MICROFRIDGE CASE ANALYSIS SECTION – D

GROUP - 5

SWOT ANALYSIS –

STRENGTHS WEAKNESS
1. Patent for special
1.Inadequate
designed circuitry.
segmentation of
2. Strategic Contracts customers.
with leading
2. A young brand
manufactures like
name.
Sanyo.

OPPORTUNITY THREATS
1.Arising need for safe
cooking solution in 1. Any big brand can
student dormitories. easily imitate the
product with slight
2. Need for compact modifications thus low
fridge and microwave entry barriers.
consuming less power

PROBLEMS AND SOLUTIONS –

A. College Administrator –
PROBLEMS SOLUTIONS
Bennet was Unable to make them realize the product’s Since product differentiation is not alone sufficient, he could have shifted
needs. to emphasize more on fear of loss due to fires in student dormitories
Missing structure that would incentivize or persuade Tie-ups with insurance companies may reduce cost or use it as a sales
the administrators influencing partner.
Recommendation: -
As we know fear sells easily, the shift in pitching which shall emphasize more on fear of loss due to fires rather than product
differentiation alone will bring positive need realization amongst administrators towards the product.

B. Choice of Distribution Channel – The brand was unknown, finance crunch and there was lack of experience.
OPTIONS PROS CONS
Option 1 - Eliminate - Higher profit margins - Lots of risk since no experience
distributors/retailers and sell directly - Risk of no/less buyers due to trust issues
to customers - Longer sales cycle
- Competition with distributors
Option 2 - Sell to distributors - Elimination of risk of no/less Buyers - Lesser profit margin (70%)
and no experience
- Shorter Sales Cycle
Option 3 - A combination- Until - Elimination of risk of no/less Buyers - Lesser profit margin until switch
establishment, sell through until establishment - Longer sales cycle post switch
distributors and later switch to - Gain time and experience and then
selling directly to customers switch to house accounts
- Higher profits in long run
- Shorter Sales Cycle initially

Recommendation:-
We recommend Option 3 because it is wise to eliminate the potential risk in the short run and increase the profits in long run.
Managing the cons: The problem of less profits initially could be managed through external financing and the subsequent
problem of longer sales cycle after switch in the long run could be managed by investing in setting up of own stores

C. Marketing –
PROBLEMS SOLUTIONS
• Product not branded properly -Should be primarily marketed for branding catering towards trust
building
- Product placement on warranties etc
• Negligent initial marketing - Test marketing could have been implemented before entering the
market whereby students are made to use the product for trial period (1
week). Here, costs < benefits.
 • No Innovative marketing campaigns - Free 1 month common room availability in dorms then survey of
likes/dislikes for primary data.
- In college fests and sports events, partnership should be done with
hosts, to keep the drinks in the fridge freely as part of product
placement.
- Partnering with a popular college drink company to place their
products in the microfridge at the time any youth event.
• Missing additional services - Telephone customer service booking and home repair services which
would be free as per warrant terms. Profits could have been allocated
here.
Recommendation: -
We recommend marketing to be focused around branding and trust building as it is a new product, also as it is college centric
product we suggest to go for many innovative marketing campaigns that would increase the marketing budget by around 20%
but will give a much larger revenue due to brand recognition.

D. Competition, Imitation and R&D –

PROS CONS
-Even after the imitation of the idea, Bennett’s - Research and development is very costly affair specially for a startup
company will be able shine and grow over the others working independently like Microfridge
- Even after heavy spending one cannot be sure of results.
-Modification of the product will fulfil the need of
consumer and help to sustain its customer.
Recommendation: -
Keeping one eye on Customer and another on Competitor is helpful to evolve dynamically in the competitor led imitation
environment and spending on R&D is investment for company that generates return in a long term.

E. Budgetary Constraints –

PROBLEMS SOLUTIONS
- To hire some skilled salesman (Maybe Intern from target college) that
After having Sanyo as a manufacturer, it is not feasible can provide better pitch with low stipend.
to carry out low profit margin and heavy debt at a
same time - To approach some local manufacturer for different parts of product
which can be assembled at low cost.

PROS CONS
After hiring such skilled salesperson, the company can - It can create more burden on expenses by hiring such skilled men
assume some growth in profit margins, so that it can
resolve the debt burden at earliest

If the company approach to some local manufacturer - It will disbalance the mutual treaty between Bennett and Sanyo
for small part, that can reduce the expense and
enhance more profit
Recommendation: -
We recommend he should try approaching the local manufacturers for the constituent parts so that he can minimize the cost of
production, and eliminate the huge importing and shipping cost.

CONCLUSION: -
• To ensure well execution of the plan, it is advised that microfridge takes into account the afore-
mentioned problems and the recommendations so as to minimize the risks. Also, it needs to keep a
continuous vigil on the external factors and adapt to the dynamic environment to remain in business
and sustain.

• Disclaimer: All recommendations are provided based on the facts and figures provided by the client
with respect to current market scenario and are subject to unpredictable market changes.