Case analysis of Spice rush Go to market Strategy

Distribution and supply chain management

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

Navpreet Singh Randhawa 1627722

SUBMITTED TO

Prof. Suresh A
Q4-Considering the various distributing channel and stake holders elucidate the pricing
strategy for each category and SKU.

Since this product is a FMCG product that is functional in nature so in this category of
product consumer are not much price sensitive but channel members are more of margin
sensitive. As we are entering new in the market the pricing has to be the biggest factor
of concern that has to be aligned with the channel/Distribution members in order to
achieve target estimated. We will be giving 20% margin to the Distributor and retailers
will get margin somewhere between 10-12% which will gain depend on the negotiation
between distributor and retailer. Giving 20% margin to the distributor will lead to
increase in ZOPA for channel member. We will attract retailers by giving them
schemes and incentive on the volume sales, since this is not value driven product. Due
to high retailers margin we also create some room for him to give product at a cost-
effective price in order to achieve his sales. Our SKU size will be inversely proportional
to the price of product it will help to attract the customer with less brand loyalty.

SKU Chilli Masala Turmeric Coriander Distributors Retailer

powder powder powder powder margin (%) margin
20g - 15 - - 20 10-12
50g 18 28 15 - 20 10-12
100g 35 54 30 36 20 10-12
200g 72 - 55 65 20 10-12
500g 165 - 130 152 20 10-12

These are the prices that will be kept for different kind of SKU in comparison with the
competitor the pricing strategy we used is that we are penetrating in the market with
mid-range of pricing that will be above than the brand like MTR and Everest and will
be less than to that of Aachi and shakti. So, this strategy will help us to push more
product in market by providing high margin to the distributor as compared to the big
brands but then also will be cost effective. The distribution channel kept is really small
which include Manufacturer->Distributor->Retails->customers.
Q5-Brand is central to long term strategy. Do you agree? Please elucidate Advertisement
and Media strategy considering short term and long-term plan.

I do agree that brand is central to long term strategy since none of the business will start
without considering the feasibility and resources available to run in the market and also
the competitor that are present in the market. Long term strategy for any brand help the
brand to build the strong foundation on which the brand name will be running in the
market for long time with some considerable views and actions for the future.

Advertisement plays an important role in making brand awareness and recall since we
are entering in to the market for the first time. As we have already discusses in the first
question that as a part of short term plan and strategy we will consider ATL and BTL
activities as our backbone for standing in the market and try to make some brand
awareness among the customers since due to the available margin retailers and
distributors will already been pushing our product and they will be getting enough shelf
space for any consumer to get attracted so at the same time if they will also get some
visual merchandising and sample display of the brand they will be attracted to try the
brand at least once in order to make them as their like or dislike.

So, in this way we will be able to achieve initial steps od Brand equity index that
include awareness and consideration. As we have already discussed in above question
about our brand pricing and its attributes like Taste, quality etc. will help the
customer to recommend the brand to other also so in this way the loyalty for the brand
will be achieved in customers. So, this way we will develop our BEI in short run.

As a part of long term plan when already the brand is existing in the customer mind
than our strategy will be to make our brand as top of the mind recall brand so to achieve
that we need to do advertisement in regional channel that will cost just 800/- for 30 sec
and also we can do ad in Radio and newspapers with promotional banners. So, in
this way we can achieve economies of scale and breakeven in the long run.