Outer Packaging : A Marketing Perspective

Shatakshi Tripathi

Methodology

• Understanding the core functions of the product to ascertain the key marketing criteria

• Understanding customer requirements by means of a survey• Analysis of competitor’s design for the same• Suggesting prospective changes in material and/or design• Designing a marketing campaign

– Analysis of Competitor’s marketing campaigns– Understanding the gaps in present systems– Suggestions for Improvisation

Understanding Key Function

• It has been observed that multiple medicines can be used as a cure for a single disease and a single medicine cures multiple diseases

• However, there is just one USP which drives the maximum sales and hence needs to be advertised the most

• The same data was collected by discussion with the medical cell and taking feedback from the customers.

• This is necessary because if more than one products have exactly the same target market then the sales of either get cannibalized

• Also, the target market has been segmented into Current, Rural and Luxury depending upon the purchasing power and needs-wants-desires of the customers

The Market

• The worldwide Herbal Product Market stands at $80 billion with an expected annual growth rate of 7%

• At this rate, the market is predicted to reach $6 trillion by 2050• The Indian Herbal Market currently stands at INR 4205 Crore with an

export only market of INR 440 Crore• The overall Herbal Market in the nation is expected to reach INR 7000

Crore by 2020• However, the important point to be noted here is that growth factor is

mainly due to Ayurvedic cosmetics, Spas and preventive medications

The Market• Based on the population and purchasing power parity, the market can be

categorized as:– Tier 1,2 and 3 cities– Rural Market– Export Market

• Among these, Tier 2 and 3 cities are the target segments for all the Ayurvedic brands. The reason being– The purchasing power is high– The overall size of population is high– The segment is already educated about the products thus minimizing cost incurred for

positioning

• The export market also has many competitors with the main targets being Central America, Europe and Africa

• The Rural segment however remains unexplored by most• Also, most of the firms have failed to realize the Ayurveda, with its ancient

appeal has a high probability of having market in the luxury segment

PS: Due to inherent limitations of the model, the products will not be exactly defined as the intended name, instead they would be denoted as towards the respective cell.The analysis has been done on the basis of sales data of previous 3 years

The Sandu-BCG Matrix

Arjunarishta

Ashokarishta

Kutjarishta

Vidangarishta

Kumari Asav

Punarnavasav

Gokharu Kadha

Mahamanjishthadi Kadha

Maharasnadi Kadha

Mahasudarshan Kadha

Pathyadi Kadha

Vimfix

Ashwagandharishta

Khadirarishta

Saraswatarishta

Chandanasav

Drakshasav

Kankasav

Sarivadyasav

Ushirasav

BK 1,2,3

Hemocleen

Punarnavadi Kadha

Rasnasaptak Kadha

Spa Oils

Makarprash

Gulkand

All other Asavas, Arishtas and

Kadhas

This is because the products are selling on the fulfillment of need and do not have

any differentiating characteristic

The Strategies

• The dogs and stars are cash neutral by nature and hence no investments needs to be done to promote their sales.– The stars can be left to flourish with the current market strategies and

quality standards– The dogs can be divested of if the need be since they are barely if

meeting their break even

• The cash cows however have scope for improvement– To increase the market share of these products, there are two strategies

which we can follow• Either maintain the current portfolio and push all the products• Increase our sales around one or two products by defining them as our USP• Dabur, Zandu, Himalaya and Charak follow this strategy where 75-80% sales of

each come from 2 or three products and the rest of the portfolio accounts for remaining sales turnover

Need-Want-Desire

• We will however follow a combination of the two strategies by categorizing our products on the basis of– Need: (Stars and Dogs)

• This segment will contain the products for low income groups and the those who have multiple similar competitors in the market

• For this segment, the product only will matter and competition would be more on quality and price basis

– Want : (Cash cows)• This category would include products which mainly focus on the preventive

segment of diseases• People will be ready to pay a premium for the proven results of good quality

medicine

– Desire: (Cash Cows)• This will include products such as Hemocleen and Spa Oils for which people will

be ready to pay premium and will be categorized as luxury items• The packaging of such products will have to be totally revised to suit the luxury

segment criteria

Packaging: Why and Where

• Packaging for any company defines its image, an attractive and durable packaging means the Company keeps up with the time

• It is for this reason that Packaging is now a fast growing industry, growing at the rate of 15% annually (Source: AC Nielsen)

• According to the research conducted by RNB, customers are ready to pay premium for the products if they are packaged well

• However, the same varies with the industry with maximum premium for packaging being paid for Foods and FMCG products

• In our context, we would categorize the cash cows into Preventive and Curative and define separate strategies for each

Underestimating the cost of packaging will reduce the profit margin!Overestimating may make your product less competitive especially when your item is less differentiated from other s in the market place!!

Packaging Improvements

• The Products have been categorized as

Preventive

• Tej Ras• Saraswatarishta• Hemocleen• Makarprash• Chyawanprash• Ashwagandharishta• Gulkand

Curative

• Khadirarishta• Chandanasav• Drakshasav• Kankasav• Sarivadyasav• Ushirasav• Balant Kadha 1,2,3• Punarnavadi Kadha• Rasnasaptak Kadha

Packaging Improvements

• One of the major constraints that was faced in packaging improvement was that most of the products are syrups and hence need to be transported in Glass bottles as per FDA regulations

• This restricts the packaging change to changed visuals• An alternative to this can be conversion of syrups into soft gel capsules and

transporting the same• This would in addition to offering the option of attractive packaging will

also ease out on transportation for e-commerce. Example of some such futuristic packaging are:

The Current Market: Sample Images

Saraswatarishta: Since it is a brain tonic for familyQuote: क्यूं��की� दि�माग़ सब लगाते� हैं�

Tej Ras: Since it is a brain tonic for childrenQuote: क्यूं��की� ते�ज़ दि�माग़ की� नीं�व

बनींते� हैं� बचपनीं मा�

Makarprash: Immunity Booster

The Current Market: Sample Images

Chyawanprash: Since it is for Wholesome improvement of body

Ashwagandharishta: Since it fights fatigue

Hemocleen: The revised image is good. However a caption can be added: अब

त्वच रहैं� स्वस्थ naturally!!

Gulkand: The image and look of the bottle is perfect

While analyzing the competitors, it was a common observation that the bottles are always in the packaging of outer cartons. This mainly reflects the reputation of the company and give the impression of the company doing well (showcased in its willingness to spend on packaging) against one which sells bottles directly

The Current Market: Sample Images

Khadirarishta: Curative for skin disorders

Chandanasav: for urinary tract infection

Kankasav: For strong lungs; curative for bronchial asthma and cough

It was observed that many medicines target one broad category however the same has not been mentioned specifically in description. It would be useful to mention the differences clearly on the website and or description on labels so that there is no cannibalization

The Current Market: Sample Images

Balant Kadha 1: 1st to 10th day from delivery

Balant Kadha 2: 11th to 20th day from delivery

Balant Kadha 3: 21st to 30th day from delivery

These images are given in the visual aids, usage of these on the label will help the customer relate to the product better

The Current Market: Sample Images

Rasnasaptak Kadha: To denote the various muscular pains the medicine is effective in

Luxury Market: Sample Images

Alternative packaging for Makarprash and Gulkand eco-bliss packs; consumes less storage space and attractive design saves customer from tearing hasslesThe material can be kept same as the current packaging minus the packaging board

Since Hemocleen’s effectiveness has been proven clinically; using the same as the USP of marketing campaign, the product can be launched in the luxury cosmetic segment.Since black, silver and gold represent luxury, the designs can be done as exemplified aboveThe glass in the above image (first one) can be reduced according to the bottle size with a special marking on it showing the dosage. The quantity in the bottle should also be equivalent for one treatment period of 1 month.For the second example, owing to FDA regulations, the shape can be changed with the color pattern as given and printing done on glass

Luxury Market: Sample Images

Spa Oils, will always come in the luxury segment because of the consumer perception of them. It is hence advisable to showcase the luxury of these brands in its packaging itself.Also, the possibility of preparing oils which can be used directly at home (like hair oil, body oils) should also be explored

The first thing that needs to be accounted for is the ease of usage. Opener caps like the ones illustrated above give a smart, innovative and easy option for the same

The products that will be packaged like this will cater to a comparatively lower price

segment. The tagline for the same can be “Affordable Luxury”

Luxury Market: Sample Images

Spa Oils can be packaged in long slender glass bottles with cork tips. The color for the bottle can be kept black with text in gold to project an image of luxury

The tagline for this range of products can be “The Ayurvedic Experience”Illustrations are given below:

The cork caps will give an archaic feel of Ayurveda being an ancient therapy, giving it a differentiated outlook hence placing it directly in the luxury segment

The sleek designs of caps illustrated in previous slides can be used for the lower price segment. These should be available at the super markets and NOT retail shops

PS: We need to remember that Spas are perceived as luxury!

Why Rural

• Rural is not just villages; it is any area that is non-urban or non-highly urban. A rural area is which has– A population of less than 5,000– Density of population less than 400 per sq km and– more than "25 per cent of the male working population" is engaged in agricultural

pursuits.

• 68% of Indian population still lives in rural areas which implies that 68% of the Indian Population is still untapped

• Another astonishing factor of concern is that the rural market is expected to grow at 25% annually

• This market is price sensitive but quality conscious which makes it a profitable target for SBPL

Rural Market: The Products to Endorse

Diseases in Rural India

Bacterial Diarrhoea

Hepatitis

Typhoid

Tuberculosis

Japanese Encephalitis Malaria

Rabies

Filaria

Kala-azar

Dengue

The above list has been compiled from Common diseases in Rural India andWHO Report. The green ones indicate the diseases which the firm has treatment for

Rural Market: The Products to Endorse

Name of Medicine Positioning

Arogavardhini Gutika Jaundice, Hepatitis

Berbenterone SyrupDiarrhoea, Dysentery,

Bacterial Infection

Bilagyl Ulcers, Abdominal Pain

Draksharishta Cough, Asthma, Tuberculosis

Krumikuthar Rasa Worm Infection

Mahanarayana Tel Strengthens muscles and joint

Dashmoolarishta Post delivery for mothers

Gokharu Kadha Kidney Stones

Lohasav Anemia, Chronic fever

Shatari Inadequacy of mother’s milk

Ashwagandharishta Erectile Dysfunction

Abhayarishta Constipation

Based on the analysis, the products to be endorsed in the market along with their USP to be marketed are as under

The same has been done based on the pricing and preference of rural people to spend money on

Rural Marketing: The Way Ahead

• The first thing that attracts anyone is the packaging of the material kept in the shop.

• Surveys support the fact that people belonging to rural areas have a preference towards bright colors and simplistic packaging

• Also, owing to the poor literacy rate, visuals and colors will be the major source of identification of the said medicine

• To differentiate these products from the rest of our products, we can use a distinct color scheme for the packaging

• Also, maintaining a constant color scheme for all the products will help the consumers identify our products distinctly from others

• Sample for one such packaging is shown in the next slide

Sample for Rural Market Packaging

Mahanarayana Tel

Name of Medicine (Local Language)

Rural Products: Sample Images

Arogavardhini Gutika: Since Jaundice and Hepatitis are diseases of the Liver

Berbenterone Syrup: Diarrhoea Dysentery and other Bacterial stomach infections

Draksharishta: Cough, Asthma and Tuberculosis

Rural Products: Sample Images

Mahanarayana Tel: For strong bones and muscles

Dashmoolarishta: Revitalizing tonic for women post delivery

Gokharu Kadha: For Kidney stones

Rural Products: Sample Images

Lohasav: Mainly for anaemia, other uses include for chronic fevers

Shatari: Treatment for inadequate milk in lactating mothers Ashwagandharishta:

for erectile dysfunction and other problems related to male reproductive organs

Abhayarishta: Constipation

E-Commerce: Packaging Solution

Available Options

Thermocol Inflatable Bags STOROpack Airplus 16

Drop Test Result

Fail: (Thermocol breakage and damage to the bottle cap)

Fail: (Impact on the glass bottle base on successive drops)

Pass:(No damage to both packaging and bottle; checked with multiple bottles in single outer packaging)

Drop Test Conditions: Drops from a height of 1 meter along 6 different edges. 2 drops with projectile motion

Detailed Calculations and Cost ComparisonsMicrosoft Office Excel Worksheet

E-Commerce: Packaging SolutionFixed Cost 4500Cost of Rolls 37500Total Cost 42000     No. of Packs/Roll 2000     Cost/bottle 450 ml 200ml 100mlPacks per Bottle 4 2 1No. of bottles/roll 500 1000 2000No. of bottle monthly 2500 5000 10000Cost/Bottle 16.8 8.4 4.2Cost of outer Packaging 5 3 2Total Cost/Bottle 21.8 11.4 6.2

Location Mumbai Maharashtra/Goa/Gujarat Others

Min. Order 600 800 1200Service Tax(12.5%) 10.1 10.1 10.1Fuel Surcharge( 34.5%) 20.7 20.7 20.7Payment Gateway 11.1 14.8 22.2Cost of courier (max=2 kg) 60 60 60Cost of Packaging 35 35 35Net Contribution 343.1 499.4 812.0% Contribution Margin 59.4 62.5 65.5% Contribution Margin 79.4 82.5 85.5

49.4 52.5 55.5

The Push-Pull Phenomenon

• The Current Practice– A dedicated sales team which pushes the products through doctors and

retailers• The model is followed by all the healthcare firms.• The limitation to this model, as could be seen from the feedback form of

Sandu Anniversary Function is that many doctors are left out• Also, the big question is

How effective will this push system be if 5-6 people convince a doctor to buy their product?According to a survey, an average doctor gets 8-10 Medical Representatives per day!

The Push-Pull Phenomenon: Current Market

• From the data available, Sandu Pharmaceuticals Limited has participated in 6 events and 15 medical camps. Most of these Medical Camps were free

• In 2015 there have already been 11 events, 2 promotional campaigns and 1 beauty pageant in which SPL has participated

• The way ahead should be to document and analyze the data of these events to ascertain the ones we can do away with

• We need to determine top 3 lead generators and participate in them only• All of these events have been in areas where SPL foothold is already

strong and hence we need to move beyond them• Also, the free medical camps, though a good CSR initiative, do not

generate revenue. Also, due to presence of other brands, the consumer attention gets divided.

• SPL should organize camps on its own to get the desired publicity• Quarterly conference for Doctors and/or Medical Students can also be

organised

The Push-Pull Phenomenon: Rural Market

• Research has proved that the most effective form of advertising in rural areas is through regional dramas.

• By this unconventional marketing, we can generate audience at throwaway prices by utilizing the local artists. A list of such art forms is as under

• SPL should also look forward to a collaboration with the Ayush Ministry to organize camps in villages so as to get funding in addition to advertising the products.

The Push-Pull Phenomenon: Luxury Market

• A research by Parker and Pettijohn analyzed 25 Pharma companies which advertised for their products in 2005 and after a year, the result reported the sales to have grown up by 43%

• Merck alone registered a sales growth of 300% in Viox after advertising for it

Serial Name Channel Time Slot Product to be advertised Cost per 10 sec TRP of ad

Sath Nibhana Sathia Star 7-8 P.M. Hemocleen 42942 7.9

Yeh Rishta Kya Kehlata Hai Star 12-3 P.M. Sandu Spa and Oils 12053 6.2

Sasural Simar Ka Colors 7-8 P.M. Hemocleen 24761 5.8

Chakravarti Samrat Ashoka Colors 8-10 P.M. Makarprash 35122 5.5

Tarak Mehta ka Ulta Chashma Sab TV 7-9 P.M. Gulkand 17198 5.4

If we want to increase the reach of our products, the right advertising mix is a must!However, there is an alternative which will do the same at lesser price but the reach will be restricted as well (discussed in next slide)(The data given above supports the fact)

The Push-Pull Phenomenon: Luxury Market

• The products should be positioned as luxury and sold through High end retailers and supermarkets

• Invitation of conferences organized by SPL to be given to the exclusively higher income group

• Articles by the doctors of the firm should be published in the English newspapers

• Most importantly, since a Managing Director is the face of the firm, Sir will have to build himself as a brand by– Maintaining his own blog and advertising it– Participating in guest lectures as a speaker

Questions are Welcome!