Its a Milky Way

Case Study:

The scorching summer this year has ensured a strong double-digit growth for soft drink companies. The biggest grosser being the new lemon category where the annual consumption is pegged around Rs. 100 crore. Even while lemon was the flavour of the season, backed by highdecibel advertising by the likes of Coca-Cola India and Parle Agro. For Parle, the non carbonated soft drink category clocked 26% growth this year, the company grew faster than the market, registering a 30% growth. Coca-Cola India, on the other hand, has delivered 15 consecutive quarters of growth, out of which 12 quarters have seen double-digit growth. Coca-Cola India's unit case volume grew by 29%. It involved share gains across key beverage categories --both in sparkling and in stills. According to an independent beverage industry report, close to 120 billion litre of beverages gets consumed in India annually. Industry observers said that 55% of sales of Indian soft drink industry comes during the summer.

Case Study:

This presents a huge window of opportunity to generate maximum growth during the season. The reason beverage majors are focusing on the juices category, is because of the most noticeable trend of a rise in health consciousness among consumers. In the 660-millioncase juice market in India, lemon has emerged as the number one flavour with a 48% share. The lemon drink category presents a huge untapped opportunity. For instance the brand LMN has created a category of its own and not eaten into existing categories. It seems the older generation has started experimenting with products and services traditionally meant for the younger generation. Marketers need to keep tabs on how conscious customers are, in terms of the value they derive from brands. In this competitive market it is clear that customers will pay more for value.

Case Study:

Can a beverage brand give benefits other than quenching thirst? The future is about high quality benefits and price. Coke has announced its entry into Milk based beverages with the product Maaza Milky Delite. It is to test the same for two months in Kolkata before launching it nationally. The product, priced at Rs 15 for a 200-ml pack, would be made available across 3,000 outlets in the city. The company believes, extension of the Maaza franchisee into milk-based beverages will allow them to leverage Maazas goodwill. This is Coca-Colas third fruit-based beverage product after Minute Maid Pulpy Orange and Minute Maid Nimbu Fresh, which it launched in 2007 and 2010, respectively.

Case Study:

While Amul and Britannia also have milk beverages in their portfolio. While 48% of the fruit-based drinks market in India is dominated by Nimbu, the share of mango is estimated to be at 23%. Branded juices have a 4% share of this market. Its estimated that over 2.5 billion unit cases of dairy are consumed in India every year. PepsiCo India has expanded its product portfolio with the launch of Pepsi Max, a sugar-less cola brand with a stronger taste. Targeted at the health-conscious consumers in the 25 to 35 years age group, the cola will initially be available in New Delhi. The branded beverages market in the country is estimated to be Rs10,000 crore.

Case Study:

Britannia Industries dairy division is taking a 2nd shot at the flavoured milk business, which it had entered under the brand name Zip Sip. This time the focus is on products fortified with essential micronutrients. ActiMind, a milk-based drink with seven micronutrients, was launched in Tamil Nadu a few months ago. More recently, Britannia launched TigerZor, a chocolate beverage with five micronutrients, in Hyderabad and Bangalore. The products are being marketed as nutrition-in-a-bottle and priced a little higher than regular flavoured milk brands. The company was not interested in being in the general category, which was already crowded. The company desires a profitable growth for a long time and is not interested in growth at any cost.

Case Study:

The flavoured milk market, estimated at about Rs 250-crore, has brands like Amul Kool, Nestles Milkmaid Funshake, MTR, Yakults probiotic milk and Danones chocolate smoothie Choco Plus, as also many local ones. The value-based milk category has seen a lot of action with low-fat, fortified, soy and probiotic milk variants. Nutrient fortification is a key element of Britannias strategy. Indians in general were not very conscious about what they eat. Nearly 68% of school-going children in India were anaemic, and this figure was agnostic to socio-economic status. Britannia believes that this necessitates putting nutrients into foods that children like, and that there is growing recognition of this.

Case Study:

Britannias dairy business, which also has products like dairy whitener, ultrahigh temperature milk, cheese, butter and ghee, had revenues of Rs 210 crore in the last financial year. It has seen a five-year CAGR of 17% and the same has been 22% in the last two years. The operating margins in the dairy business were higher than in the biscuits business, where it caters also to the mass market with products like the Tiger glucose biscuit.

Should Pepsi look at the move from Coke as an opportunity and enter with a Product (Milk Based) in Competition? If yes suggest a Product Strategy. Or Should Pepsi look at this wonderful opportunity to take on Coke in the carbonated beverages segment aggressively and create a big dent in Market Share? Suggest a Suitable Strategy.

Pepsi:

Pepsi in 2010, invested in a russian milk based giant Wimm-Bill-Dann. Also joined hands with Ben & Jerry to launch a new line of dairy based beverages. Pepsi has confirmed that it would enter in the Indian milk based beverage market and has set up an R&D centre near Gurgaon on the same lines.

Pepsi: Thought Porters 5 Forces

New entrants would be local players. However, can cause damage owing to vast spread network. Bargaining power of buyers would be strong, however, would also pay price for premium drinks

Suppliers are numerous in supply.

Rivalry with Coke, Local players like Amul

Milk based beverages can be differentiated as regular and value added milk based products. As more and more people are getting health conscious, this mist be a threat.

Pepsi:

Traditionally, there are videos and information on the internet that Pepsi can be mixed with milk. Similar videos of coke resemble an eruption. Pepsi, thus, can intend to enter the differentiated brand and be the first launcher of carbonated milk based drink. Also, there are numerous brands in the market which are rich in traditional flavors like Badam, Elaichi, Kesar, Chocolate. Pepsi also has an option to enter into the fruit based milk beverage products, but would be facing its all time rival coke in the segment.

The Brand Coke is synonymous to a Carbonated Drink and caters to a customer base with specific characteristics. Can the company really leverage the brand COKE across Milk Based products against established players like Amul, Britannia etc? Plan a Promotional Strategy for the Brand.

Coke:

Coke would have to conduct a customer experience survey wherein the perception of coke as a milk based brand would have to be evaluated. However, the Minute Maid category has already come to be represented as Cokes non carbonated beverage branch. To keep up with the image of coke as a carbonated drink, it launched its fizzy drink in the US. (trouble for pepsi!!)

Coke:

Since Maaza is already a pretty established brand, it can serve as a good tagline. In fact, Maaza milky delight can be segmented as a health based milk beverage. If so, it can be promoted across local hoardings. Traditionally, carbonated drinks are cool and thus, Maaza is generally uncommon in youngsters. Thus, the milky version can have a target market as grown up adults.

Coke: Marketing Strategy

Extensive advertising to simulate the Milk version. May required free sampling booths at supermarkets. Amul and Britannia are having products which are not fruit based milk beverages. They are simply flavour based beverages. This gives Coke a position of advantage.

Considering that Parle is fighting with Britannia fiercely in the Biscuits segment, should they follow through and up the Ante against Britannia in the Value based Milk Category as well.

Parle - History:

Frooti launched in 1985 still a popular drink Appy launched in 1986 still a popular drink Appy fizz launched in 2005 became popular amongst the young generation

Parle SWOT Analysis (I):

Strengths:

Parle Brand Diversified Product Range Extensive Distribution Network Low & Mid Price Range Catering to Mass Better Understanding of Consumer Psyche Dependence on retailers & Grocery stores Dependence on Parle G

Weaknesses:

Parle SWOT Analysis (II):

Opportunities:

Estimated annual growth of 20% Low Per capita Consumption Changing Consumer preference Increasing demand for sugar free, diet drinks Hike in cost of production due to hike in cost of raw materials Increasing distribution cost Local products Entry of various new Entrants

Threats:

A company which could loose a lot in terms of heightened competition within this market is AMUL. What product strategies relevant to growth would you suggest for AMUL?

Amul: Marketing Mix

Product:

Dairy Products Low Pricing

Pricing:

Place:

Rural Urban International

Advertisements

Promotion:

Amul: Defense Strategy

Moving Consumers from Loose Milk to packaged milk Being exposed to the brand, consumers try out different products

Amul: Staying Ahead

Attack existing players through :

Aggressive Pricing Better Quality Enhanced Distribution Network Strong Marketing Push

ITC wishes to enter the market for Milk Beverages as well. Suggest a suitable Product Portfolio for the company. Explain competition that you anticipate for the products and propose few contingency strategies.

ITC: Product Portfolio

Milk Products:

Strawberry Milk Pineapple Milk Chocolate Milk Butterscotch Milk

Cold Coffee Iced Tea

Lemon Flavour Peach Flavour

ITC: Competition

Amul Nestle Mother Dairy Britannia Nilgiris CavinKare Dairy GRB Dairy CreamLine Dairy Parag Milk Foods Hatsun

ITC: Product Strategy

Price Strategy:

Rs. 17/Attractive Packaging Easy to carry Target the health conscious upper middle class & Gen Y Have give-aways Malls Supermarkets

Product Strategy:

Promotion Strategy:

Place Strategy:

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