Case Study Collections04!01!09

Marketing:
BMW's "Company of Ideas" Campaign:

Targeting the "Creative Class"
Case Details:
Price:
Case Code : MKTG137 For delivery in electronic format: Rs. 400;
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Charges
Themes
Auto and Ancillaries Case Length : 17 Pages Period : 2004-2006 Pub Date : 2006 Teaching
Note : Available Organization : BMW of North America LLC Industry : Auto & Ancillaries
Countries : USA
Abstract:
This case is about the "company of ideas" advertising campaign of BMW of North America
LLC (BMW LLC), which was unveiled in May 2006 in North America. The communication
in these ads were different from the company's communications in the past as the new ads
downplayed BMW's performance and strived to project its design prowess, independence,
and corporate culture that fostered innovation - promoting BMW as a "company of ideas." In
doing so, the company said that they wanted to take their brand beyond its traditional
association with yuppies and attract a wider section of luxury car buyers in the US
The company's new marketing communications campaign was aimed at the creative class, an
influential demographic segment in the US. The case highlights the rationale behind the
company's new advertising campaign and the initial reactions it received from analysts,
marketing experts, and consumers.
Issues:
» Understand the rationale behind the "company of ideas" advertising campaign of BMW of
North America LLC.
» Understand the marketing communication strategies adopted by a car manufacturer when

targeting a new customer segment.
» Understand the issues and challenges faced by a strong and well-defined brand in changing
its brand image/positioning.
"We are eager to unveil this smart and original campaign that communicates BMW's culture
of creativity so thoroughly. BMW has carved out a unique niche in the industry by placing a
premium on constant innovation and inspiration, and this campaign will reveal the company
behind The Ultimate Driving Machine." 1
- Jack Pitney, Vice President, Marketing at BMW of North America LLC, in 2006.
1
"What a load of manure. BMW long lived by the power of the idea of performance driving.
Now they've decided to jettison that history in favor of New Age marketing mumbo-jumbo...
They've sold their birthright for a bunch of Bangled2 pottage. A great pity." 3
- Professor Stephen Bainbridge, Professor of Law, UCLA,4 in 2006.
'Fixing What Ain't Broken'?
In May 2006, BMW of North America LLC (BMW LLC), the North American arm of
German automobiles major BMW AG, released a new advertising campaign promoting itself
as a "company of ideas". This move took many by surprise. The tone and tenor of the new
campaign were a huge departure from the company's communications in the past. The series
of new ads no longer stressed BMW's performance, but strove to project its design prowess
and corporate culture that fostered innovation. In doing so, the company said that they wanted
to take their brand beyond yuppies5 and attract a wider section of the affluent class.
Many analysts were surprised as 2005 had been a good year for BMW in the US, and
companies didn't usually deviate from a strategy or formula that had proved successful. In
2005, BMW LLC reported record annual sales of 307,020 vehicles (BMW and MINI6 brands
combined) in the US, up four percent over the 296,111 vehicles sold in 2004.
The annual sales in 2005, for the BMW brand (BMW automobiles and BMW SAV7
combined), was 266,200 units, up 2.4 percent when compared to 260,079 units in 2004. Tom
Purves (Purves), Chairman and CEO of BMW (US) Holding Corp., commented, "This is a
strong finish to a year marked with numerous model changeovers. We've only had full
availability of our new award-winning 3 Series sedans8 in the past two to three months. Given
that, and changeovers in the 7 Series9 and 5 Series,10 we are especially pleased with the
annual increases."11
Despite the good sales performance, Jack Pitney (Pitney), vice president, marketing at BMW
LLC felt that almost 75 percent of luxury car buyers in the US were not considering BMW as
they still strongly associated it with the yuppie phenomenon of the 1980s. Thus, the company
was banking on this new "company of ideas" ad campaign to redress this situation and
expand its market.
Though the ads received rave reviews from various quarters, some analysts felt that BMW
was losing its soul by moving away from the theme of "driving" and "performance."
According to marketing expert Al Ries (Ries), BMW owned the word "driving" and this had
been etched in the minds of consumers over a period of three decades with the tagline "The
Ultimate Driving Machine."
Others felt that the ads fell under the heading of "preventive maintenance" as it came at a
time when there was no real need for BMW to upset the cart. A few other analysts felt that
Bottom of Form
Background Note
BMW Group AG
BMW was founded in 1913, when Karl Friedrich Rapp (Rapp) set up Bayerische
Flugzeug-Werke to manufacture aircraft engines in the Munich district of
Germany. In 1916, during World War I, the company entered into a contract to
manufacture aircraft engines for the Austrian-Hungarian army. In 1917, to meet
the need for additional funds, Rapp gained the support of Camillo Castiglioni and
Max Friz and the company rechristened itself as Bayerische Motoren Werke
GmbH
2
In the same year, the company ran into difficulties because of over-expansion. It was taken
over by Franz Josef Pope and in 1918 he named it BMW AG.
In 1918, BMW manufactured its first aircraft engine, the Type IIIa. This engine could power
a biplane12 to reach an altitude of 5000 meters in just 29 minutes, creating a world record.
After the World War I, the Treaty of Versailles (1919) put a ban on production of aircraft in
Germany.
Thus, in 1919, the company started to manufacture railway brakes. In the same year it
designed its first motorcycle engine. In 1923, it started manufacturing motorcycles and its
first model R32, a 500cc shaft-driven motorcycle, designed by Max Friz, was launched.
BMW forayed into car manufacture in the late 1920s. (Refer to Exhibit I for BMW's Logo).
In 1928, BMW set up a car manufacturing unit in the Eisenach region of Germany and started
manufacturing a small car called 'Dixi', based on the Austin Seven car13 under license. In the
following year it acquired the Dixi Company.
It was BMW's first car and was marketed under the name BMW 3/15. Over the next decade,
BMW launched a number of successful models. Its cars, especially the 327 saloon and 328
roadster, were considered very advanced for their time, and the roadster was even nominated
as the 'Car of the Century' in 1999 by some auto experts.
With the start of World War II, BMW's car business took a back seat as it started
manufacturing aircraft engines once again. Its aircraft engines and motorcycles were
extensively used by the German army. Toward the end of the war, the company's plants were
heavily bombed and those on the eastern part of the country were captured by the Soviet
Union...
BMW - The Ultimate Driving Machine
For long BMW had been associated with the words "driving" and "performance". The
company's taglines in English were "The Ultimate Driving Machine" and "Sheer Driving
Pleasure". The original German slogan was "Freude am Fahren," which translated to "Joy in
Driving" in English. BMW's association with "driving" was so strong that Ries believed that
BMW became a synonym for "driving" in the mind of the consumer. "What comes to the
mind when you think about BMW?" said Ries. "A car that's fun to drive. The ultimate driving
machine. BMW owns the word "driving" in the mind.
In fact, according to Ries, it was the consistency of the communication and logo over decades
that led to the success of BMW. He said, "BMW has been the ultimate driving machine for
twenty-five years. What's even more remarkable is the fact that BMW retained its strategy
even though the brand was driven through three separate advertising agencies. A change in
agencies usually signals the end of the brand's consistency."...
Going Beyond the "Yuppies"
In 2005, BMW branded automobile sales in the US were 266,200 units when compared to
260,079 units in 2004.
In fact, over the last five years BMW's sales in the US had increased by 62 percent far more
than any competitor.
The company's new products were also well received. However, an inhouse research study, in
2005, revealed that a large percentage (75 percent) of luxury car buyers in the US did not
consider any BMW vehicle at the time of purchase...
3
Targeting the "Creative Class"
According to the company, the dynamic campaign was aimed at the creative class -consumers
who shared many of BMW's principles -an independent spirit, a drive to challenge
conventional wisdom, and an appreciation for a brand's ability to offer both substance and
style.
The economic role of this 38 million strong class in the US included creating new ideas, new
technology, and new creative content. According to Richard Florida (Florida), a Carnegie-
Mellon University professor, the people of this class were distinct from other classes through
the nature of their work...
References:
1] "BMW Unveils New Ad Campaign," www.strategiy.com, May 9, 2006.
2] In the 2000s, BMW made some changes in the design of its vehicles under their new design chief Christopher Bangle (Bangle). The new
designs were referred to (often derogatively) as "Bangled" after the name of Bangle, by the press and BMW traditionalists.
3] "BMW Losing its Soul," www.professorbainbridge.com, May 8, 2006.
4] The University of California, Los Angeles, popularly known as UCLA, is a public, co-educational university located in the city of Los
Angeles, USA.
5] Yuppie, short for "Young Urban Professional," describes a demographic of people primarily comprising of the children or grandchildren
of the baby boomer generation (people born between 1945 and 1964). In general the yuppies are highly-educated and upwardly-mobile and
are aged from early twenties to early-to-mid thirties as of 2006. They tend to hold jobs in the professional sectors, with incomes that place
them in the upper-middle economic class. The term "Yuppie" emerged in the early 1980s. Although the original yuppies were "young," the
term now applies as well to people in middle age.
6] MINI is car produced by a subsidiary of BMW.
7] SAV is the acronym for Sports Activity Vehicles. BMW calls its sport utility vehicle (SUV) as SAV. An SUV, is a type of passenger
vehicle which combines the load-hauling and versatility of a pickup truck with the passenger-carrying space of a van.
8] A sedan car is one of the most common body styles of the modern automobile. At its most basic, the sedan is a passenger car with a
separate hood covering the engine in the front, and a separate trunk for luggage at the rear. The BMW 3 Series is a line of compact luxury
cars manufactured by BMW since May 1975. Luxury cars are vehicles that lay more emphasis on comfort, appearance, and amenities than
on performance, economy, or utility. They usually offer cutting-edge technology, higher quality materials, and are often built in smaller
numbers than more affordable mass-market vehicles. As of December 2006, to qualify as a luxury car, the Mean Selling Price of the car had
to be in excess of around US$ 36,000.
9] The 7 Series is BMW's flagship car. It is a luxury sedan.
10] The 5 Series is a series of midsize luxury automobiles manufactured by BMW. They are available as sedans and station wagons (a car
body style similar to a sedan, but with an extended rear cargo area).
11] "BMW Sets All Time Annual Sales Record in 2005," www.internetautoguide.com, January 4, 2006.
Browser Wars II: The Release of IE 7 (BETA 2)
Case Details: Price:

Case Length : 17 Pages For delivery through courier (within India): Rs.
Period : 2004-2006 300 + Rs. 25 for Shipping & Handling Charges
Pub Date : 2006
Teaching Note : Available Themes
Organization : Microsoft Corporation
4
Industry : Computers, IT & ITeS Computers, IT and ITeS
Countries : Global
Abstract:
This case is about Microsoft Corporation's (Microsoft) release of a new Beta version of its
Internet Explorer (IE) web browser, IE 7 Beta 2 (IE 7) in April 2006.
Though Microsoft was a late entrant in the web browser market, in the late 1990s, it used its
dominance in the Operating System (OS) market to gain a 96% market share in the web
browser market by June 2004.
However, the release of Firefox, an open-source browser, in 2004, and the security concerns
regarding the IE6 browser led to a decline in IE's market share.
The case examines the rationale behind Microsoft's release of the new version IE browser.
The case also highlights the competition between Microsoft and Google Inc. for the search-
based online advertising market.
Issues:
» Understand the nature of competition in the global web browser market.
» Understand the challenges faced by a market leader with regard to the threat of new
entrants.
I think IE 7 brings the browser to parity with Firefox in terms of features, and the security's a
big improvement over IE 6. I think it will be good enough to stop some of IE's market share
loss to Firefox, and perhaps bring some switchers back to IE." 1
- Matt Rosoff, Analyst with Directions on Microsoft,2 in April 2006.
"There's a big chance right now to switch people to Firefox and it might not last very long--
Microsoft has a new version of Internet Explorer on the way and lord knows what they'll be
doing in Vista to force people to use it. Firefox has to get a big foothold right now." 3
- A Group of Firefox Advocates, Massachusetts, in April 2006.
Microsoft's New Browser
On April 25, 2006, Microsoft Corporation (Microsoft), the world's largest software company,
released a new Beta version of its Internet Explorer4 (IE) web browser, IE 7 Beta 2 (IE 7).
The browser offered tighter security control when compared to previous versions and offered
advanced features to navigate the Web.
It allowed users to open more than one site in one browser window, and provided support for
RSS5 feeds that could be incorporated in the page design. Color coded warnings were also
provided in case the user accessed a website that was suspicious or known to be fraudulent.
The browser development team at Microsoft considered IE 7 to be a significant improvement
over the IE 6 version. "IE 7 is feature complete and has been through significant
compatibility and reliability testing. People (especially technology enthusiasts) will have a
good experience with it,"6 the team added. Experts were of the opinion that Microsoft's new
browser was the company's response to growing criticism that its IE 6 browser had serious
security flaws, which made users vulnerable to attacks from malicious viruses and online
phishing7 scams.
5
In January 2005, Secunia, a Denmark-based computer security company, which tracks
vulnerabilities in over 9,000 software products, had given the IE 6 their highest rating of
"extremely critical" because of the high number of flaws detected in the browser.
Microsoft's decision to revamp the browser was also seen as a response to the growing threat
from rival browser, Firefox, an open source 8 browser, officially released in November 2004
by the Mozilla Foundation.9
Microsoft had earlier released two test versions of its IE 7 browser named "Internet Explorer
7 Beta 2 Preview" in February 2006 and March 2006. The final version of IE 7 is expected to
be released in the latter part of 2006 and to be included in Windows Vista, Microsoft's new
operating system scheduled for release at the end of 2007 (Refer to Exhibit I for a brief
profile of Microsoft and its products).
Analysts also felt that the IE 7 had further increased the rivalry between Microsoft and
Google Inc.10 (Google), as Microsoft integrated its Internet search service, MSN Search as the
default search engine in the browser. Google described the move as monopolistic and anti-
competitive. The move was seen as a severe threat to Google as it could hamper its online
search advertising business in a market worth over US$ 10 billion (in 2005). Google filed a
complaint with the Department of Justice11 (DOJ) in the US and European Commission12
(EU) in Europe in May 2006. The DOJ ruled out Google's objections in the same month.
History of Web Browsers
In 1990, Tim Berners Lee developed the first web browser called, WorldWideWeb at
CERN13 (Centre Européan de Recherche Nucléaire).
The browser had a built-in editor that created hypertext documents and had the ability to
support documents only with text, without any graphics.
In November 1993, Marc Andreessen, developed a web browser called Mosaic1 at the
National Center for Supercomputing Applications14 (NCSA), which became the first browser
to support the graphical user interface15 (GUI).
NCSA released the first pre-beta version of Mosaic in February 1993 and 1.0 version in
September 1993. The browser provided support to Windows and Macintosh operating
systems. In 1994, Marc Andreessen resigned from NCSA and formed Netscape
Communication Corporation16 in collaboration with Jim Clark.17
The period from 1994 to 1997 marked the dominance of Netscape as several versions of
browsers were released. The first web browser developed by Netscape was called as Netscape
Navigator (Netscape).
In December 1994, Netscape1 browser, which supported advanced HTML18 tags and multiple
TCP/IP19 connections, was released. In March 1996, Netscape1 was succeeded by Netscape2,
supporting JavaScript20 followed by Netscape3 in August 1996, which supported mouseover21
features.
In August 1995, Microsoft released its first Internet explorer version IE1 followed by IE2 in
December 1995. These browsers did not match the capability of Netscape3 standards. IE3
was the first browser that supported cascading style sheets22 (CSS). This helped Microsoft
increase its market share but Netscape's technical superiority ensured continued dominance
for Netscape.
6
However, the market share of Microsoft's browser grew rapidly, primarily due to the
incorporation of the browser in its Windows operating system (OS).
Microsoft had a near monopoly in the OS market and the incorporation enabled it to
command 96 percent of the total market by June 2004. Also, Microsoft viewed its
competency in developing OS as the key factor that attracted customers to its web browsers.
In December 1997, Opera, a web browser, was developed by a telecommunications company

Telenor in Oslo, Norway. The company developed this browser to counter the increasing
threat of phishing attacks.
Opera provided better CSS support than Netscape and IE. It operated on the open-source
model, which made it capable of running on any operating system. In addition to features like
tabbed browsing23 and pop-up blocking24, Opera provided better security protection by
supporting a Secure Socket Layer25 (SSL) version and 128-bit encryption, which was the
highest security available to a browser...
The Browser Wars
The term 'browser wars' describes the competition between the different web browsers to
maximize their own share of the world browser market. It is also commonly used to denote
the competition between IE and other browsers at two different periods of time. The first war
was fought between IE and Netscape in the late 1990s and the second (ongoing) is between
IE and Firefox, which began in 2004. The first round of the browser wars was won by
Microsoft. Industry experts pointed that this was mainly due to its near monopoly in the OS
market.
The second round of the browser wars started with the increasing popularity of browsers like
Firefox and Opera, which competed with Microsoft by providing advanced features and
better security. The release of Firefox 1.0 in 2004 (Refer to Exhibit II for the versions of
Firefox) posed a threat to Microsoft's IE as it spread through word-of-mouth buzz, was easily
available to Internet users, was less vulnerable to viruses and spyware, and had the capability
of running on any operating system. By mid-October 2005, Firefox had achieved its 100
millionth download and around 8.7 percent share of the browser market.
Asa Dotzler, the community coordinator for the Mozilla Foundation, said, "This is a great
milestone. Our massive, worldwide community of grassroots marketers and users - not to
mention the developers -have helped to put out a product that's really kicking butt."...
Security Concerns in IE6
In April 2006, Secunia reported that IE6 had twenty vulnerabilities when compared to
Firefox, which had four vulnerabilities. These vulnerabilities could severely compromise the
security of systems or networks. One of these security flaws enabled fraudsters to pull off
phishing scams. According to Secunia, the flaw was a result of the way web pages and
macromedia flash animations were loaded by IE6 using CSS. CSS was used in designing the
web layout and the availability of CSS source code on the web enabled hackers to access the
hard drive, making it susceptible to browser bugs and malicious software.
Microsoft stated that it took steps to investigate the newly reported flaw. A representative of
Microsoft said, "Our initial investigation has revealed that customers who have set their
Internet security settings to high, or who have disabled active scripting, are at reduced risk
from attack as the attack vector requires scripting."
The Release Of IE 7 Beta 2
7
On February 15, 2005, Microsoft's Chairman, Bill Gates announced a proposal to release a
new version of IE browser to be called IE 7. The new web browser was proposed to counter
competition from Firefox and address the severe security problems that affect IE6.
Gene Munster, an analyst said "The big point is that IE's been losing market share to
Mozilla's Firefox." He added, "Now Microsoft is trying to catch up and regain user loyalty
from people who have embraced Firefox's simple and more secure format."
Microsoft released a pre-IE 7 Beta 2 Preview on March 20, 2006 as a test version for users
and another version, IE 7 Beta 2 was released on April 25, 2006. With the release of IE 7
Beta 2, Microsoft had increased the security features of its web browser considerably.
Microsoft's security response team said, "We have been trying to get this fix into the next IE
release, but it's been a lot of work to do that, as it's relatively late in the cycle. It looks like it
will make it in though."
The Search Wars
The release of the Beta 2 version of IE 7 had intensified the war between Microsoft and
Google. Microsoft had integrated its Internet search service, MSN Search as the default
search engine in IE7. Google alleged that Microsoft's move would give it an unfair advantage
in the online search market. The search-based advertising market was worth US$ 10 billion in
2005 and search-based advertising was Google's primary revenue generating business.
Google complained to the DOJ and EC that Microsoft's move was monopolistic and anti-
competitive...
The Outlook
Microsoft acquired three security companies in order to improve the security features of its
products. On February 8, 2006, Microsoft acquired Sybari software, a company that
developed software that filtered viruses and spyware. Security software firms GeCAD and
Giant Software were also bought to bundle anti-spyware software with the browser. With
these acquisitions Microsoft aimed at handling all the issues related to security and counter
the growing threat from Firefox.
Exhibit
Exhibit I: Brief Profile of Microsoft and its Products
Exhibit II: Earlier Versions of Firefox (As of June 2006)
Exhibit III: Features of IE 7
Exhibit IV: Brief Profile of Google
References:
1] Foley, Mary Jo. "Microsoft Refreshes, Broadens IE 7 beta," www.microsoft-watch.com, April 25, 2006.
2] Directions on Microsoft is an independent organization that tracks the products, strategies, and marketing
initiatives of the Microsoft Corporation.
3] Beer, Stan. "Firefox Zealots Offer Websites Money to Switch users from IE," www.itwire.com, April 26, 2006.
4] Internet explorer is the leading web browser with a market share of 85% as on March, 2006.
5] RSS is an acronym for Rich Site Summary or Really Simple Syndication. It is a system that generates
automated feeds such as weblogs or news, specified in XML language.
8
6] "Microsoft Expands Browser Testing," www.bbc.co.uk, April 25, 2006.
7] Phishing is characterized by attempts to fraudulently acquire sensitive information, such as passwords and
credit card details, by masquerading as a trustworthy person or business in an apparently official electronic
communication. (Source: www.wikipedia.org).
8] Open source software is computer software available with source code.
9] Mozilla Foundation was formed by Netscape, a former browser, in 1998.
10] Google Inc., was co-founded by Sergey Brin and Larry Page in 1998. Google is the world's most popular
Internet search engine and has a diversified range of products such as E-mail, blogs, etc.
11] Established in 1870, the US Department of Justice (DOJ) enforces the law and protects the interests of the
US. It ensures safety against foreign and domestic threats and seeks to punish the guilty ensuring fair and
impartial administration of justice to US citizens. The divisions of the DOJ are the Antitrust Division, the Civil
Division, the Civil Rights Division, the National Security Division, Criminal Division, the Environment and Natural
Resources Division, the Justice Management Division, and the Tax Division.
12] European Commission is the executive body of the member countries of the European Union. Its main
function is to propose and implement legislations, and also act as guardian of the treaties signed by European
Union.
13] CERN, the European Organization for Nuclear Research, is located in Geneva, Switzerland.
14] National Center for Supercomputing Applications (NCSA) is a department in the University of Illinois at
Urbana-Champaign (UIUC). It has been a leader in the development and deployment of new computing
applications and software technologies for the scientific and engineering community.
15] Graphical user interface is a graphics user based interface that issues commands to a computer. It has the
ability to resize application windows and activates graphical images on a monitor.
16] Established in 1994, Netscape Communications Corporation was the publisher of Netscape browsers,
internet and intranet client and server products.
17] Jim Clark was the founder of Silicon Graphics, Inc. The company was established in 1982 and was a maker
of graphics display terminal.
18] Hyper Text Markup Language is a markup language that is used extensively on the WorldwideWeb (www).
It is used to structure text and multimedia documents and sets hyperlinks between documents.
19] Transmission Control Protocol/Internet Protocol is a communications protocol developed under a contract
from the U.S Department of defense. It is used as a standard to transmit data over a network.
20] JavaScript is a scripting language that enables scripting access to objects embedded in other applications.
21] Mouseover features are dynamically provided by Dynamic Hypertext Markup Language (DHTML). When the
user places the mouse over a hyperlink, sub links to the hyperlinks appear on the web page.
22] Cascading style sheets (CSS) design the web layout. It allows users to attach fonts, spacing to structured
documents such as HTML and XML.
23] This feature allows users to open more than one site in one browser window.
24] Pop-up blocking refers to any software or application that disables any pop-up, pop-over or pop-under
advertisement window that the user would see while using a Web browser. (Source: www.webopedia.com)
25] Secure Socket Layer (SSL) is used to transmit private documents over the Internet. It uses a cryptographic
system that is provided with two keys to encrypt and decrypt the data. This ensures that the message
transferred would be securely received by the recipient.
9
Crisis Management at Bausch & Lomb - The 'ReNu
Moistureloc' Controversy
Pub Date : 2006
Organization : Bausch and Lomb Eye Care
Industry : Eye Care
Countries : USA, Asia
Abstract:
This case is about the crisis faced by Bausch & Lomb (B&L), a leading eye care company, in
the wake of reports linking its contact lens cleaner, ReNu with MoistureLoc (ReNu
MoistureLoc), to a fungal infection of the eye called Fusarium keratitis. B&L decided to
suspend the US shipments of this product and asked US retailers to temporarily remove ReNu
MoistureLoc from their shelves. The case discusses the views of some marketing and
branding experts who highlighted the inadequate action taken by B&L when the initial
reports of the infection came out in Asia.
The company's critics felt that B&L had not handled the crisis well and was likely to pay the
price for it in terms of loss of sales, loss of image, and lawsuits. However, there were others
who pointed out that B&L was not all to blame because there was no clear link established
between B&L's product and the infection.
Issues:
» Understand the challenges faced by a company in managing a product crisis.
» Understand the importance of clear and effective communication with customers in the
event of a controversy/crisis.
The 'ReNu Moistureloc' Controversy "Bausch & Lomb's first priority is the health and safety
of consumers. If there is a problem with our product (ReNu with MoistureLoc), we'll find it
and we'll fix it. If there's not, when we come back, you'll be able to know with absolute
certainty that we've taken every possible step to ensure your safety." 1
- Ronald Zarrella, Chief Executive Officer of Bausch & Lomb Inc. (B&L), in April
2006.
"They (B&L) couldn't have done a worse job. It's almost as if they looked at the handbook on
crisis management and threw it out the window." 2
- Paul Argenti, Professor of Corporate Communications, Dartmouth College's Tuck
School of Business, 3 in April 2006.
Bausch & Lomb in the Public Eye
On April 10, 2006, eye care company Bausch & Lomb Inc. (B&L) temporarily suspended the
US shipments of its contact lens4 cleaner, ReNu with MoistureLoc (ReNu MoistureLoc)
produced at its Greenville, South Carolina, U.S.A, manufacturing facility. This was done in
10
order to facilitate a US Food and Drug Administration (FDA)5 investigation into reports of a
fungal infection, Fusarium keratitis6 (keratitis), among contact lens wearers in the US.
B&L voluntarily suspended its US shipments of ReNu MoistureLoc following an FDA
warning to the consumers to use ReNu MoistureLoc with caution. The FDA had issued this
warning on the basis of an investigation by the U.S. Centers for Disease Control and
Prevention (CDC),7 which was reviewing 109 cases of suspected keratitis in the US. Though
the CDC did not directly link the infection to ReNu MoistureLoc, it said that when it
interviewed 30 affected people, a high proportion (26 out of 30) of the affected people had
used B&L's ReNu MoistureLoc solution.
B&L's CEO, Ronald Zarella (Zarella), said, "The CDC has not determined if these reports
represent an increase of Fusarium keratitis infections and is continuing to investigate the
association, if any, of these cases with any product. Nonetheless, in the interest of public
health, we will voluntarily suspend U.S. shipments of ReNu with MoistureLoc while we
pursue all appropriate steps to bring this investigation to a definitive conclusion."8
On April 13, 2006, B&L voluntarily asked US retailers to temporarily remove ReNu
MoistureLoc from their shelves. It also recommended that consumers switch to other lens
care solutions, so as to prevent any confusion among contact lens wearers about what to do
while the investigation was going on. B&L stressed the fact that the report of such cases was
linked only to the ReNu MoistureLoc manufactured at its Greenville plant and did not apply
to any other B&L products -other lens care solutions of ReNu or to the ReNu MoistureLoc
made in factories outside the US. (Refer to Exhibit I for some key sub-brands of B&L and
Exhibit II for its lens care products).
However, B&L's corrective action did not impress analysts, marketers, and medical
specialists, many of whom felt that the eye care company had not done enough to inform the
30 million wearers of contact lenses in the US about the full extent of the problem. Analysts
felt that B&L should have informed the public about the health issues linked with ReNu
MoistureLoc as soon as it had come to know about it.
They also felt that B&L should have recalled the product from the market in February 2006
itself, when it first came to know about the association of keratitis with ReNu MoistureLoc.
They believed that B&L might have to pay the price for not acting promptly in the face of
this crisis. The analysts feared that B&L might have damaged its customer relations and that
its brand name might have been permanently tainted due to this incident.
Background Note
Bausch & Lomb Inc., based in Rochester, New York, USA, is an eye care company. The
company came into being in 1853 when a German immigrant, John Jacob Bausch, set up an
optical goods shop in Rochester, New York. Bausch borrowed US$60 for the purpose from a
friend, Henry Lomb, who eventually became a partner. In the early days, B&L manufactured
rubber eyeglass frames as well as a variety of optical products that required a high degree of
manufacturing precision. By 1903, the firm had received patents for microscopes, binoculars,
and even a camera shutter based on the eye's reaction to light
In the 1900s, B&L produced the first optical quality glass made in America. Its sunglasses
were used by the military in World War I. B&L is also credited with developing the lens of
the cameras that took the first satellite pictures of the moon. In 1971, B&L introduced the
first soft contact lenses.
As of April 2006, it was the largest global provider of eye care products. B&L's product lines
included Vision Care, Surgical, and Pharmaceuticals. Its Vision Care business manufactured
and marketed soft and GP (gas permeable) contact lenses, lens care products for soft and GP
11
lenses, eye care products (such as eye drops and ointments) and vision accessories (such as
magnifiers and eyeglass accessories).
The company offered a comprehensive line of products for ophthalmic surgery in the surgical
market segment. It developed and marketed prescription and over-the-counter (OTC) drugs9
used to treat a wide range of eye conditions, such as glaucoma, eye allergies, conjunctivitis,
and dry eye.
The 'Bausch & Lomb' name is one of the best known and most respected healthcare brands in
the world and B&L leverages on this brand name. In 2004, it employed approximately 12,400
people worldwide and its products were available in more than 100 countries. Its 2004,
revenues were US$2.2 billion. (Refer to Exhibit III for B&L's logo and Exhibit IV for key
financial data of B&L).
In late 2004, B&L launched ReNu MoistureLoc, its newest brand in the lens care segment
(Refer to Exhibit V for a brief note on ReNu MoistureLoc and Exhibit VI for a pack shot of
the product)...
ReNu Eye Infections - The Initial Reports
In January 2006, Singapore health officials noticed a sudden increase in the number of
reported cases of keratitis in contact lens users. On February 17, 2006, Singapore's Ministry
of Health alerted the public that 18 of the 22 patients, who were affected by keratitis, had
used ReNu MoistureLoc.
Between January 2006 and February 2006, they discovered 39 cases of keratitis. Of these, 34
patients said that they used ReNu MoistureLoc. Similar cases were also reported in Malaysia
and Hong Kong...
In February 2006, B&L stopped shipments of ReNu MoistureLoc to Singapore and Hong
Kong although they maintained that the infection was not linked to their product. B&L
partnered with health authorities and researchers to investigate the extent and cause of the
outbreak.
In a press release in March 2006, B&L announced that it was collaborating in a scientific
investigation with health authorities and leading experts around the world including the CDC,
Bascom Palmer Eye Institute, Johns Hopkins Wilmer Eye Institute, and the Ministries of
Health in Singapore, Hong Kong, and Malaysia, to determine the extent and cause of the
increase in infection among contact lens wearers.
It, however, claimed that the cases reported in Asia involved examples of poor patient
compliance with lens care regimens and contact lens wear, such as wearing expired lenses
and re-using disposable contact lenses. These investigations did not reveal any cause-and
effect relationship between ReNu MoistureLoc and keratitis (Refer Exhibit VII for B&L's
press release).
A Hazy View At B&L?
As B&L stopped shipments of ReNu MoistureLoc, US retail giants like Sears Holdings Corp.
(Kmart, Sears Essentials, and Sears Grand stores), CVS Corp. (CVS), Wal-Mart Stores, Inc.,,
Walgreen Co. (Walgreens), Rite Aid Corp. and all Albertson Inc.'s owned chains, including
Jewel-Osco and Shaw's, pulled ReNu MoistureLoc off their store shelves. Walgreen went a
step further and took all ReNu products off its shelves, not just the ones with the ReNu
MoistureLoc formulation line, to prevent confusion among customers. Synsam and
Specsavers Blic Optik of Sweden also pulled ReNu MoistureLoc off their shelves...
12
Competitors Eye B&L's Market Share
As of April, 2006, more than 30 million people wore contact lenses in the US and the
estimated global market for lens care solutions was US$1.8 billion. In terms of market share,
B&L, Alcon Inc. (Alcon), and Advanced Medical Optics, Inc. (Advanced Medical) held the
top three positions in the market (Refer to Table IV for Global market share of top three
players in Lens Care). B&L's ReNu MoistureLoc alone accounted for 9.2% of the market
share in U.S. lens care solutions...
References:
1] Jeff Tannenbaum and Kerry Young, “Company Ends Sale of Lens Cleaner,” www.philly.com, April
14, 2006.
2] "Bausch & Lomb Withdraws Lens Cleaner from U.S. Market (Update2),” www.bloomberg.com,
April 13, 2006.
3] Darmouth College, located at Hanover, New Hampshire, USA, is a private academic institution.
Founded in 1769, it is a member of the Ivy League. The Tuck School of Business Administration was
founded in 1900 at Dartmouth College. It is one of the six Ivy League business schools.
4] A contact lens is a corrective, cosmetic, or therapeutic lens usually placed on the cornea of the
eye.
5] The Food and Drug Administration (FDA) is a government agency in the US responsible for
regulating food, dietary supplements, drugs, cosmetics, medical devices, biologics and blood
products.
6] Keratitis is an infection of the eyes caused by fungus. It can scar the corneas, potentially leading
to blindness. Symptoms can include blurry vision, pain or redness, increased sensitivity to light and
excessive discharge from the eye.
7] The Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, USA, is recognized as
the leading United States agency for protecting the public health and safety of people. The CDC
provides credible information to enhance health decisions and promotes health through strong
partnerships with state health departments and other organizations.
8] Bausch & Lomb, Press Release, “Bausch & Lomb Temporarily Suspends U.S. Shipments of ReNu
with ReNu MoistureLoc Produced at Greenville, S.C., Manufacturing Facility Pending Investigation of
Reports of Fusarium Infections Among Contact Lens Wearers,” www.bausch.com, April 10, 2006.
9] OTC drugs are sold across the counter for which prescription is not needed.
Destination Marketing: Tourism Australia's Controversial

Campaign

Case Length : 21 pages For delivery through courier (within India):
Period : 2006-2008 Rs. 400 + Rs. 25 for Shipping & Handling
13
Pub Date : 2008 Charges
Teaching Note : Available
Themes
Organization : Tourism Australia Tourism Marketing/ Destination Branding/
Industry : Tourism Marketing Communications
Countries : Australia/ Global
Abstract:
This case is about an advertising campaign started by Tourism Australia in 2006, the
controversies it created, and its eventual withdrawal. The case revolves around the 'So Where
the Bloody Hell are You?' campaign that was withdrawn in early 2008.
Australian tourism had been facing the unique problem where the interest shown by the
people in visiting the country was not translating into actual tourist inflows. The campaign
was intended to solve this problem by translating the huge interest shown by the people to
visit Australia into actual tourist inflows. The theme of the campaign was to invite the people
to visit Australia and enjoy the diverse range of experiences available there.
The campaign was launched through multiple media channels and Australian model Lara
Bingle was the face of the campaign. The campaign was developed after extensive marketing
research and strove to target 'Experience Seekers' -- early adopters who played a major role in
influencing the purchasing behavior of other people.
The campaign became controversial right from the time it was launched and was even
initially banned in some countries such as UK and Canada. The campaign attracted the wrath
of the regulators in these countries because of the use of swear words such as 'Bloody' and
'Hell'. These words were part of the Australian slang but their use in the ad campaign was
perceived as offensive in some of the target markets. Tourism Australia was criticized for not
taking the cultural aspects into account before developing an advertising campaign for the
international markets.
In addition to being controversial, the campaign failed to show any significant results though
the experts were divided on the effectiveness of the campaign. Faced with increased criticism
from various quarters, Tourism Australia withdrew the campaign in February 2008. Tourism
Australia said that a new advertising campaign would be released in the place of the
withdrawn campaign and all precautions would be taken to avoid any controversies in its
future campaigns.
Issues:
» Understand the issues in Tourism (destination) development and marketing and how
Tourism Australia addressed these issues
» Understand the issues and challenges in destination branding
» Understand how Tourism Australia planned an implemented a bold advertising campaign to

promote Australia as a destination brand
» Appreciate the importance of taking into account cultural issues in target markets while
developing a global marketing communication
» Understand the challenges faced by a public sector organization/governmental organization

in sustaining an innovative program
14
"In an increasingly competitive and tough commercial environment we must be bold,
aggressive, and distinctive to win the business. But we also must be credible -- we must be
true to what we are as a destination and focus on why the world loves us -- and our
marketing must be authentically and distinctively Australian... This exciting new campaign
provides a compelling and uniquely Australian invitation to the world that celebrates our
personality, our lifestyle, and our place. It has been carefully designed to cut through the
clutter and motivate international tourists to stop putting it off and visit Australia now."1
- Scott Morrison, Managing Director, Tourism Australia, on the controversial 'So
Where the Bloody Hell are You?' campaign that was launched in 2006.
"They [Asian visitors] didn't get the joke at all, it wasn't funny to them to have this word
bloody which can be a serious word to others. It came across as a demand for people to visit
Australia, not an invitation and that's not at all culturally appropriate in many of the
countries in which we are working to encourage people to come and see us."2
- Desley Boyle, Queensland's Tourism Minister, in 2007.
"In awareness, in some areas it was very good. But it seems from everything that we see and
hear from the industry that it was not strong enough to really go on from here."3
- Harold Mitchell, the Executive Chairman of the Mitchell Communication Group, in
2008.
End of an Innovative & Controversial Campaign
In February 2008, Tourism Australia4 announced that it was discontinuing its controversial
advertisement campaign, 'So Where the Bloody Hell are You?' (Bloody Hell). The
announcement put an end to the contentious campaign launched in 2006 by Tourism
Australia, a statutory authority of the Government of Australia set up to promote the country
as a tourist destination. Through the campaign, which featured well-known Australian model
Lara Bingle (Bingle), Tourism Australia sought to promote Australia as a rough and wild but
friendly place for tourists.
It said that the brand proposition of the campaign was, 'Australia invites you to get involved'.5
The announcement of the campaign's withdrawal came amidst a fall in tourist numbers
attributed to the fact that the Australian Dollar (A$)6 was growing stronger.
The advertisement campaign received wide media coverage and was also accessed online by
many people. Though it was initially termed a success and as having helped spur tourists to
visit the country, it proved controversial in some of the target markets. The use of the swear
words 'Bloody' and 'Hell' particularly incensed many. However, Tourism Australia defended
the use of the words, saying they were part of Australian slang and were intended to portray
Australia as 'warm, friendly, and inviting'.
The advertisement was banned in some countries like the UK and Canada. While the UK
banned it for the use of the word 'bloody', Canada banned it for the opening line in the
advertisement of the campaign, "We've bought you a beer" which, it said, implied the
consumption of unbranded alcohol.
Singapore insisted that Tourism Australia remove the words 'bloody' and 'hell' before
releasing the campaign in that country. The first year of the launch of the campaign saw an
increase of A$ 1.8 billion in tourist spending.7
However, some analysts believed that the campaign had failed to live up to expectations.
Even as marketing experts remained divided in their opinion on the campaign's effectiveness,
Tourism Australia decided to pull it out under pressure from various stakeholders and amidst
concern that the A$ 180 million campaign was a complete failure.
15
Excerpts
History of Australian Tourism
Australia is an island continent located in the earth's southern hemisphere comprising the
world's smallest continent of Australia, the island of Tasmania, and a number of other small
islands (Refer to Exhibit I for a brief note on Australia). Over the years, Australia made a
name for itself as a strong destination brand (Refer to Exhibit II for a brief note on
Destination branding).
Realizing the importance of tourism to the nation's economy, Australia had been promoting
its tourism industry since the 1960s (Refer to Exhibit III for history of Australian tourism: A
timeline). In 1967, the Australian Tourism Commission (ATC) was established with a
funding of A$ 1.5 million...
The Problem
Despite Australia being a strong destination brand, the problem that the newly formed
Tourism Australia faced was that the number of tourists actually visiting Australia did not
match the number of people who had shown an interest in visiting the country. Australia
performed well in a number of destination ratings and scored high on brand recall...
Preparing for the New Campaign
The 'Bloody Hell' campaign was started by the Australian Government in 2006 to increase
the tourist inflow into the country. The campaign was designed by the Sydney office of the
advertising agency M&C Saatchi (Saatchi) .
Saatchi had earlier designed the successful campaign, "100% Pure New Zealand" for
promoting tourism in New Zealand. The important objective of the campaign was to cash in
on the awareness created through previous advertising campaigns and convert them into
actual travel bookings...
Launching the New Campaign
The campaign was launched by Fran Bailey (Bailey), then Australian tourism minister, on
February 27, 2006. The advertisements of the campaign featured a total of eleven scenes and
thirteen still images. The images and scenes showed the diverse range of experiences on offer
in Australia...
Controversy and Criticisms
The 'Bloody Hell' campaign attracted controversy immediately after its launch. The campaign
was criticized in some of the target countries for using swear words like 'Bloody' and 'Hell'
and for its allegedly crude content.
The advertisement campaign was released in the UK, Australia's most valuable market, in
March 2006. (Refer to Exhibit VI for the top 10 source countries for short-term visitor
arrivals into Australia) The advertisement was banned in UK for using the word 'bloody' and,
UK's Broadcast Advertising Clearance Center (BACC) instructed Tourism Australia
authorities to drop the word 'Bloody' from the ad...
The Results of the Campaign
Many critics described the campaign as a failure right from the first year of its launch. In the
first year of its launch the number of tourist arrivals actually fell. In October 2006, the
16
number of UK tourists who visited Australia fell by 2.3 percent compared to the preceding
year. The number of Japanese tourists fell by 5.7 percent while the number of German
tourists dropped by 4.7 percent...
Outlook
Some experts felt that the failure of the 'Bloody Hell' campaign had dented the image of
Tourism Australia as its predecessor, ATC, was considered an expert in destination branding.
Analysts said that apart from the loss in tourist numbers and revenues, the controversy might
tarnish the image of brand 'Australia' itself. They said that Australia should take urgent steps
to control the damage caused by the failed advertising campaign and design a new campaign
to stop the decline in tourist numbers, more so in view of the emergence of new tourist hot
spots like India and Malaysia...
Exhibits
Exhibit I: A Brief Note on Australia
Exhibit II: A Brief Note on Destination Branding
Exhibit III: History of Australian Tourism: A Timeline
Exhibit IV: Logo of Tourism Australia
Exhibit V: Some Scenes from the 'So Where the Bloody Hell are You?' Campaign
Exhibit VI: The Top 10 Source Countries for Short-term Visitor Arrivals as of February 2008
Honda's Marketing Strategies in India

Case Code : MKTG098 For delivery in electronic format: Rs.
Case Length : 19 Pages 500;
Period : 1998-2004 For delivery through courier (within
Pub Date : 2004 India): Rs. 500 + Rs. 25 for Shipping &
Teaching : Not Available Handling Charges
Note
Organization : Honda Motors Themes
Industry : Automobile (Two International Marketing
Wheelers)
Countries : India
Keywords:
Honda Motors, Indian Two Wheeler Industry, Foreign Two Wheeler Manufacturers in India,
Marketing Two Wheelers in India, Marketing Mix, Positioning, Customer Value, Pricing ,
Distribution, Advertising Campaign and International Business.
Abstract:
The case discusses the marketing strategies of Japan-based Honda Motor Company Limited
(HMCL) in India. Though HMCL had entered India way back in 1984 by entering into joint
ventures with leading two-wheeler companies, the company established its wholly owned
subsidiary - Honda Motorcycle and Scooters India Limited (HMSI) in October 1999. Within
a couple of years after the launch of its successful products including Activa, Dio and Eterno,
HMSI had emerged as the largest scooter company in India. The case describes in detail the
product, pricing, distribution and promotional strategies of HMSI. It briefs the challenges
faced by the company and its recent foray in the motorcycles business in India.
17
The case also includes a brief note on the Indian two-wheeler industry describing the leading
players and their marketing strategies.
Issues:
The case is structured in a way so as to enable students to:
• Understand the competitive landscape in the Indian two-wheeler industry and study the
marketing strategies of Honda in particular.
• Study the entry strategies of two-wheeler manufacturers in India.
• Examine and analyze the marketing mix of Honda Motors.
• Compare and contrast the marketing strategy of Honda with other leading players in the
Indian two-wheeler industry including Bajaj Auto and Hero Honda Motors.
"Its symbol, the Wings, represents the company's unwavering dedication in achieving goals
that are unique and above all, conforming to international norms. These wings are now in
India as Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), a wholly owned subsidiary of
Honda Motor Company Ltd., Japan. These wings are here to initiate a change and make a
difference in the Indian two-wheeler industry."
- www.honda2wheelersindia.com.
The Launch
In September 2004, Honda Motorcycle and Scooters India Limited (HMSI), the wholly
owned subsidiary of the Japan-based Honda Motor Company Limited (HMCL),1 launched its
first 150cc motorcycle named 'Unicorn.'
Priced at Rs 50,043 (ex-showroom price, Delhi), Unicorn had a four stroke 13.3 bhp engine
with five gears.
The new bike was available in five colours and was designed to achieve a speed of 0 to 60
kmph in five seconds. Unicorn was promoted with the caption "Be a wing rider." (Refer
Exhibit I for a visual of Unicorn).
Targeted at youth, Unicorn looked sportier than all the existing motorcycles in the premium
segment and was pitted against Bajaj Pulsar, the leader with 75 percent market share in that
segment. The other bikes in this segment were TVS Fiero, LML's Graptor and Hero Honda's
CBZ (Refer Exhibit II for a comparison of leading motorcycle models in India). HMSI
expected sales of 56,000 units of Unicorn in the first year of launch.
The Indian two-wheeler industry, traditionally considered a scooter market, witnessed a
gradual migration towards motorcycles from the 1990's. When HMSI was incorporated in
late 1999, the Indian motorcycle market was booming, compared to the scooter market.
Still, SI announced that it would initially concentrate only on the scooter market and would
enter the motorcycle market in 2004, the year when the HMCL joint venture agreement with
the Hero Group2 was due for revalidation. HMSI was credited for reviving the scooters
market in India. Within three years of commercial operation, HMSI emerged as the market
leader in the scooters segment.
The company's scooter models included Activa, Dio and Eterno. Appreciating the efforts of
the company, Veeshal Bakshi, an analyst with Financial Express, a leading business daily in
India, said, "Honda has stirred the Indian automobile markets in many ways. Its wholly
18
owned subsidiary Honda Motorcycle and Scooter India (HMSI) single handedly revived the
two-wheeler scooter market, at a time when even the likes of Bajaj were unable to prevent the
slide in scooter sales."3
Background Note
The history of HMCL could be traced back to 1946, when Soichiro Honda, a mechanical
engineer, established the 'Honda Technical Research Institute' in Hamamatsu, Japan.
The idea was to develop and later produce small two-cycle motorbike engines. Honda's first
product, an A-type 50cc bicycle engine, was produced in 1947.
In 1948, HMCL was incorporated with a capital of one million yen. Soon, the company
started to design and produce lightweight motorcycles.
Honda's first motor cycle, D-type two stroke 98cc, was produced in 1949. In the early fifties,
the headquarters of the company was shifted from Hamamatsu to Tokyo and the company got
listed on the Tokyo Stock Exchange. In 1959, the American Honda Motor Company Inc. was
established in Los Angeles.
The American venture started modestly with a staff of six and sales figure barely touching
200 motorcycles.
In 1963, American Honda launched the "You meet the nicest people on a Honda" advertising
campaign, which revolutionized the US motorcycle industry.
A few years later, Honda established motorcycle assembly plants in Germany and Belgium.
During the 1960s, HMCL expanded its product line by introducing light trucks, compact cars,
out board motors, power generators and several new models of motorcycles and motor
scooters.
New production units were started in Thailand, UK, Malaysia and cumulative motorcycle
production reached 10 mn units by 1968. During the 1970s, HMCL entered the Philippines,
Indonesia and Brazil...
The Product Launch
After coming out of the joint venture with KEL, HMCL planned to introduce its own two-
wheelers in the market. In October 1999, in a major strategic initiative, HMCL established
HMSI. The company made an initial investment of Rs 3 bn to establish a plant with an annual
production capacity of 200,000 units...
Activa
Launched in 2001, Honda Activa was the first scooter model of HMSI for the Indian market.
A 102 cc scooter, Activa was specially designed keeping in view the needs and preferences of
Indian consumers who expressed that the conventional Indian scooter was too big and
difficult to handle and that the scooterette was too small and similar to a moped..
Dio
Dio was launched in 2002 as the first motoscooter in the Indian market...
The Marketing Strategy
19
Thanks to the success of its joint venture with Hero Group and KEL, 'Honda' was already a
household name in India. Hence, rather than putting major efforts into brand building,
HMSI's marketing strategy emphasized on offering innovative products at competitive prices,
novel promotional campaigns and developing an extensive distribution network...
Looking Ahead
After the launch of Unicorn, HMSI announced plans to introduce a 135cc motorcycle in
2005. Confirming this, Yukihiro Aoshima, COO and MD, HMSI said, "The Unicorn is just
the beginning.....We do not want to restrict ourselves to any specific category.
We would like to have full line-up covering right from the entry level low-cost motorcycle to
a motorcycle for people with strong taste and fun elements into it." With plans to launch its
own motorcycles in India, analysts feared that HMCL may not renew its ties with the Hero
Group..
Exhibits
Exhibit I: The Unicorn
Exhibit II: Comparison of Leading Motorcycle Models in India
Exhibit III: A Note on the Indian Two-Wheeler Industry
Exhibit IV: The Activa
Exhibit V: The Dio
Exhibit VI: Print Advertisement on Dio
Exhibit VII: Web Promo of Eterno
Exhibit VIII: Scooter Sales in India (2002-04)
Exhibit IX: Comparison of Features of Leading Scooter Models
References:
1] The Tokyo- headquartered HMCL is one of the leading manufacturers of automobiles and power
products and the largest manufacturer of two-wheelers in the world. It has more than 120
manufacturing facilities in 30 countries worldwide, manufacturing a wide range of automobiles. The
extensive range of business has brought the company into contact with over 17 million customers
annually.
2] The Hero Group of Companies was started by the Munjal brothers in 1956. Their first venture
was Hero Cycles Limited. Hero is today a multi-unit, multi-product, geographically diversified group
of companies. Apart from rolling their own steel, making components such as wheels for their
bicycles, the group diversified into other ventures like product designing, IT-enabled services,
finance and insurance. The group comprises 18 companies, 300 ancillary suppliers, over 5,000
outlets and 23,000 employees. For the fiscal 2003-04, the group's turnover was US$ 2.2 bn.
Lipitor: How Far Should Pfizer Push The Pill?

Organization : Pfizer Inc.
Pub Date : 2006 Themes
Teaching Note : Available Pharma and Biotech
Countries : USA, Europe
Industry : Pharmaceuticals
20
Abstract:
The case is about Pfizer's blockbuster anti-cholesterol reducing drug, Lipitor, the largest
selling pharmaceutical brand in the world. Despite Lipitor being a late entrant in the statin
market, it managed to become the market leader due to the aggressive marketing strategy
adopted by Pfizer. However, Pfizer's marketing of Lipitor came under intense scrutiny, when
in March 2006 some labor unions in the US sued Pfizer for alleged off-label marketing of
Lipitor. Pfizer also faced a class action lawsuit from some consumer advocacy groups
regarding its promotional activities that were targeted at women and the elderly.
Pfizer was also accused of withholding information about the potential side-effects of Lipitor.
Lipitor was also the subject of controversy regarding its allegedly over-zealous direct-to-
consumer (DTC) advertising.
In addition to this, the case also discusses the concerns regarding the slowing down of Lipitor
sales, the delay in launch of the Torcetrapib/Lipitor combination, the ongoing patent
litigations with generic manufacturers like Ranbaxy Laboratories Ltd. over Lipitor, and the
expected generic competition from substitutes like Pravachol and Zocor, which had gone off-
patent.
Issues:
» Understand the nature of the global market for statin drugs and the major players.
» Understand the issues and concerns with regard to Pfizer's marketing of Lipitor.
» Understand the legal and business challenges faced by research based global
pharmaceutical companies.
Keywords:
Pfizer , Lipitor (Atorvastatin), Direct-to-consumer (DTC) Advertising, Class Action Lawsuit,
Off-label marketing, Patent Litigation, Cholesterol-reducing drug, Statins Market, Zocor
(Simvastatin), Ranbaxy Laboratories Limited, Marketing Ethics , Torcetrapib, Consumer
Activist Advocacy Groups, Food and Drug Administration(FDA), Dr. Robert Jarvik
"This is a classic case of unjust enrichment. Pfizer has built colossal sales of Lipitor through
the pipeline of third-party payors1 such as our clients and countless other drug plans -
including Medicaid2 and Medicare3 - much of it based on prescriptions that the FDA's4
guidelines say never should have been written in the first place." 5
- Jay Eisenhofer of Grant & Eisenhofer, P.A.6 , in March 2006.
"Pfizer has and continues to take seriously its responsibility to provide appropriate
information to physicians and patients and to comply with all federal laws and regulations
regarding the promotion of our medicines. Based on the information provided to us, we
believe there is absolutely no merit to the claims regarding the promotion of Lipitor." 7
-Pfizer Inc. in March 2006.
Lipitor Marketing - Under A Cloud
In March 2006, some labor unions in the US sued Pfizer Inc. (Pfizer), the largest
pharmaceutical company in the world, accusing it of fraudulent marketing of its cholesterol-
21
reducing drug,8 Lipitor (Atorvastatin). In a class-action suit,9 the plaintiffs accused Pfizer of
off-label10 promotion of Lipitor, which led to the unions and other third-party payers, as well
as Medicaid plans at the state-level in the US, paying billons of dollars in unwarranted Lipitor
prescriptions between 2001 and 2006. They claimed that Pfizer had illegally marketed Lipitor
to people who had high blood cholesterol but with low risk of heart attack.
In such cases, according to federal guidelines, only lifestyle modifications like diet and
exercise were warranted. The US Attorney's Office in Brooklyn, New York, USA, was
investigating Pfizer's marketing practices for Lipitor. Pfizer denied the allegations of off-label
marketing and said that there was no merit to the case. They also announced that they were
fully co-operating with the federal investigation.
With sales of US$ 12.2 billion in 2005, Lipitor was the largest selling pharmaceutical brand
in the world. The huge success of the brand was attributed to Pfizer's strong marketing
efforts. But in late 2005 and early 2006, Pfizer's marketing of Lipitor came under close
scrutiny.
In early 2005, its decision to combine its experimental drug11 Torcetrapib with Lipitor12 raised
concerns as it was seen as a ploy to extend the patent of Lipitor which was due to expire in
the year 2011.
In September 2005, a class action suit was initiated by consumer advocacy groups against
Pfizer for promoting Lipitor to women and the elderly.
The plaintiffs accused Pfizer of deceptive marketing as there was no evidence that Lipitor
reduced the risk of heart disease in these segments of the population.
Pfizer was also a subject of national debate in the US for its direct-to-consumer (DTC)
advertising of Lipitor. In April 2006, the Prescription Access Litigation Project13 (PAL),
which draws attention to pharmaceutical companies that promote prescription drugs
"excessively", gave its Bitter Pills award under the "Got Cholesterol?"14 category to Pfizer,
for its DTC advertising of Lipitor.
In June 2006, two people sued Pfizer accusing it of withholding information about the
potential side-effects of Lipitor. They alleged that Lipitor's side-effects included serious
problems such as memory loss and damage to the nervous system.
Lipitor also had its share of legal battles with generic manufacturers. Pfizer was engaged in
patent litigation over Lipitor in many countries against the Indian drug company Ranbaxy
Laboratories Ltd. (Ranbaxy). The original patent of Lipitor was upto 2006, but Warner-
Lambert (WL) who owned the patent then, had managed to extend it to 2011 by adding a
calcium salt to Atorvastatin. Ranbaxy challenged the Lipitor patent saying that it was invalid.
Ranbaxy contended that the molecule for which the second patent was awarded was very
similar to the first patent and should not have been issued at all
It said Pfizer had deliberately misrepresented some details in its patent claim. In the court
battles that followed, Pfizer prevailed over Ranbaxy in the US, the UK, Norway, Romania
and Peru. However, Ranbaxy tasted success in April 2006, when a five-judge panel of the
Supreme Patent and Trademark Board of Austria unanimously affirmed an earlier ruling
invalidating Pfizer's claims for patent protection of Lipitor in Austria. Another cause of
concern was the slowing down of sales of Lipitor after October 2005. Analysts attributed this
slackening of sales to product substitution as more patients were being put on competitor
brand Zocor (Simvastatin) by doctors, as they were expecting a low-priced generic version of
Zocor to come on the market soon.
22
Zocor was scheduled to go off-patent on June 23, 2006. The launch of Pfizer's combination
drug of Torcetrapib/Lipitor was delayed beyond its 2008 scheduled date. Some analysts said
it would not be launched before 2010, and this delay was expected to be a major setback for
Pfizer. Pfizer denied the allegations about improper marketing of Lipitor. The company said
that it took its responsibility of providing appropriate information to the medical profession
and patients seriously and complied with all federal laws and regulations while marketing its
drugs.
A Pfizer spokesman said that the case was without merit. Pfizer also vowed to contest the
lawsuits regarding Lipitor's alleged side-effects in an aggressive manner when they came to
court as the allegations lacked any scientific basis.
Pfizer was also optimistic about Lipitor's prospects in 2006. The company had set a global
sales target of US$ 13 billion for Lipitor in 2006, i.e., a growth of 6.5 percent over the
previous year. The company announced that despite the challenges, it was adopting an
aggressive marketing strategy and was confident of achieving the targets set.
Pfizer's chairman and CEO, Henry A. McKinnell (McKinnell) said, "We are committed in
our efforts to reach our full-year revenue goal for Lipitor, although it is an aggressive target
given a challenging environment and a slower-than-hoped-for start to the year." However,
some analysts felt there was insufficient basis for such optimism.
Background Note
Pfizer's beginnings were very humble. The Charles Pfizer & Company was set up in
Brooklyn, New York, in 1849 by cousins Charles Pfizer and Charles Erhart (Erhart), two
young entrepreneurs from Germany. Santonin, a palatable anti-parasitic was the company's
first product. In 1862, during the American Civil War, Pfizer increased production of its
chemicals and drugs, which doctors of the Union Army used, to treat wounded and sick
soldiers. After Erhart's death in 1891, Charles Pfizer bought the company's shares from
Erhart's son, William, to consolidate his ownership of the company
By 1899, Pfizer had become a leader in the American chemicals business with a product
portfolio comprising citric acid, camphor, cream of tartar, borax, and iodine. It had also
begun to export to a number of countries.
In 1900, Pfizer filed an official certificate of incorporation in the state of New Jersey, with an
authorized capital of US$ 2 million. In 1906, Charles Pfizer died, leaving behind a company
with sales that exceeded US$ 3 million. In 1914, John Anderson was appointed as the
company's first Chairman and he served in this capacity until 1929.
In 1936, Pfizer became the world's leading producer of Vitamin C. By 1939, Pfizer had come
to be recognized as a leader in fermentation technology. During World War II, Pfizer became
popular across the world as it was the world's largest producer of the 'miracle drug',
penicillin...
Lipitor -The Super-Blockbuster
The Rise of the Statins
In the 1950s, a connection between heart disease and hypercholesterolemia was
established. After the discovery of Low Density Lipoprotein (LDL) and High
Density Lipoprotein (HDL), researchers linked elevated levels of LDL in the body
to increased risk of heart attack, while elevated levels of HDL were found to be
protective. Scientists found that an enzyme in the body known as HMG CoA
23
reductase helped in the conversion of a compound HMG CoA into another
compound that was a precursor to the development of cholesterol.
With this discovery, the search for potential drugs that inhibited the HMG CoA reductase and
stopped cholesterol production in the body began. Such drugs were called 'HMG CoA
reductase inhibitors' or 'statins'. In the 1960s, the first statin, Pravastatin was discovered by
Sankyo Co., Ltd. (Sankyo) of Japan. Pravastatin was later launched in the US, under the
brand name Pravachol, by Bristol-Myers Squibb (BMS)...
Illegal marketing?
In March 2006, the Fund of Teamsters Local Union 863 filed a class-action suit against Pfizer
in the US District Court in New Jersey accusing Pfizer of illegally marketing Lipitor. The
lawyers representing the plaintiffs claimed that Pfizer encouraged the use of Lipitor for
patients with high blood cholesterol but otherwise at low heart attack risk and was thus
'unjustly enriched'. According to federal guidelines, in such cases, lifestyle modifications like
diet and regular exercise were enough to reduce the risk of a heart attack. This prompted a
federal investigation into the marketing of Lipitor by the US Attorney's Office in Brooklyn,
New York. The Wall Street Journal reported that Pfizer was under increasing pressure
because of off-label sales of Lipitor...
More Problems for Lipitor
Zocor and Pravachol Go Off-patent
As of end 2005, the statin market was looking good. According to IMS MIDAS Quantum, the
class of 'cholesterol and triglyceride reducers' was the biggest therapy class of 2005, with an
estimated global sales of US$ 32.6 billion and growth of seven percent (Refer to Exhibit VIII
for the top ten therapy classes in 2005).
The major brands competing in the market were Lipitor, Zocor, Vytorin, Crestor and Zetia
(Refer Figure III for the four leading statins of 2005 by revenue).
All the other brands were trying to nip at the market share of the leader Lipitor. However, the
market would face significant changes as two major brands, Pravachol and more importantly
Zocor, were to go off-patent in 2006. This would leave the market open to generic versions of
these brands...
Pfizer on the Marketing Offensive Again
Pfizer had set itself a stiff target of more than US$ 13 billion for Lipitor in 2006. It felt that
its slow growth in the first quarter of 2006 notwithstanding, it could achieve the target. Sales
of Lipitor in the first quarter of 2006 were at US$ 3.11 billion with a growth of one percent as
compared to the first quarter of 2005. Analysts said that the sales of Lipitor were slow due to
tough competition from Vytorin, jointly marketed by Schering-Plough Corp. and Merck.
Outlook
Analysts felt that Pfizer could face more lawsuits regarding off-label marketing of Lipitor in
the future as states battled with the costs due to expanded Medicare drug coverage. "States
are going to tighten up this sort of thing because it's a way to control Medicare costs. If suits
like this start proving to be successful, then you'll start to see a cascade effect," said Les
Funtleyder (Funtleyder), analyst for Miller Tabak.
Exhibit
24
Lipitor Marketing - Under A Cloud
Background Note
Lipitor -The Super-Blockbuster
Illegal Marketing?
More Problems for Lipitor
Pfizer on the Marketing Offensive again
Outlook
Exhibit
References:
1] The person by whom a note or bill has been or should be paid (also known as payer). (Source:
Merriam-Webster's Dictionary of Law, www.dictionary.reference.com)
2] In the US, Medicaid is a program managed by the states and funded jointly by the states and the
federal government to provide health insurance for individuals and families with low incomes and
resources.
3] Medicare is a health insurance program administered by the US government, that covers people
who are either aged 65 and over, or who meet other special criteria (e.g. disabled).
4] FDA or the Food and Drug Administration of the US is the government agency responsible for
regulating food (human and animal), dietary supplements, drugs (human and animal), cosmetics,
medical devices (human and animal), biologics, and blood products in the US. It approves drugs for
certain indications and provides guidelines for use of the drugs.
5] "Off-label Marketing for Lipitor's Now the Focus of a Class-Action Suit,"

www.pharmamanufacturing.wordpress.com, March 30, 2006.
6] Grant & Eisenhofer, P.A., based in Wilmington, Delaware, USA, founded in 1997, is a law firm
experienced in handling civil suits in state and federal courts across the US. It was founded in
1997.
7] Jim Edwards, "Teamsters Sue Pfizer over Alleged Illegal Marketing," www.brandweek.com, March
28, 2006.
8] Cholesterol is a fatty substance synthesized in the human body. Increased level of cholesterol in
the blood is associated with a high risk of heart diseases. A number of drugs are used to reduce the
level of cholesterol. Of these, the statins were the most popular. Lipitor belongs to the statin group
of drugs.
9] A class-action suit is a lawsuit brought by one or more plaintiffs on behalf of a large group of
others who have a common interest. (Source: www.thefreedictionary.com)
10] In the US, the FDA requires numerous clinical trials to prove a drug's safety and efficacy in
treating a given disease or condition. If satisfied that the drug is safe and effective, the drug's
manufacturer and the FDA agree on specific language describing dosage, route and other
information to be included on the drug's label. Off-label use is the practice of prescribing drugs for
a purpose outside the scope (most often concerning the drug's indication) of the drug's approved
label. Though off-label use of a drug by a doctor is not illegal, it is illegal for the marketer to
promote or market an off-label use of the drug.
11] A drug still in the experimental development stage.
12] Torcetrapib is a drug that was being developed to treat elevated cholesterol levels and prevent
heart disease. It results in higher levels of "good" cholesterol and lower levels of "bad" cholesterol.
As its action complements that of Lipitor, Pfizer planned to launch it as a combination pill that was
expected to be very effective in the treatment of elevated cholesterol levels.
13] PAL, established in 2001, is a national coalition in the US of around 120 organizations, including
consumers, seniors, healthcare, labor, legal services, women's health and human service groups. It
works to make prescription drug prices more affordable for consumers, using class-action litigation
and public education. (Adapted from www.prescriptionaccess.org)
14] The "Got Cholesterol?" award was one category of the 2006 Bitter Pills Awards for
25
"overpromoting expensive brand-name statins." It is a clever take on the US dairy industry's
famous marketing campaign titled "Got Milk?"
Marketing Viagra in India

Pub Date : 2006
Organization : Pfizer Inc. Pharmaceutical and Healthcare
Industry : Pharmaceutical and
Healthcare
Countries : India, USA
Abstract:
This case is about Pfizer's launch of its popular drug, Viagra, in India. Viagra was first
launched in the US, in 1998, with an extensive public relations campaign. Pfizer's
promotional efforts also included celebrity endorsements and Direct-to-Consumer (DTC)
advertisements. Though Viagra was a huge success for Pfizer initially, after seven years since
its launch, the worldwide sales of Viagra had become stagnant. Pfizer introduced Viagra in
India with a view to improve the sales of the drug. The market dynamics in India were very
different from that of the US
Viagra had to face competition from other low-priced generic versions of the drug. Moreover,
brand-specific DTC advertisements were not allowed in India. The case discusses Pfizer's
marketing strategy when it launched Viagra in India.
Issues:
» Understand the critical success factors for a pharmaceutical company to make a successful
entry in a new therapeutic segment.
» Understand the issues and constraints faced by pharmaceutical company in launching a

globally successful brand in a new market.
» Understand the challenges faced by a company when launching its product in a price
competitive environment.
Keywords:
Pfizer Inc, Product Launch, Marketing Communications Strategy, Premium Pricing, Niche
Marketing, Price Competition, Viagra, Sildenafil Citrate, Erectile Dysfunction, Indian
Pharmaceutical Industry, Cialis, New Product Development, Celebrity Endorsement,
Business Environment, Drug Discovery
"We strongly believe that there is an unmet need of the doctors. Patients are actually seeking
introduction of the original Viagra." 1
- Kewal Handa, Managing Director, Pfizer Ltd. (PL),2 in 2005.
26
"I don't think doctors will prescribe Viagra. When we have economical options available,
why prescribe the costly one?" 3
- Dr. B.K. Roy, Endocrinologist and Hormone Specialist, Sex and Hormone Center,
New Delhi, in 2005.
'Vitamin V' For India
On December 26, 2005, Pfizer Inc. (Pfizer), the largest pharmaceutical company in the world,
rolled out its blockbuster drug Viagra (Sildenafil citrate) in India. Viagra, a popular and
widely used drug to treat erectile dysfunction4 (ED) in men, is also known by various
nicknames such as 'Vitamin V' and 'the little blue pill'.
Pfizer launched Viagra in India seven years after the launch of the drug in the US. The
process patent regime 5 prevalent in India at the time the drug was launched in the US made
Pfizer apprehensive about generic competition from Indian companies and hence its
reluctance to launch Viagra in India earlier.
As a result, various Indian pharmaceutical companies had launched their own generic clones
of the drug since 2001.
As of 2005, there were more than 40 local versions of the drug available in the Indian market.
Pfizer also surprised most industry analysts and doctors by pricing Viagra at Rs 594 for a 100
mg tablet and Rs 463 for a 50 mg tablet. And this when most of the local versions of the drug
were available at Rs 20 or less (for a 50 mg tablet). Some industry experts felt that Pfizer's
launch of Viagra in India had come too late as there were already many local versions of the
drug available.
Many doctors too were of the opinion that ED patients did not get any additional benefit out
of Viagra, when compared to local versions, to justify its high price. However, despite its late
entry and premium pricing, Pfizer was confident of capturing 10%-15% of the ED market in
India within the first one to two years of Viagra's launch. The launch of Viagra in India came
at a time when the drug's global sales were stagnating. Competitor brands Levitra co-
marketed by GlaxoSmithKline plc (GSK) and Bayer AG, and more particularly Cialis
developed by ICOS Corp. (ICOS) and marketed by Eli Lilly & Co., (Eli Lily) were eating
away Viagra's market share.
Pfizer was targeting India's huge patient pool, as it was a new market that the company could
tap to improve Viagra's overall global sales. "India is expected to be a big market for us. It is
estimated that about 70-90 million men suffer from erectile dysfunction and this market is
only going to grow," said K.G. Ananthakrishnan (Ananthakrishnan), Senior Director of PL.
Within two months of its launch in India, Viagra seemed well on its way to surpass its target
for the year.
PL reported that Viagra had already cornered a 1.8% of the ED market in India. "We are
excited with the response we have received for Viagra. The value that Pfizer brings to the
table, with its extensive research and knowledge on erectile dysfunction and its management
is reflected in Viagra's excellent performance. Our YTD all India sales are Rs 1.50 crore (Rs
15 million) with Viagra doing well in all the cities we have launched it," explained
Ananthakrishnan.
Background Note
Pfizer's beginning was humble. The Charles Pfizer & Company was set up in Brooklyn, New
York, in 1849 by cousins Charles Pfizer and Charles Erhart (Erhart), two young
entrepreneurs from Germany. Santonin, a palatable anti-parasitic was the company's first
27
product. In 1862, during the American Civil War,6 Pfizer increased production of its
chemicals and drugs, which doctors of the Union Army used to treat wounded and sick
soldiers.
After Erhart's death in 1891, Charles Pfizer bought the company's shares from Erhart's son,
William, to consolidate his ownership of the company. By 1899, Pfizer had become a leader
in the American chemical business with a product portfolio comprising citric acid, camphor,
cream of tartar, borax, and iodine. It had also begun to export to a number of countries. In
1900, Pfizer filed an official certificate of incorporation in the state of New Jersey, with an
authorized capital of US$2 million. In 1906, Charles Pfizer died, leaving behind a company
with sales that exceeded US$3 million
In 1914, John Anderson was appointed as the company's first Chairman and he served in this
capacity until 1929. In 1936, Pfizer became the world's leading producer of Vitamin C. By
1939, Pfizer had come to be recognized as a leader in fermentation technology. During World
War II, Pfizer became popular across the world as it was the world's largest producer of the
'miracle drug', Penicillin.
In 1950, under the Chairmanship of John E. McKeen, Terramycin, a broad-spectrum

antibiotic that was the result of the company's first drug discovery program, became the first
pharmaceutical sold in the United States under the Pfizer label. In the same year, Pfizer began
its expansion into the overseas markets through the establishment of its International
Division. Between 1950 and 2000, many drugs were launched under the Pfizer label and
marketed across the world. This period was marked by rapid global expansion and explosive
growth...
Viagra - A Success Story in Marketing
Viagra was launched in the US in April 1998. And within a week of its launch, it had become
the fastest selling pharmaceutical drug in the country. Initially Viagra was developed as a
cardio-vascular drug, but the chance discovery of its 'unexpected side-effect', and subsequent
launch raked in billions for Pfizer (Refer to Exhibit III for Viagra's Timeline: From Chance
Discovery to Huge Commercial Success). Viagra contains the active pharmaceutical
ingredient (API) Sildenafil citrate, a phosphodiesterase type 5 (PDE-5) inhibitor, in tablet
form in two strengths 50 mg and 100 mg.
Viagra was the first scientifically proven oral drug for ED (Refer to Exhibit IV for How
Viagra Works). Media experts quipped that only a pill developed for immortality could
possibly upstage the buzz generated by the launch of Viagra...
The PR Campaign
Pfizer launched Viagra in 1998 in what was seen as a huge Public Relations (PR) exercise.
As Viagra was the first approved drug for ED, Pfizer had to deal with the social and
emotional aspects of ED. Impotence was very touchy topic with a lot of stigma attached to it.
Any discussion on the subject was embarrassing for the men who suffered from it. The issue
also had religious and moral undertones, making it an extremely sensitive one. Pfizer's
foresight was evident when it sought approval from the Vatican and other religious
institutions for release of the drug...
Problems for Viagra

The Side Effect Scare
Even when Viagra was launched, there were reports in various medical journals that some
people who had taken the pill had suffered from heart attacks and 'sudden death'. Subsequent
28
studies associated this problem with people taking nitrates. Hence, Pfizer added nitrate
contraindication to the label of Viagra. In 2005, Viagra was associated with a rare form of
blindness called Non-arteritic Anterior Ischemic Optic Neuropathy (NAION)...
Market Dynamics for Ed in India
In 2005, it was estimated that over 90 million men in India suffered from ED . There was a
deep social stigma associated with ED in India. ED was considered as an emasculating failure
rather than a disease that could be cured. Therefore most people avoided talking about it
openly and only a few would have ever admitted to having ED. A majority of the population
considered the very subject of sex taboo. Small wonder then that very few people sought
medical attention for ED. However, analysts felt that given India's huge population, the
absolute number of people opting for treatment would still be high...
Marketing Viagra in India
PL's marketing strategy for Viagra in India was different from its strategy in the US, which
was Pfizer's biggest market for Viagra. This was because the market dynamics in India were
significantly different from that of the US.
Another aspect was that while Viagra was the first such drug to be launched in the US, there
were already many generic low-priced versions of the drug when PL launched Viagra in
India. PL also had to consider the fact that DTC advertisements of pharmaceutical products
were not allowed in India.
Premium Pricing
Prior to its launch in India, PL announced that it would price Viagra competitively. This gave
rise to speculation among various analysts. Some believed that Viagra would be priced at
around Rs 20 per tablet. Others believed that Viagra, being the original brand, would be
priced at around ten times the price of the local versions of the drug.
However, PL launched the brand at a price of Rs 463 (for 50 mg) and Rs 594 (for 100 mg)
for a single tablet. Although this price was on a par with its price in other Asian countries, it
was about 20 times higher than the prices of some of the local generic versions available in
the Indian market (Refer to Table V for Price Comparison of Viagra with Other Sildenafil
Citrate Brands in India).
Future Outlook
Due to its late launch in India, analysts felt that Viagra had surrendered its first mover
advantage. In 1998, when Pfizer launched Viagra in the US, it did not have to fight off
competitors. In India though, PL was like a new entrant fighting against well-entrenched
players in a multi-competitor setting and a "me too" environment.
Many doctors were skeptical about Viagra's prospects in India, in view of its high price. "The
colour is the same, the effect as well as the side-effects are the same," said Dr. Prakash
Kothari, a renowned sexologist, who had treated over 5,000 men with ED. Some doctors even
said that they would not prescribe Viagra because more affordable versions were available.
Exhibit
Exhibit I: Pfizer's Three Year Financial Summary
Exhibit II: Global Top Ten Pharmaceutical Companies
Exhibit III: Viagra's Timeline: From Chance Discovery to Commercial Success
Exhibit IV: How Viagra Works
29
Exhibit V: Pfizer's Promotional Initiatives for Viagra
Exhibit VI: Pfizer's Efforts to Ward off Counterfeiters
Exhibit VII: Viagra ADS- From Creating Awareness to Mischief
Exhibit VIII: Competing Brands & New Entrants in the ED Market
Exhibit IX: Brief Note on Viagra's Competitors in India
References:
1] Mrinalini Datta and Paresh Jatakia, “Despite Viagra's Cost, India Beckons Pfizer,” www.iht.com, December 22, 2005.
2] Pfizer Ltd. (PL) is the Indian arm of the global pharma major, Pfizer Inc., USA (Pfizer). Pfizer established its business in
India in 1950 and was ranked 8th in India in terms of sales, with a market share of 2.7% of the Indian pharmaceutical
industry in 2005.
3] "Counting on the Viagra Brand in India,” www.iht.com, December 22, 2005.
4] Erectile dysfunction is the inability to develop and maintain an erection for satisfactory sexual intercourse or activity.
Erectile dysfunction is the preferred term rather than the more commonly used term 'impotence'.
5] Before 2005, India only recognized process patents, not product patents. As a result, Indian companies were free to
manufacture and market a copy of the drug as long as the process of manufacturing was different from the original drug.
6] The American Civil War (1861-1865) was a civil war between the United States of America, called the Union, and the
Confederate States of America, formed by eleven Southern states that had declared their secession (withdrawals) from the
Union. The war resulted in approximately 560,000 deaths. The Union won a decisive victory.
Amway's Indian Network Marketing Experience

Case Length : 9 Pages For delivery through courier (within India):
Period : 1994 - 2000 Rs. 300 + Rs. 25 for Shipping & Handling
Themes
Organization : Amway Indian, Eureka Direct Marketing
Forbes
Industry : Business Services &
Equipment
Countries : India
Abstract:
The case 'Amway Indian Network Marketing Experience' examines in detail the experiences
of the leading global direct marketing major Amway in India. In the initial stages, Amway
had to face a host of problems, which are explored in detail. The case then studies the
remedial measures taken by the company to counter these problems. The case also provides a
brief introduction to the concept of multilevel marketing, with a note on the Indian MLM
industry.
Issues:
» Multilevel Marketing
Keywords:
30
Amway Indian Network Marketing Experience, global, direct marketing, Amway, India,
problems, remedial measures, multilevel marketing, Indian MLM industry, multilevel
marketing, traditional distribution, FMCG sector, Amway
Our biggest challenge is not how to expand the market in India, but how to convince the
indifferent Indian consumers about the world-class quality of Amway Products. The quality
of the product is Amway's strength."
- Sudershan Banerjee, CEO & MD, Amway India in 1999.
A Dream Gone Awry
In the late 1990s, the global direct selling giant Amway had to contend with increasing
doubts regarding its survival in India. The company that had become synonymous with
network marketing or multi-level marketing (MLM)1 the worldover was beset with problems.
Media reports were quick to point out Amway's failure to sell the basic concept of direct
selling to the Indians.
Though the company managed to rope in a substantial number of distributors, the attrition
rate was at an alarming high of 60-65%. Most of the products that the distributors bought,
they consumed themselves. Estimates put the percentage of self-consumption at almost 50-
60% of the total volume.
(There were rumors that some distributors enrolled just to take advantage of the distributor's
margin of 18-30%). In the initial stages, when trials were the only criterion, this worked well.
However, this self-consumption did not translate into repeat purchases.
This was because the percentage of 'active' distributors at any given point of time remained at
a low level of 35-40%. Many people who joined in the initial frenzy returned the product kits
within the first month.
Company sources claimed that the returns constituted just 1% of the total strength, but rivals
and ex-employees put the figure at over 5%. Of the total distributors, only about 10% showed
reasonably high levels of activity.
To top it all, Amway was burdened with an image that had little basis in fact. Its products
began to be perceived as being very expensive and meant only for the premium segment.
A Dream Gone Awry Contd...
This was identified as the single biggest reason for the high attrition rate. What was
overlooked was the fact that almost all Amway products were concentrates. When used in the
proper diluted form, the cost per use of each product worked out to be at par with (and in
some cases, even lower than) the nearest competitor's products.
For instance, the product named LOC (priced above Rs 320 for a 1-liter pack), when diluted
gave around 165 bottles. The cost per usage was thus very low. Either the distributors were
themselves not aware of this fact, or they were unable to communicate this to the customers.
Since the distributors themselves were unsure about the price-value equation of the products
they were selling, they could not effectively convince the consumers either. Amway also had
to contend with customers complaining of poor customer service on the part of the company.
Analysts commented that as long as the volume of products that moved through the network
was high, network market such as Amway were satisfied.
Even though customers complained of the lack of services, the company deemed it more
beneficial to go for higher salesforce motivation programs rather than undertake customer
service initiatives. This was largely due to the fact that the company was almost never
31
involved directly with the end-consumers and the sales volumes were the end of all
discussions.
Making of The Dream
Privately held by the DeVos and Van Andel families of US, Amway, short for American
Way, was set up in 1959. Amway and its publicly traded sister companies supported 53
affiliate operations worldwide. About 70% of Amway's sales were outside North America.
With over 12,000 employees around the world, Amway was renowned for its strong R&D
centre in Michigan, which had 24 laboratories. Amway was present in over 80 countries and
its manufacturing plants were located in US, Hungary, Korea, China and India
The company had over 3 million distributors across the world. Besides its direct selling
portfolio of 450 products, Amway promoted around 3,000 products through catalogue sales2
as well. Amway had received permission from the Foreign Investment Promotion Board
(FIPB) in 1994, to invest $15 million in the Indian operations and to source products from
India...
Picking Up The Pieces
Amway soon woke up to the reality that it had to take steps to put its MLM machinery back
to the track. For this, it had to first identify where it had gone wrong. Amway realized that
like most direct marketing networks, it had hoped to leverage the global promise of the
lucrative business opportunity for its distributors...
'Network'ing Its Way Into The Future
By 2004, Amway planned to become a Rs 1000 crore company with a physical presence in
198 centers across India.
The company also revealed that by 2002, it would be selling all the 450 Amway products that
were available abroad, in India.
As part of its plans to tap unexplored markets, Amway announced an ambitious expansion of
its distribution infrastructure in Andhra Pradesh, which included setting up a warehouse.
Once the marketing business in urban areas was strengthened, Amway planned to turn tis
attention to untapped rural areas as well...
The Indian MLM Journey
MLM was the fastest growing sector of the direct selling industry worldwide. In 1988, the
total revenue generated by MLM was $ 12 billion, which doubled to $ 24 billion by 1998.
The direct-marketing industry in India was about Rs 6 billion in 1999. This was a growth of
62% over the previous year.
In the pre-liberalization era, network marketing in India was usually in the form of various
chit fund companies like Sahara India. These had a system of agents, who simultaneously
mobilized deposits and appointed sub-agents for further deposit mobilization.
Companies such as Eureka Forbes and Cease-Fire pioneered the direct selling system in the
country with a sales force that was trained to make direct house-to-house sales.
Oriflame International was the first international major to begin network marketing
operations in India in 1995. This was followed by the entry of Avon India in late 1996
32
Exhibits
Exhibit I: Amway Products Available In India (April 2001)
References:
1] The MLM system utilized a multi-tiered salesforce of independent distributors - none of them
employees - to sell products directly to consumers. These distributors earned commissions at two
levels - the first, the difference between the distributor's cost and selling prices, and second, a
proportion of the commissions earned by other distributors recruited. MLM thus completely
bypassed the retail chain and cut costs of the traditional distribution system.
A typical MLM setup began with the recruitment of a group of distributors who paid a registration
fee and picked up product kits. Once these goods were sold, the distributors were given the next
lot. The more a distributor sold, the higher the commission. Besides selling the goods, the
distributors were also expected to hire new distributors for selling the company's products. The
recruiting distributor also got an extra commission based on the sales effected by the distributors
hired by him/her. As for the company, the compulsion on the part of the distributors to recruit more
and more distributors led to its network penetrating very deep among the consumers. Also, the
actual cost of marketing never exceeded 25% of the selling price on an average. As the
distributor's primary commission was a mark-up on the selling price, the only outgo for the MLM
team was the commission, which averaged at 9% and at peak levels stood at 21%. These distributo
in turn, paid commission to the 'down-the-line' distributors out of their own earnings.
Fast moving consumer goods targeted at niche markets such as specialist cosmetics or premium
fragrances were typically the most suitable for a MLM setup. Also, if the products were portable
and needed to be demonstrated-vacuum cleaners for instance the personal interaction that MLM
facilitated, helped a lot. Products, which were neither purchased very often nor very rarely, and
were neither too expensive nor too cheap could be marketed well through this system.
New Product Development at Schwan Food Company-

Innovation through Communication
Teaching : Available Handling Charges
Note
Organization : Schwan Food Company Themes
Industry : Food & Beverages Innovation
Countries : USA
33
Abstract:
In 2003, the world's largest frozen pizza processing company, the US-based Schwan Food
Company (Schwan), won a lot of recognition for one of its new products, Red Baron Stuffed
Pizza Slices. In the light of this, the case discusses how new product development was carried
out at this company, focusing on its unique 'innovation through communication' formula.
After providing information on Schwan's history, it examines the reasons why companies in
the US frozen pizza industry were forced to look at product development as a differentiating
factor in the early 21st century. Thereafter, it describes in detail Schwan's new product
development approach with respect to Red Baron Stuffed Pizza Slices.
Finally, the case provides some information on the company's product innovation led future
plans. The teaching note provides detailed guidelines as to how this case can be used for
explaining the new product development process.
Issues:
• Analyze the frozen pizza industry in the US and study the evolution of Schwan as one of the
leading players
• Understand the reasons why product development became a tool for deriving competitive
advantages for players in this industry
Keywords:
2003, world largest, frozen pizza, US, Schwan Food Company, Schwan, Red Baron, Stuffed
Pizza, Slices, new product development, innovation through communication formula,
Schwan's history, differentiating factor , 21st century, Red Baron Stuffed Pizza Slices,
product innovation, future plans
One of the first things we did was arrive at a process that would allow us to develop world-
class products through cross-functional teams."1
- Joe Gruber, New Product Development Manager, Schwan Food Company, in April
2003.
"This patent-pending technology, proprietary crust, triangular shape and microwave
susceptor make it the only retail product of its kind."2
- David Rettey, Senior Product Development Technologist, Schwan Food Company, in
October 2003.
An Effort Well-Rewarded
In October 2003, Prepared Foods3 declared the US-based snack foods company Schwan
Food Company (Schwan), as the winner of the '2003 Spirit of Innovation Awards.'
Schwan was given this award in the retail category for its newly launched product, Red Baron
Stuffed Pizza Slices.
Another leading industry publication, Stagnito's New Products Magazine4 too adjudged this
product as the best new product of the year. To top all these achievements, the renowned
publication, Refrigerated & Frozen Foods named Schwan the '2003 Processor of the Year.'
34
For the year 2002, Schwan also led the entire US food industry in terms of the maximum
increase in the number of new products launched. The company was way ahead of seasoned
food giants such as Kraft Foods, PepsiCo and Unilever (Refer Table I).
Interestingly, it was the only brand among the top nine rank holders that was not popular at
the global level. These developments meant a lot to Schwan since it had reportedly been
working hard for over two years towards introducing Red Baron Stuffed Pizza Slices.
Thanks to these awards and recognitions, the $3 billion, privately-held company established
itself firmly as one of the most innovative players in the intensely competitive US frozen
foods business.
In mid 2003, the company was the world's largest frozen pizza processor, and in terms of
market shares, was next only to the country's largest food company, Kraft Foods
More importantly, many of the new products introduced by Schwan were reportedly doing
well in the US market. Red Baron Stuffed Pizza Slices got off to a very good start with
customers across the US taking to them in a major way. In an industry where 75% of the new
products launched failed, this was indeed appreciable.
Industry observers were unanimous in their opinion that Schwan had taken the exercise of
new product development to never-before heights. Schwan sources too agreed that its
customer-centric approach towards developing new products was a unique one in that it
involved the entire company as well as certain external parties.
Darci Eckerman (Eckerman), the National Brand Manager for the Red Baron brand, had this
to say about the product development efforts behind the Red Baron Stuffed Pizza Slices,
"This is the most significant and innovative of Red Baron's products to date. The product is a
prime example of long-term strategy and teamwork.”
Background Note
About Schwan
Schwan was started as Schwan's Home Service (SHS), an ice-cream home delivery business
in March 1952 by the Marshall-based (in Minnesota, US) Marvin Schwan (Marvin). The
primary motive for starting this venture was to help Marvin's family dairy business survive in
the wake of unfavorable changes in the regulatory set-up.
Focused efforts on the part of the family helped SHS grow rapidly. In 1965, Marvin started
selling frozen pizza as well from the ice-cream delivery trucks to expand his product
portfolio.
The frozen pizza business proved to be very successful and Marvin decided to further explore
the possibilities in this area.
In 1969, SHS acquired a pizza factory in Salina (Kansas) and started selling pizzas to retailers
as well as to institutional buyers such as schools, universities and hospitals.
Over the next three decades, the company grew largely through the acquisitions route.
The SHS label marketed frozen pizzas under three brand names: Tony's, Freschetta and Red
Baron. The Red Baron range was introduced in 1976 as an umbrella brand to offer
'throughout the day' snacking solutions to customers...
35
Excerpts
The Need for Product Innovation

The US pizza business had grown at a healthy pace since its inception in the 1960s (Refer
Exhibit V for information on the pizza business till the 1960s). In 1985, pizza was ranked as
the fifth most popular food in the country. By the late 1990s, the industry was growing at 8%
per annum with yearly sales of $2 billion.
In 1999, pizza became the most popular food in the US. Significantly, of the four broad
segments, dine-in, take-away, home-delivery and frozen, the last was growing at the fastest
rate. In fact, frozen pizza was growing the fastest within the entire US frozen food industry
(Refer Table III for information on frozen food industry trends and Table IV for a
comparative look at frozen pizza segment's growth).
The reason behind the fast growth of the frozen pizza segment was the introduction of the
'rising crust' technology in the mid 1990s. By using this technology, it became possible for
customers to get restaurant/take-away/home-delivery quality pizza at home...
The Red Baron Style of New Product Development
While it was true that competition made it important for Schwan to focus on developing new
offerings, there was another factor that fueled its decision to launch a truly innovative
product. The company was quick to realize that the single-serve segment lacked a good
quality, convenient and universally appealing product...
Innovating its Way into the Future
Though detailed information on the sales performance of Red Baron Stuffed Pizza Slices was
not available in late 2003, media reports indicated that customers had taken to the innovative
and convenient product in a major way.
Some analysts believed that the slices could be a major revenue generator for Schwan in the
near future. Meanwhile in November 2003, Schwan revealed plans to double overall sales by
2008. This was to be done on three fronts - globalization, product innovation and marketing.
Exhibits
Exhibit I: The Spirit of Innovation Awards - Judgement Criteria
Exhibit II: Schwan Food Company - Product/Brand Profile*
Exhibit III: Schwan Food Company - The Structure
Exhibit IV: A Few Products from the Red Baron Stable
Exhibit V: The Pizza Industry in the US - Early Days
References:
1] 'Red Baron Soars with Teamwork,' www.foodprocessing.com, April 2003.
2] 'The Slice of Life,' www.preparedfoods.com, October 2003. A susceptor refers to a metallic patch
that is attached to microwaveable food packages.
3] Prepared Foods is a US-based business-to-business publication that tracks

companies/organizations involved in developing, manufacturing, processing, packaging and
marketing of prepared foods. Every year, it sponsors the 'Spirit of Innovation' awards for the most
innovative food products launched in the retail and food service businesses. These awards are
highly regarded by players in the foods business (Refer Exhibit I for the criteria on which the
competing entries were judged).
36
4] Another respected publication in the food and beverages industry devoted exclusively to new
product related issues, Stagnito's New Products Magazine is a tabloid published by the US-based
Stagnito Communications Inc. The magazine Refrigerated & Frozen Foods is also published by the
same company, focusing on the latest developments in the refrigerated and frozen food industry.
5] 'Red Baron Soars with Teamwork,' www.foodprocessing.com, April 2003.
Price Optimization at Northern Group Retail

Note
Organization : Northern Group Retail Themes
Industry : Retailing Innovation
Countries : Canada
Abstract:
The case discusses the implementation of price optimization software at Northern Group
Retail, a major clothing and accessories retailer based in Toronto, Canada. The Northern
Group was experiencing a decline in performance due to its pricing strategy, which followed
nation-wide pricing rather than zonal pricing.
Due to this, the company was not tuned-in to local conditions and implemented the prices
uniformly. This led to the company losing out on substantial revenues by implementing
mark-downs in places where the goods had the potential to sell at full price.
Issues:
• To understand the critical nature of pricing strategy, especially in the retail sector.
• To compare zonal pricing strategy with uniform pricing strategy and analyze the suitability
of each in different situations.
Keywords:
Implementation, price optimization, software, Northern Group Retail, clothing, accessories,
retailer, Toronto, Canada, pricing strategy, zonal pricing, tuned-in, local conditions, prices
uniformly, substantial revenues, implementing, mark-downs, goods, full price
Price is the number one profit lever in any company."
- Daphne Carmeli, co-founder, president, and CEO of Metreo1 in 20032.
"After a few early implementations estimating returns in the millions, companies are looking
at pricing applications as a way to do the unthinkable in a sluggish economy: Grow profits
by increasing revenue, not cutting costs."
- Kevin Scott, senior research analyst at AMR Research in 20033.
"We've adopted a mentality that selling is not just about merchandising anymore. We're
adding scientific tools to the human merchandising process."
37
- Michael Stanek, CFO of Northern Group Retail in 20034.
New Software Begins to Pay
During the holiday shopping season in December 2002, Northern Group Retail (Northern
Group), a major clothing and accessories retail chain based in Toronto, Canada, recorded an
additional gross margin of $60,000 on the sale of its merchandize, courtesy, a new price
optimization software that the chain had installed a few months earlier.
Traditionally, the chain would have marked down prices of some of its winter merchandize
by 30 per cent in mid-December. However, the new software suggested going at full price,
for some more time because it calculated that the merchandize still had demand potential at
full price
The management decided to take this advice and was able the sell the entire stock at full
price, benefiting from the greater margins that the decision reaped.
Had they gone ahead with marking down the prices, their revenues would have been $60,000
lower. “Traditionally, companies mark down items before Christmas. The system told them,
based on consumer demand, to sell at full price. They trusted the system and got a much more
meaningful margin,” said Anthony Karabus, the CEO of Karabus Management Inc
(Karabus), a retail consulting firm of Canada, which helped Northern deploy the price
optimization software.5
Price optimization software was expected to help put the ailing Northern Group back on its
feet. Although the Northern Group brands had good recognition and demand, the company
was unable to make enough profits from them.
The new software was expected to enable the company to reap the best possible returns from
each SKU6, by selling it at the highest possible price in relation to demand. Northern Group
was expected to post its first profit in three years in January 2004.
Background Note
Northern Group was set up in 1985 as a subsidiary of FW Woolworth Company
(Woolworth). Woolworth was founded in the US in 1911, by Frank and Charles Woolworth.
It was five-and-ten cent7 store selling general merchandize. The stores became very popular
in the US and Canada.
The business peaked in the 1950s and 1960s, when there were over 1000 five-and-ten cent
stores in the US. Woolworth also founded a discount chain called Woolco in 1962.
However, due to increased competition from other discount stores, notably Wal-Mart8 and
increased urbanization, Woolco lost its appeal and business began to fall. Eventually, the
chain was shut down in the US in 1982. In Canada, however, it operated till 1994, when the
144 stores operating in the country were sold to Wal-Mart.
In addition to Woolco, the company ran general merchandize stores; it also operated a
number of other retail chains, including Foot Locker, Champs sporting goods, Kinney Shoe,
and Northern Group apparel shops.
The Woolworth company ran into trouble in the early 1990s due to outdated business
methods and increasing competition. In 1994, the newly appointed CEO Roger Farah,
undertook a restructuring of the company to put it back on its feet.
38
He realized that the five-and-ten-cent store concept had lost its appeal and shut down 400
stores operating in the US and Canada.
In 1997, he changed the name of the company to Venator Group Inc. (Venator). In the late
1990s, the performance of the Northern Group stores also began to decline. Analysts
attributed the decline to its outdated pricing and inventory management systems and
increasing competition in the apparel market from a growing number of speciality dealers...
Excerpts
The Northern Group under York

Soon after taking over the Northern Group, York conducted a research to analyze the reasons
for the poor performance of the stores. The analysis revealed that the Northern Group brands
had a loyal customer following and good brand recognition in Canada. The poor performance
was a result of inefficient internal processes. Too many retail locations also diluted the
brand...
The Price Optimization System
York implemented a price optimization software called Pricing4Profit, which was developed
by a company called ProfitLogic.
The integration of the software with the business processes used at Northern Group began in
August 2002 and continued upto mid-September.
Northern Group provided ProfitLogic with three years of SKU data to allow the software
vendor to establish a pattern for inventory movement and develop predictive models.
Northern Group also installed a new Sun platform in the company's technical environment to
run the new technology (Refer Exhibit-II). After dealing with tool interaction and
configuration needs, ProfitLogic began a four-week project of adjusting the analytical engine
of the software to meet the specific needs of Northern Group.
Within that time frame the retailer finalized business process, tested strategies and developed
training materials to accelerate the deployment of technology in the company. The new
technology was formally rolled out in mid-November...
Benefits Obtained
Northern Group obtained significant benefits through the implementation of price
optimization software. Firstly, it allowed the company to maximize returns and obtain the
highest margins possible, by providing a scientific tool which determined the ideal prices at
which to sell the given merchandize. The price was fixed on the level of demand that the
software expected for the merchandize. If it anticipated that the demand would fall, it
recommended a corresponding lowering of prices, so that customers were always offered
what they were ready to pay for a given item at a given time...
Exhibits
Exhibit I: The Northern Group Brands
Exhibit II: The Technology Environment at Northern Group
Exhibit III: The Future of Price Optimization Applications
References:
39
1] Metreo Inc. aids industrial manufacturers in optimizing negotiated pricing for industrial products such as electrical control
and power distribution equipment.
2] Emily Kay, Optimize Pricing to Maximize Profits, Solutions Frontline, September 1, 2003.
4] J. Bonasia, New Software Manages Price Cuts, www.khimetrics.com, March 2003.
6] SKU stands for Stock Keeping Unit and is a number associated with a product for inventory
purposes.
7] Five-and-ten-cent stores sold discounted general merchandise at fixed prices, usually five or ten
cents.
8] A very successful discount store based in the US, Wal-Mart was well known around the world for
its huge stores which carried a large variety of general merchandize at very low prices. By 2003,
Wal-Mart had over 4000 stores around the world.
Repositioning Dabur
Note
Organization : Dabur Themes
Industry : FMCG Repositioning
Countries : India
Keywords:
Dabur, Brand Repositioning, Brand Architecture, Brand Equity, Umbrella Branding, Brand
Management, 4Ps of Marketing, FMCG Industry, Vision, Strategic Intent, Core Values,
Vatika, Anmol, Real and Hajmola.
Abstract:
The case deals with the restructuring initiatives Dabur took in the early 2000s. In order to
cater to a wider audience, Dabur decided to reposition itself as an FMCG company with a
herbal plank, moving away from its earlier image of an Ayurvedic medicine manufacturer.
In order to convey a new vibrancy, the company has adopted new product offerings and new
packaging. Dabur's promotional campaigns includes leading Bollywood actors and sportstars.
Dabur moved away from an umbrella branding strategy and went in for individual branding.
It pruned products which were not aligned with its brand architecture.
It also took concerted steps towards geographical expansion to international markets, and
within India, focused on regions like southern India, which it had earlier neglected. The
company's revenues in 2004-05 reveal that the changes undertaken by the company have
started showing results.
40
Issues:
The case is designed to help the students to:
• Understand why a company moves away from its core platform.
• Understand the strategies adopted by a company to change its core platform.
• Understand how confusion about a brand sets in in the mind of consumer because of the use
of the same brand name for diversification into different areas.
• Understand how a brand is repositioned.
• Understand how alignment of product, price, promotion and place is brought about.
• Understand the marketing activities undertaken to rejuvenate a brand.
• Understand how changes in demographics and psychographics affect an organisation's

vision.
• Understand how acquisitions can add value to the marketing strategy of a company.
Our research showed that consumers found it difficult to distinguish Dabur as a corporate
brand and as a master brand. The positioning was unclear to the public. So, we decided to
embark on a brand recast to identify brands based on their product properties. This
essentially means that Dabur is shedding its age-old umbrella brand strategy, where its
entire product portfolio was under one roof.
- Sunil Duggal, CEO, Dabur India Limited in 20041.
Introduction
In 2004, Dabur India Limited (Dabur) which started as a medicine manufacturer in 1884, was
ranked at number four in terms of sales among the Fast Moving Consumer Goods (FMCG)
companies in India. The company now has interests in hair care, health care, oral care and
foods as well (Refer Exhibit I). Though its spread into various segments has ensured that the
company's bottom-line has improved over the years, Dabur's positioning was not clear. In the
early 2000s, the company went in for a restructuring which included aligning Dabur's brand
architecture2 with Dabur's brand equity3; pruning products that did not align with the brand
architecture and launching new products (Refer Exhibit I and II).
The company focused on improving its sales revenue from southern India, which contributed
only 8 percent of the company's total revenue in 2003. At this time, Dabur identified its
ayurvedic platform as a driver of future growth and got its business units better aligned.
Moving away from using Dabur as an umbrella brand, the company shifted to individual
branding and came out with a new logo. The company tried to bring to its consumers its
Ayurvedic legacy with a contemporary feel. All these changes have improved the financial
performance of the company in 2004 as compared to 2003.
Background Note
Set up in 1884 by Dr S K Burman in West Bengal as a proprietary firm for the manufacture
of ayurvedic drugs, Dabur (an acronym of the name Dr Burman), started off with a direct
mailing system to send medicines to villages in Bengal.
41
Initially, the company marketed an allopathic drug, Plagin, to combat the then prevalent
epidemic of plague. In 1896, Dr. Burman set up a small manufacturing plant at Garhia near
Calcutta for mass production of chemicals and Ayurvedic drugs.
In the early 1900s, the next generation of Burmans took a conscious decision to focus more
on the Ayurvedic medicines market, as they believed that it was only through Ayurveda that
the healthcare needs of poor Indians could be met. In 1919, Dabur set up a Research &
Development laboratory to conduct research on Ayurvedic medicines and their
manufacturing processes as described in ancient Indian scriptures, and to develop processes
utilizing modern equipment to manufacture these medicines without reducing their efficacy.
The following year, Dabur set up manufacturing facilities for Ayurvedic Medicines at
Narendrapur (near Calcutta) and Daburgram (in Bihar).
Dabur also expanded its distribution network in Bihar and the North Eastern regions. In 1936,
the company was incorporated under the name Dabur India Pvt. Ltd. In 1940, Dabur
launched Dabur Amla Hair Oil, and in 1949, the company launched Chyawanprash in a tin
pack making it the first branded Chyawanprash in the country.
The company expanded its portfolio by adding oral care products in 1970. Dabur Lal Dant
Manjan was the first product to be launched under its oral care portfolio. In 1972, Dabur
shifted base from Kolkata to New Delhi and started production from a hired manufacturing
facility at Faridabad.
In 1978, Dabur launched the Hajmola tablet. Dabur set up 'The Dabur Research Foundation
(DRF),' an independent company, in 1979 to spearhead its research needs. In the same year
Sahibabad factory became operational and this unit was one of the largest and most modern
production facilities for Ayurvedic medicines in India at that time.
Dabur became a public limited company in 1986 and launched its first public issue in 1994
(Refer Exhibit III & 1V for the shareholding pattern, Vision, Strategic Intent and Core Values
of Dabur). In 2004, Dabur had three strategic business units: Family Products Division
(FPD), Health Care Products Division (HCPD) and Dabur Ayurvedic Specialties (DASL)
which contributed 45 percent, 28 percent and 27 percent respectively to Dabur's sales revenue
in 2003-04...
Excerpts
The Restructuring Exercise

Though Dabur diversified into number of areas, the image of Dabur was that of an Ayurvedic
company. In the public perception, Dabur products were associated with the 35-plus age
group. With almost seventy percent of India's population below 35, it appeared that Dabur
would be missing out on this mass market, which also had high disposable income...
Aligning the Brand Architecture
Dabur was looking for growth drivers which could leverage the herbal brand equity of the
company. "We decided to set the scale high, targeting at least a strong double-digit growth,"
said Sunil Duggal (Duggal), CEO, Dabur speaking about the growth plans the company set in
2003.
In order to achieve the targeted sales of Rs 20 billion by 2006, which translated to annual
growth of 15-20 percent for three years from 2004 to 2006, the company identified personal
and healthcare products as growth drivers. But there were gaps in Dabur's product range...
Getting the 4Ps Right
42
In 2004, Dabur launched a new range in juices called Coolers which included traditional
preparations like Aam Ka Panna, along with others like pomegranate and water melon juice.
"Consumers perceive this as the next best thing to having a fresh fruit...
Outlook
Dabur's repositioning exercise seemed to have achieved some success with a perceptible
increase in sales and net profit margin of the company in 2004 (Refer Exhibit IX).
Nikhil Vora, Vice President, Research, SSKI Securities commented, "What the company had
done is pretty positive and credible; it continues to innovate and renovate.
However, the company needs to keep the growth momentum in the categories in which it
leads like Chyawanprash, honey and herbal digestives.".
Exhibits
Exhibit I: Products of Dabur in 2004
Exhibit II: Products of Dabur in 2000
Exhibit III: Shareholding Pattern for Dabur India Ltd.
Exhibit IV: Vision, Stratgic Intent and Core Values of Dabur
Exhibit V: Summary of Financials from 1998-99 to 2002-03 for Dabur (Fmcg + Pharma)
Exhibit VI: Financials for Dabur FMCG for 2002-03 and 2003-04
Exhibit VII: The old and New Logo of Dabur
Exhibit VIII: What the New Logo Stands for
Exhibit IX: Earnings for Dabur for 2004-05
References:
1] Zachariah, Reeba, Datta, Kausik, "Dabur to do away with umbrella brand plan," Business
Standard, October 6, 2004.
2] How an organization structures and names the brands within its portfolio.
3] The sum of all distinguishing qualities of a brand, drawn from all relevant stakeholders, that
results in personal commitment to and demand for the brand.
Promotional Strategies of Cellular Service Providers in

India
Note
Organization :- Themes
Industry : Cellular Industry Marketing, Advertising and Sales
Countries : India Promotion
43
Keywords:
Indian Telecom Sector, Bharti Tele-Ventures Limited, Bharat Sanchar Nigam Limited,
Hutchinson-Essar limited, Idea Cellular limited, Reliance India Mobile, Global System for
Mobile Technology, Code Division Multiple Access, Celebrity Endorsements, Department of
Telecommunications, National Telecom Policy, R-World, “RIM Celebrations”, MTNL,
Telecom Regulatory Authority of India.
Abstract:
The case gives an insight into the various promotional strategies implemented by the major
cellular service providers in the Indian cellular market. The GoI's decision to liberalize the
telecom sector in 1994 transformed the entire telecom industry, with many private companies
foraying into the sector.
With the consequent grant of licenses for providing cellular services, there was a surge in the
number of cellular services providers which continued till the late 1990's. By the year 2000,
stiff competition between players in the cellular market prompted each player to formulate
more novel strategies in order to retain their market share.
Most of the promotional strategies revolved around capturing the younger generation who
formed a major part of the target market. Celebrity endorsements, special season offers,
festival discounts, and innovative advertisement campaigns were used by the cellular service
providers as tools to push back the competition and increase their market share.
Issues:
• The evolution of the Indian telecom industry.
• The factors that played a major role in the establishment of the cellular services market in
India.
• Compare the various promotional strategies implemented by the major players in the
cellular services market.
What other operators have achieved in one to two years, Bharti has done in just over a
month. In July 2002, one out of every two people buying a mobile across India chose AirTel.
We are truly proud to be spearheading the mobile revolution in the country."1
- Sunil Bharti Mittal, Chairman, Bharti Tele-Ventures in 2002.
"It is the technology advantage and not the lower rates that is attracting more and more
customers to Reliance India Mobile."2
- Kaushik Roy, Head of Marketing, Reliance India Mobile in 2003.
"Today's consumers do not want to hear the virtues of a brand, they are interested in
specifics and that's what our campaigns always do."3
- Samuel Selvakumar, CEO, Hutch - South India in 2004.
Introduction
After the liberalization of the Indian Telecom Sector in 1994, the Indian cellular market
witnessed a surge in cellular services. By 2005, there were a total of 12 players in the market
with the five major players being Bharti Tele-Ventures Limited (Bharti), Bharat Sanchar
44
Nigam Limited (BSNL), Hutchinson-Essar limited (Hutch), Idea Cellular limited (Idea) and
Reliance India Mobile (RIM) (Refer Exhibit I). All the players except RIM offered services
based on the Global System for Mobile (GSM)4 technology. RIM provided services based on
Code Division Multiple Access (CDMA)5 technology as well as GSM. As competition in the
telecom arena intensified, service providers took new initiatives to woo customers.
Prominent among these were - celebrity endorsements, loyalty rewards, discount coupons,
business solutions and talk time schemes. The most important consumer segments in the
cellular industry were the youth segment and the business class segment.
The youth segment was the largest and fastest growing segment and was therefore targeted
most heavily by cellular service providers. Bharti Tele-Ventures adopted celebrity
endorsement as its chief promotional strategy. By 2004 it emerged the unprecedented leader
commanding the largest market share in the cellular service market. (Refer Exhibit II).
Hutch implemented the celebrity endorsement strategy partially, relying primarily on its
creative advertising for the promotion of its brand. BSNL, on the other hand, attracted the
consumer through its low cost schemes. Being a state owned player, BSNL could cover rural
areas, and this helped it increase its subscriber base
Reliance was another player that cashed on its innovative promotional strategies which
included celebrity endorsements and attractive talk time schemes. Idea, relied heavily on its
creative media advertising sans celebrities.
Background Note
The Department of Telecommunications (DoT) was set up by the Government of India (GoI)
in the 1980s. Its function was to manage all telecommunication services within the country.
In 1986, the GoI sought to modernize the telecommunications facilities in the country, and
established Mahanagar Telephone Nigam Limited (MTNL) to look after services in Bombay
and New Delhi, and Videsh Sanchar Nigam Limited (VSNL) to handle overseas services.
The rest of the nation's services were to be run by the DoT. In 1994, India ranked sixth in the
world in terms of number of installed fixed lines.
The GoI introduced the National Telecom Policy (NTP) in 1994 with a view to improving
India's position in global telecommunications. The introduction of the NTP led to a
metamorphosis of the industry as it allowed the private sector to invest in
telecommunications.
In the course of liberalization, licenses were granted for providing cellular mobile service in
the metro cities of Delhi, Mumbai, Kolkata, and Chennai. To avoid overlaps, the NTP stated
that not more than two cellular providers could operate in a given telecom circle.
In 1997, the Telecom Regulatory Authority of India (TRAI) was established to regulate all
telecommunication services. The NTP of 1999 further relaxed the norms for cellular
providers.
Service providers were now free to provide all types of mobile services including voice and
non-voice messages and data services in their service area of operation
Bharti, a part of Bharti Enterprises6, was the first to launch its cellular service on July 7,
1995. Bharti's cellular services were launched under the brand name ‘AirTel'and were
categorized as pre-paid7 services and post-paid8 services. The postpaid service was launched
under the brand name “AirTel” whereas its prepaid services were launched under the brand
name “Magic”...
45
Excerpts
The Promotional Campaigns

In 1995, the Indian cellular industry looked very promising. With ever increasing
globalization and expanding business activities, cell phones became a necessity for business
on the move. The younger generation also began to flaunt the cell phone as a status symbol.
Soon cell phones were being used not only as a tool for communication but also as a source
of entertainment...
Year 2000-02
In the year 2000, AirTel formulated an advertising campaign which was arguably the first of
its kinds from the cellular service sector. AirTel roped in famous movie actors Shahrukh
Khan and Karishma Kapoor as brand ambassadors for its prepaid service “Magic”.
The company felt that celebrity endorsement was a suitable way to promote the brand and an
effective tool for expanding market share.
On February 16, 2001, AirTel launched a massive Rs.25 million launch campaign -“You Can
Do Magic” featuring the two Bollywood actors.
Year 2003 (Cricket, Bollywood and Celebration)
By 2003, the cellular service market had ten major players and the situation demanded that
service providers come up with novel ideas to attract the consumer. Festivals and special
occasions were times when cellular service providers offered a range of schemes. In February
2003, AirTel launched a Valentine's Day Promotion Contest, which was targeted primarily at
youth celebrating Valentine's Day...
Year 2004 (Special Plans and Loyalty Schemes)
With a view to reaping the benefits of the pre-paid segment, RIM launched its prepaid service
in 2004. The launch campaign involved a rally of motorbikes and cars bearing the RIM
prepaid flags along with the RIM catch line “Mujhme Hai Wo Baat” (It's There Within Me).
The first cavalcade was flagged off by famous model Katrina Kaif. Commenting on the
positioning of the RIM prepaid service, Kaushik Roy, marketing head, Reliance Infocomm,
said, “The RIM pre paid is primarily targeted at the youth, and we hope that by these on
ground promotional activities, the youth becomes more aware of our fantastic value
proposition.
Exhibits
Exhibit I: Cellular Service Providers
Exhibit II: Market Share & Subscriber Base of GSM Service Providers
Exhibit III: Market Share & Subscriber Base of CDMA Operators
Exhibit IV: Top Ten Advertisers in the Year 2003
Exhibit V: Top Ten Advertisers on Television 2004
References:
1] India Telecom, www.convergenceplus.com, September 4, 2002.
2] Brandspeak, www.exchange4media.com, February 8, 2003.
3] Brandspeak, www.exchange4media.com, July 3, 2004.
46
4] GSM is the most widely used digital mobile phone system. It was originally defined as a pan-
European open standard for a digital cellular telephone network to support voice, data, text
messaging and cross-border roaming. GSM is present in more than 160 countries and accounts for
approximately 70 percent of the total digital cellular wireless market. This system is a time division
multiplex (TDM) system that can be implemented on a frequency ranges of 800, 900, 1800 and
1900 MHz.
5] CDMA is a digital wireless telephony transmission technique that allows multiple frequencies to
be used simultaneously (Spread Spectrum). The CDMA idea was originally developed for military
use over 30 years ago.
6] Established in 1976, Bharti Enterprises was India's leading Telecom and Healthcare
conglomerate. It had profits of $320 million and revenues of $ 1,790.776 million for the financial
year 2004.
7] Pre-paid services are the mobile service where the user needs to purchase a “prepaid” card that
offers talk-time and other services depending on the talk- time value of the card.
8] Post-paid services refer to mobile services that are billed on a monthly basis. The user needs to
pay the bills at the end of the month's usage of the service.
Zee Telefilms' Competitive Strategies

Note
Organization : Zee Telefilms Limited Themes
Industry : Entertainment Marketing, Marketing Strategies,
Countries : India Television Media
Abstract:
The case analyzes the competitive strategies adopted by Zee Telefilms in relation to rival
channels and the extent to which the channel has succeeded in its approach.
Zee recorded unprecedented success during the initial years of its launch (1992-2000).
However, in 2000, Star with its improved programming content succeeded in establishing
itself as the No.1 entertainment channel.
Sony also emerged as a strong competitor. The case provides an insight into how Zee
managed to regain its position through its effective competitive strategies.
Issues:
• The factors that played a key role in the establishment of Zee as a successfully integrated
media company.
• The competition in the television media segment.
• The marketing strategies adopted by Star and Sony, and the reasons for their success or
47
failure.
• The strategies adopted by Zee to regain its position in the Indian television media segment.
Keywords:
Zee Telefilms Limited, Star TV, Sony TV, Essel Group, Sony Entertainment Television,
Rupert Murdoch, Amitabh Bachchan, "Kaun Banega Crorepati?", Zee MGM, "Sawaal Dus
Crore ka", AirTel, AirTel Magic, Department of Telecommunications, Videsh Sanchar
Nigam Limited, Bharti Enterprises.
It is my ambition to make Zee the world's largest integrated convergence company and to
achieve this we are building our business through a combination of access and content."
- Subhash Chandra, Chairman, Zee Telefilms Limited, in 2000.1
"Star, the entire company, rests on three and a half hours of Star Plus. It is doing extremely
well and so there is no debate on that. We are definitely trying to improve and work on the
programming to raise the ratings of Zee TV itself. As a company, we are definitely far more
broad-based. We have many success stories. We have a successful oversees operation, we
have successful Zee Marathi, we have successful Zee Cinema. So, it is a little more broad-
based than the other bouquets, which is a good thing in the long run. Yes, I will be a lot
happier if Zee TV regains its old position."
- Pradeep Guha, CEO, Zee Telefilms Limited, in 2005.2
Introduction
In 2005, Zee Telefilms Limited (Zee) was India's most broad-based TV channel network with
an offering of 23 channels. The other major players like Star TV (Star) and Sony TV (Sony)
offered less than half the number of channels offered by Zee. Zee's flagship channel, Zee TV
was launched in 1992 and by 1994 Zee's prime-time3 audience share was 37% compared to
39% combined share of the national channel Doordarshan4 and a meager 8% share of the Star
channels.
After its success in the domestic market, Zee, in 1995 ventured into the overseas market to
capture the NRI audience. From its launch in 1992 till 2000, Zee commanded the highest
market share.
However, by mid 2000, competition from Star and Sony began to intensify, and in 2000 Zee
recorded the lowest market share of 5.19%, with Star and Sony having a market share of
18.49% and 11.29% respectively.
Zee needed to formulate new strategies to claw back its market share. The new strategies Zee
adopted, such as brand extension, brand re-positioning and re-branding, pushed its revenues
up once again (Refer Exhibit I) and its share price rose steadily during the period 2003-04 too
(Refer Exhibit II).
In 2005, Zee re-branded a host of its channels to bring them under the Zee brand. Trendz was
renamed ZEE Trendz, ZEE English was renamed as ZEE Café, Smile TV was named as Zee
Smile and all the Alpha channels were prefixed with 'Zee' brand name. It also repositioned
Zee, with a new catch line-"Jiyo Zee bhar ke". All these moves were aimed at expanding its
viewership.
Background Note
Zee, an Essel Group5 company, launched Zee TV, the nation's first Hindi channel by a private
organization. Zee TV evoked a massive positive response from Indian viewers, since it
48
brought them a much wider choice of programs compared to Doordarshan. Zee TV's
broadcast content ranged from film-based to educational programs.
Zee's mass appeal was in direct contrast to Star (launched in 1991) which aired programs
exclusively in English. Catering to the needs of the vast Hindi-speaking Indian audience, Zee
TV's popularity grew by leaps and bounds during the period 1992 to 2000.
Zee TV won The Economic Times' "The Emerging Company of the Year" award in 1998, for
its remarkable success within 6 years of its launch. In the same year, Zee TV won the FICCI6
award for creativity in visual media. Within a span of 3 years (1998-2001), Zee TV expanded
its network further, introducing a number of channels both in India and overseas.
By 2004, Zee was a fully integrated media corporate with a major presence in TV
programming, Films, Music, Print, Broadcasting, Internet Portals, Internet Service Provider
(ISP) service, Events, Cable Distribution, DTO, etc7. Zee channels had a viewer base of over
250 million across the globe. It operated in 5 continents across 120 countries8.
Zee's Initial Success
In October 1995, Sony Entertainment Television9 (SET) made its entry into India. Star, which
was launched in 1991, was also making an effort to attract larger numbers of the non-
westernized Indian viewers. Zee had to come up with a new strategy to counter this
competition. While Star and Sony were concentrating more on improving their programming
content, Zee planned the launch of two channels dedicated to news and cinema, respectively.
Zee had its action plan ready but it did not have the funds for expansion. It therefore entered
into a partnership with Rupert Murdoch (Murdoch), the man behind Star, in 1995.
With this deal Murdoch acquired a 50% stake in Zee. Once the Zee-Star deal was finalized,
Zee launched the nation's first round-the-clock Hindi news Channel - Zee News and a Hindi
movies channel - Zee Cinema. Zee News aired news every hour and its programs ranged
from interviews with corporate personalities to discussions on the country's social and
political issues...
Excerpts
Competition from Star and Sony

In September 1999, the Star and Zee partnership came to an end, and this left Star to go its
own way. Sony, meanwhile, launched its sports-cum-movies channel "SET MAX" in 1999.
Star tried its best to pull in the viewers. But the scene seemed uncertain for both Star and
Sony, as all their efforts were not quite paying off...
Zee Fights Back
In order to compete with Star and Sony, Zee implemented a two-pronged strategy from
September 2000 onwards. One element was to reform the programming content and the
second was to redefine the prime time band (which was usually taken to run from 9 PM to
11PM) by extending the programming slots to 45 instead of the existing 30 minutes.
Explaining these moves, R K Singh, chief executive officer of Zee Network, said that this
initiative was a continuation of Zee's efforts to provide clean, wholesome family
entertainment
Consequently in October 2000, Zee came out with "Sawaal Dus Crore ka" (SDCK), two
months after KBC was launched. Zee also launched two new channels Zee English and Zee
Movies in 2000. Zee Movies was re-launched the same year as Zee MGM...
49
The Re-Branding Exercise
Early 2005, Zee initiated the re-branding of the entire Zee range of brands. In line with this
strategy, all the channels of Zee sported a new logo, and new on-air packaging and
promotions were introduced. This sprucing up was expected to increase the TRP of all its
channels.
As a part of this exercise, the three English channels were also renamed. dz was renamed
ZEE Trendz, ZEE English became ZEE Café and ZEE Movie Zone was named Zee Studio.
Also, Smile TV was now ZEE Smile...
Exhibits
Exhibit I: Zee: Growth Pattern
Exhibit II: Zee's Reviving Stock Market Performance: 2004
Exhibit III: Zee News-Viewership 1999
Exhibit IV: Zee-Overseas Success
Exhibit V: Scenario Before "Tehelka"
Exhibit VI: Aaj Tak Vs. Zee News
Exhibit VII: Zee Tv's Viewership During "Zee Cine Awards 2004"
Exhibit VIII: Zee Revenues: An Overview
Exhibit IX: Zee's Regional Reach: A Comparison
Exhibit X: Zee: Global Reach
Exhibit XI: Re-Branding Exercise
References:
1] Agarwal, Alok, "Zee targets to become the largest integrated convergence company",
www.domain- b.com, September 26, 2000.
2] Interview, www.indiantelevision.com, May 23, 2005.
3] Prime-time, the time slot which generally extends from 9PM to 11PM wherein the channel
telecasts its most popular television programs.
4] Includes Doordarshan National Network and Metro Channel.

5] Essel Group of companies, the parent company of Zee has operations in entertainment
broadcasting, cable TV, films, theme parks, publishing, education, retailing, manufacturing and real
estate.
6] Federation of Indian Chambers of Commerce and Industry.
7] www.zeetelevision.com.
8] www.zeetelevision.com.
9] Sony Entertainment Television, first venture of Sony Pictures Entertainment, the biggest
entertainment powerhouse of America.
Pricing Fuzeon - Cost of Innovation?
50
Period : 1990 - 2006 For delivery through courier (within
Note
Organization : Trimeris Inc. and Roche Themes
Industry : Pharmaceutical and
Healthcare
Countries : USA, Europe
Abstract:
This case is about Fuzeon, an innovative 'first of its kind' drug used for the treatment of
HIV/AIDS. The drug was developed by Trimeris and marketed by Roche.
Though Fuzeon was considered a 'breakthrough' drug, its price was very high. The case
discusses the reasons as to why the company had decided to price the drug at a premium.
Fuzeon's pricing also raised ethical concerns as it was priced out of the reach of people who
needed it the most. The case also discusses the challenges faced by Trimeris and Roche in
marketing this drug.
Issues:
• Understand the issues in drug pricing, particularly for anti-AIDS drugs.
• Understand the risks that pharmaceutical companies face in developing and launching a new
product in the market.
• Understand the challenges faced by companies in marketing a new product at a premium

price.
Keywords:
Trimeris Inc., Roche, Fuzeon, Fusion Inhibitor Technology, Anti - AIDS / HIV drugs, New
Product Development, Pharmaceutical Healthcare, Product Pricing, Marketing Management,
Antiretroviral Drugs, Research and Development, ACT UP/NY, Clinical Trials, New Product
launch, Distribution Network
"We need to make a decent rate of return on our innovations. This (Fuzeon) is a major
breakthrough therapy. I can't imagine a society that doesn't want that innovation to
continue."1
- Franz Humer, Roche's Chairman and Chief Executive, in 2003.
"Roche claims that Fuzeon is more expensive to produce than other anti-HIV2 drugs, but that
doesn't justify this excessive price. Roche claims it spent $600 million developing the drug,
but they refuse to open their books to verify that. Our research suggests they spent closer to
half that amount, and also that significant portions of the research costs were paid for by the
NIH3 including the drug's discovery and the initial phase I clinical trial4."5
- Eustacia Smith, AIDS Coalition to Unleash Power (ACT UP/NY),6 New York, in 2003.
"This price (of Fuzeon) is clearly above our expectations and shows that the limited amount
that can be produced is supposed to be sold at the highest possible price in the industrialized
countries."7
51
- Patrick Burgermeister of Zuercher Kantonalbank,8 in 2003.
Fuzeon Gaining Ground
In March 2006, Trimeris Inc. (Trimeris) announced that its net profit for the fourth quarter of
2005 (ended December 31, 2005) was US$ 3.8 million. It had incurred a loss of US$ 5.7
million in the corresponding period of the previous year.
For the financial year 2005, the company registered an 80% reduction in losses when
compared to 2004 (Refer to Table I for a summary of Trimeris' financial position).
Analysts attributed the company's improved financial performance primarily to the increase
in gross profits from the sale of Fuzeon, a drug used in the treatment of HIV/AIDS9 (Refer to
Table II for Sales of Fuzeon).
In 2005, Fuzeon's sales grew by 54% to US$208.2 million as compared to US$ 135.2 million
in 2004. In January 2006, the Chief Executive Officer of Trimeris, Steven D. Skolsky,
commented, "We are proud to have surpassed the $200 million mark for a product that is in
its second full year from launch.
These results were driven by several factors including the growing acceptance of Fuzeon as a
core component of highly suppressive HIV therapy, synergy with new agents and the success
of ongoing patient support programs."10
Fuzeon, a breakthrough product of Hoffmann-La Roche (Roche) and Trimeris, was used in
the treatment of HIV/AIDS and was Trimeris' only product. However, the sales figures for
the drug were far below the initial projections made by various analysts. In 2003, some
analysts estimated that if 12,000 people were to take Fuzeon, spending US$ 20,000 each in
the first year of its launch, Roche would earn US$ 240 million in revenues in the first year
itself.
It was estimated that by 2005, Fuzeon's sales would grow to around US$ 480 million.
Analysts also estimated that Roche could make a profit in three years as against the industry
average of 16 years for a new drug.14 But at the end of 2005, Fuzeon had annual sales of only
US$ 208.2 million, much lower than the forecasts. Analysts believed that Fuzeon's pricing,
coupled with its drug delivery system15 was to blame.
Background Note
In 1990, Dr. Dani Bolognesi (Bolognesi) and Dr. Tom Matthews (Matthews), who were
leading research teams searching for potential HIV vaccines at Duke University Medical
Center,16 discovered that a molecule derived from a portion of the HIV virus was capable of
blocking reproduction of the virus. This molecule, T-20 (Enfuvirtide), now marketed as
Fuzeon, was successful in stopping the virus from fusing with the immune cells17 of the host.
In 1993, Bolognesi and Matthews established Trimeris in Durham, North Carolina, U.S.A,
with a vision of creating a biopharmaceutical company based on fusion inhibitor
technology.18
Bolognesi and Matthews also received the US patent for the T-20 structure and composition
in 1990 after which laboratory and animal studies of T-20 were started. Phase I clinical trials
of T-20 began in 1996. The following year, Trimeris launched its initial public offering.
In 1998, the Phase II clinical trials19 of T-20 were started. In 1999, Trimeris presented the
results of the first T-20 dose ranging phase I/II study at the 6th Conference on Retroviruses
and Opportunistic Infections20 in Chicago, U.S.A. Impressed by the presentation, David
Reddy (Reddy), HIV Head of Roche, arranged a meeting with representatives from Trimeris.
52
In the same year, Trimeris and Roche formed a collaboration to develop and commercialize
T-20 and T-1249 (another fusion inhibitor) on a global scale. Roche, headquartered at Basel,
Switzerland, is a global healthcare company which operates worldwide under two divisions:
pharmaceuticals and diagnostics.
It belongs to the Roche Holding AG. Roche was founded by Fritz Hoffmann-La Roche in
1896. In 2005, its sales from continuing business was CHF21 35,511 million., Roche had a
global market share of 3.4% based on the company's sales for the 12 months ending June
2005 According to IMS MIDAS Quantum.22 (Refer to Exhibit I for Roche's Three-Year
Financial Summary)...
Excerpts
Fuzeon - An Innovation
Fuzeon was the 'first of its kind' drug for the treatment of HIV infection in treatment-
experienced patients with evidence of viral replication despite ongoing therapy. It was to be
used in combination with other antiretroviral (anti-HIV) drugs for the treatment of HIV.
(Refer Exhibit III for different brands of antiretroviral drugs and how they act)...
Limited Supply
According to Roche and Trimeris, Fuzeon was difficult to manufacture as it involved an
extremely complex process. Fuzeon was a large peptide composed of a precise 36-amino acid
sequence.
Large peptides were difficult and expensive to manufacture because the process of creating
commercial quantities of these was lengthy and complicated.
It involved 106 steps and 44 ingredients. According to them, it was the first time that such
'synthetic peptides' had been produced on such a large scale...
Pricing Strategy
Fuzeon was launched at a premium price of 18,980 euros (US$ 20,570) per patient per year in
Europe and just under US$ 20,000 per patient per year in the US. This was a record price for
an antiretroviral drug and was twice the price of the most expensive HIV treatment drugs
available on the market at that time (Refer to Exhibit V for list of some high priced AIDS
drugs)...
Fuzeon's Pricing - The Other View
AIDS activists and doctors in general appreciated the development of Fuzeon but were
critical of its pricing. "We don't think we can add Fuzeon (to our drug list) without cutting
something else.
We are excited about the drug, but we aren't sure we can afford it," said Michael
Montgomery, who oversaw California's state government-funded AIDS Drug Assistance
Program (ADAP).
AIDS activists insisted that Fuzeon's complex manufacturing process did not justify its price.
Problem for Fuzeon
Despite being a breakthrough product, Fuzeon had more than its fair share of problems.
Analysts felt that Fuzeon's price was out of reach for most of the people in the industrialized
53
countries let alone those in the developing countries. Because of its high price, some ADAPs
refused to put Fuzeon on their formularies...
Marketing Initiatives
Fuzeon was launched at the International AIDS Society (IAS) conference in Paris in July
2003. Prior to the launch, Trimeris and Roche used the services of Ignite Health to develop a
pre-launch website, TargetHIVFusion.com, with the objective of educating PLWHA about
Fuzeon and preparing healthcare professionals treating PLWHA for the launch of Fuzeon.
TargetHIVFusion.com was later changed to Fuzeon.com.
The Fuzeon Arcade, comprising 1980s-style arcade games mixed with important product
messages and trivia, was created as the final closing act of Roche's national sales meeting to
get the sales team excited about the upcoming FDA approval of Fuzeon.
Those who scored the highest were presented with Sony Playstations (Refer to Exhibit IX for
Promoting Fuzeon). Initially Bioscrip Inc. (Bioscrip) was appointed as the exclusive
pharmacy source for Fuzeon in the US and Canada. Roche announced a "Progressive
Distribution Program" which included reimbursement assistance programs for patients who
could not afford Fuzeon.
Future Outlook
Although Fuzeon had crossed the US$ 200 million mark in worldwide sales, this figure was
still well below the expected figures. According to some analysts, Roche and Trimeris had
not addressed the key problem of price.
The high price of Fuzeon compared to other anti-HIV drug treatments, was affecting the
demand for it.
Higher prices could also limit Roche and Trimeris's ability to receive reimbursement
coverage for Fuzeon from third-party payers, such as private or government insurance
programs.
But some analysts believed that Roche was unlikely to bring down the price of Fuzeon
significantly to make it more accessible.
Roche had recognized that it could afford to set such a high price point because Fuzeon was
an innovation in the field of anti-AIDS drugs...
Exhibits
Exhibits I: Roche's Three Year Financial Summary
Exhibits II: Overview of the Relationship between Trimeris and Roche
Exhibits III: Different Brands of Antiretroviral Drugs and How They Act
Exhibits IV: List of Some High Priced Aids Drugs*
Exhibits V: Protests against Pricing of Fuzeon
Exhibits VI: Fuzeon - Studies Supported by Public Funds*
Exhibits VII: Trimeris Monthly Share Price (US$) - The Year of Fuzeon
Exhibits VIII: Promoting Fuzeon
Exhibits IX: Advertising Awards Won by the Fuzeon Campaign
Exhibits X: Current and Future Fuzeon Clinical Trials
Exhibits XI: Competition for Fuzeon
References:
54
1] "Anxiety over Cost of New AIDS Drug," www.cbsnews.com, March 13, 2003.
2] HIV (Human Immunodeficiency Virus) is the virus that causes AIDS. A person infected with HIV is called HIV
positive. In the long run HIV leads to AIDS.
3] The National Institutes of Health (NIH) is the primary agency of the United States government responsible for
medical research. The Institutes are responsible for 28% of the total biomedical research funding spent
annually in the USA.
4] Phase I trials are the first-stage of testing a drug in human subjects. Normally a small (20-80) group of
healthy volunteers will be selected. This phase includes trials designed to assess the safety, tolerability, etc., of
a therapy.
5] "ACT UP Creates 'Fuzeon Graveyard' at Roche Headquarters," www.users.ultinet.net, March 13, 2003.
6] ACT UP/NY based at New York, USA, is a "diverse, non-partisan group of individuals ... committed to direct
action to end the AIDS crisis." It was formed in March, 1987.
7] Ben Hirschler, "Record High Price Set for New Roche AIDS Drug," www.aidsmeds.com, February 24, 2003.
8] Zuercher Kantonalbank based at Zurich, Switzerland is a major European financial institution. In 2005, its net
income from interest operations was CHF 1,030 million.
9] AIDS (Acquired Immunodeficiency Syndrome or Acquired Immune Deficiency Syndrome) is a collection of

symptoms and infections resulting from the specific damage to the immune system (the system of specialized
cells and organs that protect us from outside biological influences such as bacteria, toxins, etc.) caused by the
Human Immunodeficiency Virus (HIV).
10] "Trimeris Reports 2005 Fuzeon Sales Results: Global Sales Exceed $200 Million," www.trimeris.com, January
31, 2006.
14] "Anxiety Over Cost Of New AIDS Drug," www.cbsnews.com, March 13, 2003.
15] Drug delivery systems are responsible for delivering drugs to patients using various methods such as vials
and needles. Fuzeon needs to be injected sub-cutaneously (below the skin) twice daily. Patients found this
inconvenient.
16] The Duke University Medical Center (formerly Duke University Hospital and Medical School) is based in
Durham, North Carolina, U.S.A., and is affiliated to the Duke University. It is ranked among the top ten health
care organizations in the US. It was established in 1930.
17] The immune cells refer to the CD-4 cells that are attacked by the HIV virus. The CD-4 cells are a part of the
immune system.
18] The core technology platform of fusion inhibition was based on blocking viral entry into host cells.
19] Phase II trials are performed on larger groups (100-300) and are designed to assess clinical efficacy of the
therapy as well as to continue Phase I assessments in a larger group of volunteers and patients. Phase II trials
are initiated once the initial safety of the therapy has been confirmed in Phase I trials.
20] The Conference on Retroviruses and Opportunistic Infections (CROI) is regarded as one of the most
important annual research and clinical conferences on HIV/AIDS in the United States. The 6th CROI was held at
Chicago between January 31, 1999, and February 4, 1999. Over 3,400 participants from across the world
attended this conference.
21] In April 2006, 1 Swiss Franc (CHF) was approximately equal to US$ 0.7820.
22] According to IMS MIDAS Quantum.
55
P&G's Vocalpoint - Using Moms for W.O.M
Pub Date : 2006
Organization : Procter & Gamble FMCG
Company
Industry : FMCG
Countries : USA
Abstract:
The case discusses about the word-of-mouth marketing initiatives of Procter & Gamble
Company (P&G), a leading manufacturer and marketer of consumer products. In 2001, P&G
had recruited many teenagers to create buzz about new products through its division Tremor.
Subsequently, in December 2005, large scale recruitment for influential moms, also called as
Tremor Moms, was started under the new name Vocalpoint. By May 2006, P&G had enlisted
225,000 teenagers in Tremor and another 600,000 moms in Vocalpoint.
Analysts opined that this strategy proved to be effective as research showed an increase in
sale of products promoted through this network of people. The case also highlights the ethical
implications of using people to market products through word-of-mouth recommendations.
Issues:
» Understand the importance of word-of-mouth marketing in the promotion of consumer
products.
» Understand the ethical implications of using people to market products through word-of-
mouth recommendations.
» Understand the challenges faced by major companies in using word-of-mouth marketing

programs.
Keywords:
Procter & Gamble, Tremor, Vocalpoint, Word-of-mouth, Buzz marketing, Customer-made,
Connect and Develop, Consumer goods, Marketing Management, Ethics, Advertising,
Connectors, Word of Mouth Marketing Association, Influencers, Social network, Women,
Moms.
P&G started this idea of manufacturing word-of-mouth. They recruited a quarter million
teens to talk about their products. Now they are in the process of recruiting mothers to do the
same thing because they have suddenly realized that word-of-mouth is a powerful thing." 1
- Jerry Wind, Professor of Marketing, The Wharton School, University of Pennsylvania,
in June 2005.
"The program is a state-of-the-art method for reaching the most influential group of
shoppers in America: moms. At a time when companies need to find creative ways to get their
message across to consumers, it's likely to be widely studied. But Vocalpoint also raises a
56
serious ethical issue: Should the person spreading the product message disclose her
affiliation." 2
- BusinessWeek, in May 2006.
The Power Buzz Moms
On December 6, 2005, Procter & Gamble Company (P&G), a leading manufacturer and
marketer of consumer products, announced that it would enroll influential moms to be a part
of an exclusive group of women. The group was named Vocalpoint and the moms were
expected to provide their opinions and feedback on P&G's latest products, the products of
other external clients like WD-40 Co.3 (WD-40), Animal Planet,4 etc., and other new product
concepts. The members of Vocalpoint were also encouraged to share their opinions regarding
these new products with their family and friends
"Over the years, Procter & Gamble has offered products that help moms run their households
efficiently and economically, and we've often heard back from our customers about what they
liked, or perhaps didn't like, about a particular product.
At P&G, we find this consumer feedback absolutely invaluable in helping us continuously

offer products that best serve the needs of our customers. By developing Vocalpoint, P&G
has set up a way for other companies to gain access to these very vocal and influential moms
to gain access to their thoughts and feedback as well,"5 said Amy Donges, marketing manager
of Vocalpoint.
Though word-of-mouth (WOM) marketing6 is a recognized marketing tool, which has been
used for a long time, analysts credit P&G with pioneering this approach on a large scale. As
early as 2001, P&G had recruited hundreds of thousands of teenagers to create a buzz about
new products through its division Tremor. Subsequently, Tremor Moms were also recruited
and in December 2005, large scale recruitment for such influential moms was started under
the new name Vocalpoint. By May 2006, P&G had enlisted 225,000 teenagers in Tremor and
another 600,000 moms in Vocalpoint.
Analysts opined that this strategy proved to be very effective as research showed an upward
shift in sales of the products promoted through this network of people called "connectors".
The success of this method at P&G and other smaller firms specializing in WOM has
prompted many analysts to opine that WOM is fast becoming the hottest trend in marketing.
However, the use of this method by marketers has also drawn a lot of criticism. As P&G does
not require its connectors to disclose their affiliations with P&G, it has been accused of
deceptive marketing. Some marketing experts were also concerned about the ethical
implication of using such a method as it could lead to commercialization of peoples' daily
lives and their relationships, where people would treat one another as objects of
manipulation, undercutting social trust.
Critics also took exception to the fact that Tremor used and targeted teenagers, who were at
an impressionable age, for commercial transactions. P&G's policy of not requiring that
connectors disclose their affiliation with the marketer even put it at loggerheads with Word of
Mouth Marketing Association7 (WOMMA), who were pushing for such a disclosure.
P&G defended its stand, saying that it was taking the high road as it did not impose any such
restrictions on its members, thus placing them in total charge of what they wanted to
communicate to their peers. They also pointed out that members were not compensated in
any way and the company did not influence what they wanted to say.
57
Background Note
In 1837, candle maker William Procter and his brother-in-law, James Gamble, a soap maker,
merged their small businesses and established P&G. Their shop in Cincinnati was nicknamed
"Porkopolis" because of its dependence on swine slaughterhouses as the shop made candles
and soaps from leftover fats. By 1859, P&G had become one of the largest companies in
Cincinnati, with sales of US$1 million. Since the very beginning, P&G placed great emphasis
on marketing and developing brands. The earliest brands of P&G, which were advertised in a
Cincinnati newspaper in 1838, were Palm Oil soap, Rosin soap, Toilet and Shaving soap, and
Tallow candles.
In the same year, the company ran into difficulties because of over-expansion. It was taken
over by Franz Josef Pope and in 1918 he named it BMW AG.
In 1918, BMW manufactured its first aircraft engine, the Type IIIa. This engine could power
a biplane to reach an altitude of 5000 meters in just 29 minutes, creating a world record. After
the World War I, the Treaty of Versailles (1919) put a ban on production of aircraft in
Germany.
Thus, in 1919, the company started to manufacture railway brakes. In the same year it
designed its first motorcycle engine. In 1923, it started manufacturing motorcycles and its
first model R32, a 500cc shaft-driven motorcycle, designed by Max Friz, was launched.
BMW forayed into car manufacture in the late 1920s. (Refer to Exhibit I for BMW's Logo).
In 1928, BMW set up a car manufacturing unit in the Eisenach region of Germany and started
manufacturing a small car called 'Dixi', based on the Austin Seven car under license. In the
following year it acquired the Dixi Company.
In 1879, for the first time P&G introduced an all-purpose soap, Ivory. in the US. Ivory could
be used for both personal cleansing and household cleaning. Soon Ivory emerged as the most
popular soap brand in the US. By the 1880s, P&G sold brands like White, Famous, Perfect,
Queen Olive, Topaz, Handy, Town Talk, Good Luck, Blue, Princess Olive, Duchess Olive,
Very Good, Countess Olive, Toilet, Green Seal, Polo, Japan Olive, Simon Pure, Yellow
Erasive, German Olive, Lenox, Velvet and Golden Bar.
By 1890, P&G was selling more than 30 different varieties of soap including 'Ivory.' At that
time, P&G's advertising comprised of full-color print ads in national magazines. The
advertisements were very creative, resulting in a growing demand for its soaps from
consumers.
P&G encouraged rival brands within the company to compete against one another. In the
early 1920s, when Lux, Palmolive and Cashmere Bouquet soaps were introduced by P&G's
competitors, P&G introduced Camay. When Camay did not perform well, the management
felt that it was because it had not been allowed to compete head-on with Ivory. This episode
resulted in the development of a brand management system at P&G...
Tremor - The Beginning
Tremor was a marketing service launched in 2001 with Steve Knox (Knox) as the CEO.
(Refer Exhibit III for logo of Tremor). It was a WOM program aimed at teenagers. When it
was launched, P&G had very little information on the teen market. Thus, initially Tremor was
more of an experiment that presented P&G with an opportunity to study that demographic
segment. Tremor members were carefully chosen by P&G. Teens were drawn to the Tremor
website (www.tremor.com) from the websites that these teens frequented, and then selected
based on their response to a survey questionnaire.
58
P&G had done a lot of research to identify the people they wanted. The teens were greeted
with questions that screened for eight key character traits including inquisitiveness,
connectedness, and persuasiveness. The people P&G sought were called "connectors" in
marketing parlance, and were considered the most influential of all consumers (also referred
to as influencers, transmitters or bees)...
Vocalpoint - Taking Wom To The Next Level
Vocalpoint was launched nationally in March 2006 with Knox as the CEO. (Refer to Exhibit
IV for the logo of Vocalpoint). Vocalpoint presented P&G with the opportunity to run
campaigns for more of its own brands, thus filling the gaps in Tremor. Besides, the program
gave it access to moms, the most influential consumer demographic segment in the US.
Efforts to include moms as a part of the WOM program started in mid 2005 with P&G
recruiting women with children aged 19 years or below. The idea was tested in three US
cities- Columbus, Tulsa, and Buffalo.
Wom - The Hottest Trend In Marketing...

Analysts were of the view that WOM was a powerful advertising tool. The early success of
Tremor prompted Jim Stengel, P&G's global marketing officer to say that, "Word-of-mouth
advocacy is the gold standard in marketing." The Advertising Age estimated that WOM
marketing was a US$100 million to US$150 million industry. In 2005, it grew at a rate of
100% over the corresponding period of 2004. Analysts felt that, though the figures looked
relatively small in dollar volume, the practice ranked among marketing's highest growth
areas...
...Or a Case of Deceptive Marketing?
The use of the P&G's WOM method of marketing had its share of controversy in the US. In
October 2005, Commercial Alert (CA), a non-profit public watchdog group filed a complaint
with the Federal Trade Commission (FTC) regarding such forms of marketing. In its
complaint, Gary Ruskin (Ruskin), the executive director at CA sought action against Tremor
as P&G's policy did not require that connectors disclose their affiliation with the marketer.
Critics argued that people who were exposed to such marketing were not aware that they
were being marketed to and thus such form of marketing should come under the purview of
"deceptive marketing."
"It's deceptive because people think they're talking to a regular person when they're really
talking to a shill. That's the whole point, that shills have to disclose that they're shills," said
Ruskin. (Refer to Exhibit IX for a summary of FTC policy statement on deception)...
Future Outlook
According to some analysts, with the formation of Vocalpoint in addition to Tremor, P&G
had succeeded in its role as a trusted partner of the consumer and at the same time offering an
instant WOM network to external clients. According to Justin Kirby of Digital Media
Communications, P&G with its Vocalpoint and Tremors programs was far ahead of the curve
than most corporations as far as WOM marketing was concerned.
Some analysts pointed out that, moms were the most influential segment among buyers and
targeting them through networks such as Vocalpoint made good business sense. The
popularity of the Internet had resulted in the increasing number of online social networks for
moms. "From a business standpoint, it's a huge opportunity...
Exhibit
59
Exhibit I: Five Year Financial Summary of P&G
Exhibit II: Logo of P&G
Exhibit III: Logo of Tremor
Exhibit IV: Logo of Vocalpoint
Exhibit V: The Vocalpoint Website
Exhibit VI: Vocalpoint - Some Screening Questions
Exhibit VII: Vocalpoint Website Promoting 'What about Brian'
Exhibit VIII: Vocalpoint FAQs
Exhibit IX: Summary of FTC Policy Statement on Deception
References:
1] "What's the Buzz about Buzz Marketing?" www.whartonsp.com, June 3, 2005.
2] "I Sold it through the Grapevine," www.businessweek.com, May 29, 2006.
3] WD-40 Co., headquartered in San Diego, California, USA is known for its widely-used penetrating oil (cleaner,
lubricant and anti-corrosive solution) marketed under the trademark WD-40. In the years preceding 2006, the
WD-40 company acquired several household products companies. As of 2006, it marketed its products in more
than 160 countries worldwide.
4] Animal Planet, launched in 1996, is a cable and satellite television network co-owned 80% by Discovery
Communications Inc., and 20% by the BBC Worldwide. The channel is dedicated to programming that highlights
the relationship between humans and animals.
5] "Savvy Moms Share Maternal Instincts; Vocalpoint Offers Online Moms the Opportunity to be a Valuable
Resource to their Communities," www. phx.corporate-ir.net, December 6, 2005.
6] Word-of-mouth marketing (or WOM advocacy) is a term used by marketers and advertisers to describe
activities that companies undertake to generate personal recommendations as well as referrals for brand
names, products and services.
7] WOMMA is the official trade association for the WOM marketing industry in the US. It was founded in the year
2004. Its mission is to promote and improve WOM marketing by protecting consumers and the industry with
strong ethical guidelines, promoting WOM as an effective marketing tool, and setting standards to encourage
its use.
Red Bull's Innovative Marketing: Transforming a

Humdrum Product into a Happening Brand
Organization : Red Bull GmbH
Pub Date : 2006 Themes
Teaching Note : Available FMCG
Countries : Austria, UK, USA
Industry : Beverages
Abstract:
60
The Red Bull energy drink was launched in Austria in 1987, by Dietrich Mateschitz. He
claimed to have experienced the invigorating properties of a popular Thai energy drink,
Krating Daeng, on a trip to Thailand.
Realizing that a similar product could have good potential in Western markets, Mateschitz
obtained the license to manufacture a carbonated version of Krating Daeng from its Thai
owners. Obtaining permission to sell Red Bull in Europe was not easy, as it contained several
ingredients whose effects on the human body were untested.
However, permissions were eventually obtained, and Red Bull became exceptionally
successful in all the markets in which it was launched.
It was generally acknowledged that Red Bull's success was the product of the company's
innovative marketing efforts. This case study discusses the marketing strategy adopted by
Red Bull GmbH, including the company's effective employment of buzz marketing in new
markets, and its sponsorship of sporting activities, especially extreme alternative sports, to
enhance its image.
The case also talks about Red Bull's target markets, and its pricing and differentiation
strategies. It includes a section on the various controversies surrounding Red Bull, and the
effects of these on its brand image. The competitive situation in the energy drinks market and
Red Bull's position vis-à-vis competitors, is also discussed. The case concludes with a
commentary on Red Bull's attempts at brand extension, and the company's future prospects in
the light of its excessive dependence on a single product.
Issues:
» To understand how savvy marketing can transform an ordinary product into a powerful
brand.
» To study the use of buzz marketing in establishing a product in new markets.
» To appreciate the importance of identifying suitable target markets, and designing

marketing activities to reach them effectively.
» To examine the role of sports sponsorships in establishing brand image.
» To study the effect of controversies on brands and how, in certain circumstances,

controversies can actually help in the growth of a brand.
» To analyze the potential effects of a large number of competitors on a powerful brand and
the sources of differentiation in a crowded market.
» To understand the importance of brand extension and the pitfalls of being associated with a
single product.
Keywords:
Red Bull, Dietrich Mateschitz, Energy drink, Brand, Grassroots marketing, Buzz marketing,
Product extension, Sports Sponsorship, Formula One racing, Target market, Krating Daeng,
Generation Y, Product promotion, Product differentiation, Advertising clutter, Taurine
61
In terms of attracting new customers and enhancing consumer loyalty, Red Bull has a more
effective branding campaign than Coke or Pepsi. Red Bull is building a beverage brand
without relying on the essential equipment of a mass-marketing campaign. Perhaps the
indispensable tools of marketing aren't so indispensable after all." 1
- Nancy Koehn, Professor of Business Administration at Harvard Business School, in
2001.
"When we first started, we said there is no existing market for Red Bull. But Red Bull will
create it. And this is what finally became true." 2
- Dietrich Mateschitz, Founder and Managing Partner of Red Bull GmbH, in 2005.
Red Bull Acquires Second F1 Team
In September 2005, Red Bull GmbH, the manufacturer of the Red Bull energy drink,
acquired Minardi, an Italy-based Formula One (F1)3 team for an undisclosed amount.
Dietrich Mateschitz (Mateschitz), the founder and managing partner of the company said that
the Minardi team would continue under the existing management4 till the end of 2005, after
which it would be renamed for the 2006 racing season. Red Bull GmbH already owned
another F1 team, Red Bull Racing, at the time it acquired Minardi.
Red Bull Racing had participated in F1 as Jaguar Racing, until Mateschitz bought it from its
previous owner, the Ford Motor Company (Ford) in November 2004. After the acquisition of
Minardi, Mateschitz announced that Red Bull Racing would be the company's main team,
and the newly acquired Minardi (renamed Scuderia Toro Rosso (STR)5 for the 2006 racing
season) would serve as the 'rookie team' in 2006. Red Bull GmbH intended to use the team to
train young drivers sponsored by the company.
Red Bull, widely acknowledged as the creator of the 'energy drink'6 category, maintained a
close association with sports from the time it was launched in 1987. Red Bull GmbH was
known for its sponsorship of extreme, alternative sports like white water kayaking, hand
gliding, wind surfing and snowboarding -sports that involved elements of adventure and risk.
Red Bull's association with F1 Racing, one of the world's most glamorous and expensive
sports, also helped enhance its image as a trendy drink. Analysts said that the company's
sponsorship of extreme sports that required stamina and energy was also just right for the
image of the beverage.
For a product that did not have any extraordinary qualities, and was made of ingredients
whose effects had often been called into question,7 Red Bull had a huge market presence. The
company was reported to hold almost 70 percent of the worldwide market for energy drinks
in 2005. Analysts attributed the beverage's success to the unconventional marketing strategy
adopted by the company to promote it in new markets.
Background
Dietrich Mateschitz was born in 1944 in Austria, to parents who were primary school
teachers. After graduating with a marketing degree from the University of Commerce in
Vienna, he took up marketing jobs at Unilever and Jacobs Coffee, before becoming the
international director for marketing at Blendax, a German company that dealt in FMCG
products like toothpaste, skin creams and shampoos, in 1979. Mateschitz's job involved a lot
of travel around the world, and during one of his trips to Thailand, he discovered an 'energy
drink' called Krating Daeng, which was very popular among blue collar workers in the
country
When he sampled it, Mateschitz reportedly discovered that the drink was good at combating
jetlag. The idea for marketing an energy drink in Western markets came when he realized that
62
energy drinks had a huge market in Asia and that there was no such product available in
Europe.
These events were major attractions and were considered crucial for the business of fashion.
Fashion weeks served as a platform for the entire fashion industry to display the upcoming
seasons' collections to trade buyers (retailers, buying houses, wholesalers, etc.), the media,
and individual customers. The central idea behind a fashion week was to showcase
representative samples to the trade - quite unlike individual 'couture' fashion shows which
tended to be more social/theatrical in nature. The 'all-business' nature of fashion weeks makes
them popular among buyers who attend them to preview, plan, and order their lines for the
next season.
Mateschitz approached Chaleo Yoovidhya (Yoovidhya), the owner of TC Pharmaceuticals,
which made Krating Daeng, with a proposal to market the beverage in Europe. Yoovidhya
agreed to give Mateschitz the foreign licensing rights to the drink in return for a partnership
in the venture. In 1984, Mateschitz resigned from his job to pursue his new business.
Mateschitz and Yoovidhya each invested $500,000 to become equal partners, with a 49
percent stake each, in the new company. The remaining two percent was held in trust for
Yoovidhya's son. The founders agreed that Mateschitz would run the company, while the
Thais remained sleeping partners...
Elements of Red Bull's Marketing Strategy
Red Bull was generally acknowledged by marketing experts to be a good example of an
ordinary product of uncertain worth that was transformed into a powerful brand through
innovative marketing.
The emphasis Red Bull placed on marketing was evident from the fact that the company
spent around 30 percent of its annual turnover on marketing - much higher than most other
beverage manufacturers who spent approximately 10 percent. Red Bull was positioned as an
energy drink that 'invigorated mind and body' and 'improved endurance levels'
The company's slogan 'Red Bull gives you wiiings' reinforced this positioning. The beverage
was targeted at people who sought increased endurance, speed, concentration and alertness
(Refer Table I for the 'benefits' of Red Bull as claimed by the company)...
Controversies
Red Bull had been a controversial product right from the start.
When Mateschitz first planned to launch the beverage in Europe, he had to wait for three
years to get approval in Austria, his home country.
After that, it took another five years before it could be sold internationally, and Hungary
became Red Bull's first foreign market in 1992. Red Bull's launches in new markets were
almost always preceded by controversy, usually centering on the nature of the ingredients in
the drink.
While exotic ingredients were acceptable in many Asian markets where food regulations
were not stringent, in Europe, the beverage faced difficulties in getting approval from the
authorities. As of 2006, Red Bull was banned in France and Denmark. In Norway, it was
classified as a medicine that could only be sold in pharmacies.
63
The most controversial ingredient in Red Bull was taurine. Taurine, an acidic chemical
substance, was an untested food product in many western countries and was thought by some
to be harmful. The controversies were further fuelled by rumors that taurine was actually
derived from the bile of bulls...
Threats to Continued Success
Red Bull was a market leader in its category in the early 2000s, garnering strong sales in its
various markets around the world. Nevertheless, analysts were skeptical about the company's
continued survival and growth as there were several factors threatening the brand's long term
prospects.
Red Bull's success had spawned a spate of imitators, all wanting to cash in on the booming
energy drinks market. Some of the knock-offs even had names that evoked the Red Bull
brand -Red Tiger and American Bull being notable examples.
The US itself saw the launch of brands like Red Devil, NRG, Eclipse, Blue Ox, Niagara,
Dynamite, Red Rooster, Energy Rush, SoBe Adrenaline Rush, Mad Croc, Hansen's
Functional, and Jones Whoop Azz, among others, in the energy drinks market during the
early 2000s. Not to be left behind, certain American celebrities like rap stars Cornell Iral
Hayes, Jr. (known as Nelly) and Jonathan Smith (known as Lil Jon) also came out with their
own brands. Nelly launched an energy drink called Pimp Juice, while Lil Jon launched the
Crunk brand.Overall, it was estimated that as of 2005, there were 125 players in the energy
drinks market in the US.
Major beverage companies like Coke, Pepsi and beer major Anheuser-Busch had also come
out with new energy drinks. Coke and Pepsi launched KMX and AMP respectively, while
Anheuser-Busch launched 180, in the early 2000s. Analysts said that competition from big
companies might affect Red Bull, as these companies, with their greater spending power, had
the potential to give the brand a run for its money. "Strategically, Red Bull could be
vulnerable to such giants as Coca-Cola and Pepsi, which can't sit back and simply do
nothing," said John Hudson, coordinator of the graduate business school at the University of
Palermo. "They could wind up competing in the same segment. It would be hard to fight that
battle."
Exhibit
Exhibit I: Krating Daeng -The Thai Red Bull
Exhibit II: Red Bull's Ingredients
Exhibit III: Red Bull Racing's F1 2005 Car
Exhibit IV: Red Bull Energy Drink
Exhibit V: A Red Bull Print AD
Exhibit VI: Top Energy Drinks in the US by Brand - 2004
Exhibit VII: 2005 Forbes -Vivaldi Partners Next Generation Growth Brands
References:
1] Anni Layne Rodgers, " It's a (Red) Bull Market After All," Fast Company, October 2001.
2] Kerry A. Dolan, "The Soda with the Buzz," Forbes, March 28, 2005.
3] Formula One, abbreviated to F1, and also known as Grand Prix racing, is the highest class of single-seat
open-wheel formula auto racing in the world. The 'formula' in the name is a set of rules which all participants
and cars must meet. http://en.wikipedia.org
4] Minardi was then owned by Australian millionaire Paul Stoddart.
5] Scuderia Toro Rosso means 'Red Bull Stable' in Italian.
64
6] Energy drinks are beverages that generally contain legal stimulants, vitamins, and minerals. Most of them
contain taurine and glucuronolactone, and a high content of caffeine and sugar or glucose. Many energy drinks
are flavored and/or colored to resemble soft drinks.
7] Red Bull's main ingredients taurine and glucuronolactone are extremely controversial.
…………………………………………………………………………………………………
…………………………………………
Snapple's Marketing - An Unconventional Brand's Claim

to Fame
Organization : Snapple Beverage Charges
Corporation, Quaker Oats,
Triarc Group of Companies,
Cadbury Schweppes Plc. Themes
Pub Date : 2006
Teaching Note : Available Brand Management
Countries : USA
Industry : FMCG
Abstract:
Snapple was a popular beverage brand in the
USA and several other parts of the world. The
brand was launched by the Unadulterated Food
Company in New York, in 1972. Over the years,
Snapple came to be known for its
unconventional promotional efforts which
earned the brand a substantial fan following.
The Snapple Beverage Corporation became one

of the first companies to enter the ‘New Age
Beverages'market, which included non-
carbonated drinks like tea and juices in the late
1980s. Snapple changed hands several times
over the years. However, barring a few bad
years, the brand remained very popular among
consumers.
This case discusses the growth of the Snapple brand under the management of the various
companies that owned it at different times. It also talks about Snapple's sales decline under
the management of Quaker Oats, and how Triarc, which took over the brand subsequently,
managed to revive Snapple's image before selling it to Cadbury Schweppes. The case
concludes with a commentary on Snapple's inability to become a leading beverage brand
despite its strong fan following.
65
Issues:
» To understand how unconventional marketing can transform an ordinary product to a
popular brand.
» To examine how an unconventional brand managed to tackle competition from brands from
other corporate entities that followed more professional (and conventional) marketing
practices.
Keywords:
Snapple, Cadbury Schweppes, New age beverages, Grassroots marketing, Ready-to-drink tea,
Brand management, Unconventional marketing, Quaker Oats, Target market, Triarc,
Celebrity endorsements, Distribution, Promotion, Brand revival, Brand loyalty
We don't always do things in an expected way and we always are looking for distinctive
opportunities where our brand can appear. It's that little bit of element of surprise. You'll see
us on pizza boxes. You might see us in a fortune cookie. Those are just some of the ways that
we connect with our consumers."1
- Sheryl Adkins-Green, former Senior Vice President of Marketing, Snapple Beverage
Group, in July 2003.
"We're not in the soft-drink business; we're in the fashion business."2
- Michael Weinstein, former CEO of Triarc Beverages Corporation, in December 1998.
Snapple - The Real Fact!
On June 29, 2006, the Snapple Beverage Group (SBG), owned by Cadbury Schweppes Plc.3
(Cadbury Schweppes), launched its 'Snapple White Tea'4 with a unique representation of the
product's characteristics.
In an event held at New York City's Bryant
Park, the company harnessed several volunteers
to helium balloons and let them rise several feet
into the air. The event was intended to
emphasize the attributes of its newly launched
white teas, which were touted as the 'Lightest
Teas on Earth'.5 Snapple announced that it
would hold similar events in other cities across
the US over the next few months to promote the
white teas.
This was just one of Snapple's many

unconventional efforts over the years to promote
the brand. Since its launch in 1972, Snapple had
captured the interest of professional marketers
with its unconventional approach to promotion.
So much so that it was widely believed that taste was not the only reason for the popularity of
Snapple's range of juices and iced teas - the brand's innovative promotions and
advertisements were believed to be equally responsible for making it a favorite with the
public.
Snapple was regarded as a 'fun' brand. As of
mid-2006, the Snapple range was available in
66
the US and in about 80 other countries around
the world.
Snapple changed hands several times between

1992 and 2000. The Quaker Oats Company
(Quaker)6, which acquired Snapple in 1994, did
away with the off-beat marketing associated
with the brand. Consequently, Snapple sales
declined dramatically during the period the
brand was with Quaker, and revived only after
the next acquirer, the Triarc Group of
Companies (Triarc)7, restored its 'wacky' image.
Even after Snapple was acquired by Cadbury
Schweppes in 2000, it continued to be promoted
in an off-beat manner.
Background
In 1972, childhood friends Leonard Marsh, Hyman Golden, and Arnold Greenberg, set up a
company that they named Unadulterated Food Products Inc. (UAF) to sell pure fruit juices in
the New York area.
They launched a range of juices, with names
like Passion Supreme, Vitamin Supreme, Apple
Crisp, and Cranberry Royale. In 1978, they paid
$500 to a Texas company for the name
"Snapple". The name was given to their
carbonated apple drink which, however, did not
do well in the market. The name was later
extended to all their beverage products, and
eventually, the name of the company itself was
changed to Snapple Beverage Corporation
(SBC).
In the late 1970s, there were many companies

that manufactured and sold juices and health
drinks, but Snapple stood out from the rest
because of its unconventional marketing and
distribution strategies.
From the beginning, the brand had differentiated itself from other beverages with its
‘amateurish'approach to marketing. By 1982, UAF added many more varieties of juices to its
product portfolio in the non-carbonated drinks segment, which had remained untapped until
then. By 1986, UAF had started distributing juices and health drinks through health stores. In
1987, the company launched Snapple iced teas, which became an instant success as the
ready-to-drink8 tea segment was also a fledgling segment till then.
In 1994, Quaker purchased Snapple for $1.7
billion9, in a major move to strengthen its
beverage portfolio, which at that time consisted
only of the leading sports drink Gatorade.10 By
then, Snapple's sales had risen to $700 million.11
However, according to analysts, the acquisition
67
turned out to be one of the greatest debacles in
the history of corporate mergers and
acquisitions.
They said that the takeover was mistimed as

Snapple's sales growth had just begun to slow
down in the tea category after PepsiCo Inc.
(Pepsi)12 and the Coca-Cola Company (Coca-
Cola)13 had launched their tea products in the
early nineties.14
Excerpts
Snapple Over the Years

Snapple had become popular over the years because of its unconventional promotion
methods. Unlike beverage behemoths Pepsi and Coca-Cola who stuck to conventional
marketing practices, Snapple adopted a more offbeat approach to promotion and followed a
grassroots marketing strategy...
Snapple's Beginning
From the beginning, Snapple was an
unconventional brand. In the initial days of the
brand, the company did not have much money
to spend on traditional marketing campaigns.
The owners therefore adopted an
unconventional approach to promote the
beverage. Consequently, everything about the
beverage, from the name to the packaging and
the advertisements was 'anti-establishment'. This
unconventionality set it apart from traditional
beverage brands, and won it loyal customers.
SBC's founders claimed that its juices contained

only natural ingredients, except for the diet
variants which contained artificial sweeteners.
The “If it's not found in nature it's not found in Snapple,” tagline was used across all product
categories. (The tagline was later changed to “Made from the best stuff on earth”)...
The Quaker Debacle

Quaker purchased Snapple in 1994 to capitalize
on the synergies between Snapple and Gatorade.
Apparently, Quaker believed that it had the
financial resources to expand Snapple's market.
The company had already had a successful
experience with Gatorade, which it had turned
into a powerful global brand after purchasing it
from Stokely-Van Camp, a canned foods
company, in 1983. Reportedly, much of
Quaker's success with Gatorade had come from
68
its use of a traditional ‘textbook'approach to
marketing the product. Quaker used the same
strategies to market Snapple...
The Triarc Turnaround

Triarc acquired Snapple in early 1997, for $300 million. The company added Snapple to its
beverages portfolio which already included the Mistic, Stewart's, and the Royal Crown
brands. In May 1997, when Triarc bought Snapple, its sales were 42 million cases. Triarc
named Mike Weinstein (Weinstein) as CEO of its beverages division and Kenneth Gilbert
(Gilbert) as senior vice president of marketing...
The Cadbury Schweppes Acquisition
Triarc had reestablished Snapple as one of the
leading ready-to-drink tea and juices brands by
the time Cadbury Schweppes took over SBG.
Snapple had a 28% market share in the premium
beverages category as of mid-2000.
Cadbury Schweppes continued with Snapple's

unconventional marketing. After the acquisition,
Gilbert decided to take a break, and Weinstein
was given an extended contract with SBG, but
he too did not remain with the company for
long. The changes in management did not affect
Snapple's growth, as Cadbury Schweppes
continued from where Gilbert and Weinstein
had left off, in terms of branding and
positioning...
Conclusion
Snapple was considered by many to be a good example of a conventional product that was
marketed in an unconventional fashion. Over the years, the brand used various innovations
and marketing strategies to remain popular in the market, and also built up a loyal fan
following...
Exhibits
Exhibit I: Snapple's Portfolio of Drinks in 2006
Exhibit II: Snapple's Retired Flavors
Exhibit III: Snapple's Fruits Ad in 2001
Exhibit IV: Sales and Market Shares of Ready-
to-Drink Tea Brands in U.S.A in 2002
Exhibit V: Snapple Kiwi Teawi Iced Tea
Exhibit VI: A Screenshot from Snapple's 'Real
Experiences' Ad Campaign
Exhibit VII: Examples of Snapple Real Facts
References:
69
1] "The Snapple Lady," www.reveries.com, July 21, 2003. (Accessed on August 16, 2006)
2] Nikhil Deogun, "Snapping Back," The Wall Street Journal, December 14, 1998.
3] Cadbury Schweppes, a British confectionary and beverages manufacturer, owns many

international companies spread across 200 countries. As of mid-2006, the company was the
third largest beverages producer in the world behind Coca-Cola and PepsiCo, with annual
revenues of $ 11.2 billion as of December 2005.
4] Snapple white teas were naturally light because they were made from leaves that were
plucked from the first tender buds of the plant. Snapple launched its white teas in three
flavors - Raspberry, Green Apple and Nectarine.
5] "Snapple Flies High," www.snapple.com/news shack, June 29, 2006 (Accessed on August
11, 2006).
6] Quaker Oats was a leading producer of cereal based breakfast foods and the leading sports
drink - Gatorade. It was purchased by PepsiCo in 2000.
7] Triarc held diverse businesses like textile manufacturing, propane distribution, chemical
and dyes, beverages business and Arby's quick service restaurants.
8] Ready-to-drink teas include both hot and iced tea.
9] Dollars ($) refers to US dollars in this case study.
10] Gatorade, a leading sports drink brand, is meant to re-hydrate and replenish
carbohydrates and electrolytes. Though it was originally targeted at athletes,
non-athletes also consumed the drink. It was marketed by Quaker Oats
Company, which was acquired by PepsiCo in 2001. Source :www.wikipedia.org
(Accessed on August 28, 2006)
11] "Quaker's Sale of Snapple Ends One of the Worst Merger Flops in History,"
Weekly Corporate Growth Report, www.findarticles.com, April 21, 1997.
12] PepsiCo is a global manufacturer and marketer of beverages and food. It was
the world's number 2 carbonated soft-drinks maker in 2006.
13] Coca-Cola Company is the leading beverages manufacturer and marketer,

and as of 2006, produced the world's Number 1 carbonated drink, Coca-Cola.
14] "Quaker's Sale of Snapple Ends One of the Worst Merger Flops in History,"
Weekly Corporate Growth Report, www.findarticles.com, April 21, 1997.
Naming a Pharmaceutical Brand: A Product Manager's

Dilemma
70
Period : Not Applicable Rs. 100 + Rs. 25 for Shipping & Handling
Organization : Not Applicable Charges
Pub Date : 2006
Countries : India Brand Management, Marketing Mix,
Industry : Pharmaceutical Positioning
Abstract:
The case is about the dilemma faced by Ramesh
Nayar (Ramesh), a product manager of a
medium sized pharmaceutical company in India.
X-Neuro, a vitamin supplement used in the
treatment of certain neurological disorders as an
adjunct to standard therapy was a key brand in
his portfolio. The drug was popular with its
target segment comprising of neurologists and
physicians.
However, when the company launched a brand

extension of the drug, called as X-Neuro Plus,
by adding two more vitamins to the existing
composition, the new product did not make any
headway with its target segment, the
gynecologists.
The case describes the issues with regard to the name of the brand extension of the drug,
which led to the product's failure in the market. The case also looks at the various options
before Ramesh and the likely pros and cons of each course of action. This case is based on
generalized experience of the authors.
Issues:
» Understand the issues and constraints faced by marketers with regard to deciding on a
suitable brand name or any brand extension for a pharmaceutical drug.
» Appreciate the importance of customer interaction and understanding the behavior of the
target customer segment.
» Understand the issues and constraints faced by a product manager in re-naming or

withdrawing a pharmaceutical product from the market.
Keywords:
Brand Management , Consumer Behavior, Physician Prescribing Behavior, Brand Extension,
India, Pharmaceutical Marketing, Segmenting and Targeting , Positioning , Brand Recall,
Marketing Research, Combination Drug Trial, Sales Representative, Marketing
Communication Strategy, Teaser Campaign, Yield per man
Ramesh Nayar (Ramesh) was having sleepless nights over how to increase the sales of his
new brand X-Neuro Plus.
Ramesh was a product manager in a medium
71
sized pharmaceutical company in India, and X-
Neuro Plus was a brand extension of X-Neuro,
one of the star brands in his portfolio. X-Neuro
Plus had failed to live up to the high expectation
of sales from gynecologists , who were the
primary target segment.
The sales of the brand in the first three months

after its launch were dismal, and way off the
initial projections.
X-Neuro was used as a vitamin supplement in

the treatment of certain neurological disorders; it
was used as an adjunct to standard therapy.
The drug was popular with its target segment - physicians and neurologists. Its brand name
too was a good fit with the neurological disorders for which the company had positioned the
brand.
Ramesh often pointed this out to the sales force
during sales review meetings and training
programs. During the previous year's annual
brand strategy meeting, he had said, “X-Neuro is
synonymous with the (neurological) disorder it
is intended for. Doctors say that its brand name
is quite apt. Whenever they diagnose the
disorder, they remembered X-Neuro.” Within a
few years of its launch, X-Neuro had cornered
12 percent of the market, despite the intense
competition. As it was a widely prescribed drug,
it enjoyed good brand recall among members of
the medical fraternity. Even doctors who did not
prescribe this drug were aware of X-Neuro.
In May 2005, a clinical study showed that the addition of two other vitamins to the
composition of X-Neuro made it a very good supplementary drug for treating some rare
neurological and cardiovascular disorders. As these disorders were rare, the demand for this
combination drug would be quite limited.
Ramesh put forward a proposal to launch this combination as a brand extension of X-Neuro.
Ramakant Desai (Desai), the Managing Director of the company quickly shot down the
proposal...
Nike's "Joga Bonito" Marketing Campaign

Organization : Nike Inc. Charges
Pub Date : 2006
72
Countries : Europe, USA Themes
Industry : Footwear Advertising and Promotion, Brand
Management
Abstract:
This case is about Nike's "Joga Bonito"
campaign for the 2006 FIFA World Cup that
was held in Germany from June 09, 2006 to July
09, 2006. Through its Joga Bonito (Play
Beautiful) campaign, Nike sought to promote
the beautiful aspects of the game of football
such as creative play, professionalism, courage,
and team spirit.
It was a multi-pronged campaign, which

comprised of a series of advertisements (ads)
that featured a number of football superstars, an
online TV channel dedicated to football called
Joga TV, a social-networking website,
Joga.com, and a Joga3 futsal tournament.
The case discusses the reasons that made Nike develop and launch this campaign and the
competition it faced from Adidas. The case also discusses the reactions of fans and media
analysts to the campaign.
Issues:
» Understand the advertising and marketing strategies adopted by global athletic footwear
giants like Nike and Adidas to cash in on the popularity of the FIFA World Cup
» Critically analyze the pros and cons of Nike's Joga Bonito campaign for the 2006 FIFA
World Cup
» Understand the increasing importance of online social communities and digital media as a
cost effective tool for marketing communication
Keywords:
Nike and Adidas, FIFA Football World Cup, Joga.com, Ambush Marketing, Official
Sponsor, online social communities , marketing communication, Advertising, Brand
Management, social-networking, digital media, Futsal, Sponsorships, Team Jersey, Team
Kits, Puma
"That (Joga Bonito campaign) goes way beyond somebody saying, ‘Oh, yeah, I saw a
commercial' …Gone are the days where you can put an ad out and hope people see it.
Anyone who doesn't understand the change in the landscape does so at their own peril."1
- Trevor Edwards, vice president for global brand marketing, Nike, Inc., in May 2006.
"By enrolling consumers in shaping the marketing, Nike is figuring out what kind of
microcontent audiences want and nurturing deeper bonds of loyalty and advocacy."2
- Pete Blackshaw, chief marketing officer, Nielsen BuzzMetrics3, in July 2006.
73
"Beyond its nakedly commercial intent, Nike's Joga Bonita strategy seems like a rather
poignant attempt to impose a "play ethic" - no diving, no faking, no arguing; all skill, all
imagination, all daring - on a game whose players are much less purist and noble, much
more flexible and calculating, than even those figures venerated in the adverts."4
- Pat Kane, writer and creativity consultant, in July 2006.
Nike and the Beautiful Game
In March 2006, Nike, Inc. (Nike), the world's
largest athletic shoe manufacturer5, and Google
Inc.6 (Google) announced the launch of
Joga.com, a social networking website for
football7 fans across the world. This was part of
Nike's "Joga Bonito" campaign, the company's
global marketing initiative during the build up to
the 2006 FIFA8 World Cup (2006 World Cup)
to be held in Germany from June 09, 2006 to
July 09,2006.
Through its Joga Bonito campaign, Nike sought

to promote the beautiful aspects of the game of
football such as creative play, professionalism,
courage, and team spirit."Joga Bonito" is a
Portuguese phrase that translates into "play
beautifully" in English.
It was a multi-pronged campaign, which comprised of a series of advertisements (ads) that
featured a number of football superstars, an online TV channel dedicated to football called
Joga TV, and the social-networking website, Joga.com. As a part of the campaign, Nike also
organized a Joga3 tournament, a short-field 3-on-3 futsal9 game.
Football, the world's most popular sport, is
widely referred to as "The Beautiful Game".
Prior to the start of the 2006 World Cup, Infront
Sports & Media10 (Infront), the official holder of
the broadcast rights for the event, said that the
event would be broadcasted to over 200
countries and territories. Infront projected a
cumulative viewing audience of 32.5 billion,
which was a 10 percent increase over the 2002
World Cup11. Marketers were keen to showcase
their brands and reach out to this huge captive
audience. In addition to being a widely watched
sport, the global market for branded football-
related sports products was estimated to be
approximately 2.5 to 2.6 billion euros12 (around
US$ 3.3 billion) in 2005.
"That (Joga Bonito campaign) goes way beyond somebody saying, ‘Oh, yeah, I saw a
commercial' …Gone are the days where you can put an ad out and hope people see it.
Anyone who doesn't understand the change in the landscape does so at their own peril."1
74
- Trevor Edwards, vice president for global brand marketing, Nike, Inc., in May 2006.
"By enrolling consumers in shaping the marketing, Nike is figuring out what kind of
microcontent audiences want and nurturing deeper bonds of loyalty and advocacy."2
- Pete Blackshaw, chief marketing officer, Nielsen BuzzMetrics3, in July 2006.
"Beyond its nakedly commercial intent, Nike's Joga Bonita strategy seems like a rather
poignant attempt to impose a "play ethic" - no diving, no faking, no arguing; all skill, all
imagination, all daring - on a game whose players are much less purist and noble, much
more flexible and calculating, than even those figures venerated in the adverts."4
- Pat Kane, writer and creativity consultant, in July 2006.
Nike and the Beautiful Game
In March 2006, Nike, Inc. (Nike), the world's
largest athletic shoe manufacturer5, and Google
Inc.6 (Google) announced the launch of
Joga.com, a social networking website for
football7 fans across the world. This was part of
Nike's "Joga Bonito" campaign, the company's
global marketing initiative during the build up to
the 2006 FIFA8 World Cup (2006 World Cup)
to be held in Germany from June 09, 2006 to
July 09,2006.
Through its Joga Bonito campaign, Nike sought

to promote the beautiful aspects of the game of
football such as creative play, professionalism,
courage, and team spirit."Joga Bonito" is a
Portuguese phrase that translates into "play
beautifully" in English.
It was a multi-pronged campaign, which comprised of a series of advertisements (ads) that
featured a number of football superstars, an online TV channel dedicated to football called
Joga TV, and the social-networking website, Joga.com. As a part of the campaign, Nike also
organized a Joga3 tournament, a short-field 3-on-3 futsal9 game.
Football, the world's most popular sport, is
widely referred to as "The Beautiful Game".
Prior to the start of the 2006 World Cup,
Infront Sports & Media10 (Infront), the official
holder of the broadcast rights for the event,
said that the event would be broadcasted to
over 200 countries and territories. Infront
projected a cumulative viewing audience of
32.5 billion, which was a 10 percent increase
over the 2002 World Cup11. Marketers were
keen to showcase their brands and reach out to
this huge captive audience. In addition to
being a widely watched sport, the global
market for branded football-related sports
products was estimated to be approximately
2.5 to 2.6 billion euros12 (around US$ 3.3
75
billion) in 2005.
Football was one of the few sports where Nike,
the most widely recognized sports brand in the
world, trailed behind its arch-rival Adidas-
Salomon AG (Adidas)13. Adidas was the official
sponsor of the 2006 World Cup. Wiser from its
experience in previous World Cups and other
sporting events, Adidas was prepared to block
any attempt at "ambush marketing"14 by Nike.
Adidas spent an additional US$ 175 million to

try to preempt any ambush marketing attempts
by Nike during the World Cup. It bought up
most of the airtime and billboard space, in order
to shut Nike out of most of the traditional media
for the duration of the event.
FIFA too announced that it was better prepared to clamp down on any form of ambush
marketing and protect its official sponsors. However, Nike's Joga Bonito campaign was
designed to sidestep this constraint and target the company's core group of consumers, young
males, through non-traditional media like the Internet...
Background Note
In 1957, Phil Knight (Knight), an undergraduate
student and middle-distance athlete at the
University of Oregon and Bill Bowerman
(Bowerman), his athletics coach, realized the
need for a good quality American sports shoe.
After graduation, Knight joined the Graduate
School of Business at Stanford University.
While preparing a class assignment paper,
Knight hit upon the idea that low cost, high
quality running shoes, imported from Asian
countries like Japan, where labor was cheap,
could be sold in the US and could end
Germany's domination of the sports shoe
industry...
Adidas - The Official Sponsor

For the 2006 World Cup, 15 companies were
selected by FIFA as the official sponsors of the
event (Refer to Exhibit V for a list of the 15
official sponsors). It was estimated that each
sponsor had paid amounts ranging between US$
38 million to US$ 63 million to be associated
with the event as an official sponsor.
Adidas was one of the main official sponsors of

the World Cup. Adidas had dominated the
76
football sports goods market ever since the
1950s. Adidas also held the distinction of being
the official sponsor in all the FIFA World Cups
held since 1978. For the 2006 World Cup,
Adidas reportedly spent US$ 200 million on its
World Cup campaign, which included its efforts
to block Nike out of TV ads in Canada and the
US...
Bend It Like Nike

Nike began to show interest in the football market during the 1994 World Cup, which was
held in the US. Analysts noted that Nike, despite being a late entrant, had managed to corner
a large share of the market and was now second to Adidas. (Refer to Figure I for global
market share in athletic footwear and Figure II for global market share in football)...
The Joga Bonito Campaign

In July 2005, Nike made its intentions clear
about what it wanted to achieve through the
2006 World Cup. In a letter to all its retailers
worldwide, Nike wrote: "The new season for
Spring 06 will serve as the platform for
launching Nike into the number one soccer
brand in the US and the globe ... Prepare
yourself and your business for a historic ride."
Reiterating the importance of gaining the market
leadership in the football market, Denson said,
"Football is the No. 1 played sport, and so if we
want to stay the No. 1 company in the industry,
we are going to have to be No. 1 in football."
Nike Scores A Beautiful Goal...

In June 2006, Nike announced that its Joga Bonito campaign had struck a chord with
consumers, given the record traffic to Nikefootball.com. The site recorded two million visits
per week. The Joga Bonito site received 760,000 visits a week. The company claimed that
448,000 people participated in its Joga3 futsal tournaments...
...Or a Self-Goal?
Nike's critics, on the other hand, felt that the
Joga Bonito campaign put style above
substance. They said that Nike had created a
community around football players who could
play artistic football but did not give any credit
to the less glamorous tasks that are equally
important to the game. For instance, the site
does not give any credit to defenders who save
goals by making hard tackles. Some critics felt
that Joga.com would appeal only to kids and
people new to the sport, but not to serious
supporters and die-hard fans of football.
77
Critics also felt that Nike's campaign was
dampened by its association and over-
dependence on the Brazilian team.
Outlook
Nike and Google said that they would closely watch how Joga.com fared. If it did well, they
planned to launch similar sites for basketball, baseball, skateboarding, and other sports. The
success of this network would depend on whether Nike succeeded in convincing the fans that
Joga.com was not a mere marketing site for Nike. "It has to be of the people and authentic
and credible. It's a self-governing community. Our job is to feed it, help it start, but then
they'll fuel it. It's a long-term way of connecting with consumers," said Edwards...
Exhibits
Exhibit I: The Swoosh - Nike's Logo
Exhibit II: Key Financials of Nike
Exhibit III: Nike's Key Financials (2001-2005)
Exhibit IV: Nike's Revenue Distribution (Fiscal
Year 2001 vs. 2005)
Exhibit V: List of Official Sponsors of Fifa
World Cup 2006
Exhibit VI: Adidas' Logo
Exhibit VII: The "Impossible Team" Campaign
of Adidas
Exhibit VIII: Teams Sponsored by Nike, Adidas
and Puma in 2006 World Cup
Exhibit IX: Nike's Joga Bonito Ad Campaign
Exhibit X: Screenshot of www.joga.com
Exhibit XI: The Joga Companion
Exhibit XII: Team-Kits of the Teams Sponsored by Nike
Exhibit XIII: Nike's Controversial Ad Featuring Wayne Rooney
References:
1] Sean Gregory, "Global Game," www.time.com, May 14, 2006.
2] "Nike: It's Not a Shoe, It's a Community," www.businessweek.com, July 24,

2006.
3] Nielsen BuzzMetrics is a leading provider of technologies and services that

help companies to measure and analyze the performance of their brands on the
Internet. (Source: http://www.nielsenbuzzmetrics.com).
4] Pat Kane, "Let Football Eat Itself," http://commentisfree.guardian.co.uk, July

18, 2006.
5] "Nike and Oregon City Hope to Get Along Again," http://www.iht.com, October
02, 2006.
6] Google, Inc. was co-founded by Sergey Brin and Larry Page in 1998. Google is
78
the world's most popular Internet search engine and has a diversified range of
products such as E-mail, blogs, etc.
7] Also known as association football or soccer.
8] The FIFA World Cup (commonly referred to as the football World Cup) is an
international football competition contested by the men's national football teams
of member nations of the Fédération Internationale de Football Association
(FIFA), the sport's global governing body. The event is held every four years.
9] Futsal is the indoor version of association football.
10] Infront Sports, headquartered at Zug, Switzerland, is a leading international

sports marketing company and specialist service provider to sport. It has offices
in nine countries: Switzerland, Austria, Germany, Finland, Sweden, France, UK,
Singapore and China.
11] "Record Broadcast Coverage for 2006 FIFA World Cup,"

www.infrontsport.com, June 07, 2006.
12] "Adidas to Buy Reebok, Challenge Nike," www.dw-world.de, August 03, 2005.
13] Adidas (founded in 1948 by Adi Dassler) is a German company that
manufactures athletic shoes, apparel and sporting goods. In 2006, Adidas was
the second largest manufacturer of sporting goods, behind Nike. Its 2005
revenues were 6.64 billion euros and its net income was 383 million euros. In
August 2005, Adidas announced that it would acquire the US-based Reebok
International Limited (Reebok) for US$ 3.8 billion.
14] Ambush marketing (or guerrilla marketing) is a tactic whereby a company

attempts to associate itself or its brand with an event (often a sporting event) in
order to gain some of the benefits associated with being an official sponsor
without incurring the costs of sponsorship.
Tata Indica V2 Xeta: Competing in the Indian Small Car

Market
Period : 2006 - 2007 Rs. 400 + Rs. 25 for Shipping & Handling
Organization : Tata Motors Limited Themes
Industry : Automobile Marketing Strategy / New Product
Countries : India Development / Brand Management
Abstract:
This case is about the marketing strategy
undertaken by Tata Motors Limited, (the market
79
leader in commercial vehicles in India, and one
of the major players in the passenger vehicles
segment), in 2006 to sustain and enhance its
market share in the burgeoning passenger car
market. In January 2006 the company launched
the Indica V2 Xeta Petrol (Xeta) car as a
refurbished version of its existing petrol car
Indica V2 Petrol MPFI. According to the
company, Xeta was to benefit the customer by
better meeting their needs compared to existing
options in the market - specifically by rendering
better fuel efficiency at a competitive price.
Indica was an umbrella brand under which Tata
Motors had developed both diesel and petrol
cars.
Though the diesel driven Indica was performing well, its petrol counterpart - Indica V2 Petrol
MPFI, had not reaped the intended results. Through Xeta, the company intended to create a
unique brand identity in the customer's mind for the petrol variant of Indica.
Immediately after the launch of Xeta in January 2006, the passenger car business unit of Tata
Motors reported a growth of 15 percent over January 2005 by selling the highest number of
passenger cars till then. The Indica brand grew by 18.7 percent which was attributed mainly
to the launch of Xeta. This success also coincided with the growing attractiveness of India as
a global hub for small cars. The entry of Tata Motors' immediate rivals like Maruti Udyog
Limited and Hyundai Motor India Limited into the diesel segment of the small car market
was also expected to pose a strong challenge for the company.
This case discusses the rationale behind the development and launch of the Xeta. It also
examines the product, pricing, distribution, and promotional strategies undertaken in this
regard and the challenges faced by the company in sustaining its market share in the Indian
passenger car market.
Issues:
» Understand the strategy adopted by Tata Motors to sustain the Indica brand in the highly
competitive small car market in India
» Understand the rationale behind the launch of Indica V2 Xeta as an extension of the Indica
umbrella brand
» Analyze the various marketing aspects that Tata Motors had to focus on in order to
establish the Xeta in the Indian small car market
Keywords:
Tata Motors Limited, Automobile Industry, Automotive, Tata Indica, passenger car market,
Tata Group, Petrol Diesel Engine, Tata Indigo, eXtra Efficiency Torque Advantage,
Marketing Management, Indica V2 Xeta Petrol, New Product Development, Pricing Strategy,
Promotional Strategy, Maruti Udyog Limited, Hyundai Motor India Limited, Launch, Retail
network, Global Manufacturing Hub, India, Honda Motor Company, Toyota Motors
"The Tata Indica story resembles the fable of the ugly duckling in some ways, with one
crucial difference: the country's first indigenously designed and manufactured passenger car
80
never looked less than pretty. But, like the duckling of the fairy tale, it has emerged stronger
and more beautiful than ever after overcoming global competition and a recessionary
market."1
- K. A. Ananthram and Mohini Bhatnagar, independent columnists, in October 2000.
"All of us knew we would have to go through the learning curve. Our effort has always been
to shorten that curve and get ahead of the competition. We never lost sight of our goal, which
was to provide the customer with a product (Indica) that offers the best value for money."2
- Rajiv Dube, Senior Vice-President (Manufacturing & Commercial - Passenger Cars
Business Unit), Tata Motors Limited, in October 2000.
"Tata Motors has always been known as a diesel carmaker, despite the fact that they know
petrol too. Tata now wants to shake off that image and plant the Indica firmly in the minds of
petrol punters too. And this is precisely the reason for the new Xeta variant."3
- Siddhraj Singh, an auto-analyst with Autocar India, in 2006.
Introduction
In January 2007, it was reported that Tata
Motors Limited (Tata Motors) beat close rival
Hyundai Motor India Limited (HMIL)4 to
capture the second position in the fast-growing
passenger car market in India, behind market
leader Maruti Udyog Limited (MUL). In
December 2006, Tata Motors' car sales stood at
12,665 units against HMIL's 11,049 units.5
The growth for Tata Motors came in the

compact car segment, primarily driven by the
strong performance of the Tata Indica (Indica)
range. In January 2007, the Indica reported its
highest ever monthly sales since launch, at
14,466 units, a growth of 14% over January
2006.
Industry analysts said that this growth was mainly due to the launch of the Indica V2 Xeta
(Xeta) in January 2006, and subsequently its revamped version in November 2006.
The Xeta was developed by Tata Motors as a
pre-emptive move to fight competition, mainly
from MUL and HMIL in the passenger car
segment. The Xeta's "eXtra Efficiency Torque
Advantage" according to the company, was
proffered as an answer to the market demand
for fuel-efficiency at a competitive price.
Xeta was a refurbished version of the

company's Indica V2 Petrol car. Analysts said
that through Xeta, Tata Motors intended to
create a unique brand identity in the mind of
the customer for the petrol variant of Indica.
The company intended to make a major impact
in the petrol driven compact car segment with
81
the Xeta.
Analysts also felt that the Xeta had the potential
to change Indica's image as a diesel car brand.
Xeta's success coincided with the growing
attractiveness of India as a global hub for small
cars.
This led to the entry of a number of domestic

and foreign players into this segment, which
resulted in intense competition in the growing
Indian automobile market. (For an overview on
the Indian automobile industry refer to Exhibit
I). Some of the companies which planned to
launch small cars in India in and after 2007 were
General Motors India (GM)6, Fiat, Toyota
Motors, Honda Motor Co., Skoda India, and
Renault7.
The entry of MUL and HMIL in the diesel segment of the small car market was expected to
pose a strong challenge to Tata Motors which had the leadership position in this segment.
Background Note
On June 1, 1945, Tata Sons Limited (Tata Sons)
bought the Tatanagar Shops (also called the
Singbhum shops of the East Indian Railway)
from the Government of India to manufacture
steam locomotive boilers. It intended to extend
its operations later to building complete
locomotives and other engineering machinery.
This project was set up as a new company by
Tata Sons and was called the Tata Locomotive
and Engineering Company Ltd. which was
commonly known as Telco. Today, its
manufacturing base is spread across India - in
Jamshedpur (Jharkhand), Pune (Maharashtra),
Lucknow (Uttar Pradesh), and Pantnagar
(Uttarakhand)...
Excerpts
Indica: More Car Per Car

In December 1998, Tata Motors launched the
first indigenously developed compact car, the
Indica. The model was displayed at the Auto
Expo'98 . To underline the "Made in India"
image, the Tata Motors stall at the exposition
had models and organizers dressed in Indian
attire. At the inauguration function, which was
attended by the then Union Industry Minister
Murasoli Maran , hundreds of children waved
82
the Indian flag. The Indica project was named
Project Mint (short for Mini Telco), when it was
commissioned. This car was partly designed and
developed by Tata Motors, the original design
being that of the French car manufacturer
Peugeot...
Enter The Xeta!

For the Indica, although the diesel-engined version continued to ring the cash registers, the
sales of the petrol variant failed to gather momentum in spite of the engine having seen
refinements since it was commissioned.
This, analysts said, could possibly be attributed
to two factors: Tata Motors' lack of experience
with petrol cars compared to other small-car
manufacturers with established credentials in
this segment, and the fact that the 'big and
powerful' tag is not necessarily a positive
attribute for a petrol car in the extremely fuel-
efficiency conscious small-car segment...
Product and Pricing - Extra Efficiency

Advantage
Tata Motors strove to improve and refine its
product continuously but customer feedback
was not always positive in all respects. The
Indica V2 Petrol's 1.4 litre engine had become a
handicap as it was the biggest in the small car
segment. Also, it shared the same block as its
diesel counterpart, making it inherently heavy...
Promotional Strategies
Xeta was promoted through various media: television, print, and the Internet. The television
campaign 'You Gotta Be Dumb' was conceptualized by FCB Ulka. M G Parameswaran,
Executive Director, FCB Ulka, said, "The creative team looking after Indica had a leap idea,
that not looking at Xeta is like refusing to have a good time with four lovely women. When
you see an advertisement like the Indica Xeta, you instantly remember the scene from Dumb
and Dumber and it's this that the advertisers are aiming for. Now every time you think of
Dumb and Dumber, you'll be thinking of the Indica Xeta as well."...
References:
1] K. A. Ananthram and Mohini Bhatnagar, "Putting the customer in the driver's
seat," www.tata.com, October 2000.
2] K. A. Ananthram and Mohini Bhatnagar, "Putting the customer in the driver's

seat," www.tata.com, October 2000.
3] Siddhraj Singh, "Xeta, the warrior princess," www.hindu.com, March 04, 2006.
4] Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai

Motor Company, South Korea.
83
5] The Indian Express, "Tata overtakes Hyundai," www.tata.com, January 19,
2007.
6] General Motors India is the Indian arm of General Motors Corporation (GM),
the world's largest automotive manufacturer (as of July 2007). GM was founded
in 1908 and is headquartered in Detroit, Michigan, USA. GM manufactures its
cars and trucks in 33 countries.
7] As of July 2007, Renault was in preliminary talks with Bajaj Auto to discuss the
possibility of producing cars in India, including a small car priced at around US$
3,000.
84

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Marketing:

BMW's "Company of Ideas" Campaign:

» Understand the marketing communication strategies adopted by a car manufacturer when

3] "BMW Losing its Soul," www.professorbainbridge.com, May 8, 2006.

6] MINI is car produced by a subsidiary of BMW.

9] The 7 Series is BMW's flagship car. It is a luxury sedan.

Browser Wars II: The Release of IE 7 (BETA 2)

Case Details: Price:

In December 1997, Opera, a web browser, was developed by a telecommunications company

8] Open source software is computer software available with source code.

9] Mozilla Foundation was formed by Netscape, a former browser, in 1998.

Destination Marketing: Tourism Australia's Controversial

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» Understand the issues and challenges in destination branding

» Understand how Tourism Australia planned an implemented a bold advertising campaign to

» Understand the challenges faced by a public sector organization/governmental organization

Honda's Marketing Strategies in India

• Study the entry strategies of two-wheeler manufacturers in India.

• Examine and analyze the marketing mix of Honda Motors.

Lipitor: How Far Should Pfizer Push The Pill?

5] "Off-label Marketing for Lipitor's Now the Focus of a Class-Action Suit,"

11] A drug still in the experimental development stage.

Marketing Viagra in India

» Understand the issues and constraints faced by pharmaceutical company in launching a

In 1950, under the Chairmanship of John E. McKeen, Terramycin, a broad-spectrum

Problems for Viagra

3] "Counting on the Viagra Brand in India,” www.iht.com, December 22, 2005.

Amway's Indian Network Marketing Experience

New Product Development at Schwan Food Company-

The Need for Product Innovation

3] Prepared Foods is a US-based business-to-business publication that tracks

Price Optimization at Northern Group Retail

The Northern Group under York

4] J. Bonasia, New Software Manages Price Cuts, www.khimetrics.com, March 2003.

• Understand why a company moves away from its core platform.

• Understand the strategies adopted by a company to change its core platform.

• Understand how a brand is repositioned.

• Understand the marketing activities undertaken to rejuvenate a brand.

• Understand how changes in demographics and psychographics affect an organisation's

The Restructuring Exercise

Promotional Strategies of Cellular Service Providers in

The Promotional Campaigns

2] Brandspeak, www.exchange4media.com, February 8, 2003.

3] Brandspeak, www.exchange4media.com, July 3, 2004.

Zee Telefilms' Competitive Strategies

• The competition in the television media segment.

Competition from Star and Sony

2] Interview, www.indiantelevision.com, May 23, 2005.

4] Includes Doordarshan National Network and Metro Channel.

6] Federation of Indian Chambers of Commerce and Industry.

Pricing Fuzeon - Cost of Innovation?

Case Details: Price:

• Understand the challenges faced by companies in marketing a new product at a premium

9] AIDS (Acquired Immunodeficiency Syndrome or Acquired Immune Deficiency Syndrome) is a collection of

22] According to IMS MIDAS Quantum.

» Understand the challenges faced by major companies in using word-of-mouth marketing

At P&G, we find this consumer feedback absolutely invaluable in helping us continuously

Wom - The Hottest Trend In Marketing...

1] "What's the Buzz about Buzz Marketing?" www.whartonsp.com, June 3, 2005.

2] "I Sold it through the Grapevine," www.businessweek.com, May 29, 2006.

Red Bull's Innovative Marketing: Transforming a

» To study the use of buzz marketing in establishing a product in new markets.

» To appreciate the importance of identifying suitable target markets, and designing