Mevicol’s Gambit – Outsmarting the Competition
Chandan Ghosh (Chandan), the Zonal Sales Manager – East of Mevicol Adhesives, was seemingly worried. After a day-long visit to key plywood mandis and large dealers of Odisha, he sat in a somber mood in his hotel room at Bhubaneswar. He was accompanied by Area Sales Manager (ASM) Soumik Mondal (Soumik) and Market Development Manager of East Zone Rohit Jha (Rohit). The growth of the company in Odisha has been tepid in the past 6 months. Odisha market, a major contributor to the zone’s growth (during 2016 and 2017), has been witnessing serious competition from Maacol & Elite Bond and they have been employing below the belt tactics to lure the users such as wood-working carpenters/contractors and resellers i.e. the major plywood retailers. Mevicol Adhesives was a leading manufacturer of white glue used for wood working with a legacy of superior products and performance (Exhibit I). Despite being in a low-involvement product category like adhesives, Mevicol had a strong brand recall amongst consumers and influencers alike.
The eerie silence in the room was broken by the entry of Market Development Executive, Gokul Mohanty (Gokul). Gokul had been summoned by Rohit to update on competitor activity that was intensified in the last one month. After hearing what Gokul had to say, Chandan had a worried look on his face. Both Elite Bond and Maacol had one objective and that was to seize the market-share from Mevicol and hence resorted to fair as well as unfair means to attract the trade.................
Market Dynamics in Odisha
Mevicol’s market share in Ohisha stood at 82% as per internal competitor benchmarking study with major competitors being Elite Bond (7%) & Maacol (8%) (Exhibit III). In the recent past, Mevicol Speedo has established as the numero uno PWG Brand across key benchmarking counters with over hundred loyal dealers who have an average consumption of 100 kg or more per month. Mevicol Speedo had a mind-boggling growth rate of 400% in 2017 over 2016. Mevicol SH is the oldest and the second biggest brand in the market followed by Elite Bond. Another Mevicol brand, Marino, was also doing well in the competitive premium glue segment with a 53% growth in 2017 over 2016. In addition, Mevicol also had two flanker brands W-Grip Regular with an average sale of around 20 tonnes and W-Grip 3 in 1 which was a new launch. The primary objective of Mevicol’s flanker brands were to counter competition brands and be a trial brand for price-sensitive buyers (primarily institutional buyers) who would otherwise have opted for cheaper and inferior alternatives from competition...........
Understanding the Issues and Challenges
Chandan realized that the quantum of competition had increased in the several A-Class and Super A-Class Counters and together they had eleven Large Competition Dealers (LCDs). Soumik outlined Maacol and Elite Bond’s high-outgo based schemes/gifts and payment exceptions as a major reason for their growth. A few dealers had de-grown in volume of their business due to emergence of new counters in their vicinity, financial mismanagement or funds diversion to other businesses and overdue payments/debts in the market. After analyzing the current business dynamics, the team had dinner together and called it a day...........
The Blue-Print
Soumik diligently worked hard on preparing a robust strategic roadmap for counter-attack against the competition. In this exercise, he sought assistance (especially market intelligence inputs) of all his teammembers. Rohit stayed back at Bhubaneswar to assist Soumik in this endeavor. The broad contours of the strategic blue-print are outlined in Exhibit VII......
Assignment Questions
I. Critically evaluate the strategic blue-print prepared by ASM Soumik Mandal. What are the gaps or concern areas in the blue-print that necessitate evaluation?
II...........
Exhibits
Exhibit I: Mevicol’s Brands and Their Performance in Odisha
Exhibit II(a): Premium White Glue (PWG) Plan – 2018 (in Kgs)
Exhibit II(b): Nature of the Adhesive Market
Exhibit III: Market Share of various players in Odisha
Exhibit IV(a): Below The Line (BTL) Brand Promotion Initiatives in 2017
Exhibit IV(b): Other Ongoing BTL Brand Promotion Initiatives
Exhibit V: Market’s Categorization of Dealers
Exhibit VI: Mevicol’s Classification of Dealers and Sales of Competition Adhesives
Exhibit VII: Strategic Roadmap for Competition Counter-Action (Odisha Market)