At a time when there is so much happening in the fast-moving consumer goods (FMCG) space be it fast changing consumer behaviour or disruption caused by Patanjali products, it has become very challenging for marketers to stay abreast with their consumers in such an environment.
Marico Ltd, the maker of iconic brands like Parachute hair oil and Saffola, is focusing on male grooming segment and premiumisation of products for further growth.
The company is taking on the disruptor Patanjali with affordable and high quality products in rural markets. At the same time, it's trying to be ahead of the e-commerce curve by investing in new age brands such as Beardo.
BestMediaInfo.com caught up with Marico’s Chief Marketing Officer Anuradha Aggarwal to talk about the strategy that company has charted out for its range of brands, the drivers of growth in different categories and marketing strategies around them.
Male grooming has become an exciting segment. How big an opportunity is it for Marico?
Set Wet, a leading product from our stable, is the market leader in hair gels. We would like to play in many more categories. We have some play in deodorants. We have recently launched a new innovation in Andhra, which is pocket deodorant, and we believe that this is going to be the next big thing in male grooming because of its affordability. When we launched Rs 10 pack of Set Wet hair gel, the penetration of the brand increased in a big way and it continues to grow. We have a large range of innovations coming up, including making gels hold harder, beard range. So, innovation is going to be the way to grow in this category. We are segmenting the male grooming into two kinds of products – Set Wet and Parachute Men. Under Parachute Men, we have hair cream and hair oil for men.
What does it take to win over millennials and how well prepared are you to cater to their increasing online purchase habits?
We recently invested in the brand called Beardo, which is primarily e-commerce business. Marico is committed to making sure we stay ahead of the e-commerce curve. We set up our e-commerce team inside our sales system.
The millennials are the most talked about generation for two reasons. One is the fact that they talk a lot about themselves on social media and the world realises that they are different. The other fact is that we are becoming a society that focuses on people a lot more. But I’m a believer in the basic principles and absolute simplicity in marketing. I believe that segmented targeting and positioning and if the millennial is a different consumer set, you will make your campaigns that target them better. They need different marketing and that we have been doing for a long time.
How are you dealing with the disruption called Patanjali?
Patanjali is a lesson for all marketers and business people that disruption can happen anytime anywhere and you have to constantly be thinking of how you can be disrupted and prevented. I think we all are dealing with Patanjali the way we would deal with any competition. It is just that this might be slightly different competition. Finally, they will also face the same set of challenges that all brands do, which is to stay relevant to the people, consistency in quality and right propositions. We just need to make sure that our products are at the top of the mind of consumers and we continue to deliver the best quality.
When it comes to edible oil segment, how challenging is to increase Saffola’s market share vis-à-vis many established brands and continuous innovation in oil products?
Edible oil is a very large category and Saffola has a very high market share at the premium end of this category but it is still a very small player in the large market. In the premium end, our market share is 66 per cent but this is only a small percentage of the top end. So, the growth of the category is dependent upon whether we can premiumise the edible oil category, which we have done increasingly over the period of time. We have been able to tell people to use Saffola because it is good for your heart and they pay more than the average prices. Also because it has a very high affinity, people think that using Saffola is feeling and being healthy.
When we talk about RoI, it relates to increase in sales, which is not the case with most of the emotional campaigns. Still, we see a flurry of emotional ads these days from FMCG brands. Do you think FMCG brands should stick to functional ads that help sell more?
Making a consumer buy something is a very complex mechanism, especially in categories and brands that you have been buying for a very long time. To change someone’s point of view, you can do two things – you can talk benefit or you can make a place in their heart and mind. When you already know what the brand does functionally, then you need to form an affinity with the brand. You have to do both. Our relationship with the agency is of a complete partnership. We develop the idea, strategy as well as coherent long-term plan together and if you do that then there is no way that your agency will do something which is not in your strategy.
Is there any plan to strengthen your hair care products portfolios to tap the shampoo market?
That’s a future looking question but I think we would look any opportunity that we can get to expand our portfolio. We have some very exciting work happening at Livon right now which is our play outside the hair oils. It is one of our brands, which is digital first. A lot of the activity on Livon is in the pipeline, including college activations targeting youth.
Mass market products such as hair oil category have huge growth opportunity in rural markets. How are you tapping that segment?
Rural is a very large part of our growth strategy and we are making sure we have the bottom of pyramid offerings for the consumers everywhere. We have recently launched hair oil sachets in the East to try and see whether we can get to consumers through the price point of Re 1. We launched the Rs 10 bottle of Parachute Jasmine, which is an offering slightly premium brand at a slightly lower cost in rural markets. Our largest rural penetration is by Nihar Shanti Amla, which is in the Hindi belt and the largest selling pack is the Rs 10 one. In rural markets, pricing is critical and we are making sure we can maintain it. We target the needs of the markets with different brands in different parts of the country. We have Parachute Advance that operates in the South while Nihar Shanti Amla operates in the Hindi-speaking belt. We have Nihar perfumed coconut oil in the East.
Premiumisation is a growing trend among FMCG companies. Is it attracting your mass consumer?
The categories in which we operate in are very mass consumption categories. We have very high levels of penetration and we are talking about every household and consumer using categories such as hair oils. When you have this level of penetration and consumption, the organisations have to figure out that how they intend to grow. Premiumisation is really a means of growth. In India, everyone is aspiring to be better, earn more, use better products and get more benefits. When you give the consumers more benefits in the same product form, it becomes premiumisation. It’s almost like saying that if you have a hair oil that gives you great luscious hair through nourishment, it becomes the base hair oil. But if I give you hair oil that solves your problem because it has different kinds of ingredients and is Ayurvedic, you are ready to pay more money for it. Premiumisation is something that is happening across FMCG because it is the consumer demand. What we are seeing now is called mass premiumisation. Therefore, a mass category product like hair oil is getting premiumised and offering better brands to consumers.
Our journey began with some existing as well as new brands. About five years ago, we launched Parachute Ayurvedic hair oil, which solves the hair fall problem, in the South. The product is priced at 2X in comparison to the available hair oil products in the market. With this product, we have got 30 per cent market share in the South. In the North, we have recently re-launched one of our old brands called ‘Hair & Care. It is again priced at the 2X price of the market. But we have put a formulation called fruit oils, which is great for moisturising hair. With this product, we are targeting young consumers. We are doing premiumisation both at the benefit and imagery level.
Consumers generally tend to pick up oil that costs less or has a discount. How would you convince them about premiumisation?
That’s why branding is very important because when people buy the cheapest oil, they buy a brand. You have to differentiate using technology and that’s why we say that Saffola edible oil brand has 25 per cent lesser absorption than other oils and our highest end product ‘Saffola Total’ reduces cholesterol, which other brands cannot do. Which is why we tell our consumers that why would you trade a little bit of money for your health. And it is a small amount of money that can keep them healthy by using only Saffola oil while cooking.
You believe the marketing head's role goes beyond planning marketing campaigns. Do you think big companies like Marico, HUL, P&G, Johnson & Johnson give that freedom for the management executives to cross over their mandates?
For Marico, going beyond boundaries is a value. It means that if you are asking for help from other functions then it also means that you should be able to act like an organisation builder and have the organisation in mind and not just your function. That belief system will ensure that we act like business owners. We are an entrepreneurial opportunity seeking company that will do what it takes to make sure that we can meet that opportunity. Another big example of collaborations is our merit teams that are cross-functional teams and they work collectively without boundaries. It is fundamentally about the fact that how we make the business and any new product succeed.