Searle Vitamin Water (Realization of New Category)
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Transcript of Searle Vitamin Water (Realization of New Category)
• Be Attentive in Class• Hold your horses till the end of the Presentation• If unanswered will satisfy you via e-mail• Questions should be ask in respectable manner• Awards for finest and relevant question(s)• Logical argument is more than welcome
PS: Said rules won’t applies to Mr. Naveed Ilyas
Rules of the Game
Knowledge Guaranteed
Project Presentation
Searle Vitamin Water
About Case Study
This case study based on “Vitamin Water” a product of Searle Private Limited. It is prepared by the group of IoBM SMP class students based on the visit to the company, information provided by the representative of the company, Mr. Khalid Siddiqui, internet research and Consumer survey based on questionnaire prepared by the team and above all a friendly support and guidance from our Mentor teacher, “Mr. Naveed Ilyas”.
IoBM Class Survey Response
Yes No0%
10%
20%
30%
40%
50%
60%
70%
80%
33%
67%
Awareness of Product
Are you aware of Vitamin Water?
Frequently Asked Questions
1) What is Searle Vitamin Water?2) Why should we drink Searle Vitamin Water?3) What is the difference between SVW and Energy Drinks?4) Is it safe to consume SVW frequently during the day?5) Is SVW safe for children?6) Is SVW safe for people with diabetes?7) Is SVW safe for pregnant women to consume?
Group Members
1 2
3Khurram Shakeel
4 5
Mustafa Amir Ali
Rehan Mehboob
Muhammad Umer Siddiqui
Farhan Ali Marri
What is Vitamin ?
• Definition :– Organic compounds which are essential for normal growth and nutrition and are
required in small quantities in the diet because they cannot be synthesized by the body.
– Vitamins don't give you calories or energy but do help you stay healthy. Types of Vitamin :
They are split up into two groups and defined by the materials in which they dissolve
Water Soluble Vitamins Fat Soluble Vitamins Dissolve in water and are
excreted out of the body through biological fluids
Important to replace them on a daily basis
Water-soluble vitamins include the vitamin B-complex group and vitamin C
Dissolve in fat, and excesses are stored in fatty tissues
Distributed slowly throughout our bodies, we don't need to replace them daily
Fat-soluble vitamins include vitamin
A, vitamin D, vitamin E and vitamin K
Vitamin Deficiency
What is Vitamin Water?
• Beverage Product• It is the combination of Water that is
enriched with vitamins and minerals.• Coca Cola “GALCEUE” is the market
leader followed by Pepsi internationally.• Presence in almost 52 countries.• Growing brand almost by 12.5 % YOY
internationally.
History of Vitamin Water
• 1996: J Darius Bikoff founded Energy Brands
• Energy Brands also known as Glaceau privately owned subsidiary of Coca-Cola
• 2007: Bikoff agreed to sell to Coca- Cola for 1.4 billion
• Bikoff still manages vitamin water with a agreement
Introduction
Searle Vitamin Water
Introduction of the Product
• Considering Vitamin Deficiencies and Potential in
Pakistan Searle Private Limited Introduce a new
product as “Searle Vitamin Water.”
• Searle Vitamin Water is a new range of non-caffeine,
non-carbonated drinks.
• It mostly contains Water Soluble Vitamins.
• The product was introduced as part of a Ramadan
deal with Dunkin’ Donuts in mid of 2013; this was
followed up with an ATL campaign on August 7, 2013.
• In 2014, the product went under phase to which
some call a “Re-launch” phase.
Our Mission is to Build an organization which
provides its customers with the best possible
products and Services in the health care and
consumer industries that is ever - evolving in step
with the changing market place to maintain its
leadership role.
Incorporated in Pakistan as a Private Limited
Company on October 5, 1965 .
Subsidiary of G.D. Searle & Co., U.S.A.
Two state-of-the art manufacturing facilities in
Karachi and Lahore.
1966 - Searle Pakistan (Private) Limited acquired
a small manufacturing facility in S.I.T.E.
It is a public limited Pharmaceutical company.
About the Company
Beverage Industry
Islamic Republic of Pakistan
Beverage Industry – Key Information
• Pakistan’s Beverage industry is one of the top industries in Pakistan.
• It’s operating with around 170 units.
• Its sales volume is up to 30.5%.
• The beverage industry in Pakistan, currently having a size of little
over 120 million cases per annum with an annual growth of around
10-15 per cent,
• It has the potential to double its size in the next 3-5 years, if the
government's taxation policies towards this industry are corrected.
Neilson data for 20,000 individuals regarding there daily consumptions of a particular type of Beverages. Data provided by IBL representative
Beverage Industry- Pakistan
Beve
rage
Mar
ket
Bottled Beverage
Carbonated
Soft Drinks(Pepsi, Coke)
Energy Drinks(Stings)
Non-carbonated
Mineral Water (Evian)
Bottled Water (Nestle)
Sports Drinks (Gatorade)
Juices(Fruita-vitals)
Vitamin Water (Searle)
Non-bottled Beverage
Pakistan - Beverage Industry
Tea Soft Drinks Juices Milk/Flavored Drinks
Coffee Bottled Water Energy Drinks0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
6,026
4,118
2,658 2,5432,012
1,700
944
Tea30%
Soft Drinks21%Juices
13%
Milk/Flavored Drinks13%
Coffee10%
Bottled Water
9%
Energy Drinks5%
Tea Soft Drinks Juices Milk/Flavored Drinks
Coffee Bottled Water Energy Drinks0
5
10
15
20
25
30
13
18
16
26
23
21
13
BI Value Share PKR Bn
Tea10% Soft Drinks
14%
Juices12%
Milk/Flavored Drinks20%
Coffee18%
Bottled Water16%
Energy Drinks10%
BI Volume Share
Neilson data for 20,000 individuals regarding there daily consumptions of a particular type of Beverages. Data provided by IBL representative
Beverage Industry Carbonated and Mineral only (PKR 130bn)*
Mineral Water Carbonated Drink0
20
40
60
80
100
120
140
8
123
Mineral Water4%
Carbonated Soft Drink96%
Source : http://www.finance.gov.pk/survey_0910.htm, http://blablawriting.com/beverage-industry-in-pakistan-essay l
Major Players – Pakistan (Carbonated + Mineral)
Nestle Coca Cola Pepsi Vitamin Water Others -
200
400
600
800
1,000
1,200
1,400
124
687
1,225
0
324
Nestle5%
Coca Cola29%
Pepsi52%
Vita-min
Water0%
Others14%
Nestle3%
Coca Cola30%
Pepsi57%
Vi-tami
n Wa-ter0%
Others10%
Volume Units mm
Nestle Coca Cola Pepsi Vitamin Water Others -
10
20
30
40
50
60
70
80
4
38
74
0
13
Value Share PKR Bn
Source : http://www.finance.gov.pk/survey_0910.htm, http://blablawriting.com/beverage-industry-in-pakistan-essay l
Major Player in Mineral Water - Pakistan
Nestle Kinley Aquafina Vitamin Water Others0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0124.0
51.0
25.0
0.2
57.8Nestle
48%
Kinley20%
Aquafina10%
Vitamin Water
0%
Others22%
Nestle49%
Kinley22%
Aquafina11%
Vita-min
Water1%
Others16%
Volume Share
Nestle Kinley Aquafina Vitamin Water Others0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0 3.7
1.7
0.8
0.1
1.2
Value Share PKR Bn
Source : http://www.finance.gov.pk/survey_0910.htm, http://blablawriting.com/beverage-industry-in-pakistan-essay l
Product Analysis
A Complete Overview
Product Mix
SEAR
LEPharmaceutical
Analgesics
Antibiotics
Orthopaedics
8 Others
Consumer Brands
Canderel Sweetener Tablets
Vitamin Water
Coconut
Peach
Red berries
Apple
Watermelon
Orange
Lychee
Pomegranate
Lemon
Nutrition & Healthcare Nurturemil Water
The Core Competency - PharmaceuticalGood Distribution Partner - IBLNon-carbonated and caffeine freeProvided essential vitamin and mineralsAssociated with Searle brandFirst mover brand
Strengths Weaknesses
No direct competitor as yetIntroduce diet version of Vitamin waterGrowing trend of the segment globallyYouth tend to try new productPharmaceutical back ground
OpportunitiesCoca Cola & Pepsi both globally have a vitamin water of their own name Glaceue and GatoradePertain more flavours then Searle’sNo occasional relation of the productTreated as medical drink
Threats
SWOTAnalysis
Vitamin Provision by other beverages (Tang, Milo)Wrongly Positioned in Consumer mindTapping only Niche market segmentsLimited understanding of the productNot actively present over Social MediaHigh sugar content
Creating Value - Product
Core Benefit: Healthy Hydration, includes 6 essential vitamins to cover basic Needs
Actual Benefit: Not Just water, enhanced Flavored Water, Attractive packaging, Stylish Bottle, Impressive labeling, Quality Flavor,
Augmented Benefit: Provides taste as well as Vitamins and Minerals
Composition & Daily Requirements
Nutrition Facts
Serving Size 300/500 ml
Calories 84/140
% Daily Value * Reference Daily Intake (Adult)
Total Fat (0 g) 0% 90-160 mg
Total Carbohydrates (21 g) 7.2-12% 300 g
Sugar 21 g 25-37.5 g
Vitamin A 15-25% 500-900 µg
Vitamin C 30-50% 30-90.0 mg
Vitamin B12 30-50% 2.4 µg
Vitamin E 15-25% 15.0 mg
Calcium 6-10% 1000 mg
Zinc 6-10% 8-14 mg
* Percent Daily Values are based on a 2,000 calorie diet
Management Focus
• Vitamin Water is essentially for anyone looking for a healthy lifestyle and seeking healthier alternatives. We’ve designed this product for people on-the-go; young individuals with an active, happening lifestyle who are seeking simple ways to stay healthy.
• A "nutrient-enhanced" water consists of Vitamins and Natural flavors hydrating yourself with truly healthy beverages.
• USP is healthy drink against energy/soft drinks that is not carbonated and Caffeine free.
Market Geographic
Mar
ket D
emog
raph
ics
38%
SegmentationGeographic Segmentation World region or country PakistanDensity UrbanDemographic Segmentation Age 12-38Gender Female, Male Family size Not relevantFamily life cycle Young, single, married, married with children, single parents Income 25K+Occupation Students, doctors, engineers, managers, officialsReligion Any ReligionEducation Literate Psychographic Segmentation Social class Middle class, upper middles, Upper ClassLifestyle Healthy, professionals, businessmen Behavioral Segmentation Occasions Not specificBenefits Quality, convenience, safe and healthy User status Potential users, first time users, regular users User rates Daily User and Occasional userLoyalty status None, medium, strong, absolute Readiness stage Unaware, aware, informed, interests, intending to buy Attitude toward product Positive
Targeting
• Age group: 18+• Gender: Male and Female• Health conscious individuals• Literate - understand benefits• Intend to shift from CSD’s• Purchasing power parity• Social Economic Class: A & B• Wants consumer to perceive product
not just a healthy drink
Positioning
Position as an athletic product as a running and winning against the car. “KEEPS YOU RUNNING”
After the advertisement, people perceived as energy drink , without carbonated water and a good option than soft drinks. “VITAMINS KA BOOST - FLAVORS KA BURST”
But having perceived for sports or energy drink was not the idea upon which Searle wanted to position the product rather, it is a different product which comes under the enhanced water category. “KUCH TU MISSING HAI . . . VITAMIN”
Latterly come up with the new Position of ”BETTER THAN JUST WATER”
Product Differentiation
• Searle Vitamin Water is a new range of non-caffeine, non-
carbonated drinks.
• Core competency is association with Searle brand
• Identified points like thrill and health as possible relation
to brand.
• With uniqueness of Searle Vitamin Water is its attractive
packaging with low-end pricing.
P • Competitive based pricing• Rs. 35 for 350 ml• Rs. 50 for 500 ml• Gives maximum revenue
Price Product
• Niche markets• Metro Cities• A-class outlets• Dunkin-Donuts
Place• School/College Campaign• Trade Discounts• Social Media (Facebook)
Promotion
Marketing Mix
• Caffeine-free• Non carbonated• Healthy hydration• Fruity flavors
Channel IBL Retailers End-consumers
P
P P
Key
Com
petit
ors
Direct
In-direct
Generic
Budget
Perceptual Mapping
Carbonated Drinks
Energy Drinks
Fruit Juices
Vitamin Water
Mineral Water
Beverage Market
Heal
thy
Wat
er
Availability
Heal
thy
Wa-
ter
Availability
Wide Choice
Falv
ored
Wa-
ter
Based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer
Consumer Behavior Analysis
Consumer Behavior Analysis
Yes45%
No55%
Awareness of Product
Yes40%
No35%
Don't Know25%
Healthy Drink
Fair47%
Good27%
Very Good7%
Excellent7%
Poor13%
Overall Brand Rating
Energetic22%
Healthy35%
Price20%
Taste18%
Don't Know5%
Selection Criteria
Everyday; 3%
Once a month; 38%
Never; 30%
Thrice a week; 4%
Once a week; 25%
Frequency
Availability54%
Flavor26%
Taste7%
Price7%
Don't Know6%
Aspects to Improve
Consumer Behavior
The following conditions were there on the basis of which we felt that the consumers for this product is variety seeking: They are not much involved in purchase
of the brand They perceive high differences among
brands The product is not expensive The product is less risky, rather it is
nutritional The frequency of purchase of this
product is high Consumers may switch between the
brands not because of dissatisfaction but just for the sake of variety.
Variety seeking
behavior
Dissonance reducing buying
behavior
Complex buying
behavior
Habitual buying
behavior
High involvement
Few differences between brands
Low involvement
Significant differences between brands
Communication Mix
Advertising Sales Promotion
Public Relations Personal Selling Direct Marketing
Print & Broadcast Ads
School/College campaigns
Social MediaFacebook
Sales Representative
Plan to do SMS marketing
Packaging Outer Sampling Company magazine Sales meetings
Poster & Leaflets Shops and key outlet Events Incentive
programs
Billboards Annual reports Samples
POP display Fairs and trade shows
TV Commercials
Radio Ads
Facts and Opinions
Insight Marketing - The Next Big Thing
Sales Trend and Projection
2013 2014 2015 2016 2017- FC 2018 - FC 2019 - FC 2020 -FC 2021 -FC0
20,000
40,000
60,000
80,000
100,000
120,000112,782
66,353
55,294
82,941
74,647
67,182
77,260
88,84893,291
Company Showed us the Financial but refuse to share due to confidentiality
Decline Sales Trend Observed.
Heavy wastages and return due to Expire issue (18-22 %).
Product cost is almost half of the retail price.
Over head cost is almost 8% of the Sales. Due investment.
Not much spent on Adverting and promotion. Initially spend heavily.
Selling and administrative expense are 11 – 12% of Sales.
Financial Charges 6% of Sales.
Net Profit is showing a loss and increasing trend of Loss. (-11% to -15%) Approx. –
10 MM loss per year.
Financials - Our Findings
Sales Wastages/Return
Overheads BTL activity Operating Exp
Financial Charges
Net Profit
-9% 18-22 % Sales
8 – 9 % Sales Not much 11-12% sales
6% sales -11-15%
Issues and Criticism
Issues and Myth Criticism Management Response
No vitamin/minerals Low price cannot justified Not an instant energy drink, works as supplement.
Unhealthy drink Not suitable for routine consumption
Quantity allocated as per recommended RDI, as vitamins are water soluble.
Too sweet lead to bitter Excess sugar intake Intake sugar level is more than twice in contrast to SVW serving.
PET bottle is carcinogenic Carcinogenic if exposed to direct sunlight
Minimal the chances because of cold storage, shelf life is less than 6 months though chances of contamination is much low.
Hourly Type Questions
1) In your view do you think that this product is successful? If not, Why?
2) Do you think the positioning of Brand is correct ? If not, Why? Discuss
3) What do you think what strategy company should adopt in order to revive
the product and make it profitable?
4) Is it good idea for Searle to enter into new categories? If yes, in what
attributes?
CONCLUSION
• Excellent Concept and Product, has potential of performing better.
• Still struggling to position this product due to confuse positioning.
• Not being able to capitalize the early mover advantage.
– Limited marketing funds, consumer awareness, undeveloped brand identity
– Crucial objective to achieve big market presence with small budget.
• Targeting age bracket between 15-38 years only.
• Mainly Focusing in the Niche market. (Metropolitan cities)
• Fear of short Shelf life i.e. 6 months expiry.
• Some essential vitamins missing due to high cost.
• Two to three attempts made to correct positioning, all gone in vain.
• Product trial was quite successful but due to incorrect category analysis followed
by improper positioning of the brand experience non-repetitive behavior.
Key Determinants (Conclusion)
• Issues with Strategy implementation.
Key Determinants (Conclusion)
Description Check Mark Remarks
Generation of Idea
Concept or Idea was good as per the market need.
Analysis of Idea Proper analysis was done on the product. Neilson data acquire. Due diligence done.
Strategy Formulation
Wrong positioning, R&D issues of Expiry. Confuse advertising. Good Distribution IBL. Wrong choice of flavours.
Strategy Implementation Wrong formulation implemented correctly.
Evaluation and Control No Post launch evaluation and Control
Monitoring of Marketing Strategy
• Effective for the period of Six Months.• Continue if found successful.• Make changes as per recommendation of stakeholders.• Re launch the strategy.• Monitor further 3 months.• Continue if successful.• Discounting if unsuccessful.
RecommendationsFactors Issue Recommendations
Product / category
Too many flavors
SKU rationalization Improvised flavor to revamp the product Searle should try to enter into new categories e.g. Sports, Corporate,
Women/Children (Category Formation) They should communicate their message clearly regarding the product
efficacy. Need to incorporate ethnocentrism factor
Customer / Market Niche Market
Searle should explore more market expansion option. (2nd Tier) Searle should expand its net of target customer. Since current targeted
segment accounts for only 1-2% of the total population, so in long term benefits can’t be reaped off.
Positioning Confuse Positioning
Searle should be more focused upon the positioning of the product. Either they want to let the product perceive as a healthy drink for all or is
it as an energy drink. Enhanced water category should be formed i.e. Healthy water
Recommendations
Factors Issue Recommendations
Consumer Behavior
Variety Seeking Behavior
Encourage the habitual buying behavior by ensuring availability at all outlets.
They should avoid getting stock out conditions They should increase their advertising Price could make a difference Free samples and gifting and/or special package should be
planned
Other Partnership and Acquisitions
Focus on Relationship marketing by creating theme such as Pure Water for All
Partnering with public/private organizations (Airlines) Can export to Middle East region through international partners.
Low Profitability
High Sales Return and write off due to shorter shelf life.
Searle Should do some R&D to increase the expire of the product in Order to reduce the loss and invests in Advertising to create the awareness of the brand.
Reduce production cost by achieving economies of cost.
RecommendationsFactors Issue Recommendations
New Product Development
Cater large number of target audience
Searle can also come up with the variant of carbonated water. They can have 2 product lines, Vitamin Water with carbonated and
caffeine and non-carbonated water. Since the acceptability of carbonated water is more than Vitamin Water in Pakistan.
Need to use zero-calorie stevia sweetener by combining stevia extract with sugars, by which can reduce the sugar and calorie levels of the range by 30 per cent.
Communication Confuse Advertising
Searle should enlighten its customers regarding the product. Make and air logical advertisement with meaningful message. Develop integrated campaigns combining well-known celebrities
with unexpected marketing channels. Stretch early budget eff orts with aggressive outdoor response
advertising solutions that accelerated buzz of entire media campaign
Brand Awareness Top of the mind share
Brand awareness is something which Searle has to work upon. As the idea of school campaigning was quite good but still there
should be more sponsorship to some sports programs as well with free gifting in order to create space for them in the market.
For targeting children and adults, need to cope-up with some fictional character and celebrity endorsement respectively.
When actually Marketing Rocks
• Marketing is not sales its about satisfying a need to enable the product to sell itself
• Marketing is storytelling to create anticipation of the consumption moment and then prolong the delight
• Marketing is a science of pricing, of behavioral economics, of consumer research and product design
• Marketing acts as the voice of customer and drives customer centricity
Revenue or Brand?
Mind Share
Market Share
Profit Share
Simpler - The Better
Who Am I? Why Buy Me? Why Not Buy Something Else?
QUESTIONSWe’re Ready To Answer Your
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