Marketing StrategyCase Study - Dalmia Consumer

Care

INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

TUSHAR GHORPADE

Question & Answer #011

Discuss the marketing strategy followed by the company for launching “Vardaan”

Answer Initially the team discussed the target market as Urban to offer

filtered cigarettes.

Marketing Manager further proposed the Marketing Strategy based on Market Research Study.

1. Focus on Bidi Market – Estimate of Market Rs15000 Cr. Focus on Rural market.

2. Offered in different pricing, sizes, shapes and packaging as per particular region.

3. Customer Centric Focus – Listening to customers and offering superior price/value equation (Not only spend on advertising).

4. Use marketing mix of promotion – Events, fairs, exhibitions, melas.

Question & Answer #01 (Conti..)

Key Success Factors – Resources (Assets & Capabilities) for company to compete in market.

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Strategic Strengths Strategic NecessitiesR&D – Ayurveda Knowledge with modern science to solve health problems like lung diseases, asthma, chronic diseases.

Taste and Pleasure was similar to tobacco cigarette as confirmed by 81% of people surveyed.

Patented – Cigarette using leaves of 8 trees that give pleasure same as of tobacco.

Distribution – To launch nationally the company has to cover 300 cities and 1.5 lac outlets.

Question & Answer #01 (Conti..)

Competitive Advantage – The product should qualify for below 4 points to have Competitive Advantage •Difficult to Mimic – The product is Patented and hence it is difficult to use same ingredients to make similar product.•Unique – It is first of its product in market which is cigarette but does not have harmful effects.•Superior To Competition – It is superior in terms of non-nicotine attributes as well as having competitive pricing region wise.•Applicable to Multiple Situations – It can be used for cigarette and bidi which is major market in India.

Core Competency - •It provides wide variety of smoking markets like bidi, cigarette, pipe, cigars,etc•It doesn’t have nicotine and other harmful chemicals of tobacco (Benefit).•Due to patent it is hard to imitate.

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Question & Answer #02

Do you approve of Market Segmentation & Targeting Strategy? Answer

Yes we approve of Market Segmentation & Target Marketing.Marketing Segmentation is done on basis of –

Table 2 – Age Groups from 12 to 60 years.

Table 3 & 4 – Differentiation of data according to Male and Female.Table 5,6,&7 – Data related to Age, Economic, Social and Habitual

(Psychological Factors) related to smoking.

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Question & Answer #02 (Conti..)Targeting Strategy according to DCC – GATS Report 2010.

Market Focus: Rural Market (Bidi Market)

Distribution: Kirana Shops,Pan Shops which are controlled by wholesalers.

Growth Market: Consumption in India is increasing. AccordingTo research 55,000 are addicted daily.Extensive Market Coverage – Using wholesaler distribution network for national presence in 300 cities.

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Question & Answer #03

What was positioning strategy for “Vardaan”?Answer

BENEFITS:  Advantages that promote the well being of the consumer which in Vardaan is nicotine free which means beneficial. Vardaan is substitute for tobacco cigarette.

Functional Perception & USP – It is trying to create perception of usage of product “Vardaan” which is nicotine free and doesn’t harm health like tobacco.

In 3 different statements MD says 1. “We believe smoking cannot be stopped atleast usage of tobacco can be

stopped” , 2. “My main job in the company is to protect people from the harmful

effects of tobacco”, 3. “It doesn’t contain nicotine. It also doesn’t contain any chemicals and

has no adverse effects on health. It gives…”

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Positioning Suggestion

USER: This deals with positioning a product keeping in mind a specific user or a class of users.

Focus – 40% user Who want to quit. Campaign –Experiential as 81% of People say it tastes & Gives pleasure same as Cigarette.Position Statement – E.g. For all those who are Trapped in addiction of Tobacco smoking. Here Is cigarette that cares for Your life. For People who are willing to give up tobacco but not the smoking

habit

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More Factors To Consider

More focus on Urban Population – According to data Quit Smoking Ratio is more.

The 25% of excise duty applicable on Tabacco Products is not for Vardhaan. Hence Pricing can be kept competitive and the margins can be passed to Wholesalers and Retailers, who will sell more due to higher profit margins.

Push & Pull Campaigns – The Retailers (Panshops & Kirana) will push the sample for free trail. Pull – Smokers will be educated by providing information for benefits of nicotine free smoking (NGO Tie Up)

Pink Power Campaign – Indian Women are on high rise for addition of smoking which are perfect target market, special pink packaging, awareness of specific harm on female health, smokers cough issues, and pre-pregnancy market.

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Thank You9