Praxis Business School

Assignment on

PROMOTION PLAN

For

LIGHTWEL MATCH COMPANY

A report

Submitted to

Prof. S. Govindrajan

In partial fulfilment of the requirements of the course

Product and Brand Management

On 28 October 2009

By

Atul Saboo (B08005)

Sourabh Dhariwal (B08033)

Tarun Daga (B08039)

Uma Balakrishnan (B08041)

Product and Brand Management Page 1

Table of Contents
INTRODUCTION ................................................................................................................................. 3

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Product and Brand Management Page 2

 INTRODUCTION
Match Industry in India
Matchbox production can be seen to have started before 1900. As a result of government assistance
and rebates, the industry witnessed the mushrooming of small-scale match companies. In a matter
of 50 years, this sector overtook established mechanized match companies, by foraying into
specialty matches, apart from the existing regular matches.

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

• Wax-coated matchsticks
• Book matches
• Festive matches

They set up two plants in northern India which enabled entry into mass production of matchboxes.
Being the largest Indian match company, Lightwel’s main competitors were small scale
manufactures in northern India.

Case Information

Product: Matchbox

Need/Want: Light and/or heat

Problem: Declining sales

Government Policy: Support for small scale industry

• Reduced excise duty

• Capacity expansion

Physical Nature: Low cost but bulky

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

Value/Volume: From a retailer’s point of view, a matchbox occupies unnecessary space and
the margins or the value from sale proceeds is less. As a result it becomes transport
sensitive. Due to this, retailers are not concerned about the stock status.

Product and Brand Management Page 3

CASE INSIGHTS

Brand Awareness and Usage Levels:

Brand Conversion Ratio

Four Aces 0.33

Chetak 0.15

Snowax 0.23

Inferences:
• 61% of the respondents are aware of Four Aces but only 33% convert to sales. When
compared with competitor Black Bird (Small) which has a conversion ratio of 130%, it shows
us that retailers push the latter though consumers are not highly aware of the brand

• There is low correlation between Brand Awareness and Usage. Therefore, this implies that
the following is a Low Level of Involvement (LOI) product and it is not necessary that people
buy the brand for which they display top-of-mind recall

Stocking Patterns of Retailing:

Brand Reporting Stocking Observed Stocking Difference

Four Aces 93 74 19

Chetak 41 28 13

Snowax 40 37 3

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

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

• Cost of stock-out is low for the retailer as a commodity like matches does not provide
enough revenue or rotation to stock high amount of the product. This is also corroborated
by the fact that it occupies more space and provides low margins as compared to products
like cigarettes or similar items

Product and Brand Management Page 4

 • Since the retailer is the one who primarily decides the brand which most consumers
purchase, it is more convenient for him to stock those one or two brands which provide him
higher margins

Transactions Observed at Retail Outlets:

Brand Asked for Picked out Took Brand Asked by Asked for Total
Bought Brand Brand given by Price Brand; Not
Shopkeeper available,
did not buy

Four Aces
29 9 68 3 2 111
Chetak
6 4 16 2 0 28
Snowax
24 1 0 0 4 29

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

• There is ambiguity in the 2nd segment as to if retailer shows the brands or does a consumer
goes and sees and chooses a brand. Merchandising plays a very critical role in choosing a
brand

• In segment 3, served market share is only 26.33% which shows that the Retailers do not pick
Lightwel Matches when they are the decision makers

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

necessary and sufficient condition

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

Product and Brand Management Page 5

 POSITIONING PLATFORM

Positioning 1
• Irrespective of weather, season and climate, LMC is the best brand of matches
• RATIONALE:

1/3rd of respondents in the study feel it to be of superior quality

Sale of LMC matches have been higher during wet seasons

Positioning 2
• LMC matches cater to all segments of society
• RATIONALE:

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

There are a large number of temples India who would be using matches for
lighting incense and lamps

There is a large section of population which cannot get through the day without a
cigarette or the Indian beedi

It is observed that a substantial quantity of purchase is done by users of traditional
stoves or chulas. This would include the large number of dhabas one sees lining the
entire network of highways connecting India

The advertisements for this positioning cannot be done directly in case of paan shops and kirana
stores where we aim to attract the attention of smokers. Hence, advertising in the form of social
messages will be used.

Product and Brand Management Page 6

PROMOTION MIX IN NEW MARKETS
For a product like Lightwel matches, it is important that we know the geographic locations
where we would like to concentrate. Matchsticks as a category are a commodity. The
differentiating factor with Lightwel matches is that they are resistant to humidity. Due to
this, our focus for promotional activities will lie on places along the coast as well as places
experiencing prolonged monsoon periods.

Demographic segments include:

Maharashtra Andhra Pradesh

Mumbai
Nellore

Karnataka
Guntur

Udipi
Vishakapatnam

Mangalore
Vijaynagaram

Kerala Orissa

Cochin
Ganjam

Kozhikode
Bhubaneswar

Ernakullam
Balasore

Trivandrum West Bengal

Goa
Kolkata

Tamil Nadu
Kharagpur

Kanyakumari Meghalaya

Tanjore Tripura

Puduchery

Kanchipuram

Chennai

The above mentioned cities are divided into two categories:

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

• The remaining cities constitute Tier 2 cities

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

Product and Brand Management Page 7

 BTL ACTIVITIES
Billboards

Identification of Target Audience

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

• We will be setting up billboards in all Tier 1 and tier 2 cities. The exposure will be where the
primary target segments are available i.e. housewives and smokers. Hence, the billboards
will be placed near the entrances of busy market areas and mandis of the cities. Also, they
will be put up outside railway stations

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

Rationale

• The number of footfalls of housewives and women at the market areas are higher, especially
in mandis. If they visit the market for daily or even weekly shopping, the size of the hoarding
itself will attract eyeballs

• The placement at railway stations will also be at the entrance and/or exits so that the
floating population has a glance at the billboard

• The hoardings are so placed because they are by nature a below-the-line (BTL) tool of
promotion and will focus on visibility rather than encouraging purchase by the
consumer/viewer

Promotion Budget
This budget is a projection for one quarter after which the hoardings will be removed. This is
because initial brand awareness would have been created and we can concentrate on other
promotional activities, so as to increase sales.

Particulars Size Rate/ Sq Sq Quantity No Of Total Projected for 3

Ft Ft Cities Months
Tier 1 25’*15’ 80 375 5 6 900000
Cities
Tier 2 25’*15’ 30 375 2 17 382500 3847500
Cities
1282500

Product and Brand Management Page 8

Design

Product and Brand Management Page 9

Product and Brand Management Page 10
 Flex Boards
Flex boards are inexpensive and attractive displays. They are also tougher and more durable as
compared to cloth banners. The costs stand at Rs 10-11 per sq ft of flex.

Identification of Target Audience

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

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

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

• To create sticky eye-balls

Rationale
• Temples attract ladies who are the major consumers of matches within households. Visits to
temples, especially crowded ones where they wait for a while before entering, will be the
right place where the board must be placed. Since it is smaller in size, flex boards are not as
expensive as hoardings and still gather attention

• Flex boards placed in the proximity of paan shops and kirana stores will attract the eyeballs
of smokers. The low cost also enables us to have a higher number of flex boards around the
city and cover more stores for exposure

Promotion Budget
Particulars Size Rate/ Sq Sq Ft Quantity No Of Total No Of Total
Ft Cities Flex
Tier 1 6’*3’ 10 18
Cities 200 23 4600 828000
Tier 2 6’*3’ 10 18
Cities

Product and Brand Management Page 11

Design

The above ad will be placed outside paan shops since we cannot promote smoking explicitly
and will show people bonding over fire, like it happens when 2-3 people smoke together.

The following ad, which is in English will be placed in big cities and upmarket areas. The
second ad, which will be in Hindi will be placed in smaller towns and areas like mandis and
small market areas.

Product and Brand Management Page 12

Product and Brand Management Page 13
 Glow Signs
These can be classified as both BTL activities as well as trade promotion. This is because if we set up
the signs, it is an implicit indication to the consumer about the brand. For the retailer, the company
itself has set up a name plate for the store at no expense to the retailer. The retailer gets an
impression that the company has given him something of use for ‘free’ and there could be an
increase of his attachment with our brand.

Identification of Target Audience

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

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

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

Rationale
• Glow signs at dhabas are useful for them because at highways, the dhabas will have a backlit
glow sign displaying the matchstick brand and the name of the dhaba, rather than a hand-
painted sign. These can be seen in the dark, highlighting their content

• At a few kirana stores which show a larger sale of our brand than in other stores, the glow
sign can be given as an acknowledgement and appreciation of sales

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

Promotion Budget
Bus Stops

Particulars Size Standard Quantity No of Total No of Glow Total

Rate Cities Signs
Tier 1 6*3 5000 25 6 150 750000
Cities
Tier 2 6*3 3000 15 17 255 765000
Cities
1515000

• The standard rates have been derived from two factors:

Rent payable to respective City Corporations (Rs.4800)

Product and Brand Management Page 14


Manufacturing cost of Flex (Rs.200)

• These rates are applicable for only one month because the flow of traffic at bus-stops will be
a recurring set of consumers. The initial month will help brand awareness.

Kirana Shops

Particulars Size Standard Quantity No of Total No of Glow Total

Rate Cities Signs
Tier 1 6*3 300 60 6 360 108000
Cities
Tier 2 6*3 300 40 17 680 204000
Cities
312000

• The standard rates have been derived from two factors:

Manufacturing cost of the Flex (Rs.200)

Electricity charges payable (Rs.100)

Design

FROM:

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

Product and Brand Management Page 15

 MASS MEDIA
Radio
Radio as a medium has recently made a comeback in the radar of communication tools. It is
convenient for listeners of all socio-economic strata because the only cost is that of having a
receiving instrument like a transistor or even a mobile phone, since most of the latter come
equipped with the radio feature.

Identification of Target Audience

• We are aiming at reaching those consumers, primarily housewives who listen to the radio in
the morning hours when most channels play devotional and soft, old Hindi songs

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

Promotion Objective
• Listenership has grown at a rate of 19.7% in the past one year. Radio is an above-the-line
(ATL)activity and aims at explicitly urging consumers to purchase the product

• Housewives and people at dhabas listening to advertisements of the brand may not go and
ask for the brand, but if they see the brand on display, it would trigger recall and encourage
purchase

Suitable Time Slot

• We will be advertising in the weekend slot of Saturdays and Sundays in the slots of 9am to
11am and 6pm to 8pm.

• It will be carried out for a period of 3 months i.e 30 days which are 8 weekends in each
month and a buffer of 2 other holidays per month

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

Rationale
• Weekends have been chosen vis-a-vis weekdays since mornings in the week are a rush for
the family as housewives are busy getting children ready for school and cooking

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

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

Product and Brand Management Page 16

 • The media vehicle chosen is AIR FM (All India Radio) and its local stations because it has the
widest coverage and reach across India. It covers 17 national languages and has over 75% of
market share in the FM radio segment

• Also, the listenership has been very high but the advertising rates have been cut down. This
is an opportunity we can cash in on as the audience is a large part of the target group for our
product

Promotion Budget

Cities No of Rate/10 Second No of Times Ad Cost/Day Cost for All

Category Cities comes in a day Cities
Tier 1 6 700 8 5600 1008000
Tier 2 17 400 8 3200 1632000
26,40,000

Design

Since we are using ten-second slots, the ad will focus on a short message. The radio
advertisement will have background music or sounds resembling a homey atmosphere or
happy families. Towards the last three to five seconds, there will be a voice-over of a lady
saying “Aapki zindagi mein laayen roshni.. Eeshwar.. aur Lightwel”

Product and Brand Management Page 17

 TRADE & SALES PROMOTION
POP Materials
POP or point-of-purchase materials at the retail shop usually push impulse purchase. They are also
advertisements to increase visibility of the brand. This is a sales promotion initiative as the materials
will in direct eye-level of the consumer and attracts eyeballs. We can also classify this as a trade
promotion activity because it provides an incentive or stimulus for the retailer to stock our brand as
his problem of shelf space is taken care of.

Identification of Target Audience

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

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

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

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

Promotion Objective & Rationale

The main problem retailers’ face while stocking matchboxes is that of the space occupied by them.
As seen in the case, Lightwel Match Company was providing the maximum margin to retailers but
they did not find lucrative to stock a substantial amount of the matches, as the margins were
inconsequential.

• To alleviate this problem, we shall be reducing the shelf space occupied by our product and
will be utilising the wall space of the outlet

• The dispensers made of plastic will be similar to paper towel dispensers found at hotels.
Pulling out the matchbox from the bottom will cause the next matchbox to slide into its
place. The dispenser will have the capacity of storing around 30 matchboxes at a time

• These dispensers will be installed at upmarket areas where the retailer usually stocks more
brands and the dispenser makes a difference to the look of the store

• The number of dispensers provided to each retailer will be subject to the size of the store
and wall space available

Product and Brand Management Page 18

Promotion Budget
Items Rate No of No of Kirana Average Total Total
Cities Stores & Pan Dispenser Volume Cost
Shops per Store

6 175 2100 42000

Dispensers 20 17 175 2 5950 119000

161000

Product and Brand Management Page 19

 Free Matchboxes

This is a trade promotion activity as we are incentivising the retailer to stock our brand of matches
by providing him a freebie which is helpful to him. This is also sales promotion for the company.
Since the consumer will be lighting his cigarette using our matches at every instance of purchase at
the shop, this first-hand experience of striking a Lightwel match will encourage him to purchase the
brand when he goes to actually buy a matchbox.

Identification of Target Audience

• Most of the time, people who buy a single cigarette/beedi at the paan shop light it at the
shop itself. The retailer who purchases matchboxes from the distributor has to light the
cigarette at his own expense. He does not charge for this.

• To address this, we will be providing them with 2 free matchboxes i.e. 100 matchsticks with
every lot of order, so that lighting cigarettes do not add to his expense

Promotion Objective
• The company reduces the shopkeeper’s expense of lighting cigarettes and induces him to
order for our brand

Promotion Budget
Items Rate No of No of Free Free Total Total Cost
Cities Pan Samples/Store/Day Samples-3 Volume
Shops Months
Free 0.5 6 125 2 180 135000 67500
Samples
17 125 2 180 382500 191250
258750

The flex boards installed will be at 200 locations out of which around 25 will be near temples. Out of
the remaining 175, there will be 50 kirana stores and 125 paan shops

Product and Brand Management Page 20

 PROMOTIONS IN NORTHERN REGION

We will also carry out promotional activities in the region which we are already strong in, i.e.
Northern region of India. The volume of promotional activities in this region will be less as compared
to the new locations chosen. This is because the brand awareness is already high in this region. This
is why we do not need to advertise to create awareness. As discussed in the case and the facts
generated, it is clear that though consumers seek Lightwel matches, it is the retailers who do not
push our brands.

The case clearly states that Lightwel Match Company gives the maximum margins. This indicates that
retailers are not looking at increased margin. Rather, they want to reduce their own investments in
form of credit, stock and space. Credit may not be a key factor as the rupee value of turnover of
matches is too low. From our side we can improve our sales and distribution network so that the
retailers do not have to keep much stock. Also, to reduce their shelf space we can do the following:

• Provide POP materials like in the rest of India- We would be giving retailers a specific
number of dispensers as per his store size and wall space.
• Providing free matchboxes to retailers so that lighting cigarettes/beedis for customers is not
at his expense

These activities will boost retailer push for our brands.

We shall also concentrate on enhancing awareness in the North to achieve near 100% brand
awareness and top-of-mind recall for Lightwel matches among the consumers. We can carry out
similar promotional activities as done in coastal regions, though the intensity will be lower. Assuming
that we have a presence in around 20 cities and a ratio of 1:3 for tier 1 and tier 2 cities, we have 5
tier-I cities and 15 tier-II cities. The following tools will be used:

Flex Boards
Particulars Size Rate/ Sq Sq Ft Average No Of Total No Of Total
Ft Quantity Cities Flex
per city
Tier 1 6’*3’ 10 18
Cities 100 20 2000 3,60,000
Tier 2 6’*3’ 10 18
Cities

Product and Brand Management Page 21

 Glow Signs
At Bus Stops

Particulars Size Standard Quantity No of Total Total

Rate Cities No of
Glow
Signs
Tier 1 Cities 6’*3’ 5000 13 5 65 325000
Tier 2 Cities 6’*3’ 3000 8 15 120 360000
685000

• The standard rates have been derived from two factors:

Rent payable to respective City Corporation (Rs.4800)

Manufacturing cost of Flex boards (Rs.200)

At Kirana Stores
Particulars Size Standard Quantity No of Total Total
Rate Cities No of
Glow
Signs
Tier 1 Cities 6’*3’ 300 30 5 150 45000
Tier 2 Cities 6’*3’ 300 20 15 300 90000
135000

• The standard rates have been derived from two factors:

Manufacturing Cost of the Flex (Rs.200)

Electricity charges payable (Rs.100)

Dispensers
Items Rate No of No of Kirana Average Dispenser Total Total Cost
Cities Stores & Pan per Store Volume
Shops
Dispensers 20 5 175 2 1750 35000
15 175 5250 105000
140000

Product and Brand Management Page 22

 Free Samples
Items Rate No of No of Pan Free Free Total Total
Cities Shops Samples/Stor Samples-3 Volume Cost
e/Day Months
Free 0.5 5 125 2 180 112500 56250
Samples
15 125 2 180 337500 168750
225000

Product and Brand Management Page 23

 WEB 2.0
Viral Marketing
An emerging concept like Web 2.0 can also be used to our advantage. We will have a set of creatives
which portray the socially responsible side of LMC. These videos will be posted on social networking
sites like facebook, orkut and others. The videos will be targeted at the youth who are Internet-
savvy. The messages will focus on bonding and helping others when in need.

Communities and Fan Clubs

Websites like orkut and facebook have a proliferation of communities and fan clubs
dedicated to various affinities of people. There also are communities for smokers and
people who are loyal to a particular brand of cigarettes. Smokers may join communities like
“I Love Classic Milds” or “Only for Smokers”. We can post links in these communities to our
viral videos or our company website. In the future, if the company comes out with new
initiatives which benefit smokers, news can be updated on these communities also.

The creatives will be as follows:

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Product and Brand Management Page 25
The advertisements designed can be used as hoardings as well as glow signs and flex boards.
The placement of a particular advertising will depend on the context and the type of
customers coming to that area.

Product and Brand Management Page 26