reverse auctions in supply chain

Analysis of the Strategies for Competitive Advantage in New Product Development in an FMCG firm (RSPL or Ghari)

Guide: Dr. Uday S. Racherla

Submitted By: Ummed Singhoya

Roll No. 11125063

11MBA,

Table of Contents

Executive Summary

Introduction Objective of the project? Why did you choose your project? Or Importance of the project (NPD)? What you did in your project? Finding of your project? How company would be benefited bcoz of this project?

Company overview Company Profile Products categories

o My focused Producto Why did I pick this product?

Business strategy

Company strategy Current Competitive strategy

Why they need new strategy? Issue with current strategy

Fear of Competitoro Cost Leadership o Product differentiationo Focus

Proposed Competitive strategy

New Product development Strategy Focused Product: Xpert dishwash bar and Ghari detergent powder

What is product? Contents of product? Competitors product in same domain? How competitor’s product is different than us? Competitor’s product contents? Pricing of Product

o RSPLo Competitorso Where is the differentiation?

Comparison of two different product in RSPL Xpert dishwash bar and Ghari detergent powder

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Where they are not good for Xpert dishwash bar? Where they are good for ghari det. Powder? How they created different product and how could create competitive advantage in

sustainable manner for future growth?o Ex. Of competitive advantage creation

Conclusion

References

Annexure Data Collection:

Questionnaire Prepared Answers of questions Visits facts

Executive Summary

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With the Indian economy growing at an average rate of 5-7%, middle class is swelling and

with that the purchasing power and hence the need for better quality of life and products to

support them. Therefore, FMCG sector is one of the fastest growing and highly competitive

sectors in India. Indeed, the rest of the world is looking for investment opportunities in India,

especially due to prolonged recession in the industrial west.

It is not surprising that competition in the FMCG sector is increasing day by day and there is

an urgent need by firms to establish competitive advantage in order to sustain revenues and

profits and grow market share. Due to competition, successful firms are trying to bring new

innovations to the market place, so that they can satisfy the unmet/under met needs of the

consumer. To match the needs of the consumers, companies need to map the market

continually in terms of changes in consumer needs as per changing life styles, family

structure, work-life balance etc. Thus, they need to design their strategies to be flexible and

accommodating; otherwise they won’t be able to stay in the market. The companies need to

make efforts to make new products by satisfying the unmet/under met needs of consumers.

The RSPL is one of the key companies in the FMCG sector, with presence in Dairy, Laundry

and Household Care categories, where competition is very high from the other multinationals

such as Unilever, P&G and Colgate Palmolive, which have great competitive presence in

many other geographic locations. After having done literature study of the RSPL firm, I

understood that it is flourishing day by day. I understood that the company is making

significant efforts to grow the market share and profits. It would be a valuable study to

analyze the existing strategies of RSPL in different categories (Dairy, Laundry and

Household Care) in terms of the industry structure and competitive forces, in order to

establish the source of RSPL’s competitive advantage and strategic opportunities for new

product development for the future.

I would like to study the strategies of RSPL and understand the rationale behind new

product development, so that potential new opportunities can be identified for

competitive advantage in the future. Once my study is complete, I would share my

academic learning on the strategies for sustainable competitive advantage with RSPL in

near future.

Introduction

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New product development is the most crucial stage for a company and it carries significant

risk in the context of product failures that might occur right after their launch in the market.

The product failure rate can be as low as 30% and as high as 90% in this regard. (Antil,

J.1988). The global market is characterized by varying taste patterns of consumers that are

influenced by their diverse cultures and preferences. Therefore in the face of rapidly changing

consumer tastes, technology and competition, companies should continuously provide the

global market with new products that satisfy all segments of the market. This is a tedious task

however, and requires systematic Research & Development by companies in order to create

successful products that have a considerable market demand and appear attractive to the

consumers worldwide. In the case of RSPL, the company has always tried to innovate new

products through their R&D efforts keeping in view the taste patterns of various segments of

the global market. The study sites the example of RSPL’s dish bar range that was exclusively

innovated for Indian people.

Product innovation is a complex task and it requires careful scrutiny by the company based

on the above mentioned factors.

Today the global market is signified by a fiercely competitive environment in which the

important target for companies is to capture increasing returns to scale while minimizing /

lowering costs of production with great speed and flexibility (Kotabe, 1990). RSPL as an

international chain tries to achieve these targets through its consistent R&D innovations in

order to create products that are marketable and have a significant turnover within various

segments and sub-segments of the international market.

Moreover, if any company fails to respond to new product introductions by competitors with

appropriate speed, it will loose out on the desired market share due to late market penetration

and eventually its profits will be dispelled (Kotler, 1988).

In this regard, RSPL tries to scrutinize its competitor’s products in order to evaluate the

viability of its innovations during new product development process and this is done by

RSPL’s R&D segment. It expends about 20% more on its R&D for new product development

as compared to its competitors such as Unilever, Nirma and Jyoti Laboratories, occupying

number one position in the market.

The front-line staff in an organization, like sales assistants, receptionists, etc., plays a major

role here, as these are the ones that come in contact with the customers the most.

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Organisations today are giving increasing importance to the front-line staff as the

management realizes that excellence in service can be achieved only by means of having

efficient and dedicated employees as their front-line staff. The employees occupying the

position, as front-line staff should not just be friendly to their customers but they should be

masters in what they are doing to please customers. (Schlesinger and Heskett, 1991)

OBJECTIVE 1

Why is new product development so important for a company like RSPL?

RSPL is a now well established company in FMCG business and in order to maintain its

superior standing in the global market, it has to lay considerable emphasis on the strategies it

employs for development of new products.

Two important concepts can be derived from this concise definition: firstly, a style is not

fashion unless it is commonly accepted (prevailing); secondly, fashion is transient (at any

given time). These characteristics of the fashion phenomenon had profound implications for

the supply chain, the product life cycle and the complexity of the markets served by L’Oreal

and its competitions.

The speed at which fashion markets change is very high, with very short product life cycles.

Many fashion items have product cycles as short as half a year, or even a few weeks.

Consumer’s preferences depend on the season, on the social and cultural environment and on

the effects of previous marketing communication for fashion items or substitute products

(Mintel, 2005). Responding in a timely way to these changing demands is thus vital for

success. Moreover, Crawford (1988) has also established that without new products, firms

will certainly be at a stand still. The research also highlights that initial or early entry of new

products can result in new market development, long term market dominance, and

foreclosure of competitors’ responses.

The characteristics of the fashion industry require companies to make strategic choices about

factors such as quality, speed, technology, price and flexibility: these factors define the

positioning of a company (Abell, 1993). Drawing upon the information provided in the case

study, it can be suggested that L’Oreal operates in the top end of the fashion market with

clear market positioning, which can be depicted as follows:

Company Overview:

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Company Profile:

Rohit Surfactants Private Limited (RSPL)

Rohit Surfactants Private Limited, a flagship company of RSPL Group, owner of Trademark

“GHARI”, was incorporated on 22nd June 1988 with the name Shri MahadoeSoap Industries

Private Limited and the name was changed to its present name with effectfrom 17th June

2005.The group has under gone another major restructuring in the year 2008. The

saidrestructuring has enabled the group to consolidate the detergent and leather

business,alongwith all related brands into one single entity and separating the real estate

businessinto another entity.

Historical Background:

Late Dayal Das with his sons Shri Murli Dhar Ji and Shri Bimal Kumar Ji initiated the

groupas a small family business. It is said that knowledge and expertise comes

fromexperience. It was their efforts and dedication that laid the foundation on which the

empireof RSPL group has been build up within a span of three decades.

Group comprises of companies mentioned under:-

1) Rohit Surfactants Private Limited -Company does the manufacturing and marketing of

detergents, toilet soaps, leather & footwear, wind energy and other FMCG products.

2) Nimmi Build Tech Private Limited (formerly known as Poonam Developers

&Infrastructure India Private Limited) - This company is involved in the business of

construction and real estate.

3) Red Chief: It is one of the leading footwear brand in India since 1997, manufacturing high

quality genuine leather footwear at unbeatable price. The company has recorded an

impressive growth through its enthusiastic and highly motivated marketing team; Company

has estimated sales figures of Rs. 900 million in benchmarking standards. In the domestic

market it is one of the most admired footwear brands and holds the valued market share for

leather footwear.

4) Wind Energy: In the year 2008, with a view to expand the Wind Power Project, the group

has also set established another Wind Power generation project at Gujarat. The capacity of

the project is 9.60 MW with 12WECs’ of 800 KW each.

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5) Namaste India: RSPL Limited is all set to further consolidate its position in the dairy

business with the name of “Namaste India Foods Private Ltd.” Along with the taste the milk

is full of calcium, protein, carbohydrates, vitamins, etc., for healthy growth of a human body.

The Company aims to provide remunerative returns to the farmers and also serve the interest

of consumers by providing quality product which are good value for money.

Product Categories: (FMCG Division only)

Household Products

Ghari Detergent Cake

Ghari Detergent Powder

Xpert Dishwash Bar

Personal Care Products

Venus Bathing Soap

My Focused Product: Xpert Dishwash Bar

Why did I choose this product?

The brand is using its Aquashine formula as the USP and like any other brand, it is talking

about quick and easy cleaning. Xpert is priced around Rs 10 for 200 g bar while Vim around

Rs 12. Exo is priced at par with Xpert. The brand hopes that the price differential together

with celebrity will tilt the consumer choice towards Xpert. This aggressive pricing +

promotional strategy is going to affect the smaller brands rather than Vim in the short-term.

What is lacking in the current strategy of Xpert is the absence of a clear differentiator. While

Aquashine formula is the USP, the brand fails to communicate what it means and how it is

going to benefit. May be in future campaign, these will be explained. Without a powerful

differentiator, Xpert may not be able to break into the market of Vim. Exo tried with its

aggressive promotions and anti-bacterial properties with limited success. It is very difficult to

create a differentiator in a market like dishwash bar and almost all options has been used up

by the players.

Competitive Strategy: Current Competitive Strategy:

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Why they need new strategy?

The different strategies used by RSPL for this phenomenal success are:

1. Achieve higher market penetration in existing markets and simultaneously

exploring new markets

Most of the Ghari detergent sales come from Uttar Pradesh, which is also its birth place,

Madhya Pradesh and Maharashtra. Recently it has started distribution in 8 more states, thus

making its presence in a total of 20 states across the country. Entering new markets doesn’t

mean that the existing markets are saturated as far as Ghari detergent is concerned. Even in

the existing markets, the market share of the competitors was decreasing while the industry as

a whole was growing.

2. Providing Incentives to the Dealers

Ghari detergent provides a profit margin of 9% to its dealers, which is substantially lower

than the standard 12-13% for premium brands, and at the same time, higher than the 6-7%

being offered by the competitors in the same segment. Thus the company has been working

towards creating a strong dealer base while keeping its prices low.

3. Advertising Strategy

Ghari detergent has been very innovative in reaching the customers. With only 35 crores

allotted for marketing and promotional activities it has used trains for initial campaigns to

promote the product. Their hoardings were visible at all the railway crossings in Uttar

Pradesh and West Bengal. RSPL has even promoted Ghari in roadside shows and magic

shows in smaller towns where people are unlikely to see other brands. Recently it has

sponsored a show Rakt Sambandh on NDTV Imagine. Also, instead of going with celebrity

endorsement, the brand has left it on the consumers to try the product and decide if they like

it, just as it claims in its campaign.

4. Segmentation Strategy

For any successful marketing plan segmentation is the first key step. The organization must

carefully craft its strategy to exploit the market potential. RSPL being a small firm could not

afford expensive marketing strategy so it has segmented according to it. Generally market is

segmented on the basis of demographic, geographic and psychographic variables but RSPL

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has mainly concentrated on geographic variable. The geographical split of Ghari detergent is

shown below.

5. Pricing Strategy

Keeping in mind its target market, i.e. the lower end of economy, the company has, as far as

possible, avoided passing on the burden of rising raw material costs on to the customers.

6. Restructuring and Optimization of Resources

Citigroup Venture Capital India (CVCI) approached RSPL in 2006 to buy around 14% stakes

but the deal did not succeed due to valuation differences. This proved to be an eye-opener for

RSPL as it immediately decided to go for introspection, restructured its business and

optimized its resources.

7. Regional Focus

Due to its financial inability to compete with HUL and P&G in other states, RSPL had

launched Ghari detergent in Uttar Pradesh. It focused on developing an intense distribution

network to reach the customers effectively. This is evident from the fact that out of 3000

dealers in India Ghari has 900 dealers in UP and 25 of them are in Kanpur alone. It also has 9

out of its 18 manufacturing units in UP.

These effective strategies implemented by RSPL for Ghari has made it to the second largest

selling detergent in India. In the last fiscal, it has enjoyed a profit after tax of Rs. 190 Cr,

more than many of its MNC peers. Further to overtake Wheel the challenge that RSPL should

now be concentrating is on the spread in South and Western parts of India and build a

distribution network as strong as HUL’s.

Proposed Competitive Strategy:

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Cost differentiation

Product diff

Focus

New Product development Strategy

– What are products?

• Xpert : Fast Action

• Xpert is a dishwash bar brand from Rohit Surfactants Pvt ltd (RSPL) which is now on

an promotional overdrive. The brand is from RSPL which is famous for its Ghari

detergent brand. Ghari literally made the large FMCG MNCs a run for their money.

The Ghari brand is infact larger than the HUL's Surf and is the second largest selling

detergent brand in the country.

• Xpert was launched in 2006 by RSPL as a part of its diversification. The brand is now

competing in the Rs 800 crore utensil cleaner market. The market is dominated by

HUL's Vim with a share of around 60%. The market is characterized by one big

player and several small players. The nearest rival is Exo diswash bar and Pril with a

share of around 8% each. As history has shown, fighting HUL's Vim for market

leadership position is not an easy task but that is the risk that a challenger brand needs

to take.

• Xpert has chosen celebrity endorsement as a route to attract consumers towards the

brand. For this Xpert chose Madhuri Dixit as the celebrity endorser. The brand is

currently running a campaign in TV featuring the celebrity.

• The brand is using its Aquashine formula as the USP and like any other brand , it is

talking about quick and easy cleaning.

• The ad is very basic and rather than using Madhuri Dixit for testimony, the brand

chose to use her as Gangu Thai ( a housemaid character in the movie Ganesha) for the

campaign. If one has missed the Ganesha movie, the ad plot will be half lost.

• Xpert is priced around Rs 10 for 200 g bar while Vim around Rs 12. Exo is priced at

par with Xpert. The brand hopes that the price differential together with celebrity will

tilt the consumer choice towards Xpert. This aggressive pricing + promotional

strategy is going to affect the smaller brands rather than Vim in the short-term.

• What is lacking in the current strategy of Xpert is the absence of a clear differentiator.

While Aquashine formula is the USP, the brand fails to communicate what it means

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and how it is going to benefit . May be in future campaign, these will be explained.

Without a powerful differentiator, Xpert may not be able to break into the market of

Vim. Exo tried with its aggressive promotions and anti-bacterial properties with

limited success. It is very difficult to create a differentiator in a market like dishwash

bar and almost all options has been used up by the players.

• It will be interesting to see how this high profile attack of Xpert will play out in the

future. In the short-term we will see some action in this dull category .

– Contents of products?

– Competitors product in same domain?

• Competitors:

• Vim : The Vim Challenge

• Vim is the market leader in the Rs 400 crore branded dishwash category. This 100

year old brand has evolved with the changing Indian consumer and is a power brand

of HLL stable. The Dishwash market in India is estimated to be in the range of Rs

600-1000 crore ( conflicting reports on the market size) while the branded dishwash

market is roughly 40%.The dishwash market consists of three categories: Powder, Bar

and Liquid. Bar is the largest category followed by Powder and then liquid. Bar

category constitutes 60% of the total market.

• Vim has created the dishwash bar category in 1993. Till that time urban households

used dishwash powders. The bar offered many advantages to the homemaker over the

powder which was messy and uneconomical.Since then Vim Bar ruled the dishwash

market .Currently the brand has a market share of over 60%.

• Vim was initially positioned on the lemon content in the bar. The brand using its

ingredients positioned itself on its Stain Removing benefit. The positioning was

consistent through these years. A terrific marketer HLL is, invested heavily in this

brand and made sure that the brand stayed on the growth stage of its PLC. The brand

changed its form,added new features and expanded the market to stay on the growth

path. To reinforce the stain removing property , the brand repositioned in 2003 by

introducing the Stain Cutter feature .The company was trying to extend the brand

from "Dish wash" to Kitchen Care market.The brand also created much inroads into

the market with its Vim Challenge campaign which directly compared the brand with

competition.

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•

• By looking at the kind of promotions that the various players in this category , I often

wondered what is the logic behind these high spends on promotion. The logic lies in

the potential of this category. The percapita consumption of this category ( value

terms) in India is hardly Rs 4 while in UK it is Rs 150. There is long way to go for

this category...

• Vim faces intense competition in this category not only from other brands but also

from the traditional methods. In rural areas, Ash is used to clean utensils and the

biggest hurdle in rural penetration of this category is to educate the rural folks to use

Soap instead of ash.

• In the branded segment, Vim faces competition from brands like Exo from Jyothi Lab

, Pril, Sabeena and host of other local brands. Exo is the challenger brand forthe

market leader Vim. Exo brand has effectively differentiated itself by using its anti-

bacterial property and uses the ingredient Trichlozene to reinforce the germ fighting

positioning.

• The emerging category in dishwash market is the liquid dishwash. Pril from Henkel

commands this market with a share of 72%. Although Vim has launched its own

variant, it failed to create an impact and was withdrawn in 2003. 2006 saw a relaunch

of Vim drop with Actor Madhavan endorsing the brand. Pril has countered the

campaign using Shobana as the brand ambassador.Marketers beleive that over a

period of time, consumers will shift to Liquid since it offers more economy and

convenience. But there is a problem with this category: Liquid dishwash is targeted at

urban upper middle class home makers and here the users are home maids rather than

home makers. It will be difficult to teach house maids to use the liquid efficiently .

• The powder segment is dominated by Sabeena brand from ECOF. Sabena is very

strong in the southern market and has a market share of over 65%.

•

• To stay on top of this highly competitive market, Vim has invested not only in

promotion but also in product improvements. In 2005, the brand took on the most

problematic aspect of this category i.e the dishwash bar getting soggy. The reason is

that these bars are kept near the sink and is always in contact with water and with in

days, the bar gets messy. Vim then launched one of the most customer centric

innovation at that time : Poly coated Vim bar. The coating prevented the bar from

becoming soggy and hence the brand became more economical. This innovation is a

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testimony to HLL's ability to understand Indian consumer and translate that to product

improvements.

• Although these innovations can be copied by the competition, Vim has constantly

improved upon the marketing mixes and has stayed relevant and different in the

consumer's mind.Vim is also a classic example that even a boring category like

Dishwash can be made exciting through smart thinking.. cheers !

• Exo : Anti-bacterial DIshwash Bar

• Exo is a dishwash brand from Jyothi Labs. Exo is a challenger brand in the Rs 10,000

crore dishwash product category in India. The brand currently focuses on South India

and is slowly spreading its wings nationally.

• Exo was launched in 2000. The brand was launched as a part of the diversification of

JLL whose bread and butter was from a single brand- Ujala. Exo entered a very tough

market which was dominated by the market leader Vim.

• In competitive strategies, theory talks about various strategies like Frontal Attack,

Bye-pass attack etc. Exo chose to attack Vim directly and aggressively. When a

competing brand chose to attack the market leader, it needs to have a credible

differentiator inorderto compete and succeed. Vim have tremendous brand equity in

the market and it is a tough task to fight such a leader.

• Exo's marketing strategy is a notable example of successful frontal attack. The brand

was able to find a credible and sustainable differentiator against Vim. Exo took the

position of an Anti-bacterial dishwash bar to fight Vim.

• Exo was India's first Anti-bacterial dishwash bar.As usual, the poor Keedanu ( germs)

was at the receiving end. Exo positioned itself as a dishwash bar that killed all the

bacteria in the utensils. The positioning was very smart since Vim was positioned on

the basis of cleanliness.

• Exo was innovative in creating an awareness about the possibility of germs in

utensils. There was also another smart idea from the brand. In theory, we often say

that the differentiator should be relevant, sustainable and not easily copied by

competitors. Exo's positioning of anti-bacterial benefit can be easily copied by the

competitor . In order to counter this, Exo used an ingredient "Cyclozan " to protect its

differentiation. The ingredient brand " Cyclozan " ensured that the differentiation of

Anti-bacterial benefit cannot be easily countered.

• By launching Exo with anti-bacterial property, Exo created both point of parity and

point of difference with Vim. The brand talked about cleanliness thus created parity

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with Vim and then used Cyclozan to establish point of difference thus creating a

powerful position in the mind of the consumers.The results was visible . Exo became

the second largest dishwash bar in South India.

• To fight the aggressive attack by Exo, Vim launched its own anti-bacterial variant

using neem as the ingredient.

• Exo later went into a brand extension mode by launching Exo dishwash liquid and

later Exo Scrub. With the acquisition of Henkel in India by JLL, the fate of Exo

dishwash liquid appears bleak since Henkel's Pril is the market leader in the dishwash

liquid market. Exo will now be restricted to only dishwash bar category.

• Exo is a brand which is promoted exhaustively by Jyothy labs. The brand has very

high share of voice and ads keep on driving the USP of germ-killing property. Since

the dishwash bar category is not a high involvement category, the brand had benefited

greatly by this share of voice.

• With the acquisition of Pril brand from Henkel, Jyothi labs now have two formidable

brands in the dishwash category. Vim now faces the most intensive threat to its

leadership position. It will be interesting to watch how the fight will turnout to be.

BAR Clean upVim HULExo Jyothy Laboratories

LimitedSabena ECOFSparkle Pascoe’sOdopic DaburTop cleanNip FENA (P) LIMITEDPril HenkelHenko HenkelXpert RSPL

• Comparison of two different product in RSPL

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– Xpert dishwash bar and Ghari detergent powder

Household Care

The detergents segment is growing at an annual growth rate of 10 to 11 per cent during the

past five years. The local and unorganized players account for a major share of the total

volume of the detergent market. The preference is given to detergents in urban area compared

to bars. Household care segment is featured by intense competition and high level of

penetration. With rapid urbanization, emergence of small pack size and sachets, the demand

for the household care products is booming. In washing powder segment, HUL is the leader

with ~38 per cent of market share. Other major players are Jyoti Laboratories, Nirma, Henkel

and Proctor & Gamble.

Xpert- the dishwasher

Five MAIN COMPETITIVE STRATEGIES ARE:·

Overall low cost leadership strategy·

Best cost provider sstrategy·

Broad differentiation strategy·

Focused lowcost strategy·

Focused differentiation strategy Here competitive strategy varies from sector to sector and company to company. Thus, it is not easy to predict a single or to find a single strategy for the wholesector.When wecome onto FMCG Sector main strategies lay behind market strategies, cost, and quality strategies.

Growth Drivers

HUL

The Company has been launchingnewproductsandbrandextensions,withinvestmentsbeingmadetowardsbrand-buildingandincreasingitsmarketshare.HULisalsostreamliningitsvariousbusinessoperations,inlinewiththeOneUnileverphilosophyadoptedbytheUnilevergroupworldwide.IntroductionofpremiumproductsandadditionofnewconsumersviamarketexpansionwillbeHULsgrowthdrivers

ITC

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ITCsbackwardintegrationtoensurethatitsproductspassefficientlyfromthefarmstoconsumershashelpedittocutdownsupplyandprocurementcosts.

ITCsnon-cigaretteFMCGbusinessleveragesthelargedistributionnetworkthecompanyhasdevelopedbysellingcigarettes over the years

RSPL’s new product development strategy:

consistent R&D efforts

address and maintain its balance between R&D-marketing interface

the company follows a three tier strategy for producing commercially viable products. The three structured strategy includes L’Oreal’s advanced research, applied research and product development, each stage having its own unique functions to perform in order to create successful innovations.

Consumer goods innovation is related to insights intelligence, new product development and marketing communications & sales promotions. Here we would only look on New product development analysis.

Shoppers’ and consumers’ interests as

innovation triggers

General Me My social circle My world

Needs /

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Insights Gathering and

Analysis

NPD communication

Sales promotion

Competitive Strategy

Cost Leadership Differentiation

Manufacturing Strategy

Cost Delivery Flexibility Quality

Firm Performance

Market Share

Sales Growth

Interests /

Concerns

Consumption

/ Shopping

Drivers

How can We help you innovating?

1. Health and Wellness

Bio / Natural product claim

The number of Bio and natural products keeps growing at most of the categories as the perception of artificial ingredients is considered unhealthy and some times evil. NATURAL, BIO and GREEN are most common words included at the brand / sub-brand / taglines of these products.

Household & Personal Care


Functional benefits through natural ingredients

Natural functional benefits are up! The most common innovation benefits targeted are beauty, energy, health, anti-aging and relax. The natural ingredient most of the times becomes the essence of the product personality and communication.



Less added stuff is Better!

Lean trend is growing within new consumer goods launches. “No added” claims were the start of this new generation of NPDs. Häagen-Dazs’s Five and Sanex’s Zero% are now solid examples of this trend.



ConvenienceConvenience keeps as a leading innovation driver. Packaging, conservation, transportation /

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storage, regeneration, usage, consumption, dosing and bundled benefits are the major subtrends. In the household and personal care categories, pencil type packaging / dosifiers are growing in popularity.


2. Value / Time Savviness

Value-for-money

Recession and a growing popularity of private label products, are triggering Value-for-Money product launches. Some companies revamp their brands (i.e. Henkel’s Dixan), others truly launch new concepts / brands (i.e. Coca-Cola’s Menos es Más), while the rest communicate price rebates at their packaging.


3. Special Rewards Seek

Collector’s edition

For years, product collecting has been a profitable niche for many companies. Beverage products such as Coca-Cola have a long experience with this type of NPD. With a recession or without it there will always be a number of collectors willing to pay a premium for these kind of products.


3. Special Rewards Seek

Limited edition

Most of the times, limited edition products are variants of a regular product with a different flavor (in the case of Foods & Beverages), which are offered through impulse channels. In essence, the question is that a claim such as “limited edition” should trigger an impulsive behavior from the customers.


4. Self-image Projection / Aspirational Reinforcement

Exotic / Stylish

Exotic and stylish product designs target emotional buying. Wrigley’s Five chewing gum is an excellent example of an exotic + stylish design product, whose launch has been reinforced with a communications image in the line of Apple’s iPhone.


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Young attitude

Young people and youngsters wannabes are the target segment for these products, such as Pringles

Xtreme. Online cultural elements are generally integrated into the packaging visuals to reinforce this

youth and fresh image (i.e. Perrier’s Conversations packaging).



Retrostyle / Nostalgia

Brands with a large heritage can always be relaunched with variants recovering its old image but adapted

to new times (i.e. Pepsi’s Pepsi-Cola throwback). Some other times, a product can be recovered and

commercialized again with its same image and communication as n years ago (i.e. Legrain’s Moussel).


5. Social Awareness

Fair Trade / Solidarity

Fair trade, ethics and solidarity are a strong concern amongst Gens X and Y. Some brands promote

charity actions and communicate them through trade-marketing material. Some others place logos of

fair-trade or NGOs certifications. Just a few of NPDs are exclusively oriented to Fair Trade and Solidarity.


5. Social Awareness

Eco-friendship

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Eco-friendship product development trend grows due to the emphasis placed on ecological concerns by

global opinion leaders and the massive media. Ecological food, sustainable packaging and greener

cleaning products are part of this trend.


We help companies to lead their innovation initiatives around the following areas:

New Products and Services Development

We help companies to generate a new product “from scratch” and / or to innovate through any of their products’essential attributes:

• Format / packaging• Usage / storage / disposal• Claim / positioning / communication • Consumption / purchasing moments • Interaction with other products / services• Develop Supply Strategy and capability across the ingredients in the

portfolio for successfully supporting new product launches• Guide and build capability of the Franchisee SCM teams to ensure 100% On

Time In Full deliveries of all new products

• Manage SCM interface with all internal and external customers

ConclusionsThis study has helped to understand various concepts related with reverse auctions and their

mechanism. On one hand auctions offer various benefits to the buyers like cost saving, time

saving, real time market information etc. the buyer has to ensure the supplier buy-in in the

auctioning process. Reverse auctions have a major effect on the buyer-supplier relationship.

This impact is very critical in B2B kind of set-up when a lost relationship can outweigh the

cost and other saving the auction provided. The buyer has to choose a strategy that maximizes

his saving while preserving the relationship with his supplier. These strategies can a include

decisions like line or lot auctions, lot size for the auctions, the level of visibility in the

auctions.

Also the buyer must look at minimizing the total supply chain cost and not award the auction

based on minimum production cost. This task becomes increasingly difficult when buyer

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doesn’t have the cost estimate of the supplier. In that case submitting a proxy function to the

auctioneer helps the supplier.

Finally all the auction process will be of no use if there is collusion among the suppliers or

the number of participating suppliers is very less. All the auctioning models and strategies

revolve around the assumption that there is no collusion and there are sufficient suppliers in

the market.

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References

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reverse auctions in supply chain

Documents