Henkel Spic India, is getting ready to do a Nirma on HLL - with Margo. Fresh from the successful relaunch of Margo - which the company claims has grown by 15 per cent since then - Henkel Spic has smoothly extended the Margo platform to talcum powder. Margo, which came into the company's fold with the acquisition of Calcutta Chemicals and Detergents India in 1999, is available in its new avatar in Tamil Nadu since late last month.
The company is currently test-marketing Margo talcum powder at Rs 35 for a 100-gm pack. Simultaneously, it is busy pushing its distribution network to gear up for a national presence. "Though Margo (soap) is a national brand, the eastern and southern markets were its strongholds. Now its presence in the west and the north has increased noticeably," said Ranju Kumar Mohan, general manager, marketing (cosmetics), Henkel Spic.
Besides introducing two new variants of Margo and reviving its communication, which had all but disappeared from public attention in the last decade, the company has doubled its distribution strength over the last one year - from 1,000 distribution points to 2,000 across the country. In fact, it had acquired Calcutta Chemicals and Detergents India from Shaw Wallace two years back for a whopping Rs 60 crore with the explicit intention of beefing up its product portfolio as well its distribution network.
Post-acquisition (of Calcutta Chemicals and Detergents India), Henkel Spic now owns some popular brands such as Margo (neem-based toilet soap), Neem (toothpaste), Brisk (floor-cleaner and disinfectant), and Attak (mosquito repellent). Apart from these products, Henkel Spic has also launched the Fa range of toiletries from its German partner's portfolio. The launch of the Fa range of perfumes, deodorants and toilet soaps is intended to give the company its much-needed volume growth.
Interestingly, Mohan claims that Margo has grown despite a 4 per cent decline (in terms of value) in the soap market in the country. "This could mean that promotional offers are hurting the industry. After all, the soap industry has not seen any significant decline in volumes, which could only mean that the free soaps and the price-offs have hurt the industry elsewhere."
The Indian soap market is estimated at 500,000 tonne and valued at Rs 4,500 crore. While the big national players have been struggling to keep their sales intact, they are faced with stiff competition from regional brands. For instance, HLL's Hamam brand, which is strong in south, is faced with stiff competition from Medimix and Vrinda from the Cholayil Group.
Henkel Spic, has the advantage of a small base compared to the established players, pointed out an industry source, who added that it has managed to get the product mix right as the 'herbal' segment is the one which is growing fastest today. FCB-Ulka handles the communication for the brand out of Chennai. The agency has just introduced its new campaign for Margo talcum powder on Sun TV. "We are initially looking at the southern channels. Our contention is that Margo is 'a natural soothing talc' which offers complete skin care," said Minitha Saxena, branch manager, FCB-Ulka.
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