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Horlicks stretches out

Shobhana Subramanian  |  Mumbai 

Zubair Ahmed

GlaxoSmithKline Consumer Healthcare is leveraging on equity to get into new categories. Will the move pay off?

Walk in to any small eatery in the southern and eastern parts of the country and you will find it hard to miss the bottle of at the cash counter. is not a young brand — it has been around for decades. After imports were disallowed in 1955, Hindustan Milkfood Manufacturers started making the drink in the country in 1960 and now it’s owned by GlaxoSmithKline Consumer Healthcare. But there are no evident signs of ageing. Horlicks’ market share of the Rs 2,305-crore milk beverages market is above 50 per cent (source: The Nielsen Company). Rivals know beating in the market place is a tough act. Nestlé has stopped making Milo and new entrant Dabur India has decided to stay clear of and pitch its Chyawan Junior against Consumer Healthcare’s other beverage brand, Boost.

It would be foolish not to leverage the equity of such a brand. Thus, Consumer Healthcare has decided to use the brand to get into new categories. In the last few months, it has launched biscuits for children, a nutrition drink for women, an energy bar and chilled milk. More could follow in the days to come.

“Our business was doing well as was the economy. So both from our point of view as also from the consumers’ perspective, it was a good time to shift gears,” says Consumer Healthcare Managing Director Ahmed believes the new products will make a meaningful contribution to the company’s top line in the next few years. “These categories are relevant and our research shows that consumers need these products. We are not creating needs, we’re simply fulfilling them.”

Those who know Ahmed well will hardly be surprised by the fast pace of product launches. As the chief executive of Gillette, his previous assignment, he tried to grow the business rapidly with a slew of new shaving products. He left the grooming products company two years ago after it was acquired by Procter & Gamble to run Consumer Healthcare.

Something for everyone
Ahmed is aware that new products do sometimes end up as casualties but he has taken confidence from the strength of the brand. “We’re riding the equity of and supplementing it with consumer insights,” says he. may be the country’s sixth most-trusted brand but Consumer Healthcare is playing in a market where consumers can be demanding. And rival brands are no rabbits: Cadbury’s Bournvita and Heinz’s Complan each with a 15 per cent share.

So far though, Consumer Healthcare has succeeded in segmenting the customer base by catering for specific needs of women at the same time cashing in on the increasing population of children with Ogilvy & Mather Country Head (planning) Madhukar Sabnavis feels “the brand today talks to every member of the family rather than the entire family.”

With Junior Horlicks, launched in 1995, Consumer Healthcare had positioned a product exclusively for children between the ages of two and five. That, Anand Ramanathan, who advises companies in the FMCG space at consulting firm KPMG, points out is a crucial segment given that India is a young country — a clever ploy to engage consumers at a very young age. The Junior brand has grown to become a Rs 150-crore brand now, says Consumer Healthcare head of Shubhajit Sen. Taking advantage, the company launched Junior biscuits last month. Again, five years ago, Consumer Healthcare had reached out to pregnant and lactating mothers with Mother’s Horlicks; last year it came up with Women’s catering for women across age groups.

“The idea is to address all age groups. There’s Lite for the elderly who often have a sugar problem and for the youth we have Nutribar which we launched in February this year,” says Ahmed.

With Nutribar, positioned on the twin planks of health and convenience, Consumer Healthcare has leveraged the brand to venture into an entirely new product category — energy cereal bars. Says Ernst & Young Partner Ashish Nanda: “When you’ve created a strong brand, it opens up doors to new variants and even new categories. Unless you enter a completely unrelated area, there’s little risk in extending the brand to other products.”

While the company hopes that Nutribar will chip in with about Rs 100-150 crore of revenues in five years, it hasn’t stopped there. In April this year, it invited consumers to taste its summer drink called Chilled Doodh (milk), available in four flavours. Sen concedes that the product will be up against some keen competition in the Rs 45-crore chilled milk category from Amul Kool and strong regional players like MAFCO in Mumbai, but he hopes the brand can pull in revenues of Rs 50-100 crore in about five years — more than the current market size.

Of course, Consumer Healthcare will promote other brands too — it does need to hedge its risks, after all. Thus, in April, Glaxo ActiGrow, a protein supplement for children, was unveiled. Ahmed explains that the company is cashing in on the brand equity that Glaxo still has with mothers and will leverage that for specialist products like ActiGrow. “We’re looking at new products across food and beverages, like healthy snack foods because the opportunities aren’t taken care of simply by Horlicks,” says Ahmed.

Full of beans
At the moment, takes care of Consumer Healthcare’s top line. The brand, which was worth around Rs 800 crore in the early parts of the decade, is today 50 per cent bigger at close to Rs 1,200 core, bringing in the bulk of the company’s annual turnover of Rs 1,580 crore.

If Indians drink more than five million cups of everyday it’s because Consumer Healthcare has worked on the product. At one time, in the late 1990s, market research showed that was seen “as a nourishing, but boring drink” and was beginning to lose significance. What’s more, consumers were beginning to prefer flavours over nutrients.

So, in 2003, the brand was revamped: It was made tastier and launched in two new flavours — vanilla and honey. The company had earlier launched a chocolate version to try and win over consumers in the North and West who typically prefer chocolate-flavoured drinks. But the success was limited. Nearly half of its sales are still generated from the South, while 35 per cent come from East. But that doesn’t seem to bother investment analysts. IDFC SSKI Managing Director Nikhil Vora points out that Consumer Healthcare has held on to its market share in a space that’s grown at around 20 per cent in the last couple of years. “As the market leader, the brand could yield some share but volumes have grown in double digits for five consecutive quarters.”

Not just higher tonnage, the company does succeed in extracting a price from consumers. In January this year, for instance, prices were upped by about 5 per cent. What has worked in the company’s favour, says KPMG’s Ramanathan, is value-for-money positioning. “may not be a cheap product but it’s been communicated as a value-for-money product. Parents today are willing to spend more on nutrition for their children and that has helped Consumer Healthcare.”

To that extent, may have gained over competitors such as Complan which are perceived to be more expensive, a perception that hasn’t changed over time. Says Ahmed: “Compared to competitors, is the best money proposition and, moreover, the consumer gets value for the money spent.” For the new launches too, he has in mind a similar value proposition, though final prices will be fixed keeping in mind the target group. “Women’s is far more expensive than the base but that’s because the consumer is getting much more and there’s no other product available. Nutribars will be primarily a metro phenomenon to start with, so the pricing has been decided accordingly.”

Nourishing the brand


does not feel the need for a brand ambassador, though Consumer Healthcare has engaged expensive celebrities like Kapil Dev, Sachin Tendulkar and Mahendra Singh Dhoni to endorse Boost. Still, the several new launches could push up the ad budget of one of the country’s top advertisers, most of which is spent on television. Sen believes that spends could inch up over the Rs 194 crore that Consumer Healthcare spent on advertising and promotions last year. Typically, FMCG companies spent 12 to 13 per cent of their turnover on brand promotion.

The radio, through which reached out to mothers even 40 years ago, is still an effective channel in states such as Bihar or Orissa where consumers don’t have access to television or where power cuts are frequent. In the early years, mothers were the sole target audience since the product catered to the entire family. However, once pester power became big in the 1990s, the advertisements started talking to children too. The change worked because it was also the time when mothers’ mindset was changing — they had become more indulgent and let children drink what they liked, rather than imposing on them a drink of their own choice.

Today, JWT Client Service Director Debarpita Banerjee believes, the Internet can be a good way to connect with kids. So, there are tips posted on examinations on the website — “Exams ka bhoot bhagao” (Drive the exam demon away). Besides, the company has also reached out to children with Wizkids, a contact programme that provides a platform for schoolchildren across 25 cities to showcase their talent.

Adding rural reach
Under Ahmed, Consumer Healthcare has upped the ante on distribution. In an aggressive ‘Go to Market’ approach earlier this year, it created a second layer of distributors in the smaller towns to supplement the existing chain of around 500 big distributors. Most of these 4,000 sub-distributors were appointed in the eastern and southern parts of the country. The idea, according to Vice-president (sales) Navneet Saluja, is to increase the retail reach by at least 30 per cent. “Right now we reach out to around 25 per cent of the rural market and we hope to extend this reach to about 40 per cent of the hinterland in a couple of years. We’re looking to have a presence in towns that have a population of 5,000 people.”

As for reaching out to customers in the urban markets, Sen has begun to work with retailers to create excitement and awareness. “In some outlets, we even created play areas for children,” he says. Although modern trade remains a relatively small channel currently, fetching just 4.5 per cent of the firm’s sales, Saluja’s aiming for higher shares. Ahmed’s not worried about the expense. “We’ll be leveraging the P&L (profit and loss account) for some time because we need to invest in the business and new products,” he says. Clearly, no effort is being spared to grow

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Horlicks stretches out

GlaxoSmithKline Consumer Healthcare is leveraging on Horlicks' brand equity to get into new categories.

GlaxoSmithKline Consumer Healthcare is leveraging on equity to get into new categories. Will the move pay off?

Walk in to any small eatery in the southern and eastern parts of the country and you will find it hard to miss the bottle of at the cash counter. is not a young brand — it has been around for decades. After imports were disallowed in 1955, Hindustan Milkfood Manufacturers started making the drink in the country in 1960 and now it’s owned by GlaxoSmithKline Consumer Healthcare. But there are no evident signs of ageing. Horlicks’ market share of the Rs 2,305-crore milk beverages market is above 50 per cent (source: The Nielsen Company). Rivals know beating in the market place is a tough act. Nestlé has stopped making Milo and new entrant Dabur India has decided to stay clear of and pitch its Chyawan Junior against Consumer Healthcare’s other beverage brand, Boost.

It would be foolish not to leverage the equity of such a brand. Thus, Consumer Healthcare has decided to use the brand to get into new categories. In the last few months, it has launched biscuits for children, a nutrition drink for women, an energy bar and chilled milk. More could follow in the days to come.

“Our business was doing well as was the economy. So both from our point of view as also from the consumers’ perspective, it was a good time to shift gears,” says Consumer Healthcare Managing Director Ahmed believes the new products will make a meaningful contribution to the company’s top line in the next few years. “These categories are relevant and our research shows that consumers need these products. We are not creating needs, we’re simply fulfilling them.”

Those who know Ahmed well will hardly be surprised by the fast pace of product launches. As the chief executive of Gillette, his previous assignment, he tried to grow the business rapidly with a slew of new shaving products. He left the grooming products company two years ago after it was acquired by Procter & Gamble to run Consumer Healthcare.

Something for everyone
Ahmed is aware that new products do sometimes end up as casualties but he has taken confidence from the strength of the brand. “We’re riding the equity of and supplementing it with consumer insights,” says he. may be the country’s sixth most-trusted brand but Consumer Healthcare is playing in a market where consumers can be demanding. And rival brands are no rabbits: Cadbury’s Bournvita and Heinz’s Complan each with a 15 per cent share.

So far though, Consumer Healthcare has succeeded in segmenting the customer base by catering for specific needs of women at the same time cashing in on the increasing population of children with Ogilvy & Mather Country Head (planning) Madhukar Sabnavis feels “the brand today talks to every member of the family rather than the entire family.”

With Junior Horlicks, launched in 1995, Consumer Healthcare had positioned a product exclusively for children between the ages of two and five. That, Anand Ramanathan, who advises companies in the FMCG space at consulting firm KPMG, points out is a crucial segment given that India is a young country — a clever ploy to engage consumers at a very young age. The Junior brand has grown to become a Rs 150-crore brand now, says Consumer Healthcare head of Shubhajit Sen. Taking advantage, the company launched Junior biscuits last month. Again, five years ago, Consumer Healthcare had reached out to pregnant and lactating mothers with Mother’s Horlicks; last year it came up with Women’s catering for women across age groups.

“The idea is to address all age groups. There’s Lite for the elderly who often have a sugar problem and for the youth we have Nutribar which we launched in February this year,” says Ahmed.

With Nutribar, positioned on the twin planks of health and convenience, Consumer Healthcare has leveraged the brand to venture into an entirely new product category — energy cereal bars. Says Ernst & Young Partner Ashish Nanda: “When you’ve created a strong brand, it opens up doors to new variants and even new categories. Unless you enter a completely unrelated area, there’s little risk in extending the brand to other products.”

While the company hopes that Nutribar will chip in with about Rs 100-150 crore of revenues in five years, it hasn’t stopped there. In April this year, it invited consumers to taste its summer drink called Chilled Doodh (milk), available in four flavours. Sen concedes that the product will be up against some keen competition in the Rs 45-crore chilled milk category from Amul Kool and strong regional players like MAFCO in Mumbai, but he hopes the brand can pull in revenues of Rs 50-100 crore in about five years — more than the current market size.

Of course, Consumer Healthcare will promote other brands too — it does need to hedge its risks, after all. Thus, in April, Glaxo ActiGrow, a protein supplement for children, was unveiled. Ahmed explains that the company is cashing in on the brand equity that Glaxo still has with mothers and will leverage that for specialist products like ActiGrow. “We’re looking at new products across food and beverages, like healthy snack foods because the opportunities aren’t taken care of simply by Horlicks,” says Ahmed.

Full of beans
At the moment, takes care of Consumer Healthcare’s top line. The brand, which was worth around Rs 800 crore in the early parts of the decade, is today 50 per cent bigger at close to Rs 1,200 core, bringing in the bulk of the company’s annual turnover of Rs 1,580 crore.

If Indians drink more than five million cups of everyday it’s because Consumer Healthcare has worked on the product. At one time, in the late 1990s, market research showed that was seen “as a nourishing, but boring drink” and was beginning to lose significance. What’s more, consumers were beginning to prefer flavours over nutrients.

So, in 2003, the brand was revamped: It was made tastier and launched in two new flavours — vanilla and honey. The company had earlier launched a chocolate version to try and win over consumers in the North and West who typically prefer chocolate-flavoured drinks. But the success was limited. Nearly half of its sales are still generated from the South, while 35 per cent come from East. But that doesn’t seem to bother investment analysts. IDFC SSKI Managing Director Nikhil Vora points out that Consumer Healthcare has held on to its market share in a space that’s grown at around 20 per cent in the last couple of years. “As the market leader, the brand could yield some share but volumes have grown in double digits for five consecutive quarters.”

Not just higher tonnage, the company does succeed in extracting a price from consumers. In January this year, for instance, prices were upped by about 5 per cent. What has worked in the company’s favour, says KPMG’s Ramanathan, is value-for-money positioning. “may not be a cheap product but it’s been communicated as a value-for-money product. Parents today are willing to spend more on nutrition for their children and that has helped Consumer Healthcare.”

To that extent, may have gained over competitors such as Complan which are perceived to be more expensive, a perception that hasn’t changed over time. Says Ahmed: “Compared to competitors, is the best money proposition and, moreover, the consumer gets value for the money spent.” For the new launches too, he has in mind a similar value proposition, though final prices will be fixed keeping in mind the target group. “Women’s is far more expensive than the base but that’s because the consumer is getting much more and there’s no other product available. Nutribars will be primarily a metro phenomenon to start with, so the pricing has been decided accordingly.”

Nourishing the brand
does not feel the need for a brand ambassador, though Consumer Healthcare has engaged expensive celebrities like Kapil Dev, Sachin Tendulkar and Mahendra Singh Dhoni to endorse Boost. Still, the several new launches could push up the ad budget of one of the country’s top advertisers, most of which is spent on television. Sen believes that spends could inch up over the Rs 194 crore that Consumer Healthcare spent on advertising and promotions last year. Typically, FMCG companies spent 12 to 13 per cent of their turnover on brand promotion.

The radio, through which reached out to mothers even 40 years ago, is still an effective channel in states such as Bihar or Orissa where consumers don’t have access to television or where power cuts are frequent. In the early years, mothers were the sole target audience since the product catered to the entire family. However, once pester power became big in the 1990s, the advertisements started talking to children too. The change worked because it was also the time when mothers’ mindset was changing — they had become more indulgent and let children drink what they liked, rather than imposing on them a drink of their own choice.

Today, JWT Client Service Director Debarpita Banerjee believes, the Internet can be a good way to connect with kids. So, there are tips posted on examinations on the website — “Exams ka bhoot bhagao” (Drive the exam demon away). Besides, the company has also reached out to children with Wizkids, a contact programme that provides a platform for schoolchildren across 25 cities to showcase their talent.

Adding rural reach
Under Ahmed, Consumer Healthcare has upped the ante on distribution. In an aggressive ‘Go to Market’ approach earlier this year, it created a second layer of distributors in the smaller towns to supplement the existing chain of around 500 big distributors. Most of these 4,000 sub-distributors were appointed in the eastern and southern parts of the country. The idea, according to Vice-president (sales) Navneet Saluja, is to increase the retail reach by at least 30 per cent. “Right now we reach out to around 25 per cent of the rural market and we hope to extend this reach to about 40 per cent of the hinterland in a couple of years. We’re looking to have a presence in towns that have a population of 5,000 people.”

As for reaching out to customers in the urban markets, Sen has begun to work with retailers to create excitement and awareness. “In some outlets, we even created play areas for children,” he says. Although modern trade remains a relatively small channel currently, fetching just 4.5 per cent of the firm’s sales, Saluja’s aiming for higher shares. Ahmed’s not worried about the expense. “We’ll be leveraging the P&L (profit and loss account) for some time because we need to invest in the business and new products,” he says. Clearly, no effort is being spared to grow

image
Business Standard
177 22

Horlicks stretches out

GlaxoSmithKline Consumer Healthcare is leveraging on equity to get into new categories. Will the move pay off?

Walk in to any small eatery in the southern and eastern parts of the country and you will find it hard to miss the bottle of at the cash counter. is not a young brand — it has been around for decades. After imports were disallowed in 1955, Hindustan Milkfood Manufacturers started making the drink in the country in 1960 and now it’s owned by GlaxoSmithKline Consumer Healthcare. But there are no evident signs of ageing. Horlicks’ market share of the Rs 2,305-crore milk beverages market is above 50 per cent (source: The Nielsen Company). Rivals know beating in the market place is a tough act. Nestlé has stopped making Milo and new entrant Dabur India has decided to stay clear of and pitch its Chyawan Junior against Consumer Healthcare’s other beverage brand, Boost.

It would be foolish not to leverage the equity of such a brand. Thus, Consumer Healthcare has decided to use the brand to get into new categories. In the last few months, it has launched biscuits for children, a nutrition drink for women, an energy bar and chilled milk. More could follow in the days to come.

“Our business was doing well as was the economy. So both from our point of view as also from the consumers’ perspective, it was a good time to shift gears,” says Consumer Healthcare Managing Director Ahmed believes the new products will make a meaningful contribution to the company’s top line in the next few years. “These categories are relevant and our research shows that consumers need these products. We are not creating needs, we’re simply fulfilling them.”

Those who know Ahmed well will hardly be surprised by the fast pace of product launches. As the chief executive of Gillette, his previous assignment, he tried to grow the business rapidly with a slew of new shaving products. He left the grooming products company two years ago after it was acquired by Procter & Gamble to run Consumer Healthcare.

Something for everyone
Ahmed is aware that new products do sometimes end up as casualties but he has taken confidence from the strength of the brand. “We’re riding the equity of and supplementing it with consumer insights,” says he. may be the country’s sixth most-trusted brand but Consumer Healthcare is playing in a market where consumers can be demanding. And rival brands are no rabbits: Cadbury’s Bournvita and Heinz’s Complan each with a 15 per cent share.

So far though, Consumer Healthcare has succeeded in segmenting the customer base by catering for specific needs of women at the same time cashing in on the increasing population of children with Ogilvy & Mather Country Head (planning) Madhukar Sabnavis feels “the brand today talks to every member of the family rather than the entire family.”

With Junior Horlicks, launched in 1995, Consumer Healthcare had positioned a product exclusively for children between the ages of two and five. That, Anand Ramanathan, who advises companies in the FMCG space at consulting firm KPMG, points out is a crucial segment given that India is a young country — a clever ploy to engage consumers at a very young age. The Junior brand has grown to become a Rs 150-crore brand now, says Consumer Healthcare head of Shubhajit Sen. Taking advantage, the company launched Junior biscuits last month. Again, five years ago, Consumer Healthcare had reached out to pregnant and lactating mothers with Mother’s Horlicks; last year it came up with Women’s catering for women across age groups.

“The idea is to address all age groups. There’s Lite for the elderly who often have a sugar problem and for the youth we have Nutribar which we launched in February this year,” says Ahmed.

With Nutribar, positioned on the twin planks of health and convenience, Consumer Healthcare has leveraged the brand to venture into an entirely new product category — energy cereal bars. Says Ernst & Young Partner Ashish Nanda: “When you’ve created a strong brand, it opens up doors to new variants and even new categories. Unless you enter a completely unrelated area, there’s little risk in extending the brand to other products.”

While the company hopes that Nutribar will chip in with about Rs 100-150 crore of revenues in five years, it hasn’t stopped there. In April this year, it invited consumers to taste its summer drink called Chilled Doodh (milk), available in four flavours. Sen concedes that the product will be up against some keen competition in the Rs 45-crore chilled milk category from Amul Kool and strong regional players like MAFCO in Mumbai, but he hopes the brand can pull in revenues of Rs 50-100 crore in about five years — more than the current market size.

Of course, Consumer Healthcare will promote other brands too — it does need to hedge its risks, after all. Thus, in April, Glaxo ActiGrow, a protein supplement for children, was unveiled. Ahmed explains that the company is cashing in on the brand equity that Glaxo still has with mothers and will leverage that for specialist products like ActiGrow. “We’re looking at new products across food and beverages, like healthy snack foods because the opportunities aren’t taken care of simply by Horlicks,” says Ahmed.

Full of beans
At the moment, takes care of Consumer Healthcare’s top line. The brand, which was worth around Rs 800 crore in the early parts of the decade, is today 50 per cent bigger at close to Rs 1,200 core, bringing in the bulk of the company’s annual turnover of Rs 1,580 crore.

If Indians drink more than five million cups of everyday it’s because Consumer Healthcare has worked on the product. At one time, in the late 1990s, market research showed that was seen “as a nourishing, but boring drink” and was beginning to lose significance. What’s more, consumers were beginning to prefer flavours over nutrients.

So, in 2003, the brand was revamped: It was made tastier and launched in two new flavours — vanilla and honey. The company had earlier launched a chocolate version to try and win over consumers in the North and West who typically prefer chocolate-flavoured drinks. But the success was limited. Nearly half of its sales are still generated from the South, while 35 per cent come from East. But that doesn’t seem to bother investment analysts. IDFC SSKI Managing Director Nikhil Vora points out that Consumer Healthcare has held on to its market share in a space that’s grown at around 20 per cent in the last couple of years. “As the market leader, the brand could yield some share but volumes have grown in double digits for five consecutive quarters.”

Not just higher tonnage, the company does succeed in extracting a price from consumers. In January this year, for instance, prices were upped by about 5 per cent. What has worked in the company’s favour, says KPMG’s Ramanathan, is value-for-money positioning. “may not be a cheap product but it’s been communicated as a value-for-money product. Parents today are willing to spend more on nutrition for their children and that has helped Consumer Healthcare.”

To that extent, may have gained over competitors such as Complan which are perceived to be more expensive, a perception that hasn’t changed over time. Says Ahmed: “Compared to competitors, is the best money proposition and, moreover, the consumer gets value for the money spent.” For the new launches too, he has in mind a similar value proposition, though final prices will be fixed keeping in mind the target group. “Women’s is far more expensive than the base but that’s because the consumer is getting much more and there’s no other product available. Nutribars will be primarily a metro phenomenon to start with, so the pricing has been decided accordingly.”

Nourishing the brand
does not feel the need for a brand ambassador, though Consumer Healthcare has engaged expensive celebrities like Kapil Dev, Sachin Tendulkar and Mahendra Singh Dhoni to endorse Boost. Still, the several new launches could push up the ad budget of one of the country’s top advertisers, most of which is spent on television. Sen believes that spends could inch up over the Rs 194 crore that Consumer Healthcare spent on advertising and promotions last year. Typically, FMCG companies spent 12 to 13 per cent of their turnover on brand promotion.

The radio, through which reached out to mothers even 40 years ago, is still an effective channel in states such as Bihar or Orissa where consumers don’t have access to television or where power cuts are frequent. In the early years, mothers were the sole target audience since the product catered to the entire family. However, once pester power became big in the 1990s, the advertisements started talking to children too. The change worked because it was also the time when mothers’ mindset was changing — they had become more indulgent and let children drink what they liked, rather than imposing on them a drink of their own choice.

Today, JWT Client Service Director Debarpita Banerjee believes, the Internet can be a good way to connect with kids. So, there are tips posted on examinations on the website — “Exams ka bhoot bhagao” (Drive the exam demon away). Besides, the company has also reached out to children with Wizkids, a contact programme that provides a platform for schoolchildren across 25 cities to showcase their talent.

Adding rural reach
Under Ahmed, Consumer Healthcare has upped the ante on distribution. In an aggressive ‘Go to Market’ approach earlier this year, it created a second layer of distributors in the smaller towns to supplement the existing chain of around 500 big distributors. Most of these 4,000 sub-distributors were appointed in the eastern and southern parts of the country. The idea, according to Vice-president (sales) Navneet Saluja, is to increase the retail reach by at least 30 per cent. “Right now we reach out to around 25 per cent of the rural market and we hope to extend this reach to about 40 per cent of the hinterland in a couple of years. We’re looking to have a presence in towns that have a population of 5,000 people.”

As for reaching out to customers in the urban markets, Sen has begun to work with retailers to create excitement and awareness. “In some outlets, we even created play areas for children,” he says. Although modern trade remains a relatively small channel currently, fetching just 4.5 per cent of the firm’s sales, Saluja’s aiming for higher shares. Ahmed’s not worried about the expense. “We’ll be leveraging the P&L (profit and loss account) for some time because we need to invest in the business and new products,” he says. Clearly, no effort is being spared to grow

image
Business Standard
177 22