Back Sniffing new wins
Purvita Chatterjee
| Godrej Sara Lee plans to foray into aromatherapy. |
A. MAHENDRAN, MD, Godrej Sara Lee
Having entered the air care category with its Ambi Pur brand of car and home fresheners, the company plans to foray into aromatherapy. Exploring new formats with mood-elevating properties, the idea is to penetrate the lower strata of the population and reach households using incense-based products.
However, it will not extend its Ambi Pur brand to the category; instead, there are plans to acquire a new brand. Godrej Sara Lee expects to bring in a certain kind of `Indianess' with its new range. "Aromatherapy is part of our culture and has deeper roots in our heritage and culture," says A. Mahendran, Managing Director, Godrej Sara Lee.
Regional acquisition
Realising that Sara Lee's premium international brand Ambi Pur cannot possibly work as an aromatherapy brand, the household insecticide major is scouting for a regional incense brand. Godrej Sara Lee plans to acquire a relatively known brand which would beef up its topline and bottomline.
"Acquisitions lead to overnight increases in market share," says Mahendran, who is looking at a ready entry into the segment with a local brand. The company intends developing the aromatherapy range, especially for the bottom end of the population strata, in the hope incense stick users will shift to the new category.
Global forays
And it's not just local acquisitions the company has in mind. The company wants to make a global foray. "We are looking at globalising our business and acquiring a brand, possibly in South Asia," says Mahendran.
Scouting for household insecticide brands in countries such as China, Bangladesh and Sri Lanka, Godrej Sara Lee is looking at rapid growth in both national and international markets with new brands. Considering that it has already floated subsidiaries in countries such as Sri Lanka and Bangladesh, acquisitions in these markets are more likely. The company already exports its products to more than 15 countries.
Having acquired domestic brands such as Jet and Banish in the past, Godrej Sara Lee is adept at acquisitions. However, none of these have been able to enjoy the success of its flagship brand GoodKnight, and have remained regional brands. While Jet has a presence in Andhra Pradesh, Banish exists in Tamil Nadu and there are plans to migrate the brand into GoodKnight.
Meanwhile, GoodKnight continues to rule with a majority share with its mats and coils in the Rs 1,300-crore household insecticide category. The other brand Hit is restricted to the aerosol format and it leads in this category with a 55 per cent share, while the other MNC brands Baygon and Mortein lag behind with a share of around 16 per cent each. However, in the vapouriser category, All Out from SC Johnson continues to rule with a majority share.
Early this year, GoodKnight overtook Mortein in the coils category in the rural markets. This was due to the company introducing the mini jumbo coils under the red coils segment. Considering that the red coils category is growing at 30 per cent, and the green coil segment shrinking, it was the affordable pricing that helped GoodKnight. According to Ashutosh Tiwari, Vice-President (Marketing), Godrej Sara Lee, "It is the launch of the mini jumbo coil which has been instrumental in gaining shares, especially in the rural market. The red coil is offered at the same price of the ordinary green coils."
Product innovations
There have been other product innovations by the GoodKnight brand. Late last year, it expanded into the electric gel segment. This year, the brand introduced gels and lotions under the Activ Shield platform. In the past too, GoodKnight had made innovations such as the `automatic' turbo timer. Commanding a 45 per cent share in the household insecticide category, the company has been expanding its range.
It forayed into the nascent air care market in the country in 2002 with its Ambi Pur brand. Ambi Pur, an international fragrance brand brought in from the Sara Lee stable, has evolved from car perfumes to the home electric format; there are plans to introduce more formats such as aerosols in the personal fragrances category in the future. At the same time, Godrej Sara Lee cannot afford to ignore its core business. Innovations and new formats within the growing household insecticide category will be an ongoing exercise for the market leader.
In fact, within the category, aerosols have been registering the highest growth rate at 25 per cent while mats' growth has been flat. Coils and vapourisers have been registering a growth of 4 per cent each.
As long as the Rs 550-crore Godrej Sara Lee continues to grow at its 12 per cent rate, the company can hope to sustain itself in the market.
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