Marico Industries, a well-known Indian fast moving consumer

goods (FMCG) company, offers unique and ethnic Indian

products. The company has a significant presence in the edible
oil market with two brands 'Saffola' and 'Sweekar'.
This case discusses Marico's brand building efforts for Saffola,
the positioning adopted to target health conscious consumers
and the company's continuous efforts in maintaining the
association between Saffola and heart care. It also deals with
Marico's innovations in product formulation (like the launch of
blended edible oils), product delivery and pricing strategy.

Issues
Contents:

Introduction
Background Note
Brand Building
Saffola Edible Oil
Saffola Salt
Looking Ahead
Exhibits

Page No.
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Keywords:
Indian fast moving consumer goods (FMCG), Marico Industries, Edible oils, Indian edible oil industry,
Saffola, Marketing, Brand management, Positioning, Communication, Packaging
Saffola provides us with an ideal platform to capitalize on the trend of increasing health consciousness by
offering a number of new food products that are able to cater to needs in this area.
- Arvind Mediratta, Erstwhile Head-Marketing, Marico Industries Ltd. 1
Introduction
Marico Industries, a well-known Indian Fast Moving Consumer Goods (FMCG) company, offered unique
and ethnic Indian products. Marico was famous for its 'Parachute' and 'Saffola' brands. In a survey carried
out by 'Brand Equity' of The Economic Times in early 2003, for India's 100 most trusted brands, Saffola
ranked 75th and Parachute ranked 29th. Marico's brands had shown resilience against competition and
maintained their market shares over the years. Marico had maintained a steady sales and profit growth
over the years with a consistent Return On Capital Employed (ROCE) of over 30%.

In a survey of 500 companies conducted

by 'Businessworld' in 2003, Marico ranked
16th in terms of ROCE while it ranked fourth
among FMCG companies. Marico's products
reached around 100 million Indians every
month through 17 lakh retail outlets, which were
serviced by its nation-wide distribution network
comprising six regional offices, 32 Carrying and
Forwarding Agents (CFAs) and 3600
distributors and stockists2. Marico entered two
new lines of business in the year 2002-03 - Skin
Care services through its 'Kaya Skin Clinics',
and Ayurvedic Skin Care Products business in
the US by its acquisition of a controlling stake in
'Sundari LLC', which owned the Sundari line of
skin care products.
Background Note
Marico's origin went back to 1862, when Kanji Morarji, set up a small trading business for spices sourced
from Kerala, in Bombay. In the early 20th century, he inducted his cousin Vallabhdas Vasanji into the
business. Together they exported pepper and ginger to Europe. The title of 'Mariwala' ('mari' meant
pepper in Gujarati, an Indian language) was attached to Vallabhdas Vasanji, owing to his expertise in
pepper trade.
Background Note Contd...
In 1948, Bombay Oil Industries Limited (BOIL)
was established, by the family with facilities for
coconut oil extraction, crushing and refining of
vegetable oils. BOIL set up four manufacturing
plants between 1947 and 1971- at Sewree for
coconut oil extraction, at Mazgaon for refining
vegetable oils, a chemical plant at Bhandup, all
the three in Bombay and a spice extraction
plant near Cochin, Kerala.
Vallabhdas had four sons Charandas, Jayasinh,
Hansraj and Kishore, all of whom were
engaged in the family business. The eldest,
Charandas was the Chairman and Managing
Director of BOIL while his younger brothers
were on the Boards of Directors of BOIL and its
subsidiaries.

In 1983, BOIL formed three divisions - the Consumer products division, Fatty acids and Chemicals
division and the Spice Extracts division. Harsh, the only son of Charandas, who joined the family business
in 1971, developed the Consumer Products business in BOIL and functioned as Executive Director from
1980 to 1990.
In the 1980s, the next generation of Mariwalas entered the business. In April 1990, BOIL was restructured
from a single corporate entity into a multi-corporate entity. Accordingly, five companies commenced
business by taking over the various businesses of BOIL.(Exhibit: I). The Consumer Products division was
hived off as a separate company and the newborn entity was named Marico Industries Limited (Marico).
Harsh took over as the Managing Director of Marico in
1990. The major operating divisions of Marico were
Nature Care, which had products like coconut oil, hair
oils and fabric care, Health Care with edible oils and
processed foods and International Business and
Distribution, to take care of overseas business. Marico
made its Initial Public Offer in March 1996.
Marico had its own manufacturing facilities at Goa,
Kanjikode (Kerala), Jalgaon (Maharashtra), Saswad
(Maharashtra), Pondicherry and Daman. These
facilities were supported by sub-contracting units.
Marico also planned to set up a manufacturing division
for its hair care products in Uttaranchal, in 2004...
Brand Building
In April 2003, Marico reorganized its business
and brought Nature Care, Health Care and the
International Business Group under a single
division - Consumer Products.
This profit center comprised the operations of
Marico Industries and Marico Bangladesh Ltd.
(MBL), a 100% subsidiary of Marico.
It manufactured and marketed ten
brands-'Parachute', 'Saffola', 'Hair & Care',
'Shanti', 'Sweekar', 'Sil', 'Mealmaker', 'Oil Of
Malabar', 'Mediker' and 'Revive'...
Saffola Edible Oil
Edible oils could broadly be categorized into vegetable refined oil, hydrogenated oil (vanaspati) and
bakery fats. The major edible oils produced and consumed in India were groundnut, sunflower, safflower,

soya, castor seed, cottonseed, mustard and sesame seed. While pure groundnut oil could be directly
consumed or refined to have higher purity, oils such as soya had to be refined to make them edible grade.
Groundnut oil was the most widely consumed oil in India. But groundnut was a monsoon crop (Kharif),
vulnerable to the vagaries of monsoon.
In 1986, the Government of India set up a Technology
Mission for Oil, to increase production of oil seeds and
oil and reduce dependence on imports.
Oil seed production witnessed a sharp increase from
around six million tonnes in the 1980s to around 22
million tonnes in the early 2000s.
The late 1980s marked a period of intensifying
competition in the refined edible oil category.
ITC - the Indian offspring of British American Tobacco
Company and National Dairy development Board
(NDDB) began extensive cultivation of oil seed crops...
Saffola Salt
The five million tonne Indian salt industry was
mainly an unorganised business. Branded salt
accounted for only a fifth of the market valued
at Rs. 500 crore.
Launched in 1983, Tata Salt held the Number
One position in the country, with a 37% share of
the branded-salt market and an 18% share of
the total salt market. Tata Salt was positioned
as a pure salt with the tagline 'Desh ka namak'.
The first competitive challenge to Tata Salt
came in the early 1990s with the launch of
DCW Home Products' Captain Cook...
Looking Ahead
Saffola had always focused on the heart. The brand's image had suffered a setback in the early 2000s
with the ambulance commercial, which portrayed that one had to rush to the hospital if he did not use
Saffola. Later, Marico changed Saffola's positioning, focusing on the health of the entire family with
its 'Sehat se jeena hai' campaign.
Since the overall health positioning did not yield
results, Saffola was moved from the family health

positioning, once again to the original heart care

positioning in 2004. In February 2004, Marico
launched a fresh advertising campaign for Saffola,
after a gap of two years.
The campaign by Grey Worldwide had a new
tagline, Aaj se jeene ka andaaz sudhariye (Improve
your lifestyle today), urging every Indian to take up a
healthy lifestyle.
The TV Commercial focused on a little girl approaching
various groups of people to pass on the message of
heart care. The new campaign was based on research
done by SHHF...
Exhibits
Exhibits I: BOIL in 1990
Exhibits II: Marico: A Comparison in 1991 and in 2003
Exhibits III: An Overview of Marico's Brands -2003
Exhibits IV: TVC for Saffola
Exhibits V: TVC for Saffola Nutriblend