Parle relaunched its Rol-a-Cola brand based on requests from customers who wanted to see the candy back on the shelves. This demand could not have come at a better time for Parle, which was facing a drop in sales of its best-selling biscuit brand Parle-G. The company, predictably, leveraged the opportunity and relaunched Rol-a-Cola in the shortest possible time, and has done appreciably well in rolling the product out to different markets across the country.
Parle faces challenges on several fronts, primarily in pricing, promotion and distribution. It has to get the marketing mix right to reach a billion rupees in sales from Rol-a-Cola. This is easier said than done as the market is highly competitive. Brands such as Mondelez, Perfetti and Mars have made deep inroads in the Indian market and are unlikely to give any room for the Parle brand. Relaunching a brand after 13 years is no easy task, and here are some of the challenges Parle must face in its quest to achieve its targeted revenue from Rol-a-Cola.
1. Customer choice complexity
2. Customer price sensitivity
3. Communicating the differences (point of difference)
4. Channel members cooperation
The company can adopt the following strategies to overcome the above challenges
Overcoming choice complexity
Parle has 13 brands in its confectionery portfolio. Poppins is one its more popular hard-boiled candies that is sold across the country. Hard-boiled candy is an impulse-buy product and customer loyalty is suspect. Availability in most retail stores is a necessary precondition for success.
Parle must focus on attractive packaging and reserve store displays in important towns and rural markets. In urban markets it may have to depend on large independent retailers and modern trade for product displays using attractive dispensers and take dedicated shelf space for rent. Such dedicated displays will help narrow the customer decision choices.
Overcoming price sensitivity
In its new avatar, Rol-a-Cola is priced at ₹5 and ₹20 respectively. The company can plan an ₹10 pack. In having three price points the company is catering to rural as well as urban audience.
Communicating the differences
Parle must have a clear communication strategy for Rol-a-Cola. For store fronts it can rely on colourful danglers and bright red-coloured bottles for stocking and display. Its distribution autos and vans must be painted red, at least for a six-month period, by which time the product’s imprint would get registered in the mind of the target audiences. Retailer name boards can be changed with the Rol-a-Cola name in areas that are thickly populated, especially high traffic junctions where it is difficult to escape attention.
Rol-a-cola can use social media by leveraging on its nostalgic value. Mobile communication has become ubiquitous as is the use of social media. Parle can use its loyal customer base to further spread the message. It can create dedicated brand communities on Facebook and Twitter.
It can identify some schools and colleges to conduct events on the lines of Coke Studio to spread the message to millennials with gift hampers being given as sponsorships. In rural markets the best option would be to use its strong retailer network to spread the message of the relaunched product.
Channel member cooperation
Parle has a long history and legacy of 90 years in India. Its products have reached most markets in India, thanks to Parle G biscuits. The company must solicit the cooperation of its existing channel members and seek their support to market the cola candy. In the backdrop of a drop in market share for biscuits, Parle retailers will be glad to have extra support from the company and a new product to push. The support can be in terms of trade promotions, bulk discounts, product display rent and credit terms, especially wherever volumes are guaranteed.
Responses to the questions at the end of the case.
1. What promotional strategy should Parle adopt for Rol-a-Cola to appeal to the rural markets?
Besides piggybacking on its extensive distribution network to promote Rol-a-Cola, the company can consider the following options for spreading the message to rural markets.
i. Paint local autos and distributor vans with the Rol-a-Cola name prominently displayed in local languages. Let the vans painted thus travel in rural markets for at least six months. Pay a nominal rent to distributors. With the number of trips that the passenger autos and delivery mini-vans make in the hinterland it’s impossible not to notice the attractive colours. While moving around in the smaller markets, the vans can also play the advertising jingles using a mike system.
ii. Distribute attractive T-shirts to frontline sales staff of the distributors for a period of two to three months. Let the logo and brand name be prominently printed on the T-shirts.
iii. Create an attractive incentive structure for the retailer to stock the product disproportionate to other brands in the retail outlet. This will indicate the thrust the retailer gives to the product.
iv. Have small dispensers in retail outlets within arm’s reach of customers. This will enable customers to pick up the product impulsively.
v. Formulate an attractive incentive structure and extend a credit line for Rol-a-Cola to bigger retailers and wholesalers. This will motivate them to focus their attention on the product.
vi. Tie up with hotels and distribute the ₹2 packs to customers in place of loose change as well as a substitute for candy after a meal.
2. Parle has traditionally used a low-pricing strategy. Should it employ a different marketing strategy for Rol-a-Cola in urban and rural markets?
No, Parle should continue using the same strategy for both markets. With television and internet usage being widespread it will be sensible for the company to continue the same pricing strategy. Historically too, products such as hard boiled candy have had similar price points, independent of the market. Customers, wherever they reside, buy these products for what they are. Pricing differences create unnecessary negative perceptions of product quality.
An additional way of nudging the rural customer to try the product is to have ₹2 sachets instead of ₹5. Parle can have two price points in rural markets (₹2 and ₹5) whereas for urban markets the price points can be ₹2 (to persuade people to buy), ₹10 and ₹20.
3. What strategy must Parle adopt to ensure long-term sales of Rol-a-Cola?
Given the past success of Parle in managing successful brands, we are assuming that the company has a robust product and brand management process that tracks the health of each of its brands. Rol-a-Cola was withdrawn in an exercise aimed at rationalising the brand portfolio. The company has realised that removing Rol-a-Cola in 2006 may have been a mistake. Once the renewed avatar stabilises, in terms of revenues, the company can expand the Rol-a-Cola portfolio by introducing new offerings such as soft toffee (like Kismi). The company can expand its focus on international markets and modify its strategy to suit those markets. The name Rol-a-Cola is generic, does not indicate any country of origin and, hence, faces minimum risk.
On reaching significant volumes, the company could consider having a larger presence in online and social media, outdoor media, buses, metro trains, autos and other strategic display points in urban and rural markets. This activity will help sustain the brand momentum.
(The writer is a Professor in the Marketing Area, ICFAI Business School, Hyderabad.)