AIMING FOR THE 'AHA EFFECT'

CASE STUDY

…CASE ABOUTAkbar Iqbal’s terms for joining as country headof Tomaiki Foods:• Look at India as an opportunity to grow a

category• Look at the bottom of the pyramid• Not transfer products from its existing portfolio

Create an ‘AHA effect’

5-FORCES MODEL• Rivalry :

Large Indian companies (growing from SMEs)MNCs Indianised

• New entrantsNew MNCsSMEs

• SubstitutesUnorganized sector

• BuyersHuge market at the ‘Bottom of the pyramid’Growing rural marketSmaller towns

• suppliers

SYMPTOMS, PROBLEMS, ISSUES?• Symptoms:– Success stories abound:• Sauces market growth post Nestle’s entry• Rasna • Haldiram • Papads – Lijjat• Potato chips – Uncle Chipps• Masalas – MDH, Everest• Pastes• Pickles – Nirlon, Badekar, Priya

PROBLEMS?• MNCs & large Indian companies not looking at the

prospects• Risk averse• Merely looking at adapting existing products• Not taking the effort to understand the consumer• Inadequate Marketing Research techniques to

understand the consumer• Consumer resistance to change to learn how to

adopt new kitchen appliances• No serious attempts to develop appropriate

technologies

ISSUES?

• Offer Indian consumers something to create an ‘AHA effect’

• ‘Made for India’ strategy

OT SWOT

•LAGS NOS. (B.O.P.)•FEW BRANDS•LOW PENETRATION OF EXISTING ONES

•LOW PURCHASING POWER•TIME NO CONSTRAINT•COMPETITION•SMEs•LACK OF INFRASTRUCTURE

TOWS SW

OT

• GLOBAL BRANDS•HUGE RESOURCES•PROFESSIONALISM

•MINDSET OF MNCs•INAPPROPRIATE MR•‘THINK SMALL

•LAGS NOS. (B.O.P.)•FEW BRANDS•LOW PENETRATION OF EXISTING ONES

•LOW PURCHASING POWER•TIME NO CONSTRAINT•COMPETITION•SMEs•LACK OF INFRASTRUCTURE

SO SW

OT

•GLOBAL BRANDS•HUGE RESOURCES•PROFESSIONALISM

•MINDSET OF MNCs•INAPPROPRIATE MR•‘THINK SMALL”

•LAGS NOS. (B.O.P.)•FEW BRANDS•LOW PENETRATION OF EXISTING ONES

•NPD•Educate consumers•Discover unmet need

•LOW PURCHASING POWER•TIME NO CONSTRAINT•COMPETITION•SMEs•LACK OF INFRASTRUCTURE

OW SW

OT

•GLOBAL BRANDS•HUGE RESOURCES•PROFESSIONALISM

•MINDSET OF MNCs•INAPPROPRIATE MR•‘THINK SMALL”

•LAGS NOS. (B.O.P.)•FEW BRANDS•LOW PENETRATION OF EXISTING ONES

•NPD•Educate consumers•Discover unmet need

•MR TECHNIQUES•ENTREPRENEURIAL APPROACH•MNC MINDSET

•LOW PURCHASING POWER•TIME NO CONSTRAINT•COMPETITION•SMEs•LACK OF INFRASTRUCTURE

ST SW

OT

•GLOBAL BRANDS•HUGE RESOURCES•PROFESSIONALISM

•MINDSET OF MNCs•INAPPROPRIATE MR•‘THINK SMALL”

•LAGS NOS. (B.O.P.)•FEW BRANDS•LOW PENETRATION OF EXISTING ONES

•NPD•Educate consumers•Discover unmet need

•MR TECHNIQUES•ENTREPRENEURIAL APPROACH•MNC MINDSET

•LOW PURCHASING POWER•TIME NO CONSTRAINT•COMPETITION•SMEs•LACK OF INFRASTRUCTURE

•OFFER VALUE•PPP•USE UNCONVENTIONAL MEDIA

WT SW

OT

•GLOBAL BRANDS•HUGE RESOURCES•PROFESSIONALISM

•MINDSET OF MNCs•INAPPROPRIATE MR•‘THINK SMALL”

•LAGS NOS. (B.O.P.)•FEW BRANDS•LOW PENETRATION OF EXISTING ONES

•NPD•Educate consumers•Discover unmet need

•MR TECHNIQUES•ENTREPRENEURIAL APPROACH•MNC MINDSET

•LOW PURCHASING POWER•TIME NO CONSTRAINT•COMPETITION•SMEs•LACK OF INFRASTRUCTURE

•OFFER VALUE•PPP•USE UNCONVENTIONAL MEDIA

•START FROM RURAL•EDUCATE

TOMAIKI’S STRENGTH

• Global brands• Resources:– Capital – R&D

• Professional competence:– Experience in other markets– NPD competence

IMPLICATIONS

• Risk taking ability• Backed by:– Resources– Knowledge– Innovative skills– Experience across markets

SO

• Capitalize on the huge potential at the ‘Bottom of the Pyramid’ thru’ NPD

• Educate consumers to use existing cooking devices & products

THUS… Markets

Opportunities

Small towns Rural

•Extending usage of cooking products/devices

•Demo & education to encourage-Usage of modern cooking appliances-Adapting recipes--ingredients for cooking

•Demo & education to adapt existing products/services

•New product development •New recipes•Developing RTCs•Ingredients for cooking

•Innovations: - appropriate technology - products

RESEARCH ON FOOD HABITS

• 1971 & 1981 Mrs. Goodyear, BMRB research• 1984 MBA-Gallop research on processed

foods

FINDINGS: GALLOP

Mothers pestered by their children seeking:1. Taste2. Variety 3. Convenience 4. Creativity

SUCCESS STORIES

• Maggi noodles, Fryums…• MDH, Everest masalas, pastes

• Not ready to eat foods, which even today has very little acceptance

1990s TO DATE SUCCESSES

• Haldiram’s namkeens• Kurkure• Bingo

RISE OF SMALL TOWNS IN INDIA2008 of Ernst & is report• Significant consumptions expenditure of KUT*

vis-à-vis the metros• Increasing affluence levels with a larger relevant

consumer base• Increasing reach of retail & malls• Increasing reach of media & favourable media

consumption patterns*key urban towns

TOMAIKI’S SCAs

• Pre-emptive move• Differentiation • Building brand ‘Resonance’

TOMAIKI INDIA STRATEGY IMPLEMENTATION

• CEO • Organization • Staffing • Evaluation & control

TOMAIKI INDIA CEO CHARACTERISTICS

• Characteristics will be the that of a diversification manager

• CEO should also have the characteristics of going to Stage II, which is managing functional along with entrepreneurial organization

ORGANIZATION

• New people will have to be recruited• Structure will initially be entrepreneurial• But we will have to plan for a quick transition

to Stage II organization structure, moment the first product gets launched

STAFFING

• Initially we need a strong conceptual task force

• When product is identified & company is in a position to launch, we need to go in for a functional structure, hence manpower has to suit the requirement of:– Functional organization– Skunk works for NPD

EVALUATION & CONTROL

• Evaluation systems have to put in place to evaluate performance of new products