Management Case

describes a situation faced, a decision or action taken by an individual manager

or by an organization at the strategic, functional or operational levels.
Victor Brand
Simon George
Victor India Ltd (VCIL) was established in
1989 as a public limited company for manu-
facturing and marketing cocoa-based products,
mainly chocolates. The company launched its
cocoa-based brown milk beverage brand Victor
in 1996 and expected that it would be able
to do well in the market against established
and aggressive competitors leveraging on the
costing and pricing advantage. However,
Victor's sales in the initial year could not reach
the expected target. In 2000, the company
initiated a brand-building programme to revi-
talize the brand by making interventions in the
brand's attributes, benefits, and package lead-
ing to. modifications in positioning. The results
were encouraging but the brand was still
struggling to break even. The company was
reviewing the costing of the product as well
as its promotion strategies. The case focuses
on the challenges faced by VCIL in its brand-
building programme.
Simon George is a member of the faculty in the Marketing
Area of the T A Pai Management Institute, Manipal.
e-mail: simon@mail.tapmi.org
Raghavendra, the Managing Director, and
Srinivasan, the Executive Director (Marketing) of
Victor India Ltd. (VCIL) were wondering as to why
their company could sell only 250 tonne of their
cocoa-based brown beverage brand Victor Plus.
Was it due to the ineffective brand management plan
or due to its poor implementation by the company?
For the past four hours, they had been part of the
team discussing and reviewing the brand manage-
ment plan and its implementation proposed by their
consultants Elite Consulting Co (ELCC) for the
year 2000. Ajay Das of ELCC, who was present
in the meeting, had absolute faith in the soundness
of his plan proposal. Jayant, the Marketing Manager,
and the coordinator for the implementation, cryp-
tically commented, "I saw to it that the plan which
was recommended was perfectly implemented.
Nothing more, nothing less." Prabhu, the Executive
Director (Accounts and Finance) sounded positive:
"This year will be the start of a turnaround. The
performance in 2001 will be much better if we are
able to look more closely at the brand's costs and
pricing, product ingredients, and a few critical
product strategies."
VCIL's top management was expecting the year
2000 to bring in a change of fortune for Victor Plus
which, in turn, would give a big boost to the sales
of their more established chocolate brands. The
company thought that they could achieve at least
75 per cent of the forecasted sales of 500 tonne of
Victor Plus. But the sales data presented in the review
meeting at the end of the year indicated that the
performance was not encouraging. However, the
company was beginning to show an air of vibrancy
and dynamism in the beginning of the year 2000,
primarily due to two factors. One, the company
roped in a reputed consultant whose knowledge and
expertise in marketing, the company hoped, would
turn its fortunes for better. Second, the company had
appointed Srinivasan as Executive Director
(Marketing) a year back who had about 20 years of
experience in the industry.

Vol. 27, No. 4, October-December 2002 75 Vikalpa
Company Background
VCIL was set up in 1989 as a public limited company
by the Victor group of companies based in
Karnataka. A modern factory was set up in the
Chickmagalur district of Karnataka with the aim of
processing and marketing cocoa-based products,
especially chocolates, at a cost of around Rs 20 crore
with high capacities of production. In the nineties,
VCIL launched its own brand of chocolates in each
of the three categories of chocolates, namely, moul-
ded, enrobed, and eclairs, with the intention of taking
on the multinational companies (MNCs). Very soon,
the company realized that it could not use its
production capacities fully as it had a large installed
production capacity (Table 1). This forced VCIL
to enter into an agreement with a reputed MNC in
1993. Under this agreement which was valid for a
period of ten years, VCIL was to manufacture
chocolates under the MNC's brand name. The MNC
could also source its additional cocoa requirements
from VCIL. This arrangement was in addition to
manufacturing and marketing of VCIL's own brand
of chocolates in all the three categories. The
company had a turnover of Rs 35 crore in 2000,
with Rs 20 crore coming from sales of its consumer
and industrial products and the rest from the pro-
cessing charge earned from the MNC.
Product Portfolio
VCIL had two broad types of products consumer
products and industrial products. Consumer prod-
ucts consisted of three categories of chocolates,
namely, moulded, enrobed, and eclair. Industrial
products consisted of semi-processed cocoa at dif-
ferent stages of chocolate manufacture. These semi-
processed products were sold mainly to organizations
as raw material for making various other end
products in addition to VCIL's own consumption.
The industrial products were cocoa mass, cocoa
butter, cocoa powder, and chocolate mass (semi-
processed cocoa) and had some established and loyal
customers. VCIL had eight brands of chocolates.
Moulded chocolates were made out of cocoa
butter by melting it and then shaping it using moulds.
These chocolates were the bigger multi-bar type
chocolates. Enrobed chocolates were single bar
chocolates, containing nougat in the centre, coated
with a layer of caramel and enrobed with creamy
cocoa mass. Eclairs were modified toffees consisting
of an outer caramel with a creamy chocolate brown
centre or a milky white creamy centre.
The company also manufactured and marketed
a cocoa-based beverage Victor Plus which came
under the consumer products group. Made out of
cocoa powder, this was a bye-product of the choco-
late manufacturing process and was first launched
in the market by the company in January 1996 as
Victor. The company felt that it had a price advantage
while launching the product in the crowded milk
beverage market dominated by big Indian players
and MNCs. It also thought that its brand may have
better acceptance in the B and C class towns because
of the price advantage arising out of its proximity
and bargaining power with the farmers for cocoa
beans. Moreover, the fixed cost for production was
expected to be very low as it would be borne by
the chocolates and other industrial products. The
first year brought a very modest sales of 95 tonne
followed by an increase of 10 per cent in the
succeeding years.
Manufacturing Process
VCIL bought cocoa beans directly from the farmers
through one of its sister companies. After clearing,
cocoa beans were loaded into a chute having a
strainer and then passed into air classifiers wherein
particles like stones, etc. were separated out. The
beans were then roasted to remove the husk from
Table 1: Production Capacities and Utilization in 2000

Section Capacity (tonne/year) Remarks ^Utilization (tonne)


Cocoa Bean Crushing
Cocoa Powder Moulded
Chocolate Line Enrobed
Chocolate Line Eclair
Line Victor Plus
400
1500
1500
1500
1500
1200
8000 Tonne in Two Shifts
Three Shifts
Three Shifts
Three Shifts
Three Shifts
Three Shifts
1600
450
140
330
180
270

*This does not include the production figures for the MNC.
Vol. 27, No. 4, October-December 2002 76 Vikalpa
the cocoa nib as well as to reduce the moisture
content. The roasted nib was crushed into smaller
granules and fed into a vibrating separator that
separated the husk from the granules. The granular,
neutralized cocoa beans were fed to an electric
furnace and crushed further in two stages, viz., coarse
milling and fine milling. The resultant product was
in the form of a paste and was called cocoa mass.
The cocoa mass thus formed consisted of 55 per cent
fat. The moisture-free cocoa mass was then passed
through a hydraulic press. During this process, the
cocoa mass split up into cocoa butter and cocoa cake.
The cocoa butter was then deodorized by
boiling. The deodorized cocoa butter which was in
the form of a semi-liquid state was then filtered,
packed as blocks, and cooled. This packed cocoa
butter was stored in a cool place, or else it would
melt at 37C. Some portion of this cocoa butter was
packed and sold in the market to other organizations
and the remaining was used by the company for
manufacturing chocolates. Cocoa butter was further
processed with the addition of required ingredients
for preparing chocolates. The cocoa cake was then
dried and pulverized to form cocoa powder.
While cocoa powder formed the main ingredient
for manufacturing Victor, other ingredients like sugar,
Vitamin-C, salt, flavour, glucose, and emulsifiers
were added in appropriate quantity to the cocoa
powder by an automatic mixing machine. This
mixing took place in the presence of steam and,
finally, the resultant product was whetted to yield
small granular or powdery product. The end product
was packed and marketed by the company as Victor
health beverage. Many of the brands of milk
beverage/health beverage present in the market
varied in benefits and attributes as a result of the
different combination of ingredients added to cocoa
powder (Table 2).
There are two categories of milk beverages/
health drinks white beverage and brown beverage.
Brands such as Bournvita, Nutramul, Boost, Maltova,
Milo, and Victor constitute the brown beverage which
have about 60-70 per cent of cocoa as their key
Table 2: Ingredients of Various Brands
Bournvita Horlicks Maltova Viva Boost Complan Milo Victor Nutramul

Wheat Flour
Milk Solids
Malted Barley
Malt Extract
Sugar
Minerals
Vitamins
Salt
Cocoa
Leavening Agent
Vegetable Oil
Sodium Bicarbonate
Potassium Bicarbonate
Caramel
Beet Root Juice Powder
Maltodextrin
Added Flavour
Glucose/Sucrose
Emulsifier
I ndi cat es pr esence of i ngr edi ent .
Vol. 27, No. 4, October-December 2002 77 Vikalpa
ingredient. Others like Horlicks, Complan, and Viva
fall under the white beverage category as they have
milk solids and malt extract as their key ingredients.
The brown beverages are differentiated in a big way
by the nutrients which are added to support the
health claim (Table 3).
There is another very small category of brown
beverages called drinking . chocolates. Cadbury's
drinking chocolate is the only major player with other
small regional players like Eagle, Nilgiris, etc. A few
years back, Nestle had launched a drinking chocolate
in the market which did not do well. The major
ingredient in drinking chocolate is cocoa. In addition
to sweetened cocoa powder, it has sugar and some
added flavour as ingredients. Cadbury's drinking
chocolate is priced at Rs 52 for a 200gm bottle.
Drinking chocolate is considered as a snack drink
and is preferred with cold milk. This chocolate
powder can also be used for making cakes.
The Milk Beverage Market
The milk beverage/health beverage market is domi-
nated by a few players like Smithkline Beecham,
Jagjit Industries, Cadbury's India, Nestle, Heinz's,
and Amul. The market has grown by 7-8 per cent
to become a 90,000 tonne market. Recently, Smith-
kline acquired the two brands of Viva and Maltova
from Jagjit Industries and added them to its stable
of Horlicks and Boost. Cadbury's Bournvita and
Nestle's Milo are established brands. Bournvita
recently launched a white (malt) variant while
Complan launched a brown variant (cocoa-based).
Figure 1 shows the market share of established
brands.
These brands are considered as milk additives
which essentially make milk tasty besides providing
nutrition. Hence, milk forms the primary base. The
largest consumer of these milk beverages is South
India with 46 per cent of the country's consumption
followed by West with 23 per cent, East with 18 per
Figure 1: Market Share of Various Brands
WAY THE PIE GOES
Table 3: Composition of Nutrients
Nutrients
(qty in mg in WO gm)
Bournvita Horlicks Boost Milo Nutramul Maltova Victor

Vitamin A 950 1333 670 Dat a Not Data Not 50 mg
Available Available
Vitamin Bl
- 2.33 1.05
Vitamin B2
- 2.96 2.67 6.36
Vitamin B6 5.34 3.75 3.33 0.60
Vitamin B12
1.5 1.85 1.67 0.70
Vitamin C
70 148 100 17
Folic Acid
350 370 334 1.0
Niacin 33.5 30 6
Iron
26 25.9 23.6 -
Vitamin D 130
Protein
7.0 9.7
Calcium 155
Vol. 27, No. 4, October-December 2002 78 Vikalpa

Milo
3.6%
Viva
3.1%
cent, and North with 13 per cent. However,
consumption of brown beverages is higher in the
North and the West than in the South and the East.
Households constitute 60 per cent of the total
market with the rest constituted by the institution
segment. None of the brands has a differentiated
product for these two segments. Seventy per cent
of the total household consumption is by the high-
income group (Table 4). The study conducted by
ELCC on households shows that the biggest
consumers of milk are in the age group of 6-16 with
a family income above Rs 10,000 per month (Table
5). The study also shows that 60 per cent of the high-
income households are regular consumers of the
beverage. These families on an average consume
about 30-40 gm of the product a day. Mothers are
the key influencers in brand choice. Children also
have a strong say in the brand selection. These
beverages are usually added to warm or cold milk.
In addition to its use as a tasty and nutritious milk
drink, some of the brands (esp ecially brown
beverages) are also used as an additive in milk to
make it a tasty snack drink in institutional segments
like restaurants, canteens, juice parlours, etc.
Consumers' evaluation of various attributes and
benefits of the product while purchasing milk bev-
erages is presented in Table 6. A higher percentage
of consumers prefer white beverages over brown
beverages. White beverages are used for their thera-
peutic benefits while brown beverages are used
more for their taste. Brand loyalty is low, except for
Horlicks and to some extent Bournvita. Many of the
respondents do not consider Victor as a national
brand and have not placed it in the consideration
set. However, blind taste tests of a few brands have
brought out a more positive evaluation towards Victor.
Table 4: Number of Households in the High
Income Category in India (in lakh)
Product Features
There were efforts by the company since its launch
to upgrade the product. Victor was modified and re-
launched as Victor Plus in January 2000 as per the
recommendation of ELCC. In addition to the original
combination of ingredients of Victor (Tables 2 and
3), nutrients like Vitamin A, Bl, B2, B12 as well as
minerals, niacin, and iron were added. At the trial
production of Victor Plus,-an attempt was also made
to add malt and milk solids. It made the present
powdery form a bit more granular as the granular
form was found more acceptable to customers than
a pure powdery form. However, the company had
to give up this idea as addition of milk solids and
malt was not possible on a large scale due to the
present machinery constraints. Also, addition of a
unit of any ingredient (except sugar and glucose)
in a 500 gm bottle of Victor increased the cost by
50 paise to 1 rupee. Nevertheless, some of the
ingredients were not considered for addition due to
their incompatibility and machinery constraints.
\
Victor was packed in a round plain 500gm pet
bottle and the label had a colour combination of
blue, white, yellow, brown, red, pink, and black.
Victor Plus was packed in the same pet bottle, but
with a new label and the colour combination was
changed to maroon, blue, yellow, red, and white.
The front side of the bottle on the label had
Victor and Plus written in maroon letters in an yellow
background. 'DrinK was written on one side and ''with
milk'on the other side of Victor Plus in maroon letters.
VCIL was written in red letters inside the yellow
heart in a blue background. The nutritious and tasty
cocoa health drink was written in maroon letters with
white border in the blue background. The picture
of a boy and a girl holding a trophy up was placed
Table 5: Consumption of Milk Beverage:
Age-wise and Income-wise

High Income
Rural
High Income
Urban
Households for
All Income
Regions
Year
93-94
98-99
93-94
98-99
93-94
98-99
North
7.14 7.35 6.90 7.40 459.59 495.30
South
1.97 2.42 4.26 5.10 415.01 455.40
East
4.26 4.56 7.07 7.25 320.61 391.55
West
7.07 7.45 4.49 5.30 377.98 423.50
Total
20.44 21.78 22.72 25.05 1573.19 1765.75
Note: * High income group consists of households with
a family income above Rs 8, 000 per month.

Age (years) % which
Consume
Daily
Monthly
Income (Rs
'000)
Percentage of
Households
which Consume
Regularly
6-8
74
8-10
45
9-11
79
11-13
51
12-14
66
14-16
58
15-17
37
17-19
60
18-60
26
20-22
66
60 and Above
44
23-25
69
25 and Above
70

Vol. 27, No. 4, October-December 2002 79 Vikalpa
Table 6: Evaluation of Brands by Consumers
Attributes
Weightage
of
Bournvita Horlicks Victor Boost Complan Milo Nutramul
Attributes
W

Maltova
Viva B

Price
0.20
3.2 3.2 3.5
3.4 3.5 2.8 3.5 3
3.7
Taste
0.25
4 3.2 3.7
3.2 3.7 3 2.9 3.3
3.7
Nutrition
0.30
3.5 4 3.7
3 2.1 2.8 4 2.8
3.7
Brand Name
0.10
4.1 4.1 3.3
3.4 2.0 3.4 4.5 3
2.7
Packaging
0.05
3.1 3.8 3.7
3.6 2.8 3.8 3.5 4
3.2
Easy t o Mi x
0.10
3.7 4.1 3.6
3.8 3.8 3.6 3.7 3.6
3.4
Weighted Score
2 WB
3.63 3.65 3.59
3.60 2.97 3.04 3.62 3.12
3.52
Total Score 21.6 22.4 21.5
20.4 17.9 19.4 22.1 19.7
20.4
at the left hand corner of the label in a red border
frame. The picture was in maroon and blue colour
shades (Figure 2).
The back side of the bottle on the label had
"Victor Plus-Rich taste of nutritious cocoa drink' boldly
written in maroon in an yellow background inside
an oval space. The additional text matter came on
the left and right sides of the oval figure and was
written in white in a red background.
On the left side of the oval space was written 'The
nutritious and tasty health drink plan.' Beneath this was
written the benefits and attributes of the product as
well as instructions for use. The right side of the
oval space was titled 'Richer, tastier instant cocoa drink.'
Beneath it was written the details of the ingredients and
other mandatory details (Figure 3).
Milo pack is predominantly green in colour,
while Horlicks is blue, Bournvita is orange, maroon,
and purple. Boost is red and orange, Viva is red
Figure 2: Front Side of the Label

and white, Nutramul is yellow and brown, Complan
is blue and brown, and Maltova is orange and blue.
Victor was first positioned as an energy drink.
Later, it was promoted as an instant chocolate drink.
On the recommendation of the consultants, the
positioning statement of Victor Plus was made as 'The
tasty and nutritious cocoa drink with milk.' The
creative statements of the competing brands are as
follows:
Boost - Energy boosters ("Boost is the
secret of my/our energy")
Complan - Complete health drink ("I am a
Complan boy/girl")
Nutramul - Malted milk food with cocoa
Maltova - Extra malt with extra energy
Bournvita - Balanced formula drink
Milo - Chocolate energy food drink
with great taste
Horlicks - Nourishing food drink
Figure 3: Back Side of the Label
Richer tastier
instant cocoa drink
with milk

Vol. 27, No. 4, October-December 2002 80 Vikalpa
The nutritious
and tasty
health olan

Product Variant for Institution Segment
ELCC had also proposed another variant of Victor
which would be offered to the institutional segments
at a price lower than that of Victor as it had assessed
that a demand existed for the product. This would
be a less nutritious drink than Victor Plus, but closer
to the original Victor. Vegetarian restaurants were
considered as good targets. Most of these restaurants
were typically 20-40 seaters in A and B class towns,
where people consumed a glass of milk along with
breakfast. Working people and students were the
largest visitors to these restaurants. It was also found
that juice parlours used drinking chocolate for mixing
it with juices and lassi as it enhanced taste. Though
manufacturing this variant was not difficult for VCIL
as it incurred very little additional operating costs,
its introduction was postponed by the company as
the consultants felt that marketing of a new product
variant required different distribution and promotion
approaches.
Distribution System
VCIL had about 25,000 active retail outlets spread
all over the country. These were retail outlets which
mainly stocked and sold their chocolates (Cadburys
and Nestle had over 1 lakh active retail outlets).
Eighty per cent of VCIL's retail outlets were C and
D class, while 15 per cent were B class. The
remaining presence was in A class outlets with almost
nil presence in A+ class. The chocolates reached the
retail outlets through stockists/distributors. The com-
pany had about 250 distributors all over India and
the product was first transferred from its factory to
its 18 Area Sales Offices (ASOs) based on demand/
order. The distributors then took possession of the
stock and distributed it to the retailers. In all the
ASOs other than in the Southern states, the product
went directly to superstockists from the factory who
stocked it in their godowns before distributing to
distributors. In the Southern states, each ASO had
a factory-owned depot which stocked the product.
In all cases, the transportation cost from the ASO/
superstockist was borne by the respective distributing
entities.
Victor Plus was available in only 20 per cent of
VCIL's retail outlets. Many of the retailers were not
keen to stock Victor Plus, even though they felt that
it had a price advantage and an attractive commission
policy. A commission of 6 per cent was given to
superstockists, 6 per cent to distributors, and 12 per
cent to retailers. Most of the other companies offered
a commission of 8 per cent to its distributors and
8-10 per cent to its retailers. One retailer's comment
was typical and it echoed the views of many retailers:
"I feel the brand lacks appeal and visibility and hence
may not move. Moreover, I do not think that I have
the shelf space to give to Victor as there are a lot
of other brands to be displayed. Sorry. Display space
is crucial for movement of these products."
Each ASO was headed by an Area Sales
Manager (ASM) who reported to the Marketing
Manager stationed in their corporate office in
Bangalore. The Marketing Manager reported to the
Executive Director (Marketing). A marketing
assistant, who had just completed his management
degree, was appointed a year back and was working
under the Marketing Manager. Each ASM had three
sales representatives (SR) under him, whose
territories were clearly demarcated. Most of the SRs
got a salary of around Rs 4,000-5,000 and were
graduates familiar with the local language. The orders
were mainly booked by the distributors and the tasks
of the SRs were mainly to supervise distribution and
to coordinate between the company and the
distribution entities in their territory. They also
occasionally collected feedback from the market and
attended to complaints by retailers. Each SR was
responsible for all VCIL products. The performance
of each ASO varied (Table 7).
Cost and Price Structure
For the purpose of costing, the factory was divided
into three main departments, namely, Production,
Service Department, and General Department.
The following were the fixed costs for the
company, including salary,
during the year.
General Department
Service Department
Production Department = Rs 261.37 lakh
Corporate Office in
Bangalore
The above costs were in addition to the costs
at the ASOs. The company followed a principle of
allocating 20 per cent of all the above costs to that
of Victor in its price computation. The price of Victor
Plus was determined after considering the above costs
and the other cost heads (Table 8). The original Victor
was priced at Rs 65. Despite adding the extra
ingredients, the price of Victor Plus was the lowest
in the market (Table 9).

Vol. 27, No. 4, October-December 2002 81 Vikalpa
= Rs 77.1 lakh
= Rslll.9 lakh
= Rs 42.5 lakh
Table 7: ASO-wise Product Sales and Costs (Year 2000)
Location Sales Quantity
Chocolates
(tonne)
Sales Value
Chocolates
(Rs lakh)
Sales Quantity
Victor Plus
(tonne)
Administrative
Costs (Rs lakh)
Salary
(Rs lakh)
Distribution
Costs (Rs
lakh)
Cochin 32.8 41.52 19.50 2.22 4.35 1.49
Calicut 28.04 37.63 19.60 1.07 0.81 1.94
Bangalore 35.55 54.12 26.30 4.09 5.77 5.72
Hubli/Goa 25.48 39.60 21.50 2.67 2.09 1.87
Hyderabad 60.22 78.84 29.00 7.63 4.70 0.42
Madras 23.49 32.89 20.50 0.78 1.42 0.60
Man gal ore 27.23 30.24 21.50 1.34 0.54 1.25
Mumbai 20.15 28.55 12.50 0.31 1.21 8.07
Jammu 5.65 8.30 1.45 0.40 0.23 0.52
Jaipur 34.79 44.72 9.40 3.74 1.20 1.16
Chandigarh 60.38 92.88 16.50 8.49 3.04 3.26
Delhi 78.78 111.68 16.20 12.69 6.83 6.69
Ghaziabad 122.81 162.62 20.50 15.99 2.63 5.98
Indore 3.85 5.39 2.12 0.35 0.72 0.10
Patna 10.5 15.40 2.40 0,53 0.85 0.25
Calcutta 8.96 13.46 3.50 1.56 3.78 4.17
Cuttack 7.66 11.42 1.90 0.81 0.49 0.78
Ahmedabad 30.74 44.18 6.50 1.43 1.0 4.24
Total 617.08 853.44 250.87 66.1 41.68 48.51
Not e: The ASOs at Pat na, Cal cut t a, Cut t ack, and Jammu were opened onl y recent l y.
Administrative costs included costs of rent, electricity, water, stationery, etc. Distribution
costs included costs of transportation, incentives, regular retail promotion efforts,
etc.
Promotion
VCIL had spent about Rs 8 lakh on advertising and
sales promotion in 1999 for Victor. In 2000, the
company raised the advertisement budget to Rs 30
lakh. In addition, it decided to spen d on promotion
of the brand through events. Though magazines were
used by many of the other brands for advertising,
VCIL did not use them. Even the television medium
was not considered as the tariff was thought to be
too prohibitive by the decision makers.
The company finally decided to advertise its
product in newspapers in the four Southern states
of Kerala, Tamil Nadu, Andhra Pradesh, and
Karnataka. The advertisements were inserted as
20cm* 6col in colour and in the back pages. One
English and one regional language newspaper was
selected for each of the states of Kerala, Tamil Nadu,
Kar nat aka, and Andhr a Pr adesh. The sel ect ed
English newspapers had an average advertisement
t ar i f f r at e of Rs 1575/ cm/ col and t he sel ect ed
regional newspapers had a tariff rat e of Rs 950/cm/
col for a single insertion (Over and above this rate,
the newspapers charged a premium of 25 per cent
for advertising in back page and 50 per cent for
colour in the regional newspapers and 40 per cent
for back page and 50 per cent for colo ur in the
English newspapers). The advertisement layout was
in some way an extension of the Victor Plus bottle's
label design. The punch line of the advertisement was
"Be a Victor with Victor Plus the tasty cocoa-bas ed
heal t h dr i nk. Dr i nk wi t h mi l k. " The advertisements
prominently displayed the picture of a boy and a
gi r l hol di ng a t r ophy al of t . The
Table 8: Cost Details of a 500 gm Bottle of
Victor Plus
Cost Heads
Material 22.00
Bottle 7.00
Label 2.5
Excise (16% of 65% of MRP) 7.28
Stockist/Wholesaler Commission (6%) 4.2
Retailer Margin (12%of MRP) 8.40

Vol. 27, No. 4, October-December 2002 82 Vikalpa
Value (Rs)
Table 9: Prices of Competing Brands (500 gm
Bottle)
Brand Price (Rs)
Bournvita Malt 98
Chocolate 97
Horlicks 94
Maltova 92
Viva 89
Boost 93
Complan Neutral 99
Chocolate 145
Milo 89
Nutramul 75
company was also planning to come out with an
advertising campaign for the Western and Northern
states next year. It was also thinking of advertising
through a few popular magazines in the South, West,
and North regions.
The sales promotion in the Northern and
Western states was through sponsored events. The
company identified 100 good schools in B class towns
and sponsored their cultural and sports events for
the year on behalf of Victor Plus. In addition, it
distributed prize money and certificates to three best
students for their academic excellence costing the
company Rs 10,000.
Brand-building Programmes of Competitors
The leading players in the market frequently under-
took brand-building interventions through improve-
ments in attributes, benefits, package, advertising,
and sales promotion in order to enhance brand
equity. The small players found it hard to undertake
such frequent brand-building programmes.
Brands such as Horlicks and Bournvita have
effective brand-building programmes. Bournvita had
been rapidly losing its market share to the white
segment led by Smithkline Beecham's Horlicks for
the last two years. One of the company's managers
remarked: "Our brand Bournvita had become
a tired brand and needed something new." In 1999,
the company repositioned Bournvita on the
nutritional plank as it felt that the main reason why
the brown drinks segment had been losing steadily
to the white drinks segment was because they were
positioned as taste enhancers. The consumers
responded favourably to this effort and the market
share rose up. This was further supported by package
modification. Bournvita also sponsors various events
like quiz for school children. In 2000, Cadbury India
spent 10 per cent on advertisement and 4 per cent
on marketing of all their products out of a total sales
of Rs 571.14 crore.
Boost, with a market share of 10 per cent, also
modified its package by adding more colour to the
graphics. Moreover, Boost has, over the years, used
the celebrity endorsement of Sachin Tendulkar to
sustain its market share. The leader of the market,
Horlicks, had been relying on nutrition through its
heavy advertising targeting the housewife and
children. In 2000, Smithkline Beecham spent 7 per
cent on advertisement out of a total sales of Rs 903
crore.
The Challenge
At the end of the discussions, Srinivasan seemed to
be more optimistic and confident. He could now
clearly see the flaws in the performance of the brand
during the year. He was glad that Ajay Das and
Jay ant could identify them. He remarked: "Well
gentlemen, we are on the right track. I endorse my
colleague Prabhu's statement that this year was the
start of a turnaround. Let us all accept our short-
comings and move forward. Now, I request my
colleague Jayant to prepare a new brand manage-
ment plan which we can implement quickly in
consultation with Ajay (Tables 10 and 11). I would
like you to present it in a month's time, i.e., towards
the end of March (2001). We would be happy to
retain Ajay's services as a consultant till then." Both
Jayant and Ajay nodded their heads approvingly.

Vol. 27, No. 4, October-December 2002 83 Vikalpa
Table 10: -"Ingredients-Utility Matrix
Ingredients
Gives Growth Taste
Form of Tissues
Immunity Digestion Metabolism Energy
Possible to
Add to
Victor Plus
Wheat Flour
Milk Solids
Malted Barley
Malt Extract
Sugar


4
'
Minerals
Vitamins
Salt
Cocoa
Leavening Agent
Vegetable oil
Sodium Bicarbonate
Potassium Bicarbonate
Caramel
Beet Root Juice Powder
Maltodextrin
Added Flavour
Glucose/Sucrose
Emulsifier
* The above t abl e was devel oped by Aj ay Das and t he market i ng assi st ant i n March 2001.
Indi cat es t hat t he i ngredi ent cont ri but es t o ut i l i t y.
^ Indi cat es t hat t he i ngredi ent can be added t o Vi ct or Pl us.
Table 11: *Nutrients Utility Matrix
Nutrients Repairs Metabolism Growth Immunity Blood Growth Possible to
Damaged of Tissues of Bones ___________ Add to
_____________________ Cells ___________________________________________________________________________ Victor Plus
Vitamin A V
Vitamin Bl
Vitamin B2 ^
Viamin B6 /
Vitamin B4 ^
Vitamin B12
Vitamin C S
Folic Acid . . . ,/
Niacin
Iron . /
Vitamin D
Protein . s
Calcium
* Developed by Ajay Das and the marketing assistant in March 2001.
Indicates that the nutrient contributes to utility.
s Indicates that the ingredient can be added to Victor Plus.
Vol. 27, No. 4, October-December 2002 84 Vikalpa