CASE STUDY ANALYSIS. Muscle-RDX in India. Suzanne Wootton N Tutor: Christine Moody Word Count: 1486

Transcription

1 CASE STUDY ANALYSIS Muscle-RDX in India Suzanne Wootton N Tutor: Christine Moody Word Count: 1486

2 2 TABLE OF CONTENTS 1.0 STATEMENT OF PROBLEM PROBLEM ANALYSIS EVALUATION OF ALTERNATE SOLUTIONS RECOMMENDED COURSE OF ACTION REFERENCES 9

3 3 1.0 STATEMENT OF PROBLEM Following proven success in the growing sports nutrition market, Indian healthcare company Strength Pharma (SP) pursued a new, strategic initiative. The initiative would consist of a key product, Muscle- RDX, focused on enhancing endurance over an extended duration. As India s first home-made whey protein for high-endurance athletes, SP aimed to boost their position in the 7.3 billion sports nutrition market in India. In addition to boosting their position, SP explicitly pursued brand awareness and knowledge, as well as avoidance of stagnation through brand attitude, ultimately achieving long-term stability. The company aimed to achieve these objectives by producing a clinically proven, Food Safety and Standard Authority of India (FSSAI) approved product. Despite the proof of success, SP still faces heightened challenges with trust. Market research discovered alarming facts, with 85% of male athletes expressing dissatisfaction with formulas of Indian origin, and majority expressing long term struggles with poor performance from current products. Once a flourishing market of counterfeit supplements, and no precedent for Indianmade endurance protein, the SP advertising team faces a substantial advertising challenge - gaining, and retaining, trust from the market to create long-term stability with ever-increasing demand.

4 4 2.0 PROBLEM ANALYSIS Factors Relevance Exponential growth The supplement industry had grown by 17% in As demand and growth within industry increases, so does competition, thus making continual penetration challenging. Consumers want for the latest products effect the longevity of others (Businessnews Publishing, 2014), making constant development and innovation from Muscle-RDX key. Long term distrust Initial research exposed long term struggles with current products, with current products particularly those of Indian origin. Fitness professionals also expressed their concern over the effectiveness of Indian-based products in comparison to key international competitors. Clinical trials prove Research groups indicated the importance of clinical trials in whey protein effectiveness of powders. Fortunately, Muscle-RDX executed these trials and proved RDX effectiveness in helping high-endurance athletes increase their stamina. Considering the importance of trust in ongoing purchase, as well as the influence professionals have, it is paramount that transparency with clinical studies and success-rates are conveyed. 4,800 5,400 price The price of 4,800-5,400 per 5-pound bag is standard in comparison to range competitor s (Dewani & Nigam, 2016). Whilst this may seem effective, it fails to implement a modern and innovative pricing strategy. A focus group participant exclaimed I am willing to pay a premium to get a solution. Studies show the psychological correlation between price and quality, and how premium pricing strategies can create an effective placebo effect (Kim & Jang, 2013). The standard price of this product has the potential to be both effective and ineffective for this product. Psychographic The household income of the five psychographic segments range from 1 segment evaluation million, to 1.5 & 2 million in the two wealthiest segments. It should be noted that the two segments with highest income, also have the longest-term goals for their endurance career. This is relevant to the future target market, pricing strategy, and planning for the longevity of Muscle DRX. App has been The inclusion of the app opens opportunities for ongoing support and proof developed in of success, with coaches believing it will assist in altering athletes behavior, assistance thereby increasing chances that they will maintain their training regimen. It is important to note, however, that lack of clinical trials for the apps effectiveness can be disadvantageous.

5 5 3.0 EVALUATION OF ALTERNATE SOLUTIONS Solution Advantages Reposition Muscle Protein whey powder has 96% share DRX powder to in value sales of protein protein bars and supplements, protein bars has other forms of remaining 4% protein supplements Potential for growth in underdeveloped market Limited competition Unique competitive advantage Ongoing innovation retaining market interest Shift target market to Segments: I do not want to suffer a older male heart attack, (A) and I want to psychographic present myself as an example to segments (instead of inspire others, (B) are: all endurance aged athletes, and in have the highest income addition to have long term aspirations in professionals) endurance training (most important) the latter segment wants peers to follow, meaning word-of-mouth advertising (earned) Advertise discounts Encouraging increased through the app for performance personal Encouraging ongoing purchase achievements and Positive reinforcement has been long-term use proven to be synonymous with improved performance Taps into Maslow s highest need, personal actualisation Builds brand affinity Emotional connection is a proven factor of product success Disadvantages Risk failure due to lack of popularity and product knowledge Research shows consumers are already skeptical and untrusting (this may be developing too far from the norm) Prime consumers are proven to be years old Potentially creates a smaller market, going against objective to gain brand awareness Potential to be deemed invasive and too personal Requires athletes to be actively using app (may forget occasionally, causing discouragement) Does not have a high reach

6 6 Reposition to luxury item and implement a luxury pricing strategy Professional athlete endorsement Continue to promote as-is Places product in a segment on its own, meaning lowered competition Builds brand aspiration Positively effects consumer s psychological belief of product value and quality Directly targets segments A and B Taps into Veblenian Social- Psychological Model, attracting both desiring prestige and utilitarian fulfilment Muscle DRX users predominantly partake in running and cycling, meaning a wide array of sports need not be covered Millennials place greatest trust in recommendations of peers/others Opportunity to advertise at upcoming events where endorsing athletes compete (wide exposure) Continued, repetitive advertising is easy for consumers to remember Builds a sturdy brand image Change can deteriorate trust Trials show promising results for future Muscle-RDX usage Substantial revenue in 2015 proves brand affinity Can cause consumer disgruntlement Risk consumers reverting to competitor s products Case study states quotes from coaches about happiness in an affordable product for their athletes Celebrity endorsement in India is heavily saturated Data shows influencer endorsement can largely have a negative effect due to questioning transparency (trust is already an issue) Expensive method of promotion Potential to bore the target market (become stale and stagnant) Easier to forget A large risk (rarely has effective payoff)

7 7 Reposition to a subscription purchase Ensures product use longevity Lowers loyalty shifting Can still become stale and stagnant Potential to leave consumers angry if money is invested but competitors introduce new and better products Restricts room for improvement and immediate innovation

8 8 4.0 RECOMMENDED COURSE OF ACTION It is recommended that Strength Pharma employs two key courses of action: shifting target market to psychographic segment A and B advertise through app, targeting achievements and long-term use These effective, efficient, and feasible solutions will work in tandem to combat the advertising problem - product stagnation, and assist in the company s objective - long-term stability. The market is expanding exponentially, making it vital for SP to retain consumers already interested in Muscle-RDX. Losing consumer s to growing competition is a high risk, making a frequent and targeted approach more suitable than a reach campaign. Targeting psychographic profiles A and B is advantageous predominantly due to the long-term goals these segments pursue. Their ability and will to motivate and involve others is the second key benefit. Word-of-mouth, or earned advertising, is generally the best form due to its low cost and complete transparency. Advertising through the app welcomes competitive advantage due to no other brand producing an app available on most platforms. Despite a saturated market, this will allow SP to indirectly compete with other brands. Additionally, and indirectly, trust will be built through the app s ability to show performance whilst using Muscle-RDX. This feature builds brand affinity within direct consumers, but also professionals, leading to further and future recommendations. Apps allow for highly targeted ads, along with tracking and measurable success. Personalised ads and achievement rewards encapsulates psychological theories of social status, as well as fulfils Maslow s highest need self achievement. To implement these recommendations, SP is advised to continue direct-to-consumer (DTC) advertising, as well as print and online ads targeting fitness professionals. It is advised through this continued advertising that SP shifts the focus onto the key competitive advantage, the app. The protein supplement in addition to the app allows the package to be promoted as a second or free trainer, thus appealing to new athletes, experienced athletes, and their trainers and coaches. This unique selling point in addition to targeted personal advertising and earned word-of-mouth will work in tandem to prevent the product from becoming just another supplement.

9 9 5.0 REFERENCES Businessnews Publishing. (2014). Summary : trading up - michael silverstein and neil fiske. Retrieved from Dewani, P., & Nigam, A. (2016, November 30). MUSCLE-RDX: PRICING, PACKAGING, AND DEMAND FORECASTING FOR A NEW PRODUCT Kim, D., & Jang, S. (. (2013). Price placebo effect in hedonic consumption. International Journal of Hospitality Management, 35, doi: /j.ijhm