Sales and Distribution Management

Kurdola Case Analysis

Under the guidance of:

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 Table of Contents
Serial Number Topic Page Number
1 Problem Statement 03
2 Analysis of Case Facts 03
3 Factors contributing to 03
launch of Yummy Blend
4 Analysis of Marketing 04
Communication of KO and
KOCO
5 Factors contributing to 05
launch of Healthy Tasty
Blend
6 Product Portfolio Analysis 06
of MOMCO
7 Recommendations 06

Kurdola Case Analysis

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1. Problem Statement:
The case talks about the growth and decline of a premium edible oil brand named Kurdola
owned by a company called MOMCO. The case also discusses the launch and the growth
journey of other two oil brands namely Yummy Blend and Healthy and Tasty launched in
order to tackle the declining sales of Kurdola. The case poses mainly three decision dilemmas
faced by the MOMCO regarding the following points:
 Future prospects of Kurdola and the future communication strategy after
incorporating the latest medical research findings.
 How to leverage the benefits of Healthy Tasty Blend after incorporating the newly
found benefits to charge a premium on the product?
 What should be the market positioning of Yummy Blend given any changes in the
marketing positioning of Kurdola (KO) and Healthy Tasty Blend (KORBO)?

2. Analysis of Case Facts:

By the year 2012 MOMCO had a robust distribution network in place. The strength of its
distribution network was 1.5 million retailers. Kurdola focused itself only in the northerner
and western parts of the country and primarily relied on the recommendation from doctors
and word-of-mouth. It did not focus on creating a compelling marketing communication. By
mid 1990s Kurdola’s monthly sales volume reached to 350 kilo litres per month because of
the following reasons:
 Increase in the purchasing power of the families.
 Decision making with respect to the choice of edible oil and cooking medium was led
by wives.
 Increase in awareness regarding the heart-related diseases.
 Increase in the number of nuclear families.
Kurdola’ marketing communication relied on the use of fear of heart related diseases and
positioned itself as the best edible oil to prevent heart related diseases. It helped Kurdola in
charging a suitable premium by selling it at Rs.77 per litre in 2003 and yet doubling its sales
volume to 800 klpm.
2.1 Factors contributing to launch of Yummy Blend:
Kurdola conducted another market research the findings of which are as follows:
 The taste of Kurdola (KO) was not appealing to the consumers thus creating a
hindrance in enhancing the customer acceptance for the oil.
 The target segment was too narrow as the brand strictly focused on heart patients.
 The Premium Sunflower Oils (PSFO) were growing at a much faster rate because of
lower price, acceptable taste and its ability to gain ground as a healthy cooking
medium.
 There was a also a change in Article 43H of Prevention of Food Adulteration Acts
and rules in 2006 which restricted the usage of heart in the marketing communication
of oil marketers.

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MOMCO tried to tackle the above-mentioned challenges by making suitable changes to their
marketing communication which showed initial results but was not sustainable.
Consequently, the sales volume of KO stagnated at 1100 klpm in mid 2008.
Thus, on the basis of the above-mentioned reasons MOMCO constituted a new product
development team which came up with Yummy Blend in 2007-08 which was basically a
blend of Kardi Oil (KO) and Corn Oil (CO). It provided the following benefits:
 With Yummy Blend MOMCO was able to retain the core value of its Kurdola Blend
i.e. good for heart as it was a KO blend.
 The corn oil (CO) helped in masking the unpleasant taste of Kardi Oil (KO).
 As the cost of CO was low as compared to the KO, it can be easily positioned against
PSFO.
Yummy Blend was priced at Rs.70 per litre whereas the price of KO was Rs.80 per litre. It’s
marketing communication combined the taste and health benefits as it was launched with the
tag line of “sehat se jeena hai, mujhe rehna hai swasth”. However, it did not yield desired
results and the marketing communication was changed to doctor detailing, heart check-up
camps, formation of Kurdola healthy heart foundation and web led programs (websites).
Though Yummy Blend was able to position it uniquely in the market, it could not avoid some
cannibalization of sales of KO brand.
2.2 Analysis of Marketing Communication of KO and KOCO:

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On analysing the content of bo th the marketing communication it can be seen there has
been a shift from the fear based messaging to a dilute health benefit messaging. The
marketing communication of KOCo focuses more on benefits such as:
 It highlighted the good taste of corn
 It highlighted the presence of 89 per cent unsaturated components which reduce
cholesterol.
2.3 Factors contributing to launch of Healthy Tasty Blend (KORBO):
The factors which compelled MOMCO to launch another new product are as follows:
 The duty structure applicable to Kardi Oil increased significantly in April, 2010
which compelled MOMCO to raise the prices of Kurdola KO to Rs.105 per litre
which was not supported by the market and the sales started declining.
 Also, there was a shortage of Kardi seeds in the international market which led to a
reduction in the production of KO which in turn reduced the sales to 350 klpm.
 In 2011-12 when supplies improved, sales did not increased to the previous level it
stopped at 500 klpm.
 Market research revealed that the customers who shifted from Kurdola did not attach
any significant benefit to KO so as to return to the original brand.
 The price was untenable.
 The sales of KOCO was also stagnating.

Sales Volume (klpm)

1800
1600
1400
1200
1000
800
600
400
200
0
1999- 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010- 2011-
2000 01 02 03 04 05 06 07 08 09 10 11 12

KO KOCO

The above-mentioned reasons prompted MOMCO to look for new segments. MOMCO
developed a new blend of Kardi Oil (KO) with Rice Bran Oil (RBO) which was named as
Healthy Tasty blend. It provided numerous benefit to consumers such as healthy heart
(because of KO), taste (because of RBO) and also economy as RBO was less expensive than
KO. KORBO allowed MOMCO to enter into a huge market segment which was a high
volume low margin segment. It appealed to customers by providing a economical and healthy
cooking medium proposition.

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2.4 Product portfolio analysis of MOMCO:
We can analyse the product portfolio with the help of BCG matrix.

Kurdola KO can be considered as a cash cow for MOMCO because it still has a loyal
customer base and has the potential to remain profitable without any major marketing
support. Healthy Tasty can be considered as a question mark as it is a new brand whereas the
expected growth rate of this segment is high. Yummy blend is a star the MOMCO has good
market share in this segment but the growth is stagnating.

3. Recommendations
Challenge 1: What to communicate to the existing loyal base of Kurdola consumers? If
they do not inform them that this is not the best product for their heart, they would
belie the consumers trust that they have garnered over a long period of time? What
alternative to provide?
Recommendation: With respect to Kurdola KO we are proposing the following three
solutions whose pros and cons are discussed in the table given below:
Solution Pros Cons
(a) Change the  It will require lesser  MOMCO had to
formulation of marketing efforts as incur product
Kurdola KO with a product mix remains development cost.
combination of same.  Customers may leave
PUFA and MUFA  Majority of KO Kurdola brand if
with enhanced consumers will buy they get to know the
quality the product and reason for changing
continue to pay formulation
premium.
 It can be relaunched
as premium Kurdola
 Communication can

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 be focused on
increased benefits of
the product
(b) Withdrawing and  It helps in creating a  Original Kurdola KO
replacing the KO new market for the customers may
brand with a new product. defect to
brand with new  It will help in competitors.
formulation protecting the image  Huge product
of the company. development cost.
 A premium could be
charged.

(c) Withdrawing  Protects the image of  Brand equity will be
Kurdola the company lost
 Loyal Kurdola
customers may
defect
 Acknowledgement
of wrongdoing

Challenge 2: The best product for healthy heart platform was possibly closest to
Healthy tasty blend (currently the low contribution product). How could they leverage
the new found benefits associated with the product to command a premium?
Recommendation: MOMCO should not increase the price of Healthy Tasty blend because it
may adversely impact the low cost healthy positioning of the brand. The company should
invest in a renewed marketing communication which will emphasise the newly discovered
health benefits and taste. After analysing the impact of marketing communication premium
can be charged.
Challenge 3: What to do with yummy blend in case there was any change in the
marketing of Kurdola and Healthy Tasty blend?
Recommendation: The Yummy Blend contributes around 22% in sales and 27% in
contribution hence any decision with regards to change in the composition of the product
must be taken after considering the proportion of customers who check composition.
However, irrespective of the changes in composition Yummy Blend should be offered in the
current price range. If the new marketing communication of Kurdola and Helathy tasty is
successful then it can be leveraged for Yummy Blend but till then it is advisable to continue
with the current marketing communication.

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