Indian Institute of Management Kozhikode

Spick & Span Ltd

Case Analysis Group VI

MEEMANSA VAJPAYEE PGP/14/095

AYUSHI AGRAWAL PGP/14/141

PUNYATA TULI PGP/14/167

MANGESH PATIL PGP/14/217

ARJUN RAO PGP/14/267

MAHTAAB KAJLA PGP/14/280

Agenda

Situation Analysis

Problem Statement & Issues

Shoe Polish A low Involvement Product

Points of Parity & Points of Difference

Recommendations

Q&A

Product Policy & Brand Management| Case Analysis

Introduction

Spick & Span Ltd

A public limited company; headquarters situated in Lucknow Product portfolio includes: antiseptic products, cleaning products, shoe polish, aspirin etc; Highly profitable company with an expected growth rate of 25% - 30% per annum Happy shareholders (Dividends!!!) Portfolio of established brands which are market leader in respective categories

Shoe Polish Market

3

Size 50 crores Growth rate 10% Market leader Li Chi by Spick & Span with a share of 70-80% Li Chi - Wide distribution network and effective advertising Second brand 7-8% market share Carried by grocery stores, general stores, large shoe retail outlets
Product Policy & Brand Management| Case Analysis

Introduction

Margins

High turnover grocery shop 6% General stores 10-12% Small stores 1-2 dozen pieces/month Grocery stores 2-4 dozen/month Cuckoo international brand Focus on trade promotions discounts to dealers, gifts, schemes, incentives for display Less advertising budget than Li Chi in 1993 Gained 3-4% market share at the expense of Li Chi
Product Policy & Brand Management| Case Analysis

Sales

Competition for Li Chi

Problem Statement and Issues

To prevent the erosion of Li Chis market share and to attain the expected growth rate of 25-30% per annum

Product quality is not noticeable

Aggressive trade promotions by competitor

Increased brand awareness of competitors product

Product Policy & Brand Management| Case Analysis

Shoe Polish A low Involvement Product

Customer Purchase Motivation

Lack of perceived differences among brands in this category Consumers unmotivated about the choice process Product quality is difficult to judge Consumers generally tend to use Heuristic or shortcut to make their decisions Consumers generally end up choosing brand they are most familiar with

Consumer Purchase Ability

Implication

Brand awareness is of utmost importance to increase brand recognition and Brand Recall
Product Policy & Brand Management| Case Analysis

Points of Parity & Points of Difference

Equal prices

Points of Parity

Similar result on application

Margins of about 12%

Similar product line (Exhibit 1)

Product Policy & Brand Management| Case Analysis

Points of Parity & Points of Difference

Attributes

Li Chi
High

Cuckoo
Comparatively Low

Points of Difference

Product Quality

Market Presence
Foothold Focus Distribution network

National presence
Market Leader Advertising Strong

Foreign presence
Small Player Trade Promotion Relatively weak

Collusions

Bata carrying their products

No collusions as of now

Product Policy & Brand Management| Case Analysis

Recommendations

Brand Building

Li Chi is already strong in the salience, performance and judgment aspects of the brand equity pyramid. Through its advertisements, it can reinforce intangible aspects of brand imagery like personality, values, user profiles Demographics based imagery building can be employed The dimension of feelings of the brand building pyramid can be emphasized by conveying a sense of social approval, self respect and security through the ads. As of now Fun type of brand building is associated Brand Resonance Behavioral loyalty is the prime category one should be looking at repeat purchases and large volume sales . Customer based brand equity pyramid

Product Policy & Brand Management| Case Analysis

Recommendations

Brand Awareness

Shoe polish is a low involvement product. Customer purchase motivation is low because there is hardly any perceived difference between Li Chi and Cuckoo. Therefore, maintaining advertising at the same level to have a minimum brand awareness is critical here. A move away from the English comedian ad required since it does not portray any kind of quality associated with the brand Increasing the exposure of the product by innovative use of shoe polish tin holders in retail stores

Li Chis association with Bata shoes should be highlighted through the ads to create a positive and strong brand association as Bata is a trusted and widely used brand
10 Product Policy & Brand Management| Case Analysis

Recommendations

In the southern region where Li Chi gets a low rating in brand awareness, the dealer discounts or commissions can be made variable i.e. based on sales. It can give non financial incentives to its dealers. Li Chi has strong distribution even in areas with low population density. This ability to reach remote consumers must be exploited in Southern regions of country to compete against Cuckoo which is a major player in south but has a relatively weak distribution network. Product based differentiation needs to be made by releasing new varieties to suit consumer needs
11 Product Policy & Brand Management| Case Analysis

Q&A

12

Product Policy & Brand Management| Case Analysis