““ALL OUT”ALL OUT”Marketing a Mosquito Repellent

By: Hemant Vyas (MBA)

Background

• Karamchand Appliances Pvt. Ltd. (KAPL)

• KAPL’s Brand ‘All Out’ is a liquid vaporizers.

• Liquid Mosquito Vaporizers is a 4 bn Segment in India with ‘All Out’ having 69% market share in 1999.

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

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

• 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..

• Advertising Avenues- ‘All Out for modern mosquitos’HTA- series of six ads using humor to promote the

product.

• KAPL decided to take the ads on its own Animated Japanese man eating mosquitoes. (costed

Rs.50000)

• Ads on Videocassettes of Hindi Movies- criticism of ‘down-market’.

Contd…

• Cost Effective Ads : Evening news program on FM RadioTest cricket commentary

• Concept of sponsoring song/dance and fight sequences in movies

• 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 Good Knight = 5%.

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%

MAJOR COMPETITORS

MAIN COMPETITORS• Godrej Sara Lee Ltd (GSLL).

Launched a no. of brands all coils-Jet Fighter (1997), GoodKnight Jumbo (1999) and GoodKnight Instant, GoodKnight Smokeless and Jet Jumbo (2000).

• Hindustan Lever Ltd (HLL).Raid and Attack

• Reckitt Benckiser (R&B).Mortein, Mortein King and Mortein Red

OTHER COMPETITORS

• Bombay Chemicals Ltd. (BCL) Tortoise (Coils)

• BayerBaygon Spray, Baygon Power Mats and Baygon Knockout (Sprays and Mats)

• Balsara HygieneOdomos (Creams)

• Tainwala ChemicalsCasper (Mats and Coils)

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 • Entrants like GSLL and R&C emerged as market leaders in mat segment

very soon (heavy advertising and aggressive sales promotion).

• 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% as it expanded 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.

Our target market: Myanmar

REASONS OF EXPANDING “ALL OUT” BUSINESS IN MYANMAR

•India & Burma being part of BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation

•India being 2nd largest export partner of Myanmar (Thailand 52%, India 12.3%, China 8.8%, Japan 4.3% (2008)) and 5th largest import partner with Myanmar.

Myanmar

• 42.9% of Myanmar economy is depended on agriculture and rice being the main crop of the country.

• USA, Canada & EU has put trade sanction with Burma.

• Only 7% of the total population is working in industry sector (Few local brands).

• Burma's health care system is one of the worst in the world (190th, the worst performing of all countries, WHO)

BURMA

• Republic of the Union of Myanmar is a country in Southeast Asia.• Burma is bordered by China on the northeast, Laos on the east, Thailand on the southeast, Bangladesh on the west, India on the

northwest, the Bay of Bengal to the southwest, and the Andaman Sea on the south.

• Total coastline is 1,930 kilometers.

Contd..

• Burma is the 40th largest country in the world and the 2nd largest country in Southeast Asia. Burma is also the 24th most populous country in the world with over 58.8 million people.

• From 1962 to 2011, the country was under military rule and in the process has become one of the least developed nations in the world.

• The military junta was dissolved in 2011 following a general election in 2010 and a civilian government installed.

Contd..

• Burma lies in the monsoon region of Asia, with its coastal regions receiving over 5,000 mm of rain annually. Annual rainfall in the delta region is approximately 2,500 mm with average temperatures of 21 °C.

GOVERNMENT & POLITICS

• The legislature is made up of two houses upper house and the lower house.

• The upper house consists of 224 members of whom 168 are directly elected and 56 are appointed by the Burmese Armed Forces while the lower house consists of 440 members of which 330 are directly elected and 110 are appointed by the armed forces.

• Burma has a high level of corruption, and ranks 176th out of 180 countries worldwide on the Corruption Perceptions Index with a rating of 1.4 out of 10 (10 being least corrupt and 0 being highly corrupt) as of 2010

FORIGN RELATIOS & MILITARY

• Close relations with neighboring India and China with several Indian and Chinese companies operating in the country.

• More than US$200 million in military aid from India Under India's Look East policy.

• Fields of cooperation between India and Burma include remote sensing, oil and gas exploration, information technology, hydro power and construction of ports and buildings.

Contd..• Burma has been a member of ASEAN since

1997. The country imports most of its weapons from Russia, Ukraine, China and India

• Western isolation as USA, Canada & EU has put trade sanction with Burma on the human right issues.

ECONOMY• Foreign investment has so far met with only moderate

success.• The fraction of the population employed in different

sectors is as below: Agriculture:70% Industry:7% Services: 23% (2001)

• GDP by sector Agriculture: 42.9%, Industry: 19.8%, Services: 37.3% (2009 EST.)

Contd..• Burma’s GDP stands at $42.953 billion and grows

at an average rate of 2.9% annually only.• In 2011, when new President Then Sein's

government comes to power, Burma has embarked major policy reforms including

Anti-corruption, Currency exchange rate, Foreign investment laws and taxation.• Foreign investments increased from US$300

million in 2009-10 to a US$20 billion in 2010-11 by about 667 percent

Contd..• The government has relaxed import

restrictions and abolishes export taxes.• After the completion Dawei deep seaport,

Burma is expected be at the hub of trade connecting Southeast Asia and the South China Sea, via the Andaman Sea, to the Indian Ocean receiving goods from countries in the Middle East, Europe and Africa, and spurring growth in the ASEAN region

Industries & Infrastructure• Main industries in Mayanar are: Oil and gas GemstonesTourism• Infrastructure lack of an educated & skilled workforce so lack of

modern technology. lacks adequate infrastructureRailroads are old and rudimentary.Highways are normally unpaved & energy

shortages except in the major cities.

SEGMENTATIONAttributes of segmentation are : Urbanization Availability of electricity• Urbanization: Urban population: 34% of total population (2010) Rate of urbanization: 2.9% annual rate of change (2010-15

EST.)

• Electricity Electricity - production: 5.961 billion kWh (2006 EST.) Electricity - consumption: 4.298 billion kWh (2006 EST.)

Most of total electricity is consumed in urban areas wheremost of the people residing in rural areas rely on solar cells

TargetingWe will be targeting urban population which

consists of 34% of total population. Reasons are:Availability of electricityRural is migrating @ 2.9% every year which is

expected to rise due to:Civil government anti-corruptioncurrency exchange rateFewer than 750,000 tourists enter the country

annually which is expected to rise due to friendly tourism policies.

PESTEL ANALYSIS POLITICAL:

• Government Type : Nominal civilian parliamentary government (took power in March 2011)

• Government Stability : Democracy has achieved after long period of military rule.(49 yrs.)

• Corruption: Ranks 176th out of 180 countries worldwide on the Corruption Perceptions Index.

• Tariffs: FTA with India.• The US does not import anything from Myanmar. Australia and the

European Union have also imposed sanctions on the country, restricting the import of certain products. Myanmar is a member of the WTO, ASEAN and BIMSTEC.

• It shares healthy trade relations with its neighbouring countries, including India, Thailand and China.

ECONOMIC:

• GDP (purchasing power parity): $76.47 billion (2010 est.)

• GDP - real growth rate: 5.3% (2010 est.)

• GDP - per capita (PPP): $1,400 (2010 est.)

• Household income or consumption by percentage share: lowest 10% : 2.8% highest 10% : 32.4% (1998)

• Electricity - production: 6.426 billion kWh (2008 est.)• Electricity - consumption: 4.63 billion kWh (2008 est.)

SOCIAL:

• Population:

-> Urban:34% of total population (2010)-> Rate of urbanization: 2.9% annual rate of change (2010-15 est.)

• Average age: 26.9 years

• Literacy: 89.9%

• Health: Second highest malaria prevalence rate in south-east Asia. (after India).

TECHNOLOGICAL:• Broadcast media:-> 2 state-controlled television stations with 1 of

the stations controlled by the armed forces.-> a third TV channel, a pay-TV station, is a joint

state-private venture; access to satellite TV is limited.

-> 1 state-controlled domestic radio station and 6 FM stations that are joint state-private ventures; transmissions of several international broadcasters are available in parts of Burma.

• Internet users: 110,000 (2009)

ENVIORNMENT:

• Much of the country lies between the Tropic of Cancer and the Equator.

• It lies in the monsoon region of Asia, with its coastal regions receiving over 5,000 mm (196.9 in) of rain annually.

• Coastal and delta regions have an average maximum temperature of 32 °C (89.6 °F).

LEGAL: Allowed business structures in Myanmar:• 100% Foreign Equity• Joint Venture• 100% Local Equity.

• Investment can be done under either foreign investment law or Myanmar companies act.

• Permit to trade or “CA permit” from Government is essential to do business in the country. CA permit is valid for two years from date of issue and is renewable.

Capital Requirements for companies:• Ks 1,000,000 (approx. US$170,000) for an industrial company;• Ks 500,000 (approx. US$84,000) for a trading company; and• Ks 300,000 (approx. US$50,000) for a services company.

• Taxation: (Prior to 2011)

Corporation tax: Resident companies (including Foreign Companies incorporated in Myanmar and companies operating under an FIL Permit) are taxed at the rate of 30% on worldwide income .Myanmar income of Non-Resident companies is taxed at the greater of 35% and progressive rates from 5% to 40%.

Capital gains tax: Gains on the sale of fixed assets of the business in excess of Ks 50,000 in any year are taxable as capital gains at the rate of 10% for Residents (including Foreign Companies incorporated in Myanmar and companies operating under an FIL Permit) and 40% for Non-Residents. Capital losses cannot be carried forward to offset future capital gains.

• But with democratic government in power and FTAs in place, the taxation structure has changed and free trade is allowed between India and Myanmar.

THE 4 P’s

The 1st P: Product

Product features:• Technically Sound: Dependable Japanese

Technology.• Smoke Free, no residue, almost odorless.• Long lasting.• Ease of Use.• Electricity dependent.• No product modification, standard product

will be launched with machine and a refill.

The 2nd P: Price

• Premium Pricing, creating an impression of a premier product.

• Price will be kept at competitive cost of $1.96(Rs.99)/pack of machine and refill, against other market products.

The 3rd P: Place

• Product will be exported from India to Myanmar.

• Distribution channels that are already present in urban and sub urban areas like: Yangon (Rangoon), Mandalay, Naypyidaw, Mawlamyaing, Bago, etc. will be used.

The 4th P: Promotion• Extensive market campaign through : ads in

1. FM Radio2. Print media3. T.V.

4. Ads on public transports like buses, trains, or others. 5. Hoardings. • Adaptation of ads will be done according to the local market

and necessary changes will be made in present Indian ads; that are to be used in Myanmar.

• Free refill pack as promotional strategy will be given to attract customers.

Thank You.