Marketing Mamangeemt -II RM - VILASINI FS NEHA COMM KIRAN

Program: PGDM RM,FS,Comm. (Batch2012-14), TrimesterII, End Term , Subject: Marketing Management - II K. J. SOMAIYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, Vidyavihar, Mumbai- 400077 Program: PGDM RM, FS, Comm. (Batch2012-14), Trimester-II Subject: Marketing Management-II (End Term Examination) Maximum Marks: 30 Date: 23 rd Jan.2013 Duration: 3 hours Time: 3pm to 6pm Instructions 1. All Questions are compulsory . 2. Start every question on a fresh page. 3. Supplement your answers with suitable examples. 4. Support your answers with suitable theory. QUESTION 1 20 marks Read the enclosed case “ The First Mover Disadvantage – Developing the Market for Wet Wipes ”, and develop a suitable marketing plan. Use the various tools of analysis like SWOT / PLC etc to analyze the case and then prepare an appropriate marketing strategy that includes identifying objectives for the company, proposed segments, products to be launched in the market, positioning and communication strategy, packaging and pricing issues, competition etc. QUESTION 2 10 marks Write Short notes on any two of the following: a) Consumer Marketing Channels b) Advantages & Disadvantages of Global Marketing c) Retailers Marketing Decision d) Market Challenger Strategies 1

Program: PGDM RM,FS,Comm. (Batch2012-14), TrimesterII, End Term , Subject: Marketing Management - II The first mover disadvantage – developing the market for wet wipes Dr Monica Khanna Advaith Hariharan, Fresh Feel’s marketing manager, ordered his second cup of coffee and gazed at the beautiful Arabian Sea. At 5:30 in the afternoon in April, it was calm and blue. Whenever he was in a mood to think strategy, he loved to relax by the sea side. The amazing hidden potential of the sea never failed to surprise him. Today he mentally compared its hidden potential to that of the market opportunity for “Wet Wipes" in India. He wondered just what his company’s strategy should be. Fresh Feel had spotted the opportunity in ‘wet wipes’ way back in March 1987, but had failed to educate the consumer about its benefits and convince them to buy the product on a regular basis. “Had the product been launched ahead of its time in India? Was it because Fresh Feel had just the one product?” wondered Hariharan. After all wet wipes was a mature category in Europe and the US. Leading players such as Ceverly Kern, Gennet & Parn as well as smaller firms had a line up of brands for different consumer groups and different usage situations. Company background Fresh Feel Personal Care Products Limited was a subsidiary of Zephyr Chemicals & Plastics Limited. The parent company was incorporated on 4 September 1985 as a private limited firm, and went public on 4 March 1986. It made various household and personal care products such as mosquito repellents and wet cleansing tissues under the brand names of "Japer" and " Fresh Glow" . In 1990, the company diversified into the manufacturing of polyvinyl chloride (PVC) sheets using technologies acquired from several leading European firms. This business did so well that within a short time, Zephyr doubled its PVC sheet extrusion line at Silvassa to 4,000 MT per annum. Investments were made in the other businesses also. In the personal care division modernization was carried out by introducing a new range of household insecticides and the automation of Fresh Glow’s production process. Product description: fresh glow wet tissues Fresh Glow wet tissues came in various ranges and sizes. The ranges were: cologne, lime, baby, intimate and rose. These were available in packs of 100s, 70s, 50s, 15s, 10s and 5s. Initially the wet tissues were packed in plastic containers. The brand name was chosen to connote freshness and used the imagery of water. Hence waves were printed on the pack conveyed the benefit of freshness. The wet tissues were available at departmental stores, chemists and general stores. Efforts were made to reach out to the target consumers: the company demonstrated the product at lifestyle exhibitions to get the consumer to try Fresh Glow. 2

Program: PGDM RM,FS,Comm. (Batch2012-14), TrimesterII, End Term , Subject: Marketing Management - II a pack of twenty thick and soft wipes. A single wipe guaranteed the entire removal of make¬up and cleansed the face and moisturized it too. Clean n Fresh also catered to the needs of babies. Their baby wet wipes were available in economy packs of 80, 160 and 240 wipes. Chocolate sized convenient travel pack of 12 luxury cloth wipes and extra thick wipes in easy-to-carry pack of 42 were also available. Apex also imported Pride tissue paper products from Indonesia. Available in six packs of four colors each (perfumed/non-perfumed), Pride was one of the largest ranges of tissue paper handkerchiefs available in India. All products were made from virgin pulp, and hence there were no hazard of rashes. These contained no brightening agents, chemicals or coloring dyes. International trends Internationally, the various types of wet wipes available are categorized as baby, facial, hand and body, general purpose, household, floor care, automotive, pet care, clean room, surface preparation, printing, primary and emergency health care, long term care, and foodservice. The US led the way in the use of wet wipes. According to the Summer Vacation National Cleaning Survey by USA’s Soap and Detergent Association (SDA), 44% of the people surveyed bought hand or personal wipes on vacation with them. Meanwhile, 31% considered cleaning/disinfectant wipes a must-have vacation item and 14% reported the use of stain wipes when traveling. According to market tracker, Euro Monitor, based in Chicago, the global market for disposable consumer oriented personal care wipes (including adult wipes, baby wipes, and cosmetic wipes such as facial cleansing and deodorant wipes) reached $3.8bn in 2004. As shown in exhibit 01, Euro Monitor expects steady growth to bring the worldwide market to $4.3bn by 2009. In 2005 the total sale of baby wipes touched $2.5bn in the global market as compared to $397mn for adult wipes and $886mn for cosmetic wipes. In the facial cleansing area, some wet wipe products were moving beyond basic cleansing and offering additional consumer benefits and treatments, such as anti-aging, anti-acne, exfoliating and sensitive skin facial wipes. Demographic and lifestyle changes expected to influence the development of new moist wipes products in this segment include the aging of the population, the increase of "metro-sexual" men who are more appearance conscious and the wider distribution of premium-priced products as the line between mass and class blurs. "Consumer desire for convenience and cleanliness will continue to drive the personal care wipe market," a marketing consultant said. "We know that facial wipes are viewed as a convenient alternative to other facial cleansing products. And in our time-pressed society, the desire for convenience is only going to increase. Likewise, moist toilet tissue is a convenient, hygienic tool for mothers who are toilet training toddlers." 4

Program: PGDM RM,FS,Comm. (Batch2012-14), TrimesterII, End Term , Subject: Marketing Management - II Looking forward, future trends include consumer-appealing packaging, new fragrances, different wet wipe lotions and even more products designed to meet specific needs (such as feminine hygiene wipes). Portable wet wipes for cars, purses, backpacks and lunch boxes are predicted to benefit from an increasingly germ-conscious society. In terms of technologies, many companies were keeping a sharp eye on the growth of spun lace use for wipes products, particularly baby wipes. Flushability and biodegradability were expected to remain key issues as the personal care wipes industry moved forward. In fact, INDA (Association of the Nonwoven Fabrics Industry), and EDANA (the European Disposables and Nonwovens Association) have established a joint task force examining standards for determining flushability. Fresh feel’s dilemma Advait Hariharan convened a meeting of his core team and discussed the market scenario. He said, “The strong Indian middle class of 250mn has purchasing power and living standards nearly equivalent to the middle class of developed countries. They tend to use the products based on availability and convenience. The children in these families are potential customers for all kinds of baby diapers and baby wipes. Further as a concept, wet wipes in the beginning can catch up only in restaurants and in travel situations “. Sameer Date, Senior VP, South Zone, chipped in, “The current low penetration of these products has provided a fertile market for new entrants to India. However, Indian customers are value driven, hence only a product with a true value will succeed. The high birth rate also ensures a recurring huge demand for infant-related nonwoven products. Baby wipes is expected to grow rapidly among the urban population, whereas the general moistened wipes will take some more time for the concept to be accepted by the Indian population. Exhibit 01: global retail value market size for personal care wipes us$mn 5

Program: PGDM RM,FS,Comm. (Batch2012-14), TrimesterII, End Term , Subject: Marketing Management - II Compactly packaged and pre-moistened Kara skincare wipes gives a hygienic, convenient and effective skincare solution to the consumers on the go. These wipes are easy to carry and use. They are highly effective with unique formulations having natural ingredients that nourish the skin. They are alcohol free and dermatologically safe. Kara is made from Birla Cellulose, a fibre that is 100 percent natural and biodegradable.” Kara in Greek means pure, pristine, innocent and unblemished beauty and is an outcome of the in-house research and development at the Aditya Birla Centre for Science and Technology, Taloja, Maharashtra near Mumbai. The market for wet wipes is mature in Europe, US, China, Japan and West Asia. In India, this market is gradually picking up with changing lifestyles and the fast pace of life among the young and upwardly mobile population with higher disposable income. Kara skincare wipes fills up the lacuna in this segment as there is lack of availability of quality products at appropriate price points in the Indian market. Kara is readily available pan India at superstores, cosmetic and chemist outlets and modern retail. The ease of usability of a convenient and high value product at an affordable cost in India for a young and mobile population is a huge opportunity that Kara wishes to address. 7

Program: PGDM RM,FS,Comm. (Batch2012-14), TrimesterII, End Term , Subject: Marketing Management - II Exhibit 04 : Yearly Results of Fresh Feel ------------------- in Rs. Cr. ------------------- Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Sales Turnover 10.75 7.61 10.12 12.33 13.83 Other Income 2.96 3.79 3.30 2.68 1.28 Total Income 13.71 11.40 13.42 15.01 15.11 Total Expenses 11.45 8.84 11.41 12.73 12.46 Operating Profit -0.70 -1.23 -1.29 -0.40 1.37 Profit On Sale Of Assets -- -- -- -- -- Profit On Sale Of Investments -- -- -- -- -- Gain/Loss On Foreign Exchange -- -- -- -- -- VRS Adjustment -- -- -- -- -- Other Extraordinary Income/Expenses -- -- -- -- -- Total Extraordinary Income/Expenses -- -- 3.47 4.20 -- Tax On Extraordinary Items -- -- -- -- -- Net Extra Ordinary Income/Expenses -- -- -- -- -- Gross Profit 2.26 2.56 2.01 2.28 2.65 Interest 0.05 0.13 0.03 0.02 0.03 PBDT 2.20 2.43 5.46 6.46 2.62 Depreciation 0.71 0.73 0.69 0.64 0.56 Depreciation On Revaluation Of Assets -- -- -- -- -- PBT 1.49 1.70 4.77 5.82 2.06 Tax 0.01 -- 0.11 0.04 0.03 Net Profit 1.48 1.70 4.66 5.78 2.03 Prior Years Income/Expenses -0.01 -- -- -- -- Depreciation for Previous Years Written Back/ Provided -- -- -- -- -- Dividend -- -- -- -- -- Dividend Tax -- -- -- -- -- Dividend (%) -- -- -- -- -- Earnings Per Share 1.58 1.82 4.97 6.18 2.16 Book Value -- -- -- -- -- Equity 9.36 9.36 9.36 9.36 9.36 Reserves 28.55 27.58 27.58 27.58 27.58 ----------------------------End of Paper--------------------------- 8