Marketing

‘Consumer insight, the biggest source of competitive advantage for any FMCG firm'

Updated on: Jul 13, 2011
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Marketmen should conduct their own market research rather than depend on third-party studies: Saugata Gupta

But aren't these benefits being delivered by shampoos?

Let me tell you, a rinse-off product won't offer as much benefit as a leave-on product. Ultimately, consumers will take a call. People in India believe a rinse-off product does not nourish hair enough.

Is that perception or is that fact?

Unless it penetrates your scalp, how will it nourish? It's been launched in the TN and Kerala markets and is doing well.

What is your biggest source of competitive advantage?

To me the biggest source of competitive advantage for any FMCG firm is how well it knows its consumers. Consumer insight as a practice is essential – and I am not saying third-party research; personally, right from the top-down, how well do you know your customers; and the ability to distil those insights to a product or communication, to me that is the biggest source of advantage for a marketing company. For that to happen empathy is required, without empathy it is difficult.

So, where does Marico gets it consumer insights?

We insist that a lot of ‘insighting' is done in-house, not by a market research agency. Any brand manager who joins, he needs to talk to 50 consumers before even getting into a brand. One of the other things we are facing is understanding the new-age consumer. Today, a lot of ad viewing is on YouTube, they are not using TV to watch ads. If I have to drive a certain behavioural change in that segment and rely on traditional mass media, I may be going up the wrong lane. Similar for talent, for me if I have to be an employer of choice among Gen Y, we need to be in sync with their aspirations, their approach to sustainability, work-life balance as opposed to people like us. You need to look at your brand reputation in the digital world. That's why we have been pushing for our people to have consumer connect.

You say Marico will build its core / power brands before going into other categories and new brands. But, isn't there some merit in offering the trade a sumptuous product portfolio?

I agree with you, but you need to go about it in a methodical way, as long as I maintain a good compliant growth it's fine. For us a good compliant growth is 20 per cent-plus. As I said, the share of mind, we have done through scientific studies, you can't handle too many brands if you want execution right, then what happens is … nurturing a new category versus making a brand launch is different. You have got to persist with it. If I launch a new product every three weeks, the sales guy will lose focus. In today's market of competitiveness, clutter, you need to nurture a product. Otherwise, what will happen is there will be a difference in what gets planned in Mumbai and what gets executed a 1,000 km away. There is a limit to multi-tasking. At the end of the day we know we need to increase our new product portfolio, but we would rather go for focus on a few and get critical mass rather than a slew of new products with less than critical mass.

What are you doing to measure the effectiveness of your marketing spends?

We want to invest in analytics in a big way, so, on promotion and trade spends — we know the law of marginal utility operates there — and we have kick-started a process where we want to ensure that the entire area of promos and spends and in media processes, there is efficiency of spends. Also, on driving accountability on marketing spends, applying more science to it. Volatility is here to stay, and so are high input costs and competition. Therefore, the ability to manage profitability through pricing is going to be limited. There has to be more focus on cost efficiencies and scale. Also by focus you gain a lot of efficiencies. By focusing on products and the spends on it, you also rationalise.

Do you believe there is trend among urban consumers towards premiumisation of products?

Yes, people are willing to experiment and what has happened too is a lot of people travel abroad and there is exposure to global media. There are certain categories where people can show off, mobiles, clothes and so on, and there is premiumisation there rather than in soaps and stuff. One would spend on things which are outwardly visible. That is the reason why there is commoditisation in soaps, detergents, and so on. People are willing to spend money to look good and feel young and that's our philosophy as well behind beauty and wellness.

Published on July 20, 2011

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