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April 11, 2011

New Products that did not do well in India Part II

Times of India is a news paper that is a television channel in print, Deccan Chronicle is the king of local flavor and the Hindu stands for the traditional old style. In this very clearly segmented and positioned south Indian english news paper market a newspaper that promoted all things for all  people stood no chance. Eventually Ramoji Rao pulled the plug and gave Newstime a decent burial that its deserved.

Soma: a soft drink venture from Ramoji Rao the media baron. This was a foray that was doomed from the start. Soft drinks need focused distribution strategy and a marketing plan. Even though Soma had a great taste but it was not marketed well and finally it was withdrawn from the market.

Sunfill: A product from the Coca-Cola Company. Coca-Cola is the market leader in the soft drink market. It very proudly says that there are places in the world where water is not available but there is no place in the world where coke is not available. Sunfill was a very unique product from Coca-Cola Company.

Sunfill was a powder that was marketed at Rs 2/- per packet in India. The consumer simply has to empty the powder into a bowl, add sugar and water, mix and presto a soft drink was ready for consumption. Sunfill, Coca-Cola thought would be a right competitor for Rasna the market leader in the soft drink concentrate market.

The reality bites were very different. Rasna was very aggressive as it was only in the concentrate business. But Cola-cola was caught between two worlds. On one side if it would concentrate on the soft drink market it could not focus on the Sunfill or the powder business. Second the margins on Sunfill were very limited and the salesmen did not give it a correct push as sales people for soft drinks and sunfill were the same. And the sales people pushed the sale of bottled soft drinks as it gave then more incentives.

The sale of Sunfill also meant that the sale of RBC (returnable bottled cola) went down. All the sales people of Coca-Cola were born and brought up on glass bottled cola business and they resented the concept of powdered soft drink. They were not given proper training on product differentiation and selling a bouquet of products.

Subsequently Sunfill was withdrawn from the market. But interestingly powdered soft drink is available in Ethiopia and Coca-Cola also market Tropicana in the powder form. But Sunfill is a prime example of a good product that was not marketed well internally in the company. It also needed a separate distribution network and a different marketing strategy. As it was not given a separate treatment it died a premature death in India.

What can be the take ways from the above examples? Companies should not enter into a business because they promise good market share and profits. They would have to think as how the new products would affect their existing businesses. Would the new products offer any synergies or would it affect their core businesses? Also it is worth to spend time on training and orienting the employees about the new products. The companies should always remember its core competencies and try to maximize the same.

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