Victor India Ltd (VCIL) launched a cocoa-based milk beverage called Victor in 1996 but sales did not meet targets. In 2000, VCIL hired a consultant and implemented a brand-building program to revitalize Victor, but sales were still struggling. Top management was disappointed that only 250 tonnes of Victor were sold that year, below the 500 tonne forecast. They reviewed the brand management plan and its implementation to understand why it did not perform as expected.
Victor India Ltd (VCIL) launched a cocoa-based milk beverage called Victor in 1996 but sales did not meet targets. In 2000, VCIL hired a consultant and implemented a brand-building program to revitalize Victor, but sales were still struggling. Top management was disappointed that only 250 tonnes of Victor were sold that year, below the 500 tonne forecast. They reviewed the brand management plan and its implementation to understand why it did not perform as expected.
Victor India Ltd (VCIL) launched a cocoa-based milk beverage called Victor in 1996 but sales did not meet targets. In 2000, VCIL hired a consultant and implemented a brand-building program to revitalize Victor, but sales were still struggling. Top management was disappointed that only 250 tonnes of Victor were sold that year, below the 500 tonne forecast. They reviewed the brand management plan and its implementation to understand why it did not perform as expected.
describes a situation faced, a decision or action taken by an individual manager
or by an organization at the strategic, functional or operational levels. Victor Brand Simon George Victor India Ltd (VCIL) was established in 1989 as a public limited company for manu- facturing and marketing cocoa-based products, mainly chocolates. The company launched its cocoa-based brown milk beverage brand Victor in 1996 and expected that it would be able to do well in the market against established and aggressive competitors leveraging on the costing and pricing advantage. However, Victor's sales in the initial year could not reach the expected target. In 2000, the company initiated a brand-building programme to revi- talize the brand by making interventions in the brand's attributes, benefits, and package lead- ing to. modifications in positioning. The results were encouraging but the brand was still struggling to break even. The company was reviewing the costing of the product as well as its promotion strategies. The case focuses on the challenges faced by VCIL in its brand- building programme. Simon George is a member of the faculty in the Marketing Area of the T A Pai Management Institute, Manipal. e-mail: simon@mail.tapmi.org Raghavendra, the Managing Director, and Srinivasan, the Executive Director (Marketing) of Victor India Ltd. (VCIL) were wondering as to why their company could sell only 250 tonne of their cocoa-based brown beverage brand Victor Plus. Was it due to the ineffective brand management plan or due to its poor implementation by the company? For the past four hours, they had been part of the team discussing and reviewing the brand manage- ment plan and its implementation proposed by their consultants Elite Consulting Co (ELCC) for the year 2000. Ajay Das of ELCC, who was present in the meeting, had absolute faith in the soundness of his plan proposal. Jayant, the Marketing Manager, and the coordinator for the implementation, cryp- tically commented, "I saw to it that the plan which was recommended was perfectly implemented. Nothing more, nothing less." Prabhu, the Executive Director (Accounts and Finance) sounded positive: "This year will be the start of a turnaround. The performance in 2001 will be much better if we are able to look more closely at the brand's costs and pricing, product ingredients, and a few critical product strategies." VCIL's top management was expecting the year 2000 to bring in a change of fortune for Victor Plus which, in turn, would give a big boost to the sales of their more established chocolate brands. The company thought that they could achieve at least 75 per cent of the forecasted sales of 500 tonne of Victor Plus. But the sales data presented in the review meeting at the end of the year indicated that the performance was not encouraging. However, the company was beginning to show an air of vibrancy and dynamism in the beginning of the year 2000, primarily due to two factors. One, the company roped in a reputed consultant whose knowledge and expertise in marketing, the company hoped, would turn its fortunes for better. Second, the company had appointed Srinivasan as Executive Director (Marketing) a year back who had about 20 years of experience in the industry.
Vol. 27, No. 4, October-December 2002 75 Vikalpa Company Background VCIL was set up in 1989 as a public limited company by the Victor group of companies based in Karnataka. A modern factory was set up in the Chickmagalur district of Karnataka with the aim of processing and marketing cocoa-based products, especially chocolates, at a cost of around Rs 20 crore with high capacities of production. In the nineties, VCIL launched its own brand of chocolates in each of the three categories of chocolates, namely, moul- ded, enrobed, and eclairs, with the intention of taking on the multinational companies (MNCs). Very soon, the company realized that it could not use its production capacities fully as it had a large installed production capacity (Table 1). This forced VCIL to enter into an agreement with a reputed MNC in 1993. Under this agreement which was valid for a period of ten years, VCIL was to manufacture chocolates under the MNC's brand name. The MNC could also source its additional cocoa requirements from VCIL. This arrangement was in addition to manufacturing and marketing of VCIL's own brand of chocolates in all the three categories. The company had a turnover of Rs 35 crore in 2000, with Rs 20 crore coming from sales of its consumer and industrial products and the rest from the pro- cessing charge earned from the MNC. Product Portfolio VCIL had two broad types of products consumer products and industrial products. Consumer prod- ucts consisted of three categories of chocolates, namely, moulded, enrobed, and eclair. Industrial products consisted of semi-processed cocoa at dif- ferent stages of chocolate manufacture. These semi- processed products were sold mainly to organizations as raw material for making various other end products in addition to VCIL's own consumption. The industrial products were cocoa mass, cocoa butter, cocoa powder, and chocolate mass (semi- processed cocoa) and had some established and loyal customers. VCIL had eight brands of chocolates. Moulded chocolates were made out of cocoa butter by melting it and then shaping it using moulds. These chocolates were the bigger multi-bar type chocolates. Enrobed chocolates were single bar chocolates, containing nougat in the centre, coated with a layer of caramel and enrobed with creamy cocoa mass. Eclairs were modified toffees consisting of an outer caramel with a creamy chocolate brown centre or a milky white creamy centre. The company also manufactured and marketed a cocoa-based beverage Victor Plus which came under the consumer products group. Made out of cocoa powder, this was a bye-product of the choco- late manufacturing process and was first launched in the market by the company in January 1996 as Victor. The company felt that it had a price advantage while launching the product in the crowded milk beverage market dominated by big Indian players and MNCs. It also thought that its brand may have better acceptance in the B and C class towns because of the price advantage arising out of its proximity and bargaining power with the farmers for cocoa beans. Moreover, the fixed cost for production was expected to be very low as it would be borne by the chocolates and other industrial products. The first year brought a very modest sales of 95 tonne followed by an increase of 10 per cent in the succeeding years. Manufacturing Process VCIL bought cocoa beans directly from the farmers through one of its sister companies. After clearing, cocoa beans were loaded into a chute having a strainer and then passed into air classifiers wherein particles like stones, etc. were separated out. The beans were then roasted to remove the husk from Table 1: Production Capacities and Utilization in 2000
Cocoa Bean Crushing Cocoa Powder Moulded Chocolate Line Enrobed Chocolate Line Eclair Line Victor Plus 400 1500 1500 1500 1500 1200 8000 Tonne in Two Shifts Three Shifts Three Shifts Three Shifts Three Shifts Three Shifts 1600 450 140 330 180 270
*This does not include the production figures for the MNC. Vol. 27, No. 4, October-December 2002 76 Vikalpa the cocoa nib as well as to reduce the moisture content. The roasted nib was crushed into smaller granules and fed into a vibrating separator that separated the husk from the granules. The granular, neutralized cocoa beans were fed to an electric furnace and crushed further in two stages, viz., coarse milling and fine milling. The resultant product was in the form of a paste and was called cocoa mass. The cocoa mass thus formed consisted of 55 per cent fat. The moisture-free cocoa mass was then passed through a hydraulic press. During this process, the cocoa mass split up into cocoa butter and cocoa cake. The cocoa butter was then deodorized by boiling. The deodorized cocoa butter which was in the form of a semi-liquid state was then filtered, packed as blocks, and cooled. This packed cocoa butter was stored in a cool place, or else it would melt at 37C. Some portion of this cocoa butter was packed and sold in the market to other organizations and the remaining was used by the company for manufacturing chocolates. Cocoa butter was further processed with the addition of required ingredients for preparing chocolates. The cocoa cake was then dried and pulverized to form cocoa powder. While cocoa powder formed the main ingredient for manufacturing Victor, other ingredients like sugar, Vitamin-C, salt, flavour, glucose, and emulsifiers were added in appropriate quantity to the cocoa powder by an automatic mixing machine. This mixing took place in the presence of steam and, finally, the resultant product was whetted to yield small granular or powdery product. The end product was packed and marketed by the company as Victor health beverage. Many of the brands of milk beverage/health beverage present in the market varied in benefits and attributes as a result of the different combination of ingredients added to cocoa powder (Table 2). There are two categories of milk beverages/ health drinks white beverage and brown beverage. Brands such as Bournvita, Nutramul, Boost, Maltova, Milo, and Victor constitute the brown beverage which have about 60-70 per cent of cocoa as their key Table 2: Ingredients of Various Brands Bournvita Horlicks Maltova Viva Boost Complan Milo Victor Nutramul
Wheat Flour Milk Solids Malted Barley Malt Extract Sugar Minerals Vitamins Salt Cocoa Leavening Agent Vegetable Oil Sodium Bicarbonate Potassium Bicarbonate Caramel Beet Root Juice Powder Maltodextrin Added Flavour Glucose/Sucrose Emulsifier I ndi cat es pr esence of i ngr edi ent . Vol. 27, No. 4, October-December 2002 77 Vikalpa ingredient. Others like Horlicks, Complan, and Viva fall under the white beverage category as they have milk solids and malt extract as their key ingredients. The brown beverages are differentiated in a big way by the nutrients which are added to support the health claim (Table 3). There is another very small category of brown beverages called drinking . chocolates. Cadbury's drinking chocolate is the only major player with other small regional players like Eagle, Nilgiris, etc. A few years back, Nestle had launched a drinking chocolate in the market which did not do well. The major ingredient in drinking chocolate is cocoa. In addition to sweetened cocoa powder, it has sugar and some added flavour as ingredients. Cadbury's drinking chocolate is priced at Rs 52 for a 200gm bottle. Drinking chocolate is considered as a snack drink and is preferred with cold milk. This chocolate powder can also be used for making cakes. The Milk Beverage Market The milk beverage/health beverage market is domi- nated by a few players like Smithkline Beecham, Jagjit Industries, Cadbury's India, Nestle, Heinz's, and Amul. The market has grown by 7-8 per cent to become a 90,000 tonne market. Recently, Smith- kline acquired the two brands of Viva and Maltova from Jagjit Industries and added them to its stable of Horlicks and Boost. Cadbury's Bournvita and Nestle's Milo are established brands. Bournvita recently launched a white (malt) variant while Complan launched a brown variant (cocoa-based). Figure 1 shows the market share of established brands. These brands are considered as milk additives which essentially make milk tasty besides providing nutrition. Hence, milk forms the primary base. The largest consumer of these milk beverages is South India with 46 per cent of the country's consumption followed by West with 23 per cent, East with 18 per Figure 1: Market Share of Various Brands WAY THE PIE GOES Table 3: Composition of Nutrients Nutrients (qty in mg in WO gm) Bournvita Horlicks Boost Milo Nutramul Maltova Victor
Vitamin A 950 1333 670 Dat a Not Data Not 50 mg Available Available Vitamin Bl - 2.33 1.05 Vitamin B2 - 2.96 2.67 6.36 Vitamin B6 5.34 3.75 3.33 0.60 Vitamin B12 1.5 1.85 1.67 0.70 Vitamin C 70 148 100 17 Folic Acid 350 370 334 1.0 Niacin 33.5 30 6 Iron 26 25.9 23.6 - Vitamin D 130 Protein 7.0 9.7 Calcium 155 Vol. 27, No. 4, October-December 2002 78 Vikalpa
Milo 3.6% Viva 3.1% cent, and North with 13 per cent. However, consumption of brown beverages is higher in the North and the West than in the South and the East. Households constitute 60 per cent of the total market with the rest constituted by the institution segment. None of the brands has a differentiated product for these two segments. Seventy per cent of the total household consumption is by the high- income group (Table 4). The study conducted by ELCC on households shows that the biggest consumers of milk are in the age group of 6-16 with a family income above Rs 10,000 per month (Table 5). The study also shows that 60 per cent of the high- income households are regular consumers of the beverage. These families on an average consume about 30-40 gm of the product a day. Mothers are the key influencers in brand choice. Children also have a strong say in the brand selection. These beverages are usually added to warm or cold milk. In addition to its use as a tasty and nutritious milk drink, some of the brands (esp ecially brown beverages) are also used as an additive in milk to make it a tasty snack drink in institutional segments like restaurants, canteens, juice parlours, etc. Consumers' evaluation of various attributes and benefits of the product while purchasing milk bev- erages is presented in Table 6. A higher percentage of consumers prefer white beverages over brown beverages. White beverages are used for their thera- peutic benefits while brown beverages are used more for their taste. Brand loyalty is low, except for Horlicks and to some extent Bournvita. Many of the respondents do not consider Victor as a national brand and have not placed it in the consideration set. However, blind taste tests of a few brands have brought out a more positive evaluation towards Victor. Table 4: Number of Households in the High Income Category in India (in lakh) Product Features There were efforts by the company since its launch to upgrade the product. Victor was modified and re- launched as Victor Plus in January 2000 as per the recommendation of ELCC. In addition to the original combination of ingredients of Victor (Tables 2 and 3), nutrients like Vitamin A, Bl, B2, B12 as well as minerals, niacin, and iron were added. At the trial production of Victor Plus,-an attempt was also made to add malt and milk solids. It made the present powdery form a bit more granular as the granular form was found more acceptable to customers than a pure powdery form. However, the company had to give up this idea as addition of milk solids and malt was not possible on a large scale due to the present machinery constraints. Also, addition of a unit of any ingredient (except sugar and glucose) in a 500 gm bottle of Victor increased the cost by 50 paise to 1 rupee. Nevertheless, some of the ingredients were not considered for addition due to their incompatibility and machinery constraints. \ Victor was packed in a round plain 500gm pet bottle and the label had a colour combination of blue, white, yellow, brown, red, pink, and black. Victor Plus was packed in the same pet bottle, but with a new label and the colour combination was changed to maroon, blue, yellow, red, and white. The front side of the bottle on the label had Victor and Plus written in maroon letters in an yellow background. 'DrinK was written on one side and ''with milk'on the other side of Victor Plus in maroon letters. VCIL was written in red letters inside the yellow heart in a blue background. The nutritious and tasty cocoa health drink was written in maroon letters with white border in the blue background. The picture of a boy and a girl holding a trophy up was placed Table 5: Consumption of Milk Beverage: Age-wise and Income-wise
High Income Rural High Income Urban Households for All Income Regions Year 93-94 98-99 93-94 98-99 93-94 98-99 North 7.14 7.35 6.90 7.40 459.59 495.30 South 1.97 2.42 4.26 5.10 415.01 455.40 East 4.26 4.56 7.07 7.25 320.61 391.55 West 7.07 7.45 4.49 5.30 377.98 423.50 Total 20.44 21.78 22.72 25.05 1573.19 1765.75 Note: * High income group consists of households with a family income above Rs 8, 000 per month.
Age (years) % which Consume Daily Monthly Income (Rs '000) Percentage of Households which Consume Regularly 6-8 74 8-10 45 9-11 79 11-13 51 12-14 66 14-16 58 15-17 37 17-19 60 18-60 26 20-22 66 60 and Above 44 23-25 69 25 and Above 70
Vol. 27, No. 4, October-December 2002 79 Vikalpa Table 6: Evaluation of Brands by Consumers Attributes Weightage of Bournvita Horlicks Victor Boost Complan Milo Nutramul Attributes W
Maltova Viva B
Price 0.20 3.2 3.2 3.5 3.4 3.5 2.8 3.5 3 3.7 Taste 0.25 4 3.2 3.7 3.2 3.7 3 2.9 3.3 3.7 Nutrition 0.30 3.5 4 3.7 3 2.1 2.8 4 2.8 3.7 Brand Name 0.10 4.1 4.1 3.3 3.4 2.0 3.4 4.5 3 2.7 Packaging 0.05 3.1 3.8 3.7 3.6 2.8 3.8 3.5 4 3.2 Easy t o Mi x 0.10 3.7 4.1 3.6 3.8 3.8 3.6 3.7 3.6 3.4 Weighted Score 2 WB 3.63 3.65 3.59 3.60 2.97 3.04 3.62 3.12 3.52 Total Score 21.6 22.4 21.5 20.4 17.9 19.4 22.1 19.7 20.4 at the left hand corner of the label in a red border frame. The picture was in maroon and blue colour shades (Figure 2). The back side of the bottle on the label had "Victor Plus-Rich taste of nutritious cocoa drink' boldly written in maroon in an yellow background inside an oval space. The additional text matter came on the left and right sides of the oval figure and was written in white in a red background. On the left side of the oval space was written 'The nutritious and tasty health drink plan.' Beneath this was written the benefits and attributes of the product as well as instructions for use. The right side of the oval space was titled 'Richer, tastier instant cocoa drink.' Beneath it was written the details of the ingredients and other mandatory details (Figure 3). Milo pack is predominantly green in colour, while Horlicks is blue, Bournvita is orange, maroon, and purple. Boost is red and orange, Viva is red Figure 2: Front Side of the Label
and white, Nutramul is yellow and brown, Complan is blue and brown, and Maltova is orange and blue. Victor was first positioned as an energy drink. Later, it was promoted as an instant chocolate drink. On the recommendation of the consultants, the positioning statement of Victor Plus was made as 'The tasty and nutritious cocoa drink with milk.' The creative statements of the competing brands are as follows: Boost - Energy boosters ("Boost is the secret of my/our energy") Complan - Complete health drink ("I am a Complan boy/girl") Nutramul - Malted milk food with cocoa Maltova - Extra malt with extra energy Bournvita - Balanced formula drink Milo - Chocolate energy food drink with great taste Horlicks - Nourishing food drink Figure 3: Back Side of the Label Richer tastier instant cocoa drink with milk
Vol. 27, No. 4, October-December 2002 80 Vikalpa The nutritious and tasty health olan
Product Variant for Institution Segment ELCC had also proposed another variant of Victor which would be offered to the institutional segments at a price lower than that of Victor as it had assessed that a demand existed for the product. This would be a less nutritious drink than Victor Plus, but closer to the original Victor. Vegetarian restaurants were considered as good targets. Most of these restaurants were typically 20-40 seaters in A and B class towns, where people consumed a glass of milk along with breakfast. Working people and students were the largest visitors to these restaurants. It was also found that juice parlours used drinking chocolate for mixing it with juices and lassi as it enhanced taste. Though manufacturing this variant was not difficult for VCIL as it incurred very little additional operating costs, its introduction was postponed by the company as the consultants felt that marketing of a new product variant required different distribution and promotion approaches. Distribution System VCIL had about 25,000 active retail outlets spread all over the country. These were retail outlets which mainly stocked and sold their chocolates (Cadburys and Nestle had over 1 lakh active retail outlets). Eighty per cent of VCIL's retail outlets were C and D class, while 15 per cent were B class. The remaining presence was in A class outlets with almost nil presence in A+ class. The chocolates reached the retail outlets through stockists/distributors. The com- pany had about 250 distributors all over India and the product was first transferred from its factory to its 18 Area Sales Offices (ASOs) based on demand/ order. The distributors then took possession of the stock and distributed it to the retailers. In all the ASOs other than in the Southern states, the product went directly to superstockists from the factory who stocked it in their godowns before distributing to distributors. In the Southern states, each ASO had a factory-owned depot which stocked the product. In all cases, the transportation cost from the ASO/ superstockist was borne by the respective distributing entities. Victor Plus was available in only 20 per cent of VCIL's retail outlets. Many of the retailers were not keen to stock Victor Plus, even though they felt that it had a price advantage and an attractive commission policy. A commission of 6 per cent was given to superstockists, 6 per cent to distributors, and 12 per cent to retailers. Most of the other companies offered a commission of 8 per cent to its distributors and 8-10 per cent to its retailers. One retailer's comment was typical and it echoed the views of many retailers: "I feel the brand lacks appeal and visibility and hence may not move. Moreover, I do not think that I have the shelf space to give to Victor as there are a lot of other brands to be displayed. Sorry. Display space is crucial for movement of these products." Each ASO was headed by an Area Sales Manager (ASM) who reported to the Marketing Manager stationed in their corporate office in Bangalore. The Marketing Manager reported to the Executive Director (Marketing). A marketing assistant, who had just completed his management degree, was appointed a year back and was working under the Marketing Manager. Each ASM had three sales representatives (SR) under him, whose territories were clearly demarcated. Most of the SRs got a salary of around Rs 4,000-5,000 and were graduates familiar with the local language. The orders were mainly booked by the distributors and the tasks of the SRs were mainly to supervise distribution and to coordinate between the company and the distribution entities in their territory. They also occasionally collected feedback from the market and attended to complaints by retailers. Each SR was responsible for all VCIL products. The performance of each ASO varied (Table 7). Cost and Price Structure For the purpose of costing, the factory was divided into three main departments, namely, Production, Service Department, and General Department. The following were the fixed costs for the company, including salary, during the year. General Department Service Department Production Department = Rs 261.37 lakh Corporate Office in Bangalore The above costs were in addition to the costs at the ASOs. The company followed a principle of allocating 20 per cent of all the above costs to that of Victor in its price computation. The price of Victor Plus was determined after considering the above costs and the other cost heads (Table 8). The original Victor was priced at Rs 65. Despite adding the extra ingredients, the price of Victor Plus was the lowest in the market (Table 9).
Vol. 27, No. 4, October-December 2002 81 Vikalpa = Rs 77.1 lakh = Rslll.9 lakh = Rs 42.5 lakh Table 7: ASO-wise Product Sales and Costs (Year 2000) Location Sales Quantity Chocolates (tonne) Sales Value Chocolates (Rs lakh) Sales Quantity Victor Plus (tonne) Administrative Costs (Rs lakh) Salary (Rs lakh) Distribution Costs (Rs lakh) Cochin 32.8 41.52 19.50 2.22 4.35 1.49 Calicut 28.04 37.63 19.60 1.07 0.81 1.94 Bangalore 35.55 54.12 26.30 4.09 5.77 5.72 Hubli/Goa 25.48 39.60 21.50 2.67 2.09 1.87 Hyderabad 60.22 78.84 29.00 7.63 4.70 0.42 Madras 23.49 32.89 20.50 0.78 1.42 0.60 Man gal ore 27.23 30.24 21.50 1.34 0.54 1.25 Mumbai 20.15 28.55 12.50 0.31 1.21 8.07 Jammu 5.65 8.30 1.45 0.40 0.23 0.52 Jaipur 34.79 44.72 9.40 3.74 1.20 1.16 Chandigarh 60.38 92.88 16.50 8.49 3.04 3.26 Delhi 78.78 111.68 16.20 12.69 6.83 6.69 Ghaziabad 122.81 162.62 20.50 15.99 2.63 5.98 Indore 3.85 5.39 2.12 0.35 0.72 0.10 Patna 10.5 15.40 2.40 0,53 0.85 0.25 Calcutta 8.96 13.46 3.50 1.56 3.78 4.17 Cuttack 7.66 11.42 1.90 0.81 0.49 0.78 Ahmedabad 30.74 44.18 6.50 1.43 1.0 4.24 Total 617.08 853.44 250.87 66.1 41.68 48.51 Not e: The ASOs at Pat na, Cal cut t a, Cut t ack, and Jammu were opened onl y recent l y. Administrative costs included costs of rent, electricity, water, stationery, etc. Distribution costs included costs of transportation, incentives, regular retail promotion efforts, etc. Promotion VCIL had spent about Rs 8 lakh on advertising and sales promotion in 1999 for Victor. In 2000, the company raised the advertisement budget to Rs 30 lakh. In addition, it decided to spen d on promotion of the brand through events. Though magazines were used by many of the other brands for advertising, VCIL did not use them. Even the television medium was not considered as the tariff was thought to be too prohibitive by the decision makers. The company finally decided to advertise its product in newspapers in the four Southern states of Kerala, Tamil Nadu, Andhra Pradesh, and Karnataka. The advertisements were inserted as 20cm* 6col in colour and in the back pages. One English and one regional language newspaper was selected for each of the states of Kerala, Tamil Nadu, Kar nat aka, and Andhr a Pr adesh. The sel ect ed English newspapers had an average advertisement t ar i f f r at e of Rs 1575/ cm/ col and t he sel ect ed regional newspapers had a tariff rat e of Rs 950/cm/ col for a single insertion (Over and above this rate, the newspapers charged a premium of 25 per cent for advertising in back page and 50 per cent for colour in the regional newspapers and 40 per cent for back page and 50 per cent for colo ur in the English newspapers). The advertisement layout was in some way an extension of the Victor Plus bottle's label design. The punch line of the advertisement was "Be a Victor with Victor Plus the tasty cocoa-bas ed heal t h dr i nk. Dr i nk wi t h mi l k. " The advertisements prominently displayed the picture of a boy and a gi r l hol di ng a t r ophy al of t . The Table 8: Cost Details of a 500 gm Bottle of Victor Plus Cost Heads Material 22.00 Bottle 7.00 Label 2.5 Excise (16% of 65% of MRP) 7.28 Stockist/Wholesaler Commission (6%) 4.2 Retailer Margin (12%of MRP) 8.40
Vol. 27, No. 4, October-December 2002 82 Vikalpa Value (Rs) Table 9: Prices of Competing Brands (500 gm Bottle) Brand Price (Rs) Bournvita Malt 98 Chocolate 97 Horlicks 94 Maltova 92 Viva 89 Boost 93 Complan Neutral 99 Chocolate 145 Milo 89 Nutramul 75 company was also planning to come out with an advertising campaign for the Western and Northern states next year. It was also thinking of advertising through a few popular magazines in the South, West, and North regions. The sales promotion in the Northern and Western states was through sponsored events. The company identified 100 good schools in B class towns and sponsored their cultural and sports events for the year on behalf of Victor Plus. In addition, it distributed prize money and certificates to three best students for their academic excellence costing the company Rs 10,000. Brand-building Programmes of Competitors The leading players in the market frequently under- took brand-building interventions through improve- ments in attributes, benefits, package, advertising, and sales promotion in order to enhance brand equity. The small players found it hard to undertake such frequent brand-building programmes. Brands such as Horlicks and Bournvita have effective brand-building programmes. Bournvita had been rapidly losing its market share to the white segment led by Smithkline Beecham's Horlicks for the last two years. One of the company's managers remarked: "Our brand Bournvita had become a tired brand and needed something new." In 1999, the company repositioned Bournvita on the nutritional plank as it felt that the main reason why the brown drinks segment had been losing steadily to the white drinks segment was because they were positioned as taste enhancers. The consumers responded favourably to this effort and the market share rose up. This was further supported by package modification. Bournvita also sponsors various events like quiz for school children. In 2000, Cadbury India spent 10 per cent on advertisement and 4 per cent on marketing of all their products out of a total sales of Rs 571.14 crore. Boost, with a market share of 10 per cent, also modified its package by adding more colour to the graphics. Moreover, Boost has, over the years, used the celebrity endorsement of Sachin Tendulkar to sustain its market share. The leader of the market, Horlicks, had been relying on nutrition through its heavy advertising targeting the housewife and children. In 2000, Smithkline Beecham spent 7 per cent on advertisement out of a total sales of Rs 903 crore. The Challenge At the end of the discussions, Srinivasan seemed to be more optimistic and confident. He could now clearly see the flaws in the performance of the brand during the year. He was glad that Ajay Das and Jay ant could identify them. He remarked: "Well gentlemen, we are on the right track. I endorse my colleague Prabhu's statement that this year was the start of a turnaround. Let us all accept our short- comings and move forward. Now, I request my colleague Jayant to prepare a new brand manage- ment plan which we can implement quickly in consultation with Ajay (Tables 10 and 11). I would like you to present it in a month's time, i.e., towards the end of March (2001). We would be happy to retain Ajay's services as a consultant till then." Both Jayant and Ajay nodded their heads approvingly.
Vol. 27, No. 4, October-December 2002 83 Vikalpa Table 10: -"Ingredients-Utility Matrix Ingredients Gives Growth Taste Form of Tissues Immunity Digestion Metabolism Energy Possible to Add to Victor Plus Wheat Flour Milk Solids Malted Barley Malt Extract Sugar
4 ' Minerals Vitamins Salt Cocoa Leavening Agent Vegetable oil Sodium Bicarbonate Potassium Bicarbonate Caramel Beet Root Juice Powder Maltodextrin Added Flavour Glucose/Sucrose Emulsifier * The above t abl e was devel oped by Aj ay Das and t he market i ng assi st ant i n March 2001. Indi cat es t hat t he i ngredi ent cont ri but es t o ut i l i t y. ^ Indi cat es t hat t he i ngredi ent can be added t o Vi ct or Pl us. Table 11: *Nutrients Utility Matrix Nutrients Repairs Metabolism Growth Immunity Blood Growth Possible to Damaged of Tissues of Bones ___________ Add to _____________________ Cells ___________________________________________________________________________ Victor Plus Vitamin A V Vitamin Bl Vitamin B2 ^ Viamin B6 / Vitamin B4 ^ Vitamin B12 Vitamin C S Folic Acid . . . ,/ Niacin Iron . / Vitamin D Protein . s Calcium * Developed by Ajay Das and the marketing assistant in March 2001. Indicates that the nutrient contributes to utility. s Indicates that the ingredient can be added to Victor Plus. Vol. 27, No. 4, October-December 2002 84 Vikalpa