Sunday, March 14, 2010

Market metrics for the hypermarket

Diwakar Kamath, the Marketing Director, was an object of envy for most of his peers. He was not merely endowed with a gift of gab but was also fortunate to live up to all his commitments. He was considered a seer and enjoyed such a high reputation for trust that no one would dare to question him. Yet, they were always curious to know how he was on top of every situation and met every eventualitywith great élan.

Diwakar was presented with a challenge by the board. The board had decided to build a new plant with a capacity of 30,000 units of production per year. The current consumption levels were at a mere 1200 unit per annum. Can Diwakar build up the demand base by 25 times within the next 18 months?

While everyone expected Diwakar to get rattled, he surprised everyone with his customary self assurance and composure in the face of such a daunting challenge. Diwakar sought to allay their apprehensions by electing to share his homework at the next board meeting.

“The magic of marketing lies in the state of preparedness for change. The market today is no different from Twenty 20 cricket; a limited over game that no one can claim to be a winner for ever. As long as we track to the asking rate of wickets or the run rate, we can be a winner. We have to make it our business to win each match we play everyday. That is all that counts. Since the market is so dynamic, we have to anticipate change and be prepared for every eventuality and stay a step ahead of the trends and move in with speed to be a winner.”

Unable to contain their surprise, one of the members proclaimed “Seems too simple to be credible. How would you know how good you are at every moment?”

Chuckling to himself, Diwakar presented his dashboard for market dynamics that tracked the trends of eight indices (see table) he used to continually assess his state of preparedness to meet the exigencies of the market place.

“My competitors will begin their homework not 18 months hence when you reach your full production capacity; as soon as this board decides to invest in a new plant, you will start talking to the financial institutions. That would trigger the competition to get working on their strategies to contain our presence.

If I have to ensure that you sleep peacefully at nights, I have to stay ahead of you in my state of preparedness. I have to ensure that a competent team in marketing researches on the dynamics of the market round the clock and prepares me in advance. If I have to command your trust and enjoy my professional reputation, I have to do my homework and always be battle ready.

The market worships winners and discounts losers.

To be forewarned is to be forearmed.

Have I put your apprehensions to rest?”

Dashboard for market dynamics

  1. Quick Market Intelligence
  • Market share dominance
  • Price leadership
  • Growth engines
  • Triggers for a switch
  1. Lead time for demand creation
  • Replacement
  • Substitution
  • Displacement
  • Innovation
  1. Marketing pilots
  • Quick hits
  • Short term pilots
  • Full scale roll out
  • Preemptive strikes
  1. Order book status review
  • Days of production
  • Rate of growth of consumption
  1. Demand supply equation
  • Receivables days
  • Risk appetite
  1. Stocks in pipeline
  • Shelf life of merchandize
  1. End user dynamics
  • Mark up differential
  • Learning for fun
  1. Market reputation audit
  • Fairness
  • Responsiveness
  • Goodwill


  1. This article follows that Mr Diwakar had to create 25 times demand in a short period......
    i had a few queries :

    1) Probably they will have to redefine the SEGMENT for the product....wont that compromise the current segment (one eating the other)...

    2) How will they ensure that they can Provide prompt services to all the new customer....(After sales service, Maintenance , calibration etc)....dont they need a proper services channels.........

    3) Will flooding the market with huge no's....Affect the pricing of the product....

    4) What kind of Fall back or contingencies plan can such a strategic move have

    Please advice me if i haven't understood it properly

  2. Dear Krishnan,
    Good questions .
    keep them coming. That is the beauty of the case let.
    It is meant to stimulate thinking than provide the answers.

    Everyone is welcome to respond to the thought starters from Krishnan.