Marketing Management

Marketing Strategy of Marico Limited

1st Year – Semester II

MFM – Div B

MET Institute of Management

Submitted By:

Names Roll. no.

Samir Agnihotri 62

Sagar Kubal 83

Kunal Madnani 84

Sanjay Malkar 86

Swapnil Mathure 88

Mahesh Desai 118

Under the Guidance of

Mr. D.V. Saptarshi

Mumbai Educational Trust’s

INSTITUTE OF MANAGEMENT

INDEX

Sr. No.

Particulars

1 Introduction2 Edible Oil Brands (Sweekar & Saffola)

a. Product Informationb. Distribution Strategyc. Current Promotional Strategyd. Pricing Policye. Competitors Informationf. Management future Strategy

3 International Business Group (IBG)

a. Evolution & Overseas Products informationb. Strategy adopted for International Businessc. Future Marketing Strategy

4 Bibliography

Acknowledgements

We would sincerely like to thank Prof. D.V. Saptarshi for his

valuable guidance without which the project would never

have been accomplished.

Introduction

Marico is a leading Indian Group in Consumer Product and Services in the

Global Beauty and Wellness space. Marico’s Products and Services in Hair

Care, Skin Care and Healthy Foods generated a Turnover of about Rs.24.0

billion. Marico’s brands and their extensions occupy leadership positions

with significant market shares in most categories. Coconut Oil, Hair Oils,

Post-Wash Hair Care, Anti-lice Treatment, Premium Refined Edible Oils,

Niche Fabric Care etc. Marico is present in the Skin Care Solutions

segment through Kaya Skin Clinics.

Product positioning of Brands within Marico is given below:

(Product Positioning Strategy: Marketing decisions and actions

intended to create a particular place for a product in the market and in the

minds of consumers)

Marico’s major Marketing Strategies are Right Product Mix (Product),

Proper Pricing Strategies (Pricing), Right Promotion Offer(Promotion) and

Efficient Distribution Channel (Place) that is 4P`s of marketing.

Marico’s branded products are also present in Bangladesh, other SAARC

countries, the Middle East, South Africa, Malaysia and Egypt. The Overseas

Sales franchise of Marico’s Consumer Products (whether as exports from

India or as local operations in a foreign country) is one of the largest

amongst Indian Companies.

Marketing Mix (4P’s of marketing)

Marketing decisions generally fall into the following 4 controllable

categories;

Product

Price

Place (Distribution)

Promotion

Marico Brand

Hair Oil CategoryHair Oil Category

Hair Care Category

Hair Care Category

Edible Oil Category

Other Products

Other Products

Saffola Oil

Sweekar Oil

The term "Marketing Mix" was first used in 1953 when Neil Borden, in his

American Marketing Association presidential address, took the recipe idea

one step further and coined the term "marketing-mix". A prominent

marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960, which

has seen wide use. The four Ps concept is explained in most marketing

textbooks and classes.

Elements of the marketing mix are often referred to as 'the four Ps':

Product - A tangible object or an intangible service that is mass

produced or manufactured on a large scale with a specific volume of

units. Intangible products are service based like the tourism

industry & the hotel industry or codes-based products like cellphone

load and credits. Typical examples of a mass produced tangible

object are the motor car and the disposable razor. A less obvious

but ubiquitous mass produced service is a computer operating

system. Packaging also needs to be taken into consideration.

Price – The price is the amount a customer pays for the product. It

is determined by a number of factors including market share,

competition, material costs, product identity and the customer's

perceived value of the product. The business may increase or

decrease the price of product if other stores have the same product.

Place – Place represents the location where a product can be

purchased. It is often referred to as the distribution channel. It can

include any physical store as well as virtual stores on the Internet.

Promotion represents all of the communications that a marketer

may use in the marketplace. Promotion has four distinct elements:

advertising, public relations, word of mouth and point of sale. A

certain amount of crossover occurs when promotion uses the four

principal elements together, which is common in film promotion.

Advertising covers any communication that is paid for, from cinema

commercials, radio and Internet adverts through print media and

billboards. Public relations are where the communication is not

directly paid for and includes press releases, sponsorship deals,

exhibitions, conferences, seminars or trade fairs and events. Word

of mouth is any apparently informal communication about the

product by ordinary individuals, satisfied customers or people

specifically engaged to create word of mouth momentum. Sales

staff often plays an important role in word of mouth and Public

Relations.

Broadly defined, optimizing the marketing mix is the primary responsibility

of marketing. By offering the product with the right combination of the

four Ps marketers can improve their results and marketing effectiveness.

Iconic brands

Sweekar

Sweekar is a national brand comprising of Refined Sunflower Oil. Sweekar

has become synonymous with good quality light edible oil. It is positioned

as a light and healthy cooking medium.

The Sunflower category emerged in 1988 - 89 and Sweekar quickly

became one of the leading brands in this category. The positioning of

Sweekar has evolved over time- from the initial stand of lightness and

88% saturated, fat-free - to that of "Achcha Khana, hansi khushi ka

Khazana" - to that of "Aapke haath mumkin har baat". It continues to be

one of the leading brands among refined oils in the consumer packs

market.

About Product: Sweekar Low Absorb Oil

In its quest to provide higher value to its consumers, Marico launched

Sweekar Low Absorb Oil - India 's first low absorb oil, during the third

quarter of 2001-02. Food cooked in this absorbs less oil providing the

consumers the twin benefits of health and economy. University

Department of Chemical Technology (UDCT), an institute of international

repute has verified the claim.

Place (Distribution)

Sweekar Oil made of sunflower is manufactured at Jalgaon Plant &

launched in 1993. Some of the distributor will get stock directly through

Jalgaon factory instead of from depot. This is a good strategy adopted by

Marico to save cost in terms of transportation as well as distributor will get

stock early.

Current Strategy (Promotion)

One Important Marketing Strategy for Sweekar is that they are giving

heavy discount on these brands to capture more and more market.

Discounting pattern is very good & they are giving around 30 to 40%

discount on all the products & they are targeting middle & lower middle

class consumers. To beat the competition and to survive in the present

market, company is promoting consumer offers (e.g. 20% extra on 1 ltr

pack or Rs 20/- OFF on 5 Ltr Jar)

Pricing

The product is priced at an economical rate of Rs. 89 / litre since there is

immense competition in sunflower oil segment.

Core Competitor of Sweekar

Adani wilmar Fortune “Fortune hai light thoda aur chalega”

Product: Fortune (sunflower, kachi gain) & Raag

It target Different brands for different customer types

E.g. Vitamin E fortified sunflower oil to target health conscious customers.

It set up its oil refinery at Mundra & Mumbai. Decreased logistics and

transportation costs. Decreased time to market the edible oil. The above

factors helped shave off a rupee from the selling price of a litre of oil.

Conducted health check up programs to promote its brand.

Competitor strategy

Provided a mix of all elements like product differentiation (A marketing

process that showcases the differences between products. Differentiation

looks to make a product more attractive by contrasting its unique qualities

with other competing products. Successful product differentiation creates

a competitive advantage for the seller, as customers view these products

as unique or superior.), backward integration, and entered markets at the

right time.

Management Strategy

Looking at the position of the Sweekar brand in the market, the product

has already crossed the maturity level & is facing cutthroat competition

from other brands. Marico Industries is realigning its edible oil business &

will not invest in the Sweekar brand because the segment at which the

brand is positioned is very competitive.

As part of its strategy, the company will focus on its premium Saffola

refined edible oil brand and will not invest in building its other brand

Sweekar.

Marico's reasoning behind keeping Sweekar "on float" stems from the fact

that the brand delivers low margins and is a drag on its overall margins.

Marico is thus focusing on obtaining certain minimum margin from

Sweekar and, if required, it will sacrifice volume growth for that reason.

Saffola “Sehat se jeena hai”

Saffola, positioned on the 'good for Heart' platform was small in volume

terms, till 1993, when a series of hard-hitting ads took the brand to new

heights. Awarded the 'Brand of the Year' in 1993, again in 2005 by The

Advertising Club of Bombay and the recent one, Media Abby Gold for the

World Heart Day Radio entry – “Radio goes silent” at the AAAI – GoaFest

2009. The brand has continuously modernized and upgraded itself. A new

aesthetically defined shape was launched in 1998 ensuring glug-free

pouring. The brand was repositioned as 'Heart of a Healthy Family' and

extended to value added edible oil.

About Product: There are various brands within Saffola which are

categorized on the basis of Price sensitivity & purchasing power of

consumers & they are as follows;

Safflower (Kardi) Oil:

New Saffola, a blend consisting of Safflower (Kardi) Oil (60%) & Rice Bran Oil (40%) contains Vitamin E. Vitamin E is a well-known and potent antioxidant.

This has the highest levels of Linoleic acid, an omega-6-polyunsaturated fatty acid, which is well known for reducing cholesterol levels.

Saffola Gold

Saffola Gold has the unique composition of 80% Rice bran Oil and 20%

Safflower Oil.

Heart healthy nutrients in RBO such as tocopherols, tocotrienols and

oryzanol are known for their cholesterol lowering ability. Studies have

shown that, a right combination of Safflower Oil and Rice Bran Oil is more

effective in reducing cholesterol, than each of the oils singly.

Saffola Tasty

Saffola Tasty was the first Saffola blend. This oil blend provides the

benefits of two oils, thereby giving added value to the consumer. It

provides the high PUFA from Safflower (Kardi) oil and the taste of Corn oil.

Corn Oil has a unique taste and aroma.

Saffola Active

Saffola Active is made with Rice Bran Oil and Soyabean oil. Saffola Active

also contains Vitamin E.

Two important compounds known for promoting heart health. This comes

to you without any odour. To get these benefits Saffola Active is made

with Rice Bran Oil and Soyabean oil. Saffola Active also contains Vitamin E.

Saffola Active provides Omega 3 and Oryzanol, two important compounds

known for promoting heart health. This comes to you without any odour.

To get these benefits Saffola Active is made with Rice Bran Oil and

Soyabean oil. Saffola Active also contains Vitamin E. Alpha linolenic acid is

an essential fatty acid required for the proper functioning of body systems.

It's an Omega 3 fatty acid, which is required for the brain's development

and other important body functions.

Omega 3 fatty acids are also associated with anti thrombotic and anti

inflammatory responses in the body. They play an important role in

promoting a healthy cardio vascular system. Unfortunately few oils in

nature provide Omega 3 fatty acids and many have a pungent

objectionable odour.

Rice Bran Oil (RBO): Heart healthy nutrients in RBO such as tocopherols,

tocotrienols and oryzanol are known for their cholesterol lowering ability.

Soyabean Oil: A good source of Omega-3, which helps in lowering

cardiovascular risk factors along with several other health benefits.

Place (Distribution)

The product is distributed from Himachal Pradesh & Jalgaon. These

products are sold to distributors who in turn distributes them to the

registered Marico Retailers.

Promotion

A Web site on health, www.Saffolalife.com was launched in 2002 -

A guide for heartcarers as well as proactive health seekers on various

aspects of dietary health. Provides a free personalized diet plan service,

which anyone can use to get a diet as per his or her individual health

requirements.

Saffola also introduced Dial A Dietician service in 2004

With its team of highly qualified dieticians this service provides everyone

free and personalized diet advice and tips on maintaining a regular health

regime., by simply dialing the number 1800 22 2929 from anywhere in the

country.

Saffola had always focused on the heart. The brand’s image had suffered a

setback in early 2000s with the ambulance commercial which portrayed

that one had to rush to the hospital if he did not consume Saffola.

The key to Saffola's growth has been its impactful advertising and the

innovative marketing techniques, helping consumers experience a full

health care service, not just a product. The 'Saffola Healthy Heart

Foundation' was set up to provide a whole lot of additional services to

enable consumers to take the required steps to improve their lives. There

was a certain misconception in the minds of people who took heart attack

as first symptom of ill-heart health. Saffola in its endeavor has used

several platforms to highlight the risk factors concerning heart care that if

not taken cared off could worsen to an heart attack. The new Dil Ko

Rakhiye Jawaan campaign brings to light the risk factors like Obesity,

stress, hypertension etc prevalent in our daily life that could act as trigger

points.

Every year on World Heart Day, Saffola conducts several events that

highlight the preventive steps that can be taken for healthy heart. Also all

round the year various on ground events like Health runs and Health

check up camps have been organized for the same.

Price

Pricing of various Saffola brands is done on basis of product content &

depending on customer capacity across India. The cost structures of

various brands are as follows;

Saffola (Kardi) Oil – Rs 145 / litre.

Saffola Gold – Rs. 112 / litre

Saffola Tasty – Rs. 96 / litre

Saffola Active – Rs. 89 / litre

Competitor for Marico

Agro tech food Sundrop

Access to outside market (no information asymmetry)

It used the health platform but was associated with heart patients and less

taste. But sundrop promised health without compromising taste. Sundrop

name chosen to cue category and purity. Finding the middle ground

between tasty oils and healthy oils Young, modern premium feel.

Message of health was related to maintenance of good health, was

applicable to all members of family, and was characterized by lively

energetic people. Within 6 months Sundrop became largest selling refined

sunflower oil. Redefined the category and expanded the sunflower oil

segment 2 to 26 % in 6 months holds 15 % of branded oil market. Ad was

shown for 10 years.

Strategy for Saffola

Health and wellness segment & positioned as healthy oil. The target

customer is to engage young adults “World heart day” used to appeal to

them to bring their parents for a check up. This program also gave an

opportunity to talk to these young adults about the preventive heart care

for themselves.

Direct to office initiative – The busy executives and professionals all are

looking for lifestyle interventions necessary to counter the stresses of

personal and professional life.

Direct to consumer programme - Its not that the brand should take up

social responsibility activities, but it should be able to convey its goodness

to the consumers.

Saffola health care initiative by Marico is one such experience delivered to

the customers.

The customers were allowed to come together and discuss the major

issues while Marico hired cardiologist and other experts to brainstorm on

the quality improvement in Saffola.

The results were increase in sales & definitely a customer loyalty.

Goodness helps brands to bridge the perception of exploitation build

brand equity and helps in connecting with customer better.

Contract farming

It is a system in which agricultural commodities are produced and supplied

to a particular buyer mostly processors under pre negotiated terms and

conditions such as price, quantity & quality.

Advantage to firm

Getting raw material in required quality and quantity in time and at least

cost

Helps in logistics, processing schedule & supplies

Introduce new techniques or crop to meet changing preferences

For Farmers

Assured markets

Stable price

Access to new technology

Sales & Volume of Sweekar & Saffola

SWEEKAR

17

94

120

143

15 16

0

20

40

60

80

100

120

140

160

2006-07 2007-08 2008-09

Volume (KL in '000)

Amount (Rs in Crores)

SAFFOLA

Product Life Cycle – shows the stages that products go through from

development to withdrawal from the market.

• The Stages of the Product Life Cycle:

– Development - New ideas/possible inventions

– Introduction/Launch - Maximise publicity, High cost/low sales

– Growth - Sales rise ,Revenues increase ,Monitor market –

competitors reaction

– Maturity - Sales reach peak, Cost of supporting the product

declines ,Ratio of revenue to cost high , Competition likely to

be greater

– Saturation -New entrants likely to mean market is ‘flooded’

38

221

298

387

28 34

0

50

100

150

200

250

300

350

400

450

2006-07 2007-08 2008-09

Volume (KL in '000)

Amount (Rs in Crores)

– Decline & Withdrawal - Product outlives/outgrows its

usefulness/value, Sales decline

INTERNATIONAL BUSINESS GROUP (THINK IBG=THINK BIG)

Evolution

The International Business Group was formed in early 90's to cater

Time

Sweekar

Saffola

Development

Introduction

Growth

Maturity

Saturation

Decline

Sales

mainly to the demand of Indians settled abroad. The Business was then

small and it has over the years assumed increasing proportions with a

phenomenal topline growth rate of more than 30%. Initially Marico

exported only Parachute Coconut Oil. Now it caters to varying needs of

customers in different countries with a host of varied offerings.

Customising for local needs

To cater to customers who belong to diverse cultures and consumer

habits the International Business Group has been customizing its

products. For example, it offers perfumed oils to consumers in

Bangladesh and Hair Creams and Hair Oils (with lower coconut oil

content) to Arabs in the Gulf. Market shares of Marico's brands

overseas have been rising. Parachute Coconut oil is the market leader

in Bangladesh with almost half the market share while other hair oils

and hair care products have been consolidating their share of the

market. Hair Cream in Gulf is increasingly growing into a big brand.

 

 

BANGLADESH

In 2002 Marico established a factory on foreign soil - Bangladesh. Marico is the

first Indian company to have a manufacturing location in Bangladesh. The steady

growth of CNO franchise, with better product quality along with direct and

indirect distribution provides good opportunity for IBG business in Bangladesh. In

Bangladesh, Marico operates through Marico Bangladesh Limited(MBL), a wholly

owned subsidiary manufacturing facility at Mouchak, near Gazipur.

MBL acquired soap brand 'Camelia' to signal its entry into the Toilet Soaps

market in Bangladesh in early 2005. In October 2005, MBL also acquired the

Toilet soap brand 'Aromatic' from Aromatic Cosmetics Ltd which enjoys a high

brand equity. MBL enjoys a strong distribution reach of about 1,68,000 outlets.

 

The IBG Bangladesh Journey

Started operations in 2000

Today, MBL is the 3rd largest MNC FMCG in Bangladesh

Impressive growth in turnover YoY

 

Product Portfolio in Bangladesh

Parachute

Parachute is one of the largest brands in Bangladesh and is the undisputed leader

in its category. It is one of the most trusted brands in the country today. Volumes

have grown manifold from humble beginnings and today, the brand commands a

market share that is more than 3 times that of its nearest competitor.

Our Consumer

Parachute is targeted at all modern women who are embracing the new age with

ease, as well as understanding newer and better means to personal care. The

brand enjoys huge loyalty, both in urban and rural sections of Bangladesh.

Innovations

Parachute has always been known for its consistent innovation providing for

better quality and more user-friendliness. The introduction of plastic bottles, flip-

top tamper proof caps, wide-mouth jars and blister packs at an attractive price

point have all been category firsts in Bangladesh.

Parachute Flying High

Parachute is the No. 1 brand in its category in Bangladesh. The brand has moved

from around 50% market share to over 68% in the course of just one year. Being

one of the largest distributed brands, it reaches over 3.5 lac retail outlets. The

brand singularly stands for purity and modernity in both urban and rural

Bangladesh.

Our communication

Parachute's television commercials have always been a favorite with the

audience of Bangladesh. The 'Anthem' commercial in 2006 had one of the most

memorable jingles at that time in the country. Parachute has recently signed on

Tisha - the celebrity actress of Bangladesh - as its brand ambassador.

Soaps

Camelia

Aromatic

About Camelia

Camelia Beauty Soap was acquired by Marico Bangladesh from Marks &

Ally Limited in early 2005. The brand was relaunched with three new

variants - Beliphool, Cucumber and Rose.

Camelia Beauty Soap was acquired by Marico Bangladesh from Marks &

Ally Limited in early 2005. The brand was relaunched with three new

variants - Beliphool, Cucumber and Rose.

Products:

Camelia comes in three variants and is enriched with Vitamin E, which

keeps your skin looking great. It conditions, nourishes and protects the

skin, leaving it soft, smooth and healthy.

Beliphool

Beliphool is best known for its delicate and sweet, soothing fragrance,

which helps to calm the mind and induce relaxation. The gentle fragrance

makes you feel fresh and confident, all-day long.

Cucumber

The hydrating, nourishing and astringent properties of Cucumber are a

beauty secret for the skin. Regular use of Camelia Cucumber prevents

dryness of the face and provides for a smooth toning of the skin. The end-

result is fresh and happier looking skin.

Rose

Rose is an all-time favorite to enhance a woman's natural beauty. Camelia

Rose is formulated with rose extracts. It not only nourishes and comforts

the skin but also surrounds you with the exquisite fragrance of rose.

About Aromatic

In October 2005, Marico Bangladesh acquired the brand Aromatic from

Aromatic Cosmetics Ltd. The brand was re-launched as Aromatic Gold in

October 2006 and having been on a steady growth path since then. It has

natural and traditional ingredients and is available in four variants

Turmeric, Rose, Lemon and Neem.

Available in a modern and attractive packaging, the brand today stands

for modern beauty with traditional values.

Products

The product is designed to represent the concept of balanced modernity.

The products are a perfect blend of time tested natural ingredients and

milk cream.

Purifying Turmeric

The blend of turmeric and pure milk cream helps to enhance skin

complexion.

Softening Rose

The Rose variant has all the natural goodness of rose water and milk

cream, which makes your skin clean and fresh. Being a natural cleanser,

rose water nourishes and protects your skin.

Refreshing Lemon

The astringent properties of lemon extracts act as a natural cleanser and

toner for oily skin. Along with that, its fresh aroma helps to uplift the spirit

and soothe the nerves.

Protective Neem

Aromatic Neem soap has the natural goodness of neem which protects the

skin and maintains its natural complexion. The anti bacterial properties of

neem keeps the skin clean and clear.

EGYPT

Marico's Egypt journey began in September 2006 by acquiring a leading

local Hair Care brand Fiancée along with its manufacturing facilities. In

January, 2007, new products in the Egyptian market. Towards these goals

Marico has also invested in a new factory in Sadaat City that is likely to

employ over 200 people.

The IBG Egypt Journey

Started operations in 2006 with the acquisition of Fiancee

Acquired Hair Code in early 2007

Currently operates 2 manufacturing units in the country

About Fiancee

Fiancee is a leading player in its category in Egypt. Current market shares

are in excess of 30%. Fiancee brand operates in the 3 segments of Gels,

Creams and Cream-Gels. Cream-Gels are a major contributor to the

business, and is Fiancée is considered the pioneer in this category with

over 70% share. Fiance also has a small but profitable business of

cosmetics under its brand.

Products:

Fiancee Hairfood Cream

Fiancee 2x1 Cream Gels

Fiancee 3X1 Gel Cream

About Hair Code:

Hair Code is the leading Player in the Hair care category in Egypt. Hair

Code has been doing exceptionally well since the time it was acquired by

Marico. Market shares have gone up from 23% ('06) to 32% ('07).

It Operates in the 3 segment of Gels, Creams and Cream- Gels. Gels are

the major contributor the business. Hair Code Gels command a market

share of over 50% in the category. Hair Code is the No. 1 Gel brand in

Egypt. In Gels Hair Code also has the highest TOM in the category.

MIDDLE EAST

The past ten years have witnessed a concretization of the Parachute

brand equity in the Middle East. With a steady growth in the hair-oil

portfolio and the establishment of deep-rooted distribution,

the IBG business in the Middle East now seems headed for a rapid

growth. Over the years Parachute has become a formidable brand in the

Gulf and has high affinity among Arab Women.

Middle East Journey:

Started operations in 1991-92

Currently present in entire GCC, Yemen, Sudan and Levant region

In creams, we are the No.1 in UAE, ahead of Brylcreem, Sunsilk &

Pantene

Product Portfolio in Middle East:

In the Middle East, Marico IBG is mainly operating in pre and post hair

care. The product portfolio comprises:

Parachute Coconut Oil

Parachute Hair Creams

 

Parachute Coconut Oil:

Parachute Coconut Oil brings you all the natural goodness of India's

finest coconuts.

 

Parachute Hair Creams:

All the goodness of coconut is available in the Parachute range of hair

creams containing natural ingredients that help your hair regain its

health, and stay healthy. As these creams contain

natural products traditionally used for hair care, they have no side

effects.

What's more, they are pleasantly perfumed and are non-sticky, and

come in the modern cream format that makes them easy to use.

Parachute Creams comes with new Aqua Shield formula that works as a

barrier against the damaging effects of harsh water and has been

specially formulated for the water and weather conditions of this region.

The formula spreads and actually forms a protective coat over each hair

strand. While it acts as a shield, it also deactivates the damaging effects

of harsh water, so that your hair is strong enough to stand up to any

water conditions. The unique Aqua Shield is found in every cream from

the Parachute range along with the nourishing properties of natural

ingredients.

Parachute Extra Nourishment Coconut Hair Cream:

For hair that needs regular

nourishment, give your hair the

necessary nourishment with a

unique cream containing

natural coconut oil and coconut

proteins in a non greasy

formula allowing everyday

usage. This cream helps keep

your hair smooth, shiny all day

long. Use it after shampooing

every day.

Parachute Extra Moisturising Coconut Hair Cream:

Parachute Extra Moisturising

Coconut Hair Cream has a

unique moisture balance

formula and Aloe Vera -

which lock moisture into

your hair, making it soft,

silky and easy to manage.

SOUTH AFRICA

The acquisition of the consumer division of Enaleni Pharmaceuticals

Limited, South Africa marked Marico's entry into the South African ethnic

Hair care and Health care market estimated to be in the region of

Rs. 5.83 billion ( about USD 150 million) growing at over 20%. IBG South

Africa operates 3 leading brands, viz. Caivil in premium ethnic hair care,

Black Chic in VFM hair care, Hercules in OTC Health Care.

The IBG South Africa Journey:

Started operations in October 2007

Currently operates 3 leading brands

Marico expands its SAP footprint to South Africa

In a move to boost global integration, Marico has expanded its SAP

platform to Marico South Africa. The SAP implementation at Marico South

Africa has helped in creating an integrated landscape leading to better

controls and data visibility across both locations. The implementation

was completed within three and a half months, without any business

disruption. The integrated system has reduced operational complexity,

increased efficiency and has helped in addressing the unique challenges

posed by a growing new subsidiary in the highly competitive space of

consumer products.

Product Portfolio of IBG South Africa: 

Caivil

Black Chic

Caivil is a leading brand in premium ethnic hair care in South Africa.

The product range of Caivil includes:

Caivil Relaxer Range

Caivil Mend & Gro Range

Caivil Oil Moisturiser Range

Caivil Styling Spray Range

Caivil Shampoo & Conditioner

Caivil Colour & Shines - Semi Permanent Colour Range

 

Caivil Relaxer Range

Based on a gentle NO LYE, low irritation new

and improved formulation that is not only an

easy application but effective on the hair and

gentle on the scalp, Caivil relaxers have

extra conditioning Mineral and Lanolin oils

intended to protect your hair & scalp leaving

hair straight, manageable and in a healthy

condition. The oils protect scalp during processing hence low irritation.

The oils also protect hair from over processing hence reduction of hair

breakage.

Caivil Gold range consists of two relaxer strengths regular

and super. These effectively relax the hair and are gentle

on the scalp. This range is always banded with a deep action Neutrafix

neutralizing shampoo which stops the action of the relaxer, therefore

leaving hair soft and manageable. The Neutrafix neutralizing shampoo

contains a colour indicator which indicates the presence of a relaxer in

hair that is not properly rinsed. When hair is properly rinsed with this

shampoo, it is protected from over processing.

Directions for a retouch: Protect hairline, behind ears and neck

completely with Caivil Mend & Gro hair food. Part hair into 4 sections.

Generously apply relaxer in sections generously apply relaxer in

sections. Do not apply to scalp. Allow to process between 8-20 minutes

depending on hair texture. Rinse thoroughly with warm water.

Apply a generous amount of Neutrafix neutralizing shampoo and work

into a thick lather. Rinse well and repeat shampoo. If lather is still pink

then repeat process until lather is white and water is clear. Towel

dry hair and apply Caivil Strengthening conditioner, rinse and towel dry

hair and apply Really Soft & Shiny Oil Moisturiser Spray or Moisturising

lotion.

 

Caivil Mend & Gro Range

Caivil Mend'n Gro Hair Foods, penetrates the

hair shaft and nourishes from the inside out-

for strong, healthy hair hence promoting hair

growth. With different beneficial oils this

range treats and protects the scalp as well.

CAIVIL Mend'n Gro Vitamin E Hair Food- is

ideal for short breaking hair, it strengthens

re-growth and keeps it healthy. It contains Vitamin E which provides the

following benefits on hair and scalp: Replenishes moisture to relaxed,

coloured and natural hair thus preventing it from breakage.

It also replenishes the scalp preventing it from itchiness and flaking.

CAIVIL Mend & Gro Maxi Shine Jojoba Oil Hair Food-

For dry & brittle hair, it contains Jojoba oil which is known to penetrate

hair follicles thus reducing water loss, keeping hair and scalp

moisturized, leaving the hair silky & shiny. CAIVIL Mend & Gro Marula Oil

Hair Food - For weak & damaged hair, this hair food contains Marula Oil

which known to one of Africa's greatest scalp care oils.

Rich in anti-oxidants and oleic acid, it creates a protective coating on the

surface of the scalp making it good oil for dry scalp sufferers. It helps

hydrate, heals skin tissue and prevents moisture loss and increases

smoothness of the scalp. This in turn assists the re-growth in growing

strong and healthy.

CAIVIL Mend 'n Gro Maxi Moist Olive Oil Hair Food - For dry itchy scalp

Olive oil promotes shiny moisturized and full-bodied hair and a healthy

scalp.

CAIVIL Mend 'n Gro Carrot Oil Hair Food- for dull and lifeless hair and

split ends, this hair food contains natural beta carotene which helps to

rejuvenate and stimulate the formation of new hair and

skin cells.

 

Black Chic is a leading hair care brand in South Africa.

The Product range of Black Chic includes:

Black Chic RELAXER RANGE

Black Chic Neutrilising Shampoo

Black Chic Hair Fertiliser

Black Chic Hair Food Range

Black Chic Oil Moisturiser

Black Chic Braid Spray

Black Chic Permanent Hair Colour

Avocado Range

 

 

Black Chic RELAXER RANGE

Black chic Relaxers a range of

Sodium hydroxyde or

Lye based relaxers that contain

moisturising Olive Oil, effectively

straightens & moisturises hair, for soft

& manageable hair.

The range comes in two

strengths:Regular - wich is suitable for

normal hair and Super for coarse & resistant hair.

Black Chic S-curl with softening Lanolin creates natural looking

curls for soft easy to style hair.

Black Chic Neutrilising Shampoo

Black Chic Neutralising Shampoo

contains moisturizing Olive Oil. It is

gentle and safe to restore hair's natural

pH balance, leaving it soft, smooth and

shiny. It contains a colour indicator

which assists in indicating any left over

relaxer

on hair.

 

Black Chic Hair Fertiliser

Black Chic Enriched Hair Fertiliser

is an anti-dandruff and conditioning and

strengthening crème for healthy hair

growth. Enriched with Peppermint and

Tea Tree oil prevents potential damage

while growing the hair. Peppermint is

known to soothe and refresh the scalp while Tea Tree is known for

its

anti-dandruff properties. Black Chic Enriched hair Fertiliser is ideal

for chemically treated hair, braided hair and dry and damaged hair.

It is also recommended for thinning hair and receding

About Hercules:

Hercules is a traditional South African brand. It has a range of tried and

trusted products that have been in the market for over 78 years. The

brand aims to provide affordable, complimentary healthcare, which aids

in the relief of common aliments and complete wellbeing.

 

Products:

It consists of the following:

Vitality Range -  castor oils , calamine lotion etc

Fix Range -  coughs & cold range-i.e. fix sniffer

Herbalax

Range

-  herbal laxatives i.e. Herbalax

Unola Range -  foot care range i.e. SB foot powder

Karazel Range -  skincare range

Shisalene

Range

-  aids in relief of muscular pain

MALAYSIA

In January 2010, Marico made its entry into the Malaysian hair styling

market through the acquisition of the Code 10 brand from Colgate-

Palmolive Company. The brand is present predominantly in Malaysia and

has exports to a few neighboring countries. Our expertise in beauty and

wellness categories (in particular Hair Care) also aided the entry into

Malaysia. Hitherto Marico’s presence in Malaysia has been through its

coconut oil brands Parachute and Nihar.

Backed by strong consumer equity and investments, Code 10 is set to

chart a new growth trajectory, providing Marico a platform for faster

organic growth in this market. Marico leads the market in key hair

styling segments in the Middle East and hopes to replicate the same in

South East Asia.

The IBG Malaysia Journey:

Started operations in 2010 with the acquisition of Code 10.

Currently operates 3 leading brands.

 

Product Portfolio of IBG Malaysia:

Code 10

Parachute

Nihar

INTERNATIONAL BUSINESS GROUP  

 

About Code 10:

Code 10 is the number 3 player, in the hair styling category, in

Malaysia and enjoys a double-digit market share. The Code 10

range of products comprises of hair creams and hair gels.

CO

DE

10

Products:

   

About Parachute:

Parachute is premium edible grade coconut oil, a market leader in its

category. Synonymous with pure coconut oil in the market, Parachute is

positioned on the platform of purity. In fact over a time it has become

the gold standard for purity. From a loosely available commodity to a

path-breaking brand, Parachute pioneered the switch from coconut oil

sold in tins to plastic. Parachute is also available

in pouch packs, to service the rural sectors, increasing penetration.

While the positioning of Parachute has always been on purity, the

communication has evolved over time to appeal to different consumer

sets. Over a time the brand has sought to remain relevant and

differentiated from competition through a slew of initiatives in packaging

( introduction of the new sleeker Parachute pack) & communication like

the"weight-test" (proving that pure Coconut oil is heavier than impure

oil).

Parachute has thus ensured thatit enjoys tremendous equity and trust

with every passing generation.

The brand has a huge loyalty, not only in the urban sections of India but

also in the rural sector.

 

Contributors to Parachute's success:

The quality of the product has contributed to its lasting success. The

consistency, with which Parachute has delivered, ensures consumer

loyalty and trust in the brand. Innovations in the packaging whether

from the aspect of user-friendliness or aesthetics have and continue to

help Parachute grow.

 

Some of the examples of innovation for Parachute are:

Flip Top Cap for Parachute bottles to enhance the safety and protect

the purity of oil.

 

Easy Jar of Parachute to facilitate usage especially during winters.

 

Parachute Mini - a bottle shaped small pack being sold at an MRP of

Re. 1

 

20 ml Parachute - a Rs 5 SKU that enables loose oil users to upgrade

to Parachute

These innovations have not only ensured protection of existing

franchise, they have propelled further penetration, enabling conversion

of loose oil consumers to packaged Parachute Coconut Oil.

About Nihar Naturals Coconut Oil:

Nihar Coconut Oil is a brand of pure coconut oil that has used the

platform of purity to become the market leader in the eastern region.

The brand is particularly strong in the states of Bihar and Jharkhand.

Nihar coconut oil speaks to young mothers whose lives revolve around

their families. Aware and educated, they take great pride in shouldering

their family responsibilities and want to buy only the best for their

family. And the best can only mean one thing - Nihar Coconut Oil. With

natural ingredients, double filtration and a 100% purity guarantee, Nihar

Coconut Oil is coconut oil in its purest form. The essence of this brand is

well brought out with its baseline 'Kudrat Ki Shakti.

 

Nihar Naturals Perfumed Hair Oil:

Nihar Naturals Hair Oil has used its understanding of consumers to

become the leading hair oil brand in the eastern market.

It is a brand that has managed to differentiate itself from its competition,

labeling them as 'basic coconut oils', and adopting a stand of 'beauty

and nourishment' for itself.

This move has come from a clear understanding of the consumer, a

young Bengali woman who believes that there is more to her life than

her household duties. We decided to talk to her about something that

she felt strongly about - her loss of identity after her marriage.

Nihar Naturals did this through an insightful commercial about lost

identity, and how a simple thing like leaving your hair open can help you

regain it.

That was the beginning of the campaign 'The Power of Open Hair'. The

campaign has helped Nihar Naturals achieve unprecedented growth.

Nihar Naturals is also available in two variants - Rose and Jasmine. These

fragrances are very popular in the eastern market, and have helped

propel the brand further.

Strategy Adopted by IBG Group

Marico was in a fix: its Parachute hair oil was a hit with Indians in the Gulf,

but why were Arabs shunning it? Well, apparently because they preferred

hair creams to oils. Word went back to headquarters in Mumbai: Send

cream, not oil. The result: Parachute Advanse Hair Nourishment Cream,

launched in the UAE in 2001. Since then, Marico’s sales in the region have

never slowed. Better still, Marico decided to try the cream back on its

home turf and launched it in 2005 as an after-shower cream, and now has

19 per cent of the hair creams and gels segment.

Little wonder that Marico today has a Rs 500-crore international business

group with a footprint in West Asia and Africa, having grown its exports

from just Rs 2 crore in the ’90s, when it rode the coconut oil wave to

Dubai. The secrets of Marico’ success: localisation coupled with transfer of

learnings, as it acquired local firms or set up its own channels and

manufacturing bases.

“We could have tagged the export business along with the domestic

business but it would have not got good focus. International business had

to have a separate focus and be managed differently,” says Harsh

Mariwala, Chairman and Managing Director, Marico, explaining the

formation of the IBG, which now accounts for over one-fifth of the group’s

total turnover (Rs 501 crore out of Rs 2,388 crore in 2008-09) growing at a

compounded annual rate of 40 per cent.

Striking Roots For Marico, the Gulf was a good launchpad for its global

forays. After the hair-creams-not-oils lesson, Marico was quick to adapt

other practices. Now, Parachute cream has become the #1 player with a

market share of 23 per cent in the Gulf Cooperation Council (GCC) region.

The business grew out of Dubai into all the GCC countries across West

Asia.

Next stop: Bangladesh, in 1995, where Marico set up a separate company

(it got listed on the local bourse this September) that has grown from

nothing to become the third-largest multinational after Unilever and

Nestle in the FMCG space.

Marico Bangladesh Ltd (MBL), which has 74 per cent of that country’s

market for branded coconut oils, replicated and localised its Indian

innovations. So MBL has some world-class television commercials,

distributor software with bills in Bengali, sales teams carrying PDAs that

can read Bengali and a webbased monitoring portal.

Debashish Neogi, CEO, MBL, says: “After entering the Bangladesh market,

we soon realised that it was not advisable to have a purely ‘India forward’

approach. So our biggest challenge was to de-link without sacrificing the

best practices from India.”

“The successful cultural integration and glocal approach has helped MBL

to grow exponentially,” Neogi says. MBL is the largest Indian FMCG

company in Bangladesh, with a top line of Rs 275 crore for the year-

ended March 31, 2009. Three-and-a-half years ago, revenues were at Rs

72 crore.

After having established its presence in Bangladesh and the GCC region,

Marico forayed into the MENA or Middle East & North Africa region and

South Africa through acquisitions.

In September 2006, Marico entered Egypt by acquiring Fiancee, a

familyowned brand and after three months went on to acquire HairCode,

along with manufacturing units. It was here that Marico acquired a unique

category called gel cream. “We are experimenting with it now and

prototyping the product in India,” explains Vijay Subramaniam, CEO, IBG,

Marico.

In October 2007, Marico acquired the Consumer Division of South Africa’s

Enaleni Pharmaceuticals Pty Ltd. for Rs 52 crore and secured three brands

in the bargain—Caivil, Black Chic and Hercules. From South Africa, Marico

has expanded into neighbouring Angola and Botswana.

Foundation and Empire Overall, in the last 36 months, Marico has notched

up seven acquisitions, of companies as well as brands, in Bangladesh,

Egypt and South Africa.

“We were keen on emerging markets because the growth rates in these

markets would be higher. Even with a GDP of 5-6 per cent the growth

rates would be higher,” says Chaitanya Deshpande, Head, M&A and

Investor Relations, Marico.

So has this growth been largely inorganic? No, says Subramaniam, and

adds: “IBG has been growing at a 5-year CAGR of 40 per cent and of this

33 per cent comes from organic growth.”

Subramaniam cites three significant shifts in Marico’s strategy as it grew.

First, it went on a mergers and acquisitions spree. Second, it gave up its

India-centric approach and localised its offerings. Third, in the process, it

has gone from being an oil company to one with gels, creams, lotions et

al. “That’s how we are moving across the curve,” he says.

The IBG gets almost 66 per cent of its business from Bangladesh, Egypt

and South Africa. “The major contribution to the international business, of

approximately 36 per cent, is from Bangladesh, where the shift from loose

oil to branded coconut oil has boosted growth,” he says.

In Egypt, Fiancee and HairCode command over half the post-wash

haircare market. In South Africa, while Marico leads in niches, at an overall

level its share would be around 10 per cent of the ethnic haircare space.

According to analysts, Egypt contributes about 15 per cent to the overall

growth of IBG.

“We expect the Egypt business to grow at 25 per cent in FY10 thanks to

the restructuring of its distribution set-up, internal sourcing and also

having its own manufacturing plants,” says Sharekhan’s Pawaskar. The

overall strategy has also given the company good cash flows: Rs 185

crore in the last financial year.

Challenges: So Far So Good Every country poses its business challenges,

and the key is to adapt and learn, Subramaniam says. “One needs to be

adaptable and flexible to deal with ambiguity and uncertainty in these

markets,” he says. “Localisation is the key.”

While business challenges remain more or less the same for most

countries around the world, Milind Sarwate, Head, HR and Strategy, says

Marico faced many HR challenges, not the least being its fiercely

independent nature, unlike western MNCs, which are instruction-led.

“Our challenge was, how can we run overseas operations? Can we run it

the way we do in India where we believe in empowerment?” says Sarwate.

As for integration, Marico has followed different models. “In Egypt, when

we built a new office, we built a prayer room. Chairs in our office are

placed sideways instead of facing the host, as eye-to-eye contact here is

considered rude,” Sarwate says.

Today, most of Marico’s overseas operations are manned by locals,

barring a few Indians like Neogi of MBL.

Future Strategy:

With the acquisitions settled, Marico now wants to take its acquired

brands across markets. So, it will use Egypt and South Africa to tap

neighbouring countries. “While Marico eventually plan to take the

Egyptian brands to West Asia, and also looking at Libya, Morocco, Sudan,

Algeria to expand the business.

And Mariwala’s parachute brigade is well prepared: it has three

manufacturing units in Egypt and plans to make the country its

manufacturing base for the MENA region.

4 Factors to Success story of Marico

Bibliography

1) www.Marico.com

2) Annual Reports of Marico Ltd.

3) http://www.saffolalife.com/

4) http://www.Marico.com/Marico_worldwide/index.html

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