The Tasty Bite Story

The Turnaround Story Contd...

Even with a narrower base of natural food store chains, it was difficult for PBI to pay $ 10,000 to each of the 200 stores it had shortlisted. To overcome this problem, the company undertook a cluster analysis study⁵ in various US cities and generated a demographic profile⁶ of the customers they needed to concentrate on. The company found that its potential customer's age group was between 25-54, with average earnings of $ 75,000 a year. This helped the company narrow its focus and reduce its list of stores from 200 to 80.

This reduced the amount of payments to be made to stores from $ 2 million to a more manageable $ 800,000.

A smaller list of stores also led to a more focussed distribution strategy. Unlike other Indian food companies, PBI worked very hard to offer its customers products beyond pickles, spices and papads.⁷

The company thus decided to launch a wider range of products specifically targeted towards local US customers.

After some intensive research, it decided to launch the Tasty Bite range in the $5 billion natural food category⁸ through mainstream retail chains in the US.

PBI also began advertising through sweepstakes⁹ at the retail level and in-store demonstrations, thus enhancing awareness and encouraging customers to experiment. This also helped in lowering advertising costs significantly. The company also focussed on increasing the Americans' understanding of Indian food.

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5] Cluster Analysis is an analytical statistical technique that arranges research data into mutually exclusive and
collectively exhaustive groups (or clusters) where the contents of each cluster are similar to each other, but different
to the other clusters in the analysis.

6] Demographic Profile is based on the age, gender, life-cycle stage and occupation of consumers.

7] An Indian side dish generally made of black gram flour.

8] The natural foods category consists of products that are minimally processed and are free from artificial ingredients,
preservatives and other chemicals that do not occur naturally in food.

9] Sweepstakes includes any procedure in which a person is required to purchase something, pay something of value
or make a donation as a condition of awarding a prize or receiving, using, competing for, or obtaining information about
a prize.

Case Details

Case Code : MKTG015
Themes: Turnaround Strategy
Case Length : 6 Pages
Period : 1986-2001
Organization : Tasty Bite Eatables Ltd, HLL
Pub Date : 2001
Teaching Note : Available
Countries : India
Industry : Food, Beverages & Tobacco

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