fevikwik and the goa market

8/13/2019 Fevikwik and the Goa Market

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Fevikwik and the Goa market

Background

Pidilite Industries Limitedis the largestadhesive manufacturer inIndia.It also has world widepresence in adhesives, art material and industrial chemicals. Pidilite's most famous brand is theFevicol range of adhesives. Its other famous brands are Dr. Fixit, Cyclo,Ranipal,Hobby Ideas,

M-sealandAcron.Pidilite's corporate office is located inAndheri (East),Mumbai.

It also makes Fevikwik -India's first ever One Drop Instant Adhesive. Fevikwik is Indias

leading instant adhesive brand, also known as the one drop instant adhesive. Its 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 Fevikwik's retail expansion available countrywide Pidilite company

officials attribute the success of Fevikwik to the following

Strong consumer brand, which is highly salient in consumer minds due to break throughadvertising. In fact the instant adhesive category is defined by Fevikwik in India.

Wide availability. It is available across over 3 Mln outlets across the country including Urban andRural areas. and probably among the top five to six FMCG brands in terms of reach. Alongside

Fevistik glue stick, it presents a compelling proposition for retailers and stationery stores to stock.

It is available across various types of retail outlets including kirana, hardware, modern trade and

pan shops . It is available even in towns with 2,000 to 3,000 population.

Attractive pricing . Fevikwik is available in a variety of pack sizes (with the Rs 5 MRP SKUcontributing to more than 80% of sales)

Type of end users:

Fevikwik'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 Fevikwik sell are - Hardware outlets, Hardware & Sanitary

outlets, Electrical outlets, FMCG & Kirana outlets, Stationary outlets, Auto outlets, Industrialretail outlets. Different consumer segment purchase from different type of outlets
http://en.wikipedia.org/wiki/Adhesivehttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Fevicolhttp://en.wikipedia.org/wiki/Andherihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Andherihttp://en.wikipedia.org/wiki/Fevicolhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Adhesive


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The challenge in Goa

While Fevikwik has a market share of over 85% in the country , one of the areas where there isstrong presence of competition is Goa where a local brand Cheapy has been in the market for a

long time (much before Fevikwik) . While over the years Cheapys share has eroded , it still has

market share of 29% in Goa. Certain craftsmen segment like Auto mechanics are loyal to thebrand

Sales in Goa:

Fevikwik,

1.74, 65%

Cheapy, 0.76, 29%

Others, 0.15, 6%

Average monthly sales (in cr)

FevikwikCheapy

Others

0%

50%

100%

Fevikwik Cheapy

1.27 0.6

0.47 0.16

Wholesale

Brand Pros Cons

Cheapy Higher margin for distributors and retailers (Relatively lower DP (Dealer Price) of Rs 3.3 for

retailers and DP of Rs 2.90 to Rs 3.15 depending

on purchase quantity for wholesalers)

Loyalty from craftsmen segment of automechanics

Quality not at par with Fevikwik Replacement of damaged pieces

from retailers is not done at regular

intervals

Fevikwik Higher bonding strength Better packaging material High brand recall in household segment (The

Rate issues in retail market due todisturbance from wholesale

Less margin for wholesalers due tohigher landing price (DP of Rs 4.13


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category itself is identified by the name

Fevikwik)

Immediate replenishment of damaged stock atretailer and wholesaler level

for retailers)

Strategies that Cheapy employs to grab market share from Fevikwik:

Cheapy:

1 Steel glass of MRP Rs 20 free with every box of 100 pieces (Rs 310). The stock of 50 units issold in a metal box (which if the retailer doesnt needCheapy salesmen reimburse Rs 10 for

empty box in their next visit)

Gift schemes like LCD, mobile for Quarterly target achievement for wholesalers and semi-wholesalers (15% scheme)

Monthly target achievement schemes of Blackberry mobiles for semi-wholesalers which comesdown to scheme of 3%-4%.

Fevikwik:

Currently operate gift scheme for Fevikwik in retail markets, wherein we give gifts in the form ofMiton pet bottle, Milton casserole, small light torch etc which comes down to a scheme of 6%-

7%

Pidilite runs visibility campaigns for Fevikwik wherein the salesmen use various POPs to increasevisibility and reinforcement for the brand.

Fevikwik does not give schemes in the wholesale market so as to control price issues in retailmarket.

Deliverables:

Approach:

Consider that you have joined Goa branch as an Area Sales Manager. You have been briefed that we

have been losing market share to Cheapy due to decreasing demand from wholesale. What would be

your strategy to grab the market share back from Cheapy ?

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 4Ps of Marketing to come up with solutions

Innovation:Our existing gift schemes in Goa are of the value of 6%-7% of DP (Landing price for dealer).

Can you come up with innovative ideas to increase demand of Fevikwik 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)

fevikwik and the goa market

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