Market Dominance Strategies

Dr Amit Rangnekar
Dec 2007
Market Dominance

• “Dominating a market or category

isn’t easy; not only must you
become the default option for the
consumer, the consumer must
view her second option very
grudgingly. That’s when you
dominate mind share - and
market share”
• Jagdeep Kapoor, CMD, Samsika
Marketing Consultants
 International Brand dominance

• Brand leaders in the 1930s in the US

• Colgate, Kodak, J&J, Pfizer, Coke

• Brand Leaders in the new millennium in

the US
• Colgate, Kodak, J&J, Pfizer, Coke

• Aakers- Buildings dilapidate and die, but

brands live on forever
 The Dominant Leaders

Brand / Company Category MS%

Eureka Forbes Vacuum Cleaner 90

Amul Butter Butter 86
(GCMMF)
Dettol (RCI) Antiseptic Lotion 85
Nokia Mobile Handset (GSM) 78
Fair & Lovely (HUL) Fairness Cream 73
Cadbury Chocolate 70
Titan Watches 65
Eureka Forbes Water Purifier 62
Maruti Suzuki Passenger Cars 59
Vim (HUL) Dishwash Aids 56
Hindustan Unilever Toilet Soap 55

Sources- AC Nielsen, TNS CEllTrack 2006, SIAM, Industry estimates & Company sources
 Sustain Market Dominance due
to..
• Legacy- Lifebuoy, Lux
• First mover advantage- Fair & Lovely
• New category creation- Maggi Noodles
• Catering to customer aspirations- Nokia
• Offering new benefits- Moov
• Superior segmentation & product design- Titan
• Economies of scale / cost leadership- Amul
• Pricing strategies- J&J sanitary care
• Quality of customer service- Maruti
• Quality of field force training- Eureka Forbes
 First mover advantage- Fair &
Lovely
• 1960s- Fair & Lovely, India’s first fairness cream
• 2006- Rs 850-crore brand, 75% share of Rs 1,200
crore Indian fairness market
• 1999- Innovation- sachets to tap new markets, to
ensure greater penetration & availability across
price strata, now account for 50% of sales
• “Sachets exploded the market, delivering
consistent double digit growth,” Ashok
Venkatramani, VP, HUL
• Fair & Lovely Ayurveda- targeted consumers who
prefer natural products, now contributes 10% of
sales
• “Ayurveda was a big subset in the fairness cream
universe” says Venkatramani
 Eureka Forbes- New Category
Creators
• 1986- Aquaguard launched
• 2006- 60% share of the 710-crore water purifier
market
• Then, purification meant boiling or filtering water to
make it potable
• “Reasons behind the company’s success are- our
6000 strong sales force, our 1000 service centres &
our constant investment in training its sales force.
Our 19 recruitment & training centres across the
country train salespeople 300 days a year. These
training rooms are our factories. But, our rivals
depend on advertising & dealer selling, and dealers
work only on margins. Also 85% of our base has a
service centre within a 5-km radius.” Forbes’
Palekar
 Eureka Forbes AquaGuard- New
Category

• Market domination also entails responsibility of

growing the market
• “After ultra-violet purifiers, RO-based purifiers &
resin-based purifiers, we have now launched a
purifier with technology developed by IIT Chennai
which removes pesticides from water. As leaders,
we try to cover the entire market for purifying
needs.” Palekar, Forbes
• The idea of dominating markets appeals to
marketers, but competition helps grow the market
• The burden of growing the water purifier category
has been unending, and market dominators exploit
this to their advantage by taking a disproportionate
share of incremental market or category growth
 Maggi- Customer Benefit

• 1983- Nestle launched Maggi noodles

• Noodles, then available only from the unorganised
sector or in Chinese restaurants
• 1980s & 90s- Built on taste & convenience platform
• 1995-Competition-Top Ramen- taste variants, smart
segmentation aggressive promo & Shahrukh Khan
• Maggi offered a new taste – not successful
• 1999- relaunched with original taste, sustained
efforts saw the brand reclaiming lost ground
• Innovation- pack, flavours, price- retain share
• “Maggi adapted to local tastes, continuously
sensitised itself to the evolving Indian consumer &
withstood competition” Martial Rolland, CMD, Nestle
India
 Nokia- Managing customer
aspirations
• Nokia came from behind to stun Ericsson &
Motorola, garner nearly 80% of the GSM handset
market
• Anticipated what customers were looking for
• “We invested ahead of time in branding, distribution
& people. We foresaw market trends. When the
market opened in 2003-04, we were ready with a
complete product portfolio across the price
spectrum. We found sweet spots across categories
in terms of pricing and requirement” Shivakumar, VP
& MD, Nokia India
• Single-minded focus on 1 category helped brands
gain dominance
• “Most of our competition had other products in the
market as well, so for them handsets was ‘another
business’ they had, but for us it was a must-win
category” Shivakumar
 Nokia- Managing customer
aspirations
• Nokia’s accent on distribution was critical
• “A decade back, the mobile market in India was
mostly grey. The need of the hour for retailers was
trust, managing price erosion & a solid backing from
leading handset manufacturers.”
• “ Our HCL tie up focused on managing profitability
of the retailers & was fundamental in developing
the entire distribution chain of mobile phones in
India”
• “Today, 100,000 outlets stock mobile phones in
India, & about 60,000 of them stock only Nokia. At
every retailer, on an average, 2 of 3 phones sold
are Nokia”
• Nokia has blocked sensitive price points from Rs
1500 to Rs 20000 at every Rs 500 price interval,
offering a wide choice in terms of price and features
 Amul- Reach & Economy

• Amul Butter’s 86% market share is a function of

taking butter consumption, mass
• Great distribution, major investments in mass
media
• “Our backward integration cannot be captured by
our competitors. We have strong relationships with
25 lakh farmers, focused communication & a sound
supply chain which helps us maintain consistent
quality,” RS Sodhi, CGM
• The Amul Girl, world’s longest running ad campaign
• Stunning reminder ads, wittily capturing current
trends
• High brand salience, brand is generic to category
 Cadbury’s

• “Leadership is more about thought leadership than

just being the leader in terms of market share.
You’re a loser if you’re reactionary. Keep raising the
bar & not wait for competition to kick in” A Kripalu,
MD Cadbury
• Full chocolate range, complete category coverage
• Distinctive taste, captured sensitive price points
• Éclair Rs 1, Chocky Rs 2
5 Star Rs 5 & Rs 10

Dairy Milk Rs 10, Rs 15, Rs 25 & Rs 100

Fruit & Nut Rs 20, Dry Fruit Range Rs 25-
50 Heroes Rs 50 & 100
Celebrations Rs 50 & 100
Rich Chocolate Rs 100, 250, 450
 J&J- TINA & Pricing

• 1980s- J&J dominated the feminine hygiene & baby

care businesses with 80-90% MS
• Challengers- P&G and Wipro entered
• 2007- J&J market domination in baby care- TINA
• Feminine hygiene category leadership- J&J’s
complacency allowed P&G’s Whisper to steal 50% of
the sanitary napkin market from Stayfree
• Clever pricing strategy let Stayfree regain share-
capitalised on Whisper’s inability to lower costs due
to new machinery, overheads & marketing costs
• “There is a more value conscious segment that
exists, and we addressed Stayfree to this segment”
 HUL’s Vim- Innovation

• Timely innovation helps marketers beat back

challengers
• Vim, dominates the dishwash bar segment, but
threatened by Henkel’s Pril in the growing liquid
dishwash segment
• 2007, Vim liquids introduced both in a plastic bottle
& a plastic bag innovation, Vim edged past Pril by
July 2007
• “It’s important to innovate ahead of time and not
get complacent about being the leader. If what you
add builds on what you have, it is bound to work”
Sudhanshu Vats, category head - home care, HUL

•
 HUL Soaps- Legacy

• “Our domination of the toilet soap market is partly a

question of legacy. Both Lux & Lifebuoy have been
built over a long time and have strongly entrenched
imagery positions that aren’t easily dislodged”
• The 2 brands have market shares of 17%-18% each,
while the next competitor, Godrej, has only a 5%
share
• Smaller SKUs have worked well for HUL, In 2006-
Mini SKUs (Rs 5) were 13% of the category in value
terms, growing at 35% over 2005
• “We dominate in smaller SKUs, and are reaping the
benefits of growth and penetration”
• “Market growth is also a function of the level of
noise that rival brands make. So greater competition
means all share the cost of growing the market”
Venkatramani
 Maruti

• In 2002, Maruti’s market share dropped to 45%

• Competition in the small car segment emerged from
Hyundai Santro, Tata Indica and the Daewoo Matiz
• In 2007, Maruti has a market share of 59% overall,
and 65% in the small car segment
• “We have doubled our network in the last 4 years, &
are No. 1 in customer service & satisfaction - our
service people sell more cars than our sales
people,” Jagdish Khattar, MD, Maruti Suzuki
• 60% of Maruti buyers come through
recommendations
• Range & price point sensitivity- A Maruti variant
from the 800, Omni, Alto, Zen, Wagon-R, Swift,
Esteem, Baleno & SX-4 from Rs 2-8 Lakhs at every
Rs 25000 price point
 Hero Honda- You just can beat a
Bajaj

• Hero Honda dislodged the mighty Bajaj who once

had a waiting period of 9 years for its scooters
• Hero cycles tied up with Honda, to move up the
value chain from cycles to motorcycles, while Bajaj
could not envision the changing trend from scooters
to motorcyles
• Hero Honda offered a fuel efficient, low cost of
maintenance product, and put in place a coutry wide
distribution network
• 2007-Hero Honda straddles the bike market while
Bajaj remains a distant number 2, a gap of 33%
 Parachute

• “Parachute hair oil is a good example of innovation.

The brand is the leader because it has continually
strived to raise the aspirational value of the
category by making coconut oil contemporary and
relevant to a younger set of consumers” Kapoor,
Samsika
• Captured sensitive price points and offered
innovative packings- right pricing and sizing,
comprehensive reach
 Market Challengers

• “Market dominators are formidable due to their hold over

the category but often, the competition fails utterly in
making inroads, & gives up the battle midway”
• “To make a dent in the market, a challenger has to be
present and sustain investments for at least 5-10 years.
Often, the category is too small to justify investments, or
the climb is too hard, so challengers give up. This scenario
often calls for a war of attrition that only marketers with
deep pockets - or deep vision - can sustain” Nadkarni
• Typically, a combination of factors drive market
domination - heritage, distribution, focus, foresight,
planning & innovation
• It’s a model that looks simple but is very difficult to
duplicate
• Challenger brands have to identify and deliver on
consumer need gaps
 Can market dominators be
overthrown
• Maruti unseated Ambassador and Padmini Premier
by offering consumers a smaller, better designed,
more maneuverable and economical car
• Titan stormed the HMT citadel by capitalising on the
aspirational value of a better-designed quartz watch,
and focused on innovation and segmentation to
remain ahead of the curve.
• “The biggest challenge is to be able to reinvent
yourself. Take Madonna for instance, she has been
able to remain vibrant and energetic, cool and
contemporary and hence relevant throughout,” says
Harish Bhat, COO, Titan.
 What clicked- Moov
• Moov came from nowhere to overcome Iodex by
tapping the consumer’s latent need for better usage
(less smelly, less staining, new plastic tubes, more for
less)
• Girish Patel CEO Paras Pharma
• “Iodex lost market share as complacency crept into
their marketing. Iodex kept introducing new products
worldwide, but continued in India as the smelly black
pain balm for years”
• “There is never a perfect solution, there can only be a
better one. We strive to perfect the art of finding
better solutions”
• "We chose markets where there is a strong no. 1 but
no strong no. 2“
 What Failed- Savlon

• Savlon tried to sell the painlessness, the pleasant

smell of its antiseptic lotion, and the plastic bottle,
as key differentiators over Dettol, but failed
• “Pain and smell weren’t problem points. Your brand
having a differentiation means nothing to the
consumer. The key is to meet an unfulfilled need”
Kapoor
 Market domination

• Bane- marketers let their guard down- Iodex, Surf

• Complacency- Fiat, Kelloggs, US cars in India
• Even if marketers aren’t first-movers, brands ascend
by pushing aggressively into growing markets- Moov
• Most market dominators stay at the top as they
constantly innovate- to put widen the gap between
them and the competition- Gillette
• “If brands do not innovate enough, there is a risk of
becoming obsolete” Shripad Nadkarni, MarketGate
• “Vicks lozenges, since 2002, has launched flavours
like tulsi and honey, and more than doubled our
business in throat lozenges with these strong and
meaningful consumer interventions,” he claims
P&G’s Vohra.
 Learnings

• Ultimately, leadership is about constantly

seeking possibilities for improvement,
irrespective of competition- Gillette
• “Market dominators are those who focus
on the ball and not the bowler. Look at
the market and the consumer, not the
competition.” Kapoor