Product : Thums Up is a brand of cola in India. The logo is a red thumbs up. It was introduced in 1977 to offset the expulsion of The Coca-Cola Company from India. The brand was bought out by Coca-Cola who re-launched it in order to compete against Pepsi. As of February 2012, Thums Up is the leader in the cola segment in India, commanding approximately 42% market share and an overall 15% market share in the Indian aerated waters market. History of Thums up :
Born: 1977
Launched in India by Parle Agro Pvt. Ltd. Now owned by Coca-Cola. Thums Up was launched by Parle Agro Pvt. Ltd to fill the void left by the government ban on American soft drinks giant Coca-Cola in the 1970s. The thumbs-up logo was adopted early on, but the brand was positioned differ . The picture of the hill shows the Manmad Hills, popularly known as the “Thums Up Mountain” or the “Thums Up Pahaar” (in Hindi), because it has a natural top like the “Thums Up” logo and is a popular sight from trains. Thums Up enjoyed a near monopoly with a much stronger market share often overshadowing its other rivals like Campa cola, Double Seven and Dukes, but there were many small regional players who had their own market.
It even withstood liquor giant United Breweries Group (It was one of the major advertisers throughout the 1980s. In the mid-80’s it had a brief threat from a newcomer Double Cola which suddenly disappeared within a few years. makers of Kingfisher Beer) McDowell’s Crush, which was another Cola drink, and Double Cola. In 1990, when the Indian government opened the market to multinationals, Pepsi was the first to come in. Thums Up went up against the international giant for an intense onslaught with neither side giving any quarter. In 1993 Coca-Cola re-entered India after a prolonged absence from 1977 to 1993, spurring a three-way Cola War between Thums Up and Pepsi. That same year, Parle sold out to Coke for US$60 million. Some assumed Parle had lost the appetite for a fight against the two largest cola brands; others surmised that the international brands seemingly endless cash reserves overwhelmed Parle. Thums Up had a 85% market share when sold. Brand positioning :
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Brand Positioning :
Initially positioned as a refreshing drink
The brand was re-positioned as a “manly” drink, drawing on its strong taste qualities. Thums-Up kick-started an aggressive campaign directly attacking Pepsi’s TV ads, focusing on the strength of the drink hoping that the depiction of an “adult” drink would appeal to young consumers. “Grow up to Thums-Up” was a successful campaign. The brand’s market share and equity soared. The advertisements struck the minds of many Indians and caught the imagination of youngsters who want to be seen as men. The latest ‘Thums-Up communication for 2010 takes the whole idea of “I Will Do Anything For My Thunder” attitude of the Indian male to the next level by adding a layer of fun and playfulness to it. The Thums-Up drinker indulges in adrenalin pumping action to get a bottle of his favourite soft drink Thums Up because he loves to do it and not because he has to. The latest advertisements reflect this with Akshay Kumar performing stunts on bikes and cars to get a bottle of his favorite Soft Drink – Thums Up.
Customer segmentation:
Between 2010-2030, India will add 241 Million people in working age population (children currently in education system) As of today, 72 % of India’s population is below the age of 40, 47% of Indians is under the age of 20 & 10% of the world population is an Indian under 25. This predominance of youth in the population is expected to last until 2050. Market share:
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In the carbonated drinks category Coca-cola occupies about 58% market share in India. Pepsi comes second with 36%
Thums-up is the highest selling brand among carbonated beverages in India with a market share of about 15% of the total CSD market. Bcg matrix : What Is BCG Matrix?
BOSTON CONSULTING GROUP (BCG) MATRIX is developed by “BRUCE HENDERSON “of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s. According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.
STARS:
High growth, High market share
Stars are leaders in business.
They also require heavy investment, to maintain its large market share. It leads to large amount of cash consumption and cash generation. Attempts should be made to hold the market share otherwise the star will become a CASH COW. CASH COWS:
Low growth , High market share
They are foundation of the company and often the stars of yesterday. They generate more cash than required.
They extract the profits by investing as little cash as possible They are located in an industry that is mature, not growing or declining. QUESTION MARKS
High growth , Low market share
Most businesses start of as question marks.
They will absorb great amounts of cash if the market share remains unchanged, (low).
Why question marks?
Question marks have potential to become star and eventually cash cow but can also become a dog. Investments should be high for question marks.
DOGS
Low growth, Low market share
Dogs are the cash traps.
Dogs do not have potential to bring in much cash.
Number of dogs in the company should be minimized.
Business is situated at a declining stage.
Bcg matrix for Thums up :
From its market structure we can easily predict that Thumps belong to cash cow section in Bcg matrix(BOSTON CONSULTING GROUP) .BECAUSE Thums up market share is 58% as compared to Pepsi ‘s share is 36 % in carbonated drink. Pepsi has market share 36% so Pepsi also belong to the same group as Thums up. product life cycle:
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What is product life cycle ?
A product’s life cycle is the stages of development and sales figures a product goes through over its time on the market. For anyone thinking of developing a new product for the general market this is an extremely important factor to consider when determining whether the product is worth putting on the market at all and also in determining the work involved at different stages in the products life. 1. Market introduction stage:
1. costs are very high
2. slow sales volumes to start
3. little or no competition
4. demand has to be created
5. customers have to be prompted to try the product
6. makes no money at this stage
2 . Growth stage:
1. costs reduced due to economies of scale
2. sales volume increases significantly
3. profitability begins to rise
4. public awareness increases
5. competition begins to increase with a few new players in establishing market 6. increased competition leads to price decreases
3. Maturity stage:
1. costs are lowered as a result of production volumes increasing and experience curve effects
2. sales volume peaks and market saturation is reached
3. increase in competitors entering the market
4. prices tend to drop due to the proliferation of competing products
5. brand differentiation and feature diversification is emphasized to maintain or increase market share
6. Industrial profits go down
4. Saturation and decline stage:
1. costs become counter-optimal
2. sales volume decline
3. prices, profitability diminish
Product| Life cycle | Market share | Remarks |
Thums up| Maturity | 58%| Sales increases and market saturation reach. Profit margin increases. Low per unit cost in manufacturing .| Pepsi| Maturity | 36%| It is also a market leader in cola segment .It’s per unit manufacturing cost decreases due to volume of sales.| 4. profit becomes more a challenge of production/distribution efficiency than increased sales.
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