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					                                     The Marketing Club
                                          IIM Ahmedabad

  Niche Newsletter, August 2009

Dear Reader,

Thank you for your support of our inaugural edition of our newsletter, we are glad you
enjoyed it. We again have an excellent collection of articles ranging from topics like the
newly emerging approach to marketing, Influencer marketing, to an academic research
on product life cycle management to Online retailing in the agricultural products market
to Brand India. We sincerely thank our contributors who responded to our call for
articles for the newsletter and the Pan-IIM Marketing magazine. We have a section on
Ogilvy and Mather trivia and wrap up the newsletter articles with a few teasers to the
discussions from the Niche NB which will make for interesting reading.

The team has been busy in the meanwhile since the last newsletter in July. We have
been involved in the Brand quiz, REM sessions, Pan IIM Marketing magazine, Faccha
interactions and much more. More tangible output on these initiatives to follow soon.
And yes, Congratulations to the winning team of the brand quiz, Jaideep Shankar
Jagannathan – R. Tamizhmaraiand and the runners up team, Aditya Sharma – S. Aditya
Sekhar 

Feel free to get in touch with us for feedback and contributing to the newsletter. Happy
reading!



On behalf of the Niche team,

Siddharth Chaudhari (8chaudharis)

  Contents

      Influencer Marketing – Ammar Tambawala and Pritesh Jain
      Nation Branding and India – Prosenjit Das
      Ogilvy and Mather Trivia – Devarshi Mandal
      Online marketing of fruits and vegetables in India: A treasure unexplored –
       Sourav Bhattacharya
      Cluster based Sustainable Product Life Cycle Management – Vishal Zinjuvadia
      Interesting stuff you can discover more about in the Niche NB 
                                                                     Niche - The marketing club | IIM Ahmedabad
                                                                      http://stdwww.iimahd.ernet.in/niche/ | niche@iimahd.ernet.in



       Influencer Marketing – Ammar Tambawala and Pritesh Jain

Imagine your next visit to your optician. After the regular eye   According to Duncan and Nick, authors of the book
check-up, he advises you to switch to contact lenses,             ‘Influencer Marketing’, (see image) these influencers may be
informing you of the pros and cons. You wonder what this is       potential buyers themselves, or they may be third parties.
leading to – is your optician working as an agent to some
contact lens manufacturer? Well, the answer to this question      These third parties exist either in the supply chain (retailers,
can be both yes or no. He is just exercising his influence on     manufacturers, etc.) or may be so-called value-added
your decision making. The motivation for such an action           influencers (such as journalists, academics, industry analysts,
                                                                                                    [1]
could have come from a manufacturer in the form of                professional advisers, and so on) .
incentives such as higher margins. On the other hand, he
                                                                  Using Influencer Marketing
might just be using his judgement to help you out.
                                                                  The first and most important activity in influencer marketing
Welcome to the age of influencer marketing. You might have
                                                                  is identification of influencers and evaluating their potential
witnessed and experienced it in the past – it’s just that the
                                                                  to serve the marketing objective. WOMMA (Word of mouth
term has become more visible. Youtube, blogs, Twitter – the
                                                                  marketing association) provides a handy classification of
tools can be many, the message is the same - “You are being
                                                                  influencers based on how they derive their power of
influenced.”
                                                                  influence. Once the target influencer has been identified, the
Compared to traditional marketing practices, influencer           next step is to market the product to the influencer, to help
marketing focuses on key types of individuals. It aims to take    increase the awareness among the influencer community.
advantage of the influence these individuals have over the        They will then become well equipped to use their influence in
target segment, with these influencers becoming the centre        favour of the firm.
of all marketing activities.
                                                                  The third and final set of activities involves the use of these
                                                                  influencers to advocate to the target segment. Influencers
                                                                   can play a direct or indirect role in this process. What we
                                                                   see in case of contact lenses is an indirect approach where
                                                                   the influencer (optician) is raising awareness about the
                                                                   category and not the brand. To complement the strategy,
                                                                   the manufacturer might put some point of sale
                                                                   merchandising to promote its product.

                                                                   Industry Practices

                                                                   One of the most common applications of influencer
                                                                   marketing is in medicines and pharmaceutical products. In
                                                                   many cases, the active ingredient is common across
                                                                   companies, and the medicines are substitutable. Since the
                                                                   law prohibits any advertisements of prescription drugs,
                                                                   companies rely on prescriptions from doctors to drive sales.
                                                                   Hence, they send their representatives to disseminate
                                                                   information to doctors and give them free samples (you
                                                                   might have seen ‘Physician’s sample, not for sale’ printed on
                                                                   mini packs in your doctor’s clinic). Sometimes, the
                                                                   representatives even check up with local chemists whether
                                                                   the medicines being promoted are selling, before they make
                                                                   a visit.

                                                                   Even in categories where advertising of the product is
                                                                   permitted, like oral care, companies don’t miss out on
                                                                   opportunities to promote their products to dentists. This is
                                                                   because an advertisement can rarely have the credibility,
                                                                   and hence the influence on the purchase decision, as a
                                                                   suggestion from the consumer’s dentist. Another avenue



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that companies use to market themselves to influencers like                    product.
dentists is sponsoring lectures on recent trends in oral care.
Use of various dental associations to certify one brand of                2.   Involvement with various medical association and
toothpaste or toothbrush is another example of influencer                      other such platforms. The visibility on such forums
marketing. Colgate has done well in this regard in India.                      provides reach to a large section of influencer
                                                                               community.
On a related note, Marico Ltd. has successfully used
influencer marketing through cardiologists to promote its                 3.   Involving various key influencers to help improve
products, especially Saffola Oil. Saffola is a safflower based                 the product offering and future product
refined edible oil that promises to help control cholesterol                   development.
for cardiac patients. When Marico launched this product in
market, the biggest challenge it faced was that most of the
customers were unaware about cholesterol. Cardiac patients
relied completely on their cardiologist and family doctors for
their information (in WOMMA classification, these belong to
Category/Subject Matter Expert group). These doctors
commanded a great amount of influence on their patients
and most of the times their prescriptions acted as a
command for the patients. Marico identified these doctors
and dieticians as its influencers.

Marketing to these influencers is done through various
activities. Here we list some of them:                                Once these influencers become aware of the product and
                                                                      accept the effectiveness of the product, they do not hesitate
    1.   Product detailing and sampling to the doctors.               in giving information about the same to their patients.
         Marico promoters visit these doctors and brief               Saffola, today, is part of many a diet charts and diet-guides
         them about the product. They use product detailers           because of such activities. This is most probably the only
         and other research documents to backup their                 edible oil that is recommended by doctors during their
         claim. Sampling helps in generating some trials if           consultation.
         the doctors find the product claims appropriate.
         Similar to pharmaceutical companies take for their




                                                           Type of Influencers (source: WOMMA)

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                                                                     So, are you ready to visit your optician now? At least now you
                                                                     know that he might be influenced by Bausch and Lomb to
Another, most common use of influencer marketing in                  ‘influence’ you into buying contact lenses.
modern times is engaging technology experts during launch
of new products. Most of the cell-phone manufacturers as             References
well manufacturers of new age software provide their
products to these experts before the product is formally                  1.   Brown, Duncan and Hayes, Nick. Influencer
launched. The experts are encouraged to write about the                        Marketing: Who really influences your customers?,
product. The influence these experts command over the tech                     Butterworth-Heinemann, 2008
savvy target segment helps in convincing early-buyers of the
                                                                          2.   WOMMA’s Influencer Handbook (n.d.). At
product and thus generating the initial thrust required for the
                                                                               www.womma.org. Retrieved July 28, 2009 from
success of the product.
                                                                               http://www.womma.org/influencerhandbook/
Influencer marketing gives a marketer an opportunity to
                                                                          3.   Srinivasan, L (1999, July 13). Marico plans three
utilize resources beyond what is owned by the organization.
                                                                               new initiatives to keep Saffola's brand-building
This necessitates establishing professional and ethical norms
                                                                               healthy. Financial Express. Retrieved July 28, 2009
on the marketer’s part. The power of influence also comes
                                                                               from
with great responsibility of using this influence in right
                                                                               http://www.financialexpress.com/old/fe/daily/199
manner. It is not uncommon to hear of companies providing
                                                                               90713/fle13051.html
excessive incentives to influencers, to ensure that they
promote only their products. The onus is on the marketer to
                                                                          4.   Ground Activities, SaffolaLife.com. Dial-a-Dietician
define the ethical and professional boundaries and stay
                                                                               image                retrieved                from:
within them.
                                                                               http://www.saffolalife.com/healthy-heart.asp




  Nation Branding and India – Prosenjit Das

As we crib and complain about brain drain, we must realise           Therefore, as traditional consumer branding discovers the
that the Indian education system and, consequently, the              niche to which the product caters, nation branding helps the
Indian workforce, are losing out to the western world’s              nation to carve out its niche in the world. The similarity ends
superior capacity to attract talent. As much as it is due to the     here, though. Wacky punch lines, sleek advertising and logos
West’s advanced infrastructure, it also reflects their ability to    might do the trick for creating and sustaining consumer
promote themselves as top notch education hubs and to                brands. But a similar approach to nation branding will serve
create an external perception that seamlessly compliments            little purpose and be a burden on the country’s exchequer.
the evolved system of education. Similar and parallel                Branding of nations is a far more complicated and long-
situations can be identified in tourism, foreign investments         drawn process than consumer branding, in terms of the
and exports and any other field which globalisation has              number of stakeholders and its implications. It must take into
thrown open to the world. Pulling down political and trade           account interests from as diverse areas as the nation’s
barriers across the world, globalisation has not only unlocked       history, its culture, export, tourism, education system,
the immense potential outside a nation’s own territory, but it       investment and public policy. An optimal and true blend of
has also fostered a competitive environment for tapping that         these diverse aspects lends a nation its unique identity,
potential. Therefore, as nations today strive hard to                which differentiates itself from the rest of the world. That
channelize as much wealth and talent as possible into their          said, national identities are not immutable. In fact, they are
systems, branding of nations has become an indispensable             constantly morphing to accommodate the changing tastes,
way to achieve these ends. A superior nation brand                   both within and outside the country.
assimilates and integrates the nation’s salient features in
terms of tourism, exports, culture, foreign investment, public       India, with differing degrees of sophistication, advancement,
policy and attracting talent and thereby strengthens its             growth and education across the country, is uniquely diverse
international relations on these different fronts. However, it       and hence a classic case of nation branding. On one hand it
is the people and not the nation itself that drive nation            might be a colossal task to harness the diversity and present
branding and hence ensuring that the brand is true and               a unified face, but on the other hand, once it is achieved, the
conforms to public opinion is of utmost importance.                  uniqueness of the brand identity is unquestionable. However,
                                                                     whether India, over the decades, has been able to present its



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                                                                                           Otherwise, India’s global image might
                                                                                           go on a downward spiral and would
                                                                                           be more associated with the 26/11
                                                                                           Mumbai terror strikes or the horror
                                                                                           that engulfed Gujarat in 2002 or the
                                                                                           attacks unleashed on the Indian
                                                                                           parliament in 2001. While extremism
                                                                                           of this sort has widespread negative
                                                                                           impact on foreign direct investment
                                                                                           and tourism, incidents like the recent
                                                                                           Delhi Metro mishap might strangle
                                                                                           exports and offshore outsourcing.
                                                                                           Sadly, contrary to what most people
                                                                                           would like to think, terrorism and
                                                                                           corruption are no longer the once-in-
                                                                                           a-blue-moon aberrations in India and
                                                                                           pose serious threats to the
                                                                                           reputation of the country, not to
                                                                                           speak of the security of its people.

                                                                                            India’s strength lies in its complexity.
best face to the world, is highly debatable. While campaigns
                                                                  The nation needs to create an asset out of this multifaceted
like “India Shining”, which unfortunately backfired, and
                                                                  and composite whole when most countries in the world are
“Incredible India” have been expensive affairs, whether they
                                                                  moving towards simplicity, following the principle that a
have been able to convince the people, both inside and
                                                                  common thread binds people stronger and makes nations
outside the country, of India’s prowess and potential, is
                                                                  more formidable. However, for India, diversity needs to be
doubtful. Traditionally considered as a soft state, a
                                                                  harnessed into a positive force, transcending barriers of
surprisingly high tolerance level or inaction against
                                                                  region and religion alike. Moreover, “brand India” should be
extremism and terrorism has single-handedly gone a long
                                                                  a reflection of its unity in diversity and declare boldly to the
way to weaken “brand India”, that was already reeling under
                                                                  outside world that the Indian republic is strong enough to
the pressure of an inefficient health system and antique
                                                                  ride through times of turbulence. However, nation brand
regulations concerning labour and land. Although even
                                                                  building does not offer knee-jerk instantaneous reactions. To
military and economic super-powers would agree that a
                                                                  rise up the ladder of the Nation Brand Index (NBI), where
certain amount of tolerance is required to maintain sanctity                                               th      1
                                                                  India is currently languishing at the 27 spot , India needs to
and project a balanced image to the world, it is certainly a
                                                                  put up sustained efforts to enhance its global perception on
possibility that India has overdone the leniency part. India’s
                                                                  the aspects of exports, cultural heritage, tourism,
apparent inaction against terror may well be construed as a
                                                                  governance, immigration and most of all, its people.
sign of weakness.
                                                                  *1+ “Anholts Nation Brand Index 2008 released”, at nation-
It is time that India leaves no stones unturned in terms of
                                                                  branding.info,    retrieved   on    31st    July,    2009
presenting to the world that its future is signified by
                                                                  http://www.nation-branding.info/2008/10/01/anholts-
Bangalore’s world class research centres, Delhi’s state of the
                                                                  nation-brand-index-2008-released/
art infrastructure or Mumbai’s fast-paced commercialism.




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  Ogilvy and Mather Trivia – Devarshi Mandal

    •          The Asian Paints

The Asian Paints Exterior Emulsion campaign sought to
upgrade cement paint users, in a traditionally low
involvement category. O&M leveraged the brand's interior
equity and its association with beauty benefit to position its
exteriors portfolio as “Time Proof Beauty” paint The brand
grew by 43% and the sign off "Badhiya Hai!" has become part
of popular consumer lexicon.

    •          Centre shock

Before the launch of Center Shock, the confectionery market
in India was on the road to decline. Within the confectionery
market , the chewing gum segment was showing a 23 %
decline. (AC Nielsen Report). Under these circumstances
Perfetti India Ltd. decided to launch a product that would        admonish parents for their irresponsible behaviour and
"shake up the market".                                            apparent disregard for the safety and happiness of their
                                                                  children.
The most startling facet of the product, Center Shock, is its
sour taste…in fact, sour beyond exceptional. So much so that      As a result of the campaign, 19 districts reported over 50%
it shakes you up. The creative challenge was not just to          booth coverage after February round; 2.8 million children
communicate this in a manner that establishes this beyond         were immunised in January and additional 6 million in
doubt for the young audience, but also to make it                 February, as compared to November 2002 round. Over 90%
memorable. And above all, shake them up. The central              respondents reported that the Amitabh spots were a major
thought of the campaign, "shakes you up", was taken               influence in motivating them to come to the booth.
forward in on-ground promotions and media innovations. As
a result of this campaign, Center Shock went from being a                  Sprite
"no brand" to the No.1 brand in the chewing gum category
                                                                  The clear lime drink Sprite stands for honesty, confidence
by the end of year 2002 with a share of 35%, whereas that of
                                                                  and simplicity. We needed to connect with the teen and
the competitor Center Fresh was 33%.
                                                                  make the brand aspirational. This was done by positioning
        Pulse polio                                              Sprite as the No Pretence drink - clear, honest and straight up
                                                                  - what you saw was what you got. The tongue-in-cheek
The campaign against Polio was designed to create a strong        campaign helped the brand grow by 62% during the
feeling of responsibility amongst parents and shake them out      campaign period.
of their inertia so as to ensure maximum turnout on the
National Immunisation Days. It used the angry man persona         Reference : http://www.ogilvyindia.com/
of Amitabh Bachchan, the screen legend of Indian cinema to




  Online marketing of fruits and vegetables in India: A treasure unexplored –
  Sourav Bhattacharya
Introduction                                                      third of Indian population is aged below 35, giving India the
                                                                  youngest work force in the World. Over 70% of this work
India ranks third in the World in fruit and vegetable             force works more than 9 hours a day and buys their
production with an annual production over 10 million MT.          vegetables weekly as they do not get time on week days. This
80% of the total fruits and vegetables production is              young work force is health conscious and hence there is a
consumed domestically by 1148 million Indians. Nearly one         need for fresh fruits and vegetables but it does not result in



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demand them due to time constraints. They are familiar to             Result of a consumer survey among 96 online shoppers in
online shopping. This creates a great opportunity for online          Kolkata and Ahmedabad
retailing of fruits and vegetables.
                                                                          •      50% buy fruits and vegetables from road side stalls
Current value chain
                                                                          •      84% (81) choose the product themselves
This value chain of fruits and vegetables is inefficient as
majority of consumers’ money goes to middlemen.                           •      55% (53) do not want to go to market to buy these
Meanwhile, the two main stakeholders – the farmer and the                        products
consumer – do not get a chance to interact. Retailing of fruits
                                                                          •      54% (52) will pay extra for home delivery of these
and vegetables in India is dominated by road side vendors
                                                                                 products
who have competitive advantage over large scale retailers
due to low over head costs and low inventory level. Recently,
                                                                          •      89% (86) think that all the products sold in internet
organized retailers are also coming into this market. They
                                                                                 are of good quality
have their own procurement centers in villages in the form of
rural malls and have a niche presence. They primarily                     •      76% (73) think that an online store can give them
emphasize on quality and price, but they are unable to                           the variety of products they want
provide convenience to the consumers.
                                                                      Based on the survey and the above discussion, the important
Porter’s five force analysis on online marketing of fruits and        value propositions, enablers and deterrent factors of this
vegetables                                                            business are identified as follows.

High supplier power: Farmers and middlemen can supply to              Value propositions
local mandis and offline stores. As they have many options to
choose from, supplier power is high in this market                        •      Time saving

High buyer power: Online retail depends upon the buyers for               •      Convenience
visiting and purchasing. As buyers can select the option to
buy from, they have high power.                                           •      Product quality

Substitutes: The substitutes are road side fruit vendors and              •      Easy access
super markets. However, as these two formats does not
                                                                          •      Variety of merchandize
provide convenience and variety, which are the main
features of an online store, they do not pose threat to this          Enablers
segment.
                                                                          •      Availability of many wholesalers in cities like
                                                                                 Mumbai, Pune, Hyderabad and New Delhi, with
                                                                                 export quality products
Competition: In India, there is only one online retail store for
fruits. There are some players selling fruit baskets online but           •      Availability of sellers from different geographical
there is no online store for vegetables in India. On the other                   locations and products
hand, there are more than 100 online fruit and vegetable
retailers in USA and Canada.                                              •      Innovation of secured payment gateway (Pay pal,
                                                                                 Paisa pay etc)
Threat of new entrants: As initial investment is low for an
online store and since it needs only a strong supplier base for           •      Growth in GDP, presence of a young and health
starting this business, threat of new entrants is very high. It is               conscious labor force
easy for offline super markets to go online as they already
have a strong supplier network.                                           •      Increasing internet penetration in homes

Based on the analysis above, it is clear that only a strong           Deterrents
supplier base is required to start an online retail store of
fruits and vegetables. The store will get a first mover                   •      Shopping behavior of consumers. Consumers want
advantage which will reduce its customer acquisition cost                        to touch and feel these products before
and build a loyal customer base for the store.                                   purchasing, which is not suitable for online
                                                                                 marketing of these kinds of products. However, this
                                                                                 behavior has changed with the increased presence



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           of super markets where consumers have less               References
           options to choose from in these product categories
           and increased time constraint for shopping               Food Processing MARKET & OPPORTUNITIES, www.ibef.in,
                                                                                   th
                                                                    retrieved on 16 July, 2009
      •    High transportation cost
                                                                    Marketing of Fruits and Vegetables in India: A Study Covering
      •    Perishable nature of the product                         the Ahmedabad, Chennai and Kolkata Markets; Vasant P.
                                                                    Gandhi, N. V. Namboodiri
Conclusion
                                                                    MARKET PROFILE ON TROPICAL FRUITS IN INDIA,
It is evident that, with the increased pattern of family income     COMMITTEE ON COMMODITY PROBLEMS, Guayaquil,
and health consciousness, the demand for high quality fruits        Ecuador, 19 – 23 September 2005
and vegetables is increasing. This coupled with the busy
                                                                                                                  th
schedule of young professionals and conversion of joint             www.fruitseller.iimakm.net, retrieved on 27 July, 2009
families to nuclear families creates a huge opportunity for
                                                                                                        th
online retailing of fruits and vegetables. However, it is           www.indiastat.com, retrieved on 16 July, 2009
important to attract customers through better offerings and                                                  th
                                                                    www.nafed-india.com, retrieved on 15 July, 2009
acquire buyers through advertisements and promotions as
this format needs to change the traditional shopping                                               th
                                                                    www.nhb.gov.in retrieved on 16 July, 2009
behavior of ‘feeling, choosing and then purchasing’. This
format gives existing super markets a great opportunity to                                                             th
                                                                    www.orgprints.org/00002684, retrieved on 16 July, 2009
cater to a niche market of young, educated professionals
which is growing at a rapid pace after IT boom in India.

---

  Cluster based Sustainable Product Life Cycle Management – Vishal Zinjuvadia



Abstract

The traditional model for sustainable product life cycle
development introduces the concepts of recycling in to the
product life cycle. Material, parts & components of used
products are fed back into the production phase of the
product life cycle for reuse. However, there are several
limitations with this approach. This paper offers a cluster
based product life cycle management approach that
addresses these limitations and achieves the sustainability
goal more effectively. Products are assigned to a cluster
based on their suitability to the cluster. A set of decision
criteria is introduced to measure suitability. The paper argues
that a cluster of tightly coupled products increases reuse and
furthers the goal of sustainability more effectively.

Introduction

Sustainable product development is a key challenge facing
the industry in the light of increasing pressure and
awareness. While sustainable product development is widely
accepted in principle, the benefits arising out of these efforts    Figure 1: Sustainable Life Cycle Management - Single Product
are meagre. Sustainable product development is not an
incremental process change. It requires a new framework             the traditional sustainable product life cycle management
with its processes and life cycle models. This paper discusses      model. Some shortcomings of this model are listed. The



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paper then introduces the concept of a ‘cluster based                         range with a 0.4 degree Celsius accuracy. Assume
sustainable product life cycle management’ model that                         that after the useful life of product A, the digital
operates on a cluster of tightly related products. The paper                  thermometer can still function within the range but
also discusses a set of decision criteria that allow us to rate               the accuracy has dropped to 0.8 degree Celsius.
new candidate products for their suitability to a cluster. In                 Clearly the part (digital thermometer) cannot be
concluding, the paper discusses how the new product cluster                   recycled to manufacture product A. However if
based approach addresses the shortcomings with the                            there is another product B that needs a digital
traditional model.                                                            thermometer with a one degree accuracy over the
                                                                              0 degrees – 120 degrees Celsius range, then the
Sustainable Product Life Cycle Management                                     digital thermometer from product A can be used
                                                                              with product B. However with the life cycle model
                                                                              we discussed in the last section, we cannot benefit
                                                                              from this synergy between products A and B.
(E. WestkaÈmper, 2000) (Petr Nemecek, 2007) discuss the
traditional sustainable life cycle management model. Figure 1
                                                                         2)   A single product based sustainable product life
shows the traditional model. Market requirements are
                                                                              cycle management model is likely to run into
translated to a product concept and then into a design. After
                                                                              unpredictability of supply of recycled parts &
the product is developed, it is handed over to the production
                                                                              components due to the variation in demand over
department. Figure 1 shows the various stages such as Raw
                                                                              time for that product. This is counter-productive as
Material Procurement, Parts & Components sub-assembly,
                                                                              the production department would need to keep
and so on that a product navigates through before it finally
                                                                              new parts and components in inventory at all
ends up with a customer. When the product is with the
                                                                              times.
customer, it may undergo routine maintenance as well as
repair operations. After the useful life of the product is over,
the customer is requested to return the product (through
some incentive scheme). Product parts, components and               This paper proposes a product cluster based sustainable life
material are recovered from the product at two occasions: 1)        cycle management system that addresses the shortcomings
Maintenance & Repair Stage when parts may be replaced, 2)           discussed above and achieves higher level of reuse. Figure 2
After product is returned by the customer. The recovered            shows an example of the system. It extends Figure 1 in that it
(and acceptable) parts, components and materials are fed            groups together two product life cycles and introduces a
back into the production process where they can be used in          central pool of recyclable material, parts and components.
manufacturing of the new products. Any material that is not         This central pool ties the product life cycles of the individual
usable may be used for secondary purposes (for example, as          products together.
fuel) or may be disposed off in an environmentally friendly
manner.

The Sustainable Product Life Cycle Management model that            In the next section we discuss more details about how a
we just discussed has a few shortcomings. They are listed           product is introduced into the cluster. First, let us go through
below.                                                              the operation of this model. The materials, parts and
                                                                    components that are recovered from the life cycle for each
                                                                    member product are added to the central pool. Any new
                                                                    products that are being manufactured can source the
Life Cycle Management           for   Product    Clusters   for     materials, parts and components from this central pool. This
Sustainability                                                      model addresses both shortcoming discussed above.

     1)   Let us say Product A needs a digital thermometer
          that covers 0 degrees Celsius to 120 degrees Celsius




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                                                                     Niche - The marketing club | IIM Ahmedabad
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                               Figure 2: Sustainable Life Cycle Management Model for Product Clusters


     1)   Product A and Product B will source from the same                   2)      Number of times a part/component is reused
          central pool and Product B can now use the                                  before being discarded: Larger the number of times
          recycled parts recovered from product A.                                    a part/component is reused the better

     2)   Because we can group multiple products together                     3)      Reuse                                                                    Ratio:
          in a single cluster, the predictability of supply of                         recycled materials , Parts , Components
          recycled parts is higher with this model.                                   re cov ered materials , Parts , Components

                                                                      A Reuse Ratio indicates how much of the recyclable items in
                                                                      the central pool were actually recycled. If certain parts
However, a lot rides on the choice of products that are
                                                                      recovered from a product are not useful to any other product
grouped together in a cluster. The next session discusses a
                                                                      in the cluster, those parts will not be recycled and will bring
set of criteria that allows the user to determine the suitability
                                                                      the reuse ratio down. A Reuse ratio closer to one is
of a product to a cluster.
                                                                      preferred.

                                                                              4)      Product Chain Share Percentage (PCSP) =
Cluster Acceptability Criteria & Score

A cluster is as effective as the products it contains. Hence the       (% Parts / Components in Pr oduct A that Pr oduct B can use) 
selection criteria for the products to be introduced into a            (% Parts / Components in Pr oduct B that Pr oduct C can use) 
cluster are vital. First, let us determine the performance             (% Parts / Components in Pr oduct C that Pr oduct D can use) 
parameters that measure the effectiveness of a cluster:                (% Parts / Components in Pr oduct D that Pr oduct E can use) 
                                                                       ................................................................................................. 
     1)   Duration for which parts/components/materials
                                                                       (% Parts / Components in Pr oduct X that Pr oduct A can use)
          stay in the pool: Smaller the duration the better.




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                                                                    Niche - The marketing club | IIM Ahmedabad
                                                                     http://stdwww.iimahd.ernet.in/niche/ | niche@iimahd.ernet.in


Products A, B, C,..,X are members of a cluster.                           2)   Product clusters across firms

PSCP indicates the interdependence of various products on                           a.   Several firms may elect to form a cluster
each other. A PCSP closer to one is desirable. If a product Z is                         of products provided they satisfy the
introduced in the cluster that has no dependence on any                                  criteria listed in the previous section.
other product in the cluster, it will considerably reduce the                            Such a inter-firm product lifecycle
PCSP value.                                                                              management        model     would   need
                                                                                         appropriate accounting policies in place
Each cluster has acceptable ranges of variations that are                                to determine the contribution of each
allowed in these performance parameters on addition of new                               product to the shared pool and to the
products. A candidate product is evaluated based on the                                  other firms. Measures similar to ‘carbon
above parameters. It can be introduced in to the cluster                                 credit’ (Wikipedia - Carbon Credit) may
provided it does not push any of the performance                                         be put in place to ensure the firms are
parameters outside the acceptable ranges. In order to create                             encouraged to participate and obtain
an effective cluster it is important that the products that are                          returns commensurate with their
included in the cluster exhibit following characteristics:                               contribution to sustainability.

     1)   Products in a cluster should share the type of parts       Conclusion
          or components needed to manufacture them.
                                                                     Sustainable Product Life Cycle Management has direct impact
     2)   Complementary       products      should         have      on a company’s revenues, costs, supply chains and more
          approximately equal production rate.                       importantly society. In troubled economic times, these
                                                                     sustainable strategies may not be the top priority of
For example, if product A and product B are complementary
                                                                     corporate houses unless they are presented in a way that has
in that certain recyclable parts in product B are useful for
                                                                     predictable benefits tied to it for the company as well as the
manufacturing new product A items and vice versa. If
                                                                     society. Cluster based Product Life Cycle Management
product A has a production rate of 100 per year and a useful
                                                                     improves the effectiveness of this sustainable strategy by
life of one year, we can expect to receive roughly 100 count
                                                                     bringing together synergetic products into a cluster such that
of product A in returns from customers each year (in a steady
                                                                     the sum benefit is greater than the benefit of individual
state) after the useful life of the product is over. If product B
                                                                     parts. The products are based on a set of criteria to
is in the same cluster as product A, then product B should
                                                                     determine their suitability to a cluster. The key to generating
also have a similar production rate so that a similar number
                                                                     a highly effective cluster is to group together products that
of product B items are expected in return. This way product A
                                                                     can sustain each other. With some fine-tuning, each cluster
and product B can sustain each other.
                                                                     can come up with its own acceptability criteria. A cluster
                                                                     based product life cycle management model is more effective
     3)   Some parts/components may lose some accuracy
                                                                     at achieving the goal of sustainability than the traditional
          over time. In that case, the other product(s) in the
                                                                     sustainable product lifecycle model.
          cluster should be able to use the part/component
          with the decreased accuracy. In other words, after
                                                                     Bibliography
          the useful life of a product, the parts/components
          used in that product should be reusable by the             E. WestkaÈmper, L. A. (2000, October 25). Life cycle
          same or some other product in the cluster.                 management and assessment: approaches and visions
                                                                     towards sustainable manufacturing. Proceedings Institution
Challenges
                                                                     of Mechanical Engineers Volume 215 Part B , 599-626.
A Product cluster based approach to Sustainable Life Cycle
                                                                     Jörg Niemann, S. T. (2008). Design of Sustainable Product Life
Management model offers some challenges that need to be
                                                                     Cycles. Springer.
addressed before the benefits can be realized. The challenges
are grouped together in 2 categories below                           Maxwell, D. v. (2003). Developing sustainable products and
                                                                     services. Journal of Cleaner Production Vol. 11 Issue 8 , 883-
     1)   Product clusters within a firm
                                                                     896.
The products within a firm would now co-exist in a symbiotic
                                                                     Petr Nemecek, A. K. (2007, December). INTEGRATION OF LIFE
manner in a cluster. However if the firm’s business model is
                                                                     CYCLE AS A BUSINESS APPROACH. Czech Republic.
not aligned with this objective, the effectiveness of the
cluster based approach may reduce.                                   Wikipedia - Carbon Credit. (n.d.). Retrieved July 1, 2009, from
                                                                     http://en.wikipedia.org/wiki/Carbon_credit


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                                         Niche - The marketing club | IIM Ahmedabad
                                          http://stdwww.iimahd.ernet.in/niche/ | niche@iimahd.ernet.in



Interesting stuff you can discover more about in the Niche NB 




                                        Aircel’s innovative campaign to leverage the
                                        Mumbai monsoon mayhem and touch
                                        people’s lives (search for ‘Aircel’ on NB by Ammar)




                                                                                                    12
                                               Niche - The marketing club | IIM Ahmedabad
                                                http://stdwww.iimahd.ernet.in/niche/ | niche@iimahd.ernet.in




     Viral Marketing campaigns – effective
     and worth the money or not? (search for
     ‘Interesting campaign’ on NB by Samosa)




Leo Burnett’s website and differentiation
from regular websites (search for ‘is it a
website, is it an ad’ on NB by Soubhagya)




                                                                                                          13
                                                           Niche - The marketing club | IIM Ahmedabad
                                                            http://stdwww.iimahd.ernet.in/niche/ | niche@iimahd.ernet.in




                                          Nokia’s full, front page ad for N97 with
                                          interspersed news and discussion on its
                                          effectiveness (search for ‘Nokia’ on NB by
                                          Soubhagya)




And much more – Mercedes’ campaign, Careers in marketing ppt used in the Niche REM, Print and video advertising
links for internship placements preparation, Barista’s venture into serving idli-vadas. Log on to the Niche NB for
interesting discussions and opinions on current marketing news.




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