Rin Case:

Alternative 1: Increase Efforts to Position RIN as a Fabric Washer

Various methods that could be used include:
• Increased media advertising with more emphasis on fabric washing in TV and print
ads (show actual washing).
• Educate retailers and get them to educate consumers.
• Change in color and packaging of RIN.
Pros:
• Fabric wash market is larger (263,000 tons versus 60,000 tons) so sales and profit
potential is larger. (Do you want to be a small fish in a big pond or a big fish in a
small pond?)
• Not much change required in current advertising theme.
Cons:
• May lose current customers who use RIN for dishwashing. This loss may not be
compensated by increase in fabric wash sales of RIN. Hence sales and profit would
reduce. At present most of the 1550 tons of sales of RIN are dishwashing sales. The
sales may become minimal if RIN’ s dishwashing customers are lost. (At 80 percent
of sales for dishwashing, 1240 tonnes are for DW and 310 for FW.)
• Difficult and expensive to alter customer’ s perception and positioning of the product.

Alternative 2: Reposition RIN as a Dishwasher

Various methods that can be used include:
• Change advertising theme totally, explicitly stating RIN’ s use as a dishwasher.
• Change packaging inscription.
Pros:
• Builds on consumers current and natural perception and positioning.

• Less expensive to educate consumer (do we have to educate end user only or retailer
as well?).
• Advertising and positioning may increase sales as potential already exist (people buy
as dishwasher without explicit promotion).
• Provides opportunity to increase contribution or reduce retail price through change in
ingredients.
Cons:
• Dishwashing market is much smaller than fabric wash market so potential for sales
and profits is low.
• Positions RIN out of large and lucrative fabric wash market.

Alternative 3: Position RIN as both a Dish washer and a Fabric Washer

Methods that could be used include:
• Explaining its versatility in advertising themes.
• Promotional literature.
Pros:
• If successful can be positioned uniquely having a USP to obtain market share in both
markets.
• Potential for sales is greater when both markets are attacked.
Cons:
• Consumer may not appreciate a product to be used for washing both dishes and
clothes.
• Risk of losing both market positions if joint positioning credibility is not achieved.
Can we have a dual positioning? Is the boundary/partitioning between the two
markets (dish washing and fabric washing) fuzzy or clearly defined? When can we
have a fuzzy positioning, when boundaries are fuzzy or clear? (Here I ask, “Do you
want one foot in each market or both feet in one market)

Alternative 4: Introduce New Product

Keep the current RIN as it is, and take out a new product. Position one product as a fabric
washer and the other as a dish washer.
Pros:
• Targets specific applications, benefits, segment needs.
• Opportunity of serving both market segments.
Cons:
• Developing new product will take time and additional R&D cost.
• Have to design and manage positioning and marketing mix of two products.
 New Business Decision

Alternative 5: Do Nothing
Pros: Since sales are reasonable, why risk them by changing anything?
Cons: Present marketing plan does not tap full potential of product.

NUMERICAL ANALYSIS

A) Current analysis

Current Retail Price Rs 26.00 /kg

Retailer Margin 2.08 (8 percent of Retail Price)
Retailer Cost Price Rs 23.92
Wholesaler Margin 1.17 (4.5% of Retailer Price)
Wholesaler Cost Price Rs 22.75
Manufacturer Selling Price Rs 20.05
Octroi and Excise Tax = (10 percent of Retail Price, 11.4 percent of MSP) = Rs 2.60

B) If 33% content is removed, the Variable cost will decrease and profitability will increase
NPS Rs 20.05
Total Valuable Cost (TVC) 14.45 (72 percent)
Margin Rs 5.60/kg (29 percent)
If reduced by 33 percent
NPS Rs 20.05

Total Valuable Cost (TVC) 9.68 (48 percent)

Margin Rs 10.37/kg (52 percent)
Extra Margin Available= 14.45 - 9.68= Rs 4.77/kg OR Rs 4,770 / tonne