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Aayushi Shah & Akshit Raycha

Zydus Wellness

2011
Journey of Sugar free from an Anti-Diabetic clinical drug to an table top sweetener.

ACKNOWLEDGEMENT

Writing this acknowledgement has provided me with the great opportunity to note the enormous help & guidance given by various persons whose work was note worthy & cant be diminished from my mind & soul. I would like to mention name of some persons because of whose support & co-operation, I was able to complete this project. We are grateful to Mr. Pankaj R. Patel for providing full support and having a healthy interaction that to at short notice. We would also like to thank Mr. N.K. Sinha, Manager, Human Resources, Zydus Cadila, Mr. Jatin Christie who allowed us to take up this project. We would also like to thank the entire staff of Zydus Cadila for their kind and keen interest shown.

Contents Introduction: ................................................................................................................ 3 Sugar Free Gold ...................................................................................................... 4 Sugar Free Natura ................................................................................................... 4 Sugar Free D'Lite - Ready to drink .......................................................................... 4 Sugar Free D'Lite - Powder drink ............................................................................ 4 COMPANY BACKGROUND: ...................................................................................... 5 SUGAR FREE: THE BRAND JOURNEY .................................................................... 5 Phase I (1988-1992)................................................................................................ 5 Phase II (1993-99)................................................................................................... 6 Phase III (Post-1999) .............................................................................................. 6 The Revamp: .............................................................................................................. 7 Extension of Distribution Network: .............................................................................. 8 Advertising: ................................................................................................................. 8 Market Opportunity: .................................................................................................... 9 Phase IV: Brand Extension and Sub-brands ........................................................... 9 Latest News: ............................................................................................................. 10 1) Zydus Cadila re-brands Sugar Free as Sugar Free Gold................................ 10 2) Zydus Cadilas Baddi plant gets USFDA nod.................................................. 10 References: .............................................................................................................. 12

Introduction: Sugar Free, a name synonymous to the sugar substitute category, is the leader in India with 81% Market Share.

It's a nutritious, safe and ideal low calorie sugar substitute, giving you the sweetness and taste of sugar but with negligible calories to worry about! Each teaspoon of sugar gives you 20 calories without any nutritive value. Sugar Free gives you the same taste of sugar but with negligible calories. Wherever you think of sugar, think Sugar Free. Brand portfolio: Sugar Free Gold: Your healthier sugar alternative is made from Aspartame - a protein derivative. Sugar Free Gold can be added to tea, coffee, milk, cornflakes, nimbupani, fruit juices etc. So now you can enjoy sweetness and also keep a tab on your calorie intake. Its ideal for health conscious, overweight and diabetics. Visit on: (www.sugarfreegold.net) Sugar Free Natura: IMade from sugar tastes like sugar, without the useless calories of sugar. It contains Sucralose, the latest international zero calorie sweetener. You can now replace sugar virtually in any preparations from table top applications to desserts, sweets, mithais like gajar halwa, mixed fruit custard, ice cream, kheer etc. Visit on (www.sugarfreenatura.com) Sugar Free D'Lite - Ready to drink: If you thirst for something lite and healthy, Sugar Free D'Lite is the drink for you. This fizzy and refreshing drink is fortified with electrolytes. And whats more? Its 99% calorie free! So now take the plunge in the exhilarating tastes of Sugar Free D'Lite Visit us on (www.sugarfreedlite.com) Sugar Free D'Lite - Powder drink: A refreshing, low calorie healthy drink. Its tasty, nutritious and with only 10 calories. That's approximately 85% lesser calories than other sugar based drinks. Fortified with natural fruit powder, energy boosters (electrolytes) and Antioxidants (Vitamins A, C & E) which help you boost your immune system and stay healthy. Every sip is a pure delight! Visit us on (www.sugarfreedlite.com/dlite/)

In July 2008, VP Marketing (Consumer Products Division) of Zydus Cadila Ltd. Had called a meeting of his team and the advertising agency team handling the Sugar Free campaign to review the Television commercial (TVC) campaign to be aired during August 2008 for the brand Sugar Free. He needed a quick appraisal as the

proposed campaign was a major shift from that of the past. He welcomed everyone and said, Gentlemen! For our recent campaign, we have roped in Bipasha Basu as a celebrity endorser for the brand. Let us look back and briefly see the journey the brand has taken so far! We need to review TVC in light of the changes in consumer behaviour, competition, and broader marketing environment and also plan for the future course of action.

COMPANY BACKGROUND: The erstwhile Cadila Laboratories was founded in 1952 by Shri Ramanbhai Patel, who had started his career as an academician at the L M College of Pharmacy. He was later joined by his friend, Shri Indravadan Modi. The company evolved over the next four decades and became Indias second largest pharmaceutical company. In 1995, after a vertical split in the operations, Cadila Healthcare came into being under the aegis of the Zydus group. With Rs. 2,500 million turnover, Zydus Cadila had the rights to manufacture and market the Sugar Free brand. The group was spearheaded by Mr. Ramanbhai B Patel as the Chairman and Mr. Pankaj R Patel as the Managing Director. The group is headquartered in Ahmedabad in the state of Gujarat in Western India. Today, Zydus Cadila, an integrated global healthcare company, is an innovative, research-driven pharmaceutical company that discovers, develops, manufactures, and markets a broad range of healthcare products. The groups operations range from API (Active Pharmaceutical Ingredient) to formulations, animal health products, and cosmeceuticals. The group has global operations in four continents spread across USA, Europe, Japan, Brazil, South Africa and 25 other emerging markets. 1 The Company has more than 200 products and has a 1,000-member strong team of research professionals. With a specialized field force of over 3,000, it has one of the strongest distribution channels in the industry, reaching out to 1,00,000 chemists and serving over 2,00,000 doctors including physicians, specialists and superspecialists. In 2006-07, the company posted a turnover of over Rs.19,000 million. Zydus Cadila is supported by a team of over 10,000 people worldwide, comprising professionals, research scientists, medical advisors, and workers and aspires to be a leading global healthcare provider with a robust product pipeline and a research-based pharmaceutical company by 2020.

SUGAR FREE: THE BRAND JOURNEY

Phase I (1988-1992) In 1988, Sugar Free was launched as an ethical drug by the Ethical Drug Division of the Company and promoted through doctors for diabetic patients. All this while, it was promoted using below-the-line promotions as the Law did not permit it to be sold

as an OTC (Over the Counter) product. At that time, excise duty was levied on cost of production and hence the brand had a reasonable gross contribution. In early 90s, excise was levied on MRP which substantially reduced the gross contribution of the brand. In 1987-88, the Cosmetic Division marketed the Everyuth brand of face cream which was a huge success. Phase II (1993-99) In 1993, Sugar Free moved to the Cosmetic Division and was promoted as an OTC product as the changes in the Law permitted its sale as an OTC. In 1993, the brand moved to the Consumer Products Division having other cosmetic brands. Phase III (Post-1999) Till 1999, packaging was in blue and white having a very clinical look; and the shape of the package was oblong. Thereafter the brand underwent a complete makeover. The colour of the pack was changed to a vibrant yellow with the idea that it would stand out in the shelves of the dull, dark retail shops. Around that time, yellow Zen, introduced by Maruti, was in vogue. The shape of an hour glass was chosen for the pack of this low-calorie sweetener to indicate fitness. The brand was thus revived with a new look, new focus, and a change in strategy.

The Revamp:

Around the same time, one of the senior executives of Zydus Cadila, who was travelling in the North by train, observed his co-passenger using Sugar Free in his tea. He was quite excited to meet his customer; and so, he greeted him, introducing himself and his company. The co-passenger got extremely annoyed and immediately put the Sugar Free pack in his pocket with a stern expression on his face! Back in his office, the executive narrated the incident to his colleagues and they all started thinking about it. Through observations and personal experiences, there was a striking revelation that no diabetic patient wants to accept the fact that he is suffering from the disease nor does he like others to know about it. The company through in-house consumer studies gained an insight into the consumer behaviour. This incident led the marketing executive to position the product not for diabetic patients but for the health-conscious urban dwellers.

Extension of Distribution Network:

After the revamping of packaging, the company decided to expand its distribution not only through chemists but also by making it available next to sugar in the grocery stores. A special, low-cost display (a plastic strip which can be put on a wall with a Sugar Free pack) an attractive hamper containing a Sugar Free pack was used in the grocery/kirana stores to attract the attention of the customers. Such an attractive display which did not occupy much space was more than welcomed by grocery stores. A promise to take back the stock of unsold Sugar Free, gave the company an entry into a new unconventional channel with the initial coverage of 50,000 outlets. Simultaneously, it was also available at the chemists as earlier it was marketed as an ethical drug and thereafter as an OTC item. Typically, a chemist with 20,000 SKUs would keep several brands but with less number of multiple units of the same brand whereas a typical grocer with about 6,000 to 8,000 SKUs was willing to keep one fast moving table-top sweetener and was willing to purchase multiple units of the same. As the brand was supported with advertising investment and awareness was already created for a table-top sweetener, retail stores were willing to stock. This strategy was also more in line with the new company philosophy of moving the brand having medicinal touch to the Fast Moving Consumer Goods segment like other health foods, e.g., Bournvita, Horlicks, etc. This allowed the company to extensively distribute and have the first mover advantage as no competitor was able to make inroads into grocery/ kirana outlets. This also resulted in reducing the channel power of the chemists. The company had a policy of supplying the stock once in 15 days or once in a month. Initially, they covered the top 200-300 cities, and subsequently 800 towns (population of 50,000+), in the next phase. With all these concerted efforts, the brand attained a turnover of Rs. 79 million in 2000.

Advertising:

In order to create awareness for Sugar Free as a table-top sweetener, the company decided to advertise on TV. Due to severe budget constraints, the ad agency bought spots in Aaj Tak -- a new news channel where spots could be bought at a very attractive rate. The 9/11/2001 incident increased the viewership of the news channels to a great extent which substantially increased the awareness about Sugar Free as a table-top sweetener in a very cost-effective manner. Through advertising they were able to create consumer pull and the grocery stores were more than willing to keep one brand of the artificial sweetener with the increasing health consciousness among urban dwellers. In 2002, with the expiry of the patent of Asparatame, a major ingredient of artificial sweetener, it was possible to source it cost-effectively which provided good contribution margin. Being a bulk buyer, the company was able to negotiate the raw material prices which also enabled the company to invest in advertising/above the line communication to promote it as a lifestyle product. It was estimated that there were 12 million fitness-conscious people residing in metros and big cities. Hence it was decided to promote it as a lifestyle product for the health-conscious calorie watchers. Thus Sugar Free was promoted as a substitute for two teaspoon of sugar containing 40 calories. The Cricket World Cup (2003) event also increased the viewership of the news channels and the use of Harsha Bhogle and Raveena Tondon as endorsers in a TVC further helped in increasing the awareness of the brand.

Market Opportunity:

It was seen that in the higher income urban households, particularly in case of adults with sedentary lifestyles and an indiscriminate consumption of sweetmeats and confectionery, incidence of Type II late onset, post-30 years diabetes and hypertension was quite high (as opposed to Type I infantile diabetes). One estimate projected Indias diabetic population to go up to 75 million by 2025. Also increasing health consciousness among urban households provide a good market potential for Sugar Free. Phase IV: Brand Extension and Sub-brands In 2004, Sugar Free Natura, a brand extension, was introduced. It was made from Sucralose, an extract from sugar, which being heat stable, allowed culinary applications.

Latest News:

1) Zydus Cadila re-brands Sugar Free as Sugar Free Gold Zydus Cadila has undertaken a re-branding exercise for its aspartame based sugar substitute, Sugar Free, which will henceforth be called Sugar Free Gold. Sugar Free holds a 72 per cent share of the Indian sweetener market. Elaborating on the brand, Jyoti Shiralee, General Manager-Marketing, Consumer Division, Zydus Cadila, said, Sugar Free is the oldest and largest selling sweetener and is a market leader with 72 per cent share. We essentially want to re-emphasise our leadership position and hence, have renamed Sugar Free as Sugar Free Gold. We have been also doing well in the growing Sucralose based sweetener market with the launch of Sugar Free Natura three months ago. With Gold we expect to scale new heights. A new television commercial has also been launched for Sugar Free Gold to emphasise its fitness proposition. The advertisement has been created by Rediffusion. While earlier, the communication was targeted generally at fitness-conscious people, in the light of the new launch, the team has strategically split fitness into exercise and diet. Hence, Sugar Free Gold will operate specifically in the area of fitness and lifestyle (and not diet/ food/ indulgence). The advertisement rollout plan is a high intensity one-month plan starting from March 15. Explaining the rationale of the commercial, Gaurav Bhatia, Client Servicing Director, Rediffusion, said, The audience we are talking to are passively conscious of their fitness and as they generally lead a stressful life, exercise usually gets neglected. Sugar Free Gold thus offers them a first step to exercising. The ad aims to tell them to make a start with Sugar Free Gold. However, it is not a substitute to exercise, but this is the least one can do about their own fitness. Though Shiralee did not divulge the exact marketing spends on the brand for the year ahead, she said that the company would definitely spend more than it had been spending so far. Since it already is the market leader, the real growth target for the brand will indeed be to grow the market and attract more consumers to the product.

2) Zydus Cadilas Baddi plant gets USFDA nod

Press Trust of India / New Delhi July 25, 2011, 15:06 IST Drug firm Zydus Cadila today said the American health regulator, US Food and Drug Administration (USFDA), has given the green signal for commencement of drug supplies to the US from its formulations plant at Baddi, Himachal Pradesh. With the approval in place, the plant -- which currently caters to domestic and emerging market requirements -- will commence supplies to the US, Zydus Group said in a statement. Commenting on the development, Zydus Cadila CMD Pankaj Patel said: "The USFDA approval for the Baddi plant enables us to open up an additional resource to cater to the growing needs of our US business." The company's Baddi plant was commissioned in 2004 and manufactures oral solid dosage medicines, including hard gelatin capsules and tablets.

References:

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http://www.zyduswellness.in/sugarfree.html www.sugarfreegold.net www.sugarfreenatura.com www.sugarfreedlite.com www.sugarfreedlite.com/dlite/ http://www.business-standard.com/india/news/zydus-cadilas-baddi-plant-getsusfda-nod/142193/on http://www.exchange4media.com/news/story.aspx?Section_id=3&News_id=2 0252