Brand Update : Sunfeast Brand Architecture

Launched in 2003, Sunfeast has come a long way. The brand has become an umbrella brand endorsing a wide range of biscuit and other products from the ITC stable. It is interesting to see the brand architecture of Sunfeast.

Brand Architecture refers to the strategy in which the company decides on how to use the brand elements and how these elements are shared across products. So Sunfeast's brand architecture refers to the strategy on the usage of Sunfeast brand elements across various products.

ITC has used Sunfeast as an Umbrella ( Family ) brand name for biscuit and snack products from its stable. Sunfeast endorses the following products - biscuits, noodles and pasta. 

Within each category, the brand architecture of Sunfeast is interesting.

According to the brand's website, ITC has divided the biscuits into four sub-categories - Cookies, Cream based biscuits and  Light and Fun biscuits and Healthy biscuits.

In the brand architecture , the company has used sub-brands for various types of products .

In the cookie sub-category, Sunfeast has following sub-brands - Delishus, Special Cookies and Mom's Magic . 

In the healthy biscuits sub-category, Sunfeast has Farmlite, Marie Lite, Glucose and Milky Magic sub-brands.

In the cream biscuit sub-category, Sunfeast has Dark Fantasy,  Bounce , Bourbon Bliss and Dream Cream  sub-brands.

In the light and fun biscuit sub-category, Sunfeast has Sweet'N'Salt, Nice and Snacky sub-brands.

Within the Dark Fantasy brand, there are three modifier brands - Choco Meltz and Choco Fills and Luxuria.

Besides the biscuit category, Sunfeast is also extended to Noodles and Pasta . For noodles category, Sunfeast uses Yippee  sub-brand and for pasta, it has Pasta Treat sub-brand. 

Recently Sunfeast launched a competitor for Choco Pie in the form of  Yumfills which is not a biscuit but a cream filled cake. 

It is interesting that ITC is investing in not only Sunfeast but its sub-brands because it has lot of cash to spend. These sub-brands are differentiated through packaging and other brand elements like color. 

In this brand architecture, the parent brand  Sunfeast is present as a logo in most of the products. In all the packaging and brand related communication, the primary driver is the sub-brand. ITC expects that over a period of time, these sub-brands will acquire equity and Sunfeast would just be a token endorser. 

Brand Update : Dear Engage, Parent in me requests - can you move on please !

Engage, the deo from ITC has made a quick impact in the Indian market. Within a year, the brand has claimed second spot in the India deo market with a volume market share of 8.1% ( source : ET). The brand playing on the " attraction " theme has taken it to the next level.

This season, the brand has come out with the new campaign for the "zero gas" cologne spray version.

Watch it here : Engage Deo

The brand's ads have always forced parents like me who have little kids to scramble for the remote to change channels. The new ad takes the " attraction" to the next level.
 While the rise of the Engage deo can also be attributed to the effectiveness of these ads, my personal opinion is that brands should also be little sensitive to the audience especially the family audience. Ofcourse the counter arguments would be that movies are much worse or explicit, that doesn't justify a suggestive ad.

I am getting old , I suppose. 

Kwiknic : Freedom from Tobacco

Brand : Kwiknic
Company : ITC

Brand Analysis Count : # 538

Kwiknic is an interesting brand. A nicotine replacement therapy brand from India's leading cigarette maker . Its a paradox of sorts - India's largest cigarette maker promoting a product that helps you break free from tobacco. So at one end, ITC is encouraging people to smoke and then helping them to quit smoking - marketing has come to a full circle.

Sarcasm apart, the business angle is that the nicotine gum market although small is growing at 45% per annum. The market was estimated at around Rs 20 crore in 2013 ( source ET, Business Standard). So it makes perfect sense to launch a product in a market where there is a huge market for cigarettes.Also the increasing demarketing done by NGOs and Governments also ensure that this product category is bound to grow.

Before the launch of Kwiknic, there were other players also . The main players in the nicotine gum category are : Nicorette by Johnson & Johnson

Nicotex and Nicogum by Cipla.

ITC is trying to leverage the distribution strength to push the product to the consumers. 

What is interesting about the brand is the promotion strategy . The product is used as a tool to reduce dependency of tobacco. So one expects the brand to talk about the harm that tobacco causes with graphic details of cancer and other ailments. But surprisingly Kwiknic chose to use humor to communicate the brand's message. 

The brand also has taken a very different approach to addressing the addiction issues. Rather than scaring the people with gory details of diseases, the brand chose a lighter humorous situations to drive home the point.

Watch the ads here : Kwiknic Hospital ; Kwiknic marriage

One of the advantages of using such an approach is that it takes the seriousness or taboo out of the brand. Consumers may not feel inhibited to buy this product because it is not projected as an addiction therapy. One downside is that it is risky to take the seriousness out of the product so the effectiveness of the product may be doubted.

The ads are hilarious, repeatedly watchable and hence would help the brand in building awareness. Its also interesting to note that Kwiknic talks about freedom from chewing tobacco and not smoking.

Related brand : Nicorette

Sunfeast Dark Fantasy : Escape into One

Brand : Dark Fantasy
Company : ITC

Brand Analysis : 529

Sunfeast Dark Fantasy is the story of a brand which started its journey as a sub-brand and later acquired the status of a standalone brand. ITC forayed into the  biscuit market in 2003 and Sunfeast Dark Fantasy was launched in 2005. It was only after four years, that ITC thought of taking the brand to the next level.

Dark Fantasy's success can be attributed to the careful detail with which the brand was built by ITC. ITC took a risk in positioning Dark Fantasy as a premium biscuit brand. The premium space was vacant in the Indian market and marketers was unsure how consumers would react to a premium biscuit offering. 

To do this, Sunfeast tried to build the brand among emotional platform taking on the proposition of   ' Indulgence'. So here is a biscuit which would appeal to your sensuous self and take you through an experience of indulgence. It was a risky proposition and ITC backed the theme through some heavy campaigns. 

The brand had the tagline " Pure Indulgence " when it was launched. The USP was the packaging. Dark Fantasy in a way assured in a new wave of packaging in the biscuit market. The bold use of colors and calligraphy supplemented the brand's positioning as a premium biscuit. Later the tagline was changed to " Escape into One ". Dark Fantasy had twin packaging - there is an outer cardboard box and individual choco fills had wrapper packaging. That gave the brand a premium feel.

Watch the ad here : Dark Fantasy 

Rather than restricting itself as a premium biscuit, Sunfeast Dark Fantasy tried to create a space for itself by launching a new variety called Choco fills. Choco Fills are essentially biscuits with   chocolate filled inside. Although these types of biscuits were available, through smart packaging, Dark Fantasy brought lot of interest into this category. Now choco-fills are very popular that competitors like Parle had to launch a new brand in this category.

Buoyed with the customer response to Choco Fills, Sunfeast has extended this packaging strategy to its Cookie category by launching Delishus brand of cookies.
Dark Fantasy can be termed as a packaging success story. The brand has showcased the power of packaging and its influence in the positioning and brand image. Its not the first time that ITC has leveraged the power of packaging , it had tasted success in the FMCG category with Fiama and Vivel which differentiated  through smart packaging..The success of Dark Fantasy has created a freshness wave in the biscuit category with lot of colors and forms emerging from the leading brands. For consumers, shopping for biscuits is becoming  a delightful experience.  

Pepsi's Biscuit Challenge: 50-50?

Parle, Britannia, ITC and now Pepsi. Pepsi foods is seriously contemplating its entry into the 6000 crore plus organized biscuit market. Taste tests are on in various urban markets across India.

They are still yet to come up with an official brand name for their new portfolio. It would be interesting to note if they would follow either a Parle/Britannia strategy or an ITC strategy. ITC typically follows a branding strategy under the umbrella name "Sunfeast". With multiple sub-brands created under this banner. This has been logical for ITC due to its late arrival into this category. A common brand name across its portfolio would ensure better recall among the consumers.

Parle/Britannia have multiple brands that are well established, e.g GoodDay, Tiger, Milk bikis, Monaco, 50-50, Krackjack, Hide&Seek etc. Glucose biscuits have always been a price game with little money being made by each of the 3 existing players. A price increase of even a rupee will involve significant risk with respect to the response that would ensue from the consumers. Hence these 3 companies have been constantly tinkering with their weight/grammage during the period when input costs have risen.

Pepsi would mostly enter first into the salted biscuits category as per their information given to the Financial Chronicle. There are strong household names like 50-50, Krackjack and Monaco in this sub-category. Even ITC is trying to eat into this pie with their Snacky label. Innovation with salted biscuits have included products like Salt & Sweet, Salt & Chilli Cracker, Maska Chaska etc.

Pepsi food's products, locally distributed by Frito Lays include namkeems and finger snacks. Their foray into the biscuits market would be their first across the world, in the various markets that they operate in.

Pespi is already against ParleAgro (separate entity) in the beverages market and head-on-head with ITC in their snacks category (Lays Vs. Bingo) The biscuit market is estimated to register a 10% growth every year.

Pepsi has a well established distribution system in India, made robust by being in the complex bottling business, but whether it would invest huge amounts into establishing their biscuit brand remains to be seen. The other 3 companies are all currently heavily focused on increasing their market size in India. Hence taking them on would not be a easy feat.

We will have to wait and see what kind of response it would get from Organized Retailers, who all have their private labels like Tasty Treats, Feasters etc. But like ITC leveraging on its other brands, Pepsi could very well give its biscuit business a push by leveraging on its very well established beverage portfolio.

Ab har kisaan ho kamyaab

Recent economic woes—sparked off by rising oil and commodity prices earlier in the year, then sustained by the ongoing Wall Street crisis—would suggest that retailers should be a worried lot today. But accounts from across the world offer a mixed bag of good and bad news. In the US, with the holiday season standing around the corner, the National Retail Federation has said that sales growth will be down to the worst in six years. Other forecasts are even gloomier, with TNS Retail Forward predicting the worst holiday showing in 17 years. On the other hand, China, where economic growth has slowed for the fourth straight quarter, is yet seeing retail sales growing at close to the fastest pace in at least nine years.

As for India, although some headlines have been focusing on organised retail taking a hit, most analysts remain upbeat about future prospects. A Northbridge Capital report released late last month finds that this segment is growing at 40% a year. Organised retail is currently valued at $300 million, with only 7.5% of the total retail pie, but this share is projected to grow to 20% by 2010. There are other reports offering other figures, but what they all have in common is 1) a certain bullish tone on growth projections and 2) a certitude that a big chunk of this growth is going to take place in the country’s hinterlands, which extend from tier II and tier III towns to rural India.

By some accounts, the rural market puts away almost 50% of the goods consumed in the country and about 35% of the offtake for FMCG products. And the affluent sector in rural India is growing faster than the urban one, with per-households spending in rural India forecast to reach current urban levels by 2017. The news is good even on the employment front, with an Icrier study showing that the 3.93 million jobs added in rural retail during 2000-05 put the urban growth of 0.51 million to shame.

Recently, the Rural Marketing Agencies Association of India and Francis Kanoi Marketing Research conducted a study of the retail habits of rural India. According to Francis Xavier, managing director of Francis Kanoi, “the main finding from the study is that the number of retail outlets in rural areas is booming, with nearly 45% of them set up in the last five years, and the rural folks seem to be favouring the retail outlets in their villages to meet most of their daily needs.”

All’s under one roof

ITC, which has already scripted a great success story with its groundbreaking eChoupal initiative, whereby local internet kiosks link farming communities with global markets by providing information on everything from comparative crop prices to weather forecasts, is now creating a physical version of the same concept with Choupal Saagars. These are being set up at the hub of every 40 eChoupals, to facilitate all the material transaction needs of farmers, ranging from the sale of produce to the purchase of household goods. From one in 2004, the Choupal Saagars have now grown to 23, with ITC shooting to scale these up to 100 in the near term. Guiding mantra: Jaruratein Anek, Jagah Ek.

The one-stop shop idea is integral to DSCL’s Hariyali Kisaan Bazaar (HKB) initiative as well, which has also been on an expansion spree, with the five projects set up in 2002 having grown to 203. Their motto: Ab har kisaan ho kamyaab. As for the future, HKB president and business head Rajesh Gupta says that the company has an all India plan, but location decisions for each new unit are based on intensive microanalysis of whether the demographics and spending ability of a given catchment area suits the HKB business model: “This includes factors like literacy, receptiveness to new ideas at the agricultural level and even TV penetration.” This data dynamic is also critical to determining the product mix being carried at different stores. HKB’s merchandise list is made up of 60-70% core commodities, with the variables being determined by local brand and price preferences.

In the last three years, according to Xavier, the strongest growth in the number of retail outlets has been in the North zone at 38% as against an all-India growth of some 30%: “Notwithstanding the popular stereotypes, the prosperity levels now seem to be growing the most in the North.”

The entry of such enterprises has transformed product choices. With the rapidly expanding outlets offering both branded and non-branded versions of consumer goods, electricals, durables, kitchen appliances, construction materials and, of course, agri-inputs, Xavier says: “Even the infrequently bought products are entering villages rapidly.”

S Sivakumar, who heads the international business and agricultural division of ITC, points out: “The buying and usage habits of consumers in villages and small towns are changing rapidly with increasing incomes and greater exposure to media. They have started experimenting with newer products and also at higher price points. The demand for the products that were not available earlier through normal retail channels is also growing.” Here, he gives the example of how ready-made garments now comprise 95% of his apparel sales, in sharp contrast to how 80% of these are in fabric form as far as traditional rural retail channels are concerned. Another fast growing category Sivakumar points to is that of products that provide innovative solutions to day to day needs, “where organised retail has taken the role of a market maker”. A good example: the BP Oorja stove that uses biomass pellets as fuel.

Too much , too soon?

Still, at a time when retailers’ shares are going South along with the rest and when various players are paring down their headcounts and expansion plans, shouldn’t rural retail be a worried sector as well? Was the bugle sounded too early on this frontier? Gupta says that there is no question that a shakeup is on the way, and we will see some players fall by the wayside in the next few months. This, he predicts, will be as much on account of faulty business models as of failures in the due diligence processes propping up these models. HKB, however, seems to be on a strong wicket so far because of its traditional agri-strengths, which complement a robust and efficient supply chain in a sector where the cost of servicing the markets is very high.

Vishal Retail chairman Ram Chandra Aggarwal, who opened his first hypermarket in 2003 and now oversees 135 of the same spread across tier II and III towns, explains that his company’s strength lies in its foresight: “We want to be among the top five companies in Indian retailing, and any company operating in the retail space today has to recognise that a major chunk of consumers is in the hinterlands. This is where the masses are located and all the players are eyeing them. In these virgin markets, our first mover’s advantage will reap exponential returns.”

For a sector that predominantly relies on farmers and agriculture as a source of business, the future is also dependent on the government. As of now, Sivakumar says that the laws restricting agricultural produce marketing, procurement of essential commodities and futures trading constrain companies in significant ways. If theAPMC, Futures Trading, and Essential Commodities Acts were to be reformed, this would help the players procure in large quantities, hedge against risks and so on.

Sivakumar also identifies two factors as critical for any player’s future in the rural sector: First, every market has to discover its own ideal model and this discovery process involves experimentation. What is also natural in this process is that some formats wind down over time while others, the more prescient ones, move on and on. Second, in contrast to the FMCG goods for which there is a well laid out map for moving brands through the country’s interiors, stores have to sort out supply chain issues, delivery formats and reaching out processes for many other goods from scratch.

His final word: “There is no question of the rural retail revolution having been mistimed. Even if it had occurred five years later, we would still have to go through a process of consolidation and shakeouts. But as for whether the rural Indian is ready for this format, he always has been.”

CavinKare to take on HUL, ITC in bottled shampoo biz

CavinKare, a Chennai-based unlisted FMCG company known for its Chik brand, has embarked on a strategy which will test its mettle as a low-cost bottled shampoo-maker in the southern markets.
The company, which has successfully competed with multinationals, including Hindustan Unilever (HUL), in the sachet segment to retain leadership in key southern markets, will now have to prove its acumen in the bottled shampoo segment, which is increasingly getting competitive with the new marketing strategy of ITC and other players.
CavinKare’s sub-brand Chik Satin will address the affluent customers, pitting the company against HUL’s Clinic Plus and Sunsilk brands. Chik as a shampoo brand has predominantly been sold in the sachet format and has been positioned as an economy brand consumed largely in the rural market.
In effect, while attempting to address a larger portion of the urban market, CavinKare is also pushing its economy brand to the next level, currently populated by brands from HUL and P&G.
The overall market for shampoos in India is estimated at Rs 2,000 crore a year. The popular segment, where Chik Satin has been positioned, commands an estimated 25 per cent of this market.
According to a CavinKare executive, 75 per cent of Chik sales come from the rural market, while the industry sells only 52 per cent of its shampoo brands in the rural markets.
In the Indian shampoo market, where sachet (7ml) format accounts for 75 per cent of the total sales, Chik has been bringing in 90 per cent of its sales in this format.
CavinKare’s Executive Director Ramesh Viswanathan said, “Chik Satin is not a premium or niche segment product. It is slightly higher in the value chain.”
Experts believe that what CavinKare is attempting now is a bit risky and has not worked in the past. However, the earlier failures were at a time when affluence levels in the Indian market were far lower than what it is now. “Traditionally, when brands tried to move from the bottom of the pyramid to the top, they have not succeeded. For instance, Lux to Lux International and liquor brands such as Bagpiper to Bagpiper Gold. But then, times have changed. Those were when the economy was liberalising and now it is liberalised. It may work. We just have to wait and watch,” said Madhukar Sabnabis, Country Head (Discovery & Planning), Ogilvy & Mather.
The pricing of the new product is also done with an intention of taking on market leaders such as Clinic Plus. Chik Satin is priced at Rs 56 for a 200-ml bottle, while Clinic Plus is priced at Rs 63 and Sunsilk at around Rs 87 at the higher price point.
Sabnabis cites another recent success — Ponds Age Miracle, an anti-aging product that has found a niche for itself.
Santosh Desai, CEO of Future Brands (part of Kishore Biyani’s Future Group), believes that there is no one stand on whether what CavinKare is attempting will succeed. “When you attempt to move the economy brand up the value chain, it will not work if you peg it on price or as a category about status. It would be a numerator game, if value is equal to what you offer divided by the price.”
Desai cities the success of Lifebuoy soap that had managed to move up the value chain from being an economy product for several decades.
CavinKare has budgeted Rs 4 crore on television commercials to promote the new Chik Satin over a four-week period.

SAP sees strong retail growth

Major retailers partner with SAP to invest in an integrated solution portfolio

With over 60 high growth Indian retail companies embracing SAP technology for Retail Solutions, SAP India has made a mark in the growing Indian retail sector. This came about at the SAP Retail Customer Value Networking Event, being held in Mumbai, September 10.

According to a press release, SAP has a strong foothold in India, some of the major retail players such as are Future group, Reliance Retail, Tata Trent, ITC Retail, Great Wholesale Retail Club, Vishal MegaMart, Welspun, Nilgiris Dairy Farm, Videocon, Spencers etc. have partnered with SAP in their move to invest in an integrated solution portfolio to catalyze consumer demand across multiple channels, increase cost efficiencies, adapt to market changes and maximize profit margins. These retailers continue to increase their business in India and also SAP footprint in the Indian retail market to get better return on Investment.

Ramesh Shanmuganathan from John Keells Holdings PLC said, "We are beginning to realize the strategic benefits from our investments in SAP by leveraging its end-to-end capabilities which has helped us manage our IT footprint effectively through better business and IT alignment, whilst driving innovation and pursuing flexible business processes in providing for a stronger platform of growth for our businesses."

Some of the retailers who went live with SAP in India this year include Dabur, Nilgiris Dairy Farm, IndiaBulls, Subhiksha, Varkeys and the customer in global environment John Keells Holdings PLC (Srilanka) and Meena Bazaar (Bangladesh). SAP for Retail has further strengthened its presence with successful wins such as DLF Retail, Numerouno, Om Store Book Store in India and Gemcon Food and Agricultural Products Ltd. (Meena Bazar) and Otobi Ltd in Bangladesh. Worldwide, 6,200+ retail and wholesale customers run on SAP including 33 of the top 50 global retailers.

Tthe recently held SAP Retail Customer Value Networking Event, provided a common platform for discussion on Indian retail industry related topics, the event saw SAP showcase its investments in retail solutions, and product roadmap for the retail industry.

The other topics of interest included leveraging technology for growth and maximizing profitability through rural retailing. The forum witnessed participation from Sankarson Banerjee - CEO, Future Bazaar, Amit Mukherjee - CIO, RPG Group, Rajashekar, Executive Advisor, Wadhawan Group, Anil Garg, General Manager, Dabur, M VR Kumar – VP Asia Pac, MENA for SEAL INFOTECH and Ramesh Shanmuganathan, CIO John Keells Holdings PLC amongst others.

Speaking on the occasion, Amit Mukherjee - CIO, RPG Group, "In an industry faced with daily pressures on margins, performance and the bottom line, SAP offers robust solution which is able to handle large volumes of transactions and adapt to the changing industry landscape of the future."

Expressing his views, Anil Garg, General Manager, Dabur commented "A flexible solution platform that allows for incremental enhancements based on business needs and a clear road map for the future is critical to the long-term success. Dabur sees SAP as the IT provider of choice and a trusted partner who truly understands our business, and one that will continue to support its customers in the long run."

"Obtaining the flexibility to grow and adapt to market changes is a common objective for all of our retail customers. Having fully globalized technology in place to exploit new market opportunities and seamlessly integrate into a global operations network is crucial for many of our retail clients," said Dr. Deb Bhattacharjee, Vice President, Value Engineering, Industry & Solution Group, Indian subcontinent, "We continue to design a retail environment that puts customer needs in its epicenter and empower them to evolve as the best-run-business."

SAP has created and is operating an SAP Retail Innovation Center in India to better serve both the Indian and global markets with forward-thinking uses of retail technologies. The center houses fully globalized technology to exploit new market opportunities and seamlessly integrate them into operations network, best practices-based retail expansion and consumer intimacy programs a crucial for many SAP retail clients, states the release.

Integrated technology platform

Retailing continues to gain momentum in India with the main focus being on growing customer experience and increasing retails footprints. A Springboard Research study on IT in India's retail sector confirms SAP's strong position in the Indian market, with 27% of study respondents identifying SAP as the leading primary influencer in terms of solutions investments.

"Technology is a high-priority investment area for most large and medium-sized Indian retailers, as they look to scale up their business operations in a competitive market," said Nilotpal Chakravarti, Senior Analyst - Vertical Markets at Springboard Research. "We have seen a strong momentum for investments in ERP and other back-office solutions and SAP has emerged as a leading player in this space," he concluded.

SAP for Retail provides an integrated technology platform for retailers and a one point solution for supporting and managing different business models such as owned stores, franchise stores, shop n shop concepts. Strong business decision and analytical capabilities have enabled retailers of all sizes the power to make the right decisions quickly and profitably.

The SAP for Retail solution portfolio combines the SAP Business Suite family of business applications with a broad set of integrated retail applications to help companies profitably serve consumer demand across multiple channels.

Some of the most common solutions used in the retail industry by its customers are:

Merchandise and Master Data Management: Harmonized, synchronized and optimal workflow controlled master data across the different lines of business

Merchandise and Category Management ensures that assortments meet the expectations of customers within specific micro markets, determines optimal product mix, prices and promotions – supporting step-by-step cooperation and coordination in development, implementation, and monitoring of business plans.

Forecasting and Replenishment; solution that enables retailers to dramatically improve on-shelf availability, reduce inventory, and optimize the supply chain.

Workforce Management - A centrally managed, Web-enabled workforce management solution gives retailers improved flexibility and control over their business processes. It allows corporate management to take more ownership of schedule planning and execution, giving managers more time to assist customers and coach employees.

Store Management: Store management systems need to cater to the fast-changing needs of customers today. These systems must quickly gain fast and reliable, accurate, and insightful customer information in many ways,

POS Data Management - enables you to examine all your key issues – events and promotions, prices and margins, and reason codes for returns – as well as a host of other parameters.

RFID Framework

FMCG companies get IT savvy

Adoption of projects like ‘push technology’ in sales expected to improve efficiency.

Fast moving consumer goods (FMCG) companies are looking at 10-20 per cent improvement in production and efficiency levels this year because of the adoption of newer technologies to track expansion of product portfolio and manufacturing locations, besides aggregation of godowns and shipment warehouses.

FMCG companies will spend around 10-15 per cent of their net profit on technology. Companies like ITC Limited, Emami and Marico have forayed into diverse businesses in FMCG alone. This has not only led to the rapid expansion of the supply chain but has also increased complexities.

ITC’s manufacturing locations have increased rapidly to about 200 from about a dozen-owned manufacturing facilities for its different businesses. In addition to these manufacturing locations, ITC’s aggregating of godowns and shipment warehouses have grown exponentially in a couple of years.

Emami’s recent investment in IT has ensured finalisation of its balance sheet in a record 35 days against the 60-day norm.

Mohan Goenka, director, Emami, says: “We foresee an improvement of 10 per cent in production and efficiency levels at Emami for financial year 2008-09. This will be achieved by implementing sales and operation planning, demand management and distribution resource planning which will enable system control to forecast sales, check inventories at locations, plan manufacturing resources and logistics to meet the customer schedules.”

Marico, on its part, is investing in better connectivity through enterprise portals, wi-fi enabled offices and in unified communications.

Marico is investing in automation of many workflows like Writeoffs, insurance claims, and media spend management portal.

According to Udayraj Prabhu, head, business applications, Marico: “We have commenced Project Edge, an initiative to improve the budgeting, planning and review systems using the TM1 tool of IBM-Cognos. This will enable us to strengthen our budgeting, planning and review processes by making them quicker, error-free and less tedious. This should lead to a significant saving in time for those involved in these activities.”

The company has also launched HR portal platforms as active channels of communication within the organisation.

ITC Ltd is building an IT infrastructure to bar code its produce at the warehouse itself, even before it reaches the retailers.

This is expected to help ITC keep track of product manufacturing time, thereby enabling implementation of first-manufactured-first-out (FMFO) strategy, which means items manufactured first are shipped out of the factory and the warehouse earlier than products manufactured later.

Among other projects, ITC will also implement this year usage of ‘push technology’ for its sales force.

VVR Babu, chief information officer, ITC Ltd, says: “Each salesman is allotted specific locations and he has to track sales and requirements of all shops and stores of a particular area. We are working on an integrated IT system which will gather and push information onto our salesmen’s laptops so that they don’t have to waste time looking up details on the company portal. For instance, if a salesman is covering 10 outlets of a region, every evening ITC’s systems will push onto his laptop the sales, distribution and requirements of that region and also the target to be met.”

ITC’s ‘holy smoke’ biz adds to the bottomline

Business Line:

If there is a product that requires lighting up, ITC will make it — cigarettes, of course, but also agarbattis and candles.

ITC officials say that the company’s leap into fragrant incense sticks received a telling comment from Sri Sri Ravishankar — “from smoke to holy smoke.”

In a business context, the contribution of Mangaldeep agarbattis to ITC’s turnover is a trifling Rs 40 crore to the company’s net sales of Rs 13,000 crore. However, the business is growing and is profitable. The three-year-old agarbatti division has now gathered enough momentum to grow, like its safety matches business did, into a medium-sized business in a few years.

Now, ITC wants to replicate the agarbatti model in its new candles business. The company got into this business only in November last year. A Bangalore-based company Wellburn makes the candles for ITC which are packed and exported under the brand ‘Expressions’. In November-March last year, ITC sold Rs 1.2 crore worth of candles.

US market

But the US market for aromatic candles is $3 billion big. Mr V. M. Rajasekhar, CEO of ITC’s agarbatti division, who is also incharge of the candles business, says that ITC saw an opportunity when the US imposed an anti-dumping duty on Chinese candles. The market held by the Chinese is now slowing moving into Vietnam and Thailand and ITC moved into for a bite.

However, why does a company of ITC’s size get into these little businesses? (There are many of them — stationery, greeting cards, and organic manure.) Mr R Srinivasan, Member, Corporate Management Committee, notes that first of all these businesses have a synergy with one of ITC’s main lines of operations — FMCG. Secondly, they are profitable, with prospects to grow to a few hundred crores of sales in good time.

Building managers

But according to Mr Srinivasan, more important than these considerations is the management-bandwidth spin-off that ITC gets from these divisions. “Each division is an incubation centre for a future manager,” Mr Srinivasan told Business Line. Professionals who manage these divisions, like Mr Rajasekhar, learn aspects of brand building, quality control, handling human resources, and above all, working under tight budgets.

Strong consumer demand should help boost revenues

Growth in consumer spends and value generated by price hikes are expected to deliver steady growth for fast moving consumer goods (FMCG) companies in the quarter ended March, 2008.

The year-on-year average growth in the operating profit growth could be around 18 per cent on a net sales growth about 15 per cent while the net profit is expected to be about 20 per cent.

The better performers in the FMCG space could be Nestle and Godrej Consumer: the former is expected to post the highest growth in net sales over around 17 cent whiel the latter Godrej is expected to post the highest growth in net profit at 40 per cent. Both these firms should benefit from margin expansion resulting from price hikes taken by them to offset cost increases.

ITC may well post a decline in volumes growth due to the recent excise duty hike on non-filter cigarettes. However, together with the FMCG and other businesses, ITC should turn in a growth in net sales of over 11 per cent and growth in operating profit of close to 18 per cent. (Rs crore) Company Net sales Operating profit Profit after tax Q4FY08 E Q4FY07 Change % Q4FY08 E Q4FY07 Change % Q4FY08 E Q4FY07 Change % ITC 3,867 3,466 11.6 1,095 930 17.7 753 650 15.8 HUL 3,627 3,184 13.9 446 362 23.5 397 333 19.2 Nestle 1,054 899 17.2 220 178 23.2 139 111 25.4 Dabur 480 444 8.0 86 73 18.0 75 65 15.0 Marico 359 335 13.0 42 38 12.0 30 27 11.0 Tata Tea 287 251 19.0 18 15 26.2 11 2 636.3 GCPL 210 186 12.9 39 32 21.2 35 25 40.6

Price hikes taken in the detergent category and growth in personal care products business could help Hindustan Unilever deliver a growth in net sales of about 14 per cent and an operating profit growth of about 24 per cent.

Other companies which are expected to witness strong growth in earnings are Dabur, Marico and Tata Tea. However, Dabur's expected net sales growth of 8 per cent and operating profit growth of 18 per cent would be primarily volume-driven as it has not taken any price increase in this quarter.

Marico should deliver a revenue growth of 13 per cent and an operating profit growth of 12 per cent, enabled by the growth in sales of its functional foods and hair care brand Parachute.

For Tata Tea, the impact of profit from Glaceau stake sale could cause a jump of over 600 per cent in net profit. However, its operating profit due to better domestic performance could grow by 26 per cent and net sales are expected to grow by about 19 per cent.

ITC to expand its retail footprint

ITC`s lifestyle retailing business division is planning to expand its retail footprint further by setting up more Wills Lifestyle, John Players and Miss Players stores across the country, reports Economic Times.

The company has also embarked on an active exercise to create a stronger brand and retail identity for Wills Lifestyle, which it wants to position as a more international and aspirational brand.

ITC has piloted a new store concept with FRCH Design of the US, a specialist in store and mall design. Three concept stores have already been launched, two in Mumbai and one in Delhi. It is also working with the UK`s Elemental Design and The Friedman Group from the US in areas like product presentation, visual merchandising and retail training.

The company intends to increase the number of Wills Lifestyle stores from 250 to 400 by the end of 2008-09.

Deepika Padukone: ITC vs HUL

In a queer coincidence, the newest star on the block, Deepika Padukone, features in different commercials belonging to rival camps. She has been roped in by ITC to promote its Fiama Di Wills soap brand, and is also seen in a rather dated commercial of Close-Up which has been revived by rival HUL.

While the Fiama Di Wills print advertisement has been recently unveiled, the "Kya aap Close-Up karte hain...." commercial dates back a couple of years when Deepika was a budding model.

Though Fiama Di Wills and Close-Up belong to different categories, and thus, do not compete, ITC is a fierce rival to HUL which has till date towered over meek and strong brands alike, in the highly competitive FMCG sector.

ITC has already marked a foray into core FMCG categories-soaps and shampoos. Industry observers say that it would eventually expand the basket to include more personal products. ITC's good financial backing is expected to assist the company in competing against the might of HUL.

On why ITC roped in Deepika, Sandeep Kaul, general manager, personal care business, ITC, said: "The Fiama Di Wills Brand personality is that of today's modern, confident, intelligent and aware woman. Deepika is the perfect embodiment of this personality."

Reasons for the revival of the old Close-Up commercial could not be ascertained. HUL is said to be within its legal bounds to feature a commercial done years ago, which brings forth the question: Would Deepika's Liril commercial done some years ago also be revived? There are no answers to this one, but if that happens, then the star would be seen promoting two rival brands from the same category.

While ITC did not respond to a TOI query, all an HUL spokesman said was, "the right on any creatives which are generated shall be governed by the law of the land".

O&M was responsible for the creative three years ago and Lowe, which is handling the Close-Up brand for HUL now, refused to comment. Advertising sources, however, said: "If the ad works for the company, they would use it. Ad agencies don't change creative elements unless there is consumer boredom."

BBDO's Josy Paul said, "It is opportunistic thinking and increases the buzz in the market."

Nearly a decade ago, Close-Up was caught in a similar wrangle with rival Colgate-Palmolive, when an old commercial featuring model Ruby Bhatia was revived ahead of a new Colgate product commercial which had the same model. The embarrassment was such that Colgate was forced to replace Bhatia.

Unilever Growth to Sputter as P&G Takes Market Share in India

Unilever, which sells soap to more than 500 million Indians, may see global revenue growth slow in 2010 as Procter & Gamble Co. and ITC Ltd. step up marketing in Asia's third-biggest economy.

The world's second-largest consumer products maker has relied on accelerating shipments of Surf Excel detergent in India to make up for sluggish sales in Europe. Now Cincinnati- based Procter & Gamble is stocking Indian stores with Olay skin- care products after nearly halving the local prices of Ariel and Tide detergents in 2004.

Asia and Africa, which make up about a third of Unilever's worldwide sales, will see their share of the company's growth fall to 2 percent in 2010 from 3.3 percent in 2007, according to Brussels-based brokerage Petercam SA. Revenue from the two continents rose 11.4 percent in the first nine months of last year, helping offset 1.9 percent growth in Europe and 4.2 percent in North and South America.

``Unilever is quite heavily dependent on the region for growth, so a slowdown there would hurt growth at Unilever as a whole,'' said Yann Gindraux, an analyst at Vontobel Holding AG in Zurich, speaking about Asia and Africa. He rates the stock ``sell'' and expects sales in the regions to expand by 9 percent in 2009 from 11 percent last year.

Unilever's overall sales growth will slow to 4.9 percent in 2010 from an estimated 5.3 percent in 2007, according to the median of five analysts in a Bloomberg survey.

2010 Expectations

P&G, the world's largest consumer-goods maker, will continue to gain share in the next five years in India, according to Ali Dibadj, an analyst at Sanford C. Bernstein in New York, who rates the stock ``outperform.'' Hindustan Unilever Ltd., 52 percent owned by the London- and Rotterdam-based parent, lost ground in shampoo, bath soap, toothpaste and tea in the quarter ended Sept. 30, compared with the year earlier, according to the company. Its share of the shampoo market declined by more than a percentage point to 47.7 percent, the company said.

ITC, the largest Indian cigarette maker and partly owned by British American Tobacco Plc, is also making inroads. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes.

`Profitable' Cigarettes

The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal- care portfolio,'' said Anand Shah, an analyst at Angel Broking in Mumbai, who has a ``neutral'' rating on the stock. ``It has the ability to take losses in this segment as long as it grows its sales. This strategy will still satisfy investors.''

Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. The price of palm oil, used to make soaps and foods, has surged 70 percent in the past year.

``Given the competition, profitability will continue to be under pressure,'' said Macquarie Securities Ltd. analyst Unmesh Sharma, who has an ``underperform'' rating on Hindustan Unilever. He expects the stock to drop to 180 rupees ($4.57) in the next year from 190.9 rupees. The company has a market value of about $11.8 billion.

India is Unilever's biggest market in Asia, generating about 6 percent of annual sales. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams, bathing soaps and shampoo.

Cescau Sells

Chief Executive Officer Patrick Cescau has sold frozen food and perfume units to boost performance. Unilever aims for sales growth, excluding acquisitions, divestments and currency swings, of 3 percent to 5 percent annually through 2010. P&G revenue, on that basis, rose 5 percent in fiscal 2007, partly because of China and India.

Cescau is also trying to take on Nestle India Ltd. and ITC in food. Hindustan Unilever wants to convince urban consumers to shift from fresh to manufactured food such as Knorr soup. Indian packaged-food sales reached $14 billion, compared with unpackaged sales of $275 billion, according to a company presentation last year.

``As incomes increase, people will be spending more on products such as chocolates and other packaged food,'' said Suhas Naik, who helps manage the equivalent of $200 million at IL&FS Ltd. in Mumbai. ``This is where the growth will come from. The penetration of these products is still very low in India.''

Unilever's Indian operating profit as a percentage of sales declined to 14 percent in 2006 from more than 20 percent in 2003, according to data on Unilever's corporate Web site. The margins exclude restructuring costs and gains on disposals.

``It's very surprising that given their brand recognition in India, they aren't more aggressive in entering new businesses,'' said Angel Broking's Shah.

PepsiCo’s FritoLay & ITC Foods in mkt warfare

The market dynamics will soon change in the Rs 2,500 crore branded snacks sector in India. To gain a leading edge in the overcrowded category, ITC Foods, a new entrant with a market share of 16% is drawing up a fresh game plan. For starters, ITC Foods is doubling up its distribution network and hiking its ad budget by 30% this quarter. Meanwhile, PepsiCo’s FritoLay is reinvigorating its product portfolio to sustain its leadership in the sector. The company has roped in MS Dhoni to bat for its flagship brands.

To pump up volumes, FritoLay is in the process of rolling out an aggressive marketing campaign led by its star endorsers, Saif Ali Khan, MS Dhoni and Juhi Chawla. According to industry analysts, ITC and PepsiCo will soon wage a pitched battle for market share and mind share in the highly competitive sector.

On the company’s strategy, Ravi Naware, chief executive officer of ITC Foods said, “We are getting ready to launch a media-blitz for ‘Bingo’ next month. We forayed into this sector in March 2007 and our market share today stands at 16 %. Our goal is to capture a 50 % share in this sector.” Created by Ogilvy & Mather, ITC’s new ad campaign will harp on the ‘quality of Bingo’ in its communications. As part of its inorganic growth strategy, the company is also scouting for acquisitions in domestic Markets, said Naware.

Across the road, FritoLay is in the process of rolling out a high-voltage interactive promotion titled Chala Change Ka Chakkar to woo new consumers. According to Gautham Mukkavilli, managing director of FritoLay India, “This is s one of the biggest interactive promotions undertaken by us since 2001. With this move, we hope to gain market share and mind share in this sector.”

Industry analysts point out that ITC has been steadily stealing market share from Pepsi ever since it entered this sector in March 2007.”

Within a year, ITC has got 16 % share. In a bid to take on new rival ITC, FritoLay is now beefing up its operations,” said an analyst based in Mumbai.

ITC’s Bingo: Successful Launch

Business Standard's Annual Brand Derby has picked Bingo as the most successful launch of 2007. Vodafone was a close second to Bingo for its highly effective simple message: Hutch is now Vodafone. Ten months after it entered the category with its wafer snack brand, Bingo, ITC's foray into the Rs 1,800-crore branded snack market has fetched the company a 16 per cent market share across the country (Source: AC Nielsen). What made the brand tick let's take a look

Research:
After making the decision to launch Bingo it started by sending a cross-functional team of eight individuals were sent across the country to research the snacking habits of the Indian consumer. After travelling to 14 cities and speaking to more than 1,000 people, the team came back with an insight that Indian consumers were looking for novelty and excitement in existing snacks.

Taste:
For the recipes, the company went to the chefs in its hotels. The chefs came back with 16 flavours with twists like bindaas masti chaas, chatkila nimbu achar and tandoori paneer tikka-flavoured potato chips, chilli and tomato-flavoured mad angles — inspired by khakras — and other snacks.

Targeting:
The Company decided that youngsters in the age group of 16-30 are the most experimental and hence they would be the primary target audience.

Marketing & Advertising:
Bingo touched a chord with consumers through humour and irreverent advertising. On television, the company booked 10 to 15 spots per channel per day on youth channels such as MTV and Star World, mass Hindi channels like Zee and Star TV, and news channels. It also had around 20 spots on a variety of radio channels and advertised in most leading national dailies. In the top-30 cities, over 1,000 outdoor hoardings advertised the product. It also created a website www.bingeonbingo.com with offers, online games, downloads and even mobile games. According to industry estimates, ITC spent close to Rs 100 crore on marketing.

Distribution:
The Company distributed more than 4 lakh large racks, to display the brand at all points of sale. The racks created so much impact that even competitors like market leader Frito-Lay's introduced its own version of wafer racks. This incredible leveraging of distribution system is credited by many as major cause of Bingo's success. Now due to this lays started doing re-branding exercise and introduced has introduced Lay's Chaat street, India's Mint Mischief and Wafer Style. Lays has relaunched itself in the health platform. This December, Lays has launched the concept of Snack Smart which talks about a healthy snack. Now Lays is with 40% less saturated fat. That means same taste and more healthy..
The latest launch is in line with the announcement made by Pepsico's Global Chief Ms Indra Nooyi that the Company is moving towards a healthy platform. This initiative is intended to silence the critics that Potato Wafers are junk food.

Together with the relaunch, Lays has introduced new flavors : Lay's Chaat Street, Mint Mischief and Wafer Style. The new variant which are Indian flavors is a result of the tough competition from Bingo. Its interesting to note that Bingo has forced Lays to relearn its own lessons. Lays had captured the Indian consumer's mind through Indianisation but later somewhere the brand lost its focus. The latest health positioning is definitely going to give Lays some additional leverage in the market. But Bingo is not sleeping either, if you have noticed the pack of Bingo , it says " Baked , Not Fried " to remind the consumer that no oil is used.

The "Healthy " competition has started.... FritoLay India leads the market with a share of 45 per cent. Haldiram's and ITC have a market share of 27 and 16 per cent, respectively
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The health positioning is something that maybe Lays is counting on, but that does not mean that Bingo cannot survive with its existing strategy of being a "Rich" snack.The technology of efficient & less fat production of potato has now been acquired by ITC as well.The superior Online advertising and huge market recall Bingo has got needs to now filtered into fewer brands, as the there are currently too many for the consumers to handle.

Consumer firms widen Health Food portfolio

In a bid to address the needs of health-conscious Indian consumers, FMCG majors have lined up a slew of products for launch in 2008. ITC's foods division is launching Sunfeast Benne Vita Flaxseed biscuits early next year to expand its health biscuits portfolio.

The company already has two other health offers under Sunfeast Sachin Fit Kit, Sunfeast Sachin's FitKit Vitamin and Protein enriched biscuits and Sunfeast Sachin's Fit Kit Multi-grain biscuits.

Since consumer tastes have changed towards a healthier one, we foresee a good growth in the health foods category and expect our portfolio of these products too will continue to grow in the years ahead, added Naware.

The company also offers a health pasta option Sunfeast Benne Vita pasta in four variants.

PepsiCo India's food arm, Frito-Lay India, has already cut down the use of around 5,000 tonnes of saturated fat by switching to rice bran oil for its core products. The company is now aiming to cut trans fats further by using whole grains for its snack offerings. Says a FritoLay India spokesperson,

In recognition of the fact that consumers are living smarter and constantly making lifestyle choices, we have made our core product range healthier, encouraging consumers to snack smart.

Our core product Lay's Kurkure, Uncle Chipps and Cheetos is now being cooked in rice bran oil. In the process, we have reduced saturated fats in these products by 40 per cent, while maintaining the same great taste and at the same price. This is in addition to the fact that all our products have zero-trans fats.

Homegrown FMCG company Dabur India, which has already made heath and wellness its focus area, introduced ChyawanPrakash, a sugar-free variant of Chyawanprash last month.

The product is targeted at the calorie-conscious consumers.

Says K K Chutani, general manager, marketing, Dabur India, The launch of this product comes at a time when Dabur is putting in a concerted effort at expanding the category and use of Chyawanprash. Dabur's entry into the sugar-free segment with Dabur ChyawanPrakash is yet another step in this direction.

According to industry experts, due to increasing health concerns and rising rates of chronic lifestyle diseases, consumers are today asking for products that address their health needs and with this trend growing, food companies will continue to extend their portfolio to healthier offerings.

Hindustan Unilever (HUL) is believed to be in the process of introducing a range of nutritional drinks and snacks for children next year. The range is set to be launched under Amaze Brainfood, a part of HUL's parent company Unilever.

Amaze Brainfood has already been launched in Turkey and the range is said to include tasty bite-size cereal treats and milk drinks for children that contain iron, iodine and protein. __________________________________________________________________ All the major FMCG's are expanding their Foods business. Whether the move towards healthy alternatives is a consequence or a cause towards the general mindset of the consumer is going back to an age old debate. What is interesting to wait and see is the positioning ITC's Bingo would take in response to Lay's new Health statement.

Fiama Di Wills: ITC Shampoos

Ad-Analysis:
ITC has prided itself on breaking the clutter with its different approaches towards advertising in Sunfeast and then Bingo. But it has gone for a safe bet on Fiama Di Wills.
The advertisement looks more like a Pantene TV ad rather than a new entrant.

Description:

Cigarette and FMCG major, ITC has launched its first mass personal care offering, a high-end shampoo. After a year of speculation, ITC has launched its first mass market personal care product. ITC 's shampoo brand, Fiama di Wills is in the premium segment, that’s growing faster at 44%, compared to 21% for the overall market.

Interestingly, ITC didn’t introduce a new brand name for its shampoo. Instead it has opted for a brand extension of its two year old, super premium range of personal care products, Essenza di Wills. But unlike Essenza that was available at ITC hotels and Wills Lifestyle stores, Fiama di Wills shampoos will be stocked at retail stores across India. The product will be available at Rs 99 for a 200 ml bottle.

On the pricing front, ITC is taking established players like HUL and P&G head on.

Expanding its range of personal care products, and following the successful launch of Fiama Di Wills Shampoos, ITC presented yet another world class range of products for the Indian consumer through its new range of Fiama Di Wills Shower Gels.

Fiama Di Wills’ new premium range offers three transparent shower gels with suspended beads. Each variant provides a specific benefit to the consumer:

Shampoo Variants: Silky Strong,Everyday Mild, Aqua Balance, and Volume Boost.

Continuing with its tradition of offering a superior product and brand experience to the modern Indian consumer, ITC also launched today the Superia range of soaps and shampoos in select markets .

Superia offers a range of four soap variants and two shampoo variants with a range benefit of Glowing skin and Shiny hair. Each of the variants have been designed to deliver specific benefits to the various consumer needs.

SOAPS: For Glowing Skin
1. Fragrant Flower with the fragrance of Rose & Lavender Oil
2. Soft Sandal with the fragrance of Sandal & Almond Oil
3. Natural Glow with Neem & Coconut Oils
4. Healthy Glow with Orange Oil

SHAMPOOS: For Shiny Hair
1. Shiny Black with Triple Conditioners and the natural goodness of Hibiscus & Brahmi extracts
2. Vibrant Green with Triple Conditioners and the natural goodness of Amla &
Arnica extracts

Superia soaps will be available in sizes ranging from 50g to 125g, and the shampoos in 125 ml and 55 ml.

Manpower Hierarchy in Retail: ITC

We'll first look at an example of the Choupal Saagar retail business of ITC where the different roles are listed below.

Store Level: (in Ascending Order)
Helper
Customer Service Associate (Cashiers & Category Salespersons)
Stock In charge
Assistant Store In charge
Store Manager

State Level:
Retail Accountant
Area Manager (around 3 stores)
State Retail Manager (entire state)

Headquarters:
Buying Assistants
Assistant Managers
Merchandising Managers (each category)
Business Development Manager
Retail Head

There might be a few other levels in the Headquarters level.