Victor Brand Case Analysis

Q.1) SWOT ANALYSIS:

Strengths:

 Price advantage in the crowded milk market. Was available at the lowest price: Rs 65
 Various nutrients like Vitamin A,B1,B2,B12 as well as minerals, niacin and iron were added.
 Increased Budget for Advertisements in 2000: from 8 lakhs in 1999 to 30 lakhs in 2000
 Aggressive marketing through regional newspapers and promotion through sponsoring cultural
festivals in 100 B class towns
 Attractive commission policy to retailers.

Weakness:

 Only 25000 retail outlets when compared to the larger companies which had over 1 lakh
 Advertising only at the regional level. National Market is neglected
 Some ingredients could not be added to victor plus because of their incompatibility and
machinery constraints.
 Almost nil presence in A+ retail outlets and only 5% in class A retail outlets
 Retailers perceived Victor plus as a brand which lacked appeal and visibility and may not move.

Opportunity:

 Under Utilized production capacity-has a large installed production capacity which can be
exploited
 Blind taste tests elicited a favorable response from the customers
 Can try to tap the “drinking chocolate” market
 Can tap the lower income households because of its lowest price in the market. Can emphasise
on its value for money aspect.
 Can venture into the institutional segment which comprised mainly of vegetarian restaurants.
Could be offered at a lower rate than Victor and also this segment has lower brand loyalty which
would help Victor in positioning itself in this segment.

Threats:

 Large number of well established competitors in the market

 Consumption of white beverage is increasing, more so in South India where Victor has a large
consumer base.
 Retailers not willing to provide shelf space to Victor plus
 Many respondents did not consider Victor as a national brand- Negative image in the minds of
the custom
 Competitors may come up with a good tasty product
Q.2) Problems faced by Victor Plus
 Not perceived as national brand because positioning was inconsistent
o 1st it was promoted as an energy drink, later it was promoted as an instant chocolate
drink
 Needs to decide if it wants to be a regional player or a national player
 Victor is not perceived as a national brand inspite of an all India retail presence.
 Retailers unwilling to provide shelf space to Victor plus because of its low brand visibility.
 A very crowded market, not able to differentiate itself from the other brands
 Low revenue resulted in lower advertisement expenses
 VCIL had about 25000 active retail outlets compared to Nestle and Cadbury’s over 1 lakh retail
outlets
 Victor Plus was available only in 20 percent of VCIL’s retail outlet

Q.3) Plans of Branding and Marketing for next year

As discussed earlier, Victor Plus brand image is not consistent. To overcome this, we suggest launching
different variants targeting different segments. These variants can be:

 Pure Taste: North and West Indians use Victor Plus as a milk additive/taste enhancer. An
extension of Victor Plus as a pure taste enhancer can be launched in these areas.

 Pure Health: Target segment can be old people and South Indians which constitute a major
share of the market for white beverages.

Company needs to decide whether it wants to be a regional player or national player. If it wants to be
seen as national player, then it cannot ignore advertising through the medium of television as it has the
highest penetration.

Increase the Price: Price of competing brands is much higher than the Victor Plus’ price. In order to be
seen at par with its competing brand, it may increase its price by 20% i.e., Rs. 84 instead of current Rs.
70. By increasing the price, VCIL could improve the nutrients and the packaging. It may come up with a
reusable container or some promotional schemes to lure the kids.
Q.4) Calculation of BEP and Sales Target
Variable Cost per 500 gm 38.78
Price set by VCIL 57.4
MRP of VCIL 70
Total Revenues 28799876
Allocated Fixed Costs 12983200
Total Fixed Costs 16983200
Break-even Point 456,047
Current Net Profit -7640801.2

This shows that the company’s target should be to achieve 456 tonnes of sales of Victor Plus. But let us
take a different angle to this.

Total Company Sales 350000000

Sales from Consumer and Industrial Products 200000000
Sales from Victor Plus 28799876
Sales Value of Chocolates 85344000
Industrial Product Sales 85856124
MNC Contract 150000000

Contribution Margin from Victor Plus 32.44%

Contribution Margin from Chocolates 32.44%
Cont. margin from industrial products 15%
MNC Contract 12%

Contribution from Victor Plus 9342399

Contribution from Chocolates 27684761
Contribution from Industrial Products 12878419
Contribution from MNC Contract 18000000
Total Contribution 67905578
Total Overhead costs comes to be Rs. 6,89,16,000. This shows that company is nearly able to cover its
fixed and variable costs as a whole. Thus company is in good position but it should try to increase its
revenue to generate profit or return on investments through the points we have mentioned earlier. The
next year’s target could be set to reach the break-even point which is 456 tonnes.

Q5) Do an ingredient and nutrient, utility comparison of the competing brands

with Victor plus and bring out the POPs and PODs.  What all ingredients and
nutrients will you add to get the appropriate utilities for Victor plus. ?

  Gives Form Growth of tissue Taste Immunity Digestion Metabolism Energy

Bournvita 1 1 1 1 1 1 1

Maltova 1 1 1 0 1 1 1

Boost 1 1 1 1 0 1 1

Milo 1 1 1 1 0 1 1

Victor Plus 1 1 1 0 1 0 1

Nutramul 1 1 1 1 1 0 1

Table 1: Brand – Ingredient Utility Matrix (Combination of Table 2 and 10 from the case)

The above table thus indicates that Victor plus doesnot have any ingredient that contributes to
immunity and Metabolism. This thus becomes the point of differentiation. Rest of the utilities is the
point of parity with the competitors.

Table 2: Brand –Nutrient Utility Matrix (Combination of Table 3 & 11 from the case)

  Repairs damaged cells Metabolism Growth of Tissues Immunity Blood Growth of Bones

Bournvita 1 1 1 1 1 1

Maltova Data Not available

Boost 1 1 1 1 1 0

Milo 1 1 1 1 1 1

Victor
Plus 1 1 1 1 1 1

Nutramul Data Not available

The above table indicates that victor plus is at point of parity with the competitors at all the utilities
possible. It also takes care of immunity via the nutrients added to the brand. However, only Vit B2
contributes for metabolism.

Thus, we recommend addition of Vitamin C to the brand Victor Plus to increase metabolism utility.

Q6) Comment on the positioning  of Victor and Victor plus? Draw 3 most
important perceptual maps to show the position of Victor plus. What according
to you, should be Victor plus's positioning  platforms and hence positioning
statements, according to your group?
From the above perception map we can see that Victor Plus is almost similar to Maltova in price and
taste. It ranks high on both parameters and has better taste than Boost, Milo and Nutramul and lags
behind only Bournvita. Victor Plus is also priced better than most competitors like Milo, Boost and
Nutramul.

Victor Plus is perceived to be very low on Nutrition content as well as brand name. It is found to lag
behind all its competitors in these two areas. This shows that the brand’s positioning as the Nutritious
cocoa drink is not working and the consumer is not able to associate the Victor as a nutritious drink.
Hence the brand’s positioning needs to be changed and the brand should be positioned on its core
strength which is its taste. More so as its competitors like Bournvita, Nutramul who are positioned as
health drinks are doing very well.

From the above perception map we can see that Victor Plus is considered an easy to mix product. It
ranks high on this attribute as compared to other competitors. However the packaging of Victor is not
very attractive as compared to others like Milo, Boost, Maltova and other products.

Positioning of the product – Victor Plus

Drawbacks of current positioning:

1. The current positioning of the drink as nutrition drink does not go down too well with the
consumer as shown in the perception map.
2. The positioning of Victor initially was as energy drink then changed to nutrition and tasty
drink. The brand attempts to compete with its existing competitors on all attributes rather
than positioning itself on its core strength and build on that strength.
3. The positioning statement “ The tasty and Nutritious Cocoa drink with milk” does not
strike a chord with the consumer and is not catchy either.
4. The brand needs to create an identity for itself, find a word or associate itself with
something that becomes synchronous with the brand. For example, when u talk to boost
we immediately think of it as a source of energy, as their positioning, promotions and
advertisements are all centered around the word energy.

New Positioning strategy:

From the Ingredients utility table, we get the following composition of victor plus and the utility it
contributes to.
 Energy Position
Victor Plus
Gives Growth of Tast Immunit Digestio Metabolis
  Form tissue e y n m Energy
Malted Barley 0 1 0 0 0 0 1
Sugar 0 0 1 0 0 0 1
Salt 1 0 1 0 0 0 0
Cocoa 1 1 1 0 0 0 0
Potassium
Bocarbonate 0 0 0 0 0 0 0
Caramel 0 0 0 0 1 0 0
Added Flavour 0 0 1 0 0 0 0
Glucose 0 0 1 0 0 0 1
Count 2 2 5 0 1 0 3

We can see that Victor Plus is high on taste followed by energy content.

From the first perceptual map, we can see that the consumers rate Victor plus high on taste as
compared to other competitor’s products. This can also be seen from the blind taste tests that were
done where the consumer chose Victor Plus over other products.

Hence we suggest Victor Plus to be repositioned as “The Tasty Energy Drink”. Also by this positioning
both target segments of children and mothers can be captured.

Q.7) Should the package be re-designed? If yes, How? Design and draw and
explain.
Victor’s current label:

Comparing with the competitor’s labels, we observe the following drawbacks of the current label:

– Too many colours. The colour of the label should represent the brand to create an
identity for the brand

– Brand name is not clearly visible on label, should have bold and blocked fonts so that
brand name is visible at a distance

– The label emphasizes on drifferent things on front and back side. It should have one tag
line and should stick to it.
 – The backdrop could be more appealing, currently it is very plain and there is lack of
continuity.

Keeping above points in mind, we have designed the new label as follows:

The main aim here is to ensure the brand has its own distinct identity. The colour Blue was chosen as the
brand colour and the emphasis of the packaging is on attracting children and mothers and drawing
attention to the taste factor of Victor Plus.

Packaging:

The idea is to create a packaging that creates a point of differentiation with respect to other products.

We suggest that they should not stick to one form rather have different forms for different quantities
and have special packs. The different forms of packaging could be:

– Differently shaped bottles

– Bottles that could double up as water bottle, once the content is used up. This could
draw the attention of many children and parents.

Eg:

– Smaller container packs to promote the taste. These packs could serve as trial packs for
new customers and this type of packaging involves low cost. These could serve as refill
packs too.

Eg:

– Use of one colour on all packs -> ensure the brand identity

Q.8) What should be Victor plus' promotion/advertising channels and budget?

(Create one sample rough print ad)
Target segment : Mothers and Children, Medium to High Income group.

Promotion strategy:

– Heavy advertising to ensure high awareness of the brand and its benefits.
– The new packaging of the Vicro Plus sold in water bottles can be promoted.
– They could continue the promotions across schools and colleges.
– Trial offers to attract new customers
– They could also sponser some huge kid’s event or television series on T.V which would increase
their visibility. For eg: The Bournvita Quiz contest is a very popular T.V quiz show.

Advertising Channels:

If the brand Victor Plus needs to compete with other national brands it has to be advertised extensively
in local as well as national media. Some of the channels could be:

– Television Ads
– Radio Ads
– Billboards at various locations
– Print Ads in newspapers and children’s magazines

Here is a sample print ad to attract the target audience.

Q.9). What should be the trade promotion strategy?
 Victor Plus need to be targeted mainly at institutional buyers like restaurants,snack bars etc.
as their value proposition involves mainly taste and low price.
 This means that they may not have retailers in their channel and can cater to the segment
directly through distributors.The trade promotion strategy for Victor Plus would be to
provide sales turnover based incentives to the distributors as their current objective would
be to gain market share.They can provide quantity based discounts and monetary incentives
to these distributors.They can also provide reimbursements to a certain extent for salesforce
salaries and agree for refund of sales returns.They need not use the retail channel to reach to
the mass market as they are not targeting the household.
 Since the value offering is not suited for the consumer market where the main
decisionmakers are married women who generally buy for their children,Victor Plus may not
stand a good chance in the market.This is because they look at nutrition as a main sought
after benefit which is not offered by Victor Plus vis a vis the competing brands.
However,they can try to promote the brand among children by advertising in children’s
comics etc. and induce trials through promotions like giving away small toys,cartoon stickers
etc.This may help use pester power to influence the households and finally try the
product.Since the product is said to be tasty,it can be assumed that the children may
continue to demand the product.This implies they have to give sales promotion assistance to
the retailers in attracting the children to the store and try out the product.

Q.10)    What should be the pricing strategy of Victor plus?

 Victor Plus should aim at pricing the product well below the premium brands as their main
objective would be to gain market share in the institutional segment. Since price is a very
important factor in institutional sales, and since taste is one of the main benefits in their
offerings to end consumers, Victor Plus has a very good opportunity to obtain market
leadership in this segment.
 However, the health beverages are mostly consumed in high income households with young
children. Hence, low price may not be a very critical purchase criterion for brand choice. On
the contrary, low price may give the perception of poor product quality.
 So, we need to decide if we have to focus on high-income households or institution
segment. Accordingly, the pricing strategy should be devised.

Q.11).  Should the company launch a new product variant of Victor Plus for
institution segment? If yes, what should be the description of the product in
terms of ingredients, nutrients and utilities and how should it be positioned
as? If no, why?

 Identify those markets where the MNCs are not interested.

 Yes, the company should launch a new product variant of Victor Plus for the institutional
segment.
 Need for a new Product variant- For Victor Plus, many new nutritional improvements through
added ingredients have been proposed (such as vitamins, potassium bicarbonate etc.). For a
product variant meant for the institution segment, such nutritional aspects are not part of
purchase criteria. Hence a different product variant will be needed for the targeting the
institution segment.
 Need for different positioning- The institution segment would likely place highest importance on
price (rational decision makers in institutions would link it to tangible benefits to their
businesses), and on taste (as per the case facts, canteens, restaurants and juice parlours use
brown beverages as additives to milk/lassi for adding taste). Moreover, the positioning of Victor
Plus has been toward children and mothers (with its imageries on the labels and the
advertising), which is irrelevant with the institution segment.
 Price- The variant itself can be designed to save on costs of production as far as possible, by not
adding ingredients that are proposed for the improved Victor Plus. The price can be much more
favorable to the institution segment this way.
 The Product variant’s Name- The product can be named in such a way that the consumers come
to know of the primary utility of the drink. A name that also combines an element of the parent
company’s name (Victor India Ltd.) would serve to establish the credibility of the parent
company. The following name would be feasible for this purpose- VictorChocoShake. This name
on menu cards would communicate the utility (a chocolate drink) to the consumers and induce
them to order it, while also bringing the name Victor into the minds of the Class A and B town
consumers who frequent restaurants.
 Deals/promotions- Some discounts to the institution buyers for allowing use of the Victor name
on the menu cards will need to be allowed.
 Description- The description of the product should be as follows:
Ingredients- The ingredients can be mentioned with minimal importance on the label
covering the bottle. The institution segment will not attach much importance to this aspect of
the product.
Nutrients- Again, not much importance needs to be attached to this aspect. Some
information concerning the nutrients in the beverage can be communicated through the label
though.
Utilities- The utility that matters to the institution segment and consumers is chiefly
taste in this case. If the superlative taste utility of the new variant is communicated clearly, the
target segment will likely be in favour of buying the product.