Marketing Management Case - Chocolate Chip Cookies

Chocolate Chip Cookie: Defend Your Market Share IBA, Karachi
Chocolate Chip Cookies: Defend Your

Market Share
Authors: Emaduddin Khan, Hasan Jamil, Muhammad Ali Khawar, Muhammad
Mubashir Akhai, Mushhood Ahmed Khan & Sohaib Khalid Patel
On a warm early morning in September 2015, Shahmeer Ahmed was sitting at his desk sipping
coffee and going through his emails. He saw that the Head of Marketing had called for an
emergency review meeting that afternoon to discuss the hiccups in Chocolate Chip Cookies’
ongoing Marketing campaign. As Brand Manager (BM), he was the sole Brand Custodian and
Campaign Champion, and the top management was anticipating an action plan going forward
from him. Now reflecting on the events of the past couple of weeks, he started preparing his
presentation and wondered what could have been done differently?
In 2015 Bisconni (biscuit division) of Ismail Industries Limited (IIL) was contributing Rs 4.8
billion (32%) to the overall revenue stream. Chocolate Chip Cookies, one of the leading brands
of the division and a market leader in the Chocolate Chip category, faced a threat from their
largest competitor EBM who had just launched a product in the chocolate chip category by the
name of “CHOCOLICIOUS”.
Overview of the Biscuits Industry
Despite several challenges of power shortage, political instability, infrastructure and counterfeit
products, the biscuit industry had shown a positive upward trend in both revenue and volume
with approximately 7% - 9% YoY growth from 2012 onwards.
The sector is highly competitive with 10 local and 3 multinational companies vying for a bigger
piece of the pie in the ready-to-eat snack market. Amongst them, EBM lead the charge with 45%
market share (FY 14-15) followed by Continental Biscuits and IIL with 27% and 9.5% share
respectively. The major growth trend was attributed to the market leader EBM through its big
This case was prepared by students of MBA-Batch 2018 for Marketing Management course from Jami
Moiz. Copying or posting is an infringement of copyright.
brands Sooper, Gluco, and Peanut Pik. Meanwhile, Continental Biscuits contributed through
renowned brands like Tuc, Prince and Zeera Plus.
The Biscuit industry is divided into five subcategories namely Plain, Cream, Crackers,
Chocolate Chips and Wafers. The Plain and Cream biscuit subcategories combined contribute
83.6% of the industry’s total revenue. On the other hand, Chocolate Chip cookies held a 4.6%
value share in the Biscuit industry.
In recent times the trend of a healthier lifestyle had gained momentum, and people were
demanding more hygienic products with a higher nutritional value. For instance, EBM smartly
positioned itself addressing such demands through its website where it displayed numerous
certificates conforming to various hygienic standards and also shared nutritional information for
its products with the general population.
Intense competition from both local and international firms lead the Biscuit industry towards
continuous product innovation and improved quality products in all the categories. High
investments in market research continuously brought in new and innovative varieties which were
well received by the consumers across the country. Although the Urban consumer base (KLI etc)
contributed more in sales, biscuits were equally famous in the rural areas.1
Ismail Industries Limited (IIL)

The Ismail family had been associated with the biscuit industry since 1952. They made their first
biscuits in Sukkur under the brand name of JB Mangaram. In the early 1960s, Union Biscuits
was established and the first fully automated biscuit line was imported from Europe. Union
Biscuits became the biggest household name in the biscuit industry of Pakistan. Ismail Industries
Limited (IIL) began business in 1988 by launching its flagship brand Candyland, and went
public a year later. Over the years, IIL has progressed to become the largest confectionery
manufacturer and exporter in Pakistan. The group expanded horizontally by launching other
1
http://www.brecorder.com/business-and-economy/189:pakistan/1208906:biscuit-industry-registers-growth-
despite-challenges?date=2015-07-18
2
Ac Nielson Report 2015-2016 on Biscuit Industry
renowned brands such as Bisconni (biscuits and cookies) and SnackCity (chips, peanuts, etc.), as
well as vertically through Astro Films, which manufactures packaging and plastic films. The
group also has holdings in Bank of Khyber and Hudson Pharmaceuticals. Currently, IIL products
are sold locally as well as exported to more than 40 countries spread across the globe (See
Exhibit 2).
Candyland
Currently the largest confectionery producer in Pakistan, it began operations back in 1988. The
first official brand under Candyland was launched in 1990, and it has been the pioneer when it
comes to introducing jellies, lollipops and marshmallows. Candyland’s products are being
exported to over 30 countries. Keeping customers’ perceived value at the core of it's business,
Candyland employs a qualified workforce and sales team to maximize customer satisfaction
along with revenue and profits. The product range of Candyland includes Chilli Milli, ABC
Jelly, Funny Bunny, Puffs, Eclairs, Fanty, and chocolates such as Now, Paradise and Sonnet.
Bisconni
IIL entered the Biscuits market with Bisconni in 2002, introducing an innovative product
(Cocomo) that still retains top of the mind share among chocolate-filled biscuit lovers. The
philosophy behind Bisconni was to differentiate itself from the giant competition by introducing
unique and innovative products which would appeal to the masses and instantly gain traction.
Currently, Bisconni is the market leader in Pakistani biscuit industry in the cookies and wafers
category. It also pioneered the black sandwich biscuits in Pakistan by introducing Rite. Other
biscuit brands which come under Bisconni’s portfolio include Treat, Chocolate Chip cookies,
Chocolatto and Novita (See Exhibit 4).
SnackCity
SnackCity was launched in 2006, with the purpose of manufacturing the chips brand Kurleez.
Kurleez achieved great success in a very short span of time, and has grown to become the
premier product in the crinkle chips category in Pakistan. The company continues to expand its
portfolio by introducing new products such as Chillz, a slim-cut potato chip product, and
SnackCity’s Peanut and Nimko, all of which are showing promising signs of growth.
IIL’s Sales and Distribution Strategy
Ismail Industries Ltd has built a vast sales and distribution network through extensive planning
and strategic efforts over many years. More than 200 cities and towns are covered through direct
and indirect distribution. In addition to factory warehouses, the company has various satellite
warehouses located in Hyderabad, Multan, Lahore, Faisalabad and Rawalpindi. These satellite
warehouses provide Ismail Industries significant flexibility to react to short-term fluctuations in
demand due to seasonality, holidays, weather conditions and other variables. They continue to
strive in their goal of reaching even the smallest of towns throughout the country so that their
products are readily available and visible everywhere.
To monitor sales performance and understand the customer, IIL had invested in a comprehensive
Sales & Distribution software system that it used to record, measure and observe sales data on a
day-to-day basis. The team had access to variables such as Value and Volume Sales, Drop Size
and Numeric Distribution. This was further categorized into Brand, Stock Keeping Unit (SKU),
Channel, Point-of-Purchase (POP) and Geography wise sales, which allowed the marketing and
sales teams to pick variables, spot trends and opportunities, pluck weaknesses, build on
strengths, generate insights and strategize accordingly. Soon, they intend to shift to a three-
dimensional android based SnD application that will monitor all the Key Performance Indicators
(KPIs) and upload to a central database accessible to management on a real-time basis.
Chocolate Chip Cookies

Aligned with their brand philosophy, Bisconni launched Chocolate Chip Cookies (CCC) in 2013
and due to the early mover advantage, it instantly became the market leader. The target market of
CCC were children of age 5-13 who were avid chocolate lovers. CCC was positioned as
chocolate biscuits filled with a lot more chocolate chips and this was evident from their tagline
“BOHAT BOHAT BOHAT CHOCOLATY.” They infused this message in their campaigns
pushing it through multiple promotional channels including TV, print, outdoor activations and
Point-of-Sale Material (POSM). Their emotional connect with the consumers instantly showed
results and the launch campaign was very well received, driving sales up. They also supported
the campaign with nationwide sampling and let the consumers experience the extra flavor of
chocolate chips in the cookies.
Later on, they introduced a Strawberry flavored CCC and by 2015, commanded 86% of the
category market share, with the rest held by smaller players and imported cookies like Chips
Ahoy.
In 2015, EBM decided to step into chocolate chip segment threatening Bisconni’s first mover
advantage. This was a concern for the management as EBM was the market leader in the biscuit
industry and had the largest sales and distribution network.
Competitor Analysis: Chocolicious
EBM is a relatively old brand in Pakistan with operations dating as far back as 1966. The
company is constantly improving its sales and operations to boost sales. As market leader, it
plays an integral role in driving the growth of the biscuit industry.
EBM was able to beat the industry by seeing a sales growth rate of over 21% in FY’15, which
was reflected in both volume and value. EBM led the market with its trademark brand Sooper.
Some of the other top performing brands that the company holds in its portfolio are Gluco, Nan
Khatai, and Butter Puff. It had a very well experienced and professional workforce that was
geared towards winning. The company was known to constantly look for new and innovative
ways to stay ahead of the competition. An example of this is when the brand collaborated with
Hollywood in the marketing for its product Rio. The company, through that campaign, was able
to boost Rio’s market share from 45% to 47%.
Now for its new chocolate chip cookies brand "Chocolicious", EBM aimed a nationwide launch
in September targeting 75% outlet coverage in the first three months. The company had budgeted
a substantial amount towards making this launch a success and had planned various ATL and
BTL activities targeted towards the young generation across Pakistan in support of the launch
attempting to induce trial and gain customer’s top of the mind share from CCC. With its
experienced marketing team, strong distribution muscle, and a war chest second to none, EBM
was determined to make its mark and win the chocolate chip cookies category as well.
Bisconni's Counter-Launch Plan
In response to the approaching Chocolicious launch, Bisconni's marketing team had to come up
with a counter-launch strategy to impede EBM's entrance and reduce its launch impact. To
achieve this, they knew that their offer must be outlandish and bizarre enough to break through
the confectionery clutter, grab people's attention and get them talking about it instead of the new
competition all through the launch phase. After much deliberation, they proposed a big-budget
consumer promotion scheme gifting away the latest iPhone 6 with their cookies.
The consumers would find a 9-digit code inside Rs. 10/- and Rs. 15/- Chocolate Chip Cookies
packets and text that code to a four-digit number "8786" to enter into a lucky draw with a chance
to win an iPhone 6 every day. In total, 75 iPhones were on offer with 35 of them to be won in the
first month, 25 in the second and 15 in the final month of the campaign. The campaign was
spread over a period of 2.5 months.
Bisconni rented the “8786” number along with 9-digit codes from a mobile marketing agency
and printed these codes in every 20th packet inside the wrapper for the first month. The frequency
would reduce to every 40th and 60th packet in the second and third months of the campaign
period. All other packets had a “Try Again” message inside. The company expected a 20%
redemption rate i.e, only 20 out of 100 consumers would actually send in their codes. Given the
matters sensitivity, the codes were kept highly confidential and only Shahmeer and the Factory
Manager entering them into an automated printing machine were privy to them and the set
frequency.
To support this consumer scheme, a full-fledged 360 media campaign was planned with strong
communication through television, radio, print, OOH, digital and social media platforms along
with POS merchandising and displays. A special promotional banner was placed on the wrapper
and box for the scheme stock. The campaign was launched in August, a few days before
Chocolicious' entry into the market.
Challenges Faced
Soon after the launch, the campaign went into a mini crisis as issues arose one after another.
Shahmeer knew all marketing initiatives experience planning and execution hiccups but the team
had never seen this degree of trouble this early into the campaign ever before.
1. CCP Regulation Requiring Unconditional Gifts
The Competition Commission of Pakistan (CCP) had recently issued a new directive which the
team had not been aware of during the planning phase regarding soliciting text messages from
consumers. According to the new rule, since the consumer was incurring a cost sending in that
text message via SMS, the company was obliged to give them an unconditional gift to offset that
cost. They received a notice from CCP in the second week of campaign requiring urgent remedy.
The most feasible option for Shahmeer was to propose a mobile balance top up for every
message sender. However, the telcos had recently raised the minimum top up amount from Rs.
20 to Rs. 30. Bisconni now had to gift Rs.30/- to every consumer who messaged in their codes.
The company would have to deposit a prepaid balance of Rs.1 million with each of the 5 telcos
to transfer as messages were received on their 8786 number.
2. Smudged/Erased Codes Inside Packets
The 9-digit codes and “Try Again” messages were printed using food-grade ink on the glossy
silver inside of plastic-film wrappers. Over a couple of days in market, when this ink remained in
continuous contact with fatty acids from the cookies in warm storage conditions, it became
smudged and in some cases completely erased. This created huge uproar amongst consumers
who felt cheated and suspected foul play on part of the company. When they sent in an incorrect
code, they received the Rs. 30/- top up but because the code did not register in the system, they
did not receive a confirmation of their lucky draw entry. This created further aggression amongst
them and brewed up a PR fiasco. They bombarded the company and its social media agency with
grievances and demanded answers. The brand's equity took a significant hit in the face of this
controversy. The management immediately halted further production and recalled stock from its
distributors as Shahmeer and his team came up with an alternative solution.
One possible option was to print the codes on a sheet of paper which would be plastic coated and
insert them manually into the packets on the production line using part-time staff hired
specifically for this.
3. iPhone Delivery Requirements
When the time came to deliver iPhones to the winners, Shahmeer approached IIL's regular
courier service TCS. They refused to deliver iPhones citing custom regulations that discouraged
transit of high-worth electronic goods across Provincial lines. Other services like Leopards
Courier refused to take responsibility for any customs, theft, misplacement or damage issues
arising during transit.
Finally, Shahmeer got in touch with BlueEx, an upcoming courier service specializing in Cash-
on-Delivery (COD) deliveries, which was willing and able to securely deliver iPhones across
Pakistan to winners and receive official acknowledgements in return. As a specialized service
provider, however, their charges would be higher than those of regular couriers.
4. Customer Disbelieve
When Shahmeer called up the 7 lucky draw winners at the end of each week, his call was
received with suspicion and disbelief by the consumers, often resulting in them abruptly hanging
up to what they considered to be a prank or a hoax. Shahmeer had to go through as many as 25
candidates to find 7 winners who believed him and were willing to share their details for
processing.
The team put this down to kids sending in codes from their parents’ numbers without their
knowledge, so that when they received a call regarding an iPhone lucky draw they were unaware
of, they were understandably wary of it. However, on a recent market visit, Shahmeer received
feedback from retailers who said that consumers would have found smaller gifts in larger
quantities much more attractive. This made the team wonder if there was a much larger problem
in the campaign design. This rejection from winners could be an indicator that the audience at
large had not been able to successfully associate a Rs. 80,000/- iPhone 6 with a Rs. 10/- mass-
market local biscuit brand. If this was indeed true, the impact and return of investment (ROI) of
the entire campaign could be called into question.
Decision Point
With the cost expected to spiral out of control and the ultimate impact of the campaign
challenged, the marketing team now had three options to consider; pull the plug on the campaign
and call it off completely, continue with the campaign and resolve the current challenges
expecting smooth sailing going forward, or modify certain characteristics but keep the big idea
of consumer promotion intact. As Shahmeer entered the meeting room, he still believed in the
campaign and was certain of its potential to deliver on the set objectives, but he now faced the
daunting task of convincing the top management to believe in it as well.
Exhibit 1: Corporate Values of IIL Group
Exhibit 2: Timeline of IIL Group
Exhibit 3: Organogram of IIL Group
Exhibit 4: Product Categories of IIL Group

Exhibit 5a: Overview of the Bisconni Division
Exhibit 5b: Overview of the Bisconni Division
Exhibit 5c: Overview of the Bisconni Division
Exhibit 6: Top Manufacturer Performance
Exhibit 7: Value and Market Share of Chocolate Chip Cookies (SKU-wise)
SKU Share By Value & Volume (%)
100 93.9 95.5

90
80
70
60
50
40
30
20
10 4.6 3.9 1.6 0.7
0
TICKY (UPTO 50 GM) SNACK (51 to 120GM) FAMILY (ABOVE 120GM)
VALUE SHARE VOLUME SHARE
Exhibit 8: IIL – Chocolate Chip Cookies Market Share Value
ISMAIL INDUSTRY- Market Value Share (%)

85.8 88.1
81.3
76.9 75.8 76.0
72.0
0 0 0 0 0 0 0
JA 2014 SO 2014 ND 2014 JF 2015 MA 2015 MJ 2015 JA 2015
CHOCOLATE CHIP COOKIES CHOCOLICIOUS
Terms & Conditions – Chocolate Chip Cookies Consumer Promotion

Scheme 2015
TERMS AND CONDITIONS

This Chocolate Chip Cookies Consumer Promotion Scheme 2015 is brought to you by Ismail
Industries Limited, herein after referred to as the “Company”.
Kindly read the following terms & conditions “Terms and Conditions” before participating. By
participating, the participant guarantees that he/she has the authority to accept and
unconditionally do accept the terms and conditions.
WHO CAN PARTICIPATE?

This Consumer Promotion Scheme is open to all the residents of Pakistan, 18 years and above
except for anyone directly or in-directly employed with The Company or its associated agencies
is ineligible to participate.
THE LUCKY DRAW

In order to get the chance to win an I Phone 6, participants are required to purchase a packet of
Chocolate Chip Cookies Rs. 10 or Rs. 15 Packet in either Chocolate or Strawberry Flavor and find
a 9 digit Code inside the packet. SMS this code to 8786 to win an instant prize of atleast Rs. 20
Top up and the respective mobile user will automatically be registered for Lucky Draw of I
Phone 6.
Prizes are subject to the winner providing a proof that the mobile number from which the
winning entry was sent is registered in his/her name.
THE PRIZES
The Prizes includes:
1) I Phone 6 (16GB)
2) Rs. 30 Top Up or more for all telecom users
3) Gift Box Pack
VALID TILL
January 12th, 2016
GENERAL
 The Company reserves the right to cancel or amend the terms and conditions in its
absolute discretion and without prior notice.
 The Company shall not be liable to perform any of its obligations under the Lucky Draw
where it is unable to do so as a result of circumstances beyond its reasonable control and shall
not be liable to compensate the participant in such circumstances.
 In the event of any dispute regarding the terms and conditions or the conduct, results,
and all other matters relating to the Lucky Draw, the Company’s decision shall be final and
binding and no correspondence or discussion shall be entered into nor shall be challenged in
any court of law.
 Prize is subject to availability. The Prize may not be extended, transferred or exchanged
for cash and may not be taken during any major holiday season.
 By entering into this Lucky Draw, each participant agrees that he/she is participating at
its own risk and agrees that Ismail Industries, its respective business partners, advertising and
promotions agencies, and their respective officers, directors, and employees (the “Relevant
Organizers”) shall not be liable for injury, loss, claims or damage of any kind whatsoever arising
out of or in connection with participating in the Lucky Draw , the participants’ acts omissions or
negligence, and/or from the acceptance or use/misuse of the prize awarded. Each participant
agrees to waive and release the Relevant Organisers from the above-mentioned claims and
liabilities. This includes, without limitation, personal injury, death, and property damage, and
claims based on publicity rights, defamation, or invasion of privacy, to the extent not prohibited
by applicable written laws.
 To the maximum extent permitted by law, each participant and anyone entitled or
agreed to act on his/her behalf, agrees to indemnify each of the Relevant Organizers from any
losses, damages, costs, expenses, claims or liabilities of any kind whatsoever arising in
connection with the participation in the Lucky Draw , to the extent not prohibited by applicable
laws.
 By participating in the Lucky Draw , participants hereby opt-in, and agree and authorize,
the Relevant Organizers, to use at its discretion, without further compensation to the
participants, any of their names, addresses, personal details, photographs, videotapes or any
likeness of them for packaging, promotional, advertising, marketing and/or publicity purposes
(where not prohibited by written law), and to the use of statements or any creative content
made by or attributed to winners of the competition, and any rights in connection therewith.
 Company may at its sole discretion make winning prize substitutions or cancel the
competition without prior notice to any person. Any winning prize shall not be exchangeable,
transferable, and redeemable or substituted for cash or otherwise, in all cases, whether in
whole or part and Ismail Industries expressly disclaims any warranties express or implied in
connection with any prizes to the fullest extent permitted by applicable laws. It is a condition of
entry that the Winning team may be required to execute deed of acknowledgement, release
and indemnity in a form prescribed by the Company and any other document required by the
Company in its sole discretion.
 Company reserves the right to disqualify any participant or winner, in such manner as
Ismail Industries deems fit, without giving notice or reason, and without any liability to the
participant or winner.
 Ismail Industries reserves the right, without prior notice and at any time to terminate or
cancel the Lucky Draw, in whole or in part, or modify the competition in any way, without
liability to any person. If any part of the term and conditions is held to be unenforceable or
illegal, such illegal or unenforceable part shall be severed from the terms and conditions
without affecting the validity of the remaining terms and conditions.
 All trademarks, logos and color schemes used in this campaign are intellectual
properties of Ismail Industries and any unauthorized use, copy and infringements of the
company’s intellectual property shall entail civil as well as criminal liabilities.
 All entries and any copyrights subsisting in the entries become and remain the property
of the Company. Each participant consents to the Company using entrants names,
images/videos/voice uploaded or otherwise (including photograph, film and/or recording of the
same) in any media for an unlimited period of time without remuneration for the purpose of
promoting this promotion (including any outcome), and promoting any products manufactured,
distributed and/or supplied by the Company.
 Information provided by the participants or that is obtained by the Relevant Organizer
under the Lucky Draw may be used by the Relevant Organizers in order to review, develop and
improve the services they offer.
 The Company accepts no responsibility for any tax implication that may arise from
acceptance of the prize winnings.
 Cost of accessing the Internet/cellular network/ telephone/SMS charges is the entrant's
responsibility. No responsibility is accepted for late, lost or misdirected entries. Any entry that
does not comply with these Terms and Conditions will be invalid.
 This competition and the terms and conditions shall be governed by laws of Islamic
Republic of Pakistan.
 In the event of any dispute the decision of Ismail Industries shall be final and binding on
all participants.

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Chocolate Chip Cookie: Defend Your Market Share IBA, Karachi

Chocolate Chip Cookies: Defend Your

Overview of the Biscuits Industry

Ismail Industries Limited (IIL)

IIL’s Sales and Distribution Strategy

Chocolate Chip Cookies

Competitor Analysis: Chocolicious

Bisconni's Counter-Launch Plan

1. CCP Regulation Requiring Unconditional Gifts

2. Smudged/Erased Codes Inside Packets

3. iPhone Delivery Requirements

Exhibit 1: Corporate Values of IIL Group

Exhibit 2: Timeline of IIL Group

Exhibit 3: Organogram of IIL Group

Exhibit 4: Product Categories of IIL Group

Exhibit 5a: Overview of the Bisconni Division

Exhibit 5b: Overview of the Bisconni Division

Exhibit 5c: Overview of the Bisconni Division

Exhibit 6: Top Manufacturer Performance

Exhibit 7: Value and Market Share of Chocolate Chip Cookies (SKU-wise)

SKU Share By Value & Volume (%)

100 93.9 95.5

VALUE SHARE VOLUME SHARE

Exhibit 8: IIL – Chocolate Chip Cookies Market Share Value

ISMAIL INDUSTRY- Market Value Share (%)

JA 2014 SO 2014 ND 2014 JF 2015 MA 2015 MJ 2015 JA 2015

CHOCOLATE CHIP COOKIES CHOCOLICIOUS

Terms & Conditions – Chocolate Chip Cookies Consumer Promotion

TERMS AND CONDITIONS

WHO CAN PARTICIPATE?

THE LUCKY DRAW

3) Gift Box Pack

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