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CASE STUDY FREMCO CORPORATION: UNDERSTANDING INDIAN MARKET FOR A NEW PRODUCT LAUNCH

Presented By:
Arzoo Singh Alok Madhav Anurag Nagar Vandana Rana

INDEX

CASE SUMMARY KEYPOINTS SWOC ANALYSIS QUESTIONS ANSWER

SUMMARY

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The case is about Fremco Corporation Ltd., planning to launch to a new product in Indian market Rajiv Bhagat the CEO of the company evaluating a note prepared by his strategy team to have good understanding of Indian Market before taking decision about the new launch. Now as per the note India is the hottest destination for all multinational companies due to its expanding middle & upper class consumers, liberalization policies and prospects. Many of the multinationals enter India decided to pack and leave the country because of the miniscule business coming their way. And the reason for this misadventure is that major market today lies in rural areas as well as Indian consumers have different tastes and preferences The above scenario is particularly common in food product industry .Several major food products have failed in India and limited only to four metropolitan cities only.

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One of the leading brand in fruit juice market, Fresh and Sweet, which is owned by one of the biggest and diversified business house Fremco Corporation Ltd. enter into the already crowded market Fremco is recognized in 57 countries as its beverage are recognized as top products everywhere, as well as its food product like cookies, fruit bar and fruit based canned products etc ,and its fruit juice is another successful product in its portfolio in around 30 countries. Fresh and Sweet is the leading brand in fruit juice market especially in USA, owned by Fremco Corporation Ltd. The company recently declare that their juice dont have any sugar, preservative or additive and preservative, and they also mention that 100% pure fruit juice till now not available in India. Demand for 100% fruit juice is there but they also want something which can be available for long run. Fremco Ltd. have their raw material from orange producing state i.e. US but looking for the raw material in India and they have long term view and are not in a hurry to sell and go back.

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The company do test market of its two juices in Banglore, Mumbai and Delhi The response was satisfactory But the consumer want a juice with little sweeter taste as juice are bland without sugar. To overcome this taste problem company planning to blend juice with another sweet fruit to get the required taste. The response regarding price, packaging and volume was satisfactory. Out of 30000crore rupees market for branded Indian drink, only 2 to 3 percent is captured by branded juice and the rest by soft drinks. And with the rise in health and fitness, this market supposed to increase in next two year Fremco, well known for its advertisement spender in the company , planning an ambitious marketing and advertisement plan or we can say an aggressive promotional strategy.

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The agency of Fremco brand working for last month to get desired data on consumer behavior through ad- campaign, the advertising expenditure come out be 75lakh, out of which35 spent on television, 10 on hoardings, 18 on sponsorship, 10 on newspaper, and the rest 2lakh on other medium. Indian market is flooded with unbranded fruit juice The major Indian competitors for Fremco and one multinational one are Juicy, Berry, Indiana, Grapes, Knight.

KEY POINTS
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India is the hottest destination for all multinational companies due to its expanding middle & upper class consumers, liberalization policies and prospects Fresh and Sweet is one of the leading brand in fruit juice market Fresh and sweet is owned by Fremco which is into diversified food business , thus it can bear the initial cost to penetrate in the market. Indian market is flooded with unbranded fruit juice Selling 100% pure juice which is not available in Indian market Taste of Indian consumers are different which may induce Fremco to change its blend of ingredients Raw material for Fremco comes from USA ,looking for raw material in India. Response regarding price, packaging and volume of sales in test market is satisfactory but people demanded for fresh juice but the one which can be available for long run.

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Out of 3000crore rupees market for branded Indian drink, only 2 to 3 percent is captured by branded juice and the rest by soft drinks. Fremco is one of the biggest advertisement spenders in the country, spend 75lakh amount in ad- campaign.

SWOC ANALYSIS
STRENGTH Established Brand Pure juice Good financial position Marketing strategy

WEAKNESS market share is less OPPORTUNITY Untouched rural market Positive response from Indian consumers CHALLENGES local fruit juice vendors Competition Raw Material

Q1

Most important prospective is availability of raw material for juice manufacturing Acceptability of packed juice in India

Q2

Most important prospective is availability of raw material for juice manufacturing Acceptability of packed juice in India

Q3
Health and Hygiene Media Influence Convenience Product Features Package Design

Personal Factors  Life Style  Economic Situati

Q4
Taste which would result in the change in complete production and processing process Raw Material wasnt available in India itcame from USA Brand loyalty In case of beverages normally new brands are not quickly accepted by the mass

Q5


Brand positioning strategyBrands who are in direct competition like juicy, berry, indiana, grapes Competitor's positioning strategy Asses the Positioning strategy in other countries Comparing the expected result of positioning with the competitor's positioning in the market so that variance can be obtained. Product positioningRelevant buyers of the product Attributes of the product Determining the customer's share of mind(the product they recall in any category)

ADVERTISING STRATEGY
    

The main part of IMC process. New product so Push Method should be used Target consumer Demographics and Psychographics Behaviors Needs and Desires Communication MediaPrintPrimarily newspapers (both weekly and daily) and magazines. AudioFM and radio. VideoPromotional videos, infomercials. World Wide Web. Direct mail. Outdoor advertisingBillboards, advertisements on public transportation (cabs, buses).

 

 

Advertising messagePoints to consider during the formulation of the messageFeatures of the juice How do consumers evaluate the juice? What is likely to persuade them to purchase the juice? The message should be precise and simple and should communicate information about the business and its product.

 

   

BudgetNewspaper and magazines Audio, Video and internet Implementation and Measuring EffectivenessIf the brand awareness has to be created then market research should be carried and if sales advertising has to be checked then the followingToll free no. Reply coupon Readers reply in magazines and newspapers Total cost & ROI- Calculate the total costs like The cost of buying advertising space. Design costs, print preparation. Brochures and other literature. The fulfillment cost (goods, postage, delivery, employee costs and so on).