Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
Strategic Decisions and Focused Marketing
Shino Palackal Jose
Strategic decisions and Focused marketing are key ingredients for
successful business. Strategic decisions are decisions to be framed amidst
very uncertain and sensitive business environment. Focused marketing is a
three layered marketing effort using agents, field staff and promoters.
Strategic segmentation puts the company always in the forefront of the
industry. Product lines of a leveraged company have to be very carefully
determined. Customer Relationship Management fosters focused
marketing and strategic segmentation if implemented professionally. The
presence of a visionary is inevitable for any business to succeed. A
motivated business man can even bring about the attitudinal change of
people. Good business houses promote growth and development of the
economy. This paper mainly focuses on Strategic decisions, Focused
marketing, Strategic Segmentation, Efficiency of distribution channels,
Product Lines, Customer Relationship Management and Business Vision.
Introduction
Corporate decision has been an issue of interest in business literature since
globalization. The primary goal of Management is wealth maximization of
Shareholder, which transforms into maximizing the value of the company as
measured by the price of the company‟s common stock. Corporate decisions are
recognized as centrally important because of the increasingly significant role of the
business in the economic growth of the nation. The objective of the corporate
manager should be to take an optimal decision that will enhance the value of the
firm. Corporate decisions have implication for investors, managers, leaders and
other stakeholders.
Given the diversity in corporate objectives and environments, it is conceivable to
have divergent corporate policies that are specific to firms, industries, markets or
regions. Researchers were targeting the decision models long since. The models
and techniques already developed do help the managers in framing strategies to a
good extent. A study on corporate decisions and events associated with them may
help both investors and corporate houses alike. India, as a developing country,
following a liberalized policy towards corporate houses, provides ample space for
research in the field of corporate decisions.
Kerala, one of the Indian states presents a very different business environment. The
macro environment of this particular state is unique enough and has become a threat
to any kind of business strategy. This paper evaluates the business environment of
Kerala state, more popularly known as „the God‟s own country‟. The business
environment of this state may be worth studying as it has got its own jargons for and
against business. A state which had 363 off days due to hartals in just seven years‟
time is a society worth studying. Hundreds of business have demolished on account
of strategic failure in this state. At times, the state was known to be a business
enemy. It records the highest rate of unemployment in Indian states. Ironically, the
Mr.Shino Palackal Jose, Department of Business Administration, St. Pius X College, Kannur University,
India. Email: shinopjose@yahoo.com
1
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
state records the highest rate of literacy as well among Indian states. The peculiar
nature of the state and strategic success of business in this state might bring ample
attention of the world and could help in decision studies.
Strategic Decisions hold its increased importance in the crisis affected corporate
world. Finance may be considered as the lifeblood of business. Counter arguments
stand for People. But Finance, Marketing, Human Resource etc. hold equal
importance to a company. If the functional departments of a company take the role
of „Human Organs‟, the company shall be considered as a „Human Body‟. Thus
corporate decision has got equal status of life blood, taking the company as a human
body. The Corporate decisions, like life blood, function from head to foot, i.e., from
top level to functional level and it is the responsibility of a company to ensure that it
has got purified blood, because in the corporate world there is no chance at all for
fate. If the decision is strategic and intelligent, no doubt that there comes success.
So professionalizing corporate decisions is an area of research with ample scope
and importance. A poor corporate decision will attract far reaching consequences.
The strategic success of some business groups in Kerala could be analyzed under
the purview of the unfavorable nature of business environment of the state.
Literature Review
Ahluwalia M.S. and Kurian N.J1 has stated about the widening regional disparities
especially in industrial growth across states. According to them the inadequate
response of the state stands as a stumbling block before industrial and economic
growth.
Analysis made by Parande P.S2 points that the multinational companies have been
very much helpful in the growth of Indian companies. No companies have so far
found demolished on account of foreign players, rather they have achieved a
competitive edge in the warfront business.
Ashitha Raveendran3 has pointed out in her thesis that the industrial sector in Kerala
is facing problems in respect of financial, production and technical, labor,
organizational, infrastructural, policy of the Government etc.
In the study, “Structuring Industrial Linkages in a Developing Region- The Case of
Kerala”, P. Mohanan Pillai4 observes that the historical forces also have important
role in tuning Kerala as an industrially backward area.
Henrich R.Greve 5 rightly puts it as „learning from others does not happen unless the
firm decides to change. Although, we most easily notice failure when a firm tries to
learn from another and does not succeed, the more common failure is to not even
try‟
Quoting HDFC‟s Deepak Parekh‟s words, Dr. Antony Kallambally6 states that Food,
Cloth and Shelter are the dream of an average Indian. But the business brings
success when food, cloth, shelter etc. reaches customers beautifully and yields
customer satisfaction.
2
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
Mridul Eapen‟s7 comparative study of Kerala‟s industrial structure with south Indian
states reveals that industrial sector in Kerala is less diversified and had low share of
engineering industries.
Data/ Methodology/Propositions
The Population and Sample
The population for the study constitutes from two major business houses in Kerala
such as
1.
2.
Manorama group
EMKE group
Here, Judgment sampling doesn‟t affect the scientific testability of the findings
because the nature of the paper demands the author choosing companies based on
popularity and performance, which can be attained only through Judgment Sampling.
More than that, the research work is centered on the corporate decisions. The focus
of the researcher is not on the sample but is on the decisions and business
strategies
The first phase of the paper highlights the economic, natural and cultural business
environment in Kerala state.
The second phase of the paper focuses on BCG star group businesses grown in this
unfavorable business environment. The paper analyses two business houses,
successfully framed strategies and achieved business success in Kerala. They
operate in sectors of Media, Entertainment, Retailing, Manufacturing and exports,
Import and distribution, Business services etc.
Kerala
Kerala has got an elaborate history for commerce. It is known to be the best place of
the world for the spice trade. As the Spice Coast of India, ancient Kerala hosted
traders and travelers from all around the world. Chinese, Portuguese, Dutch, British,
French, Arabs, Greeks, and Romans were regular traders with Keralites. The imprint
of their trade still exists here in the forms of architecture, cuisine, literature etc.
Kerala is a state offering real hope for the future of the third world. Its major earning
is still from agriculture, rubber leading from the front. It is India‟s most progressive
state in terms of social welfare and quality of life. Keralites enjoy education and
health at levels that are on par with the western world. India‟s highest literacy rates,
highest life expectancy and lowest child mortality rates are key features of this state.
The people of Kerala are seemed to be the best in India in grabbing service and
opportunities. They have a greater say in their governance. It is also considered as
India‟s best in law and order. Kumarakam, a place of Kerala is the first place in India
to implement responsible tourism. Backwaters, Houseboats, Ayurveda, Spicy
cuisine, Beaches, Greenery, High Range etc. are key attractions of this state.
Arabian Sea is situated in the west. The Western Ghats is towering 500 – 2700
meters in the east. There is a network of forty four rivers in Kerala. Tall mountains,
deep valleys, endless backwaters and an extensive coastline etc. put it with diverse
geographical features. Kuttanad, Kumarakam, picnic village in Kollam, Alappuzha
Canal Cruize, Fort Kochi, Valiyaparamba, Padanna Backwaters, Thiruvallam,
3
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
Alappuzha – Kochi cruise, Ashtamudi, Chithari, Kumbalangi, Vembanadu Lake,
Ponnumthuruthu Island, Placid backwater stretch of Ashtamudi, Alappuzha Canal,
Marine Drive Kochi, Kavvayi Kayal, Muzhappilangad Driving Beach etc. some of the
glistering tourism destinations in Kerala.
The culture and education standard of people have developed a very sensitive
system in Kerala. Very strong and aggressive media added fire to the system.
People are seemed very cautious about the developments. Industrial development is
always viewed at a second thought. „Strikes‟ and „Hartals‟ are the common means
for the people to protest. Both the government and the opposition use the same tool
for exhibiting protests and people being the victims have adapted themselves to this
system. In the last 7 years, there were 363 off days on account of „Hartals‟. „Hartal‟
as a protesting tool is very strong enough to make the day in a standstill. The
Government offices do not work, no vehicles are taken to the road, no hotels or
shops get opened and people stay at home, wasting their precious time. This system
is anti-industry and anti-business. Companies will have to face a lot of struggles if
they want to operate in the state.
It is at this juncture, that the importance of some companies wins attention of
business academics. They have turned the unfavorable conditions into favorable
ones.
1. Manorama Group
The Indian print media is one of the largest in the world. The times of India being the
8th most circulated newspaper in the world with a daily circulation of 3146 million.
Malayala Manorama stands fourth with a daily circulation of 1514 million. Circulation
of the newspapers is certified by the Audit Bureau of Circulation (ABC). The list of
the Top 10 Newspapers in India is compiled by the ABC according to the circulation
of the dailies.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The times of India – English
Dainik Bhaskar – Hindi
Dainik Jagran – Hindi
Malayala Manorama – Malayalam
The Hindu – English
Eanadu – Telugu
Deccan Chronicle - English
Ananda Bazar Partrika – Bengali
Amar Ujala – Hindi
Hidustan Times – English
Source: Website. Audit Bureau of Circulation
Manorama print media the best example of successful implementation of customer
segmentation. Manorama group is an active player in media. It has been
acknowledged as the leader of media in Kerala in every aspect. Malayala
Manorama, a newspaper daily is the fourth largest circulating newspaper in India. It
is the largest circulating vernacular daily in India. Most important point to be noted
here is that it is a vernacular daily and is targeted only Malayalam speaking Kerala
4
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
people and has become one of the leading newspapers in India. Though this paper
analyses the print media presence of Manorama, it is important to note their leading
position in visual media and broadcast media as well. Manorama News channel and
Radio Mango are leading from the front in their respective segments.
Marketing Strategy
Malayala Manorama is a newspaper daily, which has really proved their strategic
success. From a very unfavorable business environment they have groomed as a
leading newspaper in India. It is really surprising to see that a vernacular daily in the
local language Malayalam is competing with The Times of India, The Hindu etc.
having a world language (English) as the means. The top management of the
newspaper is entrusted with the duty of framing the marketing strategies. The
strategy execution is entrusted with the circulation department. The circulation
department of Malayala Manorama is apt enough to ensure timely reach of the
newspaper into the hands to the customers. Implementation of the marketing
decision of the newspaper is the sole responsibility of the circulation department. As
the marketing strategy is managed by the circulation department, it has to catch up
with new customers by increasing the circulation. Another noteworthy point is that
there is a space marketing department in Manorama which is helping the public and
society in advertising to the world through the space available in dailies and
publications. The space marketing department of Manorama is found very active and
successful. It has managed a differentiated advertising tariff based on the targeted
page of the customer.
Distribution Channels
Manorama depends on direct distribution channel for the circulated newspaper. They
directly appoint agents on the basis of demand of the newspaper in a particular area.
People in very remote area shall depend on postal services. The statistics state that
the nearest competitor of Manorama is 8,00,000 copies behind of Manorama in
Kerala.
Focused Marketing
Manorama has successfully implemented focused marketing in Kerala. There is a
three layer wing in Manorama for focused marketing. It includes agents, field staff,
and promoters. If the circulation is found low in a particular area, the agents report it
to the field staff. The field staff will make a study on the case and will implement a
corrective action in that area. In most of the cases, this step alone solves the issue. If
this method is not found working, the promoters will take up the case and go for
canvassing and the like marketing campaigns for the area. The focused marketing is
found down – to – earth and is another strategic success of Manorama group.
Focused marketing helps Manorama identify the level of customer satisfaction and
primary strategies shall be framed thereupon to improve customer service. Another
important function of „Focused Marketing‟ is to identify customer expectations. The
so called three layers of „Focused Marketing‟ do easily identify the customer
expectations. The detailed and time bound report of this team, do bring focused
changes to this newspaper.
5
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
Strategic Segmentation
The customer segmentation of Malayala Manorama is unique enough and is another
secret behind their success. It has leveraged the brand name Manorama for
customer segmentation. Manorama is catering to the needs of the following classes
of society and has segmented the market accordingly.
1.
2.
3.
4.
5.
6.
Pre Primary
Primary
Upper primary
Men
Women
Farmers
Manorama has got various product lines to satisfy the readers of each of these
segments. The product line includes the following
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Manorama News Paper
Manorama Weekly
Karshakasree
Year Book
Bhashaposhini
Fast Track
Sampadyam
Annual
Panchangam
Book Division
The Week
Thozhil Veethi
Vanitha
Balarama
Arogyam
Kalikkudukka
Magic Pot
Tell me why
Customer Relationship Management (CRM)
The Customer Relationship Management is another citing example of
professionalism of Manorama. They frame strategies for managing and nurturing the
company‟s interaction with customers, clients and sales prospects. The main
objective is to find, attract, and win new customers, nurture and retain the customers
already company has, entice former clients back into the fold and reduce the cost of
marketing and client service. Customer Relationship Management is a companywide strategy connecting the entire customer – linked departments and even
beyond. It brings people, processes and technology work in synergy and thereby
effectively increasing profitability and reducing operational costs.
The strategic success of Manorama is an adaptable business case for the world.
6
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
2. EMKE Group
Mr. Yusuffali M.A shall be described as one of the most prominent business
personality from India. He has been included in the Forbes 2013 Billionaires in the
974th position. Source: Forbes 2013 Billionaires List. He anchors a diversified
conglomerated business group which is now focusing on proving Kerala as an
investor – friendly state. Headquartered in Abu Dhabi, the capital city of United Arab
Emirates, the group is best known for its chain of Shopping Malls, Hypermarkets,
Supermarkets and Department stores. Lulu Chain of outlets followed by Al Falah
Plaza and Emirates General Market are leading business ventures of Mr. Yusuffali
M.A. The group is a brand established in retailing which is ably supported by a good
network of import, distribution and whole-sale marketing operations. The group also
possesses a cross-continent network of outsourcing operations. EMKE Group with
its 30,000 strong work force has operational bases in UAE, Oman, Qatar, Kuwait,
Bahrain, Yemen, Egypt, Soudi Arabia, India, Indonesia, Kenya, Thailand, China,
Hong Kong, Benin and Tanzania. The key difference of EMKE Group from
Manorama Group is that the former developed as a business conglomerate from gulf
and now focusing on to bring business established in Kerala. The Government in
Kerala is now considering Mr. Yusuffali M.A as an unofficial representative of Kerala
to the world. He is very actively involved in social front and is associated with various
organizations. Recognizing his remarkable achievements in Business & Industry and
distinguished social work, he was awarded the prestigious Padma Shri in 2008. He is
an honorable odd one out, who, with his powerful capacity, is striving to bring foreign
investment and expertise to Kerala. His initiative in establishing the first and only
International Airport in Kerala, with private participation is one among the
commendable many. His diplomacy was greeted when he paved the route for the
Kochi Smart City venture.
Establishing Lulu Mall, the largest Indian Mall in Kochi is considered to be a
landmark success which has raised the energy level of the state Government in
bringing up the infrastructural development in Kerala. Over 25,000 Keralites are
directly benefited from this retailing juncture by means of direct employment.
Findings
1.
Manorama is a business group that have turned out the unfavorable
business environments into favorable ones.
2.
Marketing strategy of Manorama print media provides scope for a
detailed study. Majority of marketing activity has to be executed by circulation
department of print media. Space marketing is also an important area of focus.
3.
Distribution channels should be precise enough in ensuring the timely reach
of print media into the hands of customers.
4.
Focused marketing is another strategic area for print media which is directly
associated to customers and so need to be given prime importance. It includes
agents, field staff and promoters.
5.
Strategic segmentation is another learning point from Manorama print media
which is yet another success of their focused marketing.
6.
Customer Relationship Management is not a new point to learn about and is
fostering „Focused Marketing‟ and „Strategic Segmentation‟ in all respects.
7.
EMKE Group is a different picture and is underlying the need of a visionary in
any successful business.
7
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
8.
EMKE Group is trying to develop Kerala as an investor friendly state. Mr.
Yusuffali M A has become a stalwart by exhibiting tremendous courage and energy
in investing directly in Kerala.
9.
Diplomacy of a business personality will help him break any stumbling block,
which is the noteworthy learning point from the case analysis of EMKE Group and
Mr.Yusuffali M A.
The paper evaluated the strategic management of two business houses in turning
unfavorable conditions into favorable ones, the present strategic role of these
business houses in this Indian state and the attitudinal change of people and politics
of the state.
Conclusion
To conclude, the basic objective of this paper is to develop models that will help
corporate world in taking optimal decision. Decision as such may be weak or strong
but the strategic role of the decisions in this particular business environment is an
interesting area to study. Through this paper the author has analyzed the strategic
success of these business houses in a very strange business environment.
Manorama group has established a successful business in Kerala with a strong
circulation department, focused marketing and strategic segmentation. They have
developed themselves from print media. The wide range of customer support has
helped them compete with national newspapers. If a vernacular daily has
successfully competed with national level newspapers, it is a proof of their strength
they have acquired from Kerala‟s very complicated business environment.
Manorama‟s success is prevalent in every media, including visual and broadcast
media. The strategic role behind success is the learning point which is shown by
their success in tyre industry as well. MRF, a leading radial tyre manufacturer is a
brand diversified from Manorama. Mr. Yusufalli M A is a true visionary and a
motivating personality for people of business interest. His promising efforts have
brought about attitudinal changes in the people of Kerala. The Government of
Kerala, Opposition to the Government of Kerala, different social groups of Kerala,
religions and cultural organizations etc. are celebrating the success of Mr. Yusuffali
and have acknowledged him as a role model. His passion in development and
success is bringing up the business Kerala. His social commitment is a blessing for
the downtrodden and is highly commendable. Being a successful business tycoon
from Gulf, focusing on the motherland to flourish his investment is providing
promising future for Kerala. To be very specific, the cases of Manorama group and
EMKE group and their business strategies provide an ample scope of research.
Limitation
1.
Since the paper analyses only two business houses, the scope of
generalization is limited
2.
The applicability of statistical data is limited and the paper is factual and
analytical. So there is a question of scientific testability
3.
The universal application of the paper is based on the business environment
in which it is to be applied.
8
Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
References:
Ahluwalia, M.S. and Kurian N.J, Economic and Political Weekly, 2000 Feb, May
issues. Print
Parande, P.S. Coping with Liberalization: The Industry’s Response to new
Competition, Response books, New Delhi-2000. Print
Raveendran, Ashitha. Economics of engineering industries in Kerala. Ph.D Thesis
submitted to M.G.University. 2002, Print
Pillai, P. Mohanan. “Industrial Economy of Kerala- Nodes and Linkages” Structuring
Industrial Linkages in a Developing Region – The case of Kerala. (Eds) D.
Rajasenan & Gerard de Groot, Published by CUSAT, 2006. Print
Greve, R. Henrich, Business Today, 2013 March issues. Print
Kallampally, Antony. Business Deepika, 2013 March issues. Print
Eapen, Mridul. “Industrial Economy of Kerala- Nodes and Linkages”, Rural
Industrialization in Kerala: Re examining the issue of rural growth
linkages- (Eds) D. Rajasenan & Gerard de Groot. Published by CUSAT, 2006. Print
9