Revamping Rasna - A Marketing Overhaul Saga

The Making of Rasna Contd...

The consumers soon began turning towards colas, fruit juices and other 'ready to drink' products. At the same time, a large number of other national and regional players entered the market. Reportedly, Pioma found it extremely difficult to hold on to its market shares and sales figures. According to many analysts, the decline in Pioma's fortunes was mostly of its own making, as it failed to understand the shifting preference of the consumers towards ready-to-drink preparations. They pointed that Rasna ignored the changing trends in the market. Variations were launched only when competition had strongly established itself. Moreover, Rasna failed to sustain its stronghold in the lower-income segment as it did little to sustain the brand's popularity among the consumers (after its initial promotional exercises).

Rasna Wakes up to the Challenge

Pioma finally decided to extend Rasna's brand portfolio and launched a pre-sweetened mix-and-drink product in 1996. Targeted at the upper end of the market, Rasna International was a nutritious and vitamin-enriched version of the regular Rasna SDC version.

This was followed by the launch of Rasna Royal, positioned as a vitamin-enriched version of Rasna. It was targeted at health-conscious consumers who did not prefer Rasna SDC on account of its synthetic image (that is usage of synthetic colors and artificial flavors). These two products were priced at the higher end, as against the 'low price' policy followed by Rasna for the other products.

The sales of Rasna Royal did not pick up from the very beginning. Analysts attributed its failure to the strong positioning of Rasna SDC as a cost-effective drink. While consumers were willing to bear the inconvenience of preparing the SDC version on account of its lower cost, they were unwilling to do so for Rasna Royal as they had paid a higher price for it (Rasna Royal was priced Rs 4 higher than the SDC version). Eventually, the company had to discontinue Rasna Royal. On the other hand, Rasna International became quite successful, primarily because it did not need any preparation. Commenting on the analysts forecasts that Rasna International might not succeed given the high pricing of the product, Khambatta said, "Contrary to common perception, Rasna International has done exceedingly well and has created a market segment for pre-sweetened fortified soft drinks."

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Case Details

Case Code : MKTG025
Themes: Marketing Mix
Case Length : 11 Pages
Period : 1995-2002
Organization : Pioma Industries Ltd
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Food, Beverages and Tobacco

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