This new edition of Beacon consists of Industry analysis of Defence, Brand Analysis of Royal Enfield, Case study of Hippo, Surrogate Advertising as the concept of the month.

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Contents
ABOUT US
OUR TEAM
BRAND ANALYSIS
INDUSTRY ANALYSIS
CONCEPT OF THE MONTH
CASE ANALYSIS

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OUR PRESENCE
ABOUT US
VISION
The SIMCON - SIMSREE consulting club is an
initiative started in 2012 for those students in
pursuit of excellence in management consulting
and strategic management. Aimed at creating
awareness among the students about consultancy
as a discipline, the club strives to maintain strong
relations with top consultancy firms and provide
platform to craft highly skilled & competent
consultants from SIMSREE. The club is a resource
for information about consulting and a place for
students to obtain real-world consulting experience.
SIMCON provides an avenue of interaction among
faculty, students and alumni through competitions,
live projects, guest lectures, and conclaves. For
this purpose the club has also been publishing its
monthlynewsletter– BEACON (BE A CONSULTANT)
and maintains a FACEBOOK PAGE where latest
news and development in the consulting industry
are posted.
MISSION
To create awareness amongst the students
about consulting industry & its latest trends.
To maintain strong relations with top
consultancy firms.
To provide platform to craft highly skilled &
competent consultants from SIMSREE.
To provide exposure to students via
competitions, live projects, guest lectures &
conclaves.
Contributions invited:
To make this feature a successful effort, we seek continued involvement and contribution from our readers, that is YOU. We
invite articles, research papers, and trivia on themes related to consulting. Be it industry news, consulting trends, a joke, a
cartoon or feedback, we are eager to hear from you. So go ahead, do your research, pen down your thoughts and mail your
entries to simcon.simsree@gmail.com.
Best Regards,
SIMCON - SIMSREE CONSULTING CLUB

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OUR TEAM
ARPIT agrawal
ASHAYDHURI
HUZEFABODABHAIWALA
KARANCHOPRA
NAMANCHANDAK
praCHIKORE
SARANGKULKARNI
YOGESHMOHATA

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OUR TEAM
ADITYASINGAL
JASPRITTANEJA
APURVAGHUTUKADE
MANGESHLAVTE
NIRANJANSATAM
PRIYANKAHEGDE
SWAPNESHSAWANT
VIDHITHAKKER

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DEFENCE
INDUSTRY ANALYSIS

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Introduction
The Indian defence industry is one of the fastest-
growing global defence markets. For acquisition
of all types of military hardware and technology
defence capital expenditure is spent, and has grown
at a CAGR of 12.25%. In 2010, India was allocated
US$13.1 billion for defence capital expenditure in the
budget. Defence expenditure is expected to record a
CAGR of 13.08% to reach an annual expenditure of
US$67.8 billion by 2016. This is primarily due to the
country’s ageing military hardware and technology
which is in need of replacing, and demands for
defence against domestic insurgencies and hostility
from neighboring countries.
The strong growth in the industry is attracting
foreign original equipment manufacturers (OEMs)
and leading companies from the domestic private
sector to enter the market. Further, terrorism is
leading to considerable increase in the defence
budget and a shorter sales cycle. Hence it offers an
attractive market for defence manufacturers. The
country is expected to demand unmanned combat
aerial vehicles (UCAVs), advanced electronic
warfare systems, combat systems, rocket and missile
systems, fighter and trainer aircraft, stealth frigates,
and submarines.
Inaddition,itsexpenditureonITandcommunications
is expected to increase significantly, with a strong
focus on enterprise applications, real-time mobile
communications and systems integration.
India is dependent on imports to procure defence
equipment with advanced technology. Since most of
the equipment which India is seeking use advanced
technology, there will be a significant prospect for
foreign OEMs to enter the Indian defence market.
Market Size
Indiawhichistheworld’sthirdlargestfightinghasthe
strength of defence equipment with regards to ‘State
of the Art’, ‘Matured’ and ‘Obsolescent’ equipment
is 15, 35 and 50 percent respectively. This implies
that the Government will have to take serious efforts
towards up-grading its defence resources either by
developing or procuring defence equipment and
systems. Further, maintenance, up-gradation and
modernization of the existing equipment will also
provide enormous opportunities to the industry.
India is one of the largest global military spenders
too.
It is the responsibility of The Department of Defence
Production of the Ministry of Defence to produce
equipment used by the Indian Armed Forces. It
includes the 41 Indian Ordnance Factories under
control of the Ordnance Factories Board and 8
Defence PSUs namely, BEL, HAL, BDL, BEML,
MDL, GRSE, GSL and Midhani.
The Indian Armed Forces are currently the world's
largest importer of arms and ammunitions, with
Russia, Israel, and to some extent, United States
and France being the primary foreign suppliers of
military equipment.
Defence spending in India has grown at about 17
percent in the past years, and with this India has
come forth as one of the largest arms importer in
the world. In spite of this huge market, the current
policies and structure of the industry has constrained
the domestic defence production as only 30 percent
of the demand is met internally.The participation of
private sector is even lower at about 10 percent that
too mostly from Tier II or III suppliers. The following
table and chart shows the defence expenditures of
the largest military spenders in the world:
Country
Budget in 2010
)Billions USD(
Budget in 2016
)Billions USD(
US 722 688
China 78 137
UK 51 57
France 56 62
Japan 53 62
Germany 42 43
Saudi Arabia 42 58
Russia 50 89
India 33 68
Italy 27 26

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Historically, India has always preferred the public
sector over the private in the areas of defence
production. India’s first industrial–policy resolution
in 1948 made it perfectly clear that a major portion
of industrial capacity was to be reserved for the
public sector including all arms production. When
this document was revised in 1956, it placed the
aircraft, munitions, and shipbuilding industries in
public sector under central Government control
which prevented private sector production.
The Amount Of Money Involved
The Indian Defence budget was valued US$36.7
billion in 2011, and is expected to grow at a CAGR
of 13.08% as we saw Indian Government spending
US$67.87 billion on it in 2016.
The country’s total Defence expenditure during the
forecast period is expected to be US$304.8 billion,
out of which US$120.3 billion will be spent on the
acquisition of military hardware while the remaining
US$184.5 billion will be spent on the upkeep of its
personnel, maintenance of existing equipment and
construction of facilities. The following table and
chart shows the India’s defence expenditure:
Year US$ Billions % Growth
2011 38.7 11.0
2012 41.2 12.5
2013 46.6 12.9
2014 52.7 13.2
2015 59.8 13.4
2016 67.8 13.4
CAGR 2011-16 13.08
The country’s defence expenditure grew at a rapid
pace due to the external threats it faces from hostile
neighbour. The country’s strong economic growth
has also supported the defence budget’s growth.
The country’s Defence expenditure grew at a rapid
pace due to the external threats it faces from hostile
neighbours.
The country’s strong economic growth has also
supported the defence budget’s growth. India’s
defence expenditure as a percentage of GDP:
Share Of Armed Forces In 2016-17 Budget
In union budget 2016-17 Rs. 3,40,921.98 crore
(US$ 52.2 billion) were set aside for the Ministry of
Defence (MoD). As can be seen, the Indian army
has the biggest share in defence resources, followed
by the air force, the navy and the DRDO. The
biggest share of the Army is primarily because of its
numerical superiority over others.
Defence Sector Policies In India
1. Offset Policy
The key objectives of the defence offset policy is to
leverage capital acquisitions to develop the domestic
defence industry. Under DPP 2016, the offset level
has been raised to Rs, 2000 Crore from Rs. 300 Crore.
Latest changes in offset policy promote following:
Make in India: As per latest offset policy , the foreign
vendor will be mandated to spend its 30 per cent
investment share in a particular "Make in India" plan

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to set up a defined manufacturing facility in India,
eg. Setting up production line for air crafts
Transfer of Technology (ToT): A committee of armed
forces and defence ministry would set up to decide
technology requirement. In this case, DRDO would
be the custodian of the technology but the private
sector will be preferred as production agency which
would be fully involved from the beginning.
Skill Development: Creation of, innovation centers,
R&D facilities, training institutions and labs to raise
a new generation of skilled workers for the defence
and aerospace sector.
2. Defence Procurement Policy
The defence procurement is governed by the
Defence Procurement Procedure (DPP 2016).DPP
2013 had given more preference to Buy (India), Buy
and Make (India). DPP 2016 has covered various
aspects in defence procurement in order to simplify
procurement process such as,
• Enhancing strategic partnership with private
firms;
• Transfer of Technology (ToT);
• Financial and legal examination of Standard
Contract Document (SCD) to minimize
uncertainty and scope for disputes etc.

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3. Export Import Policy
To become globally competitive it is necessary to
develop export capabilities in defence sector. To
encourage the export following strategies have been
notified,
• Setting up an export promotion body;
• Constituting a defence export steering committee;
• Providinggovernmentsupporttodefenceexports;
• Export financing
Public And Private Sector Participation
Public Sector
DepartmentofDefenceProduction(DDP)wassetup
in November 1962 with the objective of developing a
comprehensive production infrastructure to produce
the weapons/ systems/ platforms/ equipments
required for defence. Over the years, the Department
has established wide ranging production facilities
for various defence equipments. The organizations
under the Department of Defence Production are as
follows:
Ordnance Factory Board (OFB), Mazagon Dock
ShipbuildersLimited(MDL),HindustanAeronautics
Limited (HAL), Bharat Electronics Limited (BEL),
Goa Shipyard Limited (GSL), Hindustan Shipyard
Limited (HSL), BEML Limited (BEML), Bharat
DynamicsLimited(BDL),GardenReachShipbuilders
& EngineersLimited (GRSE), Mishra Dhatu Nigam
Limited(MIDHANI), Directorate of Standardisation
(DOS), Defence Exhibition Organisation (DEO)
DPSU 2013-14 2014-15 2015-16
HAL 15867 16289 10228
BEL 6127 6659 4466
BMEL 2814 2599 1840
BDL 1804 2770 2446.70
GRSE 1611 1651.31 1030.95
GSL 509 569.55 465.09
HSL 453 294.16 340.16
MDL 2865 3592.6 2174.64
MIDHANI 572 640.04 477.77
OFB 11123 11364 7526
Total 43745 46428.66 30995.31
Value of Production PSUs & OFB(in Rs. Crore)
DPSU 2013-14 2014-15 2015-16
HAL 2693 2388 1005
BEL 932 1167 563.16
BMEL 5 6.76 -102
BDL 346 419 318
GRSE 121 43.45 47.22
GSL -61 78.24 32.26
HSL -46 -202.84 -60.34
MDL 398 491.59 388.74
MIDHANI 83 102.13 66.26
Total 4471 4493.33 2258.3
Profit After Tax For PSUs(in Rs. Crore)
Private Sector
To achieve the goal of self-reliance in the Defence
sector, continuous efforts are being made to increase
indigenization, wherever technologically feasible
and economically viable. In May, 2001, the Defence
Industry sector, which was hitherto reserved for the
public sector, was opened up to 100% for Indian
private sector participation, with Foreign Direct
Investment (FDI) up to 26% both subject to licensing.
Following are few examples of the same:

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‘Make in India’ Initiative & Defence Industry
‘Make in India’ initiative has had mixed effects on
the Defence Industry. On the positive side, there
are a slew of tax-related measures to encourage the
domestic industry. The withdrawal of tax benefits
extended to direct imports by the MoD would
provide a much required level-playing field to the
domestic industry as a whole vis-à-vis the foreign
companies. Similarly, the withdrawal of tax benefits
given to the contractors of the government-owned
entities would provide the level-playing field to the
Indian private sector vis-à-vis the Defence Public
Sector Undertakings (DPSUs) and OFs.
On the flip side, the allocation for the DRDO,
which is supposed to be at the heart of the design
and developmental efforts under the ‘Make in India’
initiative, has been reduced by 5.3 per cent. Further,
the new budget does not provide any allotment for
‘Make in India’ projects, whereas the paltry sum of
Rs. 144.41 crore provided under this head in previous
budget has been taken out at the revised stage.
Technological Progress
The country is planning to set up 12 Research
&Development Centres with state of the art CAD/
CAM facilities in order to boost R&D efforts in the
ordinance factories which will prove to be a positive
initiative. In real battle conditions, it is the day to day
usable technology and product up-gradation that
helps the fighting forces. The Defence PSUs have also
embarked on intensification of their R&D efforts and
the initiatives taken by HAL (10 R&D Centres), BEL
and BDL are definitely a boost.
Challenges Faced
Restricted FDI, bureaucracy and lack of transparency
are the key challenges for the industry. Despite
expanding opportunities in the Indian defence
industry, the government’s comparatively strict
regulatory regime creates challenges for foreign
investors who are eager to enter the country. The
critical area of concern is the offsets in defence,
which have been placed at 30%, and in some cases,
for example in the development of Medium Multi-
Role Combat Aircraft (MMRCA), offsets increase to
50%.
Managing their offset obligations will continue to
be the biggest challenge for foreign companies.
However, the recent changes in offset policy indicate
that the regulatory regime may ease, making the
Indian defence market more competitive. The
Government has made favourable changes in its
FDI policies considering persistent pressure on the
Key Areas To Target In The Indian Defence Industry

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government from Indian industry bodies and key
corporate companies.
Conclusion
In this growth stage, our country enjoys advantages
like availability of capital, accessibility to earlier
denied technologies, willingness for cooperation
and collaboration by defence production giants
especially from the West in the wake of the economic
downturn.
Today, India has a globally competitive scientific
community and skilled manpower with long years of
experience and knowledge pertaining to the Defence
industries. There is also a new wave of enthusiasm in
India’s public sector enterprises.
For acquiring self-reliance – cutting across the
barriers of public and private sectors, the Defence
Ministry can perhaps utilize the experience of ISRO
which outsources components, hardware and sub-
systems for its launch vehicles and satellites from
the Indian industrial units, both in the public and
private sectors. Vision, speed, convergence and
de-bureaucratization of defence production and
technology development should be the guiding
Mantra of India in the coming decades.
Reference
Defence-industries.com, Make-in-india, Canadean,
Institute for Defense studies and Analysis, Ministry
Of Defence

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ROYAL ENFIELD
BRAND ANALYSIS

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Introduction
Royal Enfield was a brand of the Enfield Cycle
Company, a British manufacturing firm. It started in
India for the Indian Army 350 cc bikes were imported
in kits from the UK and assembled in Madras. After
a few years, the company started producing the 500
cc Bullet.
In the famous 1975 Bollywood movie Sholay,
Dharmendra and Amitabh used it to ride down a
bumpy road singing to the tunes of ‘Yeh Dosti' which
marked the peak of this well-known motorbike
brand in India. Royal Enfield India is known for its
rugged bikes having a superior build quality, and
vintage design. It was formed in the year 1955 when
British Enfield motorcycle Company partnered with
Madras-based Madras Motors in order to produce
bikes for the Indian Army and was named as Enfield
of India. The first bike assembled in India was a 350 cc
bullet an overhead valve single cylinder four-stroke
motorcycle which is one of the oldest bikes with a
longest continuous production run of 75 years.
components were being made in India. In 1972, the
original Redditch, Worcestershire based company
was dissolved though the Indian brand ‘Enfield of
India’ was still thriving, which then bought the rights
to use the name Royal Enfield in the year 1995. The
Indian brand is currently a subsidiary of Eicher
Motors, an Indian automaker. Its products include
Royal Enfield Bullet and other single cylinder
motorbikes.
Royal Enfield currently sells bikes in more than
50 countries including the UK. It surpassed its
competitor Harley Davidson in sales in the year 2015.
Decline
In the 70s and 80s, there were only a handful of
competitors for Royal Enfield Bullet. During that
time, bikes were mainly used by urban people as a
utility vehicle for transport. Though market share of
Yezdi and Rajdoot was higher than that of RE but
because of strong inherent brand values even the
second-hand bullet had a good value.
In the early 90s and late 80s, preferences of buyers
began to change as they started considering quality,
mileage and other parameters while buying a bike
which RE neglected. Also after the liberalisation of
1991, the entrance of Honda and Kawasaki Bajaj
with fuel efficient motorbikes changed the market
dynamics. RE’s market share came down from 25%
in the 70s to a mere 5% in the late 90s.
Revival
Siddhartha Lal, the third generation CEO and MD of
Eicher Motors came to the rescue of RE. He decided
to do away with the 13 businesses and focus on only
2; one of them being Royal Enfield. His strategy was
clear; instead of being mediocre in 15 businesses, it
was better to be a master in 2. RE decided to focus on
a niche market instead of competing with 11 other
companies making bikes at that time. The niche
segment that Lal focussed was mid-sized leisure
motorcycle with target customers being Indian. In
this way, he found a right positioning for RE in the
crowded market.
Parts were imported from England and assembled
in Madras before 1957. In the year 1957, the
company started importing technology to make
the components in India; by the year 1962, all the

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Royal Enfield touched a new high by selling 25,000
bikes a year by the year 2005, which then reached
50,000 per year by 2010. But the bikes were being
made on three different platforms which added to the
cost of production. Lal decided to do away the other
two and produce it on a single platform and also
increased the scale of production in order to spread
out the fixed cost over large output and maximise
economies of scale.
With the launch of Royal Enfield Classic, the sales
of RE shot up 6 times from 50,000 in 2010 to
300,000 in 2014. It sold 400,000 bikes in FY 2015
the number increased by 50% to 600,000 bikes in the
FY 2016. RE also solved the problems of electrical
failure, oil leakages, engine seizures, snapping of
accelerators and other major changes were made to
the manufacturing process and supply chain. New
engines with 30% fewer parts, lighter, powerful
which improved efficiency, lower workloads and
fewer warranty claims. The focus now is on mid-size
segment targeting commuters using scooters and
commuter bikes.
Royal Enfield Product Profile
Royal Enfield Bullet 350
With 18 bhp power from air cooled 4-stroke single
cylinder 346 cc engine, fuel tank capacity of 13.5
litres the bike has got all the features to get excited
about. It has got a traditional design of a bullet,
superior design, comfort and is a flagship offering
of the company, with other bikes being more of a
derivative of Bullet rather than standalone products.
Royal Enfield Bullet 500
A 499 cc, 13.5-litre single cylinder 4 stroke, twin
sparked air cooled engine featuring electric start. It
provides a higher torque at a low engine rpm, making
the drivability easier. Though it looks similar to the
350cc model but a high power and capacity of the
engine make it preferable for long journeys.
Royal Enfield Bullet Electra 4S
Due to problems in kick start of its 350cc Bullet, due
to CB point ignition system, Electra was introduced
with CDI ignition system. This also paved way for
newer bikes to have digital TCI as a part of standard
package.
STP Analysis
Segmentation
Royal Enfield segments the market on the basis
of demography (country or city in this case), age
group, income level, life style (leisure/utility/status
symbol).

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Target
It targets the middle-class people within the age
group of 25-45. These are particularly executives in
Tier 1 and Tier 2 cities and young, rich and powerful
in the case of Tier 3 cities.
Positioning
A powerful motorcycle for bike adventurers in the
case of Tier 1 and Tier 2 cities and as a social status
.symbol in case of Tier 3 cities
SWOT Analysis
Competitors
1. Bajaj Auto Limited
2. Hero Motor Corp (Hero Honda)
3. TVS
4. Suzuki
5. Harley Davidson
6. Yamaha
7. Ducati Superbike
Profits After Tax (PAT)
Eicher switched from an earlier January-December
FY cycle to April-March in compliance with the
Companies Act, 2013.
The profit growth has seen a phenomenal jump over
the past 3 financial years. The marketing strategies
employed by Royal Enfield are finally paying off their
.dividends
Units sold graph
Source: MoneyControl
Royal Enfield has seen a phenomenal growth in
the mid-size motorcycle segment. Fueled by an
aggressive marketing blitz-krieg and a loyal fan-
base, the sales have rocketed over the years. This
has ushered in huge profits for the company which
ironically has a waiting period of 3-6 months on
each order placed. That definWWitely does not seem
to be a deterrent as customers value the brand and
waiting period being the least of the concerns for an
association with Royal Enfield.
The Indian motorcycle market, when segregated on
tank capacity, gives a clear indication of the customer
preferences. A huge chunk of the 150cc+ and 250cc+
bikes sold are by Royal Enfield.

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Royal Enfield Rides
A way to create a strong brand awareness is by
capturing the masses’ imagination. And that is the
purpose that is served by the Royal Enfield Rides.
The company promotes RE owners to undertake
such road trips with other fellow riders in the process
building a strong rider community.
Media Campaigns
“Handcrafted in Chennai”
The latest campaign by Royal Enfield is a tribute to
Chennai, its home. The advertisement captures how
each Royal Enfield motorcycle is assembled and
handcrafted in their Chennai plant unlike other bikes
of today which are mass produced. The plant also
boasts of Royal Enfield Bullet 350cc which has the
longest production run for any motorcycle passing
75 years of continuous manufacturing.
The Chennai plant now also conducts factory tours
for enthusiasts from all over wherein they are allowed
to see the assembly process in action.

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“Leave Home”
Royal Enfield launched this campaign to promote
their spirit of free riding with nothing binding
the rider down. The campaign was released in
print media aimed at capturing the imagination
particularly of the 18-25 age group customers to
explore with the rides.
The Royal Enfield has been immortalised by a
perfect product placement (unintentionally on
most occassions). It has been long associated with
Bollywood movies from epic blockbuster “Sholay”
to more contemporary flicks like “Bhaag Milkha
Bhaag”. The trademark bullet engine sound has been
embedded in the masses’ memories.
Though firmly perched at the top with a cult status
to the brand, the position is threatened by Harley
Davidson and the likes. The customer associate RE
with a luxury brand and a status symbol. The long
history behind the brand makes it an even more
enticing product.
In a world of Ducati and Harley Davidson, Royal
Enfield has held its own among the customers. The
classic analogue dials and the shiny chrome tanks
bundled with the trademark piston pumping has
created a community of riders who share the same
passion. RE has tapped into this tactfully coming
up with merchandises and rider festivals to create a
brand awareness not seen by other brands.
Below is the link of Royal Enfield advertisement of
Royal Enfield Himalayan (a bike built specially for
riding in tough conditions of Himalayas)
Royal Enfield Himalayan
Here is the advertisement’s narrative to inspire the
explorer inside you..:
Journeys are not great or small, they just are..
Explorers were not born heroes, they were just
curious,
The earth awaits you, answer it,
The sun will light your path, follow it,
Valleys will not stay quiet, and even time will not
stand still,
Sometimes the first step.. is the final frontier
Don’t turn around….!
The mountains call us all,
The only difference.. is what we say back..
References
Business Standard, Economic Times, Royal Enfield,
Eicher Motors Annual Report

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HIPPO
CASE STUDY

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Background
In 2001, Parle Agro entered the food segment of
India with confectioneries. In 2009, it extended its
presence into the Indian food snack category by
launching 'Hippo'. Hippo is neither potato chips
nor biscuits; it is a new baked wheat snack brand.
It was launched in five flavours- Pizza, Chinese
Manchurian, Hot-n-Sweet Tomato, Thai Chilli and
Yoghurt Mint Chutney.
Hippo was promoted with the philosophy of ‘Hunger
is the root of all evil. So, don’t go hungry.’. What
differentiated Hippo from all of its competitors
was its unique and uncommon brand endorser- A
fat Hippo. Hippo’s humanistic character was loved
by everyone. It communicated with everyone via
Facebook, BlogSpot and Twitter.
The word HIPPO was written in huge font to go well
along with the personality of the character. They
advertised Hippo as Not fried only baked, which
communicated the message of staying healthy and
urged the consumers not to neglect their health and
consume healthy snacks.
The brand performed extremely well in its category
leaving the shelves across 200,000 stores empty.
Problems Faced By Hippo
1. Distribution And Logistics
Hippo was launched in the Indian snack market in
2009 and received a stupendous response from the
customers all over India. Within a few months of
its launch, demand was becoming more and more
and it was becoming difficult to meet the increasing
demand. The retail shelves at various stores were
becoming empty faster than expected leading to a
demand-supply problem for the company.
It was becoming difficult for the developing Sales
and Distribution Network to meet the overflowing
demand. It was a daunting task to identify the empty
stores and re-stock the empty shelves among the 4
00,000 retail stores nationwide.
1.1 Strategy
Plan T
To overcome the distribution problem, Hippo came
up with an innovative solution instead of following
the traditional way. It entered social media. In 2010,
Hippo asked its followers on Twitter to send a tweet @
HelloMeHippo about the unavailability of Hippo
snacks at the neighbourhood stores. This campaign
involved the customers in Hippo's entire supply
process across specific locations. People heartily
participated in huge numbers in this “Hunger-
Fighting” campaign.
Tweets poured in from 45-50 cities in India. This
campaign brought a huge number of followers on
Twitter. It helped Hippo to get 400 more people to
help with the sales and distribution at no cost via
twitter. Customers were tweeting using their cell
phones from colleges, supermarkets, local grocery
stores, offices and railway stations.Hippo collected
the information found on twitter, analysed it and
sent the information to the local distributors of the
specific areas who eventually restocked the retail
shelves, thus satisfying the customers within hours.

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1.2 Execution
Hippo did not want to use the conventional way of
spending large amounts of money by outsourcing
the distribution and supply duties to overcome
the demand-supply problem. It instead helped the
customers by directly communicating with them.
Hippo set up a core cell at the manufacturer’s
headquarters in Mumbai, which was found to gather
the information and immediately passed it to the
distributors. This system was working very much
efficiently. The stocks were replenished within 48
hours of receiving the complaints and the customers
were informed immediately about the availability
of hippo via twitter. They awarded the most active
customers on twitter with ‘anti-hunger’ hampers in
order to encourage more and more participation
from the customers. It helped in creating a bond
between the customers and the brand.
The customers began to realize that this campaign
was helpful in solving their complaints and that their
tweets made hippo available in their neighbourhood
retail stores. Hippo gained more popularity by word
of mouth publicity and social media.
1.3 Results
Hippo identified the problem it was facing and did
not want the customers to take the empty retail
shelves as an indication about the failure of the brand
in a short span of time.
It came up with the Plan-T (Twitter), which was very
much successful in converting the followers and
customers into inventory trackers. Hippo was able to
bring equilibrium between the demand and supply
thus solving the distribution and logistics problem.
Its sales rose by 76% in the initial phase of its launch.
Before the launch of the campaign, Hippo had 800
followers on twitter which soon increased by 300%
to 4000 followers which was equal to 50% of its sales
and distribution network. The customers had an
amazing experience to learn how a simple tweet can
restock the retail stores and fulfil their demand. They
engaged better with the brand and helped Hippo in
building online presence.
Hippo was able to assess markets and identify
potential markets for its business expansion with
the help of this campaign. It identified its weakness
and converted it into strengths by leveraging social
media. Hippo is a very good example of how a brand
retained its customers who could have gone to its
competitors due to unavailability of stocks. It used
social media to connect with the customers and
provide real-time solutions to availability issues.

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2. Competition
One of the problems faced by Hippo was fierce
competition.Ithadtostandoutofanalreadycrowded
snack market and create a strong brand preference
in the minds of consumers. It had to do something
innovative which could give it an edge over the other
competitors. With the nationwide successful digital
campaigns in the past, Hippo came with another
campaign, Indian Food League (IFL)
2.1 Strategy
Indian Food League
In 2012, Hippo launched an online campaign named,
Indian Food League (IFL) during the Indian Premier
League (IPL) session.
Indian Food League was catchy and funny and
designed in order to engage all the cricket fans and
capture the emotional rivalry amongst Indian cities
during the IPL. The brand had designed a micro site
for this campaign and organised an event with the
campaign.
Hippo had named the teams like Chennai being
represented by Idli Sambhar, Delhi by Papdi Chat,
Mumbai by PavBhaji, Rajasthan by Dal Bati,
Bangalore by Masala dosa, etc. So a match between
Delhi and Mumbai would be a match between Papdi
Chat and PavBhaji. Hippo added ‘today’s special’
which mirrored the match scheduled.
2.2 Execution
The IFL campaign was conceptualised and executed
by Creative land Asia. All the cricket fans nationwide
could login via twitter or facebook. They had to write
witty comments in support of their favourite flavour
and use different colours of chalk. They had to be
as funny as possible to win the contest. Winners
were announced daily and rewarded with Hippo
bean bags. IFL was created as a platform to engage
its customers during the cricket season. IFL was
launched keeping in mind the large fan following
for cricket in India. People watch cricket along with
their family members and friends and Hippo IFL
was targeted at this consumer pattern.
2.3 Results
Hippo’s IFL brought all the cricket fans together to
watch their favourite teams fight it out. It gave all of
them a chance to voice their humorous opinions.
Hippo’s campaign became successful by bringing
food to the heated and opinionated conversation.
IFL received astounding response with Hippos sales
going up during the IPL season. It is a classic example
of crowd-sourcing activity.
Currently, Hippo has 3,975 followers on twitter and
28,098 likes on Facebook.
Parle Agro preparing for a comeback
Nadia Chauhan, Joint Managing Director and Chief
Marketing Officer, Parle Agro, in an interview said
that Hippo as a Brand is doing well. Since the logistics
cost in the snacking category is enormously high,
Parle Agro is now planning to localise the factories
and looking into the entire business model. It has
added more factories and Hippo will take some time
to become stronger nationally.
References
MXMIndia, India Social, Campaign India,
MBASkool, Best Media Info, Digital Marketing Blog

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SURROGATE ADVERTISING
CONCEPT OF THE MONTH

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Advertisements have a strong influence in our life.
Advertisement decides the fate of the product. Our
decisions whether to buy a product or not, is often
completely influenced by the promotional activities
of the companies concerned.
Surrogate advertising is duplicating the brand image
of one product extensively to promote another
product of the same brand. It aims to promote brand
name rather than the actual product. Advertisement
of prohibited product is done by indirect referencing.
In India, Product advertising for liquor and cigarette
companies is banned since 1995 by Cable Television
Network (Regulation) Act. Since liquor & cigarette
generates high revenue a way had to be found to
advertise these products. Various surrogate products
used by companies include audio cassettes, soda,
drinking water juices, etc. Surrogate Advertising
is done simply to ingrain name of the brand in the
mind of consumers.
Surrogate marketing is a smart way of marketing
products as the original product is being marketed
by just communicating the brand name.Through
surrogate advertisements commodities dilute itself in
the brand name. Liquor & cigarette advertisements
lure customers by establishing their products as
status symbols. In such cases changing buying
behaviour of the consumers is extremely difficult
as they look for brand & not product. People have
stopped wearing ordinary shirts, but only wear Louis
Philippe, Van Heusen or Arrow. Similarly, how a
person will not drink anything but Johnny Walker.
And it goes without saying that once a person starts
buying brand he ends up over-spending and over-
consuming.
Examples
Brands like “Royal Stag” & “Imperial Blue” are
associated with Music CD’s and Music Concert.
Johnny Walker, associates their brand with successful
achievers through “Keep Walking” campaign.
UB group has used the surrogate advertisement most
effectively by creating a Kingfisher calendar, as well
as by incorporating the tag line ‘The King of Good
Times’ into their cobranded lifestyle channel, NDTV
Good Times. UB group brought back its signature
'Oo la lala le o' jingle during IPL.
Fore square, a cigarettes manufacturing company is
more known for the Four Square bravery award. Gold
Flake, cigarette brand, sponsors tennis tournaments.
For 5 consecutive years Manikchand, manufacturers
of ghutka, sponsored the Filmfare Awards. Haywards
5000 promotes the soda & has launched a start-up
reality program called ‘Haywards 5000 Hauslay Ki
Udaan’.

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Legislative Measures
In the 1999 Voluntary Health Association of India
filed a petition against Wills brand of cigarettes
manufacturedbyITC,seekingbanonthesponsorship
of the Indian cricket team by them. The Association
believed that repeated viewing of the logo on the
official uniform of the players could influence a lot of
viewers. In 2001; during the pendency of the petition,
ITC on its own withdrew the sponsorship as it did
not wish to go against any government endeavours.
As per ASCI (Advertising Standard Council of
India) an advertisement is not objectionable as
long as it does not contain direct or indirect sale or
consumption for the product which is not allowed to
be advertised.
To regulate the surrogate advertising the government
has instructed the companies to manufacture
sufficient quantity of surrogate products such as
bottled water or music CDs & file for a certificate.
Moreover, the money spent on advertisements of
surrogates should be proportionate to the actual
sales turnover of the products. Most of the times, the
taglines used in the ads of the surrogate products are
same as ones used for liquor or cigarette brands. Now,
direct or indirect reference to the banned products,
use of same colours, presentations, layout or phrases
as in the original ads has been prohibited. Even the
story board or visuals should not resemble.
Conclusion
Advertisementsareameansofinformationexchange.
The problem occurs when heavy advertising is done
so that the customers do not forget their liquor
& tobacco brands, for which advertisements are
banned.
Government is now enforcing ban on surrogate
advertisements. As a response to this companies
have started associating with events, award shows,
films & are employing similar integrated marketing
strategies.
Since liquor & cigarette are huge revenue generating
industries, complete ban on these products is not
practical. These brands will continue to exist & they
will surely seek ways to promote their products to
the masses. Whether surrogate or otherwise!
References
The advertising club, Legal service India,
MarketingFAQ