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Tic Tac Presentation

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Tic Tac Presentation

  1. 1. Tic Tac Project Objective – To provide the way-forward for Tic Tac to be the category leader in the wholesale channel Saurabh Gupta Kelley School of Business, Indiana University (Under the guidance of – Mr. Nikhil Singh)
  2. 2. Agenda
  3. 3. The Approach Summary 2 3 4 5 Understand the wholesale market Design a Questionnaire for the wholesalers Visit wholesale markets across south India Collate and analyze findings, recommend Design an approach for market research Step 1 Step 2 Step 3 Step 4 Step 5
  4. 4. The Approach Step 1 Visit the local wholesale market to understand the tricks of the trade
  5. 5. The Approach Step 2 Prepare a holistic approach comprising of multiple aspects to proceed
  6. 6. The Approach Step 3 Page 1 of 4 Design a questionnaire for market research Visible Reachable Visible Visible Reachable Reachable
  7. 7. The Approach Step 3 Page 2 of 4 Design a questionnaire for market research
  8. 8. The Approach Step 3 Page 3 of 4 Design a questionnaire for market research
  9. 9. The Approach Step 3 Page 4 of 4 Design a questionnaire for market research
  10. 10. The Approach Step 4 <ul><li>Chennai – Main Wholesale Market </li></ul><ul><li>Chennai – Tambaram, Triplicane, Vadapalani </li></ul><ul><li>Madurai – Main Wholesale Market </li></ul><ul><li>Theni – Feeder Market </li></ul><ul><li>Cochin – Main Wholesale Market </li></ul><ul><li>Hyderabad – Begum Bazaar </li></ul><ul><li>Hyderabad – Monda Market </li></ul><ul><li>Mumbai – Masjid Bandar </li></ul><ul><li>Pune – Nanapeth, Ravivar Peth </li></ul>125 shops across 7 cities Visit wholesale markets across south India and Mumbai/Pune – 125 shops Hyderabad Chennai Pune Mumbai Madurai Theni Cochin
  11. 11. The Approach Step 5 Recommend Collate and analyze findings; recommend the way forward..
  12. 12. Sample size : 125 wholesalers across 7 cities Wholesale Segmentation – The Universe Wholesale Categorization 1. Confectionery (predominantly) 2. Confectionery and Food Products 3. Confectionery and Other Products
  13. 13. Wholesale Segmentation – The Universe 1. Confectionery (predominantly) % of wholesale shops
  14. 14. Wholesale Segmentation – The Universe Other Products Sold Average Price Range of Confectionery Products 50 paisa – Rs.2 Rs.5 – Rs.10 1. Confectionery (predominantly)
  15. 15. Wholesale Segmentation – The Universe 2. Confectionery and Food Products 3. Fake Products 2. Local Food Products 1. Popular Branded Food Products % of wholesale shops
  16. 16. Wholesale Segmentation – The Universe Average Price Range of Confectionery Products 50 paisa – Rs.2 Rs.5 – Rs.10 Food Products – Distribution Distribution of ‘ Confectionery and Food Products’ 2. Confectionery and Food Products
  17. 17. Wholesale Segmentation – The Universe 3. Confectionery and Other Products 1. Personal Care 2. Cigarettes / Tobacco 3. Premium Products / Gift Items % of wholesale shops
  18. 18. Wholesale Segmentation – The Universe Other Products – Distribution Average Price Range of Confectionery Products 50 paisa – Rs.2 Rs.5 – Rs.10 Distribution of ‘ Confectionery and Other Products’ 3. Confectionery and Other Products
  19. 19. Competitor Landscape – What’s Working For Them?
  20. 20. Polo SKUs MRP: Rs.100 Unit MRP: Rs.5 Number of Units: 20 MRP: Rs.96 Unit MRP: Rs.2 Number of Units: 48 MRP: Rs.98 Unit MRP: Rs.2 Number of Units: 49+1 Flavors <ul><li>Mint </li></ul>MRP of all SKUs is less than / equal to 100!
  21. 21. Polo Availability 77% overall availability – regardless of SKU Which SKU Sells More? Rs.5 Rs.2 Key take away: Half the shops that stock Polo prefer keeping ONLY Rs.2 Polo jars/packs! Shops that sell both SKUs sell Rs.2 SKU more SKU(s) Availability (% of the overall universe) Rs.5 48% Rs.2 73% Both 35% SKU(s) In the shops that stock Polo Only Rs.2 46% Only Rs.5 7%
  22. 22. Polo Visibility 62% of the shops that stock Polo have Facings of >2 boxes/jars Facings Category Visibility In the shops that stock Polo Good 23% Medium 57% Bad 20% Visible Reachable Visible Visible Reachable Reachable Good Medium Bad Visibility defined by –
  23. 23. Polo * Average Across Regions Distributor Price Retailer Price MRP <ul><li>Regular scheme – 5% of sales (+additional 2-4% for sales more than Rs.10000) </li></ul><ul><li>For retailer – Plastic box free on 3 refill boxes of Rs.5 Polo </li></ul><ul><li>For retailer – 1 free unit (49+1) on Rs.2 Jar (additional 2% for retailer) </li></ul><ul><li>Nestle Products – Gifts on 2 lakh sales </li></ul>Margins Schemes Rs.5 Margin* Wholesaler 4% Retailer 22% Rs.2 Margin* Wholesaler 5% Retailer 16%
  24. 24. Polo What’s Working?
  25. 25. Orbit SKUs <ul><li>Spearmint </li></ul><ul><li>Mixed Fruit </li></ul><ul><li>Winterfrost </li></ul><ul><li>Sweet Mint </li></ul><ul><li>Lime </li></ul><ul><li>Peppermint </li></ul>MRP: Rs.120 Unit MRP: Rs.5 Number of Units: 24 MRP: Rs.180 Unit MRP: Rs.30 Number of Units: 6 Mixed Fruit Peppermint Sweet Mint * 62 shops Most Sales - by flavor Flavors Spearmint Winterfrost Mixed Fruit Lime Sweet Mint Peppermint
  26. 26. Orbit Availability 56% overall availability – regardless of SKU Key take away: 97% of the shops that stock Orbit prefer only Rs.5 SKU Which SKU Sells More? Rs.30 Rs.5 Shops that sell both SKUs sell Rs.5 SKU more SKU(s) Availability % of the overall universe Rs.5 56% Rs.30 3% Both 3%
  27. 27. Orbit Visibility 87% shops that stock Orbit have facings of >2 Best in the category! Facings – In the shops that stock Orbit Key take away: Over 80% of >2 facings, driven entirely by the presence of multiple flavors Category Visibility In the shops that stock Orbit Good 33% Medium 51% Bad 16%
  28. 28. Orbit Margins * Average Across Regions Distributor Price Retailer Price MRP <ul><li>No current scheme </li></ul><ul><li>Earlier scheme – Scratch card (Rs.5/10 coupons) on every MRP Rs.120 paper box </li></ul><ul><li>Earlier scheme – IPL tickets/Rs.100 coupon on 20 cartons (20 paper boxes) </li></ul><ul><li>Display – Rs.500 (for 6 months) for displaying complete range of flavors </li></ul>Orbit - Rs.5 Orbit - Rs.30 Schemes Rs.5 Margin* Wholesaler 4% Retailer 17% Rs.30 Margin Wholesaler 2% Retailer 17%
  29. 29. Orbit What’s Working?
  30. 30. Orbit Wrigley’s Display Contest – Pune, Hyderabad
  31. 31. Mentos SKUs <ul><li>Mint </li></ul><ul><li>Orange </li></ul><ul><li>Watermelon </li></ul><ul><li>Strawberry </li></ul><ul><li>Lime’n’Lemon </li></ul>Strawberry Mint * 77 shops Most Sales - by flavor MRP: Rs.100 Unit MRP: Rs.5 Number of Units: 20 MRP: Rs.150 Unit MRP: 50 paisa Number of Units: 300 MRP: Rs.82.5 Unit MRP: 50 paisa Number of Units: 165 MRP: Rs.57.5 Unit MRP: 50 paisa Number of Units: 115 Flavors
  32. 32. Mentos Availability All shops with Rs.5 SKU stock 50 paisa SKU too! Which SKU Sells More? 50 paisa Rs.5 70% overall availability – regardless of SKU Key take away: Again, 40% shops that stock Mentos prefer keeping ONLY a 50 paisa SKU SKU(s) Availability % of the overall universe 50 paisa 70% Rs.5 25% Both 24% SKU(s) In the shops that stock Mentos Only 50 paisa 40% Only Rs.5 2%
  33. 33. Mentos Visibility Facings – In the shops that stock Mentos 73% shops that stock Mentos have facings of >2 Key take away: Over 70% of >2 facings, driven entirely by separate jars for every flavor Category Visibility (% of shops that stocked Mentos) Good 26% Medium 52% Bad 22%
  34. 34. Mentos Margins * Average Across Regions Distributor Price Retailer Price MRP <ul><li>Rs.5 SKU – No scheme. 50 paisa – Rs.2 off/jar (HYD) </li></ul><ul><li>Rs.82.5 Jar – 1 Pen free/jar(additional 11% for retailer) </li></ul><ul><li>Rs.150 Jar – 20 pieces of Orange free on Lime jar, and vice versa (additional 10%) </li></ul><ul><li>Rs.500 Jar – 100 piece of Mentos Strawberry free/jar (additional 7% for retailer) </li></ul><ul><li>Earlier scheme – Buy 25 cases (16 jars), get an ensured 1 gram Gold Coin </li></ul>Mentos - 50 paisa (MRP Rs.82.5 SKU) Mentos - Rs.5 Schemes 50 paisa Margin* Wholesaler 3% Retailer 15% Rs.5 Margin Wholesaler 3% Retailer 15%
  35. 35. Mentos What’s Working?
  36. 36. Happydent SKUs <ul><li>White </li></ul><ul><li>Wave </li></ul>MRP: Rs.150 Unit MRP: Re.1 Number of Units: 150 MRP: Rs.160 Unit MRP: Rs.10 Number of Units: 8 MRP: Rs.100 Unit MRP: Rs.5 Number of Units: 20 MRP: Rs.115 Unit MRP: Re.1 Number of Units: 115 Flavors
  37. 37. Happydent Availability Availability of all SKUs is Poor, especially that of Rs.10 Which SKU Sells More? Re.1 Rs.5 44% overall availability – regardless of SKU SKU(s) Availability % of the overall universe Re.1 40% Rs.5 24% Rs.10 3% Both Re.1 and Rs.5 20% SKU(s) In the shops that stock Happydent Only Re.1 18% Only Rs.5 6%
  38. 38. Happydent Visibility Highest ‘Bad’ visibility among the competitors Visibility = Poor! Facings – In the shops that stock Happydent Key take away: 60% shops have facings >2, but sample size is too small to conclude anything Category Visibility In the shops that stocked Happydent Good 23% Medium 52% Bad 25%
  39. 39. Happydent Margins * Average Across Regions Distributor Price Retailer Price MRP <ul><li>Regular scheme – Rs.2 off/jar (HYD) </li></ul><ul><li>For retailer – 5 Centerfresh free on Wave jar (additional 4% ) </li></ul><ul><li>For retailer – 1 Reynolds pen free on White jar (additional 5%) </li></ul>HD (White) - Re.1 HD - Rs.5 HD (Wave) - Re.1 Schemes Re.1 (White) Margin* Wholesaler 3% Retailer 14% Re.1 (Wave) Margin Wholesaler 4% Retailer 15% Rs.5 Margin* Wholesaler 7% Retailer 11%
  40. 40. Happydent What’s Working?
  41. 41. Tic Tac – Where It Stands
  42. 42. Tic Tac – Where It Stands 60% of Tic Tac monthly sales of >Rs.5000 driven by ‘Confectionery and Food Products’ shops Sample Size: 75 wholesale shops across 6 cities Sales (monthly) by Wholesale Type 57% of the universe 22% of the universe 21% of the universe Confectionery (predominantly) Confectionery and Food Products Confectionery and Other Products
  43. 43. Tic Tac – Where It Stands Availability In the shops that stock Tic Tac – regardless of the SKU Which SKU Sells More? Key take away: 78% shops that sell both Intro and T12 sell more Intro because of low price Based on wholesalers’ responses T12 Availability – In Perspective Key take away: Confectionery products’ availability decreasing with increase in unit price % of the universe SKU Availability In the shops that stock Tic Tac Only Intro 58% Only T12 8% Both 38%
  44. 44. Tic Tac – Where It Stands Visibility Intro’s visibility (92%) slightly better than that of T12 (85%) Facings T12 Intro Key take away: Intro driving Tic Tac’s visibility. T12 visibility (>2 packs) not impressive enough 65% facings of >2 Packs 91% facings of >2 Jars Category Visibility Intro Visibility T12 Good 41% 30% Medium 51% 55% Bad 8% 15%
  45. 45. Tic Tac – Where It Stands Visibility (Good / Medium) – In Perspective Key take away: Tic Tac’s visibility in general is good, but there is room for improvement Visibility in % Brand
  46. 46. Tic Tac – Where It Stands Key take away: Sales increase with an increase in visibility, and especially, facings! Effect of Visibility on Sales >Rs.20001 Rs.10000-Rs.20000 Rs.5001-Rs.10000 Intro sales – by facings T12 sales – by facings >3 Jars 2-3 Jars 1 Jar >5 Packs 2-5 Packs 1 Pack
  47. 47. Margins Margins – In Perspective * Average Across Regions Distributor Price Retailer Price MRP Tic Tac – Intro Tic Tac – T12 Tic Tac – Where It Stands Wholesaler Retailer Key take away: Tic Tac’s retailer margin is among the best in the category Tic Tac’s wholesaler margin among the worst in category Intro Margin* Wholesaler 3% Retailer 18% T12 Margin Wholesaler 2% Retailer 20%
  48. 48. Recommendations
  49. 49. Recommendations <ul><li>Examples – </li></ul><ul><li>@Chennai Shop - Rs.2 Sunfeast sales fell by 70% due to Re. 1 price increase </li></ul><ul><li>@Hyderabad Shop - Rs.5 Kit Kat sales fell by 50%, due to Re. 1 increase </li></ul><ul><li>Similar stories of Parle Magic, Bonker </li></ul>Sunfeast packs/month @Chennai Shop Price 50 paisa- Rs.2
  50. 50. Recommendations A SKU of Rs.180 is good, but another smaller SKU will assist in more trade penetration Average Jar Price (MRP) in wholesale Average Number of Units/Jar Price – Jar
  51. 51. Recommendations Price – Jar Another advantage of a smaller SKU – gets more visibility!
  52. 52. Recommendation Flavors Product <ul><li>Introduce a new flavor – Strawberry </li></ul><ul><li>Example – </li></ul><ul><li>Big wholesaler @Chennai - 70% of Mentos sales (Total Sales of Rs.1,00,000) comes from Strawberry flavor. Mint sales was only 23% (Rs.23,000) </li></ul>Mentos Sales - by flavor Orbit Sales - by flavor Strawberry Mint Mixed Fruit (popular in the market as Strawberry) Sweet Mint Peppermint *Based purely on the wholesalers’ replies; this is NOT company data
  53. 53. Recommendations Individual Packs/Jars – separate jars for flavors Product <ul><li>Introduce new individual pack/jar of most selling flavor(s) and test the market </li></ul>Mentos – Mint Unit Price: 50 paise Mentos - Strawberry+Lime, Mint Unit Price: Rs.5 Mentos - RAINBOW all but Mint Unit Price: Rs.5 <ul><li>Mint and Orange account for 55-60% of Tic Tac sales </li></ul><ul><ul><li>Mint-only Jar </li></ul></ul><ul><ul><li>Orange-only Jar </li></ul></ul><ul><ul><li>Assorted Jar </li></ul></ul>Tic Tac - Chennai Offtake Local confectionery
  54. 54. Recommendations Individual Packs/Jars Product <ul><li>Small wholesaler might buy only the popular pack(s) </li></ul>Potential Risk Facings >2 <ul><li>Every Orbit flavor gets a dedicated shelf space, increasing overall brand visibility </li></ul>
  55. 55. Recommendations Packaging Product <ul><li>Tic Tac Intro jar should be made transparent / translucent </li></ul><ul><li>Transparent jars critical from retailer’s viewpoint; 12 out of 18 retailers opined </li></ul><ul><ul><li>Retailer knows when to buy next </li></ul></ul><ul><ul><li>Small Intro boxes are attractive and would be more visible to end consumer </li></ul></ul>
  56. 56. Recommendation Packaging Product <ul><ul><li>No surety about the way retailer would display the jars in the shop </li></ul></ul>
  57. 57. Recommendation Packaging Product <ul><li>Example - Mentos jar caps were changed from colored to transparent caps </li></ul>
  58. 58. Recommendations Promotion <ul><li>Current retailer margin competent vis-à-vis competitors - No recommendation </li></ul><ul><li>Current 2% wholesaler margin should be improved (Polo Rs.2 margin is 5%) </li></ul>Wholesaler / Retailer Margins Schemes – Facings <ul><li>Number of facings is Critical – an average 80% facings of >2 recommended </li></ul><ul><li>Long-term schemes of Rs.500/month for continued display of ALL jars/flavors </li></ul>
  59. 59. Recommendations Promotion <ul><li>Little space available in wholesale, so a hanging solution is recommended </li></ul><ul><li>Additional Rs.500/month can remarkably improve visibility even in cluttered wholesale shops </li></ul>Schemes – Hanging Solution
  60. 60. Recommendations Promotion Schemes – Free Units <ul><li>At least 2 free units in every Intro jar – 5% additional margin for retailer </li></ul><ul><li>Average additional margin for retailer due to free units ranges from 4%-17% </li></ul><ul><li>‘ FREE’ word important, even if it means compromising on wholesaler margin </li></ul>5 units free MRP: Rs.130 Addn Margin: 4% 26 units free MRP: Rs.150 Addn Margin: 17% Rs.10 pen free MRP: Rs.100 Addn Margin: 10% Rs.10 pen free MRP: Rs.82.5 Addn Margin: 12%
  61. 61. Recommendations Promotion Improved focus on the target segment Who Is The End Consumer – Tic Tac Small Sample Size - 18 retailers across 6 cities Most children do NOT ask for a specific flavor <ul><li>Social Media – Facebook, YouTube </li></ul>
  62. 62. Questions?

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