Branding and It’s Impact on Commodity Products

7/31/2019 Branding and Its Impact on Commodity Products

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Branding and Its Impact on Commodity Products

CONTENTS

Brand and branding 1

Branding and advertising 3

Brand Equity 9

Positioning 10

Branding of Commodities 15

Advantage 17

Customer Benefits 18

Challenge in Branding Commodities 19

Packaging 20

Case

Catch Salt 22

Captain Cook Salt 26

Healthy World Atta 28

Bailley Water 37

Reason for Failure Of Branding Commodities 44

Suggestions 48

Bibliography

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BRANDING

BRAND

The word Brand owes its origin to the Norwegian word brandr which means

to burn. Farmers used to put some identification mark on the body of the livestock to

distinguish their possession. Products are what companies make, but customers buy

brands. Therefore marketers resorted to branding in order to distinguish their offerings

from similar products and services provided by their competitors. Additionally, 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, sign, symbol or design or a combination of one seller or a group

of sellers and to differentiate them from those of competitors.

BRANDING

Branding is a process, a tool, a strategy and an orientation.

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.

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. It is common knowledge that the

consumers choice is influenced by many surrogates of which the most simple

one is a brand name. Although there may be equally satisfying products, the

consumer when satisfied with some brand does not want to spend additional

effort to evaluate the other alternative choices. Once he or she has liked a

particular brand, he or she tends to stay with it, unless there is a steep rise in the

price or a discernible better quality product comes to his/her knowledge, which

prompts the consumer to switch the brand.

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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, service and even durables) or in products which are

perceived as a commodity (e.g. cement, fertilizers, salt, potato chips etc.). in all

such situations marketers use branding as a differentiation strategy and try to

develop an intimacy with customer groups. That is, they try to develop and

deliver customized products and auxiliary services with tailor-made

communications to match with the customers self-image. Such differentiation

is an on-going process and the initial and on-going actions are depicted.

Brand building is a conscious customer satisfaction orientation process.

The brand owner tries to retain customers to its fold over their competitors by a

mix of hardware & software because when a customer feels satisfied he / she

develops a kind of loyalty for the same. Therefore, a strong brand, apart from

name, symbol or design, ensures quality, stability of assured future market and

effective utilization of assets. Further, a strong brand, which a retailer wants to

stock because of customer pull also provides the owner of the brand with a

platform for the sale of additional products.

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BRANDING AND ADVERTISING

A brand is a product that provides functional benefits plus added values that some

consumers value enough to buy. Brands do differ from each other but distinctiveness over

and beyond this is highly desirable.

In brand building, advertising works through the reinforcement hypothesis to build

up, for buyers of the brand, a resonance or mutual interaction and reinforcement of

behavior and attitudes. Once the brand is off the ground after building its position against

other brands, this position is maintained largely by two factors: the brands functional

performance in comparison with competitors and the added values (subjective attitudes &

values) that have been built in the main by the advertising.

Branding and advertising are almost synonymous. There is an unspoken

assumption:

PRODUCT + ADVERTISING = BRAND

In other words advertising idea is the brand property. Only advertising reaches a vast

number of consumers that too economically.

1.BRAND BUILDING BY TAKING ADVANTAGE OF WORLD FAMOUS

EVENTS LIKE WORLD CUP (CRICKET)

Surf Excels advertising during the world cup was talked about. The brief was to link Surf

Excel with cricket and at the same time bring out the brands functions and benefits like

stain removing. The advertising highlighted the core benefit of the brand -- removal of

stains, says an HLL spokesperson. That is why the client bought the idea immediately,

even though the idea was not typically Lever.

This ad. 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.

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2.BRAND BUILDING THROUGH SHIFT IN AD STRATEGY

Onidas brand image was being threatened by umpteen brands. It wanted an

advertising strategy, which could communicate its contemporary, youthful premium brand

image with an aim of cheeky arrogance. This arrogance stems from the fact that their TV is

the best. This time they changed their familiar and successful devil, as they believed that

the core of the brand is more important than symbols like the devil. So the new ad with the

airplane. This is case of changing the brand image through advertising.

REINFORCING THE BRAND IMAGE

Kelvinator has reinforced its the coolest one image with a series of ads. For

example, 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 Kelvinators ownership being shifted from Whirlpool to Electrolux, the

consumers still associates Kelvinator with the coolest one. The ads were basically meant

to bring Kelvinator back to top of mind consciousness. The idea came from rustic

reasoning and the ads are being aired on star sports and Sony.

This case endorses the fact that advertising can play a vital role in fixing the

brands image in peoples minds.

Building brand image keeping the competitors in mind

LG Electronics

Fridge

Sub branded PN System (preserve nutrition), was positioned as nutrition preserver. The

ads said from today, all other refrigerator become history; drawing attention to somethingthat pushed their one benefit further towards the consumer. The advertising aimed at both

the head and the heart.

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CTV

It was positioned as the right set for wrinkle free vision, nothing terribly 007-ish in it. The

CTVs eye adjusts itself to lighting conditions. This was there in other CTVs also, so LG

used preemptive advertising strategy to build its brand image.

WASHING MACHINE

For this, feature positioning was used. Their washing machine was called the chaos punch

+3 and the feature highlighted was that the punch detangles clothes before washing them.

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.

ADVERTISING USING A UNIQUE THEME

BPL, as is talked about, is the only brand that has not compromised on quality so far. It has

invested a lot of time, money and effort on brand building. The Believe in the best

campaign was able to establish BPL as an Indian brand with international quality products.

And that is one of the chief reasons why it is still at the top. Its April 99 market share was

19.7% compared to Videocons 13.8% and Onidas 11%.

One can use a theme to project its image and it is fairly understood that no one will copy it.

It can be used again and again in different contexts but reinforcing the same idea to ingrainthe brand in the minds of the consumer.

BRANDING AGAINST COMPETITORS

WHIRLPOOL

The company is currently building vehemently on its brand. 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, agitator wash are highlighted

specifically in ads placing the brand in a high pedestal and giving it a highly polished

image.

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BRANDING AN INDUSTRIAL HI-TECH PRODUCT

INTEL (the third line)

It is the worlds tenth most valuable brand. It is targeting the main stream market, with a

special accent on home pc market, along with office use. Its global advertising sees the

blue door opening- the viewer is sucked down a flash whirl, virtual town. 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. It also links it to the excitement of surfing the Internet. It

has positioned the brand as the Internet dream machine.

EMOTIONS IN BRAND BUILDING

Wheel detergent powder was advertised using the emotion anger. Although it sounds

negative, the trick clicked as the angry lady was calmed when she used the detergent which

brought award to her husband. A successful campaign fixing the brand as a household

middle class product with the customer can identify.

MAGGI

Maggi tomato ketchup is illustrated as, Sauce ka big boss. The tag line of Tomchi is not

too hot, not too sweet, tastes just right. Appears to be direct hit at Maggis its different

hot and sweet sauce. The communication is based on positioning of tomchi as a sauce,

which has a perfect balance of tomatoes for sweetness and spice of chilies. The Maggi

sauce campaign with its famous Ajit jokes-Lily, dont be silly or Boss has gone for a

toss, was path breaking. It has made the brand memorable.

There is a new ad now, which explains the expansion advertising strategy Maggi is

continuously following upon.

But whatever be the product, Maggi has remained and will remain etched in the customers

mind as a dependable and quality brand.

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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. In the common parlance it denotes trust

and confidence.

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 cross-synergies,

seamlessly. This trust has been built at a lower cost. The communication device used is

very interesting as it educates the common man about his own money. This is a financial

brand in the offing.

(Currently their ad. campaign has again undergone a change. Now they are focussing on

hassle free banking.)

DeBeers

The Debeers advertising has rocketed this non-traditional brand from 1995 and its market

has grown stupendously by 19.4% in 1997. The ratio advertising to incremental sales was1.2:100. The Debeers Consolidated Mines manages consumer demand using advertising,

publicity and trade. The brand plank was: diamonds are more modern and aspiring as

compared to gold. Communications had two options: the woman as a self-purchaser buying

with and without her husbands approval or the husband surprising the wife. The second

was preferred and thus the product was positioned as a highly emotionally charged

surrogate for status.

In TV there were two spots

Architect and Hotel spot.

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Print advertising focussed on creating identification with women portrayed and directly

compared costs with that of familiar objects. Diamond-testing information below the ad

addressed the knowledge issue.

These efforts changed the attitudes of viewers against diamonds. In 1997, diamonds were

seen as more personal gift. Nevertheless, diamonds had a upper hand on god only in terms

of beauty and status. In 1997 only, major change was in media when recall leapt up.

The new wedding strategy was used and the new international shadows execution looked

stylish and elegant.

Infomercials were run which addressed price, confidence and knowledge issues, the

channel thus enabled them to get a long, complex message into a medium having greatest

reach and impact.

No wonder DeBeers is now a name in itself.

Ref.: Brand Equity (ET); 10-16 Feb. 1999

ADVERTISING THE HARD WAY

Vicco

It took Vicco 27 years to carve out a niche for itself.

After five unsuccessful years of trying to sell Vicco Turmeric, it decided to use a fresh

strategy. Other than packaging, communication of the brand was an important aspect used.

Using the traditional haldi ceremony, it positioned the product in the minds of the Indian

women category. 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

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television, the brand began to gain acceptance. Fair and Lovelys introduction did not dent

Viccos sales while Sangeeta Bijlani endorsed the brand. With continuous harping on the

natural benefits of turmeric cream, Vicco went ahead unfaltered by fairness creams and

came to be known as a nationally recognized turmeric cream.

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BRAND EQUITY

The equity of a brand is measured by the awareness and image which it evokes.This

is a natural measurement, since the brand is the symbol. Brand awareness relates to thenumber of persons who recognized the brand and who are conscious of the promise which

the symbol expresses. 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.

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, and the degree

of personal involvement.

The Brand Equity has the following elements,

1.Brand Loyalty: It is a measure of attachment that a consumer has to a brand.

2.Brand Awareness: It is the ability of a potential buyer to recognise or recall that

a brand is a member of a particular product category.

3.Perceived Quality: It is the customers perception of the overall quality or

superiority of a product or service with respect to its intended purpose ,relative to

alternatives.

4.Brand Associations: Anything linked in memory to a brand.

5.Other Proprietary Assets: Like Patents,Symbols,Trademarks,etc.

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POSITIONING

DEFINITION:- Various have given different definition of Positioning. Some are:-

Beckman, Kurtz, Boonee

Product positioning refers to the consumers perception of a products attribute, use,

quality & advantages & disadvantages in relation to competing brands.

Berkowitz, Kerlin, Rudelius

Product positioning refers to the place an offering occupies in the consumers mind on

important attributes relative to competitive offerings.

Alpert, 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.

Crawford, Merle C

Once a target market has been selected, the new product marketers must differentiate

their item from products already offered to that target group. This differentiating is called

positioning the product & is now widespread use.

Cundiff, Edward W, Richard R Still, Norman A P Govoni

Positioning is significant to consumers in that it provides a basis for comparing

alternatives choices in the marketplace. The marketer can guide the consumer by furnishing

clues to help position the product in relationship to others

Day, George S

Product positioning refers to the customers perceptions of the place a product or brand

occupies in a given market.

Ennis, F Beaven

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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.

Hardy, Kenneth G

Positioning is defining the package of benefits relative to competition that will be offered

to particular target segments.

Hehman, Raymond D

Positioning is your product as the consumer thinks of it since the consumer is the ultimate

user of the product, the consumerrs perception of your product is what your product really

is.

Kotler, Philip

Market positioning is arranging for a product to occupy a clear, distinctive & desirable

place in market & in the minds of target consumers.

Mittelstadt, Charles a

Positioning refers to how you want your brand thought about in connection with

competitors in its product category. Positioning needs to be specific to your brand aimed at

a specific target audience.

Reibstein, David J

Positioning is the activity of trying to get customers to perceive a companys product

differently from the way they perceivewhat competitors are offering. The customers

viewpoint is the crucial aspect of product positioning .

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USEFULNESS OF POSITIONING

As competition intensifies & brands proliferate, consumers tend to differentiate

between brands in their own way. Positioning is a conscious attempt on the part of themarketer to accentuatethis natural tendency & in the process, impart a distinct identity to

his own brand to make it stand out among the competitors. The basis on which this

differentiation is achieved reflects consumer preferences or attitudes. The marketer,

through his diverse & coordinated actions, tries to influence this process.

The concept of positioning is also important in various other aspects of the

marketing strategy. Once one is clear about the position one wants, the other marketing

decisions like product design, packaging, pricing, method of distribution, etc., become

clearer.

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ELEMENTS OF POSITIONING

Evidence has shown that there are four distinct variables that affect the position of a given

product. These are:-

a) The product itself,b) The company behind it,

c) The competition,

d) The consumers.

1. The Product :- 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.

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.

In other words, one needs requires judging the dimensions, which are important to the

customer. Conversely, 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.

2. The Company:- A product comes from a company & every company has its own

history. Generally, the stronger the company profile the better the image of its products.

For instance, consumers may perceive a better the image of a product if it comes from a

reputed house like Tatas. The companys image also matters to the various channels of

distribution involving traders & distributors especially retailers. Even where a company

like Gujrat Cooperative Milk Marketing Federation Ltd., is overshadowed by its popular

brand name Amul, new product launches like Dhara (a non-Amul brand) has been well

received by trade channels .

Thus, first the companys own image lends weight to the products positioning . secondly,

where it does not, as in the case ofDhara, the companys name still plays a vital role in

successfully launching the product & eventually creates the product position in the market.

3. The Competition :- Product positioning is invariably done in relation to various

competitive offerings. In most cases, the consumers have a tendency to judge a product in

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comparision to the dominant brand, e.g., all photocopiers are compared with Modi Xerox,

all PCs withHCL, toothpastes with Colgate & so on. Leading brand enjoys some edge over

others. It is therefore imperative to assess the various competitors. In other words, selecting

a slot distinctly different from the competitors can avoid a direct confrontation with them.

While segmentation serves this purpose by dividing the market into smaller groups,

positioning goes a step further to establish a distinct niche in consumers mind.

4. The Consumer:- It should be reiterated that positioning is essentially based on

consumer perception rather than factual evaluation. Hence, it becomes necessary to

examine how the consumer views a product. Here, it becomes necessary to examine how

the consumer views a product. Here, the consumers self-perception comes into play along

with his cognitive & connotative factors. If he sees himself as modern & progressive, he

will expect a more progressive product. If, on the contrary, he sees himself as traditional &

possessing a taste for performance, then he is more likely to view changes as new fangled.

Thus, it is important to know what kind of person the archetypal consumer is, his lifestyle,

& his preferences.

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BRANDING OF COMMODITIES

In the past in India most commodities were sold in unbranded form. Today we

notice the reverse trend. It all started in early Nineties when foodgrains and spices were

offered in branded form. Vegetables followed this, salt, sugar etc. Today, more marketers

have jumped into the bandwagon. Say, Tata salt has used corporate name, oranges are

stamped with the growers level; tea is sold in special pack design or names, common nuts

and bolts are packaged in cellophane with the distributors symbol, and automobile

components- spark plug, tyres, filters-bear separate brand names from the automakers. This

craze for branded commodities is also a result of the changed lifestyle of people, specially

working couples who have high disposable incomes and for whom quality and convenience

now take priority.

Marketers are flocking to the commodity market because of huge size they offer.

For instance, the branded rice market is at Rs 1100 crore which constituted just about 10

percent share of rice market. This goes to show the immense opportunity. Generally

speaking, marketers have added value to commodities through branding, be it fertilizer,

salt, spices, flour, rice or sugar.

Hindustan lever has achieved a thundering success when they differentiated its

DAP fertilizer under the brand name of paras. Similarly, Brooke Bond has branded

frozen vegetables with its green valley brand. DCW Home product had modest success

when it first launched Captain Cook salt and followed it up with Captain Cook Atta. Siel is

into sugar, NEPC has offerd atta, maida, Sooji and spices.

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ADVANTAGE

The brand name makes it easier for the marketer to process orders & track

down problems associated with the brand.

The marketers brand name & trademark provide legal protection (patent orcopyrights) of the unique features, which would otherwise be copied by

competitors.

Branding gives the marketer the opportunity to attract loyal & profitable

segment of customers. Loyalty created over time offers the unique

advantage of having assured customer base against competition & greater

control in their marketing programme.

It is wrong to assume that any commodity market is a homogeneous mass.

Instead, the task lies in skillfully identifying the different segments &

understanding their specific needs. Branding helps marketer to form suitable

segmentation of the market. Different brands can be aimed at different

segments of customers.

In the long run it helps to build a strong association with the consumers as

well as the trade. By highlighting the same name, they could project their

quality & image of the company.

Last, but most important, to derive the first movers advantage & tap the

huge market potential.

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CUSTOMERS BENEFIT

Branding of commodity products not only benefits the organization but it also helps the

customer.

1) Quality :- Customer will get the quality product from the wide variety of similar

products.

a) The risk of getting adulterated product is minimized. It is certification for quality

and homogeneity. For example unbranded masala etc. may be adulterated which

not only affects the taste of the food but also affects the health of the person.

b) The manufacturing date is printed on the packet of branded commodity which helps

him to know how old the product is. 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.

2) Quantity:- In branded commodity products the customer is getting the right

quantity of product. The grocery shop cannot give him less amount.

3) Price:- The price of branded commodity product is fixed so a shopkeeper cannot

change it & customer cannot be cheated. For branded commodity products the

shopkeeper has to charge the same price from a child or a adult customer.

4) Value For Money:- 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.

Customer easily identifies the branded commodity.

Customer knows the special attributes or benefits

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CHALLENGES IN BRANDING COMMODITIES

The commodity market is generally driven by price. Besides, consumers, by and

large, show no involvement in selection of a commodity. Under such conditions, to make

them insensitive to price itself is very difficult task. And, afterwards to create a preference

for a specific option calls for a more sustained efforts on the part of any marketer. Of

course, 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. Unlike in

consumer goods market where the marketer can play around with consumer perception,

brand differentiation etc, in a commodity, branding is about going to the basics or

exploring at the grass-root level. To quote, David Aaker, it involves overturning the rules

of the market, establishing new selling propositions in the market which so far has been

driven largely by price. And everything from positioning, pricing, brand value & packaging

takes on a new sensitivity.

Brand building involves cost, apart from additional cost incurred in packaging,

labeling, advertising, legal protection- & a risk that if the brand should proveunsatisfactory to the user, the companys image would suffer & it may even affect

market for other products of the company. Thus the challenges involved are

formidable. Still any marketer prefers to brand it because of many unique advantages.

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PACKAGING AS A DIFFERENTIATING STRATEGTY

The package provides the buyers first encounter with the product & is capable of

turning him on or off. Many marketers have called packaging a 5th P along with Price,

Product, Place & Promotion. Packaging is treated as an element of the product strategy.

Well-designed packages can create an image of convenience or quality for the consumer

and promotional value for the producer. This could be a useful tool for justifying the

premium charged.

Inertia Industries Limited (IIL) launched their premium 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 withthe customer. In 1994, to rectify the defect, the company went for a relaunch & the

packaging was changed to green bottle with a golden champagne foil top. IIL now

repositioned Sand Pipers as the champagne of beers. The effect was startling. It sold out

37,000 cases as compared to a mere 3000 cases a year before.

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IMPORTANCE OF PACKAGING IN COMMODITY PRODUCTS

Packaging plays a very important role in commodity products. For example Uncle

Chipps potato chips based on its delivery of freshness, crispness & retention of flavour.

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. Moreover, at a time when potato chips were available only in colourless,

transparent, their quality plastic packages, Uncle Chipps was the first to use packets made

of air impermeable metal foil which was brightly coloured for visual differentiation.

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CASE: Catch Salt

Catch, as a brand, has already achieved the distinction of having made it to the up

market Indian table, which is often the biggest hurdle for most enterprises.

THE HUNCH :- The salt came first. The year: 1987. The Delhi-based Dharam Pal

Satya Pal (DS) group, better known for its Baba, Tulsi and Rajnigandha brands ofpaan

masala (and the recent Pass Pass), launched a subsidiary called Hi Tech Foods Ltd. Satya

Pal, the then proprietor of DS group, had this vague hunch that branded free-flowing table-

salt was exactly what many Indian homes wished they had access to, but didnt. The more

he thought about it, the better the idea began to crystallize. Getting cooking salt out of a 1-

kg bag, 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, but they worked rather poorly). The question was simply one of

how cheaply the idea could be launched, and how many people would be willing to pay for

it.

In hindsight, it looks obvious. To take a product as basic as salt (its the obvious

example of a necessity) and deliver it in a more user friendly form. Thats the thing about

great ideas. But the point is it was late 1980s, several years into consumer boom, and no

one had done it before. The 60-year old DS Group, with a Rs 75-crore turnover, had an

enterprising brain in Satya Pal, who went ahead and did it. Today his two sons, Ravinder

Kumar, chairman, and Rajiv Kumar, managing director, DS Group, are busy building on

success.

Free Flowing Success wasnt a simple matter of executing a terrific idea. It took hard

work, as all business ventures do, and plenty of bold thinking and risk-taking. The idea

may have been the result of gut feel, but everything else followed a statistically valid

process. Hi tech carried out a random survey of the urban Indian market, and decided to

aim Catch at two well-defined segments. One, premium Indian households in SEC A and

SEC B cities. And to Hotels and restaurants, which would use the products in large

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volumes. Hi-tech built itself a national distribution network that covered some 1,600

premium outlet would be a decent start.

The important gambit, however, was the brands pricing. Catch was launched at a

price of Rs 6 for 200-gm pack. For a product that has stirred price passions in past, this was

an audacious premium over regular salt. The 1983-launched market leader, Tata iodized

salt, was selling at only Re 1 per pack for one whole kg, and local merchant were selling

loose salt at less than that. So Rs 6 was quite a price. This was a big risk. A bigger one than

the price ratio would suggest at first glance, because low priced salt is seen by most in

India as something of a fundamental right, and anything extra, be it taxes, inbuilt costs or

margins, risks being viewed by the aam janta as extortion.

According to Ashok Aggarwal, vice-president, DS group, We did not have any

competitors, as the brand was a high-priced commodity packaged for convenience. And

luckily for it, the urbane Indian housewife made a rational choice, 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). And so were guests. And, since it was so well-

packaged, it quickly became status symbol. Price analysts would have been shocked. Never

before had the Indian market accepted a product at thirty times the per-gram price, for

packaging.

With in months of launch, it was clear that Catch was on it way into the marketing

history books. It wasnt packaging insists the company. The salt used in catch was sea-

water salt (subsoil water salt is another source). Sourced from the Gujarat coast, DS was

getting it processed at its Noida refinery plant, near Delhi, 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. This is also the track adopted by Captain

Cook salt, which came later (in 1991), and made a free- flowing proposition for 1-kg packs.

Now Hindustan levers kissan has entered the salt business, but its harping on iodine and

goiter-prevention, a separate benefit altogether.

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PRICES OF BRANDED COMMODITYCatch the trend

100-gm packs 1994 1995 1996 1997 1998 1999

Table salt 5.00 5.50 6.00 6.00 7.30 8.00Black pepper 23.50 26.50 29.00 42.00 46.50 58.00

Red chilli powder 17.00 17.00 18.50 21.70 20.40 26.00

Turmeric powder 12.75 12.75 12.75 12.75 14.00 20.50

Ginger powder 26.00 26.00 28.50 32.60 31.90 30.70Market retail prices in Indian Rupees

Catch salt s contribution to turnover has decreased considerably since its launch in fiscal 1998-99, it was

less than 50%, compared to 72% in 1996-97.

In 1998, Catch added Lahori salt, sambharpowder and curry powder to its

portfolio. The costlier commodities, such as pepper, garlic salt and chat masala were also

put out in 50gm packs. The most recent launch was in 1998, when Catch launched white

pepper at Rs 93 per 100 gm pack.

Not all the products are still selling. Catch basmati rice, for example, failed in 1989.

DS had to retrace its steps. What went wrong? Rice prices kept fluctuating, says

Aggarwal. As a brand, one must promise the customer a consistent price. But primary

sector products prices are volatile. Its a challenge.

Today, Catch salt continues to be the penetration-driver, though observers feel that

brand has hit a plateau. The company now has 230 distributors, catering to over 20,000

retail outlets across India. Advertising? Catch ran a campaign a long time back, as

Aggarwal recalls. Since then nothing much has happened. However DS continues to

advertise itspaan masalas.

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CASE: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. The product was put in an elegant package.

Target Market: Market research revealed that salt was of low importance on the

consumers grocery list. Further, it was found that the consumer associated salts purity

with whiteness, and Tata Saltwas then perceived as best. Captain Cook decided to take a

shot at the leader from that position, by calling itself the purest and whitest salt in the

market.

Pricing and Distribution The companys biggest gamble was pricing. Captain Cook

salt was priced at Rs 3 for a 1 kg pack, 50% higher than Tata Salt, & thrice the average

commodity price. The product expanded its distribution reach gradually to cover outlets in

most parts except Kerela & Ares of North-eastern states. However, tackling the trade was

not easy. Retailers were reluctant to stock the new brand as they were apprehensive about

the price. Even after offering a commission above Tata Salt, the company had to convince

them of their service standards replacement of spoiled packs & so on.

Advertising: The Company launched a high decibel ad campaign to arouse consumer

interest in a conceived dull product. The campaign began with teasers warning husbands

that their wives were about to fall in love with a mystical man from the high seas. The

Holy Hygiene launch commercial showed a ships captain steering his hungry crew to an

island where some food was being cooked, & adding salt to the feast before letting his

sailors eat. After that, there was a series offun oriented commercials, each a take-off on

popular themes. The company claims that the brand had sales of Rs 3.4 crore at 15,970

tonnes in its very first year. In 1992-93, volumes tripled to 48,410 tonnes valued at Rs 10.3

crore.

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Competitive reaction & search for new USP. To defend its position, Tata

Chemical launched a campaign highlighting its modern manufacturing process & also

made retail commissions at par with Captain Cook. Consequently, Captain Cooks sales

began to stagnate & DCW HPL then decided to go in for another round of consumer

research in July 1993. The idea was to develop a fresh selling proposition based on what

the consumer really desired of high-value salt. According to the study, housewives were

looking for a product which would not absorb water, form lumps or stick to her hands. It

would mean that she would opt for free-flowing salt.

Repositioning Captain Cook. The product was reformulated with additives to keep

the salt drier. Its new campaign, while sticking to its spirit of fun, highlighted the salts

free-flow property. The 60-second film showed a housewife gracefully pouring salt from a

Captain Cooks packet into a jar. Alongside is a packet of ordinary salt ( with a pack

design gave semblance of Tata Salt) refusing to flow out smoothly. Captain Cook claims to

have reached a sales figure of about 90,000 tonnes (valued at Rs 25 crore) in 1994-95,

which was 50% more than previous years sales. Since the relaunch the prices have been

raised to Rs 5 a kg.( Tata Salt: Rs 4.50 a kg).

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CASE:Branded Atta

Case: HEALTHY WORLD- The branded atta market is estimated to be Rs 350 crore, or

about 3 lakh tonnes per year, with a category advertising spend of about Rs 20-25 crore.

There are both national player like Pilsbury, Hindustan Lever Ltd (Annapurna) and many

regional players in this market.

After Act II, it is act three now. The marketer of sundrop, has launched wheat flour

(atta ) under the brand name Healthy World. This is ITC Agro Techs second offering

(after Congra hiked its stake), Act II Pop corn being the first. The US-based food products

firm, Conagra has just over 51percent stake in the venture.

According to Sachid Madan, vice-president, We took an Indian perspective out ofthe Conagra portfolio, with relevance to the local palate. While Act II was an outcome of

our foray into speciality products, Healthy World marks our entry into mass market

products,

Priced at Rs 18.5 for one kg pack, Healthy World comes in packs ranging from

500gm to 5kg. ITC Agro Tech claims it spent nearly one year on Research & Development

before launching Healthy World, benchmarking it against national players in the branded

atta category. Players like Pilsbury, Hindustan Lever Ltd (Annapurna). There are several

regional brands too. Parameters such as softness, taste, colour & texture preferences are

said to have been looked into detail before finalizing the variant. According to Partha

Datta, marketing manager, preferences in North & South of India differ distinctly across

almost all parameters ofatta. While creamish to white colour & finer size is preferred in

South, the North consumer is more discerning as far as taste goes.

Consumers in the South are more receptive (which is why the product was launched

here) to branded atta, but the North leads in consumption, where average monthly

household consumption is 27 kg, while it is just 3 kg in the South. Healthy World is

currently available in Andhra Pradesh, Karnataka, & Tamil Nadu.

Conagra claims to be largest miller in US. ITC Agro took over the atta

manufacturing portion of a partner in Chennai to streamline it in line with its parent

companys manufacturing process. What will also help ITC Agro is the fact that it has

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CASE:BRANDED WATER

Popularity of Mineral water:

History of mineral waterThe tradition of bottled water and mineral water is not very old. Even in western countries

the practice of bottled drinking water started in 1950s. The trend of having mineral water

gained grounds in the market.

Since ancient time people have used water from mineral springs, especially hot springs, for

bathing due to its supposed therapeutic value for rheumatism, arthritis, skin diseases, and

various other ailments. Depending on the temperature of the water, the location, the

altitude, and the climate at the spring, it can be used to cure different ailments. This started

the trend of using mineral water for drinking purpose to exploit the therapeutic value of the

water. 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.

The concept of bottled has been quite prevalent in western countries due to greater health

consciousness and higher awareness about health and hygiene. The international standards

regarding bottled water are so stringent that for a particular brand of water to be certified as

bottled water it has to get approvals on four levels: federal, state, trade association and

individual company levels.

TYPES OF BOTTLED WATER

As per Encyclopedia Britannica, mineral water is defined as water that contains a large

quantity of dissolved minerals or gases. The mineral water can be categorized into natural

mineral water an artificial mineral water. Natural mineral water is obtained from natural

springs and has a high content of calcium carbonate, magnesium sulfate, potassium, and

sodium sulfate. It may also contain gases like carbon dioxide or hydrogen sulfide. While

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mineral water produced artificially by adding salts to distilled water or aerating it with

carbon dioxide is called artificial mineral water.

Mineral water is just one form of aerated water. It is water with high mineral and gas

content. Some of the minerals are Epsom salt, lime, magnesia, iron, silica, boron, and

fluorine. The most common gasses found in mineral water are carbon dioxide and

hydrogen sulfide. It is mostly rainwater that has soaked into the ground and dissolved the

mineral matter.

While according to American and European Regional Codex Standard, a sample of water is

said to be natural mineral water only if:

It is obtained directly from natural or drilled sources from underground water - bearing

strata.

It is collected under conditions, which guarantee the original natural bacteriological purity.

It is bottled at the point of emergence of the source with particular hygienic precautions.

It is not subjected to any chemical treatment.

Besides this, Internationally like for other foods and drugs, 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, 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.

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: Bottled water containing not less than 250 parts per million total

dissolved solids may be labeled as mineral water. Mineral water is distinguished from other

types of bottled water by its constant level and relative proportions of mineral and trace

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elements at the point of emergence from the source. No minerals can be added to this

product.

Purified water: Water that has been produced by distillation, de-ionization, reverse

osmosis or other suitable processes.

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. (PS:

soda water, tonic water etc. are not considered bottled waters as they contain sugar &

calories and are considered soft drinks.)

Spring water: Bottled water derived from an underground formation from which water

flows naturally to the surface of the earth. Spring water must be collected only at the spring

or through a borehole tapping the underground formation finding the spring. There must be

a natural force causing the water to flow to the surface through a natural orifice.

Well Water: Bottled water from a hole bored, drilled or otherwise constructed in the

ground that taps the water of an aquifer (a water-bearing underground layer of rock or

sand).

INTERNATIONAL SCENARIO:

In United States, the bottled water industry is regulated on four levels: federal (by the U.S.

Food and Drug Administration as a food product), state, industry association, and

individual company. EPA (Environment Protection Agency) regulates public water

systems. FDA regulates bottled water that crosses state lines.

Overall different players are playing different tunes in order to establish their brands in the

market.

INDIAN SCENARIO:

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In 1967 Bisleri set up a bottling plant for manufacturing and marketing its mineral water

but failed. The brand was later sold off to Parle in 1968-69. 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. 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. The market remained dormant for quite long (for a period of 20 years or so).

The market through out this period was formed only by the premium products that too

available through 5-star hotels. In early 1990s with onset of liberalization policy by the

Indian government, coming in of cola majors, sell off of local soft drink brands of Campa,

Thumps up, Gold Spot etc by Parle to Coke and other factors led Bisleri to test waters

again. Bisleri re-launched its bottled water in 1994. By this time with exposure of media

and exposure to international life styles, deteriorating levels of potable water, increase in a

number of water borne cases, increase in awareness about health and hygiene and other

related factors led to acceptability of concept of mineral water. 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.

Moreover with this commodity being a human necessity it makes best sense to do business

in. 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), the business opportunity is

humongous and the potential is largely untapped. These facts about water added to the

growing number of cases of water borne diseases, increasing water pollution, increasing

urbanization, increasing scarcity of pure and safe water etc. have made the bottled water

business quite lucrative. 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. 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

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non-compliers. Infact one of the major factor for flourishing of the sector is the public fear

that water supplied by civic bodies is impure.

PLAYERS :

PepsiCo: Pepsi has AquaFina brand of mineral water in the market. 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, that too 750ml. Though the

company is present only in selected market as of now, it has plans of increasing share in the

market by expanding its SKUs portfolio as well as its distribution reach.

Coca-Cola: The company has entered in the business in May'00 through its brand, Kinley.

The Kinley brand is already being used for its soda water. The company has tied up with

Kothari Beverages, of Yes brand of mineral water, for manufacturing coke's brand at Yes'

facilities.

Bailley: The brand is a product of Parle Agro, the company of Frooti fame. The company

presently is the second largest player in the market with share of 20%. The company has

recently extended its Bailley brand name for its soda water. It is also credited with forming

a new segment of 330ml SKU in the market.

Bisleri: The brand is a product of Parle International and presently is the market leader

with more than 45% market share. The company pioneered the concept of bottled water in

the Indian market as early as 1967. The company is also credited with SKUs of 500ml, 1.2

lts, 1.5 lts and 2 lts in the Indian market.

Other players in the market with strong regional presence are: Brilliant, Yes, Hello, Purette,

Fountain, Himalayan, Golden Eagle, Prime, Pure Natural Aqua, Ganga, Florida, Metro etc.

Market categorization

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The market initially had only one SKU of 1 litre this was followed a by a number of

smaller and bigger SKUs. 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. Some of the

most consumed SKUs in retail market are 500ml, 1 litre, 1.2 litre, 1.5 litres, 2 litres, and 5

litres. Recently Bailley has launched 330ml pack targeted against 330ml pack size of soft

drinks especially the aluminum-can drinkers.

The institution market is largely constituted by hotel industry, caterers, offices,

parties, travel, tourism, hospitals etc. 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, Evian of Danone group; Perrier and San-Pellegrino of Nestle belong to

super premium category. Catch, Himalayan, Brilliant etc. belong to premium local natural

mineral water category. All other brands like Bisleri, Bailley, Kinley, AquaFina etc. belong

to popular or plain bottled water category.

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

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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

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CASE STUDY: BAILLEY

In 1993,when Prakash Chauhans Parle Agro entered the mineral water market with

its brand, Bailley, market with its brand, Bailley, market analysts thought it fit to keep their

fingers crossed about its prospects. For one, the concept of bottled mineral water was not

well established, with usage restricted to foreign tourists and jet-setting Indians. On the

other, for whatever the market was worth, it was firmly within the strange hold of Bisleri,

owned by brother Ramesh Chauhans Parle Exports. In the 3.5 million case market

(estimated at Rs 36 crore), Bisleri enjoyed a clear first-mover advantage and was on its way

to assume the generic brand status.

For Prakash Chauhan, however, the market presented a very clear opportunity.

Parle Agro already had two well-entrenched brand in its portfolio, Frooty and Appy, which

occupied leadership positions in the tetra packed fruit drinks market with a combined share

of over 90 %. 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. Second, with very little investment required in terms of technology

or infrastructure, the entry barriers were not very difficult to overcome.

However, as a new entrant, Bailleys task was formidable. Through the 1970s and

1980s, the mineral water category was a virtual shell, with only a handful of players

catering to the sporadic demands of an equally small audience comprising travelers and a

few affluent consumers. According to some estimates, travelers then, accounted for 80 %

of sales volume back. Research corroborated the fact that people associated the

consumption of mineral water with foreign tourists, who were wary of consuming

contaminated water. But for the average traveler, 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 noclear need. Instead, most travelers carried their own water bottles. In any case, even though

the concept of filters had made its way into peoples homes, the idea of carrying hygienic

drinking water outside of home was accorded very low priority. Instead, travelers were

quite content to consume tap water at railway stations or restaurants located near bus stops.

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The biggest barrier was the high recall that Bisleri enjoyed. So much so that

consumers who went to buy mineral water would actually walk up to the retail counter and

say EkBisleriDena ( Give me a bottle of Bisleri) . Or even when the consumer ask for

a particular mineral water brand, the retailer would fish out which ever brand he had in

stock and hand it over to the consumer. In essence, brand awareness was low and, apart

from localized competition, the small size of the market did not grant enough space for

another national player to join the fray.

To thrive in such a scenario, the company had to expand the market. Here, new

entrants & relatively smaller players were at a disadvantage because freight costs claimed a

large part of the operating expenses. At times, as high as 30-40% of the total cost.

Maintaining an efficient delivery system required both high volumes & investment in

infrastructure. But ranking in volumes in a category where the scope for brand

differentiation was low presented another formidable entry barrier.

Despite these barriers, when Parle Agro began exploring the market in detail, it

realized that with increasing health consciousness, the market was poised for a take-off.

Added to that was the prospect of increasing tourist traffic both domestic & foreign. But

the existing capacities were not quite enough to service the steadily increasing demand.

Since Parle Exports Bisleri was so strongly identified with the category, Parle

Agro took great care to brand its new product carefully. Without being radically different,

the company chose a name that was slightly Anglicized ( a la Bailleys Irish cream ) to

project a more up market image. The company also figured that consumers took a little

more time to articulate the name, which, in turn, made sure that recalling the name would

be so much easier. But more than just the brand name, the company realized that to

penetrate the market effectively, an efficient distribution system & competitive freight

costs were important.

Bailley had learnt important lessons from the Bisleri experiment. Parle Exports

distribution system started out with its bottling plant in Mumbai. Later, it went ahead &

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added 11 more franchisees, which had their own bottling plants in the metros & a few

mini- metros. While this restricted the spread, it also resulted in a lopsided cost structure

because the freight & handling costs to service the interior markets sufficiently proved

prohibitive.

Parle Agro had a very clear gameplan from the beginning. One thing was clear:

distribution was the key to success. Mineral water being a logistics business & a

voluminous item, transportation was expensive. Therefore, it was essential to locate plants

across the country. But that was expensive proposition. Also, differing sales tax, excise &

octroi rates across states makes it difficult to have uniform national pricing. A network of

franchisees that was the only way things would work.

Parle Agro established franchisees near the markets that it intended to attack. This

meant that they had to limit their focus to only a few markets initially. But that was fine for

the company, as long as the freight cost was kept to barest minimum. This structure also

ensured that Bailley had shorter replenishment cycles & lower inventories at the plants.

While Bisleri reverted to the same route later, Parle Agro simply doubled the number of

franchisees. This allowed Bailley to penetrate the market quickly. All these franchisees

were expected to set up PET bottle manufacturing facilities at the bottling plant as well.

This was because packaging costs bottle, pilfer-proof cap & so on made up some 40% of

the total costs. This also did away with the uncertainty of bottle supply.

Parle Agro also decided to differentiate Bailley in terms of bottle design, since there

was very little scope of differentiation in the product itself. Mineral water bottles,

irrespective of which brand it is, are made through the process of blow moulding. Since the

perform supplier of all these bottles was the same, all the mineral water brands available in

the market had an identical bottle design. To stand out, Parle Agro decided to standardize

the perform & cap designs for Bailley. The company set up a perform plant at Silvassa,

which produces these moulds from PET granules which it buys from Reliance. These

moulds, which are small test-tube like structures, are then sent to the bottling facilities

where they are blown, filled & dispatched.

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was quite well established in the metros & such low-volume fringe markets were of very

little interests to the company. Moreover, at the time, 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.

After the task of cracking the market open was through, Parle Agro devoted all its

energies to exploit the non-traditional routes of increasing distribution width. It tried up

with various long distance bus operators who kept stocks of Bailley on board. A small

incentive was given to bus operators & conductors to push the brands. The company also

sought out restaurants or dhabas on Mumbai-Pune & Nasik-Pune route, which had been

neglected by the other players. The company encouraged the stockists to service these

outlets- especially restaurants at which buses made their day or nighttime 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 wasnt 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 Bisleris 45%) with its persistent attempts to crack the areas

that the leader wouldnt dare.

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The companys 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 hasnt 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 Bailleys 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 franchisees

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

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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 hasnt 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.

While new players are making a beeline for this industry every day, hygiene

continues to be the main plank of most brands. Worldwide, mineral water stands for water

fortified with genuine minerals. However, its different in India, since the Bureau of Indian

standards hasnt laid down any specifications. So what is predominantly available is

purified water. Even techniques such as ozonisation & reverse osmosis are used only by a

handful.

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Reason for failure of Branded Commodity

A number of reasons can be attributed to the success of a brand. However, the same

cannot be said for the failure of a brand in the market place. Often, the reason may

could be as simple & mundane asi) Unattractive packaging,

ii) Improper naming of the brand,

iii) Bad product quality,

iv) Marketers not being able to understand the core needs of the consumer

properly.

Still serious lapses, which are attributed for failures, are

i) Inadequate differentiation or me-too syndrome The most common

reason for failure is that the marketers launch products, which are, simply clones of

brands already in the market. These new products failed to stand out in crowd. In fact,

often lack of imagination prevents marketers to create a significant difference with

the existing options. For example Nirma Bath was launched a few years ago in

competition of lifebuoy. The brand was just me-too offering & had nothing new to

offer to consumer & attempted to cash in on run-away success ofNirma Washing

Powder which had stormed the Indian detergent market.

ii) Price convenience equation. Many new packaged food products come

into market on convenience platform. That is, the consumer can get rid of some

tedious chores simply by paying little more price for the product. The point to

calculate here is, just how much will a customer pay for the product. The point to

calculate here is, just how much will a customer pay for the convenience. If theconvenience-price ratio is not right, the new product has little chance to succeed.

All Seasons Foods Package chatni &sambars failed as a result of getting this

convenience-price ratio wrong. The basic idea behind the chatni & sambhars was right. All

Seasons calculated that housewives would be only too glad to snap up packaged sambars &

chatnis if a company with good credentials sold them.

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The company bought a state-of-the-art plant from US to produce the proper

quality & taste. But the product failed to take off. The reason: the products were

prohibitively priced. A chatni bottle half the size of a ketch-up bottle cost twice as much.

For most housewives, that did not make any sense. A tomato ketch-up took hours to

prepare, & most housewives were only too glad to get it in packaged form. A sambar or

chatni required far less effort to cook, & paying a premium for a bottled version was really

worth the effort.

iii) Positioning. 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, it did not succeed. The problem was that it was never clearly communicated

what the yogurt was all about. The advertising projected it as a superior form of curd,

but consumers mistook it as a novel form of ice cream. The Milkfood name (associated

with icecream) was there on packaging as large as life. The yogurt cost Rs. 5.50 & Rs

6.50 for different variants (against a Vanilla cup of same size which came for Rs 4).

The end result was that the consumer refused to pay the premium. Prices were slashed

to Rs. 5, but it did not help.

iv) Distribution Channel. Another major reason why new products often fail in the

market is improper understanding of the distribution channel. A manufacturer often

chooses distribution channel which he is familiar with- not one which is suited for the

product.

For example Ruffles Chips. Pepsis Ruffles chips also failed due to lack of

distribution support. Pepsi could not convenience to distributors to carry this product

through. While their soft drinks could hold out, their chips got crushed & mangled.

iv) Improper Pricing. Success of a new brand depends to a large extent on initial

price setting. The popular saying that one must get value for ones money,

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because when the consumer has inclination to buy new offering, there should be

a clear benefits.

Some other reasons :-

1 Lack of Differential Advantage Products fail when customers do not perceive

them as better value than existing options.

2Too Slow Development. Speed of entry or design of new products is essential in the

changing market where technology is readily available.

3 Poor Planning. Error in judgement about target market/segment, in accurate

positioning often misses the opportunities.

4. Lack of Management Enthusiasm. Management is, at times, complacent &

avoids entry into new area.

5. Lack of Organizations Expertise. Managing new products may call for

expertise, which an organization may sometimes lack.

6. Assigning inadequate resources to market development.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.

7. Lack of Genuine Superiority. Ifa new product is merely & imitation of existing

product, but claims superiority with which the consumers do not quite agree, the product

will fail sooner or later.

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8. Under Estimating The Competition. Underestimation of competitors

capabilities & possible reactions is at times the cause of product failure. If the product

launch is based on a lower cost of production & the assurance of good channel support. It

may face its match by competitors.

9. Poor market Research. The wrong reading of consumers mind & arriving at an

optimistic forecast of market demand is sometimes the reason for product failure.

10. Poor timing of Launch. Too early or too late an entry into the market is also a

common cause of failure.

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SUGGESTIONS

1 Rural market. Knowing the huge size of rural population of India it is natural that the

rural market is attractive to marketers. Company should study purchasing power, life styles

, buying habits , optimal usage level. Brooke Bond for instance could capture the crux of

the challenge when they started marketing Re 1 tea packets.

2 Understanding role of children . Marketers should study the role of children in buying

decision as influencers and decision makers. How ever, 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, marketers will begradually disillusioned with the method. 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.

3 Distribution. 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. One solution is joint distribution or by adopting direct marketing

4. Packing. With self-shopping gaining grounds and selfspace getting limited, packaging

becomes an important factor that marketers have to be concern about. Companies should

identify the requirements and pack commodities according to demand.

5 Customer service challenge. In an increasingly competitive market, retention of a

customer is possible only through better service. Marketers will require to devote to more

efforts to understand the customer view of quality and convenience. Marketers should do

regular research to find this fact.

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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.

7 Creativity and innovation in overall marketing programmes. Marketers have to

develop organizational structure style and functioning, which enable them to act fast and

bring in innovations in their marketing programmes

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BIBLIOGRAPHY

Product Management In India : Ramanuj Majumdar

Marketing Management :Philip Kotler

Sales & Marketing Management ( Magazine )

A & M (Magazine)

Brand Positioning : Subroto Sen Gupta

Whats In a Brand : John Philip Jones

Building Strong Brands: David A.Aaker

Branding and It’s Impact on Commodity Products

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