Spick & Span Ltd Case Analysis
Group VI
Indian Institute of Management Kozhikode
MEEMANSA VAJPAYEE AYUSHI AGRAWAL PUNYATA TULI MANGESH PATIL ARJUN RAO MAHTAAB KAJLA PGP/14/095 PGP/14/141 PGP/14/167 PGP/14/217 PGP/14/267 PGP/14/280
Agenda
2
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 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
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Introduction
Margins High turnover grocery shop – 6%
General stores – 10-12%
Sales Small stores – 1-2 dozen pieces/month
Grocery stores – 2-4 dozen/month
Competition for Li Chi 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
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Problem Statement and Issues
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To prevent the erosion of Li Chi’s 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 competitor’s product
Shoe Polish – A low Involvement Product
Customer Purchase Motivation Lack of perceived differences among brands in this category
Consumers unmotivated about the choice process
Consumer Purchase Ability 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
Implication Brand awareness is of utmost importance to increase brand
recognition and Brand Recall
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Points of Parity & Points of Difference
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Poin
ts o
f Pa
rity
Equal prices
Similar result on application
Margins of about 12%
Similar product line (Exhibit 1)
Points of Parity & Points of Difference
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Poin
ts o
f D
iffe
ren
ce
Attributes Li Chi Cuckoo
Product Quality High Comparatively Low
Market Presence National presence Foreign presence
Foothold Market Leader Small Player
Focus Advertising Trade Promotion
Distribution network Strong Relatively weak
Collusions Bata carrying their products
No collusions as of now
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 .
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Customer based brand equity pyramid
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 Chi’s 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
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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
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Q & A
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