Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Information to share” section.
Paragraphs highlighted in blue can be verbally communicated to the interviewee.
1. How would you start thinking about this problem?
Since this is a very open question, there are a number of ways to approach it.
A good interviewee will mention the following aspects:
- Ease of use
- Value proposition
- Benchmark the product against competitor’s products
- Target market segments
- Brand loyalty
- Price sensitivity
- Important attributes
- Customer preferences
- Buying habits
3. Distribution channel
- Distribution network
- Shelf space and product position relative to competitors
- Share of distribution network relative to competitors
2. Women are one of IBC’s biggest segments. However, their market share in this segment has been declining. How would you identify the reasons behind this trend?
- Market research to investigate brand awareness
- Benchmarking against competitor products
Suggested case structure:
I. Product / Market
First we should have a look at the current market situation:
3. What is the current market [in $] for the company?
Share Table 1 (market development overview) and Diagram 1 (market share overview) if inquired by the interviewee.
that can be shared on the interviewee’s inquiry:
- Market shares have been declining or stagnating in the last two years:
- 10% p.a. for the women’s segment
- 5% p.a. for the men’s segment
- ± 0% for the teenagers’ segment
- IBC’s market share in the men’s segment is quite low.
- The company’s market shares are declining.
The interviewee should calculate the current and future market share.
= 0.5 * $400 m+ 0.1 * $100 m + 0.25 * $50 m
= $222.5 m
Current total market share
Future market in two years
If we assume the current market share trends hold for women, men and teeneagers, the following sales will be the result:
Future market share
Market share change = 0.297 - 0.4045 = -0.1075
If the current market share trends hold, IBC will lose about 10.75% in market share over the next two years.
II. Customer / Brand awareness
4. What is the current level of brand awareness?
Information that can be shared on the interviewee’s inquiry:
- IBC and Cosmetica INT. have the highest brand awareness in the market.
- IBC and Cosmetica INT. are perceived as having high quality products.
Share Table 2 (brand awareness overview) and Table 3 with the perception of quality.
- Compared to IBC, Cosmetica INT. has higher brand awareness amongst customers and non-customers.
- IBC should improve its brand awareness via advertising.
- IBC should improve its perceived quality by investing in promotions and partnering with retailers to launch marketing campaigns.
A good recommendation will include the following statements:
- Market information shows that compared to Cosmetica INC., IBC has lower brand awareness and perceived quality. This is one of the reasons for IBC’s declining market share.
- If this trend holds, the company will lose a lot of market share.
- To regain market share, the company should focus on advertising and marketing.
- The company has low market share in the men’s segment. The company should target this segment because the women’s segment seems to be maturing,
- The company’s market share in the teenagers’ segment seems to be very low. The company could increase their market share by producing innovative products and increasing acceptance and usage of hair color products.