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BRANDING AND IT’S IMPACT ON COMMODITY PRODUCTS
Doing my Project has been a great learning experience for me, as it provided me with an opportunity to study and understand various issues and concepts related to the Branding and its Impact on Commodity Products . But this would not have been possible without the help, co-operation and guidance of the following people. I would like to express my sincere thanks to Prof. Narender Singh, for his continuous guidance and encouragement.
Brand and branding Branding and advertising Brand Equity Positioning Branding of Commodities Advantage Customer Benefits Challenge in Branding Commodities Packaging Case Catch Salt Captain Cook Salt Healthy World Atta Bailley Water Reason for Failure Of Branding Commodities Suggestions Bibliography
• Branding is the process by which a marketer tries to build long term relationship with the customers by learning their needs and wants so that the offering ( brand ) could satisfy their mutual aspirations. Products are what companies make. Farmers used to put some identification mark on the body of the livestock to distinguish their possession. It is common knowledge that the . Therefore marketers resorted to branding in order to distinguish their offerings from similar products and services provided by their competitors. Additionally. • Branding can be viewed as a tool to position a product or a service with a consistent image of quality and value for money to ensure the development of a recurring preference by the customer.BRANDING BRAND The word “ Brand ” owes its origin to the Norwegian word “ brandr ” which means to burn. term. but customers buy brands. symbol or design or a combination of one seller or a group of sellers and to differentiate them from those of competitors. sign. a strategy and an orientation. it carries an inherent assurance to the customers that the quality of a purchase will be similar to earlier purchases of the same brand. A brand is a name. BRANDING Branding is a process. a tool.
That is. in allsuch situations marketers use branding as a differentiation strategy and try to develop an intimacy with customer groups. fertilizers. Further. salt. Such differentiation is an on-going process and the initial and on-going actions are depicted. stability of assured future market and effective utilization of assets. Although there may be equally satisfying products. cement. potato chips etc.). service and even durables) or in products which are perceived as a commodity (e. • Branding can be used as a differentiation strategy when the product cannot be easily distinguished in terms of tangible features (which invariably happens in case of many CNDs. the consumer when satisfied with some brand does not want to spend additional effort to evaluate the other alternative choices. he or she tends to stay with it. ensures quality. they try to develop and deliver customized products and auxiliary services with tailor-made communications to match with the customer’s self-image. which prompts the consumer to switch the brand. Therefore. which a retailer wants to . a strong brand. Once he or she has liked a particular brand.consumer’s choice is influenced by many surrogates of which the most simple one is a brand name. a strong brand. apart from name.g. The brand owner tries to retain customers to its fold over their competitors by a mix of hardware 7 software because when a customer feels satisfied he / she develops a kind of loyalty for the same. • Brand building is a conscious customer satisfaction orientation process. symbol or design. unless there is a steep rise in the price or a discernible better quality product comes to his/her knowledge.
.stock because of customer pull also provides the owner of the brand with a platform for the sale of additional products.
a resonance or mutual interaction and reinforcement of behavior and attitudes.Branding and Advertising A brand is a product that provides functional benefits plus added values that some consumers value enough to buy. There is an unspoken assumption: PRODUCT + ADVERTISING = BRAND In other words advertising idea is the brand property. The brief was to link Surf Excel with cricket and at the same time bring out the brand’s functions and benefits . Only advertising reaches a vast number of consumers that too economically. In brand building. advertising works through the reinforcement hypothesis to build up. this position is maintained largely by two factors: the brand’s functional performance in comparison with competitors and the added values that have been built in the main by the advertising. 1. Brands do differ from each other but distinctiveness over and beyond this is highly desirable. Branding and advertising are almost synonymous. for buyers of the brand.BRAND BUILDING BY TAKING ADVANTAGE OF WORLD FAMOUS EVENTS LIKE WORLD CUP (CRICKET) Surf Excel’s advertising during the world cup was talked about. Once the brand is off the ground after building its position against other brands.
2. It wanted an advertising strategy.removal of stains”. So the new ad with the airplane. even though the idea was not typically Lever. says an HLL spokesperson. This arrogance stems from the fact that their TV is the best.” This ad.’ The ads were basically . youthful premium brand image with an aim of cheeky arrogance. Campaign is an example of how a company can build its brand image by keeping a close watch on events taking place all around the world. “The advertising highlighted the core benefit of the brand -. the consumers still associates Kelvinator with ‘the coolest one.BRAND BUILDING THROUGH SHIFT IN AD STRATEGY Onida’s brand image was being threatened by umpteen brands. as they believed that the core of the brand is more important than symbols like the devil. This time they changed their familiar and successful devil. REINFORCING THE BRAND IMAGE Kelvinator has reinforced its ‘the coolest one’ image with a series of ads. in one of its advertisements a man sings attuned but gains appreciation when he feels cold and sings in his shivering voice once the refrigerator is opened. Despite Kelvinator’s ownership being shifted from Whirlpool to Electrolux. “That is why the client bought the idea immediately.like stain removing. For example. This is case of changing the brand image through advertising. which could communicate its contemporary.
drawing attention to something that pushed their one benefit further towards the consumer. The advertising aimed at both the head and the heart. The ads said “from today. The idea came from rustic reasoning and the ads are being aired on star sports and Sony. This was there in other CTV’s also. all other refrigerator become history. nothing terribly 007-ish in it. WASHING MACHINE . This case endorses the fact that advertising can play a vital role in fixing the brand ‘s image in people’s minds. so LG used preemptive advertising strategy to build its brand image. was positioned as nutrition preserver. Building brand image keeping the competitors in mind LG Electronics Fridge Sub branded PN System (preserve nutrition). CTV It was positioned as the right set for wrinkle free vision.meant to bring Kelvinator back to top of mind consciousness. The CTV’s eye adjusts itself to lighting conditions.
7% compared to Videocon’s 13. as is talked about. With ads like Whirlpool Quick Chill and Whirlpool Washing Machine it is placing its durables as the ultimate machine to be had in a household. Attributes like faster ice formation.For this. Their washing machine was called the ‘chaos punch +3’ and the feature highlighted was that the punch detangles clothes before washing them. One can use a theme to project its image and it is fairly understood that no one will copy it. And that is one of the chief reasons why it is still at the top. is the only brand that has not compromised on quality so far. The ‘Believe in the best’ campaign was able to establish BPL as an Indian brand with international quality products. feature positioning was used.8% and Onida’s 11%. money and effort on brand building. BRANDING AGAINST COMPETITORS WHIRLPOOL The company is currently building vehemently on its brand. It can be used again and again in different contexts but reinforcing the same idea to ingrain the brand in the minds of the consumer. A collection of such advertisements on products from the same company are proof that LG is presenting itself as a quality brand which can provide customers with top class products for their home. Its April 99 market share was 19. agitator wash are . It has invested a lot of time. ADVERTISING USING A UNIQUE THEME BPL.
highlighted specifically in ads placing the brand in a high pedestal and giving it a highly polished image. .
the trick clicked as the angry lady was calmed when she used the detergent which brought award to her husband.BRANDING AN INDUSTRIAL HI-TECH PRODUCT INTEL (the third line) It is the world’s tenth most valuable brand. It is targeting the main stream market. The communication is based on positioning of ‘tomchi’ as a sauce. It also links it to the excitement of surfing the Internet. not too sweet. MAGGI Maggi tomato ketchup is illustrated as. It has made the brand memorable. The shear technical wizardry of the ad spots gelds the aura of a very high tech product and in this case well becomes the message itself. The tag line of Tomchi is ‘not too hot. It has positioned the brand as the Internet dream machine. . A successful campaign fixing the brand as a household middle class product with the customer can identify. which has a perfect balance of tomatoes for sweetness and spice of chilies. virtual town.’ Appears to be direct hit at Maggi’s ‘its different’ hot and sweet sauce. don’t be silly’ or ‘Boss has gone for a toss’. EMOTIONS IN BRAND BUILDING Wheel detergent powder was advertised using the emotion anger. Its global advertising sees the blue door opening. Although it sounds negative. was path breaking. along with office use. with a special accent on home pc market.the viewer is sucked down a flash whirl. ‘Sauce ka big boss’. The Maggi sauce campaign with its famous Ajit jokes-‘Lily. tastes just right.
Maggi has remained and will remain etched in the customer’s mind as a dependable and quality brand. But whatever be the product. . which explains the expansion advertising strategy Maggi is continuously following upon.There is a new ad now.
4% in 1997. The . In the common parlance it denotes trust and confidence.BUILDING BRAND THROUGH CORPORATE ADVERTISING ICICI ICICI has been building its identity over the last couple of months and the impact is that now a common man knows what ICICI stands for. The brand plank was: diamonds are more modern and aspiring as compared to gold. campaign has again undergone a change. This is a financial brand in the offing. This trust has been built at a lower cost. Now they are focussing on “hassle free banking”. Communications had two options: the woman as a self-purchaser buying with and without her husband’s approval or the husband surprising the wife. The communication device used is very interesting as it educates the common man about his own money.) DeBeers The Debeers advertising has rocketed this non-traditional brand from 1995 and its market has grown stupendously by 19. seamlessly. The Debeers Consolidated Mines manages consumer demand using advertising. The ratio advertising to incremental sales was 1. (Currently their ad.2:100. publicity and trade. The new identity has given ICICI extra mileage in everything and the advertisements have built trust in the group name thus helping leverage each product through crosssynergies.
In 1997 only.second was preferred and thus the product was positioned as a highly emotionally charged surrogate for status. major change was in media when recall leapt up. complex message into a medium having greatest reach and impact. The new wedding strategy was used and the new international ‘shadows’ execution looked stylish and elegant. diamonds had a upper hand on god only in terms of beauty and status. In TV there were two spots – ‘Architect’ and ‘Hotel spot’. These efforts changed the attitudes of viewers against diamonds. Infomercials were run which addressed price. In 1997. diamonds were seen as more personal gift. Print advertising focussed on creating identification with women portrayed and directly compared costs with that fo familiar objects. the channel thus enabled them to get a long. confidence and knowledge issues. Diamond-testing information below the ad addressed the ‘knowledge issue’. Nevertheless. .
Fair and Lovely’s introduction did not dent Vicco’s sales while Sangeeta Bijlani endorsed the brand. Other than packaging. With continuous harping on the natural benefits of turmeric cream. 10-16 Feb.No wonder DeBeers is now a name in itself. it decided to use a fresh strategy. it positioned the product in the minds of the Indian women category. Using the traditional ‘haldi’ ceremony. The core theme rekindled memories of tradition and happiness but also insisted upon daily application of the cream. . It also came up with a vanishing cream formulation and after extensive advertising in over a thousand movie halls and the television. communication of the brand was an important aspect used. Vicco went ahead unfaltered by fairness creams and came to be known as a nationally recognized turmeric cream. Ref. 1999 ADVERTISING THE HARD WAY Vicco It took Vicco 27 years to carve out a niche for itself. the brand began to gain acceptance.: Brand Equity (ET). After five unsuccessful years of trying to sell Vicco Turmeric.
. Brand awareness relates to the number of persons who recognized the brand brand significance and who are conscious of the promise which the symbol express the aim of advertising is to reveal the meaning of the brand and to spread it as far and as wide as possible to encourage people to try the product offered. and the degree of personal involvement.BRAND EQUITY The equity of a brand is measured by the awareness and image which it evokes. since the brand is the symbol.This is a natural measurement. The decision as to which of these different levels of awareness should be pursued depends on the way in which customers are expected to make their choice.
” Crawford.” Berkowitz. Richard R Still.Various have given different definition of Positioning.POSITIONING DEFINITION:. quality & advantages & disadvantages in relation to competing brands. This differentiating is called positioning the product & is now widespread use. Norman A P Govoni . use. Lewis & Ronald Gatty “ The differentiation of brands by studying the ways in which their consumer differ as well as how consumer perceptions of various brands differ is termed ‘product positioning’. Rudelius “Product positioning refers to the place an offering occupies in the consumer’s mind on important attributes relative to competitive offerings.” Alpert. Merle C “ Once a target market has been selected. Kerlin. Boonee “Product positioning refers to the consumer’s perception of a product’s attribute. Kurtz. the new product marketers must differentiate their item from products already offered to that target group. Edward W. Soma are:- Beckman.” Cundiff.
” Hehman. The marketer can guide the consumer by furnishing clues to help position the product in relationship to others…” Day.“Positioning is significant to consumers in that it provides a basis for comparing alternatives choices in the marketplace.” . Kenneth G “Positioning is defining the package of benefits relative to competition that will be offered to particular target segments. George S “Product positioning refers to the customer’s perceptions of the place a product or brand occupies in a given market.” Ennis.” Hardy. the consumerr’s perception of your product is what your product really is. F Beaven The theory of positioning is… “The identification of an exclusive niche in the market or the creation of a unique perception of the product that satisfies an unfulfilled consumer need & that serves to distinguish the product from competing alternatives. Raymond D “Positioning is your product as the consumer thinks of it since the consumer is the ultimate user of the product.
Kotler. Philip Market positioning is “arranging for a product to occupy a clear. Positioning needs to be specific to your brand aimed at a specific target audience.” Mittelstadt. David J “ Positioning is the activity of trying to get customers to perceive a company’s product differently from the way they perceivewhat competitors are offering.” Reibstein. Charles a “ Positioning refers to how you want your brand ‘thought about’ in connection with competitors in its product category. The customer’s viewpoint is the crucial aspect of product positioning . distinctive & desirable place in market & in the minds of target consumers.” .
The concept of positioning is also important in various other aspects of the marketing strategy. through his diverse & coordinated actions. method of distribution. pricing.USEFULNESS OF POSITIONING As competition intensifies & brands proliferate. tries to influence this process. the other marketing decisions like product design. become clearer. Once one is clear about the position one wants. Positioning is a conscious attempt on the part of the marketer to accentuatethis natural tendency & in the process. consumers tend to differentiate between brands in their own way. . packaging.. The marketer. The basis on which this differentiation is achieved reflects consumer preferences or attitudes. impart a distinct identity to his own brand to make it stand out among the competitors. etc.
ELEMENTS OF POSITIONING Evidence has shown that there are four distinct variables that affect the position of a given product. one needs requires judging the dimensions. is overshadowed by it’s popular . Even where a company like Gujrat Cooperative Milk Marketing Federation Ltd. These are:a) The product itself. There may be little point in lavishing sophisticated technology on certain packaging material if the customer consigns it to the dustbin as soon as he has unwrapped the product. packaging may be used to lend an aura of desirability to a product but its cost must finally be justified by its intensity of meaning to the customer. b) The company behind it.How important the product is or what meaning it has for the consumer & how he relates to it. The fact that a product involves better ingredients or processes is a matter of indifference unless this knowledge offers distinct advantages to the consumer. 2. 1. For instance. The company’s image also matters to the various channels of distribution involving traders & distributors especially retailers.A product comes from a company & every company has its own history. c) The competition.. the stronger the company profile the better the image of its products. The Company:. d) The consumers. In other words. consumers may perceive a better the image of a product if it comes from a reputed house like Tatas. which are important to the customer. Generally. The Product :. Conversely.
secondly. While segmentation serves this purpose by dividing the market into smaller groups. positioning goes a step further to establish a distinct niche in consumer’s mind.brand name Amul. The Consumer:.Product positioning is invariably done in relation to various competitive offerings. selecting a slot distinctly different from the competitors can avoid a direct confrontation with them. If.g. 4. toothpastes with Colgate & so on. In most cases. The Competition :. on the contrary. Here. first the company’s own image lends weight to the product’s positioning . the consumer’s self-perception comes into play along with his cognitive & connotative factors. it becomes necessary to examine how the consumer views a product. 3. Thus. he sees himself as traditional & possessing a taste for performance. where it does not. Hence. the consumers have a tendency to judge a product in comparision to the dominant brand. It is therefore imperative to assess the various competitors.. then he is more likely to view . Leading brand enjoys some edge over others. new product launches like Dhara (a non-Amul brand) has been well received by trade channels .It should be reiterated that positioning is essentially based on consumer perception rather than factual evaluation. Here. it becomes necessary to examine how the consumer views a product. In other words. all photocopiers are compared with Modi Xerox. he will expect a more progressive product. as in the case of Dhara. e. the company’s name still plays a vital role in successfully launching the product & eventually creates the product position in the market. all PCs with HCL. If he sees himself as modern & progressive.
& his preferences. his lifestyle.changes as new fangled. Thus. . it is important to know what kind of person the archetypal consumer is.
Vegetables followed this. the branded rice market is at Rs 1100 crore which constituted just about 10 percent share of rice market. be it fertilizer. filters-bear separate brand names from the automakers. Marketers are flocking to the commodity market because of huge size they offer. sugar etc. Today. and automobile components. Generally speaking. This craze for branded commodities is also a result of the changed lifestyle of people. Tata salt has used corporate name. Brooke Bond has branded frozen vegetables with its green valley brand. It all started in early Nineties when foodgrains and spices were offered in branded form. For instance. marketers have added value to commodities through branding. This goes to show the immense opportunity. DCW Home product had modest success . specially working couples who have high disposable incomes and for whom quality and convenience now take priority. more marketers have jumped into the bandwagon. Hindustan lever has achieved a thundering success when they differentiated its DAP fertilizer under the brand name of “paras”. oranges are stamped with the growers level. tyres. Today we notice the reverse trend. flour. Similarly. common nuts and bolts are packaged in cellophane with the distributor’s symbol.spark plug. salt.Branding of Commodities:- In the past in India most commodities were sold in unbranded form. salt. rice or sugar. spices. Say. tea is sold in special pack design or names.
. maida. NEPC has offerd atta. Sooji and spices. Siel is into sugar.when it first launched Captain Cook salt and followed it up with Captain Cook Atta.
Loyalty created over time offers the unique advantage of having assured customer base against competition & greater control in their marketing programme. By highlighting the same name. Instead. • Branding gives the marketer the opportunity to attract loyal & profitable segment of customers. they could project their quality & image of the company. which would otherwise be copied by competitors. • It is wrong to assume that any commodity market is a homogeneous mass.Advantage • The brand name makes it easier for the marketer to process orders & track down problems associated with the brand. but most important. • Last. . • The marketer’s brand name & trademark provide legal protection (patent or copyrights) of the unique features. Different brands can be aimed at different segments of customers. Branding helps marketer to form suitable segmentation of the market. the task lies in skillfully identifying the different segments & understanding their specific needs. • In the long run it helps to build a strong association with the consumers as well as the trade. to derive the first mover’s advantage & tap the huge market potential.
Customer will get the quality product from the wide variety of similar products.The branded commodity products saves time of a customer because the customer does not have to waste time in removing unwanted material from the commodity products.Branding of commodity products not only benefits the organization but it also helps the customer.CUSTOMER’S BENEFIT :. For example unbranded masala etc. Customer easily identifies the branded commodity. a) The risk of getting adulterated product is minimized.The price of branded commodity product is fixed so a shopkeeper cannot change it & customer cannot be cheated. 2) Quantity:. 4) Value For Money:.In branded commodity products the customer is getting the right quantity of product. 3) Price:. For branded commodity products the shopkeeper has to charge the same price from a child or a adult customer. For example the local grocery shop can give the old Atta to the customer telling as fresh Atta but for branded customer can read the manufacturing as well as expiry date. b) The manufacturing date is printed on the packet of branded commodity which helps him to know how old the product is. may be adulterated which not only affects the taste of the food but also affects the health of the person. The grocery shop cannot give him less amount. 1) Quality :. Customer knows the special attributes or benefits .
the company’s image would suffer & it may even affect market for other products of the company. by and large. To quote. pricing. afterwards to create a preference for a specific option calls for a more sustained efforts on the part of any marketer. consumers. to make them insensitive to price itself is very difficult task. legal protection. Unlike in consumer goods market where the marketer can play around with consumer perception. labeling. the challenges are slowly taking place in cities and big towns where consumers are able to appreciate the benefits of buying a branded commodity Branding commodity is a marketing exercise at a very fundamental level. And everything from positioning.Challenges in Branding Commodities The commodity market is generally driven by price. And. branding is about going to the basics or exploring at the grass-root level.& a risk that if the brand should prove unsatisfactory to the user. Of course. apart from additional cost incurred in packaging. Under such conditions. Thus the challenges involved are formidable. . brand differentiation etc. advertising. in a commodity. establishing new selling propositions in the market which so far has been driven largely by price. show no involvement in selection of a commodity. “ it involves overturning the rules of the market. Still any marketer prefers to brand it because of many unique advantages. brand value & packaging takes on a new sensitivity”. David Aaker. Brand building involves cost. Besides.
Product. Inertia Industries Limited (IIL) launched their premium of Sand Piper beer in 1993. but the response was less than encouraging as the customer could not associate the ubiquitous brown bottle with a premium beer & hence the price charged struck a discordant note with the customer. Place & Promotion. In 1994. to rectify the defect. The effect was statling. the company went for a relaunch & the packaging was changed to green bottle with a golden champagne foil top. Many marketers have called packaging a 5 th P along with Price. It sold out 37. Packaging is treated as an element of the product strategy.000 cases as compared to a mere 3000 cases a year before. IIL now repositioned Sand Pipers as the “champagne of beers”. .PACKAGING AS A DIFFERENTIATING STRATEGTY The package provides the buyer’s first encounter with the product & is capable of turning him “on” or “off”. This could be a useful tool for justifying the premium charged. Well-designed packages can create an image of convenience or quality for the consumer and promotional value for the producer.
crispness & retention of flavour. Uncle Chipps’ was the first to use packets made of air impermeable metal foil which was brightly coloured for visual differentiation. their quality plastic packages. at a time when potato chips were available only in colourless. For example Uncle Chipps’ potato chips based on its delivery of freshness. Moreover.IMPORTANCE OF PACKAGING IN COMMODITY PRODUCTS Packaging plays a very important role in commodity products. transparent. . This is possible by use of packaging technology wherein the product is packed in air-tight metal foil packets filled with nitrogen atmosphere to prevent air from leaking in & spoiling the product.
Today his . the then proprietor of DS group. and how many people would be willing to pay for it. and no one had done it before. To take a product as basic as salt (it’s the obvious example of a ‘necessity’) and deliver it in a more user friendly form. At lest for the busy housewife. That’s the thing about great ideas. putting a portion into a shaker – and then having it turn soggy in a monsoons –was simply too much of an inconvenience. Pepper? It had to be crushed manually (auto-crush shakers were available.The salt came first. The year: 1987. THE HUNCH :. better known for its Baba. The 60-yaer old DS Group. who went ahead and did it. The Delhi-based Dharam Pal Satya Pal (DS) group. has already achieved the distinction of having made it to the up market Indian table. had an enterprising brain in Satya Pal.Catch Salt Catch. as a brand. launched a subsidiary called Hi Tech Foods Ltd. Getting cooking salt out of a 1-kg bag. Satya Pal. it looks obvious. Tulsi and Rajnigandha brands of paan masala (and the recent Pass Pass). In hindsight. but didn’t. The question was simply one of how cheaply the idea could be launched. several years into ‘consumer boom’. with a Rs 75-crore turnover. had this vague hunch that branded free-flowing talesalt was exactly what many Indian homes wished they had access to. But the point is it was late 1980’s. the better the idea began to crystallize. which is often the biggest hurdle for most enterprises. but they worked rather poorly). The more he thought about it.
Free Flowing Success wasn’t a simple matter of executing a terrific idea. Hi-tech built itself a national distribution network that covered some 1. was the brand’s pricing. This was a big risk. premium Indian households in SEC A and SEC B cities. and plenty of bold thinking and risk-taking. DS Group.” And . as all business ventures do.600 premium outlet would be a decent start. Catch was launched at a price of Rs 6 for 200-gm pack. as the brand was a high-priced commodity packaged for convenience. be it taxes. The idea may have been the result of gut feel. DS group. The 1983-launched market leader. chairman.two sons. managing director. and anything extra. Hi tech carried out a random survey of the urban Indian market. A bigger one than the price ratio would suggest at first glance. and local merchant were selling loose salt at less than that. For a product that has stirred price passions in past. The important gambit. but everything else followed a statistical ally valid process. however. and decided to aim Catch at two well-defined segments. One. because low priced salt is seen by most in India as something of a fundamental right. was selling at only Re 1 per pack for one whole kg. It took hard work. So Rs 6 was quite a price. vice-president. “ We did not have any competitors. According to Ashok Aggarwal. are busy building on success. inbuilt costs or margins. which would use the products in large volumes. and Rajiv Kumar. risks being viewed by the ‘aam janta’ as extortion. Tata iodized salt. this was an audacious premium over regular salt. And to Hotels and restaurants. Ravinder Kumar.
it quickly became status symbol. DS was getting it processed at its Noida refinery plant. Catch’s packaging keeps it freeflowing throughout. the urbane Indian housewife made a rational choice. for packaging. A high sodium chloride content (99% plus) content differentiates free flowing salt from common salt. and made a free. since it was so wellpackaged.flowing proposition for 1-kg packs. then purifying it by removing the water absorbing organic materials to make it free flowing. With in months of launch. near Delhi. but it’s harping on iodine and goiter-prevention. and found that free flowing benefit and added convenience value outweighed the price. And the rest of the family was also impressed (a key factor). a separate benefit altogether. . The salt used in catch was seawater salt (sub–soil water salt is another source). Sourced from the Gujarat coast. This is also the track adopted by Captain Cook salt. And. precipitating and crystallizing the salt. Price analysts would have been shocked. DS has invested Rs 50 lakh in it original plant. Never before had the Indian market accepted a product at thirty times the per-gram price. And so were guests. Another Rs 2 crore was put in subsequently (for state-of-the-art iodization and crystallization machinery). “Our process” says Aggarwal. it was clear that Catch was on it way into the marketing history books. It wasn’t packaging insists the company.” This is why look-alikes didn’t click. which came later (in 1991). into a pure white crystalline form of sodium-chloride ( no magnesium chloride and other hygroscopic salts) that could resist moisture and thus continue to flow freely. Now Hindustan lever’s kissan has entered the salt business.luckily for it. “ includes filtering the impurities out.
That was followed by a host of spices and salt flavours. Binnie’s and PepsiCo’s Hostess. the finer leftovers were bought by potato chip manufacturers and used in such brands such as Uncle Chipps’. Of course. the culture specific products were not successful as the common use ones. So it launched ground black pepper in 100-gm packs. the company thought it was time to broaden the product range under Catch. the culture-defying products. garlic salt. So too. which are often not worth it on a . By now. In 1991. than the specific-appeal ones. in similar packs. but they did reasonably well in several parts of the country. In 1989. The pepper and spices were sourced from Kerela. chat masala and garam masala. while the masalas were DS’s own recipes. This made the business more exciting. Britannia started buying fine salt from DS in 1997. the product had penetrated more than just the surface of India’s uppercrust households. Here the packaging takes the backseat to the actual product. First. DIVESIFYING With in four years of Catch’s launch. While the larger crystals went into the consumer pack. a 100-gm pack for Catch salt.The finished salt crystals coming out of the plant were of various sizes. it launched black salt. It was the obvious move to make. Cooking masala marketing often takes region wise strategies. Hi Tech touched Rs 1 crore in turnover. and other products could piggy-ride the brand into the home.
catering to over . sambhar powder and curry powder to its portfolio.00 17. failed in 1989.75 26. Today.75 12. What went wrong? “Rice prices kept fluctuating. But primary sector products’ prices are volatile. DS had to retrace its steps. It’s challenge.00 58.00 Catch the trend 1995 1996 5.70 12.40 14.30 46.00 21.00 23. Catch salt continues to be the penetration-driver.00 28. In 1998. one must promise the customer a consistent price. The company now has 230 distributors.00 26.75 26. such as pepper. for example.50 12.00 12.70 Market retail prices in Indian Rupees Catch salt ‘s contribution to turnover has decreased considerably since its launch in fiscal 1998-99. Catch added Lahori salt. Catch basmati rice.75 32.00 31.50 30. Lever is rumoured to be contemplating foray.00 18. The costlier commodities.base of tiny volumes.60 1998 7. Everest and other s have strong holds in their respective regions. The most recent launch was in 1998.50 6.50 29. garlic salt and chat masala were also put out in 50gm packs.00 26. PRICES OF BRANDED COMMODITY 100-gm packs Table salt Black pepper Red chilli powder Turmeric powder Ginger powder 1994 5. though observers feel that brand has hit a plateau. when Catch launched white pepper at Rs 93 per 100 gm pack.” says Aggarwal.50 17. Now.00 42. Not all the products are still selling.00 20.90 1999 8. As a brand. it was less than 50%.50 20. Besides.50 1997 6. MDH. compared to 72% in 1996-97.
However DS continues to advertise its paan masalas. . as Aggarwal recalls.20. Advertising? Catch ran a campaign “ a long time back”.000 retail outlets across India. Since then nothing much has happened.
tackling the trade was not easy. The . Captain Cook salt was priced at Rs 3 for a 1 kg pack. and Tata Salt was then perceived as best. & thrice the average commodity price. Captain Cook decided to take a shot at the leader from that position. Even after offering a commission above Tata Salt. Pricing and Distribution The company’s biggest gamble was pricing. it was found that the consumer associated salt’s purity with whiteness. However. The product was put in an elegant package. Target Market Market research revealed that salt was of low importance on the consumer’s grocery list. the company has to convince them of their service standards –replacement of spoiled packs & so on. Further.Captain Cook Salt Product In May 1991 DCW HPL launched a salt in the name of “ Captain Cook ” and aimed it at top end of the market. by calling itself the ‘ purest and whitest ’ salt in the market. Advertising The company launched a high decibel ad campaign to arouse consumer interest in a conceived dull product. Retailers were reluctant to stock the new brand as they were apprehensive about the price. The product expanded its distribution reach gradually to cover outlets in most parts except Kerela & Ares of North-eastern states. The campaign began with teasers warning husbands that their wives were about to fall in love with a mystical man from the high seas. 50% higher than Tata Salt.
Since the relaunch the prices have been raised to Rs 5 a kg.( Tata Salt: Rs 4. Competitive reaction & search for new USP. The company claims that the brand had sales of Rs 3. Captain Cook claims to have reached a sales figure of about 90. highlighted the salt’s free-flow property. Consequently. The idea was to develop a fresh selling proposition based on what the consumer really desired of high-value salt. It would mean that she would opt for free-flowing salt. form lumps or stick to her hands.3 crore. The 60-second film showed a housewife gracefully pouring salt from a Captain Cook’s packet into a jar.‘Holy Hygiene’ launch commercial showed a ship’s captain steering his hungry crew to an island where some food was being cooked. while sticking to its spirit of fun. Repositioning Captain Cook.4 crore at 15. housewives were looking for a product which would not absorb water. To defend its position. In 1992-93. Alongside is a packet of ‘ordinary ‘ salt ( with a pack design which looks remarkably similar to Tata Salt) refusing to flow out smoothly. there was a series of fun oriented commercials. According to the study. & adding salt to the feast before letting his sailors eat. Captain Cook’s sales began to stagnate & DCW HPL then decided to go in for another round of consumer research in July 1993. The product was reformulated with additives to keep the salt drier.970 tonnes in its very first year. After that. each a take-off on popular themes.50 a kg). which was 50% more than previous year’s sales. Its new campaign. volumes tripled to 48.410 tonnes valued at Rs 10. Tata Chemical launched a campaign highlighting its modern manufacturing process & also made retail commissions at par with Captain Cook.000 tonnes (valued at Rs 25 crore) in 1994-95. .
Hindustan Lever Ltd (Annapurna). with a category advertising spend of about Rs 20-25 crore. According to Sachid Madan. Hindustan Lever Ltd (Annapurna) and many regional players in this market. has launched wheat flour (atta ) under the brand name Healthy World. Players like Pilsbury.” Priced at Rs 18. According to Partha Datta. While creamish to white colour . There are both national player like Pilsbury. it is act three now. “ We took an Indian perspective out of the Conagra portfolio. Healthy World marks our entry into mass market products.Branded Atta Case HEALTHY WORLD The branded atta market is estimated to be Rs 350 crore. Conagra has just over 51percent stake in the venture. Parameters such as softness. After Act II. Healthy World comes in packs ranging from 500gm to 5kg. Act II Pop corn being the first.5 for one kg pack. ITC Agro Tech claims it spent nearly one year on Research & Development before launching Healthy World. The US-based food products firm. with relevance to the local palate. This is ITC Agro Tech’s second offering (after Congra hiked its stake). or about 3 lakh tonnes per year. vice-president. While Act II was an outcome of our foray into speciality products. taste. colour & texture preferences are said to have been looked into detail before finalizing the variant. The marketer of sundrop. marketing manager preferences in North & South of India differ distinctly across almost all parameters of atta. There are several regional brands too. benchmarking it against national players in the branded atta category.
while it is just 3 kg in the South. Meanwhile. but the North leads in consumption. Karnataka. Green peas.&finer size is preferred in South. where average monthly household consumption is 27 kg. The baseline: ‘More health. Healthy World is currently available in Andhra Pradesh. What will also help ITC Agro is the fact that it has established itself as a health conscious manufacture with sundrop. ITC Agro took over the atta manufacturing portion of a partner in Chennai to steamline it in line with its parent company’s manufacturing process. for instance. . Consumers in the South are more receptive (which is why the product was launched here) to branded atta. More energy’. & Tamil Nadu. By December 2001 ITC Agro hopes to take its atta national . are being test marketed. Conagra claims to be largest miller in US. The distribution network is already in place. the North consumer is more discerning as far as taste goes. Healthy World will expand to other products.with region. In fact.specific blends to appeal to local taste buds. the Healthy World too leverage this with the image of boy somersaulting (the Sundrop trademark) with the proclamation –‘ From the makers of Sundrop’.
the altitude. and various other ailments.BRANDED WATER Branded water! That sounds preposterous. Since ancient time people have used water from mineral springs. This trend started gaining momentum in mid 1970s and since then large quantities of bottled water from mineral springs in France and other European countries are exported every year. especially hot springs. Depending on the temperature of the water. arthritis. and the climate at the spring. The international standards regarding bottled water are so stringent that for a particular brand of water to be . skin diseases. for bathing due to its supposed therapeutic value for rheumatism. This started the trend of using mineral water for drinking purpose to exploit the therapeutic value of the water. the location. Even in western countries the practice of bottled drinking water started in 1950s. The trend of having mineral water gained grounds in the market. especially when bottled soft drinks account for nearly four-fifths of Rs Popularity of Mineral water: History of mineral water The tradition of bottled water and mineral water is not very old. it can be used to cure different ailments. The concept of bottled has been quite prevalent in western countries due to greater health consciousness and higher awareness about health and hygiene.
and fluorine. Mineral water is just one form of aerated water. potassium. iron.certified as bottled water it has to get approvals on four levels: federal. The mineral water can be categorized into natural mineral water an artificial mineral water. mineral water is defined as water that contains a large quantity of dissolved minerals or gases. Some of the minerals are Epsom salt. lime. a sample of water is said to be natural mineral water only if: . While mineral water produced artificially by adding salts to distilled water or aerating it with carbon dioxide is called artificial mineral water. The most common gasses found in mineral water are carbon dioxide and hydrogen sulfide. magnesia. magnesium sulfate. It is water with high mineral and gas content. and sodium sulfate. trade association and individual company levels. It is mostly rainwater that has soaked into the ground and dissolved the mineral matter. TYPES OF BOTTLED WATER As per Encyclopedia Britannica. boron. Natural mineral water is obtained from natural springs and has a high content of calcium carbonate. state. silica. It may also contain gases like carbon dioxide or hydrogen sulfide. While according to American and European Regional Codex Standard.
No minerals can be added to this product. FDA (Food and Drugs Authority) of US has set standards for bottled water also. It has categorized bottled or drinking water into 7 different types. Besides this. Internationally like for other foods and drugs. It is collected under conditions. Mineral Water: Bottled water containing not less than 250 parts per million total dissolved solids may be labeled as mineral water. . It is not subjected to any chemical treatment. It is bottled at the point of emergence of the source with particular hygienic precautions. which guarantee the original natural bacteriological purity.It is obtained directly from natural or drilled sources from underground water . Distilled Water: Water that has been turned into steam so its impurities are left behind and the steam is condensed to make pure water. Mineral water is distinguished from other types of bottled water by its constant level and relative proportions of mineral and trace elements at the point of emergence from the source. namely: Artesian Water / Artesian Well Water: Bottled water from a well that taps a confined aquifer (a water-bearing underground layer of rock or sand) in which the water level stands at some height above the top of the aquifer.bearing strata.
state. and individual company. There must be a natural force causing the water to flow to the surface through a natural orifice. drilled or otherwise constructed in the ground that taps the water of an aquifer (a water-bearing underground layer of rock or sand).) Spring water: Bottled water derived from an underground formation from which water flows naturally to the surface of the earth. FDA regulates bottled water that crosses state lines. de-ionization. reverse osmosis or other suitable processes. INTERNATIONAL SCENARIO: In United States. (PS: soda water. industry association. EPA (Environment Protection Agency) regulates public water systems. Sparkling Water: Water that after treatment and possible replacement with carbon dioxide contains the same amount of carbon dioxide that it had at emergence from the source. . the bottled water industry is regulated on four levels: federal (by the U. tonic water etc. Well Water: Bottled water from a hole bored.S. Spring water must be collected only at the spring or through a borehole tapping the underground formation finding the spring.Purified water: Water that has been produced by distillation. are not considered bottled waters as they contain sugar & calories and are considered soft drinks. Food and Drug Administration as a food product).
Thumps up.Overall different players are playing different tunes in order to establish their brands in the market. The market remained dormant for quite long (for a period of 20 years or so). INDIAN SCENARIO: In 1967 Bisleri set up a bottling plant for manufacturing and marketing its mineral water but failed. Mineral water market had its seeding as early as 1968-69 when Parle Group acquired the Bisleri brand from Bisleri of Italy for launching Soda water but later launched bottled water also. coming in of cola majors. In early 1990s with onset of liberalization policy by the Indian government. . Bisleri re-launched its bottled water in 1994. deteriorating levels of potable water. By this time with exposure of media and exposure to international life styles. The market has not looked back ever since then and has grown leaps and bounds to such an extent that a number of genuine as well as fly-by -night operators have entered it to milch it. The launch at that time was a big flop as concept of buying water that too in bottled form was not accepted by the Indian public. increase in a number of water borne cases. Gold Spot etc by Parle to Coke and other factors led Bisleri to test waters again. sell off of local soft drink brands of Campa. The brand was later sold off to Parle in 1968-69. The market through out this period was formed only by the premium products that too available through 5-star hotels. increase in awareness about health and hygiene and other related factors led to acceptability of concept of mineral water.
increasing urbanization. In addition with getting pure drinking water from municipal taps in cities and towns becoming a luxury the scenario has become so lucrative in business sense that the opportunity is being misused by a number of companies especially in our country. The company entered into bottled water business in September '99 the company has targeted its product towards youth segment and has so far focuses only on one SKU. PLAYERS : PepsiCo: Pepsi has AquaFina brand of mineral water in the market. the business opportunity is humongous and the potential is largely untapped. As a normal human being requires on an average needs 2-3 litres of water everyday and world population is more than 6bn (growing at 2-3% annually). have made the bottled water business quite lucrative. Infact one of the major factor for flourishing of the sector is the public fear that water supplied by civic bodies is impure. These facts about water added to the growing number of cases of water borne diseases. Though . These companies are selling plain tap water under the name of mineral water and are be-fooling consumers. The situation has got aggravated by lack of awareness among common people about mineral water and also due to lack of initiatives on part of the government both on count of setting stringent norms as well as on taking action against non-compliers. increasing water pollution. increasing scarcity of pure and safe water etc. that too 750ml.Moreover with this commodity being a human necessity it makes best sense to do business in.
It is also credited with forming a new segment of 330ml SKU in the market. The company has tied up with Kothari Beverages. The company presently is the second largest player in the market with share of 20%. Himalayan. Purette. Coca-Cola: The company has entered in the business in May'00 through its brand. The Kinley brand is already being used for its soda water. Florida. The company has recently extended its Bailley brand name for its soda water. 1. of Yes brand of mineral water. Golden Eagle. The company is also credited with SKUs of 500ml. Hello. Prime. Bisleri: The brand is a product of Parle International and presently is the market leader with more than 45% market share. Market categorization .2 lts. it has plans of increasing share in the market by expanding its SKUs portfolio as well as its distribution reach. Other players in the market with strong regional presence are: Brilliant.the company is present only in selected market as of now. Pure Natural Aqua. the company of Frooti fame. 1. Kinley. Ganga. The company pioneered the concept of bottled water in the Indian market as early as 1967. Metro etc. Bailley: The brand is a product of Parle Agro. Yes. for manufacturing coke's brand at Yes' facilities.5 lts and 2 lts in the Indian market. Fountain.
Recently Bailley has launched 330ml pack targeted against 330ml pack size of soft drinks especially the aluminum-can drinkers. 2 litres. tourism. Himalayan. Based on these SKUs we can divide the entire market into two segments: i) Retail consumption market ii) Household & Institutional consumption market Each of these consumption markets have a number of SKUs under it. Kinley. and 5 litres. hospitals etc. parties.The market initially had only one SKU of 1 litre this was followed a by a number of smaller and bigger SKUs. Evian of Danone group.5 litres. The SKUs that are available in this market are 10 litres and above besides this we have pack size of 250ml plastic cups The market can also be divided on the basis of the price at which this bottled water is available into three categories: i) Super premium mineral water ii) Premium local natural mineral water iii) Popular or plain bottled water Presently. caterers. Brilliant etc.2 litre. belong to premium local natural mineral water category. Catch. belong to popular or plain bottled water category. Bailley. All other brands like Bisleri. travel. offices. 1. . Perrier and San-Pellegrino of Nestle belong to super premium category. The institution market is largely constituted by hotel industry. Some of the most consumed SKUs in retail market are 500ml. 1. AquaFina etc. 1 litre.
Some of the standards pertaining to labeling of products in the industry are: Label should have consumer brand name Label should have the name of the product category Label should have name and address of the manufacturer Label should have net weight or volume Label should have the batch number Label should have the name of source or place of origin of the product Label should have the date of packaging Label should have the date of expiry Label should have direction for storage Label should have treatment for disinfection Label should have the license or certification from the concerned authority .
However. with usage restricted to foreign tourists and jet-setting Indians. Bailley’s task was formidable. market with its brand. Second. market analysts thought it fit to keep their fingers crossed about its prospects. That meant that the distribution system was already in place and the new brand of bottled water from the same stable would have a readymade network of outlets throughout the country. with only a handful of players catering to the sporadic demands of an equally small audience comprising travelers and a . as a new entrant. Parle Agro already had two well-entrenched brand in its portfolio. For Prakash Chauhan. Bisleri enjoyed a clear first-mover advantage and was on its way to assume the generic brand status. owned by brother Ramesh Chauhan’s Parle Exports. Frooty and Appy. Through the 1970s and 1980s. Bailley. the entry barriers were not very difficult to overcome. On the other.when Prakash Chauhan’s Parle Agro entered the mineral water market with its brand. which occupied leadership positions in the tetra packed fruit drinks market with a combined share of over 90 %. it was firmly within the strange hold of Bisleri. Bailley. however. the market presented a very clear opportunity. In the 3. the mineral water category was a virtual shell. For one.5 million case market (estimated at Rs 36 crore). the concept of bottled mineral water was not well established. for whatever the market was worth. with very little investment required in terms of technology or infrastructure.CASE STUDY BAILLEY In 1993.
According to some estimates. Maintaining an efficient delivery system required both high volumes & investment in . the retailer would fish out which ever brand he had in stock and hand it over to the consumer. brand awareness was low and. Instead. So much so that consumers who went to buy mineral water would actually walk up to the retail counter and say “ Ek Bisleri Dena ” ( Give me a bottle of Bisleri) . new entrants & relatively smaller players were at a disadvantage because freight costs claimed a large part of the operating expenses. the company had to expand the market. apart from localized competition. even though the concept of filters had made its way into people’s homes. But for the average traveler. travelers were quite content to consume tap water at railway stations or restaurants located near bus stops. The biggest barrier was the high recall that Bisleri enjoyed. In any case. the small size of the market did not grant enough space for another national player to join the fray. Here. the idea of carrying hygienic drinking water outside of home was accorded very low priority. Or even when the consumer ask for a particular mineral water brand. In essence. travelers then. who were wary of consuming contaminated water. the price tag of Rs 8-9 for a 1 litre bottle appeared unreasonable for a product which could be had for free and for which he had no clear need.few affluent consumers. To thrive in such a scenario. Instead. At times. Research corroborated the fact that people associated the consumption of mineral water with foreign tourists. most travelers carried their own water bottles. accounted for 80 % of sales volume back. as high as 30-40% of the total cost.
when Parle Agro began exploring the market in detail. But the existing capacities were not quite enough to service the steadily increasing demand. an efficient distribution system & competitive freight costs were important. it realized that with increasing health consciousness. Added to that was the prospect of increasing tourist traffic – both domestic & foreign. the company realized that to penetrate the market effectively. Since Parle Exports’ Bisleri was so strongly identified with the category. it also resulted in a lopsided cost structure . Parle Exports’ distribution system started out with its bottling plant in Mumbai.infrastructure. But more than just the brand name. it went ahead & added 11 more franchisees. But ranking in volumes in a category where the scope for brand differentiation was low presented another formidable entry barrier. Parle Agro took great care to brand its new product carefully. which. Despite these barriers. Without being radically different.metros. which had their own bottling plants in the metros & a few mini. the market was poised for a take-off. The company also figured that consumers took a little more time to articulate the name. the company chose a name that was slightly Anglicized ( a la Bailley’s Irish cream ) to project a more up market image. made sure that recalling the name would be so much easier. While this restricted the spread. Later. Bailley had learnt important lessons from the Bisleri experiment. in turn.
Parle Agro established franchisees near the markets that it intended to attack. This structure also ensured that Bailley had shorter replenishment cycles & lower inventories at the plants. But that was expensive proposition. Also. pilfer-proof cap & so on made up some 40% of the total costs. Since . transportation was expensive. since there was very little scope of differentiation in the product itself. This meant that they had to limit their focus to only a few markets initially. Therefore. While Bisleri reverted to the same route later. All these franchisees were expected to set up PET bottle manufacturing facilities at the bottling plant as well. Parle Agro simply doubled the number of franchisees. irrespective of which brand it is. One thing was clear: distribution was the key to success. it was essential to locate plants across the country. But that was fine for the company. This was because packaging costs bottle. This allowed Bailley to penetrate the market quickly. A network of franchisees that was the only way things would work. Parle Agro had a very clear gameplan from the beginning. This also did away with the uncertainty of bottle supply. as long as the freight cost was kept to barest minimum. differing sales tax. are made through the process of blow moulding. excise & octroi rates across states makes it difficult to have uniform national pricing. Parle Agro also decided to differentiate Bailley in terms of bottle design. Mineral water bottles. Mineral water being a logistics business & a voluminous item.because the freight & handling costs to service the interior markets sufficiently proved prohibitive.
priced at Rs 5. which are small test-tube like structures. it was placed on the prestige platform for the achiever segment. The 1-litre Bailley bottle was initially meant to spell safety & security for ‘integrated consumers’ who were genuinely into health & fitness. To stand out. which produces these moulds from PET granules which it buys from Reliance. was meant to introduce trials. The 500 ml bottle.the perform supplier of all these bottles was the same. are then sent to the bottling facilities where they are blown. all the mineral water brands available in the market had an identical bottle design.who like to make a fashion . the company introduced two pack sizes. filled & dispatched. Thereafter. Parle Agro decided to standardize the perform & cap designs for Bailley. it was also the most convenient size for the individual traveler. The company set up a perform plant at Silvassa. Market Share of Various Brands Others 22% Bisleri 40% Bailley 38% bisleri bailley other Initially. These moulds.
It tried up with various long distance bus operators who kept stocks of Bailley on board. the threat of any immediate retaliatory action from Bisleri was minimized. The prestige aspect was fully exploited by Bailley team hit upon the idea of exploring wedding market. After the task of cracking the market open was through. This has now turned out to be one of the fastest growing segments. Jaipur & Belgauum. Another advantage was that while attacking these markets.statement by drinking mineral water. which gave the company access to remote markets. at the time. Parle Agro devoted all its energies to exploit the non-traditional routes of increasing distribution width. That was mainly because Bisleri was quite well established in the metros & such low-volume fringe markets were of very little interests to the company. The company also sought out restaurants or dhabas on Mumbai-Pune & Nasik-Pune route. Bailley salesmen did a fair amount of direct servicing to set the ball rolling. Parle Exports was determined on paring down its investments on the mineral water brand & was content to let it piggyback on its existing soft drinks networks. Side by side. Moreover. Palghat. which had been . While caterers had reservations about whether the host would pick up the tab for water. A small incentive was given to bus operators & conductors to push the brands. Parle Agro’s sales team also established franchisee networks in relatively inaccessible places such as Guwahati.
neglected by the other players. The company encouraged the stockists to service these outlets- especially restaurants at which buses made their day or night–time halts.
Typically, the interior markets had far more players than could accommodated. To fight the regional players, Parle Agro used a two-pronged approach at the outlet level. It offered better service cycles & better product quality.
In some cases the company also resorted to an ingenious retail monitoring system, the Parle Agro Retail Barometer, to identify those outlets where competitive brands were not moving fast, so that the company could seize the opportunity to persuade the retailer to stock Bailley instead & push it.
Despite its aggressive stance, the huge Delhi market eluded Bailley for a long time. That was because it faced major problems in getting its franchisee set-up in Delhi right. While bailey was widely available in Jammu & Uttar Pradesh, till December last year Parle agro wasn’t able to fix a big enough franchisee, which would be able to service Delhi & adjacent towns. Despite that, till about a year back, Parle Agro was able to command a 20% share nationally (against Bisleri’s 45%) with its persistent attempts to crack the areas that the leader wouldn’t dare.
The company’s aggressive marketing strategy seems to have paid off. For one, its successfully broke the monopoly of Bisleri & is now the leader in number of regions including Maharashtra (especially Mumbai), Gujrat, West Bengal, Karnataka & Goa, & a
close second in many others. With a total production capacity of 120 million bottles per year, Parle Agro has mainly targeted towns with populations of more than 1 lakh although Bailley is also available in towns with populations less than 50,000. being in low-margin business, the company hasn’t spent any money & effort on mass media advertising but has concentrated on educating consumers on use of pure, hygienic water, through direct mailers & other media. Participation in corporate events also gives it a lot of mileage, and gives it patronized by corporate such as the Taj Group of Hotels & Jet Airways.
But the main reason for the Bailley’s success has been the strength of its franchisee network. Following the example of the West, the company realized that the best growth strategy is not one that entails extra space, capital investments & added manpower, but franchising. Franchised operations provided it a quick expansion route while keeping costs low & profitability high, & at the same time ensured deeper penetration & easy accessibility. From one Franchisee to start with, Parle Agro now has a network of 18 franchisees. With regular monitoring of its decentralized operations & strict checks on quality, Parle Agro provides the overall expertise, cashing in on the local franchisee’s understanding of his area.
Today, the mineral water market has grown to healthy Rs 500 crore & is growing at a phenomenal rate of more than 50%. Of this, unorganized sector players constitute about 40%. Till 4 years ago, the market had only 2 national players; today, more than 168 are jostling for shelf space.
According to industry sources, a new label is launched every 3 months and 1 existing player recedes into oblivion. For all practical purposes, the organized sector today is dominated by Bisleri & Bailley, which, between them, have more than 60% of this market. Bisleri leads the pack with a 40% share, by value. Bailley, a Rs 60-crore brand, has a 22 % share & is No 2 player. In percentage terms, the brand is growing faster than the category, claims the company. But the fact remains that, even to this day about 76% of mineral water consumption in the country is by travelers & bottled water really hasn’t made inroads into middle-class homes yet. For Bailley too, the biggest segment of consumers is that of travelers, followed by institutions & tourists. According to the company, the mineral water consumer is attracted by the benefits of easy accessibility, purity & hygiene, & only a small segment of consumers have evolved to the level of being loyalists of good brands.
The mineral water consumer is typically in the 20-35 year age group & is an educated, evolved person from SEC A & B. the consumption pattern is changing, though. Mineral water is now served on trains, airlines & parties. Besides the standard 1 litre bottle, Parle Agro has introduced bigger pack sizes to cater to a variety of needs. Bailley is available in 1 litre, 1.5 litre & 500 ml bottles, 20 litre jars & 200ml glasses. The 1 litre bottle sells the most.
mineral water stands for water fortified with genuine minerals. However. since the Bureau of Indian standards hasn’t laid down any specifications. hygiene continues to be the main plank of most brands. .While new players are making a beeline for this industry every day. So what is predominantly available is purified water. Even techniques such as ozonisation & reverse osmosis are used only by a handful. Worldwide. it’s different in India.
Improper naming of the brand. Bad product quality. Many new packaged food products come into market on convenience platform. However. Often. the reason may could be as simple & mundane as i) ii) iii) iv) Unattractive packaging. which are attributed for failures. That is. ii) Price –convenience equation. the same cannot be said for the failure of a brand in the market place. In fact. For example Nirma Bath was launched a few years ago in competition of lifebuoy. are i) Inadequate differentiation or me-too syndrome The most common reason for failure is that the marketers launch products. Marketers not being able to understand the core needs of the consumer properly. often lack of imagination prevents marketers to create a significant difference with the existing options. The brand was just me-too offering & had nothing new to offer to consumer & attempted to cash in on run-away success of Nirma Washing Powder which had stormed the Indian detergent market. These new products failed to stand out in crowd.Reason for failure of Branded Commodity A number of reasons can be attributed to the success of a brand. Still serious lapses. the consumer can get rid of some . simply clones of brands already in the market. which are.
The point to calculate here is. that did not make any sense. Improper positioning sometimes brings disasters For exmple Milkfood Yogurt Milkfood was a successful icecream in North India. However when the company decided to make this line extension through Milkfood Yogurt. The advertising projected it as a superior form of curd. The reason: the products were prohibitively priced. The Milkfood name (associated with icecream) was there on packaging as large as life. the new product has little chance to succeed.tedious chores simply by paying little more price for the product. A sambar or chatni required far less effort to cook. The problem was that it was never clearly communicated what the yogurt was all about. The yogurt cost . & paying a premium for a bottled version was really worth the effort. The basic idea behind the chatni & sambhars was right. it did not succeed. just how much will a customer pay for the convenience. The point to calculate here is. iii) Positioning. All Seasons Foods’ Package chatni & sambars failed as a result of getting this convenience-price ratio wrong. but consumers mistook it as a novel form of ice cream. just how much will a customer pay for the product. All Seasons calculated that housewives would be only too glad to snap up packaged sambars & chatnis if a company with good credentials sold them. If the convenience-price ratio is not right. The company bought a state-of-the-art plant from US to produce the proper quality & taste. & most housewives were only too glad to get it in packaged form. A tomato ketch-up took hours to prepare. For most housewives. A chatni bottle half the size of a ketch-up bottle cost twice as much. But the product failed to take off.
their chips got crushed & mangled. Pepsi’s Ruffles chips also failed due to lack of distribution support.50 for different variants (against a Vanilla cup of same size which came for Rs 4). because when the consumer has inclination to buy new offering. iv) Improper Pricing. 5. While their soft drinks could hold out.Rs. 5. Some other reasons :- 1 Lack of Differential Advantage Products fail when customers do not perceive them as better value than existing options. but it did not help. The popular saying that one must get value for one’s money. A manufacturer often chooses distribution channel which he is familiar with. Another major reason why new products often fail in the market is improper understanding of the distribution channel. Pepsi could not convenience to distributors to carry this product through.not one which is suited for the product. The end result was that the consumer refused to pay the premium. iv) Distribution Channel.50 & Rs 6. Success of a new brand depends to a large extent on initial price setting. . For example Ruffles Chips. Prices were slashed to Rs. there should be a clear benefits.
Presuming that the product is so good that it will sell on its own can prove to be wrong as special efforts of market development are required. Managing new products may call for expertise. Assigning inadequate resources to market development. complacent & avoids entry into new area. which an organization may sometimes lack.2 Too Slow Development. 5. Lack of Management Enthusiasm. in accurate positioning often misses the opportunities. Speed of entry or design of new products is essential in the changing market where technology is readily available. . at times. 4. Management is. Lack of Genuine Superiority. 3 Poor Planning. Error in judgement about target market/segment. Lack of Organization’s Expertise. the product will fail sooner or later. 7. 6. If a new product is merely & imitation of existing product. but claims superiority with which the consumers do not quite agree.
Too early or too late an entry into the market is also a common cause of failure. . Poor timing of Launch. If the product launch is based on a lower cost of production & the assurance of good channel support. 9. Under Estimating The Competition. 10. Underestimation of competitors’ capabilities & possible reactions is at times the cause of product failure. It may face its match by competitors. The wrong reading of consumers’ mind & arriving at an optimistic forecast of market demand is sometimes the reason for product failure.8. Poor market Research.
One solution is joint distribution or by adopting direct marketing 4. packaging becomes an important factor that marketers have to be concern about. 2 Understanding role of children . Distribution cost are an increasing component of marketing cost marketers will have to find ways through which one can achieve efficient as well as economic distribution.SUGGESTIONS 1 Rural market. With self-shopping gaining grounds and selfspace getting limited. Marketers should study the role of children in buying decision –as influencers and decision makers. . optimal usage level. 3 Distribution. Possible ways of circumventing this problem may be to market the product through schools or to use the imitative tendencies of children by influencing their peers. Brooke Bond for instance could capture the crux of the challenge when they started marketing Re 1 tea packets. buying habits . Company should study purchasing power. Packing. marketers will be gradually disillusioned with the method. How ever. Knowing the huge size of rural population of India it is natural that the rural market is attractive to marketers. life styles . the challenge remain how does one communicate with children? Advertising recalls being more in the case of children-one way is clear but with every one trying to apply the same technique. Companies should identify the requirements and pack commodities according to demand.
6 Adaptation to newer environment. As government withdraw entry barriers and relax restriction on merger or take over many companies should install superior technology and resort to merger –acquisition route to make their unit more efficient. Marketers will require to devote to more efforts to understand the customer view of quality and convenience. retention of a customer is possible only through better service. Marketers should do regular research to find this fact. Marketers have to develop organizational structure style and functioning. which enable them to act fast and bring in innovations in their marketing programmes .5 Customer service challenge. 7 Creativity and innovation in overall marketing programmes. In an increasingly competitive market.
BIBLIOGRAPHY Product Management In India : Ramanuj Majumdar Marketing Management :Philip Kotler Sales & Marketing Management ( Magazine ) A & M (Magazine) Brand Positioning : Subroto Sen Gupta What’s In a Brand : John Philip Jones .
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