Indian Agarbatti Time for makeover

Distribution Margins low

Hurdles to growth

Unorganized sector. Low profitability. Improper distribution. Lack of government support. Less promotion as compared to mass products.

Incense Industry

The size of the incense industry is about Rs 1000 crore a year growing at 7% per annum Exports Rs 300 crore.

Current industry consumer spends estimated at over 100 crore p.a.

Use of incense , India worship overseas ambiance / aroma therapy

Fragmented supply base arising from small scale industry

Indian incense market supplies up to 60 % of the world incense market Assam, Tripura and eastern India presently supplies sticks to the rest of the country.

Companies / Key players

ITCS MANGALDEEP Superior fragrance experiences based on research. Fragrances approved by IFRA, Geneva. Consistently superior product experience. Systematic quality management approach. ISO certified vendors. Attractive and functional packaging.

Sudarshan Dhoop

Was founded by Mr. K.N. Kesari way back in the year 1952. The companys Managing Director Mr. Manoj Kesari and Joint Director Ms. Jyoti Kesari are responsible for marketing and export business. 300 fragrances. Products Incense sticks, Coils Natural Agarbatti and Garden Sticks. Production- 3 million sticks per day. Annual turn over 5 crores, 50 employees.

N Ranga Rao & Sons

Cycle Agarbatti is one of the worlds largest manufacturer of Devotional incense sticks. Many people in India are illiterate. They recognize the brand by the by cycle picture. Mysore based company. Cycle has established its self in the market with some good marketing campaign with emphasis on quality and fragrance.

Cycles positioning

Cycle was positioned as the premium agarbatti brand. The brand was trying to differentiate by good packaging, marketing campaign and quality.

Cycle 3 in 1 the most popular has three different fragrances in one pack.
Many schemes such as natures gift brand has been introduced. Its market share is expected to grow.

CYCLE AGARBATTI
CYCLE AGARBATTI MARKET SHARE
MARKET SHARE OF 15%

PREMIUM AGARBATTI BRAND

Mahendra Perfumery works

Year of establishment 1961 Export markets South east and Middle east. Export percentage 20 % Product range Arali flower insence sticks Mogra Insence sticks Rose insence sticks Champa agarbatti

Other Competitiors

Hari Darshan Sevashram Pvt. Ltd. Nandi. Onam.

These companies also provide Agarbattis in various different fragrances.

ITCS MANGALDEEP

Incorporated first time on 24th August 1910 under the name Imperial Tobacco Company of India. In 2003 ITC entered the market of Incense sticks. The size of the incense sticks industry in India about Rs 1000 crores a year. ITC aims to achieve a leadership position in the agarbattis industry in the next couple of years.

About Mangaldeep

Mangaldeep is also available in 3 in 1 and 5 in 1 packs giving consumers choice of fragrances in single pack. Pricing the pricing is appropriate to appeal to cross section of consumers at various price segments. ITC's product development strategy will always closely dovetail into consumer needs. One recent example is the launch of 'MangaldeepMadhur' priced at Rs two for 10 sticks. These agarbattis are available in fragrance

locking packs Completing the purity of Prayer

GOAL

To make new innovative products based on R & D cashing on their marketing and distribution. ITC has also entered into an MOU with Khadi and village industries commission to source Agarbattis from KIVC approved units and distribute to outlets across country. Thus rural profits can increase.

4 PS - Mangaldeep

ProductPrice Place Promotion

4 PS

Mangaldeep Strategies
BELOW THE GROUND MARKETING STRATEGY
=
CONDUCTED LARGEST SAMPLING EVER IN INDIA BY MANGAL DEEP AGARBATTI

Mangaldeep Positioning

The creation of innovative packing solutions offer consumers high quality Agarbatti. Mangaldeep Agarbatti are available in wide range of fragrances like Rose, Jasmine, Sandalwood, Madhur, Durbar, Tarangini.

The premium range of ITC Mangaldeep Spriha has two offerings- Pratiti and Sarvatra.

Distribution

MANGAL DEEP USES THE 4 TIER DISTRIBUTON NETWORK In a business context, the contribution of Mangaldeep agarbattis to ITCs turnover is a trifling Rs 40 crore to the companys net sales of Rs 13,000 crore. However, the business is growing and is profitable.

Relative Market Share High High Market Growth Rate Cash Generation Low

STAR Hotels, papers, Agri business Cash Cow Cigarettes, FMCG

??? Agarbatti, Cloths

Dogs Infotech

Cash Usage

Low

MEIN NUMBER ONE

Mangaldeep is a close competitor to Cycle in this unorganized market. Even though having a big Daddy ITC its market share is merger at 5% whereas cycle enjoys at 15 % dominance. The others are scattered and unorganized.

Problems faced by Mangaldeep

People lack brand loyalty when the purchase agarbattis. Buy which ever is available. Lack of awareness of Mangaldeep Buy whenever schemes are introduced. Shifting from Mangaldeep to Cycle or other brands.

Purchase of Mangaldeep

Research carried on by ITC says that the purchase of Mangaldeep is dependent on the age of the customer. That indicates a strong need to differentiate.

The introduction of schemes with increase number of sticks in the pack leads to more purchase.

BRAND MANGALDEEP ?

Since the awareness a prime factor for consumers to have recall and recognition but it lacks in case of Mangaldeep. ITC being linked to Mangaldeep is also not known by people who purchase it.

STP
SEGMENTATION

TARGETING Targeted towards religious people and religious ceremonies as a token of worship only.
POSITIONING

Consumer demographics (house wives, villagers, religious people and pandits etc) Consumers geographic location(rural area) Consumer lifestyles (middle class, lower middle class) Behavioral characteristics (usage occasions)

These agarbattis are available in innovative

Fragrance-Locked Completing the Purity of Prayer

Statistics
Agarbattis Cycle agarbattis ITC Mangaldeep Local 20 sticks Nandi Padmini Stick per pack 35 24 20 33 36 Price per pack 12 8 10 14 16

Parimal mandir
Shanti niketan

24
12

11
5

Contd..

Description Sales units sticks Sales units in packs

Cycle 1558.6

Mangaldeep 530.9

44.6

22.5

Cycle vs. Mangaldeep

Research shows that people who buy cycle are the ones who are aware of the brand. Lesser awareness of Cycle more is the purchase of Mangaldeep.

When there are better schemes offered more purchase will be made for Mangaldeep.
Fragrance has no effect on the buying pattern

Suggestions

As Mangaldeep is subdued for a while post launch in gaining market share. There is a need for a point of differentiation from its competitors as it is following the Band Wagon policy(following d leader) till now. The segmentation, the communication strategy and the positioning need a change.

The brand should feel different.

As lack of awareness is the major problem the solution would be intensive promotions to increase the recall and recognition. To make buyers more loyal to the brand.

Give discounts and offers. For e.g.. If you give a coupon inside the pack of Agarbatti, if ten coupons are collected one pack can be given free or special gifts.

Brand Proliferation

Introduce products with a lot of variety that will give buyer more choice. Distribution innovation- a new channel of distribution should be selected so that the product reaches them easily. E.g.. Offer sample packs to all outlets so that product gains awareness.

Strategies for better tomorrow

Export houses State Sponsored Melas / Promotion. Understanding consumer needs New fragrances for capturing global market

Thank you
Netra Inamdar - 77 Zoya manekia 84 Niharika Gabba Monaz Bhadha-64 Dhwani Thakkar - 114 Rashmi Unny - 116