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Soumik Kar

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Business as unusual
How Godrej Consumer Products countered the slowdown in rural India

Vikas Kumar

"In uncertain times,it is important to rally our troops and spend time with consumers" — Vivek Gambhir MD, GCPL

Look outside India In 2010, Godrej Consumer Products unveiled its 3x3 strategy, in which it focuses on three categories — home care, personal care and hair colour — in three markets — Asia, Africa and Latin America. With half its revenues coming from outside India, the company has a more balanced portfolio across categories and geographies.

Don’t stop innovating “We believe there is still tremendous headroom for growth in the Indian FMCG sector, given the relatively low penetration and consumption rates in many of the categories in which we participate,” says Vivek Gambhir, managing director, GCPL. Therefore, it is important to balance dealing with the near-term vagaries with investing for the long-term. Over the past 18 months, GCPL has launched seven new products in India. These include air fresheners under the Godrej Aer brand; Godrej Expert Rich Crème, crème hair colour in a sachet priced at a market-disruptive ₹30; Hit anti-roach gel; and shower gels as part of the new Cinthol range. Last year, the market leader in household insecticides also introduced the Good Knight Fast Card, a paper-based mosquito repellent priced at ₹1 that claims to keep mosquitoes away for four hours. “Our idea was to launch a product that would break the price barrier, work instantly and would not require electricity,” explains Gambhir. Now, almost 40% of incremental growth is being driven by the new launches. “Our focus on innovation has, in fact, accelerated and we have a very strong pipeline in place across categories for the next three years,” he adds.

Improve the go-to market approach That means more than just adding outlets and villages, though GCPL did add 10,000 villages in the past 12 months, taking its total to nearly 50,000 villages across India. Over the past couple of months, it has equipped about 2,000 sales representatives with handheld terminals and added 300 direct sales reps, in addition to growing specialist channels such as chemists and cosmetics stores. Rural coverage through vans is on the increase, as are state-specific market actions. “As a result of our efforts, our rural growth has been significantly outpacing our urban growth,” says Gambhir. 

Drive efficiencies GCPL has launched Project ICON (‘Improving CONtribution’) that focuses on reducing costs in manufacturing, sourcing and logistics. Some 100 initiatives have been shortlisted, targeting areas such as yield improvement, optimising use of raw material and packaging material, lowering inventory, reducing freight and seeking better sourcing options. The company is targeting ₹100 crore in savings through these efforts in FY14. 

Seek accretive acquisitions Instead of going slow on buyouts, GCPL has stepped up its efforts to find companies that are a strategic and operational fit. In January 2013, it bought UK-based women’s deodorant brand Soft and Gentle and in October, picked up a 30% stake in B:blunt, a Mumbai-based hair salon chain. And in February 2014, GCPL acquired Lincoln Dental Supply from Keystone Industries and acquired the remaining 49% stake in Darling Group Holdings, the African hair care company it bought in 2011. “We believe this is a good time to identify acquisitions that could improve our long-term competitive position,” says Gambhir. 

Optimise marketing investments GCPL has adopted an integrated marketing communication approach through which it focuses on one big idea for each brand and takes that idea across platforms — mass media advertising, online, trade engagements, point of purchase and public relations. For instance, towards end 2012, brand Cinthol was “refreshed” with a new tagline, ‘Alive is awesome’. The Alive bathing project engaged 85 travel and adventure bloggers for 45 days, where they shot videos of unique bathing experiences. The dedicated YouTube channel received 150,000 views, 300 people sent in their own bathing videos and the initiative clocked 750 blog write-ups with pictures. This was followed by a campaign for Cinthol deodorants with a new brand ambassador, Virat Kohli. The ‘Intensely Alive’ initiative involved generating customised responses from Kohli for select consumers and was followed by the ‘Challenge Virat’ campaign, where consumers met the cricketer and posed challenges such as hitting a six with a baseball bat and kicking a football from mid-on to the stumps, among others.  

Connect with consumers “In uncertain times, it is important to communicate more to rally and motivate our troops and spend more time with our consumers,” says Gambhir. Accordingly, GCPL has initiated an online engagement and collaboration platform called Yammer, where employees can share ideas and connect with each other. Gambhir himself spends half an hour every evening responding to all the posts on its Facebook equivalent. GCPL has also launched a consumer connect programme, CONquest, through which the firm’s marketing and design teams spend a certain number of hours every month with consumers.

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