Ambipur-Caselet

The Ambipur Brand

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The Ambipur Brand History The first Ambi-Pur product was launched in 1958 in Spain, created by Javier Merelo de Barberá Sanroma under the umbrella of Cruz Verde brand. Cruz Verde was a Spanish household brand selling a high variety of products, and even in the 2010s is a well known brand in Spain because of the large tradition of innovation and advertising. Cruz Verde was acquired in 1970s by the US multinational Syntex. Ambi-Pur differentiated from other Cruz Verde products and became a brand with cellulosic products "Permanente" and aerosols. In the late '70s and '80s the brand strengthening continued with new products, and a diversification of target uses. In 1984, Sara Lee Corporation acquired Cruz Verde, and since then the brand developed innovative air fresheners and started a roll out throughout Europe. It was the first brand launching a plug-in liquid air freshener, a toilet liquid rim block and a liquid air freshener for Cars. After West Europe, the brand expanded through East Europe, Asia, Japan and Oceania, and also in the US and Canada. Since 1990s to 2010, Ambi Pur has been among the top three leading air freshner brands in Western European countries. Procter & Gamble On 11th December 2009, Procter & Gamble announced the signing of a binding offer with Sara Lee to acquire the Ambi Pur brand for USD. 470 million. The acquisition of Ambi Pur strengthened P&G’s global leadership in Home Care and specifically Air Care by extending their reach to serve more consumers in more parts of the world more completely. Ambi Pur is a business of over $300 million in annual sales with a strong brand equity and complementary geographic presence to Febreze, particularly in Europe and Asia. With this acquisition P&G becomes the #2 Air Care Company in the world and Febreze/Ambi Pur becomes a P&G billion dollar brand, with potential to further grow. Ambi Pur also brings high-performance products and new technologies to our current Air Care portfolio, including car air fresheners, battery-powered air fresheners, toilet rim blocks and various non-energized air fresheners. Consumers will be delighted by a truly holistic product proposition and broader innovation. We see many opportunities to leverage these additional technologies and P&G’s core capabilities in consumer understanding, innovation, brand building, go-to-market execution, and global scale

About Ambi Pur: Ambi Pur has a strong track record of innovation and success in the freshener’s category: • Ambi Pur has been bringing enjoyable fragrances into homes since 1958 • Ambi Pur was the first brand of plug-in air fresheners, launching single perfume devices in 1992 and the highly successful 3volution in 2006 • Ambi Pur launched the first liquid rim block toilet freshener in 1997 • Ambi Pur was the first and most successful brand of liquid car fresheners, first launched in 2000 (predated by magic trees and non-liquid car fresheners)

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Home-Freshners

Category Snapshot

Definition of the category: Includes any products that can be described / observed as an air freshener, specially designed to remove odors in the air. It Includes products with scented solids that release a continuous fragrance, and fragrant aerosol liquids that may be intermittently dispensed for instant freshness. Inclusions: Solids and liquids including aerosols / sprays, Fabric Fresheners, Electrical / Battery operated deodorizers. Exclusions: Skin deodorants / perfumes, Toilet Bowl Deodorizers, Car Perfumes, Refrigerator deodorizers, scented Disinfectants and household cleaners, Cistern fresheners, Incense sticks, Candles, Dish deodorizers, Fragrance Oil. Sub-Categories : • Solids: Includes any products that can be described / observed as a solid non electrical tablet / block air freshen er, containing a concentrated scent, and specifically designed to remove odors and continuously fragrance the air. • Liquids: Includes any products that can be described / observed as non electrical liquid, containing a concentra ted scent, and specifically designed to remove odors and continuously fragrance the air. Includes air fresheners in aerosol cans / sprays. • Gels: Includes products that mitigate unpleasant odors in indoor spaces in a gel form. • Electrical: Rechargeable electric air-freshener – a device which is placed in a holder includes a case, a lid for closing the case, each provided with openings for the perfuming vapor from an aromatic substance, which, by means of temperature, releases aromatic essences it contains, situated inside the case. • Conc. Sprays: A device which contains a refill placed into a dispenser which is neither electrical nor battery oper ated. By using a press mechanism of the dispenser, the fresh air is released from the refill fitted into the dispenser. • Automatic Diffuser: A device is provided for regulating and diffusing fresh air introduced into rooms, notably rooms of dwellings and the device comprises a resilient strip positioned across a fresh air passage in an outer wall.

P&G Aircare Portfolio – Globally • • • • •

Car Aerosols Electricals Gel Based Placement devices Candles (not included in Aircare Category)

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The India Portfolio P&G Products NA

#

Pillars of Air Care Market

1)

Electrical / Continuous Energized Devices

2)

Car Air Freshner

Car Starter Kit (ST) Car Refill (RF)

3)

Diffusers (Continuous non energized Devices)

NA

4)

Candles

NA

5)

Instant Action Spray

Base Aerosol Air Effects Car Portfolio Variant

MRP

CAR STARTERKIT- Aqua

180

CAR STARTERKIT - Vanilla Bouquet

180

CAR STARTERKIT - Lavender

180

CAR STARTERKIT - Pacific

180

CAR Refill- Aqua

110

CAR Refill- Vanilla Bouquet

110

CAR Refill- Lavender

110

CAR Refill- Pacific

110

Home Portfolio Base Aerosol Aerosol Base Aerosol- Pink Flower Base Aerosol- Ocean Blue Base Aerosol- Aromatherapy Lavender Base Aerosol- Aromatherapy White Lilies

MRP

99 99 99 99

Air Effects Aerosol

MRP

Blooms & Breeze

199

Meadows and Rain

199

Linen and Sky

199

Lavender Vanilla and Comfort

199

Spring and Renewal

199

Sweet citrus and zest

199

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India Home-Air Category • Dabur is leading overall Home air care category • In Aerosol, Premium is the leading brand followed by Airwick (Reckitt Benckiser) and the 3rd biggest player is P&G (based on July-Sept’11 data)

Ambipur Key Concepts (in-store posters)

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Current India Ambipur P&L (2011) Current P&L (Figures in $ Million) Sales*

19

Cost Of Goods Sold

10.5

Advertising & Promotion Spends

7.9

SRA & Other Expenses (Salary & Overheads)

0.2

Profit Before Tax

0.4

*Sales refers to the Total Revenue (MRP Unit 1 * No. of Units + MRP Unit 2 * No. of Units) – Margins

Current Forms Volume & Gross Margins Aerosol spray

Air-Effects Spray (Avalanche)

Single Car Starter Kit

Single Car Refill

MRP

99

199

180

110

Current Volume Salience**

23%

20%

33%

24%

54%

22%

62%

Gross Margins

44%

**Volume Salience refers to the volume share of the different forms currently (if 100 units are sold, 23 are Aerosol, 20 Air-effects, 33 Car starter kit and 24 Car refills)

Throughput of Ambipur (Covers all existing forms) by store category Store Category

P&G Coverage (No. of stores)

Avg. Per Store Monthly Overall P&G Throughput (In INR)

Avg. Per Store Monthly Ambipur Throughput (In INR)

Hypermarkets

500

800,000

26,600

Supermarkets

1,000

125,000

2,660

Stand Alone Self Service Stores

2,500

135,000

3,990

Large Stores

8,000

35,000

798

Large Pharmacy

8,000

35,000

665

Medium Pharmacy

80,000

6,000

93

Small Stores

50,000

6,000

80

14,00,000

700

3

150,000

833

4

80,000

30,000

80

5,000

4,500

5,985

Small Pharmacy Wholesale Stores CAR Accessory Stores

P&G Coverage: Refers to the total number of stores covered in the store category Avg. Monthly per store throughput: Refers to the per store revenue per month in that category for P&G overall. (Throughput = MRP Unit 1 * No. of Units + MRP Unit 2 * No. of Units…. / Total number of stores in that category) Avg. Monthly per store throughput for Ambipur: Refers to the avg. Ambipur throughput per store in the category. (Throughput = MRP Ambipur Unit 1 * No. of Units + MRP Ambipur Unit 2 * No. of Units…. / Total number of stores

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Ambipur Distribution Center and Depot Data Supply Chain

Sourcing

Source Location

Lead Time

Car RF

Imported

Middle East Asia

60 days

Car ST

Imported

Middle East Asia

60 days

Base Aerosol

Local

Central India

15 days

Air Effects

Imported

US

90 days

* All imported products currently arrive at Chennai & then distributed * Lead Time is from Mfg location to nearest DC * Lead time of imported supply chain includes custom clearance time, stickering at CBW & transit to nearest Distribution Center

Ambipur Volume Supply Sub Brand Form

Variants Aqua

4

Lavender

4

Pacific Air

3

Vanilla

3

Aqua

10

Lavender

10

Pacific Air

8

Vanilla

7

Lavender

4

Blue Ocean

5

White Lily

4

Pink Flower

5

B&B

4

LV&C

4

L&S

2

M&R

2

Car RF

Car ST

Base Aerosol

Air Effects

Vol. (in AU*)

*AU stands for Ambipur Units Conversion Matrix (AU in no. of pieces)

AU

Pieces

Car RF

1

20,000

Car ST

1

10,000

Base Aerosol

1

15,000

Air Effects

1

15,000

Wt. Matrix

1 Piece

Wt in gm

Car RF

1

10

Car ST

1

15

Base Aerosol

1

300

Air Effects

1

300

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Ambipur Distribution Center and Depot Data DC Locations

Service

MP

Serves central depots

Haryana

Serves North depots

Tamil Nadu

Serves Southern depots

Current Depot Wise Forecast (in '1000 pieces)

Car RF

Car ST

Base Aerosol

Air Effects

15

15

20

5

Guhati

5

10

5

4

Cuttak

5

5

10

5

Patna

3

2

4

3

Ranchi

5

2

4

5

Delhi

20

67

15

4

Faridabad

15

20

15

20

Jallandhar

10

15

10

5

Jammu

5

5

5

5

Jaipur

5

5

10

3

Lucknow

10

45

15

15

Chennai

33

20

30

35

Hyderabad

15

15

12

15

Cochin

30

15

15

15

Bangalore

25

25

20

20

Mumbai

45

45

40

55

Goa

10

5

15

15

Ahmedabad

10

20

15

10

Indore

15

15

10

15

Kolkata

Cost Matrix for Ambipur Cost Matrix

Revenue ('1000$/AU)

Total Delivery Cost ('1000$/AU)

Gross Margin

Car RF

35

15

62%

Car ST

25

20

22%

Base Aerosol

20

12

44%

Air Effects

45

18

54%

Additional Ambipur Data Data Plant set-up cost in India Ambipur Line-Addition Maximum Ambipur Units(AU) plant capacity Volume per line extension Plant running costs per annum Capacity constraint in importing

Value $10 Million $2 Million 5,000 AU 500 AU $5 Million None

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Key Deliverables • Take the category from an existing ~$20 Million to $100 Million over the next 3 years. Explode the Category! • Take the Profit before Tax (PBT) from the existing percentage to 25% over the next 3 years.

To achieve this, we need to capture market share while exploding the Air Care Category in India In order to help you streamline your execution of the glide-path to $100 Million, the Multi Functional Team has put forth the critical questions to answer in order to achieve the desired results. You may explore other areas as well which will help you achieve this target.

1. Consumer & Market Knowledge (CMK) •

Landscape Assessment o What is the potential size to which category can grow to in next 3-5-10 years and how to accelerate this growth? o What share of this category can P&G gain? o Landscape understanding required in terms of • Current landscape of overall FMCG in India • Landscape of air freshener category in India and landscape of the category globally. • Competition landscape • Who are the consumers to target o What are the different market segments? o Which segment should you go after and why? o What are the needs to that segment that you want to fulfill? o Who is your prime prospect? o How much awareness, trial needs to be driven to achieve Volume and financial goal? o Is the chosen segment sufficient to drive the Business goals or does it needs to be broadened? • What is the product portfolio that can help you win in the market o Are current offering sufficient or we need to launch more pillars of the category with different benefit? o What is the full line up required to win in the market? o What are the different sizes, price points that P&G needs to play in market?

2. Marketing (MKT) The most critical marketing deliverable is to move the category from ‘Good to have’ products to ‘Must have’ for both car and home categories in the mind of the Target Consumer. • To achieve this, we need – Marketing mix (4P’s i.e. Product, Price, Place and Promotion) – Communication Strategy • Consumer Insight - What is the consumer insight that should be the focus of communication & copy? • Big Idea / concept • Benefit • Touch-points for execution of communication strategy • What is the Communication Plan? o What is the consumer insight that should be the focus of communication & copy? o Insights on driving awareness, trial, consumption o What messages and closure claims should be there on different touch points? o What are the shopper insights that can help CBD ensure the right in-store execution in market? E.g. where should the product be placed on shelf beside which categories, what are the type of stores to target where shoppers will be more receptive, etc

•

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3. Customer Business Development (CBD) • For an impulse purchase driven category it is important that brand get prominent location in store and has fullrange available for shopper delight. What should the in-store presence look like for the consumer? o Where should it be placed (next to which category / s etc.)? o How should it be placed (Backlit, unique shelf, neck tags etc.) • Define the channels (Traditional / non-traditional) that we should deeply focus on to achieve the objective with justification and winning plans (Distribution & Visibility) for the channel? What are some of the current unutilized / underutilized channels that P&G should explore if any and define the winning plan (Distribution & Visibility) for the channel • What the needs of these channels in terms of credit / margins etc. What is the top unmet need for these channels • Basis the channels that you identify as the focus areas, what should be the ideal assortment of SUKs by from the portfolio per store (high-end retail, regular retail, Kirana, non-traditional channel etc.)? Store Category

Form

SUK1

No. of units

SUK2

No. of units

SUK3….

• Another opportunity that emerged with the merger of Ambipur into P&G portfolio was the unique channel for Ambipur CAR range- The car accessory / service stores which are a huge source of sale for Car fragrances. P&G tapped into this network via having specialized car sellers who cover these stores. What the needs of this channel are in terms of credit/margins etc and how does Ambipur benchmark versus them? What is the top unmet need for these stores from P&G? Currently P&G offers close to 28% margin and weekly credit to the top CAR stores. • What are the promotions that this category should be doing to drive penetration and loyalty?

4. Information & Decision Solutions (IDS) What should be the digital marketing strategy for Ambipur? • What is the business objective (sales or relationship or just awareness ) • Where do my consumers spend time – magazines, internet, mobile communication etc? Identify one channel that will be the breakthrough touch-point digitally. • How to measure the effectiveness of my digital marketing program i.e. if your spend is actually leading to Sales (direct business measure) / awareness(indirect business measure) for the brand. Which analytics solution will help monitor the Aircare business, and close gaps if any between target and actual share? • What are the best metrics to understand what is happening in my business (e.g. size of business, projected growth, market share, sales trend) • What are the best metrics to understand why it is happening (e.g. are my inventory levels healthy, what is the coverage trend , price index vs. competition etc) • What metrics will help us close the gap (e.g. what categories drive sales, grow value ahead of volume, are current strategies working or should I change them , incentive on golden stores) What should be my “technology enabled” go to market strategy? See appendix A for the existing distributor architecture. • What is the one breakthrough use of technology which will enable P&G to take this business to the next level (reach more retailers at lower cost/less effort, improve the efficiency of the sellers etc.) e.g. the hand helds used by P&G for the sellers in the market currently.

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5. Product Supply (PS) • What is the demand forecast (Base + Initiatives). Base refers to the base needs of the market and Initiative refer to the promotions etc. that are run which involves samples of product to be available • Total Delivery Cost (TDC) effectively refers to the cost of delivering 1 Ambipur Unit (Refer to data for definition and conversion rate) of the product. What is the right TDC to deliver the gross margin targets • What is the Production Innovation needs/requirements (Packaging design, features, performance etc) • How will you do the supply planning so as to ensure that the demand forecast is services effectively • Does the Supply Network design facilitate the agility needs (Plant-DC-Depot-Customer-Retailer-Shopper Consumer)? • What Capacity to Demand ratio would we maintain - Glidepath on Capacity • What strategic choice do we need to make in terms of sourcing: Import forever or manufacture internally. At what point should we start building capacity? • Which contractor has the basic technical knowhow and the leadership commitment for quality, safety norms? Identify the contractor and structure financials • Assuming we decide to install capacity, where should the facility should be set up? Which is the most ideal location? Which location gives the best financial value to the company? Justify the location decisions

6. Finance & Accounting (F&A) • Define Market Size of Aircare in 2015 a. Base Split between the forms b. Current Market Size c. Growth trend by form (Car / Home) • What are the guiding principles to help create glide-path to achieve target P&L. • Build a P&L glide path to 2015, showcasing the bottom line and margins we would be making based on the portfolio and 4P strategy that we adopt • Price Setting Glidepath for FY 2015 – based on competitive pricing/trade terms and product portfolio choices that we have made • Distribution of spends between trade spends and media spends keeping in mind the portfolio strategy we have defined