Fastrack – the maverick success

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During late 90s, the economy of India was growing  due to globalisation, and  many companies were finding India as a lucrative call center outsourcing hub. This had resulted in a employment surge of fresh graduates and the pay packages of these young employees had started doubling at annual rate. Suddenly the young India was independent [...]

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Dabur – Celebrate Life

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Dabur India Limited is the fourth largest FMCG Company in India and Dabur had a turnover of approximately US$ 750 Million (Rs. 3390.9 Crore – FY 09-10) & Market Capitalisation of over US$ 3.5 Billion (Rs 15500 Crore), with brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. The company was started by a [...]

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Colgate (Dental Cream)

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Colgate has been has been ruling the Rs 3500 crore oral care segment for long with a market share of over 50% out of which CDC alone has more than 35% of market share. Read more on the flagship brand of Colgate – Colgate Dental Cream and its market in India.

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Fastrack – the maverick success

Posted by Admin on August 6th, 2011
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During late 90s, the economy of India was growing  due to globalisation, and  many companies were finding India as a lucrative call center outsourcing hub. This had resulted in a employment surge of fresh graduates and the pay packages of these young employees had started doubling at annual rate. Suddenly the young India was independent and more individual. The fact that call centers were initially opened near metros, only added to the pace of acceptance of western culture. It had become important to look cool and during same time Titan started experimenting with its portfolio (1998 to be precise). They launched a sub brand to Titan called Fastrack which was targeted at the youth segment (15-25). The brand was promoted with the slogan “Cool Watches from Titan “. Also it was the time that Timex and Titan parted ways. So the brand came in as a defense, targeting young consumers who were moving towards the competitor Timex.

Fastrack had a good start . during the first year, the brand clocked a turnover of Rs 15 crore. The good run continued till 2001-2002 and the brand was worth Rs 25 crore at that period. But the sales stagnated. Although the brand appealed to the youngsters, price was significant dampener. The brand found that the target group which consisted of college students could not afford this brand. ( source : Business Standard)

During 2003-04, the brand went in for a repositioning exercise targeting executive segment as well as casual watch segment. It was catastrophic as the  brand sales slid by another Rs 2 crore. The change in positioning had made the image ambiguous. The consumers were not willing to pay Rs 1200-2700 for a watch that did not have the executive image.

It was in 2004 that Fastrack launched its range of sunglasses and tried to establish itself as a brand in itself. The move was made after a consumer research which had shown that mobiles/deo/sports shoes and sunglasses are popular accessories in the purchase list of youngsters. In 2005, the brand went for another repositioning exercise with a new logo and new positioning. The brand adopted the famous break-away positioning of Swatch. The brand decided to target the youngsters again and realized
 that it had to make the products within financial reach of its customers. The brand discarded the steely look of the watches and looked at a mix of plastic and steel.Now the brand was able to reduce the price range to as low as Rs 500.

The brand then invested a lot of its effort in coming up with trendy designs for teenagers and took the help of advertising to change the perception of watches as a functional tool to a fashion accessory. The brand launched a campaign with the slogan ” How many you have “. Initially targeting the slogan at accessories, the brand soon added naughtiness to its campaigns realizing the excitement or kick it added to its main customer base. The campaign , the positioning and the price was a great hit . The brand sales zoomed to Rs 35 crore. The sunglasses also contributed significantly to this sales boost.

As the Marketing Practice blog notes, the brand roped in the youth icon John Abraham as the brand ambassador as the celebrity fitted well with the brand. Taking a cue from the fact that most of the TG for Fastrack owned a bike, Fastrack launched a biker’s collection which again is a classic example of consumer-centric product innovation.

The brand had come up with some really successful campaigns like – Move On, Yes Sir, F*****ck!

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Dabur – Celebrate Life

Posted by Admin on August 15th, 2010
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Dabur India Limited is the fourth largest FMCG Company in India and Dabur had a turnover of approximately US$ 750 Million (Rs. 3390.9 Crore – FY 09-10) & Market Capitalisation of over US$ 3.5 Billion (Rs 15500 Crore), with brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. The company was started by a doctor Dr. S.K. Burman in 1884. The brand name Dabur is derived from the words ‘Da’ for ‘Daktar’ or ‘Doctor’ and ‘bur’ from Burman. From those humble beginnings, the company has grown into India’s leading manufacturer of consumer healthcare, personal care and food products. Over its 125 years of existence, the Dabur brand has stood for goodness through a natural lifestyle. An umbrella name for a variety of products, ranging from hair care to honey, Dabur has consistently ranked among India’s top brands. Its brands are built on the foundation of trust that a Dabur offering will never cause anyone slightest of harm. The trust levels that this brand enjoys are phenomenally high.

In early 1900s the next generation of Burmans take a conscious decision to enter the Ayurvedic medicines market and that led the commercial start of Dabur. They set up a R&D center which paved way for the growth. In 1940 Dabur  diversified into personal care products with the launch of its Dabur Amla Hair Oil which was a hit with Indian consumers. In 1949 it launched Dabur Chyawanprash and by 1970 launched Dabur Lal Dant Manjan. Due to high growth from all these brands, Dabur shifted its base to Delhi in 1972.

Hajmola was launched in 1978 and the candy version came in 1989 (another brand Swad had created the new market of digestive candies at that time) and soon became a huge success. In 1996 it entered processed foods market with Real Fruit Juice. The brand went on to become the biggest success of the company and in 1997  the Foods division was created, comprising of Real Fruit Juice and Hommade cooking pastes to form the core of this division’s product portfolio.

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Colgate (Dental Cream)

Posted by Admin on August 15th, 2010
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Colgate came into India in 1937. Colgate’s flagship product – Colgate Dental Cream was also launched in same year while Colgate tooth powder and toothbrushes were introduced in 1949 in Indian market. Palmolive products (soap and shaving cream) were introduced in 1950s. Other famous products launched by the company include Halo shampoos (1951) and Charmis cream (1952).

Colgate Dental Cream (CDC)

Colgate has been has been ruling the Rs 3500 crore oral care segment for long with a market share of over 50% out of which CDC alone has more than 35% of market share. The toothpaste segment can be divided in to three segments : white, Gel and herbal based on the product characteristic.

When Colgate was enjoying its leadership position in the market with CDC, HLL successfully entered the market by opening a new segment with Close-up gel in 1970 which had 43% price premium over CDC. After some time Pepsodent was launched in India creating a dual attack on Colgtae. Colgate responded with the launch of Colgate fresh energy gel and the famous campaign ” TALK TO ME” starring the charming VJ Purab and then Aishwarya Rai that stole quite a lot of the gel category from HLL . Later when Max Fresh with “cooling crystals” was launched, the advertisements were local oriented with famous local actors, but common theme and song. same strategy has been used in many other adverts of Colgate now.
In 1990s and 2000s many regional  brands like Ajanta , Babool arrived which quickly took some market away from Colgate due to their low price, high retailer margin and decent value for money. Colgate and HLL responded to this threat by coming out with low priced flanking brands. Colgate had already acquired Cibaca, it launched Cibaca as low priced Cibaca to counter the regional brand while HLL had Aim to counter it. 2003 saw huge marketing spend on Cibaca by Colgate. The current figures show that the regional brands are finding it difficult to sustain the market share.
Colgate’ s flagship brand CDC had consistantly positioned itself in the germ fighting platform. It had the famous ” suraksha chakra ” platform from where it had built its brand to this level. Below is the vintage ad of Colgate where it stressed on the Suraksha Chakra by roping in Baby Guddu, a popular TV character at that time.
In advertising, Colgate has been using associations with Dentists strongly. In late 1990s when Pepsodent started gaining strong market share then Colgate did a research on the brand perception. Supposedly the results came out that people were relating more to the family oriented ads of Pepsodent and saw the dentists as externals. To counter this, Colgate changed the advertisements to show that the dentist was none other than the family member itself. With time, low sales focus by HLL and strong sales and marketing push by Colgate saw it strengthening its position further in Indian Oral Care market.
Today Colgate has already launched a  herbal version, Max Fresh with cooling crystals, and the most advanced Colgate Total in Indian market. The market has gone intense due to new entries like Anchor and Dabur. Apart from more penetration in rural market, the urban lifestyle has also changed. Hence Colgate has brought in its mouthwash range, high end toothbrushes and tooth floss brands in India.
As per its 2009 numbers, Colgate has increased its leadership position to 52.4% volume market share (Jan-Dec 09) in the toothpaste category. The flagship brands “Colgate Dental Cream”, “Active Salt”, and “Cibaca” continue to contribute to this consistent growth. In the toothbrush category, volume market share has increased to 39.5% (Jan-Dec 09) and in the toothpowder category to 48.4% (Jan-Dec 09).
Note: The data has been taken from Colgate website and its Annual reports
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A look at Indian FMCG sector

Posted by Admin on August 8th, 2010
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The Indian FMCG sector with a market size of over US$13.1 billion is the fourth largest sector in the economy. A well-established distribution network, intense competition between the organized and unorganized segments characterize the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise from around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then.

Indian companies have their presence across the value chain of FMCG sector, right from the supply of raw materials to packaged goods in the food-processing sector. This brings India a more cost competitive advantage. For example, Amul supplies milk as well as dairy products like cheese, butter, etc

According to a McKinsey Global Institute (MGI) study titled ‘Bird of Gold’: The Rise of India’s Consumer Market, the total consumption in India is likely to quadruple making India the fifth largest consumer market by 2025. Urban India will account for nearly 68 per cent of consumption growth while rural consumption will grow by 32 per cent by 2025.

India ranks first in the Nielsen Global Consumer Confidence survey released in May 2010. “India is one of the fastest growing markets in the world and the current consumer belief that recession would soon be a thing of the past has filled Indians with confidence,” said Piyush Mathur, Managing Director, South Asia, The Nielsen Co. With 127 index points, India ranked number one in the recent round of the survey, followed by Indonesia (116) and Norway (115).

According to an Ernst & Young transactions report released in May 2010, the Indian consumer sector is attracting more interest from both private equity (PE) and mergers and acquisitions (M&A).

Sources:

  1. http://www.naukrihub.com/india/fmcg/scope/
  2. http://www.ibef.org/economy/consumermarket.aspx
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