Emami’s Marketing Strategy Deciphered in Terms of Marketing 4 P’s

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Now let us see what Emami can do further to increase its Presence:

The opportunity Emami seeks is in the Rural Market. HMN’s management has a good track record of innovation and has developed several niche categories. Consequently, it enjoys first mover advantage in categories like Men’s Fairness, Cooling Oil, Antiseptic Cream. We note that HMN’s portfolio largely caters to the mid and mass end of the category spectrum. The company is looking at building deeper presence in small towns. Hence, its focus on the mass end through low unit packs (LUPs) is natural, in our view. It is also looking to leverage the equity of its brands to drive portfolio expansion.

Uniqueness and Creativeness to extend presence in adjacent categories:

HMN’s medium term strategy includes extension of its presence in existing categories through new variant launches, introduction of value-added offerings and exploiting the brand equity of its power brands to enter into new categories (entry into Face Wash under BoroPlus and Fair & Handsome).

HMN has completed the first phase of Project Swadesh and increased its rural reach to towns with population clusters of 10k. Its direct reach has increased from 500k outlets in FY12 to 600k in FY13 and it is targeting800k in FY15. It aims to cover villages with population of 8k, going forward. Increasingly, it is relying more on technology to boost its market presence and improve the sales productivity of its team. See Graph below for reference:

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Seeking new customers through a Strategy called LUP:

HMN is also leveraging its low unit pack (LUP) portfolio to drive penetration of its products in rural and semi-urban areas. ~30% of its turnover comes from SKUs priced below INR5. HMN offers (a) INR2 SKUs ofZandu Balm and Mentho Plus,(b) INR1 sachet of Navratna Talc,(c)INR1 sachet of Navratna Oil(40% of brand sales), (d) INR10 SKU ofFair & Handsome, and (e) INR5 SKUs of Vasocare Petroeum Jelly and BoroPlus, to drive penetration and usage in rural markets.

Emami also has multiple growth drivers going its way:

- Focus on new product launches and increasing product portfolio

In a slowing urban consumption environment, HMN’s volume growth has dipped from 13-15% in FY13 to 5% in 9MFY14. Adverse seasonality coupled with overall slowdown in Consumer categories has impacted HMN’s performance.

HMN has been continually launching innovative products in the Personal Care space, and has leveraged its brand strength and Ayurvedic positioning to enter new categories. Its strategy entails indentifying niche mass market segments within Personal Care and Healthcare, where gross margins are high and competitive intensity is low.

New launch momentum has been relatively sedated in the last two years. HMN typically test markets 3-5 brands every year, and then, based on the success and consumer acceptance, scales them up nationally. We expect an increase in new launch momentum in FY15.

HMN had launched Fair & Handsome Instant Fairness Face Wash after entering the category in early 2012 by launching BoroPlus Advanced Moisturizing Face Wash. Subsequently, it launched a niche anti-pollution variant of BoroPlus FaceWash in October 2013, with endorsement by actress, Bipasha Basu. Face Wash is an INR 10b category, growing at over 20%. MNCs with deep pockets – HUVR, Beiersodrf (Nivea), L’oreal (Garnier), etc, are present in the category.

Some of the notable new launches/relaunches from HMN’s stable in the last few years include Navratna Extra Thanda, Navratna Cool Talc, Vasocare Petroleum Jelly, Malai Kesar Cold Cream, BoroPlus Lotion, and Himani Fast Relief. We expect innovations/extensions and new category entries in Skin Care to drive volume growth for HMN in FY15 and FY16.

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Below table shows a timeline view of Emami’s Product launches and Acquisitions:

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Small Case Analysis: The Most Recent acquisition came in the Month of June 2014 with Emami acquiring ‘She Comfort’ brand which marks there foray into Female Hygiene Segment. Let us analyse Emami’s Methodology behind this acquisition:

Emami entered into an agreement with Mumbai-based Royal Hygiene Care Pvt. Ltd (RHCPL) to acquire ‘She Comfort’ brand of sanitary napkin.

‘She Comfort’ brand, one of the top five brands in its category in India. The brand offers synergy with Emami’s businesses of personal & healthcare products and will add a new dimension to emami’s existing portfolio. The acquisition of ‘She Comfort’ is part of an aggressive strategy to strengthen our presence significantly in the personal & healthcare segment.

She Comfort is a brand that has strong potential in the feminine hygiene category with its superior quality and variety of products to suit every woman’s needs. Emami plans to take the brand to reach its true potential and we welcome this association.

With an aim to build on its core strength and expand further in the wellness space, Emami is focused to seize opportunities with its acquisition of ‘She Comfort’. Awareness of feminine hygiene is still not at an optimal stage in India. The sanitary napkin market is currently a low penetrated category. However, with growing literacy and awareness of healthy lifestyle, more and more new consumers are entering this segment, fuelling the growth tremendously and presenting Emami with an opportunity that Emami wish to leverage. With the acquisition of ‘She Comfort’, Emami wish to educate our consumers on the benefits of feminine hygiene by offering best of quality products at affordable prices. Emami plans to use our well entrenched distribution network to reach out to our consumers in both rural and urban markets.

Sanitary Napkin with a current market size of over Rs.2100 crores is a growing category with low penetration and is growing at 19%. Although a relatively new entrant, ‘She Comfort’ with its differentiated positioning of ‘rash free’, has been able to make its presence felt in a market dominated by multinationals and garner a good consumer base and trials due to excellent product quality. 'She Comfort' offers a wide range of comfortable, easy to use, quality sanitary napkins available in various sizes, thickness and dimensions to suit the requirement