Marico mulls multiple pricing for sub-brands of Saffola

Struggling to increase the volumes and market share of its premium edible oil brand Saffola, Marico has decided to introduce two different sets of pricing based on the variants of the brand across regions.

“Just like there are many Indias, there can be different prices for Saffola across different regions. We have taken a call to have selective pricing for Saffola as there cannot be a one-size-fits-all pricing strategy for the brand,” said Marico MD and CEO Saugata Gupta.

The Saffola blended oil franchise grew just 4 per cent during the first quarter. The company attributes it to the fact that it is priced much higher than regular “base” oils like sunflower and soya, making it difficult to garner significant volumes.

“Just like other FMCG categories like tea and detergents have different pricing across the same brand under different sub-brands, there could be such possibilities in edible oil as well,” added Gupta.

With more attractive price points and SKUs (stock keeping units) across its franchise with brands like Saffola Gold and Saffola Total, Marico will be tinkering with prices across the product’s 500 ml, 1 litre and 1.5 litre packs, depending on the region where it wants to enhance sales and market share.

“We would not like to get specific with our pricing strategies due to competition, but there would be selective pricing with two sets of prices for the brand to help consumers upgrade,” he added.

While pricing is a tough point when it comes to bringing in more consumers into the Saffola fold, the product has also been facing the brunt at the top end with imported olive oil brands.

Despite several warnings from the Advertising Standards Council of India, it continues to compare the virtues of its own Saffola Total with those of olive oil in commercials.

“While we are trying to get consumers to upgrade from the base oil to Saffola, at the top end we have faced consumer exits into the olive oil category.

“We want to establish our product superiority — as we are losing out to olive oil — by having different prototypes across regions and channels with the help of data analytics,” admitted Gupta.

According to Kaustubh Pawaskar, Research Analyst at Sharekhan, “Different pricing strategy across the Saffola franchise should work for Marico and the pricing gap with other premium edible oils should reduce over the next few quarters.

“Even urban consumer sentiments are expected to improve in the future, leading to Saffola being back on track.”

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