Dr Morepen, a subsidiary of Morepen Laboratories Ltd, plans to enter the analgesics market very soon. While company officials were unwilling to divulge the launch details, what is known is that Dr Morepen will develop its own products in this segment (that is, no new acquisition here) and would like to address both the body ache and headache segments with its brands slated for launch in the next two to three months.
Talking about the reasons for getting into analgesics, Kartik Raina, managing director, Dr Morepen Ltd, says, "There are two ways to grow - by building on existing businesses or by exploring new areas where your expertise can be extended. Our choice of the segment is clearly dependent on the areas where we can extend our expertise."
The foray into analgesics is part of a broader plan to boost what the company refers to as the lifestyle inhibitors category. In this category - which the company defines as conditions that inhibit one from living life the way one wishes to - the company plans to follow a two-pronged strategy. One, acquire brands that facilitate its stated goal of accelerated growth and, two, launch its own products to fill up existing gaps in the marketplace.
To this end, the company recently acquired Burnol from Reckitt-Benckiser for Rs 8.95 crore. The advantage of such an acquisition is that it allows the company faster entry in a particular segment, though not necessarily at a lower cost. "To enter the skin care market I could have launched a new brand, but that would have been the 60th brand in the category. So the acquisition of Burnol made sense. Here comes a brand that is ranked 34 among the Top 50 brands (according to the latest A&M top brands report) - and that too without any advertising support whatsoever. Here I am buying into an equity. It is getting me a better entry into the market as also in the consumers' mind," says Raina.
The acquisition also helped the company build on its distribution network. "If I go to a retailer with a new product, the distributor is bound to have a 'let's see how it works' kind of attitude initially," explains Raina. "But if I go to him with Burnol, the distributor would willingly stock other products of Dr Morepen because he would think of me as the company that owns Burnol. So we save on the time that would have otherwise gone into establishing a new product."
Another segment (in the lifestyle inhibitor category) that the company is looking at is cough and cold. Dr Morepen is currently negotiating the acquisition of an OTC brand here. The company will only acquire a brand that is able to pay for itself within a period of three years post acquisition.
Alongside, Dr Morepen is also working at beefing up its lifestyle enhancer portfolio to meet its objective of "super fast growth". In the lifestyle enhancer category Dr Morepen currently has brands like Dab Fizz (instant antacid), Sat Isabgol, (natural laxative), Gol Goli (digestive candy), C-Sip (energy drink), Y-Sugar (low calorie sweetener), and 2-Kool (throat drops). Over the next six months or so, the company plans to get into health food and vitaminised drinks markets.
In all the new markets Dr Morepen sees advertising playing a key role to support its brand building efforts. So far the company has spent about Rs 5 crore on advertising. This fiscal Dr Morepen hopes to increase the budget as much as five-fold and spend between Rs 20 crore and Rs 25 crore across all brands. © 2002 agencyfaqs!