1. Victor Brand
An Analysis by
IIMC - SMP 06
Hyderabad

2. Company Overview Established in 1989 as Victor India Ltd (VCIL)
Manufactures cocoa-based products – mainly chocolates
In 1993, noting underutilization, rented its production facilities to an MNC for 10 years
In 2000, 42% of VCIL’s turnover came from processing charge earned from MNC while remaining 58% came from selling its products
Launched cocoa based milk beverage brand “Victor” in 1996
Due to low sales, initiated a brand building program in 2000 contracting Elite Consulting Co (ELCC)
“Victor” brand re-launched as “Victor Plus”
In spite of the program, the brand could not break even

3. Product Suite Consumer Industrial VCIL Product Type Cocoa-based
Beverage
Consumer
Industrial
Chocolates
Semi processed
Victor Plus
Moulded
Enrobed
Eclair
Cocoa mass
Cocoa butter
Cocoa powder
Choc’te
mass
Inputs

4. Value Chain … … … VCIL ASO1 ASO2 VCIL
250 distributors of products spread over 18 Area Sales offices across the country
25,000 active retail outlets (Nestle & Cadburys’> 100,000 outlets)
Marketing & Distribution Structure
Ex. Director (Mktg)
VCIL
Corp Office
Bangalore
Marketing Mgr …
Area
ASM1
ASM2
ASO1
ASO2 SR SR
SuperStockist
Comm: 06%
Cost Structure
Region
VCIL
Service
General
Production
Corp
Disti 1
Disti 2 …
Comm: 06%
works with
ASM – Area Sales Manager
ASO - Area Sales Office
SR – Sales Rep
Retail Outlet 1
Retail Outlet 2
Retail Outlet n …
Comm: 12%

5. Beverage Market Table 1: Major players in Market (1996)
In 1996, when Victor was launched, many strong established players existed in the market – Cadbury’s India, Nestle, Smithkline Beecham (SB), Heinz’s, Amul (Table 1)
ELCC Study findings
Household segment - 60%; Institution segment – 40%; No differentiated product offerings
Most milk beverage consumption – children (6-16 yrs) with family income Rs. 10,000/- pm
Most consumers prefer white beverages (therapeutic benefits) over brown beverages (taste)
Each family consumes on an average gm of the product;
Brand loyalty is low – except for Horlicks and Bournvita
Very few consider Victor as a national brand and have not placed it in consideration set
Blind taste tests have brought out positive evaluation towards Victor
Table 1: Major players in Market (1996)
Table 2: ELCC Study (Brand Evaluation) – Weighted Attributes
Player
Brands
Brand Position
Cadbury’s
Bournvita
Established
Nestle
Milo SB
Horlicks, Boost, Viva, Maltova
Key player
Heinz’s
Complan
Amul
Not a key player

6. Victor Plus Product Features Other ELCC Recommendations
Granular versus Powdery (Victor)
Nutrition: Better ingredients
Packaging: New label and color combination (maroon, blue, yellow, red and white)
Marketing: New Positioning Statement over Victor – “The tasty and nutritious cocoa drink with Milk”
Other ELCC Recommendations
Variant of Victor for Institutional segment
Less price than Victor, less nutritious than Victor Plus
Target – Vegetarian restaurants, Juice Parlors

7. Implementing ELCC Recommendations
Brand Promotion
Increased Sales Promotion + Advertising spend in 2000 over 1999
For Year 2000:
Advertising channels not considered: Magazines, and Television (high tariff cost)
Advertising channels considered
Northern and Western States: “Victor Plus” Sponsored Cultural and Sports Events for the year in 100 good schools in B class towns
Four Southern States: Newspaper ads in 1 English and regional newspaper
For Year 2001:
Considering advertising through popular magazines in South, West, and North regions

8. TOWS Matrix Threats Opportunities Weaknesses Strengths
Brand appeal of competitors taking up shelf space in retail outlets
Brands such as Horlicks and Bournvita have effective brand-building programs
Bournvita and Boost modified their packaging by adding more color to graphics
Celebrity endorsement – Sachin Tendulkar for Boost – to sustain market share
Horlicks relying on nutrition – heavy advertising targeting housewives and children
In 2000, SB spent 7% of total sales on advertising
Opportunities
Can target new markets – by targeting the products for Middle Income Groups;
Can create a Niche Product aimed at people beyond 60 years of age with high nutrition content OR zero calorie drink, etc.,
Leverage leadership advantage by advertising the differentiated product offering for Industrial segment launched by VCIL ;
Weaknesses
Retailers didn’t stock Victor Plus due to lack of brand appeal and visibility
Less leverage with retailers and distributors in spite of lower price and better incentive system;
Victor Plus not considered as a national brand;
Strengths
Victor and Victor Plus are priced lower than most competing brands
Attractive Commission Policy
Price advantage arising out of better bargaining power with cocoa farmers
Air of vibrancy and dynamism at the beginning of 2000 – ELCC engagement and industry veteran Srinivasan appointed as Ex Director (Mktg)
Distribution strengths in B and C class towns

9. Strategy Recommendations
Short-term (1 years)
1. Continue to focus on the industrial segment and contract manufacturing business;
2. Continue focusing on keeping Production costs lower by leveraging farmer relationships and higher production capacity utilization
3. Product Ingredients: Increase the nutrition content in the Product like its chocolate drink competitors such as Bournvita, Boost;
4. Brand Positioning: Position “Victor Plus” as a tasty choco / health drink (depending on the chosen customer segmentation)
Bring out the other ingredients such as “Vitamins”, “Glucose” in packaging and advertisements
Target housewives and children
5. Television and magazines create broader brand appeal and visibility. Leverage these channels of advertising
Leverage celebrity talent to create brand appeal and retain market share

10. Strategy Recommendations… Contd
Small lots of ‘Victor Plus’ for MIGs and first users;
Long-term (2-3 years)
Maintain its strong distribution footprint in B and C Class cities;
Expand the distribution network in A and A+ class cities;
Have good advertising campaigns and brand endorsements;
Market Penetration;
Have niche segments;
Modified version of Victor brand for industrial consumers like restaurants;
Diversify into “white” beverages (5 years)