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Victor Brand Case

Analysis
By Group B
Neeam.S, Ramya R, Rahul, Rahul.G, Rahul.O,
Krishnan, Jagannathan
Submitted By: Group B

Q.1) SWOT ANALYSIS:


Strengths:

•Price advantage in the crowded milk market. Was available at the lowest
price: Rs 65
• Various nutrients like Vitamin A,B1,B2,B12 as well as minerals, niacin and
iron were added.
• Increased Budget for Advertisements in 2000: from 8 lakhs in 1999 to 30
lakhs in 2000
• Aggressive marketing through regional newspapers and promotion through
sponsoring cultural festivals in 100 B class towns
• Attractive commission policy to retailers.
Weakness:

• Only 25000 retail outlets when compared to the larger companies which had
over 1 lakh
• Advertising only at the regional level. National Market is neglected
• Some ingredients could not be added to victor plus because of their
incompatibility and machinery constraints.
• Almost nil presence in A+ retail outlets and only 5% in class A retail outlets
• Retailers perceived Victor plus as a brand which lacked appeal and visibility
and may not move.
Opportunity:

• Under Utilized production capacity-has a large installed production capacity


which can be exploited
• Blind taste tests elicited a favorable response from the customers
• Can try to tap the “drinking chocolate” market
• Can tap the lower income households because of its lowest price in the
market. Can emphasise on its value for money aspect.
• Can venture into the institutional segment which comprised mainly of
vegetarian restaurants. Could be offered at a lower rate than Victor and also
this segment has lower brand loyalty which would help Victor in positioning
itself in this segment.
Threats:

• Large number of well established competitors in the market


• Consumption of white beverage is increasing, more so in South India where
Victor has a large consumer base.
• Retailers not willing to provide shelf space to Victor plus

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

• Many respondents did not consider Victor as a national brand- Negative


image in the minds of the custom
• Competitors may come up with a good tasty product

Q.2) Problems faced by Victor Plus


• Not perceived as national brand because positioning was inconsistent
○ 1st it was promoted as an energy drink, later it was promoted as an
instant chocolate drink
• Needs to decide if it wants to be a regional player or a national player
• Victor is not perceived as a national brand inspite of an all India retail
presence.
• Retailers unwilling to provide shelf space to Victor plus because of its low
brand visibility.
• A very crowded market, not able to differentiate itself from the other brands
• Low revenue resulted in lower advertisement expenses
• VCIL had about 25000 active retail outlets compared to Nestle and Cadbury’s
over 1 lakh retail outlets
• Victor Plus was available only in 20 percent of VCIL’s retail outlet

Q.3) Plans of Branding and Marketing for next year


As discussed earlier, Victor Plus brand image is not consistent. To overcome this, we
suggest launching different variants targeting different segments. These variants
can be:

• Pure Taste: North and West Indians use Victor Plus as a milk additive/taste
enhancer. An extension of Victor Plus as a pure taste enhancer can be
launched in these areas.

• Pure Health: Target segment can be old people and South Indians which
constitute a major share of the market for white beverages.

Company needs to decide whether it wants to be a regional player or national


player. If it wants to be seen as national player, then it cannot ignore advertising
through the medium of television as it has the highest penetration.

Increase the Price: Price of competing brands is much higher than the Victor Plus’
price. In order to be seen at par with its competing brand, it may increase its price
by 20% i.e., Rs. 84 instead of current Rs. 70. By increasing the price, VCIL could

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

improve the nutrients and the packaging. It may come up with a reusable container
or some promotional schemes to lure the kids.

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

Q.4) Calculation of BEP and Sales Target


Variable Cost per 500 gm 38.78

Price set by VCIL 57.4

MRP of VCIL 70

Total Revenues 28799876

Allocated Fixed Costs 12983200

Total Fixed Costs 16983200

Break-even Point 456,047

Current Net Profit -7640801.2

This shows that the company’s target should be to achieve 456 tonnes of sales of
Victor Plus. But let us take a different angle to this.

Total Company Sales 350000000

Sales from Consumer and Industrial Products 200000000

Sales from Victor Plus 28799876

Sales Value of Chocolates 85344000

Industrial Product Sales 85856124

MNC Contract 150000000

Contribution Margin from Victor Plus 32.44%

Contribution Margin from Chocolates 32.44%

Cont. margin from industrial products 15%

MNC Contract 12%

Contribution from Victor Plus 9342399

Contribution from Chocolates 27684761

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

Contribution from Industrial Products 12878419

Contribution from MNC Contract 18000000

Total Contribution 67905578

Total Overhead costs comes to be Rs. 6,89,16,000. This shows that company is
nearly able to cover its fixed and variable costs as a whole. Thus company is in
good position but it should try to increase its revenue to generate profit or return on
investments through the points we have mentioned earlier. The next year’s target

Growth of Tast Immunit Digestio Metabolis


Gives Form tissue e y n m Energy
Bournvita 1 1 1 1 1 1 1
Maltova 1 1 1 0 1 1 1
Boost 1 1 1 1 0 1 1
Milo 1 1 1 1 0 1 1
Victor
Plus 1 1 1 0 1 0 1
Nutramul 1 1 1 1 1 0 1
could be set to reach the break-even point which is 456 tonnes.

Q5) Do an ingredient and nutrient, utility comparison of


the competing brands with Victor plus and bring out the
POPs and PODs. What all ingredients and nutrients will
you add to get the appropriate utilities for Victor plus. ?

Table 1: Brand – Ingredient Utility Matrix (Combination of Table 2 and 10 from the
case)

The above table thus indicates that Victor plus doesnot have any ingredient that
contributes to immunity and Metabolism. This thus becomes the point of
differentiation. Rest of the utilities is the point of parity with the competitors.

Table 2: Brand –Nutrient Utility Matrix (Combination of Table 3 & 11 from the case)

Repairs damaged Metabolis Growth of Immunit Growth of


cells m Tissues y Blood Bones
Bournvit
a 1 1 1 1 1 1
Maltova Data Not available
Boost 1 1 1 1 1 0
Milo 1 1 1 1 1 1
Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |
Ramya Ramachandran
Submitted By: Group B

Victor
Plus 1 1 1 1 1 1
Nutram
ul Data Not available
The above table indicates that victor plus is at point of parity with the competitors
at all the utilities possible. It also takes care of immunity via the nutrients added to
the brand. However, only Vit B2 contributes for metabolism.

Thus, we recommend addition of Vitamin C to the brand Victor Plus to increase


metabolism utility.

Q6) Comment on the positioning of Victor and Victor plus?


Draw 3 most important perceptual maps to show the
position of Victor plus. What according to you, should be
Victor plus's positioning platforms and hence positioning
statements, according to your group?

From the above perception map we can see that Victor Plus is almost similar to
Maltova in price and taste. It ranks high on both parameters and has better taste
than Boost, Milo and Nutramul and lags behind only Bournvita. Victor Plus is also
priced better than most competitors like Milo, Boost and Nutramul.

Victor Plus is perceived to be very low on Nutrition content as well as brand name. It
is found to lag behind all its competitors in these two areas. This shows that the
brand’s positioning as the Nutritious cocoa drink is not working and the consumer is
not able to associate the Victor as a nutritious drink. Hence the brand’s positioning
needs to be changed and the brand should be positioned on its core strength which
is its taste. More so as its competitors like Bournvita, Nutramul who are positioned
as health drinks are doing very well.

From the above perception map we can see that Victor Plus is considered an easy to
mix product. It ranks high on this attribute as compared to other competitors.
However the packaging of Victor is not very attractive as compared to others like
Milo, Boost, Maltova and other products.

Positioning of the product – Victor Plus

Drawbacks of current positioning:


Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |
Ramya Ramachandran
Submitted By: Group B

1. The current positioning of the drink as nutrition drink does not go down too well with the
consumer as shown in the perception map.
2. The positioning of Victor initially was as energy drink then changed to nutrition and tasty
drink. The brand attempts to compete with its existing competitors on all attributes rather
than positioning itself on its core strength and build on that strength.
3. The positioning statement “ The tasty and Nutritious Cocoa drink with milk” does not
strike a chord with the consumer and is not catchy either.
4. The brand needs to create an identity for itself, find a word or associate itself with
something that becomes synchronous with the brand. For example, when u talk to boost
we immediately think of it as a source of energy, as their positioning, promotions and
advertisements are all centered around the word energy.

New Positioning strategy:

From the Ingredients utility table, we get the following composition of victor plus
and the utility it contributes to.

Energy Position
Victor Plus
Gives Growth of Tas Immun Digesti Metaboli Energ
Form tissue te ity on sm y
Malted Barley 0 1 0 0 0 0 1
Sugar 0 0 1 0 0 0 1
Salt 1 0 1 0 0 0 0
Cocoa 1 1 1 0 0 0 0
Potassium
Bocarbonate 0 0 0 0 0 0 0
Caramel 0 0 0 0 1 0 0
Added Flavour 0 0 1 0 0 0 0
Glucose 0 0 1 0 0 0 1
Count 2 2 5 0 1 0 3

We can see that Victor Plus is high on taste followed by energy content.

From the first perceptual map, we can see that the consumers rate Victor plus high
on taste as compared to other competitor’s products. This can also be seen from
the blind taste tests that were done where the consumer chose Victor Plus over
other products.

Hence we suggest Victor Plus to be repositioned as “The Tasty Energy Drink”. Also
by this positioning both target segments of children and mothers can be captured.

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

Q.7) Should the package be re-designed? If yes, How?


Design and draw and explain.
Victor’s current label:

Comparing with the competitor’s labels, we observe the following drawbacks of the
current label:

– Too many colours. The colour of the label should represent the brand
to create an identity for the brand

– Brand name is not clearly visible on label, should have bold and
blocked fonts so that brand name is visible at a distance

– The label emphasizes on drifferent things on front and back side. It


should have one tag line and should stick to it.

– The backdrop could be more appealing, currently it is very plain and


there is lack of continuity.

Keeping above points in mind, we have designed the new label as follows:

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

The main aim here is to ensure the brand has its own distinct identity. The colour
Blue was chosen as the brand colour and the emphasis of the packaging is on
attracting children and mothers and drawing attention to the taste factor of Victor
Plus.

Packaging:

The idea is to create a packaging that creates a point of differentiation with respect
to other products.

We suggest that they should not stick to one form rather have different forms for
different quantities and have special packs. The different forms of packaging could
be:

– Differently shaped bottles

– Bottles that could double up as water bottle, once the content is used
up. This could draw the attention of many children and parents.

Eg:

– Smaller container packs to promote the taste. These packs could serve
as trial packs for new customers and this type of packaging involves
low cost. These could serve as refill packs too.

Eg:

– Use of one colour on all packs -> ensure the brand identity

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

Q.8) What should be Victor plus'


promotion/advertising channels and budget? (Create one
sample rough print ad)
Target segment : Mothers and Children, Medium to High Income group.

Promotion strategy:

– Heavy advertising to ensure high awareness of the brand and its benefits.
– The new packaging of the Vicro Plus sold in water bottles can be promoted.
– They could continue the promotions across schools and colleges.
– Trial offers to attract new customers
– They could also sponser some huge kid’s event or television series on T.V
which would increase their visibility. For eg: The Bournvita Quiz contest is a
very popular T.V quiz show.

Advertising Channels:

If the brand Victor Plus needs to compete with other national brands it has to be
advertised extensively in local as well as national media. Some of the channels
could be:

– Television Ads
– Radio Ads
– Billboards at various locations
– Print Ads in newspapers and children’s magazines

Here is a sample print ad to attract the target audience.

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

Q.9). What should be the trade promotion strategy?


• Victor Plus need to be targeted mainly at institutional buyers like
restaurants,snack bars etc. as their value proposition involves mainly taste
and low price.
• This means that they may not have retailers in their channel and can cater
to the segment directly through distributors.The trade promotion strategy
for Victor Plus would be to provide sales turnover based incentives to the
distributors as their current objective would be to gain market share.They
can provide quantity based discounts and monetary incentives to these
distributors.They can also provide reimbursements to a certain extent for
salesforce salaries and agree for refund of sales returns.They need not use
the retail channel to reach to the mass market as they are not targeting
the household.
• Since the value offering is not suited for the consumer market where the
main decisionmakers are married women who generally buy for their
children,Victor Plus may not stand a good chance in the market.This is
because they look at nutrition as a main sought after benefit which is not
offered by Victor Plus vis a vis the competing brands.
However,they can try to promote the brand among children by advertising
in children’s comics etc. and induce trials through promotions like giving
away small toys,cartoon stickers etc.This may help use pester power to
influence the households and finally try the product.Since the product is
said to be tasty,it can be assumed that the children may continue to
demand the product.This implies they have to give sales promotion
assistance to the retailers in attracting the children to the store and try out
the product.

Q.10) What should be the pricing strategy of Victor plus?


• Victor Plus should aim at pricing the product well below the premium
brands as their main objective would be to gain market share in the
institutional segment. Since price is a very important factor in institutional
sales, and since taste is one of the main benefits in their offerings to end
consumers, Victor Plus has a very good opportunity to obtain market
leadership in this segment.
• However, the health beverages are mostly consumed in high income
households with young children. Hence, low price may not be a very
Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |
Ramya Ramachandran
Submitted By: Group B

critical purchase criterion for brand choice. On the contrary, low price may
give the perception of poor product quality.
• So, we need to decide if we have to focus on high-income households or
institution segment. Accordingly, the pricing strategy should be devised.

Q.11). Should the company launch a new product variant


of Victor Plus for institution segment? If yes, what
should be the description of the product in terms of
ingredients, nutrients and utilities and how should it be
positioned as? If no, why?

• Identify those markets where the MNCs are not interested.


• Yes, the company should launch a new product variant of Victor Plus for the
institutional segment.
• Need for a new Product variant- For Victor Plus, many new nutritional
improvements through added ingredients have been proposed (such as
vitamins, potassium bicarbonate etc.). For a product variant meant for the
institution segment, such nutritional aspects are not part of purchase criteria.
Hence a different product variant will be needed for the targeting the
institution segment.
• Need for different positioning- The institution segment would likely place
highest importance on price (rational decision makers in institutions would
link it to tangible benefits to their businesses), and on taste (as per the case
facts, canteens, restaurants and juice parlours use brown beverages as
additives to milk/lassi for adding taste). Moreover, the positioning of Victor
Plus has been toward children and mothers (with its imageries on the labels
and the advertising), which is irrelevant with the institution segment.
• Price- The variant itself can be designed to save on costs of production as far
as possible, by not adding ingredients that are proposed for the improved
Victor Plus. The price can be much more favorable to the institution segment
this way.
• The Product variant’s Name- The product can be named in such a way that
the consumers come to know of the primary utility of the drink. A name that
also combines an element of the parent company’s name (Victor India Ltd.)
would serve to establish the credibility of the parent company. The following
name would be feasible for this purpose- VictorChocoShake. This name on
menu cards would communicate the utility (a chocolate drink) to the
consumers and induce them to order it, while also bringing the name Victor
into the minds of the Class A and B town consumers who frequent
restaurants.
• Deals/promotions- Some discounts to the institution buyers for allowing use
of the Victor name on the menu cards will need to be allowed.
• Description- The description of the product should be as follows:
Ingredients- The ingredients can be mentioned with minimal
importance on the label covering the bottle. The institution segment will not
attach much importance to this aspect of the product.

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran
Submitted By: Group B

Nutrients- Again, not much importance needs to be attached to this


aspect. Some information concerning the nutrients in the beverage can be
communicated through the label though.
Utilities- The utility that matters to the institution segment and
consumers is chiefly taste in this case. If the superlative taste utility of the
new variant is communicated clearly, the target segment will likely be in favour of
buying the product.

Jagannathan | J.Krishnan |Neelam Sathe |Rahul | Rahul Garg | Rahul P. Oswal |


Ramya Ramachandran