Bonus Optional Write-Up Number 10

Article Title: In A Liquid State

Source Publication: Pitch Magazine

Date of Publication: July, 2011

Course Title: Marketing Management 1

Submitted By: Apoorva Sharma Phone: 9899449151 Email: apoorvasharma2001@yahoo.com

Date Submitted: August 16, 2011

Date Due: August 16, 2011

Summary of the Article

The breakfast market in India has always been dominated by the traditional Indian nashtaa. Due to changing lifetime trends people are skipping breakfast. Research shows that 20 percent people miss breakfast and 15 % have inadequate breakfast.

Organized serial breakfast market is estimated at rRs. 400 crore. Out of this oats are growing at 30%. Though the market size of this serial is small at Rs. 100 crore. Kelloggs is the market leader with market share of 75%.

The fruit juice market is worth RS 750crores and is growing at 20%. Daburs Real juice is the market leader with 54% market share followed by Tropicana with 35% share. Dabur Real is the category creator. The cheese market is roughly Rs. Two thousand crore and is growing at 15%. While the cheese spread market is Rs. 1200 cr. And is growing at 20%.Currently the market is dominated by Amul with 70-80% share. Another developing category is the margarine. Zydus Cadillas Nutralite is the category creator and the market leader with 70% share of the Rs. 300cr. Market.

Health conscious customers are giving preference to probiotic and slim curds over regular ones. Similarly, packaged milk is preferred over loose unbranded milk. Products like jams and jellies and branded eggs are losing their space The article talks about changing trends in the market as rushed mornings have made breakfast a stress point. As a result people have inadequate breakfast or are skipping it.

Acknowledging this trend marketers are using a combination of health, taste, convenience to make their way to Indian breakfast tables.

Issues Raised

1. Market Analysis

The article gives a market analysis of the foods and beverages industry in India, examining the reasons for the rise in demand for Convenient ready to eat breakfast meals, potential for growth of the industry, strategies for success in the market, etc.

2. Segmentation

The article raises a critical point about how the brands are taking the segmentation route to make the consumer more interested by offering a variety of products.

3. First Movers Advantage

The article exemplifies the importance of adapting to changing consumer needs quicker than the competition. For instance, Dabur launched its Real fruit juice in 1997 and created the category of packaged juices in India. It has since been the market leader.

4. Stock Keeping Units

In order to ensure the success of products, it is essential to introduce various stock keeping units (SKUs) of different sizes. This encourages the retailers to stock more units as well as push the consumption of cereals. For instance, Quaker Oats are available now in a single serve pack of 35gms at Rs.8. Kellogs too has launched its Chocos in single serve Rs. 10 pack. This is what the juice brands are currently lacking as there is no variety of sizes and price points being offered.

5. Consumer Orientation

It is essential to understand the need of the on-the-go consumer for ready to eat breakfast meals. Also, the Indian consumers are becoming increasingly health conscious and demanding convenient nutritional foods and beverages. It is essential to keep track of consumer preferences and tastes. For example, Dabur identified that Indians preferred stronger sweet taste.

6. Competitive Advantage

In order to ensure successful marketing, marketers must look for breakthrough opportunities that give them sustained advantage over the competition. They must identify changing consumer trends and adapt to them quicker, cheaper and better than the competition.

What I Learnt from the Article

The article points out that in a category which has low product differentiation and low price sensitivity, brands focus more on the distribution while brand building takes a back seat. I learn that in a product category like bottled drinking water, which is a low involvement category, it is crucial that the product is widely distributed. Distribution also plays a major role in building consumer trust. For a product like water, the trust of the consumers is essential. Consumer is confident about the brand when there is visibility of the brand. Also, usually the retailers stock a single brand in their outlets. A suitable approach to ensure widespread availability is to put up manufacturing plants closer to the markets like Bisleri. This also helps in bringing down the high cost of logistics and operations. I also learnt that matching the product attribute with the brand positioning correctly plays an essential part in ensuring the success of a brand. For instance, Kinleys Boond Boond Mein Vishwas campaign matches the trusted purified drinking water offered by the brand. The article also teaches the importance of segmentation in a low involvement category. It helps in targeting the right customer. The article exemplifies the role of pricing. It points out that the most important role of pricing is to segment the market, as in the case of bottled water business divided into the high priced premium natural mineral water and the low priced table water.

The article also focuses on the importance for a brand to understand and cater to the changing needs of the customers. Today the customers are always on the go and are increasingly becoming health conscious and therefore the demand for bottled drinking water has gone up. I also learnt the concept of first movers advantage. The article demonstrates this by citing the example of Bisleri which has become a generic word for packaged drinking water and was the sole player for the longest time. The article also identifies the threats and challenges faced by the brands due to the unorganised players and the increasing concern over the eco-non-friendliness of bottled water as a category. In whole, the article helps to understand the approach marketers need to adopt while operating in a low price sensitive, low consumer involvement category with extremely limited product differentiation.