End Chapter Case: I: Fremco Corporation: Understanding Indian Market for a New Product Launch Mr Rajiv Bhagat is the

CEO of Fremco Corporation Limited and is evaluating a note prepared by his strategy team, which will help them to take a decision about future course of action depending on their learning about Indian market. The excerpts from the Note: India, in the recent past, has been attracting a number of large multinationals from all over. Her expanding population of middle and upper class consumers, liberalization policies and prospects have made her the hottest destination for all the companies, be it in automobile or in consumer products or food. In the last five years, consumers in India have witnessed unlimited options opening up before them and they are also the undisputed kings as every company is trying to retain them by taking extraordinary measures. One intriguing thing about the entry of multinationals in India is, however, that many of them have decided to pack and leave the country or are content with miniscule business coming their way. The major reason behind these misadventures is said to be that for one, the major market today lies in rural areas and second that Indian consumers have very different tastes and preferences. The scenario is particularly common in the food products industry. Several major food products have failed in the country or are limited to four metropolitan cities only. The latest to join the already crowded market is Fresh and Sweet, a leading brand from America, in the fruit juice market. The brand is owned by one of the biggest and diversified business houses, Fremco Corporation Limited. The company is in the top position in it's beverages and readymade food products in America and has some very strong brands in its portfolio. Fremco Corporation Limited is operating in almost 57 countries worldwide and its beverages are recognized as top products everywhere. The readymade

food products, include cookies, fruit bars and fruit based canned products, which are also doing good business. countries. Fresh and Sweet brand is sold worldwide as a breakfast product, particularly in USA. The company spokesperson said at a recent meeting that the juice does not have any sugar, preservative or additives, "We are selling a 100% pure fruit juice which is not available in India so far. The demand for 100% pure fresh juice is there but people are making with whatever is available. In the long run, we will also be looking for the raw material in India, which can be processed at our Indian plant. But at this moment our raw material comes from orange producing states in the US. The company aims at the market with a long-term view and we are not in a hurry to sell and go back." The company has test marketed it's two juices in three cities - Bangalore, Mumbai and Delhi last month. The response it has received shows that people are willing to buy a new product like theirs, as the brand is very well known. Another fact revealed was that consumers wanted a little sweeter taste as the juices are very bland without sugar. The response regarding price, packaging and volumes of sale was satisfactory. To overcome the taste barrier, the company is deciding to blend the juice with another sweet fruit to get the required taste. Indian drink market for branded products is estimated to be around 3,000 crore rupees and is dominated by soft drinks. Only 2 or 3 per cent of the share is captured by branded juice, which is growing albeit slowly. With the rise in disposable income and awareness of health and fitness, the market is likely to double in the next two years. Also the company hopes to convert the nonbranded product consumers in the next one or two years to it's products. To market it's Fresh and Sweet brand the company has revealed an ambitious marketing and advertising plan. Fremco is considered one of the biggest advertisement spenders in the country and since it's entry it has preferred an aggressive promotion strategy. The agency, handling the Fresh and Sweet Fruit juice is again one of the most successful products in its portfolio with market leadership position in around 30

brand is working for the last six months to get extensive data on consumer preferences, likings and the media for the ad-campaign. Table 1: Advertising Expenditure in Year 2005

Medium

Amount Spent in Rupees (in lakhs) Television 35 Hoardings 10 Sponsorship 18 Newspaper 10 Others 02 Total 75

Percent of Total Amount 47.0 13.3 24.0 13.3 02.4 100

Indian market is flooded with unbranded fruit juices sold through vendors. The branded juice market is about 80 crore rupees presently and is growing at a rate of almost 10 per cent per annum. The major competitors for this market are Indian companies and one multinational company with almost nil market shares. Fresh and Sweet was not sold commercially and hence not included. Table II: Market Share of Branded Juice in Year 2005

Brand Juicy Berry Indiana Grapes Knight

Market Share(%) 34 31 15 14 06

Review Questions

1. What is the other information that he needs to collect for making a right decision about entering into Indian market? 2. What information is important in deciding about a brand of juice? 3. How does a consumer decide about a brand of juice and what personal facors influence the decision making process? 4. What difficulties can the company face in the current market conditions while launching its product? 5. Please suggest an adverting and positioning strategy for the brand? End Chapter Case: II : Mr Deepak Biswas Purchases a Tire Mr Deepak Biswas works in IDBI Bank as a senior manager and is currently working at Hyderabad. He is in the banking industry for last twenty years and has done exceptionally well as a banker. His wife works in a local college and both the children are in the age of 9 and 12 respectively. Mr Biswas has purchased a farmhouse on the outskirt of Hyderabad and lives in a peaceful environment. He drives a Honda City to his office but he has a Toyota Qalis at home. On some holidays, he will drive to nearby areas and spend quality time with family. He is not being able to give much time to the family due to preoccupations and hence his wife uses the Toyota Qualis more often than him. She takes the kids to the school and does shopping trips for the family in working days. In one of the dinner table discussions, she complained about the shimmering sound that the vehicle has started giving off late and fears it may be a serious problem, as she has to use the vehicle for dropping children to school. Mr Biswas was worried about the problem with the car and had to cancel one of the weekend trips. The sound from the car seems to increase over the weeks as Mrs Biswas often brings the issue to the dinner table. Mr Biswas decided to use the car to office for a day so that he can find out the problem. On the way to office, he could find that the sound has increased and there is some bubbling with the steering. While driving back home, he stopped on the way and checked with a local garage. The boy in the garage looked novice as he was around twenty years of

age and just drove the car around the garage and told that the tires need to be changed as they are very old now. He showed the wires coming out of one of the tires in the front wheel. He was not convinced with the boys decision and thought the problem to be more than that of a tire. In one of the weekends he drove to a nearby garage and they also told that the vehicle needs tire change but, the shock absorber seems to be affected also. Mr Biswas thought of changing the tires and repairing the shock absorbers. He was buddy to Mr Vikram in office as they use to share lunchtime together very often. Mr Vikram told that JK Tyres are available at a price of Rs 550 per tire and four tires should make him to pay minimum Rs2000. He also told that MRF radial tires are available in the market at a price premium of Rs 600 per tire. He decided to visit one the tire stores in the city. Though it was a multi-brand outlet but shopkeeper was pushing him to buy Eicher tires, which were available at a price of Rs 500 per tire. The salesman explained him that, other than the brand name, a buyer would normally look for the rubber grip, the radial behavior, width and diameter of the tire base. The salesman also told them that he might get tubes free, if he decided to buy five tires in one go. He also went through some of the tire advertisements in newspapers to understand about tires, their features and pricing alternatives. Mr Biswas thought of discussing with the city garage and service station before making a final decision. He expected that his total expenses for the tire change should be around Rs 2000. After taking the opinion of the garage mechanic and Mr Vikram, he decided to buy five Eicher tires and repair the shock absorbers. His final bill came around Rs 3500 as he had to replace one of the shock absorbers and repair the rest three. While driving back home, he was feeling happy about the vehicle. The shimmering sound was gone and the vehicle was on a smooth drive. He was happy that there would not be any problem with the vehicle for the children. He was worried about the amount he spent on the car and thought he has to cancel the denting job with the vehicle for sometime now Questions

1. When did Mr Biswas recognize the problem? 2. Why didnt he believe the boy in the garage? 3. What kind of behavioral pattern did Mr Biswas follow in his choice about a brand of tire? 4. How will you classify his behavior? Limited problem solving or extensive problem solving? Give reasons? 5. The case ends with a note that he was worried about his spending but happy with the work? What should you do as a brand manager of Eicher to make Mr Biswas feel that he has done a right decision?