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

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Case All Out- Marketing a Mosquito Repellent.
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Background

• Karamchand Appliances Pvt. Ltd. (KAPL)
• KAPLs 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).

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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

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Competitive Profile in the mosquito repellent
segment
Contd.
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(No Transcript)
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MATS - MARKET SHARE (VOLUMES)
COILS - MARKET SHARE (VOLUMES)
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MOSQUITO REPELLANT MARKET
VAPORIZER MARKET SHARES
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Points to be noticed in the data given in the
tables

• The new entrants like GSLL and RC , 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 1990s, 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 Outs sales ended up expanding
  the vaporizer market.
• But GoodKnight couldn't sustain its success and
  by 1999, the brands market share went down to
  21- a major portion of the 19 taken up by All
  Out.

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The growth of All Out

• KAPLs promoters Arya brothers.
• Anil, Bimal and Naveen Arya. (winners of
  Marketing Persons of the Year award at the 2000
  AM awards).
• Background of Arya Brothers.
• Formation of KAPL.
• KAPLs technical collaboration with Japanese
  manufacturers. (Earth Chemical Co. Ltd. A part
  of the 8 billion Otsuka Group).
• Earths 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.

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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.
• Anils reply cost a fraction due to around 20
  duplications of videocassettes in grey market.

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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 , whereas
• SOV for GoodKnight 5.

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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 Outs pricing and sales promotional Offers

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Pricing by the competitors

• GSLL while struggling to maintain its MS launched
  a 60-night refill pack priced at Rs.63.(against
  All Outs 45-night pack at Rs.54).
• GSLL had to support this new scheme using
  promotions.
• GSLL MS decreased by 9.3 after KAPLs Deadly
  Exchange Scheme. Further reduction of price by
  GSLL had little effect on its decreasing sales.
  

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Distribution Network

• Of the 9 lacs outlets across the country that
  sold repellants, KAPL was available in only 18
  (120 distributors).
• Percentage of outlets
• RC 55
• GSLL- 54
• Thus KAPL started working towards increasing its
  presence.

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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)

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Hampered Growth Reasons

• 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.

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• 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
  LMRs. (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.

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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 brands ads before every song,
  dance , fight sequence. Repetitive ads of an
  established brand is not advisable.

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• KAPLs 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.

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Questions for Discussion

• 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 Outs 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.

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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.

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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.
  (Goodknights 60-night refill pack priced at
  Rs.63 in response to All Outs 45-night pack at
  Rs.54.)

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The 3rd P Place

• GSLL and RC 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
• RC 55
• GSLL- 54

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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 Cassettes
• 2. FM Radio
• 3. News Program Sponsors
• 4. Movie Song/Dance/Fight Sequence sponsoring on
  satellite TV Channels.

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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.

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Few points about the competitors

• GSLL and RC were followers in this segment right
  from the start.
• GSLL even came up with a similar pricing strategy
  as All Out (Good Knights 60 night refill pack
  against All Outs 45 night pack.)

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• 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.

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• 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.

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• 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 publics 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.

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Thank You.