MARICO

Marico is a leading Indian Group in Consumer Products and Services in the Beauty and Wellness space. Marico's products and Services in Hair care, Skin Care and Healthy Foods during 2004-05 generated a turnover of about Rs.10 billion (USD 230 Million) from 12 brands - Parachute, Saffola, Sweekar, Hair & Care, Shanti, Mediker, Oil of Malabar, Mealmaker, Sil, Revive, Kaya and Sundari. Having the presence in many SAARC countries, Middle East and US along with its unique range of products like Spa, Ayurvedic centers it is one of India’s leading FMCG brand. Marico sells over 63 Million packs to around 130 Million people every month.
Background:
Marico is the market leader in the hair oil segment, with its Parachute and Hair & Care brands. It is also one of the leading players in the branded edible oil segment with strong brands like Saffola and Sweekar. Besides hair and edible oil, the company has a presence in niche segments like Instant Starch (Revive), Anti lice shampoo (Mediker) and food products like jams and sauces (Sil). Marico also has a fee based marketing arrangement with Procter & Gamble (P&G) for marketing a few P&G brands through its own network. Parachute, Saffola and Sweeker are the key earnings drivers, contributing to almost 80% of Marico’s turnover.
Company:
Fast moving consumer goods (FMCG) business is built on the two pillars of brand equity and distribution network. Brand equities are built over a period of time by consistent high quality and aggressive advertisement and marketing. Availability near the consumer through a wide distribution channel is another crucial success factor, as products are small value, frequently purchased, daily use items. Competition is intense, and players have to remain cost effective and provide value for money to consumers to retain market shares.
The coconut oil market is valued at around Rs14bn. Only 45% of the coconut oil is sold in the country in branded form, while the rest is sold in loose. The branded segment can be divided into pure coconut oil market and value added hair oil market. The pure coconut oil industry has grown at a CAGR of 6-7% during the last 4 years/ The value added oil market grew at a fast pace in the late 90’s. However growth is estimated to have slowed down to a CAGR of 4% pa during the last 3-4 years. Marico, Dabur and HLL are the leading players at the national level. There are several other players with a regional focus.
Branded edible oil, accounts for just 35% of total edible oil consumption in the country. However the relative proportion of edible oil sold in packaged/branded form has been rising steadily with increasing awareness about health and hygiene. In the fabric care segment, Marico is the pioneer and the only player catering to niche Indian requirements such as starching.
Marico has maintained Parachute market share despite severe competition. It is following the strategy of strengthening the brand equity of existing brands by launch of new variants of existing brands. New edible oil products are launched with 'Good for Health' positioning under the Saffola brand and catering to regional taste requirements through the Sweekar franchise. In the hair oil segment, the company has successfully launched value added Parachute variants. A new brand Shanti Amla, in the amla hair oil category dominated by Dabur, has been launched during FY02 and has been extremely successful.