Decision Problem: Preparation of a marketing strategy for Gluco-One given the pricing pressures.
1. Explore new markets
2. Small number of High value customers Vs Many Low Value Consumers 3. Incur more costs to maintain the quality Vs Cut back on number of customers
Decision and Rationale:
1. New Markets:
Beer industry (220 million liters) at present is not using Liquid Glucose as a raw material. It would not be a right choice to venture into new markets given the bad state of customer service in existing markets. Moreover it would be a challenge to venture with a price of Rs.11/kg vs Rs.9/kg of other raw material.
2. Pharmaceutical and Confectionary
The Organized sector comprises for the 70 % of total demand (in turn revenue also). Thus emphasis should be to retain clientele in this segment.
3. Customer Segmentation (Needs are different)
Segment Type| Demands| Experience|
Organized sector (national): | Absence of black particlesAcceptable SO2 content| Long association and preferred A-One as a supplier| Unorganised sector | Sugar + liquid glucose should boil well once mixed| 1. Lack of proper communication| Multinational Pharma 1| Highly specific technical requisites| * Quality issues @ Hyderabad * Batch issues and challan mismatch * Type of Drums| Multinational Pharma 2| Highly specific technical requisites| Lack of quality, product turns hazy|
Note: All the customers value timely delivery; A-one has not been able to fulfill this basic need.
More drums should be procured, to supply liquid glucose to pharmaceutical companies. Leakage problems should be addressed.
Steps to improve quality should be taken to reduce haziness. Sales executives should be hired so as to improve the communication to clients.
Exhibit 1: Distribution Channel