Marketing Management- 1

Individual Assignment-1
Competitive Response Matrix

Submitted to: Prof. Jayesh Aagja

Prepared by: Pratyush Ranjan
Roll No. 211285
Section D,
MBA-FT (2021-2023)
Institute of Management, Nirma University

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Introduction:

A competitive response matrix is an industry-analysis tool that can be used to compare the
characteristics of different brands against the action taken by the company of interest.

Competitive Response Matrix:

As shown above in the figure, there could be three reactions of the Company B in counter to
three actions taken by Company A. These three action and reaction can be called as “Price”
(reduction), “Quality” (increase) and “Advertising” (Increase). So, this adds up to a total of 9
action-reaction scenarios of Competitive response which happens in market. The coefficients
in each cell of the given table indicate the probability of the occurrence of that particular
scenario. For example, Cpq denotes the probability that Company B will increase the quality
of their product as a competitive response if Company A reduced the price of their product.
We will be discussing the brand and product of interest in this Assignment is Voltas and Blue
Star.

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 Brand of Interest: Voltas
Product: Air Conditioner

Voltas Limited is an Indian multinational home appliances company. It specialises in air

conditioning and cooling technology. The company came into existence on 6 September 1954
in Mumbai, as a collaboration between Tata Sons and Volkart Brothers. It is a subsidiary of
Tata company. Voltas is quite famous in India for its quality of product and value for money.
It has different kind of product like Air Conditioners, air coolers, refrigerators, air purifiers and
water dispensers are sold under the name of the brand.

In this assignment, we will be focusing only on Air Conditioners of the Voltas and its rival
brand, so that we can get brief idea about the Air Conditioner market “How the action taken
by a company affect the rival company to react on the action in term of prices, quality and
advertising.

In the next pages, we will be discussing the 9 unique scenarios competitive response.

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Scenario 1: Cpp (Price vs Price)

On March 3,2021, Voltas had further reinforced its leadership position in the Cooling
Products space, by launching the new enhanced version of the Voltas Maha
Adjustable Inverter AC.
The launch came after studying the ‘India’s Cooling Habits’ conducted by Voltas
during the pandemic last year, which stated that, more than 70% of consumers used
their Inverter ACs for more than 8 hours, while over weekends 60% of consumers
used their Inverter ACs for more than 12 hours.
The main feature of the Ac was that it consumes less electricity and the price was
also lesser than other premium brand. During “Holi Festival” Voltas further reduce
the price of this Ac.

The reaction observed later was: -

• Reduction in the price of Blue Star 1.5 Ton 5-star Ac by Rs2100.

• LG starts providing assured gift voucher on their AC.

• Samsung had also introduced affordable schemes like attractive EMI options
where customer can own a Samsung AC at zero down payment, up to 15%
cashback, 5-year free gas recharge.

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Scenario 2: Cpq (Price vs Quality)

On March 3,2021, Voltas had further reinforced its

leadership position in the Cooling Products space, by
launching the new enhanced version of the Voltas
Maha Adjustable Inverter AC.
The launch came after studying the ‘India’s Cooling
Habits’ conducted by Voltas during the pandemic
last year, which stated that, more than 70% of
consumers used their Inverter ACs for more than 8
hours, while over weekends 60% of consumers used
their Inverter ACs for more than 12 hours.
The main feature of the Ac was that it consumes less
electricity and the price was also lesser than other
premium brand. During “Holi Festival” Voltas further
reduce the price of this Ac.

Following reaction was noted later: -

• On 19th March 2021, Blue Star launch a

segment of split AC called “Affordable
Cooling with Blue Star’s High Quality ACs.”
• The AC was available in various cooling
capacities ranging from 0.80TR to 2TR.
• ‘Eco-Mode’ for energy-saving.
• ‘Blue Fin’ coating for both IDUs and ODUs for
Longer life.
• ‘Comfort Sleep’ function that auto adjusts
the AC temperature during night time for
better comfort of occupants as well as power
savings.
• ‘Self-diagnosis for troubleshooting to protect
the AC from any critical failures.
• These ACs have a metal enclosure for the
PCBs to ensure additional safety.

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Scenario 3: Cpa (Price vs Advertising)

Voltas Maha Adjustable Inverter AC was released in march 2021. This range compliments the
consumer’s need for energy saving and comfort. In this segment, it was cheaper than the other
brand. The price of the AC was in the range of Rs 39,900-42000.

In response to this release, Blue Star also started to advertise a new segment called
“Affordable Cooling with Blue Star’s High Quality ACs.” It had advanced microprocessor-based
controls, that is programmed to quickly and precisely maintain the room temperature. Blue
star also equipped ac with Dual Rotor Compressor result in fast cooling and noise reduction
and the price of this segment was under Rs39000.

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Scenario 4: Cqp (Quality vs Price)

Action Response

During February 2020, Voltas came up with To counter the Voltas new product Blue Star
this new mode Voltas PureAir Ac (4502968- launched its new range of best-in-class
185V ADQ). residential air conditioners. This new range
PureAir AC came with a compact LED targets the expectations of those customers
system, with peak emission wavelength of who desire premium, high-quality ACs but at
180nm to 280nm, which quickly disinfects pocket friendly price.
the indoor air by killing germs and
pathogens like virus and bacteria. The price of this category was reduced to Rs
Voltas PureAir AC also has Titanium Oxide 31,900 – Rs37990.
coated air filtration system, which removes
harmful gases and Volatile organic
compounds (VOC) from indoor air to make
the air perfectly healthy for human
consumption and the price range was from
Rs58,990 to71990

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Scenario 5: Cqq (Quality vs Quality)

On March,2021, Voltas had further reinforced its

leadership position in the Cooling Products space,
by launching the new enhanced version of the
Voltas Maha Adjustable Inverter AC.
It was consisted of Multi Adjustable Mode,
Intelligent switching within multiple tonnages,
basis ambient heat and number of people in the
room. It had Superdry Mode which Controls the
humidity levels in the room by quick
dehumidification.
Not only it had High Ambient Cooling Which Keeps
user comfortable even at 52°C but also it is eco-
friendly.

In response to this, Blue Star launched a new

variant class of Ac called “EBTU”.
It was specially designed to deliver powerful
cooling even in extreme summer.
Unlike the conventional motor, these operate on
an electronic commutating arrangement, there by
extending reliability while exhibiting reduce
operative noise.
It had Automatic 4D swing which help in uniform
cooling.

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 Scenario 6: Cqa (Quality vs Advertising)

On March,2021, Voltas had further reinforced its leadership position in the Cooling Products
space, by launching the new enhanced version of the Voltas Maha Adjustable Inverter AC.
It was consisted of Multi Adjustable Mode, Intelligent switching within multiple tonnages, basis
ambient heat and number of people in the room. It had Superdry Mode which Controls the
humidity levels in the room by quick dehumidification.
Not only it had High Ambient Cooling Which Keeps user comfortable even at 52°C but also it is
eco-friendly.

In response to this, Blue Star went aggressive on their advertising campaigns, and the ads of
DATULV and EBTU were being seen on TV commercial and all around the web – be it social
media, YouTube or google ads on your smartphone. The hoarding was seen on the traffic signal
describing Blue Star products.

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Scenario 7: Cap (Advertising vs Price)

On March 3,2021, Voltas had further reinforced

its leadership position in the Cooling Products
space, by launching the new enhanced version
of the Voltas Maha Adjustable Inverter AC.
The main feature of the Ac was that it consumes
less electricity and the price was also lesser than
other premium brand. During “Holi Festival”
Voltas further reduce the price of this Ac.

The Voltas started advertising with a slogan

“India Ka Dil, India Ka AC” and in the
advertisement we could see in 52* C
temperature you can make your room like a
winter.

Responding to this Blue Star launched its new

range of best-in-class residential air
conditioners. This new range targets the
expectations of those customers who desire
premium, high-quality ACs but at pocket friendly
price.

The price of this category was reduced to Rs

31,900 – Rs37990.

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Scenario 8: Caq (Advertising vs Quality)

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During the time of Diwali, Voltas started advertising its inverter Ac model
number (123V EY) and (183V5Y) on newspaper with the promise of providing up
to Rs 21000 exchange cash. The advertisement said that there would be 5 years
warranty.

In response to Voltas Advertisement, Bluestar brought the portable AC A

portable AC that moves along with you incorporating a highly-efficient rotary
compressor, anti-bacterial silver coating and castor wheels for easy movement.

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Scenario 9: Caa (Advertising vs Advertising)

On March 3,2021, Voltas had further reinforced its leadership position in the Cooling
Products space, by launching the new enhanced version of the Voltas Maha Adjustable
Inverter AC.
The main feature of the Ac was that it consumes less electricity and the price was also lesser
than other premium brand.

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In response to this, Blue Star went aggressive on their advertising campaigns, and the ads
of DATULV and EBTU were being seen on TV commercial and all around the web – be it
social media, YouTube or google ads on your smartphone. The hoarding was seen on the
traffic signal describing Blue Star products.

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 REFRENCES

• https://www.myvoltas.com/air-conditioners-technology

• https://consumer.bluestarindia.com/air-conditioners.html

• https://brandequity.economictimes.indiatimes.com/news/adve
rtising/blue-star-rolls-out-new-campaign-featuring-virat-
kohli/81566718

• https://in.pinterest.com/pin/389139224055743539/?autologin
=true

• https://www.bijlibachao.com/air-conditioner-ac/voltas-ac-
technologies-india-review.html

• https://www.google.com/search?q=blue+star+advertising&tb
m=isch&chips=q:blue+star+advertisement,online_chips:air+con
ditioners:sukN2hrhDXY%3D&rlz=1C1CHBF_enIN957IN957&hl=e
n&sa=X&ved=2ahUKEwiNitm7oJfyAhVuM7cAHeVYBNMQ4lYoC
XoECAEQIA&biw=1263&bih=552

• https://consumer.bluestarindia.com/airconditioners/portable.h
tml

• https://www.prnewswire.com/in/news-releases/voltas-
presents-its-2021-range-of-maha-adjustable-inverter-ac-
strengthens-its-portfolio-of-cooling-products-and-home-
appliances-808316925.html

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• https://www.theweek.in/wireupdates/business/2021/03/04/p
wr17-voltas.html

• https://www.thehindubusinessline.com/companies/volt
as-strengthens-its-cooling-products-
portfolio/article30990578.ece

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