Harsh Mariwala, Chairman, Marico Industries delivered the keynote address at Pitch CMO Summit 2015 held in Mumbai yesterday. He spoke about the Role of Innovation and Purpose in Brand Building.
Mariwala explained how innovation is expected out of everyone as Marico’s inherent company culture. He cited the example of Parachute Oil which was initially sold in tin cans. The challenge was to offer the oil in plastic which is cheaper. “We went to the retailers but there was a huge ‘no’ from them. Because somebody had tried it before and failed.” It caused spillage and rats had bitten all over the packages. But we didn’t take no for an answer and went back to the drawing board. We actually put the product in rat cages and proved that it remained intact, he said. “It took us ten years to convert the market from tin to plastic. In that process, our market share rose from 15% to 50%,” he added. But coconut oil freezes in winter so we again innovated and made an easy jar for winters. Then there were a lot of copy cats and we were losing 20% sales to copy cats. We used technology to prevent this. So we made a pilfer-proof fliptop. Later we also came up with this Rs 1 mini bottle.
Marico faced a threat in the year 1998. Hindustan Lever , as part of an acquisition, got Tata Nihar brand. Considering how Colgate was weakened by Pepsodent, there was a huge fear within Marico. Mariwala said the fear was created in them so they would sell out. But they stood their ground and refused to sell out and decided to take them on. They decided to spend more on advertising, ramp up the distribution network and have the mindset of being leaders. They released a new campaign called ‘Shuddhata ki shakti’ parachute. But their biggest challenge was to motivate the field force. They were called to a five star hotel for a conference in a simulated war room scenario for which a special video was created which showed it was time for war and Nihar had to be vanquished.
After the ordeal, finally Parachute lost marginal market share. Nihar got 10 to 12% market share, that too at the cost of weaker players. At some same stage they lost interest in the category and that was the time when Hindustan was getting integrated with Unilever. Mariwala was able to persuade the top leadership to buy the brand when it is auctioned. They were focused on acquiring it as it complemented them and is selling well in the east. Finally they did acquire the brand.
He cited another example of innovation when they acquired Mediker from P&G which was initially being sold as a shampoo. But Marico converted it into oil and doubled its sales. He said innovation can be applied not just to a product but can extend to all aspects of the business process.
Marico’s Saffola entered the breakfast category with oats, but had to differentiate themselves from Quaker and Kellogg. They employed the innovation of introducing savoury oats to Indians, masala oats. They have the largest marketshare in savoury oats category.
He said purpose plays an important role in brand building. He cited the example of how Brand Saffola talks about taking care of the heart and is hugely recalled as a champion of healthy heart. He further spoke about Nihar Shanti Amla, a brand that is very successful in Hindi Heartland. It is a challenger brand in the amla segment where Dabur is the leader. Initially Nihar Shanti Amla gave a value-for-money challenge and they realised that although they did get marketshare, it was perceived as an economical, borderline cheap brand. So they needed to improve brand perception and decided to build a purpose. The chose children education. Their marketshare was 18% in 2012 and has gone up to 25% in the subsequent year and finally up to 30%.
Later in a Q&A session with Sam Balsara, Chairman, Madison World, Mariwala spoke about entering into the service category with Kaya Skin Clinics, which was away from their core competency and a huge learning curve. Instead of a just giving laser hair removal solutions (which was the initial proposal), they decided to provide a full range of skin services with dermatologists and experts.
The annual event is organised by Pitch, the marketing magazine of the exchange4media Group and powered by general entertainment channel Colors, the presenting sponsor is Big Magic.