VIKALPA • VOLUME 36 • NO 1 • JANUARY - MARCH 2011 103

Case Analysis I

Milan AgnihotriGroup DirectorBrand Planning and InnovationsMcCann Worldgroup Malaysiae-mail: Milan.Agnihotri@mccann.com

Sugar Free as a brand has come a long way in twenty years of its existence. It hastransformed from an ethical brand of sugar substitute for diabetic patients to a

FMHG (fast moving health goods) brand for calorie-conscious, busy, and healthylifestyle-seeking urban dweller. In the journey, the brand has gone through substan-tial changes in packaging and distribution. It has earned undisputed market leader-ship and has gained strong equity amongst consumers, retailers, and health experts(chemists and physicians). With the backing of its financially sound owner, SugarFree is now preparing to enter the next phase of lifecycle where it is up against thebetter featured products as well as the marketing savvy and deep pocketed competi-tors. Stakes are high for Sugar Free due to environment changes in terms of categoryacceptance, evolved consumers, and heightened competitive activities. To deal withthe new reality, Sugar Free has launched a drink variant named D’Lite and is heavilysampling it to dispel myths about artificial sweetener category as well as to generatebrand interaction and trial. On marketing communications front, it is contemplatingto embark upon a new brand endorser strategy and has roped in ‘Bipasha Basu’ – oneof the leading actresses of Indian cinema, known for her fitness consciousness. Bipashahas been signed as the brand ambassador and the lead protagonist in TVC – which isgoing to be fundamentally different from the previous communication platforms. Thenew TVC featuring Bipasha Basu presents Sugar Free as a symbol of health-orientedlifestyle as opposed to the product benefit of lowering the calorie intake, highlighted inall previous communications. As it moves forward, Sugar Free has to carefully evaluateits TVC theme, brand communication strategy, IMC approach, and brand interactionopportunities to leverage its current strengths and exploit the situation in its favour.

The Situation: Where Do We Stand?

With 70 per cent market share, Sugar Free is leading the category in an INR 1.2 billionsugar substitute market (estimated in mid-2000) that is growing at 20 per cent per

Sugar FreePreeta H Vyas

The current issue ofVikalpa has published aCase titled, Sugar Free by

Preeta H Vyas. ThisDiagnoses features

analyses of the case byMilan Agnihotri,

Anita Basalingappa,Sanjay Kumar Kar and

Deepak Bhatt.

presents analyses of themanagement case by

academicians and practitioners

D I A G N O S E S

Note: The views expressed are personal.

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annum. Sugar Free is best positioned to exploit the mar-ket in its favour as it has twin offerings in Asparatame(Sugar Free Gold) and Sucralose (Sugar Free Natura) –two fast growing sub-categories within the sugar substi-tute market. Sugar Free follows an umbrella brandingstrategy, positioning its variants on the basis of primaryusage – table top vs. cooking — and not on product at-tributes.

However, there is a growing competition in both the sub-categories. Brands like Kalorie 1 and Sweetex have en-tered in the Asparatame sub-category. Equal, an existingbrand having Asparatame as main ingredient, is likely toheighten its activities with its marketing rights movingfrom GSK (primarily a pharmaceutical and consumerhealth company) to Heinz (a FMCG company). At thesame time, Alembic is introducing Zero, which is madefrom Sucralose, and has an aggressive marketing com-munication and promotion plan. Zero aims to garner 10per cent market share within one year of its introduction.The launch of SugaRite and Steviocal, based on Steviaplant, is also going to increase noise and activity in thecategory and will add to the consumer vocabulary re-garding the category.

As a leader, Sugar Free is vulnerable. Most of the newentrants will benchmark it in their marketing communi-cations plan and Sugar Free may lose its market share tonew entrants. Sugar Free therefore has dual task – defendits share as well as find opportunities to grow the cat-egory for its own growth.

Opportunity: How Can We Grow theCategory and the Brand?

Opportunities exist on several fronts – emerging trend onhealthy lifestyle, rising diabetic population in India, anddifferentiating product attributes delivering distinct con-sumer benefits. However, with rapid urbanization, largeyoung population, increase in white collar office work-ers, sedentary lifestyle, and media environment that ismaking people health- and fitness-conscious, tapping thehealthy lifestyle segment offers maximum potential forcurrent and future brand development. This health-proactive segment does not have any apparent health is-sue for which they are seeking a healthy and fitness-oriented lifestyle. They just want to look good, feel good,and avoid any future medical issues and hence are keenfor a healthier lifestyle. Focusing on diabetic populationmay lock the brand in a niche, thus hindering the rapid

growth that Sugar Free needs to protect its category lead-ership.

Similarly, highlighting specific product attributes wouldnot support the portfolio growth as the Sugar Free brandhas offering in both Asparatame as well as Sucralose.Defending or promoting any one of the specific moleculewould block the overall brand growth in future.

To keep occupying the biggest share of consumers’ mindand preference within the category, the Sugar Free brandhas to become part of their everyday lives, conversations,and the popular culture.

Barriers: What Stands in Our Way?

Though Sugar Free does not face any apparent barrier interms of category acceptance or brand equity, yet it needsto be vigilant on emerging competitive and market sce-nario and the likely changes in category communications.Sugar Free has to be careful in treading its future path. Onone hand, it needs to seize the opportunity with fast emerg-ing health trend and make the brand available in chan-nels beyond pharmacies, while on the other hand, SugarFree has deeply penetrated the pharmacy channel, whichcurrently accounts for bulk of its sales. Any slip-up onpharmacies or any shortcoming in tapping the new chan-nel, i.e., grocery, may jeopardize the brand’s growth plans.

Zero, with Alembic’s support and a robust marketingcommunication investment plan, is also likely to enjoypharmacy’s support and this could lead to marginsqueeze for Sugar Free.

Equal, with Heinz’s strengths in FMCG will penetrate ingrocery channel and may be offered as part of bundle pro-motion with other fast moving product lines like ketchup,thereby triggering a new battle for margins and shelf spaceat the grocery stores. Zero is also going to target theproactive health-conscious segments, with a strategy verysimilar to Sugar Free. Its strategy is clearly geared towardsgaining market share at the expense of Sugar Free.

Mankind Pharma is known to have aggressive distribu-tion and pricing strategies to establish its brands and islikely to adopt the same to establish Kalorie 1. It is likelyto put pressures on retail margins of all the key brandsincluding Sugar Free.

Zero, Sugarite, and Steviocal have made their intentionsclear that they will take the route of product differentia-

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tion in their communication strategy and will play up therecent negative reports on Asparatame to gain shares fromthis sub-category. This is certainly going to create con-sumer dissonance and draw consumer attention towardsthe ingredients of artificial sweetener brands. Consum-ers are becoming savvy and are increasingly concernedover food safety issues. Sugar Free has reasons to be wor-ried about this barrier as Sugar Free Gold (Asparatame)is the flagship variant in its portfolio.

To successfully overcome these barriers, Sugar Free needsto become an aspirational brand, capable of creating aconsumer pull and having an appeal that can overcomeingredient comparisons. It needs to focus efforts on targetsegments which are not likely to be affected by the com-petitive activities as much as the ‘category savvy’ con-sumers.

Key Targets: Who are our Priorities?

The key priority targets should be the urban dwellers, forwhom health, wellness, and fitness are all a part of life-style. They see themselves as part of the new and emerg-ing trends and are brand-conscious in displaying alifestyle that reflects such trends. Health-related lifestyleactivities have become their social currency, and a healthyand fit body is their fashion accessory. Such people arelarger in number and would generally be the new en-trants to the category. They are short on time and hencelike to minimize their brand search time by opting to gowith the most popular and/or reputed brand in the cat-egory.

The Challenge: What is Our Mission?

For appealing to a large number of health-conscious andfitness-oriented consumers, Sugar Free needs a strategicshift in its approach towards marketing and communi-cations. It needs to become and be seen as a legitimatepartner in supporting a healthy and fitness-oriented life-style. It has to break the current mould of providing asolution to calorie reduction and change its brand per-ceptions in the larger context of health and fitness orien-tation.

DESIRED BRAND CURRENT BRANDPERCEPTION PERCEPTION

Partner in supporting Daily calorie intakea healthy and fitness- reducer without

oriented lifestyle compromises on taste

Competitive Communication Landscape:What are the Current CommunicationStrategies of Competing Brands?

Sugar Free is the most visible brand with a number ofcelebrities from different domains of popular culture en-dorsing it (Raveena Tandon, popular movie actress;Harsha Bhogle, popular cricket commentator and anchor;and Sanjeev Kapoor, India’s most famous and respectedchef). Sugar Free has been leveraging endorsement strat-egy for the past few years/campaign cycles; however, themessaging is focused more on calorie reduction, position-ing the brand as a healthier alternative to sugar. Thoughthere is a subtle difference in communication cues for SugarFree Gold and Natura, the main message remains in thesame domain for both the variants.

Equal is another brand that is also using TVC for its com-munication, and positioning itself as a sweetener of choicefor diabetic patients.

Zero is highlighting its zero-calorie benefit and leveragingthe product shape and attributes to own this space. Itsfocus seems to be on building ‘product differentiation’and generating a brand switch from Sugar Free and otheravailable brands.

Kalorie 1, Sugarite, Steviocal and other brands have notyet come out with any campaigns that are currently vis-ible in the category, but are likely to be aggressive in theircommunication strategy either on point of purchase oron product differentiation.

Strategic Directions for Sugar Free:What Should be the Communication Strategy?

To overcome the current communication challenges, mar-keting barriers posed by the existing and emerging com-petition, and to appeal to the targeted segments, SugarFree needs to redefine the category communication code.Its communication should work in a way that wouldmake product differentiation redundant or bracketed forpeople with special needs. The focus has to be on build-ing consumer pull for the brand. Sugar Free advertisingshould make lifestyle cues more important to consumersas long as the product delivers on the basic function ofhealthier lifestyle and fitness.

Sugar Free should become a fashion statement on fitnessorientation and a consumer conversation currency onhealthy lifestyle.

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Large scale sampling of D’Lite, the drink variant of thebrand, should generate appropriate consumer interactionin the context of on-the-go consumption and complementthe brand’s strategic intent.

Sugar Free Brand Communication Strategy for 2008:What Should be the Way Forward?

Bipasha Basu, the appointed brand ambassador for 2008,is a popular and admired cinema celebrity amongst thetargeted segment, i.e., urban dwellers with a desire to leada healthy and fitness-oriented lifestyle. Bipasha is knownfor her fitness consciousness, and for being a fashiontrend-setter and an icon of success. She is a role model forthe targeted audience and is admired for her fit body andfigure. She is, therefore, a good and workable choice asbrand endorser/ambassador. Her endorsement will en-sure top-of-the-mind awareness for the brand despite com-petitive advertising clutter. And with adequate SOV, herpresence in other entertainment vehicles like movies andTV shows can subtly act as a brand reminder in the audi-ence’s mind, working as a multiplier effect for brand com-munication and advertising.

Leveraging Bipasha Basu as a brand endorser fulfills thestrategic intent of Sugar Free communication – portray-ing the brand as a fashion statement on fitness orientationand a conversation currency on healthy lifestyle.

Conclusions

• TVC theme: The theme of Sugar Free as a partner inhealthy and fitness-oriented lifestyle meets the cur-rent challenges facing the brand. Bipasha Basu as thebrand ambassador and the execution cues on fitness-consciousness depicted through body curve gesturesnicely tied to the package shape are appropriate for

the current strategic needs of the brand. This themewill strengthen the brand’s equity in health and fit-ness-oriented lifestyle and will give it an edge over thecompeting brands.

• Brand communication strategy: The debate on en-dorsement strategy vs brand/product as the hero inthe communication should be settled in favour of theendorsement strategy. Bipasha’s endorsement wouldget the brand an edge over its new competitors in termsof TOMA and would be clutter breaking as most of thecompeting brands would highlight product differen-tiation in their communication.

• IMC approach: The brand’s strategic intent of being a‘fashion statement on fitness orientation and a con-versation currency on healthy lifestyle’ should be thefocal point in the IMC approach. The brand shouldprovide a platform to its consumers for fashionablydisplaying their fitness orientation, and an opportu-nity to proudly discuss and share the healthy lifestylethey are leading with the help of Sugar Free. The plat-form should encourage consumers to take pride inevery single health and fitness-oriented activity – bigor small. Apart from TVC, the brand should exploitthe opportunities to be a part of the consumers’ dailylives through presence on internet, events and activi-ties regarding health, fitness, fashion, and modernurban lifestyle.

• Brand interaction opportunities/engagement: Apartfrom the proposed TVCs and ongoing sampling,internet, smart phone applications, fitness centres,blogs, magazines, TV soaps, reality shows and otherpopular modes of entertainment should be leveragedas appropriate vehicles to generate and intensifybrand interactions with consumers.

Case Analysis II

Anita BasalingappaAssociate Professor, Marketing AreaMudra Institute of Communications, Ahmedabad (MICA)email: anita@micamail.in

The richness of this case lies in the many facets ofpositioning of the brand ‘Sugar Free.’ Sugar Free is a

healthy low-calorie substitute of a commodity, positioned

as a fitness partner. It occupies a specialized productimage in contrast to the image of a commodity like sugar.The challenge is to suggest an advertising strategy that

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will build on the advantages of the brand and retain itsleadership position in terms of market share and brandpositioning in the long run. The advantages of Sugar Freeare that:

• The brand has been repositioned without altering theprevious positioning – managed continuity withchange.

• The brand name Sugar Free itself communicates themessage of the product in a lucid manner.

• Fitness concerns are on the rise among the target popu-lation given the changes in the environment.

• It is competitively priced.• It has a strong market presence in India with a 70 per

cent market share.• It has physical presence in the grocery stores and is

endorsed by popular actor Bipasha Basu and the mostcelebrated face of Indian cuisine, Sanjeev Kapoor.

The only challenging disadvantage of Sugar Free has beenits ‘chemical-based product’ image which might restrictharnessing the actual potential for demand.

Way Forward for Sugar Free

The team from the ad agency and the VP and his teamneeded to discuss whether to go ahead with the TVC?What should be the future advertising strategy?

The company must go ahead with the TVC. The objectivemust be to increase awareness of Sugar Free and impactan attitudinal shift among the target audience from SugarFree as a medicinal/chemical based product to a healthycompetitor for sugar. Currently, Sugar Free is consideredas a specialized product. It needs to be free from the me-dicinal image which precipitates purchase behaviour of‘use with prescription’ and a perception that there couldbe side-effects if used regularly.

The current target audience comprises 12 million fitness-conscious people residing in metros and big cities. Fit-ness-conscious people across cities in India need to betargeted. This will imply additional investment in distri-bution to make the product available across the countrythrough organized retail and select grocers. The companymust cater to corporate clients – including Business toBusiness (B2B) segment, comprising sweet shops andmanufacturers, caterers, hotels, and restaurants. It caneven persuade restaurants, sweet shops, and hotels tofeature a Sugar Free sweet option in the desserts section.

The brand Sugar Free had followed a transition from adiabetic drug to a table-top sweetener and then to a fit-ness partner; so, how should the brand communicationsmove forward?

Sugar Free has transitioned from a diabetes drug to a ta-ble-top sweetener and then to fitness partner. At eachstage, Sugar Free has acquired an addition to its imagewithout altering the previous one. Moreover, the identi-ties of a brand as a prescription drug for diabetes, table-top sweetener, and fitness partner are complementary. Itis both an advantage and a disadvantage to be known asa brand that is born out of a pharmaceutical company. Aproduct that has a medicinal image has an implicit mes-sage to be consumed in prescribed quantity as mentionedearlier.

One of the ways to suitably alter the medicinal image ofSugar Free is to broaden its acceptance and consumptionby relating it to its commodity partner. It is important thatconsumers are made aware and educated of the differ-ences between sugar and Sugar Free – just as salt andmilk have transitioned from commodities to brands inthe Indian market.

Should the company continue an endorser strategy?

Choice of actors such as Bipasha Basu, Malaika Arora,celebrity chefs such as Sanjeev Kapoor and popular sweetmart owners for endorsing Sugar Free Gold and SugarFree Natura respectively add immense value to the brand’spath from an unknown state to building a certain brandattitude. The ad campaign with celebrities should be ableto create awareness, and generate enough knowledgeamong viewers, leaving them wanting more. The adver-tisements must result in increased search engine hits,blogs, and increased traffic at retail store shelves carry-ing Sugar Free.

How the 360 degree approach can be applied to SugarFree brand communications? What innovations can bebrought in so that each opportunity of brand interactioncan be exploited for its advantage?

The advertising campaign must be able to generate aware-ness – enough awareness to build curiosity leading themto know more about the brand, get convinced to replacesugar with a healthy alternative, prefer Sugar Free Goldand Sugar Free Natura respectively among the compet-ing brands in the market, and finally make a purchaseand continue to purchase this brand. Table 1 lists pri-

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mary competitors for Sugar Free in India. Sugar Free hasa safe distance from competition. It is necessary for thebrand to make the commodity ‘sugar’ as its primary com-petitor soon.

TV is a necessary medium for advertising to uncoverunique opportunities for the masses. It would be useful toadvertise in TV programmes based on the target segment’sviewership data followed by print, OOH, and online in-teractive forums. Any information seeker should be ableto access honest convincing information about sugar andSugar Free. Bipasha Basu as a brand ambassador has apositive appeal for the elite and is aspirational for gen-eral public. The advertising strategy must include meas-ures to engage the customers more through print andonline media. Sponsoring events and associating withlarge and premium college campuses across cities wouldenable catching customers young.

It is required to tap both online and offline media. Thisproduct has an image of being medicinal and made up ofchemical ingredients to enable its functioning. Hence it isnot perceived as an easy extension to sugar. It is seenmore as a low-calorie ingredient for sweets and bever-ages which might be equally harmful in some other wayif it is used regularly in place of sugar. Online media canbe used to engage in interactions and clarify apprehen-sions about Sugar Free and its ingredients. Sugar Freemust exist on all new media – social networking sitessuch as Facebook and Twitter, blogs, and chats. This 360degree approach can ultimately benefit from increasingreturn on marketing investment for Sugar Free.

It would be advantageous to target B2B sector and ensurethat the food items are prefixed with ‘Sugar Free’ as ‘SugarFree chocolates’, ‘Sugar Free cake’ and so on. One coulddraw mileage from the brand name. The only apprehen-

Table 1: Primary Competitors for Sugar Free

Brand & Target Promotion Distribution Price Market ShareManufacturer Consumer Strategy in India (Rs 600

mn: market size)

Equal, 2000 World’s No 1, problem Rs 130 for 15-20%Monsanto, US solution mode; the best 100 tablets

ingredients give the cleansugar taste

Sugar Free Gold 12 million Cheeni Kum, infilm Strong distribution Rs 55 for 70%Zydus Wellness fitness- placement, channel with a 100 tablets

conscious Bipasha Basu ad specialized field forcecustomers of over 3,000;Reachesin metros 100,000 chemists andand big 200,000 doctorscities including physicians,

specialists, andsuper specialists

Sweetex

SweetosEnsigns HealthcarePvt Ltd, Pune

SugaRite Heat-stable – hence Twin-pronged strategyRigil, South America cook and bake of targeting doctors

and diabetic forums

Steviocal Aspartame free, ultimate Rs 85 forRigil, South America natural sweetner 100 tablets

Kalorie 1, 1995 Wasim Akram, brandMankind Pharma ambassador (a Pakistani

cricketer who is diabetic)

Zero, 2005 Consumer Promoted as ‘livwlite’; Rs 60 TargetingAlembic belonging Two-phase promotion: for 90 10%

to SEC A1 Phase 1: educate about tablets marketA2 between sucralose. Phase 2: focused share30 to 40 on benefits of zero withyears TV as lead medium

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sion is that of the brand becoming generic. The companycan mention the names of all outlets that market SugarFree sweets on the website.

In summary, Sugar Free should:

• Expand target audience to include B2B

• Have discounts and promotions for bulk purchases(Sugar Free is perceived to be expensive when com-pared to sugar.)

• Draw mileage out of the brand name

• Position itself as a primary competitor for sugar

• Integrate online media into the advertising campaign

Case Analysis III

Sanjay Kumar KarAssistant DeanRajiv Gandhi Institute of Petroleum TechnologyRae Barelie-mail: karsanjay1@gmail.com

In the current competitive scenario as described in thecase, the prospects of Sugar Free and its sub-brands

look promising. The market is moving towards strongercompetition. Sooner or later both domestic and interna-tional brands are likely to pose challenges to the marketleader. However, going by the performance of the com-peting brands, it is not so easy for competitors to dislodgeSugar Free from the leadership position occupied for al-most the past two decades. In a large market like India, amarket share of over 70 per cent is enormous. With lim-ited players in the market, Sugar Free could have felt com-fortable and be complacent with the achievements. Butthe brand management team is looking forward tostrengthening its position. The Vice President (VP), Mar-keting (Consumer Products Division) had been verykeenly interested to make necessary changes in the mar-keting strategies implemented in the past. More impor-tantly, the branding, advertising, and communicationstrategies needed revamping to revitalize the brand. It

was certainly a strategic move to capture a higher shareof mind and consumer wallet. Roping in Bipasha Basuas a celebrity endorser was a well-thought-out strategy inthe light of changes in consumer behaviour, competition,and broader marketing environment.

Brand Building Exercise at Zydus

Sugar Free was launched as an ethical drug and the tar-get consumers were the diabetic patients. The users ofsuch products were very conservative and were reluctantto expose their health deficiencies. Over a period of time,the company realized that the consumer dynamics alongwith the market dynamics were changing. There was aserious need for moving from a curative mindset to a pre-ventive mindset. The company therefore repositionedSugar Free as a lower calorie sweetener (see Table 1) andaccordingly sharpened the relevant components of itsmarketing strategies in order to make the market moreresponsive (see Table 2).

Table1: Brand Progression

Phase Duration Brand Targeted Positioning Advertising Packaging Retailing& Promotion

Phase I 1988-92 Sugar Free Diabetic patients Ethical drug: Below the Blue & White Sold throughCurative line clinical look medicine shops

Phase II 1993-99 Sugar Free Diabetic patients Sweetener: Above the Blue & White chemists: soldPreventive line clinical look as over the

counter (OTC)brand

Phase III Post-1999 Sugar Free Gold Fitness-oriented Low-calorie Above the Vibrant chemists,Sugar Free Natura consumers sweetener: line yellow grocery stores:

Preventive colour sold as OTCbrand

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Domestic Market and Competition

The market was very attractive as the penetration of thesweetener category was minimal. The market size ofRs.1,200 million looks very attractive for less than tenplayers. Equal with a 15-20 per cent share was challeng-ing Sugar Free – the market leader. Brands like Sweetex,Zero, Staviocal, Kalorie-1, and SugaRite were making theirpresence felt in this nascent market (see Table 3). Brandsbased on natural plant extracts were emphasizing on sta-bility against heat, thus projecting themselves as ideal for“cooking and baking” purposes.

Brand Positioning

The decision to move to a platform of preventive productlooks sensible. The consumers who are concerned abouttheir health and fitness should be very much interestedin the product. Such kind of strategic moves would payrich dividend in future. The brand is sharing points ofparity with the other brands in the category. The points ofparity may help to generate category level awareness butpoints of difference would give sustainable category lead-ership in the long run. Sugar Free needs to continue withits aggressive advertising strategy. The brand being amarket leader with over 70 per cent market share should

Table2: Packaging, Price and Value Proposition

Brand Application Price of Price of Price of Value MoleculePellets Pack Sachet Pack Powder Pack Proposition

Sugar Free Tabletop Rs. 20 (40 pellets pack) Rs.35 (25+5 Rs.90 Healthier AspartameGold applications Rs.55 (100+10 pellets pack) sachets pack) (100 gms) alternative

like tea, coffee, Rs.130 (300+30 pellets pack) Rs.60 (50 sachets to sugarnimbupani, Rs.175 (500 pellets pack) pack)and deserts, etc. Rs.95 (100

sachets pack)

Sugar Free Ideal for Rs.20 (20 pellet) Rs.35 [25 sachets Rs.100 Zero-calorie Sucralose -Natura cooking & Rs.60 (100 pellets pack) pack] [100gms] sweetener made from

basking like Rs.110(200 pellets pack) Rs.65 [50 sachets sugarhalwa, cakes Rs.160(300 pellets pack) pack]and desserts, etc. Rs.125 [100

sachets pack]

Brand Pack Size Flavours Price Value Propositions Positioning

Sugar Free D’Lite 500 ml Apple, Orange, Passion Fruit, Rs.30 It is lite ‘n’ healthy and Sports & HealthLemon and Peach fizzy; 99% calorie-free drink

Table 3: Comparative Position of Competitive Brands

Brands Position in Value Owned/ Targetthe Market Proposition Marketed by Consumer

Sugar Free 1 Healthier alternative to sugar Zydus, India Fitness-oriented consumers

Equal 2 Safe and sweet Merisant. People having problem with sugar

Sweetex 3 — — People having problem with sugar

Zero 4 Zero calorieDerived from sugar, Alembic, UK Proactive health seekers in Sec-Atastes like sugar and 600 times & A2 cities in the Age group ofsweeter than sugar. Sucralose is 30-40the key differentiator.

Staviocal — Ultimate natural sweetener; Rigil —Sheer goodness of the product

Kalorie-1 — Sugar substitute Mankind Pharma

SugaRite — A world full of sweetness and Naturell (India) SugaRite is an ideal sweetenerfree of calories Pvt. Ltd. for diabetics & the calorie-

conscious consumer

Sweetos — Low calorie and high intensity EnSigns Healthcare —sweetener; High stability level.

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aim for sustainable competitive advantage. Competitorsmay replicate the product benefits and develop identicalor better products with stronger distribution network butreplicating strong bond with consumers is a difficult task.Hence, the brand should look for emotional points of dif-ference and build on from there. Emotional points of dif-ference can drive greater distinctiveness for the brandbecause they create the brand’s personality. Emotionalpoints of difference educate consumers about the brand,and that understanding may help to establish rationalpoints of difference into the brand. Bipasha Basu is seenas an iconic star and many fitness-oriented people asso-ciate her with perfect fitness. Similarly, Simran as an en-dorser was expected to create positive brand response inSouth India.

360o Brand Communication

The brand management team constantly wanted to effec-tively and efficiently connect with the target market. Inthe recent times, increasing number of brand managershave been exploring and adopting 360° communicationapproaches to reach the target audience. The brands canno longer depend on any one medium to productivelyreach the target consumer. Over the last two decades, themarket dynamics and consumer preferences have signifi-cantly changed. Now the consumer is having many op-tions, so also the marketers. For instance, now theconsumers have started to shift from electronic mail toinstant messaging. The marketers are gradually movingin the same direction to catch the consumers. Recent stud-ies have shown that the online video market has beengrowing strongly. That means the engagement level ofconsumers is improving all the time. Such phenomenathrow several opportunities for the brand managers toestablish a stronger bond through engaging relationshipwith the consumer.

Zydus should start indulging in interactive mode of com-munication. Till now the brand has been advertised usingonly TVC and print media. The brand should use multi-ple media to communicate with the target consumers.

Radio

In the recent years, radio has been rejuvenated as the massmedia. With numerous FM stations coming up in themetros and other big cities, radio is today the new buzzand medium for mass communication. As Sugar Free tar-gets the working class executives and professionals, ra-

dio can serve to be the best alternative medium to reachthis particular target market. These executives may nothave the time to watch TV; they look for relevant news innewspapers and periodicals, but they listen to radio whilecommuting between home and workplace. Thus, radiogets exclusive attention when they have nothing else todo, making it the most impacting medium. Vocal ads arecheaper to make and the radio slots are also cheaper com-pared to TV and print; thus the company can achievemore coverage with less investment.

Internet

With a vast reach and easy accessibility, internet can bethe new age communication tool. Internet advertisementscan be in the form of banner ads, e-mail ads, online games,surveys, etc. Sites related to health and wellness, sportsand medicine can be targeted to display the ads. Advan-tages of internet advertising are:

• Large growth and expanse• Large target market• Good conversion tracking• Low entry level fees• Low cost• Greater range and life

Zydus should use internet to effectively and efficientlyreach the target audience. Internet being one of the cheap-est options, the brand may generate enough awarenessand conversion. Exciting viral campaigns may be devel-oped and circulated through employees and their network.It has been seen that producing virals are cheaper, and ifused properly can bring out wonderful results for brands.

Infilm Placement

Infilm placement in Chini Kum – A Sugar Free Romance –was an excellent idea. Many more such infilm placementsshould be explored in future.

Online Platforms

Research conducted by eMarketer reports that online com-munities and forums are the best media for finding outabout new products (51%), helping to make a purchasedecision (47%), entertaining people (31%), and keepingup with friends and family (10%). In recent times theonline forums and communities have been playing animportant role in disseminating information and per-suading consumers to take favourable decision on brands.

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Zydus can develop online communities for Sugar Freeand effectively build a stronger brand over a period oftime. Research shows that conversations and endorse-ments of brands on social networks are trusted more thanads; so, Zydus may sponsor stories in the social network-ing sites like Facebook. When it comes to connecting withconsumers on social networking sites, brands that offerincentives and entertainment are ahead of competition.The social networking sites offer excellent opportunity toZydus to keep its brand connected with the consumerand create a lasting impression. Zydus should make theSugar Free website more interesting and exciting to at-tract more visitors. The brand should develop its ownblogosphere and attract users to actively participate insharing their experience. Probably a group of health andwellness consultants could be involved to address theconcerns of the participants in the blogosphere.

Mobile

Mobile connectivity has reached the remotest part of thecountry. Mobile can be the best advertisement medium interms of value on investment. This medium can assuremaximum coverage, and may thus have the highest reachwith the lowest possible investment. There are differenttypes of advertisement templates that can be used formobile advertising:

• Mobile Web Banner (top of page) ads• Mobile Web Poster (bottom of page banner) ads• SMS ads• MMS ads• Mobile game ads• Mobile video ads• Voice mail recordings• Audio messages on call

A new concept of viral marketing has been introduced inmobile advertising. Under this concept, a recipient of anSMS forwards the same to his/her acquaintances andthereby becomes a part of the advertising experience. Thisincreases the range of the advertisement and also helpsin more conversion due to the referral factor.

Zydus can use one of the above or a combination of alltypes of mobile advertisements to maximize the benefits.

Outdoor

Zydus has been using outdoor advertising but strategiclocations need to be identified. In addition to high traffic

location, such hoardings should be placed near the buy-ing or consumption centres. Of course, outdoor campaignsdraw attention but finally trial and conversion should bethe key.

Digital Display

Digital signage displays are the latest technologies usedfor advertising. Digital displays have no boundaries asfar as locations are concerned. They range from billboardsand hoardings on buildings and roads to digital signsalong the boundary of a cricket ground, malls, and shop-windows, and laser shows at social events. The digitaldisplays can be used for advertisement, corporate com-munication, and brand building, enhancing both con-sumer behaviour and environmental experience. Moreattractive and innovative the displays, more would bethe impact on the target market. Following are the advan-tages of digital signage display:

• Content of the signage can be altered in real time al-lowing greater flexibility and scheduling of all adver-tisements depending on the time.

• Digital signage displays can be used for both indooras well as outdoor advertising.

• Content and styling can be changed depending onthe types of customers.

• Cost-effective compared to other media.• More engaging, eye-catching, and modern than tradi-

tional methods.

Zydus may explore the possibility of using digital signagein strategic locations and events to create maximum pos-sible impact on the viewers.

Public Relations

The recent developments in information and communi-cation technology provided plenty of options to the con-sumers for gathering desirable information from publicdomain. Information is fast becoming a powerful tool inthe hands of consumer. Negative or harmful informationmay erode equity of any firm or brand. Firms use publicrelations (PR) to prevent brand equity erosion. Many atimes they use PR as a reactive measure to minimize un-desirable loss of consumer trust, consumer base, andmarket share. PR activities can be effectively used to buildsustainable and engaging relationship with thestakeholders. Zydus should build a stronger PR depart-ment to capitalize on the powerful corporate image of thecompany.

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Sugar Free Fitness Camps

Zydus should arrange fitness camps in association withfitness centres or private clinics and health centres. Thiswould help in generating awareness and interest amongthe targeted group of consumers. Such camps may lead totrials and repeat use of Sugar Free. Doctors and healthconsultants, dieticians, and health trainers can be effec-tively used to convert non-users to users. It no longer fallsunder the ethical drug category; but the health consult-ants can still advise their clients to use Sugar Free.

Sponsorship

The company should sponsor local, national, and inter-national events. Of course, the costs and benefits of anysponsorship need to be kept in mind. Events like Mumbaiand Delhi Marathons may bring desired results with com-paratively less cost. Such social cause marketing couldprove effective for Zydus.

Partnering with Others

Zydus should explore joining hands with suitable cafesand food joints across the country to promote Sugar Freebrands. They can even establish strong symbiotic rela-tionship with good hotels to increase its usage.

Brand Strategy

Possible strategic options available to brands are pre-sented in Figure 1. Zydus being the market leader shouldpursue option1.

Strategic Outlook

New Products Development and Introduction

Looking at long-term growth opportunities, the companyshould bring in new products in the niche categorieswherein the firm has first mover advantage. It should in-troduce/acquire related or innovative products to en-hance both top line and bottom line. Required infrastruc-ture/facilities should be developed to cater to the everincreasing demand for quality products in the rural andurban markets.

Category Education

In a market like India, the company needs to emphasizeon category level education through conventional andunconventional media. Lesser number of players meansthat the firm needs to spend more money to create thecategory level education in the market. However, the in-vestments made in the brand building activities are go-ing to pay rich dividend in terms of greater awarenessand higher level of product acceptance.

Category Management

The organized retail segment has been growing over 20per cent for the last couple of years. This has opened upanother distribution and retail channel for the manufac-turer’s brand. There is a strong need for Zydus to seri-ously consider increasing sales force to providecustomized service to the organized retailers. The com-

Figure1: Brand Strategies available to Different Brands

Option1 Option2• Consolidate market • Grow brand share• Attack your own weaknesses • Attack the weakest point of the leader’s strength• Block every strong move • Don’t rely on one point of attack• Monitor every move• Strike back with counter measures• Keep something in reserve• Smoothen things over to keep the market stable

Option3 Option4• Grow share in one sector • Find a gap in the market• Move into uncontested area • Identify territory small enough to defend• Follow through the pursuit – it is as important as the • Never act like a leader, or fight a lost cause

initial manoeuver • Be narrow and deep in focus• Keep forces concentrated • Develop alliances

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pany should strategically look into the key accounts tobuild collaborative and sustainable relationship with themodern retailers. In the long run, this would certainlyhelp to minimize expenses and maintain a stable growthrate. Being the market leader, Zydus should lead from thefront and bring in the concept like the ‘Category Captain’to India. The company may bring the organized retailers

to the discussion table and push the case for CategoryCaptain’s role in the leading retail stores. This wouldlead to more sales and stronger bottom line and moreimportantly help to build stronger customer equity. Suchstrategic moves would potentially contribute towardhealthier business and much higher corporate brand eq-uity.

Case Analysis IV

Deepak BhattManaging Director & CEOLearning Lab (India) Pvt. Ltd. Ahmedabade-mail: writetodeepakbhatt@gmail.com

Every successful business is built on an appropriatejudgment of timing, opportunity, and responsibility,

and not infrequently, humour. However, nothing is morecritical than the ability to sense the market. A senior ex-ecutive’s instinctive capacity to empathize with and gaininsights from customers is the single-most important skillhe or she can use to direct technologies, product and serv-ice offerings, and communications programmes; in factall elements of a company’s strategic posture.

This case presents a review of the changes happening inconsumer behaviour, competition, and the broader mar-keting environment, and offers a plan of action for thefuture of Sugar Free brand. During the last 20 years, hun-dreds of new restaurants and hotels have come up aroundthe globe. In addition, hospitality and food industries haveundergone globalization which has increased thenumber of competitors within the industry. In this situa-tion, to establish a non-diabetic brand like Sugar Free withnew strategies is indeed a challenge for the Zydus Group.The company that really understands how consumerswill respond to this medical product vis-à-vis the con-sumer products with respect to their features, price, andadvertising appeal would have a great advantage overits competitors.

The Case Overview: Corporate Level Strategy

In Phases I, II and III, consumers were under the idea that“Sugar Free” is meant only for diabetic patients andshould therefore be prescribed by doctors. But afterchanges in Law permitted it to be sold as an Over theCounter (OTC) item, the company decided to move Sugar

Free from Medical to the Cosmetic Division and then intoConsumer Product Division and accordingly designed astrategy to give it a new look, with a message to the soci-ety about the usages of Sugar Free. As per Mr. AnandDeo’s statement in 2004, “The growing health concernhas opened up a vast market for sweeteners in India. Wehave captured only three per cent of the entire market andit has targeted a turnover of Rs 123 crore in the end of thefinancial year 2006-07.”

One very interesting point to be noted here is that sugarsubstitutes do not help in losing weight; in fact, surpris-ingly, it actually helps in gaining weight because of theway its chemical compounds break and get absorbed inyour body. However, FDA, the American Cancer Societyand the National Cancer society, after being convincedby various study reports, have together declared that it isabsolutely safe and can be used as an alternative sweet-ener for diabetics and obese or those who have been reco-mmended less calorie intake.

Business Level Strategy

Distribution issues come into play heavily in deciding onthe brand level strategy. In order to secure a more exclu-sive brand label, it is usually necessary to sacrifice vol-ume — it would do no good for Sugar Free to create alarge number of low-priced chemists and retail outlets(Kirana Stores). Sugar Free is the oldest and the largestselling sweetener and is a market leader with a 72 percent share. It is essentially in order to re-emphasize itsleadership position that Sugar Free has been renamed asSugar Free Gold.

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Some firms can be very profitable going for quantity whereeconomies of scale come into play and smaller marginson a large number of units add up — e.g., McDonald’ssurvives on much smaller margins than upscale restau-rants, but may make larger profits because of volume. Some firms choose to engage in a niche strategy wherethey motivate most customers to focus on a small seg-ment where less competition exists (e.g., clothing for verytall people). Many channel intermediaries focus heavilyon customer interface as a way of creating competitiveadvantage and cementing the relationship with their sup-plying producers.

In the case of Sugar Free, a niche strategy has been adoptedfor reaching to individual customers and towns throughtwo channels — chemists and local grocery stores — fromwhere people can buy the product very easily. Follow-upwith grocery stores and chemists on a continuous basishas helped in expanding product volume and services.

The willingness of distribution channel intermediariesto market Sugar Free product is also an important factor.Grocery stores and chemists may have interest in a vari-ety of products. They may decide not to support a par-ticular product if it requires too much investment (e.g. ontraining, display equipment, warehouse, etc). But throughdifferent product promotion schemes, the distributorsconvince the shop owners to stock Sugar Free by promis-ing to take back the unsold stock.

The Sugar Free sweetener mainly contains saccharin(most commonly used in India especially for tea and cof-fee), aspartame, acesulfame K or non-glucose carbohy-drates like fructose, isomalt, etc. Saccharin and aspartameare safe enough; though there are rumours of their asso-ciation with bladder cancer and brain tumour, therehave been several rigorous studies denying these side-effects. Aspartame is made from two amino acids: aspar-tic acid, and phenylalanine. Saccharin is made from thereaction between sulfur dioxide, chlorine, ammonia, andtwo biochemical acids.

The company negotiated with different firms for gettingraw materials at a very low price so that the saving can beused for involving famous personalities in the advertise-ments for Sugar Free. Also Sugar Free came to be acceptedas a lifestyle product which worked well with the con-sumers.

A new television commercial, created by Rediffusion, was

also launched for Sugar Free Gold that emphasized on itsfitness proposition. While earlier, the communication wastargeted generally at fitness-conscious people, in the lightof the new launch, the team has strategically split fitnessinto exercise and diet. Hence, Sugar Free Gold will oper-ate specifically in the areas of fitness and lifestyle (andnot diet/food/indulgence)

Explaining the rationale of the commercial, Gaurav Bhatia,Client Servicing Director, Rediffusion, said, “The audi-ences we are talking to are passively conscious of theirfitness and as they generally lead a stressful life, exerciseusually gets neglected. Sugar Free Gold thus offers thema first step to exercising. The ad aims to tell them to makea start with Sugar Free Gold. However, it is not a substi-tute to exercise, but this is the least one can do about theirown fitness.”

Simultaneously, Sugar Free Natura was also introduced,which was promoted by a famous Chef, Sanjeev Kapoor.In 2007, the company launched its first Sugar Free softdrink using artificial sweetener called “D’lite.” For thisproduct, the company has invested heavily on promo-tion schemes like distributing free sample pack and word-of-mouth marketing.

The major players in the market include Nutrasweet,Tate & Lyle, Nutrinova, Merisant, McNeil Nutritionals,Danisco, Spherix, and Imperial Sugar. Despite the antici-pated developments in the market, many food and bever-age companies globally are said to be steering towards ahealth and wellness trend, replacing ‘artificial’ ingredi-ents, such as colours and sweeteners, with ingredientsconsidered more ‘natural’.

It is also important for consumers to recognize their rolein evaluating health claims and product comparisons.While advertisers are aware of the need for truth in ad-vertising, their desire to sell products at times over-shad-ows an accurate disclosure of product attributes.Advertisers should bear in mind that inaccurate or vaguehealth claims have the potential of causing economichardship, illness, and even death. Marketing strategiesused in developing nations should particularly be sub-jected to the highest standards of truth in advertising.

Recommendations

Companies have traditionally been protective of the in-novation activities in product and process development.

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That thinking, however, is starting to change. The follow-ing suggestions may help Sugar Free succeed in today’smarket.

• Sugar Free should consider an appropriate marketingstrategy and for that have imaginative marketing cam-paigns. For example, knowing that consumers aremore receptive to food advertising when they are hun-gry, Sugar Free advertisements can be telecast aroundsnack time, late in the afternoon and morning.

• Usually Sugar Free is initially adopted by a few con-sumers and only gradually accepted by the rest of thepopulation. The company that introduces the newproduct must be financially sound to stay afloat untiltheir products become a commercial success. It is alsoimportant to please the initial customers, since theywill in turn influence many subsequent customers’brand choices.

• A competing firm that targets young population islikely to consider repositioning. To assess the threat,the company would need to examine its assets (e.g.,technology, patents, market knowledge, and aware-ness of its brands) and the market environment againstthe pressures it faces from the market. For example,although we may have developed a product that hasgreat appeal for consumers, a recession may reduceits demand dramatically.

• Research should be carried out by a professionalagency before launching the product. It could help thebrand reduce risks associated with it. For example,Coca Cola did a great deal of research prior to releas-ing the New Coke, and consumers seemed to preferthe taste. However, consumers were not prepared tohave this drink replace traditional Coke.

• Another method to revitalize the Sugar Free brand isthrough “Surveys” which are useful for getting use-ful information. Surveys can contain open-endedquestions which do not restrict the respondents to re-ply from the listed options. However, open-ended ques-tions are often skipped by respondents, and codingthem can be quite a challenge. In general, for surveysto yield meaningful responses, a sample size of over100 is usually required for precision.

• Forming focus groups is useful before launching a newproduct version of Sugar Free or modifying the exist-ing one. A focus group aimed at introducing sugar-free cookies might first address consumers’ snackingpreferences, only gradually moving toward the spe-

cific product of sugar-free cookies. By not mentioningthe product up front, bias towards a specific productcan be avoided. Such a discussion might reveal a con-cern about health and a desire for wholesome foodsand thus indicate their inclination towards avoidingartificial ingredients.

• Projective techniques are used when consumers feelembarrassed to admit to certain opinions, feelings, orpreferences. For example, many older executives maynot be comfortable admitting to being intimidated bySugar Free. It has been found that in such cases, peo-ple will tend to respond more openly about “someoneelse.” Thus, we may ask them to explain reasonswhy a friend has not yet bought a Sugar Free, or to tella story about a person in a picture who is or is notusing a product. The main problem with this methodis that it is difficult to analyse responses.

• Internet now reaches majority of households world-wide; this has increased the use of online research.One potential benefit of online surveys is the use of“conditional branching.” In the conventional paperand pencil survey, the respondent may be asked if hehas bought a Sugar Free during the last eight months. Ifthe respondent says “no,” he will be asked to skipseveral questions. If the answer is “yes,” he would beinstructed to go to the next question which, along withthe next several ones, would address issues related tothis shopping experience. However, some consumersmay be more comfortable with online activities thanothers and not all households will have access tointernet. A more serious problem which has consist-ently been found in online research is that it is verydifficult, if not impossible, to get respondents to care-fully read instructions and other information online— there is a tendency to move quickly. This makes itdifficult to perform research that depends on the re-spondent’s reading of a situation or product descrip-tion.

• Communicate, communicate, and communicate.Many mediums are working together to present a uni-fied message with a feedback mechanism to make thecommunication two-way. One should be sure to havean understanding of non-traditional mediums, suchas word-of-mouth and how it can influence his posi-tion in the consumer’s mind. In how many ways can acustomer hear (or see) the same message through thecourse of the day, each message reinforcing the earlierimages?

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Sugar Free should achieve 360 degree communicationobjectives by:

• Developing brand awareness in rural area throughwellness programmes

• Increasing category demand in terms of small packsand schemes

• Changing customer belief or attitude through medicalteam

• Enhancing purchase actions• Encouraging repeat purchases through retail pro-

grammes/promotions• Building customer traffic through surveys• Enhancing firm image through employee brand activ-

ity• Increasing market share through sales team

• Increasing sales through awareness• Reinforcing purchase decisions

Competing in the marketplace not only means having aproduct line for which there will be demand from theconsumers; it is also important to know what would makeit more competitive and profitable.

The Zydus Group has seen a continuous growth and in-troduction of new products at regular intervals. In addi-tion, the company has also been expanding its businessportfolio by adding other sub-units, and venturing intoother areas such as Research & Development. In order toensure that it grows further in the future, the companymust adopt a strategy to enhance its potential in the chang-ing market environment.

From the bitterness of disease man learns the

sweetness of health.

— Catalan