EMPI BUSINESS SCHOOL

MIDTERM EXAM SEPT 21

BRAND MANAGEMENT

Time: 1 Hour Max. Marks: 20

Note: All Sections are compulsory.

Read the given caselet and answer the following

1. You are the branding expert and have been hired by Dheeraj Gupta for his Vada
Pav chain. Your first step is to develop brand salience for the chain. The name
Jumbo King is already selected. Identify the target audience, CFR, POP and POD
for the brand. Also make the perceptual map.
(10 marks)
2. How would you like to design the brand mantra? Give reasons for the same.
(2 marks)

Dheeraj Gupta — an aspiring entrepreneur from Mumbai — completed his MBA in 1998
— two years after US fast-food chains McDonald’s and Dominos entered India. Till then,
Gupta wanted to establish manufacturing and distribution of Indian sweets in the line of
chocolate companies, but it never took off.

During the bootstrapping days for the sweet business, Gupta was losing money — about
Rs 50 lakh in two years — which he had borrowed from various sources. The much-
desired sweets venture did not leave any sweet memory in Gupta. During these years,
Gupta could not manage to keep his eyes off the success of McDonald’s and Dominos
selling burgers and pizzas.

Gupta had to say good bye to the sweets business as he had decided to build a business in
the lines of McDonald’s. Instead of burgers and pizzas, he chose vada pav, the most
popular street food in Maharashtra.

In a bid to organise one of the most unorganised food businesses, debt-ridden Gupta once
again decided to borrow. With an initial corpus of only Rs 2 lakh, Gupta started Jumbo
King — a retail chain that would sell authentic vada pav across India.

Gupta leased out a 150-200 sq ft space outside Malad railways station, western suburb in
Mumbai, to set up the first Jumbo King outlet that started selling 20 per cent larger vada
pavs than those sold by ordinary street stalls.

On the first day — August 23, 2001 — Gupta made Rs 5,000 by selling vada pav. While
he closed the first year with a revenue of Rs 40 lakh, Gupta had to wait till 2003 to open
the second store. By 2005, Jumbo King had just five outlets in Mumbai.

Since the beginning, Gupta decided to follow the outsourcing model for sourcing and
focused on consumers with care on hygiene, packaging and pricing. Jumbo King did not
require much marketing during the initial years. It was all word of mouth.

By 2006, McDonald’s opened 100 stores across India, and Gupta decided to step out of
Mumbai to open his sixth outlet in Surat, Gujarat. However, supply chain was not ready,
and plans failed. Gupta had to sort this out first. In 2007, Gupta managed to find a vendor,
who had been providing ready-to-fry patty to multi-national fast-food chains, agreed to
feed Jumbo King as well. This cleared the biggest hurdle for Gupta to expand his
business, and paved the way for introducing different variants of vada pav.

Gupta started franchising Jumbo King across cities. Jumbo King is now present across 12
cities and it would open its 100th store by the end of May, says Gupta. “Over the next
five years, we will be focusing on the top 10 cities and will open about 50 stores each. By
2020, our target is to have 1,000 Jumbo King outlets (200-300 sq ft each). We want to
build Vada Pav stalls like ATMs across the country,” he adds.

This would include cities such as Bengaluru, Hyderabad and Indore. Typically, it has four
people at an outlet, and the franchising model works better, says Gupta.

Every franchisee owner is a businessman, and every store needs to be a success, which
eventually helps Jumbo King to grow, he adds. “Company-owned stores is not a preferred
option for us,” he points out.

As part of its quality control and customer satisfaction measure, Jumbo King conducts
‘mystery audits’ (someone goes to an outlet as a normal customer without prior notice to
check everything at a store). “We spend about Rs 1,000 per store a month. If any store
fails to meet our standards, we take necessary measures,” he adds. Jumbo King is
profitable from the beginning and is growing upwards of 35 per cent annually. Jumbo
King franchisees are assured of return on their initial investments within three years,
while they pay eight per cent of margins to the brand owner.
However, the next phase of growth will require external funding, says Gupta. “We may
raise about Rs 50 crore after we open our 100th outlet. This would be help us to expand
our footprint to 1,000 stores by 2020,” he says.

3. Identify the primary brand elements of the given brand. Do all the brand elements
fulfil the effectiveness criteria? Please give reasons for the same. Based on your
analysis offer recommendations. (08 Marks)