Dabur to focus on southern markets — To customise products and packaging to regional palate
After its sales across the four southern States registered a 40 per cent growth in the first quarter this fiscal, Dabur India has decided to take several initiatives to cash in on the increasing purchasing power of these States.
The company has decided to customise some of its products, reformulate and repackage them to cater to the south Indian palate; strengthen its sales and distribution network in the region and even launch new products first in these markets.
"We traditionally neglected the southern market, focusing mainly on the northern and eastern ones because some of our power brands were not relevant to the South. But after the strong sales growth the four southern States during the first quarter, we have decided to take several initiatives so that the contribution of sales from the South grows. In fact, we expect these four States to double their contribution to the company's topline to 16 per cent over the next two years," Vice-President (Sales), Mr S. Raghunandan, told Business Line.
This South-focus would mean customising products and even re-branding some of DIL's flagship products. For example, the company's largest flagship brand Chyawanprash may be reformulated to suit the south Indian palate and it could be repackaged to account for language differences. In the South, Chyawanprash could even be sold as a powder!
Mr Raghunandan said the company is conducting research to decide on the final formulation and packaging of Chyawanprash meant for the southern markets.
Other well-known brands where the re-branding option is being considered are Hajmola, Pudin Hara group of products and Dabur Lal Tel.
"We may look at altering brand names and packaging to cater to local needs. For example, Hajmola and Dabur Lal Tel are very Hindi-sounding names. These brands may be re-packaged with labels in local languages," he said.
Again, the Vatika brand has a strong equity in the southern markets, especially in the case of coconut hair oil, and the company will use this brand extensively to focus on the region.
And even as product and packaging will be customised to suit this region, DIL has decided to hike its advertising and media spend in the South by 5 per cent. Mr Raghunandan said among the four southern States, Andhra Pradesh is the largest market, followed by Karnataka, Tamil Nadu and Kerala. Asked whether the company will have to set up manufacturing also in the southern regions to avail of any cost benefits, he said there were no immediate plans to begin manufacturing in the South. He said these new initiatives will be unleashed early next year.
Our typical marketing budget is usually 10 per cent of the topline spend