Innovate, for the kill…

04 Oct,2013

 

By Fatema Rajkotwala

 

What does one of India’s largest consumer product companies do to delight customers and increase market share? Innovate!

 

“Innovation is very important for us and by innovation we mean something new that adds value to both the company and for consumers,” says Nisaba Godrej, Executive Director, Godrej Consumer Products Ltd. “India presents interesting market opportunities because as per capita income rises, people are interested in buying newer, higher order products. At the same time, there is also immense opportunity to make other products accessible for people – when done right and at the right time.”

 

Godrej Consumer Products has launched what promises to be a gamechanger in the household insecticide category with its new product, the Goodknight Fast Card. In an estimated Rs 3,600 crore market, where the company has introduced and pioneered innovative product formats such as the coil, mats, the liquid vapourisor, aerosol etc, GCPL now brings in a low-cost, fast burning, low-smoke solution for the masses.

 

MxMIndia spoke to Ms Godrej and Sunil Kataria, Chief Operating Officer, Sales, Marketing and SAARC, Godrej Consumer Products Ltd. on GCPL’s attitude towards innovation, the idea behind the new product and the company’s business plan for the launch.

 

The company has roughly spent two years in market research, product development, and license and board certification for the Fast Card. Market insights highlighted that about 50 per cent of Indian homes do not use any mosquito repellent. “We live in a tropical country where malaria and dengue incidences are high. Not only is a good night’s sleep important but there is also a very real disease factor involved. Being differentiated by bringing in a product like this is also very important to us. By launching an existing product by changing the packaging is not necessarily good for the consumers or the company,” she stated.

 

Innovation is key because… but not without value addition

Ms Godrej spoke on how launching a new product under the Goodknight umbrella adds to the brand image. “In terms of business strategy, a large amount of money in our business is spent on advertising and distribution. It is also very healthy for the company’s bottom line. A lot of our products are launched under the same brand so while we advertise this, it is has a positive rub off on our other products. We will continue to innovate and put our investments behind our innovations.” The company heads informed us that Goodknight is an estimated Rs 1,000 crore brand and being an old name in the business, Godrej boasts of a distribution network spread over 40 lakh retail shops and a direct reach in 50 thousand villages.

 

A market learning is that while many households have a cockroach infestation problem, a small percent of them are buying a product to rid of the problem. Citing HIT Anti Roach Gel as an example, Ms Godrej said, “While this product costs Rs 125 and sounds expensive, it lasts for two months and we are positioning it against someone having to spend Rs 1,000 to deploy pest control. Even if we introduce a one rupee product, we are focused on it bringing value for money.”

 

Seeing that malaria and dengue is on the rise and rampant within the country, coupled with GCPL’s aim to provide accessibility and an effective solution for the masses, one may think this is a CSR initiative. Ms Godrej clarifies, “We have a Good & Green strategy where we want about 25 percent of our product portfolio to be a part of. There is an angle of social responsibility but at the end of the day we wouldn’t launch a product that does not make sense for us as a company.  We are also happy to charge customers for a good product if can afford to pay for it.”

 

The Goodknight Fast Card has been introduced in the Indian market only ten days ago and the company marketing heads informed that it should be available all over within five weeks. The product had been launched in Indonesia about a year and a half ago, by a Godrej-acquired company, under the umbrella of the HIT brand.

 

Reaching the non-user

Advertising being a big component of a FMCG product’s media spend, the company is ready with a TVC, creative done again by Goodknight’s agency, JWT, along with print and radio. Given the company’s aim is category creation; there will be a special focus on mobile advertising too. Mr Kataria said: “Our media spend will be divided in a way that we will be spending heavily on TV; on print, as we need to educate consumers so we will use vernacular medium for regional areas; a skew towards radio such as All India Radio and DD in smaller towns but a large part will be on C&S. We are also working towards innovative solutions on mobile as an untapped medium for rural areas.”

 

Giving us further clarity on the specific target audience marked for this product, Mr Kataria said, “The primary TG here is non-users of any branded insecticide solution. The problem we are addressing is that of up to 56 per cent of Indian households that fall in this category, while in rural India the figure rises up to 70 per cent of non-users. We have also observed that within the insecticide market, there is a dual usage of products that happen. Most households use a combination of two formats – liquid vapouriser and coil, aerosol and coil etc. to increase the efficacy of the solutions. We also see this product going into current branded solution households as a second product. In that sense we are looking at two different target groups. The decision maker in our TG is the female but the user is the family.” In this way, the company does not look at the product as one that would eat into other product shares but rather supplements them as a combined solution.

 

In the grander scheme of things, GCPL is hoping to revolutionise and expand the category with this product innovation. “Our main objective is to expand the insecticide market in India. As market share leaders and pioneers of every format of product in this country, we see it as our task to expand the market and increase penetration.”

 

Talking about the product’s strengths and the possible criticism of instigating a price war, Mr Kataria elaborated, “It is easy to use, almost smokeless, is safe and it doesn’t use electricity. We expect a growth in the SEC B and C category. We are very clear about adding valuation for consumers and the company. We are not looking at simply price cutting, which may lead to a scenario where tomorrow somebody else may come in and cut you further. Then it is no longer a sustainable advantage to the organization. Also, if you look at our innovation pipeline of launched products, we are straddling different price points depending on the value we are creating.”

 

Ms Godrej further added, “Given the price point and the access aspiration, we expect it to be a large-volume, large money model. It is a profitable product so we are looking at good margins. If you a looking at competitive dynamics where you come in and sell below your cost; it is anti-competitive. While it may benefit consumers in the short term, in the long term, it is not healthy for industry dynamics. There is nothing like this in the market currently, which is why there is a large chunk of non-users. It is not as though people don’t want to protect themselves but for a variety of reasons, no one has offered a product at the right value price point. In any case, as the market leader, we’d only be cutting ourselves.”

 

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