Promotion Plan

Product and Brand Management Page 1

Praxis Business School

Assignment on

PROMOTION PLAN

For

LIGHTWEL MATCH COMPANY

A report

Submitted to

Prof. S. Govindrajan

In partial fulfilment of the requirements of the course

Product and Brand Management

On 28 October 2009

By

Atul Saboo (B08005)

Sourabh Dhariwal (B08033)

Tarun Daga (B08039)

Uma Balakrishnan (B08041)


Table of Contents

INTRODUCTION ................................................................................................................................. 3

POSITIONING PLATFORM................................................................................................................... 6

PROMOTION MIX IN NEW MARKETS.................................................................................................. 7

BTL ACTIVITIES ............................................................................................................................... 8

Flex Boards .................................................................................................................................. 11

Glow Signs ................................................................................................................................... 14

MASS MEDIA ................................................................................................................................... 16

Radio ........................................................................................................................................... 16

TRADE & SALES PROMOTION ........................................................................................................... 18

POP Materials .............................................................................................................................. 18

Free Matchboxes ......................................................................................................................... 20

PROMOTIONS IN NORTHERN REGION.............................................................................................. 21

Flex Boards .................................................................................................................................. 21

Glow Signs ................................................................................................................................... 22

At Kirana Stores ........................................................................................................................... 22

Dispensers ................................................................................................................................... 22

Free Samples ............................................................................................................................... 23

WEB 2.0........................................................................................................................................... 24

Viral Marketing ............................................................................................................................ 24


INTRODUCTION Match Industry in India

Matchbox production can be seen to have started before 1900. As a result of government assistance

and rebates, the industry witnessed the mushrooming of small-scale match companies. In a matter

of 50 years, this sector overtook established mechanized match companies, by foraying into

specialty matches, apart from the existing regular matches.

Company Background

Lightwel Match Company was established around 60 years ago. It concentrated on specialty matches

like

• Wax-coated matchsticks

• Book matches

• Festive matches

They set up two plants in northern India which enabled entry into mass production of matchboxes.

Being the largest Indian match company, Lightwel’s main competitors were small scale

manufactures in northern India.

Case Information

� Product: Matchbox

� Need/Want: Light and/or heat

� Problem: Declining sales

� Government Policy: Support for small scale industry

• Reduced excise duty

• Capacity expansion

� Physical Nature: Low cost but bulky

The space matchboxes occupy, vis-à-vis other products of similar offering with respect to

cost, is high.

� Value/Volume: From a retailer’s point of view, a matchbox occupies unnecessary space and

the margins or the value from sale proceeds is less. As a result it becomes transport

sensitive. Due to this, retailers are not concerned about the stock status.


CASE INSIGHTS

Brand Awareness and Usage Levels:

Brand Conversion Ratio

Four Aces 0.33

Chetak 0.15

Snowax 0.23

Inferences:

• 61% of the respondents are aware of Four Aces but only 33% convert to sales. When

compared with competitor Black Bird (Small) which has a conversion ratio of 130%, it shows

us that retailers push the latter though consumers are not highly aware of the brand

• There is low correlation between Brand Awareness and Usage. Therefore, this implies that

the following is a Low Level of Involvement (LOI) product and it is not necessary that people

buy the brand for which they display top-of-mind recall

Stocking Patterns of Retailing:

Brand Reporting Stocking Observed Stocking Difference

Four Aces 93 74 19

Chetak 41 28 13

Snowax 40 37 3

Inferences:

The variances between the reported and observed levels of stock signify the following for the

retailer:

• He does not bother which brand he has in stock and whether he has it or not

• Cost of stock-out is low for the retailer as a commodity like matches does not provide

enough revenue or rotation to stock high amount of the product. This is also corroborated

by the fact that it occupies more space and provides low margins as compared to products

like cigarettes or similar items


• Since the retailer is the one who primarily decides the brand which most consumers

purchase, it is more convenient for him to stock those one or two brands which provide him

higher margins

Transactions Observed at Retail Outlets:

Brand

Bought

Asked for

Brand

Picked out

Brand

Took Brand

given by

Shopkeeper

Asked by

Price

Asked for

Brand; Not

available,

did not buy

Total

Four Aces 29 9 68 3 2 111

Chetak 6 4 16 2 0 28

Snowax 24 1 0 0 4 29

Inferences:

• Served market share is as high as 72.84% in segment 1, which indicates that the impact of

advertising is high in segment 1

• There is ambiguity in the 2nd

segment as to if retailer shows the brands or does a consumer

goes and sees and chooses a brand. Merchandising plays a very critical role in choosing a

brand

• In segment 3, served market share is only 26.33% which shows that the Retailers do not pick

Lightwel Matches when they are the decision makers

• In segment 3, availability becomes necessary condition but retailer margin becomes

necessary and sufficient condition

• Segment 1 and Segment 5 are most critical due to the fact that they concentrate on Brand

Awareness and Brand Loyalty respectively


POSITIONING PLATFORM

Positioning 1

• Irrespective of weather, season and climate, LMC is the best brand of matches

• RATIONALE: � 1/3

rd of respondents in the study feel it to be of superior quality

� Sale of LMC matches have been higher during wet seasons

Positioning 2

• LMC matches cater to all segments of society

• RATIONALE:

� It could be women needing it to light stoves or to light incense sticks during morning

prayers

� There are a large number of temples India who would be using matches for

lighting incense and lamps

� There is a large section of population which cannot get through the day without a

cigarette or the Indian beedi

� It is observed that a substantial quantity of purchase is done by users of traditional

stoves or chulas. This would include the large number of dhabas one sees lining the

entire network of highways connecting India

The advertisements for this positioning cannot be done directly in case of paan shops and kirana

stores where we aim to attract the attention of smokers. Hence, advertising in the form of social

messages will be used.


PROMOTION MIX IN NEW MARKETS

For a product like Lightwel matches, it is important that we know the geographic locations

where we would like to concentrate. Matchsticks as a category are a commodity. The

differentiating factor with Lightwel matches is that they are resistant to humidity. Due to

this, our focus for promotional activities will lie on places along the coast as well as places

experiencing prolonged monsoon periods.

Demographic segments include:

Maharashtra Andhra Pradesh

� Mumbai � Nellore

Karnataka � Guntur

� Udipi � Vishakapatnam

� Mangalore � Vijaynagaram

Kerala Orissa

� Cochin � Ganjam

� Kozhikode � Bhubaneswar

� Ernakullam � Balasore

� Trivandrum West Bengal

Goa � Kolkata

Tamil Nadu � Kharagpur

� Kanyakumari Meghalaya

� Tanjore Tripura

� Puduchery

� Kanchipuram

� Chennai

The above mentioned cities are divided into two categories:

• Tier 1 cities which constitute Chennai, Kolkata, Mumbai, Vishakapatnam, Bhubaneswar and

Goa

• The remaining cities constitute Tier 2 cities

On the basis of the nature of the product, the following promotional tools would be used.


BTL ACTIVITIES

Billboards

Identification of Target Audience

It s important to determine who our target audience is and where they are located.

• We will be setting up billboards in all Tier 1 and tier 2 cities. The exposure will be where the

primary target segments are available i.e. housewives and smokers. Hence, the billboards

will be placed near the entrances of busy market areas and mandis of the cities. Also, they

will be put up outside railway stations

Promotion Objective

• The objective behind this is to increase visibility and awareness of the brand

Rationale

• The number of footfalls of housewives and women at the market areas are higher, especially

in mandis. If they visit the market for daily or even weekly shopping, the size of the hoarding

itself will attract eyeballs

• The placement at railway stations will also be at the entrance and/or exits so that the

floating population has a glance at the billboard

• The hoardings are so placed because they are by nature a below-the-line (BTL) tool of

promotion and will focus on visibility rather than encouraging purchase by the

consumer/viewer

Promotion Budget

This budget is a projection for one quarter after which the hoardings will be removed. This is

because initial brand awareness would have been created and we can concentrate on other

promotional activities, so as to increase sales.

Particulars Size Rate/ Sq Ft

Sq Ft

Quantity No Of Cities

Total Projected for 3 Months

Tier 1 Cities

25’*15’ 80 375 5 6 900000

3847500

Tier 2 Cities

25’*15’ 30 375 2 17 382500

1282500


Design



Flex Boards

Flex boards are inexpensive and attractive displays. They are also tougher and more durable as

compared to cloth banners. The costs stand at Rs 10-11 per sq ft of flex.


• These will be set up at temple entrances close to the small shops which sell customized puja

thalis

• They will also be placed alongside paan shops and mom-and-pop kirana stores

Promotion Objective

• The objective behind this is to increase visibility and awareness of the brand

• To create sticky eye-balls

Rationale

• Temples attract ladies who are the major consumers of matches within households. Visits to

temples, especially crowded ones where they wait for a while before entering, will be the

right place where the board must be placed. Since it is smaller in size, flex boards are not as

expensive as hoardings and still gather attention

• Flex boards placed in the proximity of paan shops and kirana stores will attract the eyeballs

of smokers. The low cost also enables us to have a higher number of flex boards around the

city and cover more stores for exposure

Promotion Budget


Sq Ft Quantity No Of Cities

Total No Of Flex

Total

Tier 1 Cities

6’*3’ 10 18 200

23

4600

828000

Tier 2 Cities

6’*3’ 10 18


Design

The above ad will be placed outside paan shops since we cannot promote smoking explicitly

and will show people bonding over fire, like it happens when 2-3 people smoke together.

The following ad, which is in English will be placed in big cities and upmarket areas. The

second ad, which will be in Hindi will be placed in smaller towns and areas like mandis and

small market areas.



Glow Signs

These can be classified as both BTL activities as well as trade promotion. This is because if we set up

the signs, it is an implicit indication to the consumer about the brand. For the retailer, the company

itself has set up a name plate for the store at no expense to the retailer. The retailer gets an

impression that the company has given him something of use for ‘free’ and there could be an

increase of his attachment with our brand.


• These will be placed at dhabas on the highways, bus stops and select kirana stores

Promotion Objective

• To create a sense of loyalty among the retailers who are the most important link in the

entire chain

• To ensure that they are taken care of and they give priority to Lightwel rather than

competition

Rationale

• Glow signs at dhabas are useful for them because at highways, the dhabas will have a backlit

glow sign displaying the matchstick brand and the name of the dhaba, rather than a hand-

painted sign. These can be seen in the dark, highlighting their content

• At a few kirana stores which show a larger sale of our brand than in other stores, the glow

sign can be given as an acknowledgement and appreciation of sales

• Glow signs will also be installed at and near bus stops since many consumers travel by such

local transport

Promotion Budget

Bus Stops

Particulars Size Standard Rate

Quantity No of Cities

Total No of Glow Signs

Total

Tier 1 Cities

6*3 5000 25 6 150 750000

Tier 2 Cities

6*3 3000 15 17 255 765000

1515000

• The standard rates have been derived from two factors:

� Rent payable to respective City Corporations (Rs.4800)


� Manufacturing cost of Flex (Rs.200)

• These rates are applicable for only one month because the flow of traffic at bus-stops will be

a recurring set of consumers. The initial month will help brand awareness.

Kirana Shops




Total

Tier 1 Cities

6*3 300 60 6 360 108000

Tier 2 Cities

6*3 300 40 17 680 204000

312000


� Manufacturing cost of the Flex (Rs.200)

� Electricity charges payable (Rs.100)

Design

THIS SPACE IS FOR THE NAME OF DHABA/ KIRANA STORE/ PAAN SHOP/ BUS

STOP

FROM:


MASS MEDIA

Radio

Radio as a medium has recently made a comeback in the radar of communication tools. It is

convenient for listeners of all socio-economic strata because the only cost is that of having a

receiving instrument like a transistor or even a mobile phone, since most of the latter come

equipped with the radio feature.


• We are aiming at reaching those consumers, primarily housewives who listen to the radio in

the morning hours when most channels play devotional and soft, old Hindi songs

• We also target the dhabas where work starts at about 9 am

Promotion Objective

• Listenership has grown at a rate of 19.7% in the past one year. Radio is an above-the-line

(ATL)activity and aims at explicitly urging consumers to purchase the product

• Housewives and people at dhabas listening to advertisements of the brand may not go and

ask for the brand, but if they see the brand on display, it would trigger recall and encourage

purchase

Suitable Time Slot

• We will be advertising in the weekend slot of Saturdays and Sundays in the slots of 9am to

11am and 6pm to 8pm.

• It will be carried out for a period of 3 months i.e 30 days which are 8 weekends in each

month and a buffer of 2 other holidays per month

• We will have 4 slots in the morning and 4 in the evening

Rationale

• Weekends have been chosen vis-a-vis weekdays since mornings in the week are a rush for

the family as housewives are busy getting children ready for school and cooking

• These are prime listenership slots, apart from the night hours

• Also, dhabas, another section which listens a lot to the radio, will have their radios on for

almost the entire day


• The media vehicle chosen is AIR FM (All India Radio) and its local stations because it has the

widest coverage and reach across India. It covers 17 national languages and has over 75% of

market share in the FM radio segment

• Also, the listenership has been very high but the advertising rates have been cut down. This

is an opportunity we can cash in on as the audience is a large part of the target group for our

product

Promotion Budget

Cities Category

No of Cities

Rate/10 Second No of Times Ad comes in a day

Cost/Day Cost for All Cities

Tier 1 6 700 8 5600 1008000

Tier 2 17 400 8 3200 1632000

26,40,000

Design

Since we are using ten-second slots, the ad will focus on a short message. The radio

advertisement will have background music or sounds resembling a homey atmosphere or

happy families. Towards the last three to five seconds, there will be a voice-over of a lady

saying “Aapki zindagi mein laayen roshni.. Eeshwar.. aur Lightwel”


TRADE & SALES PROMOTION

POP Materials

POP or point-of-purchase materials at the retail shop usually push impulse purchase. They are also

advertisements to increase visibility of the brand. This is a sales promotion initiative as the materials

will in direct eye-level of the consumer and attracts eyeballs. We can also classify this as a trade

promotion activity because it provides an incentive or stimulus for the retailer to stock our brand as

his problem of shelf space is taken care of.


• These materials will be set up at paan shops and kirana stores

� The small grocery shops target people buying groceries and supplies for the

households

� Paan shops are our reach to the large number of cigarette and beedi smokers

spanning India

• The materials we will be providing are individual wall-mounted dispensers for the number of

matchboxes the shopkeeper stocks

Promotion Objective & Rationale

The main problem retailers’ face while stocking matchboxes is that of the space occupied by them.

As seen in the case, Lightwel Match Company was providing the maximum margin to retailers but

they did not find lucrative to stock a substantial amount of the matches, as the margins were

inconsequential.

• To alleviate this problem, we shall be reducing the shelf space occupied by our product and

will be utilising the wall space of the outlet

• The dispensers made of plastic will be similar to paper towel dispensers found at hotels.

Pulling out the matchbox from the bottom will cause the next matchbox to slide into its

place. The dispenser will have the capacity of storing around 30 matchboxes at a time

• These dispensers will be installed at upmarket areas where the retailer usually stocks more

brands and the dispenser makes a difference to the look of the store

• The number of dispensers provided to each retailer will be subject to the size of the store

and wall space available


Promotion Budget

Items Rate No of

Cities

No of Kirana

Stores & Pan

Shops

Average

Dispenser

per Store

Total

Volume

Total

Cost

Dispensers

20

6 175

2

2100 42000

17 175 5950 119000

161000


Free Matchboxes

This is a trade promotion activity as we are incentivising the retailer to stock our brand of matches

by providing him a freebie which is helpful to him. This is also sales promotion for the company.

Since the consumer will be lighting his cigarette using our matches at every instance of purchase at

the shop, this first-hand experience of striking a Lightwel match will encourage him to purchase the

brand when he goes to actually buy a matchbox.


• Most of the time, people who buy a single cigarette/beedi at the paan shop light it at the

shop itself. The retailer who purchases matchboxes from the distributor has to light the

cigarette at his own expense. He does not charge for this.

• To address this, we will be providing them with 2 free matchboxes i.e. 100 matchsticks with

every lot of order, so that lighting cigarettes do not add to his expense

Promotion Objective

• The company reduces the shopkeeper’s expense of lighting cigarettes and induces him to

order for our brand

Promotion Budget

Items Rate No of Cities

No of Pan

Shops

Free Samples/Store/Day

Free Samples-3

Months

Total Volume

Total Cost

Free Samples

0.5 6 125 2 180 135000 67500

17 125 2 180 382500 191250

258750

The flex boards installed will be at 200 locations out of which around 25 will be near temples. Out of

the remaining 175, there will be 50 kirana stores and 125 paan shops


PROMOTIONS IN NORTHERN REGION

We will also carry out promotional activities in the region which we are already strong in, i.e.

Northern region of India. The volume of promotional activities in this region will be less as compared

to the new locations chosen. This is because the brand awareness is already high in this region. This

is why we do not need to advertise to create awareness. As discussed in the case and the facts

generated, it is clear that though consumers seek Lightwel matches, it is the retailers who do not

push our brands.

The case clearly states that Lightwel Match Company gives the maximum margins. This indicates that

retailers are not looking at increased margin. Rather, they want to reduce their own investments in

form of credit, stock and space. Credit may not be a key factor as the rupee value of turnover of

matches is too low. From our side we can improve our sales and distribution network so that the

retailers do not have to keep much stock. Also, to reduce their shelf space we can do the following:

• Provide POP materials like in the rest of India- We would be giving retailers a specific

number of dispensers as per his store size and wall space.

• Providing free matchboxes to retailers so that lighting cigarettes/beedis for customers is not

at his expense

These activities will boost retailer push for our brands.

We shall also concentrate on enhancing awareness in the North to achieve near 100% brand

awareness and top-of-mind recall for Lightwel matches among the consumers. We can carry out

similar promotional activities as done in coastal regions, though the intensity will be lower. Assuming

that we have a presence in around 20 cities and a ratio of 1:3 for tier 1 and tier 2 cities, we have 5

tier-I cities and 15 tier-II cities. The following tools will be used:

Flex Boards


Sq Ft Average Quantity per city

No Of Cities

Total No Of Flex

Total

Tier 1 Cities

6’*3’ 10 18 100

20

2000

3,60,000

Tier 2 Cities

6’*3’ 10 18


Glow Signs

At Bus Stops




Total

Tier 1 Cities 6’*3’ 5000 13 5 65 325000

Tier 2 Cities 6’*3’ 3000 8 15 120 360000

685000


� Rent payable to respective City Corporation (Rs.4800)

� Manufacturing cost of Flex boards (Rs.200)

At Kirana Stores




Total

Tier 1 Cities 6’*3’ 300 30 5 150 45000

Tier 2 Cities 6’*3’ 300 20 15 300 90000

135000


� Manufacturing Cost of the Flex (Rs.200)

� Electricity charges payable (Rs.100)

Dispensers

Items Rate No of

Cities

No of Kirana

Stores & Pan

Shops

Average Dispenser

per Store

Total

Volume

Total Cost

Dispensers 20 5 175 2 1750 35000

15 175 5250 105000

140000


Free Samples

Items Rate No of Cities

No of Pan Shops

Free Samples/Store/Day

Free Samples-3 Months

Total Volume

Total Cost

Free Samples

0.5 5 125 2 180 112500 56250

15 125 2 180 337500 168750

225000


WEB 2.0

Viral Marketing

An emerging concept like Web 2.0 can also be used to our advantage. We will have a set of creatives

which portray the socially responsible side of LMC. These videos will be posted on social networking

sites like facebook, orkut and others. The videos will be targeted at the youth who are Internet-

savvy. The messages will focus on bonding and helping others when in need.

Communities and Fan Clubs

Websites like orkut and facebook have a proliferation of communities and fan clubs

dedicated to various affinities of people. There also are communities for smokers and

people who are loyal to a particular brand of cigarettes. Smokers may join communities like

“I Love Classic Milds” or “Only for Smokers”. We can post links in these communities to our

viral videos or our company website. In the future, if the company comes out with new

initiatives which benefit smokers, news can be updated on these communities also.

The creatives will be as follows:



The advertisements designed can be used as hoardings as well as glow signs and flex boards.

The placement of a particular advertising will depend on the context and the type of

customers coming to that area.

Documents

Promotion Plan