MAKEOVER OF BRITANNIA
Case code-MKTG-006
Published-2001
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A PATH LESS TRAVELLED
DONNING A NEW LOOK- Page1
DONNING A NEW LOOK
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BIL then focused on its core biscuit brands- Marie, Thin Arrowroot, and Milk
Bikis-which faced competition from similarly branded alternatives like Bakeman's
English Marie, Milka Biscuits, and Priya Marie. In order to overcome the
competition, BIL differentiated its brands by bringing them under the 'Eat
Healthy, Think Better' banner and giving them clearly-defined positioning. For
Milk Bikis, targeted at children, BIL launched variants like Milk Bikis Funland,
which were animal-shaped biscuits.
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Marie was renamed Marie Gold,
and positioned as a tea-time biscuit. Thin Arrowroot was renamed Jacob's
Thin, with its position as the low-calorie health biscuit reinstated. In
1999, BIL relaunched
its low-calorie, high-nutrition brands-Thinlite, Cream Cracker, and Digestive
under the Nutrichoice umbrella, targeting the fast-growing health-conscious
segment. BIL seemed to be quick in gauging the rising demand
for products in the impulse category of snacks (e.g. chips and
chocolates). Accordingly, BIL came up with trendier products like Little
Hearts, Pure Magic, and Chekkers, targeting the under-24 urban consumer,
positioning them with statements they identified with.
For example 'Direct Dil Se' for Little Hearts, 'Full Of Taste And Fun' for Pure Magic, and
'For The Ups And Downs In Life' for Chekkers. In 1999, BIL had launched
Snax, a line of ethnic snackfoods using low-fat oils and hygienic
processes, in 3 variants: Calcutta Ka Chana Choor, Bikaner Ka Bhujiya, and
Rajasthan Ka Aloo Bhujiya, with an eye on the almost Rs 1800 crore snack
market in India. In the segment of 'breads' which contributed about 6% of
the company's total revenues, BIL's presence was restricted to a few
cities. |
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In the face of increasing competition,
it decided to strengthen its bread business in the southern states and was
seriously looking for acquisitions and manufacturing tie-ups in that region. It
also planned to leverage the key strength of the daily distribution system of
its bread business in its new ventures like milk.
With a view to boosting volumes, BIL also changed its packaging strategy by
launching biscuits in small sachets. It launched the low-priced sachets, 'Tiger
Tikis-nibblets' priced at Re 1-targetting the mass market. BIL simultaneously
revamped its distribution channels, increasing its retail distribution network
to more than 1.20 million outlets. To increase penetration, more than half of
the new outlets serviced, were in the rural and semi-urban markets-a break from
the past, when BIL's distribution was distinctly skewed towards urban India.
As part of its strategy to reduce its dependence on biscuits, BIL sought to
diversify its product portfolio to include categories that fitted within its
overall objective of transforming itself into a food company. BIL targeted
segments where it had the potential of capturing either the number one or number
two position. Said Alagh, " I am not into pioneering new eating habits. On the
contrary, we want to capture the essence of the Indian consumer. So we will be
entering only those areas which will form part of the daily eating habits of an
Indian home and offer either high volume or high value."
Analysts felt that what BIL had done was to build on the company's already
successful brand. With the basic motto of 'eat the BIL product you like, but
eat,' the company provided the consumer with an option at all times of
consumption (other than the main meals of lunch and dinner). The underlying
philosophy was to provide 'tasty yet healthy' snacks that one could eat and
drink throughout the day, in short, a product for each occasion and for every
consumer.
BIL saw an opportunity in the dairy segment as it had only one large player,
Amul. Its strategy was to build on the strong affinity that Indian consumers had
for milk and milk products in its diary venture. BIL wanted to do in dairy
products what it has done in biscuits: cover all segments. Said Alagh ''As with
other large markets, we will seek to segment the market for dairy products too.
This could mean that our portfolio will include premium brands, with a high
degree of value-addition, as well as popular-priced brands that could add
critical mass.''
BIL entered the dairy segment in 1997 with cheese and milk powder or dairy
whiteners. By 2000, BIL captured about 35% of market share of the cheese market
and 20% in the dairy whitener segment. It launched butter in 1998, flavoured
milk, sub-branded 'zipsip' in tetra packs in 1999 and ghee in February 2000. The
company relaunched its entire dairy business in late April 2000 by bringing it
under the 'Milkman' name. The pricing, communication, package, design had all
been revamped. The word 'flavoured' was dropped from the milk range, as research
had shown that in India, the word 'flavoured,' connoted 'artificial' to
consumers.
BIL's diversification reflected its parent, Danone's portfolio. Ever since it
got control of BIL, Danone had been providing it technology in biscuits and
pastries. Danone's biggest business, dairy products, was the driving force for
BIL's diversification. However, dairy products accounted for a meagre 9% of
BIL's turnover. But BIL hoped that was going to change. Said Alagh, ''In the
next 3 years, we expect new businesses to contribute about a quarter of our
turnover.''
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THE ROAD AHEAD
© ICMR.Global CEO •
December 2003, All Rights
Reserved.
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