Why is Lighter finding its market positions slipping? What is the decision issues before Lighter Executives at this stages? Lighter is finding its market position slipping because of the following reasons: a) More and more consumers were becoming price sensitive, and since its major rival, “Black Bird” was more competitively priced, the sales of Lighter have been going down. B) Retailer”s loyalty towards Lighter have decreased. From exhibit 5, we find that in case of Black Bird, retailer”s choice accounts for 76. % of the sales, where as for the flagship Lighter brand, “Four Aces”, this account for only 61% of the sales.
In an industry, where most brands are ћpushed” by the retailers, this is a major cause for concern. The major decision issues before Lighter Executives at this stage are: a) Whether to go for a cheaper brand, which can compete against Black Bird. But this step can be counter productive as it may go against the brand reputation of Lighter of providing superior quality matches. Whether to provide better terms to the retailers, so that the tillers push their products to the customers. Q. What are the main features of the matches market as indicated by the market research study?
What is the relationship of buyer and retailer behavior in the case of matches? Asked For Brand 22; 5% 6; 1% 81; 18% 32; 7% 319; 69% Picked out brand Took brand given by shopkeeper Asked by price Fig: Transactions observed at the Retail outlets(exhibit 5) From the above pie chart 69% of the sample population took brand given by the shopkeeper. Also, Consumers are price sensitive – 5% of the sample is sensible towards price. Lighter Co also started facing a fierce competition from cheaper small scale brands which weakened the consumer”s as well as Retailers” loyalty for Lighter brands.
One competitive advantage of Lighter match was its quality, which has major advantage during winter and so is the most favored brand at those times by customers. Also, the study says that while majority of consumers felt that all matchboxes were of similar quality, about one-third of the consumers felt that Lighter”s brands were sold in good quality match boxes. The main Players in the market were – Four Aces, Cheetah, Snowman, Black Bird wherein the first 3 are the brands of Lighter Co well known in North India, while the last one is of a Harlan based small manufacturer.
These brands also topped in Brand awareness according to the user represents- Four Aces(30%), Cheetah(13%), Snowman(11%), Black Bird(17%). Consumers preferred to use the lowest priced brand of matches. Most of the consumers perceived that the brands of Lighter Company were costlier compared to other brands such as Black Bird. This high price reception of Lighter”s brands has been an unfavorable factor especially in the existing market conditions. Retailers stock more of Lighter brand though they unknowingly increase the sales of Non-Lighter brand.
Brand 4 Aces Black Bird Cheetah Snow wax White Bird Kettle Michel Other brands Reported Stocking 28% Why? Marketing strategy options available to Lighter: 0 0 Position itself as a superior brand and use the existing image advantage to increase the sales by converting their high brand consciousness into brand loyalty Position itself to serve the various lasses (households, temple going people, smokers etc), and provide good quality at relatively cheaper rates. One-fifth of the respondents thought that some brands had more matchsticks than others and Lighter is perceived to contain more matchsticks than others. Lighter could therefore decrease the quantity on matches in a pack and thereby decrease the price per pack. This could tip the scale towards Lighter in terms of sale. 0 Retailers are still under the perception that Lighter brands are market leaders and unaware that they are doing increasing business in on-Lighter brands.
Hence, Lighter should collaborate more or focus more on improving terms, margins, etc with retailers to improve their sales: convince the retailers to push their brands instead. 0 0 They can go for compliments with the matchboxes and this could increase the sales as it is people tendency to move towards compliments irrespective of their price Lighter can consider for a deal with Retailers regarding the incentives paid for an stipulated amount of sales. Q: What variations do we see in customer choice and product usage?
Does the primary motivational condition help us understand the variation? As evident from the case, the primary motivational condition for the buyers is the price factor. The consumers were becoming more and more price sensitive and were by and large indifferent to the brand, except from the wet season when the consumers asked for a good quality brand. The variations can be seen in exhibit 5. Q: what is a choice heuristic? Is there any evidence of one being used? Q: what is the central threat to continued use of a brand?