This is a solution of Larsen and Toubro Marketing Mix Assignmemnt in which we discuss marketing strategies and Marketing Mix
Introduction Marketing Mix:
There are, majorly, four marketing mix elements, which are known as 4Ps of marketing. They are as follows:
Company’s marketing strategies revolve around these four Ps. However, some experts have come up with 7Ps and more than 7 even, it is certain that no matter how many Ps one discovers, these Ps revolve around the basic four Ps of marketing. Rest inventions are the by-products of the basic four Ps of the marketing (Banting et al, 2010). Companies keep on revising these four Ps of their marketing strategy, thereby altering their marketing plan.
With the passage of time, experts come up with another three essential Ps of marketing. Marketers carried out enough market research and concluded that physical evidences are to be given an equal importance to be Marketing Mix. Hence they gave following three more Ps of marketing. They extended and gave following revised 7Ps of Marketing Mix.
- Physical Evidence
Be it any kind of company; marketing mix is relevant to all companies which want to grow and want to get global. No matter a company is an FMCG or a Heavy Engineering company, if it is going to get global, it adopts marketing mix (Shimizu, 2009). Here, we are going to talk about a company which is into heavy engineering equipment manufacturing and moving slowly towards another segment, revising its marketing mix. The company selected for developing and studying the insight of their marketing mix strategy is L&T.
About the company
Larsen and Toubro majorly known as L&T, is basically into the engineering and construction equipment manufacturing. This conglomerated giant feels the saturation being into the same market, offering the same product line since decades. The times have come, for L&T, of do or die. Sensing the ever changing market demand, L&T wants to relocate itself and be a more resolute to be a value-added engineering company. L&T is a USD 8.5 billion company. It has 12 functional companies and three ancillaries. The company was founded with the focus of being largely into the following segments.
It also has an outsized publicity into the commodity market. This product line mainly includes cement and ready-mix concrete. However, realizing the market shift time, in the year 2000, L&T instigated executing its business streamlining exercise. It showed company’s first long term goal. It forecasted company’s first two five year plans. These streamlining plans set a target reaching to as wide business volume as of Rs 35,000 crore per annum; which L&T note only attained but also went beyond by 15-20%. The restricting plans of said L&T to dissociate from its cement business in errand of the Aditya Birla Group. This group had a presence in the same segment of its ready-mix concrete for construction business. This was also in preference of Lafarge SA (Shimizu, 2009). Talking about L&T’s third five-year plan, it shall be worked upon and to be realized from the year 2010 to 2015 by the company.
The operational division as on the date of L&T are:
- Engineering & Construction Projects (E&C)
- Heavy Engineering (HED)
- Engineering Construction & Contracts (ECC)
- Electrical & Electronics (EBG)
- Machinery & Industrial Products (MIPD)
- Information Technology & Engineering Services
Revising the Ps of Marketing: PRODUCT, PEOPLE and Physical Evidence Alterations
The company, L&T focuses mainly upon the Product line expansion and slowly moving from one segment to the other one. L&T has consciously made it a point that in the segment where it is shifting itself is of massive to heaviest engineering thereby creating the entry barriers for the other companies to enter.
As part of its Business restructuring exercise L&T plans to:
- The company wishes to restructure and rename the eminence of all of its twelve well-functioning companies, taking the financial out-puts, magnitude and forte into consideration. A doorsill value of Rs 5,000 crore has been predetermined in order to identify and recognize the size. For that matter, the company has clearly stated that only an ancillary which has a certain magnitude mammoth size and forte will be labelled to be an “L&T-promoted company”.See more:Marketing Planning Assignment
- The Executive vice presidents of L&T, who are running the operating ancillaries and companies, will be promoted to senior Vice Presidents, taking their performance factor into consideration.
- The third and very crucial plan is the succession plan of the chairman. This objective of L&T includes drawing and nominating a potential successor of the present chairman A M Naik who is weaving off his post in September 2012.
Under taking the internal restructuring and reformation exercise:
Late in August 2009, L&T had heralded an internal streamlining exercise. Under this L&T premeditated to set up a new unit within the company only in order to address the mounting the prospects from the railway segment (Schullz et al, 1993). This newly established unit was to be created from L&T’s current artilleries which were currently knotted in railway work. It included majorly three arms:
Another smaller yet important announcement the company made was of entering into the general insurance business.
Product and Place Alteration: Readdressing and catering to newer market altogether.
The product alteration, say slowly the market alteration is mainly taking place in one of the BRIC country and the most developing one, which is India. Larsen and Turbo, known as L&T in India, fetch the contract of the state owned oil giant of the country, ONGC. It also fetched the contract from another state owned giant, which is MHN. From its product line into the construction equipments to construction raw materials, L&T is taking the quantum leap of getting into the nuclear submarines launch (McCarthy, 1975). The company feels itself being into the smaller segment, serving only the mentioned segments of construction equipments and construction raw materials. This newer segment gives company many distinctive advantages. To list a few,
Being the first mover advantage: Being the early entrant into the segment; L&T will seek the advantage of being into the infant industry. The nuclear power is the most upcoming segment which requires a mammoth investment.
Creating the Entry Barrier: being first in the industry always has its advantages. The segment being so big for the investment, it is not easy for any passing on private player company to enter into this segment.
Distinct and Customized product to the buyer: The nuclear power is a segment where there is no chance of product delicacy. The ultimate buyer of the product will be the defence ministry of government. Here, in this segment the company will be offering the product which is the exact need of the buyer. This shall lead company not to invest much into market research or anything of that kind.
No price constraint: as it shall be an absolute monopsony type of market condition (one buyer one seller), the price revision will not be there. The company will have to invest the least in the process engineering just to address the Price factor, per say.
Higher Profit margin: this is not going to be the price sensitive market. Thus company will not have to focus upon the volume sale. Hence, better the BPR, more will be the profit margins.
L&T resumes gushing to the lead in its mission for befitting as a global player. The company has plonked itself to be aiming at of receiving one fourth, which is 25% of its revenues from its international ventures by the year 2009-10. It is also dynamically pursuing business scopes in the various endeavours like Middle East, China and Africa (Shimizu, 2003). This is because L&T sees the great latent prospective in these countries. It hunts for employing China as a centre of the mining of cost-effective components and materials. For this matter, the company has released up avenues in Beijing and Shanghai. The company also sees the Middle East as a country which can offer plenty number of scopes, taking the fact into consideration that that crude oil prices will be persistently roof kissing and subsequently, it is making the conjectures of these countries in the sectors of infrastructure, power, hydrocarbons etc. It already has numerous auxiliaries and joint ventures in this country and plans to ascertain an engineering hub in the country. The company is not avoiding the real asset of human resource. Hence, it is the investments in its manpower resources. The company seeks on to not only attracting but also at retaining as well as fostering the soft skills of its man power. It has initiated steps to identify and groom global managers who would be well trained and better equipped to deal with the global challenges.
Banting, Peter; Ross, Randolph E., 2010, “SpringerLink – Journal of the Academy of Marketing Science, Volume 1, Number 1”. SpringerLink. Retrieved 2010-11-12.
- Koichi Shimizu, 2009, “Advertising Theory and Strategies,”16th edition, Souseisha Book Company. (Japanese)
- Koichi Shimizu, 2003, “Symbiotic Marketing Strategy,”4th edition, Souseisha Book Company.(Japanese)
- Jerome McCarthy, 1975, ”Basic Marketing: A Managerial Approach,” fifth edition, Richard D. Irwin, Inc., p.37
- Don E. Schullz, Stanley I. Tannenbaum, Robert F. Lauterborn, 1993, “Integrated Marketing Communications,”NTC Business Books, a division of NTC Publishing Group.
- L&T History, Larsen & Toubro Corporate website. Retrieved 2010-03-06.
- “Larsen & Toubro – Larsen & Toubro Limited – L & T India – Larsen & Toubro Company Profile”. Iloveindia.com. Retrieved 2010-07-16.
- “(OIF), Joint Venture company formed by Larsen & Toubro Ltd. (L&T), India and SapuraCrest Petroleum Berhad, Malaysia”. Offshore International FZC. Retrieved 2010-07-16.
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