AMRITA SCHOOL OF BUSINESS KOCHI

STRATEGIC BRAND MANAGEMENT ASSIGNMENT

Study On Brand Failure : Gold Spot

Done by : Group Goldy M. Viswam (16) Indu Mohandas (21)

Neema Madhav Prasad (36) Lakshmi Chandra (30)

SOFT DRINK INDUSTRY IN INDIA The Indian Soft-Drink Industry is a 3500 crore rupee Industry comprised of consumers throughout the country, and of allages. The industry has been comprised of all Indian Soft-Drinks manufactures and the multinational Coca-Cola up to1976.From 1976 to 1989, the industry only comprised of Indian manufacturers namely, Parle, Campa-Cola and Dukes. Decades of 90s have brought changes in Government Policies of liberalization, which has helped user in two huge American Multinational Pepsi-Cola international and Coca-Cola.

THE CHRONOLOGY OF SOFT-DRINKS SCENARIO IN INDIA 1977 Refusing to dilute its equity stake, Coca-Cola winds up it operations in the country. Thums-Up from Parle and Campa-Cola from Pure Drinks launched.1986 An application for a soft drink cum snack food joint venture by Pepsi. Voltas and Punjab agro is submitted to the IndianGovernment.1988 Final approval for the Pepsi food limited project granted by the Cabinet committee on economic affairs of the Rajeev Gandhi Government. Coca-Cola South Asia Holding Incorporation of the U.S. files an application to manufacture soft drinks concentrate in Noida (Delhi) free trade zone. 1990 Pepsi Cola and 7 Up launched in limited market in North India. The Government clears the Pepsi Project again but with the brand name changed to Lehar Pepsi. Simultaneously, it also rejects the application of Coke. Citra hits the market from the Parle Stable.

1993 Pepsi launches Teem and Slice tocounter Limca and Maaza respectively from Parle. Pepsi captures about 30% market share in about two years. Coke files an application for a 100% owned soft drinks company with FIPB. Voltas pulls out of the Pepsi Food Limited joint venture. Pepsi decides tobuyout the Voltas share and raises its equity to 92% Report of Coke Parle joint gain strength. Pepsi launched 1 liter bottles in Pepsi-Cola, Mirinda and Teem flavors. Sweeps off the 100ml segment over Pure Drinks. Coca-Cola buys out Parle and major leaders of the market, Ramesh Chauhan, becomes a part of the Cokegame plan. Fountain Pepsi launched in the Northern part of India.

COCA-COLA IN INDIA The Coca-Cola Company entered India in the early1950s. It set up four bottling plants at Bombay, Calcutta, Kanpur and Delhi. In 1950 as there were negligible companies in Indian market therefore Coca-Cola did not face much competition and they were accepted in Indian market more easily. By the end of 1977 Coca-Cola had captured more than 45% of market share in India. Then Coca-Cola left India following public disputes over share holding structure and import permit. As per FERA REGULATION the company was required to India close operation by May 5, 1978 yet strongly enough the companys operation come to end in July 1977.In October 1993, Coca-Cola returned to India after 16years of absence with the slogan Old waves have come to India again first launched in HATHRAS near AGRA HOME of the famous TAJ MAHAL. At this time PARLE was the leader in soft drink market and had more than 60% of the total market share in soft drink. Coca-Cola joined hand with Parle and strategic alliance with Parle export give the company instant ownership of the nation top soft drinks brands Thums-Up, Limca, Citra, GOLDSPOT and Maaza access to Parles extensive 62 plant bottling network and a base for the rapid introduction of the companys international brand by striking a $40 million deal with Parle Coke almost a

clear sweep and made it goal as To become an all occasion drink not a special treat beverage

ABOUT THE BRAND GOLD SPOT

GOLD SPOT

Logo

Parent Company Category Sector Tagline/ Slogan USP STP Segment Target Group

Coca Cola Beverage Food Products Fun catalyst; Zhing thing!! Vibrant color, tempting taste and tingling bubbles

For all people seeking a soft drink for regular occasions, parties All age groups Lower, middle and upper class people

Positioning

Fun youth brand

OVERVIEW OF THE BRAND

Gold Spot was one of the three brands of aerated soft drink (Soda) started in India by Parle under the initiative of its founder and CEO Mr. Ramesh Chauhan in 1977 after the exit of Coca-Cola and Fanta from the Indian market. It was artifically flavoured and coloured orange. Gold Spot was introduced along with Thums Up and Limca. This iconic youth brand was positioned as " Zing Thing" and was promoted heavily through all media. The jingle "Gold Spot.. The Zing Thing" was one of the most memorable jingle at that time (still that jingle lingers in the mind of old timers).

Gold Spot was positioned as the youth brand and the ads talked about being crazy about the brand Parle later sold the three brands- Thums Up, Limca and Gold Spot to Coca-Cola in 1993 after its re-entry into India, for a valuation of around 10 million. In

spite of its wide popularity, Gold Spot was withdrawn by Coke from the market in order to re-make space for Coca-Cola's Fanta brand. Gold Spot had a catchy punch line - "The Zing Thing." However the brand has a good following in the rural areas especially in Maharshatra, to keep the brand alive, Gold Spot is sold as a soda in these markets. In the gap of the sometime India Government policy based forced withdrawal of Coke from the Indian market the Gold Spot flourished. The Los Angeles based band Gold Spot is named after this fizzy drink. According to one of the interviews with Siddhartha Khosla (the core member of band), Gold Spot was very popular back in India at the time. It was introduced in India when all the foreign brands like Coca Cola, Pepsi, etc. were taken back to the US.

AD CAMPAIGNS OF GOLD SPOT

REASON FOR FAILURE Gold Spot is a sad story in the Indian Branding world. This iconic brand was killed for paving way for Coke's brands in India. Gold Spot was one among the three major soft drinks brand that ruled Indian market along with Thums Up and Limca. The brand was built by Rames Chauhan of Parle after the exit of Coca Cola from India during 1977. Chauhan spotted the opportunity and three mega brands were born. When Coca Cola came back to India in 1993, it bought out the three mega brands from Chauhan for a consideration of $10 million. Then Coke slowly began killing the Parle brands to make way for its own brands. Thums Up was sidelined in favour of Coca Cola. Limca was sidelined and Gold spot was killed to make way for Fanta.

SWOT ANALYSIS

STRENGTH

WEAKNESS

Swot Analysis Of Gold Spot

OPPORTUNITIES

THREATS

STRENGTH Strong advertising network Excellent branding and advertising Excellent distribution and availability Popular among youth WEAKNESS Aerated drinks not popular with health conscious people Long term ill effect of health. No Fruit content but still advertised as Orange drink OPPORTUNITIES Leverage successful brand Coca Cola Buy out competition More Brand recognition THREATS Threat from other aerated drinks competitors

Threat from substitutes like fruit juices Boycott from health conscious people

THEORY : CAUSES OF BRAND DECLINE To understand why brands decline, we draw upon the theories of brand evolution. The popular product life cycle (PLC) framework identifies four stagesintroduction, growth, maturity, and decline. The simplicity of the framework is appealing. In the context of brands, managerial and entrepreneurial activities constitute the generative force, the market environment acts as the selective force, and competitors actions and responses to marketing initiatives constitute the meditative force. CERTAIN ACTIONS leading to brand failure : Product Quality Price Increases Price Cuts Brand Neglect: When a brand becomes popular, inaction creeps in. Even successful brands need constant nurturing. However, management can lose sight of this, start looking at its core brands as Cococola neglected GoldSpot for Fanta, and neglect to invest in them. Inability to Stay with the Target Market: When the target market moves away from the brand, the brand can move into decline. In the 1990s Gap decided to do more to reach out to teenagers and young adults, because it was a growth segment and offered better rewards.

DECONSTRUCTING BRAND DECLINE The ultimate sign of an impending brand death is a significant drop in unit sales over a sustained period. While sales can fluctuate in response to the market dynamics and competitors actions, a prolonged decline is a clear warning sign. Some managers counter it by quick-fix solutions such as raising prices or introducing brand extensions. Such solutions may push up revenues, but can often mask and compound the real problems. Therefore, to avoid (or reverse) a damaging outcome, it is important

to deconstruct the decline in terms of reliable precursors to sales. To do so, we revisit the concept of brand equity that was outlined earlier in the paper: the differential impact of brand knowledge, which comprises of brand awareness and brand image, on customer response. REVIVING THE BRAND GOLD SPOT 1. Earlier image was zing thing . This jingle could be changed to more attractive one in order to attract the consumers. 2. 3. 4. 5. Launching of ad campaigns with regard to corporate social responsibility. Being a sponsor for events to publicize it . Company should try to add a fun element for the rejuvenation. Changes could be made in the shape of the bottle such as creating wider neck, also make them available in different shapes enabling the company to use less plastic and thereby improving margins. 6. They could change their packaging from glass bottles to plastic bottles, cans and make it available in wide range of quantities increasing the sales volumes. 7. 8. Increased advertising in media especially television. Introducing vending machines and taking a first initiative to set up automated machines in offices , shopping malls, airports and other high traffic points. 9. 10. The rebirth of the brand essentially in store brands such as Reliance etc. Providing free samples.