• Social awakening and justice
• Cleaner and safe environment
• Equal rights for women
• Prohibition of drugs and intoxication
• Adult literacy
• Anti-smuggling and hoarding
• Protection of consumer rights and awakening

Other Type of Appeals

Reminder Appeal –

Advertising using reminder appeal has the objective of building brand awareness. For example- IPO

Teaser Advertising –

Advertisers introducing a new product often use this appeal. It is designed to build curiosity, interest and excitement about a product or brand. For example- Ponds ad of Saif & Priyanka

Musical Appeals –

Music is an extremely important component in advertising. It captures the attention of listeners. For example- Docomo, Airtel

Comparison Appeal –

In this appeal a brand’s ability to satisfy consumers is demonstrated by comparing its features to those of competitive brands. For example-Tide & Surf

Direct Appeals –

Direct appeals clearly communicate with the consumers about a given need. These extol the advertised brand as a product which satisfies that need.

Indirect Appeals –

Indirect appeals do not emphasize a human need, but allude to a need.

Sex Appeal

Sex and nudity have always sold well. Sexuality, sexual suggestiveness, over sexuality or sensuality raises curiosity of the audience and can result in strong feelings about the advertisement. It can also result in the product appearing interesting. However use of sex in types of advertising appeals can have a boomerang effect if it is not used carefully. It can interfere with the actual message of the advertisement and purpose of the product and can also cause low brand recall. If this is used then it should be an integral part of the product and should not seem vulgar. The shift should be towards sensuality.

Scarcity Appeal

Scarcity appeals are based on limited supplies or limited time period for purchase of products and are often used while employing promotional tools including sweepstakes, contests etc.

Masculine Feminine Appeal

It is used in cosmetic or beauty products and also clothing. This type of appeal aims at creating the impression of the perfect person. The message is that the product will infuse the perfection or the stated qualities in you.

Brand Appeal

This appeal is directed towards people who are brand conscious and wish to choose particular products to make a brand statement.

Snob Appeal

This appeal is directed towards creating feeling of desire or envy for products that are termed top of the line or that have considerable qualities of luxury, elegance associated with them.

Adventure Appeal

This appeal is directed towards giving the impression that purchasing a product will change the individual’s life radically and fill it with fun, adventure and action.

Romance Appeal

These advertisements display the attraction between the sexes. The appeal is used to signify that buying certain products will have a positive impact on the opposite sex and improve your romantic or love life. Fragrances, automobiles and other products use these types of advertising appeals.

Youth Appeal

Advertisements that reflect youth giving aspects or ingredients of products use these types of appeals. Cosmetic products in particular make use of these appeals.

Endorsement

Celebrities and well known personalities often endorse certain products and their pitching can help drive the sales.

Play on Words

Advertisements also make effective use of catch phrases to convey the message. Such appeals help in brand recognition and recall and can be quite popular with the youth in particular.

Statistics

Advertisements also use statistics and figures to display aspects of the product and its popularity in particular.

Plain Appeal

These advertisements use every day aspects of life and appeal to ordinary people regarding the use of a product or service.

Bandwagon Appeal

This type of advertising appeal is meant to signify that since everybody is doing something you should be a part of the crowd as well. It appeals towards the popularity aspect or coolness aspect of a person using a particular product or service.

Introduction of Liberty Shoes

Liberty Shoes Limited (LSL) is an Indian shoe company, based in Karnal, Haryana. Established in 1954, the company presently produces 50,000 pairs of footwear a day through its six manufacturing units, sold through 6,000 multi-brand outlets and 350 exclusive showrooms, and has a presence in 25 countries, with 50 showrooms outside India. Adesh Gupta became the CEO of LSL on 16 July 2001.

With over 60 years of experience, Liberty shoes Ltd has established itself as a brand that people can trust. The brand with a well known and exalted positioning in metropolitan cities is persistently expanding in tier 2 and tier towns and cities. It has won hearts of millions with its trust, quality and loyalty. Throughout its journey, it has proved that it is all about the people and their needs. The brand loyalists know that owning Liberty Footwear is not a seasonal affair but it is a bond that stands through the tests of time. We are about people and we stand by it.

 

            

Various types of appeals shown by different Print, TV & Radio advertisements of Liberty

Advertisement I.

This advertisement focuses to lure youth to buy liberty products. The various appeals involved in this advertisement includes –

1.   Romance appeal

This advertisement signifies that buying Liberty shoes will have a positive impact on the opposite sex and improve your romantic or love life.

2.   Youth appeal

Since this advertisement is endorsed by two youths. So it is appealing to youth to buy their products.

3.   Adventure Appeal

This advertisement signifies that purchasing Liberty shoes will change the individual’s life radically and fill it with fun, adventure and action

4.   Masculine Feminine Appeal

This advertisement aims at creating the impression of the perfect person. The message is that the product will infuse the perfection or the stated qualities in you.

5.   Positive Emotional Appeal 

This advertisement also demonstrates emotions like love, pride and joy a appeal audience to buy that product.

Advertisement II

This advertisement includes following appeals:-

1.   Teaser Advertising 

This advertisement is designed to build curiosity, interest and excitement about its new range of product named as Avengers.

2.   Brand Appeal

This advertisement has a brand appeal as it is directing people who are Liberty brand conscious and wish to choose particular products to make a brand statement.

3.   Snob Appeal

Since this advertisement is reflecting new product range of Liberty thus creating feeling of desire to opt it as it is termed as top of the line and has considerable qualities of luxury, elegance associated with it.

4.   Adventure Appeal

This advertisement is also giving the impression that purchasing a product will change the individual’s life radically and fill it with fun, adventure and action.

5.   Performance Appeal

This advertisement exhibits good performance of product.

Advertisement III

The various types of appeals included in this advertisement includes –

Favorable Price Appeal –

This advertisement clearly demonstrates the price of the product which is favorable for the customers and also dominant point of this advertisement.

Low price 

Many people prefer low priced goods. To target such audience this advertisement has been made to highlight the low price tag of the product.

Economy –

This advertisement also shows that people can own a branded product at an economical rate which is durable in nature too.

Direct Appeals –

Many people want to buy branded product but due to its high price they are not able to do so. This advertisement has a direct appeal to such people to own liberty low range shoes.

Advertisement IV

Source: https://youtu.be/ZxTD_iG0zkM

The various appeals included in this TV advertisement of Liberty shoes Includes:-

Masculine Feminine Appeal

This advertisement aims at creating the impression of the perfect person. The message is that the product will infuse the perfection or the stated qualities in you. It also demonstrates that Liberty has product range for both males and females.

Snob Appeal

This advertisement reflects considerable qualities of luxury and elegance associated with the products.

Adventure Appeal

This advertisement is directed towards giving the impression that purchasing a product will change the individual’s life radically and fill it with fun, adventure and action.

Youth Appeal

The advertisement is focused on youths and teenagers. All the actors in the advertisement are youths.

Endorsement Appeal

Hrithik Roshan is endorsing liberty shoes in this advertisement.

Musical Appeals –

The video comprise of musical song completing focusing on modern, young & dynamics people creating a sense of curiosity for music lovers

Positive Emotional Appeal –

Positive emotions like- humour, love, care, pride, or joy is shown in advertisements to appeal audience to buy Liberty shoes.

Feature Appeal –

This advertisement shows various ranges of Liberty shoes having different features and purpose that can be used as the basis for rational purchase decision.

Bibliography

—  www.libertyshoes.com

—  www.google.com

—  https://youtu.be/ZxTD_iG0zkM

AMAZON’S KIRANANOW: THE INDIAN ONLINE GROCERY MARKET Case Study solution, To analyse Amazon’s increasing competition and implications for consumers, What challenges is KiranaNow facing and what strategies should it use to overcome these challenges, Analysing the macro-environmental factors affecting Amazon’s KiranaNow using the Porters Five Force framework,

AMAZON’S KIRANANOW: THE INDIAN ONLINE GROCERY MARKET Case Study solution, Analysis of Macro environmental factors of Amazon’s kirananow using five force model, industrial analysis of Amazon’s KiranaNow keeping in view factors impacting it using five force framework, challenges faced by Amazon’s Kirananow in its operations, Strategies to overcome challenges faced by Kirananow

Case Study : AMAZON’S KIRANANOW: THE INDIAN ONLINE GROCERY MARKET

TASK ONE : After reading the case study Amazon’s KiranaNow: The Indian Online Grocery Market, comment on the industry analysis by:

•Analysing the macro-environmental factors affecting Amazon’s KiranaNow using the Porters Five Force framework. 

TASK TWO : Your task two is to analyse Amazon’s increasing competition and implications for consumers:

•What challenges is KiranaNow facing and what strategies should it use to overcome these challenges?

Solution to Case Study

TASK ONE: Comment on the industry analysis by Analyzing the macro-environmental factors affecting Amazon’s KiranaNow using the Porters Five Force framework.

        I.     Analyse the macro-environmental factors affecting Amazon’s KiranaNow using the Porters five force model framework.

    II.    Analyse the industry scenario for KiranaNow using Porter’s five forces model. 

Analysis of Macro environmental factors of Amazon’s’s kirananow using five force model:

Five force framework1	Low	Moderate	High
1. Threat of new entrants
Huge capital requirement to enter industry	√
Regulatory framework to enter in the industry is flexible.			√
Customer switching cost is low.			√
Access to distribution channel and supply chain by new entrants is easy.		√
Product differentiation and offering of unique experience to customers by new entrants.		√
Customers’ loyalty towards Amazon’s kirananow creates barrier to new entrants.	√
Technological upgradation and continuous improvement to keep consumers associated by new entrants.	√
Achievement of economy of scale by new entrants is lengthy process.	√
2. Bargaining power of Suppliers
Availability of large number of suppliers in a particular region		√
Cost of switching from one supplier to another supplier is low	√
Less number of suppliers for products whose demand is high			√
Very few buyers for products of suppliers	√
Forward integration by supplier increases competition			√
Less knowledge of market by kirananow creates vulnerability and increases suppliers’ dominance.		√
3. Bargaining power of buyers
Customers are spatially distributed in large geographical regions all around the country.	√
Buyers can easily switch as switching cost is very low			√
Difficult for individual buyers to do backward integration	√
Corporate customers ability to do backward integration		√
Discounts and promotional offers reduce ability of buyers to switch.	√
4. Threat of Substitutes
Switching cost from Amazon’s KiranaNow to offline purchase is very low.			√
Substitute products offer low level of performance and quality as compared to products available on kirananow.	√
Price of substitute products are either less or same in offline market than Kirananow.		√
Psychological satisfaction of customers derived from substitute products are less as compared to products offered on Kirananow.	√
Switching cost to substitute products is high.	√
5. Rivalry among existing firms
Online grocery business growth is tremendous.	√
Large numbers of firms are operating in the industry thus creating intense competition in the online retail industry.			√
Products offered for sale by existing online retailers are same.			√
Loyalty of customers towards Amazon’s Kirananow is low			√
Huge loss is to be incurred in case of exit from industry due to huge investment in technology, distribution channel and supply chain management.		√
Intense competition to achieve market leadership in the industry.			√
Same market is being targeted by all existing firms in the industry.			√

 

Comments on industrial analysis of Amazon’s KiranaNow keeping in view factors impacting it using five force framework:

1.Threat of new entrants:

Amazon’s KiranaNow can work on increasing brand loyalty of consumers through effective and efficient customer relationship management and offering discounts and multiple offers on products available on KiranaNow. It will help to keep customers associated with the brand and increase psychological switching cost of customers.²

Long term contractual relationship with its distributors can help Amazon’s KiranaNow to target new markets easily thus availing products at low price to its customers.³

Continuous improvement in technology to render unique experience to its customers will help it to tap more and more customers and widen its reach among online shoppers.³

It should increase its funding and investment to discourage new entrants.³

It should focus on its marketing strategy to differentiate and position itself as unique brand and establish itself as market leader to influence customers emotionally and psychologically thus increasing switching cost of customers.⁴

It should focus on attaining economies of scale thus availing products at lower price to its customers and keeping customers intact with Kirananow to create obstacles for new entry.⁴

2.Bargaining power of suppliers

Amazon’s KiranaNow should explore more and more suppliers and establish long term contracts with them to reduce its dependency on few suppliers in its distribution and supply chain channel and increase efficiency of its supply chain network.⁴

It can enter into backward integration for products whose demand is high and very few suppliers have dominance over such products.⁵

It should employ people who are experts of retail grocery industry and have strong hold in market among suppliers and targeted market to avail minute details of market and thus create strong hold on suppliers.⁶

Amazon’s Kirananow can partner with manufacturer directly and invest in its production facility to reduce dominance of suppliers and also maintain quality of products consistently.⁶

3.Bargaining power of buyers

Amazon’s Kirananow should focus on increasing its customer base and targeting new market and new customers to reduce bargaining power of its customers.⁵

It should offer diversified range of products and increase number of alternative products for one category to its customers thus engaging them to purchase their grocery from kirananow.

It should keep on offering discounts and rebates for returning customers to make them loyal and offer them quick returns on products which customers want to return thus offering unique experience to them.

It should offer rewards to its customers while recommending KiranaNow to friends’, relatives and any known thus increasing switching cost of customers and reducing bargaining power of buyers.

It should conduct research and development in getting customer information and thus introduce new and innovative products on its platform to lure more and more people to buy groceries through Kirananow.⁶

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4.Threat of substitutes

Amazon’s Kirananow should run campaign on social media channels regarding inferior quality of substitute products and its demerits as compared to products available on Amazon’s kirananow to make customers aware and convince them to buy products available on Kirananow.

It should convince customers regarding superior products available on Kirananow by offering unique experience and value for money as against low quality and cost substitute products.

Offering high quality and differentiated products at low margin will increase switching cost of customers’ thus discouraging purchase of substitute products. ⁶

Kirananow should focus on delivering high quality products consistently to win hearts of customers and keep them loyal.

It should focus on creating emotional relationships with customers to impact their buying decision psychologically thus remain associated with products of Amazon’s kirananow.

5. Rivalry among existing firms   

Amazon’s Kirananow should explore new market and add new products in its portfolio to give better experience to its customers than its competitors.

Multiple Programs to maintain Long term relationship with customers should be executed to increase switching cost of customers.⁶

Kirananow should run customer loyalty campaign to increase loyalty of customers towards Amazon’s kirananow.

It should introduce latest technology on its online grocery platform for easy search of products, access to customer care executive in seconds, resolution of queries of customers promptly, simple and easy return for products return by customers and other such features that increases customers’ experience and offer simplicity and easiness while shopping online.

It should focus on achieving cost leadership in market thus beating its rivals in terms of availing products at lower price than its competitors to increase switching cost of customers as well as lead the industry by creating value proposition for its customers for purchase of products on Kirananow.⁶

It should focus on needs and expectation of customers’ data for which can be collected through conducting research on customer expectations from industry and thus creating differentiation to meet customer expectations and create a niche market for its customers and also differentiate it among its rivals in the industry.

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Task 2. What challenges is KiranaNow facing, and what strategies should it use to overcome these challenges.

Various challenges faced by Amazon’s Kirananow in its operations include:

Inability to control quality of products delivered to customers which are supplied by local retailers with whom KiranaNow has collaborated. Difficulty in Standardization of quality of product has become an issue for KiranaNow due to supply of products by different retailers to customers⁷.

Maintaining quality and delivery of Perishable products with freshness and without damage is a severe challenge Kirananow faces and it incurs huge cost in maintaining freshness and quality of products to be delivered to customers. In case of damaged products, Kirananow has to offer return without question. Cancellation and return policy increases cost of operation for the company⁷.

High attrition rate of employees pose severe challenge to Kirananow. Huge cost involved in hiring and training of delivery staff to offer unique experience to its customers pose another major challenge in terms of increasing operation cost and delivering products on time to customers⁸.

Local retailers fall short in adoption of technology thus creating impediment in value chain process and logistics management making it difficult for Kirananow to manage database of products availability and integrate with local retailers. Failure in Order processing and updating of inventory level creates mismanagement of information system⁸.

Delivery staffs are not comfortable in learning and adopting technological requirement making it difficult to connect merchants with other partners⁹.

Quality of Database available to Kirananow on customer expectations and needs are very poor, thus making it difficult to target market and customers properly. Customers prefer to buy groceries offline rather than online on platform such as Kirananow. Concern on quality of products and price negotiation is easy for customers while buying offline. Rate of adoption of technologies to shop online by customers is very slow⁹.

Competition in the industry is intense due to sprouting of many new and traditional companies offering groceries online to customers. Nearby traditional Kirana stores are now delivering products to its customers free of cost in their locality. Hyperstores such as Big Bazaar are now selling its products online thus creating new issue for Kirananow. Strategic deal of Flipkart with Wal-Mart creates another challenge for Kirananow to offer unique experience, better services to its customers and attain cost leadership to create value proposition for its customers on their spending⁹.

Indian customers have habit of buying groceries from local stores due to credit granted by local Kirana stores to them, which is again a hindrance for Kirananow to convince customers to buy groceries on its platform where such facilities are not available.¹⁰

Perishable natures of many products in groceries have likelihood of huge edible waste to be generated for its partners leading to increase in its operational cost. Cancellation of grocery order at doorstep is also one of the challenges Kirananow faces.¹⁰

Strategies to overcome challenges faced by Kirananow:

Kirananow should use its financial strength and collaborate directly with manufacturers of grocery products to overcome issue of standardization and quality control of products delivered to customers. It will also reduce cost of operation thus availing products at low price as compared to its rivals and traditional local stores which in turn will create value proposition for the customers and help to attain cost leadership in the market.¹⁰

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It should run training programs for its local retail partners to assist them in learning and adopting technology to strengthen its supply chain system and inventory management.

Kirananow should run feedback program for its local retail partners with regard to difficulties they face in technology adoption and help them to resolve their issues. It will enable Kirananow to deliver products on time but also reduce wastage of perishable products.

Kirananow should offer variable incentives to its delivery staffs and provide adequate training to understand. Learn and adopt technological knowhow to perform their duties effectively and efficiently. Company should take feedback from its employees with regard to issues faced by them and assist them in clarifying the same. It will certainly reduce attrition rate thus reducing cost of hiring and training for Kirananow.

Kirananow should conduct research on understanding needs and expectations of customers and offering value based services to them thus gaining loyalty from customers and long term relationship with them.

Kirananow should avail credit facility to customers with certain terms and conditions to be agreed upon by customers to keep them intact with company and eliminate advantage customers get while shopping from local retail Kirana stores.¹¹

Kirananow should work on offering multiple benefits to its customers in terms of free and fast delivery, discounts and offers on bulk purchase, various benefits to returning customers and customers who recommend others to purchase groceries from Kirananow. It will help to build brand image and customer loyalty. ¹²

It should run marketing campaign for its customers to use kirananow to fulfill their grocery needs thus increasing its customer base and revenue for it. ¹²

References

1. Porter's Five Forces Understanding Competitive Forces to Maximize Profitability retrieved from https://www.mindtools.com/pages/article/newTMC_08.htm. Adapted with permission from Harvard Business Review. From "How Competitive Forces Shape Strategy" by Michael E. Porter, March 1979. Copyright © 1979 by the Harvard Business School Publishing Corporation

2. Porter, M. E. (2008) ‘The five competitive forces that shape strategy, Harvard Business Review, issue 1, pp. 78–93.

3. Adam Hudson (2017). Amazon’s S Kirananow The Indian Online Grocery Market case. 3.2. Porter’s Five Forces Retrieved from Https://Www.Essay48.Com/Case/28225-AMAZON’S-S-KIRANA NOW -THE-INDIAN-ONLINE-GROCERY-MARKET-Case-Solution.

4. Brandon Hopkins (2018). Amazon’s S Kirananow The Indian Online Grocery Market Porter Five Forces Analysis retrieved from https://www.case48.com/porter-case/28225-AMAZON’S-S-KIRANANOW-THE-INDIAN-ONLINE-GROCERY-MARKET

5. Amazon’s Kirananow Case Analysis Solution. Essays24.com. retrieved from https://www. essays 24.com/essay/Amazon’s-Kirananow-Case-Analysis-Solution/88062.html.

6.  Amazon’s Kirananow The Indian Online Grocery Market Case Porter’s Five Forces Analysis retrieved from https://casesteam.com/darden/Amazon’ss-kirananow-the-indian-online-grocery-market/porters-analysis.php.

7.  Amazon’s KiranNow: The Indian Online Grocery Market Case retrieved from https:/ /www. studocu.com/in/document/indian-institutes-of-management/strategic-management/mandatory-assignments/case-1-Amazon’s-kirananow/4923518/view.

8.  KiranaNow - Strategic Company Analysis retrieved from https://www.slideshare.net/ Franziska Becker2/kirananow-strategic-company-analysis.

. 9. Amazon’s Kirana Now: Same Retailer, New Channel retrieved from https://blog.euromonitor. com /Amazon’s-kirana-now-same-retailer-new-channel/

10. Prof. Haritha, Asst. Professor, ISME (2018). Grocery E-Tailing in India –Challenges And Opportunities retrieved from http://blog.isme.in/2018/05/grocery-e-tailing-in-india-challenges.html.

11. Antonio Auricchio (2017). Amazon's Entry Strategy to the Indian Online Grocery Market: KiranaNow retrieved from https://www.slideshare.net/AntonioAuricchio/amazons-entry-strategy-to-the-indian-online-grocery-market-kirananow.

12. Franziska Becker (2018). KiranaNow - Strategic Company Analysis retrieved from https://www.slides hare. net/  FranziskaBe cker2/kirananow-strategic-company-analysis