Bajaj Corp’s portfolio includes offerings like Brahmi Amla and Almond Drops hair oil that are almost legacy brands. Sandeep Verma, President, Bajaj Corp, describes how the brand has worked on reinventing itself time and again to be relevant to changing market preferences

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BUILDING BRANDS WITH PURPOSE

Bajaj Corp’s portfolio includes offerings like Brahmi Amla and Almond Drops hair oil that are almost legacy brands. Sandeep Verma, President, Bajaj Corp, describes how the brand has worked on reinventing itself time and again to be relevant to changing market preferences

12 Dec, 2017 by admin

Bajaj Corp’s portfolio includes offerings like Brahmi Amla and Almond Drops hair oil that are almost legacy brands. Sandeep Verma, President, Bajaj Corp, describes how the brand has worked on reinventing itself time and again to be relevant to changing market preferences

 

BY SAMARPITA BANERJEE

Q] Tell us about Bajaj Corp’s recent attempt at getting a Guinness World Record...
We have always believed in creating brands with a purpose and the purpose here was to get consumers to believe that well-oiled hair is wellnourished hair. It’s futile to have a purpose if people don’t engage with it. But to communicate this to people and engage them with our purpose, we needed to build some virality. The Guinness World Record as an idea had these viral veins and would help us engage better with consumers and that’s how the idea came about. The initiative has been spoken about a lot. We hit almost 1.2 crore impressions on Twitter and had around 2,000 organic tweets. We didn’t promote it in any way, just used some influencer marketing. Similarly we had a FB live video and it did extremely well for us.

Q] What will be the next phase of the campaign?
Our intent would be to keep the buzz alive and the most effective medium to spread awareness is TV. We will announce the initiative through a TVC which will also give us a good platform for our next campaign which goes live this month.
 

Q] As a market, the country is quite obsessed with coconut oil. And you don’t have one in your portfolio. Why did you stay away, and any plans for entering the category?
We were the pioneers of commercial hair oil in India. Our 85-year-old Bajaj Sevashram Brahmi Amla Hair Oil was the first-ever hair oil created commercially to be sold in India. But as time goes by and competition catches up with you, you need to reinvigorate yourself.  A few years after we started, Parachute was well-entrenched as a coconut oil and if we had to enter the category, we needed to be different. That is how we created the light hair oil category in the late 80s. At that point, we thought that since we had created the category, we should just stay in the category and help it grow. We stuck to that thought for almost 25 years. Now, the time has come for us to move out, since we have 65% market share in the light hair oil category. While there is a possibility of us entering the coconut oil category, we won’t enter as a pure coconut oil. It will be with some amount of differentiation from what you have seen so far.
 

Q] What will be your growth strategy for the next few years?

Our roadmap, Bajaj Pathfinder, is based on four broad pillars. We are looking at developing our core more aggressively and accelerating conversions from heavy hair oil users to light hair oil. We are reviving our tail brands like Brahmi Amla, which we re-launched recently. We are also looking at acquisitions and at creating new products. We have recently established an R&D centre where we are looking at brand and line extensions. Moreover, in terms of sales, our focus will be on increasing direct coverage in urban and, very dramatically in rural. We are also focusing on driving automation a lot harder. In the past year, we have tried to become a paperless company. Also, in the past, our retention rate was poor and people would learn the ropes and leave. We are trying to retain people a lot harder now.
 

Q] You recently re-launched your legacy brand Brahmi Amla with an Ayurvedic twist. Is this an answer to Patanjali?
While it is only 10% of the hair oil segment, Ayurveda is growing the fastest, at almost 25%. Overall the market is growing at 5-6% but this segment is almost growing 4-5 times faster than the market, largely because of the entry of Patanjali. Anybody would be foolish to not look at the opportunity. When you make an Ayurvedic product, you have to re-craft it from the start. We did that with Brahmi Amla and put it in a carton to give it a more Indian look. While it’s not a direct answer to Patanjali, we did this because we wanted to be a part of the Ayurvedic buzz.
 

Q] What is your current market-share?
The overall hair oil market is around Rs 4,000 crore. Parachute classifies itself as a food grade oil so if you remove them from the overall market, the market size is roughly Rs 2,600 crore and we stand at around Rs 800 crore. By that calculation, we are the market leaders in the hair oil segment.
 

Q] What is your strategy for driving growth in the rural markets?
Even though we are a premium brand (we are at a 60% premium to the next player in the market), rural is very important for our growth. We are the only hair oil brand, other than cooling hair oils that come in sachets. To enter rural, you have to give consumers a good value proposition. We are also aggressively increasing our direct reach in rural. Till now, rural was accessed primarily through wholesale trade but we are now reducing our dependence on them and directly accessing the market by increasing stock points. Our rural coverage has more than doubled in the past six months.
 

Q] Since acquiring Nomarks in 2013, what kind of growth has the brand seen?
Nomarks has seen no growth. When we acquired the brand, it was worth Rs 28 crore. The next year, we grew quite dramatically, by almost 40-50%, hitting about Rs 45 crore, but the year after that, the growth dropped and came back to around Rs 25 crore. We realised our strategy was haphazardly thought through. Nomarks is a skincare brand and we are a hair oil company and our primary distribution is through grocers. When we acquired the brand, we thought we would get a good offtake by dramatically increasing reach.  We got a good year of sales because distribution expanded but the stocks did not move. People don’t go to grocers to buy anti-marks products, they normally go to chemists or cosmetics store. Our channel identification was wrong. Secondly, in the Rs 1000 crore anti-marks category, face wash holds the biggest share. These days, the segment is cluttered and there is hardly any differentiation. Everybody talks about neem and removing pimples and it’s all a hotchpotch of similar looking and sounding products where Himalaya rules the roost with 60% market share. We also became one of the me-too brands and lost out on differentiation. We also decided to promote the face wash and put all our money in that which was the wrong product to choose and we put all our distribution muscle into grocery stores, which was a wrong channel to take. We corrected these mistakes last year. We realised that in this channel, chemists give you 60% of the overall business. We also thought that as a category, any anti-mark product can give you benefits only if it’s a leave-on product like a cream. So we started playing on our core product, the cream because that’s where we could justify our presence. However, at the same time, Fair & Lovely launched its anti-marks cream, so competition went up dramatically. Currently, we are running a pilot in UP as we realised that to sell in the channel, you need a specialized field force that can deal with the chemists. Owing to these steps, our contribution of creams, which was 30% of our overall turnover, has now moved to almost 80%. Currently we are at a 1% growth but the cream is growing at almost 50%. We believe we are going to turnaround our story and end this year at around 25% growth over last year.
 

Q] What part of your marketing budget is devoted to advertising?
Till about a year back, our sales promotion was about 12% and advertising was about 5-6%. Now we have reversed the numbers. Advertising is now around 10% and sales promotion around 8%. Last year, we spent around Rs 60 crore and this year around Rs 75 crore. Almost 80% of this goes to TV. Around 15% goes to Print and the balance goes to Digital.
 

Q] Are there any plans of entering the mass segment?
Despite being 33% more expensive than Parachute Hair oil, Brahmi Amla is a mass player. In hair oil, we do have brands at the mass level. But we will never get into the heavy coconut oil space because that would make our ability to invest go down dramatically. Creating a new brand requires investments, to spread awareness about the product. And if I launch a product at Parachute’s price, I would lose that ability. Anti-marks is a price-inelastic category because people don’t care about the price as long it can get rid of the problem. Most people enter the category after having tried everything else and having given up so they are not worried about the pricing. We do have mass brands but not at a lower level of the market.

 

@ FEEDBACK  samarpita.banerjee@exchange4media.com

Feedback: Category: CMO Interview Volume No: 14 Issue No: 27

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