DIAGNOSESpresents analyses of the management case by academicians and practitioners
Sugar FreePreeta H Vyas
Case Analysis IMilan AgnihotriGroup Director Brand Planning and Innovations McCann Worldgroup Malaysia e-mail: [email protected]
The current issue of Vikalpa has published a Case titled, Sugar Free by Preeta H Vyas. This Diagnoses features analyses of the case by Milan Agnihotri, Anita Basalingappa, Sanjay Kumar Kar and Deepak Bhatt.
ugar Free as a brand has come a long way in twenty years of its existence. It has transformed from an ethical brand of sugar substitute for diabetic patients to a FMHG (fast moving health goods) brand for calorie-conscious, busy, and healthy lifestyle-seeking urban dweller. In the journey, the brand has gone through substantial changes in packaging and distribution. It has earned undisputed market leadership and has gained strong equity amongst consumers, retailers, and health experts (chemists and physicians). With the backing of its financially sound owner, Sugar Free is now preparing to enter the next phase of lifecycle where it is up against the better featured products as well as the marketing savvy and deep pocketed competitors. Stakes are high for Sugar Free due to environment changes in terms of category acceptance, evolved consumers, and heightened competitive activities. To deal with the new reality, Sugar Free has launched a drink variant named DLite and is heavily sampling it to dispel myths about artificial sweetener category as well as to generate brand interaction and trial. On marketing communications front, it is contemplating to embark upon a new brand endorser strategy and has roped in Bipasha Basu one of the leading actresses of Indian cinema, known for her fitness consciousness. Bipasha has been signed as the brand ambassador and the lead protagonist in TVC which is going to be fundamentally different from the previous communication platforms. The new TVC featuring Bipasha Basu presents Sugar Free as a symbol of health-oriented lifestyle as opposed to the product benefit of lowering the calorie intake, highlighted in all previous communications. As it moves forward, Sugar Free has to carefully evaluate its TVC theme, brand communication strategy, IMC approach, and brand interaction opportunities 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 billion sugar substitute market (estimated in mid-2000) that is growing at 20 per cent perNote: The views expressed are personal.
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annum. Sugar Free is best positioned to exploit the market 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 substitute market. Sugar Free follows an umbrella branding strategy, positioning its variants on the basis of primary usage table top vs. cooking and not on product attributes. However, there is a growing competition in both the subcategories. Brands like Kalorie 1 and Sweetex have entered in the Asparatame sub-category. Equal, an existing brand having Asparatame as main ingredient, is likely to heighten its activities with its marketing rights moving from GSK (primarily a pharmaceutical and consumer health company) to Heinz (a FMCG company). At the same time, Alembic is introducing Zero, which is made from Sucralose, and has an aggressive marketing communication and promotion plan. Zero aims to garner 10 per cent market share within one year of its introduction. The launch of SugaRite and Steviocal, based on Stevia plant, is also going to increase noise and activity in the category and will add to the consumer vocabulary regarding the category. As a leader, Sugar Free is vulnerable. Most of the new entrants will benchmark it in their marketing communications plan and Sugar Free may lose its market share to new entrants. Sugar Free therefore has dual task defend its share as well as find opportunities to grow the category for its own growth.
growth that Sugar Free needs to protect its category leadership. Similarly, highlighting specific product attributes would not support the portfolio growth as the Sugar Free brand has offering in both Asparatame as well as Sucralose. Defending or promoting any one of the specific molecule would block the overall brand growth in future. To keep occupying the biggest share of consumers mind and preference within the category, the Sugar Free brand has 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 in terms of category acceptance or brand equity, yet it needs to be vigilant on emerging competitive and market scenario and the likely changes in category communications. Sugar Free has to be careful in treading its future path. On one hand, it needs to seize the opportunity with fast emerging health trend and make the brand available in channels beyond pharmacies, while on the other hand, Sugar Free has deeply penetrated the pharmacy channel, which currently accounts for bulk of its sales. Any slip-up on pharmacies or any shortcoming in tapping the new channel, i.e., grocery, may jeopardize the brands growth plans. Zero, with Alembics support and a robust marketing communication investment plan, is also likely to enjoy pharmacys support and this could lead to margin squeeze for Sugar Free. Equal, with Heinzs strengths in FMCG will penetrate in grocery channel and may be offered as part of bundle promotion with other fast moving product lines like ketchup, thereby triggering a new battle for margins and shelf space at the grocery stores. Zero is also going to target the proactive health-conscious segments, with a strategy very similar to Sugar Free. Its strategy is clearly geared towards gaining market share at the expense of Sugar Free. Mankind Pharma is known to have aggressive distribution and pricing strategies to establish its brands and is likely to adopt the same to establish Kalorie 1. It is likely to put pressures on retail margins of all the key brands including Sugar Free. Zero, Sugarite, and Steviocal have made their intentions clear that they will take the route of product differentiaDIAGNOSES
Opportunity: How Can We Grow the Category and the Brand?Opportunities exist on several fronts emerging trend on healthy lifestyle, rising diabetic population in India, and differentiating product attributes delivering distinct consumer benefits. However, with rapid urbanization, large young population, increase in white collar office workers, sedentary lifestyle, and media environment that is making people health- and fitness-conscious, tapping the healthy lifestyle segment offers maximum potential for current and future brand development. This healthproactive segment does not have any apparent health issue for which they are seeking a healthy and fitnessoriented lifestyle. They just want to look good, feel good, and avoid any future medical issues and hence are keen for a healthier lifestyle. Focusing on diabetic population may lock the brand in a niche, thus hindering the rapid
tion in their communication strategy and will play up the recent negative reports on Asparatame to gain shares from this sub-category. This is certainly going to create consumer dissonance and draw consumer attention towards the ingredients of artificial sweetener brands. Consumers are becoming savvy and are increasingly concerned over food safety issues. Sugar Free has reasons to be worried about this barrier as Sugar Free Gold (Asparatame) is the flagship variant in its portfolio. To successfully overcome these barriers, Sugar Free needs to become an aspirational brand, capable of creating a consumer pull and having an appeal that can overcome ingredient comparisons. It needs to focus efforts on target segments which are not likely to be affected by the competitive activities as much as the category savvy consumers.
Competitive Communication Landscape: What are the Current Communication Strategies of Competing Brands?Sugar Free is the most visible brand with a number of celebrities from different domains of popular culture endorsing it (Raveena Tandon, popular movie actress; Harsha Bhogle, popular cricket commentator and anchor; and Sanjeev Kapoor, Indias most famous and respected chef). Sugar Free has been leveraging endorsement strategy for the past few years/campaign cycles; however, the messaging is focused more on calorie reduction, positioning the brand as a healthier alternative to sugar. Though there is a subtle difference in communication cues for Sugar Free Gold and Natura, the main message remains in the same domain for both the variants. Equal is another brand that is also using TVC for its communication, and positioning itself as a sweetener of choice for diabetic patients. Zero is highlighting its zero-calorie benefit and leveraging the product shape and attributes to own this space. Its focus seems to be on building product differentiation and generating a brand switch from Sugar Free and other available brands. Kalorie 1, Sugarite, Steviocal and other brands have not yet come out with any campaigns that are currently visible in the category, but are likely to be aggressive in their communication strategy either on point of purchase or on product differentiation.
Key Targets: Who are our Priorities?The key priority targets should be the urban dwellers, for whom health, wellness, and fitness are all a part of lifestyle. They see themselves as part of the new and emerging trends and are brand-conscious in displaying a lifestyle that reflects such trends. Health-related lifestyle activities have become their social currency, and a healthy and fit body is their fashion accessory. Such people are larger in number and would generally be the new entrants to the category. They are short on time and hence like to minimize their brand search time by opting to go with the most popular and/or reputed brand in the category.
The Challenge: What is Our Mission?For appealing to a large number of health-conscious and fitness-oriented consumers, Sugar Free needs a strategic shift in its approach towards marketing and communications. It needs to become and be seen as a legitimate partner in supporting a healthy and fitness-oriented lifestyle. It has to break the current mould of providing a solution to calorie reduction and change its brand perceptions in the larger context of health and fitness orientation.DESIRED BRAND PERCEPTION Partner in supporting a healthy and fitnessoriented lifestyle CURRENT BRAND PERCEPTION Daily calorie intake reducer without compromises on taste
Strategic Directions for Sugar Free: What Should be the Communication Strategy?To overcome the current communication challenges, marketing barriers posed by the existing and emerging competition, and to appeal to the targeted segments, Sugar Free needs to redefine the category communication code. Its communication should work in a way that would make product differentiation redundant or bracketed for people with special needs. The focus has to be on building consumer pull for the brand. Sugar Free advertising should make lifestyle cues more important to consumers as long as the product delivers on the basic function of healthier lifestyle and fitness. Sugar Free should become a fashion statement on fitness orientation and a consumer conversation currency on healthy lifestyle.
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Large scale sampling of DLite, the drink variant of the brand, should generate appropriate consumer interaction in the context of on-the-go consumption and complement the brands 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 the targeted segment, i.e., urban dwellers with a desire to lead a healthy and fitness-oriented lifestyle. Bipasha is known for her fitness consciousness, and for being a fashion trend-setter and an icon of success. She is a role model for the targeted audience and is admired for her fit body and figure. She is, therefore, a good and workable choice as brand endorser/ambassador. Her endorsement will ensure top-of-the-mind awareness for the brand despite competitive advertising clutter. And with adequate SOV, her presence in other entertainment vehicles like movies and TV shows can subtly act as a brand reminder in the audiences mind, working as a multiplier effect for brand communication and advertising. Leveraging Bipasha Basu as a brand endorser fulfills the strategic intent of Sugar Free communication portraying the brand as a fashion statement on fitness orientation and a conversation currency on healthy lifestyle.
Conclusions TVC theme: The theme of Sugar Free as a partner in healthy and fitness-oriented lifestyle meets the current challenges facing the brand. Bipasha Basu as the brand ambassador and the execution cues on fitnessconsciousness depicted through body curve gestures nicely tied to the package shape are appropriate for
the current strategic needs of the brand. This theme will strengthen the brands equity in health and fitness-oriented lifestyle and will give it an edge over the competing brands. Brand communication strategy: The debate on endorsement strategy vs brand/product as the hero in the communication should be settled in favour of the endorsement strategy. Bipashas endorsement would get the brand an edge over its new competitors in terms of TOMA and would be clutter breaking as most of the competing brands would highlight product differentiation in their communication. IMC approach: The brands strategic intent of being a fashion statement on fitness orientation and a conversation currency on healthy lifestyle should be the focal point in the IMC approach. The brand should provide a platform to its consumers for fashionably displaying their fitness orientation, and an opportunity to proudly discuss and share the healthy lifestyle they are leading with the help of Sugar Free. The platform should encourage consumers to take pride in every single health and fitness-oriented activity big or small. Apart from TVC, the brand should exploit the opportunities to be a part of the consumers daily lives through presence on internet, events and activities regarding health, fitness, fashion, and modern urban lifestyle. Brand interaction opportunities/engagement: Apart from the proposed TVCs and ongoing sampling, internet, smart phone applications, fitness centres, blogs, magazines, TV soaps, reality shows and other popular modes of entertainment should be leveraged as appropriate vehicles to generate and intensify brand interactions with consumers.
Case Analysis IIAnita BasalingappaAssociate Professor, Marketing Area Mudra Institute of Communications, Ahmedabad (MICA) email: [email protected]
he richness of this case lies in the many facets of positioning 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 product image in contrast to the image of a commodity like sugar. The challenge is to suggest an advertising strategy thatDIAGNOSES
will build on the advantages of the brand and retain its leadership position in terms of market share and brand positioning in the long run. The advantages of Sugar Free are that: The brand has been repositioned without altering the previous positioning managed continuity with change. The brand name Sugar Free itself communicates the message of the product in a lucid manner. Fitness concerns are on the rise among the target population 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 most celebrated face of Indian cuisine, Sanjeev Kapoor. The only challenging disadvantage of Sugar Free has been its chemical-based product image which might restrict harnessing the actual potential for demand.
The brand Sugar Free had followed a transition from a diabetic drug to a table-top sweetener and then to a fitness partner; so, how should the brand communications move forward? Sugar Free has transitioned from a diabetes drug to a table-top sweetener and then to fitness partner. At each stage, Sugar Free has acquired an addition to its image without altering the previous one. Moreover, the identities of a brand as a prescription drug for diabetes, tabletop sweetener, and fitness partner are complementary. It is both an advantage and a disadvantage to be known as a brand that is born out of a pharmaceutical company. A product that has a medicinal image has an implicit message to be consumed in prescribed quantity as mentioned earlier. One of the ways to suitably alter the medicinal image of Sugar Free is to broaden its acceptance and consumption by relating it to its commodity partner. It is important that consumers are made aware and educated of the differences between sugar and Sugar Free just as salt and milk have transitioned from commodities to brands in the 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 sweet mart owners for endorsing Sugar Free Gold and Sugar Free Natura respectively add immense value to the brands path from an unknown state to building a certain brand attitude. The ad campaign with celebrities should be able to create awareness, and generate enough knowledge among viewers, leaving them wanting more. The advertisements must result in increased search engine hits, blogs, and increased traffic at retail store shelves carrying Sugar Free. How the 360 degree approach can be applied to Sugar Free brand communications? What innovations can be brought in so that each opportunity of brand interaction can be exploited for its advantage? The advertising campaign must be able to generate awareness enough awareness to build curiosity leading them to know more about the brand, get convinced to replace sugar with a healthy alternative, prefer Sugar Free Gold and Sugar Free Natura respectively among the competing brands in the market, and finally make a purchase and continue to purchase this brand. Table 1 lists pri-
Way Forward for Sugar FreeThe team from the ad agency and the VP and his team needed 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 objective must be to increase awareness of Sugar Free and impact an attitudinal shift among the target audience from Sugar Free as a medicinal/chemical based product to a healthy competitor for sugar. Currently, Sugar Free is considered as a specialized product. It needs to be free from the medicinal image which precipitates purchase behaviour of use with prescription and a perception that there could be side-effects if used regularly. The current target audience comprises 12 million fitnessconscious people residing in metros and big cities. Fitness-conscious people across cities in India need to be targeted. This will imply additional investment in distribution to make the product available across the country through organized retail and select grocers. The company must cater to corporate clients including Business to Business (B2B) segment, comprising sweet shops and manufacturers, caterers, hotels, and restaurants. It can even persuade restaurants, sweet shops, and hotels to feature a Sugar Free sweet option in the desserts section.VIKALPA VOLUME 36 NO 1 JANUARY - MARCH 2011
Table 1: Primary Competitors for Sugar FreeBrand & Manufacturer Equal, 2000 Monsanto, US Target Consumer Promotion Strategy Worlds No 1, problem solution mode; the best ingredients give the clean sugar taste 12 million fitnessconscious customers in metros and big cities Cheeni Kum, infilm placement, Bipasha Basu ad Strong distribution channel with a specialized field force of over 3,000;Reaches 100,000 chemists and 200,000 doctors including physicians, specialists, and super specialists Distribution Price Market Share in India (Rs 600 mn: market size) 15-20%
Rs 130 for 100 tablets
Sugar Free Gold Zydus Wellness
Rs 55 for 100 tablets
Sweetex Sweetos Ensigns Healthcare Pvt Ltd, Pune SugaRite Rigil, South America Steviocal Rigil, South America Kalorie 1, 1995 Mankind Pharma Zero, 2005 Alembic Consumer belonging to SEC A1 A2 between 30 to 40 years Heat-stable hence cook and bake Aspartame free, ultimate natural sweetner Wasim Akram, brand ambassador (a Pakistani cricketer who is diabetic) Promoted as livwlite; Two-phase promotion: Phase 1: educate about sucralose. Phase 2: focused on benefits of zero with TV as lead medium Rs 60 for 90 tablets Targeting 10% market share Twin-pronged strategy of targeting doctors and diabetic forums Rs 85 for 100 tablets
mary competitors for Sugar Free in India. Sugar Free has a safe distance from competition. It is necessary for the brand to make the commodity sugar as its primary competitor soon. TV is a necessary medium for advertising to uncover unique opportunities for the masses. It would be useful to advertise in TV programmes based on the target segments viewership data followed by print, OOH, and online interactive forums. Any information seeker should be able to access honest convincing information about sugar and Sugar Free. Bipasha Basu as a brand ambassador has a positive appeal for the elite and is aspirational for general public. The advertising strategy must include measures to engage the customers more through print and online media. Sponsoring events and associating with large and premium college campuses across cities would enable catching customers young.
It is required to tap both online and offline media. This product has an image of being medicinal and made up of chemical ingredients to enable its functioning. Hence it is not perceived as an easy extension to sugar. It is seen more as a low-calorie ingredient for sweets and beverages which might be equally harmful in some other way if it is used regularly in place of sugar. Online media can be used to engage in interactions and clarify apprehensions about Sugar Free and its ingredients. Sugar Free must exist on all new media social networking sites such as Facebook and Twitter, blogs, and chats. This 360 degree approach can ultimately benefit from increasing return on marketing investment for Sugar Free. It would be advantageous to target B2B sector and ensure that the food items are prefixed with Sugar Free as Sugar Free chocolates, Sugar Free cake and so on. One could draw mileage from the brand name. The only apprehenDIAGNOSES
sion is that of the brand becoming generic. The company can mention the names of all outlets that market Sugar Free 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 compared 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 IIISanjay Kumar KarAssistant Dean Rajiv Gandhi Institute of Petroleum Technology Rae Bareli e-mail: [email protected]
n the current competitive scenario as described in the case, the prospects of Sugar Free and its sub-brands look promising. The market is moving towards stronger competition. Sooner or later both domestic and international brands are likely to pose challenges to the market leader. However, going by the performance of the competing brands, it is not so easy for competitors to dislodge Sugar Free from the leadership position occupied for almost the past two decades. In a large market like India, a market share of over 70 per cent is enormous. With limited players in the market, Sugar Free could have felt comfortable and be complacent with the achievements. But the brand management team is looking forward to strengthening its position. The Vice President (VP), Marketing (Consumer Products Division) had been very keenly interested to make necessary changes in the marketing strategies implemented in the past. More importantly, the branding, advertising, and communication strategies needed revamping to revitalize the brand. It Table1: Brand ProgressionPhase Phase I Phase II Duration 1988-92 1993-99 Brand Sugar Free Sugar Free Targeted Diabetic patients Diabetic patients
was certainly a strategic move to capture a higher share of mind and consumer wallet. Roping in Bipasha Basu as a celebrity endorser was a well-thought-out strategy in the light of changes in consumer behaviour, competition, and broader marketing environment.
Brand Building Exercise at ZydusSugar Free was launched as an ethical drug and the target consumers were the diabetic patients. The users of such products were very conservative and were reluctant to expose their health deficiencies. Over a period of time, the company realized that the consumer dynamics along with the market dynamics were changing. There was a serious need for moving from a curative mindset to a preventive mindset. The company therefore repositioned Sugar Free as a lower calorie sweetener (see Table 1) and accordingly sharpened the relevant components of its marketing strategies in order to make the market more responsive (see Table 2).
Positioning Ethical drug: Curative Sweetener: Preventive
Advertising & Promotion Below the line Above the line
Packaging Blue & White clinical look Blue & White clinical look
Retailing Sold through medicine shops chemists: sold as over the counter (OTC) brand chemists, grocery stores: sold as OTC brand
Sugar Free Gold Sugar Free Natura
Low-calorie sweetener: Preventive
Above the line
Vibrant yellow colour
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Table2: Packaging, Price and Value PropositionBrand Sugar Free Gold Application Tabletop applications like tea, coffee, nimbupani, and deserts, etc. Price of Pellets Pack Rs. 20 (40 pellets pack) Rs.55 (100+10 pellets pack) Rs.130 (300+30 pellets pack) Rs.175 (500 pellets pack) Price of Sachet Pack Rs.35 (25+5 sachets pack) Rs.60 (50 sachets pack) Rs.95 (100 sachets pack) Rs.35 [25 sachets pack] Rs.65 [50 sachets pack] Rs.125 [100 sachets pack] Price Rs.30 Price of Powder Pack Rs.90 (100 gms) Value Proposition Healthier alternative to sugar Molecule Aspartame
Sugar Free Natura
Ideal for Rs.20 (20 pellet) cooking & Rs.60 (100 pellets pack) basking like Rs.110(200 pellets pack) halwa, cakes Rs.160(300 pellets pack) and desserts, etc. Pack Size 500 ml Flavours
Sucralose made from sugar
Brand Sugar Free DLite
Value Propositions It is lite n healthy and fizzy; 99% calorie-free
Positioning Sports & Health drink
Apple, Orange, Passion Fruit, Lemon and Peach
Domestic Market and CompetitionThe market was very attractive as the penetration of the sweetener category was minimal. The market size of Rs.1,200 million looks very attractive for less than ten players. Equal with a 15-20 per cent share was challenging Sugar Free the market leader. Brands like Sweetex, Zero, Staviocal, Kalorie-1, and SugaRite were making their presence felt in this nascent market (see Table 3). Brands based on natural plant extracts were emphasizing on stability against heat, thus projecting themselves as ideal for cooking and baking purposes.
Brand PositioningThe decision to move to a platform of preventive product looks sensible. The consumers who are concerned about their health and fitness should be very much interested in the product. Such kind of strategic moves would pay rich dividend in future. The brand is sharing points of parity with the other brands in the category. The points of parity may help to generate category level awareness but points of difference would give sustainable category leadership in the long run. Sugar Free needs to continue with its aggressive advertising strategy. The brand being a market leader with over 70 per cent market share should
Table 3: Comparative Position of Competitive BrandsBrands Sugar Free Equal Sweetex Zero Position in the Market 1 2 3 4 Value Proposition Healthier alternative to sugar Safe and sweet Zero calorieDerived from sugar, tastes like sugar and 600 times sweeter than sugar. Sucralose is the key differentiator. Ultimate natural sweetener; Sheer goodness of the product Sugar substitute A world full of sweetness and free of calories Low calorie and high intensity sweetener; High stability level. Owned/ Marketed by Zydus, India Merisant. Alembic, UK Target Consumer Fitness-oriented consumers People having problem with sugar People having problem with sugar Proactive health seekers in Sec-A & A2 cities in the Age group of 30-40
Staviocal Kalorie-1 SugaRite
Rigil Mankind Pharma Naturell (India) Pvt. Ltd. EnSigns Healthcare
SugaRite is an ideal sweetener for diabetics & the calorieconscious consumer
aim for sustainable competitive advantage. Competitors may replicate the product benefits and develop identical or better products with stronger distribution network but replicating strong bond with consumers is a difficult task. Hence, the brand should look for emotional points of difference and build on from there. Emotional points of difference can drive greater distinctiveness for the brand because they create the brands personality. Emotional points of difference educate consumers about the brand, and that understanding may help to establish rational points of difference into the brand. Bipasha Basu is seen as an iconic star and many fitness-oriented people associate her with perfect fitness. Similarly, Simran as an endorser was expected to create positive brand response in South India.
dio can serve to be the best alternative medium to reach this particular target market. These executives may not have the time to watch TV; they look for relevant news in newspapers and periodicals, but they listen to radio while commuting between home and workplace. Thus, radio gets exclusive attention when they have nothing else to do, making it the most impacting medium. Vocal ads are cheaper to make and the radio slots are also cheaper compared to TV and print; thus the company can achieve more coverage with less investment. Internet With a vast reach and easy accessibility, internet can be the new age communication tool. Internet advertisements can be in the form of banner ads, e-mail ads, online games, surveys, etc. Sites related to health and wellness, sports and medicine can be targeted to display the ads. Advantages of internet advertising are: Large growth and expanse Large target market Good conversion tracking Low entry level fees Low cost Greater range and life
360o Brand CommunicationThe brand management team constantly wanted to effectively and efficiently connect with the target market. In the recent times, increasing number of brand managers have been exploring and adopting 360 communication approaches to reach the target audience. The brands can no longer depend on any one medium to productively reach the target consumer. Over the last two decades, the market dynamics and consumer preferences have significantly changed. Now the consumer is having many options, so also the marketers. For instance, now the consumers have started to shift from electronic mail to instant messaging. The marketers are gradually moving in the same direction to catch the consumers. Recent studies have shown that the online video market has been growing strongly. That means the engagement level of consumers is improving all the time. Such phenomena throw several opportunities for the brand managers to establish a stronger bond through engaging relationship with the consumer. Zydus should start indulging in interactive mode of communication. Till now the brand has been advertised using only TVC and print media. The brand should use multiple media to communicate with the target consumers. Radio In the recent years, radio has been rejuvenated as the mass media. With numerous FM stations coming up in the metros and other big cities, radio is today the new buzz and medium for mass communication. As Sugar Free targets the working class executives and professionals, raVIKALPA VOLUME 36 NO 1 JANUARY - MARCH 2011
Zydus should use internet to effectively and efficiently reach the target audience. Internet being one of the cheapest options, the brand may generate enough awareness and conversion. Exciting viral campaigns may be developed and circulated through employees and their network. It has been seen that producing virals are cheaper, and if used 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 placements should be explored in future. Online Platforms Research conducted by eMarketer reports that online communities and forums are the best media for finding out about new products (51%), helping to make a purchase decision (47%), entertaining people (31%), and keeping up with friends and family (10%). In recent times the online forums and communities have been playing an important role in disseminating information and persuading consumers to take favourable decision on brands.
Zydus can develop online communities for Sugar Free and effectively build a stronger brand over a period of time. Research shows that conversations and endorsements of brands on social networks are trusted more than ads; so, Zydus may sponsor stories in the social networking sites like Facebook. When it comes to connecting with consumers on social networking sites, brands that offer incentives and entertainment are ahead of competition. The social networking sites offer excellent opportunity to Zydus to keep its brand connected with the consumer and create a lasting impression. Zydus should make the Sugar Free website more interesting and exciting to attract more visitors. The brand should develop its own blogosphere and attract users to actively participate in sharing their experience. Probably a group of health and wellness consultants could be involved to address the concerns of the participants in the blogosphere. Mobile Mobile connectivity has reached the remotest part of the country. Mobile can be the best advertisement medium in terms of value on investment. This medium can assure maximum coverage, and may thus have the highest reach with the lowest possible investment. There are different types of advertisement templates that can be used for mobile 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
location, such hoardings should be placed near the buying or consumption centres. Of course, outdoor campaigns draw attention but finally trial and conversion should be the key. Digital Display Digital signage displays are the latest technologies used for advertising. Digital displays have no boundaries as far as locations are concerned. They range from billboards and hoardings on buildings and roads to digital signs along the boundary of a cricket ground, malls, and shopwindows, and laser shows at social events. The digital displays can be used for advertisement, corporate communication, and brand building, enhancing both consumer behaviour and environmental experience. More attractive and innovative the displays, more would be the impact on the target market. Following are the advantages of digital signage display: Content of the signage can be altered in real time allowing greater flexibility and scheduling of all advertisements depending on the time. Digital signage displays can be used for both indoor as well as outdoor advertising. Content and styling can be changed depending on the types of customers. Cost-effective compared to other media. More engaging, eye-catching, and modern than traditional methods. Zydus may explore the possibility of using digital signage in strategic locations and events to create maximum possible impact on the viewers. Public Relations The recent developments in information and communication technology provided plenty of options to the consumers for gathering desirable information from public domain. Information is fast becoming a powerful tool in the hands of consumer. Negative or harmful information may erode equity of any firm or brand. Firms use public relations (PR) to prevent brand equity erosion. Many a times they use PR as a reactive measure to minimize undesirable loss of consumer trust, consumer base, and market share. PR activities can be effectively used to build sustainable and engaging relationship with the stakeholders. Zydus should build a stronger PR department to capitalize on the powerful corporate image of the company.DIAGNOSES
A new concept of viral marketing has been introduced in mobile advertising. Under this concept, a recipient of an SMS forwards the same to his/her acquaintances and thereby becomes a part of the advertising experience. This increases the range of the advertisement and also helps in more conversion due to the referral factor. Zydus can use one of the above or a combination of all types of mobile advertisements to maximize the benefits. Outdoor Zydus has been using outdoor advertising but strategic locations need to be identified. In addition to high traffic
Sugar Free Fitness Camps Zydus should arrange fitness camps in association with fitness centres or private clinics and health centres. This would help in generating awareness and interest among the targeted group of consumers. Such camps may lead to trials and repeat use of Sugar Free. Doctors and health consultants, dieticians, and health trainers can be effectively used to convert non-users to users. It no longer falls under the ethical drug category; but the health consultants can still advise their clients to use Sugar Free. Sponsorship The company should sponsor local, national, and international events. Of course, the costs and benefits of any sponsorship need to be kept in mind. Events like Mumbai and Delhi Marathons may bring desired results with comparatively less cost. Such social cause marketing could prove effective for Zydus. Partnering with Others Zydus should explore joining hands with suitable cafes and food joints across the country to promote Sugar Free brands. They can even establish strong symbiotic relationship with good hotels to increase its usage.
Strategic OutlookNew Products Development and Introduction Looking at long-term growth opportunities, the company should bring in new products in the niche categories wherein the firm has first mover advantage. It should introduce/acquire related or innovative products to enhance both top line and bottom line. Required infrastructure/facilities should be developed to cater to the ever increasing demand for quality products in the rural and urban markets. Category Education In a market like India, the company needs to emphasize on category level education through conventional and unconventional media. Lesser number of players means that the firm needs to spend more money to create the category level education in the market. However, the investments made in the brand building activities are going to pay rich dividend in terms of greater awareness and higher level of product acceptance. Category Management The organized retail segment has been growing over 20 per cent for the last couple of years. This has opened up another distribution and retail channel for the manufacturers brand. There is a strong need for Zydus to seriously consider increasing sales force to provide customized service to the organized retailers. The com-
Brand StrategyPossible strategic options available to brands are presented in Figure 1. Zydus being the market leader should pursue option1.
Figure1: Brand Strategies available to Different BrandsOption1 Consolidate market Attack your own weaknesses Block every strong move Monitor every move Strike back with counter measures Keep something in reserve Smoothen things over to keep the market stable Option3 Grow share in one sector Move into uncontested area Follow through the pursuit it is as important as the
Option2 Grow brand share Attack the weakest point of the leaders strength Dont rely on one point of attack
initial manoeuver Keep forces concentrated
Option4 Find a gap in the market Identify territory small enough to defend Never act like a leader, or fight a lost cause Be narrow and deep in focus Develop alliances
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pany should strategically look into the key accounts to build collaborative and sustainable relationship with the modern retailers. In the long run, this would certainly help to minimize expenses and maintain a stable growth rate. Being the market leader, Zydus should lead from the front 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 Category Captains role in the leading retail stores. This would lead to more sales and stronger bottom line and more importantly help to build stronger customer equity. Such strategic moves would potentially contribute toward healthier business and much higher corporate brand equity.
Case Analysis IVDeepak BhattManaging Director & CEO Learning Lab (India) Pvt. Ltd. Ahmedabad e-mail: [email protected]
very successful business is built on an appropriate judgment of timing, opportunity, and responsibility, and not infrequently, humour. However, nothing is more critical than the ability to sense the market. A senior executives instinctive capacity to empathize with and gain insights from customers is the single-most important skill he or she can use to direct technologies, product and service offerings, and communications programmes; in fact all elements of a companys strategic posture. This case presents a review of the changes happening in consumer behaviour, competition, and the broader marketing environment, and offers a plan of action for the future of Sugar Free brand. During the last 20 years, hundreds of new restaurants and hotels have come up around the globe. In addition, hospitality and food industries have undergone globalization which has increased the number of competitors within the industry. In this situation, to establish a non-diabetic brand like Sugar Free with new strategies is indeed a challenge for the Zydus Group. The company that really understands how consumers will respond to this medical product vis--vis the consumer products with respect to their features, price, and advertising appeal would have a great advantage over its competitors.
Free from Medical to the Cosmetic Division and then into Consumer Product Division and accordingly designed a strategy to give it a new look, with a message to the society about the usages of Sugar Free. As per Mr. Anand Deos statement in 2004, The growing health concern has opened up a vast market for sweeteners in India. We have captured only three per cent of the entire market and it has targeted a turnover of Rs 123 crore in the end of the financial year 2006-07. One very interesting point to be noted here is that sugar substitutes do not help in losing weight; in fact, surprisingly, it actually helps in gaining weight because of the way its chemical compounds break and get absorbed in your body. However, FDA, the American Cancer Society and the National Cancer society, after being convinced by various study reports, have together declared that it is absolutely safe and can be used as an alternative sweetener for diabetics and obese or those who have been recommended less calorie intake.
Business Level StrategyDistribution issues come into play heavily in deciding on the brand level strategy. In order to secure a more exclusive brand label, it is usually necessary to sacrifice volume it would do no good for Sugar Free to create a large number of low-priced chemists and retail outlets (Kirana Stores). Sugar Free is the oldest and the largest selling sweetener and is a market leader with a 72 per cent share. It is essentially in order to re-emphasize its leadership position that Sugar Free has been renamed as Sugar Free Gold.DIAGNOSES
The Case Overview: Corporate Level StrategyIn Phases I, II and III, consumers were under the idea that Sugar Free is meant only for diabetic patients and should therefore be prescribed by doctors. But after changes in Law permitted it to be sold as an Over the Counter (OTC) item, the company decided to move Sugar
Some firms can be very profitable going for quantity where economies of scale come into play and smaller margins on a large number of units add up e.g., McDonalds survives on much smaller margins than upscale restaurants, but may make larger profits because of volume. Some firms choose to engage in a niche strategy where they motivate most customers to focus on a small segment where less competition exists (e.g., clothing for very tall people). Many channel intermediaries focus heavily on customer interface as a way of creating competitive advantage and cementing the relationship with their supplying producers. In the case of Sugar Free, a niche strategy has been adopted for reaching to individual customers and towns through two channels chemists and local grocery stores from where people can buy the product very easily. Follow-up with grocery stores and chemists on a continuous basis has helped in expanding product volume and services. The willingness of distribution channel intermediaries to market Sugar Free product is also an important factor. Grocery stores and chemists may have interest in a variety of products. They may decide not to support a particular product if it requires too much investment (e.g. on training, display equipment, warehouse, etc). But through different product promotion schemes, the distributors convince the shop owners to stock Sugar Free by promising to take back the unsold stock. The Sugar Free sweetener mainly contains saccharin (most commonly used in India especially for tea and coffee), aspartame, acesulfame K or non-glucose carbohydrates like fructose, isomalt, etc. Saccharin and aspartame are safe enough; though there are rumours of their association with bladder cancer and brain tumour, there have been several rigorous studies denying these sideeffects. Aspartame is made from two amino acids: aspartic acid, and phenylalanine. Saccharin is made from the reaction between sulfur dioxide, chlorine, ammonia, and two biochemical acids. The company negotiated with different firms for getting raw materials at a very low price so that the saving can be used for involving famous personalities in the advertisements for Sugar Free. Also Sugar Free came to be accepted as a lifestyle product which worked well with the consumers. A new television commercial, created by Rediffusion, wasVIKALPA VOLUME 36 NO 1 JANUARY - MARCH 2011
also launched for Sugar Free Gold that emphasized on its fitness proposition. While earlier, the communication was targeted generally at fitness-conscious people, in the light of the new launch, the team has strategically split fitness into exercise and diet. Hence, Sugar Free Gold will operate specifically in the areas of fitness and lifestyle (and not diet/food/indulgence) Explaining the rationale of the commercial, Gaurav Bhatia, Client Servicing Director, Rediffusion, said, The audiences we are talking to are passively conscious of their fitness and as they generally lead a stressful life, exercise usually gets neglected. Sugar Free Gold thus offers them a first step to exercising. The ad aims to tell them to make a start with Sugar Free Gold. However, it is not a substitute to exercise, but this is the least one can do about their own 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 soft drink using artificial sweetener called Dlite. For this product, the company has invested heavily on promotion schemes like distributing free sample pack and wordof-mouth marketing. The major players in the market include Nutrasweet, Tate & Lyle, Nutrinova, Merisant, McNeil Nutritionals, Danisco, Spherix, and Imperial Sugar. Despite the anticipated developments in the market, many food and beverage companies globally are said to be steering towards a health and wellness trend, replacing artificial ingredients, such as colours and sweeteners, with ingredients considered more natural. It is also important for consumers to recognize their role in evaluating health claims and product comparisons. While advertisers are aware of the need for truth in advertising, their desire to sell products at times over-shadows an accurate disclosure of product attributes. Advertisers should bear in mind that inaccurate or vague health claims have the potential of causing economic hardship, illness, and even death. Marketing strategies used in developing nations should particularly be subjected to the highest standards of truth in advertising.
RecommendationsCompanies have traditionally been protective of the innovation activities in product and process development.
That thinking, however, is starting to change. The following suggestions may help Sugar Free succeed in todays market. Sugar Free should consider an appropriate marketing strategy and for that have imaginative marketing campaigns. For example, knowing that consumers are more receptive to food advertising when they are hungry, Sugar Free advertisements can be telecast around snack time, late in the afternoon and morning. Usually Sugar Free is initially adopted by a few consumers and only gradually accepted by the rest of the population. The company that introduces the new product must be financially sound to stay afloat until their products become a commercial success. It is also important to please the initial customers, since they will in turn influence many subsequent customers brand choices. A competing firm that targets young population is likely to consider repositioning. To assess the threat, the company would need to examine its assets (e.g., technology, patents, market knowledge, and awareness of its brands) and the market environment against the pressures it faces from the market. For example, although we may have developed a product that has great appeal for consumers, a recession may reduce its demand dramatically. Research should be carried out by a professional agency before launching the product. It could help the brand reduce risks associated with it. For example, Coca Cola did a great deal of research prior to releasing the New Coke, and consumers seemed to prefer the taste. However, consumers were not prepared to have this drink replace traditional Coke. Another method to revitalize the Sugar Free brand is through Surveys which are useful for getting useful information. Surveys can contain open-ended questions which do not restrict the respondents to reply from the listed options. However, open-ended questions are often skipped by respondents, and coding them can be quite a challenge. In general, for surveys to yield meaningful responses, a sample size of over 100 is usually required for precision. Forming focus groups is useful before launching a new product version of Sugar Free or modifying the existing one. A focus group aimed at introducing sugarfree cookies might first address consumers snacking preferences, only gradually moving toward the spe-
cific product of sugar-free cookies. By not mentioning the product up front, bias towards a specific product can be avoided. Such a discussion might reveal a concern about health and a desire for wholesome foods and thus indicate their inclination towards avoiding artificial ingredients. Projective techniques are used when consumers feel embarrassed to admit to certain opinions, feelings, or preferences. For example, many older executives may not be comfortable admitting to being intimidated by Sugar Free. It has been found that in such cases, people will tend to respond more openly about someone else. Thus, we may ask them to explain reasons why a friend has not yet bought a Sugar Free, or to tell a story about a person in a picture who is or is not using a product. The main problem with this method is that it is difficult to analyse responses. Internet now reaches majority of households worldwide; this has increased the use of online research. One potential benefit of online surveys is the use of conditional branching. In the conventional paper and pencil survey, the respondent may be asked if he has bought a Sugar Free during the last eight months. If the respondent says no, he will be asked to skip several questions. If the answer is yes, he would be instructed to go to the next question which, along with the next several ones, would address issues related to this shopping experience. However, some consumers may be more comfortable with online activities than others and not all households will have access to internet. A more serious problem which has consistently been found in online research is that it is very difficult, if not impossible, to get respondents to carefully read instructions and other information online there is a tendency to move quickly. This makes it difficult to perform research that depends on the respondents reading of a situation or product description. Communicate, communicate, and communicate. Many mediums are working together to present a unified message with a feedback mechanism to make the communication two-way. One should be sure to have an understanding of non-traditional mediums, such as word-of-mouth and how it can influence his position in the consumers mind. In how many ways can a customer hear (or see) the same message through the course of the day, each message reinforcing the earlier images?DIAGNOSES
Sugar Free should achieve 360 degree communication objectives by: Developing brand awareness in rural area through wellness programmes Increasing category demand in terms of small packs and schemes Changing customer belief or attitude through medical team Enhancing purchase actions Encouraging repeat purchases through retail programmes/promotions Building customer traffic through surveys Enhancing firm image through employee brand activity Increasing market share through sales team
Increasing sales through awareness Reinforcing purchase decisions Competing in the marketplace not only means having a product line for which there will be demand from the consumers; it is also important to know what would make it more competitive and profitable. The Zydus Group has seen a continuous growth and introduction of new products at regular intervals. In addition, the company has also been expanding its business portfolio by adding other sub-units, and venturing into other areas such as Research & Development. In order to ensure that it grows further in the future, the company must adopt a strategy to enhance its potential in the changing market environment.
From the bitterness of disease man learns the sweetness of health. Catalan
VIKALPA VOLUME 36 NO 1 JANUARY - MARCH 2011
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