Interview with Ramon Puente: The Marketing Problem

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Del curso dictado por IESE Business School

Analysis of Business Problems

17 calificaciones

IESE Business School

Analysis of Business Problems

17 calificaciones

Curso 5 de 5 en SpecializationFoundations of Management

When does an opportunity to increase the bottom line become a liability for long-term brand sustainability and profitability? That is the question that GAS GAS, an off-road motorcycle manufacturer, is confronting. In this culminating course, it’s time to use the business tools you have learned throughout the specialization to solve this real business problem. To help you as you develop a solution to the GAS GAS dilemma, in the Capstone you will also learn a six-step analysis of business problems methodology. By the end of the course, you will understand how to weave together considerations from accounting, finance, marketing and organizational behavior in order to arrive at a sound decision that will positively impact the firm’s future.

De la lección

Week 2: GAS GAS Marketing Problem

Now that you understand a bit of the history of GAS GAS, it’s time to analyze the situation from a marketing perspective. The decision to manufacture bikes for KTM will undoubtedly have an impact on consumers, branding, pricing and channels. Will that impact be positive or negative? Are the risks worth the long-term benefit? What should the CEO take into consideration when making a decision? By the end of the session you should have enough information to advise Ramon Puente about the relevant marketing issues. Objective: To apply the marketing concepts acquired in Marketing: Understanding Your Customers in order to evaluate and make a decision about GAS GAS.

1. Week 2 Intro1:38

2. Consumer Considerations and Branding3:39

3. Pricing and Channel Considerations3:08

Interview with Ramon Puente: The Marketing Problem5:51

Conoce a los instructores

Carlos García Pont
Professor
Marketing Department

[MUSIC]

And it looks like people accelerate a lot some of the projects that you had and

could provide you one or two million Euros cash.

But here, what's given your financial situation,

it would significantly change the position of the company.

But from a marketing point of view, were you not afraid

of the asymmetry of the strength of the two brands?

>> Absolutely, KTM have a very well recognized brand all over the world.

Much, much better than GasGas and it's a marketing machine.

In that case the strength, or it was so

strong to even get apart of our business, our trial business.

I know that some people that use trial,

GasGas trial bikes will move into KTM because of brand basically,

even the bike will be same or better, we don't know.

But they will move into KTM.

That was the main issue.

On the left side, some of our importers all over the world were so

afraid about that to have a competitor like KTM because

we have competitors like Sherko Beta, Abaton that was the main

reason and that was, it's a very small business that they have in trial.

It's different bike with four stroke, different for

the two stroke bike that we are using.

It was not a big player on that market and

a big player in that market was GasGas, who was the leader of the market.

To introduce KTM in that market is a huge risk for the future talking about sales or

marketing issues, even importers and dealer.

>> Did you evaluate the amount of cannibalization that?

>> We talked a lot in the board about this issue but we never

agree on an amount, we never agree on an amount.

Because of that, I would say, well, if we have enough money that

we get from selling these bikes to BTM or

getting the four-stroke engine, we can focus more on trial.

And we can then invest more on trial than other competitor in the world.

>> But a problem would then be that KTM would not want the old bike.

They would want to, you know.

>> Well, that was an issue that we discussed a lot on the contract,

we utilized with KTM.

>> If we provide the new engines on the new bike or the old one.

[LAUGH] That is one of the key points that we discuss on that,

about which kind of bike we would provide to them.

>> And there was so much difference in one year engine from one year to another?

>> Not so much, but more or less in the industry

every two years we change plastics and frame.

In four years, we need to change the engines.

Then the main difference are not [INAUDIBLE].

>> So different that KTM would not be able to add something to the engine to make it

either different or competitive,

at least at the same level of competitiveness as the GasGas engine?

>> The huge amount of investment is only based on the engine.

Then if you provide the engine, you have the knowledge, you have the to change for

external somewhat difficult to change the engine or

to provide more, to make some changes on our engine.

>> Was that the case mentioned at a certain point in time that there two not

alternatives, but there are two ways, right?

One is KTM stealing market from the others and the other one is KTM making the market

grow, especially in the places where- >> Where we're not-

>> Like US or probably Germany a bit more,

where the trial market is not as well developed.

>> That is a good point.

My approach on that was to say, due to the fact that Honda is not

so interested in the market, are small companies.

If we introduce KTM in this industry, in my opinion,

the current market will grow because KTM is able to reach other kind of markets.

And for me, even these are some canalisation of our brand,

at the end of the day, some of, I guess, the market will grow.

Because for different countries like US, like Asia,

like Australia, like Latin America, they don't know anything about trial.

The big market is in Spain, Italy, France and UK, basically.

And the possibility to import a big brand in this area,

in this industry, I think that we have the market to grow.

[MUSIC]

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