Strepsils

Parent Company Reckitt Benckiser

Category Personal Care Brands- Health

Sector FMCG

Tagline/ Slogan First aid for sore throats

USPA complete range of products to treat sore throats, cough, cold.

STP

Segment Throat lozenge segment

Target Group Urban middle class adults

PositioningA palatable, comfortable, reliable and very effective way to soothe a sore throat.

Introduction

Strepsils As a Brand

Picture of Sender

Picture of Receiver

PersonalityPower ful remedy, premium

product

PhysiqueCandy, First aid for sore

throats

RelationshipQuality,test and heritage

CultureIndian,

Good trade relation

Internalization

Externalization

ReflectionReliability

Self ImageVariety of flavours, Consistent Quality

Mazay mazay min gala saaf

Reckitt Benckiser (RB) is a consumer goods company, owning many household name brands. The company has 19 'powerbrands' which account for around 70% of the company's sales.

Fabric Care: Calgon, Vanish, Spray n Wash, WooliteSurface Care: Cillit Bang, Lysol, Dettol, HarpicDishwashing: FinishHome Care: Airwick, MorteinHealth Care: Strepsils, Mucinex, Nurofen, GavisconPersonal Care: Veet, Dettol, ClearasilFood: French's MustardPharmaceutical: Suboxone

Bargaining Power of SuppliersThis threat is fairly low, RB has a wide range of suppliers, both in terms of the materials and geographically. This is due to the wide range of products which RB sells.Bargaining Power of BuyersThis is a medium threat, no one buyer counts for more than 10% of RB's sales and the top 10 buyers only account for between 0.25 and 0.33 of sales. However, the buyers are increasingly big stores such as the supermarkets for whom individual products are not of great importance to. These stores are also often competitors creating their 'own branded' products.

Threat of New Competitors

This threat is fairly low. With RB operating in so many markets there are opportunities for development. With new developments can come new products and new competitors. RB and its competitors enjoy economies of scale and the benefit of experience in developing products, marketing and distribution. Threat of SubstitutesThis is a medium threat. With the wide range of products and markets there is always a threat of new products to enter which substitute the existing products. The major retailers 'own branded' products are the main substitute to the famous branded lines.

Intensity of Competitive RivalryThis is high. RB's main competitors are Unilever, Proctor and Gamble and Colgate Palmolive they all offer a wide range of products some of which compete directly against RB's products. The products offered by RB are often directly competing with similar products that they share the same shelf with. There is some differentiation is the market, usually brought about by the marketing campaigns which play a major role in building the brands. RB has trademarks on its products and in some cases patents. With the competitive rivalry there has been a high level of acquisition and merger activity which is likely to continue in the future.

PEST Analysis

Reckitt Benckiser (RB.)

Political FactorsGlobalization has brought growth opportunities to RB, the company has operating companies in 60 countries and sales in 180 countries. Despite this 70% of revenue is in Europe, North America, Australia and New Zealand. There are significant opportunities to grown in the developing countries

Economic FactorsThe economic downturn has not had a major impact on sales in the developed markets, demand in the developing markets is not as stable.

Social FactorsThere has been a social movement towards environmental awareness, RB has committed to reduce carbon impact of its products by 20% by 2020. It is in the to 10% of companies in the Dow Jones Sustainability Index (DJSI). RB was involved in some controversy over the selling of Gaviscon and was fined for anti competitive behaviour.

Technological FactorsDevelopment is crucial to RB, many of the brands drive sales by innovating, RB prides itself on its entrepreneurial culture with a desire to improve products. Patents are key to pharmaceuticals and Suboxone is likely to see a decline in sales due to the expiry of its patent.

Financial Analysis

ProfitabilityThere has been a strong growth in revenue over the previous five years, this is due to both organic growth and acquisitions which have boosted revenues. These revenues have produced strong growing profits last five year with the profit margin growing over the period. The profit margin is strong with profit before tax representing 24% of revenue

Gearing RB has almost no debt, this reflects the company's ability to generate cash. The company in a strong position to make further acquisitions, or share repurchases in the future to boost EPS. The company will make further acquisitions if the opportunities arise.

LiquidityBeing able to produce strong cash flows makes the company liquid. The current ratio and the quick ratio are low, it appears that the company enjoys favourable terms of trade with its suppliers with long periods of credit.

EfficiencyThe company has a low ration of fixed assets to revenue, meaning that the company is not reliant on fixed assets to drive growth, this is also reflected in low depreciation charges. The biggest fixed asset on the company's balance sheet is goodwill - a reflection of the acquisitions that the company has made.

Competitive Advantage?The company has a clear advantage in its major brands which consumers are familiar with and trust. There is room for growth through development and through geographic expansion. RB's brands rely on investment in marketing and development and some products will have limited lifespans. However, the company is producing strong cash flows and it is likely to continue to develop or acquire new products in the future. It is therefore likely that the company will continue to see strong growth in the future.

Market analysis

We found the following results after our analysis-•Among the adolescent users, we find that the percentage of lozenges’ users is more as compared to other age group caterories. This can be attributed to their easy access to market and kind of easy, convenient and readymade remedy that lozenges offer for their health problem.•Further to this, it’s their propensity to use the lozenges as a mouth freshner after smoking that leads this age group’s inclination towards the usage of lozenges.

•As depicted by the data, consumers are greatly concerned about the availability of the product. More readily a product is available, more the consumers become accustomed to the product and hence more they become inclined towards it when it comes to a purchasing decision. In the case presented, we can very easily differentiate between Vicks and Strepsils in terms of availability. Vicks is available at every ciggarette shop, grocery shops, pharmacy stores, general stores. On the contrary, it’s very hard to find Strepsils at any other place than pharmacy stores. This makes Vicks an easy option for the consumers and hence it supercedes Strepsils in terms of sales.

•As shown in the survey results, a major percentage of people base their decision to choose a product on the fact whether they can associate themselves with other established product with the same brand name. Vicks capitalised on this as they had other products with the same brand name “Vicks” such as Vicks Vaporub whereas strepsils did not have any such edge to cash on.

•Taste/flavour also plays a role in developing a penchant of a product in consumer’s mind. This majorly depends upon the availability of the product when taste of two products is similar. Secondly, Vicks came up with many falvours such as ginger, orange, mint etc. thus exceeding Strepsils, which was in the market with same taste and flavor for years.

•Different age groups surveyed gave a noticeable weightage to price of the product also. Strepsils, in comparison to Vicks, is costly and hence score low when it comes to consumers’ choice.

Product Strategy Levels of product “Strepsils”

Core Benefit: Relief from early sore irritation.Actual product: Strepsils throat lozenges.Augmented product: Easy to carry, don’t have sedatives, Attractive colors and design, Different sized packs, Easily available.

Classification of StrepsilsStrepsils comes under the category of convenience product as it is frequently

purchased, have little planning, little comparison or low shopping effort and has low consumer involvement. Its price is low. But it is not widely distributed as it is supposed to be a pharmaceutical product and available only at pharmacies and we are going to change the mind set of people that it is not only restricted to a pharmaceutical product but can be taken for pleasure and joy as well.

Product DecisionsStrepsils make product decisions at two levels: •Individual Product Decisions•Product Line Decisions

Individual Product Decisions

1. Quality:The greatest achievement of Strepsils is that it has continued to grow within an ever changing market

environment and despite the fact that basic Strapsils formula has not changed in its fifty year history. Market research has shown that for consumers Strepsils is the most preferred medicated throat lozenge. It is good in both quality and consistency.

2. Features:i. It is a throat lozenge used when throat is initially started to sore.ii. Strepsils lozenges are available in different mouth watery flavors, Flavors available in Pakistan are

ice mint, original and lemon and honey. And we are going to introduce a new taste of “Eilaichi”.Advantages:i. It doesn’t contain sedatives, which causes sedation. ii. It is candy like which doesn’t need to take with water.Benefits:i. Strepsils is the only medicated throat lozenge and possesses a drug license which shows its throat

care reliability and has an edge over its competitors like Vicks which doesn’t contain a license.3. Style & Design:It is round shaped. And its size is moderate.

4. Branding:

has always been seen as a brand that’s efficacious, soothing, caring, pleasant tasting and consistent. A heritage of almost 50 years has seen it emerge as a brand that people trust and rely upon. While it’s often seen as a traditional brand, a new sense of contemporary appeal will now be initiated to rejuvenate an association with the younger generation as well, as it will now say “Mazay Mazay mein Gala saaf”. It's not just the feel good factor that is Strepsils' goal; the brand wants users to actually feel it working. Strepsils has maintained a consistent positioning of a specialist throat care remedy.

Over the years, packaging for Strepsils has been modified to meet the demands of an evolving market and to maintain a healthy price position. Present primary packing of Strepsils is a strip of 10 lozenges and secondary packing of 15* 10’s lozenges. New packing which will now going to be introduced will be of a single lozenge and packet of 30 lozengez so as to make it easy for customers to carry, and in this way they will not be bounded to purchase the

5. Packaging:

whole strip of 10 lozenges, rather they can make purchases of their choice. The present packing will be continued to be available.

6. Labeling:

Strepsils has a very catchy logo look which identifies the product and promotes the product because of its attractive graphics. Its label is not going to be changed in re launching process as it is already pegged in the minds of people.

Product Line DecisionsBeyond decisions about individual product, product strategy also calls for building a product line. The

major product line decision involves product line length- the number of items in the product line. Current product line length of Strepsils is 5. In re branding process, its line is decided to be maintained to 5 but by pruning an unnecessary and un profitable flavor “Original” and by introducing new fresh flavor ”Eilaichi”. “Original” flavor is decided not to be further produced as it is not very demanding in public because of its unpleasant taste which not at all creates enjoyment and “Maza”, which is now the main slogan of Strepsils in re branding process., Strepsils is now looking towards product line filling approach- with new and fresh addition of “Eilaichi” flavor.

Product Life CycleThe brand Strepsils and its products are in its maturity stage as

it has largely achieved acceptance by most potential buyers. But the new flavor “Eilaichi” would be at introduction level as the product is going to be introduced in the market.

Pricing Strategy

It is the amount of money charged for the product that consumers exchange for the benefits of having or using the product. Strepsils is using fixed price policy i.e. setting one price for all buyers.

Strepsils price is Rs1/ lozenge. The price of Strepsils is kept same to Rs1 little higher than its competitors but it justifies its high price, as it gives the best quality. Strepsils is not competing in terms of price, but it is competing about keeping customers loyal by providing the value they can’t find anywhere else.

Nature of Market and DemandStrepsils is working under monopolistic competition, in which the market consists of many buyers and sellers who

trade over a range of prices rather than a single market price. Under this competition, buyers see different products like Vicks, Hoest Drops, Soothers which charge different prices. All these charge Rs0.5/candy. But even then, buyers prefer to use Strepsils because of its effectiveness, good mouth watery flavors, and consistant quality.

Consumer Perception about Price and ValueIn value terms, market share of Strepsils is 37% which clearly tells about its quality and value. Strepsils is a market

leader. When buyers buy Strepsils, they exchange something of value (price) to get something of value (the benefits of having Strepsils, i.e. “Mazay Mazay mein Gala Saaf”).

Distribution Strategy

A company’s distribution decision directly or indirectly effects every marketing decision. Some companies pay too little attention to their distribution channels, but others use imaginative distribution system to gain competitive advantage.

Customer convenience and availability:We are focusing on the customer convenience and availability of Strepsils on every departmental store,

super store and convenient store. So that our product will not be available only on medical stores but also on general stores.

Selection of channel:. We use indirect marketing channel for our product. Such marketing channel includes two levels wholesaler

(Aventice, main distributor in Lahore) and retailers (medical stores and convenience stores).

Racket Benckiser

(wholesaler)

Specialty and convenience (retailers)

Consumers

Reckitt Benckiser has its own genareral store distributors which take products like Dettol, Cherry Blossom, Disprin, Mortein, Harpic, Veet from the industry to the retail stores. So, in order to extend our distribution channels, besides transporting products to Aventice, which takes products to medical stores, Reckiit Benckiser’s own distributors also take Strepsils to transport to convenience stores.

Types of intermediaries:When company defines its marketing channel, it should next identify alternative channel in terms of types of

intermediaries. Alternative channel used for strepsils is industrial distributors who will carry the product in different regions or industries.

Number of marketing intermediaries: Our distribution strategy is intensive distribution (stocking the product in as many outlets as possible) instead of

selective distribution (the use of more than one but fewer than all of the intermediaries who are willing to carry) the company’s product.

Promotion Strategy

Modern marketing calls for more than developing a good product, pricing it attractively and making it available to target customers. It is also necessary that companies must also communicate with current and prospective customers. Communication is all about promotion of a product or a company. So while re lunching Strepsils, one of the most important steps towards its success will be its effective promotion.

Awareness and Image:Most of the people in india are well aware of the name of Strepsils because it is a market leader in its pharmaceutical

category. People here also have knowledge of it and this is due to it’s often usage. So by analyzing the current market situation, it can be stated that buyers of Strepsils are at 2nd stage which is knowledge stage of “Buyer readiness stage” and our work is to move them to next stage of liking and this will be done by changing people perception.

Buyer Readiness Stages:

Awarenes s knowledge liking preference conviction purchase

The new slogan of Strepsils is a clear picture of our communicative message and that slogan besides conveying a communicative message will fulfill the requirements of “AIDA” model by getting attention, holding interest, arousing desire and obtaining action. This is because, the joy element of the message will get attention and arouse desire and the throat care element will create interest of buyers.

Developing Effective Communication:

It placed its advertisement in which a lion tries to roar but due to sore throat it could mutter only “Meow” and then it pops – up a Strepsils and it starts roaring again. People connected with the advt. instantaneously. It was an effort to make Strepsils at par with Vicks.

Pull StrategyAs all of our doings are to attract buyers, so that their liking will increase towards Strepsils and they will ask for

Strepsils. We actually want to increase the demand of Strepsils .That’s why our strategy can be called as pull strategy.

Integrated Marketing Communications (IMC)Promotion is actually not a single tool but rather a mix of several tools, ideally under the concept of

IMC. The company will carefully coordinate these promotion elements to deliver a clear, consistent, and compelling message about the organizations and its product. The concept of IMC suggests that the company must blend the promotion tools carefully into a coordinated promotion mix. That’s why while selecting our marketing communication mix we will go for only those promotion tools which can be blended in effective and efficient way. The promotion mix tools which we have decided for re launching Strepsils consist of:

AdvertisingOn one hand, advertising can be used to blend up a long term image, and on other hand, it can generate

quick sales. The main decisions in advertising are about;

As our main objective is to change image of the product to correct false impression, we will go for information and persuasive advertising. Coming towards message decisions which includes message strategy, message execution and media decisions, our purpose of advertising is to get consumers to think about or react to the product in a way we want to position it and that is “Mazay Mazay mein Gala Saaf”.

Sales Promotion &Public Relations Sales promotion and public relations are other tools on which our promotion is based, so their

importance can’t be neglected. The consumer promotion tools which we decided for re launching Strepsils promotion are samples and point of purchase. By distributing free samples of Strepsils in schools, colleges and universities, we can introduce strepsils as candies and once from this short incentive, our image would be clear, they will definitely ask strepsils for retailers. To let others know that, now strepsils is available at every general store, it is necessary to display our products by some means at point of purchase. This can be done by placing our dispensers or by placing boards. We will also go for stalls in different Melas and festivals. So these steps will change pharmaceutical image. To develop good relations with public and to remain in news with good name, we will sponsor some singing competitions which would be on national basis, because in these days they are dominating channels. Being a part of community, we never forget our social responsibility that’s why; we have planned for our medical camps related with throat care particularly in changing seasons.

Action ProgramsStrepsils will increase its production and promotion when there will be a rainy season i.e. in June/July and also in weather changing months, which are April/May and September/October, as in these months, most viral diseases spread, most common of which is sore throat.

Close Competitors:Close competitors of Strepsils are those which are used as a throat reliving and anti-sorethroat candies or tablets

because they are satisfying the same need as Strepsils do. e.g. Vicks ,halls, Hoest Drops, Soothers. Distant Competitors:Distant competitors of Strepsils are those brands which are used only as refresher because Sterpsils can be among one

of them. e.g. Softmint, Coolmint, mint, Polo, Mentos.

Strepsils as a Price leader:

SWOT Analysis

Strength

1. Strepsils is the medicated throat lozenge which dominates both

pharmacy and grocery.

2. A clear leader in the pharmacy throat lozenge market.

3. Highly marketed brand sold in around 110 countries.

4. The formula for strepsils has never changed since its inception

giving it a strong hold.

5. Various flavors available

6. Good advertising and availability across the world

Weakness

1. Rural presence is negligible

2. Presence of other popular brands means brand switching is high

Opportunity

1. To explore untapped rural market

2. To make it a tasty brand to be taken without any ailment also

3. Tie-ups with schools, hospitals, corporate etc

Threats

1. Substitutes such as Ayurvedic medicines.

2. Other cough syrups, balms, etc