Transcript Victor Plus

Victor Brand
An Analysis by
IIMC - SMP 06
Hyderabad
Company Overview

Established in 1989 as Victor India Ltd (VCIL)
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Manufactures cocoa-based products – mainly chocolates
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In 1993, noting underutilization, rented its production facilities to an
MNC for 10 years
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In 2000, 42% of VCIL’s turnover came from processing charge earned from
MNC while remaining 58% came from selling its products
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Launched cocoa based milk beverage brand “Victor” in 1996
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Due to low sales, initiated a brand building program in 2000 contracting
Elite Consulting Co (ELCC)
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“Victor” brand re-launched as “Victor Plus”
In spite of the program, the brand could not break even
Product Suite
VCIL
Product Type
Cocoa-based
Beverage
Consumer
Industrial
Chocolates
Victor
Plus
Moulded
Enrobe
d
Semi processed
Eclair
Cocoa
mass
Inputs
Cocoa
butter
Cocoa
powder
Choc’t
e
mass
Value Chain
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•
250 distributors of products spread over 18 Area Sales offices across the country
25,000 active retail outlets (Nestle & Cadburys’> 100,000 outlets)
Marketing & Distribution Structure
% Retail Outlets
100
Ex. Director (Mktg)
Corp Office
Bangalore
80
VCIL
Marketing Mgr
50
15
5
0
A
A+
0
D+C
B
Cost Structure
Area
ASM1
ASM
2
SR
SR
SR
SR
SR
Region
SR
VCIL
Servic
e
Genera
l
Productio
n
ASM – Area Sales Manager
ASO - Area Sales Office
SR – Sales Rep
ASO2
SuperStockist
Disti 1
works with
Corp
ASO1
Retail
Outlet 1
Comm: 12%
Disti 2
Retail
Outlet 2
…
…
Comm: 06%
… Comm: 06%
Retail
Outlet n
Beverage Market

In 1996, when Victor was launched, many strong established players existed in the
market – Cadbury’s India, Nestle, Smithkline Beecham (SB), Heinz’s, Amul (Table 1)
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ELCC Study findings
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Household segment - 60%; Institution segment – 40%; No differentiated product offerings
Most milk beverage consumption – children (6-16 yrs) with family income Rs. 10,000/- pm
Most consumers prefer white beverages (therapeutic benefits) over brown beverages (taste)
Each family consumes on an average 30-40 gm of the product;
Brand loyalty is low – except for Horlicks and Bournvita
Very few consider Victor as a national brand and have not placed it in consideration set
Blind taste tests have brought out positive evaluation towards Victor
Table 1: Major players in Market (1996)
Player
Brands
Brand
Position
Cadbury’s
Bournvita
Established
Nestle
Milo
Established
Table 2: ELCC Study (Brand Evaluation) – Weighted Attributes
1.2
1
0.8
0.6
Price
Taste
Nutrition
SB
Horlicks, Boost,
Viva, Maltova
Key player
Heinz’s
Complan
Key player
Amul
Amul
Not a key
player
0.4
Brand Name
0.2
Packaging
Easy to Mix
0
Victor Plus
Product Features
Granular
versus Powdery (Victor)
Nutrition: Better ingredients
Packaging: New label and color combination (maroon,
blue, yellow, red and white)
Marketing: New Positioning Statement over Victor –
“The tasty and nutritious cocoa drink with Milk”
Other ELCC Recommendations
Variant
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of Victor for Institutional segment
Less price than Victor, less nutritious than Victor Plus
Target – Vegetarian restaurants, Juice Parlors
Implementing ELCC Recommendations
Brand Promotion
Increased
Sales Promotion + Advertising spend in
2000 over 1999
For
Year 2000:

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Advertising channels not considered: Magazines, and
Television (high tariff cost)
Advertising channels considered
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Northern and Western States: “Victor Plus” Sponsored
Cultural and Sports Events for the year in 100 good schools
in B class towns
Four Southern States: Newspaper ads in 1 English and
1 regional newspaper
Victor Sales Promotion +
Advertising (in lacs of
Rs.)
35
25
20
15
10
For
Year 2001:
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Considering advertising through popular magazines in
South, West, and North regions
30
30
8
5
0
1999
2000
TOWS Matrix
Threats
Brand
Opportunities
appeal of competitors taking up shelf space in retail
outlets
Brands such as Horlicks and Bournvita have effective brandbuilding programs
Bournvita and Boost modified their packaging by adding more
color to graphics
Celebrity endorsement – Sachin Tendulkar for Boost – to
sustain market share
Horlicks relying on nutrition – heavy advertising targeting
housewives and children
In 2000, SB spent 7% of total sales on advertising
target new markets – by targeting the
products for Middle Income Groups;
Can create a Niche Product aimed at people
beyond 60 years of age with high nutrition
content OR zero calorie drink, etc.,
Leverage leadership advantage by
advertising the differentiated product offering
for Industrial segment launched by VCIL ;
Can
Weaknesses
Strengths
Retailers
Victor
didn’t stock Victor Plus due to lack of brand appeal
and visibility
Less leverage with retailers and distributors in spite of lower
price and better incentive system;
Victor Plus not considered as a national brand;
and Victor Plus are priced lower than
most competing brands
Attractive Commission Policy
Price advantage arising out of better
bargaining power with cocoa farmers
Air of vibrancy and dynamism at the
beginning of 2000 – ELCC engagement and
industry veteran Srinivasan appointed as Ex
Director (Mktg)
Distribution strengths in B and C class towns
Strategy Recommendations
Short-term (1 years)
1. Continue to focus on the industrial segment and contract manufacturing
business;
2. Continue focusing on keeping Production costs lower by leveraging farmer
relationships and higher production capacity utilization
3. Product Ingredients: Increase the nutrition content in the Product like its
chocolate drink competitors such as Bournvita, Boost;
4. Brand Positioning: Position “Victor Plus” as a tasty choco / health drink
(depending on the chosen customer segmentation)
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Bring out the other ingredients such as “Vitamins”, “Glucose” in packaging and
advertisements
Target housewives and children
5. Television and magazines create broader brand appeal and visibility.
Leverage these channels of advertising
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Leverage celebrity talent to create brand appeal and retain market share
Strategy Recommendations… Contd
Small lots of ‘Victor Plus’ for MIGs and first users;
Long-term (2-3 years)
 Maintain its strong distribution footprint in B and C Class cities;
 Expand the distribution network in A and A+ class cities;
 Have good advertising campaigns and brand endorsements;
 Market Penetration;
 Have niche segments;
 Modified version of Victor brand for industrial consumers like
restaurants;
 Diversify into “white” beverages (5 years)