7.5 metrics that took us from beta to commercial launch!

While we had always crafted our product proposition at TagZ with deep market research all along to target a specific TG – it was extremely important to test for PMF before we went into a full-scale commercial launch.

“Without data you are just another person with an opinion”

We certainly didn’t want to hit the market with a commercial launch with just opinions. ;-)

Hence, we betalaunched TagZ towards the end of October with the objective of evaluating the product-market fit on the following parameters:

-      Taste

-      Price and perceived value

-      Packaging and communication

-      Grammage and satiety

-      Channel mix and margins

-      Retailer acceptance

 Stay with us to read about all the 7.5 metrics that helped us graduate from beta to commercial. Yes, 7.5 metrics to be precise! ;-)

The Channel Mix:

We launched our products across 60+ stores in a few select areas of Bangalore. These comprised of the following channels:

-      residential apartment-based supermarkets,

-      open-area supermarkets,

-      premium over-the-counter stores and

-      vending machines in tech parks

 We consciously did no promotions or marketing spends during most of this period. We wanted to understand the traction in absence of any marketing inputs and test the strength of product proposition.

The Shopper Journey:

The intended shopper journey that we want to plot was a sequence of steps:

1.  Consumer walks into store towards mass-premium junk snack section

2.  Gets attracted to our differentiated GenZ-centric packaging

3.  Tries our product and likes the product for its lip-smacking taste.

4.  Ideally repeats it for its premiumness and better/fitter nutritional profile.

 We only made sure we placed our products on the shelf next to premium/mass-premium snacks like Pringles or Doritos or Cornitos. We never placed ourselves in the health snack section since we never aspire for a health snack positioning. We clearly want to be the uber-premium GenZ snacking experience that is better-for-you!

Store Selection Criteria:

We only placed our products in stores, which met the following 4 criteria:

    I.        high income locality

 II.        premium look and feel of the store

III.        sold adequate quantities of Pringles and other premium beverages

 IV.        were willing to give us shelf space next to Pringles

 This was our way of making sure we are reaching only our consumer TG, which is the top 30 mn households in the country which earn above USD 20k.

 The following 7 metrics and trends is what we tracked to relentlessly during this 2-month period:

1.  We were able to convert 76% of the stores that we approached in the compact geography that we chose. 64% of them agreed in the first visit itself.

2.  We converted 98% of the stores within the margins that we had planned as benchmark for ourselves.

3.  We started with an average drop size of 12 packs per order. The average drop size went up to 18 packs over 8 weeks.

4.  The per day per store productivity channelwise is as follows:

a.  Apartment-based supermarkets – 0.98 packets per day

b.  Open-area supermarkets – 0.81 packets per day

c.   Premium OTC/Bakery – 0.45 packet per day

d.  Vending machines – 2.5 packets per day

5.  The overall average across channels of per day productivity is around 29.5 packets per month. Pringles per day per store productivity in the same stores would be around 45.

6.  We were able to accurately measure repeat rates in the vending machines. It was as high as 67% in the last 2 weeks of Dec.

7.  We did 2-hour sampling programs in some of these days in the last 7 days of this period and realized that per day productivity went upto 7-8 packets per day on the day of the sampling. Conversion of the sampling program was nearly 40%.

 Consumer feedback:

a. Taste –

Consumers have loved the taste of the product. Masala, sour cream onion and then salt is the clear order of preference. Going forward we might want to split our sales mix as 45% masala, 35% sour cream onion and 20% salt.

We also reduced the salt profile by a 1% on the basis of consumer feedback that we received.

b. Packaging –

This was clearly the first love for most of the consumers that we interacted with. Our decision to go for 90 micron+ packaging to give it the premium feel and full-face visibility was appreciated.

Our choice of a predominantly matt black color pallet keeping in mind our TG was something that stood out. The irreverent fonts and copy and sticking to familiar color-base for flavors was on point as well.

c. Price –

This was the biggest element we wanted to test out. While the Rs 50 price point is unoccupied it was also untested.

We are now super-confident that the price point works given the TG and market size that we are addressing and given the revenue goals we are chasing over the next 3 years.

d. Grammage & Satiety -

We launched with zip-locks to test if the consumers finish the pack in-a-go or rather use the zip-lock and finish it later. Since we were looking to design the grammage for a single serve pack within 140 calories (within RDA parameters), it was important to understand if the grammage was adequate or too much.

Instead of asking the consumer if the quantity was adequate we would just ask them if they used the zip-lock or not. This helped us get an unbiased consumer response on the grammage.

e. Channel mix & margins –

We appointed 2 distributors during this period. We did not face significant resistance on margins, credit terms or any other policies.

We were able to list with all the retailers well – within the margins that we had planned out for the channel.

From a unit economics perspective as well we are clearly sorted now and understand most of the cost lines and also the ones that we can optimise as we scale. But as of now we clearly know that a healthy double-digit CM2% is absolutely possible.

In case you were wondering what is the 0.5th metric, since the headline says 7.5 metrics ?

 Here it is – the 0.5th metric and possibly the most important one – was that we did all of this with a super-lean and super-energetic team of just 5 people! Validating our hypothesis that a lean team principle can work as we scale as well.

Putting this article out with as many permissible details so that others evaluating a beta launch can also benefit from our learnings and beta launch methodology. Also, hopefully this will give a reasonable view into how we are going about building our business with a focus on data, detail, experimentation and financial prudence.

Do reach out to us to discuss further with questions or suggest improvements or additions to this methodology. Would love to chat!

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