The Pricing Barrier

Objective:

Developing market strategy, product strategy and pricing policy for Tufflug to enter the Indian premium luggage market segment.

Case Diagnosis:

Monarch	Gibraltar	Tufflug
Kingpin of Indian luggage industry with 70% of the Rs 350 crore of the luggage market	US luggage giant, whose tie up with the Indian firm sent Rs 1000 crore Indian luggage industry into tizzy	Europe luggage maker who wanted to enter the Indian market
Over the years build its strong quality image that marketed molded luggage and soft luggage.	Chose a plastic sheet manufacturer as 40% partner in India and worked at strengthening its vendor base	Decided to wait and watch and send Dee to carry out market research
Failed to ensure strong product differentiation, yet nudge 10% annual growth in molded luggage segment	Gibraltar is a premium segment brand due to which pricing would appeal only to the upper end segment of the target audience.	Tufflug has to have a strong value delivery, a strong differentiator and would have to create a brand saliency to give a tough competition to Monarch and Gibraltar.
Monarch had many inherent advantages i.e it had the first mover advantage, image was clear and good deal of trade goodwill. Monarch understood the domestic market and controlled the trade.	Gibraltar can succeed if they could manage their distribution channels well.	Tufflug to enter the Indian market would have to focus on relationship management to succeed as a brand.
Monarch as a brand is well fortified in the lower end segment of the market and is establishing itself in the super premium segment by introducing its product Entice	Gibraltar would be a tough competition to monarch in the super premium segment as Gibraltar is perceived as a premium foreign brand.	Difficult for tufflug to enter the lower end segment of the Indian market due to the monopoly of Monarch.

Conclusion/Findings

1.      The luggage category in India is still underdeveloped and lacks saliency.

2.      Luggage in India is seen as a utility product and not as an accessory.

3.      The luggage market grew at a subsistence level of 12%.

4.      Indian market is divided into two categories durable luggage and functional luggage, the mid-priced affordable brands and the niche segment brands with aesthetic and innovative features.

5.   According to the case study it is realised that for converting Monarch users to Tufflug, the product would have to be substantially different and innovative.

6.      For a brand to succeed it must keep in mind that the Indian market comprises mainly of the middle class who would go for durability and functionality, but is also value conscious.

7.      Among the various foreign brand Gibraltar had the highest brand recall and saliency.

8.  Therefore, it is not long before that Gibraltar starts eating into Monarchs market segmentation.

Recommendations

1.      Tufflug would have to remember that to target the Indian market it would have to use the “value for money” strategy.

2.     To maintain its brand image as a “super premium brand” it would have to target the upper-end of the market, where the demand is for aesthetics, style and sophistication.

3.   Tufflug would have to have a good distribution channel and focus on relationship marketing.

4.   Tufflug to break into the market and give a tough competition to Gibraltar would have to build a brand image that of “world class quality product”, for which the consumers would be ready to pay a very little premium (15%-20%).

5.     Tufflug would have to come out with innovative mould design along with superficial innovative ideas.