Marketing Engineering for Excel Case Version

MARKETING ENGINEERING FOR EXCEL CASE VERSION v120419

Case Can the Bunny Hop? By Arun Pereira, Arun Patro, and Gary L. Lilien

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“We fought off Time Warner and held on to the bunny. Now we are saying that it’s too childish! Remember, it is mostly children who consume Nutrine confectionery, not teenagers, not adults. And children love the bunny! My son still remembers the advertisement we ran in the 1980s in Chandamama, with bunnies holding Nutrine SuperStar Toffees. The bunny is our identity. We cannot change what we are!”

—Ganapathy (VP-Operations).

“But things change. Even customers do. The question is, can the bunny hop into new confectionary categories? Will customers accept the bunny in the mints and gum categories?”

—Karthik (VP-Marketing).

Introduction

Nutrine was developed as the umbrella brand (sometimes called the “parent” or “family” brand) for all confectionery products produced by the Nutrine Confectionery Company (NCC). All the products it launched initially carried only the name Nutrine on their wrappers. To attract its target group of children between the ages of 6 and 13 years, Nutrine used a bunny brand character; this bunny quickly became part of Nutrine’s identity. Many middle-aged Indian consumers still reminisce about the Nutrine Bunny of their childhood—the Bunny advertisements, the Bunny teeth they received when they purchased a package of confectionaries, such as Kokanaka Cookies. But modern kids are different: more individualistic, more exposed to global media, and highly brand and image conscious. They understand brands through visual representations. Does the bunny on the wrapper still have broad appeal? More important, is the

Copyright © 2011 by Indian School of Business. Distributed by DecisionPro with permission of the Indian School of Business.

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Nutrine brand still effective as an umbrella brand, which might be extended into new confectionary categories such as mints and gum?

Background1

As competition intensified in the confectionery industry in the early part of the twenty-first century, Nutrine found itself falling behind the competition. After intensive negotiations with both Cadbury and Nestlé, Nutrine finally sold to Godrej Beverages and Foods (GBFL) in June 2006. In April 2007, GBFL entered into a joint venture with Hershey’s.

But the lack of focus in Nutrine’s brand investments between 2003 and 2006 continued to affect the business and its brands. The Nutrine portfolio2 contains products in various confectionery categories,3 but its major brands dominate in three: hard-boiled candy, éclairs, and toffee. Two key brands accounted for a whopping 70% of Nutrine’s revenues: Nutrine MahaLacto (hard-boiled candy) and Nutrine Éclairs.

Unfortunately, both key brands were losing substantial market share. MahaLacto continued to have a strong brand name, independent of its association with Nutrine. Despite minimal branding efforts between 2003 and 2007, MahaLacto ranked eighth in a 2007 brand equity survey, conducted by the Economic Times (behind the chocolate brands Dairy Milk, 5 Star, KitKat, and Perk and heavily advertised brands such as Big Babol and Boomer).

The GBFL–Hershey marketing team had a clear task cut out for it: to define a brand roadmap that would arrest declining revenues, increase the marketing focus on key brands to enhance sales, and build top lines by launching innovative brand extensions into new confectionery categories. A key question considered was whether to continue with Nutrine as an umbrella brand if the company chose to make forays into new categories, such as mints and gum (which includes both bubble gum and chewing gum).

The Marketing Challenge

Karthik (VP-Marketing), Anupama (GM-Confectionery), and Anand (Brand Manager, Nutrine) were in the midst of defining such a plan. Anand had just taken on the role of a brand manager, after spending two years in sales.

“Confectionery is not just for kids,” he noted. “In fact, in the mints category, it’s adults who are the major consumers. Coffee-flavored toffees and éclairs also excite teenagers and adults. At present, Nutrine is targeted toward kids. I’m not sure using Nutrine as the umbrella brand will work for the new categories; I think we must launch separate brands for mints and gum.”

Anand continued: “Think of companies like Wrigley’s and Perfetti. I love Wrigley’s chewing gum, but I can’t imagine eating a Wrigley’s éclair! On the other hand, Perfetti seems to be doing the right thing. They don’t use an umbrella brand; rather, they have separate brands for each of the confectionery segments. Maybe that’s why all their brands are leaders in their segments. I think we’ll need to do the same.”

Karthik smiled, pleased as always by Anand’s passion and energy. But as a newcomer to marketing, Anand tended to jump the gun. “Anand,” Karthik warned, “it costs roughly $1.25 million to build a brand.”

Anupama added, “Even if we launch separate brands for mints and gum, I think we may still need to work toward creating an umbrella brand for other

1 The details of this case are as of June 1, 2007. 2 Appendix 2 displays key brands owned by the Nutrine Confectionary Company. 3 Appendix 3 lists all confectionery categories and the key features of each category.

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CAN THE BUNNY HOP? CASE 2/15

categories. That’s the only way we can create a balance between investments and returns. Also, ITC is doing well using the Candyman umbrella,4 isn’t it?”