A new case study for the MBA students

This case is about two competing products in the market. Let’s call them B & C. Product C has had an illustrious history, it has been in the market for over a century. There was a time when it had almost a 100% market share. Even today C has the largest market share. Product B also has a rather long history but has always been second (or third or fourth) in terms of national market share. There are geographical niches where B has a larger market share than C. There are other small, geographically niche products out there with locally significant market shares. But really speaking only B and C have national footprints. 

B & C, since they are directly competing against each other in the same national market, have been at loggerheads with each other. C has an innovative marketing strategy, perfected over decades. It doesn’t bother to tout its own product benefits. It simply attacks its rival products, especially B. C claims that product B has highly toxic side-effects, especially for the various customers segments that are ultra-loyal to C. B claims that C promises a lot of benefits but doesn’t actually deliver any of them. The C Company also screws its customers (who are also its shareholders) by skimming off a large part of the product revenue and stashes it away offshore in the name of its directors. But most importantly, B Company has major objections to how C Company markets its products. Though C claims to be a national brand, it has perfected the art of finely dividing its national market on the basis of demographics and appoints its local salesreps that appeal only to their like-demographics and screw everybody else. 

B and C (and the other smaller geographically dispersed competing products) claim to offer the same benefits to the customers, and so do the other products (let’s call them DZ or khichadi, they make you dizzy with their marketing campaign strategies anyway). But there is absolutely no other similarity between B & C. 

But C has been having some problems recently – a couple of decades. A number of C executives have been leaving C to start their own start-ups in various geographies. Most of the geos where non-C (or non-B) products (from DZ khichadi) have captured higher market share, belong to ex-C executives. But C didn’t mind these upstart start-ups. Even though they took away some market share from C, they succeeded in keeping B out of their respective markets. 

Then in the last couple of years everything changed. A new product, let’s call it product A, suddenly burst on the scene. It was a start-up company, headed by a charismatic, brilliant IIT engineer. Product A also offered the same benefits to the customers, but with a twist. They claimed that product A would remove all the wastage that was an intrinsic part of product C. Essentially, ‘A’ offered to lower the cost of the benefits offered by C and also promised to drastically improve the benefits that were claimed by C. Was it competing against product C or product B? Or both? And what about the other D-Z products? Was it competing against all of them? Did ‘A’ actually have any benefits that were different from B or C or D-Z? 

Most interestingly, ‘A’ has adopted an intriguingly disruptive two-pronged marketing strategy. On one hand, it has exclusively focused on the C Company’s skimming activities. ‘A’ claims that it will stop all the skimming. It has also bucketed B Company in the same league. The other interesting aspect of ‘A’s marketing is that it is outdoing C in every aspect of marketing. Since C offers freebies to its customers, A is offering even more freebies. Since C tries to offer reservations to some of the demographic niches, A is offering even more reservations. Since C offers to deport foreign authors who invite the ire of some of its demographic niches, A hobnobs with the leaders of that demographic group and even goes to the extent of befriending the guy who offered a reward for a murder of the said author. In essence, ‘A’ is outdoing C in every respect as its marketing strategy.

Now the questions to discuss for the class are:

-          If ‘A’ is marketing itself as a more pure version of C, is it likely to capture the market share of C or B?

-          If ‘A’ is not offering even a token marketing gimmick that may compete with B’s core campaign, why would B’s loyal customers switch to ‘A’?

-          If ‘A’ is professing to devour the market shares of everybody – from B to Z with special emphasis on C – but going out of the way to ape C and D-Z then why should B take on A?

-          If some of the ‘B’ customers are switching to ‘A’, are they really the customers of B in the first place?

-          And lastly, what happens if ‘A’ gives the same customer experience as C? After all, like any new product, the proof of the pudding is in eating it, no?