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Dabur to extend Binaca to herbal toothpaste

18-May-2004
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Dabur to extend Binaca to herbal toothpaste

When Dabur India restructured its product portfolio last year in a bid to become a full-fledged FMCG company, it was in a dilemma over one brand: Binaca. The company has been keen to sell the brand at the "right" price (about Rs 20 crore) and had even appointed management consultant PricewaterhouseCoopers to advise on this sale. But after about a year-and-a-half of unsuccessful attempts to find buyers for Binaca, the company has decided to retain the brand and is, in fact, now planning to extend it to herbal toothpaste.

Disclosing Dabur India's plans for Binaca, the Chief Executive Officer, Mr Sunil Duggal, told Business Line, "We have decided not to sell Binaca and keep it with us instead. We plan to extend this brand to launch a new toothpaste." He did concede that "some enquiries" were made about the brand by leading market players but negotiations were not successful.

Mr Duggal said the decision to launch a toothpaste under Binaca was taken despite the company's disillusionment with a toothpowder launched under the same brand three years ago, since the market and potential for toothpaste and toothpowder were very different.

"We launched a toothpowder under Binaca some three years ago. While it was well received by consumers, trade margins remained low and we had to ultimately withdraw it from the market. But toothpaste is a different market all together; we have already cornered 1 per cent of this market through our recent launch Dabur Lal Dant Paste and hope to replicate this success with Binaca," Mr Duggal said.

Dabur India bought the Binaca brand from Reckitt Benckiser in 1996 and had planned to launch toothpaste and other oral care products under it. However, with the company undergoing massive restructuring in the years following the brand's acquisition, these plans never materialised. When the company did get around to launching a toothpowder under the brand name, it was not very remunerative and the idea was abandoned. At present, Binaca is only present in the toothbrush category, but Mr Duggal declined to specify sales of this product at present.

Now that Dabur has decided to extend the brand to toothpastes, it faces an uphill task of developing the right positioning for the product in a highly fractured and fiercely competitive toothpaste market, which has well-entrenched brands such as Colgate and Pepsodent. With Dabur is still associated with the health and herbal platform in the consumer's mind, the company is trying to develop a formulation for the new toothpaste on the herbal plank.

"Yes, the toothpaste market is fiercely competitive but gaps and platforms are always available. ... We will position Binaca toothpaste on the herbal platform. The toothpaste should hit the market sometime this fiscal," he added.

As per the latest survey by market research agency AC Nielsen, the toothpaste market in India was worth over Rs 1,450 crore last fiscal, with Colgate Dental Cream cornering 36.1 per cent of the market in terms of value followed by Pepsodent at 13.2 per cent.

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