Effective and the Ago market Background Fidelity Industries Limited is the largest adhesive manufacturer in India. It also has world wide presence in adhesives, art material and industrial chemicals.
Pipette's most famous brand is the Officio range of adhesives. Its other famous brands are Dry. Fixity, Cycle, Iranian, Hobby Ideas, M-seal and Acorn. Pipette's corporate office is located in Andrei (East), Iambi. It also makes Effective -Indian's first ever One Drop Instant Adhesive.
Effective is Indian's leading instant adhesive brand, also known as the 'one drop instant adhesive'.It's ability to bond a variety of surfaces in a matter seconds makes it a handy home and industrial adhesive. One of the most popular applications among consumers for the 'instant one-drop adhesive' is gluing back sandals and handbags that are coming apart, according to the company's findings. The importance of end-consumer adoption is reflected in Effective's retail expansion - available countrywide Fidelity company officials attribute the success of Effective to the following - 0 Strong consumer brand, which is highly salient in consumer minds due to break through advertising.In fact the instant adhesive category is defined by Effective in India. 0 Wide availability.
It is available across over 3 Ml outlets across the country including Urban and Rural areas. And probably among the top five to six FMC brands in terms of reach. Alongside Festivities glue stick, it presents a compelling proposition for retailers and stationery stores to stock. It is available across various types of retail outlets including Koran, hardware, modern trade and pan shops . It is available even in towns with 2,000 to 3,000 population.
0 Attractive pricing .Effective is available in a variety of pack sizes (with the RSI 5 MR. SKU contributing to more than 80% of sales) Type of end users: Effective's growth has come from adoption by household consumers (which contributes to more than 70% consumption) in addition to craftsmen (auto mechanics, electricians, plumbers, mobile repairmen, spectacle repairmen and the like) Type of retailers: The type of outlets through which the Effective sell are - Hardware outlets, Hardware & Sanitary outlets, Electrical outlets, FMC & Koran outlets, Stationary outlets, Auto outlets, Industrial retail outlets.Different consumer segment purchase from different type of outlets The challenge in Ago While Effective has a market share of over 85% in the country , one of the areas where here is strong presence of competition is Ago where a local brand Cheap has been in the market for a long time (much before Effective) . While over the years Cheaply share has eroded , it still has market share of 29% in Ago.Certain craftsmen segment like Auto mechanics are loyal to the brand Sales in Ago: Effective, 1.
74, Cheap, 0. 76, others, 0. 15, Average monthly sales (in cry) Effective Cheap Others 100% Effective Cheap 1 . 27 0. 6 0. 47 0.
16 Wholesale Brand Pros Cons Cheap 0 Higher margin for distributors and retailers 0 (Relatively lower DIP (Dealer Price) of RSI 3. 3 for retailers and DIP of RSI 2. 0 to RSI 3. 5 depending on purchase quantity for wholesalers) 0 Loyalty from craftsmen segment of auto mechanics 0 Quality not at par with Effective 0 Replacement of damaged pieces from retailers is not done at regular intervals Effective 0 Higher bonding strength 0 Better packaging material 0 High brand recall in household segment (The 0 Rate issues in retail market due to disturbance from wholesale 0 Less margin for wholesalers due to higher landing price (DIP of RSI 4. 13 category itself is identified by the name "Effective") 0 Immediate replenishment of damaged stock at retailer and wholesaler level for retailers)Strategies that Cheap employs to grab market share from Effective: Cheap: 0 1 Steel glass of MR.
RSI 20 free with every box of 100 pieces (RSI 310). The stock of 50 units is sold in a metal box -(which if the retailer doesn't need Cheap salesmen reimburse RSI 10 for empty box in their next visit) 0 Gift schemes like LCD, mobile for Quarterly target achievement for wholesalers and semi-wholesalers (1 5% scheme) Monthly target achievement schemes of Blackberry mobiles for semi-wholesalers which comes down to scheme of 3%-4%.Effective: 0 Currently operate gift scheme for Effective in retail markets, wherein we give gifts in he form of Minot pet bottle, Milton casserole, small light torch etc which comes down to a scheme of 6%-7% 0 Fidelity runs visibility campaigns for Effective wherein the salesmen use various pops to increase visibility and reinforcement for the brand. Effective does not give schemes in the wholesale market so as to control price issues in retail market.Deliverables: Approach: Consider that you have Joined Ago branch as an Area Sales Manager. You have been briefed that we have been losing market share to Cheap due to decreasing demand from wholesale.
What would be your strategy to grab the market share back from Cheap ? Targeting the market: Understand the difference between wholesale and retail . Can we increase the contribution from retail? What would you target first? Wholesale or retail?Specify the reasons. You can focus on the Place & Promotion part of ups of Marketing to come up with solutions Innovation: Our existing gift schemes in Ago are of the value of 6%-7% of DIP (Landing price for dealer). Can you come up with innovative ideas to increase demand of Effective in wholesale markets without altering the existing margins (We expect you to do some research on the psyche of wholesalers and what really motivates them)