Case: ‘All Out’- Marketing a Mosquito Repellent.

Background

Karamchand Appliances Pvt. Ltd. (KAPL)

KAPL’s Brand ‘All Out’ is almost a generic name for liquid vaporizers.

Liquid Mosquito Vaporizers is a 4 bn Segment in India with ‘All Out’ having 69% market share in 1999.( Result of conversion of large no. of customers to vaporizer users).

KAPL managed to wrest market share amidst stiff competition from corporate giants like Godrej Sara Lee Ltd (GSLL) and Hindustan Lever Ltd (HLL).

Indian market profile: With 255 species of mosquitoes believed to be

responsible for spreading diseases like malaria & dengue fever; India has a large and growing market for mosquito repellents.

Common methods: traditional methods, Creams, Coils, Mats, Sprays, Vaporizers.

Anyhow the use of mosquito repellents in India was fairly low:

Table 1:

Table 2:

Urban Areas Metros Rural Areas

% of households 16.4% 22.6% 6.9%

Segments Mats Coils Vaporizers

Market Value 51% 21% 7%

Competitive Profile in the mosquito repellent segment:

Product Category

Company Name Brand Name Year of launch

Coils Bombay Chemicals Ltd. (BCL)

Tortoise 1970

Sprays and Mats

Bayer Baygon Spray, Baygon Power Mats and

Baygon Knockout

Creams Balsara Hygiene Odomos

Mats and Coils Tainwala Chemicals

Casper

Coils Godrej Sara Lee Ltd. (GSLL)

Jet FighterGoodknight JumboGoodknight Instant

Goodknight SmokelessJet Jumbo

19971999

2000

Contd…….

Product Category

Company Name Brand Name Year of launch

Mats Godrej Sara Lee Ltd. (GSLL)

Banish

Aerosols Godrej Sara Lee Ltd. (GSLL)

Hit

Chalks Godrej Sara Lee Ltd. (GSLL)

Hit Lines

Lotion Godrej Sara Lee Ltd. (GSLL)

Mosfree

Spray Godrej Sara Lee Ltd. (GSLL)

Hexit

Mats & Coils Reckitt & Coleman (R&C) MorteinMortein KingMortein Red

Coils Hindustan Lever Ltd. (HLL)

RaidAttack

Company Brand 1998 1999 July 2000

GSLL GoodKnight 45 43 51

GSLL Jet 13 18 14

GSLL Banish 4 3 2

R&C Mortein 9 12 15

HLL Raid 4 7 4

- Others 25 17 14

Total 100 100 100

Company Brand 1998 1999 July 2000

GSLL GoodKnight 0 0 12

GSLL Jet 18 20 17

R&C Mortein 30 33 33

HLL Tortoise 37 28 20

- Others 15 19 18

Total 100 100 100

COILS - MARKET SHARE (VOLUMES)

MATS - MARKET SHARE (VOLUMES)

Category Market Share (in %)

Year 1996 1999

Mats 63 38

Coils 27 46

Creams 5 3

Vaporizers 5 13

Total 100 100

Category Market Share (in %)

Year 1996 1999

All Out 55 69

GoodKnight 40 21

Baygon 0 9

Jet 5 1

Total 100 100

MOSQUITO REPELLANT MARKET :

VAPORIZER MARKET SHARES :

Points to be noticed in the data given in the tables:

The new entrants like GSLL and R&C , with the strategy of heavy advertising and aggressive sales promotion emerged as market leaders in mat segment very soon after entering the market.

But the point to be noted here is that while other companies concentrated on the coils and mat markets, KAPL was focused on the promotion of vaporizers.

By mid 1990’s, vaporizers attained a market share of 5% dominated by KAPL whose sales reached Rs.153 mn. GSLL couldn't ignore this and launched GoodKnight vaporizer in 1996-97.

GoodKnight soon acquired a 40% market but this did not affect the sales of KAPL because instead of eating up ‘All Out’s’ sales ended up expanding the vaporizer market.

But GoodKnight couldn't sustain its success and by 1999, the brand’s market share went down to 21%- a major portion of the 19% taken up by All Out.

The growth of ‘All Out’: KAPL’s promoters: Arya brothers.

Anil, Bimal and Naveen Arya. (winners of ‘Marketing Persons of the Year’ award at the 2000 A&M awards).

Background of Arya Brothers. Formation of KAPL. KAPL’s technical collaboration with Japanese

manufacturers. (Earth Chemical Co. Ltd.: A part of the $8 billion Otsuka Group).

Earth’s refusal to transfer the technology for the manufacture of the vaporizer.

Product development began (with certain imports) at Baddi in Himachal Pradesh in 1989.

Brand Name Decision: ‘Freedom’ / ‘Choo Mantar’

Commissioning of well-known packaging unit in Hyderabad. After a delay of 6 months ‘All Out’ was finally launched in April,1990 in Mumbai.

Contd.. Slow pick up of sales (as April was a lean month

and mosquito repellants are more in demand during rains).

Advertising: Agency Avenues came up with a baseline, ’All Out for modern mosquitos’. Arya brothers lost patience after 6 months and the advertisement account shifted to HTA who released a series of six ads using humor to promote the product. However the Arya brothers still were dissatisfied as they thought that they were paying too much for the ads, but the ads lost out on what the brand wanted to say.

KAPL decided to take the ads on its own and then launched the animated Japanese man eating mosquitoes. (the ad costed only Rs.50000 to KAPL).

Ads on Videocassettes of Hindi Movies- criticism of ‘down-market’.Anil’s reply: ‘cost a fraction due to around 20 duplications of videocassettes in grey market.

Contd…

Cost Effective Ads : Use of evening news program on FM Radio and test cricket commentary on state owned AIR. On TV KAPL preferred to sponsor news programs rather than costly and more conventional soaps or game shows like KBC.

Concept of sponsoring song/dance and fight sequences in movies on many satellite TV channels like SitiCable and Doordarshan.

The above strategy resulted in the brand attaining a very high mind-share amongst consumers.Share of Voice (SOV) for All Out = 31% , whereasSOV for GoodKnight = 5%.

Pricing: High price to cover the cost of expensive

components purchased from Matsushita Electronics.

Later reacting to market sentiments the price was reduced by increasing the in house manufacturing of components.

All Out’s pricing and sales promotional Offers:Product/

Model/OffersPrice (Rs) Year

Cord Model 225 1990

Cord Model 135 1994

Pluggy 90 1995

Twin Pack (pluggy+cord)

135 1996

Deadly Offer (pluggy+refill)

99 1998

Deadly exchange Scheme

27 1999

Pricing by the competitors:

GSLL while struggling to maintain its MS launched a 60-night refill pack priced at Rs.63.(against All Out’s 45-night pack at Rs.54).

GSLL had to support this new scheme using promotions.

GSLL MS decreased by 9.3% after KAPL’s ‘Deadly Exchange Scheme’. Further reduction of price by GSLL had little effect on its decreasing sales.

Distribution Network: Of the 9 lacs outlets across the

country that sold repellants, KAPL was available in only 18% (120 distributors).

Percentage of outlets:R&C – 55%GSLL- 54%

Thus KAPL started working towards increasing its presence.

Future Prospects of the Indian Mosquito Repellent Market:

Industry Experts expected the IMR market to grow rapidly in the early 21st century due to the following reasons:Improvement in literacy in rural areas

Improvement in health consciousness in rural areas.

Low per capita usage of repellants (scope)

Hampered Growth: Reasons1. Health Hazard: Increased concern over harmful effects on

health of the chemicals used in MRs. Allethrin was reported to be very dangerous,

potentially harmful to eyes, skin, respiratory tract and the nervous system.

Industrial Toxicology Research Center showed that rats suffered brain, liver and kidney damage after the prolonged exposure to liquid mosquito repellants.

Research in Sweden and USA also showed that prolonged usage of Allethrin products could cause brain cancer, blood cancer and deformity of fetuses.

2. Doubts about the efficacy of LMRs: Malaria Research Center found out

that none of the leading brands provided 100% protection against mosquitoes.

193 out of 653 households surveyed in 8 cities complained of various health problems linked to LMR’s. (breathing problems, headaches, eye irritation, skin rashes, suffocation, ithcing, bronchitis, cold and cough, asthma, nausea, throat and ear pain).

Of the 286 doctors questioned, 50% reported cases of acute toxicity due to use of LMRs.

Specific Complaints against All Out

Severe criticism of the 2001 ad claiming about extra MMR.

Dr. V. Raghunathan, Director (Central Insecticide Laboratory) said that the as tried to prove that MMR was a wonder substance which would kill mosquitoes but in the packaging there was not mention of it. Extra MMR extra Allehtrin or extra Toxin

Criticism of other aspect of Ads: People were unhappy about the brand’s ads before every song, dance , fight sequence. Repetitive ads of an established brand is not advisable.

KAPL’s competitors were large multi-product companies whereas KAPL remained as a single product company.

The large companies had financial strength to sustain long and costly ads and promotional campaigns.

In such a scenario it is difficult for marketers to predict the span of market leadership of brand ‘All Out’.

Questions for Discussion:

1. Analyze the reasons behind the success of All Out, commenting separately on the attention paid by KAPL to each element of the marketing mix. Why do you think players like GSLL were not being able to compete with All Out?

Soln: The main reason for All Out’s success was its balanced handling of the marketing mix. Now we analyze its success and competitive edge with respect to the elements of the marketing mix.

The 1st P: Product

Pioneer Effect: First of its kind. Technically Sound: Dependable

Japanese Technology. Smoke Free, no residue, almost

odorless. Long lasting. Ease of Use.

The 2nd P: Price Premium Pricing, creating an

impression of a premier product. Flexible pricing to accommodate

market sentiments. KAPL was proactive with its flexible

pricing strategy. It set a trend in the process. GSLL followed it up with a similar strategy. (Goodknight’s 60-night refill pack priced at Rs.63 in response to All Out’s 45-night pack at Rs.54.)

The 3rd P: Place GSLL and R&C were multi-product giants

whereas KAPL was a newcomer with a single product. Hence the former companies (before launching vaporizers) already had well established distribution networks.

The only P in which KAPL was behind its major competitors was “Place”.

Of the 9 lacs outlets across the country that sold repellants, KAPL was available in only 18% (120 distributors).

Percentage of outlets:R&C – 55%GSLL- 54%

The 4th P: Promotion The ads of All Out were unique and

immediately caught the imagination of the masses.

The ad had high mind recall. Since KAPL themselves handled the

account the advertisement cost was quite low.

Other strategies:1. Hindi Movie Video Cassettes2. FM Radio3. News Program Sponsors4. Movie Song/Dance/Fight Sequence sponsoring on satellite TV Channels.

The 5th P of Packaging

KAPL paid special attention to the packaging details of its product. It commissioned a well known unit in Hyderabad to ensure that its packaging was of high quality.

Few points about the competitors

GSLL and R&C were followers in this segment right from the start.

GSLL even came up with a similar pricing strategy as All Out (Good Knight’s 60 night refill pack against All Out’s 45 night pack.)

2. In the light of intensifying competition and allegations of “toxic hazards” in the mosquito repellant industry, do you think All Out would be able to maintain its success in the future? What steps can the company take to ensure that its market share does not suffer? Give reasons to support your answer.

Soln: All Out has faced stiff competition to establish itself in the market.Through its efforts it has garnered considerable customer loyalty.The one glitch it faced was in the toxicity parameter.

The Mosquito repellant industry has a perennial double edged sword hanging over it. On one side there exists the peril of deadly mosquitoes from which protection is extremely necessary and on the other hand their lurks the danger of toxic emissons.There exists a very thin line between these two.

All Out made for itself a concrete position in the market. It would not be an easy task for the competitors to put All Out out of the race. The way out for All Out is to work further on its R & D and lessen the toxic composition of its product keeping the good properties intact.Definite steps in this direction will surely put All Out back on track.

To maintain its market share All Out must implement the above suggested changes and communicate this to the public through ads, something along the lines of Cadbury (the DairyMilk worm case).

This will consolidate the image of All Out in the public’s mind.It can emerge a leader in this section as well by implementing the changes before anyone else does as this toxicity problem is an industry wide phenomenon.This will give it an edge over its competitors.

Also it should revise its advertising strategies making its ads less mundane and more exclusive.

These are the steps that will put All Out back in the game.

Thank You.