DMM08

Product Management

Assignment I

Assignment Code: 2009DMM08B1 Last Date of Submission: 30th September 2009

Maximum Marks: 100

Attempt all the questions given at the end of the Case. All questions carry equal marks.

Case Study

The Gillette Company

Founded in 1901 by King C Gillette, the Gillette Company was one of the first great multinational
organizations and a marvel of marketing effectiveness. Only four years after founding the firm in Boston,
King Gillette opened a branch office in London and rapidly obtained sales and profit throughout Western
Europe. About 20 years later, he said of his safety razor:

There is no other article for individual use so universally known or widely distributed. In my travels, I
have found it in the most northern town in Norway and in the heart of the Sahara Desert.

Gillette set this goal for himself: to offer consumers high-quality shaving products that would satisfy basic
grooming needs at a fair price. Having gained more than half of the entire razor and blades market,
Gillette’s manufacturing efficiency allowed it to implement marketing programs on a large scale, which
propelled Gillette forward in profits and in market leadership. Riding this tide of good fortune, the
company weathered the storm brought on by World War II and emerged in a very healthy condition. In
1948, Gillette set its all-time performance record with profits per share of $6.80. Gillette has not
approached this level of success since that time.

In 1955, Gillette decided to tread new waters and undertook two unrelated acquisitions. The first
acquisition was the Toni Company, maker of do-it-yourself home permanent wave hits. Although this was
a profitable venture initially, sales and profits soon faded. The second major acquisition was the Paper
Mate pen company, which at that time made only retractable, refillable ballpoint pens. It, too, was
profitable, but soon Bic’s low-priced, disposable (nonrefillable) pens came over from France. Party due to
these two acquisitions, Gillette slowly began to lose its edge, and net profit slumped to $1.33 per share in
1964.
IN 1962, Gillette’s U.S. market share hovered around 70 percent while its success abroad was even better.
Around this time, the English firm Wilkinson Sword introduced a stainless steel blade in the United States
and began taking a substantial portion of Gillette’s market share. Partly due to the time devoted to
experimenting with the home permanent wave and pen businesses, and partly due to the small size of the
Wilkinson Sword Company, Gillette underestimated the potential impact on its core business. Also,
Gillette executives were unsure how to react. Should they introduce their own stainless steel blade or
ignore the rival and hope that its market niche would remain small?

Gillette was lucky. Although it eventually introduced its own stainless steel blade, the real break came
when Wilkinson was unable to exploit the niche it had created. Due to its lack of resources, Wilkinson
Sword was unable to compete with the powerful Gillette machine and eventually sold much of its blade
business to Gillette. However, the impact of this dilemma had already been felt. In 1965, Gillette’s market
share hit an all-time low of 49 percent. The lessons learned from this challenging time are still with Gillette
today and guide many of its decisions and actions.

The Move toward Diversification

Attempting to resolve the crises of the early 1960s was Gillette’s new CEO, Vincent Ziegler. Ziegler was
aggressive, marketing oriented, and ambitious for the company, believing in diversification through the
acquisition of companies in other business segments. Within the next few years, Ziegler spearheaded the
acquisition of the following companies.

Braun AG (German manufacturer of small appliances)

S.T.Dupont (French maker of luxury lighters)
Eve of Roma (high-fashion perfume)
Buxton leather goods
Welcome Wagon, Inc.
Sterilon hospital razors
Jafra Cosmetics (home sales)

Four of these acquisitions proved to be unprofitable or unsuitable and were divested, and the other three
yielded low profits by Gillette’s standards. Other troubles came from the French manufacturer Bic, which
excelled in disposable products. Its 19-cent disposable stick pens particularly affected the Paper Mate line
of refillable pens and drove Paper Mate’s share of the retail ballpoint pen market from over 50 percent
down to 13 per cent – a 75 percent drop. Gillette had retaliated quickly with its new Write Brothers line of
disposable pens, which failed on the first introduction in 1972 but succeeded in building market share when
reintroduced to the market in 1975 with heavy price promotions. Bic also threatened Gillette’s strengths
with two other products – its disposable razors and lighters – which they marketed very successfully in
Europe and elsewhere.

The Ziegler era had its successes. Cricket disposable lighters were introduced in 1974 and did well. Soft
and Dri antiperspirant joined Right Guard, expanding Gillette’s position in the deodorant market.
However, the belief that aerosols destroy the ozone layer caused sales of spray versions of these products
(along with all other brands of spray) to plummet suddenly, creating a crisis in these segments. Meanwhile,
Gillette’s Trac II razor was a great success, and the razor segment continued its dominance. Earnings per
share rose to$2.83 in 1974, but slipped again the next year.

At this juncture, Ziegler retired from active direction of the company and sought to hire a successor. The
first choice candidate did not remaining the position very long, and Colman Mockler was then asked to step
into this position, which he accepted in 1976. under Mockler, Gillette’s strategy was to cut costs
dramatically and pour the money saved into ad and product development budgets. The Mockler era was
one of the most successful in Gillette history, producing such memorable innovations as the Atra razor, the
Good News! Disposable razor, and the Daisy razor for women. With such product additions, Gillette not
only held a majority of the U.S. shaving market (including the leading saving cream), but up to 75 percent
of market shares in countries around the world.

During this period, Gillette’s major marketing war was in disposable lighters. When Cricket was launched
in 1974, it was an instant success. Then Bic entered the U.S. market and enticed smokers to “Flick your
Bic.” A long-term price was ensued in which Bic succeeded in outselling the Cricket by a small margin,
but Gillette was persistent.

A principal aim of the Mockler management team in the late 1970s and early 1980s was the recovery of the
company’s earnings to previously established levels. Through a series of aggressive economizing measures
and acquisitions, the company was able to show strong in earnings per share throughout the decade. Two
outside acquisitions played key roles in Gillette’s resurgence in the early 1980s. First, in 1979, Gillette
acquired the Liquid Paper Company, the leading maker of typewriter correction fluids. This gave a much
needed boost to its writing instruments segment. Second, in what appeared to be a minor acquisition at the
time, Gillette purchased a small maker of skin care products. Aapri, by the end of 1980, Gillette sales
topped the $2 billion mark for the first time in the company’s history.

Along with these acquisitions, the introduction of new products developed in the Gillette laboratories
helped boost sales in the razor and blades, personal care, and writing instruments segments. First, in the
razor and blades segment, Gillette introduced the Atra-Plus shaving system, which featured a refillable Atra
cartridge with a lubricating strip. This overtook the Trac II as the number one selling razor. Also, Gillette
updated the Good News! Line to include a disposable razor with a lubricating strip. In the personal care
segment, Gillette made several introductions, including Aapri facial care products, Dry Idea deodorant,
Bare Elegance body lotion, Mink Difference hair spray, White Rain hair care products, and Silkience
shampoo and moisturizers. These additions had mixed results and left Gillette still searching for the keys to
success in this business segment. In the writing instruments segment, Gillette achieved moderate success
with the development of Eraser Mate erasable, disposable pens. Also, the steady sales of Paper Mate pens
and Liquid Paper correction fluids helped to maintain company performance.

Despite its ability to post above-average performance during the 1980s, many analysts saw Gillette as a
stagnant, lazy, sleeping giant, with earnings potential far above current realizations. These analysts based
their evaluation on Gillette’s considerable name recognition and market power, and its well-established
marketing and production channels worldwide. Although the company was successful, Gillette just cold
not seems to leverage its core strengths to become dominant in each of its markets. Part of the problem was
that Gillette was still growing and changing. The Oral-B Company was acquired in 1984, while the Cricket
division was divested in 1986. In fact, Gillette’s attractiveness led to an unsuccessful takeover attempt by
the Revlon Group in 1986.

Corporate activities during the late 1980s and early 1990s included additional acquisitions, product
innovations, and promotional campaigns that have defined the Gillette we see today. Gillette was still
growing in the stationery market with the acquisition of the Waterman Pen Company in 1987 and Parker
Pen Holdings in 1993. Arguably one of the most successful marketing campaigns in history, Gillette’s “The
Best a Man Can Get” campaign was launched in 1989. Two additional events occurred in the late 1990s:
the acquisition of Duracell International in 1996, and the launch of the Mach3 shaving system in 1998.

Current Business Segments and Products

Case Exhibits 1 and 2 depict Gillette’s most current financial situation. After enjoying record sales and
profits in 1997, Gillette began to experience a reversal in the growth to which it had been accustomed. The
company pointed to economic problems in Asia, Brazil, and Russia, as well as a decline in the value of the
Euro currency, as reasons for sales and profit decreases. In addition, Gillette made several strategic
changes that no doubt shaped the future direction of the company. In February 1999, Alfred Zeien retired
as Chairman and CEO and was replaced by Michael Hawley, a 39-year veteran of Gillette. Later in 1999,
the company announced that it would focus on three key segments: Grooming Products (blades, razors and
related toiletries). Portable Power (alkaline and specialty batteries), and Oral Care (toothbrushes and
plaque removers). At the turn of the century, Gillette operated two additional business segments – Braun
products and the stationery division; however, these segments were not considered primary businesses for
Gillette. Case Exhibit 3 depicts Gillette’s product lines and product mixes.
Grooming Products

Gillette remains the world leader in blades and razors, and this business continues to grow. The company
holds dominant market share worldwide for men’s blades, razors, and having preparations, as well as
women’s wet shaving products and hair epilation devices. As case Exhibits 1 and 2 illustrate, sales and
profits remain strong, with sales increasing about 7 percent in 2002. The blades and razors segment
accounts for roughly 40 percent of Gillette’s sales and over 70 percent of the company’s profits. Sales in
this segment have more than doubled since 1989, and the outlook for this segment is promising as the
shaving population increases, particularly in such locations as Asia. Eastern Europe, and Latin America.
The company’s progress in the principal line of business reflects the outstanding market success of its
technologically superior products, including the Sensor family of shaving systems and more recently
Mach3 system.

Case Exhibit 1 - Net Sales and Operating Profit Contribution by Business Segment

Blades and Personal Care Duracell Oral Care Braun All Other
Razors
Year Net Profit Net Profit Net Profit Net Profit Net Profit Net Profit
Sales sales sales sales sales sales
2002 41% 72% 10% 3% 22% 13% 15% 12% 12% 4% -- (4%)
2001 40% 76% 10% 5% 24% 14% 14% 16% 12% 7% -- (18%)
2000 38% 84% 11% 7% 26% 30% 13% 15% 12% 6% -- (42%)
1999 32% 56% 11% 4% 28% 28% 6% 4% 16% 7% 7% 1%
1998 30% 50% 12% 2% 26% 26% 6% 4% 17% 13% 9% 5%
Source: Gillette 1999 and 2002 Annual Reports

Case Exhibit 2 - Financial Information by Business Segment (In Millions)

Blades Personal Duracell Oral Braun Stationery All Total

and Care Care Other
Razors
2002
Net sales $3,435 $816 $1,898 $1,248 $1,056 -- $8,453
Profit from
Operations 1,299 51 233 222 75 (71) 1,809
Identifiable
Assets 3,170 520 2,741 1,094 1,065 1,273 9,863
Capital
Expenditures 168 40 67 69 57 4 405
2001
Net sales $3,200 $801 $1,953 $1,149 $981 -- $8,084
Profit from 1,141 68 217 240 98 (266) 1,498
Operations
Identifiable 3.195 515 2,932 976 963 1,388 9,969
Assets
Capital 222 49 162 92 69 30 624
Expenditures
2000
Net sales $3,177 $875 $2,137 $1,076 $1,042 -- $8,310
Profit from 1,206 100 456 226 94 (636) 1,512
Operations
Identifiable 3,740 538 3,304 901 1,078 841 10,402
Assets
Capital 477 52 156 45 59 4 793
Expenditures
1999
Net sales $3,167 $1,062 $2,726 $616 $1,583 $743 -- $9,897
Profit from 1,206 85 606 77 154 18 (41) 2,105
Operations
Identifiable 3,532 696 3,310 663 1,602 1,214 769 11,786
Assets
Capital 459 85 145 40 130 43 30 932
Expenditures
1998
Net sales $3,028 $1,214 $2,576 $642 $1,740 $856 -- $10,056
Profit from 1,153 54 597 101 291 108 (515) 1,789
Operations
Identifiable 3,378 771 3,288 680 1,679 1,330 776 11,902
Assets
Capital 453 69 144 62 135 49 89 1,000
Expenditures
Source: Gillette 1999 and 2002 Annual Reports

The original Sensor was introduced in early 1990 and is now sold in over 80 markets worldwide. It
remains the best seller in the Unites States and most other major markets. Gillette followed the Sensor with
launch of the Senor Excel in 1993. Gillette leveraged both the Sensor and Sensor Excel brand names by
developing versions of these products targeted at women. The Sensor for Women system, launched in
1992, established a major hold on the market share for female razor products in the United States. The
follow up with the Sensor Excel for Women in 1996 was also very successful. The continued success of
the Sensor family of shaving systems led to the gradual decline of the Ata and Trac II twin blade shaving
systems. These systems, key Gillette brands since the 1970s, yielded their standing as market leaders.
Despite this decline, both systems continue to hold sizable share positions worldwide. The company’s
disposable twin blade razors’ moderate increases in sales have enabled it to maintain its position as the
number one seller in this product category worldwide. Gillette’s Good News! Brand has been the best
selling disposable razor in the United States each year since 1976.

Case Exhibit 3 – Product Line and Product Mixes at Gillette

Product Mix Width (Variety)

Blades and Personal Care Duracell Oral B Braun

Razors
Wet Shaving Shaving Gels General Use Manual Braun Kitchen
Men and Foams Batteries Toothbrushes Appliances
Mach3 Gillette Series Copper Top Advantage
Mach3Turbo Satin Care Ultra Indicator Braun Hair
care and
Epilation
Sensor Prismatics Cross Action
stages
Sensor Excel Antiperspirants Specialty Braun Steam
Atra and deodorants Irons
Trac II Gillette series Power
Sensor 3 Right Guard Photo Toothbrushes Personal
Custom Plus Soft and Dri Hearing Aid 3D Excel Diagnostic
Good News Dry Idea Camcorder 3D Pulsating
Women Watch CrossAction
Venus Electronics Kids
Sensor Home medical
Sensor Excel Floss and
Interdental
Sensor3 SATINFloss
Agility Ultra Floss
Daisy Essential Floss
Super Floss
Dry Shaving Orthodontic
Men
Braun Syncro
System

Women Toothpaste and

Mouth Rinse
Braun Silk-epil Oral B Stages
Source: Data compiled from the Gillette Web site: http://www.gillette.com
In 1998, Gillette introduced a new razor with three thin blades, the Mach3, that is designed to provide a
closer shave in fewer strokes with less irritation than any other razor on the market. To develop this new
product, Gillette made major investments in research and development and a strong commitment to gain
market share. The Mach3’s blades are mounted on tiny springs like the Sensor Excel. The Mach3 became
Gillette’s most successful new product ever as sales of the Mach3 hit $1 billion in only 18 months. Mach3
was named winner of the American Marketing Association’s Grand Edison award as the best new product
of 1998. Mach3 technology has been further enhanced in the Mach3Turbo for men and the Venus system
for women. Further efforts to build market share for women’s shaving products include targeting teen
shavers with a line of Sensor razors in a variety of colors in an attempt to develop lifelong customers at a
young age.

Gillette is currently embroiled in a lawsuit with Energizer Holdings and its Schick division over patent
infringement of its Mach3 technology. Prior to the launch of Schick’s Quattro razor, Gillette argued that
the Quattro illegally uses the same “progressive geometry” technology as the Mach3. In filling its suit,
Gillette asked for injunctive relief and monetary damages. Schick was allowed to launch the Quattro
pending the resolution of the lawsuit. Shortly afterward, Schick sued Gillette for misleading claims of
technological superiority in its advertising. Schick argued that Gillette’s advertisements for the Mach3 use
misleading statements such as “the world’s best shave” and the “the best a man can get.”

Many industry analysts see the dueling lawsuits as a sign that Gillette is threatened by Schick’s
reemergence as a player in the razor and blades market. Schick’s Intuition razor for women has been
selling very well and has begun to affect Gillette’s share of the women’s market. In the past two years,
Schick’s total share of the U.S. market has risen 2.9% to 17 per cent, while Gillette’s total share of the razor
and blades market has fallen 4.3% to about 63 percent. Increasing competition within the U S market is
one of the major reasons that Gillette has been moving aggressively to strengthen its global blade and razor
position. A major thrust in this effort involves converting consumers from single and two-blade razors to
the more profitable Sensor, Sensor Excel, and Mach3 lines. A second thrust involves continued geographic
expansion into countries such as Romania and the former Yugoslavia, as well as the acquisition of blade
firms in the former Soviet Union and the Czech Republic.

Personal Care

Toiletries are now considered part of the grooming products business segment. At one time, this segment
included hair care products, as well as the more familiar deodorants, antiperspirants, and shaving
preparations. Intense competition and slow growth for certain products prompted Gillette to pare its
toiletries portfolio. In 1998, Gillette sold its Jafra cosmetics line to narrow its focus. The focus was further
refined in 2000 when Gillette sold its hair care products to Diamond Products Company, a private-label
marketer. Sales and profits in this category peaked in 1997 and have been on a steady decline since that
time.

Gillette’s current strategy in the personal care market is to focus resources on core grooming products such
as deodorants/antiperspirants and shave preparations, while providing supporting products in key markets.
The premier brand in this product mix is the Gillette Series, which includes both shaving gels and foams, as
well as Gillette Series antiperspirants and deodorants. The personal care segment also includes many of
Gillett’s most well-known and respected brands, including Foamy shaving cream, and Right Guard, Soft
and Dri, and Dry Idea deodorants/antiperspirants.

Duracell

With the acquisition of Duracell International at the end of 1996, Gillette instantly achieved worldwide
leadership in the alkaline battery market. This segment is key to Gillette’s portfolio, with Duracell products
generating a sizable share of the company’s sales and profits. Gillette viewed the acquisition of Duracell as
a long-sought “new leg” in its product portfolio. Duracell is an excellent fit with Gillette’s focus on
technologically driven consumer products. Also, Duracell and Gillette share many characteristics,
including global brand franchises, common distribution channels, and geographic expansion potential.
With Gillette’s backing, Duracell enjoys significant economies of scale and greater market penetration
through Gillette’s worldwide distribution network.

Perhaps the most attractive aspect of Duracell for Gillette was and still is the market potential of alkaline
batteries. Duracell leads this market with approprimately a 40 percent share. Among the reasons for this
growth is the booming popularity of portable electronic products, aggressive merchandising by battery
manufacturers, and constant performance improvements, especially in battery life. In 1998, Duracell set a
new standard in quality with Duracell Ultra, a line of AA and AAA batteries specially designed for use in
digital cameras, cellular phones, and remote controlled toys. Ultra was the result of four years of
development in which Duracell improved the performance of the alkaline design by reducing electrical
resistance and reformulating the battery’s chemistry. Ultra boasts a 50 percent longer life than regular
alkaline batteries, as well as a 20 percent price premium over regular batteries. The Ultra line expanded in
1999 to include C.D. and 9-volt batteries. In late 2003 and early 2004, Duracell introduced Prismatics – a
line of high power, flat-shaped batteries designed for digital cameras and portable audio devices. Working
in consultation with electronics manufacturers, Duracell designed Prismatics to take up less space in
portable devices. As a result, manufacturers of portable electronics devices can better meet growing
consumer demand for smaller, lightweight electronics.
Gillette’s strategies for sustaining growth in the Duracell segment are similar to strategies developed for its
other segments. First, the company emphasizes research and development for new product introductions,
with Prismatics being the latest example. Second, Gillette activity pursues geographic expansion
opportunities in the battery market. In many foreign markets, consumers use carbon zinc batteries due to
their low cost. Gillette has been moving to convert these users to better-performing, longer-lasting
Duracell alkaline technology. In truth, alkaline batteries are a better value than carbon zinc batteries
because they deliver 5-6 times the life for only 2-3 times the price. This upgrade opportunity is strikingly
clear in emerging economies such as China, India, and Russia who collectively make up 30 percent of the
world’s consumer battery market.

Although the prospects for growth are tremendous, sales of Duracell products have declined slightly in
recent years due to increasing competition. Competitors such as Kodak’s Photolife and Energizer have
been investing in their own research and development processes. Energizer’s e2 batteries are clearly the
dominant competitor for Duracell’s Ultra. Long-time competitor Rayovac has experienced a resurgence in
recent years. Although Rayovac’s aggressive marketing appears to have taken more market share away
from Energizer than from Duracell, Rayovac’s growth and lower pricing points to a potential vulnerability
in Duracell’s strategy. Additional price competition for alkaline batteries is coming from private label
batteries, particularly Wal-Mart’s EvrActiv line.

Oral Care

In a strong and well-established partnership with dental professionals, Oral-B develops and markets a broad
range of superior oral care products worldwide. Led by toothbrushes, the Oral-B line also includes
interdental products, specialty toothpastes, mouth rinses, and professional dental products. Sales and
profits continue to increase in this segment as a result of technological developments and product
innovations. For example, the Oral-B CrossAction toothbrush features innovative technology clinically
proven to provide a greater level of manual plaque removal.

Oral-B’s strategy for growth relies on a combination of new product development and geographic
expansion. The oral care category has experienced growth due to new product development of both manual
and power assisted toothbrushes. Oral-B holds about 20 percent of the worldwide market for manual
toothbrushes and a nearly 70 percent market share for power-assisted toothbrushes. Geographic expansion
continues with the establishment of sales organizations in emerging economies, and the opening of a
toothbrush manufacturing plant in Vietnam. These strategies are supported by strong advertising and
promotion campaigns in an effort to sustain Oral-B’s worldwide growth.

Braun
The Braun segment turned in a record performance in 1997, but has since struggled to contribute profits to
Gillette. As a result, Braun is no longer, considered one of the company’s primary business segments.
However, Gillette still values Braun’s shaving products, oral care products, and hair removal (epilation)
devices. These products fit with Gillette’s emphasis on product innovation and with the company’s other
business segments. Other Braun products – namely kitchen appliances, personal care products, and health
care instruments – do not fit as well with Gillette’s focus. As a result, the company has contemplated
selling most of the Braun line but keeping the key products in shaving, oral care, and hair removal.

Divesting the Stationery Unit

Intense competition had a major impact on Gillette’s writing products and correction products businesses.
This segment has included Parker, Paper Mate, and Waterman pens, as well as Liquid Paper correction
products. Despite owning some of the most valuable brands in the industry, this segment experienced a
dramatic decline in sales and profits. Heavy price competition squeezed profitability for disposable writing
instruments. Further, the distribution channels for the Waterman and Parker brands (stationery and gift
stores) were significantly different than Gillette’s familiar distribution channel of mass merchandisers,
supermarkets, and drug stores. When Gillette management redefined the company’s primary businesses,
the Stationery Products business no longer fit the company’s focus. As a result, the Stationery products
business was sold to Newell Rubbermaid in December 2000, leading to a $429 million loss for Gillette.
Case Questions
1. What are the current conditions in each of Gillette’s business segments? Is each segment moving
in the right direction? Do you see new products that should be added or old products that should
be eliminated? Explain your answers. (30)
2. Identify the external situational variables (competition, economic, political/legal, technological,
socio-cultural) that have affected Gillette over its lifetime. Which variables have had the greatest
positive and negative effects? At the present time, what do you perceive to be the chief
environmental variables with which Gillette must cope?
(35)
3. What actions would you recommend over the next 5 years? What specific marketing mix
decisions would you recommend for each business segment? What is the time frame for your
actions? (35)

DMM08
Product Management

Assignment II
Assignment Code: 2009DMM08B2 Last Date of Submission: 15th November 2009
Maximum Marks: 100

Attempt all the questions given at the end of the Cases. All questions carry equal marks.

Case Study 1

Biscuit Mania – The Britannia Story

How is it that the humble biscuit, a little remnant of colonialism, today, seems as Indian as pakoras and
chutney? The answer goes all the way back to Kolkata, circa 1918 when Britannia Biscuit Co. Ltd. began
their operations. Today, Britannia is the market leader in the organized biscuit and bakery product market
in India.

Britannia’s single most significant achievement has been penetrating the mindset of the Indian consumer
and making household names out of its products. From the ever-popular chocolate Bourbons to the
ubiquitous “tiger” glucose biscuits, Britannia covers a gamut of confectionery items. Its product Marie,
with `very English’ charm, is still popular all over the country. Consolidating its strengths in the biscuit
market and establishing high brand equity, Britannia has now forayed into the dairy business and offers
flavoured milk, butter, ghee and cheese.

The entry of MNC heavyweights like Kelloggs, Sara Lee and Heinz has made absolutely no difference to
Britannia’s unchallenged supremacy over the Indian confectionery market. Britannia continues to produce
quality products at reasonable costs, targeting the common man and winning the hearts of millions of
customers.

One definite factor is the uncanny ability to identify the Indian palate and come up with products suiting
distinctive tastes, innovative marketing offers are a way of life for them. They pioneered the concept of
`health’ food before any of the MNCs arrived on Indian shores. Their `eat healthy, think better campaign’
became a buzzword in the industry, leading many competitors to follow suit. Using India’s biggest icon of
the 90s, Sachin Tendulkar, as a brand ambassador for their biscuits, was a masterstroke in Britannia’s
product promotion.

Britannia certainly believes in leaving no market segment unnoticed with products ranging from `Milk
Bikis’ for the young ones to the new `Marie Gold’ digestive biscuits for the aged, from `Little Hearts’ for
the teenagers to `50-50’ and `Timepass’ for young adults. In between come `Good Day’ and chocolate
cookies. Britannia has also infused the snack food market with its range of cakes, bakes and assorted
tidbits.
Britannia’s product promotions were phenomenal successes. Examples are `Britannia Khao, World Cup
Jao’, the `Britannia Lagaan Cricket Match’, etc.

The total market for this category of products in India is estimated to be around Rs 4500 crores. Volume-
wise, it is 1.1 million tones per annum. Britannia holds around 42% of the market share according to AC
Nielsen report. The market for these products is said to be growing at an annual rate of 16.5 percent.

Britannia takes it as a challenge to quell the ever-increasing expectation of the customer by a process of
constant innovation and radical product development. If they continue to stick to their current rate of
growth, the future shall be full of `Good Days’ for the `tiger’ of the Indian confectionery industry.

Case Questions

1. Comment on the product positioning strategy of Britannia?

(25)

2. “Britannia’s ever increasing process of constant innovation and radical product development”. Do
you think that developing a huge product line in this range of product category is essential for
Britannia to fight competition? As a brand manager, what will be your strategy, to curtail the
product line, so that it does not become unmanageable or let it expand? Give your suggestions.
(25)

Case Study II

Change of Brand and Logo Identity

Of late, many market leaders in India have been adopting strategies to re-energize and re-engineer their
brands, with a logo and image makeover. World over, companies changing their logo in keeping with
changing times, business diversification and expansion plans is nothing new. Globally, Motorola has
changed its logo nearly eight times and Pepsi has changed its logo and tagline, more than nine times. But
logo changing is an expensive exercise. The change would have to reflect on the company’s products,
buildings, hoardings and stationery, not to mention the media and public relations blitz to inform the world
of the company’s changed identity. In fact, the bigger the brand, the more the expenses and efforts they
have to incur to effectively implement their plans for redefining their identity.
During the period 2004-07, there was increased activity in this area for global as well as Indian companies,
and the trend continues well into 2008. while globally, Intel, Kodak and AT&T changed their logo identity,
in India, it was the turn of Bajaj Auto, Hutch, Bank of Baroda, Indian Airlines, Dabur, Tata AIG Life, LML
India, Canara Bank, among others to completely change the way they looked, felt and smelled.

It may be Pepsi, trying to match the waves inside its circular logo to Coca-Cola’s or FedEx changing the
colour of its award winning logo from orange to grey, or Kodak wanting to break out of its traditional box-
like logo, almost all companies that change their logo, tagline or branding strategy have the same reasons:
competition, innovation and venturing into new market areas to grab a larger share of the market.

A decade back, it would have seemed illogical for technology-based companies to rework their marketing
or branding strategy, considering their minimal interaction with consumers per se. after all, chipmaker Intel
can interact with consumers, only through PC manufacturers. However, competition is forcing companies
to change the way they address their customers. As a part of a major revamping strategy Intel has scrapped
its 37 year old `Intel-Inside’ and made a mark with its new tagline `Leap Ahead’. According to an Intel
official, the new logo serves as a powerful tool that strikes the right balance between building on their
heritage and signaling the evolution to platforms.

In 2006, Kodak presented to the world its new corporate symbol. The company discarded the boxes that
had contained the world Kodak for more than 70 years. The move gave the company a face-lift, enabling
them to move out of their stereotypical image of makers of cameras and films, to more exciting digital
avenues.

Next was the turn of AT&T, who changed its logo by modifying its blue and white globe and adopting
lower case text. Their reason for changing a familiar logo was bring in a younger and contemporary look,
while retaining the old colour combination.

A notable changeover in India was the revamping of identity by the state-owned Indian Airlines to `Indian’,
to adapt to tough competition and increasing globalization. (Air India and Indian Airlines have been
merged). It was not easy for the government –owned Indian Airlines to change its identity overnight. The
makeover exercise brought with it major tasks of altering documents, plane exteriors and interiors, and
aggressive positioning through big-budget advertising campaigns.

Indian Airlines has changed everything from its name to the logo – and plans a lot more. The company
name, however, remains unchanged as Indian Airlines Limited. The last change was way back in 1967.
That was when it changed its name from Indian Airlines Corporation to Indian Airlines and the green,
winged logo was replaced by a slanting IA painted in white on an orange background.
Competition in the Indian airspace was increasing exponentially and IAL’s market share was crashing. It
dropped to about 30 percent in 2004, from close to 100 percent in 1990. Jet Airways has captured 50
percent market share and the low-cost airlines together account for 15-16 percent of the market. Apart
from cost, their advantage is a youthful, vibrant image. It is this situation that prompted Indian Airlines to
change its identity.

Bajaj Auto, which was undisputedly the king of Indian scooter market, until the ubiquitous motor cycle
strolled in, started communicating its `Inspiring Confidence’ tagline to the consumers with a brand new
logotype in capital letters. They invested a couple of crores, just to design the new logo.

Airtel has already switched to a deeper shade of red with contrasting white for their logo, to reinforce its
leadership position in the telecom market.

LML India too jumped on the bandwagon. A decade ago it was giving to tough fight to Bajaj Scooters with
its new features and design and consumers were busy switching loyalities from Bajaj to LML Vespa. But
later Vespa lost its image in the consumers’ hearts. To regain its position, LML decided to enter the market
with a new look. For the company, visual identity was an important tool to signal the change.

Bank of Baroda has also changed its identity of late. It claims itself as `India’s International Bank’ and has
been heavily promoting its repositioning among the masses. To add more value to their mission, they even
appointed Rahul Dravid as their brand ambassador.

FMCG major Hindustan Levers Ltd. (HLL) is another market leader in India who has changed identity.
They have now become Hindustan Unilever Ltd. (HUL) and the traditional logo of a `green tea leaf’ has
been changed to `U’, supposed to symbolize the customers (you). The new logo is also symbolic of the
company’s mission of `Adding Vitality to Life’. The HUL website explains the concept as an effort to meet
everyday needs of nutrition; hygiene and personal care with brands that help people look good and get
more out of life. All the 25 different icons representing the organization, its brands and the ideas of vitality
are represented in the logo.

Basically, the new logo has borrowed the `U’ symbol from the Unilever basket and gelled it with the
`Hindustan Unilever Ltd’ identity. HUL believes that the new name provides a balance between
maintaining the heritage of the company and the synergies of global alignment with the corporate name of
Unilever. The new name retains Hindustan as the first word to reflect the company’s continued
commitment to the local economy, consumers, partners and employees.
Canara Bank is the latest entry into this field. Recently, they totally changed their logo and identity all over
India. Heavy publicity using all available media was used by the bank to publicize the changeover.

The new brand identity for Canara Bank is based of the idea of a bond and is a representation of the close
ties between the Bank and its many stakeholders – from customers and employees to investors, institutions
and society at large, with its rich heritage of banking expertise, dedicated customer service and corporate
social responsibility, Canara Bank is a powerful enabler who helps its stakeholders achieve their goals. The
two seamlessly connected links capture the essence of this partnership. Canara Bank has more than 45,800
employees and serves over 31 million customers through a network of over 2600 branches spread across
the country. The simple, memorable symbol can be easily recalled and decoded by all of the Bank’ diverse
audiences.

Change is constant, but for marketers and corporates, turning over a new leaf can be a nightmare. If the
changeover does not combine itself with creating adequate customer awareness and media and marketing
blitzkrieg, it may leave the brand empty-handed and grasping for life.

Case Questions

1. “Companies spend millions of Rupees on change of brand and logo identity and then to market it”.
Is it a necessary exercise or it can be avoided? What compels the organizations to go for such
change?
(25)

2. What strategies as brand manager you will adopt to re-launch and re-organize a brand, because a
change can kill a brand instantly and repositioning takes a longer time? You can also answer by
taking any example.
(25)