Wrong Targeting Renders Strategy Ineffective

In the wake of the economic liberalization a host of multinationals entered the Indian
market. In a number of cases their offers failed to click mainly because of wrong
segmentation and targeting. Many of these MNC’S considered the Indian middle class as a
single market segment and assumed that it would perfectly serve as a target market for
their products they were introducing in India while a part of the Indian middle class did
constitute a market for the products, the MNC’S failed to appreciate that there were many
distinct market segments with what was described as the Indian middle class and that many
of these segments had nothing to do with the products they were offering.

According to a survey by NCAER, the 350 million strong middle class is by no means a
single market segment. First, there are wide variations among them in purchasing power.
Second, they also differ vastly in benefits they expect from the products. Third, most of
them are not much bothered about the brand name. The MNC’S seem to have failed to
catch such facts, while choosing the target market. Ineffective segmentation and target led
to wrong product offers, inappropriate marketing appeals, wrong pricing, and
overemphasis on the brand name.

• In the case of Levi’s, product offer and pricing were inappropriate. This was so because
segmentation and targeting had gone wrong. Levi’s had priced its jeans upwards of Rs 995
exceeding to Rs 2295.It had defined its target market as the college in the age group of 15
to 25 years. Levi’s had assumed that a sizeable segment of consumers of this description
,could afford the price tag ,and would be willing to buy jeans at their prices because they
were available in India. Levi’s failed to understand what constituted its target market and
hence in assessing its size. The segments of teenagers in India, whose parents would
willingly spend so much money on a pair of jeans for their children for the sake of a
foreign label, were tiny. Levi’s could have gone in for a larger market segment and tried
out a product and price that was appropriate for the segment .But after a while, Levi’s
shifted to the next lower end, and introduced its new range, at a comparatively more
affordable price of Rs 900 per pair and sales picked up.

• P&G had rolled out Gillette Guard in India, billed as the first razor the brand has ever
designed from start to finish for consumers in India--specifically the one billion-plus men.
According to P&G, most men in India shave with double-edge razors, and they have not
been able to afford more advanced technology. The Gillette Guard is a razor system
designed for their unique needs and preferences. For example, men in India desire a razor
that can help manage longer hair because they don't shave every day, and since they often
lack running water, place high importance on easy-rinsing technology.

To that end, Gillette Guard features a single-blade system lined with a safety
comb designed prevent nicks and cuts. Gillette said it also changed the way it
manufactures the razor, using more than 80% fewer parts and a simplified process to
ensure affordability. The razor, which hit the market, had a suggested retail price of 15
rupees (approximately $0.33) with refill cartridges for approximately five rupees.

• LG Electronics put their market experience to good use. Indian fridges provide less
freezer space and additional chilled compartments, taking in to account a mainly
vegetarian diet. Washing machines use less water, can cope with fluctuating power supply
and are voice activated so that illiterate maids aren't required to read cycle instructions.

• Marks & Spencer bows down to desi demands : After several years of near-empty
stores and pricing products beyond the reach of the average middle-class buyer, the 126-
year-old M&S has now reworked its local strategy to garner more business.
The launch of M&S was a page turner for India's retail industry. The exclusivity and the
brand name made the elite a happy lot. But in a price-conscious nation like ours, did the
clothing chain imagine that India would lap up its high-end products? The brand was not
being perceived as a mid-market retailer as it is in the UK.

• Maruti Suzuki Versa:The car was launched in 2001. Amitabh Bachan and Abhishek
Bachan were the brand ambassadors. It was the first luxury multi purpose vehicle from
Maruti and was considered as a logical upgradation from Maruti Omni. Maruti thought that
there was a market for a luxury van that can carry more passengers than any ordinary car.
It failed because the car was priced in a range of 5 to 6 lakhs. Consumers were shocked to
see such a high price just for a van. The Versa was supposed to be targeted towards large
families and initially it was only larger families who invested in the Versa. However the
car was priced at the same range as other Sedans and consumers with small families
weren't attracted to its mini-bus shape and found it more beneficial to invest in a Sedans
such as the Maruti Suzuki Esteem, for the same price. Hence, there were some drastic price
cuts in 2004 for the Versa. However, Maruti Suzuki launched a replacement for the Versa
in 2010, called the Maruti Suzuki Eco It was launched as a multi-purpose vehicle at a
starting price of 3.5 lakhs and hence was not over priced like the older version.

• Gold Spot : The Zing Thing

Gold Spot is a sad story in the Indian Branding world. This iconic brand was killed for
paving way for Fanta, another of Coke's brands in India. Gold spot was one among the
three major soft drink brands that ruled the Indian market along with Thums Up and
Limca.
Gold Spot was the orange drink with a Zingy taste. This iconic youth brand was positioned
as "Zing Thing" and was promoted heavily through all media. The jingle "Gold Spot, The
Zing Thing" was one of the most memorable jingles at that time (still that jingle lingers in
the mind of old timers).
Gold Spot was positioned as the youth brand and the ads talked about being crazy about
the brand. But the brand was killed. Fanta was launched but till now the brand has not
being able to take the position of Gold Spot. Coke was not able to clearly focus on the
segmentation of Fanta. Fanta is never perceived as a youth brand. Fanta is not viewed or
targeted at college students/youth. This confused targeting may have crippled the growth
of Fanta and still it couldn't reach the status of Gold Spot. Coke expected that the users of
Gold Spot will migrate to Fanta but that did not happen.

• In April 1995, Kellogg India Ltd. (Kellogg) received unsettling reports of a gradual drop
in sales from its distributors in Mumbai. There was a 25% decline in countrywide sales.

The Mistakes: Kellogg realized that it was going to be tough to get the Indian consumers to
accept its products. Kellogg banked heavily on the quality of its crispy flakes. But pouring
hot milk on the flakes made them soggy. Indians always boiled their milk unlike in the
West and consumed it warm or lukewarm. They also liked to add sugar to their milk or
lukewarm.

Setting Things Right: Disappointed with the poor performance, Kellogg decided to launch
two of its highly successful brands - Chocos (September 1996) and Frosties (April 1997) in
India. The company hoped to repeat the global success of these brands in the Indian
market.
Chocos were wheat scoops coated with chocolate, while Frosties had sugar frosting on
individual flakes. The success of these variants took even Kellogg by surprise and sales
picked up significantly. (It was even reported that Indian consumers were consuming the
products as snacks.)

This was followed by the launch of Chocos Breakfast Cereal Biscuits. The success of
Chocos and Frosties also led to Kellogg's decision to focus on totally indianizing its
flavors in the future. This resulted in the launch of the Mazza series in August 1998 -
a crunchy, almond-shaped corn breakfast cereal in three local flavors -'Mango
Elaichi,''Coconut Kesar'and 'Rose.'

The Results: In 1995, Kellogg had a 53% share of the Rs 150 million breakfast cereal
market, which had been growing at 4-5% per annum till then.
By 2000, the market size was Rs 600 million, and Kellogg's share had increased to 65%.
The company's improved prospects were clearly attributed to the shift in positioning,
increased consumer promotions and an enhanced media budget.

• Relaunch of Frooti-The 'Digen Verma' Campaign

The case 'Relaunch of Frooti-The 'Digen Verma' campaign' analyses the re-launch strategy
adopted by Parle Agro for 'Frooti' and the promotional campaign run by it. The case
discusses Parle's teaser campaign which was unusual in that it revolved around a faceless
person named 'Digen Verma'. ' Frooti' was the first tetra pack fruit juice to be launched in
India.

However, owing to stagnating sales, Parle Agro planned to re-launch 'Frooti' by

positioning it as fun drink for the youth. As a part of the strategy, it launched a teaser
campaign. This teaser campaign revolved round a faceless brand ambassador who was
positioned as someone whom the youth could relate to. The teaser campaign evoked
enormous public interest. As a part of the re-launch strategy, the packaging of the product
was also changed and the baseline changed to 'Just like that.'

• Coke was comparatively successful in the Indian market and later it introduced Diet
Coke which was low on sugar targeting health conscious people. Such people did not opt
for Coke but for diet coke, it was first ever diet soft drink which made Coco Cola even
more successful.
• Knorr soups didnt do well in the Indian market because it had limited flavours. After the
introduction of a variety of soups ranging from Indian to Chinese its popularity increased.
It also advertised it as a healthy snack at 7 which will not make people skip their dinner as
it is light yet yummy and healthy.
Knorr also came out with Knorr Chinese. It was marketed as " Restaurant jaise khana ghar
par" it came out with Manchurian and such other varieties which eventually became a hit
with the people.
• Mac Donalds: GloballyMcDonald’s was known for its hamburgers, beef and pork
burgers. Most Indians are barred by religion not to consume beef or pork. To survive, the
company had to be responsive to the Indian sensitivities. So McDonald’s came up with
chicken, lamb and fish burgers to suite the Indian palate.
The vegetarian customer – India has a huge population of vegetarians. To cater to this
customer segment, the company came up with a completely new line of vegetarian items
like McVeggie burger and McAlooTikki. The separation of vegetarian and non-vegetarian
sections is maintained throughout various stages.
To attract children McDonalds has a Happy Meal with which toys ranging from hot wheels
to various Walt Disney characters are given.

When McDonald’s entered in India it was mainly perceived as targeting the urban upper
class people. Today it positions itself as an affordable place to eat without compromising
on the quality of food, service and hygiene. The outlet ambience and mild background
music highlight the comfort that McDonald’s promises in slogans like “You deserve a
Break Today” & “Feed your inner child”.
To highlight its low prices, it had a tag line, ‘Aap ke zamane mein baap ke zamane ke
daam’.

Group members:

Kshiti Gala
Roja Chakola
Joe Cyriac
Niharika Gupta
Elton George
Emelia DSilva
Nida Firoz
Nakita Rodrigues
Johann Hanaman
Ananya Bhagat