Case study solution of international marketing case study.

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Essel Propa
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2. Executive Summary
The Essel Propack case study talks about an Indian company Essel propack which is the world’s largest
laminated tube manufacturer. It’s a low key company. The dominance is such that in laminated tubes
used for tooth pastes and pharma products 1 in 3 tubes are manufactured by Essel.
Essel is also the pioneer in India for a shift from aluminum tubes to plastic tubes that are more durable,
soft and add value to the product through enhanced shelf appeal. Traditionally the requirement for
laminated tubes is concentrated in USA and Europe but emerging economies are catching up.
The product is a niche one and is marked by high growth and high margins. The conversion from
aluminum to plastic tubes has a potential of 5 billion tubes. The major customers are B to B market like
P&G and Unilever.
Essel has been aggressively moving with global expansion by various mergers and acquisitions. The
competition is very low with less than 6 players in the market. The organization has JV’s in Egypt,
Guangzhou, Germany, Switzerland and Britain. Essel uses top of the line technology with the
introduction of PP340 which has cut costs by 30%.
Essel has the following contracts:
1. Single largest contract of 0.5 billion tubes from Unilever in China.
2. P&G in north America
The challenges faced by the industry are:
 Few dominant players forcing small players to merge with large ones
 Lower margins
 Constant R&D

3. Key Question
Q1. What are the reasons that led Essel Propack Limited to enter international market?
These are the key reasons that led to Essel in entering into international markets:
1. Growth and Profit:
This is the driving force behind Essel’s decision to venture out of India. Essel saw an opportunity as
mentioned in the executive summary of little competition in the international market and seized the
opportunity.
2. Risk Mitigation
Essel Propack wanted to mitigate the risks by expanding into new markets. Also the developed nations
are more open to accept new products like plastic tubes. Indian markets are more risk averse.
3. Access to imported technology
Another motivation would be to access new and better technologies that may not be available in India.
A prime example would be PP340 which has brought down costs by 30%.
4. Spreading R&D costs
The R&D costs that Essel Propack incurred in R&D of say plastic tubes would be spread out to various
geographies like USA and keep it sustainable in other markets.
5. Little competition
Essel exploited the fact that there were only 6 international players and there was sufficient space for
expansion. Moreover once the dominance is established, they were able to influence the local industry.
Q2. Find out the key reasons for the success of EPL in the international market.
The key reasons for EPL’s success are:
1. Constant R&D
EPL constantly invested in R&D and better equipment and technology. The case at hand
indicates to a new technology i.e. the plastic tubes. EPL also invested in new machines which cut
cost.
2. Lesser competition from small regional players
In the integrated laminated tube international market, there are less than a half a dozen player in the
segment and there is a scope for dominance and aggressive expansion.

4. 3. Shift in Demand
There has been a shift in the demand by the market with more requirements of the plastic tubes.
Though the demand has been there in the emerged economies but with increasing acceptance of the
plastic tubes in the Indian markets there is also a high demand for the new product in India. EPL is the
pioneer in India and market leader in the world.
4. Proprietary technology PP340 helped EPL cut costs
EPL was able to cut costs by over 30% with the introduction of the new machine PP340. This helped EPL
to get their profits up.
5. Long term contracts with world leaders in FMCG
There were key contracts in the biggest markets like China and North America with Unilever and P&G.
This was of strategic advantage as this helped propel the sales and also helped them secure deals in
other geographies.
6. Mergers and Acquisitions
EPL used mergers and acquisitions to great advantage. They had joint ventures in Egypt, Switzerland,
Germany, and Britain. This also helped EPL have a footprint in various nations and markets.
Q3. Identify the benefits and risks for EPL in operating in a niche market segment of
laminated tubes. Suggest measures to leverage its strengths and manage risks identified by
you.
Benefits are as follows:
1. Potential for growth: The new segment of plastic laminated tubes is bound to grow very rapidly
and EPL has got all the strategic advantages
2. Diversification prospects into related products like pharmaceuticals etc.
3. Focused R&D
4. Good Market share
5. Global presence
The risks are as follows:
1. Rise in customer negotiation power
2. Higher competition and lesser margins
To mitigate the risks EPL can explore more product categories that require laminated tubes like
Ketchup/Jam and honey

5. Q4. In the view of the intensifying competition among laminated tube manufacturers on one
hand and rise in customer negotiation power on the other, how should EPL tackle these
marketing challenges so as to achieve its goal of 50% of the world’s market share?
EPL can undertake the following steps:
1. EPL can leverage its contracts with P&G and Unilever to expand into new geographies
2. Continue investment in R&D and newer technology so as to keep costs down
3. More joint ventures in the remaining high growth markets
4. Invest into newer products like ketchup etc.