The Vicks business in India

1. 0 Name and description of company for which marketing plan is being developed. A brand of Proctor & Gamble (P&G), Vicks is India’s No. 1 Cough & Cold Brand. It created the cough & cold Over-the-Counter (OTC) category in India way back in 1952 and has led the category till date. Today it has completed almost 60 years in India. Its current portfolio in India comprises Vicks Vapor, Vicks Cough Drops, Vicks Action 500 Extra, Vicks Inhaler and Vicks VapoCool. Vicks has been rated as the #1 cough & cold brand trusted by doctors. The Vicks business in India is the biggest in the ASEAN-Australasia-India (AAI) region and the second biggest in the world after USA. Over the years, Vicks has launched several heart-tugging advertising campaigns, some of which were – the ‘Happy Birthday Mummy’, ‘Touch Therapy’, ‘6 symptom’ campaigns for Vicks VapoRub, the ‘Khich Khich Dooor Karo’ ad for Vicks Cough Drops and the ‘Haan Bhai Haan’ ad for Vicks Action 500. All variants of Vicks have continued to be consumer favourites over the years 1. 1 HISTORY. In 1890, pharmacist Lunsford Richardson took over the retail drug business of his brother-in-law Dr. Joshua Vick, of Greensboro, North Carolina. [1] After Dr. Joshua Vick saw an ad for Vick's Seeds, Lunsford Richardson began marketing Vick’s Family Remedies. [1] The basic ingredients of the range included castor oil, liniment, ‘dead shot' vermifuge. [1] The most popular remedy was Croup and Pneumonia Salve, which was first compounded in 1891, in Greensboro. It was introduced in 1905 with the name Vick's Magic Croup Salve and rebranded as VapoRub in 1912 at the instigation of Smith Richardson, Lunsford's oldest son[1]  ; Smith had gained valuable sales and marketing experience while working for a period in New York and Massachusetts after attending college. Smith Richardson assumed the presidency of the company in 1919 upon his father's death. The flu epidemic of 1918 increased sales of VapoRub from $900,000 to $2. 9 million in just one year. In 1948, Edward Mabry became president of Vicks (the first outside the Richardson family), then known as the Vicks Chemical Company. In 1985, it was sold to Procter & Gamble and Procter & Gamble has since marketed the product as â€Å"The only thing more powerful than a mother's touch. † The company archives (including related personal records of the Richardson family) from at least about 1920 or so, up to the 1985 sale to Procter & Gamble, are housed at the University of North Carolina at Chapel Hill. 1. 2 Products offered by the company: VicksVapoRub-Is a Decongestant Vaporizing Ointment for topical use. – Ayurvedic medicine. Vicks CoughDrops-Is a Cough Drop that provides relief from throat irritation. Ayurvedic medicine. VicksAction500Extra-Is a Colds Medicine for relief of multiple cold symptoms such as blocked nose (nasal congestion), headache, bodyache, sore throat pain and associated lethargy. Vicks Inhaler- Inhaler for a feeling of relief from stuffy nose. Ayurvedic medicine. It is easy to carry in a pocket or purse. Provides fast and temporary feeling of relief from stuffy nose. Inhale deeply to make breathing feel clear and cool. Vicks VapoCool-This is the latest offering from Vicks in India. Launched in Oct 2011, it is a new premium throat drop specially formulated to provide 2 way relief which soothes the throat and relieves blocked nose at the same time. It is currently available in two flavours viz. Menthol & Peppermint. 2. 0 Description of product for which we will develop marketing Plan Vicks VapoRub vicks vaporub ointment is a mentholated topical cream manufactured by Vicks, intended to assist with minor medical conditions that temporarily impair breathing, including the common cold. It is applied to the chest, often immediately before sleeping. VapoRub is currently manufactured and packaged in India and Mexico. In Germany it is sold under the name WICK VapoRub. Vicks VapoRub has endeared itself to the Indian consumer and finds its place in every Indian home, due to its proven performance over the years against cold. Vicks VapoRub provides safe and effective multi-symptom relief from the six symptoms of cold, namely – blocked nose, cough, body ache, headache, muscle-stiffness and breathing difficulty due to cold. The medicinal properties of Vicks VapoRub’s natural ingredients – Nilgiri (Eucalyptus Oil), Pudina (Menthol) and Kapoor (Camphor) provide effective relief from these six symptoms of cold. Vicks VapoRub is available in four pack sizes of 50gm jar, 25gm jar, 10 gm dibbi and a 5 gm dibbi. 3. 0 Objectives of the marketing plan for which you will develop a marketing plan. Our objective is to set an alternate strategy to * Provide reinforcement of the product as it has already at maturity stage of PLC. * Increase the market penetration of vicks vaporub . The total business of Vicks Vaporub depends upon the winter season. If there is no winter, there is no requirement of any product of Vicks, therefore another objective of the marketing plan would be to increase market share by the winter of 2012 from the existing market share. 4. 0 List of specific background information needed to complete the plan * We have to determine current market share of vicks vaporub through secondary data analysis. * We have to determine the current strategy followed by vicks vaporub in India? We will try to find out Potential demand for vicks vaporub in the market * Core competencies of vicks vaporub * We will try to identify who are the direct and the indirect competitors for our product. * What are side effects by vicks vaporub and the methods to tackle it? * How the communication strategy vicks vaporub is has in India? * How is the current distribution channel vicks vaporub has in India? * Identify if a change is required in current pricing strategy? * SWOT analysis of vicks vaporub ? 5. 0. List of possible information sources to answer each questions listed in 4. 1. www. vicks. co. in 2. www. ijrcm. org. in International Journal of Research in commerce, IT and Management.VICKS VAPORUB – MOTHER’S TOUCH THERAPY: A CASE STUDY-by RAJNI KAMBOJ 3. http://books. google. co. in/books Brand Positioning: Strategies for Competitive Advantage -by Subroto Sengupta 4. We w ill try get more information by data collection and analysis through personal Interview as well as survey. 6. 0 List of activities/tasks necessary to complete the marketing plan. secondary data analysis * questionnaire preparation * data collection * Use of various statistical tools for the data analysis * Finally we will formulate a Strategy based on the analysis and interpretation of the results of the above activities. Sr No. | Topic | Page No. | 1. 0| Name and description of company for which marketing plan is being developed| 1| 1. 1| History| 1| 1. 2| Products offered by the company| 2| 2. 0| Description of product for which we will develop marketing Plan| 3| 3. 0| Objectives of the marketing plan for which you will develop a marketing plan. 4| 4. 0| List of specific background information needed to complete the plan| 4| 5. 0| List of possible information sources to answer each questions listed in 4. 0| 5| 6. 0| List of activities/tasks necessary to complete the marketing Plan | 6| 7. 0| Estimated time table for completion of all activities| 7| | | | 8. 0| Mission| 8| 9. 0| Macro Environment| 8| 10. 0| Industry Analysis| 11| 11. 0| Competition| 14| | | | 12. 0| Market Segment| 22| 13. 0| Target Segment| 23| 14. 0| Positioning| 23| 8. 0 Mission 8. 1 Mission Statement We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. 8. 2 Principal objectives for starting the business. Vicks cares about people, whether they are ill and trying to get better,  or well and trying to stay that way. So we create respiratory products and services that treat the symptoms and nurture the body. . 0 Macro Environment: 9. 1 In what ways will changes in the general levels of national economic activities affect your business over the next three to five years? * The Indian economy is emerging with remarkable rapidity from the Slowdown caused by the global financial crisis of 2007-09. * Backed by a rise in the domestic savings and investment rates, a revival of growth in agriculture and resilience in the manufacturing an d services sector, India has displayed a great recovery post the global slowdown. * However, persistent inflationary environment remains a Big challenge. The rise in demand coupled with strong supply bottlenecks is a catalyst for inflation * If the GDP goes higher and the purchasing power of the lower and middle class increases, there might not be a shift of preference of Vicks product because most of Vicks products have low prices. Our Product is usually basic need; it does not give you the sense of pride or usage glamour. So there might be one bottle in every house hold but the sales of Vicks will not increase much, unless they take up serious rejuvenating action on the brand and its 4 p aspects. Since Vicks is not a costly product the general level of economic activities will not have a very big impact on the sales of the product. 9. 1 Will changes in your local economy affect our business? Factors such as tax increase or fuel price fluctuation will affect the business or allow competition to creep in ,However Vicks has tackled such problems in the past by considerably reducing its cost of marketing and distribution. Moreover the loyal customers will still buy it not only because it is comparatively lesser priced but because they know it is quality, best value for price the pay to buy it. . 2 Do you foresee any competitors from overseas? The threat of competitors from overseas is very low because there are already many products in this sector by the same company and it is not easy for the outside competitors to come and take the market share because the maximum market is taken by products from Vicks like Vicks vaporub, Vicks action 500 etc. and the trust that is already built by these products is not easy to be break. We don’t see any competitors from outside into this industry. 9. 3 The legislations that will affect your business. OTC Drugs' in common jargon means drugs which are legally allowed to be sold Over the Counter without the prescription of a Registered Medical Practitioner. The term is clumsy and creates a wrong impression about the official status of the drugs. In India, import, manufacture for sale and the sale and distribution of drugs and cosmetics is regulated by the Drugs and Cosmetics Act, 1940 and its subordinate legislation Drugs and Cosmetics Rules, 1945. The phrase ‘Over the Counter' and its abbreviation ‘OTC' preparations have no legal recognition and are better referred to as ‘non-prescription drugs' and/or as ‘household remedies'. . 4 Will demographic changes affect your business? Age: Initially Vicks was targeted on children’s but later on company found it used by adults as well. Sinus patients also are targeted customer. Income: Since the product is not so costly so income doesn’t play major role in the purchasing the product. Vicks Vaporub is of fered in 5gm -50gm dibbi to cater to the needs across all segments of the society. Gender: Both Male and females can use the product Location: Certain geographic locations such as Colder regions, high altitude or hill stations will also have more have an effect on sales of Vicks Vaporub. 0. 0 Industry Analysis: 10. 1 Potential rate of growth of national industry. According to a survey done by ORG IMS estimate the OTC market in India would show rates of about 10-12%, of the entire OTC market the segment for cough, cold and fever show the least of about 1%. 10. 2 Ease of entry of new firms into industry. Industries vary with respect to the ease with which new sellers can enter them. The barriers to entry is one of the advantage Vicks Vaporub has already established in an industry that has a potential entrant. Such a barrier is generally measurable by the extent to which established sellers can persistently elevate their selling prices above minimal average costs without attracting new sellers. The economics of this industry is in such a way that new entrants would have to be able to command a substantial share of the market before they could operate profitably. 10. 3 Intensity of Competition among firms Vicks Vaporub already commanding a superior share of market, intensity of competition is considerably low. Moreover the constituents and benefits of the competitor products being almost the same. 10. Degree of product substitutability. It can be easily substituted since even the competitors products constitutes almost similar formula and act on similar symptoms ,Moreover it could also be substituted by Ayurvedha or allopathic remedies or homemade remedies. 10. 5 Degree of dependency of complementary or supporting products. Increased demand from pharma and other consuming industries mainly have been the cause for the recent increase the prices of menthol which is a major ingredient of Vicks Vaporub . The increased prices of Menthol will surely have affect on the cost of production of Vicks Vaporub. 0. 6 Degree of bargaining power This ‘over the counter’ medication is always a seller market as the customers won’t go for any bargaining for over the counter products. And the vicks loyalists don’t have any complaints about the accessibility or affordability of their favorable brand – a boon in the extremely price sensitivity Indian market. The product vicks has a very good bargaining power as it is doing good in the market by satisfying the consumer expectation. 10. 7 Technological sophistication in industry. * Vicks is coming up with various technologies in packaging. Today people look for one product with various benefits other than individual products for different problems and their lies the success of medicated treatments. * These products are used for the cough, headache and throat pain and so the products should be designed very carefully with improved technology. * There are various products coming in the market and there are various biotechnologies coming up which is still a nourishing the industry. 10. 8 Rate of innovation in the industry. Rate of innovation is very low since the constituents of the products are more or less similar from the time it had been launched. Sales of Vicks Vaporub mainly depend on advertisements and promotions. 10. 9 General level of Management capability? * Mr. S. Khosla has been Managing Director of Procter & Gamble Hygiene & Health Care Limited since June 1, 2007 and also serves as its CEO. * He is a B. Tech (Mechanical Engg. ) with a post graduation in Business Management. * He has been with P&G since 1983 and was leading the AAI Health Care Global Business Unit and Special Global Projects. He has over the period gained valuable †¦ experience of overseeing P&G's international business in UK, Malaysia and Japan. Mr. Khosla serves as a Member of Advisory Board for India at Catalyst Inc. * He has been Additional director of Gillette India Limited since December 31, 2005. * He serves as Member of the Board of Governors at Advertising Standards Council of India. Mr. S. Khosla is very valuable to P&G ,he is been with P&G for the past 29 years and is the right person to lead both as a CEO of the company as well as Mana ging Director. He been rated among top CEO’s of our country in survey by The Economic Times. 11. 0 Competition 11. 1 Structure of our market. The Vaporub segment in the market is dominated by Vicks Vaporub in India. Vicks commands a market share of over 60% in the cold balm/rub category. This industry is already saturated and vicks already being a dominant it has few competitors on cold/rub market, mainly zandu balm and Amrutajan. however it has also lost a small amount of share to some of the unbranded products aswell. 11. 2 Comparing our product with that of the competitor based on the following parameters such as: A) Quality: Ratings with respect to competitor: -3-2-10+1 +23 Vicks Vaporub has endeared itself to the Indian consumer and finds its place in every Indian home due to its proven performance over the years against cold. The constituents of Vicks vaporub are natural ingredients such as eucalyptus Oil, Menthol and camphor which are safe for external application as a regular basis and provides relief from the symptoms of cold. B) Reputation in eyes of the customers: Ratings with respect to competitor: -3-2-10+1+2+3 Being product from a reputed company such as P & G, Vicks has gained its share of reputation in the eyes of the customers. In a consumer research conducted by P & G and market research firm NFO-MBL(National Family Opinion-Market Bureau Ltd. )consumers rated Vicks Vaporub comparatively higher on parameters such as ‘Fast Relief’ and ‘Long Lasting Relief’. In addition ,they also rated Vicks Vaporub significantly better on key product attributes stating that it is ‘less Greasy’ and ‘Smells Beter’ and almost 89% of the respondents rated Vicks Vaporub as ‘Better than any cold rub ever used C. Prices: Ratings with respect to competitor: -3-2-10+1+2+3 25ml Box of Zandu Balm costs Rs. 0. 00, However 25 ml box of Vicks cost just Rs38. 00, It’s is very evident that Vicks is priced comparatively very lower to its nearest competitor. D) New products launch/development: Ratings with respect to competitor: -3-2-10+1+2+3 There is no plans of launching new product from Vicks as of now and also Zandu has no plans of releasing any new product in the pain reli ef segment ,however they have launched a wide variety of products in category of general health either in the form of tablets or Syrup,which posses no threat to our product. 1. 3 What exactly do you think makes your succesful competitor successful? This question does not apply since we dominate the market by 60%. 11. 4 Identification of the main competitors. Its main competitors are Emami’s Zandu balm having a market share of 27% and amrutanjan with 10% share; however the rest of the share is occupied by other branded and unbranded competitors. Therefore Zandu balm is our major competitor although Zandu Balm is not meant technically understood as a part f the Vaporub Segment yet because of similar characteristics it does compete with Vaporub products in areas and thus it has to be provided for as a competitor in the Vaporub segment. 11. 5 Main competitor’s principal weakness. Principle weakness of Zandu balm is the high price and also a Balm is being positioned in consumers mind has stronger and therefore preferable only for adults. Whereas Vicks Vaporub which was positioned as rub for the child’s cold from the beginning has crept into evry household and is also being used by adults since then. 11. Do you anticipate any new competitors coming into your market in the near future? As it this Cold/rub segment of the market has already reached the maturity and more over Vicks Vaporub is dominant in this market with few competitors,its is very difficult for new entrants, As of now there is no anticipation for new c ompetitors. 11. 7 Changes in the competitive approaches our has major competitor made in the last 12 months. There is no such changes in the competitive approaches of Zandu balm, more over this product can be used promoted anytime in the year unlike Vicks Vaporub 11. How do you regularly track major competitors’ activities? The competitors activities can tracked through: * Websites-look at its home page to see if they have made changes to the way they describe their products and services. * News Columns * Trade Shows/Event Sponsorship 11. 9 The reasons customers buy from us:- 1. They want to feel better: * Alleviate symptoms from 4 primary conditions * Cure to cause 2. Low price sensitivity: * Generics are 30%-50% cheaper and have less than 10% share * There is perceived differentiation: this reduces customers’ price sensitivity 3. Convenience * Purchase from nearest store. 1. 10 The Buying process adopted by different customers you cater to? Its can purchased from nearest retail or medical store. 11. 11 Is there seasonality of buying your product(s). Yes our product thrives on seasonality. At the time of its launch vicks Vaporub had been promoted mainly as a winter remedy and had been pushed mostly in winter, simply because the incidence of cold was greatest in that season However later on research showed the people were equally susceptible to colds in the monsoon, Therefore to tap this opportunity, Vicks vapoub was also recommended as remedy for â€Å"monsoon cold†. 1. 12 How customers use the product? VapoRub can be applied to the chest or throat (for congestion relief)or back or to sore muscles (to increase circulation). (For external use only) Market Segmentation: Dividing a market into smaller groups with distinct needs, characteristics, or behaviors who might require separate products of marketing mixes. Variables that might be used in segmenting consumer markets are geographic, demographic, psychographic and behavioral. What basis of Segmentation does P&G use to differentiate the Vicks? Geographic segmentation: Proctor and Gamble have existence in 80 countries worldwide where Vicks have its market and these includes countries from North and South America, Europe, Middle East, Asia and some countries of equatorial region. Pakistan, China, India and Russia are the major countries of Asia where proctor and gamble sold Vicks. Demographic Segmentation: Age: Vicks is used by almost all ages of people. Gender: Vicks is used by both males and females. Income: People of low income to people of high income can all afford Vicks. Psychographic Segmentation: Person belonging to any social class either he/she is from lower or even he/she is from higher and person of any life style and personality can use Vicks for cough, cold, flu, chest cold, chest congestion and sinus symptoms. Behavioral Segmentation: Vicks are often used by the people on special occasions when they are suffering from cough, cold, flu, chest cold, chest conjestion and sinus symptoms. Target segment: The target market for Vicks Vaporub is children. Knowing that the typical Indian family centered around the child and also realizing that the health of the child was the prime concern of the parent, Vicks Vaporubwas positioned as a rub for the Childs cold. This was felt to be the best way of getting it into the homes. Besides, this meant further distinguishes it from a balm, because a balm was much stronger and therefore preferred for adults, Vicks Vaporub’s Milder Formulation was suited for children. Positioning Vicks of Vaporub: In the early 1950’s when Richhardson Merrel first looked at it ,the balm market in india seemed promising for Vicks Vaporub. Since the†Balm Market† was fairly extensive in India, specially in south india ,the company expected little resistance to the introduction of the product. All that needed was to sell Vicks Vaporub as a balm. At that time balm market consisted of mainly four or five brands with amrutanjan as the accepted leader. The question was whether it should take a plunge against leader? or should it carve out itself a different niche? Whereas in rest of the parts of the world Vicks was positioned has a distinct position in other markets all over the world as â€Å"a rub for cold†. However technically the formula of Vicks Vaporub did not prevent its use as a multi-purpose ointment. The final decision was however to position it as a rub for cold. Though the company realized this definition would limit its use; nevertheless, it decided to go ahead as it would bring the product into sharper focus. Knowing that the typical Indian family centered around the child and also realizing that the health of the child was the prime concern of the parent, Vicks Vaporub was positioned as a rub for the Childs cold. This was felt to be the best way of getting it into the homes. Besides,this meant further distinguishes it from a balm, because a balm was much stronger and therefore preferred for adults,Vicks Vaporub’s Milder Formulation was suited for children. The company also knew that it would be very frustrating for parents when the child could not sleep and lay awake throughout the night . Therefore,while other Balms were used at all the times of the day, Vicks Vaporub was specifically positioned as a rub for a child’s cold to be used in night. Finally Vicks Vaporubwas positioned for use on the â€Å"nose, throat, chest, all over the back, â€Å"and this became the integral part of the Vaporub message. Though the positioning of Vicks Vapourb in india was very similar to whet was being done in other countries,a proper understanding of the Indian environment contributed substantially to the success of Vicks Vaporub. All over the world Vicks Vaporub had been promoted mainly as a winter remedy and had been pushed mostly in winter, simply because the incidence of cold was greatest in that season. This pattern was fallowed in india in the early stages. Later,research showed that people were equally susceptible to colds in monsoon. therefore, to tap this opportunity,Vicks Vaporub was recommended as a remedy for† monsoon cold† a special set of advertisement was built around this â€Å"monsoon cold†(getting wet in the rain,sneezing,cold, etc) RHL attributed the success of Vicks Vaporub in India to proper initial positioning having once introduced Vicks Vaporub into homes by appealing to the parents ‘concerns for the health of their child,its was later recommended for use by adults too. Years later after the product had already established in the Indian household, Brand managers made some modification in the original definition of Vicks Vaporub positioning has a multi-purpose ointment, for obvious reason of broadening the target group, besides research showed that adults were also using Vicks Vaporub,Futher,lay time use was also recommended. Even though some ingredients and attributes of Vicks Vaporub were similar to those of its competitors such as Zandu Balm and amrutanjan, differential advantages was secured through positioning strategy. It was differentiated by: (a) Target user:Child (b) Usage occasion: Colds (c) Manner and time of application: at night, on the nose, throat, chest and back. 15. 0 Product Mix of Vicks: VicksVapoRub-Is a Decongestant Vaporizing Ointment for topical use. – Ayurvedic medicine. Vicks CoughDrops-Is a Cough Drop that provides relief from throat irritation. Ayurvedic medicine. VicksAction500Extra-Is a Colds Medicine for relief of multiple cold symptoms such as blocked nose (nasal congestion), headache, bodyache, sore throat pain and associated lethargy. Vicks Inhaler- Inhaler for a feeling of relief from stuffy nose. Ayurvedic medicine. It is easy to carry in a pocket or purse. Provides fast and temporary feeling of relief from stuffy nose. Inhale deeply to make breathing feel clear and cool. Vicks VapoCool-This is the latest offering from Vicks in India. Launched in Oct 2011, it is a new premium throat drop specially formulated to provide 2 way relief which soothes the throat and relieves blocked nose at the same time. It is currently available in two flavours viz. Menthol & Peppermint. 5. 1 Is your business is dependent on one product or service for over 80 percent of profit. No, our business is not on one product; however our business mainly depends on Vicks Vaporub, Vicks Cough drops and followed by Vicks inhaler. 15. 2 How easy are your products or services to copy? Its is very easy to copy most of products of business, Moreover the product ingredients are well know ayurvedhic constituents. A research study by A. C. Nielsen int roduced that sales of Vicks look-alike products equaled the sales of the genuine brands. P & G initiated action against the manufacturers of look-alike Vicks Vaporub & Lozenges. Thecompany obtained an injunction from the court & with the assistance of court representatives & advocates. It conducted raids on the premise of the fake manufacturer  & sized products valued at Rs. 3. 5 million. These included look-alikes vaporising rubbing marketed under the brand name Vikas cough drops under the name Venus & aMenthol drop under the name Super plus 5 15. What is the extent of product differentiation you have achieved for your range of product/services? Over the years there has been a very minimal product differentiation in it products however Vicks caters mainly to cold and symptoms of it through most of its own products in different forms such as: Vaporub, Inhaler, cough drops, Capsules (Vicks Action 500) 15. 4 What proportion of your product/service range is in each phase of life cycle? The stage through which individual products develop over time is commonly known as â₠¬Å"product life cycle†. All of the products of Vicks has reached the maturity stage and also the industry has reached the maturity phase (i. e. ) most profit is earned by the market as a whole. At this stage Research and Development is likely to be restricted to product modification and improvement and perh aps to improve production efficiency and quality. Product(Industry) Life cycle: All the products and the industry has achieved Maturity. 15. 5 Do your product / services benefits match customer’s needs or are there gaps? List your products features and benefits and compare them to customer needs. First of all our product is not a feature based product, however some of the noteworthy features based on convenience sampling on sample size of 20 here are the results we obtained: Features: Quick Relief Benefits: Helps consumer get rid of cold symptoms very soon. Customer Needs: At time it is very frustrating for a person suffering from cold symptoms such as blocked nose or congested chest,and will be in need for product that reliefs such problems as soon as possible, consumers belive that Vicks helps them in such cases. Features :Quality Benefits: Trust on the product and its benefits Customer Needs: Consumers’ trust on the brand for their value for money and also free of any side affect. Features: Availability (Ease of purchase) Benefits: available at convenience of the customer. Customer Needs: Incase the customer is in urgent need of the product it can be available at the nearest retail or medical store. Such is the distribution channel of Vicks. 15. 6 How important is service, warranty and so on? No question about service or warranty 5. 7 How important is packaging? Packaging is important; however it has remained the same for many years with predominantly blue colour. 15. 8 How is your product perceived in relation to competitive offerings? Yourself(5) Major competitors(5) Price 4 2 Our product is very cheap compared to our major competitor. Eg: 25ml Box of Vicks Vaporub-Rs 38. 00, whereas 25ml box of zandu Balm Rs 70. 00 Performance 4 3 Packaging : 4 ( Attractive) 2 Reliability : 4 (especially for Children) 3 Durability : 4 (Best before 2 years) 3(Best before 18 months) Quality : 4 3 After sales service/ N/A N/A Maintenance N/A N/A Guarantees : N/A N/A Promotion/Advertising: During monsoon and winter Anytime of the year Image : 4 3 15. 9 What product modification and change have your competitors introduced in last one year. Recently Emami ltd. tarted reviving its over-the-counter (OTC) healthcare business under the Zandu brand through brand re-launches and investing in its distribution system, packaging and marketing campaign. Products like popular pain reliever Zandu Balm are being re-launched and price being increased. Pricing: * MRP of vicks vaporub is as fallows * 10 ml: Rs22 * 25 ml: Rs45 * 50ml:Rs 79 A profitable venture of Proctor & Gamble, Vicks Vaporub has established itself as a market leader in Vaporub segment and gives tough competition to certain products in other segments also. The distinct niche it has created in the market is because of the fact that the company realizes its position as a market leader and thus the formulation of policies accordingly. To speak of them, it is important to appreciate its inherent advantage as a Proctor & Gamble product. The fact is that P & G believes in exploiting its resources and putting them to their maximum usage. Their entire marketing strategy is based upon its principle (to speak exclusively in the Indian context) and thus they have only one marketing channel for all its products. This is to say that the same set of dealers for its products who market them all and thus the cost of marketing each product is saved in terms of distribution cost. The distribution channel follows five levels, give in detail below: * Manufacturer (P & G health and hygiene) * Super Distributer * Distributer * Dealer/Retailer * Customer Vicks Vaporub or for that matter no product of Vicks does not have a separate market channel for itself. All products are marketed by one single marketing channel, organized and regulated by one company namely, Proctor and Gamble Hygiene Products Ltd. The commission for each intermediatory is as follows. (i) Dealer – 16% (ii) Distributor – 4% (iii) Super Distributor – 1 – 1. 5% What is here important to note that the person who actually sells the product to the consumer gets the maximum i. e. 16% on the sale of the product The distributor, who makes the goods available to the dealer gets 4% i. e. one-forth of the share of the dealer Also this fact has to be understood in the light of the peculiar fact of the existence of a Super Distributor. In our context, this implies the actual link between the company and the distributors. Generally there are only One or two of super distributors in each state, depending upon the size and demand in the state. These super distributors are bulk distributors and actually account for the market building of Vicks or P & G products as any increase in market share of Vicks or and increase in demand in The market earns them handsome incentives for Vicks. Thus without actually getting into the hassles of dealing with local dealers and distributors, Vicks actually gets a higher share in market by using the area specific knowledge of these super distributors. (3. Another factor in this distribution channel is the presence of hoarders. Now these hoarders are none else but what we call as black marketers they are not specific to Vicks but in general hoard all products in the commodity segment especially the FMCGs. These cause great problems in the assessment of real demand of the consumers and the real consumption of the products. They store the goods in great bulks and lead to art ificial scarcity of products, thus raising the prices. P & G has found an effective reply to this situation by the Designing of their super distributor system. They being aware of the local peculiarities Effectively deal with the hoarding effect and do not allow the company to suffer on these counts. (4. ) The collection of order from the local dealers is a task left upon the MRs (Medical Representatives) who collect orders and report to the distributors, who also employ them for this purpose. The advantage of being an non prescribed drug, the cost of giving samples to the doctors is saved considerably. (5. ) Then again, the segregation of the orders received through MRs and direct orders is considerable. It is estimated that about 50 to 60 percent of the entire supply of Vicks Vaporub is through this MR route. The rest is in the form of direct purchase of the dealers (which comprises a significant portion of the sales volume) from the super distributor. In this manner, they not only gain on the count of the commission of the distributor but also get two fold advantage. First they can negotiate on whole sale prices on account of bulk purchase and secondly they can also negotiate upon the transport and delivery upon their own terms to them by the super distributor. 6. ) That Vicks does not count solely upon its share as a market leader. It is aware of the presence of other competitors and thus it has not remained static in terms of its promotional strategy and has also simultaneously been incumbent upon increasing its market share by indulging into intensive promotions strategies such as free Vicks Inhaler along with Vicks Vaporub, discounts, 20% extra on each pack of 50g. Each and oth er offers. Thus it has constantly tried to lure the consumers to stay with it while penetrating the market in to deeper. (7. Vicks has been posed as the Health Care Brand of P & G India. Through this, P & G has sought to present both its market leaders and having a distinct aim and objective and thus sought to gain recognition of the product in the eyes of the consumer. The effect, accordingly, has been that the consumers have sought to rely on Vicks as a part and parcel of their daily lives as such. In almost each and every household, a pack of Vicks Vaporub can be located. Customer Price sensitivity Vicks Vaporub comes in three types of packs * 10 ml: Rs22 * 25 ml: Rs45 * 50ml:Rs 79 As per our interview with retailer the most preferred of these is the 25ml pack, An average of 10 packs will gets sold every week in a particular store. Vicks vaporub is the market leader in this segment; however the nearest competitor is Zandu balm which is very expensive comapared to Vicks Vaporub. 25ml pack of Zandu Balm is priced at Rs70. Vicks Vaporub has very hardcore loyalty among customers, It is in very rare situation that incase Vicks Vaporub is not available the customers go Zandu Balm or Amrutanjan Customer price sensitivity plays a very minimal role in this case. For example: If the price of 25 ml pack Vick Vaporub is increased by 10%, the resulting price of Rs49. 5 is still very low compared to its nearest competitor Zandu Balm which is priced at Rs70. The price of Vicks Vaporub will still remain lesser that of Zandu Balm even if the prices of Vicks Vaporub is increased by 50% at the present situation. Promotional mix of Vicks Vaporub: Advertisement through radio, television and other kinds of media such as facebook and twitter along with, promotions are primary promotional mix for Vicks Vaporub. Media Plan & message: Vicks Vaporub: â€Å"We don’t sell Vicks Vaporub, we sell mother’s love. Over the years, Vicks has launched various heart-tugging ad campaigns that have struck an emotional chord and left an impact of love and care for which the brand stands. According to a P;G spokesperson, â€Å"Ever since its launch in India in 1952, Vicks Vaporub was strategically positioned as a child cold rub, and all communication to consumers, employees, trade etc. has always centered round the mother child loving relationship. † The brand surely reigns supreme on the trust parameter, which no competitor can take away from Vicks. The effect, accordingly, has been that the consumers have sought to rely on Vicks as a part and parcel of their daily lives as such. In almost each and every household, a pack of Vicks Vaporub can be located. And what is important to note is that where it is not present, consumers still refer the other ointments (which they use) as Vicks only. By this it can be understood as to how dominating the effect of Vicks has been. Vicks VapoRub has endeared itself to the Indian consumer and finds its place in every Indian home, due to its proven performance over the years against cold. According to the company P;G, â€Å"We don’t sell Vicks VapoRub, we sell mother’s love. The Vicks portfolio caters to different consumer needs and Vicks has become an integral part of every home and family in India. The consumer-brand relationship has been built over many years of trust and care and Vicks has lived up to its promise of a superior quality cough and cold relief product that consumers can enjoy for another fifty years and many more, to come. Vicks will last as long as Mother’s love lasts. † Present media plan for vicks vaporub: Background: As per 2010-2011 annual report, The Vicks Cough Drops business had an excellent Year, with the brand growing at 18%. The growth was driven by increased investment on proven advertising and driving awareness of flavors by using other relevant touch points for the Brand like radio and wall-painting, which increased consumption further. Given the passion for cricket among its consumers, the Brand also executed a first ever cricket focused program with the launch of ‘Vicks Cricket Jockey Hunt’ spread over 16 top cities in the Country. A penchant for talking incessantly and passion or the cricket†¦ let the jockeying begin! Vicks Cough Drops announced the launch of the nation's first ever Cricket Jockey Hunt – a unique concept that sweeps the nation in search of the ultimate cricket fan who conveys his passion for the sport in his wittiest and quirkiest best! Gracing the event with their presence were none other than two of Indian cricket's most famous and distinct ive personalities – Harsha Bhogle ; Mandira Bedi. All of us in our day to day lives have experienced throat irritation which may appear minor at the outset but has an indelible impact. Fortunately, Vicks Cough Drops has been our trusty companion providing long lasting relief from throat irritation. As Vicks Cough Drops arms people with the thrilling equipment of being able to talk for long hours, the Cricket Jockey Hunt aims to bring forth the scintillating combination of jockeying with the nation's passion cricket. Speaking about the Vicks Cricket Jockey Hunt, Harsha Bhogle said, â€Å"The Vicks Cricket Jockey Hunt is a distinctive platform for all cricket fans that have an inclination and skill for cricket to come forward and explore their talents. There is huge potential in our country and I urge all those who have the skill set to participate. This is a platform that I could only wish was available back in my day. I am very anxious about the contest and look forward to mentoring the participants. † Each week the contestant will go through a series of eliminations to reach the final levels of the Top 8 followed by the Top 3 followed by the grand declaration of the Ultimate Vicks Cricket Jockey in each of these 16 cities. However Vicks VapoRub had a continued strong volume growth driven by continued focus on the successful ‘blanket of warmth’ advertising via augmented media spend and on our ongoing strategy of upsizing consumers to drive consumption. However this year Vicks has come up with very innovative campaign on its face book page: Vicks India that claims to be the No. 1 brand for cough and cold, is on a mission to create the ultimate anthem for India’s cricket team and wants the community to be a part of it. Brands are forever catching up on the cricket fever in a nation of cricket fanatics. With the T20 World Cup round the corner, Vicks India has commenced on the creation of an anthem to cheer the Indian team called ‘Cheer for Champions’. ‘Cheer for Champions’ is an endeavour to unite all of India in their support of the national cricket team. Currently in the process of being composed by much sought after music composer, Ranjit Barot, Vicks India also wants the community to be a part of it. For when one voice has power, you can imagine what a whole nation united by a single cheer could do. And for adding to the cheer, fans can expect exciting incentives – 25 surprise gift hampers and if you submit your cheer in a group of 5, 2 of the best group video submissions can win a trip to the T20 World Cup in Sri Lanka! ‘Cheer for Champions’ can be accessed on a neat and comprehensive Facebook app on the Vicks India page with four tabs – Home, Submit your Cheer, Gallery and About the Anthem. A user who lands up on the Home page can find all about the anthem and what’s in it for him/her. The countdown to the anthem is displayed on a live ticker in terms of days, hours and minutes left. The submission showcase displays a gallery of selected submissions made to the anthem as entries are subject to moderation so as to avoid the use of strong language. You can submit a cheer in whatever way you wish to show your passion – a yell, a scream, a chorus, a song! There are 3 ways to submit your entry: Record through your webcam, Record on audio clip or Upload an audio or video file of not more than 30 seconds duration. You can keep watching the ‘about the anthem’ tab for ongoing developments around the anthem. About the ‘Cheer for champions’ anthem The concept of creating an anthem to cheer for the nation is not all that great but getting your community to join in is. It helps bring in the social aspect into this campaign. Roping in the community to create an anthem, a community song or an ad jingle is the trend now. Its also reminds us of a similar campaign launched in the beginning of this year to salute real life heroes. Hero MotoCorp had launched the ‘Billion Voices’ campaign along with A. R. Rahman, where fans were invited to upload a video with them singing the ‘Hum mein hain hero‘ jingle and get a chance to feature in the final video. Apart from the campaign a new advertisement was released recently ,given the passion for cricket among the Indian users,none other than Virat Kohli was roped in for the advertisement, only this time it was for both Vicks cough syrup as well as for vicks vaporub. Given that Vicks Vaporub is not only used by children but adults as well ,roping in Virat kohli will be another strategic move in promotional mix by including the game cricket in its message. The VapoRub segment in the market is dominated by Vicks VapoRub in India. Vicks commands a market share of over 60% in the cold balm/rub category. This industry is already saturated and Vicks already being a dominant it has few competitors on cold/rub market, mainly zandu balm and Amrutajan. however it has also lost a small amount of share to some of the unbranded products as well. Competitors Its main competitors are Emami’s Zandu balm having a market share of 27% and amrutanjan with 10% share, however the rest of the share is occupied by other branded and un branded competitors. Therefore Zandu balm is our major competitor although Zandu Balm is not meant technically understood as a part of the VapoRub Segment yet because of similar characteristics it does compete with VapoRub products in areas and thus it has to be provided for as a competitor in the VapoRub segment PEST ANALYSIS: Political factor: We all know that ‘OTC Drugs' in common jargon means drugs which are legally allowed to be sold Over the Counter without the prescription of a Registered Medical Practitioner. The term is clumsy and creates a wrong impression about the official status of the drugs. In India, import, manufacture for sale and the sale and distribution of drugs and cosmetics is regulated by the Drugs and Cosmetics Act, 1940 and its subordinate legislation Drugs and Cosmetics Rules, 1945. The phrase ‘Over the Counter' and its abbreviation ‘OTC' preparations have no legal recognition and are better referred to as ‘non-prescription drugs' and/or as ‘household remedies', even if there is any problem with respect to any product of Vicks VapoRub the p&g will take care of it literally.. Economic factors: Factors such as tax increase or fuel price fluctuation will affect the business or allow competition to creep in, However Vicks has tackled such problems in the past by considerably reducing its cost of marketing and distribution. Moreover the loyal customers will still buy it not only because it is comparatively lesser priced but because they know it is quality, best value for price the pay to buy it Social factors: When used as directed, the over-the-counter cold remedy Vicks VapoRub is generally considered to be safe. Mayo Clinic's Dr. Jay L. Hoecker regards Vicks VapoRub as a harmless remedy, but notes a lack of conclusive evidence to support its folk use as a nasal decongestant. The active ingredients in Vicks VapoRub include menthol, camphor and eucalyptus oil, which are natural products associated with few side effects. Nevertheless, Vicks VapoRub may trigger complications if it is used incorrectly. In a January 2009 report, the American College of Chest Physicians cited a case-report involving an 18-month-old girl who experienced near-fatal respiratory problems after inhaling Vicks VapoRub. Technological factor Rate of innovation is very low, since the constituents of the products are more or less similar from the time it had been launched. Sales of Vicks VapoRub mainly depend on advertisements and promotions. These products are used for the cough, headache and throat pain and so the products should be designed very carefully with improved technology. There are various products coming in the market and there are various biotechnologies coming up which is still a nourishing the industry Growth rate According to a survey done by ORG IMS estimate the OTC market in india would show rates of about 10-12%, Of the entire OTC market the segment for cough, cold and fever show the least of about 1%. Marketing mix Vicks VapoRub is a product that has already reached maturity stage of its product life cycle in segment where the industry also has reached maturity stage. The marketing mix during this stage involves efforts to build customer loyalty, typically accomplished with special promotions and incentives to customers who switch from a competitor to our brand. Core Competency: Favorable quality perceptions associated with the Vicks brands. Given the absence of verifiable information that customers can interpret, customers use brands to form inferences about product quality. Vicks’ favorable quality perceptions result from the following cues (each of which are hard for new entrants to mimic): †¢ Age of brand †¢ Market share †¢ Amount of advertising †¢ Your mother rubbing it on your chest Well-established sales force and distribution †¢ Comparative advantage in food distribution outlets and mass merchandisers †¢ Not valuable in segments that shop in other markets Demand information – Cash †¢ But competitors also have cash. Key success factors: Vicks VapoRub has to encash the factors making it competitively superior i. e. (i) safe and effective, (ii) as a product which can be used regularly and has no side effects, (iii) is easier to carry, (iv) has a quick effect, (v) has a external application and thus has no side effects, (vi) is useful for all ages, (vii) is less greasy and smells better (than other products of the same type) . New Market Existing | | | | New Product Existing Product: Product is remained the same for many years with minimal changes, however it should remain to continue the way it is, given below is Ansoff matrix for Vicks s,currently all of the products are doing well with cough drops having 18% growth last year. Vicks VapoRub lies category of Old product and old market. we have to either find methods to increase market penetration at this stage ,mainly we have to concentrate on promotions as well. More over we can find the possibilities of introduction of new product or re-launch of existing product with new product modifications. Vicks offers product for relief from cold and its symptoms through various product forms such as in the form of Vaporub,capsules,Inhaler, Cough Drops, However Vicks was also offered in the form of liquid know as Vicks cough formula 44,However the product failed and it was dropped from Vick’s product portfolio. Hence we have the competency of offering Vicks in the form of liquid as well by relaunching a new product itself once again. On further survey we can judge the feasibility of implementation for such a product. Price: Increased demand from Parma and other consuming industries mainly have been the cause for the recent increase the prices of menthol which is a major ingredient of Vicks Vaporub . The increased prices of Menthol will surely have affect on the cost of production of Vicks Vaporub. Factors such as tax increase or fuel price fluctuation will affect the business or allow competition to creep in, However Vicks has tackled such problems in the past by considerably reducing its cost of marketing and distribution. Moreover the loyal customers will still buy it not only because it is comparatively lesser priced but because they know it is quality, best value for price the pay to buy it. We would recommend Vicks to continue with its current prices, As per our interview with dealers majority of the people who purchased vicks vaporub preferred the 25-ml box costing Rs 45,moreover there was an average sale of atleast 10 boxes per week at places we interviewed . Channel: Vicks VapoRub or for that matter no product of Vicks does not have a separate market channel for itself. All products are marketed by one single marketing channel, organized and regulated by one company namely, Proctor and Gamble Hygiene Products Ltd The commission for the dealer for sale of one product at as per secondary data was found to be up to about 16%,however the dealers we interviewed that they get above 10% We would like to recommend Vicks Vaporub should continue to give the margin of 10%-16% to the dealers. This shall protect them against the inducement of the manufacturers of local and unbranded products to sell their products Promotion: As monsoon rains are already set in and winter about to begin in very soon, Vicks VapoRub must concentrate more on promotions. The primary promotional mix of advertisement through television and radio should be continued along with use of new media such as facebook and twitter for a two way interaction with the consusmers, that also helps in providing feedback to the company as well to measure the results of a particular online promotions or campaign. The recent â€Å"Cheers for Champ† is catching on heat with the T20 world cup around the corner. .