2015 has been an eventful year for Marico in many ways. From changes in the senior management to signing new brand ambassadors and a profitable last fiscal, Marico has managed to stay in news for all the right reasons.
Few brands under the group’s portfolio like Livon, Nihar Naturals, Revive, Parachute Advansed, Saffola and Set Wet deodorants have been quite active in terms of their advertising last year. Focus has been mainly to strengthen their brands, grow newer categories like hair gel and flavoured oats and to consolidate share positions in the big markets like hair oil.
While, the FMCG sector is booming with new launches, the challenges of growth and saturation are restricting this category. However, Marico has been able to cross the benchmarks internally and also outperform its competitors. Marico’s latest Q3 results indicate that net profit was up by 24% to Rs 198 crore , led mainly by its brands-- Parachute and Saffola.
In an interview with exchange4media, Anuradha Aggarwal, Chief Marketing Officer, Marico speaks about how 2015 has been for the company, plans for the current year, marketing mix, importance of digital media, challenges in the FMCG sector and the importance of celebrity endorsements for brands like Parachute Advansed, Livon, Nihar Naturals and Set Wet deodorants.
How was 2015 for Marico? What are your plans for this year?
It was an interesting year in terms of new advertisers entering the market and the context of the media changing and there was new money chasing inventory in terms of e-commerce. There is a lot of excitement happening in terms of technology, measurement, digital, activities, but I guess the FMCG world was doing what it usually does, which is launching new products and advertising. So, for Marico it was a good year and it continues to be one. We beat our benchmarks internally, and if we look at our competitors around us, we are outperforming them. We are also gaining share around the key categories and turning around the brands.
The broad plans for 2016 would be to grow faster than the market, strengthen our brands further and to consolidate our share positions in the big markets like hair oil. Also, try and grow the newer categories in which we are operating- like hair gel and flavoured oats, where Saffola is the market leader. We would try to get more consumers on to the healthy-heart bandwagon with increase in Saffola’s penetration in the country.
Does TV continue to form an integral part of your media marketing mix?
As a company across all our brands, TV is very important for our media mix. But depending upon the brand and the consumers they are targeting, the media mix is tailored to that objective. So there are brands on which 50% of our spends are digital and there are brands on which none of our spends are digital. There are brands where print is a very important part of the mix because they are local or need high frequency consumer education. While television continues to be a very high percentage of spends, however, the media mix is largely determined by the brand and its objectives.
As you mentioned there are brands in your portfolio with zero Digital spends. Considering that today’s consumers are always on this platform, do you think these brands will be at a loss by not featuring on Digital?
I am saying, if I am selling ‘Nihar Shanti Amla’ in deep rural UP, the need for Digital marketing is going to be driven by access to Digital devices in the area. So there is no need for me to spend on Digital till I can get that access, unless I am doing it through mobility. We are in fact doing something called the ‘Angrezi Mobile Paathshaala’, a missed call based English learning platform. This involves the use of the Digital media to get to the same consumers. So, it is not like we don’t use any Digital to get there; it’s just that it is the ‘engagement’ medium and not the ‘reach’ medium.
Which of your products do well in the tier ii and the tier iii areas?
A lot of Marico’s products and a very large percentage of our business comes from tier ii and tier iii towns. So Nihar as a portfolio, in the North- ‘Nihar Shanti Amla’, and we have recently launched ‘Nihar Sarso’, are both targeted at consumers in the tier ii towns and rural areas. Parachute Advansed hair oil is probably the most distributed product across the country.
What are the current challenges in the FMCG sector and how does Marico plan to overcome them?
I think the biggest challenge in front of the FMCG sector today is the-challenge of growth. A lot of categories in which we are operating are saturating. They are reaching their maximum level of consumption and penetration, and it is really a question of-- What will be the future drivers of growth? Are they going to be distributed into larger geographies? Are there going to be consumer dynamics in terms of pricing? Are there going to be new formats of benefits which will be offered to the consumers in the categories which we operate in? That is the primary challenge; the challenge of growth, which is also influenced by external factors like the GDP growth or the ability of the consumer to spend. Apart from that, it is also about what we are going to do for these categories, which will propel growth.
In the world of media and advertising, I think the challenge is coming out of pure fragmentation and consumer preferences of media consumption. Earlier we used to talk about people watching TV, but now we are talking about consumers watching more than one media at one point of time. Today, these consumers have less attention on one media, they are consuming more content. There is fragmentation of consumer attention, and the fact that there are various ways of entertaining themselves, is a challenge in front of the industry, because our message needs to be engaging for the consumers to take notice.
How has Marico established itself in the international market?
Marico has gone across the world cautiously and at the opportune moments of acquisition. We have a presence in the emerging markets mostly, that is where our footprint is.
We are operating in the key categories that we operate in India, so hair styling, hair grooming, male grooming are really big categories. Therefore, we are slowly but surely making an imprint in the businesses that we operate in Africa, Middle East and South East Asia
Marico has got popular celebrities for most of its brands like Deepika Padukone for Parachute, Vidya Balan for Nihar Naturals, Kangana Ranaut for Livon and Ranveer Singh for Set Wet deodorants. In the long run, how do celebrity endorsers help the brand?
I think what the brand ambassador gives you, especially if you are a new brand, is an association of a very positive kind. I do believe that the chosen ambassador must be a full representative of the brand. For example, we have signed Ranveer Singh for Set Wet deodorants and he reflects the personality of the brand in its truest sense. It is the brand which keeps alive the concept of ‘Sada Sexy Raho’, and asks men to go out and be themselves. The same thing has been done with Kangana for Livon- ‘Be Fabulous’. She is fabulous in everything she does, be it her movies or any interviews. I feel one of the things that Marico has got right over the time is to get the most suitable ambassadors to represent our brand.