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Analyzing Consumer Behavior of Detergent Purchases: Local vs National Brands

CASELET, BUSINESS ANALYTICS
ET Cases, 5 Pages
AUTHOR(S) : R. Muthukumar and Dr. Nagendra V. Chowdary

Case Preview

Analyzing Consumer Behavior of Detergent Purchases: Local vs National Brands

 

Sambasiva Rao (Rao) was General Manager at Supreme Retail. In May 2017, Supreme Retail launched a house brand called 123* in the laundry detergents category and positioned as a cost-effective detergent, giving comparable wash results like other established brands in the market. Rao took direct responsibility of Supreme Retail’s food and grocery house brands. Along with other store brands at Supreme Retail, it was looked upon as a value proposition for shopping at Supreme Retail and also as an alternative to costly brands. During blind pre-launch testing, customers ranked 123* higher than national brands in many product features. However, the questions that Rao had in his mind were: would the customers who had been habitually purchasing a certain brand for many years switch to a local brand or a house brand? Is there a need to generate a demand by creating a strong incentive for consumers to buy the house brand? How to place orders effectively for its house brand 123*?..............

Supreme Retail

Supreme Retail (P) Ltd. (Supreme), Chennai-based retail store founded in 2012, was a subsidiary of a major real estate company Varun Group. The first store was located in a prime location, where many educational institutions (colleges and schools), shopping complexes, independent shops, retail chains, restaurants, etc., were located. Initially, Supreme’s product range included staples, fresh vegetables & fruits, milk, FMCG, frozen foods, small appliances and gift articles.............

Laundry Detergent Market in India

In 2016, the Indian detergent market was estimated to be around INR 20,000 crores, with more than 1,000 brands available in the market. However, the per capita consumption of laundry detergent in India was only around 2.7 kg per year as compared to other countries. For instance, in the US, it was around 10 kg. The overall market for detergent was growing with a CAGR of 13.06% from 2010. Three forms of detergents were available: powder detergent, bar detergent and liquid detergent..............

Dilemma

In such fiercely competitive market, Supreme Retail decided to come out with its house brand, like other major retailers, after carefully observing the market trend and growth opportunity. In early 2017, Supreme Retail developed a detergent powder 123* which looked similar to Surf Excel and with the help of an individual marketing research consultant, the product was market tested. The blind test was conducted on a sample size of 50 customers, where the customers were given pre-mixed solutions of all brands, without revealing their brand names...........

Assignment Questions

I. What are the Price Promotions? What would be the general effects of Price promotions? Why did Rao choose price promotion for 123* detergent brand?
II. .............

Exhibits

Exhibit I: Home Store’s Product Portfolio

Teaching Note Preview

Analyzing Consumer Behavior of Detergent Purchases: Local vs National Brands

 

Synopsis

Sambasiva Rao (Rao), General Manager at Supreme Retail Pvt. Ltd.(Supreme), a retail chain from Varun Group (real estate conglomerate), was pondering on launch of its household private label detergent product 123*. As he planned to launch 123* brand in all its stores, he wanted arrive at an effective demand estimation. Besides, Rao wanted to know if there is a need to generate a demand by creating a strong incentive for consumers to buy the house brand. Discriminant Analysis could help in answering to these queries.

Case Positioning and Setting

This caselet can be used in MBA Program/MDPs/EDPs in Advanced Statistics, Analytics and Marketing Research Courses for teaching Discriminant Analysis.

Prerequisite Conceptual Understanding

The students/participants should be encouraged to read the following as it would provide appropriate perspectives on Discriminant Analysis and help gain insights:

• Naresh K. Malhotra and Satyabhushan Dash, “Discriminant Analysis”, Marketing Research an Applied Orientation, 6th Edition, Pearson Education, 2010 – To understand Discriminant Analysis

Assignment Questions

I. What are the Price Promotions? What would be the general effects of Price promotions? Why did Rao choose price promotion for 123* detergent brand?
II...........

Preamble to this Case Study Analysis

This caselet was used to introduce the participants/students to the idea of Discriminant Analysis. This concept/technique was discussed and analyzed in the light of Supreme Retail’s proposed launch of its house brand product 123*. Accordingly, this caselet was orchestrated as follows [Exhibit (TN)-I]:..........

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Abstract

This caselet can be used in Analytics course to help participants in understanding the insights from discriminant analysis. In May 2017, Supreme Retail launched its house brand called 123* in the laundry detergents category as a cost-effective detergent, giving comparable wash results like other established brands in the market. However, Sambasiva Rao (Rao), the GM at Supreme Retail, had to identify answers to the following questions: Could customers who had been habitually purchasing a certain brand for many years switch to a house brand or a local brand? Is there a need to generate a demand by offering a strong incentive for consumers to buy the house brand? How to place orders effectively for its house brand 123*? Discriminant analysis could be used for this.



Pedagogical Objectives

  • To understand Indian detergent market
  • To understand the various promotions that could be used for 123*
  • To discuss and understand the general effects of price promotions
  • To discuss and identify whether there is an impact of Price Promotion on the Supreme Retail’s 123* sales
  • Case Positioning and Setting

    This caselet can be used in MBA Program/MDPs/EDPs in Advanced statistics, Analytics and Marketing Research Courses for teaching Discriminant Analysis



    This Case Pack Includes:
    - Abstract
    - Caselet
    - Supplement
    - Teaching Note (**ONLY for Academicians)

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