Long

Long-term Profitability: Advertising versus
Sales Promotion
Alex Biel
This study examines the allocation of funds between advertising and sales promotion. In
recent years, marketers have been increasingly turning to sales promotion as a seemingly
attractive strategy.
Although many marketers agree that resource allocated to advertising is an investment in

long-term brand building, there is far less confidence that advertising is an effective tool in
the short or intermediate term. While it is generally accepted that promotions generate short-
term sales, some of those sales are simply stolen from future purchases by the same
consumer.
I am concerned that this short-term orientation has destructive longer term effects. A major
question which marketers must confront is whether excessive emphasis on promotion
actually erodes perceived brand value.
If a brand is on special price too frequently, consumers are likely to start to think of the
special price as the normal price for the brand and learn never to buy the brand unless it is
discounted. Clearly, we need to pin down the benefits of sales promotion: Does it really build
profits for a marketer, as conventional wisdom suggests? Or does it have a negative impact
on earnings?
THE LONG-TERM PROFIT EFFECTS OF SALES PROMOTION
Those questions led to the second collaborative study between the Center for Research &
Development and SPI.1 This time the SPI investigative team was headed by Robert D.
Buzzell, Professor of Marketing at Harvard Business School. Again, the PIMS database was
used.
For this second study, we further refined the database of 749 consumer businesses to examine
businesses with basically similar promotional mechanisms. This led us to examine a group of
314 consumer non-durable businesses the fast-moving consumer goods (fmcg) businesses
included in PIMS, and on which we had both advertising and promotion spending data. Sales
promotion, as defined in PIMS, includes both trade and consumer activities (the average US
package goods marketer spends 60% of his below-the-line money on trade promotions, and
40% on consumer promotions); most consumer promotions relate to price: temporary cut-
price offers, premiums, direct couponing and money-back deals. Contests, games and
sweepstakes are also included in this category.
To examine the relationship between various strategies on the one hand and payout on the
other, the sample of business units was divided into three approximately equal parts, based on
a frequency distribution of their allocation patterns:
businesses using sales promotion as their dominant strategy,

businesses using a mixed strategy,
businesses using advertising as their major marketing investment vehicle.
Businesses using promotion as the dominant strategy were defined as all businesses spending
less than 36% of their marketing funds in advertising. The average business in this group
spent only 23% of their marketing money on advertising and 77% on sales promotion.
The group using the mixed strategy actually skewed slightly towards promotions. This
segment of PIMS fmcg businesses spent between 36% and 50% of their marketing money on
advertising. On average, they placed about 44% of their marketing expenditures in
advertising, and 56% in promotions.
The final group comprised that set of businesses which used advertising as their dominant
spending strategy. To be included in this group, businesses had to place over 50% of
marketing investment in advertising. The average business in this group allocated two-thirds
of its marketing funds to media advertising, and the rest to promotion. Table 1 gives the
performance of each group.
TABLE 1: RELATIONSHIP OF ADVERTISING/PROMOTION MIX TO

RETURN ON INVESTMENT
Advertising/promotion mix Average ROI (%)

Advertising emphasis 30
Mixed strategy 22
Promotion emphasis 18
Those companies spending the bulk of their funds 76% on promotion, achieved an
average return of 18.1% (pre-tax and pre-interest charges).
Those employing the mixed strategy, where on average 44% went to advertising and 56%
went to promotions, earned a considerably more respectable average return on investment of
27.3%.
The group of marketers using advertising as their dominant strategy that is, businesses
investing more than 50% of their marketing resources in advertising registered the
healthiest return on investments of all, averaging 30.5%.
The other measures of performance included in the analysis, such as return on sales and share
of market, all showed similar patterns; but as might be expected, the magnitude of the
differences varied. It is clear that there is a positive relationship between the emphasis on
investment in advertising and profitability. Conversely, those businesses that allocate most of
their marketing budgets to promotion tend to have lower profit margins and rates of return on
investment.
THE EFFECT OF EXTRA AD EXPENDITURE
One final piece of evidence comes from another source. These other data were developed by
Information Resources Incorporated, a leading US research firm. They studied the impact of
extra advertising spending on sales for 15 fmcg brands in a highly controlled experiment. The
average brand they studied increased its advertising spending by 70% during the one-year
test.2
The IRI measurement system, BehaviorScan, is state-of-the-art, and quite high tech. It
controls the advertising reaching test homes and measures what members of these households
purchase through scanners at the checkout counters of stores in the market. This makes it
possible to compare households receiving the extra advertising with a matched control group
receiving only the normal advertising spend.
As Table 2 shows, the average increase in sales among those receiving the additional
advertising pressure during the year of the test was 22%. Not bad, but the story does not end
there.
TABLE 2: ADVERTISING-INDUCED SALES INCREASE FOR THREE

YEARS
Year Average sales increase (%)

Test year 22
1st post-test year 17
2nd post-test year 6
Cumulative total 45
At the end of the one-year test, the extra advertising completely stopped. Both groups of
households the test group that had previously received the higher level of advertising, and
the control group received exactly the same level of advertising pressure over the next year
for the test brands.
One year after the test, there continued to be higher sales among those households which had
received the heavier advertising weight. These on average bought 17% more than those
receiving the base level advertising. In year three two years after the heavy spending test
those who had received the higher weight during the test continued to purchase 6% more of
the average test brand than those in the control group. So it seems that additional advertising
pressure has an enduring effect in addition to its immediate effect.
In another analysis of the profitability of more than 60 trade promotions using the same
technology for data collection, IRI found that overall only 16% of the promotions paid out. In
addition, for established brands, the long-term effects were likely to be negative due to
stockpiling by loyal buyers on the one hand and training buyers to wait for deals on the
other.
CONCLUSIONS
I will summarise what these various PIMS and IRI studies are telling us.
First, when we look at advertising alone, it makes a measurable direct contribution to

perceived quality, and share of market, which leads to profitability.
Second, advertising appears to have a carry-over sales effect that extends beyond the period
during which it is actually running.
Third, when we separately examine the way in which businesses allocate their expenditures
to sales promotion and to advertising, we see that those businesses emphasising advertising
enjoy a higher return on invested capital.
Finally, we see a significant relationship between changes in market share and changes in
advertising spending, but not between share changes and promotional changes. Clearly,
money invested in advertising not only drives profits on a yearly basis, but also builds strong
brands.
Design, packaging, public relations, sales promotion, experience with the brand and word-of-
mouth all contribute to or, in some cases, detract from these values. But advertising has
traditionally played the leading role in shaping and defining the image of strong brands.
In this reading I have presented evidence from PIMS showing that advertising makes a
measurable, significant contribution to brand profitability. It does this in the year in which the
advertising budget is spent, so there is an attractive short-term payout.
Data from IRI were also presented, however, illustrating that the carry-over effect of
advertising continues to produce higher sales in the years immediately following the
expenditure: a longer term payout, and a welcome additional benefit.
Advertising produces these results by adding value to products and services. It produces these
results by turning products and services into strong brands that have more leverage with
middlemen; brands that can credibly pre-empt the truth; brands that enjoy higher loyalty;
brands that are more forgiving of owners who occasionally stumble; brands that command
better margins and are more resistant to price competition; brands that can be extended.
Advertising builds brands that mean more to the consumer. These brands can, in principle,
live forever. In other words, advertising works by building strong brands.
Strategies Adopted By FMCG
Companies for Making Their
Brands Outstanding
Article shared by
Some of the major strategies adopted by FMCG companies for making

their brands outstanding compared to competitions are as follows: (i) Multi-
brand Strategy (ii) Product Flanking (iii) Brand Extensions (iv) Building
Product Lines (v) New Product Development (vi) Product Life Cycle
Strategy (vii) Taking advantages of wide distribution network.
The success of an FMCG depends greatly on its marketing strategy. An

FMCG marketer pursues a wide combination of strategies.For instance,
when prices are competitive, the company would use an extensive
distribution network, design suitable advertising and sales promotion
schemes from time to time.
Following are some strategies adopted by FMCG companies for

making their brands outstanding compared to competitors:
(i) Multi-brand Strategy:
A company often nurtures a number of brands in the same category. There
are various motives for doing this. The main rationale behind this strategy
is to capture as much of the market share as possible by trying to cover as
many segments as possible, as it is not possible for one brand to cater to
the entire market.
ADVERTISEMENTS:
Hindustan Lever have introduced many brands like Dove in premium
segment, Lifebuoy for economy segment and Lux, Liril and Rexona in
the intervening segment, meaning thereby, the company has not left any
segment untouched.
(ii) Product Flanking:

Product flanking refers to the introduction of different combinations of
products at different prices, to cover as many market segments as
possible. It is basically offering the same product in different sizes and price
combinations to tap diverse market opportunities. Shampoos in small
sachets, Pan masala in small pouches and premium detergents (Tide,
Aeriel etc.) in small pouches are examples of this strategy.
(iii) Brand Extensions:

Hindustan Levers Lifebuoy soaps brand extensions are Lifebuoy Plus,
Lifebuoy liquid and Lifebuoy Gold, since these brands have been
positioned at different segments. Similarly, Amul butter, Amul ghee, Amul
cheese and Amul chocolates are various brand extensions of regular Amul
Brand. Companies make brand extensions in the hope that the extensions
will be able to ride on the equity of the successful brands.
(iv) Building Product Lines:

Hindustan Lever has added product lines one after another starting from
Lifebuoy, Lux, Liril, Dove etc. Similarly, Britannia Industries have related
biscuits as differed product lines. Companies add related new product lines
to give consumers at the products they would like to buy.
(v) New Product Development:

Proctor and Gamble is shown as the number one company in the world
reputed for new products development. Companies that fail to develop new
products would expose themselves to great risk and might face stagnation
in future.
The existing products are vulnerable to changing consumer needs and

tastes, new technologies, shortened product life cycles and increased
domestic and foreign competition. A company can develop new products
either through R&D in-house or by acquiring other company or both.
(vi) Product Life Cycle Strategy:

An FMCG has short life cycle whereas an industrial product has long PLC.
According to PLC, companies plan to develop new products after
abandoning the old product which has experienced the decline stage of
PLC curve. For example, existing models in products like automobiles,
motor cycles, TV sets and watches etc. in India have experienced good
demand whenever new option have been offered.
(vii) Taking advantages of wide distribution network:

A very simple way of increasing an FMCG companys market share is by
developing a strong distributions network, preferably in terms of more
locations. An extensive distribution system can be developed over time, or
the company may acquire another company which has an extensive
distribution network. Coca-Cola and PepsiCos wide distribution network
systems have made them market leaders.
4 great marketing strategies
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April 26, 2006 10:32 IST
Barring a few, notable exceptions, rural marketing in India is still about a van
campaign, a badly-made commercial, a few painted walls and the occasional
participation in village haats and melas.
But then, "rural" means different things to different people: from 500,000 people for
consumer durables, to less than 50,000 for fast-moving consumer goods.
Still, it is heartening to note the increasing awareness of the importance of rural

markets - or, at least, of companies wanting to move beyond urban boundaries.
According to estimates by the Rural Marketing Agencies Association of India, the

total budget for rural marketing is only about Rs 500 crore (Rs 5 billion), compared
to the over Rs 13,000 crore (Rs 130 billion) allotted to mass media.
This is grossly inadequate to cover the huge potential for different products in rural
markets. Of course, clients' reluctance to spend big money for bigger results in rural
markets is because there are no standard performance yardsticks for judging the
efficacy of the rural marketing efforts.
The TRPs and NRS/IRS data help you determine the efficacy of TV and press
marketing. But there is no study to tell you what is the ideal cost per contact or what
is the ideal number of eyeballs or footfalls for different rural activities.
But only consider the huge successes of some regional brands, especially in the
FMCG sector, which are giving the multinationals a run for their money.
Companies like Cavin Kare (Chik Shampoo, Meera Herbal Powder, Fairever Cream
and so on), Anchor (100 per cent vegetarian toothpaste), Ghadi detergent powder
and Power soap are proof that regional brands can become brands to reckon with.
And don't forget Nirma, the most enduring example of a brand that began as a
regional player and is now a giant.
What did these products do that was so different? Most of them identified a segment
that was vacant in terms of product and area of operation. They all started in small,
concentrated markets, appealing to the local ethos and aspirations of the targeted
area.
Their communication, be it a simple radio spot or a wall painting or a theatre film,

touched a chord in the target audience. And, most importantly, their policies were
flexible and they could adopt to fast changing marketing situations. What should
companies do to step up their payback from rural marketing efforts? Here are some
steps that should help.
People power
Total commitment from top leadership, keeping in mind that rural marketing is a
long-term relationship, is imperative - the successes of Hindustan Lever and ITC are
proof of this statement. But even more important is the need for a dedicated task
force.
Rural marketing efforts need special mindsets, which many of the urban-oriented
management graduates who are at the helm of affairs at most organisations do not
possess.
A separate marketing and sales vertical headed by people with passion and
commitment to rural marketing and supported by a field team that can face the
rough and tough of the vast country-side with courage and conviction is a must.
The best bet is to recruit students from specialised institutes such as the Indian
Institute of Rural Management, or at least, management graduates who have studied
the subject as an elective.
Many of these are students from small towns, people with fire in their bellies who
want to prove themselves in big companies and have no issues about working in
smaller markets. Pay them well - remember, you pay peanuts, you get only monkeys -
and discuss the path their careers are likely to take in the organisation. And send
them out in the field only after thorough training.
Ensure the consistency of the team involved in any project, until the completion of a
specific task. Recently, we were involved with two big clients. In both cases, the
teams that briefed us in the initial stages and participated enthusiastically in the
campaign, were shifted out midway, in keeping with their companies' policy of
shifting and promoting people.
The teams that succeeded felt no ownership of the campaigns they had not initiated.
What started as a great rural marketing initiative has been relegated to the dustbin...
the fate of many rural marketing initiatives in the country.
Goals are good
Early on in the campaign, define your objective: is it a tactical effort to achieve

increased sales in specific areas during a specific time, or do you want to build a
strong equity for your brand in rural India?
Our experience with FMCG companies is that they are more interested in the first
choice. Most of them have previously appointed vendors who implement the
company's ideas blindly, be they van campaigns or below-the-line activities.
There is very little effort to tailor whatever communication is made in such efforts, to
suit the local audience or fit it with the overall campaign efforts in the mass media.
This invariably leads to less than satisfactory results in terms of awareness of the
brands and long-term impact of the efforts in the targeted markets. If you are
interested in the second alternative, a comprehensive brand building strategy in rural
India, with both short term and long term goals, is a must.
Know your customers
A good place to begin is studying the mindset of your customers, so you can create a
customised plan of action. All too often, clients insist their knowledge of their
customers (based on studies of urban India) is enough on which to base an action
plan. Our experience shows that the attitudes, aspirations and fears of rural
customers, with regard to products and brands, is very different from their urban
counterparts.
Research can give you invaluable ideas for new product development as well as new
methods of reaching your target audience. The refrigerator with standby power for 12
hours, pressure cookers with two handles and a radio with key-winding mechanism
are all the result of research.
More and more companies turn to the local haats to sell their products.
While haats offer opportunities to target consumers from several villages at one
place, and to that extent make your effort cost-effective, ensure that the people who
patronise these haats are the kind who will buy your brand.
For instance, we recently conducted a survey among some haats in Tamil Nadu, with
some interesting results. The haats were popular with the poorest agricultural
labourers who consciously buy the duplicate, spurious products that are sold in these
bazaars, since they can't afford the real thing. It is estimated that FMCG companies
lost more than Rs 10,000 crore (Rs 100 billion) to spurious products, mostly sold
through such local haats and bazaars.
Ensure availability
Most anecdotes about rural marketing centre on the distribution aspect - the
humongous task of physically reaching your product to over 600,000 villages, most
of them without motorable roads. But it's not really as nightmarish as it is made out
to be, at least keeping in mind the present goals of marketing companies in rural
India.
We've all heard about the shampoo sachets that are available in even the smallest
villages. How does that happen? It's a direct result of rising aspirations, fuelled by
television commercials. The consumer demands the product from the local
shopkeeper, who then buys the products from the nearest feeder markets.
Which means if you can ensure distribution to the feeder markets in towns or villages
with populations of 10-15,000, you've already taken the first step towards reaching
your target customer.
Studies also indicate that rural consumers prefer to shop for durables such as
televisions, automobiles and appliances in the nearest big town or city. So, if your
products are in towns with populations of 50,000, you're closer to the rural
consumer than you would have thought.
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Marketing strategies for fast-moving consumer goods Read next Fast FT National bank chiefs
pressure ECB to be more optimistic on eurozone recovery NEW 25 MINUTES AGO Share on Twitter
(opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new
window) Save FEBRUARY 6, 2009 by: Jan-Benedict E.M. Steenkamp & Marnik G. Dekimpe The
current recession is the most brutal economic downturn in a lifetime. One industry where the
consequences of the recession are felt particularly hard is the fast-moving consumer goods (FMCG)
industry. In the past, this industry was dominated by such well-known manufacturer brands as Ariel
detergent, Nescaf coffee, Philadelphia cream cheese, Flora margarine, and Pampers nappies.
However, in recent decades, so-called private labels or store brands brands owned by retail giants
such as Wal-Mart, Tesco, Carrefour and Aldi have made huge inroads, especially in western Europe
and the US. Today they control 20 per cent of the US FMCG market, 35 per cent in Germany, and
more than 40 per cent in the UK Much of the loss of market share of manufacturer brands is
initiated in economic downturns. Faced with a pressing need to save money, shoppers turn to
(cheaper) store brands. They discover that the quality is good and, consequently, many stick with the
brand when the economy improves again. Sample the FTs top stories for a week You select the
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Our research, spanning several decades of purchasing behaviour and multiple recessions in countries
across the globe, shows that the growth of private labels in recessions leaves permanent scars on
manufacturer brands. Will it be any different this time? It is possible, but this will depend on how
brand managers respond to the current downturn. Brands that take a proactive stance and treat the
recession as an opportunity are likely to come out of the recession stronger than before. In this
article, we describe what they should do. Two issues drive the outcome of how brands make it
through the recession: their equity at the onset of the recession; and investments in the brand
during the recession. Brand equity How strong is your brand? Is it a brand with many loyal buyers
that people know and trust and are willing to pay a price premium for? Or is it a weak brand,
commanding little loyalty and esteem? In sum, is your brand equity high or low? Strong brands enter
the recession in a much more favourable position than weak brands. They are on the shelves of
more retailers, have more shelf space and have a larger and more committed customer base.
Marketing budgets for stronger brands also tend to be higher. In recessions, retailers across the
world devote more shelf space to their own brands (especially since they also command a higher
margin). For example, to cater to the increased price sensitivity of UK consumers in the wake of the
economic downturn, Tesco launched on September 17 2008, its fourth line of private labels, called
Discount Brands at Tesco. Sales of Tescos discount and value ranges are up 65 per cent on last
year, and one in four shoppers now purchases these ranges. This puts a pressure on the number of
national brands the retailer still carries. Retailers are less likely to kill brands with a strong and loyal
customer base. High-equity brands are also better insulated against the switching to private labels
behaviour that is ubiquitous in recessions, if only because loyal customers incur higher switching
costs when buying non-preferred items. High-equity brands are known to suffer less, and to recover
faster, following a product-harm crisis. The same holds true when faced with an economic crisis.
Brand investments in recessions In recessions, shoppers have a natural tendency to switch to private
labels in order to save money. The logical thing for brands to do is to counter this tendency by either
lowering their own price, or by offering sufficient non-price reasons to consumers to buy their
brand. Our research, spanning more than two decades of actual marketing behaviour, reveals that
most brands do exactly the opposite. First, brands can counter the price advantage of private labels
by ramping up their own price promotions (temporary price reductions). Consumers are more price-
sensitive in recessions, so offering more price promotions makes a lot of sense. Surprisingly, price
promotion activity for most brands actually decreases in recessionary times. Second, the brand can
counter the price advantage of private labels by increasing its investments in advertising or new
product activity. Both provide non-price reasons to purchase the manufacturer brand image and
improved functional performance, respectively. However, our research shows that advertising and
innovation activity decreases in recessions. Marketing research is also one of the first victims in a
recession. These outlays are discretionary, and offer an easy way to reduce costs. Unfortunately, in
bad economic times, it is more difficult to convince consumers to buy your higher-priced brand.
Optimal matching of your brand with consumer needs is even more necessary in difficult times, but
evidence shows that brand manufacturers prefer to operate without this crucial guidance during
recessions. Why do companies manage brands in such a counterproductive way? After all, their
brands are their most valuable assets. Cutting back in recessions on price promotions, innovation
activity and advertising saves money in the short term, but undermines the long-term equity of
brands. We believe that it is due to a toxic combination of short-term perspective that characterises
the decision-making of many managers and the tremendous pressure on the bottom line in
recessionary times. The easiest way out is to cut costs, and since price promotions, advertising, new
product introductions and marketing research are largely discretionary costs, they can easily be cut
in the short term. However, this behaviour weakens the equity of brands and negatively impacts on
shareholder value. We studied the stock price performance of 26 global companies over a 25-year
period and found that annual growth in shareholder value for companies that do not tie their
advertising investments to the business cycle is 1.3 per cent higher compared with companies that
do let their advertising investments depend on the business cycle. This translates into billions of
dollars of shareholder value that are destroyed annually by adopting this erroneous practice. In sum,
companies often do the wrong thing by reducing marketing expenditure despite compelling
evidence that it pays to not follow the general trend of cutting back during a recession. Put
differently, one should start to treat those marketing expenses as strategic investments, rather than
as short-run costs that can easily be cut when the going gets tough. Note that going against the
trend can be in absolute terms (strong form) or in relative terms (weak form). Indeed, by holding
brand expenditures at pre-recessionary levels, while other brands spend less, one may still increase
ones share of total market communications. Four scenarios By combining two dimensions of brand
equity at the onset of the recession and brand investments in the recession, we get four scenarios.
Brand investments Reduction in brand investments No reduction/increase in brand investments
Brand equity High (1) High loss potential (2) Recession is opportunity Low (3) Survival game (4)
Double or nothing Brands in cell (1) run the distinct danger that their equity will be significantly
eroded in the current recession. They start from a favourable position, but their behaviour will lead
to a significant weakening of their position vis--vis private labels and the brands in cell (2).
Managerial decision-making for these brands is overly cautious and focused on the short-term.
These brands should emphasise activities that keep their customers satisfied (and, hence, retain
them), rather than focus on cost-saving activities. Indeed, customers lost during the recession may
never come back, even when the economys outlook improves again. For brands in cell (2), the
recession is an opportunity to pull ahead of their short-sighted competitors in cell (1). Their
proactive behaviour will strengthen their (relative) position, not only in the recession period, but
also in subsequent years. Brands in cell (3) are in the worst possible situation: they start weak, and
their management makes the wrong decisions. They are prime candidates to be de-listed by retailers
who are pushing their private labels in recessions and many of them will. Their brand equity will
decline, and many will not even survive the recession. The brands in cell (4) have the opportunity of
a lifetime to fight back. They start in an unfavourable position their equity is low and, in normal
times, it would take tremendous marketing investments to break through the competitive clutter.
However, given that most brands cut back in recessions (and, hence, belong to cells (1) and (3),
brands in cell (4) are able to increase their share of total market communication in the category
dramatically by maintaining or even better increasing their marketing investments. But it is a
risky strategy if it is poorly executed, the anticipated increase in sales and profits will not
materialise and the brand may be discontinued. Conclusion Just as slumps in the stock market offer
great opportunities for courageous investors, slumps in the real economy offer great opportunities
to courageous managers. All evidence indicates that a proactive strategy is associated with increased
brand success and shareholder value. If you wait till the good times come back, you ignore the
advice given by the legendary ice hockey player Wayne Gretzky: I skate to where the puck is going
to be, not to where it has been. Recessions are not for the faint-hearted but who said that fair
weather makes great managers? Authors: Jan-Benedict E.M. Steenkamp (jbs@unc.edu) is C. Knox
Massey Distinguished Professor of Marketing and Marketing Area Chair, University of North
Carolina, Chapel Hill, U.S.A. & Executive Director of AiMark, and author (with N. Kumar) of the book
Private Label Strategy: How to Meet the Store Brand Challenge. Marnik G. Dekimpe
(m.g.dekimpe@uvt.nl) is Research Professor of Marketing, Tilburg University, the Netherlands and
Professor of Marketing, Catholic University Leuven, Belgium
Growth Strategies For Fmcg
Companies In India Marketing Essay
This project explores the emerging strategies followed by FMCG companies in order to tap the
Indian market, especially in the bottom of the pyramid. Initially, the BOP framework, developed
by CK Prahlad and Hart at the end of the last century suggesting that corporations could
profitably serve the 4 billion people in the world who were at the bottom of the pyramid, is
discussed in detail. This is followed by thorough analysis of strategies being followed by the
major FMCG companies in India to tap the BOP customers.
In India, FMCG majors such as Hindustan Unilever and ITC have been pioneers in reaching out
to people in the bottom of the pyramid. Through unique strategies and a vision to capture the
markets of the future, these Indian behemoths continue to lead the rest of the companies in the
sector with respect to market development at the BOP. This research project has studied the
critical elements of the strategies employed by Indian FMCG firms, in particular HUL and ITC, as
well as others like Procter & Gamble and Nestle, through extensive discussions with the middle
management at these companies. These strategies have then been discussed in the light of the
framework provided by CK Prahlad in his landmark work: The fortune at the Bottom of the
Pyramid (2004).
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Further, several other strategies followed by the companies like introduction of new products,
branding activities, competitive advantage gained through corporate social responsibility is also
discussed.
Towards the end, the strategies of two giants of FMCG industry- HUL and ITC, have been
discussed in detail, including the historical context, their business models, achievements, and
future plans and strategies to win in the BOP markets.
Introduction
C. K. Prahalad has worked for years to find a new way to solve the problem of poverty. Teaming
up first with Stuart Hart (Prahalad and Hart 2002) and then Allen Hammond (Prahalad and
Hammond, 2002; Hammond and Prahalad 2004), he developed a set of ideas about what have
come to be known as "bottom of the pyramid" (BOP) initiatives. When Prahalad began to pitch
the idea that consumers who lived at the bottom of the economic pyramid should be treated as
individuals who could be brought into the picture as co-creators to solve their own economic
problems, he was treated with disbelief by the academic community. The traditional idea that the
poor will always be wards of the state was hard to shake-off.
Prahlad has looked at the BOP as a viable and profitable growth market, suggesting that treating
the BOP as a market can lead to poverty reduction, particularly if NGOs and community groups
can join with MNCs [multinational corporations] and local companies as business partners. The
development of markets and effective business models at the BOP can transform the poverty
alleviation task from one of constant struggle with subsidies and aid to entrepreneurship and the
generation of wealth. When the poor at the BOP are treated as consumers, they can reap the
benefits of respect, choice, and self-esteem and have an opportunity to climb out of the poverty
trap.
Figure 1: The BOP premise
Source: C.K. Prahalad and Stuart Hart, 2002. The Fortune at the Bottom of the Pyramid,
strategy+business, Issue 26, 2002.
While he intends to draw on businesses' capabilities, he does not ask them to play a
controversial social welfare role. Rather, he asks business to do better at what it already does so
well: create wealth. Prahalad asks business to focus on those who make less than $2 per day,
not as aid recipients but as customers: "the poor represent a significant latent purchasing power
that must be unlocked". By serving this $13 trillion market, Prahalad concludes, "I have no doubt
that the elimination of poverty and deprivation is possible by 2020".
While the idea was met with initial skepticism in the academic circles, it has steadily gained
ground over the last few years as more and more companies have started to target customers at
the bottom of the pyramid in order to sustain high growth rates. Over the last decade, tapping the
bottom of pyramid has emerged as a central theme for much of the industry in emerging markets,
more so in India where more than 350 million people survive on $2/day or less. A growing
number of global companies have been drawn to the seductive idea that money can be made by
developing and marketing products for those at the bottom of the pyramid, some four billion
people around the world. Not only are these companies attracted by the prospect of discovering
markets with untapped growth potential, but theyre also aim to have an impact, in a global
society characterized by deep divisions between the haves and the have-nots.
The key, according to Prahalad and Hart, is to see these impoverished people as customers
worthy of a corporation's attention. To do so requires a profound change in how business people
think about product and market development, as well as their return on investment. They argue
that this will require a significant change in the dominant logic of the MNCs' managers.
Literature Review
The market for products and services delivered to the poor people of the world is huge.
Consumers at the very bottom of the economic pyramid those with per capita incomes of less
than $1,500 number more than 4 billion. For more than a billion people roughly one-sixth of
the worlds population per capita income is less than $1 per day. The 20 biggest emerging
economies include more than 700 million such households, with a total annual income estimated
at some $1.7 trillion, and this spending power is approximately equal to Germanys annual gross
domestic product (Prahalad and Hart, 2002). India has 171 million low-income households with a
combined $378 billion in income. But the success of multinational corporations in penetrating
these low-income customers has been patchy at best, with most companies based in the
developed world choosing to focus on the middle and upper income segments of the developing
world. The business world seized the opportunity at the bottom of the economic pyramid. The
causes are: corruption, poor infrastructure, non-existent distribution channels, illiteracy, lack of
robust and enforceable legal frameworks, religious or racial conflict, and war or violent
insurgencies that stifle the enthusiasm of companies in serving people living in poverty. Indeed,
most large firms have elected to leave this consumer segments to local companies or
government agencies and focus on the low hanging fruit the middle and upper classes. But
while the vast majority of corporations have seen these challenges as insurmountable barriers,
other have quietly pursued strategies of experimentation in developing unique product and
service propositions for the worlds most needy consumers. Research has revealed that these
companies are not exclusively those at home in countries such as India, China or the Philippines.
Multinationals those have accepted the challenge of serving the poor and have been able to do
so profitably. At the heart of virtually all of these organizations success has been the
development of an approach that delivers the 4As availability, affordability, acceptability and
awareness.

Disclaimer
The 4 As are defined as follows:

Availability the extent to which customers are able to readily acquire and use a product or
service. Distribution channels in bottom of the economic pyramid (BOP) markets can be
fragmented or non-existent and the task of simply getting products to people can be a major
hurdle to overcome. Companies need to explore alternative methods of delivering their products
and services to even the most isolated BOP communities.
Affordability the degree to which a firms goods or services are affordable to BOP consumers.
Many low-income consumers in developing countries survive on daily wages, meaning that cash-
flow can be a significant problem. Companies need to be able to deliver offerings at a price that
enables consumption by even the poorest consumers.
Acceptability the extent to which consumers and others in the value chain are willing to
consume, distribute or sell a product or service. In BOP markets, there is often a need to offer
products and services that are adapted to the unique needs of both customers and distributors.
Companies might need to respond to specific national or regional cultural or socioeconomic
aspects, or to address the unique requirements of local business practices.
Awareness the degree to which customers are aware of a product or service. With many BOP
customers largely inaccessible to conventional advertising media, building awareness can be a
significant challenge for companies wishing to serve low-income consumers in the developing
world. To overcome these constraints companies must explore alternative communication
channel
By leveraging the 4As companies can achieve growth and profit, two elusive goals in many
developed markets. The strong financial performance of Hindustan Lever is well documented,
and the Haier Group is now among the top five appliance makers in the world, with self-reported
2004 revenues of more than US$10 billion. Smart Communications Inc. in early 2005 Philippine
Long Distance Telephone Company (PLDT), Smarts parent organization, revealed a net profit of
US$512 million for the full year 2004, up from US$38 million the previous year. But beyond
financial success for companies such as Haier, Hindustan Unilever and Smart, delivering the 4As
has also enabled companies to provide significant social good. Low income consumers have
benefited from access to products and services uniquely tailored to meet their needs, and often
at a lower cost than in the past. (Garrette & Karnani 2010)
The UN Millennium Project has turned the spotlight on measures to end poverty for about four
billion people who live in poverty. Such people who are economically at the bottom the pyramid
(BOP) have been a challenging market for firms that seek to make profit. This market is
traditionally considered the domain of governments, aid agencies, nonprofits, NGOs and other
do-gooders. Yet this is a market that merits attention even by for-profits. The BOP is severely
constrained by lack of income and hence only certain products or services that are more
utilitarian would be viable. If the cost of producing a reasonable quality product is still high, then
BOP would be unable to afford it and hence there is no fortune at BOP.
Increasing consumption is not necessarily sustainable (Landrum, 2007). No matter what the
income level is, human beings consume. Consumption, however, has been has been more
semantically related to consumerism, the pursuit of material goods or the satisfaction of higher
order needs after subsistence needs are met (Ger, 1997; Clarke et al., 2003). In spite of
marketers creating "new" expectations and aspirations, unless a need is being satisfied,
marketing to this segment will not be successful. Consumption as noted by Clarke et al. (2003),
includes both the creative or production aspect. Thus, it is not merely products offered to BOP
that constitutes consumption, but also those produced by BOP that can be sold within that
market or to the top of the pyramid (TOP). Both advocates of fortune at BOP as well as those
who consider it as hype agree that this is an important aspect to consider when marketing to this
segment. However, no one has suggested whether there are explicit linkages between these two
types of consumption. Characterization BOP consumption by classification of the various
products they consume in terms of broad categories has to be delved into. Examination of what
motivates BOP consumption is imperative. Motivation and Marketing theories are enablers.

Disclaimer
An overview of categories of consumption and innovations in the same provides insights to what
and why BOP consumes. By cataloguing the various needs and examining BOP examples,
consumption patterns were identified. In spite of having income and resource constraints, BOP
consumers are sophisticated and creative. BOP consumers are motivated not just by survival
and physiological needs but seek to fulfill higher order needs either to build social capital, for
cultural reasons or as a means to compensate for deficiencies in other areas of their lives.
Though service in critical infrastructural areas is needed by governmental and aid agencies, firms
that do want to serve BOP markets should understand how individual markets function. While
survival and safety needs are indeed critical, building bonds with community and higher order
needs such as self-esteem and self-fulfillment lead to greater productivity and profit
opportunities. Advances in information and communication technologies have enabled BOP to
connect to the global economy. Providing "marketplace" services and education are crucial
services that enable greater sustainability of BOP marketing. Mobilizing community efforts,
creative pricing methods, innovative product designs, tapping into cultural and locally prevalent
ways of communicating are some of the successful marketing strategies for this segment.
(Subrahmanyan & Gomez-Arias 2008)
Market-based solutions to alleviate poverty have become increasingly popular in recent years. In
his book Fortune at the Bottom of the Pyramid, C.K. Prahalad argues that private companies,
especially large multinational companies, can make significant profits by marketing to the people
living at the "bottom of the pyramid" (BOP) and can simultaneously help eradicate poverty. The
BOP proposition of "doing well by doing good" is, of course, very appealing and has attracted
much attention. At the same time, this proposition is controversial in the current management
literature. Karnani argues that the BOP opportunity is a "mirage" and that its logic is "riddled with
fallacies." Jaiswal contends that the "accounts of corporations succeeding at the BOP sometimes
strain credulity." There are very few examples of profitable businesses that market socially useful
goods in low-income markets and operate at a large scale. There are many examples of
businesses that profit by exploiting the poor. The poor are vulnerable by virtue of lack of
education or lack of information, and by virtue of economic, cultural, and social deprivations.
Banerjee and Duflo show that the poor spend a "surprisingly large" fraction of their income on
alcohol and tobacco. Many companies exploit this tendency and make significant profits from the
sale of alcohol and tobacco to the poor. Products such as tobacco are easy to analyze: they are
profitable businesses that are socially bad for the poor; and they clearly do not fit the BOP
proposition. The problem with the consumer challenges in Marketing Socially Useful Goods to
the Poor focused BOP approach is that it does not differentiate between priority and non-priority
areas.
The real challenge is to design market-based solutions for alleviating poverty, which implies
profitable businesses that provide socially beneficial products and services to the poor that
genuinely improve the quality of their lives. Only publicized initiatives like Grameen Bank and
Aravind Eye Careattained a scale sufficient to transform a business model into a solution.
However, it is ironic, and instructive, that both these examples are not-for-profit organizations
and cannot be classified as commercial successes or as market-based solutions. The article
discusses the BOP businesses that are unquestionably socially virtuous and investigate how to
develop profitable strategies in that context. Three BOP initiatives that have not been commercial
successesProcter & Gamble, Essilor, and Danone are analyzed. All three companies have
significantly down-scaled their initial plans and converted their efforts into small experimental
operations.
Examining these three cases in-depth yields several interesting insights on the key success
factors for BOP initiatives. The overarching lesson from the analysis of cases is that, far from
triggering a revolution in business thinking, developing BOP strategies requires firms to get back
to the basic principles and rules of economics and business. The context is different in BOP
markets from more affluent markets, but durable business principles are still an effective guide to
strategy development. Context changes, the logic of business does not change. The generous
and well-intentioned social objectives of BOP initiatives must not hide the fact that these
opportunities present tough economic and strategic challenges. The desire to do well should not
blind managers to the realities of underlying economic forces that determine business success
and failure. Companies, academia, civil society, and governments have devoted increasing
efforts and attention to generating market-based solutions to alleviate poverty. In spite of this,
there are very few examples of profitable businesses that market socially useful goods in low-
income markets and operate at a large scale. Combining social virtue with profitability, while
achieving scale, is a major challenge. The desire for a positive outcome should not blind
managers and policy makers to the difficulty of the challenge.

Disclaimer

The dominant lesson drawn from the case studies is that developing BOP strategies requires
firms to get back to the basic principles and logic of economics and business: focused objectives,
understanding the customers, and appreciating the role of economies of scope and scale. The
biggest difference between BOP and affluent markets is the obvious but under-emphasized fact
that the poor have very low purchasing power. Designing the business model to serve BOP
markets has to start with this basic insight rather than a minor adaptation of the business model
successful in affluent markets. Firms must shift from creating needs in existing markets to
creating markets out of unmet needs.
There is no fortune at the bottom of the pyramid. Marketing socially useful products to the poor
offers only limited business opportunities. However, companies that make the relevant trade-offs
will profit from seizing these opportunities. The current situation of BOP businesses might be
analogous to the "New Economy" fad in the late 1990s. There were then many dot-com gurus
calling for a change in the business paradigm, and myriads of start-up firms launched new
"business models" that denied basic economic principles. However, after the bubble burst, a few
winners did emerge, such as Amazon and Google. Tomorrows BOP champions are probably
hidden somewhere in the current experiments that firms are launching. (Anderson & Billou 2007)
Sachets have been marketed by firms as a strategy to increase trials and market penetration
especially in the economically underprivileged societies of the emerging markets. Very often the
existence of an economic underclass is assumed to be a necessary prerequisite for the
successful implementation of sachet marketing strategy. The article challenges the stance, and
provides a managerially relevant theoretical framework to evaluate the sachet marketing
strategies of firms marketing in India. It is proposed that sachet marketing strategy does not
necessitate the prevalence of poverty, and the critical success factors are an extensive retail
distribution, favorable socio-cultural factors, and higher perceived value by the consumers, and
technology to reduce packaging costs.
Sachet marketing, or the practice of serving products and services in small, affordable sizes, is
widely used to tap the lower-end market, nowhere more successfully than in India, and in a few
other south-east Asian nations such as Philippines and Indonesia. The importance of the single
serve shampoo sachets in India can be gauged by the fact that it makes up more than 95% of
industry sales in units, constituting 60% of sales value.
The sachet has become an important device for reaching the untapped market of the economic
underclass. If poverty was the main reason for the success of sachet marketing, it should have
seen much more widespread popularity in countries much poorer than India -Pakistan or
Vietnam. The term "sachet marketing" connotes marketing single-use shampoo sachets which
are sold for a few cents in underdeveloped and emerging markets. Sachet Marketing is defined
as the entire marketing strategy involving designing, packaging, and selling a product/service in a
small pack size at an affordable price point to consumers. The "affordability" aspect of sachet
marketing can be either in terms of lower price point. The focus of sachet marketing is not just on
the product design or pricing, but rather on the entire marketing system: from pricing and
packaging to delivery, distribution, and usage occasion.
Sachet marketing has been applied to almost every product and service category in India.
Numerous factors, historical, cultural, and not just economic, have contributed to the success of
sachet marketing in India. The success of sachet marketing is due to its enthusiastic adoption by
Indians from all economic brackets, and not just the lowest ones. Sachet marketing strategy in
India is being used to drive volumes rather than value (and profits) for the company, but unless
companies adopt means to increase value to consumers (especially rural consumers) and
simultaneously reduce internal operational costs (e.g. distribution and packaging costs), they are
unlikely to be successful for shoring up their bottom-line in the long run. (Singh, Ang & Sy-
Changco 2009)
Reasons for choosing the FMCG Industry
was chosen
The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This
sector touches almost every aspect of human life. The FMCG producers now realize that there is
a lot of opportunity for them to enter into the rural market. The sector is excited about the rural
population whose incomes are rising and the lifestyles are changing. There are as many middle
income households in the rural areas as there are in the urban. Thus the rural marketing has
been growing steadily over the years and is now bigger than the urban market for FMCGs.
Globally , the FMCG sector has been successful in selling products to the lower and middle
income groups and the same is true in India. Over 70% of sales come from middle class
households today and over 50% of the middle class is in rural India. Also with a near saturation
and cut throat competition in urban India, many producers of FMCGs are driven to chalk out bold
new strategies for targeting the rural consumers in a big way. But the rural penetration rates are
low. This presents a tremendous opportunity for makers of branded products who can convert
consumers to buy branded products.

Disclaimer
Many companies including MNCs and regional players started developing marketing strategies to
lure the untapped market. While developing the strategies, the marketers need to treat the rural
consumer differently from their counterparts in urban because they are economically, socially
and psycho-graphically different to each other.
Impulse to go Rural
There are many reasons that compel the FMCG companies to enter the uncharted territory of
rural India. Some of the attractions are discussed below;
Large Population
The rural Indian population is large and its growth rate is also high. Over 70% Indias one billion
plus population lives in around 627,000 villages in rural areas. This simply shows the great
potentiality rural India has to bring the much needed volumes and help the FMCG companies to
bank upon the volume driven growth.
Table 1
Area
Households
Population
Rural
72.6
74.6
Urban
27.4
25.4
All India
100
100
Source: Census 2001
Rising Rural Prosperity

India is now seeing a dramatic shift towards prosperity in rural households. As per the National
Council for Applied Economic Research (NCAER) study, there are as many middle income and
above households in the rural areas as there are in the urban areas. There are almost twice as
many lower middle income households in rural areas as in the urban areas.
Table 2
Income Group
2001-02
2006-07
Total
Rural No.
%
Total
Rural No.
High
1.48
0.41
27.7
2.96
0.7
Middle
69.18
4.83
64.8
90.25
59.85
Low
32.39
29.52
91.42
20.41
95.8
Total
102.95
74.76
72.6
114.52
80.96
Despite the high rural share in these categories, the rural penetration rates are low, thus offering
tremendous potential for growth.
Growth in market
The purchasing power in rural India is on steady rise and it has resulted in the growth of the rural
market. The market has been growing at 3-4% per annum adding more than one million new
consumers every year and now accounts for more than 50% of volume consumption of FMCG.
The growth rates of lot of FMCG are higher in rural markets than urban markets. (Raj & Selveraj,
2007)
Methodology
Since this is an exploratory research to broadly determine the emerging bottom of pyramid
strategies, the case study methodology has been employed. Since the research subject is
relatively new, the literature review was conducted to develop the theoretical context for the
project. Furthermore, the findings in the literature were adopted and used in the analysis.
In order to study the different strategies of FMCG firms, interviews were conducted with middle
level managers of Hindustan Unilever Limited, Procter &Gamble, ITC, Nestle and Amul. These
interviews dwelt upon
The current target customers for different products of that company
Reach of distribution channel
Historical initiatives to tap into the bottom of pyramid markets
Current strategies to reach BOP consumers
Future plans to reach BOP consumers with existing and yet to be introduced/ developed
products
Through these interviews, common insights gained about the emerging BOP strategies, based
on an organizations learning from previous attempts, were identified and described in the
context of the BOP framework proposed by CK Prahlad.
Out of these companies, the two companies which had spent significant effort in reaching BOP
consumers were HUL and ITC. The entire distribution strategy, together with historical context,
present strategies and future plans, is presented here.
Bottom of Pyramid Framework

CK Prahalads proposes that if we stop thinking of the poor as victims or as a burden and start
recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a
whole new world of opportunity can open up. Four billion poor can be the engine of the next
round of global trade and prosperity. They can be a source of innovations. Serving the BOP
consumers will demand innovations in technology, products and services, and business models.
More important, it requires large firms to work collaboratively with civil society organizations and
local governments.
Market development at the BOP can also create millions of new entrepreneurs at the grass roots
levelfrom women working as distributors and entrepreneurs to village-level micro enterprises.
These micro enterprises will be an integral part of the market-based ecosystem. It requires
organizational and governance innovations as well.
The economic pyramid of the world is given below:
Figure 2: The economic pyramid
Source: C.K. Prahalad and Stuart Hart, 2002. The Fortune at the Bottom of the Pyramid,
strategy+business, Issue 26, 2002.

Disclaimer
The distribution of wealth and the capacity to generate incomes in the world can be captured in
the form of an economic pyramid. At the top of the pyramid are the wealthy, with numerous
opportunities for generating high levels of income. More than 4 billion people live at the BOP on
less than $2 per day.
The dominant logic in MNCs at the time, according to Prahalad, was as follows:
Table 3
Assumption
Implication
The poor are not our target customers, they cannot afford our products
Our cost structure is fixed; with our cost structure, we cannot serve the BOP markets
The poor do not have use for products sold in developed countries
We are committed to a form over functionality. For example, the poor might need sanitation, but
cant afford detergents in formats we offer. Therefore, there is no market in the BOP.
Only developed countries appreciate and pay for technological innovations.
The BOP does not need advanced technology solutions; they will not pay for them. Therefore,
the BOP cannot be a source of innovations.
The BOP market is not critical for long-term growth and vitality of MNCs.
BOP markets are at best an attractive distraction.
Intellectual excitement is in developed economies; it is very hard to recruit managers for BOP
markets.
We cannot assign our best people to work on market development in BOP markets.
Adapted from C.K. Prahalad and Stuart Hart, The Fortune at the Bottom of the Pyramid,
strategy+business, Issue 26, 2002
However, he argues that
There is money at the BOP.
By virtue of their numbers, the poor represent a significant latent purchasing power that must be
unlocked. For example, all too often, the poor tend to reside in high-cost ecosystems even within
developing countries. In the shanty town of Dharavi, outside Mumbai, India, the poor pay a
premium for everything from rice to credit. Compare the cost of everyday items of consumption
between Dharavi and Warden Road (now redesignated B. Desai Road), a higher-income
eighborhood in Mumbai. The poverty penalty in Dharavi can be as high as 5 to 25 times what the
rich pay for the same services. Large-scale private-sector businesses can "unlock this poverty
penalty.
The BOP Markets are brand conscious
The experience of Casas Bahia in Brazil and Elektra in Mexicotwo of the largest retailers of
consumer durables, such as televisions, washing machines, radios, and other appliances
suggests that the BOP markets are very brand-conscious. Brand consciousness among the poor
is universal. In a way, brand consciousness should not be a surprise. An aspiration to a new and
different quality of life is the dream of everyone, including those at the BOP. Therefore,
aspirational brands are critical for BOP consumers. However, BOP consumers are value buyers.
They expect great quality at prices they can afford. The challenge to large firms is to make
aspirational products affordable to BOP consumers.
The BOP Market is connected.
The spread of wireless devices among the poor is proof of a market at the BOP. The Indian
market has 700 million+ mobile customers, and it is still growing at a fair clip. Connectivity also
allows the BOP consumers to establish new patterns of communication away from their villages.
With cell phones and TV, the BOP consumer has unprecedented access to information and
opportunities to engage in a dialogue with the larger community. As a result, word of mouth
among BOP consumers is becoming a potent force for assessing product quality, prices, and
options available to them.
The BOP Consumers readily adopt advanced technologies.
The spread of wireless devices, PC kiosks, and personal digital assistants (PDAs) at the BOP
has surprised many a manager and researcher. For example, ITC decided to connect Indian
farmers with PCs in their villages. The e-Choupal network allowed the farmers access to
information that allowed them to make decisions about how much to sell and when, thus
improving their margins.
The task of converting the poor into consumers is one of market development. Market
development involves both the consumer and the private-sector firm. In order to develop the
market, firms need to
Create the capacity to consume
To convert the BOP into a consumer market, we have to create the capacity to consume. Cash-
poor and with a low level of income, the BOP consumer has to be accessed differently. Creating
the capacity to consume is based on three simple principles best described as the "Three As":

Disclaimer
Affordability: Whether it is a single-serve package or novel purchasing schemes, the key is

affordability without sacrificing quality or efficacy.
Access: Distribution patterns for products and services must take into account where the poor
live and their work patterns. Most BOP consumers must work the full day before they can have
enough cash to purchase the necessities for that day.
Availability: Often, the decision to buy for BOP consumers is based on the cash they have on
hand at a given point in time. They cannot defer buying decisions. Availability (and therefore,
distribution efficiency) is a critical factor in serving the BOP consumer.
Provide dignity and choice
When the poor are converted into consumers, they get more than access to products and
services. They acquire the dignity of attention and choices from the private sector that were
previously reserved for the middle-class and rich.
Build trust
Both sidesthe large firms and the BOP consumershave traditionally not trusted each other.
The mistrust runs deep. However, private-sector firms approaching the BOP market must focus
on building trust between themselves and the consumers.
Based on research conducted by Prahalad and Hart, 12 principles of innovation were suggested
that, taken together, constitute the building blocks of a philosophy of innovation for BOP markets.
Focus on price performance of products and services. Serving BOP markets is not just about
lower prices. It is about creating a new price-performance envelope. Quantum jumps in price
performance are required to cater to BOP markets. Traditional approaches to reducing prices by
5 to 10 percent will not suffice. Companies should focus on an overall price-performance
improvement of 30 to 100 times.
Innovation requires hybrid solutions. BOP consumer problems cannot be solved with old
technologies. Most scalable, priceperformance- enhancing solutions need advanced and
emerging technologies that are creatively blended with the existing and rapidly evolving
infrastructures.
As BOP markets are large, solutions that are developed must be scalable and transportable
across countries, cultures, and languages. How does one take a solution from the southern part
of India to the northern part? From Brazil to India or China? Solutions must be designed for ease
of adaptation in similar BOP markets. This is a key consideration for gaining scale.
The developed markets are accustomed to resource wastage. For example, if the BOP
consumers started using as much packaging per capita as the typical American or Japanese
consumer, the world could not sustain that level of resource use. All innovations must focus on
conserving resources: eliminate, reduce, and recycle. Reducing resource intensity must be a
critical principle in product development, be it for detergents or ice cream.
Product development must start from a deep understanding of functionality, not just form.
Marginal changes to products developed for rich customers in the United States, Europe, or
Japan will not do. The infrastructure that BOP consumers have to live and work in demands a
rethinking of the functionality anew. Washing clothes in an outdoor moving stream is different
from washing clothes in the controlled conditions of a washing machine that adjusts itself to the
level of dirt and for batches of colored and white clothes.
Process innovations are just as critical in BOP markets as product innovations. In developed
markets, the logistics system for accessing potential consumers, selling to them, and servicing
products is well developed. A reliable infrastructure exists, and only minor changes might need to
be made for specific products. In BOP markets, the presence of a logistics infrastructure cannot
be assumed. Often, innovation must focus on building a logistics infrastructure, including
manufacturing that is sensitive to the prevailing conditions. Accessing potential consumers and
educating them can also be a daunting task to the uninitiated.
Deskilling work is critical. Most BOP markets are poor in skills. The design of products and
services must take into account the skill levels, poor infrastructure, and difficulty of access for
service in remote areas.
Education of customers on product usage is key. Innovations in educating a semiliterate group
on the use of new products can pose interesting challenges. Further, most of the BOP also live in
"media dark" zones, meaning they do not have access to radio or TV. In the absence of
traditional approaches to educationtraditional advertisingnew and creative approaches, such
as video mounted on trucks and traveling low-cost theatrical productions whose job it is to
demonstrate product usage in villages, must be developed.

Disclaimer
Products must work in hostile environments. It is not just noise, dust, unsanitary conditions, and
abuse that products must endure. Products must also be developed to accommodate the low
quality of the infrastructure, such as electricity (for example, wide fluctuations in voltage,
blackouts, and brownouts) and water (for example, particulate, bacterial, and viral pollution).
Research on interfaces is critical given the nature of the consumer population. The heterogeneity
of the consumer base in terms of language, culture, skill level, and prior familiarity with the
function or feature is a challenge to the innovation team.
Innovations must reach the consumer. Both the highly dispersed rural market and a highly dense
urban market at the BOP represent an opportunity to innovate in methods of distribution.
Designing methods for accessing the poor at low cost is critical.
Paradoxically, the feature and function evolution in BOP markets can be rapid. Product
developers must focus on the broad architecture of the systemthe platformso that new
features can be easily incorporated. BOP markets allow (and force) us to challenge existing
paradigms. For example, challenging the gridbased supply of electricity as the only available
source for providing good-quality, inexpensive energy is possible and necessary in the isolated,
poor BOP markets.
Data Analysis: Emerging BOP Strategies

Varying Definitions of BOP
A key aspect that has emerged over the last decade with respect to BOP has been the liberal
way in which it has been interpreted. Some companies have talked about the Next Billion (Bhan
& Tait 2009). Some have focused on the Next 4 Billion. Some focused on the Bottom Billion.
There is also significant debate on who are at the Bottom of the Pyramidpeople living on less
than $2/day or $1/day? What about people earning more than $2/day but still in poverty without
adequate access to world class goods and services? For example, in the telecom sector, the
BOP in 2000 consisted of almost 95% of the population that was deprived of basic access to
telephony.
There is also a growing focus on the Middle of the Pyramid, or the aspiring middle class. A recent
study by the Economist concluded that half the world can be classified as the emerging middle
class; defined as a population living on $213 at 2005 Purchasing Power Parity prices. They
have discretionary income and spend on education, health, energy, transportation, and personal
care. This market by some estimates includes 2.6 billion people in 2005 and is rising fast. Asia
alone is expected to have approximately 60 percent of the global middle class. Most of the
growth that we have seen in the FMCG sector in recent years can be attributed to the section of
the pyramid rather than truly the bottom of the pyramid. Further, a majority of MNCs have
focused on the middle pyramid so far, including Procter & Gamble, Nestle and Reckitt Benckiser.
Only a few companies such as HUL and ITC have gone truly rural in their reach, although as is
covered later in the case studies, they see it more as an investment for the future rather source
of present profits.
The 4 billion people who constitute the Bottom of the Pyramid are not a monolith. For those who
want to engage in this opportunity, there is no single universal definition of the Bottom of the
Pyramid that can be useful. The definition must fit the focus for productive engagement.
Companies can and do choose to serve any segment of the 4 billion. No institutiona firm or
nongovernmental organizationneeds to serve all of the Bottom of the Pyramid. They can pick
and choose. Most FMCG firms till today have direct reach up to villages with population of 5000
people.
The concept of the emerging consumer allows each firm to decide which segment of the Bottom
of the Pyramid it wants to serve. Some firms, such as Unilever that have a long history of working
in developing markets, now focus on "Straddling the Pyramid"participating across the entire
spectrum of opportunities often with the same category of products. It is fair to say that the idea
of the Bottom of the Pyramid as an opportunity has firmly taken root in the FMCG sector.
Innovation
The process of innovation for the BOP has forced a new set of disciplines. First, the focus is on
price performance. Innovations must become value-oriented from the consumers perspective.
The BOP focuses attention on both the objective and subjective performances of the product or
service. Markets at the BOP also focus on the need for 30 to 100 times improvements in price
performance. Even if the need is only for 10 to 20 times improvement, the challenge is
formidable. Serving the BOP forces a new business model on MNCs. Management systems
developed for a price performance level cannot be fine-tuned to cope with the demands of the
BOP markets. And most MNCs have now adapted to the needs of the BOP.
According to Mr. Banga, former CEO of HUL, BOP markets can collapse the time frames taken
for products, technologies, and concepts to diffuse in the system. Many of the drivers of change
and market growthderegulation, involvement of the private sector in BOP markets, digitization,
ubiquitous connectivity, and the attendant change in the aspirations of people, favorable
demographics (a young population), and access to creditare simultaneously present in BOP
markets. These drivers interact. The result is the challenge to the "S curve" that is the model for
the diffusion of new products and services in the developed world. The changes that played out
over 15 years in the developed markets are being collapsed into a short period of just three to
five years in many BOP markets. Mr. Banga suggests that the real challenge in BOP markets is
that managers have to cope with the "I curve."
Figure 3: The S-Curve and I-Curve
Source: CK Prahalad, Fortune at the Bottom of the Pyramid Revised, 2009
The I-curve has different implications for scaling. The timing of investments, investment intensity,
and the pace of market and distribution development become crucial, as is the rate at which
costs must be brought down to fuel growth of the market.
What are the best sales strategies for a FMCG
product?
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6 Answers
Shivam Chhuneja, Masters Business, Hult International Business School

Written Jan 23
Since they are fast moving commodities, one obvious way that businesses use are sales. 25% off
for example.
However, that is more traditional, and when consulting we do not suggest sales all the time as it
kills the margins for the company/shop.
One trick we do as marketers is develop an urgency for the customer. So even if they do not need
it right away they are forced to buy it and store it. For example, if you buy 2 bottles of coca cola
you get $1 off.
2. Urgency can be developed by phrases as till stocks last, putting some sort of deadline, use of
word special.
The reason to do this is to develop an emotional spike in the mind of the consumer so as to help
them make a decision right away.
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Abhinav Singh, studied at Information Technology

Written Sep 9, 2016
It is the basic of sales, M.A.D.
1. Marketing
2. Advertising
3. Distribution
Assuming that you have already done a feasibility study and clearly outlined your products
competitive edge, you have to tell your potential buyers about the virtue of your product through
Marketing and Advertisements. Apart from conventional print or audio visual media, social
media forum is also a huge platform for such marketing these days.
Distribution has to be one of the most important factor here, a strong supply chain
management will ensure that your product is in within visual range of potential buyers across
cities, town and villages.
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Simon Blackburn, Freelance Strategy Consultant (2015-present)

Written Mar 9
The most effective answer relies heavily on the type of product, and the market its in. to try and
summarise this in a post, lets go back to the 4 Ps:
Product
A lot of the larger FMCG companies invest a lot of time and effort into understanding competitor
products in the market place. What they (sometimes) neglect is a deep understanding of what
makes their product different to others, and exploiting these nuances. How does the product
make your consumers feel? What is the brand message? Does it perform a different role to
others? Does it get consumed at different occasions? Understanding who your customer is, how
they interact with your product, and why they purchase it is very important. This analysis then
informs
Price
One CRITICAL principle in pricing is that pricing is RELATIVE. The price you sell at needs to
match your customers expectations of what they would pay for something of that quality. Price it
too low and you devalue your brand. Price too highly and nobody will buy. FMCG companies tend
to adopt one of 2 pricing strategies: HILO and EDLP. HILO is putting a product at a high shelf
price, so you can promote it down to a lower, more attractive price when it matters, to drive
impulse purchases. EDLP is having your product at the same price all the time (it stands for every
day low price). Examples of products that work well on HILO include chocolate, biscuits, and
wine. Examples of products that work well on EDLP include garbage bags, milk, and home basics
Promotion
If you think your product can drive incremental volume if it goes on promotion, then you also
need to consider your promotion strategy. Deciding what time of year, how often, for how much,
and what pricing mechanic to use are all very important to the success of your promotion. Your
promotion strategy should also be aligned with your brand strategy (e.g. dont use 60% discount
on a luxury product!), as well as your customer use case (e.g. dont offer a 2 for $x if your average
customer only buys 1 a year!)
Place
As other people have mentioned, distribution is VERY important. Getting your salesforce out to
the most profitable, AND the largest channels of distribution is not only critical to growing your
product sales, but also in increasing your brand presence, which will in turn drive demand. Ways
to get your product stocked on shelves include:
Offering freebies. Works particularly well in impulse channels, where independent

stores like the idea of getting things for free (e.g. a branded fridge)
Undercutting your competitors (in price, or in margin, or both). Works particularly
well in price sensitive channels such as the discount channel. The key here is to play
the portfolio game, so that margin loss on some products are counteracted by profit
gain in others, that form part of the deal with your discounter
Fulfilling a purpose. If youre the only player in the market that fills a particular use
case, then you can drive incremental value for your retailer, which is highly attractive
Getting consumers to shout about you! The voice of the consumer is very powerful.
Getting people to talk about you, and create a buzz around your product, will make
buyers far more likely listen to your sell in story
Im considering writing a book on this topic, so please do let me know if this has been helpful!
Akshay Modi, Executive Director, Modi Naturals
Anil Mascarenhas, IIFL | Mumbai | September 17, 2016 11:29 IST
Modi Naturals is moving towards capturing the refined oil market, which is value-adding
and this concept is growing in popularity. In edible oil, the defining criteria include Taste,
Fatty Acid Profile, and Antioxidants level, Enrichments, Frying Performance and lastly the
Brand.
A a
+ - 0
Akshay Modi, Executive Director, Modi Naturals, is an
Engineer from the University of Leeds, U.K and an alumnus
of The Doon School. The companys foray into packaged
edible oils under the brand names Oleev and Tarai is the
brainchild of this 29-year old visionary entrepreneur. He is
also on the Board of Modi Infratech Private Limited.
In an interaction with Anil Mascarenhas of IIFL, Akshay

Modi says, Modi Naturals is moving towards capturing the
refined oil market, which is value-adding and this concept is
growing in popularity. In edible oil, the defining criteria
include Taste, Fatty Acid Profile, and Antioxidants level,
Enrichments, Frying Performance and lastly the Brand.
India is the fourth largest edible oil consuming country and one of its largest
importers. What explains Indias lack of self-sufficiency in edible oil?
India is the worlds largest importer of Edible Oils and is likely to remain so in the
foreseeable future. We have to rely on imports on two major counts, one, a dense
population of over 1.25 billion people and two, the fact that domestic production falls
short of meeting the ever growing demand. India has imported 14.4 mt (crude and refined)
during the oil year (November 2014October 2015), worth around $10 billion. The
country's edible oil import bill is likely to jump in 2016-17, due to rising prices and a
burgeoning supply deficit from local sources. The bill in 2015-16 might cross $11.5-12 bn
and to $14.5-15 bn in 2016-17.The import has risen 50 per cent over four years. Since the
past 13 years, output from domestic sources has moved in a narrow range of 5.57.25
million tonnes (mt), due to both negligible innovation in farming techniques and
unfavourable duty structure, which discourage farmers from producing oil seed crops.
The overall edible oil market is roughly around Rs.1, 25,000 crore growing at 7 -8%
annually. The organised market share has improved recently, roughly placed at 50% of the
overall market which is seeing a CAGR of 15%. Thanks to the growing awareness of the
virtues of packaged oil, more and more people from urban and rural areas alike are shying
away from using oil in sold in loose form.
Given the rising number of cardiac cases from lifestyle changes and food
consumption habits, to what extent can the use of right combination of oils help in
reversing the situation?
According to the National Family Health Survey in India, 13 percent of women and 9
percent of men in India are overweight or obese. Obesity increases the chance of other
lifestyle disorders. According to the WHO, cardiovascular diseases, which affect heart and
blood vessels resulting in heart attacks or strokes, account for 26% of deaths in India, or
2.5 million people. A conservative estimate finds 30 million CHD patients in India, 14
million from urban areas and 16 million from rural pockets. About 25% of deaths in the
age group of 25-69 years happen due to heart disease which accounts for about 19% of all
deaths across all age groups. So, adopting the right lifestyle is definitely an issue in India.
Oil is indispensable to any meal, and the most important factor to watch out for any health
related issue. Every doctor would suggest using blended oil as no one oil can give you
every health benefit. Awareness building can play a major role in boosting the use of
blended oils. The Olive oil Revolution initiated by the Spain olive organisation is running
an effective campaign through a 60 second ad flashed across 25 prime channels across 6
metros coupled with print ads but a lot more needs to be done to promote consumption
of healthy edible oil. Its heartening to note that the urban Indian has learnt to prioritize
health over taste; which is evident from the growing market for healthier edible oils.
Whats the size of the market in terms of annual consumption and production?
India accounts for an annual consumption of roughly 17 mn tons, the per capita
consumption is at 14.5 kg p.a., which is relatively low compared to the world average of
23.5 kg p.a. Our domestic production is estimated to 8.5 mn tons. Oil is an indispensable
factor in every household for cooking. Its a commodity required by all so the demand is
everlasting. Popular cooking medium used in India include: sunflower oil, mustard oil,
groundnut oil, soya bean oil, palm oil and coconut oil. On the other hand, the demand for
olive oil is steadily increasing. Mustard, soya bean and palm oil account for over 75% of
total edible oil consumption and around only 16% of Indian households consume branded
edible oils. Among branded oil, refined oil accounts for 60% of consumption and crude oil
accounts for the balance. Branded edible oils have penetrated 31% of households in urban
areas and only 9% in rural areas overall. Hence, there is a huge scope for the branded
edible oil players.
Down South, the preference is for coconut oil. In the West, the vote is in favour of
Groundnut while North and East prefer mustard. How do you cater to different
markets?
Every household uses multiple types of oil - flavoured as well as refined. As you rightly
mention, North-East Zone uses Mustard Oil/ Soya Oil, West Zone uses more of Groundnut
oil, whereas the south Zone uses more of coconut. These are the flavoured types of oil.
Modi Naturals is moving towards capturing the refined oil market, which is value-adding
and this concept is growing in popularity. In edible oil, the defining criteria include Taste,
Fatty Acid Profile, and Antioxidants level, Enrichments, Frying Performance and lastly the
Brand. Modi Naturals has undertaken in-depth R&D to create products to cater to
customers all over India.
How did the company evolve from a contract producer for other brands to launching
your own brands?
Modi Naturals began life in 1974 under the visionary leadership of Mr. Devi Dayal Modi.
From setting up an edible oil factory in Punjab in 1974 to getting listed at the Bombay
Stock Exchange, our journey has been truly momentous. From 2003 to 2005, we were the
largest processors of Rice Bran in India and won a recognition award from the Solvent
Extraction Association of India. Mr. Anil Modi, currently the chairman of the company,
was in the business of manufacturing sunflower oil, rice bran oil, mustard oil, de-oiled
cakes and rice-bran wax which was more of commodity business that was sold to various
regional players and few other national players too.
In the year 2009, I joined the family business after completing my higher education from
Leeds University, UK. I worked in the factory initially to get hands on experience.
Eventually I realized that being a processor of edible oil was not very lucrative in the value
chain. Having developed our core expertise in edible oil processing, our aspirations grew.
Thus, in 2010, we renamed the company from Anil Modi Oil Industries Ltd to Modi
Naturals Ltd. Also in the same year, the company launched their first ever brand Tarai,
and since then we have never looked back. After the encouraging response for Tarai,
Oleev was launched in the year 2012, followed by Miller, Olivana Wellness Oil and
Rizolo in the year 2015. However, the product we are most proud of is Oleev Active, our
flagship product, which combines the goodness of olive oil and rice bran oil.
Olive Oil is witnessing increased attention. What are your offerings here?
Olive oil is one of the healthiest oils compared to all the other edible oils available for
cooking. Some of the key properties of olive oil are: 1. highest content of Mono -
unsaturated fatty acid which is an essential nutrient for the body. 2. lowest content of
saturated fatty acid and other harmful fats. 3. Large amount of anti-oxidants 4. High
profile of Vitamin A, D, E, K, B-Carotene that helps to prevent cancer, reduce the effects
of ageing and increases life expectancy. It also helps to prevent and control diabetes,
facilitates digestion and it also helps prevent coronary heart disease. Olive oil together
with Rice Bran Oil makes for the healthiest combination.
Under the Oleev brand, Modi Naturals offering includes extra virgin, extra light and
pomace olive oils and Oleev Active, which is a blend of olive oil with rice bran oil at Rs.
165 per litre. Today, there are hundreds of thousands of households which use Oleev
Active repetitively. Under Olivana Wellness, we offer olive oil for cosmetic, spa and
baby care use.
In the health oil category of Big Bazaar, Modi Naturals has ~30% share, No.2 after
Maricos Saffola. In overall modern trade, MNL has managed to acquire ~20% market
share. The pure olive oil category, is roughly around Rs. 250-300 crore market in India.
There is huge potential in this market as its growing at roughly 40% annually. The
healthy premium oil market would be roughly a INR 2,000 crore market, which is mainly
dominated by Maricos brand Saffola.
Brief us on your manufacturing facilities. What steps are you taking to improve your
distribution?
At Modi Naturals, we have end-to-end manufacturing facilities with all state-of-the-art
technology at our plants in Pilibhit Ditrict in Uttar Pradesh. Also, in the last quarter of
FY16, we have made certain upgradation to improve our efficiency. As of now, our
capacities are 300TPD of crushing capacity, roughly 700 TPD extraction capacity, 200
TPD refining process unit and the packaging & blending capacity are roughly 100 TPD.
Similar to the chicken and egg riddle, advertising your brand comes to a naught without a
good distribution network. At Modi Naturals, we first set up our distribution network and
then went for brand promotion. Today, our products are readily available to the consumer.
Modi Naturals products are available in modern trade, retail trade stores and also on e -
commerce platforms. Right from Big Bazaar to Wal-Mart to Tesco, theres no retail store
without Modi Naturals products. Modi Naturals has a presence in nearly 40,000+ retail
outlets through over 400 distributors. We are present in roughly 3,500 Modern Trade
stores. We have recently tied up with Army Canteen Stores too. Our sales team comprises
300 executives and 450 merchandising/in-store promoters.
What is the contribution from major departmental stores? Whats your online
presence?
Currently, our modern trade and retail trade businesses are evenly split in terms of revenue
contribution. Talking of online, our products are available on Grofers, Local Banya,
Snapdeal, Amazon.com, Big basket and almost all the leading platforms. But the revenue
from online sales is still negligible. However, with greater acceptance of online grocery
shopping, we expect a strong outcome in the near future. We are very positive about hyper
local shopping.
Tell us more about some of your high-revenue products. Whats the segment-wise
break-up?
The companys topline was Rs.1,158 mn in the year 2010, wherein the revenues were
generated fully from the non-branded business. Fast forward to the year 2014, wherein the
total revenue was 2,098 Mn, in which branded business contributed roughly around 14%
of the topline, whereas in the year 2015, 18% of the total revenue ie. Rs. 2,339 mn was
branded. In FY16, out of total sales of Rs. 2,699 mn, roughly around 29% Sales were
branded sales. Under the branded sales, 85-90% of the revenue is contributed by the Oleev
Brand. In FY17, we expect contribution from branded sales to be even higher.
Brief us on your financials and outlook?

The companys top line has seen a CAGR of 11.5% for three years. The branded business
has grown exponentially. The companys gross margins have improved from 15% to 20%
in FY16. The EBITDA margins of the company in FY16 are roughly 3%, which in the
future with the share of branded sales expanding, will grow significantly. By 2020, the
target is to have 70% of the topline from its branded business, which will reflect in higher
EBITDA margins of the company. The company incurs huge advertisement & distribution
expenses to expand its presence pan India and will continue to do so in the near future.
What are the opportunities and challenges for your business? What would be the
next triggers for growth?
The Indian edible oil market is significantly large and we have a huge market to tap, one
that gives us the opportunity to create an enduring brand that resonates with our
customers. Our biggest challenge of scaling up is maintaining our profitability. Optimum
utilisation of resources, strong brand and a strong distribution network are all critical
factors in this regard. Modi Naturals has spent significant time and resources in developing
a strong brand and distribution network and most importantly, backward integration has
helped us mitigate most concerns. The triggers for growth are many, but the most
important one is the higher demand-side preference for a healthy product and the
encouraging response to our flagship product, Oleev Active. Further, we see a huge
consumption shift from loose oil to packaged oil.
With GST well on the way towards implementation, what impact do you see for your
business?
Theres a lot hinging on GST. This has been one of the most crucial bills and one of most
significant reforms for the Indian economy. Given the confusion relating to the rate, clarity
is needed to assess the likely benefits for our sector. At present, theres a wide divergence
in the effective indirect tax rates relating to the product-specifications and area exemption.
On the other hand, huge logistical benefits would accrue from the elimination of local tax
collection at check posts. Also post GST, the availability of input credit on the services
will be available and which in turn will aid the margin expansion. But all of these squarely
depend on the rates. Quite simply, if the rates are higher, we would have to pass on the
expenses to consumers and if the rates are lower, we can pass on the benefit to the
consumers.
Give us an idea of your geographical presence.

Since the company is located in northern India, we launched our first brand in the north to
test waters. Hence, the North contributes around 40% of the topline. Subsequently, we
have spread our distribution across India.The West and East region contribute equally to
the topline. We started our operations in the southern region last; hence our distribution
there is the weakest, though in the forthcoing quarters it will come to the same level as the
rest of the regions.
How do you source raw materials? Whats the price trend here?
Since India lacks in the production of olive oil, it is imported mainly from Spain. Canola
Oil is imported from Canada. Apart from these two, the others like rice bran oil, mustard
oil, sunflower oil, are produced at our unit in Pilibhit. The last few years have been bad for
Indian crops and a good monsoon this year should bring cheer all around. This doesnt
necessarily impact prices as Indian rice bran follows prices of other global oil
commodities such as soya and palm. A better harvest means more processing volumes. As
for Olive oil, the last 2-3 crops have been below average across the meditterranean, the
main producing region. This year we expect a good crop, which should bring the prices
down by up to 20%.
What is the vision for your company?

Our vision extends from healthy naturally to happiness for all. At Modi Naturals, we
believe that good health is at the centre of happy living. We reinforce our commitment to
society with a three dimensional sustainability program that helps bring happiness to
hundreds of farmers and their families, educates their children and protects the
environment. We would continue to deliver products of impeccable quality that would
always live up to our brand promise. We believe in being mindful of any kind of
environmental impact our products, or their process of production would have. Our
unrelenting emphasis on innovation is aimed at bringing new and improved products for
our consumers.
You have also upped your marketing spend.

Modi Naturals is now the fourth largest advertisement spender in the edible oil category.
Although we have a strong product portfolio and pan India presence, we are focusing on
advertising to spread more awareness about our products. Stars Jimmy Shergil & Isha
Talwar are our brand ambassadors and our ads are aired on Hindi mainstream channels
like Sony, &TV, Colours and StarPlus. With our association with the Masterchef Australia
show on Star World, we have now forayed into the English Channel space. We are present
on all social media platforms and expect the fruits of our focused visibility campaigns to
materialize soon.
Brief us on your capex plans. Whats the shareholding pattern? Any plans to sell or
raise stake?
The company had undergone small capex in the last quarter of FY16, for upgradation of
the manufacturing facility for better efficiencies. Currently, our capacities are sufficient
for branded sales of approximately Rs. 300 crore. So there are no major capex plans in the
near future for us. 74% of the holding is with promoters, 20% is held by the Public and 6%
is with FIIs. We dont have IPO plans in the near future.
Adani Wilmar Launches Outdoor Campaign to
Promote Fortune Sunflower Oil
By AdAge India Bureau, Published on Jan 30, 2016, 07.03 AM IST
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Adani Wilmar has joined hands with Paytm for its new campaign, 'Make Your
Fortune'. The campaign is aimed at their edible oil brand 'Fortune's' Sunflower
variant.
The campaign assures that buying a Fortune Sunflower Oil pack gives consumers
up to Rs 100 Paytm cash. Moreover, it provides the customers a chance to win
various other prizes. Under the promotional campaign, users will get Rs.30 and
Rs.100 Paytm cash on purchase of every 1ltr pouch and 5ltr jar of Fortune
Sunflower Oil.
The campaign is designed and conceptualized by Organized Outdoor Options.
Rohit Markanday, Senior Manager, Trade Marketing, Adani Wilmar, says, "As this
the first of its kind consumer promotion in edible oil category, we wanted to create
high decibel visibility campaign. To give an analogy of defence, if ATL campaign
act as an air strike and then BTL campaign act like foot soldiers; it captures the
attention of 'Customers when they are out of home'."
The brand has launched the campaign at several touch points such as Buses, Bus Q
shelters, Bill Boards in all the 4 southern states along with EMUs in Chennai.
Besides this they have done extensive branding of category inside the Modern
Trade Stores and an extensive POP drive in GT.
Ritika Khatri, Business Head, Organized Outdoor Options, opines, "Our main
objective is to provide one stop solution to the client by giving maximum branding
options and we are taking great care in formulating and executing a plan that
would create a powerful impact across the target group."
The brand had been providing variety of healthy cooking oils for over a decade
now. Through this campaign, it aims to reward its loyal customers.
Fortune is one of the flagships brand from Adani Wilmar portfolio. The product
portfolio of Adani Wilmar spans under various brands such as - Fortune, King's,
Bullet, Raag, Avsar, Pilaf, Jubilee, A-Kote, Fryola, Alpha and Aadhaar.
Patanjali Vs Dabur. The ad war for
your attention
BUSINESS Updated: May 04, 2016 11:15 IST
Himani Chandna
Hindustan Times
Baba Ramdevs Patanjali Ayurved has been aggressively promoting its FMCG products to capture a higher
market share. Not one to let competition get an edge, Dabur has begun an ad war with the Yoga Gurus
company.(HT Archive)
FMCG giant Dabur has waged war against its rival, Baba Ramdevs
Patanjali Ayurved.
Newly emerging firm, Patanjali had sounded the war bugle with an
advertisement, last December, which claimed its honey brand is safer
and cheaper than other brands in the market. Patanjalis television
advertisement displays a bottle of honey,that looks very similar to a Dabur
bottle, and goes on to claim that the price of Patanjalis product is much
cheaper than other brands. Its just Rs 70 and not Rs 122 (the exact price
of Daburs product for its 250 gram pack), the ad claimed.
Ads by ZINC
So it is Daburs turn now. Last month, Dabur launched a counter ad
claiming its honey to be Food Safety and Standards Authority of India
(FSSAI) approved -- which means the product is tested and licensed by
food regulator and hence is much safer. It also claims that safety and not
the price tag should determine a consumers choice of brands. Daburs ad
plays on the fact that Patanjalis honey is not FSSAI approved and hence
its quality is questionable.
SK Tijarawala, spokesperson for Patanjali told HT that quoting similar

price and displaying similar bottle of honey is a mere coincidence. It
could be a mere co-incidence where we quoted price of Rs 122... Our
products are natural, hence, no FSSAI approval is required. Tijarawala
claimed that sales for its honey brand has grown at least eight fold in last
one year and they dont see any competition for its products. However, he
refused to share sales figures.
Dabur refused to comment.

Recently, the industry body for edible oil, Solvent Extractors Association
(SEA) of India had filed complaints with FSSAI and advertising industry
watchdog ASCI against Patanjali Ayurved for alleged misleading ads for
mustard oil and sought action against the yoga guru promoted firm. SEA
complained that the companys recent advertisement for Kacchi Ghani
Mustard Oil was not in good taste and intends to create panic against
solvent extracted oils and refined oils.
Tips for finding buyers on the European
vegetable oils market
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Europe is a major importer of vegetable oils from all over the world, and an
important gateway to global distribution networks. Still, it is not always easy to
identify and get into contact with the right buyer for your product. Here are a
number of tips to help you in this process.
Contents of this page
1. Get to know your target market

2. Review the websites of sector federations, associations and trade
press
3. Participate in trade fairs
4. Contact trade promotion organisations
5. Make use of matchmaking programmes and trade missions
6. Use online trading sites
7. Use direct marketing methods
8. Understand your potential buyers
1 . Get to know your target market

Europe is a major importer of vegetable oils from all over the world. It is an
important gateway to global distribution networks but can be difficult to
access.
As you start your search for European buyers, you must get to know the
structure of your target market. Ask yourself:
Which markets and channels offer the best opportunities for your
product?
What is my product used for? As an ingredient for further processing or
as an oil for final consumer use?
Who are the main importers of your product and what are their buyer
requirements?
What is the demand for your product per country?
You also need to assess the competition and identify your competitive
advantage (Unique Selling Points or USPs).
All of these aspects will give you a good working knowledge of your target
market, and help you find the right buyers.
When it comes to sales channels, you must consider which is the most
suitable for you: selling directly to the end-user, through importers or traders,
or through agents and brokers.
Tips:
Read our market studies about the European market for vegetable oils.
Look for statistical information on ITC Trade Map and EU Export
Helpdesk: My Export.
2 . Review the websites of sector federations,

associations and trade press
Europe has a federation dedicated to the vegetable oils market
called FEDIOL (the federation representing European Vegetable Oil and
Proteinmeal Industry). National associations of seed crushers and oil
processors from 17 different EU countries are all members of FEDIOL.
On the FEDIOL website you will also find members from different levels of the
European market, including traders, crushers, refiners, and manufacturers.
FEDIOL publishes a list of its members on its website. This is a good place to
look for potential buyers.
Other national and sector-specific associations in various European countries

also publish online member lists. Germanys sector association OVID, for
instance, lists 20 member companies. These include oilseeds crushers, as
well as companies involved in purchasing and transporting vegetable oils.
You should look for sector associations in the countries where there is the
most demand for your products.
Further, it is vital to follow relevant trade publications in the vegetable oils

sector, like:
Oil World (an forecasting service, with price information and market
intelligence)
Oils and Fats International magazine (published 8 times per year)
Other sources for market information include Agra and The Public Ledger.
Tip:
Go to the FEDIOL website. Find the links to the different sector

associations website. This is a good way to find and download the
member lists of members by sector and/or by country.
3 . Participate in trade fairs

Participating in trade fairs is a good way of meeting potential buyers and/or
acquiring market information. Most European buyers of vegetable oils go to
trade fairs such as Food Ingredients Europe, Oils and Fats, Anuga, BioFach
and SIAL. They go there looking for potential trade partners like you. Whilst
the In-Cosmetics trade fair targets the cosmetics market, you will also find
companies there that work in the food industry.
Important trade fairs in this sector are:
Anuga is the worlds leading food fair for the retail trade and the food
service and catering market. It is a useful trade fair for discovering new
trends and learning about the European consumer market. It is held
every two years in Cologne, Germany.
SIAL is one the worlds largest food exhibitions, encompassing a
number of food ingredients and final products. SIAL is held every two
years in Paris, France.
Oils and Fats, a biannual business platform for the European oils and
fats industry in Munich, Germany.
Food Ingredients Europe is a trade fair which deals with various food
ingredients. Fi Europe takes place every two years in different
European cities.
BioFach the most important international exhibition for organic food
and fair trade products, held every year in Nuremberg, Germany. It is a
crucial trade fair to visit or exhibit at, for companies selling certified
organic products.
In-Cosmetics this is the leading global business event for personal
care ingredients which brings together suppliers, formulators, R&D and
marketing specialists. It is held every year in a different European city.
The costs of exhibiting at a trade fair can be high. If you do not have the
budget, or feel unprepared to take part as an exhibitor, then you can attend as
a visitor.
Visiting a major trade fair in Europe is a good opportunity for learning about
your target market. It is a good place for carrying out market research.
Tips:
Visit the stands of vegetable oil importers exhibiting at the shows - you
can find these in the exhibitor lists online.
Introduce yourself, your company and your products - this is a good way
of establishing initial contact and future business partnerships.
Study the online exhibition catalogues of trade fairs. This is a good way
of identifying potential buyers without visiting the event. See for
example the exhibitor list of ANUGA.
Search by product category for effective research before you leave for
the event.
4 . Contact trade promotion organisations

Many European countries have governmental organisations that promote
imports from developing countries. They generally work with small and
medium-sized enterprises (SMEs) and can help you export your products to
Europe.
Find an organisation which focusses on your country and product(s). You can
also apply for matchmaking programmes which these organisations organise.
Also consider contacting embassies (or trade attach) in your own country, in
the European Union or local European chambers of commerce.
Some examples:
In the Netherlands the Dutch Centre for the Promotion of Imports from
developing countries(CBI)
In Germany the German Import Promotion Desk (IPD)
In Switzerland Swiss Import Promotion Programme (SIPPO)
In Belgium the Belgian Development Agency (BTC)
In Finland the Finnish Import Promotion Organisation (Finnpartnership)
5 . Make use of matchmaking programmes and trade

missions
Participate in matchmaking programmes and trade missions. These can be a
good way of getting to know a new market and developing contacts with
potential importers.
Many countries organise trade mission to promote their export sectors. Joining
such visits can be an effective way of expanding your network.
When considering taking part in a foreign mission or matchmaking event, you

need to check whether vegetable oils is one of the focus areas. Otherwise, it
might be a waste of time.
Tips:
Find trade promotion organisations in Europe.

Search for export promotion programmes.
Contact governmental organisations, embassies or chambers of
commerce.
6 . Use online trading sites

European buyers prefer direct contact with suppliers. They also like to make a
detailed assessment of potential suppliers before entering into contracts.
However, online trading sites can give you access to less traditional markets,
or allow you to promote specific products such as mustard oil or avocado oil.
This is especially useful if you dont have a large budget to spend on
marketing.
Register and publish your company details and products online. For a lot of
online trading sites, this is free of charge.
Make sure you analyse the responses you receive from these online trading
sites critically. Some contacts can be of value to your business. Others may
be less interesting or even unreliable.
Prospect databases are another source for finding sector players and
achieving trade agreements. Here are some examples:
Foods for Trade, a leading Business to Business (B2B) marketplace for

the food industry. It offers a company profile service and member
accounts for business partners and promotes companies through trade
leads. Subscribers can also create customised advertising packages
targeted at potential buyers.
The Food World, which provides a useful database of companies active
in specific food categories.
Organic-Bio, an online database which compiles a list of the main
companies worldwide, dealing with organic (and often fair trade)
products. You can specify your search at product level, filtering by Oils
and Fats. Both producers/exporters and buyers can be found in this
database.
Go4WorldBusiness, where you can search for European buyers per sub
category of edible oils.
Tradekey, where you can search for vegetable oil buyers by country.
7 . Use direct marketing methods

Writing emails directly to potential buyers is a good way of introducing your
company to new prospects. Make sure you adjust your message to the
individual requirements of each company and its business activities (see tip 8
below).
Be sure to explain following items and follow up your email with a phone call:
Who are you?

Why are you contacting the buyer?
What are you selling? What are the product specifications? What are
the applications?
How do you manage quality?
What quantities are you offering?
How will you deliver your product?
Where and when can you deliver your product?
Why should they buy from you? In other words: what are your unique
selling points (USPs)?
8 . Understand your potential buyers

Before you contact potential buyers, you need to be well prepared. It is
important for you to understand each individual buyer and what their
requirements are. Buyers in the vegetable oils sector receive calls and emails
from potential suppliers every day. This means that you will need to convince
them of your products and your services above all others. This can be difficult.
Visit the website of the company you wish to contact. Get as much information
as possible:
Which segment is the buyer operating in (bottling, food, processing,

wholesale etc.)?
What are his or her requirements (quality, certifications etc.)?
Search for the company on the internet and see if you can learn more about
their specific needs or who they already work with.
For more general information, try researching European buyers and what they
expect. Keep up to date with sector news and doing business in Europe.
Being well prepared will help you in your contact with European buyers and
establishing long-term business relationships with them.
Tips:
Read our study on doing business with European buyers of vegetable

oils.
Check the Ingredients Network for potential buyers. Also use
Ingredients Network for news on trends, prices, buyers, legal and
private requirements from the vegetable oils industry. This magazine is
linked to the Food Ingredients Europe trade fair.
Look for price information and market intelligence at Oil World. This is a
forecasting service.
Consider subscribing to Oils and Fats International (OFI) magazine. OFI
is the leading international magazine for the oils and fats industry and is
published eight times a year. Each issue has dedicated news pages on
market developments, biotechnology, biofuels, renewable materials and
transport/logistics. The magazine also features statistics, regular market
reports and in-depth features.
Consult Agra and The Public Ledger for information on prices and
trends.
Check Food Navigator for find information on sustainability, scientific
study results and product development news (you can select specific
sub-sectors).
Look for market information in the organic sector at Organic & Wellness
News. This is an online magazine for the organic market addresses
news items and broader themes such as sustainability, health and
product innovations.
Brand Story: Fortune Cooking Oil
Fortune, today, is the biggest brand of cooking oil in India. It was launched in the year 2000. Let
us look at how the brand has evolved in the last 12 years.
Successful Launch in Year 2000

Fortune was launched as the 'better oil'. The communication centered around 'guilt-free' eating. It
was targeted at the health conscious consumer who is unable to enjoy the food as he/she is
concerned about the ill effects of oil. The message was captured in the phrase "Thoda Aur
Chalega" (a little more will do).
The launch was extremely successful and within two years Fortune was the No. 1 brand of
cooking oil in India. How was this unusual feat accomplished? Business Standard came up
with a detailed analysis in May 2004. They found out various reasons: (a) Having a port based
refinery and not outsourcing the manufacturing led to significant cost savings. (b) Focus on
Soyabean oil. In year 2000 Sunflower was a tougher market with many players and Soya was
relatively easy. Fortune focussed on Soyabean. It was able to give a superior quality oil (no fishy
smell). (c) Fortune kept its price low initially and generated a lot of trials. (d) Aggressive
promotion of the brand during launch along with a vast distributor network ensured the brand
took off immediately after launch.
Fortune was launched at a time when only a few national players were around; Sundrop,
Sweekar, Saffola, Dhara and Gemini. Of these, Sundrop and Saffola were in the premium
segment. Fortune positioned itself in the value for money segment. It gave a good quality
oil at a reasonable price.
Early Years of Rapid Growth

By the end of 2003, Fortune had 17.25% share of the Indian packed refined oil market. A great
feat considering the category is a commodity and difference between different types of oils is not
significant. Though the brand did well, it was mostly due to its success in Soyabean oil.
Sunflower oil was still a long battle. Gold Winner of South had 26% share in India followed by
Sundrop at 21%. Fortune was only at 4.5%.
By now the brand was present in all the categories; Sunflower, Soyabean, Mustard, Groundnut,
Cottonseed, etc. This varied portfolio helped the brand because preferences in India change
from state to state. While Bengal is hooked to Mustard, Andhra Pradesh prefers Groundnut and
Gujaratis love Cottonseed oil. A true national brand needs to cater to everyone's needs. Fortune
did this well.
Not So Successful Brand Extension

In 2007, Fortune extended the brand into hair oils and took Marico's Parachute head on. The
brand was called Fortune Naturelle. The company expected to clock 8-10% share but the
extension was not at all a success. Nothing much is heard of it now-a-days.
Year 2009: New Agency, New Thought
Year 2009 saw an agency change and Triton made way for O&M. The advertising changed too.
Till now most cooking oil ads (barring Saffola) were centered around delicious food, the
housewife cooking and a happy family eating together. The brand broke out of the cliche and
tried to show realistic situations. 'Thoda Aur Chalega' gave way to 'Ab Bas Toot Pado'. Though
the creative was different, the brand stayed true to its 9 year of belief 'the joy of eating'. Watch
the ad here.
Watch the other one as well.
These ads were aired during IPL and gave the brand high visibility. The
brand communication had moved away from what the oil contains and what it does for your
health. It moved to 'enjoying good home made food together'. These ads were in response to a
market research which had revealed that the fast pace of day-to-day life has taken away these
moments from our lives. Fortune wanted to bring it back.
2010: Launch of Fortune Plus

Fortune tried to graduate its consumers to the next level by launching a slightly premium
oil 'Fortune Plus' Sunflower & Soyabean Oil. The oil is around Rs. 5 costlier than the earlier
Fortune and claims to absorb 17% less oil. This move is called 'moving up the value chain'. it is
aimed at increasing the margin the brand earns. Increasing the price of original Fortune would
have led to a decline in sales. Why should one pay Rs. 5 more for the same oil? Hence a new
sub-brand was launched which was positioned in a way that it commands a higher premium.
To launch the variant, the brand signed Saina Nehwal and went aggressive on TV. The tagline of
Fortune Plus is 'Oil that isn't oily' and with this it aims to attract the health conscious young
consumers of the upper middle class.
What is worth debating is, how does this launch affects the parent brand Fortune. Fortune
Plus is a costlier and better oil. Does that mean 'the old Fortune' is not as good and is a
compromise? Fortune Plus has not been a run away success but is very visible in super markets.
Only time will tell if the strategy has paid off.
2011: Har Maa Ke Dil Mein

Fortune has just broken it's latest campaign on national television. This creative takes the brand
to one level up from what it has been doing. Fortune is known to all and is the market leader in
India. Through this TV commercial the brand ties to forge a very strong tie with all its old and
potential consumers. It is trying to own the mother's heart.
The Way Forward

Fortune is the market leader in edible oils market in India. It has around 13% share of the total
branded & packed segment. The Indian market is worth Rs. 90,000 crore, only 40% of which is
branded (packaged). Rest of the market is of loose oil. The branded segment is growing at 15-
20% per annum. With such a good pace of growth, the potential is huge.
Fortune needs to stay ahead of the curve. It should remain contemporary and change with the
times something like Horlicks. Its regular packaging changes keeps the brand fresh. Fortune
needs to keep adding consumers without losing its loyal users. Since product differentiation is
not very easy in edible oils, the real differentiation will be in terms of brand image and
positioning. Oil is bought every month (more than once) and hence staying top of mind is crucial.
Home Marketing mix articles Marketing Mix Of Adani Group
Marketing Mix Of Adani Group

By Hitesh Bhasin December 5, 2016
Founded in 1988 by Gautam Adani, Adani Group now is a multinational conglomerate
company. The headquarters of company are situated in Ahmedabad, Gujarat. Adani Group
has loads to its name; they have not only built an empire that is huge but have built a
company that makes India popular at the international juncture.
The Group happens to be the largest port developer and operator from India; they function in
association with Mundra Port, which is Indias largest commercial port. Adani Group has
involved a bit of them in almost every vertical.
Some of the top verticals they rule can be listed as:
Logistics
Resources
Energy sector
Agribusiness
Packaged materials
Product In The Marketing Mix Of Adani Group

Table of Contents [show]
Adani group sees world as an opportunity and they have been quite diverse with the range of
products launched. Adani is one of those rare business groups, which deals in logistics,
energy sector and in packaged materials as well. Yes! Adani group has been selling oils and
other edible materials. Adani surely knows how to grab the essence of market and make
profit out of it.
While the logistics, energy sector and agribusiness makes up their core business, Adani group
surely looks forward to build a giant empire by undertaking the requisite ports and
establishing good trade relationships with foreign ports and the exporters from the inside of
country.
Products From Adani Group That Are Actually Ruling The Market:
Fortune Edible oil (largest in India) Adani Group controls the 20% of entire edible oil
market in India
Refined and mustard oils
Spices and chili
Port development
Adani power
Place In The Marketing Mix Of Adani Group
Adani Group contributes a huge percentage to employability and ensures proper growth for
the country. Over the time Adani group has not only created employment by managing ports
but have also diversified their industries and factories.
The uniform distribution of factories, outlets and distribution centers across the country
allows people gain employment opportunities and also helps enterprise with the trust building
exercise.
Adani over the time has made efficient use of strategies and now plans to keep in touch with
the people of country. Online advertisements and the paperback notifications are helping
people know more about the business group that actually cares for the country and its people.
Being in the oil industry, one must congratulate the Adani group for having such a fantastic
distribution channel. The demand for oil is evergreen and the supply from Adani group is
constant. One of the reasons Fortune oil has grown as a brand is the supply part. Without
supply in a product such as oil, brand building would have been impossible.
Price In The Marketing Mix Of Adani Groups

Adani Group is an indigenous company hence prices are quite competitive. There are
products where the prices dip and give foreign brands the much-needed competition. One-
liter packet of refined oil from Adani Group costs somewhere between 70-80 INR while the
cost of chilly and spices are equally competitive.
Adani Group understands the need of the hour hence prepare products in all sizes; people can
decide the size of purchase based on their needs. Packaging is fantastic too and The brand
follows the standard metrics for selling products.
While the international brands are facing a challenge from indigenous Patanjali, Adani
Group is minting cash on the fan base it has created over the years. Theres more to come
from Adani Group that will change the way people in India shop and invest.
Promotion In The Marketing Mix Of Adani Group

Quality products and strong marketing is going to help this brand in the long run. Adani
Group sooner or later is going to be the one of the biggest Indian spices and edible oil
producing brands. Distribution and reach are one of the major factors to create word of mouth
for Adani group.
The strategy and the exquisite implementation of business development procedures have
helped this brand grab some eyes. Enrolling celebrities for promoting their products offline is
surely the masterstroke.
Adani Group understands the power of Internet and they have built platforms for selling their
products online. The brand has also undertaken partnerships where they can actually
collaborate with other people and let them earn profit out of their products.
Adani Group has grown to become a giant Indian brand. They have enrolled celebrities
like Ajay Devgan and Kajol for marketing their products. Adani has always believed in
keeping the brand game strong, they have spent quite some time and money building a brand
and now they are adamant about making it sustain.
PLC Based Strategies in
Marketing (4 Stages)
Article shared by
The concept of PLC Product Life Cycle has been dealt with in detail in
chapter EIGHT. Here, we are browsing through the conceptual frame work
in order find out what types of marketing strategies applied based on this
concept of PLC.
PLC is the product aging process. It is a graphic portrayal of the sales

history of a product from the time it is introduced to the tune when it is
withdrawn. It is an attempt to recognize distinct stages in the sales history
of the product.
It is a generalized model of sales and profit trends for a product class or

category over a period of time.
As a concept, it means three things:

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(a) Products move through the cycle of introduction growth Maturity and
Decline at different speeds
(b) Both sales volumes and unit profits rise correspondingly till the growth
stage. However, in the period of maturity stage, sales volume rises but
profits fall
(c) The successful product management needs dynamic functional

approach to meet the unique situations of sales and profitability.
The implications of PLC are nicely presented by Professor Philip
Kotler. Those are:
ADVERTISEMENTS:
(1) Products have limited life
(2) Product sales pass through distinct stages, each posing different
challenges, opportunities and problems to the seller
(3) Profits rise and fall at different stages of the product life cycle
(4) Products require different marketing, financial, manufacturing,

purchasing and human strategies in each stage of their life-cycle.
ADVERTISEMENTS:
Stage wise Marketing Strategies:

Let us take each stage, their features and the opportunities and challenges
so that matching marketing strategies can be applied appropriately.
A. Introduction Stage:
Whenever a new product is introduced, it has only a proved demand and
not the effective demand. That is why; sales are low and creeping slowly. It
may be case with products like instant coffee, frozen orange juice or a
powdered coffee cream.
This first stage of P.L.C. is characterized by:

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1. Low and Slow Sales:

The product sales are lowest and move up very slowly at snails pace.
The basic reasons for this are:

(a) Delays in expansion of production capacity
(b) Delays in making available the product due to lack of retail outlets which
are acceptable and adequate
(c) Consumer resistance to change over from established consumption

behavioural patterns.
2. High Promotional Expenses:

During this period of introduction or development, the promotional
expenses bear the highest proportion of the sales. It is so because; the
sales are of smaller volume on one side and high level promotion efforts to
create demand on the other.
Demand creation is not an easy task as it is a matter of breaking the

barriers and breaking ice which is done by:
(a) Informing potential and present consumers of the new unknown product
(b) Inducing the trial of the product and
(c) Screening distribution net-work.
3. Highest Product Prices:

The prices charged at the beginning are the highest possible
because:
(a) Lower output and sales absorbing fixed costs
(b) Technological problems might not have been mastered fully

(c) Higher margin to support higher doses of promotional expenses a must
for growth.
(d) Very few competitors or no competitions.
(e) Sales to higher income groups in a limited area for cultivating the
effective demand.
The Possible Marketing Strategies:

In launching a new product, marketing management can set a high or low
level for each marketing variable namely, price, promotion, distribution and
product quality.
Considering only price and promotion, management can follow one of

the four possible strategies:
1. Rapid Skimming:
It means launching of the new product at a high price and a high
promotional level. This rapid skimming strategy makes sense when a large
part of the potential market is unaware of the product. Those who become
aware of the product are eager to have it can pay the asking price.
As the firm faces potential competition and wants to build brand preference.
Take the example of sachets of ready concentrate of different flavours by
Tang, orange, mango and lemon by Dr. Morepen and Orange by Coca-
Cola whose prices are per glass Rs. 5, Rs. 2 and Rs. 2 each as against
Rasana which costly Re. 0.80 without sugar.
2. Slow-skimming:
It is a strategy that believes in launching a new product at a high price and
low promotion. This strategy works when the market is limited in size.
Where most of the market is aware of the product.
Buyers are willing to pay higher price. However, the potential competition is
not imminent. It is the case with local mineral water bottles rather than
national and international brands.
3. Rapid Penetration:
It is a strategy of launching the product at a low price and spending heavily
on promotion. This works well when the market is large, the market is
unaware of the product, most of the buyers are price sensitive, there is
strong potential competition, and the unit manufacturing costs fall with the
companys sale of production and accumulated manufacturing experience.
It is case with most of consumer non durables.
4. Slow Penetration:
It is a strategy where the new product is launched at low price and low level
of promotion. This strategy works will in cases where market for the product
is large, is highly aware of the product is price sensitive, and there is some
potential competition.
It is the case of cheap varieties of tobacco products such as gutka, spiced

supari, beedies, pan-masalas.
B. Growth Stage:
In this second stage, once the market has accepted the product sales
begin to rise. The prices may remain high to recover some of
developmental costs. With high sales and prices, profits rise sharply. This
encourages competition leading to possible product improvement.
Although, the contribution to sales is sizeable from the high income groups
buyers, middle income group buyers do not contribute towards sales.
The basic characteristics of this stage are:

1. Sales Rise Faster:
The sales start climbing up at faster rate because of
(a) Killing the consumer resistance to the product
(b) The distribution network-retail out-lets-is built to the needs and
(c) Production facilities are streamlined to meet the fast moving sales.
Thus, sales increase at an increasing rate over the period of time.
2. Higher Promotional Expenses:

During the period of growth, the promotional strategy changes. The
problem is no longer one of persuading the market to buy the product, but
rather to make it to buy a particular brand.
The question is one of creating and maintaining and extending selective

demand. The advertising moves towards brand identification, awareness to
have the effects of a brand image. Special offers, concessions, allowances
to stockiest and dealers are given to push a particular brand or brand
group.
3. Product Improvements:
With the high sales and prices, profits rise sharply and because of this,
there is greater incentive for the new companies to enter the market.
Competition has the advantage of entering the market because, research

and development, have already been completed by innovating firm at its
costs. Once, the originator has paved the pattern of market, competitions
can become stronger by coming out with modified products.
Along with product modification, they may reduce prices too. This makes
the originators to farther improve the product and bring down the price to
nab competition that is raising its head.
The Possible Marketing Strategies:

The company resorts to several strategies to keep growing. These
are:
1. Improving Product Quality:
As competition bottles were of 350 ml but now of 200 ml or even 150 ml.
Shampoos have come in Sachets. The main product continues to sell and
these flanker products support it.
2. Add New Product Features:

The product is already superior. However, the copy-cats might try to imitate
the product in toto or nears to its totality. To keep the quality distance, the
company adds new features at no extra cost. It is a kind of innovation.
Making product more useful or multipurpose. Thus now Pepsodent of HLL

gives two kinds of testing gum germs. Self-testing, after and before use
with a gap of 14 days, it keeps away the competitors.
3. Adding New Models and Flanker Products:

It pays to bring in new models, products of different sizes, flavours, which
will help in protecting the main product. In case of watches, screen
gadgets, Soft-drinks, perfumes, it is normally followed.
In case of Soft-drinks earlier bottles were of 350 ml, but now 200 ml and
150 ml bottles are released; Shampoo Sachets are introduced. The main
product continues to sell and there flanker products support it.
4. Entering into New Markets:

No company ventures to cover the total market say national or global at a
time. As a good beginner, it starts with selected local markets or states.
Once it proves its success, the company enters into other localities, states,
or even entire nation, finally global market. It is because competitors cannot
do that immediately. By the tune, competitions enter, you might have made
good amount of profit.
5. Increasing Distribution Coverage and use of New Channels:

The supply chain management has a definite role to play. That is why
depending on the nature of product and the situation, the distribution
network can be intended and new channels of distribution are tried which is
more matching and yelling good results.
6. Shift in Advertising Strategy:

Now that the customers know about the product or family of products, the
company can shift from product awareness advertising to product
preference advertising. That is your products are preferred as compared to
others.
7. Lowering of Prices of Products:

We have consumers for the product or products from different income
groups say, rich, upper middle, middle, lower middle and poor. The priced
charged at present might be affordable in case of rich, upper middle and
middle class.
In case prices are sliced further down, the lower middle class and poor
class people also buy. The advantage is others at upper layers naturally
buy more than what they were buying; again lower class people now do not
hesitate buy being price-sensitive.
C. Maturity Stage:
Eventually market becomes saturated because, the house-hold Demand is
satisfied and the distribution channels are full. Sales level off and over
capacity in production becomes apparent.
Competition intensifies as each manufacturer wants to ensure that he can

maintain production at a level which gives him low unit costs.
The greater the cost of production and initial investment, the more
important it is to maintain high output so as to cover fixed costs at lower
rates of revenual. Lower prices are a must to stare off the competition.
Though production costs are reduced the margin of distribution may not
taper off. The efforts are made to extend the maturity stage. That is why;
this period is much longer than growth stage.
The features of this stage of PLC are:

1. Sales Increase at Decreasing Rate:
As most of the customers are knowing the uses of the products the sales
grow at falling rate giving an overall picture of off level situated.
It shows that there is apparent gap in production level and sales level. This
intensifies competition. Efforts are made to level of the sales crime by
extension strategies.
2. Normal Promotional Expenses:

During this period of maturity, the promotional expenses reach a normal
ratio to sales. Most of the competition spend very normal amount of
expenditure on promotion. Efforts are made to rationalize the existing
budget.
Though the total expenditure does not expand, a major share of the
expenditure goes to distribution and brand promotion to keep dealers
loyalty intact.
Advertising emphasizes the difference between one brand and those of

competition. As a result, weaker competition leaves the market only to
larger and stronger manufacturers.
3. Uniform and Lower Prices:

The prices charged by the producers are quite lower and uniform with a
very narrow difference except for the real product diffentiation. The strength
and vitality of high prices fade. That is why extension strategies are
followed.
The price changed is just to cover special costs in addition to usual

manufacturing expenses plus low margin for investment. It has an
advantage of low margin broad based turnover.
The Possible Strategies:

The strategies followed during maturity stage can be broadly classified as
to three types namely, market modification, product modification and
marketing-mix modification strategies.
Market Modification Strategies:

A company might expand or try to expand market for its mature brand by
working with two variables that makeup sales volume. These variables are
brand users and the rate per user because, sales volume is equal to
number of brand users multiplied by usage rate per user.
Therefore, the company can try to expand the number of brand users
in three ways:
1. Conversion of Non-users into Users:
Non users can be baited to be users. In-fact the key to the growth of air-
freight survival is constant search for non-users to whom airlines can
demonstrate the benefits of using air services than other means of
transportation.
2. Entering New Market Segments:

It is possible to enter new market segments even encroaching upon them.
Five examples can be that of Johnson and Johnson which has successfully
promoted its baby soaps and shampoos to adult users. Dove of HLL has
been used by not only higher groups income but also lower income groups
as it is not soap but a moisturizer.
3. Winning over competitors Customers:

It is possible to compete away the customers of competitors. It is were
known that competitive war that is going on between Pepsi-Cola and Coca-
Cola. They have annual budgets ranging between three thousand four
thousand crores to atract customers. Pepsi-Cola is constantly tempting
Coca-Cola users to switch.
Sun-drop- edible oil is competing away the customers of Suffola and so

on. These can be possibility of increasing sales volume by consuming the
current brand users to increase their usage of the brand.
There can be three strategies:

1. The company can try to get customers to use the product more
frequently. The orange juice need not be served only when guests are at
home lent can be made a feat fast drink daily.
2. The company can try to increase the interest users in using more of the
product on each occasion. A manufacturer might inject an idea of use of
shampoo thrice a week, than once a week. The current ad that runs Na
Monday, Wednesday, na Friday as said by bald headed middle aged
person in case of Clinic Shampoo. Again the National Egg Coordination
Committee (NECC) has come out with an add Sunday ho ya Monday, rose
Khayo Ande.
3. The company can also try to discover new product uses and convince
the people to use the product for variety of users. The nylon ropes were
used basically in ships and vessels as substitute for coir-ropes.
Now we use for clothes line, binding and so on. Again the fishing nets are
now widely used instead of strong, cotton, so also netlons or mosquito
nets. Again, ready rupee packs speak of other recipes and food items and
cursives and ready to eat food products.
A. Product Modification:
Marketing managers attempt to stimulate sales by modifying the
products characteristics through quality improvement feature
improvement or style improvement:
1. Quality Improvement aims:
Increasing the products functional performance its durability, reliability,
speed, tastes. It is quite common that the manufacturers naming their
products as new and improved.
In case of all sorts of balms, pain killers, soft-drink concentrates and so on.
Grocery manufacturers call this a plus lunch and promote new additive or
advertise something as stronger, bigger or better.
This strategy is effective to the extent that quality is improved; the buyers
accept the claim of improved quality. However, customers are not always
ready to accept an improved product as really improved.
2. Product Feature Improvement:
Aims at adding new features may be size, weight, materials, additives,
accessories and even package design that expand the products versatility,
safety on convenience. Consumer commerce is most important in addition
to its contents.
The containers and the packages may be redesigned for increasing

convenience in handling, storing, transporting. This can be in terms of size
and weight, tetra packing, pouches are of great value.
Again extra ingredients can be used to make it more utilitarian. Even the
contents say pickles, chips, their thickness, layers, can be great
significance. Soap cubes, whether they are to be granules or power-form or
crybal focus that counts. This strategy has certain merits. New features
build the companys image as an innovator and win the loyalty of market
segments that respect these features.
New features provide an opportunity for free publicity and they generate
sales force distributor enthusiasm. However, there is among possibility of
copying by competitions. Again that gain of being the pioneer should be
long standing; else it is of no use.
3. Product Style Improvement:

Strategy aims at increasing the products aesthetic appeal. This strategy is
used in both consumer durables and non-durables. In case of cars, two-
wheelers, fridges, fans, watches sound budgets it is quite common.
In case of non-durables like government mixes; packaged food products

producer add colour and texture variations by relying packaging eatables
like nuts, toiletries and so on.
The periodic introduction of models leads of style competition than quality
or feature competition. This style improvement strategy gives the product a
unique market identity.
However, the problems of style improvement strategy are:

1. Difficulty of predicting whether the people have liked the new style; if so
who? How many and when?
2. It demands discounting of or discontinuing of the old style where there is

risk of losing customers who are married to old style.
B. Marketing Mix Modification:

Marketing managers and home product, advertising, Sales promotion,
Supply chair sales force all these departmental heads all part of marketing
can stimulate sales by modifying other marketing mix elements.
In each area are to find what makes the answers to increase the sales
by asking questions in each area, as under:
i. In the Area of Product Prices:
These pertinent questions are:
(1) Whether a price cut would attract new buyers?
(2) If so what are the ways of price cuts?whether the price list be
lowered? Or should prices be lowered through price-specials? Or volume
or easily purchase discounts will do? Or freight cost absorption? Or easier
credit terms? Or would it be better to rise to price to signal higher or better
quality?
ii. In The Area of Distribution:

(1) Can the company get more product support and display in the existing
outlets?
(2) Can more outlets be penetrated?
(3) Can the company introduce the product into new distribution channels?
The celebrated example is that of good year tyre Company wanted to sell
its tyres through dealers at discount its market share went up from 14
percent to 16 percent in the first year.
iii. In The Area of Advertising:

(1) Should advertising expenditure be increased?
(2) Should the message or copy be changed?
(3) Should be media mix be realigned?
(4) Should the timing, frequencies or size of ads be changed?
iv. In The Area or Sales-Promotion:

(1) Should the company boost its sales promotion efforts? Say through
trade deals, paisa off or rupee of cuprous, rebates, warranties, gifts and
contests for dealers, customers and sales-force?
v. In the Area of Personal Selling:

(1) Should the number or quality of sales people be increased?
(2) Should the basis for sales force specialisation be changed?
(3) Should sales territories to revised?
(4) Should sales force incentives be revised?
(5) Can sales-call planning be improved?
vi. In The Area of Services:

(1) Can the company speed up delivery?
(2) Can it extend more technical assistance to customers?
(3) Can it extend more credit?
In essence a major problem with the marketing mix modifications,

especially price reductions and additional services, is that they are easily
imitated.
The firm may not gain much as expected, and all firms might experience
profit erosion as they step up their marketing attacks on each other.
D. Decline Stage:
In this terminal stage, sooner or later actual sales begin to fall under the
impact of new product competition and changing consumer tastes and
preferences. Prices and hence, profits decline.
It is a stage where the market for the product has been super seded by a
technological or style change which replacers demand altogether.
That is, the old products are rendered obsolete for instance; the
development of tough water based point oil-bond has made significant
inroads into traditional market for oil based varnish enamel paints. That is,
alternatively, the interest in the product may fade, leading to a rapid
reduction in sales.
The outstanding features of this stage of P.L.C. are:

1. Rapid Fall in Sales:
As the product is pretty old, and new ours are available, there is a change
in the trend. People are interested in buying something new.
The sales, therefore, fall sharply. Over production appears to be the major
problem. This induces firms to close down as competitors have to leave or
is left to them.
The total number of firms in the arena covers down. For instance, the
number of companies manufacturing calculators was much less in 2001 as
against the figures of 1960s and 1970s.
2. Further Fall in Prices:

Rapid reduction in sales creates a fear and there will be intense
competition to liquidate the stock at the earliest. There would be a new kind
of competition to have enlarged share in such a decline stage to have
maximum benefit at least profit margin.
3. No Promotional Expenses:
Expenditure in support of product falls sharply as prices become keener for
fast stock liquidation. Distribution network is reduced to the minimum with
thorough rationalization. This is an advantage as product is known for good
many years. It may enable the manufacturer to milk the product with profit
through sales are scanty.
Possible Marketing Strategies:

Unfortunately, most of the companies have not developed well thought- out
policy for handling their aging products because sentiment plays a
significant role. Mr. R.S. Alexander, in his article The Death of and Burial
of Sick Products Published in Journal of Marketing April 1964, page 1
emphatically states Putting products to death or letting them die is a drab
business, and after engenders much of the sadness of a final parting with
old and tried friends. The portable six-sided pretzel was the first product the
company ever made. Our line will no longer be our live without it.
Mr. Kathryan Rudie Harrigan in his article Strategies for Dediving
Industries published in Journal of Business Strategy, fall 1980-page
27, identified five decline strategies open to the firms:
1. Increasing the Firms Investment:
The idea of investing in the business is to dominate the market or
strengthen its competitive position a midst competitors.
2. Maintaining the Investment Level:

There should not be any divestment. Instead maintain the existing
investment level until the uncertainties about the industry are resolved.
3. Decreasing the firms Investment Level Selectively:

The company is not of go in for unblock de-investment. Instead, the
investment level can be decreased on selective basis. It is possible by
dropping unprofitable customer groups. It should be done simultaneously
strengthening the firms investment in incrative nichoes.
4. Harwesting the Investment:

Harvesting also called as milling the firms investment to recover cash
quickly.
5. Diresting the business quickly:

This is wise way of reducing further losses. Divesting the business quickly
by disposing of its assets as profitably as possible. Delay causes extra
loss.
In away the appropriate decline policy or strategy depends on the

industries relative attractiveness and the companys competitive strength in
that industry. A company that is in an unattractive industry lent possesses
competitive strength should consider shrinking selectively. A company that
is an attractive industry and has competitive strength should consider.
Strengthening its investment. In case a companys product has strong
distribution and residual goodwill, the company can sell the same to also
their company.
Fortune Oil: Cooking up
stories, served hot
By Savia Jane Pinto , afaqs!, Mumbai | In Advertising | June 12, 2009
Fortune aims to capture a bigger share of the cooking oil pie with its latest
brand campaign revolving around realistic situations
Delicious food garnished with spices, children smiling in anticipation, mummy

approaching dinner table and a shot epitomising the ideal happy family - such
clichs have plagued the oil, spices and rice categories since the early 1990s. An
ideal daughter in law or a caring wife must be using the right cooking oil, went the
popular notion.
In a recent commercial for Fortune Oil, the attempt is to veer away from such ideal
circumstances, while focusing on more grounded, real relationships around the oil
story.
Following its repositioning activity earlier this year, the edible oil brand from Adani
Wilmar has launched its first campaign with the new positioning of 'Joy of eating',
deviating from its earlier 'Thoda aur chalega'.
& #BANNER1 & #The new agency on board, Ogilvy India, has created this campaign
with another Hindi tagline, 'Ab bas toot pado'. The campaign is made up of three
commercials, two of which are on air currently.
Paneer, pakoras and more

One of the ads, titled Railway station, is about an elderly couple making a train
journey. The husband realises that his wife hasn't prepared the customary 'pakoras'
for the journey this time. Forgetting the he was supposed to arrange for a taxi, he
busies himself in preparing the pakoras when his wife offers to make them. The
couple miss the train due to the delay, but share a mischievous moment on the
platform when they gorge on the pakoras.
The second commercial is about a young man who lives away from home with a
group of friends. He steps home after his day at work and reaches for some stale
pizza; his sister calls him just then, asking what he is having for dinner. He cooks up
a story, telling her he's having 'muttar paneer' - just so that she doesn't feel bad about
his eating habits away from home.
His sister then reprimands him on why he didn't leave his dirty shoes out at the door,
to which he turns around to see that his sister has actually brought him some home
cooked food.
A third film is on its way. Apart from the commercials, the campaign consists of a
mix of press, hoardings and bus shelters. Radio is specifically to be used in Tamil
Nadu.
Of the total budget, Fortune has allotted about 15 per cent to outdoor, while 10 per
cent and 5 per cent will go to press and radio respectively. A huge 70 per cent of the
budget is directed to TV and electronic media. National and regional channels are
being employed.
Oiling the film

The ad films have been shot by Shivendra Singh Dungarpur of Dungarpur Films. The
casting was the most important aspect, says Dungarpur. The film with the older
couple took four days to shoot and was carried out in Dehradun. After narrowing in
on the location, Dungarpur and his team carried out two rehearsals at the place. "The
kitchen and other such small aspects needed to be just right," he says, in order to
capture the fine nuances of a middle class family in a small town.
The Ogilvy team insisted that the film have a natural yet dreamy appearance. The
costumes were also important in bringing the final picture come to life.
The brother and sister film was a little more contemporary in comparison.
Dungarpur says that with this film, he played around with lights and angles so he
could set up the bond that the friends share. "It needed to look like a group of
working adults living together in Mumbai," says the ad filmmaker.
Food for thought

Do adlanders find the realistic route easier to digest than the ultra happy family
scenarios?
Brijesh Jacob of 22 feet and White Canvas finds the ad clutter breaking, considering
the clichs that the category has been gripped by over the years. "Ab bas toot pado,"
he says, "is a very interesting take when talking about products made in oil."
Anand Damani, planning head, Saatchi & Saatchi Mumbai, found the Railway station
ad endearing, too, but didn't see a reason why a consumer should make a switch to
Fortune.
Amar Wadhwa, planning head, Cheil Communications, reminds that the primary
purpose of a cooking medium is to enhance the taste of food. However, over time,
consumers realised that oily food had its consequences. Wadhwa confesses that
though the Fortune commercials are refreshing, they fail to seize him like some
previous Saffola ads. He mentions the ad where the oversized men chant the names
of their favourite dishes while exercising as an example of an ad that leads to action.
"It's a visual relief to see the positive side of oil rather than the bulge around the
waist," counters Jacob. Though the brother-sister film left a few unanswered
questions, the Railway station film was much clearer, according to Jacob.
On a final note, Wadhwa says, "The ad is like lukewarm coffee, unable to tell me
whether the oil helps make tasty food or it's great for health."
Discovering the joy

Amit Akali and Malvika Mehra, group creative directors at Ogilvy India, had the
responsibility of making Fortune edible oil a leader in the mind of the consumer. The
company claims that Fortune is reaching out to more than 20 million households in
India currently.
Akali says, "Food is something that we as a nation are obsessed with, discussing the
next meal while having a meal. We came up with different stories from life and
transformed them into scripts," adds Mehra.
Fortune makes a conscious effort to move away from the reprimanding tone that
most other oil brands take. Angshu Mallick, vice-president, sales and marketing,
Adani Wilmar, shares details about a survey that was conducted. The survey showed
that with the change in the lifestyles of many middle and upper middle class
consumers, the family meal has become nearly non-existent. Fortune wanted to
bring back the joy that health conscious food and fast paced life had taken away.
Prateek Srivastava, group president, South, Ogilvy India, adds that eating on the go,
health reasons and too much choice has sucked out the joy that was once associated
with having a meal.
Among everyday moments of joy, having a meal with the family is another thing that
popped up in the study that the agency conducted throughout the country.
The brand has thus purposefully stayed away from reminding the consumer about
how oil adds on the inches to the waist.
For the record, AWL is the 50:50 joint venture between the Adani Group and Wilmar
International Limited, Singapore. The brands under Adani Wilmar are divided as
follows: Ogilvy India handles the creative duties for Fortune, while Triton handles
the other brands of the group - King's and Raag. Ivory, the coconut oil brand, is
handled by Canvas.
Copy of "Analysis of Brand

Positioning Strategy for Adani
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Transcript of Copy of "Analysis of Brand Positioning Strategy for Adani

Wilmar's Fortune Cooking Oil"
Adani wilmar Limited
"Fortune Cooking Oil"
In India, Mustard / rapeseed is produced in states of Rajasthan, Uttar Pradesh, Haryana,
Punjab, Gujarat, Madhya Pradesh, Jammu and Kashmir, West Bengal, Punjab, Assam, Bihar,
Himachal Pradesh & Orissa.
Indias oilseeds processing sector is made up of the three groups viz Ghanis, solvent
extractors and oil refiners engaged separately.
India is one of the worlds largest edible oil economies.
India is the fifth largest producer of oilseeds in the world, behind US, China, Brazil, and
Argentina.
Introduction to Edible oil Industry
Oil and vanaspathi used as cooking media (in households, hotels, restaurants, canteens,
institutions)
Vanaspathi used as an industrial input - for making bakery products & confectionery
Oil Usage :
FUTURE: Demand Drivers
Macroeconomic factors: Population growth, per capita income, purchasing power, oilseeds
crop
Other factors: Prices - domestic/ international, Availability - oil, oilseeds
Influence of branded products - `health message
Growing preference for convenience foods.
Raw material sourcing: focus on improving yields, getting better quality oilseeds, ensuring
regular supplies - through symbiotic relationship with farmer
Branding essential for success (Vanaspathi - Dalda, Oils - Sundrop)
Better distribution network to improve reach
Efficiency in operation - to become price competent and withstand overseas competition
Proposed Future trading in edible oils will help curtail price volatility and lend knowledge -
based assistance to farmers of eliminate unofficial markets
Key Success Factors:
Free imports, low import duties and slump in global prices - lead to `dumping
Domestic industries of edible oils and vanaspathi affected - low realisation and idle
capacities in oil and vanaspathi industries
Production slippages have also forced imports
Excessive (cheap) imports of oilseeds - led to unremunerative prices, locally hence, farmers
have shifted to other cash crops
Increasing health awareness - impact of oils and vanaspathi usage on individuals
cholesterol levels
Business Concerns:
Broadly, edible oil/fat products can be categorised into four categories, vegetable refined oil,
hydrogenated oil (vanaspati), bakery fats/margarine, and de-oiled cakes.
The Indian edible oil industry can be classified into the following segments. Ghanis,
small.scale expellers, solvent extractors, oil refiners and vanaspati manufacturers.
70% - sold in open market, 30% - sols as branded oil.
Structural Characteristics:
Market Potential: Edible Oil Demand Projection
Analysis of Survey:
Fortune- 99.70%
Saffola- 97%
Sunflower/Sundrop-88.50%
Nature Fresh-94.30%
Sweekar- 68%
Mahakosh- 42%
Others/Not branded- 59%
Brands Available on the shops of retailers?
Brands purchase by customers
28.16% - Fortune brand. (40 respondents)
37.32% Saffola. (53 respondents)
12.67% - Sundrop/Sunflower. (18 respondents)
11.97% - Nature fresh. (17 respondents)
2.81% - Sweekar (4 respondents)
2.81% - Mahakosh (4 respondents)
4.22% -Others/ Not branded. (6 respondents)
Influential factors
According to retailers.
Brand name- 92.80%
TVC's- 56.80%
Friends- 29.00%
Brand awareness- 88.60%
Price- 56.90%
Retailers- 22.00%
Past experiences- 67.45%
Health conciousness- 23.00%
Doctors- 18.99%
According to
customers
Brand Name- 91%
TVC's- 74%
Friends- 22%
Brand awareness- 18%
Price- 66%
Retailers- 11%
Past experiences- 85%
Health conciousness- 23%
Doctors- 17%
Loyalty towards Fortune Brand:

According to retailers:
Yes- 98%
No- 2%
According to customers:
Yes- 73.6%
No- 26.4%
Are the prices competitive?
Retailers Customers
Yes 84.44% 55%
No 15.56% 45%
Satisfaction through:
Yes- 42%
No- 57.78%
Satisfaction level:
Retailers:
Customers:
Yes- 31.11%
No- 69%
Yes 14.09%
No 85.91%
Yes- 71.84%
No- 28.16%
Conclusion:
Packaging of outer carton must improve. As suggested by the retailers the divider systems
like earlier was better. This will reduce leakage problem.
As the customers are highly unaware about the type of oil they purchase, the advertisements,
campaigns etc should be introduced by the company.
Retailers and customers both are not satisfied with the discounts, schemes and facilities
given to them. So schemes and offers should be made that adds value to the product. Only
marketing plans are not enough to attract them.
Feedback problems should be solved as soon as possible as it may result in the lost of trust
from the company. At regular intervals of time feedback should be taken.
As there is shortage of supply in some areas, it is the concern area. Regular supply should be
there.
Also utility packing must be introduced with some innovative ideas for customers.
Marketing:
Promotion:
Fortune does have its online presence in the form of websites, Social media & You tube.
They are giving TV Commercials with emotional connect and message of "joy of eating".
Price:
The pricing of fortune brand is competitve as comapred to the premium segment. The lower
middle, Middle and Upper class can afford the brand easily.
Place:
Effective Disrtibution chain.
Efficiency in operations.
Available in retail outlets, modern format stores, super markets etc.
Product:
variety of products are available
Easily distinguishable variety like groundnut or mustard oil.
Positioning:
Fortune positions itself as a:
Light,
Odorless,
Healthy,
Nutritious,
Enriched with Vitamins
Less Smoke
Economical
Marketing Strategy:
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Gemini Cooking Oil SWOT Analysis, USP &
Competitors
Posted in Food & Beverages, Total Reads: 5374
Advertisements
SWOT Analysis of Gemini Cooking Oil with USP, Competition, STP (Segmentation, Targeting, Positioning) -
Marketing Analysis
Gemini Cooking Oil
Parent Company Cargill
Category Cooking Oil
Sector Food Products
Tagline/ Slogan Taazgi jo chalti jaaye
USP Low cholesterol edible oil
STP
Segment Health conscious adults
Target Group All age groups, middle and high income, health conscious people
Positioning For fresh and healthy food
SWOT Analysis
1. Dominant player of edible oil

Strengths 2.Uses health platform
1. Limited market penetration in edible oil market.

2.Rural area
3.Limited market penetration in food processing industry
4.Price of product is slightly high that affect the demand
Weaknesses 5.Low advertising and visibility
1.Sharp increases in demand of branded oil
2.High market awareness in metropolitan city of branded oil
Opportunities 3.Health conscious people increasing
1.The treats of low price competition

2.A large number of domestic as well as multinational players
Threats 3.Highly competitive industry
Competition
1.Sundrop
2.Dhara
3.Nature Fresh
4.Saffola
Competitors 5.Sampriti
The 5 Ms Of Advertising With Respect To The
Sundrop Campaign
Posted by Drypen on November 1, 2008
MISSION:
Sales goals: Leadership in the edible refined oil segment
Advertising Goals:
Communication task
Position Sundrop as the healthy oil for healthy people

Ensure that this did not erode the delivery of the taste benefit.
Positioning had to be perceptually as far away from Saffola.
Young, modern and premium feel
Execution had to be distinct and original to stand out from the clutter
MONEY:
Stage in PLC: Introductory, therefore relatively large expenditure

Market share: new product
Competitors:
Saffola (Safflower oil) also used the health platform but was associated with heart patients and less taste
Flora and Sunola (Sunflower oils)
MESSAGE:
Health was chosen as the platform, along with a supporting claim for taste. People who were healthy and
energetic were concerned about the long-term prospects of their health. Thus Health
Was related to maintenance of good health

Was applicable to all members of the family
Was characterized by lively energetic people
Thus the message and (positioning): The Healthy Oil for Healthy People
MEDIA:
Primary media: Television ad 30 seconds.
Print ad
MEASUREMENT:
Within 6 months, Sundrop became the largest selling refined sunflower oil.
Redefined the category and expanded the Sunflower oil segment from 2.71% to 23% in 6 months, and 42%
in 1997
Still the largest selling sunflower oil brand holds 15% of branded oil market.
The ad was shown for over 10 year
3 ways to promote mustard oil
HEMA YADAV
SAYED KOKAB HABEEB
MANJUSHREE DESHPANDE
PRINT T+
inShare3
Share2
The industry requires modern and appropriate technology to reduce the content of erucic acid and pungency to
make the oil more acceptable among consumers and tap export potential.
Product diversification, branding and promotion can go a long way to promote it
January 19, 2015:
A national workshop on mustard was organised at Jaipur by Department of Agriculture,

Government of Rajasthan earlier this month. One of the major recommendations at the
workshop was to establish a mustard oil development board that would look into market updates,
government notifications, market information updates, branding and promoting mustard oil.
Issues in processing
Mustard oil processing in India is an unorganised business. There are 7,000-9,000 oil extracting
units out of which only 20 per cent are registered in the organised sector. The industry has an
installed capacity to process 23 lakh tonnes annually. Mustard oil consumption is increasing at a
rate of 20 per cent every year. Demand for mustard oil comes from rural areas and is consistent
owing to its multi-uses.
The rapeseed-mustard varieties/hybrids contain 40-45 per cent oil. But its recovery, realised by
the mechanical crushing processor (oil expeller) the largest segment of edible oil processing
industries , is up to 35 per cent only. Under this process of oil extraction, substantial amount of
oil (5-10 per cent) is left in the rapeseed-mustardseed meal. Even if 3-4 per cent of this leftover
oil can be extracted by modernising the mechanical crushing units, then at least 2-2.5 lakh tonnes
additional edible oil could be made available.
The industry requires modern technology and also appropriate technology to reduce the content
of erucic acid and pungency to make the oil more acceptable among consumers and tap export
potential.
For the record, production of mustard/rapeseed, a winter crop cultivated in the northern States.
was 8.028 million tonnes last year with the crop sown on 6.362 million hectares. Rajasthan is
themajor producer contributing up to 47 per cent of the domestic production, followed by
Madhya Pradesh (11.44 per cent), Haryana (12 per cent) and Uttar Pradesh (10.41 per cent).
Issues in marketing
There is a strong need to focus on marketing of mustard oil. It helps to segment and position the
product in line with the need and demand. Marketing also creates a channel for products to reach
consumers. Mustard oil has an extensive demand in northern and north-eastern States. Mustard
oil fully meets domestic demand without need for imports non-existent. Rajasthan has over 20
markets for mustard, with Shriganganagar, Alwar, Jaipur, Kota, Udaipur, Hanumangarh, being
the major ones. A major issue in marketing of mustard oil is that a large portion of it is sold in
loose form; it is vulnerable to adulteration as it can be blended with cheaper oils such as palm oil.
Mustard seeds are sometimes adulterated with weed seed Argimon Maxicana. Other edible oils
such as soyabean and groundnut are positioned and marketed effectively. Therefore, consumers
develop a preference to these oils.
The stickiness and low transparency of the oil reduces the acceptability of mustard oil among
consumers. The unattractive packaging and poor branding by companies has also been an
obstacle in realising the real value of the product. The unique pungency of the oil is a strength for
domestic market but a barrier to exports. Different grades of oils with variation of pungency and
viscosity for different markets is required.
The National Institute of Agricultural Marketing (NIAM) recommends a marketing strategy for
mustard oils on the basis of a SWOT analysis conducted at the workshop. The strategies are:
Product diversification: Mustard oil is viscous, dark and highly pungent. Double refinement
technique reduces its viscosity, makes it translucent and reduces its pungency. Therefore, it can
be made available in two or more variants with different characteristics of colour, consistency
and pungency. Further making it available in attractive bottles, tetra-packs and cans of different
sizes will fetch different needs of the people. This will draw interests of the consumers towards
the product.
Branding and positioning: Mustard oil is usually sold in unattractive plastic bottles with red
label and cap, in canisters and tin cans and even in loose to customers. An attractive packaging
and advertisement will make the oil acceptable among consumers. This branding can be
developed by having some popular brand ambassadors for promotion of organised brands.
Mustard oil is positioned as a poor mans oil. A repositioning of oil highlighting its health benefits
and taste will make the consumer preferthe oil.
Campaigning: Milk and egg promotion campaigns by the government have been successful in
making these products more popular and acceptable among consumers. A campaign on the
similar lines is needed for mustard oil to make people aware of the benefits and making it more
acceptable among the consumers.
The writers ar
When VN Dalmia (MBA 84), chair of Dalmia Continental in New Delhi,
decided to sell olive oil in India, he started by importing it from the
Mediterranean while the company built its new olive oil brand
Leonardo rather than take the risky tactic of making a high investment
in the masses of land it would take to plant olive trees and time it would
take for them to bear fruit.
Leonardos first product on the market was an olive oil that would work
well with Indian cuisine, not designed to flavor but to cook, able to be
used at high temperatures. It was also more likely to prevent heart disease
than other oils.
This was a new category of product in the Indian market, and to make it
one many households would adopt on an everyday basis, Leonardos
challenge was to make its uses and benefits clear to the consumer. In order
to do that and maintain the cautious, lower-investment approach, Leonardo
marketed the product by educating consumers about its health benefits.
The company communicated those benefits through trade shows, joint

promotions with restaurants and other partners, working with health care
facilities, free samples, point-of-sale material, shelf space and in-store
branding, among other strategies.
Learn more about how Leonardo analyzed, experimented and promoted its
olive oil to great success in Professor Rajkumar Venkatesan and Senior
Researcher Gerry Yemens article Smart Business Model Helped Olive-
Oil Firm Blossom in India, in the Darden School of Business/Washington
Post Case in Point series.
Marico Promotes Mustard Hair Oil Brand to
Indian Women in Rural Areas
By AdAge India Bureau, Published on Jan 6, 2016, 07.50 AM IST
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Marico, an FMCG company, recently launched branded Mustard (sarson) hair oil -
Nihar Shanti Sarso Kesh Tel. It aims to capture the huge untapped pool of loose
mustard oil in North and East India.
The brand targets the rural audience, which has limited means of living.
Mustard is extremely popular among Indian for its benefits. However, people's
only concern with Mustard Oil is that it is sticky and has unpleasant sensorials.
Taking this insight forward, Marico has released an ad film that aims to
communicate with women in rural areas who strive on stringent budgets and live
without indulging themselves. However, these women find small ways of
indulging their children. She is aware of her daughter's dissonance with mustard oil
but doesn't want her to shift to anything else.
The film is designed and executed by BBH India.
Rajesh Mani, Executive Creative Director, BBH, says, "The idea was to bring out
the 'non-sticky yet full of mustard' property of the product in a very memorable
way. We also wanted the progressiveness of the Brand Nihar Shanti to shine
through hence we hit upon the idea of a girl child and kite flying, which is
predominantly male oriented. And as we all know, the best stories come out of life.
Also, the earthy flavor of the song lends itself beautifully to the moment."
Adding to this, Anuradha Aggrarwal, Chief Marketing Officer, Marico, says,

"Nihar Naturals Shanti Sarson Kesh Tel is value-added mustard based hair oil,
which offers the goodness of mustard without its stickiness. The advertising
captures a mother's dilemma of wanting nourishment for her daughter's hair and
her concern towards satisfying her daughter's desire for non-stickiness. We are
delighted to have Vidya Balan driving the brand's core values of being progressive,
independent and empowered."
India should protect interests
of local edible oil industry:
Dinesh Shahra
Interview with MD, Ruchi Soya Industries
Dilip Kumar Jha | Mumbai February 20, 2013 Last Updated at 22:35 IST

ALSO READ
Crude palm oil up 0.7% on rising demandCrude palm oil up 0.6% on spot
demandCrude palm oil up 0.8% on rising demandEdible oil to remain subdued till
June 2013 on ample supplies: ReligareEdible oil prices to remain subdued till June
2013 on ample supplies: Religare
Despite weakening sentiment in edible oil industry, Ruchi Soya Industries posted 105% growth
in its third quarter profit. The company improved focus on branded products and set up footprints
in West Bengal which yielded more profit margins, a mantra the company would continue in
future as well, says Dinesh Shahra, Managing Director, of the company in an interview
with Dilip Kumar Jha. Edited excerpts:
How do you buck the weakening sentiment in edible oil industry?
Improved branded sales, better realisation of oilseed extraction, effective control on costs and
favourable business sentiments have helped us to get better profits for the third quarter. It
underlines the fact that we are among the top five FMCG companies and it is a vindication of our
strategy to create and sustain brands. We are making our efforts to have good performance on a
sustained basis in future as well.
What is your strategy going forward?

We have evolved from a commodity company to a leading FMCG player with a strong focus on
brands. This will continue to be our strategy. We have recently launched Premium table spread
under Nutrela brand. We are targeting the West Bengal market with an aggressive marketing
campaign for our premium brand, Nutrela Kacchi Ghani mustard oil. West Bengal alone accounts
for over a third (around Rs 110 crore) of the Rs 300-crore mustard oil market in the country. In
the next quarter we are confident of generating good revenue from the state.
Apart from that we are also focusing on strengthening internal controls and being system driven
in our approach and actions. What once started as a family owned business has now grown to be a
professionally managed business conglomerate. We shall continue to look for new opportunities
in the field of oil palm plantations and non-conventional energy sector.
What is your take on rising imports of veg oil?

The veg oil imports have been rising consistently due to lower import duty. The committee
headed by Dr Ashok K Lahiri, Chief Economic Adviser, Ministry of Finance, recommended the
duty differential between crude and refined products to be maintained at 10%. Last month, when
the government imposed import duty of 2.5% on CPO, the duty differential was reduced to 5%
being the same on palmolein at 7.5%.
Government must protect the interest of domestic refineries with a duty rise on CPO and refined
palmolein to 10% and 20% respectively. If this duty differential is not maintained then some
industry players would prefer to import refined palmolein instead of CPO. This jeopardises the
domestic palmolein refining industry which also competes with cheap imports. This is a double
blow for the industry. The governments of Indonesia and Malaysia, the worlds two largest palm
oil producers, adopt a policy suitable to the domestic palm oil sector. The Indian government also
must follow a similar path.
Your forecast for edible oil price?

Looking at the huge stocks of crude palm oil in Indonesia and Malaysia, edible oil prices may go
down further. Even if the government raises import duty, exporters would absorb it, making
thereby no impact on consumers. In the past decade, edible oil is the only important food
commodity that has not grown as rapidly as other commodities like pulses, wheat, rice, eggs and
others have. Hence there would be a win-win situation for farmers, refiners and consumers in
India.
The industry as a whole has invested over Rs 5,000 crore and employs over 5,00,000 people.
How can an industry continue to make investments if it plans are upset by such sudden
changes in policy?
These changes suddenly cause us to review our overall strategy. We have to go straight back to
the drawing board and re-evaluate our business plans and suddenly many of these look unvia
The year 2009-10 has been a memorable year for K S Oils. Our Company entered the 25th year of its operations.
The silver jubilee year has been an occasion for celebrating with our consumers, our brands and our people!
Like any individual who has just turned 25, we feel young, energetic and motivated to reach new heights. It is that
period of life when strength, intelligence and performance are at their youthful best. At 25 years, K S Oils proudly
possesses some commendable achievements. Today, we are an Indian MNC that is well poised to tap the young
Indian consumers demand with a premium brand like Kalash and a mass brand like Double Sher.
Kalash, our premium brand is already the leader in the branded mustard oil segment. During the year, Kalash
Refined Soyabean Oil became
one of the top five brands in the soyabean oil segment in selected states within nine months of its launch. This
has only gone to prove that we have got our branding story right and we have so far been on the right track. We
intend to invest significantly in our brand portfolio and ensure greater consumer loyalty, increased profitability and
an inclusive and sustainable growth.
Global Scenario
The global scenario in 2009-10 was much better than in the previous year. To begin with, we have witnessed
stability in edible oil prices, which reduced the countrys import bills. Secondly emerging markets, especially
Asian economies like India, China, Indonesia and Malaysia are being built on strong industrial, manufacturing
and service sector growth. For us, the biggest story is our local population.
Since growth has led to a rise in per capita income and higher standards of living in these economies, it has
given an unprecedented boost to domestic consumption, leading to higher per capita spending.
I believe the emerging economies will be the theatre for action as the decade unfolds. In this scenario, to stay
competitive, the global companies will have to significantly invest in creating assets, building brands and winning
consumers in these economies. Similarly, the domestic companies too will have to compete, or else, build close
business relationships with the MNCs, in order to scale-up. With increased levels of consumer spending, brands
will become key differentiators, as competition will rage not only in the market - place but also in the minds of
consumers. That said, in edible oil space, the biggest differentiators are the brand and quality - the two 4 most
important attributes of our Companys products.
K S Oils Performance in 2009-10
Despite the challenges thrown up by the market and the regulators, K S Oils delivered a record profitable growth
during the year. The Company clocked a turnover of Rs. 4,027 crore and a bottom-line of Rs. 224 crore. Even in
a tough year, the Company registered a growth of 28% on the top line and 33% on profits. K S Oils strengthened
its brand portfolio, while investing significantly in the new product launches in the soyabean segment. This helped
the company in increasing sales and improving margins.
Understanding the Indian consumer

In todays young and vibrant India, two-thirds of Indias population is below the age of 35. In terms of aspirations
and expectations, increased consumerism is bridging the urban and rural divide in this age group. Farmers have
benefitted due to increasing urbanization, SEZs and new townships as the demand for rural land for development
purposes increases. The availability of cheap credit, better minimum support prices (MSP) for crops and
government schemes like NREGS (National Rural Employment Guarantee Scheme) has increased rural
employment and income of farmers. This has given huge benefits to the farmers and seen a new consumer enter
and drive up consumption in the rural market. But equally, better living standards have created an increased
demand for healthy and high quality foods, including edible oils. The discerning consumer of today, both in urban
and rural markets is willing to pay a premium for quality, which is causing a significant shift towards branded oils.
Quality has become paramount in purchase decisions, especially for food items like edible oils. Thus, our brands,
Kalash and Double Sher, built on the platform of purity and quality, have shown premium growth. With a better
lifestyle, consumption of edible oils across the three segments (mustard, soybean and refined palm oil) has
gradually increased.
Building FMCG Brands in FMCG markets
With more than a billion consumers, India is one of the most exciting FMCG markets in the world today. Buying
habits, consumption patterns and spending trends indicate a quality-conscious mindset. Thus, connecting with
the consumer is the key to building FMCG brands. At K S Oils, we realize that building FMCG brands, especially
in the commodity-led edible oil sector, is a slow and steady game. It will require significant investments in brand
building, advertisement spends and trade channel development.
Having made the right moves, K S Oils has achieved 12% market
share of mustard oil market in India and our brands Kalash and Double Sher are the leaders in the branded
mustard oil market. With our feet firmly on the ground and our understanding of the consumer, we believe Kalash
will be one of the finest edible oil FMCG brand in Indias vast FMCG market.
In the past year, we have significantly invested in creating the last mile connectivity with urban and rural Indian
consumers. Today, we reach out to over 2,00,000 retail outlets and are growing this network significantly. Our
focus on Tier II and Tier III Indian cities and upscale rural clusters continues. Our marketing strategy for the urban
segment is to ensure value-added national and local advertising, and brand promotion. Organized retail is a key
strategic partner in growing our brands sales and we have shelf space in all of the organized retail chains.
Robust Backend to Build a Premium Brand
As you may be aware, in the past three years, we have invested capital, human resources and time in building a
formidable back-end support system for the retail led brand push. Today, we have five state-of-the-art production
facilities that follow international best practices in manufacturing high quality products. This is a key differentiator
in the edible oil business. Our procurement strategy in India is bearing fruit, as we continue to develop long-
lasting relationships with Indian farmers through our Khushali program. Our international palm plantation
ownership program is progressing well. Having an integrated low cost production base in place and thus our
ability to control quality has been key to our market leadership in India.
Today our business can be distinctly divided into three separate categories:
- Raw material procurement through farmer outreach programs in India and international ownership of palm
plantations.
- Manufacturing plants, refineries and logistics management.
- Brands - Kalash, Double Sher and K S Gold.
In the last three years, we have created three categories which function as independent SBUs. It has enabled us
to evaluate them separately and identify our strengths and weaknesses. We believe competitive edge, global
operations and scale, flexibility to multi-sourcing, building significant distribution capabilities and innovative
marketing strategies, will be the key drivers of our growth in the future.
Creating the Leaders for Tomorrow
During the year, we invested significantly in building up leadership. We believe, as we grow to a market-driven
brand company, we will need diligent and adaptable talent to take us forward. While we will follow our grow from
within policy for preparing leaders of the future, we will not shy away from inducting exceptional talent from
outside the Company.
In order to build a consumer-centric,
innovation-led organization, we have rolled out a companywide program to ensure that each employee is focused
on the consumer. We have identified over 100 young achievers to create a second rung of leadership and put
them through a fast track career program. When ready, they will become the driving force of the Company,
leading it into its golden jubilee era.
Building Brands Responsibly
It is my personal belief and the guiding mantra at K S Oils, that we will be responsible for our actions. Today, we
have created a growth story with multiple stakeholders and are answerable to each one of them. Concern for
environment, people and communities in which we live, is a key to developing our brands responsibly. During the
year we undertook various initiatives around our manufacturing plants in order toprotect the environment and
focus on the use of alternate energy, recycled water and recovered heat.
Education has been a passion at K S Oils and our association with school activities continued during the year.
Our Khushali project is ensuring a better produce and a better living for Indian farmers and we plan to grow this
program in the coming years. While we expand our brand presence in the market-place with Kalash and Double
Sher, we are committed to building K S Oils as a responsible corporate brand that believes in inclusive growth.
Winning in the Market-place, Winning with Consumers
Going ahead we will have a clear agenda for the next 24 months to strengthen our FMCG brand strategy in the
edible oil sector: Reaffirming Market Leadership: We will reaffirm our market leadership in key markets like
Eastern India. We will strengthen, grow and protect our market share with our renewed consumer focus.
- Reaching the un-served and under- served markets: Our marketing and distribution network will be further
strengthened to create a pan-India reach. We will win market share in our new markets of Northern and Western
India.
- Renewed focus on innovation driven profitable growth: We will continue to focus on innovation driven profitable
growth. Our brand-led strategy, coupled with our low-cost integrated backend model, will help us in lowering
costs, realizing better brand premium and delivering healthier margins.
To conclude, let me ask you two questions: Who is our biggest competitor? And, What is our biggest risk?
While you guess, let me answer it for you. At K S Oils, we are our biggest competitor and also our biggest risk.
Complacency and arrogance that stems from success will never be allowed to set foot in K S Oil. Today, we have
built the best edible oil brands, the best manufacturing plants and the best team and will continue to deliver and
excel as we go forward. Humility of action, integrity of purpose and transparency of conduct will be the key traits
driving our Companys growth as we journey forward into the next 25 years!
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LEADERSHIP & ORGANISATIONS
So You Think You

Understand Emerging
Markets?
Amitava Chattopadhyay, The GlaxoSmithKline Chaired Professor in Corporate Innovation and
Founder & Programme Director, Market Entry Strategy for India | September 9, 2014
587
inShare
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button.png
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c/public/images/2014/09/understanding_emerging_markets.jpg?itok=jy7eMOb_
Given the immense diversity and complexity of countries like India, its better to
approach them as continents. Traditional assumptions about product
development and segmentation should be left at the door.
Edible oils constitute one of the most important components of food expenditure in
Indian households. Used mainly for cooking and frying, India is the worlds third
largest consumer, accounting for 16 percent of the countrys imports.
The myriad different uses of edible oil in India also reflect a multitude of different
regional preferences and habits. For example, soybean oil is mainly used in Northern
and central parts of India due to the availability of soybeans locally. Mustard oil is
mainly consumed in North-eastern and Eastern regions of India as its pungency is
desired, particularly for seafood. Palm oil dominates Southern India due to the warmer
climate and sunflower oil is popular amongst the affluent classes.
In addition to regional preferences, the volume of consumption also differs markedly.

In the North, food preparation is more elaborate during the weekends and oil
consumption is heavier, especially in winter. In the West, due to a mixture of
oily/heavy items as well as simple items, oil consumption is moderate, while in the
East, primarily rice diets mean less consumption compared to the North. In the South,
main meals are also less oil-dependent. Adding the vast differences in income across
all regions and the multitude of castes, language, dress, forms of worship and kinship
and mixture of rural and urban residents, the market is complex to say the least.
Imagine being a provider of edible oils in such a country!
Greasy business
In a recent case study based on the experiences of a global food and agriculture
company, which well call Healthy Oils, we can see the kind of considerations
business leaders have to make in approaching emerging markets such as India.
Healthy Oils is no minnow. Ranking among the worlds top 100 companies, Healthy
Oils is an international producer and marketer of food and related products with over
100,000 people located in over 50 countries. It started out selling packaged vegetable
oil in India in the 1990s. By 2011, Healthy Oils had a portfolio of four packaged oils
as well as other products.
But the company was at a crossroads in 2012. Rehaan Roy, chief marketing officer of
Healthy Oils India, had commissioned a study to see how it was faring in the Indian
consumer market, but the report did not paint an encouraging picture. While Healthy
Oils four offerings in the market were recognised by consumers looking for cooking
oil, they were not in the top five in terms of brand awareness, nor were they top choice
in the most often used category. Having spent a considerable amount acquiring a
suite of edible oils from other market players and with the multi-brand strategy being
to move from a bulk business to a consumer-facing retail business, Healthy Oils
products remained second tier consumer offerings.
Roy had a lot of questions to consider, such as who were the target consumers for
each of their brands? In which category did Healthy Oils strength lie? What would
drive them to the Healthy Oils categories? And what should the brand promise and
marketing strategy be?
Leave your assumptions at the door
As I will soon be teaching in a new executive development programme, Market

Entry Strategy for India, such conundrums require a new framework of
consideration. Executives can often apply tried and tested models and assumptions, or
at least some assumptions, when expanding across borders. But the complexity of
entering India is akin to entering a continent, not just a country. Even edible oil is not
homogenous.
Cereal brand Kelloggs learned this lesson to its peril in 1995 when its products were
made available nationally after first entering the market in Mumbai in 1994. Kelloggs
initial offerings in India included cornflakes, wheat flakes and basmati rice flakes. But
despite a whirlwind of public relations activity and the full backing of its
management, the products failed to make a dent in the Indian market. Indians werent
used to the packaged and processed offerings. They also had a traditional habit of
boiling milk and consuming it warm, which gave Kellogg flakes an odd taste.
Consumers were also extremely price sensitive and Kelloggs was up against the wide
availability of low-priced traditional breakfasts. Negative media coverage about the
taste of the products also stung Kelloggs and sales stagnated. Much like Healthy Oils,
Kelloggs hadnt thought about segmentation and it made the mistake of focusing only
on the premium and mid-level retail stores. With 80 percent of Indians living in
villages outside of the big cities, it was missing a huge opportunity.
Only after Kelloggs introduced multiple products and put out a wider array of
packaging sizes to cater to different consumer groups did it start to make progress. It
also made its packaging less elaborate which allowed it to bring down price, another
consumer purchase hurdle.
Product adherence can be one of the biggest challenges in the Indian market, as this
humourous HSBC advertisement shows with a drinks vendor mixing lassi in a
washing machine.
Framing the challenge
There is no one-size-fits-all solution to adapting your products or services to emerging

markets like India. But the following steps can at least help to frame the problem, and
hopefully, the solution.
1. Awareness Adapt communication means to local conditions and tastes, such as

using street theatre, radio drama, or health camps to capture the attention of the target
group and provide an interesting way for them to get information and gain knowledge.
Consider leveraging local partners to create awareness.
2. Appeal Make the product acceptable to the target market by understanding the
living conditions and constraints faced by them on a daily basis, including the groups
beliefs, habits, social norms and cultural traditions; and adapting the product to meet
the low-income consumers requirements or infrastructure constraints like lack of
clean water, for example, in terms of formulation, size and packaging.
3. Affordability Adjust pricing to make products affordable to low-income

consumers or make available financing mechanisms to the target group through
micro-finance etc
4. Availability Make the product physically available close to the target consumer
by working with local partners or taking advantage of existing distribution channels of
partners for the last mile of distribution; and more importantly, make sure the
consumer gets the right product through proper training of staff.
5. Alliances Work with partners in private and public sectors (locals, regulators,
NGOs) that can help deepen understanding of the market, facilitate operations, build
awareness, enable availability by opening up distribution channels, and help with
affordability by providing financing options.
6. Adherence Make compliance easy, in the case of pharmaceutical companies, as

too complicated a drug regime can make it difficult for low-income consumers to
adhere to medicine-taking, for example, too many times a day, too many pills to take
etc. due to lack of education or lack of facilities like clean water.
My ultimate advice is to get to know the market and the consumer up close, not on a
spreadsheet or a PowerPoint slide deck. I take my executive students to have tea with
consumers in their homes, get to know distributors, legal firms and research firms to
understand not just the complexity of India, but also the constraints the consumers
face and how you can unlock their potential loyalty. Being present is only half the
battle, being engaged is the rest.
Read more at http://knowledge.insead.edu/leadership-management/so-you-think-you-understand-emerging-

markets-3562#HRfOuvat4BP6mTxB.99
Bunge spreads out market increase
strategy
Bunge spreads out market increase strategy
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First Published: Sat, Feb 10 2007. 12 00 AM IST
Updated: Fri, Feb 09 2007. 11 26 PM IST
Mumbai: Global agribusiness and food major Bunge Ltd is stepping up its presence in Indias
Rs45,000 crore staple food market to tap the pick-up in the industrys growth rate, currently at 15-
16% per annum.
The company has chalked out a three-pronged strategy for growth, including acquiring regional oil
brands to supplement its portfolio of vegetable oils and fats in the Indian market. We are in talks
with a few regional brands for acquisitions, but are waiting for a feasible valuation, said Bunge India
managing director Adhiraj Sarin.
Bunge also plans to introduce cooking oils and fats from its global portfolio that are not yet here.
The $25 billion (Rs1.1 lakh crore) Bunge, best known for Indias largest vanaspati brand Dalda, also
sells Chambal soya oil and Masterline butter. Its global portfolio includes Elite Nutra clear Canola oil
and Squirrel Peanut oil.
Globally, Bunge sells oils processed from soyabeans, corn, cottonseed, peanut and canola. For
instance, it sells corn and olive oil Lesieur in France and sunflower oils Vnusz and Floriol in Hungary.
In India, it only has soyabean and vegetable oils.
The Indian market for edible oils is largely dominated by sunflower, groundnut and mustard oils in
addition to large-scale sales of soyabean and palm oil at the cheaper end. Corn oil and rice bran oil
too are sold in limited quantities with imported olive oil targeted at connoisseurs.
Dalda vanaspati (the poor mans ghee) is currently sold at Rs68 against Rs50 per litre for a pack
of pure ghee. Health-conscious consumers purchase sunflower oils such as Maricos Saffola as they
are supposed to be more heart-friendly.
In tune with its global position as the largest seller of bottled vegetable oil, Bunge is in talks with
organized retailers in India to supply vegetable oils to be sold under its own brands.
For instance, Food Bazaar gets its Fresh and Pure brand manufactured by Ruchi Soya, which also sells
its own Nutrela brand. Food Bazaar claims that edible oil accounts for more than 10% of its revenue.
Reliance Retail and Subhiksha have approached us for supplying loose oils for their private labels,
but we are still to take the final decision as yet, said Sarin who represents the worlds largest
oilseed processor in India. Partnering with a global player like Bunge would help these retailers get
global supply chain efficiencies to bear on their final product price, especially when both chains are
positioned on a value-for-money platform.
While Reliance has forecast that retail will be a multi-billion dollar business in a few years for it,
Subhiksha is already the largest chain of supermarkets in Mumbai with over 74 outlets.
Globally, Bunge has been focusing on high growth areas such as South America and Asia. Asia
accounts for almost 1/3rd of the world population and is one of the few regions of the world where
population is expected to expand unlike Europe for instance.
The economies of the region, too, are growing rapidly powered by the over 9% growth in India and
China which is leading to rising incomes and greater demand for basic products like oils used for
everything from garnishing dal fry to frying samosas.
Brand journey: Dalda evolves from Levers vanaspati
to Bunges edible oil
Being one of the oldest cooking medium brands, Dalda has come a long way
with its rural marketing strategies. In order to understand the brands
journey, BestMediaInfo.com caught up with Prashant Sukhwani, Senior
Marketing Manager, Bunge India
Archit Ambekar | Mumbai | May 25, 2016
Refined oils have emerged as an essential cooking product for most households in the
last two decades. Historically, there was a time when ghee was considered expensive
and not all households could afford it. Thats when Hindustan Lever (which then owned
Dalda, now owned by Bunge India) launched a similar affordable product called Dalda
as an affordable Vanaspati ghee for the common man.
The brand has come a long way since then. It was at one time so popular that people
thought it was a monopoly in the edible oils category. But it didnt. There was always
local competition which was less highlighted because of less communication and a
lesser evolved media back then.
Taking us through the journey, Prashant Sukhwani, Senior Marketing Manager, Bunge
India, explained how Dalda has been relevant with the changing needs of the consumer.
From being the oldest player in the category to launching refined oils about a decade
back, internet has it all. Sukhwani was glad that people believed the brand had a
monopoly.
On the rural front, Dalda has been doing some phenomenal work. Sukhwani said, We
have been a part of the biggest melas in different parts of North India like Nauchandi
Mela, Bareily Numaish, etc., which attract crowds of over 10 lakh in a span of a month.
These melas become a hotspot of rural consumers who travel from near and far.
These melas become a good touch-point for us to engage with our rural consumers.
Besides we also run contests for the entire mela duration.
Meanwhile, for metros, the brand does a 360-degree campaign that involves using of
traditional media like television, print, radio, cable and experiential marketing.
The brands communication has always been simple across all media. While
communication has changed over the last decade, it is no different for Dalda. Sukhwani
said, In the last couple of years, as a strategy, we have been trying to contextualise
the brand with the celebrations of consumers. Dalda brand stands on the pillars of
legacy, taste, trust, mothers and expression. Our campaigns and activations reflect the
same. In each of our activation we try to give a platform to our target group to express
them. Our campaign calendar works on purchase cycles and festive bursts with
experimental marketing initiatives to meaningfully engage with our consumers.
Transition from vanaspati to edible oil
The journey isnt smooth for all brands. There are always challenges and competition
will ensure you do better. For Dalda, the association always rested with vanaspati. The
challenge was to move this to edible oils as a category. But it was a natural shift
considering the nature of business.
Prashant Sukhwani
During the launch we had the product shot 10-seconders to establish the presence of
the brand in the edible oil space, besides a thematic TVC which focussed on our brand
proposition. The launch was a 360 degree campaign, Sukhwani informed.
During Holi this year, Dalda did the Dalda Holi Milan Samorah in more than 15 cities
across multiple states. They believe in experiential marketing and wanted to provide a
platform to its target group to come and express them. The association was fruitful.
We received tremendous response for it and it has become a brand property with us.
Such initiatives help us engage with consumers in a more meaningful way and
understand their journeys of evolution which help us contemporise and contextualise
our initiatives to suit the consumers better, said Sukhwani.
The campaign improved the brand scores by over 5 per cent across key awareness
metrics in targeted markets. The brand has consistently been growing in double-digits
year after year, although it couldnt reveal figures for this and for their marketing
budgets.
Speaking about the way forward, Sukhwani said, We have quite a few marketing
campaigns lined up for the year. We are targeting campaigns around appropriate time
periods in different parts of the country. The details cant be revealed now but expect
exciting marketing campaigns coupled with high quality consumer engagement
initiatives in the coming months.
Strategy
Special Columns 4Ps
4Ps Nation When advertising is straight

from the heart!
Abhimanyu
And offerings dil se... Thats Saffolas sojourn
Ghosh
with the consumers heart
The Last Word
Rajita Straight from the heart

Chaudhuri might be one of the classic
numbers from the music
International sensation Bryan Adams, but
Column Exclusive when it comes to burly
Jack Welch
brands flaunting their
communiqu, Saffola
manages to outdo the rest with its Dil Se campaign.
This 40-year-old brand from the stable of Marico came
into limelight in 1993, when a string of advertisements
were unfurled creating a furore amongst the
advertising fraternity and the consumers. Not
surprisingly then that The Advertising Club of Bombay
bequeathed Saffola with the Brand of the Year title on
two occasions, one in 1993 and more recently in 2005.
Incessant innovations ensured that Saffola always
remained ahead of its competitors. The brand was
repositioned as Heart of a Healthy Family and
extended to a value-added edible oil and salt.
Speaking about Saffolas unique positioning, R.
Chandrasekar, Category Head (Saffola), Marico
mentions, Saffola started its journey from being a
curative heart-care brand to a preventive heart-care
brand a few years back and the process also saw the
setting up of the Saffola Healthy Heart Foundation,
with the objective of spreading the message of healthy
living and heart-care. He goes on to add, The basic
drive through the years has been to inform people
about the risks of heart disease and inspire people to
adopt a healthier way of living.
If 2002 saw Saffola starting an interactive web site,

www.saffolalife.com, to guide heart-carers as well as
health seekers on various aspects of dietary health;
the year 2004 proved to be significant for the brand
with its Dial a Dietician service, aimed at giving free
advice on the dietetic facets of health by a team of
experts.
Be it the Aaj Se ad or the Abhi to mein Jawaan Hoon

campaign, Saffola has audaciously advocated the
quintessence of a healthy lifestyle in each of its
endeavours. The Aaj Se campaign launched in 2004
touched many a hearts & encouraged health
aficionados to follow a healthy lifestyle. The campaign
met with a heart warming response with the viewers,
resulting in a noticeable surge in sales. It later went on
to grab the Grand Effie 2005 award.
Interestingly, Saffola has
more often than not refrained
from using brand
ambassadors. Says
Chandrasekar, The brands equity has been strong
enough to not warrant the need of a brand
ambassador. Strategically, the brand does not need to
put an ambassador into play. However, he is quick to
add, To reinforce tactical communication, we have
used brand ambassadors in the past like Boman Irani
for Saffola Salt and Chef Sanjeev Kapoor to talk about
LoSorb a unique property in our oil, that allows for
lesser absorption of oil. Saffola churned out a witty ad
Prayaschit to communicate Saffola Golds LoSorb
technology. This technology lessens the inclusion of oil
into food and Saffola brought this aspect out well by
crafting a commercial that was strongly linking it with
consuming oily food.
Saffolas thrust on offering a 360 degree

communication resulted in partnering with Radio One
in a reality show, which saw the 10 member RJ team
of the radio station undergoing a rigorous fitness
regime. Saffola surely knows how to practice what
they preach, as Marico got its entire sales staff to
literally start living the Saffola way of life, which
included maintaining a healthy intake of food, regular
exercise and this project was aptly named Fit-Test.
Saffolas sojourn with the consumers heart began over

four decades ago and till date it continues its unending
penchant to communicate Straight from the heart and
offer products that are Dil Se.
Agro Techs food business strategy can take a
longer time to play out
Anaemic growth in the core edible oil business means Agro Tech has limited resources to
spare, resulting in squeeze on ad spends and brand promotion
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R. Sree Ram
Agro Tech aims to increase the contribution of the food division by four percentage points to 25% of
the revenues by the end of current fiscal.
Agro Tech Foods Ltd reported a better-than-expected 12% rise in profit for the March
quarter. Profits grew after four consecutive quarters of decline. In the first three quarters of
the previous fiscal year, profits had fallen in the range of 15-28%.
The growth in the March quarter has been driven by cuts in advertisement expenditure. If the
company had maintained the advertisement spending at the year-ago level, then profit would
have fallen in the March quarter too.
In fact, advertisement expenditure has been falling since October 2014. From 9% in the
second quarter, advertisement expenditure as a percentage of sales dropped to 5% in the third
quarter and further to 1.6% in the last quarter. The sharp cuts in advertisement spending, at a
time when Agro Tech is transforming from an edible oil company to a food products firm has
drawn flak from analysts.
The company aims to increase the contribution of the food products to overall revenue from
less than a quarter at present to half in the next few years. As part of the plan it has launched
popcorn and peanut butter products. While the segment grew by an encouraging 18% in
2014-15, growth petered out in the last quarter, disappointing analysts.
The food business either remained flat or saw a slight decline in the last quarter, say analysts.
Agro Tech did not divulge the exact number. The edible oil business grew only marginally.
As a result, overall revenues in the March quarter fell 0.6%.
The company plans to drive food business growth by increasing its footprint. It proposes to
introduce 1-2 products every year. In the process, it plans to increase the store count from
200,000 outlets to 500,000, Edelweiss Securities Ltd said in a note.
But some doubt if this distribution-led model alone can help Agro Tech transform itself into a
food products company. According to IIFL Institutional Equities, the companys new
products as well as the edible oil business are seeing under-investment in advertisement and
brand promotions. The distribution-led model, unless supported by advertisement push or
consumer pull, can be slow in achieving its objective, the broking firm says.
The problem is that anaemic growth in the current core edible oil business means that the
company has limited resources to spare, resulting in the squeeze on ad spends and brand
promotion. This in turn furthers the belief that the transformation into a food products
company can take longer time. Low gross profit growth in edible oil segment is likely to
constrain Agro Techs ability to expand the food business fast, IIFL said.
In spite of these challenges, Agro Tech aims to increase the contribution of the food division
by four percentage points to 25% of the revenues by the end of current fiscal. Investors would
be happy if the company achieves this by growing the turnover as well. Last fiscal year,
revenues dropped 0.7%. They are down almost 4% from 2012-13 levels.
ooperative unions of farmers, financed by the National Dairy Development Board. These plants have been created at
strategically selected locations which ensure that Dhara's transportation and distribution costs are kept to the minimum
and consumers get their choice of the freshest edible oil from Dhara.
Product
Dhara has 23 variants of mustard, rapeseed, sunflower, groundnut and soyabean oils in its product basket. Dhara Refined
Vegetable Oil contributes 50% by value, to the Rs. 3,300 million turn over Dhara enjoys.
Despite being primarily a support to the small-scale Indian farmer, Dhara has played a crucial role in changing the
industry norms and enriching the sluggish edible oils market. For instance, the brand was the first to change the weights
and measurement descriptor from the kilo regimen to the litre regimen.
The consistency that it has managed to maintain has won the brand support from consumers and stockists alike.
Dhara is possibly stocked by more retailers than any other packaged edible oil brand in the country.
So profound has been the impact of Dhara on the Indian market that consumers often ask for the 'Green Pack'. This has
led many players in the industry to themselves switch to this colour.
Recent Developments
In the last few years competition has multiplied substantially. A number of new entrants have enlivened the market and
brought with them a host of strategies and 'tried and tested' formulae. To ward off these threats Dhara has launched a
number of its own initiatives and put in place a price-taste flanking strategy.
At the one end it has covered the lower and, therefore, potentially the most exciting price point by launching Dhara
Fit 'n' Fine.
This is refined soyabean oil. There are plans to introduce other oil types and blended oils under the same brand. At the
same time it has put in place six strategically located refining and packing stations to control distribution and
transportation costs and ensure consumers get fresh oil each time they go to the market.
At the other end, specific regional activities are carried out to catch the local flavour. A high level of interest is
maintained by organising a series of local events and contests.
Dhara does not need to discount its brand. It prefers to value add to both the experience as well as the actual purchase
process.
Promotion
The brand's promotions have always evoked enthusiastic response from consumers. This trait has been evident right
from the first
advertisement of Dhara that appeared in 1988, talking of 'the true price of oil'.
At that time the market was mostly dominated by unbranded oils, sold loose.
Dhara faced the challenge of converting the consumer to the quality and reliability of packed and branded oil. The
campaign for Dhara Refined Vegetable Oil was a classic case of a promotion that succeeded in reinforcing all brand
attributes: taste, purity, consistency, freshness and a product that offered consumers value for money. Consumers were
converted to 'the goodness of Dhara' with the base line: 'Anokhi shudhta, anokha asar'.
Dhara has also successfully passed the test of creating a sub-brand that had a distinct identity from the mother brand.
The campaign for Dhara Health Refined Sunflower Oil was about 'Good Health to get more out of life'. The promotion
successfully crystallised the benefit of de-waxing less oil sticks to the food, therefore, less is consumed, therefore, a
feeling of lightness and energy is felt after a meal. The communication was built around the idea that fathers would feel
more energetic even after a complete day's work.
To strengthen Dhara Health's platform of 'Pride in Dad, the brand celebrated Father's Day with a unique promotion in
June 1998. The offer was a Dhara Health T-shirt printed with the photograph of any father or child, sent in by
respondents. In keeping with Dhara's innate brand philosophy, this offer was not linked to product purchase. Dhara has
also organised festivals of favourite Hollywood films for children, screening movies like Spiderman and 102
Dalmatians.
Another very successful area for brand promotion has been cookery columns in leading
newspapers, which have almost become an eloquent testimony to the association between good cooking and Dhara.
Various contests and activities are built for housewives in these columns.
Even in its promotions, Dhara tries to deliver value additions for the consumer. This tenet holds sway over spending
monies on simple advertising. Thus, at the beginning of each year, Dhara offers specially designed 'year-planners' for
housewives to help them keep track of daily and monthly expenses. This has proved to be enormously popular with a
huge segment of edible oil consumers.
Brand Values
Dhara is a home grown brand which stands for purity, freshness, taste, value for money, consistency and lineage. As part
of this ethic, Dhara has made it its business to satisfy the needs of all segments of consumers, without compromising on
the quality of its products. In its very special way Dhara strikes an emotional chord in consumers because it is uniquely
theirs, uniquely Indian.
Notwithstanding the increased competition, Dhara continues to put all efforts to retain its position. Perhaps, that is why
when a consumer reaches out for a pack which has the legend 'Dhara' printed on it, she knows that she is buying into a
trusted brand that offers the assurance of purity and comfort.
Things you didn't know about

Dhara
More than 150,000 packs of Dhara are sold everyday. This translates into100 packs every minute, around the clock.
The baseline of the sub-brand Dhara Health My Daddy Strongest has become part of the colloquial parlance in many
parts of the country.
Dhara was the first edible oil brand to change from the kilogramme measure to the litre measure in its packaging.
Dhara was the first and remains the only brand in the country to offer the six-layer tetra pack packaging to seal in the
purity of oil.
FORTUNE REFINED
SOYABEAN OIL-
MARKETING DIARY
MARKETING DIARY
FORTUNE REFINED SOYABEAN OIL
As part of the marketing diary project at SIMC, Pune and project given by Mr.
Chandan Chatterjee, I am writing this blog on the product Fortune refined
soyabean oil. With this blog, I hope to convey details of the product to you in the
best way possible so that by the end of this blog, whenever you go to buy cooking
oil, your first preference becomes fortune refined soyabean oil. I hope you have a
good, fun learning experience and you get an insight of the aforementioned
product. So here it goes.
INTRODUCTION
Firstly lets start with the introduction of the product. Fortune refined soyabean oil
is a product of the company named Adani Wilmar Ltd and the origin of this
product is Indian. The Adani group is a leading company in infrastructure and
international trading and Wilmar is an agri-business group who is leading
merchandiser and processor of edible oils.
Fortune refined soyabean oil is odourless, very light, has got no colour and a
healthy oil. It is used by many Indian households and across the world as well. The
oil comes in a pouches which costs Rs 110 per pack per liter. The oil contains
omega 3 which is a fatty acid and contains pufa which needs to be supplemented
from outside sources. Soyabean oil helps control cholesterol and reduces it too
which is healthy for heart. It is available on almost all the stores in India and
worldwide and with the health benefits it has, people prefer it over other edible
oils.
CUSTOMER PERCEIVED VALUE

Customer perceived value(CPV) is the difference between a customers total
evaluation of the product in terms of the benefits of the product and the cost
offering along with the alternatives in the market available at that period of time.
Total customer value refers to the economic, psychological and functional benefits
that a customer expects from the product.
Total customer cost is total cost that a customer expects or incurs in evaluating,
obtaining, using and disposing of the product available in the market during that
period of time.
CPV of Fortune refined soyabean oil
In case of my product Fortune refined soyabean oil, the image value of the product
would be related to the firm Adani-Wilmar it is associated with and the brand
value of fortune oil. Adani-Wilmar is an international brand for edible oil across
the world having the largest market for cooking oil in India. The Indian market for
oil is worth Rs. 90,000 crore out of which 40% of the household uses branded
(packaged) edible oil with fortune as Adani-Wlmars product, in the first year they
occupied 17.25% of the Indian market. Personnel Value is not applicable to my
product. The service value of my product comes directly from the wide packaging
network of Adani-Wilmar. They have packing operations at Delhi, Rajkot,
Amravati, Chhatral, Jagraon, Allahabad, Gwalior etc covering majorly all states in
India and the supply of the product is never short and because of the packaging
operations in many states, the product is easily accessible across country. Fortune
refined soyabean oil is lite, odourless and colorless and contains omega 3 which is
an essential pufa agent supplied by the external sources. The oil is 17% less oily
than the competitive products that are there in the market and company provides it
with a tagline Oil which is not oily. These things add up to the product value. All
these factors stated above compile up to the total customer value for the product.
Now, lets talk about the factors that include total customer cost. The first thing
includes the psychological cost of the product. With the trend changing in staying
fit, using less amount of oil in food or using oil which is fat free is what people buy
at the first place. With all the competitive products, Fortune refined soyabean oil
contains 17% less fat and is very light in nature. The cost of the product for a 1
litre pouch is Rs 110 which is a little higher than the competitive products which
come in the range of Rs 90-110, but the health benefit provided with the soyabean
product makes it the first preference today. If we talk about the energy cost of the
product then it depends on the household using that product. On an average
soyabean oil is not much used in food, and the product being odorless and colorless
doesnt gives effervescence or fumes and can be easily used while cooking. Time
cost is not applicable to my product because it depends on the food item being
cooked. If it comes to the product, then the pouches and cans are easy to use and
do not consume time. Price of fortune refined soyabean oil is Rs 110 for 1 liter
pouch which is a bit more than the competitive products such as Dhara, Sundrop
etc but containing soyabean contents and being best suited for health, people prefer
this product. Therefore, aforementioned contents come under the total customer
cost.
CONSUMER BUYING BEHAVIOUR

Q1. Who buys this item(fortune refined soyabean oil) ?
Ans1. The potential customers for the given product are-

Households
Restaurants
Hotels providing the kitchen service.
Q2. What problem will this product solve?
Ans2. Fortune refined soyabean oil contains omega 3 which contains pufa which is
an external source needed in food. By using soyabean oil, the content of fat has
been reduced by 17% in the cooking oil. Staying fit is the new trend and
consumers go for the product which keeps them fit and have low cholesterol
content. Soyabean oil contains zero cholesterol level which makes fortune refined
soyabean oil the best product for people who have heart diseases. One tablespoon
of soyabean oil provides you 6% of recommended content of vitamin E in diet.
Q3. Which attributes are important and why ?
Ans3. The first attribute would be the soyabean oil that is used by the brand
fortune refined oil. Soyabean has high nutritional value which provides omega 3
fatty acid and reduces the cholesterol content in diet as it is absolutely cholesterol
free and good for heart patients. By providing 6% of vitamin E in the
recommended diet, the product is has high sale value. The second attribute would
be the cost of the product which is Rs 110 per liter per pouch, which is slightly
more than its competitive products in the market but inclusion of soyabean oil
makes it value for money product. The third attribute would be the taste of the oil.
The oil is colorless, odorless and very light in nature and does not contain any taste
of its own. While cooking, the product doesnt give any foul effervescence or
fumes and can be used in any beverage.
Q4. If it is a first time decision, how will it go? If its repeat, then how will it go?
Ans4. With the tagline thoda aur chalega, fortune launched this product for the
consumers who wish to eat food which has high oil content but because of the
health issues they are not able to eat. With the launch of fortune refined soyabean
oil, consumers got an option to eat oily food without any cholesterol content in it.
In the first year of the launch of product, despite of the competitors like Saffola,
the oil could grab 17.25% of the Indian market share in edible oils. The price of the
product was kept low and competitive for the Indian market and the sales boomed
in the first year of its launch which evidently showed that consumers drifted
towards the new health conscious product for a healthy lifestyle.
With no smell or effervescence and fumes and due to the low cholesterol content,
the product was repeatedly bought by its first consumers and also new consumers
added in the forthcoming years. This Oil became the first choice amongst the
category of edible oils. But, the price of the product because of its high demand in
market went up but the buying behavior of consumers did not change and still they
stuck on the decision on buying this product. Price as mentioned is competitive in
the Indian market and with the health benefits involved, consumers prefer it.
Q5. How was the deliberation(thinking) in your head ?
Ans5. In my opinion, I thought with the rising price of the product it wont do well
in the market. But, on an average, with the concept of changing behavior towards
ones health and bringing out a product for people who have heart diseases, sale of
this product did not go down. I personally while cooking have used this oil since
few years and because it does not add any additional taste to the food, it does not
emit any foul smell or fumes, this product has been my priority while cooking.
There is no stickiness in the oil and it is very light. The price of the product is
competitive additional to the health benefits it has. I know many households which
use this product and whatever misconceptions I had regarding the downfall of this
product because of increasing price arent there now. The product has got many
loyal users now.
COMPETITOR ANALYSIS
Fortune refined soyabean oil was launched as a better oil in the market. The main
idea behind the launch of such product was the guilt free eating. For all the people
who are health conscious and cheat their diet by eating oily food or have heart
diseases and still eat oily food, this product was the best alternative for them. The
launch of the product with powerful commercials and advertising made the product
number 1 product in just two years of its launch. There were many factors which
made it a better product amongst its competitors Sundrop and Saffola in 2004. The
first advantage was that having a port based refinery and not outsourcing that made
Adani-Wilmar save cost. Secondly, the product had better quality factors amongst
its competitors then by providing soyabean oil which has high nutrition value and
zero cholesterol. Omega 3 fatty acid which provides pufa as an additional source
was provided only by fortune. The product has no fishy smell, no odor and no
color. Thirdly, cost of that product was kept low and competitive in market which
attracted consumers too. Now, the price of 1 liter pouch of Saffola gold is Rs 144
and Sundrop is Rs 157 which is still higher than the cost of fortune refined
soyabean oil which is Rs 110. Despite of having soyabean oil as its USP, the price
of the product has been kept low in comparison to its key competitors in market.
Fortune put itself in the value for money category, a good quality product at a
reasonable price.
By the end of 2003, fortune had 17.25% share of the Indian edible oil market. The
product did well only because of the soyabean oil. In 2007 the change of agency
was seen with Triton coming in. The clichd advertising of cooking oils by
showing tasty food was changed by fortune soyabean refined oil by showing the
nutrition and health sides of an oil by consuming the product with no guilt and the
famous taglines then were ab bus toot pado, and the joy of eating.
Fortune is leading the Indian market now by 13% of share in edible oil market in
India currently. The branded segment of oil comprises of 40% of sales and
annually it is growing at the rate of 15-20%. Fortune needs to remain ahead of the
curve and while being contemporary it should change with time something like
Horlicks which keep on changing their packaging or modifications of the product
by making it better. The idea is to retain the loyal consumers as well as gain new
consumers of the product.
PRODUCT LIFE CYCLE

A product goes through lot of stages during its lifespan. The various stages a
product goes through are called its product life cycle (PLC). The stages are divided
into four parts- introduction, growth, maturity and decline.
Introduction stage includes few sales and very less profits because the product is
just being launched in the market and all the company expenses goes in the
production of the product at that time. The growth stage involves acceptance of
product in the market where the consumers are aware about the product and sales
of the product increases followed by profits. Maturity stage includes decline in the
sales of the product as the product is well known in the market and is being tried
and tested. With the coming of competitive products which can be better in the
market, sales start declining or they stabilize. Decline stage includes the decline in
the sales of the product as consumers shift to better product which is now available
in the market.
PLC of FORTUNE REFINED SOYABEAN OIL
Let us now see the life cycle stages where the product fortune refined soyabean oil
has gone through.
Introduction stage- Adani-Wilmar launched the product fortune oil in the year
2000. Within 20 months of its launch, the product became the highest selling
product in the edible oil market in India. 17.25% share of the Indian edible oil
market comprised of Fortune oil. With the introduction of soyabean in fortune
refined oil which had health benefits, fortune refined soyabean oil became the
first choice of its consumers. The tagline- thoda aur chalega, which involved
concept of guilt-free eating, became very famous. Adani-Wilmar used good
promotional strategy by making advertisements in accordance with the
changing trend in the society of staying fit, living healthy and consumption of
all sorts of food even by people having heart diseases. The product was
launched at a competitive price in the market and was never put as an over-
priced product and till date the price of the product is competitive.
Growth stage- Fortune refined soyabean oils success was seen in just two
years of its launch. Fortune oil became the largest selling brand across the
country. Fortune was awarded the most trusted brand by reader digest three
years in a row from 2006-2008. The branded products of soyabean oil in the
country comprises of 34% of the market share out of which fortune refined
soyabean oil has the highest market share.
Maturity stage- Fortune has managed to receive acceptance from most of its
potential buyers. Fortune refined soyabean oil has 20 million households as its
users. To improve the number of sales and profits and target more customers,
Adani-Wilmar has adopted new strategies. With the developments in the
product by introducing fortune soya plus, re-positioning and re-vamping of the
packaging is been done. The new label is more eye catching and distinctive
and is set to take the product on a new level. New advertisements with tag
lines ab bus toot pado and joy of eating have been aimed to target more
consumers.
Decline stage- Fortune refined soyabean oil hasnt seen the decline stage yet
because the sales and profits are still increasing with consumers buying more
soyabean oil for health benefits and fortune is the priority in terms of soyabean
oil. Therefore, the decline stage is not applicable to the product.
As told by our professor, there is one more concept which is called industry life
cycle (ILC). ILC for my product has an S-shaped curve which is similar to
sinusoidal or a sine curve where half of the curve is in the fourth quadrant which
shows the decline stage of the product or where the sales and profits of the product
are less. The second curve is in the first quadrant which shows the product earned
profits and sales of the product are high. For fortune refined soyabean oil, the sales
and profits were less during its introduction stage where people were not aware of
the health benefits of the soyabean oil. After Adani-Wilmar came up with the
advertisements and people got to know about the health benefits of soyabean oil in
food and after use of the product which didnt leave any effervescence and odor,
fortune refined soyabean oils market grew and within 20 months of its launch, it
became the foremost choice of consumers for edible oil.
PRODUCT LEVELS
There are five product levels that are applicable to a product (as per Kotler). We
can see consider these levels in the form of concentric circles starting from the
innermost circle defining core benefit. Now let us see these five product levels in
relation to my product Fortune refined soyabean oil.
Core Benefit- It is the innermost concentric circle which says why a consumer
really buys the product. In case of fortune refined soyabean oil, a consumer
would buy the product to cook food. That is the most fundamental reason a
consumer would buy edible oil.
Basic Product- A marketer would turn core benefit into a basic product. For
fortune refined soyabean oil, a consumer would be seeking for cooking oil
which is branded, trustworthy, does not give any effervescence or foul smell
on cooking food.
Expected product- The third level is expected product where the consumers
expect some attributes of the product when they buy it. For fortune refined
soyabean oil, the expectations of its consumers would be its price which is
lower as compared to its competitors Saffola, Sundrop etc., less oily which it
the product is as it is 17% less oily than other products, odorless as it shouldnt
emit any foul smell while cooking and health benefits which soyabean oil
provides.
Augmented product- At the fourth level, marketers prepares a product that
exceeds customers expectations. In case of fortune refined soyabean oil,
Adani-Wilmar introduced soyabean oil in fortune refined which has health
benefits exceeding its consumers expectations. The oil contains omega3 fatty
acid which is an essential external agent in the food. Also, one tablespoon of
fortune refined soyabean oil gives 6% of vitamin E content which is essential
for body.
Potential product- It refers to all the augmentations and transformations that
the product would go in future. In the case of fortune refined soyabean oil,
fortune started with the product fortune soya plus which has less cholesterol
level and is less oily that the fortune refined soyabean oil.
3C Model
Kemichi Ohme gave a 3C model which had its 3Cs as customer, competition and
company.
CUSTOMER ( CORE BENEFIT, EXPECTED PRODUCT)

COMPETITION (BASIC PRODUCT, AUGMENTED
PRODUCT) COMPANY( BASIC PRODUCT,
POTENTIAL PRODUCT)
Now let us see the link between the 3C model and product levels for the product
fortune soyabean refined oil.
Customers- The core benefit would be directly linked to the customer as

customer would be the one who would consume the product after buying it. In
case of fortune refined soyabean oil, it is for the cooking purpose which is its
core benefit. Expected product of the product would also be directly linked to
the customer as customer would look forward to the product which has
qualities like less oily, odorless and has health benefits.
Competition- In case the product is not new to the market, it would lie under
competition. For fortune soyabean refined oil, it had competitors such as
Saffola, Sundrop etc; therefore it will lie under the competitor. Because fortune
refined soyabean oil provides soyabean oil unlike its competitors, it would
come under the competitor as it is better than other products in the market
because of health benefits.
Company- Fortune refined soyabean oil would come under company as its
basic product because its Adani-Wilmar who launched the soyabean oil in the
Indian market for the first time. Potential product of fortune refined soyabean
oil is fortune soya plus with extra health benefits and is less oily. It is the
transformation that the company has made to improve its product.
SETTING THE PRICE
Fortune refined soyabean oil was not the new to the market product because before
its launch Fortune had number of products in edible oil segment. Though adding
soyabean oil to the fortune product was a new launch in the Indian market as none
of the competitor had soyabean oil as an additional component to their edible oil.
Setting up the price of the product involves six basic steps which are- setting the
price objective, determining demand, estimating costs, analyzing competitors
costs, prices and offers, selecting a pricing method. Let us now briefly study these
steps of setting the price for fortune refined soyabean oil.
Setting the price objective- When fortune refined soyabean oil was launched,
the main objective was to introduce soyabean oil for its health benefits. The
cost of the product was kept low and competitive in the market so that it
attracts consumers and not make them skeptical in buying a product which is
healthy. With the usage of the oil, within 20 months of its launch, the product
acquired 17% market share and companys objective of maximum market
share was also achieved.
Determining Demand- There has always been a demand of cooking oil for the
food. With the changing trend of having guilt-free food and staying fit, the
demand for an edible oil with health benefits and less cholesterol level came
up and it was the right time to introduce soyabean oil in the market. The price
of the product was kept low since its launch which made customers less price
sensitive for buying this cooking oil. The demand of the product within couple
of years of its launch did not change considerably and was rising which made
demand inelastic in nature.
Estimating costs- Let us now see the 3C model for price setting for fortune
soyabean oil. A base price is set for the product. In the case of fortune refined
soyabean oil the base price was kept Rs 56. So the cost of the product set a
floor for the product. The orientation point is set in accordance with the
competitors in the market. The competitors then for fortune refined soyabean
oil were Saffola, Sundrop etc who had price slightly above fortune refined
soyabean oil i.e Rs 56-58. Customers now assess the unique features of the
product and in case of this oil, the health benefits that soyabean oil provides,
made it an unique product in the market. This establishes the price ceiling of
the product which was Rs 56 (currently it is Rs 110). This is how the cost of
the product was estimated.
Analyzing competitors costs, prices and offers- As mentioned above, while
estimating the cost of fortune refined soyabean oil, its competitors Saffola,
Sundrop etc were put into considerations and cost of the product irrespective
of its benefits of being a healthy and nutritious oil were kept low.
Selecting a pricing method- For fortune refined soyabean oil, the pricing
method was perceived-value method. Company delivered the value promised
by it to its customers by introducing an oil which is less oily, has health
benefits for example containing vitamin E and omega3 fatty acid. The oil
proved to be best suited for the people who have heart diseases. Another
marketing program by the company in form of advertisements was used which
focused on changing the mindset of tasty eating to healthy eating and enhance
perceived value in buyers mind.
Selecting the final price- Keeping in mind the competitors price and with
companys pricing policy, Adani-Wilmar set the final price of the product as
Rs 56 in the year 2003 (currently Rs 110). As the fortune introduced soyabean
oil as a new product, there was a risk factor whether people would buy the
product or not. But with the strong advertisement campaign, fortune was able
to reach majority of the audience by making them aware of the health benefits
of soyabean oil and the product is still a success in the market.
MARKETING COMMUNICATION MIX
There are eight major modes of the communication mix models which comprise of
advertising, sales promotion, public relations, publicity, events and experiences,
direct marketing, interactive marketing, word of mouth and sales force.
Advertising
For fortune refined soyabean oil
Objective of the launch of fortune refined soyabean oil was to create a better
oil. Soyabean oil by fortune was the first soyabean product for the people with
looking for health benefits in the oil and guilt free eating.
Target audience for the oil was people looking for oil with less cholesterol and
for the heart patients. It ranges for all age groups. Indian household were
primary target of the company.
The message was thoda aur chalega which meant that now people can enjoy
the guilt-free eating.
Media used by Adani-Wilmar for the product was television and print
advertisements. The television advertisements were focused on changing the
concept of clichd advertisements of edible oils by shifting concept from tasty
food to healthy food.
Television advertisements- The early advertisements of the product came with
the tagline of thoda aur chalega and by year 2009, the add campaign changed
to ab bus toot pado. But, the belief of joy of eating stayed intact with the
product. In 2011 the tagline changed to har maa ke dil mein where the
company used the concept of pathos and that it owns mothers heart.
The advertisements were shown at the time of Indian Premiere League (IPL)
for maximum visibility.
Personal selling
Personal selling does not apply to the product as it was being sold by the retailers
and not by the manufactures directly.
Sales promotion
Sales promotion is not applicable to my product because the oil pouches were sold
by the retailers only. But, schemes for example saving money on buying two
pouches and online discounts are given by the company on the product.
Public Relations
In June 2008, article came in Economic Times when Adani-Wilmar increased the
price of the product by Rs 10. There have been articles in the newspapers
describing the health benefits of soyabean oil in Times of India. This constitutes
the part of paid PR by company.
Advertisements
Cooking oil manufacturer
rolls out strategy to
increase sales
SATURDAY JULY 28 2012
email print
ADVERTISEMENT
By GITONGA MARETE gmarete@ke.nationmedia.com
Cooking oil manufacturer Pwani Oil Products Ltd is banking on economy

packs to grow sales and increase its market share.
The company is also counting on a packaging innovation to appeal to

customers with the new-look container of its flagship brand Fresh Fri.
A recent study carried out by Consumer Insight suggests that brand

differentiation and packaging enhancement rate highly with consumers when
making decisions, Pwani Oil chief executive officer Peter Beard said when the
company re-launched the product last Wednesday at the Nyali Cinemax.
Curvey shape
For a long time, we have been committed to enhancing the consumer

experience and improving the convenience of our products. The new Fresh Fri
jerrycan satisfies all consumer requirements, he said of the yellow plastic
container whose new curvey shape is inspired by the African woman.
The jerrycan also features a non-drip spout encased in the cap that can also be
used to measure the amount of oil intended for use. In case the oil drips as it is
poured, it automatically drains back into the can.
The company said the packaging had been informed by research they carried
out last year when they interviewed several consumers who said their biggest
complaint was oil spilt when poured into a frying pan that amounted to a loss
of about five per cent of the oil through spillage.
The company also introduced a 250-mililitre economy pack of oil that would
retail at Sh50, Sh40 less than its current smallest pack of 500ml, as well as 19
other new products.
We want all consumers regardless of their income to be able to enjoy our

products, said Mr Rajul Malde, a director.
With this re-launch, Pwani Oil has taken competition to the doorstep of other
major players in the edible oils market, Bidco Oil and Unilever, said a
marketer who attended the function.
With an eye on maintaining a foothold in the regional East African market, the
company said it would re-launch its products in Tanzania and plans to enter
the markets in Rwanda, Uganda and South Sudan next month.
Pwani Oil was founded in 1980 as a small coconut processor, moving on to

corn oil processing and later to palm oil processing in 1988.
Saturday, April 07, 2007
Idhayam oil : Banking on Health

Brand : Idhayam Oil
Company: Idhayam Group
Agency: Lekha
Brand Count : 219
Idhayam is a strong regional brand in the hugely diverse and unorganised edible oil market in India.
Indian edible oil market is huge with a consumption of 360,000 metric tonnes per year.
The market is wide and varied with regional preferences diverse across India. For example ,the
preferences goes something like this:
Ground Nut oil is preferred in the West, Coconut oil and Sesame oil is preferred in the South,Mustard
Oil in East and North, Soyabean oil in Central and North/West and sunflower oil in most parts of the
country ( source: superbrandsindia.org).
Idhayam is the biggest brand in the sesame oil (Gingelly oil) segment . The brand has a rich heritage
of over 60 years. The company came into existence in 1943 and over these years the brand has
grown to occupy a major share in the South Indian market. Idhayam sells over 13 lakh liters per
month .
Although in my house, traditionally we use coconut oil, Idhayam is a familiar brand because of the
intense promotion by the company. The brand is promoted heavily through tele
vision and magazines. The brand uses the famous South Indian Diva
Jyothika to endorse the brand.Although the ads are dubbed from Tamil in Malayalam , the heavy and
constant bombardment of ads never misses the audience.
What is more interesting is the message of the ad. Idhayam means Heart. The brand has its basic
values rooted in health platform. I think the brand had this even before the Sunflower brands took
over the health positioning.
Idhayam is positioned as an all purpose edible oil. The brand talks about low cholesterol content and
great taste.The ad also reminds you that the oil is best to apply on hair too. Health + Taste has been
the positioning of Idhayam for years now.
The company later entered the groundnut oil market with a brand :Mantra Groundnut oil.
The success of Idhayam lies in the ability of the company to built the brand. It had been a commodity
business but Idhayam added value and now rules this segment. The brand over time has now come
out with an innovative marketing strategy " Oil Pulling". This is an initiative of the company to pioneer
the concept of Oil therapy in the country. Oil Pulling is the method of rinsing the mouth with oil for
Twenty minutes by Swishing the oil between the teeth. According to the company reports, this
process effectively cures glaucoma and gum diseases. ( check out the website & doctor before trying
it).
Idhayam is a classic example of branding a commodity. The brand is now trying out new markets for
its Sesame Oil. Whether it will be successful or not, time will tell
Marico's Unique Paras
Strategy
By Samar Srivastava| Aug 7, 2013
Marico learns to juggle old and new businesses after acquiring Parass personal care brands
When Marico decided to try on a new hat, it also committed itself to a different, more vibrant, personality.
Juggling personas was never going to be easy but heres proof that the company known for its steadiness,
manifested in brands like Saffola and Parachute, is ready to step away from its long-standing staid avatar.
Consider this advertisement. Its narrative goes like this: Two young television jockeys are shown
complaining about the quality of participants at a talent hunt. Pata nahi kahaan se aa jaate hain. Unko
maloom nahi, yeh talent hunt hai, unki gaon ki nautanki nahi [Dont know where they land up from. They
dont know, this is a talent hunt, not a village nautanki], says one dismissively. On cue, the maligned
participant pulls out a can of Zatak deodorant; the cap flies across the room and lodges itself in the
jockeys mouth rendering him unable to speak while the participant sprays himself. Whos the cool one
now? the advertisement seems to ask. The jockeys are humbled and the underdog prevails.
The tone of this campaign is in-your-face, suggesting a departure from Maricos traditional approach
remember the Parachute hair oil commercials? Significantly, this is a sign of the leap of faith Marico is
taking as it digests the acquisition of Paras Pharmaceuticals personal care brands. It completed the Rs
760-crore purchase from Reckitt Benckiser (the UK consumer goods giant had earlier acquired those
brands from Paras) last July and has been on a learning curve since then.
Winds of change
Prompted by the sluggishness in its core businesses of hair oil and cooking oil, Marico had, a few years
ago, taken a strategic call to tap new categories. We wanted to enter categories that create tailwinds, says
Saugata Gupta, CEO, Marico. He means businesses that are poised to grow faster given that they cater to
the 250 million Indians under the age of 35.
Subsequently, in 2010, it launched breakfast cereals under the Saffola brand and has since garnered an
impressed 14 percent share in the category behind market leader Quaker Oats.
Personal care presented an opportunity with significantly better growth rates. In late 2011, when Reckitt
Benckiserwhich had bought the Set Wet hair gel, Zatak deodorant and Livon hair serum brands from
Parasput them up for sale, Marico was quick to enter the competitive bidding process. Simply put, if
we could not acquire this business, we would have had to build it, says Sameer Sathpathy, chief
marketing officer.
Marico has already notched impressive gains in these categories. Its success mantra: Learning to do
business in a new way for an audience that is more aspirational, even fickle.
Why personal care?

In 1962, when Harsh Mariwala joined the family business at Bombay Oil Industries, he had no clue that
there would come a time when he would have to look outside its staple hair oil business for growth. Still,
in the early 2000s, the company found itself in that position and ventured into the cooking oil business
with Saffola, a brand built on the promise of lower cholesterol. Sales soared as health-consciousness rose
in urban India. Between 2000 and 2010, the companys market capitalisation increased more than 10-fold,
from Rs 800 crore to Rs 13,000 crore.
But by the end of the decade, Marico found itself in the search for more options in areas that could be
considered businesses of the futurethat is, those that take advantage of Indias young demographic.
Breakfast cereals, as mentioned earlier, presented one such opportunity, while personal care emerged as
another. We needed a portfolio that was in line with future trends and left a lot of headroom for growth,
said Mariwala.
Personal care brands had been benefitting from the surge in personal grooming in India. They boasted
growth rates of 20-25 percent, far higher than the seven percent seen in Maricos core categories. This was
identified as an attractive category.
The choice was build versus buy. Setting up the business from scratch would have taken three to five years
and come at significant cost. A national advertising campaign would set the company back by Rs 25-30
crore. Add to that, the cost of strengthening distribution. Contrast this to an easier, stable entry that the
Paras brands would provide. It was a no-brainer.
But the acquisition had its own set of challenges.

Reckitt Benckiser had stopped investing in the
brands, given its disinterest in retaining them.
Consequently, they had lost market share as well as
recall. While Maricos primary task was to fuel
growth, the other big job was integrating a smaller
but more strategic business into the company.
Integration issues have been known to adversely
affect brands. It knew it would have to tread
carefully.
__PAGEBREAK__
Keeping it Separate
To begin with, Marico could not allow Paras brands
to be subsumed by the larger company. A well-
established consumer goods player, it had corporate
systems and processes in place. Further, these were
tailored to the hair and cooking oil categories,
boringly stable businesses as Gupta describes
them. The youth-oriented consumer businesses did
not have room for stodgy practices.
The solution: House the new team separately. Much
like Axe employees who are seated in an office
outside the Unilever headquarters in London,
Marico chose to keep the new group in New Delhi
away from its head office in Santa Cruz, Mumbai.
This physical distance allows the team to function
with the same agility as it did when it was under
Paras.
The personal care space is characterised by what

analysts call non-stop innovation. For instance, it
took Marico just six months to change the packaging
for Zatak deodorants.
The advertising, too, needed a fresh approach. The

older campaigns appealed to the youth in a
somewhat sedate manner. The newer ones have a
breezier feel, more relatable for an under-35
audience. This is a business characterised by high
advertising spends and this is the only way one can
stay ahead of the game, says Abhneesh Roy, an
analyst with Edelweiss.
No easy road
This is largely because this category is beset with competitive intensity. For example, if you had stepped
into Big Bazaar at Mumbais Phoenix Mills recently, you would have seen a counter stacked with
deodorants with discount signs on them. On an average, they were being sold at 25-30 percent less than the
sticker price. A fair number of those brands had been imported. Company representatives vied for
customer attention as they offered new fragrances for testing.
As such, the personal care category demands constant advertising support across print, radio and television
as well as social media marketing. Given the high margins the brands promised to deliver, Marico has
decided to spare no expenses and to good effect. The company declined to specify how much it spends on
advertising for the three brands. Under Reckitt Benckiser, Zatak and Set Wet had suffered due to a loss in
advertising support. Both these brands now have a combined 5 percent market share, a throwback to their
status in the Paras days. In the three quarters that Marico has worked with the brands, Zatak, Set Wet and
Livon have grown by 26, 25 and 21 percent, respectively.
The growth hasnt been painless. Distribution, for instance, has proved to be a challenge. With the old
business, the company had built its strengths in servicing kiraana stores and modern trade. It now has to
deal with cosmetics and chemist outlets as well.
Further, with consumers demanding regular replenishment of specific variants of a brand, the products
have to be sold in units as opposed to being sold in boxes like Parachute and Saffola are. This adds to the
complexity of managing the supply chain.
Then there is the demanding consumer base that not only wants deodorants and hair gels in different pack
sizes, but also needs fragrances to be frequently refreshed. One of the main challenges is to understand
what fragrances are working in the market and then producing them quickly, says Gupta.
Most importantly, housing a Rs 150-crore business, albeit a fast-growing one, is a costly affair.
Gupta is clear that it will take the company two more years to establish a winning position in the business.
For now, he says, they are focussed on ensuring their brands visibility in the market.
Investors, meanwhile, have adopted a wait-and-watch attitude.
At Rs 209 a share as of July 12, Maricos stock has barely moved in the last six months. This, however,
can be attributed to growth and margin pressures in its core oils business. Market watchers say this
stagnation does not reflect the long-term potential of the company. After all, the stock has gone up nearly
10 times in the last nine years. Further, they say the companys initial approach in the personal care
business shows Marico is on the right path towards building a long-term sustainable presence in this
category.
Running into its twenty-fifth year, Dhara, the edible oil brand, has renewed its positioning for the health
conscious consumer who has become increasingly demanding as far as food categories are concerned. The
brand, which for long, harped on the purity plank has moved to offering guilt-free healthy options in terms of
the different variants of oils in its portfolio. Earlier this year, Dhara Health Refined oil and Dhara Life Rice Bran
oil were rolled out to cater to this set of TG. In addition to these product extensions, the brand has recently
launched a new marketing and communication campaign after a hiatus of six years.
The Dhara Dhara, Shudh Dhara campaign was launched almost two decades ago. It helped the brand become
a household name and certainly was an unbeatable contribution in defining the value attached to the edible oil
brand. And after its first exclusive pitch for purity, which lured the little kid to run back home to gorge
onjalebis, Dhara has launched its new marketing campaign called India KaTadka. The campaign encourages
the use of an assorted variety of edible oils in every day cooking, as different oils give different benefits.
However, other brands in this segment, too, are playing the health card. But Amit Taneja, Senior Brand
Manager, Dhara feels that even though these might be emerging as clichs, health related concerns have become
standard jargons reiterated in majority of the households in the country. Though we Indians love fried food,
there is a growing awareness on health and fitness due to which people shy away from indulgence, adds
Taneja. The driving factor for the brand, however, still remains in maintaining relevance to consumers. And, this
is further supported by the primary objective of the brand, which has been to provide fair returns to the oilseed
farmers and provide quality edible oil to consumers at a fair price.
Though the campaign comes after a long halt, the brand has not been dormant as far as metamorphosis is
concerned in the last six years. In early 2009, details Taneja, the variants within Dhara underwent changes in
packaging and design with new logo and template. Laying significant emphasis on the need to implement
repackaging, he says that all packaging currently mentions a recommendation for consumption of more than one
type of oil as each offers a different set of benefits. Taneja believes that by prioritising active communication
through the packaging, Dhara has gone beyond just mentions about consuming oil in moderation.
This campaign also takes forth the symbiotic marvels that Dhara has managed with DDB Mudra in the past
especially with campaigns like, Jalebi and My Daddy Strongest. To implement a regional outreach, the TVC
also has Marathi, Bengali and Kannada edits, in addition to the one in Hindi. The brand is targeting women,
including homemakers as well as working women, above the age of 25 and cutting across through SEC A, B and
C.
Almost 15-20 per cent of brands total budget has been allocated to promote the campaign. And to support the
TVC, which was launched on 28th August 2012, OOH and BTL activations have also been slated. Taneja also
confirms that even though the brand is still evaluating its mandate in the digital arena, one should expect buzz
on social media in due time.
After consistent support from Mother Dairy Fruits and Vegetable (MDFVL), Dhara, which was commissioned
by the National Dairy Development Board (NDDB) in 1974, was merged with MDFVL in 2008. The pan India
brand, with 33 company depots, is sold through Mother Dairy booths, which are used for distribution in addition
to the regular channels. Outside Delhi, Dhara follows steady FMCG channels to reach the households of its
consumers.
The contention with this campaign is, however, that it is competing with its predecessors, which are set
incredibly high on the recall roll. And, while making efforts to stay relevant in the present times, is Dhara losing
out on the home ground that was responsible for strengthening the face of the brand, is a pertinent question to
ask.
Resurgence Of Saffola : A
Branding Strategy Niteen Bali,
IIM Calcutta
SEPTEMBER 23, 2016NITEEN BALI
IIM CALCUTTAMARICOMARKETING AND ADVERTISINGSAFFOLA
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MESSAGE AUTHOR
Saffola is a healthcare brand and a flagship brand in the edible oils

category for Marico. Its portfolio spans product categories edible
oils, functional foods,and salt. For the last 10 years, Saffola life has
been educating Indians on preventive heart care for quite a few
years. Since risk factors of Cardiovascular Diseases (CVD) start
early in India and prevention of these diseases requires an
integrated life course approach, Saffola has over the years built an
ecosystem which works actively towards adopting a healthier
lifestyle.
Saffola was launched during the 1960s much before India was bit
by the healthy bug. Saffola oils are free of TransFat. It
enjoyed premiumness due to its niche target and enjoyed a good
run until the market actually opened up opportunities for the
product category. At the turn of the century, Indians were more
concerned about health and heart diseases. This led to a flood of
healthy oils into the market and hence intense
competition. Saffola grappled with positioning issues and tried to
shrug off its older brand perception since the market had changed.
Its sales were stagnant. Previously, its typical customer was a mid
aged urban male suffering from heart ailments who had switched to
Saffola from regular oil due to recommendation from doctors.
Hence, Saffola was seen as a scary, therapeutic, medicinal
item. This came with negative perception about the taste. Most of
the times, the suffering member of the family was cooked food
separately with Saffola while the rest of the family used normal
oils.
After a brand audit, it was revealed that its personality was viewed
as detached and authoritative, devoid of any emotional attachment.
Nonetheless, Saffola had high brand recall.Hence, there was efforts
to position it more as optimistic, positive brand attributes such
as care, happiness, insurance. This was to target the segment
embarking on healthy living. The positioning was that of the
first step towards a healthy living.
Campaigns with old Hindi melodies like Abhi toh yeh jawan hai,
Kal se re and Babu samjho ishare coupled with interesting
creative concepts helped showcase the versatility of Saffola. It
engaged in various BTL activities such as tie ups with gym, Happy
Birthday Heart on World Heart Day, health clubs and laughter
Olympics.
Few Ad campaigns :
Chaar kadam agee

Saffola Oil
Saffola Gold
Saffola drove home the point that the least one could do to care about loved ones health is by using
healthy cooking oils Saffola in this case. And in the present cosmopolitan lifestyle, where there is
little time and energy to take care of health, Saffola oil was positioned as a perfect, easy solution for
healthy living.
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Case Details
Case Intro 1
Case Intro 2
Excerpts
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Case Details:
Saffola provides us with an ideal platform to capitalize on
the trend of increasing health consciousness by offering a
number of new food products that are able to cater to needs Case Code : MKTA005
in this area.
Case Length : 14 Pages
- Arvind Mediratta, Erstwhile Head-Marketing, Marico Period : 1990-2004

Industries Ltd.1
Pub Date : 2004
Introduction Teaching Note :Not Available
Organization : Marico Industries

Marico Industries, a well-known Indian Fast Moving
Consumer Goods (FMCG) company, offered unique and Industry : FMCG, Fast Moving Consumer Goods
ethnic Indian products. Marico was famous for its
'Parachute' and 'Saffola' brands. In a survey carried out by Countries : India
'Brand Equity' of The Economic Times in early 2003, for
India's 100 most trusted brands, Saffola ranked 75th and
Parachute ranked 29th. Marico's brands had shown To download Marico - Managing 'Saffola' case
resilience against competition and maintained their market
shares over the years. Marico had maintained a steady study (Case Code: MKTA005) click on the
sales and profit growth over the years with a consistent
button below, and select the case from the list of
Return On Capital Employed (ROCE) of over 30%.
available cases:
In a survey of
500 companies
conducted
by 'Businessworl
d' in 2003,
Marico ranked
Price:
16th in terms of
ROCE while it For delivery in electronic format: Rs. 300;
ranked fourth
For delivery through courier (within India): Rs.
among FMCG
companies. 300 + Rs. 25 for Shipping & Handling Charges
Marico's
products reached
around 100
million Indians Marketing Case Studies Collection
every month
Marketing Communications Short Case Studies
through 17 lakh
retail outlets, View Detailed Pricing Info
which were How To Order This Case
serviced by its
Business Case Studies
nation-wide
distribution
Case Studies by Area
network
comprising six Case Studies by Industry
regional offices, Case Studies by Company
32 Carrying and
Forwarding
Agents (CFAs)
and 3600
distributors and Search
stockists2.
Marico entered
two new lines of
business in the Custom Search
year 2002-03 -
Skin Care
services through
its 'Kaya Skin
Clinics', and
Ayurvedic Skin Please note:
Care Products
business in the
US by its This case study was compiled from published
acquisition of a sources, and is intended to be used as a basis for

controlling stake
class discussion. It is not intended to illustrate either
in 'Sundari LLC',
which owned the effective or ineffective handling of a management
Sundari line of
situation. Nor is it a primary information source.
skin care
products.
Background Note
Marico's origin went back to 1862, when Kanji Morarji, set Chat with us
up a small trading business for spices sourced from Kerala,
in Bombay. In the early 20th century, he inducted his cousin
Vallabhdas Vasanji into the business. Together they
exported pepper and ginger to Europe. The title of
'Mariwala' ('mari' meant pepper in Gujarati, an Indian
language) was attached to Vallabhdas Vasanji, owing to his
expertise in pepper trade.
Marico Industries, a well-known Indian
fast moving consumer goods (FMCG)
company, offers unique and ethnic
Indian products. The company has a
significant presence in the edible oil
market with two brands 'Saffola' and
'Sweekar'.
This case discusses Marico's brand

building efforts for Saffola, the
positioning adopted to target health
conscious consumers and the
company's continuous efforts in
maintaining the association between
Saffola and heart care. It also deals
with Marico's innovations in product
formulation (like the launch of blended
edible oils), product delivery and
pricing strategy.
Issues
Contents:
Page No.
Introduction 1
Background Note 2
Brand Building 3
Saffola Edible Oil 5
Saffola Salt 9
Looking Ahead 10
Exhibits 3
Keywords:
Indian fast moving consumer goods (FMCG), Marico Industries, Edible oils, Indian edible oil industry,
Saffola, Marketing, Brand management, Positioning, Communication, Packaging
Background Note Contd...

In 1948, Bombay Oil Industries Limited (BOIL)
was established, by the family with facilities
for coconut oil extraction, crushing and
refining of vegetable oils. BOIL set up four
manufacturing plants between 1947 and
1971- at Sewree for coconut oil extraction, at
Mazgaon for refining vegetable oils, a
chemical plant at Bhandup, all the three in
Bombay and a spice extraction plant near
Cochin, Kerala.
Vallabhdas had four sons Charandas,

Jayasinh, Hansraj and Kishore, all of whom
were engaged in the family business. The
eldest, Charandas was the Chairman and
Managing Director of BOIL while his younger
brothers were on the Boards of Directors of
BOIL and its subsidiaries.
In 1983, BOIL formed three divisions - the Consumer products division, Fatty acids and Chemicals
division and the Spice Extracts division. Harsh, the only son of Charandas, who joined the family
business in 1971, developed the Consumer Products business in BOIL and functioned as Executive
Director from 1980 to 1990.
In the 1980s, the next generation of Mariwalas entered the business. In April 1990, BOIL was
restructured from a single corporate entity into a multi-corporate entity. Accordingly, five companies
commenced business by taking over the various businesses of BOIL. (Exhibit: I). The Consumer
Products division was hived off as a separate company and the newborn entity was named Marico
Industries Limited (Marico).
Harsh took over as the Managing Director of Marico

in 1990. The major operating divisions of Marico
were Nature Care, which had products like coconut
oil, hair oils and fabric care, Health Care with edible
oils and processed foods and International Business
and Distribution, to take care of overseas business.
Marico made its Initial Public Offer in March 1996.
Marico had its own manufacturing facilities at Goa,

Kanjikode (Kerala), Jalgaon (Maharashtra), Saswad
(Maharashtra), Pondicherry and Daman. These
facilities were supported by sub-contracting units.
Marico also planned to set up a manufacturing
division for its hair care products in Uttaranchal, in
2004...
Excerpts
Brand Building
In April 2003, Marico reorganized its business

and brought Nature Care, Health Care and
the International Business Group under a
single division - Consumer Products.
This profit center comprised the operations of

Marico Industries and Marico Bangladesh Ltd.
(MBL), a 100% subsidiary of Marico.
It manufactured and marketed ten brands-

'Parachute', 'Saffola', 'Hair & Care', 'Shanti',
'Sweekar', 'Sil', 'Mealmaker', 'Oil Of Malabar',
'Mediker' and 'Revive'...
Saffola Edible Oil
Edible oils could broadly be categorized into vegetable refined oil, hydrogenated oil (vanaspati) and
bakery fats. The major edible oils produced and consumed in India were groundnut, sunflower,
safflower, soya, castor seed, cottonseed, mustard and sesame seed. While pure groundnut oil could
be directly consumed or refined to have higher purity, oils such as soya had to be refined to make
them edible grade. Groundnut oil was the most widely consumed oil in India. But groundnut was a
monsoon crop (Kharif), vulnerable to the vagaries of monsoon.
In 1986, the Government of India set up a

Technology Mission for Oil, to increase production of
oil seeds and oil and reduce dependence on imports.
Oil seed production witnessed a sharp increase from

around six million tonnes in the 1980s to around 22
million tonnes in the early 2000s.
The late 1980s marked a period of intensifying
competition in the refined edible oil category.
ITC - the Indian offspring of British American

Tobacco Company and National Dairy development
Board (NDDB) began extensive cultivation of oil
seed crops...
Saffola Salt
The five million tonne Indian salt industry was

mainly an unorganised business. Branded salt
accounted for only a fifth of the market valued
at Rs. 500 crore.
Launched in 1983, Tata Salt held the Number

One position in the country, with a 37% share
of the branded-salt market and an 18% share
of the total salt market. Tata Salt was
positioned as a pure salt with the tagline
'Desh ka namak'. The first competitive
challenge to Tata Salt came in the early
1990s with the launch of DCW Home
Products' Captain Cook...
Looking Ahead
Saffola had always focused on the heart. The brand's image had suffered a setback in the early
2000s with the ambulance commercial, which portrayed that one had to rush to the hospital if he did
not use Saffola. Later, Marico changed Saffola's positioning, focusing on the health of the entire family
with its 'Sehat se jeena hai' campaign.
Since the overall health positioning did not yield

results, Saffola was moved from the family health
positioning, once again to the original heart care
positioning in 2004. In February 2004, Marico
launched a fresh advertising campaign for Saffola,
after a gap of two years.
The campaign by Grey Worldwide had a new

tagline, Aaj se jeene ka andaaz sudhariye (Improve
your lifestyle today), urging every Indian to take up a
healthy lifestyle.
The TV Commercial focused on a little girl

approaching various groups of people to pass on the
message of heart care. The new campaign was
based on research done by SHHF.
Download Case Analysis on Saffola
Transcript
Case Analysis on THE SAFFOLA JOURNEY Submitted To: Dr. Dindayal Swain Submitted By:
Shiva Krishna Padhi
Date: 20THAugust 2012 DECLARATION I hereby declare that the Case Write Up on The Saffola
Journey , submitted to Dr. Dindayal Swain, is a record of an original work done by me based on
its case reading.
Shiva Krishna Padhi Index 1. 2. 3. 4. 5. Case Summary/Introduction Basic Issues SWOT
Analysis Strategies Reference
1. Introduction: This case critically analyzes the positioning journey traversed by Saffola, one of
India's leading cooking oils. For nearly half a century, Saffola was strongly associated with the
health of the human heart, with its visual language, communication strategy, and brand
positioning, all revolving around heart-related risks. With changing trends and market sentiments,
Saffola became painfully cognizant of its shrinking relevance as a brand, indicated by stagnating
sales, thus posing a unique conundrum: how should Saffola expand its user base to include non-
heart patients, while still being relevant to its current, loyal user base? In order to address this,
the marketing team at Saffola undertook two re-positioning exercises, one in 2001 and the other
in 2004. 1.1.history Harsh Mariwala, the Managing Director of Marico Ltd, had joined his family
business. The company was Bombay Oil Industries Ltd. In 1983, BOIL formed three divisions:
the Consumer Products Division, the Fatty Acids and chemicals Division, and the Spice Extracts
Division. Harsh Developed Consumer Products Division and functioned as Executive Director
from 1980 to 1990. In April 1990, Boil was resurrected; the Consumer Products division was
made into a separate entity named Marico Industries Limited. Harsh took over as the Managing
Director of Marico in 1990. Marico was transformed into high quality consumer Product
Company. The major operating divisions were Nature Care and Health Care. Marico pioneered
the introduction of branded products in the markets that were until then entirely commoditized in
India. Parachute and Saffola were Maricos flagship brands in the hair oil and edible oil
categories, respectively. Marico made its initial public offer in March 1996. Saffola launched as
edible oil in 1960s. After a couple of decades, Saffola had carved a niche for itself in the edible
oil category. Marico recognized that there is a huge potential for edible oil in India and initiated a
strategic focus to develop the Saffola brand. 1.2. Healthy decade Higher PuFA (poly
unsaturated fatty acid) used in marketing efforts. Consumers were mostly urban dwellers who
belongs to SEC A. Doctors recommendation to use this brand. Above the line promotions to
strengthen its position within the heart patient. Indirect methods to reinforce the brand as
therapeutic for the heart.
The twin-pronged strategy i.e heart patients were increasing in india and people were thinking
that they were taking some precautionary action. 1.3. new challenges to the new century
Sales had begun to stagnate Brand variants were Saffola and Saffola tasty. Increase intensity of
competition. Narrow segment of consumers i.e. heart patients. Premium price. 1.4. Consumer
study In 2001, Marico used a market research agency to find the root cause of stagnation of
sales and for brand repositioning. Quantitative research was done on eight families on in three
metropolitan areas. The objective of the study was to understand the customer and the
homemakers reaction to the brand, evaluate the brands marketing mix, assess competition and
develop cues to adjust the positioning and overall strategy. Cooking oils were mainly of two
types: Heavy and Light. In second type, Sundrop was competing brand and clear leader and
having high recall value and later Saffola almost near. The Key highlights were: Saffola
had higher recall values Perceived as light, refined and healthy cooking oil It is viewed as
problem-solution brand Customers were forced to spend more than they would have preferred.
Saffola Tasty had a low recall value. 1.5. repositioning for growth The objective of the ad
campaign hired by Marico Ltd was to reposition such that the franchise would be broadened
without losing the price premium. The agency decided to evaluate pros and cons of Saffolas
current brand image, and consider whether to leverage its existing strengths or reposition the
brand altogether. Saffola brand was studied using Kapferers brand prism framework. In this
prism a brand is evaluated on six dimensions: three internal (physique, personality, and culture)
and three external (customer self-image, relationship, and customer reflection). Through this
model, the team exposed to a clear articulation of what Saffola stood for.
Some elements were detaching the Saffolas long term goals. Physical facets such as heart
imagery, strong brand name benefited Saffola. The brands personality was viewed as detached
and authoritative, akin to customers likely referral source. The brand lack direct emotional
involvement with the customer. It had built a culture of fear around itself. Kapferers brand prism
Brand Saffola was studied under above framework. Through this model the team was exposed to
a clear articulation of what Saffola stood for including the positive and negative attributes. The
team felt to position itself as an optimistic, forward looking brand. Saffola should reposition itself
as a brand for healthy living, rather than just for a healthy heart, thereby including all the family
members. In the brand prism fear was replaced with care and happiness, therapeutic was
replaced with proactive, and heart was replaced with health. To communicate this new
positioning it launched Saffola Nutriblend. Saffola positioned itself as the choice for healthy living.
An ad was released with title Sehat Se Jeena Hai. The 30 second ad resulted in drastic shift
from the negative imagery that it had employed in the past. The commercial ended with a byline
SaffolaThe heart of a healthy family. In order to drive the new positioning platform, Saffola
engaged below-the-line marketing activities. Saffola used doctors to promote the brand. It made
a step further by initiating tie-ups with sports clubs, health clubs and gyms.
Saffola experienced 15% growth initially and the Saffola team was happy about the results. But
after the end of campaign the sales were again stagnated. Again analysis was done on the dip of
sales. It was found that most of the users were old users, and they were experimenting the new
variant. The repositioning had not worked. 1.6. Back to the drawing board Saffola hired a new ad
agency to analyze what had gone wrong. Two main sources were used to obtain the information.
Series of interviews were conducted with the customer base. This revealed that consumers still
believed it is specifically related with heart. About 35 to 40% of volumes were achieved through
doctor advice. About 85% of consumers were suffering with heart ailment (random sample of 20
users). The second source was a study conducted by the Saffola Healthy Heart Foundation. It
revealed that 1 out of 4 adults at a risk of heart problem. This clearly indicated that there is a
chance for improving sales by the Saffola. Saffola gained a strong market share and became a
brand of choice in its existing market segment. It had managed to establish the cognitive brand of
meaning as the best heart care oil. It had this segment in its pocket. It was trying to grab non-
heart related segment. It had decided to broaden its appeal to include whole new segment
mainly women or couples in the age group of 25 to 45 years and living in metros. Individuals of
this segment had basic health consciousness. Most individuals in this group were busy with their
packed lives. They even dont have time to take care of their health but they are worried. These
individuals know the need of healthier lives. But it didnt turned into action. Saffola decided to
include this hopefully healthful lifestyle segment into its ambit. It recognized that, to this group,
the idea of healthy living is so important, and a healthy heart was just the starting point. In order
to combine its core competence with this segment, agency arrived at first step to healthy start
positioning strategy. The aim was also to draw the users attention on how heart plays a crucial
role. The idea of this strategy is to place from wrong side of the heart to right side of the heart. It
decided to position this strategy through sub product Saffola Gold. Saffola Nutriblend was
discontinued. Agency believed that Saffola needed to shift from the culture of fear to culture of
trust. The customer self image was redefined as health-conscious but carefree. The ad agency
put together a brand new campaign for the Saffola marketing team titled Kal Se. The ad
portrayed a protagonist as constantly making a symbolic effort to become healthier, but
falling short on determination each time. Recognizing her husbands complacency, the lady
decides to take matters into her hands and switches over to Saffola Gold. The team decided to
above-the-line marketing, in addition to this it decided to employ a 360degree marketing
approach, with a strong below-the-line plan. It sponsored Laughter Olympics, Dial a Dietician
programs, TV shows such as Jassi Jaisi Koi Nahin, and Astitva. In order to rejuvenate its older
customer segments, Saffola extended its brand product line in rice, oats, salt, and atta under the
brand name Saffola Functional Foods. 2. Issues: Analyzing the dynamics of the brand's
image, identity. Positioning in tandem with changing consumer trends and market conditions.
Brands marketing mix. Would they be able to connect with their consumers in a relevant
manner? How far the 360-degree marketing plan helps Saffola brand? 3. Swot analysis:
STRENGTH Higher PuFA Higher recall value Most trusted brand in cooking oils.
WEAKNESS Prescription brand tag Fear factor Higher premium Taste indifference
Cannibalism No direct emotional connection with customers
OPPORTUNITY Compromise in premium Research and Development on the taste extracts.
Smart segmentation strategy i.e. psychographic segmentation and non demographic
segmentation. 360 degree marketing- it means bringing a brand into life, using all possible
contact points THREAT Sundrop competition Health Consciousness of the people.
People reception of the brand. Repetition of 2001 scenario. 3. Recommended strategy:
1. Process narrows down from broad opportunities to specific strategy. 2. Segmentation helps in
pin pointing the market. 3. Narrow down to a superior market marketing mix. 4. SWOT analysis
highlights advantages and disadvantages. What is narrowing down to target market:
What dimensions are use to segment market:
4. Reference: 1.
Home / Strategy / Feature / Missing a beat | DEC 03 , 2015
Feature
Missing A Beat
Shackled by its premium positioning, Saffola is straining to grow
Himanshu Kakkar
Our price premium versus the market average had increased a lot and secondly, we
hadnt given the consumers a new reason to buy the brand, says Anuradha
Aggarwal, chief marketing officer, Marico. That more or less summarises what has
been inhibiting volume growth of the countrys best known health edible oil brand.
Saffola means heart for most consumers thanks to almost two decades of
advertisement and positioning around the heart. The buyer looked no further, when
it came to buying healthy cooking oil during these decades. But during the past two
years, volume has declined and growth has clogged up for the premium oil market
leader.
Indian consumers dont realise that the olive oil that they use for Indian cooking is not the one to which heart
benefits are attached to Anuradha Aggarwal, chief marketing officer, Marico
Aggarwal doesnt yet accept that the brand is under pressure but instead says that growth has been
rather flattish. However, analysts are not so forgiving and say that Saffola has been under constant
stress during the past year. Except for Sundrop, it has always been at a premium. When you are at a
price premium, and the consumer is under pressure, it will reflect on the brand. Saffola is blended oil
and consumers are getting comparable options at a cheaper price, says Amnish Aggarwal, research
analyst, Prabhudas Lilladher. The 16% volume growth in FY11 tapered to 7% in FY13, and to 6% in
FY15.
Rice bran oil has been the villain feels Pankaj Sharma, head of equities, Equirus
Securities. Saffola fared well when the rice bran wasnt present in a major way. In its
first year, rice bran overtook Saffola in many markets as both are promoted on a
similar health platform but the price differential is significant, he says. Kamani Oils
Riso was the first rice bran oil and was later followed by biggies like Adani. Being
made from rice husk and not requiring any imports, the government has also
promoted rice bran oil.
Analysts also feel that Saffola has been inflexible on pricing. While the rest of the
industry operates on a 10-12% gross margin, Saffola has been making twice that. On
top of that, alternatives like palm and soya have fallen in the past two years, widening
the pricing differential vis--vis Saffola. Aggarwal downplays the threat from rice
bran. The edible oil market is a very large ocean and various brands will try to
garner share. Saffola has been around for a very long time and it has a very unique
equity and standing in the market, so we dont see the emergence as a threat.
That said Marico is actively following a multi-variant strategy by segmenting Saffola.
The three major variants are Total (at the upper end targeting people with heart
concerns), Gold, and Active at the bottom (positioned for proactive usage). In south
India, it has a mid-brand called Tasty, priced lower than the other three to compete
in the mid-price market. As an extreme measure, Marico was reported to be mulling
over a dual pricing strategy, i.e. different price for same product to perk up sales in
weaker markets. But it hasnt employed that strategy yet.
The strategy of doing different variants in different parts of the country has been
around for a while, but the very sharp benefits segmentation as well as differential
pricing, and the focus on Saffola Tasty in the south & Saffola Active in the rest are
recent. It is only this year that we have followed this strategy, says Aggarwal.
Upgrading to reality
Olive oil is another spoilsport that has slithered on to grocery shelves in a big way.
The irony is that Saffola created the premium health category and olive oil has
piggybacked on it. But Aggarwal rules out olive oil as a serious threat. Olive oil
category growth has started leveling out because there is resistance to high price.
Also, Indian consumers dont realise that the olive oil that they use for Indian
cooking is not the one to which heart benefits are attached to. Analysts too agree
that being sold at least 450 per litre, olive oil cant dent Saffolas customers. Saffola
Total, the most expensive sells at 180 per litre, says Prabhudas Lilladhers
Aggarwal. Though, it dismisses olive oil as a threat, Marico is doing everything to
guard its perch. Its recent advertisements claimed its oil to have better benefits than
olive oil. This was immediately challenged by olive oil exporters in courts. However
Aggarwal states, our claims are backed by clinical studies and scientific research.
Our price premium versus the market average had increased a lot and secondly, we hadnt given the consumers
a new reason to buy the brand Amnish Aggarwal, research analyst, Prabhudas Lilladher
The other leg of the companys strategy to guard two decades of hard work is extensions. Not
succeeding with Saffola low sodium Salt, Saffola atta for diabetics, Saffola rice, and Saffola zest salty
snacks from 2009-10, it hit a silver spot with oats. Company claims that it holds a value market share
of 21% in oats category, and 61% in oat as a snacks category, which it created (i.e. flavoured oats
category). We have broken away from the norm of positioning oats as a breakfast cereal. I think we
have been successful in selecting the right category and tweaking it to suit Indian tastes, says
Aggarwal.
Oats is still a narrow category with the company doing 80 crore-business but
companies are working hard to develop it. Sharma of Equirus Securities finds an
analogy from the biscuits world. McVities was the first to enter and start with
organised retail. Because they did not have a distribution reach, Britannia ate into
that market. Similar thing has happened here. Kelloggs and Quaker cant match
Maricos distribution muscle.
We think masala oats can be a growth driver and a big play for us, add Aggarwal.
That sounds promising but Saffola is dealing with a growth challenge. And Marico
needs to find a way out. As Aggarwal herself points out, it needs to make sure that
we are at relatively smaller premium versus the rest of market so that consumers can
upgrade to Saffola more easily and grow the franchise.
Analysts feel that with subdued growth in the oil category, Saffola hasnt been able to
upgrade consumers significantly (upgradation being a central plank of their
strategy). Going forward, if they dont climb down a little on pricing, the volume
stress could sustain. So, are Aggarwal and her company ready to experiment with a
new pricing strategy in the near future? I think we have a stable mechanism right
now. So I cant really tell you what experimentation well have to do but we have our
eyes and ears close to the ground and we will constantly keep a lookout for how our
current portfolio is doing and we will be flexible enough to make changes if
necessary, she says. That sounds like a yes and no and one has to wait to see whats
inside their heart.
The Cooking Oil Company Marketing
Essay
Published: 23rd March, 2015 Last Edited: 23rd March, 2015
This essay has been submitted by a student. This is not an example of the work written by our
professional essay writers.
INTRODUCTION ABOUT THE TOPIC

Cooking oil is purified fat of plant origin, which is usually liquid at room temperature (Saturated
oils such as coconut and palm are more solid at room temperature than other oils).
Some of the many different kinds of edible vegetable oils include: olive oil, palm oil, soybean oil,
canola oil, pumpkin seed oil, corn oil, sunflower oil, safflower oil, peanut oil, grape seed oil,
sesame oil, argan oil and rice bran oil. Many other kinds of vegetable oils are also used for
cooking.
The generic term "vegetable oil" when used to label a cooking oil product refers to a blend of a
variety of oils often based on palm, corn, soybean or sunflower oils.
Oil can be flavored by immersing aromatic food stuffs such as fresh herbs, peppers, garlic and so
forth in the oil for a period of time. However, care must be taken when storing flavored oils to
prevent the growth of Clostridium botulinum (the bacteria that produces toxins that can lead
tobotulism).
Product Origin: India

Description:
Pandey Groups Ltd. (PGL), a Rs. 2700 crore company; is a joint venture between two global
corporations.
Somya Refined Soyabean Oil is light, odorless and healthy oil. Most importantly it contains
OMG3 (Omega - 3 fatty acids) - an essential PUFA which needs to be supplemented from outside
sources. Soyabean oil is the preferred oil of many a household across the world.
Somya Refined Soyabean Oil, enriched with OMG3, gives you and your family 'Paanch Ka
Aashirwad
Company Name : Pandey Groups Limited
Address : Gujarat, India
Tel : 91- 9855021213 Fax : 91- 11-2201055
Website : http://www.pandeygroups.com
The IMC Plan

Situational Analysis:
Past promotional Situation
Somya Oil PLC is the holding company for a group of companies whose principal activities focus
on Eidable oil supply in India. On July 15, 2005, the Company acquired Sona Ediable Company
Limited and its subsidiaries. In October 2005, it disposed all interests in Making all types Of
Ediable Oil.
Product Situation (Quality,Packaging,Price,image,availability,Feature,Unique Selling point)
Somya Edible Oil Exports In Consumer Packs

Pandey groups Ltd, which is into trading and refining of edible oils, is now planning to supply
consumer packs of Somya' edible oil in india upto 2010.
At present, the company is supplying loose packs of edible oil to these countries and plans are
afoot to increase export capacity of loose packs of edible oil from 2,000 metric tonnes to 5,000
metric tonnes as well this year..
Pandey Groups is also planning to increase its capacity to produce Savarg' vanaspati from 100
metric tonnes to 300 metric tonnes.
After marking its presence with Somya refined oil in the northern, western and eastern markets,
Pandey Groups is now planning to strongly focus on the southern market, specifically Karnataka,
Andhra Pradesh and Tamil Nadu this year to widen its distribution reach.According to Pandey
Groups Ltd general manager (marketing and sales) Sahil Sharma: As part of the distribution
strategy, we are now planning to expand our number of offices from 65 to 80. In addition, we will
double the number of existing 1,800 distributors, three lakh retail outlets and 600 super stockists
within a year. In the southern market, we have recently created 10 stockpoints (company's own
branches) to spur more volumes of Fortune edible oil. Besides, Pandey Groups is planning to
foray into the speciality fat oil category which will be introduced in the Indian market in
consumer packs under the umbrella brand name Somya this year.
Audience Situation
Paneer, pakoras and more
1.
One of the ads, titled Railway station, is about an elderly couple making a train journey. The
husband realises that his wife hasn't prepared the customary pakoras' for the journey this time.
Forgetting the he was supposed to arrange for a taxi, he busies himself in preparing the pakoras
when his wife offers to make them. The couple miss the train due to the delay, but share a
mischievous moment on the platform when they gorge on the pakoras.
2.
The second commercial is about a young man who lives away from home with a group of friends.
He steps home after his day at work and reaches for some stale pizza; his sister calls him just
then, asking what he is having for dinner. He cooks up a story, telling her he's having muttar
paneer' - just so that she doesn't feel bad about his eating habits away from home.
His sister then reprimands him on why he didn't leave his dirty shoes out at the door, to which he
turns around to see that his sister has actually brought him some home cooked food.
A third film is on its way. Apart from the commercials, the campaign consists of a mix of press,
hoardings and bus shelters. Radio is specifically to be used in Tamil Nadu.
Of the total budget, Fortune has allotted about 15 per cent to outdoor, while 10 per cent and 5 per
cent will go to press and radio respectively. A huge 70 per cent of the budget is directed to TV
and electronic media. National and regional channels are being employed.
Competitive Situation
Pandey Groups is the leader in edible oil. But it now wants to carve out a bigger slice of the pie
by focusing on sunflower oil, which accounts for a big chunk of the edible oil market, through its
Somya brand.
Competitive Analysis
In competitive analysis I found that there is great competition in the existing players like Saffola
oil, Sunflower oil, Fortune oil, Ginni Oil, King's oil, and Raag oils. I have do something different
to survive in this competition like:
A strong Heart
The Healthy Growth of your Children
Controlling Diabetes
Healthy Eyes
Marketing segmentation:
Somya has segmented its market on the basis of following:
Demographic
Income
Occupation
Geographic
Tier 1 cities
Tier 2 cities
Psychographic
Life style
Personality
Behavioural
Value
Benefit Sought
So, this is a market segmentation of the Somya Oils that we give more importance to tier 1 cities
that are metro cities. And we prefer the high level people and middle level people because this
level of people are health conscious.
Targeting
Somya oil has targeted its market on the basis of the product that they are offering to the
consumer.
We are targeting:
Upper class segment

Upper end
We are targeting to those consumer who are more concern of life style product.
Our product is ore of upper mid class and premium segment, so we are targeting audience
are those consumer,, who want Healthy Product which gives them fitness at reasonable
price
We are also targeting those consumers, who are more concern of safety and health issue.
We are now going to shift over to mind mid or lower mid class segment and want to mass
market their product.
SWOT Analysis
Strength
Demand of new technology.
Manufacturing unit having good supply of raw material and Transportation System.
Gujarat.
Wide range of product to tap the consumer of middle class, upper class and high class.
We think to launch our widest distribution network.
Shifting to rural marketing.
Weakness
Our product are compared with our competitor like Fortune, Saffola etc.
Similar product categories as compare to its close competitors like king's and Raag.
Opportunity
Shifting to rural market.
Food oil market is growing very fast, so there is an opportunity for Somya to launch more
new products.
Threat
Price war.
New entry in this segment.
Positioning Strategy
With the tagline Paanch Ka Aashirwad Somya positioning is to differentiate our
product on the basis of technology which appealed to the consumer on the basis of health
benefits.
With this tag line its corporate philosophy to make to attract towards our product.
Our positioning strategy are technological intelligent and futuristic.
As we are in upper and premium segment, so we are featuring that their brand is young,
vibrant and premium.
We have differentiate our product using technology and health benefits.
Competitive Analysis
Market Share
The market share and data show that Somya is not in the list because it is a new company
in the electronic field.
The target audiences for the other companies are very high as compare to Somya
Product categories are more or less same.
Close fight for the product is in the companies.
Marketing Strategy
The marketing objective of Somya, aims to focus on the premium segment of the market
that fetches greater margin opposed to volumes.
We want to capture 20% market share, by the end of 2011.
We want 5% sales growth in each segment of our product.
Corporate Strategy
Somya corporate strategies is to more focus on innovation to attract more technology
savvy consumer and the company is aspiring for - keep innovating.
Somya corporate strategy is to become a true global leader through fast growth and fast
innovation.
Somya has set its mid-term goal to rank among the top edible oil Company in the world.
Somya would concentrate on staying ahead of the technology curve and develop products
that deliver high value to consumers.
The Marketing Background
S. Key
Questions
No. Considerations
1. Product Descriptions Cooking oil
There are some global players in market like Fortune,
2. Market Assessment
Saffola, Ginni, Sunflower.
3. Source of Business We are coming from tiers 1 cities and tier 2 cities and rural
areas.
4. Competitive Evaluation Somya offers freshness and technological strong
Focus on Health innovation to attract consumers and the
5. Marketing Objective
company is aspiring for keep innovating.
Marketing Communication helps Somya to create a strong
Marketing
6. and positive brand attitude and influence consumer to do
Communication
action in future.
The Key Target Audience Worksheet

Our sale and usage comes from metros urban and rural market.
The marketing objectives required continue usage.
Refers to Segmenting, Targeting and positioning analysis.
Decision makers are the head of the family.
Communication Objective
To communicate the health plus objectives.
To communicate that the brand is young, vibrant and premium.
To hit the emotions of the Indian consumers by showing the warmth and affection.
Brand Attitude Strategy:-

Cooking Oil (Food) product is high involvement product, and consumers require information
before purchasing the product. So, to influence the attitude of the consumers, Somya oil need to
focus on the communication message, this is helpful to create a positive brand attitude.
The communication objective of Somya Oil is to influence the target audience to do purchases.
The Behaviour Sequence Model

Decision Stages
Consideration at each Need
Information search Purchase usage
stage Arousal
Decision roles Category Purchase Benefit of the
Product awareness
involved need Facilitator product
How is it likely to Brand
Product information ---------- ------------
occur awareness
Competitive product
Timing of purchase ---------- Offer discount -----------
information
Where purchase is Company outlets,
------------ ----------- -----------
likely to occur MBO'S
Budget
As a team, Somya oil decided that we should go ahead and plan out the entire IMC campaign
exactly how we wanted it to turn out, before we worried about any of the budget. This is referred
to as a bottom-up budget, which means that we, the creative team have decided what we would
need for the budget and have sent the budget for approval.
Media Mix
For the media mix of our product's campaign we decided to do one television ad and one
magazine ad. Because our product is an Cooking Oil we felt it would be more appropriate to
reach our target audience through these means of advertising.
Our television advertisement will be in the form of a thirty-second commercial. Showing the
commercial at the prime time would help reach our ideal target audience. Our budget will allow
about 2,50,000 for the pre-production, production, and post-production of our commercial
advertisement. In order to buy advertising space, we allotted 150,000 per thirty-second spot. To
achieve our communication objective, the commercial will air twice during each thirty-minute
program on Sunday evenings for the duration of one month.
The magazine advertisement we have chosen for our project will not be costing us nearly as
much. Each of these magazines is a monthly publication. This helps reach our target audience
because our customers must be housewives.
Cost of TV Ad
Prime Time: 6-11pm
Channels: Top e.g., Geo, AAJ, PTV, Sony, Star Plus, Zee Tv etc.
Cost in Prime Time: Rs. 70,000/min
Cost in Off-peak time: Rs. 25,000-30,000/min
Cost of Billboard
Size: 2700 Sq. ft
Skin: Rs. 54,000
Rent for 1 month in Cat-A1 area: 600,000-1,000,000
Cost of Hanging Hoardings

Size: 5ft x 2 ft
Cost: Rs. 150/hoarding
Rent in Cat-A1: 1,350/week
Cost of Poster
Paper weight: 135 gram
Size: 18inch x 23inch
Quantity: 3000 @ Rs. 4.15/poster

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What will the Marico of tomorrow look like?
Marico, the maker of Parachute and Saffola oils, is counting on new launches, and on larger
platforms of nourishment and male styling for future growth
Subscribe to our newsletter.
Sapna Agarwal
Marico MD and CEO Saugata Gupta says the company would look at potential Rs100 crore
opportunities and introduce variants of existing brands. Photo: Abhijit Bhatlekar/Mint
Mumbai: Two years ago, Marico Ltds chairman Harsh Mariwala distanced himself from
day-to-day operations of the packaged consumer goods maker he founded in 1990, leaving it
in the hands of professional managers.
Now 65, Mariwala can afford to take a break and focus on strategic investments. Marico is
virtually on autopilot mode to becoming a Rs10,000 crore emerging markets multinational by
2020.
The maker of Parachute and Saffola oils ended fiscal year 2016 with a profit of Rs725 crore
on revenue of Rs6,132 crore. The company already has a presence in 25 countries in Africa
and Asia, accounting for 22% of its overall revenue.
For future growth, Marico is counting on new launches within its core categories of hair oil
and premium edible oils as well as beyond them on the larger platforms of nourishment and
male styling in Asia and Africa.
The diversification will be guided by its traits of dominating in niche areas and remaining
consistent. Among packaged consumer goods companies, Marico has delivered the most
consistent organic growth of 17% in sales and 19% in earning per share in 2001-2015,
according to a February report by analysts Rakshit Ranjan and Ritesh Vaidya of Ambit
Capital Pvt. Ltd.
Maricos diversification will be guided by its traits of

dominating in niche areas and remaining consistent
The company has built a really solid business over the years and now has solid brand
platforms, said Rama Bijapurkar, a management and market research consultant. The
question now is that the platform has a lot of spring and where will you spring and change
your pace or growth trajectory.
For Marico, not getting disrupted and reliance on innovations seem to be guiding its next
leap. So while Mariwala says we want to be market leaders in whatever we do, and has
identified opportunities to move from hair oil to pre- and post-hair washes, skincare and hair
fall solutions, and male grooming, the company could also look at acquiring an online brand
or even entering into so-called nutraceuticals (food with health benefits) as people get more
health-conscious.
Disruption threats
The broad spectrum of where we are is tailwindpeople want to look good, stay young and
be healthy, explained Saugata Gupta, managing director and chief executive officer at
Marico. The focus is now on hair nourishment, skin and healthy foods.
So for instance, Saffola now stands for much more than just a cooking oil, it is a tailwind
categorywellness and its next big driver for growth is in-between meals, or healthy
snacking.
"The company has built a really solid business over the
years and now has solid brand platforms. The question now
is that the platform has a lot of spring and where will you
spring and change your pace or growth trajectory"- Rama
Bijapurkar, management and market research consultant
The company has already gained a leadership position in the savory oats category, with
Saffola Oats crossing the Rs100 crore mark in FY16. Likewise, in hairthere are solutions
for damaged hair, hair fall and the entire continuum of nourishmentserums and hair oils.
In todays world you can get disruptedso how do you innovate and not leave any gaps or
segments, said Gupta.
The reference is to firms like yoga guru Baba Ramdevs Patanjali Ayurved Ltd, which has
grown rapidly in a short span of time and taken on companies like Colgate-Palmolive India
Ltd and Dabur India Ltd as it made inroads into the oral care segment and natural/Ayurveda
segments, ending FY16 with revenue of Rs5,000 crore. Patanjali is also in the hair oil market,
where Marico needs to protect its turf.
The Marico of today gets over a fifth of its revenue from international operations and
employs people of nine nationalities, with 39% of its workforce being non-Indian. With its
headquarters in the swanky new business district of Bandra Kurla Complex in Mumbai,
Marico has come a long way from Masjid Bunder, the heart of Mumbais commodity market
where Parachute and Saffola were born.
Its dependence on the two brands has fallen from 100% in 1990 to about 40-45% of its
revenue now. In the next few years it will drop further to about 30% of its overall revenue,
said Mariwala, who is keen on catching the shifts in changing consumer habits and also at the
same time expanding Maricos core franchise.
Maricos dependence on Parachute and Saffola has fallen from 100% in 1990 to about 40-45% of its
revenue now; in the next few years it will drop further to about 30% of its overall revenue, says
founder chairman Harsh Mariwala. Photo: Pradeep Gaur/Mint
Managing polarity
In todays uncertain world there is this concept of polaritythat is, you have to manage the
short term with long term. Manage speed with excellence. Maintain the governance and still
remain agile and entrepreneurial, he said, and added: That is a challenge. A lot of
companies are struggling as they havent been able to manage the polarity.
It wasnt easy for Marico as well. The firm consolidated its position in India as the largest
coconut hair oil brand following the acquisition of Nihar from Indias largest consumer goods
company Hindustan Lever Ltd (now Hindustan Unilever Ltd) in 2006.
Maricos international business was about 10% of its overall revenue in FY05 and by FY13 it
went up to 22% largely through acquisitions (see Focus on organic growth).
Click here for enlarge
In India, it entered the male grooming market and the personal care categories of serums and
skin creams with the acquisition of the personal care brands of Paras Pharmaceuticals Ltd
from British consumer goods firm Reckitt Benckiser Group Plc in 2012 and also its own
launches like Parachute Advansed body lotion.
Even as the acquisitions helped the company expand its revenue at a faster pace of 21%
between FY05 and FY13, return on capital employed (ROCE) fell from about 50% in FY08
to 24% in FY13.
ALSO READ | Marico buys Paras personal care biz from Reckitt Benckiser
Marico also cut its dividend payout from 52% in FY05 to 21% in FY13 to conserve capital,
says author Saurabh Mukherjea in his book The Unusual Billionaires. This triggered a change
of guard to bring the focus back on ROCE.
Doing few, doing well
One of the changes we have done in the past three-four years is that we have said that we
dont want acquisitions to be a substitute for organic growth. We are saying please do the
organic growth, acquisition is a top-up, said Gupta.
Another change is to focus on doing a few things and doing them well. So in 2011, Marico
divested Sweekar, an edible oil brand; in 2013, the company exited from the rice segment
which it had launched under brand name Saffola Arise in 2010.
Marico also restructured its operations. In 2013, it demerged its loss-making beauty and
wellness chain Kaya into a separate company called Kaya Ltd. It merged its international and
domestic operations and put Gupta in the drivers seat.
"In todays world people feel that innovation is only done

by start-ups. But here you have an organization whose
business strategy is driven by the values of the founder"- B.S.
Nagesh, independent director on the Marico board
Kaya is a complex business because it is a combination of three different businessesretail,

hospitality, medical business, said Mariwala.
Kayas India business performance has not been up to the mark while its international
business is doing much better, according to Mariwala. There is a need to fix the India
business, he said.
It is this trait of not pulling back, of allowing for time to achieve success that differentiates an
entrepreneur from an investor.
In todays world people feel that innovation is only done by start-ups. But here you have an
organization whose business strategy is driven by the values of the founder. So even though
there is a professional management at the helm, the culture of innovation and the belief that
you cant win unless you try remains, said B.S. Nagesh, an independent director on the
Marico board since 2010.
Nagesh is founder of TRRAINTrust for Retailers and Retail Associates of Indiaand also
the non-executive vice-chairman of Shoppers Stop Ltd.
New opportunities, variants
As it scales up, Marico is now also placing smaller bets outside of the company on other
entrepreneurs. The strategic investment in beauty salon firm Bellezimo Professionale
Products Pvt. Ltd, a joint venture in which it picked up a 45% stake last year, is one such bet.
We are looking at more such spaces: it could be anything from nutraceuticals, to digital
brand and analytics firm, said Gupta, adding that the company would look at potential
Rs100 crore opportunities and introduce variants of existing brands on the lines of Parachute
Advansed body lotion and Saffola Oats.
"In todays uncertain world, there is this concept of

polaritythat is, you have to manage the short term with
long term. Manage speed with excellence. Maintain the
governance and still remain agile and entrepreneurial...
That is the challenge"- Saugata Gupta, MD and CEO, Marico Ltd
The company cant afford to pause. The initial entrepreneurship that it has shown has now
been restrained, said Abraham Koshy, a professor of marketing at Indian Institute of
Management, Ahmedabad, explaining that Maricos initial aggression has now shifted to
pursuing an incremental growth whereas there is far greater scope to redefine the market, like
Patanjali has shown. They should take inspiration from that, said Koshy.
The last two years have been challenging for Indias consumer packaged goods industry as
two years of drought took their toll on rural spending. Urban spending was not able to pick up
the slack, causing the sectors growth to slow.
For now we have to move to 10% volume growth, currently we are hovering at 7-8%, said
Gupta.
Focus on volumes
The managements incentive structure is tied to long-term growth drivers and the company
always invests behind the brands in protecting and/or expanding their market share, he said.
About 95% of products in Maricos portfolio are No. 1 or No. 2 in their categories, according
to its annual report for FY16.
Volume growth is an important measure for the consumer packaged goods industry; low
penetration gives companies plenty of room to generate sales by selling more units to existing
and new consumers.
Also, the outlook for inflation is 3-4%, lower than the historical 6%. We have now entered
an era where perhaps the inflation will be lower, said Gupta.
If Marico wants to grow 15-20% a year, it will have to work

harder to expand its sales volumes given that value growth
led by inflation is likely to be lower
If Marico wants to grow 15-20% a year, it will have to work harder to expand its sales
volumes given that value growth led by inflation is likely to be lower.
To be sure, low food inflation is good for the sector as food competes with consumer
packaged goods in the overall consumption basket. High food inflation dents consumer
spending on packaged goods. The consumption cycle is yet to turn the corner, although
companies are hoping ample monsoon rains and pay hikes to government employees will
change that. Moreover, low inflation helps consumer goods companies lower input costs.
Stepping on the gas
All the same the packaged consumer goods sectors performance has been mixed over the
past three years. Revenues of 12 listed entities including Marico, Hindustan Unilever, Godrej
Consumer Products Ltd, Emami Ltd and Dabur India grew at a slow 8.34% compound annual
growth rate (CAGR); the sectors operating profit margin expanded 270 basis points to
23.79% at end-March 2016 from 21.09% at end-March 2013 aided by lower input costs.
One basis point is one-hundredth of a percentage point.
Likewise Maricos CAGR for revenues for the same period was higher at 10.09%. However
operating profit margin expansion was lower than its peers at 18.3%.
This is also reflected in its stock performance. Marico has fared better than its peers. Among
the shares of consumer goods companies, Marico outperformed the industry leader. While
shares of Hindustan Unilever gained 19.02% to Rs926.60 on Friday from a 52-week low of
Rs766.40, Maricos shares gained 56.21% to Rs295.70 from a 52-week low of Rs189.30.
We want to be market leaders in whatever we do, says Maricos founder chairman Harsh Mariwala
in an interview. Photo: Aniruddha Chowdhury/Mint
Peers Godrej Consumer Products shares gained 50.59% to Rs1,684.85 from a 52-week low
of Rs1,118.80 and Dabur India shares gained 26.59% to Rs292.80 from a 52-week low of
Rs231.30.
Still, Marico needs to step on the gas to boost growth. Domestic growth will be led both by
the core brands of Parachute and Saffola as well as new brands to deliver 10% volume
growth.
ALSO READ | We want to be leaders in whatever we do: Maricos Harsh Mariwala
For the next 9-10 years, Parachute can give us a 5-7% volume growth. Saffola can grow at
10-12% for the next five-seven years and the rest of the business has to grow at 15% for the
business to deliver 10% growth, said Gupta.
Ambit Capital estimates that Maricos consolidated sales will expand at a CAGR of 16%
from FY16 to FY20. This will be driven by domestic operations growing at a CAGR of 17%
and international business at 15%.
For Marico, its time to get back on the treadmill.

India: Strategies for consumer goods
October 08, 2009 Bain Brief
By Ashish Singh, Mike Booker and Sandeep Barasia
Heads didn't turn when Coca-Cola and Pepsi hiked prices on some of their most popular beverages in
India in late 2008. Even in the downturn, both companies have enjoyed double-digit volume growth.
And despite projections that the world's second-fastest-growing economy will watch its 9 percent
growth rate (for 2005-2008) slow to 5.5-6 percent in 2009, India's makers of fast-moving consumer
goods (FMCG) such as beverages, biscuits and beauty aids historically have been somewhat
insulated from economic slowdowns. Indeed, the FMCG sector in India registered 10 percent sales
growth for the quarter ending June 2009. But that doesn't mean FMCG companies in India-both
multinational and domestic-can afford to be overconfident. The fact is, now is the time for them to
keep their eyes on the ball.
How is the slowdown in the Indian economy affecting consumer-goods companies in India? For one
thing, it is forcing them to focus on traditional retail channels like small mom-and-pop stores. It's no
secret that India's modern-trade retailers are aggressively closing stores or curbing expansion plans.
For example, Subhiksha, once the poster child for India's fledgling modern retail industry, shut down
nearly all of its 1,600 stores this year in response to a crippling cash crisis. The 12-year-old retail
chain says it is left today with just 50 employees on its rolls, compared with the 5,000 it had in
September. As modern trade slows its expansion, it will be traditional retail and distribution networks-
lower tech, lower cost and smaller than their modern counterparts-that will become more important to
consumer-products companies. This is especially true in rural areas, where consumer spending has
remained particularly strong. In 2008, rural and semi-urban markets contributed almost 80 percent to
FMCG growth.
RELATED INSIGHTS
Of note: Winning with consumers in emerging markets
INDUSTRY EXPERTISE
Consumer Products
Another distinct trend: Demand for high-end products is dropping. Indian consumers are still buying;
it's just that they're avoiding the most expensive brands. That's why companies will need to become
more sensitive to price by offering price reductions on existing products and introducing innovative
new products at low price points for mainstream consumers. Hindustan Unilever realized in November
2008 that consumers are not seeing value in its Red Label 1-kilogram tea carton pack and moved to a
pouch format, passing on a significant reduction in packaging costs to consumers.
An opportunity to build and innovate

FMCG companies in India can use these trends to their advantage-and as a foundation for overtaking
their competitors in the recession. Downturns provide opportunities to reorder industries; to come out
ahead of the pack requires using recessionary trends to build and innovate. But it's important to have
a clear and comprehensive strategy. For example, passing along cost reductions in anticipation of
weakening demand may be little more than stopgap measures unless it's part of a broader plan.
FMCG companies in India are winning by systematically targeting four key areas to spur growth.
Customers: Focusing on only the right products

Mainstream consumers in India are still buying, but their needs are changing. So winning consumer-
products companies are delivering innovative products aimed at addressing those changes.
Consumers tend to eat out less frequently during economic slowdowns. McDonald's is trying to
counter that by introducing a wider range of value meals and increasing what it spends to advertise its
low-price menus. Domino's introduced a pizza priced at 30 rupees (64) for the Indian market, a first
of its kind. Meanwhile, because consumers are showing a preference for snacks in smaller units,
Nestl introduced Kit Kat Minis in India, a product it sells elsewhere.
But in the race to introduce new products to serve changing consumer needs, it's important to be
selective. Each new product a company launches has the potential to increase its operating
complexity. Those added costs could reverse any revenue gains. Just as recessions are a good time
to introduce new products for a changing consumer, it's also a time to reduce complexity by pruning
unprofitable product lines or to reconsider the need for high-end products at a time when shoppers
want better value.
The downturn is also an opportunity to spur growth from core customers in big traditional product
segments. Consumer-products company Marico is trying to get consumers to use its Parachute brand
of hair oil more frequently by promoting the traditional habit of oil massage, hoping to gain from
category expansion. There are lessons here for other traditional product sectors like toothpaste,
soaps and shampoos, which have witnessed modest volume growth in the past.
Costs: Selling at a price consumers can afford

Shoppers are clamoring for prices they can afford, and with dropping commodity prices, many
companies are passing along cost reductions. That's what Hindustan Unilever did with Lifebuoy, its
leading soap brand, which is particularly popular in rural India. In January 2009 the company reduced
the price from 13 rupees (28) to 12 rupees (26) on 90-gram bars. Even a 1-rupee price cut can be
significant in a country with a per capita income of $710. Meanwhile, companies such as Godrej
Consumer Products and Nestl India are taking other steps that will allow them to reduce prices
aggressively while making sure margins aren't eroded-moves such as improving supply chains by
shifting suppliers, ensuring they're not caught with excess inventory as consumer demand fluctuates,
and looking for ways to reduce operating costs.
For purveyors of premium products, costs become even more critical-India's consumers just aren't
willing to pay high prices. There are three routes for companies hoping to avoid overpriced goods:
acquire a less expensive brand, price products more carefully and launch new value-focused brand
extensions, such as different package sizes. Dove shampoo in India successfully introduced a 3-
rupee (6) sachet in 2007 that now accounts for more than 30 percent of the brand's hair-care sales.
The sachet was launched before the downturn, as part of a strategy to reach lower-end consumers.
Channels: Shifting to traditional stores

In urban India, consumer-products companies are realizing the importance of traditional trade.
Hindustan Unilever, Marico and Dabur all have programs that give mom-and-pop stores in India's
cities the same type of discounts on branded goods that are commonly provided to modern retailers.
In exchange, the consumer-goods companies get point-of-sale visibility and dominant display-the goal
is to tap the large loyal customer base that's typical of big-city mom-and-pop outlets.
Winning companies are doubling down on traditional trade in rural areas, too. Right now consumer
demand for fast-moving consumer goods is holding up well in rural India-and the regions represent a
major opportunity. For example, more than 40 percent of all purchases of biscuits, a household staple
in India, take place outside of urban areas, according to Bain & Company research. Success in rural
areas starts by establishing the right product mix for local stores, adapting promotion, and ensuring a
tight focus on route-to-market management. That's why Clinic Plus, Hindustan Unilever's leading
shampoo brand, is aggressively targeting its half-a-rupee sachet to rural consumers through
extensive trade promotions.
Competition: Investing ahead of the pack

Staying in front means investing for the future-ahead of the competition. Consider the moves by
Marico. Building on its core business of healthy foods, Marico has expanded its Saffola cooking oil
brand to include extensions such as Saffola foods for diabetics and Saffola Zest baked snacks. While
the Indian company began the brand-extension strategy before the downturn, it hasn't let the
economic turbulence curtail its efforts. The moves also help detract newcomers from establishing
strong positions in the downturn.
For consumer-products companies in India, moving up in the downturn means focusing on selling
only the right products, becoming more strategic about pricing, following consumers to where they
shop and investing ahead of the competition to strengthen a core market segment or help make the
most of a new one.
Ashish Singh is the managing director of Bain & Company, India, and Mike Booker leads Bain's Asia-
Pacific Consumer Products and Retail practices. Sandeep Barasia is a partner in the India office and
a member of the Retail and Consumer Products practices.
Copyright 2009 Bain & Company, Inc. All rights reserved.
Content: Editorial team
Layout: Global Design
Saffola study, a marketing ploy?
Vibha Varshney
@vibhavarshney
|
Monday 30 November -0001
Saffolalifes online survey on risk of cardiovascular diseases could help Marico which
positions its Saffola oil brands as healthy for heart
Saffolalifes online survey on risk of cardiovascular diseases could help Marico which
positions its Saffola oil brands as healthy for heart
For decades now, experts have said that Indians are at high risk of contracting
cardiovascular diseases. On September 27, Saffolalife added another bit of information
to the existing literature. An analysis of data generated by an online survey by Saffolalife
suggests that every age group in India is at risk of contracting cardiovascular diseases
(CVDs). The risk was quantified at 73 per cent in urban India.
But the findings are not something we did not know about earlier. So why did Saffolalife
conduct the study? And then go ahead and put a disclaimer to the study: Saffolalife
makes no representation or warranty of any kind, express or implied, about the
completeness, accuracy, reliability of information generated by the survey. Saffolalife is
an initiative of Marico Limited, a consumer product company.
The Saffolalife 2013 study does not make any suggestions as to what people should do
to protect their heart. Could the study then be a ploy to sell Saffola brand of vegetable
oils which are marketed as safe for the heart?
The survey has been carried out in nine cities in the countryAhmedabad, Bengaluru,
Chandigarh, Chennai, Delhi and NCR, Hyderabad, Kolkata, Mumbai and Pune. Over a
period of three years (2010 -2013), a total 186,332 participants took part in the online
survey. These people could calculate the age of their heart by feeding in data on their
diet, physical activity, history of the disease in the family, blood pressure and blood
chemistry. As an incentive, Saffolalife even provided free cholesterol and blood pressure
check-ups to the participants.
Health facts
The survey revealed that in all the age groups studied, the age of heart calculated using
the survey was more than the actual age of the person. For the age group 55-59, this
gap is as much as 11 years. Once this was established, Saffolalife went ahead to look
at the different risk factors such as BMI, cholesterol levels, low HDL, high systolic blood
pressure, taking medication for blood pressure, smoking and diabetes. The company
found that low level of HDL in blood was the biggest factor for risk of CVD. This
amounted to as much as 87 per cent of the risk. This was followed by high BMI, which
contributes 73 per cent of the risk.
This finding is pretty convenient for Saffola which positions its oils to be healthy for
heart. On its website (accessed on 29/9/13), it says that the brand, New Saffola is rich in
MUFA or mono unsaturated fatty acid which is considered to be a healthy component of
oil (by as much as 60 per cent) and has cholesterol-reducing potential. It is a mix of
safflower and rice bran oil as is Saffola Gold. Another company product, Saffola Active,
is made of rice bran oil and soybean oil. The site says that soybean oil is a good source
of omega-3 which helps in lowering cardiovascular risk factors alongwith providing
several other health benefits.
True, soybean and rice bran oil are pretty rich in omega 3. But omega 3 alone is no
indicator of goodness. It is the ratio of omega 6 and omega 3 which is important. The
value between 5 and 10 is considered healthy. A study carried out by Delhi NGO Centre
for Science and Environment (CSE) had analysed different components of vegetable
oils which showed that for both rice bran and soybean, this ratio is below five at 3.98
and 3.59 respectively.
Similarly mixing safflower oil with rice bran also does not make it rich in MUFA as
claimed by the company. Safflower has just 11.44 per cent MUFA. At 36.58, rice bran oil
was better but had less MUFA than olive, mustard, groundnut and sesame oil. In fact, a
blend of safflower and rice bran that CSE had tested had the omega 6/omega 3 ratio of
117.3 and, incidentally, the brand that CSE tested was a Marico product (Saffola Gold).
CSE findings had suggested that it is better to use a combination of oils as no single oil
has all the benefits. But yes, Indians are at risk of heart diseases. The Indian Heart
Watch study released recently assessed different lifestyle and biological CVD risk
factors across the country. Seventy-nine per cent of men and 83 per cent of women
were found to be physically inactive. A high 51 per cent men and 48 per cent women
were found to consume high fat diets. Fruit and vegetable intake was low in 60 per cent
men and 57 per cent women. So yes, we are at risk and need lifestyle changes. But the
changes obviously should be increasing physical activity, reducing fats in diets and
increase intake of fruits and vegetables.
Being Customer Oriented Isn't the Best
Marketing Strategy
Focus on the Competition and Then Do Something Different
By Al Ries, Published on May 9, 2016, 05.30 PM IST
Focus on the Competition and Then Do Something Different
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What wins in marketing today? The conventional wisdom is "customer centricity."
As one pundit put it, "Connect with customers based on their behavior or where
they are in their purchase or life cycle."
Who can argue with that? I can.
In 2009, we started working in China with Great Wall Motor. At the time, the
company made trucks, sedans, minivans and SUVs and marketed them under nine
brand names: Coolbear, Deer, Florid, Haval, Lingao, Peri, Sailing, Socool and
Wingle.
So what did we recommend? We recommended that the company focus on Haval,
its SUV brand.
Why SUVs? The company's research showed that Chinese customers preferred
sedans because they were more prestigious.
On the other hand, Chinese customers thought SUVs were practical vehicles with
no social status.
So we figured the other 28 Chinese automobile companies would focus on sedans
because they were customer oriented and that's what Chinese customers wanted.
And that's exactly what they did, leaving the SUV field open for Great Wall to
dominate.
As a result of being competitor oriented (and not customer oriented) Great Wall
became the largest, most-profitable Chinese automobile company.
What do customers want?
If you ask customers what they want, they often say, I'm happy with the brands I
buy, but I'd really like something better and cheaper.
That's why companies spend billions of research & development dollars on Plan B.
Developing "better" products and services.
Then they spend many additional dollars advertising their better products and
services. But what do customers think when they see an advertising message for a
better product?
Unless the brand is the market leader, they don't believe the advertising. How can
this be? If the brand were actually better, it would be the market leader.
Doesn't the better brand win in the marketplace?
Ironically, that's what management also believes: the better product wins in the
marketplace. Hence the emphasis on research & development.
Yet year after year, the same brands continue to maintain their leadership. Heinz in
ketchup. French's in mustard. Hellmann's in mayonnaise. Land O'Lakes in butter.
Campbell's in condensed soup. Morton in salt. Domino in sugar. Swans Down in
cake flour. Coca-Cola in cola. The list is endless.
So many companies move on to Plan C. Selling their better products and services
at a "cheaper" price.
But if a brand is cheaper than its competitors, customers think it can't be as good.
Starbucks didn't become successful by selling cheaper coffee.
Heinz and Hunt's
What do customers think when they see a small bottle of Heinz ketchup selling for
$1.89 and the same size bottle of Hunt's ketchup selling for $1.49?
Hunt's can't be as good as Heinz.
Some consumers, of course, buy Hunt's to save money . . . even though they
consider the brand to be inferior to Heinz. So the lower price produces sales but
makes it impossible for the brand to ever dominate the category.
If better and cheaper doesn't work, then what does work?
Be different
"Think different" was the Apple slogan years ago, and the same idea can work
today. After the success of Red Bull, hundreds of energy drinks were launched in
the American market. (In the four years between 2005 to 2008, there were 956
brands of energy drinks launched.)
Weren't some of those 956 energy-drink brands better and cheaper than Red Bull?
And didn't some of those brands have the backing of a major beverage company?
(Coca-Cola introduced three energy-drink brands: KMX, Tab energy drink and
Full Throttle.)
So which brand became a strong No. 2 to Red Bull? The better energy drink or the
one that was different?
The one that was different. Monster, virtually the only energy-drink brand that was
launched in a 16-oz. can, became a strong No.2 brand with 37% market share.
Full Throttle, the Coca-Cola brand, has a 1% market share.
Marketing is like warfare
In marketing, you compete with competitors for customers. In warfare, you
compete with enemies for territory.
Focusing on customers in marketing is like focusing on territory in warfare. If your
enemy knows your territorial objective in advance, it greatly simplifies its
defensive strategy.
On June 22, 1941, Adolf Hitler launched the German invasion of the Soviet Union.
The objective: Moscow in the north.
Six months and millions of casualties later, the German offensive was halted short
of its objective.
So Hitler changed his strategy and launch a second major offensive on July 17,
1942. The new objective: Stalingrad in the south.
History repeated itself. Six months and millions of casualties later, the German
offensive was halted short of its objective.
What should Hitler have done? He should have launched his attack in the middle
of the country so his ultimate objective was in doubt.
The line of least expectation
That's what B.H. Liddell Hart, the greatest military thinker of the 20th century,
called this strategy and many powerful brands have followed this approach.
How many customers wanted more expensive coffee before Starbucks was
launched? Very few.
How many customers wanted Greek yogurt before Chobani was launched? Very
few.
How many customers wanted a "touchscreen" smartphone before the iPhone was
launched? Very few.
When your brand takes the line of least expectation, you can be pretty sure no
other brand will be doing the same thing. And that's what builds powerful brands.

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