NEW PRODUCT DEVELOPMENT PORCESS,PRODUCT LOUNCHES AND PROBLEM FACED Dr.

Sudhakar Mhaskar is the Executive Vice President and Head Technology - Consu mer Products Business at Marico Limited. Dr. Mhaskar heads the Research & Development team of Marico Limited and oversees Basic Research, New Product Development, Consumer Insights and Regulatory Affai rs for the domestic operations. He leads a team of doctorates, technologists and chemists to create innovative and differentiated consumer products out of resea rched consumer needs. His responsibility also includes creating cost effective, consumer appealing packaging for the products which can occupy a competitive nic he space in the market. To identify scalable marketing and product propositions, Marico follows the prototype methodology, which allows the Company to test a Few hypotheses on a low-cost, fail-fast model before any decision for scale up is taken. This approa ch has now stabilized. In addition to the Prototypes of Parachute Sampoorna, Parachute Advanced and Silk-n-Shine, which we re later launched during FY05, Marico is currently Prototyping Parachute Advanced After Shower Cream and Saffola Daily Health Proto type in Mumbai High Initial Launch Cost New products require a large front-ended investment in product developm ent, market research, test marketing and launch. Creating awareness and develop franchise for a new brand requires enormous initial expenditure on launch advert isements, free samples and product promotions. Launch costs are as high as 30-10 0% of revenue in the first year. For established brands, advertisement expenditu re varies from 3 -12% depending on the categories.2. Limited Mass Media Options The challenge associated with the launch /or brand-building initiatives is that few no mass media options. TV reaches 67% of urban consumers and 33% of rural consumers. Alternatives like wall paintings, theatres, video vehicles, spe cial packaging and consumer promotions become an expensive but required activit y associated with a successful FMCG.3. Huge Distribution Network India is home to six million retail outlets, including 2 million in 3,16 0 towns and four million in 627,000 villages. Super markets virtually do not exi st in India. This makes logistics particularly for new players extremely difficu lt. It also makes new product launches difficult. since retailers are reluctant to allocate resources and time to slow moving products. Critical factors for su ccess are the ability to build, develop, and maintain a robust distribution netw ork. Improved, Advanced, Plus! Analysts across the board agree that these days the average success rate of a ne w brand is down to about 5% of the total launches. This has led to major changes in the traditional FMCG product life cycle. Harish Bijoor of Harish Bijoor Consults Inc says that of the 220 new-to-market FM CG brands launched in the past two years, only 16 could be considered as brand su ccesses. The life cycle of a domestic FMCG brand has changed: the time given to a new product or brand to find consumer acceptance has come down to a couple of months. Therefore, instead of new brands, there have been extensions of existing power brands to new categories. So while Nestle s Maggi is now associated with ready-

to-eat paneer dish, Marico s hair oil brand Parachute also has a new avatar as a body lotion. There is a significant cost differential between marketing a product, which is l aunched under an existing brand compared to a product that is launched under a n ew-to-market brand name. An average all India launch of a new FMCG product, disc ounting the highly competitive categories, can cost in the range of 2-3 crore. The cost can be tripled if it s a new-to-market brand name. As in case of Parachute Body lotion the budget cost around 5 crore for Preparing its advertisement and launching it in only five State. Hyderabad, May 26: Consumer products maker Marico on Thursday launched its new Parachute Ayurvedic hair oil in Andhra Pradesh, as part of its launch of the product in the southern states. The company will be rolling out the product in a phased manner in other parts of the country. The product has been developed in association with Arya Vaidya Pharmacy of Coimba tore and designed to arrest hair fall and promote hair growth. We are working on other products with ayurvedic herbs, Dr Sudhakar Mhaskar, Executive Vice-Preside nt and Head (Technology) of Marico, said. The company has roped in Tollywood actress Tamanna to endorse the product. Dr Gayathri, Medical Officer, Arya Vaidya Pharmacy, said the hair oil contains i ngredients such as amla, ghritakumari, mehendi, nagarmotha and methi, which are processed in coconut oil. Marketing The Brand Parachute moved on from a plain basic 100% coconut hair oil offering to, what it is today. A point to note here is the VAT structure. Ever wondered why Parachut e doesnt advertise itself as a 100% coconut oil brand? The VAT on coconut oil bei ng advertised and sold as edible oil is 5% whereas it being sold as hair oil is 12.5%. So Parachute is better off in advertising Parachute as Parachute Advansed HOT Oil which contributes to approx 1% of its sales rather than that of Parachu te Hair Oil. The 100% coconut oil dons the label 100% Pure Edible Oil on the pac k. Check it out for yourself the next time you come across a bottle. In fact the sub-brand is acting as a surrogate for the parent brand. Curious case of surrog ate advertising? The previous point helps us understand the probable strategy behind launching va riants of Parachute. But let us try and understand how the brand has shaped itse lf over the last 4 years. (I couldnt find advertisements older than 2007.) So her e they are starting from the 2007 Gorgeous Hamesha Campaign.) Most hair oil advertisements are aired during winter and Holi season. We see the same trend in Parachute advertisements as well. In 2007 the brand came up with a Gorgeous Hamesha campaign roping in Deepika Paduk one as the celebrity endorser. The commercial was subtle and effective in commun icating the key benefit of Parachute Hair Oil. The overall locales, feel and sur roundings of the advertisement gave it a very girl-next-door feel. Gorgeous Hame sha TVC 2007. Later facing the might of shampoos the brand introduced special-co mbo packs with a hair massage machine to encourage ladies to oil their hair one hour before they shampoo. Parachute Advansed One Hour Champi 2007 Later in 2010 Parachute roped in Anushka Sharma as the brand ambassador. Parachu te Hot Oil 2010. A special commercial was aired during winters. Parachute Hot Oi l Dec 2010. The protagonist still remained a girl-next-door (mom preparing break fast, closing shot with friends). The voicover highlighted the goodness of ayur veda and coconut oil to the brand. These attributes it promised, would cure dryn ess in hair caused by winters. The closing shot showed a candle burning and the product placed to the left to further drive home the image of ayurveda in the mi nds of the viewer. The brand also dropped the Gorgeous Hamesha banner in the Dec 2 010 advertisement.

The brand moved to a Khoobsurat hai badhna positioning in mid-2010. The aim of the campaign was to communicate that growth of hair is beautiful.

BRAND REPOSITIONING In an absolutely fabulous positioning initiative, Parachute Advansed has owned u p the " World s Best Hair" proposition. I would term it as one of the smartest p ositioning move in 2012 so far. Parachute Advansed which is the line- extension of Parachute Coconut Oil brand takes care of all the value- added coconut person al care products. Under the Advansed sub-brand, Parachute has products like Ayur vedic hair oil, hair gel for men, cooling oil etc. This year , brand has decided to own the most important positioning platform " W orld s Best Hair". The campaign featuring the celebrity endorser Deepika Paduko ne is on air in most of the channels. The campaign which includes digital ( in a big way) is based on a research findi ng that users of Parachute Advansed hair oil has better hair than the non-users of hair oils . It is not the research but the positioning platform which is an absolutely wonde rful and powerful one. By taking the ownership of " world s best hair" and backi ng it up with a research ( which will be ignored by skeptics), Parachute Advanse d moved a notch up interms of positioning. The ad agency did a smart job in pass ing the message in a beautiful manner. " The world s best hair " campaign is one of the very thoughtful and powerful ca mpaign in recent times. The brand has put itself into a powerful position and wi ll force the competitor to negate this aggressive stance.As for the consumer is concerned, the current campaign will reinforce their choice of using hair oil fo r hair protection and may prompt non-users ( of category) to try out this brand. Coming to the 2011-12 commercial. This time Parachute has a new celebrity. Nargi s Fakhri riding on the latest release of her movie Rockstar. Actually Parachute was one of the first brands to sign up with Nargis. The current commercial on is high on style and production value. The choice of t he brand ambassador, the shooting location, production values, dominant use of w hite all go towards communicating a premium, modern, sophisticated, aspirational image for the consumer. While the earlier commercials showed the protagonist as a girl-next-door. Nargis is shown to be a woman of today. The change in the communication of the brand m essage would have stemmed from the research interviews Parachute would have carr ied out. Probably they would have discovered that the consumers associated the a yurvedic attributes to being old school. (It could have been used as a different iation but anwyays). Probably thats why we can observe that Parachute has reduced the font of Ayurvedic on the bottle. Also there is no mention of ayurvedic i n the voiceover for this commercial.The brand also communicated that the best wa y to use the oil was its Deep 20 minute conditioning which is a departure from the earlier 1 hour champi . (Is that from the research as well? Consumers woul d have said 1 hour is too long a time for them to spare.)This marks a shift in t he brand strategy. Earlier the consumer was advised to use the product before sh ampoo but now the brand advises the opposite. The commercial has also got heavy spots on Star World and other lifestyle channels during the prime time slot wh ich further corroborates the entire hypothesis, that it wants to focus on the wo

man of today.