GREATBREAD : THE ROAD AHEAD

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Day 1

Sridhar is a young MBA from a reputed business school. He joined a small family-run
business group that makes and sells Greatbread. Greatbread is a premium bread brand.
Sridhar wanted to handle a challenging marketing assignment and Greatbread promised
to be one. He met Mr. Rao, the owner and managing director on the first day. Mr. Rao, a
55-year old veteran who had been in the business for over 30 years was the soul and
spirit of A.C.Bakery, a household name in Hyderabad. Though A.C. Bakery was itself
doing well, it had a value-for-money connotation. Mr. Rao wanted to introduce a
completely new concept in bread that was hygienic and up-market. Thus Greatbread was
born in 1997 as a new brand, unencumbered by consumer perceptions about the parent
brand A.C. Reproduced below is a conversation of Sridhar with Mr.Rao on the first day
of his job.
Mr. Rao : Welcome Sridhar! I am glad you decided to join us at Greatbread.
Sridhar : Sir, thank you. I am looking forward to a great time marketing Greatbread. I
would like to know more about it from you.

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Mr. Rao : Sridhar, as you know we are a family run business. We have been in the
bakery business for quite some time. To be frank, things are not rosy as they stand. Only
last week, I had a meeting with our senior managers. Some serious thinking is needed to
turn the tide.

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Sridhar : Sir, what is the problem?

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Mr. Rao : According to our production guys, there has been a steady decline in the
monthly production of Greatbread. On comparing this months sales figures of
Greatbread with the corresponding month last year, I find that there has been a drop of
over 30%.
Sridhar : Was that due to production problems?
Mr. Rao : It doesnt look like. Demand for our bread is drying up.

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Sridhar : Why?

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Mr. Rao : Sridhar, 3 years back when we decided to get into the bread market, we
wanted to give a whole new concept of bread eating to Hyderabad. It almost looked like
we succeeded.

Sridhar : What was the new concept?

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Mr. Rao : Greatbread was projected as a bread as good as food. We wanted the
consumers to use it as a substitute for food. So we made it wholesome with vitamins and
other nutritious additives. Bread in South, has been treated at best as a breakfast or at
worst as sick mans food. We wanted bread to have a more healthy and nutritious
connotation. We offered Greatbread in many sizes. We also offered variety in products
through toasts, rusks, buns etc. Our strength was our quality. We took utmost care to see
that our bread is delivered fresh to customer. We replaced any bread left unsold with the
retailers for four days. To showcase the bread, we provided retailers with specially
designed dispensers. It was priced higher than our competitors, but we were confident
that our customers were getting their moneys worth.
Sridhar : What is the situation in the market right now?

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Mr. Rao : Doesnt sound particularly good. Greatbread seems to be loosing out on the
premium image it enjoyed so far. The other day, I was talking to the retailers. Some of
them are not too keen on Greatbread.
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Sridhar : Sir, can you tell me something more about our retailer policy?
Mr. Rao : We sell Greatbread only through a few selected shops and supermarkets. It
cannot be made available in every other shop in the market, because we are keen to
project its premium image. And then there are institutional buyers and a few franchisees.
But as I said, the important issue is that the retailing community is steadily losing interest
in Greatbread. We started with 150 retailers in 1997. We have just about 100 now. One
reason could be that, we are not paying them as much retail margin as other bread
manufacturers. Recently, we commissioned MRG (market research group) to present a
detailed report on the bread market. Their report says that besides other things, there is a
problem with the motivation level of our sales force as well.
Sridhar : What is the update on our competitors?

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Mr. Rao : I believe competitors have closed the gap, both in quality and reputation. I
suggest that you meet Mr.Ravi, our retired marketing manager who still assists us as a
consultant. He can provide you with insights not just on competition but other issues as
well.
Day 4:

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Sridhar pays a visit to Mr. Ravi after going through the contents of the MRG report.
Sridhar : Hello Mr. Ravi. May I disturb you?
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Ravi : Yes, of course. Come, have a seat.

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Sridhar : I had a meeting with Mr. Rao last week and he mentioned some of his concerns
about the performance of Greatbread in the market. I have gone through the contents of
the MRG report also. But I thought your inputs could be very valuable. To begin with, I
heard that Greatbread was launched as a "complete food". I was curious to know the
philosophy behind it?
Ravi : Yeah, we identified a gap in the market for wholesome bread, which ensured
nutrition, softness, taste and hygiene to the consumer. Besides, our aim was to expand the
market for bread so that it was not seen as a breakfast item only. We tried to sell our
bread as Food. It was almost selling a concept. The advertising campaigns highlighted
this. We primarily used the print media. To create curiosity among the consumers, we
had teaser advertisements. These in turn lead the consumer to half-page, coloured
informative ads, which emphasised the nutritive aspect of Greatbread. Also, we used
display mobile vans, banners and leaflets to support our primary campaign. Just prior to
the launch, we held a press conference wherein the product was introduced to the media.
Sridhar : Anything done at the time of launch to ensure visibility?

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Ravi : Oh yes! We distributed free samples of our bread through young boys and girls
sporting T-shirts and caps carrying our logo. We also did a promotion for the first four
days of the launch and distributed our bread free in selected outlets to encourage
consumers to switch to Greatbread.
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Sridhar : Did it get the desired response then?

Ravi : Undoubtedly! Our campaign had a very high recall. The advertisements were also
rated highly creative. They were successful in giving a premium image to Greatbread.
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Sridhar : Were our prices also higher than the general market standards?

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Ravi : Yes. We priced Greatbread at a premium of about 25%, because our product
quality was superior. Also it would have been unsustainable to price it anything lower
than that. Although there were local brands priced much cheaper than us, we didnt want
to compete with them since we were targeting a different segment altogether.
Sridhar : How was the retail network established and strengthened?

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Ravi : Since our coverage is limited to Hyderabad, we decided to have a small retail
network, which we could service through vans. The dealers were chosen stringently on
criteria like upmarket ambience, location of their outlets, reputation etc. Once they joined
our fold we took good care of them. We invited them for periodic get-togethers. We
provided them with special dispensers, compatible with Greatbread's special packaging
The packaging ensured better shelf space management and larger visibility for the

product. But our packaging is not unique any more. I believe Evergreen has introduced a
similar special packaging and is sitting pretty besides Greatbread in our dispensers.

Sridhar :This does give me a fair idea of Greatbreads launch strategy. But there is some
variance between what we planned and what we ended up with. The MRG Report says
that we started with up-market retailers. I do not think our retailers are all up-market now.
Ravi : What else does the report say?

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Sridhar : Well, to start with, the report estimates that Greatbreads consumption in
Hyderabad is around 1.5 to 2 lac loaves per month. There is, of course, some amount of
seasonality in demand.
Ravi : From the past trends, the consumption and hence the production goes down by
about 30% during the rainy season. It seems that people here prefer to use bread
substitutes rather than venture into the rain to buy bread.
Sridhar : The report also mentions that people in Hyderabad prefer the softer, white
bread unlike people in Tamil Nadu, who prefer the harder, crisper version, similar to
rusk. It segments the market as lower, middle and premium based on the prices. There is
a large number of players in the market, prominent among them being Evergreen. The
report also refers to the unorganised sector, predominantly the local bakeries that make
their own bread. When we launched Greatbread we were alone in the premium segment.
Today there is Evergreen in this segment with its whole range. Besides, the Food World
chain has launched its own brand of bread. The premium segment seems to be getting just
as competitive as any other. Greatbread is loosing its sheen. I think we diluted its
premium image by offering a popular variant (Greatbread for you) at 9 Rs. (see
Exhibits A and B)
Ravi : What does the report say about competition?
Sridhar : The report concentrates on the most important competitor Evergreen. As I
mentioned before, Evergreen has successfully introduced a large variety of products
ranging from Sandwich bread to Milk Sweet. Some of them are in direct competition
with Greatbread in price and quality. Apart from this, Evergreen has a range of bakery
products from buns to rusks.
Ravi : I believe Evergreen is giving us a run for our money. But then, lets not forget that
they are nearly hundred years old and have operations in hotel, restaurants, grocery,
besides bakery. We had to establish a wholly new brand called Greatbread.
Sridhar : Part of our problem seems to be lack of advertising and promotion in recent
times. The report says that initially Evergreen bread wasnt known for its quality, but
they have gradually improved it to catch up with us. In addition, they have introduced
attractive special packaging that bears a strong resemblance to our brand. Therefore
Greatbread no longer looks unique. One of their strong brands is the milk bread (see

Exhibit A) that caters to the health-conscious consumer on account of its nutritional

value. Besides, their claim of no chemical preservatives in bread seems to have struck a
chord with the consumers. They insist that their retailers keep the bread for a maximum
of one day though the shelf life is about four days. The catch is that Evergreen does not
replace the unsold stock everyday. This may create problems for them.
Ravi : How is their distribution network currently? During my time, that was one of their
strengths.

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Sridhar : It still is! They have a 1500 strong retail network in the city, which is supplied
bread through their delivery vans. These dealers and franchises (12 including
Vishakhapatnam) are spread all over the city and the suburbs. For places that are not
accessible by vans, they hired small distributors who deliver bread through auto
rickshaws and bicycles. A twelve member strong sales-force visits these retailers on a
regular basis to attend to their problems.
Ravi : But I dont see them advertising all that much. Are they leveraging their brand
image created over the years or is it something else?

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Sridhar : The report does mention that Evergreen does not have a big advertising budget
though they do some promotional campaigns, primarily during the launch of a new
product. They seem to be spending money on other things like dealer margins. More and
more dealers are eager to sell their products. In fact, their credit terms of 30 day payment
period is a straight winner. Our terms of payment-on-delivery suffer by comparison.
Also, Evergreen outlets seem to be expanding very fast in Hyderabad. Well, our plate
seems to be full. Thank you very much for your time. Greatbread needs some action. I
guess, sooner than later.
QUESTIONS

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a)

Discuss the elements in the marketing mix for Greatbread and Evergreen by
preparing a comparison table for the two? (Refer Philip Kotler, Millenium
Edition, Fig1.5, p15 for the marketing mix framework) (See page Fig 1.5, p16 in
the 11th edition).

b)

Give specific recommendations to Greatbread for improving the elements of its

marketing mix?

c)

Is Greatbread a success or failure? On what basis will you judge that? Further, if
you want to judge the success or failure of Greatbreads promotion campaign (e.g.
free samples, T-shirts) how will you do that?

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Evergreen Range: Hundred years young

EXHIBIT A

Bread Type

Price (Rs.)

Legend on the packet

Wheat Bread (400gm)

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For everybody

Milk Bread (400gm)

9 Hyderabad
10 Outstation

Tasty with Vitamins, food

for all

Fruit Bread (400gm)

9 Hyderabad
10 Outstation

Same as above

Sandwich Bread (400gm)

8.50 Hyderabad
9.50 Outstation

Same as above

Sandwich Bread (800gm)

17.75 Hyderabad
19.00 Outstation

Same as above

Dakshin Delight (400gm)

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Evergreen Jowar Bread (400gm)

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Bread with Special

Packing
For the best bread

Greatbread Range: It is food, not bread

EXHIBIT B

Bread Type

Price (Rs.)

Legends on the packet

Real Fresh (400gm)

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Nutrition &Vitamins
Milk Bread

Milk Bread (200gm)

5.50

Bread as Food

Jumbo (800gm)

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Milk Bread

Greatbread for you (400gm)

Non Milk Bread

Tall Bread

10.25

Bun (50 gms)

10.25

The first draft of this case was written by PGP students Vivek Singh, Nitin Shukla, Subir
Kohli, Vikas Chandak, Vivek Rana (2001-2003) under the guidance of Prof.s P.N.
Thirunarayana and Y. L. R. Moorthi, IIM, Bangalore. It was subsequently modified to its
present form.