Case Study : Safari Batteries
Essay by Subhashis Ghosh • December 21, 2015 • Essay • 378 Words (2 Pages) • 1,643 Views
Case Study : Safari Batteries
Summary
Case is about Safari Batteries dilemma on pricing and profitability with the changed government policies and competition in market.
Safari Batteries was one of the oldest battery companies and strong in certain segment and markets. It was strong in UP ,Bihar, Gujrat and Mumbai in torches and transistor batteries.
It was 3 rd largest and had 30% market share of the 50% “D” segment battery segment. It’s torches were also popular. It had significant rural presence and operated through wholesale channel. Price was it’s strategy of market penetration over the years. In urban area and retail channel it was insignificant.
Safari Batteries have been adopting market share strategy continuously losing margins by holding price in spite of increased costs. Pencil Sales and retail sales of “ D” cells had not improved in spite of investments in the brand building for the purpose. The battery were selling as commodity and not brand. Challenge on hand was defending the price and market along with profitability. Whether to sell as brand or commodity.
Problem Analysis : Safari Batteries was a follower in the market and adopted pricing as the tool for market share. It was having issues with retail sales channel and in urban market. Batteries were selling as commodity with no clear brand loyalty. Investments made on brand building had not identifiable results on sales. Competitor was able to hold on price putting pressure on Safari Batteries cost structure being a lower priced product than market leader Energy.
Rural market with low literacy and education levels identify product with their logo and colour. Rural markets have low intensity of competition and distribution and product availability are the key issues. Safari Batteries being one of the oldest , identification is not a challenge and needs to focus only in increasing it’s distribution to maximum sales points. Currently it has huge rural market to cover and can increase price up to market leader , since batteries are sold as commodities. Also in urban market and pencil cell it should focus on distribution and retail margin than branding. It can bundle it’s batteries with torch to increase sales. These are some of the strategy it can adopt.
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