Pitch Exclusive: Marketing sutras from regional champions
How are regional brands like Ghari Detergent, VI-John, Cremica, Emami, Rupa, Catch, Mankind, Lava and Wagh Bakri taking the biggies head-on; and how's their marketing strategy different. Pitch finds out.
If you thought that the tiger and the goat can never be friends, you are wrong. They can gel over a cup of tea. And if you thought that tigers like the Unilever and P&G of the world will gobble up the homegrown goats, you are wrong again. The second largest brand in the home and personal care category is neither Surf nor Ariel. It is Ghari detergent, a 24-year-old brand owned by Kanpur based company, named Rohit Surfactants. The No 1 though is Wheel, which was specifically launched with an objective to counter the popularity of another homegrown brand – Nirma at that time.
The third largest tea company with 7.5 per cent market share is Ahmedabad based Wagh Bakri Tea Group. Meanwhile, VI John, which has hired Shah Rukh Khan, the Badshah of Bollywood as its brand ambassador, claims to be the largest selling shaving cream in India. Pitch takes a look at some of these home-grown brands - the others being Cremica, Catch, Emami, Rupa, Mankind, Linc and Lava, particularly in the FMCG space - how like the paradoxical brand name like Wagh Bakri, have managed to survive in the market, riding high on a different thinking and distinct marketing approach.
Their decisions lie less on the output of crunching numbers and more on the gut feel and self belief. Most of them, as a virtue of being regional brands are closer home to the markets they operate in and understand their customers better than the MNCs, which largely depend on numbers gathered by third party surveys.
Let’s see the standing of some of these brands. Ghari detergent, the 24-year-old brand owned by Kanpur based, Rohit Surfactants’ is worth Rs 2,100 crore, and has outshined some 80 to 100 year old iconic brands like Lux (Rs 1,400 crore) Surf (Rs 1,400 crore) and Colgate (Rs 1,250 crore). Kolkata based Rs 1,200 crore company, Emami, was the first to launch the men’s fairness cream ‘Fair & Handsome’ in 2005. Currently, the brand, worth Rs 120 crore, is the market leader in the category with over 60 per cent market share.
Based out of Ahemdabad, Wagh Bakri Tea Group is the third largest Tea company in India with 7.5 per cent market share. Located in a small town named Phillaur of Jalandhar district in Punjab, is another homegrown brand Cremica owned by Mrs. Bector’s Food Specialities, which is at present the third largest player in the sauce category and the No 1 player in the mayonnaise category in India. Cremica is also the sole supplier of ketchups, mayonnaise and dessert toppings to the QSR giant McDonald’s.
Alok Sanwal, Project Head and Editor, I next, who is a part of a publication group that is a favourite of regional brands, sums up the attitude, as he says, “The regional brands have a very good understanding of the consumer’s point of view. Also, the understanding of what kind of certain products or variants of certain products will do well in a market viz-a viz certain other markets is also very good. The price understanding i.e. where the price sensitivity prevails as well as what variant of a product is liked in which market, in terms of sachet size or pack size is fantastic. Another thing is the distribution, management in terms of geographical reach is also very good. Not just in the heart of the city, but also outside the city areas and small towns . So these are the marketing domains they clearly score over MNCs.”
Marketing decision making
One of the biggest strengths of these brands is that as they are promoter driven, hence decision making is simple and quick and doesn’t undergo rounds of meetings and presentations unlike their MNC counterparts. Harsh Agarwal, Director, Emami Group, cannot help but agree, “As compared to MNCs, our decision making is faster,” he says.
Ali Merchant, Director, Triton Communications, the agency that handles many regional brands like Wagh Bakri and Rotomac says, “These regional promoter led brands don’t have multiple layers of decision. For instance, when an agency is working with an MNC, it may need to give the same presentation twice or thrice or may need to meet two or three different teams before any decision is made. On the other hand, in a company like Wagh Bakri or Rotomac, a project can be cleared or dumped in just one meeting.”
The flip side of that could be that the agencies too aren’t sure when they could be axed from their account roll. But the unfortunate decision again is not whims driven but performance driven. As Sudarshan Banerjee, Head, Ignitee Mudra puts it, “They are quick to dump you (the agency,) if they see that your expertise isn’t working, a thing which often does not happen with big brands. Big brands have a large decision making matrix before you can implement any change; there are levels of teams that the agency has to route through. But here, we deal directly with the Chairperson/promoter, who is able to take a quick decision.”
And these decisions often are not scientific, i.e. backed by numbers or surveys. Most of the times they are gut driven. S N Rai, Co-founder & Director, Lava International, says, “I personally give a lot of importance to my gut feeling. I entered into the mobile handset business was on sheer gut.”
Rai was with LG, when he launched his own mobile handset company, and the fact that LG didn’t too well in this business despite making heavy investments into product development, consumer engagement and trading, did not deter him. “Based on this experience, initially we were thinking of entering the telecom service business and not product business but we were sure that our product had bigger opportunity to grow and based on a strong hunch we entered this market.”
Consumer insight driven
As said earlier this gut feeling is not whimsical but based on experience and the knack of gauging consumer sentiment and consumer insight. The biggest example of this is the launch of men’s fairness cream, Fair & Handsome by Emami in 2005. Research suggested that about 28 per cent of all fairness cream users were men. Emami tapped into this insight and spotted this as an opportunity to launch India’s first fairness cream for men. This was clearly acknowledged by other FMCG biggies and since then, there have been slew of launches in this category including HUL’s Fair and Lovely Menz Active, Garnier Men Powerlight, Nivea For Men, Paras Pharma’s Set Wet Get Fair and recently P&G too has introduced Olay Men Solutions. The men’s fairness cream category is currently Rs 200 crore market and Emami’s Fair and Handsome is the leader in this category with a market share of over 60 per cent (despite all the launches from FMCG big daddies) and contributes to about 10 per cent of Emami’s turnover.
Rai of Lava has another insight to share. Lava was the first brand to introduce an alpha keypad as opposed to QWERTY, being introduced by everyone around. Lava was quick to realize that a majority of Indians were never exposed to a computer or a typewriter or for that matter to a QWERTY keyboard. Consumers as such were sending SMSes through keypads where multiple alphabets were placed on a single key and were placed sequentially. So if they had to upgrade to a full-blown keypad holding smartphone, it could be just simpler for them to have an alpha keypad. The company entered the smart phone market with models B-5 and B-2 with Alpha keypad and it was a hit among consumers. As per the company, Lava B-5 and B-2 together cornered 15-20 per cent of the total QWERTY sales happening at that time in India.
In the case of Cremica, when it entered the ketchup business, the ketchup consumption in the Indian kitchen was low and remained around unconsumed for many days. Nevertheless, ketchup was consumed, even though the bottle remained around for six months. Akshay Bector, MD, Mrs Bector’s Food Specialties (and son of Mrs. Bector who started the company in 1989), says, “We entered the business by ensuring that our bottles have a longer shelf life even after they are opened.”
Complimenting the entrepreneurial spirit of these brands, Ignitee Mudra’s Banerjee says, “They are trend hunters and thereby create a differentiated product and need among consumers.”
Mankind Pharma is another company, which is riding on its strong consumer and market understanding. The pharma company is focusing strongly on small towns and rural markets where the demand is high yet the big companies haven’t made a strong mark. R C Juneja, CEO & Chairman Mankind Pharma, says, “The market is growing at 15 per cent per annum, and this is the biggest advantage. Mankind is growing faster than the industry at around 28 per cent. The reason being we are very strong in emerging markets (small towns, rural markets). We could become the seventh largest company within a few years.”
Meanwhile, the Hamdard Group, which has brand like RoohAfza, Safi, Cinkara, Roghan Badam Shirin and Sualin, feels that it has “ageless brands”. Asad Mueed, Director of Hamdard Group, says, “We were founded with a focus on people and their needs. We continue to stay focused on them and bring products that are unique and serve their requirements. If we serve our consumers well, we will continue to have timeless brands.
If they take quick decisions, they expect quick results too. Most of these entrepreneurs are with deep pockets and can afford a long term brand building exercise before they hope to get even. But that’s not how they operate. They are focused and want quick results on their toplines. Merchant of Triton Communications, says, “They are extremely demanding as a client and have this ‘Day-before-yesterday Syndrome’ that I haven’t seen in the multinational companies. The ‘Day-before-yesterday Syndrome’ means that they want really quick results and they don’t expect the agency to take six months to deliver the objective. Rather, they expect results within days and weeks.”
Even the media owners agree that regional brands have a strong focus on ROI. Avinash Pandey, Executive Vice President, Ad Sales, Media Content and Communications Services (MCCS, the Star Group’s News Network that owns Star News, Star Ananda and Star Majha), says, “These players really know how to track ROI on each campaign and activity. For instance, Mankind Pharma advertised its digestive tablet Gas-o-fast in March 2011. Within weeks they called us and told that the sales of the product had been really good post the campaign and thanked us for the support.”
That means, if the product isn’t delivering, they would not shy from killing the product and moving on with an alternative. This is very unlike of MNCs, who would rethink their strategies and push the product again in the market backed by a massive campaign or a brand rejig. Banerjee agrees, “The entrepreneurs are able to emerge out of failures quickly.”
One reason for that could be the limited geography they play in, coupled with the competitive margins they have for their distributors and retailers – who would push a product with higher margins for them – and eventually competitive pricing.
Value for money products
The low margins on profits, while could come as a hindrance to experiment with product for long, it becomes their strength when they compete with the MNC brands which are most of the times priced higher. Ask the promoters to throw some light on this, and they are quick to defend and argue that it’s not just the low price that makes them a hit with the consumers, but a combination of low pricing and quality products. Harshit Kochar, Managing Director, VI-John Group, says, “We offer a good product at a good price so why will customers choose any other brand over VI-John.”
Surya Foods and Agro’s biscuit brand, PriyaGold is another case study, which has been built up on the low pricing good quality business model. At that time the butter biscuits and cream biscuits space was dominated by the biggies like Parle and Britannia, which BP Agarwal, Founder of Surya Foods and Agro thinks “were available at a price which was out of reach of the masses.” The gap was filled by PriyaGold, which decided to position the brand with a tagline: Haq se mango (Demand by right). “The idea behind the positioning was that everybody has the right to good taste and the right to ask for it. Instantly, the brand became a hit among the masses and currently it is the number four player with a 5 per cent market share,” says Agarwal.
The void left by Nirma, after Wheel overtook its position, has been filled by Ghari detergent. Its communication too revolves around constant research the company goes through to bring quality products to the masses. Rohit Surfactants, the company that owns the brand Ghari deliberately chose to target the economy segment. The economy segment contributes 45 per cent to the detergent market, followed by mid segment with 40 per cent and premium segment with 15 per cent contribution. A spokesperson from Rohit Surfactants calls the segmentation as a simple and matter of fact decision. “Seedhi si baat hai (It is very simple), the economy segment is the largest market and the competition is less in this space, so it made sense for us to venture in that segment.”
Kolkata based Linc Pens followed a similar approach. Linc was the first company to come out with gel pens at a price as cheap as Rs 5, which was not available in the market, earlier. It was a huge milestone for Linc because gel pens helped the company grow fast. “We were also the first to introduce ball pens with a special oil-based gel ink at Rs 5, so we created a category (a first kind in the industry),” says Divya Jalan, Head, Marketing, Linc Pens. She further adds that providing quality at good prices is the brand strategy of Linc Pens.
Meanwhile, as opposed to Ghari and PriyaGold, which have been operating in the economy segment, here’s a group – Dharampal Satyapal (DS) Group, which owns the brand Catch (spices and water) - which rather has chosen to take the premium route. The logic is simple. In a category full of me-too unorganised players, irrespective of packaged or non-packaged products, it makes sense to differentiate yourself by targeting a particular segment. While, the mix of spices would remain the same, one can for sure provide an innovative packaging and check on the quality of spices going inside. That’s where Catch charges a premium. For that matter, even Rajnigandha, the pan masala brand owned by the DS Group, too comes at a premium.
Puesh Gupta, Director, DS Group, says, “An important factor that leads to a successful venture is to understand your customer and customise your products for him. Value for money, teamed with best quality, highlights the commitment of a brand.”
Media buying sutras
So does this all impact their media buying behavior as well. These brands not only please the masses, but are a favourite of the media owners too. Most of the Hindi news channels get about 40-60 per cent of their ad revenues from regional brands. These channels love them, as they come to the table with a no-nonsense approach.
Yes, says the media fraternity unanimously, who feel that the regional players are very hard negotiators, which is mostly done in a very informal environment over a cup of tea, and coffee served along with cookies. The attitude doesn’t make the media fraternity shy away from these deals, as they are “good” in terms of making payments on time. “They always pay on time and most of the times in advance,” says Pandey from MCCS.
And what’s the criterion for selecting a media vehicle? The gut feeling, of course. Sanjay Dua, CEO, IBN, Network18 News Media Network, (Network18’s specialised client facing sales division), points out, “They rely less on the science and give more weightage to gut feeling when it comes to media buying.”
Media professionals feel that these marketers are clear and focused in terms of what they are looking for when it comes to selecting media vehicles. For instance, if a promoter has to launch a campaign, he knows exactly how many and which channels he needs to advertise on.
As most of the times, communication is tactical to keep the distributors informed about their new offers on products and keeping the customer informed about changes or variants for the product - the objective is sales driven rather than brand driven - much of that communication happens through print. Another factor is the proximity of the regional print players is greater than the proximity to the national channels (TV channels), which helps them strike a better deal.
However, Sanwal of Jagran Prakashan as an interesting insight who feels that there is a huge wastage in terms of reach as well as optimum return on investment in media spending by regional brands. “As far as basic buying is concerned, if you don’t really see if the plan was optimum or excessive, then in terms of cost (CPRT or CPT), the effectiveness of buying is higher. I mean, per unit rate of buying of time slots is far better for them. The reason being that newspapers, TV channels, and radio stations, also keep a differentiated price points for regional brands,” he says.
Sanwal has a word of caution too for media marketers, as he feels that high reliance on regional brands could be a “little dicey”. The plans, most of the times aren’t fixed. “They may change plans overnight depending on the situation. There is no fixed pattern,” he adds.
Macro as well as micro advertising
Celeb driven advertising is one of the favourite style of advertising and so you see the biggest celebrities like Shah Rukh Khan, Amitabh Bachchan, Sachin Tendulkar, Madhuri Dixit etc endorsing a plethora of such brands like VI-John, Navaratan, Fair & Handsome, Luminous, and Linc Pens.
Rupa & Co, which sells hosiery products under ‘Rupa’ branding, too is one of the earliest adopters of high profile celebrities. In 1999, the company roped in Bollywood actor Govinda as its brand ambassador for its Frontline range. For its women’s innerwear line, the company has had Aishwarya Rai, Lisa Ray, Celina Jaitley and Koena Mitra, as its endorsers. In 2007, the company roped in Hrithik Roshan for MacroMan, a premium sub-brand. P R Agarwala, Chairman, Rupa & Company, credits Rupa’s brand ambassadors for the “success of the products and building great brand visibility.” Rupa has a series of successful sub-brands like MacroMan, Frontline, Softline, Footline, Jon, Theormocot, Skywings, Zooreka, Bumchum and Interlock & Imoogi.
On roping in Shah Rukh Khan as VI-John’s brand ambassador, Kochar says, “Shah Rukh is known as the don of Bollywood and we are considered as the don of the shaving cream market. So I thought if the two dons came together to drive the product, consumers will acknowledge.”
Rajesh Jain, MD, Prachaar Communications (ad agency for VI-John) adds, “Since Shah Rukh always sports a clean shaven look, he was a perfect fit for VI-John.”
Just to digress a bit, while VI-John can be found at retail stores, yet, Kochar’s unique distribution route of pushing it through salons too makes it a hit.
Coming back to the topic, along with the high volume celeb led macro advertising, most of these brands also focus a big deal on promotions at the micro level including advertising in local media, roping regional celebrities, below-the-line activities etc. Triton’s Merchant says, “These brands are very good at taking both the macro and micro approach in advertising. For example for Wagh Bakri Tea, there is a TVC and print campaign that runs on national media but at the same time, when the brand is entering new markets, it is focusing on giving local flavour to the advertising.” Merchant further shares that Wagh Bakri Tea has recently launched a Marathi TVC specifically shot for the Maharashtra market with a Marathi celebrity to give the ad a Marathi flavour. The brand has Smriti Irani as its endorser in Gujarat.
But most of the times, TV is only a meagre part of their marketing budgets. Parag Desai, Executive Director, Wagh Bakri, says, “We thrive on region based local activities, and sales promotion. In fact, we only spend 15-20 per cent of our marketing budget in TV and print, rest 80 per cent is spent on activities. This is crucial because it is very important to actually know your customers and speak to them in the language they understand. That helps them connect better with the brand.”
What holds them back
While the above points have worked most of the times in favour of the regional brands, the same attitude can become hurdle to put them in the league of Dabur, Godrej or a Britannia. Experts feel that one of the biggest challenge that these regional marketers face when they wrestle at the national level is the muscle power in terms of investment and distribution that the MNCs and big Indian companies have. Apart from that, a complacent attitude and too much focus on short term gains is another factor that holds these brands back. “Most of these brands are too happy with their dominance in selected regions and take decades before they decide to expand.”
Another challenge for these regional brand champs is of talent. As Wagh Bakri’s Desai puts it, “When we are expanding it is very difficult for us to get the right kind of manpower. We have to ensure that person is in sync with our philosophy and thoughts. I personally meet and interview people before hiring them.”
Also, if brand names like Ghari or Wagh Bakri can work, if they decide to go national or international too is a question of debate. Desai of Wagh Bakri, however, disagrees. He narrates that way back in 1992, when the company was mulling to export its tea to international markets like the US, a common suggestion was to rebrand it, besides the obvious thought that tea wouldn’t work in a coffee drinking market. “We were advised to export tea in bulk and not under the brand name Wagh Bakri,” says Desai, adding, “But based on our confidence in the brand and our gut feeling, we decided to export the tea under our brand name only. And today, we are the largest selling brand across North America.” Currently, Wagh Bakri tea is exported in more than 25 international markets.
Lastly, an insight, which the Pitch team felt would become a hindrance, is the low trust, these companies have on media. Pitch team often found it challenging to get the companies’ reactions, for the lack of a PR team or an assigned spokesperson. The spokesperson most of the times is the promoter himself and he could be tough to get because of his busy schedule. While that could work to some extent to avoid negative media, it could also become a hindrance when the company might need to pass on a message.
(The story was featured in the July 2011 issue of Pitch)
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