@Rahulj I understand that Retail condoms market is highly competitive mainly because its eventually like a commodity and only differentiation which can be added is minor changes to the design to improve experience.
But correct me if I am wrong, one you are trying to compare male condoms market with the female condoms one. Two you are trying to compare the loss due to operations which could be due to a number of other factors like supply chain inefficiency, pricing errors, bad use of marketing budget, labor costs etc. If Manforce is losing money with Sunny Leone they could have looked at other marketing options with better marketing ROI.
For any business, facing hostile conditions and stiff competition is common especially in a commodity business. But that doesn’t mean they do not choose to launch a new product or try a new channel. For all the things which you mentioned the company needs to be more cognizant of the marketing spend, track the marketing ROI closely and enter into the business with an easy exit option. (Be asset light).
According to me, branding and marketing is a great way to create a barrier for entry for new market entrants. And considering the position Cupid is in right now this seems to be the right time. They are trying to create something similar to what Xerox did to photo copier industry. They are early movers in a particular segment and they are trying to make the best use of it by getting brand recognition for the product. Competitor failure is a great learning but not a measure of their success or future outcome. I really like the fact that Cupid went in with the “For her” campaign and is trying to educate the consumers to improve adoption rather than flashing high paid models expecting people to relate it to something they are aware of. Fingers crossed. I think it’s a gamble which if pays could work wonders allowing the company to introduce more variants of the product with minor design modifications for better margins both in domestic and international markets. If not they are running at full capacity and would continue to do so with only the marketing expense as sunk capital cost.
Not really sure of where they would price and whom would they really target. Considering the facts you mentioned I would assume they would run pilots in small geographies for understanding the market, rather going in with big bang push with high inventory off shelves of the distributors, high distribution logistics costs and big marketing spend. Completely opposite to what others are doing. But it’s a wait and watch game. Personally, I think the risk is lower than the reward potential but I may turn out to be wrong.