Rural Marketing - MARICO

Index
Sr.No Topic . 1 Introduction
2 3 4 5 6 7 8 9 10 11 12 13 History Structure Products of Marico Rural Marketing Strategies Maricos Distribution Network IT in Sales Rural Consumer Behaviour Brand Building Competitors Growth Marico Past & Present Achievements

Page No.
1 2 2 3 7 8 8 9 9 10 10 11 12

Rural Marketing - MARICO

MARICO
Introduction:
Marico is a leading Indian Group in Consumer Products and Services in the Global Beauty and Wellness space. Maricos Products and Services in Hair care, Skin Care and Healthy Foods generated a Turnover of about Rs.15.6 billion during 2006-07. Maricos brands and their extensions occupy leadership positions with significant market shares in most categories- Coconut Oil, Hair Oils, Post Wash Hair Care, Anti-lice Treatment, Premium Refined Edible Oils, niche Fabric Care etc. A leading Indian group operating in : Consumer Products Aesthetic Services Global Ayurvedics business

Marico's own manufacturing facilities are located at Goa, Kanjikode, Jalgaon, Saswad, Pondicherry, Dehradun and Daman Supported by subcontracting units. In Bangladesh, Marico operates through Marico Bangladesh Limited, a wholly owned subsidiary Manufacturing facility at Mouchak, near Gazipur.

Registered office:
Marico Ltd.

"Rang Sharda", Krishnachandra Marg, Bandra Reclamation, Bandra (West), Mumbai - 400050, India. Email: milinvrel@maricoindia.net; Website: www.maricoindia.com other related websites are: www.saffolalife.com, www.kayaclinic.com, www.sundari.com,

Rural Marketing - MARICO

www.parachuteadvansed.com, and www.innovation4india.com

History of Marico:
1996 1990 Marico makes its maiden public issue. Restructuring several companies Consumer Products Division becomes Marico. Divisionalisation Consumer Products Division Fatty acids and Chemicals Division Spice Extracts Division Birth of The Bombay Oil Industries Copra trading, crushing and refining of vegetable oils A young man Kanji set up a modest trade in spices Moorarji

1983

1948

1857

Structure of Marico:
A Flat Structure:
Marico organization is flat with only five levels of reporting between the Managing Director and an operator on the shop floor. They believe that a flat structure helps them in being more responsive to the environment while providing enriched roles for the members. Their structure defines clear roles and supporting relationships but is by no means rigid. Keeping in mind the fast and ever changing business environs, Marico's structure is dynamic and constantly evolving.

Rural Marketing - MARICO

Products & Subsidiaries of Marico:

Kaya Skin Care Limited:
'Kaya' was an entrepreneurial leap of faith marking Marico's entry into skin care solutions business. It was a true reflection of uncommon sense for a company in hair care products to move, instead of merely logical product extensions, straight into skin care services. Kaya Skin Care Ltd. is now recognized as a pioneer in skin care and has become a benchmark for efficacy and client care. 97% of Kaya's clientele has rated the service between good and excellent.

Sundari LLC:
In Feb 2003, Marico acquired a controlling equity interest in Sundari LLC, the owner of the SUNDARI line of luxury Ayurvedic skin care products. This entry in the Global Ayurvedics segment represents Marico's first acquisition in a developed country and its entry into the skin care products market. Marico holds 75.5% of the equity of Sundari LLC. Shantih LLC, which is owned by the founders of SUNDARI and a group of private investors, owns the balance. Sundari LLC has its headquarters in the city of New York.

Parachute:
Parachute is premium edible grade oil, a market leader in its category. Synonymous with pure coconut oil in the market, Parachute is positioned on the platform of purity. In fact over time it has become the gold standard for purity. From a loosely available commodity to a path-breaking brand, Parachute pioneered the switch from coconut oil sold in tins to plastic. Parachute is also available in pouch packs, to service the rural sectors, increasing penetration. While the positioning of Parachute has always been on purity, the communication has evolved over time to appeal to different consumer sets. In fact with the recent commercial " Badalte Zamane ka naya Parachute", Parachute has appealed to the hearts of millions of young consumers. By changing its pack shape to one that is sleek, modern and aesthetic, Parachute has kept up with the demands of modern, young India and proved its endeavor to always remain relevant. Parachute has thus ensured that it enjoys tremendous equity and trust with every passing generation. Parachute's primary target has been women of all ages. The brand has a huge loyalty, not only in the urban sections of India but also in the rural sector. Parachute has introduced products like Parachute Jasmine, Parachute Advanced, Parachute After Shower Hair cream.

Rural Marketing - MARICO

Saffola:
Saffola is a forty year-old brand, widely recognized by consumers to be "Good for Heart". Saffola's target audience comprises health-conscious consumers. Saffola, positioned on the 'good for Heart' platform was small in volume terms, till 1993, when a series of hard-hitting ads took the brand to new heights. Awarded the 'Brand of the Year' in 1993 and again recently in 2005 by The Advertising Club of Bombay, the brand has continuously modernized and upgraded itself. A new aesthetically defined shape was launched in 1998 ensuring glug-free pouring. The brand was repositioned as 'Heart of a Healthy Family' and extended to a value added edible oil and salt. Saffola also introduced Dial A Dietician service in 2004. Saffola has introduced different variants such as Saffola Gold, Saffola Tasty Blend, Saffola Kardi and Saffola Salt.

Mediker:
Mediker, a three-decade-old brand was acquired by Marico from Procter & Gamble, in July 1999, in the shampoo format. Mediker is a brand for treating lice and a market leader in its category. Mediker today has three products in its portfolio: Mediker Anti Lice treatment, Mediker Anti Lice Oil and Mediker Plus Anti Lice Oil. Lice problem is a very common problem among girl children in the age group of 5 - 12 years. A child can go through physical, mental and psychological problems due to lice. Problems like anemia, pediculosis, lack of concentration, bleeding through excessive scratching, rejection, social embarrassment etc. can add to the child's growing up pains. Mediker is an easy painless solution, which helps the mother tackle this problem. Mediker's primary target has been mothers of school-going children. The brand has caught on, not just in the urban sections of India but also the rural.

Silk-n-Shine:
Hair & Care's Silk-n-Shine is a post wash hair conditioner from Marico. Silk-n-Shine is a hair potion with the goodness of fruit-vitamins that works naturally on tangled hair with a unique 3-step action, leaving it soft and silky. Silk-n-Shine is borne out of a real need of today's women. Silk-n-Shine primary target is female between 18-34 yrs, SEC AB. The brand is prevalent in the urban sections of India but with the launch of single use sachet pack, rural market is also being exploited.

Revive:
Revive is an Instant Cold Water Starch, the ONLY product of its kind. Formulated with the latest International technology to give clothes uniform, strong starching, it is uniquely positioned on the platform of making your 'Clothes Look Like New". The key consumers for Revive are housewives who regularly starch their clothes. Most of them are from the

Rural Marketing - MARICO urban part of the country with a middle or upper middle class skew. Revive created a market for Instant starch, when there was none. It continues to be the only product of its kind. Revive is not just innovative but also consistently delivers superior performance. The communication has always been endearing so as to help the brand gain new consumers over the years .

Hair & Care:

Maricos Hair & Care, pleasantly perfumed non-sticky hair oil is a strong brand in its category. It is positioned on the platform of being the lightest perfumed hair oil offering both Style & Nourishment. Hair & Care is upto 50% non sticky than any other hair oil & is enriched with Herbal Proteins, which nourishes hair with their natural goodness. Herbal Proteins are extracted from Neem & Tulsi, a process patented by Marico. Launched in 1990, in the non-sticky hair oil category, Marico's Hair & Care is consistently maintaining a steady market share. Marico's Hair & Care has always appealed to both men and women of all age groups, but the primary user set has always been those in the younger age group. The brand is popular among both the urban and rural sections of India.

Sweekar:
Sweekar is a national brand comprising of Refined Sunflower Oil. Sweekar has become synonymous with good quality light edible oil. It is positioned as a light and healthy cooking medium. The Sunflower category emerged in 1988 - 89 and Sweekar quickly became one of the leading brands in this category. The positioning of Sweekar has evolved over time- from the initial stand of lightness and 88% saturated, fat-free - to that of "Achcha Khana, hansi khushi ka Khazana" - to that of "Aapke haath mumkin har baat". It continues to be one of the leading brands among refined oils in the consumer packs market. Sweekar's primary target has been housewives (age 25 +). The brand has caught on as a product that the best in the market.

Sil:
Sil is a processed food brand. It has a wide range of exciting products such as Jams, Sauces, Baked Beans, Chinese Vinegar, Sweet Corn Soup and Mayonnaise. Sil stands for products that offer "Lip-Smakin' Goodness". Sil started as a processed fruit and continental food brand with a variety of foods in cans and bottles. The range was rationalized after Marico started managing the brand in 1993. Today, Sil is the No.2 brand in the Jams category and a leading player in all its other processed food segments. Sil has a range of products, consumed by people of all ages. From jam to chilli sauces, the brand has caught on not just in the metros but also in smaller urban towns.

Oil of Malabar:
Oil of Malabar is premium quality edible grade coconut oil. This brand is one of Marico's recent acquisitions, having been bought in November 1999. Oil of Malabar, as the name 6

Rural Marketing - MARICO suggests, is positioned on purity - as the oil from the land of coconuts. Launched in 1992, the brand has grown in stature to become a national brand. Today, it sells in over fifteen states across India , with a strong rural presence. Ever since its launch, the brand has been known for its quality and was amongst the earliest to launch flexi/pouch packs to tap the vast rural market. Oil of Malabar's consumer franchise spans women of all age groups. As mentioned earlier, the brand has a strong rural presence. This brand's success hinges on its two strengths - its quality and Marico's distribution strength across urban and rural India.

Shanti Badam Amla:

Launched in April 2005, Shanti Amla marks Marico's successful entry in the Amla+ Hair Oil market. It is launched on the platform of "Goodness of Badam with Amla". In the Amla category, Marico saw the opportunity of a product proposition that offers "goodness of Amla at an amazingly affordable price". Shanti Amla was first launched in U.P, which is the largest Amla oil market, and then rolled out nationally. Our primary consumers are Amla hair oil users who are looking at a good Amla oil with value addition at an affordable price.

Rural Marketing - MARICO

Rural Marketing Strategies:

Product Strategies:
Product is the most importsnt element of marketing mix and product strategies used by Marico in rural markets are as follows: a) Small unit packaging: It has been used for msany consumer products.eg. Parachute brand of oil is available in 50 gm and 100 gm bottles. b) Designing products: Marico has come out with new products and also is promoting existing products to suit conditions in rural areas. eg. Sweekar sunflower edible oil is available in bottles of half litre. c) Branding: A Brand name not only represents a product but alsio conveys the quality of a product. The marketers of a Marico have come up with appropriate brand name, which can be easily remembered by rural consumers. eg. Mediker which is used for solving lice problem which is a very common problem among girl children in the age group of 5 - 12 years in rural areas.

Pricing Strategies:
The marketing manager has formulated an appropriate pricing strategy to achieve the marketing objectives. Low price: Rural consumer is price sensitive because of his/her relatively low level of income. Eg: Parachute oil small sachet is available at Rs 2.

Promotional Strategies:
Special promotional schemes such as new product introduction schemes festivals offer by way of special discounts, etc is implemented by Marico. a) Marico has chosen various medias for promoting their products in rural areas such as Television, Radio and Magazines. b) Certain other medias which has more impact on the rural consumer such as Publicity vans and rural entertainment programs.

Place (Distribution):
Considering low income of rural consumers, low density of population, poor conditions of roads, and uneconomical services to the villages has led Marico to choose a selective approach for distribution. Such as Direct sales to consumers, Manufacturer Wholesaler Retailer Consumers.

Rural Marketing - MARICO

Marico's Distribution Network:

Marico's distribution width and penetration is acknowledged as one of the best in the industry and is a leverage able strength. Every month, 56 million consumer packs are sold to about 1.8 million households through 1.6 million retail outlets spread across the country. Marico's distribution network covers almost every Indian town with a population of over 20,000.

Distribution Alliance:
Maricos distribution strength has been recognised by Indo Nissin Foods Ltd. through their association for the distribution of Top Ramen products on a national basis.

Rural Sales & Distribution:

Marico's parallel rural sales and distribution network ranks among the top three in the industry and contributes 24% to the company's topline. Rural market contributes to about 30% of all India sales. Maricos infrastructure comprises 882 direct distributors, 153 super distributors, catering to 2393 small stockists and 4523 van markets.

A dedicated team of Territory Sales Executives and Pilot Sales Representatives distribute Marico's as well as alliance brands through this vibrant network.

Sales Capacity:
Marico have made significant progress in the areas that enhance sales capacity Quality of distributors Quality and number of the distributor field force. Up gradation in the role of the company's front-line sales force.

Information Technology (IT) in Sales:

Marico has been making investments in IT to ensure:

Supply Chain efficiencies Availability of the SKU at the right distributor point, at the right time in right quantities.

Rural Marketing - MARICO Timely availability and reliability of Sales MIS, which help in taking prudent decisions on a real time basis.

Rural Consumer Behaviour:

The consumer has more choices and their needs and preferences are changing much faster. Therefore, marketers have to anticipate changing consumer trends and need gaps more proactively than before and provide differentiated products that enhance the value equation and not just the price. The other key change is in the area of communication and media. Compared to mass marketing in the past, today you need holistic 360 degree marketingboth above and below-the-line to touch the consumer. With increased fragmentation, brand launches are expensive although there are options for niche brands to co-exist. The third big change is in the market segmentation. Earlier marketers used to classify India into rural and urban. I think the segments are slightly different now. Bottom of pyramid opportunities exist both in urban and rural India. Similarly, there is a market for top-end products amongst the rural rich. Thus the segmentation is more class and mass. To know the buyers motives and buying habits, to understand not only his needs and desires but also his fancies, foibles and eccentricities, has throughout been a fundamental necessity for the marketing man. But there is no unified, well defined, tested and universally established theory of buyer behavior established. All researches and studies have contributed to a vast assortment of information on buyer behavior. Buyer is a highly complex entity and his needs and desires are innumerable and they vary from security needs to aesthetic needs. The buyer has his own ways and means of meetings these needs. The buyer is exposed today to a world of information about new products, new services, and new uses for existing products, new ideas and new styles. Generally, he accepts that information and retains it only what he would normally like to perceive and retain. Sometimes the decisions are taken on the spot while sometime he may derive after a long search, after evaluating the various alternatives available and reassuring him with the experience of those who have already purchased the product. Buyer behavior is a specific aspect of general human behavior and it is only natural that it is as complex as general human behavior.

Brand Building:
Brand building has paid rich dividends to Marico Industries. The company derives nearly 50 per cent of its income from the sale of coconut oil. It was not satisfied with merely selling its coconut oil in loose at the retail level. It branded its coconut oil with the name `Parachute' and carefully nurtured and built its brand. Brand building is like nurturing a child. You don't expect the child to mature and pay you back

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Rural Marketing - MARICO immediately. It takes a lot of time to do so and even a single wrong step may bounce back. Similarly brand building involves waiting patiently for years and only in the long run you start reaping your dividend.

Competitors:
Competition is threatening the company. Multinationals like Hindustan Lever have entered the fray. Dabur India is also competing in the same products range. In the edible oils segment, its competitor ITC Agrotech has become stronger after its association with the American company Con Agra. Parle's Ramesh Chauhan carefully nurtured his brand and built it to great heights till the entry of Coke in India. Then he tamely surrendered. The Kwality brand in ice creams became very popular and now it is in the hands of the multi-national Hindustan Lever. One of the utmost requirements for a local company to face multinational competition is possessing high margins which will act as a cushion in case the company is forced to lower the prices of its products.

Mergers:
The promoters of the company have recently approved the merger of a group company KFL with Marico. Marico will now own SIL brand also. Besides, the merger will entail a tax break of Rs 8.5 crore to the company which will help in substantially increasing the net profit of the company in the current year. Marico has recently relaunched its bread-and-butter brand Parachute with a new pack design. This is a risk, which the promoters are willingly taken in order to push the sale of the product further. Research indicates that Parachute is mostly used by old clients and not by youngsters. This does not mean that youngsters are not in favour of the brand. Youngsters as a whole generally do not favour using coconut oil for hair grooming. They prefer perfumed hair oils, hair tonics, castor oils etc.

Growth:
The future for the company lies in volume growth. The company seems to have realized it well and that is why it has planned to build a new factory in Goa. Product expansion in the form of mustard oil in north India and cottonseed oil in south India is also a good move by the company. If the company also concentrates on rural marketing and build up an effective network, its base will be further strengthened. Rural India is cash rich now because of abundant agricultural production aided by normal monsoons for the ninth time in succession. Rural families have sufficient buying power but they do not know how to spend money because there is both a lack of awareness of brands as well as an acute scarcity of branded products in rural shops. A sustained volume growth is possible for Marico in the coming years against stiff competition only if it focuses on rural areas.

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Rural Marketing - MARICO

Marico Yesterday and Today

Marico Now and Then : To understand how far Marico has come, all you need to do is take a look at what Marico inherited.
MARICO YESTERDAY (1991) A sales turnover of Rs. 1059 million Profit after tax of Rs. 24 million Net worth of Rs.33 million Two products with brand names - Parachute and Saffola Two factories - a coconut oil plant at Sewree, Bombay and a safflower refining plant (which has been shut down since) at Mazgaon, Bombay. Around 400 employees representing the blue collared work force, staff and managers. MARICO TODAY (2005) A sales turnover of Rs. 10128 million Profit after tax of Rs. 701 million Net worth of Rs.2169 million 12 Brands, 3 of which are Market Leaders 7 Factories and sub contract facilities A total strength of around 1000 members

Achievements of Marico Ltd:

Marico has also won various other Awards such as the following: One of India's 10 best marketers (Business Today September 2006). Brand Leadership Award at the India Brand Summit 2006 (September 2006).

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Rural Marketing - MARICO

Kaya - Retailer of The Year Award (for the 2nd consecutive Year) at India Retail Summit 2006.

Silver Effie (2006) for Saffola. The Gulf Marketing Review Award in the Middle East 2006.

Every month, over 70 Million consumer packs from Marico reach approximately 130 Million consumers in about 23 Million households, through a widespread distribution network of more than 2.5 Million outlets in India and overseas.

Consumer Behavior:
The consumer has more choices and their needs and preferences are changing much faster. Therefore, marketers have to anticipate changing consumer trends and need gaps more proactively than before and provide differentiated products that enhance the value equation and not just the price. The other key change is in the area of communication and media. Compared to mass marketing in the past, today you need holistic 360 degree marketingboth above and below-the-line to touch the consumer. With increased fragmentation, brand launches are expensive although there are options for niche brands to co-exist. The third big change is in the market segmentation. Earlier marketers used to classify India into rural and urban. I think the segments are slightly different now. Bottom of pyramid opportunities exist both in urban and rural India. Similarly, there is a market for top-end products amongst the rural rich. Thus the segmentation is more class and mass. To know the buyers motives and buying habits, to understand not only his needs and desires but also his fancies, foibles and eccentricities, has throughout been a fundamental necessity for the marketing man. But there is no unified, well defined, tested and universally established theory of buyer behavior established. All researches and studies have contributed to a vast assortment of information on buyer behavior. Buyer is a highly complex entity and his needs and desires are innumerable and they vary from security needs to aesthetic needs. The buyer has his own ways and means of meetings these needs. The buyer is exposed today to a world of information about new products, new services, and new uses for existing products, new ideas and new styles. Generally, he accepts that information and retains it only what he would normally like to perceive and retain. Sometimes the decisions are taken on the spot while sometime he may derive after a long search, after evaluating the various alternatives available and reassuring him with the experience of those who have already purchased the product. Buyer behavior is a specific aspect of general human behavior and it is only natural that it is as complex as general human behavior.

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