A STITCH IN TIME SAVES NINE

CASE1
Satyam founded Sasi Beverages in 1991. Located in Tirupati, a town in Andhra Pradesh, a semi-urban area,
he established a successful family operation fostering friendly relationships with trade and local customers.
The major bread winner of the firm is its coffee blended with chicory in different proportions. Priced
reasonably, the 'Bharat' brand attracted the lower and middle income groups in the towns and rural areas
of Rayalseema region.
Satyam decided to have a relook at the firm's operations and prospects. "This has become necessary"
he says "because times have changed. We have been doing the same things over the years profitably. But
now, many things look different even in the rural areas. The boiling point is reached". He sat with Sasi, his
wife and business partner to discuss the measures to be taken. They together examined the 10-year sales
data given in Table 4.1.

Table 4.1 Sales History of Bharat

________________________________________________________________________________________________________________________________________________________________________________________1

Year Sales value (Rs lakhs)

1992 5
1993 30
1994 36
1995 43
1996 49
1997 58
1998 68
1999 78
2000 84
2001 85

2
Sasi: The figures show that the sales have stagnated last year. Even in the first quarter of this year the,
movement of the product is not satisfactory compared to the previous year. This is no good again?
the said market growth rate of 15 per cent in the trade journals.

Satyam : Well! The reason may be the marketing agency. I doubt their commitment. I think we have to go
on our own.

Sasi: May be it is the consumer. Now there is more money, more products and more information. Their
preferences might have changed.

Satyam : It may be another reason because we have never advertised our product. We do not have any direct
relationships with our consumers.

Sasi: I think we need a sort of market survey to finalize our plans.

They hired Sundar and Padma, two MBA students from Siva Sivani Institute of Management to carry
out research. The two students surveyed the rural areas for one month and came up with the following
findings.

1. Almost all the households are aware of the brand.

2. Image of the brand is good (Table 4.3).
3. The preferences for the brand are high (Table 4.2).
4. Retailers prefer to stock the brand. According to them the brand movement has slowed recently.
5. The main threat is from a new local brand, 'Suraj It is being pushed with high retailer discounts
and price-off coupons. It is priced Rs. 2 above 'Bharat' with a claim of latest technology used in
processing for better quality.
6. Health consciousness is growing. The social workers and primary health centres (PHCs) are
advocating against coffee drinking.
7. The brand has a traditional name. On the package, the picture of 'Bharat' with Sri Rama's paduka
(footwear of Lord Sri Rama) with the description 'trustworthy companion' is outdated. Values
have changed. Suraj advertised it as a natural and energetic coffee with the pictures of coffee
beans, rising sun and a well dressed young lady sipping the coffee.

Table 4.2 Images of Bharat (% ages)

Groups Descriptors
i

Strong Tasty Attractive Good Economy

Color Fragrance
Sex
Men (N=150) 70 65 60 70 80
Women (N= 180) 80 70 70 70 90
Income
Middle (N=200) 50 55 60 70 80
Lower (N= 130) 80 85 85 85 90
 Table 4.3 Preferences for Bharat (% ages)
Groups Yes No
Sex
Men (N=150) 80 20
Women (N=180) 90 10

Income

Middle (N=200) 60 40
Low (N= 130) 90 10

The discussion between the partners went on like this:

Sasi: Let us go in a phased manner. First, we will distribute in towns leaving rural areas to our agency.
It helps us to learn. Also, we do not anger the agency by terminating it abruptly. After all, they are
with us for the last three years. The most important thing is promotion. Let us reinforce identity
and push sales through advertising and consumer incentives.

Satyam : Why should we go slowly? I think a stitch in time saves nine!

QUESTIONS

1, Analyze the situation faced by Sasi Beverages.

2. Develop a plan of action.